In dueling ads, the Obama and Romney campaigns claim the factual high ground on deficits and taxes while, ironically, distorting the facts.
- An Obama ad uses a truncated quote that makes NBC’s Andrea Mitchell seem to contradict Romney’s statement that his tax plan doesn’t amount to a $5 trillion cut. In fact, she went on to say Romney “said again tonight that his plan would be paid for.”
- A Romney ad claims Obama is “adding almost as much debt as all 43 previous presidents combined.” It’s true that debt held by the public is up 79 percent since Obama took office, but that’s not all his fault. As we’ve often noted, the fiscal 2009 deficit was already running at an officially projected $1.2 trillion before he was sworn in.
It has been our experience at FactCheck.org that when a political campaign touts that it is providing “facts,” it’s wise to proceed with skepticism. These two competing ads from the Obama and Romney campaigns, both released after the first presidential debate, prove our point.
Fact-checking the ‘5 Trillion Tax Cut’
The Obama TV ad starts with a clip of Romney at the debate saying, “I’m not in favor of a $5 trillion tax cut. That’s not my plan.” It then shows NBC’s Andrea Mitchell doing a fact-checking segment on the conflicting tax cut claims at the debate, since Obama said Romney’s “central economic plan calls for a $5 trillion tax cut.”
But the Obama campaign misappropriates the credibility of Mitchell, NBC and Mitchell’s fact-checking segment — which NBC branded with a logo that says “The Truth Squad.” The Obama ad uses the Mitchell clip as if it disproves Romney’s claim that he is “not in favor of a $5 trillion tax cut.” But it doesn’t.
In setting up her piece, Mitchell asked and answered her own question: “So where did that figure come from?” She then explains in the clip used in the ad: “The non-partisan Tax Policy Center concluded that Mitt Romney’s tax plan would cost $4.8 trillion over 10 years.”
That’s true, but not at odds with what Romney says. As Mitchell immediately went on to say — and this is not shown in the TV ad — “Romney said again tonight that his plan would be paid for, but to pay for those cuts he would have to close loopholes in the tax code and get rid of some tax deductions.” The TPC analysis cited by Mitchell says, “The plan would recoup the revenue loss caused by those changes by reducing or eliminating unspecified tax breaks, thereby making more income subject to tax.”
So, if Romney raises tax revenue elsewhere over the next 10 years to offset the $4.8 trillion loss in revenue, then there is no “$5 trillion tax cut.” Both statements — Romney’s and Mitchell’s — are accurate. Only Obama’s claim that Romney “calls for a $5 trillion tax cut” is wrong.
NBC, by the way, has asked the Obama campaign to stop using the clip of Mitchell’s fact-checking segment.
The ad also says that Romney’s plan “gives the wealthy huge new tax breaks.” Romney’s plan would keep the Bush-era tax cuts in place and cut the marginal income tax rates an additional 20 percent. It also would eliminate the estate tax. Upper-income taxpayers would benefit disproportionately from across-the-board rate cuts. They also would benefit solely from the elimination of the estate tax, which is imposed only on estates exceeding $5.1 million.
The TPC’s detailed calculations showed that — before any elimination or reduction of tax credits, deductions or exclusions — Romney’s plan would result in an average tax cut of $256,603 for those making $1 million a year or more who get a tax cut. But, we stress, that’s before any other changes in the tax code to offset the $4.8 trillion.
The $5 trillion question is how would Romney offset the tax revenue loss in order to make his plan revenue neutral? Romney hasn’t provided specifics — saying he will work with Congress on a plan to make up the lost revenue and insisting that the economy will grow enough to make up for the rest. Mitchell made a point of noting Romney’s lack of specifics in her fact-checking segment, as did we in our debate fact-checking article.
The ad offers voters a false dichotomy when it says Romney has only two choices: “raise taxes on the middle class or increase the deficit to pay for it.” There are other options. Romney, for example, could reduce the size of his tax plan, perhaps not cut tax rates so deeply. He could, too, keep his promise to cut low- and middle-income tax brackets 20 percent, but not upper-income brackets. He hasn’t suggested either option. But the point is that he has other options. And he has emphatically said, as he did in his acceptance speech, that he will not raise taxes on the middle class.
Romney: ‘The Facts Are Clear’
A new ad from the Romney campaign, called “Facts are Clear,” attacks Obama for large deficits and rising debt, but stretches the truth to make its point.
Romney campaign ad: President Obama says he’s creating jobs, but he’s really creating debt. The facts are clear. Obama’s four deficits are the four largest in U.S. history. He’s adding almost as much debt as all 43 previous presidents combined. And over 30 cents of every dollar Obama spends is borrowed, much of it from countries like China. He’s not just wasting money. He’s borrowing it, and then wasting it. We can’t afford four more years.
The claim that “Obama’s four deficits are the four largest in U.S. history” ignores the fact that Obama inherited most of his first deficit when he was inaugurated on Jan. 20, 2009.
As we have written many times before, the nonpartisan Congressional Budget Office projected the fiscal year 2009 deficit at $1.2 trillion two weeks before Obama took office. That fiscal year started Oct. 1, 2008. Due to some additional spending under Obama, the deficit increased to $1.4 trillion for fiscal year 2009. At the end of the fiscal year, the CBO largely blamed the 2009 deficit on the recession, specifically a sharp decline in tax revenues and an increase in spending in response to the economic crisis — first by Bush and later by Obama.
Deficits have remained high under Obama, but have come down from that $1.4 trillion peak. The deficits in fiscal years 2010 and 2011 were both $1.3 trillion. And in an Oct. 5 CBO report that it dubbed “2012 Deficit: Smaller, But Still Big,” it estimates the just-concluded 2012 fiscal year ran a deficit of about $1.1 trillion. It would be accurate to say that Obama was president during three of the four largest deficit years in American history, but he bears only a small measure of responsibility for the largest.
The ad also claims that Obama is “adding almost as much debt as all 43 previous presidents combined.” We first looked into a similar claim back in February when it was included in a partisan graphic circulating via email and Facebook. It was wrong then, and remains so today.
This claim is easily checked by plugging Obama’s inauguration date — Jan. 20, 2009 — into the Treasury Department’s handy “debt to the penny” calculator. It shows that the nation’s total debt stood at $10.6 trillion on the day Obama took office, and it was at $16.2 trillion on Oct. 8. That means total debt has increased $5.6 trillion so far under Obama. That’s a huge increase in the national debt — more than 50 percent. But $5.6 trillion is nowhere near “almost as much” as the $10.6 trillion in debt amassed under the first 43 presidents.
A recently released ad from the pro-Romney Super PAC Restore Our Future appears to have considered those facts when it claimed “Obama has added more debt than the first 41 presidents combined.” That revised version of the claim conveniently leaves the 42nd and 43rd presidents — Bill Clinton and George W. Bush — out of the comparison. A little more than $6.4 trillion in debt was accumulated under Clinton and Bush, slightly higher than the amount projected to be accumulated under Obama (though we should note that’s four years of Obama compared with eight years each for Clinton and Bush).
The Romney ad’s claim that “over 30 cents of every dollar Obama spends is borrowed,” is accurate — the CBO estimates that in fiscal year 2012, the nation took in receipts of $2.45 trillion and had “outlays” of $3.54 trillion. So just over 30 cents on the dollar was borrowed. We should point out that the 30-cent figure has come down steadily under Obama. We borrowed over 40 cents on the dollar in fiscal year 2009.
And actually, China hasn’t been lending more to the U.S. lately. On the contrary, it unloaded $165 billion in U.S. Treasury securities in the 12 months ending July 31, according to the latest figures. Of all the money borrowed by the U.S. government over the years, China now holds 10 percent — still a substantial amount. But that’s down from 13.4 percent a year earlier. Overall, foreigners own $5.3 trillion, or about 47 percent, of the public debt, which means Americans own 53 percent of it.
So when campaigns claim to be citing “facts” that turn out to be misleading, where does one turn for independent un-spun numbers? For starters, FactCheck.org has put out an Obama by-the-numbers guide, an unvarnished look at statistical measures of the president’s term to date.
— Robert Farley and Eugene Kiely