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CyberAlert -- 05/05/1997 -- Friday's Deal: Imaginary Budget Cuts; Awful Tax Cuts

Friday's Deal: Imaginary Budget Cuts; Awful Tax Cuts

1. Republicans "cut" while Democrats "save;" Dukakis "cut" but Weld's budget "was the first...to cut spending from the previous year."

2. Networks say the budget deal means spending will be cut and the poor hurt. But in reality spending will soar.

3. NBC worries that GOP tax cut plans would "explode" the deficit; Carlson, Roberts and the Washington Post argue against any tax cut

4. A CyberAlert factoid featured Sunday on CNN's Reliable Sources.


1) Before reviewing how the media mischaracterized the budget deal announced Friday, you must understand how the media cover budget issues.

Rule #1 -- Republicans "cut" while Democrats "save." As pointed out by MRC news analyst Clay Waters, here's part of a April 24 Inside Politics story by CNN's Wolf Blitzer:

"White House officials and Democratic lawmakers say they are confident the Republicans will accept the one-hundred million dollars in Medicare savings, the Republicans having been badly burned last year because of their push for greater cuts. In the meantime, the Republicans are still holding out for deeper tax and spending cuts."
Rule #2: "Cuts" Don't Mean the Government Will Spend Less Money, Just Less More Than Advocates Want. In a May 3 Washington Post story on the record of Massachusetts Governor Bill Weld, who will soon resign if ratified as Ambassador to Mexico, reporter Dale Russakoff wrote:

"Weld governed as a foil to his Democratic predecessor, the workaholic Democrat Michael S. Dukakis, who raised taxes and cut spending as the recession devastated this state and deficits ballooned in the late 1980s. Weld, narrowly elected in 1990, spurned tax increases and took a machete to spending and human services, drawing almost daily attacks as 'Governor Weld To Do' from the poor, the elderly and state employees. His 1992 budget was the first in a decade to cut spending from the previous year...."
Hold it. Weld's budget "was the first in a decade to cut spending from the previous year." So, that means Russakoff's assertion two sentences earlier that Dukakis "cut spending" just a few years earlier is false.


2) The budget deal reached Friday locks in spending hikes across the board as well as providing money for Clinton's new programs and for tax cuts favored by Republicans. But that's not what Dan Rather told CBS Evening News viewers Friday (May 2) night:

"Good evening. President Clinton and Republican congressional leaders reached a landmark deal today -- agreement on a five year plan which is designed to actually balance the federal budget. This plan features both tax breaks and cuts in spending..."
On World News Tonight anchor Peter Jennings announced:
"The budget deal includes $135 billion in tax cuts, $350 billion in spending cuts. The largest spending cuts will come from restraining the growth of Medicare, the second largest savings is in defense spending."
Of the broadcast network reporters, only NBC's Lisa Myers on Nightly News gave any hint that spending will continue to soar, noting that "Some Republicans oppose the agreement. They say the President succeeded in increasing spending too much." Senator Phil Gramm, in a soundbite, explained: "He gets an ironclad guarantee that the era of big government is alive and well and guaranteed in Washington, DC."
The next day, on the May 3 NBC Nightly News, John Palmer focused on the concerns of liberals upset by the lack of spending, though it will increase across the board:

"For the nation's five million poor children there will be money for broader health care coverage and expansion of the Head Start program for pre-schoolers, but critics say that's not enough."
Peter Edelman, Former Assistant Secretary of HHS: "We ought to be talking about more investments in things like Head Start and other important efforts for the education of our children."
Edelman resigned from the Clinton team to protest the welfare reform bill. Palmer concluded:

"...The budget agreement is only a framework. Congress still has to vote on the actual appropriations that will directly effect people's lives. And there could be trouble, from those who worry that the budget is weighted too much in favor of the rich at the expense of the poor. John Palmer, NBC News, at the White House."
Note that they "worry," not that they "claim."
On ABC's World News Tonight/Saturday on May 3 reporter Karla Davis intoned:

"In addition to $85 billion in tax cuts, the plan calls for $115 billion savings in Medicare. It's the biggest reduction in a social program ever endorsed by a President. Even President Reagan, painted by critics as the destroyer of the social safety net, didn't reign in Medicare spending. It grew from $45 billion to $90 billion during his two terms...."
+++ Reality Check: Davis's spin is surreal. The media were among the "critics" of Reagan who falsely accused him of cutting social spending. But, just seconds before, in the previous sentence, Davis pulled the same maneuver!
In summarizing Clinton's proposed Budget of the United States for Fiscal Year 1998, the Office of Management and Budget wrote in its official budget outline:
"With no changes in law, net Medicare outlays will rise by an estimated 54 percent from 1997 to 2002 -- from $191.6 billion to $295.1 billion. Net Medicare outlays will grow by an average of nine percent a year over this period."
Friday's budget deal will provide $115 billion in "savings" over the five years, about eight percent less than the 54 percent forecast. So, spending will rise 46 percent. Quite a "cut" or "reduction."
But in the media world, liberals "protect" and conservatives "cripple." Here are the second and third paragraphs of New York Times reporter David Rosenbaum's May 3 "news analysis" on what each side got out of the deal:
"The President accepted the Republican principles of tax cuts for the rich and the middle class and abandoned the Democratic theme of protecting Medicare from cuts at all costs. In return, he got some extra money he wanted for education and welfare.
"Republicans got their tax cuts for families and investors and some savings in domestic programs. But they dropped the plans they had in 1995 and 1996 for crippling Medicare and Medicaid, abolishing government departments and agencies, expanding the military and relaxing environmental protections."


3) Another theme of the weekend: railing against tax cuts.

-- On Friday's Nightly News NBC reporter David Bloom emphasized: "This balanced budget deal was on again, off again over the last 48 hours, but today when Republican leaders in Congress agreed that the tax cuts in the plan would not explode over the next five to ten years, well the deal got done..."
(Interestingly, on the May 4 Face the Nation OMB Director Franklin Raines used the same "explode" metaphor: "We don't believe that the capital gains tax cut is the best use of this tax cut amount. But if there's going to be one we think that it ought to be one that does not explode in the out years...")
At least we know that Bloom reads the "talking points" issued by the White House.
-- Up next on Friday's Nightly News, Tom Brokaw relayed the findings of a skewed poll: "According to a new NBC News/Wall Street Journal poll a majority would rather see a budget that forgoes tax cuts so we can eliminate the deficit. Less than a third said they would rather keep the deficit in order to have a tax cut."

On screen: Eliminate
Deficit 53%
No Tax Cut

Cut Taxes 32%
Keep Deficit

Talk about a false choice. Only liberals think you must choose between tax cuts and deficit reduction.

-- In a front page "news analysis" in the May 3 Washington Post reporter Clay Chandler insisted the modest tax cuts, not far greater spending increases, will grow the deficit:

"Even as budget negotiators slapped one another on the back for finally closing a deal, fiscal experts cautioned that yesterday's agreement would do little to hold the budget in balance beyond 2002 when retiring baby boomers stop paying taxes and begin to claim Medicare, Social Security and other costly federal benefits.
"And many experts warned that the tax cuts outlined in yesterday's agreement -- a package estimated to lower federal revenue by $250 billion over the next ten years -- could make the long-term deficit outlook considerably worse."
-- Time's Margaret Carlson, on Sunday's CNN Late Edition, insisted:
"The estate tax goes to the top one percent of people, maybe ten thousand people at the most, because there's already a $600,000 exemption. So here you have a very narrow-cast tax break. And the capital gains, it's always argued there are people who have their retirement plans and whatever, but still they get such a little bit part of that break -- and it still goes to the top tier."
Actually, it goes to their survivors not the top one percent. They're dead. And if they are a farmer or small business owner the value of their property and/or equipment could easily go into the millions, forcing inheritors to sell off holdings or the whole business just to afford the death tax.
Next, Steve Roberts of the New York Daily News and formerly with U.S. News, endorsed the view of a liberal Senator Paul Wellstone who opposes the deal:
"The last thing in the world this economy needs is more stimulus right now. If it's stimulated right now then you're going to have higher interest rates. I think Wellstone and the other Democrats have a case when they say the tax cuts are tilted too much to the wealthy..."


4) Reliable Sources, CNN's Sunday morning panel show on the media, highlighted an item from the May 1 CyberAlert. In the end of the show "Good, Bad & Ugly" segment, Martin Schram, a Scripps- Howard columnist, informed viewers:

"There's yet one more bit of hard evidence that network TV news is going soft. The Media Research Center, a conservative group, has reported to us, and we're glad that they did, that CBS and NBC gave more time on Wednesday night to Chelsea Clinton's choice of a college than to Janet Reno's confrontation with Senate Republicans over why she's decided not to appoint an independent counsel to investigate the fundraising controversy. That was good news too, you know."
Always nice to have a another audience for our research findings.

-- Brent Baker

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