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Politics / CAMPAIGN 2012

Fact Checking the Presidential Debate

Republican presidential nominee Mitt Romney answers a question as President Obama listens during the first presidential debate at the University of Denver on Wednesday.((AP Photo/Charlie Neibergall))

October 3, 2012

CORRECTION: An earlier version of this story mischaracterized the Center on Budget and Policy Priorities' budget analysis. The center's assumptions on deficit reduction include discretionary-spending cuts enacted during 2011.

The first presidential debate between President Obama and Mitt Romney on Wednesday night in Denver covered topics ranging from taxes to health care to job creation. Here is a look at some of their statements and how firmly they are grounded in fact.

Romney on health care spending:

 

Romney claimed that middle-income Americans are spending $2,500 more for health care now than they did when Obama took office in 2008. While Americans are spending more for their insurance and overall health spending since 2008, the difference is closer to $1,000, not $2,500. According to the Kaiser Family Foundation, the average employee purchasing family health insurance in 2012 paid $4,316 for insurance, just under $1,000 more than what they paid for insurance in 2008. Total per capita health expenditures had about the same $1,000 spread between 2008 and 2012, according to the Centers for Medicare and Medicaid Services. In 2008, CMS found Americans spent $7,910 per capita on health care; in 2012, they are estimated to spend $8,952.

Obama on Simpson-Bowles:

Obama, answering a challenge from Romney, said that he did take an adjusted version of the Simpson-Bowles deficit-reduction framework to Congress, and that he has proposed $4 trillion in deficit reduction. Not quite.

After the Simpson-Bowles commission failed to get the necessary votes needed to introduce its plan in December 2010, the White House looked the other way. The commission's plan would have reduced deficits by $4 trillion over 10 years through a combination of discretionary-spending cuts, broad tax reform, and entitlement savings.

Obama said his own proposals would also reduce the 10-year deficit by $4 trillion, an assertion that has been challenged by some budget experts as overly optimistic.

The president takes his number from the Center on Budget and Policy Priorities, which includes in its calculations cuts in discretionary spending already enacted into law during 2011.

Romney on "Obamacare's" Medicare board:

Romney’s claim that Obama’s health reform law includes a Medicare board that can “tell people ultimately what kind of treatments they can have” was one of the biggest whoppers of the night. It’s a line that Republicans used during debate on the health reform law, when they regularly and inaccurately called the Medicare spending board a “death panel.”

Under the Affordable Care Act, the Medicare board would have the job of keeping Medicare spending within a specific target: gross domestic product plus 1 percent by 2020. The board, which would be appointed by the president and approved by the Senate, is explicitly restricted from directly cutting Medicare benefits. In other words, they must cut hospital, doctor, and nursing-home payment rates, and they are not allowed to restrict what kinds of treatments those providers can offer to treat seniors.

Obama on Romney’s tax plan:

The two candidates spent the first part of the debate squabbling over taxes, running roughshod over moderator Jim Lehrer to trade barbs over the finer points of Romney’s plan. Obama criticized the plan early on, repeating the theme that Romney wants to raise taxes on the middle class in order to preserve cuts for the wealthy.

Obama’s claim stems from a much-publicized Tax Policy Center analysis of Romney’s framework, which found that a 20 percent across-the-board reduction in marginal personal income-tax rates couldn’t be achieved without ridding the tax code of some tax expenditures that help the middle class. Roughly $1.1 trillion in revenue is lost to deductions and credits each year, with about 90 percent of that money going to the top 20 deductions--including widely popular items like the employer-provided health-insurance deduction and the mortgage-interest deduction.

The only top deduction that almost exclusively benefits the wealthy is the preferential rate for capital gains--and Romney has said he will preserve existing incentives for investment. The $17,000 cap on deductions Romney floated earlier this week would hit the wealthiest the hardest--in part because the wealthy are more likely to use deductions, as The Washington Post notes in its analysis--but the recouped funds would not be high enough to make up for the revenue lost by the sweeping rate reduction.

Romney on new business start-ups:

In the first question of the debate, Obama and Romney were asked to spell out the differences between their job-creation plans. According to Romney, small businesses create jobs--and new business start-ups are at a 30-year low.

Fact-checking website PolitiFact looked into this claim when House Speaker John Boehner made it in March, rating it “true.” PolitiFact quotes Scott Shane, chairman of the economics department and professor of entrepreneurial studies at Case Western Reserve University:

“Using data from the Census Bureau and U.S. Small Business Administration, Shane found that the per capita rate of new employer business formation in 2009 (the most recent year available) was 1.32 per thousand people--‘an astonishing 51.4 percent of the rate in 1977,’ he said. ‘That is, Americans are starting new businesses with employees at half the rate they did 30 years ago.’ ”

Romney on gas prices:

Romney said gas prices have doubled under Obama. That’s true, Slate reported in April, and has become an oft-repeated criticism of the incumbent from the GOP.

Obama on Medicaid

Obama said Romney’s plan would result in “effectively a 30 percent cut” in the federal health program that covers health care for poor children and seniors receiving long-term care. Romney wants to give states complete control over their Medicaid spending (currently the federal government sets a lot of rules for Medicaid spending, because it contributes an average of half of the Medicare dollars in each state), and has pledged to hold spending to 20 percent of GDP.

According to the Congressional Budget Office, giving states total control of just a portion of Medicaid—often called “block granting”—would cut lots of money from the program. The federal government would save $287 billion over 10 years if long-term Medicaid care was given straight to states, more than Medicaid spent in total in 2010. The liberal Center for Budget and Policy Priorities estimates that for Romney to reach his pledge to keep spending within the 20 percent-of-GDP threshold, Medicaid would have to be reduced by at least 44 percent by 2022.

Romney on Dodd-Frank financial reform:

According to Romney, 122 community and small banks have closed since the Dodd-Frank financial reform law passed in July 2010. Although the exact numbers are difficult to pin down, PolitiFact rated a claim by then-GOP hopeful Newt Gingrich that Dodd-Frank is destroying community banks as “false” in November:

“Gingrich said that community banks ‘are being destroyed by Dodd-Frank.’ But as a whole, they are healthier than a year ago," PolitiFact reported. "No doubt the improvement in the economy has helped, but community banks also have benefited from a reduction in fees paid to the [Federal Deposit Insurance Corp.] as a result of Dodd-Frank. From the point of view of community banks, Dodd-Frank is imperfect and still unfolding. But it has exempted community banks from many new regulations. That said, the shape of the rules to come will make a big difference in its final impact on them. To say that this industry is being destroyed by Dodd-Frank is untrue and unlikely to be true in the future if regulators continue to respond to the concerns of small banks. We rate Gingrich's statement false.”

According to a recent Associated Press story, 43 banks have closed so far in 2012, compared with 73 at the same time last year and 157 in the entire year of 2010.

Obama on premium support:

Obama said Romney’s plan for Medicare—which would eventually give seniors a choice between private insurance and the traditional Medicare plan—would lead to the “collapse” of the federal health program for the elderly, as insurance companies figure out how to cover only healthy, cheaper seniors.

“Every health care economist who looks at it says the traditional health care system will collapse,” Obama said.

That’s not exactly true. While even health economists who back Medicare premium-support plans can’t say the theory would ultimately lead to lower costs for seniors, there are certainly health economists who think the problem of health insurance companies cherry-picking the healthiest seniors could eventually be prevented through regulation.

Romney on energy production on federal lands:

Romney made an oft-repeated GOP claim that energy production is down on federal lands because of Obama administration actions. “All of the increase in natural gas and oil has happened on private land, not on government land,” Romney said.

Romney is both right and wrong, depending on what fossil fuel you’re talking about. Oil production is up 12 percent from 2008 to 2011, according to a March report by the Energy Information Administration that analyzes energy production on public lands. Natural gas production on public lands, however, is down 16.5 percent between 2008 and 2011. Coal production is also down 7.8 percent during the same time period.

Most of the increase in natural gas has been on private lands due to the vast reserves of shale gas found in states like Pennsylvania. Between 2007 and 2011, there was a 30 percent increase in natural-gas production on private lands. Oil production has stayed relatively the same but has increased slightly in the past two years.

Obama on Romney’s economic plan:

Obama made the assertion that "Governor Romney's central economic plan calls for a $5 trillion tax cut—on top of the extension of the Bush tax cuts, that's another $1 trillion.” As Wonkblog’s Ezra Klein points out, that’s only the cost of Romney’s tax plan “if you assume he doesn’t close any tax breaks to pay for it. Romney has said he’ll close tax breaks to pay for all of it--but he hasn’t named any of those tax breaks.” In other words, it’s difficult to call this claim--or Romney’s quick repudiation of it--true or false. Romney insists a guiding principle for his reform plan is that it would be deficit-neutral, while Obama has indicated he will not give Romney credit for offsets he won’t name. Jump ball.

Romney on preexisting conditions:

Romney challenged Obama’s claim that his health care plan lacks an adequate way to get people with preexisting conditions health insurance. Obama said Romney’s plan is what we already have enshrined in law: If you lose your health insurance for a few months but keep health insurance coverage, either through a temporary government-subsidized plan (often called COBRA) or by purchasing a plan on your own, you can’t be denied insurance coverage for having a preexisting condition at your next job, if they offer health insurance. But that protection does not help people who can’t get health insurance through their jobs.

Romney maintained that he does have a plan that “deals” with preexisting conditions. He wants to extend the same protection that people get with employer coverage to Americans who buy insurance on the individual market. In other words, if you lose your job and your health insurance, but maintain temporary coverage, then insurance companies would have to offer you coverage in the individual market. What Romney’s plan doesn’t address (yet) is how that coverage would be affordable. Without regulation, insurance companies could charge thousands and thousands of dollars to cover someone with a preexisting condition, potentially making it unaffordable for anyone but the very wealthy.

Obama on overseas tax credit:

At one point, the candidates sparred over whether business owners can currently take advantage of a tax credit to “send jobs overseas.”

Obama’s claim that such a credit exists is partly true, as PolitiFact found in its investigation of a similar issue last year: Business owners can deduct the costs of closing down U.S. operations as standard business expenses as they move to foreign-based operations.

Romney on education funding:

Romney said he would not cut money for education, a statement that goes against the cuts outlined in running mate Paul Ryan's budget plan, which Romney has supported. If he is going to keep the promise to retain current education funding, he would have to find other places to cut to make up the difference, but he has not offered any ideas of the sort on the campaign trail.

He was responding to an ongoing refrain from the Obama campaign that Pell Grants and college financial aid would be cut under a Romney administration. Obama has also asserted in campaign ads, but not in the debate, that class sizes would increase under Romney due to budget cuts. Romney has said he would trim the inefficiency in the Pell Grant program, which has been interpreted to mean narrowing eligibility—i.e., fewer awards. But Romney has not said that he would cut the amount of the individual awards.

Romney and his plan to create 12 million jobs:

Romney says he will create 12 million new jobs during his first term. The Washington Post examined this claim after Romney’s speech at the Republican National Convention and concluded it “is a fairly safe bet by Romney, even if he has a somewhat fuzzy plan for action.” The Post added that “the number is less impressive than it sounds. This pledge amounts to an average of 250,000 jobs a month, a far cry from the 500,000 jobs a month that Romney claimed would be created in a ‘normal recovery.’ In recent months, the economy has averaged about 150,000 jobs a month.”

Moody’s Analytics expects the economy to gain 12 million jobs by 2016 no matter who wins in November.

Romney on U.S. and Spain:

“Spain—Spain spends 42 percent of their total economy on government. We're now spending 42 percent of our economy on government. I don't want to go down the path to Spain. I want to go down the path of growth that puts Americans to work with more money coming in because they're working,” Romney said.

No one wants to swap financial positions with Spain these days. But is the United States spending as much on government? Pretty much, PolitiFact reports—but that’s not the whole story. While 42 percent is a little higher than the figures provided by the Office of Management and Budget, it’s the same as the measure provided by the Organization of Economic Cooperation and Development; Spain’s government expenditures, according to OECD, are 45.8 percent of its economy.

“Depending on which data set you use, Romney’s numbers are either correct or close. But they don’t tell the whole story. A large share of the spending has come not from the cost of government employees, buildings, and equipment but from transfer payments that individual Americans ultimately control (and, in many cases, under programs which they had paid into to begin with),” PolitiFact said.

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