Break It Down: NPR Reporters Fact Check The Republican Debate

Nov 11, 2015
Originally published on December 17, 2015 10:12 am

Tuesday night's Republican debate focused on economic issues. NPR reporters look at candidate claims about business creation, the minimum wage, trade and the length of the tax code.

NPR White House correspondent Scott Horsley on the health of the economy:

Republican candidates painted a fairly bleak picture of the U.S. economy during the debate, offering a litany of discouraged workers, sluggish economic growth and children living on food stamps.

"For the first time in 35 years, we have more businesses dying than starting," Florida Sen. Marco Rubio said.

The night's general theme, of course, was that this is an economy badly in need of a Republican makeover. And that data point on business creation, which Rubio has highlighted before, was also picked up by his fellow Floridian former Gov. Jeb Bush.

"We have to recognize that small business — right now more of them are closing than are being set up," Bush said.

That certainly was true in the early years of the Obama administration, which coincided with the Great Recession. But according to the latest figures from the Census Bureau, in 2012 and 2013 more businesses opened their doors than closed.

That fits a pattern with a lot of economic statistics: Things are better than they were but still not where we'd like them to be. So a question facing voters in the general election is whether they want to stay the course in hopes of further improvement or whether they think it's time to change direction.

NPR political reporter Danielle Kurtzleben on minimum wage:

The minimum wage is traditionally a hot-button political and economic subject, and it came up again Tuesday night.

"People need to be educated on the minimum wage," candidate Ben Carson said. "Every time we raise the minimum wage the number of jobless people increases."

Carson opposes a higher federal minimum wage. This is, by the way, a flip-flop for him. In May, Carson said it probably should be raised from its current level of $7.25.

But does the number of jobless people grow every time the minimum wage is raised?

Economic data show that sometimes it does and sometimes it doesn't.

The question going forward, though, is whether a higher minimum wage would hurt job creation.

That's tougher to answer. In a 2013 University of Chicago survey, top economists were nearly evenly split on whether a $9 wage would hurt lower-wage workers.

Some studies, including a 2014 paper by the nonpartisan Congressional Budget Office, have found that a higher minimum wage could cost jobs. But plenty of other studies have found minimal effects.

However, the moderators specifically asked about the impact of a $15 federal minimum wage, more than twice the current level. That's a much bigger hike than studies usually deal with, and many economists agree a nationwide hike that high could hurt job creation, especially in places where wages and prices are currently low.

NPR business reporter Jim Zarroli on the TPP:

Candidate Donald Trump claims the United States gets taken advantage of by other countries because, as he says, President Obama doesn't know how to negotiate.

Last night, Trump talked in particular about the Trans-Pacific Partnership, or TPP, a trade pact involving the U.S. and 11 other Pacific Rim countries. It has yet to be approved by Congress.

"It is a deal that is going to lead to nothing but trouble," he said. "It's a deal that was designed for China to come in as they always do through the back door and totally take advantage of everyone."

Trump said China is guilty of currency manipulation by keeping the value of its currency low to make its exports more competitive.

Trump said the TPP fails to address currency manipulation. There is a side agreement in which all signatory nations promise not to manipulate their currencies, but critics say it's unenforceable. And Trump is correct that it is not part of the treaty itself.

But Trump's charge that China is manipulating its currency is outdated. China's currency, the yuan, has been rising in value for some time and the International Monetary Fund says it's now fairly valued.

In any case, China isn't a signatory to the TPP, at least right now.

Danielle Kurtzleben adds this kicker on the tax code:

There was lots of talk last night about the length of the federal tax code.

"Innovation and entrepreneurship," said candidate Carly Fiorina, "is crushed by the crushing load of a 73,000-page tax code."

Fiorina appears to be referring to the CCH Standard Federal Tax Reporter, which is published by a company based in the Netherlands called Wolters Kluwer. Its 2013 edition runs almost 74,000 pages. But it includes proposed regulations and other materials that are not part of the tax code.

The Internal Revenue Code is much shorter. A PDF I downloaded from the U.S. House of Representatives site is just shy of 6,500 pages.

Copyright 2015 NPR. To see more, visit http://www.npr.org/.

Transcript

LINDA WERTHEIMER, HOST:

Last night's Republican presidential debate in Milwaukee focused on economic issues. To help us navigate what the candidates said about policy, we asked NPR's Scott Horsley, Danielle Kurtzleben, and Jim Zarroli to break it down.

UNIDENTIFIED MAN #1: Where's the beat? When I hear your new ideas, I'm reminded of that ad, where's the beat.

SCOTT HORSLEY, BYLINE: This is Scott Horsley. Republican candidates painted a bleak picture of the U.S. economy during their debate. Here's Florida Sen. Marco Rubio.

MARCO RUBIO: For the first time in 35 years, we have more businesses dying than starting.

HORSLEY: And that data point on business creation, which Rubio's highlighted before, was also picked up his fellow Floridian Jeb Bush.

JEB BUSH: We have to recognize that small businesses right now, more of them are closing than are being set up.

HORSLEY: Now that certainly was true in the early years of the Obama administration, which coincided with the Great Recession. But in 2012 and '13, according to the latest figures from the Census Bureau, more businesses opened their doors here than closed. Now this fits a pattern with a lot of economic statistics. Things are better than they were but still not where we'd like them to be. So the question facing voters is do you want to stay the course in hopes of further improvement, or do you think it's time to change direction?

DANIELLE KURTZLEBEN, BYLINE: Hey, this is Danielle Kurtzleben, and this statement from Ben Carson about the minimum wage caught my ear.

BEN CARSON: People need to be educated on the minimum wage. Every time we raise the minimum wage, the number of jobless people increases.

KURTZLEBEN: Now, Carson said he doesn't want a higher federal minimum wage. And this is, by the way, a flip-flop for him. In May, Carson said it, quote, "probably should be raised from its current level of $7.25 an hour." But OK, has the number of jobless people grown every time the minimum wage has grown? And the answer there is no. Sometimes it has, but sometimes it hasn't. The bigger question here, though, is whether a higher minimum wage would hurt job creation, and that's tougher to answer. In a 2013 University of Chicago survey, top economists were nearly evenly split on whether a $9 wage would hurt lower wage workers. And while some studies have found that a higher wage could cost jobs, plenty of others have found minimal effects. However, the moderators specifically brought up a $15 per hour wage, more than twice the current level. That's a much bigger hike than studies usually deal with, and a nationwide hike that high could hurt job creation, especially in places where wages and prices are low.

JIM ZARROLI, BYLINE: This is Jim Zarroli. Donald Trump talks a lot about how the United States gets taken advantage of by other countries because he says the president doesn't know how to negotiate. And in the debate last night, he talked in particular about the Trans-Pacific Partnership, which is a trade pact involving the United States and 11 other Pacific Rim countries. The TPP is something President Obama would very much like to get through Congress. Donald Trump doesn't like it one bit.

(SOUNDBITE OF ARCHIVED RECORDING)

DONALD TRUMP: It is a deal that is going to lead to nothing but trouble. It's a deal that was designed for China to come in as they always do through the back door and totally take advantage of everyone.

ZARROLI: Trump says that China is guilty of currency manipulation, which is something that happens when a country lowers the value of its currency to make its exports more competitive. It's something that very much has hurt U.S. companies over the years. Trump says the TPP fails to address currency manipulation, and he is right about that. There is a side agreement in which all of the countries promise not to manipulate their currencies, but critics say it's pretty much unenforceable. So, Trump is correct, but two points need to be made. First, because China's currency, the yuan, has been rising in value for a while, the International Monetary Fund now says it's fairly valued. So, China may have been guilty of currency manipulation in the past, but it's not such a big issue now. And then second, China isn't just signatory to the TPP, at least right now. So whatever the agreement says, China wouldn't be affected right now anyway.

KURTZLEBEN: And this is Danielle again back with one more quick one. There was a lot of talk last night about how long the tax code is. Here's Carly Fiorina.

(SOUNDBITE OF ARCHIVED RECORDING)

CARLY FIORINA: Innovation and entrepreneurship is crushed by the crushing load of a 73,000-page tax code.

KURTZLEBEN: Now say what you will about innovation, but the tax code is not 73,000 pages long. Fiorina appears to be referring to something called the CCH Standard Federal Tax Reporter. And as of 2013, that had nearly 74,000 pages. But that includes a bunch of stuff that's not the tax code, like proposed regulations. The Internal Revenue Code is much shorter than that. Now there are a few stats out there of how long it is, but the PDF I downloaded from the House of Reps website last night came in at nearly 6,500 pages. Another version I found on Amazon came in at 5,000 pages. Either way, it's nowhere near 73,000.

WERTHEIMER: NPR's Danielle Kurtzleben, Jim Zarroli and Scott Horsley breaking down some of the policy discussion at last night's Republican debate, you can find more from our Fact Check team at nprpolitics.org. Transcript provided by NPR, Copyright NPR.