At President Obama’s infamous Summit on February 25, Nancy Pelosi boldly stated that ObamaCare would create “400,000 jobs almost immediately”, 4 million over the life of the bill. If so, it’s off to a rocky start.
Prior to the passage of ObamaCare, many experts and organizations closer to the reality of the work place and the San Francisco Speaker of the House predicted serious negative economic consequences from the legislation. The National Federation of Independent Business (NFIB) estimated 1.6 million in job loss from ObamaCare along with a $200 billion reduction in GDP. The Heritage Foundation wasn’t as optimistic as they predicted 5.2 million jobs would be at risk of going away, and 10.2 million jobs would be at risk of slower wage growth and cuts in benefits.
Below is a partial list of the immediate economic damage report in only the first week in the life of ObamaCare:
Zoll Medical Corp: This bill is a jobs killer,” said Ernie Whiton, chief financial officer of Chelmsford’s Zoll Medical Corp., which employs about 650 people in Massachusetts. Many of those employees work in Zoll’s local manufacturing facility making heart defibrillators. “We could be forced to (move) manufacturing overseas if we can’t pass along these costs to our customers,” said Whiton.
“AT&T Inc. will take a $1 billion non-cash charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers… The telecommunications company also said it is looking into changing the health care benefits it offers because of the new law. Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.
Verizon: In an email titled “President Obama Signs Health Care Legislation” sent to all employees Tuesday night, the telecom giant warned that “we expect that Verizon’s costs will increase in the short term.” While executive vice president for human resources Marc Reed wrote that “it is difficult at this point to gauge the precise impact of this legislation,” and that ObamaCare does reflect some of the company’s policy priorities, the message to workers was clear: Expect changes for the worse to your health benefits as the direct result of this bill, and maybe as soon as this year.
Valero Energy Corp, the largest independent U.S. refiner, said on Friday it expected to take a first-quarter charge of $15 million to $20 million due to the tax impact of a new healthcare law. “There will be further tax costs due to the legislation in the future, but we don’t have calculations on those yet,” Valero spokesman Bill Day said in a emailed statement. Valero shares were down about 1.3 percent at $19.62 in midday trading on Friday, bringing their loss this week to more than 3 percent.
3M Company said today that it expects to record a one-time non-cash charge of $85 to $90 million after tax, or approximately 12 cents per share, in the first quarter of 2010, resulting from the recently enacted Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010 passed by Congress on March 25, 2010. The charge is due to a reduction in the value of the company’s deferred tax asset as a result of a change to the tax treatment of Medicare Part D reimbursements.
AK Steel Holding Corp., the third largest U.S. steelmaker by sales, said it will record a non-cash charge of about $31 million resulting from the health-care overhaul signed into law by President Barack Obama.
Caterpillar Inc. said the health-care overhaul legislation being considered by the U.S. House of Representatives would increase the company’s health-care costs by more than $100 million in the first year alone.
Deere & Company, Iowa’s largest manufacturing employer, said in a statement this morning that the recently-passed health care legislation will cost the company $150 million after tax this year.
Medtronic: Medical device maker Medtronic warned that new taxes on its products could force it to lay off a thousand workers.
Retiree Benefits: As many as 1.5 million to 2 million retirees could lose the drug benefits provided by their former employer because of the tax changes, according to a study by the Moran Company, a health care consulting firm.
Massachusetts: “A Dire Warning From Bay State Medical-Device Companies That A New Sales Tax In The Federal Health-Care Law Could Force Their Plants – And Thousands Of Jobs – Out Of The Country Has Rattled Gov. Deval Patrick, a staunch backer of the law and pal President Obama.”
Colorado: Steamboat Ski Area officials said Tuesday that the federal health care overhaul could cost their business as much as $2 million a year beginning in 2014.
The health care overhaul includes a policy that would assess a fine, per employee, to large businesses that do not provide health care to full-time workers. The policy’s potential impact is ringing alarm bells with the Colorado ski industry, which has a large number of uninsured seasonal employees who work enough days to qualify as full-time workers.
New Hampshire: The state’s seasonal tourism industry is only now beginning to realize that it could get hammered by the new health care reform law.
Muncie, Indiana: Just to be clear, we’re not discussing the pros or cons of the health bill; it’s the Christmas tree ornaments that Congress hung off it to assure its passage. The main one (at least that we know of so far; it takes time to wade through 2,409 pages of legislation) will expand the government’s Pell Grant programs at the expense of private student loan originators such as Sallie Mae. The result: Under a worst-case scenario, Muncie might lose 700 jobs at its Sallie Mae call center on the city’s north side. A Star Press article on Tuesday said the company might have to cut its 8,600 total workforce by 2,500 workers and reduce its national locations from 25 to about six. It’s unknown how Muncie might fare if the company starts closing offices.
Fishers, Indiana: Sallie Mae, a major student loan provider, has its largest office in Fishers, Ind…The effects of this portion of the health care bill have concerned several of the 35,000 people employed in the lending industry. Phillip Walsh, a senior director at Sallie Mae’s office in Fishers, said the company will lose approximately 2,500 of its 8,500 jobs.
State Budget Impacts: Because of the new health care law, Arizona lawmakers must now find a way to maintain insurance coverage for 350,000 children and adults that they slashed just last week to help close a $2.6 billion budget deficit. Louisiana officials say a reduction in federal money to hospitals that treat the uninsured under the bill could be a death knell for their state-run charity hospital system. In California, policymakers estimate they will have to come up with an additional $500 million a year to make necessary increases in payments to Medicaid providers. Across the country, state officials are wading through the minutiae of the health care overhaul to understand just how their governments will be affected. Even with much still to be digested, it is clear the law may be as much of a burden to some state budgets as it is a boon to uninsured consumers.