Barack Obama wasn’t the only person misstating health care facts during prime time on Sept. 9. Louisiana Rep. Charles Boustany delivered the Republican response to Obama’s speech. We found a couple of factual flaws.
Bureaucracies vs. Bureaucrats
Boustany exaggerated when he stated that the Democrats’ bill "created 53 new bureaucracies." The claim is based on an analysis of H.R. 3200 conducted by the House Republican Conference. The Republicans’ analysis charges that "the House Democrats’ bill creates a massive new federal bureaucracy littered with new federal agencies, new programs, and new bureaucrats." The bill would indeed create new government jobs, programs and entities. But it’s false to claim that each of the 53 items on the list constitutes a new bureaucracy.
We found that the Republican Conference list contains 51 distinct items (it double-counts two programs because they apply to two types of facilities). Many of the 51 items really are new agencies — "bureaucracies" in GOP parlance — or new programs, many or most of which would likely require new staff, and thus might reasonably be considered new bureaucracies. But five items on the list are actually funding mechanisms — that is, new funds or trusts established in the Treasury Department to pay for the various programs the bill creates. And several of the 51 items are provisions for specific staff members within the various programs being created. There are, for instance, provisions for three different ombudsmen and a new assistant secretary in Health and Human Services.
The House Republican Conference breaks the items down accurately (except for the double-counting of two programs). They are not all "bureaucracies," and Boustany is wrong to say so.
Tort Reform Again
Boustany also recycled an old Republican myth about changing the tort system in the U.S.
Boustany: We do have ideas the president hasn’t agreed with. We’re grateful the president mentioned medical liability reform, and we hope he’s serious. We need to establish tough liability reform standards, encourage speedy resolution of claims, and deter junk lawsuits that drive up the cost of care. Real reform must do this.
The problem is, there’s little evidence that medical malpractice suits actually have much effect on the cost of health care. We first wrote about this back in 2004, when President Bush was making the claim. Although one 1996 study did find that so-called "defensive medicine" added between $60 billion and $108 billion per year to the cost of health care, more recent studies have disputed that assessment. In both 2004 and 2006, the nonpartisan Congressional Budget Office concluded that limiting medical malpractice claims would have little effect on the overall costs of health care.
The Return of the Incredible Shrinking Benefits
Boustany repeated another false claim we’ve debunked, saying that the House bill "cuts Medicare by $500 billion, while doing virtually nothing to make the program better for our seniors." Of course, "better" is a matter of opinion. But it’s misleading to say that the bill includes $500 billion in cuts. As we’ve said before, the $500 billion is a gross figure that counts all the cuts while ignoring increases in spending. The CBO puts the actual figure at about $219 billion in net "savings" (or "cuts," depending on which term you prefer). That’s after factoring in a $245 billion increase in spending on payments to doctors.
And none of the $219 in "savings" or "cuts" comes from reduction in current or future benefits to seniors.
A $600 Billion Tax Increase?
Boustany also claimed that the bill "raises taxes on job-creators by $600 billion." However, it’s unclear what the accurate figure is. What the House bill actually does is raise taxes on people making more than $280,000 a year, or $350,000 a year for couples. The nonpartisan Tax Policy Center projected that a little less than 2.2 million households (1.4 percent of all households) would be affected. Republicans argue that these upper-income folks own small businesses — but it’s unclear how many really can be considered small-business owners.
Moreover, most small businesses don’t actually employ anyone full-time. As we said back in 2008, the Census Bureau counts anyone with at least $1,000 in business receipts as a small-business owner. So the overwhelming majority of small-business owners are people who earn extra money from things like freelancing or running hobby businesses, while earning a living in some other way.
It’s fair to suggest that at least some small businesses may see a tax increase as a result of the House bill. But it’s wrong to suggest that the full $600 billion falls on "job creators."