MediaWatch: June 1995

Vol. Nine No. 6

Truth About Consequences

NBC Nightly News ran a series in the last week of May, "Red Tape," linking government rules and regulations with their real-life effects, demonstrating the unintended problems government intrusion causes.

On May 30, Roger O'Neil profiled a century-old family logging company with 200 workers that went out of business. Why? "Timber sales slowed down as regulatory red tape from the Forest Service increased. Studies for clean air, clean water, recreation, wildlife. Study this, study that. Twenty-four studies in all cut the log supply in half. Then in 1993 it was cut in half again. The Mexican spotted owl -- never seen in the Kaibab Forest but photographed 200 miles away...was put on the endangered species list. That forced four more studies." The next night, Robert Hager examined the Depression-era Davis-Bacon Act, which mandates that federal building contractors pay local union wages. Hager pointed out that "Davis-Bacon is blamed for a staggering $2 billion a year in extra construction costs. Of that, $100 million is spent just on extra paperwork."

Mike Jensen tackled the capricious rulings the IRS has made on independent contractors on June 1. The segment introduced viewers to the fight over who pays a free-lancer's taxes: business owners or the free-lancers themselves. Often the IRS engages in its own form of double-dipping. Jensen related how "the IRS has collected more than $750 million from company owners in the last seven years, even though many of the freelancers had paid their own taxes." A computer consultant linked it to real-life effects: "If you're thinking about expanding your business and getting people to work for you, you're scared away."

Educrats Exposed

Diane Sawyer began ABC's May 3 PrimeTime Live wondering about education being underfunded: "Is that really the problem?...Americans are now paying more than four times what we paid in the 1950s for education...On average, we pay as much per student per year in a public school as some private schools charge." Sawyer also noted the root problem: "Back in 1950, two-thirds of all the money budgeted for education was actually spent in the classroom, on instruction. But by 1992, less than one-half made it there, in part because the percentage of the budget for administration doubled."

ABC visited schools where bureaucracy reigned. In Los Angeles, Sawyer found principal Yvonne Chan, who ordered computers three years ago. "Chan told us that if she had gone to an outside company, she could have got a comparable system cheaper, and in only three months." Sawyer cited Texas Controller John Sharp, who found a district where administrators "cut out all the Saturday tutorials and cut the budgets of all the schools," but "had seven public relations officials on the payroll to take care of the district image." Rather than spend more,"Sharp found he could save over $100 million without touching the just 17 districts out of more than 1,000 in Texas."