The effects of Obamacare will reach every niche of the health care system, but they won’t stop there. The new health law will also have widespread negative effects on the economy, especially businesses, which are already facing growing health care costs and incentives to dump coverage altogether. Congressman John Kline (R–MN) put it well when he said, “To suggest this doesn’t undermine job creation is to deny reality.”

At a hearing held last week by the House Committee on Education and the Workforce, lawmakers heard from experts and those affected by the health care law in order to better understand the impact of Obamacare on the economy, employers, and the workforce. The overriding message of the hearing was that several provisions of Obamacare will make it more difficult for employers to create new jobs and expand their businesses. This at a time when the economy is struggling to recover and unemployment is at 9 percent.

On behalf of the National Retail Federation, representing nearly 25 million workers in the United States, Neil Trautwein told the committee that Obamacare penalty mandates “are affecting expansion, franchising and hiring decisions today [within the retail community].”

Trautwein specifically stated that one of the nation’s largest quick-serve restaurant chains would lose one-third of the chain’s profits per year as a result of the new health care law, “potentially causing hundreds of restaurants in the system to go out of business, eliminating up to 12,500 jobs.” This was one of four examples of lost jobs and hurt business Trautwein outlined as casualties among American retailers under the new law. Far more will face similar struggles.

Gail Johnson, president and CEO of Rainbow Station Inc., a franchised business, highlighted the role of franchise businesses in “lead[ing] the economy on the path to recovery.” Unfortunately, these businesses will face an uphill battle to recover because of the health care law’s requirement for employers to offer generous minimum essential benefits packages to avoid the $2,000-per-worker penalty under the employer mandate. Johnson added, “These measures will further stunt any economic recovery and curtail future job growth.”

So far, the evidence shows that liberals’ claim that Obamacare will help the economy and create jobs is wrong. But CBO Director Doug Elmendorf confirmed before the House Budget Committee last week that the health care law will result in roughly 800,000 fewer full-time jobs.

Heritage research confirms that the effects of Obamacare on the economy will be negative and far-reaching. Heritage’s Center for Data Analysis fount that the new health law will “reduce economic growth by stifling the new innovations that a dynamic population demands, resulting in slower economic growth, longer periods of unemployment, and reduced opportunities for savings and investment used to build nest eggs for households.”

The House of Representatives has launched a series of aggressive hearings on the consequences of Obamacare, and last week’s hearing at the House Committee on Education and Workforce confirmed that Obamacare will undermine America’s job creators and their ability to catalyze economic growth. Congress should act to encourage a return to economic prosperity, and the first step should be to repeal Obamacare due to its burdensome effects on businesses. To read more about how Obamacare will impact the economy, click here.

Co-authored by Amanda Rae Kronquist. Kronquist is currently a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: