Today brings us the latest report from Senators Coburn and Barrasso, the two Republican physicians who've been doggedly following up on all the things we were promised about Obamacare, particularly the ones that have already turned out to be flat-out lies ("The gall!" shrieks a Democrat Hill staffer).
Much of the report is based on combining the findings of the nonpartisan Congressional Budget Office (CBO) and news reports following up with people who've already felt the law’s impact. Central to this issue: the impact of the legislation on America's unemployment picture. Remember when Nancy Pelosi promised the health care bill would create four million jobs -- "400,000 of them almost immediately?" Let's go to the videotape.
In response, Coburn and Barrasso find:
The CBO "estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount—roughly half a percent—primarily by reducing the amount of labor that workers choose to supply", which is more than 788,470 employees.
As Avik Roy points out here, to put that in perspective, that number is 50% more than all the people who work for GM, Ford, and Chrysler combined.
Ironically, a significant portion of this job loss will likely come from the medical industry itself, particularly the innovative smaller companies now facing vast new taxes.
Companies that innovate, create, and develop life-saving, life-improving devices will likely lose jobs too. Manufacturers of medical devices are reeling from a provision of the law that will levy a $20 billion excise tax on their industry. The Boston Globe reported that the 2.3 percent excise tax on companies that supply medical devices like heart defibrillators and surgical tools to hospitals, health centers and ambulance services, "will force industry leaders to lay off workers and curb the research and development of new medical tools." One CEO said the new tax threatens his business‘ sustainability because it has relegated his company‘s profitability to merely a break-even position.
The basic problem with the tax is one of math. "Many small to midsize medical device companies will owe more to the federal government in taxes than they make in profits," according to Mark Leahy, head of the Medical Device Manufacturers Association. "We're talking about a 2.3 percent tax on total sales, irrespective of whether a company is making a profit."
Under Obamacare, the cost of each employee goes up. So do you pay this cost? No -- you hire fewer employees and ask them to work longer hours. This is not hard. It is, as Coburn and Barrasso write, a problem of math.
Sometimes, I wonder if President Obama should just adopt the Costanza approach in his second term. It's quickly becoming the only path I see toward getting the economy back on the right track.