IHOP Restaurant Owner Sells His 16 Locations Because Of Obamacare

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Faced with significant increases in labor costs due to the Affordable Care Act (“ACA”), a midwest restaurant owner decided to sell his 16 International House of Pancake locations.

Western Journalism reported earlier this month on the negative impact increasing the minimum wage to $15 per hour is having on the Seattle restaurant industry. However, restaurant owners around the nation are beginning to experience the impact of yet another government mandate that is greatly increasing their costs of doing business.

For Scott Womack, an Indiana franchise restaurant owner with over 25 years in the industry, the ACA mandate–coupled with the likely prospect of a minimum wage increase–meant it no longer made financial sense for him to stay in the casual dining business. The Daily Signal reports that he sold his 16 IHOP locations around the Hoosier state before the January 1, 2015 Obamacare employer mandate took effect.

Womack testified before Congress in 2011, after the passage of the ACA, about the impact it would have on his business. At the time, he had 12 IHOP restaurants with about 1000 employees. He had also signed a development agreement, prior to the law’s passage, to add 14 new locations in Ohio.

He testified at the time his plans were now in jeopardy due to the new costs of doing business associated with Obamacare. He explained that profit margins for him range between five and seven percent. He added:

The law [the ACA] is one-size-fits-all for employers, and restaurants don’t fit. Though some restaurant companies offer coverage now, the cost is prohibitive for many employees, and many of their plans will not qualify in 2014. The only viable alternative is to pay the $2,000 per employee penalty, which is not tax deductible. A quick study of public restaurant companies shows that many did not earn enough in 2010 to pay the penalties and likely will not survive in the future. For my company, these penalties amount to 60% of our earnings, and again, our company is very profitable by industry standards…

Let me state this bluntly: this law will cost my company more money than we make.

Womack told The Daily Signal: “You have to fund your development through your profits…and if you have no profits, you’re not building restaurants.”

He sold his restaurants last year, not going forward with plans to build several new locations, which meant hundreds of lost jobs for those who would have worked in his restaurants and those who would have built and serviced them.

Owners of multiple franchise locations, like Womack, can often particularly feel the law’s impact. Despite each restaurant really being a stand-alone enterprise in terms of profitability, they are grouped together in terms of the number of full-time employees with regards to Obamacare. The ACA’s employer mandate kicks in at the 50 or more full-time employee threshold.

International Franchise Association’s spokesman Matthew Haller explained its impact: “Rather than helping existing and aspiring franchise owners expand by adding jobs, locations and more hours for their employees who need them most, the law’s arbitrary definition of ‘large employer’ and ‘full-time work week’ have contributed to the steady increase in part-time employment in America and have been a drag on new franchise business formation.”

Womack decided to stay in the restaurant business by purchasing Popeyes restaurant franchises in the Kansas City area. He employees 180 now, rather than over 1000. Quick service dining, rather than casual dining like IHOP, makes more sense in the new business climate created by Obamacare. He wants to continue to grow his quick service locations, adding, “It’s a tightrope walk that you do, balancing between the risks in the industry vs. the reward of growing your business.”

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Ted Cruz’s Top 5 Presidential Moments – Why He’s Ready…

TedCruzTop5 Link

Courtesy of LouderWithCrowder.com 

Senator Ted Cruz announced his bid for the Presidency Monday at Liberty University. The right is divided on his candidacy – some love him, some hate him. Breathe, you guys.  Here at LouderWithCrowder.com and WesternJournalism.com, we’re just glad to have a deep bench. Paul, Rubio, Walker, Perry, Jindal, Christie, Bush… there’s a lot of GOP contenders to go around these days. (But here’s hoping we conservatives can agree on one good candidate rather than allowing the moderates to push us aside yet again!)

1.  Green eggs and ham – 21 hours.  Ted Cruz spent 21 hours on the Senate floor explaining to America why Obamacare was (and is) a really bad idea. And he read Green Eggs and Ham. And did a Darth Vader impression. Try and say that’s not awesome.

AwesomeDart!

 

2.  Tweets on the Senate Floor – several months before Cruz’s filibuster, Senator Rand Paul spent 18 hours on the Senate floor explaining the dangers of drones and threats to Americans’ privacy rights. Ted Cruz took to the floor to read #StandWithRand tweets… a historic first in the Senate, and a delight to social media users everywhere.

BaleKermitFast

 

3.  Stand with Israel – in perhaps his most controversial move as a Senator, Ted Cruz walked out on a gathering of “In Defense of Christians,” saying “If you will not stand with Israel and the Jews, I will not stand with you.”  That took a serious pair.

Balls

 

4.  The wisdom of Cicero – in 4 minutes of literary brilliance, Ted Cruz adapted the famed speech of the Roman Cicero and applied it to President Obama’s immigration policies.  Boom.

Clap

 

5.  Amazing Grace – traditional values are what Cruz is all about. His personal, Biblically charged 2014 speech at the Values Voter Summit won the day, and a lot of conservatives along with it. The guy just leaves goodness in his wake.

LarryDavidPrettyGood

 

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Senate’s Budget Less Bold Than House’s

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Senate Republicans offered their first budget since 2006, when it last held the majority. The plan reaches a surplus in ten years, increases defense spending, repeals ObamaCare, calls for changes to the tax code, and makes reforms to government entitlement programs.

U.S. Senator Mike Enzi, R-Wyo., chairman of the Senate Budget Committee (pictured above), stated regarding the plan:

Today we begin the monumental task of confronting our nation’s chronic overspending and exploding debt, which threatens each and every American. Make no mistake, our fiscal outlook is grim and has been ignored for far too long.

The Senate plan cuts $5.1 trillion over ten years to balance, versus the House budget, which cuts $5.5 trillion to get the same result in nine years. Overall, the budget cuts $4.1 trillion in mandatory spending and $97 billion from discretionary programs.

Two trillion in savings comes from the repeal of ObamaCare. Some other specific cuts include $430 billion in savings to Medicare, $600 billion from welfare programs, and $400 billion in savings to Medicaid by converting it to block grants to the states like the current Children’s Health Insurance Program (“CHIP”) is administered.

The Senate plan, unlike the House budget, does not call for a conversion of Medicare from a defined benefit program to a defined contribution program. Under the House reform, those eligible for Medicare who enroll in 2024 and going forward would receive premium payments from the federal government, which they would use to purchase healthcare coverage from private insurers.

Another area of disagreement between the Senate and the House regards defense spending. The House budget calls for $90 billion going to Overseas Contingency Operations, while the Senate plan designates $58 billion. President Obama had requested $64 billion in his budget. Funding the OCO fund is a way lawmakers can get around the Sequestration cuts, which are still in effect.

The Senate plan does not offer specifics regarding tax reform, but balances without increasing taxes and sets a target for tax revenue to the federal government as a percentage of GDP at 18.2 percent, which is near the historic norm of 18 percent and slightly higher than the House plan of 18.1 percent.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

GOP To Go Nuclear To Repeal Obamacare

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In a move that signals the GOP may finally be doing what was promised during the last several elections, the Senate may use a powerful procedure called reconciliation in order to prevent a bill that ends the President’s signature liberal achievement from being filibustered. This technique can only be used in certain circumstances; but since it was used by the Democrats to get Obamacare passed, the GOP should have no problem using the same measure to defeat the extremely unpopular program.

The left leaning media outlet Politico reports:

Senate Republicans want to use a powerful budget maneuver known as reconciliation to go after President Barack Obama’s health care law — particularly if the Supreme Court strikes down key provisions of Obamacare this June.

Using the fast-tracking procedure offers some advantage for Republicans, largely because a reconciliation package can’t be filibustered.

Of course, President Obama will veto this legislation.  However, the American public will then have further evidence that this unpopular health care law is all the fault of the Democratic Party and could help tee-up the election of a Republican president in 2016.

Politico continues:

The plans were included in a budget blueprint rolled out Wednesday by the Senate Budget Committee — a governing document that calls for balancing the budget within a decade, extracting hundreds of billions in savings from Medicare and turning over more responsibility to the states to run Medicaid, reducing costs even further.

“Make no mistake, our fiscal outlook is grim and has been ignored for far too long,” said the budget panel’s chairman, Sen. Mike Enzi (R-Wyo.) said as he unveiled the document. “But we have a profound moral responsibility to help hardworking taxpayers see the true picture of our country’s finances.”

It seems that the GOP may be serious about taking care of the nation’s finances once and for all if we can get a governing mandate in the next election cycle. With our sovereign debt approaching $20 trillion and climbing, 2016 won’t be a moment too late.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Obamacare Causing Rural Hospital Closures

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Changes ushered in by the Affordable Care Act are putting the financial squeeze on smaller, rural hospitals and contributing to an alarming number of closures.

The Washington Post, in collaboration with Kaiser Health News, reported on this disturbing trend happening throughout the United States.

The specific changes brought about by the ACA that are hurting rural hospitals include its reduction of Medicare payments, the reduction of payments made to hospitals to cover the uninsured, and the high deductibles that are often part of ACA approved plans. In many cases, deductibles “are running between $2,500 and $5,000,” and people can’t pay them, said Maggie Elehwany, chief lobbyist for the National Rural Health Association.

One of the assumptions of the ACA is that states would all sign on with the federal government to expand Medicaid and share the costs; but 23 states have declined to take on the new, unknown financial burden.

The Post reports other factors contributing to hospital closures include:

…declining populations; disproportionate numbers of elderly and uninsured patients; the frequent need to pay doctors better than top dollar to get them to work in the hinterlands; the cost of expensive equipment that is necessary but frequently underused; the inability to provide lucrative specialty services and treatments; and an emphasis on emergency and urgent care, chronic money-losers.

The NRHA, representing over 2,000 rural hospitals and other health care facilities, stated that 48 hospitals have closed since 2010 and 283 are in trouble. In Texas alone, 10 have closed. Rural hospitals serve approximately half of the nation’s population.

Rural health care experts warn that the country could undergo a similar rash of closures as that experienced in the mid-eighties and early nineties following a change in how the federal government reimbursed Medicare billing to fixed payment amounts. That change favored large, efficient hospitals and hurt smaller, rural ones, which lacked the same economies of scale. The policy was amended in 1997 to make exceptions for smaller hospitals.

The ACA, passed with the intention of giving more access to health care, may have the unintended consequence of causing many communities throughout the United States to have less, unless changes are made.

h/t: IJReview

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom