Chamber Of Commerce Says Taxpayers Should Help Pay For BP Spill Cleanup; GOP Leader Agrees, Then Recants

By Jason

Hey there, Americans! I’m sure, by now, many of you have had some time to reflect on the massive, unfolding Deepwater Horizon oil disaster and thought to yourselves, “My, that really is a terrible, apocalyptic cock-up!” But have you gone so far as to think to yourself, “My, that really is a terrible, apocalyptic cock-up, the costs of which I should logically be burdened with, because I am responsible for everything that happened?” No? Well, you should maybe start thinking that way, because the U.S. Chamber of Commerce thinks you should!

You know, the U.S. Chamber of Commerce typically doesn’t put itself out there as a big fan of socialism. But that all changes when we’re talking about risk and liability. In those cases, they love socialism to death! And that’s basically how Chamber President Tom Donohue is framing his call to put a greater share of the oil spill price tag on you and me:

“It is generally not the practice of this country to change the laws after the game,” said Tom Donohue, the president of the U.S. Chamber of Commerce. “. . . Everybody is going to contribute to this clean up. We are all going to have to do it. We are going to have to get the money from the government and from the companies and we will figure out a way to do that.”

Yes, now is the time for America to come together and demonstrate some communitarian pluck in response to the time that all of us collectively decided that British Petroleum should cut corners, blow up their oil rig, and cause a massive disaster in the Gulf of Mexico.

House Minority Leader John Boehner cosigns this call for collective responsibility:

In response to a question from TPMDC, House Minority Leader John Boehner said he believes taxpayers should help pick up the tab for the clean up.
“I think the people responsible in the oil spill–BP and the federal government–should take full responsibility for what’s happening there,” Boehner said at his weekly press conference this morning.

That’s from TPM’s Brian Beutler, who very helpfully points out that this is one of those times when the words “federal government” is used as a euphemism for “American taxpayers.”

HuffPost asked Boehner’s office to confirm his support of the Chamber’s position, and Boehner spokesman Michael Steel seemed to recant: “Boehner made a general statement about who is responsible for the spill, and the federal government oversight was clearly lacking, but he has said repeatedly that BP is responsible for the cost of the cleanup.”

But it’s worth noting that Boehner’s “general statement” came in response to a very specific question from Beutler: “Do you agree with Tom Donohue of the Chamber that the government and taxpayers should pitch in to clean up the oil spill?”

In any case — wow, it seems like only a couple of years ago that then Vice Presidential candidate Joe Biden was pretty roundly mocked for suggesting that paying taxes in support of the common weal was an act of patriotism. I guess a lot has changed since then!


Obama Bicycle Policy Wins Love From Cyclists, Scorn From Trucking Industry


eeping his head down and his helmet on. A backlash is brewing over his new bicycling policy.

LaHood says the government is going to give bicycling – and walking, too – the same importance as automobiles in transportation planning and the selection of projects for federal money. The former Republican congressman quietly announced the “sea change” in transportation policy last month.

“This is the end of favoring motorized transportation at the expense of non-motorized,” he wrote in his government blog.

Not so fast, say some conservatives and industries dependent on trucking. A manufacturers’ blog called the policy “nonsensical.” One congressman suggested LaHood was on drugs.

The new policy is an extension of the Obama administration’s livability initiative, which regards the creation of alternatives to driving – buses, streetcars, trolleys and trains, as well as biking and walking – as central to solving the nation’s transportation woes.

LaHood’s blog was accompanied by a DOT policy statement urging states and transportation agencies to treat “walking and bicycling as equals with other transportation modes.” It recommends, among other things, including biking and walking lanes on bridges and clearing snow from bike paths.

Transportation secretary is normally a quiet post, a Cabinet backwater. But LaHood has been the administration’s point man on an array of high-profile issues, from high-speed trains and distracted drivers to runaway Toyotas.

The new policy has vaulted LaHood to superstar status in the bicycling world. Bike blogs are bubbling with praise. A post on calls him “cycling’s man of the century.” The Adventure Cycling Association’s Web site calls LaHood “our hero.”

“LaHood went out on a limb for cyclists,” Joe Lindsey wrote on “He said stuff no Transportation secretary’s ever said, and is backing it up with action.”

The policy has also been embraced by environmentalists and many urban planners.

Word of the policy change is still filtering out beyond the bicycling and transportation communities, but the initial reaction from conservatives and industry has been hostile.

The National Association of Manufacturers’ blog,, called the policy “dumb and irresponsible.”

“LaHood’s pedal parity is nonsensical for a modern industrial nation,” said the blog. “We don’t call it sacrilege, but radical is a fair description. It is indeed a sea change in federal transportation policy that could have profound implications for the U.S. economy and the 80 percent of freight that moves by truck.”

LaHood said he has been surprised by the response.

“It didn’t seem that controversial to me,” he wrote in a second blog item. “After all, I didn’t say they should have the only voice. Just a voice.”

At a recent House hearing, Rep. Steve LaTourette, R-Ohio, suggested jokingly to a Transportation Department official that one explanation for the new policy is that the secretary’s thinking has been clouded by drugs.

“Is that a typo?” LaTourette asked. “If it’s not a typo, is there still mandatory drug testing at the department?”

The new policy is not a regulation and, therefore, not mandatory, Transportation undersecretary for policy Roy Kienitz responded to LaTourette.

But it’s LaHood’s view “that the federal government should not take the position that roads and trains are real transportation and walking and biking is not,” Kienitz said. “His view is it’s all real transportation, and we should consider it based on what benefits it can bring for the amount of money we spend.”

That didn’t satisfy LaTourette.

“So is it his thought that perhaps we’re going to have, like, rickshaws carrying cargo from state to state, or people with backpacks?” asked the congressman.

Bicycling advocates have been blasting LaTourette. Andy Clarke, president of the League of American Bicyclists, with 300,000 affiliated members, called his comments “a little childish.”

LaTourette said in an interview that he thinks bike paths, bike lanes and projects that make communities more walkable are fine but shouldn’t be funded with money raised by a gasoline tax paid by motorists. The federal gas tax pays for most highway and transit aid, although lately general Treasury funds have been used to supplement the programs.

LaHood noted that LaTourette supports federal funds for a bike path in his district.

“The point is, on his Web site he’s bragging about the fact that he got some money for a bike path,” LaHood said. “He knows people in his district like them.”

LaHood, 64, said he and his wife have biked on weekends for years. Three days before his announcement of the new policy, LaHood stood on a table to speak to a gathering of hundreds of bike enthusiasts in Washington. He drew cheers when he vowed the Obama administration will put affordable housing next to walking and biking paths.

“I’m not going to apologize for any of it,” he said in the interview. “I think this is what the people want.”


On the Net:

League of American Bicyclists:

Rubio tries to blame Crist for health care overhaul

Comment From:  Marco Rubio

“The path to ObamaCare becoming law all started with Charlie Crist supporting President Obama’s $787 billion stimulus.”

Marco Rubio is again trying to link Gov. Charlie Crist to President Barack Obama.

Rubio, the former state House speaker and Republican frontrunner for the U.S. Senate, has played and replayed images of Crist hugging Obama when the two campaigned together in Florida on behalf of the federal stimulus.

Now Rubio is trying to make a case that Crist, his rival in the Senate race, is to blame for the federal health care overhaul, too.

“The path to ObamaCare becoming law all started with Charlie Crist supporting President Obama’s $787 billion stimulus,” Rubio’s campaign said in a recent fundraising e-mail. “Marco is the only candidate you can trust to repeal Obamacare.”

We know that Charlie + Obama = manhug.

And Obama + Congress = health care overhaul.

But does Charlie + Obama + stimulus = Obamacare?

To be honest, we started this analysis not sure how Rubio’s statement could possibly be true. In fact, we wondered if the Rubio campaign aides would just scream ‘Uncle” and accept a Pants On Fire.

They didn’t.

“The night Obamacare passed, on the floor of the House, Nancy Pelosi said, in essence, that Obamacare would not be possible without the stimulus,” Rubio adviser Alberto Martinez told PolitiFact Florida. “Charlie Crist was instrumental in providing the political support that Barack Obama needed to pass the stimulus.”

That’s a big logical leap, so let’s explore the facts behind it.

On the fine point about Speaker Pelosi, Martinez is correct that she referenced the stimulus in her health care speech.

“We would not be here tonight for sure without the extraordinary leadership and vision of President Barack Obama. We thank him for his unwavering commitment to health care for all Americans,” Pelosi said on March 21, 2010. “This began over a year ago under his leadership in the American Recovery and Reinvestment Act where we had very significant investments in science, technology, and innovation for health care reform. It continued in the president’s budget a few months later, a budget which was a statement of our national values, which allocated resources that were part of our value system and in a way that stabilized our economy, created jobs, lowered taxes for the middle class and did so and reduced the deficit and did so in a way that had pillars of investment, including education and health care reform.”

The Rubio campaign tried to make hay of the speech the following day, linking Pelosi’s words to Crist in a press release. The campaign also posted a video of Pelosi’s statement with the headline “Pelosi: Road to ObamaCare began w/Crist-Obama Stimulus,” and is now repeating the claim in the fundraising pitch.

Charlie and the stimulus

No doubt about it, Crist supported, campaigned for and endorsed the federal stimulus bill.

But was he instrumental in it passing?

Crist campaigned for the stimulus bill with Obama in Fort Myers on Feb. 10, 2009. He made several national television appearances supporting the proposal, saying on Hardball with Chris Matthews, for instance: “It’s going to help (Floridians’) children. It’s going to help their traffic situation. It’s going to help produce more jobs here in the Sunshine State. That’s a perspective that I have to have as, in essence, the CEO of Florida. And that’s why I support it.”

We also know that Crist lobbied members of Florida’s congressional delegation from both parties to support the stimulus package. The Miami Herald reported that Crist lobbied Republican Reps. Mario Diaz-Balart and his brother, Lincoln Diaz-Balart, along with Democratic Reps. Kathy Castor and Debbie Wasserman Schultz.

But what good did all of that campaigning from a prominent national Republican do? How many votes did he affect in Congress? Was he the lynchpin?

Not a whole lot. Not a whole lot. And no.

The American Recovery and Reinvestment Act of 2009 passed the U.S. House 244-188, without the support of one Republican (which means no Republicans from Florida). It then passed the U.S. Senate 61-37, with just three Republican votes: Maine’s two Republican senators, Olympia Snowe and Susan Collins, and Pennsylvania Sen. Arlen Specter. (Specter’s now a Democrat, by the way.)

If you’re truly keeping score, the conference report — the congressional action that merges the House and Senate bills — passed the House 246-183, again without a single GOP vote, and passed the Senate 60-38 with the votes of Collins, Snowe and Specter.

We also checked the Congressional Record to see if members of Congress referenced Crist during floor debate on the stimulus. Crist’s name was mentioned once, on Feb. 11, 2009, by Democratic U.S. Rep. Betty Sutton of Ohio. Sutton was talking about Crist’s support of the stimulus and how Crist said it could save and create jobs in Florida.

So there’s nothing to confirm the Rubio campaign’s claim that Crist was “instrumental.” There’s no evidence that Crist’s support swayed a single vote. For the Florida delegation — like all state delegations except Maine and Pennsylvania — it was strictly a party-line vote. Indeed, Crist was more outlier than influencer, a rare Republican leader who spoke up but was roundly criticized in his party.

Brendan Daly, a Pelosi spokesman, said that because no House Republicans supported the bill, that he “does not think Crist was instrumental in passing it.”

We asked Kate Kelly, a spokesman for Specter, if Crist’s support had been a key factor for the Pennsylvania senator. She replied, “Sen. Specter has never mentioned that as a reason he voted for the stimulus.”

Charlie begat stimulus; stimulus begat health care

Now, to the Rubio campaign’s claim that the stimulus bill led to health care reform.

The stimulus act passed in February 2009 did have health care-related proposals, including a plan to create electronic health care records and about $20 billion to help unemployed workers purchase health care through the employer-based COBRA system. But the stimulus hardly was the impetus for health care reform. And if you read Pelosi’s statement again, that’s not what she was saying.

She was praising Obama and citing some of his accomplishments and notable proposals that included health care. But there’s scant evidence of a causal link between the stimulus and health care reform that the Rubio campaign alleges.

First, health care reform pre-dates the 2009 economic stimulus by years — or even decades.

Obama made it one of his key domestic policy promises during the 2008 campaign. And the roots of reform can be traced as far back as President Theodore Roosevelt (Obama frequently mentions that the nation has been trying to overhaul health care since then). And of course, the issue came up during the early 1990s when Hillary Clinton chaired the health care task force in the Clinton administration.

Second, Rubio has failed to prove a causal connection between the two. It’s not like the stimulus bill created some kind of legal foundation for health care reform — it was a bill filled with tax cuts and spending to boost the economy. And it’s not like it provided Obama with a huge surge of momentum. Indeed, more than a year lapsed between the final passage of the stimulus and the health care bill.

John Rother, executive vice president of policy and strategy for the AARP, a group that closely followed the health care debate, said there’s no link between the stimulus and health care bill.

Rubio “might be the only person in America who might make that claim,” Rother said.

Our ruling

So Rubio contends that “The path to ObamaCare becoming law all started with Charlie Crist supporting President Obama’s $787 billion stimulus.” The logic is that Crist was instrumental in helping Obama deliver the stimulus, and that the health care reforms would not be possible without the stimulus.

We find this wrong on both points. Crist, while a vocal supporter of the stimulus and one of the only major Republicans endorsing the spending plan, did little to sway votes in Congress and get the stimulus bill passed into law. And the stimulus, while it had a few health care provisions, had little to do with the health care bill that eventually was passed by Congress. The seeds for the health care bill were sewn during Obama’s presidential campaign in 2008, not at a town hall and hug in Fort Myers.

All this to say, our first instinct was right. Pants on Fire!

Early census returns are showing that conservatives are likely than liberals to return their census forms

politifact_falseComment by:  Patrick McHenry

“Early census returns are showing that conservatives have been measurably less likely than liberals to return their census forms.”

Rep. Patrick McHenry, the ranking Republican on the House subcommittee that oversees the census, says he’s worried that disparaging comments about the census by some Republican leaders is translating to lagging conservative participation. And the result, he warned, could be a competitive advantage for Democrats.

“Early census returns are showing that conservatives have been measurably less likely than liberals to return their census forms,” McHenry wrote in an op-ed for the conservative Red State.

“Few things will make Nancy Pelosi happier than large numbers of conservatives failing to respond to the census,” McHenry wrote. “If we do not respond, we will not be counted, and if we are not counted, then we effectively will not exist. That would reduce conservatives’ power in elections, allow Democrats to draw more favorable congressional boundaries and help put more tax-hiking politicians in office.”

McHenry said he is worried about “blatant misinformation (about the census) coming from otherwise well-meaning conservatives. They are trying to do the right thing, but instead they are helping big government liberals by discouraging fellow conservatives from filling out their census forms.”

McHenry didn’t name names, but the census-bashers are well known.

Back in June 2009, PolitiFact fact-checked two census claims made by Rep. Michele Bachmann, R-Minn.: that ACORN would be in charge of going door-to-door and collecting data from the American public; and that the Constitution doesn’t require people to give information beyond how many people are in their home. We rated both claims Pants on Fire!

“Unfortunately, the Census data has become very intricate, very personal (with) a lot of the questions that are asked,” Bachmann said then. “And I know for my family the only question that we will be answering is how many people are in our home. We won’t be answering any information beyond that, because the Constitution doesn’t require any information beyond that.”

And on March 3, 2010, Rep. Ron Paul, R-Texas, cast the lone vote in the House against a resolution to encourage participation in the 2010 census to ensure an accurate and complete count. (Bachmann, we note, voted for it).

Explaining his vote, Paul said, it was “for the simple, obvious reason that the census- like so many government programs- has grown far beyond what the framers of our Constitution intended. The invasive nature of the current census raises serious questions about how and why government will use the collected information. It also demonstrates how the federal bureaucracy consistently encourages citizens to think of themselves in terms of groups, rather than as individual Americans. The not so subtle implication is that each group, whether ethnic, religious, social, or geographic, should speak up and demand its ‘fair share’ of federal largesse.”

Higher levels of mistrust in the census among Republicans was borne out in a Pew Research Center survey in mid-March that found nearly one in three Republicans did not think the Census Bureau would keep personal information confidential (slightly higher than the mistrust among Democrats). It also found that Republicans are more likely to believe the census will cost the government too much money; and that it will ask more than the government really needs to know.

Still, we wondered if it was actually true that government distrust among some conservative Republicans really translated, as McHenry said, to early census returns showing that “conservatives have been measurably less likely than liberals to return their census forms.”

McHenry based that claim on a March 27, 2010, article in the Houston Chronicle which noted that conservative Texas was behind the national average in returning census forms and some of the lowest rates were in Texas’ most conservative counties.

The article cites low return rates in Republican-dominated counties like Briscoe County in the Panhandle; King County, near Lubbock; Culberson County, near El Paso; and Newton County, in deep East Texas.

It’s true that, with a state participation rate of 56 percent as of April 6, 2010, the decidedly Republican Texas lagged behind the national average of 62 percent. Texas participation in returning the mail-in census forms also lagged behind the national average in 2000 too.

And it’s true that within Texas, all four of the counties mentioned in the Houston Chronicle article lagged well behind even the state average.

But is that enough evidence to support McHenry’s claim about an alleged national trend? Not according to several demographers we spoke to.

First, all four of those counties are small. In 2008, King County had a whopping 202 registered voters. Together, the four counties comprise less than a tenth of 1 percent of the registered voters in Texas. Several census experts we spoke with said it would be a mistake to make any kind of conclusion about a state trend, let alone a national one, based on such a small sample.

And we found that all four counties significantly trailed the state and national averages for returns in 2000 as well.

“If they were low in 2000 and they are low now, it’s not the effect of a new change,” said Isaac W. Eberstein, a professor of sociology at Florida State University and director of the FSU’s Center for Demography and Population Health.

Eberstein also cautioned against concluding that because participation rates in those counties are low, and they are highly conservative, that means conservatives there are less likely to send the census back. In demographic circles, they talk about something called the ecological or aggregate fallacy, Eberstein said. The short version is that it’s an error in interpreting statistical data to assume that everyone in a group — in this case a county — has all the same characteristics. In other words, it could be that conservatives in those counties are participating at average levels, but that liberals are not.

Moreover, the counties appear to have been largely cherry-picked. We were easily able to locate numerous other counties in Texas that voted overwhelmingly in favor of Barack Obama in the 2008 election, but have participation rates similar to or lower than those four counties.

At our request, Frances Deviney, senior research associate at the Center for Public Policy Priorities in Texas, prepared a spreadsheet that correlated voting records by Texas county in the 2008 presidential election with participation rates in the census so far. And contrary to the claim by McHenry, the statewide data showed that counties that had higher vote tallies for Republican John McCain have slightly higher participation rates in the census.

“The short version is that what he’s saying doesn’t correlate with the data,” Deviney said.

Moreover, that Pew survey we mentioned earlier, while it did find partisan differences in attitudes about the census, it also found that a slightly higher percentage of Republicans (90 percent) than Democrats and independents (85 percent each) said they intend to participate in the census. And a slightly higher percentage of Republicans believe participating is a civic responsibility.

“We are not seeing that there is any sign of a partisan difference in intention to participate,” said Scott Keeter, director of survey research at the Pew Research Center. “Anti-government sentiment is not translating into the bottom line, according to our survey.”

We also looked at the participation rates of various states across the country, and found numerous examples of historically red states that have participation rates above the national average, as well as some below. Demographers we spoke with said they couldn’t discern any pattern indicating that states with higher percentages of Republicans were sending forms back at lower rates than Democratic ones. In fact, Bachmann’s Minnesota has one of the highest participation rates.

Citing the participation rates of four small counties in Texas to make a generalization about a national trend is “reading more into selected information than is warranted,” said demographer William O’Hare. “I can’t think of any evidence I’ve seen that there are such widespread concerns that Republicans are being under-counted in the 2010 Census.”

Here’s the thing about McHenry’s statement: it seems plausible. There has been a good bit of media attention on anti-government sentiment and skepticism from some conservative leaders relating to the census. It seems intuitive, then, that that might lead to lower participation rates among some segment of the conservative population. But so far, we haven’t found any objective evidence that that’s happening to any great degree.

For McHenry to make a conclusion about a national trend based on low participation rates in four small Texas counties is a stretch. Especially when one considers that these were low-participating counties in the last census too; and that there are lots of other low-participating counties in Texas that are not conservative.

On top of that, the Pew survey shows that while Republicans may be more distrustful of the census, they are by and large planning to participate, even at slightly higher rates that Democrats. Also, an independent review of all the counties in Texas showed that not only is McHenry’s claim unfounded, the opposite is more likely true — as counties that voted for McCain over Obama in 2008 have had slightly higher participation rates. And while decidedly conservative Texas has lagged behind the national average, there are lots of red states performing above the national average as well.

A spokeswoman from McHenry’s office told us he was just trying to be proactive and encourage all Americans to be counted. It’s hard to find fault with that. Still, we just don’t find any evidence that his premise that conservatives have been less likely to return their census forms than liberals is true. We rule McHenry’s statement False.

Big Business, GOP Complain That Health Reform Slashes Corporate Welfare

By Ryan Grim

The Republican Party and major corporations have joined forces in the first major rearguard attack on health care reform, charging that the cost of complying with “Obamacare” is resulting in hundreds of millions of dollars in added business expenses.

The crime that reform is guilty of: Slashing corporate welfare.

Under the previous system, major corporations were subsidized by the government to provide prescription drug coverage to their retired employees. At the same time, corporations could claim on their tax returns that it was they — not the taxpayers — who paid for the drug coverage, and could write the expense off as a tax deduction.

Health care reform cuts out that fat. The corporations still get taxpayer money to help pay for their drug coverage, but they can no longer continue the fiction that they’re using their own money to do it.

Being forced to operate on a diet of leaner corporate welfare benefits will make U.S. companies less able to compete, Republicans argue. Removing the benefit will also force large corporations to compete on a level — or at least closer to level — playing field with small businesses, who don’t get the subsidy. The charge-offs play into the line that Republicans are pushing — namely that health care reform is a “job killer.”

So far, Boeing, AT&T, AK Steel, 3M, Caterpillar, Deere, Prudential and Valero Energy have all said that reform is forcing them to take significant charge-offs on their balance sheet. The welfare cuts don’t go into effect for several years, but accounting rules require the reduction to be taken in the year the law is passed.

“A jobs narrative is emerging in the wake of the CAT, John Deere, Verizon (and many other) announcements as it is becoming clear that the health care bill is having an immediate and negative effect on the economy,” said Ken Spain, spokesman for the National Republican Congressional Committee. “In short, the bill is a job-killer.”

The NRCC is hitting Democrats in their home districts with each announcement. Four Illinois companies, including Illinois Tool Works, took significant losses “thanks to Democrats like Bill Foster and Debbie Halvorson, who supported the government takeover of healthcare,” reads one standard GOP press release.

Democrats are pushing back, demanding that the companies come to Congress to explain their announcements. Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), and Rep. Bart Stupak (D-Mich.), chair of the oversight subcommittee, wrote to AT&T. “The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern,” they wrote.

The Chamber of Commerce shot right back. Thomas Donohue, the organization’s president and chief executive, said that Democrats are trying to shift the blame.

“They are searching for a way to blame these businesses for a mess that the lawmakers themselves have made,” he wrote in a letter to board members.

But the underlying issue seems fairly simple: Corporate welfare is being cut to help fund an expansion of health care coverage.

UPDATE: The welfare in question originated with the 2003 prescription drug bill signed into law by President Bush after it passed a GOP-controlled Congress in the early morning, following a three-hour vote that was held open while leaders hunted down vote-switchers.

The program entitled corporations to a government subsidy covering 28 percent of the prescription drug benefit for their retirees. The companies were not required to count the taxpayer money as income. (Unemployment benefits, meanwhile, are taxed as income.) Companies were also allowed to claim the entire cost of the benefit as a write-off, even the part paid for by the government.

It’s an unusually generous entitlement. When corporations get subsidies for research or for hiring new workers, for instance, they can’t write-off the subsidy as if they were spending their own money.

The entitlement isn’t removed until 2013.

Wall Street analysts say that the eye-popping charge-offs that are being reported are more smoke than fire. “Don’t overreact to the hit to earnings,” David Zion, a research analyst for Credit Suisse, said in a note to investors.

The size of the accounting reductions being announced is so large, analysts said, because they project out the benefit from the current subsidy for 30 years, rising with health care’s current inflation rate, and then crams it all back into a one-quarter loss. First quarter profits will be reduced, but there will be no long-term impact on the companies’ financial health, the AP reported.

AT&T’s charge-off was reported as a billion dollars, but the actual cost of revoking the subsidy for one year will be $40 million, according to background information provided by the White House.

A White House aide also said that AT&T CEO Randall Stephenson and Larry Summers spoke Wednesday about the charge-off. Stephenson told Summers that AT&T’s hit could represent as much as ten percent of the entire impact of the cut in corporate welfare, because the company has so many retirees.

The day of the announcement, AT&T’s stock price rose slightly.

The health care reform bill “is the largest tax increase in U.S. history.”

Bush I, Clinton and Reagan all pushed taxes higher than the bump from Obama’s health care bill

On his Morning Joe program on MSNBC on March 24, 2010, host Joe Scarborough, a former Republican congressman from Florida, sparred with Sen. Dick Durbin over the tax effects of the health care reform bill.

In the course of less than a minute, the bill was alternately described as “the largest tax increase in U.S. history” (Scarborough) and “the biggest tax cut in history” (Durbin).

This seemed like a good place to step in and referee.

First, here’s the full context of the exchange between Scarborough and Durbin.

“If this fall’s election is going to be a referendum on this health care bill,” Scarborough said to Durbin “…What should Democrats do when their opponents say, correctly, this is the largest tax increase in U.S. history? And it was passed at a time when we’ve got 17 percent real unemployment. And also, it’s a further expansion of the federal government at a time when that worries a lot of Americans.”

“Joe, I keep hearing you every morning talking about the biggest tax increase in history, but you don’t mention it’s also the biggest tax cut in history,” Durbin responded “We have almost $500 billion in tax cuts. And the tax cuts go to small businesses to help pay for health insurance premiums. They’re going to go to individuals who can’t afford their health insurance premiums. It’s really going to make certain everybody has a chance for affordable health insurance.”

We’ll deal specifically with Durbin’s claim in a separate item. Here, we’ll tackle Scarborough’s claim the health bill is “the largest tax increase in U.S. history.”

On the tax increase side, here are the biggies, along with what the government’s Joint Committee on Taxation estimates they will bring in over the next 10 years:

Starting in 2013, an increase in the Medicare payroll tax by 0.9 percent on incomes over $200,000 ($250,000 for couples filing jointly). Also, people at this income level would pay a new 3.8 percent tax on investment income. The 10 year cost: $210.2 billion.
Starting in 2018, a new 40 percent excise tax on high-cost health plans, so-called “Cadillac plans,” over $10,200 for individuals, $27,500 for families. That’s expected to bring the government a total of $32 billion in 2018 and 2019.

  • Starting in 2011, new annual fees on pharmaceutical manufacturers and importers. That’s expected to raise $27 billion over 10 years.
  • Starting in 2014, a 2.3 percent excise tax on manufacturers and importers of certain medical devices. The 10-year total: $20 billion.
  • Starting in 2014, a new annual fee on health insurance providers. Total estimated 10-year revenue: $60.1 billion.
  • Starting in 2013, the floor on medical expense deductions will be raised from 7.5 percent to 10 percent of income. That’s expected to bring in $15.2 billion over the next 10 years.
  • Starting in 2011, a 10 percent excise tax on indoor tanning services. That’s expected to bring in $2.7 billion over the next 10 years.

In all, the Joint Committee on Taxation estimates various revenue-generating provisions in the health bill will bring $437 billion over the next 10 years.

When it comes to tax cuts in the health bill, that’s a matter of some debate. The plan includes government money to subsidize the cost of health insurance for lower income people who don’t get insurance through their employer. Those subsidies, which are estimated to amount to $464 billion over 10 years, are paid directly to the insurance companies. They come via tax credits, but many Republicans and tax experts argue those shouldn’t count as tax cuts. We’ll get into that in more detail in the fact-check on Durbin’s claim. There’s also a no-doubt-about-it tax cut for some very small businesses that kicks in immediately, and allows them to write off a portion of the cost of providing insurance to their employees. That’s expected to cost the government $40 billion over 10 years.

“There are big chunks of money coming in and big chunks of money going out,” said Linda Blumberg, a health policy expert at the Urban Institute.

So let’s talk net.

The government’s nonpartisan Congressional Budget Office estimated the changes in direct spending and revenue effects of the health care reform bill (as well as the reconciliation bill, which has yet to pass) and concluded the total net effect is that the bill would bring in an additional $525 billion in total revenues over the next 10 years.

Does that translate to the biggest tax increase ever?

Let’s first agree to some ground rules. For starters, it doesn’t make sense to compare, say, 2019 dollars to 1985 dollars. You have to adjust for inflation, or express the amount as a total of Gross Domestic Product at the time. The Republican calculation also uses the 10-year total effect of the net revenue gain, while in decades past, the Joint Committee on Taxation used to analyze tax provisions only in a 5-year window.

Jim Horney, director of federal fiscal policy at the left-leaning Center on Budget and Policy Priorities, thinks it makes the most sense to look at the last year of the 10-year CBO projections for the health care reform bill. By then, the plan is fully phased in, including the full effect of all the tax cuts and tax hikes. In that year, the total revenue increase is estimated to be $104 billion. That comes to a little less than 1/2 a percent of the projected GDP that year.

Horney notes that that’s slightly smaller than the tax effect in the fifth years of the Omnibus Budget Reconciliation Act of 1990 (a tax increase signed by President George H.W. Bush) and the Omnibus Budget Reconciliation Act of 1993 (a tax increase signed by President Bill Clinton), as a percentage of the GDP at the time. And it’s less than half of the tax increase (again as a percentage of GDP) from the Tax Equity And Fiscal Responsibility Act signed by President Ronald Reagan.

“CBO says the net effect on revenues is that it is an increase,” Horney said. “It’s not insignificant But it is far from being the largest tax increase in recent history.”

William Ahern with the Tax Foundation, a business-backed tax policy group, said total new revenues of $525 billion over 10 years isn’t close to the size of the Clinton tax hike in 1993 or the Reagan tax hike in 1982. However, he said, a rigorous comparison can’t be made because in 1982 and 1993, the Joint Committee on Taxation only did five-year estimates.

Blumberg, of the Urban Institute, said both Republicans and Democrats would be wise to get away from the “biggest” jargon.

Again, here we’re are looking at Scarborough’s side of the hyperbole wars. There’s ample evidence that the health care bills result in a net tax increase. But when Scarborough characterized it as “the largest tax increase in U.S. history,” that doesn’t hold up when you level the playing field and compare several tax increases in recent decades to the GDP at the time. And so we rate his claim False.

Obama Signs Health Care Bill

Let’s see what the future holds now and what things were added to this bill to make the senators and congressmen happy.

By Sam Stein

More than a year’s worth of intense political haggling, legislative maneuvering and emotional debate reached its stirring conclusion Tuesday morning as President Barack Obama officially signed health care reform legislation into law.

Speaking in the East Room of the White House, with roughly 200 lawmakers seated before him as well as Vicky Kennedy, the widow of the late Senator Ted Kennedy (D-Mass.), the president called the moment a “new season in America.”

“Today, after almost a century of trying, today, after over a year of debate, today, after all the votes have been tallied, health insurance reform becomes law in the United States of America. In a few moments when I sign this bill, all of the overheated rhetoric of reform will finally confront the reality of reform.”

“We are not a nation that scales back its aspirations,” Obama said. “We don’t fall prey to fear. We are not a nation that does what’s easy. That is not who we are, that’s not how we got here. We are a nation that faces its challenges and accepts its responsibilities.”

Obama dedicated the signing to individuals whose stories of struggle have come to personify the need for reform. Included in that list was his mother, “who argued with insurance companies even as she battled cancer in her final days,” the president said. Then he talked about his mentor in this fight, former Senator Kennedy.

“I remember seeing Ted walk through that door in the summit in this room a year ago, one of his last public appearances,” Obama said. “It was hard for him to make it but he was confident we would do the right thing”

It was, undoubtedly, a moment of jubilation and relief for the president — largely because few people in the administration anticipated how arduous the debate would be over the course of the year. Speaking just days before the House cast the deciding vote on Sunday, a senior White House official gave a hint at what kind of toll health care has taken on the administration.

“No president in this generation has spent as long a time on a singe legislative issue,” the official said, explaining that he couldn’t name a single comparable policy debate in recent administrations.

For many in Obama’s inner circle, health care reform began to eerily resemble a legislative version of the Democratic primary, with emotional ebbs and flows, dramatic breakthroughs, vitriolic rhetoric, crushing defeats and, ultimately, historic conclusions.

It started, like the primary, with a tall task. Administrations going back to Teddy Roosevelt have, in one form or another, tried to get health care reform into law, with no success on a major scale. Obama’s staff took a look at the landscape and decided early on to learn from the failures of the most recent effort — Bill Clinton’s attempt to reform health care in the early ’90s. Rather than take on special interests, they would accommodate them. Rather than write the legislation inside the White House, they would pay deference to Capitol Hill. Rather than browbeating opponents, the president would bargain with them.

The resulting deals were toxic for many — the pharmaceutical and hospital lobbies lent their support, but at the cost of watering down the legislation. The process was moving forward, even if the progressive community was aghast that the president (as early as last winter) talked about bargaining away the public option if it got him Republican votes.

During the August recess, Tea Party protests became forums for angry opponents of reform. During those dog days of summer, a sense developed that the floor had fallen out from under the party. Rep. James Clyburn (D-S.C.) a civil rights hero who was tasked with whipping support for legislation in the House, offered his most direct assessment to date that the environment had become riddled with racist undertones. Hill aides, for the first time, started questioning whether the Obama White House had done the grunt work needed to get health care reform passed. But the legislation progressed.

The January election of Scott Brown in Massachusetts provided more fodder for health care fatalists. Without 60 seats in the Senate, the conventional wisdom held, there was no avenue to get legislation finalized. Sen. Al Franken (D-Minn.) offered a withering critique of the White House’s hands-off approach directly to Obama’s senior aide, David Axelrod. And the griping between House and Senate leadership, as well as the White House’s political arm, grew intense — each side blaming the other for the impending failure.

But when the emotions ebbed and cooler heads prevailed, the party coalesced around a broad idea — that reform was needed and good for the Democrats — and a particular path forward, reconciliation for the fixes to the Senate’s bill. Whipping up the votes this past week, there was still uncertainty that the numbers were there. But a steady stream of “no” to “yes” votes among one-time skeptical Democrats, had aides reminiscing about the Democratic primary once again.

Did it feel like the late run of superdelegates in Obama’s favor?

“Let’s hope,” Robert Gibbs told the Huffington Post.

On Sunday, the president finally got the votes he needed. Three year’s prior he had told the audience at a progressive forum that he would judge his “first term as president based on the fact on whether we have delivered the kind of health care that every American deserves and that our system can afford.” On Tuesday he did just that, putting under his belt the greatest achievement in social policy in the past forty years. It wasn’t the end to the process. The Senate still needs to pass its reconciliation bill. But it was certainly a time to reflect on and savor what has been accomplished.

Speaking before Obama, Vice President Joseph Biden praised the president for “delivering on a promise,” and showing the resolve to get reform done.

“Your fierce advocacy, the clarity of purpose that you showed, the perseverance, these are in fact — it is not hyperbole to say it — the reasons why we are assembled in this room together,” Biden said. “Mr. President, you are the guy that made it happen… you have done what generations of not just ordinary, but great men and women, have attempted to do — Republicans as well as Democrats.”

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