Research Briefing

Chicago-Style Bullying Against Job Creators Begins As More Businesses, States Show How Much Government-Run Health Care Will Cost Them

WAXMAN BEGINS TO BULLY JOB CREATORS FOR TELLING THE TRUTH

ABOUT HOW GOVERNMENT-RUN HEALTH CARE WILL HURT THEM …

Rep. Henry Waxman (D-CA) Tells CEOs Who Reported New Health Costs That He Doesn’t Believe Them, To Provide Proof. “Representative Henry Waxman called the chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. to provide evidence to support costs the companies plan to book related to the new health-care law. Waxman of California, chairman of the House Energy and Commerce Committee, and subcommittee Chairman Bart Stupak of Michigan released letters they wrote to the executives, saying their plans to record expenses against earnings as a result of the law contradict other estimates. The lawmakers requested the executives appear at hearing Stupak plans on April 21.” (Viola Gienger, “AT&T, Deere CEOs Called By Waxman To Back Up Health-Bill Costs,” BusinessWeek, 3/27/10)

WITH MORE LOCAL JOB CREATORS BRACING THEMSELVES FOR HIGHER TAXES AND COSTS …

CEO Of LifeLine Foods In Missouri Says Government-Run Health Care “Will Likely Lead To Higher Costs.” “‘Taken as a whole, the health care overhaul will likely lead to higher costs,’ said Bert Farrish, CEO of LifeLine Foods. ‘The higher costs will be phased in over time.’ The company, which has about 130 employees, is now assessing the law’s contents. ‘There’s a long process ahead of us,’ Mr. Farrish said.” (Ryan Davis, “Area Employers Carefully Examine Health Overhaul,” St. Joseph News-Press, 3/28/10)

Medical Device Tax Seen As “Death Blow For Start Ups” In Massachusetts. “Beginning in 2013, medical device manufacturers will pay a 2.3 percent excise tax on their revenues. … Joe Metzger, senior vice president at Smith & Nephew, said his company is still analyzing the impact of the new tax. But, he said, it is difficult to see the logic of trying to control health expenses, as reform intends, while raising the cost of medical products. …Metzger said that some in his industry are worried that the new tax will stifle innovation and kill off start-up companies, which often struggle with years of losses before reaching profitability. Under the reform law, those money-losing companies will still be hit with the tax on their sales. ‘It could be a death blow for start-ups or other entrepreneurial companies that decide they can’t afford the additional expense,’ he said.”  (Ken Johnson, “Government, Industry, Bracing For Impact Of Health Reform,” The Eagle-Tribune, 3/28/10)

Manager Of Indiana Tanning Salon Said Tanning Tax “May Cost Jobs.” “There are myriad provisions, from taxes on tanning salons to mandates on what coverage private insurers must provide. … Cassie McBride, who manages a West Lafayette tanning salon, says the tax on her business may cost jobs.” (Amanda Hamon, “A New Frontier For Health Care,” Journal And Courier, 3/28/10)

Indiana Medical Device Entrepreneur Says “We Will Be Hit With The Device Company Tax” And It’ll Be Hard To Start Companies, Create Jobs. “Nano-Rad LLC is a seed stage startup company at Purdue Research Park in West Lafayette. It plans to improve the standard of care for patients who receive radiation therapy. … Richard Mussmann, president and chief executive officer at Nano-Rad. ‘We will be hit with the device company tax… Until the dust settles, it is probably harder for myself and other medical device entrepreneurs to get new, innovative companies started that will create the jobs and lower the costs of health care that the economy needs.’” (Max Showalter, “Employers Anxious About How Reform Will Play Out,” Journal And Courier, 3/28/10)

Arizona Restaurant Association Says In A Troubled Economy, “Putting Another Regulation On Isn’t The Best Idea.” “Buried on page 1,206 of the 2,400-plus pages of the health-care-reform law is a provision requiring chain restaurants around the nation to post calorie counts for each menu item they serve. They also will have to make other nutritional information available on request… The new federal law applies to all restaurants or vending operators that have 20 or more locations or machines nationwide… Steve Chucri, president and chief executive of the Arizona Restaurant Association, said his organization and its members would have preferred to let the market, not the government, determine a policy. The association represents more than 10,000 food establishments in the state… Also, with the troubled economy, ‘some of our members will be frustrated by this. . . . Putting another regulation on isn’t the best idea,’ Chucri said.” (Ginger Rough, “Health Law Requires Chain Restaurants To Post Nutrition Information,” THE ARIZONA REPUBLIC, 3/29/10)

Nebraska Student Lending Firm Says “Poor Public Policy” Will Lead To Job Cuts In Next Several Months. “Congressional votes Thursday to end federally subsidized student lending by private companies will mean job cuts at Lincoln student loan company Nelnet, a company spokesman said Friday. ‘We are very disappointed by this political news,’ said spokesman Ben Kiser. ‘We believe it is poor public policy that will eliminate a part of our business and result in job losses in our community.’ Kiser declined to give any details about the scope of the cuts, although he said they will occur over the next several months. Nelnet employs about 2,100 people, including more than 800 in Lincoln.” (Matt Olberding, “End Of Student Loan Program Will Mean Job Cuts At Nelnet,” Lincoln Journal-Star, 3/26/10)

AND STATE GOVERNMENTS PREPARING TO RAISE TAXES TO PAY FOR FEDERAL MANDATES

So-Called “Savings” In Dems’ Bill Are Speculative, And If They Do Happen, “It Will Be At The States’ Expense.” “Forget the Washington gobbledygook about it saving the federal treasury money over the next 10 or 20 years. Nobody seems to be able to predict federal spending over a two-month period, let alone two decades. If the feds do realize a net gain, as backers of the legislation predict, it will be at the states’ expense.” (George Skelton, “California Could Take Big Hit From Healthcare Overhaul,” The Los Angeles Times, 3/25/10)

Former Governor Dean Says States Are Already Bankrupt And Will Need To Raise Taxes.  “Look, the states are in a terrible, terrible bind. It really is a problem for them. Places like California are virtually, virtually bankrupt. I mean I think their bond rating is junk. You know, New York is in big trouble. So they’ve got to do something and there’s just so much you can cut. I think you got to cut, cut, cut, cut but at some point they’re going to have to raise taxes. It is true, whether you like it or not, that the biggest untapped source of taxes for states that makes any sense, is taxes on services.” (CNBC’s “Squawk Box,” 3/29/10)

Dems’ Government-Run Health Care Experiment Adds $300 Million To New York’s Deficit. “The federal health care overhaul President Obama signed on Tuesday adds an extra $300 million to New York state’s budget deficit. The problem involves Medicaid reimbursements that state and local governments can use to help balance their budgets, per the rules of the federal stimulus… The state is now out $300 million in its 2010-11 fiscal year, which starts April 1, and another $400 million in its 2011-12 fiscal year. ‘They took money the state was budgeting for and provided it to local governments. They changed the rules of the game in the middle of the game,’ said Matt Anderson, spokesman for the state Division of the Budget.” (Adam Sichko, New Health Care Law Adds $300M To NY’s Deficit,” The [Albany] Business Review, 3/24/10)

State Of California Estimates Dems’ Government-Run Health Care Experiment Will Cost Them “$2 Billion To $3 Billion” Annually. “Figure $2 billion to $3 billion. That’s the state of California’s rough estimate of what national healthcare expansion ultimately will cost it each year.” (George Skelton, “California Could Take Big Hit From Healthcare Overhaul,” The Los Angeles Times, 3/25/10)