August 7th, 2008
08:08 AM ET

Driving-and crying-on the campaign trail

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/08/06/art.gasprices.jpg]
Tom Foreman
AC360° Correspondent

Presidential campaigns can be depressing times when you are in the fact–checking business, because so many of the “facts” being waved around wind up as shaky as Karl Rove at a Plame family reunion.

Take just one round of Olympic-Size Policy Pitching this week.

Both candidates were on the trail, once again, making bold statements full of reasonable assertions about what we need to do to cut our dependence on foreign oil, develop alternative fuels and vehicles, and generally get our economy on somewhat sounder footing. Both marshal an impressive array of facts to support their claims. But economic, political, tax, and energy analysts all say both senators have left out critical parts of the equation.

Let’s start with McCain. (I could say it’s because I’m doing this alphabetically, but mainly it’s because I just looked up and saw him on the TV.) Here’s something he said today: “America has the second highest business rate in the entire world. It is any wonder that jobs are moving overseas when we are taxing them out of the country? Unfortunately Senator Obama's plans would raise taxes on businesses even more. He has promised tax increases on income, tax increases on investment, tax increases on small businesses. That is exactly the wrong strategy. Raising taxes in a bad economy is about the worst thing you can do because it will kill even more jobs when what we need are policies that create jobs.”

First part: He’s right. The United States has the second highest tax rate on corporate profits in the world; behind only Japan. Many states have high rates of their own, too, only increasing the impact. That matters to regular voters, because tax analysts have been saying for years this is a significant reason that we are losing jobs to other countries.

I spent a good bit of time on the phone with the Tax Foundation, a non-partisan, non-profit group here in DC that considers and analyzes tax issues, and they shed light on this whole situation.

For example, McCain does not point out that while Obama does want to increase taxes for some individuals and some businesses, he’s certainly not talking about all of them. And the Tax Foundation says while, in the long run…in say five or ten years…Obama’s plan may indeed hurt investment and economic expansion, in the short term, it probably will not have the debilitating effect McCain is predicting. Not because Obama’s plan is necessarily good or bad, but because the economy is just too big and complex to respond the way these candidates are suggesting it might.

Moving on to Obama; look at part of what has been his standard stump speech on energy this week.

“I will put the full resources of the federal government and the full energy of the private sector behind a single, overarching goal – in ten years, we will eliminate the need for oil from the entire Middle East and Venezuela. All of it. To do this, we'll invest $150 billion over the next decade and leverage billions of dollars more in private capital to harness American energy and create five million jobs in the process – jobs that cannot be outsourced, good paying jobs that will be created right here in Indiana and all across the United States of America.”

Wow. Ten years to eliminate all the oil we use from the Middle East and Venezuela? That’s a lot. Or maybe not so much, depending on how you look at it. The American Petroleum Institute points out that only about twenty-percent of all the oil we burn comes from those places. We get much more from Canada, Mexico, and Nigeria. Even if Obama’s cutback works like a charm, we’ll still be heavily dependent on foreign oil, and pounded by world oil prices.

Part of Obama’s new plan calls for investing 150-billion dollars in so-called Green Technology; and he says much of the “green” for that can come from a windfall profits tax on oil companies. Of course plenty of us would love to watch Big Oil squirm. Stick it to the fat cats. Problem is, the Tax Foundation gang points out that we’ve tried this before. In the 1980’s, a windfall profits tax on oil companies produced less than a quarter of the tax revenue we expected. Worse: When the oil companies faced dwindling profits, they cut production. We lost jobs. We lost oil. We gained more dependence on foreign fuel. It did not work out so well.

And those five million new, clean energy jobs Obama is proposing? Industry and economic analysts admit that sounds nice, but they have a warning: those new jobs may come at the cost of just as many old jobs in the energy sector…jobs lost by people who are working today with coal and oil.

See? I told you: It’s depressing.

Make no mistake: Both candidates have real plans for making improvements in our economy that are really worth considering. But check the facts: they are also both leaving out details that they know won’t sell so well on the stump; details that could have all of us wondering in a few years “Whatever happened to the great promises of the ’08 campaign?”

Filed under: Democrats • Raw Politics • Republicans • Tom Foreman
soundoff (20 Responses)
  1. Liz, Santa Barbara

    To hit & run on one topic, corporate taxes are admittedly higher in this country; a glaring omission is that, relative to most European countries, personal tax rates are much lower here. How that all settles out, well that’s for more agile minds to decipher.

    Now to energy: What is really sad, is that Obama being pilloried for one specific example conservation, the air pressure gauges. I’m only sorry he didn't follow the idea through to the logical conclusion, which would be to suggest that gas companies be required to support local stations in maintaining not only free air dispensing hoses, but also maintaining free, accurate, gauges attached to these air hoses! Profits last quarter suggest that they could afford it.

    Bottom line: We need to use less oil, and while some parts of the energy packages of both candidates address that goal, the only thing that will work immediately is to reduce that amount of fuel we use–that means conservation.

    August 8, 2008 at 1:31 am |
  2. Dave

    Who ever is president next year has a large problem. This because of BUSH (Republican). Look at all the billions he has sent to Iraq a war we did not need, and still we are sending this money over per Bush request (McCain) . When our economy is terrible. McCain sending 8,000 jobs away from one state, many others from other states, to other countries, so he can benefit (DHL). Now the cat is out, he says he is going to look into it. McCain is a big risk for our international affairs. This said by Republicans. They have said many other things about him it would take a while to recall all. He is anti-conservative. The even question him on the remarks last week that taxes on Social Security where on the table. Come on Obama is not perfect, but McCain has had 26 years of experience and this is the best he can offer. The way he treats his wife in public by telling her to compete in a topless contest, is an embaresment. He can,t even speak without gaffes. No we do not need him as our leader, we need some one that can be a leader for all. OBAMA 08

    August 8, 2008 at 12:22 am |
  3. glenn

    This is for the blow hard media that fills as though they must makeup
    news, to justify their 24 hour news programs. Just maybe if CNN,FOX
    and MSNBC would fill four or five hours of broadcast time with programs on the history of the country or the different branches of the
    government, it would give you celebrity/journalist time to actually do the
    news gathering and followup fact finding that true news reporters was
    once known for... Now days every news broadcast cover the same
    issue at the very same time of day.

    August 7, 2008 at 11:25 pm |
  4. seah ohio

    Anyone Notice that the days that McCain was ahead in the polls, the price was coming down.

    Maybe that is the key to ending the crisis. lol

    August 7, 2008 at 10:36 pm |
  5. Franky

    "Theres a good–reason so many Americans are moving to the Libertarian Party."

    What the?? We gotta stop em then! They gotta live a normal life, right Tom?? LOL!!! Na'h, I'm just playing, for real I am.

    August 7, 2008 at 9:47 pm |
  6. Sharon from Indy

    Whew! I glad you can dicepher the information on energy and taxes. Thanks!

    August 7, 2008 at 6:41 pm |
  7. Ruby Coria, LA. CA.

    Hi Tom, I say in with the new jobs out with the old., I know that we're scare., (that's what church is for.) but we are going to blow up the earth. Yes drilling will help, but we can't just think of that.. everyone needs to talk about other sources first then..ok some drilling, some of this & that. Tom, if we our x.mas lights, light up at night with enrgy that was stored from the Sun.. we could come up with some thing other then OIL., we're jonz'ing & saying " just put it through our vains.."

    August 7, 2008 at 5:45 pm |
  8. Susan


    I have not heard much from either candidate on the consumption side of our energy problems. The United States is the largest consumer and also the least concerned with conservation of our energy resources. It is all well and good to look for new or additional sources of energy, but without conservation it would be counter-productive.

    We are operating in a global marketplace now. We are not the economic super-power that we once where. That center has moved to Asia, India and South and Central America. The old economic rules no longer apply. We have to develop new trading partners and insist on fair trade. I wish there would be more talk on this too.


    August 7, 2008 at 3:10 pm |
  9. Jan from Wood Dale IL

    One of the major problems we face is that the 5 major oil companies have either bought out or shut down most of the smaller independent companies. We allow this to happen in many industries. When there is less competition, those who are on top control the pricing.

    Rather than continuing subsidies and tax cuts to the big 5, we spread that money to smaller, independent companies who work under contract producing our countries oil and natural gas supplies. It would help in creating a new job base and would help lessen our needs for foreign oil sources.

    I have read in several sources that there are huge oil deposits a few miles off Alaska's Prudhoe Bay. Some of these deposits have already been drilled, proven, and capped and are ready for extraction. The oil could be pumped through the existing Alaska pipeline within a relatively short period of time.

    If our foreign suppliers saw we were serious in extracting our own oil, what we might need to buy could be negotiated at a better price. Don't forget, the big 5 oil companies here are also working most of the foreign oil fields, too.

    August 7, 2008 at 3:02 pm |
  10. Vince in CA

    That Karl Rove statement made no sense and had nothing to do with shaky. Good plug for all the bleeding hearts though.

    August 7, 2008 at 2:49 pm |
  11. Jan from Wood Dale IL

    To Gary Chandler: I live in IL, Obama's home state. We have 11 nuclear reactors, more than any other state. They generate between 40 – 50 percent of our electricity. And yes, there have been low-level leaks into the ground water.

    Back in 2002, President Bush proposed legislation (SR0342) that declared Yucca Mtn in Nevada suitable as a permanent federal repository for high level radioactive materials. Clinton voted against this legislation.

    Obama was present in the IL State Senate at the time. He had the opportunity to oppose the nuclear waste facility at Yucca Mtn, but didn't voice any objections. As a result, IL State Senate Resolution 342 was passed which adopted SR0342. It wasn't until Oct. 2007, when Obama voiced any objections to using Yucca Mtn. He even sent a letter to Senate Leader Harry Reid and Committee Chairman Barbara Boxer that states: "Given the nation's rising energy demand and the serious problems posed by global climate change, we need to increase the use of carbon-free energy sources, such as solar, wind, and geothermal energy. But we cannot deny that nuclear power is - and likely will remain - an important source of electiricty for many years to come."

    So Obama's thinking isn't that much different than McCain's. Obama just hasn't been completely honest in his stand regarding nuclear power.

    August 7, 2008 at 2:44 pm |
  12. Rene

    would someone please suggest that we put a plant approx 20mi from where he lives, let see if the tune changes...

    August 7, 2008 at 1:37 pm |
  13. Wendy Ontario, Canada

    I think what Obama was trying to say was he wants to stop getting oil from countries that don't particularly like you? Canada is a friend of the U.S & not an issue when it comes to terrorists.

    August 7, 2008 at 1:25 pm |
  14. Gary Chandler in Canada

    Can someone ask McCain to clarify his claim, 'Obama is * against storage and **reprocessing of nuclear waste'
    * against storing – if Obama doesn't want to store it? does McCain mean he wants it left out in fields?
    ** reprocessing – does McCain have customers lined up for the 'reprocessed' waste, which is weapons grade uranium
    I don't think Obama, or anyone, could be 'against storing nuclear waste' and if the only use for reprocessing is nuclear weapons, how does THAT help with the endergy crisis!
    BEFORE the election, McCain should name the LOCATIONS for his 45 nuclear power plants, and NAME the locations for the storage sites!!!
    A poll would show, maybe 50%, of Americans support nuclear power plants, but 99% would NOT support a plant or a waste dump in their area!!!
    IF he is going to build 45 plants, WHERE?

    August 7, 2008 at 11:59 am |
  15. Kent Fitzsimmons,Kewanee, IL

    Whoever the next President is they are taking on an almost insurmountable task. Bush has screwed this country up royally. Cheney has used his position to help his friends and himself to incredible amounts of contracts and money. So much for the oath of office oil men....................

    August 7, 2008 at 11:53 am |
  16. J.V.hodgson

    This spot on your program was very disappointing. It was actually three subjects.
    1) Obama on energy and why it would not work.
    2) Nice words from Mccain on his tax plan,
    3) In both cases a reference to some archaic, but so called politically independent Tax think tank and the validity of the effects on the economy of each senators/presumptive nominees plans.
    QED you tried to cover Energy policy of one candidate and the economic effects.
    Then the tax plans of the other candidate and economic effects.
    I am a financial consultant and economic advisor to corporations and could makre no sense whatsoever from your coverage other than a clear bias to Mr McCain.
    Up till now AC 360 did not fall into the rest of CNN programs bias towards republican policies. I'll keep commenting but do your job and compare like with Like Obama /Mc cain on energy, economy or tax, separately but do not mish mash the three in one so called balanced presentation!! its unfair to both candidates, and worse still potentially misleads voters.

    August 7, 2008 at 11:23 am |
  17. Praetorian, Fort Myers

    Students of economics will tell you–we need to allow the system to adjust itself.
    Our economy is the wealthiest and most aggressive on the planet–with global interactions. The world needs our products, intellect, and people.
    Both McCain and Obama–are in pshychological denial of the reality that the system we've created over 200 years–will adjust itself. Creating grandiose programs–and injecting federal tax dollars to pre-empt the demise of failed institutions/consumers–won't help and will likely make things worse by extending the pain over decades instead of years.

    Theres a good–reason so many Americans are moving to the Libertarian Party.

    Here are just a few: promises that logically cannot be kept; enormous foreign aid to NATO, UN, Israel–despite the reality many of the nations and organizations could be on a "self-pay" basis amounting to state welfare for foreign nations; continuous decisions of what is healthy, moral, and just–then forcing those decisions on all Americans–without majority consent.

    Our government is focused on their own power–and the microcosm they represent–not what is best for the nation.

    Bob Barr 2008–he will keep every promise- and veto any bill that reduces our liberty and rights under the constitution and bill of rights.

    I'm so over the GOP and Democrats–50+ years of corruption, greed, ignorance, and self-service. It's time we took a stand for real change!!

    August 7, 2008 at 9:19 am |
  18. deborah, OH

    Tom, you did a great job of sorting this out to me. So many questions, not many REAL answers, or fast enough answers.
    Keep up the good translating! lol.

    August 7, 2008 at 9:07 am |
  19. Annie Kate

    Long run is 5 to 10 years? To me that is the short run. If the candidates really want to give the voter the straight talk or be completely honest, both of them need to point out some of the problems and limitations around these problems. IF they manage voter expectations now we won't be wondering about unfulfilled promises later on.

    Annie Kate
    Birmingham AL

    August 7, 2008 at 8:43 am |
  20. Cindy

    Thanks Tom for breaking everything down for us and telling us the truth about what the candidates say.

    I still think that McCain has more of a grasp on what we need to do than Obama to get this economy back on track. The things that Obama is saying that he wants to do is only going to happen by raising taxes which we can not afford to let happen. How can we pay more taxes when most people can barely make ends meet now?

    And no way is he going to take us off of oil in 10 years. That is a joke. Funny that we get most of our oil from Canada, Nigeria and Mexico yet his little plan leaves them out . Did he even know that we only get 20% of our oil from the Middle East? It seems not.

    And I've always been saying that Obama saying he would create new jobs wouldn't amount to much seeing as when he does away with coal and oil he is putting MANY, MANY people out of jobs! So the "new" jobs are going to have to cover those people and then some to make a real difference.


    August 7, 2008 at 8:41 am |