Refunds that almost didn't happen

By today all health insurance companies were to have notified individual policy holders and small businesses about premium refunds or credits they were due thanks to Obamacare.  In my July 18^th blog I talked about these refunds and how they could finally demonstrate to the public that healthcare reform was working to make health insurance more affordable.

Obamacare required insurance companies to spend at least 80% of premiums on medical services.  The other 20% could go toward all forms of administration including advertising, profits, taxes and CEO salaries.  If the companies didn’t reach the 80% threshold, they had to give back the difference to the policy holders thus giving consumers more bang for the health insurance premium buck.

Over 105 thousand South Carolinians will get refunds totaling $15.3 million and scores of small businesses will get a total of $4.3 million. 

Nationally 12.8 million Americans will receive over $1.1 billion in health insurance refunds.

But South Carolinians almost didn’t see any refunds. 

Back on July 15, 2010, the South Carolina Department of Insurance (DOI) asked the U.S. Department of Health & Human Services (HSS) for a waiver from the 80/20 rule.  Without any public input (but plenty from insurance companies such as Blue Cross Blue Shield of South Carolina) our Commissioner of Insurance argued that requiring carriers to spend 80% of individual policy holders’ premium dollars on medical care would be too difficult for insurance companies to comply with.  As a result, he said, some of our smaller carriers serving South Carolina might leave the state thus reducing consumer choices.  Our DOI suggested that for South Carolina the rule should be 65/35 for 2011. 

Seven states actually did get a waiver on the 80/20 rule out of the 15 that tried.  On behalf of the South Carolina Small Business Chamber I sent a letter to HHS opposing our Department of Insurance request. 

Fortunately our state’s request for the waiver was not granted.  The dire consequences that our DOI warned might happen didn’t happen.  And the biggest hunk of the $19.6 million refunds to South Carolinians will most likely come from the state’s biggest insurance company that was whispering “waiver” in our insurance commissioner’s ear, Blue Cross Blue Shield.

My adventure with Mick and little Billy

A “cancerous worm”?  That is what an infamous blogger called me back on June 27th, the day I testified before the U.S. House Small Business Committee.

Will Folks, or little "Billy" as they called him in the many high schools he attended, has the most well-read blog in South Carolina, FitsNews.com.  But the former spokesman for the disgraced South Carolina "hiking the Appalachian Trail" Mark Sanford achieves his acclaim not because of persuasive public policy commentary or insightful political analysis but rather due to his eagerness to wittily degrade others often based on half-truths or no truth at all.

Get on little Billy's bad side and he's relentless.  But FitsNews is not just about personal vendettas.  It is well-understood that little Billy is a paid hit man for his clients. But his skewering of his targets with embarrassing interpretations of current events or the occasional scoops always makes for good political entertainment.

So why the "cancerous worm" characterization?

A little history might be helpful.  The South Carolina Small Business Chamber of Commerce and Governor Sanford rather quickly became adversaries on numerous issues in his first term.  Mr. Sanford talked a good small-business game but his administration, including little Billy (whose prior work experience was playing in a local band), was really only interested in talk.

When little Billy left the Sanford administration he, of course, parlayed his insider status into a public relations career and the launching of FitsNews.com.  But the notoriously personality-challenged entrepreneur raised his misogynous profile by pleading guilty to physically abusing his then lobbyist girlfriend.  Needless to say that when I subsequently contracted with his ex for lobbying services and little Billy was court-ordered to refrain from writing about her or the Small Business Chamber as her employer, his resentment of me and my organization was forever set in stone.

But "cancerous worm"? 

In the analogy he applauds Representative Mick Mulvaney for "pinning" me to the table and "dissecting" me following my testimony (I guess to expose my cancerous innards).  A little history here is relevant. 

I was good friends with Congressman John Spratt, one of South Carolina’s most respected, dedicated and effective public servant the state has produced but who was defeated by Mr. Mulvaney in 2010.  I had been honored to have Mr. Spratt on my radio show as a regular guest up until that time.  But even before that, Mr. Mulvaney and the Small Business Chamber had locked horns on a state procurement code bill that was intended to help our small businesses receive more of our taxpayer contract dollars.  Mr. Mulvaney singlehandedly stopped the legislation in 2008 but failed to do so in 2009—a fact that I informed his would-be constituents of before the 2010 election in an opinion editorial.

So it is understandable that little Billy and Mr. Mulvaney would look for every opportunity to attack me and the Small Business Chamber.  However, this time in his enthusiasm to ridicule, little Billy exposed more than his paid-for man-crush on Mr. Mulvaney (he calls him a "rock star").  Very quickly after the completion of the hearing in which Mr. Mulvaney read from prepared questions (not about the issue but about my and the Small Business Chamber’s small business integrity), FitsNews had the blog posted along with a YouTube link to just the 9-minute "testy exchange" between Mr. Mulvaney and me--something only a well scripted plan between FitsNews and Mr. Mulvaney's office could have achieved.  

And characteristically little Billy spins the event misleadingly so he can score his points.  He alleges that I was invited to testify by the minority for the purpose of encouraging more funding for the Environmental Protection Agency (EPA).   He then goes on to repeat anti-regulation talking points about the agency.

The truth is that I only knew that I would be testifying two days earlier and had not been directly contacted by Democrats on the Committee or the EPA and certainly was not told what to say.  The hearing was on the EPA’s compliance with the Regulatory Flexibility Act (RFA) in regard to small businesses.  The RFA requires federal agencies to review proposed regulations to determine if they will be unnecessarily harmful to small businesses.  I qualified to discuss the issue both because of the Small Business Chamber and our experience with a RFA in South Carolina which we helped to pass.   

No one, including me, knew what my testimony would be until the day before the hearing.  But after reading the testimony of the other presenters, it was clear to me that the problems described in their prepared testimony were most likely due to the lack of resources of the EPA to carry out the RFA mandate properly.  Even the U.S. Chamber presenter expressed a need for more resources for the EPA’s efforts to comply with the RFA’s rulemaking process.

Had little Billy read my entire testimony and how I reached my conclusions….oh but that would mean that he actually cared about facts and finding solutions to problems. 

You can read here my written testimony that due to a five minute time limit I was unable to fully give orally to the Committee.

You can also watch my testimony and all the questions asked of me by every Committee member including Mr. Mulvaney.  Let me know if I look like a “cancerous worm.”

Gold that should have never been chased

Back in early 2010 when many of us were working to pass financial reform in Congress, we were calling for “banks to be banks not gambling houses” (see my op.eds in The Hill and the Pittsburgh Post-Gazette). 

The great recession largely resulted from bank deregulation in the 1990s that repealed the 1933 Glass-Steagall Act that prohibited commercial lending banks from being investment banks.  Instead of making money from loans, banks were now allowed to pursue big profits on Wall Street and big bonuses for their executives by investing bank money and depositors’ money in risky financial bets. It’s called proprietary trading.

Well, we saw how that turned out.  The world’s economy melted in 2008 when the bogus investment vehicles collapsed leaving the greedy banks to come running to Uncle Sam for multi-billion dollar bailouts. 
As a result Congress did pass financial reform to try to reign in big banks’ bad behavior and the banks continue fighting the new regulations.

This week Sanford Weill the former CEO of Citigroup, who successfully fought for the repeal of Glass-Steagall—because it was to be great for the nation’s economy—announced that he now supports splitting up investment banking from commercial banking.  “Have banks do something that’s not going to risk the taxpayer dollars, that’ not going to be too big to fail.”

Also this week the editorial board of The New York Times admitted that the paper had made a mistake in advocating the repeal of Glass-Steagall.  “Having seen the results of this sweeping deregulation, we now think we were wrong to have supported it.”

The powerful voices in finance and the media were blinded by the pot of gold at the end of the gambling rainbow, and we all paid the heavy price.

Facts show Obamacare good for business

Thursday, Jul 26, 2012

The S.C. director of the National Federation of Independent Business continues his organization’s misleading information campaign about the new health-care law (“Replace health law with reforms that work,” Friday). As the president and CEO of the 5,000-member S.C. Small Business Chamber of Commerce and vice chair of the 150,000-member American Sustainable Business Council, I need to correct the record.

First, there is no health-insurance tax on small businesses. There will be a tax on insurance companies to help pay some of the costs of Obamacare; but the law also prohibits insurers from spending more than 20 percent of your premium dollars on administration, marketing, profits and taxes. Since most insurers already have reached this 20 percent threshold and will be refunding $4.3 million in premiums to S.C. small businesses by the end of this month, they will not be able to pass on any new taxes.

Nor will there be “new regulations that will crush small businesses.” Businesses with fewer than 50 employees, or 97 percent of all businesses, have no obligation to provide health insurance and therefore are not facing new regulations. But 45,560 small businesses in South Carolina with fewer than 25 employees can take advantage of the law’s health insurance tax credits, a number the NFIB calls “very few”.

The federation is correct in noting that businesses with 50 or more workers will have some shared responsibility for the health insurance of their employees. They must either provide insurance or pay a fee. It says this will be an incentive to businesses to remain small, and therefore the entire law should be repealed.

But 97 percent of businesses with 50 or more employees already offer health insurance, because they see it as a necessary part of their compensation package. So the NFIB wants to throw out all the benefits of Obamacare that do and will make health insurance more affordable for all of us because of its concern for one out of every thousand businesses that will have a shared-responsibility decision to make.

While no law is perfect, Obamacare is making health insurance more affordable for small businesses.

Frank Knapp Jr.

President & CEO, S.C. Small Business
Chamber of Commerce
Columbia

http://www.thestate.com/2012/07/26/2368153/facts-show-obamacare-good-for.html

Oppose the Regulatory Freeze Act---NOW!

Tomorrow the U.S. House is scheduled to vote on H.R. 4078, the Regulatory Freeze Act. 

The legislation would stop the federal government from promulgating any new regulations until the unemployment rate is 6% or below.  If this bill should ever become law, which it won’t, the coal and oil companies, health insurance companies, big pharma, multinational corporations, and the “too big to fail” banks will have all won.  There will be no regulations to implement recent laws aimed at protecting consumers and leveling the playing field for small businesses.  And there would be no need to pass any new laws to do likewise because it is the regulations that are needed to carry out the intent of Congressional laws. 

Below is a letter from the American Sustainable Business Council laying out the small business argument for not passing the Regulatory Freeze Act.

If you like your government to actually work to protect your health and safety and also protect small businesses from unfair competition from corporate giants, call your House member today.  The House switchboard is (202) 224-3121.  Call and just ask to be connected to your House member.  The message is easy:  Vote NO on H.R. 4078.

American Sustainable Business Council

July 23, 2012

Re:  H.R. 4078, Regulatory Freeze Act

Dear Representative:
 
I write you today to urge you to oppose the “Regulatory Freeze for Jobs Act of 2012" (H.R. 4078), the “Midnight Rule Relief Act of 2012," (H.R. 4607), and the “Sunshine for Regulatory Decrees and Settlements Act of 2012” (H.R. 3862). Votes on these bills are expected this week. These bills hurt small and medium sized businesses by halting the regulatory process that levels the playing ground for these businesses to compete, creates incentives for innovation and protects our customers and employees.

These three bills constitute a shift away from forty years of regulatory precedent that protects the public against a range of market imperfections. The bills will also lead to a more chaotic and less competitive market. And finally, the bills will also have the unintended consequence of shifting the burden of proof for environmental, health and safety issues back to taxpayers and away from powerful corporate interests. Eroding the operational capacity of regulatory agencies to do their job, as these bills appear designed to do, will not foster productive growth among small and mid-sized firms. Instead these actions will allow the largest firms to further dominate the marketplace.

The American Sustainable Business Council (ASBC) is a growing national coalition of businesses and business organizations committed to advancing policies that support a vibrant and sustainable economy. ASBC, through its partner organizations, represents over 150,000 businesses and more than 300,000 business professionals, including industry associations, local and state chambers of commerce, microenterprise, social enterprise, green and sustainable business, local living economy groups, women and minority business leaders, and investor networks.

While some inside the Beltway claim that regulations are holding back our economic recovery, ASBC has a different view. ASBC, along with other small business organizations, released back in February a poll of small business owners which found that small businesses don’t see regulations as a major concern. Instead, the vast majority of small business owners believe weak demand is the primary challenge for their business right now.

Our polling confirmed that small business owners value regulations if they are well-constructed and fairly enforced:

 Small business owners believe certain government regulations play an important role: 86% believe some regulation is necessary for a modern economy and 93% of respondents believe their business can live with some regulation if it is fair and manageable.
 78% of small employers agree regulations are important in protecting small businesses from unfair competition and to level the playing field with big business.
 79% of small business owners support having clean air and water in their community in order to keep their family, employees and customers healthy.
 61% support standards that move the country towards energy efficiency and clean energy.
 
If enacted, the bills we oppose would open the door for more problems like the financial and mortgage crisis of 2008. The bills, in our view would further damage our economy, stifle consumer demand and put small companies out of business.

We believe an approach to make the regulatory process help businesses be more successful is to increase the capacity at the regulatory agencies. This would enable the agency ombudsmen to be more responsive and effectively address small businesses’ questions when they arise. Our experience has been that the ombudsmen process works well.

Blocking, weakening or delaying critical standards and safeguards will worsen the uneven economic playing field that leaves many small and medium sized businesses at a competitive disadvantage. It also inhibits innovation in new technologies that can create good, sustainable jobs and create safer products, workplaces and communities.

We call on the House of Representatives to reject these three bills.

Sincerely,

David Levine

CEO & Co-Founder

Blue Cross giving rebates for failing to meet requirement

The State
July 24, 2012

Insurer violated new health care law in spending on claims

BY STEPHEN LARGEN The (Charleston) Post and Courier

South Carolina’s largest health insurer has begun sending out rebate checks to some policyholders because it failed to meet a requirement of the federal health care overhaul.

Blue Cross Blue Shield of South Carolina said Monday that checks – most for less than $200 – will be sent to individual and small group policy holders during the next two weeks. A company spokeswoman declined to say how much it will be paying out in rebates.

The provider, like some others, didn’t spend enough on customers’ medical claims in 2011, according to the terms of the Affordable Care Act.

Blue Cross Blue Shield said it is complying with the law, even though the insurer views the requirement as bad policy. 

The spending stipulation doesn’t address the root causes of rising health care expenses, such as waste and fraud and lifestyle choices, a company spokeswoman said.

And Jim Deyling, Blue Cross Blue Shield’s president of private business, said in a statement that “our concern remains that a rebate such as this not only creates a false impression of overpricing, but also reveals the fundamental flaw of the legislation, which is that it does nothing to reduce health care expense for members.”

The director of Gov. Nikki Haley’s Department of Health and Human Services agreed.

“In a health care system where it has been estimated up to 30 percent of health care spending is excess cost, these small rebates may be momentary relief for those who receive them, but they clearly don’t target the underlying reasons for out of control health care costs,” Tony Keck said in a statement.

Haley, like most Republicans, opposes the Affordable Care Act.

Conversely, the president of South Carolina’s Small Business Chamber of Commerce hailed the requirement that forced Blue Cross Blue Shield to issue rebates.

“This demonstrates that the Affordable Care Act, ‘Obamacare,’ health care reform or whatever you call it is doing what it said it would do: help make health insurance more affordable,” said Frank Knapp, a longtime supporter of the law.

Blue Cross Blue Shield held at least 60 percent of the market share in eight of the state’s largest metro areas in 2008, according to a study by the American Medical Association. 

MONEY BACK

BlueCross BlueShield of South Carolina will issue checks to some policyholders because it didn’t meet a requirement of the Affordable Care Act. Questions and answers:

Who will get rebates? Individual customers will receive checks directly from the company, while owners of businesses with between two and 50 full- and part-time employees, including seasonal help, will get one check for the company’s policy.

What can the rebates be spent on? No restrictions for individual customers. Small business owners can return money to employees, reinvest it to offset future health care costs or use it in another way that benefits employees.

Why are the rebates coming? The company did not meet the medical loss ratio for spending on customers’ medical claims in 2011. It was required to spend 80 percent of premiums for customers’ medical claims. It spent 74.8 percent in the individual market, and 79.9 percent in the small group market. The company won’t issue checks for large group plans as it exceeded the 85 percent target.

http://www.postandcourier.com/article/20120724/PC16/120729651/1177/south-carolina-s-largest-health-insurer-issuing-rebates

Studies Reveal That at Least $21 Trillion is Hidden in Secret Tax Havens, Gap Between Rich and Poor Growing

(The auther of this report, James Henry, will be on my radio show just after 5:40ET today. The streaming audio can be found here.)

Tax Justice Network
July 22, 2012

At least $21 trillion of unreported private financial wealth was owned by wealthy individuals via tax havens at the end of 2010. This sum is equivalent to the size of the United States and Japanese economies combined. The research comes amid growing concerns about the enormous gulf between rich and poor in countries around the globe.

There may be as much as $32 trillion of hidden financial assets held offshore by high net worth individuals (HNWIs), according to our report The Price of Offshore Revisited, which is thought to be the most detailed and rigorous study ever made of financial assets held in offshore financial centres and secrecy structures.

Read the full report here.

James S. Henry, TJN Senior Adviser and main researcher for The Price of Offshore Revisited, said: “This new report focuses our attention on a huge 'black hole' in the world economy that has never before been measured – private offshore wealth, and the vast amounts of untaxed income that it produces. This at a time when governments around the world are starved for resources, and we are more conscious than ever of the costs of economic inequality.”

Other Key Findings:

· At the end of 2010 the Top 50 private banks alone collectively managed more than $12.1 trillion in cross-border invested assets for private clients, including their trusts and foundations. This is up from $5.4 trillion in 2005, representing an average annual growth rate of more than 16%.

· The three private banks receiving the most assets offshore on behalf of the global super-rich are UBS, Credit Suisse and Goldman Sachs. The top ten banks commanded more than half the top fifty’s asset total – an increased share since 2005.

· Fewer than 10 million members of the global super-rich have amassed a $21 trillion offshore fortune is. Of these, less than 100,000 people worldwide own $9.8 trillion of wealth held offshore.

· If this unreported $21-32 trillion, conservatively estimated, earned a modest rate of return of just 3%, and that income was taxed at just 30%, this would have generated income tax revenues of between $190-280 bn – roughly twice the amount OECD countries spend on all overseas development assistance around the world. Inheritance, capital gains and other taxes would boost this figure considerably.

· For our focus subgroup of 139 mostly low-middle income countries, traditional data shows they had aggregate external debts of $4.1 tn at the end of 2010. But take their foreign reserves and unrecorded offshore private wealth into account, and the picture flips into reverse: they have aggregate net debts of minus US$10.1-13.1 tn. In other words, these countries are big net creditors, not debtors. Unfortunately, their assets are held by a small number of wealthy individuals, while their debts are shouldered by their ordinary people through their governments.

We consider these numbers to be conservative. This is only financial wealth and excludes a welter of real estate, yachts and other non-financial assets owned via offshore structures.

Nicole Tichon, director of Tax Justice Network USA, said, "Recent investigations into the world's largest banks have shown that financial secrecy is the means to bad ends. It protects criminals of all stripes. And the loss of tax revenues to both developed and developing countries has left widespread job loss, budget cuts and basic services in its wake."

Henry draws on data from the World Bank, the IMF, the United Nations, central banks, the Bank for International Settlements, and national treasuries, and triangulates his results against data reflecting demand for reserve currency and gold, and data on offshore private banking studies by consulting firms and others.

Accompanying this research is another study by TJN, entitled Inequality: You Don’t Know the Half of It, which demonstrates that all studies of economic inequality to date have failed to account properly for this missing wealth. It concludes that inequality is far worse than we think.

Read the full report here.

TJN interviewed eight of the world’s most respected economists specializing in economic inequality. They all confirmed a huge under-reporting problem in this area.

TJN’s research explains that if an asset is hidden in an offshore bank account, trust or company, and the ultimate owner or beneficiary of the income or capital therefore cannot be identified, then this asset and the income it produces cannot be counted in inequality statistics.

Nicholas Shaxson, author of the book Treasure Islands: Tax Havens and the Men Who Stole The World, said, "A pinstripe infrastructure of accountants, lawyers and financial institutions has painstakingly put together a global offshore system for hiding a large chunk of the world’s wealth and income from view. They have been spectacularly successful. Now that we can at last see the true scale of this monster, we will have to get used to the idea that inequality is much worse than we ever thought."

John Christensen, director of the Tax Justice Network, said, "Inequality has reached epic proportions. It threatens economic and social stability – but none of the big institutions such as the IMF, the World Bank, the Bank of England or the Fed, with their many thousands of highly paid economists – have ever taken useful and serious steps to measure all this offshore wealth. Without this, we could never understand the true, gargantuan scale of the inequality challenge we face. This is an astonishing abdication of responsibility on their part."

Although some inequality studies try to compensate for the missing offshore assets, all experts interviewed for this TJN paper, agreed that no study comes even close to compensating sufficiently.

The Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend.

Visit the TJN website here.

Visit the TJN-USA website here.

Read TJN-USA's latest blog on the impact of offshoring of revenues here.

National Poll Shows Bipartisan Support For Stronger Protections From Toxic Chemicals

WASHINGTON, DC (July 19, 2012) – A nationwide poll and four separate, statewide polls found similar strong support for bolstering protections against toxic chemicals. By overwhelming bipartisan margins, Americans support strengthening the 35-year-old Toxic Substances Control Act (TSCA), according to new polls released today by the Natural Resources Defense Council (NRDC), the Safer Chemicals Healthy Families Coalition, and the Ecology Center.

“Americans of all stripes have real concerns about the toxic chemicals we are exposed to every day – and the serious health problems they cause,” said Daniel Rosenberg, director of NRDC’s toxic chemicals reform project. “Protecting us from chemicals linked to cancer, learning disabilities, infertility and other health problems should be a top priority for Congress. This really can’t wait.”

NRDC and the Safer Chemical Healthy Families coalition strongly support the Safe Chemicals Act, S. 847, introduced by Sen. Frank Lautenberg, D-N.J. The bill updates TSCA by requiring manufacturers to show that their chemicals are safe in order to sell them. It also streamlines the Environmental Protection Agency’s (EPA) ability to limit uses of a chemical that may harm public health or the environment.

“As the Senate moves closer to a vote on the Safe Chemicals Act, Senators should keep in mind that the partisan divisions that wrack Congress do not reflect the views or desires of the American people,” said Andy Igrejas, campaign director of Safer Chemicals Healthy Families.

A nationwide poll conducted by Public Opinion Strategies (POS) for NRDC found:

-Nearly 74 percent of those polled think the threat posed to people’s health by the exposure to toxic chemicals is serious, with 34 percent saying they think the threat is “very serious.”
-68 percent of respondents support stricter regulation of chemicals used and produced in the United States, with support across all demographic sub-groups, including those typically opposed to government regulation, such as self-described conservatives (54 percent) and tea party supporters (51 percent).
-Description of a proposal that would require the chemical industry to prove that its products are safe and give EPA greater authority to restrict some or all uses of chemicals that may harm health or the environment garnered support from 77 percent of respondents.

“Even when we presented robust arguments on both sides of the issue, those we polled continued to side with supporters of reform,” said Lori Weigel, a partner at polling firm Public Opinion Strategies, who conducted the national poll for NRDC.

POS and Fairbank, Maslin, Maullin, Metz & Associates (FM3) also conducted a poll in New Mexico that found:

-76 percent of respondents consider chemical exposure a serious health threat in day-to-day life.74 percent of respondents support the legislation described that would increase EPA authority and require that the chemical industry prove its products are safe – including 81percent of women, and 78 percent of Latino respondents.

Meanwhile, separate polls conducted by The Mellman Group for the Safer Chemicals Healthy Families Coalition in Nevada and Missouri found:

-62 percent of respondents in Missouri support stricter regulation of chemicals, and 64 percent support the provisions of legislation to strengthen the current law;
In Nevada, 61 percent of respondents support stricter regulation while 64 percent support the provisions of the legislation.

“There is a rare depth of public support for tackling the issue of toxic chemicals that crosses party lines,” said Mark Mellman of the Mellman Group, who conducted statewide polling on the issue in Nevada, Missouri this month and Montana, Ohio, Wisconsin and Pennsylvania in 2011.

Finally, a Michigan poll conducted by POS with Greenberg, Quinlan, Rosner Research for Ecology Center in Michigan found 74 percent of respondents supportive of legislation described to increase EPA’s authority to regulate chemicals and require chemical companies to prove that their products are safe. The poll also found 61 percent of respondents were extremely or very concerned about the health impacts from toxic chemicals in the Great Lakes, and 32 percent were somewhat concerned. A mere 6 percent were not concerned.

"The findings of this poll demonstrate that Michiganders support a change in the way our nation deals with toxic chemicals," said Rebecca Meuninck, campaign director of the Michigan Network for Children's Environmental Health. "Michigan residents are concerned about the impacts toxic chemicals have on their health and the health of the Great Lakes."

About the poll: For the national poll, Public Opinion Strategies conducted a telephone survey of 800 registered voters nationwide. The survey, conducted June 25 through June 27, 2012, has an overall margin of error of +/-3.46 percent nationwide.

Anti-regulation folks have chance to be specific or shut up

Efforts to blame regulations for the economy have been raging for quite a while in Congress and on the campaign trails.  Clearly the rhetoric of “job-killing regulations” has been used by partisans to score political points.  And just as clearly small businesses, as seen in most polling, have said regulations are not holding them back from hiring—lack of consumer demand is doing that.

Yet every week in Congress, especially in the House, hearings are held to blame regulations and the agencies that regulate for all our economic problems.  Most of what we hear are generalities instead of specific problems.   Of course, this makes for generating a lot of heat but little light on the issue.

So the White House has launched a new website that will allow businesses to say what regulations are specifically causing them problems and taking suggestions of what the businesses would like to see changed.  Here is the website.

This is the time for regulatory-complainers to step up with clear examples of the problem.  We’ll have to wait and see what kind of response the White House will receive but it should be interesting.  Hopefully there will be some good responses that can focus on a particular regulatory problem. 

But my guess is that the responses will continue to be general in nature preferring to turn up the heat without the providing any light.  And that in itself will be enlightening. 

Opponents of Obamacare beware--the refund checks are coming

Here is a warning.  If you run into Pat Hancock in the Hilton Head Island area of South Carolina, don't say anything bad about Obamacare--she'll take your head off.

As far as she's concerned the Prez just sent her a check for $405.  That was the amount of the refund her health insurance company sent her along with the following message:

“This letter is to inform you that you will receive a refund of a portion of your health insurance premiums.  This refund is required by the Affordable Care Act -- the health reform law.”

The Medical Loss Ratio of the Affordable Care Act requires health insurance companies to issue a refund to their policy holders if the company, as the letter states:

“…does not spend at least 80 percent of the premiums it receives on health care services, such as doctors and hospital bills, and activities to improve patient safety.  No more than 20 percent of premiums may be spent on administrative costs such as salaries, sales, and advertising....the 80/20 rule in the Affordable Care Act is intended to ensure that consumers get value for their health care dollars.”

Ms. Hancock’s health insurance company did not meet the Medical Loss Ratio requirement so she received a refund.  She is part of the approximately one-third of all individuals who buy their own health insurance coverage who will receive a refund check by the end of this month.  The total amount of these refunds will be approximately $426 million.  Small business owners who provide health insurance to employees are expected to receive $377 million in refunds and large employers will get back $541 million.

One of the principle reasons the nation is split in opinion on Obamacare is that none of the benefits Americans have received so far came with credit being given to the health care reform.  The public hasn’t been connecting the dots between the health care law and benefits such as the small business health insurance tax credits, affordable premiums in high-risk pools, children being allowed to stay on parents policies until they are 26, and rebate checks to Medicare patients who have reached the donut hole.

But that will change if all theses Medical Loss Ratio refund checks come with the same explanation Ms. Hancock received giving credit where credit is due—Obamacare.

  

Kudos to TV host

For years the National Federation of Independent Business has been the darling of the media.  The NFIB had successfully sold the story that they represented small businesses.  The organization had the money to get in front of the national press and reporters were happy to have an easy “go-to” group on small business issues.

All that has now changed since the NFIB was a lead party in the Supreme Court failed challenge to Obamacare (Affordable Care Act).  The truth about the NFIB’s source of funding and their support for big business positions on issues is now on the media’s radar.  Not only has the NFIB been the target of numerous national print stories challenging its “small business” credentials, even TV reporters are now not simply accepting the organization’s blustery talking points responses to questions.

This Sunday my friend John Arensmeyer, founder and CEO of the Small Business Majority, and Jean Card, VP of Media and Communications of the NFIB, were guests on MSNBC’s “Your Business”.  Host JJ Ramberg started out asking Ms. Card what was in the healthcare reform law that would adversely affect small businesses.

Ms. Card began her response with the typical NFIB misleading “facts” but was quickly stopped by Ms. Ramberg.  The host was not going to let her viewers hear that Obamacare was going to force small businesses to buy health insurance when the truth is that there is no health insurance mandate for small businesses with fewer than 50 employees (97% of all businesses).  Watch Ms. Ramberg push-back on the NFIB spokesperson here.

Congratulations to Ms. Ramberg for not being duped by the PR machine of the small business pretender organization, the NFIB.

Action Alert!!!

One of Governor Haley’s budget vetoes directly impacts on our state’s efforts to help our small manufacturers.  In Veto #49 the Governor has effectively slashed 23% of the state budget for the South Carolina Manufacturing Extension Partnership, which provides heavily discounted professional consulting to small manufacturers who can not afford private sector rates.

It is very important that you contact members of the state legislature before tomorrow when the House will begin considering override votes.

Our letter to the Legislators is below.  The message is this:

Please vote to override Veto #49, the S.C. Manufacturing Extension Partnership.  Reducing the state budget of the SC MEP by 23% will hurt our state’s efforts to grow our small business manufacturing sector. 

You can find a complete list of House members with telephone numbers and emails at:  http://www.scstatehouse.gov/member.php?chamber=H

The list of Senate members with telephone numbers and emails can be found at:  http://www.scstatehouse.gov/member.php?chamber=S

PLEASE CONTACT THEM TODAY!

Here is our letter to the General Assembly:

Dear Legislator,

The S.C. Small Business Chamber of Commerce asks that you vote to override the Governor’s veto of $200,000 in “one-time” state funds for the S.C. Manufacturing Extension Partnership (SC MEP).

The SC MEP is the state’s effort to help our small manufacturers be successful.  This is an important economic development effort in that 90% of South Carolina’s manufacturers have fewer than 100 employees and 84% have fewer than 50 employees. 

State and federal funding of SC MEP enables the organization to offer heavily discounted professional consulting services to small manufacturers to help them be more profitable.  The $200,000 of “one-time” state funds, which represents 23% of the SC MEP state funding, will be matched with $100,000 of federal funds enabling the SC MEP to assist approximately 30 additional small manufacturers.

As our state and local governments have invested hundreds of millions in recruiting large manufacturers like Boeing, SC MEP helps our small manufacturers achieve the necessary technical expertise to be certified as suppliers to these major S.C. industries.  In the case of Boeing, SC MEP helps our small manufacturers become AS9100 Aerospace Supply Qualified, an international quality standard essential for serving Boeing or any airline manufacturer South Carolina might recruit.

Thank you in advance for your vote to override veto #49.

Sincerely,

Frank Knapp, Jr.
President & CEO

House voting to keep their healthcare perks

The U.S. House is scheduled to take their 31^st vote on changing, delaying, defunding or terminating Obamacare today.  The outcome of today’s repeal vote isn’t in questions because every other vote taken on the issue has passed almost exclusively along party lines.

Obamacare opponents in the House will again claim that the healthcare reform is hurting small businesses.  And by now you should know that this is a crock. 

Small businesses defined as less than 50 employees have no mandate to offer health insurance.  Not now.  Not later.  That 50 or under workers criteria means that 97% of all businesses in this country have not been nor will be negatively impacted by Obamacare.  Of the remaining businesses, only 3 % do not offer insurance and will have to make decisions about shared responsibility for the healthcare of their employees.

But while there has been no downside for small businesses, there has been plenty of upside.  The Small Business Majority sent a letter to Congress this week agrueing against repeal.  “Since the enactment of federal healthcare reform, America’s 28 million small businesses have already benefited greatly from provisions such as tax credits, rate review and Medical Loss Ratio (MLR)”, read the letter.  The MLR alone is yielding $1.1 billion in premium rebates to small businesses across the nation.

Then there are the future benefits for small businesses starting in 2014 such as the health insurance exchanges.  These online marketplaces for health insurance will not only reduce premiums from less administration costs of small business health plans but also from the expected increase of carrier competition.

Assuming that the opponents of Obamacare know these facts and still put up the charade of voting to repeal for the purpose of protecting small business, then their real motivation must be something else.  Partisan politics certainly is a good possibility.

But there actually is a personal reason members of Congress would like to see Obamacare go away—their own health insurance.

One of the complaints during the construction of the healthcare reform legislation was that if the new process was good for American citizens it ought to be good enough for members of Congress.  So a provision was put into the law to have members of Congress get their health insurance through the new exchanges like everyone else and that when they retire they would no longer receive government-subsidized health insurance. 

Sam Baker of The Hill reports that one Democratic Official has said, “House Republicans are set to repeal the promise that members of Congress have health care just like everyone else and to restart the perk of lifetime government health care for themselves.”

Now that is a big incentive for Congress to kill Obamacare.

Déjà vu all over again…with a bad twist

Yesterday President Obama reiterated his position that he supports extending the Bush-era tax cuts for the lower 98% of all taxpayers for another year.  Of course, that also means that he supports allowing those same tax cuts for the top 2% of tax payers to revert back to the Clinton-era levels (you remember the 90’s when the economy was soaring and we actually had a budget surplus)—a position shared by most Americans.

Of course the President’s GOP opponents argue that all the Bush-era tax cuts should be extended because to do otherwise would cause the wealthiest to stop creating jobs. 

Sound familiar?  It should.  We’ve been having this debate since 2010 when all the tax cuts were set to end.  The South Carolina Small Business Chamber, the American Sustainable Business Council, Business for Shared Prosperity, the U.S. Women’s Chamber of Commerce and other business groups support allowing the tax cuts for the upper 2% to expire and to use the new revenue for deficit reduction and investment in the nation’s infrastructure, first responders and teachers.

I wrote about this issue in The Hill once in 2010 and again in 2011.  The point is pretty simple.  Very few small business owners (less than 3%) fall into the upper 2% tax brackets and many that do have some business income are K Street lobbyists, hedge fund managers, high-powered consultants, Wall Street bond traders and the wealthiest Americans.  They are not your Main Street small business people.

Plus, businesses do not hire workers based on the business-owners income tax rate.  Businesses hire workers when the demand is there for products and services. 

But here is the new twist to this old debate. 

The traditional line against the tax rates going up for the wealthy is that it would hurt the small business job creators.  This argument recognized that small businesses create most new jobs but distorts the reality of the income of small business owners.  As indicated above, very few have incomes that would cause them to see a tax increase if the Bush-era tax credits on the top 2 tax brackets increased.

But yesterday in a radio interview, Presidential candidate Mitt Romney said, “What the president is proposing is therefore a massive tax increase on job creators and on small business.” 

AND???  Is Mr. Romney now making a distinction between “job creators” and “small businesses”? 

I thought maybe he simply misspoke but Romney spokeswoman Andrea Saul also made the distinction yesterday.  “The president’s latest bad idea is to raise taxes on families, job creators and small businesses,” she is quoted as saying.

This is apparently now the official position of the Romney campaign.  Small businesses are now not to be recognized as the same as job creators. 

Why is this important?  Because one of the few things small business has going for it in government is the deserved reputation as job creators.  But even with that we still don’t get the respect we deserve from government which at all levels heaps attention and incentives on big business while giving crumbs to small business.

If there is now an official effort to decouple job creator status from small businesses, we are in deep trouble.  The billionaires and multinational corporations that are trying to buy this election to totally control our economy and government will have driven the final stake into our hearts.

2012 State Legislative Wrap-Up

Numerous legislative efforts were on the South Carolina Small Business Chamber of Commerce (SCSBCC) agenda this year.  While the Legislature will make one more trip back to Columbia to address some gubernatorial budget vetoes, the die has been cast for everything else.  And because this was the second year of the two year session, what did not get done now has to start from the beginning in January.

First the bad news.

INSURANCE INDUSTRY DEFEATS CONSUMERS

Health Insurance

To really have competition between health insurance companies you have to stop allowing the dominant carrier in the state, Blue Cross Blue Shield (BCBS), from contractually forcing healthcare providers to charge BCBS competitors higher fees.  This process is called the “most favored nation” clause in a contract.

If one health insurance company is guaranteed to have the lowest reimbursement rates for doctors and hospitals, that company has lower costs and thus can be more competitive in premiums charged.  But that company also has no incentive to drive down healthcare costs.  In fact, it has an incentive to allow healthcare costs to increase thus enabling it to make more profit through higher premiums.  As a result the other healthcare companies are forced to have higher costs and thus less competitive premiums.  With no market-driven containment on healthcare costs, premiums for all health insurance companies increase.

We supported S.316 which would have outlawed most favored nation clauses in health insurance company contracts with providers.  But S.316, which was introduced in January of 2011, never even got a subcommittee assignment from the Chairman of the Senate Banking and Insurance Committee.  You can probably figure out why. 

The last reason given to me by the Chairman, who was defeated in his primary election, was that BCBS was under federal investigation for using the most favored nation clause to restrict competition thus harming the consumer.  The Chairman didn’t think it was appropriate for the state to get out in front of the feds and possibly pass a law that might have to be changed later depending on the outcome of the investigation.

I didn’t buy the logic.  While it was true that the U.S. Justice Department has been (and probably still is) looking into the contractual practices of BCBS, confirmed by a call I received from the Justice Department to discuss the matter, this was a poor excuse for not moving S.316 along the legislative process.  

First, since when does South Carolina kowtow to the federal government?  We think nothing of sticking a finger into Uncle Sam’s eye whenever it means scoring some political points.  And if we can do that for partisan reasons, surely we can do that to help make health insurance more affordable for our citizens.

Second, a federal investigation would be looking at the past behavior of BCBS.  Legislation would address future behavior.  We should have been taking action to correct uncompetitive behavior going forward and let the feds worry about the past misdeeds.

The bottom line is that because the Senate Banking and Insurance Committee failed to promote competition between health insurance companies either because of the lobbying power of BCBS or the Chairman’s reluctance to hurt the fed’s feelings, South Carolinians will still pay higher rates for the same coverage compared to Georgians and North Carolinians right across the border.

Read more

It’s a bird, it’s a plane, it’s . . . a Tax Penalty!

One of the big political stories yesterday was Republican presidential candidate Mitt Romney correcting his top advisor, Eric Fehrnstrom, thus giving us the accurate description of how the individual mandate to purchase health insurance will be enforced.  Yesterday Mr. Romney called it a tax and on Monday of this week Mr. Fehrnstrom called it a penalty.  So it’s a “tax penalty”.  Neither Mr. Romney nor President Obama has ever promised not to create a new tax penalty that is needed to promote the common good. 

Many people and businesses have experience with a tax penalty.  Don’t pay your taxes on time or file the proper tax forms on time and you get a tax penalty?

And just like existing tax penalties, relatively few ever have to pay them.

Citizens for Tax Justice estimates that “less than three percent of households”, ones that can afford to buy health insurance but choose not to accept personal responsibility ("free riders"), will face this tax penalty. 

The other big political story yesterday was my friend Nick Shaxson’s article in the August issue of Vanity Fair.  Nick, Rebecca Wilkins (Senior Counsel on Federal Tax Policy at Citizens for Tax Justice) and I gave a Congressional staff briefing on offshore tax haven abuse in April last year.  That briefing was sponsored by the Financial Accountability and Corporate Transparency (FACT) Coalition.  

The three of us in this photo taken on the Capitol steps are joined by another friend, Chuck Collins (naturally on the left), a senior scholar at the Institute for Policy Studies.

In the Vanity Fair piece, Nick “delves into the murky world of offshore finance” and discusses Mr. Romney’s “familiarity with foreign tax havens” such as his assets sitting in Bermuda, Luxembourg and the Cayman Islands.  Nick specifically points to the example of a “Bermuda-based entity called Sankaty High Yield Asset Investors Ltd.” formed in 1997, a corporation wholly owned by Mr. Romney.  The fact that Mr. Romney failed to report this business on his financial disclosure statements prior to 2010 and that Mr. Romney continues to not reveal the value of the corporation has reignited interest in the use of offshore tax havens to avoid paying U.S. taxes. 

And as we should all know by now that when the wealthy and multinational corporations hide their money to avoid paying our taxes, the rest of us end up subsidizing all the benefits of America—our infrastructure, education, military, courts, etc.—that have helped these “free riders” be financially successful.