Democrat Barack Obama and Republican John McCain stretched some facts as they addressed the financial crisis and misrepresented each other's positions during their second presidential debate. Some examples:
McCain: Said one way out of the financial crisis is to “stop sending $700 billion a year to countries that don't like us.”
The facts: Although he didn't spell it out, he was referring — as he has in the past — to purchases of oil from countries hostile to the U.S. The figure is misleading. The U.S. is not spending nearly that much on oil imports, and roughly one-third of what it does spend goes to friendly countries such as Canada, Mexico and Britain.
Obama: “I believe this is a final verdict on the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Sen. McCain, that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us. It hasn't worked out that way. And so now we've got to take some decisive action.”
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The facts: McCain has indeed favored less regulation over the years but supported tighter rules and accountability on Fannie Mae and Freddie Mac two years before the start of a financial crisis prompted in part by those mortgage giants. Obama was not a leader in that unsuccessful effort. Some of the current problems can be traced to legislation passed in 1999 that lifted many regulations over the financial industry. That deregulation was championed by then-Sen. Phil Gramm, R-Texas, a McCain supporter, but also by President Clinton, who signed the legislation, and by former Clinton Treasury Secretary Robert Rubin, now a top Obama adviser.
McCain: Said he would provide a $5,000 refundable tax credit for families to buy health insurance “rather than mandates or fines for small businesses, as Sen. Obama's plan calls for.”
The facts: Obama's health care plan does not impose mandates or fines on small business. He would provide small businesses with a refundable tax credit of up to 50 percent on premiums paid on behalf of their employees. Also, large employers that do not offer meaningful coverage or contribute to the cost of coverage would be required to pay a percentage of payroll toward the costs of a public insurance plan. But small businesses would be exempt from that requirement.
Obama: Said McCain's proposal to give people a tax credit in exchange for treating employers' health insurance contributions as taxable wages amounts to “what one hand giveth, the other hand taketh away.”
The facts: Obama's suggestion that McCain's plan is a wash for families is misleading. McCain offers families a $5,000 tax credit to help them buy health insurance. The corresponding increase in taxable wages would result in a much smaller cost than the value of the tax credit, at least at first. Over time, the value of the tax credit may diminish as premiums rise. However, the Tax Policy Center estimates that McCain's plan would increase the federal deficit by $1.3 trillion over 10 years — mainly because it would lead to less tax revenue coming in, meaning it is a true tax break overall.
McCain: Complained that Obama's “cronies” and “friends” had received money from Fannie and Freddie.
The facts: McCain has his own ties to the mortgage giants. Rick Davis, his campaign manager, has been a focus of attention because Freddie and Fannie paid him or his lobbying firm more than $2 million dating back to 2000.
Obama: “Actually I'm cutting more than I'm spending so that it will be a net spending cut.”
The facts: Obama has many ambitious plans to spend more taxpayer dollars on a variety of federal programs, including clean energy technologies and job training. He's said he'll cut “pork barrel” programs and the costs of the war in Iraq to pay for it — as well as raise taxes on the wealthy — but the specifics of his new spending plans greatly outweigh the few spending cuts he's identified.
McCain: Said Obama had voted for tax increases “94 times.”
The facts: This inflated count, heard before, includes repetitive votes as well as votes to cut taxes for the middle class while raising them on the rich. An analysis by FactCheck.org found that 23 of the votes were for measures that would have produced no tax increase at all, seven were in favor of measures that would have lowered taxes for many, 11 would have increased taxes on only those making more than $1 million a year.