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  • How the Baucus Bill Kills Jobs

    Proponents of the health care reform bills currently under consideration in Congress claim that the cost of insuring the uninsured will be paid for by taxes on the rich, and by employers, who will be required to shoulder “responsibility” for their employee’s health insurance. The reality is that these provisions will act as an extremely regressive tax on the working poor, substantially reducing their take-home pay and in some cases eliminating their jobs altogether.

    All the House and Senate drafts of health care reform include so-called “employer mandates” or “pay or play” provisions. The details vary somewhat, but all require employers to either “play” by providing health insurance for their employees or pay part of the premium or “pay” a special tax for not providing insurance, even if the employee declines it.

    However, these proposals actually result in hefty tax increases on employers that will be paid for primarily by low-income and middle-income workers in the form of lower pay and lost jobs. Businesses do not have unlimited funds to dole out based on their own beneficence or the government’s instructions. When an employer decides whether to hire an employee and how much to pay, the employer has to consider the full cost of employing that person. That full cost includes not only cash wages and the employer’s cost of providing benefits, but also the employer’s share of any employment-related taxes, such as the Social Security and Medicare taxes. When the costs of benefits or payroll taxes increase, the amount of money paid to employees has to be cut to make up the difference. If the employer instead satisfies the mandate by spending more on health insurance, the effect is the same. Either way, the employee’s take-home pay has to be cut.

    Even worse, employers who lack enough revenue to pay minimum wage plus the cost of other benefits and the new taxes would be forced to lay off their lowest-paid employees to comply with the law.

    For example, for the House bill (H.R. 3200), Mark Wilson has calculated 5.2 million jobs at risk, because current wages minus the cost of the mandate would be less than the minimum wage.

    The Baucus plan would have another, even stranger effect on hiring. Because the subsidy amount is based on family income and family size, not the wages that the employer pays, employers would naturally prefer to hire workers from higher-income families with fewer children. For example, hiring a single parent could incur a substantially higher tax penalty than hiring a worker with a working spouse or parent(s), or a worker who is single and childless. Under the Baucus bill, business would be discouraged from hiring those who need the jobs the most.

    Posted in Obamacare [slideshow_deploy]

    10 Responses to How the Baucus Bill Kills Jobs

    1. Pingback: Finance Members Keep Baucus’ Frown Upside-down – Blog Watch

    2. Brad L, Phoenix says:

      It's amazing to see how the Democrat Party has evolved from helping the "working man" to helping the liberal elite. Almost everything the current administration and Congress are doing is hurting the "little guy". Every piece of legislation proposed has costs associated with it and those costs will definitely affect the workers at the bottom of the wage scale. Either my reducing their disposable income or reducing their employment opportunities as businesses adjust their costs to remain competitive and/or stay in business to keep the remaining workers employed.

      It's a sad day for the millions of people who rely on the media to inform them of what impact current legislation will have on their lives. If the current trend of massive spending continues, the only result will be an implosion of our economy since the government will have to give out more money to those "needy" people who will have less money to meet their needs and/or no job at all.

    3. Jeanne Stotler, wood says:

      Congress as usual is lookking at only part of the picture. The Insurance companies will be laying off workers also, if this was to be averted Congress would start with the limiting of Torts, the ABA is a major lobbying factor and they do not want to lose the votes of Atty.'s so they condone these frivilous lawsuits and awards. I am a nurse and I know mistakes are made, some are human, as nurses are made to work 12 hr. shifts, being tired accounts for some, others are to improper labeling fom hosp. pharmacies, and Drs. make mistakes also, many could be avoided if time was taken to review a chart prior to surgeries, I could go on, some are also patients fault as they do not tell their complete history to admitting RN. Let's lower premiums by starting at this point not by adding more cost to the public. And Congress also should be made to use the same plans it imposes on the rest of us.

    4. Lwesson, Tejas says:

      While the "lobsters" (We the People) now discover that we are not really in a hot tub waiting for The Swedish Bikini Team to drop in with cold ones but rather a boiling pot the (health care reform) simply piles on the heat.

      Perhaps, just perhaps this so called reform will wake up voters to the police state that is further ramping up to turn, WE The People into mere subjects of the STATE. Thankfully we can thank Baucus/Obama for the pop on the forehead. Lets vote these "cooks" out of our kitchen or impeach those who should be held accountable.

      One more thank you for waking up, We The People need to re-address the silly Interstate Commerce Clause as it nullifies the Constitution in the bizarre Alice in Wonderland way that it is interpreted allowing the Government to do anything it wishes like, mandatory requirements to force one to have health insurance at risk of fines and criminal imprisonment. This irresponsible madness, this tyrannical nonsense is what revolutions are made of and the Tree of Liberty is looking very much in need of assistance. Regards!—–L

    5. Marshall,Michigan says:

      Any Proposal that threatens Penalties should be

      over all Citizens! Politicians Included!No Except-ions!

    6. Rob, Seattle says:

      I am a nurse and I can tell you that not all nurses support this reform. I have only heard the nurse's unions support but not the nurses in the front lines. We are the ones who care for those who need health care. I have never seen anyone turned away from receiving health care who needed care. This bill will make some nurses leave the profession! We will not stand by and see the elderly refused care or care being delayed due to bills like this one which Baucus is trying to push through.

    7. Lynn B. DeSpain says:

      Ah Bachus, the God of Wine. Drink enough and you will believe anything! And you will not care. Until the hangover.

    8. Leon, Durango, CO says:

      Uh! Don't look now, but health care is too damned expensive. That's what is wrong with it. Everything else is just fine, but now it is everyone helping everyone over a cliff. Cut the crapola and our health care will be affordable. Did the whole world catch hypochondria? The most dangerous thing you can do statistically is to go to doctors and let them do anything they want with you.

    9. Jerry from Chicago says:

      "Tort Reform" means different things to different people. The purpose of Punitive Damagage lawsuit awards is to punish the wrong doer as a means to preventing such future misbehavior (i.e., medical malpractice).

      What would help to lower health plan costs would be to redirect punitive damage awards from plaintiff and attorney to Medicaid funding. Plaintiffs could still be allowed to sue for compensatory damages, medical bills not covered by insurance, loss of earnings, pain and suffering and even attorney's fees, but they and their attorneys would not be able to cash in on windfall awards. This would lower medical malpractice insurance premiums for hospitals and doctors and eliminate the need for physicians to practice "defensive medicine". This in turn would reduce health insurance costs.

      We have too many people calling for "quality, affordable health care". The term is an oxymoron, kind of like "jumbo" shrimp. Have you seen anyone even try to define their terms?

      What do they mean by "quality"? Everything has some degree of "quality" from rotten and worthless to the best of the best. "Quality", like beauty, lies in the eyes of the beholder. SOME people complain about having lousy, or rotten insurance, because their insurance plan didn't pay all of their bills.

      And what does "affordable" mean? What is affordable to you, may be outrageously expensive to me, or vice-versa. Everyone has their own personal definition ofwhat "affordable" means to them. When most people say they want "affordable" health insurance, they mean cheap health insurance. I want a 2009 Medcedes SL 600, but I want it to be "affordable". There is no reason why a car like that should cost $75,000. It must be the faul of the damn greedy auto maker. There oughta be a law where we can all get an SL600 for the same price as a Chevy or Ford.

    10. John Roane Sarasota says:

      The good news is that with so few jobs left there will be no more to lose.

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