FACT CHECK: McCain persists in exaggerations

A week from the presidential election, Republican John McCain is persisting in exaggerating and misrepresenting rival Barack Obama's tax and health-care plans.

In his latest campaign stump speech, McCain portrays himself as a time-tested warrior who will fight passionately for the middle class as president. "These are hard times," he proclaims, promising to enact policies that will create new jobs, help people stay in their homes, and protect their retirement accounts.

The well-crafted speech, with stirring references to McCain's five and a half years as a prisoner of war in Vietnam and his plans for the nation, goes off track when it comes to Obama's policies.

"I'm not going to spend $700 billion of your money just bailing out the Wall Street bankers and brokers who got us into this mess," McCain says. "I'm going to make sure we take care of the people who were devastated by the excesses of Wall Street and Washington. I'm going to spend a lot of that money to bring relief to you."

Both McCain and Obama voted for the sweeping financial rescue deal, passed 74-25 by the Senate, that directs the U.S. Treasury to spend $700 billion to buy up distressed mortgages and other bad debt from banks.

McCain has criticized elements of the plan but argued he had no choice but to support it, saying it was an emergency measure needed to help stabilize the stock market and loosen credit.

To make it more consumer friendly, McCain has proposed spending $300 billion of it on buying bad mortgages at full face value and renegotiating them to a lower rate. The plan has drawn mixed reviews; critics say it would force taxpayers to vastly overpay for mortgages. Obama has said profligate lenders must share the losses so the government shouldn't pay them full face value for failing mortgages.

In his stump speech, McCain says if elected "I won't spend nearly a trillion dollars more of your money ... as Sen. Obama proposes. Because he can't do that without raising your taxes or digging us further into debt. I'm going to make government live on a budget just like you do."

McCain is correct that Obama has proposed several costly new programs, including a 10-year, $150 billion clean energy fund and a plan for near-universal health coverage that would cost upwards of $50 billion a year.

Obama claims his spending plans are offset by spending cuts. He says he would pay for new programs with the savings from withdrawing U.S. troops from Iraq and with new taxes on those earning over $250,000 a year. The 95 percent of workers who make less than that would get a tax cut, he says.

McCain has proposed making permanent all of President Bush's tax cuts and has called for a spending freeze on all programs except Defense, veterans' benefits and Social Security. He's a staunch defender of the Iraq war, even though it costs about $150 billion a year. He has resisted setting a time frame for withdrawing U.S. troops.

McCain is also standing by his pledge to balance the federal budget in four years with no tax increases - a pledge analysts say may be close to impossible given current economic conditions and the added cost of the $700 billion bailout.

In his stump speech, McCain says he "won't fine small businesses and families with children, as Sen. Obama proposes, to force them into a new huge government-run health-care program, while I keep the cost of the fine a secret until I hit you with it."

McCain's central claim - that people will be "forced" into a new government-run plan under an Obama presidency - is not true. In fact, Obama broke with many Democrats and others who advocate universal coverage when he announced his plan would be mandatory only for children, and voluntary for everyone else. Obama would allow those who want to keep their current employer-based health insurance to do so. Rather than requiring everyone to purchase coverage, Obama's plan is designed to bring down costs - make insurance more affordable so as many people as possible would choose to buy it.

In addition, under Obama's plan, employers would not be fined for not providing coverage. Instead, large employers - but not small businesses - would be required either to provide health insurance or contribute toward the cost of a public plan.

McCain also accuses Obama of aiming to raise taxes on small businesses, which he says would cause them to cut jobs. He has recently fleshed out that point by invoking "Joe the Plumber," who told Obama on a campaign stop in Ohio that he wants to buy the plumbing business where he works, but is afraid Obama's tax plan would make that impossible.

In fact, Obama would raise taxes on small businesses making more than $250,000, but only about two percent of small businesses in the country fall into that category. And Obama is also proposing targeted tax relief for small businesses, such as a tax credit for offering health care to employees and elimination of capital gains taxes on startup businesses.