Failure To Raise The Debt Ceiling Is Bad For Business

Huffington Post

Headlines have dubbed it “unthinkable,” and businesses small and large have urged lawmakers for months to agree soon to ensure the country doesn’t default on its debt. But next week’s August 2 deadline to raise the federal debt ceiling looms, and a recent deal that could have resolved the issue fell through because some lawmakers couldn’t abide elimination of special tax breaks used mostly by the most affluent. It’s alarming that lawmakers have taken the debate so close to the wire, considering the havoc a default would wreak on small businesses and the economy as a whole.

With each passing day that politicians fail to make a deal, economic uncertainty grows, shaking the environment for small and large businesses alike. Unfortunately, the clock is still ticking and that last minute is fast approaching.

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New Fuel Efficiency Standards Power Small Business Success

Huffington Post

A poll released Friday indicates the vast majority of small business owners will be pleased with the deal President Obama struck with automakers that raises fuel efficiency standards to 54.5 mpg for cars and light trucks. Obama’s plan, which he announced Friday, mirrors the desires of small business owners, who believe high fuel efficiency standards are essential to sparking job growth and stimulating the economy.

Polling by Small Business Majority found 87 percent of small business owners believe it is important to increase fuel efficiency standards now. Once standards are raised, the money saved on fuel will be injected into the economy as cash becomes available to business owners who want to hire new employees but are unable to because of suffocating energy costs.

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Report Gives Lawmakers Tips on Creating Health Insurance Marketplaces for Small Businesses

John Arensmeyer

John Arensmeyer

Politicians and pundits have focused a lot of attention on the Affordable Care Act’s requirement that everyone have health coverage, but few have looked into the health insurance marketplaces—the component of healthcare reform most important for small businesses. Fortunately, people are beginning to pay closer attention. On Monday, the Department of Health and Human Services released new guidelines state lawmakers can follow when setting up the marketplaces, also known as exchanges. If lawmakers set them up right, these marketplaces will allow small businesses to pool their buying power, driving down costs and allowing them to purchase high-quality insurance at lower rates just like big businesses.

The states are charged with implementing the exchanges by 2014, but only 10 have moved forward with legislation necessary to create them. The longer states wait, the more they risk missing the 2014 deadline and having HHS create the exchange for them. States should set the exchanges up themselves because they have more insight into the needs of their small business owners. States that do not pass legislation this year will find it challenging to build a successful exchange by 2014.

There is help out there for lawmakers willing to tackle the hard but necessary work of setting up the exchanges. The Center for American Progress and Small Business Majority issued a report on July 6 that will help legislators make sense of those rules and provide a roadmap they can follow to create a robust exchange that will significantly lower small business owners’ premiums and give them more options for high-quality health insurance. The report focuses on the intricacies of creating an exchange, provides examples of successes and failures experienced by states that have already created them and offers advice on how to get it right the first time. Small business owners like Walt Rowen, owner of Susquehanna Glass Company in Pennsylvania, are counting on lawmakers to do just that.

The Columbia-based small business, which opened its doors more than 100 years ago, survived the Great Depression, wartime and the recent economic downturn by ensuring its factory stays efficient and diversifying and expanding the type of work it does. But soaring healthcare costs—one increase came in at an outrageous 160 percent above the previous year’s rate—had Walt wondering if the company had finally encountered an obstacle it couldn’t overcome. If done right, health insurance marketplaces will make volatile premium hikes like his 160 percent zinger a thing of the past and the glass company can thrive for another 100 years and beyond.

Lawmakers have a host of important decisions to make when creating an exchange, such as whether it should be an active or passive purchaser, what role brokers should play and whether the exchange should cater to individuals and small businesses jointly or separately. But these issues are just a fraction of the whole. Healthcare reform, and exchanges in particular, are expansive and complicated; policymakers must give themselves time to sift through the complexities. Roadmaps like the one released last week will help legislators smoothly implement these complex reforms. State officials have the chance to drive our nation’s chief job creators down the road to less financial burden and more economic opportunities through state exchanges. Walt Rowen, and millions of other small business owners like him, are counting on them to get it right.

Healthcare Reform Ruling Comes Down on the Side of Small Business

John Arensmeyer

John Arensmeyer

The Affordable Care Act was signed into law more than a year ago, but in true democratic fashion the debate about whether it should remain on the books is far from over. Opponents of the law have been waging one court battle after another trying to have it ruled unconstitutional. But on June 29, the 6th Circuit Court of Appeals issued an encouraging ruling: the Affordable Care Act is constitutional.

The ruling is the latest in a handful of court decisions reaffirming the right of Congress to enact the law. The panel of three judges—two of whom were appointed by Republican presidents—determined that Congress had the power to pass the Affordable Care Act under the Commerce Clause of the Constitution. We hope this will put the tired debate over the constitutionality of the new healthcare law to rest because there is a lot in the law that will give small businesses the relief they need from soaring healthcare costs.

The court case focused on the minimum coverage requirement provision of the ACA. This requires everyone in the United States to have some type of health coverage by 2014, whether through a private plan, employer-based health insurance or a public plan like Medicare or Medicaid. The judges agreed with many constitutional law experts on this subject: Congress did not overstep its legal authority when making this requirement.

It’s refreshing to see two judges from different political parties confirm the constitutionality of the minimum coverage requirement. They were able to look past the partisanship that has gripped the national debate on healthcare reform and make a decision based on the law.

Opponents of healthcare reform haven’t been able to defend the merits of their argument because the facts aren’t on their side. They can’t say that the status quo was working because it wasn’t—small business owners and their employees can attest to that. Small businesses have been losing coverage at an alarming rate thanks to the increasing unaffordability of insurance and inaccessibility to plans that fit their needs. The RAND Corporation estimates that the ACA will boost employer health insurance offer rates from 57 to 80 percent because of, among other things, lower premium costs resulting from healthcare exchanges and tax credits. A study we released with Families USA found that more than four million small businesses—87 percent of all small businesses in the country—are eligible for tax credits to help cover the cost of health insurance.

Opponents also claim that the reform measures will add to the national debt and increase government spending, yet the nonpartisan Congressional Budget Office’s analysis found that the ACA will reduce the federal deficit by $143 billion by 2020 and by another $1 billion the following decade. This is an important point to consider as lawmakers debate whether to raise the nation’s debt limit. The Affordable Care Act will improve our nation’s fiscal woes by taking direct aim at rising costs across the entire healthcare system and making the reforms necessary to reduce waste, fraud and abuse and improve the effectiveness of every dollar we spend.

Most importantly, opponents’ efforts to thwart the law won’t make the situation any better for small businesses and the millions they employ. Striking down the law would only make things worse; health premiums would continue to increase at exponential rates and more and more individuals would be left uninsured. It was reassuring Wednesday to see fair and impartial judges stand on the side of reason and ensure that won’t happen any time soon.

Small Business Strategy: Health Insurance Helps Boost Bottom Lines

John Arensmeyer

John Arensmeyer

Originally featured on the Huffington Post

Most mornings, Michigan small business owner Mark Hodesh meets a group of friends for a cup of Joe at the local coffee shop to shoot the breeze. The conversations are casual and friendly, but as is often the case, talk invariably turns to politics and more than a few mornings over the past year or so have been spent wrangling over the vicissitudes of healthcare reform.

Mark is one of the few members of a group who supports the Affordable Care Act, a stance he explains in a bottom-line oriented way only a small business owner could. Mark provides health insurance to his employees because it makes good business sense, not because he feels like he has a responsibility to do so or because it makes him feel warm and fuzzy inside. He does it because it hones his competitive edge. Offering coverage helps him hire and retain good employees and that, in turn, helps boost his profits.

Many small business owners offer their employees health insurance for the same pragmatic reasons Mark Hodesh does, and support the new healthcare law because it will lower their costs and allow them to keep more of their profits–especially when the law is fully implemented in 2014 and health insurance marketplaces are available for small businesses to buy lower-cost, higher-quality plans. These examples contradict a recent study by McKinsey & Co., which claims there will be a 30 percent drop in employer-sponsored health insurance because of the new law.

When Mark Hodesh — who this year received a $10,000 tax credit thanks to the new law that allowed him to hire a new employee — can purchase health insurance for his employees at an even lower cost, you better believe he’s not going drop the coverage he sees as making his business more competitive.

McKinsey’s report contradicts credible independent analyses, not to mention the real-life experiences in Massachusetts. Healthcare reform in the Bay State is the closest thing to the federal law in effect, and despite similar speculation before its enactment, employer-sponsored health insurance didn’t drop once the law was implemented. It rose. Massachusetts’s law is weaker than the ACA, yet employer-sponsored insurance grew by 100,000 people, according to MIT economist Jonathan Gruber. Nationwide, the impact should be even greater because the ACA offers employers much stronger incentives to provide insurance, such as tax credits.

What’s more, the McKinsey report is an outlier at odds with studies by well-respected groups including RAND Corporation, Urban Institute and the Congressional Budget Office, which found the ACA’s effect to range from an insignificant loss in coverage to a major increase–nothing like the 30 percent drop McKinsey predicts.

Recent media reports have shined a light on the controversial study. Time reporter Kate Pickert asked McKinsey to reveal its methodology and other details about the survey — basic questions that should be asked of any credible poll — and firm representatives refused. A Talking Points Memo report quoted sources close to the poll who claimed McKinsey wasn’t releasing the data because “it would be damaging to them” and that the poll wasn’t conducted using McKinsey’s “typical, meticulous methodology.”

But, contradictory studies and undisclosed methodology aside, the study ignores the current reality: employers have been dropping insurance left and right under the status quo. In 2000, 69 percent of small businesses offered benefits; in 2008, only 63 percent did–a trend sure to accelerate without reform.

The nattering nabobs of negativism will latch onto anything — no matter how questionable — they think bolsters their case against healthcare reform, but the fact remains that the status quo was not working for small businesses. History and the majority of research show the Affordable Care Act will. And that means Mark Hodesh’s employees don’t have to worry about losing their insurance and Mark will be able to keep his competitive advantage, and perhaps score a point or two during his morning political debates.