Fact or fiction in the U.S. presidential debate?

WASHINGTON Wed Oct 3, 2012 11:45pm EDT

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WASHINGTON Oct 3 (Reuters) - President Barack Obama and his Republican rival, Mitt Romney, faced off in their first of three debates before the Nov. 6 presidential election. Here is some fact-checking of claims made by the candidates.

DOES ROMNEY'S PLAN CALL FOR $5 TRILLION TAX CUT?

Obama repeatedly criticized what he called Romney's $5 trillion tax cut. But Romney said his plan did not call for a $5 trillion tax cut. Which one is right?

The Tax Policy Center, a centrist think tank, estimated in March that the Romney plan would cut federal tax revenues by $480 billion in 2015, or just under $5 trillion over 10 years. The center noted its analysis was incomplete because Romney had not said how he would "broaden the base" of taxpayers to help lower rates.

Conservative groups dispute the Tax Policy Center analysis, arguing in part that it did not take into account enough tax breaks. They said the analysis was based on many unproven assumptions and was therefore inaccurate.

TAX BREAKS FOR SHIPPING JOBS OVERSEAS

Romney challenged Obama's statement that companies can take a tax deduction for shipping jobs overseas.

"Look, I've been in business for 25 years. I have no idea what you are talking about. I maybe need to get a new accountant. The idea that you get a break for shipping jobs overseas is simply not the case," Romney said.

What Obama was actually describing was a tax break for ordinary business expense, including deductions allowed for a company if it closes its plant in the United States and moves it to another country.

In July, Senate Republicans blocked a Democratic proposal that would have provided a tax credit to companies that move production back to the United States. It also would have ended the tax break that companies can claim when closing a domestic plant, even if operations are moving abroad.

DOES OBAMA'S PLAN CUT $716 BILLION FROM MEDICARE?

Romney repeatedly cited a figure of $716 billion - saying Obama would cut that amount from Medicare to fund his healthcare overhaul. That claim has been rejected by Democrats and independent analysts.

Obama's healthcare law would slow payment increases for hospitals and insurers, something it views as a savings rather than as a cut to Medicare benefits or programs. It does not change the basket of benefits offered to patients.

The $716 billion figure is a Congressional Budget Office estimate of how much the law would save in Medicare spending from 2013 to 2022, compared with what would have occurred without reform. Those funds would be used to help expand health coverage to more than 30 million uninsured Americans.

Obama's Affordable Care Act also offers new benefits to the elderly, such as prescription drug rebates and discounts, and preventive tests including mammograms and cancer screenings without copays or deductibles under Medicare Part B, which covers visits to doctors' offices and outpatient clinics.

DEFICIT REDUCTION

The candidates sparred over the deficit reduction panel - known as Simpson-Bowles after its co-chairmen, Alan Simpson and Erskine Bowles. In 2010, they came up with a proposal to slash the deficit and lower tax rates.

Romney and Obama both praised the plan as a deficit reduction framework.

But the Simpson-Bowles plan called for about $3 in spending cuts for every $1 in revenue raising. Romney said he would "absolutely" not support raising revenue - increasing taxes - as a way to reduce the deficit.

Obama, for his part, said his $4 trillion deficit reduction plan was based on Simpson-Bowles, but analysts might disagree with that characterization.

The Simpson-Bowles proposal cuts tax rates substantially for all income groups significantly, while Obama has called for boosting rates for the richest Americans. Simpson-Bowles also calls for slashing many popular tax deductions and adding them back only selectively.

GAS PRICES HAVE DOUBLED UNDER OBAMA

Romney said gas prices had doubled since Obama took office. Industry experts say while that is technically correct, the numbers are misleading because they involve a market correction following sharp rises in gas prices during the economic crisis.

When Obama took office, the gas price average was about $1.90 a gallon. But that number was near the bottom of a price overcorrection, according to energy analysts. In the summer of 2008, gasoline prices moved above $4 a gallon for nine straight weeks during the U.S. economic crisis. They are now at about the same level.

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