CyberAlert -- 02/05/2002 -- CBS Illustrated Liberal Point

CBS Illustrated Liberal Point; CBS Didn't Correct Enron Tax Story; Van Susteren's Liberal Debut on FNC; Novak's Quiz for Donaldson

1) CBS provided a misleading graphic to illustrate a liberal budget point. A Monday CBS Evening News story featured a gold kettle, labeled "Social Security & Medicare Surpluses," with stacks of dollar bills flowing out of a hole, as John Roberts explained how Bush had proposed "the first deficit budget in five years, one that drains the entire Social Security and Medicare surpluses and still ends up $80 billion in the red."

2) Using a term usually reserved by the networks just for conservatives, ABC's Terry Moran tagged Democrats as "nasty." Ending a Monday night story Moran noted how Democrats are "saying the administration is doing to the federal budget what Enron did to its books." Moran suggested that "shows just how nasty this election year budget battle is going to get."

3) Two weeks ago, picking up the claim of a left-wing group about how Enron had not paid any corporate taxes, CBS used the news as an excuse for a story on how corporations use "legal loopholes," which "critics call outrageous," to avoid taxes. But, as FNC's Brit Hume noted Monday night, the Washington Post determined Enron did pay taxes. Still awaiting a correction from CBS.

4) Greta Van Susteren isn't restraining her liberalness for FNC. On the O'Reilly Factor she defended Bill Clinton, vociferously maintaining he had never committed perjury. Earlier, she relayed her reaction to Enron: "Hopefully one of the things they'll talk about is campaign finance reform because, you know, there is such a problem."

5) U.S. News & World Report owner Mort Zuckerman, joined by Senator Hillary Clinton and NBC Chairman Bob Wright, "hosted a hush-hush, $1,000-a-ticket fundraiser" for Democratic Senator Max Baucus of Montana, New York magazine disclosed.

6) At CPAC, ABC's Sam Donaldson weaved and dodged to avoid giving no answers to Bob Novak's questions designed to prove Donaldson's liberal beliefs. "Should taxes be cut across the board for the rich as well as the not-so-rich?"; "Do you favor prohibiting partial birth abortion?"; "Do you favor the nomination of Antonin Scalia as Chief Justice of the United States?"

1

CBS News assigned its graphics department on Monday to assist in illustrating a liberal budget point. A CBS Evening News story featured a cartoon-like graphic of a gold kettle, labeled "Social Security & Medicare Surpluses," with a hole in the side from which stacks of dollar bills rapidly flowed out, as John Roberts helpfully explained that President Bush had proposed "the first deficit budget in five years, one that drains the entire Social Security and Medicare surpluses and still ends up $80 billion in the red."

Of course, that happened nearly every year for at least 30 years. And if the government were to spend $80 billion less and have a balanced budget, not one dollar of the Social Security and Medicare "surpluses" would be spent on anything other than current programs, so what's the point? Not one penny of those surpluses in recent overall budget surplus years went toward future Social Security or Medicare needs, so highlighting the liberal polemical case only serves to scare the uninformed, which may have been the very purpose.

Roberts added: "Democrats couldn't resist an attack today proclaiming the President would have stayed in the black if not for the cost of his tax cut next year."

On Sunday night, David Gregory targeted the tax cut in his NBC Nightly News story on the proposed budget as he stressed its "cost." MRC analyst Ken Shepherd noticed that Gregory asserted: "Democrats blame the Bush tax cut for the disappearing surplus, which the administration wants to now make permanent at the cost of hundreds of billions of dollars." Gregory portrayed the tax cut as the enemy of fiscal responsibility: "Amid signs of economic recovery, the biggest debate may be over the President's economic stimulus plan which calls for new tax cuts at a time when the government's finances are in the red."

Back to the February 4 CBS Evening News, Dan Rather introduced the Roberts story: "President Bush today sent Congress his new budget proposal with big increases for the war plus tax cuts he says will grow the economy. Democrats say other priorities are being hurt, including Medicare and Social Security. CBS's John Roberts reports on the budget and blueprint for an election year battle."

Roberts began, as taken down by MRC analyst Brad Wilmouth: "From the red, white, and blue cover of his $2.1 trillion budget proposal to his patriotic appeal at Eglin Air Force Base in Florida today, President Bush cast his request for record spending in the urgent terms of national security."
George W. Bush at Eglin Air Force Base: "The budget I submit recognizes the vital role the military will play and recognizes we have only one alternative. And that is victory."
Roberts: "The President is proposing the biggest hike in Pentagon spending since the Reagan era military buildup, $48 billion, and he would double funding for homeland security to $38 billion. Taking the hit this year, domestic spending such as highway projects, job training programs, and some environmental enforcement."
Mitchell Daniels, White House Budget Director: "War time is different. No two ways about it. And the President is asking Congress for the money it takes to win the war abroad and defend Americans at home. It won't be cheap."

"The President hopes the campaign to finance the war will give him political cover against the first deficit budget in five years," Roberts explained just before CBS put up its graphic of the gold kettle, labeled "Social Security & Medicare Surpluses," with a hole in the side from which stacks of dollar bills rapidly flowed out, "one that drains the entire Social Security and Medicare surpluses and still ends up $80 billion in the red." When the graphic faded, Roberts continued: "But Democrats couldn't resist an attack today, proclaiming the President would have stayed in the black if not for the cost of his tax cut next year."
Senator Kent Conrad (D-ND): "This is not a matter of a one or two year deficit. This is a matter of taking trillions of dollars out of the trust funds of Social Security and Medicare."
Roberts concluded: "President Bush insists that everything will turn out just fine if Congress can resist the urge to spend, but as the President proposes to cut dozens of politically important home district projects, by the time Congress gets through rewriting this election year budget, those $80 billion deficit projections could look stunningly optimistic."

Which means Congress will be just as guilty of draining the Social Security and Medicare surpluses.

2

Democrats actually tagged as "nasty" by ABC's Terry Moran. Usually network reporters reserve that term just for conservatives, but concluding a Monday night story Moran noted how Democrats are "saying the administration is doing to the federal budget what Enron did to its books." Moran suggested that spin "shows just how nasty this election year budget battle is going to get."

After outlining the basics of Bush's proposed budget and running a soundbite from Bush defending it, Moran observed on the February 4 World News Tonight: "The most important choice in the Bush budget is a long-term one. The President has permanently abandoned the lock box idea, which set aside $1.5 trillion in Social Security and Medicare surpluses over the next decade. The money will now be spent on other programs."
Robert Reischauer, former CBO Director, now with the Urban Institute: "What this means is, is that the nation won't be saving as much, won't be paying down, won't be preparing for the retirement of the baby boom generation as it should be in the next decade."
Moran concluded: "To pay for all the new spending on the war and homeland security and other priorities there once again will be a deficit. The President's budget predicts it will be $80 billion. Democrats pounced on that number, saying the administration is doing to the federal budget what Enron did to its books and that, Peter, shows just how nasty this election year budget battle is going to get."

3

Two weeks ago, picking up on a New York Times story, the CBS Evening News gave publicity to the claim of a left-wing group, naturally unlabeled, that Enron had not paid any corporate taxes in recent years. CBS used the claim as an excuse to air a story on how corporations use "legal loopholes," which "critics call outrageous," to avoid taxes.

The Washington Post on Sunday, however, undermined the underlying story as it discovered that Enron really had paid corporate income taxes. Not surprisingly, the CBS Evening News on Monday night didn't bother run any kind of a correction. (There was no CBS Evening News on Sunday night for most of the country and the original story aired on a weekday.)

FNC's Brit Hume did pick up on the development, reporting Monday night on his Special Report with Brit Hume: "Remember all those reports that Enron paid no federal income taxes? They all started with Citizens for Tax Justice, a left-leaning research group which reported that Enron had paid no taxes in the year 2000 and actually got a $278 million tax rebate. Now though the Washington Post reports that what the paper is calling 'a close review of Enron's statements combined with interviews with tax specialists indicates' that Enron did indeed pay income taxes and the story quotes an Enron spokeswoman as saying the company paid $112 million in federal taxes in the year 2000."

Rather had intoned on the January 18 CBS Evening News: "The Enron scandal is encouraging new looks at a growing trend in corporate America: Using legal loopholes, including offshore hideouts, to avoid federal income taxes altogether. But legal or not, critics say it is outrageous, as CBS's Mark Strassmann reports for tonight's Eye on America."

Strassmann had begun: "Enron was America's seventh-largest corporation, but four of the last five years the company paid not one dime in federal income taxes. To many Americans, that in itself is a scandal."
Bob McIntyre, Director, Citizens for Tax Justice: "Whether it's a big corporation or a rich person, if they avoid paying their fair share of taxes, the rest of us get stuck with the bill."
Strassmann: "Yet many of America's marquis corporate names pay no federal taxes. Some even get millions in tax rebates. According to a study by the Citizens for Tax Justice, in 1998 from the Fortune 500, 24 corporations reported a total of $12 billion in pre-tax profits. With tax breaks, not only did they avoid the usual 35 percent tax rate and paid nothing, together they earned another $1.2 billion in tax rebates...."

For more: http://www.mrc.org/cyberalerts/2002/cyb20020121.asp#2

"Enron Appears to Have Paid Taxes" read the headline over the February 3 Washington Post story by Glenn Kessler, who did not call CTJ liberal, preferring to describe it as "a research group that advocates a more progressive tax system." An excerpt:

One of the big unanswered questions about Enron Corp., the energy company that collapsed into financial scandal, is whether it paid federal income taxes in recent years, when it was reporting growing revenue and profits.

Citizens for Tax Justice, a research group that advocates a more progressive tax system, said in a report last month that Enron paid no taxes in 2000 and received a $278 million rebate because of a big tax break for stock options cashed in by employees. But several accounting experts questioned the methodology used in the report, as did Enron officials.

Karen Denne, an Enron spokeswoman, said Enron paid $112 million in federal income taxes in 2000, even after factoring in the tax break for the stock options.

A close review of Enron's financial statements and interviews with tax specialists and accountants indicate that Enron also paid federal taxes because of what is called the alternative minimum tax. That is a separate tax system designed to ensure that most companies pay some tax when they earn a profit, no matter how many tax reduction techniques they use....

Part of the problem in interpreting Enron's tax payments is that a crucial detail appears only in a footnote to a footnote in the company's annual report -- and the language is vague. The footnoted item deals with the impact of the tax break for stock options. Accounting experts who examined the footnote disagreed on whether Enron's reported figure of $112 million in 2000 taxes paid included the huge tax break for stock options exercised by employees. Citizens for Tax Justice believes it does not, which is why it calculates that Enron paid no taxes, an estimate that was first reported by the New York Times and widely publicized across the country.

But Denne, after examining the issue at The Washington Post's request, said the $112 million reported figure of federal taxes paid, on U.S. profits of $640 million, includes the deduction taken for stock options. The annual report says the company paid $29 million in federal taxes in 1999 after earning $357 million, and $30 million in 1998 on $197 million profit.

Several experts said the dispute may be moot because it appears clear that, no matter how much Enron reduced its regular tax liability through stock options or other techniques, the company still paid taxes under the alternative minimum tax, according to Enron financial data filed with the Securities and Exchange Commission.

In 2000, the data show, Enron's credits from paying the minimum tax rose by $34 million, to $254 million. Accounting experts said that is a sign the company made minimum tax payments in that year, since companies earn credits when they pay the minimum tax. The credits are carried on the books as an asset that can be used in future years to offset taxes owed.

"You only get an AMT credit when you pay the alternative minimum tax," said Robert Willens, a tax analyst at Lehman Brothers. "It seems like they paid taxes."...

END of Excerpt

For the entire story, go to: http://www.washingtonpost.com/wp-dyn/articles/A14983-2002Feb2.html

4

The new face of the Fox News Channel: The team of Greta Van Susteren and Geraldo Rivera? Barely ten minutes into the debut of her new FNC show Monday night at 10pm EST, On the Record with Greta Van Susteren, Geraldo was on the air with her, talking with her from Africa.

A couple of hours earlier, appearing on the O'Reilly Factor, she defended her defense of Bill Clinton, vociferously maintaining to O'Reilly that Bill Clinton had never committed perjury.

Van Susteren hadn't been on FNC's air for more than two minutes during a 1pm half hour appearance before she proclaimed her liberal political views. "A lot of money pours into" Washington, DC, she asserted in advocating campaign finance reform, "Senator McCain has been screaming about this for years." She wished: "Hopefully one of the things they'll talk about is campaign finance reform because, you know, there is such a problem."

During the 1:25pm EST appearance with FNC's David Asman, Van Susteren asserted: "Fritz Hollings may be one of the few Democrats who didn't get any money from Enron. You know Enron was equal opportunity. You know there's a big problem in Washington with everyone being, you know, a lot of money pours into that city. Senator McCain has been screaming about this for years, you know there's a lot of money pouring in. It's not just the Republicans, it's also the Democrats."

Actually, Hollings received $3,500 from Enron.

Van Susteren elaborated on her liberal hope for more regulation as a result of the Enron situation: "Hopefully one of the other issues they'll raise, and this is my opinion, is hopefully one of the things they'll talk about is campaign finance reform because, you know, there is such a problem. You have soft money and hard money. Hard money is not such a problem because people say I'm giving, this is how much I'm giving, this is who got it. It's that soft money, when we don't know who got it and how much and that's what sort of engenders a sense of like 'what's going on in Washington?' You know, Washington is much better if it gets out on the table this is how much money we got and this is who we got it from. And I think that's where you may see finally some people getting off the dime and talking more about campaign finance reform."

If hard money is okay because it's identified, why not just eliminate the hard money contribution limits? To whatever extent campaign financing is troublesome it's because of all the complicated regulations enacted after the Watergate political scandal. The lesson should be that more regulation will only create more loopholes.

On Tuesday morning, ABC and NBC gave FNC some free publicity with both Good Morning America and Today running segments on Van Susteren's refurbished face.

5

Mort Zuckerman, owner of U.S. News & World Report and the New York Daily News, "hosted a hush-hush, $1,000-a-ticket fundraiser" for Democratic Senator Max Baucus of Montana, New York magazine reported in this week's issue. Also at the cocktail party attended by both of New York's liberal Senators: NBC Chairman Bob Wright.

Jim Romenesko's MediaNews (http://www.poynter.org/medianews/) highlighted the item by Marc Malkin on the "Intelligencer" page of the February 11 New York magazine:
"Zuckerman hosted a hush-hush, $1,000-a-ticket fundraiser for Montana senator Max Baucus, head of the Senate Finance Committee, last week at his Fifth Avenue apartment. Over $200,000 was raised at the cocktail party, where politicos Charles Schumer, Hillary Clinton, Charles Rangel, and Jon Corzine joined NBC chairman Bob Wright, Loral chief executive Bernard Schwartz, Liz Claiborne ceo Paul Charron, Goldman Sachs vice-chairman Bob Hormatz, Quadrangle Group partners Steven Rattner and Joshua Steiner, and real-estate mogul Bill Rudin."

For the entire item, scroll down to the third entry at: http://www.nymag.com/page.cfm?page_id=5664

6

At the Conservative Political Action Conference's annual Bob Novak-Sam Donaldson debate about media bias on Saturday morning, Novak proposed that many in the media try to pretend they really aren't liberal. To unmask Donaldson's true views, Novak posed a set of five policy questions. While Donaldson tried to evade each, his answers and non-answers showed his beliefs match a liberal "no" reply to all of these questions formulated by Novak:

-- "Should taxes be cut across the board for the rich as well as the not-so-rich?"
-- "Do you favor prohibiting partial birth abortion?"
-- "Do you want to privatize Social Security?"
-- "Do you favor the nomination of Antonin Scalia as Chief Justice of the United States?"
-- "Do you oppose embryonic cell research?"

The February 2 morning debate at one of the Marriott hotels in Crystal City, Virginia, was hosted by MRC President L. Brent Bozell. I would have plugged its two airings on C-SPAN on Saturday night, but they did not schedule it until the last-minute, though it also ran Monday morning on C-SPAN2.

MRC analyst Brad Wilmouh took down Donaldson's meanderings as he tried to re-write each question, often to groans from the audience, in order to avoid a "no" answer:
"Now to your questions, because I think it is proper that I should answers these questions, but not precisely the way they're written because if I do, if I do, I fall into the trap of a question which is framed in a way that does not embrace the whole argument. And you of all people, you of all people, you know, he would have a couple and a quarter centuries ago or more have proffered the question: 'Is it proper to dump tea in the harbor or not? Answer the question yes or no!' Yes, given the framework of the times we were in and the battle we thought we needed to fight. But, as written, if I were to say to you today, go down to the grocery store, buy some tea, is it proper to drop it? It's a silly question.
"So I'll answer the question that I think you should have asked. 'Should taxes be cut across the board for the rich as well as the not-so-rich?' Again, since we have to pay for what we spend and yet, at the same time, we have to somehow make our progressive tax system equitable, I think taxes should be cut when we can afford them, but when we need to give stimulus to the economy, it's best as we did last year, as the President did in cooperation with the Democrats, mainly to people who need it, like you.
"All right, second question: 'Do you favor prohibiting partial birth abortion?' Well, using what devices, and in what sense? I know this has become a catch phrase on the right, but I think in some instances I would answer yes. In some instances, I would answer no. And I stand on my answer.
"Let's go on to the third one. 'Do you want to privatize Social Security?' I can answer that as written. No. No, I mean, the poor fellow that might have to retire at the moment would have taken it in the neck since the President rightfully says we should not guarantee these accounts, the general public should not guarantee us against loss in the stock market just as we should not remunerate the poor people who lost all of their life savings in the Enron 401(k) accounts. And therefore, at certain points in our history, oh, I love it. Two years ago, Bob, if I'd had the good sense to retire -- many people might have wished it -- my 401K plan would have helped me out quite a bit. Today it's about half its value, so I can't retire. That's the bad news, ladies and gentlemen, I must go on.
"Number four: 'Do you favor the nomination of Antonin Scalia as Chief Justice of the United States?' Against who? Against the field? Against distinguished people in this audience? Or perhaps against Mr. Bernard Goldberg? Well, everybody. Then, no, I favor the nomination of Sandra Day O'Connor, my schoolmate once at a school in El Paso named then 'Radford School for Girls,' which I attended and developed a lifelong affinity for you ladies. I favor her nomination. But, you see, that does not say that against Mr. Goldberg I would not favor Antonin Scalia's nomination. So, as written, the question is not answerable."

Donaldson attended the "Radford School for Girls?"

Back to Donaldson on Saturday: "Fifth question: 'Do you oppose embryonic cell research?' I do not oppose it. I believe it's important. I believe that scientists have conclusively demonstrated that a path to being able to cure dreaded diseases such as Parkinson's, muscular dystrophy, cancer, and many more, lies in this area. And I believe that those of us, and we conservatives are very, very dedicated to human life, we wish to save it in that way. Now, the conjuring up of the images of embryonic cell research of fetuses, we're not talking about that. We're talking about something far, far different. And you understand that. There are misguided people who don't.
"So I've answered some of you questions, I haven't answered some others of your questions, but in the fine time-honored tradition of conservatives as well as liberals, dodging is something we do in Washington all the time. Thank you."

At least he admitted he was "dodging."

I'd put him down as 5 for 5 in the liberal column.

Showing up each year in front of a hostile crowd, and jocularly bantering with Novak and audience questions, illustrates that no matter how much conservatives grew to despise him during the Reagan years, Donaldson has a lot more respect for conservatives than do most of his network colleagues. -- Brent Baker

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