Since the 2003 Bush tax cuts, the media have joined the chorus of Democrats in singing an “anti-tax cut” hymn. As another election looms, some of the singers have changed, but the song remains the same.
“Three trillion dollars worth of tax cuts … No wonder we have a $450 billion deficit,” said Democratic then-candidate Howard Dean on NBC’s Aug. 5, 2003, “Today” show just after they went into effect.
Democrats and the media insisted the tax cuts would only cause the federal deficit to get worse. Instead, deficit projections have dropped to the tune of more than $275 billion just in the last couple of years.
Verse one: It won’t work.
Flash back to July 2003, as President George W. Bush kicked off the Jobs and Growth Act, aka tax cuts. In a speech in Michigan, he laid out his rationale: “I’ve got a plan to cut the deficit in half over the next five years … First thing you want to do in trimming the deficit is to make sure you get more revenues into the Treasury. The best way to get more revenues in the Treasury is not raise taxes, slowing down the economy, it's cut taxes to create more economic growth.”
The media, however, were skeptical to say the least.
ABC’s George Stephanopoulos looked back instead of forward on the May 11, 2003, edition of “This Week.” He asked Treasury Secretary John Snow, “You say the president’s jobs program is gonna give the economy a boost. But, you know, the president passed a big tax cut back in 2001, but there’ve been 1.7 million jobs almost lost since then. If the tax cut didn’t work then, why is it gonna work now?”
That view has since proven wrong, with 6.6 million jobs added since August 2003 – three straight years of job growth – and unemployment falling to a low 4.6 percent.
In fact, “beginning in 2003, employment began to rise dramatically, around the time that the tax rate reductions were enacted,” noted economist Daniel J. Mitchell, a Heritage Foundation fellow and an adviser to the Business & Media Institute. “The 2003 tax rate reductions further enhanced America’s competitive advantage by reducing the tax penalty on work, investment, and entrepreneurship,” wrote Mitchell in a Sept. 28, 2006, report.
Verse two: It will bloat the deficit.
Blaming tax cuts for the budget deficit has always been a popular media ballad, as the Business & Media Institute pointed out in “Tax & Spin.” Reporters have often failed to include other reasons for the deficit of the early 2000s, such as the collapse of the ’90s tech bubble and the terrorist attacks of Sept. 11, 2001.
NBC’s Tim Russert voiced the rising-deficits mantra on the July 20, 2003, “Meet the Press.” “Would it not have been better to have smaller tax cuts in order to keep down the deficits and fulfill the obligations we have with terrorism, Iraq, Afghanistan and so forth?” Russert asked. The Media Research Center has documented Russert’s campaign in the past to repeal the Bush tax cuts.
Flash forward to 2006, when CNN’s Lou Dobbs went so far as to promote tax increases. On the July 12, 2006, CBS “Early Show” Dobbs said that “without meaningful, meaningful increases in taxation we’re not going to see this deficit erode.”
Honey, what shrunk the deficit?
For the media, tax cuts and a rising deficit seem to be inextricably linked.
Bush’s plan to keep tax cuts and reduce the deficit appeared as a contradiction to ABC’s Stephanopoulos on the May 14, 2006, “This Week.” “When you mention that he’s making Bush’s tax cuts permanent as a plus to him as a conservative, that is going to collide with his talk about the deficit,” Stephanopoulos said of Sen. John McCain (R-Ariz.).
Back in 2003, CBS reporter Bob Orr voiced a similar concern, expressing doubt that the deficit could be reduced while the tax cuts remained. “New estimates from the Congressional Budget Office are grim, predicting a $480 billion deficit next year and $1.4 trillion in new debt over the next decade. And that is assuming President Bush and Congress allow recent tax cuts to expire by 2011, something few here on Capitol Hill expect will happen,” Orr said on the Aug. 31, 2003, “Evening News.”
But in 2005, a surge of higher tax revenues defied media predictions, resulting in a deficit reduction of $100 billion, according to the July 2, 2005, Washington Post.
Higher revenues did the same in 2006. Deficit projections dropped throughout the year until the White House’s October 11 announcement that the deficit for fiscal year 2006 was $248 billion, down from the February prediction of $423 billion. Bush had pledged the deficit would be cut in half by 2009, but the recent drop accomplished that goal three years early. The White House based its halving projection on the FY 2004 projected peak of $521 billion.
Brian Williams reported on the Oct. 11, 2006, “NBC Nightly News” that the deficit had fallen to its “lowest point in four years.”