Aug. 30 (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 with the facts.
New Jersey’s Balanced Budget
The Claim: New Jersey Governor Chris Christie, in his keynote address at the Republican National Convention, said that when he came to office he faced an $11 billion deficit. “Three years later, we have three balanced budgets with lower taxes.”
The Background: Christie’s term began in 2010, with the state facing a budget shortfall exacerbated by the financial collapse and subsequent deep recession. He promised not to raise state taxes.
The Facts: Christie was stretching the truth about taxes and claiming credit for a balanced budget that is required by the state constitution. On the way to balance, he cut $820 million in funding to public schools and lowered aid to towns and cities. Local governments said the cuts forced them to fire workers, raise real estate taxes and cut services.
Christie has held the line on state income taxes. Yet his reductions in aid to schools and local governments, combined with cuts to property tax rebate programs, have pushed up the average property-tax bill by 20 percent from 2009, according to state data. New Jersey has the highest property taxes in the nation at an average of $7,759 in 2011, and residents making as much as $200,000 pay more in real estate levies than income taxes, according to legislative budget analysts.
New Jersey faces more budget pain: Revenue may have missed Christie’s targets by as much as $540 million for the fiscal year that ended June 30, according to the nonpartisan Office of Legislative Services.
The Debt Clock
The Claim: A national debt clock overlooking the convention floor shows a total national debt that swells before delegates’ eyes.
The Background: Four years of trillion-dollar federal budget deficits have inflamed Republican opposition to the Obama administration’s spending plans. The party ranks eliminating deficits and reducing debt as one of the most important issues, and the clock is intended to dramatize it with a blur of rising numbers.
The Facts: The clock is accurate. The estimated federal deficit for the current fiscal year is $1.1 trillion, according to the Congressional Budget Office. That translates into an addition to the federal debt of approximately $3 billion every day; $126 million every hour; $2.1 million every minute; and about $35,000 every second. So it isn’t hard to see why the numbers on the Republican debt clock are spinning.
As of Aug. 28, the total public debt outstanding was $15,978,918,589,911.74. At one point in the middle of the afternoon the following day, the convention clock showed $15,979,996,600,900.
There is one caveat. The clock lumps debt held by investors with “intragovernmental holdings,” debt one arm of the government owes another part of the government. An example: treasury securities held in the Social Security trust fund. That’s real debt, too, of course, but most economists don’t include it in their calculations of an economy’s vulnerability to a debt crisis. The total debt held by the public is $11,198,791,218,734.06. Feel better?
Jobs and Obamacare
The Claim: Texas Republican Representative Pete Sessions said that the Patient Protection and Affordable Care Act will cost “a net 800,000 new jobs if we do nothing.”
The Background: Republicans have universally opposed President Barack Obama’s health-care overhaul. They fought its passage, then sued but failed in their bid to have it overturned. Presidential nominee Mitt Romney has vowed to repeal the law.
The Facts: The jobs claim, which Republicans have made repeatedly, is misleading at best. The Congressional Budget Office looked at the issue back in 2010 and found that “the legislation, on net, will reduce the amount of labor used in the economy by a small amount -- roughly half a percent -- primarily by reducing the amount of labor that workers choose to supply.” According to CBO, half a percent of the projected 2020 labor force equals about 800,000 people. What CBO found is not what the Republican charge implies: that 800,000 workers will lose their jobs. Rather it said most of the reduction will come from people choosing to work less -- perhaps older workers retiring - - because they will have health coverage made affordable by the subsidies provided by the law. Such voluntary decisions could open jobs for some looking for work.
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