PolitiFact defines "bailout" (Updated)

On Dec. 1, 2015, PolitiFact handed down a "Mostly False" rating on Marco Rubio's claim he prevented a $2.5 billion bailout of health insurance companies under ObamaCare.

PolitiFact's ruling hinged partly on its definition of "bailout." PolitiFact said giving the insurance companies money to help keep them in business wasn't really a bailout:

But is it really a bailout?  Several experts told us no, stressing that a bailout usually refers to a program used to save a company after the fact, not a mechanism in place to deal with a problem that everyone assumes could occur.

Are these experts engaging in a "No True Scotsman" fallacy? Or did PolitiFact do it for them by torquing the paraphrase? Perhaps PolitiFact used leading interview questions?

We were curious about PolitiFact's history of defining the term "bailout."

April 21, 2010: PolitiFact

Early on, "bailout" might have meant anything to PolitiFact:

A big challenge in analyzing Reid's statement, or any like it, is figuring out what exactly the word "bailout" means.

"It is almost impossible to pin politicians down on this one because 'bailout' has no clear meaning," said Douglas Elliott, a fellow with the Brookings Institution, a public policy think tank. "It could cover a very wide range of things, some of which involve taxpayer money and some don't, and some of which are traditional central banking or deposit insurer roles and others of which are novel."

PolitiFact decided Dodd-Frank didn't prevent bailouts in this fact check, but the definition of "bailout" was not critical to the ruling.

Oct. 27, 2010: PolitiFact Florida

Any "rescue from financial distress" qualifies as a bailout to us. And last year, the National Association of Home Builders did indeed lobby Congress for — and win — a change in tax law that it argued was a "critical stimulus measure for the U.S. economy" that would provide "an infusion of monetary resources for firms struggling to retain workers and undertake economic activity."

The issue in this fact check from PolitiFact Florida was a chain email attack on parties opposing Florida's Amendment 4. Amendment 4 would have made real estate development far more difficult. It was a measure more likely supported by progressives, so PolitiFact Florida's broad definition tended to help progressives.

Oct. 29, 2010: PolitiFact Virginia

The Democratic Congressional Campaign Committee said a Republican was a hypocrite because his car dealership received bailout money from the "Cash for Clunkers" program. For PolitiFact Virginia, the definition of "bailout" wasn't even at issue. Apparently it's clear that "Cash for Clunkers" was a bailout program. The DCCC gets a "Half True" since PolitiFact Virginia couldn't pin down the amount received in the bailout:

But we can’t place a dollar amount on the benefit to Rigell. The ad wrongly suggests that his dealerships’ $441,000 in rebates were straight profits and there’s reason to believe Rigell’s actual gain from Clunkers was considerably smaller. So we find the claim to be Half True.

Dec. 18, 2011: PolitiFact Texas

Our sense? Taxpayers picked up built-up costs that otherwise could not be covered. It seems reasonable to call that expenditure a bailout.

The broad sense harmed Republican Rick Perry. The narrow sense would have helped him. PolitiFact Texas opted for the broad sense.

January 13, 2014: PunditFact

Conservative Pundit Charles Krauthammer foreshadowed the Rubio ruling by calling ObamaCare's risk corridor reimbursements a "huge government bailout." When asked, Krauthammer said he was using the broad definition and provided dictionary support. PunditFact decided his statement deserved treatment according to a narrower definition.

We asked Krauthammer why he called this a bailout and he said he relied on the definition from Merriam-Webster. "The act of saving or rescuing something (such as a business) from money problems," he quoted. "A rescue from financial distress."

Rescue is clearly the operative word. We looked at other definitions. The Palgrave Dictionary of Economics spoke of a rescue from "potential or actual insolvency." Investopedia had to prevent "the consequences that arise from a business's downfall."

Using the narrow definition of "bailout" as a principal justification, PunditFact rated Krauthammer's claim "Half True."

June 30, 2014: PolitiFact

If The New York Times says the Ex-Im Bank asked for a bailout in 1987 then it must be true. There's no reason to question the definition used by the Times, right? The definition was not a major issue for the fact check.

Was TARP a "Bailout" Program?

PolitiFact appears to consistently accept that the Troubled Asset Relief Program was a bailout program. But what if we applied the definition the experts suggested for the Rubio fact check?

TARP did not stop at helping out banks that were in trouble when the measure was passed. On the contrary, the measure foresaw banks running into trouble in the near future for the same reasons other banks had run into trouble.

The TARP timeline published by ProPublica makes clear the TARP program bears some key similarities to the ObamaCare features the experts would not call "bailouts."

PolitiFact Plays Games With Definitions

We've found cases where PolitiFact manipulated the definition of "bailout" resulting in unfair harm to conservatives. We found no cases where PolitiFact similarly harmed Democrats.

If anybody can find an example of the latter we missed, we'll be delighted to edit the article to include it. Drop us a line.


Update Dec. 10, 2015
We added the Jan. 13, 2014 PunditFact item, which we intended to include in the original version. Also fixed some stubborn formatting issues.