In a televised town hall, newly announced presidential candidate Sen. Bernie Sanders repeated several misleading claims that we have written about in the past.
- Sanders said Trump sought to “throw 32 million people off of the health care they had.” But that figure includes some who would choose to no longer purchase insurance if the individual mandate penalty were removed — which occurred this year.
- The senator repeated the misleading Democratic talking point that under the Republican tax plan signed by Trump, “83 percent of the benefits go to the 1 percent.” That’s true by 2027, because most of the individual income tax changes would have expired by then.
- Sanders said Trump’s proposed 2019 budget included cuts of $500 billion to Medicare and $72 billion to Social Security, but the Committee for a Responsible Federal Budget says “the proposed savings from Social Security and Medicare are in fact quite modest in size, would have little effect on benefits, and would actually reduce out-of-pocket health care costs for most seniors.”
- Sanders again claimed the U.S. is “now spending almost twice as much per capita on health care as any other country.” Estimates do show the U.S. spends almost double what many other countries do, but not all of them.
- He also once again claimed the U.S. has “more income and wealth inequality than any other country on Earth.” But we found analyses that — depending on the measurement used — show several nations have greater income and wealth inequality than the U.S.
The town hall was televised on CNN on Feb. 25, just a few days after Sanders launched a second bid for the presidency. As we mentioned, he discussed health care, taxes and economic inequality, among other topics.
32 Million Thrown Off Health Insurance?
Sanders repeated the misleading claim that Trump sought to “throw 32 million people off of the health care they had.” Some of those are people who would choose not to get insurance if the mandate penalty were removed, so it’s misleading to say they’d all be thrown off.
The figure Sanders cites is a government estimate of what would happen if Congress repealed the Affordable Care Act without replacing it. The effect of a repeal and replace bill — which failed to emerge from the Senate — was not forecast to result in as severe a decline in the number of uninsured. Trump supported the Republican-backed American Health Care Act — a bill that sought partial repeal and replacement of the ACA — but when that plan faltered, he also advocated for an immediate repeal of the ACA, with a replacement at a “later date.”
If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date!
— Donald J. Trump (@realDonaldTrump) June 30, 2017
Sanders relies on a July 19, 2017, Congressional Budget Office estimate of the effect of the Obamacare Repeal Reconciliation Act of 2017, which fits the bill as a “repeal and then replace at a later date” approach. The CBO did forecast that the bill would increase the number of uninsured by 32 million people over 10 years.
But not all of them would be thrown off their insurance, as Sanders said. As the CBO notes, “In the nongroup market, some people would choose not to have insurance partly because they choose to be covered by insurance under current law to avoid paying the penalty.”
The Obamacare Repeal Reconciliation Act would have repealed coverage provisions of the ACA after 2020, with the delay “presumably giving Congress time to come up with a replacement,” Timothy Jost wrote for Health Affairs. What a replacement plan might have looked like is unknown, and CBO did not estimate what the effects of a replacement bill would have on the uninsured. But in his tweet, Trump did advocate for a replacement bill “at a later date.”
Moreover, Trump did support the American Health Care Act — the main repeal-and-replace effort in 2017. The House passed it, but the Senate did not and it died. That year, Sanders and numerous Democrats claimed the bill would throw 24 million people off the health insurance they have. As we wrote then, however, while an analysis by the CBO and Joint Committee on Taxation did say that 24 million fewer Americans would be insured under the American Health Care Act than under current law in 2026, not all of them would “lose” insurance they have “today” or be “kicked off” their policies, as some Democrats described it. Rather, we wrote, the 24 million represents a complicated mix of some losing insurance, some deciding not to have it, others gaining it and others not being eligible for Medicaid insurance in the future.
One other thing to note, as our fact-checking colleagues at the Washington Post pointed out, CBO has since revised its estimate of the impact of repealing the individual mandate to buy insurance. In a May 2018 CBO report, the Post noted, repeal of the individual mandate is now projected to result in 8 million fewer insured by the end of the decade — half the number CBO initially forecast.
How the Top 1 Percent Fare on Taxes
Sanders repeated the Democratic talking point that under the Republican tax plan championed by Trump, “83 percent of the benefits go to the 1 percent.”
But as we have written, that’s misleading. It’s true for 2027, but only because most of the individual income tax changes expire by then.
The Republican tax legislation, which Trump signed into law on Dec. 22, 2017, allows most of its individual income tax provisions to expire after 2025, making the tax benefit distribution more lopsided for the top 1 percent than in earlier years.
In 2018, according to an analysis by the Tax Policy Center, the top 1 percent of income earners would get 20.5 percent of the tax cut benefits. In 2025, that percentage would be 25.3 percent, with the top 1 percent (those earning above $837,800) getting an average tax cut of $61,090.
Just two years later, in 2027, the percentage of tax benefits to this income group jumps to 82.8 percent, “because almost all individual income tax provisions would sunset after 2025,” the TPC explains. The top 1 percent still benefits from some of the remaining tax cuts, such as reducing the top corporate tax rate from 35 percent to 21 percent. But their average tax cut drops by nearly two-thirds to $20,660 in 2027.
Why do these individual tax cuts expire in the law? Republicans say they expect a future Congress will extend those cuts, rather than allowing taxes for many to increase. But in order to pass their tax bill through budget reconciliation, a process requiring only a majority vote in the Senate, Republican lawmakers could not add more than $1.5 trillion to the deficit over 10 years. Nor could they have a bill that added to the deficit beyond that 10-year window.
The tax law is expected to increase the deficit by $1.46 trillion over 10 years, according to the nonpartisan Joint Committee on Taxation.
Medicaid, Medicare, Social Security Cuts?
Sanders said that while Trump promised during the campaign not to cut Social Security or Medicare, his proposed 2019 budget included cuts of $500 billion to Medicare and $72 billion to Social Security. The nonpartisan Committee for a Responsible Federal Budget, however, says “the proposed savings from Social Security and Medicare are in fact quite modest in size, would have little effect on benefits, and would actually reduce out-of-pocket health care costs for most seniors.”
Sanders: I’ll tell you, it’s not just a president who said to the working class of this country, “I am on your side, I’m not going to cut Social Security, Medicare, and Medicaid,” and then he came forward with a budget, trillion dollar cut to Medicaid, $500 billion to Medicare, and $72 billion to the Social Security Disability Fund.
Presidents’ proposed budgets are largely symbolic, more a statement of priorities than anything Congress actually takes up. Indeed, Congress had passed — and Trump signed — a bipartisan two-year spending bill a few days prior to the White House releasing its FY 2019 budget proposal.
While the president’s budget proposal does include spending reductions for Medicare, Medicaid and Social Security, Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, said Sanders’ claim is “extremely misleading when it comes to Social Security and Medicare – less so for Medicaid.”
In a Feb. 16, 2018, analysis of Democratic claims that Trump’s budget would “slash,” “gut” and “devastate” Social Security, Medicare and Medicaid, CRFB writes: “It is certainly true that the budget proposes substantial reductions in Medicaid spending, but the proposed savings from Social Security and Medicare are in fact quite modest in size, would have little effect on benefits, and would actually reduce out-of-pocket health care costs for most seniors.”
Let’s take these one at a time.
Sanders said Trump’s budget would cut Medicare by $500 billion. While the Congressional Budget Office noted direct spending on Medicare would decrease by $472 billion over 10 years under the president’s proposal, Goldwein notes that some of that is due to moving “graduate medical education” and “uncompensated care” from the Medicare budget to other parts of the budget.
According to CRFB’s analysis, the Trump budget would reduce future Medicare spending increases by about $334 billion, and “come exclusively from reforming the delivery system, lowering drug prices, and reducing inefficiencies rather than cutting benefits for beneficiaries, and could be seen as broadly consistent with the President’s promise during the 2016 campaign not to cut Medicare benefits.” “In fact,” the analysis says, “the Medicare policies in the budget would have the effect of reducing drug prices, health care costs, Medicare premiums, and cost sharing. In other words, President Trump’s Medicare policies would reduce costs faced by seniors.”
“Many of the President’s (Medicare) policies are similar to those put forward by President Obama,” CRFB says.
As for Social Security, the $25 billion in reductions amounts to “less than 0.2 percent over a decade,” CRFB states, and “importantly, most of these changes are meant to reduce overlapping or improper payments and address certain inequities in the program.” In fact, the analysis states, “Just over half of the savings come from policies also proposed by President Obama in his own budgets.”
To get to $72 billion, Sanders also includes $48 billion the Trump budget claims to save from “Social Security Disability Insurance (SSDI) and Supplemental Security Income … from testing and eventually implementing different return-to-work strategies in these programs,” CRFB says. Goldwein said that $48 billion is “phony baloney,” a mere pilot program that is likely to only save a fraction of that amount. (CBO estimates total Social Security savings in the Trump plan at a much more modest $18 billion over 10 years.)
“When it comes to Social Security and Medicare, there is no slashing, gutting, or devastating to be found,” CRFB states.
Sanders may have a point with Medicaid, CRFB states. Outlays for Medicaid, the Supplemental Nutrition Assistance Program and non-defense discretionary spending would be reduced “at least 25 percent below their baseline levels for 2019-2028, with even deeper cuts in 2028.”
“Claims that Medicaid spending is significantly reduced in the budget are therefore reasonable,” CRFB says. Goldwein said the net effect of cuts to Medicaid are close to $1 trillion.
Health Care Spending
Sanders again exaggerated the gap in health care spending between the U.S. and the rest of the world. “We’re now spending almost twice as much per capita on health care as any other country,” Sanders said, echoing a similar claim he has made since at least 2015.
Sanders has a point that the U.S. spends a lot more on health care than other nations. But he went beyond the facts by saying America spends nearly twice as much as any other country.
The U.S. spent $10,209 per capita in 2017, according to the most recent data from the Organisation for Economic Co-operation and Development, or OECD. That’s more than double the 2017 OECD average of $4,069 per capita, and quite a lot more than most other developed nations.
However, Switzerland spent $8,009 per capita, Luxembourg spent $6,475 per capita and Norway spent $6,351 per capita. So, the U.S. didn’t spend almost double what they did.
Income and Wealth Inequality
Sanders also claimed: “In the United States right now, we have more income and wealth inequality than any other country on Earth.” That, too, is an exaggerated statement that Sanders has been making for a while.
The U.S. does not have more income inequality than any other country, according to the OECD Income Distribution Database.
Measured by the “Gini coefficient,” which the OECD says “is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive,” the U.S. ranks 6th out of the 38 industrialized nations for which the organization tabulated income inequality. As of 2016, the U.S. had a rating of 0.39 on a scale of 0 to 1, with 0 indicating “perfect equality” and 1 indicating “perfect inequality.” Countries with a higher inequality rating than the U.S. were South Africa, Costa Rica, Mexico, Chile and Turkey.
By another measure, which calculates a country’s share of “disposable” income held by the richest 10 percent of individuals, the U.S. (at 6.3 percent) ranked 5th. In that category, the U.S. again trailed South Africa, Costa Rica, Mexico and Chile.
As far as wealth inequality — which is different from income inequality — the U.S. does top the OECD’s list, at least when countries are ranked by the share of wealth held by the wealthiest households.
“Based on top wealth shares, household net wealth is most unequally distributed in the United States, where the richest 10% of households own 79% of total wealth, while the richest 1% holds 42%,” the OECD said in a June 2018 report.
But the OECD’s Wealth Distribution Database doesn’t include a wealth inequality calculation for every country.
When we checked the 2018 Global Wealth Report, which the Credit Suisse Research Institute published in October, we found that the U.S. had less wealth inequality than some nations the OECD leaves out.
The institute estimated that, in 2018, the richest 10 percent of Americans owned 75.9 percent of all the country’s wealth (see table 6-5 on page 156). That put the U.S. in 5th place out of the 41 economies covered by the report. Countries with greater wealth concentrations were Thailand (85.7 percent), Russia (81.8 percent), Turkey (81.2 percent) and India (77.4 percent).
When looking at the share held by the wealthiest 5 percent, the U.S. (63.3 percent) fell to 6th place behind those same four countries and Indonesia. And when considering the share held by the wealthiest 1 percent, the U.S. (35.3 percent) moved down further, to 12th place behind the five previously mentioned countries, as well as Colombia, Czech Republic, Mexico, Sweden, South Africa and Finland.
We asked the Sanders campaign what supporting information the senator had for his claims about income and wealth inequality in the U.S. So far, we have yet to receive a response.
Correction, Feb. 28: An earlier version of this story cited outdated CBO data on the revised impact of repealing the individual mandate on the number of uninsured.