"Our unemployment rate has been higher than 8 percent for more than two-and-a-half years, far above what the Obama Administration promised with the 'stimulus.' "
John Boehner on Friday, October 7th, 2011 in a news release
John Boehner says Obama promised the stimulus would keep unemployment below 8 percent
After the U.S. Department of Labor released a report showing unemployment held steady at 9.1 percent in September, House Speaker John Boehner said it showed the need to "find common ground on common-sense solutions to create a better environment for private-sector job creation."
The Ohio Republican also repeated a worn but sturdy talking point that his office used to headline his statement:
"Our unemployment rate has been higher than 8 percent for more than two-and-a-half years, far above what the Obama Administration promised with the 'stimulus,' " Boehner said.
The claim that the White House "promised" the stimulus would keep unemployment under 8 percent has been popular among Republican critics of the stimulus. PolitiFact first checked it in July 2009 when then House Republican Whip Eric Cantor said: "We were promised. The president said we would keep unemployment under 8.5 percent (if the stimulus passed)." PolitiFact rated his claim Mostly False.
Since the House speaker has raised it anew, PolitiFact Ohio thought a reprise of our reviews was worthwhile.
The claim is rooted in a report called "The Job Impact of the American Recovery and Reinvestment Plan" from Christina Romer, then chairwoman of the president's Council of Economic Advisers, and Jared Bernstein, the vice president's top economic adviser. It was issued on Jan. 9, 2009, before President Barack Obama took office.
The report projected that Obama’s proposed stimulus plan would create 3 million to 4 million jobs by the end of 2010. The report also predicted unemployment rates with and without the stimulus. A chart in the report shows that without the stimulus (the baseline), unemployment was projected to hit about 8.5 percent in 2009 and then continue rising to a peak of about 9 percent in 2010. With the stimulus, they predicted the unemployment rate would peak at just under 8 percent in 2009.
In fact, the unemployment rate went higher. It peaked at just over 10 percent in early 2010 and remains stuck above 9 percent.
But do those projections from the administration in January 2009 constitute a promise? They certainly came with heavy disclaimers.
"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."
There's also a footnote with the chart that states: "Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11 percent in the absence of action."
The administration acknowledged its projections were wrong.
In a July 2, 2009, interview, Romer said on Fox: "None of us had a crystal ball back in December and January. I think almost every private forecaster realized that there were other things going on in the economy. It was worse than we anticipated."
Indeed, in January 2009, the nonpartisan Congressional Budget Office projected the unemployment rate would climb to 8.3 percent in 2009 and peak at 9 percent in 2010. By February, the prediction was even higher — 9 percent in 2009 without the stimulus, and 7.7 to 8.5 percent with a stimulus.
In a White House news conference on June 8, 2009, Bernstein said the projections made in January were off because economic numbers for fourth-quarter 2008 weren't yet available. When they were released, they revealed the economy was in worse shape than economists realized, losing 600,000 to 800,000 jobs a month. Bernstein maintained in that news conference that the stimulus was working, and that the unemployment rate would be even worse without it.
Is the fact that unemployment rose, even as the stimulus unfolded, proof that it has failed? White House officials have steadfastly maintained that, even though the unemployment rate has risen higher than projected in January 2009, it would be even worse if not for the stimulus.
Many independent economists agree with Obama that the stimulus created more than a million jobs and kept the unemployment rate from going even higher than it has (though in fairness, not every economist agrees with that).
Obama warned upon taking office that if "dramatic action" were not taken, "the unemployment rate could reach double digits," with the recession lasting for years.
But PolitiFact could find no evidence of anyone in the administration making a public pledge that the stimulus would keep the unemployment rate below 8 percent.
When we asked Boehner's office what evidence he had, they provided a number of sources that confirmed the prediction. Those included a reference to Rep. Barney Frank -- a Democrat and chairman of the House Financial Services Committee -- saying that Obama and Democrats were saddled with a "false prediction" and that making the prediction "was a dumb thing to do."
There is an element of truth in Boehner’s statement. A report prepared by the incoming Obama administration did project that the unemployment rate would peak at just under 8 percent in 2009. It has been above 8 percent since early in 2009.
We think it's a big stretch to call an economic projection a "promise." The administration never characterized it that way and included plenty of disclaimers saying the predictions had "significant margins of error" and a higher degree of uncertainty due to a recession that is "unusual both in its fundamental causes and its severity."
Those are critical facts that the speaker’s claim ignores.
As we have ruled for others who have made this claim, we rate Boehner’s statement Mostly False.
Published: Thursday, October 13th, 2011 at 6:00 a.m.
Rep. John Boehner, "Unemployment Far Above What Was Promised With the ‘Stimulus,’"
Oct. 7, 2011
Email exchange with Rep. Boehner's office, Oct. 11, 2011
Washington Post, "Economist Christina Romer regrets saying jobless rate would stay below 8 percent," Aug. 7, 2010
The Hill, "Frank: Obama admin 'dumb' to predict no higher than 8% unemployment," Aug. 18, 2010
New York Times, "Adding Jobs, but Not Many, U.S. Economy Seems to Idle," Oct. 7, 2011
PolitiFact Virginia, "George Allen says Barack Obama promised stimulus would keep unemployment below 8 percent," Feb. 28, 2011
PolitiFact, "Rep. Michele Bachmann says White House promised stimulus would keep unemployment below 8 percent," Jan. 26, 2011
PolitiFact, "Will: Obama said stimulus would cap unemployment at 8 percent," July 13, 2010
PolitiFact, "Cantor and other Republicans say Obama promised stimulus would keep unemployment rates below 8 percent," July 9, 2009
White House, "The Job Impact of the American Recovery and Reinvestment Plan," by Christina Romer, chairwoman of the president's Council of Economic Advisers, and Jared Bernstein, the vice president's top economic adviser, Jan. 9, 2009
Congressional Budget Office, "The Budget and Economic Outlook: Fiscal Years 2009 to 2019," January 2009
White House Web site, press briefing by press secretary Robert Gibbs and the Vice President's Chief Economist, Jared Bernstein, June 8, 2009
Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, accessed Oct. 12, 2011
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