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From the December 1988 MediaWatch

Tax Hike Hype

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George Bush pledged "no new taxes" if voters elected him President. And he won overwhelmingly. But the television networks didn't seem to get the message. A MediaWatch Study confirms the networks spent the weeks following the election repeatedly hyping the dangers of the federal budget deficit, and championing a tax increase as the solution.

During the month of November, ABC's World News Tonight, the CBS Evening News, CNN PrimeNews, and NBC Nightly News aired 22 feature length stories on the budget deficit. Statements by reporters or those interviewed on camera were tallied in two areas. First, suggestions for tax increases versus spending cuts to remedy the deficit problem. Second, statements placing blame for the deficit: whether with the White House, with Congress, or with both.

By a margin of nearly four to one, reporters and on-camera spokesmen called for tax increases over spending cuts to correct the budget deficit. A tax increase was suggested 41 times in three weeks on the four network newscasts. Nearly 60 percent came from reporters or anchors.

The mere 11 suggestions for spending cuts were offset by ten statements discrediting the feasibility or wisdom of those cuts. No air time was given to anyone suggesting a tax cut to stimulate economic growth.

Whom did the networks blame for the fiscal red ink? Matching the Dukakis campaign pitch, on thirty one occasions, reporters and spokesmen characterized the White House as solely responsible for the deficit. Reporters leveled the blame on Congress only twice in the time period. Congress and the Administration shared equally in the blame for the deficit spending 13 times.

Network reporters discredited the Bush pledge immediately. The Dow Jones Industrial average fell 47 points on November 11, just three days after the election, prompting ABC's Ted Koppel, the substitute anchor on World News Tonight, to blame the Bush victory: "Stocks nosedived, in part because investors are worried that George Bush's 'no new taxes' pledge may prevent him from reducing the deficit."

Ray Brady of CBS News claimed that Bush's no-tax pledge was "bothering many money men." His "money men" were two unidentified stock brokers, one of whom was quick to advocate "a severe cut in the defense budget" as necessary to head off "another financial crisis." Brady didn't allow anyone to defend the Bush pledge.

NBC's Mike Jensen said markets were worried that Bush would ignore the recommendations of the National Economic Commission members. "Many of them want to raise taxes," and "so do a lot of other experts," Jensen warned. But Jensen's only "expert" was a Harvard University economist who urged implementation of a national sales tax. Jensen neglected to mention that Bruce Babbitt's national sales tax proposal earned him fifth place in Iowa.

NBC's Irving R. Levine kept up the chant the next day. Saturday anchor Connie Chung introduced the report with unidentified "expert" opinion: "There are experts who insist President Bush will find a way to do what he said he would never do: raise taxes." Among the "experts" Levine consulted? Dan Rostenkowski and Alice Rivlin of the Brookings Institution, both liberal Democrats. Levine offered Bush a solution: "Calling a tax by some other name may eventually provide a way for Bush to climb down from the no-tax limb."

CNN's Candy Crowley announced on November 13: "Experts say Mr. Bush's hard line [on taxes] has led investors to cast an early vote of no confidence." Crowley ran a clip of Reagan explaining he'd "given up trying to guess why the market does that. I don't think it has anything to do with George Bush." But Crowley quickly countered with this wrap-up: "Market analysts say differently," adding they "predict that investors...will remain uncertain until they hear Mr. Bush singing harmony with Congress."

ABC's Lark McCarthy gave additional credibility to the desirability of the tax increase option by warning: "Already, Democratic politicians are predicting a fiscal train wreck unless Bush does something about the T-word: taxes."

NBC's Levine was ready with more advice for the President-elect on November 16. He suggested Bush use the bi-partisan National Economic Commission as a cover, "enabling him to back off his no-tax pledge."

On November 17, a mere nine days after Bush's victory, CNN's Frank Sesno pronounced Bush's no-new-tax stance dead, dismissing it as "fun while it lasted." Indeed, "many think taming the deficit," Sesno claimed, "is all but impossible without some new taxes." His source: liberal Democratic Congressman Bill Gray.

When Bush announced his OMB and Council of Economic Advisors selections on November 21, Deborah Potter of CBS took another swipe at Bush: "With most of his economic team in place, Mr. Bush can now focus on a specific plan to lower the deficit without raising taxes, which almost everyone outside his inner circle believes is impossible."

That same night, NBC's Tom Brokaw announced: "Even though Bush insists that he won't raise taxes, more and more prominent Americans, Republicans as well as Democrats, are urging him to do just that." Andrea Mitchell then proceeded to charge: "Bush gave the markets another case of jitters by once again saying that he was elected with a no tax mandate, no matter what happens to the deficit." That day the Dow rose three points.

By late November, reporters were finding all sorts of impending disasters because of the Bush pledge. "With medical costs still rising, and a President who pledges 'no new taxes,'" CBS' James Hattori ominously predicted, "the outlook for federal help appears grim as hundreds of rural hospitals remain on the critical list." NBC's Levine called the savings and loan "crisis" a "ticking time bomb that could quickly force George Bush to abandon his no new tax pledge."

The Sunday after Thanksgiving Mitchell made clear Bush had quite a few economic disasters to deal with, and offered a solution. As President, "he's stuck with all the problems he avoided during the campaign; enormous deficits, a collapsing dollar, jittery markets, the need for massive cuts in defense."

The networks spent November blaming "jittery markets" on Bush's no-tax pledge. But how does that explain a big market drop on October 19 of this year, when rumors of a scandal involving Bush that could possibly cause his political demise were circulating? Moreover, how does that explain a market recovery by early December that left the Dow higher than it had been before election day?

Could it be that investors, worried Bush would raise taxes, lost confidence in the economy, then regained it as Bush stuck to his no-tax pledge even under severe pressure? Probably no network reporter ever thought of that.






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