From Cyberalert:
To varying degrees, all the broadcast networks and CNN Wednesday night and Thursday morning distorted Federal Reserve Board Chairman Alan Greenspan’s words in order to argue against tax cuts.
Greenspan appeared Wednesday before the Senate Banking Committee. Here’s what he said about taxes and spending, as recounted by Wall Street Journal reporters Glenn Burkins and Greg Hitt:
"‘If the Congress decides to move forward and put into place significant tax cuts in future years,’ he said, ‘I think it also has to be prepared to cut spending significantly in the event that the forecasts on which they are based are proved wrong.’ On the other hand, he said, using the budget surplus to fund ‘irrevocable spending programs’ would be ‘the worst of all outcomes.’
"On the Senate floor yesterday, Democrats ignored Mr. Greenspan’s warnings against more spending and focused instead on his opposition to tax cuts."
And so did the networks, perfectly in alignment with the Democratic and liberal spin. Greenspan may not be thrilled by tax cuts and prefer money be put toward paying down the debt, but he finds them less harmful than the realistic alternative: More spending. In fact, he maintained in a clip shown by CNN: "If it turns out to be infeasible to apply the surplus to reducing the debt and it turns out that instead it is being spent, then I very strongly support tax cuts." Yet, TV viewers heard that thought only briefly on ABC, CNN and FNC while CBS and NBC just flat-out distorted Greenspan’s view.
-- ABC accurate one of three times. On the July 28 World News Tonight anchor Peter Jennings offered this distortion caught by MRC analyst Jessica Anderson: "On Capitol Hill today, Alan Greenspan urged Congress to put off a big tax cut until the projected budget surpluses actually materialize. The Federal Reserve Chairman said he's not against cutting taxes, he just believes the government should pay down its debt first."
Thursday morning on Good Morning America, during the 7am news update, news reader Antonio Mora provided this more complete picture: "The Chairman of the Federal Reserve told senators yesterday that he does not favor a tax cut. He prefers to pay down the national debt. But Greenspan did say a tax cut is preferable to new spending on government programs. An ABCNews.com poll finds that most Americans share that caution. Forty-seven percent want to use the projected surplus for Social Security. Twenty-two percent do want taxes cut, though, and 19 percent would target the national debt. Ten percent would spend it on domestic programs."
But an hour later, White House reporter Ann Compton had her blinders on, asserting that President Clinton "has said all along that he would veto the Republican version of the tax cut, which runs as much as $800 billion, he calls it dangerous. The President thinks there has to be much more money set aside, not for tax cuts, but for other spending priorities and for the federal debt. By the way, Antonio [Mora], the President was grateful yesterday for some unexpected political witnessing by Alan Greenspan, chairman of the Federal Reserve Board, who said he too thinks a tax cut is the wrong medicine right now. Antonio."
-- CNN got it right on Inside Politics but not on The World Today. In his piece for the July 28 Inside Politics reporter Bob Franken relayed: "As the Federal Reserve Chairman testified on Capitol Hill, everyone was hanging on his every word."
Greenspan: "We probably would be better off holding off a tax cut immediately."
Franken: "That may have been music to Democrats' ears, but there was a catch."
Greenspan: "If it turns out to be infeasible to apply the surplus to reducing the debt and it turns out that instead it is being spent, then I very strongly support tax cuts."
Senator Pete Domenici: "He is fully aware that ideal may not be politically feasible."
Franken: "While the debate is about economic feasibility, few question that the senator is right. The ultimate question is about the political feasibility of a tax cut."
But five hours later on The World Today, MRC analyst Paul Smith noticed, CNN dropped Franken’s caveat as this is how the story aired, sans any Greenspan soundbite:
"But Greenspan is offering little to Democrats who want to use the surplus for government spending. He argues the priority should be reducing the national debt. However, while the Fed Chairman may want to wait for a tax cut to allow a surplus to accumulate, the prediction of a surplus is all the politicians here need to cut taxes right now."
-- On Wednesday’s FNC Fox Report anchor Paula Zahn corrected Eleanor Clift, MRC analyst Brad Wilmouth observed.
Clift: "But it’s not often that Alan Greenspan weighs in on my side, and I’m gonna, you know..."
Zahn, jumping in: "Just partly, though, because he went on to say if he saw huge spending increases for government programs, then in the short run he would favor tax cuts, even though he told everybody to hold off on that. It’s kind of a two pronged statement he said."
-- CBS’s outright distortion. John Roberts teased the July 28 Evening News: "Republicans in Congress push their tax cut plan, despite a caution from the Fed and a warning from the President."
MRC analyst Brian Boyd observed how in introducing a full story he misrepresented Greenspan’s testimony: "Despite public warnings of don't do it by the Chairman of the Federal Reserve, the Senate began debate today on a massive Republican-conceived tax cut bill, but the numbers as they stand now don't have a chance of getting beyond the White House."
Diana Olick reported: "Senate Republican's may be optimistic about their $800 billion tax cut plan, but Democrats are singing a different tune."
Tom Daschle: "We'd rather have no tax cut, than a tax cut we can't afford."
Olick: "While that was the predictable response, more troubling was a warning today from Federal Reserve Chairman Alan Greenspan."
Alan Greenspan: "Probably would be better off holding off on a tax cut immediately."
That was it. Nothing about anything else Greenspan said.
On Thursday’s This Morning Olick insisted: "The Senate continues debate this morning on this great big tax bill. Yesterday Republicans knocked down a more moderate plan from the Democrats, and despite a warning from Federal Reserve Chairman Alan Greenspan that now is not the time to be giving back government surpluses, Republicans say the money must be returned to taxpayers."
-- NBC too. Opening the July 28 NBC Nightly News Tom Brokaw declared: "Good evening. It’s the biggest battle over tax cuts since the early days of Ronald Reagan presidency and the Republicans have the votes to get their way. A huge tax cut. But President Clinton and Federal Reserve Chairman Alan Greenspan oppose. The public has mixed feelings. It's possible because the economy is booming, the government is awash in money and an election is coming. But there is much more to it than that on both sides."
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CBS’s campaign against tax cuts continued Tuesday night. Reporter Diana Olick didn’t even bother with balance, again distorting Greenspan’s view and relaying the Democratic spin about how the cuts would unfairly help the rich without bothering to air a counter viewpoint.
Olick began her July 29 CBS Evening News piece with this polemic shot from Bill Clinton: "So I say to Congress if you send me a tax cut that shortchanges America’s priorities and our children’s future, I will veto it."
Olick picked up: "But Republicans continue to push their bill and Democrats continue to argue they’re just out to help the rich."
Senator Paul Wellstone: "This is class warfare: 60 percent of the benefits go to the top ten percent."
Olick, in full distortion mode: "Even the dean of Republican economists, Fed Chairman Alan Greenspan, warned big tax cuts could lead to big inflation."
Todd Buchholz, economist, Market Shock: "And he fears that if there is a massive tax cut that sends money back into the pocketbooks it will merely show up in credit card balances and people will end up spending and spending and spending."
Olick stressed: "So with Greenspan so clearly opposed and President Clinton ready to veto, why are Republicans so set on such a huge cut?"
Marshall Wittman of the Heritage Foundation got a few seconds, but not on substance to counter Wellstone: "Well ultimately God put Republicans on Earth to cut taxes."
Olick then offered this re-writing of history: "In 1981 Ronald Reagan signed the largest tax cut ever, sold as an economic stimulus. It resulted in a decade and a half of deficits but gave Reagan eight years of political popularity."
Wittman: "So Republicans believe that they have to go back to their standard bread and butter and that’s cutting taxes."
Olick: "Democrat John Breaux also wants a tax cut, but is convinced the GOP plan will backfire."
Breaux asserted that Clinton will veto and use that as issue against Republicans. Olick concluded that the outcome will depend on what kind of compromise can be reached in the fall.
Of course, the reality of the 1980s was that income tax revenue grew faster than inflation but that non-defense spending, the majority of the budget, soared even more.
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