Fact checking the dueling Obama and Romney economic speeches
“This is not my opinion. This is not political spin.”
— President Obama, remarks at Cuyahoga Community College, June 14, 2012
President Obama and former governor Mitt Romney delivered dueling speeches on the economy Thursday, but they need to freshen up their facts. With the exception of a few odds and ends, we have heard much of this before. But we are amused, as The Fact Checker, to see that the president believes he needs to tell his audience that he is not spinning them.
Let’s do a quick round-up. We will keep the focus mostly on Obama, since he claimed to have lots of facts. As is our practice, we will not do a Pinocchio rating at the end, in part because we have given ratings in the past for various statements that have been repeated.
“They haven't specified exactly where the knife would fall, but here's some of what would happen if that cut that they proposed was spread evenly across the budget.”
The key section of Obama’s speech dealt with his claims about what would happen to taxes and certain programs under the House Republican budget (which he then attributed to Romney).
The Romney campaign and the House GOP plans are relatively vague about how specific policies would be achieved, which apparently Obama believes gives him license to speculate on the outcomes. His examples — which we will not burden you with — are lifted from his speech in April criticizing the House budget.
The House plan actually is little different than the standard congressional budget blueprint, in that it sets out broad spending categories, with the details to be filled in later by the appropriations committees.
But Republicans, and especially Romney in his campaign platform, are withholding key details because they do not want specific proposals to become a target. However, the Congressional Budget Office, in a letter to Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, did warn that proposed targets would leave discretionary spending at potentially unrealistic levels, far below any such spending since World War II. (See page 10.)
Meanwhile, Obama is trying to fill in the blanks. His math adds up, and he clearly states that he is assuming across the board cuts when the Republicans have not specified actual cuts. But it is a bit much for him to claim: “This is not my opinion. This is not political spin. This is precisely what they have proposed.”
Now, that’s political spin.
“Even if you make all the cuts that they've proposed, the math still doesn't allow you to pay for a new $5 trillion tax cut and bring down the deficit at the same time. So Mr. Romney and his allies have told us we can get the rest of the way there by reforming the tax code and taking away certain tax breaks and deductions that, again, they haven't specified. They haven't named them, but they said we can do it.
But here's the problem: The only tax breaks and deductions that get you anywhere close to $5 trillion are those that help middle-class families afford health care and college and retirement and homeownership.”
This is an interesting issue. We have previously warned that estimates of revenue riches from eliminating so-called tax expenditures may be overstated. Indeed, the Congressional Research Service, in a new report, said that “given the barriers to eliminating or reducing most tax expenditures, it may prove difficult to gain more than $100 billion to $150 billion in additional tax revenues through base broadening.” So Obama is on solid ground to suggest Republicans will have trouble meeting their goals.
“Over the last few decades the income of the top 1 percent grew by more than 275 percent, to an average of $1.3 million a year.”
This is accurate but an interesting sleight of hand. Usually, in tax policy, the top 1 percent (or other income categories) are expressed in terms of the entry point. In other words, to get in the top percent of income, one needs an income of more than $350,000. By using an average, Obama is able to cite a much higher figure.
“From 2001 to 2008 we had the slowest job growth in half a century.”
As we revealed when we gave Obama Two Pinocchios for a similar statement, he is actually speaking about private-sector job growth. If a broader jobs figure is used, then Obama sometimes turns out to be worse than George W. Bush, depending on how you run the numbers.
In any case, Bush’s figures are low largely because he started his term with a recession (which he, like Obama, inherited) and then ended his term with a recession.We generally frown on the common practice of using presidential terms to create artificial distinctions between economic periods.
“Throughout history it has typically taken countries up to 10 years to recover from financial crises of this magnitude. Today the economies of many European countries still aren't growing, and their unemployment rate averages around 11 percent.”
Obama appears to be referring to recent research suggesting economic growth “is notably slower in the decade” after a financial shock.
But his comparison to Europe is a bit misleading because in general the United States has had a significantly lower unemployment rate than Europe. The rates merged for a few months early in the Great Recession, but that was unusual.
“And across America, we've seen them [businesses] create almost 500,000 jobs in the last 27 months, the strongest period of manufacturing job growth since 1995.”
This is correct, based on Bureau of Labor Statistics data, but it is worth remembering that manufacturing jobs have been on a long slide since 1995, falling by almost 3 million. The Great Recession really killed manufacturing, and the number of manufacturing jobs is still 600,000 below the level when Obama took office.
“I have approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.”
This is a complicated issue. When we last looked at this question in March, the Bush administration had issued 931 rules during its first three years compared to 886 for Obama. But the number of “economically significant” regulations — meaning those that are expected to have a positive or negative impact on the economy of at least $100 million — has increased from 126 during Bush’s last three years to 177 during Obama’s first three.
“How about Obamacare? The president said the other day that he didn't know that Obamacare was hard for small business. Oh, really? The Chamber of Commerce carried out a survey, some 1,500 businesses across America. Seventy-five percent of those people surveyed said Obamacare made it less likely for them to hire people.”
Oh my. The governor clearly had not read Thursday’s Fact Checker column showing that (a) Obama did not really say that and (b) he was answering a misinformed question. However, with the phrase “those people surveyed,” Romney did properly characterize the Chamber of Commerce survey, which because of its design cannot be used to draw conclusions about all small businesses — only the ones that were surveyed.
“The president said that if we let him borrow $787 billion for a stimulus, he'd keep unemployment below 8 percent nationally. We've now gone 40 straight months with unemployment above 8 percent.”
We earlier had dinged Romney with Two Pinocchios for this statement, because the president never said this; this was a staff estimate before he took the oath of office.
Interestingly, Romney more or less got it right when he used a similar line on Wednesday before the Business Roundtable: “The president's team indicated that if we passed their stimulus of $787 billion, borrowed, that they'd hold unemployment below 8 percent.” Note the phrase “president’s team” and the verb “indicated” — excellent tweaks that bring the allegation much closer to reality.
Too bad he couldn’t keep that straight a day later.
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