Campaign For Working Families Omits The Facts To Smear Reps. Nye, Skelton and Giffords

October 21, 2010 10:37 am ET

In a new version of its "Staggering" ad, Campaign for Working Families goes after Reps. Glenn Nye (D-VA), Ike Skelton (D-MO) and Gabrielle Giffords (D-AZ) for the alleged damage caused by the Democratic policies they supported. The ad makes the absurd suggestion that Nye, Skelton, Giffords and the Democrats are wholly responsible for "record deficits, a failed stimulus, reckless bailouts, the destruction of our health care, and tragic unemployment." In reality, however, had these policies not been implemented, the state of the economy would have been much worse and millions more Americans would have remained unemployed and without health insurance. Furthermore, the debt and deficit skyrocketed because of Bush policies and the economic downturn, and those "reckless bailouts" actually helped us avoid another Great Depression.

Campaign For Working Families: "Staggering"

What Barack Obama has done to America is staggering: record deficits, a failed stimulus, reckless bailouts, the destruction of our health care, and tragic unemployment. But Obama didn't do it alone; he had an accomplice. [Glenn Nye/Ike Skelton/Gabrielle Giffords] voted with Obama a stunning [83 percent/95 percent/88 percent] of the time. What else would you ever need to know about [Glenn Nye/Ike Skelton/Gabrielle Giffords]? Campaign for Working Families PAC is responsible for the content of this advertising.

Bush-Era Policies And The Recession Blew Up The Deficit

Before Obama Took Office, The FY 2009 Deficit Was Projected At $1.2 Trillion. As reported by the Washington Times: "The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn't enact any new programs. [...] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record." [Washington Times1/8/09, emphasis added]

CBPP: Deficit Grew By $3 TRILLION Because Of Policies Passed From 2001 To 2007. According to the Center on Budget and Policy Priorities: "Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years. Legislation enacted since 2001 added about $3.0 trillion to deficits between 2001 and 2007, with nearly half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending)." [CBPP, accessed 1/31/10, parentheses original]

The Bush Tax Cuts Are The Primary Driver Of Federal Budget Deficits Over The Next Decade. Below is a chart from CBPP showing the deficit impacts of war spending, financial recovery spending, the recession itself, and the Bush tax cuts:

CBPP

[CBPP.org, 6/28/10]

Public And Foreign-Held Debt Skyrocketed While Bush Was In Office. Below are two graphs prepared by the Speaker's office showing the increase of publically and foreign-held debt during the years Bush was in office:

bushpublicdebt

bushforeigndebt

[U.S. Treasury via The Gavel, 6/11/10]

The Recovery Act Didn't Fail — It Created Millions Of Jobs And Boosted The Economy

The Economy Shed Almost 8 Million Jobs Under Republican Policies Before The Recovery Act Was Passed. According to economist Robert J. Shapiro:

From December 2007 to July 2009 - the last year of the Bush second term and the first six months of the Obama presidency, before his policies could affect the economy - private sector employment crashed from 115,574,000 jobs to 107,778,000 jobs. Employment continued to fall, however, for the next six months, reaching a low of 107,107,000 jobs in December of 2009. So, out of 8,467,000 private sector jobs lost in this dismal cycle, 7,796,000 of those jobs or 92 percent were lost on the Republicans' watch or under the sway of their policies. Some 671,000 additional jobs were lost as the stimulus and other moves by the administration kicked in, but 630,000 jobs then came back in the following six months. The tally, to date: Mr. Obama can be held accountable for the net loss of 41,000 jobs (671,000 - 630,000), while the Republicans should be held responsible for the net losses of 7,796,000 jobs. [Sonecon.com, 8/10/10, emphasis added]

Based on Shapiro's research, the Washington Post's Ezra Klein created the following chart showing net job losses before and after the Recovery Act was enacted:

Klein

[Washington Post8/12/10]

CBO: The Recovery Act Created Jobs, Lowered Unemployment, And Boosted GDP. According to the nonpartisan Congressional Budget Office, through the second quarter of 2010, the American Recovery and Reinvestment Act:

  • Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent,
  • Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points,
  • Increased the number of people employed by between 1.4 million and 3.3 million, and
  • Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 4.8 million compared with what those amounts would have been otherwise.

[CBO, 8/24/10]

Reuters: The Recovery Act May Have "Prevented The Sluggish Economy From Contracting" Between April And June. According to Reuters

The massive U.S. stimulus package put millions of people to work and boosted national output by hundreds of billions of dollars in the second quarter, the nonpartisan Congressional Budget Office said on Tuesday.

CBO's latest estimate indicates that the stimulus effort, which remains a political hot potato ahead of the November congressional elections, may have prevented the sluggish U.S. economy from contracting between April and June.

CBO said President Barack Obama's stimulus boosted real GDP in the quarter by between 1.7 percent and 4.5 percent, adding at least $200 billion in economic activity. [Reuters via ABC News, 8/24/10]

Job Statistics Trend Shows Recovery Act Is Working. Below is a graph prepared by the Speaker's office showing net private sector job gains or losses per month since December 2007.

privatesectoremp

[Bureau of Labor Statistics via The Gavel, 10/8/10]

Princeton, Moody's Economists Say "Highly Effective" Government Response To Crisis Saved 8.5 Million Jobs. According to the New York Times: "Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government's sweeping interventions to prop up the economy since 2008 helped avert a second Depression. Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved. In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration's fiscal stimulus program, the nation's gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation. The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody's Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years. 'While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,' they write." [New York Times7/27/10, emphasis added]

Congress Voted To "Bail Out Wall Street" At Insistence Of Bush Administration

Congress Passed Bailout "After Dire Warnings From The Bush Administration." According to the Washington Post: "Congress created the Troubled Asset Relief Program after dire warnings from the Bush administration that panic had seized credit markets and that the global economy was on the verge of meltdown. Barely two weeks later, Congress rushed through a measure giving Treasury Secretary Henry M. Paulson Jr. sweeping authority to spend up to $700 billion to inject cash into troubled financial institutions and buy 'toxic' assets such as those backed by failing mortgages." [Washington Post, 1/13/09]

Bush Administration Urged Passage Of Bank Bailout. As ABC News reported: "The architects of the Bush administration's massive $700 billion bailout for financial firms went to Capitol Hill today to urge lawmakers to act quickly and pass the bill 'cleanly' or risk a recession. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that failing to pass the administration's big-money bailout for the financial industry would stifle consumer spending, bring more home foreclosures and cause job loss." [ABC News, 9/23/08]

President Bush: America Might "Slip Into A Major Panic" Without Bailout. CNN reported:

U.S. President George W. Bush, saying "our entire economy is in danger," urged Congress to approve his administration's $700 billion bailout proposal.

"We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions," Bush said in a televised address Wednesday night from the White House.

Bush pointed out that the collapse of several major lenders was rooted in the subprime mortgage market that thrived over the past decade.

He said passage of the $700 billion bailout proposal was needed to restore confidence in the market.

"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.

"Without immediate action by Congress, America can slip into a major panic." [CNN, 9/24/08]

Auto "Bailouts" Helped Stabilize Industry

The Economist: Without The Bailout, GM Would Have Likely Liquidated, "Sending A Cascade Of Destruction" Through The Industry. According to The Economist: "So was the auto bailout a success? It is hard to be sure. Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk. Many observers think this unlikely, however. Given the panic that gripped private purse-strings last year, it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended. As for moral hazard, the expectation of future bailouts may prompt managers and unions in other industries to behave rashly. But all the stakeholders suffered during GM's bankruptcy, so this effect may be small. That does not mean, however, that bailouts are always or often justified. Straightforward bankruptcy is usually the most efficient way to allow floundering firms to restructure or fail. The state should step in only when a firm's collapse poses a systemic risk. Propping up the financial system in 2008 clearly qualified. Saving GM was a harder call, but, with the benefit of hindsight, the right one. The lesson for governments is that for a bailout to work, it must be brutal and temporary." [The Economist, 8/19/10, emphasis added]

Wall Street "Bailout" Helped Stabilize Industry, Economy

In The Midst Of A Downward Spiral, TARP Helped Stabilize The Financial System. As reported by Reuters: "The U.S. government's $700 billion financial rescue program has helped to stabilize the system, but may be creating systemic problems by fueling a belief banks will always be bailed out, a watchdog for the program said on Wednesday. 'Compared to where we were last October there is no question that the system if far more stable. We were on the precipice and I think the (Troubled Asset Relief Program) contributed with the other programs to pull us back,' Neil Barofsky, the special inspector general for the program, told CNBC. 'But I do think because of the moral hazard, because of some systemic risks that are associated with making these institutions bigger and bigger ... systemically we may be in a more dangerous place even then we were a year ago,' he said." [Reuters, 10/21/09]

Ignatius: Bailouts "Almost Surely Saved The Country From Another Great Depression." According to the Washington Post's David Ignatius: "Constant repetition of anti-government rhetoric in our political echo chamber has dulled Americans into overlooking an important and perhaps surprising fact: We have just lived through one of the more notable successes of government intervention in modern times -- the auto and bank rescues that almost surely saved the country from another Great Depression. [...] A similar success story seems likely with most of the rest of the money spent for TARP, the acronym that is a dirty word this political season. The Troubled Assets Relief Program, coupled with emergency facilities at the Fed, allowed a "work-out" for a financial system that was on the verge of freezing up. Most of the TARP investments, it seems, will be recovered, too, including loans made to the notorious insurance behemoth AIG." [Washington Post, 10/14/10, emphasis added]

Taxpayers Could Actually Earn A Profit On TARP

NYT: Government Bailouts To Banks, Auto Companies, "Could Conceivably Earn Taxpayers A Profit." According to the New York Times:

Even as voters rage and candidates put up ads against government bailouts, the reviled mother of them all — the $700 billion lifeline to banks, insurance and auto companies — will expire after Sunday at a fraction of that cost, and could conceivably earn taxpayers a profit.

A final accounting of the government's full range of interventions in the economy, including the bailouts of the mortgage finance giants Fannie Mae and Freddie Mac, is years off and will most likely remain controversial and potentially costly.

But the once-unthinkable possibility that the $700 billion Troubled Asset Relief Program could end up costing far less, or even nothing, became more likely on Thursday with the news that the government had negotiated a plan with the American International Group to begin repaying taxpayers.

tarp

[New York Times, 9/30/10, emphasis added]

The Affordable Care Act Didn't Destroy Health Care — It Kept In Place The Private Health System

PolitiFact: "Obama's Plan Leaves In Place The Private Health Care System." Analyzing Sen. Tom Coburn's claim that President Obama's health care reform plan amounted to a government takeover of health care, PolitiFact.com wrote:

[H]e's wrong that Obama's plan offers government-run health care.

In fact, Obama's plan leaves in place the private health care system, but seeks to expand it to the uninsured. It increases eligibility for the poor and children to enroll in initiatives like Medicaid and the State Children's Health Insurance Program, and creates pools for individuals to buy their own cheaper insurance. It also outlines strategies to rein in costs for everyone, such as electronic medical records and preventive care.

[...]

That may be Sen. Coburn's opinion on what could happen, but it's definitely not part of Obama's plan. And Coburn was very specific in saying that "under the Obama plan, all the health care in this country is eventually going to be run by the government." That gives the incorrect impression that Obama is promoting a government-run health care system. He's not. We rate Coburn's statement False.

[PolitiFact.com, 3/4/10, emphasis added]

Millions Of Uninsured Americans Will Benefit From Health Care Reform

CBO: Health Care Reform Will Provide Coverage To 32 Million Non-Elderly Uninsured Americans. According to the Congressional Budget Office:

On the health care and revenue side, the reconciliation proposal and H.R. 3590 would, among other things, establish a mandate for most residents of the United States to obtain health insurance; set up insurance exchanges through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage; significantly expand eligibility for Medicaid; substantially reduce the growth of Medicare's payment rates for most services (relative to the growth rates projected under current law); impose an excise tax on insurance plans with relatively high premiums; and make various other changes to the federal tax code, Medicare, Medicaid, and other programs.

CBO and JCT estimate that by 2019, the combined effect of enacting H.R. 3590 and the reconciliation proposal would be to reduce the number of nonelderly people who are uninsured by about 32 million, leaving about 23 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). Under the legislation, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent.

[CBO.gov, 3/21/10, emphasis added]

Thoma: Reform Benefits Low And Moderate-Income Individuals Without Coverage, Those With Existing Health Problems. According to economist Mark Thoma:

In general terms, the beneficiaries of the legislation will be (this is based upon a CBPP analysis, and is in general terms only, more exact numbers do not appear to be available):

  • Low- and moderate-income individuals and families who do not have employer-based insurance and who do not qualify for Medicaid or Medicare. This will be accomplished by expanding Medicaid, and through cost-sharing credits to help these households pay for insurance.
  • Individuals and families who have incomes that are too high to qualify for Medicaid, but below 400 percent of the poverty line will receive "premium credits" to lower the cost of health insurance in the new health insurance exchanges.
  • All individuals younger than 65 who are legal residents and not eligible for Medicare. The plan expands Medicaid up to 133 percent of the poverty line. As CBPP notes, " This would mean that millions of low-income parents, as well non-disabled low-income adults who do not have dependent children would become newly eligible for health coverage through Medicaid."
  • People at all income levels, as well as employers will benefit from "a number of important reforms to the health insurance market that would greatly improve access to affordable and comprehensive health insurance coverage."
  • Adult dependents younger than 26 can now be covered on their parent's policies. These insurance plans cannot exclude children due to pre-existing conditions, and they will be required to offer preventative measures at no additional cost.
  • People who have existing health problems. Beginning in 2014, insurance companies will be prevented from denying coverage or charging higher premiums to people who have health problems, and it limits insurers' ability to charge higher premiums to individuals as they age.

[MoneyWatch.com, 3/22/10]

Under The Affordable Care Act, Most People Will Pay The Same Or Less For Better Coverage

PolitiFact: "For Most People, Premiums Would Stay About The Same, Or Slightly Decrease." According to PolitiFact.com: "The CBO reported that, for most people, premiums would stay about the same, or slightly decrease. This was especially true for people who get their insurance through work. (Health policy wonks call these the large group and small group markets.) People who have to go out and buy insurance on their own (the individual market) would see rates increase by 10 to 13 percent. But more than half of those people -- 57 percent, in fact -- would be eligible for subsidies to help them pay for the insurance. People who get subsidies would see their premiums drop by more than half, according to the CBO. So most people would see their premiums stay the same or potentially drop." [PolitiFact.com, 1/27/10; emphasis added]

PolitiFact: 10-13% Premium Increase Is For Individual, Subsidized Market. According to PolitiFact.com: "People who have to go out and buy insurance on their own (the individual market) would see rates increase by 10 to 13 percent. But more than half of those people -- 57 percent, in fact -- would be eligible for subsidies to help them pay for the insurance. People who get subsidies would see their premiums drop by more than half, according to the CBO. So most people would see their premiums stay the same or potentially drop." [PolitiFact.com, 1/27/10]

Washington Post's Ezra Klein: Analysis Assumes People Will Buy Better Insurance, "Premiums For The Same Policy...Fall By 14 To 20 Percent." According to the Washington Post's Ezra Klein, in his analysis of the CBO report:

The confusion comes in the CBO's analysis of the individual market, which serves about a tenth of the population. CBO expects prices in the individual market to rise by 10 or 12 percent, an expectation driven entirely by predictions that individuals will purchase policies that are much more comprehensive, and thus somewhat more expensive, then the insurance they can afford now. Then the CBO turns to look at the impact of the subsidies, which will cut premium costs by a bit over 50 percent for a bit over 50 percent of the market.

But as the CBO explains on page five, part of the increase in the type of insurance being purchased is the result of "people's decisions to purchase more extensive coverage in response to the structure of subsidies." In other words, the change is driven by the subsidies, not offset by them.

To see this more clearly, imagine that the University of Florida decided to give incoming students who receive financial aid an $800 credit to purchase a laptop computer. You'd expect that the average computer purchased by students on financial aid would become a bit more expensive. But that wouldn't be because computers had become more expensive. It would be because people now had money to buy better computers.

So too for health-care reform. Premiums for the same policy in the individual market fall by 14 to 20 percent. But people in the individual market, who are largely low-income, will now have the opportunity to purchase better policies that cover more expenses and provide more security. That's a good thing. It's one of the reasons for health-care reform, in fact. And it is not analogous to health-care insurance becoming more expensive, any more than the fact that I could buy a nicer car after getting a better job suggests that cars are becoming more expensive. [Washington Post12/1/09, emphasis added]

The Affordable Care Act Strengthens Medicare Without Cutting Benefits

FactCheck.org: "None Of The 'Savings' Or 'Cuts' (Whichever You Prefer) Come From Reducing Current Or Future Benefit Levels For Seniors." According to FactCheck.org, "The House bill would trim projected increases in payments for hospitals, insurance companies, pharmaceutical companies and others, including home health care providers and suppliers of motor-driven wheelchairs. But it also proposes what CBO estimates is a $245 billion increase in spending for doctors, by canceling a scheduled 21 percent cut in physician payments. None of the 'savings' or 'cuts' (whichever you prefer) come from reducing current or future benefit levels for seniors." [FactCheck.org, accessed 9/9/09]

Changes To Medicare Advantage Come With Extra Benefits For All Medicare Enrollees. FactCheck.org reported: "The CBO has estimated that the move would change the value of the extra benefits Medicare Advantage participants get, but they would not receive fewer benefits than the rest of seniors who aren't on the Advantage plans. The bill does add some extras for Medicare beneficiaries, eliminating copays and deductibles for preventive services, for example." [FactCheck.org, 12/2/09; emphasis added]

Health Care Reform "Will Keep Paying Medical Bills For Seniors." According to PoliFact.com: "The government-run Medicare program will keep paying medical bills for seniors, but it will begin implementing cost controls on health care providers, mostly through penalties and incentives. The legislation would reduce payments for hospital-acquired infections or preventable hospital admissions. For Medicare Advantage, the federal government intends to reduce extra payments, taking away subsidies to private insurance companies. Insurers will likely cut benefits in order to not lose profits. The bill does not address the 'doctor's fix,' an expected proposal that Congress usually passes to prevent doctors' Medicare payments from severe cuts." [PoliFact.com, 3/18/10; emphasis in original]

CBO: Cost Changes To Medicare Made From Savings. According to the CBO: "Changes to the Medicare program and changes to Medicaid and CHIP other than those associated directly with expanded insurance coverage: Savings from those provisions are estimated to total $93 billion in 2019, and CBO projects that, in combination, they will increase by 10 percent to 15 percent per year in the next decade." [CBO.gov, 10/7/09]

Health Care Reform Fills The "Doughnut Hole." According to the Kaiser Family Foundation: "In 2010, Part D enrollees with any spending in the coverage gap will receive a $250 rebate. Beginning in 2011, enrollees with spending in the coverage gap will receive a 50 percent discount on brand-name drugs, provided by the pharmaceutical industry. The law phases in Medicare coverage in the gap for generic drugs beginning in 2011, and for brand-name drugs beginning in 2013. By 2020, Part D enrollees will be responsible for 25 percent of the cost of both brands and generics in the gap, down from 100 percent in 2010." [Kaiser Family Foundation, accessed 8/25/10]

Health Care Reform Improves Medicare's Coverage Of Preventative Benefits. According to the Kaiser Family Foundation: "Beginning in 2011, no coinsurance or deductibles will be charged in traditional Medicare for preventive services that are rated A or B by the U.S. Preventive Services Task Force (USPSTF). Medicare will cover a free annual comprehensive wellness visit and personalized prevention plan." [Kaiser Family Foundation, accessed 8/25/10]

Click HERE for details on the trillions of dollars Republicans have voted to cut from Medicare.


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