In a March fundraising letter to Floridians, Mitt Romney skews economic statistics under President Barack Obama. Among the letter’s claims:
- Romney says the numbers for unemployment, bankruptcies and foreclosures are “soaring.” That’s simply not true. They all started rising sharply under Bush, continued to rise for a time under Obama, but then peaked and are currently declining.
- Romney claims Obama stood over “the greatest job loss in modern American history.” But more jobs were lost under his predecessor.
- The former governor is wrong when he claims Obama increased the budget by more than 20 percent. Romney attributes to Obama a big rise in spending for fiscal year 2009 — which began under Bush, nearly four months before Obama took office. Spending in Obama’s latest budget is proposed to be about 8 percent higher than the fiscal 2009 spending levels.
Our thanks to Charles Bertram of Crawfordville, Fla., who uploaded the letter to our Spin Detectors website, through which we ask our readers to help us monitor political claims and campaigns across the country. Bertram, a registered Democrat, said he was amused that he received the letter in late March and decided to send it to FactCheck.org.
Romney’s letter is wrong when it claims that rates for unemployment, foreclosures and bankruptcy are “soaring.” He also ignores a report from the nonpartisan Congressional Budget Office that said Obama’s stimulus had a positive impact on the economy.
Romney Letter, March 9: Simply put, President Obama’s policies created a deeper recession and delayed the recovery. The consequence is soaring numbers of Americans enduring unemployment, foreclosures and bankruptcies.
As we’ve written before, the CBO found (see table 1) that Obama’s 2009 stimulus plan positively affected the economy, making its strongest impact in 2010. During the third quarter of that year, the unemployment rate lowered between 0.4 percentage points and 2 percentage points compared to what it would have been without the stimulus. The number of people employed grew by 700,000 to 3.6 million.
It’s simply not true that rates of unemployment, bankruptcies and foreclosures are “soaring.” Quite the contrary; They are all going down. The truth is that they all started rising sharply under Bush, continued to rise for a time under Obama, but then peaked and are currently declining.
The unemployment rate began its rise before Obama took office, surged nearly three percentage points — hitting 7.8 percent at the time Obama took office. The rate crested under Obama at 10 percent in October 2009. Since the peak, the rate has come down — steadily but slowly — and stood at 8.2 percent for March.
The number of bankruptcy filings ballooned during Bush’s last two years in office from 617,000 to 1.1 million. The trend continued until the number of filings peaked at 1.6 million in 2010. The federal government’s most recent data show bankruptcies fell 129,134 between September 2010 and September 2011. And the nonpartisan American Bankruptcy Institute says the number dropped 181,895 during the 2011 calendar year, because consumers reduced their spending and have less access to credit.
The number of households that received a foreclosure notice grew from 1.3 million to 2.3 million during Bush’s last year in office, according to RealtyTrac, a company that monitors foreclosures across the country. The number continued to rise under Obama to 2.8 million in 2009 and peaked at 2.9 million in 2010. However, the amount of households that received a foreclosure notice dropped to 1.9 million in 2011. This year, the number is expected to spike because of processing delays in 2011, but the rise will “most likely not be as severe as the previous peak,” according to RealtyTrac.
Repeated Job Loss Claim
Romney’s claim that Obama “stood watch over the greatest job loss in modern American history” is also wrong, as we’ve noted before. The truth is more jobs were lost under Bush than Obama, and most of the jobs lost since he took office have now been regained.
Since we wrote about this last year, the BLS has revised its statistics slightly for improved accuracy, as it does every year. The latest data show that “total nonfarm employment” (the standard measure of jobs) declined by nearly 8.8 million between its most recent peak in January 2008 and when the job slump bottomed out more than two years later, in February 2010. Of those lost jobs, nearly 4.5 million disappeared while Bush was president, and just over 4.3 million vanished during Obama’s first 13 months in office.
And since the job totals hit bottom there have been slow and steady gains, totaling nearly 3.6 million jobs. The total for March (released April 6) stood just 740,000 short of where it was in January 2009 when Obama was inaugurated.
Romney falsely claims Obama increased the budget by 20 percent. The former governor is attributing to Obama a big rise in spending for fiscal year 2009 — which began under Bush, nearly four months before Obama took office. Spending in Obama’s latest budget is proposed to be about 8 percent higher than the fiscal 2009 spending levels..
Romney: President Obama has mortgaged our future, increased the budget by more than 20% and allowed our debt to skyrocket.
We compared the total spending (see Table 1, outlays) in Bush’s last budget in 2009 to Obama’s proposed spending plan for fiscal year 2013. The difference is 8.1 percent — not 20 percent. Eric Fehrnstrom, a Romney spokesman, said it’s only fair to compare Obama’s spending to Bush’s 2008 budget because the 2009 plan includes spending from Obama’s stimulus bill. But the stimulus was a fraction of the budget and its overall increase. The CBO attributed much of the increased spending in 2009 to three government programs: the stimulus, the Troubled Asset Relief Program and legislation to address the mortgage crisis, all three totaling $353 billion. TARP and the mortgage bailout were passed under Bush. The stimulus, according to the CBO, amounted to $108 billion in spending in 2009. Obama certainly increased spending in 2009. But that doesn’t make the budget his.
Deciphering the Debt
Romney states that “by the end of his term [Obama] will add nearly as much debt as all the previous presidents combined.” That’s true if one looks at the debt held by the public — the measure economists say is most relevant to the overall economy. But it’s an exaggeration if measured by the larger figure usually cited by Obama’s critics — the gross debt, including money the government owes to itself. Fehrnstrom, Romney’s spokesman, said the statement is referring to debt held by the public.
Using the Treasury Department’s handy “debt to the penny” website, the debt owed to the public on Obama’s first day in office stood at $6.3 trillion, which amounts to the debt all previous presidents added. The CBO’s baseline projections, which assume no changes in current law, estimate (see page 14) the number will reach approximately $11.2 trillion by the end of the fiscal year on Sept. 30, 2012 —an increase of 77 percent — with four more months remaining in Obama’s term. CBO projects the debt to increase further during fiscal year 2013.
The percentage increase is not so pronounced when we consider gross federal debt, which was $10.6 trillion on Obama’s first day. Using CBO’s baseline projections, the number will reach $16 trillion — an increase of 51 percent — by the end of fiscal year 2012.
— Ben Finley