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Let the distortions begin: Election 2012 sneak preview

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It has been seven whole weeks now since the midterms, and – like you, perhaps – we've enjoyed watching football and "Glee" uninterrupted by campaign ads. But that doesn't mean there's no campaigning going on. Potential Republican presidential aspirants are off and running, jockeying for exposure on the airwaves and before audiences in key primary states. We have been keeping track, and have noticed some twisting of the truth – already! (We know, you're shocked.)

  • Sarah Palin revisits her earlier claim of "death panels" in the health care law, attributing the term to a different board than she did before the law was passed. But the claim is just as false: The Medicare advisory board doesn't have the power to ration care, and its recommendations can be changed by Congress.
  • Mike Huckabee maintains that he never supported a mandatory cap-and-trade system for reducing carbon emissions. But there's ample evidence in a 2007 speech in New Hampshire — where he referred to "true cap and trade" — that he was endorsing a mandatory program, and has only recently flip-flopped.
  • Mitt Romney's attempts to differentiate his Massachusetts health care overhaul from the federal law enacted this year ring hollow. The laws have many similarities. And he's wrong when he says the federal law cuts half-a-trillion dollars from "the private side of Medicare": cuts to the Medicare Advantage program total $136 billion over 10 years.
  • Ron Paul's claim that the estate tax "especially harms small and family-owned businesses" misses the mark — farms and businesses accounted for less than 10 percent of taxable estates even before the Obama/GOP compromise took effect, and most of them weren't very small. Also, Paul's claim of double taxation is only partly true. Much of the value of big estates is capital gains that has never been taxed.
  • Tim Pawlenty writes that since January 2008, private sector employment has declined while public sector employment has increased. But he's dead wrong about the public sector, where employment has gone down, not up. He used information that was months out of date and distorted by temporary Census Bureau hiring.

Analysis

Most in this group were presidential candidates in 2008, except Sarah Palin, the former Alaska governor who was on the vice presidential ticket, and Minnesota Gov. Tim Pawlenty. While the GOP field is wide open, so far nobody has emerged as a likely challenger to President Obama for the Democratic nomination.

'Death Panels,' revisited

In a Dec. 10 Wall Street Journal opinion piece, Palin misstated the role, makeup and authority of the new Independent Payments Advisory Board — a panel created under the new health care law to slow the growth of Medicare spending. The purpose of her article was to criticize a recent report issued by the National Commission on Fiscal Responsibility and Reform, a bipartisan commission created by President Barack Obama. But, in doing so, Palin also took a swipe at the new Medicare advisory board.

Palin, Dec. 10: It also implicitly endorses the use of "death panel"-like rationing by way of the new Independent Payments Advisory Board — making bureaucrats, not medical professionals, the ultimate arbiters of what types of treatment will (and especially will not) be reimbursed under Medicare.

Her description of the health care panel is wrong on three counts:

  • the board doesn't have the power to ration health care;
  • board members won't be all "bureaucrats," since the law requires that it include medical professionals and other health care providers, as well as medical researchers, experts in health care finance and actuarial science, and representatives of employers and the elderly;
  • board members will not be the "ultimate arbiters," since Congress has the authority to change or block their recommendations, although special legislative procedures make it more difficult than usual for Congress to act.

The new health care panel, which the nonpartisan Congressional Budget Office estimates would save $28 billion from 2015 to 2019, is designed to slow the growth of Medicare spending. The board must come up with "detailed proposals to reduce per capita Medicare spending in years when spending is expected to exceed targeted levels," beginning in 2015, writes Washington and Lee University School of Law Professor Timothy S. Jost in a May article for the New England Journal of Medicine.

But the board cannot propose any " 'death panel'-like rationing," as falsely claimed by Palin. (Yes, it was Palin who popularized the term "death panel" during the health care debate last year. At that time, she used the phrase in reference to another health care proposal — although she was wrong then, too, as we wrote.)

The fact is, the Patient Protection and Affordable Care Act specifically states on page 490 that the advisory board "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums."

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Even if they could ration health care, advisory panel members are not to be the "ultimate arbiters." It's true that the Health and Human Services secretary must implement those recommendations and Congress cannot change them unless it can come up with other ways to save an equivalent amount of money. As we have written before, the intent is to make it difficult for Congress to change the recommendations. Still, members of Congress can make changes, so they are the "ultimate arbiters." (Congress can even waive the requirement that it come up with equal savings by a vote of members in both houses, although that would require a three-fifths vote in the Senate, as the Congressional Research Service explained in a recent report.)

The law is also specific on the membership of the board — which Palin falsely states will be made up of "bureaucrats, not medical professionals." The board will consist of 15 voting members appointed by the president with the advice and consent of the Senate. Before submitting his choices, the president is directed to consult with Democratic and Republicans leaders in both houses of Congress.

The American Medical Association summarizes the makeup of the board this way:

American Medical Association, undated: Appointed members of the IPAB will include individuals with national recognition for their expertise in health finance and economics, actuarial science, health facility management, health plans and integrated delivery systems, health facilities reimbursement, allopathic and osteopathic physicians, other providers of health services, and other related fields who provide a mix of professionals, broad geographic representation, and balance between urban and rural areas.

IPAB members must include (but not be limited to) physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit programs, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research, and expertise in outcomes and effectiveness research and technology assessment. Members must also include individuals representing consumers and the elderly.

Huckabee: Never supported Cap and Trade... period?

On Dec. 15, an article posted on the website RealClearPolitics said: "Huckabee supported mandatory cap-and-trade in late 2007 when he was running for president, as did the eventual nominee, Arizona Sen. John McCain."

Mike Huckabee, the former Arkansas governor, issued a statement later that day on the website of his political action committee, HuckPAC, denying he ever supported a mandatory cap-and-trade system to reduce carbon emissions. "I never did support and never would support it — period."

But there's ample evidence that Huckabee supported mandatory cap-and-trade bills that were before Congress in 2007 and 2008, and has only recently switched his stance — meaning we will likely hear about this again during the Republican primary, if Huckabee runs.

Conservatives generally oppose mandatory cap and trade, which they say amounts to an "energy tax," because the government would mandate limits on greenhouse gases and require companies to buy so-called carbon credits if they exceed the pollution limits. (On the flip side, companies that reduce their emissions would be allowed to sell carbon credits.)

Huckabee's support for "true" cap and trade can be traced to a speech he gave at the Global Warming and Energy Solutions Conference in New Hamsphire on Oct. 13, 2007.

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Huckabee, Oct. 13, 2007: I also support cap and trade of carbon emissions and I was disappointed when the Senate rejected a carbon counting system to measure the sources of emissions because that would have been the first and most important step in implementing true cap and trade.

Huckabee issued a second statement on Dec. 16, just a few days ago, saying the video of his 2007 speech does not prove he supported a mandatory cap-and-trade system. He said he was talking in the video about "a voluntary cap and trade that would allow responsible companies to sell carbon credits to other companies whose emissions exceed the current legal levels." That's nothing new. Such a system has been in existence since 2003 on the Chicago Climate Exchange, where 400 companies have entered legally binding contracts to cut greenhouse gases and can buy or sell pollution credits to meet the terms of their agreements.

In his Dec. 16 statement, Huckabee said his position now is "just as it was in 2007."

But if that's so, Huckabee did a poor job of explaining his 2007 position at the time. He didn't make it clear at the conference — or after the conference — that he was talking about a voluntary cap-and-trade system. Bloomberg News, among others, reported that Huckabee had declared his support for mandatory cap and trade. In a story headlined, "Huckabee Backs Mandatory U.S. Cap on Global-Warming Pollution," Bloomberg wrote:

Bloomberg, Oct. 13, 2007: Republican presidential candidate Mike Huckabee said he supports a mandatory cap on global-warming pollution and that the U.S. has a moral obligation to address climate change.

"It goes to the moral issue," the former Arkansas governor said at a climate-change conference today in Manchester, New Hampshire. "We have a responsibility to reduce greenhouse-gas emissions, to conserve energy, to find alternative forms of energy that are renewable and sustainable and environmentally friendly."

It was widely reported in late 2007 and early 2008 that Huckabee supported cap and trade — often referred to in press accounts as mandatory, never as voluntary. In a roundup of the candidates' position on issues, the Associated Press said this about Huckabee's energy policies:

Associated Press, Dec. 31, 2007: Huckabee: Supports the move to 35 mpg fuel efficiency standard by 2020, from 25 mpg now. Says he supports a mandatory cap and trade system for carbon emissions, while saying he doesn't know how much of the global warming problem is caused by human activity.

In a Jan. 1, 2008, editorial, the New York Times praised McCain for sponsoring a cap-and-trade bill and said Huckabee was alone among the other GOP candidates to support "the idea of a mandatory cap on emissions" — comparing his position with Bush's "demonstrably inadequate voluntary approach" to reducing greenhouse gases:

New York Times, Jan. 1, 2008: Only Mr. Huckabee has dared raise the idea of government regulation, embracing, at least theoretically, the idea of a mandatory cap on emissions. The rest prefer President Bush's cost-free and demonstrably inadequate voluntary approach, which essentially asks industry to do what it can to reduce emissions.

The Iowa City Press-Citizen endorsed Huckabee on Dec. 19, 2007, in part on the basis of his support for a mandatory cap-and-trade bill introduced Oct. 18, 2007, in the Senate by Republican Sen. John Warner of Virginia and Independent Sen. Joe Lieberman of Connecticut:

Iowa City Press-Citizen, Dec. 19, 2007: We commend Huckabee for the ambitious nature of his energy plan. Calling for energy independence in the next 10 years, Huckabee has spoken in favor of a bipartisan bill to establish a cap-and-trade system to reduce greenhouse-gas emissions 65 percent by 2050.

Beyond his speech at the environmental conference, Huckabee voiced support for cap and trade in debates and interviews — without making a distinction between voluntary or mandatory systems.

As part of an ongoing series on issues, CBS' "Evening News" anchor Katie Couric asked the presidential candidates this question: "Do you think the risks of climate change are at all overblown?" Huckabee responded by expressing support for "some cap and trade," referring to the success of the mandatory caps placed on power plants to reduce the emissions of sulfur dioxide and nitrogen oxides.

Huckabee, Dec. 11, 2007: I consider myself a conservationist. I think we ought to have some cap and trade. It worked with acid rain. I think it could work with CO2 emissions. I think we ought to be out there talking about ways to reduce energy consumption and waste. And we ought to declare that we will be free of energy consumption in this country within a decade, bold as that is.

During a presidential debate in Iowa, Huckabee was asked about biofuels and then went on to endorse McCain's remarks about the need to address climate change as "exactly right." McCain sponsored mandatory cap-and-trade legislation in 2003.

McCain, Dec. 12, 2007: What kind of a planet are we going to pass on to the next generation of Americans? It's real. We've got to address it. We can do it with technology, with cap and trade, with capitalist and free enterprise motivation. And I'm confident that we can pass on to our children and grandchildren a cleaner, better world. …

Huckabee: … But climate change and who's causing it is of less importance than what Senator McCain said. He's exactly right. We have done no harm if we take better care of this planet and give it to our children with cleaner air, cleaner soil and cleaner water.

On Dec. 1, 2007, at the College Convention of 2008 in Manchester, N.H., Huckabee told the students: "I may be the only Republican who supports cap and trade. But the reason I do — and I think it's a matter of being a good Republican — conservatives ought to be conservationists."

By 2009, Huckabee made it perfectly clear that he supported a voluntary cap and trade and opposed a mandatory one. In a video posted on HuckPAC, Huckabee said:

Huckabee, June 19, 2009: I have a great fear and a strong opposition to the idea of heavy-handed government mandates of cap and trade. … Let there be no confusion, voluntary cap and trade where businesses out of their own sense of responsibility and, frankly, as a way to show to their consumers and customers that they are doing everything they can for good stewardship of the Earth, that's great. But for the government to come in and start dictating to every company and to every individual exactly how much gas their cows can emit that becomes absurd, and more importantly it becomes extremely expensive.

A witness to Huckabee's remarks at the 2007 conference has no patience with the Arkansan's claim that he hasn't changed his position. Larry Schweiger, president and CEO of the National Wildlife Federation, told us:

Schweiger, Dec. 22: Huckabee was running against Sen. McCain, who was the sponsor of mandatory cap and trade. To suggest that the cap and trade that Huckabee was talking about was voluntary is revisionist history. He was speaking to a large New Hampshire audience who were looking for governmental leadership, not some silly volunteer thing. Huckabee needs to own up to his own words and he never suggested a voluntary program.

While it's clear that Huckabee does not support mandatory cap and trade now, his claim that he "never did support it" is far less convincing.

Distinctions without much difference

As governor of Massachusetts, Mitt Romney signed a bill in 2006 setting up a universal health care system that requires everyone to have health insurance. A precursor to the national health care overhaul signed into law by President Obama earlier this year, the Massachusetts program was criticized by Romney's rivals in the 2008 Republican presidential primaries.

It's likely to be even more toxic for him this time around, what with many Republicans calling for the federal law to be repealed, so Romney is spinning hard to try to differentiate the bills he and Obama signed. But we find much of what he says in that regard to be hogwash. His remarks to Fox News' Sean Hannity this fall are a good representation:

Romney, Nov. 1: The intent of our legislation was to get health care to work like a market, and the intent of the Obama bill, the Obamacare program, is to have government take over health care…Our bill was a state solution to a state problem, within the rights of the Constitution.

Obamacare is a federal intrusion of power, taking over the rights of states and the rights of families, the rights of doctors. It is a massive abuse of constitutional power, and for that reason I think it needs to be repealed, and we need to do a better job to get health care reformed in a way that makes it work more like a market.

There's some other differences, of course. Obamacare raises taxes by a half a trillion dollars. It cuts benefits to seniors on the private side of Medicare by a half a trillion dollars. [Of] course, we didn't do anything like that.

And ours was an experiment. There's some mistakes in it. There's some things I'd do differently the second time around, but the last thing I'd ever do would be to take what we had done for one state, and impose it on the entire nation. …

Let's start with Romney's claim that "the intent of the Obama bill … is to have government take over health care." We can't read Obama's mind or those of congressional leaders, of course, but there's no support for Romney's assertion. Obama's primary stated intention, going all the way back to the presidential campaign, was to try to slow the soaring cost of health care and to make sure that more Americans had health insurance. Romney, too, seems to have been motivated by a desire to provide more state residents with insurance coverage. In more than one speech, Obama explicitly rejected the idea of government-run health care.

Obama, March 3, 2010 : [T]here are some who've suggested scrapping our system of private insurance and replacing it with a government-run health care system. And though many other countries have such a system, in America it would be neither practical nor realistic. … I don't believe we should give government bureaucrats or insurance company bureaucrats more control over health care in America.

We've noted any number of times that the new law builds on the existing health care system, with most patients going to private physicians for care that is covered by private insurers.

That's the core of the Massachusetts system, as well. Both laws have requirements that individuals buy insurance or pay a penalty; in fact, the state law contains a tougher individual mandate than the federal law. Both provide subsidies for those who can't afford policies. Among other similarities: Both laws limit insurance companies' ability to deny coverage to people with preexisting conditions; both require companies over a certain size to offer insurance or pay a penalty.

Romney takes the position that it's not OK for the federal government to do what he did, because states should be able to make their own decisions about whether to shake up the health care system. Whether or not the law is a "federal intrusion of power" or "a massive abuse of constitutional power" is a matter of opinion, but the courts are in the process of deciding its constitutionality. On Dec. 13 a federal judge in Virginia ruled that the law's requirement that individuals buy insurance or pay a monetary penalty is unconstitutional, but two other judges have said otherwise. The question may land on the Supreme Court's docket within a couple of years.

Romney is flat wrong when he says that the law "cuts benefits to seniors on the private side of Medicare by half-a-trillion dollars." Romney's talking about Medicare Advantage, a program under which some seniors have been getting their guaranteed Medicare benefits, plus a few small extras such as a pair of glasses or wellness care, from private insurers. Because the program costs the government more than providing benefits the traditional fee-for-service way, the new law scales it back. But the resulting savings, over 10 years, come to just $136 billion, not nearly as much as Romney claims. Romney's "half-a-trillion" is a reference to total Medicare savings under the bill, including cuts in the future growth of Medicare payments to hospitals.

More estate tax malarkey

Rep. Ron Paul repeated some distortions about the estate tax when the Texas congressman issued a statement Dec. 17 in support of Obama's tax cut deal.

Paul, Dec. 17: This bill also reduces the burden of the estate tax, which according to law is set to return in 2011. This unconscionable tax is an insidious form of double taxation and comes into effect in 2011 with a 55% tax rate. Americans should not be penalized for accumulating savings during their lifetimes. The estate tax especially harms small and family-owned businesses, which often must be sold to pay the tax bill.

We've debunked arguments of this sort before. It is simply not true that the burden of the estate tax falls primarily on small and family-owned businesses, and it's only partially true that it amounts to double taxation.

In a 2006 report, the Tax Policy Center (a project of the centrist Brookings Institution and the liberal Urban Institute) said small farms and businesses – those valued at $5 million or less – "account for only 1 percent of total estate tax liability."

Tax Policy Center, October 2006: Much of the debate about the estate tax centers on its impact on farms and small businesses. Roughly 350 taxable estates-or 2.8 percent of all taxable estates-will be primarily made up of farm and business assets in 2006. Just over 200 will be small farms or businesses (valued at $5 million or less); these small enterprises will account for only 1 percent of total estate tax liability.

More recently, the TPC issued new figures showing much the same thing.

Had the estate tax been allowed to return at the levels that prevailed in 2009, family farms and businesses were projected to account for only 520 of the estates taxed in 2011, or less than 8 percent of the total. Under the Obama/GOP compromise that Paul supported, that number would be cut to 440 estates, of which 290 are worth more than $20 million each.

As for the "double taxation" argument, we have said before that "it's true that some portion of a taxable estate might be made up of cash that was taxed before, when it was earned as income." But any "stocks, bonds, real estate or other holdings" accumulated and unsold by that business would not have been taxed. In a Dec. 16 opinion piece in the New York Times, Roberton Williams of the Tax Policy Center said the estate tax is designed to impose a tax on income "that has escaped tax over a wealthy person's lifetime."

Williams, Dec. 16: Investors pay no tax on capital gains until they sell their appreciated assets. For example, the owner of a small businesses or a long-held stock portfolio never pays tax on their growing value unless he sells these assets. Those substantial unrealized gains are taxed only through the estate levy. Get rid of the estate tax and people will find even more ways to avoid income taxes.

Pawlenty wrong on government workers

Minnesota Gov. Tim Pawlenty, who is set to leave office in early January, penned a Dec. 13 op-ed for the Wall Street Journal that made some false and misleading claims about public and private sector employment. It turns out that he cribbed some of his information from a blog posting that was months out of date, and distorted.

First, Pawlenty claimed that since January 2008, private sector employment has declined while public sector employment has increased.

Pawlenty, Dec. 13: Since January 2008 the private sector has lost nearly 8 million jobs while local, state and federal governments added 590,000.

The private-sector job loss during this period isn't quite as bad as Pawlenty claimed, for one thing. As of November 2010 – the most recent figures available when Pawlenty wrote his article – the loss was just 7.3 million, not 8 million. That's according to the U.S. Bureau of Labor Statistics' seasonally adjusted figures for total private employment.

But Pawlenty went completely off the rails with his public sector figures. The truth is that government employment is down, not up. BLS figures show there were 22,379,000 federal, state and local government jobs in January 2008, but only 22,261,000 in November — a loss of 118,000 jobs.

So how could Pawlenty be so wrong about such basic economic facts? It turns out that he got his information from a nearly six-month-old blog posting on the conservative "Big Government" website run by Andrew Breitbart, according to what Pawlenty's spokesman told our friends at Politifact.com.

The figures in that June 24 article were based on BLS figures from May, and thus were long out of date by the time Pawlenty wrote his Wall Street Journal piece in December. And they were misleading even when they were written by economist Veronique de Rugy. She included a chart stating that government had gained 590,000 jobs during the period. That was true (BLS later revised the figure down slightly to 580,000), but that was due to the Census Bureau's once-every-10-years hiring of temporary workers to conduct the nation's head count. De Rugy failed to mention that key fact in her blog posting, or to note that all those temporary workers would soon be going off the payroll.

Pawlenty might have made his point — accurately if less dramatically — by referring only to federal employment, which has gone up by 98,000 during the period he mentioned, even after shedding nearly all those temporary Census hires. But that increase has been more than offset by the slashing of local government payrolls during the recession. So he's just wrong to claim that total government employment has gone up — in fact it has gone down.

His Journal article also repeats a claim about federal and private-sector employee compensation that we've already flagged as wrong and misleading.

Pawlenty: Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector.

Pawlenty is referring to figures reported by USA Today and the Cato Institute, a libertarian think tank in Washington, D.C. Using data from the Bureau of Economic Analysis, both pegged average total compensation — including salary, the cost of health insurance, pensions and other benefits — at $123,049 for federal employees, twice as much as the $61,051 for private sector workers.

The soon-to-be former governor was careful to specify that the figures represent total compensation, and not just salary, something a number of other Republicans have failed to do when discussing the pay disparity between federal and private workers. But we still find that Pawlenty is oversimplifying the matter.

For one thing, our analysis of the BEA figures showed that the USA Today and Cato Institute averages for total compensation were inflated due to the fact that they included an unspecified amount for retiree health and life insurance benefits, and also included money appropriated by Congress each year to pay "unfunded liabilities" for retirees. Furthermore, the popular GOP talking point glosses over key differences in occupation, skill level, age and education that factor in in determining salaries for federal and private employees.

For more on our analysis of the federal and private employee pay gap, see our Dec. 1 report, "Are Federal Workers Overpaid?"

Eugene Kiely, Viveca Novak, D’Angelo Gore and Kelsey Ferguson


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