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THE FLEECING OF WHOM, BY WHOM?
NBC NIGHTLY NEWS GETS IT DEAD WRONG

On the nationally broadcast "NBC Nightly News" of February 22nd, 2000, Tom Brokaw and reporter Lisa Myers used their smug nightly segment on "The Fleecing of America" to accuse DC of misusing federal funds. It may have been good entertainment, but it was very bad news reporting. Stripped of its frills and supporting clips, here (according to Burrelle's transcript) is what NBC News told the American people, with gratuitous help from former local School Board member Julius Hobson, and DC Subcommittee Chairman, Representative Ernest Istook: (emphasis added by NARPAC, Inc.)

The Allegations:

Brokaw: For years, Washington DC, beyond the famous landmarks, has been a city that simply doesn't work, a sink hole for tax dollars, THE FLEECING OF AMERICA. But now, new hope that things might finally be turning around. Might. ....

Myers:...the Washington that most America see (is) majestic, inspiring. But for years now, there has been another Washington. By all accounts mismanaged, incompetent, the city gets two billion a year in your tax dollars, much of it squandered. A perennial fleecing of America. Today, evidence the city is trying to make it better, but has a long way to go.......

Recently one third of the garbage trucks broken down. The school system, too, a real mess. Though the city spnds $8,000 to educate each child, among the highest in the nation, school officials say 58% still perform below grade level on math and science tests.

Hobson: The education and the human services areas are where the fleecing continues because those are the largest expenditures in the city's budget and there are a lot of those dollars that are simply going down the sewer....

Myers: City bureaucrats also have trouble getting priorities straight. The city's child welfare agency fell millions of dollars behind in payments to foster parents. At the same time, it's spending two million dolars on new furniture....

....Williams (got) 77% approval rating in a recent poll. He also has made real progress. Potholes once left for months, now often filled within 48 hours. And DC's (local?) workforce down from 58,000 to 33,000 with more to be cut....

....So what are taxpayers all over America to think about what they spend on the city of Washington?

Istook: People are not getting their money's worth. You can make an argument as to whether they are or not today, but I can tell you things are moving in the right direction.

Myers: Progress in the city where critics say fleecing the taxpayer has been a way of life.

The Facts:

The facts are as follows: DC will get about $1.6 billion in federal grants and assistance in FY00. The lion's share of this is for medicare/medicaid, the rest to help the school system, police forces, and economic development. These are grants from typical federal programs benefitting all Americans declared qualified by the Congress. DC's grants are particularly high because roughly one in four DC residents receives some form of welfare (see below).

DC residents who do pay taxes are among America's most highly taxed--despite the lack of DC representation in the US Congress. They pay more in federal taxes than they receive back directly. Its remaining local government inefficiencies are primarily born by the local taxpayers. Its lack of investment in its infrastructure (including garbage trucks) has been the result of a) paying for state-level functions tranferred by the Congress when DC finally got limited municipal home rule in the 1970's, and b) paying too high a share of welfare costs for years. The poor performance of schools is primarily the result of the poverty environment in which 90% of the public school kids live (see below).

Independent analysts have estimated that DC forgoes about $1.2 billion in property and corporate income taxes as a result of the federal presence, and its many tax-exempt adjuncts, from embassies to non-profit organizations. While DC clearly benefits enormously from that presence, most objective observers believe that some kind of cash payment would be well justified.

The real story here is of a city now working very hard to turn itself around--yes, with a long way to go. By misconstruing the use of federal funds (despite available budgetary data), NBC asserts that DC's problems are fleecing American taxpayers everywhere. The truth of the matter is far different.

With less than 20% of the metro area's population, DC is home to nearly 80% of the metro area's poor, underprivileged, and unemployed. To level the regional socioeconomic playing field, poverty-sharing is essential. There are only two stark alternatives, and both are blocked. Either the neighboring jurisdictions accept their share of the disadvantaged--by providing the needed subsidized housing, health, and educational facilities; or they share the financial burden placed on DC's relatively few taxpayers--by approving some transfer payment such as a commuter tax.

The neighboring states of Maryland and Virginia, together with the Federal Government (who essentially control DC's four separate oversight subcommittees-- and all aspects of DC's revenues and expenditures) are the fleecers. DC residents are the fleecees.

NBC should try to get it right: the real, scandalous news lies in the truth.


This item was archived in September, 2002

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