WASHINGTON (AP) - Democrat Barack Obama and Republican John
McCain stretched facts, sometimes past the breaking point, as they
addressed the financial crisis and misrepresented each other's
position on health care during their second presidential debate.
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 inflated and 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 Senator 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."
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 giant mortgage underwriters. 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
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 Senator 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 health 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
THE FACTS: Obama's suggestion that McCain's health care 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
McCAIN: Complained that Obama's "cronies and friends" had
received money from Fannie and Freddie.
THE FACT: McCain has his own ties to the mortgage giants. Rick
Davis, his campaign manager, has been a focus of attention because
Freddie Mac and Fannie Mae 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
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.
McCAIN: Said Obama supported a congressional earmark of "$3
million for an overhead projector at a planetarium in Chicago, Ill.
My friends, do we need to spend that kind of money?"
THE FACTS: McCain's phrase suggests Obama spent $3 million on an
old-fashioned piece of office equipment that projects charts and
text on a wall screen. In fact, the money was for an overhaul of
the theater system that projects images of stars and planets for
educational shows at Chicago's Adler Planetarium. When he announced
the $3 million earmark last year, Obama said the planetarium's
40-year-old projection system "has begun to fail, leaving the
theater dark and groups of school students and other interested
museum-goers without this very valuable and exciting learning
Associated Press writers Tom Raum, Andrew Taylor, Kevin Freking
and Christopher Wills contributed to this report.
(Copyright 2008 by The Associated Press. All Rights Reserved.)