Research Briefing

Obama’s Claim That His Government-Run Health Care Bill Will Help Job Creators Is Just A Bad April Fools’ Joke

“Obama, Who’ll Be Accompanied By Small Business Administrator Karen Mills, Is Expected To Talk Up The Health Care Plan’s Tax Credits For Businesses With 25 Or Fewer Employees That Provide Health Coverage To Their Workers.” (David Sharp, “Obama To Address Health Care Rally In Maine,” The Associated Press, 3/31/10)

SO WHY AREN’T MAINE’S JOB CREATORS FOOLED BY OBAMA’S RHETORIC?

Augusta-Based Community Pharmacies’ President Says Mandate “Could Be A Job Killer.” “Community Pharmacies president Joe Bruno does provide healthcare for his workers ... paying thousands of dollars each month to do it. … And says - it could be a job killer - because if you’re a business owner looking to expand - the cost of health insurance coverage for employees could deter the creation new jobs.” (“Healthcare Hurting Businesses?” WGME-TV, 3/25/10) 

Owner Of A South Portland Tanning Salon Says Tax Will “Hurt Her Efforts To Bring In New Customers.” “A South Portland business owner says he isn’t happy about part of President Obama’s new health care reform package signed into law yesterday. Part of the legislation calls for a 10% tax on all services at tanning salons. The owner of ‘Local Acapulco’ says her industry is being unfairly targeted - and the new tax is going to hurt her efforts to bring in new customers.” (“Tax On Tanning,” WGME-TV, 3/24/10)

• Cami Hondel, Local Acapulco: “People Struggle As Is To Come In And Purchase A Luxury. Now That You’re Going To Add A Tax To That, That’s Salt On An Open Wound.” (WGME-TV’s, “WGME News 13 Live at Five,” 3/24/10)

Newman Concrete Services In Richmond Cut Back 100 Employees, Might Not Rehire More Than 25 To Avoid Mandate. “Such penalties make Doug Newman, owner of Newman Concrete Services in Richmond, Maine, nervous. In the past 18 months, as the economy battered the construction industry, Newman’s work force shrunk from 125 employees to just 25. He is worried that once the economy turns and he begins to hire back workers, he’ll face a critical decision when he nears the 50-worker mark and is no longer exempt from penalties. Newman now pays 60 percent of his employees’ individual premiums and 40 percent of their family premiums. ‘The 51st employee could mean $100,000 in costs. I’ve been calling it the concrete ceiling,’ he said. ‘No employer is going to hire No. 51 if it brings all these mandates down on you, because they’re pretty onerous.’” (Steve LeBlanc, “Small Businesses Fret Over Details Of Health Law,” The Associated Press, 3/31/10)

Maine Association Of Health Underwriters Said ObamaCare Is A “Job Killer” That’ll “Kick [Companies] While They Are Down.” “Joel Allumbaugh, president of the Maine Association of Health Underwriters, said in an e-mail Tuesday that insurance brokers are fielding many questions from business owners this week. Allumbaugh called the reform package a job killer, citing mandates that will apply to employers with more than 50 workers. ‘Companies are already struggling to survive in this economy,’ he wrote. ‘This bill will kick them while they are down.’” (John Richardson, “Measure’s Impact On Small Businesses Expected To Vary,” The Portland Press Herald, 3/24/10)

Owner Of Borealis Breads In Portland Said “Our Health Insurance Costs Will Be Going Up.” “Jim Amaral, owner of Borealis Breads, expects to spend more money as soon as the mandates take effect in 2014, because his company already has more than 50 workers and will have to expand its coverage. … Borealis Breads, meanwhile, has 55 workers at its three locations in Portland, Wells and Waldoboro. As many as 20 decline health insurance because they don’t want to pay the rising employee premiums, Amaral said. When the mandates take effect in 2014, ‘all of our employees would have to be covered,’ he said. ‘Our health insurance costs will be going up.’” (John Richardson, “Measure’s Impact On Small Businesses Expected To Vary,” The Portland Press Herald, 3/24/10)

Maine NFIB State Director David Clough: “The Increased Costs To Small Business Owners Will Be Job- Killers… If It Doesn’t Work For Small Businesses, It’s Not Going To Work For Maine…” (Rebekah Metzler, “Help Or Hurt: New Law Will Impact Small Biz,” Lewiston Sun Journal, 3/25/10)

BECAUSE THEY KNOW EXACTLY WHAT’S IN THE BILL

Obama’s Bill Has $570 Billion In New Taxes, Much Of It On Investment Income And Small Businesses. “The reconciliation bill’s changes to the Medicare tax represent the largest single revenue raiser in the health reform package. The CBO estimates the provision would raise $210 billion over 10 years. Currently, the Medicare payroll tax is 2.9% on all wages -- with the worker and his employer each paying 1.45%. The reconciliation bill, like the Senate bill, would raise the percentage paid by high-income individuals by 0.9 percentage points, so an individual would pay 2.35% on his wages. The reconciliation bill, however, also would subject the investment income of high-income households, such as dividends, interest and rent, to a 3.8% Medicare tax.” (Douglas W. Elmendorf, Letter To Speaker Nancy Pelosi, 3/20/10; Jeanne Sahadi, "Health Reform: Where The Money Will Come From," CNN Money, 3/18/10)

Takes Away “Tax Deductions For Companies With Drug Coverage For Their Retired Employees” That Will “Discourage Companies From Hiring More Workers.” “An association representing 300 large corporations urged President Obama and Congress on Monday to repeal a provision of the health care overhaul that prompted AT&T, Caterpillar and other companies to announce substantial charges for the current quarter. The association, the American Benefits Council, said the provision -- which reduces the tax deductions for companies with drug coverage for their retired employees -- would deal a significant blow to corporate profits and would discourage companies from hiring more workers. ... James A. Klein, the president of the American Benefits Council, called the provision ‘a serious mistake that is having negative and unintended consequences.’” (Steven Greenhouse, "Companies Push To Repeal Provision Of Health Law," The New York Times, 3/29/10)

And Levies $2000 Per Worker Tax To Those Who Don’t Provide Health Insurance, Including Part-Time Or Seasonal Employees. “APPLICABLE PAYMENT AMOUNT... in subsection (d)(1), by striking ‘$750’ and inserting ‘$2,000...’ FULL-TIME EQUIVALENTS TREATED AS FULL-TIME EMPLOYEES.--Solely for purposes of determining whether an employer is an applicable large employer under this paragraph, an employer shall, in addition to the number of full-time employees for any month otherwise determined, include for such month a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120.” (Sec. 1003, H.R. 4872, "Health Care And Education Reconciliation Act Of 2010," As Passed By The House, 3/21/10)