Chad’s Morning Brief: President Obama to Change Overtime Rules, Loophole for Obamacare Found?, and Other Top Stories

Chad’s Morning Brief: President Obama to Change Overtime Rules, Loophole for Obamacare Found?, and Other Top Stories

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Here is your Morning Brief for the morning of March 13, 2014. Give me your feedback below and tune in to The Chad Hasty Show for these and many more topics from 8:30 to 11am. Remember, you can listen online at KFYO.com or on your iPhone/Android with the radioPup App.

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Business owners and groups were apparently shocked yesterday when they learned that President Obama would change the rules for overtime. The White House will announce the moves today but according to The Hill, the change could impact as many as 10 million workers.

Business groups and congressional Republicans are blasting regulations President Obama will announce Thursday that could extend overtime pay to as many as 10 million workers who are now ineligible for it.

While liberals lauded the plan as putting more cash in the pockets of millions of workers, business groups warned it would damage the economy and Republicans said it was another example of executive overreach.

Trade associations already battling the White House over a proposal to raise the minimum wage to $10.10 per hour said they were blindsided by the announcement.

“This came as a shot out of the blue,” said David French, the National Retail Federation’s senior vice president for government relations. “Just on the surface, this looks like an enormous new administrative burden.”

Few details were released Wednesday about the initiative, which the administration is expected to detail on Thursday.

“What we’re trying to take a look at is how we can make the labor force as fair as possible for all workers and that people get rewarded for a hard day’s work with a fair wage,” Betsey Stevenson, a member of the White House Council of Economic Advisers, told reporters Wednesday.

Current regulations require employers to pay overtime to salaried workers making less than $455 a week. Obama’s proposal would redefine which employees can be classified as “executive or professional” and thus ineligible for overtime pay.

The action would expand the sphere of eligible employees to include, for instance, fast food shift supervisors and some office workers now being denied overtime pay. It was unclear how high the weekly pay threshold might be raised.

Employees would also be required to perform a minimum percentage of “executive work” to qualify for the so-called white-collar exemption, narrowing a loophole that allowed companies to exempt certain workers.

Labor Secretary Thomas Perez pledged that his agency would conduct a “complete” and “thorough” rulemaking process before final regulations are issued.

He would not say if that could happen this year.

“I’m all about getting it right,” Perez told The Hill. “We’re going to take whatever time is necessary.”

Depending on the final product, new regulations could benefit as many as 10 million new workers, according to the left-leaning Economic Policy Institute.

But the plan could backfire if employers choose to limit the hours of employees or cut their base pay to account for expected overtime.

“That’s just a mathematical formula,” said Tammy McCutchen, who served as administrator of the Labor Department’s Wage and Hour Division during the George W. Bush administration.

McCutchen presided over the last update to overtime regulations, which took well over a year to complete a decade ago, and were the subject of an intense fight in Congress.

The job of ushering through the regulations this time around could fall to Boston University professor David Weil, Obama’s nominee to head the Wage and Hour Division.

It will be no easy feat.

Time is already beginning to run out on Obama’s regulatory agenda, since complex rules routinely take a year or more to develop and put into place.

While Republicans and business groups are upset with Obama over this, it probably won't stop the US Chamber of Commerce from supporting the administration when it comes to amnesty.

Obamacare Waiver

Lose your insurance because of Obamacare? Is Obamacare too expensive to sign up for? According to Townhall and other media outlets, you may have a waiver.

Heads up: This is the biggest news story of the week, yet it's getting relatively little play. Team O inched closer to taking this step back in December, when they created a broad "hardship" exemption to the individual mandate tax for anyone whose plan had been cancelled under Obamacare and found the new rates unaffordable. Here's what we wrote at the time:

 

 The administration is conceding that Obamacare itself, and specifically its high costs, is a "hardship" for millions. With that in mind, how can they justify not extending the same waiver to all uninsured people? Or all Americans, for that matter? Yes, people who've been dumped from their existing coverage are the immediate victims of Obamacare's most visible (for now) broken promise -- but if the administration is acknowledging that Obamacare's supposedly affordable coverage really isn't as advertised, that's not a problem that's unique to the newly uninsured. It applies to everybody affected by the law.

It was a question of fairness: How could the White House grant these broad and essentially verification-free waivers to one group of uninsured Americans, but not another? The fairness issue reared its head again when the administrationannounced its second employer mandate delay last month. Big businesses get a pass on a punitive mandate that hurts them, but small businesses, individuals and families aren't spared? Now we have our answers. In a very quiet regulatory shift issued just last week, the individual mandate tax "hardship" exemption was expanded to include pretty much anyone willing to "attest" that they've experienced some sort of trouble obtaining insurance. Behold, the hated individual mandate tax dying a quiet death in a stack of unheralded regulations (via the WSJ):

 

 In 2013, HHS decided that ObamaCare's wave of policy terminations qualified as a "hardship" that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts. But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you "believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy" or "you consider other available policies unaffordable." This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.

 

That's exactly right. This change could easily apply to the entire uninsured population -- the vast majority of whom haven't signed up for Obamacare coverage, with most citing lack of affordability as the top reason. The White House recognizes that dispatching the president to practically beg people to think about canceling their cable or cell phones in order to pay for his law's "affordable" care isn't politically sustainable. Nor is the idea of millions of long-term uninsured Americans remaining without coverage, but getting slapped with resulting fines for the first time. So the mandate tax has, in effect, been regulated out of existence until 2016. Allahpundit declares the mandate tax "dead," slayed at the hands of a president who is systematically and single-handedly uprooting his own signature accomplishment:

 

 The IRS was never going to enforce the mandate strictly this year, but now they don’t have to enforce it at all. Anyone who’s declined to buy insurance by April 1st can simply claim hardship and that’s that. This makes three major rule changes to the core components of ObamaCare in the past month alone: On February 10th, the White House delayed the employer mandate for small businesses until 2016, and then, 10 days ago, it extended for two more years the rule allowing insurers to un-cancel plans for consumers who want their old, cheaper coverage back. Little did we know until now that, on the same day, they also all but suspended the individual mandate until 2016. And like Levin says, it’s unlikely that they’ll ever bring it back. Why would the next president, eager to begin his/her term on a strong note, want to reinstate a harsh financial penalty for noncompliance with O-Care when the guy who signed the law was unwilling to? The mandate is dead. Obama’s repealing ObamaCare himself, piece by piece.

So why was this enormous change made with zero fanfare? Two reasons: First, the White House is already far behind its projected pace on enrollments. They've decided against trumpeting a huge disincentive to signing up in the midst of their enrollment period's home stretch. Second, this is all hugely embarrassing to the president. This mandate tax is the tent pole of this whole enterprise. It is what allowed the law to narrowly survive the Supreme Court's scrutiny. Obama has also repeatedly threatened to veto Republican efforts to delay the mandate tax through the legislative process. He did so most recently last week. Democrats allowed the government to shut down last fall when the GOP's central "ask" was to do...exactly what Obama has now unilaterally done on his own. Once the March 31 deadline passes, the White House will need to determine whether or not to publicize its expansive, all-inclusive "hardship waiver." (Again, they're admitting that the hardship is Obamacare itself). This delay was so nonchalant that it hardly generated any attention at all until the Journal picked up on it earlier in the week. Through opacity, the White House spared itself another horrible news cycle. But if people don't hear about these new, anything-goes waivers, anger over the unfair mandate tax could continue to simmer and hurt Democrats. Decisions, decisions. In any case, Obamacare -- as it was originally envisioned and passed -- is gone. Think about that. It's extraordinary.

Other Top Stories:

These and many more topics coming up on today’s edition of The Chad Hasty Show. Tune in mornings 8:30-11am on News/Talk 790 KFYO, streaming online at kfyo.com, and now on your iPhone and Android device with the radioPup App. All guest interviews can be heard online in our podcast section after the show at kfyo.com.

Filed Under: business, obamacare
Categories: Chad's Afternoon Brief

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