Research Briefing

Obama Continues Selling Health Care Bill As Good For Job Creators, But Americans Know His Rhetoric Is “Too Good To Be True”

“For Gene Marks, Who Owns A 10-Employee Company That Sells Business Software Products And Related Services … He Is Skeptical About The Long-Term Cost Benefits… ‘We Do Have This Nagging Thing About How It Will Be Paid For … When Things Seem To Be Too Good To Be True, They Often Are Too Good To Be True.’” (Huma Khan, “Will New Health Care Law Really Help Small Businesses?” ABCNews.com, 4/1/10)

Tina Barresi Of Revere Tanning In Massachusetts: “How Does It Help The Economy To Put An Entire Industry Out Of Business?” (Jill Radsken, “Dark Days For Tanning Salons,” The Boston Herald, 4/1/10) 

SMALL BUSINESSES AND ENTREPRENEURS DON’T BELIEVE OBAMA

Small Business Owner In Maine Says New Tax Credits For Health Care Would Be Wiped Out By New Income Taxes. “[S]mall business owners may get tax breaks and save on health costs for their companies, but if they have to end up paying more taxes in their individual filings, then ultimately they won't benefit at all… [I]ndividuals who make $200,000 and couples who make in the upwards of $250,000 will see their income taxes go up. ‘We're saving it on the business but now we're getting taxed more on our income,’ Marks said. It's just ‘being taken out of somewhere else.’ It's a sentiment that's being echoed by small business owners across the country.” (Huma Khan, “Will New Health Care Law Really Help Small Businesses?” ABCNews.com, 4/1/10)

Oregon Tanning Salons In Agreement, Nothing Positive About A Tax That Is Not Good For Business. “Local tanning salon owners are in agreement that the tax will negatively affect their business. ‘It will definitely increase prices. It’s not a positive thing for business,’ Wolff Sun Center manager Mallory Dowman said. ‘Salons in Eugene and Springfield are locally owned and on a budget. A lot of salons probably won’t make it, and will have to shut down. It’s not positive for any tanning salons.’” (Sarah Walters, “Fighting Tanning With Taxes,” Oregon Daily Emerald, 4/2/10)

Jobs At Sallie Mae In Hanover Township, Pennsylvania In Jeopardy As “The Entire Hanover Township Facility Could Close.” “Changes in the federal student loan program will save billions of dollars in the long term but could cost thousands of jobs - including some, if not all, at the Sallie Mae loan servicing center in Hanover Township. … Sallie Mae estimates a third of its national workforce, or 2,500 jobs, will be cut. A proportionate cut at the Hanover Township facility translates into 319 jobs. Sallie Mae officials said they would be compelled to merge 25 facilities into five, so theoretically, the entire Hanover Township facility could close. But if it is one of the facilities that survives, the local Sallie Mae could gain workers, some observers said.” (David Falchek, “Student Loan Shift Could Cost Jobs,” Hazleton Standard Speaker, 4/2/10)

AND LARGE JOB CREATORS DON’T BELIEVE OBAMA

Verizon Takes $970 Million Hit Due To Obama’s Government-Run Health Care Experiment.. “Verizon Communications Inc., the second-largest U.S. phone company, became the latest company to record a cost related to the U.S. health-care overhaul, saying it will incur a $970 million expense. The one-time, non-cash cost will be taken in the first quarter, New York-based Verizon said yesterday in a regulatory filing. . . ‘This is having an impact on the bottom line and that can cut jobs,’ said Chetan Sharma, an independent wireless analyst in Issaquah, Washington. ‘I am not sure the final story has been told on this’ because most companies still don’t know exactly how the new law will affect them, he said.” (Amy Thomson and Olga Kharif, “Verizon Joins AT&T, Deere In Booking Costs From Health-Care Law,” Bloomberg “BusinessWeek,” 4/2/10)

Exelon Corp. Expects $65 Million Hit In Q1 As A Result Of Obama’s Government-Run Health Care Experiment. “Exelon Corp., the largest operator of nuclear plants in the United States, expects a non-cash charge of about $65 million in the first quarter of 2010 due to the recently passed healthcare reform law. The reduced income tax deductions are also estimated to increase Exelon's total annual income tax expense by about $10 million to $15 million, the company said in a filing with the U.S. Securities and Exchange Commission.” (“Exelon To Take $65M Hit From Healthcare Reform,” Reuters, 4/1/10)

Ohio Industrial Manufacturer Eaton Will Take A $25 Million Charge Due To Obama’s Government-Run Health Care Experiment.. “Industrial company Eaton said Thursday it plans to take a $25 million charge during the first quarter due to the recently-passed health-care legislation. Eaton joined a growing list of companies detailing the financial impact of the health-care bill, which was signed into law by President Barack Obama last week. Eaton said it needs to take the non-cash charge because it won’t be able to receive a subsidy for providing prescription-drug benefits to retirees.” (Matt Egan, “Eaton To Take $25 Million Health Care Hit,” Fox Business, 4/1/10) 

WHILE STATES PREPARE TO BEAR LARGE PORTION OF COSTS FROM OBAMA’S BILL

State’s Will Now Be Subject To Massive Lawsuits, Due To Medicaid Changes, Which Will Force Them To Spend More Than Previously Estimated. “Tucked away on page 466 of President Obama’s 2,704-page health-care bill is a provision that changes the definition of ‘medical assistance,’ the term describing what states are required to provide to Medicaid recipients. States have in the past been required to provide payment for services to physicians. Now, under the new definition, states will be liable for ensuring provision of ‘the care and services themselves.’ ‘…[I]t leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service, even if that service is limited by virtue of the rates we pay,’ said Alan Levine, Louisiana’s secretary of health and hospitals, in a recent memo prepared for fellow state government officials. Levine wrote: ‘DHH cannot estimate the cost of this, but it is not even worth estimating. It will be substantial.’” (Jon Ward, “States Fear That Five Words In Obama Health Law Will Open Door To Lawsuits,” The Daily Caller, 4/2/10)

Indiana Medicaid Program Estimates It’ll “Lose Some $400 Million In [Prescription Drug] Rebates Alone” Over 10 Years. “The Indiana Medicaid program has a strong history of negotiating some of the most favorable prescription drug rebates in the nation. … The new federal health care reform legislation increases the minimum rebate level for most brand name and generic prescription drugs. Unfortunately for Indiana, the savings we achieve now will be confiscated by the federal government at a cost to Hoosier taxpayers. … In state fiscal year 2011, our estimates show an immediate impact of $25 million, and this figure will grow each year. Over the next 10 years, we’ll lose some $400 million in rebates alone because of the federal health care reform legislation.” (Indiana Family & Social Services Administration Secretary Anne W. Murphy, Letter To Indiana OMB Director Ryan Kitchell, 3/26/10)