Tide will soon turn against Obama
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Some Americans benefit from Obamanomics.
Campaign "bundlers" for President Barack Obama have received, on average, $21,000 in federal loans and grants for every dollar they contributed, said Peter Schweizer, president of the Government Accountability Institute. (A "bundler" gathers donations from many different individuals and presents the candidate with a lump sum.)
The president's supporters who aren't crony capitalists will discover shortly that Obamanomics isn't so good for them.
Community College of Allegheny County will cut back the hours of some instructors to avoid an additional $6 million in costs mandated by the provision in Obamacare that employees who work 30 or more hours a week must have health insurance. Restaurant chains Olive Garden and Red Lobster plan to make some full-time employees part time. The mandate will increase his costs $5 billion to $8 billion a year, so he'll have to lay off some workers, said Papa John's Pizza CEO John Schnattner.
Restaurants and retail stores have lots of employees. Profit margins typically are low. They'll be hit hardest. But a quarter of 1,203 employers surveyed by the consulting firm Mercer say they'll have to take action to offset the additional costs Obamacare will impose. That means, mostly, cutting back workers' hours or laying them off.
It isn't just the coverage mandate that kills jobs:
• 93,000 hospital workers will lose their jobs next year, chiefly because Obamacare slashes reimbursement rates for Medicare and Medicaid, the American Hospital Association estimates.
• Stryker, a medical supply company, plans to cut 1,170 jobs because of a "medical device excise tax" in Obamacare. The tax is expected to cost manufacturers of medical devices $20 billion a year. Stryker won't be the only company in the industry laying off workers.
• A requirement that restaurant chains with 20 or more locations post calorie information for all products on in-store menu boards will cost each owner of a pizza franchise about $5,000. If the requirement is extended to supermarkets (which the vague wording of the law makes possible), implementation costs could exceed $1 billion, the Food Marketing Institute estimates.
• Obamacare will force them to restrict certain categories of patients, in particular those on Medicare or Medicaid, said 60 percent of 13,575 doctors surveyed by the Physicians Foundation. They'll leave or try to leave the practice of medicine because of Obamacare, said 46.3 percent of 1,195 primary-care physicians surveyed by Medicus, publishers of the New England Journal of Medicine.
Obamacare doesn't go fully into effect until 2014 but already has cost more than 18,000 jobs, according to a study by the American Action Forum. Full implementation may cost 800,000 jobs, the Congressional Budget Office estimated.
Obamacare, alas, is only the tip of the regulatory iceberg:
• The Dodd-Frank Financial Reform act will increase bank operating costs by about 12 percent, the chairman of the American Bankers Association told Congress in May. The burden will be greatest on community banks, which had nothing to do with the subprime mortgage crisis. Many will be forced to close. This will be bad for their employees, worse for the small businesses that depend on loans from these banks for operating capital during slack seasons.
• Post-election rules issued by the Environmental Protection Agency will force offline coal-fired utilities that last year supplied the equivalent of all the electric power used in Pennsylvania, according to a study by an industry group. They'll destroy 1.5 million jobs over the next four years.
• Efforts in the works to rewrite employment, labor and workplace law will impose additional costs on businesses.
The president's plans to raise the income tax rates the wealthiest Americans pay to what they were before the Bush tax cuts would cost about 700,000 jobs, because 900,000 small businesses pay tax at those rates, according to a study by Ernst & Young for business groups.
Millions of lost jobs means millions fewer paying taxes, millions more in need of government assistance. Our mammoth budget deficits will grow. Bad things happen when debt gets higher than 77 percent of GDP, according to a study at North Carolina State University. Ours exceeds 100 percent.
A rising tide lifts all boats, said John F. Kennedy. A falling tide strands them. Come January, the tide will be rushing out -- fast.
First Published December 6, 2012 5:09 pm