Fact Checking The Sunday Shows - August 7, 2011
The highlight of yesterday's Sunday political talk shows was Rep. Paul Ryan's (R-WI) deceptive performance on Fox. Ryan misled on a range of topics, from the causes of the S&P downgrade of U.S. debt, to the drivers of that debt, to President Obama's policy positions, to the reasons businesses aren't expanding today, with plenty of stops in between. By comparison, Sen. John McCain's (R-AZ) dishonesty about Afghanistan and Social Security, Sen. Lindsey Graham's (R-SC) bogus economic statistics, and Sen. Jeff Sessions' (R-AL) deceit on deficits under President Bush and Democrats' willingness to cut spending were barely even blips on the radar.
REP. PAUL RYAN: This is not a Republican- or Democrat-only problem, both parties got us to where we are. I would argue though that in the last couple of years, we've gone deeply in the wrong direction. The kind of compromise you need to actually fix the structure of our debt, just like the gentleman just said previously, are entitlements, and unfortunately our partners on the other side of the aisle, the president and the Senate, have always been unwilling to put a specific plan out there to address entitlements. Specifically health care entitlements. The president just created two brand new health care entitlements, expanded Medicaid a third, and then put this new rationing board in charge of Medicare, and so they're unwilling to open up and restructure these entitlements, which according to S&P are the primary drivers of this debt. So yes, we haven't been able to get the kind of compromise because our partners on the other side of the aisle have been unwilling to reform the programs that are the cause of our future debt problems and the reason for this downgrade. [Fox News Sunday, 8/7/11]
CLAIM: Sen. Graham Claimed Debt, Not Default Crisis Caused By Tea Party, Is Reason For S&P Downgrade Of U.S. Credit Rating
BOB SCHIEFFER (HOST): You just heard David Axelrod basically what he's saying is you can blame it on the Tea Party. Do you agree with that?
SEN. LINDSEY GRAHAM: Well if we'd listened to the Tea Party we'd have $4 trillion reductions in debt over time and not been downgraded. No, the Tea Party has come to Washington talking about reducing spending. Thank God they're here. This is the first time we've ever raised the debt ceiling, where we tried to actually reduce spending. That's a good thing, but we're woefully short. The agreement fell well short of what the ratings agencies were looking at. The Tea Party hasn't destroyed Washington, Washington was destroyed before the Tea Party got there. The hope is that the Tea Party and middle-of-the-road people can find common ground to turn this country around before we become Greece. I hope we can. [Face the Nation, 8/7/11]
FACT: S&P's Report Blames Political Dysfunction, Use Of "The Threat Of Default" As "Political Bargaining Chips" For Decision To Downgrade
S&P: "We Lowered Our Long-Term Rating" Because Of "The Prolonged Controversy Over Raising The Statutory Debt Ceiling." From Standard & Poor's: "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. [...]The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy." [Standard & Poor's, 8/5/11, emphasis added]
National Journal: "It's Hard To Read The S&P Analysis As Anything Other Than A Blast At Republicans." From the National Journal: "To be sure, S&P didn't specifically single out Republicans. It criticized the overall $2.4 trillion deal as too limited, and it implicitly criticized both political parties for refusing to tackle their sacred cows - entitlements, in the case of Democrats; tax increases in the case of Republicans. But it's hard to read the S&P analysis as anything other than a blast at Republicans. In denouncing the threat of default as a 'bargaining chip,' the agency was saying that the GOP strategy had shaken its confidence. Though S&P didn't mention it, the agency must have been unnerved by the number of Republicans who insisted that it would be fine to blow through the debt ceiling and provoke a default." [National Journal, 8/6/11, emphasis added]
- Senate GOP Leader Mitch McConnell Has Openly Celebrated Republicans' Use Of Debt Ceiling For Political "Hostage." As reported by the Washington Post: "But at the Capitol, behind the four doors and the three receptionists and the police guard, McConnell said he could imagine doing this again. 'I think some of our members may have thought the default issue was a hostage you might take a chance at shooting,' he said. 'Most of us didn't think that. What we did learn is this - it's a hostage that's worth ransoming. And it focuses the Congress on something that must be done.'" [Washington Post, 8/2/11, emphasis added]
S&P's "Rationale" Section Cites Failure Of Long Public Debate To Produce Comprehensive Plan That Includes New Revenues. From the "Rationale" section of the Standard & Poor's report: "Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability." [Standard & Poor's, 8/5/11, emphasis added]
S&P: Republican Intransigence On Taxes Makes Permanent Extension Of Bush Tax Cuts More Likely, Which Would Be "Consistent With" Downgraded Rating. From S&P: "Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings. Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act." [Standard & Poor's, 8/5/11, emphasis added]
National Journal: Downgrade Based "On The Political Game Of Chicken...That Republicans Initiated And Pushed To The Limit." From the National Journal: "The big new element on Friday was an official outside recognition that U.S. creditworthiness is being undermined by a new factor: political insanity. S&P didn't base its downgrade on a change in the U.S. fiscal and economic outlook. It based it on the political game of chicken over the debt ceiling, a game that Republicans initiated and pushed to the limit, and on a growing gloom about the partisan deadlock. Part of S&P's gloom, moreover, stemmed explicitly from what a new assessment of the GOP's ability to block any and all tax increases. S&P was remarkably blunt that its downgrade was mostly about heightened political risks: 'The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,' it said." [National Journal, 8/6/11, emphasis added]
Fox News Sunday
CLAIM: Rep. Ryan Repeatedly Claimed That Democrats Have Failed To Put Forth A Plan To Address Health Care Entitlement Spending
REP. PAUL RYAN: The kind of compromise you need to actually fix the structure of our debt, just like the gentleman just said previously, are entitlements, and unfortunately our partners on the other side of the aisle, the president and the Senate, have always been unwilling to put a specific plan out there to address entitlements. Specifically health care entitlements. The president just created two brand new health care entitlements, expanded Medicaid a third, and then put this new rationing board in charge of Medicare, and so they're unwilling to open up and restructure these entitlements, which according to S&P are the primary drivers of this debt. [...]
I don't think this committee is going to achieve a full fix to our problem because Democrats have never wanted to put their health care bill on the table.
FACT: The Affordable Care Act Takes A Variety Of Steps To Reduce The Long-Term Growth Of Health Care Costs
The Affordable Care Act Provides Tools To Crack Down On Health Care Fraud. From the Seattle Times: "Investigators have new tools this year to help crack down on health care fraud, with the Justice Department and the Health and Human Services Department working cooperatively to police companies. The newly enacted Affordable Care Act is designed to lengthen prison sentences in criminal cases and the new law provides an additional $300 million over the next 10 years for stronger enforcement. It also gives the government new authority to step up oversight of companies participating in Medicare and Medicaid." [Seattle Times, 5/13/10]
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 Medicine, 7/8/10]
Affordable Care Act Insures 34 Million New People With 1 Percent Health Care Spending Increase. According to the Washington Post's Ezra Klein:
First, be clear about what's being estimated. The Congressional Budget Office's estimates look at the deficit. CMS is looking at total national health expenditures. This often confuses people into thinking that there's conflict between the two sets of numbers when there isn't: CBO says that federal spending is going to go up to pay for the coverage expansion, but that savings and revenue will go up by even more, leading to a net reduction in the federal deficit. CMS is looking only at the spending side. And here's what it finds: In 2019, implementation of the Affordable Care Act will reduce the ranks of the uninsured by 34 million people and increase nation health expenditures by 1 percent. One percent... So that's the bottom line of the report: We're covering 34 million people and come 2019, spending is expected to be one percentage point -- and falling - above what it would've been if we'd done nothing. [Washington Post, 4/23/10, emphasis added]
After One-Time Spending Increase In 2014, Costs Grow More Slowly Than They Would Without Reform. According to the Washington Post's Ezra Klein:
[W]e're covering about 10 percent of the country and increasing spending growth by 0.2 percent. Seems like a good deal to me. But it's actually a better deal than that. Here's what the cost curve -- or maybe I should say cost line -- looks like:
What you're seeing here isn't the cost curve bending up. It's a one-time increase in the level of spending. That's the big jump in 2014, the year the exchanges and subsidies come online. So when you compare 2014 to 2013, spending growth seems like it's gone up a bunch. But by 2016, we're back to normal. In fact, we're better than normal [according to a September CMS report]: "For 2015-19, national health spending is now projected to increase 6.7 percent per year, on average -- slightly less than the 6.8 percent average annual growth rate projected in February 2010."
In other words, 2014 is a one-time increase in spending level as we get 30 million new people covered. After 2014, costs grow more slowly than they would without the health-care reform bill. [Washington Post, 9/10/10, emphasis added]
FACT: Advisory Board Will Make Cost Control Recommendations But Is Prohibited From Rationing Care
IPAB Cannot Ration Care, Increase Taxes, Change Benefits Or Eligibility, Or Increase Premiums And Cost-Sharing Requirements. According to the Kaiser Family Foundation: "The Board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income subsidies under Part D. Prior to 2019, the Board is also prohibited from recommending changes in payments to providers and suppliers that are scheduled to receive a reduction in their payment updates in excess of a reduction due to productivity adjustments, as specified in the health reform law." [Kaiser Family Foundation, May 2010]
FactCheck.org: "It's Wrong To Say That The Advisory Board Will Ration Care. FactCheck.org addressed Rep. Paul Ryan's (R-WI) claim that IPAB rations care:
Ryan twice warns of Obama's plan to "ration" health care for the elderly. He also says, "The greatest threat to the health security of America's seniors is the President's plan to deeply and systematically ration Medicare."
Ryan spokesman Conor Sweeney told us in an e-mail that the claim of rationing refers to funding for the Independent Payment Advisory Board created by the federal health care law. But it's wrong to say that the advisory board will ration care or that it will be run by bureaucrats, as we wrote when Sarah Palin made a similar claim.
The Patient Protection and Affordable Care Act says the advisory board "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums." Also, the board isn't made up of Washington bureaucrats. The 15 voting members will be appointed by the president in consultation with congressional leaders; they must include doctors and other health care professionals, economists and health care finance experts, and representatives of consumers and seniors, as the American Medical Association explains. There will also be three non-voting members: the Health and Human Services secretary, and the administrators of the Centers for Medicare and Medicaid Services and the Health Resources and Services Administration. [FactCheck.org, 5/6/11, emphasis added]
For more on IPAB, read our complete primer.
FACT: The Health Care Law Reduces The Deficit
CBO: Health Care Reform Repeal Would Increase The Deficit By $230 Billion. In a letter to Speaker John Boehner (R-OH), Congressional Budget Office 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. [Congressional Budget Office, 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." [Congressional Budget Office, 3/18/10]
FACT: The Affordable Care Act Extended The Fiscal Life Of Medicare By Eight Years
Medicare Trustees Report Shows Affordable Care Act Extends The Life Of Medicare. According to the Huffington Post:
The Medicare trust fund will last eight years longer than it would have without the passage of last year's health care law, the program's trustees announced Friday in a report.
The nonpartisan lead actuary for Medicare, Rick Foster, estimated that without the health care overhaul, the program's trust fund would have run dry by 2016. With the law in effect, Foster projected, the trust fund will last through 2024. [...]
Health and Human Services Secretary Kathleen Sebelius highlighted the boost reform gave to Medicare. "Over the next 75 years, Medicare's Hospital Insurance costs are projected to be about 25 percent lower due to the new law," she said in a statement. "And without the historic deficit reduction in the Affordable Care Act, Medicare would have gone bankrupt in 2016 -- only five years from now." [Huffington Post, 5/13/11]
Foster: Affordable Care Act Extends The Life Of Medicare By Eight Years. In an interview with Slate's David Weigel, Richard Foster, the chief actuary of the Centers for Medicare & Medicaid, said: "Under current law...including the Affordable Care Act, we're estimating that the trust fund would be exhausted in 2024. In the absence of the savings under the Affordable Care Act, a corresponding date of exhaustion would be 2016. So the Affordable Care Act, in the new projection, postpones the exhaustion by eight years. That's down from 12 years in last year's projection." [Slate, 5/16/11]
CLAIM: Rep. Ryan Claimed "Demand-Sided" Policies Are Misguided Because "What's Plaguing Our Economy Today" Is "Uncertainty"
REP. PAUL RYAN: See those things are all temporary, they're demand-sided, and they've proven not to work, and they still facilitate uncertainty for businesses, and so what's plaguing our economy today, especially for the small businesses who create most of our jobs, is this just increases the amount of uncertainty as to what the future holds for them on regulations, on taxes, on interest rates, and all those things. This actually exacerbates those problems. We think, more certainty. More certainty on regulations, on taxes, on spending, on debt, on price stability with sound money, are the key to this.
FACT: Businesses Blame Weak Demand — Not Government Policies — For Weak Hiring
WSJ: "The Main Reason" For Hiring Reluctance Is "Scant Demand, Rather Than Uncertainty Over Government Policies." According to the Wall Street Journal:
The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.
"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."
In the survey, conducted July 8-13 and released Monday, 53 economists-not all of whom answer every question-were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing. [Wall Street Journal, 7/18/11, emphasis added]
Washington Post: Executives Can't Draw Specific Link Between Government Actions And Hiring Decisions. According to the Washington Post: "Fundamentally, executives objected to Obama's policies on the grounds they would make the United States a less competitive place to operate in the long run. But when [manufacturing CEO Jason] Speer and other executives were pressed on the role that tax and regulatory policies play in hiring, they drew only vague connections. Speer said his decision whether to hire is driven primarily by demand for his products. Orders are coming in strong enough that he is running about 20 hours a week of overtime. So he is weighing whether to hire two or three additional manufacturing workers. None of the executives interviewed linked a specific new government initiative with a specific decision to refrain from hiring." [Washington Post,8/21/10, emphasis added]
Study By "The Most Right Wing Of The Major Business Groups" Shows Businesses Much More Afraid Of Weak Demand Than Taxes And Regulations. As Ezra Klein of the Washington Post reported:
The National Federation of Independent Businesses -- a small-business trade association that is considered the most right wing of the major business groups -- continually polls its members and releases the results. Here's what they say is their single most important problem:
As you can see, sales - that is to say, demand for their products - dominate the chart, while fear of taxes is lower than in the '90s. The concern over sales is understandable. Not only is the economy bad. But as the next chart shows, it keeps underperforming what the businesses assume will happen.
So, if anything, businesses have been too optimistic over the past few years. [Washington Post, 7/22/10]
CLAIM: Rep. Ryan Claimed President Obama Said The Recovery Act Would Keep Unemployment Below 8 Percent
REP. PAUL RYAN: This is the same economic reasoning, policies, and logic that the president used to sell us the stimulus. He said it would keep unemployment from getting above 8 percent. It didn't. It gave us a trillion dollars in debt hangover. It would simply exacerbate our debt problems in my opinion. I won't go through every one of those individual issues like unemployment insurance and others, but I really think we should do tax reform.
FACT: Those Blaming Obama For Poor Prediction Are Taking A 2009 Report Out Of Context
"Not An Official Government Assessment, Nor Even An Analysis Of An Actual Plan That Had Passed Congress." From a Washington Post fact check of a similar claim by Tim Pawlenty:
Pawlenty is referring to a projection issued on Jan. 9, 2009 - before Obama even took the oath of office - by two aides: Christina Romer, the nominee to head the Council of Economic Advisers, and Jared Bernstein, an incoming economic adviser to Vice President-elect Biden.
The 14-page report thus was not an official government assessment, nor even an analysis of an actual plan that had passed Congress. Instead, it was an attempt to assess the impact of a possible $775 billion stimulus package and what difference it would make compared to doing nothing. The president-elect had articulated a goal of passing a plan that would "save or create 3 million jobs by the end of 2010."
Page 5 of the report included a chart that showed that unemployment would peak at 8 percent in 2009, compared to 9 percent in 2010 if nothing was done. But the report also contained numerous caveats and warnings because, after all, it was merely a projection. At the time, other economists had similar forecasts - Romer and Bernstein were in the mid-range - but the economy turned out to be in deeper trouble than most people thought. [Washington Post, 5/26/11]
Report Included "Heavy Disclaimers" About Unemployment Projections. According to PolitiFact:
But what we saw from the administration in January 2009 was a projection, not a promise. And it was a projection that came with heavy disclaimers.
"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."
There's also a footnote that goes with the chart that states: "Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action." [PolitiFact, 2/28/11]
Higher Unemployment Reflects Economic Conditions That Were Worse Than Were Expected — Not A Failure Of The Stimulus. From a Washington Post fact check of a similar claim by Tim Pawlenty:
Romer, when she left the White House last year, said that the estimate of the impact of the stimulus bill was accurate but the 8-percent "prediction was so far off" because economic conditions were so much worse. "We, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between GDP [gross domestic product] and unemployment would break down," she said.
Economic projections by their nature are uncertain. It's absurd to claim that this is a presidential "promise," especially when the projection was not even about the stimulus bill that ultimately passed Congress. [Washington Post, 5/26/11]
FactCheck.org: Original Prediction Was "In Line With What Private Economists Were Forecasting." According to FactCheck.org:
Back in July of last year we wrote, "the original projections from President Obama's economic advisers on what would happen with and without the stimulus plan are still off - and significantly so." But nobody "promised" that unemployment would remain below 8 percent.
As we also wrote in June of last year, the White House explanation was simple: "They say President George Bush left them a worse mess than they realized" when Obama's advisers came up with their predictions. And that's true. The original chart - produced Jan. 9, 2009 - was based on economic projections that were in line with what private economists were forecasting. Those forecasts were being revised for the worse even before any stimulus money was spent. [FactCheck.org, 9/24/10]
PolitiFact: "There Is An Inherent Uncertainty In Economic Forecasting." According to PolitiFact: "But there is an inherent uncertainty in economic forecasting. And how can you ever prove that if the unemployment rate got to X percent, it would or would not have gotten a point or two higher if not for the stimulus? The implication of Allen's comment is that a rising unemployment rate in 2009 proves the stimulus didn't work. Many economists don't agree -- and argue that without the stimulus, unemployment would have been worse -- but it's difficult to empirically prove one way or the other. [PolitiFact, 2/28/11]
CLAIM: Rep. Ryan Claimed That Select Committee On Deficit Reduction Has Given "Its Word" That It Will Only Look At Spending Cuts And Ignore Taxes
REP. PAUL RYAN: I would put this committee in perspective. I wouldn't call it "super," it's a select committee tasked with getting about $1.2 to $1.5 trillion in savings, in spending cuts as we see them. We proposed $5.8 trillion, so we obviously have shown plenty of ways of arriving at this kind of a number. [...] And I hope that this select committee makes good on its word and cuts about 1.2 to 1.5 trillion in spending.
FACT: Special Committee Is Empowered To Consider All Deficit Reduction, Not Just More Cuts
"There's Nothing In The Legislation That Would Prevent The Super-Committee From Proposing Revenue Increases." As reported by ABC News: "One bottom line of this debate is that it seems that the baseline the Super-Committee uses will also be a point of contention. Experts on the CBO scoring process say Republicans are making a flimsy argument. There's nothing in the legislation that would prevent the Super-Committee from proposing revenue increases. Nothing. And anyone in Congress can ask for alternative benchmarks. The truth is the CBO is often called to score bills in different ways, and anyone on the Super-Committee could certainly request that it be done in a certain way with any assumptions. Given Congress's reluctance to raise taxes, it might not make much sense to ask CBO to assume the Bush tax cuts expire in January 2013. Rep. Paul Ryan, R-Wisc., for instance, requested that CBO score his 'Roadmap' against an 'alternative fiscal scenario' that assumed extension -- not expiration -- of the Bush tax cuts." [ABC News, 8/1/11]
Republicans Argue Committee Can't Consider Tax Increases But "No One Else Seems To Be Able To Find That Prohibition In The Law." According to Stan Collender of CapitalGainsAndGames.com: "This has become completely and incontrovertibly evident in the less-than-24 hours since the law was signed. During that time, congressional Republicans have made it clear that they won't appoint anyone to the JSC who will support tax increases of any kind. They've even gone so far as to say that JSC doesn't have the authority to consider tax increases, although no one else seems to be able to find that prohibition in the law." [CapitalGainsAndGames.com, 8/4/11]
Meet the Press
SEN. JOHN MCCAIN: And the elephant in the room, as we all know, is Medicare and Social Security. And unless we're ready to reform those entitlements, we're not going to have a long-term fix for our fiscal problems.
FACT: Social Security Does Not Contribute To The Debt, Is Solvent For Another 25 Years, And Is Relatively Easy To Fix Over The Long Term
Social Security Is Self-Financing, And Never Adds To The Debt. In an op-ed, Karen Friedman of the Pension Rights Center wrote: "Contrary to the widespread myth further forwarded by the commission, Social Security is neither going broke nor causing our federal deficits. It never contributed and, unless the law is changed, never will contribute a penny to the debt. It is self-financing, has no borrowing authority, and cannot pay benefits unless it has the income on hand to cover the entire cost. Today, Social Security is running surpluses and will be in sound financial shape for nearly three decades. Even after that, its long-term shortfall can be addressed easily without cuts. If a corporation could make such claims to its shareholders, it would be cause for champagne, not gloom and doom." [Friedman Op-Ed, Christian Science Monitor, 12/28/10, emphasis added]
Social Security Trustees: Trust Fund Sufficient To Pay Full Benefits Through 2036, 78 Percent Of Benefits Thereafter. According to the Social Security Board of Trustees: "The projected point at which the combined Trust Funds will be exhausted comes in 2037 - the same as the estimate in last year's report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits." [SSA.gov, 8/5/10]
- CBPP: "Those Who Fear That Social Security Won't Be Around" For Today's Workforce "Misunderstand" Trustees' Report. According to the Center on Budget and Policy Priorities: "Even after 2037, Social Security could pay more than three-fourths of scheduled benefits using its annual tax income. Those who fear that Social Security won't be around when today's young workers retire misunderstand the trustees' projections. The program's shortfall is relatively modest, amounting to 0.7 percent of Gross Domestic Product (GDP) over the next 75 years (and 1.4 percent of GDP in 2084). A mix of tax increases and benefit modifications - carefully crafted to shield recipients of limited means, potentially make benefits more adequate for the neediest beneficiaries, and give ample notice to all participants - could put the program on a sound footing indefinitely." [CBPP.org,8/13/10]
The Post-2037 Funding Shortfall Is Predicted To Be Less Than 1 Percent Of GDP. According to the Economic Policy Institute: "Social Security spending as a share of the economy is projected to decline after the Baby Boomer retirement, leveling off at around 6% of GDP; this is a little more than 1 percentage point above current revenues as a share of GDP. The Social Security actuaries have projected that an increase in revenues equal to just 0.6% of GDP will be sufficient to cover promised benefits over the 75-year planning period because of the savings built up in the trust fund." [EPI.org,8/6/10, citations removed for clarity]
Currently, Social Security Payroll Taxes Are Capped So That High Earners Only Pay Payroll Tax On First $107,000 Of Pay. From the National Academy of Social Insurance: "Benefits are financed by mandatory contributions paid by workers and matched by their employers, by income taxes paid on Social Security benefits, and by interest on Social Security reserves. The contribution rate for both workers and employers is 6.2 percent of earnings up to a cap ($106,800 in 2009)." [NASI.org, October 2009]
- Removing The Payroll Tax Cap Would Eliminate Funding Shortfall Over 75-Year Period. From the National Academy of Social Insurance:
Option #8a: Eliminate the Cap - Do Not Count the Additional Earnings toward Benefits. If all earned income above $106,800 a year were subject to Social Security contributions, but those earnings did not count toward benefits, Social Security would be solvent throughout the long-range projection period. Making this change in 2010 would be more than enough to eliminate the 75-year deficit. With this change, workers who earn far more than the tax cap would pay considerably more in taxes. For example, a person making $400,000 per year would pay $18,178 per year more and his or her employer would pay a matching amount, for a total increase of $36,356. The worker's maximum benefit would be no higher than under current law. Ever since Social Security began, all wages that are taxed have counted toward benefits. This proposal would break that traditional link.
Option #8b: Eliminate the Cap - Count the Earnings toward Benefits. If all wages above $106,800 in 2009 were taxed and counted toward benefits, the change would almost make Social Security solvent through the long-range period, eliminating about 95 percent of the 75-year shortfall. While high earners and their employers would pay considerably more, these top earners would also receive much higher benefits. [NASI.org, October 2009, emphasis original]
SEN. JOHN MCCAIN: The president's decision to withdraw [from Afghanistan] at— on the schedule that he has outlined, there was no military recommendation. All our military leaders have said that it increases the risk. Why would we want to increase the risk to the lives of our young men and women who are serving?
FACT: Top Military Advisers Say Afghanistan Decisionmaking Process "Was Vigorous," "All Voices Were Heard," And "We Would...Run Other Kinds Of Risks" By Staying Longer
Gen. Petraeus: "This Was Indeed Vigorous" And "All Voices Were Heard In The Situation Room." From General David Petraeus' June 23, 2011, testimony before the Senate Armed Services Committee:
Madame Chairman, perhaps I could just walk through the process, because it was quite a substantial one although in a brief period of time. It included three meetings. After the first meeting I was given a homework assignment which I answered by the second meeting, and then the third meeting was the one in which the president ultimately reached a decision. [...] And so that's how I would lay out again the process that took place, the very good discussion. This was indeed vigorous. All voices were heard in the Situation Room, and ultimately the decision has been made, and with a decision made obviously I support that and will do all that I can during my remaining time as the commander of ISAF to implement it, to set up General Allen to do likewise so that we can achieve the objectives of the campaign plan, and then also if confirmed as the Director of the Central Intelligence Agency, to do the same from that position as well. [Gen. Petraeus Testimony, Senate Armed Services Committee, 6/23/11]
Adm. Mullen: "The Truth Is, We Would Have Run Other Kinds Of Risks By Keeping More Forces In Afghanistan Longer." From Admiral Mike Mullen's June 23, 2011, testimony before the House Armed Services Committee:
The truth is, we would have run other kinds of risks by keeping more forces in Afghanistan longer. We would have made it easier for the Karzai administration to increase their dependency on us. We would have denied the Afghan security forces who've grown in capability opportunities to further exercise that capability and to lead. We would have signaled to the enemy and to our regional partners that the Taliban still possess strength enough to warrant the full measure of our presence. They do not. We would have also continued to limit our own freedom of action there and in other places around the world, globally. The president's decision to allow us to reset our forces more quickly as well as to reduce the not inconsiderable cost of deploying those forces. In sum, we have earned this opportunity. Though not without risk, it is not without its rewards. And so, we will take that risk, and we will reap those rewards. [Adm. Mullen Testimony, House Armed Services Committee, 6/23/11]
Adm. Mullen: "The Commander In Chief Presided Over An Inclusive And Comprehensive Discussion About What To Do Next." From Admiral Mike Mullen's June 23, 2011, testimony before the House Armed Services Committee:
The Commander in Chief presided over an inclusive and comprehensive discussion about what to do next, and I am grateful for that. And I can tell you that foremost on everyone's mind throughout the discussion was preserving the success our troops and their civilian counterparts have achieved thus far. We believed, back when the strategy was established in December 2009, that it would be about now, this summer, before we could determine whether we had it right. Whether the resources were enough and the COIN focus was appropriate. Well now we know. We did have it right. The strategy is working. Al Qaeda is on its heels and the Taliban's momentum in the south has been checked. We've made extraordinary progress against the mission we've been assigned and are now therefore in a position to begin responsible transition out of Afghanistan. [Adm. Mullen Testimony, House Armed Services Committee, 6/23/11]
Face the Nation
CLAIM: Sen. Graham Used Misleading Statistics To Argue That "Everything Is Worse" Because Of President Obama
SEN. LINDSEY GRAHAM: Everything is worse. Unemployment is up by 18 percent. Gas prices are up by 93 percent. Everything, housing prices are down by 12 percent, he's had a chance, we're three years into this and he's failing. It's not the Tea Party's fault, what was hope and change is despair and confusion. People are not creating jobs in this country because they think Howard Dean is going to raise their taxes. If you want to create job, don't raise anybody's taxes. Try to lower spending like the Tea Party and other people up here want.
FACT: President Obama Inherited Spiraling Unemployment, And His Policies Turned Private-Sector Jobs Trend Around
The Economy Shed Almost Eight 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:
[Washington Post, 8/12/10]
Unemployment Rate Is Down From 9.5 Percent In July 2009 To 9.1 Percent In July 2011. According to Bureau of Labor Statistics data, the unemployment rate fell from 9.5 percent in July 2009 to 8.8 percent in March 2011, but has risen back to 9.1 percent since then:
[BLS.gov, accessed 8/7/11]
The Private Sector Has Added Jobs For 17 Straight Months. Minority Leader Pelosi's office prepared a graph based on BLS data for monthly private sector job gains and losses:
PolitiFact: "True" That "Most Job Losses" Happened Before Obama Policies Took Effect. According to PolitiFact's analysis of President Obama's statement that "most of the jobs that we lost were lost before the economic policies we put in place had any effect": "Looking at BLS data on seasonally adjusted non-farm employment from December 2007, when the recession officially began, to January 2009, the month before the stimulus was enacted (a 25-month period), the jobs number declined by 4.4 million. ... When [Obama] refers to his economic policies, we presume he is referring to his main economic stimulus, the American Recovery and Reinvestment Act. It passed in February 2009, but it took several months before the impact of its spending was felt in the economy. Job loss didn't stop, but Obama is right that it slowed down. In the 19 months from February 2009 through September 2010, the month of the most recent preliminary data, the overall job decline in the private and public sectors was 2.6 million. And the number of jobs lost per month has declined from around 700,000 a month at the beginning of the administration to months in which there were small net gains. ... 'I watched the president on Stewart's show last night, and I thought his basic point about the timing of the employment losses was correct and ought to be noncontroversial,' Gary Burtless, a labor markets expert at the centrist-to-liberal Brookings Institution said in an e-mail." [PolitiFact, 10/27/10, emphasis added]
FACT: Gas Prices Were Artificially Low At The End Of 2008 Because Of The Recession, Making Higher Prices An "Inevitable" Component Of Recovery
GOP Economist Holtz-Eakin: "As Economies Recovered, It Was Inevitable That [Gas] Prices Were Going To Rise." In an interview with CNN, Republican economist Douglas Holtz-Eakin said: "Lesson number one is we have oil at $140 a barrel in 2008. And it went down not because we somehow discovered a lot more oil. No, it went down because we went into a massive global recession. As economies recovered, it was inevitable that prices were going to rise. And this was utterly foreseeable." [State of the Union, 3/27/11]
Recession Drove Rapid Decline In Gas Prices. As reported by CNNMoney in 2008: "If there's one bright spot in a bad economy, it's that gasoline prices have fallen, and they're expected to drop even further. As the global economy falters, demand for oil has dropped. And since the price of oil makes up about half of the cost of a gallon of gas, analysts see more relief ahead at the pump. ... The national average price for a gallon of regular, unleaded gasoline fell 2.4 cents to $3.480 from $3.504, according to a daily survey released Tuesday by AAA. That's down 18% from an all-time high of $4.114 a gallon hit on July 17." [CNNMoney, 10/7/08]
Gas Prices Have Risen During Obama's Term, But Only From Recession-Fueled Lows Back To Normal. Two graphs of gas prices over time show that while prices appear to shoot upward if one looks only at 2008-2011 numbers, the longer view confirms that prior to political upheaval in the Middle East, prices had in fact returned to normal after falling dramatically during the recession:
[EIA.DOE.gov, accessed 8/7/11]
CLAIM: Sen. Sessions Claimed Democrats' "Balanced Plan" Was Intended To "Permanently Implant A Larger Level Of Spending"
SEN. JEFF SESSIONS: Well, raising taxes is what balanced plan means. That's plain to every American by now. The administration wants to raise taxes so they can permanently implant a larger level of spending.
FACT: Far From Trying To "Permanently Implant A Larger Level Of Spending," Democrats Proposed Trillions In Spending Cuts As Concessions To GOP
President Obama Offered $650 Billion In Medicare, Medicaid And Social Security Cuts. From FactCheck.org: "Boehner claimed Obama is adamantly against "fundamental changes" to entitlement programs. In fact, the president has proposed $650 billion in cuts to the future growth of Medicare, Medicaid and Social Security." [FactCheck.org, 7/26/11]
President Obama Offered Over $1.5 Trillion In Spending Cuts. From FactCheck.org: "Similarly, Boehner said Obama 'wants a blank check today' just as the president did six months ago. It's true that six months ago Obama wanted the debt ceiling to be raised without cutting spending. But the president has now offered spending cuts of between $1.5 trillion and $1.7 trillion over 10 years, including the entitlement cuts we just mentioned." [FactCheck.org, 7/26/11]
FACT: Democrats Were Proposing $5 In Spending Cuts For Every $1 In Tax Increases When Republican Negotiators Walked Away From The Table
Wall Street Journal: Democrats Wanted $400 Billion In Taxes Out Of Total $2.4 Trillion Package But "The Republicans Walked Out." As reported by the Wall Street Journal: "A bipartisan group of lawmakers led by Vice President Joseph Biden had agreed on cuts that total about $1 trillion over 10 years, participants say. They were shooting for about $2.4 trillion in deficit reduction, but when Democrats insisted about $400 billion in tax increases be considered, the Republicans walked out." [Wall Street Journal, 6/28/11]
CLAIM: Sen. Sessions Claimed President Bush Never Racked Up More Than $450 Billion In Deficits In Any Single Year
SEN. JEFF SESSIONS: The highest debt President Bush ever had was $450 billion. This president is averaging $1,300 billion.
FACT: President Bush Left Behind A $1.2 TRILLION Deficit For FY 2009 Before President Obama Was Even Sworn In
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 Times, 1/8/09, 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]