Republican debate: Live fact-checking the candidates

October 11, 2011

We are live fact-checking the Washington Post/Bloomberg debate.

The Topic: The Economy/Jobs

The Claim: Newt Gingrich, former speaker of the House, said Federal Reserve Chairman Ben S. Bernanke has “in secret spent hundreds of billions of dollars’’ on bailouts of financial institutions and that nobody in the news media has demanded transparency from the central bank

The Background: The Fed stretched its emergency powers during the financial panic of 2008 to rescue Bear Stearns Cos. and American International Group Inc. It also created unprecedented lending tools to provide funds to banks, mutual funds and large corporations.

The Facts: The Fed made loans -- it didn’t spend any money, and has said it has incurred no losses. While the central bank kept much of the information on the identity of borrowers confidential at the time, the Dodd-Frank Act and lawsuits by Bloomberg News and Fox News resulted in disclosure of the recipients in late 2010 and early 2011.

The Topic: Health Care

The Claim: Michele Bachmann said that “nine years from now the

Medicare hospital Part B trust fund is going to be dead flat broke.’’

The Background: Medicare Part A pays for inpatient hospital services. Medicare Part B pays for outpatient services such as doctor visits.

The Facts: The hospital trust fund is Part A, not Part B. Part A is estimated to be exhausted in 2024, not in nine years, accor ding to the Medicare trustees’ annual report released this year.

Under one set of estimates by the trustees, the Part A trust fund’s expenditures begin to exceed income in nine years, but will not be “broke.’’ In the report, the trustees said the Part B trust fund is “adequately financed over the next 10 years and beyond.’’

Link to report: https://www.cms.gov/ReportsTrustFunds/downlo s/tr2011.pdf

The Topic: The Economy/Jobs

The Claim: Rep. Michele Bachmann of Minnesota, blamed federal government ousing policies like the Community Reinvestment Act and the implicit backing f mortgage firms Fannie Mae and Freddie Mac for the 2008 financial crisis. S lso noted that the Dodd-Frank Act ``institutionalized all of these problems hat were put into effect by federal government.’’

The Background: In 2008 the U.S. financial system was on the brink of failure in the wake of he subprime mortgage crisis. A $700 billion bank bailout was required and awmakers, economists, academics and federal regulators spent much of the nex hree years attempting to identify the causes of the crisis, which accelerate

The Facts: While Fannie Mae and Freddie Mac, which were seized in 2008 by the federal government, played a large role in the mortgage crisis due to the volume of loans they purchased that went sour, the nine of 10 commissioners on the Financial Crisis Inquiry Commission agreed that the two mortgage firms were not the cause of the crisis. The majority FCIC report, signed by six Democratic appointees, blamed banks and federal regulators for the crisis. A dissent by three Republican members blamed the crisis on ten factors, with the inflation of the credit bubble by the Federal Reserve serving as the leading catalyst. Fannie and Freddie were not a primary cause, the three Republicans said.

Research published by the Federal Reserve Banks of San Francisco and Richmond noted that the Community Reinvestment Act, a 1977 law aimed at increasing mortgage loans to lower-income Americans, had little to do with fueling the subprime mortgage crisis.

The Dodd-Frank Act, enacted by President Barack Obama in 2010, did nothing to institutionalize a government guarantee in the mortgage market. The law largely ignored the mortgage giants.

The topic: Health Care

The Claim: Michele Bachmann said Obama’s health-care law will be run by a board of 15 political appointees who will “make all the major health-care decisions for over 300 million Americans.”

The Background: Bachmann was referring to the ``independent payment advisory board,” a panel of 15 health-care authorities established by the 2010 health-care law to help curb Medicare spending. Beginning in 2015 the panel will begin proposing cuts to Medicare if yearly spending exceeds targets set by the law. Congress could overrule the panel only with a supermajority in the Senate or if it comes up with an alternate plan that saves an equivalent amount.

The Facts: The board only has authority over Medicare, in which about 48 million elderly and disabled Americans are now enrolled, not the 300 million Bachmann mentioned. The law doesn’t grant the panel power to make health-care decisions and prohibits the group from cutting benefits, changing eligibility rules or increasing beneficiaries’ premiums or cost-sharing. Instead, the board’s main tool for cutting spending will be reducing payments to providers.

Link to the law: http://docs.house.gov/energycommerce/ppacacon.pdf

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