Tuesday, May 1, 2012

(old) FACT CHECK: Dems Go Old School In Anti-Kelly Ad, Can't Back Up Halving Millionaires' Taxes Claim

(UPDATE: 4:00pm, May 2:  Though the DCCC has not responded to call or e-mail, the Center on Budget Policy & Priorities did some further checking - thanks! - and found the report that the DCCC was likely citing.  The NEW Fact Check can be found here.)

The DCCC ("Democratic Congressional Campaign Committee") released an ad yesterday attacking Jesse Kelly, the Republican nominee in the June special election to replace retired Rep. Gabrielle Giffords.  In it, they rehash three of the more controversial comments that Kelly made in his first bid for the office in 2009-2010.  Although Kelly's campaign says that his current positions on Social Security and Medicare are not fairly represented by his previous statements, the statements are accurate; the third claim is much hazier.

The ad can be seen in our previous post.  Here is the Arizona's Politics transcript of the ad:

(serious-sounding male announcer): "Is Jesse Kelly listening to you? Was Jesse Kelly listening to you when he said on Social Security: 'I'd love to eliminate the program.'  Jesse Kelly said he would work to eliminate Medicare over time.  Was he listening to you then?  How about when Jesse Kelly said at the same time he'd cut taxes in half for millionaires?  Is Jesse Kelly listening to you?  Just listen to Jesse Kelly.  The Democratic Congressional Campaign Committee is responsible for the content of this advertisement."
The Kelly quote and comment on Social Security and Medicare come from the same section of a printed version of an interview conducted by the Tucson Weekly's Jim Nintzel in December 2009.  Here is that section, with context (highlighting added):

(Kelly talking about where to cut government spending) ...And last but not least, we can’t forget entitlement spending. If we don’t start getting some entitlement reform in this country, we’re buried. Medicare and Social Security have a $104 trillion unfunded liability. People who are getting Medicare and Social Security right now have earned it, so that’s a big problem. They earned it. They worked their tails off their whole lives, so we can’t cut it right now. We’d better find ways to reform it and privatize it in the future. We simply don’t have the money. Social Security is about to bankrupt in 2017, Medicare in 2016, and those dates are getting closer because we’ve spent so much.
How do you go about reforming those?
That is the tough question. It starts with reforming our health-care system in this country, and not reforming it by offering a government option, which will just bankrupt the private sector. We need reform to offer individuals the same tax credits that we offer small businesses. When individuals can start owning their own insurance, then they’re in less need of Medicare in the future, thus getting off the public dole and staying on their own individual insurance. It’s one of the biggest problems that not enough people talk about right now. Individuals need to have the power of their own insurance. Otherwise, when you get fired, you do lose your insurance. Or you can’t leave jobs. I can’t leave my job today. My wife and son won’t have health insurance. It would be much better if we owned our own as a family. We need to give people the tax credits to incentivize them to purchase their own. Now there’s some of that out there, but it’s not near enough.
You could purchase your own insurance now, but it would cost a lot more money.That’s exactly right. You need to incentivize that with tax credits so families can do that because families simply can’t afford that. Individual insurance is expensive, very expensive. And that, in turn, in the future, will help save Medicare dollars because you won’t be on the public dole and you’re phasing that out.
You’d have people, as they retire, continue to purchase their own health insurance rather than get on Medicare.
Yes. We’re talking in the future here. There’s so much that needs to be done to ever get there, and you may never get there. Ronald Reagan—my favorite, probably not yours—said the closest thing to eternal life on earth is a government program. That’s the problem with these. They only get bigger and you can’t ever get rid of them, especially now that people have earned them. People getting Social Security and Medicare checks have earned them. Now we have to pay it and we don’t have the money to pay it.
So you would look at eliminating the program over time. Not tomorrow, but eliminating it so there was no Medicare in the future and people would be responsible for taking care of their own health-care bills as they grew older.Yes. But to say you’re going to do that instantly would be disingenuous and not realistic and not fair to the people who have earned it.
Same sort of thing with Social Security? Work toward eliminating it?
If you have any ideas on that, I’m all ears. I would love to eliminate the program. I’d love to take steps to let people opt in and opt out of it. Privatize it. The trust fund, as you know, is bankrupt. It’s not there anymore.

When you say privatize, do you mean you’d still pay Social Security taxes but you’d have the option of paying some of it into a private account that could be invested into the stock market?
Yes. I do think that’s a good idea. Now people may say, “Some people don’t know how to invest their money in the stock market.” And that may be true. But we don’t know that the individual can or can’t invest their own money wisely. We know the government cannot. They’re bankrupted it. They’ve ruined it. They didn’t invest anything. They took our money and spent it and now they don’t have it to give it back. They didn’t invest it in anything. They blew it.

So, even though the Medicare comment was an agreement by Kelly - the ad does not make it into a quote - both ad claims accurately reflect Kelly's opinions at that time.

The third claim about Kelly saying he would cut taxes in half for millionaires is much more problematic.  The ad makes two citations (on screen) for that claim: "KMSB, 8/26/10", and "CBPP, 7/07/10".  Neither of those citations appear to be accurate.*  It is possible that it is referring to a KMSB ("TucsonNewsNow") report updated on OCTOBER 26, 2010 about a debate between Giffords and Kelly (on the 18th).  In that debate, Giffords criticized Kelly for his support of the Fair Tax, which proposes a flat income tax and a tax on purchases.  Kelly said after the debate, "She's lying about that too, that's how I explain that. I believe in a ten percent, flat income tax with the elimination of the other taxes,"

Kelly's spokesman John Ellinwood notes that those are not the candidate's current views, that Kelly supports "preserving, protecting and strengthening Social Security and Medicare"

It is extremely unlikely that Kelly said he wanted to cut taxes in half for millionaires.  So, it would seem that the DCCC is taking his flat tax support and using some analysis to come up with the effect on millionaires' tax burden.  While the CBPP citation does not seem to pan out, Arizona's Politics searched for other analyses which might make that claim.  While almost all analyses agree that a flat tax would result in those with higher incomes paying less taxes than under the current system, the only one meeting the claim was from an article on the Citizens for Tax Justice site.  It claims that a family with an income of $500,000 would see a tax cut of 50% or more.  CTJ has been described by the New York Times as a "liberal research group."

A Wikipedia article on the distribution of the Fair Tax burden does not come up with any cutting in half analyses. The flat tax proposal that the CTJ analysis was looking at called for a flat rate of 17% (the Armey plan); Kelly had discussed a flat tax with a rate of 10%.  That would seem to favor the wealthy more than the earlier proposal.

It is hard to dock the DCCC any points for the first two claims - it was less than two years ago, circumstances have not changed in such a way that would explain why Kelly is changing his positions, and the comments are accurately reported.

So, the citation problems on the third claim do cause problems for Fact Checking and assigning a final grade.  Arizona's Politics left messages for the DCCC's communications department but has not yet heard back.  (We will update as necessary.)  And, smooshing together Kelly's support for a flat tax with some (possibly biased) analysis is misleading.  

We are going to apply "shoddy" and "misleading" labels to that third claim, and give the ad an overall grade of "C".  (That grade is subject to change if the DCCC can provide checkable citations that support the claim.)

* The Center on Budget and Policy Priorities is a non-partisan organization which analyzes tax policy issues, also could not locate a report or article that it was responsible for that fit the quote.

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