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FactCheck.org: Dubious claims in GOP debate

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(FactCheck.org) -- In last night's debate, held days before Tuesday's Republican primary in Boca Raton, Florida, GOP candidates came up with a few new factual distortions and repeated several old ones. Among them:

  • Sen. John McCain said he voted twice to make Bush's tax cuts permanent -- but doesn't mention that he initially opposed them.
  • Former Massachusetts Gov. Mitt Romney falsely portrayed Hillary Clinton's proposed health care plan as an all-government program. It's not.
  • Former Arkansas Gov. Mike Huckabee once again claimed the FairTax would benefit everyone. That's not possible.
  • And former New York Mayor Rudy Giuliani continued a pattern of exaggerating his accomplishments while in office.
  • McCain's tax evasion

    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.

    Clinton's health plan, misrepresented

    Mitt Romney, once again, falsely said that Sen. 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.

    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."

    Giuliani's fables

    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.

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    Let's start with unemployment. In January 1994 when Giuliani took office, the rate was 9.9 percent, not 10.5, a figure that was last seen the previous April. And he didn't cut unemployment in half. By January 2002, with Giuliani just having left office, it was 7.6 percent. Even if we give him the benefit of the doubt and go back to the month prior to Sept. 11, 2001, the rate was still 6.2 percent. At no point during his term did it drop to 5.0, the rate that would lend truth to his "more than half" claim. 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. E-mail to a friend E-mail to a friend

    Viveca Novak, with Brooks Jackson, Jess Henig, Joe Miller and Lori Robertson

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