- The Washington Times - Tuesday, July 26, 2011

Rep. Nancy Pelosi once said we’d have to wait until the Patient Protection and Affordable Care Act passed before we’d know what was in it. The San Francisco Democrat was right. Only now is it becoming apparent just how much the Obamacare law is oppressing small business, the engine of job growth in this country.

The situation is growing worse. The unemployment rate is 9.2 percent - and rising - while consumer confidence sits at its lowest level in seven months. A recent Heritage Foundation analysis found that the recovery began to stall shortly after Obamacare’s enactment. In August 2010, unemployment was supposed to fall to 8 percent by the end of 2011. At the time, that was a reasonable prediction given that the economy had added almost 230,000 jobs in April 2010. Obamacare was signed into law that month, but it took more time for businesses to absorb its impact - and the economic slowdown has been measurable.

Through 2010, the gross domestic product grew at a clip of 2.9 percent. In the first quarter of this year, that figure dropped to 1.9 percent. In the second, it crawled at 1.5 percent. Last year’s vain hopes of a “recovery summer” have given way to the present bummer summer. It’s not going to get any better until the job market improves, but employers aren’t interested in hiring because they just don’t know what’s going to happen when Obamacare’s regulations kick in. A recent U.S. Chamber of Commerce survey determined that almost 40 percent of small businesses named the health care bill among the top five challenges they faced.

The National Federation of Independent Businesses asked companies employing fewer than 50 people what they expected. While none of these businesses plan on dropping health insurance for their employees, one in eight employers have found the plans they used to offer their workers terminated or they have been told the plans will go away in the future. This means either the employer will have to find a plan that is more expensive - making each additional hire more costly - or letting their employees find insurance on the taxpayer-subsidized exchanges Obamacare will establish. In either case, that means costs go up.

Obamacare thwarts potential hiring in three ways, as the Heritage study points out. The law excludes firms with fewer than 50 employees from its mandates, so companies aren’t going to expand and hire if it means exceeding that cap. Companies that employ more than 50 workers already will see their costs rise as they must provide insurance that meets the government-defined minimum requirements or pay a penalty. The biggest problem of all, of course, is the uncertainty Obamacare creates.

Employers still have no clear idea what plans and what coverage will pass muster under the law and what won’t. They don’t know how much it will cost, making long-term planning difficult. The combination of almost-certain labor cost increases and a murky regulatory environment is a recipe for a stagnant economy. We’re already starting to feel the side effects of the Obamacare prescription for a disease we never had.

Nita Ghei is a contributing Opinion writer for The Washington Times.

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