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The federal government’s legal authority to spend money is set to expire on Friday, and it’s anyone’s guess if the week will end with compromise or a government shut-down.
House Republicans are insisting on spending cuts, but any agreement has to win approval from the Democratic-controlled Senate and President Barack Obama.
And the Friday deadline could be the first of several budget showdowns, including a vote sometime in April or May to raise the limit on the federal debt limit.
The rhetoric can get thick, so here’s a review of some of our most significant fact-checks on the federal budget.
First, let’s deal with some of the statements about the scope of the budget problems.
"The debt will soon eclipse our entire economy," said Rep. Paul Ryan, R-Wisc., the head of the House Budget Committee. We found that the United States’ total debt at the start of the year was $14 trillion. We also found that the size of the U.S. economy, measured by the gross domestic product, or the value of all goods and services, was about $14.745 trillion last year. After discussing the nuances of the data and different ways to look at the public debt, we concluded Ryan’s statement was True.
Sen. Kent Conrad, D-N.D., who heads the Senate budget committee, said recently that "We're borrowing 40 cents of every dollar we spend." For the most recent fiscal year, the Treasury Department reported that the government had revenues of $2.16 trillion, spending of $3.46 trillion and a deficit of $1.29 trillion. Divide the deficit by the outlays and you get 37 percent, which is very close to 40 percent. We rated Conrad’s statement True.
Reining in that spending will be no easy task, either.
As Rep. Dennis Kucinich, D-Ohio, pointed out, "One of the biggest causes of our soaring debt and economic insecurity ends up being Pentagon spending. The budget for the Pentagon consumes more than half of our discretionary spending." Our partners at PolitiFact Ohio rated that True, keeping in mind that total discretionary spending includes both domestic and international spending.
And, in fact, as Sen. Rand Paul, R-Ky., pointed out, the federal government could "cut all of the non-military discretionary spending and not balance the budget." That’s True as well; the imbalance would still exist.
Eliminating earmarks wouldn’t help, either. Sen. Richard Lugar, R-Ind., pointed out that "Eliminating earmarks does not reduce spending." Ending earmarks would stop pet projects for lawmakers, but it wouldn’t directly reduce overall spending. We rated Lugar’s statement Mostly True.
There are more hard truths on the tax front, too. Sen. Mark Warner, R-Va., said that the U.S. loses more on tax breaks than it collects in personal income taxes. That includes exemptions from paying taxes on employer-provided health insurance, pensions, deductions for home mortgage interest and many other breaks. PolitiFact Virginia looked into the numbers and found Warner was right and rated his statement True.
Rep. Bobby Scott, D-Va., pointed out that the tax-cut compromise between President Barack Obama and Republicans in Congress "adds more than $800 billion to the deficit over two years -- more than the cost of TARP and more than the cost of the Recovery Act." We looked at the budget estimates on all of these projects and found Scott was pretty close. PolitiFact Virginia rated his statement Mostly True.
Statements that don’t add up
Then, there are the falsehoods about the budget.
President Obama released his budget for fiscal year 2012, which starts next October. Under the White House’s budget proposal, he said, "we will not be adding more to the national debt" by the middle of the decade. We looked at the numbers, though, and found that the debt continues to grow because of interest on the debt service. The White House didn’t count the interest in their estimates. We rated his statement False.
Meanwhile, Speaker of the House John Boehner, R-Ohio, said that over the last two years since President Obama has taken office, "the federal government has added 200,000 new federal jobs." We rated this False, because it counts temporary Census workers as new federal jobs. Those Census jobs are temporary and go away when the once-a-decade Census is over.
Rep. Darrell Issa, R-Calif., said a great deal could be saved by eliminating Medicare fraud. "We can save $125 billion in simply not giving out money to Medicare recipients that don't exist for procedures that didn't happen," he said. We looked into that number, though, and found the total also included improper payments for programs including Medicaid, food stamps, unemployment insurance, Social Security and the school lunch program. Medicare is the government agency with the largest chunk of improper payments, but it's still less than half the total. We rated his statement False.
Living through a shut-down
Finally, we examined a statement from President Obama about what might happen in the event that there’s no budget agreement and the government shuts down. If there’s a government shutdown, "people don’t get their Social Security checks," Obama said. We looked into past government shut-downs and found that in 1995, most people did continue to get their Social Security checks. We rated Obama’s statement Barely True.
See individual reports for complete sources.