Ohio’s Economy Is Recovering

Ohio Unemployment Rate Has Fallen More Than 3 Percentage Points From Recession-Driven High. According to the Bureau of Labor Statistics, Ohio’s unemployment rate was 5.7 percent when the recession began in December 2007, and 10.5 percent when the recession officially ended in June 2009. It remained at 10.6 percent from July 2009-January 2010 and has fallen steadily ever since. As of June 2012, the last month for which data is available, Ohio’s unemployment rate was 7.2 percent. [BLS.gov, accessed 8/15/12]

Number Of Unemployed Ohioans Dropped By 7,000 In June, As Unemployment Rate Fell For 11th Straight Month. According to the Associated Press: “The state Department of Job and Family Services said Friday that seasonally adjusted joblessness in Ohio decreased from 7.3 percent in May to 7.2 percent in June, its lowest level since September 2008. The state’s non-farm payrolls grew by 18,400 compared with May’s figures. Ohio’s rate has inched downward in each of the past 11 months as manufacturing and other sectors helped drive economic recovery. The number of unemployed Ohio workers dropped by about 7,000, from 426,000 in May to 419,000 last month.” [Associated Press via Businessweek.com, 7/20/12]

Affordable Care Act Reduces The Deficit

CBO: The Affordable Care Act Will Reduce Deficits By Over $200 Billion From 2012-2021. According to Congressional Budget Office Director Douglas Elmendorf’s testimony before the House on March 30, 2011: “CBO and JCT’s most recent comprehensive estimate of the budgetary impact of PPACA and the Reconciliation Act was in relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2 would repeal the health care provisions of those laws. CBO and JCT estimated that repealing PPACA and the health-related provisions of the Reconciliation Act would produce a net increase in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will produce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues.” [“CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010,” CBO.gov, 3/30/11]

“$1.17 Trillion” Refers To Cost Of Insurance Provisions – Not ACA’s Impact On The Deficit

July 2012: CBO’s Updated Estimate For Cost Of ACA Insurance Coverage Provisions Is $1.168 Trillion. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of $1,168 billion over the 2012–2022 period—compared with $1,252 billion projected in March 2012 for that 11-year period. That net cost reflects the following: Gross costs of $1,683 billion for Medicaid, CHIP, tax credits, and other subsidies for the purchase of health insurance through the newly established exchanges (and related costs), and tax credits for small employers. […] Those gross costs are offset in part by $515 billion in receipts from penalty payments, the new excise tax on high-premium insurance plans, and other budgetary effects (mostly increases in tax revenues stemming from changes in employer-provided insurance coverage).” [CBO.gov, July 2012, internal citations removed]

• July 2012 Report Affirmed Projection That ACA Will Reduce Deficits. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT have not updated their estimate of the overall budgetary impact of the ACA; previously, they estimated that the law would, on net, reduce budget deficits.” [CBO.gov, July 2012]

ACA Includes Small Tax On Medical Device Manufacturers That Will “Gain Business Due To Health Reform”

Tax On Medical Device Manufacturers Is Effectively Just 1.5 Percent. From the Columbus Dispatch article cited by Crossroads GPS ad: “Medical-device manufacturers and their advocates want to eliminate a 2.3 percent excise tax included in the federal health-care overhaul. […] In an industry report in August, Phillip Seligman of Standard & Poor’s said the 2013 start date of the tax gives the industry time to realign its cost structure to remain profitable. Because it’s an excise tax, the tax is deductible for income-tax purposes, making its effective rate about 1.5 percent, he wrote.” [Columbus Dispatch, 5/15/12]

CBPP: Medical Device Manufacturers Are Being Taxed Because Health Care Law Will Increase Their Business. From the Center on Budget and Policy Priorities: “The House will soon consider legislation to repeal the excise tax on medical devices that was enacted to help pay for health reform.  The provision is sound, however, and the industry lobbying campaign aimed at repealing it is based on misinformation and exaggeration. … The medical device industry is not being singled out.  The excise tax is one of several new levies on sectors that will gain business due to health reform.  The expansion of health coverage will increase the demand for medical devices and could offset the effect of the tax.” [CBPP.org, 4/31/12, emphasis original]

Repealing Medical Device Tax Would Cost $29 Billion. From the Center on Budget and Policy Priorities: “The Joint Committee on Taxation estimates that repealing the excise tax would cost $29 billion over the 2013-2022 period.  Repealing the tax would undercut health reform in at least two ways.  Pay-as-you-go procedures would require Congress to offset the cost of repeal by increasing other taxes or reducing spending; one likely target would be the provisions of the Affordable Care Act (ACA) that expand health coverage to 33 million more Americans.  Also, repealing the tax would encourage efforts to repeal other revenue-raising provisions of the ACA, which in turn would either require still more painful offsets or increase the budget deficit (if Congress failed to offset the cost).” [CBPP.org, 4/31/12, internal citation removed]

Brown Did Not Support A “Massive Energy Tax”

The ad cites CQ Vote #141 on June 2, 2008, in which the Senate agreed to cloture on S. 3036, the Lieberman-Warner Climate Security Act of 2008, to support the claim that Brown supported “a massive energy tax.”

A Majority Of Republican Senators Voted For Cloture On The Climate Security Act. The cloture vote on the Climate Security Act of 2008 passed the Senate 74 to 14, with 32 out of the 49 Republicans in the Senate voting in favor. Only 13 Republicans voted “nay,” and another four didn’t vote. [S. 3036, Vote #141, 6/2/08]

Sen. Brown Ultimately Voted Against Bill Out Of Concern For Ohio Industry. According to the Plain Dealer: “U.S. Sen. Sherrod Brown, an Ohio Democrat who has enjoyed widespread support from environmentalists, joined Republicans Friday to block legislation aimed at curtailing global warming. He said the measure would exact too high a cost on Ohio industry and threaten jobs, though he acknowledged in a floor speech that he was torn. ‘This was not an easy vote,’ said Brown , who was lobbied heavily by environmentalists and industry. ‘I fully agree with the bill,’ he said, and he called global warming ‘the moral question of our generation.’” [Plain Dealer, 6/7/08]

Brown Voted To Extend Tax Relief For First $200,000 Of Everyone’s Income – Not For “Higher Taxes On Small Businesses”

Crossroads GPS cites Senate Votes #183 and #184 on July 25, 2012, in which the Senate passed the Middle Class Tax Cut Act, as evidence that Brown voted for “higher taxes on small businesses.”

Brown Voted To Extend Bush Tax Cuts For Middle Class, End Them For “About 1.4 Percent Of U.S. Households” At Top Income Levels. From Businessweek: “The Senate’s vote to extend most George W. Bush-era tax cuts while letting them expire for top earners gave Democrats a political victory without resolving the stalemate over U.S. fiscal policy. The 51-48 vote yesterday, mostly along party lines, shifts the focus to the Republican-controlled House, where lawmakers plan to vote next week to extend the tax cuts for 2013 for taxpayers at all income levels. […] The bill passed yesterday would extend through 2013 the tax cuts for individual income up to $200,000 a year and income of married couples up to $250,000. Above those thresholds, taxpayers would face higher rates for ordinary income, capital gains and dividends. The result would be a tax increase averaging $35,451 for about 1.4 percent of U.S. households, according to the Tax Policy Center, a nonpartisan group in Washington. The tax increases for high earners would generate about $50 billion in 2013 to reduce the budget deficit. […] Republicans say no one’s taxes should rise in a weak economy and that the tax increase would fall especially hard on those who report business profits on their personal tax returns. Their plan would extend current income tax rates and estate tax rules through 2013. The Senate, on a 45-54 vote, defeated that proposal offered by Republicans as an amendment to the Democratic bill.” Brown voted for the Democratic bill and against the Republican amendment. [Businessweek, 7/26/12; S.Amdt. 2573, Vote #183, 7/25/12; S. 3412, Vote #184, 7/25/12]

Those In The Top Bracket Still Benefit From Middle-Income Tax Cuts. According to the Center on Budget and Policy Priorities:

Furthermore, as Figure 2 shows, under the proposal to allow tax cuts on income above $250,000 ($200,000 for single filers) to expire, taxpayers in the top two brackets would still keep sizeable tax cuts on the first $250,000 of their income ($200,000 for single filers).

[Center on Budget and Policy Priorities, 7/19/12]

Congressional Research Service: Allowing Tax Cuts For The Rich To Expire Will Reduce Deficits “Without Stifling The Economic Recovery.” According to Reuters: “Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. […] Republicans want the cuts continued for all income groups while Democrats favor letting them expire for the most affluent Americans. ‘If the economy is still weak, a temporary extension (of all the rates) will not harm the economy,’ despite adding to the deficit, the CRS report said, citing CRS economist Thomas Hungerford. But allowing the rates to rise just for the wealthy could help ‘reduce budget deficits in the short term without stifling the economic recovery.’” [Reuters, 7/19/12]

Few Top Income Taxpayers Are Actually “Small Businesses”

CBPP: “Only 2.5 Percent Of Small Business Owners Face The Top Two Rates.” According to the Center on Budget and Policy Priorities: “Allowing the top two marginal tax rates to return to pre-2001 levels as scheduled next year would affect very few small businesses, a recent Treasury Department study found.  The study shows that only 2.5 percent of small business owners face the top two rates.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]

• Conservatives Rely On Definition Of “Small Business” That Counts President Obama And Mitt Romney. According to the Center on Budget and Policy Priorities: “The claims that allowing the Bush tax cuts for high-income people to expire would seriously harm small businesses rest on an exceedingly broad, and misleading, definition of ‘small business.’ The definition is so broad, in fact, that under it, both President Obama and Governor Romney would count as small business owners — as would 237 of the nation’s 400 wealthiest people.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]

• Conservative Definition Of “Small Businesses” Includes Multi-Billion-Dollar Corporations Like Bechtel And PricewaterhouseCoopers. According to the Center for American Progress: “‘That’s 750,000 small businesses in America, the most productive, the ones that are the most successful, getting hit by a tax increase on top of everything else that’s happened to them in the last 18 months of this administration,’ said Senate Minority Leader Mitch McConnell (R-KY). But McConnell’s number is only accurate if you take an incredibly expansive view of what constitutes a small business. Included in that 750,000 is the Bechtel Corporation, the largest engineering firm in the country. It is the fifth-largest privately owned company in the United States, posting gross revenue in 2008 of $31.4 billion. […] The auditing firm PricewaterhouseCoopers, which has operations in more than 150 countries, fits the bill as well.” [Center for American Progress, 10/21/10, emphasis added]

• Former Bush Economist Alan Viard: GOP’s Definition Of Small Businesses Is A “Fallacy.” As reported by the Washington Post: “Which is why Republicans continually define pass-through entities of all sizes as small businesses, a position [former Bush White House economist Alan] Viard called a ‘fallacy.’ ‘How can it be that 3 percent of owners are accounting for 50 percent of small business income? Those firms they’re owning can’t be all that small,’ Viard said. ‘And that’s true. They’re very large.’” [Washington Post, 9/17/10]

Joint Committee On Taxation: “3.5 Percent Of All Taxpayers With Net Positive Business Income” Fall Into Top Tax Bracket. According to the Joint Committee on Taxation: The staff of the Joint Committee on Taxation estimates that in 2013 approximately 940,000 taxpayers with net positive business income (3.5 percent of all taxpayers with net positive business income) will have marginal rates of 36 or 39.6 percent under the president’s proposal, and that 53 percent of the approximately $1.3 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent. [Joint Committee On Taxation, 6/18/12]