It's Opposite Day For The NRCC

October 27, 2010 7:21 pm ET

Given the NRCC's role as the official party organization of Republican congressional candidates, you would think that the group would have some sort of basic understanding of how Congress works. However, the NRCC's latest attack on Rep. Ciro Rodriguez (D-TX) proves that this is not the case. The organization first gets its facts wrong about the Recovery Act, claiming that the "failed stimulus" created jobs in China and gave millions in bonuses to executives on Wall Street, when actually the bill created jobs here in America and limited executive bonuses for recipients of TARP money. The real doozy, however, is the claim that Rodriguez "raised his own pay four times." While Rodriguez's pay may have increased since he took office, it is because Congress automatically receives cost of living adjustments every year — adjustments which Rodriguez has actually voted against multiple times.

NRCC: "Ciro Rodriguez Is Not On Our Side"

Ciro Rodriguez backed the failed stimulus plan that created jobs in countries like China while Americans suffered. He voted to allow corporate executives to collect millions of dollars in taxpayer-funded bonuses, and raised his own pay four times. Ciro Rodriguez: Using our money for jobs in China; allowing our tax dollars to go to Wall Street millionaires; voting himself big pay raises. Ciro Rodriguez is not on our side. The National Republican Congressional Committee is responsible for the content of this advertising.

Rodriguez Has Repeatedly Voted Against Salary Increases

Representatives' Pay Increases Automatically. According an article in The Hill regarding a House vote against pay increases: "The House followed the Senate's lead Tuesday and voted to block its automatic pay raise as it heads into a highly contested election season. The move marks the third consecutive year lawmakers have voted to halt their automatic cost-of-living increase. The law governing congressional pay raises requires members to vote against getting a raise. Otherwise, the raise takes effect automatically." [The Hill, 4/27/10; emphasis added]

Rodriguez Voted For A Bill That Eliminated The Cost-Of-Living Adjustment For Members Of Congress. Rep. Ciro Rodriguez voted in favor of H.R. 5146 which stated that "Members of Congress shall not receive a cost of living adjustment in pay during fiscal year 2011." The bill passed 402-15. [H.R. 5146, Vote#226, 4/27/10]

Rodriguez Is A Co-Sponsor Of A Bill That Would Eliminate Automatic Pay Raises For Members Of Congress. Rep. Ciro Rodriguez is a co-sponsor of H.R. 4255, the "Stop the Automatic Pay Raise for Members of Congress in Fiscal Year 2011 Act." [Thomas.LOC.gov, accessed 10/27/10]

The Omnibus Appropriations Bill Of 2009 Which Eliminated A Pay Increase For The 2010 Calendar Year. According to the non-partisan FactCheck.org:

The fact is that Congress voted in March to give itself a zero pay raise in 2010. The language is in Public Law 111-8, the Omnibus Appropriation Act for the current fiscal year, which was signed March 11. Tucked away at the very end of the 466-page spending bill is the following language:

It says quite simply that the automatic cost-of-living increase that might have gone into effect for members of the House and Senate in January "shall not take effect." That means rank-and-file members of Congress will continue to get $174,000 each next year, the same as they are being paid this year. [FactCheck.org, 9/25/09]

  • Rodriguez Voted For The Omnibus Bill. Rep. Ciro Rodriguez voted 'Yea' on H.R. 1105, the Omnibus Appropriations Act of 2009. The bill passed 245-178. [H.R. 1105, Vote#86, 2/25/09]

Stimulus Funds Go To U.S.-Based Projects

To back up its claim that the stimulus created jobs overseas, the NRCC cites a Washington Times article which references a study conducted by American University that has been widely distorted to contend that the stimulus' clean energy grants went to create jobs in China and other countries. However, the author himself states that the Recovery Act provides funding to U.S.-based projects, some of which are American subsidiaries of foreign companies.

Controversy Over Renewable Energy Jobs Originates From Distortion Of American University Study. From a PolitiFact article fact-checking Sarah Palin's claim that "80 percent of $2 billion they spent on alternative energy went to purchase wind turbines in China," which it found to be false: "To support her statement, Palin's Facebook missive links to a Feb. 11, 2010, op-ed in Investor's Business Daily, a conservative news source. The editorial states that, according to the Investigative Reporting Workshop at American University, nearly $2 billion from the stimulus bill has been spent on wind power, and that 80 percent of that has gone to foreign manufacturers of wind turbines. ... The Investigative Reporting Workshop's story on stimulus dollars and the wind industry came in two parts. In October 2009, it published its first analysis. The group found that of the $1.05 billion in clean-energy grants already handed out by the Department of Energy, about 84 percent -- or $849 million -- ended up in the hands of foreign wind companies. ... On Feb. 8, 2010, [the author of the study Russ] Choma updated his original findings, reporting that an additional $1 billion had been handed out in renewable energy grants, bringing the grand total to $2.1 billion. Of that, about 79 percent has gone to overseas firms." [PolitiFact.com, 2/23/10]

Study's Author: Renewable Energy Stimulus Grants Go To U.S.-Based Projects, Some Built By American Subsidiaries Of Foreign-Owned Companies. From PolitiFact:

We spoke with Russ Choma, the story's author, who explained that these grants are given to U.S.-based wind projects, but that many of these projects are being built by the American subsidiaries of foreign-owned companies. For instance, on Sept. 22, 2009, the DOE awarded $464.2 million to wind projects, and all of it went to local subsidiaries of foreign companies, according to the report. Those companies include Iberdrola, a Spanish company that received $250.9 million; the American subsidiary of Japan's Eurus Energy, which got $91.3 million; and the American subsidiary of Germany's E.ON Group, which received $121.9 million. 

Choma also points out that the wind turbine manufacturing industry in the United States is relatively weak compared to those abroad; of the 1,807 turbines erected in the United States as a result of the stimulus grants, foreign-owned manufacturers made 1,219, according to the report. 

[PolitiFact.com, 2/23/10, emphasis added]

PolitiFact: No Stimulus Money Has Gone To Chinese Turbine Manufacturers. From a PolitiFact article fact-checking Sarah Palin's claim that "80 percent of $2 billion they spent on alternative energy went to purchase wind turbines in China":

Aside from that, Palin -- and the IBD editorial -- misrepresented Choma's story in a number of ways. First, while Choma found that many of the grants given so far have been for wind projects -- and that many of those projects are being developed by the American subsidiaries of foreign companies -- the 79 percent of the $2.1 billion he cites in his story (Palin's rounded that number up to 80 percent) is the amount that has gone overseas for all renewable energy projects, not just wind projects. Choma shared his data with us, and it shows that, as of February 2010, only 73 percent has gone to foreign companies involved in wind projects. The rest of that 79 percent has gone to geothermal projects. And, more importantly, says Choma, none of these American subsidiaries is owned by Chinese companies. While the Texas deal may eventually shuttle some stimulus dollars to China through the purchase of turbines, the deal is still in the works. So, it's incorrect to say that any stimulus money has gone to Chinese turbine manufacturers, let alone 80 percent of the $2 billion spent on renewable energy projects.

[PolitiFact.com, 2/23/10, emphasis added]

Further Confusion Over Study Came From Letter From Senators. From the New York Times:

Four Democratic senators are calling on the Obama administration to halt spending on a renewable energy program in the economic stimulus package until rules are in place to assure that the projects use predominantly American labor and materials.

The senators said that more than three-fourths of $2 billion spent on wind-energy projects supported by the stimulus package had gone to foreign companies. They said that effectively undercut the purpose of the stimulus program - formally known as the American Recovery and Reinvestment Act - which is to jump-start the American economy and create jobs here.

[...]

The senators introduced legislation on Wednesday that would require that stimulus funds go only to clean-energy projects that rely on materials manufactured in the United States and create a majority of jobs here. The current law requires a "Buy American" provision only for government projects, not private enterprises.

[New York Times3/3/10]

Department Of Energy: Funding Only Goes To Projects Built In US. From Politico: "But the Department of Energy responded Wednesday afternoon, saying that the senators' message was misleading and that funding goes only to projects built in the United States and that those projects, in turn, spur economic growth. They say wind turbines built domestically - regardless of where some of the parts are manufactured - will create more demand for clean-energy manufacturing." [Politico3/3/10]

Department of Energy: Wind Energy Program Creates Thousands Of American Jobs And Attracts Billions In Foreign Investment. From the New York Times:

The Treasury Department declined to comment on the senators' letter, but the Energy Department, which administers the clean energy part of the stimulus package, said that the program was creating thousands of jobs in the United States.

"The Recovery Act has doubled the pace of investment in America's wind industry - including helping attract more than $10 billion of foreign investment to create U.S. jobs," Stephanie Mueller, news media secretary at the Energy Department, said. "The best way to stimulate our manufacturing base is to stimulate demand for wind turbines in America, since manufacturers tend to locate where the demand is."

She added that the administration would work with Congress to strengthen the clean-energy grants program, but said that suspending it now would mean immediate layoffs at American manufacturing plants.

[New York Times3/3/10]

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 Could Affect The Economy. 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:

Klein

[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]

...And Limited Executive Bonuses For Recipients Of TARP

The Recovery Act Included A Provision Which Placed "Strict Limits" On Executive Bonuses. According to CBS News: "Over the objections of the Obama Administration, Senate Banking Chairman Chris Dodd slipped in a little noticed provision that puts strict limits on those massive year end bonuses for top executives at troubled banks. ... The rules apply to the companies which have already received or will get future payments of at least $250 million in bailout money. For example, Miller reports, a top-level manager making a million dollars a year could only receive bonus of $500,000. And if he or she gets stock options, they can't cash them in until the company pays the government back." [CBSNews.com, 2/14/09]

PolitiFact: Stimulus "Did Not Enable Bonus-Paying ... It Limited Bonuses." In a fact check of the NRSC's claim that Sen. Chris Dodd's amendment to the Recovery Act "allowed for banks bailed out with taxpayer money - including AIG - to hand out huge bonuses," the non-partisan PolitiFact.com stated:

Clearly, though, the charge by the National Republican Senatorial Committee refers to Dodd's own amendment - claiming it "allowed for banks bailed out with taxpayer money ... to hand out huge bonuses."

That's not true in this sense: The bankers would have been allowed to hand out the bonuses even without Dodd's amendment. In fact, they would have been allowed to continue doing so in the future. Dodd's amendment did not enable bonus-paying that would not have existed otherwise. Quite the contrary: It limited bonuses, albeit in a way that fell short of public expectations.

[PolitiFact.com, 3/18/09, emphasis added]

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