OBAMA: “I've proposed a specific $4 trillion deficit-reduction plan. ... The way we do it is $2.50 for every cut, we ask for $1 in additional revenue.”
THE FACTS: In promising $4 trillion, Obama is already banking more than $2 billion from legislation enacted last year that cut agency operating budgets and capped them for 10 years. He also claims more than $800 billion in war savings that would occur anyway. And he uses creative bookkeeping to hide spending on Medicare reimbursements to doctors. Take those “cuts” away and Obama's $2.50/$1 ratio of spending cuts to tax increases shifts significantly more in the direction of tax increases.
ROMNEY on cutting the deficit: “Obamacare's on my list. ... I'm going to stop the subsidy to PBS. ... I'll make government more efficient.”
THE FACTS: Romney has promised to balance the budget in eight years to 10 years, but he hasn't offered a complete plan. Instead, he's promised a set of principles, some of which — like increasing Pentagon spending and restoring more than $700 billion in cuts that Democrats made in Medicare over the coming decade — work against his goal. He also has said he will not consider tax increases.
He pledges to shrink the government to 20 percent of the size of the economy, as opposed to more than 23 percent of gross domestic product now, by the end of his first term. The Romney campaign estimates that that would require cuts of $500 billion from the 2016 budget alone. He also has pledged to cut tax rates by 20 percent, paying for the cuts by eliminating tax breaks for the wealthiest and through economic growth.
To fulfill his promise, then, Romney would require cuts to other programs so deep — under one calculation requiring cutting many areas of the domestic budget by one-third within four years — that they could never get through Congress. Cuts to domestic agencies would have to be particularly deep.
OBAMA: “Gov. Romney's central economic plan calls for a $5 trillion tax cut — on top of the extension of the Bush tax cuts, that's another trillion dollars — and $2 trillion in additional military spending that the military hasn't asked for. That's $8 trillion. How we pay for that, reduce the deficit and make the investments that we need to make, without dumping those costs onto middle-class Americans, I think is one of the central questions of this campaign.”
THE FACTS: Obama's claim that Romney wants to cut taxes by $5 trillion doesn't add up. Presumably, Obama was talking about the effect of Romney's tax plan over 10 years, which is common in Washington. But Obama's math doesn't take into account Romney's entire plan.
Romney proposes to reduce income tax rates by 20 percent and eliminate the estate tax and the alternative minimum tax. The Tax Policy Center, a Washington research group, says that would reduce federal tax revenues by $465 billion in 2015, which would add up to about $5 trillion over 10 years.
However, Romney says he wants to pay for the tax cuts by reducing or eliminating tax credits, deductions and exemptions. The goal is a simpler tax code that raises the same amount of money as the current system but does it in a more efficient manner.
ROMNEY: Obama's health care plan “puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have. I don't like that idea.”
THE FACTS: Romney is referring to the Independent Payment Advisory Board, a panel of experts that would have the power to force Medicare cuts if costs rise beyond certain levels and Congress fails to act. But Obama's health care law explicitly prohibits the board from rationing care, shifting costs to retirees, restricting benefits or raising the Medicare eligibility age. So the board doesn't have the power to dictate to doctors what treatments they can prescribe.
ROMNEY: “At the same time, gasoline prices have doubled under the president. Electric rates are up.”
THE FACTS: He's right that the average price has doubled, and a little more, since Obama was sworn in. But presidents have almost no influence on gasoline prices, and certainly not in the near term. Gasoline prices are set on financial exchanges around the world and are based on a host of factors, the most important being the price of crude oil used to make gasoline, the amount of finished gasoline ready to be shipped and the capacity of refiners to make enough to meet market demand.
Retail electricity prices have risen since Obama took office — barely. They've grown by an average of less than 1 percent per year, less than the rate of inflation and slower than the historical growth in electricity prices. The unexpectedly modest rise in electricity prices is because of the plummeting cost of natural gas, which is used to generate electricity.
ROMNEY: Obama put $90 billion into green jobs and half the companies backed by the program have gone out of business.
THE FACTS: The Energy Department has put $90 billion worth of grants, loan guarantees and loans into what it calls a “clean energy” economy. But that money is spread widely. In addition, a significant portion of the money the Energy Department distributed came in the form of loans, some of which will be paid back. (In the case of failed solar manufacturer Solyndra, that was an absolute loss for taxpayers.)
The claim that half the companies have gone out of business is a gross overstatement. Of nearly three dozen recipients of loans under the Department of Energy's loan guarantee program, only three are currently in bankruptcy, although several others are facing financial difficulties.
Romney also said that “many” of the companies that received such loans were supported by campaign contributors. George Kaiser, a major fundraiser for Obama's 2008 campaign, was an investor in Solyndra but there are also examples of Republican and Democratic campaign contributors who also invested in firms supported by the loan guarantee program.
— The Associated Press, the New York Times and the Boston Globe