It is nice to know how many times President Obama’s State of the Union address was interrupted by applause (eighty-six, including forty-six standing ovations, Fox News says).
But even better—and, um, actually useful—are serious scrubs of the boasts, brags, and promises he made.
Insta-fact-checking of politicians’ claims is such a well-established Internet-era news practice that it’s easy to forget how useful it is, especially in such wonk-intensive areas as economic and fiscal policy. Let’s check the checkers.
The New York Times did nice work on this front, including a tough examination of the Obama assertion that, “because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed.”
That number is drawn from a complex assessment published two weeks ago by his Council of Economic Advisers, which puts the number at between 1.5 million and 2 million — within the range, but a bit on the high side, of several recent economic estimates. It is a ballpark estimate, and it includes the ripple effects of tax cuts, near-zero interest rates and other policies. When the White House tried in October to tally actual jobs saved by $159 billion in stimulus spending, its estimate of 640,000 was widely criticized as flawed. The economic advisers’ latest assessment, instead, provided several “plausible” ways of estimating the job revenues; the number Mr. Obama chose to cite in his speech was the highest of seven estimates in the report.
It was based on comparing the number of people currently employed with projections that the council said economists would have made many months ago, using typical methods, before the stimulus package was passed. An alternative method used by the council, based on standard economic computer models, suggested the number was 1.7 million. The Congressional Budget Office’s latest estimates ranged from a low case of 800,000 to a high of 2.4 million, and three private economic measures ranged from about 1 million to 1.5 million.
PolitiFact, which won the Pulitzer Prize for National Reporting for its coverage of the 2008 election, trotted out its color-coded (and trade-marked) Truth-O-Meter for the occasion. Its analysis includes a lengthy look at PAYGO, the “pay as you go” budget rules that force Congress to offset any new spending with an equal amount of revenue or budget cuts. Obama supports it, and calls PAYGO “a big reason why we had record surpluses in the 1990s.”
He is correct that it is a basic principle behind the effort to balance the budget, but his statement somewhat overstates the policy’s importance in achieving that goal.
Yes, PAYGO rules provided some discipline that might have restrained Congress from adding more spending or new tax cuts, but the economy and the defense cuts were the biggest factors that led to the balanced budget. So we find his statement Half True.
Good stuff.
But The Washington Post wins this Internet-era contest hands down, with fact checks, reality checks, and gut checks of the speech.
On Obama’s pitch to eliminate tax breaks for oil companies, hedge fund managers and the wealthy:
These ideas are retreads from last year’s budget, which never saw action in Congress. Obama has proposed eliminating tax breaks for oil companies and taxing the income of hedge fund managers at the higher income tax rate rather than the lower capital gains rate. He has also vowed to permit the tax cuts enacted during the Bush administration to expire to families who make over $250,000 a year.
While lawmakers have not moved on the first two proposals, they are likely to proceed with the third. The Bush tax cuts are set to expire at the end of this year, and Democrats have made clear that families earning more than $250,000 and individuals earning more than $200,000 will pay higher taxes on income and capital gains in 2011.
You kind of suspected that, but now you know.
The Post followed quickly with this sharp analysis of Obama’s plan to use an executive order to create a bipartisan fiscal commission, after the Senate’s failure to create a congressionally mandated panel that would have been assured a vote on its proposals:
A commission created by executive order has huge credibility problems, even among Democrats who support the idea. To date, Obama and House leaders have been unable to assure deficit hawks that the recommendations of a presidentially-appointed committee would be given an up-or-down vote in Congress.
A larger problem is the threat by key Republicans to boycott the panel. Sen. Judd Gregg (R-N.H.), an ardent advocate of a fiscal commission, has derided a presidentially-appointed panel as little more than an effort to give Democrats political cover on the deficit in the runup to this fall’s elections. No matter the form of the commission, it would not make its recommendations until after the elections, and lawmakers would not have to take a position on potentially painful tax hikes and spending cuts in popular social programs until the end of this year.
Capital Gains and Games, an insidery-but-understandable group blog that boasts some of Washington’s best budget brains, provides a handy rundown of the president’s “market-moving statements.” This bit about the much-hyped spending freeze is especially intriguing:
Discretionary spending freeze to save $250 b. over the next 10 years. That’s just over 4% of the underlying $6 tr. baseline. There are plenty of exceptions, defense, homeland security, veterans benefits, education, and probably some more we haven’t seen yet.
Reuters smartly seizes on a particularly bold bit of presidential goal-setting that caught our attention: to “double our exports over the next five years, an increase that will support two million jobs in America.”
How does that work?
The U.S. Chamber of Commerce, which has locked horns with Obama on healthcare and a number of other issues during his first year in office, has been urging him for months to set a national goal to double exports.
To accomplish that goal, Obama announced a “national export initiative” to help farmers and small businesses sell more of their goods overseas, and also promised to reform export controls that high-tech manufacturers say are out of date.
A recent study for the National Association of Manufacturers estimated modernizing the controls could boost U.S. exports by $56 billion annually within the next 10 years without jeopardizing national security.
That’s a start. The piece goes onto talk about possible trade deals, but still: Could someone please explain exactly how we’re going to get there?
Holly Yeager is CJR’s Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at holly.yeager@gmail.com.