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A Project of The Annenberg Public Policy Center

Obama’s Mis-tweets

In a "Twitter Town Hall" event, President Barack Obama repeated a disputed claim about the electric car battery market, and he claimed that the payroll tax holiday is worth $1,000 to "almost every single American" when many will get less than that.

Obama took questions from Twitter users — limited to 140 characters, of course — and gave more verbose answers in the July 6 televised event at the White House. He touted the fact that the U.S. had expanded its production of advanced batteries, used in electric cars, but he made the future sound brighter than it actually may be:

Obama, July 6: When I came into office, advanced batteries, which are used, for example, in electric cars, we only accounted for 2 percent of the world market in advanced batteries. And we have quintupled our market share, or even gone further, just over the last two years. And we’re projecting that we can get to 30 to 40 percent of that market. That’s creating jobs all across the Midwest, all across America.

The president made a similar statement in November on "60 Minutes." And we found that the projection wasn't that the U.S. would produce up to 40 percent of the advanced battery market — but, the U.S. would have the capacity to produce that much by 2015, according to a July 2010 report by the Department of Energy. One of the reasons for the expanded capacity is the stimulus law.

Department of Energy report: 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.

It's not known whether the demand for electric cars will be rise to the point where production would be as high as a 40 percent market share. One expert — Menahem Anderman, founder and president of Total Battery Consulting — said that the U.S. share would be about 10 percent by 2015, according to the Washington Post and Politifact

Update, July 8: We contacted Anderman to see if his prediction had changed since he first made it last year. He told us he expected the market share to still be 10 percent or less, but it could "get to the 15% range" if one includes U.S. production for foreign-owned companies LG Chem and Nissan.

Not a Tax Cut for Everyone

Obama also boasted that the payroll tax cut passed in December "put an extra $1,000 in the pockets of almost every single American." The president is giving an average for all taxpayers, not a figure for "almost every single American." The value of the tax cut depends on how much money each American makes. And the working poor ended up paying more as a result of the deal that included the payroll tax cut.

The deal cut the Social Security payroll tax rate from 6.2 percent to 4.2 percent for 2011. So, if you earn more, you save more. The tax cut will put an extra $2,136 in the pockets of those earning $106,800 a year. Any amount earned above that isn't subject to the Social Security tax. Kiplinger published a handy chart and tax calculator on what the cut would mean for various income levels. Those making $50,000 a year would get nearly $1,000 even ($999.60) for the year in their pockets, and those earning $30,000 would take home an extra $600.

But the payroll tax cut wasn’t a good deal for the working poor – those earning less than $20,000. The Tax Policy Center explained that the payroll tax deal meant the end of 2009's and 2010's Making Work Pay credit, which was a more beneficial for these low-wage earners. The Making Work Pay credit gave up to $400 to individuals earning between $6,452 and $75,000, and gave up to $800 to couples earning between $12,903 and $150,000. But, the TPC's Roberton Williams explained in a Dec. 8, 2010, blog post, "you won’t get $400 from the payroll tax cut until your earnings reach $20,000; earnings have to be twice that high to yield the $800 that MWP gave to couples. So single taxpayers who earn less than $20,000 and married couples earning less than $40,000 will pay more in taxes under the payroll tax cut than under MWP.”

The TPC also produced a chart showing the winners and losers of the tax cut trade-off. About 51 million Americans were better off with the Making Work Pay credit — they'll pocket $210 less on average for the year. But there are nearly 73 million other Americans who fare much better under Obama's more recent tax deal.

— Lori Robertson