Wednesday, October 1st, 2014

Sorting out the facts on the Republican budget blueprint

House Budget Committee Chairman Rep. Paul Ryan, R-Wis. gestures during a news conference on Capitol Hill on April 13, 2011. NJ Sen. Loretta Weinberg claims Ryan's House budget plan would hike college loan rates.
House Budget Committee Chairman Rep. Paul Ryan, R-Wis. gestures during a news conference on Capitol Hill on April 13, 2011. NJ Sen. Loretta Weinberg claims Ryan's House budget plan would hike college loan rates.

In a largely party line 235-193 vote, House Republicans on April 15, 2011, passed a deficit-cutting budget blueprint championed by House Budget Committee Chairman Paul Ryan, R-Wis.

The non-binding plans seeks to cut $6.2 trillion over 10 years from the budget plan submitted by President Barack Obama and includes controversial proposals to make dramatic changes to Medicare, Social Security and other government programs. Here are some of facts about Ryan's proposal that we've checked:

• Rep. Mike Pence, R-Ind., said the Ryan proposal changes Medicare for those under age 55 so that they will  "participate in the same kind of health plan that members of Congress do."

We concluded that while Ryan’s Medicare proposal is only a broad outline right now, it is fundamentally different from the kind of employer-provided health insurance that members of Congress receive. At a minimum, the premium supports will not keep pace with the historic record of rapidly increasing health care costs. Additionally, seniors make significantly less income than members of Congress and will likely not have the same options to buy more expensive plans. And, finally, they will not get the same protection against rising costs that "Fair Share" provides members of Congress. We rated Pence’s statement Barely True.

• Making his case for the need for dramatic deficit reduction, Ryan said, "The Congressional Budget Office has this economic model where they measure the economy going forward, and they are now telling us that the entire economy crashes in the year 2037 because their computer simulation can't conceive of any way in which the U.S. economy can continue."

We found that CBO actually uses multiple models that have produced varying results. Second, Ryan predicts a collapse in 2037, but there’s considerable variation in the doomsday year depending on the model the CBO uses and the data it plugs into its calculations.

We also concluded the CBO’s "computer simulation can't conceive of any way in which the U.S. economy can continue" is an overstatement. In fact, the CBO finds lots of unpalatable scenarios if things get bad enough, but the agency doesn’t go so far as to suggest that the economy will simply cease functioning. Economies are far more complex than any single model, so just because a model stops working, it doesn’t necessarily mean we will go back to hunter-gatherer days.

What saves Ryan’s comment is that, despite his exaggerations, his general point is valid. The economists we spoke to agreed that that the nation’s current path of deficits and debt, if not altered, will become unsustainable. We rated his claim Half True.

• Our colleagues at PolitiFact Wisconsin looked into a claim about the Ryan plan from MoveOn.org, the left-leaning political advocacy group. In an e-mail to its members, MoveOn.org asserted:  "Here's the most important thing you need to know about the Republicans' new budget plan: It abolishes Medicare within 10 years."

To be sure, the Ryan plan would change Medicare significantly starting in 2022. But for those who turn 65 before then, there would be no changes at all, even after 2022. And for the others, Medicare would change -- dramatically -- but it would still exist. They rated MoveOn.org's claim False.

• Last, we looked into a Feb. 24, 2011, column in the Washington Post by Matt Miller, a senior fellow with the liberal Center for American Progress, who said Says Rep. Paul Ryan’s budget "roadmap … doesn't balance the budget until the 2060s and … adds an unthinkable $62 trillion to the national debt between now and then." The roadmap was an earlier iteration of Ryan's budget proposal.

Miller’s statement fails to mention the fact that Ryan’s plan does eventually eliminate the debt, according to CBO -- a sizable achievement when one realizes that under status quo policies, the debt would be more than seven times the size of the nation’s economy. Still, an outcome 70 years from now is subject to a lot of uncertainty, and Miller’s actual statement was phrased carefully. It’s true, as he says, that Ryan’s plan "doesn't balance the budget until the 2060s," and before it gets there, it will probably add trillions of dollars in debt. It was a close call, but we rated his statement Mostly True.

We also checked some of President Obama's numbers when he presented an alternative fiscal plan to Ryan's in a speech on April 13, 2011. You can see those here.