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Cato Daily Dispatch for September 16, 2003

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Senate Votes to Block FCC Media-Ownership Rules
Spending Cuts Could Offset $87 Billion Earmarked for Iraq
Medicare Drug Benefit Brings Problems for Retirees and Young Workers

Senate Votes to Block FCC Media-Ownership Rules

"The Senate approved a resolution Tuesday to repeal media ownership rules that critics say could lead to a wave of mergers and ultimately stifle diversity and local viewpoints in news and entertainment," reports The Associated Press. "Defying a White House veto threat, the Senate voted 55-40 to undo changes to Federal Communications Commission regulations governing ownership of newspapers and television and radio stations."

According to Adam Thierer, Cato's director of telecommunications studies, "Talk of mythical media monopolies and an end to 'diversity' and 'localism' in broadcasting represent scare tactics with no basis in reality. Information and entertainment cannot be monopolized, especially in an age of breakneck technological change."

He adds: "[T]he First Amendment remains of paramount importance when considering such restrictions of media. Limiting the size of the soapbox that media owners hope to build to speak to the American people is offensive to the free speech rights we hold sacred in this country."

In "The Media Ownership Debate: Who Are the Real Media Masters?" in the June 16 edition of Cato's techknowledge newsletter, Thierer and Cato Director of Technology Studies Clyde Wayne Crews Jr. argue in favor of the slightly relaxed rules. They write: "The scale and scope of private media organizations is not an appropriate target of coercive public policy, because such policy violates free speech. Government restrictions on ownership are themselves censorship and represent the real threat to democracy. Diversity, independence of voice, and democracy do not spring from government control of the means of speech, but from a separation between government and media."

Spending Cuts Could Offset $87 Billion Earmarked for Iraq

"When President Bush announced last week that he would ask for an additional $87 billion to fund ongoing military and economic assistance programs in Iraq and Afghanistan, he got the nation's attention," reports USA Today.

"But even more riveting news came the next day. Administration officials failed to offer a plan to pay that tab with either tax increases or spending cuts in other parts of the budget. Instead, the $87 billion will be borrowed, leading to a historically high deficit of $540 billion for the upcoming year, according to administration estimates. That is the equivalent of more than $4,000 per tax-paying household."

Cato Institute Director of Fiscal Policy Chris Edwards last week offered a detailed list of $87 billion dollars in federal spending cuts that would offset Iraq costs and create long-term savings of about $1 trillion dollars over the next decade.

"The bottom line is that there are many ways to find money for Iraq rather than pushing the deficit up even higher," says Veronique de Rugy, Cato's fiscal policy analyst. "This president needs to end his irresponsible spending binge."

Medicare Drug Benefit Brings Problems for Retirees and Young Workers

"As Congress works on legislation to cover prescription drugs under Medicare, lawmakers have been deluged with complaints from retirees who fear losing drug benefits they already have from former employers," reports The New York Times.

"In the last month, members of Congress say, they have realized that any Medicare drug benefit they may approve will have a profound effect on health coverage provided to retirees by former employers."

Retirees will not be the only ones affected by the drug benefit if it passes. In a just-released study, "War between the Generations: Federal Spending on the Elderly Set to Explode," Cato Director of Fiscal Policy Chris Edwards and researcher Tad DeHaven explain that with the huge numbers of Americans nearing retirement age, Medicare and Social Security are already insolvent, and adding pricey new benefits will prove costly and unfair to young workers. They argue that Congress should cut spending rather than expand elderly entitlements.

"It is clear that adding an unfunded prescription drug benefit to Medicare moves directly against reform because it puts the program's spending on an even more unsustainable path," they write. "Unfortunately, tomorrow's young taxpayers are not here to defend themselves against the huge burdens that are being foisted on them by Congress."

Jonathan Block, editor, jblock@cato.org