Fact Checking The Sunday Shows - January 23, 2011
On the Sunday shows, Senate Minority Leader Mitch McConnell (R-KY) and House Majority Leader Eric Cantor (R-VA) showed why they hold leadership roles in the modern GOP: they are maestros of misinformation. Appearing on Fox News, McConnell dissembled about everything from corporate taxes to the Recovery Act. He even suggested that the private sector isn't growing right now (although 1.3 million new jobs in the past year make the claim laughable) and claimed that "nobody's talking about" voting against the debt ceiling, despite well over a dozen prominent Republicans who are on record opposing the debt vote. For his part, Cantor told NBC viewers that the entitlement program cuts in Rep. Paul Ryan's "Roadmap" are not "draconian," but the reality is that Ryan's plan would effectively dismantle the social safety net provided by Medicare, Medicaid and Social Security. Later on Meet the Press, former Bush adviser Karen Hughes told a whopper about job losses during President Obama's tenure.
Fox News Sunday
SEN. MITCH MCCONNELL (R-KY): I think there is scant to no evidence that the stimulus bill had any impact on the private sector.
FACT: Private Sector Has Added 675,000 Jobs Since Stimulus Spending Took Effect In Summer 2009
The Recovery Act Began To Affect The Economy After July 2009. 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." [Sonecon.com, 8/10/10, emphasis added]
Since July 2009, The Private Sector Has Gained 675,000 Net Jobs. According to Bureau of Labor Statistics data, there were 107,778,000 private sector jobs in July 2009. After private-sector job growth in 13 of the subsequent 17 months, the data show that total is up to 108,453,000 — a net gain of 675,000 jobs in the private sector. [BLS.gov, accessed 1/23/11]
Below is a chart prepared by Political Correction showing monthly job gains and losses in the private sector, shaded blue for months after Recovery Act spending began to impact the economy, and red for months of job losses under Bush-era policies.
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.
FACT: While Private Sector Employment Is Sharply Up Since Recovery Act, Government Employment Is Slightly Down Over The Same Period
Government Employment Is Down 257,000 Jobs Since July 2009. According to Bureau of Labor Statistics data, there were 22,516,000 jobs in the government sector in July 2009. As of December 2010, the most recent report available, the data show 22,259,000 government jobs — a net loss of 257,000. [BLS.gov, accessed 1/23/11]
SEN. MITCH MCCONNELL (R-KY): And look, everybody knows the only way we're gonna get out of this economic trough is to get the private sector growing again.
FACT: The Private Sector IS "Growing Again" — 12 Consecutive Months Of Job Growth Added 1.3 Million Private Sector Jobs Since December 2009
The Private Sector Has Added Jobs Every Month Since December 2009. According to Bureau of Labor Statistics data, the private sector shed 83,000 jobs in December 2009. Since then, the lowest monthly job gain was 16,000 in January 2010, and the highest was 241,000 in April 2010; private industries have added jobs for 12 straight months, the data show. [BLS.gov, accessed 1/23/11]
Job Statistics Trend Shows Private Sector "Growing Again" By 1.3 Million Jobs In 2010. Below is a graph prepared by Minority Leader Pelosi's office showing net private sector job gains or losses per month since December 2007.
CLAIM: Sen. McConnell Falsely Claimed That "Nobody's Talking About" Blocking The Coming Debt Ceiling Vote Or Shutting Down The Government
CHRIS WALLACE (host): Are you willing to shut down the government over this? Are you willing not to raise the debt limit?
SEN. MITCH MCCONNELL (R-KY): Well the only one talking about shutting down the government is in your question. What we're talking about here is trying to get some results.
WALLACE: Would you agree that failing to raise the debt limit would be an economic disaster for this country?
MCCONNELL: Nobody's talking about that at this point.
FACT: Many Republican Members Of Congress And Various Prominent Unelected Conservatives Are Talking About Shutting Down The Government And Preventing The Debt Ceiling From Rising
Sen. Jim DeMint (R-SC) on Meet the Press, asked if he will vote to raise debt ceiling: "No, I won't."
House Majority Leader Cantor (R-VA): "Not gonna vote for this increase in the debt limit" unless we get our way on spending.
Sen. Rand Paul (R-KY): "Don't raise the debt ceiling" and "just [spend] what comes in."
Rep. Ron Paul (R-TX): We should "refuse to raise the debt ceiling."
Rep. Jerry Lewis (R-CA): "Not my intention to support an increase in the national debt."
Rep. Michele Bachmann's (R-MN) PAC petition: "Don't raise the debt ceiling."
Sen. Mike Lee (R-UT): Government shutdown "may be absolutely necessary."
Sen. Lindsey Graham (R-SC): "I will not vote for the debt ceiling increase" without satisfactory spending plan.
Rep. Francisco Canseco (R-TX) on debt vote: "I would roll the dice."
Rep. Mick Mulvaney (R-SC): I would "have no difficulty" voting against increasing the debt ceiling.
2012 Hopeful Tim Pawlenty: Congress "should not raise the debt ceiling."
Glenn Beck urged "no" vote on raising debt ceiling.
Tea Party leader Dick Morris: "There's going to be a government shutdown just like in '95 and '96."
"Giddy" RedState.com founder Erick Erickson about government shutdown: "I cannot wait!"
SEN. MITCH MCCONNELL (R-KY): We have the second-highest corporate tax rate in the world right now. It's not competitive, it doesn't help us create American jobs in America.
FACT: McConnell Ignored The Tax Rates U.S. Corporations Actually PAY, Which Are Much Lower
Effective Tax Rates Are Lower Than Statutory Rates. In its 2009 report on global taxation, the World Bank wrote: "The key point to recognise is that it is not simply the statutory rate of corporate income tax that is important here, but also the effective tax rate for current corporate income tax, taking into account all the additions and deductions to profit before tax that tax rules may require." ["Paying Taxes 2009: The Global Picture," World Bank, 11/10/08]
American Companies Pay Lower Effective Tax Rate Than German, Canadian, Chinese, Italian, And Other Companies. In its 2009 report on global taxation, the World Bank wrote:
As noted in Chapter 1, reducing the statutory rate of corporate income tax has been the most popular government tax reform in the period. However in most of the economies, the case study company does not pay corporate income tax at the statutory rate on its profit before tax, since the tax rules require adjustments to be made to this in order to calculate taxable profits. A common example is to substitute tax depreciation for commercial amortisation of assets.
The effective rate of current corporate income tax can be defined as the actual rate of corporate income tax paid as a percentage of profit before tax. Figure 2.7 compares this effective rate with the statutory rate of corporate income tax for the G8 and BRIC (Brazil, Russia, India and China) economies, and shows that the two are often not the same...
["Paying Taxes 2009: The Global Picture," World Bank, 11/10/08; in-text citation removed for clarity]
CBPP: U.S. Corporations Pay Lower Taxes Than Average For Developed Economies. According to the Center for Budget and Policy Priorities: "The U.S. corporate tax burden is smaller than average for developed countries. Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent." [CBPP.org, 10/27/08; in-text citation removed for clarity]
2009: General Electric Earned A $1.1 Billion Tax CREDIT Despite $10.3 BILLION In Pre-Tax Income. According to Forbes: "As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all. The most egregious example is General Electric. Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion. Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%." [Forbes, 4/1/10; emphasis added]
Meet the Press
CLAIM: Rep. Cantor Claimed Paul Ryan's "Roadmap" For Social Security Is Not "Draconian" In Its Cuts To Social Security And Medicare
DAVID GREGORY (HOST): How 'bout the— and the irony of Paul Ryan being introduced, the budget chairman, and he's doing the response to the State of the Union. He is the one who has proposed draconian cuts to Social Security and to Medicare, and Republicans don't stand behind him.
REP. ERIC CANTOR (R-VA): David, that's not true. I just told you that, um, we put a chapter in our book about it, because the direction the Roadmap goes is something that we need to embrace.
Fact: Rep. Ryan's "Roadmap" Would Dismantle Social Security
CBPP: Ryan's "Roadmap" Would Reduce Social Security Spending To Levels Not Seen Since Nearly Half Of Seniors Lived In Poverty. According to the Center on Budget and Policy Priorities: "Overall, the plan's cuts in Medicare, Medicaid, and Social Security (and other programs to a much lesser degree) would be so severe that CBO estimates they would shrink total federal expenditures (other than on interest payments) from roughly 19 percent of GDP in recent years to just 13.8 percent of GDP by 2080. Federal spending has not equaled such a low level of GDP since 1950, when Medicare and Medicaid did not yet exist, Social Security failed to cover many workers, and close to half of the elderly people in the United States lived below the poverty line." [Center on Budget and Policy Priorities, 7/7/10]
Washington Post: "Ryan's Budget Proposes Reforms That Are Nothing Short Of Violent." According to the Washington Post's Ezra Klein: "As you all know by now, the long-term budget deficit is largely driven by health-care costs. To move us to surpluses, Ryan's budget proposes reforms that are nothing short of violent. Medicare is privatized. Seniors get a voucher to buy private insurance, and the voucher's growth is far slower than the expected growth of health-care costs. Medicaid is also privatized. The employer tax exclusion is fully eliminated, replaced by a tax credit that grows more slowly than medical costs. And beyond health care, Social Security gets guaranteed, private accounts that CBO says will actually cost more than the present arrangement, further underscoring how ancillary the program is to our budget problem." [Washington Post, 2/1/10]
CBO: Rep. Ryan's "Roadmap" Would Privatize Social Security. According to the Congressional Budget Office's analysis of Rep. Paul Ryan's "Roadmap for America's Future" budget proposal: "A system of individual accounts would be established in 2012. In that year, workers who are age 55 or younger would be able to participate in voluntary individual accounts, funded with a portion of their payroll taxes. As necessary, the government would make payments to account holders during their retirement to guarantee that their contributions earned a rate of return at least equal to the rate of inflation." [Congressional Budget Office, 1/27/10]
CBO: Rep. Ryan's "Roadmap" Would Cut Social Security Benefits. According to the Congressional Budget Office's analysis of Rep. Paul Ryan's "Roadmap for America's Future" budget proposal: "Traditional retirement benefits would be reduced below those scheduled under current law for many workers who are age 55 or younger in 2011. People with lower earnings would experience smaller reductions in benefits, and those with higher earnings would experience larger reductions. Current beneficiaries and workers who are age 55 or older in 2010 would experience no change in benefits." [Congressional Budget Office, 1/27/10]
- CBO: Private Social Security Accounts Would "Probably Also Increase The Economic Cost To The Government." According to the Congressional Budget Office: "Voluntary individual accounts would probably also increase the economic cost to the government relative to a plan similar to the Roadmap but without such accounts. People would tend to opt for individual accounts when it was in their economic interest to do so, which would be when the value of taxes redirected to individual accounts exceeded the present value of forgone Social Security benefits. The guarantee of a rate of return on contributions at least equal to the rate of inflation would also involve a cost to the government. Although the probability of the returns on equities and bonds falling short of inflation over a period as long as a worker's career is small, such an outcome would be more likely to occur during periods of economic stress, when resources were scarce and, hence, the guarantee most valuable." [Congressional Budget Office, 1/27/10]
Fact: Rep. Ryan's "Roadmap" Would Dismantle Medicare
CBPP: "The Ryan Plan Would Eliminate Traditional Medicare, Most Of Medicaid." According to the Center on Budget and Policy Priorities: "The Ryan plan would eliminate traditional Medicare, most of Medicaid, and all of the Children's Health Insurance Program (CHIP), converting these health programs largely to vouchers that low-income households, seniors, and people with disabilities could use to help buy insurance in the private health insurance market." [Center on Budget and Policy Priorities, 7/7/10]
CBO: Rep. Ryan's "Roadmap" Would Privatize Medicare. According to the Congressional Budget Office's analysis of Rep. Paul Ryan's "Roadmap for America's Future" budget proposal:
Starting in 2021, new enrollees would no longer receive coverage through the current program but, instead, would be given a voucher with which to purchase private health insurance.
- In 2021, when enrollees would first receive the voucher, the average voucher for 65-year-olds would be worth $5,900 (in 2010 dollars), as specified by your staff.
- The voucher would be adjusted to reflect the age and health status of enrollees. If all Medicare beneficiaries (including older people with higher average expenditures) were to receive a voucher in 2021, the average voucher amount would be $11,000 (in 2010 dollars). [Congressional Budget Office, 1/27/10]
CBPP: By 2080, Ryan's Roadmap Would Cut Medicare By 76 Percent. According to the Center on Budget and Policy Priorities: "Under Ryan's plan, the value of the vouchers would fall further behind the rising cost of health care with each passing year, so they would purchase less health coverage over time. By 2080, Medicare would be cut 76 percent below its projected size under current policies, according to CBO. In other words, by 2080, the vouchers that would replace Medicare would receive one-quarter of the resources that Medicare would otherwise use." [Center on Budget and Policy Priorities, 7/7/10]
CBO: Rep. Ryan's "Roadmap" Would Raise Medicare Premiums And Cut Benefits. According to the Congressional Budget Office's analysis of Rep. Paul Ryan's "Roadmap for America's Future" budget proposal: "People who are age 65 or older in 2020 and other existing enrollees at that time would continue to be covered by the current program, although some higher-income enrollees would pay higher premiums, and some program payments would be reduced." [Congressional Budget Office, 1/27/10]
CBO: Rep. Ryan's "Roadmap" Would Raise The Eligibility Age For Medicare. According to the Congressional Budget Office's analysis of Rep. Paul Ryan's "Roadmap for America's Future" budget proposal: "The age of eligibility for Medicare would increase incrementally from 65 (for people born before 1956), as it is under current law, to 69 years and 6 months for people born in 2022 and later." [Congressional Budget Office, 1/27/10]
KAREN HUGHES: You can talk about new jobs, but the vast majority of jobs have been lost since December of 2008, when President Obama was preparing to become president, we've lost 8 million jobs.
FACT: Economists Credit Those 8 Million Job Losses To The Bush Administration Because Obama Policies Didn't Impact The Economy Until Summer 2009
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]
PolitiFact: "True" That "Most Job Losses" Happened Before Obama Policies Took Effect. According to PolitiFact.com's analysis of President Obama's statement that "most of the jobs that we lost were lost before the economic policies we put in place had any effect": "Looking at BLS data on seasonally adjusted non-farm employment from December 2007, when the recession officially began, to January 2009, the month before the stimulus was enacted (a 25-month period), the jobs number declined by 4.4 million. ... When [Obama] refers to his economic policies, we presume he is referring to his main economic stimulus, the American Recovery and Reinvestment Act. It passed in February 2009, but it took several months before the impact of its spending was felt in the economy. Job loss didn't stop, but Obama is right that it slowed down. In the 19 months from February 2009 through September 2010, the month of the most recent preliminary data, the overall job decline in the private and public sectors was 2.6 million. And the number of jobs lost per month has declined from around 700,000 a month at the beginning of the administration to months in which there were small net gains. ... 'I watched the president on Stewart's show last night, and I thought his basic point about the timing of the employment losses was correct and ought to be noncontroversial,' Gary Burtless, a labor markets expert at the centrist-to-liberal Brookings Institution said in an e-mail." [PolitiFact.com, 10/27/10, emphasis added]