MediaWatch: March 1989
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"Many in Congress and elsewhere doubt that President Bush can deliver on his campaign promises for vastly improved quality of life programs, at the same time reducing the huge federal deficit and stick to his no new taxes pledge," Dan Rather told viewers on February 9, just hours before Bush delivered his budget address to Congress. Sure enough, over the next week the media did its best to make Rather's case.
The morning after Bush's speech, the figure for inflation at the wholesale level increased, leading a couple of large banks to raise their prime interest rate. "All this undermines the rosy economic scenario that President Bush presented last night, a scenario based on low inflation and declining interest rates," NBC's Mike Jensen warned on Nightly News. "President Bush sees more people and companies earning more money and paying more taxes without an increase in the tax rate," Jensen continued. "But," NBC's business correspondent countered, "most experts say that's not likely to happen."
Jensen laid out a scenario that ended in a tax hike: "Inflation will force Alan Greenspan of the Federal Reserve to push interest rates higher. Loan rates would go up. That would slow down housing...and then the economy as a whole. And with that, the government would collect less money in taxes and the budget deficit would grow. It would take new taxes to reduce it." CNN's Frank Sesno relayed the same figure that alarmed Jensen, but noted "some economists say it's a fluke and underlying inflationary pressure remains moderate."
Simultaneously, CBS started the drumbeat for more social spending. "Since 1981," Bob McNamara lamented, "budget cuts have taken school lunches away from two million children and nutrition experts today fear that if President Bush's budget doesn't add up, food assistance to children will be cut again." The next day CBS' Wyatt Andrews reported Bush proposed spending "a billion dollars, in total, for the homeless," but "the director of this home says that's nothing compared to the $30 billion the government used to spend on actual housing." Neither gave anyone from the administration a chance to respond.
What's the root cause of this supposed spending restraint problem? The February 20 Time magazine reiterated the position held by many reporters: "The Bush campaign strategists--with the candidate's active complicity--burdened the new President with an obdurate stance on taxes."