All About Perspective: Analysis Shows Changes in Media Coverage of Deficit, Unemployment

Make of this what you will, but a recent analysis from National Journal conveys coverage of the nation’s unemployment crisis has waned, while a focus on the deficit has increased. The author of this article concludes it means conservatives are winning the message war, but perhaps other factors are at play. What do you think?

Major U.S. newspapers have increasingly shifted their attention away from coverage of unemployment in recent months while greatly intensifying their focus on the deficit, a National Journal analysis shows.

The analysis — based on a measure of how often the words "unemployment" and "deficit" appear in major publications — portrays a dramatically shifting landscape of coverage over the past two years, as the debate over how to fix the federal deficit has risen to prominence and the question of how to handle still-high unemployment has faded from the media’s consciousness.

National Journal compiled counts of articles that mention one of the words in their headline or first sentences in the five largest newspapers in the country by print circulation — a group that consists of The New York Times, The Wall Street Journal, the Los Angeles Times, USA Today, and The Washington Post. The data was taken over a period of roughly two years from April 15, 2009, to May 15, 2011, using LexisNexis, a news information service. The numbers exclude mentions that also used the words Europe(an) and Greece or Greek in an effort to focus solely on the domestic debate, though even with those included, the trend was not materially different.

Mentions of unemployment have been dwindling since they spiked to 154 in the month ending August 15, 2010; over the month ending Sunday, there were 63. Deficit mentions, meanwhile, surged up to 261 in the month ending December 15, 2010, when the leaders of President Obama’s deficit commission released their final report. Mentions of the deficit remained higher after the commission’s work wrapped up and as House Republicans and then the White House unveiled dueling proposals. In the month ending Sunday, there were 201 mentions.

To be sure, the decline in unemployment articles coincided with a one-half-percentage-point decrease in the headline unemployment rate as well as materially better payroll job growth, but the labor market remains fragile and the pace of its recovery far from sufficient.

More likely, the broadening gap demonstrates just how effective conservatives have been at changing the narrative of economic policy from one dominated by talk of fiscal stimulus to one now in lockstep with notions of fiscal austerity.

That major newspapers and other media outlets have covered the deficit with greater intensity in recent months should come as no surprise given the focus of the politicians and policymakers they cover. The declining mentions of unemployment are perhaps more surprising, as the issue remains salient for millions of Americans.

Federal Regs Got You Down? Let Us Know

The Competitive Enterprise Institute is a Washington, D.C.-based think tank that publishes an informative update titled Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State. While much attention has been paid to the rising deficit, yearly regulatory compliance costs are estimated to be AT LEAST $1.7 TRILLION.

Freshman congressman Todd Rokita (R-4th District) and the Indiana Chamber want to do something about that. In an effort to bring to light the harm that many federal regulations do to Hoosier businesses, a new initiaitive has been launched. "Cutting Red Tape, Creating Hoosier Jobs" is a way for business owners and managers to communicate directly to Rokita on issues critical to their business success.

The congressman offers more details in this letter. The Chamber has established a dedicated web site where you can provide feedback on proposed, pending or existing federal regulations. You can also submit through mail to Cam Carter at the Indiana Chamber or via email to [email protected].  

What kind of regulations are we talking about? The EPA trying to regulate carbon dioxide emissions through the Clean Air Act is a prominent one. But there are thousands of other "red tape" examples, rules that simply provide additional compliance headaches with little or no benefits.

Rokita needs specific cases (with impacts on business operations or new job creation) in his effort to see a return to limited, common sense government.

For those especially interested in regulatory issues, you may wish to join our D.C. Fly-in in September.

Coats, Chamber Members Share Tax Reform Ideas

Combine a U.S. senator working to thoughtfully make a difference on a major issue impacting our future with an audience of knowledgable business leaders and there’s no doubt that you have a winning combination. That point was proven earlier today.

The event at the Indiana Chamber featured Sen. Dan Coats (R-Indiana) discussing The Bipartisan Tax Fairness and Simplification Act of 2011. This year’s version was introduced last week with Sen. Ron Wyden (D-Oregon). Coats came to Indianapolis to outline the topic and gain feedback; he and his staff were not disappointed as they left with ideas and initiatives to further explore.

How does the following sound as part of the introduced bill?

  • Having 90% of taxpayers able to file with a one-page form
  • Reducing the corporate income tax rate to a flat 24% (or possibly even lower) to encourage economic growth
  • Moving the U.S. away from having the second highest combined corporate tax rates among 36 developed countries

It’s all done on a revenue neutral basis. Many current exclusions in the tax code would be eliminated in exchange for the lower overall rate. But Coats notes that this is a work in progress — and that’s why he’s collecting reactions and suggestions as he did today.

"There will be several other iterations (tax reform proposals), but we’re the first one out of the gate," he said, outlining his principles in agreeing to sign on to the legislation. The final caveat was that this be an open book — "so we can modify and adjust as needed."

In a letter sent to President Obama, 64 senators wrote, as Coats outlined today, that "this is more serious than who wins the election in 2012. It’s about which path we want to take for the future of our country." Currently, he adds, the federal government is spending $4 billion a day more than it takes in.

Returning to the Senate position he once held, Coats does cite a positive in the first few months of 2011. "We’ve elevated the debate to where it needs to be. The debate is not about how much more to add (budget spending), but how much to cut."

With a debt that he explains has gone from $1 trillion in 1981 to $14.3 trillion 30 years later, how can anyone argue with that?

Freedom Comes With a Big (Tax) Price

Freedom is a good thing. But I’m not sure you, I or others necessarily feel better this week at the opportunity to enjoy Tax Freedom Day for 2010.

According to the Tax Foundation, national Tax Freedom Day is tomorrow — April 9. That means Americans will have worked well over three months of the year  before they have earned enough money to pay this year’s tax obligations at the federal, state and local levels. (Due to different income levels and tax burdens, the Tax Freedom Day for Hoosiers was actually Tuesday).

Tax Freedom Day is one day later than in 2009, but more than two weeks earlier than in 2007. The reasons for the three-year change: recession, temporary tax cuts and several tax repeals. Nevertheless, we will pay more taxes in 2010 than we will spend on food, clothing and shelter combined.
 
See what I mean; not exactly cause for celebration. The Tax Foundation offer the following facts and figures:

  • Tax Freedom Day does not count the deficit even though deficits must eventually be financed. If Americans were required to pay for all government spending this year, including the $1.3 trillion federal budget deficit, they would be working until May 17 before they had earned enough to pay their taxes – an additional 38 days of work.
  • In 2000, Tax Freedom Day was celebrated May 1, the latest date ever. A string of tax cuts between 2001 and 2003 pushed Tax Freedom Day up by two weeks, so that it fell on April 16 in 2003 – at the time the second earliest Tax Freedom Day since the Johnson administration.
  •  Five major categories of taxes dominate the tax burden. Individual income taxes – including federal, state and local – require 32 days’ work. Payroll taxes take another 25 days’ work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Corporate income taxes take eight days, and property taxes take 12. Americans will log six more days to pay other miscellaneous taxes, most notably including motor vehicle license taxes and severance taxes, and about half a day for estate taxes.
  • Each state has its own Tax Freedom Day. Because of modest incomes and low state and local tax burdens, Alaska and Louisiana celebrate Tax Freedom Day earliest on March 26, the 85th day of the year. Connecticut celebrates last on April 27, the 117th day of the year, because income per capita is higher than in any other state.
  • Tax Freedom Day answers the basic question, “What price is the nation paying for government?” An official government figure for total tax collections is divided by the nation’s total income. The answer this year is that taxes will amount to 26.89 percent of our income, and the stretch of 99 days from January 1 to April 9 is 26.89 percent of the year. Income and tax data are then parsed out to the states, yielding 50 state-specific Tax Freedom Days.
     
     

Budget Blues in the Bluegrass State

The Louisville Courier-Journal examines the monumental task the Kentucky legislature has before it as it attempts to cultivate a workable budget in next year’s session. When the word "bloodbath" pokes its head into an article about your economic situation, you know things aren’t good. Let’s hope our neighbors to the South can find a workable solution.

In recent years — as revenue failed to meet projections — Kentucky has used its Rainy Day fund and the stimulus money to avoid mass layoffs of state workers and deep funding cuts for its highest priorities, including the public schools.

But now the Rainy Day Fund is empty. And federal stimulus dollars are scheduled to run dry in the middle of the next fiscal year.

“It’s most definitely the worst budgetary outlook I’ve ever seen,” said State Budget Director Mary Lassiter, who has worked in the budget office for 27 years. “The outlook is a lot worse than it was two years ago.”

Lassiter’s boss, Gov. Steve Beshear, said the budget picture is “going to get more difficult because we’ve already cut out a lot of things that perhaps aren’t as essential as other things. You get down to bone at some point and cuts hurt.”

Budget process could be ‘bloodbath’

The stimulus funds, while welcome, merely delayed the day of reckoning for Kentucky.

Revenues to the state General Fund are projected to fall more than $1 billion short (about 12 percent) of the roughly $9 billion required in the 2009-10 budget as enacted by the 2008 General Assembly.

Beshear and lawmakers are using $787 million in stimulus dollars to help fill that hole.

But only about $485 million in stimulus funds will be available to Kentucky in 2010-11 — and none at all in 2011-12.

State tax revenues — which have shrunk the last two years — are expected to begin growing again next year, but not nearly fast enough to plug the gap when stimulus funds end.

Selling Arizona

Tough times for the land of Goldwater; it seems the desert isn’t the only thing that’s dry out West. The Arizona Republic reports the state is seeking an immediate cash infusion to help fight an ever-growing budget deficit, and is looking at selling a number of state properties. The government would use the proceeds for the general fund, enter into what could be quite expensive lease arrangements and then repurchase the buildings when the leases expire.

Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they’ve conducted state business for more than 50 years.

Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn’t to liquidate state assets, though.

Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections. 
For investors, the arrangement means long-term lease payments from a stable source.

Once any deals are approved, money could begin flowing into state coffers in as little as 90 days.

The plan has bipartisan backing, but that doesn’t make the prospect of paying rent for buildings once owned free and clear by taxpayers any easier to swallow.

"We’ve mortgaged the legislative halls," said an exasperated state Rep. Steve Yarbrough, a Chandler Republican. "That just tells you how extraordinary the times are.

"To me, it’s something we’re going to have to do no matter how much we find it undesirable."

Unemployment Insurance Fund Negative Balance Growing to an Alarming Level

The state’s Unemployment Insurance (UI) Trust Fund is not just broke and in debt to the federal government to the tune of over $300 million through January; it’s going further in the hole by a magnitude that few have come to grips with. Conservative estimates suggest that Indiana is going to have to borrow somewhere in the neighborhood of $1.5 billion to meet its obligations.

The system needs a major overall. It suffers from a structural deficit that is getting exponentially worse as the economy continues to eliminate jobs. The problem actually began well before the economy tanked. A deceivingly large balance from several years ago has steadily disappeared. Last year the fund took in only $579 million, while paying out $986 million in benefits – a rounded off annual structural deficit of $400 million. Clearly there is a problem with the system.

Assuming the revenues paid in by employers in 2009 are equal to 2008 (which is questionable) and the monthly benefit demand remains $150 million (also questionable), the structural deficit for 2009 will be a whopping $1.2 billion. Unless something is done, by this time next year the negative balance will total approximately $1.8 billion. Federal stimulus money is anticipated, but it also increases and extends the mandatory benefits, exacerbating the problem rather than ameliorating it. Keep an eye on this issue because even though it is currently being overshadowed by other topics (budget, stimulus plan, etc.) it looks to become a major part of the legislative puzzle before the session ends.