In last night's debate, held days before Tuesday's Republican primary in the Sunshine State, the remaining GOP candidates came up with a few new factual distortions and repeated several old ones. Among them:
- McCain said he had won the Republican vote in both the South Carolina and New Hampshire primaries, where independent voters also participate. One exit poll showed him narrowly prevailing with Republicans in New Hampshire, while another didn’t. And the same poll that favored him in that state had him losing the GOP vote to Huckabee in South Carolina.
- McCain all but denied that he had said he didn’t know much about economics. In fact, he did say that he needed "to be educated" on the subject.
- McCain also said he voted twice to make Bush's tax cuts permanent – but doesn't mention that he initially opposed them.
- Romney falsely portrayed Hillary Clinton's proposed health care plan as an all-government program. It's not.
- Huckabee once again claimed the FairTax would benefit everyone. That's not possible.
Remaining GOP candidates Rudy Giuliani, Mitt Romney, Mike Huckabee, John McCain and Ron Paul climbed into the ring at Florida Atlantic University in Boca Raton and had the truth on the ropes in short order.
Don't Block the Exits
McCain dubiously claimed that he won the GOP vote in both New Hampshire and South Carolina. But in New Hampshire, the National Election Pool Exit Poll, whose members are ABC, the Associated Press, CBS, CNN, Fox News and NBC, showed Romney edging McCain 35 percent to 34 percent among Republican voters. McCain wouldn't have won if he hadn't collected 40 percent of the independent vote, an overwhelming plurality. McCain can point to an exit poll done separately by Fox News, which shows him beating Romney among Republicans in New Hampshire, 35 percent to 33 percent. The same poll, though, shows Romney received more of the self-identified "conservative" vote, 38 percent to McCain's 31 percent.
But if McCain wants to use Fox's exit polls as his standard, the one taken after the South Carolina primary disproves his point: Huckabee edged him among Republican voters, 32 percent to 31 percent, and it was only through the votes of independents, who swung for him 42 percent to 25 percent, that McCain prevailed.
McCain cast doubt on moderator Tim Russert's assertion that the candidate had said he was no expert on economics.
Russert: Sen. McCain, You have said repeatedly, quote, "I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated." … McCain: Actually, I don't know where you got that quote from. I'm very well versed in economics. …
Russert’s quote comes from a 2005 interview with Wall Street Journal editorial board member Stephen Moore:
Moore, WSJ, Nov. 26, 2005: He is refreshingly blunt when he tell [sic] me: "I'm going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated."
We could not find through Nexis searches that McCain has said that quote "repeatedly," but he has made similar comments recently. The Chicago Tribune quoted McCain talking to reporters in December:
McCain (quoted by SwampPolitics.com, Dec. 18, 2007): The issue of economics is something that I've really never understood as well as I should. I understand the basics, the fundamentals, the vision, all that kind of stuff. But I would like to have someone I'm close to that really is a good strong economist. As long as Alan Greenspan is around I would certainly use him for advice and counsel.
The Tribune story went on to say that "McCain said his staff hates it when he discusses his shortcomings on economics, even though he has read widely and studied the subject. 'I've never been involved in Wall Street, I've never been involved in the financial stuff, the financial workings of the country, so I'd like to have somebody intimately familiar with it,' he said of a potential vice president."
McCain spoke as though he had always supported Bush's tax cuts:
McCain: I think it's very important that we make the Bush tax cuts permanent. I voted to make them permanent twice already. If people and businesses and families in America are now planning their 2010 budget, there's a great deal of uncertainty. And if we don't make the tax cuts permanent, then they will experience what amounts to a tax increase.
It is true that McCain voted in 2006 to make the Bush tax cuts permanent. But he was against the cuts before he was for them, and his statements in the debate elide that fact. McCain voted against both sets of Bush tax cuts, in 2001 and in 2003. And on NBC's "Meet the Press" in 2004, McCain stated that he did not support extending all the cuts, though he did go on to say that he would make the so-called "middle class" tax cuts permanent:
McCain in 2004: I would have – I voted against the tax cuts because of the disproportionate amount that went to the wealthiest Americans. I would clearly support not extending those tax cuts in order to help address the deficit. But the middle-income tax credits, the families, the child tax credits, the marriage tax credits, all of those I would keep.
McCain is entitled to change his mind. And in fact, his opinions are not necessarily contradictory; he may believe that the tax cuts he opposed should now be made permanent so that taxpayers know what to expect (although in '04 he only wanted middle-class taxpayers to have that assurance, and in the '05 Wall Street Journal interview cited above, he also said some of the Bush tax cuts were "too tilted to the wealthy"). But his statements last night could lead voters to believe that he has always supported the cuts, and that's simply not true.
Mitt Romney, once again, falsely said that Hillary Clinton’s health care plan would be complete government-provided insurance.
Romney: Her health care plan, quite simply, is one which says, look, we're going to give health insurance to everybody by the government. It's going to cost $110 billion more every single year – trillion-plus dollars over 10 years.
Clinton's proposal, which aims to cover everyone in the country, allows people to keep their current health insurance. As stated on her Web site: "If you have a plan you like, you keep it."
Those who want to change insurance plans can choose one of the private plans offered to members of Congress or join a government-run program similar to Medicare. Employer-offered insurance would also continue to exist, and Clinton says she’ll give tax credits to small businesses to help them pay for health coverage for employees.
This is a familiar refrain from Romney, who has both boasted of the universal health care plan he signed into law in Massachusetts and criticized Clinton's health plan, while trying to draw distinctions between the two. We’ve written about the similarities between his state's plan and Clinton's before.
As for the cost of Clinton's proposal, her campaign has said it will run about $110 billion a year, an amount she claims she’ll cover by ending Bush's tax cuts to households making more than $250,000 and reaping savings from improving electronic record-keeping, research, and preventive and chronic care; making changes to Medicare and Medicaid; and implementing measures to control prescription drug costs.
McCain chose his comparisons unwisely when discussing government pork:
McCain: Look, the president of the United States signed into law, two years in a row, pork barrel-laden bills, $35 billion worth of pork, worth of earmarked projects which are outrageous. Now, we could have given a $1,000 tax credit for every child in America for that $35 billion. Instead we chose a bridge to nowhere.
It's not clear where McCain is getting the $35 billion figure (the campaign hasn't yet responded to our request for more information), or whether he means $35 billion in each of two consecutive years or a total of $35 billion in a two-year period. But that's more pork than the watchdog group Citizens Against Government Waste has diagnosed in the budget for any one year of the Bush presidency, and it's less than the total for any two years. The highest amount the group has calculated is $29 billion in 2006, and the smallest two-year sum was $38.6 billion in 2001 and 2002.
Even if we assume $35 billion in pork, however, McCain must be defining "child" rather narrowly. According to the 2000 Census, there are about 72.3 million people under the age of 18 in the United States. Dividing $35 billion among them would work out to about $484 each. Even if you counted only children under the age of 9, you'd be giving tax credits for 39.7 million individuals, for a total of about $882 per child – still short of $1,000. To apportion $35 million in thousand-dollar chunks, you'd have to leave out some elementary-schoolers. We think that's a pretty loose definition of "child."
FairTax Fairy Tales
In a lengthy exchange with McCain and moderator Russert, Huckabee promised that the FairTax would do everything short of taking out your trash. We decided to settle for examining a few of the highlights:
Huckabee: It actually untaxes the poor, untaxes the elderly. It makes sure that we don't end up paying taxes on groceries and medicine and the basic necessities of life. And for each third of the economy, there is a benefit, about a 14 percent benefit for those at the bottom; those in the middle, about a 7 percent; even those at the very top end of the economy end up with about a 5 percent benefit. … Everybody gets in the economy – no more underground economy. Drug dealers, prostitutes, pimps, gamblers, non-Republicans – (laughter) – all of those people out there will be paying taxes. Nobody's working under the table.
As we wrote earlier, those earning less than about $25,000 per year will be better off under the FairTax. But it’s not necessarily true that the plan would untax the elderly. Retirees who are living on money they have saved – money that was taxed when they earned it – will still have to pay the consumption tax, meaning that, in effect, many seniors will be taxed twice.
Moreover, Huckabee's claim that everyone will pay less is a fantasy. The FairTax claims to be revenue neutral. That means that it has to collect the same $2.4 trillion that the current system collects. And remember that the FairTax replaces corporate income and payroll taxes. That means that individuals have to pony up to replace those in addition to replacing the sums collected via personal income and payroll taxes. So Huckabee is suggesting that the FairTax will generate exactly the same revenue while collecting nothing from corporations and still costing everyone less than they are currently paying. We certainly hope Huckabee has a barrel of magic pixie dust buried somewhere.
And Huckabee’s suggestion that the FairTax will end the underground economy is highly unlikely. It’s true that pimps and drug dealers will now be taxed when they spend their earnings. But will they really charge johns and junkies sales tax on their purchases? Moreover, those johns and junkies are no longer paying any income taxes on the money that they use to buy drugs or sex. Under the current system, pimps pay no income taxes but johns do. Under the FairTax, pimps pay a consumption tax but johns don’t. It’s a better deal for the person buying the sex, drugs or other illicit purchase, and a worse deal for the person selling it.
In fact, far from ending the underground economy, there is a real possibility that the FairTax will feed it growth hormones. Bruce Bartlett, who worked in both the Reagan and first Bush administrations, writes that "Under the FairTax, every time you purchase a service, you would probably get two prices — one you can pay with a check or credit card that includes the FairTax and one you can pay in cash and save 23 percent. Because there would no longer be any audits of income, since the IRS would have been abolished, tracing such tax evasion would be extremely difficult."
There were plenty of other tempting targets in this little exchange, but we’ve already bagged our quota.
Giuliani continued a pattern of exaggerating his accomplishments as mayor of New York:
Giuliani: I'm the only one who's actually turned around a government economy. I mean, the reality is when I became mayor of New York the economy of New York was in very, very bad shape – tremendous deficits, ten-and-a-half percent unemployment, 300,000 jobs gone. We turned that around, cut unemployment by more than half, brought in 450,000 new jobs, and we cut taxes by 17 percent.
Let's start with unemployment. In January 1994, when Giuliani took office, the seasonally adjusted jobless rate – the figure most commonly used when reporting unemployment numbers – was 9.9 percent. According to Giuliani’s campaign, he was talking about the seasonally unadjusted rate, which indeed was 10.4 percent. While the Bureau of Labor Statistics does report two sets of unemployment figures, seasonally adjusted and seasonally unadjusted, it is the seasonally adjusted numbers – which have been mashed to account for variations in employment patterns through the year – that are most commonly used by reporters and even by the BLS.
Any way you look at it, though, Giuliani’s being misleading. In December 2001, his last month in office, the unadjusted rate was 7.5 percent, the same as the adjusted rate. If you go back to August 2001 (pre-Sept. 11), the seasonally adjusted rate was 6.2 percent, unadjusted was 6.3 percent. There was just one month, May 2001, when the unadjusted rate fell to 5.0 percent, the only one during his tenure when he could claim to have cut unemployment “by more than half.” (The lowest point for the adjusted rate was January 2001, when it fell to 5.2 percent.) In our judgment, it’s deceptive for Giuliani to cherry-pick a month that wasn’t at the end of his time in office to compare to the rate in the month he was inaugurated.
Update, Jan. 25: We originally wrote that Giuliani was wrong to say that unemployment was “ten-and-a-half percent” when he took office. Giuliani’s campaign called us to say that the former mayor had been using the seasonally unadjusted unemployment rate. We’ve rephrased the above section to account for his interpretation – and ours.
As for deficits, we've said this before: When he took office, Giuliani faced a $2.3 billion deficit for the next fiscal year. His last budget, issued in May 2001, projected a nearly $2.8 billion deficit in fiscal 2003, the first budget year the incoming mayor would face. Because of 9/11, the gap grew to about $5 billion.
We’ve dealt with the former mayor’s 17 percent tax cut claim before, too. It’s actually the tax burden that declined that much, not the tax rate, as one might think from listening to his words.
–by Viveca Novak, with Brooks Jackson, Jess Henig, Joe Miller and Lori Robertson
Clinton, Hillary. "American Health Choices Plan." HillaryClinton.com, accessed 25 Jan. 2008
"Clinton Unveils Health Plan." "Good Morning America." ABC News, transcript. 18 Sept. 2007.
Bartlett, Bruce. "Why the FairTax Won’t Work." Tax Analysts (2007).
U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics, seasonally adjusted figures for New York City, NY. BLS website, accessed 25 Jan. 2008
United States Census Bureau. Profiles of General Demographic Characteristics. 2000 Census of Population and Housing. May 2001.
NBC News. Meet the Press. 11 Apr. 2004.
Moore, Stephen. " ‘Reform. Reform. Reform.’ " The Wall Street Journal, 26 Nov. 2005.
Zuckman, Jill. "McCain wants no yes men in his White House." The Swamp, Chicago Tribune, 18 Dec. 2007.