American Crossroads: “Consequences”

American Crossroads hits Nebraska Senate candidate Bob Kerrey (D) for opposing a balanced budget amendment and supporting health care reform and cap-and-trade. But current debt levels are due to the recession and Bush-era policies, not to the absence of a constitutional balanced budget amendment, which would make it harder for the government to respond to economic downturns. Kerrey’s position on health care is that the law must be amended rather than fully repealed, which would have negative consequences that include kicking millions of people off insurance and forcing seniors to pay more for care. In context, the former senator’s remarks on cap-and-trade legislation make it clear that Kerrey views climate change as a moral issue without dismissing its impact on jobs and the economy.

Bush Policies And Recession Caused Debt To Skyrocket

Prior To President Obama’s Inauguration, President Bush Had Already Created A Projected $1.2 Trillion Deficit For Fiscal Year 2009. From the Washington Times:  “The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn’t enact any new programs. […] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record.” [Washington Times1/8/09]

NYT: President Bush’s Policy Changes Created Much More Debt Than President Obama’s. The New York Times published the following chart comparing the fiscal impact of policies enacted under the Bush and Obama administrations:


[New York Times, 7/24/11]

Recession Added Hundreds Of Billions In Deficits By Increasing Spending On Safety Net While Shrinking Tax Revenue. The Center on Budget and Policy Priorities (CBPP) explains: “When unemployment rises and incomes stagnate in a recession, the federal budget responds automatically: tax collections shrink, and spending goes up for programs like unemployment insurance, Social Security, and Food Stamps.” According to CBPP: “The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs. Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook alone accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $300 billion in added deficits, much of it in the form of additional debt-service costs.” [, 11/18/10;, 5/10/11, citations removed]

Over The Coming Decade, The Bush Tax Cuts Are The Primary Cause Of Federal Budget Deficits. The Center on Budget and Policy Priorities prepared a chart showing the deficit impact of the Bush tax cuts (orange), the Iraq and Afghanistan wars, the recession itself, and spending to rescue the economy:


[, 5/10/11]

CBPP: Bush Tax Cuts And Wars Are Driving The Debt. According to the Center on Budget and Policy Priorities:

The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.


[Center on Budget and Policy Priorities, 5/20/11]

Balanced Budget Amendment Would Worsen Future Economic Downturns

Bartlett: Balanced Budget Amendment “Would Force The Federal Government To Make Economic Recessions Worse.” According to Bruce Bartlett, a former adviser to President Ronald Reagan, in the Fiscal Times: “A BBA would force the federal government to make economic recessions worse. Since federal revenues fall and spending rises automatically in economic downturns, it would force spending cuts and tax increases at precisely the point when the economy is reeling, potentially turning a modest downturn into a depression.” [Fiscal Times8/27/10]

OMB Watch: “Balanced Budget Amendment Could Impede Economic Recoveries.” According to OMB Watch: “While forcing Congress to balance the books through a constitutional mandate may be appealing to many fiscal hawks, a balanced budget amendment could impede economic recoveries following Wall Street meltdowns and other calamities.” [OMB Watch, 1/25/11]

Kerrey Supports Making Changes To The Health Care Law

Kerrey: “Fix It, Don’t Repeal It.” From the New York Times article cited by American Crossroads: “On health care, Mr. Kerrey said he would have voted for the Obama legislation, but he also said he would like to see it changed. ‘My position will be fix it, don’t repeal it,’ he said. ‘I prefer not single-payer, but I think you’ve got to get everyone in the same group. I think the commercial payers can get it done.’ He also says that a form of premium support, favored by many Republicans, ‘can work with everyone in a single group.’” [New York Times, 4/3/12]

Repeal Would Have Negative Consequences For Millions

Up To 6.6 Million Young Adults Would Lose Health Care Coverage Through Their Parents’ Plans. From the Los Angeles Times: “President Obama’s healthcare law helped as many as 6.6 million young adults stay on or get on their parents’ health plans in the first year and a half after the law was signed, a new survey indicates. […] Earlier surveys by the federal government found that the number of people ages 19 to 25 without insurance declined after the law was signed, reversing years of erosion in health coverage for young adults.” [Los Angeles Times6/8/12]

70,000 Americans With Pre-Existing Conditions Would Lose Insurance Coverage. According to the Department of Health and Human Services, as of May 31, 2012, 73,333 people were enrolled in the Pre-Existing Condition Insurance Plan (PCIP) created by the Affordable Care Act. [, 7/13/12]

5.2 Million People Would Have To Pay More For Prescription Drugs. From the Centers for Medicare and Medicaid: “As a result of the Affordable Care Act, over 5.2 million seniors and people with disabilities have saved over $3.9 billion on prescription drugs since the law was enacted.  The Centers for Medicare & Medicaid Services (CMS) also released data today showing that in the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs in ‘donut hole’ coverage gap for an average of $629 in savings this year. […] Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will be closed.” [, 7/25/12]

Over 35 Million Seniors Would Lose Access To Free Preventive Services. The Centers for Medicare and Medicaid Services [CMS] report that 35,106,598 people were enrolled in Medicare Part B in 2011. CMS also reports:

Beginning January 1, 2011, the Affordable Care Act eliminated Part B coinsurance and deductibles for recommended preventive services, including many cancer screenings and key immunizations. The law also added an important new service — an Annual Wellness Visit with a health professional — at no cost to beneficiaries.

According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries, including 2,404,792 African-American beneficiaries, 537,110 Hispanic beneficiaries, 104,393 American Indian beneficiaries, and 508,398 Asian-American beneficiaries. [, 2/15/12]

In 2009, Kerrey Said Climate Change Must Be Framed As A “Moral Challenge”

In “Damn The Consequences” Remarks, Kerrey Was Talking About Framing Climate Change Bills In Moral Context, Not Disregarding Impact On Jobs. From remarks Kerrey gave at the New School’s Tishman Auditorium in October 2009:

My own view is that there’s two possibilities in looking at the facts. You either believe after looking at the facts that we have a serious problem on our hands, a very serious problem on our hands that could transform the nature of life on earth, or you don’t. And I will say, Bill, I was upset to discover there are some individuals who I had previously regarded as intelligent who are now in the Senate who have reached a conclusion that it isn’t a problem.

But there were also senators in 1964 who had reached the conclusion that Jim Crow laws weren’t a problem when civil rights was being debated that summer. I noted that the civil rights legislation of ’64 and voting rights legislation of ’65 were an even larger interference in the market than climate change legislation. There was substantial interference with almost everything that was going on in the United States of America at the time. It transformed the workplace, it transformed education, but it was a major interference on the part of the federal government, and you either believed that the discrimination that was in place at the time was wrong or you didn’t. And if you believed it was wrong, you voted in the affirmative, and if you believed that it wasn’t wrong, you voted no.

My view of climate change and climate change legislation that comes out of identifying that as a problem has to be considered in the same fashion. If you believe it’s a problem and a moral challenge, you have to vote in the affirmative. You do not want history to record that you voted no. When I was in the Senate I knew members of the Senate who were there in 1964 who had voted no on civil rights because they represented southern states, and they have never permanently got over it. They are ashamed of the fact that they voted no on civil rights. And when I talk to members of the Senate, that’s what I say. I think if you vote in the negative you will likewise, the older you get, you will look back on that negative vote and you will be ashamed of that vote.

So unless, in my view, it is framed in that kind of moral context, it’s very difficult to get into the economic development argument that you can create more jobs than are likely to be destroyed. I happen to believe that you can, with the right investment strategy. But I don’t think it rings the bell sufficiently given the current economic conditions to get people finally to say, ‘Damn the consequences, I’m going to vote yes.’ [Bob Kerrey Remarks via, 10/22/09]

2009 And 2010 Climate Change Bills Would Have Boosted The Economy At Minimal Cost To Consumers

Senate Version Of Cap-And-Trade Estimated By EPA To Have “Relatively Modest [Economic] Impact” On Households. From the Christian Science Monitor: “A stalled climate-energy bill in the Senate got a boost Tuesday from federal regulators who reported it would not be too costly, then from President Obama. […] The bill, which includes a market-based ‘cap and trade’ mechanism to put a price on carbon emissions from US smokestack emitters, would hike energy costs for both businesses and consumers. But with rebates for consumers in the plan, as well as other factors, the overall cost to American households would be $79 to $146 annually, the EPA found. The American Power Act would have ‘a relatively modest impact on US consumers,’ assuming that the ‘bulk of revenues from the program are returned to households lump-sum,’ the study’s authors wrote. The EPA also found that the cost to polluting businesses, such as coal-fired utilities, would not be too onerous. The cost to them to purchase allowances from the government for each ton of emissions was projected to be $16 to $17 per metric ton of greenhouse gases by 2013 and $23 to $24 per ton by 2020.” [Christian Science Monitor, 6/16/10]

  • Senate Bill Would Protect Low-Income Consumers Against Higher Energy Bills. From the Center on Budget and Policy Priorities:Like the climate-change bill the House passed last year, the Kerry-Lieberman proposal includes a program of direct payments (“energy refunds”) for low-income households. The refunds would protect the typical household in the poorest 20 percent of the population from incurring a financial loss as a result of the policies necessary to reduce greenhouse-gas emissions. (The bottom 20 percent consists of households with incomes below roughly 150 percent of the poverty line, or about $33,000 for a family of four.) The proposal also includes a smaller refundable tax credit for families with modestly higher incomes.” [, 5/24/10]

Reuters: Experts Say House-Passed 2009 Clean Energy Bill Would Have “Only A Modest Impact On Consumers.” According to Reuters: “A new U.S. government study on Tuesday adds to a growing list of experts concluding that climate legislation moving through Congress would have only a modest impact on consumers, adding around $100 to household costs in 2020. Under the climate legislation passed by the House of Representatives in June, electricity, heating oil and other bills for average families will rise $134 in 2020 and $339 in 2030, according to the Energy Information Administration, the country’s top energy forecaster. The EIA estimate was in line with earlier projections from the nonpartisan Congressional Budget Office which said average families would pay about $175 extra annually by 2020, and the Environmental Protection Agency, which said families would pay at most an extra $1 per day.” [Reuters8/5/09]

  • CBO Estimated Cost Of ACES In 2020 Would Be $175 Per Household Per Year. From the Congressional Budget Office: ‘”Although the analysis examines the effects of the bill as it would apply in 2020, those effects are described in the context of the current economy that is, the costs that would result if the policies set for 2020 were in effect in 2010. On that basis, CBO estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion or about $175 per household.” [, 6/20/09]
  • CBO: Energy Costs Would Actually Decrease For Low-Income Households. According to the Congressional Budget Office’s analysis of the American Clean Energy and Security Act, if the bill were implemented, “households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.” [, 6/19/09]

Study: Clean Energy Legislation Would Create Jobs, Boost GDP. According to an analysis by the University of California, Berkley: “Comprehensive clean energy and climate protection legislation, like the American Clean Energy and Security Act (ACES) that was passed by the House of Representatives in June, would strengthen the U.S. economy by establishing pollution limits and incentives that together will drive large-scale investments in clean energy and energy efficiency. These investments will result in stronger job growth, higher real household income, and increased economic output than the U.S. would experience without the bill. New analysis by the University of California shows conclusively that climate policy will strengthen the U.S. economy as a whole. Full adoption of the ACES package of pollution reduction and energy efficiency measures would create between 918,000 and 1.9 million new jobs, increase annual household income by $487-$1,175 per year, and boost GDP by $39 billion-$111 billion. These economic gains are over and above the growth the U.S. would see in the absence of such a bill.” [University of California, Berkeley, accessed 5/14/12]

[NARRATOR:] Bob Kerrey’s record: [KERREY CLIP:] “I rise today to express my opposition to S.J.R. 41, the balanced budget amendment.” [NARRATOR:] He was wrong then, and now our debt’s more than tripled. [KERREY CLIP:] “It isn’t just because I live in Greenwich Village now. The longer I’ve been here the further to the left I get on health care.” [NARRATOR:] Kerrey’s for Obamacare, and he lobbied for Obama’s job-killing energy tax, urging senators to say: [KERREY CLIP:] “Damn the consequences, I’m going to vote yes.” [NARRATOR:] Liberal Bob Kerrey is out of touch. American Crossroads is responsible for the content of this advertising. [American Crossroads via, 10/31/12]