If you've been watching the news media react to the debt ceiling deal you might thing some drastic spending cuts were signed into law. After all, ABC made it sound like Congress took a "machete" to the budget and NBC's "Today" wondered if those spending cuts could harm the economy .
What has been completely missing from much of the network reporting was an admission that the deal "doesn't cut federal spending at all ," according to a Cato scholar. The national debt is still projected to go up $12 trillion in 10 years under the plan.
That's right. Not one bit of cuts. Chris Edwards, Cato Institute's director of tax policy studies, explained that despite some media outlets view that the cuts were "sharp" and "severe" (He cited The Washington Post), the cuts aren't what Washington politicians and media made it sound like. They are really cuts to projected growth of spending and debt, something Investor's Business Daily exposed on July 22 in a front-page article.
Business & Media Institute looked at transcripts for 43 stories, interviews and news briefs mentioning the debt ceiling deal on network morning and evening shows Aug. 1 and 2. Only 2 of them admitted the debt will rise anyway. On ABC's "World News," Diane Sawyer put the spending cuts in perspective by admitting that federal spending won't get any lower as a result of this deal - in fact it will grow.
That Aug. 2 "World News" report showed a chart onscreen that showed the projected national debt to double in 10 years - from 2011-2021 ($14.29 trillion to $28.8 trillion). The debt compromise signed into law by Obama would only lower the 2021 projection by $2.5 trillion over those 10 years to $26.3 trillion. That's still an 81 percent increase.
Liberal comedian and news critic Jon Stewart noticed that ABC graphic and after showing it to his audience put the debt ceiling deal in terms only he could on Aug. 3 shouting, 'That's what this whole thing was about? This whole brouhaha, according to Diane Sawyer's parallelogram of disappointment managed to remove one paper-thin chocolate shaving from our Dairy Queen gut-buster sundae of debt?'
But Edwards gave further explanation that was lacking from ABC's report. "House Speaker John Boehner's bullet points on the deal say that it cuts discretionary spending by $917 billion over 10 years, as 'certified by CBO.' These discretionary 'cuts' appear to be the same as those in Boehner's plan from last week. The chart shows CBO's scoring of spending cuts … Wait a minute, those bars are rising. Spending isn't being cut at all," Edwards wrote. (view chart here )
Edwards continued his explanation, "The 'cuts' in the deal are only cuts from the CBO 'baseline,' which is Washington construct of ever-rising spending. And even these 'cuts' from the baseline include $165 billion of interest savings, which are imaginary because the underlying cuts are imaginary."
But Cato Institute wasn't the only one to notice the "imaginary" spending cuts. Heartland Institute experts also criticized the use of "baseline budgeting, " and Gregg Easterbrook, a Reuters blogger and contributing editor to The Atlantic, called it "The phony-as-a-$3-bill debt deal." Easterbrook blasted the fact that the "huge surge in spending now is called a 'spending cut,' while actual cuts don't take effect for up to a decade." 
While they didn't call them imaginary or phony, The Los Angeles Times did a much better job than many news outlets by pointing out that they are "projected " cuts that don't begin until after the next election, and that only a tiny $21 billion of them are supposed to happen in 2012.
David Lauter of the Washington Bureau of The Los Angeles Times wrote a news analysis on Aug. 1 that noted "In the government's 2012 fiscal year, the cut would be $21 billion, or less than 1% of a nearly $3.7-trillion federal budget, according to the Congressional Budget Office."
CBSNews.com admitted that "Even with deal, federal debt to rise by trillions." But actual ABC, CBS and NBC broadcasts on Aug. 1 and 2 mostly ignored that fact.
Networks Claim Trillions Will Be 'Immediately' Cut
More than 95 percent (41 out of 43) of network stories, interviews and briefs failed to acknowledge that federal spending and the national debt will continue to climb even with this deal. Instead of telling viewers the cold hard truth reporters said things like "a trillion in cuts now," or complained they would take a "machete" to government programs.
Norah O'Donnell claimed, "The first phase of the bill includes almost $1 trillion in immediate spending cuts." (Emphasis added) on the Aug. 2 CBS "Evening News." That same night CBS anchor Scott Pelley whined that the deal had "only budget cuts and no relief for those suffering in this economy." 
Just one night earlier on "World News," Diane Sawyer claimed that the compromise bill was "expected to take a machete to programs ranging from students loans to the defense budget." Some of the network reports included liberals angered by the spending cuts, including the Aug. 1 "Evening News." They quoted Rep. Pete Defazio, D-Ore., who complained "It's all about cutting, cutting, cutting."
The networks also expressed concern that these drastic spending cuts would jeopardize the nation's economy as George Stephanopoulos did on "Good Morning America" Aug. 2. He asked Treasury Secretary Tim Geithner, "But you don't think that any deficit reduction now will hurt the attempts of the economy to recover?" Stephanopoulos also made sure to highlight "economists who say cuts like this will make our weak economy weaker and cost Americans jobs." 
CBS's Anthony Mason wondered where the "economic growth" and jobs would come after government spending was cut as a result of the debt deal.