Paul Ryan Sets the Record Straight after President Obama's False Claims

In today's disappointing speech, the President made a series of claims that are simply false.

The President's attacks began with an admission that his assumptions reflect White House spin, not our budget's substance: “I want to go through what it would mean for our country if these cuts were to be spread out evenly."  Of course, the assumption that our budget makes these kinds of indiscriminate cuts is false. The House Budget Committee made dozens of specific assumptions to justify our numbers, and we made these assumptions public in the hundreds of pages of text we posted in plain view on the House Budget Committee’s website. It’s not a “secret plan” to “never tell us where the knife may fall” – it is a specific plan to cut waste, eliminate programs that don’t work, end crony politics, and carefully prioritize hardworking taxpayers’ money in precisely the way leaders of the President’s party have refused to do for over three years. In a related vein, does this new standard allow for analyses of the President’s budget to go through what it would mean for the country if the President’s $2 trillion tax increase were to be spread out evenly?

Instead of using numbers from the actual House-passed budget, the President’s claims relied on false assumptions created out of thin air by the White House.

As a matter of fact, it is actually the President’s budget that makes it far more likely that college students, the sick, mothers, young children, seniors and all Americans would face harsh disruptions in government services and indiscriminate cuts. By making our unsustainable fiscal trajectory worse, his budget guarantees a debt-fueled economic crisis, which would hurt society’s most vulnerable the first and the worst.

With respect the many false claims from today’s speech:

• CLAIM: The Path to Prosperity would gut “the very things we need to grow an economy that's built to last -- education and training; research and development.”
• REALITY:
• Education: The Obama administration’s policies have recklessly endangered the viability of the Pell program and helped fuel an unprecedented surge in tuition costs, which rose by over 8 percent last year. The Path to Prosperity aims to tackle the urgent problem of tuition inflation by encouraging innovation in higher education and making the Pell program sustainable. Contrary to the President’s false attacks, The Path to Prosperity maintains the maximum Pell award of $5,550.
• Job Training: The Obama administration’s track record in this area has been dismal: For instance, the  “green” skills training program, funded by $500 million in stimulus funds, that resulted in a mere 2 percent of trainees retaining jobs for more than six months. The Path to Prosperity advances reforms to increase job-training outcomes across the board by calling for the streamlining of duplicative federal job-training programs into a strengthened workforce development system with fewer funding streams that provide accountable, targeted career scholarship programs.
• Research and Development: The Obama administration has steered government away from investments in basic research and toward investments in specific companies, often controlled by top donors to the Democratic Party. The Path to Prosperity would continue funding essential government missions, including energy security and basic research and development, while putting an end to the administration’s crony politics. The Path to Prosperity rejects the administration’s insistence on taking from hardworking taxpayers in order to fuel special interest favoritism, like its failed ‘investments’ in specific companies like the now-bankrupt solar company Solyndra.

• CLAIM: The Path to Prosperity’s Medicaid reforms would “take away health care for about 19 million Americans -- 19 million.” 
• REALITY: 19 million is about the number of Americans forced into Medicaid by the President’s new health care law – so the President is just using a novel way of saying that we oppose his health care takeover and propose to repeal it. Medicaid is failing the people it currently serves, because the straightjacket of one-size-fits-all federal mandates imposed on the states has limited their flexibility to design programs that effectively serve their unique populations. Forcing another 20 million Americans into a broken Medicaid system is one of the many reasons Republicans opposed the President’s health care law and continue to support its repeal. Turning power over Medicaid to the states would result in a better program that more effectively serves those it is intended to help.

• CLAIM: “Who are these Americans?  Many are someone’s grandparents who, without Medicaid, won’t be able to afford nursing home care without Medicaid.  Many are poor children.  Some are middle-class families who have children with autism or Down’s Syndrome.  Some are kids with disabilities so severe that they require 24-hour care.  These are the people who count on Medicaid.” 
• REALITY: If the President is talking about new Americans added to Medicaid as a result of the health care law, then these are not people who currently rely on Medicaid for their care. As for people who do currently rely on Medicaid, freeing states to focus aid on the truly needy individuals the President describes is the only way to ensure that these individuals are guaranteed affordable, quality care. The one-size-fits-all approach favored by the President forces states to save money by making one-size-fits-all cuts – hitting all Medicaid-eligible individual with the same cuts, regardless of need. The President is the one jeopardizing care for the people he describes.  

• CLAIM: “Instead of being enrolled in Medicare when they turn 65, seniors who retire a decade from now would get a voucher that equals the cost of the second cheapest health care plan in their area.  If Medicare is more expensive than that private plan, they’ll have to pay more if they want to enroll in traditional Medicare.” 
• REALITY: The President appears to be either grossly misinformed or determined to mislead with regard to the House Republicans’ proposal to save and strengthen Medicare. All plans offered in the new Medicare exchange would be required to cover at least the actuarial value of the benefits offered by traditional Medicare, meaning that if the second-lowest-cost private plan is cheaper than traditional Medicare it is providing the same benefits in a more cost-effective way. The whole point is that private plans should be allowed to compete with traditional Medicare to deliver the same benefits at a lower cost. The result? Seniors get better value as providers are forced to compete against each other to better serve the patient. The President fails to grasp the basic concept that choice and competition remain the best means to delivers higher quality care at a lower cost. 

• CLAIM: “If health care costs rise faster than the amount of the voucher -- as, by the way, they’ve been doing for decades -- that’s too bad.” 
• REALITY: That too is wrong.  Under competitive bidding, there is no risk that any senior will be unable to afford his or her guaranteed Medicare benefits. There will always be one plan that is fully covered by the premium-support payment, and there will always be one plan that costs even less. Lower-income seniors and those with greater health risks receive extra protection – fully funded savings accounts to offset out-of-pocket costs and risk-adjusted payments to cover greater health care needs. Bipartisan experts agree that implementing these reforms in Medicare could be the key to putting downward pressure on health care costs for everyone. 

• CLAIM: “Seniors bear the risk.  If the voucher isn’t enough to buy a private plan with the specific doctors and care that you need, that’s too bad.” 
• REALITY: Incorrect: If Medicare spending grows faster than GDP + 0.5 percent – the same growth rate that the President has proposed for his board of 15 unaccountable bureaucrats(IPAB) to impose upon Medicare – then Congress would be required to intervene and could implement policies that change provider reimbursements, program overhead, and means-tested premiums. Under our plan, the entire risk would not fall on the beneficiary – Congress would be required to act. Under the President’s plan, the entire risk of IPAB’s cuts – which Medicare’s own chief actuary has said could “jeopardize access to care for beneficiaries” – would fall on the senior unless a supermajority of Congress voted to intervene.   

• CLAIM: “So most experts will tell you the way this voucher plan encourages savings is not through better care at cheaper cost.  The way these private insurance companies save money is by designing and marketing plans to attract the youngest and healthiest seniors -- cherry-picking -- leaving the older and sicker seniors in traditional Medicare, where they have access to a wide range of doctors and guaranteed care.  But that, of course, makes the traditional Medicare program even more expensive, and raise premiums even further.” 
• REALITY: Again, the President is simply wrong. Cherry-picking is prohibited under our reforms.Page 53 explicitly states “Seniors would be guaranteed a plan that is at least the value of the traditional fee-for‐service Medicare option. Health plans that participate alongside a traditional Medicare option in the Medicare Exchange would be required to offer insurance to all seniors — regardless of age and health status — thereby preventing insurers from cherry-picking only the healthiest seniors for coverage under their plans. These protections ensure that Medicare’s sickest and highest‐cost beneficiaries have access to affordable and quality coverage choices. The proposal requires all plans on the Exchange to include guaranteed issue (i.e., they cannot deny coverage based on pre‐existing conditions) and community rating (i.e., they cannot impose prohibitively disparate costs on seniors) to ensure that seniors are able to choose an affordable health plan that works best for them — without fear of denial or discrimination.”
• Not only are all seniors guaranteed coverage regardless of health history, our plan includes risk-adjusting as an extra precaution against cherry-picking. On page 53-54: “The federal contribution to seniors’ health plans would be risk‐adjusted so that the sickest seniors are protected from high premiums as well as adverse selection from insurers. Building on the risk‐adjustment tools currently used by the Centers for Medicare and Medicaid Services (CMS), proper risk adjustment would ensure that seniors with the highest health costs would still be able to find an affordable plan. Federal contributions would be increased to account for a senior’s health status and age. CMS would also conduct an annual risk review audit of all insurance plans participating in the Medicare Exchange. Insurance plans covering a higher‐than‐average number of low‐risk seniors would pay a fee. Conversely, insurance plans covering a higher-than‐average number of high‐risk seniors would receive an incentive payment. The fees and incentive payments would flow internally through the same fund, so that payments to plans that cover high-cost patients would be funded wholly by the fees from plans that cover low-cost patients.”
• The President is clearly, indisputably wrong.

• CLAIM: “The net result is that our country will end up spending more on health care, and the only reason the government will save any money -- it won’t be on our books -- is because we’ve shifted it to seniors.  They’ll bear more of the costs themselves.  It’s a bad idea, and it will ultimately end Medicare as we know it.”
• REALITY: The President’s health care law ended Medicare as we know it when it put the program’s future in the hands of 15 unelected, unaccountable bureaucrats and vested them with nearly unchecked power to cut Medicare spending in ways that will leave seniors with denied access to care. By contrast, our vision puts 50 million seniors in charge of their own health care decisions and lets the power of choice and competition work to improve quality and lower costs in health care.

To learn more: http://budget.house.gov/SettingtheRecordStraight/