Fact checks: Obama and Biden statements

Fact checkers have checked the accuracy of Barack Obama's recent statements and ads and have come up with mixed results.
Fact checkers have checked the accuracy of Barack Obama’s recent statements and ads and have come up with mixed results.

In September, MinnPost reported the grades that fact checkers had given to Sen. John McCain and other Republican speakers at the party’s national convention in the Twin Cities.

Now it’s the Democrats’ turn. Sen. Barack Obama and his running mate, Sen. Joe Biden, have attacked McCain’s positions this month on Medicare, health coverage, taxes, education and other issues. Some of their accusations are true. Many are not. Here are the highlights:

John McCain’s “health care plan would cut Medicare by $800 billion. That means a 22% cut in benefits. Higher premiums and co-pays. More expensive prescription drugs. Nursing home care could suffer and so could your choice of doctor.” — Obama ad and repeated in recent stump speeches.

False, says FactCheck.Org.

Obama relied, in part, on analysis by the Center for American Progress Fund, which is headed by John Podesta, former chief of staff to President Bill Clinton. The logic in the analysis goes like this: McCain’s overall health plan would cost $1.3 billion over 10 years. He has pledged that it would be “budget neutral,” meaning that he would have to offset the costs with savings elsewhere. Medicare’s portion of the offset would come to $882 billion.

Further, a Wall Street Journal report, published Oct. 6, said that McCain did indeed plan to pay for his health care plan “in part” through reduced Medicare and Medicaid spending.

Still, it’s a leap to conclude that McCain would cut Medicare benefits.

The Journal’s source, McCain adviser Douglas Holtz-Eakin, stressed that the savings would come from improving programs and cracking down on fraud.

Speaking of benefits for seniors, he said, “It’s about giving them the benefit package that has been promised to them by law at lower cost.”

Obama proposes some of the same cost-saving measures as McCain, said the investigators at FactCheck, who are sponsored by the Annenberg Public Policy Center of the University of Pennsylvania.

There are good reasons to question whether McCain — and, for that matter, Obama —  can deliver the savings they have promised to achieve by reforming Medicare.

“But that’s no basis for Obama to accuse McCain of planning huge benefit cuts,” FactCheck concluded.

Health Care
Under John McCain’s health care plan, people get a $5,000 tax credit to buy a $12,000 health care policy, and “that’s a loss for you.” — Obama in an Oct. 15 debate in New York.

False, says Politifact.com.

Obama was referring to a McCain proposal to repeal the traditional tax exemption on employer-provided insurance in exchange for a tax credit that will encourage workers to seek their own insurance. The credit would be $2,500 per person, or $5,000 for couples.

About 71 percent of Americans who have health insurance get it through an employer, usually splitting the premiums so the employer pays at least half, , said PolitiFact, a project of the St. Petersburg Times and Congressional Quarterly.

While the employer share could be considered compensation, the government exempts it from taxation. Under McCain’s plan the exemption would disappear. In its place, people would get a tax credit to spend on the health insurance of their choice.

The average family plan costs $12,000. So if the employer picks up $8,000 of the cost, the “loss” under McCain’s plan would be the taxes the worker would have to pay on $8,000 — not the full $12,000.

“Obama’s numbers are wrong,” PolitiFact concluded.

“I want to cut taxes — cut taxes — for 95 percent of all workers.”  — Obama in recent speeches in St. Louis and elsewhere.

True, says PolitiFact.

Critics have noted correctly that Obama proposes to cut taxes for 81 percent of all tax filers — not 95 percent.

“But if you consider only people who work, that number goes up, because part of Obama’s plan is a tax credit to offset payroll taxes,” PolitiFact said. “If you look only at workers, or “working families,” as Obama likes to put it, “it turns out that 95 percent of workers receive a tax cut under Obama’s plans.”

But a Wall Street Journal opinion piece took issue with that conclusion. It argued that Obama’s number is inflated because a good portion of workers don’t pay taxes. McCain has echoed that argument.

“How do you cut income taxes for 95 percent of Americans, when more than 40 percent pay no income taxes right now? How do you reduce the number zero?” McCain asked during an appearance in Missouri Oct. 20.

McCain was close enough in saying that 40 percent of workers don’t pay taxes because they qualify for child credits, mortgage interest deductions and other breaks that cut their tax bills to zero. Experts at the non-partisan Tax Policy Center told PolitiFact that the actual percentage is 38.

So what happens to Obama’s claim if you accept the argument that he shouldn’t count the workers who don’t pay taxes?

He’s still close to accurate, PolitiFact calculated: Consider 100 typical workers. Thirty eight of them wouldn’t owe any taxes thanks to credits and deductions. Send them away and you have 62 left. Now, five of the 62 don’t qualify for Obama’s tax break because they earn too much money. Thus the cut goes to 57 of the 62 — or 92 percent — of the working taxpayers.

McCain’s tax cuts
John McCain “is proposing tax cuts that would give the average Fortune 500 CEO an additional $700,000 in tax cuts.” — Obama in a debate in Nashville Oct. 7.

Mostly true, says PolitiFact.

To come up with that number, the Obama campaign cites an average CEO salary of $12.8 million and a tax savings of 5.5 per cent for the top earners. That comes to $704,000.

The math is accurate, PolitiFact notes, but the numbers require explanation.

The $12.8 million comes from a Forbes magazine study of the average CEO compensation in 2007 for the 500 largest companies. The 5.5 percent tax savings comes from the Tax Policy Center, which estimated tax impact for income brackets under the McCain plan, PolitiFact said.

PolitiFact adds “mostly” to its true label because Obama ignored some nuances. For example, the cuts likely would be phased in, bringing the break for the average CEO well under $700,000 for at least a few years.

“Still, Obama is using credible numbers from independent sources to make his point,” PolitiFact said. “It does seem that high earners do better under John McCain’s plan.”

Taxes again
Sen. McCain’s tax plan provides “virtually nothing to the middle class.” — Biden in a debate in St. Louis Oct. 2.

Barely true, says PolitiFact.

Although independent analysts conclude that McCain’s plan would benefit wealthy Americans for the most part, middle class taxpayers would see some tax reduction,  PolitiFact said.

A prime example is a proposed increase to the exemption taxpayers may claim for each dependent — currently $3,500 —  by $500 each year beginning in 2010 until it would reach $7,000 in 2016, after which it would be indexed for inflation.  Married couples that file a joint return reporting adjusted gross income of $50,000 or less would be eligible for the $7,000 exemption immediately.

PolitiFact estimated that McCain’s proposals collectively would reduce the tax exposure of 60 percent of all American households. Fewer than half of those making between $18,981 and $37,595 would benefit. But the middle 20 percent of taxpayers —  people making between $37,595 and $66,354 — would see their tax bill go down by $325 in 2009 under McCain’s plan, on average, compared with $1,118 under Obama’s plan.

The statement earned a dubious “barely true” because the analysis does support the implication that McCain gives the largest benefit to higher-income taxpayers.

“The centerpiece of Senator McCain’s education policy is to increase the voucher program in D.C. by 2,000 slots.” — Obama in Oct. 15 debate in New York.

False, says PolitiFact.

Obama was referring to the four-year-old D.C. Opportunity Scholarship Program, under which 1,903 children from low-income families have received up to $7,500 a year for tuition to private schools. Republicans in Congress created the program in 2004.

It’s true that McCain proposes to expand the program. But he lists a dozen other items under his education policy.

For example, McCain calls for improving the quality of teachers. He would devote 5 percent of certain federal funds (Title II funds) to recruit teachers who graduated in the top quarter of their class, set aside 60 percent of those funds as bonuses for high-performing teachers, and use 35 percent of the funds for teacher development.

“There’s no indication that plan is the ‘centerpiece’ of McCain’s education policy,” PolitiFact said

Economic crisis
“John McCain said…in December he was surprised there was a subprime mortgage problem.” — Biden in St. Louis on Oct. 2.

Mostly true, says PolitiFact.

McCain was asked the “surprise” question in an interview with the editorial board of the Keene Sentinel newspaper in New Hampshire in November of  2007.

“Yeah. And I was surprised at the dot-com collapse, and I was surprised at other times in our history — I don’t know if ‘surprised’ is the word, but –,” McCain responded.

The exchange went on:  

Question: “S&L’s?”

McCain: “Yeah the S&L –”

Question: “Is this bigger than that?”

McCain: “You know, I don’t know the dimensions of this. It’s hard to know what the dimensions of it are. As I say, I never thought I’d pick up the paper and see a city in Norway somehow dramatically impacted by it. When I say ‘surprised,’ uh, I’m not surprised when in capitalist systems that there’s greed and excess. I think it was Teddy Roosevelt who said unfettered capitalism leads to corruption or something like that…”

In conclusion, McCain said, “I’d like to tell you I did anticipate it, but I have to give you straight talk, I did not.”

The “mostly” tag came with the assessment of Biden’s statement because McCain did say he didn’t know if “surprise” was the right word.

Sharon Schmickle writes about national and foreign affairs and science. She can be reached at sschmickle [at] minnpost [dot] com.

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Comments (3)

  1. Submitted by Gerald Abrahamson on 10/23/2008 - 12:18 pm.

    Since we know how FEDERAL tax cuts work–the Feds cut funding to state and local govt–what we don’t have is the analysis showing how the federal tax CUTS will be offset by state local tax INCREASES. This would be to continue delivering same services to the public. Historically, state and local tax increases (due to federal tax cuts to state and local govt) are GREATER than the federal tax cuts. So, the total tax burden on everyone goes up.

  2. Submitted by Gail O'Hare on 10/23/2008 - 02:28 pm.

    I think the assumption that Fed tax cuts will raise state and local taxes is a leap. Bear in mind that Obama is raising taxes on incomes over $250K. Some excellent tables of examples exist that demonstrate exactly how the two proposals look side-by-side. http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html

    But I’m very disturbed by Fact.Check’s harsh assessment of Obama’s ad on McCain’s social security plan. Read the whole thing and you’ll find they called someone to respond and then swallowed that person’s slanted answer hook, line and sinker.

    Anyone who has guided an elderly person through the jungle of Medicare policies, formularies, and approved treatments knows that it is already extremely difficult to get good care – not Cadillac care, just basic and responsive care. When my mother lived in assisted living, her portable oxygen was covered. Eventually I had to find a nursing home that accepted Medicare. Not only was oxygen no longer covered, but the home refused to have portable units in the rooms. We had to pay for huge immovable tanks, keeping my mother tethered to her bed. This was 13 years ago; God knows what it might be like now.

    Would you want your mother subjected to McCain’s vague cost savings? His spokesperson’s claim is dubious:

    //that any shortfall in McCain’s health care plan could be covered, without cutting benefits, by such measures as reducing “Medicare fraud and abuse,” employing “a new generation of treatment models” for expensive chronic diseases, speeding adoption of low-cost generic drugs, and expanding the use of information technology in medicine.//

    McCain insists his plan would not cut “promised benefits,” but that does not ensure equally effective benefits. If the benefit is pain relief, and the new treatment is Tylenol, the patient will experience a huge cut. The savings McCain has promised are pure fluff until we see real specifics.

  3. Submitted by Bernice Vetsch on 10/23/2008 - 03:55 pm.

    McCain’s health care plan has unpleasant surprises for those who fall for his plan to let insurance companies sell policies nationwide. This would negate the pesky (to insurers) mandates individual states have added over decades to insure that citizens within their borders are not told, for instance, that their policies do not include treatment for cancer (or diabetes or other expensive chronic or acute illness). “Golly,” the companies will say, “didn’t you read your policy?”

    Akin to this change is the McCain (and others) push toward low premium/high deductible insurance to attract younger, healthier customers and forcing older, sicker customers to pay for high premium/low deductible coverage. The young person who gets sick may have to suddenly come up with a $5,000 or so deductible. The older person may pay ever high premiums as the risk pool in that age group shrinks.

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