FACT CHECK: Crossroads ad targets Dems for budget woes

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Karl Rove was instrumental in helping Republican groups raise millions in unlimited contributions last year. Democrats are scrambling to counter. In this photo, Rove speaks to the Virginia Chamber of Commerce last December.

Steve Helber/The Associated Press

The conservative group Crossroads GPS has launched a $7 million ad campaign targeting President Obama, five Democratic senators and 10 representatives. A lot of the content in the ads is opinion on government spending, the budget and economic worries. FactCheck.org found a few misleading bits:

  • The Senate ads criticize lawmakers for "billions in new taxes." But that ignores the many tax cuts they supported, including $326.4 billion in net tax savings in the 2009 stimulus legislation and $857.8 billion in last year's tax deal that extended the Bush tax cuts and reduced payroll taxes.
  • The Senate ads also refer to "the failed stimulus," while the national ad attacking Obama says that the president promised the "stimulus would create more jobs" but "more people are out of work." It's true unemployment is higher today than when the stimulus law was passed, but the nonpartisan Congressional Budget Office says the rate would be higher yet if not for the stimulus, which did create jobs.
  • That national TV spot features a woman saying that "mom's Medicare will be cut." But the implication that the health care law takes away Medicare benefits is misleading. Extra benefits under Medicare Advantage plans are likely to be reduced, but the law actually expands traditional Medicare benefits, such as adding more prescription drug coverage.

Analysis

This round of ads is part of Crossroads GPS' $20 million campaign on what it calls "runaway government spending and debt." The group is a 501(c)(4) nonprofit and a spinoff of American Crossroads, an organization formed with help from former President Bush adviser Karl Rove. Crossroads launched the first ad of what it says will be a two-month campaign in late June, a $5 million buy for a spot that criticized President Barack Obama. That ad was largely correct, but made the increase in unemployment during the president's term appear worse than it actually has been.

The new ads were launched by the group on July 8. Five of the spots attack Democratic Sens. Bill Nelson (Fla.), Claire McCaskill (Mo.), Jon Tester (Mont.), Ben Nelson (Neb.) and Sherrod Brown (Ohio), blaming them for "skyrocketing debt" and "reckless spending." Crossroads announced that it would also run 10 ads targeting House members, but they have not hit the airwaves yet. So far, the other ads are airing heavily. Kantar Media's Campaign Media Analysis Group counts 5,460 airings worth a little more than $3 million, as of July 14.

A few points in the Senate ads are misleading or require context.

What About the Tax Cuts?

The TV spots say the senators paid for "reckless spending" with "billions in new taxes." That's a reference to the health care law, according to Crossroads' spokesman, Jonathan Collegio. It's true that the health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation's calculations. Republicans tend to add in fees on individuals who don't obtain health insurance and businesses that don't provide it to bump that up to about $500 billion. Still, the ad gives a misleading view of the Democrats' record on taxes. They have voted for hundreds of billions more than that in tax cuts.

Plus, the nonpartisan Congressional Budget Office has estimated that overall the health care law would reduce the deficit, by $210 billion over the 2012-2021 period (see Table 1), saving the government money, not adding to the debt. By that measure, at the same time these senators were voting for "billions in new taxes," they were also voting for billions in deficit reduction. On screen, the ads also show the words "Healthcare Takeover: $1 Trillion." That's not the net effect of the law, and as we've said many times, the law doesn't enable the government to takeover health care. It expands Medicaid, but also greatly expands business for private insurance companies by requiring individuals to have coverage.

Back to those tax cuts: The Joint Committee on Taxation calculated $326.4 billion in tax savings in the stimulus law — the American Recovery and Reinvestment Act — passed in 2009 with the support of all five senators targeted by the Crossroads ads. Among the many tax cut provisions in the stimulus was the Making Work Pay tax credit worth $116 billion to workers earning less than $75,000 in adjusted gross income ($150,000 for couples). These five Democrats also voted in support of Obama's tax deal last December, which extended the Bush tax cuts and created a one-year payroll tax holiday that reduced workers' Social Security taxes by 2 percent. The Joint Committee on Taxation said the tax savings in that legislation totaled $857.8 billion over 10 years.

Some may argue that extending the Bush tax cuts shouldn't be counted as voting for or enacting a tax cut, since it's an extension of the status quo. We'll leave that debate to our readers. But we can say that of the $857.8 billion, the JCT said $363.5 billion was the cost of extending the 2001 and 2003 tax provisions. The rest of the cost included extending 2009 tax provisions ($44 billion), creating the payroll tax holiday ($111.7 billion), instituting relief for the Alternative Minimum Tax ($136.7 billion) and extending unemployment insurance ($56.5 billion).

That Job-Creating Stimulus

These ads also refer to the stimulus as "the failed stimulus." That's a matter of opinion. The stimulus did create jobs and lower the unemployment rate, despite what Crossroads also says in its national ad criticizing Obama.

Titled "Wake Up," that ad features a woman talking about how "sometimes it's hard to sleep" when worrying about "jobs, our home, how everything costs more, even mom's health care." She says she used to back Obama "because he spoke so beautifully," but "things have gone from bad to much worse." Her concerns about jobs and the future are certainly shared by many Americans, but the soliloquy offers a few misleading claims.

The ad, in both a one minute and 30 second format, is running on national cable outlets and local TV in Colorado, Iowa, North Carolina, New Mexico, Nevada and Virginia, according to a Crossroads GPS press release.

The woman in the ad says that Obama promised "spending hundreds of billions on a stimulus would create more jobs, but now all we've got is a lot more debt and more people out of work."

It's true that the unemployment rate is higher now (9.2 percent) than it was in February 2009 (8.2 percent), when the American Recovery and Reinvestment Act was signed into law. But the stimulus did create more jobs, according to the Congressional Budget Office. CBO has consistently said in its periodic reports that the unemployment rate would be even worse, if the stimulus hadn't existed. The stimulus "[i]ncreased the number of people employed by between 1.2 million and 3.3 million," CBO said in its latest analysis, released in May.

On screen, the ad shows the words "Obama: stimulus plan could create, save up to 4 million jobs," crediting CNN. But that was an early estimate by Obama for a more expensive bill; once a less-costly compromise emerged, he lowered the estimate to 3.5 million jobs. That's still short of the CBO's upper estimate, and as we've said before, it's a matter of opinion whether the stimulus did enough or whether it "failed," as the Crossroads congressional ads say. But the national ad is wrong to imply that the stimulus didn't create jobs, as Obama promised. It did.

Mom's Medicare

The woman in the national ad also says, "Instead of fixing health care, my mom's Medicare will be cut," which implies "mom" won't be getting as much Medicare as she used to, before the health care law. But the law actually says that guaranteed Medicare benefits won't be reduced (Sec. 3601 and 3602), and it even adds a few new benefits, such as free preventive care and increased prescription drug coverage.

We wondered if this fictional mom might be one of about 11 million seniors on Medicare Advantage plans from private insurance companies. If so, the extra benefits she might get from one of those plans — such as additional eyeglasses or a free gym membership — will likely go away. As it stands now, the government pays more to Medicare Advantage plans than it does for traditional Medicare, an average of 14 percent more per beneficiary. These private plans "were originally envisioned in the 1980s as a potential source of Medicare savings," according to a 2008 Government Accountability Office report, but "such plans have generally increased program spending." The health care law reduces extra payments to Medicare Advantage plans over time until they're in line with the traditional program. The law's changes will save about $136 billion over 10 years.

But when we asked Crossroads spokesman Collegio how this mom's benefits were going to be affected, he told us that the line in the ad was a reference to the fact that the law cuts Medicare spending by $500 billion over 10 years — therefore, "mom's Medicare will be cut." Even if viewers read nothing more into the claim than that, they should know that the law cuts the future growth of spending in Medicare over a decade, not the current budget. About 40 percent of those cuts come from reducing the future growth of payments to hospitals, and skilled nursing and home health organizations. Another 25 percent of the savings come from the changes to Medicare Advantage that we just described.

This likely won't be the last we see of heavy spending on advertising by Crossroads GPS or American Crossroads. The two groups spent $70 million in the 2010 elections, according to Political Director Carl Forti, and they say they're aiming for $120 million for 2012.

– By Lori Robertson