Summary
With a nationwide wave of nominating contests looming next week, Republican presidential candidates held their last scheduled debate against the backdrop of Ronald Reagan’s retired Air Force One. But we found some of the candidates' facts just won’t fly.
- Romney complained that McCain used "the wrong data" about job creation to support his assertion that Massachusetts had ranked 47th among the 50 states while Romney was governor. Romney was wrong; McCain was correct.
- Romney said his hundreds of millions of dollars in "fee increases" merely caught up with years of inflation and weren’t tax increases in disguise. Independent budget experts contradict him on that.
- Romney said the over-budget costs of his Massachusetts health care plan were due to changes made by his successor. Authorities on the plan say that’s mostly untrue; costs went up because more people than expected signed up for state-subsidized insurance.
- Romney wrongly claimed McCain’s anti-global-warming bill would boost gasoline prices by up to 50 cents per gallon. Actually, the official estimate is 40 cents for most vehicles, and not until the year 2025.
- McCain and Romney traded oversimplified assertions regarding a "timetable" for withdrawing U.S. troops from Iraq.
- Huckabee cited a Heritage Foundation study to back up his assertion that rebates to taxpayers aren’t as good a way to stimulate the economy as the highway construction he favors. In fact, the study does disparage rebates but urges tax cuts instead, not increased spending.
- Ron Paul repeated his claim that defending the U.S. "empire" is costing "a trillion dollars a year." But the dubious figure includes costs such as the entire Veterans Affairs budget. Paul also claimed "nobody" is talking about cutting spending, even as his rivals did so 14 times during the same debate.
Analysis
Four remaining Republican candidates debated at the Reagan Library in Simi Valley, Calif.: Sen. John McCain of Arizona, former Massachusetts Gov. Mitt Romney, former Arkansas Gov. Mike Huckabee and Rep. Ron Paul of Texas. The event was broadcast on CNN. Shortly before the debate, former New York Mayor Rudy Giuliani announced he was dropping out of the race and endorsed McCain. No other Republican debates are scheduled.
McCain vs. Romney: Massachusetts Job Creation
Romney incorrectly accused McCain of using "the wrong data" when he said Massachusetts ranked 47th in the nation in job creation under Romney:
McCain: His job creation was the third worst in the country as far as job creation is concerned. …
Romney: [L]et me help you with the facts here, Senator. … [T]he study you're relying upon is a study that included [former Acting Governor Jane Swift’s] term in office, and during her term in office, 141,000 jobs were lost. During my term in office we added jobs, and from the lowest point we added 60,000 new jobs. So that study unfortunately included the wrong data.
The report to which Romney refers was released last November by the Massachusetts Institute for a New Commonwealth (MassINC), an independent, nonpartisan research and educational institute. The report does indeed cover both Romney's term (which ended Jan. 4, 2007) and that of his predecessor, Swift, who took office April 10, 2001. It actually said that during that span, Massachusetts ranked 49th (not 47th) in job creation, the worst in the nation save for Michigan.
But the report also gives figures for the period that began when the national job slump hit bottom, in August-October 2003, until the end of 2006. Romney was governor for the entire period. And during that span, Massachusetts indeed ranked 47th in job creation, just as McCain said.
We won't dispute Romney's claim that 60,000 jobs were added during the period he mentions, but it was a poor showing compared with what was going on nationally or in other states. The MassINC report says that the state's rate of job growth from the bottom of the slump to the end of 2006 was just 1.6 percent, compared with 5.4 percent nationally. (Table 7, page 35)
The report wasn't meant as a report card for any particular governor. Its only mention of Romney was to praise his administration for "substantial progress" in streamlining permits and regulations for businesses that want to locate in the state. But overall it paints a bleak picture of the Massachusetts economy:
MassINC Report: Massachusetts suffered steeper job losses than the nation during the recession and has added fewer jobs during the recovery. In fact, Massachusetts is still down roughly 100,000 payroll jobs from the peak of 2001 and is one of only seven states that has still not recovered all of the payroll jobs that it had at the peak of the business cycle.
McCain vs. Romney: Taxes and Fees
The two candidates went at it again on the subject of Romney's revenue-raising in Massachusetts:
McCain: As I understand it, [Romney's] record was that he raised taxes by $730 million. He called them fees; I'm sure the people that had to pay it – whether they called them bananas, they still had to pay $730 million extra.
Romney: With regards to fees, we raised fees $240 million, not $730 million.
As we've noted before when the subject of Romney's fee vs. tax increases has come up, the Massachusetts Department of Administration and Finance says that fee increases during Romney's tenure added up to $260 million per year, with another $174 million raised from closing some corporate tax "loopholes." The independent Massachusetts Taxpayers Foundation puts the revenue total of fee hikes and tax loophole-closings at between $740 and $750 million a year.
This time Romney went on to describe his fee increases as just long-overdue increases to catch up with inflation and to cover the actual cost of delivering specific services – not as taxes in disguise:
Romney: I think it's appropriate if the state is providing a service … that to charge a fee sufficient to do so makes a lot of sense. And so the fees ought to be adjusted from time to time to compose the amount of what the cost of providing that service, and if there hasn't been a fee raise in a couple of decades, you probably have some inflation in there you ought to adjust for.
This is also misleading. The Massachusetts Taxpayers Foundation noted that fees for registering deeds increased by $170 million between 2001 and 2004 and characterized those fees as "far in excess of any reasonable measure of the cost of services." And the increases in fees overall were "unquestionably" greater than what inflation would account for since the last time they were raised, says MTF's president, Michael Widmer. "It was certainly well more than inflation, way more than inflation," he says. "And it wasn't tied to any analysis of the cost of delivering those services. It was a budget-closing exercise."
Romney: The bill that I submitted to the legislature didn't cost one dollar more than what we were already spending. However, the legislature and now the new Democratic governor have added some bells and whistles, and they're willing to pay for them.
Actually, the reason the Massachusetts health care plan has cost more than the state had anticipated is because so many more people have enrolled in subsidized care than was projected, according to the Commonwealth Connector, the independent agency charged with implementing the health care law. The agency also believes the number of the uninsured in Massachusetts had been underestimated. When we asked Dick Powers, the Connector's spokesman, if there were any additional features added by Gov. Deval Patrick or the current Legislature that would have upped the cost, he said, "No."
The only major change Powers could point to was an increase in the amount of fully subsidized care. The original law called for the state to provide free insurance to those making up to 100 percent of the federal poverty level, a cut-off the current government upped to 150 percent. But Powers estimates that adjustment cost about $13 million, a fraction of the increased spending the state has faced.
To be sure, the bill the Romney backed, as he specifically says, wasn’t exactly the final bill that emerged. But it was the legislation he signed into law in April 2006, and there were doubts that it was adequately financed from the beginning. That same month, the independent Massachusetts Taxpayers Foundation released a report that said the "sweeping package of health reforms will require at least $200 million of new annual spending, with the possibility that additional dollars will be required to implement the reforms successfully."
Michael Widmer at MTF agrees with Powers' assessment of what has led to higher costs. "It's largely a success story because what's happened is more individuals have enrolled in the subsidized program than anticipated, and so, therefore, our subsidized costs are higher and will be higher than expected," he says. "So it's a product of our own success."
Romney touted the successes, saying he was "proud" of the accomplishments including that 300,000 have signed up for health insurance, but he omitted the fact that those same enrollees are costing more than projected during his tenure.
As an example of the change in costs, Powers says that the estimate of the final legislation was that $725 million would be needed for subsidized care in fiscal 2009. The proposed budget now, however, is $869 million for subsidized care.
Romney exaggerated the effects of McCain's environmental bill:
Romney: And then now McCain-Lieberman, which is a unilateral, meaning U.S.-only-imposed, cap-and-trade program, which puts a burden, as much as 50 cents a gallon, on gasoline in this country.
In fact, the Energy Information Administration's analysis of the bill (to which Romney referred specifically) estimates that McCain-Lieberman would make gas prices 40 cents higher than they would be without it – in the year 2025. In 2010, they would be only 18 cents higher per gallon. Other types of fuel, like diesel fuel and jet fuel, would indeed increase by about 50 cents by 2025.
EIA also estimates that new car and light truck fuel economy would increase by 9.5 percent under the bill. This would mitigate the effect of gasoline price increases, so that by 2025 annual fuel expenditures for light vehicles would be 11.5 percent higher than they would be otherwise.
Romney: I have never ever supported a specific timetable for exit from Iraq, and it's offensive to me that someone would suggest that I have. …
McCain: [You said Iraqi Prime Minister] Maliki and the president should enter into some kind of agreement for, quote, "timetables." Timetables was the buzzword for withdrawal.
This continues a fight that began just before the Florida primary, when McCain accused Romney of favoring "a date for withdrawal similar to what the Democrats are seeking." In last night's debate Romney said that "falls in[to] the kind of dirty tricks that I think Ronald Reagan would have found to be reprehensible."
The details are more complicated than either candidate allows. As we noted previously, Romney did give an interview with ABC News in which he said Bush and Maliki should agree on "a series of timetables and milestones" that they would keep between themselves. But Romney was asked in the same interview if he would veto, as Bush promised, any legislation sent to him that contained a timetable for troop withdrawals, and he said "yeah – well, of course."
McCain is off base in the implications he has been making: Romney never advocated for a particular date for withdrawal or a public date for withdrawal. In last night's debate, McCain retreated to less shaky ground, saying that Romney should've just said "no" when asked whether he thought there should be a timetable for withdrawing the troops.
However, Romney strains the facts when he said at the debate that in his ABC interview he had referred not to "timetables" for troop withdrawals, but instead to "a series of timetables and milestones for working on the progress that they're making, the progress we're making, the rule of law, what their soldiers are doing, what our soldiers are doing … how many troops they're able to recruit, how well-trained are they." Maybe that's what he meant, but he didn't make that clear at the time. The question he was asked was about troop withdrawals:
Robin Roberts, ABC News (April 7, 2007): Do you believe that there should be a timetable in withdrawing the troops?
Romney: Well, there's no question – but that the President and – Prime Minister al-Maliki have to have a series of timetables and milestones that they speak about. But those shouldn't be for public pronouncement. You don't want the enemy to understand how long they have to wait in the weeds until you're gonna be gone. You wanna have a series of things you wanna see accomplished in terms of the strength of the Iraqi military and the Iraqi police and the leadership of the, of the Iraqi government.
The record is clear that McCain publicly urged increased U.S. military efforts in Iraq before Romney did and that McCain has been unwavering in opposing any suggestion that the U.S. should withdraw. It is equally clear that Romney never supported Democratic calls for setting public dates for bringing U.S. troops home.
Huckabee on Highways and Rebates
Huckabee cited a conservative think tank's study to support his assertion that cash rebates aren't as good a way to stimulate the economy as the massive highway construction program he favors:
Huckabee: The Heritage Foundation did a pretty interesting study on past rebates and found that it does not really stimulate the economy in the way that we hope that it will. My point was that if you really want an economic stimulus package, look at what infrastructure investment does, and we've got a crumbling infrastructure.
The Heritage Foundation study that Huckabee references did indeed conclude that "tax rebates … don't stimulate the economy." It found that when $600 rebate checks were mailed in the last quarter of 2001 consumer spending surged, but the economy grew at only a "sluggish" 1.6 percent annual rate.
But the study didn't endorse Huckabee's plan, either. Far from it. Rather than call for highway building, the Heritage study said lawmakers "should reject rebates in favor of tax rate reductions."
Huckabee's Budget Claims
Huckabee cast an overly flattering light on his budget achievements, leaving out the big picture.
Huckabee: We cut 11 percent out of the budget.
The former governor's campaign didn't get back to us to explain exactly what he was talking about, but it was most likely the fiscal 2002 cuts that he had to make to cover a recession-triggered budget shortfall. According to Mike Stormes, head of the Arkansas Budget Office, "It's certainly plausible" that the cuts equaled 11 percent of that year's budget. Ordinarily it would be a simple task to check the figures, but budget office employees refer to fiscal '02 as "the lost year" because a change in state record-keeping systems created a glitch that makes it difficult to access data from that time.
What Huckabee doesn't mention is something we've noted before, which is that in inflation-adjusted dollars, spending went from $10.4 billion in fiscal year 1998 (the first budget for which Huckabee was responsible) to $15.6 billion by the end of 2006.
Fundraising phenomenon Ron Paul used his limited airtime to get in a couple of questionable claims. For the second straight debate, Paul referred to a U.S. "empire" that he said is costing taxpayers $1 trillion per year.
Paul: We were – we were elected in the year 2000 to have a humble foreign policy and not police the world. Yet what we doing now? We're bogged down in another war. We're bankrupting our country. And we're – we have an empire that we're trying to defend. It costs us a trillion dollars a year.
The figure is highly debatable. The Paul campaign gets its numbers from a study done by the libertarian Independent Institute. The study's figures include the budget for many programs that one might not intuitively associate with empire building – like, for example, retirement and medical care for veterans, Homeland Security and part of the cost of the FBI. It's also worth mentioning that the study in question was looking at the full costs of the defense budget. Paul's claim that defense equals empire is dubious.
Paul also attempted to call out his opponents on cutting spending:
Paul: We have to cut some spending. That's what nobody here talks about. Where do you cut spending if you want to spend some money? We need lower taxes, less regulations and we need to free up the market.
It is absurd for Paul to claim that "nobody talks about" cutting spending. McCain talks about it constantly and has made going after earmarks a personal crusade. Romney and Huckabee both regularly rail against out-of-control spending. Indeed, by our very quick count, candidates other than Paul referenced spending cuts 14 times in this debate alone.
– by Brooks Jackson, with Viveca Novak, Jess Henig, Joe Miller, Lori Robertson and D'Angelo Gore
Sources
Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin, Jacqui Motroni, Sheila Palma and Paulo Tobar. "Mass Jobs: Meeting the Challenges of a Shifting Economy," 28 Nov. 2007.
"Budget Recommendations: Line Item Listing." 2003. The Governor's Budget Recommendations: 2004. 31 Jan. 2008.
Riedl, Brian M. “Why Tax Rate Reductions Are More Stimulative Than Rebates: Lessons from 2001 and 2003.” The Heritage Foundation, 18 Jan. 2008
Congressional Budget Office. "The Budget and Economic Outlook: Fiscal Years 2008 – 2012." January 2008. Congressional Budget Office. 31 Jan. 2008.
Office of Management and Budget. "Department of State and Other International Programs." 2007. Budget of the United States Government, Fiscal Year 2008, 31 Jan. 2008.
Rick Klein, "Mass. Is Called No. 1 in Fee Hikes," Boston Globe. 24 July 2003.
Energy Information Administration. "Analysis of S.139, the Climate Stewardship Act of 2003," June 2003.
Massachusetts Taxpayers Foundation. "2004 Budget: Major Strides, But More Pain Ahead." 11 Aug. 2003. Massachusetts Taxpayers Foundation: Research and Publications, 31 Jan. 2008.