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EDITOR OF REDSTATE

Senate Democrats Discourage Hiring Poor and Disabled Workers

That headline was originally used by Republicans on the Hill, but it is accurate in every way.

The Democrats are working toward some “unintended consequences” that are very, very obvious and the effects are going to be disastrous for our economy.

As the House Republican Conference notes,

Press reports indicate that Finance Committee negotiators may require employers that do not offer coverage to pay for half of the cost of any Medicaid beneficiaries employed by the firm, as well as the full cost of any “low-income” subsidies for individuals with income up to three times the federal poverty level ($66,150 for a family of four).

Groups from the Heritage Foundation to the liberal Center for Budget and Policy Priorities have criticized the Finance Committee proposal, which could in practice lead to hiring discrimination against low-wage workers. For instance, a single mother would prove much less attractive to an employer from a financial perspective than a college-age student from a wealthy family—the former would cost the firm additional money in “fair share” contributions, while the latter would not.

In many cases, the cost of the “fair share” penalty may actually exceed the “pay-or-play” tax on businesses proposed in the House legislation. For instance, under the House bill (H.R. 3200) an employer who cannot afford to offer health coverage would pay $1,664 in tax penalties per year for a full-time worker making $10 per hour. If that employer were subjected to a “fair share” contribution equaling even half of the cost of insurance subsidies in the Exchange, the tax on that business would be significantly higher—as average subsidy amounts would total nearly $5,000 per year under most legislative proposals being considered. A “fair share” penalty of $2,500 would serve as a further disincentive to hire low-wage workers, as employers would be hit with high tax penalties on only a certain segment of the targeted workforce—individuals from poorer backgrounds.

As the liberal Center for Budget and Policy Priorities noted, “the [“fair share”] proposal also could discourage the hiring of low-income people with disabilities who have no choice but to enroll in Medicaid” in order to obtain proper treatment for their disabilities.

All of this is obvious to people who’ve run businesses. But then the Democrats drafting this stuff wouldn’t know anything about that.

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