Taking Liberties in Philadelphia

Clinton and Obama both strained the facts at times during their debate in Philadelphia.

• Clinton said "people died" in 1970s bombings by a radical group of which an Obama acquaintance was a member. In fact, the deaths were of three members of the Weather Underground itself, who died when their own bombs accidentally exploded.
• Obama said, "I have never said that I don’t wear flag pins or refuse to wear flag pins." Actually, he did. He said last year, "I decided I won’t wear that pin on my chest" because it had become "a substitute for … true patriotism" during the run-up to the Iraq war.
• Clinton claimed that applying Social Security taxes to wages above the current cap "would impose additional taxes on … educators … police officers, firefighters and the like." Actually, not many of them would be affected. The cap is $102,000 a year.
• Obama denied his handwriting appeared on an old questionnaire that said he supported a ban on possessing a handgun, and he said he has never taken that position. Actually, his writing does appear on one of two versions of the questionnaire.
• Clinton said she believes "market manipulation" is partly to blame for rising fuel prices. She offered no evidence of that. Past investigations of alleged price gouging have concluded that it’s mainly market forces that push prices up.

Sens. Hillary Clinton and Barack Obama met in Philadelphia’s National Constitution Center for a debate televised by ABC News on April 16, just six days before the Pennsylvania presidential primary election. We noted some exaggerations and errors.

Clinton exaggerated the violence committed by an Obama acquaintance who had been part of a radical group in the 1960s and 1970s and who refused to apologize for setting bombs.

Clinton: Senator Obama served on a board with Mr. [William] Ayers for a period of time, the Woods Foundation, which was a paid directorship position.

And if I’m not mistaken, that relationship with Mr. Ayers on this board continued after 9/11 and after his reported comments, which were deeply hurtful to people in New York, and I would hope to every American, because they were published on 9/11 and he said that he was just sorry they hadn’t done more. And what they did was set bombs and in some instances people died.

In fact, nobody died as a result of bombings in which Ayers said he participated as part of the Weather Underground, at the New York City Police Headquarters in 1970, in a men’s lavatory in the Capitol building in 1971 and in a women’s restroom in the Pentagon in 1972. The deaths to which Clinton referred were of three Weather Underground members who died when their own "bomb factory" exploded in a Greenwich Village townhouse on March 6, 1970. Ayers was not present. Also, two police officers were murdered in connection with the robbery of a Brinks armored car by Weather Underground members in 1981. That was about a year after Ayers had turned himself in and after all charges against him had been dropped.

Ayers did say ”I don’t regret setting bombs” and "I feel we didn’t do enough” regarding the group’s violent protests against the Vietnam War. That was in a New York Times interview that was published the morning of September 11, 2001. The interview had been conducted earlier, in connection with the publication of a memoir of the year Ayers spent as a fugitive with his wife and fellow Weather Underground member Bernardine Dohrn. Ayers is now a professor of education at the University of Illinois at Chicago. Obama and Ayers served together for a time on the board of an antipoverty charity, the Woods Fund of Chicago, from 1999 to 2002. Ayers also contributed $200 to Obama’s campaign for the Illinois state Senate on March 2, 2001.

When moderator George Stephanopoulos asked Obama about Ayers, the senator said he is "a guy who lives in my neighborhood … who I know and who I have not received some official endorsement from. He’s not somebody who I exchange ideas from on a regular basis." He continued:

Obama: And the notion that somehow as a consequence of me knowing somebody who engaged in detestable acts 40 years ago when I was 8 years old, somehow reflects on me and my values, doesn’t make much sense, George.

Obama also correctly said that President Bill Clinton had pardoned or commuted the sentences of two Weather Underground members, who had, unlike Ayers, been convicted and sentenced to long prison terms. Bill Clinton indeed pardoned one and commuted the sentence of another.

Obama visited Ayer’s home in 1995 at the invitation of an Illinois state senator, according to a Feb. 22 story in Politico.com. But Politico concluded, "There’s no evidence their relationship is more than the casual friendship of two men who occupy overlapping Chicago political circles and who served together on the board of a Chicago foundation." And while we by no means defend or condone bombings of any kind, Clinton strained the facts to make Ayers’ 1970s activities sound homicidal.

Obama did a bit of historical rewriting regarding his previous statements on wearing a U.S. flag pin in his lapel.

Obama: I have never said that I don’t wear flag pins or refuse to wear flag pins. This is the kind of manufactured issue that our politics has become obsessed with. …

Actually, last year he told an interviewer for station KCRG-TV in Cedar Rapids, Iowa:

Obama, Oct. 2007: I decided I won’t wear that pin on my chest. Instead, I’m gonna try to tell the American people what I believe will make this country great and hopefully that will be a testimony to my patriotism.

And ABC News quoted him as saying that wearing flag pins had become "a substitute for … true patriotism":

Obama, Oct. 2007: You know, the truth is that right after 9/11, I had a pin. … Shortly after 9/11, particularly because as we’re talking about the Iraq war, that became a substitute for I think true patriotism, which is speaking out on issues that are of importance to our national security. …

Conservative critics have attacked Obama repeatedly for these remarks and his lack of a flag pin. Obama said during the debate that this "distracts us from what should be my job when I’m commander in chief, which is going to be figuring out how we get our troops out of Iraq and how we actually make our economy better for the American people."

Recently, at an April 15 rally in Washington, Pa., he accepted a lapel pin given to him by Philip Fiumara, a disabled Vietnam veteran. "It means a lot coming from you," Obama said.

We take no stand on whether wearing a pin or not says anything about anybody’s patriotism. And Obama is within his rights to characterize discussion of the matter as a "distraction." Those are matters of opinion. But as a matter of fact, Obama went too far when he denied ever saying, "I don’t wear flag pins."

When we asked the Clinton campaign for examples of firefighters, police and educators who would be affected, aides pointed to budget figures showing that principals of Philadelphia’s large high schools earn $111,500 on average and large middle school principals earn an average of $107,100. They also cited a news article about the highest paid public officials in Pittsburgh (not Philadelphia), which included a paramedic who topped the list at $145,849.06 last year, a figure that included more than $87,000 in overtime.

In the debate, Obama said "most firefighters, most teachers, you know, they’re not making over $100,000 a year. In fact, only 6 percent of the population does." And sure enough, 6.5 percent of U.S. workers overall earn more than $100,000, according to Citizens for Tax Justice. So we score this one for Obama.

Footnote: Both Obama and moderator Charlie Gibson used an outdated figure for the cap on income subject to Social Security taxes. They both described the cap on taxable wages as $97,000. Actually, it was $97,500 last year but went up to $102,000 in January. Obama has said he’s open to taxing income above the current cap to help shore up Social Security’s finances. During the debate, he said he would also consider exempting income between the cap and $200,000 or $250,000 per year.

Obama was being misleading when he denied that his handwriting had been on a document endorsing a state ban on the sale and possession of handguns in Illinois.

Gibson: And in 1996, your campaign issued a questionnaire, and your writing was on the questionnaire that said you favored a ban on handguns.

Obama: No, my writing wasn’t on that particular questionnaire, Charlie. As I said, I have never favored an all-out ban on handguns.

Actually, Obama’s writing was on the 1996 document, which was filed when Obama was running for the Illinois state Senate. This is a story that has been evolving since last December, when Politico.com obtained a copy of the questionnaire the Obama campaign had completed for a Chicago nonprofit, Independent Voters of Illinois-Independent Precinct Organization. One of the questions dealt with a ban on handguns and assault weapons, and Obama took a hard line:

35. Do you support state legislation to:

a. ban the manufacture, sale and possession of handguns? Yes.

b. ban assault weapons?Yes.

c. mandatory waiting periods and background checks? Yes.

Obama’s campaign later told Politico that the candidate "never saw or approved" the completed questionnaire, that his campaign manager had filled it out, and that she "unintentionally mischaracterize[d] his position."

At the end of March, Politico published another story saying that Obama had actually been interviewed by the group on his answers to the questionnaire, and that he filed an amended version of it the day after the interview. His handwriting was at the bottom of the first page and some answers were modified, such as his response to a question about whether minors should be required to notify their parents or get their consent before having an abortion. The answers to the questions about gun bans, however, were not changed.

Two women who were closely involved with the group at the time as well as the group’s current chairman told Politico they didn’t believe that Obama had never seen or signed off on the questionnaire.

We asked campaign spokesman Tommy Vietor to help us sort out the issue, including Obama’s denial last night that his handwriting was on the amended questionnaire. Vietor simply sent us the comments he made to Politico, saying they remain accurate, and he would not elaborate. Here they are:

Politico.com, March 31, 2008: "Sen. Obama didn’t fill out these state Senate questionnaires – a staffer did – and there are several answers that didn’t reflect his views then or now," Tommy Vietor, a spokesman for Obama’s campaign, said in an e-mailed statement. "He may have jotted some notes on the front page of the questionnaire at the meeting, but that doesn’t change the fact that some answers didn’t reflect his views. His 11 years in public office do."

Clinton said she believes "market manipulation" is a factor in the rise of fuel prices but offered no evidence to support that.

Clinton: Number one, we are going to investigate these gas prices. The federal government has certain tools that this administration will not use, in the Federal Trade Commission and other ways, through the Justice Department, because I believe there is market manipulation going on, particularly among energy traders.

In an article we posted on an earlier Democratic debate, when John Edwards raised this issue, we noted that the Federal Trade Commission has repeatedly looked into allegations of market manipulation and fixing of gasoline prices. So far, it has found nothing to prosecute, not even in the post-Hurricane Katrina gas price spikes. FTC Chairman Deborah Platt Majoras testified before the Senate Committee on Commerce, Science, and Transportation on May 23, 2006, about the post-Katrina price increases. According to the FTC’s press release, the investigation found 15 instances of "price gouging," but the FTC added: "Other factors such as regional or local market trends … appeared to explain these firms’ prices in nearly all cases."

The FTC isn’t sitting on its hands as prices shoot skyward, at least according to information on its Web site. As part of a project begun in 2002, it monitors retail gas prices in 360 U.S. cities and wholesale prices in 20 urban areas, collects daily data from the Department of Energy and private groups, and crunches all the information to look for suspicious pricing. When lights start flashing, it consults with other government agencies and state attorneys general to determine next steps, including investigations. But the FTC does not disclose its ongoing investigations.

Moderator Gibson also made a dubious claim that cuts in capital gains tax rates raised government revenues. Regarding the two most recent cuts in the capital gains rate, to 20 percent under President Clinton and to 15 percent under President Bush, Gibson said:

Gibson: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

Gibson’s claim is partially right. Cutting the capital gains tax rate does stimulate at least a temporary, short-term increase in revenue by giving owners of appreciated assets (such as real estate or stocks) an incentive to sell them and turn their paper profits into cash. The boost in capital gains income can offset the loss to the government from the lower rate.

The long-term revenue effects of changes to the capital gains tax rate are less certain, however. For example, in 1990, when Congress was considering a 30 percent cut in the capital gains tax rate, Congress’ Joint Committee on Taxation and the Treasury’s Office of Tax Analysis both attempted to compute the revenue effects of the cuts. OTA predicted at $12 billion increase in revenue over five years. JCT predicted an $11 billion loss over five years. Academic studies have produced similarly conflicting results.

The nonpartisan Congressional Budget Office concluded in 2002 that cuts to the capital gains tax rate "may not be enough to produce additional receipts over a long period" but "may do so over a few years." Similarly, Jane Gravelle, a tax policy specialist with the Congressional Research Service, says that the empirical evidence on capital gains tax rate changes "does not clearly point to a specific response and revenue cost," adding that the latest research shows "more modest" change than economists had previously thought.

Gibson also said Obama could nearly double the capital gains rate. Obama actually indicated he would push for a much smaller increase.

Gibson: As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton, which was 28 percent." It’s now 15 percent. That’s almost a doubling if you went to 28 percent.

But Gibson did not give the entire quote:

Obama, March 27: And I certainly would not go above what existed under Bill Clinton, which was the 28 percent. I would – and my guess would be it would be significantly lower than that.

For the record, Clinton said during the debate: "I wouldn’t raise it above the 20 percent if I raised it at all."

– by Brooks Jackson, with Viveca Novak, Lori Robertson, Joe Miller, Emi Kolawole, Justin Bank and Jess Henig.