Bipartisan Bank Bailout Helped Prevent Even Deeper Financial Collapse

Rescue Efforts Helped Avert “Great Depression 2.0.” From Bloomberg: “The U.S. response to the financial crisis probably prevented a depression, slowed a decline in gross domestic product and saved about 8.5 million jobs, economists Alan Blinder and Mark Zandi said. Policies including the government fiscal stimulus, bailouts of financial companies, bank stress tests and the Federal Reserve’s purchase of mortgage-backed securities to lower interest rates ‘probably averted what could have been called Great Depression 2.0,’ Blinder and Zandi said in a report dated yesterday. Without those measures, the U.S. would have deflation, they said.” [Bloomberg, 7/28/10]

On National Television, “President Bush Strongly Urged Lawmakers To Pass His Administration’s $700 Billion Bailout For The Financial Markets” In 2008. As reported by MarketWatch: “President Bush strongly urged lawmakers to pass his administration’s $700 billion bailout for the financial markets on Wednesday, spelling out dire risks to the U.S. economy if Congress doesn’t act quickly. ‘We’re in the midst of a serious financial crisis,’ Bush said in a nationally televised address. ‘Our entire economy is in danger,’ as a result of the credit crunch, he said, and inaction on the plan could result in a ‘long and painful recession.’” [MarketWatch.com, 9/24/08]

• Congress Passed The Bailout With Significant Bipartisan Support. According to the New York Times: “The Senate approved the bailout measure on Oct. 1, 2008, on a bipartisan vote of 74 to 25. The House initially rejected the proposal, but under prodding from the White House and leading members of both parties, House members ultimately voted 263 to 171 for the bill, with 91 Republicans joining 172 Democrats in backing it; 108 Republicans and 63 Democrats voted no.” [New York Times, 7/11/10]

Bailouts Have Not “Added Significantly To The Debt.” An analysis by FactCheck.org concludes “it’s not the case at all” that the bailouts “added significantly to the debt.” According to the Congressional Budget Office: “CBO estimates that the net cost to the federal government of the TARP’s transactions, including the cost of grants for mortgage programs that have not been made yet, will amount to $32 billion. CBO’s analysis reflects transactions completed, outstanding, and anticipated as of February 22, 2012. That cost stems largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding home foreclosures: CBO estimates a cost of $56 billion for providing those three types of assistance. But not all of the TARP’s transactions will end up costing the government money. The program’s other transactions with financial institutions will, taken together, yield a net gain to the federal government of about $25 billion, in CBO’s estimation.” [FactCheck.org, 6/15/12; Congressional Budget Office, 3/28/12]

“Failed” Recovery Act Created Millions Of Jobs, Boosted GDP, And Cut Taxes

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]

Affordable Care Act Is Not A “Government Takeover”

PolitiFact: “Takeover” Charge “Does Not Hold Up Under Examination.” According to PolitiFact: “[T]he law increases regulation. But it greatly relies on the private sector to provide health care. Hospitals will not be taken over by the government, doctors will not become federal employees. The act relies on private insurers to compete and provide health care coverage to an expanded customer base. Employer-based coverage through private companies continues. The ‘government takeover of health care’ is a potent political charge that does not hold up under examination.” [PolitiFact.com, 6/16/12]

Federal Government’s Share Of U.S. Health Spending Is Projected To Grow Very Slowly Under ACA. According to Kaiser Family Foundation president Drew Altman: “Measured by the government’s share of health care spending, there is no sign of a government takeover of the health care system.” The following chart, based on analysis by the Center on Medicare and Medicaid Services, shows the projected share of U.S. health spending by the states, the federal government, and the private sector in 2010 and 2020:

[KFF.org, 8/1/11]

Health Care Reform Will Reduce The Deficit

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]

• 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]

Rep. Donnelly’s Voting Record Is The 8th Most Independent In The Current Congress

Rep. Donnelly Votes Against His Party About One-Third Of The Time. According to the Washington Post’s U.S. Congress Votes Database, in the 112th Congress, Rep. Donnelly has voted with his own party 67 percent of the time, giving him the eighth most independent voting record in the House. [Washington Post’s U.S. Congress Votes Database, accessed 9/6/12]