Aug. 27 (Bloomberg) -- In the heat of the presidential campaign, both sides have made statements that don’t square with reality. Here’s a look at some claims compared to the facts.
Obama’s Jobs Data
The Claim: Stephanie Cutter, deputy Obama campaign manager, said his record on job creation coming out of a recession was better than that of former Presidents George W. Bush and Ronald Reagan.
“Over the past, you know, 27 months, we’ve created 4.5 million private-sector jobs. That’s more jobs than in the Bush recovery, in the Reagan recovery,” she said.
The Background: The economy is the No. 1 issue in the campaign, and Republicans have hammered President Barack Obama on the sluggish recovery.
The Facts: Cutter was wrong. Bush and Reagan did better than Obama. She misspoke about the number of months it took Obama to see the recovery of 4.5 million private sector jobs. It was 29, not 27.
Measuring from the employment trough in February 2010, through July 2012, the economy did add the 4.5 million jobs Cutter cited. Over the same span from the employment low point under Bush, 4.7 million private-sector jobs were created.
Reagan’s record was 3.5 million better than Obama’s. There were 8 million private sector jobs added during the first 29 months after the December 1982 low point, compared with Obama’s 4.5 million. By another measure, net job growth since the official end of the recession 37 months ago, Obama does outperform Bush, 3.4 million to 1.1 million. Reagan’s recovery still leaves Obama in the dust: 9.1 million.
Romney on Medicare
The Claim: Mitt Romney says the Obama health-care overhaul would hurt Medicare beneficiaries.
“The trustees of Medicare estimate that approximately 4 million people will lose their coverage under Medicare Advantage,” he said.
The Background: The Medicare Advantage program allows beneficiaries to get coverage through private insurers, paid for by the government. More than a quarter of Medicare recipients used private plans in 2011.
The theory was that competition would lower costs. Instead, Medicare Advantage became more expensive than traditional Medicare: in 2010, the difference averaged 9 percent.
The Obama overhaul reduces payments to insurers by an estimated $136 billion through 2019, bringing them closer to traditional Medicare’s costs.
The Facts: Romney’s statement is half true. After the law was passed, Medicare’s trustees estimated that fewer people would get benefits through private plans. How many depends on which period you look at.
Even so, saying that people will “lose their coverage” suggests private insurers will drop them. That isn’t what the trustees predicted, and it’s unlikely. As payments to insurers fall, so will the extra benefits they offer, causing some people to choose traditional Medicare instead.
Romney’s claim also overlooks the fact that Medicare Advantage has failed to contain costs.
Romney on Obama’s Taxes
The Claim: Romney says tax increases hurt economic growth and shouldn’t be used to balance the budget.
“What they don’t understand is that raising taxes slows down growth and it’s like a dog chasing its tail. You’re never going to get to the balanced budget by raising taxes,” he said.
The Background: Part of Obama’s deficit-reduction plan would impose higher tax rates on the highest-earning households and caps on their tax breaks. Romney says he’ll balance the budget in eight to 10 years without tax increases.
The Facts: Tax increases were part of the successful deficit reduction effort of the 1990s under President Bill Clinton. The deficit was turned into a surplus and economic growth averaged 3.8 percent. The budget deficit returned under President George W. Bush, as taxes were cut while costs rose for the wars in Iraq and Afghanistan. Most economists say higher taxes may be a drag on growth in the short term, while smaller deficits help in the long term. A boost of 0.1 to 0.6 percent of gross domestic product could result from continuing the Bush-era tax cuts into 2013, according to an estimate by the Congressional Budget Office.
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