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A Project of The Annenberg Public Policy Center

Romney’s Ad ‘Deceitful & Dishonest’?

The Obama campaign is in a lather over Mitt Romney’s first TV spot, calling it “a deceitful and dishonest attack” because of an edited quote from 2008. That’s a matter of opinion. We find a far more consequential issue is the ad’s exaggerated claim that the new health care law is “killing jobs.” The truth is that the law’s effect on employment is expected to be slight, and the law’s main requirements on employers don’t become effective until 2014.

The Romney campaign posted the 60-second ad on its website Nov. 21 and said it would begin airing it in New Hampshire Nov. 22. It attacks President Obama and makes no mention of Romney’s Republican primary opponents, as though Romney has already secured the nomination.

We won’t quibble with the spot’s main message, which is that Obama has failed to fix the economy. That’s true enough.

The ad shows snippets from a speech Obama gave in New Hampshire on Oct. 16, 2008, just weeks before he was elected. He is heard to say, “I am confident that we can steer ourselves out of this crisis,” and “We need a rescue plan for the middle class,” and “It’s going take a new direction.”

On screen the ad shows graphics saying “He Promised He Would Fix The Economy” and “He Failed.” And the fact is that the unemployment rate was 6.6 percent when candidate Obama made that speech, and it was 9 percent last month — and the economy is still growing only sluggishly.

What the Obama campaign chose to take issue with was how the then-candidate’s words were edited in a section where he is heard to say, “If we keep talking about the economy, we’re going to lose.” Obama was actually quoting his Republican opponent. The full quote is: “Senator McCain’s campaign actually said, and I quote, if we keep talking about the economy, we’re going to lose.”

Is that “deceitful and dishonest,” as Obama campaign spokesman Ben LaBolt quickly claimed? Or “blatantly dishonest,” as the liberal group ThinkProgress described it? It is possible that a viewer might be misled into thinking that Obama said this about his own campaign in 2011, since the quote comes 23 seconds after a graphic cites Obama’s comments as being uttered in 2008. But we’ll leave that for our readers to determine.

Though a TV viewer would not know it, the Romney campaign put the full quote in the press release that it sent to campaign reporters, along with an explanation:

Gail Gitcho, Romney Communications Director: Three years ago, candidate Barack Obama mocked his opponent’s campaign for saying ‘if we keep talking about the economy, we’re going to lose.’ Now, President Obama’s campaign is desperate not to talk about the economy.

Very few viewers will recall that Obama’s words were mocking McCain, however. So was this just a failed attempt at irony rather than an attempt to fool viewers? Again, we’ll leave that for our readers to decide.

Health Care Law ‘Killing Jobs’?

We do, however, find a more serious problem with the ad. Romney is shown saying that “Obamacare” is “killing jobs.” But, as we’ve written before, independent experts say the law will have a “small” or “minimal” impact on labor, and much of the effect will come from persons deciding to work less or retire earlier because their insurance is more secure and they receive subsidies to buy it. This Republican talking point is greatly exaggerated.

This isn’t the first time Romney has made the claim. Other politicians who have made “job-killing” assertions — including House Speaker John Boehner and presidential candidate Michele Bachmann — have pointed to the nonpartisan Congressional Budget Office, but they have badly distorted what the CBO actually said.

The CBO said the law would “reduce the amount of labor used in the economy by a small amount—roughly half a percent—primarily by reducing the amount of labor that workers choose to supply.” CBO Director Douglas Elmendorf told Congress in February that “half a percent” would be equivalent to about 800,000 workers by the end of the decade. Republicans, such as Bachmann, seized on this as evidence that the CBO said the law would “kill 800,000 jobs,” but basic reading comprehension skills show that’s not the case.

The CBO explained that the Medicaid expansion and subsidies for those with lower incomes would provide those persons with “additional resources” that “will encourage some people to work fewer hours or to withdraw from the labor market.” Those close to retirement may retire earlier than normal, because of insurance protections, such as coverage for preexisting conditions, that are part of the federal law.

It’s true that some jobs would still lost, according to CBO — it said some businesses could hire more part-time or seasonal workers instead of full-time employees, in order to avoid giving those workers insurance or paying a penalty. And health care expert John Sheils, senior vice president of The Lewin Group, a subsidiary of UnitedHealth Group that operates with editorial independence, told us shortly before the law was enacted that he estimated a small loss of jobs, around 150,000 to 300,000 low-wage jobs, a range that doesn’t include increases in health and insurance sector employment. He said that overall, there would be a “small net job loss.”

The Romney campaign made no effort to back up the claim in its press release about the ad; it simply noted that the candidate said it in a Nov. 7 speech. When we contacted the campaign about this, a spokesman pointed us to several news articles mostly saying that some companies were stating that they might have to lay off workers in response to the law. But only one example was of a company that actually said it was going to dismiss workers. Bloomberg News reported that the drug manufacturer Abbott Laboratories said in a statement that the law had cost it about $200 million in  2010 in the form of increased rebates required to Medicaid, and that this was one of several reasons it was laying off 1,900 workers. Other factors included “the challenging regulatory environment” and spending reductions by European governments.

The Romney campaign also pointed to some medical device manufacturers loosely claiming that a new excise tax on their products “could” cause it to lay off workers or send jobs overseas. A spokesman for the fast-food chain White Castle told the Cleveland Plain Dealer that the law could increase costs for the company in 2014, once employer requirements kick in, and other articles sent to us by the campaign focused on tanning salon owners and associations complaining that the 10 percent tax on tanning services will hurt their businesses.

We agree that some industries are directly affected by the law — including tanning salons and medical device manufacturers, who have protested the new excise taxes. But the smattering of articles from the Romney campaign is scant evidence for the exaggerated claim that the law is “killing jobs.”

It may interest readers to know that similar “job-killing” claims have been made about the Massachusetts health care law, signed by Romney. Texas Gov. Rick Perry said it had cost 18,000 jobs, referring to a questionable study from a conservative think tank. Small-business representatives told us that insurance costs have been a concern, but Bill Vernon, state director of the National Federation of Independent Business, said the economy — not health care — was the factor driving employment.

— Brooks Jackson and Lori Robertson