Fact Checking the Veep Debate
As I did last week following the first Presidential debate, I’m reposting the Washington Post’s Wonkblog fact check of VP debate, Footnoting the Debate to serve as a reference of the actual facts rather than just accepting what was said.
About those 20 million Americans who will “lose insurance”
Paul Ryan says that under the health care law about 20 million Americans will lose insurance coverage. The figure comes from a 2010 Congressional Budget Office report that estimated the impact of the health care law. There, the neutral agency estimates that the “ACA changes the number of people who will obtain health insurance coverage through their employer in by an amount that ranges from a reduction of 20 million to a gain of 3 million relative to what would have occurred otherwise.”
That’s a pretty decently-sized range and the CBO thinks the most likely situation is one where “about 3 million to 5 million fewer people, on net, will obtain coverage through their employer each year from 2019 through 2022 than would have been the case under prior law.”
It’s worth pointing out that not receiving insurance through an employer doesn’t necessarily mean losing insurance altogether. The CBO expects that many of those that no longer have employer sponsored insurance will obtain coverage on the federally-subsidized state health insurance exchanges.
A look at “Catholic social doctrine”
Biden made reference to “Catholic social doctrine” to care for the needy as being part of his religious faith.
He’s not the first liberal Catholic to do so: A group of Catholic nuns have crusaded across the country against Paul Ryan’s budget, and the US Conference of Bishops argues that it “fails to meet” the Church’s moral principles.
Ryan has defended himself by saying his small government outlook is informed by the Catholic principle of subsidiarity:
To me, the principle of subsidiarity, which is really federalism, meaning government closest to the people governs best, having a civil society of the principle of solidarity where we, through our civic organizations, through our churches, through our charities, through all of our different groups where we interact with people as a community, that’s how we advance the common good.
“No religious institution…has to pay for contraception.”
That was Joe Biden, talking about the health care law’s requirement that employers provide no co-pay birth control. He’s referring there to a compromise that the Obama administration worked out earlier this year, for religious institutions that oppose that provision, where the insurance company – rather than the religious employer – pays for contraceptive costs.
Religious institutions have argued that that isn’t a strong enough protection. Since they pay into the the insurance plan, by contributing to employer premiums, these employers argue that their funds could potentially end up being used to cover the contraceptives they oppose. The guidance from the Obama administration, issued in February, does not address this concern.
Would tax hikes on the wealthy hurt small businesses? Not many of them.
Biden said repeatedly that raising taxes on high-income Americans, as Obama has proposed, would hold 97 percent of small businesses harmless. As my colleague Glenn Kessler has noted, “The Joint Committee on Taxation has determined that only 3 percent of all ‘small businesses’ would be affected by Obama’s proposal,” which would let the Bush taxes on households with income more than $250,000 expire.
Can we close the deficit solely by taxing the wealthy? Doubtful.
At one point in his back-in-forth with the vice-president, Paul Ryan argued that it’s not possible to close the deficit simply by raising taxes on the wealthy—at least if we’re talking about politically realistic tax hikes. Ryan’s basically right about that.
Here’s one concrete way to look at this, courtesy of a Third Way paper, “Necessary but Not Sufficient: Why Taxing the Wealthy Can’t Fix the Deficit.” The study looks at what would happen if Congress let the Bush tax cuts expire for income over $250,000, pared back deductions on the wealthy, expanded the estate tax, boosted the capital gains tax by five percentage points, and adopted a Buffett Rule for incomes over $1 million. That’s slightly more in taxes than what President Obama has proposed. But, Third Way estimates, the national debt would still double as a share of the economy by 2035–not least because of the rising cost of Medicare.
Here’s the report’s bottom line: “Relying on taxes alone to hold long-term deficits at 3 percent of GDP would require phasing in a 60 percent tax increase on the median-income family, raising its annual tax burden by $6,200, in 2012 dollars.” So it’s technically possible. But not many people in Congress are proposing tax increases like that. The White House certainly isn’t.
On the other hand, Third Way also has a paper arguing that spending cuts alone can’t curb the deficit. “If we reduce deficits using only cuts, we will have, for example, 20,000 fewer FBI, DEA, and other federal agents and 50,000 fewer TSA screeners.”
That’s why most of these bipartisan deficit commissions tend to advocate a mix of tax hikes and spending cuts.
No, six studies did not debunk the Tax Policy Center’s finding on the Romney tax plan
Paul Ryan repeated his campaign’s talking point that six studies have debunked the Tax Policy Center’s claim that it is “mathematically impossible” for Romney to implement all his tax cuts, achieve revenue neutrality, not raise taxes on the middle class, and not raise taxes on investments.
I can’t believe we have to keep saying this, but no, six studies did not say that. One study, from Harvard’s Martin Feldstein, only found that the Romney plan is possible by fiddling with the definition of “middle class”, and confirmed TPC’s finding under the definition TPC used. Another, from AEI’s Matt Jensen, found that if you subject some investment income, namely interest on state and local bonds, to taxes, the plan need not raise middle class taxes. But that leaves TPC’s claim untouched. Another, from Princeton’s Harvey Rosen, relied on implausibly high estimates of the growth effects of the Romney tax plan, and even then confirmed the TPC finding when comparing the plan to a baseline where the Bush tax cuts expire. And another, from the Heritage Foundation’s Charles Dubay, is based on a misestimation of the cost of an obscure estate tax provision.
What’s more, not all of these are actual studies. Jensen’s critique, for example, came in the form of a blog post. That says nothing about its quality, just that the Romney campaign’s characterization is a bit odd. Only three working papers or studies – one from Rosen, one from Dubay, and one from Feldstein – attempt to rebut the TPC study, and none succeed in rebutting TPC’s actual points.
In short, the Romney plan is mathematically impossible. Biden is right. Ryan is wrong.
Ryan’s support of partially privatizing Social Security
The moderator mentioned that Ryan had supported Bush’s plan to partially privatize Social Security. In fact, Ryan originally had his own plan to create a voluntary private option, which “would have allowed workers to funnel an average of 6.4 percent of their 12.4 percent payroll-tax contribution to a private account,” as my colleague Dylan explained. Bush actually rejected Ryan’s plan, which was estimated to cost more than $2 trillion, for being too profligate. Ryan backed Bush’s own privatization push as well.
Will Medicare cuts drive ‘one-sixth’ of hospitals out of business?
That’s the charge Rep. Ryan made about the health care law’s $716 billion in Medicare cuts. He’s referring to this testimony from the independent Medicare actuary Rick Foster, where he said that his department projections could see 15 percent of hospitals becoming unprofitable:
Providers for whom Medicare constitutes a substantial portion of their business could find it difficult to remain profitable, and, absent legislative intervention, might end their participation in the program (possibly jeopardizing care for beneficiaries. [Our] simulations…suggest that roughly 15 percent of [hospitalization] providers would become unprofitable within the 10-year projection as a result of the [spending cuts].”
It’s worth noting that the Medicare reform plan that he co-authored with Sen. Ron Wyden (D-Ore.) would have maintained these very same cuts.
Republicans wanted deficit-funded stimulus too
Paul Ryan accused Joe Biden and the Obama administration of increasing the budget deficit with the stimulus package. Whether the stimulus will end up increasing the deficit is an open question. Larry Summers and Brad DeLong have argued that the growth it caused could end up increasing future tax revenue enough to make it deficit-neutral.
But in any case, there was no disagreement about deficit-financed stimulus policy in early 2009. Republicans wanted it to. For example, arch-conservative Sen. Jim DeMint proposed making all the Bush tax cuts permanent, cutting the top rate to 25 percent, cutting the corporate tax to 25 percent, and almost eliminating the estate tax as a stimulus measure. That costs $3 trillion over ten years, four times the sticker price of the American Recovery and Reinvestment act. All but four Republicans in the Senate voted for that.
Further almost all Republicans voted for the Economic Stimulus Act of 2008 when the recession was just getting underway in March, which increased the deficit by about $156 billion. Paul Ryan and all but 25 House Republicans voted for it. All but 16 Senate Republicans did.
Finally, Mitt Romney took to National Review in late 2008 to argue for a deficit-financed stimulus package, including tax cuts but also aid to renewable energy, infrastructure spending, and aid to states and localities, all of which ended up becoming key parts of the 2009 stimulus act. He acknowledged the deficit cost of this plan and proposed following up the plan with entitlement reform to blunt the impact on the deficit.
Death panels and vice presidential debates
Joe Biden quipped that death panels seem to come up at each vice presidential debate he’s participated in. But death panels weren’t even an idea back in 2008, before the health reform law even existed. They’re usually traced back to 2009. Former vice presidential candidate Sarah Palin started talking about the idea that summer, as the health reform debate was heating up.