Sorting Out the Truth--From Tax Cuts to Medicare

The candidates in Tuesday’s debate unleashed a barrage of numbers and competing claims addressing some of the campaign’s hottest issues.

Here are some points of conflict:

TAX CUTS

Al Gore repeatedly charged that George W. Bush’s tax cuts would deliver “nearly half” their benefits to the top 1% of America’s income earners, nearly one-third of whom make more than $1 million a year.

Gore is basically correct, but analysts caution that the skewing is mostly because the nation’s richest families bear an inordinate portion of the tax burden. By one liberal group’s estimate, when Bush’s income tax rate cuts are combined with his plan to end the estate tax, 43% of the benefits go to the wealthiest 1%. That exceeds the 25% of the tax load these families pay.

But Bush supporters and some independent analysts argue that the income tax rate cuts should be considered on their own. When they are, the benefits to the richest are in proportion to their tax burden, or in fact are slightly skewed in favor of less-affluent Americans.

Bush countered that Gore’s plan was unfair because it would “exclude 50 million” taxpayers. Analysts said that figure was probably accurate, given that Gore regularly touts his cuts as “targeted” to working and middle-class families.

MEDICARE

Bush said that his plan would give all seniors prescription drug coverage and that he would offer more health plan choices to seniors, similar to the options offered to federal employees.

But it is not clear that all seniors would be able to afford the drug coverage. Bush would fully subsidize costs for the poorest--those with incomes below $11,300--but some middle-income seniors might face high premiums or pay significant out-of-pocket costs. For the non-poor, Bush would pay 25% of seniors’ drug-coverage premiums.

Seniors would be able to choose among HMOs and other insurance plans or stay in Medicare. It could be expensive for seniors to remain in the traditional program because premiums are likely to rise more quickly than the alternatives.

Such plans work well for federal employees, but they are a younger and healthier population.

Bush’s entire plan would not go into effect immediately. It would begin with the subsidized coverage and would cover drug costs for all seniors after they spent $6,000 out-of-pocket. Otherwise, benefits for the non-poor would not kick in for several years.

Gore’s plan is more generous. It would fully subsidize drug coverage for the poor and pay 50% of other seniors’ premiums. It would offer the drug coverage to all seniors right away. But Gore’s plan would be much more expensive for the government.

SOCIAL SECURITY

Gore pounded away on the notion that he would put all the surpluses now accruing in Social Security and Medicare in a “lockbox” to be used only for the two programs, while Bush would not.

In fact, Bush would treat the two programs very differently from Gore. He would partially privatize Social Security by directing as much as 2 percentage points of the 12% Social Security payroll tax into individual retirement accounts. For the first time, Bush acknowledged he would fund those accounts with part of the expected Social Security surplus. He has not pledged to save all of the Medicare surpluses, nor has he been specific about how his privatization proposal would work. Analysts said most other plans floated to date would require cutting benefits. They said the big question is whether the extra coverage retirees could buy with the earnings of their individual accounts would make up for the losses. Most say either “no” or “not for certain.”

Gore, too, has a problem on Social Security. To make good on his promise not to cut benefits or raise taxes, he must use billions of dollars in general revenues to shore up the program.

CAMPAIGN SPENDING

In the waning moments of the debate, Bush pointed to Gore and said, “This man has out-spent me. The special interests are out-spending me.” Because campaign spending reports are incomplete and the various committees report on different schedules, a direct comparison is difficult. One thing, however, is clear: The Bush campaign has outspent the Gore campaign.

Bush spent virtually all his record-breaking $100-million war chest to win the GOP nomination, while Gore’s primary campaign spent more than $50 million. In the month after each party’s convention, Bush spent roughly $23 million on TV ads while Gore spent about $13 million.

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Times staff writer Vicki Kemper in Washington contributed to this story.