Obamacare ruled to be constitutional

Today marks an extraordinary day for American small businesses. The positive measures under the Affordable Care Act that began in 2010 will continue to benefit our small businesses, the engine of America’s economy.

The new law has already helped hundreds of thousands of small businesses, many of which are based here in South Carolina, through healthcare tax credits. 2014 will bring an insurance marketplace that will create more competition among insurance companies to drive down premiums. Fewer people without insurance will curtail cost shifting that results in those with health insurance paying higher premiums. When the ACA is fully implemented, small businesses will finally be paying the same rates as big corporations.

Today is a great day for small businesses in the United States.

The only concern with the Supreme Court ruling is that each state now has the option of not expanding Medicaid to 133 percent of the federal poverty level. Small business will benefit from the expansion because to do so will reduce the number of employees needing to be covered by a company’s healthcare plan and thus reducing the cost to the business. But that fight is for tomorrow. 

SC Small Business Chamber President to Testify in Washington Today

Frank Knapp, Jr., president and CEO of the South Carolina Small Business Chamber of Commerce will testify in Washington, DC at the House Committee for Small Business today at 1 p.m. The hearing is entitled,  Regulatory Flexibility Act Compliance: Is EPA Failing Small Business?

Mr. Knapp will be representing both the SC Small Business Chamber of Commerce and the American Sustainable Business Council of which he is vice chair.

The hearing will examine whether the Environmental Protection Agency (EPA) is complying with the Regulatory Flexibility (RFA). The RFA requires federal agencies to assess the economic impact of their regulations on small businesses, small non-profits, and small governmental jurisdictions and if the impact is significant consider alternatives that are less burdensome. The Committee will focus on specific RFA compliance issues in the context of several EPA regulations.

Also testifying are:

¨ Keith W. Holman, Legal and Policy Counsel, U.S. Chamber of Commerce, Environment, Technology and Regulatory Affairs Division, Washington, DC

¨ Jeff Brediger, Director of Utilities, Orrville Utilities, Orrville, OH

Testifying on behalf of the American Public Power Association

¨ David Merrick, President, Merrick Design and Build Inc, Kensington, MD

Testifying on behalf of the National Association of the Remodeling Industry

Below are the prepared comments of Mr. Knapp for this hearing:

Chairman Graves, Ranking Member Velasquez, and members of the Committee, I am Frank Knapp, Jr., president, CEO and co-founder of the South Carolina Small Business Chamber of Commerce and Vice Chair of the American Sustainable Business Council.  Thank you for this opportunity to testify before you today.

The South Carolina Small Business Chamber is a statewide advocacy organization of 5000 plus members that promotes a more small-business friendly state and federal government.  

The American Sustainable Business Council founded in 2009 and its members now represent over 150,000 businesses and more than 300,000 entrepreneurs, owners, executives, investors and business professionals across the country. These diverse business organizations cover the gamut of local and state chambers of commerce, microenterprise, social enterprise, green and sustainable business groups, local living economy groups, women business leaders, economic development organizations and investor and business incubators.

I had the opportunity to read the testimony of Mr. Holman, representing the U.S. Chamber of Commerce, and Mr. Merrick, representing the National Association of the Remodeling Industry, prior to preparing my comments.  I commend them for the civility of their remarks and their focus on the Regulatory Flexibility Act as it pertains to the Environmental Protection Agency. 

Both gentlemen recognized the importance of the Regulatory Flexibility Act for insuring that regulations are reviewed to determine if they are too burdensome for small businesses and if the goal of regulations can be achieved in alternative methods.  They pointed out some instances where the business community and the EPA didn’t agree.  But they also point out successful RFA stories. 

In 2004 my South Carolina organization worked with our South Carolina Chamber and NFIB to pass our Small Business Regulatory Flexibility Act modeled after the federal law.  Last August the then chairman of the South Carolina Small Business Regulatory Review Committee told me that over the previous seven years his committee had reviewed about 300 proposed regulations and identified only ten that raised their concern.  His Committee worked with the state agency promulgating these new regulations and satisfactorily resolved the issues.

The Regulatory Flexibility Act has created an effective process to protect small businesses even if the process itself needs some attention from time to time. 

Mr. Holman correctly identifies one area where the EPA’s compliance with the RFA can be improved—more resources for the rulemaking process.   While there are voices we hear in Washington critical of the EPA and calls for cutting back or freezing the regulatory process, the reality is that it can work better for small businesses and the public if the EPA was better funded.

With more resources the EPA can do a better job of meeting the requirements of the RFA to the benefit of small business.  However more resources for the EPA would not only allow the agency to be more efficient and effective in complying with the RFA, it would also enable the organization to do a better job of protecting the public’s and environment’s health while unleashing entrepreneurial innovations and creating jobs.

Every responsible new rule that protects the health of our citizens and workers opens a door to newer and better products.  Our nation is loaded with these small business entrepreneurs just waiting to solve a problem when the demand is created. 

The Toxic Substance Control Act is so outdated and the EPA’s resources so strained that there are literally over 80,000 chemicals in the agency’s inventory but  it has been able to require testing for only about 200.  Just yesterday the state of California took the lead on investigating the health hazards of toxic flame retardant chemicals used in furniture and mattresses while not providing protection from fires.  The EPA should be examining this national health hazard but it doesn’t have the resources. 

Can the materials we sleep and sit on be non-toxic and still resist fire?  Absolutely.  Ask Barry Cik, owner of Naturepedic in Cleveland, Ohio.  Naturepedic manufactures baby and crib mattresses that provide proper support, meet government flammability requirements, provide waterproofing, seamless designs and other hygienic features all without the use of harmful chemicals or allergenic materials.  But instead of helping this innovative industry take off and making bedding healthier for families, we protect the use of carcinogenic chemicals of the past by not properly empowering the EPA with the needed legislative support and resources.

Then there is Bioamber, a bio-based chemical manufacturer. The renewable chemical industry with all its new jobs is on the launch pad.  But while it is developing technology and struggling to be profitable, it is laboring in the shadow of the old guard chemical giants churning out chemicals that avoid the inspection of an under-resourced EPA.  Reforming the Toxic Substance Control Act to produce stronger and clearer regulations on hazardous chemicals will result in hundreds of new Bioambers to grow a sustainable economy.

The public and small business owners want good regulations.  A recent national poll of small business owners conducted for the American Sustainable Business Council found that 80 percent support disclosure and regulations of toxic materials, 79 percent support ensuring clean air and water and 61 percent support moving the country towards energy efficiency and clean energy.

It is in this area that support for the EPA is vital not only to protect our health from toxic emissions and the high costs to our economy that results, but also to protect our existing small businesses from the negative effects of carbon emissions resulting in rising sea levels and more severe weather events, a very crucial issue for all and certainly our coastal areas in South Carolina.  Effective EPA regulations will drive a new energy economy that will create millions of new jobs, reduce energy costs and make our country truly energy independent.   That is the kind of economic impact that a properly supported and resourced EPA can have that will benefit all small businesses, not just the ones impacted by the RFA. 

Here is the question asked in the title of this hearing—“Is EPA Failing Small Businesses?”  The EPA’s compliance with the Regulatory Flexibility Act isn’t failing small businesses but it could do a better job of working with small businesses if, as Mr. Holman points out, it had more resources. 

Now is the moment to support the EPA to enable it to really live up to its potential to help our small businesses and our economy in promulgating fair and transparent regulations on toxic chemicals and air and water pollution.  In the same poll I mentioned above it found that 86 percent of small businesses see regulations as a necessary part of a modern market-based economy. The American Sustainable Business Council believes that we don’t have to choose between regulations to protect our health and environment and creating jobs to grow our economy. That is the old way of doing business. 

Our future prosperity is clearly tied to developing a sustainable economy through business innovation.  Businesses can take care of our people and environment and make a profit all at the same time.  And a properly supported and resourced EPA can help us get to this sustainable economy faster.

###

Small businesses do not want Obamacare killed

So Thursday is the big day.  The Supreme Court will rule on the constitutionality of the individual mandate of Obamacare. 

The critics of the healthcare reform have alleged that small business owners want the law totally repealed.  Below is a legitimate poll that disagrees.

Half of Small Business Owners Want Healthcare Law Upheld; Only One-Third Want it Overturned

Opinion polling released today shows 50 percent of small businesses believe the Supreme Court should uphold the Affordable Care Act, either as is or with only minor changes; poll finds strong support for key provisions in the law

June 14, 2012

Half of small business owners want the healthcare reform law upheld—either as is or with minor changes—while only one-third want the Supreme Court to overturn it, according to opinion polling released today by Small Business Majority. However, after learning more about the law, a clear majority (56 percent) want it kept intact with, at most, only minor changes.

The Supreme Court is expected to hand down its decision any day in the case against the Affordable Care Act, filed by the National Federation of Independent Business (NFIB) and state attorneys general. The polling of 800 small business owners in eight states (Florida, Illinois, Louisiana, Michigan, Missouri, New York, Texas and Virginia) found that once small business owners learn more about the law, their support for keeping it intact—either as is or with minor changes—rises to 56 percent, while opposition falls to just 28 percent.

“Contrary to popular belief, small business owners do not want the high court to throw out the Affordable Care Act,” said John Arensmeyer, Founder & CEO of Small Business Majority. “They see this law as helping everyone have coverage and bringing down healthcare costs—something that has been one of their top concerns for years. We hope Supreme Court justices understand how important this law is to small businesses who need relief from high healthcare costs.”

Key provisions of the law also have strong small business support, including one of the most crucial components for small businesses—the health insurance exchanges. The Affordable Care Act calls for exchanges—online marketplaces where small businesses can pool their buying power when purchasing coverage—to be up and running in every state by 2014. Sixty-six percent of owners say they would use their state exchange or consider using it to provide their employees with health benefits. The majority of entrepreneurs find potential features of the exchange very appealing, including employee choice (76 percent), the exchange educating employees about plans (74 percent), and the exchange providing plans that offer prevention and wellness programs (77 percent). Additionally, a strong majority (66 percent) of small businesses support their state applying for federal funds to set one up.

“Small businesses have been at the center of this lawsuit, and everything I hear is that they want it overturned. That’s not true for me, and it obviously isn’t true for the majority of my fellow entrepreneurs,” said Mark Hodesh, owner of Downtown Home and Garden in Ann Arbor, Mich. “I sincerely hope our Supreme Court justices listen to what real small businesses are saying about this law, not what a select few are saying for us, and that they uphold it. Going back to the status quo would be unthinkable.”

Other key findings from the poll:

• 55 percent of small businesses who support upholding the law believe it should be kept because we need to make sure everyone has health coverage; more than one-third say it’s because it will make it easier to purchase insurance
• 72 percent support the medical loss ratio requirement, where insurers are required to spend at least 80 percent of premiums on healthcare claims and quality improvement efforts
• 65 percent support “rate review,” where state regulators are allowed to review and approve or reject insurers’ increases they deem excessive
• 78 percent support prohibiting insurers from denying coverage based on preexisting conditions
• 69 percent support preventing insurance companies from basing insurance rates on health status; 73 percent support preventing insurers from charging women higher rates than men
• 69 percent favor allowing young people up to age 26 to stay on their parents’ plans
• 55 percent of small business owners provide insurance to at least some of their employees, but of those who don’t offer it, 70 percent say it’s because they can’t afford it
• Of small businesses who do offer benefits, respondents said the two most compelling reasons to offer were that they had a responsibility to offer (47 percent) and because it helps retain good employees (47 percent)
• Of the small businesses who qualify for a tax credit under the law, but were not taking advantage of it, nearly half (46 percent) said they weren’t using it because they were not aware it existed
• Nearly half of all small businesses (49 percent) said they’d be more likely to offer insurance if they qualified for a tax credit and the same percentage said they’d be more likely to purchase insurance through an exchange if they could receive a tax credit
• 51 percent of small businesses are interested in establishing a workplace wellness program

To read the full report go online to http://www.smallbusinessmajority.org/small-business-research/healthcare/index.php

A Time for Bold Action to Build a Sustainable Economy

The Huffington Post   
6/24/2012

By Lisa P. Jackson--chief administrator of the Environmental Protection Agency
      David Levine--co-founder and CEO of the American Sustainable Business Council

For many years, we have been told that we have to choose between growing the economy and protecting the environment -- especially as we worked to recover from the sharp downturn of 2008. But this old way of thinking has been turned on its head in the 21st century, when our prosperity is clearly linked to environmental health and green innovation. Government entities like the EPA and industry leaders like the American Sustainable Business Council are showing that clean air, a safe water supply, and healthy places to live are key ingredients to economic growth. Today -- and in the years to come -- our economy is going to grow precisely because we are taking care of our environment, and the leading job creators are going to be companies that specialize in sustainability and the green economy.

This is a time for economic growth that taps the unmatched capacity for innovation and ingenuity in American businesses, and mobilizes entrepreneurs to foster an economy that's built to last. The 2012 State of Green Business Report found that "environmental sustainability efforts continue to grow," thanks to companies that are utilizing smart, cutting-edge business practices that benefit people and the planet, all while making a healthy profit.

The American Sustainable Business Council and its members now represent over 150,000 businesses across the country. They and many other businesses in all sectors are integrating energy efficiency, emissions reductions, safer chemicals, water conservation and other sustainability measures into their business decisions. Each day, we see more exciting new technologies that make cleaner, safer and more affordable products for consumers, while boosting profits for businesses, and attracting increasing interest from investors with $3.3 trillion privately invested worldwide since 2007.

Building a sustainable economy can also put U.S. businesses at the forefront of a growing, global market. By conservative estimates, in 2010 U.S. environmental technology firms generated $312 billion in revenue and supported 1.7 million American jobs -- including 61,000 small businesses. Worldwide, environmental technology is an $800 billion industry. And in the coming years, experts foresee significant 7 percent growth as developing countries begin to more seriously address environmental and social concerns for the long term.

To seize those opportunities, we will be highlighting American ingenuity, innovation and industry at Rio+20 in Brazil this week. The federal government and private sector sustainability leaders are connecting experts -- from business, finance, education, health and more -- with people and organizations eager to build cleaner and greener world economies.

The EPA and our federal government representatives will be working with international and private sector partners to help catalyze local investments in sustainable development. By sharing our expertise and building partnerships, we can make progress on everything from clean water to deforestation to greenhouse gas reduction.

At the same time, American businesses at Rio+20 are seeking opportunities to reach new markets around the world, and ways to sell products that will increase efficiency, save money, and promote economic growth at home and abroad. We have an opportunity to make our technology and products part of sustainable solutions all over the world.

Developing a green economy will reduce our dependence on foreign oil, make our communities healthier, and ensure that our Main Street businesses are more resilient. An economy that not only manages negative social and environmental impacts but encourages "triple bottom line" results -- for people, the planet and profits -- is an economy that's poised to succeed. We will reduce the risks of costly health problems like asthma, cancer and learning disabilities. Healthy, vibrant communities will attract new homebuyers and tourists. And innovative American companies will continue to bring solutions to consumers around the world.

http://www.huffingtonpost.com/lisa-p-jackson/sustainable-economy_b_1622219.html

Obamacare delivers for South Carolina citizens and businesses once again

One important part of Obamacare passed in 2010 was a thing called the medical loss ratio.  Essentially it says that if at least 80% of the health insurance premiums collected by an insurance company do not go to paying for medical services then the policyholder is due a refund. 

As the story below indicates, South Carolinians can expect $19.6 million in premium refunds from their health inurance company.  Thanks to SCBIZNews.com for reporting this story. It appears that no one else did (except for me on my radio show yesterday).

But don’t be looking for your refund on overpayments of premiums if the National Federation of Independent Business succeeds in having the Supreme Court declare all of the healthcare reform bill unconstitutional.  If that happens next week, the insurance companies will just keep your money.

$19.6M in health insurance refunds due to S.C. consumers

The bulk of the refunds, about $15.3 million, will be going to 105,043 individual policyholders for an average of $227, the federal Department of Health and Human Services said. Another $4.3 million will go to small businesses that have group health plans.

By Chuck Crumbo
ccrumbo@scbiznews.com
Published June 21, 2012

About $19.6 million worth of refunds on health insurance premiums will be paid to S.C. individual policyholders and companies that provide the benefit, the federal Department of Health and Human Services announced today.

The refunds are being issued to meet the spending threshold established by the health care law, the agency said. Called the medical loss ratio, the threshold requires health insurers to spend at least 80% of premium dollars collected from individual policyholders and small businesses of two to 50 employees on health care, rather than business expenses. Carriers who write policies for large employers — those with 51 or more workers — must spend 85% of premiums on health care. In all cases, the insurance companies will be required to refund consumers.

In South Carolina, refunds will total $19,630,152 and will benefit 251,632 consumers, according to the agency. The average refund will be $131.

The bulk of the refunds, about $15.3 million, will be going to 105,043 individual policyholders for an average of $227, the agency said.

Another $4.3 million will be refunded to small businesses that have group health plans. The average refund for the group, which totals 145,401 employees, is $53.

Another $54,594 will go to large employers, the agency said. The group has 1,188 enrollees and the average refund will be $85, the agency said.

Fewer companies are in the large group market because most large employers are self-insured.

The refunds are to be mailed by Aug. 1, officials said.

An executive of BlueCross BlueShield of South Carolina, which has about 45% of the state’s share of health policies — individual and group — did not offer an overall total of refunds for consumers, but said refunds would average about $200.

Actual refund amounts will depend on terms of the plans and the length of time someone has been enrolled in the plan, said Jim Deyling, president of BlueCross BlueShield of South Carolina.

Humana, which is ranked among the state’s top five health insurance carriers, did not have a dollar amount on its rebates.

“I can tell you the company is preparing to issue rebates to policyholders (generally employer groups or members enrolled in individual Humana medical plans), where appropriate, by the Aug. 1 deadline,” said spokeswoman Nancy Hanewinckel.

For those enrolled in group plans, the refunds will be sent to the employer, Deyling said. It will be up to the employer to decide what to do with the money.

BlueCross BlueShield of S.C. serves about 10,000 firms in the small group market that will be eligible for the refund. None of the company’s large group clients will receive a refund because their medical costs exceeded 80% of premiums collected.

BlueCross BlueShield of S.C. has about 60,000 individual policyholders, he added.

According to the federal agency, the employer can:

• Send a check for the full amount to the employee.
• Provide a lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit or debit card.
• Offer a direct reduction in future premiums.

Before people run out and spend their rebates, Deyling said the issue could be moot if the U.S. Supreme Court throws out the health care law.

“If the federal law is struck down in total it’s as if the law didn’t exist,” Deyling said, noting that the court is expected to rule soon on the law. BlueCross BlueShield of S.C. then would have to decide what to do with the refund money.

“If they strike down the law then the rebates are null and void,” Deyling said. “What we are planning on doing is to take hard look at what we would do with regards to rebate. We could take the rebates and decide to reinvest them. Eventually, what’s going to drive our thinking on what action we can take is what’s in the best interest of all of our customers.”

For now, the company is “operating under the assumption that the law stays in place,” Deyling said.

http://www.charlestonbusiness.com/news/44289-19-6m-in-health-insurance-refunds-due-to-s-c-consumers

Support clean energy

Take action today by clicking here.

All recent surveys of small business owners have shown that they support the Environmental Protection Agency’s proposed Carbon Pollution Rules for new power plants that will help propel our country into the renewable, clean energy economy. These rules will also reduce carbon pollution which is driving climate change resulting in rising sea levels and more severe weather events that threaten our small business tourism economy.

Unfortunately, defenders of the coal industry are attacking the proposed EPA rules with false scare tactics of increased costs for electricity.  Here in South Carolina we are not building new coal power plants and instead our increased electricity costs are due to the two new nuclear plants being built in Fairfield County

It is clear that small businesses need to stand up and support the EPA’s proposed Carbon Pollution rules.  Please send a letter in support of the EPA’s proposal during the comment period that ends June 25^th.

Take action today by clicking here.

This small business wants Obama’s health insurance law

Tomorrow might be the day the Supreme Court rules on the constitutionality of the Affordable Care Act--Obamacare. Then again it might be on Monday or next Wednesday. We're not sure but when the decision is revealed, the media will go crazy.

So until that happens, listen to Louisa McQueeney, the CFO of Palm Beach Groves, an orange shipping business in Lantana, Florida.

The Miami Herald
Jun. 18, 2012

This small business wants Obama’s health insurance law

BY LOUISA MCQUEENEY
louisamcq@gmail.com

Running a small business with four employees, I’ve got a lot hanging in the balance as the Supreme Court deliberates on the healthcare law. The legal challenge to the law was launched here in Florida with a small business lobby group as a plaintiff in the case. But if you’re thinking that means small business people like me want to see the law rolled back, think again.

The simple fact is, the healthcare law is saving our business serious money and saving our healthcare benefits. Rolling it back would be a real blow — it could spell the end of our healthcare benefits, and push more small business employees into bankruptcy.

I’ve spent the past 12 years at Palm Beach Groves, a small orange shipping business in South Florida. As general manager, I’ve seen our health insurance premiums increase by double-digits every year for a decade. Renewal season has always been a nerve-wracking time, as the decision to continue providing health coverage — and how much of the cost to shift onto employees — gets harder every year. Our staff hasn’t seen a raise in more than seven years because any extra income goes to pay for our rising insurance premiums.

Then along came “Obamacare.”

Last November, our health insurance agent called with our renewal: after annual increases of 12 percent, 22 percent, and even 32 percent, our premiums in 2012 would increase by a grand total of . . . 0.2 percent. Zero point two — ie, flat.

I was floored. And this flat renewal came with exactly the same plan — no dumbing down the coverage, no increase in our deductibles, everything was the same.

Then, at tax time, we qualified for the health law’s small business tax credit. This credit cut our total healthcare costs by about 10 percent, or $7,400, in 2011.

And we’re not through yet. I’m curious to see how the Affordable Care Act’s 80/20 value for premiums rule will affect our group. We might even get a rebate check from our insurance company this summer if it failed to spend the required 80 percent of premiums on actual healthcare costs. For the first time in my 12 years in this business, the healthcare picture is finally looking up for Palm Beach Groves.

Despite the benefits small businesses out in the real world are seeing from the law, the calls for the repeal of “ObamaCare” continue on. Opponents of the law say they want to replace it with something else. But the “alternatives” they offer are all talking points, no substance.

“Let health insurance companies sell across state lines.” Sounds nice in theory, until you learn that this is code for giving insurers license to sell any kind of junk insurance that likely won’t cover what you need. Besides, our neighbors in Georgia tried this last year. Not a single out-of-state insurance company showed up to the party.

Or “Health Savings Accounts,” which are supposed to make us “better,” “more informed,” and “more responsible” consumers of healthcare. Try calling a doctor’s office and ask for the price of a biopsy, or a fix for a broken leg or by-pass surgery. Good luck with that one.

We have experience with HSAs:

A few years ago, our company was forced into a high deductible HSA plan by our insurer. This meant paying the first $5,000 of healthcare costs out of pocket and then paying a high monthly premium on top of that before the health insurance company paid a dime.

That’s not a solution. It’s more of the same old squeeze.

The Affordable Care Act is working for our business. We now have free preventive well-care visits — a smart investment in our health. My daughter can stay on our plan until she turns 26. Kids can no longer be excluded because they have a pre-existing condition, and in 2014 none of us can be denied insurance or discriminated against because of pre-existing conditions.

Why would anyone want to take all this away?

The justices of the Supreme Court — who enjoy an array of healthcare choices as federal employees — hold our fate in their hands. If the court cares about small businesses — not business lobbyists, but real small businesses like ours — it should uphold the healthcare law.

We literally can’t afford to go back.

 http://www.miamiherald.com/2012/06/18/v-print/2856095/this-small-business-wants-obamas.html#storylink=cpy#storylink=cpy

Crowdfunding can provide new financing option for women and minority firms

WEBINAR June 21, 2012

25% Discount for Small Business Chamber members

In April, President Obama signed the Jumpstart Our Business Startups Act. A provision in the law establishing crowdfunding as a mechanism to spur start-ups has the potential to significantly help minority firms.

A study conducted by the Commerce Department concluded that women- and minority-owned firms “experience higher loan denial probabilities and pay higher interest rates than white-owned businesses even after controlling for differences in credit-worthiness, and other factors.” The failure rate of minority businesses is higher than that of nonminority firms, according to the Commerce Department’s Minority Business Development Agency, partly because of lack of capital.

But crowdfunding can potentially level the playing field, opening new sources of business capital and revenue for women- and minority-owned firms.

What is crowdfunding and how can it work to help your business in the future will be the subject of a webinar on June 21^st conducted by William Michael Cunningham of Creative Investment Research.  Mr. Cunningham is a social investment advisor, owner of MinorityFinance.com and the author of the forthcoming book “The JOBS Act: Crowdfunding for Small Businesses and Startups.”

When:  Thursday June 21, 2012
3:30 to 4:30 PM (ET)

Cost:  $75 for SCSBCC members / $100 for non-members

REGISTER HERE

Partisan Divide in D.C.? Not Over the S.B.A.

The New York Times
June 15, 2012

By ROBB MANDELBAUM

 

How small-business issues are shaping politics and policy.

In this election season, the leitmotif to the story taking shape in Washington is that the partisan divide is vast and growing vaster — if last year it was difficult to pass bills that were once routine, now it has become impossible. But there appears to be at least one exception to the emerging rule: the Small Business Administration. Last week, the Republican-led House Appropriations Committee unveiled its bill (pdf) to finance the S.B.A. and several other government agencies, and what is most notable about the four pages dealing with the S.B.A. is the prospect for comity, not conflict.

In all, House Republicans have proposed appropriating $1.16 billion to the S.B.A. — $989 million when disaster funding is excluded — about $40 million more than the Obama administration has sought and $237 million more than the agency received this year. In its broad outlines, the funding proposal from the House is remarkably similar to the administration’s request. The main difference is that the House finances subsidies that would permit the S.B.A. to guarantee more lending in its main loan programs than the administration would. The increase may not have a meaningful impact on lending, though, since these figures are ceilings, and it’s not clear that lending will reach them. (If the first eight months of the 2012 fiscal year are indicative, the agency won’t come close to bumping up against the 2013 ceilings.) More meaningfully, the House would direct $112.5 million to small business development centers, as much as the centers received last year and $11.5 million more than the administration requested.

All of this is quite a turnabout from a few years ago, when the Bush administration struck many observers as indifferent at best to the S.B.A. and the Republican-led Congress was parsimonious in funding it. Perhaps most strikingly, House Republicans have agreed to support the S.B.A.’s microloan program at the same level the Democratic administration requested — whereas the Bush White House sought to eliminate microlending altogether. However, as we reported when the White House made its request public back in February, the proposal is less than the program received in 2011 or 2012. Indeed, while the S.B.A. would technically get more money under the budgets proposed by the White House and the House, most of that increase goes to subsidizing loan-making, which has become more expensive in recent years as the amount of risk has increased.

On Thursday, the Senate Appropriations Committee produced its own bill financing the S.B.A. (among other agencies) and largely followed the same template, proposing $1.12 billion. That is less than the House bill, but it directs more money to microlending and to the counseling programs than either the House proposes or the administration wants. At the same time, it pares back the House’s loan subsidy (and corresponding lending limits) to the administration’s request.

Elsewhere in its bill, the House is not nearly as conciliatory toward the Obama administration and the Senate. For example, it denied the White House additional money for the Internal Revenue Service to carry out provisions of the Affordable Care Act, and it would prohibit the administration from transferring money to the I.R.S. for that purpose. This could conceivably make it harder for the I.R.S. to process the health care tax credit for small businesses. But an aide to the House Appropriations Committee said that the bill does not prevent the agency from using the money appropriated to it to carry out the health care overhaul. “The I.R.S. would not be prohibited from implementing the tax credit,” the aide said. The agency would have to choose its priorities from an expanded portfolio of responsibilities.

The Senate bill provides the I.R.S. with about $700 million more than the House bill does.

http://boss.blogs.nytimes.com/2012/06/15/partisan-divide-in-d-c-not-over-the-s-b-a/

Congressional field hearing yields real small business issues

South Carolina Congressman Mick Mulvaney held a field hearing in Rock Hill, SC, yesterday titled “Caught Up in Red Tape: The Impact of Federal Regulations on Small Businesses and Contractors”.  Mr. Mulvaney is the Chairman of the Small Business Subcommittee on Contracting and Workforce.
I wasn’t able to attend the meeting but did have a long conversation with the Rock Hill Herald reporter, Ms. Jamie Self, who covered the event.

I expected the hearing would turn into a showcase for anti-regulation mantra we hear so often from politicians.  To my surprise, I was told that no one testified that regulations were killing jobs.  Instead the views expressed were about big businesses having an advantage over small businesses getting government contracts, lack of knowledge about the Affordable Care Act benefits for small businesses and the lack of customers—all very real issues.

So congratulations to Mr. Mulvaney for not trying to stack the deck with anti-regulation rhetoric testimony.  By simply opening up the forum to all comers, he heard real concerns from small business owners—not political talking points.

And maybe it was this lack of negative comments about regulations that inspired Mr. Mulvaney before the hearing ended to say that regulations can be good.  According to the news story:

“Mulvaney emphasized that not all regulations are ‘bad,’ including those regulating safety in the workplace and in food and drugs and those that ‘keep our financial markets transparent.’”

Senator Lindsey Graham--taxes and energy

I met with two of South Carolina Senator Lindsey Graham’s staffers yesterday to talk about taxes and revenue issues.  Some of the conversation was about the Senator’s recent remarks that increased revenue needed to be on the table in negotiations with Senator Democrats regarding the budget and debt. 

Senator Graham’s willingness to step outside the GOP talking points to actually try to solve problems is always a source of hope for many in South Carolina.  But the Graham staff knows that it also generates a lot of negative feedback from the “no compromise” conservative voters back home.

And that is exactly what the staff expected after Senator Graham’s comments on being open to increased revenue for the federal budget. 

But apparently it didn’t happen this time, at least not at the D.C. office.  Surprisingly, I was told, the calls were somewhat supportive.  However Grover Norquist, father of the anti-tax pledge, does have an upcoming meeting with the Senator. 

At my meeting I also suggested that Senator Graham put as much effort on pursuing wind, solar and bio-mass energy as he is on offshore drilling for oil.  On Monday of this week, Senator Graham, Governor Haley, and Representatives Jeff Duncan and Joe Wilson held a press conference in Columbia to announce new federal legislation to promote offshore drilling for oil and gas.

My friend, Harry Miley produced an economic impact study claiming that opening ocean drilling beyond 10 miles of the coast would create 7,485 jobs for the state.  But most of these jobs would not be directly in the oil business.  They are labeled “Indirect Effect” and “Induced Effect” jobs.  Plus we’d have to wait until 2030 (2030???) to see them all.  Of course, the projections are totally based on the assumption that oil companies actually want to explore the waters off the coast of South Carolina.  There is no evidence of any such interest.

What we should be asking ourselves is what would be the economic impact if instead of oil and gas the state made a big push for developing wind farms off our coast and building the infrastructure needed to get the electricity into the grid.  I am willing to bet that the economic impact of such an effort would far out perform drilling for oil and gas with none of potential negative impact to tourism.

That was the essence of my statement given to the media at the Monday press conference.  The Associated Press story by Susanne Schafer (below), who used my comments, was picked up by CNBC, CBS and Bloomberg Business Week. 

It is time for all the politicians who say they are for an “all of the above” strategy for our energy independence to actually start making concrete proposals for alternative, renewable energy.  Simply saying they support innovative energy is no longer acceptable.

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Haley, Graham, Duncan promote offshore drilling

By SUSANNE M. SCHAFER - Associated Press
June 12, 2012

COLUMBIA, S.C. — Three top South Carolina Republicans came together Monday to support federal legislation that would allow drilling of gas and oil off South Carolina's coast, arguing the state's need for jobs and income outweigh potential problems.

"There is a risk in everything you do, but the biggest risk is to do nothing," said U.S. Sen. Lindsey Graham. He said his plan would protect the environment and bar drilling in a 10-mile buffer zone off the coast.

The governor and the S.C. Legislature would determine whether oil and gas exploration could occur within the next 10-to-50 mile stretch, while all areas 50 to 100 miles offshore would be open to drilling leases, Graham said.

Gov. Nikki Haley and U.S. Rep. Jeff Duncan joined Graham at a news conference, where all said they hope the legislation in the U.S. Senate would lead the nation to energy independence and bring thousands of jobs and millions of dollars in revenue to state and federal coffers. Graham was introducing it in the Senate Monday.

"Offshore drilling is where we need to be," said Haley. "This will bring so many more jobs."

The state's jobless rate was 8.8 percent in April.

Haley said those who might protest against such drilling have valid concerns, but, she added, "We're not compromising tourism to do this."

Duncan said he plans to introduce similar legislation in the House. "This legislation will help our state lead the way in energy innovation," said the congressman from Laurens.

Graham faulted President Barack Obama's administration for standing in the way of oil and gas exploration, and said the situation could change with the November elections.

"If Gov. (Mitt) Romney becomes President Romney, this will happen," Graham said. Virginia was slated to be the first state on the East Coast to offer oil and gas drilling, but that plan was shelved by the Obama administration last year after the massive 2010 BP oil spill in the Gulf of Mexico.

In recent weeks, the federal government has been holding hearings along the Atlantic Coast to gather opinions and discuss the potential environmental impact of offshore drilling.

Representatives of the several business groups such as the state Chamber of Commerce, the Greater Columbia Chamber of Commerce and the Palmetto Agribusiness Council also attended the session to show their support for Graham's plan. The Council released a study done for them by a local consulting firm which said an offshore drilling industry could spawn 7,500 jobs by 2030 and about $87.5 million annually in sales, income and royalty taxes.

South Carolina tourism is a $15 billion industry, and the latest figures for 2010 showed that 1 in 10 jobs, or more than 170,000, are tied to tourism. The industry also produces about $1.2 billion in state and local tax revenue.

Environmental groups have argued that alternative fuel choices are preferable to offshore drilling.

Frank Knapp, Jr., president of the South Carolina Small Business Chamber of Commerce and vice chairman of the American Sustainable Business Council, said in a statement released Monday that a comprehensive energy plan would be preferable to seeking fossil fuels offshore.

"It is important for our elected officials not to settle for a few jobs for South Carolina associated with drilling, digging or piping when thousands of good jobs are waiting to be created in the areas of wind, solar and bio fuels," Knapp said.

http://www.thestate.com/2012/06/11/2311183/haley-graham-duncan-to-discuss.html#storylink=misearch

More from the Summit for a Sustainable Economy

The American Sustainable Business Council had a very good Summit for a Sustainable Economy at the White House yesterday.  In addition to the morning's panel on sustainable economic growth that I moderated, I also facilitated a breakout group on small business taxes and revenue in the afternoon with a representative from the White House National Economic Council and the Small Business Administration. These two ladies might have wished that they had not been at the meeting because of the grilling they received.

Today I am leading a meeting at the Security Exchange Commission to discuss crowdfunding that the SEC is responsible for writing the regulations.  Later in the afternoon, I and some other ASBC folks will be meeting with the Congressional offices of Senators Jeff Merkley, Thad Cochran and Lindsey Graham.

I will be back in Columbia late tonight. 

In DC Today for Sustainability Summit

I'm in DC today for the American Sustainable Business Council Summit for a Sustainable Economy at the White House.  This morning I am moderating a panel on sustainable economic growth.  The panel participants are Gary Guzy, Deputy Chair for the Office on Environmental Quality (the office in the White House that oversees all environmental and energy policy across the executive branch); Don Graves, Deputy Assistant Secretary for Small Business in the U.S. Treasury Department; Richard Kaufman, Senior Advisor on clean energy and energy efficiency to Energy Secretary Chu; Gary Hirshberg, Chairman of Stonyfield Farm (the largest organic yogurt company in the world); Roger Smith, CEO of American Income Life (one of the largest in home providers of supplemental insurance to working families).

Real Obamacare small business story

Today’s blog finishes up a week of my comments about Obamacare.  To end the week, I’m featuring one small business owner who shares my appreciation of the healthcare reform and what it has done and will do for small businesses. 

Unlike the small business that contacted me yesterday asking to be removed from the S.C. Small Business Chamber’s membership “due to the positions taken by the organization”, Betsy Burton writes about how the health insurance tax credits under Obamacare stopped her from closing her bookstore. 

As we wait the Supreme Court’s ruling possibly as early as this coming Monday, we should be listening to real life small business owners like Ms. Burton who have actual experience with Obamacare.

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Bloomberg Businessweek
June 6, 2012

This Bookstore Owner Isn't Bashing Health-Care Tax Credits

By Betsy Burton

The airwaves have been buzzing lately over whether the small business health insurance tax credit is all it’s cracked up to be. But here’s a question: When is free money not all it’s cracked up to be? Maybe when that money is made possible by a health-care reform law that some politicos are waging an ideological war against.

Encompassing many measures that positively affect millions of people, the Affordable Care Act helps small business owners like me better afford health coverage for our families and our employees. As the mother of a son who needs ongoing medical care due to a preexisting condition, and as an entrepreneur who takes pride in offering employer-sponsored health insurance to the eight employees who qualify and to their families, I am doubly thankful for the law.

By taking advantage of the reform law’s health insurance tax credit, my Salt Lake City business saved $11,000 on our premium contributions in 2010 and slightly less in 2011 since two insured employees moved away. The savings afforded by the tax credit both years has allowed me to continue offering benefits to deserving employees who’ve been with me for years at the King’s English Bookshop. We’ve recently added an employee and expect our tax credit to grow again—especially in 2014, when it increases to 50 percent.

Just a few years ago, our health-care premiums grew so high (well more than $70,000 a year, an amount that increased our payroll to an unsustainable 30 percent of our gross) that I seriously considered closing up shop. Bookstores are at a competitive disadvantage with the Internet right now, and after 35 years in business it would have been a shame if we were forced out the way so many booksellers already have been. Our health-care savings have put those worries on hold. We have other worries, of course, Internet sales chief among them, but with the support of our community and our staff, an active event calendar (authors, who support independent booksellers, visit from all over the country), and our growing technological abilities, we are surviving.

That’s why I’m so surprised—and disappointed—by all the negativity surrounding the tax credit. The economy is still on shaky ground, and I know I’m not the only one struggling to turn a profit. Because I fit so exactly into the parameters of the act, I qualified for more money than some others are getting back, but I still believe any business owner would welcome extra cash. There’s also been a lot of hubbub over the complexity of claiming the credit, but our accountant told me she didn’t have trouble with it.

In fact, it was through my accountant that I first heard about this opportunity. Like any thorough professional working to help businesses and other customers save money, she checks frequently for new developments in the tax world. Last year, the health-care credit was one of them. Able to calculate our savings without difficulty, she charged no extra fee for doing so. Tax laws change every year, and as far as I’m concerned, it’s an accountant’s job to keep up with those changes. The tax credit is no different.

Except for the fact that it carries political weight—right now, especially. With the Supreme Court set to decide the Affordable Care Act’s fate this month, opponents are using every opportunity to aim at its moving parts. There’s so much misinformation circulating about the legislation in general, and unfortunately, some of it is even coming from people who claim to represent the interests of small business.

But I’m a real small business owner, and I can tell you that one of my biggest interests is maintaining a healthy bottom line. The Affordable Care Act is helping me do that. By spreading the word, I hope I can encourage even more entrepreneurs to find out if they’re eligible for the kind of relief I received. I’m a member of the advocacy group Small Business Majority, and I saw a January 2011 survey it commissioned that showed more than half of the 619 small business owners who responded had never even heard of the health-care tax credit. Considering this, along with efforts by some of the law’s opponents to discourage small employers from looking into its benefits, the lack of uptake being blown up in the media isn’t entirely surprising.

Again, I strongly encourage all my fellow small employers to look into the credit—or at least ask their accountants to. It’s not a waste of time. Take my word for it as an entrepreneur with more than three decades of experience who puts business before politics.

http://mobile.businessweek.com/articles/2012-06-06/this-bookstore-owner-isnt-bashing-healthcare-tax-credits

Obamcare critics have nothing new to offer

Let’s continue with the healthcare reform theme I’ve been addressing all week.

On Tuesday, U.S. Senator John Barrasso (R-Wyo.) had an opinion piece in The Hill in which he listed four important principles of healthcare reform GOP-style.

First, lower the costs of healthcare.

Duh.  While very little of Obamacare has kicked in to address lowering the cost of healthcare, reports do indicate that the past big increases in health care spending have almost stopped.   

Second, put patients and providers back in charge.

Here Senator Barrasso mentions several ideas mainly to make health insurance more affordable for individuals through premium tax breaks and more competition.  Both are worthy concepts.  Obamacare will increase competition through each state’s health insurance exchanges where most individuals will get their health insurance come 2014, much like they do in Massachusetts (another part of Mitt Romney’s successful healthcare reform).  Obamacare will also have health insurance premium tax breaks for individuals on a sliding scale. 

However, Senator Barrasso includes a failed idea under his second point.  He calls for Americans to be able to purchase health insurance across state lines.  Georgia passed legislation to do just that last year.  No insurance company in that state is offering such policies.

Third, take reasonable steps to reduce the number of uninsured Americans.

Here Senator Barrasso has no new ideas.  Instead he talks about how bad Medicaid is, that many doctors won’t accept Medicaid patients and how Medicaid “doesn’t provide what the patient calls care:”

Shame on Dr. Barrasso.  He has been a physician for 25 years.  He should know better than to condemn the Medicaid program and the quality of healthcare provided by doctors who accept the payments.  The Medicaid program has been a success in providing access to the poor and has financially benefitted many healthcare providers who would otherwise not be compensated for services to the needy.

Oh, Senator Barrasso does offer exactly one idea to reduce the number of uninsured—allow small businesses to form a pool to purchase health insurance for their employees.  This pooling idea has been around for decades and has in most cases failed for a number of reasons.  Here in South Carolina the General Assembly passed legislation in 2008 to make it very easy for small businesses to form such health insurance pools.  Not one has been successfully established. 

Obamacare does include funding to establish state health insurance CO-OPS for individuals and small businesses.   These would be true cooperatives not health insurance buying pools.   Whether these CO-OPS will eventually be successful we don’t know.  But because they are being provided with grants to get them running they have a much better chance than Senator Barrasso’s old idea. 

Fourth, tort reform.

Senator Barrasso says that doctors are being forced to “practice defensive medicine by ordering expensive and unnecessary tests.”  The idea is that this increases healthcare costs and thus drives up health insurance premiums.  So if we simply put low caps on how much a patient can receive from a medical malpractice jury verdict (tort reform), then insurance companies will lower the doctors liability premiums and that will reduce healthcare costs for everyone.

Sounds good.  But it doesn’t work.  Texas passed such legislation in 2003.  Insurance companies did reduce their costs and there was an initial reduction in malpractice insurance for doctors.  But health insurance premiums in Texas weren’t reduced.  So the insurance companies made out like bandits, the doctors saved a little, injured patients were not compensated properly; but there was nothing for the rest of Texas that has health insurance premiums higher than the nation’s average.

Senator Barrasso and the detractors of Obamacare have nothing new to offer for healthcare reform if the Supreme Court rules the law unconstitutional…just more failed ideas and partisan complaining.