How will ObamaCare impact American business? Democrats insist that the bill will help stimulate the economy and create jobs. Caterpillar, the manufacturer of heavy construction equipment, tells a different story:
Caterpillar Inc. said the health-care overhaul legislation being considered by the U.S. House would increase the company’s health-care costs by more than $100 million in the first year alone.
In a letter Thursday to House Speaker Nancy Pelosi (D-Calif.) and House Republican Leader John Boehner of Ohio, Caterpillar urged lawmakers to vote against the plan “because of the substantial cost burdens it would place on our shareholders, employees and retirees.”
Caterpillar, the world’s largest construction machinery manufacturer by sales, said it’s particularly opposed to provisions in the bill that would expand Medicare taxes and mandate insurance coverage. The legislation would require nearly all companies to provide health insurance for their employees or face large fines.
The Peoria-based company said these provisions would increase its insurance costs by at least 20 percent, or more than $100 million, just in the first year of the health-care overhaul program.
Last year, Barack Obama pitched his stimulus plan at Caterpillar’s main facility in East Peoria, Illinois, promising that the Porkulus bill would prompt Caterpillar to rehire workers recently laid off from the plant. The CEO, Jim Owens, said that wouldn’t happen for a long time — and then had to lay off more workers the next month. It looks like Owens won’t get a Christmas card from the White House this year, either.
Even if one accepted the reforms in ObamaCare as necessary, the timing is flat-out awful. The economy has barely begun growing again, but not at a rate that creates jobs. One reason employers haven’t invested in expansion is because of the pricing signals sent from ObamaCare. If the penalties and taxes for employment cost Caterpillar $100 million in the first year, that’s money that won’t go to hiring more people. In fact, it will provide a big incentive to pare down their employment rolls even further to avoid paying the taxes and penalties.
And where will those jobs go? As employment becomes more expensive in the US, companies will transfer more manufacturing overseas. That’s not exactly brain surgery.