Julia A. Seymour
Business & Media Institute
Thursday, February 4th, 2010
President Obama just submitted a $3.8 trillion budget proposal, the largest federal budget ever, which will come with a “record amount of red ink.” The projected deficit of that budget would be $1.6 trillion, yet the networks didn’t criticize him for being spendy.
To put this in perspective: Obama is proposing a budget $700 billion larger than big spender Pres. George W. Bush’s last budget. It’s TWICE the size of Pres. Bill Clinton’s last budget of $1.9 trillion, who was credited with generating a budget surplus.
Despite the “staggering” size of Obama’s budget, which broadcast networks admitted was “dripping with red ink,” the reports managed to paint him as a fiscal conservative and deficit slasher.
NBC’s Savannah Guthrie portrayed all the excess spending as a way to get the economy back on track saying: “He’s asking for $100 billion to spur job growth – things like tax cuts for small business, tax breaks to increase wages – and he’s doing this knowing that it will drive up the deficit, certainly even more in the short term. But all economists agree the real way to get a chunk out of the deficit is to increase hiring.”
But Guthrie was highlighting only a tiny fraction of the overall budget and failed to criticize the administration for not finding ways to cut more waste.
CBS’s Bill Plante also agreed with Obama’s spending priorities for the $3.8 trillion budget Feb. 1 when he said the president “needs” to spend right now.
“The president has a serious money problem. He needs to spend more money in the short-term to create jobs, but he desperately needs to spend a lot less over the long-term,” Plante said on “The Early Show.”
Obama began his budget announcement on Feb. 1 by once again passing the buck to “previous administrations.” Clearly blaming Bush for what he termed a “decade of profligacy,” Obama criticized the funding of two wars, prescription drug spending and tax cuts before presenting himself as a fiscal conservative.
ABC’s David Muir must have bought it, because his Feb. 1 “World News” report echoed Obama. Muir pinned the record deficits on President Bush’s tax cuts and war spending when he answered the question: “How did we get here?”
His timeline of the expanding federal deficit began with an image of Bush signing a bill and the words “Tax relief for America.” This has long been the claim of the national news media. While Bush was certainly responsible for helping balloon the federal deficit, American’s for Tax Reform’s tax policy director Ryan Ellis told the Business & Media Institute the tax cuts weren’t the problem, overspending was.
“The networks are stupid if they think tax cuts had anything to do with this,” Ellis explained. Tax revenues were higher than the average when Bush took office, but fell before the tax cuts because of the dot-com bust and the 2001 recession.
“Federal tax revenues are much more dependent on the economy than they are on tax policy. Tax revenues ROSE as a percent of the economy in the years after the BTC (Bush Tax Cuts) became law. They only fell again when the economy imploded.”
According to Ellis and others, the real problem is government spending. Even a budget expert with the liberal Brookings Institution told the Wall Street Journal that Obama’s “proposals will still leave us with unsustainable deficits as far as the eye can see.”
Yet, none of the broadcast network morning or evening news shows mentioned that Bush’s last budget was $700 billion less than Obama’s proposal for 2011 or that Clinton’s last (nominal) budget was half its size.
A couple of those reports cited political dissatisfaction with Obama’s budget but none actually criticized Obama for spending too much.
Obama the Fiscal Conservative
While it seems impossible that the media could paint the man proposing the largest federal budget in history as waste-cutting and fiscally responsible, that’s exactly what they did.
NBC’s “Nightly News” followed up its Feb. 1 budget report with a “Fleecing of America” report on waste in defense spending. Lisa Myers report highlighted one particular project that made Congress look bad and Obama look good the very same day he proposed massive spending increases.
“The C-17 cargo plane is the workhorse of the military. It carries troops and equipment to war zones, helps in a crisis like Haiti. Just about everyone agrees the C-17 is a terrific plane. But the Pentagon has said it has enough and wants to stop buying them. Still, Congress just voted to build 10 more planes. Cost: $2.5 billion. Today the president said this makes no sense,” Myers said before cutting to video of Obama calling the project “waste, pure and simple.”
An ABC report on Feb. 1 also made Obama out to be fiscally responsible. Jake Tapper reported, “On the same day President Obama introduced his massive budget, he acknowledged that government spending cannot continue at this pace.”
Then he quoted Obama, who said, “The bottom line is this. We simply cannot continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax dollars of the American people can be treated like Monopoly money.”
No one in that report suggested that was exactly what Obama’s budget would do. Tapper quoted one Democrat and one Republican opposed to a piece of the budget, but did not consult anyone suggesting the budget as a whole is simply enormous and irresponsible.
Obama has requested $49.7 billion for the Dept. of Education, which appropriated $38.4 billion in 2000. He also plans to expand the budget for the Dept. of Energy to $28.4 billion. In 2000, that agency’s budget was just under $15 billion according to historical tables on the OMB Web site.
Since Obama took office the networks have cheered for government spending on the stimulus package and bailouts, protected him from rising unemployment and now with the budget reports they’ve taken the spin to a whole new level by portraying the spendthrift as a cost-cutting champion.
Let the Administration Do the Talking
Network reports on Obama’s budget favorably quoted administration officials (Obama, budget director Peter Orszag, press secretary Robert Gibbs) a number of times, but mostly ignored tax or economic experts critical of the budget.
All three networks’ morning and evening newscasts reported the 2011 budget announcement on Feb. 1. In those reports, administration officials were quoted or interviewed seven times. Four other politicians were included in reports, but only a single economic expert was brought on. That was Robert Bixby of the Concord Coalition, a non-profit devoted to fiscal responsibility.
The networks should have consulted more budget and tax experts including Isabel Sawhill, a budget expert at the liberal Brookings Institution. The Wall Street Journal on Feb. 1 quoted her as saying, “‘The pay-go rules will make it more difficult for Congress to dig the hole deeper but won’t affect currently projected red ink; and the commission will likely be a paper tiger,’ she wrote on Friday. ‘In short, these proposals will still leave us with unsustainable deficits as far as the eye can see. It is depressing to discover that we can no longer even aspire to balance the budget once the recession is over.’”
Michael Pento, chief economist at Delta Global Advisors, called Obama’s budget “so outrageously egregious that he had to hold a special press conference on Monday just to spin the news.”
Pento warned that the massive federal deficits, which are projected to be between $700 billion and $1 trillion through 2002, will push the U.S. economy “over the cliff.”
The Heritage Foundation examined the administration’s budget proposals projecting the fiscal situation for 2010-2019 and found the budget would “permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over 2007 pre-recession levels.”
Projections Often Miss the Mark by Billions
If you think a $3.8 trillion budget is bad, just wait and see what the government actually spends. The problem with budgets is that they are based on assumptions of revenue and spending and often, those don’t come true.
CATO’s Chris Edwards provided an example in the National Review online at CATO’s Web site Feb. 1. He explained that in his first budget, Bush proposed to increase spending “at a healthy clip, rising to $2.71 trillion by 2011.”
The problem? Despite Bush’s projections federal spending actually rose even faster, hitting $3 trillion by 2008. If you exclude $112 billion for Obama’s stimulus, Edwards said “the Bush-Rove team ended up spending $916 billion more annually by 2009 than they had originally planned.”
“The lesson from all this is that an administration’s promised spending beyond the first year is meaningless,” Edwards wrote.
Obama’s budget also has plenty of assumptions in it that might not come true. Health care reform, which ABC’s Jake Tapper described as on “life support” is figured into the budget, but potential costs of cap-and-trade are not. NBC proved its support for ObamaCare by saying that without its passage it would “tack on” another $150 billion to the deficit, since the 2011 budget assumes its cost savings.
According to Ellis, the budget also assumes an economic growth rate of 3 percent per year plus inflation. That he said is “rosy,” given the fact that real GDP has averaged 2.89 percent since 1980.
University of Maryland economic professor Peter Morici was also skeptical: “If your staff economist tells you that [growth rates assumed in the budget] is realistic, fire him.”
The network budget reports didn’t provide that viewpoint.
This article was posted: Thursday, February 4, 2010 at 5:06 am