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Posted at 9:30 AM ET, 09/26/2008

Four Pinocchios for Biden's Tax Fabrication

By Michael Dobbs

John McCain and Sarah Palin "are proposing the largest increase on middle class taxpayers in American history....It will cost the middle class over one trillion dollars in additional taxes. It is almost unbelievable." --Joe Biden campaign rally, Greensburg, PA. September 25, 2008.

Democratic vice presidential hopeful Joe Biden claims that middle class Americans will be slapped with the "largest tax increase in American history" as a result of the McCain health care plan. It is true that McCain has proposed taxing the health-care benefits that Americans receive through their employers. However, Biden conveniently overlooks the fact that the Republican nominee is offering tax-payers a credit that should cover the cost of going out and buying insurance.

The Facts

John McCain wants to drastically overhaul the health insurance system in order to encourage Americans to go out and buy their own health care plans rather than relying on employer-based plans. To achieve this, he plans to tax employer-provided health benefits and provide a $2,500 tax credit ($5,000 for families) toward the cost of health insurance.

By most independent calculations, the McCain plan will leave most taxpayers better off in strictly financial terms, at least until 2013. After 2013, the benefits will begin to diminish. By 2018, taxpayers in the top quintile will be slightly worse off, but middle-income taxpayers will either break even or be slightly ahead. According to the non-partisan Tax Policy Center, the McCain proposals will result in a net benefit of $1,241 to the average tax payer in 2009, $895 in 2013, and $386 in 2018.

"It is not fair to pull out just one part of the McCain proposal," said Eric Toder, a TPC analyst. "It is a package. They are giving back more than they are taking away."

Jason Furman, director of economic policy for the Obama campaign, pointed out that the McCain campaign skips over the tax increase side of the health plan on its website and focuses instead on the tax credit. He also notes that, according to the McCain website, the credit will be paid directly to insurance companies to cover the cost of health insurance rather than to individuals.

This is true, but it is still a tax credit, in whatever manner it is paid. If you are able to buy insurance for less than the cost of the credit, you will be able to deposit the balance in a health savings account, according to the McCain plan.

So how did Biden arrive at the $1 trillion price tag for "middle class" tax payers? Probably from the Office of the Management and Budget which estimates the cost of excluding employer-provided health benefits from tax revenues at $1.05 trillion between 2009 and 2013. Note that this is all taxpayers, not just the "middle class."

It is worth noting that there has been a lot of loose talk about taxes on the campaign trail. The McCain campaign has accused Biden of supporting the "largest tax increase in American history" by voting for a non-binding budget resolution that would phase out the Bush tax cuts of 2001 and 2003. This is nonsense, on several levels. First, the Bush tax cuts are due to be phased out anyway under current law. Second, Obama and Biden favor an extension of the Bush tax cuts for middle and low-income Americans. Third, by any reasonable measure, any tax increases endorsed by Obama or Biden are trivial compared to the huge tax hikes of World War II.

The Tax Policy Center estimates that the repeal of the Bush tax cuts would result in a reduction of after-tax incomes of 4.2 percent, and 2.67 percent for taxpayers in the middle-income quintile. During World War II, by contrast, federal tax revenues ballooned from $8.7 billion to $45.2 billion. Federal taxes as a share of GDP grew from 7.6 percent in 1941 to 20.4 percent in 1945.

The Pinocchio Test

Both campaigns have stretched the truth to the breaking point in describing each other's tax plans. In this particular case, Joe Biden has looked at only the negative side of the balance sheet--and ignored the positive. It is simply not true that the McCain health plan represents the largest "tax increase" in American history.

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By Michael Dobbs  | September 26, 2008; 9:30 AM ET
Categories:  4 Pinocchios, Candidate Watch, Economy, Health  
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Comments

Too little, too late, Dobbs.

Posted by: JakeD | September 26, 2008 9:48 AM | Report abuse

Well, Joe Biden has done it again. He brought up a great point that not many people know about, but he's blown it up so far with hyperbole that most people, upon hearing the truth would be tempted to throw the baby out with the bathwater. As a person who can't afford any health insurance at all because of pre-existing medical conditions, I still gravitate towards Obama, and there's no doubt that his tax plan will benefit me more as a middle-class American. Isn't that enough to say without making it into a choice between salvation and disaster?

Posted by: Jessmezzo | September 26, 2008 10:24 AM | Report abuse

In Biden's defense he did say, "It is almost unbelievable." :)

Posted by: Anonymous | September 26, 2008 10:49 AM | Report abuse

Personally, I like the idea of separating employment from health care. Losing your job shouldn't mean you lose your health care, too.

Currently, it makes zero sense to seek health insurance on your own if your employer provides it, because your employer can give it to you tax-free, but if you buy it yourself, you need to use after-tax dollars. That makes it pretty hard for an individual plan to compete with a group plan.

What McCain is trying to do is at least give folks a fighting chance at getting health insurance on their own if they want to. Personally, I think he's coming at it from the wrong direction. Rather than forcing businesses to pay tax on health benefits, which will pressure businesses to stop offering the benefit, why not allow individuals to purchase health insurance with pretax dollars?

Obama's plan is an off-the-charts failure, of course. Medicare is already in severe crisis. Putting the whole country on Medicare will bankrupt us.

Posted by: Bob | September 26, 2008 10:57 AM | Report abuse

Bob,

It seems that the European nations who have adopted "socialized" healthcare a long time ago are currently doing much better than us economically, and have been economically stable for several years!

Posted by: jessmezzo | September 26, 2008 11:02 AM | Report abuse

It seems that the European nations who have adopted "socialized" healthcare a long time ago are currently doing much better than us economically, and have been economically stable for several years!

Posted by: jessmezzo | September 26, 2008 11:02 AM


Care to support that statement "doing much better than us economically"? Or do you need some Pinocchios, as well?

Posted by: Bob | September 26, 2008 11:05 AM | Report abuse

You folks at WaPo better fall back in line and stop printing the truth about Big O. He is watching and I'm sure he will not be pleased with this article.

Posted by: Chris | September 26, 2008 11:42 AM | Report abuse

"Stand up, Joe! Let 'em see ya! Bless your heart."

Posted by: Stacy | September 26, 2008 11:46 AM | Report abuse

Good thing nobody's paying attention to Biden with all the other stuff that's going on.

Posted by: Miss Representin' | September 26, 2008 11:49 AM | Report abuse

Whether you are a republican or not, how can our country
possibly vote for a man who believes this?

From the two books by these names...

.

From Dreams of My Father: 'I ceased to advertise my
mother's race at the age of 12 or 13, when I began to suspect that by doing
so I was ingratiating myself to whites.'

From Dreams of My Father : 'I found a solace in
nursing a pervasive sense of grievance and animosity against my mother's
race.'

From Dreams of My Father: 'There was something
about him that made me wary, a little too sure of himself, maybe. And
white.'

From Dreams of My Father: 'It remained necessary
to prove which side you were on, to show your loyalty to the black masses,
to strike out and name names.'

From Dreams of My Father: 'I never emulate white
men and brown men whose fates didn't speak to my own. It was into my
father's image, the black man, son of Africa ,( he lies here he has no
african roots) that I'd packed all the
attributes I sought in myself , the attributes of Martin and Malcolm,
DuBois and Mandela.'

And finally the most ALARMING one of them all...

From Audacity of Hope: 'I will stand with the
Muslims should the political winds shift in an ugly direction.'

We CANNOT have someone with this type of
mentality running our great nation! I don't care whether you're a Democrat,
Republican or an Independent; We cannot elect this man into the most
powerful position in the United States of America...President.

Posted by: Jennifer | September 26, 2008 11:52 AM | Report abuse

Employer-sponsored health insurance is already in great trouble, and this proposal will further weaken it. A young healthy person -- or an unhealthy broke risk taker -- will drop the employer plan rather than pay the employee contribution [as at present] plus the tax hit on the employer cost [as proposed]. This exit of young and healthy will drive up the employer cost and the remaining employee contributions. Any employers who drop their now-less-popular plan will push the employees and families into the individual market and I challenge anyone to find good individual coverage for $5,000 per family.

Posted by: Peter 10024 | September 26, 2008 11:58 AM | Report abuse

Almost all countries with socialized medicine have higher unemployement as well as much longer wait times for medical treatment than the US, don't let propoganda films like Sicko misinform you.

The French health system is in crisis due to lack of funds, and the British system faces huge wait times which has led to medical vacations, where people who are able to actually leave the coutry for timely treatment.

I live in Canada and for anything over a routine clinic visit (runny nose, sprained ankle, that kind of thing) the waiting lists is measured in months and even years, not hours or days like in most US cities. The province of Ontario even has a wait time website set up so you can check just how long it will take to get any type of treatment.

Fully socialized medicine is not the answer, though I'm also not a big fan of 100% user pay systems like in the US either.

Posted by: Bic | September 26, 2008 11:59 AM | Report abuse

"The McCain campaign has accused Biden of supporting the "largest tax increase in American history" by voting for a non-binding budget resolution that would phase out the Bush tax cuts of 2001 and 2003. This is nonsense, on several levels."

hmm - when you reported on this w/ reference to Mr. Obama last week, you gave the McCain campaign 1 pinocchio for being "misleading". In fairness, that bit about "largest ... in history" was not part of the claim then. I guess that makes all the difference between a 4-point "fabrication" and a 1-point "misleading". Still, as long as the karmic balance is restored, right? Got to make sure that equivalence is maintained, and you've been making the Raving Right awfully unhappy lately.

Posted by: Anonymous | September 26, 2008 12:01 PM | Report abuse

Biden has sunk to a new low, even for him.

Posted by: thinkwithyourbrain | September 26, 2008 12:05 PM | Report abuse

And finally the most ALARMING one of them all...

From Audacity of Hope: 'I will stand with the Muslims should the political winds shift in an ugly direction.'

Posted by: Jennifer | September 26, 2008 11:52 AM


Jennifer, that's Four Pinocchios for you. Why sink to the Democrats' level of nastiness and deliberate deception? As Republicans, we stand for the truth.

Your "quote" is referring to a passage in his book where Obama says that if the US should round up all Muslims into internment camps as we did with the Japanese during WWII, Obama would stand up for the Muslims. Any reasonable person would do the same.

Here is the complete quote in context: "Of course, not all my conversations in immigrant communities follow this easy pattern. In the wake of 9/11, my meetings with Arab and Pakistani Americans, for example, have a more urgent quality, for the stories of detentions and FBI questioning and hard stares from neighbors have shaken their sense of security and belonging. They have been reminded that the history of immigration in this country has a dark underbelly; they need specific assurances that their citizenship really means something, that America has learned the right lessons from the Japanese internments during World War II, and that I will stand with them should the political winds shift in an ugly direction."

Posted by: Bob | September 26, 2008 12:06 PM | Report abuse

I have to agree with Bob up there, about questioning the touted benefits of socialized medicine.

Just recently, for example, socialized medicine in Japan has lead the country to start monitoring peoples' weight and fining them for continuing to be overweight. England has begun to question whether people should be allowed NOT to donate their organs when they die. There are year-long wait lists in Canada for those who need surgery. Look at the microcosm of our VA healthcare system: it's terrible. You are at the mercy of a system that a) doesn't see you as a paying consumer - just one who consumes, b) doesn't care about the fact that you have two jobs, and maybe kids, but if you don't get to that appointment they scheduled, you'll have to wait another couple of months before they can see you - for a routine check up.

Honestly, if you subsidize it, you will get more demand for it... why is this so hard to understand? There's no guarantees on quality or availability, and nor should there be! It should be left up to individuals how they spend their money, and how they care for themselves. I thought that's what adults did: learn how to spend wisely by doing their own research, and taking care of themselves, not whining to the federal govt when they don't feel like doing either....

With regard to the gentleman who asserted that Europeans are economically better off than Americans: You really think what they save not directly paying for healthcare goes back into their pocket? No, it has to go to the govt for taxes to pay for said healthcare. High income taxes make owning property nigh impossible, let alone trying to legally start your own business. It's horrendous and it shows no sign of getting better any time soon.

Posted by: Jen | September 26, 2008 12:32 PM | Report abuse

To Bob,
You said "Rather than forcing businesses to pay tax on health benefits, which will pressure businesses to stop offering the benefit, why not allow individuals to purchase health insurance with pretax dollars?"

Employees already purchasse health care through employers with pretax dollars, but most of us pay only a small percentage of the actual cost, with employers picking up the tab for the rest. If I had to pay the full cost of my insurance, I couldn't afford it.

Posted by: Anonymous | September 26, 2008 12:36 PM | Report abuse

I think the four Pinocchio's for this string of Biden lies is a little low. He's just straight up making things up to slander McCain with.

Posted by: Cory | September 26, 2008 12:44 PM | Report abuse

At my place of employment, all family plans are $1200+/month. Employees pay $70/month ($840/year). My taxable income would increase $14000 under the McCain plan. There are people here whose taxable salaries would double. So it sounds like the tax credit would pay $840 to the insurance company, but how would we get the balance of the $5000 out of a health account? With taxing the employer premiums, my taxes would increase by more than I would get back. People with good health insurance, low and middle and high income, could end up paying more in taxes under the McCain plan.

Posted by: Anonymous | September 26, 2008 12:49 PM | Report abuse

Since you are essentially faulting Biden for not giving complete context to a true statement it is worth considering the ways in which your analysis distorts the overall picture as well. Independent reviews of McCain's plan from a health care perspective have determined that the immediate effect of his plan would be to shift 20 million people from group employer plans to individual plans. These individual plans will provide far worse coverage for similar premiums. Examining just the tax policy angle and thus implying that people will be better off distorts the picture just as much as Biden's lack of context.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.6.w472

Posted by: Anonymous | September 26, 2008 12:53 PM | Report abuse

"Too little, too late, Dobbs."

From Comment #1. Can't see how it's either too little OR too late.

Posted by: Mister Snitch | September 26, 2008 1:02 PM | Report abuse

But ... the McCain plan would dramatically increase my taxes. I'll walk through this so everyone can follow along and correct my math if I'm mistaken.

I pay a premium of $310 a month to cover my wife, my toddler and me. (That includes dental, medical, Rx, vision.) My wife is a student, so this is the only coverage we have.

The company I work for is self-insured, so there's no direct accounting on what they pay for my insurance. But to continue our current coverage under COBRA would cost $1,319.55 a month. If that is used to calculate employer contribution, that would mean $1,009.55 a month in counted income.

That's $12,114.60 more a year in gross taxable income. Even after a $5,000 tax credit, that leaves me with $7,114.60 increase in taxable income.

For the record, I'm paid just less than $35,000 a year.

Can someone tell me how McCain's plan would make me better off?

Posted by: Will | September 26, 2008 1:16 PM | Report abuse

Those of you who like the idea of European socialised health care should try it.
The government's and doctor's spending priorities are not necessarily those of the patient who depends on a socialised health system.

Posted by: David in UK | September 26, 2008 1:16 PM | Report abuse

The McCain plan is horrible!! I'm an insurance agent and right now about 20-30% of the individuals trying to buy health insurance get declined by the insurance company!! Non exaggerated Examples: Diabetic? Automatic DECLINE OR Take meds for both high cholesterol and high blood pressure? Automatic DECLINE!! Have allergies? Condition won't be covered. Taking away the pretax benefit at an employer should be a crime right now! It is going to make the state of our health care system much worse. More people won't be able to afford or get coverage. This is REALLY scary to me as a person working in the front lines of the industry industry.

Posted by: Yara | September 26, 2008 1:18 PM | Report abuse

This is REALLY scary to me as a person working in the front lines of the industry industry.

Posted by: Yara | September 26, 2008 1:18 PM


Do you really think universal health care is going to help you sell more insurance policies, Yara?

I've dealt with a lot of insurance salespeople. Once you finally locate one who was blessed with two or more brain cells, you never let that person get away. Wouldn't you say so, Yara?

Posted by: Bob | September 26, 2008 1:25 PM | Report abuse

Trying to equate Biden's misquote with McSame's campaign of lies, distortions, smears and swift boating is like comparing a mole hill to a mountain.

There is no comparison, McSame is the greatest liar presidential candidate of all time!

He even lied about putting his campaign on hold yesterday and then he tried to take credit for the bailout bill.

Posted by: KEVIN SCHMIDT | September 26, 2008 1:27 PM | Report abuse

I'd like to see any of these morons explain to me how exactly we're going to force doctors into socialized medicine pay schemes. Or, are we just expecting an entire career to just go down the socialist highway. What about paying their student loans off when their salaries get capped. People proposing socialized medicine have never been in the system. I have. It sucks.

Posted by: R Nielsen | September 26, 2008 1:37 PM | Report abuse

And this 2008 Presidential Election Weekly Poll says it all.
You Won't Believe These Results!

http://www.votenic.com

Also, voice your opinion on the $700,000,000,000 Bailout!

Posted by: egrecal | September 26, 2008 1:41 PM | Report abuse

I'm dumbfounded....Dobbs finally called out the Obama/Biden campaign for one of their multitude of lies and misstatments?

And I just heard CNN this morning do one of their fact-checks on Obama's position on the Iraq surge, and rule in McCain's favor.

What on earth is happening....it's like we are living in Seinfeld's "bizzaro world". Liberal press actually reporting truth.....who would have thought it possible.

By the way, that brings the WaPo Fact-Checker since end of June up to:
- 14 against McCain/Palin
- 5 against Obama/Biden
- 3 neutral

That's about as balanced as you can expect from the Post, so I'm happy.

Posted by: dbw | September 26, 2008 1:43 PM | Report abuse

"But to continue our current coverage under COBRA would cost $1,319.55 a month. If that is used to calculate employer contribution, that would mean $1,009.55 a month in counted income.

That's $12,114.60 more a year in gross taxable income. Even after a $5,000 tax credit, that leaves me with $7,114.60 increase in taxable income."

Will, you are confusing a tax credit with a tax deduction. A tax credit comes directly off of your tax bill. So if you had an additional $12,000 in income and had a marginal tax rate of 30% (although in your tax bracket it would be much lower), you would pay an additional $3,600 in federal income taxes, but receive a $5,000 credit, leaving you with $1,400 to put into a health savings account, and use towards deductibles, prescriptions, orthodontics, etc. At $35,000 in income for a married couple, I believe the marginal tax rate is 15%, so the tax credit could save you ~$3,000 per year.

Posted by: Mark | September 26, 2008 1:52 PM | Report abuse

Yes, we need more of an ownership society because that is going so f'in well. I don't care what Biden said, this plan is BS. This election is a joke and it's embarassing for all of us. If McCain comes out with a midget clown riding a unicycle tonight, I won't be surprised. Maybe our country deserves the GOP to teach it a tough lesson about voting for policy over "personal stories." I imagine a few bread lines and economic collapse may do it.

Posted by: WTF | September 26, 2008 2:03 PM | Report abuse

Re:

I'd like to see any of these morons explain to me how exactly we're going to force doctors into socialized medicine pay schemes. Or, are we just expecting an entire career to just go down the socialist highway. What about paying their student loans off when their salaries get capped. People proposing socialized medicine have never been in the system. I have. It sucks.

Posted by: R Nielsen | September 26, 2008 1:37 PM

---------------------------------------

That's actually very simple, and something I would like to see implemented for Medicaid, right now. "You want to be licensed to practice Medicine in this state. OK, you need to accept 10% of your patients from the Medicaid list."

Expand that to the National level, and it works very well (although you may want to up it to at least 50% National insurance, at most 50% private patients.

Posted by: SourPuss | September 26, 2008 2:04 PM | Report abuse

That's actually very simple, and something I would like to see implemented for Medicaid, right now. "You want to be licensed to practice Medicine in this state. OK, you need to accept 10% of your patients from the Medicaid list."

Expand that to the National level, and it works very well (although you may want to up it to at least 50% National insurance, at most 50% private patients.

Posted by: SourPuss | September 26, 2008 2:04 PM


You have obviously never heard of the AMA.

Posted by: Bob | September 26, 2008 2:12 PM | Report abuse

One thing we need to keep in mind is that the government does not make money. The goverment takes money, and then pays it back to the people it takes it from in the form of benefits. The only problem is they are not very effective in doing this. Why don't they just cut everyones taxes and let them do what they want with thier money? We never even had income tax before the second world war.

Posted by: Frank | September 26, 2008 2:14 PM | Report abuse

Mark:

As a financial analyst, I appreciated your helpful input on the true tax benefit of McCain's health care proposal. But I've found that concepts like "facts" and "math" are lost on most Obama supporters.

I mean, how else do folks reason supporting a candidate who says he can close reduce the deficit and implement $500B in new spending programs, all while reducing federal revenues $200B by giving "95% of Americans" a tax cut?

Any economist or thinking person knows all of his promises can't hold up.....but that doesn't stop a whole hoard of willfully-blind people from following the Pied Piper.

Posted by: dbw | September 26, 2008 2:19 PM | Report abuse

Mark,

Thanks.

Posted by: Will | September 26, 2008 2:36 PM | Report abuse

The 4 pinocchios are way off base. Many analysts have said that McCain's health care plan may work for younger healthier people but will leave older or sicker people to have to try to find insurance which will cover less and be more expensive. With medical costs rising faster than the rate of inflation, and the credit being tied to the rate of inflation, costs will overwhelm people. Many independent sources have said by discouraging employer sponsored insurance, and taxing it as salary, the result over the next few years is an additional 5 million uninsured. This health care plan is a disaster in the making. Privatizing everything is like deregulation... it's a conservative idea that doesn't work for the masses.

Posted by: KEC | September 26, 2008 2:56 PM | Report abuse

It may be fair to call this DECEPTIVE, but it's certainly not an outright lie.

McCain's plan represents AN ENORMOUS TAX INCREASE that is PARTIALLY OFFSET by tax credits.

Biden is not lying when he says it's a huge tax increase -- he's just not giving the full context.

The full context, of course, is that it ultimately means people won't pay that much more into the federal government but will pay far, far more to insurance companies.

Posted by: Seth | September 26, 2008 3:02 PM | Report abuse

Compared to McCain's rush to D.C. on the premise of "country first to help the bailout," Biden's exaggeration is no biggie.
Employment and health insurance should not be tied together.

Lastly, if McCain is elected the Bush tax cuts for the rich will stick like Krazy Glue, and the middle class will again be overtaxed.

Posted by: JaneB3 | September 26, 2008 3:19 PM | Report abuse

This was one of the more informative less insulting boards I've read on the WaPo site. I have to admit I stink at math and so much of it came to be very confusing about whether I would be better or worse financially by the McCain plan, but one thing I do believe is those who've had first hand experience with socialized medicine including many of my close friends who live in Europe and Japan. I certainly don't want to go to that kind of healthcare system.

Also, I admit I'm not the most knowledable about the next thing I'm about to ask, but isn't it the Congress who will basically decide MOST of the platforms the candidates are campaigning on, taxes, healthcare, oil, trades, etc.? The Presidents will be able to "promote" their ideas for these areas, but isn't it the Congress who will make the final decisions, even to the point of being able to veto the President if THEY don't like his decisions? So basically, even though our choice for President is important, we should be even more concerned about the people we've put into office for the Congress.

Posted by: InaConundrum | September 26, 2008 3:38 PM | Report abuse

Since there is no analysis here I can't be sure Biden is mis-representing the effects. I don't see anything here that addresses the effect of insurance costs being part of your income under the McCain plan, depending on what you pay out that could put you in a higher tax bracket. Even if it doesn't you will pay more taxes. A paltry $2500 a year may cover the increased taxes or it may not. But it goes down over time too.

I give the WP 4 Pinocchios for not doing a proper analysis and failing to deliver information on both sides of the debate over the plan.

Here is an analysis that fully supports Biden's contention: http://wonkroom.thinkprogress.org/wp-content/uploads/2008/07/health_taxes21.pdf

Posted by: datdamwuf | September 26, 2008 3:44 PM | Report abuse

As we enter the polling booth ... it is simple ... we forget the SPIN and remember the last 8 years ... I think as an Indepenedent the Democrats showed great respect to the office of the President by approving his initiatives at guiding them into a War in Iraq and in no small irony the Wall Street Bail Out. This Administration sunk Hillary Clinton's chances at being President by the deception and poor judgment getting into the war. And, we see the same thing being attempted by this recent crisis of mis-management ... Suck the Democrat into a hole that the Bush Administration has created. The subprime loans and mortgages and easy borrowing was like paying for votes in the 2004 elections. Are we better off that we were 8 years ago? The answer is NO NO NO ... let the Republicans SPIN SPIN SPIN. The American people are not fools.

Posted by: amitchell13 | September 26, 2008 4:30 PM | Report abuse

In response to Bob:

"Personally, I like the idea of separating employment from health care. Losing your job shouldn't mean you lose your health care, too. "

Just because you lose your job doesn't mean you lose you benefits. You have the option to continue you benefits (under COBRA), but you must pay the entire premium, instead of just the employee portion.

Posted by: Jeffinseatown | September 26, 2008 4:39 PM | Report abuse

The author of this Fact Check seems to think the average American would spend less than $2,500 per year if they bought private healthcare insurance. Where is the fact-check on this figure? My COBRA plan here in Washington state - for perfectly healthy 35-year-old - was $600 a month! I looked into a plan for my parents -- also very healthy, $550/month for each of them! Each American would pay another 5 grand out of pocket after their "tax credit" was given to the insurance companies. Just another big government payout to corporations. No thanks, McCain.

Posted by: Rachel | September 26, 2008 4:52 PM | Report abuse

You have to be making enough money to make a tax credit viable. $5000 isn't going to do a thing for some poor schmuck and his family making a poverty level living. McC (and apparently Fact Checker)doesn't seem to realize that there are a lot of working people that no matter how much tax credit you give them, they aren't going to be able to afford health insurance. That's like Walmart offering their workers health insurance they can't afford because Walmart doesn't pay them enough to even afford the least expensive plan.

Posted by: lynne | September 26, 2008 8:31 PM | Report abuse

It's funny, (off-topic, but...) a lot of people tend to demonize Walmart because of its large-format retail operation, but really, Borders Books and Music, and Barnes & Noble both pay less starting than Walmart does on average...but no one goes after liberal-owned booksellers... interesting. What kind of healthcare and benefits plan do they carry...?

Posted by: Jen | September 27, 2008 2:39 AM | Report abuse

Here's what I don't get about McCain's health-care/tax plan.

First of all, why link all this stuff together into such a tangled, complicated mess? It seems really stupid to tax something that's not currently taxed and then give people a credit to compensate them.

Second, if the Republicans are allegedly free-market champions, why do they need to use the tax code to incent particular behaviors (i.e. get rid of employer-paid medical insurance)?

Third, I can't believe that any real-world analysis of this plan didn't show that the net effect will be that people who have decent insurance now (funded by their employer) will have much worse coverage when they have to buy it themselves.

Posted by: Doug Chance | September 27, 2008 4:30 AM | Report abuse

Here's a quote from the McCain web page that describes the plan: "Those obtaining innovative insurance that costs less than the credit..."

Call me paranoid, but their use of the word "innovative" to describe insurance that costs less than the credit is a dead giveaway that the know the credit is too low for someone to get reasonable coverage.

I'm a little slow, but I think I figured out the overriding answer to the questions I asked in a previous comment: This plan is designed to benefit businesses, not citizens.

Posted by: Doug Chance | September 27, 2008 4:36 AM | Report abuse

Dobbs is still hacking away for McCain.

It would be helpful if Mr. (hack-hack) Dobbs would give the citation, including the page number, when referring to some fact or statistic. Dobbs has a propensity to give extra truthiness credit to McCain's explanations and give demerits to equivalent Obama-supporter explanations. The +1 Pinocchio if Democrat/-1 P if GOP unspoken modification to the "Rating Scale" is still in effect.


Dobb's quibble about "middle class".

Employer provided health care is predominantly given to "the middle class" -- people who work and get salary and who make a living wage. Those who don't get covered by work may 1) not be employed, 2) are part-time or hourly (which may not make them "not middle class" but removes them from the tax calculations of OMB) 3) are uninsured or 4) are covered by Government programs -- too poor (medicaid) or too old (medicare).

EPHC is dispensed to employees. Health care is therefore, a "per head" cost to employers. The executive will not get a higher cost medical plan ("Golly Ed, since you're a Senior Vice President we think your cancer treatments should be covered, unlike poor Joe in the mailroom." That's not how health care costs are done in employer provided plans.)

If you are covered at work you are covered at work regardless of income. This is still a predominantly middle class benefit.

The number of "not-middle-class employees" is quite small proportion of the total middle class population which is covered. It is small enough to ignore.

Posted by: ftfc | September 27, 2008 11:11 AM | Report abuse

Dobbs is still hacking away for McCain.

It would be helpful if Mr. (hack-hack) Dobbs would give the citation, including the page number, when referring to some fact or statistic. Dobbs has a propensity to give extra truthiness credit to McCain's explanations and give demerits to equivalent Obama-supporter explanations. The +1 Pinocchio if Democrat/-1 P if GOP unspoken modification to the "Rating Scale" is still in effect.


TPC estimates that McCain's tax credit instead of employer deduction would "increase the deficit by $1.3 trillion over 10 years".

Will McCain cut spending by that amount? Mr Dobbs does not address this, but the facts are that UNLESS McCain cuts spending (and it's not shown in his plans) the extra deficit will be a tax increase (although Republicans usually push the tax increase out a generation by deficit spending rather than paying for it.)

The other key Dobbs distortion is "the fact [sic] that the Republican nominee is offering tax-payers a credit that should cover the cost of going out and buying insurance."

Could we get any proof for the assertion of availability of health coverage at the prices equivalent to the tax credit (plus employee contribution)?

As a prior couple of insurance-savvy commenters have noted, consumers are usually not able to purchase the equivalent coverage at affordable prices. Insurance companies are expert at defining "pre-existing conditions" and denying coverage to individuals with claims after years of premium payments.

If consumers cannot get equivalent to employer provided coverage at equivalent prices then the gap between what the tax credit will cover and the costs to the consumer is the equivalent of a new "tax".

Another wonderful item is the timing of the receipt of money. The monthly payments must be paid MONTHLY or else there is NO COVERAGE. The tax credit comes once a year in April or May or June with the tax refund -- too late to be spent on the prior 11 month payments. If you're having cash flow problems it might be possible to put it on the credit card at 18 percent interest.

Posted by: ftfc | September 27, 2008 11:51 AM | Report abuse

Why is this so hard to comprehend? McCain wants the PEOPLE to decide their health coverage instead of the employer and THEIR agent. Some of you may not be bright enough to do that, but I am. Plus, COBRA doesn't work forever ... and only IF the employer approves you staying on it. Law or no law I saw a friend with HIV get refused for COBRA and then couldn't get coverage. The Dems only want employer paid insurance to "protect" the Union thugs. Wake up.

Posted by: Jim | September 27, 2008 5:25 PM | Report abuse

Here is the introductory/summary text from the Tax Policy Center.
Quote "Although both candidates have at times stressed fiscal responsibility, their specific non-health tax proposals would reduce tax revenues by an estimated $4.2 trillion (McCain) and $2.8 trillion (Obama) over the next 10 years"

Reduced tax revenues mean increased deficit. McCain's plan raises the deficit $1 trillion more then Obama.

Oh yeah and on middle class tax relief from the same source cited (Update September 15th document)by the Michael Dobbs....

Quote
The Obama plan would reduce taxes for low- and moderate-income families, but raise them significantly for high-bracket taxpayers (see Figure 2). By 2012, middle-income taxpayers would see their after-tax income rise by about 5 percent, or nearly $2,200 annually. Those in the top 1 percent would face a $19,000 average tax increase—a 1.5 percent reduction in after-tax income.

McCain would lift after-tax incomes an average of about 3 percent, or $1,400 annually, for middle-income taxpayers by 2012. But, in sharp contrast to Obama, he would cut taxes for those in the top 1% by more than $125,000, raising their after-tax income an average 9.5 percent.
....

So if you're in the middle class Obama's plan provides a tax rebate $700 greater then McCain's.

http://www.taxpolicycenter.org/publications/url.cfm?ID=411741

I really wish so called journalist would actually learn how to read before they write.

Posted by: rich | September 27, 2008 5:43 PM | Report abuse

There is no way a family can get decent insurance for $5,000 a year. Apparently none of the fact checkers have ever tried to buy health insurance.

McCain allows the insurance companies to have exclusions for pre-existing conditions. As someone that has tried to buy insurance with minor health issues, allergies, GERD, it would cost me a minimum of $1,000 per month with a high deductible.

I have friends that are buying their own insurance, which is really catastrophic insurance. The do not get preventative health care and have to be very sick before they got to a doctor because of the high deductibles.

Fact checkers should do pretend request for health insurance with people of different ages and health conditions to be able to adequately analyze McCain's plan.

Obama has repeated stated that he wanted to model health insurance using the current federal employee plan, which includes Congress.

http://www.opm.gov/insure/HEALTH/index.asp

Posted by: Jim | September 27, 2008 6:40 PM | Report abuse

No one has yet brought up the fact that the tax credit,which will not be effective as most everyone has pointed out- most w/o health care are at or near poverty level, is only going to be for those who DO NOT already have employer provided or other private health insurance plans. That means if you have your health insurance through your employer, live in a suburb of Boston like I do, pay $16,000 per year for health care, the full 16,000 is added as taxable income with NO offsetting credit. I ran the numbers w/ a credit for fun, and still came out a few dollars behind!

The article is right here:http://www.cnn.com/2008/POLITICS/04/29/mccain.healthcare/index.html

This is not a lie or misrepresentation at all by Biden. The facts on McCains plan are well known because Bush has been advocating it since January 2007. Pinnochios?? Give me a break, how about some pinnochios for McCain's claim that Obama's plan is government run last night, which no one called him on??

Posted by: Greg | September 27, 2008 11:09 PM | Report abuse

There is an assumption behind some of the scenarios that people are using in this context about tax credit that is false.

If an employer decides to drop health care coverage for employees because it is now taxable and not a expense deduction/tax crdit for business, why would an employer decide to give the employees a raise to compensate? They are under no pressure to do and most probably would not.

Now as an employee, my $9000 yearly medical benefit contribution for a full ocverage medical plan is going to rise to $13,000/year which is family coverage with a $2500 deductible with a 80/20 copayment split through Blue Cross in North Carolina. My marginal tax rate is about 22% which means now I have an additional tax payable of $2000 for the year. A $5000 tax credit will be reduced to $3000. But now I have a $2500 annual deductible which if you have a family can be easily met in the course of the year through normal checkups and the routine visits for injuries and illness along with the medications. After the deductible is met, then it is 80/20 split.

So at the end, I am no better off and perhaps worst off as I have to make decisions on whether or not to take my child to the doctor for a suspected illness and if I suffer a sprain or injury, just try to work through it.

Another factor that people seem to overlook is that the concept of insurance is to spread risk across a large group of policy holders. As individuals we have a lot less power negotiating rates than through a group managed by an employer. As well, as a member of a group, it would be highly unlikely that we would be dropped capriciously by a health insurer than if we are are buying policies as individuals.

Posted by: NCBrian | September 27, 2008 11:13 PM | Report abuse

HEALTH INSURANCE IS NOT A RIGHT! HEALTH INSURANCE SHOULD BE EARNED!!!! HEALTH INSURANCE IS NOT A RIGHT!! HEALTH INSURANCE SHOULD BE EARNED!!!!

GOVT. HEALTH INSURANCE...THEN I WANT GOVT LIFE INSURANCE, GOVT TAX INSURANCE, GOVT CAR INSURANCE, GOVT GOVERNMENT IGNORANCE INSURANCE,....When is enough enough??

All in favor of GOVT Health Insurance, MOVE TO F'N CANADA! I work to hard running MY BUSINESS to have to pay for crack heads, hookers, lazy POS, JERKS WHO GET AIDS, etc.... "benefits"!!

Posted by: Mike W | September 27, 2008 11:16 PM | Report abuse

The AP just reported that an individual pays an average of $4704 a year for health coverage. McCain is "offering" $2500. Through my employer I pay $750 a year currently for coverage.

Under McCain's plan this means that if I pick up this average health plan and get his "credit" I will be paying almost triple what I currently pay for health care.

As a worker I do not support this plan. That is a huge increase on me. Maybe Biden is exaggerating the macro economics of the McCain plan but the fact is that McCain will be taking money out of the pockets of the middle class.

Posted by: Santos | September 28, 2008 12:14 AM | Report abuse

Let's see -- there is credible support for the figure Biden used, but some nuance as to its meaning.

This deserves four pinocchios?

Truth-checking is not a zero-sum game. You don't have to ding the Democrats every time you catch the Republicans making stuff up.

This pathetic charade of even-handedness betrays the very purpose of the Fourth Estate.

Posted by: Helen | September 28, 2008 2:02 PM | Report abuse

The comments Posted by: Jennifer | September 26, 2008 11:52 AM are FALSE and will forwarded to www.stopthesmears.com.

Snopes has debunked each one at www.snopes.com/politics/obama/ownwords.asp

Shame on you Jennifer - 4 pinocchios to you.


Posted by: Tooeighty | September 29, 2008 6:07 PM | Report abuse

The comments Posted by: Jennifer | September 26, 2008 11:52 AM are FALSE and will forwarded to www.stopthesmears.com.

Snopes has debunked each one at www.snopes.com/politics/obama/ownwords.asp

Shame on you Jennifer - 4 pinocchios to you.


Posted by: Tooeighty | September 29, 2008 6:08 PM | Report abuse

In watching the debate on Friday I saw nothing but deceit in McCain. I saw him make accusations and tried to talk over Obama when Obama tried to correct him or challange him on his accusation. I see a man that clearly show any means nessasary to win this election. Now, I don't know if you guys remember in the beginning of his(McCain) campain that Obama had no experience but turn around and pick The Govenor of Akaska as his running mate who was priviously in a beauty compatition to become his running mate. How is he going to sing about Obama having no experience when we know clearly that this woman has less experience than Obama does? This is clearly a deceptive move for him to try and pull more female votes (white and Black women)and also because of her looks, men too. This little tactic is going to back fire. During the debate all he could talked about is all those years of experiences that he have, but he failed to mention that up into the beginning of his campaign he severed is ties from the Bush Administration. Bush was the only President in history fail to show up in support of his parties next potentual president but congradulated him via satalite. Any person that is truly for the American people would vote for the American welfare and not vote for a man because they refuse to let a black man in office. People did a very stupid thing in putting Bush back in office for a second term, Please people, open up your heart and mind in the true interest of the American People! Also people, they continue talk about his experinces that he suffort while in captivaty, these experiences have to have a profound damage to his mental ability to run this Country. What if he start having flashbacks of his experience while being a POW? There is no way a person could come home with a sound mind after that. He siad that he finaly broke to come home, now America I do not knock him for finally breaking because I Would probably broke way before he did. For this I truly believe is truly a hero.America,would you take a chance on this because of your personal reasons? I hope not.I truly hope that I get some one out there to see what I see in this man.

God Bless

MS. Glenda F. Stanley

Posted by: Glenda F. S tanley | September 29, 2008 8:18 PM | Report abuse

In your article "Taxing Promises" you give McCain 1 Pinocchio for distorting Obama's position on Taxes. When you review the same claim by Biden, you give him 4.

How do you justify such a large disparity in ratings for nearly identical distortions? Or do your decisions just blow whichever way your editors think public opinion is blowing?

Posted by: Fact Wrecker | September 30, 2008 6:55 PM | Report abuse

Please do not let the DMV run my health care!!!!!!!!! I would rather die with no health care than have the likes of people in Washington looking after my kids.

Posted by: Wayne | September 30, 2008 10:18 PM | Report abuse

http://4thoffense.com/mc.html

McCain claims to have cosponsored legislation to regulate Fannie Mae and Freddie Mac but the Democrat minority in the Senate in 2006 blocked him.

This is another McCain campaign LIE.

John McCain sponsored this bill TEN MONTHS after it died in committee and more a year and a half after it was first submitted. He did NOTHING to revive the bill and is using this as an excuse for his efforts at regulation. This man has no shame.

Check out http://thomas.loc.gov and sarch for the bill S.190 for the 109th congress. There are 3 cosponsors. Two of them were real and one was fake.

COSPONSORS(3)
Sen Dole, Elizabeth [NC] - 1/26/2005
Sen Sununu, John E. [NH] - 1/26/2005
Sen McCain, John [AZ] - 5/25/2006

http://4thoffense.com/mc.html

Posted by: Stop Lying, McCain! | October 1, 2008 10:24 AM | Report abuse

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Posted by: 7kvdi57cuv | October 1, 2008 11:09 AM | Report abuse

I think Biden is right. McCain's healthcare "plan" will result in a huge tax increase, since it makes employer provided health-care taxable income to the employee AND will undoubtedly accelerate the already outrageous inflation in healthcare costs.

Posted by: mnjam | October 1, 2008 11:32 AM | Report abuse

Democrats for John McCain and Sarah Palin in 2008

Posted by: Julie | October 1, 2008 1:59 PM | Report abuse

I have a problem with the idea of purchasing my own health care. I've investigated private purchase and the cost is astronomical. Normally, insurance companies can negotiate better premiums when they know they are insuring large groups of people, as with company insurance plans. I have excellent coverage for my family, through my place of work, and it costs $12,ooo a year....$5,000 to cover my family won't get me very far. Companies employ individuals to wade through the medical insurance plans and contracts because they are so difficult to decifer. If I had to do all of that myself, it would frustrate me to no end. I want good insurance that covers all preventive care as I get older. I don't want to fight for preventive care and necessary tests.

Posted by: CJ | October 2, 2008 2:19 PM | Report abuse

The Post is way of base here. Joe Biden is dead right. The purpose of McCain's plan is to kill employer sponsored health plans. The cost of my employer provided plan (Blue Cross) is $12,000 per year. My employers contributes $9,000 of that premium. I pay $3000. If my employer drops the plan as McCain's policy will force them to do and it is replaced by a $5000 tax cut then that leaves me $4,000 in the hole. My net income is only $18,000 now. A hit of that magnitude will be devastating. I cannot afford McCain. He is only for the rich. Biden is right and you are wrong.

Posted by: James Bowen | October 3, 2008 12:10 PM | Report abuse

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