Sept. 6 (Bloomberg) -- The presidential campaigns are making statements about their opponents. Sometimes, they don’t square with the facts.
Obama’s Deficit Plan
The Claim: President Barack Obama “has offered a reasonable plan of $4 trillion in debt reduction over a decade,” former President Bill Clinton said in his prime-time speech at the Democratic National Convention in Charlotte, North Carolina, last night.
The Background: The budget deficit has taken a central role in this year’s presidential campaign. The $4 trillion figure mentioned by Clinton is politically significant because that’s how much was recommended by the chairmen of Obama’s 2011 deficit-reduction commission. For some budget experts, the panel’s proposal has become the standard of fiscal rectitude.
The Facts: Clinton was incorrect. Obama’s budget purports to cut the deficit by more than $4 trillion. Some of the savings are illusory, such as $700 billion that comes through an accounting gimmick related to war spending -- counting as budget cuts the money that won’t be used for wars that are ending. The deficit-reduction figure also includes more than $1 trillion in lower discretionary outlays that were already agreed to as part of a deal last year to raise the government’s debt limit.
Ultimately, what matters with a budget is how it affects the debt, not how much it purports to cut. That’s because when politicians claim to save a certain amount of money, they’re comparing their proposed budget to what they say the government would otherwise spend over the next decade.
Those predictions can be unreliable because of changing economic conditions, emergencies and other factors. What’s more, politicians inflate purported savings by exaggerating how much the government would spend in the absence of their budget. The more they assume, the bigger the savings appears.
It’s more important to look at how a budget affects the federal debt over the long term. Republican vice presidential nominee Paul Ryan’s plan would leave the government with a $15.3 trillion debt in 2022, which would be about 62 percent of the nation’s economy. Obama’s plan would results in an $18.8 trillion debt in 2022, or about 76 percent of the gross domestic product.
Israel and the Democrats
The Claim: The Democrats amended their platform Wednesday to say, “Jerusalem is and will remain the capital of Israel.”
The Background: Both political parties, courting Jewish voters, have long adopted platform language supporting Israel’s claim to Jerusalem as its capital, although the United Nations has rejected annexation and said the city’s status should be decided as part of a negotiated peace with Palestinians.
Such a plank initially was left out of this year’s draft Democratic platform. After Republican presidential candidate Mitt Romney assailed the missing pledge as evidence that President Barack Obama was less committed to Israel, the platform was amended to include the Democrats’ 2008 language.
The Facts: The platform language may be symbolic of support for Israel, though U.S. policy is unlikely to change, no matter who is elected in November. Presidents of both political parties have promised to recognize Jerusalem as Israel’s capital and to move the U.S. embassy from Tel Aviv to Jerusalem. None, including Bill Clinton, George W. Bush and Obama, has acted on that pledge once in office.
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