“Most Americans believe we’re heading in the wrong direction: higher deficits, chronic unemployment, a president who admits he can’t work with Congress. But he says he’s only had four years. That’s all Mitt Romney needed. He turned Massachusetts around, cut unemployment, turned the deficit he inherited into a rainy day fund, all with an 85 percent Democratic legislature. Some can’t live up to their promises. Others find a way.”
-- Narration from Mitt Romney campaign ad
This ad, titled “Find a Way,” compares the four-year terms of President Obama and Republican challenger Mitt Romney, who served as governor of Massachusetts from January 2003 until January 2007. It suggests the GOP candidate succeeded where his opponent supposedly failed: in preventing chronic unemployment, higher deficits and partisan gridlock.
The ad also quotes the president saying in a recent interview, “You can’t change Washington from the inside,” which suggests that Obama hasn’t lived up to his 2008 slogans of “change” and “yes we can.”
It’s interesting that the campaign video ignored Romney’s signature accomplishment as governor: overhauling the Bay State’s health-care system. Perhaps that’s because Democrats ended up using it as the model for the federal Affordable Care Act.
Regardless, let’s examine the two candidates’ records to determine whether the claims in this ad are correct. It’s a well-established fact that deficits grew under Obama and unemployment has remained stubbornly high. But did Romney truly cut the jobless rate in Massachusetts and turn a deficit into a rainy day fund, all while working with members of the opposite party?
Data from the Bureau of Labor Statistics shows that Massachusetts had an average unemployment rate of 5.3 percent in 2002, the year before Romney took office. The rate dipped to 4.8 percent during his final year as governor, which supports the notion unemployment fell during his tenure. Still, it is hard to credit all those jobs to Romney; a state is obviously affected by broader economic trends.
As for Obama, the nation experienced eight consecutive months of layoffs before he became president, with nearly 1.5 million jobs disappearing in just the two months before his administration began. Despite starting with that mess, the economy has added jobs at varying levels during 24 out of 33 months since the second half of his term began.
The seasonally adjusted national unemployment rate dropped from a high of 10 percent in October 2009 to 7.8 percent in September of this year, representing an improvement from the worst of times during Obama’s term. But it’s still at the same rate it stood at during the month he became president.
Again, the nation was hemorrhaging jobs when Obama took office, but the relatively high unemployment rate has lingered. This has provided the GOP with ammunition to make a case against the president.
The last budget during the George W. Bush administration led to a deficit of about $1.4 billion for the fiscal year 2009, but this also includes emergency spending from the start of Obama’s presidency. The annual gap has averaged about $1.3 trillion per year under Obama, according to the historic tables from the White House Office of Management and Budget.
Those deficits helped the public debt jump from $10.6 trillion to about $16.2 trillion since Obama took office, although some of that is due to the policies of previous administrations. (We explained how much blame both Bush and Obama deserve for this rise in a previous column).
As for Romney, the claim that he turned a deficit into a rainy day fund is problematic. It suggests he reversed a previous policy of deficit spending in order to build a surplus.
That’s not the case. Massachusetts, like most states, is required by law to balance its budget. It can’t just print or borrow money to pay for programs and services like the federal government does, so deficit spending isn’t really possible for the commonwealth.
Nonetheless, states often incur budget shortfalls when tax revenues come in lower than projected. This is what happened as Romney was taking office. He inherited a budget that the previous governor and legislature had balanced, but a lagging economy led to a deficit that his administration had to deal with.
In such cases, the governor and legislature -- and sometimes the governor alone -- have to implement cuts and/or raise taxes to rebalance the state ledger. This happened at various times with Romney’s Republican predecessor and his Democratic successor.
Most states try to maintain a “rainy day” reserve to shield their programs from economic emergencies. Massachusetts has never emptied its rainy day fund, technically known as the “stabilization fund balance,” since 1990, so the fact that Romney managed to sock away some money for tough times is far from exceptional. (The link above shows the history of the state’s rainy day fund dating back to 1987).
The Massachusetts stabilization stabilization fund stood at $641 million during Romney’s first year as governor in 2003, which followed a national recession. By 2005, he and the Massachusetts legislature had restored the fund to its pre-recession level of $1.7 billion.
By the time Romney left office, the fund had increased to about $2.2 billion, or 26 percent above its pre-recession level and nearly 144 percent beyond where it stood the year before the Republican governor took office.
Romney’s successor, Democratic governor Deval Patrick, maintained stabilization fund balances of $841 million and $670 million during the two Massachusetts budgets enacted around the time of the Great Recession. We should point, however, that the federal government provided Recovery Act funds to help states balance their budgets at the time.
Overall, Romney deserves credit for increasing the Bay State’s rainy day fund during while serving as governor, but his term occurred while the state GDP was growing and while the nation was experiencing positive economic conditions.
Democrats held supermajorities in both chambers of the Massachusetts state legislature during Romney’s time as governor of the state. But GOP candidate may be claiming more credit than he deserves for working with lawmakers from the opposite party. He issued about 800 vetoes during his time in office, and the state legislature overrode nearly all of them. The fact that Democrats held a veto-proof supermajority meant they could enact laws without the governor’s approval.
One area where Romney undoubtedly worked with opponents was his plan to overhaul the state’s health-care system, an effort the Republican’s campaign rarely talks about. But even then, the legislature upheld certain aspects of the program that the governor vetoed.
As for Obama saying, “You can’t change Washington from the inside,” the president made that comment during an interview that aired Sept. 20 on the Spanish-language television network Univision.
This might seem like an admission from Obama that he that he hasn’t lived up to his former campaign slogans promising “change” and “yes we can.” But that’s not the case if you look at the full context of his remarks.
Here is an expanded version of his comments:
“We know now that as soon as I came into office you already had meetings among some of our Republican colleagues saying: How do we figure out how to beat the President? And I think that I’ve learned some lessons over the last four years, and the most important lesson I’ve learned is that you can’t change Washington from the inside. You can only change it from the outside. That’s how I got elected, and that’s how the big accomplishments like health care got done, was because we mobilized the American people to speak out.
“So something that I’d really like to concentrate on in my second term is being in a much more constant conversation with the American people so that they can put pressure on Congress to help move some of these issues forward.”
Obama essentially said that he failed to mobilize popular support while in the White House, and that he needs to do a better job of that if he wins a second term. He also excused his failures by saying Republicans were out to ensure his defeat from the start.
Regarding the latter claim, we awarded Two Pinocchios to a group of Democrats who have asserted insisted that Senate Majority Leader Mitch McConnell of Kentucky vowed to make Obama a one-term president from the start of the current administration. We noted that the Republican Senate leader did indeed proclaim such a goal, but not until the midpoint of the president’s term.
Now let’s explore the notion that Obama’s troubles stem from his supposed failure to mobilize popular support. This claim rings hollow in light of the mass demonstrations that took place during the health-care debates of 2009, from constituents on all sides of the issue, and that helped give rise to the Tea Party movement.
In that particular case, the problem for Obama was not so much that he failed to rally the troops. It’s that the nation lacked a clear consensus. Congress and the president enacted the Affordable Care Act anyway, and polling this year has shown that the health-care law remains largely unpopular -- even though a high percentage of respondents have supported some of its provisions in some polls.
Obama didn’t lack the force of a vocal constituency when it came to the Affordable Care Act. His party just lacked the numbers for a clear advantage. This was made all the more clear when Republicans swept the 2010 election, taking control of the House and gaining seats in the Senate. It’s also evident in the fact that the 2012 election is a dead heat.
Granted, Republicans and Democrats alike have made compromise difficult during Obama’s term by digging in to their positions, but all presidents deal with that to an extent. Contrary to what Obama said, the concept of the opposition party trying to unseat a president is nothing new to American politics. In fact, it’s the norm.
The Pinocchio Test
Romney’s ad hit the mark with its claims about unemployment, but it didn’t account for the economic conditions that Obama inherited when he became president, nor the positive economic conditions that occurred nationally and helped boost Massachusetts jobs numbers during the Republican candidate’s term. Much of the video worked that way, with no real factual errors but plenty of missing context.
In terms of fiscal policy, the ad said Romney “turned the deficit he inherited into a rainy day fund,” which suggests the former governor ended deficit spending for the state in order to save money for economic emergencies. But the commonwealth has no choice but to close budget gaps when they exist, and piling money into the rainy day fund was nothing new to the Romney administration. At the end of the day, the GOP candidate closed a budget gap -- just like virtually all the commonwealth’s governors have done at some point when revenues didn’t match projections -- and added to a rainy day fund that already existed.
As for Romney’s ability to work with a legislature that was 85 percent Democrats, the ad fails to mention that the GOP candidate issued about 800 vetoes during his time in office, and Bay State lawmakers simply overrode many of them. That’s hardly a shining example of great bipartisanship.
Finally, the ad uses a cropped comment from Obama to suggest that the president has given up on changing Washington. The incumbent actually said that he would need to do a better job of mobilizing popular support -- even though that didn’t work much in his favor with the health-care overhaul.
On balance, the Romney ad earns One Pinocchio.
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