Echoing their analysis from 2011, conservative media outlets have advised Republicans against raising the debt ceiling. The commitment to this narrative shows that the economic realities of the past debt ceiling debacle are being completely ignored by the right-wing media.
CNN guest and Wall Street Journal editorial board member Stephen Moore misrepresented House Minority Leader Nancy Pelosi's comments on taxes, falsely claiming that she said "we've got to tax the middle class." In fact, Pelosi said that while tax increases for upper-income Americans are "not off the table," she does not want to bring in more revenue "at the expense of the middle class."
CNN's Erin Burnett Outfront played a clip of Pelosi appearing Sunday on CBS' Face the Nation and saying that tax increases for upper-income earners are "not off the table" in future spending negotiations. Moore then claimed that "we've only had this tax increase on the rich for what, 72 hours, and already people like Nancy Pelosi are saying, well, we've got to tax the middle class."
However, the full context of Pelosi's remarks reveal that Pelosi, during her appearance on Face the Nation, clearly stated that she is not interested in raising taxes on the middle class:
BOB SCHIEFFER (host): People who are listening to you this morning are going to say she's talking about more taxes, she's talking about bringing in more, in one way or another, by increasing taxes.
PELOSI: One thing I'm not talking about is bringing in more at the expense of the middle class, at the expense of the middle class. That is not something -- and that was what we were fighting all along in this because, to the extent that you diminished the tax cut, the tax change at the high end, you would have to claw down into the middle class to get more revenue.
SCHIEFFER: Are you then saying to the upper classes, get ready, you're going to have to pay some more, this is not the end of it?
PELOSI: Well, I'm saying that's not off the table.
SCHIEFFER: That's not off the table?
PELOSI: That's not off the table. But not in terms of tax rates but in terms of other considerations.
SCHIEFFER: You're talking about deductions and other things.
PELOSI: And the rest.
SCHIEFFER: What would be some of the things that you think, on the upper-income people, what kind of deductions are you talking about?
PELOSI: As I said, I'm not going into particulars.
SCHIEFFER: You're not going into --
PELOSI: Put it all -- put it all on the table and see what is working.
She concluded that any further tax increases should "not ... reach down to the middle class."
From the January 7 edition of Fox News' Fox & Friends:
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On America's Newsroom, Fox Business host Stuart Varney ignored key economic data in claiming that the December jobs report is proof of "a new normal, bumping along the bottom, settling for this high rate of unemployment, 7.8 percent."
Varney began the segment by warning that "you can spin it any which way, but the fact is, this is a weak report," and ended it by claiming that tax increases assure that high jobless rates are "the new normal."
But Varney's assertion is spin as well, based on a myopic reading of economic data -- Varney and other conservatives who proclaim high unemployment the "new normal" ignore three discrete piles of information that undermine their claim.
First, private-sector job creation in Obama's first term has far exceeded that fostered by the Bush recovery:
The above chart measures from the first full month of each man's presidency. Despite beginning in a deeper economic hole, the beginning of the Obama recovery was marked by a faster turnaround and stronger overall growth in the private sector. By another metric -- annual averages for private-sector job gains -- this "new normal" is also superior to Bush's old normal. This is true whether one counts their full terms in office, or just the years in which the private sector posted annual gains. And it is hardly evidence of a horrifying "new normal" of "bumping along the bottom" due to taxation.
If there's a coherent point to Peggy Noonan's January 3 Wall Street Journal column on President Obama and the fiscal cliff, it's not readily apparent. The general thrust seems to be that the president is constitutionally incapable of cutting deals with his Republican adversaries in Congress, but Noonan's arguments are almost completely untethered to the actual story of the fiscal cliff negotiations.
Noonan writes of the president:
He didn't deepen any relationships or begin any potential alliances with Republicans, who still, actually, hold the House. The old animosity was aggravated. Some Republicans were mildly hopeful a second term might moderate those presidential attitudes that didn't quite work the first time, such as holding himself aloof from the position and predicaments of those who oppose him, while betraying an air of disdain for their arguments. He is not quick to assume good faith. Some thought his election victory might liberate him, make his approach more expansive. That didn't happen.
"Some Republicans were mildly hopeful a second term might moderate those presidential attitudes that didn't quite work the first time." What? Obama won reelection comfortably. He won reelection after passing sweeping health care and economic recovery bills in the face of unified Republican opposition. To the extent that Obama had "presidential attitudes that didn't quite work," they weren't dysfunctional enough to derail his agenda or make the 2012 race a nail-biter, so what exactly is Noonan talking about?
And what reason does the president have to "assume good faith" on the part of the GOP? On the day of his first inauguration the GOP congressional leadership plotted out its strategy to act in bad faith with the intention of unseating him. Is Obama supposed to trust them now because that goal is no longer operative? None of this makes sense.
The president didn't allow his victory to go unsullied. Right up to the end he taunted the Republicans in Congress: They have a problem saying yes to him, normal folks try to sit down and work it out, not everyone gets everything they want. But he got what he wanted, as surely he knew he would, and Republicans got almost nothing they wanted, which was also in the cards. At Mr. Obama's campfire, he gets to sing "Kumbaya" solo while others nod to the beat.
Obama had the stronger hand, but he did not get everything he wanted. The White House wanted tax rates to go up on household income exceeding $250,000; in the end they settled on $450,000. The president wanted the estate tax bumped to 45 percent and the exemption knocked down to $3.5 million; in the end it was set at 40 percent with a $5 million exemption. And that compromise came about by negotiating with the Senate while the House GOP fumbled about with the abortive "Plan B" -- Boehner's bill to raise rates on people making $1 million plus that failed when his own caucus refused to support it -- and threatened to scuttle the Senate deal before finally approving it.
Sticking with Noonan's campfire metaphor, Obama was singing "Kumbaya" while Senate Republicans mumbled along and the House GOP were off in the woods whacking each other with whiffle bats.
Following the passage of the American Taxpayer Relief Act, media figures have lamented that spending cuts were not included in the deal. However, experts believe that spending cuts made in 2011 should be included in assessing the latest deal, which shows budget cuts factor heavily into deficit reduction efforts.
In several on-air interviews about the then-pending fiscal cliff legislation, journalists allowed Rep. Darrell Issa (R-CA) to attack the bill without noting Issa's personal financial stake in opposing the legislation and keeping his own taxes at a lower rate.
In appearances on Fox News' Fox & Friends (1/2), CNN's The Situation Room (1/1) and CNN Newsroom (12/31/12), the issue of Issa's wealth was not broached by the reporters and anchors who interviewed him.
As Politico reported, Issa's 2011 financial disclosure statement showed almost $15 million in earnings from investments. The vast majority of Issa's income comes from investments -- income that will be taxed at a higher rate under the legislation that just passed (capital gains taxes will be increased from 15 percent to 20 percent for families making over $450,000 a year.)
The Center for Responsive Politics estimates that Issa has a net worth between $195 million and $700 million. Roll Call ranked him as the second wealthiest member of the 112th Congress, based on the lowest and most charitable estimate of his wealth (members of Congress are only required to report ranges of their wealth, not exact numbers.)
In voting "No" on the bill, Issa voted in his own self-interest, a pertinent fact that Fox and CNN never bothered to tell their viewers.
From the January 2 edition of Fox News' Fox & Friends:
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Conservative media figures have long insisted that top marginal income tax rates effectively target small businesses. This "zombie lie" has sprung up throughout President Obama's first term as an argument against Democratic proposals to renew the Bush-era rates only for middle- and low-income Americans. Despite continual efforts by experts to debunk this claim, media figures continue to repeat these lies in the 2012 edition of the fight over high-income tax rates.
In its recent economic coverage, Fox News consistently downplayed positive developments, while amplifying negative stories as part of an effort to discredit the Obama administration.
Faced with positive economic developments, such as falling jobless claims figures and encouraging unemployment reports, Fox News has consistently dismissed them as either unworthy of highlighting or downright illegitimate. Signs that show the economy is improving were either buried in teasers or used simply as a foil to bring up unrelated metrics, such as rising gas prices and the "real" unemployment rate.
Perhaps the greatest takeaway from Fox News' handling of positive economic news, however, is the now commonplace use of conspiracy theories to deny any signs of an improving economy. Leading up to the 2012 election, hosts and guests repeatedly touted the claim that drops in unemployment were suspicious, suggesting that the Obama administration somehow manipulated data to show numbers in its favor. The network even went so far as to preemptively offer a conspiracy theory prior to the release of the November unemployment rate, indicating that no positive news would be accepted, regardless of its legitimacy.
Negative news, however, was approached remarkably differently. Fox News treated any sign of economic malaise as an opportunity to discredit the efforts of the Obama administration, sometimes delighting in what it meant for his chances of reelection. Regardless of circumstances outside of Obama's control - such as Hurricane Sandy's effect on jobless claims and company scheduled layoffs - Fox News hosts and guests consistently took any negative economic news as an indication of the failure of the administration.
While the network has taken multiple approaches to covering economic news, one theme remains unchanged - Fox News has constructed an alternate reality where positive economic news is bad, and negative economic news is good, in an effort to discredit Obama.
From the December 21 edition of Fox News' Fox & Friends:
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From the December 18 edition of Fox News' America's Newsroom:
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Recent Media Matters research revealed the overwhelming absence of economists and economic debate in television coverage of year-end budget negotiations. The lack of expert opinion has led to an over reliance on easily digested phrases such as "fiscal cliff," which many economists feel is a misleading term.
A Media Matters study found that economists have been sorely lacking in media discussions of budget negotiations, accounting for only 4.4 percent of guests brought on to address the topic. Their scant presence has steered most discussions toward non-economic issues, such as political leverage in negotiations.
Of course, since budget issues are inherently economic, removing the economics from the discussion entirely is not possible. Instead of providing substantive context, the media seem to have taken the tack of relying on misleading buzzwords to do the explaining.
The so-called "fiscal cliff" describes a combination of automatic tax hikes and spending cuts set to take effect at the end of the year that, according to the Congressional Budget Office, could cause the U.S. economy to experience recession in 2013. The origins of the current use of the phrase "fiscal cliff" apparently stem from comments made by Federal Reserve Chairman Ben Bernanke in February 2012.
Since Bernanke's use of the phrase, it has become ubiquitous in media coverage of budget negotiations. Media Matters found that in 337 segments across cable and network news, the term "fiscal cliff" was used to frame discussions 287 times.
From the December 14 edition of Fox News' Fox & Friends First:
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The Wall Street Journal pushed the misleading claim that small businesses will be harmed by slightly increasing the top tax rates on the wealthy. In fact, only about 3 percent of small businesses will pay more in taxes under President Obama's plan to let the Bush-era tax cuts expire for household incomes above $250,000.
A Journal article claimed that "[i]f ideas proposed by the White House take hold -- a long shot -- rates for big companies likely would fall next year while those paid by many small-business owners through the individual tax system would rise." One of the president's key positions in deficit talks with Republicans is to raise revenue by not extending the Bush tax cuts on incomes over $250,000. Conservatives have long claimed that this policy would significantly impact small businesses, and Thursday's Journal repeated this claim:
These businesses account for about half of U.S. business income and more than one-third of private-sector employment, by some estimates. That growth has fueled tension between companies that continue to pay the corporate tax and smaller concerns that pay their taxes through their owners' individual income-tax returns.
But experts say that this tax increase will only affect a tiny portion of small businesses. The congressional Joint Committee on Taxation explained in a June memorandum that only "3.5 percent of all taxpayers with net positive business income" will face higher marginal rates. In July 2010, the non-partisan Tax Policy Center estimated that only 2.5 percent of these small businesses would face the higher tax rates.
Experts also say that many of the businesses that earn enough income to be impacted by higher marginal tax rates are not traditional small businesses. Former George W. Bush economist Alan Viard told The Washington Post: "How can it be that 3 percent of owners are accounting for 50 percent of small business income? Those firms they're owning can't be all that small." The Center on Budget and Policy Priorities explained that the definition of "small business" used when discussing business income includes "concerns like large corporate law practices, accounting firms, and wealthy people who invest in financial and real estate partnerships." TaxVox editor Howard Gleckman elaborated in May 2011 on the problem with claiming these tax increases would harm small businesses:
[T]here is an awful lot we don't know. For example, we don't know how many are real businesses and how many represent a bit of side income for people otherwise employed at regular jobs (imagine, for instance, a tax economist who picks up a few bucks reviewing smartphones on the Web). At the same time we don't know much at all about those hedge funds, law firms, and real estate partnerships that likely account for a large share of the total business income reported on individual returns.