This is one in a series of fact-checks the Globe runs, checking statements by the presidential candidates. The following statements came from last night’s CNBC “Your Money, Your Vote” Republican debate in Michigan.
Texas Governor Rick Perry: “And that’s a reason my flat tax is the only one of all of the folks…it balances the budget in 2020.”
Overlooked after Perry’s forgetfulness on which federal agencies he would cut was this statement that Perry’s flat tax would balance the budget. In fact, Perry says his entire “Cut, Balance, and Grow” economic plan would balance the budget by 2020. But that is not because of the flat tax provision. It is because it would cap federal spending at 18 percent of GDP, cut non-discretionary spending immediately, eliminate earmarks, and make other budgetary changes. The flat tax part of the plan, according to the non-partisan Tax Policy Center, would reduce federal tax revenues dramatically – by around $995 billion in 2015.
Former House Speaker Newt Gingrich, asked about a payment he received from Freddie Mac: “I have never done any lobbying. Every contract that was written during the period when I was out of office said I would do no lobbying. I offered advice. My advice as an historian when they walked in and said ‘We are now making loans to people that have no credit history and have no record of paying back anything but that’s what the government wants us to do.’ I said at the time, this is a bubble.”
It is not clear whether Gingrich was hired as a lobbyist or consultant – although as a former House speaker, he likely knew all the players involved. This issue stems from an Associated Press story in 2008 , which reported that Freddie Mac paid prominent conservative consultants and lobbyists to fend off government regulations in the years before the housing market crashed. The AP reported that the Bush administration was worried about the financial impact if one of the large federal mortgage companies turned sour. “Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records,” the AP wrote. “Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.”
Former Massachusetts Governor Mitt Romney, asked whether he would support President Obama’s plan to extend a payroll tax cut: “I don’t want to raise taxes on people in the middle of a recession. Of course not…I want to keep our taxes down. I don’t want to raise any taxes anywhere. Let me tell you, I’m not looking to raise taxes.”
Leaving aside the technical question of whether the country is still in the middle of a recession (it’s not), Romney did not quite answer the question. But he implied that he would support extending the payroll tax cut. That’s a different answer than one he gave at a debate in New Hampshire last month when he was asked about the payroll tax cut. He responded then, “I don’t like temporary little Band-Aids,” and said he would prefer to permanently change the tax code.
As a bonus, we’ll fact-check the fact-checker.
The Democratic National Committee, in a release, hit Romney for allegedly flip-flopping on his position on tariffs. Talking about the trade relationship with China, Romney said during the debate, “Where they have stolen intellectual property, where they have hacked into computers, and where their artificial pricing is causing their goods to have predatory levels of pricing, I would apply, if necessary, tariffs to make sure that they understand we are willing to play at a level playing field.” The DNC, citing Romney’s 2010 book “No Apology,” pointed out that Romney previously criticized Obama for imposing a tariff on foreign tires.
The DNC is right that Romney wrote in his book that Obama’s action on tariffs “is decidedly bad for the nation and our workers,” adding that “protectionism stifles productivity.” But the DNC ignores what Romney wrote a few sentences before that: that there “may be extremely rare occasions” when government should protect a domestic industry from foreign competition. One of those times, Romney wrote, is “When a country has artificially held down the value of its currency so that its products have a sizeable cost advantage when they enter the American market, we must act to persuade that nation to allow its currency to adjust to market rates.”
That is exactly the situation Romney was addressing in the debate, and is in line with what he wrote in his book.
Shira Schoenberg can be reached at sschoenberg@globe.com. Follow her on Twitter @shiraschoenberg.