Research Briefing

With Rising Unemployment Creating Economic Uncertainty, Why Is Obama Pushing Job-Killing $1 Trillion Gamble With Our Health Care?

RNC CHAIRMAN MICHAEL STEELE: “We don’t know how many Americans will still be searching for work next year.  We don’t know how long rising joblessness will trouble us.  We don’t know how far our commercial real estate problems might unravel.  We don’t know how much President Obama’s unprecedented spending binge might devalue the dollar or how much inflation it could inflame. We don’t know if a double-dip recession is only in our fears or around the corner. But, we do know this: Now is not the time for Las Vegas on the Potomac – to gamble a trillion dollars on this irresponsible Congress’s 2,000 page health care concoction. (Michael Steele, "Las Vegas On The Potomac," Politico, 12/7/09)

BUT WITH RISING JOB LOSS, OUT-OF-CONTROL DEBT CREATING ECONOMIC UNCERTAINTY …

Including Discouraged Workers, Real Unemployment Rate At 17.2 Percent. “[M]ost headlines will show that the U.S. unemployment rate in November was 10.0 percent … [T]hat under-counts the true number of unemployed … it doesn’t count those people who don’t have a job and have given up looking for one, or those who have found marginal part-time work but still can’t make ends meet and are still looking for a full-time job … If you add all of those people in, the total unemployment rate in the U.S. is 17.2 percent ...” (Erick Schonfeld, “Mint Explains Why The Real Unemployment Rate Is 17.2 Percent,” The Washington Post, 12/4/09)

• And The Federal Reserve Says Unemployment Will Remain High Through 2012. “Fed officials barely budged from their previously somber prognosis of plodding growth, high unemployment and low inflation for the next two years … they predicted that the jobless rate would be 9.3 to 9.7 percent in 2010 … [and] that unemployment would average about 7 percent even in 2012.” (Edmund L. Andrews, “Fed Cautions About Strength Of Recovery,” The New York Times, 11/24/09)

Obama’s Spending Led To Record Deficit Of $1.42 Trillion This Year, Tripling Previous Record Last Year. “The deficit for fiscal year 2009, which ended Sept. 30, came in at a record $1.42 trillion, more than triple the record set just last year.” (David Jackson, “Obama Team Makes It Official, Budget Deficit Hits Record. By A Lot,” USA Today’s “The Oval“ Blog, 10/16/09)

• And Obama Admits Rising Debt Could Lead To “Double-Dip Recession.” “It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.” (Chuck Todd, “Obama Warns Of ‘Double-Dip Recession,’” MSNBC.com, 11/18/09)

AND DEMS PROPOSING MORE SPENDING WITH STIMULUS II AFTER FAILURE OF STIMULUS I …

Since Obama Signed His $787 Billion Economic Experiment In February, Over 2.8 Million Jobs Have Been Lost. (U.S . Bureau of Labor Statistics, www.bls.gov, Accessed: 12/4/09)

But Congressional Dems Planning To Rush Through Stimulus II Before End Of The Year. “House Democratic leaders are floating the idea of adding job-creating measures to a must-pass omnibus spending bill ... An omnibus bill is currently seen as the best, if not only, option to pass more targeted job-creating legislation this year ... House Speaker Nancy Pelosi (D-Calif) and House leadership are considering a two-pronged approach in the bill : Bolstering safety-net programs like COBRA and food stamps, while also funding infrastructure projects.” (Jake Sherman, "House Democrats Float New Jobs Plan," Politico, 12/2/09)

And Stimulus II Could Cost As Much As $300 Billion. “The cost of a new jobs bill Democrats hope to move early next year runs to nearly $300 billion when major proposals under serious consideration are added up. Law makers are calling for extending aid to the unemployed, infrastructure spending, a hiring tax credit and increased small business loans.” (Walter Alarkon, “Job Proposals From Democrats Could Add $300 Billion In New Federal Spending,” The Hill, 12/3/09)

WHY IS OBAMA GAMBLING $1 TRILLION IN TAXPAYER MONEY ON GOVERNMENT-RUN HEALTH CARE EXPERIMENT THAT WILL KILL JOBS …

Obama-Reid Health Care Experiment Costs $940 Billion, Includes $493 Billion In Tax Increases. “To get a fair read on the total cost of the health bills, we should therefore add together the gross cost of coverage expansions and the cost of the other provisions that increase spending … the real gross cost of the Senate health bill is $940 billion over ten years.” (Donald Marron, “How Much Does The Senate Health Bill Cost?,” Donald Marron Blog, 11/19/09; Douglas W. Elmendorf, Letter To Senator Harry Reid, 11/18/09)

Dems’ Employer Mandate A “Punitive Payroll Tax” For Businesses Who Can’t Afford Government-Approved Health Insurance, Killing Jobs And Reducing Wages. “An employer mandate with a punitive payroll tax … could cost 1.6 million jobs with more than 1 million of those jobs lost in the small business sector. The approach fails to increase affordability and, instead, devastates the economy - with the greatest impact being levied on the low-income community who will pay through depressed wages and lost jobs ...” (Susan Eckerly, Letter To Representative, National Federation Of Independent Businesses, 7/15/09)

Dems’ Tax On Health Insurance Would Hit Small Business Hardest. “Small employers would also probably be hit by the taxes … small businesses tend to pay more for their insurance than bigger employers that can negotiate better premiums … About 14 percent of small employers, counted as those with fewer than 500 workers, now offer policies that would be subject to the excise tax … ‘That is a very heavy hammer on the cost of your premiums,’ said Donna Marshall, the executive director of the Colorado Business Group on Health … ‘You don’t want to cause a chilling effect on the employers who are trying to do the right thing.’” (Reed Abelson, “A Proposed Tax On The Cadillac Insurance Plans May Also Hit The Chevys,” The New York Times, 9/20/09)

Dems’ Medicare Payroll Tax Hike Would Hit Several Small Business Owners. “The legislation would be paid for through a … a payroll tax on the wealthy ...”; “In a 2007 survey, the National Federation of Independent Business found that about 15 percent of small-business owners -- and half of those with at least 20 employees -- said they expected their household income to exceed $200,000.” (Ricardo Alonso-Zaldivar, “Tempers Flare As Senate Debates Health Care,” The Associated Press, 12/2/09; Lori Montgomery and V. Dion Hayes, “Small Businesses Brace For Tax Battle,” The Washington Post, 4/27/09)

INSTEAD OF SUPPORTING REPUBLICAN IDEAS TO LOWER HEALTH CARE COSTS?

Republican Bill Would Lower Premiums For Americans By Up To 10 Percent. “CBO estimates that the combination of provisions included in the amendment would reduce average private health insurance premiums per enrollee in the United States relative to what they would be under current law … In the small group market, which represents about 15 percent of total private premiums, the amendment would lower average insurance premiums in 2016 by an estimated 7 percent to 10 percent compared with amounts under current law." (Congressional Budget Office, Letter To Honorable John A. Boehner, 11/4/09)

By Allowing Small Business Pooling To Purchase Insurance, Expanding Individual Health Savings Accounts, And Reducing Frivolous Medical Lawsuits. “That amendment contains several provisions that are intended to increase rates of insurance coverage by reducing its costs or subsidizing its purchase, including … establishing association health plans … Changes to health savings accounts (HSAs) to allow funds in such accounts to be used to pay premiums under certain circumstances … Limits on costs related to medical malpractice ...” (Congressional Budget Office, Letter To Honorable John A. Boehner, 11/4/09)