the salt makers

The Senate parliamentarian dims GOP hopes on a reconciliation bill that contains even more onerous taxes and even a financial incentive to lay people off. No wonder Speaker Pelosi is laughing.

We'll acknowledge that the signing of ObamaCare into law is a historic event, but we think the Weather Channel broadcasting the signing ceremony was a bit much. On the other hand, stormy political weather and more dark clouds lay ahead.

The cries of "repeal" and "remember in November" are rising, and state attorneys general are taking the feds to court over the unconstitutional mandates and usurpation of rights contained in reform's first incarnation. The bad news is that things are going to get worse before they get better.

On Monday, as House Speaker Nancy Pelosi had a good laugh celebrating her coup d'etat, Senate Parliamentarian Alan Frumin, who gets paid out of Senate Majority Leader Harry Reid's office, issued informal guidance to Republicans that on at least one issue their plans to use the reconciliation process as a last stand had hit a snag.

According to a spokesman for Senate Minority Leader Mitch McConnell, Frumin sent word that he feels that the so-called "Cadillac tax," a proposed tax on high-end health insurance plans from which union members would be exempt, does not have an impact on the Social Security trust fund and therefore does not violate reconciliation rules under the 1974 budget act by changing contributions to the trust fund.

Republicans had hoped Frumin would be some profile in courage, but the Senate parliamentarian is one of the spoils of victory. The courts hold some hope, but in the end the only way to stop this promised fundamental transformation of America will be at the ballot box starting in November.

Meantime, put down your wallet and back away slowly, especially those of you who put people to work. An analysis of the House Reconciliation Act of 2010 (HR 4872) by the Heritage Foundation shows it to be as much of a job-killer (except for those 17,000 new IRS agents) as the Senate bill President Obama signed into law.

HR 4872, Heritage reports, would "force companies to pay a tax penalty if that business employs 50 or more workers as soon as one worker qualifies for, and opts to accept, a health insurance premium subsidy."

That $3,000 penalty is on top of the $2,000-per-worker penalty for all workers beyond the first 30 for such companies not offering a "qualified" health plan or paying 60% of employee health premiums. Such companies would be faced with a $3,000 penalty for hiring a single parent, the very kind of person desperately in need of employment.

Here's where it gets even more bizarre. According to Heritage, under the reconciliation bill, if Company A lays off an employee with a working spouse, this could generate a $3,000 tax penalty for the other spouse's employer, unless Company B also lays off the other spouse.

We're not making this up. This byzantine legislation is a job-killer that will destroy small business, the major creator of new jobs. Some 77,000 businesses in the U.S. have 50 to 200 workers that could face the $2,000-per-employee tax penalty. An additional 116,000 businesses have 35 to 49 workers.

This nonsense will stunt economic growth and worsen the economic downturn by actually providing financial incentives to not hire people. It's not worth the trouble. Businesses that might have expanded will stop at 49 employees. Those already considered a "large" business will face a minefield of taxes and penalties due in some cases to events beyond their control.

The power to tax is indeed the power to destroy. As we have said, this is not about health care. This is about power and the redistribution of wealth. And the IRS will be making a list and checking it twice to see who's being naughty and who's being nice.