Introduction
Florida Sen. Marco Rubio and Kentucky Sen. Rand Paul made misleading or exaggerated claims in their responses to President Barack Obama’s State of the Union address. Rubio claimed that the federal health care law was causing people to lose “the health insurance they were happy with,” but that glosses over the fact that 27 million uninsured Americans are expected to gain coverage. Paul claimed the federal government borrows “$50,000 every second,” but the true figure is about $30,000. And he made a reference to an Internet rumor about Obama giving out free phones to the poor.
Rubio Lambasts Health Care Law
Rubio gave the Republican response immediately after Obama’s address, and he criticized the Affordable Care Act.
Rubio, Feb. 12: And because many government programs that claim to help the middle class often end up hurting them. For example, ObamaCare, it was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with.
The fact is, the Affordable Care Act is expected to cause tens of millions of uninsured Americans — many of them likely falling under the vague “middle class” label — to gain health insurance, not lose it. In a fact sheet on his speech, Rubio’s office points to a nonpartisan Congressional Budget Office report that said 27 million of the uninsured would have coverage as early as 2017 (as shown in this more detailed CBO chart).
Rubio’s claim about some people losing “the health insurance they were happy with” references the CBO’s estimate that the number with employer-sponsored coverage would decline by 7 million, also as early as 2017. That’s a net reduction, with some workers gaining coverage, some losing it, and others deciding to obtain other insurance on their own.
Again, these are estimates for what the insurance landscape will look like in the future. People aren’t “now … losing the health insurance they were happy with,” as Rubio said. In fact, CBO’s estimates show 2 million uninsured Americans gaining coverage this year. Employer-sponsored insurance is going up by 1 million — not down. Medicaid and CHIP coverage also go up by 1 million. The mandate that individuals have insurance, and subsidies for lower-income persons, don’t go into effect until 2014, but already adult children up to age 26 have been able to stay on their parents’ insurance under the federal law. And while some workers are expected to lose an offer of insurance from their employer in the future, the overall impact of the law is a significant net gain in coverage.
The CBO report does say that it has increased its estimate of the number without employer-sponsored coverage through 2022, up from 4 million in a previous estimate. Why did the number go up? CBO said it was due to the lower marginal tax rates for those earning under $450,000 a year, as enacted by the American Taxpayer Relief Act — which was passed to avert the so-called fiscal cliff. The extension of those lower rates make tax-free employer-provided insurance less valuable, and it “will lead to a greater reduction in such coverage and higher enrollment in insurance exchanges than previously estimated.” So lower taxes would cause more workers to join the subsidized exchanges. CBO also adjusted its estimate of what workers would earn as income, the result being that “slightly more tax filers and their dependents” would qualify for subsidies and Medicaid. Fewer workers would take employer-sponsored coverage as a result.
Paul Overstates Federal Borrowing
In his response to the president — the Tea Party response, not the official GOP response — Paul exaggerated when he claimed the federal government borrows “$50,000 every second.” The U.S. is borrowing a lot of money — but not that much. The actual amount is about $30,000 a second.
Paul: We’re in danger, though, of forgetting what made us great. The president seems to think the country can continue to borrow $50,000 every second.
The nonpartisan Congressional Budget Office in its Feb. 5 budget outlook report (Table 1) projects that the public debt will increase from $11.280 trillion in fiscal 2012 to $12.229 trillion in the current fiscal year, which began Oct. 1, 2012. That’s an additional $949 billion in public debt, which is how much the federal government borrows from individuals, corporations, foreign countries and entities other than the federal government. That comes to $30,093 per second, so the country is not borrowing “$50,000 every second.”
Now, that per-second figure was considerably higher earlier in the Obama administration. In fact, Treasury Secretary Timothy Geithner wrote a letter to Congress on April 4, 2011 that said: “On average, the public debt of the United States increases by approximately $125 billion per month (although there are significant variations from month to month).” That equals $1.5 trillion a year, meaning the U.S. at the time was borrowing $47,564.68 every second.
We went to the Treasury’s “debt to the penny” website to determine how much the public debt had increased in the 12 months prior to Geithner’s letter. We found that it rose from $12.76 trillion on April 1, 2010 to $14.25 trillion on April 1, 2011. That was an increase of roughly $1.49 trillion — or $47,248 every second. So, Geithner’s figure was accurate at the time. (Reuters wrote a story a month after Geithner’s letter that cited the treasurer’s $125 billion monthly figure. “The U.S. government borrows more than $40,000 per second,” the wire service wrote.)
We don’t mean to minimize the scope of the nation’s debt problem. But Paul is wrong to suggest the president will “continue to borrow $50,000 every second,” when CBO projects the U.S. will borrow about 40 percent less than that this fiscal year.
Paul Advances ‘Obama Phone’ Myth
Paul also wrongly suggested that the Obama administration instituted a program to give free cell phones to the poor.
“The president offers you free stuff but his policies keep you poor,” Paul said. He later commented that “for those who are struggling, we want you to have something infinitely more valuable than a free phone, we want you to have a job and a pathway to success.”
While it’s true that the government provides subsidized phone service for low-income persons, such programs were in existence before Obama came into office.
As we wrote most recently in May 2012, Lifeline, a federally mandated program that reimburses phone companies with a monthly subsidy of $9.25 for each low-income customer, has been around since 1984, when it began providing landline service to customers. Funded by telecom fees that are part of customers’ monthly phone bills, the program is designed to fulfill FCC policy of providing universal access. The program was then expanded during the George W. Bush administration in 2008 to cover cell phone usage.
And as we originally wrote in 2009 — debunking false Internet claims of an “Obama phone” — TracFone Wireless also started its SafeLink Wireless program, which offers up to 250 free minutes of cell phone use each month, in 2008.
These and similar programs are actually a product of the 1996 Telecommunications Act to “ensure all Americans, including low-income consumers and those who live in rural, insular, high cost areas, shall have affordable service and [to] help to connect eligible schools, libraries, and rural health care providers to the global telecommunications network.”
– Lori Robertson, Eugene Kiely and D’Angelo Gore
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