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The other rivals: Fact and interpretation

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To listen to Mitt Romney tell it, President Barack Obama is a job-killing, free-spending, big-government liberal who made the recession worse with his policies and endangered free-market capitalism. The president has spent tax dollars “at a pace without precedent in recent history,” Romney says, and “added almost as much debt as all the prior presidents combined.”

As Obama travels the country, he offers the opposite self-portrait, that of a job-creating, tightfisted, government-shrinking pragmatist who saved the country from another Great Depression. On his watch, “government employment has gone down,” he says, and federal spending has increased “at the lowest pace in nearly 60 years.”

With the presidential race largely focused on the economy and the budget, Obama and Romney are filling speeches with facts and figures designed to enhance their case and diminish the other guy’s, in the process often making assertions fundamentally at odds with one another. Along the way, both candidates are at times stretching the truth, using statistics without context, exaggerating their own records and misrepresenting their opponent’s. Each side regularly accuses the other of lying, and in any campaign there is a temptation to write both sides off, as if every misleading statement were equivalent. In reality, some are more fundamental than others, more egregious, more central to the larger argument. Romney, for example, called his 2010 book laying out the rationale for his candidacy “No Apology” — charging, falsely in the eyes of many independent fact-checkers, that Obama had traveled the world apologizing for America.

But determining who is the worse dissembler can be a subjective exercise, even in an age when news organizations, blogs and partisan groups blitz out regular fact-checks. When PolitiFact, the Pulitzer-winning project of the Tampa Bay Times, evaluated the statements, it found that more of  Romney’s were misleading than Obama’s. Glenn Kessler’s Fact Checker column at The Washington Post, on the other hand, has awarded roughly the same average “Pinocchio scores” — his measure of falsity — to both men.

Sometimes the truth or dishonesty of an assertion depends on definitions or on when you start counting. When it comes to unemployment, for instance, Romney counts from the month when Obama took office and inherited an economy that was hemorrhaging jobs at historic rates. Obama prefers to count from 2010, when his policies arguably had started to take effect and the job picture had begun turning around, eschewing blame for the losses at the start of his term.

But one thing is clear: While they claim distance from typical Washington politics, both men have mastered the ancient Washington art of selective storytelling.

ECONOMICS

Romney: “We are only inches away from no longer being a free economy.”

In attacking Obama’s stewardship of the economy, Romney has engaged in hyperbole at times — as with this claim. He has also contended that Obama made the recession “worse” and “last longer” and said that the president’s health care law would increase government spending to nearly half of the U.S. economy.

There is plenty of debate over how effective Obama’s economic policies have been, especially given the painfully slow recovery, but economists do not generally claim that Obama’s policies worsened the recession or made it longer.

The 18-month recession officially ended in June 2009, five months into Obama’s term, as measured by the National Bureau of Economic Research. And even critics who consider the president’s stimulus package a missed opportunity — from liberals who say it was too small to conservatives who say it was wasteful and poorly targeted — tend to acknowledge what the Congressional Budget Office has found: It did save and create jobs, lower unemployment and help the economy grow in the short term.

Despite Romney’s claim, the new health care law will not drive government spending up to half of the economy, unless all health care spending in the country is reclassified as government spending. Given that the new law still relies heavily on private insurance provided by employers, it is a stretch to treat all of that as if it were government expenditures.

Experts predict the new health care law will drive up health spending, as more people will be covered, but not by a huge share of the economy. The chief actuary for the Centers for Medicare and Medicaid Services estimated that with the new law, health care spending will rise to 21 percent of the economy in 2019. Without the new law, it estimated, it would have risen to 20.8 percent of the economy.

The Congressional Budget Office recently estimated what would happen to federal spending under a number of different situations, taking the new health care law into account. The projection showing the biggest jump found that assuming that a number of current tax cuts are extended and several budget cuts scheduled to take effect next year are averted, federal spending will rise to 29 percent of the economy in 2030 from 24 percent in 2011. But that rise is attributable in large part to rising interest payments required by ballooning debt.

And the idea that the United States has almost ceased to be a free-market economy was labeled “ridiculously false” by PolitiFact, which cited an economic freedom index from the Heritage Foundation, a conservative research group, which ranks the United States the world’s 10th-freest economy of 179 judged.

FEDERAL DEBT

Romney: Obama has “added almost as much debt as all the prior presidents combined.”

The total national debt now stands at $15.8 trillion, up from $10.6 trillion when Obama took office, an increase of nearly 50 percent. A commonly cited and more economically important subset, debt held by the public, has grown to $11 trillion from $6.3 trillion, a 75 percent increase — closer to Romney’s claim but still $1.7 trillion short of matching the accumulated public debt of the first 43 presidents. Adjusted for inflation, the debt Obama incurred is smaller relative to the combined prior debt.

FEDERAL SPENDING

Romney: “Federal spending has accelerated at a pace without precedent in recent history.”

Obama: “Since I’ve been president, federal spending has risen at the lowest pace in nearly 60 years.”

Both men may be exaggerating in their own ways — and once again it depends in part on when you start counting. The president based his claim on a column in Market Watch, which calculated that government spending during the Obama years has grown 1.4 percent annually, the lowest since President Dwight D. Eisenhower.

But that column started counting with the fiscal year that started on Oct. 1, 2009, more than eight months after Obama took office, on the theory that that was the first full fiscal year Obama could shape. It held Obama responsible for $140 billion in additional spending from those first eight months stemming largely from his stimulus spending program. The calculation also gave Obama credit for automatic spending cuts now scheduled for the next fiscal year, which the president opposes and which may not actually take effect.

Using different ways to calculate spending, The Washington Post found that spending has been going up 5.2 percent a year under Obama, while The Associated Press put the figure at 3 percent, excluding 2009. Either way, it is neither the “lowest pace in nearly 60 years,” as Obama claimed, nor “at a pace without precedent in recent history,” as Romney charged.

Going back to Eisenhower, federal spending has risen on average 7 percent a year, or 2.6 percent when adjusted for inflation. After the spending burst of 2009, Obama, constrained by Congress and aided by repayments of bank and auto bailouts, increased spending just 0.5 percent a year over the next three fiscal years when adjusted for inflation; only two other three-year periods since Eisenhower had lower spending growth.

Another way to judge spending is to look at what was anticipated based on the laws and policies at the time Obama took office versus what actually happened. In January 2009, days before he was inaugurated, the nonpartisan Congressional Budget Office forecast spending in the 2011 fiscal year, which ended Sept. 30, at $3.323 trillion. In reality, after the policies put in place by Obama and Congress, it turned out to be $3.603 trillion, 8.4 percent higher.

Yet another way to look at spending is as a share of the overall economy. For years up to and through most of George W. Bush’s presidency, federal spending generally totaled about 20 percent or less of the nation’s overall economic output. In Bush’s final full fiscal year in office, which ended Sept. 30, 2008, it rose to 20.8 percent.

The next fiscal year, in which Bush was president for four months and Obama for eight, it shot up to 25.2 percent, then dipped to 24.1 percent for each of the next two years, the highest levels since World War II. Of course one reason spending is a larger share of the economy is because the overall economy shrunk during the recession. But even if spending rose starkly during the economic crisis under the presidencies of both Bush and Obama, it has remained at the higher level since then under Obama.

JOB CREATION

Obama: “Over 4 million jobs created in the last two years.”

Romney: “He has not created jobs.”

Nowhere is the veracity of the candidates’ statements more central than on the economic issues at the heart of their contest. The question of job creation provides a quintessential case study. By counting from January 2009, Romney paints the bleak portrait of a country that despite a modest recovery still has fewer jobs than it did when Obama took office. According to the Bureau of Labor Statistics, the country has 552,000 fewer jobs now than when the president was inaugurated.

Obama starts his count in March 2010, after the money from his stimulus law was flowing and payrolls began growing again. And he generally cites private sector employment, so that he can say 4.3 million jobs have been created. Counting government workforces, the job growth is actually lower, 3.8 million jobs, according to the bureau.

Is it reasonable to start counting in January 2009? The economy was already shedding hundreds of thousands of jobs a month and none of Obama’s policies would take effect for some time. Starting the count just one month later would show a small net increase in jobs for the president’s tenure in office. Yet if he cannot be blamed for job losses in the early months of his term, can Obama be held responsible for not replacing the lost jobs more quickly?

SIZE OF GOVERNMENT

Obama: “The only time government employment has gone down during a recession has been under me.”

Again, it depends on how it is counted. Looking at the five months from Obama’s inauguration to June 2009, when the recession officially ended, and including state and local governments, which are not under his direct control, government employment at all levels was virtually unchanged, from 22,576,000 in January 2009 to 22,570,000 in June, according to the Bureau of Labor Statistics.

Total government employment was 21,969,000 in May 2012, a reduction of about 600,000 jobs. But looking only at the federal workforce under Obama’s direct control, then government employment has actually gone up. He inherited a federal work force of 2,061,700, and it rose slightly through June 2009 to 2,109,700; by May of this year, it had grown further to 2,204,100, a 7 percent increase.

Obama is not correct in saying this was the “only time” government shrunk during a recession. During the recession from July 1981 through November 1982, under President Ronald Reagan, and again during the recession from July 1990 through March 1991, under President George H.W. Bush, government employment shrank slightly, both overall and in the federal work force specifically. The White House said he meant the recession and the 35 months following it.

Either way, while Obama has boasted of shrinking the public workforce, he has advocated policies to prevent it from shrinking by helping state and local governments avoid laying off employees. In recent days, he has lamented that continuing economic troubles result in part from a decreasing public workforce.

TAX CUTS

Obama: “A record surplus was squandered on tax cuts for people who didn’t need them and weren’t even asking for them.”

Obama makes it sound as if the surpluses projected at the end of President Bill Clinton’s tenure disappeared entirely because of Bush’s tax cuts. In fact, tax cuts for the wealthy were responsible for a small fraction of the disappearing surpluses.

An analysis by the Congressional Budget Office last year showed that of $5.6 trillion in surpluses projected over 10 years when Bush took office, $1.6 trillion went to the tax cuts passed in 2001 and 2003, or 29 percent. The rest of the anticipated surpluses vanished because of increased spending and lower-than-expected revenues stemming from economic downturns.

Obama supports keeping the tax cuts for all but the wealthiest 2 percent of Americans, or roughly 18 percent of the total cost. Extrapolated, that means the tax cuts “for people who didn’t need them” would have accounted for just 5 percent of the disappearing surpluses.

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