As President Barack Obama and Republican nominee Mitt Romney rhetorically sparred in Wednesday night’s televised debate, both candidates exhibited a propensity toward misstatements, falsehoods, and exaggerations.
From the economy to immigration, health care to military spending, both Romney and Obama sometimes played fast and loose with the facts. Here’s a look at some of what was said:
Romney repeated his claim that Obama took $716 billion from Medicare to fund the Affordable Care Act, also known as “Obamacare.”
The law would reduce Medicare spending by $716 billion from 2013 to 2022, according to Congressional Budget Office estimates. But the spending reduction wouldn’t affect services for seniors, because the trims would come mainly in lower annual payment increases to hospitals and other providers, higher premiums for affluent beneficiaries and lower payments to Medicare Advantage plans, the private plans that provide Medicare benefits.
The Medicare spending reductions also would be supplemented by new revenue from a health care law payroll tax on high-income workers and new fees on drug companies, medical device makers and insurers – all industries that will see substantial new revenue when the law provides coverage for millions of uninsured Americans in 2014.
Romney said he would repeal the health care law, and that doing so would put the $716 billion back into the program. But the CBO said repealing the law would raise the deficit by $109 billion over the next decade.
Doing so also would eliminate its savings and revenue provisions for Medicare and would cause Medicare’s Hospital Insurance Trust Fund to become insolvent eight years earlier – in 2016 instead of 2024, according to the federal Centers for Medicare and Medicaid Services.
That’s because the projected $716 billion in reduced Medicare spending under the health care law would disappear if the law was repealed.
Obama claimed he created 5 million private-sector jobs over the last 30 months. This does not take into account the loss of government jobs – federal, state and local – that has occurred during his administration. And it doesn’t take into account the job losses in his early months, when the economy was shedding a staggering 800,000-plus jobs per month.
Economists don’t blame him for these losses, as they were part of the Great Recession, which ended in his fifth full month in office. But if you add up the jobs numbers during his entire term, the net on private-sector jobs is in the ballpark of 300,000.
Responding to Obama’s assertion that businesses get tax breaks for shipping jobs overseas, Romney responded, “I’ve been in business for 25 years, and I have no idea what you’re talking about.”
He’s correct, if taken literally, that there is no deduction for moving a job overseas. But what the Obama administration has sought, as have several presidential candidates and sitting presidents over the last 50 years, is limiting the ability of corporations to defer payment of U.S. taxes on overseas profits.
A company that moves a plant to China can defer paying U.S. taxes on the profits of that operation, instead of having to pay taxes annually if producing in the United States. Many companies also seek out low-tax countries, maximizing their profits and deferring payment of taxes in the United States.
In 2004, Congress offered corporations a one-time lower tax rate if they repatriated some of those foreign earnings, called "undistributed earnings." Republicans, who consider the U.S. taxes essentially double taxation, have pushed for another similar tax holiday.
Both candidates were squishy on deficit reduction. The president claimed that the Romney economic plan would add $5 trillion to the deficit, a charge Romney refuted by saying he wouldn’t sign onto anything that adds a dollar to the deficit. Obama seemed to be citing a scoring of the plan by a think tank that it would add $5 trillion over a 10-year period. But that figure omits whatever revenue would be raised by closing tax loopholes. That figure is hard to calculate without knowing whether Romney would scrap the mortgage interest deduction, charitable deductions and other so-called tax expenditures.
Similarly, Obama pointed to his own budget plans that include $4 trillion in deficit reduction. Half of that already has been agreed to in an already existing budget deal forged last year with Congress. And the president is also counting on about $800 billion in savings from ending the wars in Afghanistan and Iraq, something he promised as a candidate, but hardly qualifies as a deficit-reduction measure.
The two men traded barbs on the 2010 overhaul of financial regulation of Wall Street, shorthanded as the Dodd-Frank Act. The law has been a frequent punching bag for many Republican candidates. Romney clarified that he would not seek its complete repeal, just parts of it, mostly unspecified. The GOP nominee said the lack of regulations, two years after enactment, is hurting the economy.
As an example, he pointed to the lack of a definition in the law for a qualified mortgage and suggested that it was keeping banks from lending. There’s no evidence of that. To the contrary, all the data shows that consumers are reluctant to take on new debt, and given that there is no longer a private secondary mortgage market where banks sell off the loans they’ve underwritten, banks are reluctant to lend.
Romney is right that many rules have not been written, but that in part was by design, in response to the financial sector, which sought a long, deliberate rule-writing process to ensure attention to the complexity of these markets.
Romney said he wouldn’t cut federal education spending, though last week he told an education summit that he wouldn’t support more federal spending for education and would leave that to the states. Romney wants to restrict Pell Grants, the main source of federal financial aid for college, to just the poorest students. “Flooding colleges with federal dollars only serves to drive tuition higher,” a Romney campaign education policy paper says.
But campaign spokeswoman Amanda Henneberg has declined to provide details about where Romney would set the limits.
Under Obama, Pell Grants have more than doubled, from $16 billion in 2008 to $36 billion last year. The size of the grants increased, as did the number of recipients, from about 6 million to 9 million.