Fact Checking Ryan and Bachmann

By Glenn Kessler

Today, we will fact-check the dueling State of the Union responses by Rep. Paul Ryan (R-Wis.) and Rep. Michele Bachmann (R-Minn.) As with Tuesday’s live fact check of the State of the Union, we are not awarding Pinocchios, just making observations and clarifications about key statements.

“It’s no coincidence that trust in government is at an all-time low now that the size of government is at an all-time high.”
—Rep. Paul Ryan

This sentence is largely comprised of two facts, and suggests a causal connection between the two. In both cases, it is a stretch. Let’s deconstruct them.

There are many ways to measure size of government, but the most widely accepted is spending measured as a percentage of overall size of a nation’s economy (gross domestic product, or GDP.) In a recession, this number is bound to go up because the size of the economy is shrinking while government spending goes up because of increased outlays for unemployment insurance and federal stimulus efforts. According to the statistics maintained by the White House budget office, the high point was reached during World War II, when outlays as a percentage of the overall economy reached 43.6 percent in 1943 and 1944. By contrast, in 2010, the level was estimated to reach 25.4 percent, and then decline to under 23 percent by 2013.

The size of the federal government relative to the economy topped 23 percent twice during the presidency of Ronald Reagan—whose famously wanted to shrink the government—and reached its low point in recent decades under Bill Clinton, when it hit 18.2 percent in 2000. Essentially Ryan is wrong when he says the size of government is at an all-time high.

Ryan’s spokesman did not respond to a request for where the congressman got his claim, but to be fair he did refer to “government,” suggesting he might have included state and local governments. The White House stats only go back to 1948, but as of 2009, the total percentage of all government spending stood at 36.1 percent, a post-war high. But given that the Congress and the White House can really only address federal spending, that does not seem like a relevant statistic. (If you have further interest in this subject, the Congressional Research Service recently did a fascinating look at the various ways to measure size of government.)

The other statistic—all-time low trust in government—comes from a Pew Research study, according to Ryan’s spokesman. The study indeed says “just 22 percent say they can trust the government in Washington almost always or most of the time, among the lowest measures in half a century.” But the study goes on to note the public is unhappy with other major institutions as well—Congress (24 percent), large corporations (25 percent), banks (22 percent), national news media (31 percent—ouch!), labor unions (32 percent) and the entertainment industry (33 percent). And, ironically enough, the Obama administration was trusted by 45 percent, which seems to undercut Ryan’s point entirely.

—Glenn Kessler

UPDATE 5:30 PM:
Ryan’s spokesman said Ryan got his “all-time high” stat from the White House budget office, the source of the same figures I cited above. He has not responded to request for an explanation of why Ryan says it is an all-time high when the statistics show otherwise.

“The president’s strategy for recovery was to spend a trillion dollars on a failed stimulus program fueled by borrowed money. The White House promised us that all the spending would keep unemployment under 8 percent. Well, not only did that plan fail to deliver, but within three months, the national jobless rate spiked to 9.4 percent.
—Rep. Michele Bachmann

“Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs, but also plunged us even deeper into debt.”
—Rep. Paul Ryan

Note the use of the word “promise” here by both Bachmann and Ryan. It’s a subtle way of saying the president broke some kind of pledge. But neither the president nor the White House ever promised that the stimulus plan would keep unemployment under eight percent. In fact, it would be foolish for any politician to make such claim. So where do Ryan and Bachmann get this line?

Both are referring to a projection issued on January 9, 2009 — before Obama even took the oath of office—by two aides, Christina Romer, the nominee to head the Council of Economic Advisers, and Jared Bernstein, an incoming economic adviser to Vice President-elect Biden. The 14-page report thus was not an official government assessment, or even an analysis of an actual plan that had passed Congress. Instead, it was an attempt to assess the impact of a possible $775 billion stimulus package and how much of a difference it would make compared to doing nothing. The president-elect had articulated a goal of passing a plan that would “save or create 3 million jobs by the end of 2010.”

Page 5 of the report included a chart that showed that unemployment would peak at 8 percent in 2009, compared to 9 percent in 2010 if nothing was done. But the report also contained numerous caveats and warnings because, after all, it was merely a projection. At the time, other economists had similar forecasts—Romer and Bernstein were in the mid-range—but the economy turned out to be in deeper trouble than most people thought. (Bachmann indicates this when she notes the unemployment rate had jumped to 9.4 percent three months after the bill was passed. There is no way any economic legislation would have much impact a few months after passage.)

In fact, a common criticism of the stimulus bill, at least from left-leaning economists, is that it turned out to be too timid for the economic tsunami that had struck the United States. Other economists argue that the stimulus was a success because helped avert even bigger economic meltdown. Romer, when she left the White House last year, said that the estimate of the impact of the stimulus bill was accurate but the eight-percent “prediction was so far off” because economic conditions were so much worse. “We, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between GDP [gross domestic product] and unemployment would break down,” she said.

Economic projections by their nature are very uncertain. Grabbing a figure out of a two-year-old chart and calling it a presidential “promise” is going too far.

—Glenn Kessler

“Businesses and unions from around the country are asking the Obama administration for waivers from the mandates.”
—Rep. Paul Ryan

“Obamacare mandates and penalties may even force many job creators to just stop offering health insurance altogether, unless, of course, yours is one of the more than 222 privileged companies or unions that’s received a government waiver under Obamacare.”
—Rep. Michele Bachmann

Both make the same point, though Bachmann’s Tea Party-sponsored response seems much more sinister. Both suggest that “unions”—which after all are politically more supportive of Democrats—are getting special treatment. This is one of those highly technical issues that have been turned into a political talking point that leaves most audiences scratching their heads.

Neither lawmaker is specific, but both are alluding to a part of the law that has drawn complaints from companies, such as McDonald’s in the fast-food industry, and other organizations that provide skimpy health insurance. This coverage is known by the jargon “mini-meds.” And the question boils down to whether such bare-bones coverage is, in the short term, better than no coverage at all — though that is not the way the two Republicans frame it.

Under the law, this kind of insurance is expected to disappear after 2014, when provisions will take effect that require most employers to offer their workers more complete coverage — or else let those workers buy insurance through new insurance marketplaces, called exchanges. But for now, many of the mini-med plans fail to meet a requirement in the law that has just taken effect: that insurers devote at least $4 out of $5 they collect in premiums to their customers’ well-being.

Companies, including McDonald’s, threatened last year to stop offering any insurance. Rather than risk increasing the ranks of the uninsured, a regulation that the Health and Human Services department issued late last year allows companies and other organizations with that kind of insurance to ask to be exempted from that rule. That is what Reps. Bachman and Ryan referred to. The number Bachmann mentioned — 222 — amounts to the waivers that HHS said it had given out as of partway through the fall.

“The good news is that mini-meds will be eliminated in 2014, thanks to provisions that phase out insurance companies’ use of annual limits between now and 2014,” said a White House statement on the issue in December. “The bad news is that today mini-meds are often the only affordable option for many low-wage workers because retail and chain restaurants rarely offer their workers options beyond these plans.”

In suggesting that some companies and unions were getting relief from the entire health care law, the two lawmakers overstated what is happening. And according to the HHS figures, unions received only about 20 percent of the 222 waivers the agency had given at that point. The rest went to companies.

—Glenn Kessler and Amy Goldstein

“The president could also turn back some of the 132 regulations put in place in the last two years, many of which will cost our economy $100 million or more.”
—Rep. Michele Bachmann

This estimate comes from Susan E. Dudley, who was the top regulation official in the George W. Bush administration and who directs the George Washington University Regulatory Studies Center. By her count, Obama has issued 66 major regulations per year (major as being defined as having an impact of more than $100 million a year), compared to 47 per year under Bill Clinton and 48 per year under Bush.

But, as we have written before, not all of these regulations were Obama’s doing; many were leftover business from the Bush administration and were court-ordered. And just looking at the costs is only half of the picture; many of these regulations have estimated benefits that significantly outweigh the costs.

—Glenn Kessler

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By Glenn Kessler  | January 26, 2011; 12:38 PM ET

Well, maybe they just stretched the truth but there comes a point where you stretch the truth so much that it becomes a lie, and for Republicans and Tea Baggers, that time has long since passed…

Of course, I don’t expect anyone that watches or listens to FOX News to give two-shakes about any inaccuracies that any of their overseers espouse from their bully pulpits.