In accepting the Democratic nomination for a second term, President Obama offered a forceful response to criticism about his budget deficits, saying he has a plan to bring them down.
“You can choose a future where we reduce our deficit without sticking it to the middle class,” the President said. “Independent experts say that my plan would cut our deficit by $4 trillion.”
A claim about unnamed “independent experts” is certain to catch the attention of our Investigations Inc. fact-checking team, which tore into this one.
Among the “experts” the president was referring to—and has cited in the past—are at the Center for Budget and Policy Priorities, which describes itself as “one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.”
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The focus on low-income issues has earned the center the characterization of “left-leaning” in some articles, though officially it is non-partisan.
In a February report analyzing the president’s fiscal 2013 budget, the center concluded the budget would reduce the deficit by $3.8 trillion over ten years. The figure included $1 trillion in cuts already agreed to with Congress, but did not include $1 trillion in savings counted by the administration from ending the wars in Iraq and Afghanistan.
The campaign also points to estimates by the non-partisan Congressional Budget Office, but here, things get even more complicated.
The Congressional Budget Office concluded in March that the president’s 2013 budget would increase the deficit by $3.5 trillion over its baseline projections over ten years. But that does not tell the full story, because the CBO always bases its projections on the assumption that current laws do not change. Among other things, the CBO assumes all of the Bush tax cuts would be allowed to expire as scheduled at the end of this year, which few consider likely.
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So the CBO offers what it calls an “alternative fiscal scenario” in which all the income tax cuts are extended for ten years—which the administration opposes—then compares that to the President’s budget.
The alternative scenario—with all the Bush tax cuts extended—would lead to a ten-year deficit of $10.7 trillion according to the CBO. The estimated deficit under the Obama plan: $6.39 trillion, or $4.31 trillion less than the CBO’s “alternative scenario.”
So the president’s claim of a $4 trillion deficit cut verified by “independent experts” has some merit, at least under one scenario. But under another scenario, from those same experts, the deficit would rise.
The rescue of the U.S. auto industry was a big topic for the Democrats, President Obama among them.
“I've met workers in Detroit and Toledo who feared they'd never build another American car,” the president said. “And today they can't build them fast enough because we reinvented a dying auto industry that's back on the top of the world.”
Some fact checkers have seized on the “top of the world” characterization, noting that for the first half of 2012, General Motors has fallen behind Toyota in total auto sales, and could slip to third place behind Volkswagen if current trends continue.
But Obama referred to the entire U.S. auto industry, not just General Motors. Advocates of the bailout point out that even Ford—which did not receive bailout money—favored the plan because it would protect the auto parts supply chain. Chrysler was bailed out and ultimately was taken over by Italian automaker Fiat. It's tricky to split the U.S. and Italian portions of Chrysler and Fiat, so we looked at global market share for last month, as compiled by IHS Automotive.
It placed U.S. market share at 20.9 percent, well above Japan at 9.2 percent and Germany at 4.8 percent. But there is another player: China, whose market share really is on top of the world at 23.6 percent. To be fair, though, much of the Chinese auto industry includes joint ventures with U.S. automakers.
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Vice President Joe Biden also spoke on the final day of the Democratic National Convention, and launched into an area our fact checkers have tackled before: Medicare.
Last month, we found both campaigns taking liberties with the facts on each other’s proposals. Last night, Biden came up with a new line of attack on the Republican plan.
"What they didn't tell you is that the plan they have already put down on paper would immediately cut benefits for more than 30 million seniors already on Medicare," Biden said.
In fact, Mitt Romney and Paul Ryan’s Medicare proposal specifically excludes anyone over 55, meaning current retirees and those approaching retirement would not be affected.
But it turns out Biden was not referring to the Romney-Ryan Medicare plan. He was referring to the GOP candidates’ promise to repeal Obamacare. The Affordable Care Act does include increased Medicare benefits that have already taken effect, including free preventive screenings and an end to the so-called “doughnut hole” in the prescription drug benefit. Repealing Obamacare in its entirety as Romney and Ryan promise would eliminate those improvements, though the Republicans say they do not plan to cut benefits for current Medicare recipients.
Finally, we wondered which company the president was referring to when he said this:
"The family business in Warroad, Minnesota, that didn't lay off a single one of their 4,000 employees when the recession hit, even when their competitors shut down dozens of plants, even when it meant the owner gave up some perks and some pay because they understood that their biggest asset was the community and the workers who had helped build that business they give me hope.”
The Obama campaign confirms the company is Marvin Windows and Doors, which indeed has maintained a no layoff policy.
But the owners of the family business do not appear to be big fans of the president, according to the Center for Responsive Politics, which lists contributions to Republicans including multiple donations to former Minnesota Governor and Romney supporter Tim Pawlenty.
—By CNBC's Scott Cohn