Obama Needs Some Second Opinions

POTUS cites flawed studies, authorities in first debate

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October 4, 2012

President Barack Obama repeatedly cited flawed studies, incorrect analyses, and incorrect facts Wednesday night despite insisting that his rhetoric was not merely "his opinion," a Free Beacon analysis shows.

The president cited the reports to lend credibility to his assertions in the face of an aggressive, sharp challenger who regularly attacked the incumbent’s record.

Here are three examples:

1. Medicare and Obamacare

The president made this claim regarding savings to Medicare:

And this is not my own—only my opinion. AARP thinks that the —the savings that we obtained from Medicare bolster the system, lengthen the Medicare trust fund by eight years. Benefits were not affected at all.

However, an AARP analysis of Obama’s Medicare plan just over a week ago undermined the president’s claim that he will not change benefits "at all":

If you are lucky enough to be financially comfortable in retirement, odds are you’ll pay higher premiums under President Barack Obama’s plan. It’s not just the 1 percent who’ll feel the pinch.

Looking specifically at Obama’s budget this year, AARP gave the plan a "thumbs down," specifically citing "Medicare cost shifts."

Former AARP CEO Bill Novelli said that changes to Medicare are inevitable. "Obama is going to have to raise the price of benefits," he said.

The morning after the debate, AARP released a statement distancing itself from Obama’s deployment of their analysis. John Hishta, AARP senior vice president, said in part:

While we respect the rights of each campaign to make its case to voters, AARP has never consented to the use of its name by any candidate or political campaign. AARP is a nonpartisan organization and we do not endorse political candidates nor coordinate with any candidate or political party.

2. Obama on Romney’s Tax Plan

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Obama claimed that Romney’s tax plan would raise taxes on middle class families, citing unnamed economists:

Romney's pledge of not reducing the deficit or—or—or not adding to the deficit is by burdening middle-class families. The average middle-class family with children would pay about $2,000 more.  Now, that's not my analysis. That's the analysis of economists who have looked at this.

Obama did not cite a specific study, but the substance of his charge comes from a Tax Policy Center report. The report concludes that:

[A]ny revenue-neutral individual income tax change that incorporates the features Governor Romney has proposed would provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower income taxpayers.

Alex Brill, a former chief economist to the House Ways and Means Committee now at the American Enterprise Institute, pointed out that the study has serious flaws that skew its results.

At the heart of TPC’s study, says Brill, lies the claim that "there are not enough tax breaks (excluding tax preferences for savings and investment) for high-income earners to offset the cost of the lower rates." This asymmetry, Brill says, leads TPC to the conclusion that "an $86 billion tax increase on the middle class" will balance lower rates for higher earners.

Brill points out three false assumptions in TPC’s report, and then shows how correcting each reduces—and ultimately erases—the projected middle-class tax increases.

First, "More base-broadeners are on the table," says Brill. TPC revised its findings down by $45 billion after Brill’s colleague Matt Jensen critiqued the report, uncovering more options for raising revenue by broadening the base. This revision reduced the revenue gap that TPC found from $86 billion to $41 billion.

Second, "The TPC revenue baseline assumption is inflated," Brill writes. Adjusting this baseline reduces the revenue gap by another $29 billion, making the shortfall now $12 billion.

Third, Brill calculates that if the economy grows at a 0.1 percent faster rate, the government would take in $13 billion more in revenue, which would force Romney, if he were to remain budget-neutral, to give middle class earners a tax break.

"And just like that," Brill writes, "the Democrats’ attacks that Romney wants to raise taxes on the middle class become false."

Romney himself said Wednesday night that, while he would not raise taxes to increase government revenue, revenue would increase due to an improving economy:

Look, the revenue I get is by more people working, getting higher pay, paying more taxes. That's how we get growth and how we balance the budget. But the idea of taxing people more, putting more people out of work, you'll never get there. You'll never balance the budget by raising taxes.

3. Obama on Obamacare’s Massachusetts Precedent

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Obama said that his healthcare law, passed in 2010, is virtually the same as the healthcare legislation passed while Romney was governor of Massachusetts:

And I agree that the Democratic legislators in Massachusetts might have given some advice to Republicans in Congress about how to cooperate, but the fact of the matter is, we used the same advisers, and they say it's the same plan.

However, as Douglas Holtz-Eakin at National Review points out, the two pieces of legislation contain fundamental differences.

Both laws mandate that individuals buy health insurance, but the list of differences vastly outnumbers the similarities:

Massachusetts did not have $500 billion in new taxes on investment income, medical devices, health insurance companies, and "Cadillac" health-insurance policies. Massachusetts did not have a dangerous Independent Payment Advisory Board, misguided Patient-Centered Outcomes Research Institute, futile Center for Medicare & Medicaid Innovation, and myriad other agencies, boards and bureaucracies. Massachusetts did not rely on budget gimmicks like the CLASS Act, student loan "savings," and mythical Medicare cuts to squeeze past the finish line.

Additionally, while both plans seek to broaden health care coverage, they "are not even close cousins" in their details, Holtz-Eakin concludes.

Even the baseline environments for the two pieces of legislation were different, he says. "Massachusetts had a relatively low number of uninsured at the time of reform."