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Morning Bell: President Obama's Job Killing Health Care Tax

Posted By Conn Carroll On July 6, 2009 @ 8:26 am In Ongoing Priorities | Comments Disabled

On June 15th, the Congressional Budget Office issued a crushing blow to President Barack Obama’s health care plan, placing a $1 trillion price tag [1] on the Senate Health, Education, Labor and Pensions (HELP) committee’s draft legislation. And what did Americans get for their $1 trillion in new debt? A measly16 million net decrease in the number of people uninsured. [2] Liberals in Washington decried the CBO’s findings, complaining that they had scored an incomplete version of the bill.

So this past Friday, the CBO released a fuller scoring of HELP’s legislation, and indeed, the overall impact on our nation’s debt is lower: a mere $597 billion would be added to federal budget deficits over the 2010-2019 period. [3]

How did HELP lower the bill’s budget busting total? Did they “bend the curve” [4] on health care costs? Did they weed out administrative costs? Eliminate waste? Nope. The Washington Post reports: [2]

Committee staffers reworked the bill — and added a new provision requiring most employers to contribute to the cost of health insurance — to arrive at the lower estimate. Under the new proposal, any business with more than 25 workers would be required to offer coverage or pay a $750 penalty per employee.

In other words, the HELP committee wants to pay for their health care plan in classic “tax-and-spend” liberal fashion: by instituting a crippling new tax on our nation’s businesses. And not just any new tax. A tax directed like a heat-seeking missile at job creation: an employer mandate. But don’t take our word for it. [5] President Obama’s White House National Economic Council Director Larry Summers wrote in 1989 [6]:

Mandated benefits are like public programs financed by benefit taxes… There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers. … [Minimum] wages cannot fall to offset employers’ cost of providing a mandated benefit, so it is likely to create unemployment.

And the HELP committee bill is still incomplete. Even its most current incarnation still would cover just 39% of uninsured Americans. [2] So the Obama administration is also pushing for a further expansion of Medicaid. Add those costs into the mix, and the final price tag shoots back up to $1.3 trillion. [7] Wonder who the administration plans to tax to make up for that final trillion?

Defending his administration’s economic performance on ABC’s This Week, Vice President Joe Biden told George Stephanopolos: “There was a misreading of just how bad an economy we inherited.” [8] The Obama administration can not blame President Bush forever. They can’t run around threatening to enact a $400 billion tax on employment and then blame others for double-digit unemployment rates. There is an alternative to government-run budget-busting health care, some of which the Obama Administration even supports. Example: removing the tax benefit of employer-sponsored health care coverage, which will untie Americans’ health care coverage from their employers and help move the country towards a truly market-based, consumer-driven health care model [9]. Health care coverage can be expanded in a cost-efficient manner, but only by empowering Americans to make health care decisions with their doctors [9].

Quick Hits:

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/07/06/morning-bell-president-obamas-job-killing-health-care-tax/

URLs in this post:

[1] $1 trillion price tag: http://cboblog.cbo.gov/?p=293

[2] A measly16 million net decrease in the number of people uninsured.: http://www.washingtonpost.com/wp-dyn/content/article/2009/07/02/AR2009070203914.html

[3] a mere $597 billion would be added to federal budget deficits over the 2010-2019 period.: http://cboblog.cbo.gov/?p=315

[4] “bend the curve”: http://www.foundry.org/2009/06/17/the-paradox-of-government-run-health-care/

[5] our word for it.: http://www.heritage.org/Research/HealthCare/wm2481.cfm

[6] wrote in 1989: http://ideas.repec.org/a/aea/aecrev/v79y1989i2p177-83.html

[7] the final price tag shoots back up to $1.3 trillion.: http://www.nytimes.com/2009/07/06/opinion/06krugman.html?ref=todayspaper

[8] “There was a misreading of just how bad an economy we inherited.”: http://abcnews.go.com/print?id=8002421

[9] truly market-based, consumer-driven health care model: http://www.heritage.org/Research/HealthCare/wm1515.cfm

[10] nuclear-arms-control treaty talks: http://www.washingtonpost.com/wp-dyn/content/article/2009/07/05/AR2009070501197.html

[11] first formed as a student at Columbia University: http://www.nytimes.com/2009/07/05/world/05nuclear.html?partner=rss&emc=rss

[12] “could become the next full-fledged economic crisis without firm action from Washington.”: http://www.usatoday.com/money/economy/2009-07-04-national-debt_N.htm

[13] too reliant on the U.S. dollar.: http://www.bloomberg.com/apps/news?pid=20601087&sid=aaPXSTHmf02I

[14] there is little evidence they actually work.: http://www.nytimes.com/2009/07/06/us/06retrain.html?ref=todayspaper

[15] pose a “high risk” to California’s economy: http://online.wsj.com/article/SB124658578833590355.html

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