For Immediate Release: Katie Wright (703) 683-5004 - Tuesday, October 21, 2003

MRC Study: Reporters Say Tax Cuts & War Caused Federal Deficit; Poor Economy Led to State Gaps

Won't Blame Big Spending for
Big Deficits

     Last night, NBC and CBS both touted the "record" 2003 federal deficit of $374 billion announced Monday, but when it comes to pinpointing the cause of all that red ink, a new MRC study found TV reporters minimized the huge increases in spending over the past several years.

     Indeed, TV news frequently featured horror stories about the harm that would come to citizens if politicians could not spend all that they wished.

     MRC researchers studied 108 federal deficit stories and 64 stories on state government deficits aired between October 1, 2002 and September 30, 2003 (the federal fiscal year) on ABC's World News Tonight, CBS Evening News and NBC Nightly News. Key findings:

     • Most stories blamed tax cuts for the federal deficit. There were 66 network stories linking the budget deficit to Bush's tax cuts, and another 45 that blamed the war on terrorism, homeland security costs or the war in Iraq. (Some stories suggested more than one cause.) Only 12 stories mentioned non-war related federal spending as a reason for the rising red ink, even though such spending has risen sharply in the past three years. An August 2003 report by the Cato Institute's Veronique de Rugy and Ted DeHaven found that "real spending in nearly every department has increased substantially, sometimes exorbitantly, under Bush."

     But when it came to the deficit, the networks rarely indicted the big spenders. ABC's Peter Jennings reflected the media mentality perfectly on December 9, 2002 when he remarked of the new Treasury Secretary John Snow, "He is said to be in favor of further tax cuts, but against deficits. Doesn't one lead to the other?"

     The media's overwhelming focus on tax cuts is misplaced, according to free market experts. In a Heritage paper published in June, budget analyst Brian Riedl calculated "the 2001 recession and new government spending caused 78 percent of the declining surplus projection," with tax cuts accounting for just 22 percent of the shortfall. 

     • While Bush was blamed for the federal shortfall, state governments were victims of the weak economy. Almost no stories about the federal deficit (just 4 out of 108) mentioned the recession as a cause, but the weak economy was the most often cited reason for state budget gaps (14 out of 64 stories, or 22 percent). "A faltering economy has left state budgets deep in the hole," ABC's John Berman announced on November 3, 2002. That same slowdown hurt federal receipts, too, but the networks rarely said so.

     • When budgets are cut, children die. Only nine stories cited high spending as a cause of state budget woes. One of those was on January 11, when ABC's World News Tonight reporter Judy Muller, in a story on California's budget problems, ran a sound bite from economist Peter Navarro: "The Davis administration and the Democratic legislature spent like drunken sailors."

     But in other instances, reporters gave politicians a pass by euphemistically referring to "rising costs," as if politicians played only a passive role in the budget-busting process. ABC's Muller on June 30 carefully referred to "states hit by the double whammy of a huge increase in required health care costs and a huge revenue loss from the collapse of the high-tech economy."

     A February 2003 Cato Institute study by Chris Edwards, Stephen Moore and Phil Kerpen documented how state governments went on a spending spree in the 1990s. They calculated that if the states had merely limited their spending increases to inflation plus population growth, "budgets would have been $93 billion smaller by FY01, representing savings roughly twice the size of today's spending gaps."

     Instead, network news featured alarming anecdotes to illustrate the horrors of less state spending. On January 10, ABC's Betsy Stark said the case of a woman who starved her foster children was "a gruesome reminder that child welfare agencies are over-burdened and under-funded." Stark quoted Phil Coltoff, a child welfare advocate: "There will be more tragedies and more deaths, and I don't say that in an alarmist way. This is one of the consequences of budget cutting." The ABC story included no one contradicting Coltoff's dire claim.

     • On the bright side...On February 14, NBC's Norah O'Donnell exposed some of the extravagant spending tucked inside a massive federal spending bill, including a $350 million expansion of a cattle subsidy to include catfish farmers. Yes, catfish. "Critics question whether such eye-popping largesse is appropriate with looming deficits and America battling the war on terror," O'Donnell noted.

     Unfortunately, most of the networks' deficit stories skipped over such silly spending as they put the blame on liberals' favorite budget bogeyman, tax cuts.

- Rich Noyes