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A Project of The Annenberg Public Policy Center

Bachmann Wrong on Social Security, Jobs, Debt

Michele Bachmann argued that “my facts are accurate” at the Dec. 15 debate, but a few days later, she got several facts wrong. On “Meet the Press” the presidential candidate had a couple of exchanges with host David Gregory over the validity of her statements on Social Security and the debt. Among the inaccuracies:

  • Bachmann said she didn’t support the payroll tax cut because “it denied $111 billion to the Social Security trust fund”and “put senior citizens at risk.” That’s false. The shortfall will be covered by the government’s general fund.
  • She said, “There isn’t one shred of evidence that [the payroll tax cut] created jobs.” Actually, there’s plenty of evidence. Several economists say extending the cut will boost employment, and the unemployment rate has gone down since the tax decrease took effect.
  • Bachmann gave a false comparison of the increase in the debt under President Barack Obama and President George W. Bush, using a deficit figure for Bush that makes the debt under Obama look worse.

Shorting the Trust Fund?

Bachmann said she didn’t support last year’s payroll tax cut, because it took money from the Social Security trust fund and “put senior citizens at risk.” But that’s not true. The Social Security and Medicare Boards of Trustees said that the tax cut would have “no financial impact” on the trust fund.

Bachmann, Dec. 18: Well, I didn’t support it a year ago when it was first proposed, and the reason why I didn’t is because it, it denied $111 billion to the Social Security trust fund. I didn’t think that that was a good thing to do last year. I don’t think it’s a good thing to do this year. … [I]t’s put senior citizens at risk by denying the $111 billion to the Social Security trust fund.

Reducing the Social Security payroll taxes paid by employees by 2 percentage points (to 4.2 percent) obviously brings in less money for Social Security. But the trust fund isn’t suffering as a result. The government must cover the shortfall with general fund money.

The Social Security and Medicare Boards of Trustees said in its 2011 report: “The loss of payroll tax revenue due to this one-year reduction will be made up by transfers from the General Fund of the Treasury to the OASI and DI Trust Funds and will thus have no financial impact on either program.”

The Congressional Budget Office estimated that the tax cut, passed in December 2010, would reduce Social Security revenues by about $115 billion in fiscal 2011 and 2012. Again, that shortfall will be covered by the general fund. The trust fund isn’t being “denied” any money, as Bachmann claimed.

Congress and the White House are now working to pass an extension of this tax cut, and arguing over how to pay for it. Paying for it, of course, would mean the trust fund again won’t be shortchanged.

Ignoring the Evidence

Bachmann claimed that there “isn’t one shred of evidence” that the payroll tax cut created jobs. But there is actual evidence. This is the second time we’ve pointed this out this month.

Bachmann, Dec. 18: And remember, the reason why President Obama proposed it in the first place was to create jobs. There isn’t one shred of evidence that that created jobs. So it defeated its purpose …

There are several pieces of evidence that Bachmann ignores. First, the country has added jobs since the payroll tax cut was enacted — more than 1.4 million of them — and the unemployment rate has gone down from 9.4 percent to 8.6 percent. Second, economists say that cutting the payroll tax rate leads to job growth.

The Congressional Budget Office’s director said in November that cutting the payroll tax would “spur additional spending” and “increase production and employment.” Economist Joel Prakken of Macroeconomic Advisers said extending the cut for one year would create 400,000 jobs. Mark Zandi of Moody’s Analytics said that the job growth would be even higher — 750,000 — if a deeper tax cut, to 3.1 percent, as the president wanted, was made.

Economists are not all in agreement as to how big of an impact the tax cut would have, however, or whether it’s needed to help the struggling economy. Andrew Biggs, a resident scholar of the conservative-leaning American Enterprise Institute, told us that he wasn’t sure he would “go to the mat to get rid of” it. But he doubted the tax cut “will do a heck of a lot to get the economy going.”

Even so, Bachmann is wrong when she says “[t]here isn’t one shred of evidence” that the tax cut boosts jobs.

Debt, Deficit Confusion

Bachmann gave a false and confused comparison of debt figures under President Bush and under President Obama. She said in 2007 “our debt for the entire year was $160 billion,” but under Obama, “we’re going into debt $1.5 trillion every year.” It’s true that the federal budget deficit (not the “debt”) for fiscal year 2007 was $161 billion, one of the lowest annual shortfalls during Bush’s term. It shot up to $459 billion the following year, which started and ended with Bush still in office and signing all the spending bills.

But Bachmann is wrong to say that “we’re going into debt $1.5 trillion every year.” It’s true that the federal deficit was $1.4 trillion in fiscal 2009 (which was nearly one-third over when President Obama was sworn in) and came in at just under $1.3 trillion in fiscal 2010 and 2011 (which ended Sept. 30.) But for the current fiscal year, it is projected to be much less thanks to an improving economy and substantial spending cuts negotiated in budget deals. The most recent projection from the Congressional Budget Office estimated the deficit this year will be $973 billion — well under Bachmann’s $1.5 trillion figure.

Gregory challenged the accuracy of Bachmann’s statement, saying that “the debt exploded under the Bush administration.” Here’s part of that exchange:

Bachmann: What, what I’m doing is I’m — what I’m doing is saying that what — the decisions that Barack Obama is making is acting like a banana republic. It’s absolutely irresponsible what President Obama is doing to get behind measures to, to increase spending to such a level that we’re going into debt $1.5 trillion every year. This compares to President George Bush. Back in 2007, our debt for the entire year was $160 billion.

Gregory: Congresswoman, that just misstates the record.

Bachmann: Well, we topped that just in the month of November alone. …

Gregory: …the, the debt — wait a minute, Congresswoman.

Bachmann: David, let me just finish.

Gregory: No, wait a minute. I just want to stop you for accuracy.

Bachmann: Let me just finish. We’re talking …

Gregory: For accuracy, the debt exploded under the Bush administration.

Bachmann: For accuracy. For accuracy. David, David, then, then let me finish. Do a comparison. I agree with you that there was too much money that was spent under George Bush. But for the year 2007, the debt for the year was $160 billion. The debt for this last year was about $1 1/2 trillion. That’s almost 10 times more in debt than George Bush. And just for the month of — for the month of, I think it’s November of this year, it was more than the entire year for 2007. So there’s no question that the debt has just skyrocketed under, under President Obama in comparison to George Bush.

It’s true that debt has risen faster under Obama than under Bush, for a variety of reasons. But Bachmann exaggerates.

In fact, total debt went up by $4.9 trillion, an 85.5 percent increase, from the day before Bush was inaugurated in 2001 until Jan. 20, 2009, when Obama took office. Under Obama, the debt has gone up by $4.47 trillion, a 42 percent jump. Of course, Obama has only been in office less than three years, and Bush was president for eight. Clearly, the debt has been increasing at a faster rate under Obama, but Bachmann twists her figures to make the difference look far larger than it actually is.

Bachmann also compares the 2007 deficit to the November increase in the debt, claiming that “it was more than the entire year for 2007.” We wouldn’t recommend cherry-picking numbers in this way, but for the record, total debt went up by $116.8 billion in November, which is not more than 2007’s debt increase, nor 2007’s deficit increase. So Bachmann was wrong on that point as well.

Bachmann has been strongly objecting to accusations of inaccuracy. Also at Thursday’s debate, she said that her “facts are accurate,” after Gingrich said that her facts were wrong. And we did find that she was correct when she said Gingrich did not take an opportunity to end federal funding for Planned Parenthood and that he campaigned for Republicans who supported so-called “partial-birth” abortion — though her claim about “partial-birth” abortion could have used context.

But on Sunday’s “Meet the Press,” her facts were not accurate at all.

— Lori Robertson