The further to the left or the right you move, the more your lens on life distorts.

Monday, October 22, 2012


The Affordable Care Act (ACA), also know as Obamacare, is rarely mentioned in the campaign. It benefits neither candidate, so we get silence. But the reality is that if Barack Obama is re-elected, the ACA will become fully enacted law and with it, we'll get a spectrum of unintended side effects that will further cripple an already weak economy, move the United States ever closer to bankruptcy, and hurt many middle income wage earners in ways they don't yet understand.

Economist Robert Samuelson writes:
Obamacare's relentless march to full-fledged introduction in 2014 demonstrates that, for all its good intentions, it will make the health care system more confusing (see above), costly and contentious. It won't control health spending -- the system's main problem -- and will weaken job creation.

Consider the treatment of full-time and part-time workers as an object lesson ...

Employers have a huge incentive to hold workers under the 30-hour weekly threshold [recently established by the IRS under ACA legislation]. 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. About three-quarters of its 185,000 workers are already under, says spokesman Rich Jeffers. The question is "can we go higher and still deliver a great [eating] experience." 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.
The harsh reality is that Darden will not be the only company that tries to do this. In fact, part-time work may become increasingly common as companies try to avoid the extra costs imposed by the ACA.

Samuelson concludes:
The argument about Obamacare is often framed as a moral issue. It's the caring and compassionate against the cruel and heartless. That's the rhetoric; the reality is different. Many of us who oppose Obamacare don't do so because we enjoy seeing people suffer. We believe that, in an ideal world, everyone would have insurance. But we also think that Obamacare has huge drawbacks that outweigh its plausible benefits.

It 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.
And who will be hurt the most by Obamacare? If a trend toward part-time employment is precipitated by the ACA, middle income and low income wage earners, that's who. You know, the very people that Barack Obama claims to care so much about.