WASHINGTON — President Donald Trump often talks about a pile of money sitting overseas that will come flooding back into the U.S. once his tax plan is in place. That’s something of a mirage.
He addressed the subject Saturday as Marine One roared nearby, waiting to take him to Camp David, Maryland. Over the past week, Trump’s remarks on a variety of subjects called for scrutiny: the tax overhaul that appears on track to become law, women who accused him of sexual come-ons, the Russia investigation and more.
TRUMP, asked about the $20 trillion U.S. debt and his tax overhaul’s effect on it: “Well this is going to bring money in. As an example, $4 trillion will come flowing back into the country. That’s money that’s been stuck overseas for years and years.” — to reporters Saturday.
THE FACTS: First, his comment should not be read to mean that the debt is going to shrink by $4 trillion because of money returning from abroad. That’s not possible.
Second, $4 trillion is a generous estimate of the money that might return. He’s referring to profits that U.S. companies have been parking overseas to avoid the higher U.S. corporate tax. The lowering of that rate is bound to result in some of those profits coming back to the U.S. That could be in the ballpark of $2.5 trillion, perhaps more. But low taxes on those profits mean repatriation won’t bring much relief to a forecast that the debt will swell from his tax cuts.
Third, history does not suggest that repatriated profits will make much difference to the economy.
A 2004 law temporarily cut taxes on repatriated profits to 5.25 percent from 35 percent. That prompted 843 companies to bring back $312 billion. But those companies tended to use the money to buy back shares of their own stock, not to hire or expand operations.
A 2011 Congressional Research Service report found that the tax holiday “did not increase domestic investment or employment.”
TRUMP: “Despite thousands of hours wasted and many millions of dollars spent, the Democrats have been unable to show any collusion with Russia – so now they are moving on to the false accusations and fabricated stories of women who I don’t know and/or have never met. FAKE NEWS!” — tweet Tuesday.
THE FACTS: There’s no question he met and knew women who have accused him of sexual misconduct, whatever the truth of the allegations. Two were contestants on “The Apprentice,” the show he hosted. Another woman was a People magazine journalist who interviewed him. Another was a would-be business partner with whom he posed for a photo. Another was a Miss Finland who appeared on David Letterman’s former late-night TV show with him and has a photo of the two of them. Also: a porn actress and director who shows up in a photo with him, and a former Fox News host who had lunch with him.
Trump spokeswoman Sarah Huckabee Sanders, trying to clarify, said Trump was referring only to the three women who discussed their accounts Monday at a news conference and on TV, but that was not what Trump’s tweet said.
Of those three, one was a Miss USA contestant when Trump was running the pageant and another worked at Trump Tower. Neither circumstance, by itself, proves that Trump met them. But no one has refuted their accounts or the account of the third woman, who said Trump groped her when they were seatmates on a flight in the 1980s. More than a dozen women have alleged inappropriate behavior by Trump. He has denied all allegations of sexual misconduct.
TRUMP: “There is absolutely no collusion. That has been proven. … So now even the Democrats admit there’s no collusion. There is no collusion — that’s it.” — to reporters Friday.
THE FACTS: Nothing has been proved. It’s true that collusion between the 2016 Trump campaign and Russians has not been established, as far as is publicly known. It’s not true that collusion has been ruled out, by Democrats or others. The most they’ve said is that they have not seen firm evidence of it so far. It can’t be ruled out because Russia’s interference in the election and the Trump team’s contacts with Russians are still under criminal investigation by the special counsel and the subject of continuing congressional inquiries. “That’s it” is premature.
TRUMP: “Instead of adding costs, as so many others have done, and other countries, frankly, are doing in many cases, and it’s hurting them, for the first time in decades, we achieved regulatory savings.” — White House event Thursday on cutting regulations.
THE FACTS: There’s incomplete accounting behind that claim. Trump and his administration are adding up savings from the regulations that have been withdrawn through September and omitting the economic benefit that those rules provided.
All federal rules are supposed to have some economic benefit. Rules that are meant to clean up streams have a cost to industry, the government or both but also an anticipated benefit to local businesses from increased tourism, for example. The government has yardsticks to measure such gains. For one, it attaches a value to a human life. The Transportation Department, for example, set that value at $9.6 million in 2016.
So a rule that protects health, the environment or public safety and is projected to save lives as a result can be credited with an economic gain of $9.6 million or so per person saved. It’s an imprecise measure but one baked into cost-benefit calculations that are used in federal rule-making. Other economic benefits are looked at, too, such as whether a regulation will save consumers money or reduce how much sick leave employees need to take.
The administration contends that it has completed 67 deregulatory actions and three regulatory actions through the end of September that will result in a cost savings of $570 million a year. But that figure does not include the offsetting of benefits that will now be missed because those rules are gone. The White House Office of Management and Budget confirmed that foregone benefits from retracted or modified rules are not part of that calculation.
TRUMP: “You remember how bad we were doing when I first took over. There was a big difference. And we were going down. This country was going economically down.” — deregulation event Thursday.
THE FACTS: Not really. It’s true that growth cooled in 2016, but other measures showed improvement or held steady in President Barack Obama’s final year. For example, hourly wages perked up in 2016, increasing 2.9 percent in December 2016 from a year earlier. Wage growth has since slipped to a 2.5 percent annual pace.
According to the Census Bureau, median household income rose at a healthy clip in 2016 for the second year in a row, finally matching its 1999 peak. The economy expanded just 1.5 percent in 2016, down from 2.9 percent in 2015. Consumers and businesses are more optimistic after Trump’s election, and that is probably accelerating growth this year. But the economy was not collapsing or heading to recession in 2016.
TRUMP: “We’re lifting restrictions on American energy, and we’ve ended the war on coal. We have clean coal, beautiful, clean coal, another source of energy.” — deregulation event Thursday.
THE FACTS: If that implies a dramatic turnaround, it’s misleading. Coal production and jobs have staged a slight comeback under Trump but are still far below levels of just a few years ago.
Trump has lifted some regulations on coal mines implemented by Obama. But the industry is still struggling to compete with natural gas, which has become much cheaper because fracking techniques have greatly increased U.S. gas production. Coal production is on track this year to top last year’s output, according to the Energy Information Administration. But based on current trends, it will probably still be below 2015’s level and as much as 20 percent below 2011’s output.
Coal mining companies have added 1,200 jobs since Trump’s inauguration, but there are still 7,600 fewer such jobs than just two years ago.
Associated Press writers Paul Wiseman, Joan Lowy, Christopher S. Rugaber and Josh Boak contributed to this report.
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EDITOR’S NOTE _ A look at the veracity of claims by political figures