The Fact Checker: Economy

Newt Gingrich’s claim of a ‘pre-Obama norm’ gas price

“When I was speaker for four years, the average price was $1.13. When Obama was sworn in, the average price was $1.89. So trying to get to $2.00 to $2.50 is closer to the historic norm. Think of it as a pre-Obama norm.”

— Former House speaker Newt Gingrich, Feb. 23, 2012

  “We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people couldn’t pay their mortgages because of $4-a-gallon gasoline.”

— Former senator Rick Santorum, Feb. 27, 2012

We asked readers for examples of gassy rhetoric on gasoline prices, and we certainly got some. This Gingrich example, made during an appearance in Kennewick, Wash., is priceless.

 We will look at that, as well as Santorum’s interesting new theory on why the United States suffered an economic crisis in 2008.


The Facts

 Earlier this week, we noted House Speaker John Boehner’s (R) comment that gasoline prices had doubled during Obama’s term. This is technically correct but misleading because oil prices were artificially low because of the economic crisis.

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Obama and the stimulus: A reader’s research sheds new light

(Chip Somodevilla/GETTY IMAGES)

Earlier this week, we focused on a statement by Mitt Romney that “three years ago, a newly-elected President Obama told America that if Congress approved his plan to borrow nearly a trillion dollars, he would hold unemployment below 8 percent.”

We had examined this issue before, and were prompted to look at it again by a reader who had publicly challenged Romney to prove that Obama ever said this. We gave Romney Three Pinocchios for his claim, largely because this “eight percent” figure stemmed from a chart in a paper written before Obama took office, not Obama’s own words.

However, several readers wrote that we were being overly narrow in our interpretation and thus were too critical of Romney. And one reader supplied his own research to prove his point.

“I think your column usually is very good and generally even-handed,” wrote Jon Hoffman. “However, I think the effort to debunk the claim about the stimulus and unemployment is perhaps a bit too ‘legalistic.’ It may be true that the original projection was in a paper by two people who were not yet Obama administration officials, and if that were all there was to it, your case (and that of Chuck Smith) would be air tight.”

 But then he supplied some YouTube clips that show that Obama “certainly alluded to such an effect.” We find his research interesting and we would like to share it with our readers. As always, we welcome thoughtful reader contributions and seek to highlight them whenever possible.

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A guide to dueling claims about the Obama budget

(Susan Walsh/AP)

“When you look at the budget, you’ll see $1.9 trillion worth of new tax revenue and $1.5 trillion worth of more spending.”

 --House Speaker John Boehner (R-Ohio), Feb. 15, 2012

 “The president’s budget has $1 of revenue for every $2½ of spending cuts.” 

 --White House Chief of Staff Jack Lew, Feb. 12, 2012

Are these guys even talking about the same document?

 All presidential budgets are political documents—and it is easy to play politics with numbers. That’s why such a gap in the rhetoric is even possible. Each side can make a case for their spin, though much of it is dubious.

 Let’s take a look at how they do it.


The Facts

 First of all, notice that Boehner and Lew are only speaking about one side of the ledger--either spending increases or spending cuts. The Republicans then emphasize the tax increases, while the White House deemphasizes them.  We also are working with 10-year budget forecasts, even though the budget is rewritten every year, which increases the chance for mischief.

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President Obama and the defense budget


“Over the next 10 years, the growth in the defense budget will slow, but the fact of the matter is this: It will still grow, because we have global responsibilities that demand our leadership. In fact, the defense budget will still be larger than it was toward the end of the Bush administration.”

— President Obama, speaking at the Pentagon , Jan. 5, 2012

We’ve been wondering about this quote every since the president said it six weeks ago, when he spoke about the Defense Strategic Review at the Pentagon. We had previously questioned one of the statements in his speech, but we were not able to fully check this one until we could actually see the numbers in the White House budget proposal for the 2013 fiscal year released Monday.

We take no position on the right level for the defense budget. But, with numbers in hand, let’s examine the president’s assertions and whether there has been any sleight of hand. Warning: Lots of budget numbers ahead.

The Facts

Under the debt ceiling deal reached by the president and congressional leaders last summer, the defense budget must be cut by $487 billion over the next 10 years. Additional cuts may be mandated because a deficit-cutting congressional committee could not reach agreement, but since all concerned say they want to avoid that scenario, let’s keep our focus on the initial round of defense spending reductions.

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Jack Lew’s misleading claim about the Senate’s failure to pass a budget resolution


“But we also need to be honest. You can’t pass a budget in the Senate of the United States without 60 votes and you can’t get 60 votes without bipartisan support. So unless Republicans are willing to work with Democrats in the Senate, Harry Reid is not going to be able to get a budget passed. And I think he was reflecting the reality of that that could be a challenge.”

--White House Chief of Staff Jack Lew, on CNN’s “State of the Union,” Feb. 12. 2012

Newly-named White House Chief of Staff Jack Lew was not only recently budget director for President Obama; he was also the budget director for former President Bill Clinton. So when he speaks about the budget process, you would think he speaks with authority.

That’s why his comment on CNN jumped out at us. He also said something similar on NBC’s “Meet the Press,” when asked about the number of days since Senate Democrats passed a budget plan (1,019). Lew’s response: “One of the things about the United States Senate that I think the American people have realized is that it takes 60, not 50, votes to pass something.”

Given that President Obama unveils his budget on Monday—and the congressional budget process is so complex—it seems like it is time for a refresher course. Let’s examine if Lew is being misleading here.

The Facts

The term “budget” is used rather loosely in Washington. The White House every year proposes a budget, but that document is at best a political statement and wish list, since none of those proposals will take effect unless Congress enacts them into law. The House and Senate every spring are supposed to pass a budget resolution, which also does not have the force of law but guides the amount of money available to the Appropriations Committees, in addition to setting parameters for tax and entitlement legislation.

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President Obama’s Google Plus ‘hangout’ claims about engineering demand

(Saul Loeb - AFP/Getty Images)

"There's a huge demand around this country for engineers. . . . Where you’re seeing a lot of specialized demand is in engineering that’s related to the high-tech industries.”

-- President Obama, during a Google Plus video conference, Jan. 30


Obama’s comments came in response to a question from Fort Worth resident Jennifer Wedel, who asked why the government has extended and continues to issue H-1B visas when people such as her engineer husband, Darin Wedel, can’t find work.

The president said that not all engineering fields have equal demand at the moment but that “what the industry tells me is that they don’t have enough highly skilled engineers” for work in the high-tech domain.

Obama seemed perplexed after Jennifer mentioned that her husband was a semiconductor engineer. He asked her to forward his resume and said he was interested in “finding out exactly what’s happening there.” We decided to look into the matter as well. 

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President Obama’s claim that some wanted to let the auto industry die


“It’s good to remember that the fact that there were some folks who were willing to let this industry die. Because of folks coming together, we are now back in a place where we can compete with any car company in the world.”

--President Obama, at the Washington Auto Show, Jan. 31, 2012

“On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen.”

--Obama, in the State of the Union address, Jan. 24, 2011

The apparently successful rescue of the auto industry is obviously going to play a central part in President Obama’s reelection narrative. Vice President Biden put it this week: “Osama bin Laden is dead and General Motors is alive.”

As our colleague Charles Lane pointed out recently, this effort has sometimes included what he called “an unfortunate, and remarkably ungracious, tendency to distort the record” of George W. Bush on the auto industry rescue. After all, Bush loaned billions of dollars to GM and Chrysler (with strings attached), in opposition to much of his party, so Obama was not confronted with an auto-industry collapse in his first days in office.

The president has also demonstrated a fondness for using rhetorical straw men in his speeches. So we wondered: Did anyone really say the auto industry should simply die?

The Facts

Many reporters have assumed that the president’s words were aimed at his likely GOP rival, former Massachusetts governor Mitt Romney, who famously (or infamously) penned an opinion article that was titled: “Let Detroit Go Bankrupt.” The basic thrust of the article was that the companies should go through a managed bankruptcy, mainly to shed labor costs, rather than just get a “bailout check.”

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President Obama’s small business bobble

“I elevated the SBA [Small Business Administration] administrator to a Cabinet level position so that they are talking directly to me, so that there is no one in between me and the SBA when they are advocating on behalf of small business. …And [even after a reorganization] I’ll still have an SBA administrator in my Cabinet who’s advocating directly for small businesses.”

--President Obama, in the Google Plus Hangout/YouTube interview, Jan. 30, 2012

During President Obama’s live video chat on Google Plus, Ramon Ray of Montclair, N.J. expressed concern about the administration’s plans to fold the Small Business Administration into a super-department that includes the business functions of the Commerce Department, the U.S. Trade Representative’s office and three other agencies.

The president gave a reassuring answer. (Look at 14:00 mark). But his remarks were not accurate, judging from the administration’s own briefings on the plan.

The Facts

As it happens, SBA administrator Karen Mills for the first time attended a Cabinet meeting as a full-fledged Cabinet member on Tuesday. In remarks before the media, Obama said: “I’m very pleased that we’ve got Karen Mills here, who has participated in our meetings before, but is now an official member of the Cabinet.”

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A fishy statistic in the GOP State of the Union response

“One in five men of prime working age and nearly half of all persons under 30 did not go to work today.”

— Indiana Gov. Mitch Daniels, in the GOP response to the State of the Union address, Jan. 24, 2012

A loyal reader wrote us about this line in Daniels’ speech after the State of the Union speech given by President Obama, expressing surprise that half of the under-30 population did not go to work. (She assumed he must even be counting babies.) It took us a while to track down the facts in this case, but it turns out to be an interesting tale of a statistic that, in the end, does not really say much.

The Facts

Something seemed fishy because the first part of Daniel’s quote refers to 20 percent of “men in prime working age” not going to work, while adding that a much higher number — nearly 50 percent — of those under 30 not having jobs. That’s a rather large gap that should immediately raise flags.

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Fact-checking the 2012 State of the Union speech

A State of the Union address is often difficult to fact-check, no matter who is president. The speech is a product of many hands and is carefully vetted, so major errors of fact are so relatively rare that they sometimes can become big news (think of George W. Bush’s “sixteen little words” about Iraq seeking uranium in Niger). At the same time, State of the Union addresses are very political speeches, an argument for the president’s policies, so context (or the perspective of opponents) is often missing.

Here is a guide through some of President Obama’s more fact-challenged claims, in the order in which he made them. As is our practice with live events, we do not award Pinocchio rankings, which are reserved for complete columns.

“For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.”

The killing of bin Laden, which Obama used to open and close his speech, is an achievement that few partisans would quibble with. But the story about Iraq and Afghanistan is much more muddled.

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The Obama campaign’s suspect claim about Romney’s role in store closings

(Charles Dharapak/AP)

“Romney closed over a thousand plants, stores and offices, and cut employee wages, benefits and pensions. He laid off American workers and outsourced their jobs to other countries.  And he and his partners made hundreds of millions of dollars while taking companies to bankruptcy.”

-- Stephanie Cutter, Obama campaign memo titled “Romney’s Economic Record: Profit at Any Cost,” Jan. 13, 2012


The game of numbers between the Obama and Romney campaigns is getting a bit silly. Romney started it by making the untenable claim that he helped create more than 100,000 jobs, a figure that included jobs created by companies long after Romney’s involvement had ended in the businesses. (In the recent debate, he modified his statement to make it a tad more accurate.)

 Now, apparently believing that’s what good for the goose is good for the gander, the Obama campaign has upped the ante by blaming Romney for job losses and bad deals that took place after he stopped working at Bain Capital in early 1999 in order to run the Salt Lake City Olympics. As we will demonstrate, they use a technicality to accomplish this.

 We will examine the statement that Romney “closed over a thousand plants, stores and offices.”


The Facts

First of all, note that the statement starts with “plants” and then pads it with “stores and offices.” As far as we can tell, there are only handful of plants on this list – Ampad (two), GS Industries (two), Dade Behring (three). The big number on this list comes from store closings -- in particular 600 stores shut down by KB Toys after it filed for bankruptcy protection in 2004.  

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Mitt Romney and 100,000 jobs: an untenable figure


 “In the business I had, we invested in over 100 different businesses and net-net, taking out the ones where we lost jobs and those that we added, those businesses have now added over 100,000 jobs.”

— Mitt Romney, Jan. 7, 2012

Last week, when we first looked at the former Massachusetts governor’s claim that “we helped create over 100,000 new jobs,” his campaign provided a list that included the growth in jobs from three companies that it said Romney helped to start or grow while at Bain Capital: Staples (a gain of 89,000 jobs), The Sports Authority (15,000 jobs), and Domino’s (7,900 jobs).

 As we noted,  “This tally obviously does not include job losses from other companies with which Bain Capital was involved — and are based on current employment figures, not the period when Romney worked at Bain.”

Glenn Kessler live chatted with readers on this topic. Read the chat transcript now.

 In Saturday’s ABC News-Yahoo debate, Romney expanded on the list: “There’s a steel company called Steel Dynamics in Indiana, thousands of jobs there; Bright Horizons Children's Centers, about 15,000 jobs there; Sports Authority, about 15,000 jobs there, Staples alone, 90,000 employed. That's a business that we helped start from the ground up.”

 Last week, when we looked at this 100,000 figure, we evaluated it along with Romney’s claims about President Obama’s job creation figures, which overall earned One Pinocchio. Earlier, we had ruled that it was all but impossible to prove or disprove Romney’s claims on job creation. But in light of Romney’s comments during the debate and some additional research, we have come to a new assessment.

The Facts

By all accounts, Romney was a highly successful venture capitalist. While running Bain Capital, he helped pick some real winners, earning his investors substantial returns. High finance is a difficult subject to convey in a sound bite, so Romney evidently has chosen to focus on job creation. 

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Romney vs. Obama on job creation


“And I'm very happy in my former life; we helped create over 100,000 new jobs. By the way, we created more jobs in Massachusetts than this president’s created in the entire country. So if the president wants to talk about jobs, and I hope he does, we’ll be comparing my record with his record and he comes up very, very short.”

— Mitt Romney, Jan. 3, 2012


It’s a new year, and we already have new claims about job creation. The Romney campaign was sufficiently proud of this quote, made on “Fox and Friends,” that it blast-e-mailed it to reporters.

 As we have mentioned before, the notion that a president – or particularly a governor – can magically create jobs with a set of policies is a bit of a stretch. Broadly speaking, presidential policies can certainly have an impact, but even a president is at the mercy of  the business cycle. Obama became president in the midst of the worst recession in memory, so obviously that is going to be a drag on his “job-creation record.”


The Facts

 The Romney campaign provided a link to Bureau of Labor Statistics data showing that during Romney’s four-year term as Massachusetts governor, the number of jobs went up 61,000. By contrast, the number of jobs under Obama has dropped by 1.86 million.  

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Nancy Pelosi’s misfire on job and tax-cut claims


“The payroll tax cut that the president proposed would put $1,500 in the pockets of 160 million Americans. The unemployment insurance extension is not only good for individuals, it has macroeconomic impacts. As the Macroeconomic Advisers have stated, it would make a difference of 600,000 jobs to our economy.”

— House Minority Leader Nancy Pelosi (D-Calif.), Dec. 15, 2011

With the days ticking toward the end of the year, Democrats and Republicans have been battling over the best way to extend a payroll tax cut and unemployment insurance for the long-term unemployed.

In a news conference Thursday, appearing to look at notes, Pelosi laid out her case for swift action. How well did she make it?

The Facts

Pelosi cited two key figures — how much money the tax cut would bring to working Americans and how many jobs would be created from extending unemployment insurance. She managed to mangle both.

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Obama’s Kansas speech: some suspect facts

“I mean, understand, it's not as if we haven't tried this theory. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century.”

 -- President Obama, Dec. 6, 2011


Channeling his inner Teddy Roosevelt, President Obama on Tuesday gave a feisty speech in Osawatomie, Kan., that sought to rebut Republican arguments that he is waging class warfare. He argued that the issue was one of fairness for the broad middle class, drawing repeated contrasts to the presidency of George W. Bush.

 We’ll leave the politics to others, but how accurate were some of his facts?


 “I mean, understand, it's not as if we haven't tried this theory. Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class: things like education and infrastructure, science and technology, Medicare and Social Security.”


Inserting the words “for the wealthy” was interesting phrasing by the president, since he suggests these tax cuts were intended to benefit only the rich.  

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Revisiting Romney’s ‘deceitful, dishonest’ ad about Obama

“Senator McCain's campaign actually said, and I quote, ‘if we keep talking about the economy, we're going to lose.’”

— Then-Sen. Barack Obama, Oct. 16, 2008

We resisted writing about Mitt Romney’s first television ad when it was released just before Thanksgiving, on the grounds that the issue — whether the ad misquoted President Obama — had been thoroughly and quickly discussed. We sometimes also see little need to fact check items that have been already debunked by one political faction or the other.

 But readers have repeatedly asked us to weigh in, and the ad was once again in the news this week after a report in The New York Times by our former colleague Thomas Edsall quoted an anonymous “top operative” in the Romney campaign as defending the ad because “ads are propaganda by definition…. Ads are about hyperbole, they are about editing…. They are manipulative pieces of persuasive art.”

 Excuse us for appearing cynical, but Romney’s supposed adviser is simply stating a truth practiced by both political parties. We’ve seen plenty of Four-Pinocchio ads in our time, and this Romney ad does not make the cut.


The Facts

The ad opens with a headline: “On October 16, 2008, Barack Obama Visited New Hampshire.” Then grainy scenes flash by of Obama speaking as more headlines flash by, such as: “He Promised He Would Fix the Economy…. He Failed”

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The debt supercommittee: A guide to the rhetoric

(J. Scott Applewhite/AP)

"Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve.  We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.”

— Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), joint statement, Nov. 21, 2011


To no one’s surprise, the debt “supercommittee” on Monday officially gave up in its efforts to forge a bipartisan agreement. The process was magically designed to almost certainly fail, given the vast divide between the two parties on issues such as taxes and entitlement programs. In theory, Congress is now obligated to go forward with $1.2 trillion in cuts to discretionary spending, but the cuts do not take effect until January 2013 — meaning Congress gets time to adjust the numbers.

 Given all of the fingerpointing, here is a guide to some of the Pinocchio-laden rhetoric.

 “Simpson-Bowles worked for thousands of hours, bipartisan, Republican, Democrat, people outside of the Senate and elected politics. They came out and said in order to do a deal, you need $4 trillion and you need 2 trillion [dollars] of it as revenue.”

— Sen. John Kerry (D-Mass.), on Meet The Press, Nov. 20, 2011

Kerry is referring to the National Commission on Fiscal Responsibility and Reform, which was co-headed by Alan Simpson, a former GOP senator from Wyoming, and Erskine Bowles, former chief of staff to President Bill Clinton.  

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Did Texas improve air quality, lower emissions as much as Rick Perry claims? (Fact Checker biography)

Republican presidential candidate Texas Gov. Rick Perry speaks during a stop in Jackson, Miss. Thursday, Nov. 17, 2011. (Greg Campbell - AP)

“We cleaned up our air in Texas more than any other state during the decade of the 2000s. And no it wasn’t the EPA’s regulations. As a matter of fact, they tried to come into Texas after we cleaned up our air and take it over, and what they’ll do is just kill a bunch of jobs and won’t clean up the air at all. We lowered our ozone levels by 27 percent during the decade of the 2000s and we lowered our nitrogen oxide levels by 58 percent.”

— Texas Gov. Rick Perry, during a town hall speech in Derry, N. H., Sept. 30, 2011

Perry claims Texas topped the charts in terms of air-quality improvements, and his remarks suggest that the state knows how to clean up just fine without oversight from the Environmental Protection Agency, thank you very much.

We wondered where Perry found his data and how bad Texas was doing before he took office. We also wondered whether federal regulations really kill jobs — a subject the Post already covered this week.

The Facts

Perry cited data from the Texas Commission on Environmental Quality. The state agency calculates its ozone numbers based on a three-year average of the monitors that showed the fourth-highest eight-hour emissions concentration for each of the three years.

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