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Presidential Debate #1 – President Obama

Welcome to VoteFacts.  President Obama told viewers in the first presidential debate this about his past 4 years and closing the deficit,

"Everything that I've tried to do... closing our deficits in a responsible balanced way."

(Quote begins at 1 hour, 27 minutes, 27 seconds)

Has he tried to close the deficit during his first term? Let's focus on the facts about the four budgets he submitted by looking at the Congressional Budget Office's (CBO) analysis. Here is what they found about the president's budgets when it comes to their ten year projections and how his budgets would have impacted spending and revenue:

There is a persistent gap in all of the CBO calculations on all four of his budgets. But, here is what they have said about how much higher the deficits would have been with each of the President's four budget proposals, had any of them passed.

The cumulative deficit over the 2010–2019 period would equal $9.1 trillion (5.2 percent of GDP), more than double the cumulative deficit projected under the current-law assumptions embodied in CBO’s March baseline. As a result, debt held by the public would rise from 57 percent of GDP in 2009 to 82 percent of GDP by 2019. CBO, Page 1

The cumulative deficit over the 2011–2020 period would be $3.8 trillion more than the cumulative deficit projected under CBO’s baseline. Of that difference, $3.0 trillion stems from proposed changes in policy, and the other $0.8 trillion results from additional interest on the public debt. CBO, Page 1

In all, deficits would total $9.5 trillion between 2012 and 2021 under the President’s budget (or 4.8 percent of total GDP projected for that period)—$2.7 trillion more than the cumulative deficit in CBO’s baseline. Federal debt held by the public would double under the President’s budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021. CBO, Page 1

In all, between 2013 and 2022, deficits would total $6.4 trillion (or 3.2 percent of total GDP projected for that period), $3.5 trillion more than the cumulative deficit in CBO’s baseline. CBO, Page 1

Let us know, are you buying what he is selling? Do you think the facts support his claim that everything he has tried to do included closing our deficit? Go ahead, vote.



Resources

Obama 2010 Budget

Obama 2011 Budget

Obama 2012 Budget

Obama 2013 Budget

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Welcome to VoteFacts. During the first presidential debate, President Obama told Americans this about the cuts in Medicare spending that are pending in his new health care law,

"Let's look where some of the money is going. $716 billion dollars we were able to save from the Medicare program by no longer overpaying insurance companies, by making sure that we weren't overpaying providers, and using that money we were actually able to lower prescription drug costs for seniors by an average of $600 dollars and were also able to make a significant dent in providing them with the kind of preventive care that will ultimately save money throughout the system."

(View video in its entirety by dragging the start button backward. Quote begins at 40 minutes, 12 seconds)

There is a lot to go through in order to fact check this statement, but let's start out with what the Center for Medicare and Medicaid Services (CMS) says about where the savings are coming from:

Substantial savings are attributable to provisions that would, among other changes;

• Reduce Part A and Part B payment levels and adjust future "market basket" payment updates for productivity improvements ($233 billion);

• Eliminate the Medicare Improvement Fund ($27 billion);

• Reduce disproportionate share hospital (DSH) payments ($50 billion);

• Reduce Medicare Advantage payment benchmarks and permanently extend the authority to adjust for coding intensity ($145 billion);

• Freeze the income thresholds for the Part B income-related premium for 9 years ($8 billion);

• Implement an Independent Payment Advisory Board together with strict Medicare expenditure growth rate targets ($24 billion);

Other provisions would generate relatively smaller amounts of savings, through such means as reporting physician quality measures, reducing payments in cases involving hospital-acquired infections, reducing readmissions, refining imaging payments, increasing Part D premiums for higher-income beneficiaries, and implementing evidence-based coverage of preventive services. CMS, Page 9



Next, what happens with that savings? Does the $716 billion dollar savings go back to current and future generation seniors? Here is what the Congressional Budget Office (CBO) and the Congressional Research Service (CRS) have said:

The new health care law appropriates and transfers from the Medicare trust funds billions of dollars over the coming years to support many of the new law's provisions. They include providing funding for states to plan and establish exchanges (once established, exchanges must become self-sustaining), and support for a center to test innovative payment and service delivery models. CRS, Page 4

Higher balances in the Medicare Hospital Insurance (HI) fund will give the government legal authority to pay Medicare benefits longer, but most of the money will pay for new programs rather than reduce future budget deficits and therefore will not enhance the governments economic ability to pay Medicare benefits. CBO, Bottom of Page

Moving along, let's look at Medicare Part D, prescription drug costs and how it impacts seniors. It looks as though some seniors will pay less, and others will pay more:

For drugs covered by Medicare's drug benefit, CBO estimated that provisions of the legislation would raise the prices paid by pharmacies less any rebates paid to insurers by manufacturers by about 1 percent, on average. That increase would make federal costs for Medicare's drug benefit and the costs faced by some beneficiaries slightly higher than they would be in the absence of those provisions, while the new discounts would make the costs faced by other beneficiaries substantially lower. CBO, Page 66

Let's address the claim that preventive care saves money in the long run. Here is what the CBO and CMS both say about expanding preventive care services and how it impacts costs:

• Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall. CBO

There is no consensus in the available literature or among experts that prevention and wellness efforts result in lower costs. Several prominent studies conclude that such provisions - while improving the quality of individuals' lives in important ways - generally increase costs overall. CMS, Page 13

Lastly, President Obama mentions savings that come from not overpaying providers, but he leaves out the part about how that impacts seniors. Here he is on the 2008 campaign trail, talking about the provider reductions and seniors care:

"It turns out that Senator McCain would pay for part of his plan by making drastic cuts to Medicare - $882 billion dollars worth... So what would Senator McCain's cuts mean for Medicare at a time when more and more Americans are relying on it... If you rely on Medicare, it would mean fewer places to get care... you'll receive fewer services, you'll get lower quality care. I don't think that's right."

As president, he said this about the cuts to providers and care for seniors:

"These are cuts that would not only jeopardize our physicians pay, but our seniors health care."







And here is what the Congressional Budget Office (CBO) and Center for Medicare and Medicaid Services (CMS) have said about cuts and seniors care:

Over time, unless health care providers could alter their use of inputs to reduce their cost per service correspondingly, Medicare's payments for health services would fall increasingly below providers' costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers. CMS, Page 217

Health care providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Medicare Part A providers would become unprofitable within the 10-year projection period as a result of the productivity adjustments. CMS, Page 10

The new health care law restrains the rate of increase in payment rates for many providers of Medicare services to less than the expected rate of increase in the cost of the providers' input... However, it is unclear the extent to which providers will achieve greater efficiencies in the delivery of health care and the extent to which cost pressures will instead reduce access to care or diminish the quality of care (relative to the situation under prior law) outcomes that might increase pressure on the Congress to increase payments to providers. It is also unclear whether and how the Congress would respond to such pressure if it arose and what effects the response would have on total federal health care spending, revenues, and deficits. CBO, Page 28-29

Absent other changes, the lower Medicare payment rates would result in negative total facility margins for an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies by 2019, and this percentage would reach roughly 25 percent in 2030 and 40 percent by 2050. CMS, Page 217

Are you exhausted from data overload? Well, don't check out just yet. We still want to know what you think about the $716 billion dollars and if those savings will benefit current generation seniors. Do your thing, cast your vote.



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President Obama made this claim about jobs,

"Over the last 30 months, we've seen 5 million jobs in the private sector created."

(Quote begins at 3 minutes, 33 seconds)

Let's walk through the Bureau of Labor Statistics stats on that claim.  According to their data:

The numbers for the months of August and September of this year are preliminary, but over the last 30 months, which would take us back to March of 2009, we still have a net loss of 3.9 million jobs.  Since May of 2010 (30 months ago), there has been a net increase of just over 4 million jobs (4.585).  In their preliminary annual report dated September 27, 2012, they show that there have been 453,000 private sector jobs added this year.  According to BLS, these numbers will not be official until February 1, 2013 (click table to enlarge):

There you have data from the Bureau of Labor Statistics so you can cast your vote. Was President Obama speaking BLS fact or just political fiction. Go ahead, vote, and let the data be your guide...

Resources

Preliminary benchmark

BLS data

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We're looking at one of President Obama favorite lines, and we have focused on these facts once before, but since he keeps using it and it's getting closer to Election Day we thought we would delve a little deeper this time with some new facts. President Obama is pretty emphatic about this portion of the Affordable Care Act...

"Let me tell you exactly what ObamaCare did. If you've got health insurance... you keep your own insurance, you keep your own doctor."

(Quote begins at 57 minutes, 47 seconds)

This is such a personal and important issue that impacts every single American, so lets get the facts. To help us along, let's talk to our buddies at the Center for Medicare and Medicaid Services (CMS).

• ...a number of workers who currently have employer coverage would likely become enrolled in the expanded Medicaid program or receive subsidized coverage through the Exchanges. For example, some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries might find it to their—and their employees’—advantage to end their plans, thereby allowing their workers to qualify for heavily subsidized coverage through the Exchanges. CMS, Page 7

• For 2015-21, growth in private health insurance premiums is projected to slow somewhat and to average 5.9 percent annually, in part due to an expectation that some large employers of low-wage workers will discontinue coverage, resulting in their employees gaining coverage through Medicaid or the exchange plans. CMS, Page 2

• CMS estimates that, in aggregate, affected employers will reduce their benefit packages in such a way as to eliminate about three-quarters of the excess benefit value of policies. The proportion of workers experiencing reductions in their employer-sponsored health coverage as a result of the excise tax is estimated to increase rapidly after 2019. CMS, Page 17

• CMS estimates that in 2017, when the Medicare Advantage provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law). CMS, Page 11

• ...providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). CMS, Page 10

• Providers might tend to accept more patients who have private insurance (with relatively attractive payment rates) and fewer Medicare or Medicaid patients, exacerbating existing access problems for Medicaid enrollees. Either outcome (or a combination of both) should be considered plausible and even probable initially. CMS, Page 20

So, what do you say? Are you a believer in the promise that you can keep what you have it you like it? Let us know, cast your vote.

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President Obama and Governor Romney went back and forth a bit on the new Independent Payment Advisory Board (IPAB) that is part of the new health care law. We're checking out this statement by President Obama for a little factual focus,

"This board can't specifically make decisions about what treatments are given."

(Quote begins at 1 hour, 6 minutes, 55 seconds)

To help us focus on the facts on this subject, let's look at statements from the Congressional Research Service (CRS) and the Center for Medicare and Medicaid Services (CMS):

What is the IPAB:

The Affordable Care Act calls for the creation of an independent 15-member Independent Payment Advisory Board (IPAB) aimed at slowing Medicare cost growth. Under current law, the IPAB must submit proposals to the President for years in which the projected rate of growth in Medicare spending per beneficiary exceeds specified thresholds. CMS, Page 5

The Board will be composed of 15 members appointed by the President with the advice and consent of the Senate. As such, the members are officers of the United States under the appointments clause of the U.S. Constitution. CRS, Page 5

If the growth in Medicare spending exceeds the threshold, the IPAB must develop savings provisions to bring the growth rate down to the threshold (subject to certain maximum reductions). The IPAB’s proposals will automatically take effect unless lawmakers enact an alternative measure that achieves the same level of savings. CMS, Page 5

What the IPAB cannot do to control costs:

The Board cannot ration care, raise premiums, increase cost sharing, or otherwise restrict benefits or modify eligibility. CRS, Page 2

What the IPAB can do to control costs:

Board recommendations may focus on reductions in payments to Part C and Part D plans, including, among other things, direct subsidies to Part C and D plans and subsidies for non-Medicare benefits offered by Medicare Advantage plans; changes to payment rates or methodologies for services furnished in the fee-for- service sector by providers not otherwise addressed by changes such as competitive bidding or reductions in excess of productivity adjustments; and changes that reduce costs by improving the health care delivery system and health outcomes. CRS, Page 14

While the Board’s proposals can only relate to the Medicare program, the implications of its recommendations may have a much broader impact. Many payers fashion their payments on Medicare rates, such as “Medicare plus X%,” so recommendations to reduce Medicare payments for certain procedures or suppliers are likely to have a ripple effect throughout the health care system and could lead to a dampening of the average price paid for such services or supplies. CRS, Page 27

What are the effects of payment reductions on access and quality:

Health care providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Medicare Part A providers would become unprofitable within the 10-year projection period as a result of the productivity adjustments. CMS, Page 10

Absent other changes, the lower Medicare payment rates would result in negative total facility margins for an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies by 2019, and this percentage would reach roughly 25 percent in 2030 and 40 percent by 2050. CMS, Page 217

• It is reasonable to expect that Congress would find it necessary to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to health care services. If the provider payment reductions were moderated or removed, estimated Medicare costs would exceed the thresholds that would require the Independent Payment Advisory Board (IPAB) to develop proposals to reduce the growth rate below the threshold. These reductions would be quite challenging. CMS, Pages 1-2

Everyone will have differing opinions here, but some people might consider struggling to get access to treatments similar to a reduction in treatments, and that reducing access and quality is akin to reducing benefits. President Obama has said about provider cuts that, "These are cuts that would not only jeopardize our physicians pay, but our seniors health care." But we put that to you, our readers, to see what you think. Head on over and cast your vote.

Resources

Obama weekly address on provider cuts

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During the presidential debate, President Obama insisted that,

"I have said that for incomes over $250,000 a year that we should go back to the rate that we had when Bill Clinton was president... And the reason this is important is because by doing that we can not only reduce the deficit, we can not only encourage job growth through small businesses, but we're also able to make the investments necessary in education or in energy."

(Quote begins at 17 minutes, 56 seconds)

Wow, according to President Obama, we sure can do a whole lot just by taking the income tax rates for upper earners back to the Clinton years. A mere 3-4% increase for that group and we can reduce the deficit, encourage small business growth, and make investments for schools and energy. (We looked at the differences between the Obama plan and what the Clinton administration did here before.) Can it be that simple, or is there a bit more to this? A closer look at reports by the Congressional Research Service and the Tax Policy Center reveals this:

The Obama Administration has proposed allowing the Bush tax cuts to expire for high income taxpayers and permanently extending the tax cuts for middle class taxpayers. Compared to permanently extending all of the Bush tax cuts, this proposal is estimated to increase tax revenues by $252 billion over five years and by $678 billion over 10 years, but still leaves federal debt on an unsustainable path. CRS, Summary Page

• What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP. Such dramatic tax increases are politically untenable and still wouldn't come close to eliminating the deficit. TPC

But, there is more to the president's assertion. He seems to be telling voters that the only tax increase on this group would be the 3+ percent that we had under the Clinton administration. We wonder if he is forgetting a few extra taxes that he has already added? Here is a look at the other tax increases for that $250K + group that have already been furnished by the Center for Medicare and Medicaid Services and the Social Security Administration:

• The new health law introduced a new 3.8 percent - unearned income Medicare contribution - on income from interest, dividends, annuities, and other non-earnings sources for individual taxpayers with incomes above $200,000 and couples filing joint returns with incomes above $250,000. Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds. CMS, Page 9

Beginning in 2013, an additional Medicare Hospital Insurance (HI) tax of 0.9 percent is assessed on earned income exceeding $200,000 for individuals and $250,000 for married couples filing jointly. SSA

We're willing to give President Obama the benefit of the doubt on those tax increases. Let's just chalk his "forgetfulness" up to the fact that he's a busy guy with a lot on his mind. But there you have the facts on the veracity of these tax policy claims. It's time for you to let us know. Can the solutions to our problems be built on taxes for upper earners alone, or do the facts get in the way of this story?



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President Obama told us Wednesday night that he has focused on budget cutting,

"I worked with Democrats and Republicans alike to cut a trillion dollars out of our discretionary domestic budget."

(Quote begins at 28 minutes, 2 seconds)

We have addressed all four of the presidents budgetary proposals here before. But with this statement, is President Obama talking about the automatic cuts from the Budget Control Act of 2011? If so, the only problem is that he left those very cuts out of his FY 2013 budget and so, had his own budget passed, those cuts never would have happened. Don't believe us? Here's what the nonpartisan Congressional Budget Office had to say:

Automatic procedures specified by last year's Budget Control Act are set to go into effect in January 2013 and reduce spending in subsequent years. The President's budget does not include those reductions, thereby boosting outlays relative to the current-law baseline by $1.0 trillion over the next 10 years. CBO, Pages 3-4

So, as always, we put it to you. Do you think the President is trying to play by the facts? Or, has the campaign trail given him a predilection for the fiction?



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Here is a statement by President Obama during the first presidential debate,

"It is estimated that by repealing ObamaCare, you're looking at 50 million people losing health insurance..."

(Quote begins at 1 hour, 4 minutes, 37 seconds)

Can it be true that 50 million people lose coverage? We are turning to the Congressional Budget Office and a report that looked at what would happen if the president's signature achievement were repealed. Here is what they say about this issue:

• H.R. 6079 would repeal all of the provisions of the ACA that are designed to expand insurance coverage as well as related provisions. Under H.R. 6079, about 30 million fewer nonelderly people would have health insurance in 2022 than under current law, leaving a total of about 60 million nonelderly people uninsured. CBO, Page 9

It looks like about 30 million people would lose the coverage that they would have gained through the ObamaCare provisions. The other 30 million cannot be counted as losing something, since they did not have it to begin with. Here is how the coverage plays out a little more specifically:

The new health care law is now estimated to reduce the number of nonelderly people without health insurance coverage by 30 million to 33 million in 2016 and subsequent years, leaving 26 million to 27 million nonelderly residents uninsured in those years. CBO, Page 3

According to the current estimates, from 2016 on, between 20 million and 23 million people will receive coverage through the new insurance exchanges, and 16 million to 17 million people will be enrolled in Medicaid and CHIP (Children's Health Insurance Plan). Also, 3 million to 5 million fewer people will have coverage through an employer compared with the number under prior law. CBO, Page 3

You have done your due-diligence, you have focused on facts, now chime in on the VoteFacts question. Would repealing ObamaCare mean 50 million people would lose their health insurance?

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