The lackluster September unemployment report highlights the need for a focus on job creation, a priority that is likely to be ignored by media.
On October 22, the Bureau of Labor Statistics released its unemployment report for the month of September, which found that payrolls rose 148,000, edging the official unemployment rate down from 7.3 to 7.2 percent. While the report found positive gains in the labor market -- a welcome change from losses sustained after the financial crisis -- job creation fell far short of economists' expectations, which predicted 180,000 to 200,000 jobs would be created in September.
The underperforming labor market, identified in this month's report, presents an opportunity for the media to focus on job creation and economic growth.
Unfortunately, this opportunity is likely to be squandered in favor of promoting discussion on spending cuts and deficit reduction, as evidenced in past reporting.
Media's focus on deficits and debt instead of economic growth and jobs has long been criticized by economists. Previous coverage of budget negotiations show that media place overwhelming focus on the need to reduce spending, often leaving the more pressing need for economic growth largely unmentioned.
Indeed, this issue has already been raised by economist Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. In a post on The New York Times Economix blog, Bernstein expressed fears that after concluding the 16-day long government shutdown, the media will undoubtedly pivot focus to deficit and debt reduction. Bernstein explains that the debate over spending and deficit reduction will crowd out discussion on the more immediate jobs crisis:
Imagine instead that the politicians turned not to the budget deficit but to the jobs deficit, the infrastructure deficit, to poverty, wage stagnation, immobility and inequality. Along with a budget conference -- and don't get me wrong; I'm glad they're talking -- imagine there was an economic conference to make recommendations on what's really hurting the country, which I assure you is not our fiscal situation. That's taking care of itself for the short term, as is always the case after a recession (deficits go up in recessions, for obvious reasons).
I'm surely going to jump into the budget debate myself any minute now, but before I do, I wanted to point out that this is not the debate we should be having. It's the preferred debate of those who seek to shrink the role of government, to undermine social insurance, to reduce needed investments in public goods and human capital, and to protect the concentrated wealth of the top few percent.
Bernstein's fear of undue focus on debt and deficits has already been realized.
Reacting to the deal that ended the recent government shutdown, Fox News host Megyn Kelly claimed it wasn't a "win for the American people" because it didn't reduce the national debt. CNN reported that the shutdown deal shouldn't be celebrated because it "kicks the can [of budget negotiations] down the road." Wall Street Journal editorial board member Stephen Moore immediately declared the preservation of sequestration cuts -- which will continue to reduce spending and deficits -- the "winner" of the shutdown, and the Journal preemptively told Republicans to stand firm on sequestration cuts in any budget deal in an October 13 editorial.
If history and early reports are any indication, media will continue their habit of promoting deficit reduction as budget negotiations take place.
Fox News has downright ignored the billions lost in productivity as a result of the government shutdown, which stands in stark contrast to the network's years-long attack on minimal waste and abuse in food assistance programs.
On October 16, the financial ratings agency Standard & Poor's released its estimate of the economic cost of the 16-day long shutdown of the federal government, concluding that it cost the American economy $24 billion in lost productivity. The agency also cut its forecast for economic growth in the upcoming fiscal quarter by at least 0.6 percentage points.
Since the shutdown was lifted on October 16, Fox News personalities have expended considerable effort downplaying the effect the shutdown had on the economy.
On October 16, Fox Business host Lou Dobbs cited a slight uptick on the Dow Jones industrial average throughout the shutdown as evidence that the nationwide closure of federal lands and agencies had a negligible economic effect. Fox Business' Melissa Francis made a similar argument, claiming that the shutdown had shown Americans they could live with "a lot smaller government." On the October 17 edition of The Five, Fox News host Eric Bolling questioned the validity of S&P, and other agencies, that report economic losses from the shutdown, baselessly suggesting that their reports are influenced by political factors.
Fox's continued denial of the ruinous economic effect of the government shutdown reveals the network's hypocritical and overzealous reporting on waste and abuse in federal anti-poverty programs.
In August, the United States Department of Agriculture (USDA), which administers the Supplemental Nutrition Assistance Program (SNAP), updated its figures for "trafficking," or when SNAP recipients sell their benefits for cash, in the program. Its data reveal a slight increase in trafficking rates from 1.0 percent in 2006-2008 to 1.3 percent in 2009-2011. The total value of trafficked benefits during the last three year period is estimated to be $858 million annually.
Rather than acknowledging that SNAP trafficking rates were still near historic lows, Fox misleadingly highlighted what it called a "30 percent" increase in abuse. Days previously, Fox dedicated another segment to attacking food assistance that included host Eric Bolling overestimating SNAP fraud and abuse rates by 5,000 percent.
The amount of yearly trafficking abuse in SNAP amounts to less than four percent of the wasted economic output caused by the government shutdown. In other words, the cost of the 16-day shutdown is nearly 28 times larger than a full year of food assistance abuse. While Fox has repeatedly claimed that waste in SNAP cannot be tolerated, the network has yet to acknowledge that waste from the shutdown even exists.
Of course, this should come as no surprise given the network's efforts to encourage the shutdown and resulting economic fallout. Fox News played a prominent role in encouraging and facilitating a partial government shutdown that cost the economy billions of dollars in lost productivity while producing zero policy gains for the Republican Party or its right-wing media champions. Fox has tried repeatedly to find scapegoats in the administration to shift blame away from allies in the House GOP caucus.
According to the USDA, "fluctuations in the number of SNAP participants in the last 16 years have broadly tracked major economic indicators." With the Republican-led shutdown effectively draining tens of billions of dollars out of the economy, SNAP registries are likely to increase in the near-term as the shutdown and lingering fiscal austerity drag down recovery.
If that happens, recipients of federal anti-poverty assistance can expect a resurgence of Fox attacks.
Fox Business host Lou Dobbs downplayed the effects of the government shutdown on the U.S. economy, despite economic reports stating that the shutdown has taken $24 billion out of the economy.
Reporting on the October 16 edition of Lou Dobbs Tonight about the Senate leadership deal to end the government shutdown, Dobbs disputed White House Press Secretary Jay Carney's statement that "the economy has suffered" because of the shutdown, claiming, "The extent of just how much the economy suffered is questionable at best."
In fact, economists have reported that the government shutdown is projected to have significant negative effects on the economy. Business Insider reported that Standard & Poor's cut its "annualized U.S. growth view closer to 2% from 3%." The article added that S&P estimates "the shutdown has taken $24 billion out of the economy and cut 0.6% off of yearly fourth quarter GDP growth."
From the October 12 edition of Fox News' Cashin' In:
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Right-wing media figures have repeatedly criticized Obama administration officials for claiming that the U.S. will default if the debt ceiling is not raised by October 17, instead claiming the U.S. could prioritize payments to bondholders as a way to avoid default. But economists note that the threat of default is real and that the prioritization alternative proposed by Republicans is not a long-term solution.
In an attempt to smear unrelated civil rights law by linking it to the tragic Navy Yard shootings, right-wing activist Hans von Spakovsky argued that background checks for arrests without convictions could stop gun violence.
Never one to miss an opportunity to shoehorn an attack on civil rights law into a different subject, widely discredited National Review contributor von Spakovsky used the disturbing mass murder committed by a veteran of color to criticize employment law that guards against unnecessary racial discrimination in hiring practices. From his recent op-ed in The Washington Times that claimed "Obama policy would have exempted the Navy Yard shooter from scrutiny":
But what if The Experts had actually turned up these criminal arrests for gun-related violence [in a background check] and refused to hire Alexis? If the company had done so, it might have violated the hiring policy the Obama administration is trying to force on private employers. It could have been accused of discrimination by the Equal Employment Opportunity Commission (EEOC), a federal agency controlled by Obama appointees.
In April 2012, the EEOC issued enforcement guidance severely restricting the use of criminal background checks by employers when hiring new employees. The EEOC claims that because blacks and Hispanics are arrested and convicted at higher rates than whites, the use of a criminal-background check will have a "disparate impact" on minorities and, therefore, violates Title VII of the Civil Rights Act of 1964.
Unfortunately, the terrible tragedy in the Navy Yard graphically illustrates why the Obama administration's push to force employers to stop using criminal background checks is not only legally wrong, but dangerous.
Rather, the EEOC is utilizing long-standing anti-discrimination law under Title VII of the Civil Rights Act that prohibits those employment or hiring policies that have an unjustified discriminatory effect on persons of color. Therefore, criminal background checks per se are perfectly acceptable if they are pertinent to the job at hand.
Recently, however, blanket employment screening has become so commonplace that it flags offenses that are not only minor, but also unnecessary for the occupation in question. Because the databases that background checks rely on have an alarmingly high number of false positives based on "incomplete or inaccurate information," and because communities of color disproportionately suffer from encounters with the criminal justice system, multiple reports indicate that this new trend is making the unemployment rate for persons of color worse.
Fox Business host Stuart Varney believes that the ongoing government shutdown, while presenting no real threat to the economy, offers an opportunity to "punish" federal workers for "living on our backs."
On the October 2 edition of AM 560's The Big John & Amy Show, co-hosts John Howell and Amy Jacobson interviewed Fox Business' Stuart Varney and asked him about the government shutdown and its effect on workers and the economy. Varney stated, incorrectly, that the shutdown was not having an impact on financial markets or the greater economy before launching into a tirade against federal employees. When asked if federal employees deserved to be recompensed for lost wages during the shutdown, Varney had this to say:
HOWELL: Do you think that federal workers, when this ends, are deserving of their back pay or not?
VARNEY: That is a loaded question isn't it? You want my opinion? This is President Obama's shutdown. He is responsible for shutting this thing down; he's taken an entirely political decision here. No, I don't think they should get their back pay, frankly, I really don't. I'm sick and tired of a massive, bloated federal bureaucracy living on our backs, and taking money out of us, a lot more money than most of us earn in the private sector, then getting a furlough, and then getting their money back at the end of it. Sorry, I'm not for that. I want to punish these people. Sorry to say that, but that's what I want to do.
After co-host Amy Jacobson responded that "it's not the federal employees' fault" and that she hates to see them victimized by a political fight, Varney complained that in "the big picture" he is "getting screwed" by government workers who are "living large":
JACOBSON: But it's not their fault. It's not the federal employees' fault. I mean, that's what I'm sick of, I hate and it makes me anxious, to see people who are victimized because of a political fight.
VARNEY: I take your point Amy, it is not directly their fault, but I'm looking at the big picture here. I'm getting screwed. Here I am, a private citizen, paying an inordinate amount of money in tax. I've got a slow economy because it's all government, all the time. And these people are living on our backs, regulating us, telling us what to do, taxing us, taking our money, and living large. This is my chance to say "hey, I'm fed up with this and I don't miss you when you're on furlough." Sorry if that's a harsh tone, but that's the way I feel.
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Cable and broadcast evening news significantly increased coverage of inequality and poverty in recent months. This increased coverage comes at a crucial time, with reports showing historic highs in both metrics.
A Media Matters analysis found that issues of inequality and poverty were discussed in roughly 20 percent of broadcast and cable nightly news segments on the economy over the third quarter of 2013.
This spotlight on inequality in television news represents a departure from past coverage. In the second quarter of 2013, inequality and poverty were mentioned in only 9.3 percent of cable and broadcast segments on the economy. Similarly, major print outlets have failed to note structural inequality in their coverage of policies and programs that affect low-income groups.
Regardless, the increased coverage of poverty and inequality, especially when it is devoid of political motivations to defund anti-poverty programs, comes at a critical time.
In September, economists found that income inequality had reached its highest level since 1928, right before the onset of the Great Depression, with incomes for the top 1 percent of earners rising 20 percent. Meanwhile, incomes for the bottom 99 percent rose by only 1 percent. This research came on the heels of a report by the Economic Policy Institute that found median wages have remained stagnant for nearly a decade, despite increases in productivity.
As inequality has risen, improvement in poverty statistics has been lacking. On September 17, the United States Census Bureau released its annual report on income poverty and health insurance coverage for 2012. The report found that there was no significant improvement in reducing poverty since 2011, with the official poverty rate holding at 15 percent.
As reports flood in about the rising inequality and stagnant poverty rates, media have no choice but to cover issues that are unfortunately pertinent to an increasing number of Americans.
Cable and broadcast television outlets, driven largely by Fox News, promoted the myth that the Affordable Care Act is forcing employees into part-time work and killing full-time jobs, while ignoring serious discussions of the labor market and the effect of policy proposals on job growth.
Media Matters research, which looked at economic news coverage over the past three months, revealed an overwhelming bias in news coverage of the effects of health care reform on the American job market. The Affordable Care Act (ACA) was identified as a primary driver of slow job growth and increased part-time employment in 90 recorded segments concerning the economy. More than three-quarters -- 69 -- of those segments came from Fox News, which has invested considerable time and attention to attacking President Obama's signature health care law.
The claim that ACA has a negative effect on the job market has been addressed and debunked by independent economists, but the myth persists as a talking point in the media. At Fox, the myth is a central theme of economic discussions.
Meanwhile, the negative effect of spending cuts on reducing economic growth and labor market demand went relatively unmentioned in the media. Only 37 recorded segments concerning the economy mentioned the harmful impact of spending cuts, the majority of which -- 27 -- came from MSNBC.
Economists agree that the austerity measures enacted over the past several years have dragged down economic growth. Nobel Prize-winning economists Paul Krugman and Joseph Stiglitz have written and commented about the effect of depressed spending at length, as have many others. However, cable and broadcast news coverage of the economy consistently ignore the views of economists in favor of discussions centered around optics and political horse races. Only 3 percent of featured guests in these segments during the past three months have been professional economists.
The lack of serious discussions of economic policy, in favor of politically driven talking points, has had a tangible effect on the economy and government. The vitriol directed at health care reform from the right-wing reached its peak on October 1 when House Republicans, emboldened by supportive media, opted to shut down the government rather than concede their demand that Democrats dismantle the ACA in exchange for a temporary extension of current spending.
The ACA was signed into effect on March 23, 2010, and has been subject to constant media scrutiny for more than three years. Calls to have the law repealed, or to have significant portions delayed, have been pushed by right-wing outlets for the past several months in preparation for the start of enrollment for state-based exchanges on October 1.
Broadcast and cable evening news coverage touched upon a variety of economic topics, including deficit reduction, economic growth, and effects of the Affordable Care Act throughout the third quarter of 2013. While coverage of certain issues improved, a Media Matters analysis shows that many of these segments lacked proper context or input from economists, with Fox News advancing the erroneous notion that the Affordable Care Act is the purported cause behind poor job growth.
Fox Business host Stuart Varney misleadingly downplayed the harm that a government shutdown would inflict on the U.S. economy by claiming Wall Street would be mostly unaffected and that it could help the housing market. In fact, a shutdown would harm the housing recovery and economists say it would slow economic growth.
Fox News downplayed the immediacy of the upcoming debt ceiling deadline, giving credence to congressional Republicans' plan to use the threat of default as a means of gutting the Affordable Care Act (ACA).
On September 25, Treasury Secretary Jack Lew sent a letter to congressional leadership in the House and Senate regarding the state of government finances. Lew specifically emphasized the consequences of failing to lift the federal debt limit by October 17. From the letter:
Treasury now estimates that extraordinary measures will be exhausted no later than October 17. We estimate that, at that point, Treasury would have only approximately $30 billion to meet our country's commitments. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion. If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.
On the September 25 edition of Fox News' Happening Now, host Jenna Lee and Fox Business host Neil Cavuto discussed the upcoming October 17 deadline to raise the debt limit. Cavuto recognized the fact that a failure to lift the debt ceiling would have far more dramatic consequences than a simple government shutdown, but also specifically rebuffed the nature of a firm deadline, claiming:
CAVUTO: Never believe those figures, Jenna, because every Treasury Secretary, be it a Republican or Democratic administration, has always cried panic and always attached a date that is really just made up.
Cavuto outlined the means by which congressional Republicans could use the threat of breaching the debt limit to extract concessions on the ACA, commonly known as Obamacare, which could range from delaying to defunding key initiatives of the law. In fact, The Hill reported that Republicans in the House of Representatives plan on tying any increase of the debt limit to a one-year delay of Obamacare. From The Hill:
Moving to the debt ceiling fight, which Republican leaders have long seen as stronger ground, could be a way to convince rank-and-file Republicans to fight their spending and healthcare battles there rather than on a government funding bill.
Cavuto's caution that listeners should "never believe" Treasury Department deadlines, and the claim that these deadlines are "really just made up," directly contradicts the facts presented by Lew.
According to Treasury estimates, the United States government will have merely $30 billion in liquid assets on hand by October 17. By Lew's own admission, this sum, equivalent to roughly 0.75 percent of annual federal outlays, would be insufficient to meet the obligated expenses of certain individual days. Contrary to Cavuto's claims that the government could use flexible accounting to sustain itself for months without a debt limit increase, those so-called "extraordinary measures" have been in place since May 17 and are now at their limit.
If the debt ceiling is not lifted by October 17, the United States government will be unable to finance the payment of its pre-existing expenses through the continued sale of Treasury bonds. This would have all of the effects of a government shutdown -- outlays to certain program beneficiaries, employees, the military, etc. would cease or be delayed -- while also initiating a global financial crisis among corporate and sovereign wealth funds that own or purchase American debt.
According to The New York Times, the Treasury makes more than 80 million individual payments each month, and would miss nearly one-third of those regular payments every day until the debt ceiling was lifted. A $12 billion Social Security payment is due on October 23 and a $6 billion interest payment on public debt is due October 31. These alone would virtually exhaust the Treasury's remaining resources if Congress fails to act.
The notion that Republicans might be able to string a debt limit increase along for months as they negotiate attacks against Obamacare ignores both the economic consequences of a debt default and the political reality in Washington. The last legitimate Republican threat to breach the debt ceiling resulted in the first ever downgrade of the United States Department of Treasury bond rating -- from AAA to AA+. This downgrade marginally increased the cost of future American borrowing and, according to the Bipartisan Policy Center, will cost taxpayers an additional $18.9 billion over the coming decade.
Increasing the debt limit does not increase the national debt, but manufacturing a crisis by using the debt limit to leverage political concessions has already cost taxpayers.
Fox News is resorting to dishonest misrepresentations of President Obama's record of deficit reduction by cherry picking data and completely disregarding Bush-era deficit levels.
On the September 24 edition of Fox News' Fox & Friends, co-hosts Steve Doocy, Elisabeth Hasselbeck, and Brian Kilmeade were joined by Fox Business anchor Stuart Varney for a falsehood-laden discussion of the federal budget and budget deficit. Varney argued that President Obama first ran up the deficit before hemming it down, claiming that in the president's "first full year in office" the federal budget deficit was approximately $1.4 trillion.
Fox provided a graphic of deficit spending from 2008 to projected 2013 levels, claiming that the deficit is up 137.7 percent since 2008.
The 137.7 percent deficit increase cited by Fox is ostensibly calculated by comparing the 2012 deficit to that of 2008. This figure, however, completely misrepresents deficits under the Obama administration, by picking erroneous start and end dates.
The federal budget deficit in fiscal year 2009 was $1.4 trillion. However, fiscal year 2009 began on October 1, 2008, months before President Obama was sworn into office. Attributing the 2009 budget deficit to President Obama is simply incorrect.
According to the Congressional Budget Office's (CBO) budget and economic outlook report for 2009 -- released prior to President Obama's first inauguration -- the federal budget deficit was projected to be $1.2 trillion for the 2009 fiscal year. Citing turmoil in the housing and financial markets, the CBO projected deficits to rise to their largest percentage of GDP since the Reagan administration. From the report:
A drop in tax revenues and increased federal spending (much of it related to the government's actions to address the crisis in the housing and financial markets) both contribute to the robust growth in this year's deficit.
The report noted that the projected deficit also included the initial $180 billion cost of the Troubled Asset Relief Program (TARP) and the estimated $200 billion takeover of mortgage giants Fannie Mae and Freddie Mac.
Choosing 2012 deficits as the end point for analysis of deficit growth is also erroneous. Why Fox didn't choose the most recent data -- projected levels for fiscal year 2013, which ends on September 30 - as the end point remains a mystery.
If Fox had chosen the correct starting and end points for its analysis of deficits under President Obama, a completely different picture of deficit reduction would emerge. Indeed, according to the latest CBO budget and economic outlook released in May, deficits are projected to fall to less than 3.4 percent of GDP in 2014, the lowest level in years. Current deficit projections for 2017, President Obama's final fiscal year, are estimated to fall to just 2.4 percent of GDP. None of these facts were featured in Fox's reporting.
Fox & Friends has dedicated three segments in one week to a discussion of the debt, debt ceiling, and deficit. Each time their reports have been plagued by misunderstanding or mischaracterizing the facts.
Fox News' Neil Cavuto trotted out well-worn falsehoods about the successful auto rescue, casting doubt on claims made by Ford CEO Alan Mulally on Cavuto's own show a year earlier.
On September 20, President Obama delivered a speech on the economy at a Ford Motors plant in Liberty, Missouri. During the speech, he noted that while Ford did not accept a bailout in the wake of the financial crisis, if General Motors (GM) and Chrysler had not accepted federal funds, it "would have had a profound impact on Ford."
Discussing the president's speech on Fox News' Your World, host Neil Cavuto was joined by Fox Business contributor Charles Payne and Wall Street Journal editorial board member Stephen Moore. Cavuto criticized the President's remarks about Ford being affected by GM and Chrysler's decision to accept federal funds. Cavuto acknowledged that Obama's remarks were similar to Mulally's, who credited the auto rescue for preserving the industry, but dismissed the statement, asking "how do you know that? It was my question then, it remains my question now."
While Cavuto cast doubt over whether or not Ford would have gone under, the fact that Ford would have been imperiled by the disintegration of the other "Big Three" automakers is not only well-established, Cavuto was told as much by Mr. Mulally himself on an edition of Your World taped one year previously.
During their interview, Mulally stated, "if GM and Chrysler, who were completely bankrupt, went into free fall they could have taken down the industry and the U.S. economy from a recession into a depression." He went on to state that all of the remaining automakers "would have been in real trouble."
In addition to downplaying the necessity of the auto rescue, the panelists hypothesized that private capital could have been raised to shore up teetering automakers. This opinion, voiced by Charles Payne stating, "I honestly believe that the private sector would have stepped up and funded General Motors the way that bankruptcies have been funded in the past," also does not comport with the facts.
When the auto rescues were first designed in late-2008 the financial industry was in the midst of a free fall of its own, which Fox has also recently downplayed. There was very little private capital available in the United States for any large-scale bankruptcy and American automakers, unlike the subsidiaries of Toyota, Honda, and other auto transplants, could not draw credit from foreign governments or headquarters.
The auto bailouts, which were initially extremely unpopular, are now widely lauded as successful government responses to the myriad crises facing the economy in 2008 and 2009. Despite Fox's attempts to undermine the administration's handling of the auto industry, the rescues are popular in areas heavily reliant on the auto-industry and often credited for swinging key states toward Obama in the 2012 Election.
On Fox News, Wall Street Journal editorial board member Stephen Moore defended the GOP plan to cut billions from the food stamp program by falsely claiming the cuts wouldn't hurt children, that the program suffers from "immense" fraud, and that millionaires could qualify for benefits. But studies show fraud is extremely rare and millions of families will be negatively affected by the cuts.
On the September 20 edition of Fox's America's Newsroom, Moore downplayed the proposed $40 billion cuts to the program, claiming the benefits weren't "slashed" but "trimmed" and justified the move by saying there is an "immense amount of fraud" in the program that "you could live in a million-dollar mansion and still get food stamps," and that "families with children would not be affected by any of this":
Contrary to Moore's claim that children would not be impacted by the cuts, the Center on Budget and Policy Priorities found that the proposal would leave 3.8 million people without benefits, many of whom are in low-income families. The bill would also limit schools meals for hundreds of thousands of children:
- 1.7 million unemployed, childless adults in 2014 who live in areas of high unemployment -- a group that has average income of only 22 percent of the poverty line (about $2,500 a year for a single individual) and for whom SNAP is, in most cases, the only government assistance they receive (this number will average 1 million a year over the coming decade);
- 2.1 million people in 2014, mostly low-income working families and low-income seniors, who have gross incomes or assets modestly above the federal SNAP limits but disposable income -- the income that a family actually has available to spend on food and other needs -- below the poverty line in most cases often because of high rent or child care costs. (This number will average 1.8 million a year over the coming decade.) In addition, 210,000 children in these families would also lose free school meals;
- Other poor, unemployed parents who want to work but cannot find a job or an opening in a training program -- along with their children, other than infants.
CBPP included a table explaining how American households would be hurt by the cuts: