CaliforniaCare: The Employer Mandate on Steroids
California AB 880: “This bill would make it unlawful for a large employer to, among other things…reduce an employee’s hours or work…if the purpose is to avoid the imposition of the penalty. A violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time.”
ObamaCare’s employer mandate is off to a disastrous start even before it kicks in. The CBO has already scored the measure to cost employers $150 billion in draconian excise taxes over the next eleven years, and there’s no telling how much the compliance costs will total. Most employers are in no position to shoulder this burden. How have they responded? For many, the only hope has been to reduce employees’ hours because the employer mandate and its associated penalty taxes apply only to employees who average at least 30 hours per week. Regal Entertainment Group recently announced that it would join the long line of mega-sized employers to be reluctantly forced down this road.
The problem is at near epidemic proportions. Many are rightly speculating whether we are soon to become a part-time nation because employers will no longer be able to afford large full-time workforces. Some liberals still refuse to accept that ObamaCare’s flaws and market distortions will be as disruptive as feared. The Huffington Post recently attempted to dispute this unfortunate part-time workforce inevitability in a piece that cited a survey by (strangely) the Federal Reserve Bank of Minneapolis. Dustin Siggins of Tea Party Patriots effectively refuted those findings in a piece for NRO, citing numerous flaws in the survey.
Lawmakers are starting to take notice. House Ways and Means Chairman Dave Camp (R-MI) has a section of his official website dedicated to ObamaCare’s many failings called The Prescription Pad. His latest entry titled “ObamaCare Resulting in Fewer Hours, Less Work For Americans” details the many stories expressing concern that full-time jobs are endangered. Chairman Camp has also been at the forefront of challenging the unconstitutional IRS regulations that attempt to enforce the employer mandate in states that refuse to establish an ObamaCare exchange. Michael Cannon at the Cato Institute again highlighted both this issue and Oklahoma Attorney General Scott Pruitt’s lawsuit challenging the IRS rulemaking in an excellent list of pointed questions for HHS Secretary Sebelius. These efforts and, of course, all attempts for full repeal are what most would consider to be a rational response to the bleak full-time forecast.
And then there’s California, a state that seems to take pride in demonstrating its economic ignorance and disdain for the private sector. As the first state to establish an ObamaCare exchange, California is far too invested both monetarily and ideologically in government-driven healthcare to back down now. So its response to these concerns is decidedly irrational: California is doubling down on ObamaCare.
It’s simple, actually. The California legislature is currently advancing a bill that would make it unlawful for employers to reduce workers’ hours for the purpose of avoiding ObamaCare’s employer mandate. Democrats in California hold a two-thirds supermajority of the legislature, which allows them to raise taxes, place measures on the ballot, and override gubernatorial vetoes without Republican votes. Yikes. Plus, the labor leaders that appear to be primary advocates for the bill are already arguing that the supermajority hasn’t gone far enough to push for universal coverage.
Where would this leave California employers? How are California employers, already operating under an oppressive regulatory environment, supposed to stay in business when faced with these proposed additional burdens (which I have dubbed “CaliforniaCare”) on top of ObamaCare? The California Chamber of Commerce has already identified the bill as a “job killer,” stating that it will “significantly hamper an employer’s ability to manage its workforce.” That’s an understatement.
Earlier this year, Texas Governor Rick Perry travelled to California to promote the far superior regulatory and tax structure of his state to weary California employers and entrepreneurs. The trip was in response to California’s massive tax increases approved by the state’s voters in the November elections. How does a new 13.3% top state income tax rate sound when paired with the new 39.6% top federal bracket? There’s even an official Texas website to highlight the state’s competitive advantages and entice California businesses to make the move. If passed, this new CaliforniaCare law may be the final straw for many such employers. (For a sample of how Californians have responded to Governor Perry, see this political cartoon published in the Sacramento Bee implying that the tax and regulatory structure in Texas is to blame for the West, Texas fertilizer plant explosion. Disgusting, indeed.)
The scariest part may be that California is not alone. Connecticut has introduced a similar bill. Even worse, U.S. House, Rep. Jan Schakowsky (D-IL) has introduced the “Part-Time Worker Bill of Rights Act of 2013,” which would amend ObamaCare to enforce the employer mandate nationally on all employees, not just those who are full-time. Add that to the list of legislation to fear if the Democrats manage to regain control of the House in 2014.
It seems there are still many who share the mistaken belief the ObamaCare’s failures are attributable to there not being enough government involvement. Attempts like CaliforniaCare to expand the law exemplify this fundamental misconception. For the rest of us, it’s clear that government-driven healthcare cannot work, and that adding layers of mandates to the mountain created by ObamaCare will only make matters worse. To borrow from the famous Apocalypse Now line, the bullshit has piled up so fast in ObamaCare, you need wings to stay above it. In California, you just might need to go into orbit.