AP FACT CHECK: In Dem debate, when 'free' isn't free

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Posted: Oct 14, 2015 1:00 PM
AP FACT CHECK: In Dem debate, when 'free' isn't free

WASHINGTON (AP) — When does "free" cost a lot of money?

It's when presidential contenders Hillary Rodham Clinton and Bernie Sanders pitch plans for free college tuition, playing down the cost to taxpayers and brushing past assorted other perils to the education system, as happened in the Democratic debate.

A look at some of the claims Tuesday night and how they compare with the facts:

CLINTON: "My plan would enable anyone to go to a public college or university tuition-free. You would not have to borrow money for tuition."

SANDERS: "Make every public college and university in this country tuition-free."

THE FACTS: Free for the students, but someone has to pay.

Clinton and Sanders both would shift more college costs onto taxpayers and away from parents and students.

Sanders' plan would cover tuition and fees at public universities — a $70 billion annual expense with the federal government picking up two-thirds of that tab by taxing trading in the financial markets.

Students would still be on the hook for room and board costs that average $9,804, according to the College Board.

The Clinton plan is bound to cost more than the $35 billion per year over 10 years projected by her campaign. This is because more students would probably switch to public universities on the potential to graduate without debt, raising costs for the government and potentially leaving many modestly endowed private institutions in the lurch.

The potential of a debt-free education would also depend on states providing reliable money streams and controlling costs — both major sources of uncertainty. But the Clinton and Sanders plans would also expose a sharp generational divide. New college students would be helped, but the 40 million Americans who already owe a combined $1.2 trillion in education debt would receive little aid other than refinancing at lower rates.

Neither candidate told TV viewers about the costs to the treasury of what they propose.

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CLINTON on her email practices: "I have been as transparent as I know to be. ... I said I have answered all the questions."

THE FACTS: Clinton has yet to explain how the server was set up and serviced, whether she informed the State Department about her decision to use the private system and, most important, how it was protected from hacking attempts.

Russia-based hackers tried at least five times to trick her into infecting her computer system with malware in 2011, The Associated Press learned, and her server was hit by attempted cyber intrusions in 2014 from China, South Korea and Germany.

Her server also was connected to the Internet in ways that made it more vulnerable to hackers. But her campaign has repeatedly declined to address these details.

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SANDERS: "Almost all the new income and wealth is going to the top 1 percent."

THE FACTS: Sanders appears to be relying on outdated data. In the first five years of the economic recovery, from 2009 through 2014, the richest 1 percent of Americans captured 58 percent of income growth, according to Emmanuel Saez, a University of California economist whose research Sanders uses. While certainly a large gain, that is a lot less than "almost all."

In just the first three years of the recovery, from 2009 through 2012, the richest 1 percent did capture 91 percent of the growth in income. But part of that outsized gain came because the wealthiest pulled income forward to 2012 in advance of tax increases that took effect in 2013.

But part of that occurred because of impending tax increases on the wealthiest Americans that took effect in 2013.

Many companies paid out greater bonuses to their highest-paid employees in 2012 before the higher tax rates took effect. Those bonuses then fell back in 2013. And in 2014, the bottom 99 percent finally saw their incomes rise 3.3 percent, the biggest gain in 15 years.

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CLINTON on the Trans-Pacific Partnership: "I did say, I hoped it would be the gold standard'" of trade agreements.

THE FACTS: Clinton did not say anything about mere hope in her speeches around the world in support of the trade deal. She roundly endorsed the deal taking shape.

In a November 2012 speech in Australia, she declared the Trans-Pacific deal "sets the gold standard in trade agreements," a sentiment she echoed in many venues.

Clinton said in the debate that when she looked at the final agreement last week, "it didn't meet my standards."

The final agreement, however, dropped or changed some provisions that liberal activist groups — the wing of the party she is assiduously courting at this stage of the campaign — had strongly criticized.

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SANDERS: "What we need to do is ... raise the minimum wage to $15 an hour."

THE FACTS: That might boost pay for many workers, but as with college tuition, there's a cost: His plan would probably cause many low-wage employers to cut some jobs.

Economists have long debated the impact of raising the minimum wage, and some recent research has found that modest increases seldom cost many jobs. But a jump to $15 an hour would be more than double the federal minimum of $7.25 — a much higher increase than what economists have tested for impact on employment. It would also be far above the minimum wage's previous peak of just under $11, adjusted for inflation, in 1968.

Eight states have median wages below the proposed $15 an hour, which suggests a boost to $15 could cause widespread job losses in those places.

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Associated Press writers Christopher S. Rugaber, Stephen Braun and Jack Gillum contributed to this report.