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What The Media Tell Americans About Free Enterprise

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October 1998


Surplus of Questionable Stories
Reporters Misdiagnose Causes of Budget Surplus, Clinton’s Plans for It

With the federal budget showing a surplus for the first time since 1969, network reporters have been busy handing out credit and describing legislative plans for the windfall. Unfortunately, they have been mostly mistaken on both counts.

The surplus is the result of tax increases and spending cuts, according to network reporters. ABC correspondent John Cochran’s list of those deserving praise included President Clinton, who five years ago "pushed through an unpopular budget that increased gasoline taxes and raised a lot of tax revenue," and Republicans in Congress, who "held down spending and passed a balanced budget."

NBC’s Mike Jensen, on the September 30 Nightly News, went even further back. In addition to American companies and the Federal Reserve, he credited former President Bush ("for his policies that paved the way for this seven-year expansion"), Congress ("for cutting government spending"), and President Clinton ("Most experts say he’s done a good job with the economy").

But according to the Cato Institute’s Stephen Moore, crediting Bush for deficit reduction "requires some nifty logical somersaults," since the deficit was $290 billion in his last year in office. As for Clinton, writes Moore, two years after his tax hike, he was predicting $200 billion deficits for the foreseeable future, and "the Clinton White House fought Republicans every inch of the way in balancing the budget in 1995." Even congressional Republicans, despite their commitment to balancing the budget, didn’t do it through domestic spending cuts. "Uncle Sam now spends $150 billion more than in 1995," Moore reports, pointing out that the budget is in surplus because of the booming economy and a smaller military budget.

Only one network reporter saw it this way. "The demise of the Soviet Union cut billions in Cold War spending," noted CBS correspondent Scott Pelley on the October 1 This Morning. "The roaring stock market has pumped vast capital gains revenues into the Treasury. And the Federal Reserve Bank set the nation on a course of high growth and low inflation."

Another common theme at the networks was that Republicans wanted to "spend" the surplus on an "election-year" tax cut, while Clinton would save it for Social Security.

According to NBC’s Katie Couric, on the September 24 Today, "Democrats want to save [the surplus] for a rainy day, and the Republicans want to use it for tax cuts." Correspondent Stacey Tisdale, on the September 30 CBS Morning News, was similarly matter-of-fact: "The Republicans, who say their policies are responsible, would like to use part of it for an election-year tax cut. But for his part, the President is expected to claim credit and call for fiscal discipline."

Only NBC's David Bloom, on the September 30 Nightly News, reported that Clinton wants to use the surplus for "billions of dollars in so-called emergency spending," not just for Social Security.

For most reporters, though, tax hikes inevitably get credit for good economic news, and Bill Clinton is a model of "fiscal discipline."

Rich Noyes


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