Budget Deficit and National Debt | Media Matters for America

Budget Deficit and National Debt

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  • Media keep calling the GOP's corporate tax bill a "win" for Trump

    The extraordinarily unpopular bill is built on lies and ignores what we know about economics

    Blog ››› ››› CRAIG HARRINGTON

    President Donald Trump and his Republican congressional allies are enjoying a round of praise from media commentators for finally getting a legislative “win” on the board as their tax bill closes in on passage before the end of the year. The budget-busting corporate giveaway will enrich the superwealthy and do little for Americans who have to work for a living.

    Republicans finally unveiled the finished version of their tax legislation last Friday evening, and -- despite the public having just days to absorb its 1,097 pages -- both chambers of Congress plan to vote on the bill before the end of the week. If everything goes according to plan, the president will sign the bill into law just in time for members to head home for the holidays.

    After a year plagued by self-destructive outbursts, failed policy changes, unprecedented legal troubles, embarrassing scandals, humiliating legislative defeats, and nationwide political upheaval, many in the press are framing the GOP tax proposal as a crucial “win” for Trump and his party.

    On the December 18 edition of CNN Newsroom, co-host Poppy Harlow wondered how anyone could argue the past year “hasn’t been a win for the president on some big fronts,” given a handful of recent accomplishments, including the new tax bill. Reporter Caitlin Huey-Burns agreed with Harlow’s assessment while noting that such favorable framing fits “the way that the White House has been messaging their own achievements”:

    During an earlier segment on CNN’s New Day, guest A.B. Stoddard suggested that the Republican tax bill, which the Economic Policy Institute has labeled “a scam,” could count as “a great boon for Republicans” and “a win on the board,” if the bill actually fulfilled its over the top promises. (It won’t.) Commentary framing the expected party-line vote as a major victory for the GOP also cropped up in The Associated Press, Politico, The Hill, and The New York Times. Reporters have seemingly gone out of their way to pat Republicans on the back for endorsing legislation so historically unpopular it registers significantly less support than some previous tax hikes:


    In a December 15 video, Eric Schoenberg of the activist group Patriotic Millionaires explained how the GOP tax bill overwhelming favors wealthy people like him (and the Trump family) while doing little for lower- and middle-class people. Trump and the Republicans continue falsely claiming that the bill will spur business development, boost wages, and stoke renewed economic growth, but the message is such a fantasy even Fox News had to admit there was nothing to it. Previous studies from the Congressional Research Service and the Brookings Institution have demonstrated little relationship between tax cuts for the wealthy and invigorated economic activity, which Trump and the GOP have promised will result from this tax bill.

    The bill permanently cuts taxes for corporations while giving only modest, temporary relief for working people. It loosens tax structures affecting the wealthiest Americans while threatening funds for Medicare, Social Security, Medicaid, and other initiatives that guarantee basic economic security to low-income families. The bill promises to add another $1.5 trillion to federal budget deficits over the next decade despite years of hysteria about Obama-era revenue shortfalls. The bill also senselessly repeals the Affordable Care Act’s individual mandate, which will likely result in millions of Americans dropping out of the insurance market.

    Rather than praising the Republican Party for ending a remarkably unproductive year by managing to cobble together a tax giveaway to the super rich, journalists should report on what is actually in the bill. Trump and the GOP have definitely enjoyed some "wins" this year, but reporters need to point out that the Republican Party's successes have often resulted in pain and suffering for millions of Americans.

  • Ali Velshi and Stephanie Ruhle unleash a torrential debunking of a GOP congressman's tax policy lies

    This is exactly how journalists need to treat the Republicans’ messaging nonsense on their giveaway to the rich

    Blog ››› ››› CRAIG HARRINGTON

    MSNBC hosts Ali Velshi and Stephanie Ruhle thoroughly debunked conservative talking points about the Republican Party’s pro-corporate tax policy during an interview with an ill-prepared member of Congress, who was attempting to build support for his party’s proposed tax changes that overwhelmingly favor the wealthy.

    During the December 4 edition of MSNBC Live with Velshi and Ruhle, Velshi presented a detailed outline of the many ways in which Republican tax bills in the House and Senate will fall short of GOP promises and commitments. Velshi noted that numerous independent analyses have shown the GOP plans will add upwards of $1 trillion to the national debt, and pointed out that despite “huge changes made to our tax code … we’ve seen no observable shift to long-term growth rates in the last 150 years.” Velshi also pointed to a survey conducted by the University of Chicago’s Booth School of Business, which found that none of the 42 leading economists surveyed believe the plans will be able to boost economic growth rates by enough to make up for lost revenue. He concluded the segment by pointing to a recently-released Goldman Sachs analysis of the Senate tax bill, which concluded that economic growth stemming from the tax bill will be lower than Republicans have claimed, and, as Velshi stated, “possibly even … negative” after a few years:

    Immediately after outlining all the problems in the GOP tax plans, MSNBC invited Rep. Chris Stewart (R-UT) on the program and gave him an opportunity to defend his party’s policy priorities. Stewart’s performance did not go as he might have anticipated, with co-hosts Velshi and Ruhle taking turns debunking GOP talking points and pillorying Stewart’s excuses for the tax plan.

    The co-hosts rebuffed Stewart’s repeated assertions that tax cuts for profitable corporations and wealthy individuals will boost economic growth (a 2012 Congressional Research Service study found no correlation between income tax rates and economic growth, and a 2014 study from the Brookings Institution argued the relationship between tax cuts and growth was “theoretically uncertain”), they corrected his false claim that the United States has the world’s highest corporate taxes (effective corporate rates are the same as other developed countries), and they called out his false claim that “the American people want us to do this” (the GOP tax plans are actually extremely unpopular). When Stewart claimed the GOP plans are effective in simplifying the tax code, Ruhle challenged him over and over to name a single corporate loophole that is being removed (he couldn’t), and both co-hosts stung Stewart over how Republican plans fail to address the so-called “carried interest” loophole, which helps extremely high-income individuals avoid paying taxes on some of their income.

    By the end of his nearly 11-minute grilling, Stewart was actually defending the discredited theory of “trickle-down economics” by name, which Velshi correctly noted was such a disaster in Kansas that the state’s Republican-dominated legislature had to abandon their conservative tax agenda.

    This takedown from Velshi and Ruhle is not the first time the MSNBC duo has discredited the GOP’s hollow economic message. Both Velshi and Ruhle have spent considerable time over the past several months pointing out that the Republican agenda favors wealthy individuals, profitable corporations, and the Trump family at the expense of lower- and middle-income Americans. This important work in correcting purposeful misinformation about the GOP's right-wing agenda is all the more important as Republican lawmakers prepare to enact tax policy changes that could affect millions of Americans for years to come.

  • MSNBC hosts offer a perfect cable news template for covering Trump’s tax cut charade

    Ali Velshi and Stephanie Ruhle dismantle arguments that Trump plan will benefit the economy

    Blog ››› ››› CRAIG HARRINGTON

    Sarah Wasko / Media Matters

    In response to the release of a new Republican tax proposal, three consecutive segments hosted by MSNBC’s Ali Velshi and Stephanie Ruhle offered a perfect example of how cable news ought to cover President Donald Trump’s tax agenda.

    The September 27 edition of MSNBC Live with Velshi and Ruhle opened with the co-hosts breaking down the entire Trump tax cut plan. Velshi argued that proposed income tax changes were “a little smoke and mirrors” and would have no “meaningful effect on prosperity” for most Americans, additionally explaining how Trump’s proposal to eliminate the estate and alternative minimum taxes -- which would result in massive tax giveaways to the Trump family -- “is a boon for the wealthy.”

    When Velshi explained Trump’s proposal to cut corporate tax rates, Ruhle interjected that Trump’s own companies (along with “law firms and hedge funds”) would benefit from the changes. Velshi concluded that the plan “overwhelmingly supports those who are higher earners” while Ruhle argued it is simply “disingenuous” to claim the middle class would benefit from Trump’s plan:

    The hosts then brought in CNBC correspondent John Harwood to discuss the tax plan, where he, too, stressed that the Trump plan “is simply not a tax proposal that is geared toward the middle class” and reminded viewers that Trump’s strategy resembles the failed tax cuts enacted by President George W. Bush. Obama administration press secretary Josh Earnest joined the conversation, concluding the segment by noting that none of Trump’s rally goers are motivated by reduced taxes for the rich and corporations:

    After thoroughly dismantling the Trump administration’s tax agenda, the program turned to conservative policy analyst Michael Strain of the American Enterprise Institute (AEI), who also noted that the plan, as it stands today, would be unlikely to fulfill Trump’s promises of increased economic growth and would end up adding to federal budget deficits. At the end of the segment, Earnest once again noted the “internal inconsistency” at play when Trump, after recently arguing the rich don’t need a tax cut, proposes a plan that gives them one:

  • Experts point out Trump’s budget “just doesn’t add up”

    White House budget proposal bases its revenue numbers on unrealistically high economic growth projections

    Blog ››› ››› ALEX MORASH

    Experts and journalists have pointed out that President Donald Trump’s budget numbers for the 2018 fiscal year do not add up, as they rely on unrealistic growth expectations. Nonpartisan experts say the gap between the White House’s estimates and the Congressional Budget Office’s is “the largest on record.”

    On May 23, the White House released its full budget proposal, which not only calls for kicking millions of working- and middle-class Americans off vital public assistance programs to make room for gigantic tax cuts for top income earners, but also bases its tax revenue projections on expected annual gross domestic product (GDP) growth of 3 percent by 2020. While right-wing media commentators have repeatedly defended trickle-down economic fantasies that predict unlikely levels of economic growth because of tax cuts for the rich, assuming such growth when determining revenue projections for the federal budget hides the true cost of Trump’s devastating budget plans.

    Experts and journalists quickly noted the absurdity of Trump’s projections in their coverage of the budget request. In a Washington Post blog, former Treasury Secretary Larry Summers, an economist at Harvard University, called the logic of Trump’s growth assumptions “simply ludicrous” and compared it to believing in the tooth fairy. On the May 23 edition of MSNBC Live, economist Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities (CBPP), told host Ali Velshi that Trump’s budget “does not add up at all” while noting that economic growth “is a function of the growth of the labor supply,” and that’s going to slow as the country grows older. Bernstein compared the chances of Trump’s projections coming true to the chances of a kitchen appliance coming to life to sing and dance, concluding that it is reckless for budget numbers to be “based on on these kinds of fairy tales”:

    On May 23, Vox correspondent Matt Yglesias pointed out that for anyone over 35, annual growth of 3 percent “doesn’t sound outlandish” because it is reminiscent of GDP growth during the 1990s. But Yglesias noted that if the United States did manage today to replicate 1990s-level growth in the labor force, productivity, and capital investment, “even under that rosy scenario” the growth rate would not hit 3 percent:

    In a May 24 column for Vox, economist and former Obama adviser Jason Furman explained in even more detail why 3 percent economic growth was “extremely unlikely,” with a specific focus on the slowing growth of the labor force. Furman also noted that the American economy is already growing faster than other advanced economies around the world, which have struggled to keep pace.

    As FiveThirtyEights Ben Casselman explained, the reason this level of growth is not currently attainable is that during the 1990s, the U.S. saw “rapid growth in its labor force and rapid gains in the productivity of that labor force.” By comparison, the baby boom generation today is retiring, not entering the workforce, which slows labor force growth, and “growth in productivity has slowed to a crawl” as electronic and internet-based technologies from the 1990s have matured.

    On May 24, The Washington Post’s Ana Swanson also looked at how realistic Trump’s growth projections would be with regard to labor force growth after Mick Mulvaney, director of the Office of Management and Budget, told reporters that much of the growth could come from getting the 6 million Americans marginally attached to the workforce to be fully employed. Yet, as Swanson noted, adding 6 million workers to the 160 million Americans already in the labor force would generate only 2 percent growth.

    Trump’s budget projections were not just debunked for lacking numbers based in reality; CBPP pointed out the historic gap between the White House’s economic growth projections and those of the nonpartisan Congressional Budget Office (CBO). According to a May 22 CBPP blog post, Trump’s budget proposal projects $3 trillion less in deficit accumulation using its 3 percent growth model than it would using the CBO’s less optimistic economic forecasting. The difference is even more striking because, as CBPP pointed out, the gap between the White House’s proposal and CBO forecasting is “the largest on record”: