We understand that the State of the Union is mostly a political speech and really shouldn’t be taken seriously. Unfortunately, the American press takes it all too seriously, except for checking facts from the lips of presidents.
So with Friday upon us, we’ve concluded our week going through the text of the 2015 State of the Union, all 6,500 words of it. We’re sure you’re grateful we won’t reprint it all here, but we are going to go through most of it and fact check it – something the press should be doing more vigorously.
Obama: We are fifteen years into this new century. Fifteen years that dawned with terror touching our shores; that unfolded with a new generation fighting two long and costly wars; that saw a vicious recession spread across our nation and the world. It has been, and still is, a hard time for many.
But tonight, we turn the page.
Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years.
This, of course, is hyperbole. As we pointed out in our post Wednesday on the limited fact-checking that the AP does every year, the economy is nowhere near it was before the recession. In other words, all we’ve done is turn the page.
Even CNN, a liberal-leaning network that likes most of Obama’s economic policies, agrees with the facts:
Sixty percent of U.S. cities have not recovered to their pre-recession levels, according to the Brookings Institution’s new MetroMonitor report, which ranks the economic health of 300 cities in the world.
From USA Today: The president boasted that the U.S. has gained 11 million private sector jobs in five years. Yes, but that ignores his first 13 months in office and a net loss of public sector jobs. Total employment growth during his time in office is about 6.4 million.
Obama: The shadow of crisis has passed, and the State of the Union is strong.
At this moment — with a growing economy, shrinking deficits, bustling industry, and booming energy production — we have risen from recession freer to write our own future than any other nation on Earth. It’s now up to us to choose who we want to be over the next fifteen years, and for decades to come.
Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?
CNN: The report also reinforces the trend that wage growth remains flat while the economy adds jobs. Almost all U.S. cities on Brookings’ list had more employment growth than GDP per capita gains between 2013 and 2014.
Obama: Will we allow ourselves to be sorted into factions and turned against one another — or will we recapture the sense of common purpose that has always propelled America forward?
This is really rich coming from a politician who has made class-warfare politics the centerpiece of both his political campaigns as well as his governing style. We saw this front and center in Chicago when Obama came here to campaign for Pat Quinn and promote issues like the minimum wage, and then scooting off to a $30,000/plate fundraiser.
Obama: In two weeks, I will send this Congress a budget filled with ideas that are practical, not partisan. And in the months ahead, I’ll crisscross the country making a case for those ideas.
What was he just saying about allowing ourselves to be sorted into factions?
After relaying an anecdote about a struggling young couple from Minneapolis, Obama said:
They represent the millions who have worked hard, and scrimped, and sacrificed, and retooled. You are the reason I ran for this office. You’re the people I was thinking of six years ago today, in the darkest months of the crisis, when I stood on the steps of this Capitol and promised we would rebuild our economy on a new foundation. And it’s been your effort and resilience that has made it possible for our country to emerge stronger.
This was the beginning of Obama talking about his focus of “middle class economics.” Part of that agenda is promising free community college for those who haven’t “scrimped, and sacrificed, and retooled,” while proposing to tax the 529 college savings plans for those who have sacrificed to save. This is especially insulting because 529s are not like some retirement accounts; they are paid for with after-tax money. So Obama is proposing to treat them like capital gains; to double tax them.
Obama: We believed we could reverse the tide of outsourcing, and draw new jobs to our shores. And over the past five years, our businesses have created more than 11 million new jobs.
Yes, the economy has created new jobs, but not enough to get us back to where we were before the recession started. Furthermore, many of those new jobs are part-time jobs, not the full-time jobs that were lost during the recession. And, of course, while the unemployment rate is down, that’s only because the labor-participation rate is at a 40-year low, meaning that many people have simply stopped looking for work or accepted a plight of waiting on tables for tips.
Obama: We believed we could reduce our dependence on foreign oil and protect our planet. And today, America is number one in oil and gas. America is number one in wind power. Every three weeks, we bring online as much solar power as we did in all of 2008. And thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.
Bragging about a reduction in foreign oil dependence is comical coming from Obama, who fought the oil and gas industry every stop of the way. And while solar power, still quite inefficient even in the sunniest portions of this country, remains a miniscule source of energy. No surprise, there was no mention of the hundreds of millions of dollars his administration lost by providing government-backed loans to firms like collapsed Solyndra.
Obama: We believed we could prepare our kids for a more competitive world. And today, our younger students have earned the highest math and reading scores on record. Our high school graduation rate has hit an all-time high. And more Americans finish college than ever before.
According to Neal McClusky, who follows education at the Cato Institute, graduation rates are up, but high school test scores are flat over the past four decades while spending has more than doubled.
Obama: So the verdict is clear. Middle-class economics works. Expanding opportunity works. And these policies will continue to work, as long as politics don’t get in the way. We can’t slow down businesses or put our economy at risk with government shutdowns or fiscal showdowns. We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve got a system to fix. And if a bill comes to my desk that tries to do any of these things, it will earn my veto.
So much for bipartisanship. The president continues to ignore the results of the November elections in which his party – and, by extension and by his own words, his policies – got shellacked and told the Republicans that if they try to change any of this, he’ll veto it.
Obama: Today, thanks to a growing economy, the recovery is touching more and more lives. Wages are finally starting to rise again.
Again, even CNN (and almost every nonpartisan economic study) refutes this.
Obama: We know that more small business owners plan to raise their employees’ pay than at any time since 2007.
That’s because a slew of Democrat mayors and governors – including Illinois’ Pat Quinn and Chicago’s Rahm Emanuel – are forcing businesses to pay higher minimum wages, despite overwhelming evidence from both academic and government studies that show that a higher minimum wage most hurts low-skilled and minority workers, the very people the policy (falsely) purports to help.
Obama: So what does middle-class economics require in our time?
Here’s one example. During World War II, when men like my grandfather went off to war, having women like my grandmother in the workforce was a national security priority — so this country provided universal childcare. In today’s economy, when having both parents in the workforce is an economic necessity for many families, we need affordable, high-quality childcare more than ever. It’s not a nice-to-have — it’s a must-have. It’s time we stop treating childcare as a side issue, or a women’s issue, and treat it like the national economic priority that it is for all of us. And that’s why my plan will make quality childcare more available, and more affordable, for every middle-class and low-income family with young children in America — by creating more slots and a new tax cut of up to $3,000 per child, per year.
Policy analysts say that this is as much about expanding Head Start and other preschool programs as it is the tax break. The problem is, myriad studies have shown that any positive effects of Head Start fade as early as the third grade, meaning there is no difference in outcomes for kids who did and kids who didn’t attend preschool.
Obama: Here’s another example. Today, we’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave. Forty-three million. Think about that. And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home. So I’ll be taking new action to help states adopt paid leave laws of their own. And since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington. Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave. It’s the right thing to do.
Here’s what the Harvard Business Review said about that: An initial glance at the private sector looks as though access to sick leave has improved. While the percentage of workers with access to holiday and vacation days has stayed the same or decreased over the last 20 years, those with paid sick, personal, and paid leave has jumped. Indeed, 61% of workers have paid sick leave today, up from 50% in the early 1990s.
And from USA Today: Obama exaggerated when he said the U.S. is “the only advanced country on Earth that doesn’t guarantee paid sick leave.” Canada and Japan also don’t mandate paid short-term sick leave, which is what Obama is seeking for the U.S.
Obama: Of course, nothing helps families make ends meet like higher wages. That’s why this Congress still needs to pass a law that makes sure a woman is paid the same as a man for doing the same work. Really. It’s 2015.
Yes, Mr. President, it is, and equal pay laws have been on the books since the 1970s. Really. That’s 40 years ago.
Obama: And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.
It’s a nice applause line, but as we’ve pointed out here many times before, less than 3% of workers make minimum wage according to the government’s own studies. Of those who do, a large majority are under 25 and an even larger majority are single and not at all needing to “support a family on less than $15,000 a year.” And those workers tend to be stuck in minimum wage for six months or less.
We’ve had big fun with the Chicago Sun-Times and its “Faces of Minimum Wage” series. Even in urban Chicago, the paper has yet to present someone who actually makes minimum wage.
Obama: By the end of this decade, two in three job openings will require some higher education. Two in three. And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need. It’s not fair to them, and it’s not smart for our future.
That’s why I am sending this Congress a bold new plan to lower the cost of community college — to zero.
If education is too costly, perhaps the president can thank the teachers unions with whom his party has been so cozy for decades. As noted earlier, costs have doubled and results are nowhere near in step.
What the president left out of “free” college is that he’ll only make community college three-quarters free. According to the details of his plan, the federal government will pay 75% of the cost, while the cash-strapped states are expected to pick up the other 25%. In other words, like much of the speech, this is an applause line, not a serious proposal.
Obama: Since 2010, America has put more people back to work than Europe, Japan, and all advanced economies combined. Our manufacturers have added almost 800,000 new jobs. Some of our bedrock sectors, like our auto industry, are booming.
Scott Paul, President of the Alliance for American Manufacturing, thought Obama’s view on U.S. manufacturing and trade was a bit too rosy.
“President Obama has oversold the manufacturing resurgence,” he said. “Yes, 786,000 jobs have been added in manufacturing since 2010. Most of those jobs were added as the result of increased demand during the recovery. Some of them were added thanks to the auto rescue. Virtually none of those jobs were added due to reshoring.”
Obama: As Americans, we don’t mind paying our fair share of taxes, as long as everybody else does, too. But for far too long, lobbyists have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight.
We’re guessing the president is referring to the green energy tax breaks that allowed General Electric to pay no taxes. What made this doubly ironic is the fact that GE CEO Jeffery Immelt was Obama’s “jobs czar” at the same time he was moving a big chunk of GE’s medical diagnostics business from Wisconsin to China.
Obama: And let’s close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth.
It’s interesting that the president used the word “wealth” here instead of “income.” While the president would be loath to admit it, the U.S. already has a progressive income tax system. According to the latest Congressional Budget Office numbers, the top 20% of income earners pay 70% of all federal taxes, while earning just over 50% of before tax income. The top 1% pay 24% of all federal taxes, while earning only 14.6% of before tax income.
Obama: We can use that money to help more families pay for childcare and send their kids to college.
Again, this is doubly disingenuous because, as we noted, Obama wants to tax 529 accounts, which are already funded with after-tax money. As The Wall Street Journal said in an editorial:
“As of June 30, 2014 there were 11.8 million 529 accounts holding $244.5 billion in assets, according to the College Savings Plans Network, a group of state officials who administer the plans. The average account balance was $20,671. That sounds a lot like “the middle class.”
All of these are statistics that we looked up easily, and the press could have as well.
In the meantime, we’ll keep watching…and reporting.