Romney's Greece Comparison Doesn't Add Up
Mitt Romney apocalyptically proclaimed in Monday night's debate, “We’re headed toward a Greece-like collapse. This economy has failed.”
But economists agree that the economic situation in Greece is much more dire that it is in the United States, with the country teetering on the brink of default last summer, its budget deficit reaching 12.7 percent of GDP in 2009 and its bonds getting a junk rating by Standard and Poor’s. Exacerbating matters, it was revealed that the government of Greece had masked economic statistics for years to keep with European Union monetary guidelines.
As National Journal's economic correspondent Jim Tankersley wrote in July, “The United States is nowhere near insolvency, and its borrowing costs remain dirt cheap.”
America’s debt load is mounting, and budget projections suggest it will balloon in coming years as baby boomers retire, triggering safety-net spending that will vastly outstrip tax receipts. But the United States faces nowhere near the magnitude, or the complexity, of Greece's borrowing crisis.
The European’s crisis greatest threat is that it could send powerful shock waves through global markets and drag down an already fragile recovery in the United States. The U.S. economy is slowly but surely improving, with the unemployment rate dropping to 8.5 percent — a three-year low — in December and capping a six-month stretch when 100,000 or more jobs were created each month.
-- Naureen Khan
Gingrich Resigned From the House Under a Cloud
Mitt Romney contended Monday night that Newt Gingrich “resigned in disgrace” from his job as House speaker. Gingrich said he left voluntarily. But there was a good chance he would not have been reelected speaker if he had stayed.
“The truth is that the members of his own team, his congressional team after his four years of leadership, they moved to replace him,” Romney said. “They also took a vote and 88 percent of Republicans voted to reprimand the speaker and he did resign in disgrace after that. This was the first time in American history that a speaker of the House has resigned from the House.”
Gingrich did resign from the House in early 1999, but not as a direct result of his 1997 House reprimand for ethics violations. He left under pressure from Republican colleagues after the party did poorly in the 1998 House elections.
Putting the best light on that chapter of his career, Gingrich said in the debate that he took responsibility for Republican losses in House races, and added, “I didn't want to stay around, as Nancy Pelosi has. I wanted to get out and do other things.”
His rival on the stage, Rep. Ron Paul of Texas, was closer to the truth when he suggested Gingrich had too little support in the Republican caucus to be reelected speaker. “He didn't have the votes. That was what the problem was,” Paul said. “So this idea that he voluntarily reneged and he was going to punish himself because we didn't do well in the election, that's not the way it was.”
Romney cited a House Ethics Committee investigation aimed at Gingrich that looked into whether he had violated federal tax law and misled committee investigators. Gingrich said all but one of the charges were dropped –- the one that stuck was that he had misled investigators on the committee. However, as the Washington Post Fact-Checker notes, the committee also concluded that one of Gingrich's political groups had improperly coordinated with a tax-exempt project he had launched.
Romney is right that most Republicans voted to reprimand Gingrich at the time, and the speaker was fined $300,000 to pay the costs of the investigation.
-- Alex Roarty
Santorum Understates Obama Action Against Iran
Rick Santorum blasted President Obama’s Iran policy as a “colossal failure,” saying it would be “reckless” not do something to stop Tehran from acquiring a nuclear weapon.
Santorum’s accusation comes at a time when the Obama administration has been seeing results from its policy of ramping up pressure on Iran to curtail its nuclear program. The administration has already put in place the toughest sanctions ever imposed on the Iranian government, including new measures targeting, for the first time, Iran’s entire financial system.
The Treasury Department on Monday designated Iran’s third-largest bank as subject to new sanctions. Earlier this month, Obama also signed into law a raft of tough new sanctions that would penalize any foreign financial institution that does business with the Central Bank of Iran.
As part of broader U.S.-led efforts to exert pressure on Iran, European Union governments on Monday agreed to ban new contracts to buy, transport or import Iranian crude oil.
Sen. Mark Kirk, R-Ill., one of the authors of the sanctions on Iran's central bank, told National Journal last week that the sanctions policy has been working in the last month, amid indications that Japan, South Korea, and India are contemplating reductions of their Iranian oil purchases. Even China is negotiating for significant price reductions, he said. With the EU decision on Monday, Iran's rial currency plunged to a new record low, according to Reuters.
-- Sara Sorcher
Gingrich Wrong on Community Banks
Newt Gingrich, in his customary criticism of the financial regulation bill, Dodd-Frank, incorrectly asserted that the legislation is destroying community banks.
“The fact is Dodd-Frank led the biggest banks to get bigger,” Gingrich said during Monday night’s debate. “It is crushing independent banks. It has an anti-housing bias.”
Politifact ruled the statement as false when Gingrich made the same claim in New Hampshire in November. In fact, independent banks have actually gotten stronger since the passage of Dodd-Frank if measured by their return on assets, which has doubled.
Moreoever, the Independent Community Bankers of America issued a statement shortly after the passage of the bill, applauding certain measures for helping to “level the regulatory and competitive playing field for community banks,” while also outlining several harmful and negative provisions.
The Washington Post reported that several Republican candidates have made similar claims regarding Dodd-Frank’s impact on community banks, but the ICBA, instead of trying to repeal the legislation, is instead attempting to change certain provisions.
-- Naureen Khan
Gingrich Wrong When Says Obama Canceled Military Drill with Israel
Newt Gingrich, blasting Obama for being “weak” on Iran, incorrectly said the president canceled a scheduled military exercise with Israel “so as not to be provocative” after Tehran’s threats to close the Strait of Hormuz.
“The Iranians are …. actively taunting us… so he cancels a military exercise with the Israelis so as not to be provocative? Now, dictatorships respond to strength-- they don’t respond to weakness,” Gingrich said. “I think there’s a very grave danger the Iranians think that in fact this president is so weak they could close the Strait of Hormuz and not suffer substantial consequences."
However, it’s been recently reported that the Israelis—not the United States— asked to postpone the drill. A senior defense official told The Atlantic’s Jeffrey Goldberg that Israeli Defense Minister Ehud Barak called U.S. Defense Secretary Leon Panetta amid concerns the Israelis did not have the resources in place to carry out the drill. “Panetta, according to these Pentagon sources, was concerned that the Iranians would interpret the scrubbing of the exercise, well, the way it's currently being interpreted, as a sign of American wavering in the face of Iranian threats,” Goldberg writes. “He told Barak that he would not agree to a cancellation, as Barak was suggesting, but only a postponement.”
-- Sara Sorcher