Romney’s economic scorecard: Promising success, comparing records
“My Plan for a Stronger Middle Class will get our economy moving again, and Americans can use this scorecard to hold me accountable.”
— From the Mitt Romney campaign Web site
Republican presidential candidate Mitt Romney last week unveiled an “accountability scorecard” that invites voters to track his performance on the economy if he defeats President Obama in November. A quote on the sheet reminds potential scorekeepers that the president predicted that his administration would be “a one-term proposition” if his policies didn’t turn the economy around in three years.
The scorecard outlines Romney’s goals for future measurements, but it also compares Obama’s presidency with Romney’s term as governor of Massachusetts, using simple up and down arrows to signify the two men’s respective records on various economic indicators: jobs, unemployment, home prices, budget deficits and family income.
For what it’s worth, Romney’s campaign first presented its scorecard after the Tax Policy Center released a report saying that the net effect of the GOP candidate’s tax proposals would be a higher burden for the middle class. We deemed that study to be fair after examining it for a column that covered an Obama campaign ad.
Romney also unveiled a new five-point “Plan for a Stronger Middle Class” that essentially repackages his older and relatively detail-deficient proposals for boosting the sluggish economy. His points include trimming the deficit, expanding trade, improving education and job-training programs, achieving energy independence and promoting small-business growth — pretty standard campaign fare.
As for the scorecard, let’s go through it to determine whether Romney’s simple arrows paint an accurate picture of the candidates’ records.
Jobs and Unemployment
Data from the Bureau of Labor statistics shows that Massachusetts added 50,000 jobs during Romney’s tenure in office. But that number represents only 1.5 percent growth for the Bay State, compared to a higher 5 percent increase for the nation as a whole during the same period. (We used seasonally adjusted data for our comparisons).
The scorecard indicates that Obama’s jobs numbers declined, which is true if you count his entire term to date, during which employment has dropped about .2 percent. But most of the job losses occurred while the president was trying to reverse a severe recession — one that he inherited.
Since the downturn ended in June 2009, the United States has added about 2.7 million jobs. That represents an increase of 2 percent, which is nothing to gloat about, but a positive trend nonetheless.
In terms of combined underemployment and unemployment, the level in Massachusetts decreased from 241,000 to 223,000 while Romney was in office, representing a decrease of 7.5 percent. That’s compared to a drop of about 15 percent for the country as a whole.
(Note: We found state “underemployment” data on the Bureau of Labor Statistics’ geographic profiles page, while data for the United States is available through Table A-8 of the bureau’s historical data on Current Population Surveys. The term “underemployment” covers individuals who worked 35 hours and couldn’t find full-time work because of economic conditions.)
As for Obama, the nation’s combined underemployment and unemployment level has risen by 4.7 percent since he took office. But it’s fallen by 11.6 percent if you start counting at the end of the recession.
With unemployment rates, Massachusetts dropped .9 percentage points under Romney, while the United States fell by 1.4 percentage points during the same period.
You can see the recurring pattern here. Massachusetts’ numbers improved under Romney, but the Bay State didn’t keep pace with the nation as a whole.
Under Obama, the U.S. rate has risen .5 percentage points since he took office. But it’s down 1.2 percentage points since the end of the recession.
Experts generally agree that governors have little power to control home prices, but we’ll entertain this comparison.
Price indexes from the Federal Housing Finance Agency show that home values increased during Romney’s tenure, just as the candidate’s scorecard suggests. Data from the agency indicate that home prices rose nearly 26 percent while he was in office.
But that figure for Romney’s whole term hides a 1.5 percent drop that occurred from the start of fiscal year 2006 through the last quarter of his administration. Nationwide, the home-price index grew nonstop during Romney’s tenure, and the numbers rose faster than they did in Massachusetts — 33 percent for the United States compared to 26 percent for the Bay State.
Home prices for the nation as a whole rose at unprecedented rates during the period Romney was in office, so it’s logical that they increased in Massachusetts, as well. But we should note that the housing market was actually overheated during that time, which is part of the reason the bubble burst so spectacularly.
During the Obama years, home prices have fallen by 7.9 percent for the nation as a whole. But that’s no surprise considering that the president took office shortly after the housing market collapsed. Few experts disagree that a drop in values was necessary and inevitable in recent years.
“This is the correction of a bubble,” said Dean Baker, co-director of the Center for Economic Policy Research. “Do you blame someone in office for home prices that were totally out of line with reality? Why wouldn’t we want them to be brought back down to Earth?”
Romney has agreed with Baker in the past. He told the Las Vegas Review-Journal last year that the government should let home prices collapse so that the housing market can move into a recovery phase sooner.
“Don’t try and stop the foreclosure process,” the GOP candidate said. “Let it run its course and hit the bottom. Allow investors to buy homes. Put renters in them. Fix the homes up, and let it turn around and come back up.”
Romney is trying to have it both ways. He encourages the government to let home values hit bottom, but he criticizes the president because prices have fallen.
For what it’s worth, the FHFA price index shows a slight uptick in home values during the first quarter of 2012, and monthly data from the agency suggests that the second quarter will show improvement as well.
Comparing Romney and Obama on the issue of budget deficits is misleading, because Massachusetts law requires the state to balance its budget every year. Romney had no choice but to sign a balanced budget every year.
Nonetheless, the Bay State can experience deficits when revenues come in lower than expected. This happened just before Romney took office, forcing his administration to implement emergency cuts and work with lawmakers to close a $3 billion gap during his first year.
Romney’s successor faced a similar predicament. According to news reports from late 2006, the GOP candidate warned incoming Gov. Deval Patrick (D) that the state could face a deficit of between $400 million and $1 billion because of lower-than-projected revenues.
Unlike Massachusetts, the federal government can run deficits, and the numbers are not good for Obama. The gap between spending and revenues has increased during his administration, rising from $641 billion during Bush’s last year to $1.3 trillion for the 2011 budget cycle, according to historical tables from the White House Office of Management and Budget.
But as we noted in a previous column about Obama and the national debt, Congress has rejected some of the president’s proposed policies — such as tax hikes on upper earners — that probably would have lowered the deficit. On the flipside, Obama’s opponents contend that tax hikes could hamper economic growth, ultimately making the revenue problem worse.
We should note that the Budget Control Act, which resolved last summer’s debt-ceiling standoff, is estimated to reduce the deficit by $2.1 trillion over the next decade. So it’s not as though the president hasn’t done anything at all to address deficit spending — just not as much as Republicans want, or using the means they prefer.
Data from the U.S. Census Bureau show that the Bay State’s median family income rose from $49,855 before Romney took office to $55,330 during his last year. Two important caveats: 1.) The median dropped during Romney’s final year relative to 2005; 2.) Those numbers aren’t inflation-adjusted.
The median family income in Massachusetts fell by $687 from 2005 to 2006, so the trend wasn’t always positive during Romney’s tenure. Furthermore, inflation-adjusted numbers show that the median income dropped by 1 percent during the span of his administration. That’s compared to a 1 percent increase for the nation as a whole during the same period.
The president’s numbers are worse than Romney’s, at least up until 2010, which is the last year of data available through the Census Bureau. In 2010 dollars, the U.S. median family income dropped from $62,300 the year before Obama took office to $60,400 during the last year on record, representing a decrease of about 3 percent.
The median income may have improved since then, just like most other economic indicators. But it’s a pretty safe bet that the gains wouldn’t put the president in positive territory compared to the day his administration started.
The Pinocchio Test
The scorecard’s simple arrows don’t account for the fact that Massachusetts lagged behind the nation as a whole in certain areas of the economy — jobs, home values and family incomes — while Romney was in office.
The scorecard also hides the fact that some economic conditions deteriorated for Massachusetts during the candidate’s last year in office, as is the case with home values and family income.
As for the budget-deficit comparison, it suggests Romney had a choice about whether to balance the Bay State’s budget during each year of his administration. But Massachusetts law required him to do so.
Finally, the scorecard gives the president no credit for taking office in the midst of the most severe recession in modern times. Obama’s numbers are generally positive since the end of the downturn, even if the recovery has been relatively slow. Democrats would argue that Congress is as much to blame as the president for that.
Nothing on Romney’s scorecard is flat-out false, but just about all the comparisons either lack context or ignore facts that contradict its assertions. Overall, the Romney campaign earns two Pinocchios.
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