Old Blogs
April 1, 2010 9:59 AM
Day 9: Thousands of layoffs, billions in costs for states, and a ballooning deficit
Posted by Staff
Health plan may hobble economy recovery
While President Obama's health insurance mandate on businesses is being slowly phased in to prevent any immediate damage to the economic recovery, it nevertheless poses an obstacle to his overarching goal of creating jobs and could end up adding to spiraling medical costs rather than controlling them.

Economists not connected with either political party expect the new law to intensify the boom in health care spending - it already is the only major business sector that managed to grow during the recession - while adding to the reluctance of millions of businesses outside of health care to take on new workers because in the future they must provide costly and comprehensive medical benefits that previously were optional.

Mr. Obama signed the measure into law at a time when optimism was growing that the massive 8.4 million in job losses spawned by the recession might be coming to an end, so its effect on employment will be closely watched.

"Businesses will probably remain cautious when it comes to hiring," said Harm Bandholz, an economist at Unicredit Markets. "They now face the certainty that their labor costs will increase in coming years."

Sallie Mae blames 2,500 layoffs on Obama's student loan overhaul
Powerhouse student loan provider Sallie Mae says layoffs are imminent as a result of President Obama's new student loan overhaul.

"This legislation will force Sallie Mae to reduce our 8,600-person workforce by 2,500," Conwey Casillas, Vice President of Sallie Mae Public Affairs, said in a statement to Fox News.

Go figure: The cost of health care reform
For Democrats who didn't like Health and Human Services Executive Commissioner Tom Suehs' estimate that health-care refom would cost Texas $24 billion, here's a new estimate: It'll cost $27 billion.

Obama's Student Loan Takeover Adds $52 Billion to Deficit According to 'Fair Value' Accounting, Says CBO
The student loan overhaul legislation signed into law by President Barack Obama on Tuesday could add $52 billion to the deficit between 2010 and 2020 when the cost of the market risks and administrative expenses of the loans are taken into consideration, the non-partisan Congressional Budget Office (CBO) reported.

"CBO recently estimated that whereas loans issued in the direct loan program between 2010 and 2020 would reduce the deficit by a total of $68 billion under FCRA accounting, those loans would increase the deficit by $52 billion on a fair value basis," reads the March 2010 CBO study
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