Barack Obama's "Pocket" Ad Distortions

Today, McCain spokesman Tucker Bounds issued the following statement on Barack Obama's latest ad -- "Pocket":

"Barack Obama's latest negative attack ad shows his celebrity is matched only by his hypocrisy, after all it was Senator Obama, not John McCain, who voted for the Bush-Cheney energy bill that was a sweetheart deal for oil companies. Also not mentioned is the $400,000 from big oil contributors that Barack Obama has already pocketed in this election."

MYTH VS. FACT ON BARACK OBAMA'S "POCKET" AD

OBAMA AD MYTH: Barack Obama's ad claims that the oil companies have given $2 million to John McCain.

FACT: No candidate takes contributions from oil companies since corporate contributions were prohibited by law more than a century ago.

· FactCheck.org: No Candidate Can "Take Money Directly From Oil Companies." "It's true that Obama doesn't take money directly from oil companies, but then, no presidential, House or Senate candidate does. They can't: Corporations have been prohibited from contributing directly to federal candidates since the Tillman Act became law in 1907." (Justin Bank and Viveca Novak, "Obama's Oil Spill," FactCheck.org, http://www.factcheck.org/elections-2008/obamas_oil_spill.html, 3/31/08)

· FactCheck.org: Barack Obama "Does Accept Donations From Oil Company Employees, And He Has Two Oilmen Working As 'Bundlers' For The Campaign, Collecting Donations." "We faulted him earlier for a TV ad in which he claimed, 'I don't take money from oil companies.' In fact, he does accept donations from oil company employees, and he has two oilmen working as 'bundlers' for the campaign, collecting donations." (Brooks Jackson and Lori Robertson, "Oily Words," FactCheck.org, http://www.factcheck.org/elections-2008/oily_words.html, 4/11/08)

FACT: Barack Obama has taken nearly $400,000 from oil and gas company executives and employees, according to the Center for Responsive Politics.

· Barack Obama Has Received At Least $394,465 In Contributions From Employees Of Oil And Gas Companies. (Center For Responsive Politics Website, www.opensecrets.org, Accessed 7/31/08)

OBAMA AD MYTH: John McCain has proposed additional tax breaks for oil companies.

FACT: Barack Obama's claim that McCain favors a $4 billion tax cut for oil companies is totally misleading. John McCain has proposed cutting the tax rate on all American businesses across the board from 35 to 25 percent. Unlike Barack Obama, John McCain favors no special deal for big oil or anyone.

· PolitiFact: Obama's Statement "Barely True," As Obama Is "Cherry-Picking" On Tax Cut, As "The Corporate Tax Rate Reduction Would Apply To ALL Corporations." "Obama is cherry-picking here. The corporate tax rate reduction would apply to ALL corporations. Yes, Exxon Mobil, but also to Wal-Mart, General Motors and Home Depot, to name a few of the other Fortune 50 biggies. Even everybody's favorite, Starbucks, would get the same tax break. Obama's statement is technically true, but singling out oil companies suggests McCain has targeted oil companies for tax breaks. He hasn't. We rate Obama's statement, and the claim in the ad, Barely True." ("Big Oil, Like All Companies, Would Get Tax Break," PolitiFact.com, Accessed 8/4/08)

· John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent. " A lower corporate tax rate is essential to keeping good jobs in the United States. America was once a low-tax business environment, but as our trade partners lowered their rates, America failed to keep pace. We now have the second highest corporate tax rate in the world, making America a less attractive place for companies to do business. American workers deserve the chance to make fine products here and sell them around the globe." (John McCain 2008 Official Website, "Jobs For America," http://www.johnmccain.com/Issues/JobsforAmerica/taxes.htm, Accessed 8/3/08)

· Columbus Dispatch: John McCain Has "Proposed [A] Cut In The Corporate Tax Rate For All U.S. Companies." "McCain's economic plan includes a proposed cut in the corporate tax rate for all U.S. companies, not just oil companies." (Jonathan Riskind, "Campaign Ad Watch," The Columbus Dispatch, 8/2/08)

FACT: Barack Obama said that he wants to cut corporate taxes as well, which under his logic, would mean tax cuts for oil companies as well.

· In An Interview With The Wall Street Journal, Barack Obama Said That He Was Considering Lowering Corporate Taxes. "Sen. Obama's nod to lowering corporate taxes comes as Republicans have been attacking him for proposals that would raise the cost of doing business, such as his pledge to raise the tax rate on capital gains, and his vow to increase the top income-tax rates, which are often used by small, unincorporated enterprises. He didn't say how deeply he would cut the rate, but said it could be trimmed in return for reducing corporate tax breaks, simplifying the tax system." (Bob Davis and Amy Chozick, "Obama Plans Spending Boost, Possible Cut In Business Tax," The Wall Street Journal, 6/17/08)

FACT: Barack Obama voted for the 2005 Bush-Cheney Energy Bill, which contained billions in tax breaks for big oil.

· Barack Obama Voted For The 2005 Energy Bill. (H.R. 6, CQ Vote #152: Motion Agreed To 92-4: R 53-1; D 38-3; I 1-0, 6/23/05, Obama Voted Yea; H.R. 6, CQ Vote #158: Passed 85-12: R 49-5; D 35-7; I 1-0, 6/28/05, Obama Voted Yea; H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, Obama Voted Yea)

· The 2005 Energy Bill Included $2.8 Billion In Subsidies For Oil And Natural Gas Production. "The conference agreement provides for $14.6 billion in tax breaks and credits between 2005 and 2015, including: -- $2.8 billion for fossil fuel production..." (Toni Johnson, "CQ Bill Analysis: HR 6," Congressional Quarterly's "CQ Bill Analysis," www.cq.com, Accessed 7/14/08)

· John McCain Voted Against The 2005 Energy Bill. (H.R. 6, CQ Vote #152: Motion Agreed To 92-4: R 53-1; D 38-3; I 1-0, 6/23/05, McCain Voted Nay; H.R. 6, CQ Vote #158: Passed 85-12: R 49-5; D 35-7; I 1-0, 6/28/05, McCain Voted Nay; H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, McCain Voted Nay)

· John McCain Criticized The 2005 Energy Bill's "Handouts To Big Business And Oil Companies," Calling Them Irresponsible. McCain: "This bill does little to address the immediate energy crisis we face in this country. The handouts to big business and oil companies are irresponsible and will be disastrous for people of Arizona. I cannot in good conscience, vote to pass legislation that does not adequately address issues related to energy efficiency, security, and energy independence." (Sen. John McCain, "McCain, Kyl Say No To Flawed Energy Bill," Press Release, 6/28/05)

OBAMA AD MYTH: Barack Obama's Windfall Profits Tax will pay for his energy plan.

FACT: Barack Obama's Windfall Profits Tax is more economic quackery. History shows it only decreases production here at home and only make us more dependent on foreign oil.

· Barack Obama Is Proposing A Windfall Profits Tax On Oil Companies That Could Raise Taxes By $15 Billion A Year. "Democratic presidential candidate Barack Obama's proposal for a windfall profits tax on oil companies could cost $15 billion a year at last year's profit levels, a campaign adviser said." (Daniel Whitten, "Obama May Levy $15 Billion Tax On Oil Company Profit," Bloomberg News, 5/1/08)

· The Non-Partisan Congressional Research Service Found That The Windfall Profits Tax In The Past Reduced Domestic Oil Production And Increased Our Dependence On Foreign Oil By As Much As 13 Percent. "From 1980 to 1988, the WPT may have reduced domestic oil production anywhere from 1.2% to 8.0% (320 to 1,269 million barrels). Dependence on imported oil grew from between 3% and 13%." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)

· The Tax Reduced Domestic Oil Supply And Increased Demand For Imported Oil. "The WPT had the effect of reducing the domestic supply of crude oil below what the supply would have been without the tax. This increased the demand for imported oil and made the United States more dependent upon foreign oil as compared with dependence without a WPT." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)

· During The Eight-Year Imposition Of The Windfall Profits Tax, Domestic Oil Output Fell To Its Lowest Level In Two Decades. "Skeptics who want to check the data need to search no further than the eight-year 1980s run of the energy industry windfall profit tax. During that time, domestic oil output fell to its lowest level in two decades." (Editorial, "A Bleak Future," Investor's Business Daily, 5/29/08)

· The Wall Street Journal: The Windfall Profits Tax Reduced Domestic Oil Production And Increased Prices At The Pump. "The last time Congress imposed a form of the windfall tax was the final gloomy days of Jimmy Carter, and the result was: a substantial reduction in domestic oil production (about 5%), thus raising the price of gas at the pump; and a 10% increase in U.S. reliance on foreign oil. A windfall profits tax is the ultimate act of economic masochism because it taxes only domestic production, while imports and foreign oil subsidiaries bear almost none of the cost." (Editorial, "Windfall Accounting Tax," The Wall Street Journal, 11/30/05)

· Heritage's Ben Lieberman: The Windfall Profits Tax Ended Up Harming Consumers With Increased Energy Prices. "The track record for punitive measures like the windfall profits tax shows that they usually harm consumers along with the targeted industry. ... In the end, the tax hurt consumers more through higher energy prices than it helped them through higher tax revenues, which turned out to be far lower than originally predicted because the tax discouraged production." (Ben Lieberman, "Raising Taxes On Oil Companies Is No Way To Reduce Gas Prices," www.heritage.org, 3/1/06)

· Former Sen. John Breaux (D-LA) Said Obama's Windfall Profits Tax Is Bad Energy Policy; It "Will Produce Less Energy And Not More." MSNBC's Andrea Mitchell: "John Breaux, you are from the oil patch. How do you feel about your candidate talking about a windfall profits tax?" Former Sen. John Breaux (D-LA): "Well a windfall profits tax is not going to produce a single barrel of oil. When we had a windfall profits tax back in the 1980s, we produced less energy than before we had the tax. A windfall profits tax may make you feel good as a punitive measure against the energy companies, but until we get the guys and women who produce the energy working with those that consume it, we are never going to solve the problem. A windfall profits tax will produce less energy and not more." (MSNBC's "MSNBC Live," 6/9/08)

FACT: Barack Obama's Windfall Profits Tax would not generate the revenue necessary to pay for his energy plan.

· Barack Obama's Own Campaign Says That It Would Only Raise $15 Billion A Year. "Democratic presidential candidate Barack Obama's proposal for a windfall profits tax on oil companies could cost $15 billion a year at last year's profit levels, a campaign adviser said." (Daniel Whitten, "Obama May Levy $15 Billion Tax On Oil Company Profit," Bloomberg News, 5/1/08)

· The Congressional Research Service Found That When The Windfall Profits Tax Was Implemented From 1980 To 1988, Gross Revenues Were Significantly Less Than Projected. "The $80 billion in gross revenues generated by the WPT between 1980 and 1988 was significantly less than the $393 billion projected." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications for Current Energy Policy," Congressional Research Service, 3/9/06)