We will leave to others the economic analysis of Romney’s big speech on fiscal policy last Friday. How accurate were some of his facts?
“It took 43 presidents over 200 years to accumulate $6.3 trillion in debt. President Obama is on track to do that in just one term. His fundamental error is that he believes government creates jobs. He’s wrong. He puts his faith in government. I put my faith in people.”
This fact is technically correct but a bit misleading with the emphasis on 43 presidents and 200 years. The debt doubled under Obama’s predecessor, so Romney could have just as easily said that it took 42 presidents more than 200 years to accumulate $3.3 trillion in debt but George W. Bush about doubled it. Spending certainly accounted for a large part of the increase in the debt, but so did the dramatic decrease in tax revenue as a result of the Great Recession.
“Central to my plan is giving every American the option of throwing out that 3 million words of the current tax code and, I might, add, the cost of complying with all of that code in order to pay a 20 percent flat tax on their income. You know, the size of the current code is more than 72,000 pages. That's represented by this pallet right over here and the reams of paper. That's what the current tax code looks like.”
— Texas Gov. Rick Perry, Oct. 25, 2011
Rick Perry, trying to relaunch his sagging campaign, on Tuesday announced that he would push for an optional 20-percent flat tax. We will leave the merits of such a system to other analysts, but the key to his argument is that such a system would be so simple that taxpayers could file their return on a post card.
So we were struck by his use of two figures — 72,000 pages and the 3 million words of the tax code — as a way to illustrate the complexity of the current system. He even pointed to 72,000 pages of paper before holding up a post card he had stuffed in his jacket pocket.
We are always suspicious when politicians mention page numbers. Are these numbers correct?
Anyone with basic math skills would instantly notice there is a disconnect between those numbers. If you divide 3 million words by 72,000 pages, that would mean 42 words per page. That’s rather big type.
“I am pro-life from conception... I don’t believe government should make that decision.”
— Herman Cain, interviewed by John Stossel on Fox Business, Oct. 11, 2011
“What it comes down to is not the government’s role or anybody else’s role to make that decision. Secondly, if you look at the statistical incidents, you’re not talking about that big a number. So what I’m saying is it ultimately gets down to a choice that that family or that mother has to make.”
— Cain, during an interview with CNN’s Piers Morgan, Oct. 19, 2011
“That first clip that you played was taken out of context... I simply said, if you get pushed to that extent, the family isn't going to be thinking about what the laws are at that point. They're going to be thinking about their family member and that baby. That's what I mean by it was taken out of context.”
— Cain, on Fox and Friends, Oct. 24, 2011
Confused yet by Herman Cain’s position on abortion?
Politics 101 says that any major-party candidate needs to have a position on abortion — and then stick to it. Just mouth the exact same sentence over and over again and you won’t get in trouble.
Cain has violated that rule repeatedly in recent weeks. We dare you to watch the clips below and tell us whether he’s for abortion rights or against them. In both cases, he actually sounds vaguely pro-choice.
So were his words taken out of context, as he claimed Monday?
Here’s the transcript of what Cain said on CNN:
“9-9-9 will pass, and it is not the price of pizza because, it has been well-studied and well-developed… The problem with that analysis [that it will not raise enough revenue] is that it is incorrect. The reason it's incorrect is because they start with assumptions that we don't make. Remember, 9- 9-9 plan throws out the current tax code. ... Now, what 9-9-9 does, it expands the base. When you expand the base, we can arrive at the lowest possible rate, which is 9-9-9.”
— Herman Cain, Washington Post-Bloomberg debate, October 11, 2011
A family of four making $50,000 a year “are still going to have some money left over.”
— Cain, on MSNBC, October 12, 2011
It almost sounds like something out of the movie “Dave,” in which the accidental president enlists his accountant friend, Murray Blum, to help him figure out the federal budget.
During Tuesday’s Washington Post-Bloomberg debate, Herman Cain, the former chief executive of Godfather’s Pizza, named Rich Lowrie of Cleveland as “my lead economist” who helped develop Cain’s signature “9-9-9” plan for overhauling the federal tax system. “He is an economist, and he has worked in the business of wealth creation most of his career,” Cain said.
Actually, according to Lowrie’s Linked-In profile, he has a bachelor’s degree in accountancy from Case Western Reserve University, not economics. Lowrie, in an e-mail, said he did not consider himself an economist, just “senior economic advisor” to the Cain campaign. Donor information maintained by Opensecrets.org shows he has donated $1,500 to Cain in 2010 and 2011, but also contributed $2,300 to Mitt Romney in his first run for the presidency in 2007.
Okay, so Cain may have exaggerated the qualifications of his economic guru. But he has forcefully defended his ‘9-9-9’ plan, both during Tuesday night’s debate and on MSNBC’s “Daily Rundown” on Wednesday. Many readers have asked us to examine the plan and explain it, so let’s take it for a test drive.
The “9-9-9” label is actually a bit of misnomer. Cain would toss out much of the current federal tax code and replace it, eventually and only temporarily, with three taxes — a 9 percent income tax, a 9 percent business transactions tax and a 9 percent federal sales tax. On paper, the first two look like cuts, because payroll taxes for Social Security and Medicare (now nearly 15 percent, including corporate contributions) would be repealed. The sales tax would be new, on top of existing state sales taxes.
The Washington Post and Bloomberg News are sponsoring an economics-focused debate among the 2012 Republican presidential candidates at Dartmouth College in New Hampshire on Tuesday.
In preparation for that debate we have produced three videos that examine some of the most common sound bites used during previous debates — and what’s factually wrong with them. The videos cover three distinct areas.
At a glance, it will tell you how the various candidates have fared in Pinocchio checks. It lists each rating, with a link to the relevant article. If you hover over a candidate’s name, the tracker will also calculate the average number of Pinocchios a person has received. We plan to update this tracker at the end of every week.
“As President of the United States, I will devote myself to an American Century. And I will never, ever apologize for America. …I believe we are an exceptional country with a unique destiny and role in the world. Not exceptional, as the President has derisively said, in the way that the British think Great Britain is exceptional or the Greeks think Greece is exceptional. In Barack Obama’s profoundly mistaken view, there is nothing unique about the United States.”
“When it comes to being effective at creating jobs, improving schools and expanding opportunity, [Gov. Chris Christie’s] record in New Jersey has not been a report of governing for effectiveness. His bond rating has been downgraded by two of the bond rating agencies. His unemployment in New Jersey is one of the higher unemployment rates in the country at 9.4 percent. Last year, New Jersey created no net new jobs. And his schools, because of the choices he’s made to cut education funding, have actually been declining in their national ranking.
So that’s not a record of leadership and governance and effectiveness. So whatever the entertainment value is, it’s not effective governing.”
— Comments from Maryland Gov. Martin O’Malley (D) during an interview on CBS’s “Face the Nation,” Sept. 2, 2011.
Our experience is that governors receive too much credit and criticism for conditions they don’t fully control — such as the economy. But O’Malley’s comments provided an ideal opportunity to check up on Christie’s limited record — he hasn’t even been in office two years – while the speculation about his potential presidential run reached a pitch.
Alas, Christie announced Tuesday afternoon that he would not seek the GOP nomination for president. But we decided our efforts shouldn’t go to waste. Might as well see what the Republican field is missing, right? And you can’t let a politician rattle off accusations like O’Malley did without checking his claims.
New Jersey’s credit ratings did indeed drop this year with all three of the leading credit-rating agencies.
“And don’t forget I sit on the Intelligence Committee. We deal with the nation’s classified secrets. This is an open-source document. I’m not sharing something I shouldn’t, but China has blinded United States satellites with their lasers.”
— Rep. Michele Bachmann (R-Minn.), Sept. 30
A reader sent us an article about Michele Bachmann’s comments on China during an appearance on Laura Ingraham’s show last week. The headline was “Bachmann: China Attacked US Satellites With Lasers.” That certainly got our attention, though when we actually listened to the quote, it was not quite as dramatic as “attacked.”
Even Michele Bachmann is sometimes misquoted!
Still, the idea that China has “blinded” U.S. satellites is a pretty dramatic charge. Bachmann cited her credibility as a member of the House Select Committee on Intelligence. Is there much truth to this?
Bachmann suggests that this is a recent event, mentioning an “open-source document.” But she seems to be referring to something that appears to have happened in 2006.
Question: “Governor Perry, what would you do to transform it [Social Security] from what you have described as a ‘Ponzi scheme?’”
Texas Gov. Rick Perry (R): “One of the other things that we talked about in the book, ‘Fed Up,’ was that states could open back up for their employees and/or their retirees -- we did that in the state of Texas back in the `80s. Those counties that participated in that have somewhere between 3 and 5 percent more going to their — or three to five times more going to their participants who opted out of Social Security.”
— Exchange on CNBC’s “Squawk Box,” Sept. 29, 2011
As Texas Gov. Perry continues to run away from some of the more pointed statements in his book, “Fed Up,” such as calling Social Security a “Ponzi Scheme” (see page 61), he has strived to emphasize his interest in finding solutions for the old-age retirement program. One example he has pointed to is the decision by three Texas counties — Galveston, Matagorda and Brazoria — to opt out of Social Security and start their own retirement plans.
In his book, Perry mentions the Texas counties’s move on the same page he labels Social Security a Ponzi scheme, but he doesn’t really explore it as an option for fixing Social Security. He simply mentions it as an example of where individuals would have done better on their own. “Employees in those private plans, having exercised their liberty at Washington’s sufferance, are reaping the benefits,” he asserted.
In his CNBC appearance, Perry was specific — that participants are getting “three to five times more” than people in Social Security. Is this correct? And does it make sense to even make this comparison?
Social Security was created in response to the pervasive poverty during the Great Depression. It is designed to provide workers with a basic level of income in retirement, as well as disability pay and life insurance while they work. Just over 60 percent of the 54 million beneficiaries are retired workers; the rest are disabled workers, dependents or survivors. (For more information, read our popular primer on Social Security.)
“And the right course politically at this stage is to have states carry out their own right-to-work legislation. And as you know, right-to-work states, those 22, have created 3 million jobs over the last 10 years. The union states have lost about half a million jobs. So right to work is the way to go if you want good jobs.”
-- Former Massachusetts Gov. Mitt Romney at American Principles Project Palmetto Freedom Forum in Columbia, S.C. on Sept. 5, 2011
Romney’s comments go to the heart of the right-to-work debate, so they deserve some scrutiny and analysis.
Right-to-work states are those that prohibit “closed shops,” which require their workers to become dues-paying union members as a condition of employment. Twenty-two states have outlawed this practice.
Romney refers to the 28 states that don’t have right-to-work laws as “union states.” Workers in these states can forego union membership in a unionized workplace, but they still have to pay dues. Labor groups have their reasons for pushing mandatory dues on employees: they don’t want non-members asking for the same benefits and wages that union officials painstakingly negotiated for the workers in their ranks.
But is there really a documented link between “good jobs” and these state laws?
We searched the Labor Department’s Bureau of Labor Statistics Web site to find data on each state’s non-farm, seasonally adjusted employment during the past 10 years. Just as Romney said, right-to-work states have better employment numbers on the whole.
That was a rip-roaring Republican debate Wednesday night at the Reagan library. As is our practice, we will quickly assess a number of claims and then perhaps come back later with a deeper look at some issues.
The debate started with a back and forth between former Massachusetts governor Mitt Romney and Texas Gov. Rick Perry over job creation during their tenures. This in many ways is a silly discussion — governors and even presidents are very much at the mercy of the economic situation they inherited — and Romney actually framed it well:
“The states are different. Texas is a great state. Texas has zero income tax. Texas has a right-to-work state, a Republican legislature, a Republican Supreme Court. Texas has a lot of oil and gas in the ground. Those are wonderful things. But Governor Perry doesn’t believe that he created those things. If he tried to say that, why, it would be like Al Gore saying he invented the Internet.”
(Gore actually did not put it quite that way, but never mind.)
So, for the moment, we are going to set aside the job discussion, stipulating that each man has his claims and counterclaims, and focus on other issues.
“It is a monstrous lie. It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there.”
— Gov. Perry
Perhaps the governor does not know the dictionary definition of a Ponzi scheme. Here’s what Merriam-Webster says: “An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”
“While the output has declined, the bureaucracy at the DOD [Department of Defense] has increased. There is enormous waste. Let me give you an example that was reported to me by former secretary of the Navy John Lehman. During World War II we built 1,000 ships a year. And there were 1,000 people in the Bureau of Ships. That's the purchasing department, if you will. In the 1980s we built 17 ships per year, and we had 4,000 people in purchasing. Today we build nine ships a year. Guess how many people are in purchasing? Twenty-five thousand people.”
--Former Mass. Gov. Mitt Romney, Aug. 30, 2011
In his speech to the Veterans of Foreign Wars last week, Romney told a story that was so good that it just cried out for checking.
He repeated a set of statistics that John Lehman, Navy secretary during the Reagan administration, has mentioned in speeches. Lehman’s point has been echoed by others, including mostly recently former Sen. Jim Talent (R-Mo.). In testimony before the House Budget Committee in July, Talent quoted at length from one of Lehman’s speeches on the subject.
Certainly, the issue of Pentagon bloat and inefficiency is an important one, especially as lawmakers seek to trim hundreds of billions of dollars from the budget. But our eyebrows went up when we heard Romney tell this story, in part because it already is a stretch to compare ships made 60 years ago with the modern battleships of today. The U.S. population has more than doubled since then, while technology and complex systems have vastly improved.
Let’s check the numbers.
Lehman quickly got on the phone to explain how he had developed these statistics. He emphasized that “this is not a partisan issue” at all and that the current undersecretary of defense for acquisition, Ashton B. Carter, “really gets it” and is trying to deal with the problem of bloat. Carter was recently nominated to be deputy secretary, largely because of his skill at finding budget savings.
“With respect to China, I would establish a senior strategic dialogue. The one thing the relationship needs and doesn't have -- and I would say under Republicans and Democrats this has been a problem -- we don't have enough trust in the relationship. And the trust is driven by a head-of-state-to-head-of-state kind of relationship…. I would formalize a strategic dialogue that would build trust and confidence in the years to come, because they want to know what our intentions are in the region. We need to known what their intentions are in the region.”
--Former Utah governor Jon Huntsman, August 23, 2011
Huntsman, who is running for the Republican presidential nomination, is a fluent Chinese speaker and was ambassador to China under President Obama. So he certainly knows a great deal about the U.S. relationship with Beijing.
But we’ve been puzzled by one of his talking points—that the United States needs to establish a “senior strategic dialogue” with China. He made that point during the last Republican debate and then again Tuesday on CNBC.
Doesn’t the United States already have a strategic dialogue with China?
A senior-level dialogue was first established in 2005 under President George W. Bush, with then-Deputy Secretary of State Robert Zoellick taking the lead on both strategic and economic issues. It was then upgraded to a more senior level, focusing more on economic issues, under Treasury Secretary Hank Paulson.
“The president’s been on a jobs tour. As a matter of fact, we crossed paths when we were in the state of Iowa. He had his big ol’ bus – his big ol’ 1.2 million-dollar bus, made in Canada – but, anyway, the real issue is our president’s out there, and he goes on a jobs tour. This is the president of the United States that has killed more jobs in America than I think any president in history, certainly in my lifetime. I think the only job he cares about is the one he’s got.”
— Texas Gov. Rick Perry, Aug. 19, 2011
The Texas governor speaks in no-nonsense, blunt sentences, and the statement above, made while campaigning in Florence, S.C., is a prime example.
Perry was a little high on the cost of the presidential bus — it was $1.1 million — but he is correct that the shell of the bus is from Canada. Still, only one company makes this kind of bus — and then it was retrofitted by a Tennessee company.
Perry does not mention that George W. Bush tooled around in the same type of bus in 2004 — or that the Secret Service ordered an identical bus for the GOP presidential nominee. We’re not sure what Perry (or whoever becomes the GOP nominee) would do if they want to have a bus tour in the final weeks of the 2012 campaign. Would he/she really reject the Secret Service’s advice to use the bus?
But what really caught our eye was the statement that President Obama “has killed more jobs” than any other president in history. That’s somewhat similar to a line former Massachusetts Gov. Mitt Romney trotted out about six months ago, for which he earned one Pinocchio, but Romney’s statement was much more cleverly and carefully worded — in effect, a reflex hammer compared to the sledgehammer of Perry’s statement.
Here’s what Romney said in February: “President Obama has stood watch over the greatest job loss in modern American history.”
“I do believe that the issue of global warming has been politicized. I think there are a substantial number of scientists who have manipulated data so that they will have dollars rolling into their projects. I think we’re seeing it almost weekly or even daily, scientists who are coming forward and questioning the original idea that man-made global warming is what is causing the climate to change. Yes, our climates change. They’ve been changing ever since the earth was formed. But I do not buy into, that a group of scientists, who in some cases were found to be manipulating this data.”
— Texas Gov. Rick Perry, Aug. 17, 2011
This is a pretty sweeping statement about global warming by the newly announced GOP candidate for president. Perry has long been a skeptic of the science behind global warming, having highlighted that stance in his book, “Fed Up!”
But these remarks, made in New Hampshire on Wednesday, seem to take his skepticism to a new level, with significant and specific allegations:
1. A substantial number of scientists have manipulated data so they will have dollars rolling into their projects.
2. Almost weekly or even daily, scientists are coming forward and questioning the original idea that man-made global warming is what is causing the climate to change.
How true is this?
The question of whether humans have contributed to climate change in recent years has generated increasing skepticism among the American public, especially as proposals to deal with the problem, such as reducing carbon emissions, have come with high price tags. But Perry is wrong to suggest that that skepticism has gained strength among scientists.
“Well, I think the one thing we have to do is reject the new normal level of spending under the Obama administration, because President Obama amped up spending to never-seen-before levels. . . . I mean, one example I'll give you is, we had one employee at the federal Department of Transportation that made $170,000 a year at the beginning of the recession. We had the trillion-dollar stimulus, and 18 months into the recession, we had 1,690 employees making over $170,000. Government has really been growing at — a lot of largesse, but the people in the real world aren’t. And that’s what has to change. Government has no conformity at all with the real world.”
— Rep. Michele Bachmann (R-Minn.), Aug. 14, 2011
By popular demand, we are going to vet a statement in the column that we had previously discussed in an online chat. We probably did not do it full justice then, and Bachmann continues to say it — including on the Sunday morning TV shows this past weekend. A number of readers sent e-mails curious to know the truth, so we are happy to oblige.
On the surface, the fact appears astonishing — a huge increase in big-paying government jobs under Obama. But this is one of those statements one has to unpack very carefully, because Bachmann uses what is essentially a correct statistic regarding government salaries in a very misleading way.
Note that although the GOP presidential aspirant starts out by talking about the “never-seen-before levels” of spending under Obama and then mentions “the trillion-dollar stimulus,” the example she cites — the number of Transportation Department employees making more than $170,000 — uses the metric of “the beginning of the recession.” There’s a reason for that phrase: The recession started in December 2007, 13 months before Obama became president.
Well, goodbye Tim Pawlenty, hello Rick Perry.
The Texas governor announced that he is running for president on Saturday, just hours before the Ames Straw Poll in Iowa that ended Pawlenty’s presidential aspirations. As has been our custom, we will take a look at some of the assertions made in Perry’s announcement speech and then render a blended Pinocchio rating.
“Since June of 2009, Texas is responsible for more than 40 percent of all of the new jobs created in America. Now think about that. We’re home to less than 10 percent of the population in America, but 40 percent of all the new jobs were created in that state.”
This is a great-sounding statistic, and likely will form the core of Perry’s campaign against a presidency that thus far has negative job creation.
That was some collection of facts and statistics during the GOP debate in Iowa on Thursday night that aired on Fox News.
We’re going to take an instant stab at nine of the statements, and then perhaps come back next week with a more extended look at other assertions. We also will have a chat Friday morning at 11 a.m. in which we will take your questions on the debate, the debt ceiling or any other issues you want to raise.
Please join us for the discussion. We plan to host a chat at least every week, though the time will vary.
“Back in the days of John F. Kennedy, the federal government took up, along with the state and local governments, 27 percent of the economy. Today, government consumes 37 percent of the economy. We’re inches away from no longer having a free economy.”
— Former Massachusetts governor Mitt Romney
Romney gets his statistics essentially right, according to White House historical records (see table 15.5), but the numbers are missing context. In 1961, there was no Medicare and Social Security only made up about 2 percent of the overall economy (the Gross Domestic Product.) Excluding other payments to individuals and national defense, overall federal spending was also just 2 percent of the economy. (State and local spending was nearly 9 percent of the economy.)
“What we saw last week is the markets unfortunately agreed with me. Because the markets saw what happened in Washington when Obama got a $2.4 trillion check. And one thing you learned is you can't fool the markets. …We just raised the debt ceiling and added $2.4 trillion more to the debt.…The reason why they [Standard & Poor’s] lowered the rating is because we dumped another $2.4 trillion in debt on the backs of Americans of the next generation.”
— Rep. Michele Bachmann (R-Minn.), August 8, 2011
Rep. Michele Bachmann’s rally in Council Bluffs, Iowa, earlier this week (full video clip below) is a good demonstration of the passion the GOP presidential aspirant brings to her speeches and the enthusiasm she generates from her supporters.
But does her story about the debt limit — and her opposition to raising it — match the facts? Did markets decline because the federal debt ceiling was increased by $2.4 trillion? And did Standard & Poor’s lower the government’s credit rating because the debt ceiling was increased?
Bachmann starts out by perpetuating a myth by saying that President Obama received “a $2.4 trillion check.” Congress has already committed to spend much of this money, under budgets passed in previous years. Lifting the debt ceiling merely means that the Treasury now has the authority to make good on bills that are coming due.
The Fact Checker was off Wednesday, celebrating his birthday. But since the column has now run for six months, it seems an appropriate moment to look at some numbers.
Readers frequently ask: Do you rate more Republicans than Democrats? (Or vice versa). Which party gets the most Pinocchios? Which candidate does? We frankly had no idea until we sat down last week and did some calculations.
Many of the columns are generated by what’s in the news. There are some days when we walk in the office having no clue what we will write about, but calm in the knowledge that somewhere out there, there’s a statement waiting to be fact checked. We do not consciously choose to focus on one party or another, believing it will all even out in the end.
The hardest part about the job is deciding how many Pinocchios need to be awarded. Since we do not use ½ Pinocchios, there are a bunch of 2’s that could have been 3’s — or vice versa. (The 1’s and 4’s are easier to spot, though readers sometimes vehemently disagree.) We admit the process is somewhat subjective. Not all of the columns result in Pinocchios either.
Looking back at the past six months, we think we have been relatively consistent. For instance, last week we gave Sen. Barbara Boxer (D-Calif.) three Pinocchios for revisionist history on the budget surplus. We were pleased to see that in March we similarly awarded former Bush administration budget director (and now Indiana Gov.) Mitch Daniels three Pinocchios for similar revisionism on why the budget surplus disappeared.
Let’s do the numbers!
“Of course a person has to be careful with statements that they make. I think that's true. And I think now there will be an opportunity to be able to speak fully on the issues. I look forward to that.”
— Rep. Michele Bachmann, responding to a question about being “a flake” on “Fox News Sunday,” June 26, 2011
Rep. Michele Bachmann (R-Minn.), who on Monday formally announced her candidacy for the GOP presidential nomination, is a terrific public speaker with a long history of playing fast and loose with the facts. (For a list of our recent articles on Bachmann’s statements, click here.)
Monday’s address, given in Waterloo, Iowa, was mostly a vision statement, with only a few assertions worth double-checking. We will take a look of those — as well as more dubious statements she made on the Sunday morning news shows in advance of her speech.
Announcement speech, June 27
“Five decades ago in America, we had less debt than we have today. We had $300 billion or less in debt. A gallon of gasoline was 31 cents and owning a home was part of the American dream. Today, that debt stands at over $14 trillion. A gallon of gas is outrageously expensive and unfortunately, too many millions of Americans know what it is to have a home that's in foreclosure.”
Context matters a lot when you use numbers. In this case, Bachmann creates a false impression by using figures from a half-century ago without adjusting for inflation or other factors.
“When hundreds of billions of dollars of our money is being spent, it can’t be in secret and I think the Federal Reserve has become so important to our economy and it affects our lives in so many ways that we the American people have the right to know how our money is being spent. …We should repeal the Dodd-Frank bill…This economy is going to stay mired in a bad economy until we bring the Fed under control and we repeal the Dodd-Frank bill ”
— Former House speaker Newt Gingrich (R-Ga.), in a new campaign video titled “Who Got the Money?”
With exquisite timing, former House speaker Newt Gingrich released a new presidential campaign video titled “Who Got the Money?” on the same day reports surfaced that Gingrich had a second line of credit at Tiffany and Co., this one valued at $500,000 to $1 million.
The two-minute video (embedded at the end of the column) is a somewhat confusing attack on the Federal Reserve, which appears to be part of an attempt by Gingrich to appeal to supporters of Rep. Ron Paul (R-Tex.), a fierce critic of the Fed.
In the video, Gingrich also calls for the repeal of the Dodd-Frank law, the financial regulatory overhaul that was signed into law less than a year ago. In the video, Gingrich never quite makes clear the reasons for repeal, besides an animus for the Democratic lawmakers whose names adorn the bill, Sen. Chris Dodd (Conn.) and Rep. Barney Frank (Mass.)
The video, which closes with an appeal to demand an audit of the Fed, leaves the impression that the Fed has not disclosed what it did to shore up financial institutions during the 2007-2008 financial crisis. Is that the case?
On the Federal Reserve website, there’s a section titled “Usage of Federal Reserve Credit and Liquidity Facilities.” As the website explains, the page provides “detailed information about the liquidity and credit programs and other monetary policy tools that the Federal Reserve used to respond to the financial crisis that emerged in the summer of 2007.”
“I'm Jon Huntsman, and I'm running for President of the United States.”
--Former Utah governor Jon Huntsman(R)
Former Utah governor Jon Huntsman delivered his presidential announcement speech Tuesday, and we were prepared to fact check it as we have the other presidential announcement speeches.
But not only was his speech fairly content-free, it was also fact-free. No slashing attacks on the president to check. No hyperbolic claims to debunk. No strange statistics seemingly conjured out of thin air.
This certainly is in keeping with Huntsman’s strategy of being an unconventional candidate. Perhaps the former envoy to China believes that facts spouted by politicians are so devalued these days that it doesn’t make much sense to use them? Anyway, here are a few things we found.
“We are the most productive society on earth. We have the finest colleges and universities.”
The Huntsman campaign says these lines are just “figures of speech” and are not intended to be factual.
“While we've been seeing the liberals in the last few weeks trying to scare Americans about Medicare, and especially senior citizens, what's been ignored is President Obama's plan for senior citizens regarding Medicare. … And do you know what the president's plan is? This hasn't been talked about very much. The president's plan for senior citizens is Obamacare. We all think for our senior citizens that somehow Medicare is going to go on. And I think very likely -- and I'm speculating -- I think very likely what the president intends is that Medicare will go broke, and then ultimately that answer will be Obamacare for senior citizens.”
--Rep. Michele Bachmann (R-Minn.), June 17, 2011
It’s hard to know what to make of this comment by Rep. Michele Bachmann, made during her speech last Friday to the Republican Leadership Conference in New Orleans. She also repeated elements of this claim during an interview with CNN (there is a clip at the end of this column.) “I think the president’s plan is Obamacare for senior citizens,” Bachmann told CNN. “They don’t want Obamacare; they want Medicare, and that’s why I am committed to making Medicare solvent.”
In her speech, the presidential aspirant also made the debunked assertion that regulations are “$1.7 trillion burden on our job creators.” We had examined this several months ago and the Congressional Research Service in April also critiqued the study that is the source of this statistic. Bachmann also repeated the incorrect claim that President Obama took $500 billion “out of Medicare to give it to younger people.”
But Bachmann’s claim that the president’s plan is to replace Medicare with “Obamacare” is what most intrigued several readers. One should always be wary of a politician when he or she says they are “speculating,” since that is an apparent license to throw facts to the wind. A spokeswoman for the Bachmann presidential campaign did not respond to a request for clarification, so we will have to parse this language and her CNN interview ourselves.
The current Medicare system, in place since the mid-1960s, is essentially a government-run health care program, with hospital and doctors’ fees paid by the government, though beneficiaries also pay premiums for some services as well as deductibles and coinsurance.
“Senior citizens get this more than any other segment of our population, because they know in Obamacare the president of the United States took away $500 billion -- a half-trillion dollars -- out of Medicare, shifted it to Obamacare to pay for younger people. And it's senior citizens who have the most to lose in Obamacare."
— Rep. Michele Bachmann (R-Minn.) at the GOP debate, June 13, 2011
“Obamacare takes $500 billion out of Medicare and funds Obamacare.”
— Former Massachusetts governor Mitt Romney, at the debate
The two Republican aspirants perceived to have performed the best in the GOP debate broadcast Monday by CNN made strikingly similar claims about the impact of the new health care law on Medicare. Bachmann, as usual, made her assertion in a more colorful and memorable statement.
Their comments are an echo of the politically effective — but misleading — charge the GOP made against Democrats in 2010 midterm elections — that the health care law “cut” $500 billion from Medicare. In this case, the candidates are suggesting President Obama is robbing Peter to pay Paul.
Several readers have also asked us to explain why the House Republicans retained these $500 billion in “savings” in their Medicare reform bill, and how that would be different than Obama’s plan.
Essentially, the federal budget is like a funhouse mirror so it looks completely different depending on where you stand. We will try to make this all clear without getting too much in the budgetary weeds.
First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as “the baseline”) and the changes the law makes to reduce spending. (Look at slide 15 of this nifty tutorial on the law’s impact on Medicare by the Kaiser Family Foundation to see a chart of the year by year savings.)
That was some collection of facts and statistics during the GOP debate in New Hampshire on Monday night that aired on CNN.
We’re going to take an instant stab at some of them, and then perhaps come back later this week with a more extended look at other assertions. Depressingly, some of these we have heard before.
We will have to keep dinging the candidates till they get their facts right.
“The CBO, the Congressional Budget Office, has said that Obamacare will kill 800,000 jobs. What could the president be thinking by passing a bill like this, knowing full well it will kill 800,000 jobs?”
— Rep. Michele Bachmann (R-Minn.)
We hadn’t heard this yarn much since we debunked it four months ago with three Pinocchios. But here it has popped up again.
“Cutting just 1 percent of overall federal spending for six consecutive years would balance the federal budget by 2017.”
— Former Minnesota governor Tim Pawlenty (R), June 7, 2011
Tim Pawlenty delivered on Tuesday what was billed a major economic speech, in an apparent effort to burnish his free-market credentials in the race for the GOP presidential nomination.
Speaking at the University of Chicago, the former Minnesota governor called for huge cuts in taxes — no income taxes at all for couples making less than $100,000 and no capital gains, dividend or estate taxes. At the same time, he called for cuts in government spending and a goal of achieving 5 percent growth in the gross domestic product — without providing many specifics of his policies to achieve this objective.
We will leave to others whether this is good economic policy, but we are interested in making sure the numbers add up or his facts are accurate. On that score, it is a less-than-stellar performance.
Let’s look at Pawlenty’s claims in the order he made them.
“Our health care system — thanks to Obamacare — is more expensive. And less efficient.”
The health care law does not take full effect until 2014, and yet Pawlenty is already blaming it for higher costs? There’s certainly debate about how effective the law will be in reducing costs, but this is really putting the cart before the horse. The administration has not even gotten doctors and hospitals to agree to its draft regulations for getting quality health care at less cost.
“I'm Mitt Romney. I believe in America. And I'm running for President of the United States.”
— Former Massachusetts governor Mitt Romney, June 2, 2011
Former Massachusetts governor Mitt Romney officially announced his run for the presidency last week with a speech in New Hampshire that evoked a Reaganesque faith in America while hitting President Obama hard for his handling of the flagging economy.
As is typical of such speeches, there was a heavy sprinkling of “facts,” some of which we have cited for Pinocchios in the past. (Note to the campaign: we find this depressing.) Candidates must believe these facts are “too good to check.” Other facts Romney cited have only a tenuous connection to reality.
So, let’s dig deeper, examining the claims in the order in which Romney said them.
“When he took office, the economy was in recession, and he made it worse, and he made it last longer.”
With the unemployment rate ticking up in May , to 9.1 percent, the economy is definitely a weak spot for Obama. But Romney is stretching it here when he suggests that Obama has made the recession “worse…and made it last longer.”
“If I become president, I will repeal ‘Obamacare.’ My bill was 70 pages. His bill is 2,700 pages. In those extra 2,630 pages he’s doing a lot of stuff that is just devastating to the health care system in this country. He’s wrong.”
--Former Massachusetts Gov. Mitt Romney (R), May 31, 2011
Mitt Romney has a problem—the sweeping universal health care bill he signed into law five years ago. President Obama has cited “Romneycare” as a model for his own health care law, making it a political albatross for the former Massachusetts governor in the contest to win the GOP presidential nomination in 2012.
So Romney has tried his best to emphasize that the law he signed was different and unique to Massachusetts and should not have been considered a template for the rest of the country. Nevertheless, our friends at PolitiFact.com have put together a clever quiz that demonstrates just how difficult it is to tell the difference between the two laws.
This week on NBC’s “Today” show, Romney asserted that the difference was evident in the sheer bulk of the bills — a mere “70 pages” for his law and a behemoth “2,700 pages” for the president’s law. This is an old politician’s trick — lots of pages suggest something nefarious is going on — but we decided to dig deeper and see whether this is even a relevant apples-to-apples comparison.
Obama’s law was actually two bills: a Senate version and a reconciliation bill that made changes to accommodate concerns of the House. The complicated procedure became necessary after the Democrats lost their 60-seat, filibuster-proof majority in the Senate, but it means that the bill was bulkier than the usual bill in which lawmakers had settled differences in a House-Senate conference.
“Barack Obama promised that spending 800 billion dollars on a pork-filled stimulus bill would keep unemployment under 8 percent. He promised that bailouts for well-connected businesses were a good deal for the country. He promised that a federal takeover of health care would keep costs under control. And hard as it is to believe, he even promised the deficit would be cut in half in his first term!”
— Former Minnesota governor Tim Pawlenty (R), May 23, 2011
“T-Paw,” the former Minnesota governor, threw his hat into the ring Monday for the GOP presidential nomination. The paragraph above comes from his announcement speech, and it struck us as a pretty fair summary of the Republican indictment against President Obama’s reelection.
“A litany of broken promises . . . a failed, pork-laden stimulus bill . . . soaring unemployment . . . bailouts for the undeserving . . . a government takeover of health care . . . out-of-control deficits!”
So let’s dig beneath these sentences to find out what they are based on and what truth there is to the assertions.
“Barack Obama promised that spending 800 billion dollars on a pork-filled stimulus bill would keep unemployment under 8 percent.”
This mixes up a number of complaints about Obama’s stimulus plan, but its core — that Obama “promised” his plan would keep unemployment under 8 percent — is false. Obama promised no such thing. Nor did anyone else in his administration.
Updated 7:00 p.m.
“With the permission of Speaker Gingrich, we can confirm that his Tiffany Time Account has a zero balance and that all payments were made in a timely manner.”
— Carson Glover, director of worldwide media relations at Tiffany & Co.
We have an update and new information to share on former House speaker Newt Gingrich (R-Ga.)’s purchases at Tiffany & Co. (Apologies in advance to readers who believe the Fact Checker is dealing with trivia in exploring this issue in such depth.)
Glover, a Tiffany spokesman, provided us Tuesday afternoon with the following statement, which we will quote in full.
Tiffany & Co. offers two forms of credit. The first is a Tiffany revolving credit card agreement with state-specific interest rates.
The second is a Tiffany Time Account. To meet competitive conditions, Tiffany makes Time Accounts available to revolving credit card customers who wish to purchase engagement rings over $1,000 or other merchandise valued over $5,000. On a transactional basis, this program offers interest-free borrowing for up to one year for credit-worthy Tiffany customers.
All customer information is confidentially held at Tiffany & Co. With the permission of Speaker Gingrich, we can confirm that his Tiffany Time Account has a zero balance and that all payments were made in a timely manner.
Let’s now deconstruct that and explain what it means. The Gingrich campaign will not comment, so there are several ways to interpret this — none of which suggest that Gingrich is as “frugal” as he claims.
First of all, several readers wrote us to say that they had purchased an engagement ring on a 12-month, no-interest plan. (We had overlooked a clause in the current Tiffany credit agreement that allows for no interest charges for some items at the point of sale.) That is clearly an option, but it did not really explain the fact that Callista Gingrich filed two years of consecutive reports — in 2005 and 2006 — showing she and Gingrich owed $250,001 to $500,000 to the jewelry company.
Updated 7:00 p.m.
NEWT GINGRICH: You know, we don't do elaborate things.
BOB SCHIEFFER: Did you owe a half-million dollars to a jewelry company at one point?
GINGRICH: We had a revolving fund.
SCHIEFFER: Well, what does that mean?
GINGRICH: It means that we had a revolving fund. It was a –
SCHIEFFER: I mean, who buys a half-million dollars worth of jewelry on credit?
GINGRICH: No. It's a — go talk to Tiffany's. It's a standard, no-interest account.
SCHIEFFER: How long did you owe it?
GINGRICH: I have no idea, but it was paid off automatically. We paid no interest on it. There was no problem with it. It's a normal way of doing business.
SCHIEFFER: Well, I mean, it's very odd to me that someone would run up a half-million-dollar bill at a jewelry store.
GINGRICH: Well, go talk to Tiffany's. All I'm telling you is we are very frugal. We, in fact, live within our budget. We owe nothing.
— Exchange on CBS’s “Face the Nation,” May 22, 2011
Former House Speaker Newt Gingrich’s claim of being “very frugal” reminded us of this Reliable Source item from 1999:
When Newt and lady love Callista Bisek shared dinner at the Old Angler's Inn in Potomac Saturday night, he ordered the priciest item on the wine list — a $450 bottle of 1983 Chateau Latour. That's twice the price of the restaurant's next most expensive wine — a $220 Opus One Baron de Rothschild 1996 from California's Mondavi Vineyard.
Unfortunately for Gingrich, he overpaid — the 1983 was a mediocre year for the Latour vineyard. But perhaps he learned his lesson from overpaying for so-so wine and now he’s frugal?
We’re not sure. But we are also puzzled by his claim that he had a “standard, no-interest account” at Tiffany & Co. The disclosure filings that Gingrich’s third wife, Callista, provided to the House of Representatives when she worked for the Agriculture Committee listed debts to Tiffany of $250,001 to $500,000 on a “revolving charge account” for two straight years. (The disclosure forms also show debts of $15,001 to $50,000 to American Express.)
Would Tiffany really charge no interest for that period of time on that amount of money?
As Gingrich urged, we tried first to talk to Tiffany. We e-mailed and called three different spokesmen in the New York headquarters. One spokeswoman curtly said they were aware of Gingrich’s comments and they would try to respond. But so far, we have received no answer or explanation.
“Any [Democratic] ad which quotes what I said Sunday is a falsehood and because I have said publicly, those words were inaccurate and unfortunate.”
— Former House speaker Newt Gingrich (R-Ga.), May 17, 2011
After denouncing the House Republican budget plan for Medicare as “right-wing social engineering” and “radical change” on NBC’s “Meet the Press” on Sunday, former House speaker Newt Gingrich (R-Ga.) found himself on the defensive and his nascent presidential bid in shambles.
Within two days, he popped up on Fox’s “On the Record” to explain to host Greta van Susteren that he had apologized to Rep. Paul Ryan (R-Wis.), the main author of the plan.
Ryan, in a radio interview, confirmed that. “Basically, he called and apologized. And I accepted his apology,” Ryan told Mark Levin. “I think he understands that this is an inaccurate characterization, I think he just misspoke.”
But does Gingrich really believe that? In the Fox appearance and in other venues, Gingrich never really took back the words he had said about the Ryan plan. Even as he appeared to apologize, he bolstered the idea that he had significant problems with Ryan’s plan.
Speaking to van Susteren, Gingrich said he made the “mistake” of answering a “hypothetical question” and a mistake with “some of the words I used.” But then he added: “But I was trying to say something that's really important.”
We acknowledge this issue does not easily fit the definition of a “fact” that can be checked, but it is an excellent example of how a politician can give a potentially misleading impression though words and body language. So let’s roll the videotape.
“Meet the Press” host David Gregory asked Gingrich a simple question: “Do you think that Republicans ought to buck the public opposition and really move forward to completely change Medicare, turn it into a voucher program where you give seniors some premium support and — so that they can go out and buy private insurance?”
“The reason that I came here tonight to announce that I am a candidate for president of the United States is because I think if you apply the right principles to achieve the right results, that we can win the future together.”
--Former House speaker Newt Gingrich (R-Ga.), May 11, 2011
Newton Leroy “Newt” Gingrich is back!
The former House speaker threw his hat in the presidential ring Wednesday with an appearance on Fox’s “Sean Hannity Show.” It promises to be an interesting trip.
The Fact Checker covered Gingrich during his speakership, which lasted a tumultuous four years in the late 1990s, and by turns found him to be fascinating and frustrating. Gingrich speaks with such conviction and certainty, but every assertion he made needed to be checked and rechecked. Sometimes you couldn’t quite be sure if he was just making it up on the spot.
Take his appearance on Hannity’s show, for instance. In speaking about how the “elite media” never give conservative politicians a break, Gingrich related the following anecdote about Ronald Reagan’s acting career: “Ronald Reagan didn't get up every morning and say, gee, I wish they like me. Ronald Reagan had been a movie actor. Only had one movie, ‘King's Row,’ get a good review from the New York Times. Only one. But he had a pretty good career because it turned out that middle class, Middle America liked his movies.”
That’s a great story, based on such a specific fact. But, as you will see below, it turns out to be completely untrue. The New York Times panned “King’s Row”—but liked other Ronald Reagan movies.
There were so many such gems in Gingrich’s appearance that we will pick out the choice comments that cry out for fact-checking. We reached out to two of his spokesmen with questions and requests for documentation, but did not get a response. (A failure to respond to fact-checking queries is a sign of a presidential campaign still getting its act together.)