Newt Gingrich repeatedly claimed that the IRS will need to hire 16,000 “agents” to act as “health police” because of the health care reform law. However, as FactCheck.org has noted, that claim is “wildly inaccurate” and “stems from a partisan analysis based on guesswork and false assumptions, and compounded by outright misrepresentation” ; moreover, the House GOP report that produced the figure noted that the number is likely overstated.
In separate appearances, Gingrich misleadingly claimed 16,000 IRS “agents” will be hired as “health police”
From the April 6 edition of Fox News' Fox & Friends:
GINGRICH: But my general experience is that, you know, you don't have people walk up to you in an airplane and start attacking you very often, or you're in really deep trouble. I think what [Sen.] Harry [Reid] ought to do is get in a car and drive around Nevada, where people are overwhelmingly opposed to hiring 16,000 IRS agents as health police.
From the April 6 edition of NBC's Today:
GINGRICH: First of all, this is a really bad bill. The more we learn about it, the worse it is. If you say to the average American, do you really want to have 16,000 more IRS agents as a brand-new health police? They're going to say no.
Wildly inaccurate" claim stems from GOP committee analysis, which itself found figure likely overstated
PolitiFact: "Ways and Means Republicans themselves acknowledge that the figure could be less than 16,500 new jobs." A March 29 PolitiFact.org article stated that the source of the 16,000-plus figure was a March 18 report by the Republicans on the House Ways and Means Committee. According to PolitiFact, the GOP determined the figure by using a Congressional Budget Office (CBO) analysis that concluded the IRS "'would probably' need to spend 'between $5 billion and $10 billion over 10 years'" for “implementing the eligibility determination, documentation, and verification processes for premium and cost-sharing credits” in the health care bill. But PolitiFact noted that “even as it offered the 16,500 figure, the Ways and Means Republicans' report offered caveats as well.” From PolitiFact:
But even as it offered the 16,500 figure, the Ways and Means Republicans' report offered caveats as well.
“Some might argue that figure over-estimates the number of employees that would be hired, because it includes only payroll and benefit costs and does not include other costs that would be incurred, including office overhead,” the report says. “However, note that the IRS total budget in fiscal year 2009 was $11.708 billion, meaning that, when all costs are included, IRS total spending averaged $126,474 per employee. Thus, critics of the 16,500 figure might argue that any new employees should be assumed to cost as much as the average member of the existing workforce and that the $1.5 billion per year would 'only' support hiring slightly more than 11,800 new IRS employees.”
In fact, in a footnote, the report said that “it is likely the number would lie somewhere in between the two sets of figures. There would be some additional overhead costs for the new employees, such as computers and telephone services. But there could also be fixed costs that are not as affected by additional workers (e.g., the agency may already have extra office space so does not need to rent additional square footage for each additional worker).”
Factoring overhead -- rather than just salaries and benefits -- into the equation would reduce the number from 16,500 new employees to 11,800. This isn't just an outside critique; this is something stated explicitly in the Ways and Means Republicans' own report.
FactCheck: “Wildly inaccurate” claim “stems from a partisan analysis based on guesswork and false assumptions, and compounded by outright misrepresentation.” In a March 30 article, FactCheck.org answered the question, “Will the IRS hire 16,500 new agents to enforce the health care law?” by stating, “No. The law requires the IRS mostly to hand out tax credits, not collect penalties. The claim of 16,500 new agents stems from a partisan analysis based on guesswork and false assumptions, and compounded by outright misrepresentation.” FactCheck further called the claim “wildly inaccurate.”
PolitiFact: GOP based its claim solely on "the high end of the CBO estimate." PolitiFact noted that “CBO estimated a cost burden of between $5 billion and $10 billion over 10 years. The Ways and Means Republicans' report made its calculations based only on the high end of that range. If it had used the $5 billion figure instead (or offered it side by side with the $10 billion figure) it would have worked out to 8,250 jobs.”
FactCheck: GOP figure based on incomplete CBO cost estimates. FactCheck reported that the GOP analysts “based their 16,500 figure on an assumption that the IRS budget 'could' require an additional $10 billion over the next 10 years as a result of the law, a figure they attribute to the Congressional Budget Office.” FactCheck quoted from CBO director Douglas Elmendorf's March 11 letter to congressional leaders in which he noted that “CBO has not completed an estimate of all of the discretionary costs that would be associated with H.R. 3590. ... [S]uch costs would probably include an estimated $5 billion to $10 billion over 10 years for administrative costs of the Internal Revenue Service (IRS).” FactCheck continued: “Note the words 'probably' and 'could.' And the figure -- based on preliminary analysis -- could as easily be $5 billion as the $10 billion number the GOP analysts used.”
FactCheck: GOP made “false assumptions” based on incomplete CBO estimates. In its March 30, article FactCheck wrote:
The GOP analysts then inflated their estimate by making a couple of false assumptions.
No desks? First, they assume that all the new “administrative” spending projected by CBO would go for payroll and benefits -- without any allowance for desks, computers, office rent, utilities, travel or other overhead costs necessary to run any government enterprise. The partisan analysts simply divided the spending (which they figured could be $1.5 billion per year once the law is fully effective) by the current average payroll cost for the entire IRS workforce.
No pay raises? The second false assumption is that there will be no inflation or pay raises over the next decade. They apply fiscal 2009 cost figures to budgets for 2014 through 2019. In fact, CBO currently projects that the Employment Cost Index will rise 1.4 percent next year and reach 3 percent per year in 2015 and thereafter. Even if the partisan analysis is valid, that would further reduce the maximum number that could be hired by another 1,000 in 2014, and by about 2,800 in 2019, by our calculations.
The GOP analysts assume that the $10 billion would not be spread evenly over the decade, but would reach $1.5 billion annually in later years. That's reasonable, given that major provisions of the new law don't take effect until 2014. But even accepting that, the peak figure could just as easily be $750 million a year, if the CBO's lower guess proves to be correct. So the number of new IRS workers implied by the GOP's own logic could be closer to 5,000 than to 16,500, after adjusting for overhead costs and inflation.
FactCheck explains “huge difference” between IRS “agents” and “workers who make up the bulk of IRS employees.” Gingrich repeatedly claimed that 16,000 IRS “agents” would need to be hired as a result of the health care reform law. But FactCheck noted that "[t]he GOP staff analysis projected only the number of new 'employees' " -- not agents -- and stated: "[T]here's a huge difference between an IRS revenue agent -- who calls on taxpayers and conducts face-to-face audits -- and the workers who make up the bulk of IRS employees. Those who work at the IRS include clerks, accountants, computer programmers, telephone help line workers and other support staff."
Gingrich claimed IRS “agents” would act as “health police” -- but “IRS' main job under the new law isn't to enforce penalties.” Contrary to Gingrich's claim that IRS “agents” would need to be hired to act as “health police,” FactCheck noted: “The IRS' main job under the new law isn't to enforce penalties. Its first task is to inform many small-business owners of a new tax credit that the new law grants them -- starting this year -- which will pay up to 35 percent of the employer's contribution toward their workers' health insurance. And in 2014 the IRS will also be administering additional subsidies -- in the form of refundable tax credits -- to help millions of low- and middle-income individuals buy health insurance.” FactCheck further stated: "[T]he bill signed into law (on page 131) specifically prohibits the IRS from using the liens and levies commonly used to collect money owed by delinquent taxpayers, and rules out any criminal penalties for individuals who refuse to pay the tax or those who don't obtain coverage. That doesn't leave a lot for IRS enforcers to do."