"Three years ago, a newly elected President Obama told America that if Congress approved his plan to borrow nearly a trillion dollars, he would hold unemployment below 8 percent."
Mitt Romney on Saturday, February 4th, 2012 in a victory speech in Las Vegas on Feb. 4, 2012
Mitt Romney says president promised peak of 8 percent unemployment
The night of his victory in the Nevada caucuses, Mitt Romney used his stump speech to stomp on President Barack Obama’s policies and record.
Romney, who led the Republican field by a sizeable margin in a state hammered by unemployment and foreclosures, used those themes to make his case against Obama.
He also repeated a claim we have heard -- and checked -- numerous times.
"Three years ago, a newly elected President Obama told America that if Congress approved his plan to borrow nearly a trillion dollars, he would hold unemployment below 8 percent," Romney said in his speech in Las Vegas on Feb. 4, 2012.
It’s a common claim by critics of the stimulus bill, the two-year spending package Obama championed to get the economy going again.
We heard similar statements from House Republican Whip Eric Cantor in 2009, conservative columnist George Will in 2010, former presidential candidate Michele Bachmann in early 2011 and, most recently, from House Speaker John Boehner at the end of 2011.
Each time, we rated the claim Mostly False.
Projection vs. promise
First, we have never found an instance of anyone in the administration making a public pledge to keep unemployment below 8 percent. The source for Romney’s and the others’ statements is a Jan. 9, 2009, 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.
Their report projected that the stimulus plan would create 3 to 4 million jobs by the end of 2010. The report also included a chart predicting unemployment rates with and without the stimulus. 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.
The important word here is projection. The economic analysis wasn’t a promise, it was an educated assessment of how events might unfold. And it 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 that goes along 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% in the absence of action."
Romney didn't use the word "promise" as Boehner, Cantor and others did when we checked the same claim previously, but the meaning is the same, that Obama was offering some sort of guarantee the stimulus would keep the unemployment rate below 8 percent. 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." In short, it was an economic projection with warnings of a high margin for error, not a take-it-to-the-bank pledge of an upper limit on unemployment.
Once again, we rate the statement Mostly False.