Fact Check: Paul Ryan Twisted Truth to Sell Budget Deal to House
House Budget Committee Chairman Rep. Paul Ryan (R-WI) misled his colleagues in the House of Representatives about several major areas of the budget deal he cut with Senate Budget Committee Chairwoman Sen. Patty Murray (D-WA), Breitbart News has learned.
Misrepresentations include serious budget details ranging from how much deficit reduction is actually in the plan to how spending in this plan compares to spending if the current law, the Budget Control Act (BCA), remains the law of the land.
The budget deal passed the House 332-94 on Thursday evening, with 169 Republicans voting for it and 62 Republicans voting against it. The GOP support was thanks to Ryan’s selling of the plan among his colleagues, who largely trust him despite many figures of the conservative movement turning against him. Now, it turns out, Ryan used a series of statements whose veracity is questionable at best to convince his colleagues to support the bill.
Ryan’s claim, for instance, that this plan ends up resulting in $23 billion in total deficit reduction is not true. Ryan and Murray did not ask the Congressional Budget Office (CBO) to estimate interest payments on the $63 billion in increased spending that will need to be borrowed for the first couple of years of the budget. As such, the CBO score does not represent the full financial picture of the plan.
A Senate GOP aide with direct knowledge of these matters whom Breitbart News contacted estimated the interest payments over the course of the 10-year budget window on the $63 billion that will need to be borrowed to be approximately $8 billion. That means the plan increases spending by $71 billion and only includes $15 billion in deficit reduction in the out years of the budget window.
When asked to respond to why Ryan did not seek a CBO score that included an estimate of the interest payments on the borrowed money, Ryan spokesman Will Allison told Breitbart News that the “CBO does not as a matter of course include debt service in its cost estimates of legislation.”
While it may be true that the CBO does not automatically do interest estimates for borrowed money in budget legislation, a simple request from Ryan would have ensured that a more accurate estimate would have been provided to the public. It is fairly normal for CBO to include interest estimates, so normal that the agency did so for the Budget Control Act--the legislation Ryan’s deal with Murray would replace. On table 3 of the CBO score for the 2011 BCA legislation, there is a line that contains the “debt service” estimate.
Ryan’s office has not been clear in why he chose to not include such information in this CBO score.
Another issue arises on a question and answer page about the bill on Ryan's committee’s website. There he argues that the “agreement will cut spending and reduce the deficit even more than doing nothing will.”
Technically, according to the CBO, the claim that the deal “will cut spending” more so “than doing nothing will” is not accurate. CBO makes clear that by subtracting out fees and revenues and only comparing spending cuts to spending increases, the Ryan-Murray plan would spend roughly $11 billion more than under current law as established by the BCA.
“Looking solely at spending – not fees or revenues – the Bipartisan Budget Act would increase discretionary outlays over 2014-2023 by $62.4 billion, offset by only $51 billion in spending cuts,” said a different Senate GOP aide whom Breitbart News also contacted. “Therefore, it is a net spending increase both in the next two years and the Act’s full ten-year window ending in 2023.”
When asked about this matter, Ryan’s spokesman told Breitbart News that “according to CBO, the bill will reduce the deficit by $23 billion over 10 years.”
“The bill has a temporary upfront cost offset by savings that are permanent and grow over time,” Allison said. “Table 1 of CBO's cost estimate of the bill includes CBO's estimate of $78.4 billion of direct spending reductions and $6.6 billion of additional revenue. $6 billion of the additional revenue reflects increased contributions from federal civilian employees toward their pension benefits."
"These pension contributions are recorded in the budget as revenues," he claimed. "The remainder reflects the effects of making it harder for people to receive improper federal payments or for criminals to steal other people's identities.” But not all of the $78 billion in claimed spending reductions are in fact permanent. The deal includes the extension for 2 years of BCA sequestration of certain mandatory programs and customs user fees, which account for $35 billion of the total, meaning that the legislation likely would not achieve the same $78 billion in the second decade.
Another untruth that Ryan used to sell the deal came on a fact sheet bearing his name published by the House Budget Committee.
“The bipartisan budget agreement includes specific, concrete spending cuts, which come to a total of $85 billion in savings,” Ryan’s committee wrote in the first point of that document.
That claim is false. While the deal does have a net $85 billion in savings to replace the sequester, only $51 billion of that total comes from what Ryan describes as “specific, concrete spending cuts.” The other $34 billion comes from fee and revenue increases.
Allison, Ryan’s spokesman, told Breitbart News in response to questions about this matter that “the CBO cost estimate finds $78 billion of direct spending reductions.”
“The additional $6 billion is as noted above the result of increased federal civilian contributions to their pensions which represents a savings to the federal government from reduced cost to fund employees' pensions,” Allison said. “The federal government provides a range of specific services to specific populations. For instance, it offers insurance for private-sector pension plans and screens airline passengers for security."
"All taxpayers subsidize these services, even though they benefit only some subsets of the American public," Allison stated. "This agreement reduces those subsidies by requiring the beneficiaries to pay a greater share of these programs’ costs. In all cases—even after the fee increases—the beneficiaries will not cover the full cost of these services.”
Technically, Ryan’s office is correct by Washington, D.C. standards, but their argument hinges on the belief that increases in revenue to the federal government via fee increases and other measures are somehow a spending cut — something that conservatives would not agree is accurate. Fees don’t make government smaller but only provide a way to hide the true size of government.
In that same document, Ryan argued, “Taxpayers shouldn’t have to bail out private companies’ pension benefits. That’s why we ask private companies to cover more of the cost of guaranteeing their pension benefits. That would protect taxpayers and save $7.9 billion.”
In that statement, Ryan is referring to the Pension Benefit Guaranty Corporation (PBGC), an independent government agency under the purview of Congress through which private companies insure pension plans. At this time, the PBGC’s finances, as noted by the American Benefits Council, show that it is in no obligation to the taxpayers.
“The math is straightforward. Based on PBGC’s own report for the fiscal year ending September 30, 2013, assets held by PBGC for the single-employer program totaled $83.2 billion, while only $5.4 billion of benefits were paid,” the American Benefits Council wrote in December 2013. “At the same time, PBGC had $2.9 billion of premium income and $2.7 billion of investment earnings (a 3.3% rate of return on assets held at the beginning of the year). Thus, PBGC was able to pay all claims while at the same time increasing total assets.”
The PBGC works by companies paying a premium to the agency, which then uses the money to operate and handle each of its plans.
If a major company went under in the future, that arrangement could change, but at that point a simple short-term change in policy would likely be able to protect the taxpayers from any undue harm.
As such, Ryan is stating his actions are protecting taxpayers when they are not at risk -- a stretch at best.
Ryan’s spokesman pointed Breitbart News to the PBGC’s most recent annual report, in which Allison noted that the “PBGC in its most recent annual report notes that its deficit increased to $36 billion in 2013.” Allison does not explain why increases in PBGC premiums are being used to pay for new spending that is not related to the PBGC if Ryan is concerned with the financial outlook of the PBGC.