The Democrats launched their convention with a series of speeches that put the best possible gloss on the president’s economic record and took various shots at GOP nominee Mitt Romney. First lady Michelle Obama, who like Ann Romney gave a mostly personal testimonial about her husband, did not give us much material to fact-check. But here’s a roundup of other notable claims Tuesday evening.
“Four years ago, America stood on the brink of a depression. Despite incredible odds and united Republican opposition, our president took action. And now we’ve seen 4.5 million new jobs.”
— San Antonio Mayor Julian Castro, in the keynote address
Castro takes a debatable talking point from the Obama campaign — that 4.5 million private-sector jobs have been created since February 2010 (a year after the president’s stimulus bill was passed into law) — and makes it ridiculous.
First, this statistic includes only private-sector jobs, which means the decline in government jobs is simply excluded. Total jobs created in the United States from February 2010 is 4 million — and it is actually still negative if you start counting from the beginning of Obama’s presidency.
According to the Bureau of Labor Statistics, job creation in Obama’s entire presidency is minus 300,000 or plus 160,000, depending on whether you date his presidency from January or February.
Second, February 2010 is a cherry-picked month that puts Obama’s job-creation record in the best possible light. The end of the recession, June 2009, would be a more logical date from which to start counting jobs created; that would reduce the total to 3.4 million (for private-sector jobs) or 2.7 million (for all jobs).
Finally, the U.S. population keeps growing, meaning the economy has to keep creating more than 100,000 jobs each month just to keep pace. By that measure, Obama is in a hole no matter when you start counting.
“The Romney-Ryan budget doesn’t just cut public education, cut Medicare, cut transportation and cut job training. … It’s a choice between a nation that slashes funding for our schools and guts Pell grants.”
— Julian Castro
Castro here appears to be referring to the House GOP budget blueprint written by Paul Ryan. That document retains virtually the same reductions in Medicare spending — from anticipated levels — as the Obama budget. (Such details have not stopped the Republicans from referring to “cuts,” either.)
The Republican budget also seeks to reduce government spending in the coming decades. The Obama campaign has made a variety of assumptions — not detailed in the plan — to argue that key parts of the domestic spending budget would be cut 95 percent by the middle of the century.
As we have noted before, Obama’s long-term budget does not show such cuts, but it does show the national debt soaring to more than 140 percent of the gross domestic product. Of course, a lot of things could happen in the next 40 years, which is why such claims can be easily discounted.
The administration did the similar exercise for Pell grants, claiming 10 million students would face a cut of more than $1,000, by assuming across-the-board cuts in the next year that have not actually been specified. The Ryan plan would prevent a scheduled rise in the maximum Pell grant — from $5,550 to $5,635 — and curtail eligibility for the program. Ryan argues that it is necessary to focus the program on the most needy students because the current growth path is financially unsustainable.
“Instead of the Medicare guarantee, Republicans would give seniors a voucher that limits what’s covered, costing seniors as much as $6,400 more a year.”
— Health and Human Services Secretary Kathleen Sebelius
The Democrats love to use the phrase “voucher” for a concept that is actually known as “premium support.” The government would still continue to pay much of the premiums for plans that meet government muster.
Moreover, note that Sebelius says the Ryan plan could cost “as much as” $6,400 more a year. Always watch out when a politician uses a term like “as much as” because that often means the real figure is much less. We gave President Obama Two Pinocchios when he used this figure in the past.
The problem is this dollar figure is an estimate for an earlier version of Ryan’s plan. He’s since changed it significantly to address some of the loudest complaints. The new version of the plan includes the option for traditional Medicare, as well as a commitment that at least one health-care option would be fully covered by the government.
Indeed, the new plan is much more generous than the original version. The old plan had capped growth at the rate of inflation. Many experts believed that was too low and pushed more costs on beneficiaries.
In the updated Ryan plan, Medicare spending would be permitted to grow slightly faster than the nation’s economy — in fact, at the same growth rate as Obama’s budget for Medicare.
Beneficiaries might still face higher costs, depending on how well the system worked. But that might also be the case if nothing more is done to improve Medicare’s finances.
“We learned that he [Mitt Romney] pays a lower tax rate than middle-class families.”
— Senate Majority Leader Harry Reid (D-Nev.)
Reid uses a variation of a line that once earned the Obama campaign Three Pinocchios.
Romney certainly made a lot of money in 2010 — $21.7 million, according to his tax return — and yet his tax rate was about 13.9 percent. As we have noted before, he achieves this rate because much of his income is treated as capital gains and dividends, which are taxed at a preferential rate of 15 percent, and because he donates about 14 percent of his income to charity.
But most of Romney’s taxes are federal income taxes. He pays relatively little in payroll taxes because the 6.2 percent Social Security tax maxes out once you earn a certain amount — $110,100 in 2012. Romney in effect earns that much by Jan. 3.
For most Americans, payroll taxes are the biggest tax item. (And that’s not even including the share paid by employers. Most economists say employers pay for payroll taxes by cutting their employees’ wages.)
People often confuse marginal tax rates with effective tax rates. Marginal rates are what you pay on each additional dollar of income, so that can be as high as 35 percent. The effective tax rate is the percentage of taxes you pay after deductions, adjustments and the like.
For all the rhetoric about high taxes in the United States, most Americans pay a relatively small percentage of their income in taxes. Romney had an effective rate of 13.9 percent in 2010 and 15.4 percent in 2011. That gives him a higher rate than 80 percent of taxpayers if only taxes on a tax return are counted and puts him just about in the middle of all taxpayers if payroll taxes paid by employers are included.
Deval Patrick slams Romney on Mass. record
“In Massachusetts, we know Mitt Romney. By the time he left office, Massachusetts was 47th in the nation in job creation.”
— Massachusetts Gov. Deval Patrick
This is a common Obama campaign talking point, but Patrick’s phrasing (“by the time he left office”) makes it especially inaccurate. The 47th ranking is the average for Romney’s entire term, when in fact Massachusetts started out at 50th place and ended up at 28th by the end of Romney term.
We’ve previously looked at a list of such claims by the Obama campaign and found many equally suspect. Romney’s economic record is certainly mixed, but a governor — especially a one-term governor — is very much at the mercy of broader economic trends.
“For more than 200 years, our party has led the fight for civil rights, health care, Social Security, workers’ rights, and women’s rights.”
— from a history of the Democratic Party, on DNC Web site .
A number of readers asked about this brief (20 paragraphs or so) history of the Democratic party, especially the first sentence. It certainly appears to ignore the party’s long and troubled history with race, literally leaping from the “200 years” phrase to 1920, when the women’s suffrage amendment was enacted.
The Web history mentions the leadership of President Woodrow Wilson in helping pass the 19th Amendment, without noting that he was a racist or that he repressed civil liberties — even to the point of jailing one of his rivals for the presidency in 1914 (socialist Eugene Debs).
The history also highlights the passage of the 1964 Civil Rights Act. Certainly President Lyndon Johnson, a Texas Democrat, played an essential role, but it is worth remembering that 80 percent of the “no” votes in the Senate came from Democrats, including the late Robert Byrd (W.Va.) and Albert Gore (Tenn.), father of the future vice president. Republican votes, in fact, were essential in winning final passage of the bill.
Of course, a quick little Web history does not give much space for such details. A more unvarnished perspective was presented in the 1992 book, “Of the People,” which Democrats distributed at the convention that nominated Bill Clinton. That book, written by real historians, obviously has a slant, but it found the space to mention such historical blemishes. For instance, it acknowledged that before the Civil War the party “played both sides of the slavery issue” and after the Civil War, the party “reached out a welcoming hand to returning Confederates, not to blacks.”
The highly sanitized Web version looks silly by failing to mention such unpleasant facts.
(As is our practice, we generally do not award Pinocchios in these sorts of instant roundups.)
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