The NRCC's Ad Gimmicks Go "From Bad To Worse"

October 27, 2010 6:48 pm ET

The National Republican Congressional Committee is out with a surprisingly creepy ad illustrating the purported decline in Rep. Martin Heinrich's (D-NM) effectiveness as a legislator, using images of a hospital and the sound of a heart rate monitor and announcing that "Heinrich's condition has gone from bad to worse." At the end, the ad intones, "Martin Heinrich, time's up" and the heart rate monitor flatlines. But the evidence offered for Heinrich's supposed failure includes the deficit, which is a legacy of Bush-era Republican policies; the Recovery Act, which created jobs and boosted the economy; and health care reform, which, contrary to the ad's assertion, strengthens Medicare without cutting benefits for seniors.

National Republican Congressional Committee: "From Bad To Worse"

Martin Heinrich's condition has gone from bad to worse. Heinrich voted for Nancy Pelosi's budget with a trillion dollar deficit, voted for her failed stimulus bill that spent a billion dollars on jobs overseas. Then Heinrich voted for Pelosi's government takeover of health care, which cut Medicare by $500 billion and could hurt 75,000 New Mexicans. Martin Heinrich, time's up. The National Republican Congressional Committee is responsible for the content of this advertising.

The Exploding Debt And Deficit Are The Result Of Bush-Era Policies And The Recession

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.org, 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 publicly 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 Created Millions Of Jobs And Boosted The Economy

The Economy Shed Almost 8 Million Jobs Under Republican Policies Before The Recovery Act Could Affect The Economy. 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.

Private Sector Employment

[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]

Stimulus Funds Go To U.S.-Based Projects

To back up its claim that the stimulus created jobs overseas, the NRCC cites a Washington Times article which in turn cites a study conducted by American University that has been widely distorted to contend that the stimulus' clean energy grants went to create jobs in China and other countries. However, the study's author himself states that the Recovery Act provides funding to U.S.-based projects, some of which are American subsidiaries of foreign companies.

Controversy Over Renewable Energy Jobs Originates From Distortion Of American University Study. From a PolitiFact article fact-checking Sarah Palin's claim that "80 percent of $2 billion they spent on alternative energy went to purchase wind turbines in China," which it found to be false: "To support her statement, Palin's Facebook missive links to a Feb. 11, 2010, op-ed in Investor's Business Daily, a conservative news source. The editorial states that, according to the Investigative Reporting Workshop at American University, nearly $2 billion from the stimulus bill has been spent on wind power, and that 80 percent of that has gone to foreign manufacturers of wind turbines. ... The Investigative Reporting Workshop's story on stimulus dollars and the wind industry came in two parts. In October 2009, it published its first analysis. The group found that of the $1.05 billion in clean-energy grants already handed out by the Department of Energy, about 84 percent -- or $849 million -- ended up in the hands of foreign wind companies. ... On Feb. 8, 2010, [the author of the study Russ] Choma updated his original findings, reporting that an additional $1 billion had been handed out in renewable energy grants, bringing the grand total to $2.1 billion. Of that, about 79 percent has gone to overseas firms." [PolitiFact.com, 2/23/10]

Study's Author: Renewable Energy Stimulus Grants Go To U.S.-Based Projects, Some Built By American Subsidiaries Of Foreign-Owned Companies. From PolitiFact:

We spoke with Russ Choma, the story's author, who explained that these grants are given to U.S.-based wind projects, but that many of these projects are being built by the American subsidiaries of foreign-owned companies. For instance, on Sept. 22, 2009, the DOE awarded $464.2 million to wind projects, and all of it went to local subsidiaries of foreign companies, according to the report. Those companies include Iberdrola, a Spanish company that received $250.9 million; the American subsidiary of Japan's Eurus Energy, which got $91.3 million; and the American subsidiary of Germany's E.ON Group, which received $121.9 million. 

Choma also points out that the wind turbine manufacturing industry in the United States is relatively weak compared to those abroad; of the 1,807 turbines erected in the United States as a result of the stimulus grants, foreign-owned manufacturers made 1,219, according to the report. 

[PolitiFact.com, 2/23/10, emphasis added]

Further Confusion Over Study Came From Letter From Senators. From the New York Times:

Four Democratic senators are calling on the Obama administration to halt spending on a renewable energy program in the economic stimulus package until rules are in place to assure that the projects use predominantly American labor and materials.

The senators said that more than three-fourths of $2 billion spent on wind-energy projects supported by the stimulus package had gone to foreign companies. They said that effectively undercut the purpose of the stimulus program - formally known as the American Recovery and Reinvestment Act - which is to jump-start the American economy and create jobs here.

[...]

The senators introduced legislation on Wednesday that would require that stimulus funds go only to clean-energy projects that rely on materials manufactured in the United States and create a majority of jobs here. The current law requires a "Buy American" provision only for government projects, not private enterprises.

[New York Times3/3/10]

Department Of Energy: Funding Only Goes To Projects Built In US. From Politico: "But the Department of Energy responded Wednesday afternoon, saying that the senators' message was misleading and that funding goes only to projects built in the United States and that those projects, in turn, spur economic growth. They say wind turbines built domestically - regardless of where some of the parts are manufactured - will create more demand for clean-energy manufacturing." [Politico3/3/10]

Department of Energy: Wind Energy Program Creates Thousands Of American Jobs And Attracts Billions In Foreign Investment. From the New York Times:

The Treasury Department declined to comment on the senators' letter, but the Energy Department, which administers the clean energy part of the stimulus package, said that the program was creating thousands of jobs in the United States.

"The Recovery Act has doubled the pace of investment in America's wind industry - including helping attract more than $10 billion of foreign investment to create U.S. jobs," Stephanie Mueller, news media secretary at the Energy Department, said. "The best way to stimulate our manufacturing base is to stimulate demand for wind turbines in America, since manufacturers tend to locate where the demand is."

She added that the administration would work with Congress to strengthen the clean-energy grants program, but said that suspending it now would mean immediate layoffs at American manufacturing plants.

[New York Times3/3/10]

The Recovery Act Created Tens Of Thousands Of American Jobs Via Renewable Energy Grants

American Wind Energy Association: Recovery Act Created Or Saved 40,000 Wind Industry Jobs. From PolitiFact: "Christine Real de Azua, a spokeswoman for the American Wind Energy Association, credits the stimulus bill with saving and creating 40,000 jobs; at the start of 2009, her organization expected that wind power development might drop as much as 50 percent from 2008 levels. Midyear, the trend turned around, she said. Most of those 40,000 jobs are in the construction sector; jobs in the manufacturing sector fell last year. That said, the American Wind Energy Association estimates that more than 50 percent of turbine parts, such as towers, blades, nacelle assembly, and some internal components are made in the United States, a number that is growing." [PolitiFact.com, 2/23/10]

Wind Project Financers: Majority Of Jobs Created By Texas Wind Energy Project Will Go To Americans. From ABC News:

The company that is helping to finance the wind project, US-REG, issued a statement Wednesday saying that the majority of jobs created by the project will be for Americans.

"A minimum of 70 percent of each wind turbine [...] will be wholly manufactured in the United States and made entirely of American steel. It is incorrect to assume that the hundreds of additional jobs created aside from the direct construction and operation of the Texas plant would be outside the U.S.," said Cappy McGarr, managing partner for the U.S. Renewable Energy Group.

In a statement Wednesday, the Energy Department insisted that the wind program does create jobs in the U.S. and said that "suspending it now would cause immediate layoffs of American workers at American manufacturing plants." [ABC News, 3/4/10]

Department Of Energy: Suspending Wind Energy Program Would Have Caused Immediate American Layoffs. From Politico: "'We will work with Congress on any proposal to further improve this program, but suspending it now would cause immediate layoffs of American workers at American manufacturing plants,' said Department of Energy spokeswoman Stephanie Mueller. 'Other countries are not pressing the pause button on clean energy industries and they will move quickly to capture America's share of the global market while we sit on the sidelines.'" [Politico, 3/3/10]

There Was No "Government Takeover Of Health Care"

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]

The Affordable Care Act Strengthens Medicare Without Cutting Benefits

FactCheck.org: Cost Saving Provisions "Not A Slashing Of The Current Medicare Budget Or Benefits." According to FactCheck.org, "Whatever you want to call them, it's a $500 billion reduction in the growth of future spending over 10 years, not a slashing of the current Medicare budget or benefits. It's true that those who get their coverage through Medicare Advantage's private plans (about 22 percent of Medicare enrollees) would see fewer add-on benefits; the bill aims to reduce the heftier payments made by the government to Medicare Advantage plans, compared with regular fee-for-service Medicare. The Democrats' bill also boosts certain benefits: It makes preventive care free and closes the 'doughnut hole,' a current gap in prescription drug coverage for seniors." [FactCheck.org, 3/19/10]

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 PolitiFact.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." [PolitiFact.com, 3/18/10; emphasis in original]

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 Preventive 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.

Medicare "Cuts" Are Actually Savings From Phasing Out "Substantial Overpayment" To Medicare Advantage

CBO: Cost Changes To Medicare Made From Savings. According to the Congressional Budget Office: "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]

New England Journal of Medicine: The Affordable Care Act Phases Out "Substantial Overpayments" To Medicare Advantage Plans. From the New England Journal of Medicine:

A phased elimination of the substantial overpayments to Medicare Advantage plans, which now enroll nearly 25% of Medicare beneficiaries, will produce an estimated $132 billion in savings over 10 years.

[...]

The ACA also produces nearly $200 billion in savings by assuming that providers can improve their productivity as firms in other industries have done. On the basis of this presumed improvement, the law reduces Medicare's annual "market basket" updates for most types of providers - a provision that has generated controversy. [New England Journal of Medicine7/8/10]

Cuts Would Only Affect Medicare Advantage Plans. As reported by Kaiser Health News:

The new health law will cut $136 billion in spending on the Advantage program by 2019, which currently pays private plans to administer Medicare benefits and pays them about 14 percent more than the per-patient cost of the traditional Medicare program. Plans use that subsidy to lure members with lower premium costs or extra benefits not normally paid for by Medicare, such as vision care or better prescription drug coverage. Some Democrats and analysts have argued the higher rates are wasteful. 

Even experts who support the change concede that the impact of the cuts could be evident. Robert Berenson, a scholar at the Urban Institute and former Medicare official, said some Advantage plan members will notice skimpier benefits, "but the Republicans have really exaggerated that this will wipe out the Advantage plans." 

Marsha Gold, a health policy analyst for the private research group Mathematica, said, "Over time, there will be less rich benefits or higher premiums, but it's going to be gradual," noting that the largest cuts do not begin until 2015. 

[Kaiser Health News, 4/6/10]

Medicare Advantage Costs Taxpayers 14% More Than Traditional Medicare. As reported by PolitiFact.com:

Let's back-up for a minute and explain Medicare Advantage: There are two basic ways most people get Medicare coverage. They enroll in traditional Medicare and a prescription drug plan through the government and maybe buy a supplemental policy to cover most out-of-pocket costs. Or they enroll in Medicare Advantage programs (they include drug plans), which are run by private insurers. Medicare Advantage programs typically have more generous benefits such as dental and vision coverage. Some plans even pay the patient's monthly Medicare premium, which can amount to about $100.

The Medicare Advantage program was intended to bring more efficiency from the private sector to the Medicare program, but it hasn't worked as planned. A June 2009 analysis from the Medicare Payment Advisory Commission said that the Advantage programs costs taxpayers on average of 14 percent more than the traditional Medicare plan. President Barack Obama has said repeatedly that the Medicare Advantage plan wastes public money that could be put to better use.

[PolitiFact.com, 9/20/10]

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