Fact Checking The Sunday Shows - July 24, 2011

July 25, 2011 10:12 am ET

This week's Sunday shows were largely about the struggle to reach an agreement to raise the debt ceiling. On Fox News Sunday, Speaker John Boehner (R-OH) blamed Obama's policies for "out of control" spending without noting that the wars in Iraq and Afghanistan, the recession, and the Bush tax cuts are the primary drivers of debt and deficits. He also touted the deeply problematic balanced budget amendment. On CNN, Rep. Tom Price (R-GA) claimed that the House-passed GOP budget eliminated all corporate loopholes when it really secures tax breaks for big oil, all while necessitating a middle-class tax hike. Price also minimized the very serious effects of the checks that won't get paid out if the debt limit isn't raised by August 2nd. Later, Tim Pawlenty falsely claimed that President Obama is responsible for tripling deficits within his term. On Face the Nation, Sen. Jon Kyl (R-AZ) wrongly said that spending alone is the problem driving deficits. Finally, on Meet the Press, Sen. Tom Coburn (R-OK) justified the GOP's efforts to obstruct debt ceiling negotiations by distorting credit rating agencies' warnings, and then blamed Democrats for the GOP-driven politicization of a Federal Aviation Administration funding bill.

Fox News Sunday

CLAIM: Speaker Boehner Cited The Recovery Act, Health Care Reform To Claim Spending Has Gotten Out Of Control In The Last Two Years

SPEAKER JOHN BOEHNER: I think it is important that we deal with our long-term problem. It's serious. Washington spending has been out of control. And what has happened over the last two years really shows how much out of control it got. Trillion-dollar stimulus plan, a health care plan that we can't afford, all of this extra spending that has not worked. And the spending binge has to stop. And our efforts all year have focused on trying to stop it.

FACT: Two Wars, Bush Tax Cuts And A Recession — Not The Recovery Act Or Health Care Reform — Are The Major Drivers Of Current And Long-Term Deficits

CBPP: Present "Huge Deficits" Due To Bush Tax Cuts, Wars, And Recession. As the Center for Budget and Policy Priorities explains: "If not for the Bush tax cuts, the deficit-financed wars in Iraq and Afghanistan, and the effects of the worst recession since the Great Depression (including the cost of policymakers' actions to combat it), we would not be facing these huge deficits in the near term." [CBPP.org, 5/10/11]

The Center for Budget and Policy Priorities prepared the following graphic showing that the Bush tax cuts and wars in Iraq and Afghanistan will account for nearly half of public debt by 2019:

Public Debt

[CPBB.org, 5/20/11]

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


[CBPP.org, 5/10/11]

Continuing Bush Tax Cuts Doom The Long-Term Fiscal Picture. As the Tax Policy Center's William Gale has explained: "The deficits we face over the next decade reflect a fundamental imbalance between spending and revenue, one that goes beyond entitlements. Based on projections by the CBO, Alan Auerbach of the University of California at Berkeley and myself, among others, even if the economy returns to full employment by 2014 and stays there for the rest of the decade, the continuation of current fiscal policies, including the Bush tax cuts, would lead to a national debt in the range of 90 percent of GDP by 2020. That's already the highest rate since just after World War II -- and Medicare, Medicaid and Social Security aren't expected to hit their steepest spending increases until after 2020." [Washington Post8/1/10]

FACT: Health Care Reform Reduces The Deficit

CBO: Health Care Reform Repeal Would Increase The Deficit By $230 Billion. In a letter to Speaker John Boehner (R-OH), CBO Director Doug Elmendorf writes:

Because CBO and JCT estimated that the March 2010 health care legislation would reduce budget deficits over the 2010-2019 period and in subsequent years, we expect that repealing that legislation would increase budget deficits. The resulting increase in deficits projected for fiscal years 2012 through 2019 is likely to be similar in size to-but not exactly the same as-the reduction in deficits that was originally estimated to result from the enacted legislation. [...]

As a result of changes in direct spending and revenues, CBO expects that enacting H.R. 2 would probably increase federal budget deficits over the 2012-2019 period by a total of roughly $145 billion (on the basis of the original estimate), plus or minus the effects of technical and economic changes that CBO and JCT will include in the forthcoming estimate.Adding two more years (through 2021) brings the projected increase in deficits to something in the vicinity of $230 billion, plus or minus the effects of technical and economic changes. [CBO, 1/6/11, emphasis added]

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]

CLAIM: Speaker Boehner Claimed A Balanced Budget Amendment Is The "Greatest Enforcement Mechanism" For Bringing Spending Under Control

REP. JOHN BOEHNER: I continue to believe that a balanced budget amendment is the greatest enforcement mechanism to bring Washington spending under control.

FACT: A Balanced Budget Amendment Would Make It Harder To Balance The Budget

House Version Of Balanced Budget Amendment Requires Two-Thirds Majorities In House And Senate To Raise Taxes. Section 4 of H.J.Res. 2 reads: "Section 4. No bill to increase Federal taxes shall become law unless approved by two-thirds of the duly chosen and sworn Members of each House of Congress by a rollcall vote." [H.J. Res. 2, 1/5/11]

In 1995, A Balanced Budget Proposal Was Introduced With A Similar Requirement. Section 2 of H.J. Res. 1 reads: "SECTION 2. No bill to increase tax revenue shall become law unless approved by a three-fifths majority of the whole number of each House of Congress." [H.J.Res. 1, 1/18/95]

Several States Have Enacted Supermajority Requirements For Tax Increases. As the Cato Institute explained in a 1996 report: "Requiring a three-fifths or two-thirds majority in both the House and the Senate to pass a tax increase would allow Congress to pass tax hikes in cases of national emergency but would make it very difficult for Uncle Sam to continue the annual ritual of peacetime tax hikes. Several states, including Arizona, California, and Oklahoma, have enacted such measures; they have stopped tax increases dead in their tracks. As one Arizona taxpayer advocate of the supermajority requirement recently told me, 'Now the legislature doesn't even bother to propose new taxes.'" [Cato Institute, July-August 1996]

Arizona, California, and Oklahoma Are Facing Huge Budget Crises

Arizona: "At the start of this fiscal year, on July 1, 2010, Arizona was looking at a deficit of about $3.4 billion. The cyclical deficit was around $1.2 billion and the structural deficit was $2.1 billion. As a percentage of the budget, Arizona has a 33 percent deficit with 12 percent of that cyclical and 21 percent of it structural." [Inside Tuscon Business1/21/11, emphasis added]

California: "California's nonpartisan legislative analyst says the state's budget deficit has grown to$25.4 billion and is now more than a fifth of the general fund." [Huffington Post, 11/10/10, emphasis added]

Oklahoma: "Only a few months removed from being declared 'recession-proof' by the national press, Oklahoma faces the largest state budget deficit in the nation, according to a report by the National Conference of State Legislatures....Through the first five months of the current fiscal year, Oklahoma's general revenue fund receipts are 28.5 percent below the same period a year ago and 24.3 percent below projections - a shortfall of $577.5 million." [Tulsa World, 12/20/09, emphasis added]

Supermajority Vote To Increase Taxes Makes It Harder To Balance Budget. In an op-ed in US News and World Report, former Rep. Boehner staffer Scott Galupo wrote: "The amendment's additional requirement of a supermajority vote - two-thirds of both the House and Senate - to increase taxes gives the game away: If you're serious about balancing the budget, why would you make it much harder for Congress to balance the budget?" [US News and World Report8/10/10, emphasis added]

  • Without Higher Taxes, "We Would Have To Eliminate Every Discretionary Spending Program" To Balance The Budget. According to an op-ed by Bruce Bartlett in the Fiscal Times: "It's doubtful that BBA supporters really understand the composition of federal spending. In fiscal year 2009, we would have had to abolish every discretionary spending program, including national defense, to balance the budget and that still wouldn't have been enough without higher revenues. We would have had to cut more than $300 billion out of Medicare and Social Security as well." [Fiscal Times8/27/10, emphasis added]

FACT: The Balanced Budget Amendment Is "Effectively Unenforceable"

Former Reagan Adviser: The Balanced Budget Amendment Is "Effectively Unenforceable." According to Bruce Bartlett, a former domestic policy adviser to President Reagan:

There is no explanation for how a balanced budget amendment would be enforced. Perhaps Republicans just assume that public opinion will be sufficient. But the reality is that for such an amendment to be operational and not just a meaningless expression of intent, there has to be a point in the budgetary process when the federal courts can enjoin spending or force tax increases. This is obviously a very bad idea in principle, but it's also impractical. As a legal matter, we would have no way of knowing that the budget was in fact unbalanced until the fiscal year had ended. Even a federal court can't make people give back federal funds that have already been paid out for interest on the debt, Social Security and Medicare benefits, wages and salaries for government workers, payments for goods and services, etc. Thus a balanced budget amendment of the sort Republicans propose is effectively unenforceable. [Fiscal Times8/27/10, emphasis added]

Former Reagan Adviser: Amendment Could Keep United States In "Perpetual State of War." According to Bruce Bartlett, a former domestic policy adviser to President Reagan: "I can easily foresee the U.S. in a perpetual state of war to avoid the necessity of balancing the budget. This being the case, Republicans should ask themselves if they really want the Constitution of the United States to be treated in such a frivolous manner. If we pass an amendment that we know in advance is unenforceable, doesn't that debase the Constitution itself?" [Fiscal Times8/27/10]

There Are Numerous Ways To Circumvent A Balanced Budget Amendment. According to a CBO report on a balanced budget amendment from 1982: "Assuming that the prohibitions were effective in preventing deficits and checking expenditure growth, those desiring new or enlarged programs could resort to mechanisms outside the unified budget. Four such routes are regulation, government-sponsored corporations, off-budget agencies, and guaranteed loans." [CBO, September 1982]

A Balanced Budget Amendment Would Be Self-Defeating, Causing A Loss Of "Congressional Authority." According to the Congressional Budget Office:

The adoption and implementation of a balanced budget rule or an expenditure limitation would result in loss of Congressional authority in two ways. First, these proposals, by their very nature, seek to reduce Congressional flexibility in budget-making. As previously stated, many critics of the present budget process see flexibility, particularly in determining fiscal policy, as the cause of many of America's economic problems. Others see fiscal policy as a central function of government, whatever are the imperfections in implementing it.

Second, a stringent budget rule would, in all probability, shift the responsibility for economic policy from the Congress to the Federal Reserve, the courts, and/or the President, or all three. As discussed in Chapter V, under a balanced budget rule, fiscal policy would largely be removed as a tool of discretionary economic policy, with increasing reliance placed on monetary policy. As such, Congressional authority over economic policy would decline while that of the Federal Reserve would increase. Under these circumstances, the Congress might choose to exert greater control over the Federal Reserve." [CBO, September 1982]

Congress Could "Fudge" The Numbers In Order To Have A Higher Budget. According to economist Charles L. Schultze: "To the objection that Congress could fudge the 'high employment' budget estimates, I ask: Why swallow a camel and strain at a gnat? To operate under this amendment, Congress must make many estimates and provide a myriad of interpretations--all of which could be fudged." [National Tax Journal, "The Balanced Budget Amendment: Needed? Effective? Efficient?" September 1995]

For more on why a balanced budget amendment would hurt our country, read our full fact check HERE.

State of the Union

CLAIM: Rep. Price Claimed The House-Passed GOP Budget "Dealt With All Of The Corporate Loopholes" And Lowered Rates For Individuals

REP. TOM PRICE: As you know, our budget that we passed in the spring dealt with all of the corporate loopholes that the president now champions to want to do away with it.  Our budget did away with those but we did away with them in a manner that allows for fundamental tax reform so that you get the whole situation fixed and solved. We're not interested in just doing little bites at the apple, little nips at the side, because that is not what is going to get this crisis solved. So, yes, our budget actually took away those corporate loopholes and all of that and broadened the base for tax reform, lowered the rates for individuals so that we can get this economy growing and creating jobs, because that's really the key, we have got to grow our way out of this challenge. 

FACT: The GOP Budget Protects Big Oil Tax Loopholes While Lowering Corporate Tax Rate

The GOP Budget Locks In $40 Billion In Tax Giveaways To Big Oil Companies. From the Center for American Progress:

House Budget Committee Chair Paul Ryan's (R-WI) proposed FY 2012 budget resolution is a backward-looking plan that would benefit big oil companies at the expense of middle-class Americans. It retains $40 billion in Big Oil tax loopholes while completely eliminating investments in the clean energy technologies of the future that are essential for long-term economic growth. [...]

Ryan's plan would continue "welfare" for big oil companies. Ryan was asked several times in a recent interview whether his plan would "eliminate tax breaks for Big Oil," but he refused to answer. Evading an uncomfortable question was his acknowledgment that his budget hatchet leaves Big Oil tax breaks untouched. This is consistent with his recent vote to keep Big Oil tax loopholes as part of the FY 2011 spending bill, while cutting education, medical research, and clean-tech investments.

In addition to receiving $40 billion of unnecessary tax breaks, Big Oil does not pay its fair share of royalties for oil and gas produced from publicly owned waters. The Government Accountability Office estimates that a loophole in a 1990s oil-and-gas law could deprive the treasury of $53 billion in lost royalties. In February, the House Republicans overwhelmingly voted against recovering these royalties. Although Ryan's budget claims that it "stops spending money the government doesn't have," it does nothing to recoup these forgone funds. This is another gift for Big Oil, paid for by middle-class taxpayers who must suffer the consequences of other steep spending cuts. [Center for American Progress, 4/6/11, emphasis added]

The GOP Budget Reduces Corporate Tax Rate To 25 Percent. As reported by the Huffington Post: "Ryan believes tough choices have to be made now rather than under duress in the midst of a crisis. But he was roundly criticized from the left Tuesday for not raising taxes; he would lower the top income and corporate rates from 35 to 25 percent." [Huffington Post4/6/11]

For more on the taxes U.S. corporations do and don't pay, click HERE.

FACT: The GOP Budget Would Necessitate A Middle-Class Tax Hike

The GOP Budget Relies On "Shifting More Of The [Tax] Burden To Working And Middle-Class Americans." According to Jay Bookman of the Atlanta Journal-Constitution: "Among other things, [Ryan] proposes to reduce the number of tax brackets from the current six, which would make the income tax flatter and less progressive. He also intends to lower the top tax bracket on individuals and corporations from the current 35 percent to 25 percent. Inevitably, such changes would have the effect of lowering taxes on corporations and the wealthy, while shifting more of the burden to working and middle-class Americans. When combined with the payroll tax, which Ryan concedes is a surtax on earned income below $106,000, a large number of working class and middle-class Americans would probably end up paying a significantly higher percentage of their income in federal taxes than their wealthier counterparts." [Atlanta Journal-Constitution4/6/11, emphasis added]

The GOP Plan "Makes A Middle-Class Tax Hike Unavoidable." From the Center for American Progress:

Rep. Ryan's budget simply doesn't describe exactly how his tax plan would work, instead resorting to broad bullet points that conveniently skip over important details. [...] Which brackets are going to be consolidated? What will the new rate structure be? Which tax expenditures will be eliminated? Which will be limited and how? Rep. Ryan doesn't tell us. There is no plan here.

That's probably on purpose since any detailed description of his ideas for tax "reform" would reveal a massive tax hike for the middle class. For Rep. Ryan to cut the top rate by nearly one-third and still keep tax revenue the same as it would have been under President's Bush [sic] tax-cut regime means he's going to have to raise taxes somewhere else. And though he pointedly refuses to tell us where those tax hikes will come from, we can make an educated guess.

For one thing, the basic math makes a middle-class tax hike unavoidable. The rate cut at the top, of course, benefits only those in the top brackets (the richest 2 percent of Americans), but to pay for this, Rep. Ryan says he will "broaden the tax base." Broadening the tax base means removing some tax expenditures that currently benefit both the middle class and the rich-though remember that the rich are getting a huge rate cut. [Center for American Progress, 4/5/11]

CLAIM: Rep. Price Claimed "There's Enough Resources" To Pay Government Obligations "Through A Short Term" Without Raising The Debt Ceiling

REP. TOM PRICE: The question is what doesn't get paid? And that's where the president has, I think, sadly put fear into this equation and saying that seniors won't get their Social Security checks or that active duty military personnel won't be paid. There's no reason for that kind of discussion because there's enough resources to be able to get us through a short-term.

FACT: There's Only Enough Revenue For About Half Of The Treasury Department's Obligations

If August 2nd Arrives Without An Agreement To Raise The Debt Limit, 40-45 Percent Of Obligations Will Go Unpaid. According to CNNMoney:

So it's worth reviewing just what the fallout could be if lawmakers fail to act on time -- either in early August or sooner if markets start to lose confidence that Congress will get its act together.

Nearly half of all government checks won't be paid: The Treasury Department would be unable to pay between 40% and 45% of the 80 million payments it needs to make every month, according to an analysis by the Bipartisan Policy Center.

Why? It's basic math: The United States doesn't bring in enough revenue to pay all its bills -- with monthly deficits averaging $125 billion. [CNNMoney, 7/13/11, emphasis original]

If Social Security Checks Are Paid, Other Checks Won't Be. According to CNNMoney: "Millions won't be paid: Just whose payments will be delayed is the question. And the answer won't come easy because any choice will hobble parts of the economy and anger large groups of Americans. Take Aug. 3 as an example. Treasury is due to send out checks to 29 million Social Security recipients. Of course, they may be paid but only if others are not." [CNNMoney, 7/13/11, emphasis original]

States "Lose Big" If The Debt Ceiling Isn't Raised. According to the Center for American Progress:

Each year the federal government funds hundreds of billions of dollars in state services. These include employment and training programs, emergency fire services for rural communities, hazardous waste removal, wildlife conservation, health care services, and even programs to provide bulletproof vests to local law enforcement, to name a few. In fact, state governments rely on the federal government for between 25 percent and 50 percent of their revenue. These services will find themselves on the chopping block if the debt ceiling is not raised.

We don't know which state programs would be cut, but the Bipartisan Policy Center, or BPC, has outlined two scenarios for how the Treasury Department might prioritize payments for certain programs over others if the debt ceiling isn't raised. In the first, Treasury prioritizes payments on big-ticket items such as Social Security, Medicare, Medicaid, and defense. In the second, Treasury still protects Social Security, Medicare, and Medicaid, but swaps out defense for important safety net programs such as food stamps and special education grants.

States stand to lose big under either scenario. [Center for American Progress, 7/20/11]

Failure To Raise The Debt Limit Would Necessarily Mean Cutting Essential Programs. According to The Atlantic:

Lots of folks want to cut spending, and when it's pointed out that this would be painful, they retort that there's plenty of money for debt service, military payrolls, Social Security, Medicare, and Medicaid, and that therefore, people like me are just scaremongering about the consequences of refusal to raise the ceiling.  I put up this graph last week, because I don't think people are really thinking this true.  They've got this big "spending" basket in their head, but they're not focusing on the line items. [...] Let's think through what would happen if we tried to use this plan:

  • You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.
  • The nation's nuclear arsenal is no longer being watched or maintained
  • The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity, etc.
  • The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country. All the illegal immigrants currently in detention are released, since we don't have the money to put them on a plane, and we cannot actually simply leave them in a cell without electricity, sanitation, or food to see what happens.
  • All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the US.
  • Our embassies are no longer operating, which will make things difficult for foreign travellers
  • No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!
  • Housing projects shut down, and Section 8 vouchers are not paid. Families hit the streets.
  • The money your local school district was expecting at the October 1 commencement of the 2012 fiscal year does not materialize, making it unclear who's going to be teaching your kids without a special property tax assessment.
  • The market for guaranteed student loans plunges into chaos. Hope your kid wasn't going to college this year!
  • The mortgage market evaporates. Hope you didn't need to buy or sell a house!
  • The FDIC and the PBGC suddenly don't have a government backstop for their funds,which has all sorts of interesting implications for your bank account.
  • The TSA shuts down. Yay! But don't worry about terrorist attacks, you TSA-lovers, because air traffic control shut down too. Hope you don't have a vacation planned in August, much less any work travel.
  • Unemployment money is no longer going to the states, which means that pretty soon, it won't be going to the unemployed people. [The Atlantic, 7/20/11]

CLAIM: Tim Pawlenty Claimed President Obama Tripled The Deficit

TIM PAWLENTY: I do want to say, let's remember how we got here. President Obama took office with a $500 billion or so deficit, and he ran it up the deficit to $1.5 trillion -- excuse me, $1.5 trillion.

CANDY CROWLEY (HOST): Can I just interject that he inherited two wars. He inherited an ongoing prescription drug plan that was passed under the Bush administration, and a recession that went deeper and deeper. 

PAWLENTY: The two wars were taking place under President Bush at a larger level in Iraq. So, again, when President Bush left office there was a $500 billion deficit. Now it's about $1.5 trillion under President Obama's watch. He tripled the deficit of this country. 

He looked the American people in the eye in March of 2009 after he knew full well about the wars, after he knew full well about the economic collapse, after he knew full well about the Medicare Part D prescription drug expansion, and he looked the American people in the eye and said, I will reduce the deficit in half in my first term, and then he looked and he tripled it. 

FACT: President Obama Inherited A Projected Deficit Of $1.2 Trillion

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]

Conservative Cato Institute: Assertion That Obama Exploded Deficits "Is Largely Untrue" Because Most 2009 Spending Was Done By Bush Administration. From the Cato Institute's Cato-At-Liberty blog: "In addition to being theoretically misguided, critics sometimes blame Obama for things that are not his fault. Listening to a talk radio program yesterday, the host asserted that Obama tripled the budget deficit in his first year. This assertion is understandable, since the deficit jumped from about $450 billion in 2008 to $1.4 trillion in 2009. [...] But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this makes sense to a casual observer, it is largely untrue. The 2009  fiscal year began October 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while Bush was in the White House. So is [sic] we update the chart to show the Bush fiscal years in green, we can see that Obama is partly right in claiming that he inherited a mess (though Obama actually deserves a small share of the blame for Bush's last deficit since earlier this year he pushed through both an "omnibus" spending bill and the so-called stimulus bill that increased FY2009 spending)." [Cato-At-Liberty.org, 11/19/09, emphasis added]

Before President Bush Took Office, There Was A Projected Surplus Of $128 Billion. As reported by CNN: "President Bush inherited a budget surplus of $128 billion when he took office in 2001 but has since posted a budget deficit every year." [CNN.com, 7/28/08]

President Obama's Budget Proposal Would Have Achieved Deficit Reduction "Very Close To What The President Claimed." According to FactCheck.org: "Obama claimed that his budget proposal fulfills his campaign promise 'to cut the deficit in half by the end of my first term.' [...] According to the budget proposal, the deficit at the end of Obama's first term in fiscal year 2013 would be $768 billion. That's about a 46 percent decrease from the actual $1.4 trillion deficit at the end of fiscal year 2009. That's very close to what the president claimed. [...] It remains to be seen what the deficit and publicly held debt will total in 2013. But based on current projections, the president is on track to keep his promise." [FactCheck.org, 2/16/11]

Face the Nation

CLAIM: Sen. Kyl Claimed That Spending Alone "Is Our Problem Here"

SEN. JON KYL: A part of the problem is, as you point out is, if you look at the public opinion surveys the majority of Americans don't want us to raise the debt ceiling. What the Republican leadership has said is, look, it's got to be raised but perhaps we can satisfy the large majority of American public by accompanying that with large reductions in spending. Spending is our problem here. And if we can show them that we can substantially reduce spending then maybe we can go ahead and— and make this debt ceiling extension without too much political repercussion.

FACT: Low Revenues Are Also A Problem

Revenues Are At Their Lowest Level Since 1950. According to the Washington Post

Sure enough, the historical White House budget tables show that receipts (ie, taxes) in 2011 are estimated to be just 14.4 percent of GDP — the lowest level since 1950. But outlays (ie, spending) in 2011 are estimated to be 25.3 percent of GDP — the highest level since World War II. That yawning gap is the key reason why the deficit is so large—and why Republican claims that there is "no revenue problem" are worthy of a couple of Pinocchios.

The recession, of course, is a major reason why revenue has fallen so much — and why spending has soared. Obama came into office claiming he would roll back President George W. Bush's taxes for the top 2 percent of wage-earners, which would have helped with some of the revenue gap, but then he cut a deal last year with Republicans that extended the cuts for two years. [Washington Post4/14/11]

TPM: As A Percentage Of GDP Revenue Has Fallen Over The Last Decade. From Talking Points Memo:

We took the numbers and put them in a slightly different context, so you can see by what percentage spending and revenues have risen and fallen on a population adjusted basis over the last decade. Makes it pretty clear what is and is not the culprit of deficits and our supposedly out-of-control spending.

Description: TPM

[Talking Points Memo7/4/11]

Krugman: "Revenue Has Plunged." According to Paul Krugman's New York Times blog:

For all those commenters saying that we must have had a surge in government spending — I mean, look at the deficit! — a simple picture:

Description: krugman

Government spending has continued to rise more or less on its pre-crisis trend. Revenue has plunged, because the economy is deeply depressed. [New York Times10/17/10]

FACT: The American People Support A Combination Of Raising Taxes And Cutting Spending

CNN/ORC Poll: 64 Percent Favor A Combination Of Spending Cuts And Tax Increases. From a July 18-20, 2011, CNN/ORC International poll:

CNN/ORC poll

[CNN/ORC International, 7/21/11]

PolitiFact: "People Don't Like Taxes, But They Are Often Okay With Increasing Specific Taxes Or Closing Loopholes." According to a PolitiFact article rating a similar claim by Speaker John Boehner (R-OH): "In conclusion, Boehner said that 'the American people don't want us to raise taxes.' In fact, polls indicate that people don't like taxes, but they are often okay with increasing specific taxes or closing loopholes. Additionally, when it's time to make hard decisions about the budget, they favor a balanced approach of spending cuts and tax increases. Finally, they tend to favor tax increases for other people - such as the wealthy or corporations - if not themselves. Overall, we rate his statement Barely True." [PolitiFact, 6/29/11]

PolitiFact: "A Number Of Polls" Show People Want The Government To Raise Taxes On The Wealthy And Corporations. According to PolitiFact:

Still, we found a number of polls that indicate people do want the government to raise taxes. That was most clearly the case when it comes to raising taxes on the wealthy and on corporations.

Several polls ask people if taxes should be increased on people who make more than $250,000. Polls show substantial majorities support the idea. We found majorities of 72 percent, 64 percent, and 59 percent. (Those are from April polls by ABC News/Washington Post, McClatchy-Marist, and USA Today/Gallup, respectively.) 

On whether corporations pay enough in taxes, Gallup found that 67 percent said they pay too little. [PolitiFact, 6/29/11]

AEI Senior Fellow: "Generally, Combinations Of Tax Hikes And Spending Cuts Are Most Popular." According to PolitiFact: "We turned to Karlyn Bowman, a senior fellow at the conservative American Enterprise Institute, who studies polling and has conducted a review of polls on taxation. We asked her, why the contradiction? Here's what she had to say: 'Generally, combinations of tax hikes and spending cuts are most popular. It seems fair to most people. Spending cuts are favored in the abstract. Tax hikes are favored as long as they don't affect me. Generally, people don't think anybody should have to pay more than a quarter of their income in total taxes.'" [PolitiFact, 6/29/11]

Meet the Press

CLAIM: Sen. Coburn Justified GOP Obstructionism By Claiming Raising The Debt Ceiling Without "Making Fundamental Changes" Will Risk The Country's AAA Rating

DAVID GREGORY (HOST): But I want to talk about the here and now, which is a failed political system at the moment, and what you heard from Mr. Daley, very difficult days in the financial markets and a lack of confidence around the world at the United States' creditworthiness and its ability to reach some kind of consensus. Does that not have to create a breakthrough along the lines of what the president is talking about? Cuts that are large enough and an extension of the debt ceiling that's long enough to say to the markets, you know, "You can count on the United States."

SEN. TOM COBURN: I don't agree with that because, if you give an extension of $2.4 trillion to this president and this administration, which is — has policies that have actually hurt our recovery, I think you actually hurt the possibility of keeping our AAA rating without making the fundamental changes that have to come to this government.

FACT: Credit Agencies Call For Decrease In Debt-To-Revenue Ratio, Not For "Fundamental Changes"

S&P Sees $4 Trillion Deficit-Reduction Package As Sufficient To Maintain U.S. Credit Rating. From a Standard & Poor's report: "Congress and the Administration are debating various fiscal consolidation proposals. At the high end, budget savings of $4 trillion phased in over 10 to 12 years proposed by the Adminstration [sic], (separately) by Congressional leaders, as well as by the Fiscal Commission in its December 2010 report, if accompanied by growth-enhancing reforms, could slow the deterioration of the U.S. net general government debt-to-GDP ratio, which is currently nearing 75%. Under our baseline macroeconomic scenario, net general government debt would reach 84% of GDP by 2013. (Our baseline scenario assumes near 3% annual real growth and a post-2012 phaseout of the December 2010 extension of the 2001 and 2003 tax cuts.) Such a percentage indicates a relatively weak government debt trajectory compared with those of the U.S.' closest 'AAA' rated peers (France, Germany, the U.K., and Canada). We expect the debt trajectory to continue increasing in the medium term if a medium-term fiscal consolidation plan of $4 trillion is not agreed upon. If Congress and the Administration reach an agreement of about $4 trillion, and if we to conclude that such an agreement would be enacted and maintained throughout the decade, we could, other things unchanged, affirm the 'AAA' long-term rating and A-1+ short-term ratings on the U.S." [StandardAndPoors.com, 7/14/11, emphasis added]

S&P "Takes No Position" On Role Of Spending Cuts, Tax Increases In Achieving Agreement. From a Standard & Poor's report: "Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might agree on. But for any agreement to be credible, we believe it would require support from leaders of both political parties." [StandardAndPoors.com, 7/14/11]

Moody's Review "Prompted By The Possibility That The Debt Limit Will Not Be Raised In Time." From a Moody's report:


The review of the US government's bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default.

Moody's considers the probability of a default on interest payments to be low but no longer to be de minimis. An actual default, regardless of duration, would fundamentally alter Moody's assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate. [Moodys.com, 7/13/11, emphasis added]

"Moody's Does Not Take A Position" On How To Do It But Wants "Debt To Revenue" Ratio Lowered. From a Moody's report:

While the debt limit has been raised numerous times in the past, and sometimes the issue has been contentious, bond interest and principal have always been paid on time. If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.

Moody's does not take a position on what measures should be included in any deficit reduction package. Instead, it is the resultant deficit and debt trajectories that are relevant to the rating and its outlook. [Moodys.com, 7/13/11, emphasis added]

FACT: Even Coming Close To Default Would Harm Investor Confidence And Economic Recovery

Plans To Avoid Default Without Raising Debt Ceiling Sound Good But Would Undermine Economy. From the Washington Post's Ezra Klein: "In short, [Rep. Michele Bachmann's] plan is that we don't raise the debt ceiling, but we use the revenue still coming in to pay off creditors first and whatever we think most important second. That way, we 'don't violate our credit rating' and 'prioritize our spending.' Makes perfect sense. At least, it makes perfect sense unless you, like me, had spent the previous few days talking to economists, investors and economic policymakers about what could happen if we start playing games with the debt ceiling. Their answers were across-the-board apocalyptic. If the U.S. government is so incapable of solving its political problems that it can't come to an agreement on the debt ceiling, they said, that's basically the end of the United States as the world's reserve currency. We won't be considered safe enough to serve as the investment of last resort. We would lose the most important advantage our economy has in the global financial system - and we'd probably lose it forever. Skyrocketing interest rates would slow our economy and, in real terms, make it even harder to pay back our debt, which would in turn send interest rates going even higher. It's an economic death spiral we associate with third-world countries, not with the United States." [Washington Post4/20/11, emphasis added]

Zandi: High Investor Confidence In Long-Term Value Of U.S. Debt Is "Cornerstone" Of Global Economy. As reported by Ezra Klein of the Washington Post: "'The cornerstone of the global financial system is that the United States will make good on its debt payments,' says Mark Zandi, chief economist at Moody's Analytics. 'If we don't, we've just knocked out the cornerstone, and the system will collapse into turmoil.' Throughout the financial crisis, America's great advantage was its status as the single safest investment in the world. That makes it easier for us to borrow money to ease a downturn. It makes it easier for our central bank to buy bonds to keep interest rates low. It gives us tools and flexibility that, say, Greece simply doesn't have. But all of that is based on the market's perception that our debt is, indeed, a safe investment, that we will pay it back, that we won't inflate our way out of the fiscal holes we dig, that our political system will make tough decisions when necessary." [Washington Post4/19/11, emphasis added]

Just By Coming Close To Default, Congress Would Rattle Investor Confidence In Loaning To U.S. As reported by Ezra Klein of the Washington Post: "By taking the debt ceiling hostage in a bid to address the deficit, Congress could provoke the exact calamity it's seeking to prevent. What we worry about when we worry about the deficit is that the market will lose confidence in our ability to pay back our debts and begin charging more to buy Treasuries. There's no quicker way to undercut the market's confidence in the U.S. government than for it walk up to the abyss of default. The likeliest disaster here will not be caused by Congress refusing to raise the debt ceiling. And, Geithner says, Congress will raise the debt ceiling. Eventually. But there'll be a lot of partisan posturing between now and then. In 2006, then-Senator Barack Obama lodged a protest vote against an increase in the debt ceiling - a vote he's since called 'a mistake.' Our economy, however, is weaker than it was then, our deficits are more worrying and the markets are more fragile. So the normal congressional bickering could prove especially dangerous." [Washington Post4/19/11, emphasis added]

Even Without Default, Delay In Debt Ceiling Hike Could Harm Economic Recovery. As reported by the Fiscal Times: "The government will bump up against the $14.3 trillion annual debt ceiling sometime around mid-May. The Treasury Department has a number of accounting and borrowing strategies that can postpone running out of cash for several additional months. And that has many of the business economists who monitor events in Washington fretting that the fragile economic recovery -estimates for economic growth in the just concluded first quarter are being ratcheted down to as low as 1.5 percent - could be aborted if Republican leaders in Congress and the White House engage in three months of brinkmanship before reaching an accord." [Fiscal Times4/19/11, emphasis added]

Bipartisan Policy Center Analyst: Failure To Raise Debt Limit Will Cause Interest Rate Hikes That "Would Cause A Double Dip" Recession. As reported by the Fiscal Times:

A sell-off of government bonds along the lines already pursued by PIMCO, whose founder, Bill Gross, said he exited the U.S. Treasury market earlier this year, would depress bond prices and raise rates, which go up when bond prices go down. "Bond traders are a spooky bunch," said Steve Bell, a budget analyst at the Bipartisan Policy Center who spent years on Capitol Hill as well as 10 years trading bonds for the now defunct Salomon Brothers.

"If they start playing games with the debt ceiling like passing a number of short-term extensions, you'll see people exiting the market despite their desire for safety."

He estimated failure to increase the debt ceiling could raise long-term rates by 1 ½ to 2 percentage points over the next six months. "Housing is flat on its back now," Bell said. "Could you imagine what would happen if small and medium-sized businesses had to pay 2 to 3 percentage points more, or credit card debt or the rate you pay for your car went up. It seeps into every type of economic activity. It would cause a double dip." [Fiscal Times4/19/11, emphasis added]

CLAIM: Sen. Coburn Claimed FAA Furloughs Are Because Democrats "Want To Continue To Subsidize Irresponsible And Wasteful Behavior"

SEN. TOM COBURN: You know what's holding up the FAA program? Is Essential Air Services where the American people are paying $1,000 a ticket in subsidy to people that are riding from airports with six passengers on a plane when they could drive an hour and a half and get an airplane, and we wouldn't be paying the $1,000. So it's continued waste and duplication in the federal government and they won't approve the FAA because they continue to want to subsidize irresponsible and wasteful behavior.

FACT: Fight Over FAA Funding Bill Originated When GOP Tacked On An Anti-Union Provision

House Republicans Added A Provision To The FAA Funding Bill To Make Unionizing More Difficult. According to the Associated Press:

The root of the dispute is a labor provision in a long-term FAA funding bill passed by the House in April. The Republican-sponsored provision would make it more difficult for airline and railroad workers to unionize by overturning a National Mediation Board rule approved last year. It allows employees in those industries to form a union by a simple majority of those voting. Under the old rule, workers who didn't vote were treated as "no" votes.

Senate Democrats, who passed their own long-term FAA funding bill in February without the labor provision, have insisted that the labor issue be removed from any final bill. [Associated Press, 7/19/11, via CBS Atlanta]

  • Congress Has Previously Extended The FAA's Funding "Almost 20 Times Without Controversy." According to CNN: "Transportation officials said Congress has extended the FAA's funding almost 20 times without controversy. Without new legislation, the government also will not collect about $200 million a week in airline taxes that normally go to the Airport and Airway Trust Fund." [CNN, 7/22/11]

FACT: Essential Air Services Funding Is Only "A Small Fraction Of The Nation's Spending"

House GOP Tacked On To "Routine" FAA Funding Bill A Measure Cutting $16.6 Million In Subsidies To Airports In Small States. According to the Wall Street Journal: "The Republican-controlled House passed a measure Wednesday largely on party lines that would cut about $16.6 million in funding annually for airports in thinly populated states including Nevada, Montana, West Virginia and New Mexico. [...] The measure was attached to an otherwise routine bill to reauthorize the taxing and spending powers of the Federal Aviation Administration through mid-September. The Senate was working on its own version that excluded the rural-airports cuts." [Wall Street Journal, 7/21/11]

Republicans Concede $16.6 Million Is Only "A Small Fraction Of The Nation's Spending." According to the Wall Street Journal: "House Republicans said that though the measure amounts to only a small fraction of the nation's spending, it was an important gesture to show the public that Congress is serious about tackling the federal deficit. Senate Democrats said the measure would effectively cut off air service from large swaths of the country, hurting the economies of many less populated states." [Wall Street Journal, 7/21/11]