President Barack Obama made a couple of questionable claims during a recent interview with Steve Kroft of CBS’ “60 Minutes.”
- Obama said that “John McCain’s former economist” said that the stimulus “created or saved 3 millions jobs.” Mark Zandi did say that the stimulus created about that many jobs, but the registered Democrat was one of many advisers to McCain, not his chief economist.
- Obama also said “the majority of Republicans” believe there should be “a balanced approach to deficit reduction, including tax increases for the wealthy.” A recent Quinnipiac University poll, however, found that 73 percent of Republicans favor spending cuts only. And a CNN/ORC International poll found that 59 percent of Republicans said taxes should not be included.
- And he said that “every economist says we need” the payroll tax cut extension to “help sustain the recovery.” Many economists believe that extending the payroll tax cut would grow the economy and create jobs, but not all agree on the impact it would have.
Kroft’s interview with Obama took place on Dec. 9 and aired on CBS on Dec. 11.
‘McCain’s Economist’ Touts Stimulus?
Obama disagreed with Kroft that there was a “general perception that the stimulus was not enough” or “didn’t work.”
Kroft: I’m not saying this as fact, and hindsight is always 20-20. But there’s [a] general perception that the stimulus was not enough. That it really didn’t work. That…
Obama: Let me stop you there, Steve. First of all, there’s not general perception that the stimulus didn’t work. You’ve got John McCain’s former economist and a whole series of prominent economists, who say that it created or saved 3 millions jobs and prevented us from going into a great depression. That works.
Some economists do believe that the stimulus was effective in creating or saving thousands and even millions of jobs. That includes Mark Zandi, chief economist at Moody’s Analytics, who estimated in a July 2010 report that the stimulus added “almost 2.7 million jobs to U.S. payrolls.” But Zandi was not “John McCain’s former economist,” as we’ve written before when others have labeled him as such.
It’s true that Zandi was one of those who offered advice to McCain’s 2008 presidential campaign, as we reported back in 2010. But he was just one of many. McCain’s chief economic adviser was Douglas Holtz-Eakin. And as we’ve reported before, Zandi says that he is a registered Democrat.
Obama was also using a high-end estimate for jobs created or saved by the stimulus. In a November report, for example, the nonpartisan Congressional Budget Office said that the stimulus — compared with what would have occurred otherwise — “increased the number of people employed by between 0.4 million and 2.4 million” in the third quarter of 2011. At its peak of effectiveness in the third quarter of 2010, the stimulus was responsible for increasing the number of persons employed by a maximum of 3.6 million, and it could have been less than half that, CBO said.
Most Republicans Favor Tax Increases?
Obama also claimed that most Republicans favor raising taxes on the wealthy in order to help bring down the deficit.
Obama: I mean, the interesting thing is the majority of Republicans actually think we should have a balanced approach to deficit reduction, including tax increases for the wealthy.
We found three recent polls on the subject: One supported the president’s claim, and the others didn’t.
A CBS News/New York Times poll conducted back in September asked, “Do you think any plan to reduce the federal budget deficit should include only tax increases, or only spending cuts, or a combination of both tax increases and spending cuts?” According to the results, 57 percent of Republicans believed that a deficit-reduction plan should include both spending cuts and tax increases. The survey’s margin of error was plus or minus 4 percentage points for Republicans.
But a recent Quinnipiac University poll conducted in November found something completely different. The poll asked, “From what you know so far, do you think the deficit-reduction proposal should include some increases in tax revenue or should it include only cuts in government spending?” The results showed that 73 percent of Republicans believed that a deficit-reduction plan should include spending cuts only.
And a CNN/ORC International poll also conducted in November asked if “increases in taxes on businesses and higher-income Americans” should be included in a deficit-reduction proposal. Only 39 percent of Republicans said that those tax increases should be included, while 59 percent said that they should not. The survey had a margin of error of plus or minus 6.5 percentage points.
Payroll Tax Cut Extension Necessary?
Obama also claimed that “every economist ” says it is necessary to extend the payroll tax cut, as he would like to.
Obama: I would love nothing more than to have the Republicans say, “We’re gonna be focused on trying to solve problems and not score political points.” And the best example is the debate we’re having right now around the payroll tax cut extension. This is a deal that we cut last year that every economist says we need to help sustain the recovery.
It’s true that many economists believe that continuing the payroll tax cut would provide a boost to the economy. As we’ve written previously, Douglas Elmendorf, director of the Congressional Budget Office, told a Senate committee in November that “the increase in take-home pay would spur additional spending by the households receiving the higher income, and that higher spending would, in turn, increase production and employment.” And both Joel Prakken of Macroeconomic Advisers and Zandi of Moody’s Analytics believe that further reducing, or even just extending the current payroll tax cut, would increase both gross domestic product and employment.
However, not every economist necessarily sees it that way.
ABC News recently reported that David Kautter, managing director of the Kogod Tax Center at American University, favors extending the tax cut, because without it “you’d end up reducing money in consumer’s pockets and that would end up reducing demand.” But he also said — based on what he has read and talking with other economists — that “there is a clear division in the economic community among economists as to the impact of the payroll tax reduction for this year.”
One who doesn’t believe that extending the payroll tax cut will do much good is Andrew Biggs, a resident scholar of the conservative-leaning American Enterprise Institute, who was also quoted in the ABC News report. Biggs told FactCheck.org that while he wasn’t sure he would “go to the mat to get rid of the payroll tax cut,” he doubted it “will do a heck of a lot to get the economy going.”
– D’Angelo Gore