Saturday, July 18, 2009

'Free' health care

In a CNBC Financial report, I heard an investment guy who summarized it all brilliantly.

He was discussing the fact that emerging market funds will be where the money is made. He said that the Chinese are using their currency to buy up and hoard commodities (oil, metals, etc.) at the current bargain prices in preparation for the turn around that will surely come at some point in time.

He said this: “The U.S. will lag the recovery because we have so much bad spending to digest. The rest of the world is financing growth opportunities, while we’re in the USA financing entitlement programs. Where would you put your money?” That just about says it all.

Here are some of the key points of the bills approved in the House this week: You will pay a 5 percent excise tax if you earn more than $280,000 in order to fund health care. Businesses will be forced to pay a “fine” of $375 for every part-time worker if they don’t offer health care. That one is sure to create jobs for our younger workers and the marginally employed.

Yep, it’s a real incentive to hire people who might not even generate that much in profits during a year. In one scenario: You have employees who only work five-to-10 hours per week because this is a second income for “fun” money in their homes. These are typically people who already have health care through their spouses’ employers, but under Obama-Care you'd be forced to pay a fine if you don’t offer them a program. You'd likely lay them off first if you can’ t make a reasonable profit. That model will be repeated over and over in our country.

Oh, it gets more than just interesting. This proposal could cost you even more.

It could even be worse; one of the Democrat proposals is an 8 percent tax on salary if your annual payroll is more than $400,000 for your company. How much good do you think that will do for small businesses? It doesn’t take much to hit an annual payroll of $400,000. If you take an 8 percent hit of $32,000, you might not have any profit left for many small businesses.

This is mind-boggling. Tell me how you feel about what is being proposed by posting your thoughts.

— By David Walker, Vice President of Association Services, National Glass Association

The opinions expressed here are those of the individual author and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.


Anonymous said...

As citizens we are responsible for our government. No lobby or special interest group can force us to vote for a politician or party. These measures can only be enacted because of our votes. We are responsible for the outcome of those votes.

We have the ability to change the course by electing new leaders.

Right now we have the government we wanted.

Anonymous said...

To be clear, we now have the government that approximately 47% of voters thought they wanted.

Anonymous said...

why is this right-wing rhetoric on a glass industry blog? there are so many avenues for people to moan and groan about everything and anything. this doesn't seem an appropriate forum for this. stick to fox (faux) news forums.

constance said...

I think you missed the part where we already pay for the uninsured to receive health care. As a small business we struggle to find affordable health coverage for our employees because it's the right thing to do. A company that looks at the bottom line and not the quality of life of their employees is not worth supporting anyway. You're focused on profit for the ownership. I personally believe that the more healthy my employees are the more productive they can be. This is a needed change and it's inevitable. Down the line I think we'll all see that this was just a transfer of costs and not new costs for small business

Anonymous said...

Well said, Constance.

The original poster looks and sounds like Colbert, except for the tongue in cheek funny part.

I would hope that this great country doesn't try to pin the current economic demise on the freedom and compassion that this country is founded on. The country's financial outlook was grim long before we started talking about offering healthcare to the poor, tired, huddled masses longing to be free.

Steve said...

I need some clarity here. The column says you have to "offer" them a health care plan. To me that doesn't mean they have to take it and it doesn't mean it has to cost the business any money. In the column's scenario of the "fun money" worker, how many of them would take the plan "offered"? I don't see this incurring any additional cost on the business unless "offered" means bought and paid for whether it's wanted or not. In every company I've ever worked at, anyone not using the "offered" health insurance plan didn't cost the company any money for health insurance.

Anonymous said...

To be more clear. It doesn't matter if it was 47%. Each of our elected leaders received the votes needed to win office.

The impact on the economy from offering healthcare to the huddled masses is not the point.

Regardless of the cost... stop complaining about it.

We chose to adopt a new course for this country.

If you support it... great. You can vote to continue it.

If you didn't support it... well that's great too. You can vote for someone else to set a new course.

BTW - Encouraging people to take responsibility and vote for change is not right wing rhetoric. Isn't this how we removed the republicans from power?

- Original Anonymous

Anonymous said...

If the government places 8% surtax on the wages I pay out, I will be forces to lay off several of them. In this antbusiness environment we are not even in the black, so why should I work for the government. It penalizes hard work and rewards failure.

Anonymous said...

1) health care reqd or pay a 8% surtax. Also private plans to be ILLEGAL in the future. The White House staff wil not even acknowledge that this provision exists.

2) cap and trade - want to start a new business? The free permits are gone, now the barrier to entry is HIGH. Decreased innovation, competition, growth and a diminishment of the ENTREPRENEURIAL spirit that made the USA THEE destination for innovative hard workers.

Tim said...

Anytime you have a government that imposes its will upon private business especially small business, businesses suffer. It doesn't matter whether the forced mandate is over healthcare, cap and trade, or some kind of local tax increase, the outcome is the is yet another burden placed on the shoulders of business. Small businesses in particular are the engines that drive our economy.

In an economic storm such as this, the last thing that should be considered are business-killing mandates that end up taking away jobs, limiting business recovery.

Ultimately, we lose our ability to compete in the global marketplace as other nations' businesses with limited governmental intrusions are able to compete more effectively. If we hope to recover or even survive this economic meltdown, we need to do the same.

Anonymous said...

The biggest problem this country has is the idea of "Free" anything. Lets cut to the chase the reality is that everything in business is paid for by the customer.

Free health care just means that we will all be paying higher costs for everything we purchase. which in the long run costs more than private insurance anyhow

Lets get real there is no such thing as something for nothing.

were all being sold snake oil

Anonymous said...

The topic matters to the industry as most of the industry is made up of small businesses. A few years back, I was touring a well-known wood window manufacturing plant and asked the plant manager what his biggest problem my surprise, he said, "Health care costs".
Regardless of political persuasion, spending too much money on anything is illogical and unwise.

David (aka Colbert) said...

Thanks for the "fair and balanced" debate. Let's keep it going. A lot is at stake.

Anonymous said...

The real issue is the probable loss of jobs that will result as we attempt to compete on the world market. Higher prices here in the US make all of our products and services less competitive. It is inevitable that any surcharge or tax for “Free” healthcare will make US businesses less competitive. The GAO has stated that the estimated cost is over $1 Trillion for the first 10 years of the current models being proposed in the House. What will it cost us in the following years? Can you name a government run project or entity that came in under budget or lowered costs year to year? Just think of this as the US Postal Service or Boston’s Big Dig project on raging steroids. There’s no way that a federally run system will produce lower costs or better service than the results produced by private enterprise. We need only look at the US Postal Service to see proof of what the Government can do when they put their minds to it.

Anonymous said...

I have to agree with all of the points made by the author, David Walker. The 8% payroll tax would put me out of business or atleast would force me to layoff workers. Margins are tight and we have high fixed costs. I don't think that the consumer will be able to stand higher prices if all of these increases are just "passed on" as one of the others mentioned earlier. How can higher taxes produce more business? That formula has never worked before so what's differnt now? Dave's comments are right on the money.

Anonymous said...

Allow me to propose a riddle. A man starts a business by mortgaging his home and working day and night. He works for 6 months without taking any pay but his employees are always paid on time. Finally that business makes a profit. Here's the riddle part..... Why is that same man obligated to pay for anyone's health care but his own family's? If the business goes under no one shares the risk but everyone wants the rewards. Doesn't seem fair.

employer of 90 (families) said...

Wow, many of these comments astound me, but do make it clear how we ended up electing the current executive and lawmakers. Bottom line is this: socialism (and that's what we are talking about) has failed time and again ... but 47% + of America has fallen for it. I pray that we wake up before we pass the point of no return.

David, at least you got people talking, and you have gone on record. It will be clear in hindsight that you are, unfortunately, correct.

Anonymous said...

Here's Dave's best point. Our competition is in China and the emerging markets. They are investing in infrastructure and hoarding oil and commodities. Meanwhile, our politicians are arguing about how to take on another $1 Trillion in social programs that produce not one dollar in marketable services or goods. How can ever compete when we are "investing" in social welfare and healthcare spending while these nations are preparing to do everything that matters in the market place better, faster, and cheaper? Forget the rhetoric and look at David's main point. He's right.

Anonymous said...

There is no doubt that a very large payroll tax (8% to start and no doubt going higher as we move along) will kill jobs. My company (and I do mean MINE) offers fully paid insurance for employees currently, but this is likely to change as insurance costs rise at double digit annual rates. Since wage growth is much lower, the tax will undoubtedly soon rise rapidly.

The focus of the debate has gone from "reducing health care costs" to "providing universal health insurance" as the Dems continue to craft their plan. There is absolutely no doubt that health care costs will rise uncontrollably under the plans being put forward, and therefore the employment tax inevitably must rise also.

I believe that a lot of money is completely wasted in health care. My mom recently died of cancer. It was known to be incurable, but they ran test after test after test for 2 and a half years, none of which prolonged her life one day or improved her quality of life.

Max Perilstein said...

Congrats David on a great ballsy post. Whether you agree with David or not, at least he took a position and signed his name to it.
This is a serious issue, as is Cap & Trade- and the effect it will have on the glass industry.
One Anon commented that there's other avenues for this discussion, and yes there surely is- however this issue does affect the industry- some will see it as good and others bad- so a debate is not a bad thing.
All in all passion is good- just wish we could have that same passion when it comes to major issues in our industry like selling direct, the Chinese/Colombians, NFRC, ASHRAE, new transportation edicts and so on.
Good stuff and again congrats on a very successful post!

David (aka Colbert) said...

For those who suggest this battle is partisan, this headline states the reality of the situation boldly: CBS Evening News (7/21, lead story, 2:15, Couric) reported, "House Democrats called off a critical work session on health care today to deal with mounting opposition to their plan, not from Republicans, but from members of their own party."

There are two Senate Commitees and three House Commitees reviewing a health care reform bill that is growing beyond 3000 pages in length.

It does not suprise me then that when asked yesterday by a liberal blogger about a provision in the bill(s), President Obama stated he was not familiar with the provision. The provision -- langauge which leaves open the end to private health insurance.

At least the President is the one honest person in the room -- he does not know all the implications of what might fall our way.

Anonymous said...

This is the first Glassblog that actually made me want to post. Our industry needs to discuss these issues (no matter your political party).

Anonymous said...

I noticed that in the survey over 78% of the respondents believe this is a bad deal either way and/or it will hurt business. What are we doing to ensure that our "elected officials" understand these concerns?