WHITMAN’S CREDIBILITY GAP
Meg Whitman likes to make grand claims. And she’s spent over $100 million of her own money to put her ideas out to the public. But does she really know what she is talking about? Research by the California Labor Federation suggests that Whitman has a poor grasp of the facts when it comes to the California economy and how to make our state strong again.
Whitman on Jobs/Budget
Whitman’s Claim: California has too many government employees, and firing 10% of the workforce – 40,000 workers — would streamline our government. (Fox Business Network, 05/17/10)
The Facts: California’s ratio of public sector workers to residents is already third-lowest in the country. Firing more workers would drastically affect the services all Californians rely on, including public safety and education. (Capitol Weekly, 3/18/10). Based on statistical data, cutting 40,000 jobs would could cause the unemployment rate to spike by nearly a full percentage point (Ventura County Star, 11/17/09).
Whitman’s Claim: California can create two million jobs in the next five years while simultaneously cutting $15 billion from the budget. (//www.megwhitman.com)
The Facts: Sacramento Bee columnist Dan Walters contended that Whitman’s promise to create two million jobs “defies economic, demographic and political reality.” (Sacramento Bee, 2/19/2010)
“The economic ‘studies’ Whitman draws upon are unscientific and an unsound basis for policy. If implemented, her policy proposals are likely to have negative effects on jobs and economic growth and to deepen the state’s budget crisis.” (“Can Californians trust what Meg Whitman is selling?” Michael Reich for the Center for American Progress Action Fund, 08/2010)
Whitman’s Claim: Eliminating the tax on capital gains tax will help to create jobs in California and increase revenues for the state. (Sacramento Bee, 04/19/2010)
The Facts: Capital gains are profits that wealthy investors make from the buying and selling of stock, and numerous studies have show that these tax breaks for the wealthy have little impact on job creation or spurring innovation. Cutting the capital gains tax would cost the state $10.8 billion – forcing more drastic cuts to education, public safety and other programs — and would provide a massive tax giveaway to the richest 1% of California taxpayers. (Los Angeles Times, 04/08/2010)
Whitman’s Claim: California can’t afford the high-speed rail project. (NBC Bay Area, 07/09/2010)
The Facts: The voter-approved high-speed rail is already paid for through Prop 1A bonds (SF Chronicle, 11/5/08). Failing to execute the project will result in California losing $2.2 billion in federal stimulus dollars designated for high-speed rail, along with more than 500,000 jobs projected to be created by the rail system. Reports also indicate that “Los Angeles alone will receive an economic boost of over $10 billion from the construction and operation of high speed rail”. (US Conference of Mayors Report, 6/14/10)
Whitman’s Claim: Over-regulation is driving jobs and businesses away to neighboring states. (Good Day LA, 07/20/2010)
The Facts: California loses very few jobs to other states. Businesses rarely move either out of or into California. According to recent data, the annual net employment change in California due to relocation — a loss of about 9,000 jobs — represents less than one-tenth of one percent of California’s 18 million jobs. (The Public Policy Institute of California, September 2010)
Whitman on Workers’ Rights and Benefits
Whitman’s Claim: California’s labor laws are burdensome to businesses, and the state should eliminate meal breaks and daily overtime. (Meg Whitman, 03/16/2010)
The Facts: California’s meal break and overtime laws protect workers from abuse and exploitation by employers. Decades of studies have found that meal and rest breaks result in a more productive and happier workforce (“Maximization of Labor Productivity Through Optimal Rest Break Schedules”, December 1984.) The eight-hour work day prevents employers from over-working their employees, which improves the quality of work and also leads to more hiring and job creation. (“Extended Hours, Extended Risks”, Winter 2004)
Whitman’s Claim: “The era of a defined benefit program is over relative to a defined contribution plan. New state workers should receive a 401(k)-style defined-contribution plan. For most existing state workers, we need to increase the retirement age from 55 to 65, require longer vesting periods, and ask them to contribute more to their retirement benefits.”” (Orange County Register, 03/18/2010)
The Facts: Whitman’s plan to eliminate defined-benefit pensions and replace them with a defined-contribution plan like a 401K would shift the investment risk and responsibility to individual workers. According to the Utah Retirement System, “By only providing a retirement benefit which is totally portable (such as a 401(k) or 457 plan) government and education run the risk that highly-trained employees who had an incentive to remain in their careers due to a desire to earn a 30 year retirement benefit, will be willing to leave their positions for opportunities in the private sector. The result will be much higher turnover in positions and less loyalty from senior employees, fewer experienced employees and educators, and a more transitory workforce.” (Utah Retirement System website)
Whitman’s Claim: California’s Attorney General should seek to block the federal health care reform law because of its implications on the deficit. (LA Times, 3/31/10)
The Facts: Health care insurance and costs have already improved dramatically for Californians since federal reform was enacted six months ago. Insurance providers can no longer discriminate against children with pre-existing conditions, young adults can stay on their parents insurance until age 26, insurers can no longer drop individuals when they get sick, and California has begun to set up a new Health Insurance Exchange that will provide a more consumer-friendly market for health coverage, which will reduce the deficit in the long-term. (Health Reform Six-Month Status Update, 09/21/2010)
Whitman on Education
Whitman’s Claim: Her $15 billion in proposed budget cuts wouldn’t affect K-12 or higher education. (San Francisco Chronicle, 09/16/2010)
The Facts:“Whitman’s plan to cut $15 billion from the budget therefore necessarily implies significant reductions in spending on education, health, and social service programs on top of the deep cuts already made in the past two years.” (“Can Californians trust what Meg Whitman is selling?” Michael Reich for the Center for American Progress Action Fund, 08/2010)
Whitman’s Claim: Cutting $1 billion from the state’s welfare-to-work program would allow the state to invest that money in public colleges and universities.
TheFacts: The state spends about $2.9 billion a year on its welfare program, and most of that money goes to children. According to published reports, “It’s unlikely the state would save $1 billion in its welfare budget even if it cut every adult recipient from the program.” (Sacramento Bee, 9/5/10).
Additionally, California schools and universities have suffered more than $17 billion in cuts over the last two years. One billion dollars would do little to close that gap (KGO/ABC 7 San Francisco, 3/4/10).
Whitman’s Claim: Fix education by reducing spending on overhead and putting more money into the classroom. Only 60 percent of education funding reaches the classroom and 40 percent is spent on wasteful bureaucracy (KESQ ABC Palm Springs, 04/15/2010)
The Facts: According to education experts,“California is near last in the nation in per-pupil spending. We’re dead-last in the nation in the ratio of librarians and counselors to students. We’re 47th in terms of administrators to students. We’re 37th in the nation in terms of total staff, including support personnel.” (Thoughts on Public Education, 05/04/2010)
The number of principals and administrators per student in California is one- third to one-half the national average. (Can Californians trust what Meg Whitman is saying? Michael Reich for the Center for American Progress Action Fund, 08/2010)
Whitman on Jerry Brown
Whitman’s Claim: As Governor, Brown turned a $6 billion surplus into a $1 billion deficit. (Meg Whitman ad, 6/22/10)
The Facts: Brown maintained a surplus as Governor until Prop 13, a measure state voters approved, reduced the state revenue dramatically by cutting property taxes. (Factcheck.org, 07/01/2010)
Whitman’s Claim: When Brown was governor, California’s economy got worse and unemployment shot up. (Meg Whitman ad, 6/22/10)
The Facts: When Brown was Governor, he was able to cut taxes by nearly $4 billion prior to the implementation of Prop 13, and during his tenure, Californians’ personal jumped by nearly 122%. (Sacramento Bee, 09/22/2010) He also created 1.9 million jobs, and has the strongest job-creation track record of any California governor. (San Diego Union Tribune, 6/6/2010)
Whitman’s Claim: Jerry Brown has “no plan” when it comes to creating jobs in California. (KSWB San Diego, 08/09/10)
The Facts: Brown has a robust and multi-faceted plan to create half a million new, green jobs through infrastructure, retrofitting and alternative energy projects, while simultaneously attracting new businesses to California. (//www.jerrybrown.org)
Whitman’s Claim: While Jerry Brown was Mayor of Oakland, crime soared. (Meg Whitman ad, 6/22/10)
The Facts: During Jerry Brown’s terms as Mayor, crime in Oakland dropped 13%. (Oakland Tribune, 08/29/2010)
Whitman on Scandals and Spending
Whitman’s Claim: “I fired [Goldman Sachs]. I didn’t like the culture, I didn’t like the management and I got off.” (California Watch, 5/3/2010)
The Facts: Whitman left the board of Goldman after she was targeted in a congressional investigation regarding “spinning”, an insider trading scheme that has since been made illegal (California Watch, 4/10/10).Whitman has received $216,200 in campaign contributions from donors associated with Goldman Sachs, which makes Goldman the largest outside contributor to her campaign. (California Watch, 09/23/2010)
Whitman’s Claim: While CEO of eBay, Whitman had a verbal dispute with a colleague. She dismisses any discussion of this event as “a fascination of the chattering class.” (LA Times, 6/23/10)
The Facts: Anonymous accounts of the dispute state that Whitman “shoved” a subordinate during an interview prep session. When the employee threatened legal action, eBay shareholders had to foot a $200,000 pay out. (LA Times, 06/23/2010)
Whitman’s Claim: Whitman is spending more than $100 million on her campaign in order to compete with the big-spending unions. (KSWB Fox San Diego, 08/09/2010)
The Facts: Compared to Whitman’s $119 million, unions have spent less than $15 million to Jerry Brown’s campaign. (Mercury News, 09/16/2010)