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Obamacare Crisis Continues

Written By Brian Hicks

Posted October 14, 2013

obamacurrThere is rage and hot rhetoric afoot in the debate about Obamacare and the shutdown, in D.C. and all across America. During a committee hearing, one congressman actually charged that the anti-Obamacare crowd “hates government.”

No, no congressman. You see, it’s not they hate government — they hate big, inefficient, incompetent, distant, corrupt government. There’s some more rhetoric for you.

It’s almost unavoidable not to get emotionally charged, when you see the federal government forcing unexpected exuberant health care costs on hard-working, unassuming Americans, including small business owners. It’s happening to my neighbors, friends, relatives and undoubtedly local businesses in my community.

I was talking to an Obamacare supporter the other day, and after laying out my concerns, including sympathetic examples, he quipped, “too bad, because something has to be done.” After watching small business owners testify in front of Congress regarding the law’s impact on workers, I realized yes, it’s indeed too bad.

The Affordable Care Act redefines what constitutes full-time work, changing the standard from 40 hours a week to 30. The ACA requires any business with 50 or more workers to provide employees with health insurance if they work 30 or more hours weekly. This revision will have a devastating effect on small business growth, according to witnesses at a House Subcommittee on Health and Technology.

Steve Hermann is vice president for Paul’s Supermarket Inc. – a business his family has owned for over 45 years. Hermann testified at the October 9th hearing, and said the ACA creates a “hurdle” for his small business, forcing him to make difficult decisions about hiring and cutting benefits.

“We are facing a challenge in the workforce unlike anything we have ever seen before. I am fearful the unintended consequence of the Affordable Care Act will hurt our employees and undermine our values as a family-owned small business.”

Hermann employs 75 full-time employees and 100 seasonal part-time workers. He said some of his part-time employees like to pick up extra hours during the holidays, or to cover unexpected expenses. But because of the new 30 hour rule, Hermann said many workers will not be able to work these extra hours, because his small business simply can’t afford the new healthcare mandate. He added his company also may have to stop its 401K program for part-time employees, cut part-time hours, and raise insurance fees.

Hermann, who lives within a school district with 50 percent free and reduced lunch recipients, also questioned his company’s ability to continue contributing to a program called “Buddypacks.” This charity provides food for low-income children.

Raymond Keating, chief economist for the Small Business and Entrepreneurship Council, also testified at the hearing. His non-partisan group commissioned a new survey through TechnoMetrica Market Intelligence and found that “Over three-quarters of small businesses (76 percent) said they were not likely to hire over the next six months.” Of those hiring, “77 percent said they would likely hire part-time workers,” according to the survey findings. In addition the report states, “Most small businesses (63 percent) do not believe that Obamacare will help businesses like them to purchase more affordable health insurance for them and their employees.”

Also worth noting is a Gallup poll report that states “48 percent of U.S. small-businesses say the 2010 Affordable Care Act is going to be bad for their business,” and “41 percent of small-business owners say they have held off on hiring new employees, and 38 percent have pulled back on plans to grow their businesses.”

As well, the survey found that 52 percent say the ACA will “reduce the quality of healthcare they and their employees receive,” and in addition, “about one in five say they are letting people go or cutting employee hours.”

Ranking Member of House Small Business Committee, Congresswoman Nydia Velazquez (D-NY) questioned Keating during the hearing. “You blame the Affordable Care Act for reducing job growth and employment for 2010 through 2012, yet the sanctions impacting employers were not scheduled to be in full effect until 2014, and now the employer mandate has been delayed. Is it really possible a business wouldn’t want to hire someone in 2011, or 2012 because they were afraid of the penalty in 2014?”

Mr. Keating looked amused and replied, “Yes, of course it’s plausible because actually, businesses and entrepreneurs plan . . when you run a business you have to figure out what your costs are today, and what your costs are a year from now, and try to estimate going out.

“When you have a law passed in 2010 that has looming mandates and regulations, and tax increases, that certainly is going to impact the decisions that business owners make. It’s just the reality of the business world,” he said. “This is a policy agenda putting us in an anti-growth direction. In the end, it’s clear Obamacare serves as a very real drag on economic and employment growth.”

Keating added that some companies are experiencing hardships with ACA’s enormous administrative costs, and are seeing a 30 percent raise in premium rates.

“When you put the Obamacare bill in with everything else, it’s part of an unfortunate policy agenda that has been pointed against faster economic growth and job creation,” said Keating. “Is this the best answer coming out of a recession and growing an economy? It’s [the answer] not tax increases, more regulations on businesses and entrepreneurs and investors, and that’s exactly what we have done.”

While this hearing had some startling personal testimony polling information, one of the most astounding things I heard came from Congresswoman Velazquez. In her question to Keating, she was bewildered at the idea that a business would look ahead and plan. I credit this kind of disconnect for why our national debt is so out of control – many of our representatives may know policy, but have no idea what it takes to personally run a successful business, and the mere thought of planning and controlling costs is puzzling.

I am not on the latest bandwagon of just replacing every single person in Congress and starting over. There are good representatives who care, have experience and relationships with international leaders that are valuable. To say “throw them all out” as I’ve been hearing, is short-sighted.

I am not anti-politician and I’m certainly not anti-government. But considering the state of our union, something must be done to prevent stagnant leadership of career politicians. Maybe we need people in power who have worked in our communities and private sector recently, because there is no knowledge like personal experience.

I was never for term limits before, but this single line of questioning by Congresswoman Velazquez, who is in serving her 11th term in Congress, changed my mind.