In a speech at the National Press Club Thursday, Rep. Michele Bachmann focused on the national debt, the debt limit debate raging in Washington, D.C., and what she perceives as unwelcome government intrusion under President Obama’s administration.
PoliGraph reviewed three of her statements and found mixed verdicts.
President Obama’s debt limit increase “will be the largest debt increase in the history of the nation.”
Amidst ongoing negotiations over the debt ceiling, the new limit is a moving target. But generally, Obama wants to raise the $14.3 trillion debt cap by about $2.4 trillion – enough credit to keep the nation from having another vote on the issue before the 2012 elections.
A $2.4 trillion increase would be the largest in nominal and inflation adjusted dollars since1940, the year after Congress created a universal cap for all the nation’s debt (previously, there had been separate caps for different types of spending).
Bachmann gets this claim correct.
“If we allow President Obama to pass the proposed increase in the national debt, we will have – and catch your breath – almost doubled our national debt from the 2006 level when I was elected to Congress.”
At first blush, Bachmann’s claim is correct. On Dec. 31, 2006, the nation’s debt was roughly $8.67 trillion, according to the Treasury Department. If Obama gets the $2.4 trillion increase he’s seeking, the $14.3 trillion debit limit will rise to $16.7 trillion.
But Bachmann’s claim is misleading because it implies that it’s Obama’s spending habits that caused the financial mess; it’s more complicated than that.
It’s true that in 2009, Obama’s first year in office, the deficit was a whopping $1.4 trillion, according to the Congressional Budget Office (CBO) – about $960 billion more than the previous fiscal year. And in fiscal year 2010, the nation’s debt increased by about $1.7 trillion.
But the trend started under the Bush administration. In fiscal year 2009, the nation’s debt increased by about $1.9 trillion. About $245 billion of new spending inherited by Obama stemmed from the Troubled Asset Relief Program (TARP) and payments to Fannie Mae and Freddie Mac. And in Bush’s last year in office, revenue declined by $419 billion as the result of the economic downturn.
Our debt also stems from Bush’s tax cuts and the wars in Iraq and Afghanistan accounted for $500 billion of the deficit in 2009 and will account for $7 trillion in deficits through 2019, according to the Center for Budget and Policy Priorities.
Of course, Obama’s responsible, too. His stimulus bill added $200 billion to the 2009 deficit. And for fiscal year 2011, which ends on Sept. 30, CBO projects a $1.5 trillion deficit, in part due to the extension of the Bush tax cuts under Obama’s administration.
Bachmann leaves out details about the origin of our debt, so this claim is misleading.
“Twenty-five years ago or so, almost all student loans were private. Today, 100 percent of student loans are government.”
Bachmann’s staff didn’t provide background for this claim, but 25 years ago in 1986, federally guaranteed aid was available. According to the College Board, roughly $17.6 million of the $38 million in all education aid given out that year was in the form of government in loans.
In school year 2009-10, 44 percent of all school aid came from the federal government, with the rest coming from private loans, colleges and employers.
So, clearly, the federal government isn’t giving out all education loans these days; students can easily get a private loan to subsidize their education. According to FinAid, a website that helps students navigate their loans more than $100 billion in federal loans and $10 billion in private student loans are given each year.
Her claim is false.
Minnesota Public Radio News, Midday: Rep. Michele Bachmann speaks at the National Press Club, July 28, 2011
Bloomberg News, Reid to Move on Defeating House Debt-Ceiling Plan Tonight, July 28, 2011
Politico, Reid plan’s savings trump Boehner’s, by David Rogers, July 27, 2011
The White House, Office of Management and Budget, Historical Table: Debt Limit Increases, accessed July 28, 2011
The Congressional Research Service, The Debt Limit: History and Recent Increases, April 29, 2008
The U.S. Treasury Department, The Debt to the Penny and Who Holds It, accessed July 28, 2011
The Washington Post, CBO projects U.S. budget deficit to reach $1.5 trillion in 2011, highest ever, by Lori Montgomery, Jan. 27, 2011
The Congressional Budget Office, Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public: 1971 to 2010, in Billions of Dollars, accessed July 28, 2011
The Congressional Budget Office, Monthly Budget Review, November 2009
The Cato Institute, Don’t Blame Obama for Bush’s 2009 Deficit, by Daniel J. Mitchell, Nov. 19, 2009
The New York Times, How the U.S. Got $14 Trillion in Debt and Who Are the Creditors, July 28, 2011
The Center for Budget and Policy Priorities, Economic Downturn and Bush Policies Continue to Drive Large Projected Deficits, May 10, 2011
The New America Foundation, Federal Student Loan Programs – History, accessed July 28, 2011
Education Sector, Drowning in Debt: The Emerging Student Loan Crisis, July 9, 2008
The College Board, Trends in Student Aid 2010
The College Board, Grants, Loans, and Tax Benefits per Full-Time Equivalent Student over Time, accessed July 29, 2011
Email exchange, Doug Sachtleben, spokesman, Rep. Michele Bachmann, July 28, 2011
Interview, Erin Dillon, Senior Policy Analysis, Education Sector, July 28, 2011