After President Joe Biden took a veiled swipe at him during the State of the Union address, Sen. Rick Scott released an ad labeling Biden a “tax cheat.” Biden was first scrutinized in 2019 for using what one nonpartisan expert described as an “aggressive” but not illegal tactic on his 2017 and 2018 tax returns to avoid paying a Medicare tax.

The White House is employing a new defense of that tax maneuver, one it says the IRS blessed, though some tax experts remain unconvinced.

Scott fired off his “tax cheat” allegation in an ad after Biden jabbed Republicans during the State of the Union, saying, “Instead of making the wealthy pay their fair share, some Republicans want Medicare and Social Security to sunset. I’m not saying it’s a majority.”

The line drew catcalls from some Republicans, including Rep. Marjorie Taylor Greene, who shouted “liar.” As we wrote, the president has exaggerated Republican support for a proposal from Scott that said: “All federal legislation sunsets in 5 years. If a law is worth keeping, Congress can pass it again.” Scott — who was chairman of the National Republican Senatorial Committee —has said his aim is to “fix” but not eliminate the programs.

In a tweet the day after the State of the Union, Scott claimed Biden lied about Republicans wanting to cut Social Security and Medicare — though Biden only said that “some Republicans” want to sunset the programs, which is what Scott proposed.

“Joe Biden just cut $280 billion from Medicare, and we know about his 80,000 new IRS agents,” Scott says in the ad. “But what you don’t know is that Joe Biden also cheated on his taxes and got away with it. Biden improperly used a loophole to dodge half a million dollars in taxes that should have gone to Medicare. And Now that Biden has ripped off Medicare for half a million dollars, he wants to close the loophole and raise your taxes. … Biden should resign.”

The claims about cutting $280 billion from Medicare and funding “80,000 new IRS agents” are misleading, as we have written repeatedly in previous posts. We’ll explain why later, but we wanted to first address the claim that Biden is a “tax cheat.”

Biden’s S Corporations

The issue of Biden’s taxes was first raised by the Wall Street Journal in July 2019 when Biden was running for president, shortly after Biden released federal and state tax returns for 2016, 2017 and 2018 on his campaign website.

At issue was the amount Joe and Jill Biden claimed as salary in two S corporations — CelticCapri Corp. and Giacoppa Corp. — for their book and speech income after Biden had left the vice presidency. People who set up S corporations still report their flow-through income on their personal tax returns and pay taxes on that income at their individual income tax rate. However, S-corporation owners can avoid paying an additional 3.8% Medicare tax on income designated as profits rather than salary, so long as they pay themselves “reasonable compensation.” The 3.8% Medicare tax is levied on high-income earners as part of the Affordable Care Act.

According to their 2017 and 2018 returns, of the roughly $13.3 million in combined revenue from the S corporations in those years, the Wall Street Journal says less than $800,000 was paid to the Bidens in salary, or less than 6%. As a result, they avoided paying a 3.8% Medicare tax on the vast majority of the S corporation income. They still paid pass-through individual income taxes on the profit and salary amounts.

Whether that amounts to “reasonable compensation” pushes into a bit of a gray area in tax law, Kyle Pomerleau, a senior fellow at the American Enterprise Institute, told us in a phone interview.

“I don’t think that there is any hard and fast rule,” Pomerleau said. “There’s a lot of leeway here,” and plenty of incentive for high-income earners to underestimate their wages relative to profit to lower their tax obligation.

Had all of the S corporation income been recorded as salary, or had the Bidens simply paid the taxes directly — instead of routing book and speech income through S corporations — the Wall Street Journal said they could have owed as much as $500,000 more in Medicare taxes for those years.

In the Wall Street Journal’s 2019 article, Steve Rosenthal, a senior fellow at the Tax Policy Center, called the Bidens’ tactic “pretty aggressive.”

Rosenthal told us he stands by that characterization.

“The Bidens apparently routed their book and speech income through S corporations,” Rosenthal said. “After doing so, they characterized much of this income as profits, and little as compensation. As a result, they avoided the 3.8 percent Medicare tax on their profits. Many view routing income for services through an S corporation as a ‘loophole.'” 

“I, personally, would not route income through an S corporation to save on Medicare taxes, but is it proper? Maybe yes, maybe no,” Rosenthal said. “The question is whether the amount allocated to compensation was ‘reasonable,’ which is a pretty loose standard. Was it illegal? No, illegal requires more extreme conduct, like the Trump Organization’s knowing violations of the tax law, which resulted in its criminal conviction for helping top executives evade taxes, including Medicare taxes.” (In 2016, Rosenthal wrote about how Trump also may have taken advantage of the S corporation rules to avoid paying Medicare payroll tax on a substantial amount of his income — the same type of accusation facing Biden.)

“Labelling tax positions is hard, as there is a wide range of aggressiveness (from lawfully exploiting a loophole to criminal fraud),” said Rosenthal, who co-wrote a blog post in January about the ambiguous terms used to describe ways to avoid or evade taxes. “I would not describe Biden as a tax cheat or a tax dodge. Biden reported his position clearly on his tax returns, which he released to the public. So, Biden did not hide anything which, to me, is important.”

“I would call this more tax avoidance than tax evasion, which is what Scott implies,” Pomerleau of AEI told us.

Biden Tried to Close ‘Loophole’

However one may characterize the Bidens’ tactic, it is worth noting, as the Wall Street Journal did, that the Obama administration tried, unsuccessfully, to close this tax “loophole.”

The technique of setting up S corporations to avoid paying payroll taxes became known as the “Gingrich/Edwards” tax loophole, as it was employed by Newt Gingrich, a former speaker of the House and GOP presidential contender, and John Edwards before he became a senator and Democratic vice presidential nominee. President Barack Obama called for closing the so-called loophole in his 2015 budget, but it never passed in Congress.

The Biden administration, too, has tried to close it. The initial House-backed version of the Build Back Better plan included Biden’s call to close the so-called S corporation loophole for those with incomes higher than $400,000. But that never made it into the scaled-back legislation that finally passed. And so what might be technically legal might also be deemed by some hypocritical for Biden to use.

Robert Willens, a tax expert and adjunct professor at Columbia University’s Graduate School of Business, said in an email that what the Bidens did is “a common tactic used by shareholders of ‘S’ corporations to reduce their medicare and payroll tax liabilities. This is done by reporting an unreasonably low amount of compensation for their services rendered to the ‘S’ corporation.”

“The I.R.S. has had great success in challenging taxpayers who employed this strategy and, to my knowledge, has never lost a case in which it was asserted that the compensation was unreasonably low,” Willens told us. “Wouldn’t you think that a business that earned approximately $10 million, in which capital was not a material income-producing factor, and in which the personal services provided by the shareholders accounts for the corporation’s success, should compensate its shareholder/employees more generously than the President’s ‘S’ corporation did? What is reasonable compensation in a case like this one is a question of fact [for the IRS or perhaps a judge or jury to decide] but it seems to be substantially higher than … the amount reported as such by President Biden.

“I wouldn’t label him a ‘tax cheat,'” Willens said. “He was simply employing a commonly used strategy and may not have even been aware of the benefits he could obtain by understating his compensation. This is just a normal, commonly employed, tax planning technique. He may have thought, in good faith, that the compensation he reported was reasonable.”

Nevertheless, back in 2019, the Biden campaign defended the tax returns, telling the Wall Street Journal: “The salaries earned by the Bidens are reasonable and were determined in good faith, considering the nature of the entities and the services they performed.”

New White House Defense

Now, however, the Biden administration is making a different argument. A White House official told FactCheck.org that during an audit of the Bidens’ 2021 tax return, “the IRS did review the S corporation income, including whether the 3.8% Medicare tax should apply. And the IRS conclusively agreed it did not apply.” (The tax returns of all presidents are supposed to be audited by the IRS while they are in office, although that did not happen in Trump’s first two years.)

“The President and First Lady fully and accurately reported their 2017 and 2018 taxes and the IRS never challenged those tax years,” the White House official said.

“Notably, this has nothing to do with the ‘S corporation loophole,'” the White House official said. “During the recent audit of the President and First Lady’s 2021 taxes, the IRS agreed that the President and First Lady’s royalty income would never be subject to the 3.8% Medicare tax, whether earned inside or outside of an S corporation, because an older federal regulation controls. Under Treas. Reg. § 1.469-2T, because the royalty income stems from the licensing of their own creative works, it’s always … characterized as non-passive income derived in the ordinary course of a trade or business. That means it should never be subject to the 3.8% Medicare tax.”

The official said royalties made up “the lion’s share of income in 2017 and 2018 and it represents all S Corp income during the presidency.”

The ‘S corporation loophole’ has never applied to the Bidens, the official said, “since they’re licensing their own creative works.”

Rosenthal and Willens aren’t buying the argument.

Rosenthal said the White House’s argument might make sense in 2021, when “Biden presumably devoted all his attention to the Presidency.” Because of that, Rosenthal said, “Biden could reasonably argue that the distributions from his S corporation” in 2021 — about $62,000 — “were not subject to self-employment taxes.” In that year, he said, Biden could argue that he received royalties and other income from his S corporation “effectively as an investor, not as an author.”

“They can’t take that argument back to 2017 and 2018,” Rosenthal said.

In 2017 and 2018, after Biden left the vice presidency, he was essentially in the business of writing books and making speeches, Rosenthal said.

Willens also disputed the White House argument, saying that while it is sometimes the case that “royalties constitute portfolio income, rather than passive income,” that’s not the case with the Bidens as “the royalties are derived in the ordinary course of licensing such property. Royalties are presumed to be so derived if the person receiving such royalties ‘created the property.'”

The question, Rosenthal said, is why, when it was doing the 2021 audit, didn’t the IRS go back to 2017 and 2018 and require the Bidens to make an adjustment.

White House spokesman Andrew Bates said the IRS did consider the 2017 and 2018 filings, though it did not formally audit those returns.

“During the first routine audit of this administration, tax years 2017 and 2018 were discussed with the IRS, who examined the finances of the s-corporations going back to their inception in 2017,” Bates said. “They challenged nothing.”

Rosenthal would like to know why, and he said that if he were the chairman of the House Ways and Means Committee, he would seek IRS records related to discussions of the 2017 and 2018 returns and the S corporations to find out why the IRS didn’t think an upward adjustment was warranted.

But it is probably too late for the IRS to try to recoup any money. The IRS typically has three years to go after someone’s back taxes. Given that the Bidens amended their 2018 returns in July 2019, the three-year window would have closed last July.

“Yes, it’s too late for the I.R.S. to audit those tax returns since the statute of limitations has long passed,” Willens told us.

Medicare ‘Cuts’ and IRS Agents

As for the other claims in Scott’s ad, this isn’t the first time Scott has said the Inflation Reduction Act passed by Democrats would cut Medicare by $280 billion. But as we have written, that’s misleading. The law seeks to lower prescription drug costs by allowing Medicare to negotiate some prescription drug prices.

The Medicare provisions would reduce federal deficits by about $300 billion over 10 years. But as the Committee for a Responsible Federal Budget explains, “While these policies do reduce the cost of Medicare, they do so by lowering prescription drug costs, not by cutting benefits. In fact, we estimate the policies as a whole would improve benefits by lowering premiums and out-of-pocket costs — including through a $2,000 annual cap on out-of-pocket costs.”

Scott is also wrong about the law including money for 80,000 new IRS “agents.” As we have written, the law does include roughly $79 billion for the IRS over 10 years, but most of the new hires it pays for will replace retiring or departing workers and most new positions would be in customer service, the Treasury Department told us. Some hires would be tax enforcers, but their focus would be auditing high-income earners to make sure they pay the taxes they legally owe the government, administration officials have said.

We should note that while Scott didn’t characterize the new IRS hires as an “army” that could “carry guns” (as Trump once did), the senator’s TV ad shows an IRS agent firing a weapon at a gun range. Only IRS “special agents” in the Criminal Investigation division are law enforcement officers who are authorized to carry guns.

What’s ironic is that immediately after criticizing Biden for hiring new IRS enforcement agents, Scott then criticizes Biden for avoiding some Medicare taxes. Going after high-income taxpayers who underreport salary in S corporations to avoid Medicare taxes is exactly the kind of thing new IRS agents might do.

“The IRS is completely outgunned,” Rosenthal said, referring to the small number of IRS revenue agents confronting a large amount of underreported taxes.

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In a “fireside chat” with actress Priyanka Chopra, Vice President Kamala Harris said the Biden administration is “thinking about the families in Florida [and] in Puerto Rico” and “what we need to do to help them in terms of an immediate response and aid.”

But she also talked about the long-term need to ensure equitable treatment of “our lowest income communities and our communities of color that are most impacted by these extreme [climate] conditions … that are not of their own making.”

Her remarks, which she made Sept. 30, set off a tsunami of criticism from Republicans, including U.S. Sen. Rick Scott of Florida, who accused the vice president of saying hurricane relief from the Federal Emergency Management Agency would be based on race.

“Harris said yesterday that — or day before yesterday — that, you know, if you have a different skin color, you’re going to get relief,” Scott said in an Oct. 2 interview on CBS’ “Face the Nation.”

Host Margaret Brennan corrected Scott, saying: “That’s not what the vice president said.” Scott replied, “That’s exactly what she meant.”

But Scott was just repeating what had become a Republican talking point about Harris’ response to Hurricane Ian, which devastated southwest Florida and South Carolina.

Two days earlier, the rapid response director of Florida Gov. Ron DeSantis’ reelection campaign responded to a tweet from @EndWokeness that misleadingly claimed, “Kamala on Hurricane Ian relief: The Biden administration will focus on ‘giving resources based on equity’ by directing funds to ‘communities of color.'” Christina Pushaw, the DeSantis aide, retweeted that comment and added, “This is false. @VP’s rhetoric is causing undue panic and must be clarified. FEMA Individual Assistance is already available to all Floridians impacted by Hurricane Ian, regardless of race or background.”

Conservative commentators and news outlets made similar claims.

On Oct. 3, Rep. Marjorie Taylor Greene tweeted: “Hurricanes do not discriminate. And neither should the federal government giving aid to people suffering from the devastation of Hurricane Ian. Is your husband’s life worth less bc he’s white?”

Both the FEMA administrator and the White House press secretary said that hurricane aid would be distributed based on need and help everyone who needs it.

“I was on the ground Friday and Saturday, and I committed to the governor then that we are going to provide assistance to all Floridians because we know that there are people that are just completely devastated from the storm. We are going to be there to support everybody that needs help,” said FEMA Administrator Deanne Criswell, who appeared on “Face the Nation” shortly after Scott.

At a press briefing on Oct. 3, White House Press Secretary Karine Jean-Pierre was asked about Republican claims that Harris had said “people of color will get an advantage of some kind with the rebuilding efforts.” Jean-Pierre said the administration is “committed to quickly getting resources to all communities impacted,” insisting Harris’ remarks have been distorted.

Jean-Pierre, Oct. 3: So that is not what the vice president said. The vice president was clearly talking about long-term investment, not FEMA aid, for hurricane response efforts.

The vice president and the president have been clear that the federal government has been and will continue to be there for all Americans recovering from these devastating storms, as we’re seeing the president and the first lady do today and as we’ll see them do, clearly, in Florida on Wednesday.

We are committed to quickly getting resources to all communities impacted, period, full stop. But we also know that some people, particularly in lower-income communities, have a hard time accessing that help. That’s why this administration has also made it a priority to remove barriers and ensure that everyone, regardless of their ZIP Code, can access federal resources. And that’s what she was talking about.

Harris made her remarks during an interview with Chopra at a Democratic National Committee forum on women’s leadership.

Chopra, who is from India, brought up Hurricane Ian in the context of the need for a global response to climate change and the need to help “the poorest countries [that] are affected the most.” It was a long, multiprong question that got an even longer response.

Here’s the exchange with Harris that caused the kerfuffle.

Chopra, Sept. 30: So just talking about a point that I am very concerned about, and I — as I’m sure so is this room: You and the administration obviously are working around the clock right now to support relief efforts in Florida and to prepare citizens as Hurricane Ian now is closing in on South Carolina.

So, extreme weather conditions like this are becoming obviously more frequent and more severe. And I wanted to acknowledge the administration for passing the biggest climate legislation – legislation in history earlier this year because it is a fact that America’s leadership sets an example to other major economies around the world, which are truly dragging their feet when it comes to doing their bit.

So can you talk just a little bit about the relief efforts, obviously, of Hurricane Ian and what the administration has been doing to address the climate crisis in the states?

But — and just a little follow up, because this is important to me: We consider the global implications of emissions, right? The poorest countries are affected the most.

Harris: Yeah.

Chopra: They contributed the least and are affected the most. So how should voters in the U.S. feel about the administration’s long-term goals when it comes to being an international influencer on this topic?

Harris: I’m going to unpack that question.

Chopra: I’m going to ask you packed and loaded questions because I’ve been given a little bit of time.

Harris: So, first of all, again, thanks to the leadership in this room, which were part of the propelling force in the 2020 election so that we could actually be in office — because one of the requests — dare I say, “demands” — of this group was, “Do something about the climate crisis.”  And so, we were able to be elected. Thank you, everyone here.

And then have the … $370 billion in the Inflation Reduction Act dedicated to address the climate crisis — not only because it is a crisis, as it evident — as evidenced, as you have mentioned by Ian, by the wildfires happening in California, the floods, the hurricanes, but also because of America’s leadership and what it should be globally on this issue. And so that has happened, and it will propel a lot of good work.

The crisis is real, and the clock is ticking. And the urgency with which we must act is without any question.

And the way that we think of it and the way I think of it is both in terms of the human toll and — I know we are all thinking about the families in Florida, in Puerto Rico with Fiona — and what we need to do to help them in terms of an immediate response and aid, but also what we need to do to help restore communities and build communities back up in a way that they can be resilient — not to mention, adapt — to these extreme weather conditions, which are part of the future.

On the point that you made about disparities: You know, when I was — back when I was District Attorney of San Francisco — I was elected in 2003 — I started one of the first environmental justice units of any DA’s office in the country focused on this issue. And in particular on the disparities, as you have described rightly, which is that it is our lowest income communities and our communities of color that are most impacted by these extreme conditions and impacted by issues that are not of their own making. And so, when —

Chopra: And women.

Harris: Absolutely. And so, we have to address this in a way that is about giving resources based on equity, understanding that we fight for equality, but we also need to fight for equity; understanding that not everyone starts out at the same place. And if we want people to be in an equal place, sometimes we have to take into account those disparities and do that work.

But also, I will say, as a former prosecutor, part of this issue also has to be about enforcement and, where appropriate, making sure that the bad actors pay a price for what they do that is directly harming communities in terms of their health and wellbeing.

So, when we think about policy then, there are many aspects to it, including something that the president and our administration and I are very excited about, which is the opportunity that moving towards a clean energy environment and industry — what it will do in terms of job creation and building up our economy. It’s tremendous.

So, there are many benefits to this work.

And to your point about the global piece: Among the leaders that I have been meeting and convening — just recently, in fact — and now this was, I think, the third time — I convened the presidents and prime ministers of the Caribbean countries; there’s an organization called CARICOM.  And I convened them just a couple weeks ago.  And the consistent discussion we are having is exactly your point, which is: We are one of the greatest emitters in the world and the Caribbean countries, for example, are paying the biggest price. They are some of the lowest emitters, yet the erosion that they are experiencing to their island nations is profound.

And when you combine that with the fact that nations like that — their biggest source for their GDP is tourism, and what the climate crisis and extreme weather conditions do in terms of then plummeting their incoming resources, not to mention what we are expecting all good nations to do to contribute to mitigation and adaptation.

So there is still a lot of work to be done to recognize the equities. And I will say, for us, as the United States, to own responsibility for what we rightly should do to recognize these disparities and contribute in a way that is fair with the goal of equitable priorities.

Nandita Bose, the White House correspondent for Reuters and the only print reporter at the event, said in a Twitter thread that Harris’ remarks were being “deliberately distorted.”

“So I was the only WH pool print reporter in the room on Friday at the DNC Women’s Leadership Forum and heard the remarks from @VP on climate change and Hurricane Ian, which I see are being deliberately distorted,” Bose tweeted.

Readers can judge for themselves what Harris meant to say. What the vice president talked about, though, was the “work to be done to recognize the equities” needed to help low-emitting, poorer countries often bearing the brunt of the consequences of climate change, and the need in the U.S. to make sure that low-income communities and communities of color are not left behind in long-term mitigation plans.

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The Inflation Reduction Act proposes to raise over $700 billion in new revenues over 10 years to be spent on energy, climate change initiatives, health care and deficit reduction. But not all of those revenues come via higher taxes. More than half comes from health care savings and from beefed up IRS tax enforcement.

Nonetheless, on CBS’ “Face the Nation” on Aug. 7, Sen. Rick Scott, chairman of the National Republican Senatorial Committee, twice wrongly claimed the bill would raise taxes by $700 billion.

Scott, Aug. 7: On top of that, I mean, they’re going to raise taxes by over $700 billion. And let’s remember, companies don’t end up paying the taxes. Shareholders pay the taxes. Lower income for the employees paid the taxes. Less investment pays the taxes.

Scott, Aug. 7: It’s going to help Republicans, raising taxes $700 billion, cutting Medicare $280 billion, raising gas taxes, having 87,000 more IRS agents.

But he’s wrong about the bill “raising taxes $700 billion” and “cutting Medicare.”

An initial analysis of the bill by the nonpartisan Joint Committee on Taxation identified more than $300 billion in higher taxes in the Inflation Reduction Act, most of it from a corporate minimum tax of 15% on companies that report average profits in excess of $1 billion over a three-year period.

Much of the remaining revenue-raisers come from health care savings — estimated by the Committee for a Responsible Federal Budget at about $322 billion over 10 years — and from investing $80 billion in IRS tax enforcement, which is expected to result in a net of $124 billion in new revenues over 10 years.

On the spending side, the Inflation Reduction Act would invest about $369 billion in energy and climate change incentives, including tax credits for the production of solar and wind energy equipment and the purchase of electric vehicles. (So, there are tax credits in addition to tax increases.) There’s also roughly $100 billion in health care expenditures in the bill, mainly for an extension of subsides for health insurance policies purchased via the Affordable Care Act exchanges.

“We’re still waiting on final numbers,” from the JCT’s score of the amended version that was approved by the Senate, Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, told us via email. “But I think it will be something like $250b of gross spending cuts, over $300b-$350b of gross tax increases, and $200b of revenue from higher tax compliance. But the tax increases will mostly pay for tax cuts in the form of energy credits, so the net tax cut will be small.”

“You are correct that the $700 billion is not all taxes, some of that is the $280 billion being cut away from the Medicare program which is on track to go broke in 2028,” McKinley Lewis, communications director for Scott, told us via email. “We look forward to you highlighting that fact.”

Lewis referred us to this Aug. 8 tweet from Scott: “With Medicare on the brink of going broke in a few years, Senate Dems just voted to pull $280 BILLION away from the program & put future benefits for our seniors at even greater risk.” (An ad from a group called American Prosperity Alliance makes a similar claim that the bill “will strip $300 billion from Medicare, money seniors rely on for their medicine, their treatments, their cures.”)

But that’s misleading. The bill seeks to lower prescription drug costs by allowing Medicare to negotiate some prescription drug prices. The legislation also repeals a Trump administration rule that would have stopped negotiated rebates in Medicare Part D between pharmaceutical manufacturers and either pharmacy benefit managers or health plan sponsors, as the Kaiser Family Foundation explains. The rule had been delayed and had never taken effect.

The Congressional Budget Office estimated the Medicare provisions in an earlier version of the bill would reduce the deficit by about $288 billion over 10 years.

As the Committee for a Responsible Federal Budget explains, “While these policies do reduce the cost of Medicare, they do so by lowering prescription drug costs, not by cutting benefits. In fact, we estimate the policies as a whole would improve benefits by lowering premiums and out-of-pocket costs — including through a $2,000 annual cap on out-of-pocket costs.”

Also, Medicare isn’t “on the brink of going broke in a few years,” as Scott said in his tweet. As we have explained, the Hospital Insurance Trust Fund — which helps pay for inpatient hospital care under Medicare Part A — is expected to be depleted in several years, but “continuing total program income will be sufficient to pay 91 percent of total scheduled benefits,” the Medicare Board of Trustees said in its 2021 annual report. That’s because the trust fund is largely financed through a payroll tax, which is currently 1.45% for the employer and 1.45% for the employee for a total of 2.9% on earnings up to $200,000 (and an additional 0.9% tax on employees for earnings over $200,000).

If realized, the Medicare savings in the bill actually would extend the solvency of the program.

When he said the Democrats are “raising taxes $700 billion,” Scott was also including revenues in the bill from enhanced IRS enforcement of existing tax laws, Lewis said. Specifically, the bill would increase IRS funding by $80 billion over 10 years. The tighter enforcement is estimated to bring in $204 billion, netting $124 billion in additional revenue.

“If the IRS is collecting more money, it’s because they are collecting more taxes from American families and businesses,” Lewis said.

But it’s a stretch to call that raising people’s taxes. Rather, it is making sure people pay the taxes they already owe.

As CRFB noted, “every past president from Ronald Reagan to Donald Trump has supported reducing the tax gap with stronger IRS funding,” meaning the gap between taxes owed and taxes actually paid. Trump’s “last two budgets included between $60 billion and $90 billion of additional revenue from improved tax compliance,” CRFB said.

There were some last-minute bill changes prior to Senate passage of the Inflation Reduction Act that were not factored into JCT’s initial analysis. For example, the Senate bill no longer includes a proposal to end the “carried interest” tax benefit that allows managers of investment funds to pay a lower capital gains tax rate, rather than income tax rates. That provision would have raised $13 billion over 10 years, according to the JCT. In the final Senate bill, the Democrats instead added a 1% excise tax on stock buybacks.

“The bill changes over the weekend are roughly offsetting in terms of revenue, so the tax revenue raised is about the same,” William McBride, vice president of federal tax and economic policy at the Tax Foundation, told us via email. “So, based on CBO’s score at the end of last week, there is a little more than $300B in tax increases over the budget window through 2031.”

The Senate vote came down strictly on partisan lines, and Vice President Kamala Harris broke the 50-50 tie to advance the bill to the House. Speaker Nancy Pelosi has said she expects the House to approve the bill on Aug. 12.

Update, Aug. 18: Biden signed the Inflation Reduction Act into law on Aug. 16. 

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As part of his plan to downsize the federal government, Republican Sen. Rick Scott says he wants all federal legislation to “sunset” in five years, and “[i]f a law is worth keeping, Congress can pass it again.” Well, Social Security, Medicare and Medicaid were all created by legislation. And now Democrats are saying Republicans want to end those programs.

But Scott, who is chairman of the National Republican Senatorial Committee, says he doesn’t want to end those programs, and he doesn’t know any Republican legislators who do. 

Rather, Scott says he wants to “review,” “fix” and “preserve” those social programs so that they are financially solvent for the long term. Scott has not detailed how exactly he wants to change the programs, and whether that might mean fewer benefits. Nonetheless, Democrats go too far in ads and social media claims that say Scott, and all Republicans by extension, want to “end” or “phase out” those popular programs.

Senate Minority Leader Mitch McConnell flatly said that, if the Republicans win control of the Senate, sunsetting Social Security and Medicare “would not be a part of our agenda.”

Scott’s ’11-Point Plan’

Outlining his vision for what he thinks a Republican-controlled Congress should do after the 2022 elections, Scott in February put out “An 11-Point Plan to Rescue America.”

Under Point Six, which aims to shrink the size of the federal government, Scott writes, “All federal legislation sunsets in 5 years. If a law is worth keeping, Congress can pass it again.” Scott also writes that he would: “Force Congress to issue a report every year telling the public what they plan to do when Social Security and Medicare go bankrupt.”

The idea of sunset provisions — which the nonpartisan Congressional Research Service defines as a “concept [that] provides for programs and agencies to terminate automatically on a periodic basis unless explicitly renewed by law” — is not new. President George W. Bush called for the creation of a federal sunset commission in his fiscal year 2006 budget, and Rep. Kevin Brady, now Republican leader of the House Committee on Ways and Means, and other Republicans in Congress have repeatedly introduced sunset commission bills, or bills that include sunset measures.

Scott never specifically mentioned Social Security, Medicare and Medicaid in his call for sunsetting all federal legislation in five years, but he has acknowledged that they would be included. Scott says his aim would be to “fix,” not end, the programs. But as the New York Times wrote, it “would leave the fate of Medicare, Medicaid and Social Security to the whims of a Congress that rarely passes anything so expansive.”

Still, some Democratic attacks have attached wider Republican support to the plan than it appears to enjoy, and have gone too far with claims that Republicans would necessarily do away with the social safety net programs entirely.

“What would they [Republicans] do if they were in the majority?” Democratic Sen. Debbie Stabenow said at a Senate Budget Committee hearing on March 30. “So under their plan, all federal laws sunset in five years. And of course, if you think about it, the implications of that are shocking. I mean that would mean an end to Medicare and Social Security and to Medicaid, which provides health care coverage for 86 million Americans including our seniors in nursing homes.”

Other Democratic Attacks

On April 28, the Democratic Senatorial Campaign Committee tweeted that the “Senate Republicans’ plan would END” Social Security.

46.9 million retired workers
8.0 million workers with disabilities
3.9 million widows and widowers
2.3 million spouses
1.1 million adults with disabilities since childhood
2.7 million children

All rely on Social Security. Senate Republicans' plan would END it. pic.twitter.com/RUZ89COcVK

— Senate Democrats (@dscc) April 28, 2022

The tweet includes a video that starts with an edited clip of Fox News anchor John Roberts asking Scott about his plan.

“You recently put out an 11-point plan to rescue America,” Roberts said. “That would raise taxes on half of Americans and potentially sunset programs like Medicare, Medicaid, and Social Security.”

Text in the video then states, “Republicans’ plan would make Social Security disappear,” warning that “nearly 70 million Americans would lose critical monthly payments.”

The Democratic attacks have also found their way into political campaign ads.

An ad from the DSCC says “Republicans’ plan” would “end Social Security” and “end Medicare.” It cites as a source a March 28 story in the Miami Herald about Scott’s exchange with Roberts on “Fox News Sunday.” But the article doesn’t say Scott’s plan would end those programs, and instead quotes Scott as saying he wants to “preserve those programs.”

A campaign ad from Alex Lasry, a U.S. Senate candidate in Wisconsin, also uses Scott’s plan as a basis for the claim that Republican Sen. Ron Johnson “is supporting the Republican plan that phases out Social Security and Medicare.”

On March 7, Johnson put out a press release offering general support for Scott’s plan, though it made no mention of Social Security and Medicare. Jake Wilkins, communications director for the Johnson campaign, told PolitiFact Wisconsin that Johnson “had repeatedly said we need to save these programs for future generations.” He added, “There is no ‘plan’ put forward by the Republican Party to eliminate Medicare and Social Security.”

Scott on Social Security, Medicare

In the same “Fox News Sunday” interview featured in the DSCC ad and tweet, Scott went on to say that he had no intention of eliminating Social Security, Medicare or Medicaid.

“Here’s what’s happening,” Scott said. “No one that I know of wants to sunset Medicare or Social Security, but what we’re doing is we don’t even talk about it. Medicare goes bankrupt in four years. Social Security goes bankrupt in 12 years. I think we ought to figure out how we preserve those programs. Every program that we care about, we ought to stop and take the time to preserve those programs.”

We wrote at the time that Scott went too far in claiming that Medicare will go “bankrupt” in four years and Social Security in 12 years. Government trustees project that certain Medicare and Social Security trust funds would become depleted by then, but payments would continue, albeit at a reduced rate.

As we said, Scott has not outlined how he would change Social Security and Medicare, and whether that might include a reduction in benefits. But he has not advocated eliminating the programs entirely.

And although Democrats have labeled Scott’s plan broadly as the “Senate Republicans’ plan,” there’s reason to believe it may not have widespread support in the party.

At a Senate Republicans press conference on March 1, and with Scott standing right behind him, Sen. Mitch McConnell said this: “If we’re fortunate enough to have the majority next year, I’ll be the Majority Leader. I’ll decide in consultation with my members what to put on the floor. And let me tell you what would not be a part of our agenda. We will not have as part of our agenda a bill that raises taxes on half of the American people and sunsets Social Security and Medicare within five years. That will not be part of a Republican Senate majority agenda.”

As our regular readers well know, claims about the other party wanting to dramatically cut or eliminate Medicare or Social Security are typical campaign fare. And so this claim tied to Scott’s plan seems likely to come up often between now and November.

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In promoting his plan to “rescue America,” Sen. Rick Scott went too far in claiming that Medicare will go “bankrupt” in four years and Social Security in 12 years. Government trustees project that certain Medicare and Social Security trust funds would become depleted by then, but payments would continue, albeit at a reduced rate.

Scott made his remarks March 27 on “Fox News Sunday” when host John Roberts asked the Florida Republican about “An 11-Point Plan to Rescue America” — which is Scott’s blueprint for a Republican-controlled Congress after the 2022 elections.

Scott, chairman of the National Republican Senatorial Committee, discusses Medicare and Social Security in the plan under “Point Six: Government Reform/Debt.”

That section of his plan calls for sunsetting “all federal legislation” in five years, forcing Congress to act if it wants to keep federal programs. “If a law is worth keeping, Congress can pass it again,” the plan says. It also calls on “Congress to issue a report every year telling the public what they plan to do when Social Security and Medicare go bankrupt.”

Roberts asked why Scott’s plan would include a tax on all Americans and potentially sunset Medicare and Social Security. Scott dismissed the premise of Roberts’ question as “Democrat talking points,” even though Senate Republican Leader Mitch McConnell has said the same thing, as Roberts pointed out. (We wrote about Scott’s tax proposal here.)

“No one that I know of wants to sunset Medicare or Social Security, but what we’re doing is we don’t even talk about it,” Scott told Roberts. “Medicare goes bankrupt in four years. Social Security goes bankrupt in 12 years. I think we ought to figure out how we preserve those programs.”

For sure, the long-term financing of Social Security and Medicare has been and remains a problem, but – as we’ve written over the years — such “bankruptcy” claims could leave the wrong impression. Neither program is going out of business.

The two Social Security trust funds — the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund — combined would be depleted by 2034, according to the most recent report released in August by the Social Security Board of Trustees. That’s the basis of Scott’s claim that Social Security will go “bankrupt” in 12 years.

Even if the trust funds are depleted, though, the program would still collect enough in annual tax revenues and interest payments to pay about three-quarters of the benefits now promised. 

“After the projected trust fund reserve depletion in 2034, continuing income would be sufficient to pay 78 percent of program cost, declining to 74 percent for 2095,” a summary of the report says.

As the summary further explains, the trust funds receive income from a 12.4% payroll tax on earnings (up to a maximum of $142,800 in 2021). Employees and their employers each pay a 6.2% payroll tax, while self-employed workers pay the full 12.4%. In addition, more than 40% of Social Security beneficiaries pay income taxes on part of their benefits, and part of those tax revenues go to the program’s trust funds, as does interest on trust fund reserves.

As for Medicare, the Hospital Insurance Trust Fund — which helps pay for inpatient hospital care under Medicare Part A — is expected to be depleted in four years, by 2026, according to the Medicare Board of Trustees. But the “continuing total program income will be sufficient to pay 91 percent of total scheduled benefits,” according to a summary of the report.

“Under current law, scheduled HI tax and premium income would be sufficient to pay 91 percent of estimated HI cost after trust fund depletion in 2026, declining to 78 percent by 2045, and then gradually increasing to 91 percent by 2095,” the summary says.

The HI trust fund is financed largely (see table 4) through a payroll tax, which is currently 1.45% for the employer and 1.45% for the employee for a total of 2.9% on earnings up to $200,000. There is an additional Medicare payroll tax of 0.9% that individual employees must pay on earnings above $200,000. The HI trust fund also receives funding from income tax revenue on Social Security benefits, interest on trust fund reserves, beneficiary premiums and other sources.

Also, the trustees have been warning about the depletion of the Part A trust fund since 1970, but, as the Congressional  Research Service explains: “The HI trust fund has never become insolvent.” (See CRS chart below.) Congress has always taken some action, such as raising payroll taxes or restraining spending growth, to extend the life of the fund.

There is another trust fund — the Supplemental Medical Insurance Trust Fund — for “Part B, which helps pay for services such as physician and outpatient hospital care, and Part D, which covers prescription drug benefits,” according to a summary of the trustees’ report. But that fund “is adequately financed into the indefinite future because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs,” the summary says.

In a Fox Business opinion piece published in May 2020, Scott said Congress must deal with “our looming fiscal crisis” caused by “excess government spending and borrowing.” In that same piece, he said that Social Security and Medicare “must be preserved, reformed and protected.” We asked his office how he would reform the programs, but it did not respond. The senator’s 11-point plan also does not provide any proposal for changing the programs to make them more sustainable. 

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A multipart policy plan released by Sen. Rick Scott on Feb. 22 says “all Americans” should have to pay “income tax,” while saying that “over half of Americans” currently do not.

But in an interview later that day, after criticism from congressional Democrats, the Florida senator falsely claimed that he had not suggested increasing federal income taxes for that many people.

“Of course not,” Scott said when Fox News’ Sean Hannity asked him if his plan called for raising taxes “on more than half of Americans,” including seniors and working families, as Senate Majority Leader Chuck Schumer had tweeted.

Hannity told Scott that he could not locate the proposed tax increase in Scott’s plan and joked that it may have been written in “invisible ink.”

We found it on page 35 of the proposal — titled “An 11-Point Plan to Rescue America” — which clearly states: “All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax.”

That is presumably a reference to recent estimates of the percentage of U.S. “tax units” who owed no federal income tax.

In an August 2021 analysis, the nonpartisan Tax Policy Center estimated that about 102 million, or 57.1%, of all tax units would have zero or negative income tax liability in 2021 — down slightly from the nearly 107 million, or 60.6%, of all tax units who owed no federal income tax in 2020.

TPC defines a tax unit as “an individual, or a married couple, that files a tax return or would file a tax return if their income were high enough, along with all dependents of that individual or married couple.” Those who owe no income tax to the federal government usually earn too little or qualify for a variety of deductions and refundable tax credits that negate any income tax they would have owed.

From 2011 to 2019, before the COVID-19 pandemic, the estimated percentage of tax units with no income tax liability varied between 42% and 45%. The large increase in the last two years was “due to a combination of a poor economy and multiple rounds of tax-based assistance to hard-pressed households,” as TPC senior fellow Howard Gleckman explained in a blog post last summer.

Beginning in 2022, assuming the economic recovery continues, TPC projects that the percentage not owing any federal income tax will return to pre-pandemic levels and then decline through 2031. That’s based on tax policies that were in effect as of August 2021, TPC says.

So how does Scott justify denying that his proposal would be an income-tax increase for all of those people?

In a statement to FactCheck.org, a spokesman for Scott said the senator actually wants to focus on only a subset of U.S. residents who don’t pay federal income taxes nor payroll taxes for Social Security and Medicare.

“Senator Scott believes that everyone should pay their fair share, and everyone should have skin in the game,” said Chris Hartline, communications director for the National Republican Senatorial Committee, which Scott heads. “There are too many people who are benefiting from government services without contributing to the system. That obviously would not include retirees who have paid plenty in taxes or working Americans who are paying into the system through either income tax or payroll tax. He believes there are too many able-bodied Americans who are choosing not to work, partly due to policies from Joe Biden and the Democrats, that have expanded the welfare state and paid people more to not work than to work. That should change.”

But nowhere in Scott’s plan does it say he was referring to only able-bodied, nonretirees who receive government benefits but don’t work and don’t pay federal income taxes or payroll taxes. That very specific description does not apply to “[o]ver half of Americans” — the language used in Scott’s plan.

TPC estimated that 19.3% — or 34.4 million — of all tax units would owe neither federal income nor payroll taxes in 2021. That was down from an estimated 20.5%, or 36 million tax units, who did not have to pay either tax in 2020 — but up from 16.8%, or 29.2 million tax units, who were exempt from those taxes in 2019.

Even those estimates include more people, such as elderly and disabled Americans, than the narrow group that Scott’s spokesman now claims he wants to target.

Update, June 9: CNN reported that, on June 9, Scott changed the income tax language in his proposal. It now reads: “Able bodied Americans under 60, who do not have young children or incapacitated dependents, should work. We need them pulling the wagon and paying taxes, not sitting at home taking money from the government. Currently, far too many Americans who can work are living off of the hard work of others, and have no ‘skin in the game’. Government must never again incentivize people to not work by paying them more to stay home.”

---

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]]> https://www.factcheck.org/2020/02/senate-majority-pac-4/ Wed, 19 Feb 2020 19:10:59 +0000 https://www.factcheck.org/?p=158759 A super PAC “solely dedicated to building a Democratic majority in the U.S. Senate.”

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]]> Political leanings: Democratic

2018 total spending: $165.6 million

The Senate Majority PAC is a super PAC that describes itself as “solely dedicated to building a Democratic majority in the U.S. Senate.”

In the 2018 election cycle, the Senate Majority PAC raised more than $164 million — the most of any super PAC, according to an analysis of campaign finance data by the Center for Responsive Politics. It spent $165.6 million, including nearly $112 million on independent expenditures, which the Federal Election Commission defines as spending on advertising that expressly advocates for the election or defeat of a federal candidate.

As of April 2020, the super PAC had raised nearly $107 million and spent roughly $45 million.

During the 2018 election cycle, the committee’s biggest individual contributor was Michael Bloomberg, the former mayor of New York City and current Democratic presidential candidate. Bloomberg gave the super PAC $20 million.

Other major donors in the 2018 cycle included Fred Eychaner, a retired media executive, who gave $6 million; hedge fund billionaire James Simons, more than $6 million; hedge fund executive S. Donald Sussman, $5 million; Henry Laufer, a former chief scientist and vice president of research for Renaissance Technologies, $2 million; and billionaire George Soros and his son, Alexander, who gave a combined $5.4 million. 

For the 2020 cycle, the top donors as of Aug. 31 include Eychaner, who has donated $8 million; Simons, who has donated $5 million; Sussman, who has donated $4 million; and Deborah Simon, a philanthropist, who has donated $3.5 million.

The super PAC is headed by J.B. Poersch, a former director of the Democratic Senatorial Campaign Committee. Poersch was named the super PAC’s president in early 2017. Its other senior advisers include co-founders Susan McCue and Rebecca Lambe, who were political aides to former Senate Democratic Leader Harry Reid of Nevada.

On Oct. 28, the PAC announced a new round of senior staff hires, including Ghada Alkiek as political manager. She previously served as Michigan Democratic Rep. Dan Kildee’s deputy chief of staff. 

As a super PAC, the Senate Majority PAC is allowed to raise and spend unlimited amounts, but it must report expenditures and all donations of more than $200 to the Federal Election Commission. The super PAC cannot make contributions to candidate committees and cannot coordinate independent expenditures with a candidate campaign referenced in the advertising.

As of Oct. 16, the Senate Majority PAC has reported spending nearly $143.7 million in independent expenditures this campaign cycle. More than $100 million of that has been spent to defeat Republican Sens. Joni Ernst of Iowa, Thom Tillis of North Carolina, Susan Collins of Maine, Steve Daines of Montana, Martha McSally of Arizona and David Perdue of Georgia. All six incumbents are in tight races with control of the Senate at stake.

The PAC also has spent nearly $23 million, as of Oct. 16, to helped Democratic Sen. Gary Peters hold on to his seat in Michigan.

There are 35 Senate seats up for grabs in 2020, including 12 held by Democrats. The Democrats need a net gain of four seats in order to regain control of the Senate from the Republicans, who currently hold 53 seats.

During the 2018 campaign cycle, the Democratic super PAC reported spending more than $92.9 million on independent expenditures opposing Republican candidates and $19.3 million supporting Democrats. The super PAC focused primarily on four key Senate races. They unsuccessfully tried to defend Democratic Senate seats in Missouri, Florida and Indiana, but picked up a Senate seat in Nevada. Combined, the Senate Majority PAC spent more than $62.5 million against Republican challengers Josh Hawley in Missouri, Rick Scott in Florida and Mike Braun in Indiana, who all won their races. The super PAC was successful in helping Jacky Rosen defeat Republican Sen. Dean Heller of Nevada, who lost by 5 percentage points.

Senate Majority PAC is affiliated with Majority Forward, a 501(c)(4) organization that does not have to disclose its donors. During the 2018 campaign, Majority Forward contributed more than $1.3 million to the Senate Majority PAC and carried out voter registration efforts to help increase turnout among Democrats.

Senate Majority PAC also worked in 2018 with Priorities USA Action, a liberal super PAC, on digital ad campaigns. Priorities USA Action spent $44.8 million in 2018, including $27.5 million in independent expenditures. For this election cycle, Priorities USA Action has spent $182,333, which includes $1,250 in independent expenditures. They have also raised $4.8 million, primarily from Sussman, who has already donated $2 million. 

FactCheck.org Undergraduate Fellow Mitchell Aronoff contributed to this article. 

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]]> https://www.factcheck.org/2020/02/priorities-usa-action-2/ Wed, 19 Feb 2020 18:44:17 +0000 https://www.factcheck.org/?p=158760 A liberal super PAC launched by former Obama White House staffers.

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]]> Political leanings: Democratic/liberal

2018 total spending: $44.8 million 

Priorities USA Action, a super PAC, was formed in 2011 by ex-White House staffers Bill Burton and Sean Sweeney to help reelect President Barack Obama in 2012. In 2016, it supported Hillary Clinton’s presidential campaign, spending more money than any other super PAC.

Priorities USA Action states that its mission is to help build “a powerful progressive movement that informs, energizes, and empowers average Americans to fight and win for their priorities in 2020 and beyond.”

Guy Cecil, who was political director of Clinton’s 2008 campaign, serves as chairman of the super PAC. Patrick McHugh, who was research director for the Democratic Senatorial Campaign Committee, serves as the PAC’s executive director.

As a super PAC, Priorities USA Action can raise unlimited amounts of money, but is required to disclose its donors. Priorities USA, also formed in 2011, is the super PAC’s affiliated 501(c)(4) nonprofit organization, which can raise unlimited amounts of money without disclosing its donors. The group also has a 501(c)(3) nonprofit called Priorities USA Foundation.

In 2017, Priorities USA Action merged with another nonprofit group called Every Citizen Counts, a voting rights organization, according to Cecil. The Washington Post said Priorities USA Action has a “broad portfolio, assuming tasks that traditionally are in the purview of the national party.”

During the 2016 cycle, the group spent a total of $133.4 million in independent expenditures, part of the super PAC’s $190 million in total spending. The vast majority of that — roughly $132 million — was spent on the presidential race.

Some major donors to Priorities USA Action during the 2016 cycle included Saban Entertainment founder Haim Saban and his wife, Cheryl, who donated a combined $12.23 million. Others included Paloma Partners founder and hedge fund manager Donald Sussman ($20 million) and billionaire philanthropist George Soros.

The super PAC also received large sums from labor union PACs, including $5 million from Working for Working Americans and $3.725 million from the Laborers’ International Union of North America.

For the 2018 campaign cycle, the super PAC raised $43.5 million and spent $44.8 million, according to the Federal Election Commission. In 2018, its major donors again included Sussman, who donated $8.5 million, and Soros, who donated $5 million, according to the Center for Responsive Politics. The Senate Majority PAC was Priorities USA Action’s biggest PAC donor by far in 2018, contributing $14.1 million to the organization. The Senate Majority PAC’s mission is to “win Senate races” for the Democratic Party. 

Priorities USA Action used $27.6 million of its funds in 2018 for independent expenditures, which is spending on advertising that expressly advocates for the election or defeat of a federal candidate. Most of that money, nearly $22 million, went to support Democrats or oppose Republicans in four key Senate races — although the group backed the losers in three of the four races:

• Florida. Nearly $9.6 million. Republican challenger Rick Scott defeated Democratic Sen. Bill Nelson.
• Missouri. About $4 million. Republican challenger Josh Hawley defeated Democratic Sen. Claire McCaskill.
• Indiana. Slightly more than $3.7 million. Republican challenger Mike Braun defeated Democratic Sen. Joe Donnelly.
• Arizona. About $4.3 million. Democrat Kyrsten Sinema defeated Republican Martha McSally in a race to replace retiring Republican Sen. Jeff Flake. (McSally would later be appointed to replace Sen. John McCain, who died on Aug. 25, 2018.)

In February 2019, the super PAC said that it would spend $100 million in phase one of its two-phase plan to increase Democratic turnout in the 2020 election, focusing its efforts in the swing states of Wisconsin, Michigan, Pennsylvania and Florida. In phase two, which has an undisclosed spending target, Priorities USA Action would turn its attention to “expansion states,” including New Hampshire, Nevada, Arizona, North Carolina and Georgia.

Cecil said its voter outreach program will emphasize digital media over television ads — a decision that included promoting Danielle Butterfield to oversee all of its paid media. Butterfield worked on the digital advertising campaigns for the last two Democratic presidential nominees, President Barack Obama in 2012 and Clinton in 2016. 

According to the most recent FEC data, Priorities USA Action has raised more than $66 million in the 2020 campaign cycle, as of Aug. 31. In March, the super PAC pledged $150 million to ads targeting Trump on healthcare in Florida, Michigan, Wisconsin, Pennsylvania and Arizona, including $6 million criticizing Trump’s coronavirus response. As of Oct. 15, it has spent more than $55 million against Trump — more than any other political committee.

Sussman is again the top donor at $8 million, with hedge fund billionaire James Simons following at $4 million. Other major donors include tech billionaire Jeffrey Skoll and real estate broker George Marcus, $2 million each; David Shaw, chief scientist at D.E. Shaw Research, $1.5 million; and numerous $1 million donors, including Illinois Gov. J.B. Pritzker and Florida billionaire Marsha Laufer. 

FactCheck.org Undergraduate Fellow Chelsey Zhu contributed to this article. 

Fact-checking Priorities USA Action:

Democratic Ad Twists Trump’s ‘Hoax’ Comment, April 14

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]]> https://www.factcheck.org/2019/10/trumps-inaccurate-claims-about-his-perfect-call/ Thu, 03 Oct 2019 23:08:06 +0000 https://www.factcheck.org/?p=164128 President Trump's request that Ukrainian President Volodymyr Zelensky investigate Democratic presidential candidate Joe Biden and his son, Hunter, has triggered an impeachment inquiry. Since then, the president has made a series of inaccurate claims about his phone call with Zelensky, which he calls "perfect."

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]]>

President Donald Trump’s request that Ukrainian President Volodymyr Zelensky investigate Democratic presidential candidate Joe Biden and his son, Hunter, has triggered an impeachment inquiry. Since then, the president has made a series of inaccurate claims about his phone call with Zelensky, which he calls “perfect.”

Here are some of the claims the president has made over the past two days about the phone call and the whistleblower’s complaint, which included an accurate account of the phone call:

• The president wrongly claimed that Acting Director of National Intelligence Joseph Maguire testified that Trump’s phone call with Zelensky was “very normal.” Maguire did not characterize the phone call in his testimony before the House intelligence committee.
• Trump falsely claimed that a White House-released memo on his July 25 phone call with Zelensky was “an exact word-for-word transcript of the conversation … taken by very talented stenographers.” The memo includes a “caution” note saying it “is not a verbatim transcript.”
• Trump said that “the whistleblower never saw the conversation” and “wrote something that was total fiction.” The whistleblower said he received “a readout of the call,” and Maguire said the complaint is consistent with a White House memo of the call. (Trump also wrongly denied that Maguire found the two consistent.)
• Trump claimed that Republican Sen. Mitch McConnell “put out a statement that said that was the most innocent phone call he’s read.” McConnell said it wasn’t an impeachable offense, but did not describe the call as “innocent.”
• Trump also claimed that Sen. Rick Scott of Florida described the call as “a perfect conversation.” Scott didn’t use those words, but like McConnell he said he didn’t see the call as an impeachable offense.

Maguire: Complaint ‘in Alignment’ with Memo

On Aug. 12, an anonymous intelligence community official filed a whistleblower complaint accusing the president of “using the power of his office to solicit interference from a foreign country in the 2020 U.S. election.” The complaint included a description of a July 25 phone call that Trump made to Zelensky, who was elected the president of Ukraine on April 21. 

On the call, “the President pressured Mr. Zelenskyy to … initiate or continue an investigation into the activities of former Vice President Joseph Biden and his son, Hunter Biden,” and assist a U.S. review of allegations that the “Russian interference in the 2016 U.S. presidential election originated in Ukraine,” according to the whistleblower’s complaint. Trump asked Zelensky to “meet or speak with two people the President named explicitly as his personal envoys on these matters, Mr. [Rudy] Giuliani and Attorney General [William] Barr,” the complaint said.

That description was confirmed by a memo of the call, which the White House released on Sept. 25. 

“There’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great,” the memo says Trump told Zelensky. “Biden went around bragging that he stopped the prosecution so if you can look into it … It sounds horrible to me.”

The memo of the call also showed Trump asked Zelensky to “find out what happened with this whole situation with Ukraine” and the 2016 presidential campaign, and urged him to speak with Barr and Giuliani, the president’s personal attorney.

At a Sept. 26 House intelligence committee hearing, Rep. Joaquin Castro asked Maguire, the acting DNI, if the whistleblower’s complaint is “remarkably consistent” with the memo of the phone call that was released by the White House.

“I would say that the whistleblower’s complaint is in alignment with what was released yesterday by the president,” Maguire said.

Nevertheless, the president misstated Maguire’s answer when asked about it during an exchange with reporters in the Oval Office.

Reporter, Oct. 2: But your own DNI said the call transcript was consistent with the complaint. So, should only whistleblowers —

Trump: No, no, no, he didn’t say that. You have to take a look.

Reporter: He did say that.

Trump: No, no, no. He did not say that. And, in fact, if you look at what he said, he found everything to be very normal. He’s a good man, and — Joe. And he found it to be very normal.

Maguire did not say he found the conversation to be “very normal.” Those words don’t appear in the CQ Transcriptions and C-SPAN transcripts of the hearing that we reviewed. Maguire wasn’t asked directly whether the call was appropriate or not, but he demurred several times when asked if the allegations in the complaint were concerning or illegal.

In an exchange with Democratic Rep. Denny Heck, Maguire declined to say if soliciting foreign interference in a U.S. election is illegal. “I’m not a lawyer, sir. I don’t mean to be evasive, but I can’t answer,” Maguire said. But in response to a follow-up question, Maguire said outside foreign interference would be “unwanted” and “bad for the nation.”

Heck, Sept. 26: Is it okay for a president to pressure — any president — to pressure a foreign government for help to win an election?

Maguire: It is unwarranted. It is unwelcome. It is bad for the nation to have outside interference, any foreign power.

Maguire repeatedly said the complaint was credible, and that it should be investigated. Asked if “someone should investigate this,” Maguire noted that he referred the complaint to the Department of Justice. “If I didn’t [think it should be investigated], I would not have referred it to the Justice Department and to the FBI.”

But he also said he wouldn’t presume to tell the committee whether it should investigate the president or not, and he wouldn’t tell the president how to conduct foreign policy.

In response to Democratic Rep. Michael Quigley, who asked if the complaint concerned him, Maguire said: “How the president of the United States wants to conduct diplomacy is his business, and it’s not whether or not I approve it or disapprove of it. That is the president’s business on how he wants to conduct that, sir.”

‘Not a Verbatim Transcript’

Trump claimed on Oct. 2 that the White House-released memo on his July 25 phone call with Zelensky was “an exact word-for-word transcript of the conversation … taken by very talented stenographers.” That’s incorrect. The memo includes a “caution” note saying it “is not a verbatim transcript.”

The president made the claim before a bilateral meeting with the president of Finland, Sauli Niinistö, and then repeated it later on Oct. 2 in a press conference. Trump said, “I had a transcript done by very, very talented people — word for word, comma for comma. Done by people that do it for a living. We had an exact transcript.”

But the memo itself leaves no doubt that it is not an “exact transcript.” It is the “notes and recollections,” it said, of staff “assigned to listen and memorialize the conversation.”

Here’s the full “caution” note that appears at the bottom of the first page of the White House’s memo on the phone call:

Memo of July 25 Trump-Zelensky phone call: CAUTION: A Memorandum of a Telephone Conversation (TELCON) is not a verbatim transcript of a discussion. The text in this document records the notes and recollections of Situation Room Duty Officers and NSC policy staff assigned to listen and memorialize the conversation in written form as the conversation takes place. A number of factors can affect the accuracy of the record, including poor telecommunications connections and variations in accent and/or interpretation. The word “inaudible” is used to indicate portions of a conversation that the notetaker was unable to hear.

How the Memo Compares to the Complaint

Trump has made several claims about the memo refuting the whistleblower complaint, referring, falsely, at one point to the complaint as “total fiction.” The White House memo actually corroborates some of the whistleblower’s claims, which the inspector general of the intelligence community deemed an “‘urgent concern’ that ‘appears credible.’”

In his Oct. 2 press conference, Trump talked about releasing the “exact transcript” (see above) and added, “And when we produced that transcript, they died. Because you look at the whistleblower statement, and it’s vicious.”

On Oct. 3, he said, “The whistleblower never saw the conversation. He got his information, I guess, second and third hand. He wrote something that was total fiction, and now when people see that they’re not happy.”

We’ll lay out what the whistleblower and the White House memo said about the July 25 phone call.

The whistleblower complaint said that “[m]ultiple White House officials with direct knowledge of the call” said that Trump “sought to pressure the Ukrainian leader to take actions to help the President’s 2020 reelection bid.” It said that, according to these officials, Trump “pressured” Zelensky to do three things:

• “initiate or continue an investigation into the activities of former Vice President Joseph Biden and his son, Hunter Biden”;
• “assist in purportedly uncovering that allegations of Russian interference in the 2016 U.S. presidential election originated in Ukraine, with a specific request that the Ukrainian leader locate and turn over servers used by the Democratic National committee (DNC) and examined by the U.S. cyber security firm Crowdstrike”;
• “meet or speak” about these matters “with two people” – Trump’s personal attorney Rudy Giuliani and Attorney General William Barr – “to whom the President referred multiple times in tandem.”

Trump denies that he “pressured” Zelensky to do these things. But the White House memo of the call shows he asked for them, with the exception of explicitly asking for the servers to be turned over — though Trump asks about the DNC server. The memo is unclear on this point.

The White House memo said Trump asked Zelensky:

• “The other thing, [t]here’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great. Biden went around bragging that he stopped the prosecution so if you can look into it … It sounds horrible to me.” (See: “Trump Twists Facts on Biden and Ukraine.”)
• “I would like you to do us a favor though because our country has been through a lot and Ukraine knows a lot about it. I would like you to find out what happened with this whole situation with Ukraine, they say Crowdstrike … I guess you have one of your wealthy people… The server, they say Ukraine has it. There are a lot of things that went on, the whole situation.” (The ellipses are part of the memo, so, presumably, some of what the president was asking for related to this conspiracy theory is left out.)
• “Mr. Giuliani is a highly respected man. He was the mayor of New York City, a great mayor, and I would like him to call you. I will ask him to call you along with the Attorney General.”
  “I will have Mr. Giuliani give you a call and I am also going to have Attorney General Barr call and we will get to the bottom of it. I’m sure you will figure it out.”
  “I will tell Rudy and Attorney General Barr to call.”

So, the White House memo backs up the whistleblower’s complaint on the three main asks Trump had of Zelensky in the phone call.

The complaint also said: “The President also praised Ukraine’s Prosecutor General, Mr. Yuriy Lutsenko, and suggested that Mr. Zelenskyy might want to keep him in his position.”

Trump twice praised a Ukrainian prosecutor general, saying, “Good because I heard you had a prosecutor who was very good and he was shut down and that’s really unfair,” according to the White House memo. “I heard the prosecutor was treated very badly and he was a very fair prosecutor.”

Mitch McConnell

Trump claimed that Republican Sen. Mitch McConnell “read my phone call” and “put out a statement that said that was the most innocent phone call he’s read.” “I spoke to him about it too,” Trump said.

We don’t know what McConnell told Trump privately — his Senate office did not respond to a request for comment. But we did not find that McConnell used the “most innocent” language in his public remarks and press releases, or on social media.

McConnell did release a statement to Politico for its Sept. 25 story about the Senate majority leader’s response to “Trump’s Ukraine scandal.” However, the statement does not support Trump’s claim.

“I’ve read the summary of the call,” McConnell said, according to the story. “If this is the ‘launching point’ for House Democrats’ impeachment process, they’ve already overplayed their hand. It’s clear there is no quid pro quo that the Democrats were desperately praying for.”

Politico reported that McConnell’s statement also said it is “laughable to think this is anywhere close to an impeachable offense.”

McConnell’s statement clearly dismisses some of the criticism of Trump’s call with Zelensky, but he doesn’t describe the call as “innocent,” either.

The White House did not provide any other statements from McConnell.

Update, Oct. 23:  CBS News reporter Nancy Cordes asked McConnell on Oct. 22 if he told Trump that the president’s phone call with Zelensky was “perfect” and “innocent,” as Trump has claimed. McConnell said no. “We’ve not had any conversations on that subject,” McConnell said. “I don’t recall any conversations with the president about that phone call.”

Rick Scott

In his Oct. 2 press conference, Trump also claimed that Sen. Rick Scott of Florida described the call as “a perfect conversation.” Scott didn’t use those words.

“I heard Rick Scott today say, ‘That was a perfect conversation. How can they impeach him on that conversation?’” Trump said.

Scott didn’t say the call was “perfect”; he has actually said he would have said things differently than Trump. But he did say he didn’t see the call as an impeachable offense.

“I still don’t see what the crime is,” Scott said in a Fox News interview earlier that day. “I keep saying, show me what the crime is. No one ever says that. They say he shouldn’t have done it. Well, all of us would do things differently than other people would do it but if we’re going to impeach somebody there ought to be something they did wrong.”

“When you read the transcript, the president says things differently than I would say them but, again, what they’re talking about, is there a violation of law?” Scott said in an interview with a Spectrum News reporter the week prior. “And I didn’t see it. No one’s shown me a law that the president violated.”

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]]> https://www.factcheck.org/2018/11/deutch-misses-mark-in-attack-on-scott/ Fri, 16 Nov 2018 16:48:03 +0000 https://www.factcheck.org/?p=149152 Rep. Ted Deutch accused Florida Gov. Rick Scott of “trying to manipulate the outcome of elections,” providing examples that went beyond the facts.

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Rep. Ted Deutch accused Florida Gov. Rick Scott of “trying to manipulate the outcome of elections,” providing examples that went beyond the facts:

• Deutch claimed Scott took “the unheard of approach of trying to use his own state police to impound voting machines.” Scott’s campaign filed a lawsuit to impound voting machines — which is not an “unheard of approach” for campaigns to take after a close election.
• Deutch also criticized Scott for “reducing the number of early voting locations.” Scott did sign legislation in 2011 reducing the days and hours of early voting, but the governor reversed himself two years later. As for early voting locations, those increased in every statewide general election during Scott’s eight years as governor.

Deutch, a Democrat who represents parts of Broward and Palm Beach counties, made his remarks during an interview on CNN’s “New Day.” The congressman talked about counting the ballots in two of Florida’s extremely close statewide races — the governor’s race between Tallahassee Democrat Andrew Gillum and former Republican Rep. Ron DeSantis, and the Senate race between Democratic Sen. Bill Nelson and outgoing Republican Gov. Rick Scott.

As both parties haggle over how to carry out yet another Florida recount, Deutch said — correctly — that there is no evidence of fraud in Broward County. He then went on to attack Scott.

“There is evidence of eight years of Rick Scott as the governor of Florida trying to manipulate the outcome of elections,” Deutch said, before launching into some examples.

Impounding Voting Machines

In one example, Deutch took issue with the legal wrangling over voting machines in Broward County, the state’s second most populous county.

Deutch, Nov. 12: The governor has now actually taken the unheard of approach of trying to use his own state police to impound voting machines before this election is even over.

It is not unheard of for campaigns to seek a post-election court order to impound the ballots — which is what Scott’s campaign, not the governor or the governor’s office, did in this case.

On Nov. 11, the Scott campaign filed a lawsuit against Brenda Snipes, the Broward County supervisor of elections, in state circuit court. “These filings request that FDLE [Florida Department of Law Enforcement] and the Sheriff’s Office be required to impound and secure all voting machines, tallying devices and ballots when they are not in use until the conclusion of the recount,” the campaign said.

Florida Democratic Party Executive Director Juan Peñalosa issued a statement comparing the governor to a dictator for filing the lawsuit.

“In suing to seize ballots and impound voting machines, Rick Scott is doing his best to impersonate Latin American dictators who have overthrown democracies in Venezuela and Cuba,” Peñalosa said. “The governor is using his position to consolidate power by cutting at the very core of Democracy.”

But, contrary to Deutch’s claim, it is not “unheard of” for campaigns in Florida to file suit seeking a court order to impound voting machines or paper ballots.

In 2006, the campaign for a Democratic congressional candidate, Christine Jennings, filed a lawsuit asking a circuit court judge to impound electronic voting machines used in Sarasota County. And, in 2012, Rep. Allen West’s campaign sought a court order to require elections officials to impound ballots and voting machines. Both candidates lost, despite their legal actions.

In Scott’s case, the state’s judicial system — acting not at all like a dictatorship — ruled against the governor’s campaign and came up with a practical alternative that was acceptable to both sides.

At the suggestion of Circuit Chief Judge Jack Tuter, lawyers for both campaigns agreed to add three more sheriff’s deputies to secure the location of the county’s voting machines.

Early Voting Locations

In accusing Scott of “trying to manipulate the outcome of elections,” Deutch also said, “He did it by making the number of voting places during early voting — by reducing the number of early voting locations.”

In fact, the number of early voting locations increased under Scott.

Deutch was referring to a bill that Scott signed into law in 2011 that reduced the number of early voting days and hours. The new law was cited as one reason for long lines at the polls in 2012.

“The 2011 changes, as well as the Legislature’s decision to add several lengthy constitutional amendments to the ballot, resulted in long lines at polls in several urban areas of the state, particularly Miami Dade where some voters waited more than eight hours to cast ballots,” the Miami Herald wrote.

But in response to the long lines, and under public pressure to act, the governor reversed course two years later and signed a bill that restored and expanded early voting.

“The law not only restores the early voting to a mandatory 64 hours over eight days and up to 168 hours over 14 days, it also gives the 67 county supervisors of elections the discretion to schedule early voting on the Sunday before the election,” the Herald wrote of the 2013 law.

Specifically, Deutch accused the governor of “reducing the number of early voting locations.” But data we reviewed on the Florida Department of State website show that the number of early voting locations increased in every general election during Scott’s eight years. 

In 2010, before Scott took office, the state had 257 early polling places in 67 counties. After Scott assumed office in January 2011, the number of early polling places increased to 289 in 2012, 333 in 2014, 351 in 2016 and 367 in 2018.

Deutch has a point about the legislation Scott signed in 2011, but he ignores the 2013 bill that the governor also signed. Deutch is also wrong to say that Scott “reduced the number of early voting locations.”

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