Some Politics

For the Republican debate this evening, Bloomberg News ran a blog showing some of the claims made by the candidates, along with a “reality check” of the background and the facts of the matter (at least as Bloomberg sees them…I make no representation that these are “really” the facts, but it’s interesting to get another opinion.) By the way, if I find something similar for Democrats, I will do the same. I have reprinted that blog below:

The Claim: Mitt Romney said that the federal government, using its “friends” on the National Labor Relations Board, is telling Boeing Co. “you cannot build a factory in a non-union state.”
The Background: The NLRB’s acting general counsel sued Boeing in April over its decision to locate a 4,000-job factory in South Carolina, saying the move was intended to punish union activity at its base in Washington.
The Facts: The NLRB didn’t say Boeing had to close the South Carolina plant. It called for increasing production at the plane maker’s commercial hub in Washington state to an equivalent level as planned for South Carolina.

The Claim: Mitt Romney said that President Barack Obama's health-care law raised spending by $1 trillion.
The Background: The 2010 health-care law that Obama signed included a mix of pending increases and cuts.
The Facts: The law increases spending by $788 billion over 10 years, while cutting spending by $931 billion over the same time for a net deficit reduction of $143 billion, the Congressional Budget Office estimated in March 2010.

The Claim: Representative Michele Bachmann said that she was a "lone voice" in Washington urging Congress not to raise the federal debt ceiling this summer. Bachmann said she opposed giving "Barack Obama another $2.4 trillion blank check to spend."
The Background: Following a contentious and partisan debate, Congress voted to raise the federal limit on government borrowing this summer by as much as $2.4 trillion, in exchange for an agreement to find at least that much in budget savings over the next decade. Bachmann and many other Republican lawmakers opposed the agreement, saying government needed to curtail spending in order to stop borrowing.
The Facts: The debt ceiling, which stood at $14.3 trillion before being raised this summer, covered obligations and spending Congress had already authorized. If Congress hadn't raised the limit by early August, the government wouldn't have been able to meet up to 40 percent of its obligations. President Obama would have been forced to decide whom to pay -- choosing among Social Security recipients, veterans, investors in U.S. government debt and others. Although the debate has often been testy, Congress had always raised the debt ceiling.

The Claim: Herman Cain said Bloomberg News' analysis of his 9-9-9 plan is incorrect. "The reason it's incorrect is because they start with assumptions we don't make," he said.
The Background: Cain's proposal would eliminate the current U.S. Tax code and tax sales transactions and gross income for individuals and businesses at 9 percent while eliminating levies on capital gains. It also ends the payroll tax that funds Social Security and corporations wouldn't pay a tax on dividends.
The Facts: Cain said his campaign has received an independent revenue analysis of his plan, though that analysis hasn't been publicly released. He also hasn't detailed the specific assumptions his campaign is using. Working with the only data publicly available, Bloomberg News calculated that the 9-9-9 plan would have generated about $2 trillion if it were in place in 2010, compared with the $2.2 trillion the government collected that year. Cain's plan would generate $922.1 billion from the sales tax, $912 billion from the individual income tax and $127.7 billion from the tax on corporations. Cain said that his plan would win passage in Congress. Congress has been reluctant to eliminate some of the most popular tax benefits currently in the code, such as the mortgage interest deduction, which survived the 1986 tax code overhaul.

The Claim: Michele Bachmann said Obama's health-care law will be run by a board of 15 political appointees who will "make all the major health-care decisions for over 300 million Americans."
The Background: Bachmann was referring to the ``independent payment advisory board," a panel of 15 health-care authorities established by the 2010 health-care law to help curb Medicare spending. Beginning in 2015 the panel will begin proposing cuts to Medicare if yearly spending exceeds targets set by the law. Congress could overrule the panel only with a supermajority in the Senate or if it comes up with an alternate plan that saves an equivalent amount.
The Facts: The board only has authority over Medicare, in which about 48 million elderly and disabled Americans are now enrolled, not the 300 million Bachmann mentioned. The law doesn't grant the panel power to make health-care decisions and prohibits the group from cutting benefits, changing eligibility rules or increasing beneficiaries' premiums or cost-sharing. Instead, the board's main tool for cutting spending will be reducing payments to providers. Link to the law: http://docs.house.gov/energycommerce/ppacacon.pdf

The Claim: Representative Michele Bachmann of Minnesota, said the economic meltdown "can be traced back" to federal government housing policies like the Community Reinvestment Act and the implicit backing of mortgage firms Fannie Mae and Freddie Mac. She also said that the Dodd-Frank Act ``institutionalized all of these problems that were put into effect by the federal government.''
The Background: In 2008 the U.S. financial system was on the brink of failure in the wake of the subprime mortgage crisis. A $700 billion bank bailout was required and lawmakers, economists, academics and federal regulators spent much of the next three years attempting to identify the causes of the crisis, which accelerated in 2007 and reached its height with the September 2008 failure of Lehman Brothers Holdings Inc.
The Facts: While Fannie Mae and Freddie Mac, which were seized in 2008 by the federal government, played a large role in the mortgage crisis due to the volume of loans they purchased that went sour, nine of the 10 commissioners on the Financial Crisis Inquiry Commission agreed that the two mortgage firms were not the cause of the crisis. The majority FCIC report, signed by six Democratic appointees, blamed banks and federal regulators for the crisis. A dissent by three Republican members blamed the crisis on 10 factors, with the inflation of the credit bubble by the Federal Reserve serving as the leading catalyst. Fannie and Freddie were not a primary cause, the three Republicans said.
Research published by the Federal Reserve Banks of San Francisco and Richmond concluded that the Community Reinvestment Act, a 1977 law aimed at increasing mortgage loans to lower-income Americans, had little to do with fueling the subprime mortgage crisis.
The Dodd-Frank Act, enacted by President Barack Obama in 2010, did nothing to institutionalize a government guarantee in the mortgage market. The law largely ignored the mortgage giants.

The Claim: Republican candidate Herman Cain pledged to present a balanced budget a year after taking office. He said the only way to bring down the national debt is ``the first year that I'm president and I oversee a fiscal-year budget, make sure that revenues equals spending. If we stop adding to the national debt, we can bring it down.''
The Background: Cain, the former chief executive of Godfather's Pizza with no experience in elective office, is seeking to demonstrate a command on the economy and fiscal issues to compete with former Massachusetts Governor Mitt Romney.
The Facts: A proposal by the heads of President Barack Obama’s debt commission to cut the budget by $4 trillion wouldn’t wipe out the deficit for more than 25 years. According to a research group, the Bipartisan Policy Center, there will be an $830 billion deficit in fiscal year 2013 assuming current policy such as the extension of tax rates. To balance the budget in fiscal year 2013 through spending cuts alone, it would require a reduction equal to 25 percent of all spending, the policy center said, citing Congressional Budget Office projections. That would be more cuts than it would take to eliminate one year's spending on Medicare and Medicaid.

The Claim: Michele Bachmann said that ``nine years from now the Medicare hospital Part B trust fund is going to be dead flat broke."
The Background: Medicare Part A pays for inpatient hospital services. Medicare Part B pays for outpatient services such as doctor visits.
The Facts: The hospital trust fund is Part A, not Part B. Part A is estimated to be exhausted in 2024, not in nine years, according to the Medicare trustees' annual report released this year. Under one set of estimates by the trustees, the Part A trust fund's expenditures begin to exceed income in nine years, but will not be ``broke.'' In the report, the trustees said the Part B trust fund is ``adequately financed over the next 10 years and beyond.''

The Claim: Texas Governor Rick Perry said he will offer a plan “for getting America independent on the domestic energy side.”
The Background: Presidents since Richard Nixon in 1973 have set a goal of U.S. energy independence. Oil imports have risen since then and accounted for 49 percent of U.S. consumption last year.
The Facts: The U.S. had proven reserves of 19.12 billion barrels of oil, compared with 1.33 trillion barrels in global reserves as of 2008, according to the U.S. Energy Information Administration. The agency forecast in April that the U.S. will rely on imported fuels for 42 percent of consumption in 2035.

The Claim: Newt Gingrich, former speaker of the House, said Federal Reserve Chairman Ben S. Bernanke has ``in secret spent hundreds of billions of dollars'' on bailouts of financial institutions and that nobody in the news media has demanded transparency from the central bank.
The Background: The Fed stretched its emergency powers during the financial panic of 2008 to rescue Bear Stearns Cos. and American International Group Inc. It also created unprecedented lending tools to provide funds to banks, mutual funds and large corporations.
The Facts: The Fed made loans to financial institutions -- it didn't spend any money, and has said it has incurred no losses. While the central bank kept much of the information on the identity of borrowers confidential at the time, the Dodd-Frank Act and lawsuits by Bloomberg News and Fox News resulted in disclosure of the recipients in late 2010 and early 2011. The Fed has separately spent $2.3 trillion purchasing housing and government debt as part of monetary policy.