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Obama's Disingenuous State of the Union Economic Claims

Anthony Randazzo
January 28, 2010, 11:41am

President Obama's first State of the Union address last night was eloquently delivered, as the president has built a reputation for doing. It was also endlessly frustrating, as time and again the president proposed as spending plan, talk about how the deficit was all Bush's fault, presented another spending plan, claimed he was bringing fiscal stability to the White House, and gave another spending program. I believe the president really does care about fiscal responsibility, he just misunderstands it and fails to see how disingenuous his claims really are:

First, the president says he wants a spending freeze for the 2011 budget. Basically cap all spending at 2010 levels. But not Medicare spending. And not defense spending. And social security gets a pass too. In theory it is a start, but those three line items comprise a hefty bunch of the spending. In fact it is Medicare and social security that are the culprits threatening to bankrupt us more than anything else. It's like proposing a juice only diet, except you can still eat Taco Bell, Krispy Kreme, and Pizza Hut.

The AP reports: "The anticipated savings from this proposal would amount to less than 1 percent of the deficit — and that's if the president can persuade Congress to go along." So it sounded really good. And to the causal American tuning into the speech, they have been effectively misled that the president is dealing with spending problems. But the numbers just don't add up. (Also, note the irony that Obama's proposal is the same thing he bashed when McCain suggested it during the campaign.)

Second, President Obama said that he's going to create a commission by executive order to figure out how to deal with the deficit. He even claimed that this won't be "one of those Washington gimmicks that lets us pretend we solved a problem" but would instead churn out real solutions on a set timetable. Only thing he forgot to mention was that since the commission has no Congressional authority, it is completely toothless. There is no guarantee Congress will even look at the proposals. Furthermore, the president already has an organization to figure out how to balance the budget: its called the Office of Management and Budget. This commission is the epitome of a "Washington gimmick" and probably will be little more.

Third, the president was back to claiming he had created jobs, even though the numbers can't really be verified. The OMB had been claiming around 650,000 jobs in December. But since then the new accounting methods from the OMB seem to have turned up a few more as Obama claimed the stimulus had kept "about 2 million Americans" from being unemployed. But given that even the administration has admitted to errors in counting the jobs and that false numbers had been reported, it seems it would be more prudent to double check those figures—not to mention note many of them aren't sustainable jobs—than to just give the number to unknowing Americans as if there were no questions about it. It is the highest form of a disingenuous spirit to not clarify such a statement.

The Associated Press fact checked a few other areas of the speech that weren't quite up to par when reality entered the fray:

OBAMA: The president issued a populist broadside against lobbyists, saying they have "outsized influence" over the government. He said his administration has "excluded lobbyists from policymaking jobs." He also said it's time to "require lobbyists to disclose each contact they make on behalf of a client with my administration or Congress" and "to put strict limits on the contributions that lobbyists give to candidates for federal office."

THE FACTS: Obama has limited the hiring of lobbyists for administration jobs, but the ban isn't absolute; seven waivers from the ban have been granted to White House officials alone. Getting lobbyists to report every contact they make with the federal government would be difficult at best; Congress would have to change the law, and that's unlikely to happen. And lobbyists already are subject to strict limits on political giving. Just like every other American, they're limited to giving $2,400 per election to federal candidates, with an overall ceiling of $115,500 every two years.

[...]

OBAMA: He called for action by the White House and Congress "to do our work openly, and to give our people the government they deserve."

THE FACTS: Obama skipped past a broken promise from his campaign — to have the negotiations for health care legislation broadcast on C-SPAN "so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies." Instead, Democrats in the White House and Congress have conducted the usual private negotiations, making multibillion-dollar deals with hospitals, pharmaceutical companies and other stakeholders behind closed doors. Nor has Obama lived up consistently to his pledge to ensure that legislation is posted online for five days before it's acted upon.

See even more from the full AP article here.


Anthony Randazzo is Director of Economic Research


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