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Florida Fandango

Republicans tangle with each other and the facts on torts, taxes and health care, and refuse to shed some old myths.


Summary

Tongues were sharpened before Sunday night’s GOP presidential debate in Orlando, with the candidates drawing blood right out of the gate. We found them factually challenged in several areas:

  • Giuliani stretched till he broke, in calling Thompson “the single biggest obstacle to tort reform” in the Senate.
  • Romney boasted of his Massachusetts health care plan and criticized Hillary Clinton’s, although her plan is strikingly similar to Romney’s Massachusetts program. He also falsely accused her of favoring “all-government insurance.”
  • Giuliani claimed the price of health insurance would drop more than 50 percent if millions more people purchased it directly, a statement unsupported by any evidence he’s offered so far.
  • Thompson said the most affluent 40 percent of Americans pay “about 99 percent of the taxes.” Actually, they pay less than 85 percent, and also have nearly 74 percent of all the income.
  • Giuliani made an inflated boast about bringing down crime in New York “more than anyone in this country – maybe in the history of this country.” But the decline started before he took office, continued after he left, and even the FBI itself warns against attributing crime statistics to any specific cause.

Analysis

With Sen. Sam Brownback out of the race, the number of contestants on the stage Sunday night was down to eight: Former New York Mayor Rudy Giuliani, former Massachusetts Gov. Mitt Romney, Sen. John McCain of Arizona, former Sen. Fred Thompson of Tennessee, former Arkansas Gov. Mike Huckabee, and Reps. Ron Paul, Tom Tancredo and Duncan Hunter. The debate, sponsored by the Florida Republican Party, was televised on Fox News Channel, with Fox anchor Brit Hume as moderator.

Thompson and Torts

Giuliani and Thompson seemed to contradict each other about a pet Republican cause, changes to the civil legal system. Giuliani accused Thompson of being “the single biggest obstacle to tort reform” in the Senate, while Thompson said, “I supported tort reform” as it applied to securities and product liability lawsuits.

Giuliani: I mean, Fred was the single biggest obstacle to tort reform in the United States Senate. He stood with Democrats over and over again. He voted against $250,000 caps on damages, which they have in Texas. He voted against almost anything that would make our legal system fairer: loser pays rules, things that would prevent lawsuits like that $54 million lawsuit by that guy who lost his pants – you know? That cost that family $100,000 in legal fees. I think the man should have to pay the family for the $100,000 that he took from them in the abusive lawsuit….

Thompson
: As far as tort reform is concerned, I supported tort reform with regard to securities legislation. I supported tort reform with regard to product liability legislation, things that have to do with interstate commerce. I think it appropriately passed. I supported and worked for those things. Local issues belong at the state level. Most states have passed tort reform.

When Republicans use the term tort reform, they’re generally talking about making it more difficult for individuals to file lawsuits against, say, doctors, toy manufacturers or dry cleaners for alleged wrongs, or in some cases capping the monetary damages that plaintiffs are awarded. We’ll leave aside for now our objection to the use of the word “reform” in situations like this; according to Webster’s, to “reform” means to “improve,” and the merits of the tort proposals are hotly debated.

First, it’s hard to see how anyone could think that Thompson was the “single biggest obstacle” to these changes in the legal system when he was in the Senate. Thompson voted with a majority of his fellow Republicans on some measures, with a large bloc of Democrats on others, but he was no crusader, nor did his vote ever prove decisive (none of the votes were that close).

More substantively, the innocent bystander should be excused for thinking that Giuliani and Thompson couldn’t both be right about the latter’s position on various tort measures. Actually, though, they mostly can. In 1995, Thompson voted against an amendment to a medical malpractice bill that would have capped punitive damages at $250,000 (Giuliani should have used the word “punitive”; those awards are distinct from the economic damages that compensate victims for their actual losses).

But Thompson is dead on, as well. He supported the Common Sense Product Liability Legal Reform Act of 1996 as well as the Private Securities Litigation Reform Act of 1995, which were designed to curb certain kinds of lawsuits against securities firms and manufacturers.

He also voted, in 1995, to make punishment more severe for lawyers who filed “frivolous” lawsuits. But Thompson opposed an amendment that same year to raise the standard of proof for plaintiffs to be awarded punitive damages in lawsuits involving interstate commerce.

Thompson is also correct that “most states” have passed some measures of the broad array that advocates refer to as “tort reform.”

It’s not clear whether “loser pays rules” would stop lawsuits like the recent infamous case in Washington, D.C., where a man sued a dry cleaner for $54 million over a lost pair of pants. There already are rules in local jurisdictions that allow defendants who win their cases to petition the court for reimbursement of their legal expenses, as the dry cleaner did in the case above. (The dry cleaner withdrew the claim, however, having raised more than enough funds to cover the $83,000 – not $100,000 – in legal bills; the case is on appeal.) The claims are decided on a case-by-case basis.

RomneyCare vs. HillaryCare

Romney attacked Hillary Clinton’s health care proposal while boasting of health care success in Massachusetts. But the plan he enacted in his state is quite similar to Clinton’s.

Romney: But Hillary says the federal government’s going to tell you what kind of insurance, and it’s all government insurance. And I say no, let the states create their own plans, and instead of government insurance, private, market-based insurance.…

The price of the premium for an individual, 42 years old, in Boston, used to $350 a month. Now, it’s $180. We basically cut it in half by deregulating…. This is the first state in America that is on track to have everybody insured. Half of my uninsured are now insured, and I am proud of what we’ve done.

Actually, the plan Romney brags about in Massachusetts shares a number of key characteristics with Clinton’s:

  • They both require that individuals obtain insurance and also require employers provide it.
  • They both provide government subsidies for those with low incomes.
  • Both expand the number of people covered under Medicaid.

However, Romney now says he wouldn’t propose a Massachusetts-style plan for the nation, so the track record of the Massachusetts plan is a poor indicator of what Romney’s current proposals might accomplish nationally. And while his claim that his state plan lowered premiums is correct according to the Commonwealth Connector, a state agency created to implement the plan, the group says that resulted from a legally required merging of small group and non-group markets, which is something states would be allowed to do – but not required – under Romney’s current proposal.

It’s also unclear how many of the previously uninsured have gained coverage under the Massachusetts plan. While the program has successfully enrolled 200,000 people (and the Connector calls those “newly insured individuals” on its Web site), some of those may have switched from less desirable policies. “Certainly there are people who didn’t have insurance and people who did,” says Dick Powers, a spokesman for the Connector. A more apples-to-apples measure comes from an annual survey of the uninsured taken by the Massachusetts Division of Health Care Finance Policy, which found that 395,000 people didn’t have insurance in the state in 2006. The survey shows only a 10 percent decrease in the uninsured between January through July 2006 and the same time period in 2007. That agency does not have more up-to-date numbers.

Furthermore, Romney’s claim that Clinton espouses “all government insurance” is false. Under her proposals, people could keep their current insurance and employer-offered health insurance could continue as it does now. It is true that Clinton’s plan would require much more government involvement than Romney’s nationwide proposal, which doesn’t call for any mandates and relies on tax incentives, such as allowing individuals to deduct insurance and medical expenses from their taxes.

Fred’s Tax Flub

Thompson exaggerated when he claimed the most affluent bear almost the entire federal tax burden.

Thompson: Hillary basically says that, you know, 40 percent of the people pay about 99 percent of the taxes. Why not 30 percent of the people? Why not 20 percent of the people?

We’ve never heard Sen. Clinton say any such thing, and it would be false if she did. It’s true that the U.S. taxes the affluent more than those who earn little, and also true that Sen. Clinton and other Democrats propose to ask upper-income earners to pay a somewhat greater share. However, Thompson’s “about 99 percent” figure would get him an “F” in 6th grade math. The actual figure is considerably lower. According to the nonpartisan Congressional Budget Office, the share of all federal taxes (including federal income taxes, excise taxes and payroll taxes) borne by the most affluent 40 percent of Americans in 2004 was actually 84.7 percent. (These affluent earners also had close to 73.9 percent of all pre-tax income, something Thompson neglected to mention.)

Thompson was probably referring only to the federal individual income tax, and omitting payroll taxes, which fall more heavily on lower-income workers, as well as  excise taxes and corporate income taxes. CBO figures show 99.1 percent of the federal individual income tax was paid by the most affluent 40 percent in 2004.

Welcome, Aliens

Giuliani glossed over his own record in denying that he made New York a “sanctuary” for illegal aliens.

Giuliani: Oh, the simple fact is that New York City had a policy of allowing people who are illegal immigrants to report crime and to put their children in school. Otherwise, we reported every single illegal immigrant that committed a crime.

In fact, Giuliani’s policy as mayor was not so simple as he now claims. As we’ve noted before, New York didn’t describe itself as a “sanctuary city” for aliens. However, Giuliani told the New York Times early in his first term that a hard-working but undocumented alien is “somebody that we want in this city.”

Giuliani, 1994: Some of the hardest-working and most productive people in this city are undocumented aliens…. If you come here and you work hard and you happen to be in an undocumented status, you’re one of the people who we want in this city. You’re somebody that we want to protect, and we want you to get out from under what is often a life of being like a fugitive, which is really unfair.

The Times said back then that the mayor was “virtually urging [illegal immigrants] to settle in New York City.”

Anti-Crime Capital

Giuliani made a grandiose boast that he “brought down crime more than anyone in this country – maybe in the history of this country – while I was mayor of New York City.” Crime certainly dropped dramatically during Giuliani’s tenure from 1993 to 2002. In fact, the city is still in the midst of a record-setting trend for consecutive years of declining violent crimes. However, it is a trend that actually started under Giuliani’s predecessor, David Dinkins, in 1990, when a high of 174,542 violent crimes were reported, according to the FBI, and has continued under his successor, Michael Bloomberg. In 2006, a new low of 52,086 such crimes were reported.

Plus, the FBI itself warns against drawing broad conclusions (one might even say claiming undue credit) based on these statistics. Click on its most recent Uniform Crime Report and you’ll see a pop-up window that advises:

FBI: Some entities use reported figures to compile rankings … these rough rankings provide no insight into the numerous variables that mold crime in a particular town, city, county, state or region. Consequently they lead to simplistic and/or incomplete analyses that often create misleading perceptions.

We couldn’t have said it better ourselves.

Health Insurance Fire Sale

Giuliani made a claim, unsupported by any evidence we can find, that health insurance rates would drop by half if more citizens bought their own health insurance.

Giuliani: We only have 17 million people in America who buy their own health insurance. If we have 50 million or 60 million people who bought their own health insurance, the price of health insurance would be cut in more than half.

We asked the campaign if there was any research supporting that statement, and they had no comment. The only backup we could find is Giuliani’s own faith in the virtue of free markets. He told The New York Times and other news organizations that as people buy private health insurance instead of getting it from their employers, the competition for customers would cause companies to lower their prices. In a town hall meeting in Concord, New Hampshire, in July, he equated the change in the price tag on plasma TVs to what could happen to health insurance. Televisions became cheaper, he said, “because there are lots of empowered consumers and the more you reduce the price the owners and operators realize the more consumers you get.” In health care, “[m]ost people are covered by their — by the government, Medicare and Medicaid, or by their employer,” Giuliani continued. “What we need is individual consumers in health care.”

We ran that logic by Kenneth Thorpe, professor of health policy at Emory University, who once worked in the Clinton administration and who has evaluated a number of presidential candidates’ health plans. Thorpe says he’s not exactly sure what Giuliani means, but he questions how such a price drop could happen. Administrative costs, he says, would not be lower if more people bought health insurance. “The only possible way it would reduce premiums is if the underlying claims expenses … were a third to a half lower.”

War over Peace

Romney falsely blamed Bill Clinton for the entire post-Cold War reduction in U.S. military forces.

Romney: During the Clinton years, the president said we’re going to take a peace dividend. We got the dividend. We didn’t get the peace. He reduced the scale of our military dramatically, took 500,000 troops out, cut back our Navy by 80 ships, knocked our Air Force down 25 percent. Our aircraft fleet today are 28 years old.

Romney has tried this bit before. In fact, we’ve called him on it once already. We pointed out in that earlier article that in inflation-adjusted dollars, defense spending dropped nearly 15 percent between Reagan’s last budget and the final budget of George H.W. Bush four years later – compared with just under 13 percent between Bush’s last budget and Clinton’s, a span of eight years. Bush’s defense secretary, a guy named Dick Cheney, told the Senate Armed Services Committee in 1992 that “overall, since I’ve been secretary, we will have taken the five-year defense program down by well over $300 billion. That’s the peace dividend.… And now we’re adding to that another $50 billion.”

Alien Benefits

Tancredo dusted off an old piece of misinformation from the 2006 campaign trail when he said there “is a plan to give Social Security benefits to illegal aliens who have worked in this country. That is ridiculous.” What’s more ridiculous is that this outdated scare tactic is still being used. There is no such plan. Rather, current law says that a formerly illegal alien who eventually becomes a legal citizen can get credit for any payments he or she made into the Social Security system while illegal. A Republican amendment to end the practice was defeated as part of an immigration bill that the Senate passed in May 2006 (which subsequently stalled). You can read more about the wrangling over this measure in our original report.

Not Again!

Romney, yet again, claimed to have closed a “$3 billion budget gap,” saying, “We solved it without raising taxes, without adding debt.” This is the fourth time we’ve pointed out that the actual budget gap was closer to $1.2 billion. And while he didn’t raise anything he called a “tax,” Romney increased fees and closed corporate tax “loopholes” to the tune of about $500 million during his four years as governor.

Giuliani, meanwhile, continued to claim credit for bringing about 23 tax cuts in New York City during his eight years as mayor. As we and others have pointed out repeatedly, a more accurate number would be 14. He also claimed to have “balanced the budget” and replaced deficits with surpluses, which was true for a time. But as we’ve pointed out before, he left his successor with a projected deficit of nearly $2.8 billion, even before the terrorist attacks of Sept. 11, 2001, worsened the city’s financial picture.

– by Viveca Novak, with Brooks Jackson, Justin Bank, Jess Henig, Emi Kolawole, Joe Miller and Lori Robertson

Supporting Documents

View the FBI’s popup warning about using crime statistics

Sources

Massachusetts Commonwealth Connector. “About the Connector: Overview.” www.MAHealthConnector.org Oct. 2007. 22 Oct. 2007.

Massachusetts Executive Office of Health and Human Services. “HCFP Survey Finds 40,000 Decrease in State’s Uninsured.” 27 Aug. 2007

Romney, Mitt. “The Romney Vision for Health Care Reform. “ www.mittromney.com 24 Aug. 2007. 22 Oct. 2007.

Clinton, Hillary. “American Health Choices Plan.” www.hillaryclinton.com 2007. 22 Oct. 2007.

Santora, Marc. “Giuliani Seeks to Transform U.S. Health Care Coverage.” The New York Times 1 Aug. 2007.

Romney, Mitt. “Expanding Access to Affordable Health Care.” Press release 24 Aug. 2007.

Langan, Patrick A. and Durose, Matthew R., “The Remarkable Drop in Crime in New York City.” Bureau of Justice Statistics, U. S. Department of Justice 21 Oct. 2004

Congressional Budget Office.  “Historic Effective Federal Tax Rates: 1979 to 2004.”  December 2006.

Sontag, Deborah “New York Officials Welcome Immigrants, Legal Or Illegal,” New York Times 10 June 1994: A1