CNN's Velshi Against Tax Cuts, Denies There's Been a 'Surge' in Spending

CNN's Ali Velshi leaned against extending the Bush tax cuts during a commentary on Tuesday's Newsroom, warning that it "may not be a brilliant idea," and spouted the liberal talking point that tax cuts are a costly matter. Velshi also misleadingly stated that "we have not seen a huge surge in spending."

The anchor devoted his regular "XYZ" segment at the end of the 2 pm Eastern hour to the tax issue. He began by outlining how "President Obama wants to extend the Bush-era tax cuts that apply to the middle class, or households earning less than $250,000 a year...and that sounds like a great thing." He then continued with his argument about the "cost" of cutting taxes: "But let me put this into perspective. First, it's not free. Extending the tax breaks to the top 3 percent of earners would cost between 650 and 700 billion dollars. Extending it for the rest of us is going to cost a lot more, possibly $3 trillion. Everyone wants to pay less in taxes, but in an economy with a debt like America's, that may not be a brilliant idea."

Velshi is making the common liberal assumption that the tax revenue belongs to the federal government, even before it is taken away from the employed. Despite this, he added that "arguments that it [tax cuts] will grind the economy to the halt may not hold much water either. Our tax rates are relatively low, and we have not seen a huge surge in spending."

There actually has been such a "huge surge" in spending. Brian Riedl of The Heritage Foundation noted in a June 1, 2010 report that "spending and deficits continuing to grow at a pace not seen since World War II. Washington will spend $30,543 per household in 2010-$5,000 per household more than just two years ago....Since 2000, spending has grown across the board. Entitlement spending has reached a record 14 percent of GDP. Discretionary spending has expanded 79 percent faster than inflation as a result of large defense and domestic spending hikes."

Velshi completely omitted the possible strategy of lowering spending during his commentary. In fact, he has endorsed raises in spending. On February 17, 2010, he commemorated the one-year anniversary of Obama's "stimulus" spending with a cake, and gushed over its focus on "green energy" during a August 24 segment.

Later in his commentary, Velshi seemed to endorse the concept of raising taxes:

VELSHI: It seems obvious that if you're concerned about the economy, you'll vote for someone who wants to cut taxes, the deficit, and the debt. But those things don't go hand in hand. Wanting to bring down the debt and deficit- well, higher taxes may be the most immediate way to do that because those dollars go directly into government coffers. Cutting taxes is a roundabout way of doing it. You cut taxes, people and businesses have more money to spend, and theoretically, they spend that money in ways that either create jobs or increase domestic demand, which creates jobs. But that assumes that those people have enough faith in the economy that they won't just pocket their tax savings.


The anchor closed the segment by repeating his opposition to tax cuts: "Who can you fault for wanting to pay lower taxes? But just don't be fooled into thinking that you- if you are the average American- are going to be paying less of anything." Actually, if the Congress and President Obama somehow let the Bush tax cuts expire, it means that everyone, including the middle and lower classes, will experience higher income taxes. Even after making this statement, Velshi hinted that this was the case: "The victory for you might be the existing Bush tax cuts being extended."

The full transcript of Ali Velshi's commentary from Tuesday's Newsroom:

VELSHI: Time now for the 'XYZ' of it. As things stand, President Obama wants to extend the Bush-era tax cuts that apply to the middle class, or households earning less than $250,000 a year. That means about 97 percent of Americans would continue to get the breaks, and that sounds like a great thing.

But let me put this into perspective. First, it's not free. Extending the tax breaks to the top 3 percent of earners would cost between 650 and 700 billion dollars. Extending it for the rest of us is going to cost a lot more, possibly $3 trillion. Everyone wants to pay less in taxes, but in an economy with a debt like America's, that may not be a brilliant idea. Arguments that it will grind the economy to the halt may not hold much water either. Our tax rates are relatively low, and we have not seen a huge surge in spending.

I say this because American voters need to come to terms with this issue. It seems obvious that if you're concerned about the economy, you'll vote for someone who wants to cut taxes, the deficit, and the debt. But those things don't go hand in hand. Wanting to bring down the debt and deficit- well, higher taxes may be the most immediate way to do that because those dollars go directly into government coffers. Cutting taxes is a roundabout way of doing it. You cut taxes, people and businesses have more money to spend, and theoretically, they spend that money in ways that either create jobs or increase domestic demand, which creates jobs. But that assumes that those people have enough faith in the economy that they won't just pocket their tax savings.

I say this so you can make an informed decision at the voting booth. Who can you fault for wanting to pay lower taxes? But just don't be fooled into thinking that you- if you are the average American- are going to be paying less of anything. The victory for you might be the existing Bush tax cuts being extended. Lower taxes are not feasibly in our future- at least, not until this economy really picks up.

-Matthew Balan is a news analyst at the Media Research Center. You can follow him on Twitter here.