Why Presidential Ads Will Flunk the FTC Sniff Test
Policy + Politics

Why Presidential Ads Will Flunk the FTC Sniff Test

Obama and Romney Political Campaign Sites

TV viewers are already getting swamped with ads for President Obama and Mitt Romney—and the 30-second bursts of hype and hyperbole are only going to multiply as November approaches. Campaigns and Super PACs have reportedly spent a combined $350 million so far on TV commercials, mostly aimed at voters in swing states like Florida, Pennsylvania, Nevada, Ohio and Virginia.

Cable operators are preparing for an even greater deluge of ad dollars this fall, with the Wall Street Journal noting that the real match-up on ESPN’s “Monday Night Football” could be between the candidates. It’s no surprise that voters should be wary of trusting the quick and dirty sound bites they’ll hear.

Just this week the pro-Obama super PAC Priorities USA released an unaired ad suggesting that a steelworker’s wife died of cancer after the private equity firm led by Romney laid him off and the couple lost their health insurance, a claim that was quickly debunked.

The Romney campaign put out its own spot recently saying Obama had gutted the work-for-welfare requirements, even though the president’s plan involved granting more leeway for states to address the historically high levels of unemployment.

These commercials exist to press emotional buttons, often simplifying economic plans from Romney and Obama in ways that mask what they would actually do in office. Below is a guide explaining the difference between what the ads say and what they mean for you:

What would happen with the deficit? – Americans for Prosperity—the conservative super PAC backed by the billionaire Koch brothers—said it is launching a $25 million ad campaign attacking Obama for the rising national debt.

The spot opens with a clip of Obama pledging to halve the deficit by the end of his first term, but the $10 trillion debt the president inherited wound up ballooning to nearly $16 billion. No explanation for the increase—other than hints of reckless spending—gets mentioned in the commercial.

So why did the deficit explode? The 2008 financial meltdown.

“Since 2007, financial turmoil and a severe drop in economic activity, combined with various policies implemented in response to those conditions, have sharply reduced federal revenues and increased spending,” the Congressional Budget Office wrote in a 2011 report. “Those changes added to the imbalance between revenues and spending that had existed before the recession, causing annual budget deficits to surge.”

In an effort to stem the crisis, spending accelerated and tax revenues plunged from 18.5 percent of gross domestic product in 2007 to 15.4 percent last year, according to the Office of Management and Budget. 

In 2010, if Obama had not extended all of the 2001 and 2003 tax cuts first introduced by President George W. Bush, federal revenues would have inched a bit higher.

Obama ducks responsibility for the deficit in his new TV ad “Worried,” which points the finger at Bush. “Two wars. Tax cuts for millionaires. Debt piled up. And now we face a choice.”

The commercial tells voters that in a second-term Obama would trim spending by $3 trillion and lower the debt by $4 trillion. He does that based on projected budgets over the next decade, meaning he would be six years into retirement by the time his supposed savings are realized.

And those savings are relative to economic baselines that might not be realistic. The CBO relies on a much stricter baseline that assumes all of the Bush tax cuts would expire and Obama’s proposal would raise the deficit by $3.5 trillion through 2022, so the argument voters are hearing is relative.

The Romney campaign explained their plan on tackling the deficit in a May commercial:

“What would a Romney presidency be like? Day one: President Romney announces deficit reductions.”

That’s all the ad says about the issue.

His published economic plan explains that Romney would cap all federal spending at 20 percent of GDP, meaning he would have had to trim $724 billion out of the budget in 2009 and $588 billion in 2010, based on OMB records.

And Romney’s model for this policy is not President Reagan—who spent more than 20 percent of GDP during all his eight years in the White. It’s the Democratic President Clinton whose tax policies Obama is trying to embrace.

“It was not that long ago that the United States enjoyed budget surpluses,” the Romney plan reads. “From 1998 to 2001, the federal government managed to balance its budget and successfully applied surpluses toward debt reduction.”

Millionaires would pay “a little more” under Obama:


Those three vague words “a little more” appearing multiple times in Obama ads leave a lot to the imagination, making it sound as though his plan to lower the deficit by letting the Bush tax breaks expire for those earning more than $250,000 is akin to scrounging for loose change.

For those on the lower end of that threshold, the increase would be manageable. On the other hand, someone making $1 million to $2 million—the entry level for modern day millionaires—would on average owe the IRS another $57,308 a year, according to analysis by Citizens for Tax Justice. That’s somewhere between 2.9 percent and 5.7 percent of their annual income.

Add up everyone impacted by the increase and estimates have the government collecting an additional $68 billion next year.

Because Obama’s stimulus plan failed, Romney will instead cut taxes and increase “take home pay.” –

One of the latest Romney spots features ominous music as an unseen narrator talks about unemployment climbing a tenth of a percentage point in July to 8.3 percent, an increase that’s actually due in part to rounding by the Bureau of Labor Statistics.

The real kicker in the ad entitled “It’s Just Not Getting Better” is Romney’s proposed solution. “Mitt Romney has a plan for a stronger middle class,” the narrator happily intones. “Under the Romney plan, more jobs and more take home pay. It’s a plan that works for America.”

That idea is remarkably similar to what Obama tried to do with the stimulus and subsequent holidays on the Social Security payroll tax.
More than a third of that $787 billion stimulus bill passed in 2009—blasted by Romney as a failure—consisted of tax cuts that increased take home pay for families by $780 a year, according to government projections. The temporarily lower rates on payroll taxes this year boosted annual pay by roughly another $1,000. And since those tax cuts began taking effect in April, 2009, the country has added 1.9 million jobs—growth but enough to bring the United States back to where it was before the recession.

But Romney has really presented half of a plan instead of a whole one.

The former Massachusetts governor says he would trim all marginal tax rates by 20 percent permanently, and ending interest, capital gains and dividend taxes on those earning less than $200,000 a year. His argument is that those cuts would spur growth, while Obama’s temporary measures tanked.

The Romney tax proposal is supposed to be revenue neutral, but the candidate hasn’t laid out what loopholes and deductions he would eliminate.

To break even, Romney would have to erase more than $600 billion of tax breaks, including the mortgage interest deduction, according to a report released this month by the Tax Policy Center. Removing those deductions would on the whole increase taxes for the bottom 95 percent of earners.

But if Romney scrapped any efforts to curb the unnamed tax breaks, that same bottom 95 percent would see their obligations to Uncle Sam drop by $38 to $6,720 a year.

As you might guess, the Tax Policy Center analysis only gets referenced in a comparative ad put out by the Obama camp.

They summarize the 20-page analysis with classic television brevity: “Huge tax cuts for millionaires.”