WASHINGTON (TheBlaze/AP) — President Barack Obama promised to clear red tape away from highway projects that actually are stalled because there’s no money for them, not because rules are in the way. He’s ordering a higher minimum wage for a sliver of the workforce, which affects no one now and not many later.
Going it alone — without Congress making a law — just doesn’t go as far as President Barack Obama made it sound at times Tuesday night in his State of the Union speech.
A look at some of the facts and political circumstances behind his claims, along with a glance at the Republican response:
OBAMA: “Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.”
THE FACTS: The most recent evidence suggests that mobility hasn’t worsened. A team of economists led by Harvard’s Raj Chetty released a study last week that found the United States isn’t any less socially mobile than it was in the 1970s. Looking at children born between 1971 and 1993, the economists found that the odds of a child born in the poorest 20 percent of families making it into the top 20 percent hasn’t changed.
“We find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s,” the authors said.
Still, other research has found that the United States isn’t as mobile a society as most Americans would like to believe. In a study of 22 countries, economist Miles Corak of the University of Ottawa found that the United States ranked 15th in social mobility. Only Italy and Britain among wealthy countries ranked lower. By some measures, children in the United States are as likely to inherit their parents’ economic status as their height.
OBAMA: “We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer. But I will act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.”
THE FACTS: Cutting rules and regulations doesn’t address what’s holding up most transportation projects, which is lack of money. The federal Highway Trust Fund will run out of money in August without action. To finance infrastructure projects, Obama wants Congress to raise taxes on businesses that keep profits or jobs overseas, but that idea has been a political nonstarter.
The number of projects affected by the administration’s efforts to cut red tape is relatively small, said Joshua Schank, president and CEO of the Eno Center for Transportation, a think tank. “The reason most of these projects are delayed is they don’t have enough money. So it’s great that you are expediting the review process, but the review process isn’t the problem. The problem is we don’t have enough money to invest in our infrastructure in the first place.”
OBAMA: “In the coming weeks, I will issue an executive order requiring federal contractors to pay their federally funded employees a fair wage of at least $10.10 an hour, because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”
THE FACTS: This would be a hefty boost in the federal minimum wage, now $7.25, but not many would see it.
Most employees of federal contractors already earn more than $10.10. About 10 percent of those workers, roughly 200,000, might be covered by the higher minimum wage. But there are several wrinkles. The increase would not take effect until 2015 at the earliest and it doesn’t apply to existing federal contracts, only new ones. Renewed contracts also will be exempt from Obama’s order unless other terms of the agreement change, such as the type of work or number of employees needed.
Obama also said he’ll press Congress to raise the federal minimum wage overall. He tried that last year, seeking a $9 minimum, but Congress didn’t act.
REP. CATHY McMORRIS RODGERS of Washington, in her prepared Republican response: “Last month, more Americans stopped looking for a job than found one. Too many people are falling further and further behind because, right now, the president’s policies are making people’s lives harder.”
THE FACTS: She leaves out a significant factor in the high number of people who aren’t looking for jobs: Baby boomers are retiring.
It’s true that a large part of the still-high unemployment rate is due to jobless workers who have given up looking for a job. There are roughly three people seeking every job opening, a circumstance that can discourage others from trying. But one big reason people aren’t seeking employment is that there are so many boomers — the generation born in the immediate aftermath of World War II — and therefore more than the usual number of retirements.
As of December, the economy had gained 3,246,000 jobs since Obama took office in January 2009. When he was inaugurated, the unemployment rate was 7.8 percent and on the rise. It peaked at 10 percent in October 2009 and has been inching down ever since, to 6.7 percent this past December.
The fact-checking website Politifact also gave President Obama two “true” ratings and a “half-true” on Tuesday night.
Firstly, the site reports that Obama was telling the truth when he argued “average wages have barely budged.” Citing federal statistics, “the average annual wage increased by 8.3 percent between 2008 and 2012. … “However, this raw wage data doesn’t take into account inflation — something economists like to consider when determining whether a wage ‘barely budged.’”
Some will surely argue the debate isn’t as settled as the president claims.
Secondly, Politifact also gave Obama a “true” rating on his claim that “more oil [has been] produced at home than we buy from the rest of the world – the first time that’s happened in nearly 20 years.” They gave the rating based on a “variety of reasons,” listed here.
Obama’s claim about reducing carbon pollution received only a “half-true” rating.
“Over the past eight years, the United States has reduced our total carbon pollution more than any other nation on Earth,” the president boasted.
If the cuts are measured by percentage, his claim doesn’t hold water, according to Politifact.