OBAMA: Tackling the deficit “means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit.”
THE FACTS: The idea that Obama’s health care law saves money for the government is based on some arguable assumptions.
To be sure, the nonpartisan Congressional Budget Office has estimated the law will slightly reduce red ink over 10 years. But the office’s analysis assumes that steep cuts in Medicare spending, as called for in the law, will actually take place. Others in the government have concluded it is unrealistic to expect such savings from Medicare.
OBAMA: “I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.”
THE FACTS: Republicans may be forgiven if this offer makes them feel like Charlie Brown running up to kick the football, only to have it pulled away, again.
Fact-checking the State of the Union - Chicago Sun-Times
another perspective:
Here’s the spin and the facts from the White House – and from Republicans – on the spending freeze in President Obama’s State of the Union address.
Spin: Obama is announcing a five-year freeze on a portion of government spending.
Fact: In fact it’s only partially new. He proposed a three-year freeze during last year’s State of the Union, and put it into place. So this extends last year’s proposal by two years.
“It is true that we already had a three-year freeze, so there were already significant savings in the budget. But we’ve extended that by two years,” Gene Sperling, a top economic adviser to Obama, said Tuesday afternoon.
Spin: The White House is selling the freeze, as Sperling put it, as “one of the deepest and toughest spending restraint budgets that has been seen by a president.”
Fact: They are freezing less than one half of one fourth of the budget. The current budget is $3.8 trillion, but for general purposes, consider the budget to be roughly $3.5 trillion each year over the last few years. Of that amount, about $2.5 trillion is mandatory spending, much of that being entitlement programs such as Medicare, Medicaid and Social Security. Of the $1 trillion that is left over in discretionary spending, only about $400 billion in annual spending fits into the category that Obama is freezing.
Another way to look at this is that the total budget is just under 24 percent of the economy, or gross domestic product, which is roughly $15 trillion. Obama is freezing a portion of the budget that is only two percent of GDP.
Obama does admit in his speech that he is freezing “a little more than 12% of our budget.”
“To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t,” he says, according to his prepared remarks.
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