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FACT
CHECK: Obama pushes plans that flopped before |
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Jan. 25,
2012
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WASHINGTON -
It was a wish list, not a to-do list.
President Barack Obama laid out an array of
plans in his State of the Union speech as if his
hands weren't so tied by political realities.
There can be little more than wishful thinking
behind his call to end oil industry subsidies -
something he could not get through a Democratic
Congress, much less today's divided Congress,
much less in this election year.
And there was more recycling, in an even more
forbidding climate than when the ideas were new:
He pushed for an immigration overhaul that he
couldn't get past Democrats, permanent college
tuition tax credits that he asked for a year
ago, and familiar discouragements for companies
that move overseas.
A look at Obama's rhetoric Tuesday night and how
it fits with the facts and political
circumstances:
OBAMA: "We have subsidized oil companies for a
century. That's long enough. It's time to end
the taxpayer giveaways to an industry that's
rarely been more profitable, and double-down on
a clean energy industry that's never been more
promising."
THE FACTS: This is at least Obama's third run at
stripping subsidies from the oil industry. Back
when fellow Democrats formed the House and
Senate majorities, he sought $36.5 billion in
tax increases on oil and gas companies over the
next decade, but Congress largely ignored the
request. He called again to end such tax breaks
in last year's State of the Union speech. And
he's now doing it again, despite facing a wall
of opposition from Republicans who want to spur
domestic oil and gas production and oppose tax
increases generally.
---
OBAMA: "Our health care law relies on a reformed
private market, not a government program."
THE FACTS: That's only half true. About half of
the more than 30 million uninsured Americans
expected to gain coverage through the health
care law will be enrolled in a government
program. Medicaid, the federal-state program for
low-income people, will be expanded starting in
2014 to cover childless adults living near the
poverty line.
The other half will be enrolled in private
health plans through new state-based insurance
markets. But many of them will be receiving
federal subsidies to make their premiums more
affordable. And that's a government program,
too.
Starting in 2014 most Americans will be required
to carry health coverage, either through an
employer, by buying their own plan, or through a
government program.
---
OBAMA, asking Congress to pay for construction
projects: "Take the money we're no longer
spending at war, use half of it to pay down our
debt, and use the rest to do some
nation-building right here at home."
THE FACTS: The idea of taking war "savings" to
pay for other programs is budgetary sleight of
hand. For one thing, the wars in Iraq and
Afghanistan have been largely financed through
borrowing, so stopping the wars doesn't create a
pool of ready cash, just less debt. And the
savings appear to be based at least in part on
inflated war spending estimates for future
years.
---
OBAMA: "Through the power of our diplomacy a
world that was once divided about how to deal
with Iran's nuclear program now stands as one."
THE FACTS: The world is still divided over how
to deal with Iran's disputed nuclear program,
and even over whether the nuclear program is a
problem at all.
It is true that the U.S., Europe and other
nations have agreed to apply the strictest
economic sanctions yet on Iran later this year.
But the global sanctions net has holes, because
some of Iran's large oil trading partners won't
go along. China, a major purchaser of Iran's
crude, isn't part of the new sanctions and,
together with Russia, stopped the United Nations
from applying similarly tough penalties.
---
OBAMA: "Tonight, I want to speak about how we
move forward, and lay out a blueprint for an
economy that's built to last - an economy built
on American manufacturing, American energy,
skills for American workers, and a renewal of
American values."
THE FACTS: Economists do see manufacturing
growth as a necessary component of any U.S.
recovery. U.S. manufacturing output climbed 0.9
percent in December, the biggest gain since
December 2010. Yet Obama's apparent vision of a
nation once again propelled by manufacturing - a
vision shared by many Republicans - may already
have slipped into the past.
Over generations, the economy has become ever
more driven by services; not since 1975 has the
U.S. had a surplus in merchandise trade, which
covers trade in goods, including manufactured
and farm goods. About 90 percent of American
workers are employed in the service sector, a
profound shift in the nature of the workforce
over many decades.
The overall trade deficit through the first 11
months of 2011 ran at an annual rate of nearly
$600 billion, up almost 12 percent from the year
before.
---
OBAMA: "The Taliban's momentum has been broken,
and some troops in Afghanistan have begun to
come home."
THE FACTS: Obama is more sanguine about progress
in Afghanistan than his own intelligence
apparatus. The latest National Intelligence
Estimate on Afghanistan warns that the Taliban
will grow stronger, using fledgling talks with
the U.S. to gain credibility and stall until
U.S. troops leave, while continuing to fight for
more territory. The classified assessment,
described to The Associated Press by officials
who have seen it, says the Afghan government
hasn't been able to establish credibility with
its people, and predicts the Taliban and
warlords will largely control the countryside.
---
OBAMA: "On the day I took office, our auto
industry was on the verge of collapse. Some even
said we should let it die. With a million jobs
at stake, I refused to let that happen. In
exchange for help, we demanded responsibility.
We got workers and automakers to settle their
differences. We got the industry to retool and
restructure. Today, General Motors is back on
top as the world's number one automaker.
Chrysler has grown faster in the U.S. than any
major car company. Ford is investing billions in
U.S. plants and factories."
THE FACTS: He left out some key details. The
bailout of General Motors and Chrysler began
under Republican President George W. Bush. Obama
picked up the ball, earmarked more money, and
finished the job. But Ford never asked for a
federal bailout and never got one.
---
OBAMA: "We can also spur energy innovation with
new incentives. The differences in this chamber
may be too deep right now to pass a
comprehensive plan to fight climate change. But
there's no reason why Congress shouldn't at
least set a clean energy standard that creates a
market for innovation."
THE FACTS: With this statement, Obama was
renewing a call he made last year to require 80
percent of the nation's electricity to come from
clean energy sources by 2035, including nuclear,
natural gas and so-called clean coal. He did not
put that percentage in his speech but White
House background papers show that it remains his
goal.
But this Congress has yet to introduce a bill to
make that goal a reality, and while legislation
may be introduced this year, it is unlikely to
become law with a Republican-controlled House
that loathes mandates.
---
OBAMA: "Right now, because of loopholes and
shelters in the tax code, a quarter of all
millionaires pay lower tax rates than millions
of middle-class households."
THE FACTS: It's true that a minority of
millionaires pay a lower tax rate than some
lower-income people. On average, though, wealthy
people pay taxes at a much higher rate than
middle-income taxpayers.
Obama's claim comes from a Congressional
Research Service report that compared federal
taxes paid by people making less than $100,000
with those paid by people making more than $1
million. About 10 percent of families with
incomes under $100,000 paid more than 26.5
percent in federal income, payroll and corporate
taxes. And about a quarter of millionaire
taxpayers paid a rate lower than that.
---
OBAMA: "We can't bring back every job that's
left our shores.... Tonight, my message to
business leaders is simple: Ask yourselves what
you can do to bring jobs back to your country,
and your country will do everything we can to
help you succeed."
FACT CHECK: Many of the jobs U.S. companies have
created overseas won't return because they were
never in the United States in the first place.
As Obama said in his speech, U.S. workers have
become more productive and labor costs have
fallen.
But there are powerful forces pushing the other
way: Many of the overseas jobs in U.S. companies
weren't transferred from the U.S. They were
created in fast-growing markets in Latin
America, Asia and elsewhere to serve customers
in those markets. Companies in the Standard &
Poor's 500 index now earn more than half of
their revenue from overseas.
That has fueled more job creation abroad. U.S.
multinationals cut more than 800,000 jobs in the
United States from 2000 to 2009, according the
Commerce Department. They added 2.9 million
overseas in the same period.
---
OBAMA: "Anyone who tells you that America is in
decline or that our influence has waned doesn't
know what they're talking about ... That's not
how people feel from Tokyo to Berlin; from Cape
Town to Rio; where opinions of America are
higher than they've been in years."
THE FACTS: Obama left out Arab and Muslim
nations, where popular opinion of the U.S.
appears to have gone downhill or remained
unchanged after the spring 2011 reformist
uprisings in the Middle East. A Pew Research
Center survey in May found that in predominantly
Muslim countries such as Turkey, Jordan and
Pakistan, views of the U.S. were worse than a
year earlier. In Pakistan, a major recipient of
U.S. foreign aid that went unmentioned in
Obama's speech, just 11 percent of respondents
said they held a positive view of the United
States.
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