The week before, Obama had made two separate comments to the Reno Gazette-Journal:
* One quote related to Reagan. Obama said, "I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not. He put us on a fundamentally different path..."
* The other quote referred to ideas. Obama said, "I think it is fair to say the Republicans were the party of ideas for a pretty long chunk of time over the last 10, 15 years..."
Note that the last 10-15 years does not have anything to do with Reagan, who left office 20 years ago.
In the debate, Hillary referred to the second quote. She said, "The facts are that [Obama] has said in the last week that he really liked the ideas of the Republicans over the last 10 to 15 years, and we can give you the exact quote. Now, I personally think they had ideas, but they were bad ideas. They were bad ideas for America." This is an accurate representation of Obama's second quote and a fair criticism of it. You don't say a group is "the party of ideas" if you mean that they have useless, crappy, or even neutral ideas. Obama was obviously praising the Republicans for being the party of ideas and implicitly criticizing Bill Clinton's presidency (which started 15 years ago) as not having ideas.
Obama started to respond about Reagan. Hillary immediately said, "I did not say anything about Ronald Reagan." It was clear she was referring to Obama's statement about ideas, not to his statement about Reagan. Obama chose to pretend to misunderstand Hillary and he responded as if she were referring to the Reagan quote.
The media took Hillary's completely fair comment and twisted it to make her look like a dirty politician. Maureen Down wrote, "Hillary tried once more to take Obama's remarks about Ronald Reagan out of context, making it seem as though Obama had praised Reagan's policies." On Meet the Press, Tim Russert's panel went even further, claiming (by over-emphasizing selective quotes) that both Bill and Hillary had been big Reagan fans and that Hillary was being hypocritical about Reagan. On Hardball, Chris Matthews attacked Hillary for her comment that she hadn't mentioned Reagan; he said, "Why did she deny doing so, clearly having done so, by saying, almost in a high school fashion, 'I didn’t say the name Reagan?'"
The blogs have gone nuts too. Paul Waldman said she "twist[ed] some remarks Obama made about Ronald Reagan and the years since his presidency beyond all recognition." Even Ezra Klein mistakenly said that Hillary exaggerated Obama's comments about Reagan.
This is not just about Hillary. Whoever is the Democratic frontrunner is going to be subject to this sort of distortion. Al Gore was briefly made to seem a delusional liar and John Kerry was made to seem a coward, and now Hillary Clinton is being made to appear a dirty politician. It's a lie.
Hillary has been the clear frontrunner for a year (see chart below), but Obama is catching up quickly. When he is the frontrunner, the character assassination will switch to him. We never learn.
Chart courtesy of TPM Election Central.