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Gov. Bob McDonnell and presidential adviser David Axelrod had it out Sunday on Meet the Press, the venerable NBC political talk show. When the dust cleared, we realized that both gentlemen had factually erred.
If you missed it, McDonnell and Axelrod were guests along with New York City Mayor Michael Bloomberg. McDonnell, a Republican, made it clear early on that he’s no fan of President Obama, nor of discredited claims that Obama was born in Kenya.
"The problem with President Obama is not where he was born, it’s some of the policies he’s been advocating," McDonnell said. Sitting next to Axelrod, a major architect of Obama’s 2008 victory, McDonnell said the president had made a "feeble attempt to get debt an deficit under control."
Minutes later, McDonnell said the GOP should nominate a governor for president in 2012. He noted that governors, unlike Obama, had to balance their budgets during the recession and are used to making "tough decisions." Pointing to Virginia, McDonnell said, "We cut -- balanced -- the $6 billion deficit without raising taxes, mostly through spending cuts..."
Axelrod laid into McDonnell.
"But you also balanced your budget with $1.7 billion in money from the Recovery Act (a.k.a the Stimulus)," he told the governor. "You balanced your budget by borrowing $3 billion against future receipts in transportation to fund your transportation plan. You borrowed money from your pension plan which you’re going to have to return, and you did it because you were managing through difficult times and you didn’t want to burden the taxpayers of your state through these difficult times. But these bills are going to have to be paid."
McDonnell reiterated that governors have to balance budgets. "The federal government, for the longest time, hasn’t," he said. "You know, 30 years after World War II, we cut the deficit every year. The last 30 years, for the most part, we’ve ratcheted it up."
Let’s run down the facts.
PolitiFact Virginia was glad to see McDonnell stop himself when he started to say he "cut" $6 billion from Virginia’s budget, and correctly state that he had helped balance a $6 billion deficit.
Several weeks ago, we rated as Barely True McDonnell’s claim that he closed the deficit by cutting spending. We noted that most of the shortfall was balanced by transfers of money and use of federal funds that did not lower the bottom line of Virginia’s budget.
McDonnell said on Meet The Press that Virginia’s deficit was balanced "mostly through spending cuts." That’s an exaggeration. Records show that about $2.3 billion in actual spending was cut from 2008 to 2010 -- less than 40 percent of the shortfall.
Axelrod was basically accurate in saying Virginia balanced its budget by using state pension and federal stimulus money. Although the state did not withdraw money from its retirement fund, it diverted $850 million in scheduled pension contributions to pay for general programs. It also used $1.9 billion in stimulus money.
But Axelrod was wrong when he said McDonnell balanced the budget by borrowing $3 billion against future federal transportation receipts. At McDonnell’s request, the General Assembly did approve a $3 billion bond issue for roads this winter. But the money is not balancing the state’s general fund, where the shortfalls have occurred. The general fund pays for education, health programs and public safety.
Instead, the bond receipts will go into the transportation fund which is largely supported by the gas tax. The bonds will be repaid by using one-third of the state’s receipts from the tax on automobile insurance. The one-third portion -- about $132 million a year -- was earmarked by legislators several years ago to pay for road debt.
Finally, McDonnell erred when he said "30 years after World War II, we cut the deficit every year." In fact, federal deficits from one fiscal year to the next increased 15 times from 1946 to 1975.