as the water started rising in New Orleans, Americas media began
blaming Hurricane Katrina-related damages on the presidents 2001
and 2003 economic stimulus packages. The overriding theme the first
week after Katrina hit was that the levees of Louisiana failed due
to a lack of federal funding stemming from tax cuts for the rich.
However, a closer look at the federal budget reveals that funding
for departments and agencies administering U.S. Physical Resources
Agriculture, Commerce, Energy, Transportation, Environmental
Protection, etc. increased by 35 percent during George W. Bushs
But the media have claimed that tax cuts reduced our nations ability to protect New Orleans from a natural disaster.
On September 2, NPRs Nina
Totenberg on PBSs Inside Washington
For years, we have cut our taxes, cut our taxes and let the
infrastructure throughout the country go and this is just the
first of a number of other crumbling things that are going to
happen to us.
On September 4, Chris Matthews
on the NBC show carrying his name
There wasnt enough to fix the levees because were spending
too much and not taxing enough.
The New Republics Andrew
Sullivan on that same installment of The Chris Matthews Show
said: The tax cuts were going to stay in place, and we were
going to do the war on the cheap and were going to do civil
defense on the cheap, and thats what happened.
distortions of tax issues are not new, as the
Business & Media Institute and the National Taxpayers Union have
reported. The reality is that since 2001 despite the tax cuts
federal spending has gone from $1.9 trillion to a projected $2.5
trillion in fiscal 2005, increasing 32 percent or $600 billion.
Since the second round of tax cuts in 2003, tax receipts have grown
from $1.8 trillion to an estimated $2.2 trillion in fiscal 2005 an
increase of 22 percent or $400 billion. Depending on the final 2005
number, the last two years could represent a record increase in
revenues, as the period from 1998 through 2000 grew by only 18
percent or $300 billion.
The last time that federal spending grew faster than it has in the past four years is during President Reagans first term more than two decades ago. This 32 percent rise in spending since Bush took office is twice the rate that our governments budget grew during either of President Clintons two terms.
As spending exploded in Bushs first term, funding for departments and agencies administering to our nations Physical Resources Agriculture, Commerce, Energy, Transportation, Environmental Protection, etc. increased by 35 percent. Included in Physical Resources is funding for Natural Resources and Environment (NRE). When Bush took office, the budget for this was $29 billion. For fiscal 2005, it is $32 billion, a 10 percent increase.
That leads to the part of the budget inside NRE that has likely been most misrepresented by the media in the past two weeks: the Army Corps of Engineers. An article in the August 31 Editor and Publisher, the journal that covers the news industry, started the accusations:
Yet after 2003, the flow of federal dollars toward [Southeast Louisiana Urban Flood Control Project] dropped to a trickle. The Corps never tried to hide the fact that the spending pressures of the war in Iraq, as well as homeland security coming at the same time as federal tax cuts was the reason for the strain.
Contrary to press assertions, funding for the Corps has increased since Bush took office. In 2003, the budget for the Corps was $4.7 billion. This increased to $4.8 billion in 2004, and $4.9 billion in 2005. New York Times columnist John Tierney, in a September 10 op-ed, appeared to be one of the few to recognize this:
But that hasn't meant less money for the Corps during the past five years. Overall spending hasn't declined since the Clinton years, and there has been a fairly sharp increase in money for flood-control construction projects in New Orleans.
If tax cuts hurt, then tax hikes must help
In the last week, the media began changing their mantra from Tax cuts hurt New Orleans to Tax hikes are necessary to rebuild New Orleans:
On September 4, The Washington Posts Jonathan Weisman wrote about how Katrina should alter any suggestion of extending current tax cuts in an article entitled GOP Agenda in Congress May Be at Risk. On September 7, ABCs Charlie Gibson on Good Morning America claimed to have discussed with Sen. Hillary Clinton (D-N.Y.): Given the fact that it's going to cost so much for recovery and with what we're spending in Iraq whether we're not going to have to raise taxes." On September 9, the Washington Posts Steven Pearlstein said of Katrina: It has reduced national wealth by several hundred billion dollars, displaced hundreds of thousands of citizens, aggravated bloated budget and trade deficits and reduced the political odds for permanent tax cuts on capital. On September 10, The New York Times Mark Stein wrote this: Rescue, recovery and reconstruction efforts could cause the federal budget deficit to grow by 15 to 20 percent or more this year and may threaten plans to cut taxes further or to make earlier cuts permanent.
Noel Sheppard is an economist, business owner and contributing writer for the Business & Media Institute. He is also member of the Media Research Centers NewsBusters squad. Noel welcomes your feedback at email@example.com.