[Congressional Record Volume 140, Number 73 (Monday, June 13, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                   THE CASE AGAINST EMPLOYER MANDATES

  Mr. GOSS. Mr. Speaker, with solid majorities in both Houses of 
Congress, you would think the President would be able to pass a health 
reform plan. But things are not quite that cut and dry. Why? Let us 
look at two of the most troubling words in the President's plan: 
Employer mandates. These two words mean that business must pay up to 80 
percent of the health insurance costs of their employees. The President 
wants us to believe this is simply making business pay their fair 
share. But even many members of the President's own party are skittish 
about this--they see past his simple rhetoric. If you move beyond the 
labels, you see that mandates are really payroll taxes that will raise 
the cost of labor for nearly three-quarters of American companies, and 
discourage future job growth. A study conducted by the CONSAD Research 
Corp. estimates the Clinton employer mandate payroll tax will eliminate 
at least 850,000 existing jobs and adversely impact another 23 million 
workers by causing loss of wages, restricted benefits, or longer work 
hours. Lewin-VHI, Inc., has concluded that low-wage jobs will be 
especially hard hit--with more than 200,000 jobs lost. Other studies by 
the nonpartisan Congressional Budget Office and the American 
Legislative Exchange Council estimate total job losses could exceed 1 
million. As the cost of labor is arbitrarily inflated by this tax, 
other business alternatives become more attractive. Instead of paying 
more than $5,000 a year in benefits to workers--businesses will 
increasingly turn to depreciable machines wherever possible or even 
contemplate moving jobs to cheaper labor markets overseas. Small firms 
with fewer than 100 employees will also suffer. While these firms are 
the backbone of growth in our economy, they are also the riskiest 
ventures. Profit margins are generally small and operating losses 
common among these firms, which have to bear high-startup costs while 
attempting to establish themselves in the market. With the Clinton 
health plan's mandates, nearly half of the expected job losses would 
come from this sector. This is like killing the goose that lays the 
golden eggs. Small business creates four out of every five new jobs in 
America. Imposing job-killing payroll taxes on this sector will not 
only constrain the job market, it will threaten the very heart of our 
economic recovery. While making business pay may offer a good sound 
bite, it doesn't make for good policy. All Americans will end up 
paying--many with their jobs. It is true, most Americans already get 
health coverage through their employers. But the strength of our 
current policy is that benefits are voluntarily provided--through 
negotiation with labor and the flexibility of the free market. Mandates 
convert this voluntary dynamic into a compulsory one, making Government 
the sole arbiter. And there are other problems with mandates--chief 
among them that they allow Government direct control over nearly 400 
billion additional dollars a year. Unquestionably, this would 
constitute the single largest tax increase in our history. And the 
benefits people receive in return for these onerous taxes would be 
decided not by the market--but by Congress or a National Health Board. 
This is a dramatic shift in decisionmaking authority--and it is 
something many Americans rightfully fear. Mr. Speaker, we reject 
mandates because they threaten jobs and give Government too much 
control over our health and our workplace decisions. There is a better 
way to reform health care. In a bipartisan manner, we have introduced 
bills to make insurance more affordable for all businesses and 
individuals--but retain individual freedom to choose the kind and 
source of coverage. Another study by Lewin-VHI confirms we can cover 97 
percent of the population with such voluntary reforms. I urge my 
colleagues and the public to consider the facts. If the employer 
mandate is such a great idea, then why does it kill hundreds of 
thousands of jobs? And why is it that even Democrats in Congress are so 
hesitant to support their President on this issue?

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