Fact Checking the Fact Checkers: The Washington Post Gets its Pinocchios Dead Wrong on Biden, Palin and Health Care

As a policy wonk who has long been involved in presidential campaigns, I greatly appreciate the role that independent fact checkers play in keeping all the candidates on the facts and keeping the debate focused on the issues. In general, you can count me as a fan of the work that Michael Dobbs and the Washington Post do with their already famous "Pinocchio" rating. But their awarding of two "Pinocchios" -- for "significant omissions or exaggerations" -- to Joe Biden for his health care exchange with Governor Palin in last night's debate was just plain off the mark.

Full disclosure: I advise the Obama campaign and in that role had a chance to offer my two cents to Senator Biden's team in preparation for last Thursday's debate. But the facts below make clear that from any perspective, Senator Biden was precise and accurate in his statements Thursday night. In fact, while the Washington Post unfairly criticizes Joe Biden, they remain inexplicably silent over the repeated and significant omissions from Governor Palin and John McCain on their health care plan.

Let's start at the beginning. The McCain health plan calls for completely eliminating the current tax exemption for employer-provided health care. Viewed alone, it would raise as much as $3.6 trillion in tax revenues. Yet, the McCain plan uses the revenues to provide a $5,000 tax credit for families and a $2,500 credit for singles as a replacement for the current exemption. The McCain team has consistently argued -- and Sarah Palin last night reinforced -- that their plan is "budget" or "revenue" neutral.

As with any revenue neutral tax reform, the McCain plan creates both a group that benefit and another group that would be worse off. While virtually every American would be better off with the Obama plan as opposed to the McCain plan, it is the case that there are some -- such as young, healthy and currently uninsured workers -- who would be better off under the McCain plan than under the status quo. The fact that a tax reform proposal leaves some people worse off should not, of course, automatically doom the idea. But it is fair to ask those making such proposals to be transparent and clear about its impact. Unfortunately, during the entire campaign the McCain-Palin ticket has gotten away with describing only the sugar in their plan and never the medicine. Even when pressed, Senator McCain tries to suggest that those paying higher taxes would just be the well-off with "Cadillac plans." But the truth is that even in the short run, his plan would likely raise taxes on millions of middle class families who live in high-cost areas or who negotiated to give up higher wages for good insurance with low deductibles and co-payments. Virtually every analysis shows that over time, health inflation will move millions and millions more middle class families into the 'tax increase' category.

There is another downside to the McCain plan that even its serious advocates should acknowledge. If you end the tax exemption for workers for health care provided by their employer, it becomes less attractive for employers to keep providing it. Moreover, as young and healthy workers move into the individual market, the remaining pool for employers to cover becomes even more costly to insure and expensive for employers to cover. A study by several economists in Health Affairs found that 20 million people will be dropped under McCain's plan. An earlier study from the Journal of Public Economics found that a plan similar to McCain's would lead to 28 million people being dropped.

This is a real problem for two reasons. One, only in the idealized world of economic modeling would employers who drop coverage for workers make up the difference by instantly handing over big raises to those workers -- especially in the midst of such a weak labor market. The 20-28 million who would see their employer provided coverage dropped would thus be left to try buying the $12,680 family health care (the national average) policy they previously had in the individual market with only a $5,000 tax credit.

Two, without the rock-solid proposals to eliminate discrimination due to illness that Obama has proposed, families who are dropped and who have a child or spouse with a pre-existing condition face a real danger of being shut-out from insurance altogether or be forced to choose coverage at extremely high premiums. Even experts who support proposals like McCain's acknowledge that without strong and bold new reforms of our unforgiving, wasteful and discriminatory individual market for health care, the results for families with pre-existing conditions could be devastating.

In this context, let's review what the candidates said on health care in Thursday's debate. Governor Palin said McCain is "proposing a $5,000 tax credit for families so that they can get out there and they can purchase their own health care coverage." This is the McCain Campaign's consistent line. It gives anyone watching the clear impression that this credit is free. There is not a word of recognition that the new credit will be offset by eliminating the tax exemption for employer provided health care. Not a word of recognition that for at least 20 million families, this proposal will mean they no longer have the choice of receiving health care through their employer. Yet on these rather remarkable omissions -- the Washington Post is silent.

So what did Joe Biden say? He first asked:

"Do you know how John McCain pays for his $5,000 tax credit you're going to get, a family will get?"

In this initial sentence Biden acknowledged that families would get a tax credit under McCain. He simply asked what the McCain and Palin never wants to answer -- how they propose to pay for it. Thus, Biden, unlike Palin, was willing to talk about both the benefits and pain of the McCain health proposal.

His second sentence was.

"He taxes as income every one of you out there, every one of you listening who has a health care plan through your employer."

If the Washington Post or anyone can take issue with this sentence, I welcome their explanation. Biden clearly states that the tax is on those who have employer based coverage -- and not everyone. This is unquestionably true.

His third sentence states,

"That's how he raises $3.6 trillion, on your -- taxing your health care benefit to give you a $5,000 plan, which his Web site points out will go straight to the insurance company."

Again, Biden -- unlike Palin -- is painting the whole picture, acknowledging that families will get a tax credit while stating how McCain's own team describes how it is paid for. And it is hard to see how anyone in McCain's camp can complain here when his top economic advisor Doug Holtz Eakin is described as telling both the New York Times and McClatchy newspapers that "the government would save $3.6 trillion over the next decade by eliminating the tax break that currently goes to encourage employer-based health coverage" and that "[McCain's] tax measure would generate about $3.6 trillion over 10 years, which would pay for the tax credits, making the entire proposal budget-neutral."

Biden goes on:

"And then you're going to have to replace a $12,000 -- that's the average cost of the plan you get through your employer -- it costs $12,000. You're going to have to pay -- replace a $12,000 plan, because 20 million of you are going to be dropped. Twenty million of you will be dropped."

Contrary to the Washington Post's erroneous claim that Biden "gave the impression that most Americans would be worse off financially as a result of Sen. John McCain's health-care proposals," Biden said was careful and clear in stating -- twice -- that he was not referring to all Americans but as he said, the "20 million who would be dropped." Then he closed with:

"So you're going to have to place -- replace a $12,000 plan with a $5,000 check you just give to the insurance company. I call that the 'Ultimate Bridge to Nowhere.'"

I am hard-pressed to see how anyone analyzing this statement could find it anything other than a highly precise and accurate statement that deserved praise for its accuracy.

The Washington Post oddly also writes that Biden should have somehow noted that a Tax Policy Center study shows that McCain's plan would be a tax cut for middle class families on average. Yet, the Washington Post fact checkers fail to mention that this Tax Policy Center analysis assumes that the McCain plan costs $1.3 trillion over ten years -- on top of the trillions they have already committed to their corporate tax and upper income tax cuts that they have not offered any serious way to pay for. The McCain camp has for months been arguing as mentioned above that it "generate about $3.6 trillion over 10 years" to claim as Palin did in front of 70 million people that the proposal is "budget neutral." It is puzzling that the Washington Post would want to reward this 'a have it both ways' and "all gain-no pain" effort to flip-flop on their description of their health care plan by occasionally telling a reporter or someone doing a tax analysis that it is suddenly a tax cut that costs $1.3 trillion.

I do appreciate that the Post did state that "according to several studies, the McCain plan would lead to a modest increase in the number of people covered by health insurance in the first year but could lead to an increase in the number of uninsured over the long term" (emphasis added).

But to give Joe Biden any Pinocchios at all for such a narrowly-tailored, precise and factually accurate statement while giving the McCain-Palin team a free ride is baffling. They got the Pinocchios completely backwards in this case. As good fact checkers, I hope the Post will review their analysis and admit that they got this one wrong.

Comments

[aofh]

I don't understand this. If I am working and have health insurance, McCain is going to tax my benifits and give me a $5K credit to buy health insurance. What's the point? At best, I'd be looking for a cheap plan to suppliment what I already have. At worst, I'd have a worthless $5K credit. I imagine what will actually happen is that the insurance companies will create plans to suppliment my current plan while offering my employer plans with fewer benifits on which he can save cost. There is a net loss for me as I being taxed for what is now tax free and a net gain for my employer whose costs are lowered.

[justadreamer]

I'm glad that you pointed this error out. Thank you.
Did you happen to check out other facts that senator Biden had wrong, that was not mentioned in the Washington Post/? there were a few others.

[LizM]

I wonder if you could briefly list those errors here.

[Cherlesq]

Don't be baffled, be informed. Palin said the press is"abusing" the freedom of the press "provided" by the troops fighting in Iraq. PAY ATTENTION. NYT just crumbled to the prerssue from the republicans bt providing a front page storyon the aleeged connection between Ayers and Obama. Now WAPO. There are many more newspapers to fall. Wait for it. It's a silent killer like colon cancer. She is right up our asses and you won't know it until you are diagnosed with stage four.

[Boadicea]

Don't hold your breath on any sort of correction. I've given up on the traditional media. You should too.

[politicojunkie]

You should contact WaPo about this.

[GodBlessAmerica]

Mr. Sperling, did you send a copy of your post to .. um, the Post? I hope so.

[WeSeeYou]

I just did!


Let's see what they have to say....

[rdc1]

According to The Washington Post, Tuesday, September 2, 2008; Page A26, "A sampling of the 14 earmarks, totaling $26.9 million, directed to the city of Wasilla from 2000 through 2003. Sarah Palin was mayor from 1996 to 2002."
Palin claims to have cut taxes during her tenure as Mayor but, as reported by the Anchorage Daily News," The cost of running the growing city, apart from capital projects and debt, rose from $3.9 million in fiscal 1996 to $5.8 million in fiscal 2002." http://dwb.adn.com/news/politics/story/8334949p-8231037c.html
Additionally, Politco states that she, "racked up nearly $20 million in long-term debt as mayor of the tiny town of Wasilla." http://www.politico.com/news/stories/0808/12987.html
So if the she got $26.9 million in federal ear marks, increased expenditures by $1.9 million and ran up public debt to the tune of $20 million, it seems, to me, to take some of the edge off her often repeated statement about cutting taxes while Mayor of Wasilla. I can make my household finances work just fine if my neighbors give me a few thousand dollars and I can convince my children to pay my bills.

[timetorevolt]

What the hell good is a 5 thousand dollar tax credit if you're unemployed? Why can't the Democrats make simple arguments like that? Even Joe Six Pack would understand it.

[apduncan1]

Huh?

Haven't you had enough of six years of GOP control of Congress and eight years of GWB's malfeasance?

[timetorevolt]

Yes. I have had more than enough. That's why I said McSame's 5 thousand tax credit makes no sense if you're not employed. Only employed people get tax credits.

The unemployement figures for this year is over 800,000 but that does not include the people who have been unemployed and under employed for years.

[bannorhill]

I don't know who has done less. Bush or Congress. It is time to change them all.

[peachfuzz]

Or what good is the tax credit if you have been DENIED coverage?

If you have the money, but are not in perfect health--what good is the tax break?

[iralarry]

In addition, consider the following. With that $5.000.00 check, you will be required to seek out available plans in your area, read them pick one and then come up with the additional revenue to pay the balance.

Who believes we have the patience to scan complicated insurance forms, decide which is best for our family if we can not even read a 16 page mortgage document clearly stating the risk if we buy into these sub-prime mortgages? We aren't stupid. We are lazy in this regard because it is easier to just trust the guy we know deeply in our ailing hearts is standing right in front of us killing birds-to quote from Chris Cornell.

I am a registered nurse-27 yrs. I have seen us go from 95% reimbursement from Medicare to 40% from Managed Care. I tell you first hand that as a result of this and government cutbacks on medicare reimbursement, the financial burdens on the average taxpayer will far exceed the ones affecting us now. There is no government bail out waiting for us on this one. Only single payer or some form of univeral benefit will resolve this looming crisis. How dare Palin suggest the government will be incapable of managing health care properly. Nearly every important country on this planet has this form of health care. It works dam well, much better than ours because the results are better for half the cost. These are fact check-able realities.

[research]

There are NO LIBERAL PAPERS: Not the NYT, NOT the Post.

[bannorhill]

Who are you kidding? Do you know what a liberal is?

[Liberal2]

Do you? Don't make me laugh.

[bannorhill]

The last Republican Presidential candidate the New York Times endorsed was Eisenhower 52 years ago. But that must be pure coincidence. They aren't bias.

[Willythekorn]

My unscientific poll of Dobbs' Factchecker led me to believe he's pretty consistent about being more forgiving to McCain than to Obama. I don't know if he has higher expectations of Obama or what his problem is. But after watching him give out Pinocchios in a pretty unbalanced manner, I gave up on him and went to the Annenberg "factchecker.org". They seem to take equal-opportunity delight in skewering whomever they think is messing with the truth.

[LizM]

Lou Dobbs wouldn't know a fact if he fell over one. And, he doesn't seem to have any clue at all when he spews outright lies...like the other night when he said, more than once within a few minutes, that Senator Biden "is a twice certified plagiarist!".

Of course, the token Democrat on the panel was, I surmise, vying for the award for 'Most Obtuse' Person in the Room' when he said, "...Biden apologized for it."

Oh, man...do they really think we're ALL that stupid?...have they no shame of their obvious ignorance?...

[kiran888]

I find lou dobbs quite hypocritical he keeps saying he's an independent and fakes his support for the middle-class. well then why doesn't he support the DEM party who is for the middle class, because their nominee is black with a muslim name that's why. I hate Lou Dobbs so much, we always scream at the tv when he's on, and quickly change the channel. I wish he would get the heck out of my hometown of NJ. He's quite rich, if he wants to help the middle class he should do some community service for them.

[gvkid]

Biden told 14 documented LIES during the debate. They're listed all over the Internet. Take a look,if you dare!

[jhoughton1]

Different Dobbs.

[jhoughton1]

If you read Michael Dobbs' excellent book on the Cuban Missile Crisis, "One Minute to Midnight," you can see he HAS to realize the importance of calm, principled leadership in the midst of a potentially planet-destroying crisis. Thus I fail to understand how he could do anything to favor McCain. McCain is made of the same cloth as the people Kennedy had to keep under control because they wanted to blow up the world just to get back at the Russkis.

[bluff]

Robert Reich said that if health care benefits were taxable income employees would be paying $126 billion/year more in income taxes. (By way of the back door, employer-provided health care is a $126 billion/year government health insurance system.)

[Swerinjer]

I've noticed that too. they always have EQUAL blame when in fact Obama's lies are fuzzy at best but McCain's lies are blatant and numerous.

[MyAudacity]

McCain is out for himself only.

He does not care about American citizens, veterans or not. He want to be President of United States or Country be damned.

Why are some of the media so biased in their reporting, fact checking, etc.....what do they have to gain, and what do they have to lose, or is it just personal preference that is influencing their reporting.

It is indeed curious.

[gvkid]

"McCain is out for himself only." Is that why he was tortured for 5 years and had every bone in his body broken, just so he could come back home and be 'just for himself?"

[GodBlessAmerica]

Um, I'm very sure that the torture he endured was in no way voluntary. It wasn't his choice.

Until he picked Palin, I would have been comfortable with a McCain administration, although I do have serious doubts about the amount of Republican politicians/experts to hold cabinet and sub-level positions. I do like Obama better, but I would have been happy with McCain or Hillary -- but again, the Palin pick stunned me and I am more vocal *supporting* Obama now (I don't have to dis McCain).

[huzzah]

You could have pointed out that as 20 million are dropped from their health insurance, they will, I assume, also be receiving the $5000 credit. Assuming each of those 20 million are in families of four, that means 5 million families would receive the credit. That means an ADDITIONAL $25 BILLION in credits to pay out. And doing it without that revenue from the now-defunct coverage.

Did the McCain camp take this into account? Are they planning for the shift of 20 million to the roles of the uninsured and taxing the remaining insured at a level to provide the credit for everyone?

Is this one of the dumbest ideas you've ever heard?