"Americaís piggy bank is full to overflowing," CBSís John Roberts
enthused on the June 26 Evening News as he reported on new
projections of $1.9 trillion in federal budget surpluses over the
next decade. "Thatís over $1 trillion more than what was forecast
just four months ago," David Gregory reported on the same eveningís
NBC Nightly News.
All three broadcast evening news programs correctly reported that
the enhanced surplus estimates had provoked political maneuverings
in Washington, but correspondents failed to distinguish between the
"costs" of spending the yet-to-be-received money on additional
government programs or returning the excess dollars to taxpayers.
may be Washington," offered ABCís John Cochran on World News
Tonight, "but it took only a New York minute for politicians to
start arguing about what to do with that huge new surplus."
"Today, the President dipped into the surplus to offer
Republicans a deal: Heíll sign their bill to eliminate the marriage
tax penalty if they pass his prescription drug plan for Medicare.
The cost: $500 billion," reported CBSís Roberts.
"The presidential candidates are also likely to seize on the
administrationís rosy outlook," added NBCís Gregory. "Texas Governor
George W. Bush has said he would use the surplus for a large tax cut
and the partial privatization of Social Security. And Vice President
Gore has called for new spending on schools, health care and the
"No question, all that money is burning a hole in the pockets of
politicians," Roberts concluded.
By equating spending programs and tax cuts, reporters contribute
to the misperception that tax cuts "cost" money. The free market
loses every dollar that is collected by the government, so programs
like the proposed prescription drug coverage really do "cost" money.
But tax cuts restore those dollars to the private economy, where the
taxpayers who earned them in the first place can save, invest or
spend them as they please.
No correspondent reminded viewers that higher tax rates were put
in place by liberals seven years ago to thwart then-runaway budget
deficits. Explaining his program to the public in February, 1993,
President Clinton argued that tax increases were needed "because the
deficit has increased so much beyond my earlier estimates and beyond
even the worst official government estimates from last year."
"We just have to face the fact that to make the changes our
country needs, more Americans must contribute today so that all
Americans can do better tomorrow," Clinton told the country. The top
tax on income rose from 31% to 39.6%, and a 4.3 cent per gallon
surcharge was placed on gasoline sales as part of the campaign
Mostly due to the growing economy, those federal budget deficits
are now history, but the higher tax rates remain, diverting billions
of dollars from the private sector to a federal treasury thatís no
longer in the red. Indeed, properly understood "these are Ďtax
overpayments,í not budget surpluses," argued Club for Growth
President and economist Stephen Moore in a recent
National Review article.
"The primary explanation for massive forthcoming surpluses is
that we are still collecting revenues from the Cold War," wrote
Moore. "This is the first post-war period in U.S. history that has
not brought with it a substantial reduction in tax bills. The
average effective tax burden ó combined federal income and payroll
taxes as a share of wages and salaries ó has risen from 23 percent
to 28 percent in the past six years."
"Although taxation is legitimate," similarly argued William
Kucewicz, the editor of
GeoInvestor.com in a July 10 op-ed that appeared in The Wall
Street Journal, "running a government surplus isnít. It represents a
taking by the state, because it exceeds the governmentís contract
with the community... Excess taxation isnít what the people
By excluding this perspective from their June 26 coverage of the
federal budget surpluses, the broadcast networks implicitly promoted
the notion that those trillions of dollars are somehow government
property. Viewers should have been reminded of the "shared
sacrifice" rhetoric of the early 1990s that justified higher federal
tax rates, rather than being given the impression that cutting their
taxes will somehow "cost" them money.