ABC News' Huma Khan, Elizabeth Hartfield, Matt Negrin, Chris Good, Amy Bingham, Jeunee Simon, Greg Krieg, Meg Fowler and Sarah Parnass report:
Fact Check 1 - The Booming Economy Fact Check 2 - Obama's Plan for Foreclosures Fact Check 3 - The American Auto Industry is Back Fact Check 4 - Obama's Plug for Students Fact Check 5 - The Rich, Their Secretaries and Taxes Fact Check 6 - Soaring Energy Production and Advances in Offshore Drilling Fact Check 7 - Overseas Tax Breaks Fact Check 8 - Can Obama Tax the Rich to Save the Debt? Fact Check 9 - Who Took on China More? Fact Check 10 - Milk Versus Oil Fact Check 11 - Obama Repeats a Demand to Tone It Down Fact Check 12 - Stimulating the Stimulus and Using the War Funds to Pay Down the Debt
Did the economy crater before President Obama's inauguration, then rebound once his policies took effect?
It seems unlikely that the president would utter inaccurate jobs numbers during his State of the Union address, but while we wait for official White House citation, the president made at least one claim that for now looks iffy. The transcript:
" In the six months before I took office, we lost nearly four million jobs. And we lost another four million before our policies were in full effect. Those are the facts. But so are these. In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005."
**UPDATE: President Obama was referring exclusively to private-sector jobs when talking about jobs lost before his time in office, according to a White House official. Based on this private-sector jobs chart, the economy lost 3.506 jobs in the six months before his inauguration, not 4 million.
"That's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust."
The Obama administration has announced a number of programs to salvage the housing market, which continues to be a drag on the U.S. economy. Today, the president was referring to a plan he announced in October from the front porch of a home in Las Vegas, which has one of the highest foreclosure rates in the country. The president's plan would allow struggling homeowners who have mortgages backed by Fannie Mae or Freddie Mac to refinance without getting a new appraisal or a full credit check. The program would also eliminate some risk-based fees for borrowers.
The proposal would alter the $75 billion Home Affordable Refinance Program, or HARP, which was launched in 2009 to help distressed homeowners.
If a homeowner has a mortgage of $250,000 at a 6 percent interest rate, they would be able to take advantage of record low interest rates and refinance their home. If they got a rate that's 4.5 percent or lower, the homeowner would save $250 a month, or $3,000 a year. Given that there are 4 million homeowners who are backed by government-sponsored entities, the administration says the program can help millions of Americans.
But the initial HARP program fell short of its initial goals, with only about 900,000 homeowners taking advantage of it, far less than what the administration had hoped. Additionally, many homeowners who took advantage of the program ended up defaulting again on their mortgage.
The president tonight touted this new proposal as having no red tape or runaround from banks, but there are a number of caveats in his program. Only those who signed a mortgage before May 31, 2009, and have not refinanced previously under the Home Affordable Refinance Program are eligible for the new scheme. The loan-to-value ratio has to be greater than 80 percent. Borrowers must also have good credit and must have kept up with their mortgage payments, with no late payment in the past six months and no more than one late payment in the past 12 months.
Some economists calculate that it would only benefit 1 million households, a relatively small number given that more than 6 million homeowners are facing foreclosure or have delinquent payments. Others say the restrictions are too stringent and automatically cut out those under-water homeowners who have bad credit.
The manufacturing sector is a key part of Obama's "Blueprint for An America Built to Last," which he outlined in his state of the union address, and a key part of that sector is the American automobile industry. "On the day I took office, our auto industry was on the verge of collapse … and tonight, the American auto industry is back," Obama said in his address.
When Obama took office in 2008 the American auto industry was indeed in crisis. General Motors, Chrysler, and Ford were all facing financial turmoil, and seeking government bailouts in order to stay afloat. In 2009, Obama hired Steve Rattner to serve as his car czar, and oversee the federal bailout of these three American institutions.
Today, General Motors, Chrysler, and Ford have turned around. General Motors recently reclaimed its place as the top-selling automaker in the world, ousting the previous top-seller, Toyota. Chrysler is currently America's fastest growing car company, and Ford recently announced plans to invest $446 million in manufacturing in Brazil.
As part of this claim, Obama gave a subtle jab to his one of the GOP presidential candidates, Mitt Romney. On the topic of the auto industry, Obama said "some even said we should let it die." That comment was likely a reference to the former Massachusetts governor's 2008 Op-Ed piece in the New York Times titled "Let Detroit Go Bankrupt," in which Romney argued against a bailout for the industry.
In his State of the Union speech tonight, President Obama said Congress should slow interest rates on student loans because "Americans owe more in tuition debt than credit card debt."
As of late 2010, that's true. In September, a student aid study reported that Americans owed $830 billion in student loan debt, and $825 billion in credit card debt.
The National Center for Education Statistics says : "38 percent [of all undergraduates in 2007-08] took out an average of $7,100 in student loans … and 4 percent of students had parents who took out an average of $10,800 in Parent PLUS loans. … 34 percent of all undergraduates took out federal Stafford loans averaging a total of $5,000. Subsidized Stafford loans were received by 30 percent of undergraduates and averaged $3,400, while 22 percent received an average of $3,200 in unsubsidized Stafford loans."
Treasury Secretary Geithner yesterday declined to answer a key question about the president's proposed "Buffett Rule": How many millionaires and billionaires pay lower tax rates than middle-income families?
The answer: not that many.
Nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we've opened millions of new acres for oil and gas exploration, and tonight, I'm directing my Administration to open more than 75 percent of our potential offshore oil and gas resources. Right now, American oil production is the highest that it's been in eight years. That's right - eight years. Not only that - last year, we relied less on foreign oil than in any of the past sixteen years.
The president tonight touted the rise in domestic energy production and a decrease in U.S. oil imports during his term. While his claims on oil production are true, they don't quite live up to the facts when it comes to imports.
In 2010 - the most recent full year for which the U.S. Energy Information Administration has published data - crude oil production was the highest since 2003. Total energy production, which includes fossil fuels and renewable energy, was the highest it has been since the EIA started recording the data in 1949. Read more from the EIA here.
In the first seven months of 2011, total production was more than 5 percent higher than during the same time period in 2009, and the total numbers for the full year 2011 looked to surpass 2010. Read more from the EIA here.
Meanwhile, offshore oil production has grown under Obama despite the moratorium on deepwater drilling that he imposed in 2010, following the BP oil spill in the Gulf of Mexico. Oil production in the Gulf of Mexico was at record levels that year. In 2009, total oil production from the U.S. Outer Continental Shelf was the highest since 2003, according to data from the Bureau of Ocean Energy Management, Regulation and Enforcement.
Imports have dropped over the years, especially from oil-rich Middle Eastern countries. But the president's assertion that foreign oil imports are the lowest in the past 16 years may not completely be true. The United States imported more petroleum in 2010 than it did in 2009, according to the EIA. And total imports in 2010 - including that of oil and coal - were lowest in 13 years.
Obama called tonight for America to "stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America."
"Right now, companies get tax breaks for moving jobs and profits overseas," Obama said at in his third State of the Union address Tuesday night. "Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it."
The president was correct in saying that business can lower their tax rates by fleeing U.S. soil. Of the 34 developed countries that make up the Organization for Economic Cooperation and Development, America has the second-highest corporate tax rate.
U.S.-based companies are taxed at 35 percent by the federal government. Add state taxes to that and the average corporate tax rate is 39.2 percent. Only Japan's is higher at 39.5 percent, according to OECD data from 2011.
But when tax deductions and loopholes are factored into the equation, the U.S. corporate rate falls to roughly 27 percent, according to the Tax Foundation.
And according to a study by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy , 280 of the corporations on the Fortune 500 list paid an average rate of 18.5 percent.
Obama also called for a "basic minimum tax" on every multinational corporation to prevent companies from outsourcing to overseas tax havens.
Obama's approach on this issue is virtually the opposite of his GOP presidential rivals. Nearly every Republican presidential candidate has called for U.S. companies that earn profits overseas to be able to bring those profits back to America tax-free.
As the tax code stands now, those companies have to pay the U.S. government the difference between the lower, foreign tax rates and the often higher U.S. tax rate.
The president said he wants to increase tax cuts for American manufacturers and double the deduction for high-tech manufacturers.
Manufacturers already receive multiple tax credits and deductions that the lower their collective taxes by about $58 billion annually, the Fiscal Times reports .
As of 2010, tax credits for investing in new facilities focused primarily on energy efficiency. For example, $240 million of deductions were given to corporations that invested in clean coal facilities in 2011. About $39 billion worth of deductions went to support investments in machinery and equipment.
President Obama suggested in his speech tonight that taxing the rich will "reduce our deficit." Unfortunately, tax experts disagree.
Obama need look no further than the two men he chose to lead his deficit commission, Alan Simpson and Erskine Bowles. They wrote in The Washington Post : "The president must be willing to support real savings in entitlements that deal with long-term costs. We can't simply cut or tax our way out of this problem. Bringing our debt under control will require tackling the growth of entitlements and reforming the tax code to promote economic growth and generate enough revenue to meet our commitments."
Here's what Obama said in his speech:
"We need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes. … If you make more than $1 million a year, you should not pay less than 30 percent in taxes. … Asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense. … When I get a tax break I don't need and the country can't afford, it either adds to the deficit, or somebody else has to make up the difference - like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That's not right. Americans know it's not right. They know that this generation's success is only possible because past generations felt a responsibility to each other, and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility. That's how we'll reduce our deficit. That's an America built to last."
President Obama said tonight that he's "brought trade cases against China at nearly twice the rate as the last administration."
President Bush filed seven complaints with the World Trade Organization against China, over eight years. Obama has filed five in three years.
Obama's team must have done some math: If Obama keeps that rate the same, he'll have filed about 13 by the time his (presumptive) second term ends. That's just one short of 14, which would be, as Obama said, twice as much as Bush's seven.
The White House didn't support the anti-piracy bill known as SOPA , though the administration did voice support for a kind of legislation that addressed piracy. "Any provision covering Internet intermediaries such as online advertising networks, payment processors, or search engines must be transparent and designed to prevent overly broad private rights of action that could encourage unjustified litigation that could discourage startup businesses and innovative firms from growing," a White House statement said.
As an example of his record on getting rid of unnecessary federal regulations, President Obama cited the elimination of a rule that classified a milk spill as a type of oil spill.
While the comparison seems odd, it is indeed based in an old federal law. An obscure quirk in an EPA rule called the Oil Spill Prevention, Control and Countermeasures (SPCC) rule classified milk as a type of oil. The logic behind the rule, which went into effect in the 1970s, was that milk fat is a type of animal fat, and is therefore technically a type of oil. The rule was finally altered in August 2011, resulting in the exemption of milk and milk product containers.
The larger claim Obama sought to make through the utilization of this milk example is that he has generally been against increasing regulations. He asserted that he has approved fewer regulations in the first three years of his presidency than George W. Bush did in his first three years. This claim is true. In the first 33 months of his presidency Obama approved 613 federal rules, while President George W. Bush had approved 643 in the same time frame, according to an analysis by Bloomberg News .
However that same analysis notes that while the number of regulations approved by Obama alone is smaller, he has approved a larger number of federal rules that carry a price tag of more than $100 million than his Republican predecessor had at the same point in his presidency. Obama has approved 129 of these rules, while Bush had approved 90.
Remember last January, when President Obama flew to Arizona after Rep. Gabrielle Giffords was shot and called on the country's political class to take it down a notch?
"But at a time when our discourse has become so sharply polarized - at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who think differently than we do - it's important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds," Obama said a year ago. "What we can't do is use this tragedy as one more occasion to turn on one another. As we discuss these issues, let each of us do so with a good dose of humility. Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together."
Twelve months later, Obama's message is about the same. To be sure, it's been a heated year - with the debt ceiling debate, the Republican primary and more.
Obama said near the end of his State of the Union speech tonight: "None of these reforms can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction, that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas."
President Obama has promised quite a lot tonight, but never so much as in the fevered paragraph below.
We'll take it line by line:
In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects.
The president wasn't the first to say it, but he did admit as much - " Shovel ready wasn't quite as, uh, shovel ready as we thought," he told his Council on Jobs and Competitiveness when they met in Durham, N.C., last June. He was referring to the American Recovery and Reinvestment Act, better known as "the stimulus," a plan to spend approximately $787 billion on infrastructure renewal, "creating and saving" millions of jobs in the process. But the building of the roads and rails has been slow. Bickering over contracts and other issues have plagued the program. It is not clear what, if anything, the president can do to stimulate his stimulus. A single executive order hardly seems like it'd be enough.
But you need to fund these projects.
True, but that was what the stimulus money had been meant for, right?
Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.
Sounds simple, right? Not so fast. When it comes to government, "a penny saved" is often confused with "a penny not spent." The dollars that the U.S. will not spend in Iraq and Afghanistan (as the latter conflict winds down) do not get thrown back into some imaginary pot (Republicans might say, "slush fund") for paying down the debt or building high-speed railways. In fact, the billions authorized by the Federal government for fighting abroad helped to create that debt. Less spending on the war front will surely help with the bottom line, but it is not a newly realized rainy-day fund.