Debate 10/07 Fact checks

McCain and Obama debated for the second time, in Nashville. We noted some misleading statements and mangled facts:

* McCain proposed to write down the amount owed by over-mortgaged homeowners and claimed the idea as his own: “It’s my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal.” But the idea isn’t new. Obama had endorsed something similar two weeks earlier, and authority for the treasury secretary to grant such relief was included in the recently passed $700 billion financial rescue package.

* Both candidates oversimplified the causes of the financial crisis. McCain blamed it on Democrats who resisted tighter regulation of federal mortgage agencies. Obama blamed it on financial deregulation backed by Republicans. We find both are right, with plenty of blame left over for others, from home buyers to the chairman of the Federal Reserve.

* Obama said his health care plan would lower insurance premiums by up to $2,500 a year. Experts we’ve consulted see little evidence such savings would materialize.

* McCain misstated his own health care plan, saying he’d give a $5,000 tax credit to “every American” His plan actually would provide only $2,500 per individual, or $5,000 for couples and families. He also misstated Obama’s health care plan, claiming it would levy fines on “small businesses” that fail to provide health insurance. Actually, Obama’s plan exempts “small businesses.”

* McCain lamented that the U.S. was forced to “withdraw in humiliation” from Somalia in 1994, but he failed to note that he once proposed to cut off funding for troops to force a faster withdrawal.

* Obama said, “I favor nuclear power.” That’s a stronger statement than we've heard him make before. As recently as last December, he said, “I am not a nuclear energy proponent.”

* McCain claimed “1.3 million people in America make their living off eBay.” Actually, only 724,000 persons in the U.S. have income from eBay, and only some of them rely on it as their primary source.

For full details, and additional quibbles, please read our Analysis section.
Analysis
Sens. Barack Obama and John McCain met Oct. 7 for the second of three scheduled presidential debates. It was a town-hall-style debate before an audience of 80 uncommitted voters. Questions were submitted by the audience members, and others who sent them by e-mail, and were screened beforehand by moderator Tom Brokaw of NBC News. The event was held at Belmont University in Nashville, Tenn., and was broadcast nationally. We caught several misleading statements and falsehoods, many of which the candidates have said before.

"My" Mortgage Plan?

McCain made what he claimed was a new proposal to rescue over-mortgaged homeowners:

McCain: As president of the United States. ... I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes – at the diminished value of those homes and let people be able to make those – be able to make those payments and stay in their homes.

McCain added: "It's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal. But I know how to get America working again..."

But in fact, the recently passed $700 billion rescue package already grants the treasury secretary authority to undertake just such a program. It requires the secretary to buy up troubled mortgages while taking into consideration “the need to help families keep their homes and to stabilize communities.” It also says “the Secretary shall consent, where appropriate (to) loss mitigation measures, including term extensions, rate reductions (or) principal write downs."

Obama himself had urged this as the package was being considered. He said on Sept. 23 that "we should consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage-backed securities."

McCain said "his" proposal would be expensive, and his campaign quickly issued a news release giving numbers:

McCain press release: The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. ... It may be necessary for Congress to raise the overall borrowing limit.

Minutes later, McCain was attacking Obama for proposing what he said was $860 billion in new spending.

Oversimplifying the Financial Crisis. Again.

The finger-pointing was fast and furious during the discussion of the fiscal crisis. McCain blamed lax regulation of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation:

McCain: But you know, one of the real catalysts, really the match that lit this fire was Fannie Mae and Freddie Mac. [T]hey're the ones that, with the encouragement of Sen. Obama and his cronies and his friends in Washington, that went out and made all these risky loans, gave them to people that could never afford to pay back.

Obama blamed deregulation of the banking industry:

Obama: Now, I've got to correct a little bit of Sen. McCain's history, not surprisingly. Let's, first of all, understand that the biggest problem in this whole process was the deregulation of the financial system.

mccainWe’ve been here before. McCain has in fact been in favor of financial deregulation, but President Bill Clinton signed, and a lot of other Democrats supported, much of that same deregulation. And while Democrats really did fight McCain-cosponsored regulations of the FMs, McCain himself signed on to the bill just two months before the housing bubble popped.

In fact, there’s plenty of blame to go around. Experts have blamed everyone from home buyers to mortgage lenders to Alan Greenspan to both the Bush and Clinton administrations.

Furthermore, McCain misspoke when he said Fannie Mae and Freddie Mac "made all these risky loans, gave them to people that could never afford to pay back." Actually those organizations did not make "home loans directly with consumers." Rather, they "work[ed] with mortgage bankers, brokers, and other primary mortgage market partners" and supplied them with the funds to lend to home buyers at affordable rates, as described on their Web sites.

Dubious Health Care Savings

Obama said that his health care plan would cut premium costs substantially:

Obama: We're going to work with your employer to lower the cost of your premiums by up to $2,500 a year.

We contacted health experts about this claim before – when Obama was saying the $2,500 would be the savings per family "on average." Some were quite skeptical. M.I.T.’s Jonathan Gruber told us, “I know zero credible evidence to support that conclusion.” Obama has also said on the campaign trail that more than half of the savings would come from the use of electronic health records, a major part of his plan to cut health costs. When we looked into that claim, experts told us it was wishful thinking.

Adoption of electronic medical records has been slow among doctors and hospitals. Obama could do much to speed it up, but it's not clear that he could bring about widespread adoption or reap such large savings from it. One of his advisers previously told us that the $2,500 figure included savings that would go to government and employers and that could, theoretically, result in lower taxes or higher wages for Americans. It remains to be seen whether savings could trickle down like that, even if Obama could gain the optimistic overall health care savings he touts.

More Health Care Misleads

McCain misstated his own health care plan and Obama’s in one sentence:

McCain: I am in favor of . . . giving every American a $5,000 refundable tax credit and go out and get the health insurance you want rather than mandates and fines for small businesses, as Sen. Obama's plan calls for.

McCain's plan does not call for giving a $5,000 tax credit for "every American." It calls for a tax credit of $2,500. The $5,000 figure would apply to couples or families. And Obama’s plan requires large businesses to provide coverage for their employees or pay into a national plan, not "small businesses," as McCain said. Obama's health care proposal, posted on his Web site, says: “Small businesses will be exempt from this requirement.” McCain previously used this charge in his acceptance speech at the Republican National Convention, and he repeated the claim in the debate, saying, "If you're a small business person and you don't insure your employees, Sen. Obama will fine you. Will fine you." As we said, that's false. Obama countered that he had proposed a refundable tax credit for small businesses of up to 50 percent of the cost of premiums, which is indeed part of his plan. We've noted before that neither man defines what he means by "small business."





For more:http://www.factcheck.org/elections-2008/factchecking_debate_no_2.html