Tester’s Votes Were To Prop Up Economy And Avoid The Economic Catastrophe Of Failure To Raise Debt Ceiling

To support its claim that Tester “voted for $6 trillion in new debt,” the ad cites Vote #142 on June 4, 2008; Vote #186 on 7/26/08; Vote #64 on February 13, 2009; Vote #397 on December 24, 2009; Vote #14 on January 28, 2010; Vote #123 on August 2, 2011; Vote #105 on March 25, 2010; and the Washington Examiner on March 13, 2012.

Tester Voted To For A Bill To Prop Up The Housing Market

Vote #186 on July 26, 2008, was the Foreclosure Prevention Act of 2008.

Foreclosure Prevention Act Was Designed To Help People Avoid Losing Their Homes And Help Faltering Housing Market. From the Los Angeles Times: “Congress sent President Bush legislation Saturday designed to help homeowners avoid foreclosure, spur home buying and prop up struggling mortgage giants Fannie Mae and Freddie Mac. The president intends to sign the bill as soon as he receives it. It is the government’s most sweeping response yet to the nation’s housing crisis. […] The bill passed Saturday, the American Housing Rescue and Foreclosure Prevention Act, contains a key provision allowing the Federal Housing Administration to guarantee up to $300 billion in lower-cost mortgages — provided that lenders accept significant losses. The provision is expected to help at least 400,000 homeowners.” [Los Angeles Times, 7/27/08]

Foreclosure Prevention Act Also Bolstered Fannie And Freddie. From CNNMoney: “To help stabilize markets, which were shaken in the past few weeks by steep declines in the stock prices of Fannie Mae and Freddie Mac, Treasury Secretary Paulson asked Congress on July 13 to give the Treasury power to provide a liquidity and capital ‘backstop’ for the two companies. Fannie and Freddie guarantee the purchase and trade of mortgages and own or back $5.2 trillion in mortgages. The bill allows Treasury over the next 18 months to offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies if necessary.” [Money.CNN.com, 7/24/08, stock market tags removed]

Foreclosure Prevention Act Passed The House With Bipartisan Support And Was Signed Into Law By President Bush. The Foreclosure Prevention Act of 2008 passed 272-152, with 227 Democrats and 45 Republicans voting “aye.” President George W. Bush signed it into law. [H.R. 3221, Vote #519, 7/23/08; Money.CNN.com, 7/30/08]

Tester Voted For The Recovery Act, Which Created Jobs, Boosted GDP, And Cut Taxes

Vote #64 on February 13, 2009, was for H.R. 1, the Recovery Act.

Recovery Act “Succeeded In…Protecting The Economy During The Worst Of The Recession.” From the Center on Budget and Policy Priorities: “A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 200,000 and 1.5 million jobs in March. In other words, between 200,000 and 1.5 million people employed in March owed their jobs to the Recovery Act. […] ARRA succeeded in its primary goal of protecting the economy during the worst of the recession. The CBO report finds that ARRA’s impact on jobs peaked in the third quarter of 2010, when up to 3.6 million people owed their jobs to the Recovery Act. Since then, the Act’s job impact has gradually declined as the economy recovers and certain provisions expire.” [CBPP.org, 5/29/12]

At Its Peak, Recovery Act Was Responsible For Up To 3.6 Million Jobs. According to the nonpartisan Congressional Budget Office:

CBO estimates that ARRAs [sic] policies had the following effects in the third quarter of calendar year 2010:

• They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
• Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
• Increased the number of people employed by between 1.4 million and 3.6 million, and
• Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers). [CBO.gov, 11/24/10]

Recovery Act Included $288 Billion In Tax Cuts. From PolitiFact: “Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren’t so much spending as money the government won’t get — so it can stay in the economy.” [PolitiFact.com, 2/17/10]

Tester Voted To Raise The Debt Limit And Avoid Default

Vote #397 on December 24, 2009, was for H.R. 4314, a bill that raised the federal debt limit. Vote #14 on January 28, 2010, was on H.J. Res. 45, an increase in the debt ceiling. Vote #123 on August 2, 2011 was on the Budget Control Act of 2011.

H.R. 4314 Raised The Debt Limit Enough To Get Through Mid-February 2010. From CNNMoney: “The House on Wednesday narrowly passed a $290 billion increase to the amount of debt the Treasury is allowed to have. Currently, the debt ceiling is set at $12.104 trillion, and if the Senate passes the House-approved increase, it would rise to $12.394 trillion. The increase would cover Treasury’s borrowing needs through Feb. 11, 2010. That is a far cry from the $1.9 trillion increase that lawmakers last week said they wanted to pass. […] As of Tuesday, the amount of debt subject to the limit on Treasury’s books was $12.016 trillion. If the debt ceiling isn’t increased by the end of this year, the nation could default on its debt. That would unleash a chain of events that could devalue U.S. bonds and seriously harm the nation’s reputation with creditors around the world. In short, it’s not something lawmakers can afford to let happen.” [Money.CNN.com, 12/16/09]

H.J.Res. 45 Raised Debt Limit Enough To Get Through Early 2011. From the New York Times: “The Senate voted on Thursday to raise the nation’s debt limit to $14.3 trillion, a $1.9 trillion increase that would allow the government to keep borrowing to cover operations beyond the November election and into early next year. The measure, which is always politically unpopular but essential to avoid default, needed 60 votes to pass and got not a vote more, for a 60-to-39 tally. The House is expected to pass the measure next week.” [New York Times, 1/28/10]

The Federal Budget Control Act Was A Last-Minute Deal To Raise The Debt Ceiling That Also Created The Deficit Reduction Super Committee. From PolitiFact: “Last year, the United States government was reaching its legal debt limit, which meant Congress had to authorize a higher level for borrowing. Raising the debt limit (also called the debt ceiling) was in some ways symbolic: Congress has the power of the purse, and the decisions to spend the money had already been made. In prior administrations, Congress approved higher debt limits with some partisan sniping (including from then-Sen. Obama against President George W. Bush) but without too much fuss. But in the summer of 2011, House Republicans insisted that actual spending cuts go along with an increase to the debt limit. House Speaker John Boehner led negotiations with the Obama White House, and at first the two sides seemed to be moving toward a wide-ranging overhaul of the federal budget, referred to in the media as a ‘grand bargain.’ The closed-door negotiations fell apart, though. […] Republicans and Democrats came to a less ambitious agreement to raise the debt limit through the Budget Control Act of 2011. The law found approximately $1.2 trillion in budget cuts spread over 10 years. But it also directed Congress to find another $1.2 trillion through a Joint Select Committee on Deficit Reduction. This 12-member committee became known as ‘the super-committee.’” [PolitiFact.com, 9/21/12]

Failure To Raise The Debt Limit Could Have Had Severe Economic Consequences

Debt Ceiling Does Not Determine U.S.’ Debt Level; It Is “A Limit On The Ability Of The Federal Government To Pay Obligations Already Incurred.” According to the Government Accountability Office: “The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred. While debates surrounding the debt limit may raise awareness about the federal government’s current debt trajectory and may also provide Congress with an opportunity to debate the fiscal policy decisions driving that trajectory, the ability to have an immediate effect on debt levels is limited” [GAO.gov, 2/22/11]

Failure To Raise Debt Ceiling Could Have Resulted In Default Or Had Other Severe Economic Consequences. From CNNMoney: “A failure to raise the debt ceiling would likely send shockwaves through the underpinnings of the financial system — and possibly ripple out to individual investors and consumers. The federal government would be forced to prioritize its payments. It would risk defaulting on its financial obligations. And if that happens, credit rating agencies would downgrade U.S. debt.” [Money.CNN.com, 7/21/11]

Debt Limit Has Been Raised Over 90 Times Since 1940. From the Center on Budget and Policy Priorities: “Before World War I, Congress generally had to approve each separate issuance of federal debt. Since then, the limit has evolved into an overall dollar cap on the amount of debt the federal government can incur.  Since 1940, Congress has enacted 91 separate increases in the statutory debt limit, an average of one every nine months (though individual increases lasted anywhere from three days to eight years).” [CBPP.org, 7/21/11]

Affordable Care Act Reduces The Deficit

Vote #105 on March 25, 2010, was on H.R. 4872, the Health Care and Education Reconciliation Act, a companion to the Patient Protection and Affordable Care Act.

CBO: The Affordable Care Act Will Reduce Deficits By Over $200 Billion From 2012-2021. According to Congressional Budget Office Director Douglas Elmendorf’s testimony before the House on March 30, 2011: “CBO and JCT’s most recent comprehensive estimate of the budgetary impact of PPACA and the Reconciliation Act was in relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2 would repeal the health care provisions of those laws. CBO and JCT estimated that repealing PPACA and the health-related provisions of the Reconciliation Act would produce a net increase in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will produce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues.” [“CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010,” CBO.gov, 3/30/11]

$1.8 Trillion Is Outdated Estimate Of Cost Of Insurance Provisions – Not ACA’s Impact On The Deficit

March 2012: CBO Estimates ACA “Provisions Related To Insurance Coverage” Will Have “Gross Cost” Of $1.762 Trillion. According to a Congressional Budget Office report titled “Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act”: “This report also presents estimates through fiscal year 2022, because the baseline projection period now extends through that additional year. The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012–2022 period (see Table 2, following the text); that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources).” [CBO.gov, March 2012, emphasis added]

July 2012: CBO’s Updated Estimate For Gross Cost Of ACA Insurance Coverage Provisions Is $1.683 Trillion. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of $1,168 billion over the 2012–2022 period—compared with $1,252 billion projected in March 2012 for that 11-year period. That net cost reflects the following: Gross costs of $1,683 billion for Medicaid, CHIP, tax credits, and other subsidies for the purchase of health insurance through the newly established exchanges (and related costs), and tax credits for small employers. […] Those gross costs are offset in part by $515 billion in receipts from penalty payments, the new excise tax on high-premium insurance plans, and other budgetary effects (mostly increases in tax revenues stemming  from changes in employer-provided insurance coverage).” [CBO.gov, July 2012, internal citations removed]

• July 2012 Report Affirmed Projection That ACA Will Reduce Deficits. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT have not updated their estimate of the overall budgetary impact of the ACA; previously, they estimated that the law would, on net, reduce budget deficits.” [CBO.gov, July 2012]

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 Times, 1/8/09]

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.” [CBPP.org, 11/18/10; CBPP.org, 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:

[CBPP.org, 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]

• Tester’s Opponent Voted For The 2001 Bush Tax Cuts. Rep. Denny Rehberg voted “yea” on the Economic Growth and Tax Relief Reconciliation Act of 2001. [H.R. 1836, Vote #149, 5/26/01]
• Tester’s Opponent Voted For The 2003 Bush Tax Cuts. Rep. Denny Rehberg voted “yea” on the Jobs and Growth Reconciliation Tax Act of 2003. [H.R. 2, Vote #225, 5/23/03]