The Unaffordable Health Care Act
Last spring my wife and I stopped in Princeton, NJ and had breakfast at a busy coffee shop. The owner, a friendly chap, stopped at our table and began to chat with us. I remarked that business was brisk and he informed me that he and his partner have two other coffee/breakfast establishments that were just as busy.
It seemed a good time to pop the question. What possible impact did he think the ObamaCare employer mandate, which requires businesses with 50 or more full-time employees, to offer insurance to pay a $2,000 penalty each worker beyond 30 employees would have on his business? Rolling his eyes and shaking his head he told me it was definitely going to adversely affect how many people he will employ since labor mandates raise hiring costs.
This nugget of entrepreneurial despair was recalled when I read about the recently released Congressional Budget Office study whose job loss predictions don’t even factor in the impact of the ObamaCare employer mandate. There are nearly 8 million Americans working part time who want full time work and now the CBO tells us that the U.S. economy will lose the equivalent of two million full time workers by 2017, when the major provisions of the Affordable Health Care Act are in full swing, and another half million over that figure in the next decade.
Sound economics are supposed to grow employment not attenuate it. The ACA, says the CBO, will also reduce the total number of hours worked on net by about 15-20 hours during the period between 2017 and 2024. The largest decline in labor supply and hours worked will occur disproportionately among lower-wage workers — count on it! Yet Obama pretends he is helping these workers, giving America a raise as he shamelessly puts it, by increasing minimum wage levels which despite all the populist demagoguery will not foster economic opportunity and will instead restrict the labor market in a way that most conspicuously hurts those who need the most help. Moreover, the CBO estimates that the cost of ObamaCare will be approximately 2 trillion over the next decade and that just as many Americans will lack health insurance in 10 years as before the law was passed.
Are you scratching your head yet over why America is embarking on such a self-defeating proposition? The central thrust of the ACA, its raison de etre, was that the ACA would give health coverage to the 30 million who lacked it. Instead we dish out a couple of trillion to get two and a half million more unemployed and with essentially no reduction in the number of uninsured. This is the most depressing news about ObamaCare since the president assured us that if you like your health plan you can keep it. In the Obama pageantry, the bouquets that are being showered upon the adoring crowds keep turning into hand grenades.
Incredibly, the White House spins the CBO report (and believe me its spinning like a pinwheel amid a mighty gust of wind) by saying that the CBO estimate of job losses is not related to prospective layoffs and pink slips, but the result of fewer people choosing to work, or working fewer hours, once their federally subsidized health insurance makes quitting their jobs less desirable. That the Obama Administration is finally realizing that taxes, subsidies and the like actually affect human economic behavior is scarcely the point. What is the point is that after expenditures of almost $2 trillion and a massive disruption of the U.S. medical system you will still roughly have the same number of people uninsured.
It’s clear that the Obama Administration is drowning in a roiling and angry sea of its own making and is grasping for any life preserver available. What makes this study even more disconcerting, at least from the Administration’s perspective, is that the CBO tends to be populated by left-leaning economists. So it’s altogether possible the news is worse than what is being reported; at best, even under the sunniest scenario, the news is not good.
What we have to look forward to is a record number of people on food stamps or tax credits, more than a trillion and perhaps as much as two trillion spent on expenditures, insurance companies in chaos, the CBO reporting that the economy is not growing as fast as they expected (what a shock!), a loss of more than two million jobs and still at the end of the day some 30 million still uninsured. Once again, we have enormous sums being wasted on another poorly devised government program. Instead of directing these resources into a private and productive economy we pigeonholed it into bureaucratic subsidies for political constituencies. It all goes to show, quite sadly, that there is a lot more wrong with ObamaCare than a badly organized and incompetently executed website.