Fact Checking The Sunday Shows - September 4, 2011
The Labor Day editions of the Sunday political shows featured a would-be president lying about energy policy and a so-called "Tea Party kingmaker" lying about safety net programs. On CBS, Rep. Michele Bachmann (R-MN) defended her promise that as president she would bring gas prices below $2 per gallon by claiming that President Obama has put American energy resources "off limits." Actual energy experts have said repeatedly that government policies aren't behind rising gas prices, which were "inevitable" in light of the artificially low prices brought about by the economic collapse. And the statistics don't back up Bachmann's accusations about Obama's policies. Meanwhile, Sen. Jim DeMint (R-SC) told ABC viewers that Social Security is bankrupt (even though it isn't) and claimed on CNN that unemployment benefits don't create jobs (even though they do).
Face the Nation
REP. MICHELE BACHMANN: So one thing that we know, again, gasoline was $1.79 a gallon when President Obama came into office. We can bring the price of gasoline down, but not with the current policies of this administration. My pro-growth, pro-energy policies will bring the prices down. Because, again, it's not government-directed; it's private-sector directed.
FACT: Gas Prices Were Artificially Low At The End Of 2008 Because Of The Recession, Making Higher Prices An "Inevitable" Component Of Recovery
GOP Economist Holtz-Eakin: "As Economies Recovered, It Was Inevitable That [Gas] Prices Were Going To Rise." In an interview with CNN, Republican economist Douglas Holtz-Eakin said: "Lesson number one is we have oil at $140 a barrel in 2008. And it went down not because we somehow discovered a lot more oil. No, it went down because we went into a massive global recession. As economies recovered, it was inevitable that prices were going to rise. And this was utterly foreseeable." [State of the Union, 3/27/11]
Recession Drove Rapid Decline In Gas Prices. As reported by CNNMoney in 2008: "If there's one bright spot in a bad economy, it's that gasoline prices have fallen, and they're expected to drop even further. As the global economy falters, demand for oil has dropped. And since the price of oil makes up about half of the cost of a gallon of gas, analysts see more relief ahead at the pump. ... The national average price for a gallon of regular, unleaded gasoline fell 2.4 cents to $3.480 from $3.504, according to a daily survey released Tuesday by AAA. That's down 18% from an all-time high of $4.114 a gallon hit on July 17." [CNNMoney, 10/7/08]
Gas Prices Have Risen During Obama's Term, But Only From Recession-Fueled Lows Back To Normal. Two graphs of gas prices over time show that while prices appear to shoot upward if one looks only at 2009-2011 numbers, the longer view confirms that prior to political upheaval in the Middle East, prices had in fact returned to normal after falling dramatically during the recession:
Gas Prices 2009-Present
[EIA.DOE.gov, accessed 9/4/11]
REP. MICHELE BACHMANN: What the president has been doing is strangling the United States energy sector. The good news is, Bob, that many Americans still don't know is that the United States is the number one energy resource rich nation in the world. We have 25 percent of all the coal in the world. One of the largest natural gas finds, trillions of cubic feet of natural gas was recently discovered in Pennsylvania. And of course from ANWR, to the east Gulf region to the Atlantic, to the Pacific, to the Bakken oil fields, we also have billions of barrels of oil. The president has just put all of that off limits.
FACT: U.S. Energy Production Has Increased Steadily Throughout The Obama Administration
Onshore Oil Production In The Lower 48 States Has Increased Steadily Throughout The Obama Administration. The U.S. Energy Information Administration prepared a chart showing onshore oil production in the lower 48 U.S. states in light blue:
Natural Gas Production Has Increased Steadily Throughout The Obama Administration. The U.S. Energy Information Administration prepared a chart showing natural gas production in the U.S. over time:
Despite Gulf "Moratorium," Drilling Continued In Shallow Gulf Waters And Deepwater Rigs That Were Already Producing Oil Continued To Do So
AP: Drilling Rigs In Shallow Waters Were "Allowed To Remain In Operation." As reported by the Associated Press: "The moratorium put a halt to the 33 deepwater exploratory rigs in operation in the Gulf in addition to all new deep-sea drilling permits. Platforms that are already producing oil along with rigs in shallow waters are allowed to remain in operation." [Associated Press, 6/10/10]
FactCheck.org: "Moratorium Had No Affect On Wells Already In Production." According to a fact check of the claim that President Obama's drilling policies are to blame for $4 a gallon gas prices by FactCheck.org: "The moratorium had no affect on wells already in production, according to Nicholas Pardi, a spokesman for the Bureau of Ocean Energy Management, Regulation and Enforcement. But it did affect drilling of new wells, and it's important for new wells to start producing oil as the old wells experience a natural decline in production." [FactCheck.org, 3/24/11]
Over 5,000 Wells Continued To Pump Oil And Gas In The Gulf. As reported by McClatchy: "Interior Secretary Ken Salazar said the actions wouldn't hurt the nation's immediate need for oil and natural gas, noting that 591 deepwater wells and 4,515 shallow water wells in the Gulf will continue to pump oil and gas." [McClatchy, 5/28/10, via Pittsburgh Post-Gazette]
PolitiFact: "Existing, Oil-Producing Deepwater Platforms" Were Allowed To "Continue To Produce." From a June 16th, 2010, PolitiFact item:
On May 27, Obama did announce a 6-month moratorium on exploratory drilling in the Gulf of Mexico. But if you think that means there's no more oil production going on in the Gulf, you'd be mistaken.
Wells that are currently producing oil will continue to produce. There are 72 active platforms in water depths of 500 feet or greater (the definition of deepwater) in the Gulf of Mexico that will be allowed to continue to operate.
At issue here is the term "oil drilling." Many people use the term broadly to refer to the entire process of extracting oil from the ground, not just drilling the holes looking for oil. But once a well starts producing oil, it's not being "drilled" anymore.
According to the moratorium notice, the U.S. Minerals Management Service will not consider drilling permits for deepwater wells for six months. In addition, operators that are currently drilling any well "must proceed at the next safe opportunity to secure the well and take all necessary steps to cease operations and temporarily abandon or close the well until they receive further guidance from the Regional Supervisor for Field Operations." There are 33 drilling operations in water deeper than 500 feet that fit that bill, which means that they needed to get to a safe place and then stop drilling. For the record, Deepwater Horizon was among the wells in the exploratory drilling phase.
When the Department of the Interior issued the moratorium directive on May 30, Secretary Ken Salazar published a statement saying, "Deepwater production from the Gulf of Mexico will continue subject to close oversight and safety requirements, but deepwater drilling operations must safely come to a halt. With the BP oil spill still growing in the Gulf, and investigations and reviews still underway, a six-month pause in drilling is needed, appropriate, and prudent."
We think a lot of people probably assumed Obama's statement meant that all oil operations in the Gulf of Mexico were put on a six-month hiatus. That's not the case. The moratorium relates to exploratory oil drilling, not to existing, oil-producing deepwater platforms, which will continue to produce. [PolitiFact, 6/16/10]
EIA: Crude Oil Production In The Gulf Of Mexico Remained Near Record High Levels. According to the U.S. Energy Information Agency, production of crude oil remained near its highest levels in the months following the imposition of a moratorium on new deep-water drilling, averaging approximately 48 million barrels per month. The following EIA chart shows no major drop in production throughout 2010:
[U.S. Energy Information Agency, accessed 5/5/11]
BOEMRE Has Approved 51 New Shallow Water And 19 New Deep Water Drilling Permits Since June. According to the latest data available from the Department of Energy's Bureau of Ocean Energy Management, Regulation, and Enforcement, 51 permits for new shallow-water wells and 19 permits for new deep-water wells have been approved since June 8, 2010:
[BOEMRE, accessed 9/5/11]
SEN. JIM DEMINT: I think most people know that Social Security is bankrupt.
FACT: Social Security Is Solvent For 25 Years Without Changes, And Requires Only Minor Adjustments To Close The Long-Term Shortfall
Social Security Trustees: Trust Fund Sufficient To Pay Full Benefits Through 2036, 78 Percent Of Benefits Thereafter. According to the Social Security Board of Trustees: "The projected point at which the combined Trust Funds will be exhausted comes in 2037 - the same as the estimate in last year's report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits." [SSA.gov, 8/5/10]
- CBPP: "Those Who Fear That Social Security Won't Be Around" For Today's Workforce "Misunderstand" Trustees' Report. According to the Center on Budget and Policy Priorities: "Even after 2037, Social Security could pay more than three-fourths of scheduled benefits using its annual tax income. Those who fear that Social Security won't be around when today's young workers retire misunderstand the trustees' projections. The program's shortfall is relatively modest, amounting to 0.7 percent of Gross Domestic Product (GDP) over the next 75 years (and 1.4 percent of GDP in 2084). A mix of tax increases and benefit modifications - carefully crafted to shield recipients of limited means, potentially make benefits more adequate for the neediest beneficiaries, and give ample notice to all participants - could put the program on a sound footing indefinitely." [CBPP.org, 8/13/10]
The Post-2037 Funding Shortfall Is Predicted To Be Less Than 1 Percent Of GDP. According to the Economic Policy Institute: "Social Security spending as a share of the economy is projected to decline after the Baby Boomer retirement, leveling off at around 6% of GDP; this is a little more than 1 percentage point above current revenues as a share of GDP. The Social Security actuaries have projected that an increase in revenues equal to just 0.6% of GDP will be sufficient to cover promised benefits over the 75-year planning period because of the savings built up in the trust fund." [EPI.org, 8/6/10, citations removed for clarity]
State of the Union
SEN. JIM DEMINT: I think what I've the president is going to talk about Thursday night is more of the same -- extending unemployment benefits, payroll tax cuts, tax credits for hiring people...
CANDY CROWLEY (HOST): Can I just interrupt you real quickly and ask you if you are opposed to extending unemployment benefits? Are you opposed to expending the payroll tax cut? Are you opposed to those two things?
DEMINT: I just don't think those things are going to create jobs, Candy.
FACT: CBO Says Unemployment Benefits Are "Timely And Cost-Effective In Spurring Economic Activity And Employment"
CBO: Extending Unemployment Benefits Is "Both Timely And Cost-Effective In Spurring Economic Activity And Employment." According to the Congressional Budget Office: "Extending additional unemployment benefits would directly help those who would otherwise exhaust their unemployment benefits between March and December of this year. Households receiving unemployment benefits tend to spend the additional benefits quickly, making this option both timely and cost-effective in spurring economic activity and employment. A variant of this option would extend assistance with paying health insurance premiums, which would allow some recipients to maintain health insurance coverage they would otherwise have dropped." [Congressional Budget Office, 2/23/10]
CBO: Unemployment Benefits Are The Most Effective Way To Boost The Economy. Below is a chart created by the Congressional Budget Office to show the "cumulative effects of policy options on employment in 2010 and 2011":
[Congressional Budget Office, 9/28/10]