Media Use Katrina to Lobby for Higher Taxes
Criticism for budget deficits has been replaced by calls for big government
 

By Noel Sheppard
September 13, 2005

     As quickly as the water started rising in New Orleans, America’s media began blaming Hurricane Katrina-related damages on the president’s 2001 and 2003 economic stimulus packages. The overriding theme the first week after Katrina hit was that the levees of Louisiana failed due to a lack of federal funding stemming from “tax cuts for the rich.” However, a closer look at the federal budget reveals that funding for departments and agencies administering U.S. “Physical Resources” – Agriculture, Commerce, Energy, Transportation, Environmental Protection, etc. – increased by 35 percent during George W. Bush’s first term.

     But the media have claimed that tax cuts reduced our nation’s ability to protect New Orleans from a natural disaster.

• On September 2, NPR’s Nina Totenberg on PBS’s “Inside Washington” said: “For years, we have cut our taxes, cut our taxes and let the infrastructure throughout the country go and this is just the first of a number of other crumbling things that are going to happen to us.”
• On September 4, Chris Matthews on the NBC show carrying his name said: “There wasn’t enough to fix the levees because we’re spending too much and not taxing enough.”
• The New Republic’s Andrew Sullivan on that same installment of “The Chris Matthews Show” said: “The tax cuts were going to stay in place, and we were going to do the war on the cheap and we’re going to do civil defense on the cheap, and that’s what happened.”

     Media distortions of tax issues are not new, as the Free Market Project and the National Taxpayers Union have reported. The reality is that since 2001 – despite the tax cuts – federal spending has gone from $1.9 trillion to a projected $2.5 trillion in fiscal 2005, increasing 32 percent or $600 billion. Since the second round of tax cuts in 2003, tax receipts have grown from $1.8 trillion to an estimated $2.2 trillion in fiscal 2005 – an increase of 22 percent or $400 billion. Depending on the final 2005 number, the last two years could represent a record increase in revenues, as the period from 1998 through 2000 grew by only 18 percent or $300 billion.

     The last time that federal spending grew faster than it has in the past four years is during President Reagan’s first term more than two decades ago. This 32 percent rise in spending since Bush took office is twice the rate that our government’s budget grew during either of President Clinton’s two terms.

     As spending exploded in Bush’s first term, funding for departments and agencies administering to our nation’s “Physical Resources” – Agriculture, Commerce, Energy, Transportation, Environmental Protection, etc. – increased by 35 percent. Included in Physical Resources is funding for Natural Resources and Environment (NRE). When Bush took office, the budget for this was $29 billion. For fiscal 2005, it is $32 billion, a 10 percent increase.

     That leads to the part of the budget inside NRE that has likely been most misrepresented by the media in the past two weeks: the Army Corps of Engineers. An article in the August 31 Editor and Publisher, the journal that covers the news industry, started the accusations:

“Yet after 2003, the flow of federal dollars toward [Southeast Louisiana Urban Flood Control Project] dropped to a trickle. The Corps never tried to hide the fact that the spending pressures of the war in Iraq, as well as homeland security – coming at the same time as federal tax cuts – was the reason for the strain.”

     Contrary to press assertions, funding for the Corps has increased since Bush took office. In 2003, the budget for the Corps was $4.7 billion. This increased to $4.8 billion in 2004, and $4.9 billion in 2005. New York Times columnist John Tierney, in a September 10 op-ed, appeared to be one of the few to recognize this:

“But that hasn't meant less money for the Corps during the past five years. Overall spending hasn't declined since the Clinton years, and there has been a fairly sharp increase in money for flood-control construction projects in New Orleans.”


If tax cuts hurt, then tax hikes must help

     In the last week, the media began changing their mantra from “Tax cuts hurt New Orleans” to “Tax hikes are necessary to rebuild New Orleans”:

• On September 4, The Washington Post’s Jonathan Weisman wrote about how Katrina should alter any suggestion of extending current tax cuts in an article entitled “GOP Agenda in Congress May Be at Risk.”
• On September 7, ABC’s Charlie Gibson on “Good Morning America” claimed to have discussed with Sen. Hillary Clinton (D-N.Y.): “Given the fact that it's going to cost so much for recovery and with what we're spending in Iraq whether we're not going to have to raise taxes."
• On September 9, the Washington Post’s Steven Pearlstein said of Katrina: “It has reduced national wealth by several hundred billion dollars, displaced hundreds of thousands of citizens, aggravated bloated budget and trade deficits and reduced the political odds for permanent tax cuts on capital.”
• On September 10, The New York Times’ Mark Stein wrote this: “Rescue, recovery and reconstruction efforts could cause the federal budget deficit to grow by 15 to 20 percent or more this year and may threaten plans to cut taxes further or to make earlier cuts permanent.”

Noel Sheppard is an economist, business owner and contributing writer for the Free Market Project. He is also member of the Media Research Center’s NewsBusters squad. Noel welcomes your feedback at [email protected].