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A Project of The Annenberg Public Policy Center

Ryan’s VP Spin

TAMPA, Fla. — Paul Ryan’s acceptance speech at the Republican convention contained several false claims and misleading statements. Delegates cheered as the vice presidential nominee:

  • Accused President Obama’s health care law of funneling money away from Medicare “at the expense of the elderly.” In fact, Medicare’s chief actuary says the law “substantially improves” the system’s finances, and Ryan himself has embraced the same savings.
  • Accused Obama of doing “exactly nothing” about recommendations of a bipartisan deficit commission — which Ryan himself helped scuttle.
  • Claimed the American people were “cut out” of stimulus spending. Actually, more than a quarter of all stimulus dollars went for tax relief for workers.
  • Faulted Obama for failing to deliver a 2008 campaign promise to keep a Wisconsin plant open. It closed less than a month before Obama took office.
  • Blamed Obama for the loss of a AAA credit rating for the U.S. Actually, Standard & Poor’s blamed the downgrade on the uncompromising stands of both Republicans and Democrats.

And when he wasn’t attacking Obama, Ryan was puffing up the record of his running mate, Mitt Romney, on taxes and unemployment.

Note to Readers

Our deputy managing editor, Robert Farley, is on the scene in Tampa at the convention center. This story was written with the help of the entire staff, based in Philadelphia and Washington, D.C. Next week, we will dispatch our managing editor, Lori Robertson, to Charlotte, N.C., for the Democratic convention. We intend to vet the major speeches at both conventions for factual accuracy, applying the same standards to both.

Taking Money from Medicare?

Ryan continued the campaign’s false line of attack that Obama had “funneled” money out of Medicare to pay for the federal health care law “at the expense of the elderly.” But that’s contradicted by Medicare’s chief actuary, in a statement at the end of the most recent report of the system’s trustees (our emphasis added):

Medicare Actuary, April 23, 2012: [Obama’s] Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook …

Medicare’s money isn’t being taken away. The Affordable Care Act calls for slowing the growth in spending, a move that — if successful — would keep the hospital insurance trust fund solvent for longer than if the reductions didn’t happen.

Ryan himself proposed keeping most of these same spending cuts in his most recent “Path to Prosperity” budget. Yet, Ryan criticized Obama’s cuts as “the biggest, coldest power play of all” and suggested seniors would suffer as a result.

Ryan, Aug. 29: And the biggest, coldest power play of all in Obamacare came at the expense of the elderly. … [T]hey just took it all away from Medicare, $716 billion funneled out of Medicare by President Obama.

The Affordable Care Act calls for a $716 billion reduction in the future growth of Medicare spending over 10 years, with most of that — about $415 billion — coming from a reduction in the future growth of payments to hospitals through Medicare Part A. And Medicare Part A’s trust fund, as we’ve explained before, is in trouble financially. It’s set to be insolvent in 2024, even with these spending cuts. Without them, the trust fund wouldn’t be able to fully pay projected benefits in 2016, the Medicare trustees estimate.

Deficit Commission

Ryan accused Obama of doing “exactly nothing” about recommendations from a bipartisan presidential commission to reduce the deficit. But Ryan himself was among a minority of commission members whose opposition scuttled the plan and prevented it from being sent automatically to Congress for action.

Ryan: He created a new bipartisan debt commission. They came back with an urgent report. He thanks them, sent them on their way, and then did exactly nothing. Republicans stepped up with good-faith reforms and solutions equal to the problems. How did the president respond? By doing nothing — nothing except to dodge and demagogue the issue.

The National Commission on Fiscal Responsibility and Reform’s report proposed deep spending cuts in both domestic and military spending, and an overhaul of the tax code that would have lowered rates but raised revenues — all in an attempt to slow the growth of government by $4 trillion over 10 years.

Many Republicans, including Ryan, opposed the military cuts and new tax revenue, while many Democrats opposed changes to Social Security that included raising the full retirement age.

The 18-member commission needed a super majority of 14 votes in order to bring the report to a vote in Congress. But it received the support of just 11 members. Seven members, including Ryan, opposed it, thus blocking congressional action.

In a statement on the final report, Ryan said he “could not support the plan in its entirety,” but said some elements of it were “worthy of further pursuit.”

Ryan opposed the commission’s approach to paying for lower federal income tax rates by taxing capital gains and dividends as ordinary income (see footnote on page 29). In his own latest budget plan, Ryan proposed to keep the current capital gains tax rate, arguing that to do otherwise “could precipitate a flight of capital away from job-creating businesses.”

Like Ryan, Obama thanked the commission in a Dec. 3, 2010, statement that promised to “study closely” its proposals for possible inclusion in his own budget plans. Nine months later, Obama submitted a deficit reduction plan to the Joint Select Committee on Deficit Reduction that was designed to reduce the deficit by $3.6 trillion over 10 years through a package of spending cuts and tax hikes.

Obama and House Speaker John Boehner, a Republican, tried to work out a so-called “Grand Bargain” that would have reduced the deficit through a mix of tax hikes and spending cuts — and even changes to Social Security. The New York Times reported that the Grand Bargain would have raised the retirement age and changed the formula for calculating benefits. But, as the Times reported, the deal fell through as members of Boehner’s caucus objected to raising taxes.

In short, both Ryan and Obama have proposed deficit-reduction plans — and each opposed the other’s plan.

Stimulus Deceit

Ryan falsely claimed that the stimulus failed to help taxpayers and that it “cut out” the American people. Actually, more than 25 percent of stimulus dollars went to provide tax relief for workers.

Ryan: [The stimulus] cost $831 billion. The largest one-time expenditure ever by our federal government. … You, the American people of this country, were cut out of the deal.

The nonpartisan Joint Committee on Taxation calculated that about $230 billion of the American Recovery and Reinvestment Act provided tax relief. Much of that money, about $116 billion, funded the Making Work Pay tax credit for workers. In 2009 and 2010, the credit gave up to $400 to individuals earning up to $75,000, and gave up to $800 to couples earning up to $150,000.

Janesville Plant Closing

Ryan cited the closing of a GM plant in his hometown of Janesville, Wis., as evidence of Obama’s failing to deliver on promises made in the 2008 presidential campaign. But as it happens, the plant closed before Obama even took office.

Ryan: My own state voted for President Obama. When he talked about change, many people liked the sound of it, especially in Janesville, where we were about to lose a major factory.

A lot of guys I went to high school with worked at that GM plant. Right there at that plant, candidate Obama said: “I believe that if our government is there to support you, this plant will be here for another hundred years.” That’s what he said in 2008.

Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day. And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight.

Here’s what Obama told workers during a campaign stop at the struggling GM plant in Janesville back in 2008:

Obama, Feb. 13, 2008: And I believe that if our government is there to support you, and give you the assistance you need to re-tool and make this transition, that this plant will be here for another hundred years. The question is not whether a clean energy economy is in our future, it’s where it will thrive. I want it to thrive …

It’s true that the plant didn’t last another year, as Ryan said. In fact, the Business Journal in Milwaukee wrote that the assembly plant shut down on Dec. 23, 2008, at the tail end of the Bush administration, a victim of the financial crisis and dwindling demand for the SUVs produced at the plant. That’s nearly one month before Obama was sworn into office.

About 100 workers were kept on in 2009 to finish a truck order and help shut down the plant, according to the Associated Press.

‘Downgraded America’

Ryan faulted Obama for a credit downgrade for which Ryan’s own party shares equal responsibility. Ryan said that “a presidency that began with such anticipation now comes to such a disappointing close,” adding:

Ryan, Aug. 29: [Obama’s presidency] began with a perfect AAA credit rating for the United States; it ends with the downgraded America.

Ryan refers to the decision of Standard & Poor’s, the credit rating agency, to downgrade its score for U.S. Treasury obligations from AAA to AA+ on Aug. 5, 2011. That took place just four days after Congress voted to raise the federal debt ceiling, following lengthy negotiations in which House Republicans sought to force concessions from Obama and Senate Democrats as the price for raising the ceiling and averting the first default on Treasury debt payments in U.S. history.

In its report, Standard & Poor’s blamed both Republicans and Democrats for failing to come to agreement on spending cuts or revenue increases sufficient to reduce U.S. deficits significantly. It said:

S&P, Aug. 5, 2011: The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. …

Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee [of Congress] decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options.

Ryan, of course, is among those Republicans opposed to any “new revenues” from tax increases.

Puffing Up Romney’s Record

Running through Romney’s credentials, Ryan boasted about Romney’s fiscal and jobs record as governor of Massachusetts. But there’s a bit less there than Ryan lets on.

Ryan: He was the Republican governor of a state where almost nine in 10 legislators are Democrats, and yet he balanced the budget without raising taxes. Unemployment went down, household incomes went up, and Massachusetts, under Gov. Mitt Romney, saw its credit rating upgraded.

It’s true that Romney balanced the state budget every year — as Massachusetts’ Constitution requires — and Romney never raised personal income taxes. But as we have noted whenever this claim has arisen — which has been frequently — Romney did hike  government fees by hundreds of millions of dollars, and he also closed loopholes on some corporate taxes.

Ryan also said that under Romney, “unemployment went down.” That’s true. According to unemployment data from the Bureau of Labor Statistics, the unemployment rate in Massachusetts went from 5.6 percent when Romney took office in January 2003 to 4.6 percent when he left office in January 2007.

But when considered in light of an improving national economy, Romney’s record on unemployment is a bit less impressive. Massachusetts’ unemployment rate was slightly lower than the national rate when Romney took office, and it was roughly the same as the national rate when he left.

— Robert Farley, with Brooks Jackson, Eugene Kiely, Lori Robertson and Ben Finley

Update, Aug. 30: A Ryan spokesman argues that the GM plant technically remained on “standby” status, meaning it was possible that the company might resume production there. But as a Milwaukee Journal Sentinel story noted nearly a year ago, “no one seems to be counting on that.”