The Best Jobs Program? Full Repeal of ObamaCare
President Barack Obama is currently barnstorming around the country to drum up support for his $447-billion plan to put unemployed Americans back to work.
But Congress need not hand him a check for half a trillion dollars in order to jump start the economy. If lawmakers are really serious about creating jobs, they should simply repeal ObamaCare.
Cheerleaders for the presidents reform package promised before its passage that the law would unleash a flurry of economic activity. Indeed, in February 2010, then-House Speaker Nancy Pelosi (D-Calif.) stated that the Patient Protection and Affordable Care Act would create some four million jobs.
The current state of the American economy belies that rosy prediction. Unemployment is stuck above 9%, and 14 million Americans remain out of work.
In fact, the evidence suggests that ObamaCare has only made the American labor market worse.
Since the laws enactment, job growth has fallen to rates one-tenth of what it was beforehand. From January 2009, the lowest point of the recession, through April 2010, employment numbers were improving by an average of 67,600 new jobs per month.
After April 2010 mere weeks after President Obama signed his reform measure into law job creation came to a screeching halt, tumbling to a rate of just 6,500 new jobs per month.
Thats no coincidence. The law deters hiring by raising the costs of employment and by fomenting uncertainty for American businesses.
Health costs have long been rising for employers. A new survey by the National Business Group on Health found that large firms can expect costs in 2012 to be 7.2% higher than they were this year. And thats after a 7.4% hike in 2010.
In 2012, companies will face health care costs approaching $12,000 per employee, according to the National Business Group on Health.
ObamaCare only adds to that burden, with its barrage of cost-inflating mandates, taxes, and penalties.
Beginning in 2014, companies with more than 50 employees will face fines of $2,000 per employee if they do not offer insurance.
Even firms that insure their employees wont be safe from federal penalties. They can be subject to fines of $3,000 per worker if the benefits they provide are deemed insufficient by the government. And the plans the government will require, of course, will tend to be far more generous and more expensive than the ones that many businesses currently make available.
The hamburger chain White Castle, for example, has reported that the costs engendered by these mandates will eat up 55% of its net income after 2014 making it difficult to retain current employees, let alone hire any new ones.
Facing such expenses, its no wonder that nearly three-quarters of employers plan to increase the share of premiums that their employees pay to cover their families, according to a survey conducted in July by consultancy Towers Watson. Two-thirds of them will do so for employees with single-only coverage.
Of course, the employed folks who will have to pay for a bigger chunk of their insurance thanks to ObamaCare will be lucky to have jobs at all. A study by the National Federation of Independent Business found that the laws employer mandate could cause the elimination of 1.6 million jobs, with 66% of those coming from small businesses.
Instead of serving as an engine for American growth, 70% of small firms have no plans to hire in the next year. They claim that they cant take on any more employees until they know just how hard a punch ObamaCare will pack.
If President Obama wants to create jobs, he needs to take a long look at the burden his health care law is already placing on American businesses balance sheets. As its many components take effect over the next few years, that burden is only going to grow.
The president may never admit it, but the best jobs program out there is the repeal of ObamaCare.