"Had Enough" Of AAF's Lies?
The Alliance for America's Future (AAF), a harmless sounding 527 group, has released an attack ad against Rep. Tim Bishop (D-NY), accusing the congressman of having "lost touch" and not "listen[ing]" to voters. The ad blames Bishop for "spending billions on bailouts" and "trillions on so-called stimulus," when the Recovery Act created millions of American jobs, and the Wall Street "bailout" — which taxpayers could actually earn a profit on — was instrumental in stabilizing the economy. Moreover, the ad attacks Bishop for raising the debt limit to $14 trillion — an action that prevented the country from going into default — and suggests that health care reform will hinder small businesses with penalties, when the Affordable Act provides these businesses with tax credits.
Alliance For America's Future: "Had Enough?"
[Announcer:] Tim Bishop voted to burden our kids with $14 trillion dollars in debt, spending billions on bailouts, trillions on so-called stimulus. [On-Screen Text:] Bishop increased the debt limit to $14 trillion. [Announcer:] And Bishop just keeps voting like Nancy Pelosi wants him to. Bishop's wasteful spending is bankrupting our kids' future. And Bishop even voted for Obamacare, placing penalties on small businesses at a time when every job is precious. He's lost touch and won't listen. Had enough?
Bishop Voted To Avoid Default And Introduced Pay-As-You-Go Legislation
The citation the ad provides for its claim that Bishop "increased the debt limit to $14 trillion" is the House's vote on H.J. Res. 45, CQ Vote #46 — the Statutory Pay-As-You-Go Act of 2010 — for which Rep. Bishop voted in favor.
Higher Debt Ceiling Needed To Avoid Default And Its Potentially Disastrous Results. From CNN's Political Ticker: "The debt limit hike is expected to cover the Treasury's borrowing needs past the November mid-term elections and into 2011. If the debt ceiling were ever breached, the country would effectively be in default. That would slam bonds, the dollar and creditors' portfolios." [CNN, 2/12/10]
Pay-As-You-Go Act of 2010 Required That New Non-Emergency Tax And Spending Legislation Not Increase Federal Deficit. According to the Office of Management and Budget: "The Statutory Pay-As-You-Go Act of 2010 ... requires that all new legislation changing taxes, fees, or mandatory expenditures, taken together, must not increase projected deficits. This requirement is enforced by the threat of automatic across-the-board cuts in selected mandatory programs in the event that legislation taken as a whole does not meet the PAYGO standard established by the law." [WhiteHouse.Gov, accessed 10/15/10]
Wall Street "Bailout" Helped Stabilize Industry, Economy
The citation the ad provides for its claim that Bishop spent "billions on bailouts" is the House's vote on H.R. 1424, CQ Vote #681 — the Emergency Stabilization Act of 2008 — for which Rep. Bishop voted in favor.
In The Midst Of A Downward Spiral, TARP Helped Stabilize The Financial System. As reported by Reuters: "The U.S. government's $700 billion financial rescue program has helped to stabilize the system, but may be creating systemic problems by fueling a belief banks will always be bailed out, a watchdog for the program said on Wednesday. 'Compared to where we were last October there is no question that the system if far more stable. We were on the precipice and I think the (Troubled Asset Relief Program) contributed with the other programs to pull us back,' Neil Barofsky, the special inspector general for the program, told CNBC." [Reuters, 10/21/09]
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 Times, 7/27/10, emphasis added]
Ignatius: Bailouts "Almost Surely Saved The Country From Another Great Depression." According to the Washington Post's David Ignatius: "Constant repetition of anti-government rhetoric in our political echo chamber has dulled Americans into overlooking an important and perhaps surprising fact: We have just lived through one of the more notable successes of government intervention in modern times -- the auto and bank rescues that almost surely saved the country from another Great Depression. [...] A similar success story seems likely with most of the rest of the money spent for TARP, the acronym that is a dirty word this political season. The Troubled Assets Relief Program, coupled with emergency facilities at the Fed, allowed a "work-out" for a financial system that was on the verge of freezing up. Most of the TARP investments, it seems, will be recovered, too, including loans made to the notorious insurance behemoth AIG." [Washington Post, 10/14/10, emphasis added]
Taxpayers Could Actually Earn A Profit On TARP
NYT: Government Bailouts To Banks, Auto Companies, "Could Conceivably Earn Taxpayers A Profit." According to the New York Times:
Even as voters rage and candidates put up ads against government bailouts, the reviled mother of them all - the $700 billion lifeline to banks, insurance and auto companies - will expire after Sunday at a fraction of that cost, and could conceivably earn taxpayers a profit.
A final accounting of the government's full range of interventions in the economy, including the bailouts of the mortgage finance giants Fannie Mae and Freddie Mac, is years off and will most likely remain controversial and potentially costly.
But the once-unthinkable possibility that the $700 billion Troubled Asset Relief Program could end up costing far less, or even nothing, became more likely on Thursday with the news that the government had negotiated a plan with the American International Group to begin repaying taxpayers.
[New York Times, 9/30/10, emphasis added]
Congress Voted To Bail Out Wall Street At Insistence Of Bush Administration
Congress Passed Bailout "After Dire Warnings From The Bush Administration." According to the Washington Post: "Congress created the Troubled Asset Relief Program after dire warnings from the Bush administration that panic had seized credit markets and that the global economy was on the verge of meltdown. Barely two weeks later, Congress rushed through a measure giving Treasury Secretary Henry M. Paulson Jr. sweeping authority to spend up to $700 billion to inject cash into troubled financial institutions and buy 'toxic' assets such as those backed by failing mortgages." [Washington Post, 1/13/09]
Bush Administration Urged Passage Of Bank Bailout. As ABC News reported: "The architects of the Bush administration's massive $700 billion bailout for financial firms went to Capitol Hill today to urge lawmakers to act quickly and pass the bill 'cleanly' or risk a recession. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that failing to pass the administration's big-money bailout for the financial industry would stifle consumer spending, bring more home foreclosures and cause job loss." [ABC News, 9/23/08]
President Bush: America Might "Slip Into A Major Panic" Without Bailout. CNN reported:
U.S. President George W. Bush, saying "our entire economy is in danger," urged Congress to approve his administration's $700 billion bailout proposal.
"We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions," Bush said in a televised address Wednesday night from the White House.
Bush pointed out that the collapse of several major lenders was rooted in the subprime mortgage market that thrived over the past decade.
He said passage of the $700 billion bailout proposal was needed to restore confidence in the market.
"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.
"Without immediate action by Congress, America can slip into a major panic." [CNN, 9/24/08]
The "So-Called" Stimulus 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:
[Washington Post, 8/12/10]
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.
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]
Because Of Health Care Reform, Small Businesses Are Eligible For New Tax Credits
Health Care Reform Creates Tax Credits For Over 4 Million American Small Businesses. According to a report from Families USA and Small Business Majority: "More than 4 million (4,015,300) small businesses will be eligible to receive a tax credit for the purchase of employee health insurance in 2010. That's 83.7 percent of all small businesses in the country." [Families USA and Small Business Majority, A Helping Hand for Small Businesses: Health Insurance Tax Credits, July 2010; emphasis original]
- Health Care Reform Creates Tax Credits For 81.6 Percent Of New York's Small Businesses. According to a report from Families USA and Small Business Majority, the Affordable Care Act creates a tax credit for which 81.6 percent of New York's estimated 349,500 small businesses are eligible. [Families USA and Small Business Majority, A Helping Hand for Small Businesses: Health Insurance Tax Credits, July 2010]