WASHINGTON (AP) — 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 […]
WASHINGTON (AP) — 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 industrythat’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.