Clinton's Health Plan Could Take A Scalpel To Jobs

While President Clinton's ambitious health-care reform plan is in trouble on Capitol Hill, its vocal critics among policy analysts have been surprisingly silent on its potential job impact. The reason is most economic analyses of Clinton's plan conclude that reform will have little net impact on job growth, prices, and other broad-based economic variables. Even the Congressional Budget Office, which concluded that reform would cost the government $133 billion more than the Administration predicted by 2000, waved off political charges that the President's plan would destroy many jobs.

Yet a new analysis from DRI/McGraw-Hill, the economic consulting firm, severely undercuts the sanguine consensus. DRI economists calculate that both the higher taxes and employer mandates to pay for workers' insurance required by the Clinton plan would cost the economy some 300,000 jobs over the next five years. The DRI analysis also argues that the White House's plan to squeeze health-care costs will result in backdoor rationing. Caps on insurance premiums will cut the medical care available to Americans by almost $150 billion in 2000, and DRI says little of the savings would come from increased efficiency. Instead, the study says, spending caps would eliminate care that Americans want.