January 27, 2010

- Obama on Democrat Health Care Plan:  "I want everyone to take another look at the [health care] plan we've proposed."

Facts:  House Republicans continue to oppose any effort to pass a sweeping government takeover of health care.  Instead of working toward bipartisan reform that the American people can support, Democrat leaders are intent on passing legislation that adversely affects one-sixth of our nation's economy.  At a time of double-digit unemployment, the Democrat health care plan will hurt our economy when we should be focused on creating jobs. 

- Obama on Health Care Reform:  "But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know."

Facts:  House Republicans have a common-sense plan that reduces health care costs, without launching a government takeover of health care.  The non-partisan Congressional Budget Office estimates that the plan will reduce deficits by $68 billion over ten years and reduce private insurance premiums by up to 10 percent.  House Republicans stand by the American people in support of responsible health care reform that lowers health care costs for struggling families and small businesses. 

- Obama on Jobs:  "...Jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight...  The House has passed a jobs bill that includes some of these steps.  As the first order of business this year, I urge the Senate to do the same."

Facts:  Last year, President Obama promised that his stimulus bill-which the Congressional Budget Office (CBO) now predicts will cost $862 billion-would create jobs "immediately" and unemployment would not rise above 8 percent.  Since the stimulus bill passed, 2.7 million jobs have been lost and unemployment has soared to 10 percent.  Right now, more than 15 million Americans are unemployed and 43 States lost jobs last month.  Conceding that his first stimulus bill has failed, the President is now urging Congress to pass another costly federal spending package.  The American people want jobs, not more government spending.

Bottom Line:  The President's stimulus plan is not working and more of the same won't work either.

- Obama on a Discretionary Spending Freeze:  "Starting in 2011, we are prepared to freeze government spending for three years.  Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected.  But all other discretionary government programs will." 

Facts:  The President's plan to freeze some expenditures comes after a year of unprecedented discretionary increases which inflated current spending levels.  In March, 2009, the President signed a $410 billion omnibus spending bill for FY 2009, and less than two months ago, in December he signed yet another $447 omnibus bill.  If "stimulus" funding is included, non-defense discretionary funding has increased by 66 percent since Obama took office.  The President's proposal merely locks in these extraordinary increases.  The Obama proposal will also exempt mandatory spending and discretionary "security" spending, including defense, homeland security, veterans, and foreign aid spending.  According to press reports, the freeze accounts for less than $450 billion or roughly 12 percent of the $3.5 trillion the government will spend in FY 2010.  While this modest freeze is a welcome concession by the President that the policies of uncontrolled spending have failed, a much more extensive approach to cutting spending is necessary to considerably reduce the enormous deficits facing our nation over the next ten years.

- Obama on Fiscal Responsibility:  "By the time I took office, we had a one year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade...But families across the country are tightening their belts and making tough decisions.  The federal government should do the same."

Facts:  Despite efforts to spin the facts or blame the preceding Administration, a comparison of the fiscal situation when the Obama Administration took office is telling.  The nation's historic debt and record deficits are a direct result of the President's big-spending agenda.  The President's spending policies have drastically increased the national debt.  Since taking office just one year ago, the President has increased the public debt by $1.47 trillion or 23 percent, from $6.3 trillion to $7.78 trillion.  Under the Administrations' budget, public debt will triple, jumping to $17.5 trillion dollars by 2019.  In one year controlling the White House, the President increased the annual deficit by 308 percent, from $458 billion to $1.4 trillion.  In 2009 alone, House Democrats passed $862 billion in "stimulus" spending (which will also add $347 billion in interest), two omnibus spending bills totaling more than $855 billion, and increased non-defense spending by 12 percent.  According to the President's own estimates, his budget and spending plan will cause deficits to average $905 billion for each of the next ten years.  

And even while the President touts his commitment to fiscal responsibility, he is encouraging Congress to pass a $1.9 trillion increase in the national debt limit, allowing the government to keep borrowing in order to keep on spending. 

- Obama on the Deficit Commission: "The Commission will have to provide a specific set of solutions by a certain deadline.  Yesterday, the Senate blocked a bill that would have created this commission.  So I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans."

Facts:  Yesterday, a proposal endorsed by the President to establish a deficit commission whose recommendations would be fast-tracked through Congressional consideration failed as a Senate amendment to a debt limit increase.  In light of the amendment's failure, President Obama is reverting to his plan from a week ago to establish the commission through Executive Order.  If the President chooses to stick to the exact model he unveiled last week, the commission would represent nothing more than a toothless effort to provide political cover for tax increases.  Under the President's original plan, the commission would be barred from cutting discretionary spending, could not ensure a vote on any of the recommendations, and would give Democrats political cover to raise taxes at the worst possible time.  Without the statutory power to ensure consideration of ideas or address appropriated spending, the commission could devolve into an empty political tactic to convince Americans that something is being done, without addressing the difficult fiscal realities.

- Obama on Citizens United vs. FEC Case:  President Obama claimed that this week's Supreme Court decision, Citizens United vs. Federal Election Commission, "reversed a century of law to open the floodgates for special interests-including foreign companies-to spend without limit in our elections."  He also calls on Congress to pass a bill that helps to "right this wrong."

Facts:  Foreign companies are already prohibited from influencing American campaigns.  The current legal prohibitions on foreign involvement in elections are quite specific, and prohibit a foreign national from directly or indirectly contributing to a candidate or party, or paying for a broadcast, cable or satellite communication which refers to a federal candidate in the period before an election ("electioneering communications").  Furthermore, FEC regulations already prohibit a foreign national from direct, control, or indirectly participating in the decision-making process of any corporation, labor union, or political committee in their election-related activities.  In both cases, the term "foreign national" includes a foreign government, foreign political party, an individual who is not a U.S. citizen, or a corporation of other organization organized under the laws of a foreign country or with its principal place of business in a foreign country.  These prohibitions (except the one on electioneering communications) apply not only to federal elections but also to State and local elections.  None of these protections are changed at all by the Citizens United decision.  This statement is nothing other than a red herring-the creation of a problem that Democrats can claim to solve.  Unfortunately, no flood can occur when the dam is still intact.  It is worth noting that the Citizens United decision actually overturned a 1990 case Austin v. Michigan Chamber of Commerce, not a 100-year old case as the President claims.

- Obama on Middle Class Aid:  "Now, the price of college tuition is just one of the burdens facing the middle-class.  That's why last year I asked Vice President Biden to chair a task force on Middle-Class Families.  That's why we're nearly doubling the child care tax credit, and making it easier to save for retirement by giving every worker access to a retirement account and expanding the tax credit for those who start a nest egg.  That's why we're working to lift the value of a family's single largest investment - their home."

Facts:  While the President's initiatives may be somewhat helpful, they do not and will not provide struggling middle class families with the aid they most need-a job.  These provisions will do nothing to create new, long-term jobs for suffering families at a time when it is needed most.   Today's unemployment numbers are staggering.  The 10 percent unemployment rate is the real cause of middle class anxiety.  Among minorities, the situation is even bleaker with unemployment among African Americans at 16.2 percent and 12.9 percent among Hispanics and Latinos.  Real unemployment, which includes workers who cannot find enough work to fully support themselves, is at 17.3 percent and 6.1 million unemployed workers have been without a job for over 27 weeks.  The solution to these problems is policies that create economic growth in this country, not bigger government.  The middle class isn't asking for more federal assistance-they are asking for an opportunity.

- Obama on Trade:  "We have to seek new markets aggressively, just as our competitors are.  If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores."

Facts:  For over two years, Democrats in Washington have stalled action on approving the U.S.-Colombia Trade Promotion Agreement.  Although free trade creates jobs without spending taxpayer dollars, approving the 2007 U.S.-Colombia agreement is clearly not on the Democrats' agenda.  Enacting the agreement would create jobs in the U.S. and lower consumer prices at home, thus expanding family budgets during a recession and providing a no-cost stimulus that would actually work.  It would also bolster a key strategic ally in an increasingly hostile neighborhood in Latin America.  Likewise, approving the 2007 U.S.-South Korea Free Trade Agreement is apparently not on the Democrats' agenda for 2010.  The deal has awaited the approval of Congress for over two years.  According to the U.S. International Trade Commission, enacting this deal would, at a minimum, add $10-12 billion to U.S. GDP per year, as well as $10 billion in additional annual merchandise exports to South Korea.

- Obama on Energy:  "It means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.  I am grateful to the House for passing such a bill last year."

Facts:  In June 2009, the House passed H.R. 2454, the Democrat cap-and-tax energy bill.  The bill imposes a national cap-and-tax regime that ultimately every consumer in the U.S. would pay for.  Independent researchers, CBO, and the President all agree that this cost will be passed to consumers. There is little debate that a national energy tax would outsource millions of manufacturing jobs to countries such as China and India. 

Republicans support a solution that would actually create jobs and energy in the U.S. as well as clean up the environment, without imposing a national energy tax.  The American Energy Act (H.R. 2846) is an all-of-the-above plan that will provide energy independence, more jobs here at home, and a cleaner environment.  The American Energy Act increases our domestic supply of energy by lifting restrictions on ANWR, the Outer Continental Shelf, and oil shale in the Mountain West.  Revenue generated by the sale of leases will be invested in renewable and alternative sources of energy.  The plan also renews America's commitment to clean and emissions-free nuclear energy, by laying down a national goal of ordering 100 new nuclear reactors over the next twenty years.  The House Republican plan also encourages conservation through proven tax incentives.  The GOP energy plan would create more than 2.5 million American energy jobs.

- Obama on Foreign Policy:  "That is the leadership that we are providing-engagement that advances the common security and prosperity of all people."

Facts:  A cursory review of the President's foreign policy during his first year in office reveals several troubling precedents.  Regarding Iran, President Obama was late to offer the unqualified support of the American people for pro-democracy demonstrators after the tainted presidential elections of June 2009.  The President also has yet to enact tough sanctions on Iran over its nuclear weapons program, although in May 2009 he said that, "We should have some sense whether or not these [diplomatic] discussions are starting to yield significant benefits" by the end of that year.  In September 2009, Obama abandoned plans to place a missile defense system in the Czech Republic and Poland after Russia expressed displeasure with the idea.  In general, President Obama's foreign policy has come to be typified by muteness on democratization, freedom, and human rights abroad.  The first year of the Obama Administration emboldened rogue dictators across the globe-from Tehran to Pyongyang to Caracas. 

- Obama on Terrorism:  "Since the day I took office, we have renewed our focus on the terrorists who threaten our nation."

Facts:  During 2009, President Obama took several steps to weaken U.S. national security, despite mounting terrorist attempts in the U.S.  In his first days in office, President Obama recklessly ordered the state-of-the-art, multimillion dollar Guantanamo Bay detention facility to be closed.  The decision to close the prison has not stopped al Qaeda from plotting attacks on Americans.  The President also banned certain interrogation practices utilized by the Bush Administration in January 2009, hamstringing the intelligence community.  Senior U.S. intelligence officials have said the intelligence community needs the flexibility to use a variety of interrogation methods.  The Obama Administration additionally plans to transfer detainees from Guantanamo to a prison in Thomson, Illinois, and Khalid Sheikh Mohammed to New York City for trial before a federal judge.  If terrorists are brought to U.S. soil, they will seek to manipulate the rights provided by the very Constitution that they sought to destroy.  Bringing dangerous terrorists to U.S. soil will not make our country safer. 

Finally, the Obama Administration has transferred detainees to countries such as Yemen, Afghanistan, Saudi Arabia, and Iraq.  The rate by which detainees are released from Guantanamo and return to terrorism or to the battlefield in order to kill Americans or its allies is alarming.   According to the Pentagon, one in five detainees released return to terrorism.  Combined, these actions are taking us back to a pre-9/11 mentality when acts of terrorism were treated as a law enforcement issue, and as a result, failed to prevent an attack.  There were at least seven major terror attempts in the U.S. last year.

- Obama on Financial Services:  "We need to make sure consumers and middle-class families have the information they need to make financial decisions.  We can't allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.  The House has already passed financial reform with many of these changes.  And the lobbyists are already trying to kill it.  Well, we cannot let them win this fight.  And if the bill that ends up on my desk does not meet the test of real reform, I will send it back."

 

Facts:  The Democrats' financial regulatory reform plan creates a political economy by making permanent the authority to bailout large politically connected firms (e.g. Fannie Mae, Chrysler and AIG).  It calls for the creation of a permanent bailout fund and gives the government the authority to break up financially healthy and well-managed firms for the sake of "financial stability."  The Democrat proposal will increase the cost of credit products and restrict the access to credit for many consumers, including small businesses, by giving government bureaucrats the authority to dictate prices and determine what products are offered.  The proposal also separates the regulation of protecting consumers from ensuring safety and soundness, creating a conflict between numerous existing agencies.

- Obama on the Bank Tax:  "I supported the last administration's efforts to create the financial rescue program.  And when we took the program over, we made it more transparent and accountable.  As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks.  To recover the rest, I have proposed a fee on the biggest banks.  I know Wall Street isn't keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need."

 

Facts:  Some institutions targeted by the tax have repaid or are on schedule to repay TARP monies, including interest (e.g. BB&T, Wells Fargo, JP Morgan Chase).  In fact, some targeted institutions did not need TARP funds, but participated in TARP under duress by the Treasury Department and government regulators.   This tax will increase the costs of credit for customers and discourage lending.  Most losses likely come from AIG, GM and Chrysler, and all are exempt from paying the tax.

- Obama on Small Business:  "So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.  I am also proposing a new small business tax credit-one that will go to over one million small businesses who hire new workers or raise wages."

 

Facts:  The President's budget contained over $1.5 trillion in crushing tax increases over the next 10 years.  The tax increases which Obama has endorsed would disproportionately punish small businesses, which make up more than 99.7 percent of all employer firms and employ more than half of all private sector workers.  According to the Small Business Administration, small businesses have generated 64 percent of net new jobs over the past 15 years.  The President's government takeover of healthcare would impose billions in new taxes on businesses who cannot afford to finance their worker's health coverage.  The Congressional Budget Office has confirmed that this tax on jobs masquerading in the form of a "pay-or-play" mandate "could reduce the hiring of low-wage workers," and could also lead to wage stagnation as wage compensation is diverted to comply with new federal taxes and mandates.   The President's national energy tax would impose an across the board tax increase on all energy use, especially harmful to small firms struggling to make payroll each month.

- Obama on "Don't Ask, Don't Tell":  "This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are."

Facts:  Democrats have assured the LGBT community that they will repeal the current Department of Defense (DOD) policy known as "Don't Ask, Don't Tell" (DADT).  Legislation sponsored by Democrats, and supported by President Obama, would prohibit the Secretary of Defense, and the Secretary of Homeland Security (Coast Guard), from discriminating on the basis of sexual orientation against any member of the Armed Forces or any person seeking to become a member.  Furthermore, the bill would authorize the re-accession into the Armed Forces of individuals previously separated for homosexuality, bisexuality, or such conduct.  The bill would also require the Secretaries to ensure that regulations governing the personal conduct of members of the Armed Forces are written and enforced without regard to sexual orientation. 

Republicans support policies that improve morale and encourage good order, discipline, and unit cohesion for our military.  The burden is on opponents of the policy and the law to show irrefutable evidence that the readiness of the military will be improved by changing it, if repeal of the law or the DADT policy does not improve the readiness of our troops, then our armed service members should not have to shoulder this additional burden when they are already fighting two wars.

- Obama on College Affordability:  President Obama promises to "take another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years-and forgiven after ten years if they choose a career in public service" and guarantees that "To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans." 

Facts:  The President's plan would expand the income based repayment (IBR) plan, one of the repayment options made available to borrowers under the College Cost Reduction and Access Act of 2007 (Public Law 110-84).  Under current IBR requirements, borrowers are guaranteed that their monthly federal loan payments will not be more than 15 percent of their discretionary income and are entitled to loan balance forgiveness after 25 years.  The President's proposal would make the program more generous by lowering the 15 percent of discretionary income to 10 percent, and shortening the forgiveness time from 25 to 20 years (or 10 years for public servants)- effectively forcing taxpayers to pay off even more student loan debt.  Many argue that making the federal government responsible for a larger share of student debt will only exacerbate already high college costs.

Earlier this year, the House passed and the Administration supported a plan (H.R. 3221) to eliminate the Federal Family Education Loan program and shift all student loans to a government-run and taxpayer financed system under the Direct Loan program.  By allowing the government to take over all federal student loan originations, it would involve one of the largest expansions of a government program in recent memory.  It would dismantle a system that has successfully served generations of students.  Within a decade, the Federal Direct Loan Program would be a trillion dollar operation, with the responsibility for tens of millions of borrowers, making it one of the biggest banks in the world. 

- Obama on Education Reform:  "The idea here is simple:  instead of rewarding failure, we only reward success.  Instead of funding the status quo, we only invest in reform-reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans, from rural communities to inner-cities."

Facts:  President Obama supports merit pay (performance pay) and this is a laudable goal.  Unfortunately, Democrats in the House have yet to bring a bill to the floor that would encourage merit pay, and "only reward success."  Furthermore, while the effort to reform is admirable, it needs to be thorough in his quest for reform-challenging the educational system to become more competitive and accountable.  Republicans understand that student achievement only grows in good classrooms where resources are spent responsibly, and we look forward to working with the President to reform ineffective programs and reduce waste in the educational system.  

- Obama on Rewarding Wall Street:  "Some are frustrated; some are angry.  They don't understand why it seems like bad behavior on Wall Street is rewarded but hard work on Main Street isn't; or why Washington has been unable or unwilling to solve any of our problems."

Facts:  On March 17, 2009, The Politico reported, "Sen. Robert Menendez (D-NJ) blamed Treasury Secretary Timothy Geithner for letting bailed-out insurance giant American International Group pay $165 million in bonuses to its employees..."  On March 20, 2009, Roll Call reported, "House Majority Leader Steny Hoyer (D-MD) added a fresh welt to the bruised political hide of Treasury Secretary Timothy Geithner...Hoyer criticized his failure to stop the bailed-out American International Group from going forward with $165 million in retention bonuses to executives who helped drive the finance giant into the ground."

- Obama on Transparency of Financial Rescue:  "So I supported the last administration's efforts to create the financial rescue program.  And when we took the program over, we made it more transparent and accountable." 

Facts:  On November 17, 2009, the Special Inspector General of the TARP (SIGTARP), Neil Barofsky, reported that the Federal Reserve Bank of New York decided to pay AIG's counterparties par value.  The report further stated, "[O]fficials recommended to President Geithner that Maiden Lane III transactions go forward without haircuts because it would be impractical to obtain haircuts from all counterparties.  Mr. Geithner concurred and it was decided that NY Fed would cease efforts to negotiate haircuts..."  Geithner made the decision to pay the counter-parties one hundred cents on the dollar, ensuring that politically connected Wall Street banks incurred no loss for their poor investment decisions.  On January 7, 2010, Bloomberg reported, "The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer's payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show."