Political Correction

Fact Checking The Sunday Shows - May 29, 2011

May 31, 2011 10:39 am ET

The Sunday political talk shows cranked out their usual smorgasbord of misinformation and talking points this weekend. Sen. Mitch McConnell (R-KY) misled NBC viewers about the relationship between President Bush's tax cuts and our current national debt, and implied that President Obama has raised taxes when the opposite is true. On CBS, Rep. Eric Cantor (R-VA) claimed the House GOP's "Path to Prosperity" budget will "save" Medicare (though it would in fact replace the entire program with undervalued health care vouchers) and deflected all criticism of the GOP's plan by claiming that "Democrats have not put forward any plan whatsoever," even though that's not true. Cantor capped his appearance by exaggerating the debt reduction in the GOP plan by about $6 trillion. 2012 hopeful Tim Pawlenty told ABC viewers the president is "doing nothing" on Medicare, even though that program's trustees say President Obama's signature health care law extended the life of the program by eight years. And on Fox, freshman Rep. Allen West (R-FL) falsely claimed that 'only Democrats' have voted to cut Medicare.

Meet the Press

CLAIM: Sen. McConnell Claimed That Republican Tax Cuts Have Not Contributed To The Current Debt Problem

SEN. MITCH MCCONNELL: We think we have this problem because we spend too much, not because we tax too little.

FACT: The Bush Tax Cuts Are The Primary Driver Of Our Debt

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]

CBO Estimates That Shift From Projected Surpluses To Actual Deficits Over 2002-2011 Period Includes $2.02 Trillion In Debt From Bush Tax Cuts, Including 2010 Extension. The Congressional Budget Office estimates that the Bush tax cuts of 2001 ("EGTRRA") and 2003 ("JGTRRA"), and the two-year extension of those tax rates signed by President Obama in December ("Tax Act of 2010"), added $2.02 trillion to the debt between 2002-2011. [CBO, 5/12/11]

Political Correction prepared a chart based on CBO's estimates, showing the debt impact of the Bush tax cuts, the Recovery Act, and all other policies combined over the 2002-2011 window:

CLAIM: Sen. McConnell Said President Obama Wants Rates To "Go Up Again," Implying That The President Has Previously Raised Taxes

SEN. MITCH MCCONNELL: If there's any issue which clearly divides Republicans and Democrats, it's taxes. [...] And you've heard us have this debate over the years, we're going to have it again next year in the course of the election because the president wants the rates to go up again next year.

FACT: Democrats Passed Hundreds Of Billions Of Dollars In Tax Relief Measures In 2009-10...

PolitiFact: $288 Billion In Tax Relief In Recovery Act Were "Nearly A Third" Of The Spending. According to PolitiFact: "Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren't so much spending as money the government won't get -- so it can stay in the economy. Of that $288 billion, the stimulus has resulted in $119 billion worth of tax breaks so far." [PolitiFact, 2/17/10]

HIRE Act Provided $8.5 Billion In Tax Credits To Job Creators. According to CNNMoney: "Businesses have hired an estimated 4.5 million Americans who have been jobless for at least eight weeks, making these firms eligible for approximately $8.5 billion in tax credits, according to a Treasury report released Monday. The tax credits are part of the $13 billion Hiring Incentives to Restore Employment (HIRE) Act, which Congress passed in March. Under the act, employers who hire workers who have been jobless for at least 60 days are exempt from the 6.2% payroll tax charged per worker -- for the rest year. In addition, companies can claim a tax credit of up to $1,000 for each employee who stays at least a year." [CNNMoney, 7/12/10, emphasis added]

House Passed Small Business Aid Bill In Mid-June On Party Lines. According to Reuters: "The U.S. House of Representatives on Thursday approved a small business lending program sought by President Barack Obama to boost economic growth and encourage job creation. The House voted 241-182, mostly along party lines, for a bill which would authorize a $30 billion fund the Treasury Department would use to provide capital to small community banks, allowing increased lending to small businesses...[T]he $30 billion fund could be leveraged into as much as $300 billion in new credit to small businesses. The legislation is being combined with another bill earlier passed by the House that would provide $3.5 billion in small business tax breaks before it is sent over to the Senate for a vote." [Reuters, 6/17/10, emphasis added]

...Over Republican Objections

PolitiFact: "True" That "Democrats Passed 25 Tax Cuts [In 2009] Without The Help Of Republicans." PolitiFact analyzed a claim by senior White House adviser David Axelrod that Democrats passed 25 tax cuts in 2009 without Republican help:

We were intrigued by the claim that Democrats passed 25 tax cuts last year, so we contacted the White House press office and asked for a list. And they gave us one, all from the economic stimulus package championed by Obama and signed on Feb. 17, 2009.

We checked them out, provided sections and page numbers in the stimulus for reference, and added a brief explainer for some. If your eyes glaze over midway through, feel free to skip ahead to the bottom of the list where we'll pick up our analysis.[...]

Each of the tax provisions in the stimulus could have been broken into separate bills, said Bob Williams, also of the Tax Policy Center, and on their own could have rightly been billed as separate tax cuts.

"They packed an awful lot into that bill," Williams said. "I think it's fair to say that various tax provisions in the stimulus could be considered tax cuts. I don't think that's being deceptive."

We agree.

But there's one other element of Axelrod's claim, that the tax cuts were passed without the help of Republicans.

The stimulus passed the House with nary a Republican vote. And it passed the Senate with just three (though we note that one of them, Arlen Specter of Pennsylvania, is now a Democrat).

So it's certainly fair to say the stimulus passed without the help of the Republican caucus. We find Axelrod's statement True. [PolitiFact, 1/31/10]

Face the Nation

CLAIM: Rep. Cantor Claimed The Republican "Path To Prosperity" Would "Save" Medicare

REP. ERIC CANTOR: But listen, as far as Medicare is concerned, you know, there's a simple choice here. Either we're going to save the program or you let it go bankrupt. And, in fact, we put forward a program to reform Medicare and to save it.

FACT: Republican Proposal Would Replace Medicare Program With Vouchers, Doubling Out-Of-Pocket Medical Expenses For Future Seniors

Currently, Medicare Part A Pays Hospital Bills For Americans 65 And Older Who Paid Social Security Taxes For At Least 10 Years. From CNNMoney: "Medicare Part A provides coverage if you're hospitalized. This coverage is 'free' - meaning you pay no premiums - if you paid into the Social Security pool for at least 10 years [and are over age 65 or disabled]." [CNNMoney, accessed 4/24/11]

The GOP Budget Turns Medicare Into A Voucher System. From "The Path to Prosperity":

Save Medicare for current and future generations while making no changes for those in and near retirement. For younger workers, when they reach eligibility, Medicare will provide a Medicare payment and a list of guaranteed coverage options from which recipients can choose a plan that best suits their needs. These future Medicare beneficiaries will be able to choose a plan the same way members of Congress do. Medicare will provide additional assistance for lower-income beneficiaries and those with greater health risks. [The Path To Prosperity, 4/5/11, emphasis added]

Cato Institute Senior Fellow: Republican Plan Replaces Medicare With A Voucher System. In a New York Post op-ed about the "Path to Prosperity," Cato Institute senior fellow Michael Tanner wrote: "Those getting close to retirement will also still go into Medicare, just as they would have before. But beginning in 2022, people who are younger than 55 today will begin to transition to a new system.Instead of going into Medicare at age 65, they will receive a voucher from the US government to help them purchase private health insurance. Initially that voucher is expected to be for roughly $15,000 per recipient. Lower income seniors and those with higher health care costs because of illness will receive a bigger subsidy. Seniors can use these vouchers, combined with whatever they wish to spend of their own money, to choose an insurance plan that has a cost and mix of benefits that best meets their needs. Instead of a one size fits all system, seniors will have many more choices than they have today." [Tanner Op-Ed, 4/10/11, emphasis added, via Cato.org]

Creator Of "Premium Support" Payment System On GOP Proposal: "It's Vouchers, Not Premium Support." In an interview with the Washington Post's Ezra Klein, Medicare expert Henry Aaron said:

Me and Bob Reischauer jointly created the idea of 'premium-support' in the mid-1990s. It was a response to what we saw as legitimate criticisms of using market forces to rein in the growth of federal health spending. The worry was the reliable savings would come from shifting costs onto patients. The savings from competition were just something we hoped would show up.  So the key element was linking the amount that individuals receive to the growth of health-care spending, not to some other index that would grow less rapidly than health-care costs. The other two elements were aggressive regulation of health-care insurance offerings to prevent insurers from overwhelming people's capacities to sift alternative plans and risk adjustment. [...] In some ways, the Path to Prosperity plan improves on previous version, because the role of exchanges and risk adjustment is nearer to what we had in mind. But it is hands down the worst because it links premiums to consumer prices, which is the slowest growing index. [...] If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So [in the GOP's Path to Prosperity] we're looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that's a huge erosion of coverage. It's vouchers, not premium support." [Washington Post, 4/11/11, emphasis added]

Conservative Think Tank President: I Use The Words 'Voucher' And 'Premium Support' Interchangeably. From Kaiser Health News: "Others counter that premium support and vouchers are the same thing. 'I use the words interchangeably,' said John Goodman, president of the National Center for Policy Analysis, a conservative think tank in Dallas. 'It just means that the government limits the amount of money that it puts up, and people have to add to it if market prices are higher.' It's not surprising that Republicans favor the term premium support, as the word voucher elicits a strong negative reaction from the public. A September poll conducted by Pew Research and National Journal found that 69 percent of people older than 65 opposed vouchers for Medicare. That opposition came from both Democrats and Republicans." [Kaiser Health News, 4/4/11]

In 2022, A Typical 65-Year-Old Would Be Paying Approximately Double Compared To Current Levels. The Center on Budget and Policy Priorities prepared a graphic comparing health care spending for a typical 65-year-old under the current system to the same spending under the Republican budget:

[CBPP.org, 4/7/11]

CEPR: Ryan's Budget Would Force Seniors To Spend Much Of Their Income On Health Insurance. According to Center for Economic Policy Research co-director Dean Baker:

Representative Ryan would replace the current Medicare program with a voucher for people who turn age 65 in 2022 and later. This voucher would be worth $8,000 in for someone turning age 65 in that year. It would rise in step with the consumer price index and also as people age. (Health care expenses are higher for people age 75 than age 65.)

According to the CBO analysis the benefit would cover 32 percent of the cost of a health insurance package equivalent to the current Medicare benefit. This means that the beneficiary would pay 68 percent of the cost of this package. Using the CBO assumption of 2.5 percent annual inflation, the voucher would have grown to $9,750 by 2030. This means that a Medicare type plan for someone age 65 would be $30,460 under Representative Ryan's plan, leaving seniors with a bill of $20,700. (This does not count various out of pocket medical expenditures not covered by Medicare.)

According to the Social Security trustees, the benefit for a medium wage earner who first starts collecting benefits at age 65 in 2030 would be $32,200. (This adjusts the benefit projected by the Social Security trustees [$19,652 in 2010 dollars] for the 2.5 percent annual inflation rate assumed by CBO.) For close to 70 percent of seniors, Social Security is more than half of their retirement income. Most seniors will get a benefit that is less than the medium earners benefit described here since their average earnings are less than that of a medium earner and they start collecting Social Security benefits before age 65. [CEPR.org, 4/6/11, emphasis added, all parentheses original, internal citations removed for clarity]

CBO: Under The GOP Budget, "Most Elderly People Would Pay More For Their Health Care Than They Would Pay Under The Current Medicare System." According to the Congressional Budget Office: "Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario." [CBO.gov, 4/5/11]

If Medical Costs Continued To Increase Faster Than Voucher Values, "The Average Retiree Would Be More Than $50,000 In The Hole." According to an op-ed in the Huffington Post by R.J. Eskow, Senior Fellow with The Campaign For America's Future:

Even if the voucher is given full Medicare value in Year One (which we question), things start to get really bad after that. If medical costs continued to increase at 9% each year, which isn't at all impossible, and the voucher's value continued to increase at 5%, here's what would happen 10 years later using my figures:

By 2031, the cost of Medicare-equivalent coverage would be $73,000, and the voucher would be worth $18,000. By my calculation, the average retiree would be more than $50,000 in the hole. [Eskow Op-Ed, 4/6/11 via Huffington Post, emphasis original]

FACT: Republican Medicare Scheme Would Likely Affect Current Seniors As Well

Centrist Think Tank: Despite Republican Claims, "Current Beneficiaries Are Not Protected In The Ryan Budget." According to a report from Third Way by David B. Kendall, Senior Fellow for Health and Fiscal Policy and Ryan McConaghy, Director of the Economic Program:

Despite promises to the contrary, current beneficiaries are not protected in the Ryan budget.Under the Republican proposal, traditional Medicare would quickly become second-class medicine. It would "wither on the vine," as then-House Speaker Newt Gingrich described a similar GOP effort in 1995.

The traditional Medicare plan, which covers three-fourths of today's beneficiaries, relies on its huge size to keep costs down. Doctors and hospitals are not required to participate in it, but they have little choice if they wish to treat any seniors, who are the nation's biggest health care consumers.

Fewer doctors would participate in the traditional Medicare plan if there were an alternative. The traditional plan pays physicians about 20% less than private health insurance plans. Today, that is essentially a discount for the large volume of Medicare patients. Under the Ryan budget, it would become a reason for doctors to leave the traditional plan.

By 2030, only 55% of Medicare beneficiaries would still be eligible for traditional Medicare according CBO. Actual enrollment would be less than half of Medicare beneficiaries because many seniors would continue to enroll in private health care coverage under Medicare Advantage. By 2040, traditional Medicare would have only about 20% of Medicare beneficiaries. [ThirdWay.org, 4/14/11, internal citations removed for clarity, emphasis added]

CLAIM: Rep. Cantor Repeatedly Claimed House Democrats "Don't Have A Plan" For Debt Reduction And Medicare

REP. ERIC CANTOR: I know [Rep.] Debbie Wasserman Schultz [D-FL] will be on after me, I'd ask her where is their plan? They don't have a plan. We put a plan forward. [...] And this is what is so striking is that Democrats have not put forward any plan whatsoever. [...] We've got a plan. Where's theirs?

FACT: The Democratic Plan For Medicare Aims To Reduce Spending By Making The Program More Efficient

In Debt-Reduction Speech, Pres. Obama Called For Reforms That Cut Medicare And Medicaid Spending By Building On Reforms From Health Care Law. From President Obama's speech at George Washington University on April 13:

The third step in our approach is to further reduce health care spending in our budget.  Now, here, the difference with the House Republican plan could not be clearer.  Their plan essentially lowers the government's health care bills by asking seniors and poor families to pay them instead.  Our approach lowers the government's health care bills by reducing the cost of health care itself.

Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion.  My approach would build on these reforms.  We will reduce wasteful subsidies and erroneous payments.  We will cut spending on prescription drugs by using Medicare's purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.  We will work with governors of both parties to demand more efficiency and accountability from Medicaid.

We will change the way we pay for health care -- not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results.  And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.  

Now, we believe the reforms we've proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional $1 trillion in the decade after that.  But if we're wrong, and Medicare costs rise faster than we expect, then this approach will give the independent commission the authority to make additional savings by further improving Medicare.  [President Obama Remarks, 4/13/11, emphasis added]

House Democratic Leader Nancy Pelosi: "We Have A Plan. It's Called Medicare." As reported by Greg Sargent of the Washington Post: "'It is a flag we've planted that we will protect and defend. We have a plan. It's called Medicare.' That's from Nancy Pelosi, who called me from Wisconsin, where she's holding events today defending Medicare in Paul Ryan's back yard. [...] Asked to clarify what she meant, and to detail what sort of changes she'd be open to, Pelosi insisted that any claims she could support cuts in the program are wrong. 'No benefits cuts,' she said flatly. Pelosi added that Dems have already put on the table the type of reform they should continue advocating for: The Affordable Care Act. 'We gave the blueprint for how we strengthen Medicare in the Affordable Care Act,' Pelosi said, a plan which is still 'ripening' and 'which does not reduce benefits. It lowers costs to taxpayers, the deficit, and beneficiaries.' She said the only type of Medicare cuts she's open to are extracting savings via bureaucratic and pharmecutical reforms that don't touch benefits." [Washington Post, 5/19/11, emphasis added, italics original]

FACT: Democrats Have Put Forward Multiple Plans For Reducing The Debt, Including One That Balances The Budget 10 Years Sooner Than The House GOP Plan

The House Voted On Five Budget Resolutions, Three From Democrats, In April. As reported by the Christian Science Monitor:

On Friday, the House voted on five budget plans for fiscal year 2012, each with dramatically different strategies to resolve the nation's fiscal woes. Here are details of those five plans:

EPI: Congressional Progressive Caucus's "People's Budget" Ends Federal Deficits By 2021. According to the Economic Policy Institute: "[T]he People's Budget would reduce primary spending by $868.9 billion, increase general revenue by $2.8 trillion, and increase payroll tax receipts by $1.2 trillion over a decade relative to the adjusted CBO baseline. [...] In total, the People's Budget would reduce deficits by $5.6 trillion over 2012-21 relative to the adjusted CBO baseline. The People's Budget is projected to turn from budget deficit to budget surplus in 2021, with a surplus of $30.7 billion ... in that year." [EPI.org, 4/13/11, emphasis added]

Well, here's a test case. Mr Miller's column notes that "the Congressional Progressive Caucus plan wins the fiscal responsibility derby thus far; it reaches balance by 2021 largely through assorted tax hikes and defense cuts." Which is pretty interesting. Have you ever heard of the Congressional Progressive Caucus budget plan? Neither had I. The caucus's co-chairs, Raul Grijalva of Arizona and Keith Ellison of Minnesota, released it on April 6th. The budget savings come from defence cuts, including immediately withdrawing from Afghanistan and Iraq, which saves $1.6 trillion over the CBO baseline from 2012-2021. The tax hikes include restoring the estate tax, ending the Bush tax cuts, and adding new tax brackets for the extremely rich, running from 45% on income over a million a year to 49% on income over a billion a year.

Mr Ryan's plan adds (by its own claims) $6 trillion to the national debt over the next decade, but promises to balance the budget by sometime in the 2030s by cutting programmes for the poor and the elderly. The Progressive Caucus's plan would (by its own claims) balance the budget by 2021 by cutting defence spending and raising taxes, mainly on rich people. Mr Ryan has been fulsomely praised for his courage. The Progressive Caucus has not. [The Economist, 4/22/11, emphasis added, parentheses original]

FACT: President Obama Has Offered His Own Plan For Debt Reduction

President Obama Announced Plan To Reduce Debt By $4 Trillion Over 12 Years Compared To Current Forecasts. As reported by the Washington Post: "President Obama entered the debate about the national debt on Wednesday after months on the sidelines, offering a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy. In a stinging rebuke to Republican budget-cutters, Obama acknowledged that the debt must be tackled faster than he has previously proposed, but he rejected GOP calls to make fundamental changes to Medicare and Medicaid and to scale back his initiative to expand health-care coverage to the uninsured." [Washington Post, 4/13/11]

Click here for much more on Democratic proposals for reducing the debt.

CLAIM: Rep. Cantor Claimed The House GOP Budget "Saves $6.2 Trillion" Over 10 Years

REP. ERIC CANTOR: We put forward a plan that saves 6.2 trillion dollars over the ten-year budget window, included in that is a necessary reforms to save the, you know, entitlement programs.

FACT: Actually, The House GOP Budget Saves Just $155 Billion On Net

CBPP: The GOP Budget Only Cuts $4.3 Trillion Compared To Current Policy, Factoring Out The Savings From President Obama's Planned Troop Withdrawals In Afghanistan And Iraq. From the Center on Budget and Policy Priorities:

The chairman claims that his plan generates $5.8 trillion in spending cuts over ten years, relative to the Congressional Budget Office (CBO) baseline. But that number falls by $1.5 trillion - to $4.3 trillion - once one corrects for two things:

§  $1.3 trillion in "savings" from the official CBO baseline that comes merely from the fact that the Ryan plan reflects the costs of current policy in Iraq and Afghanistan. The CBO baseline contains a large anomaly related to the costs of the Iraq and Afghanistan wars. Following the rules governing budget baselines, CBO's baseline mechanically assumes that current levels of U.S. operations - and costs - in Iraq and Afghanistan will continue forever rather than phasing down in accordance with current policy. The CBO baseline figures are thus much higher than the costs of current policy. Ryan himself said earlier this year on National Public Radio - in attacking President Obama's 2012 budget proposal for not doing enough to reduce deficits - that simply showing the costs of current policy in Iraq and Afghanistan produces "phantom savings" from an anomalous baseline, not real deficit reduction.

§  $200 billion in lower interest savings due to an error by Chairman Ryan's staff in calculating interest savings. [CBPP.org, 4/8/11]

$4.3 Trillion In Real Spending Cuts From GOP Budget Offset By $4.2 Trillion In Tax Cuts, Leaving $155 Billion In Real Debt Reduction. From the Center on Budget and Policy Priorities:

Even some critics of House Budget Committee Chairman Paul Ryan's budget plan have praised his 'courage' and his willingness to make 'hard choices' to address looming deficits. But, upon closer inspection, Chairman Ryan's widely reported claim that his plan produces $1.6 trillion in deficit reduction proves illusory. In fact, the numbers in his plan show that his budget produces just $155 billion in real deficit reduction over ten years (see graph).

That means that, despite proposing $4.3 trillion in what would be the most severe and wrenching budget cuts in U.S. history - two-thirds of which would come from programs for people of low or moderate incomes - the plan barely reduces deficits at all over the next decade. That's because his budget cuts are offset by $4.2 trillion in tax cuts that would go disproportionately to those at the top. In essence, at least for the next decade, this plan is far less a blueprint for addressing deficits and far more a proposal to redistribute large amounts of resources from those at the bottom to those at the top.

[CBPP.org, 4/8/11]

FACT: GOP Budget INCREASES Debt As Share Of GDP Over 10-Year Period

CBO Says That Republican Budget Would Increase Debt Over 10-Year Window. As reported byTalking Points Memo: "In addition to acknowledging that seniors, disabled and elderly people would be hit with much higher out-of-pocket health care costs, the CBO finds that by the end of the 10-year budget window, public debt will actually be higher than it would be if the GOP just did nothing. Under the so-called 'extended baseline scenario' -- a.k.a. projections based on current law -- debt held by the public will grow to 67 percent of GDP by 2022. Under the GOP plan, public debt would reach 70 percent of GDP in the same window. In other words, the spending cuts Republicans would realize in the first 10 years would be outpaced by deficit increasing tax-cuts, which Ryan also proposes. After that, debt projections under the plan improve decade-by-decade relative to current law. That's because 2022 would mark the beginning of the Medicare privatization plan. That's when, CBO finds, 'most elderly people would pay more for their health care than they would pay under the current Medicare system.'" [Talking Points Memo, 4/5/11, emphasis added]

This Week

CLAIM: Tim Pawlenty Claimed President Obama's Plan For Medicare Is "Doing Nothing"

TIM PAWLENTY: As to Medicare, it will have some differences, but if the only choices were doing nothing like President Obama is doing and Paul Ryan's plan, I'd sign it.

FACT: Far From "Doing Nothing," President Obama's Signature Health Care Reform Law Extended The Life Of Medicare By Years

PolitiFact: Latest Medicare Trustees Report Says Affordable Care Act Extended Life Of The Program By Eight Years, After Previous Report Put That Number At 12 Years. From a PolitiFact item fact checking Rep. Debbie Wasserman Schultz's (D-FL) claim that the Affordable Care Act extended the life of Medicare by 12 years:

The bigger problem with Wasserman Schultz's statement is that just a few weeks ago, the board of trustees issued a new report that revised its estimates for the health care law. Instead of adding 12 years of solvency, the board concluded, the law will only add eight years of solvency. Starting in 2024, the program will need either new revenues or reduced expenses to meet all of its obligations. The board said the shortfall was because of the continuing economic slowdown, which has reduced the Medicare program's income from taxes, and a few other lesser factors.

So Wasserman Schultz's number is off by about a third.

Nevertheless, her overall point, that the Democrats' health reform law added to the overall solvency of Medicare, is correct. The 2011 report included the same warnings that estimating health care savings for the future is an uncertain process, but it also concluded that the financial outlook for Medicare is "substantially improved as a result of the changes in the Affordable Care Act."

The law reduced spending and increased revenues in several ways. It slows increases in payments to hospitals and nursing homes. It raises Medicare hospital taxes for high earners. And it introduces several new programs aimed at steering the health system away from paying doctors and hospitals per procedure ("fee for service") and instead paying for good outcomes. [PolitiFact, 5/27/11, emphasis added]

CLAIM: Tim Pawlenty Claimed That Coming Close To Default On The National Debt Would Not Be A Big Deal

TIM PAWLENTY: My position many, many months ago when I wrote an op-ed for one of the major national newspapers was this. President Obama was setting up this false choice between default and raising the debt ceiling. And at least for a while, you can take away that false choice by ordering the Treasury to pay the obligations to outside creditors first, and there's enough cash flow to do that for quite some time.

FACT: Even Coming Close To A Default Could Cause A Disastrous Drop In Market Confidence, According To Business Leaders And Economic Officials

"Dire Warnings From Business Leaders" Of A "Market Sell-Off" If Congress Fails To Raise Debt Ceiling. From U.S. News & World Report: "Public efforts by both House Speaker John Boehner and President Obama to convince skeptical new Republican House members to add $2 trillion to the nation's burdensome $14 trillion debt ceiling are being reinforced by dire warnings from business leaders that failing to OK the increase will lead to inflation, an immediate doubling of interest rates and a killer Wall Street crash. 'If they don't increase the debt, there will be a huge impact on the economy,' a Wall Street executive told Whispers on background. 'Interest rates would spike. S&P and Moody's would downgrade U.S. debt, raising the price of borrowing, there would be a market sell-off, it would be a disaster.'" [U.S. News & World Report, 5/10/11, emphasis added]

In Letter To Congress, 62 Business Groups Including National Association Of Manufacturers Said Debt Ceiling Increase "Critical To Ensuring Global Investors' Confidence." As reported by the Wall Street Journal: "Sixty-two business groups, including the American Gas Association, the Telecommunications Industry Association, and the National Association of Manufacturers, urged congressional leaders on Wednesday to raise the federal debt ceiling amid fears that political brinkmanship could lead to another financial crisis. 'Raising the statutory debt limit is critical to ensuring global investors' confidence in the creditworthiness of the United States,' the groups wrote to Speaker of the House John Boehner (R., Ohio), House Minority Leader Nancy Pelosi (D., Calif.), Senate Majority Leader Harry Reid (D., Nev.) and Senate Minority Leader Mitch McConnell (R., Ky.). 'With economic growth slowly picking up we cannot afford to jeopardize that growth with the massive spike in borrowing costs that would result if we defaulted on our obligations. It is critically important that the United States stands fully behind its legal obligations.'" [Wall Street Journal, 5/11/11, emphasis added]

Wall Street: Failure To Raise Debt Ceiling Could Cause 10 Percent Drop In Stock Market - Worse Than Crash In 2008. As reported by U.S. News & World Report:

Among the specifics the sources say they are telling the new members:

-- Inflation could jump, though they aren't giving any percentage growth.

-- Interest rates could double if U.S. debt is downgraded. House loans, for example, that are now below 5 percent, could surge to 9-10 percent, killing any chance of fixing the housing slump or cutting the unemployment rate, now at 9 percent.

-- The stock market could suffer a 10 percent drop, far more significant than the 778 point thrashing Wall Street took when the House rejected the government's $700 billion bank bailout plan in September 2008.

"That market sell-off will look small compared to what we'll see," said a Wall Street executive. [U.S. News & World Report, 5/10/11, emphasis added]

Coming To Brink Of Default By Delaying Debt Ceiling Increase Will Damage Market Confidence In U.S. Debt As Solid Investment.  The Washington Post's Ezra Klein explains:

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.

Confidence, once lost, is hard to regain. "It's like a cat who jumps on a hot stove," says Bill Gross, co-founder of Pimco. "Burn it once, and it doesn't jump back on there." [...]

Which gets to the essential irony of this whole conversation: 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. [Washington Post, 4/19/11, emphasis added]

Fed Chairman Bernanke: Even Coming Close To Default Could Harm Market Confidence. As reported by Bloomberg: "'Even if the debt is paid, there's the issue of market confidence and how the market would respond to the risk of default or even the default of non-debt obligations,' [Federal Reserve Chairman Ben Bernanke] said. 'The worst outcome would be one in which the financial system would again destabilize,' he said, adding that such an occurrence 'would have extremely dire consequences for the U.S. economy.'" [Bloomberg, 5/12/11]

Fox News Sunday

CLAIM: Rep. West Claimed That Only Democrats Have Voted To Cut Medicare

REP. ALLEN WEST: Yes, but I think as you sit here and look at the two of us [Rep. Donna Edwards, (D-MD)], one of us has voted to cut Medicare. When you look at the fact you voted for the Patient Protection and Affordable Care Act, which had $500 million of cuts of Medicare.

FACT: Rep. West And The House GOP Voted For A Budget That Keeps The So-Called Medicare Cuts From The Affordable Care Act

House GOP Budget Retains Affordable Care Act's Medicare Spending Provisions. As reported by the Associated Press: "In a postelection reversal, House Republicans are supporting nearly $450 billion in Medicare cuts that they criticized vigorously last fall after Democrats and President Barack Obama passed them as part of their controversial health care law. The cuts are included in the 2012 budget that Rep. Paul Ryan, R-Wis., unveiled last week and account for a significant share of the $5.8 trillion in claimed savings over the next decade." [Associated Press, 4/13/11 via Yahoo.com]

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

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

[...]

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

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

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

For more on how Republicans and, in particular, Speaker John Boehner (R-OH) have voted for Medicare cuts, click HERE and HERE.

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