Monday, March 1, 2010

Nancy Pelosi on Health “Reform” Saving Jobs

Since Speaker Pelosi has in recent days taken to use the talking point that the Democrat health “reform” bills would create up to 4 million jobs, I wanted to re-circulate our analysis of this study from earlier this year, along with a few additional points.  First, it’s worth noting that this analysis was completed by Harvard’s David Cutler, who served as one of Senator Obama’s chief advisors during the campaign (thus far from an impartial source).  Cutler was also the source of the Obama campaign promise that health reform would save families $2,500 per year on premiums – a pledge that came under fire during the campaign as being unrealistic, and a promise which President Obama has failed to repeat in the past year (not least because his bill fails to deliver on that goal).  A New York Times piece from July 2008 dissects that promise, and includes this interesting Cutler quote: “‘What we’re trying to do,’ said one of the advisers, David M. Cutler, in explaining the gap between Mr. Obama’s words and his intent, “is find a way to talk to people in a way they understand.’”

All this of course raises a simple question: If Cutler’s analysis on health reform saving a family $2,500 in premiums cannot be believed – this premise having long since been discarded by the Obama team – why should this 4 million jobs statistic hold up to the same credibility standard?

Second, there are numerous other studies from sources far more independent than a former Obama campaign advisor indicating that the tax increases in the health care bills will DEMOLISH jobs, not create them.  For instance, the Congressional Budget Office issued a report noting that, “a pay-or-play provision could reduce the hiring of low-wage workers, whose wages could not fall by the full cost of…a substantial pay-or-play fee if they were close to the minimum wage,” also found that the cost of such new mandates and taxes would be passed on to workers in the form of lower wages.  According to an analysis by Harvard Professor Kate Baicker, such a tax would place millions “at substantial risk of unemployment.”   And the Heritage Foundation recently released a report indicating the White House’s new proposal to expand the Medicare tax to dividend income would by itself demolish 115,000 jobs per year, or over 1 million this decade.  In other words, the health care bills’ taxes on jobs, in addition to lowering employment during a record recession, would also drain the paychecks of those low-income workers most in need of additional purchasing power.