WASHINGTON — President Barack Obama laid claim to a peace dividend that doesn’t exist when he told the nation he wants to use money saved by ending wars to build highways, schools and bridges.
The wars were largely financed by borrowing, so there is no ready pile of cash to be diverted to anything else.
The claim was one of several by Obama in his acceptance speech Thursday at the Democratic National Convention in Charlotte, N.C., and by Vice President Joe Biden in earlier remarks that did not match the facts. A look at some of their assertions:
• OBAMA: “I’ll use the money we’re no longer spending on war to pay down our debt and put more people back to work — rebuilding roads and bridges, schools and runways. After two wars that have cost us thousands of lives and over a trillion dollars, it’s time 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, given that the wars were paid for with increased debt. Obama can essentially “pay down our debt,” as he said, by borrowing less now that war is ending. But he still must borrow to do the extra “nation-building” he envisions.
• OBAMA: “We will reform and strengthen Medicare for the long haul, but we’ll do it by reducing the cost of health care, not by asking seniors to pay thousands of dollars more.”
• THE FACTS: Some of the proposals the Obama administration has floated in budget negotiations with Congress would ask Medicare beneficiaries to pay more. Among them: revamping co-payments and deductibles in ways that could raise costs for retirees and increasing premiums for certain beneficiaries.
Obama even indicated a willingness to consider raising the eligibility age, currently 65, to 67. As word of some of the proposals leaked out, the president faced a backlash from fellow Democrats. He has since said he would not accept Medicare cuts as a part of a deficit reduction deal, unless it also includes higher taxes on the wealthy. Still, some level of increased costs for middle-class and upper-income Medicare recipients is likely to be part of any future deficit reduction deal.
• OBAMA: “We can help big factories and small businesses double their exports, and if we choose this path, we can create a million new manufacturing jobs in the next four years.”
• THE FACTS: Obama has claimed an increase of some 500,000 manufacturing jobs over the past 29 months. But this is cherry picking by the president. From the beginning of Obama’s term 3½ years ago, manufacturing jobs have declined by more than 500,000, according to the Labor Department’s Bureau of Labor Statistics. Manufacturing jobs have been on a steady decline for nearly two decades.
Even though there has been a modest uptick in manufacturing jobs this year, unless there is a major turnaround, it seems unlikely that Obama’s goal of 1 million new manufacturing jobs can be reached by his target date of 2016.
• OBAMA: “And now you have a choice: We can give more tax breaks to corporations that ship jobs overseas or we can start rewarding companies that open new plants and train new workers and create new jobs here in the United States of America.”
• BIDEN: “Gov. Romney believes that in the global economy, it doesn’t much matter where American companies put their money or where they create jobs. As a matter of fact, he has a new tax proposal — the territorial tax — that experts say will create 800,000 jobs, all of them overseas.”
• THE FACTS: Republican presidential candidate Mitt Romney’s proposal is actually aimed at encouraging investment in the U.S., not overseas.
The U.S. currently has a global tax system that is filled with credits, exemptions and deductions that enable many companies to avoid U.S. taxes and provides an incentive for corporations to keep their profits in other countries. Whether Romney’s plan would spur investment in the U.S. is debatable, but it’s not a plan aimed at dispersing profits abroad.
Experts differ on the impact of a territorial system on employment in the U.S. But Biden’s implication that Romney’s plan sends jobs abroad is not supported by the expert opinion he cites.