'Fact checker' makes a mistake in attack on Cruz

Jed Graham:
In a post awarding Sen. Ted Cruz three Pinocchios, Washington Post fact checker Glenn Kessler broke the first two rules of fact checking:

1. Think before you call someone a liar.

2. Don't level an attack on someone's veracity because you doubt his sincerity or question his motives.

Here is the tweet from Cruz that led Kessler to go on the attack:

"If Gang of 8 bill passes, those newly legalized are exempted from ObamaCare. HUGE incentive for employers to hire them instead of Americans."

Kessler, in his first published draft, said no such incentive exists in the Senate bill to hire provisional immigrants over U.S. citizens. Then, informed of his error by commenters , he acknowledged that this incentive does exist. But Kessler argues it is of little importance and — by failing to retract his Pinocchios — implies that raising concern about it equals a lie.

Now to Kessler's errors, which might have been avoided if he had carefully read those articles of mine he linked to:

First, he is shaky on the details of ObamaCare's employer mandate. He writes: "Some employers with too skimpy or unaffordable insurance coverage will likely have to pay a penalty of about $2,000 for each employee eligible for health care exchange subsidies, excluding the first 30 employees."

This accurately describes the penalty that would be paid by employers who don't offer any coverage to workers. But companies that provide "skimpy or unaffordable insurance" are virtually certain to pay a penalty of $3,000 per worker who gets ObamaCare subsidies. That's because employers will pay the lesser of the two ways of calculating the fine, and the $3,000-per-subsidized-worker penalty will add up to a lot less for firms with a typical level of covered workers and exempt part timers.

It's worth noting that this $3,000 fine will be nondeductible. That means, for a profit-making firm that pays a combined 40% federal and state tax rate, it will be the equivalent of $5,000 in annual wages. When you are talking about a low-skill worker who makes $15,000 or $20,000 a year, that is, to borrow Cruz's word, huge.

Because legalized immigrants (officially, registered provisional immigrants in the Senate bill) won't be eligible for subsidies for a decade or more, employers could be sure of escaping such a fine. While many citizens (and green card holders) will opt to go without coverage and pay an individual tax penalty, it's unlikely that very low-wage workers would make such a decision. That's because the penalty will be far greater than their out-of-pocket payment for a bronze plan, as detailed here.

Next, Kessler bizarrely says that ObamaCare's employer penalties will be "almost too minuscule to be noticed — only 0.2% (about 10,000 businesses out of 6 million) would be affected by the employee shared responsibility provision. That's because it only affects companies that employ more than 50 people — and 96% of companies have less than 50 people."
What Ted Cruz said was accurate and Kessler is just trying to prop up the Gang of Eight bill by dodgy arguments detached from reality.  I give Kessler four Pinocchios.


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