Campaign 2010

Mar 27, 2012

FACT CHECK: Paul Ryan’s New Op-Ed is Filled with Falsehoods

In today’s Tampa Bay Times, Republican Budget Committee Chairman Paul Ryan (WI-01) makes a series of false and misleading claims about the House Republican budget. Ryan claims that the plan would improve the economy, keep promises for retirement security, close tax loopholes, and even that it preserves traditional Medicare.

In reality, the Republican budget would do none of that. Check the facts for yourself.

Ryan’s Republican budget would end the Medicare guarantee and shift costs to seniors according to the independent Congressional Budget Office, while protecting tax breaks for the ultra wealthy and Big Oil companies. The plan also threatens to destroy millions of American jobs, while increasing the deficit.

1) False Claim: Ryan writes, “The Path to Prosperity, which builds on reforms and bipartisan solutions offered over the last year, provides a future of economic prosperity and opportunity…”

Fact Check: Ryan’s plan threatens the economy and will cost American jobs.

  • Ryan Plan Destroys 1.3 Million Jobs in 2013. “Paul Ryan’s latest budget doesn’t just fail to address job creation, it aggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using a standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.” [Economic Policy Institute, 3/21/12]
  • Ryan’s Plan Would Impede the Nation’s Economic Recovery. “These extreme cuts and changes would greatly impede the nation’s economic recovery, and hurt those on the middle and lower economic rungs who suffered most from the recession.” [New York Times Editorial, 3/20/12]
  • Ryan’s Plan Threatens the Middle Class. “Each component of the new House Republican budget threatens the middle class while doing nothing to add jobs or grow our economy. It ends the guarantee of decent insurance for senior citizens, breaking Medicare’s bedrock promise. It slashes investments in education, infrastructure, and basic research, all of which are key drivers of economic growth and mobility. And it cuts taxes for those at the top, asking the middle class to pick up the tab. It’s a budget designed to benefit the top 1 percent at everyone else’s expense.” [Center for American Progress, 3/20/12]

2) False Claim: Ryan’s plan “delivers on the promises made to the American people… [and] strengthens health and retirement security...”

Fact Check: Ryan’s plan ends Medicare and would force seniors to pay more for coverage.

  • Congressional Budget Office: Ryan’s Plan Would Likely Shrink Medicare Benefits, Increase Number Of Uninsured. “Medicare benefits would likely shrink under Rep. Paul Ryan’s (R-Wis.) latest proposal, the nonpartisan Congressional Budget Office said Tuesday. The budget office also said the number of people without health insurance could be ‘much higher’ under Ryan’s plan because it would repeal President Obama’s healthcare law. Ryan’s Medicare plan would convert some of the program’s funding into subsidies for private insurance. Seniors could choose between the traditional single-payer program or a private plan.” [The Hill, 3/20/11]
  • AARP: Ryan’s Plan Would Increase Health Care Costs for Older Americans. AARP CEO Addison Barry Rand wrote to Members of Congress on House Budget Committee Chairman Paul Ryan’s Fiscal Year 2013 budget resolution. In the letter, Rand wrote: “this proposal simply shifts these high and growing costs onto Medicare beneficiaries, and it then shifts even higher costs of increased uninsured care onto everyone else […] By creating a ‘premium support’ system for future Medicare beneficiaries, the proposal is likely to simply increase costs for beneficiaries while removing Medicare's promise of secure health coverage -- a guarantee that future seniors have contributed to through a lifetime of hard work.” [AARP Letter, 3/21/12]
  • Ryan’s Plan Would End Medicare’s Guarantee to Pay for Older American’s Health Care Needs. Ryan’s plan would mean that “older Americans no longer have a guarantee that Medicare will pay for their health needs […] “Over all, about half of Mr. Ryan’s $5 trillion in cuts over a decade would come from health care. His plan to convert Medicare to a ‘premium support’ system, though less damaging than last year’s proposal, still weakens a guarantee to the elderly and risks driving up costs for future beneficiaries.” [New York Times Editorial, 3/20/12]

3) False Claim: Ryan’s plan provides a “future where we pay down our $15 trillion national debt.”

Fact Check: Ryan’s plan increases the deficit.

  • Ryan’s Plan Adds $3.1 Trillion to the Deficit; Adds More to the Deficit than Under Current Law. “Ryan’s blueprint, ‘The Path to Prosperity,’ would add $3.127 trillion to the deficit during the decade spanning 2013 to 2022, according to a table on page 88 of the plan. The Congressional Budget Office estimated in its March 2012 projections that if ‘current laws generally remain unchanged,’ the federal government would incur deficits totaling $2.887 trillion from 2013 to 2022. In other words, Congress would save more money over the next decade if it allowed current law to continue than if it adopted Ryan’s budget.” [The Hill, 3/20/12]
  • Tax Expert Called Ryan’s Budget Plan Phony. “He’s a phony,” Robert McIntyre, the director of Citizens for Tax Justice said of Rep. Ryan. “But he’s always been a phony […] This is all smoke mirrors and no deficit reduction,” McIntyre concludes. “Have you seen the cover? It’s beautiful. That’s the best part. But he is proposing to increase the budget deficit over the long term.” [Citizens for Tax Justice, 3/20/12]

4) False Claim: Ryan’s plan provides a “level playing field for all by putting an end to special-interest favoritism and corporate welfare…” and “clos[es] loopholes and put[s] hardworking taxpayers ahead of special interests.”

Fact Check: The House Republican budget expands tax breaks for millionaires and billionaires, while protecting tax loopholes like those for Big Oil.

  • $150,000 Tax Break to Millionaires. Ryan’s plan specifies more than $1 trillion in tax cuts for families making more than $250,000. This equates to an average tax cut of at least $150,000 per millionaire. [White House Analysis of House Republican Budget, 3/21/12]
  • $3 Trillion in Tax Cuts for People Earning Over $200,000. Ryan’s plan calls for tax cuts of roughly $3 trillion, with most of the tax cuts going to people earning more than $200,000. [Economic Policy Institute, 3/20/12]
  • Ryan Budget Pads Big Oil’s Pockets with Senseless Subsidies. “American families have been plagued by higher oil and gasoline prices over the past several years despite a significant increase in domestic oil production and rigs, and decline in consumption. But while high prices threaten the economy and family budgets, they enrich American oil companies with huge profits. Yet it appears that House Budget Committee Chairman Paul Ryan’s (R-WI) proposed FY 2013 budget resolution would retain a decade’s worth of oil tax breaks worth $40 billion. And his budget would cut billions of dollars from investments to develop alternative fuels and clean energy technologies that would serve as substitutes for oil and help protect middle-class families from volatile energy prices as well as create jobs. In short, the Ryan budget compounds the cost of high oil and gasoline prices on the middle class.” [Center for American Progress, 3/20/12]
  • Ryan’s Budget Claims to Close Tax Loopholes is an Empty Promise. “Mr. Ryan became well known last year as the face of the most extreme budget plan passed by a house of Congress in modern times. His new budget is, if anything, worse, full of bigger, emptier promises. […] It vows to balance tax cuts for corporations and the rich by closing loopholes, but never lists the loopholes.” [New York Times Editorial, 3/20/12]
  • Ryan’s Plan Also Encourages Companies to Ship Jobs Overseas. Currently, U.S. companies pay the tax rate of the country where the outpost is located and then, if they bring those profits home, often pay some U.S. taxes as well. Under Ryan’s proposal, companies essentially would pay just the tax rate of the country where the profits are earned. According to the Tax Policy Center, exempting these offshore earning from U.S. tax liability “might encourage some domestic companies to move more of their operations—and shift both jobs and more reported income—to low tax countries.” Similarly, Citizens for Tax Justice concluded that adopting this type of system would increase the incentives for job offshoring. [National Journal, 3/20/12; Wall Street Journal, 3/19/12; Tax Policy Center, 2/28/12; Citizens for Tax Justice, 10/19/11]

5) False Claim: Ryan’s plan would “give future retirees the ability to choose between competing health care plans, including the traditional Medicare program…”

Fact Check: The House Republican budget would end Medicare’s guarantee.

  • Ryan’s Plan Ends Medicare’s Guaranteed Benefit. Unlike traditional Medicare, which is a defined benefit plan, the House Republican budget would change the program into a defined contribution plan. If this plan became law, starting in 2023, America’s seniors would be told they can have $7,500 in “premium support.”  According to the New York Times, the plan is modeled after one where “the elderly would be offered an allowance that could be used to buy a private plan or the existing government coverage.” [Kaiser Family Foundation, 4/11; Congressional Budget Office, 3/12; Center for American Progress, 3/20/12; CBS News, 3/20/12; New York Times, 3/12/12]
  • Ryan’s Plan Would End Medicare’s Guarantee, Would Result in a “Death Spiral.” “The new plan claims to maintain traditional Medicare as an option that seniors could choose to purchase. This sounds a little better, but in reality their latest health care scheme for senior citizens would inevitably result in a ‘death spiral’ for Medicare that means higher costs for seniors.” [Center for American Progress, 3/20/12]

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