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A Project of The Annenberg Public Policy Center

Scaring, and Misleading, Seniors Again

In what is becoming a bit of a pattern, a group that backs Sen. Barack Obama is trying to convince senior citizens that Sen. John McCain would be their worst nightmare. The AFL-CIO is distributing a mailer that claims McCain is “turning his back on retirees,” by “privatizing Social Security, taxing health care benefits” and “cutting $1 trillion from Medicare.”

Talking Points Memo reports that the AFL-CIO is sending this flyer to retirees in Indiana, North Carolina and more traditional swing states. If this mailer finds its way into your mailbox, however, be aware that its main points are misleading:

  • “Privatizing” Social Security: It’s true that McCain has backed a plan that President Bush proposed in 2005 that would have allowed workers to put some of their Social Security money into private accounts. But, as we said when the Obama-Biden campaign made similar claims, the so-called “privatization” was voluntary, and Americans would have been able to only transfer one-third of their Social Security taxes into investment funds.
  • Taxing Health Benefits: The mailer is almost right about this. McCain’s health care plan would tax employer-provided health care benefits as income for the first time, but the mailer neglects to mention that McCain would give individuals a tax credit of up to $2,500 ($5,000 for couples or families) to cover the cost of these additional taxes. The credit is enough to cover taxes for most families, despite what the AFL-CIO and other unions claim.
  • Cutting “$1 trillion” from Medicare: We just tackled this bogus bit on our main site today, after an Obama ad falsely claimed McCain would cut Medicare by $882 billion. Neither figure is correct. The McCain campaign has said it would get “savings” out of Medicare and Medicaid to pay for its health care plan, but an adviser insists that benefits would not be cut. The flyer points to a Wall Street Journal article, in which the reporter cited a $1.3 trillion estimate from the Tax Policy Center of what McCain would need to cut or save over 10 years in order to completely pay for his plan. The McCain camp didn’t dispute the figure, according to the Journal, but it hasn’t confirmed any dollar amount, either. McCain economic adviser Douglas Holtz-Eakin told reporters in an Oct. 17 conference call that McCain would get savings from Medicare through eliminating fraud, expanding information technology in the health care industry and getting generic drugs on the market more quickly, among other measures. He again denied any benefits would be cut.