FACT CHECK: Obama pushes plans that flopped before

By Calvin Wood­ward, Asso­ci­ated Press

WASHINGTON (AP) — It was a wish list, not a to-do list.

Pres­i­dent Barack Obama laid out an array of plans in his State of the Union speech as if his hands weren’t so tied by polit­i­cal real­i­ties. There can be lit­tle more than wish­ful think­ing behind his call to end oil indus­try sub­si­dies — some­thing he could not get through a Demo­c­ra­tic Con­gress, much less today’s divided Con­gress, much less in this elec­tion year.

And there was more recy­cling, in an even more for­bid­ding cli­mate than when the ideas were new: He pushed for an immi­gra­tion over­haul that he couldn’t get past Democ­rats, per­ma­nent col­lege tuition tax cred­its that he asked for a year ago, and famil­iar dis­cour­age­ments for com­pa­nies that move overseas.

A look at Obama’s rhetoric Tues­day night and how it fits with the facts and polit­i­cal circumstances:

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OBAMA: “We have sub­si­dized oil com­pa­nies for a cen­tury. That’s long enough. It’s time to end the tax­payer give­aways to an indus­try that’s rarely been more prof­itable, and double-down on a clean energy indus­try that’s never been more promising.”

THE FACTS: This is at least Obama’s third run at strip­ping sub­si­dies from the oil indus­try. Back when fel­low Democ­rats formed the House and Sen­ate majori­ties, he sought $36.5 bil­lion in tax increases on oil and gas com­pa­nies over the next decade, but Con­gress largely ignored the request. He called again to end such tax breaks in last year’s State of the Union speech. And he’s now doing it again, despite fac­ing a wall of oppo­si­tion from Repub­li­cans who want to spur domes­tic oil and gas pro­duc­tion and oppose tax increases generally.

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OBAMA: “Our health care law relies on a reformed pri­vate mar­ket, not a gov­ern­ment program.”

THE FACTS: That’s only half true. About half of the more than 30 mil­lion unin­sured Amer­i­cans expected to gain cov­er­age through the health care law will be enrolled in a gov­ern­ment pro­gram. Med­ic­aid, the federal-state pro­gram for low-income peo­ple, will be expanded start­ing in 2014 to cover child­less adults liv­ing near the poverty line.

The other half will be enrolled in pri­vate health plans through new state-based insur­ance mar­kets. But many of them will be receiv­ing fed­eral sub­si­dies to make their pre­mi­ums more afford­able. And that’s a gov­ern­ment pro­gram, too.

Start­ing in 2014 most Amer­i­cans will be required to carry health cov­er­age, either through an employer, by buy­ing their own plan, or through a gov­ern­ment program.

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OBAMA, ask­ing Con­gress to pay for con­struc­tion projects: “Take the money we’re no longer spend­ing at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”

THE FACTS: The idea of tak­ing war “sav­ings” to pay for other pro­grams is bud­getary sleight of hand. For one thing, the wars in Iraq and Afghanistan have been largely financed through bor­row­ing, so stop­ping the wars doesn’t cre­ate a pool of ready cash, just less debt. And the sav­ings appear to be based at least in part on inflated war spend­ing esti­mates for future years.

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OBAMA: “Through the power of our diplo­macy a world that was once divided about how to deal with Iran’s nuclear pro­gram now stands as one.”

THE FACTS: The world is still divided over how to deal with Iran’s dis­puted nuclear pro­gram, and even over whether the nuclear pro­gram is a prob­lem at all.

It is true that the U.S., Europe and other nations have agreed to apply the strictest eco­nomic sanc­tions yet on Iran later this year. But the global sanc­tions net has holes, because some of Iran’s large oil trad­ing part­ners won’t go along. China, a major pur­chaser of Iran’s crude, isn’t part of the new sanc­tions and, together with Rus­sia, stopped the United Nations from apply­ing sim­i­larly tough penalties.

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OBAMA: “Tonight, I want to speak about how we move for­ward, and lay out a blue­print for an econ­omy that’s built to last — an econ­omy built on Amer­i­can man­u­fac­tur­ing, Amer­i­can energy, skills for Amer­i­can work­ers, and a renewal of Amer­i­can values.”

THE FACTS: Econ­o­mists do see man­u­fac­tur­ing growth as a nec­es­sary com­po­nent of any U.S. recov­ery. U.S. man­u­fac­tur­ing out­put climbed 0.9 per­cent in Decem­ber, the biggest gain since Decem­ber 2010. Yet Obama’s appar­ent vision of a nation once again pro­pelled by man­u­fac­tur­ing — a vision shared by many Repub­li­cans — may already have slipped into the past.

Over gen­er­a­tions, the econ­omy has become ever more dri­ven by ser­vices; not since 1975 has the U.S. had a sur­plus in mer­chan­dise trade, which cov­ers trade in goods, includ­ing man­u­fac­tured and farm goods. About 90 per­cent of Amer­i­can work­ers are employed in the ser­vice sec­tor, a pro­found shift in the nature of the work­force over many decades.

The over­all trade deficit through the first 11 months of 2011 ran at an annual rate of nearly $600 bil­lion, up almost 12 per­cent from the year before.

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OBAMA: “The Taliban’s momen­tum has been bro­ken, and some troops in Afghanistan have begun to come home.”

THE FACTS: Obama is more san­guine about progress in Afghanistan than his own intel­li­gence appa­ra­tus. The lat­est National Intel­li­gence Esti­mate on Afghanistan warns that the Tal­iban will grow stronger, using fledg­ling talks with the U.S. to gain cred­i­bil­ity and stall until U.S. troops leave, while con­tin­u­ing to fight for more ter­ri­tory. The clas­si­fied assess­ment, described to The Asso­ci­ated Press by offi­cials who have seen it, says the Afghan gov­ern­ment hasn’t been able to estab­lish cred­i­bil­ity with its peo­ple, and pre­dicts the Tal­iban and war­lords will largely con­trol the countryside.

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OBAMA: “On the day I took office, our auto indus­try was on the verge of col­lapse. Some even said we should let it die. With a mil­lion jobs at stake, I refused to let that hap­pen. In exchange for help, we demanded respon­si­bil­ity. We got work­ers and automak­ers to set­tle their dif­fer­ences. We got the indus­try to retool and restruc­ture. Today, Gen­eral Motors is back on top as the world’s num­ber one automaker. Chrysler has grown faster in the U.S. than any major car com­pany. Ford is invest­ing bil­lions in U.S. plants and factories.”

THE FACTS: He left out some key details. The bailout of Gen­eral Motors and Chrysler began under Repub­li­can Pres­i­dent George W. Bush. Obama picked up the ball, ear­marked more money, and fin­ished the job. But Ford never asked for a fed­eral bailout and never got one.

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OBAMA: “We can also spur energy inno­va­tion with new incen­tives. The dif­fer­ences in this cham­ber may be too deep right now to pass a com­pre­hen­sive plan to fight cli­mate change. But there’s no rea­son why Con­gress shouldn’t at least set a clean energy stan­dard that cre­ates a mar­ket for innovation.”

THE FACTS: With this state­ment, Obama was renew­ing a call he made last year to require 80 per­cent of the nation’s elec­tric­ity to come from clean energy sources by 2035, includ­ing nuclear, nat­ural gas and so-called clean coal. He did not put that per­cent­age in his speech but White House back­ground papers show that it remains his goal.

But this Con­gress has yet to intro­duce a bill to make that goal a real­ity, and while leg­is­la­tion may be intro­duced this year, it is unlikely to become law with a Republican-controlled House that loathes mandates.

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OBAMA: “Right now, because of loop­holes and shel­ters in the tax code, a quar­ter of all mil­lion­aires pay lower tax rates than mil­lions of middle-class households.”

THE FACTS: It’s true that a minor­ity of mil­lion­aires pay a lower tax rate than some lower-income peo­ple. On aver­age, though, wealthy peo­ple pay taxes at a much higher rate than middle-income taxpayers.

Obama’s claim comes from a Con­gres­sional Research Ser­vice report that com­pared fed­eral taxes paid by peo­ple mak­ing less than $100,000 with those paid by peo­ple mak­ing more than $1 mil­lion. About 10 per­cent of fam­i­lies with incomes under $100,000 paid more than 26.5 per­cent in fed­eral income, pay­roll and cor­po­rate taxes. And about a quar­ter of mil­lion­aire tax­pay­ers paid a rate lower than that.

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OBAMA: “We can’t bring back every job that’s left our shores.… Tonight, my mes­sage to busi­ness lead­ers is sim­ple: Ask your­selves what you can do to bring jobs back to your coun­try, and your coun­try will do every­thing we can to help you succeed.”

FACT CHECK: Many of the jobs U.S. com­pa­nies have cre­ated over­seas won’t return because they were never in the United States in the first place.

As Obama said in his speech, U.S. work­ers have become more pro­duc­tive and labor costs have fallen.

But there are pow­er­ful forces push­ing the other way: Many of the over­seas jobs in U.S. com­pa­nies weren’t trans­ferred from the U.S. They were cre­ated in fast-growing mar­kets in Latin Amer­ica, Asia and else­where to serve cus­tomers in those mar­kets. Com­pa­nies in the Stan­dard & Poor’s 500 index now earn more than half of their rev­enue from overseas.

That has fueled more job cre­ation abroad. U.S. multi­na­tion­als cut more than 800,000 jobs in the United States from 2000 to 2009, accord­ing the Com­merce Depart­ment. They added 2.9 mil­lion over­seas in the same period.

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OBAMA: “Any­one who tells you that Amer­ica is in decline or that our influ­ence has waned doesn’t know what they’re talk­ing about … That’s not how peo­ple feel from Tokyo to Berlin; from Cape Town to Rio; where opin­ions of Amer­ica are higher than they’ve been in years.”

THE FACTS: Obama left out Arab and Mus­lim nations, where pop­u­lar opin­ion of the U.S. appears to have gone down­hill or remained unchanged after the spring 2011 reformist upris­ings in the Mid­dle East. A Pew Research Cen­ter sur­vey in May found that in pre­dom­i­nantly Mus­lim coun­tries such as Turkey, Jor­dan and Pak­istan, views of the U.S. were worse than a year ear­lier. In Pak­istan, a major recip­i­ent of U.S. for­eign aid that went unmen­tioned in Obama’s speech, just 11 per­cent of respon­dents said they held a pos­i­tive view of the United States.

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Asso­ci­ated Press writ­ers Tom Raum, Anne Gearan, Ricardo Alonso-Zaldivar, Mar­tin Crutsinger, Jim Drinkard, Dina Cap­piello, Erica Werner, Andrew Tay­lor, Christo­pher S. Rugaber and Stephen Ohlemacher con­tributed to this report.

Posted by AP News on Jan 25 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.