The audio in a new ad from American Future Fund is exclusively Mitt Romney’s voice, making accusations about President Obama’s impact on spending and taxes and promising to create 12 million new jobs. That figure comes from a series of separate studies with different timelines, and two of those don’t even evaluate Romney’s policies. In addition, spending growth under Obama is low, and he has cut taxes for 95 percent of working families.
Romney Misused Studies That Don’t Evaluate His Policies To Back 12 Million Jobs Claim
Romney’s 12 Million Jobs Estimate Cobbles Together Different Studies With Mismatched Timelines. From the Washington Post: “But the specifics — 7 million plus 3 million plus 2 million — mentioned by Romney in the ad are not in the white paper. So where did that come from? We asked the Romney campaign, and the answer turns out to be: totally different studies … with completely different timelines. For instance, the claim that 7 million jobs would be created from Romney’s tax plan is a 10-year number, derived from a study written by John W. Diamond, a professor at Rice University.” [WashingtonPost.com, 10/16/12]
Five Million Of The 12 Million Come From Reports That Do Not Evaluate Romney’s Policies. From the Washington Post: “For instance, the 3-million-jobs claim for Romney’s energy policies appears largely based on a Citigroup Global Markets study that did not even evaluate Romney’s policies. Instead, the report predicted 2.7 million to 3.6 million jobs would be created over the next eight years, largely because of trends and policies already adopted — including tougher fuel efficiency standards that Romney has criticized and suggested he would reverse. The 2-million-jobs claim from cracking down on China is also very suspicious. This figure comes from a 2011 International Trade Commission report, which estimated that there could be a gain of 2.1 million jobs if China stopped infringing on U.S. intellectual property rights. The estimate is highly conditional and pegged to the job market in 2011, when there was high unemployment. ‘It is unclear when China might implement the improvement in IPR protection envisioned in the analysis, and equally unclear whether the United States will face as much excess labor supply then as it does today,’ the report says. The Romney campaign has already used this study, in a misleading way, to claim that Obama’s China ‘policies cost us 2 million jobs.’ Now the campaign has just taken the same figure and credited the claimed job gain to itself, even though the report does not examine any of Romney’s proposed policies.” [WashingtonPost.com, 10/16/12]
Economists Predict 12 Million Jobs Will Be Created Whether Romney Or Obama Is Elected. From the Washington Post: “Moody’s Analytics, in an August forecast, predicts 12 million jobs will be created by 2016, no matter who is president. And Macroeconomic Advisors in April also predicted a gain of 12.3 million jobs.” [WashingtonPost.com, 10/16/12]
Obama Has Cut Taxes
Recovery Act Included $288 Billion In Tax Cuts. From PolitiFact: “”Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren’t so much spending as money the government won’t get — so it can stay in the economy. Of that $288 billion, the stimulus has resulted in $119 billion worth of tax breaks so far.” [PolitiFact.com, 2/17/10]
Obama Has Cut Taxes For Up To “95 Percent Of Working Families.” According to FactCheck.org: “Obama has lowered taxes for all workers through a 2 percentage point reduction in the Social Security payroll tax that started in 2011 and is scheduled to continue through the end of 2012. The cut is equal to $1,000 this year for a worker making $50,000 a year — or as much as $2,202 to any worker earning at least the maximum taxable level of wages or salary ($110,100 for 2012). Obama had previously signed a tax cut that benefited nearly all working families and was in effect from 2009 through 2010. The ‘Making Work Pay’ tax credit was part of the stimulus bill he signed shortly after taking office. That credit was worth a maximum of $400 per person, or $800 for couples during those years. It phased out at higher income levels, and so its benefit went entirely to individuals making less than $95,000 a year, or couples making less than $190,000. The White House figures it went to ‘95 percent of working families.’ And even allowing for those who are retired or unemployed, it benefited more than 75 percent of all individuals and families, working or not, according to the nonpartisan Tax Policy Center.” [FactCheck.org, 5/17/12]
Under Obama, The Federal Tax Burden Is Historically Low. From the Washington Post: “Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday. A sharp decline in income — especially among the wealthiest Americans, who pay the highest tax rates — also played a role, according to the report by the nonpartisan Congressional Budget Office. […] Still, at the very moment anti-tax protesters were emerging as the most powerful force in American politics, handing Republicans landslide control of the U.S. House, the data show that people were sending the smallest portion of their income to the federal government since 1979.” [Washington Post, 7/10/12]
GOP Rejected Plan To Extend Tax Cuts For All Americans Except The Super Rich
December 2010: Senate Republicans Blocked Democratic Attempt To Extend Middle-Class Tax Cuts. From CNN: “Two Senate procedural votes on Democratic measures to extend George W. Bush-era tax cuts for people who are not super wealthy failed on Saturday, preventing the measures from moving forward. The votes sought to extend the Bush tax cuts for families making under $250,000 and $1 million, respectively. Both votes garnered the support of 53 senators, but the Democrats needed 60 votes to end debate.” [CNN, 12/5/10]
- Obama Struck Compromise With GOP To Extend All Bush Tax Cuts In Exchange For Extending Jobless Benefits, Cutting Payroll Taxes. From the New York Times: “President Obama announced a tentative deal with Congressional Republicans on Monday to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy. […] In addition, the agreement provides for a 13-month extension of jobless aid for the long-term unemployed. Benefits have already started to run out for some people, and as many as seven million people would potentially lose assistance within the next year, officials said. Congressional Republicans in recent days have blocked efforts by Democrats to extend the jobless aid, saying they would insist on offsetting the $56 billion cost with spending cuts elsewhere. White House officials said they feared a long standoff that would see benefits end for millions of Americans over the holiday season and in the months ahead. But Mr. Obama made substantial concessions to Republicans. In addition to dropping his opposition to any extension of the current income tax rates on income above $250,000 for couples and $200,000 for individuals, he agreed to a deal on the federal estate tax that infuriated many Democrats. The deal would ultimately set an exemption of $5 million per person and a maximum rate of 35 percent — a higher exemption and far lower rate than many Democrats wanted.” [New York Times, 12/6/10]
Spending Growth Under Obama Is Low
January 2009 (Pre-Obama): Federal Spending Projected To Spike To $3.5 Trillion Without Any Policy Changes. In January 2009, the Congressional Budget Office projected: “Without changes in current laws and policies, CBO estimates, outlays will rise from $3.0 trillion in 2008 to $3.5 trillion in 2009.” [Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2009 to 2019,” January 2009]
Accounting For Inflation And President Obama’s Impact On FY 2009, Spending Will Have Grown By Just 1.7 Percent From 2009 To 2012. According to Michael Linden, Director of Tax and Budget Policy at the Center for American Progress:
[I]n January 2009, before President Obama had even taken office, the Congressional Budget Office projected that federal spending would exceed $3.5 trillion for fiscal year 2009, half a trillion more than the government spent in 2008. Again, that was BEFORE President Obama event took office. It’s reasonable to use that number as our best guess at what spending would have been in FY2009 under ANY president. […]
Of course, the CBO’s projections aren’t perfect. They change as the economy changes and as laws change. Fortunately, CBO also tells us in subsequent reports how and why its previous estimates have changed. We can use that to understand how much of the total federal spending in fiscal year 2009 was attributable to legislative changes that occurred AFTER President Obama took office.
The answer is that out of a total of $3.5 trillion actually spent in FY09, only $165 billion, less than 5 percent, was the result of policy changes signed into law by President Obama.
In other words, probably the best baseline against which to judge spending under Obama is $3.5 trillion (the amount actually spent in 2009) minus $165 billion (the added amount Obama himself actually approved): $3.35 trillion. This year, the CBO expects that the federal government will spend $3.6 trillion. After accounting for inflation, that’s a growth rate of just 1.7 percent. By comparison, and using the exact same methodology, spending in President Bush’s first term was up nearly 15 percent. [ThinkProgress.org, 5/25/12]
PolitiFact: Spending Growth Under Obama Is “Second-Slowest” In Recent History. According to PolitiFact: “Obama has indeed presided over the slowest growth in spending of any president [in recent history] using raw dollars, and the growth on his watch was the second-slowest if you adjust for inflation.” [PolitiFact.com, 5/23/12]