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The latest Crossroads GPS attack on Obama

at 06:02 AM ET, 05/23/2012

“Obama started spending like our credit cards have no limit ... his health-care law made health insurance even more expensive.”

— Voiceover of new Crossroads GPS television ad

The latest entry by Republican-leaning Crossroads GPS in the campaign ad wars is aimed directly at disillusioned supporters of President Obama. It depicts an older (presumably) single mother who had voted for the president now worried about how her grown children can’t get jobs, especially in a world of higher government debt.

 But the ad uses some of the oldest tricks in the book to create a misleading impression. Let’s examine two key points — about the debt and the health-care law.

The Facts

 One can have a long argument about whether Obama — or the dreadful economy he inherited — is mostly responsible for the sharp rise in the national debt. The ad displays a chart showing the national debt increasing from $9 trillion to $15 trillion, but it’s one of those asymmetrical charts (starts at $9 trillion) that overemphasizes the increase. 

As of Jan. 20, 2009, the publicly held debt was $6.31 trillion and the gross debt was $10.63 trillion, according to the Treasury Department. As of May 21, the publicly held debt was $10.95 trillion and the gross debt was $15.72 trillion. 

As we have shown before, the increase in the debt is mostly the result of a sharp decline in revenue (red line in chart below) at the start of the recession, before Obama took office, and a steep increase in spending (blue line), which was partly the result of the administration’s stimulus bill but also the automatic economic stabilizers (such as unemployment insurance) created by the recession.

 In fact, the chart shows that government spending has largely gone flat in the last year. Republicans might argue that Obama’s credit card hit a limit — the GOP takeover of the House of the Representatives — but in any case the days of increased spending are in the past.


(research.stlouisfed.org)

 The ad also asserts that Obama “added almost $16,000 in debt for every American.” Okay, this is an easy math exercise for politicians — Obama in 2008 would claim that it was “unpatriotic” for George W. Bush to let it grow to “$30,000 for every man, woman and child” — but it’s not as people actually owe that money and it will have to be paid off, like a credit-card debt.

It’s actually not a bad thing for a nation to have some debt, especially if the money was spent on wise investments. In fact, a long-forgotten justification for the Bush tax cuts was that the United States would pay down too much debt. A case can certainly be made that the national debt has gotten too high in recent years, but this “debt-per-person” claim is a not-very-interesting political metric.

As for health care, the ad asserts that Obama’s “health-care law made health insurance even more expensive.” The ad then flashes a USA Today headline: “Survey: Health insurance costs surge in 2011.”

 That was a Web site headline. The story appeared in the actual newspaper under a more benign headline — “Debt talks may affect premiums” — because the article was mostly about how efforts to reduce the federal deficit by cutting payments to Medicare providers might end up boosting health insurance premiums for all Americans

 The article did discuss the 2011 Kaiser Family Foundation annual survey of employer health benefits, which showed premiums for families had gone up by 9 percent. But — contrary to what the ad suggests — the survey does not say the health-care law was mostly responsible for the increase. That’s because, as the survey noted, “many of the most significant provisions of the Patient Protection and Affordable Care Act (ACA) will take effect in 2014.”

 The USA Today article quoted a Kaiser official as saying the health-care law was responsible for “1%” of the increase. This was an error by USA Today. Other reporting at the time made clear that Kaiser believed that the health-care law accounted for one to two percentage points of the premium increases in 2011, or about 20 percent of the overall increase. (The White House at the time disagreed with that analysis, and argued that in future the health-care law will put downward pressure on prices.)

In any case, the Kaiser study generally places the year-to-year increase as part of an overall trend of sharply rising costs. “Since 2001, average premiums for family coverage have increased 113 percent,” the report notes.  When Kaiser looked at just the increase in the portion of the premium that workers contribute, the report said that neither the amounts for families nor individuals represented “a statistically significant increase over the 2010 values.”

 As we have noted before, one data point does not tell you much. Moreover, given that much of the health-care law has not gone into effect yet, it is a little silly to jump to conclusions now about its impact on health-care premiums.

 

The Pinocchio Test

 On the debt, the ad exaggerates Obama’s impact on the rise of the debt, as it was not just spending but a decline in revenue that is responsible for the sharp rise in federal budget deficits. On health-care spending, the ad suggests that the new law was largely or mostly responsible, when in fact, according to one survey, it was only partially responsible.

 The ad ends with the woman saying that the national debt needs to be reduced. (“Cutting taxes and debt, and creating jobs — that’s the change we need.”) Ironically, the USA Today article cited by the ad mostly focuses on the fact that cutting health-care programs such as Medicare to reduce the debt could force health-care premiums even higher as health-care providers seek to recoup their lost funds. The lesson, dear voter, is: damned if you, damned if you don’t.

 Two Pinocchios




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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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