NFIB "Picture Book" Ads Blur The Facts

October 16, 2010 12:59 pm ET

The National Federation of Independent Business (NFIB) has released new ads attacking Reps. Bill Owens (D-NY) and Jerry McNerney (D-CA) over the "failed stimulus" and "reckless spending" responsible for the "massive debt." However, Owens wasn't even elected yet when Congress passed the Recovery Act, which actually created millions of jobs and saved the country from an economic disaster.  Furthermore, the NFIB misrepresents stimulus projects to portray them as wasteful, while the exploding debt is a legacy of Republican policies from the Bush era.

NFIB: "Picture Book"

Spending in Washington's out of control, leaving our kids the bill. What's [Bill Owens/Jerry McNerney] done? He [supported/voted for] for Pelosi's reckless spending spree. We were promised jobs. We got the failed stimulus. Half a million dollars for windows in an abandoned federal building. 1.9 million to study ants in Africa. And we still need jobs. Reckless spending. Massive debt. And still no jobs. Tell [Bill Owens/Jerry McNerney] stop wasting our money. The National Federation for Independent Business is responsible for the content of this advertising.

The Recovery Act Created Millions Of Jobs And Boosted The Economy

The Economy Shed Almost 8 Million Jobs Under Republican Policies Before The Recovery Act Was Passed.  According to economist Robert J. Shapiro:

From December 2007 to July 2009 - the last year of the Bush second term and the first six months of the Obama presidency, before his policies could affect the economy - private sector employment crashed from 115,574,000 jobs to 107,778,000 jobs. Employment continued to fall, however, for the next six months, reaching a low of 107,107,000 jobs in December of 2009. So, out of 8,467,000 private sector jobs lost in this dismal cycle, 7,796,000 of those jobs or 92 percent were lost on the Republicans' watch or under the sway of their policies. Some 671,000 additional jobs were lost as the stimulus and other moves by the administration kicked in, but 630,000 jobs then came back in the following six months.The tally, to date: Mr. Obama can be held accountable for the net loss of 41,000 jobs (671,000 - 630,000), while the Republicans should be held responsible for the net losses of 7,796,000 jobs. [Sonecon.com, 8/10/10, emphasis added]

Based on Shapiro's research, the Washington Post's Ezra Klein created the following chart showing net job losses before and after the Recovery Act was enacted:

[Washington Post8/12/10]

CBO: The Recovery Act Created Jobs, Lowered Unemployment, And Boosted GDP.  According to the nonpartisan Congressional Budget Office, through the second quarter of 2010, the American Recovery and Reinvestment Act:

  • Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent,
  • Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points,
  • Increased the number of people employed by between 1.4 million and 3.3 million, and
  • Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 4.8 million compared with what those amounts would have been otherwise.

[CBO, 8/24/10]

Reuters: The Recovery Act May Have "Prevented The Sluggish Economy From Contracting" Between April And June.  According to Reuters

The massive U.S. stimulus package put millions of people to work and boosted national output by hundreds of billions of dollars in the second quarter, the nonpartisan Congressional Budget Office said on Tuesday.

CBO's latest estimate indicates that the stimulus effort, which remains a political hot potato ahead of the November congressional elections, may have prevented the sluggish U.S. economy from contracting between April and June.

CBO said President Barack Obama's stimulus boosted real GDP in the quarter by between 1.7 percent and 4.5 percent, adding at least $200 billion in economic activity. [Reuters via ABC News, 8/24/10]

Job Statistics Trend Shows Recovery Act Is Working. Below is a graph prepared by the Speaker's office showing net private sector job gains or losses per month since December 2007.

[Bureau of Labor Statistics via The Gavel, 10/8/10]

Princeton, Moody's Economists Say "Highly Effective" Government Response To Crisis Saved 8.5 Million Jobs.  According to the New York Times: "Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government's sweeping interventions to prop up the economy since 2008 helped avert a second Depression. Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved. In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration's fiscal stimulus program, the nation's gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation. The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody's Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years. 'While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,' they write." [New York Times7/27/10, emphasis added]

Ants & Windows: NFIB Distorts Recovery Funding

The Recovery Act "Didn't Release Money For Ant Research Directly." According to PolitiFact.com:

But the stimulus didn't release money for ant research directly, and you won't find a "study of ants" in the bill's text.

Instead, the federal stimulus gave $3 billion to the National Science Foundation, which otherwise had a budget of about $6.5 billion in 2009. The foundation is an independent federal agency devoted to the progress of science. It distributed the stimulus money using the same peer-review process that it normally uses to decide which scientific research deserves funding. [PolitiFact.com, 9/20/10]

The "Abandoned Federal Building" Is The Coldwater Visitor Center At Mount St. Helens.  As reported by TDN.com: "Mount St. Helens was again in the national spotlight Tuesday - but not the way U.S. Forest Service officials would like. Plans to replace windows at the shuttered Coldwater Ridge Visitor Center topped a list of the 100 most wasteful stimulus projects put out by U.S. Sens. John McCain and Tom Coburn." [TDN.com, 8/3/10]

The Visitor Center Closed Due To Lack Of Funding. According to MountStHelens.com:

Over the past decade the USFS has come under increasing budget constraints due to reduced logging production and more importantly increased costs of fire-fighting which recently has consumed up to 45% of the Forest Services annual budget.  This shrinking budget has forced the USFS to dramatically reduce its dollars spent on maintaining facilities and services within the Mount St. Helens National Volcanic Monument - just at the time the maintenance requirements are accelerating. The Monument budget is forced to compete with USFS forest budgets across the country and for dollars needed to maintain the Gifford Pinchot National Forest locally.  The monument has implemented user fees and reduced services to stay within budget and transferred ownership of the Silver Lake Visitor Center to the State Parks.  Given the choice of maintaining local campgrounds and roads within the Gifford Pinchot or maintaining expensive Visitor Centers for tourists the USFS had no choice recently but to close one of their expensive visitor centers - the $15 million dollar Coldwater Visitor Center. Even this closure still leaves the Monument with millions in backlogged maintenance needs. [MountStHelens.com, accessed 10/15/10, emphasis added]

Ezra Klein: Repairing The Visitor Center Injected New Demand Into The Economy. The Washington Post's Ezra Klein wrote:

When Tom Coburn and John McCain released their list of wasteful stimulus projects, the first item was "$554,763 for the Forest Service to replace windows in a closed visitor center at Mount St. Helens." Assuming the description is right, it seems dumb, right? Why does a closed service center need new windows?

But from the point of view of stimulus, that project wasn't wasteful at all: We paid people to replace windows, we paid window-makers to produce glass, and we put $554,763 of new demand into an economy that was operating far below its potential. [Washington Post, 9/6/10, emphasis added]

Bill Owens Was Elected Nine Months AFTER The Recovery Act Was Passed

The House Passed The Recovery Act In February 2009.  The House of Representatives passed final version of the American Recovery and Reinvestment Act on February 13, 2009. [H.R. 1, Vote #70, 2/13/09]

Bill Owens Was Elected To Congress In November 2009.  On November 3, 2009, the New York Times reported: "Democrats won a special election in New York State's northernmost Congressional district Tuesday, a setback for national conservatives who heavily promoted a third candidate in what became an intense debate over the direction of the Republican Party. With 89 percent of precincts reporting, the Democratic candidate, Bill Owens, led with 49 percent of the vote, while the Conservative Party candidate, Douglas L. Hoffman, had 46 percent, a margin of about 4,300 votes. [New York Times, 11/3/09]

The Debt Exploded Because Of Bush-Era Republican Policies

Before Obama Took Office, The FY 2009 Deficit Was Projected At $1.2 Trillion. As reported by the Washington Times: "The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn't enact any new programs. [...] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record." [Washington Times, 1/8/09, emphasis added]

CBPP: "Tax Cuts Have Been The Single Largest Contributor To The Reemergence Of Substantial Budget Deficits In Recent Years." According to the Center on Budget and Policy Priorities: "Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years.  Legislation enacted since 2001 added about $3.0 trillion to deficits between 2001 and 2007, with nearly half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending)." [CBPP, 5/9/08, parentheses original]

The Bush Tax Cuts Are The Primary Driver Of Federal Budget Deficits Over The Next Decade. Below is a chart from CBPP showing the deficit impacts of war spending, financial recovery spending, the recession itself, and the Bush tax cuts:


[CBPP.org, 6/28/10]

Public And Foreign-Held Debt Skyrocketed While Bush Was In Office. Below are two graphs prepared by the Speaker's office showing the increase of publically and foreign-held debt during the years Bush was in office:

[U.S. Treasury via The Gavel, 6/11/10]

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