Madam Speaker, America's leading voice for small business, the National Federation of Independent Business, the NFIB, opposes H.R. 3962, the Pelosi takeover bill. The NFIB has sounded the alarm about the employer mandate, payroll tax…
Madam Speaker, America's leading voice for small business, the National Federation of Independent Business, the NFIB, opposes H.R. 3962, the Pelosi takeover bill. The NFIB has sounded the alarm about the employer mandate, payroll tax penalty and unnecessary paperwork mandate crippling small businesses.
The opposition letter from the NFIB warns that the Pelosi takeover includes multiple mandates. Economic research shows mandates are ultimately borne by the worker through job loss and lower wages. The NFIB also warns how the payroll tax penalty is a tax on jobs and job creation. Additionally, the unnecessary paperwork mandate will place a new paperwork burden on all small businesses at a time when they are struggling to stay afloat. The NFIB has estimated the takeover effort will kill 1.6 million jobs at a time of record unemployment.
We should support health insurance reform, not a government takeover.
November 5, 2009.
Letter to House Opposing H.R. 3962
Dear Representative: On behalf of the National Federation
of Independent Business (NFIB), the nation's leading small
business advocacy group, I am writing in opposition to the
Affordable Health Care for America Act (H.R. 3962). The
Affordable Health Care for America Act does not reflect the
access or affordability needs of NFIB's small businesses, and
a vote against H.R. 3962 will be considered an NFIB Key Vote
for the 111th Congress.
NFIB has been a constructive participant in the healthcare
debate and has spent more than a decade voicing our need for
reform. With healthcare costs ranking as the No. 1 issue
facing small business, our employers must carefully weigh the
potential benefits of reform against the new costs imposed on
business owners in the legislation. NFIB members have
identified specific areas in H.R. 3962 that will raise those
costs:
Employer Mandate: H.R. 3962 includes an employer mandate
that will require employers to pay for healthcare for full-
time and part-time employees. An employer mandate does not
address the No. 1 issue facing small businesses:
unsustainable costs. This mandate affects those who do not
offer coverage today as well as those who already do provide
insurance, but aren't making contributions at contribution
levels outlined in the bill (72.5% for individual plans and
65% for family plans). Rather than help, this will penalize
employers already offering healthcare and force them to make
hard choices about how to afford the new government
requirements. Economic research has shown time and again that
mandates such as these are a ``one-two punch'' where the cost
is first borne by the employer, but is ultimately borne by
the employee--through job loss and lower wages.
Payroll Tax Penalty: A payroll tax penalty is a tax on jobs
and job creation because they tax labor. The legislation
requires that all employers with a payroll of $500,000 or
more pay a payroll tax of up to 8 percent if they do not
provide ``qualified'' health insurance to their employees. No
matter how profitable or unprofitable a business might be,
they are forced to pay this tax. In addition, because the
exemption thresholds in H.R. 3962 are not indexed for
inflation, the exemption will become a healthcare equivalent
of the alternative minimum tax, hitting more and more
employers until there is no one exempted at all.
Paperwork Mandate: H.R. 3962 places a new tax-compliance
paperwork burden on all small businesses. The ``corporate
reporting'' provision is an expansion on reporting
requirements (for transactions of more than $600), which
increases the cost of operating a small business and diverts
resources away from growing and creating jobs.
Big Benefit Package and More Mandates: Small employers need
a guarantee that plans offered in an exchange will be less
costly, not more expensive, than what they are paying today.
Today, small businesses pay an average of 18 percent more for
their healthcare, leaving them continuously searching for
more affordable choices.
H.R. 3962 gives a political board the power to define
``coverage'' and will determine whether an employer plan is
``acceptable.'' However, the bill does nothing to ensure that
the new plans will be less costly than what small employers
are paying today. In some cases, the legislation will also
require some small employers to cover benefits that are not
currently mandated under federal law.
Takes Away Small Business Solutions: Small employers need
more, not fewer, affordable health insurance options.
However, the prohibition of HSA, FSA and MSA funds to
purchase over-the-counter medications, along with the $2,500
limit on FSA contributions, threatens to further limit the
ever-shrinking options employers have to provide meaningful
healthcare to their employees.
Public Option: A government-run plan cannot compete fairly
with the private market, and threatens to destroy the
marketplace, further limiting choices. We believe that with
proper reforms the private market can be held accountable to
provide greater competition and lower-cost solutions where
insurers compete based on their ability to manage, rather
than shed risk. Instead, the excessively prescriptive
insurance reforms in H.R. 3962 will drive up costs.
Surtax: Seventy-five (75) percent of small businesses are
structured as pass through entities and pay their business
taxes at the individual level. More than one-third of small
businesses employing 20 to 250 employees could face the tax.
Finally, since the tax is not indexed for inflation, the
effect of the tax will creep downward, making more and more
businesses vulnerable to a tax increase.
Poorly-Structured Tax Credit: There are two reasons the
credit in H.R. 3962 is of limited value. First, the
availability of the credit is too short. A credit that is
only available for two years means that every small business
owner that claims the credit will see a large spike in their
out-of-pocket costs for health care in year three. Second,
the wage limits are too restrictive. Phasing the credit out
based on average wages of $20,000 or less severely reduces
the amount of a tax credit available for most small
businesses.
NFIB will continue to advocate for reform because, as both
democratic and republican lawmakers have said, the status quo
is not acceptable. Our small business owners agree, but
reform must make the problem better, not worse. Because H.R.
3962 will not lower healthcare costs and threatens our
economic recovery, NFIB will consider a NO vote a vote in
support of small business. This will be an NFIB KEY VOTE FOR
Mr. Speaker, I have criticized many of the provisions of this bill (H.R. 3962) and rightfully so. But in fairness, I do believe the sections relating to the creation of a market for biosimilar products is one area of the bill that strikes the appropriate balance in providing lower cost options to consumers without destroying a healthy and functioning industry in this country. These provisions were one of the few areas in the bill adopted on an overwhelming bi-partisan vote for the Eshoo-Inslee-Barton (EIB) amendment in the Energy and Commerce Committee.
Creating a pathway for new products that doesn't destroy the ability or the incentives for innovator companies to develop breakthrough technologies and at the same time providing a safe and effective way to bring competition to benefit patients is a laudable achievement. I wish we could remove this provision from this fatally flawed piece of legislation and consider it separately because it would pass with the kind of overwhelming bi-partisan support that Americans across the country wish to see.
However, these provisions are only the first step in a long path to the marketing of these new products. New research and clinical testing will have to occur and the FDA will write rules that will ensure this research is done safely and effectively. One of the reasons I have long supported the U.S. biotechnology industry is that it is a homegrown success story that has been an engine of job creation in this country. Unfortunately, many of the largest companies that would seek to enter the biosimilar market have made their money by outsourcing their research to foreign countries like India. With this weeks devastating news that unemployment has reached 10.2 percent it is critical that we preserve jobs in the United States. While the innovator's have created jobs here, these generic companies have shipped them overseas, so they can turn around and sell cheap knockoffs of innovative American products.
As this new market launches in the U.S., we need to ensure that we foster innovative products in this country for the creation of jobs and research that will go into proving whether these products are interchangeable with the innovators products. I have my doubts that these companies can create such interchangeable products, but I am certain that the research and testing of whether or not they can should occur in this country and not somewhere across the globe. Testing and research on these interchangeable biosimilars should occur in this country to ensure that it is done properly and safely and to benefit our economy.