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Molly Moorhead
By Molly Moorhead September 19, 2012

Romney ad faults Obama for falling incomes

Mitt Romney says President Barack Obama is failing American families with policies that have led to less income and more debt.

Less family income, that is, and more national debt.

"Under Obama, families have lost over $4,000 a year in income, says the narrator of a new campaign ad. "And the national debt is now $16 trillion and growing."

The ad then shows clips of Romney promising to reverse those trends.

Here, we’ll check what has happened to household incomes under Obama.

Tracking median incomes

The Romney ad cites an opinion piece in the Wall Street Journal, which argues that Obama’s presidency has "done enormous harm to middle-class households."

The editorial, in turn, points to data from a private group, Sentier Research. Last year, Sentier initiated a new statistic based on U.S. Census Bureau data -- a "household income index" that tracks upticks and downticks in median income and reports it monthly.

What did Sentier find? In January 2009, the month Obama took office, median household income was $54,893. In June 2012, it was $50,881, a drop of almost $4,000. (We used inflation-adjusted figures from a spreadsheet provided to us by Sentier. The Wall Street Journal cited slightly different figures, but the difference is just a few dollars.)

To create Sentier’s index, principals Gordon Green and John Coder take data from the

Bureau’s monthly household survey, the one used to determine the national unemployment rate. This census survey reaches approximately 50,000 households and 130,000 household members each month, asking a variety of questions, including the sum of income earned by household members during the previous 12 months.

That’s very similar to how the census produces its report called the Current Population Survey -- Annual Social and Economic Supplements. That survey also asks households about income, but over a given calendar year. The census’ Current Population Survey was just released for 2011. The median income: $50,054.

Green told us the comparable figure in his work is Sentier’s January 2012 index because it asked respondents about their income for the previous 12 months. In that case, those months are calendar year 2011. Sentier’s median income for that period: $50,020, a difference of just $34. That would indicate that Sentier's methodology produces a number very close to the official census number.

Sentier’s index is a new measuring stick, and not time-tested, but Green and Coder are both retired from the census, and their work has been widely cited in the media.

"The Census Bureau is the source of official statistics," Green said. "What we do is fill it in with the monthly data."

Other factors

This brings us to the dicey issue of blaming Obama for the trend, whatever it is. At PolitiFact, we don’t only assess the accuracy of statistics cited in political claims, but whether it’s valid to say a certain politician is responsible.

We asked Dean Baker, co-director of the left-leaning Center for Economic and Policy Research, for his take.

"There is always a problem in attributing outcomes to presidents based on their terms, since there are a large number of erratic factors over which they have no control. This is especially the case with President Obama, who inherited an economy that was falling off a cliff," Baker said.

He added that a better question is what Romney or anyone else would have done that would have produced better results.

"Romney seems to be saying that a big tax cut would have done the trick with little or no money to help the states or for any of the other spending components of the stimulus. That doesn't seem very plausible to me, but that is the question that we should be asking," Baker said.

Plus, a look back at incomes over several years shows that incomes track the state of the overall economy. According to the census, the median income hit an all-time high in 1999 (when you adjust for inflation), reaching $54,932. It decreased each year through 2004, hitting $52,788. It then climbed again until 2007 -- the beginning of the recession -- to $54,489, and has been on the way down since then. Sentier’s research also reflects steady increases with small dips and peaks over the past decade.

Dan Mitchell, a scholar with the libertarian Cato Institute, had this to say about the blame factor:

"That drop started before Obama took office, so I don't think he deserves full blame for everything after Jan. 20, 2009," Mitchell said. "But this has been a very weak recovery, so clearly he should be held responsible for some of the bad news."

Our ruling

Romney’s ad says that "under Obama families have lost over $4,000 a year in income."

That figure comes from a new but well-respected index created by Sentier Research, which tracked a decline in the median family income from the month Obama took office through June 2012. It’s tricky to compare that data with census data because they represent different time periods. But where it is possible to compare Sentier with the census, the results are within a few dollars of each other.

But the ad’s claim runs into trouble by overtly blaming Obama. The economy was on a downward track before he took office, and a president has limited control over those forces. To the extent he should be held responsible, Mitchell told us, the slow recovery has all been on his watch.

Romney’s ad cites trustworthy figures but oversimplifies the issue by assigning blame to Obama. We rate it Half True.

Our Sources

Romney campaign ad, "Failing American families," Sept. 17, 2012

Wall Street Journal, "Negative $4,019," Aug. 24, 2012

Interview with Gordon Green, Sentier Research, Sept. 17, 2012

Sentier Research, Household Income Trends: July 2012, issued September 2012, Income and Earnings Summary Measures by Selected Characteristics: 2010 and 2011, Income and Earnings Summary Measures by Selected Characteristics: 2009 and 2010, All Races by Median and Mean Income: 1975 to 2011

PolitiFact, "Mitt Romney says U.S. median income has declined 10 percent in the last four years," Jan. 24, 2012

PolitiFact Wisconsin, "Ryan says incomes went down nationally under Obama but went up in Massachusetts when Romney was governor," Aug. 28, 2012

Email interview with Daniel Mitchell, senior fellow at the Cato Institute, Sept. 17, 2012
Email interview with Dean Baker, co-director of the Center for Economic and Policy Research, Sept. 17, 2012

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