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Confronted At Town Hall, Romney Falsely Claims Raising Payroll Tax Cap Wouldn’t Strengthen Social Security

ThinkProgress filed this report from Berlin, New Hampshire.

Former Massachusetts Gov. Mitt Romney (R) was confronted at the Iowa State Fair last week for indicating that, as president, he would not support lifting the income cap on taxes used to finance Social Security (currently, income above $106,800 is exempt).

Romney was again asked about his plans today in New Hampshire, where a questioner asked him why he supported raising the retirement age instead of raising the payroll tax cap. Romney reiterated that raising the cap amounted to a tax increase he would not support, and falsely claimed that it wouldn’t “begin the solve the problem” facing Social Security’s long-term viability:

ROMNEY: What I want to do is make sure Social Security is there for your generation.

ATTENDEE: By raising the retirement age, though?

ROMNEY: There are two ways we could go, you can tell me your choice. One is we can keep Social Security –

ATTENDEE: Raise the cap.

ROMNEY: That doesn’t begin to solve the problem. [...] My guess is [people] are going to say, give me lower benefit growth but don’t raise my taxes.

Watch it:

Upon Romney’s proclamation that raising the cap on income taxed for Social Security purposes would not “begin to solve the problem,” the woman presented evidence backing up her claim, telling him that raising the cap would ensure the program’s solvency for at least 75 years. Romney responded, “I don’t agree with your numbers.” He then guessed that Americans would rather face benefit cuts than an increase in the amount of income taxed, despite poll numbers showing that an overwhelming majority of Americans are opposed to benefit cuts.

But whether Romney agrees with the numbers is moot because the questioner’s evidence is correct. According to a report by the Congressional Research Service, fully eliminating the cap without increasing benefits would create a long-term surplus for Social Security and would indeed ensure its solvency for at least 75 years. None of the other “solutions” Romney proposed — means testing benefits, changing the way benefits are calculated, or raising the retirement age — would strengthen the program so substantially without drastically cutting benefits.

Romney is, however, correct in one way: raising the cap on the amount of income taxed for Social Security purposes does not begin to solve the problem. Instead, it solves the problem altogether.

NEWS FLASH

Report: Writing Down Underwater Mortgages Could Create 1 Million Jobs | A report from the The New Bottom Line — a coalition of community, faith-based and labor groups — finds that “if banks wrote down all underwater mortgages to market value and refinanced the homeowners into 30-year, fixed-rate loans at current market interest rates, that would pump $71 billion into the national economy.” “That would amount to $6 billion every month that is currently going towards mortgage payments that could instead go towards buying groceries, school supplies, and other household necessities,” the report notes. “As consumer demand picked up, businesses would start hiring again, creating new jobs. Putting $71 billion into American consumers’ pockets would create 1.05 million jobs.” Banks have been extremely opposed to writing down principal for troubled borrowers.

LGBT

Santorum: ‘Huge Moral Failings’ Are The ‘Root Cause’ Of Our Economic Problems

Former Sen. Rick Santorum (R-PA), who placed fourth in the Ames Straw Poll with less than 10 percent of the vote, spent some time yesterday chatting with two hate group leaders, Tony Perkins of the Family Research Council and Tim Wildmon of the American Family Association. Parroting Newt Gingrich’s rhetoric from last week, Santorum attempted to draw causation between the nation’s economic woes and “huge moral failings” like the “redefinition of marriage” and “not supporting strong nuclear families”:

SANTORUM: Letting the family break down and in fact encouraging it and inciting more breakdown through this whole redefinition of marriage debate, and not supporting strong nuclear families and not supporting and standing up for the dignity of human life. Those lead to a society that’s broken.

If you think that we can be a society that kills our own, and that disregards the family and the important role it plays, and doesn’t teach moral values and the important role of faith in the public square, and then expect people to be good, decent and moral when they behave economically, if you look at the root cause of the economic problems that we’re dealing with on Wall Street and Main Street I might add, from 2008, they were huge moral failings. And you can’t say that we’re gonna take morality out of the public square, morality out of our schools, God out of our schools, and then expect people to behave decently in a country that requires, capitalism requires some strong modicum of moral consciousness if it’s gonna be successful.

Listen to it:

Neither Santorum nor Gingrich provided any substantiation for their claims that marriage equality somehow compromises “free enterprise,” as Gingrich described it. Given that  both were speaking to social conservative audiences, the rhetoric seems a sad attempt to convince potential voters that continuing to discriminate against same-sex couples will somehow save the economy.

(HT: People for the American Way’s Right Wing Watch.)

Perry Calls For Even Bigger Corporate Tax Repatriation Giveaway Than Corporations Have Asked For

A group of corporations have launched a campaign, known as “WinAmerica,” in an attempt to convince Congress to implement a corporate tax repatriation holiday. Such a holiday would allow corporations that have stashed money offshore to bring those funds back at a dramatically lower tax rate than the 35 percent to which they are usually subjected.

The justification for such a move is job creation, but Congress already tried a repatriation holiday in 2004, with disastrous results: the corporations that benefited most from the tax holiday wound up cutting jobs in subsequent years. Kristen Forbes, who was on President Bush’s Council of Economic Advisers when the last repatriation holiday was approved, told the Boston Globe that the policy “didn’t accomplish the stated goals of bringing jobs and investment to the US.’’

House Republicans have proposed a repatriation holiday that would have corporations pay a 5.25 percent tax rate on any money they repatriate. But even that is too high for new presidential contender Gov. Rick Perry (R-TX), who said today at an event in New Hampshire that corporations should be allowed to repatriate money without paying any taxes at all:

And here’s another issue from my perspective. Corporate profits that are offshore, that we tax at 35 percent. We know for a fact that money’s not coming back. They’re going to leave that offshore. So why not look at, and talk about, how you repatriate those dollars and have those dollars focused on job creation, but allow them to come back in at a substantially lower rate than 35 percent. Say, something like, if it’s clearly going for job creation, like zero, to get this economy working again.

Watch it:

Even the corporations lobbying for a repatriation holiday haven’t gone as far as to call for the elimination of taxes on repatriated earnings, instead calling for simply a “reduction.”

The fact that the 2004 repatriation holiday didn’t create the jobs that were promised is not even the worst part of its legacy. Following that holiday, corporations increased their offshore holdings, moving more capital out of the country, in anticipation that another holiday would come along. Perry’s proposal would give the corporations who pushed money offshore everything they could have hoped for.

The repatriation holiday supported by the House GOP would cost nearly $80 billion over 10 years, a price that would obviously rise significantly under Perry’s plan to simply scrap any attempt to raise revenue from repatriation at all. Amongst GOP candidates, Herman Cain has also called for tax-free repatriation, while Mitt Romney has endorsed a repatriation holiday, but not a particular rate.

NEWS FLASH

Federal Program Meant To Help Underwater Homeowners Is Coming Up Woefully Short | The Home Affordable Modification Program (HAMP), which was supposed to help 3 to 4 million homeowners avoid foreclosure, has fallen far short of its goals, as “nearly 870,000 struggling homeowners have been kicked out of the initiative, while just 657,044 remain in permanent modifications.” And as Bloomberg News noted today, the Home Affordable Refinancing Program (HARP) is not faring much better: “A U.S. program to help as many as 5 million homeowners refinance their mortgages is being hindered by reluctant lenders, suffering a similar fate to the government’s main foreclosure-prevention effort.” Thus far, just 810,000 homeowners have refinanced through HARP.

VIDEO: GOP Super Committee Member Fred Upton’s Constituents Angrily Ask, ‘Where Are The Jobs!?’

Earlier this week, Rep. Fred Upton (R-MI) — who was recently appointed to the powerful congressional super committee that will be tasked to design a special debt deal — held a town hall in Kalamazoo, Michigan where he discussed a variety of issues with his constituents.

The town hall, which was captured on YouTube, featured an angry audience that was upset that Upton was not addressing job creation. As Upton began to discuss the role Medicare plays in the nation’s debt, a man shouted, “Where is job creation on your chart?” After that, a woman stood up and asked Upton to “cut from the top,” not from middle class Americans who’ve already beared the brunt of effects from the recession.

The woman drew applause, and audience members began chanting in favor of creating jobs, urging the congressman to make it his priority. Watch it:

At the town hall, Upton pledged not to raise the retirement age as part of the debt deal, and said that he wouldn’t “chop” entitlement benefits for today’s seniors (obviously leaving the door open to cuts for future beneficiaries). (HT: Michiganradio YouTube account)

Between 2007 And 2010, 47 Percent Of Government Jobs Were Created In Texas

Texas Gov. Rick Perry (R) has been basing his nascent presidential campaign on his anti-government views and Texas’ supposed job creation miracle. As we noted today, when labor force growth is taken into account, Texas actually has the worst job creation record in the nation (though it does lead the country in minimum wage jobs). But there is one sector that has been booming under Perry: the public sector.

As the Center on Budget and Policy Priorities’ Jared Bernstein, formerly Vice President Biden’s chief economist, pointed out, “over the last few years, government jobs have been awfully consequential in Texas”:

47% of all government jobs added in the US between 2007 and 2010 were added in Texas. The chart shows that Texas employment wasn’t down much at all in these years, as the state lost only 53,000 jobs. But looming behind that number are large losses in the private sector (down 178,000) and large gains (up 125,000) in government jobs.

As Bernstein put it, Texas has been “following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference.” As we’ve noted before, an expanding public sector is nothing new in Texas, as “employment in the state’s public sector has jumped 19 percent since 2000, compared with a 9 percent rise in the private sector.”

This is all the more remarkable, considering that Perry doesn’t believe government jobs (including his own) exist at all. Of course, these stats may not hold for long, because Texas is going to have to lay off tens of thousands of workers under the draconian budget that it put in place for the upcoming budget cycle.

NEWS FLASH

Verizon Threatens To Cut Off Health Benefits Of Striking Workers If Strike Doesn’t Stop By End Of The Month | Bloomberg News is reporting that Verizon has told its 45,000 striking workers that if they don’t return to work by the end of the month, their health care benefits will be completely cut off. The company already ended their pension benefits on Aug. 6 when their contract had expired. “This is the first time in the history of our negotiations with Verizon that they’ve threatened this much,” said Bill Huber, a business manager at the International Brotherhood of Electric Workers. “It’s a tactic they’re using to try to scare the people.”

NEWS FLASH

Reagan And H.W. Bush Economist: ‘Stop Obsessing About Debt’ | Former Reagan and George H.W. Bush administration economic official Bruce Bartlett wrote in the New York Times today, “The right policy can be debated, but the important thing is for policy makers to stop obsessing about debt and focus instead on raising aggregate demand. As Bill Gross of the investment firm Pimco put it recently: ‘While our debt crisis is real and promises to grow to Frankenstein proportions in future years, debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease.’”

REPORT: Texas Ranks Dead Last In Total Job Creation, Accounting For Labor Force Growth

Data for this post was compiled by Matt Separa, Research Assistant with the Economic Policy Team at the Center for American Progress Action Fund.

Gov. Rick Perry (R-TX), since he launched his presidential campaign on Saturday, has paraded around the stat that “since June of 2009, Texas is responsible for more than 40 percent of all of the new jobs created in America.” “Now think about that. We’re home to less than 10 percent of the population in America, but 40 percent of all the new jobs were created in that state,” Perry says.

This stat leaves out a lot of the story. The Federal Reserve Bank of Dallas has promoted the number, but “it acknowledges that the number comes out different depending on whether one compares Texas to all states or just to states that are adding jobs.” Between 2008 and 2010, jobs actually grew at a faster pace in Massachusetts than in Texas.

In fact, “Texas has done worse than the rest of the country since the peak of national unemployment in October 2009.” The unemployment rate in Texas has been steadily increasing throughout the recession, and went from 7.7 to 8.2 percent while the state was supposedly creating 40 percent of all the new jobs in the U.S.

How is this possible, since Texas has created over 126,000 jobs since the depths of the recession in February 2009? The fact of the matter is that looking purely at job creation misses a key point, namely that Texas has also experienced incredibly rapid population and labor force growth (due to a series of factors, including that Texas weathered the housing bubble reasonably well due to strict mortgage lending regulations). When this is taken into account, Texas’ job creation looks decidedly less impressive:

Clearly, there is no miracle for Texas here. While over 126,000 net jobs were created in Texas over the last two and a half years, the labor force expanded by over 437,000, meaning that overall Texas has added unemployed workers at a rate much faster than it has created jobs. And although states like Michigan have lost jobs (29,200 since February 2009), the state’s labor force has shrunk by over 185,000 since then. As a result, while there are fewer jobs, there are significantly less workers looking for them.

As Paul Krugman put it, “several factors underlie [Texas'] rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.” But they have little to do with Perry’s policies.

Now that certainly doesn’t make the situation in Michigan a good one, as contraction of the labor force is one side effect of the prolonged recession and unemployment there is still 10.6 percent. However if there is a real “miracle” here, it is North Dakota, which has seen over 27,000 new jobs and a labor force expansion of only 3,700, resulting in about 24,000 new jobs for workers who previously had none. But no one is proclaiming the “North Dakota miracle” and saying that Gov. Jack Dalrymple (R-ND) should be running for President.

Econ 101: August 17, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • Fitch Ratings yesterday “confirmed the United States’ top-notch credit rating and, in blatant disagreement with rival Standard & Poor’s, gave a vote of confidence to Washington’s deficit-reduction efforts.” [Reuters]
  • According to the latest data, “factory output increased 0.6 percent last month,” which is “the biggest increase since the March 11 earthquake in Japan, which disrupted supply chains and limited output by some U.S. auto plants.” [Associated Press]
  • Rep. Michele Bachmann (R-MN) joined in on the Federal Reserve bashing yesterday, “criticizing the central bank’s quantitative easing programs of buying government bonds to lower interest rates and boost the economy.” [Reuters]
  • The Treasury Department “is pushing back against reports that President Obama has determined that the government must continue playing a big role in the nation’s housing market.” [The Hill]
  • Anti-tax zealot Grover Norquist “said he won’t oppose an extension of U.S. gasoline and diesel- fuel taxes set to expire Sept. 30, as he pushes for broader transportation-funding overhaul.” [Bloomberg]
  • New scores from the ACT test “show that only 1 in 4 graduates of the class of 2011 who took the exam met four key benchmarks that supposedly show readiness for success in the first year of college.” [Washington Post]
  • Bank of America “may settle a state and federal probe of foreclosure practices in a deal that lets New York proceed with an inquiry into securitizations.” [Bloomberg]
  • Newt Gingrich yesterday “backed an idea floated by President Obama to extend a payroll tax break for employees that expires at the end of the year.” “I think it is very hard not to keep the payroll tax cut in this economy,” Gingrich said. [The Hill]
  • While the FBI “pats itself on the back for using ‘sophisticated investigative techniques’ to target mortgage fraudsters,” consumer advocates believe that “the FBI is missing the big picture, focusing its investigative muscle on small-time crooks and turning a blind eye to misconduct by big banks.” [Center for Public Integrity]
    • Is if fair that “a tiny Midwestern state little harmed by the Great Recession gets to decide who will lead the discussion” when it comes to the presidential nominations? [Huffington Post]
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