House Democrats’ Health “Reform” Will Harm the American Economy
Bill Would Cost Hundreds of Thousands of Jobs, Tens of Billions in Economic Growth
Even as unemployment approaches 10 percent nationwide, a recent Heritage Foundation analysis found that House Democrats’ government takeover of health care (H.R. 3200) would demolish or destroy hundreds of thousands more jobs and lead to further economic stagnation:
- The Center for Data Analysis model of the economic effects of the $534 billion surtax imposed in H.R. 3200 resulted in hundreds of thousands of job losses—nearly half a million, to be precise. The model found that in 2019, employment levels would be lower by 452,000 jobs than under current law.
- By discouraging high-income workers—the majority of whom are small businesses—from making additional investments that add value to their enterprises, the surtax would result in lower economic growth—an average of $46.7 billion per year in lost GDP over the next decade, with those numbers growing until reaching $68.2 billion in 2019.
- The lower growth and fewer jobs created by the surtax would also affect the pockets of millions of all Americans. Specifically, the analysis found that disposable incomes for a family of four would be reduced by $995 in 2019 when compared to current projections if the surtax were to become law. Some may also note that the lower levels of disposable income for all families as a result of the surtax on certain high-income individuals could be viewed as violating the President’s “firm pledge” that no one with an income under $250,000 would face tax increases.
- The Heritage analysis did not include the hundreds of billions in new taxes imposed beyond the surtax—including more than $200 billion in higher taxes associated with the employer mandate and $29 billion in taxes on individuals who cannot afford to purchase government-mandated health insurance.
- Other independent studies have confirmed the impact of the bill’s proposed new tax on jobs—i.e., employer mandates. For instance, the Congressional Budget Office noted 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.” Harvard Professor Kate Baicker has also published an analysis demonstrating that at least 5.5 million low-wage workers would be “at substantial risk of unemployment” due to new mandates on employers—and that minority workers were twice as likely to lose their jobs as their white counterparts as a result.
At a time when unemployment stands at a 26-year high—and with job losses still rising—many may use these studies as further confirmation that by imposing more than $800 billion in tax increases, H.R. 3200 would cause additional damage to the American economy—above and beyond those created by the government takeover of health care which the legislation would create.