AP FACT CHECK: Trump's tax plan, health care distortions
AP FACT CHECK: Trump's tax plan, health care distortions
AP FACT CHECK: Trump's tax plan, health care distortions
By CALVIN WOODWARD and JOSH BOAK
Oct. 14, 2017
WASHINGTON (AP) — President Donald Trump presented a distorted picture of his tax plan this past week and claimed he was trying to keep the Obama health law's insurance markets afloat even as he took steps that could well sink them.
A look at his statements on a grab-bag of hot topics spanning the economy, Iran, health care and the way he treats his subordinates:
TRUMP on President Barack Obama's health overhaul: "What we're doing is trying to keep it afloat, because it's failing." — Forbes interview, conducted Oct. 6 and reported this past week.
THE FACTS: Days later, Trump pulled the plug on payments to insurers that are critical to making copayments and deductibles more affordable in the subsidized individual insurance market. Barring a reversal by Congress, the courts or administration policy, the move probably will drive up costs substantially for many in the health exchanges, send insurers fleeing from the already troubled marketplace, or both. Trump makes no secret of his wish to repeal the Affordable Care Act. But he had been casting a lifeline to those exchanges by making the payments month to month. Now he's yanked that back.
Trump also directed his administration to rewrite federal rules to ease the way for "association health plans" that could offer cheaper coverage with fewer protections than are guaranteed in the law's health plans. That, too, potentially undermines the 2010 law. Furthermore, his administration said before this week that it is sharply cutting programs that promote health insurance enrollment under the law for next year.
TRUMP: "I'm giving the largest tax cuts in the history of this country." — comments Tuesday after meeting Henry Kissinger.
THE FACTS: His tax plan is, at most, fifth largest in its estimated cost, says Marc Goldwein of the nonpartisan Committee for a Responsible Federal Budget. It could end up being even lower on the ladder historically.
The estimated cost of the tax plan has dropped by half or more since the spring, when only the contours were known. In an analysis in April, Goldwein's group found that the $5.5 trillion plan that was then expected would have been the third largest since 1940 as a share of gross domestic product, behind President Ronald Reagan's package in 1981 and tax cuts enacted in 1945 to phase out revenue generated for World War II. But, citing estimated costs of $1.5 trillion to $2.5 trillion for Trump's plan now, Goldwein said several other historically significant tax cuts also would surpass Trump's: from 2013 and 1964.
TRUMP: "Since the election on November 8th, I've increased the value of your U.S. assets by more than the $20 trillion that we currently owe." — comparing rising values with the national debt, in a speech Wednesday to truckers in Pennsylvania.
THE FACTS: Trump's suggestion that his election is the solitary explanation for higher stock and home prices does not reflect how the economy works. Trump's election and the promise of a tax overhaul certainly helped the stock market at first. But recent gains also reflect better global growth and other factors that are beyond the president's control.
Most Americans' primary asset is their home, and there is little evidence that home values are rising because of Trump's presidency. Much of the increase in home values reflects a dwindling supply of properties on the market relative to demand from would-be buyers. People's net worth has improved because mortgage debt is being repaid, increasing the equity they have in their homes.
Meantime, the International Monetary Fund expects world economic growth will reach a six-year high this year. Three-quarters of the globe is experiencing growth, the first synchronized worldwide upswing in a decade. That's a big boost for U.S. companies that earn much of their money overseas, and a lift for the U.S. stock market.
Also, people's rising stock and home values do not mean a paying down of the federal government' debt.
TRUMP: "When it comes to the business tax, we are now dead last among developed nations. Our rate is the least competitive rate. We have the highest tax rate anywhere in the world. How foolish is this?" — Pennsylvania speech.
THE FACTS: This is a misleading picture and one he paints continually. The U.S. does have the highest statutory corporate tax rate, but that doesn't tell the full story. Other countries with lower corporate taxes also charge a separate tax on consumption, known as a Value Added Tax, that lets them keep corporate rates lower. The overall tax burden in the United States is among the lowest in the developed world.
TRUMP: "We are nearly doubling the amount of income that is based at the zero bracket." Democrats are "not telling you the truth, because they pretend there isn't a zero rate. And there is, and it's expanding very substantially under my plan." — Pennsylvania speech.
THE FACTS: Some people who accept that statement at face value are bound to get sticker shock at tax time, if his plan is adopted.
With the "zero" tax rate, Trump is talking about his proposed doubling of the standard deduction. While the higher standard deduction would exclude the first $24,000 in family earnings from taxes, the plan would also get rid of the personal exemption. The loss of the exemption would expose some families — particularly larger ones — to higher taxes than the doubling of the standard deduction.
TRUMP: "The Iranian regime has committed multiple violations of the agreement. For example, on two separate occasions, they have exceeded the limit of 130 metric tons of heavy water." — remarks Friday criticizing Iran's behavior while stopping short of pulling the U.S. out of the nuclear agreement.
THE FACTS: Iran is meeting all its obligations under the deal that suspended its nuclear program in return for eased international sanctions, according to International Atomic Energy Agency investigators. They did note some minor violations that were quickly corrected.
Trump is right that Iran exceeded the limit on heavy water in its possession on two occasions. Both times international inspectors were able to see that Iran made arrangements to ship the excess out of the country so that Tehran could come back into compliance.
Supporters of the deal argue that this shows the agreement works. Opponents say that because Iran sells the surplus on the open market, it is therefore being rewarded for violating the deal.
Trump and other critics of the agreement point in particular to Iran's continuing missile tests, which may or may not defy the U.N. Security Council resolution that enshrined the deal. But those tests do not violate the deal itself.
TRUMP: "I will tell you, I left Texas and I left Florida, and I left Louisiana, and I went to Puerto Rico, and I met with the president of the Virgin Islands. These are people that are incredible people." — speech to religious conservatives Friday.
THE FACTS: He met the governor of the U.S. Virgin Islands, Kenneth Mapp, not a president. It's not a country so it doesn't have a president. He correctly referred to the Virgin Islands and Puerto Rico as territories. At a congressional hearing a day earlier, Energy Secretary Rick Perry called Puerto Rico "a country that already had its challenges before the storm," and apologized when told of the flub.
TRUMP: "I don't believe in undercutting people." — comments to the press Tuesday, when asked about Secretary of State Rex Tillerson.
THE FACTS: If a boss's public disparagement of those who work for him counts as undercutting, Trump undercuts.
He used Twitter to undercut Tillerson's diplomatic outreach to North Korea ("save your energy, Rex"), then suggested he's got a higher IQ than his chief diplomat. This, after NBC News reported that Tillerson had described Trump as "moron."
Trump also used Twitter and other forums in the summer to humiliate his "very weak" and "beleaguered" attorney general, Jeff Sessions.
If publicly disparaging political associates counts as undercutting, too, the list is very long.
He barked at Senate Majority Leader Mitch McConnell, R-Ky., to "get back to work" after the collapse of an effort to repeal the health law; said Republican senators "look like fools"; and branded Sen. Bob Corker, R-Tenn., "Liddle' Bob Corker" after the senator slammed him on multiple fronts.
Consciously or not, Trump's energy-saving advice to Tillerson and his comment on Corker's height recalled the taunts he directed against his 2016 Republican primary rivals, "low energy" Jeb Bush and "Little Marco" Rubio, the Florida senator.
Trump spokeswoman Sarah Huckabee Sanders argued it's impossible for a president to undercut his Cabinet because "the president is the leader of the Cabinet. He sets the tone, he sets the agenda."
TRUMP: "The Failing @nytimes set Liddle' Bob Corker up by recording his conversation. Was made to sound a fool, and that's what I am dealing with!" — tweet Tuesday.
THE FACTS: The Times wasn't sneaky in recording the interview. Corker asked that he be recorded, mentioning that his aides were also on the line: "I know they're recording it, and I hope you are, too," he told his interviewer. He also said: "I understand we're on the record." Corker said in the interview that Trump risked putting the U.S. on a path to world war and treated his office like a reality TV show.
TRUMP: "So GDP last quarter was 3.1 percent. Most of the folks that are in your business, and elsewhere, were saying that would not be hit for a long time. You know, Obama never hit the number." — interview with Forbes magazine.
THE FACTS: Yes, Obama did, repeatedly. Growth topped 3 percent in eight quarters during Obama's presidency.
When Forbes pointed out that Obama had reached that benchmark, Trump amended his claim: "He never hit it on a yearly basis."
That's true. The economy never grew by more than 3 percent for a full calendar year under Obama. That hasn't happened since 2005. It is unlikely to happen this year, either.
TRUMP: "I've had just about the most legislation passed of any president, in a nine-month period, that's ever served. We had over 50 bills passed. I'm not talking about executive orders only, which are very important. I'm talking about bills." — Forbes interview.
THE FACTS: He's signed little of consequence into law, a thin record all the more striking because of the Republican majority in the House and Senate. His record pales not just next to Franklin Roosevelt's but with Obama's and others. Trump, like his predecessors, has signed a lot of routine legislation, naming federal buildings after people and the like. He's also signed emergency hurricane aid into law.
But the only far-reaching bill he's signed is one he didn't like but went along with, tightening sanctions on Russia and Iran. His promised repeal and replacement of Obama's health care law has yet to materialize after twice failing in Congress. His proposed tax overhaul is in play, not in place, and the big-ticket infrastructure initiative he promised hasn't come to Congress.
TRUMP: "Now, we're going to have to do something with Obamacare because it's failing. Henry Kissinger does not want to pay 116 percent increase in his premiums, but that's what's happening." — after meeting Kissinger on Tuesday.
THE FACTS: Kissinger is going to be OK. The 94-year-old former secretary of state and national security adviser, chairman of his own international consulting firm and prolific author, is surely not bothered by rising premiums. People on Medicare can't sign up for the insurance exchanges anyway.
But what to make of Trump's suggestion that people in the exchanges are seeing premiums rise 116 percent? That comes from one state, Arizona, where unsubsidized premiums for a hypothetical 27-year-old buying a benchmark plan under Obama's law increased 116 percent this year, according to an earlier government estimate. That cost, however, could be reduced significantly with subsidies available to low- and moderate-income people.
WHITE HOUSE PRESS SECRETARY SARAH HUCKABEE SANDERS: "Sen. Corker worked with Nancy Pelosi and the Obama administration to pave the way for that legislation and basically rolled out the red carpet for the Iran deal." — briefing Tuesday.
TRUMP tweet Oct. 8: "He is also largely responsible for the horrendous Iran Deal!"
THE FACTS: Corker, chairman of the Senate Foreign Relations Committee, had no role in crafting the 2015 international agreement forged by the U.S. and other world powers to constrain Iran's ability to build a nuclear arsenal. Corker actually was a vocal opponent of the accord and argued Obama should have made the international pact a treaty subject to approval by the Senate.
When Obama didn't do that, Corker helped fellow senators write legislation that subjected the accord to periodic congressional review. The legislation would have stopped the deal from moving forward if that effort got enough votes. It didn't. In any event, the ultimate decision to bring the deal into effect was made by Obama, not Congress.
Associated Press writers Ricardo Alonso-Zaldivar, Donna Cassata, Christopher S. Rugaber and Richard Lardner contributed to this report.
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