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Mitt Romney's economic record questioned
January 20, 2008 / 10:38 PM / in 10 years

Mitt Romney's economic record questioned

JACKSONVILLE, Florida (Reuters) - Republican Mitt Romney is touting his revival of the Massachusetts’ economy in a pitch to voters in Florida, a state that could make or break his White House bid, but some experts dispute that record.

<p>Republican presidential candidate Mitt Romney fires up the crowd as he speaks about Washington being broken at the start of his Florida swing in Jacksonville January 19, 2008, after winning the Nevada primary today and the Michigan primary earlier in the week. REUTERS/Mark Wallhesier</p>

The former Massachusetts governor issued a statement on Sunday titled “creating jobs” that focuses on 57,600 jobs added to the Massachusetts economy during his single term as governor from 2003 to 2007.

But Northeastern University economist Andrew Sum, who has researched Romney’s record, said the state lagged the U.S. average during that period in job creation, economic growth and wage increases.

”As a strict labor market economist looking at the record, Massachusetts did very poorly during the Romney years, he said. “On every measure you’ve got, the state was a substantial under-performer.”

At a campaign rally here on Saturday, Romney’s supporters handed out flyers promoting the candidate’s economic credentials, a central theme in his campaign, saying he had “closed a nearly $3 billion budget deficit without raising taxes” during his term in Massachusetts.

But the $3 billion deficit projected by Romney and state legislators in January 2003 at the start of his administration never rose that high because a surge in capital gains taxes more than halved the shortfall to $1.3 billion.

While Romney and the state legislature cut $1.6 billion from the 2004 budget, analysts noted he also generated more than $500 million by raising fees and by closing corporate tax loopholes -- actions considered tax rises by some businesses.

“There’s never been under his watch an economic turnaround to speak of,” Michael Widmer, president of the independent Massachusetts Taxpayers Foundation, told Reuters.

“We added a few jobs over the last three years of his tenure but very few. He also raised corporate taxes and fees and the (deficit) gap turned out to be less than $3 billion.”


Romney is in a close four-way race in Florida where the primary on January 29 is the next test in the state-by-state battles to determine the Republican and Democratic candidates who will square off in November’s presidential election.

The multimillionaire former venture capitalist has retooled his campaign to emphasize his nearly 25 years of business experience that includes founding Bain Capital LLC, a successful Boston-based private-equity firm, in 1984.

At rallies, Romney presents himself as a candidate whose real-world business experience can help shake up Washington.

But he faces stiff competition in Florida’s Republican race from John McCain, the senator from Arizona who won Saturday’s South Carolina primary, along with former New York Mayor Rudy Giuliani and former Arkansas Gov. Mike Huckabee.

Romney’s resume includes a number of prominent successes such as rescuing the debt-ridden Salt Lake City Olympics and helping to set up office supply retail-store chain Staples Inc., which employs about 70,000 people.

Massachusetts also won a credit-rating upgrade during Romney’s term as governor for the first time since 2000, his campaign’s statement said.

His supporters contend the state’s job market was soft long before Romney’s term, which ended in January last year, blaming a Democratic-controlled Legislature for the weakness. His spokesman, Kevin Madden, has asserted that Romney brought Massachusetts “back from the brink of financial disaster.”

But Northeastern’s Sum said that while jobs were created under Romney, the rate was the third-lowest in the nation after Hurricane Katrina-hit Louisiana and Michigan. At the same time, wages in the New England state stagnated during Romney’s term.

The average weekly wage of Massachusetts workers, Sum said, rose by just a $1 between 2001 and 2006 after adjusting for inflation, while the state had the third-highest rate of population loss in the nation between July 2002 and July 2006.

Real output of goods and services -- a broad measure of economic performance -- grew 9 percent, below the 13 percent rate for the United States, he added.

Editing by Chris Wilson

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