The following is a transcription of the February 12, 2005 edition of "FOX News Watch," that has been edited for clarity:

ERIC BURNS, HOST: This week on "FOX News Watch," the president wants to cut the budget and revamp Social Security. Is that OK with the press?

Could journalists have prevented 9/11?

Is there such a thing as going too far when it comes to free speech or when it comes to a new magazine?

And did anybody complain to the FCC about this year's halftime show?

First, the headlines. Then us.

(NEWSBREAK)

BURNS: The president's budget isn't the only budget making news this week. The FOX News Channel budget has also been announced, and it has just enough money in it for Jim Pinkerton of "Newsday"; syndicated columnist Cal Thomas; Jane Hall of the American University, in Miami this week; and back in New York, media writer Neal Gabler.

I'm Eric Burns. "FOX News Watch" is coming right up.

There is probably nothing a president does that more clearly reveals his priorities than announce his budget. There is nothing the media do that reveals their priorities more clearly than cover a president's budget.

There's your setup, Cal.

CAL THOMAS, SYNDICATED COLUMNIST: That's very good, Eric.

Well, there's a presumption among many in the media, virtually all of the media, that all government programs are good. And if you even slow down the rate of increase, which in Washington is a cut — it's not a cut in anybody else's real world that I know of — then somehow you are hurting people. And the networks were full of stories right after the president's budget announcement about how many people were going to be heard, and the homeless. And even Bob Schieffer (search) got on CBS and talked about how this — this budget was going to hurt a lot of programs, and they need to be funded.

So all government is virtuous, all government is good. And any time you seek to reduce the costs, you're being evil. That's the media perspective.

NEAL GABLER, MEDIA WRITER: Well, I don't know it wasn't true in those characterizations — I mean, this budget is going to hurt people. — But I think the Bush administration operates on the principle that the press is lazy and compliant. And they thought they could smuggle an elephant into the room without the press noticing.

Well, guess what? This time most of the press did notice that the budget doesn't include the supplemental appropriations for Afghanistan and Iraq, that the budget doesn't include the transition cost, the huge transition cost to privatizing Social Security. That it doesn't include rescinding the alternative minimum tax. And one could go on and on and on. It doesn't include leases, oil leases in the Arctic Wildlife Reserve (search), even though that's even been passed.

BURNS: For years you've been blasting the media for laziness. You finally found a story that you think they're on top of.

GABLER: Eh.

(LAUGHTER)

BURNS: Jane, let me ask you. I think there — if assuming what Cal says is accurate, one of two ways to analyze it. Either this is an example of political bias, or this is the way the media normally work.

They like the story of the tragedy, the unfortunate event. No matter how you do a budget somebody is going to lose something. It's just a media tendency to go to the people who are going to lose something because that's a more compelling story.

JANE HALL, AMERICAN UNIVERSITY: Well, I think it is a media tendency to go to people who are going to be effected. But, you know, Cal's "Washington Times" pointed out that he failed to mention the cost of the war in Iraq and Afghanistan. And we're talking about Social Security and now we have to talk about how much many more millions and billions the Medicare benefit costs.

I think if the media report that something's not included, and that these are huge domestic spending cuts — I mean, it's .8 percent of trillions of dollars — I don't think that's editorializing. I think that's pointing out what's in the budget and what's next.

JIM PINKERTON, "NEWSDAY": When I watched Anderson Cooper on CNN say, President Bush announces budget now, while the rights to a veteran is about to lose his medical care because of this alleged Bush budget, I flash back 21 years to a CBS special called "People Like Us" narrated by the notorious Bill Moyers (search), which was just one big hour-long hatchet job on the Reagan administration.

However, what Jane has alluded to shows the odd — flip side of this, which is it's .8 percent cut. Hold on. Hold on. Hold on.

GABLER: Wait a minute.

PINKERTON: It is not — it is spending...

HALL: But it's pointing for spending $2.5 trillion.

(CROSSTALK)

BURNS: We're also — we're also not going to know what the cut will be until it goes through the legislation process as well.

PINKERTON: But I can help Neal more. I can say it's $2.6 trillion. That's $9,000 a person.

There's really — and a funny way of multiple conspiracy against the truth committed by the Bush administration, the Democrats and the media when they call $2.6 trillion austere, as "The Washington Post" called it, or tight, as Dick Cheney (search) called it, or not enough, as Harry Reid (search) called it.

BURNS: Jane, you mentioned Social Security a few moments ago.

HALL: Yes.

BURNS: That is the other big story this week that concerns the president and concerns government spending. What about the coverage of that? Your thoughts about that?

HALL: Well, I thought there was a very interesting piece by Alan Sloane (search), who reminds me of a wonderful economics professor walking you through what he thinks about the Social Security program. He has the authority to look at it, and they had a very funny illustration, with a senior citizen looking like Evel Knievel (search) jumping into a void and not understanding.

He points out how it's going to work and what the flaws are and what the strengths are, and also that the Democrats aren't being totally honest about the fact that we don't need to do something about Social Security. I find it a really helpful piece. And funny, too.

BURNS: And wouldn't that be the way for the media if they can, Cal, to cover these kinds of confusing financial stories, analysis as opposed to, you know, looking for the gripping story at one extreme or the other maybe?

THOMAS: Yes. Well, of course that's what gets ratings. But Neal is right about not only what is left out, but he didn't go far enough and say what is left in.

There is so much waste, fraud and abuse that the media never address. And the Grace Commission during the Reagan years tried to, but this is what the media mostly ignored.

GABLER: Look, most of the budget is non-discretionary. So, I mean, when we're talking about these cuts, we've got to look at them very carefully.

BURNS: But we can't. We have to take our first break. We'll be back with as provocative a question as we have ever asked on this program.

ANNOUNCER: Could journalists have prevented 9/11? Could they have at least showed some interest in Usama bin Laden before 9/11? Stay tuned for more "FOX News Watch."

(COMMERCIAL BREAK)

BURNS: This is Tom Fenton, a highly respected foreign correspondent for CBS News who has recently retired and written a book which will be out in a few weeks and which you will hear about a lot. Mostly what you'll hear is that Fenton simply could not get reports of his about Usama bin Laden (search) on the air back in the late '90s. CBS executives in New York weren't interested. In fact, says Fenton, references to bin Laden's violent intentions toward the United States were edited out of one of his reports because an executive said that the story already had "too many foreign names."

Jim, let's begin by saying that there's not a chance in the world that this was just CBS' attitude. NBC, at the same time, ABC. Fenton's talking about the TV news business on the whole.

PINKERTON: Right. My friend Peter Bergin in Washington interviewed Bin Laden in 1998 and basically couldn't get himself arrested media-wise, until, of course, 9/11.

Look, we now know since 9/11 that ignorance is not bliss, that what we don't know can hurt us. We ignored all the warnings of the fatwas and all these documents that people like — and specials like Peter Bergen were doing, and it hit us in the nose hard on 9/11, did a trillion dollars worth of damage to our economy, killed 3,000 people and has changed the world ever since. Hopefully Fenton will at least illustrate the mindset that led to this Pearl Harbor-like sleepwalking through history up until 9/11.

BURNS: And Jane, before you comment, let me tell you we did some checking here. And we found that in 1995 and 1996, ABC, CBS, NBC evening news casts, in total, two reports in two years both on ABC about bin Laden.

HALL: You know, I think that this is correct, that it's a criticism of the networks. I mean, I was covering the networks at that time, and the new owners of the broadcast networks were cutting foreign bureaus.

And I think that you have to in some way also look at the audience in America. You know, it's a self-fulfilling prophecy. People weren't interested, so we aren't going to cover it.

You know, there was always the saying that only if American troops were involved were we interested. That was a mistake. It was a mistake in our foreign policy that we weren't interested, and it was also a mistake in our media coverage.

BURNS: To me, Cal, Jane makes a terrific point. You can't just blame the news executives.

CNN had this show on called "The International Hour" for years, 3:00 or 4:00 in the afternoon, and they dropped it because of low ratings. Part of the blame has to go to the people who didn't want that kind of news, doesn't it?

THOMAS: Yes. Well, the only way you can get these stories now is, "Obesity: is it a problem among terrorists?" I mean, you know, "I was a child molester for Al Qaeda," something like that.

(LAUGHTER)

THOMAS: The problem is, as we've discussed on this program before, is that the advertisers are in the newsroom. And news has become a marketable product like deodorants and Depends and makeup and all of the rest. And so they tailor a lot of their stories, women's health issues, to the demographic that the advertisers want to meet; namely, mostly women and women of a certain age.

And that is why you don't get a story, for example, on the growing threat of China. The major experts in this — in this area of foreign policy say China is going to be the next major problem for the United States. When was the last time you saw anything about China? Fenton brings up that point in his book.

GABLER: A lot of blame to go around here. Network executives, as Fenton says, who are interested in news as a profit center. We talked about that here just now.

News executives themselves I think who see themselves as satisfying an audience rather than satisfying a need, and the audience. Look, Cal just said it. The audience is much more interested in Michael Jackson (search) than it is in Darfur (search) and 70,000 people dying.

So you have to look into yourself. The problem is not all with the news executives. It's — the problem is, it's not in the stars, it's with us. It's our problem.

PINKERTON: And lest anyone doubt the impact on government policy, or lack of impact, the — now we know that the FAA, the Federal Aviation Administration, got 50 warnings about Al Qaeda activities in the months leading up to 9/11 and did nothing. If they had seen on TV or read about it in the morning papers, they might have been more alert and saved all those lives.

BURNS: But you know what I found interesting? There was an ad that FOX News Channel took out in "The New York Times" on Monday bragging about how well it did in covering the Iraqi elections. And look at that, America's choice for international news — this isn't a plug for Fox so much. What struck me is here's a network actually putting in a headline, something about its international news coverage.

GABLER: Yes, but this is again American-centric. This is about the Iraqi elections and how they're going to affect us.

In fact, last week on this show...

BURNS: Still, Neal, that phrase would have been....

GABLER: ... the question you asked was, "What is the effect of the coverage of the Iraqi elections on the Bush administration?" All of this is so American-centric. And I tell you, it represents and causes an American centrism that is going to get us, as Jim just said, in deep, deep trouble if we think that the rest of the world exists to serve us, which is what the message that the media is giving.

BURNS: But Jane, if we are American-centric to the extent of telling Americans more about what happens abroad — I know Neal meant something in addition to this, too.

GABLER: Yes.

BURNS: But that part would be good if — you know, if we were having more coverage geared to Americans' concerns about what's happening abroad.

HALL: I don't think it's a bad thing. Whatever can get people interested.

FOX made this a priority. And I think this is a trade story, too. FOX is hitting CNN where CNN has lived. And CNN had disappointing ratings, and that's been their strength. That's why Fox, in my opinion, took out that ad.

BURNS: Interesting. Jim, in this week's "Parade" magazine there is a list of 10 dictators who are threats in the future. And it's funny that should come out at the time when we're talking about Fenton's book. Maybe this is kind of an object lesson to us, let's make sure that none of these 10 does anything similar to what bin Laden did.

PINKERTON: Well, one of those dictators is Hu Jintao (search), the guy who runs China. Others include Saudi Arabia and Pakistan. Those are major U.S. allies.

So, yes, these are — as Neal was saying, these are critical, important issues. We'll hear from them soon again.

THOMAS: I salute "Parade" for doing that instead of their usually fluffy stuff. This is a very important issue.

BURNS: We have to take another break. We'll be back with our "Quick Takes" and we'll lead off with a very different kind of story about 9/11.

ANNOUNCER: Did the victims deserve to be victims? He thinks so.

And guess how many people complained about the Super Bowl halftime show this year.

"FOX News Watch" will continue.

(COMMERCIAL BREAK)

BURNS: Time now for our "Quick Takes" on the media.

Headline no. 1: "No, He Sure Isn't Related to Winston."

University of Colorado professor Ward Churchill (search) has been in the news a lot lately, calling the victims of 9/11 little Eichmanns. Adolf Eichmann was one of Hitler's minions. And Churchill spokes of the gallant sacrifices made by the World Trade Center attackers.

Colorado Governor Bill Owens wants him to be fired. In response, Churchill has said, "I don't answer to Bill Owens. I'm not backing up an inch. I owe no one an apology."

Jane, is this truly a big story as the media are playing it, or one of those small stories with enough controversy so that we make it big?

HALL: I think it's a small story that speaks to the fact that there are people monitoring what academics say. As I understand it, this was a thing that wasn't even known about until this professor was making a speech and somebody wrote about it at a student newspaper.

A lot of people think this is appalling. It is appalling. And yet, you know, I would say that this is one of the few places where there still is the ability to say something provocative and appalling, and it should be defended.

THOMAS: Conservative media have been reporting on academic outrages for years. And it's only now gotten into the mainstream because the mainstream media has — have picked it up.

I think a real — there are two things here that may not be media- related. The problem isn't his free speech. And he ought to be able to say whatever he wants to say. The problem is the people who hired the bozo in the first place and the people who send their kids to a school like that.

BURNS: Should anything be done officially?

THOMAS: Well, I mean, by tenure rules, one of the reasons the tenure exists, frankly, is so that professors can have freedom of speech without being fired for it. Unless there's documented evidence of scholarly incompetence, which, as far as I know, there is not here.

GABLER: A bad person is a bad person. But a bad person plus media is a villain. And some people love to be villains.

BURNS: You get a lot of publicity, don't you?

No more from us.

"Quick Take" headline no. 2: "Better Than Viagra?"

Well, let's say different. Incase you've been wondering when Sylvester Stallone's new magazine "Sly" hits the stands, it's Monday, Valentine's Day. In it there will be articles Stallone has written himself, like the one about how to perform better in bed. And there will be an interview he conducted himself with a porn star about lesbians and porn.

It makes you want to ask Stallone this question...

(BEGIN VIDEO CLIP)

BURGESS MEREDITH, ACTOR, "ROCKY": What the hell goes on inside of your head? Anything normal, pumpkin?

(END VIDEO CLIP)

BURNS: And Jim, the answer to that question? What can we assume it is?

(LAUGHTER)

PINKERTON: Obviously, Americans aren't getting enough sex. So Stallone is here to help. But he's got a new TV show called "The Contender," which I noticed is bannered inside the magazine. I suspect this is a very elaborate promo for the show.

BURNS: And it's also one more example, isn't it, of how transferable celebrity often is Cal, right? You're big in one field, you think that you can be big in any other field, that the media will make you that way.

THOMAS: Well, my biggest surprise was in your lead-in, Eric, when you said Stallone writes. Stallone can write?

BURNS: He wrote a novel once called "Paradise Alley." Years ago he wrote the screenplay to "Rocky." I think we all ought to get behind his magazine.

GABLER: Well, you know, "Sly" One I think is going to be pretty good. "Sly" Two, and by the time you get to "Sly" Five, I pity the fool who reads it.

(LAUGHTER)

BURNS: Jane, I don't know if you can subscribe or you have to get this at a newsstand. Where would you like to pick up your copy of "Sly?"

HALL: Well, I just want to say that I loved in page six in "The New York Post" his representative said he was going to be hands-on in the sex magazine. I'm glad to hear that.

BURNS: By the way, do you know what's in the first issue, all of you? An excerpt from the "Rocky VI" screenplay which no studio is willing to produce.

UNIDENTIFIED MALE: Oh, I can't wait.

BURNS: Available at your newsstands on Valentine's Day.

"Quick Take" headline no. 3: "Two Super Bowl Promises Kept."

First, Terrell Owens played and had a big game. Second, Paul McCartney played and did not have a wardrobe malfunction.

Last year half a million people complained because the halftime show was too explicit. This year, Neal, two people complained because it was too boring.

GABLER: Yes, the rest were sleeping.

BURNS: And two people called to praise the show. So the FCC got a total of four responses.

GABLER: Yes. Here's a little historical perspective. If the Beatles had performed at Super Bowl I, the same people who objected to Janet Jackson would have objected to the Beatles performing then. It just shows you the flow of the history of popular culture.

PINKERTON: Neal stole my line about — I mean, he didn't steal it. He just got it out first — falling asleep to Paul McCartney. The only reason I watched was I wanted to see if Yoko Ono would wreck this too.

(LAUGHTER)

THOMAS: I thought it was great. I loved seeing him lip-synching "Live and Let Die." I thought it was terrific. And the light show was great.

And besides, you could watch it with your children and grandchildren. It's supposed to be a sports contest, not a porno festival.

BURNS: We have to take one more break. When we come back, it will be your turn.

(COMMERCIAL BREAK)

BURNS: About media coverage of the Iraqi election, here's Ray from Miami, Florida.

"You guys all missed what we saw with the Iraqi election. For the first time since Saddam's statue fell, the American public was treated to an unbiased clear story that gave us a true national response from the country we invaded."

And Jennifer from Tacoma, Washington, has emailed us. What she says are the five parts of the media strategy for covering Iraq: "Compare Iraq to Vietnam. Draw a comparison between Vietnam and Iraq. Point out any similarities to Vietnam that can be seen in Iraq. Discuss historical parallels between Vietnam and Iraq. If all else fails, find ways to evoke images of Vietnam when discussing Iraq."

About FOX News contributors Charles Krauthammer and Bill Kristol consulting on President Bush's State of the Union address, here is William from Pulaski, Virginia.

"You at FOX News Watch are doing the right thing in discussing Krauthammer and Kristol, revealing it can do no possible harm, but failing to mention it could give all kinds of people opportunity to criticize FOX's integrity. Thanks for being there, and tell your panel I appreciate the fact that they don't agree on most everything."

About Buster the PBS bunny who visited some lesbians in Vermont, thereby upsetting the secretary of education, among others, here is Scott from Kensett, Iowa.

"I'll believe PBS doesn't have an agenda for Buster Bunny when I see the following in 'TV Guide': Buster travels to Colorado Springs to learn about traditional concepts of marriage and family from Dr. James Dobson at Focus on the Family (search)."

About all the media coverage of Terrell Owens before the Super Bowl, here is Rich from West Chester, Pennsylvania.

"You blame him for a media frenzy about his injury. But I'm sure he was not the one calling the media for interviews. If you want to blame someone for the over-coverage, get a mirror."

Finally, here's a topic that used to come up all the time on this program but hasn't for almost a year now. It's nice to have it back. It's from Pat in Pasadena, California.

"I love how Jim Pinkerton laughs with his eyes closed. He must have been laughing last week when he picked out that shirt and tie."

Well, here is what Jim looked like last week, and here he is this week with open eyes and a much more conservative tie.

And here is our address: it is newswatch@foxnews.com. Please write to us, tell us your full name, let us know where you live.

That is all the time we have left for this week. Thanks go to Jane Hall, Jim Pinkerton, however he's attired, Cal Thomas, Neal Gabler. And I'm Eric Burns, thanking you for watching.

You'll see you next week when FOX News Watch with Jane Hall back here in New York will be back on the air.

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