"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

Obama Says He “Absolutely” Doesn’t Regret Focusing On Obamacare Over Economy; Samuelson: “[Obamacare] Creates Powerful Pressures Against” Hiring

October 29th, 2012 by mopns · No Comments

Discussing President Obama’s interview with the Des Moines Register, The Wall Street Journal editors write, “[T]he larger reason to be skeptical [about Obama’s promises for the future] concerns Mr. Obama’s answer to another Register question: Whether he regrets pursuing ObamaCare and other liberal social priorities in his first two years rather than focusing on the economy. ‘Absolutely not,’ Mr. Obama told the Iowa journalists. ‘Remember the context. First of all, Mitch McConnell has imposed an ironclad filibuster from the first day I was in office. And that’s not speculation.’ Whoaaaa there, big fella. Mr. McConnell was then and still is the Senate Minority Leader, and in 2009 he had all of 40 votes. Mr. Obama could have pursued any agenda he wanted, and the Des Moines editors wanted to know why he didn’t focus on the economy first. Yet Mr. Obama’s instinctive reaction is to blame Republican obstructionism that never happened. . . . By spring 2009, when Minnesota’s Al Franken was seated, the White House had 60 votes and a GOP-only filibuster wasn’t even possible. ‘We have the votes. F—‘em,’ declared then-Chief of Staff Rahm Emanuel, according to the first-100-days chapters of Bob Woodward’s new book.”

Further, the WSJ editors explain, “The President is also missing the larger import of the Register’s question. As Mr. Obama likes to remind voters now, in 2009 the economy had suffered a financial heart attack and needed to be nurtured back to health. That required careful management and attention to reviving consumer and business confidence. Yet rather than work with both parties to fashion a growth agenda, he went all-in for a Keynesian spending blowout and subcontracted the details to House Democrats. And rather than wait to see how strongly—and even whether—the economy then recovered, he dove headlong into fighting to pass 40 years of pent-up liberal social policy.”

The most effort there, of course, went to President Obama’s massive, unpopular health care law. And as Republicans warned before the law was passed by the Democrat-run Congress, Obamacare is only harming the economy. The Washington Post’s Robert Samuelson explains some of this in an important column from earlier this week: “Just recently, the Internal Revenue Service issued an 18-page, single-spaced notice explaining how to distinguish between full-time and part-time workers under the Affordable Care Act (“Obamacare”). The difference matters, because the act requires employers with 50 or more full-time workers to provide health insurance for those workers. At the same time, no company has to buy insurance for part-time employees, defined as those working less than 30 hours a week. . . . In September, 34 million workers, about a quarter of total workers, were part-time, reports the Bureau of Labor Statistics. But the bureau defines part time as less than 35 hours a week; Obamacare’s 30 hours a week was presumably adopted to expand insurance coverage. There are now 10 million workers averaging between 30 and 34 hours a week. To the bureau, they are part-time; under Obamacare, they’re full-time.”

Why is this important? Samuelson points out, “Employers have a huge incentive to hold workers under the 30-hour weekly threshold. The requirement to provide insurance above that acts as a steep employment tax. Companies will try to minimize the tax. The most vulnerable workers are the poorest and least skilled who can be most easily replaced and for whom insurance costs loom largest. Indeed, the adjustment has already started. As first reported in the Orlando Sentinel, Darden Restaurants — owners of about 2,000 outlets, including the Red Lobster and Olive Garden chains — is studying ways to shift more employees under the 30-hour ceiling. . . . The financial stakes are sizable. Suppose Darden moves 1,000 servers under 30 hours and avoids paying $5,000 insurance for each. The annual savings: $5 million.”

He concludes, “[Obamacare] creates powerful pressures against companies hiring full-time workers — precisely the wrong approach after the worst economic slump since the Depression. There will be more bewildering regulations, more regulatory uncertainties, more unintended side effects and more disappointments. A costly and opaque system will become more so.”

Thus, President Obama’s decision to set the struggling economy aside and focus instead on passing his 2,700 page health care law not only took our eye off the ball at a critical time, it has also made things worse economically by creating uncertainty, piling on regulations, mandates, and taxes, and discouraging employers from hiring more workers.

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