Traverse City Record-Eagle

Opinion

October 6, 2012

Fact Check: Dubious Denver debate declarations

(Continued)

'Six Other Studies'

When the president referred to the Tax Policy Center's criticisms, Romney claimed it was contradicted by several others.

Romney: There are six other studies that looked at the study you describe and say it's completely wrong.

That's not quite true, as we previously reported when the count was at five. We found that two of those "studies" were blog items by Romney backers, and none was nonpartisan.

The only one of those "studies" by someone not advising Romney was done by Harvey Rosen, a Princeton economics professor who once served as chairman of President George W. Bush's Council of Economic Advisers.

Rosen concluded that Romney could pull off his tax plan without losing revenue assuming an extra 3 percent "growth effect" to the economy resulting from Romney's rate cuts. That's an extremely aggressive assumption, and in conflict with recent experience. Despite Bush's large tax cuts in 2001 and 2003, for example, real GDP grew by 3 percent or more for only two of his eight years in office. The average of the year-to-year changes was just over 2 percent.

Furthermore, Bush's cuts reduced the total tax burden on the economy because they were not offset by base-broadening measures. In theory, at least, Romney's revenue-neutral rate cuts would have even less of a stimulative effect than Bush's cuts did.

Overselling the Health Care Law

Obama wrongly said that over the last two years, health care premiums have "gone up slower than any time in the last 50 years." That's true of health care spending, not premiums. But even if Obama had worded the claim correctly, he still would have been off in suggesting the Affordable Care Act had caused the slower growth in spending.

Obama: And the fact of the matter is that, when Obamacare is fully implemented, we're going to be in a position to show that costs are going down. And over the last two years, health care premiums have gone up — it's true — but they've gone up slower than any time in the last 50 years. So we're already beginning to see progress.

The growth in employer-sponsored family premiums has fluctuated in recent years. It went up just 4 percent from 2011 to 2012, according to an annual survey by the Kaiser Family Foundation, but it increased 9 percent the year before, a big jump from the mere 3 percent increase between 2009 and 2010. Clearly the growth rate over the last two years isn't a 50-year low — it was sitting around 5 percent from 2007 to 2009. However, the growth of health care costs is at a 50-year low for the past two years.

President Bill Clinton used this statistic, correctly, in his speech at the Democratic National Convention, also implying that the federal health care law deserved credit. But as we said then, most of the law hasn't even been implemented yet. And experts say it's the sluggish economy that's mainly responsible for the slower rate of spending. As the Washington Post reported, experts with the Centers for Medicare and Medicaid Services said that many lost employer-sponsored insurance when they lost their jobs, and other individuals chose to "forgo health-care services they could not afford." The New York Times quoted experts saying that consumers' and medical professionals' behavior could be changing in anticipation of the law, but it was still the economy that was the leading factor.

As for that increase in health care premiums, experts told us the federal health care law has had a limited impact on those, too, but the impact was to increase costs. They said the law was responsible for a 1 percent to 3 percent increase last year because of more generous coverage requirements.

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