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If there’s any doubt the role Nashua, NH will play in the upcoming election, look no further than Main Street.
A recent campaign television commercial attacking U.S. Rep Charlie Bass, R-NH, features men and women holding handwritten signs up and down Main Street, quoting Bass calling GOP vice presidential candidate Paul Ryan’s Medicare plan "A great statement of principle."
The advertisement was put out by The House Majority PAC -- not to be confused with The New Hampshire House Republican Victory PAC.
The House Majority PAC is a committee "designed help win back the House Majority for Democrats," according to its website, and calls Bass out for voting for Ryan’s plan to "essentially end Medicare to give more tax breaks to millionaires."
"Charlie Bass said, ‘I voted for Chairman Ryan’s plan because it is a great statement of principle,’" the narrator states. "Seniors would pay $6,400 a year more for health care so millionaires can pay less in taxes. That's Charlie Bass' great statement of principle."
PolitiFact has heard similar claims about Ryan’s budget resolutions many times before. But we hadn’t examined whether those savings would go to bankroll tax cuts for millionaires.
Even looking at the health care question alone can get tricky because some earlier, related claims reference Ryan’s plan for 2012, which was proposed in 2011.
It is important to note the "Principle" ad revolves around a statement Bass made after he voted to support Ryan’s 2013 budget resolution, and cites a March 29, 2012 article in the Manchester Union Leader, although Bass did vote for Ryan’s plan in 2011.
The Romney-Ryan Medicare plan
PolitiFact has checked this claim through a President Barack Obama television advertisement that said Ryan’s plan could raise "future retirees’ costs more than $6,000," noting that Ryan released his initial Medicare plan in early 2011. Under this plan, Medicare would have changed from a program that pays doctors and hospitals fees for particular services to one in which beneficiaries would be paid an amount by the government that they could use toward private insurance premiums, affecting people who today are under 55 only.
The plan was approved by the GOP-controlled House before dying in the Senate. Ryan offered updated versions of the plan as part of his fiscal year 2013 budget proposal, with two key differences from the original. The newer version allows beneficiaries under 55 a choice -- they can use their payment to buy private insurance or for a plan that acts like traditional Medicare. Meanwhile, the size of the payment would be set by the market -- the price of the second-cheapest plan.
So is the most recent Ryan plan also official policy for the Romney campaign? It appears to be. In an interview with a Green Bay, Wis., television station back on Aug. 15, Romney said, "Paul Ryan and my plan for Medicare, I think, is the same, if not identical -- it's probably close to identical."
This history is important because of how opponent campaigns frame the Romney-Ryan Medicare plan in their ads.
The $6,400 question
Ads using the claim of a $6,400 increase in out-of-pocket costs cite a report by the Center on Budget and Policy Priorities, a liberal think tank. Here’s what the group said:
"In 2022, the first year the voucher would apply, (the Congressional Budget Office) estimates that total health care expenditures for a typical 65-year-old would be almost 40 percent higher with private coverage under the Ryan plan than they would be with a continuation of traditional Medicare," center president Bob Greenstein wrote. "CBO also finds that this beneficiary's annual out-of-pocket costs would more than double — from $6,150 to $12,500. In later years, as the value of the voucher eroded, the increase in out-of-pocket costs would be even greater."
The difference between $12,500 (the out-of-pocket costs under the Ryan plan in 2022) and $6,150 (the out-of-pocket costs that year under traditional Medicare) is $6,350, which is very close to $6,400.
In an interview, Paul Van de Water, a senior fellow at the Center for Budget and Policy Priorities, emphasized that the numbers his group used came from CBO, the nonpartisan number-crunching arm of Congress, and that the center’s role was just to take the CBO analysis and make it "more understandable."
In fact, different groups have made slightly different calculations of the out-of-pocket increase -- the Kaiser Family Foundation, for instance, tabulated the number to be $6,870 -- but the estimates we’ve seen are all in the same ballpark.
But the problem is the CBO analysis, and the others built on those CBO numbers, refer to the original Ryan plan, not to the current one. The current plan is slightly more generous in how fast it allows subsidies to grow as health care costs increase, while still keeping spending lower than current projections. Ryan also made a number of other technical changes to address concerns that the credits wouldn’t keep up if medical costs kept going up and up. As we mentioned before, the amount a beneficiary receives, for example, would be based on the second least-expensive plan available on a Medicare exchange.
That means while the traditional Medicare offering — if it’s more expensive than the second-least expensive plan — could cost seniors more out-of-pocket, it’s unlikely to cost them as much as estimates for Ryan’s earlier plan.
"CBO has not analyzed the policies that might be implemented to produce such a path for Medicare spending, including a premium-support approach to Medicare of the sort that Chairman Ryan and other Members of Congress have recently discussed," CBO wrote earlier this year.
The Obama campaign has said it would be happy to update its numbers if CBO or the Romney-Ryan campaign provided new data, but neither has. Peter Orszag, Obama’s former Office of Management and Budget director, recently wrote that "if Ryan believes that changes to his plan since (the original plan was released) would result in any different conclusions, he should request that CBO publish an updated analysis."
There is one clue that the number wouldn’t be close to $6,400. A study published Aug. 1, 2012, in the Journal of the American Medical Association says that if Ryan’s plan had been in place in 2009, the cost of the second-cheapest Medicare Advantage plan (and thus the size of the premium support payment) would have been 9 percent less than traditional Medicare.
That would have required an out-of-pocket payment for seniors who wanted to use traditional Medicare of $64 a month — which adds up to about $800 a year.
Van de Water said one should specify which version of the Ryan plan they’re talking about if they’re going to speculate. But he did say that the Obama campaign’s decision to use the old numbers was defensible. "It also seems reasonable to cite the most recent available analysis" when Ryan has not provided enough detail to do a new one.
How about those millionaires
But what about the charge that Bass is supporting changes to Medicare so "millionaires can pay less in taxes"?
For that portion of the claim, the House Majority PAC cited an April 2011 Wall Street Journal article about Ryan’s 2012 budget proposal, titled "GOP Aim: Cut $4 Trillion." They singled out this sentence: "Conservative activists who are familiar with the Ryan plan said they expect it to call for a fundamental overhaul of the tax system, with a 25% top rate for both individuals and corporations, compared to the current 35% top rate."
They also pointed to another Center on Budget and Policy Priorities report, published a year later, titled "New Tax Cuts in Ryan Budget Would Give Millionaires $265,000 on Top of Bush Tax Cuts." The report cites Urban-Brookings Tax Policy Center findings that say people earning more than $1 million a year would receive an average of $265,000 apiece in new tax cuts under Ryan’s plan, on top of the $129,000 they would receive from the Ryan budget’s extension of President Bush’s tax cuts.
PolitiFact has found that there’s not a direct link between the proposed changes to Medicare and tax rates for the wealthy. They’re separate policy areas, and legislation affecting each area would typically be handled separately.
Nevertheless, choices about spending and taxes are not entirely unrelated, given the imbalance in the federal budget in recent years and the significant debt that is building up, said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.
PolitiFact asked her about the Democratic claims we’ve noticed this year in congressional races around the country, where ads claim that specific spending cuts "pay for" tax breaks for the wealthy.
"It’s a huge fight over priorities and semantics," she said. "But it’s difficult to say that one is linked to the other."
Still, she added, hard choices are ahead for the federal budget in terms of both taxes and spending. "No one should be talking about any tax cuts or spending increases until we have a plan to get the budget under control," she said.
PolitiFact gave President Obama a Half True for an ad that would have been more accurate if it specified it referred to a previous Ryan plan for Medicare, rather than the current one.
In The House Majority PAC’s case, it plays off a Bass quote about his support of the 2013 congressional budget plan, then uses calculations for the plan Ryan proposed the previous year.
Bass did vote for both Ryan plans, but the 2013 plan lacks enough details to truly determine how much more money seniors may have to pay for Medicare.
And where President Obama used the phrase "could" to cite cost increases by more than $6,000 -- giving his claim a little more wiggle room -- The House Majority PAC uses the phrase "would," taking the $6,400 estimation a step further because it implies greater certainty.
On top of that, experts say it’s too difficult to determine how the Romney/Ryan proposed changes to Medicare have a direct link to the tax rates that would be set for the wealthy. We give them a Mostly False.
House Majority PAC, "Principle," Sept. 18, 2012.
Email exchange with Andy Stone, Communications Director at the House Majority PAC, Sept. 26, 2012.
U.S. Library of Congress, Roll Call 151 on H. Con. Res. 112, March 29, 2012.
U.S. Library of Congress, Roll Call 277 on H. Con. Res 34, April 15, 2011.
House Majority PAC, accessed Sept. 26, 2012.
PolitiFact Ohio, "The average person "will pay $6,000 more a year" under Rep. Paul Ryan's Medicare proposal," June 13, 2011.
PolitiFact, "Paul Ryan’s Medicare plan "could raise future retirees’ costs more than $6,000,"
Aug. 23, 2012.
PolitiFact Virginia, "Ad Watch, A look at Obama's attacks on Romney's tax and Medicare stances," Sept. 17, 2012.
The Wall Street Journal, "GOP Aim: Cut $4 Trillion," April 4, 2011.
Center on Budget and Policy Priorities, "New Tax Cuts in Ryan Budget Would Give Millionaires $265,000 on Top of Bush Tax Cuts," April 12, 2012.
The Manchester Union Leader, "With compromise plan dead, Bass supports controversial Ryan budget," March 29, 2012
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