FACT CHECK: Obama Glosses Over Complex Realities

WASHINGTON (AP) - President Barack Obama's assurance Tuesday that his mortgage-relief plan will only benefit deserving
homeowners appears to be a stretch.
Even officials in his administration, many supporters of the
plan in Congress and the Federal Reserve chairman expect some of
that money will go to people who should have known better than to
buy that huge house.
The president glossed over a number of complex realities in
delivering his speech to Congress and a nation hungry for economic
A look at some of his assertions:
OBAMA: "We have launched a housing plan that will help
responsible families facing the threat of foreclosure lower their
monthly payments and refinance their mortgages. It's a plan that
won't help speculators or that neighbor down the street who bought
a house he could never hope to afford, but it will help millions of
Americans who are struggling with declining home values."
THE FACTS: If the administration has come up with a way to
ensure money does not go to home buyers who used bad judgment, it
hasn't announced it.
Defending the program Tuesday at a Senate hearing, Federal
Reserve Chairman Ben Bernanke said it's important to save some of
those people for the greater good. He likened it to calling the
fire department to put out a blaze caused by someone smoking in
"I think the smart way to deal with a situation like that is to
put out the fire, save him from his own consequences of his own
action but then, going forward, enact penalties and set tougher
rules about smoking in bed."
Similarly, the head of the Federal Deposit Insurance Corp.
suggested this month it's not likely aid will be denied to all
homeowners who overstated their income or assets to get a mortgage
they couldn't afford.
"I think it's just simply impractical to try to do a forensic
analysis of each and every one of these delinquent loans," Sheila
Bair told National Public Radio.
OBAMA: "We have already identified $2 trillion in savings over
the next decade."
THE FACTS: Although 10-year projections are common in
government, they don't mean much. And at times, they are a way for
a president to pass on the most painful steps to his successor, by
putting off big tax increases or spending cuts until someone else
is in the White House.
Obama only has a real say on spending during the four years of
his term. He may not be president after that and he certainly won't
be 10 years from now.
OBAMA: "Regulations were gutted for the sake of a quick profit
at the expense of a healthy market. People bought homes they knew
they couldn't afford from banks and lenders who pushed those bad
loans anyway. And all the while, critical debates and difficult
decisions were put off for some other time on some other day."
THE FACTS: This may be so, but it isn't only Republicans who
pushed for deregulation of the financial industries. The Clinton
administration championed an easing of banking regulations,
including legislation that ended the barrier between regular banks
and Wall Street banks. That led to a deregulation that kept regular
banks under tight federal regulation but extended lax regulation of
Wall Street banks. Clinton Treasury Secretary Robert Rubin, later
an economic adviser to candidate Obama, was in the forefront in
pushing for this deregulation.
OBAMA: "In this budget, we will end education programs that
don't work and end direct payments to large agribusinesses that
don't need them. We'll eliminate the no-bid contracts that have
wasted billions in Iraq, and reform our defense budget so that
we're not paying for Cold War-era weapons systems we don't use. We
will root out the waste, fraud and abuse in our Medicare program
that doesn't make our seniors any healthier, and we will restore a
sense of fairness and balance to our tax code by finally ending the
tax breaks for corporations that ship our jobs overseas."
THE FACTS: First, his budget does not accomplish any of that. It
only proposes those steps. That's all a president can do, because
control over spending rests with Congress. Obama's proposals here
are a wish list and some items, including corporate tax increases
and cuts in agricultural aid, will be a tough sale in Congress.
Second, waste, fraud and abuse are routinely targeted by
presidents who later find that the savings realized seldom amount
to significant sums. Programs that a president might consider
wasteful have staunch defenders in Congress who have fought off
similar efforts in the past.
OBAMA: "Over the next two years, this plan will save or create
3.5 million jobs."
THE FACTS: This is a recurrent Obama formulation. But job
creation projections are uncertain even in stable times, and some
of the economists relied on by Obama in making his forecast
acknowledge a great deal of uncertainty in their numbers.
The president's own economists, in a report prepared last month,
stated, "It should be understood that all of the estimates
presented in this memo are subject to significant margins of
Beyond that, it's unlikely the nation will ever know how many
jobs are saved as a result of the stimulus. While it's clear when
jobs are abolished, there's no economic gauge that tracks job
preservation. The estimates are based on economic assumptions of
how many jobs would be lost without the stimulus.
OBAMA: "First, we are creating a new lending fund that
represents the largest effort ever to help provide auto loans,
college loans and small business loans to the consumers and
entrepreneurs who keep this economy running."
THE FACTS. Obama appeared to be referring to an expanded Federal
Reserve program established in the Bush administration but never
activated. The program would unclog consumer lending, allowing the
Fed's program to expand to $1 trillion from $200 billion. The Fed
said it will lend the money to banks and other financial
institutions in order to spur more lending by those companies
through credit cards and student and auto loans.
Associated Press writer Tom Raum contributed to this story.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

You must be logged in to post comments.

Password (case sensitive):
Remember Me:

Read Comments

Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Jeannie Location: Grayson on Mar 2, 2009 at 09:47 AM
    No, you are right, I cannot tell you when my freedoms have been abridged because I am not allowed to know. That's an excellent method for making sure there was no revolt against Bush policies. You can't sue if you don't know and you can't know because it's a "state secret." Very effective. Your play on words has no effect on me. ic vs. ilk, Obama v. Osama, I'm not easily brainwashed as many of your followers are.
  • by Zatoichi Location: Richmond on Mar 1, 2009 at 08:54 AM
    Jeannie, when was the last time the government listened to your phone calls? Was it the last time you called a cave in Pakistan and asked for Obama (not a typo) bin Laden? You really can not name anyone or anytime your freedoms have been abridged now can you? You only repeat the liberal lies that Obama and his 'patriotic' ilk tell you to. How stupid do I think you are..you really don't want me to answer that now do you?
  • by Jeannie on Feb 27, 2009 at 06:33 PM
    Most of you posters are completely nuts! You'd better start thinking for yourselves & lay off Rush, Hannity, Beck, Coulter, O'Reilly, & Fox News. Freedoms were under attack during Bush admin. Bush thought the constitution didn't apply. When my govt allows a sneak-and-peek in my home and doesn't even have to tell me - all in the name of this "War of Terrorism", I have lost all freedoms. When my government is allowed to listen to my phone calls without a warrant, then I have lost my freedoms. I suppose most of you believe that a Repub. committing illegal acts is OK 'cause they're watching out for me, but if a Dem tries to provide health care for me and my neighbor, then they're attacking my freedoms. How stupid do you think I am! Really? The Kool-Aid is tasting very sweet!!!! You should try it! Or you can stay hung up on a definitions (and birth cert.'s) while I enjoy (finally) having a govt that's responsive to ordinary people's needs as opposed to the rich. Let class warfare commence!!
  • by Bill on Feb 27, 2009 at 05:11 PM
    Watching a great nation go down is hard.All the men who have died to keep this very thing from ever happing.Its heart wrenching.People have fallen for pure bull from the left are being lead down the path of no return.They have allowed the parasitic democrats to take over,and robb us blind.2 Years from to today a gall of milk or gas will cost you 8to 10 bucks.Jimmy Carter all over agian.Theres sure a lot of lazy goverment sucks in this country.
  • by Can't Believe It Location: KY on Feb 27, 2009 at 01:08 PM
    IDEA, are you for real? Pay off everyone's mortgage that has been in their home for 3 years. I am now a senior citizen and I would have loved that several years ago, but we worked hard for years and paid for years on our mortgage. Now, it seems that we seniors have a big problem too, after paying in social security, medicare taxes, etc all these years, the big great OBAMA is now going to cut medicare by 700 to 800 billion dollars. I guess it's time us old folks just can't go to the doctor or hospital, just have to curl up and die at home. Medical insurance for seniors would cost more per month than most mortgages, if you could even get it. OBAMA had better get done what he wants to get done in four years, because he will not get a chance at another four years, if the world is even standing after he gets through.
  • by Zatoichi Location: Richmond on Feb 27, 2009 at 11:55 AM
    The Obama liberal agenda preys on weakness and feelings of inferiority in the population by: creating and reinforcing perceptions of victimization; satisfying infantile claims to entitlement, indulgence and compensation; augmenting primitive feelings of envy; rejecting the sovereignty of the individual, subordinating him to the will of the government. Obama's policies of promoting dependency are just part of a larger plan that goes far beyond economic rescue. The administration is building a larger voting base. What Obama and the Democrats are doing is a profoundly political move to increase the numbers of voters by getting them on welfare so they will continue to vote Democratic. The Obama immigration program is geared toward the same end to provide legalization and benefits for illegal immigrants because they think 70 percent of those people will vote Democratic.
  • by Diane Location: Mt.Sterling on Feb 27, 2009 at 11:30 AM
    I will repeat Thomas Jefferson,"A government big enough to give you what you want is big enough to TAKE all you have."
  • by Define Location: Winchester on Feb 27, 2009 at 08:06 AM
    Sorry....Typo in definition of Fabianism: Socialism to be established by gradual reforms within the law...not (saw)
  • by Define Location: Winchester on Feb 27, 2009 at 07:28 AM
    Definitions of Socialism: 1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. 2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the prolectariat has not yet been successfully achieved. Other Definitions; Fabianism: Socialism to be established by gradual reforms within the saw. National Socialism (Nazism): A form of socialism featuring racism and expansionism and obedience to a strong leader. Communism: A form of socialism that abolishes private ownership. Just wondering.....But do these definitions ring anybody's bells as to what is going on in our country?????
  • by ss minnow Location: Richmond on Feb 27, 2009 at 07:16 AM
    TO Who Cares: Zatoichi makes more sense than anything else posted here. Unfortunately, the kool-aid drinking, mindless obamabots do not wish to hear anything that goes against the chosen one. Preach on, Zatoichi!


2851 Winchester Rd. Lexington, Ky 40509 859-299-0411 - switchboard 859-299-2727 - newsroom
Register for Email
RSS Feeds
Copyright © 2002-2016 - Designed by Gray Digital Media - Powered by Clickability 40264172 - wkyt.com/a?a=40264172
Gray Television, Inc.