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President Donald Trump’s plan to beef up the defense budget by an additional $54 billion at the expense of civilian domestic spending, which he will unveil tonight before a joint session of Congress, has been derided by economists and experts for being "wholly unrealistic" and “voodoo” economics.
Bloomberg reported on February 26, that Trump’s first budget proposal would call for a $54 billion -- more than 9 percent -- increase in defense spending to be paid for with reductions to discretionary domestic spending, which Sen. Chuck Schumer (D-NY) described as the budgetary equivalent of taking “a meat ax to programs that benefit the middle-class.” White House press secretary Sean Spicer confirmed reports of the president’s budget priorities in a February 27 press briefing, adding that Trump would discuss his budget plan in more detail during his February 28 address to Congress.
Economists and experts have hammered Trump for months for proposing dramatic and seemingly unnecessary increases in defense spending. An October 19 article in New York magazine described Trump’s promises of new defense expenditures as “a random grab bag of military goodies, untethered to any coherent argument” because he lacked any vision or purpose for increasing funding to the military. According to figures compiled by the Peter G. Peterson Foundation, American defense spending already eclipses the military spending of the next seven countries combined:
The reception for Trump’s new budget outline has been similarly harsh. New York Times columnist and Nobel Prize-winning economist Paul Krugman derided the president’s claim that a “revved up economy” could fund new tax cuts and spending increases as “deep voodoo” -- alluding to Trump’s embrace of trickle-down economics. Washington Post contributor and Center on Budget and Policy Priorities (CBPP) senior fellow Jared Bernstein slammed Trump’s “wholly unrealistic” budget outline in a February 28 column and chided the president for claiming that he can simultaneously increase military spending, cut taxes on high-income earners and corporations, and reduce the federal deficit -- all while leaving vital entitlement programs alone. In order to even approach a balanced budget in 10 years, Trump would have to remove almost everything else in the budget:
According to a February 27 analysis from the CBPP, Trump's proposal, when coupled with his plan to boost infrastructure investments, would mean nondefense spending would see a whopping 15 percent reduction. The reason for the outsized hit to nondefense discretionary spending is that the programs covered by that part of the federal budget -- education, energy, affordable housing, infrastructure investments, law enforcement, foreign aid, some veterans' benefits, etc. -- only account for a small part of all federal spending. The largest part of the federal budget is mandatory spending for entitlement programs including Social Security, Medicare, Medicaid, other veterans's benefits, and unemployment insurance. From the Congressional Budget Office:
Trump’s proposed cuts to the State Department are so onerous that more than 120 retired generals signed an open letter to congressional leaders warning of their ramifications. One co-signer told CBS News that such steep cuts would be “consigning us to a generational war,” and the letter itself quoted Secretary of Defense James Mattis, who argued during his time at the head of U.S. Central Command that “if you don’t fully fund the State Department, then I need to buy more ammunition.”
ThinkProgress blasted Trump’s proposals to cut the State Department along with domestic spending in the name of increasing national defense because such cuts would actually undermine national security. The article cited recent congressional testimony from Center for American Progress senior fellow Larry Korb, who testified that “our national security will suffer” if the federal budget prioritized the Pentagon at the expense of other agencies.
Trump is notorious for pushing bogus claims about the economy and the federal budget. He has been derided by hundreds of economists for pushing right-wing myths about the economy and the federal debt, and routine criticisms of his unfounded claims were a mainstay of the presidential campaign in 2016. As was the case last year, the budgetary, fiscal, and tax policies Trump has supported since taking office simply don’t add up.
After President-elect Donald Trump pledged during his presidential run to rescind an executive action on immigration that protects from deportation thousands of undocumented immigrants brought to the U.S. as minors, cable news outlets routinely discussed the program as a political tool without explaining how it benefits Americans and the American economy.
The 2012 executive action known as Deferred Action for Childhood Arrivals, or DACA, allows almost 800,000 people to study, work, and live their lives in the United States without fear of deportation. As a result of not being forced to live in the shadows, DACA recipients have generated more government revenue in the form of sales and property taxes, and created new jobs through increased consumer spending and boosted wages. The program has benefited the entire economy, but cable news coverage of DACA depicts the program as if it impacts only those who it protects from deportation.
Media Matters reviewed how evening news programs on Fox News, CNN, and MSNBC covered DACA from August 31 -- when Trump announced he would put an end to the program -- to December 15. Of the 20 qualifying segments on DACA during that time period, its economic impact was mentioned only once. Even then, the discussion failed to provide many facts on the scope of the program’s benefits.
Meanwhile, new reports investigating the effect of rescinding DACA conclude that doing so would do more harm than good for all Americans, not just the thousands of undocumented immigrants protected by the program. On December 13, Univision reported on a study from the Immigrant Legal Resource Center, which found that ending DACA would reduce contributions to Social Security and Medicare by $19.9 billion and $4.6 billion, respectively, over 10 years. On December 15, Telemundo reported that if approximately 3.4 million undocumented immigrant homeowners, many of whom are protected under DACA, lost protections from deportation, the resulting mass deportation “could hit the housing market, causing losses of up to $9.3 billion.” Additionally, a November 18 report by the Center for American Progress estimated that “ending DACA would wipe away at least $433.4 billion from the U.S. gross domestic product” over the next 10 years.
Cable news networks’ failure to connect the dots on how anti-immigration policies would negatively affect the economy is a disservice to voters whose decisions at the polls were guided by a desire for a strong economy.
Media Matters conducted a Nexis search of transcripts from Fox News, CNN, and MSNBC using the search terms "allcap(DACA) or dreamer or Deferred Action for Childhood Arrivals" for programs airing between 5 p.m. and 11 p.m. from August 31 through December 15. We reviewed the transcripts for segments discussing the economic impact of DACA. This included reports from correspondents and guest panels and excluded brief mentions of DACA that did not generate meaningful discussion between hosts or guests.
MSNBC Only Outlet To Vet Ryan's Scheme To Gut The Social Safety Net
Weekday evening programming on the largest cable and broadcast news outlets almost completely ignored a long-standing Medicare privatization scheme favored by Speaker of the House Paul Ryan (R-WI) in the days since he first resurrected the idea of radically reshaping the American health care system toward for-profit interests.
During a November 10 interview with Fox News host Bret Baier, Ryan misleadingly claimed that due to mounting “fiscal pressures” created by the Affordable Care Act, the Republican-led Congress would be forced to engage with what Baier called “entitlement reform” sometime next year. Ryan falsely claimed that “because of Obamacare, Medicare is going broke” and that the popular health insurance system for American seniors will have to be changed as part of any legislation to “repeal and replace” President Obama’s health care reform legacy. From Special Report with Bret Baier:
According to a Media Matters analysis of broadcast and cable evening news coverage from November 10 to November 27, Ryan’s plan to privatize the nationwide, single-payer health care coverage currently enjoyed by millions of seniors has gone unmentioned on ABC, CBS, NBC, CNN, and Fox News. Ryan’s so-called “premium support” plan was briefly mentioned on the November 22 edition of PBS NewsHour when co-host Judy Woodruff pressed President-elect Donald Trump's former campaign manager, Kellyanne Conway, as to whether Trump would accept Ryan’s privatization proposal. By comparison, during the same time period, MSNBC ran six prime-time segments exposing Ryan’s privatization agenda:
According to a July 19 issue brief from the Kaiser Family Foundation, conservative lawmakers are likely to pursue “a proposal to gradually transform Medicare into a system of premium supports, building on proposals” adopted by Ryan when he served as chairman of the House Budget Committee. These so-called “premium supports” would provide each Medicare beneficiary with a “voucher” that can be used for the purchase of private health insurance; they represent “a significant change from the current system” that pays health care providers directly for services rendered.
In essence, Ryan’s plan would privatize Medicare and redirect hundreds of billions of tax dollars that currently go to doctors, hospitals, and other medical service providers through the costly private health insurance market.
This startling scheme bears similarities to a failed 2005 attempt by the Bush administration to partially privatize Social Security. Democratic members of Congress are already aligning themselves against Ryan’s throwback plan to gut Medicare, and it’s not actually clear if Trump is supportive of the initiative, which he refused to fully endorse on the campaign trail.
As the Center on Budget and Policy Priorities (CBPP) pointed out last July, claims that Medicare is “nearing ‘bankruptcy’ are highly misleading,” and Ryan’s specific charge that Medicare is “broke” because of the ACA is completely wrong. President Obama’s health care reform law greatly improved Medicare’s long-term finances and extended the hospital insurance trust fund’s solvency by 11 years.
The looming fight over the future of Medicare, which serves over 55 million beneficiaries and accounted for 15 percent of the entire federal budget in 2015, has been well-documented, but it has garnered almost no attention on major television news programs.
Millions of Americans who rely on broadcast and cable evening news are completely unaware of the stakes in this health care policy fight. They are also unaware that Ryan’s privatization scheme would leave millions of retirees at the whims of the same private insurance market that right-wing media are currently attacking because of increased rates.
Media Matters conducted a Nexis search of transcripts of weekday network broadcast evening news programs on ABC, CBS, NBC, and PBS and weekday prime-time news programming (defined as 8 p.m. through 11 p.m.) on CNN, Fox News, and MSNBC from November 10, 2016, through November 27, 2016. We identified and reviewed all segments that included any mention of “Medicare.”
Moderator Falsely Claims Social Security And Medicare Are “Going To Run Out Of Money” Without Major Benefit Cuts
Fox News host and 2016 presidential debate moderator Chris Wallace used the last question of the presidential debate to push both the Democratic and Republican nominees into accepting a past GOP proposal -- harmful cuts to vital entitlement programs as part of a national debt-reducing “grand bargain.”
Wallace opened his question by falsely claiming that “the biggest driver of our debt is entitlements” like Social Security and Medicare while falsely equating the nonpartisan Committee for a Responsible Federal Budget (CRFB) analyses of Donald Trump’s and Hillary Clinton’s tax and economic policy proposals. Wallace claimed that the CRFB “has looked at both” the Trump and Clinton tax plans and concluded “neither of [them] has a serious plan” to address “the fact” that Medicare and Social Security are going to run out of money in the next two decades:
CHRIS WALLACE: The one last area that I want to get into with you in this debate is the fact that the biggest driver of our debt is entitlements, which is 60 percent of all federal spending. Now the Committee for a Responsible Federal Budget has looked at both of your plans and they say neither of you has a serious plan that is going to solve the fact that Medicare is going to run out of money in the 2020s, Social Security is going to run out of money in the 2030s, and at that time recipients are going to take huge cuts in their benefits. So, in effect, the final question I want to ask you in this regard is, and let me start with you, Mr. Trump. Would President Trump make a deal to save Medicare and Social Security that included both tax increases and benefit cuts -- in effect, in effect a grand bargain on entitlements?
WALLACE: Secretary Clinton, same question, because at this point Social Security and Medicare are going to run out -- the trust funds are going to run out of money. Will you as president entertain -- will you consider a grand bargain, a deal, that includes both tax increases and benefit cuts to try to save both programs?
Wallace’s question ignores three important points.
First, the CRFB did not score the Clinton and Trump tax plans as roughly equivalent in terms of their impact on the debt and deficit. According to a September 22 analysis from the organization, Trump’s economic agenda will create $5.3 trillion in new debt accumulation over the next decade -- more than 25 times more new debt that Clinton’s more balanced plan. University of Michigan economist and New York Times columnist Justin Wolfers tweeted a chart from CRFB showing how Trump’s plan would “explode” the national debt beyond current projections, whereas Clinton’s proposal leaves it “basically unchanged”:
Here's how Clinton's plans alter the debt trajectory. (It's hard to see; it's basically unchanged). And you'll see Trump's plan explode it. pic.twitter.com/UCayFwDupM
— Justin Wolfers (@JustinWolfers) October 20, 2016
Second, as economist Jared Bernstein of the Center on Budget and Policy Priorities wrote on Twitter, Medicare and Social Security “DO NOT run out of money!!” because they are paid for by secured trust funds and specific permanent tax provisions. Bernstein also noted that the Affordable Care Act, which Trump vowed to repeal during the debate, has actually extended Medicare “solvency by 11 years.” Economist Dean Baker of the Center for Economic and Policy Research added that, because the program can only spend money from a protected trust fund, “Social Security can’t legally drive the debt.”
Third, Wallace’s supposed solution to avoid benefit cuts for Social Security and Medicare recipients in the 2030s is to start implementing those cuts today. As New York Times columnist and Nobel Prize-winning economist Paul Krugman has noted many times, “these proposals would be really bad public policy” and would harshly impact low-income Americans who rely on the programs for retirement security. The only reason Social Security faces a long-term revenue shortfall is because the payroll tax that funds it is only applied to the first $118,500 of individual earnings. If the payroll tax cap was lifted to include more taxable earnings, the program could bring in more revenue and be funded through the end of the century. As Krugman notes, “while most Americans love Social Security, the wealthy don’t. Two years ago a pioneering study of the policy preferences of the very wealthy found many contrasts with the views of the general public; as you might expect, the rich are politically different from you and me. But nowhere are they as different as they are on the matter of Social Security.”
Wallace’s decision to relitigate the failed “grand bargain” from 2011 wasn’t the only example of the Fox News host using the debate as a forum to push a conservative policy agenda. However, his specific fearmongering and misleading framing of the debt and entitlements does vindicate economic policy experts’ many concerns about him moderating the debate in the first place.
New York Times columnist David Leonhardt called on Fox News host Chris Wallace to base “his questions on budget reality” during the “debt and entitlements” portion of the third and final presidential debate that he will moderate tonight -- the first general election debate ever moderated by a Fox personality. Given Wallace’s track record of parroting right-wing media budget hysteria from his anchor desk at Fox News, it is possible that the moderator will fall short of what Leonhardt characterized as his “reputation as a serious journalist.”
Speaker of the House Paul Ryan’s (R-WI) new series of proposals -- released June 7 in a report commissioned by House Republicans titled “A Better Way to Fight Poverty” -- aims to restructure federal anti-poverty programs, but they heavily rely on myths commonly promoted by right-wing media outlets that mislead about poverty and shame the poor. On June 6, the Center for American Progress (CAP) released its own plan to reform and restructure anti-poverty programs in the United States, offering an example of what serious proposals look like when informed by serious economic research, rather than by right-wing media myths.
A New York Times article claimed that presumptive GOP presidential nominee Donald Trump’s pledge “to protect Social Security and Medicare” and to “leave entitlements untouched” indicates he’s taken a page from Democratic candidate Bernie Sanders’ campaign playbook. But The Times failed to note that Trump previously called Social Security a “Ponzi scheme” and that at least two of his advisers have advocated cutting or privatizing Social Security, Medicare, Medicaid, and disability benefits -- and have indicated as recently as this month that Trump would also be open to changing those programs.
Fox News and numerous other conservative media outlets uncritically presented the misleading conclusions of a May 2016 report by the anti-immigrant Center for Immigration Studies (CIS), which claimed that immigrant-headed households consume more welfare than households headed by native-born people. Right-wing media have ignored criticism from experts pointing out the report’s methodological flaws and exaggerations in order to present immigrants as a fiscal burden.
Right-wing outlets including Breitbart, Newsmax, and The Daily Caller hyped the May 9 CIS report claiming that immigrant-headed households receive more welfare than households headed by native-borns. On May 12, Fox correspondent Eric Shawn presented the study’s claims uncritically during the “Truth Serum” segment of Fox’s The O’Reilly Factor. Host Bill O’Reilly introduced the segment by announcing the story was about “tax money going to support illegal aliens”:
Experts have already leveled criticism at the report. Immigration policy analyst Alex Nowrasteh wrote that “The CIS headline result … lacks any kind of reasonable statistical controls” and that “CIS’ buried results undermine their own headline findings.” The American Immigration Council called the report “fundamentally flawed” and criticized its methodology as “creative accounting”:
The biggest shortcoming of both reports is that they count the public benefits utilized by U.S.-born children as costs incurred by the “immigrant-headed households” of which they are a part—at least until those children turn 18, that is, at which point they are counted as “natives.”
The problem with this kind of creative accounting is that all children are “costly” when they are young because they consume educational and health services without contributing any tax revenue. However, that situation reverses when they are working-age adults who, in a sense, “pay back” in taxes what they consumed as children. So it is disingenuous to count them as a “cost of immigration” one minute, and then as native-born taxpayers the next minute.
According to the Southern Poverty Law Center (SPLC), CIS has ties to hate groups in the nativist lobby and “has never found any aspect of immigration that it liked, and it has frequently manipulated data to achieve the results it seeks.” CIS has repeatedly been criticized for publishing shoddy research work that includes the “misinterpretation and manipulation of data” and methodologies that are “deeply flawed.”
These criticisms of the new report received no mention on right-wing media reports on the study. Previous equally flawed CIS studies have been similarly promoted by conservative media, indicating a pattern: CIS publishes a study with anti-immigrant conclusions, and right-wing media ignore facts to report it uncritically, despite expert criticisms pointing to methodological flaws, nuances, or controls that undermine the study’s conclusion. This cycle joins other dishonest strategies from the immigrant smearing playbook that have been repeatedly employed by right-wing media.
Previous Media Matters Research Revealed That Inequality Was Mentioned In Only 23 Percent Of Economic News Coverage
A new report from researchers at Stanford University found that the United States is "dead last" among other developed countries on poverty and inequality measures, which highlights the need for media outlets to focus more on these issues.
On February 1, the Stanford Center on Poverty and Inequality published a special edition of Pathways magazine featuring the university's "State of the Union Report" for poverty and inequality in 2016. The report found that among 10 similarly developed nations -- including Australia, Canada, Finland, France, Germany, Italy, Norway, Spain, and the United Kingdom -- the United States had the highest levels of income inequality and wealth inequality, and the worst-rated social safety net. The U.S. placed near the bottom (eighth) in terms of both economic mobility and labor market strength, and finished only fifth in terms of poverty. According to the report's authors, a weak safety net, stagnant economic mobility, and rampant economic inequality are the primary reasons for the United States' poor performance, but a "moderate increase" in public spending on safety net programs would push poverty in the U.S. down to the levels of its peers (emphasis original):
The research shows that, among the well-off countries for which comprehensive evidence is available, the U.S. has the lowest overall ranking, a result that arises in part because the U.S. brings up the rear in safety net performance, income inequality and wealth inequality. When the comparison set is expanded to include other less well-off countries, America still ranks 18th (out of 21 countries), with only Spain, Estonia and Greece scoring worse.
The report also notes some bright spots. It shows, for example, that a relatively moderate increase in U.S. safety net spending would push the poverty rate down to levels observed in other well-off countries. The rate of disposable-income poverty, which is the rate that people actually experience after transfers play out, is especially high not because market incomes are all that low but because the safety net is relatively small.
These findings create greater urgency for American media to adequately report on issues related to poverty and economic inequality. According to a recent Media Matters analysis of cable and broadcast economic news coverage in the second half of 2015, media's focus on economic inequality slipped to its lowest point since late 2013. In the second half of 2015, just 23 percent of qualifying economic coverage contained significant discussions of economic inequality:
The findings also highlight a need for media to counter prevailing myths that public assistance programs are expensive and ineffective. According to the study, the United States could measurably improve its poverty rate compared to the rest of the developed world with "a relatively modest increase" in safety net spending at a time when Republican lawmakers, including Speaker Paul Ryan, have proposed doing the opposite. Calls from conservative lawmakers to gut the social safety net are propped up by right-wing media outlets notorious for shaming those that need assistance, and progressive calls to preserve and expand vital programs are openly attacked by the same right-wing outlets.
An editorial in New Hampshire's Union Leader praised Republican presidential candidate Gov. Chris Christie's (R-NJ) proposal to reform Social Security but avoided mentioning specific components of the plan, which critics have called "particularly cruel and regressive."
The January 17 editorial applauded Christie's eagerness to talk about his "detailed plan to save Social Security and Medicare" during a presidential debate while other candidates avoided making specific recommendations. The editorial did not mention any of the specific components of Christie's plan:
It's easy to talk tough on taxes, especially in a Republican primary.
It's much harder to tackle the long-term unfunded liabilities in the nation's entitlement programs that threaten to swamp an already unbalanced federal budget.
During last week's Republican presidential debate in South Carolina, Chris Christie made sure voters knew how he plans to tackle this vital fiscal challenge.
Debate moderator Maria Bartiromo asked Marco Rubio, "One of the biggest fiscal challenges is our entitlement programs, particularly Social Security and Medicare. What policies will you put forward to make sure these programs are more financially secure?"
Rubio ducked, ignoring entitlements completely in order to attack Ted Cruz's plan for a value added tax. He and Cruz then went back and forth on the issue.
Christie jumped in to actually answer Bartiromo's question. Rubio tried to get back in, but Christie told him, "You already had your chance, Marco, and you blew it."
Vox's Matthew Yglesias called the details of Christie's reform plan "particularly cruel and regressive," and noted that the plan would "especially inflict pain on the poor." Yglesias explained that because Christie's plan would raise the age at which a person can collect Social Security to 69 years old over time, the plan would effectively cut total benefits for the poor because low income people have shorter life expectancy than higher earners.
Experts have explained that Christie's plan, which also reduces Social Security payments to certain future recipients making over $80,000 per year and ends them entirely for those making $200,000 in other income, will produce little savings for the program. Urban Institute senior fellow Karen Smith told The New York Times, "[Christie's] proposal reduces program revenue and does not reduce benefits enough soon enough to make Social Security solvent." National Women's Law Center vice president for economic security Joan Entmacher added, "you can't get much savings out of means-testing Social Security unless you go after the middle class."
The Union Leader's praise of Christie's willingness to discuss his Social Security plan while overlooking the plan's specific components has become a trend since the paper's endorsement of Christie for president in November 2015. The editorial board previously echoed Christie's campaign slogan praising his ability to "[tell] it like it is," leapt to promote his inflated counter-terrorism credentials and praised his economic record, all while newspapers from his home state were critical of his leadership during his tenure as governor.
A New Hampshire Union Leader editorial defended Gov. Chris Christie's (R-NJ) Social Security proposal, claiming he would "save" the program, after the New Jersey Governor's plan was attacked by Republican presidential front runner Donald Trump. However, experts agree Christie's plan would make the program less solvent and hurt low income Americans.
The Union Leader, which endorsed Christie in November, claimed in a December 10 editorial that Trump was using "liberal scare tactics" when he criticized Christie's plan to raise the retirement age. The paper went on to praise Christie for being the "first candidate in either party to put forward a detailed plan to address entitlements." The Union Leader continued:
But Christie's plan to save Social Security and Medicare wouldn't touch the retirement age for current retirees. Trump would know this, if he actually bothered to check his facts before speaking.
[Christie] would gradually raise the retirement age for younger workers, and means-test benefits for those making more than $200,000 per year in retirement income.
Several GOP candidates have backed responsible entitlement reform plans. Trump parrots liberal scare tactics, consistent with his long-held support for big government.
Trump would pander to seniors, do nothing, and watch Social Security go as bankrupt as one of his casinos.
Trumps criticism aside, experts agree that Christie's plan is both misguided and politically toxic. As Karen Smith, a senior fellow at the Urban Institute, told The New York Times, "[Christie's] proposal reduces program revenue and does not reduce benefits enough soon enough to make Social Security solvent." Comparing Christie's plan to Democratic candidate Bernie Sanders' plan -- which the Urban Institute says would extend solvency -- Christie's will result in Social Security becoming insolvent sooner than if no changes were made.
Christie's plan relies heavily on the populist message of reducing benefits paid to wealthy Americans. As Vox's Matthew Yglesias points out, this popular selling point has been trumpeted by media while reporting on the proposal, despite, as he explains, Christie's plan actually being "terrible for the poor." Citing life expectancy data, Yglesias writes that, because rich Americans live longer than poor Americans, Christie's plan "is a particularly cruel and regressive form of cut."
As far as Christie's proposed plan to cut off Social Security benefits to those making over $200,000 a year, the Center for Economic and Policy Research (CEPR) noted that "while the rich have a large share of the income, they don't have a large share of Social Security benefits." CEPR concluded that Christie's proposal would only save about 1.1 percent of benefits currently being paid out.
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More Questionable Research From The SPLC-Labeled Nativist Group, The Center For Immigration Studies
Numerous conservative media outlets are parroting the misleading conclusions of a September 2015 report by an anti-immigrant nativist group, the Center for Immigration Studies (CIS), which claims that "immigrant households use welfare at significantly higher rates than native households." Like previous flawed CIS studies, these findings have been called into question by immigration experts for failing to account for the economic hardship of some immigrant families, lumping American-born beneficiaries into "immigrant household" categorizations, and conflating numerous anti-poverty programs with so-called "welfare."