Wednesday, January 17, 2018
Politics

PolitiFact: States' portion of fiscal cliff cuts overstated

The statement

"If lawmakers fail to avert the fiscal cliff, 18 percent of the federal money that is sent to the states will be eliminated."

The Campaign to Fix the Debt, in a press release

The ruling

The Campaign to Fix the Debt, a corporate-backed bipartisan group pressing for federal debt reduction, sounded alarms as President Barack Obama and Republican House Speaker John Boehner negotiated over taxes and spending, including this claim that "if lawmakers fail to avert the fiscal cliff, 18 percent of the federal money that is sent to the states will be eliminated."

Eighteen percent — that's nearly 20 cents on every dollar.

Would the automatic, across-the-board budget cuts mandated to start in early January under the Budget Control Act of 2011 take that big a bite out of federal grants to states?

In a word: No.

Here's the background.

Fix the Debt is supported by CEOs of many major U.S. companies, and has a budget of more than $35 million raised primarily from the business world, according to stories in the Wall Street Journal, New York Times and Los Angeles Times. The group stresses that many ordinary citizens have joined the effort, which was co-founded nationally by former Republican U.S. Sen. Alan Simpson of Wyoming and Erskine Bowles, the former Clinton administration official. The pair co-chaired the Obama-created National Commission on Fiscal Responsibility and Reform. Fix the Debt has attracted a bipartisan roster of supporters from the ranks of elected officials and former officials.

The group referred in its news release to the Pew Center on the States, which issued a report on Nov. 15, "The Impact of the Fiscal Cliff on the States." That report relied on figures from the Federal Funds Information for States.

The report did use an 18 percent number in regard to federal grants to states for programs such as Title 1 education grants, special education, Head Start, nutrition for low-income women and children, and public housing.

But it was describing the pool of federal funds subject to some level of sequestration cuts.

Pew officials said they did not mean that the entire pool comprised of that 18 percent would be eliminated entirely, as Fix the Debt said.

In fact, Pew estimated that 7 percent of that pot of money would be eliminated, or perhaps slightly higher.

Not chump change, but a far cry from all of it.

Fix the Debt officials said they made an editing error in preparing the release, and became aware of it when we called. It will be fixed in future releases, they said.

We rate the group's claim False.

This ruling as been edited for print. For more, see PolitiFact.com.

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