The conclusion is inescapable that Obamacare is killing job creation and smothering the recovery, and now the Heritage Foundation’s James Sherk has produced a study that clearly shows the correlation.
Before Obamacare passed, the number of new jobs was soaring. Private-sector job creation had improved by an average of nearly 68,000 a month in the 15 months before April 2010. But in the 15 months since then, it has slowed to an average of 6,500 a month, a ten-fold drop.
Sherk points out in his paper that “correlation cannot prove causation.” But he says the evidence “does lend strong weight to the voices of business who say that the law is preventing hiring.”
“We’ve frequently heard strong comments to the effect of ‘my company won’t hire a single additional worker until we know what health insurance costs are going to be,’” the Fed president said.
When Speaker Boehner asks, “Where are the jobs?” the answer is increasingly clear.
And the week brought more news about Obamacare’s problems. The Hill carried an important report about a new “glitch” that has been uncovered in the health law — one that could mean a trillion-dollar underestimate of the law’s true cost.
Under the law, employees can obtain subsidized health insurance if their employer plan is “unaffordable,” meaning that it costs more than 9.5 percent of their income.
Let’s take a worker who has been getting a family health plan through her job. Apparently when congressional scorekeepers analyzed the bill before it passed last year, they decided that if the health insurance plan the employer was offering for an individual was affordable to the worker, the worker wouldn’t be eligible for subsidies in the exchange. But what if the family plan the employer offered cost 20 percent of the worker’s salary? Too bad. The scorekeepers assumed she wouldn’t be eligible for subsidies but would still stay with the employer plan.
The decision clearly was crucial to keeping the price tag of the total bill under the president’s $1 trillion limit, but liberal advocates now are worried about the impact. One admitted, “We’re going to have middle-class families extremely unhappy with health reform in 2014, because they’ll basically be facing financial penalties for not buying coverage when they don’t have access to any affordable options.”
The “glitch” explains the previously puzzling CBO estimate that only 9 to 10 million people who currently get health insurance at work would be switched to government-subsidized insurance in the exchanges. The (fictional) cost of Obamacare could be kept under $1 trillion as long as they didn’t count all the people who would really go into the exchanges.
But if employers drop coverage completely, pay the federal fine, and send their employees to the exchanges, then their employees will be eligible for subsidized coverage. In a study last year, former CBO director Douglas Holtz-Eakin, now president of the American Action Forum, says that as many as 35 million more people will flood into the exchanges, driving up the cost of Obamacare by $1 trillion or more.
So we have a trillion-dollar “glitch” in Obamacare’s cost. The law piles trillions more debt obligations on top of the mountain of debt we already have. It is absolutely imperative that the law be repealed if we are to have even a remote hope of getting government spending under control.