When William J. Casey–the future director of the Central Intelligence Agency– was a young attorney, he learned an important lesson.
During the Great Depression, jobs were hard to come by. So Casey thought himself lucky to land one at the Tax Research Institute of America in New York.
His task was to closely read New Deal legislation and write reports explaining it to corporate chieftains.
He quickly learned that businessmen neither understood nor welcomed Franklin D. Roosevelt’s efforts to reform American capitalism.
Businessmen didn’t want legal commentary. Instead, they wanted to know: “What’s the minimum we have to do to comply with the law?”
In short: How do we get by FDR’s new programs?
Fifty years later, Casey would bring a similar mindset to his duties as director of the Central Intelligence Agency for President Ronald Reagan.
William J. Casey
He was presiding over the CIA when it repeatedly violated Congress’ ban on funding the “Contras,” the right-wing death squads of Nicaragua. The resulting scandal almost destroyed the CIA
But the “Casey Doctrine” of minimum compliance didn’t die with Casey (who expired of a brain tumor in 1987).
It’s very much alive among the American business community as President Barack Obama seeks to give medical coverage to all Americans, and not simply the ultra-wealthy.
The single most important provision of the Affordable Care Act (ACA)–better known as Obamacare–requires large businesses to provide insurance to full-time employees who work more than 30 hours a week.
For part-time employees, who work fewer than 30 hours, a company isn’t penalized for failing to provide health insurance coverage.
Obama prides himself on being a tough-minded practitioner of “Chicago politics.” So it’s easy to assume that he took the “Casey Doctrine” into account when he shepherded the ACA through Congress.
But he didn’t.
The result was predictable. And its consequences are daily becoming more clear.
Employers feel motivated to move fulltime workers into part-time positions–and thus avoid
- providing their employees with medical insurance and
- a fine for non-compliance with the law.
No less than Jamie Richardson, its vice president, has admitted this in an interview.
“If we were to keep our health insurance program exactly like it is with no changes, every forecast we’ve looked at has indicated our costs will go up 24%.”
Richardson claimed the profit per employee in restaurants is only $750 per year. So, as he sees it, giving health insurance to all employees over 30 hours isn’t feasible.
Nor is Richardson the only corporate executive determined to shirk his responsibility to his employees.
John Schnatter, CEO of Papa John’s Pizza, has been quoted as saying:
- The prices of his pizzas will go up–by eleven to fourteen cents price increase per pizza, or fifteen to twenty cents per order; and
- He will pass along these costs to his customers.
“If Obamacare is in fact not repealed,” Schnatter told Politico, “we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests.”
After all, why should a multi-million-dollar company show any concern for those who make its profits a reality?
- Papa John’s is the third-largest pizza takeout and delivery chain in the United States.
- Its 2012 revenues were $318.6 million, an 8.5 percent increase from 2011 revenues of $293.5 million.
- Its 2012 net income was $14.8 million, compared to its 2012 net income of $12.1 million.
In May, 2012, Schnatter hosted a fundraising event for Republican Presidential candidate Mitt Romney at his own Louisville, Kentucky mansion.
“What a home this is,” gushed Romney. “What grounds these are, the pool, the golf course.
“You know, if a Democrat were here he’d look around and say no one should live like this. Republicans come here and say everyone should live like this.”
Of course, Romney conveniently ignored a brutally ugly fact:
For the vast majority of Papa John’s minimum-wage-earning employees-–many of them working only part-time-–the odds of their owning a comparable estate are non-existent.
Had Obama been the serious student of Realpolitick that he claims to be, he would have predicted that most businesses would seek to avoid compliance with his law.
And had he been the ruthless practitioner of “Chicago politics,” as his enemies claim, he would have required all employers to provide insurance coverage for all of their employees—regardless of their fulltime or part-time status.
This, in turn, would have provided two substantial benefits:
- All employees would have been able to obtain medical coverage; and
- Employers would have been encouraged to provide fulltime positions rather than part-time ones, since they would feel: “Since I’m paying for fulltime insurance coverage, I should be getting fulltime work in return.”
The “Casey Doctrine” needs to be kept constantly in mind when reformers try to protect Americans from predatory employers.