January 24, 2012
For your convenience, the House Republican Conference has compiled an analysis of President Obama’s major claims and policy initiatives discussed in his State of the Union speech before Congress on January 24, 2012. In an interview nearly three years ago, shortly after taking office the president said: “If I don’t have this done in three years, then there’s gonna be a one-term proposition.”
- The president’s policies have failed and are making the economy worse.
- Because the president cannot run on his record, he has regrettably turned to the politics of envy and division.
More examples of the president’s failed economic policies can be found here.
POTUS: "Let’s never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody."
- Fannie Mae and Freddie Mac, the bankrupted government-sponsored enterprises at the epicenter of the housing crisis, have received a $183 billion taxpayer funded bailout since being put into government conservatorship three and a half years ago, yet Democrats refused to address the entities in the president’s signature law to make Wall Street bailouts permanent (Dodd-Frank).
- Despite bailing out Fannie and Freddie, as many struggling homeowners can attest, foreclosure filings have increased dramatically over the three years that President Obama’s housing initiatives have been in place. According to foreclosure data from RealtyTrac, 2.7 million homes received foreclosure filings in 2011, up from 2.3 million in 2008. In fact, foreclosures reached a record high just three months ago.
- Even when solar panel manufacturer Solyndra was proving not to be a viable business, based on recurring losses, problems with cash flow, and a weak market for their products, the Obama administration insisted on giving the corporation a $535 million loan guarantee—putting the taxpayers on the hook when the company went belly-up in 2011. It didn’t take long to uncover that the loan was nothing more than crony capitalism at its worst when it became public that President Obama’s campaign contributors were benefiting from the loan.
- The Republican Pledge to America promised to reform Fannie Mae and Freddie Mac and put an end to taxpayer funded bailouts.
POTUS: "In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s."
- Despite President Obama’s claims about job growth, since the president took office, almost two million more Americans are out of work and America has witnessed the longest period of sustained high unemployment since the Great Depression, with unemployment at more than eight percent for 35 consecutive months.
- The average number of weeks it takes for job seekers to find a job reached 40.9 weeks in November of 2011, the longest average time that Americans have been unemployed since the statistic was first recorded in 1948.
- It’s a shame that the president’s failed policies have led to an economy where nearly half of all Americans are now classified as poor or low-income (146.4 million), and more Americans than ever (46.2 million) are on food stamps.
POTUS: "In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up."
- The president’s constant threat of higher taxes is impairing our economy’s ability to grow. Without spending discipline, raising taxes will not solve our nation’s debt crisis and will seriously harm small businesses and working families struggling in the Obama economy. We don’t need to keep raising taxes, we need to stop subsidizing the president’s pet special interests.
- President Obama continues to claim that he has not and will not increase taxes on middle class families, but in reality President Obama has already broken his promise to not raise taxes on the middle class 16 times.
- Our nation’s debt crisis is driven by failed stimulus spending and borrowing from places like China. According to CBO’s Long-Term Budget Analysis, revenues will return to their post-World War II average in the next five years and remain there indefinitely without raising taxes. Spending, however, is projected to grow to nearly 34 percent of GDP and drive public debt to 187 percent of GDP by 2035.
- Our vision for America—the House GOP Plan for America’s Job Creators—is focused on empowering Americans who work hard and play by the rules to earn success; not punishing them when they do. House Republicans passed a budget that would scrap the tax loopholes, end the special interest taxpayer subsidies the president defends—like those he gave to Solyndra—and make the tax code flatter, simpler, and fairer.
The Buffett Rule and Paying Your “Fair Share”
POTUS: "We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."
- The politics of envy and division do not represent American values. We are in a spending-driven debt crisis that cannot be solved with tax increases on our nation’s job creators. Even with $1.5 trillion in job-crushing tax increases proposed in President Obama’s last budget, the national debt would still rise by $9 trillion in the next ten years, from $15 trillion to $24 trillion according to the president’s own numbers.
- According to the president's own budget, his plan to impose $866 billion (top two tax brackets) in crushing new taxes on our nation’s job creators would only reduce deficits over the next ten years by less than eight percent.
- According to the most recent IRS data, 236,000 people reported income above $1 million and their returns amounted to $727 billion. If the government were to take 100 percent of the adjusted gross income of people making $1 million, the FY 2011 budget deficit would still be higher than the deficit under any previous president.
- American values means empowering those who work hard and play by the rules to earn success; not punishing them when they do. House Republicans passed a budget that would scrap the tax loopholes, end the special interest taxpayer subsidies the president defends—like those he gave to Solyndra—and make the tax code flatter, simpler, and fairer.
Spending on Education & Training
POTUS: "At a time when other countries are doubling down on education, tight budgets have forced States to lay off thousands of teachers… Give them the resources to keep good teachers on the job, and reward the best ones."
- After spending tens of billions of dollars in emergency education spending and promising his policies would “save or create 3.5 million jobs,” nearly two million jobs have been lost and the unemployment rate remains stuck above eight percent for a record-breaking 35 consecutive months.
- The president’s original $1.2 trillion stimulus included $53.6 billion in “State Fiscal Stabilization” to supplant state and local education spending and an additional $44.6 billion in miscellaneous Department of Education spending.
- In 2010, Democrats approved another $10 billion in so-called “teacher-jobs” spending. Despite, or perhaps because of, all this spending for local governments and the “private sector job growth” touted by the president, unemployment remains at 8.5 percent and our nation is mired in the worst unemployment crisis since the Great Depression.
- Spending more money that we do not have and mortgaging the prosperity of future generations is not a plan to win America’s future. House Republicans actually put forward a plan, the Path to Prosperity budget, which addressed the challenges of education reform and American competitiveness. The president is welcome to work with Republicans on policies that will encourage teachers and give schools flexibility – Republicans have offered these proposals and had them ignored by his Administration.
POTUS: "This country needs an all-out, all-of-the-above strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs."
- This president’s policies are no longer just failing to give us the recovery he promised—they are preventing new well-paying jobs for American workers and have made energy independence harder to achieve. Last week, President Obama buried 20,000 shovel-ready jobs by rejecting the bi-partisan, environmentally-reviewed Keystone XL Pipeline project.
- The Keystone XL Pipeline expansion would provide a significant boost to U.S. energy security, bringing an extra 830,000 barrels of oil per day to U.S. refineries. In September 2011, the U.S. imported 1,465,000 barrels of oil a day from Saudi Arabia. The Keystone pipeline would more than cut in half our dependence on Saudi.
- Americans are looking for a plan for energy independence, and the president has done nothing to advance that cause, choosing instead to invest in failing firms that give him political benefit, like the bankrupt solar panel manufacturer Solyndra.
- The president touted the economic and energy security benefits of increased U.S. oil and gas production, however, his Administration is only hampering such production. According to a recent study, policies and administrative actions have significantly slowed the rate of leasing, permitting and drilling in the U.S. since 2009.
- House Republicans approved legislation that included measures to directly support the creation of private sector jobs and energy security, including the Keystone XL project, blocking the EPA's job-destroying regulations, and expanding opportunities for domestic energy exploration. Unlike the president who prefers to pick winners and losers in the energy sector, House Republicans support an “all-of-the-above” energy plan.
Small Business & Manufacturing
POTUS: "Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs."
- Under President Obama, manufacturing employment has fallen to its lowest level since 1941, dipping below 12 million for the first time in the post-WWII era. Since President Obama was inaugurated, the manufacturing sector has shed 600,000 jobs.
- The threat of tax increases and the glut of job-destroying regulations invariably cause economic uncertainty for small businesses. According to a July 2011 Heritage Foundation report, “In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion. No major rulemaking actions were taken to reduce regulatory burdens during this period. Overall, the Obama Administration imposed 75 new major regulations from January 2009 to mid-FY 2011, with annual costs of $38 billion.” A report by the Federal Reserve Bank of Cleveland demonstrates that “Policy uncertainty has a statistically significant negative effect on both small business hiring plans and small capital expenditure plans.”
- A nationwide survey of small business executives released last week by the Chamber of Commerce found that more than eight out of ten would rather have Washington stay out of the way than provide a helping hand. With sentiment like that it’s no surprise that entrepreneurship has reached a 17-year low in the U.S.
- According to the World Bank’s Doing Business 2012 report, the U.S. now ranks 13th in the world in the ease of starting a new business and has been declining steadily since President Obama took office. It was fourth in 2008. The U.S. now trails such job creators as Macedonia, Georgia, Rwanda, Belarus, Saudi Arabia, Armenia and Puerto Rico in the category.
- Even the president’s own Jobs Council agrees with House Republicans’ jobs plan on the need to reduce the burdens of government on the private sector.
Deficits & Debt
POTUS: "When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices."
- President Obama’s policies have fueled the most devastating debt crisis in our nation’s history. Historic spending leads to historic taxes, which lead to historic unemployment.
- Since President Obama took office on January 20, 2009, the national debt has increased by $4.6 trillion or 43 percent in just three years, from $10.6 trillion to $15.23 trillion. During his time in office, President Obama has piled up more debt than every president from George Washington to George H.W. Bush combined.
- As of January 20, 2012, the U.S. national debt was $15.23 trillion; more than 100 percent of the nation’s GDP in the third quarter of 2011 (the most recent data) which was $15.17 trillion. The national debt is now equal to $48,700 for every American or $128,300 for ever U.S. household.
- President Obama has increased the deficit by 180 percent since 2008 and has run up the three largest deficits in U.S. history. In 2009, the president recorded the highest deficit ever at $1.413 trillion. In 2011 the second highest deficit of all time clocked-in at $1.299 trillion. And in 2010 the deficit was $1.294 trillion, the third highest in U.S. history. Prior to President Obama’s election, the highest deficit ever was $458 billion.
- House Republicans have offered a better way forward by passing a budget that cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt.
New Infrastructure Stimulus Spending
POTUS: "So much of America needs to be rebuilt. We’ve got crumbling roads and bridges."
- In January 2009, the Obama administration claimed that unemployment would not go above 8 percent if the $1.2 trillion “stimulus” became law, but unemployment has been above 8 percent for 35 months and has averaged 9.4 percent. The Obama administration also claimed that the “stimulus” would “save or create” 3 to 4 million jobs. In reality, almost 2 million jobs have been lost.
- In May 2011, a new study was released by economists Timothy Conley from the University of Western Ontario and Bill Dupor from Ohio State University which found that the President’s failed stimulus “destroyed/forestalled roughly one million private sector jobs.” The full study concludes that the actual impact of the $1.2 trillion “stimulus” was a net job loss of 550,000.
- The Associated Press reported 10 months after the “stimulus” began that “a surge in spending on roads and bridges has had no effect on local unemployment… Spend a lot or spend nothing at all, it didn't matter.”
- House Republicans offered the president examples of how existing infrastructure funds could be used more effectively to support economic growth without borrowing more money by simply removing artificial barriers which set-aside 10 percent of state infrastructure funds for items such as transportation museums and the acquisition of scenic easements. This would allow states to devote more funding to the types of infrastructure the president has advocated without requiring new spending.
For additional information, contact:
The House Republican Conference Policy Office