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The budget made news for both its spending proposals and its taxation plans. Taxes would be cut for working families and the middle class; they would be raised for the wealthy and for corporations. CBS' Chip Reid went overboard in characterizing this as "a major redistribution of wealth" as did ABC's Tapper who saw an attempt "to redirect vast sums of wealth from wealthy individuals and businesses to people from lower incomes."
"Major" and "vast" are relative terms. In the context of $3.55tr in annual spending, the proposal is to raise $0.99tr from the wealthy over the course of a decade and to relieve the middle class of $0.77tr in taxes over the same ten year period. Given those numbers, marginal or incremental are the accurate terms. CBS' Reid pointed out that $0.64tr of the increased payments by rich people were accounted for by the temporary tax cut that is scheduled to expire in 2011 anyway. The remainder of the hikes, his colleague Ben Tracy explained in a profile of Mike O'Toole, the wealthy gondalier of Venice Cal, will consist of limits on deductions by the rich for their charitable contributions and their mortgage interest payments.
Hype was also bestowed on Barack Obama's spending proposals. NBC's Savannah Guthrie said the budget "signals major policy shifts in healthcare, education and energy" while CBS' Reid saw it "take America in a fundamentally new direction" and ABC's Tapper saw "a break from the past in a dramatic, if not radical, fashion." NBC's Guthrie highlighted the proposal for a "huge increase in the Pell Grant program for college tuition and more government lending to students." ABC's David Muir pointed to the plan for an increase in the tuition tax credit, from two years at $1,800 per student to the full four years at $2,500 per.
On ABC, George Stephanopoulos called the proposals to fund universal healthcare and to limit greenhouse gas emissions of carbon "two scorpions in a bottle because they call for so many new revenues." Specifically, the budget sets aside $0.63tr over the next decade to fund a transition to universal healthcare, even though no such plan is yet in place. ABC's in-house physician Timothy Johnson (at the tail of the Stephanopoulos videostream) found healthcare experts "thrilled" at that proposal. "They see it as a very strong signal from the President that he is indeed very serious about healthcare reform."
As for the Republicans, CBS' Reid characterized their response as "a typical Democratic budget, all tax and spend." With $1.75tr to be borrowed in a single year, that is clearly inaccurate, even though Reid did not point out the GOP error explicitly. That was left to CNBC economist Steve Liesman on NBC. Anchor Brian Williams asked him: "How are we paying for it? Are we literally printing money to pay for it?" "Not yet," was Liesman's reply. "That is not, as I understand it at the moment, the intention of the Treasury. They are going to issue a whole lot of debt."
"I missed the point," economist Liesman added, "when we got from counting deficits in billions to trillions."
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