Well, the tax cuts haven’t been repealed, and there have been no big new tax increases. But yesterday the White House announced that final tallies for the federal government’s fiscal year ending September 30, 2006, the budget deficit had shrunk from $413 billion two years ago to $248 billion. The federal government collected $2.407 trillion in taxes in FY2006, $122 billion more than originally forecast back in February.
Memo to the media: Tax revenues increased because of strong economic activity, not an increase in tax rates (as liberal pundits claimed was necessary).
Last night, ABC and CBS skipped this good economic and budget news. NBC’s Brian Williams held himself to a 30-second story that aired 22 minutes into Wednesday’s Nightly News: “The federal government today released its official budget figures for the fiscal year just ended, and the good news is the deficit fell to its lowest point in four years. It's also the bad news, $248 billion higher tax receipts from corporations and individuals helped the bottom line this year. The problem is next year the deficit is expected to rise again, and long term, the budget will be strained by the retirement of those 78 million American Baby Boomers.”
What Williams did not say is that the Boomers’ retirement will “strain” the budget because of the array of liberally-inspired social welfare programs like Social Security, Medicare and Medicaid that tax American workers to pay ever-increasing benefits to (mostly) non-workers. And, as the MRC's Ken Shepherd caught, Williams did not repeat his allegation from July that the deficit success was obtained by cooking the budgetary books.
The good budget news flies in the face of what liberal journalists have been telling viewers for the last couple of years. Last month, ABC’s George Stephanopoulos got in the face of conservative Stephen Laffey, who was challenging liberal Senator Lincoln Chafee in the Republican primary. Stephanopoulos told Laffey that his “No taxes” pledge was irresponsible: “I mean, if the deficit continued to grow, it’s not responsible to say you’re never going to raise taxes....Ronald Reagan also increased taxes....So it’s, ‘Read my lips,’ you’re never going to vote to raise taxes?”
Back in May on Face the Nation, CBS’s Bob Schieffer fretted that “the ballooning deficit” was being obscured because of “silly issues” like making English the official language of the United States. At the time, the deficit was tens of billions of dollars lower than it was in 2005.
Last October, NPR’s Nina Totenberg ridiculed the idea of tax cuts given the government’s fiscal “mess.” She told the other journalists gathered for the Inside Washington roundtable that Democrats could easily use the issue of tax cuts to defeat Republicans: “One of the other things is you say, ‘Look, we’re in this mess fiscally and they want to increase the tax cuts for the most wealthy people in the United States, the top one half of one percent would get a hundred thousand dollars, people who make over a million dollars,’ or something like that.”
The most glaringly wrong prediction came from CBS’s Bob Schieffer on the February 8, 2005 Early Show. Co-host Hannah Storm asked Schieffer whether he thought President Bush could keep his 2004 campaign promise to halve the deficit from its predicted $520 billion within the next four years: “I want to ask you about the deficit because the President has pledged to cut the deficit in half by the time he leaves office in 2009. Is he going to be able to realistically achieve that goal without raising taxes?”
Schieffer said no. “I frankly don’t think so. I think in the end this President will raise taxes before his term is out, just like Ronald Reagan raised taxes after he enacted those enormous tax cuts at the beginning of his program. The government has just got to find some money to finance these programs.”
Today’s Early Show was silent on the new and improved budget numbers.
Schieffer made that prediction six months before Hurricane Katrina unexpectedly added to the federal government’s expenses, yet the Bush administration was able to beat the target by two years, without a major tax increase. Once again, journalists have failed to appreciate the power of lower tax rates to stimulate economic growth, which not only adds to the wealth of the private sector, but ends up returning more revenue to liberals’ cherished government.