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Poli­tiFact checks Cam­paign to Fix the Debt’s state­ment that‘if law­mak­ers fail to avert the fis­cal cliff, 18 per­cent of the fed­eral money that is sent to the states will be elim­i­nated.’

By Dave Umhoefer

The Cam­paign to Fix the Debt, a cor­po­rate­backed bi­par­ti­san group press­ing for fed­eral debt re­duc­tion, sounded alarms as Pres­i­dent Barack Obama and House Speaker John Boehner ne­go­ti­ated over taxes and spend­ing.

“Loom­ing Fis­cal Cliff Threat­ens to Push Wis­con­sin into Re­ces­sion,” the group de­clared in a Dec. 17 news re­lease from its Wis­con­sin chap­ter. Sim­i­lar re­leases by the group at­tracted me­dia at­ten­tion in Colorado, Michi­gan and Louisiana.

“The coun­try is bar­rel­ing in a dan­ger­ous di­rec­tion and it will take a shared com­pro­mise to get it on track,” the Wis­con­sin ver­sion of the re­lease said, at­tribut­ing the quote to former Wis­con­sin Gov. Tony Earl, co-chair of the Fix the Debt-Wis­con­sin steer­ing com­mit­tee.

The group laid out this claim to bol­ster its case:

“If law­mak­ers fail to avert the fis­cal cliff, 18 per­cent of the fed­eral money that is sent to the states will be elim­i­nated. Those cuts will re­duce fund­ing for im­por­tant lo­cal pro­grams in­clud­ing ed­u­ca­tion, hous­ing, and low-in­come ini­tia­tives.”

So, would the au­to­matic, across-the-board bud­get cuts man­dated to start in early Jan­uary 2013 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 re­ports 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. 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 Nov. 15 on the fis­cal cliff’s ef­fect on states. That report re­lied on fig­ures from the Fed­eral Funds In­for­ma­tion for States.

The report did use an 18 per­cent num­ber in re­gards 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 the en­tire pool com­posed 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 ac­tu­ally 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 also noted that the largest fed­eral grants, in­clud­ing Med­i­caid and ma­jor in­come sup­port pro­grams, are ex­empt from the au­to­matic cuts.

Our rul­ing: Fix the Debt is­sued a news re­lease claim­ing “if law­mak­ers fail to avert the fis­cal cliff, 18 per­cent of the fed­eral money that is sent to the states will be elim­i­nated.” That’s way off. A pool of funds that size would be cut, but per­haps by 7 per­cent, not wiped out en­tirely. We rate the group’s claim False.

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