A fog of misinformation has settled on the fiscal cliff, as both House Speaker John Boehner and Treasury Secretary Timothy Geithner have traded conflicting, misleading and false statements in recent days on the president’s deficit-reduction plan:
* Geithner falsely claimed on “Fox News Sunday” that the president’s proposals to slow Medicare growth are “not shifting costs to seniors.” There are four proposals that would increase costs to some seniors by $32.9 billion over 10 years, beginning in 2017, including higher premiums and new fees and surcharges.
* Boehner, also on Fox News, wrongly stated that the administration has proposed “$400 billion worth of unspecified cuts.” The administration has itemized nearly $600 billion worth of what it calls “cuts and reforms to mandatory programs” — half of that from Medicare.
* Geithner exaggerates when he says the ratio of spending cuts to tax increases is “roughly 2 to 1.” The administration’s $3 trillion in “spending cuts” includes more than $800 billion on two wars financed by deficit spending and already set to end, and tens of billions in new or higher fees and surcharges described as “reforms.”
* Boehner and other GOP leaders claimed in a letter to Obama that the president’s “proposal calls for $1.6 trillion in new tax revenue, twice the amount you supported during the campaign.” But the fact is that Obama’s fiscal 2013 budget proposal calls for $1.6 trillion in new tax revenues — which his opponent, Mitt Romney, attacked during the campaign.
* Boehner repeatedly (and falsely) says the president’s fiscal 2013 budget plan will create “trillion-dollar deficits for as far as the eye can see.” It’s true the fiscal 2013 deficit is projected to be close to $1 trillion, but annual deficits would fall each year thereafter — dropping to $488 billion by Obama’s final year in 2017.
There is also much confusion on what exactly is in the president’s plan — despite Geithner’s briefing to Republican leaders and their staffs on Nov. 29.
Boehner says the administration has proposed more in new stimulus spending than it proposes in spending cuts. His office says the new stimulus spending could exceed $600 billion but the president proposes only $400 billion in spending cuts. The administration tells us that the stimulus package would not exceed $200 billion.
Obama’s Plan: Neither Painless nor Lacking Specifics
Geithner and Boehner have been the point men for their respective sides of the fiscal cliff debate.
Geithner briefed Republican leaders on Nov. 29 and made multiple TV appearances on Dec. 2 to talk about the president’s plan — which we detail in our Nov. 30 article, “Facing Facts on Fiscal Cliff.”
Geithner and Boehner both appeared on “Fox News Sunday” and each provided misleading information about the Obama administration’s proposed plan.
Geithner claimed that the president’s deficit reduction plan is about “strengthening Medicare, not shifting costs to seniors.” However, the president’s plan does shift some costs to seniors — mostly to higher-income beneficiaries, but also for all new beneficiaries.
There are four proposals, contained in both the president’s 2011 deficit-reduction plan and his fiscal 2013 budget, that would increase costs to seniors by $32.9 billion over 10 years. All four proposals would begin in 2017 — after Obama leaves office:
* Expanded means testing for Medicare Parts B and D Premiums. The administration proposes to increase premiums under Medicare Part B (medical insurance) and D (prescription drugs) for higher-income seniors by 15 percent and freeze the high-income thresholds at current levels “until 25 percent of beneficiaries under parts B and D are subject to these premiums.” In 2012, only 5.1 percent of Part B enrollees and 3 percent of Part D enrollees pay higher premiums based on income, according to the Kaiser Family Foundation. The current thresholds for higher premiums are $85,000 for individuals and $170,000 for couples. Kaiser estimates that the income thresholds for paying higher premiums by 2035 will be equivalent to about $47,000 for individuals and $94,000 for couples “in today’s adjusted inflation dollars.” Cost to seniors: $28 billion over 10 years (pages 34-35).
* Increased Medicare Part B deductible for new beneficiaries. The administration would increase the deductibles paid by new beneficiaries by $25 in 2017, 2019 and 2021. Cost to seniors: $2 billion over 10 years (page 35).
* A copay for Medicare home-health care for new beneficiaries. There’s currently no copay. This proposal would create a new copay of $100 for each “home health episode.” Cost to seniors: $350 million over 10 years (page 35).
* Medicare Part B premium surcharge for new beneficiaries who purchase Medigap coverage. The administration would impose a Part B premium surcharge for new beneficiaries who purchase “near first-dollar Medigap coverage.” Medigap policies cover Medicare’s out-of-pocket expenses, such as copays and deductibles. The administration’s plan says Medigap provides “less incentive” to make cost-efficient health care decisions. Cost to seniors: $2.5 billion over 10 years (page 35).
As he made the rounds of the other Sunday talk shows, Geithner gave an accurate — but incomplete — accounting of the president’s Medicare proposals. On “Meet the Press,” for example, Geithner said that “we’re proposing to modestly increase premiums for high income beneficiaries of Medicare.” But he did not mention that the president’s plan also raises costs for all new beneficiaries, not just those with high incomes.
For his part, Boehner twice criticized the administration for failing to provide detailed cuts, claiming the administration “put $400 billion worth of unspecified cuts that they’d be willing to talk about.” Geithner said that’s not true, claiming the administration has “proposed $600 billion of detailed reforms and savings, to our health care and other government programs.”
Boehner is wrong.
The president’s deficit-reduction plan, as proposed to Congress in September 2011, itemizes “nearly $580 billion in cuts and reforms to mandatory programs, of which $320 billion is savings from Federal health programs such as Medicare and Medicaid.” Those proposals are also listed in the president’s fiscal 2013 budget proposal in a section, beginning on page 23, titled “Cutting Waste, Reducing the Deficit.”
The Medicare proposals, for example, are a mix of reduced payments to certain providers, including teaching hospitals and post-acute care facilities — as well as the higher premiums and new fees for certain beneficiaries that we mentioned above.
White House spokesman Jay Carney made this point at a press briefing on the day of Geithner’s meeting with Republican leaders.
