Health Care -- Fact-checking FactCheck.org

October 21, 2008

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers

HEALTH CARE

Fact-checking FactCheck.org

Sen. John McCain's (R-AZ) first health care plan released in 2007 was supposed to be financed by exposing health benefits to income and payroll taxes. But analysts argued that doing so would result in a massive tax increase on the middle class, so the campaign flip-flopped earlier this month and said that McCain would finance the plan by making major reductions to Medicare and Medicaid. Independent analysts estimated that the reductions "could result in cuts of $1.3 trillion over 10 years to the government programs." Last week, Sen. Barack Obama's (D-IL) presidential campaign released a television ad criticizing McCain for his proposal to pay for his health care plan with "major reductions to Medicare and Medicaid." The ad's assertion of potential benefit cuts was based on an analysis by the Center for American Progress Action Fund (CAPAF), which found that in order for McCain to close his $1.3 trillion budget gap, he would have to "cut Medicare by 13 percent over 10 years" as well as slash "Medicaid spending by 13 percent over 10 years." CAPAF calculated that neither McCain's Medicare and Medicaid spending would keep pace with medical inflation growth and enrollment increases, so his proposal would require "cuts in benefits, eligibility, or both."

FACTCHECK.ORG GIVES McCAIN A PASS: In an article yesterday, FactCheck.org argued that the CAPAF is "twisting facts to scare seniors" about McCain's proposal to cut $1.3 trillion from Medicare and Medicaid to finance his health care tax credits. But FactCheck.org's argument is flawed, as it relies solely on the denials of McCain senior policy adviser Douglas Holtz-Eakin, instead of conducting a thorough analysis of the implications of McCain's proposals. In the same interview in which he revealed that McCain "would pay for his health plan with major reductions to Medicare and Medicaid," Holtz-Eakin claimed that McCain's plan would still provide "the benefit package that has been promised." Since this level of cuts would reduce spending growth below inflation and population growth, CAPAF concluded that McCain could make up the budget shortfall by cutting "benefits, eligibility or both." FactCheck.org is taking the McCain campaign's explanations at face value without examining the conflicting assertions the campaign is making, namely that their proposal is budget neutral, does not raise taxes for most or all taxpayers, and does not cut Medicare or Medicaid benefits. It is a rank distortion for FactCheck.org to claim that CAPAF's analysis twists McCain's plan, when all it does is try to analyze the consequences of $1.3 trillion in cuts to Medicare and Medicaid.

McCAIN'S MATH DOESN'T WORK: CAPAF's analysis was based on the McCain campaign's repeated assertions that its health care plan is budget neutral. During the vice presidential debate, for instance, Alaska Gov. Sarah Palin (R) explained McCain's health care plan as being "budget neutral. That doesn't cost the government anything. ... But a $5,000 health care credit through our income tax that's budget neutral." The McCain campaign, which estimated that his health care tax credits will cost $3.6 trillion over the decade, initially said it would pay for the plan by taxing workers' health benefits, which are largely tax-free today. But, as CAPAF has previously argued, this would result in either a tax increase of $1,100 on the average family or a $1.3 trillion budget shortfall. Earlier this month, Holtz-Eakin told the Wall Street Journal that McCain would rely on "major reductions to Medicare and Medicaid" to fill the budget gap. Examining the consequences of McCain's newfound funding mechanism, CAPAF calculated that McCain's reduction does not keep up with medical inflation and enrollment rates and would require McCain to cut benefits, eligibility or both. Additionally, the McCain campaign has overstated the potential for pain-free Medicare and Medicaid "savings" that are not really "cuts." For instance, in July, McCain opposed cutting subsidies to insurers through Medicare Advantage, but now his campaign is wildly overstating the savings that such cuts would provide. The McCain campaign says the cuts would save $1 trillion over 10 years, which is more than six times the actual projected savings of $149 billion.

McCAIN HAS ALWAYS WANTED TO CUT MEDICARE SPENDING: Speaking to the Wall Street Journal this month, Holtz-Eakin claimed that "the campaign has always planned to fund the tax credits, in part, with savings from Medicare and Medicaid." Though Holtz-Eakin's revelation was new, it was not out of line with past statements from the McCain campaign. After its health care plan was released, the McCain campaign said that it planned to "reduce the growth in Medicare spending." McCain advisers reiterated the goal this past weekend, saying that the senator would force Congress to "control the growth" of Medicare spending. In fact, throughout his career, h has regularly supported slashing Medicare benefits and limiting eligibility. He has voted to cut, restrict or underfund Medicare at least 28 times while voting to restrict access to Medicare at least two times. In 1997, McCain voted in favor of raising the eligibility age for receiving Medicare from 65 to 67 with the change being phased in between 2003 and 2027. McCain has also voted against Medicare's future by opposing efforts to extend its solvency at least nine times.

RADICAL RIGHT -- CONSERVATIVE LAWMAKER SAYS 'LIBERALS HATE REAL AMERICANS': On Saturday, Rep. Robin Hayes (R-NC) warmed up the crowd at a political rally for Sen. John McCain (R-AZ). Hayes gave an incendiary speech, claiming that liberals hate "real Americans." "[L]iberals hate real Americans that work and achieve and believe in God," Hayes said. Other conservatives have recently been blasting progressive ideas as "socialist" or "Marxist." These memes have been picking up steam in the right wing in recent weeks. Most prominently, Rep. Michele Bachmann (R-MN) exploded on Friday and said that liberals were "anti-American." Hayes is the same congressman who, in 2006, said, "Stability in Iraq ultimately depends on spreading the message of Jesus Christ, the message of peace on earth, good-will towards men." Politico spoke with Hayes's spokesperson, who denied that the congressman ever made the statements. New York Observer reporter Jason Horowitz, who originally reported on Hayes's comments, stands behind his story: "I was there. That's what I heard. I was taking notes while he was talking."

ECONOMY -- INHOFE PUSHES TAX CUTS FOR THE RICH TO FIX AILING ECONOMY: Yesterday, Sen. James Inhofe (R-OK) outlined his new "six-point economic plan" that he claimed will "get our economy back on track." Yet it turns out that his six point plan is actually a list of multiple ways to propose cutting more taxes for the wealthy. InHofe wants to make President Bush's 2001 and 2003 tax cuts permanent, but as the Center on Budget and Policy Priorities (CBPP) notes, much of that tax break would go to those making over $1 million a year and to the top 1 percent of households, while the bottom 60 percent of taxpayers would see only 12 percent of the benefit. Inhofe also proposed relaxing limits on Individual Retirement Account (IRA) contributions to promote savings, but CBPP notes that such a move would do "little or nothing to assist low- and moderate-income households to save more for retirement." Inhofe also wants to eliminate capital gains rate and repatriate foreign earnings but the benefits from such a cut go overwhelmingly to millionaires. For conservatives like Inhofe, it seems, there's nothing that a tax cut for the rich won't fix.

ENERGY -- CALIFORNIA'S GREEN ECONOMY HAS CREATED 1.5 MILLION JOBS, $45 BILLION: A major new study by economist David Roland-Holst shows that -- contrary to conservative assertions that progressive energy policies would "ravage the countryside" with "huge economic costs" -- a green economy can restore the middle class, lift people out of poverty, and protect the planet. The study, "Energy Efficiency, Innovation, and Job Creation in California," reveals that "California's energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000." This job growth "has contributed approximately $45 billion to the California economy since 1972." Today, California's per-capita electricity demand is 40 percent below the national average. "Consumers were able to reduce energy spending," the study said, and "when consumers shift one dollar of demand from electricity to groceries," they create jobs among retailers and other businesses. The New York Times noted that the study "comes as state and regional initiatives on climate-change policies have been gathering momentum." The Center for American Progress has found that a $100 billion investment in a green economy can create two million new jobs nationwide.

After watching conservatives usher in the biggest expansion of government since FDR, the Washington Times asks, "Is limited government passe?" The concern for some conservatives "is that America may no longer care about the government’s size, scope and role."

Yesterday, U.S. Special Counsel Scott Bloch announced his intention to resign when his term ends in January. Bloch, tasked with protecting federal whistle-blowers, is currently under investigation for retaliating against "employees who opposed his policies." The FBI raided his home and office last year "amid allegations that he destroyed evidence and potentially lied to Congress."

"Despite his stated desire to close the American prison at Guantánamo Bay, Cuba, President Bush has decided not to do so, and never considered proposals drafted in the State Department and the Pentagon that outlined options for transferring the detainees elsewhere." Bush is assuming that Guantánamo will remain open not only for the rest of his presidency, "but also well beyond."

"More families with children are becoming homeless as they face mounting economic pressures, including mortgage foreclosures, according to a USA TODAY survey of a dozen of the largest cities in the nation." Local authorities report an increase in families needing help in Atlanta, Boston, Denver, Minneapolis, and New York, among others.

Sen. Ted Stevens (R-AK) "admitted during his corruption trial that he used his Senate staff for personal duties, a possible violation of ethics rules according to experts." Stevens and his wife Catherine said that one of his aides "coordinated the couple's finances, paid their bills and helped monitor the home remodeling project central to the charges against him."

A federal appeals court Monday blocked the release of 17 Chinese Muslims from Guantanamo Bay into the United States, saying it needed to hear further arguments. On Oct. 7, a federal judge had ordered the immediate release of the detainees, who the Bush administration no longer considers to be enemy combatants, and who have been held at the prison for seven years.

Even though the new GI Bill passed by Congress is called the "Post-9/11 GI Bill," the new legislation "won't take effect until Aug. 1, 2009 -- eight years after" the 9/11 attacks. By that time, some who served in Iraq or Afghanistan will have already graduated from college. "And because the bill is not retroactive, it won't help [them] at all."

And finally: In recent weeks, conservatives have been aggressively attacking the Association of Community Organizations for Reform Now (ACORN), saying that it is "destroying the fabric of democracy." However, Roll Call notes that "the effects of those attacks have been spilling over to other similarly named groups." Five local papers near Los Angeles, known as the "Acorn newspapers" after the oak tree nut, "even had to write an editorial clarifying that they're not THAT Acorn."

"The U.S. Department of Energy says 84 military bases have shifted from traditional incandescent light to the use of compact fluorescent light bulbs."

THINK PROGRESS: The Heritage Foundation's presidential-election-year ritual.

WONK ROOM: Sen. James Inhofe (R-OK) proposes tax cuts for the wealthy to "get our economy back on track."

YGLESIAS: National Review's Jay Nordlinger asks why the press won't start covering fictitious fraud.

FEMINISTING: Anti-choice website tells teenagers that being a teen mom is easy.

CALIFORNIA: Study finds that Los Angeles police stop more blacks than whites.

EDUCATION: "Eco-friendly schools" is a concept catching on in schools around the nation.

ENVIRONMENT: Nineteen states face the decision of whether or not to allow offshore drilling for oil and natural gas.

"This is a big and strong economy."
-- Secretary of State Condoleezza Rice, 10/20/08

VERSUS

"[T]he nation is in recession. The recession is coast to coast."
-- Mark Zandi of Moody's Economy.com, 10/21/08

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