Fact-Checking Obama's Speech

Summary
President Obama's first speech to a joint session of Congress was stuffed with signals about the new direction his budget will take and meant-to-be reassuring words about the economy. But it was also peppered with exaggerations and factual misstatements.

He said "we import more oil today than ever before." That's untrue. Imports peaked in 2005 and are substantially lower today.

He claimed his mortgage aid plan would help "responsible" buyers but not those who borrowed beyond their means. But even prominent defenders of the program including Fed Chairman Bernanke and FDIC chief Bair concede foolish borrowers will be aided, too.

He said the high cost of health care "causes a bankruptcy in America every 30 seconds." That's at least double the true figure.

He flubbed two facts about American history. The U.S. did not invent the automobile, and the transcontinental railroad was not completed until years after the Civil War, not during it.

He claimed that his stimulus plan "prevented the layoffs" of 57 police officers in Minneapolis. In fact, it's far more complicated than that, and other factors are also helping to save police jobs.

The president also repeated some strained claims we've critiqued before.

Analysis
In what had the look and feel of a State of the Union address, President Barack Obama spoke before Congress Feb. 24. Making the case for why the stimulus plan he recently signed would help the economy, Obama also laid the groundwork for the budget he'll submit to Congress Thursday and foreshadowed major action in the areas of energy, education and health reform. We're not passing judgment one way or the other on his ideas. But he made several factual errors along the way.
 
Less Foreign Oil, Not More
One line in Obama's speech certainly sounded plausible – given the widespread concern about foreign oil – but he got it wrong:

Obama: We have known for decades that our survival depends on finding new sources of energy, yet we import more oil today than ever before.

Not true. We're importing less than we were just a few years ago. This chart from the U.S. Energy Information Administration shows that weekly imports of crude oil and petroleum products (in thousands of barrels per day) have been dropping. Imports reached a high point of 15,217,000 barrels per day the week of Nov. 4, 2005. Most recently, they totaled 11,577,000 the week of Feb. 20, 2009. EIA charts on monthly and annual imports (see below) show the same trend.

Only Help for Good-Intentioned Homeowners?
Obama said his plan to help struggling homeowners would aid "responsible" borrowers but not someone "who bought a house he could never hope to afford."

Obama: [W]e have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford. …

But even the program's defenders concede that it can't possibly distinguish between "responsible" borrowers and those who foolishly (or fraudulently) signed up for mortgages beyond their means. The Associated Press said Obama's words "ring hollow." And the news agency quoted the Federal Reserve chairman as saying even the foolish borrowers would be aided:

AP, Feb. 25: Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed.

"I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

Sheila Bair, chair of the FDIC, also said there was no easy way to vet homeowners. "I think it's just simply impractical to try to do a forensic analysis of each and every one of these delinquent loans," she told NPR. And, Bair added, it's in the "collective economic interest" to not have more foreclosed homes on the market. "To try to punish all of those parties now by foreclosing on more homes, putting more families on the street, putting more houses onto the inventory, creating more downward pressure on home prices when you have so much inventory on the market right now. Is that in our collective economic interest to do that? I just don't think that it is."

Wrong on Bankruptcies
Obama said that health care costs cause a bankruptcy every 30 seconds in the U.S.

Obama: And for that same reason, we must also address the crushing cost of health care. This is a cost that now causes a bankruptcy in America every 30 seconds.

Data from the U.S. Courts show about 934,000 personal bankruptcies in the 12-month period ending June 2008. There are about 32 million seconds in a year. So someone filed for bankruptcy roughly every 30 seconds last year. But even a very high estimate, like the Harvard study we looked at last year, would only attribute half of those personal bankruptcies to medical expenses. So that's one health-related bankruptcy every minute at most.