Political Correction

Fact Checking The Sunday Shows - September 25, 2011

September 26, 2011 9:50 am ET

This week's Sunday talk shows saw Republicans sloppily blaming President Obama wholesale for America's economic woes. On Fox News Sunday, Sen. Lindsey Graham (R-SC) used his bully pulpit to claim President Obama made "every problem" he inherited from Bush's failed economic polices "much worse." On Face the Nation, RNC Chair Reince Priebus took the same tack by claiming DNC Chair Debbie Wasserman Schultz couldn't "point to one economic statistic in this country that Barack Obama has made better." Graham also absurdly claimed that cuts to the defense department triggered if the super committee fails to reach a compromise would "destroy the Defense Department." And on State of the Union, Sen. Lamar Alexander (R-TN) struggled to absolve the Tea Party of blame for a third budgetary standoff in the House, instead accusing Senate Majority Leader Harry Reid (D-NV) instead of 'manufacturing a crisis.'

CLAIM: Sen. Graham Claimed "Every Problem...Is Much Worse" Under President Obama

SEN. LINDSEY GRAHAM: Their approach after being beat is to go to Kentucky and give a speech about a bridge and to declare class warfare as their strategy in terms of solving the economy. Every problem that he inherited is much worse: Higher unemployment, a lot more debt, higher gas prices, you can't borrow money because of Dodd-Frank, he's putting more taxes on people who create jobs. He's creating conflict where he should be trying to find common ground. [Fox News Sunday, 9/25/11]

CLAIM: RNC Chair Reince Priebus Suggested There Isn't "One Economic Statistic In This Country That Barack Obama Has Made Better"; He's "Delivered Nothing"

REINCE PRIEBUS: Bob, Debbie's got a real problem this morning and her problem is that she can't escape the facts on where we are in this American economy. And the facts are, Bob, that presidential elections are decided by the American people asking themselves the question as to whether or not they're better off today than they were three or four years ago. And here are the facts: Unemployment is at 9.1 percent, we've added $4 trillion to the national deficit, 2.4 million people are unemployment, so my question to the chairwoman is, can she point to one economic statistic in this country that Barack Obama has made better? And she can't. [Face the Nation, 9/25/11]

REINCE PRIEBUS: Americans are hurting in this country and the reason why you're losing races like in New York nine, and — New York nine and all across the country — the president is upside down in your home state of Florida, he's upside down in all the battleground states and guess what? He's upside down in California, and he's losing in Massachusetts because Americans understand that this president hasn't cut it; he's promised the world and he's delivered nothing. [Face the Nation, 9/25/11]

FACT: Under President Obama's Policies, The Employment Picture Began To Turn Around From Bush-Era Losses

Washington Post Fact Checker: Saying Obama "Made It Worse" Is "Stretching It." According to the Washington Post fact checker's assessment of the following statement by former Gov. Mitt Romney (R-MA):

"When he took office, the economy was in recession, and he made it worse, and he made it last longer." 

With the unemployment rate ticking up in May , to 9.1 percent, the economy is definitely a weak spot for Obama. But Romney is stretching it here when he suggests that Obama has made the recession "worse...and made it last longer."

Part of the problem is that the National Bureau of Economic Research, the nonpartisan research organization that identifies recessions, last year declared that the recession ended in June 2009 - two years ago. So, with NBER saying the economy is now out of a recession, it is difficult to see how Romney can claim that Obama made it worse.

A Romney campaign official, who declined to be identified, argued that the nation now has what he called a "recessionary economy." He said that Obama made the situation worse by pushing through a stimulus bill that did not have enough tax relief. (About one-quarter of the $800 billion stimulus bill was immediate tax relief.) [Washington Post6/6/11, emphasis original]

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]

PolitiFact: "True" That "Most Job Losses" Happened Before Obama Policies Took Effect. According to PolitiFact'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]

FACT: Once It Took Effect, Recovery Act Spending Helped Turn The Job Market Around

Since Summer 2009, The Private Sector Has Added Jobs While The Public Sector Has Shrunk. Political Correction prepared a chart based on Bureau of Labor Statistics data showing cumulative job gains and losses in the public and private sectors since summer 2009 (click to enlarge):

private-sector jobs

[BLS.gov, accessed 8/14/11; BLS.gov, accessed 8/14/11]

Since June 2009, The Private Sector Has Gained Over One Million Net Jobs. According to Bureau of Labor Statistics data, there were 107,936,000 private-sector jobs in June 2009. As of August 2011, the most recent report available, the data show that total is up to 109,170,000 - a net gain of 1,234,000 jobs in the private sector. [BLS.gov, accessed 9/18/11]

CBO: The Recovery Act Created Jobs, Lowered Unemployment, And Boosted GDP. According to the nonpartisan Congressional Budget Office:

On that basis, CBO estimates that ARRA's policies had the following effects in the fourth quarter of calendar year 2010:

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 Union3/27/11]

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

gas prices

[EIA.DOE.gov, accessed 9/4/11]

FACT: Businesses Blame Weak Demand — Not Government Policies — For Weak Hiring

WSJ: "The Main Reason" For Hiring Reluctance Is "Scant Demand, Rather Than Uncertainty Over Government Policies." According to the Wall Street Journal:

The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.

"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."

In the survey, conducted July 8-13 and released Monday, 53 economists-not all of whom answer every question-were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing. [Wall Street Journal7/18/11, emphasis added]

Washington Post: Executives Can't Draw Specific Link Between Government Actions And Hiring Decisions. According to the Washington Post: "Fundamentally, executives objected to Obama's policies on the grounds they would make the United States a less competitive place to operate in the long run. But when [manufacturing CEO Jason] Speer and other executives were pressed on the role that tax and regulatory policies play in hiring, they drew only vague connections. Speer said his decision whether to hire is driven primarily by demand for his products. Orders are coming in strong enough that he is running about 20 hours a week of overtime. So he is weighing whether to hire two or three additional manufacturing workers. None of the executives interviewed linked a specific new government initiative with a specific decision to refrain from hiring." [Washington Post, 8/21/10, emphasis added]

Study By "The Most Right Wing Of The Major Business Groups" Shows Businesses Much More Afraid Of Weak Demand Than Taxes And Regulations.As Ezra Klein of the Washington Post reported:

The National Federation of Independent Businesses -- a small-business trade association that is considered the most right wing of the major business groups -- continually polls its members and releases the results. Here's what they say is their single most important problem:

Washington Post graph

As you can see, sales - that is to say, demand for their products - dominate the chart, while fear of taxes is lower than in the '90s. The concern over sales is understandable. Not only is the economy bad. But as the next chart shows, it keeps underperforming what the businesses assume will happen.

Washington Post graph

So, if anything, businesses have been too optimistic over the past few years. [Washington Post7/22/10]

Fox News Sunday

CLAIM: Sen. Graham Claimed That Defense Cuts Triggered If Super Committee Fails Would "Destroy The Defense Department"

SEN. LINDSEY GRAHAM: At the end of the day, if this commission fails, there is a trigger cutting defense by $600 billion if they can't perform their job. I will introduce legislation, Chris, that will protect the Defense Department from devastating cuts. [...] I hope the super committee works. But if it fails, let's don't destroy the Defense Department.

FACT: "Triggers" Would Cut Defense Spending To 2007 Levels, Not "Destroy" The Entire Department

Automatic Cuts Would Leave Pentagon With Base Budget Comparable To 2007 Spending Levels. From the Center for Defense Information:

Some factual perspective puts the brown paper bag around this hot air. As analyst [Todd] Harrison [of the Center for Strategic and Budgetary Assessments] also informs us, the "doomsday mechanism" would reduce the Pentagon's "base" (non-war) budget to about $472 billion, the approximate level of the base DOD budget in 2007.  I do not recall anyone declaring our national security being "imperiled" at that spending level in 2007. In fact, that level of spending for the "base" (non-war) Pentagon budget was a sixteen year high - calculated using "constant" Defense Department dollars intended to compensate for inflation. Not exactly the result of "hacking away."

If returned to the $472 billion 2007 level, the base DOD budget would be $73 billion higher than it was in 2000, the year before our various interventions started to occur. If spending were to be continued at the $472 billion level for the next 10 years, base Defense Department spending would be three quarters of a trillion dollars above the levels extant in 2000. [CDI.org, 8/9/11, emphasis added]

State of the Union

CLAIM: Sen. Alexander Claimed Senate Majority Leader Harry Reid "Manufactured A Crisis" With Latest Budget Standoff

CANDY CROWLEY (HOST): Let me ask you if you buy into Sen. Warner's premise which is, um, that Tea Party folks are basically at fault — I think I'm, that's not a direct quote, but — that the Tea Party-backed folks in the House are the ones behind the stalemate that is now threatening yet another government shutdown. Do you agree with that?

SEN. LAMAR ALEXANDER: No, I don't. I'd give the Senate Democratic leader most of the credit, he manufactured a crisis all week about disaster when there's no crisis. Everybody knows we're going to pay for every single penny of disaster aid that the president declares and that FEMA certifies. And the House sent over a bill that does that, and the Senate should have approved it. What it did was take a billion and a half dollars of unobligated funds and say, we're gonna — instead of adding to the debt — we're gonna not add to the debt when we — when we do this.

FACT: House Republicans Are Holding The Budget Hostage To Force Ideological Spending Cuts 

Tea Party-Backed House Members Are Using Budget "To Push An Ideological Agenda Of Spending Reductions." According to CNN:

This is the third time the government has been threatened with a shutdown this year alone. Legislators nearly forced Washington to start closing its doors in mid-April and again during the debt ceiling imbroglio in August.

Tea party-backed legislators have used a series of statutory deadlines -- typically dealt with through non-controversial funding extensions -- to push an ideological agenda of spending reductions at sharp odds with priorities in the Obama administration and elsewhere. [CNN, 9/25/11]

House GOP Budget Includes Lower Disaster Aid And Cuts To Clean Energy Programs. According To CNN:

The measure currently under deliberation -- which would keep Washington running through November 18 -- includes critical new disaster funding assistance for states hit hard by Hurricane Irene, Tropical Storm Lee, and a series of recent wildfires and tornadoes.

But Republicans want less disaster aid than their Democratic counterparts, and want to pay for it partly by cutting funding for programs designed to spur clean energy innovation.

The House passed a "common sense measure," House Speaker John Boehner, R-Ohio, told reporters during the Senate vote. "It's time for the Senate to move."

Senate Majority Leader Harry Reid, D-Nevada, announced his intention to push for a new vote Monday on a compromise package incorporating the GOP's lower overall disaster relief spending levels while eliminating any cuts to clean energy programs.

Congressmen and senators need to "cool off for a little bit," Reid said Friday. "There's a compromise here."

"More reasonable heads will prevail," he predicted. [CNN, 9/25/11]

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