Michael Steele's Op-Ed Is Missing The Facts

August 06, 2009 5:24 pm ET

On August 6, 2009, RNC Chairman Michael Steele wrote an op-ed on CNN.com titled "Obama's first 200 days a reckless experiment."  However, his many complaints about President Obama's time in office can be easily countered by basic facts.

Steele Omits The Fact That The Economy Will Take Time To Fix

Chairman Steele: "Since Obama and Democrats rushed through Congress a $787 billion stimulus package, unemployment in America has risen close to 9.5 percent, and every indication is that it will climb even higher when July's unemployment report is released Friday. In total, more than 2.6 million jobs have been lost since Obama took office. But what has the president's stimulus bill brought us, if not the jobs he promised?" [CNN.com, 8/6/09]

Obama Warned: "This Is A Big Problem, And It's Going To Get Worse." Before taking office, President-elect Obama told the country, "When you think about the structural problems that we already had in the economy before the financial crisis, this is a big problem, and it's going to get worse... Things are going to get worse before they get better." [ABC News, 12/7/08]

Obama: "There Are No Quick Fixes."  At a news conference on March 24, 2009, President Obama said: "It's important to remember that this crisis didn't happen overnight, and it didn't result from any one action or decision. It took many years and many failures to lead us here, and it will take many months and many different solutions to lead us out.  There are no quick fixes, and there are no silver bullets." [Presidential News Conference, 3/24/09]

Krugman: Claims That The Stimulus Has Failed Are "Insane." Writing on his New York Times blog, Nobel Prize-winning economist Paul Krugman called claims that the stimulus has failed "insane" because "hardly any of the money has flowed to the economy yet." [New York Times, 6/25/09]

Steele Ignores Recent Cost Estimates For Cap-And-Trade

Chairman Steele:  "The second of Obama's grand experiments on America was his massive so-called cap-and-trade bill that was rammed through the House of Representatives this past June so fast that congressmen weren't given the chance to read it. This bill is nothing more than a national energy tax, plain and simple. Its sole purpose is to increase the cost of energy so that Americans might use less. The Heritage Foundation estimated that it would end up costing the average American family up to $1,870 per year and decrease the national GDP by $161 billion in the year 2020." [CNN.com, 8/6/09]

In Reality, Various Economic Analyses Show The American Clean Energy And Security Act Will Cost Just Cents A Day.

EIA: American Clean Energy And Security Act Would Cost Only $0.23 Per Day. According to a House Energy and Commerce Committee factsheet of the Energy Information Administration's analysis of the American Clean Energy and Security Act: "The U.S. Energy Information Administration (EIA) has completed an analysis of the American Clean Energy and Security Act (H.R. 2454), as passed by the U.S. House of Representatives... The overall impact on the average household, including the benefit of many of the energy efficiency provisions in the legislation, would be 23 cents per day ($83 per year). This is consistent with analyses by the Congressional Budget Office which projects a cost of 48 cents per day ($175 per year) and the Environmental Protection Agency which projects a cost of 22 to 30 cents per day ($80 to $111 per year)." [House Energy and Commerce Committee, EIA's Economic Analysis Of "The American Clean Energy And Security Act Of 2009," 8/4/09; emphasis original]

CBO: In 2020, Cap-And-Trade Will Only Cost An Average Of $175 Annually, "About A Postage Stamp A Day." In its analysis of the American Clean Energy and Security Act, the Congressional Budget Office wrote: "On that basis, the Congressional Budget Office (CBO) estimates that the net annual economy wide cost of the cap-and-trade program in 2020 would be $22 billion-or about $175 per household." Rep. Edward Markey noted it was "the cost of about a postage stamp a day." [CBO, 6/19/09; House Committee on Energy & Commerce Release, 6/20/09]

  • Cap-And-Trade Would DECREASE Energy Prices For Low-Income Americans. In its analysis of the American Clean Energy and Security Act, the Congressional Budget Office wrote, "households in the lowest income quintile would see an average net benefit of about $40 in 2020." [CBO, 6/19/09; emphasis original]

In Fact, Waxman-Markey Will Result In Lower Energy Costs.

By 2025, A Clean Energy Standard Would Save $95 Billion On Energy & Gas Bills.  According to the Center for American Progress: "A national renewable electricity standard, a key piece of the clean energy legislation currently before Congress, would save households and businesses in every state billions of dollars in electricity and natural gas bills... The numbers come from the Union of Concerned Scientists, who earlier this year analyzed a renewable electricity standard that would aim to have 25 percent of our electricity come from renewable sources by 2025. They found that this standard would save families and businesses $95 billion in electricity and natural gas bills through 2030 and spur new investments and hundreds of thousands of new clean-energy jobs." [Center for American Progress, 5/19/09

Steele Scoffs At The Creation Of 1.7 Million American Jobs

Chairman Steele: "The [Heritage] foundation also determined that during the 2012-2035 timeline, job losses would average more than 1.1 million. Add in the fact that it would do almost nothing to prevent 'climate change,' and all that is left is a national energy tax on environmentally friendly clothing." [CNN.com, 8/6/09]

Increased Investment In Clean Energy Technology Would Create Millions Of Green Jobs

Investment In Clean Energy Technology Will Create Over 1.7 Million American Jobs.  According to the Center for American Progress: "Investments in a clean-energy economy will generate major employment benefits for the entire U.S. economy. Our research finds that spending $150 billion on clean-energy investments would create roughly 1.7 million jobs. This is even after assuming a reduction in fossil fuel spending equivalent to the increase in clean-energy investments." [Center for American Progress, The Economic Benefits of Investing in Clean Energy, 6/17/09]

  • Every Single State Will Gain Jobs From An Investment In Clean Energy Technologies. According to the Center for American Progress, investments in clean energy projects would create 1.7 million American jobs in every state in the country. [Center for American Progress, The Economic Benefits of Investing in Clean Energy, 6/17/09]

Steele Supports "Competition" That Only Benefits Private Insurance Companies

Chairman Steele: "The president claims that more government involvement in health care will promote competition. However, creating such a government-run entity would result in a massive government health care monopoly. Private insurers would soon be put out of business, unable to compete with the subsidized government-run plan the president and liberals want." [CNN.com, 8/6/09]

Currently, There Is A Severe Lack Of Competition Among Insurance Providers

Only A Few Insurance Companies Dominate The Market, Leaving Americans With Limited Choices In Health Care. According to the American Medical Association, 94 percent of United States health care markets are considered highly concentrated, meaning that one company or a small group of companies control a great deal of the market. [American Medical Association, "Competition in Health Insurance," 2008 Update]

New York Times: Fears Of A Public Plan Putting Private Plans Out Of Business Are "Overblown." According to the New York Times: "What many critics seem to fear most is that a new public plan would sweep away its private competitors and evolve over time into a full-fledged single-payer system (sometimes called Medicare for all). No matter how fair the competition between public and private plans might be at the start, they warn that the government would find it irresistible to rig the outcome through its regulatory and pricing powers and its ability, in a pinch, to subsidize the public plan with taxpayers' money. That fear seems overblown. Innovative, nimble private plans with well-integrated service systems might outperform any government plan, just as some now outperform Medicare through better coordination of services, stronger preventive care and broader benefits. A new public plan is neither the cornerstone of health care reform nor the death knell of private insurance. It should be tried as one element of comprehensive reform." [New York Times, 4/6/09; emphasis added]

Senate Democrats Have Proposed That Public Health Care Should "Comply With All The Rules And Standards That Apply To Private Insurance" To Ensure That Private Insurance Can Compete.  According to the New York Times: "In an effort to defuse the most explosive issue in the debate over comprehensive health care legislation, a top Senate Democrat has proposed that any new government-run insurance program comply with all the rules and standards that apply to private insurance. The proposal was made Monday by Senator Charles E. Schumer of New York, the third-ranking member of the Senate Democratic leadership, in a bid to address fears that a public program would drive private insurers from the market." [New York Times, 5/5/09]

House Democrats Are Committed To A Public Health Care Option Which Will "Spur Competition Within The Insurance Industry." The Hill reported: "[Majority Leader] Hoyer indicated that House Democrats are committed to including a public plan option in their bill. 'We believe that a public option clearly is going to be necessary' to provide consumers with an alternative to private insurance and to spur competition within the insurance industry, Hoyer said." [The Hill, 3/26/09]

Steele Clings To Data Put Forth By A Suspect Organization

Chairman Steele: "More than 88 million Americans could be forced out of their current private insurance plans and into the government-run plan, according to a study by the Lewin Group." [CNN.com, 8/6/09]

The Lewin Group Is Owned By "One Of The Nation's Largest Insurers."  The Washington Post reported that "the Lewin Group is wholly owned by UnitedHealth Group, one of the nation's largest insurers." [Washington Post, 7/22/09]

Lewin Group Accused Of "Distributing Skewed Data." According to the Washington Post, "the Lewin Group is part of Ingenix, a UnitedHealth subsidiary that was accused by the New York attorney general and the American Medical Association, a physician's group, of helping insurers shift medical expenses to consumers by distributing skewed data. Ingenix supplied its parent company and other insurers with data that allegedly understated the 'usual and customary' doctor fees that insurers use to determine how much they will reimburse consumers for out-of-network care." [Washington Post, 7/22/09]

Lewin Group Studies Buried If Insurance Industry Clients Are Not Happy With Findings.  According to the Washington Post, "not all of the firm's reports see the light of day. For example, a study for the Blue Cross Blue Shield Association was never released, Sheils said. 'Let's just say, sometimes studies come out that don't show exactly what the client wants to see. And in those instances, they have [the] option to bury the study -- to not release it, rather,' Sheils said. Asked to comment, Blue Cross Blue Shield Association spokesman Brett Lieberman said, 'We're still working with Lewin on a study, and, you know, we don't talk about our studies until they're done.'" [Washington Post, 7/22/09]

Lewin VP: Sen. Schumer's Plan Would Result In Only 10-12 Million People Moving To The Public Option.  According to NPR, Lewin Vice President Shiels "did add that in general, the mood in Congress seems to be moving toward a more constrained sort of public insurance program; most likely one that would pay somewhat more than Medicare and limit enrollment. For example, Sheils says, Democratic Sen. Charles Schumer of New York 'has a plan which would require the public program to pay private payer rates - the same rates that other private insurers have to pay - and under that scenario we get only between 10 and 12 million people dropping private coverage.'" [NPR, All Things Considered, 6/10/09]

Steele Is Flat Wrong On Keeping Current Health Coverage

Chairman Steele: "Obama claims that if you like your current health care, you can keep it, but this is simply not true." [CNN.com, 8/6/09]

House Bill Allows For Continuation Of Current Coverage.  According to PolitiFact.com: "The House bill allows for existing policies to be grandfathered in, so that people who currently have individual health insurance policies will not lose coverage." [PolitiFact.com, 7/22/09]

Steele Doesn't Understand The Nuances Of The CBO Estimates

Chairman Steele: "Then there is the issue of cost. Despite what the president says, his government-run plan won't make health care more affordable. Quite the opposite. Nothing ever becomes cheaper by being more expensive, and the Democrats' plan would cost at least $1.6 trillion, according to an analysis by Roll Call. The Congressional Budget Office determined one of the House Democrats' plans would add more than $200 billion to the deficit over the next 10 years." [CNN.com, 8/6/09]

Government-Administered Medicare Is Actually More Efficient Than Private Insurance. The Council for Affordable Health Insurance, "a research and advocacy association of insurance carriers," published a report stating: "Administrative costs are lower under Medicare than for private health insurance." The report added, "our best estimates indicate Medicare at slightly above 5% of total Medicare cost in 2003, whereas the government currently reports about 2%... The private market administrative costs are expected to remain at about 9% of total private insurance cost, excluding premium taxes, commissions, and profit. With such items, private costs would be slightly under 17%." [CAHI, Medicare versus Private Health Insurace: The Cost of Administration, 1/6/06]

CBO Director: Long Term Projections Difficult To Predict Accurately.  During a question and answer period following his testimony in front of the Senate Budget Committee, CBO Director Douglas Elmendorf said: "But it is very hard to look out over a very long term and say very accurate things about growth rates.  So most health experts that we talk with focus particularly on what is happening over the next 10 or 20 years, still a pretty long time period for projections..." [Hearing on CBO Long-Term Budget Outlook, 7/16/09]

CBO: House Bill Would Increase Revenue By $83 Billion And Result In A $65 Billion Net Increase In The Federal Deficit Over Ten Years.  In its letter to Chairman Rangel, the Congressional Budget Office wrote: "According to CBO's and JCT's assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period.  That estimate reflects a projected 10-year cost of the bill's insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years.  By the end of the 10-year period, in 2019, the coverage provisions would add $202 billion to the federal deficit, CBO and JCT estimate.  That increase would be partially offset by net cost savings of $50 billion and additional revenues of $86 billion, resulting in a net increase in the deficit of an estimated $65 billion. It is important to note that the figures presented here do not represent a complete cost estimate for the coverage provisions of the legislation." [CBO.gov, 7/17/09; emphasis added]

Steele Is Overly Concerned About A Minor Provision

Chairman Steele: "The president and his Democratic allies have looked to raise taxes on many small businesses to help pay for his government-run health care scheme, a foolish proposition even during the best of times, let alone during a recession. Many small businesses would be hit with a penalty equal to 8 percent of their payroll for failing to provide insurance for their employees. Punishing small-business owners with punitive tax legislation such as this will only increase the unemployment rate and extend the recession." [CNN.com, 8/6/09]

More Than Nine Out of Ten Small Businesses Will Not Be Affected By Surtax. According to the Center on Budget on Budget and Policy Priorities, "More than nine in ten small businesses would feel no impact whatsoever," meaning "some 96 percent of taxpayers with business income would not owe the surcharge." [Center on Budget and Policy Priorities, 7/17/2009]

Even Those Paying the Surcharge Will Not See Any Impact On Business. According to Citizens for Tax Justice, the surcharge will only affect business profits, and "a small business owner deducts any money that she paid to employees as compensation, as well as any other operating costs...it is only business profits that are taxed."  In addition, "even purchases of equipment to expand business operations would not be affected..." [Citizens for Tax Justice, 7/15/2009]

Health Care Reform Can Save Small Businesses 36% Of Their Health Care Costs and Reduce Profit Losses By More Than 50%. With health care reform, "small businesses can save as much as $855 billion, a reduction of 36 percent."  In addition, "over the next ten years...small businesses will lose $52.1 billion in profits to high healthcare costs.  Healthcare reform can reduce these losses by more than 56 percent, saving $29.2 billion in small business profits..." [Small Business Majority, 6/11/2009]

Health Care Reform That Includes Shared Responsibility Will Save Workers Billions In Wages.  According to a recent study, "Reforming healthcare, and providing support to small businesses under a new system of shared responsibility, can save workers up to $309 billion in wages over the next ten years. [Small Business Majority, 6/11/2009]