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CNN Fact Check: 'Looming tax hike,' a recession and Obama's palate

By the CNN Wire Staff
updated 3:24 PM EDT, Thu August 30, 2012
Presidential candidate Mitt Romney delivers his acceptance speech on the final day of the Republican National Convention at the Tampa Bay Times Forum on Thursday, August 30. <a href='http://www.cnn.com/2012/09/04/politics/gallery/best-of-dnc/index.html' target='_blank'>See the best photos from the Democratic National Convention.</a> Presidential candidate Mitt Romney delivers his acceptance speech on the final day of the Republican National Convention at the Tampa Bay Times Forum on Thursday, August 30. See the best photos from the Democratic National Convention.
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Republican convention: The best photos
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Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
Republican convention: The best photos
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STORY HIGHLIGHTS
  • McConnell says Obama talked about peppers instead of unemployment
  • July unemployment did rise in several states
  • Chili pepper interview taped before unemployment figures released

(CNN) -- U.S. Sen. Mitch McConnell isn't impressed that President Obama would wax about spicy cuisine as unemployment rises, and he hopes you're not, either.

McConnell, speaking at the Republican National Convention on Wednesday night, made a series of verbal jabs at the president and warnings about the economy.

McConnell implied that on a day the nation learned about discouraging July unemployment figures, the president addressed not this in an interview, but rather his preference in chili peppers. McConnell also said that it wasn't clear what Obama wanted to do about "a looming tax hike" that could lead to a recession.

Fact Check: Did Ryan get Obama's GM speech right?

The statement:

"On the same day we learned that unemployment went up in 44 out of 50 states last month, the president of the United States took to the airwaves to tell the people of Albuquerque that he enjoys green chili, but prefers red. We know what the president's got on his iPod, but we don't know what he plans to do about a looming tax hike that could trigger yet another serious recession that would result in even more Americans losing their jobs."

The facts:

One part at a time. First, we'll look at the July unemployment claim.

On August 17, the Bureau of Labor Statistics reported that unemployment rates rose in 44 states in July, compared to June, with rates unchanged in four states and down in two states. Some of the more significant increases by percentage point happened in Alabama.

The U.S. jobless rate rose from to 8.3% in July, from 8.2% in June.

McConnell was referencing an interview that Obama gave to the Morning Mayhem radio show on Albuquerque's 93.3 KOB-FM. It aired on August 17, though it was taped on August 14, three days before the unemployment numbers came out, according to KOB-TV.

At the start of that six-minute interview, Obama was asked whether he preferred red chili or green chili. "I think you've got to go with the classic red, although every once in a while green is solid," Obama said. "I'm just going with red on this one."

Obama didn't talk about unemployment, but he wasn't asked about it, either. Among the questions were: "What's your favorite song to work out to," and "If you had a superpower, what would it be?"

The White House press corps took notice, asking his deputy press secretary that day why Obama hadn't held a press conference in two months, according to the Washington Post.

In a "looming tax hike," McConnell appears to be talking about what politicians have referred to as the "fiscal cliff," which is trillions of dollars worth of tax increases and spending cuts that will begin in January if nothing is done to stop them.

The fiscal cliff includes the expiration the George W. Bush-era tax cuts, an expiration in the payroll tax holiday, an expiration in a federal extension of unemployment benefits, an increase in the number of people eligible for the Alternative Minimum Tax.

It also includes automatic spending cuts in defense and nondefense spending -- amounting to $1.2 trillion over 10 years -- that is scheduled to begin on January 2 because Congress failed to reach a bipartisan debt-reduction deal. These automatic cuts are required, in lieu of a deal, under the Budget Control Act.

McConnell said "looming tax hike" -- presumably the tax portions of the fiscal cliff -- could trigger a serious recession. But the Congressional Budget Office, the non-partisan research arm of Congress, says that both the tax increases and the looming cuts risk a recession.

Last week, the CBO projected if all the policies are allowed to go into effect, the economy, as measured by GDP, would shrink by 0.5% between the fourth quarter of this year and the fourth quarter of next year, CNNMoney.com reported. Unemployment, currently 8.3%, would rise to 9% in the second half of 2013, the CBO said.

As for Obama, he has had plans, including one for the Bush-era tax cuts, but they haven't gone anywhere. Obama asked Congress to keep the Bush-era income tax cuts for familes making up to $250,000 for another year while allowing tax rates to return to 1990s levels for those earning more. And Obama rejects a GOP plan to extend the Bush cuts for all Americans. The Democrat-controlled Senate passed the plan that Obama favors and rejected the Republicans' plan in July. Republicans in the GOP-controlled House say they don't intend to bring the Senate bill to a vote.

Fact Check: Rand Paul, Obama and debt

The verdicts:

"On the same day that we learned that unemployment went up in 44 out of 50 states last month ...": True. Though the national unemployment rate was essentially unchanged, unemployment rates rose from June to July in 44 states.

"On the same day that we learned (unemployment rose in 44 states last month) ... the president of the United States took to the airwaves to tell the people of Albuquerque that he enjoys green chili, but prefers red." Misleading. Obama did say this in an interview that aired on August 17 and prompted questions as to why he did a light-hearted interview when he hadn't submitted to a press conference in two months. And he didn't address unemployment during the interview or field any questions on the subject. But he taped the interview three days before the unemployment numbers came out.

"... we don't know what he plans to do about a looming tax hike that could trigger yet another serious recession that would result in even more Americans losing their jobs." Misleading. The CBO projects a recession if all fiscal cliff policies -- not only tax increases, but also automatic spending cuts -- go into effect.

Fact Check: Paul Ryan misleads on debt panel's spending cut plan

CNN's Jason Hanna, Amy Roberts, Emily Smith and Ann Colwell contributed to this report.

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