Post by Moses on Feb 14, 2005 11:51:29 GMT -5
Claim vs. Fact
By David Sirota, Christy Harvey and Judd Legum, The Progress Report
Posted on February 8, 2004, Printed on February 14, 2005
www.alternet.org/story/17794/
Economy/Budgetary Priorities
Claim: "How about the fact that we are now increasing jobs or the fact that unemployment is now down to 5.6 percent? There was a winter recession and unemployment went up, and now it's heading in the right direction."
Fact: The job market continues to stagnate. Since President Bush's first tax cut in March 2001, the economy has shed more than 2 million jobs. He will be the first president since Herbert Hoover to end his term with a net job loss record. Additionally, the White House Counsel of Economic Advisors pledged that the President's "jobs and growth" package would create 1,836,000 new jobs by the end of 2003 as part of its pledge to create 5.5 million new jobs by 2004. But the economy added 221,000 jobs since the last tax cut went into effect, meaning the White House has fallen 1,615,000 jobs short of their mark.
Claim: "There is good momentum when it comes to the creation of new jobs."
Fact: Statistics show there is not good job momentum. In the last two months we've seen an average of 73,000 private sector jobs created. At this pace, we wouldn't see a new net job created until May 2007. Even beyond the recession and 9/11, just looking at the recovery since November 2001, the current pace of job growth puts us on track to have the worst jobs recovery since the Great Depression.
Claim: "But what the people must understand is that instead of wondering what to do, I acted, and I acted by cutting the taxes on individuals and small businesses, primarily. And that, itself, has led to this recovery."
Fact: Bush tax cuts had little effect on small business owners. The Bush tax cuts had little effect on small business owners. Under the first tax cut, the Center on Budget and Policy Priorities reports, small business owners "would be far more likely to receive no tax reduction whatsoever from the Administration's tax package than to benefit" because only 3.7% of small business owners are affected by the top tax rate cuts that were the bulk of the plan. Under the 2003 tax cut, the Urban Institute-Brookings Tax Policy Center estimates "nearly four out of every five tax filers (79%) with small business income would receive less than the amount" while "52% of people with small business returns would get $500 or less."
Claim: "The budget I just proposed to the Congress cuts the deficit in half in five years."
Fact: White House estimates omit inevitable costs. The President's proposal to cut the deficit in half deliberately "omits a number of likely costs" such as the continued cost of Iraq and its own defense spending plans. All told, he is proposing roughly $3 trillion in new tax cuts and spending, including $1 trillion to make his tax cuts permanent, $70 billion for the Alternative Minimum Tax, and $50 billion more for war in Iraq. The result is that the deficit is predicted to be "in the range of $500 billion in 2009" -- not even near half of what it currently is.
Claim: "The economic stimulus plan that I passed is making a big difference."
Fact: Study shows tax cuts barely made a dent. A study by Economy.com attributes only 0.9 percent out of the total 7.2 percent annualized growth in the third quarter to the 2003 tax cut. In other words, the Economy.com analysis suggests that the strength of the economy in the third quarter was not due primarily to the tax cut: Without the tax cut, growth would have still been an impressive 6.3 percent.