Among Tuesday's broadcast evening newscasts, the CBS Evening News uniquely relayed the positive news of a shrinking federal budget deficit, as released by the Treasury Department. As anchor Katie Couric read a brief item on the subject, she described the data as "some good news for a change" as she reported that tax revenues are "way up" and that the budget deficit is almost "35 percent lower than it was last year." Couric: "To the economy now, and some good news for a change about the deficit. It's actually shrinking."
Notably, on the Saturday June 9 edition of CNN's In the Money, during a discussion of the effect of the economy on the presidential race, guest Greg Valliere of Stanford Washington Research Group chided the media for not reporting on good economic news in light of lower budget deficit numbers as he described the overall economy as "okay" and the unemployment rate of 4.5 percent as "a great number." The show's anchor, Christine Romans, defended the media's obsession with the cost of the Iraq war. Romans: "I think one of the reasons why, and I can't speak for the rest of the media, but why there may be the perception, at least, that it's been ignored is there is an incredible amount of spending going on for the war in Iraq, and that is something that, you know, we have to pay for." (Transcripts follow)
Below is a transcript of the relevant portion of the Tuesday June 12 CBS Evening News, followed by the relevant portion of the Saturday June 9 In the Money on CNN:
From the June 12 CBS Evening News:
KATIE COURIC: To the economy now, and some good news for a change about the deficit. It's actually shrinking. Tax revenues are way up this year, and with that, the Treasury reported today that the deficit has fallen sharply to about $149 billion. That's nearly 35 percent lower than it was this time last year.
From the Saturday June 9 In the Money on CNN:
GREG VALLIERE, STANFORD WASHINGTON RESEARCH GROUP: Right now the economy is okay. It's not great. It's not terrible. Unemployment is 4.5 percent. That's a great number. The overall GDP number is going to be much stronger in the second quarter, this quarter, than it was in the first. So it's going to be hard to get a lot of traction on the economy when things are pretty good.
CHRISTINE ROMANS: Pretty good. We've had the Dow last week hitting records, the S&P hitting records. This week not so good. Last week, Ned Riley said, hey, you know, this could keep going. This week there are concerns that the bears might be in control. Where do you fall on the very near term for stock investors?
VALLIERE: I would tell all the viewers to beware of people who overreact. We had an overreaction during the winter and into the spring. Everyone said, oh, the Fed's going to cut rates several times in the second half. Of course they're not going to cut rates. Now everyone's overreacting saying, oh, the Fed is going to hike rates later this year. They're not going to hike rates. They don't know where housing is going. The Fed's going to stay on hold. So it seems like the markets overreact to the upside, they overreact to the downside. The basic fundamentals on a wide range of areas, Christine, including the budget deficit which is plunging, the fundamentals are pretty good right now.
ROMANS: Well, tell me more about the budget deficit issue because this is something that whoever is in control, you know, it affects basically, and there's been a lot of talk about trying to cut that budget deficit in half. How are we doing?
VALLIERE: Unbelievably well, and no offense to the media, but-
ROMANS: None taken.
VALLIERE: -you never hear about this in The New York Times or on TV because it's such a good news story, and sometimes I worry that we only report bad news. The good news is the budget deficit is plunging. I think in the new fiscal year that starts on October 1, we could actually have a surplus. The main reason is not spending. Everyone talks about profligate spending, and I agree they should cut spending. The main story is receipt growth. Receipt growth has exploded and all of your viewers who have paid the AMT, who paid capital gains taxes, it's receipts, and I think that trend continues. A very good story for interest rates and the bond market.
ROMANS: I think one of the reasons why, and I can't speak for the rest of the media, but why there may be the perception, at least, that it's been ignored is there is an incredible amount of spending going on for the war in Iraq, and that is something that, you know, we have to pay for.
VALLIERE: And believe it or not, Christine, aside from Iraq and entitlements like Social Security, spending is growing by about two percent, lower than the rate of inflation, for everything else, which is not a bad number.
ROMANS: Bottom line, recapping, we're going to get more nitty-gritty on the economy from these candidates as we get closer, but you say it's not all that bad.
VALLIERE: Each party will get a little edge on certain economic issues. The big issue, the one that will determine the next president who I think will be a Democrat is Iraq. That's the big one by far.