CNN scared viewers July 13 by suggesting Republican presidential candidate John McCain’s support for extending the Bush tax cuts would threaten their Social Security and Medicare.
“Your $$$$$” host Ali Velshi and CNN correspondent Allan Chernoff addressed McCain’s claim that he would balance the budget. Chernoff said McCain could do it if he let the Bush tax cuts expire – which they are scheduled to do in just two years. At the same time, the Alternative Minimum Tax will catch up with more middle-income taxpayers.
“But that is not what John McCain has in mind,” Chernoff said, showing the candidate pledging “tax relief” for families.
The price of that tax relief, Chernoff said, would be an increase in the deficit unless programs were cut. He said McCain couldn't balance the budget unless he started "chopping Social Security by 50 percent or slashing Medicare by 70 percent,” adding that “that is not going to happen.”
After bashing McCain’s ideas, Chernoff finally got around to Barack Obama, the Democratic presidential hopeful. “What’s Barack Obama got to oppose that?” Velshi asked of the Democrat’s budget plans. Chernoff started to mention Obama’s limited tax relief plan, and Velshi cut to the chase: “He’s just not making any promises about a balanced budget.”
“And on the spending side, he’s (Obama) got plenty of ideas to spend money,” Chernoff said, “lots of social programs, dealing with this housing crisis. So I don’t think any – any analyst outside of the campaigns is really saying either of these guys is going to be able to balance the budget during a first term.”
The lopsided segment criticized McCain’s plans but didn’t apply the same scrutiny to Obama’s.
On budget earmarks, Velshi said, "[McCain’s] saying, ‘I'm going to apply my discipline to our budgetary process.’" Chernoff countered, "And analysts are saying that won't even be enough. He's saying we'll get rid of all those earmarks. Well that would be about $17 billion and this is in a $3 trillion budget. So that won't be enough." They didn’t say what Obama planned to do about earmarks, also known as pork spending.
Interestingly, near the end of the segment, Chernoff admitted tax cuts could lead to growth – especially growth in tax revenue. However, he gave the opinion that tax cuts should wait until after the economy rebounded.
After the economy sees some rapid economic growth, Chernoff said, “then the tax-cutting can trickle down and trigger huge increases in revenue – we’ve seen it before.”
a November 2006 piece , BMI reported that “Democrats and the media insisted the tax cuts would only cause the federal deficit to get worse. Instead, deficit projections have dropped to the tune of more than $275 billion just in the last couple of years.”
When Chernoff wasn't busy with McCain they had more negative news about the economy. "One more note, John McCain says balancing the budget will also depend upon reasonable economic growth but given the lousy state of the economy right now it is reasonable to assume that growth is going to be sub par when the next president takes office and of course, Ali that means less tax revenue, not more," he said.
Of course, Chernoff may have more to do with the success of McCain's plan than he would like to admit. Earlier in the program Velshi stated that in a recent CNN and Opinion Research Corporation Poll "we've found that – our respondents, 75 percent of them thought that the United States is in a recession right now ... the U.S. economy is so dependent upon consumers and their sentiment." If consumers take their cues from "Your $$$$$" then we have a long way to go.
Even after he spent so much time questioning McCain, Chernoff finally admitted, "There's only so much control, so much power that the president has. He has to deal of course with Congress. Congress has to approve the spending and you really are a victim; you're subject to the economy."
BMI has previously reported that the media has taken an unbalanced approach to reporting on the candidate's economic plans. Most recently, McCain was attacked for comments   made by one of his top economic advisors, former Sen. Phil Gramm.