A pro-Romney TV spot running heavily in Iowa touts an unproven claim that the candidate “helped create thousands of jobs” as CEO of an investment firm. When we asked the super PAC sponsoring the ad for proof of its claim, a spokeswoman said: “We aren’t supplying that information.” And so far, neither is the Romney campaign.
The ad from super PAC Restore Our Future also rehashes Mitt Romney’s claim that he didn’t raise taxes in Massachusetts when he was governor, when in fact he raised hundreds of millions in new government “fees.” And it recycles his boast of making 800 vetoes, failing to mention that 700 were overridden.
Pro-Romney super PAC Restore Our Future has been sitting on a huge war chest, having amassed $12.2 million in the first six months of 2011 alone, according to its midyear report filed with the Federal Election Commission. The independent PAC has now stepped into the fray in a big way with the launch of a $3.1 million ad campaign in Iowa including this 30-second ad, titled “Now You See the Problem.”
The ad begins by contrasting Romney’s private sector experience with that of President Barack Obama. “How many jobs did Barack Obama create as a community organizer? As a law professor?” the narrator asks, as the screen flashes the rhetorical answer, zero. “Maybe now you see the problem.” The narrator then continues:
Restore Our Future ad: Mitt Romney turned around dozens of American companies and helped create thousands of jobs. He rescued an Olympics hit by scandal. He took over a state facing huge deficits. And he turned it around without raising taxes, vetoing hundreds of bills.
A Job Creator?
The ad’s claim that “Mitt Romney turned around dozens of American companies and helped create thousands of jobs” refers to the years Romney spent as CEO of the highly-profitable investment firm Bain Capital, which he co-founded.
This is a very difficult number to prove or disprove. Many of the companies Bain invested in grew, and added jobs, but some downsized or went bankrupt. As Robert Gavin wrote for the Boston Globe in 2008: “It’s impossible to say precisely if more jobs were created than cut by Bain since the firm does not track employment in its investments.”
We contacted a spokeswoman for Restore Our Future, Brittany Gross, and asked for backup for the claim that Bain created a net of thousands of jobs while Romney was employed there, as the ad claims. Gross emailed back: “We aren’t supplying that information.”
Since Romney himself has claimed “in those 100 businesses we invested in, tens of thousands of jobs, net-net, were created,” we also reached out to the Romney campaign for backup. But we did not get a response.
To be sure, Bain has invested in companies that have added thousands of jobs. For example, early on, Bain invested in the office supply store Staples, which now employs more than 90,000 people.
But some companies cut jobs. For example, Politico noted that in 1992, Bain acquired the firm American Pad & Paper, and that by 1999 two American plants were closed and 385 jobs had been cut.
Los Angeles Times, Dec. 3: Bain expanded many of the companies it acquired. But like other leveraged-buyout firms, Romney and his team also maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits. Sometimes Bain investors gained even when companies slid into bankruptcy.
Bain managers told the Los Angeles Times they were focused on profit, not job creation.
“I never thought of what I do for a living as job creation,” Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years, told the Los Angeles Times. “The primary goal of private equity is to create wealth for your investors.”
Again, that doesn’t mean Restore Our Future and Romney’s claims about net job creation aren’t accurate. Bain officials told the Boston Globe the companies in which they invested added more jobs than they cut. It just means no one has produced an analysis to substantiate a firm number one way or the other.
No New ‘Taxes,’ But Lots of Fees
The ad is correct about Romney facing huge deficits when he became governor of Massachusetts in 2003. When he stepped into office, the state budget was projected to be $3 billion short. But the state took in about $1.3 billion more in capital gains taxes than had been expected, and $500 million in unanticipated federal grants further reduced the predicted shortfall. So the projected gap ended up being closer to $1.2 billion.
Romney closed that $1.2 billion gap and passed a balanced budget. But as we noted in 2007, his oft-touted cuts in wasteful programs and duplicate agencies made only a small dent, saving about $10.5 million dollars, according to an estimate by the independent, nonpartisan Massachusetts Taxpayers Foundation. More significant was the $277 million that Romney cut from the state’s local education aid budget and the $130 million cut from higher education, moves that shifted at least part of the tax burden onto towns and counties.
There’s another misleading aspect to Romney’s claim that he closed the deficit without raising taxes. He increased government fees by hundreds of millions of dollars.
As we wrote in 2007 when Romney was making his first presidential bid, Romney in 2003 doubled fees for court filings (which include marriage licensing fees), professional registrations and firearm licenses. Romney also quintupled the per gallon delivery fee for gasoline. All told, the fees raised more than $400 million in their first year. Romney also “closed loopholes” in the corporate tax structure, a move that generated another $150 million in increased revenue.
In addition, Romney cut aid to local cities and counties. In 2004, Romney cut nearly 5 percent, or about $230 million, from the local aid budget. The Massachusetts Municipal Association, representing the state’s cities and towns, said Romney’s cut “forced communities statewide to cut services and raise local taxes and fees.”
Most Vetoes Overridden
The ad also suggests that part of the state’s turnaround came about due to Romney “vetoing hundreds of bills.” A graphic that flashes on the screen is more specific: “Vetoed 800 bills.”
Not mentioned is that more than 700 of Romney’s vetoes were overturned by the Massachusetts Legislature.
Back in 2007 when Romney made a similar claim, FactCheck.org independently obtained a complete list of veto overrides covering all four of Romney’s budgets and found that the overrides for fiscal years 2004, 2005, 2006 and 2007 totaled 707 of the more than 800 line-item vetoes that Romney had issued. Massachusetts’ Legislature, the General Court, was overwhelmingly Democratic while Romney was governor. But in some cases even the Republicans went against Romney. A minimum wage bill that Romney vetoed in 2006 was overridden unanimously, for example.
— Robert Farley