The second presidential debate was full of claims about the economy, taxes, and regulation. Many of the top 10 true and false claims made during the first debate were repeated during the second. But there were also new claims warranting a closer look. We’ve selected seven new claims in this true/false quiz for you. See which ones you can guess right:
1. General Motors and Chrysler did go bankrupt.
Governor Mitt Romney: “And one thing that the President said, which I want to make sure that we understand, he said that I said we should take Detroit bankrupt.… Well, the President took Detroit bankrupt. You took General Motors bankrupt. You took Chrysler bankrupt.”
True. GM and Chrysler did go bankrupt, and the Obama Administration nationalized the firms. The federal government continues to own a quarter of the shares of GM, and taxpayers are some $25 billion in the hole.
2. Regulation skyrocketed under President Obama.
Romney: “The rate of regulations quadrupled under this President.”
True. The number of major rules—those that will cost the private sector $100 million or more each year—skyrocketed under President Obama. During the Administration’s term, 106 such major new regulations have been adopted, compared to 28 under Bush—a ratio of 3.8 to 1.
The President’s cost of regulation record is even worse. Rules imposed under the Obama Administration added $46 billion to the already high annual cost burden from regulation, compared to $8.1 billion in new costs during the first three Bush years, a whopping 5.6 to 1 ratio.
3. China’s currency policy is hurting jobs in the U.S.
Romney: “The place where we’ve seen manufacturing go has been China. China is now the largest manufacturer in the world. It used to be the United States of America. A lot of good people have lost jobs.… Because if they [China] put their currency down low, that means their prices on their goods are low. We lose sales.”
False. There is no relationship between the value of China’s currency and unemployment in the U.S. Even as China’s currency has slowly risen in value, American unemployment has soared. The real reasons for America’s decline in world competitiveness are found within the nation’s own borders. Chief among these is the sad reality that the U.S. imposes the highest corporate tax rate in the industrialized world.
4. The President has a strong record in favor of pipelines and oil production.
Obama: “I’m all for pipelines. I’m all for oil production.”
False. President Obama rejected the Keystone pipeline for no apparent good reason. The Keystone XL pipeline would deliver oil from Canada, relieve some of the pain of high prices at the gas pump, and create jobs in America. A State Department environmental review concluded that the project poses no significant environmental risk. Nevertheless, the President chose to reject TransCanada’s permit application to build the pipeline at a time of high unemployment and high gas prices.
Energy production on federal lands also declined. According the Energy Information Administration, energy production decreased 13 percent on federal lands in fiscal year (FY) 2011 compared to FY 2010.
5. Romney would expand tax breaks for companies that invest overseas.
Obama: “[L]oopholes…allow companies to deduct expenses when they move to China; that allow them to profit offshore and not have to get taxed, so they have tax advantages offshore.… Governor Romney actually wants to expand those tax breaks. One of his big ideas when it comes to corporate tax reform would be to say, if you invest overseas, you make profits overseas, you don’t have to pay U.S. taxes.”
False. President Obama misrepresented the much-needed move by the U.S. to a territorial tax system as a tax break for outsourcing. A territorial tax system simply means that a country taxes only income earned at home, leaving foreign governments to tax income earned in their countries. The U.S. is one among only a handful of countries that taxes businesses on the income they earn abroad.
Moreover, the U.S. taxes businesses at a rate high above the international average. This policy is hurting U.S. competitiveness and encouraging companies to set up their headquarters abroad.
Territoriality would allow U.S. companies to compete on an even footing in foreign markets, not have to carry the combined burdens of the foreign tax and the residual U.S. tax, and create jobs at home.
6. President Obama ensures that Medicare and Social Security are there for people.
Obama: “The choice in this election is going to be whose promises are going to be more likely to help you in your life…[such as] making sure that Medicare and Social Security will be there for you.”
False. President Obama failed to put forth a sustainable plan that would avert Medicare’s and Social Security’s impending bankruptcies. Social Security is running permanent and growing deficits, and a 25 percent benefit cut is set to hit in 21 years. Medicare has made $37 trillion worth of benefit promises over the long-term that aren’t funded.
During the first presidential debate, President Obama failed to even acknowledge Social Security’s dire straits, proclaiming that, aside from a few tweaks, “Social Security is structurally sound.” Unsurprisingly, the President has done nothing over the last four years to stem the program’s red ink.
On Medicare, President Obama’s health care law institutes a board of 15 unelected bureaucrats to cut Medicare—mainly by slashing provider reimbursement. This will impact seniors’ access to care. Moreover, Obamacare cuts $716 billion out of the program and uses that money to fund new spending under Obamacare.
7. More people are on food stamps today than when President Obama took office.
Romney: “There are more people in poverty, one out of six people in poverty. How about food stamps? When he took office, 32 million people were on food stamps. Today, 47 million people are on food stamps.”
True. Spending on food stamps doubled (in inflation-adjusted terms) from $42 billion in 2008 to $85 billion in 2012. Food stamp participation also doubled among able-bodied adults after the Obama Administration suspended the program’s work requirements. In total, 47 million Americans are on food stamps today.
Despite pouring ever-increasing taxpayer dollars into food stamps, as well as more than 80 other welfare programs, the welfare system has failed to do justice to the poor. According to the U.S. Census Bureau, the percentage of Americans who are poor remains at a near-record 15 percent; in other words, one out of six people live in poverty. Welfare must be reformed to promote self-reliance rather than government dependence.