Misrepresenting McAuliffe’s Budget Plan

October 24, 2013

Three new ads — two from the Ken Cuccinelli campaign and another from a super PAC that supports him — claim Terry McAuliffe’s budget plan would increase spending by $14 billion and that he would raise taxes on the typical family by $1,700 to pay for it.

But that’s based on an inflated Cuccinelli campaign estimate of what it would cost for McAuliffe to keep all his campaign promises, and how much in additional taxes would be needed to pay for that.

To be sure, McAuliffe, Virginia’s Democratic gubernatorial candidate, has offered no estimate on the cost of his ambitious proposals and few details on how to pay for them. Campaign officials describe them as “priorities” rather than “promises,” and say that the extent of them would be dictated by available revenue. They say McAuliffe is not proposing any tax increases.

It’s fair to question how McAuliffe would be able to accomplish his agenda on education and transportation and other programs without raising taxes (or abandoning or scaling back his proposals), but the ads leave the impression McAuliffe would immediately implement the full measure of his platform, without any offsetting spending cuts or reductions through efficiencies, and that he would increase taxes across-the-board to pay for the new spending.

The Cuccinelli campaign also interprets McAuliffe’s platform in ways that arguably inflate McAuliffe’s intentions, and subsequently its cost.

The first ad begins with the narrator asking and then answering her own question: “What’s Terry McAuliffe offering Virginia families? False, misleading attacks. Massive, wasteful spending. And $1,700 in higher taxes every year.”

Another Cuccinelli TV ad hits on the same themes.

This ad begins with a quote lifted from a Washington Post editorial that concluded McAuliffe’s budget plan is “not a sustainable or realistic” plan. The editorial notes that McAuliffe’s call to spend more on pre-kindergarten education, community colleges and other programs relies on savings McAuliffe said the state would realize by expanding Medicaid — as permitted under the Affordable Care Act. (Never mind that the Republican-controlled state Legislature has so far been unwilling to expand Medicaid.)

Under the Affordable Care Act, the federal government would pick up the entire cost of Medicaid expansion in the first few years. The editorial notes that some economists have predicted that states that expand Medicaid may receive a windfall due to a decreased state expense for emergency-room care and the fact that expanded Medicaid might result in job creation, and — subsequently — more taxes paid to the state. McAuliffe estimates that expanding Medicaid would net the state $500 million a year.

But the editorial warns that the estimates of how much revenue that would bring may be “optimistic,” and temporary. After the first few years, states would have to start picking up some of the tab for the Medicaid expansion. As a result, the editorial states, “Future governors would have to cut back on Mr. McAuliffe’s higher funding levels for education or find another source of revenue. … Expanding Medi­caid is the right thing to do. But it is not a sustainable or realistic way to finance new spending in other areas.”

The ad then goes on to claim that McAuliffe’s budget plan includes “$14 billion in new spending costing families $1,700 in new taxes every year.” The ad highlights part of a Washington Post headline that states, “McAuliffe’s campaign promises totals $14 billion.” Pictured, but not highlighted, is the fuller headline which reads “Cuccinelli says price tag for McAuliffe’s campaign promises totals $14 billion.” (The italics are ours.) In other words, the campaign ad is using the Washington Post as a vehicle to quote … the campaign.

A third ad, this one from the Common Sense Virgina PAC, hits on the exact same points.

According to the ad’s narrator, “McAuliffe’s promises will require a tax increase on the typical family of $1,700 per year. Are you willing to pay $1,700 more? That’s the price tag on a vote for McAuliffe.”

In the ad, the $1,700 figure is sourced, in tiny print, to a Washington Times article on Oct. 9.

But as was the case when the figure was sourced to the Washington Post in the Cuccinelli ad, the article in the Washington Times makes clear that this is a figure derived by the Cuccinelli campaign. Hence the headline on the story, “Kenneth Cuccinelli says Terry McAuliffe’s priorities would cost Virginia $14 billion.”

In other words, the ad cites as its source a newspaper quoting information provided by the campaign to that news source.

More important, how does the Cuccinelli campaign arrive at its figures? A release on the Cuccinelli campaign website provides estimates of the cost of various McAuliffe campaign promises. We’ll highlight a few of the biggest ticket items.

First, the Cuccinelli campaign puts a dollar figure on a pledge in the McAuliffe platform to “restore the standards of quality” of the state’s schools.

McAuliffe platform: Restoring the Standards of Quality and fully funding them. In recent years, economic hardship forced our leaders in Richmond to look for budget balancing strategies that led them to undermine the standards of quality, our curriculum, and standards for school services. It’s time to restore those standards and make sure our schools have the tools they need to get the job done.

That may sound like a vague promise, but the Cuccinelli campaign interpreted that to mean that McAuliffe was promising to immediately restore per pupil spending to 2007 levels (the highest level between 2000 and 2014). That translates to an additional $5 billion worth of spending over the next four years, the Cuccinelli campaign reports.

Here’s another example: According to the McAuliffe platform on higher education, McAuliffe would also like to “[control] costs and fees to keep our kids out of debt. Every student in Virginia deserves the opportunity to get a quality education and start their working lives without the burden of heavy debt.”

The Cuccinelli campaign interpreted that to mean that McAuliffe was promising to immediately assume every bit of debt estimated to be amassed by students at state colleges over the next four years. Total estimated cost: $3.8 billion over four years.

The Cuccinelli campaign also seized on McAuliffe’s pledge to raise the average teacher salary to the national average. That’s not actually in McAuliffe’s formal platform, which only states generically that McAuliffe would pay teachers “properly.”

But on the campaign trail, he has made it an issue. At the opening of a Fairfax campaign office in April, McAuliffe said, “We need to pay our teachers the national average.” And at a campaign event in Manassas, Va., in May, McAuliffe said, “So as governor, I want to make sure we pay our teachers the national average, in order for us to get the best possible teachers.” The Cuccinelli campaign estimated it would cost $2.8 billion over the next four years to raise Virginia teachers’ pay to the national average.

McAuliffe spokesman Josh Schwerin says his candidate never promised to immediately raise teacher pay to the national average or that the state would immediately assume all college student debt. Rather, he said, those are priorities that would be funded based on available state revenues.

“This is the difference between responsible budgeting and ideological budgeting,” Schwerin said. “It would be irresponsible to say how much you’re going to spend before knowing how much revenue there will be.”

Rather than promises, Schwerin said the platform lays out McAuliffe’s “spending priorities so voters know exactly where he stands.”

In addition to the projected savings from Medicaid expansion — which, again, the Washington Post concluded was not a “sustainable or realistic way to finance new spending” — McAuliffe has talked about “[saving] millions of taxpayer dollars through operational efficiencies” such as reducing government expenditures on energy, reducing state employee travel expenditures and implementing “technology-driven asset management strategies.”

The McAuliffe campaign doesn’t estimate how much money those “efficiencies” might free to fund McAuliffe’s priorities. But it’s one thing for Cuccinelli to attack the feasibility of McAuliffe’s ambitious plans given the state’s limited resources, and yet another to suggest McAuliffe would implement that agenda without offsets and pay for it with tax increases. The ads give the impression that McAuliffe has proposed a $1,700 tax increase on typical families to pay for his campaign agenda, and that’s not the case.

We should note that the first ad’s claims of “false” and “misleading” ads from the McAuliffe campaign accurately reflect the Washington Post Fact Checker and FactCheck.org conclusions about a McAuliffe ad attacking Cuccinelli’s tax plan.

In that case, McAuliffe seized on the lack of details provided by Cuccinelli about the tax exemptions and loopholes the Republican candidate would eliminate to offset his proposed tax cuts. Based on an assumption there would be no offsets, the ad suggested Cuccinelli’s tax plan would result in cutting education spending by hundreds of millions of dollars and laying off thousands of teachers.

Ironically, after the Cuccinelli ad points out that McAuliffe’s ad was called out by fact-checkers, the Cuccinelli ad proceeds to employ a similarly misleading technique. In this case, Cuccinelli seizes on McAuliffe’s lack of details about the cost of his proposals or how they would be financed, and then makes assumptions to suggest a hypothetical tax increase.

– Robert Farley