Political Correction

Fact Checking The Sunday Shows - November 27, 2011

November 28, 2011 9:19 am ET

On the last Sunday of November, Republicans had a lot of airtime — and lots of lies. On Meet the Press, anti-tax advocate Grover Norquist of Americans for Tax Reform regurgitated the false Republican talking point that Obama's stimulus plan "killed jobs." Freshman Senator Pat Toomey (R-PA) made an appearance on This Week to claim the deficit is not a revenue problem, a statement disputed by historically low revenue intake. Sen. Jon Kyl (R-AZ) appeared on Fox News Sunday to hype the "Toomey Plan", claiming that it would have raised revenues while paying down the debt, leaving out that the plan trades regressive tax cuts for only small revenue increases. Lastly, Herman Cain appeared on State of the Union to claim that unemployment benefits shouldn't be extended because they are a 'distraction' from the real problem of a lack of economic growth. But the Congressional Budget Office has found that unemployment benefits are a "timely and cost-effective" way to spur on the economy.

Meet the Press

CLAIM: Grover Norquist Claimed That The Stimulus Killed Jobs

GROVER NORQUIST: We just wasted $800 billion on stimulus spending that added to debt that killed jobs. There are fewer jobs than before.

FACT: The Economy Shed Millions Of Jobs During The Bush Recession Until President Obama's Policies Began To Turn Things Around

The Economy Shed Almost Eight 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]

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 October 2011, the most recent report available, the data show that total is up to 109,537,000 — a net gain of 1,601,000 jobs in the private sector. [BLS.gov, accessed 11/6/11]

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:

Public-Sector Layoffs Distort The Jobs Picture. Political Correction prepared a chart based on BLS data showing cumulative job gains and losses in the private and public sectors since the Recovery Act took effect (click to enlarge):

[BLS.gov, accessed 11/6/11; BLS.gov, accessed 11/6/11]

This Week

CLAIM: Sen. Toomey Claimed "The Problem That's Creating This Deficit Is Not A Revenue Problem"

SEN. PAT TOOMEY: First of all, let's be clear, the problem that's creating this deficit is not a revenue problem. With this very current tax code that we have now, with all its flaws but with current rates, as recently as 2007, we had a budget that was virtually balanced.

FACT: There Is A Revenue Problem

Revenues Are At Their Lowest Level Since 1950. According to the Washington Post

Sure enough, the historical White House budget tables show that receipts (ie, taxes) in 2011 are estimated to be just 14.4 percent of GDP — the lowest level since 1950. But outlays (ie, spending) in 2011 are estimated to be 25.3 percent of GDP — the highest level since World War II. That yawning gap is the key reason why the deficit is so large-and why Republican claims that there is "no revenue problem" are worthy of a couple of Pinocchios.

The recession, of course, is a major reason why revenue has fallen so much - and why spending has soared. Obama came into office claiming he would roll back President George W. Bush's taxes for the top 2 percent of wage-earners, which would have helped with some of the revenue gap, but then he cut a deal last year with Republicans that extended the cuts for two years. [Washington Post4/14/11]

TPM: As A Percentage Of GDP, Revenue Has Fallen Over The Last Decade. From Talking Points Memo:

We took the numbers and put them in a slightly different context, so you can see by what percentage spending and revenues have risen and fallen on a population adjusted basis over the last decade. Makes it pretty clear what is and is not the culprit of deficits and our supposedly out-of-control spending.

[Talking Points Memo7/4/11]

Krugman: "Revenue Has Plunged." According to Paul Krugman's New York Times blog:

For all those commenters saying that we must have had a surge in government spending - I mean, look at the deficit! - a simple picture:

Government spending has continued to rise more or less on its pre-crisis trend. Revenue has plunged, because the economy is deeply depressed. [New York Times10/17/10]

GOP Congressman Asked Fellow Republicans To Face Facts, Admit That There Is A Revenue Shortage. From a speech given by Rep. Scott Rigell (R-VA) on the floor of the House of Representatives:

Now, I would say to my friends who are Democrats, let's consider this. Historically, we've been around 19 percent of expenses as a percent of our gross domestic product. Right now, we're over 24.5 percent. This is putting America on a perilous course and I believe that it threatens our country in a fundamental way. Now, to my republican colleagues, let's look at the other side. Historically, we've been around 18 percent, plus or minus, revenue as a percent of gross domestic product. And right now, we're less than 15 percent. That, too, is a problem. Any Republican who will not admit to this or to confront it and discuss it head on, is not dealing with reality. These are the numbers. It's not how you feel. It's where the numbers lead us. We need to be a leadership team here, a body that respects, seeks out, and is guided by the facts. [Rigell Remarks, 11/15/11, via Political Correction]

Fox News Sunday

CLAIM: Sen. Kyl Touted Revenue Increases In Toomey Plan

SEN. JON KYL: And the proof in the pudding is the fact that the so-called Toomey Plan, which Republicans, all six of us, offered to the Democrats, would specifically have raised tax revenues. It would have raised $250 billion more than the tax reform that would be necessary to reduce the rates and would have applied that to debt reduction. Grover was not happy with that, we did it anyway.

And this is the point. The Bowles-Simpson Commission said raise whatever revenue you can and apply it to reducing rates. We did that in the Toomey plan by reducing the value of all this tax credits and deductions, the kind of thing you spoke of. And Toomey Plan scored by the Congressional Budget Office, would have reduced the top rate to 28 percent and every other rates by 15 percentage points. As a result of which, we could accomplish both goals.

FACT: Toomey Plan Calls For Regressive Tax Cuts In Exchange For Small Revenue Increase

CBPP: GOP Proposal Makes Only "Modest" Contribution To Deficit Reduction And Takes Future Revenue Sources "Off The Table." According to the Center on Budget and Policy Priorities:

Senator Pat Toomey and other Republicans on the Joint Select Committee on Deficit Reduction ("Supercommittee") portray their new offer to raise close to $300 billion in revenues (under a plan to reduce deficits by about $1.5 trillion over ten years) as a significant concession, and some observers have suggested it represents a welcome first step toward a balanced deficit reduction plan to put the budget on a sustainable path.  But a closer examination of the proposal raises grave concerns and indicates that, in fact, it adds little balance. 

It uses savings from closing tax loopholes and narrowing other tax expenditures mainly to set tax rates permanently at levels well below those of President Bush's tax cuts, and to make permanent both the highly preferential treatment of capital gains and dividend income under the Bush tax cuts and the temporary hollowing out of the estate tax for estates of the wealthiest one-quarter of 1 percent of Americans that Congress enacted in late 2010.  Consequently, the proposal seems designed to make only a modest revenue contribution toward deficit reduction and then to take revenues off the table for the larger rounds of deficit reduction that must follow.  Moreover, even while yielding modest savings, the revenue component would make the package less balanced by conferring large new tax cuts on the wealthiest Americans while forcing low- and middle-income Americans to bear most of the plan's budget cuts as well as its tax increases.

By permanently locking in tax rates well below the Bush levels, the plan would remove the potential to secure $800 billion in deficit reduction by letting the Bush tax cuts for households with incomes over $250,000 expire on schedule at the end of 2012, and it would remove the leverage that the scheduled expiration of these tax cuts provides to those who seek balanced deficit reduction with a substantial revenue contribution. [CBPP.org, 11/10/11, emphasis added]

CBPP: "The Republican Proposal Would Significantly Shift Tax Burden" From The Rich To Working Americans. According to the Center on Budget and Policy Priorities:

[T]he Republican proposal would significantly shift tax burdens from high-income to lower- and middle-income taxpayers.  High-income taxpayers would benefit enormously from the proposed cut in tax rates, while lower- and middle-income taxpayers would suffer disproportionately from the proposed reductions in tax expenditures, since the plan shields the main tax expenditure for the highest-income Americans - the highly preferential treatment of capital gains and dividend income.  Preliminary estimates by the Joint Committee on Taxation of a plan similar to the Republican proposal indicate that taxpayers with incomes above $200,000 would get tax cuts significantly larger than the already-highly-lucrative tax cuts they will get if Congress extends all of the 2001 and 2003 Bush tax cuts   The new tax cuts would be the largest for people with the highest incomes - those with incomes above $1 million would get a new tax cut of more than $30,000 a year, on average, on top of the tax cuts they would get from making all of the Bush tax cuts permanent.  The Urban Institute-Brookings Tax Policy Center estimates that those households are receiving an average tax cut of $129,000 this year from the existing Bush tax cuts; thus, the total tax cut for these very well-off households could exceed $150,000 a year, on average, under the Republican plan. [...]

In contrast, taxpayers with incomes below $200,000 would see their tax bills rise, on average, compared to current policies.  These additional taxes on lower- and middle-income Americans would come on top of the effects of the nearly $900 billion in spending cuts over ten years under the Republican plan, which would fall disproportionately on them because they are more dependent on Medicare, Medicaid, and other programs slated for cuts than are higher-income Americans. [CBPP.org, 11/10/11, emphasis added]

State Of The Union

CLAIM: Cain Suggested Unemployment Benefits Are A 'Distraction' That Don't Help Economic Growth

CANDY CROWLEY (HOST): Well, and about 2 million of those will lose their benefits if long-term unemployment benefits are not extended. And there are lots of studies that show that one of the quickest ways to get money into the economy is through these unemployment benefits.

So if I read you correctly, you would not be for extending those for another year but you would be for the payroll tax cut. [...] Do you believe those unemployment benefits should be extended?

CAIN: No. And here's why. Where do we stop, Candy, is the question? Here again, extending unemployment benefits, extending the cut in the payroll tax are just distractions from the bigger problem, which is lack of economic growth which has not been there.

Secondly, we're spending money we do not have. It's unfortunate that people are unemployed. This is one of the reasons that I have proposed a bold plan to get this economy going which you know is 9-9-9. People need to go — want to go back to work. That's the good news.

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]

Click here for much more about GOP rhetoric on jobless benefits.

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