There is an obvious omission from all the previews of the President’s upcoming speech on jobs: Obamacare.
Obamacare is perhaps the most damaging of the Administration’s policies that are impeding the country’s recovery. At a time when there should be a focus on cutting spending, reducing regulation, and lowering taxes, Obamacare does the complete opposite. It spends more, imposes costly new mandates and regulations, and raises taxes on individuals and businesses. This is no way to get the economy up and running again.
More Spending. While proponents argue that Obamacare reduces the deficit, those assertions are made based on typical Washington smoke-and-mirrors accounting gimmicks. The harsh reality is that Obamacare spends $1.4 trillion over the next 10 years to expand an already struggling Medicaid program ($627 billion) and create a costly new subsidy entitlement ($777 billion).
Costly Mandates and Regulations. Obamacare imposes a penalty on employers with over 50 employees that do not offer government-qualified health insurance. This provision will hurt job creation, especially in the small business sector, where the economic incentive will be to stay under 50 employees. Moreover, since the health care law was written in such haste, many of the specifics await regulatory instructions, including what qualifies as a government-approved plan, leaving businesses with greater economic uncertainty.
Higher Taxes. Obamacare imposes nearly $500 billion in new taxes on individuals and businesses over the next 10 years. They include a 2.3percent excise tax on medical devices, $28 billion in new “fees” on brand name drug manufacturers, a new tax on investment income for couples earning over $250,000 a year, and annual premium taxes on health insurance policies that start at $8 billion in 2014, grow to $14.3 billion in 2018, and will continue to escalate based on premium growth (that is, faster than general inflation) every year thereafter. Raising taxes in this economy is no way to build job growth.
Indeed, a just released economic analysis of the Obamacare excise tax on medical devices concludes, “Under reasonable assumptions, the tax could result in job losses in excess of 43,000.” Furthermore, businesses of all kinds that currently offer their workers health insurance have already begun to calculate the costs of the new health care law, and the future does not look good for these job creators.
Nancy Pelosi was right when she said, “We have to pass the bill so that you can find out what is in it.” As more individuals and businesses learn about the law, the less there is to like it about it. It doesn’t take a Ph.D. in economics to understand that this health care law is not a prescription for curing an ailing economy.
When it comes to fixing the economy, the President should start with “Do no harm.” But to do that, he would have to admit that Obamacare was a mistake.