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Fact-checking FactCheck.org
Sen. John McCain's (R-AZ) first health care plan released in 2007 was supposed to be financed by exposing health benefits to income and payroll taxes. But analysts argued that doing so would result in a massive tax increase on the middle class, so the campaign flip-flopped earlier this month and said that McCain would finance the plan by making major reductions to Medicare and Medicaid. Independent analysts estimated that the reductions "could result in cuts of $1.3 trillion over 10 years to the government programs." Last week, Sen. Barack Obama's (D-IL) presidential campaign released a television ad criticizing McCain for his proposal to pay for his health care plan with "major reductions to Medicare and Medicaid." The ad's assertion of potential benefit cuts was based on an analysis by the Center for American Progress Action Fund (CAPAF), which found that in order for McCain to close his $1.3 trillion budget gap, he would have to "cut Medicare by 13 percent over 10 years" as well as slash "Medicaid spending by 13 percent over 10 years." CAPAF calculated that neither McCain's Medicare and Medicaid spending would keep pace with medical inflation growth and enrollment increases, so his proposal would require "cuts in benefits, eligibility, or both."
FACTCHECK GIVES McCAIN A PASS: In an article yesterday, FactCheck.org argued that the CAPAF is "twisting facts to scare seniors" about McCain's proposal to cut $1.3 trillion from Medicare and Medicaid to finance his health care tax credits. But FactCheck.org's argument is flawed, as it relies solely on the denials of McCain senior policy adviser Douglas Holtz-Eakin, instead of conducting a thorough analysis of the implications of McCain's proposals. In the same interview in which he revealed that McCain "would pay for his health plan with major reductions to Medicare and Medicaid," Holtz-Eakin claimed that McCain's plan would still provide "the benefit package that has been promised." Since this level of cuts would reduce spending growth below inflation and population growth, CAPAF concluded that McCain could make up the budget shortfall by cutting "benefits, eligibility or both." FactCheck.org is taking the McCain campaign's explanations at face value without examining the conflicting assertions the campaign is making, namely that their proposal is budget neutral, does not raise taxes for most or all taxpayers, and does not cut Medicare or Medicaid benefits. It is a rank distortion for FactCheck.org to claim that CAPAF's analysis twists McCain's plan, when all it does is try to analyze the consequences of $1.3 trillion in cuts to Medicare and Medicaid.
McCAIN'S MATH DOESN'T WORK: CAPAF's analysis was based on the McCain campaign's repeated assertions that its health care plan is budget neutral. During the vice presidential debate, for instance, Alaska Gov. Sarah Palin (R) explained McCain's health care plan as being "budget neutral. That doesn't cost the government anything. ... But a $5,000 health care credit through our income tax that's budget neutral." The McCain campaign, which estimated that his health care tax credits will cost $3.6 trillion over the decade, initially said it would pay for the plan by taxing workers' health benefits, which are largely tax-free today. But, as CAPAF has previously argued, this would result in either a tax increase of $1,100 on the average family or a $1.3 trillion budget shortfall. Earlier this month, Holtz-Eakin told the Wall Street Journal that McCain would rely on "major reductions to Medicare and Medicaid" to fill the budget gap. Examining the consequences of McCain's newfound funding mechanism, CAPAF calculated that McCain's reduction does not keep up with medical inflation and enrollment rates and would require McCain to cut benefits, eligibility or both. Additionally, the McCain campaign has overstated the potential for pain-free Medicare and Medicaid "savings" that are not really "cuts." For instance, in July, McCain opposed cutting subsidies to insurers through Medicare Advantage, but now his campaign is wildly overstating the savings that such cuts would provide. The McCain campaign says the cuts would save $1 trillion over 10 years, which is more than six times the actual projected savings of $149 billion.
McCAIN HAS ALWAYS WANTED TO CUT MEDICARE SPENDING: Speaking to the Wall Street Journal this month, Holtz-Eakin claimed that "the campaign has always planned to fund the tax credits, in part, with savings from Medicare and Medicaid." Though Holtz-Eakin's revelation was new, it was not out of line with past statements from the McCain campaign. After its health care plan was released, the McCain campaign said that it planned to "reduce the growth in Medicare spending." McCain advisers reiterated the goal this past weekend, saying that the senator would force Congress to "control the growth" of Medicare spending. In fact, throughout his career, h has regularly supported slashing Medicare benefits and limiting eligibility. He has voted to cut, restrict or underfund Medicare at least 28 times while voting to restrict access to Medicare at least two times. In 1997, McCain voted in favor of raising the eligibility age for receiving Medicare from 65 to 67 with the change being phased in between 2003 and 2027. McCain has also voted against Medicare's future by opposing efforts to extend its solvency at least nine times.
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