“I need Medicare to get by. But Senator Collins voted for tax bill that puts Social Security and Medicare in jeopardy, but gives large corporations a big tax break. And then I heard the same corporations gave her over $5 million.”
— “David” of North Yarmouth, Maine, in an ad sponsored by the dark money group “Maine Momentum,” Aug. 5, 2019
U.S. Sen. Susan Collins, R-Maine, who faces a tough re-election race, has come under attack from a dark money group, which does not need to disclose its donors. This ad follows a standard Democratic playbook of accusing the moderate Republican of jeopardizing programs for retirees in exchange for supporting a tax cut for big corporations. It ends with “David,” who says he’s a cancer survivor, urging viewers to tell Collins to “stop risking” Social Security and Medicare.
The Collins campaign has cried foul, saying she acted to protect Medicare during the tax debate. So what’s going on here?
We tried to contact people supposedly involved in this dark money group but did not get a response. But the ad includes citations for its claims, so we will rely on those.
First of all, there is no dispute that the 2017 tax bill signed into law by President Donald Trump, officially known as the Tax Cuts and Jobs Act, included a big corporate tax cut. More than one-third of the $1.5 trillion cut reduced taxes for business interests. There had been bipartisan support for reducing corporate tax rates, although not to the extent that the GOP-crafted bill did.
When “David” says Collins voted for a tax bill that puts Social Security and Medicare in jeopardy, the citation is the nonpartisan Tax Policy Center, with a date of Nov. 21, 2017. The Tax Policy Center is widely respected for its analysis of how Americans of various income levels benefit from tax bills. But this citation does not appear to refer to one of those reports.
Instead, the citation appears to refer a blog post on its website by Melissa Favreault of the Urban Institute, titled: “If You Care about Social Security and Medicare, You Should Care about these Tax Bills.”
Favreault faulted the tax bill for not being revenue-neutral, noting that “Social Security and Medicare already face funding challenges” and so benefits could be cut in the future, especially if the government runs short of revenue. “Adding to the nation’s debt while our population is aging rapidly is ill-advised and maybe dangerous,” she warned.
But the blog post makes clear: “Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.”
“This was an opinion piece, and not a formal report of the Tax Policy Center,” Favreault acknowledged. “It reflects my opinion, values, and priorities, and my perspective on the [tax bill], but it is not [the Tax Policy Center’s] view.”
She said she was making the case that a deficit-financed tax cut was shortsighted. “We need to think about future needs and keep our promises to workers who contributed to these programs,” she said in an interview. “In my view, engaging in deficit spending to prioritize [to a very large extent] the short-run needs of some of the most well-off members of society at a time when the economy was not in recession was a missed opportunity. The tax cuts did not pay for themselves, so implicitly we left ourselves with less fiscal space for Social Security and Medicare.”
The ad shortens this nuanced argument to placing the programs “in jeopardy.”
Since the bill’s passage, it’s become increasingly clear that the optimistic claims that it would pay for itself through increasing economic growth were wrong.
At the time of the vote, Collins did act to prevent an automatic 4 percent reduction in Medicare spending that would have taken place under Senate budget rules because the tax bill was deficit-financed. Her amendment passed by a vote of 91 to 8.
But that vote did not deal with the issue raised by Favreault. “While the point that Senator Collins sponsored the amendment is related, I do not think it affects my larger point,” she said. “That amendment addressed a short-run Medicare issue. My focus was on the long-run for these two programs.”
As for the donations from corporations, the ad cites the Center for Responsive Politics. Corporations cannot contribute directly to candidates, but do so via political action committees. Indeed, the center shows that Collins has received nearly $7.3 million in her career from business-associated PACs. But the contributions from individual company PACs are not that large. Blue Cross/Blue Shield tops the list with a total of $76,000, followed by General Dynamics ($45,000), Ernst & Young (almost $42,000), Deloitte LLP ($40,000) and FedEx Corp. ($47,500).
The Pinocchio test
This a cleverly crafted ad. It implies, but does not say directly, that corporate PAC campaign contributions swayed her vote. (There’s no evidence to support that claim.) It also cites an opinion article that makes the valid case that a deficit-financed tax cut could put pressure on programs such as Social Security and Medicare.
But the ad misidentifies that as a Tax Policy Center report — and the phrase “in jeopardy” is not found in it. Clearly, the reference is designed to negate Collins’ successful effort to block automatic cuts to Medicare.
But here’s the problem: Just because the tax bill is deficit-financed does not mean benefits in the specific safety-net programs mentioned in the ad would be cut to achieve balance. All things being equal, Congress just as easily could reduce spending on any other program. In fact, given the politics involved, Social Security and Medicare might be the last programs to be cut. Moreover, Collins affirmatively took a step to protect Medicare from budget cuts — a fact unacknowledged by the ad.
Finally, the ad misattributes and misquotes the source material to make its claim seem more authoritative than it is. It earns three of a maximum four Pinocchios.