U.S. Chamber of Commerce: “IL-13: David Gill”

The U.S Chamber of Commerce attacks David Gill over taxes and health care, using graphics and audio to suggest that the Illinois congressional candidate’s positions would cause the American economy to flat-line. But they repeat the distortion that the Affordable Care Act cuts Medicare, and mischievously cite their own, ill-conceived study as proof that ending the Bush tax cuts for the wealthy will kill job growth. And leaving aside the fact that the Chamber-commissioned study fail to analyze actual Democratic proposals, the failure of those tax cuts is plain to see in economic data on the past decade.

Affordable Care Act Savings Do Not ‘Cut’ Medicare Benefits

Affordable Care Act Reduces Future Medicare Spending, But “Does Not Cut That Money From The Program.” According to PolitiFact: “The legislation aims to slow projected spending on Medicare by more than $500 billion over a 10-year period, but it does not cut that money from the program. Medicare spending will increase over that time frame.”  [PolitiFact.com, 6/28/12]

  • CBO’s July Estimate Updates Medicare Cost Savings To $716 Billion. According to the Congressional Budget Office’s analysis of a bill to repeal the Affordable Care Act, repeal would have the following effects on Medicare spending: “Spending for Medicare would increase by an estimated $716 billion over that 2013–2022 period. Federal spending for Medicaid and CHIP would  increase by about $25 billion from repealing the noncoverage provisions of the ACA, and direct spending for other programs would decrease by about $30 billion, CBO estimates. Within Medicare, net increases in spending for the services covered by Part A (Hospital Insurance) and Part B (Medical Insurance) would total $517 billion and $247 billion, respectively. Those increases would be partially offset by a $48 billion reduction in net spending for Part D.” [CBO.gov, 8/13/12]

GOP Plan Kept Most Of The Savings In The Affordable Care Act. According to the Washington Post’s Glenn Kessler: “First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as ‘the baseline’) and the changes the law makes to reduce spending. […] The savings actually are wrung from health-care providers, not Medicare beneficiaries. These spending reductions presumably would be a good thing, since virtually everyone agrees that Medicare spending is out of control. In the House Republican budget, lawmakers repealed the Obama health care law but retained all but $10 billion of the nearly  $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers.” [WashingtonPost.com, 6/15/11, emphasis added]

Health Insurers Poured Money Into Chamber To Attack Reform

Health Insurance Industry Gave Chamber Over $100 Million To Fight Health Care Reform. From the National Journal: “The nation’s leading health insurance industry group gave more than $100 million to help fuel the U.S. Chamber of Commerce’s 2009 and 2010 efforts to defeat President Obama’s signature health care reform law, National Journal’s Influence Alley has learned. During the final push to kill the bill before its March 2010 passage, America’s Health Insurance Plans gave the chamber $16.2 million. With the $86.2 million the insurers funneled to the business lobbying powerhouse in 2009, AHIP sent the chamber a total of $102.4 million during the health care reform debate, a number that has not been reported before now. The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform.” [NationalJournal.com, 6/13/12]

Gill Isn’t Proposing To Tax “Job Creators,” He Opposes Failed Bush Tax Cuts For The Wealthiest

The Chamber ad cites Gill’s opposition to the Bush tax cuts for the wealthy in two Pantagraph articles, from 2004 and 2010, to support its claim that his “agenda raises taxes on job creators.” Read our full research doc for more on conservative rhetoric about “job creators.”

CRS: Allowing Tax Cuts For The Rich To Expire Will Reduce Deficits “Without Stifling The Economic Recovery.” According to Reuters: “Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. […] Republicans want the cuts continued for all income groups while Democrats favor letting them expire for the most affluent Americans. ‘If the economy is still weak, a temporary extension (of all the rates) will not harm the economy,’ despite adding to the deficit, the CRS report said, citing CRS economist Thomas Hungerford. But allowing the rates to rise just for the wealthy could help ‘reduce budget deficits in the short term without stifling the economic recovery.’” [Reuters, 7/19/12]

Those In The Top Bracket Still Benefit From Middle-Income Tax Cuts. According to the Center on Budget and Policy Priorities:

Furthermore, as Figure 2 shows, under the proposal to allow tax cuts on income above $250,000 ($200,000 for single filers) to expire, taxpayers in the top two brackets would still keep sizeable tax cuts on the first $250,000 of their income ($200,000 for single filers).

cbpp-marginal26

[Center on Budget and Policy Priorities, 7/19/12]

Bloomberg: “Give The Wealthiest Americans A Tax Cut And History Suggests They Will Save The Money Rather Than Spend It.” As reported by Bloomberg: “Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it. Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell. The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy.” [Bloomberg, 9/14/10]

Chamber Ad Misleadingly Cites Bloomberg Report On Chamber-Commissioned Study 

The Chamber’s ad cites a Bloomberg article from July 17, 2012, to support its claim that Gill’s tax agenda would hurt employment.

Bloomberg Article Titled “U.S. To Lose 710,000 Jobs From Tax Rise, Chamber Says” Based On Ernst & Young Study Commissioned By Chamber & Other Business Groups. From the July 2012 Bloomberg article with that headline: “The U.S. would lose 710,000 jobs and economic output would decline by 1.3 percent, or $200 billion, if tax cuts for high earners are allowed to lapse, said a report prepared for the U.S. Chamber of Commerce and other supporters of the tax breaks. The study by Ernst & Young LLP supports Republican efforts to extend all of the George W. Bush-era tax cuts set to expire at the end of the year. President Barack Obama called on Congress last week to pass a one-year extension of tax cuts for married couples making less than $250,000 a year while letting rates rise for higher earners. […] In addition to the Chamber of Commerce, the largest U.S. business lobby, the report was issued on behalf of the Independent Community Bankers of America, the National Federation of Independent Business and the S Corporation (SCI) Association.” [Bloomberg, 7/17/12]

Ernst & Young Study Didn’t Address President’s Proposals. According to economist Jared Bernstein: “First off, E&Y quite conspicuously fail to simulate what it is the President is proposing, so their main findings shouldn’t be considered in evaluating his proposals.  Second, when they get a little closer to what he is proposing, they find it adds jobs.” [JaredBernsteinBlog.com, 8/14/12]

Ernst & Young Study Assumes Revenue From Ending Tax Cuts Will Pay For More Spending, But Obama Proposed To Use It For Deficit Reduction. From an analysis by the National Economic Council’s Jason Furman via the White House: “The President has proposed to let the high-income tax cuts expire and use the resulting $1 trillion in savings (over 10 years) as part of a balanced plan to reduce deficits and debt and put the nation on a sustainable fiscal course that includes $2.50 of spending cuts for every $1.00 of revenue.  But rather than modeling the President’s proposal to reduce the deficit, the headline numbers in the study explicitly assume that the revenue would be used entirely to finance additional spending.  In fact, the study explicitly states, ‘Using the additional revenue to reduce the deficit is not modeled.’” [WhiteHouse.gov, 7/17/12, underlining original]

When The Study Models Ending Top-Tier Tax Cuts While Giving Middle Class Cuts, It Projects An Employment Increase. According to economist Jared Bernstein: “But for all of that, they actually find that when they model something that’s closer to what the President is proposing — getting rid of the Bush tax cuts for high-income families, while providing additional tax  cuts to the middle-class — employment grows by 0.4%, or almost 600,000 jobs. When they simulate the wrong scenario of new tax revenues used to support higher spending (column 1, table 2), they estimate that employment would fall by 0.5%.  But if the revenue was used to finance across-the-board tax cuts, employment grows.” [JaredBernsteinBlog.com, 8/14/12] 

Bush Tax Cuts Failed: Historically Slow Growth, First-Ever Decrease In Median Household Wealth

NYT: Even Prior To 2007 “Great Recession,” Period Following Bush Tax Cuts Had “Slowest Average Annual Growth Since World War II.” From David Leonhardt of the New York Times:

Why should we believe that extending the Bush tax cuts will provide a big lift to growth? Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7. […]

nyt-growth3

[New York Times, 11/18/10]

Median Household Income Fell For The First Time On Record Following The Bush Tax Cuts.  From the Center for American Progress: “Looking at median household incomes is even more telling than median wage growth because it gives a better sense of a family’s total resources. Whereas a high median wage might be offset by fewer hours worked, median income is an overall measure of income. The Bush economic cycle saw the first decline in median household incomes of any cycle since 1967, when the Census Bureau began tracking household data (see Chart 5).

caphouseholdincomebtc

[Center for American Progress, February 2009]

[Darlene Miller:] “Well I want to hire more people, but we don’t know what our tax rates are gonna be. We don’t know what our health care is gonna be, or our energy costs. When you go in that voting booth, you need to know who you’re voting for.” [Narrator:] David Gill supports the health care law that cuts Medicare by $716 billion. [Audio: EKG Beeping] The same law that burdens small businesses with higher costs and fees. David Gills agenda raises taxes on job creators. Gill’s wrong for Illinois. [Audio: EKG flat-lining] The U.S. Chamber is responsible for the content of this advertising. [U.S. Chamber of Commerce via YouTube, 9/28/12]