Rep. Cantor Keeps Lying About Recovery Act, Health Care Reform

Cantor: Health Care Reform Is "Budget-Busting" And Recovery Act Isn't Working

Rep. Eric Cantor (R-VA): As U.S. households painfully reduced their debt, Congress went on an unprecedented spending binge: adding a budget-busting health care entitlement and pushing through a trillion-dollar "stimulus" that did not create the jobs it promised. [Politico, 5/25/10]

Health Care Reform Reduces Deficits

CBO: Health Care Reform Package Would Reduce The Deficit By $138 Billion By 2019. According to the Congressional Budget Office: "The reconciliation proposal includes provisions related to health care and revenues, many of which would amend H.R. 3590. It also includes amendments to the Higher Education Act of 1965, which authorizes most federal programs involving postsecondary education. CBO and JCT estimate that enacting both pieces of legislation-H.R. 3590 and the reconciliation proposal- would produce a net reduction in federal deficits of $138 billion over the 2010-2019 period as result of changes in direct spending and revenue." [CBO, 3/18/10]

May: Republicans Distort CBO Report On Health Care Reform

Politico: "Republicans Pounced" On May 11 CBO Letter Saying That Health Care Bill Might Cost More Than Expected. According to Politico: "Congressional Budget Office estimates released Tuesday predict the health care overhaul will likely cost about $115 billion more in discretionary spending over ten years than the original cost projections... Republicans pounced on the news, which they called another sign that the Obama administration makes promises it cannot deliver... The CBO released the estimates in response to a request from California Rep. Jerry Lewis, ranking Republican on the House Appropriations Committee." [Politico, 5/11/10]

• House Minority Leader Boehner: CBO Report Shows Democrats Lied. According to Politico, Rep. Boehner said: "The American people wanted one thing above all from health care reform: lower costs, which Washington Democrats promised, but they did not deliver... It was clearly irresponsible for Washington Democrats to force this legislation through Congress without being truthful about its full impact on the nation's finances. Republicans are fighting to repeal this job-killing health care law and replace it with reforms focused first on lowering costs and protecting American jobs." [Politico, 5/11/10]

CBO: Much Of The $115 Billion In Discretionary Spending Is In Fact "A Continuation Of Recent Funding Levels." The CBO clarified its letter of May 11: "The May 11 letter identified possible discretionary spending of at least $115 billion over the 2010-2019 period. Whether that spending will ultimately occur will depend on future appropriation actions. The potential discretionary costs identified in both CBO's earlier analysis and the letters provided on May 11 include many items whose funding would be a continuation of recent funding levels for health-related programs or that were previously authorized and that PPACA would authorize for future years." [CBO, 5/12/10, emphasis original]

OMB: "The Bottom Line Remains The Same." According to Office of Management and Budget Director Peter Orszag:

CBO's tally, which is not included in its estimate of the cost of the law, has led some to erroneously conclude that the law includes more spending and less deficit reduction than CBO has previously reported.

As I have said before and independent analysts have echoed, this is incorrect: 

• Authorizations are just that - they are not spending.That is, they are expressions of what Congress would like to spend money on, not what it will spend money on. This is important since Congress frequently does not fully fund authorizations and many are never funded. As CBO itself says in the letter, authorizations "are subject to future appropriation actions, which could result in greater or smaller costs than the sums authorized by the legislation."
• The President has made a firm commitment to freezing non-security discretionary funding for the next three years - a commitment he has said would be enforced by his veto pen. As a result, any actual new funding would have tofit within this freeze and so would have to be offset by budget cuts elsewhere.
• It is also worth noting that a number of these authorizations - including the largest authorization reported in the CBO letter - are simply new authorizations of spending that already exists. In other words, funding such authorizations does not result in new spending.

The bottom line remains the same: the Affordable Care Act is the largest deficit reduction package enacted in over a decade according to CBO. It will reduce deficits by more than $100 billion in the current decade and more than $1 trillion in the decade after that - and that will not change.

[WhiteHouse.gov, 5/12/10, emphasis added]

STATISTICS SHOW THE RECOVERY ACT IS WORKING

One Year After The Recovery Act, America Is On The Road To Recovery. Below is a graph prepared by the Speaker's office showing job gains/losses per month:

[Office of the Speaker, 5/7/10]

New York Times: April Jobs Numbers Show "The Largest Gain In Four Years." According to theNew York Times: "The Labor Department's monthly snapshot of the job market, released on Friday, showed that employers added 290,000 jobs in April - the largest gain in four years - and that they did so across a broad swath of industries. The United States has now added jobs for four consecutive months." [New York Times, 5/7/10]

AP: "The Nation's Economy Posted Its Largest Job Gain In Three Years In March." According to the Associated Press: "The nation's economy posted its largest job gain in three years in March, while the unemployment rate remained at 9.7 percent for the third straight month. The increase is the latest sign that the economic recovery is sustainable and healing in the job market is beginning." [Associated Press, 4/2/10]

CBO: The American Recovery And Reinvestment Act Has Created Up To 2.4 Million American Jobs. According to CNN: "The Congressional Budget Office attributes between 800,000 to 2.4 million jobs and 1.2 to 3.1 percentage points of economic growth to stimulus." [CNN, 1/13/10]

THE BUREAU OF LABOR STATISTICS UNDERESTIMATED JOB GROWTH IN FEBRUARY AND MARCH

The Economy Created 53,000 More Jobs In February Than Originally Thought. According to the BLS report for April: "The change in total nonfarm payroll employment for February was revised from -14,000 to +39,000, and the change for March was revised from 162,000 to 230,000."  [BLS.Gov, 5/7/10, emphasis added]

The Economy Created 68,000 More Jobs In March Than Originally Thought. According to the BLS report for April: "The change in total nonfarm payroll employment for February was revised from -14,000 to +39,000, and the change for March was revised from 162,000 to 230,000."  [BLS.Gov, 5/7/10, emphasis added] 

THE RECOVERY ACT HAS TURNED THE ECONOMY AROUND

The Economy Grew At 3.2% In The First Quarter Of 2010. According to the Associated Press, "The economy grew at a solid 3.2 percent pace during the first quarter of this year as consumers boosted their spending by the most in three years. The Commerce Department's initial estimate of the economy's performance in the January-to-March quarter, released Friday, provided more evidence that the economy is strengthening. It marked the third straight quarterly gain as the United States heals from the longest and deepest recession since the 1930s. Still, growth was weaker than in the fourth quarter of last year, when the economy grew at 5.6 percent. Consumers rebounded and powered the first-quarter's growth. They increased their spending at a 3.6 percent pace, the strongest showing since early 2007 - before the economy tipped into a recession." [Associated Press, 4/30/10]

The Economy Has Been Growing For Three Straight Quarters.  Below is a graph prepared by the Speaker's office showing GDP growth per quarter:

[Office of the Speaker, 4/30/10]