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Both Campaigns Distorting Facts on Money Matters

By Michael Dobbs
Washington Post Staff Writer
Thursday, October 16, 2008

John McCain has asserted that his Democratic rival plans to raise taxes on anyone making more than $42,000 a year and will force all Americans into a "government-run" health-care system. Barack Obama has accused the GOP presidential candidate of planning "the largest middle-class tax increase in history" and gambling with the Social Security earnings of millions of American seniors.

All these allegations, a sampling of charges traded back and forth on the campaign trail and in the three presidential debates over the past few weeks, are false.

During the final presidential debate last night, both candidates made their share of factual errors and distorted their rivals' positions. Obama again was misleading in describing the effects of McCain's health-care proposal, while McCain again recycled the false assertion that Obama had voted to raise taxes on people making $42,000 a year.

Some of the sharpest back-and-forth over economic issues concerned the taxes that an Ohio plumber named Joe Wurzelbacher stands to pay under a possible Obama administration. McCain was correct in stating that Joe the Plumber will end up paying a higher marginal tax rate under the Obama plan if his small business makes more than $250,000 a year. But McCain was wrong to say that Obama is planning to fine Joe the Plumber and other small-business owners if they fail to provide health insurance for their employees.

As the U.S. economy has unraveled, both McCain and Obama have been stepping up their efforts to convince voters that disaster lies ahead if their opponent ends up in the White House. At the same time, economists say, both candidates have played down the sacrifices that will be necessary to put the nation back on a path to fiscal responsibility and balanced budgets.

While there is no evidence that today's candidates are any more untruthful than their predecessors, the explosion of media outlets and the rise of the Internet have made it difficult for fact-checkers to keep track of the fibs peddled by the rival political camps. Exaggerations, misstatements and outright falsehoods crop up daily in a cascade of campaign spin, from major speeches to political blogs to video releases targeted at specific markets.

"It's like drinking from a fire hose," said Brooks Jackson, director of the Web site FactCheck.org, who has been truth-squadding presidential campaigns since 1991.

Many of the misleading attacks reflect standard partisan positions, Jackson said, with Republicans attacking Democrats for an alleged propensity to raise taxes and with Democrats criticizing Republicans for ignoring more vulnerable Americans. He noted that McCain had "systematically misrepresented Obama's tax proposals over a long period of time," prompting Obama to turn around and do "the same thing" with the McCain health-care plan.

"The big McCain deception about Obama is that he will tax everybody," said Kathleen Hall Jamieson, a professor of communication at the University of Pennsylvania. "But there is nothing in the Obama plan that can reasonably be described as higher taxes on people who make less than $250,000 a year."

McCain and his surrogates have repeatedly accused the senator from Illinois of voting to raise taxes on people making $42,000 a year, and suggested that this is a key part of the Democrat's campaign platform. The charge stems from the Democrat's vote in favor of nonbinding resolutions that assume, for budgeting purposes, that the Bush tax cuts will expire in 2011, as scheduled. Obama has promised to extend the Bush tax cuts for all but the highest-income groups.

Similarly, there is little to support McCain's charge that Obama would "force families into a government-run health-care system where a bureaucrat stands between you and your doctor." The Obama plan bears little resemblance to the socialized national health systems in Britain and some other European countries and is based instead on expanding the current U.S. system of privately backed health insurance.

The Obama campaign, meanwhile, has repeatedly mischaracterized the McCain health-care plan as "the largest middle-class tax increase in history," in the phrase of a recent Obama television ad. While it is true that McCain wants to tax employer-provided health insurance for the first time, he is also promising a tax credit of between $2,500 and $5,000 to encourage Americans to buy their own health insurance. According to the nonpartisan Tax Policy Center, the tax credit will more than offset the higher tax for most Americans over the next decade.

As the Wall Street meltdown accelerated last month, Obama told Florida retirees that their Social Security earnings would have been "tied up" in the falling stock market "if my opponent had his way." While McCain has expressed support for a Bush administration plan to allow some Americans to establish "private retirement accounts," the proposal would not have applied to current retirees, and nobody would have been obliged to participate.

An even bigger question, economists said, is whether the election promises of either candidate are at all realistic at a time of rising international indebtedness and growing budget deficits. Both Obama and McCain have talked in general terms about the need for economic sacrifice but have shied away from spelling out what this will mean.

"No candidate has ever won office by identifying the tax increases and spending cuts that they will have to implement if elected," said Eugene Steuerle, a Reagan-era Treasury official now with the Peter G. Peterson Foundation. "That's been the case throughout history, and it is certainly true of this election."

While McCain has talked about the need to eliminate earmark spending, and Obama has said he would increase taxes on the wealthiest Americans, "those are very small numbers" in relation to the scale of the problem, Steuerle said. The Tax Policy Center has projected a $459 billion deficit by 2012 under an Obama administration, and a $604 billion deficit under a McCain administration, even before the latest "economic stimulus" packages announced this week.

Both candidates have sought to blame the rival political party for the current meltdown on Wall Street through a very selective telling of history. McCain has blamed the crisis on the mortgage giants Fannie Mae and Freddie Mac making overly risky loans "with the encouragement of Senator Obama and his cronies and friends in Washington." Obama has blamed deregulation efforts championed by Republicans such as McCain.

Independent analysts said that it is a distortion to single out any one factor as the cause of the meltdown. Both political parties had deep ties to Fannie Mae and Freddie Mac, and the Democrats supported deregulation of Wall Street during the Clinton administration.

"They both want to assign partisan blame for the economic crisis, which is kind of silly, as there is so much blame to spread around," said Jackson of FactCheck.org.

The verbal brinkmanship has not been confined to the economy. According to Jamieson, some of the most egregious deception has concerned the character of the candidates. She cites McCain campaign attacks on Obama for "palling around with terrorists" -- a reference to his acquaintance with former Weather Underground co-founder William Ayers -- and subtle hints by the Obama camp that McCain is too old to be president.

An Obama ad released in August that was titled "Out of Touch" used slowed-down video of McCain and President Bush at the White House following footage of the senator from Arizona with George H.W. Bush in a golf cart. The effect of the slowed-down footage, says Jamieson, was to show McCain "blinking his eyes really slowly, with jerky motions, reinforcing the age stereotype." An off-screen commentator said McCain "cannot even remember anymore" how many houses he owns, twisting his original words.

An Obama spokesman, Tommy Vietor, said that the conclusion drawn by Jamieson was "completely ridiculous."

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