Warren: GOP's Workweek Bill 'Corporate Welfare'

A healthy dose of irony — or hypocrisy, depending on your viewpoint — was on the docket Thursday at a Senate hearing on Obamacare.

In a fiery response to a Republican-led effort to redefine the full-time workweek from 30 to 40 hours, Sen. Elizabeth Warren (D-Mass.) chided the GOP for pushing a plan that would “vastly expand the reach” of the Affordable Care Act.

“This bill would increase the number of people on government healthcare by 500,000,” Warren said during the Senate Health, Education, Labor and Pensions Committee hearing on the Republican plan. “[And] it would add $53 billion to the deficit.”

Warren cited a report by the nonpartisan Congressional Budget Office as the source for both statistics.

More than a few of Warren’s Republican colleagues on the dais appeared nonplussed in response to her comments. Bemoaning the expansion of Obamacare isn’t exactly a Democratic talking point, after all, and Warren, one of the Senate’s most liberal members, has been a champion of the act since it was passed in 2010. And the rising deficit has long been a Republican rallying cry as the party has sought to cut spending on largely Democratic social programs to get a handle on the U.S. debt.

Douglas Holtz-Eakin, president of the conservative American Action Forum and a witness at Thursday’s hearing, took issue with the CBO figures, saying he believed the increase to the deficit would be much less.

Warren asked him if he thought the CBO was “making up numbers.” Holtz-Eakin, a former director of the CBO, said no, he did not. He simply had an honest difference of opinion with the CBO study, he said.

Warren was testy at times with Holtz-Eakin, having been left flat-footed by his answer to an earlier question.

“Why would these [Republicans] support this bill?” she asked him after detailing some of the CBO’s findings.

“You’d have to ask them,” was Holtz-Eakin’s quick reply.

“Well … OK,” Warren replied. “Fair enough.”

Better Hours, Better Pay

Under the Affordable Care Act, those who work 30 or more hours per week are considered full-time employees. The law requires employers to offer health insurance to any full-time worker or pay a $2,000 fine for each eligible worker.

To get around the requirement, many companies have slashed workers’ hours to 29 or fewer, Republicans say, leaving millions of Americans with less pay and often the need to take on a second or third job to make ends meet.

Redefining full time to the more traditional 40 hours per week, Republicans say, would lead to better hours and more pay as even those companies that do not want to provide insurance coverage could give employees up to 39 hours per week. That would be essentially full-time work, they say, even if it would not meet the benefits-triggering definition of full time.

“Republicans have talked a lot about wanting to repair the damage of Obamacare, and we’ve also talked about wanting to get results,” Sen. Lamar Alexander (R-Tenn.), the committee’s new chairman, said in his opening remarks on Thursday. “This bipartisan bill should be an important step to doing both.”

Murray: No Solution

But Democrats on the committee say the bill would, in fact, be a step in the wrong direction, with Warren calling it a “political attack on the American family’s access to healthcare,” and “corporate welfare.”

Sen. Patty Murray (D-Wash.), the ranking Democrat on the panel, agreed, saying the bill rewards “big corporations and their profits” while punishing working families.

“By allowing businesses to get out of offering health insurance to any employee working less than 40 hours, this bill would actually create the problem it claims to solve,” Murray said.

She said the new 40-hour cap would encourage businesses to cut just one hour from the workweek of traditional full-time workers, creating a glut of Americans without healthcare.

“Workers across the country will have to worry about their healthcare being cut off, their hours being rolled back, and their jobs being eliminated for part-timers,” Murray said.

Unintended Consequences

Republicans and many business leaders, however, say that’s exactly the problem Obamacare has created.

Andrew F. Puzder, CEO of CKE Restaurants Holdings Inc., the parent company of fast-food chains Carl Jr.’s and Hardee’s, spoke in favor of the bill at Thursday’s hearing. The problem can be summed up with a little basic math, he said.

“If you have three employees working 40 hours per week , they will produce 120 labor hours,” and must be offered insurance under the ACA, he explained. “Five employees working 24 hours per week also produce 120 labor hours. [But] employers … have no such [healthcare] obligation to them, making part-time employment less costly.”

Holtz-Eakin made the same point Murray did about the bill encouraging employers to cut a single hour from current 40-hour-per-week employees. But he framed it much differently, using an example of someone working 40 hours per week at the average hourly wage of $24.57.

“[Under the law currently,] it would cost the employee 11 hours to go from 40 hours to 29 hours per week,” he said. “This means the employee would lose $270.27 per week or $14,054.04 per year.”

But by raising the full-time definition to 40 hours per week, the same worker stands to lose much less, Holtz-Eakin said.

“Employers could avoid the mandate simply by reducing the worker’s hours from 40 to 39 per week, [meaning that] same worker would only lose $24.57 per week or $1,277.64 per year,” he explained.

‘Trying To Do Right …’

But one business owner echoed Murray’s comments about the GOP bill, saying the Republican plan is, in effect, a solution in search of a problem.

“I understand that the backers of this legislation believe that it would give 2.5 million low-income wage earners a raise,” said Joe Fugere, founder and owner of Tutta Bella Neapolitan Pizzeria, a small chain that employs 200 people in Washington state. “The reality is that few employees in our industry would be scheduled more than 30 hours a week, regardless of the [full-time] threshold.”

He also disputed the idea that the ACA has led to a massive increase in part-time workers.

“There is limited evidence that the current health reform has caused any significant shift towards part-time work in any industry,” Fugere said.

Redefining full-time work would be detrimental to not only American employees, but also to the American ideals of fair play and rewarding hard work, he added.

“Rather than focusing on the few employers who will be led solely by profits and cost savings,” Fugere said, “let’s focus instead on those employers who I believe comprise the majority of business owners in our country — the ones trying to do right by investing in their employees while at the same time reaching their financial goals.”