Research Briefing

In Frantic Push To Save Democrats’ Jobs,

Obama’s Speech Bends Reality And His Record

SIZE OF GOVERNMENT

OBAMA CLAIM: “I Believe Government Should Be Lean.” OBAMA: “I believe government should be lean, government should be efficient, I believe government should leave people free to make the choices they think are best for themselves and their families, so long as those choices don't hurt others.“ (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: Since President Obama Took Office His Policies Have Added $2.812 Trillion To The National Debt. (Department Of The Treasury, “The Debt To The Penny And Who Holds It,” TreasuryDirect.gov, Accessed 9/8/10)

• As Of September 7, 2010, The Total Debt Of The US Government Is $13.438 Trillion Dollars. (Department Of The Treasury, “The Debt To The Penny And Who Holds It,” TreasuryDirect.gov, Accessed 9/8/10)

Federal Reserve Chairman Bernanke Says U.S. Debt Level Is “Unsustainable” Which Could Cause Interest Rates To Spike And “Cause Financial Instability Like We Saw In Greece.” “But Ben Bernanke’s recent warning is ominous. The Fed chief calls America’s debt level ‘unsustainable’ and says if financial markets lose confidence, interest rates could spike and ‘cause financial instability like we saw in Greece.’” (Editorial, “Heed Bernanke On Federal Debt,” The Denver Post, 6/20/10)

SPENDING

OBAMA CLAIM: “It Was An America Where You Didn't Buy Things You Couldn't Afford; Where We Didn't Just Think About Today - We Thought About Tomorrow. … That's The America I Believe In.” (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: According To OMB’s Mid-Session Review, The Deficit Will Be A Historically High $1.47 Trillion This Year. (Mid-Session Review, Budget of The U.S. Government Fiscal Year 2011, Office of Management and Budget, 7/23/10)

• Obama Rang Up Record-Setting $1.42 Trillion Deficit In 1^st Year In Office, Nearly Triple The Previous Record. (David Jackson, “Obama Team Makes It Official, Budget Deficit Hits Record. By A Lot,” USA Today’s “The Oval“ Blog, 10/16/09)

OBAMACARE

OBAMA CLAIM:  “That's Why We Passed Health Insurance Reform That Stops Insurance Companies From Jacking Up Your Premiums At Will Or Denying Coverage Because You Get Sick.” (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: Health Insurers Will Need To Increase Premiums Between 1% And 9% As A Result Of ObamaCare.  “Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats' efforts to trumpet their signature achievement before the midterm elections. Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.” (Janet Adamy, “Health Insurers Plan Hikes,” The Wall Street Journal, 9/8/10)

• “The Rate Increases Largely Apply To Policies For Individuals And Small Businesses And Don't Include People Covered By A Big Employer Or Medicare.”  (Janet Adamy, “Health Insurers Plan Hikes,” The Wall Street Journal, 9/8/10)

PRIVATE SECTOR

OBAMA CLAIM: “I Believe It's The Private Sector That Must Be The Main Engine Of Our Recovery.” OBAMA: “See, I've never believed that government has all the answers to our problems. I've never believed that government's role is to create jobs or prosperity. I believe it's the drive and ingenuity of our entrepreneurs, our small businesses, the skill and dedication of our workers, that has made us the wealthiest nation on Earth. I believe it's the private sector that must be the main engine of our recovery.” (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: Since The Stimulus Was Passed Public Sector Employers Have Lost 128,000 Jobs, While The Private Sector Has Shed 2,384,000 Jobs. (Bureau Of Labor Statistics, “The Employment Situation – August 2010,” BLS.gov, 9/3/10)

Small Businesses “Sidelined” By Obama’s Reckless Agenda. “Mom-and-pop firms, usually the first to resume hiring, are stymied by slow demand, the real estate slump and uncertainty about the future.  ... Adding to the uncertainties for businesses of all sizes are the shaky global economy and the prospects of higher taxes to deal with the federal deficit and higher costs to deal with healthcare and the recent government overhaul of financial regulations.” (Don Lee, “Small Business Sidelined In Slow Recovery From Recession,” The Los Angeles Times, 7/3/10)

• And Uncertain About Their Future Due To A Bevy Of New Taxes And Regulations. “Joy Staveley of Flagstaff, Ariz., said it was clear to her why people are more scared to take a risk on a new business: There are more regulations, taxes and government-mandated costs — and fears of more to come — with President George W. Bush's tax cuts expiring soon, new healthcare rules and pending legislation on energy.” (Don Lee, “Small Business Sidelined In Slow Recovery From Recession,” The Los Angeles Times, 7/3/10)

THE STIMULUS

OBAMA CLAIM: “[T]here Are Roughly Three Million Americans Who Are Working Today Because Of The Economic Plan We Put In Place.” (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: Since The Stimulus Was Passed, 2.5 Million Americans Have Lost Jobs. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 9/8/10)

• Obama Promised That His Stimulus Plan Would Create Or Save 3.5 Million Jobs Over Two Years. OBAMA: "Now, what makes this recovery plan so important is not just that it will create or save 3.5 million jobs over the next two years ..." (President Barack Obama, Remarks At The Signing Of The American Recovery And Reinvestment Act, Press Release, Denver, CO, 2/17/09)

The National Unemployment Rate Is 9.6%. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 9/8/10)

• Obama Promised Unemployment Would Not Rise Above 8 Percent With Stimulus. (Christina Romer and Jared Bernstein, "The Job Impact Of The American Recovery And Reinvestment Plan," 1/9/09)

The Associated Press: “The Government Is About To Confirm What Many People Have Felt For Some Time: The Economy Barely Has A Pulse.” (Christopher S. Rugaber, “Snapshot Of Economy About To Get A Lot Bleaker,” The Associated Press, 8/27/10)

DEMS’ TAX HIKE

OBAMA CLAIM: Democrats’ Proposed Tax Hikes On Small Business Are Good For The Economy. OBAMA: “So let me be clear to Mr. Boehner and everybody else: we should not hold middle class tax cuts hostage any longer. We are ready, this week if they want, to give tax cuts to every American making $250,000 or less. That’s 98, 97 percent of Americans. Now for any income over this amount, the tax rates would just go back to what they were under President Clinton. This isn't to punish folks who are better off – God bless them - it's because we can't afford the $700 billion price tag. And for those who claim that our approach would somehow be bad for growth and bad for small businesses, let me remind you that with those tax rates in place under President Clinton, this country created 22 million jobs, and raised incomes, and had the largest surplus in history.“ (Pres. Barack Obama, Remarks At The Cuyahoga Community College West Campus, Parma, OH, 9/8/10)

REALITY: Dems’ Income Tax Increase Will Hit Small Businesses That Create 60 To 80 Percent Of New Jobs, “Discouraging” Their “Growth Or Expansion.” “They want to restore the higher, Clinton-era tax rates on the top two individual income brackets, increasing the 33 and 35 percent rates to 36 and 39.6 percent. But these higher rates won't just hit high wages; they'll hit business income ... Depending on how we define 'small business,' these higher tax rates would raise taxes on 45 to 55 percent of small business income ... So why should we pay attention to the way our tax code treats small businesses? They are an important source of innovation and risk-taking, creating between 60 and 80 percent of net new jobs, employing over half the labor force ... Higher income tax rates reduce the investment spending of entrepreneurs and the likelihood that they invest at all, discouraging the growth or expansion of small businesses.” (Robert Carroll, "Small Business And The Personal Income Tax Rates," Tax Foundation, 10/28/08)

• Nearly Half Of The Business Income That Is Reported On Personal Tax Filings Goes To Families And Business That Would Have Their Taxes Raised By Dems. “The numbers are clear. According to IRS data, fully 48% of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007. That's the number to look at, not the 3%.” (Kevin A. Hassert and Allan D. Viard, Op-Ed, "The Small Business Tax Hike And The 97% Fallacy," The Wall Street Journal, 9/3/10)
• “It's Clear That Business Income For Large And Small Firms Will Be Hit By The Higher Tax Rates. And In Point Of Fact, Firms Of All Sizes Contribute To The Nation's Prosperity.” (Kevin A. Hassert and Allan D. Viard, Op-Ed, "The Small Business Tax Hike And The 97% Fallacy," The Wall Street Journal, 9/3/10)