MEMO: Romney Can’t Explain the Central Premise of His Candidacy
TO: Interested Parties
FR: Bill Burton, Priorities USA Action
RE: Sunday Memo: Romney Can’t Explain the Central Premise of His Candidacy
Mitt Romney: "I am running for President because I have spent my life in the private sector.”
But this week, Romney reinforced what was clear during the Republican primary race: He has no explanation for how or why his private sector experience qualifies him to be President.
Romney’s responses on Bain have ranged from false to irrelevant while all avoiding the questions that are being asked.
First, Romney and his campaign responded to questions about how he profited from driving GST Steel towards bankruptcy by claiming that another steel mill, Steel Dynamics, was successful. But as has been extensively reported by the Los Angeles Times and others, the government actually contributed more towards that mill than Romney and Bain. Our new video outlines how Romney’s attempt to take credit for jobs at Steel Dynamics is a misleading exaggeration.
Then, Romney responded to questions about how he profited from thousands of layoffs by claiming that, overall, he helped create 100,000 jobs. Romney’s fictional number is backed up by claims that the Washington Post wrote, “do not pass the laugh test.” Even conservatives have said the number, “Should be bullet proof. But it isn’t.” The Washington Post followed up on Romney’s repeated lie about his jobs record by declaring it, “untenable and unproven.”
Finally, Romney has responded to questions about the demise of GST Steel by claiming that it is comparable to the auto rescue, which he opposed. But President Obama’s rescue of the auto industry and Romney’s takeover of GST could not be more different. Romney successfully aimed to extract profit from a steel mill that was driven to collapse by adding debt. President Obama successfully aimed to prevent the collapse of the American auto industry.
Plenty of politicians have tortured responses to questions about their past. But Romney made his experience at Bain the central premise of his run for President.
Romney’s inability to answer basic questions about his private sector experience doesn’t just hurt his campaign, it undermines his self-described main qualification to lead America.
New Video: Facts on Romney’s Steel Mill Video: http://youtu.be/PTOvzvhfJNE
Romney: "I am running for President because I have spent my life in the private sector.” [Romney for President Video, 6/14/11]
Mitt Romney responded to questions about his record at Bain Capital with a web video about Steel Dynamics, a Bain Capital investment. According to CNN, “Hours after President Barack Obama's re-election team launched an attack on Mitt Romney's role in a now-bankrupt steel plant, the likely Republican nominee released his own web video touting another steel company that's now thriving.
Romney's team pointed to Steel Dynamics in the web video, which is thriving more than a decade after an investment from Bain Capital, the private equity firm Romney founded and ran in the 1980s and 90s.” [CNN, 5/14/12]
Los Angeles Times On Steel Dynamics: “Government support was a key ingredient to getting it off the ground.” According to the Los Angeles Times, “What Romney doesn't mention is that Steel Dynamics also received generous tax breaks and other subsidies provided by the state of Indiana and the residents of DeKalb County, where the company's first mill was built. […] As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.” [Los Angeles Times, 1/12/12]
Greg Leroy: Incentives Provided Steel Dynamics With “$92,000 Per Job.”“During a discussion on state business incentives on the Macneil/LehrerNewshour, Greg LeRoy said “Well, in the case of SteelDynamics, it looks like the state of Indiana is just icing the cake. In its own statements, the company has admitted that they’re locating there because of proximity to suppliers and customers, so it looks like it would happen anyway. Why throw $92,000 per job at it? That’s icing the cake.” [The Macneil/Lehrer Newshour, 9/6/94]
The State And County Pledged $37 Million In Subsidies And Grants For The Project – 9.6% of the Total. According to The Los Angeles Times, “As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.” Bain invested $18.2 million. [The Los Angeles Times, 1/12/12]
DeKalb County Adopted An Economic Development Income Tax After Steel Dynamics Decided To Locate Its Plant In The County. According to Fort Wayne Journal Gazette, “Although residents in the 745-acre site named by Steel Dynamics haven’t heard much in the two months since Steel Dynamics announced it was coming to DeKalb County, DeKalb County commissioners have. Since the Valentine’s Day announcement, the county has adopted an Economic Development Income Tax, established a redevelopment authority and formed a redevelopment commission. The group also doesn't want the County Council and the county commissioners to lend the steel mill any public money. And it wants the present zoning of the proposed site to be rescinded.” [Fort Wayne Journal Gazette, 4/17/94]
In an interview with Ed Morrissey, Mitt Romney claimed that his work with Bain Capital helped to create ‘over 100,000 jobs.’ According to the Washington Post, “Romney was asked by conservative talk radio host and blogger Ed Morrisey of Hot Air about a new attack this week from Obama’s reelection campaign over Bain’s role in the 2001 bankruptcy of GST Steel, which resulted in massive job losses. […] “We were able to help create over 100,000 jobs,” Romney said of his tenure at Bain, the venture capital and corporate buyout firm he founded.” [Washington Post, 5/16/12]
Washington Post: Mitt Romney’s claims about Bain Capital job creation ‘do not pass the laugh test.’ According to the Washington Post, “But if he is to continue to make claims about job creation, the Romney campaign needs to provide a real accounting of how many jobs were gained or lost through Bain Capital investments while the firm managed these companies — and while Romney was chief executive. Any jobs counted after either of those data points simply do not pass the laugh test.” [Washington Post, 1/10/12]
James Pethokoukis: “That ‘over 100,000’ number should be bullet proof. But it isn’t.” Conservative James Pethokoukis wrote on his blog that, “As Romney himself said when he announced his presidential candidacy, “Sometimes I was successful and helped create jobs, other times I was not.” And given Romney’s financial acumen and that of his brainiac policy team, that “over 100,000″ number should be bullet proof. But it isn’t.” [American Enterprise Institute, 1/7/12]
Washington Post: Mitt Romney’s claims about Bain Capital job creation are ‘untenable and unproven.’ According to the Washington Post, “The 100,000 jobs is back! The presumptive GOP nominee all but stopped mentioning he created 100,000 in the private sector after we declared in January that claim was untenable and unproven.” [Washington Post, 5/18/12]
Mitt Romney compared job losses at the GST Steel mill to job losses in the American auto industry during President Obama’s administration. According to the Washington Post, ““The most recent attacks are really off target and I think they know,” Romney said. “They said, ‘Oh, gosh, Governor Romney at Bain Capital closed down a steel factory.’ But their problem, of course, is that the steel factory closed down two years after I left Bain Capital. I was no longer there, so that’s hardly something which is on my watch.” Then Romney tried to lay blame for auto job losses on Obama. “We were able to help create over 100,000 jobs,” Romney said of his tenure at Bain, the venture capital and corporate buyout firm he founded. “On the president’s watch, about 100,000 jobs were lost in the auto industry and auto dealers and auto manufacturers, so he’s hardly one to point a finger.” [Washington Post, 5/16/12]
President Obama’s Auto Policy Saved Over One Million Jobs. According to the Wall Street Journal, “The Center for Automotive Research said today the government’s bailouts of the U.S. auto industry spared more than 1.14 million jobs last year alone, and prevented “additional personal income losses” of nearly $97 billion combined for this year and last.” [Wall Street Journal, 11/17/10]
Bain Capital made a profit from the GS Industries deal even though the company went bankrupt. According to Reuters, “Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they'd been promised, and their pension benefits were cut by as much as $400 a month. What's more, a federal government insurance agency had to pony up $44 million to bail out the company's underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.” [Reuters, 1/6/12]
After Closing The Plant, The Company Went Back On Its Promise To Offer Health Insurance, Severance Pay, And Life Insurance. According to Reuters, “GS Industries declared bankruptcy on February 7, 2001, and said it would shut down the Kansas City plant, eliminating 750 jobs. In a press release, the company said the bankruptcy was triggered in part by ‘the critical need to restructure the company’s liabilities.’ Workers soon found out what that meant. In April, GS said it was shedding the guarantees it had promised its workers in the event of a plant closure - the severance pay, health insurance, life insurance and pension supplements that had been negotiated during the 1997 strike. Workers could buy health insurance through the company’s plan, but the company would no longer share its costs. For many who were struggling with asbestosis or other ailments contracted during their years of work, the cost was prohibitive.” [Reuters, 1/6/12]