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Bill Clinton used his nominating address at the Democratic National Convention to respond to the Republican critiques leveled at President Barack Obama during the GOP’s Tampa convention. But there was one attack in particular, he said, that "takes some brass."
"When Congressman (Paul) Ryan looked into that TV camera and attacked President Obama's Medicare savings as, quote, the ‘biggest coldest power play,’ I didn't know whether to laugh or cry," Clinton said in his Sept. 5, 2012, speech in Charlotte, N.C. "Because, that $716 billion is exactly, to the dollar, the same amount of Medicare savings that he had in his own budget.
"You gotta give one thing, it takes some brass to attack a guy for doing what you did."
Today, Medicare operates as a government-run health insurance plan for Americans over age 65. Ryan, the Republican nominee for vice president, is the head of the House Budget Committee and the architect of a plan to dramatically restructure Medicare. His idea is to eventually move Medicare toward private insurance companies by giving people a set amount to buy their own health insurance plans.
The new system would be for people who are under age 55 now, and it would give them voucher-like credits to buy traditional fee-for-service Medicare or competing private insurance plans. (The credits are sometimes called "premium support.")
The Republican response to attacks on the Ryan plan has been to attack back, saying President Barack Obama has cut "$700 billion" out of Medicare. And the Democratic response to that: Well, Ryan’s plan cuts that amount, too!
For this check, we’re looking at Clinton’s claim that Ryan attacked the president for "the same amount of Medicare savings that (Ryan) had in his own budget."
We recently checked a similar claim from Obama campaign spokeswoman Stephanie Cutter that "Paul Ryan protected those cuts in his budget." We’re applying what we learned to Clinton’s remark.
$700 billion in Medicare cuts?
There are cuts and then there are CUTS. Neither Obama nor his health care law literally "cut" a dollar from the Medicare program’s budget.
Rather, the health care law instituted a number of changes to reduce the growth of Medicare costs. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years. Time’s passage has only boosted that number.
What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.
Hospitals, too, will be paid less if they have too many re-admissions, or if they fail to meet other new benchmarks for patient care.
Still, the overall Medicare budget is projected to go up for the foreseeable future. The health care law tries to limit that growth, making it less than it would have been without the law, but not reducing its overall budget. So claims that Obama would "cut" Medicare need more explanation to be fully accurate. In the past, we’ve rated similar statements Half True or Mostly False, depending on the wording and context.
Because Medicare spending gets bigger every year, the cost-saving mechanisms in the health care law also get bigger. Also, it takes a few years for the health care law’s savings mechanisms to kick in. In fact, the effects of time are the main reason the $500 billion number has turned into $700 billion.
The Congressional Budget Office, the nonpartisan agency with expert staff that generates projections about how laws affect the federal budget and economy, determined in 2011 that the federal health care law would reduce Medicare outlays by $507 billion between 2012 and 2021. In a more recent estimate released this year, the CBO looked at the years 2013 to 2022 and determined the health care law affected Medicare outlays by $716 billion.
Does the Ryan budget include the same savings as the health care law?
Now onto our second question: Does Ryan’s budget include those same reductions in Medicare spending? The short answer is yes.
Here’s what Ryan said in an interview with George Stephanopolous of ABC News in June, before his selection as Republican nominee Mitt Romney’s running mate:
Stephanopoulos: "You know, several independent fact-checkers have taken a look at that claim, the $500 billion in Medicare cuts, and said that it's misleading. And in fact, by that accounting, your budget, your own budget, which Gov. Romney has endorsed, would also have $500 billion in Medicare cuts."
Ryan: "Well, our budget keeps that money for Medicare to extend its solvency. What Obamacare does is it takes that money from Medicare to spend on Obamacare. ..." (Read the full exchange.)
So Ryan confirmed his budget includes the Medicare savings.
The Romney campaign got questions on this point the day after Cutter’s remarks that "Paul Ryan protected those cuts in his budget," and issued a statement saying that Romney intended to fully repeal the federal law, including the savings for Medicare.
"Mitt Romney and Paul Ryan have always been fully committed to repealing Obamacare, ending President Obama’s $716 billion raid on Medicare, and tackling the serious fiscal challenges our country faces," said Lanhee Chen, Romney’s policy director, in a statement reported by NBC News. "A Romney-Ryan administration will restore the funding to Medicare, ensure that no changes are made to the program for those 55 or older, and implement the reforms that they have proposed to strengthen it for future generations."
Cutter, though, was talking about the Ryan budget, as was Clinton. We should point out that the Ryan budget is a congressional resolution that doesn’t have the force of law. And its plan for Medicare hasn’t been turned into legislation that could be analyzed in detail by the CBO.
Still, Ryan himself said his plan did include the same reductions in future spending that were part of the federal health care law. He explained a few days after Cutter’s remarks that it was only because Obama’s reduction "was already in the baseline," the Wall Street Journal reported. "We would never have done it in the first place." The article points out, however, that the budget assumed reversal of other Obama spending decisions.
So it was a choice to leave the reductions in place, likely because both sides agree on one point: Medicare spending is growing too rapidly, and it needs to reined in.
Clinton said that Ryan attacked the president for "the same amount of Medicare savings that (Ryan) had in his own budget." Clinton is correct that the Ryan budget plan included cost savings that were part of the health care law. Just recently, the Romney campaign backed away from that plan, saying Romney’s plan would restore the spending that the health law is set to curtail, such as extra funding for private insurers under the Medicare Advantage plan.
Still, Clinton was right about the Ryan plan. We rate his statement True.
Bill Clinton, speech to the Democratic National Convention in Charlotte, N.C., Sept. 5, 2012
PolitiFact, "Ryan's plan includes $700 billion in Medicare 'cuts,' says Stephanie Cutter," Aug. 12, 2012
PolitiFact, "Do Mitt Romney and Paul Ryan want to turn Medicare into a voucher program?" Aug. 16, 2012
Wall Street Journal's Washington Wire, "Ryan Says He Voted Against Medicare Cuts," Aug. 16, 2012
Congressional Budget Office, Letter to the Honorable John Boehner providing an estimate for H.R. 6079, the Repeal of Obamacare Act, July 24, 2012
Congressional Budget Office, CBO's Analysis of the Major Health Care Legislation Enacted in March 2010, March 30, 2011
Congressional Budget Office, H.R. 2, Repealing the Job-Killing Health Care Law Act, Feb. 18, 2011
Congressional Budget Office, The Long-Term Budgetary Impact of Paths for Federal Revenues and Spending Specified by Chairman Ryan, March 20, 2012
NBC News, Romney struggles to get square with Ryan's Medicare plan, Aug. 13, 2012
Pew Research Center, Opposition to Ryan Medicare Plan from Older, Attentive Americans, June 6, 2011
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