Research Briefing

ObamaCare Will Cost Jobs At A Time When The Economy Can Least Afford To Lose Them

OBAMACARE HURTS JOB CREATORS, JEOPARDIZING RECOVERY

ObamaCare Is A Lose-Lose Situation For Businesses. “That's not how the National Council of Chain Restaurants sees it. Restaurant group vice president Scott Vinson says the entire restaurant industry will have trouble dealing with costs the bill imposes in 2014, including a $2,000-per-worker penalty that companies with more than 50 employees must pay if their workers end up purchasing federally subsidized insurance rather than getting insurance from their employers. ‘There is the expense of actually providing the insurance, then the expense of not providing insurance,’ says Vinson. ‘It will be expensive either way.’” (Sabrina Eaton, “Ohio Hamburger Chain Says Insurance Reform Will Bite Into Profits,” The Cleveland Plain Dealer, 7/4/10)

CBO: Penalizing Businesses Who Do Not Provide Full-Time Employees Insurance Will Encourage Businesses To Cut Hours And Salaried Positions. “Alternatively, because firms are penalized only if their full-time employees receive subsidies from exchanges, some firms may instead hire more part-time or seasonal employees.” (“The Budget and Economic Outlook: An Update,” CBO, 8/19/10)

ObamaCare Is Paid For With Nearly $570 Billion In Job-Costing Taxes On Small Businesses, Investments And Innovation.  (Douglas W. Elmendorf, Letter to Speaker Nancy Pelosi, 3/18/10)

ObamaCare Will Make It Hard For Businesses Like White Castle To Maintain Current Jobs, “Let Alone Create New Jobs.” “The financial hit will make it hard for the company to maintain its 421 restaurants, let alone create new jobs, says company spokesman Jamie Richardson. White Castle employs more than 10,000 people nationwide, and more than 1,200 in Ohio.” (Sabrina Eaton, “Ohio Hamburger Chain Says Insurance Reform Will Bite Into Profits,” The Cleveland Plain Dealer, 7/4/10)

Massachusetts Medical Device Companies Said Tax "Could Stifle Innovation, Drive Jobs Overseas, And Force Them To Raise Prices." "On the same day, Patrick hosted more than a dozen representatives from the Massachusetts medical device industry at the State House. They told him the tax could stifle innovation, drive jobs overseas, and force them to raise prices. Richard A. Packer, chief executive of defibrillator maker Zoll Medical Corp., based in Chelmsford, has met with Brown and Patrick to discuss the issue. 'I think the medical device bill is ill-conceived, and is not a good part of the legislation,' he said. 'I'm in favor of repealing it in total, or going in and seeing how it can be adjusted.'" (D.C. Denison, "Repeal Of Medical Devices Tax Unlikely," The Boston Globe, 4/3/10)

OBAMACARE BURDENS BUSINESSES UNDER A HOST OF NEW REGULATIONS

Businesses Are Worried About “The Sheer Volume Of Paperwork.” “There is also some concern about how to digest the sheer volume of paperwork. ‘There's administrative burden just to try and understand the 2,400 pages of the document,’ says Jenn Mann, vice president of human resources at software maker SAS Institute Inc.” (Dana Mattioli, “Firms Feel Pain From Health Law,” The Wall Street Journal, 12/13/10)

Small Business Employers Are Among The Hardest-Hit By Premium Increases, And Are Facing Extra Tax Paperwork Under ObamaCare. “Small-business employers have been among the hardest-hit by double-digit premium increases, which health insurers blame in part on the cost of complying with new coverage mandates in the law, like allowing children to stay on a parent's plan until their 26th birthday. They also are facing extra tax paperwork under the law, and the National Federation of Independent Business has joined 20 states that have sued to overturn the law.” (Janet Adamy, “Health Benefits Appear On Rise,” The Wall Street Journal, 11/2/10) 

ObamaCare Will “Swamp U.S. Businesses With A Flood Of New Tax Paperwork” By “Radically Alter[ing] The Nature Of 1099s.” “An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork. ... The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.” (Neil deMause, "Health Care Law's Massive, Hidden Tax Change," CNNMoney.com, 5/5/10)

• Companies Will Have To Send 1099s To Contract Workers, Individuals, And Corporations If They “Buy More Than $600 In Goods Or Services [From Them] In A Tax Year.”  “Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. ... But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.”(Neil deMause, "Health Care Law's Massive, Hidden Tax Change," CNNMoney.com, 5/5/10)

OBAMACARE ONLY FURTHER HINDERS AN ALREADY STRUGGLING ECONOMY

Fed Chairman Ben Bernanke Said “It Could Take Four To Five Years For The Job Market To Normalize Fully.” “Fed Chairman Ben S. Bernanke last week said the unemployment rate will probably fall slowly even with a pickup in U.S. growth this year. At the pace of improvement projected by Fed officials, ‘it could take four to five more years for the job market to normalize fully,’ Bernanke said Jan. 7 in testimony to the Senate Budget Committee.”  (Courtney Schlisserman, Initial U.S. Jobless Claims Rose More Than Forecast To 445,000 Last Week,” Bloomberg, 1/13/11)

“Last Year Ended On A Disappointing Note, As The American Economy Produced Just 103,000 Jobs In December, Suggesting That Economic Deliverance Will Not Arrive With A Great Pop In Employment.”  (Michael Powell and Sewell Chan, “December Jobs Report Keeps White House On Defensive,” The New York Times, 1/8/11)

• “Signs Point To A Long Slog Of A Recovery In The U.S. Job Market.” “Rather, many signs point to a long slog of a recovery in the U.S. job market, with the unemployment rate quite likely to remain above 8 percent — it now sits at 9.4 percent after Friday's report — at least through the rest of President Barack Obama's four-year term.”  (Michael Powell and Sewell Chan, “December Jobs Report Keeps White House On Defensive,” The New York Times, 1/8/11)