Distort, Distract & Lie. That’s all the Democrats have going for them at the DNC convention.
We are not going to let our campaign be dictated by fact checkers.”
— Former president Bill Clinton, quoting Romney campaign pollster Neil Newhouse
Whew. In a previous life, The Fact Checker covered the Clinton White House and always marveled at Bill Clinton’s speechifying, his apparent command of policy and his sometimes slippery use of the facts. We are going to offer an initial take on some of his claims — and those of other Democrats — and then may come back to others in the coming days. Everyone needs to get some sleep.
“He [Obama] has offered a reasonable plan of $4 trillion in debt reduction over a decade. For every $2.5 trillion in spending cuts, he raises a dollar in new revenues, 2.5 to 1. And he has tight controls on future spending. That’s the kind of balanced approach proposed by the Simpson-Bowles commission, a bipartisan commission. … It passes the arithmetic test.”— Former president Bill Clinton
“President Obama’s plan uses the bipartisan commission’s balanced approach. It reduces the deficit by more than $4 trillion.”— Rep. Chris Van Hollen (D-Md.)
The repeated claim that Obama’s budget reduces the deficit by $4 trillion is simply not accurate.
By the administration’s math, you have nearly $3.8 trillion in spending cuts, compared to $1.5 trillion in tax increases (letting the Bush tax cuts expire for high-income Americans). Presto, $1 of tax increases for every $2.50 of spending cuts.
But virtually no serious budget analyst agreed with this accounting. The $4 trillion figure, for instance, includes counting some $1 trillion in cuts reached a year ago in budget negotiations with Congress. So no matter who is the president, the savings are already in the bank.
Moreover, the administration is also counting $848 billion in phantom savings from winding down the wars in Iraq and Afghanistan, even though the administration had long made clear those wars would end.
In other words, by projecting war spending far in the future, the administration is able to claim credit for saving money it never intended to spend. (Imagine taking credit for saving money on buying a new car every year, even though you intended to keep your car for 10 years.)
Rather than good arithmetic, independent budget analysts called the maneuver “a major budget gimmick.”
The administration also counts $800 billion in savings in debt payments (from lower deficits) as a “spending cut,” which is a dubious claim. We didn’t realize that debt payments were now considered a government program.
There are a number of other games being played, so fake money is being used to pay for real spending projects. In effect, most of Obama’s claimed deficit reduction comes from his proposed tax increases.
Meanwhile, both Clinton and Van Hollen claim Obama’s budget has the “balanced approach” of the Simpson-Bowles deficit commission proposal. But the Simpson-Bowles plan is actually quite different, calling for tough spending cuts and substantial tax reforms — not the faux proposals contained in the president’s budget.
“We could have done better, but last year the Republicans blocked the president’s job plan, costing the economy more than a million new jobs. So here’s another job score. President Obama: plus 4.5 million. Congressional Republicans: zero.”— Clinton
Obama’s jobs plan was more of a rhetorical device, aimed at Republicans, rather than a real plan. He even used the same $1 trillion in previously-agreed savings with Republicans, mentioned above, that was supposed to be in his budget in order to pay for this plan. The jobs plan also would be paid for with the imaginary money from winding down the wars in Iraq and Afghanistan. (The administration argued that the budget had never passed, so the money could be used again.)
Get the picture? Clinton praises Obama both for his sound budget math and for his jobs plan, even though the money to fund the budget and the jobs plan is used twice. That certainly doesn’t pass the Arkansas 2+2=4 test.
We have noted the problems with Obama’s claim that 4.5 million private sector jobs have been created. (It is a cherry-picked figure.) As for whether 1 million jobs would be created through Obama’s jobs plan, that is merely a fuzzy and optimistic projection. Bloomberg News surveyed 34 economists and found that the median estimate was that the plan would add or keep 275,000 workers on payrolls.
“During this period, more than 500,000 manufacturing jobs have been created under President Obama. That’s the first time manufacturing jobs have increased since the 1990s.”— Clinton
Clinton is referring to the period since February 2010, the administration’s preferred date for counting employment figures. If you count from the beginning of Obama’s term, Bureau of Labor Statistics data show that manufacturing jobs have declined by more than 500,000. Manufacturing jobs have been on a long steep decline since the middle of Clinton’s term, with some 2 million jobs lost during the recession that started at the end of George W. Bush’s term.
“More than 3 million young people between 19 and 25 are insured for the first time because their parents’ policies can cover them.”— Clinton
Interestingly, Clinton frames this more accurately than President Obama. The Department of Health and Human Services in June reported that more than 3 million young adults would not have health insurance without the health-care law.
Obama prefers to cite a private survey, published by the Commonwealth Fund, that showed that 6.6 million young adults “stayed on or joined their parents’ health plans” in 2011. Not all of those people were uninsured; some simply joined their parents’ plans for other reasons.
“For the last two years, after going up at three times the rate of inflation for a decade, for the last two years, health care costs have been under 4 percent in both years for the first time in 50 years.”— Clinton
Clinton tried to attribute this decline in health costs to the health-care law, but much of it has not yet been implemented. Most economists say the slowdown is more likely because of the lousy economy.
“It’s tempting to think that provider initiatives are truly denting costs, but it’s hard for changes in provider behavior to influence costs before they occur,” said a recent article in Modern Healthcare magazine. “Instead, the drop in healthcare cost growth is primarily attributable to the Great Recession’s impact on employment, private health insurance, government revenues and budgets.”
Indeed, government actuaries in June published an article in Health Affairs predicting health-care costs would begin to spike as the health-care law was implemented. “For 2011 through 2021, national health spending is projected to grow at an average rate of 5.7 percent annually, which would be 0.9 percentage point faster than the expected annual increase in the gross domestic product during this period,” the article said.
“Soon the insurance companies — not the government, the insurance companies — will have millions of new customers, many of them middle-class people with preexisting conditions who never could get insurance before.”