A Project of The Annenberg Public Policy Center

Dueling Economic Ads


A conservative group's ad makes the rise in unemployment under President Obama appear worse than it actually is. And in a counter-attack ad, a liberal group offers its spin on GOP economic plans.

Crossroads GPS, which spent heavily in the midterm elections to defeat Democrats, is spending $5 million to air its latest ad in 10 states and on national cable channels. It says it will spend a total of $20 million on similar messages in the next two months. The spot, which began airing June 27, says "the facts about the Obama record" are that unemployment has gone up by "25 percent." It cites NBC's "Meet the Press" and shows a chart adapted from the June 12 episode of the program that does indeed say that. Problem is, NBC was wrong.

The chart in the ad says that unemployment went from 7.3 percent in January 2009 to 9.1 percent now. NBC's version says that 7.3 percent was the rate on inauguration day. But it wasn't. The rate was 7.8 percent when Obama was sworn in. So, there has been a 16.7 percent increase in unemployment, not a 25 percent jump.

The 7.3 percent figure was the unemployment rate for December 2008, but NBC should have used the January 2009 figure. The Bureau of Labor Statistics says its monthly figures come from looking at a one-week snapshot, which is the "calendar week (Sunday through Saturday) which includes the 12th day of the month." For January 2009, that week ended on Jan. 17, three days before Obama took office. Therefore, the 7.8 percent unemployment for that month is the best figure to use to compare the labor situation under Obama's presidency.

The Crossroads ad (and NBC) goes on to point out that the debt has gone up by 35 percent (true) and that gas prices have more than doubled — a 104 percent increase — on Obama's watch (also true). They've gone from the bargain-basement-sounding $1.83 a gallon to $3.74, the most recent figure available before NBC's June 12 show. (National gas prices have slipped a bit to $3.52 now.) But is it fair to hold the president accountable for the high price of gas? We looked into whether that moratorium on deepwater drilling, issued in the wake of last year's oil spill in the gulf, had an impact on gas prices. One Wall Street oil analyst told us it had "zero" effect on what Americans pay at the pump. Oil production in the U.S. actually increased in 2009 and 2010, and is projected to drop slightly this year; imports, too, are down.

The ad also says that the economic stimulus has "failed," but that's a matter of opinion. The nonpartisan Congressional Budget Office's latest analysis, published in May, said that the stimulus had "[l]owered the unemployment rate by between 0.6 percentage points and 1.8 percentage points" and increased the number of persons working by 1.2 million to 3.3 million. CBO's high estimate is still short of the 3.5 million jobs that Obama had said would be created by the end of 2010, so it's accurate to say the stimulus has failed to live up to initial expectations. White House advisers wrongly estimated that the stimulus would bring the unemployment rate down to 7 percent — though they also thought the rate without the stimulus would be lower than it actually is, and they made clear that "substantial uncertainty" surrounded those estimates.

The Liberal Response

Crossroads GPS' ad didn't go unnoticed by the liberal group Priorities USA Action, a political action committee founded by former White House aides. It launched a counter ad that doesn't dispute that the economy isn't doing so well, but says "the ads blaming President Obama for the economy are politics at its worst." Priorities USA goes on to blame Republicans for bad economic plans in the spot, which has considerably less money behind it than Crossroads'. The group told us it's spending $750,000 in five of the 10 states where the conservative ad is airing.

The ad says Republicans "have opposed economic reforms at every turn," but that's an exaggeration. The support for the ad only points to quotes about Republicans opposing Obama — which is hardly the same as opposing "reforms." Besides, House Republicans did back Rep. Paul Ryan's budget plan to cut government spending by trillions more than the president's budget over a decade.

Speaking of the Ryan plan, the ad goes on to criticize it as "a plan that would essentially end Medicare for future retirees." We'll give credit to Priorities USA for making clear that the GOP Medicare plan mainly affects "future retirees," but the line may well leave the impression that those retirees would get nothing from the government, which isn't true. Ryan's Medicare plan doesn't call for an end to any and all programs for seniors' care. It does call for a radical change to Medicare — from a system in which the government directly pays health care providers for seniors' care, to one in which seniors receive subsidies with which to buy their own insurance on a special Medicare exchange of private plans. (See our past articles for more on how the Ryan Medicare plan would work.)

The ad also says Republicans want to "slash education," which refers to GOP efforts to cut the budget for Pell Grants. Republicans argue that the expanding budget for those student grants is unsustainable.

Finally, the ad ends by saying Republicans are doing all of this "while giving huge tax breaks to big oil and the wealthy." Those "huge tax breaks to big oil" already exist — it's misleading to suggest that the GOP is giving the oil companies more. Instead, Republicans have blocked Democratic attempts to repeal the tax breaks, and the Ryan plan proposes no changes to those breaks. It's true that the Republican plan proposes to cut taxes for "the wealthy" — however one wants to define that — but it aims to broaden the tax base in general.

— Lori Robertson