Obama and Romney's Declarations: True or False?

This is a continuing analysis of the main economic talking points brought up by the two rivals during the debate that took place in Denver, Colorado, on Wednesday evening.

Mitt Romney’s promise of $5 trillion in tax cuts

Obama lambasted Romney during the debate for promising the equivalent of $5 trillion in tax reductions, and consequently the same sum less in tax receipts for the state.

Mitt Romney intends to take 20 percent off all tax rates; the highest income tax rate would decrease from 35 percent to 28 percent, while the lowest rate would drop from 10 percent to 8 percent. If such a measure were ever seriously implemented, the decrease in tax revenue would, according to an audit from the Tax Policy Center, indeed come close to $480 billion by 2015 and slightly less than $5 trillion over 10 years. But the problem is not so much with the predicted result as with the details of the new tax scale, the base of which has never been spelled out by the Republican candidate.

Mitt Romney’s promise to create 12 million jobs

Possibly Mitt Romney’s least credible assertion. If we accept the projections of economists, notably those of Moody’s, as quoted in The New York Times, the upturn should induce the creation of around 11.8 million jobs between 2012 and 2016. Romney, then, is promising the creation of an extra 200,000 jobs on top of what the economy is expected to produce naturally.

Mitt Romney’s accusation that Obama took $716 billion from the Medicare program in order to put in place his own “Obamacare” program

This is a manifest piece of electioneering aimed at garnering sympathy from older voters covered by the Medicare health insurance program. In 2010, at the time of the vote on the Affordable Health Care Act (also known as “Obamacare”), the reimbursements undertaken by Medicare to hospitals and insurers were suspended. Romney claims that this act of money-saving was a ploy to increase the number of Social Security beneficiaries.

If these payments were re-introduced, the cost would be $716 billion between 2013 and 2022, there would be repercussions for the contributions of individual Americans and Medicare would see its funds greatly reduced, according to calculations made by the Republican Party. Moreover, the suspension of reimbursements hits hospitals financially, and could lead to them refusing to accept beneficiaries of Medicare.

While the Republicans may be right to question the tenability of the suspension, their positions is to an extent an evasion aimed at scaring Medicare beneficiaries, a part of the electorate which tends toward the right, and masking a pole of Romney’s own program concerning health care coverage. Despite positioning himself as an opponent of Obamacare, Romney put in place a similar system in Massachusetts, and seeks to replace it with a system of vouchers allowing each American to pick the health care coverage of his own choosing without resorting to Social Security — an option that would entail a penalty.

Romney’s criticism of Obama for wrongly favoring “green jobs”

According to the Republican candidate, half of the $90 billion invested, in the form of grants and loans, in the “clean energy economy” have been wasted. The Washington Post details the investments by sector: roughly $3 billion spent on projects for the capture and storage of CO2 in an attempt to reduce the environmental impact of carbon; around $11 billion on energy efficiency; around $5 billion on the decontamination of former nuclear weaponry locales; roughly $4 million on the modernization of the electricity network; and lastly, around $2 billion on research and development.

Yet Romney, who in fact supports investment in CO2 capture and in R&D, suggests that the money has been invested in companies whose directors have contributed to the Obama campaign. The Sylindra company, a donor to the Democratic campaign and allegedly a beneficiary of subsidies, is one of the Republicans’ targets. As yet, however, no direct link has been established between government subsidies and donations to the Democrats.

The Washington Post also emphasizes the fact that the majority of subsidies take the form of loans that will, in time, be repaid. On the other hand, and with respect to Romney’s team, the tax breaks enjoyed every year by oil and gas companies constitute a shortfall for the state. As such, before the implementation of the policy of favoring green energy, the subsidies accorded to the fossil fuel sector were four times greater than those accorded to green energies.

Public debt, public deficit: Who sank America into the red?

Mitt Romney states as fact that Barack Obama has doubled the national debt over the course of his four years in office. U.S. debt rose from $10.6 trillion in January 2009, when Obama took office, to slightly over $16 trillion today, at the end of his term, according to figures from the American Treasury. In this instance, the Republican camp’s assertion is false.

The fact-checking site PolitiFact has calculated, however, that on current trends the national debt is rising by $4.16 billion every day. But according to figures released by Congress, the deficit is improving, and will drop from $1.3 trillion in 2012 to a little less than $1 trillion in 2013. And according to the PIB, the public deficit dropped from 10 percent in 2009 to 8.5 percent in 2012.

Barack Obama has committed, in the event of his re-election, to make savings of a further $4 trillion. For his part, Mitt Romney has included in his campaign promises a “deficit neutral” budget — that is, not to add to the deficit. But again, aside from his fiscal proposals, he remains vague about the savings he plans to make in order to compensate for the reductions in tax rates that he would like to implement.