VOL. 41 | NO. 17 | Friday, April 28, 2017
AP FACT CHECK: Are Trump's health-plan protections real?
WASHINGTON (AP) — President Donald Trump is promising that the latest Republican health care legislation will cover people with pre-existing conditions "beautifully." Such reassurance is not to be found in the bill that's been under review.
In a TV interview Sunday, an op-ed in The Washington Post and a rally Saturday night in Pennsylvania, Trump vigorously celebrated a 100-day stretch that actually produced little in the way of legislative achievement. His aides, meanwhile, began a hard sell on his tax plan over the past week.
Here's a look at some assertions by the presidents and his people:
TRUMP: "When I watch some of the news reports, which are so unfair, and they say we don't cover pre-existing conditions, we cover it beautifully.... Pre-existing conditions are in the bill. And I mandate it. I said, 'Has to be.'" — On CBS' "Face the Nation."
THE FACTS: Although the bill says "access" is guaranteed for people with pre-existing conditions, it is silent on a key point, whether such access must be affordable.
President Barack Obama's health law requires insurers to take all applicants, regardless of medical history, and patients with health problems pay the same standard premiums as healthy ones. But the Republican legislation would let states opt out of the requirement for standard premiums, under certain conditions. If a state maintains protections such as a high-risk pool, it can allow insurers to use health status as a factor in setting premiums for people who have had a break in coverage and are trying to get a new individual policy.
Such complications were in the proposed legislation under review last week, prompting the American Medical Association to say the Republican protections "may be illusory" and the American Cancer Society Cancer Action Network to worry that the plan could return the U.S. to a "patchwork system" that drives up insurance costs for the sick.
It's possible Trump will demand stronger protections for sick people in the bill, but he said on Sunday that the legislation was already so good "they could have voted on Friday."
TRUMP on the first attempt to repeal and replace Obama's law: "This bill has evolved. And we didn't have a failure on the bill. You know, it was reported like a failure."
THE FACTS: The first bill was pulled from Congress without a vote being taken, because it did not have enough support. The effort has evolved but the bill flopped.
TREASURY SECRETARY STEVE MNUCHIN, on Trump having "no intention" of releasing his own tax returns ever: "The president has released plenty of information and I think has given more financial disclosure than anybody else. I think the American population has plenty of information."
THE FACTS: Trump has released less than other presidents in modern times.
By withholding his tax returns, Trump has fallen short of the standard followed by presidents since Richard Nixon started the practice in 1969.
During last year's election campaign, Trump argued that he couldn't release his taxes because he was under an audit by the IRS. That reason didn't hold up, because being under audit is no legal bar to a candidate from releasing tax returns. On Wednesday, Mnuchin seemed to abandon even that explanation.
What Trump has released are financial disclosure forms that list his assets and liabilities in broad ranges, required by law. But those forms don't disclose precise numbers, and they include nothing about a person's income or charitable giving — data disclosed only in tax returns.
The few Trump tax returns the public has seen weren't released by him, but disclosed by news outlets. Two leaked pages of his 2005 return that came out in March didn't include full details on income and deductions, but did show that he would have benefited massively by an elimination of the alternative minimum tax — a feature of his just-outlined tax plan. And three pages that surfaced last year showed he had claimed a $916 million loss on his 1995 return, which could be used to reduce his taxes by offsetting later gains.
MNUCHIN: "This is going to be the biggest tax cut and the largest tax reform in the history of our country."
THE FACTS: Apparently not. At first blush, the tax cuts proposed last week look smaller than President Ronald Reagan's in 1981, which were the biggest ever. That plan reduced federal revenues by almost 19 percent, according to a Treasury report. In today's dollars, that would mean a tax cut of more than $600 billion a year or well over $6 trillion over the next decade.
An early analysis by the nonpartisan Committee for a Responsible Federal Budget estimates federal revenue would probably drop $5.5 trillion over a decade under the Trump plan, shy of Reagan's record-breaker. That assumes all elements of the plan are approved by Congress, which is unlikely.
The biggest-ever claim is also made on the one-page outline of the plan. Trump economic adviser Gary Cohn, more realistically, called it "one of the biggest."
MNUCHIN: The tax plan "will pay for itself with growth," reduced deductions and "closing loopholes."
THE FACTS: Tax experts are skeptical, and they're backed up by history.
Reagan's steep cut in 1981 contributed to years of deficits, even after he was forced to raise some taxes in subsequent years to stem the red ink. President George W. Bush's 2001 and 2003 tax cuts were also followed by large deficits.
"No tax cut has ever been self-financing," said Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center.
In its analysis of the Trump plan, the Committee for a Responsible Federal Budget said "no achievable amount of economic growth could finance it" and it would drive the debt to 111 percent of the gross domestic product by 2027, compared with 77 percent now. The group advocates for deficit reduction as a pillar of economic growth.
Alan Cole, an economist at the right-leaning Tax Foundation, has calculated that Trump's corporate tax cut alone would cut federal revenue by $2 trillion over 10 years. Growth would need to accelerate to 2.8 percent a year, from its current pace of about 2 percent, to pay just for that cut. But Cole forecasts growth would increase by only half that amount, resulting in ballooning deficits.
COHN: "We are going to cut taxes for businesses to make them competitive and we're going to cut taxes for the American people, especially low- and middle-income families."
THE FACTS: Based on the outline, there's every reason to believe the wealthiest people in the United States will receive the biggest cuts under Trump's plan, though many low- and middle-income families would benefit, too.
The lack of specifics makes it hard to say precisely how the cuts would be distributed. But the plan is similar in outline to Trump's campaign proposal, which would have given nearly half its benefits to the wealthiest 1 percent of Americans, while middle-income households would have received barely 7 percent of the cuts.
The White House is also proposing to eliminate the estate tax and alternative minimum tax, both of which primarily impact upper-income Americans. The AMT is a separate tax calculation intended to ensure that richer people don't avoid paying most or all of their taxes by claiming multiple deductions and credits. In 2005, Trump himself paid $36.5 million in taxes, mostly because of the AMT. Without it, he would have paid just $5.5 million, according to a leaked copy of that year's return.
The biggest windfall for rich people could come from Trump's plan to lower the top tax rate for small-business owners to 15 percent from 39.6 percent. The true effect will depend on how the Trump administration defines a small-business owner. If the tax cut applies to all business income reported on individual tax returns, it would be a huge benefit for many wealthy families.
Mnuchin said Trump will propose safeguards to prevent rich people from taking advantage of this tax cut, but provided no details on how that would work.
TRUMP: Pressing for South Korea to help pay for the billion-dollar THAAD anti-missile system the U.S. is providing for the country's defense, "It's phenomenal. It's the most incredible equipment you've ever seen — shoots missiles right out of the sky. And it protects them and I want to protect them. But they should pay for that, and they understand that." — Interview Thursday with Reuters.
THE FACTS: The president is clearly in sales mode here, because the Terminal High-Altitude Area Defense system isn't as sure a bet as he portrays. It is being deployed in South Korea after at least a dozen successful tests, but "things that work well at home on the test range don't always go as smoothly when deployed," said Jonathan McDowell, an astrophysicist at the Harvard-Smithsonian Center for Astrophysics.
A salvo of multiple North Korean short-range missiles, for instance, could overwhelm THAAD, said David Wright, co-director of the Union of Concerned Scientists' Global Security Program. And the system will be deployed about 125 miles (200 kilometers) south of Seoul, out of range of a greater metropolitan area that is home to 25 million people about an hour from the heavily armed border. "It cannot engage missiles fired at Seoul, so it offers no additional protection of the city," Wright said.
TRUMP tweet on the tactics of the two jurisdictions that challenged his order to penalize cities that don't cooperate with U.S. immigration officials: "They used to call this 'judge shopping!' Messy system."
THE FACTS: It's hard to argue this was judge-shopping. The two California governments that sued to block Trump's order, San Francisco and Santa Clara County, routinely filed in the court in their neighborhood, which is in the federal system's 9th Circuit. And they don't get to choose a judge; that's assigned through a system that more resembles a lottery.
TRUMP tweet: The 9th U.S. Circuit Court of Appeals, where three of his orders have run into roadblocks, has "a terrible record of being overturned (close to 80 percent)."
THE FACTS: That's misleading. The nature of the appeals system means that most circuits have high rates of being overturned. The fact the Supreme Court agrees to hear a case means it's likely to overturn it. But other circuits have seen their decisions overturned at a higher rate.
In the most recent full term, the Supreme Court did reverse eight of the 11 cases it heard from the San Francisco-based court. But the Atlanta-based 11th Circuit went 0 for 3 — that is, the Supreme Court reversed all three cases it heard from there. And over the past five years, five federal appeals courts were reversed at a higher rate than the 9th Circuit.
The 9th is by far the largest of the 13 federal courts of appeals, which means that in raw numbers, more cases are heard and reversed from the 9th Circuit year in and year out. But as a percentage of cases the Supreme Court hears, the liberal-leaning circuit fares somewhat better, according to statistical compilations by the legal website Scotusblog.
Associated Press writers Ricardo Alonso-Zaldivar, Christopher S. Rugaber, Josh Boak, Stephen Ohlemacher, Robert Burns and Mark Sherman in Washington and Foster Klug in Seoul, South Korea, contributed to this report.
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