CNN Fact Check: Would McCain’s mortgage plan shift burden to taxpayers?

From CNN 10/10/08

The Statement:

An ad released Thursday, October 9, by Sen. Barack Obama’s campaign, titled “Tested,” takes aim at Sen. John McCain’s mortgage plan. “McCain would shift the burden from lenders to taxpayers, guaranteeing a loss of taxpayer money,” the ad’s narrator says. “Who wins? The same lenders that caused the crisis in the first place.”

Get the facts!

 

The Facts:
The ad refers to a plan McCain announced during a debate Tuesday night in Nashville, Tennessee. “I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes — at the diminished value of those homes — and let people be able to … make those payments and stay in their homes,” McCain said.

On his Web site, McCain calls it “an American Homeownership Resurgence Plan.” Under his plan, the government would buy up some troubled mortgages at their full value — meaning the lenders would not take a loss. The government would then renegotiate those mortgages, so that eligible homeowners would be paying rates based on their homes’ current, reduced value.

McCain previously supported renegotiating mortgages with lenders, who would take losses. His economic adviser, Douglas Holtz-Eakin, told reporters Wednesday that McCain now believes having the government pay the entire value of the loans is “the only way” to begin stabilizing the housing market “in a timely fashion.”

Obama, in his ad, highlights this quote from a CNNMoney.com story: “Much of the burden of paying to keep troubled borrowers in their homes will shift to taxpayers.” The McCain campaign acknowledged that point, both on a conference call with Holtz-Eakin on the day after the debate and in a follow-up interview with CNN’s Les Christie, writer of the CNNMoney.com story.

The McCain campaign says the plan would cost about $300 billion. “Funds provided by Congress in (the) recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill,” the campaign Web site says.

McCain’s plan puts him at odds with a bill adopted by Congress in July that required lenders to write down mortgage balances to 90 percent of a home’s current market value in order to qualify for refinancing insured by the Federal Housing Administration. Neither McCain nor Obama voted on that bill.

While the Obama ad refers to “lenders that caused the crisis in the first place,” Obama himself has been using slightly different language on the stump, referring to lenders who “helped create this mess in the first place.” But the substance of Obama’s attack has not changed.

The Verdict:
True. The McCain campaign acknowledges the plan would shift the burden to taxpayers.

Fact: John McCain Is No Maverick On The Issues That Count

It turns out Joe Biden, who has known John McCain longer than just about anyone in the senate, hit the nail on the head when he said:

On The Economy:

McCain attacked legislation requiring the federal government to purchase American-made goods as the “worst, most disgraceful aspect of the legislative process in Washington.”
Source: Vote 63, 3/17/05; Vote 83, 5/5/04; Vote 517, 10/26/95

McCain opposed increased funding for job training programs to help displaced workers.
Source: Vote 63, 3/17/05; Vote 83, 5/5/04; Vote 517, 10/26/95

McCain’s economic plan gives Big Oil a $4 billion tax break while 101 million working families get no relief at all. 
Source: Tax Policy Center, Preliminary Analysis Of The 2008 Presidential Candidates’ Tax Plan, 6/20/08; Center for American Progress Action Fund, 3/27/08 

John McCain supports tax breaks for companies that send American jobs overseas. This year, we’ve lost more than 600,000 American jobs to outsourcing. 
Source: John McCain 2008, “Jobs for America,”; “The McCain Budget Plan,” Washington Post, 7/14/08; USA Today, 3/20/08 Vote 63, 3/17/05; Vote 83, 5/5/04; Vote 517, 10/26/95

John McCain will continue George Bush’s tax cuts for the wealthiest Americans while the middle class struggles with stagnant wages and rising prices.
Source: The Washington Post, 7/14/08

On Health Care:

Voted NO on providing $9.13 billion for the Children’s Health Insurance Program (CHIP) [Title I (Sec. 101)]

McCain Looked Out For Tobacco Industry Over American Children. TheNew York Times reported, “Like the other Republican presidential candidates, Senator John McCain opposes the so-called S-Chip bill to expand children’s health care coverage, in part because it widely expands the eligibility criteria and would cost some $35 billion… But what really sets him off is the way Congress proposes to finance the measure, which President Bush vetoed and is facing a veto override vote: an added tax on cigarettes.” [New York Times, 10/16/07]

Voted No to extend rebates for prescription drugs to enrollees in Medicaid managed care organizations. 

Voted No on providing emergency health care and other relief for survivors of Hurricane Katrina.

Voted No on increasing the funding for the AIDS Drug Assistance Program by an additional $74 million. 

Voted No on adding prescription drug benefits to Medicare.

Voted No to protect Social Security surpluses and move Medicare trust fund surpluses off budget to prevent using them for other purposes. 

Voted No to increase access to health care and to protect consumers in managed care plans and in other health coverage.

On Education:

Voted NO on $52M for “21st century community learning centers”. 

Voted NO on $5B for grants to local educational agencies.

Voted NO on shifting $11B from corporate tax loopholes to education.

Voted NO on funding smaller classes instead of private tutors.

Voted NO on funding student testing instead of private tutors.

Voted NO on spending $448B of tax cut on education & debt reduction.

Voted NO on national education standards.

His YES votes are just as bad and show how out of touch he is with the needs of the education system.

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Playing Politics: McCain Heads Back To Washington and Mucks Everything Up

(another great video from Jed Lewison) 

At noon yesterday both parties were speaking about how close to a deal they were and then swoops in John McCain.  The next thing you know, out of nowhere, the republicans submit a totally new plan and refuse to negotiate.  McCain has done a very good job dividing and politicizing and nearly destroying a weeks work of bipartisan efforts.  

Being the economic genius that he is, McCain is now fighting not for you and I but for more tax cuts and less regulation for big business:

John McCain So Concerned About Economic Crisis Didn’t Bother Reading White House’s Plan

In this interview on Tuesday afternoon, John McCain admits that he had not bothered to read the THREE PAGE Paulson proposal released the previous Friday….you know around the time when he was trying to sell his “fundamentals of the economy are strong” message.  

McCain: Deregulation Was Helpful

And we can add this to his list of flip flops.  The McCain camp is clearly running on the theory that if you tell a lie long enough it will become the truth.  It’s amazing how phony this guy really is:

John McCain Uses Performance of the Financial Industry to Sell His Health Care Plan?

It’s true.  

In an article for the Sept / Oct. 08′ issue of Contingencies Magazine titled Better Health Care at Lower Cost for Every American, John McCain writes:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

This just shows how aligned John McCain is with the failed Bush / Republican economic policies of deregulation.  It also just further discredits his claim that he some how saw this crises coming and tried to warn us all back in 2006 but no one listened.  I mean earlier this month he’s bragging about the success of the deregulated banking industry?  And this is the type of model he wants to use for our health care system?

Ron Paul on Not Endorsing John McCain

“I can’t endorse somebody that disagrees with me on all the major issues — on the federal reserve system, on spending and taxes, and No Child Left Behind, and McCain-Feingold, and foreign policy especially. I mean I could never support somebody who thinks that its funny to say “bomb, bomb, bomb Iran.” That to me is not somebody I could endorse ever.”

I would also like to thank Ron Paul for this classic “John McCain / I really don’t know crap about what’s going on with economy” moment from the republican debates:

History Not on McCain’s Side: Economic Policies Bring Flashbacks of The Keating Five

Deregulation? Fraud? Millions of Americans loosing their retirement funds?

Many are finding similarities between our current economic crisis and the savings and loan crash in the late 1980’s.  One in which John McCain’s unethical behavior landed him smack dab in the middle of.  If your not familiar with this I would recommend reading:  John McCain and the Keating Five, What Every Voter MUST Know

Here are some videos about his involvement:

From CNN:

Exposing Five Dangerous Lies in McCain’s Big Speech

AlterNet. Posted September 6, 2008

McCain’s falsehoods on health care, oil companies, trade, taxes and worker training were egregious and covered up his pro-corporate positions.

False McCain Claim: “My health care plan will make it easier for more Americans to find and keep good health care insurance.”

Facts: McCain’s Health Care Plan Does Little to Reduce the Ranks of America’s Uninsured and Would Erode the Employer-Based System

Under McCain’s Plan, Health Insurance Benefits Would be Taxed For The First Time, Resulting In A $3.6 Trillion Tax Increase On Working Families. McCain’s health care plan would eliminate the payroll deduction on health care benefits, which would have the effect of raising taxes on working families by $3.6 trillion. [New York Times, 5/1/08]

McCain’s Plan Undermines The Employer-Based Health Care System And Will Lead To Workers Losing Coverage. McCain’s health care plan would begin to dismantle the employer-based health care system, removing the incentives employers have to provide health care coverage, resulting in employees losing their health care. [New York Times, 4/30/08;Washington Post, 4/30/08]

The Health Care Tax Credit McCain Offers Would Cover Less Than Half The Cost Of An Average Health Care Plan. The McCain health plan would give families a $5,000 tax credit to purchase health insurance. However, in 2007, the average family health insurance plan cost $12,000 – more than double the value of McCain’s health care tax credit. [“Employer Health Benefits 2007 Annual Survey,” Kaiser Family Foundation, 9/11/07; “‘Call To Action’ On Health Care Reform,” John McCain 2008 press release, 4/29/08; Wall Street Journal, 10/11/07]

John McCain Doesn’t Know How Many Houses He Owns; Says People Who Make Less Than $5 mil Are Not Rich

When Pushed to Define rich recently at the Saddleback church forum, John McCain said “If your just talking about income, how about $5 million.”  Today when asked how many homes he owns he said he wasn’t sure and would have to ask his staff.  Both of these statements come after his continued claims that the economy is fundamentally strong.