There’s an old saying – “Congress never touches anything they don’t hurt,” but you would never know that might be the case by the glowing reception the $150-billion taxpayer-funded stimulus plan got from each of the network newscasts last night.
“Cash is on the way,” ABC’s “World News” anchor Charles Gibson said. “The check is in the mail, or it will be to 117 million Americans. The president and congressional leaders reached agreement on a $150 billion economic stimulus package today. When passed by Congress, the package will result in the distribution of $100 billion to individuals and families. And it will mean businesses will get $50 billion in tax breaks.”
All that sounds great, except that some people who pay taxes won’t get a rebate and many of those who don’t pay taxes at all will get a rebate.
“Those checks are the centerpiece of the $150-billion package, $600 for individuals, $1,200 for working couples plus $300 for each child,” NBC correspondent John Yang on the January 24 “Nightly News.” “The rebates would phase out for individuals making more than $75,000 a year and couples earning more than $150,000. And workers who earn so little they don't pay any income taxes would still get cash, $300, as long as they earned at least $3,000 last year.”
But money given to non-taxpayers has to come from somewhere – and as many economists have pointed out, that wealth-redistribution characteristic is a reason why this package isn’t a good “stimulus.”
“A stimulus bill is not the place to expand government interference in the economy, bail out banks that make bad loans, or pile on unrelated new spending,” wrote Rea S. Hederman, Jr., assistant director and senior policy analyst in the Center for Data Analysis at The Heritage Foundation. [1]“While a tax rebate may be inevitable at this point, the public should recognize that this rebate is poorly targeted and would not have a significant effect on the economy.”
CBS’s Katie Couric and NBC’s Brian Williams also welcomed the news, touting it as a “bipartisan” effort and treating that as a net positive.
“Well, it’s not quite a done deal yet, but it looks like many of you will be getting a rebate check from Uncle Sam,” Couric said on the January 24 “Evening News.” “In the biggest show of bipartisanship since 9/11, President Bush and the House leadership reached agreement today on an economic stimulus package.”
“[T]he threat of a recession in this country is just dire enough to have brought both parties together in Washington,” Williams said on the January 24 “Nightly News.” “They’ve put together what is called a stimulus package and that means over the next few months most of the people watching this broadcast tonight will get a check in the mail. Now, it’s what Americans choose to do with that money that will then affect the U.S. economy or not.”
None of the networks attempted to explain where this $100 billion in checks will come from. Instead, they chose to focus on other areas of concern. One concern was how Americans would spend their rebates: whether people might do something responsible – save the money or pay down debt – or if they will just spend it, which is what is reported to be the best way to “stimulate” the economy.
“Economists we spoke to today said this isn't a perfect plan, but it’s a good enough plan. And if it can be enacted as quickly as it was negotiated, it could make the difference between a slowdown and a recession, or a short recession and a long one,” ABC correspondent Betsy Stark said on the January 24 “World News.” “Economists say Americans who use their rebate checks to pay bills or to save or invest may help themselves, but they won't be helping the economy.”
Whether recipients spend or save their checks, however, economists like Dr. Don Boudreaux have explained that “government cannot create genuine spending power; the most it can do is to transfer it from Smith to Jones.”
[2]“Spending power is not so much the fuel for economic growth as it is the reward,” wrote Boudreaux, chairman of the George Mason University economics department and a BMI adviser. “And the key to economic growth is investment that raises worker productivity.”
The other media concern was how soon the government would act so that the checks could be cut.
“The Treasury secretary said that if Congress acts quickly and if all goes well, the checks could be in the mail by May,” Yang said on “Nightly News.” “Some economists say that could be too late for aid that could be too little.”
Prior to the unveiling of this stimulus proposal, critics in the media were worried about who these rebates would go to. Matt Lauer, co-host of NBC’s “Today” was worried the “rich” would get a cut.
“All right, but you’re not going to give rebates to the rich here, correct?” [3]Lauer asked Treasury Secretary Henry Paulson on the January 18 “Today.”