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A Project of The Annenberg Public Policy Center

Obama on ’60 Minutes’

In an hour-long, one-on-one interview after a self-described "shellacking" at the polls, President Barack Obama reflected on his first two years in office during an appearance on "60 Minutes." We found the president overstated his case on spending for veterans and the U.S. market share of electric car batteries. He also said U.S. workers are the world’s most productive, but that’s open to interpretation. He was correct, however, when he said the bank bailout will cost taxpayers less than the 1980s’ savings-and-loan crisis.

Veterans’ Spending

The president, who was interviewed by Steve Kroft in a show that aired Sunday, boasted that he has raised spending for veterans more than other recent presidents:

Obama: We’ve probably done more than any administration over the last 20, 30 years when it comes to increasing veteran spending. Because we’ve got over a million folks who’ve served in Iraq and Afghanistan who’ve come back with post-traumatic stress disorder you know, traumatic brain injury.

That was true last year, but only in terms of raw dollars. Bigger percentage increases took place under Obama’s predecessor, George W. Bush.

Final spending figures for fiscal year 2010 (which ended Sept. 30) show that total spending on all "veterans’ benefits and services" reached $108 billion, an increase of $13 billion over the previous year. That’s the largest one-year increase in that category on record, according to official historical budget figures.

But in percentage terms, the increase amounted to 13.6 percent. And the fact is, spending on this category increased 112 percent during the eight fiscal years for which Bush signed the spending bills, and there were bigger one-year increases in fiscal years 2005 (17.4 percent) and 2008 (16.3 percent).

Electric Car Batteries

The president also gave an idealistic view of the United States’ market share for electric car batteries.

Obama: In advanced batteries that go into electric cars. We used to have 2 percent of the market. We’re now on pace, because of the investments that we made, to see us have as much as 40 percent of the market by 2015. So, in five years we went from 2 percent of the world market potentially to 40 percent of the world market. And those jobs are in places like Michigan and Ohio that had been really hard hit by the exodus of manufacturing jobs.

Notice he said the U.S. will have “as much as 40 percent of the market by 2015,” and he repeated that this is “potentially” the case. The truth is that the U.S. is on pace to have the capacity to produce 40 percent of the world market by 2015. As a July Department of Energy report said: “By 2012, thanks in part to the Recovery Act, 30 factories will be online and the U.S. will have the capacity to produce 20 percent of the world’s advanced vehicle batteries. By 2015, this share will be 40 percent.”

That doesn’t mean the U.S. will actually produce 40 percent of the world’s electric car batteries, as our colleagues at PolitiFact.com discovered this summer when White House Senior Adviser David Axelrod was making the claim.

This jump in capacity was spurred by stimulus investments ($2.4 billion), Department of Energy money ($80 million) and a tax credit program — all for electric battery manufacturing plants and research and development projects. But a lot stands in the way — mainly the high cost of these batteries and demand for electric cars — before the U.S. can live up to that potential capacity.

The DOE report predicts a dramatic decline in the cost of electric car batteries over the next 20 years, but it remains to be seen if that will happen — and if Americans want to drive these cars. The Washington Post explored the will-they-buy-it questions raised by the government’s investment when Obama was on hand for the groundbreaking of a battery plant in Michigan this summer. Menahem Anderman, the founder and president of Total Battery Consulting, told both the Post and Politifact that he estimated the U.S. market share would be closer 10 percent by 2015.

That DOE report lists several battery and electric car component plants in Michigan. But it doesn’t say anything about Ohio, the other state the president mentioned.

We’re No. 1?

Obama said U.S. workers are the "most productive workers in the world." We are among the most productive, but it’s debatable whether we are the most productive. 

The International Labour Organization of the United Nations issued a 2007 report that declared "the U.S. still leads the world by far in labour productivity per person employed in 2006." An Associated Press story on the U.N. report said:

AP, Sept. 3, 2007: Each U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, ahead of Luxembourg, $55,641; Belgium, $55,235; and France, $54,609.

The productivity figure is found by dividing the country’s gross domestic product by the number of people employed. The U.N. report is based on 2006 figures for many countries, or the most recent available.

That remained so, at least as of 2008. The United Nations issued a new report last year that said we remained No. 1 in worker productivity:

Key Indicators of the Labour Market, Executive Summary: For decades, the highest labour productivity, measured as GDP per person engaged, was recorded in the United States. The year 2008 was no different; labour productivity per person reached US$65,480 in the United States. It is followed at a distance by Hong Kong, China (US$ 58,605), and Ireland (US$ 56,701).

But by that same measure — GDP per employed person — the U.S. Bureau of Labor Statistics ranked the U.S. second to Norway in 2009.

A BLS chart that ranks countries based on "real GDP per employed person" says each U.S. worker on average contributed $99,763 to the GDP – second to Norway, where it was $103,156. (The BLS figures are in U.S. dollars. Luxembourg was not on the BLS chart.)

By another measure – the GDP per hour worked – we are fourth, behind Luxembourg, Norway and Ireland, according to an analysis of 2009 economic data by the Organisation for Economic Co-operation and Development. That’s because U.S. employees work more hours (1,681 hours per person) than those in Luxembourg (1,601 hours), Norway (1,408 hours) and Ireland (1,584).

Suffice it to say we are very productive and working long hours.

Cost of TARP < S&L Crisis

We thought this Obama claim sounded fishy:

Obama: The bank interventions. TARP, that we inherited from the previous administration. The banks — we’re gonna make sure that they pay that money back. And it won’t have cost taxpayers as much as, say, the savings and loans crisis back in the ’80s. It’s still big.

But it turns out, he’s right. The U.S. Treasury estimated a month ago that the final cost of the much-despised Troubled Asset Relief Program — the "bank bailout" that fueled great voter anger almost from its start in 2008 — will turn out to be about $50 billion. (If that sounds hard to believe, consider that the taxpayers are currently showing a paper profit on government-owned shares of the huge insurance company AIG. According to the Treasury’s most recent report, after the latest restructuring is done, taxpayers will own 92 percent of AIG. Those shares were worth $69.5 billion, but cost taxpayers $47.5 billion.)

By contrast, the savings-and-loan debacle of the 1980s and early 1990s cost taxpayers much more. Back then, the government closed down more than 1,000 thrift institutions and banks after an orgy of reckless (and sometimes criminal) real-estate speculation funded by government-insured deposits. By the time the dust had settled, the total cost to taxpayers was put at $124 billion — more than double the currently projected cost of TARP, and that’s not even accounting for inflation.