Fact Checking Rep. Bachmann's "Tea Party Response" To The State Of The Union
Bachmann: "Failed Stimulus," And Unemployment "Spiked"
BACHMANN: Unfortunately, the President's strategy for recovery was to spend a trillion dollars on a failed stimulus program, fueled by borrowed money.[...] Not only did that plan fail to deliver, but within three months the national jobless rate spiked to 9.4 percent. And sadly, it hasn't been lower for 20 straight months. While the government grew, we lost more than 2 million jobs. Let me show you a chart. Here are unemployment rates over the past ten years. In October 2001, our national unemployment rate was at 5.3 percent. In 2008 it was at 6.6 percent. But, just eight months after President Obama promised lower unemployment, that rate spiked to a staggering 10.1 percent.
Unemployment Didn't "Spike" — It Grew Steadily Under Bush-Era Policies...
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]
[Washington Post, 8/12/10]
- From December 2007 Through July 2009, Economy Lost Nearly 400,000 Private Sector Jobs Per Month On Average. According to Bureau of Labor Statistics data on monthly gains and losses in private sector jobs, the private sector added 23,000 jobs in December 2007. In June 2009, the sixth month of the Obama presidency, the private sector shed 452,000 jobs. Over that 19-month span, the private sector shed 393,000 jobs per month on average, the data show.
Dec 07 23,000 Jan 08 -12,000 Feb 08 -85,000 Mar 08 -58,000 Apr 08 -161,000 May 08 -253,000 Jun 08 -230,000 Jul 08 -257,000 Aug 08 -347,000 Sep 08 -456,000 Oct 08 -547,000 Nov 08 -734,000 Dec 08 -667,000 Jan 09 -806,000 Feb 09 -707,000 Mar 09 -744,000 Apr 09 -649,000 May 09 -334,000 Jun 09 -452,000 AVG -393,000[BLS.gov, accessed 1/25/11]
...Until Obama Policies Began To Take Effect
CBO estimates that ARRA's policies had the following effects in the third quarter of calendar year 2010:
- They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
- Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
- Increased the number of people employed by between 1.4 million and 3.6 million, and
- Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers). [CBO, November 2010]
Bachmann Wrongly Blamed President Bush's Final Year Of Deficits On President Obama
BACHMANN: But, instead of cutting, we saw an unprecedented explosion of government spending and debt, unlike anything we have seen in the history of our country. Deficits were unacceptably high under President Bush, but they exploded under President Obama's direction, growing the national debt by an astounding $3.1 trillion-dollars.
Bachmann supported her claim with a chart that wrongly attributes the FY 2009 deficit to President Obama:
The Exploding Debt And Deficit Are The Result Of Bush-Era Policies And The Recession
[U.S. Treasury via Flickr.com, accessed 1/25/11]
Bachmann Repeated "16,500" IRS Agents' Lie
BACHMANN: What did we buy? Instead of a leaner, smarter government, we bought a bureaucracy that tells us which light bulbs to buy, and which will put 16,500 IRS agents in charge of policing President Obama's healthcare bill.
"16,500 IRS Agents" A False Claim Based On Partisan Analysis Of Bill
Q: Will the IRS hire 16,500 new agents to enforce the health care law?A: No. The law requires the IRS mostly to hand out tax credits, not collect penalties. The claim of 16,500 new agents stems from a partisan analysis based on guesswork and false assumptions, and compounded by outright misrepresentation...This wildly inaccurate claim started as an inflated, partisan assertion that 16,500 new IRS employees might be required to administer the new law. That devolved quickly into a claim, made by some Republican lawmakers, that 16,500 IRS "agents" would be required. Republican Rep. Ron Paul of Texas even claimed in a televised interview that all 16,500 would be carrying guns. None of those claims is true. [FactCheck.org, 3/30/10; emphasis original]
This figure originated with a report put out by Republicans on the House Ways and Means Committee on March 18...The analysts based their 16,500 figure on an assumption that the IRS budget "could" require an additional $10 billion over the next 10 years as a result of the law, a figure they attribute to the Congressional Budget Office...The GOP analysts then inflated their estimate by making a couple of false assumptions.No desks? First, they assume that all the new "administrative" spending projected by CBO would go for payroll and benefits - without any allowance for desks, computers, office rent, utilities, travel or other overhead costs necessary to run any government enterprise. The partisan analysts simply divided the spending (which they figured could be $1.5 billion per year once the law is fully effective) by the current average payroll cost for the entire IRS workforce...The GOP analysts then inflated their estimate by making a couple of false assumptions.No pay raises? The second false assumption is that there will be no inflation or pay raises over the next decade. They apply fiscal 2009 cost figures to budgets for 2014 through 2019. In fact,CBO currently projects that the Employment Cost Index will rise 1.4 percent next year and reach 3 percent per year in 2015 and thereafter. Even if the partisan analysis is valid, that would further reduce the maximum number that could be hired by another 1,000 in 2014, and by about 2,800 in 2019, by our calculations. [FactCheck.org, 3/30/10; emphasis original]
Bachmann: Repeal Affordable Care Act, Or "Be Forced To Rely On Government-Run Coverage"
BACHMANN: In the end, unless we fully repeal ObamaCare, a nation that currently enjoys the world's best healthcare may be forced to rely on government-run coverage that will have a devastating impact on our national debt for generations to come.
There Is No "Government-Run Coverage" In The Affordable Care Act
"Government takeover" conjures a European approach where the government owns the hospitals and the doctors are public employees. But the law Congress passed, parts of which have already gone into effect, relies largely on the free market:
• Employers will continue to provide health insurance to the majority of Americans through private insurance companies.
• Contrary to the claim, more people will get private health coverage. The law sets up "exchanges" where private insurers will compete to provide coverage to people who don't have it.
• The government will not seize control of hospitals or nationalize doctors.
• The law does not include the public option, a government-run insurance plan that would have competed with private insurers.
• The law gives tax credits to people who have difficulty affording insurance, so they can buy their coverage from private providers on the exchange. But here too, the approach relies on a free market with regulations, not socialized medicine. [PolitiFact.com, 12/16/10, emphasis added]
Bachmann Claimed The Affordable Care Act Doesn't Allow Insurance Sales Across State Lines
BACHMANN: And, the President should repeal ObamaCare and support free market solutions like medical malpractice reform and allow all Americans to buy any healthcare policy they like anywhere in the United States.
Health Care Reform Already Permits Insurance Sales Across State Lines
Interstate Insurance Sales Are Only An Effective Cost-Control Mechanism With Consumer Protections In Place
Under the earlier proposals, insurers could sell coverage to residents of any state, with the insurer complying with insurance regulations in the state in which the company was based, instead of the regulations of the state in which the consumer lived. Several researchers analyzed these proposals within the context in which they had been proposed-that is, without other insurance market reforms or significant subsidization of coverage for the low-income population.All three analyses reached similar conclusions. [...] While these policies, absent other insurance regulatory reforms, could provide lower-cost insurance options for healthier and younger individuals living in more highly regulated states, the savings would come at the price of increasing insurance costs for older adults and those in less than perfect health. Insurance could also be expected to become less comprehensive across the board in such a context, leading to higher out-of-pocket burdens on those using health care services. [Urban Institute, August 2010, emphasis added, internal citation deleted for clarity]
Bachmann Got It Wrong On Corporate Tax Rates
BACHMANN: We need to start making things again in this country. And we can do that by reducing the tax and regulatory burden on job creators. America will have the highest corporate tax rate in the world. Think about that.
American Corporations Do Not Actually Pay The Highest Corporate Tax Rate In The World, And President Obama Called For Lowering Statutory Corporate Tax Rates In His Address
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.So tonight, I'm asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years- without adding to our deficit. [Obama State of the Union Address, 1/25/11, emphasis added]
As noted in Chapter 1, reducing the statutory rate of corporate income tax has been the most popular government tax reform in the period.However in most of the economies, the case study company does not pay corporate income tax at the statutory rate on its profit before tax, since the tax rules require adjustments to be made to this in order to calculate taxable profits. A common example is to substitute tax depreciation for commercial amortisation of assets.The effective rate of current corporate income tax can be defined as the actual rate of corporate income tax paid as a percentage of profit before tax. Figure 2.7 compares this effective rate with the statutory rate of corporate income tax for the G8 and BRIC (Brazil, Russia, India and China) economies, and shows that the two are often not the same...["Paying Taxes 2009: The Global Picture," World Bank, 11/10/08; in-text citation removed for clarity]