[Congressional Record Volume 140, Number 76 (Thursday, June 16, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[Congressional Record: June 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  HEALTH CARE: A BIPARTISAN DISCUSSION

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
February 11, 1994, and June 10, 1994, and because there is no designee 
of the majority leader, the gentlewoman from Connecticut [Mrs. Johnson] 
is recognized for 60 minutes as the designee of the minority leader.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, my colleagues and I of both 
parties have gathered here tonight on the House floor to talk about an 
issue that will have profound consequences for the American people.
  All of us are sponsors of various approaches to solving the health 
care problems that our society faces. We are absolutely capable of 
writing the law that will prevent insurance policies excluding people 
for preexisting conditions, we can solve joblock, we can stabilize 
premiums, we can make affordable insurance available to all Americans. 
We can solve all those problems that are out there and really threaten 
America's families access to health care, their sense of health care 
security, the predictability of health care premiums, and we can, with 
will, pass the kind of laws that will help control health care costs 
but at the same time assure in the future the quality of the system 
that has made American health care equal to excellence throughout the 
world.
  However, to solve our health care problems in a way that 
fundamentally restructures our economy would be a terrible error. The 
impact of an employer mandate on the ability of businesses to hire and 
grow, we need to understand. The impact of an employer mandate on the 
ability of businesses to hire and grow, we need to understand. The 
impact of an employer mandate on the resilience of our economy in 
downturns, we need to understand. The impact of an employer mandate on 
our ability to control costs and assure quality care, we need to 
understand. Because if we make the wrong decisions in attacking the 
problems in our health care sector, we have the possibility of 
weakening our economy, compromising its extraordinary vitality and 
strength, and compromising the quality of health care in America.
  I am very pleased tonight to have with me the gentleman from Texas 
[Mr. Stenholm], the gentleman from Iowa [Mr. Grandy], the gentleman 
from Minnesota [Mr. Penny], the gentleman from Illinois [Mr. Hastert], 
the gentleman from Texas [Mr. Geren], and the gentleman from Florida 
[Mr. Stearns]. Together we hope to help you see the systemic serious 
impact that an employer mandate would have not only on jobs and career 
opportunities for our people and the strength of our economy but on our 
ability to guarantee to the people of America a quality health care 
system in the future.
  Mr. Speaker, I yield to my colleague, the gentleman from Texas [Mr. 
Stenholm].
  Mr. STENHOLM. Mr. Speaker, I thank the gentlewoman for yielding, and 
I appreciate very much her calling for this special order. I am 
delighted to participate.
  Mr. Speaker, the issue of employer mandates has been getting a lot of 
attention, a lot of controversy.
  To some people they seem to have a difficult time understanding why 
84 percent of the small businesses in the United States strongly oppose 
the concept of employer mandates. But I think if we take just a little 
bit of time and examine a small business, we will find out some of the 
reasons why. It is rather simple. A $2,500 health insurance policy in a 
company that is just getting started in which the salary is $10 to 
$20,000 a year, opening salary, that becomes 12\1/2\ percent or 25 
percent of the total payroll.

                              {time}  2040

  So often when we in the Congress talk in terms of mandates for trying 
to accomplish a greater good, we seem to ignore the bottom line of the 
individual business, and I think small businesses have every reason to 
be skeptical. Today when those suggest that, well, they are really not 
going to pay it, we are going to subsidize the small business man or 
woman, I think it is particularly fitting we do this special order 
tonight on the eve of the debate and the passage of the agriculture 
appropriation bill.
  Farmers across the Nation are a little bit skeptical today of the 
promises of the payment of subsidization, because the Congress, in our 
wisdom, has seen fit to change the 1990 farm bill. We have constantly 
reduced the subsidy out of budget necessity. And what makes anyone 
think that health care will be any different? When circumstances 
change, as they have changed over and over again, Congress, in our 
wisdom, will have to change. No matter what we say today to a small 
business man or woman about what we are going to do tomorrow, we cannot 
deliver on that promise unequivocally. You only have to look at some of 
the past examples of what we have done in our promises.
  You know, the 1965 cost estimate of the current Medicaid expenditure 
was off by 7,600 percent. The estimated cost of Medicare expenditures 
was off by 1,178 percent. Social Security tax originally on payroll was 
1 percent. Today on self-employed it is 15 percent.
  So I think as we focus and we listen to the voices of the small 
business men and women, if we really and truly look at why they are 
opposed, it is not that they are not compassionate. It is not that they 
would not like to provide the insurance. In fact, I believe, as you 
have said, if we structure the health system reform bill correctly, 
most small businesses will want to participate, but they will need to 
participate up to the ability of what their own finances will allow 
them, not on what we here in Washington might believe that they ought 
to be doing.
  Mr. GRANDY. Mr. Speaker, will the gentlewoman yield?
  Mrs. JOHNSON of Connecticut. I am happy to yield to the gentleman 
from Iowa.
  Mr. GRANDY. Mr. Speaker, I did not mean to intrude upon the 
gentleman's time. I wanted to engage the gentleman in a conversation 
about this, because he and I and the gentleman from Minnesota have all 
served on the Agriculture Committee, and we have individually and 
collectively tried for years with public policy to legislate the risk 
out of farmers' lives.
  My feeling is that the more Government we have intruded upon farmers' 
lives, the more farmers we have driven out of the business. What we 
have done now with the passage of an employer mandate in the health 
care bills in the Committee on Ways and Means and then the subsequent 
small business subsidy is to consign small business owners, mom-and-pop 
proprietorships and businesses, up to 50 employees, up to the same fate 
that I think we are consigning to agriculture. We will make them 
dependent upon Federal programs which will be cut. We are going to 
shackle them to regulations which will be enforced. We will make them 
dependent upon the Government and not the market for their livelihood.
  And I can recall, because I worked with the gentleman on the 1990 
farm bill, the effort in that legislation was to wean farmers from 
programs and into the marketplace either through trade or through 
flexible acre programs. This is a quantum leap backwards, doing to our 
mainstream businesses what we have done to our farmers.
  Texas may be different from Iowa, but the cumulative effect on farm 
programs in Iowa is we have fewer farmers, fewer applicants for the 
business. One, it is hard work; and, two, it is terribly cost-
ineffective, because it is, one, an enormous hassle to comply with the 
Government regulations; and, two, there is no profit.
  I guess all I would say is I intruded upon the gentleman's time only 
to make the case that we have only to look back into our attempt in 
Federal farm programs to legislate the risk out of one of the most 
noble groups in our economic sector, farmers and ranchers, to see what 
we have done wrong, and now we are blithely committing the same 
mistakes under the guise of assuring universal coverage for every man, 
woman, and child. I think what we will do is basically assure universal 
dislocation for most of our small business owners.
  I apologize to the gentleman for intruding upon his time. But his 
remarks led into what I wanted to say, and I hope he will forgive me.

  Mrs. JOHNSON of Connecticut. I think there are two interesting points 
that bear further attention.
  It has often been said the employer mandate proposal is building on 
the current system. But the current system is voluntary, and to compete 
for good employees, employers offer health benefits if they can afford 
it.
  So the current system takes into account the profitability of a small 
business. When you mandate costs on a small business that has no 
profit, that employer has two choices: He goes out of business 
altogether, and I cannot tell you how many little guys are coming up to 
me and saying, ``I don't have 8 percent of payroll extra. I can't get 
it. I will have to close up.'' Or how many people are saying, ``Well, I 
could lay off four or five of my people to get the cash flow to meet 
this.''
  And then there is the subsidy issue. You tell me about agriculture 
and our stepping back on farm subsidies; I can tell you that on Ways 
and Means we used to help the self-employed by letting them deduct 25 
percent of their health care premium. We do not do that anymore. We do 
not do that because we cannot afford to do it. So we are back to your 
point, I say to the gentleman from Texas [Mr. Stenholm], of a budget-
driven system.
  Do we really want our health care to be part of a budget-driven 
system?
  I yield to the gentleman from Illinois [Mr. Hastert].
  Mr. HASTERT. I thank the gentlewoman for yielding. She is somebody 
who has done a great deal work on health care and really led the charge 
and really being analytical in trying to find out what the real 
problems are and what the answers are. We salute you for the work you 
have done.
  When you start to look at the employer mandate, I guess you have to 
look at the practical side. What is the problem? The problem is that, 
you know, there are a lot of people who have small businesses and are 
small business people, proprietors, partnerships. That interprets in my 
district to farmers, truck drivers, barbers, beauticians, who do not 
carry insurance on themselves, not because they do not want to insure 
themselves or their families, but they cannot afford it. It is a market 
problem. It is an insurance market problem.
  When they go to market, and if you are a 50-year-old couple and you 
run the corner doughnut shop in a small crossroads town and you have to 
go down to the neighbor store and buy your insurance, you maybe are 
paying $8,000 or $9,000 for insurance. Your total salary might be 
$18,000, $19,000, $20,000, $25,000. The fact is you cannot afford 
insurance.
  So what we have to do, in my view, instead of applying employer 
mandates on the very people who are the problems because they cannot 
afford to buy that insurance today, you have to find ways for them to 
come to the marketplace and get a good deal.
  What is a good deal? Well, there are a lot of good deals out there 
today, because people have the ability to pool, to go into mass groups, 
and have mass purchasing or self-insured ability, to go out and buy 
insurance for themselves.
  Mr. GRANDY. If the gentlewoman will yield further, self-insurance is 
a casualty of health care legislation in this Congress right now.
  As the gentleman knows, self-insurance, the ability of employers to 
fund their own insurance, create their own benefit program and enjoy a 
risk of preemption, is going to be seriously challenged under this 
legislation, and mandates are essentially an admission that markets 
have failed when, indeed, they have succeeded in large businesses and 
in small.
  Mr. HASTERT. When you get out in the hustings, and I am sure you have 
done so in Iowa recently and as I have been doing in Illinois and 
seeing what the problems are, seeing how people start to solve those 
problems, there are in the market responses, and there are companies 
out there that are very successfully putting small groups and small 
businesses together, giving the ability to self-insure and holding 
their insurance costs down.
  What the real issue out there is, and I guess the fear that we all 
have, when you put down an employer mandate, whether it is the feed 
store, you know, at Chases Crossing out in Lee County in Illinois, or 
whether it is a little corner coffee shop in downtown Dixon, IL, or a 
restaurant in Geneva, IL, when you start to put that mandate on and 
people have to come up with a 7.8-percent or if the Government does 
start to fund and subsidize 4.4-, 5.5-, or 6-percent subsidy out there, 
that, you know, they do not have that margin. The alternative is you 
skinny down to a mom-and-pop organization where you let go of those 
people who you have to insure, or you would just close the doors, and 
for a lot of people that is the solution; you close the doors. You do 
not take on that liability, because you cannot afford it. Your margin 
is not there to do it.

                              {time}  2050

  And some statistics show that CONSAD estimate impacts of health 
security in Illinois show that we would lose 42,000 jobs at a cost or a 
loss in salaries of almost $1.5 billion. You know, that is 
catastrophic. That certainly is discouraging to a thriving economy, 
also to bring competitive not just within your State or nationally but 
internationally. That is where a lot of these small businesses are.
  Again, I appreciate the gentlewoman from Connecticut bringing this 
issue up tonight.
  Mrs. JOHNSON of Connecticut. I yield to my colleague, the gentleman 
from Minnesota.
  Mr. PENNY. I thank the gentlewoman for bringing up this special 
order. I would like to follow up on the point just made on the impact 
upon the economy and on jobs, which is at the heart of the discussion 
over mandates.
  We all remember the remainder posted in the Clinton campaign war room 
in the final weeks of the 1992 campaign. The reminder posted there on 
the wall was, ``It's the economy, Stupid.'' They stressed the economy, 
they stressed there was going to be a change as to policies at the 
national level to stimulate the policy to create jobs, and here we have 
a health care plan that is hinged on an employer mandate, which is 
indisputably the most expensive mandate on private business that has 
ever been contemplated by the United States Congress. It is absurd on 
the face of it. Common sense dictates that you cannot create a job 
climate, a favorable job climate, by placing on businesses a huge 
mandate representing perhaps as much as 8 percent of payroll. 
Businesses now must contend with any number of mandates from both the 
Federal and State levels of government. We have OSHA requirements 
placed on every business large and small. We have the EPA now looking 
over the shoulders of virtually every business in America because 
almost every business uses or produces or disposes of some item that is 
categorized as hazardous. So, under the hazardous waste regulations of 
the EPA, you have very expensive requirements being placed on 
businesses as to their use and disposal of those materials.
  Recently we passed the Americans with Disabilities Act, as well-
intentioned law, but here again one that will require tremendous 
renovation costs for businesses all over America as they try to make 
their places of business more accessible to those with handicaps.
  Also, fire code standards as well; the list goes on and on. This is 
just an itemization of four expensive mandates that businesses have 
accepted and worked hard to adhere to.
  Payroll taxes, though, are already hitting businesses hard, and it is 
regressive in the sense that lower-paid workers pay all these payroll 
taxes, and they cover only the first increment of income. But between 
social security and medical payroll taxes, and given the fact that 
businesses not only pay the employee's share but they match with the 
employer's share, it is a huge expense for businesses.
  Then last year's tax bill. For all of the rhetoric of it only 
affecting 2 percent of all American taxpayers, we have to admit that an 
awful lot of folks affected by this were small-business people because 
of the way they structure their business.
  So, what few tax increases were in that tax bill fall on people in 
the small-business category to a greater extent than anyone else.
  So, now to be looking at the possibility of an 8 percent mandate is 
the height of absurdity. You cannot be focused on the economy if you 
are talking about burdening the job creators in our economy with 
another 8 percent hit. Because the administration realizes that this is 
an expensive proposition for the businesses in America, they say, 
without a smirk on their face, that they will just provide subsidies to 
the smallest and least profitable businesses. Businesses do not want to 
be related to the Federal Government in an entitlement relationship. 
They do not need nor want that kind of a subsidy from the Federal 
Government. Yet that is the way we are being told we can sell this 
mandate to the business sector. We have to get real, we have to get 
real; this is an expensive hoax. You do not need a mandate in order to 
cover the uninsured. The Cooper-Grandy bill, one of whose sponsors is 
with us here tonight, has been analyzed without a mandate on the 
business sector; the coverage of American workers under a health plan 
would reach about 91 percent.

  In Hawaii, the only State with a mandate similar to the one we are 
talking about in the administration's health plan, they only have 92 
percent coverage.
  Now, you can get extensive coverage of the currently uninsured 
without a mandate. This is a very expensive way of approaching a 
problem, and it is an approach that is going to place tremendous 
burdens on the private sector and it will cripple the economy and fly 
in the face of the promise of the Clinton Presidency, which was to 
focus on the economy like a laser beam and to create meaningful jobs at 
decent wages for American workers.
  You cannot do that with this sort of an expensive mandate. And I do 
not believe you can pass health care reform on a bipartisan basis with 
a mandate. The tragedy of this whole issue is that because of this one 
distraction, the pretense that somehow a mandate has to be central to 
health care reform, because of this one distraction we have basically 
written off Republican support for health care reform when there is so 
much more we can agree on.
  Mrs. JOHNSON of Connecticut. Absolutely. Health care reform is going 
to be such an important bill to implement. It is going to take 
bipartisan support, not just to pass it but it will take bipartisan 
support in the years ahead to implement a policy that will guarantee 
universal access to all Americans, to high-quality health care. The 
tragedy is an employer mandate is not only not necessary to achieve 
that goal but it will have devastating effects on our economy.
  I was talking to one of the White House researchers who was central 
to proposing their initiative, and he said to me, he said there are two 
things an employer can do if he has to provide health benefits to his 
employees. He can cut wages or pass the cost on to the consumer. And I 
said to him, in my part of the country, where the economy has been 
terrible, I have seen companies grow orders in the last 9 months, 12 
months, in a way that made my heart surge. Then when I say, ``Isn't 
that wonderful,'' I see the sort of hound dog look creep over the faces 
of our employers when they say, ``Yes, but prices are so soft the 
margin is the same as a year ago.'' You cannot raise price anymore, not 
on the international market, not on the domestic market. That leaves 
wages. If this is not going to kill wage growth, I do not know what is. 
It is good social policy to make sure everyone has access to health 
care and it should be dealt with as social policy and funded in that 
context, but not funded through a hidden tax on employers, who have no 
margin of profitability.
  Mr. Speaker, I yield to my friend and colleague, the gentleman from 
Florida.

  Mr. STEARNS. Mr. Speaker, I thank the gentlewoman from Connecticut 
for taking out this special order. I would like to follow up a little 
bit on what our colleague, the gentleman from Minnesota [Mr. Penny] 
referred to when he referred to the bipartisan issue in terms of 
believing that mandates will hurt businesses.
  Now, tonight we will be talking about this individually, but I want 
to quote some statistics so that this is not just Members of Congress 
talking but this is a leading health care consulting firm, Levin-VHI. 
They did a study on the Clinton health care plan. The analyzed the 
whole thing. They found and confirmed a lot of what we are talking 
about tonight, and let me talk to you about what their results are. 
They said a mandate on businesses would result in the elimination of 
between 155,000 to 350,000 jobs. Many of these jobs would be lower-wage 
positions, affecting workers in the retail and service sectors. This 
analysis determined that once in effect, the Clinton plan would 
decrease wages by $20 billion by 1998.
  Now, the Citizens for a Sound Economy, in my home State of Florida, 
found that if the Clinton plan were to be adopted, the result would be 
a choice between health care rationing or the loss of 31,000 private 
sector jobs in the State by the year 2000.
  Now, I want to read just a letter from a manager of a Dairy Queen in 
Ohio, what this woman said in relative quantity terms of how it affects 
her business.
  And many small businesses are just about this size, 25 employees.

                              {time}  2100

  She says,

       I am a small-business owner (25 employees) working very 
     hard along side my husband to build a future for ourselves.
       We do not have a profit margin to support the President's 
     proposed 80% burden of health insurance costs. Even with the 
     proposed subsidies, a 3.5% rise in payroll costs will 
     seriously challenge our ability to stay in business. This is 
     not an exaggeration. What options does a small business owner 
     like myself have? We've considered cutting our staff, 
     freezing all wage increases indefinitely and raising our 
     prices. Also, we could not invest in new equipment, store 
     upgrades and the hope of ever expanding our business--there 
     would be no money left for these things. I haven't even 
     mentioned the desire to eventually begin receiving an income 
     from all of our hard work.

  I hope tonight we can bring out more of these down-home statements 
from honest-to-goodness small business people and what they are saying. 
We have that. Bring out some of the myths that have been involved with 
the Clinton plan, and of course I think we can talk about what the 
polls have shown over the last year and a half.
  I say to my colleagues, you go to the ABC poll, the CNN poll. The 
American people do not support mandates either, so it's hard to 
understand why the administration is making this the focal point of all 
of health care when here we have a bipartisan group saying this is 
wrong, and, as Mr. Penny has pointed out, it is stymying our ability to 
come forward with meaningful health care reform.

  Mrs. JOHNSON of Connecticut. It certainly is a matter of economic 
growth, and I would like to yield to the gentleman from Texas, Mr. Pete 
Geren.
  Mr. PETE GEREN of Texas. Mr. Speaker, I thank the gentlewoman from 
Connecticut [Mrs. Johnson] for yielding, and I also want to add my 
words to those who tonight thank her for having this special order to 
help us explore this issue in greater detail. It is an issue that is in 
front of us as Members of Congress, and it is the issue, I think, that 
has done more to drive a wedge between where we are and the chances of 
accomplishing meaningful health reform than any other issue in front of 
us as a Congress, and the reason is because we, those of us here 
tonight, most of the Members of Congress and most of America, 
understands the importance of small business.
  Small business, and I borrow from Chevrolet, but small business is 
the heartbeat of America. That is where our job growth comes from. That 
is where our innovation comes from. That is what keeps us on top of the 
world in so many areas, and that is in spite of this tremendous number 
of unfunded mandates that the Federal Government, and the State 
Government, has continued to lay on top of small business.
  The gentleman from Minnesota [Mr. Penny] went into some detail on 
that, but it amazes me what kind of resiliency our business sector has 
in spite of all we do to it. But it has got a strong heart, and it has 
got determination, but it cannot continue to take it, and it cannot 
continue to survive with the kind of burden that we continue to shovel 
on it. It is drowning in a sea of red tape.
  Mr. Speaker, these small businesses do not have a room full of 
lawyers, a room full of accountants, to figure out this maze of 
regulations that would come with a mandate that had exceptions and 
offered all sorts of ways to either qualify or not qualify for the 
various subsidies associated with it, and to expect them to have to 
live with that kind of regulation and burden is unrealistic. People who 
ask that of them do not understand how hard it is just to keep the 
doors open and keep the business going, and that would be the most 
expensive mandate of all.
  In Texas they have estimated we would lose 52,000 jobs if this 
mandate were put in place. The President's own estimates, his economic 
advisers have said, it would lose 600,000 jobs nationwide. That is a 
lot of families who would suffer if this were to be put in place. These 
cumbersome and expensive mandates, people wonder why the jobs are going 
elsewhere, why they are going overseas. Well, Mr. Speaker, I say, you 
don't have to look very far. With mandates such as these, folks just 
get tired of it and give up.
  And want to make one point. Is there a particular group that would 
suffer in this? And there is. It is the first-time job seeker, the 
young men, the young women, right out of high school and college at the 
beginning of their career. They are at their lowest earning capacity 
that they will have in their entire career. They may start out at 
$12,000, $15,000, $18,000 a year, and perhaps even lower, and add the 
cost of an employer mandate for health care premiums on top of that, 
and it makes them unemployable. That is who is going to pay the price 
here, these young people who are struggling, who have it as tough as 
any group of young people have ever had it in the history of this 
country, and we are going to shovel another burden on their back and 
make it so much more difficult for them to get started. I do not think 
any of us have to be told how hard it is for them to get started today 
in the current climate without having this $2,000, $3,000, or $4,000 
cost associated with their first job. It is not fair to ask that of 
them.

  Let me just close with a personal anecdote. I had a lady come up to 
me at a bakery that is in my neighborhood. It is a small bakery. They 
have got about 12 employees, some part time, some full time, and she 
said:

       We are barely getting by right now. If this mandate were to 
     be put upon us, I'd close my doors. My parents owned this 
     before me. We have been a part of this neighborhood my whole 
     life, and, if this mandate were to come about, and, when I 
     look at what I'm able to pay my employees, and none of us 
     gets rich, not the owners, not the ones who work here, but, 
     if I'm forced to pay health insurance for these folks, we are 
     gone. We're out of business. We'll be out of business the day 
     that mandate takes hold and becomes a requirement for this 
     little bakery.

  Those are the kinds of bakeries and businesses that truly are the 
heart and soul of our country. They are the heartbeat of America. It is 
the American dream, and these kinds of mandates, without Congress 
considering the consequences, are really what is denying the American 
dream to so many people and putting the American dream further and 
further out of reach, and again I just want to thank the gentlewoman 
from Connecticut [Mrs. Johnson] for having this opportunity to discuss 
this issue, and I appreciate the leadership she has shown on it.
  Mrs. JOHNSON of Connecticut. I thank the gentleman from Texas [Mr. 
Pete Geren].
  As my colleague knows, Americans, as a nation, do not often 
appreciate our own freedom and individuality. When I was elected to 
Congress in 1982, Mr. Speaker, we were in a state of very serious 
recession. Many of the towns I represented had 16, 18, 20 percent 
unemployment. In fact, several of us here are the class of 1982, and 
times were terribly, terribly tough. In that first term I must have had 
two or three different groups come through my office. I guess it was 
the first year of the next term, and they were trying to determine why 
it was that America recovered from that recession 3 years ahead of 
Europe. So this must have happened in my office about 1985, 1986, and 
the answer that they came up with was our small business sector.
  Mr. Speaker, we have a small business sector that is able to hire, 
able to grow. The minute there is a turnaround it gets going. Europe 
does not have that anymore because the burden of mandates on Europe is 
so extraordinary on small businesses that they have not had any net job 
growth at all in the last decade. In America we have not had any net 
job growth in our corporate sector. All of our net growth has been in 
the small business sector, and that is why this issue matters so much.
  There is no need to solve our health care problems by destroying the 
ability of our economy to grow, its vitality, its resilience, the 
people who have an idea to get into business and make it on their own, 
to destroy the concept of individual opportunity and the reality of 
individual opportunity in America. To solve our health care problem, we 
can do so in so many other ways. It would be a tragedy.
  I just want to give an example of skinnying down. My colleague, the 
gentleman from Illinois, talked about this. Believe you me, people are 
in my office every day showing me pictures of equipment, equipment they 
could buy in order to run their fast food restaurant with two people 
instead of seven. So, it is not just the jobs that we see that are low 
paying, and we think, ``Oh, yes, they'll go.'' It is the restructuring 
of whole sectors of our businesses, substituting machines for men, 
because the cost of labor has increased. We saw it in manufacturing. 
Rising costs drove the mechanization of many industries. We have begun 
to see it in agriculture.
  I have gone on too long. I yield to the gentleman from Iowa [Mr. 
Grandy].
  Mr. GRANDY. I just want to say one of the erroneous assumptions that 
we are working under is that somehow America has failed to provide 
health care to its workplace and to its citizens, and the only reason 
we have a successful voluntary, employer-provided work benefit system 
in this country is because markets have worked, not mandates.
  After World War II, when veterans started coming home, and there was 
a tremendous surge in our economy, and the competition for qualified 
labor was intense, it was not wages that drove the workplace. It was 
benefits, principally health, and that has really fueled our desire to 
do more, and then obviously in the early 1960s we decided we would 
create a Federal program for the elderly and then for the indigent.

                              {time}  2110

  Yet, really now we have a successful voluntary work-based system, 
which we somehow now think we have to scrap and reconfigure with a 
mandatory employer-based system.
  The problem that I have with that is that will unleash a surfeit of 
unintended consequences, which the gentlewoman knows has already begun 
to materialize in the Committee on Ways and Means. Just today we 
considered an amendment called the Jefferson amendment, based after our 
colleague from Louisiana [Mr. Jefferson] which was designed to mitigate 
the adverse effects of the employer mandate which we had passed just 2 
days before. So already we are offering the poison and the antedate in 
the same spoon.
  But the purpose of the Jefferson amendment was to give back to small 
businesses that which we were already taking away, which was their 
ability to do business, their ability to meet cost, and we created a 
new subsidy program which was two-tiered.
  For those businesses between 26 and 50 employees, there would be 37.5 
percent replacement of their health care costs for those businesses. 
Under 25 there would be a 50-percent replacement. Very generous. But 
you have to ask yourself, why are we doing this in the first place? 
Because we have essentially acknowledged that the mandate is so 
detrimental to those businesses that the gentlewoman just talked about, 
that Mr. Hastert referred to, the barber shops, the grain elevators, 
the seed and feed companies, that we feel obligated to given them 
something back.

  Now, the problem is, and this goes back to what I said to my 
colleague from Texas, Mr. Stenholm, is our compassion to kill the small 
business community with kindness, will force these businesses to become 
dependent annually on Federal subsidies and the budget process. I think 
my friend from Texas would agree with that.
  What we know is that an 80-percent requirement on your benefits is a 
floor. It will not be any less. As a matter of fact, the gentleman's 
amendment to that effect was defeated in the committee today.
  What we also know is the subsidy is a ceiling. It will not get any 
higher. It will go down. If we need the money, we will go and get it. 
But they will still have to pay 80 percent.
  So what we will do is we will winnow away, confound, confuse, and 
undersubsidize, after promising small business we would 
fully subsidize them, to the point where Mr. Geren's comments about 
bakers saying, ``I don't want to be a backer anymore,'' will apply to 
hair stylists, it will apply to people in the upholstery business. It 
already applies to farmers, as I mentioned earlier. And we will 
essentially drive an incentive out of that one engine in our economy 
that is robust.
  That is the unintended consequence that I think the unemployment 
mandate perpetuates, and it is a pernicious incentive in our economy, 
because it will force employers that do stay to keep their wages low so 
their subsidy will be high. It will force employers not to expand, 
because their subsidy will be less if they stay small. Ultimately, and 
this goes back to what we learned from the farm programs, it will force 
honest people to game the system.
  Mr. STENHOLM. I would make a couple of observations. Here, the three 
of us on our side of the aisle tonight participating, are hoping we can 
set a little better tenor of the debate, to have more people understand 
that the employer mandate is in deep trouble, on our side of the aisle 
as well as the other side. The votes are not there to pass it, for the 
reasons, that we are articulating.
  If you will permit me another analogy going back to agriculture, I 
often make the observation that aren't we blessed to live in a country 
that has the most abundant food supply, the best quality of food, the 
safest food supply, at the lowest cost of any other country in the 
world? No other country in the world feeds their people within 1\1/2\ 
percent of gross domestic product as we do in America. We hear all of 
the complaints about the farm programs, et cetera.
  With health care, are we not blessed to live in a country with the 
best doctors, the best nurses, the best hospitals, the best medicine, 
the best technology, the best of everything? But not at the lowest cost 
of any other country in the world. At the highest cost. And it is that 
fact that brings us to even having a serious debate of health system 
reform, of which I believe all of us tonight agree we need to reform 
the system.
  But to reform the system, we must do as we have done in agriculture: 
Put the market back into it, not take it from it, and recognize that 
some of the failures of our health system have been because we have 
somehow tried to remove the market, the cost of the individual from 
that which he or she is receiving. And I firmly believe, as long as we 
do things like, for years, as long as Medicare paid for it, or Medicaid 
paid for it, it was free. There was no cost. Use it and abuse it.

  I like to use the example of a Medicaid mother in one of the towns in 
my district that went to Dr. A, and the doctor says your daughter, 9-
years old, has an earache, and prescribed a medicine. The mother was 
not satisfied with that analysis.
  She went to Dr. B, Dr. C, Dr. E, and Dr. F. It was free. Anything 
that we make as free is going to be used and abused. The same for 
years, if insurance paid for it, once you got through your deductible, 
use it and abuse it. And then we wonder why the cost went up. Now we 
are knowing the premiums are going up.
  So one of the major reasons that I oppose employer mandates is that 
if you force the employer to do something on behalf of me, the 
employee, without giving me a chance to vote and to understand that 
this is my salary you are talking about, and as Mr. Geren pointed out, 
my job you are going to take away from me, you are doomed to failure. 
If we in fact move away from individual responsibility by somehow 
superimposing that we can mandate on businesses to do perhaps what our 
employees do not wish to be done for them in the way that we do it, I 
would submit to all of us, that we are going to be doomed to failure.
  Mrs. JOHNSON of Connecticut. You know, Charlie, we have tried this 
mandate thing once. My State is a high mandate State. All States have 
mandated certain health benefits on any plan that was going to be 
offered to the public.
  In Connecticut we kept saying if you are going to do health care, you 
have to offer X, you have to offer Z, you have to offer this and that. 
We piled so many mandates on our health benefit plan that finally the 
private sector said I can not afford it.
  But, they were able to escape. They did not have to drop their health 
benefit plan, because they could end-run the State government's 
mistakes and selfinsure.
  So the great majority of companies selfinsure, and they are not 
governed by State mandates. They mprovide good health care for their 
employees, but they provide it out from under the State mandates.
  Recently, in Connecticut we had a Texas company come up, provide 
benefits to our small businesses, and all of a sudden the insurance 
commissioner said hey, wait a minute, Bud, you are not complying with 
State mandates.
  Well, there was technical reasons why the company did not think they 
had to. In the end the insurance commissioner ruled that they did have 
to. The company complied, and the premiums went up 30 percent.
  So once government gets mandating, costs go up. and one of the things 
we have to all think about is not just what is the impact of the 8 
percent payroll tax that we know is attached to this health care plan, 
and it is 9 or 10 percent now because every committee that has 
considered the bill has expanded the mandate. But in 10 years, what 
percent of payroll is that?
  When Social Security was first introduced, it was 1 percent of 
payroll, or 3 percent of parole. Now it is 15 percent. One, okay? Now 
it is 15 percent of payroll.
  One of the reasons why this employer mandate is not only death for 
those little companies who have no margin and cannot afford to provide 
health insurance at 8 percent of payroll when we mandate them, but it 
is death for those who are currently providing health care, because we 
will mandate an ever bigger package, drive their costs up, and they 
will not be competitive in the international or domestic market.

  Mr. HASTERT. I think the gentlewoman from Connecticut makes a good 
point, as does the gentleman from Texas. I am reminded when I go back 
to my districts, and 75 percent of all the jobs in my district in the 
Fox Valley of Illinois are small businesses. Most of those are under 15 
employees, a lot of them under five. But you know, 70 percent of all 
the new jobs that were created in the last year and a half in my area 
are small business jobs.
  They tend to be people who retire or are forced out of the Fortune 
500 companies, are entrepreneurs, start their own business with two or 
three people, providing new services. A lot of them are in software and 
other types of computer areas, but also some just hard work small 
businesses.
  When we start to put that employer mandate out, those are the 
marginal businesses. They are gone. And we stifle, stop, that business 
growth, that economic growth, that spurt that we have enjoyed, that has 
really buoyed our economy for the last couple years.
  It is interesting, I have a lot of agriculture in my district, but it 
is changing agriculture. Corn fields are turning into nurseries and sod 
farms as the city-suburbs move out. I have one employer that has a 
pretty good size nursery business, a mom and pop operation. But last 
year they had 250 employees that worked for them. 250. Not more than 18 
at any one time. Because they are part-time, they move in, they move 
out. Think of the book work, think of the absolute problem of trying to 
keep these people involved, trying to keep the books, trying to sort 
things out. It is amazing.

                              {time}  2120

  Mrs. JOHNSON of Connecticut. Then they get into the enrolling 
employer and the nonenrolling employer.
  Mr. HASTERT. It is absolute chaos.
  One thing I want to wind up with, it happened in our office today. I 
guess it is just the principle of economics. It really does not have a 
lot to do with health care.
  We were having a hard time getting the White House tickets. Somebody 
is getting a lot of White House tickets. So we called the White House 
and said, what is the problem? She said, well, you are supposed to get 
10 tickets a week. I said, we used to get six tickets a week, and we 
got tickets. We have not got any tickets for the last 8 weeks.
  She said, the reason you have not got any tickets is because we upped 
the allotment, and we ran out of tickets.
  When you start to look at the supplies, we can start to subsidize 
small business, but when the money runs out, there is not going to be 
any help for small business. When you up the allotment and there is not 
anything to take its place, people lose. Certainly, a Band-Aid on all 
business, I think, is a loser.
  I thank the gentlewoman from Connecticut for having this special 
order tonight and including us.
  Mr. PENNY. I, too, want to thank the gentlewoman from Connecticut for 
sponsoring this special order, because of all the issues that are 
floating around, this issue of an employer mandate is the most 
divisive. And it represents the sort of wrong-headed approach to health 
care reform that has dominated the debate to date.
  When we can point to bipartisan consensus on issues such as 
portability of health plans, coverage of pre-existing conditions, 
malpractice reform, some sort of subsidized premium for the working 
poor, reforming the Medicaid program so that it becomes a premium-based 
program with deductibles and copayments, as would be required of any 
other individual under a normal health insurance plan, when we can find 
agreement on so many issues across the aisle, agreement between 
Democrats and Republicans, it seems to me an absolute waste of time for 
us to talk any longer about the need to place an employer mandate at 
the core of this health care reform bill.
  It is a job killer at a time when we need to be about the business of 
creating more jobs in our economy. It is the most expensive mandate 
ever conceived by Federal policy makers. And this appeal tonight, and 
again, I thank you for your leadership in pulling us all together for 
this discussion, the appeal tonight is to those in positions of power 
within the Congress, the chairmen of the appropriate committees, and 
for those in the administration who have this wrong-headed notion that 
somehow mandates are the only way to universal coverage, get off this 
track. It is creating a wedge, it is creating a wedge here in Congress, 
and it is creating a wedge in the electorate.
  We will not find our way to real and serious health care reform as 
long as we focus the debate on an unnecessary and expensive mandate.
  Mr. GRANDY. I would just applaud everything the gentleman says. Let 
me just ask him a question.
  The gentleman has been here for 10 years, a long gladiator in the 
fight for deficit reduction, usually a lonely combatant.
  Does he really believe that we would even be considering an employer 
mandate as an option for health care reform financing if we had the 
money in our public Treasury to pay for it?
  Clearly, what we are doing is shifting the cost, because we ain't got 
it. The public sector has no money. The private sector, so we think, is 
flush, an erroneous assumption. So why not make them pay for it, mask 
it under our CBO scoring and declare victory.
  I just ask that of the gentleman because he has established his 
reputation in this House as a pork buster and a budget shiite, and many 
of us have followed him into battle. But is it not true that the only 
reason that we are seriously considering this option is because we are 
broke?
  Mr. PENNY. Well, that is a big part of it. The administration, of 
course, wants universal coverage. And the last increments of coverage, 
the last few people that we pull into the system are always the most 
expensive to bring into the system. Of course, one way of dealing with 
the cost of providing universal health care coverage is to mandate that 
the private sector absorb that obligation.
  But I also want to add this caution: It may be a way of getting these 
costs off the Federal books, but the amount of money it will take to 
provide universal coverage through an employer mandate is many times 
more expensive than what it would cost for a modest voucher-type system 
through the Federal Treasury, many times more.
  Mrs. JOHNSON of Connecticut. All the studies have shown that.
  Mr. PENNY. Every study has made that perfectly clear.
  Mr. GRANDY. But it is a great short-term fix to keep it off our 
ledger.
  Mrs. JOHNSON of Connecticut. I think the other point about this, 
because I think this is an extraordinarily important point, there is 
only part of the Federal budget that is totally out of control. And 
that is the entitlement section.
  We have actually been quite tough where we have to appropriate. It is 
in entitlements that we have not been able to gird our loins and adopt 
reforms. This is going to be an entitlement that we mandate on business 
to pay for. It has the potential to just get out of control in the 
decade ahead.
  Mr. PENNY. And we have an example of that already on the books.
  The workers' compensation program. It is required of every business 
across America. And States under this program are given some 
flexibility to design somewhat more generous benefit levels. In the 
State of Minnesota, we saw for a series of years throughout the 1980's, 
20, 30 percent annual increases in workers' compensation costs to the 
private business sector.
  I recall specifically sitting in a restaurant in Montgomery, MN, a 
town of a couple thousand people, not a large community, and talking to 
the owners and operators of that business. It was a family restaurant, 
and how difficult it was for them to absorb those costs.
  Those cost increases were mandated upon their business, because 
through Federal and State policy we made that system so generous and so 
expensive and gave those businesses no alternative except to pay the 
bill. And it resulted in them cutting back on hours for their work 
force. It resulted in family members working ever longer weeks in order 
to put in the time to make that business stay afloat, because they had 
to fill in with their own overtime the time that would otherwise have 
been offered by paid employees of that business.
  I could go down Main Street in almost every town in my district, and 
bear in mind, with few exceptions, these are small towns and these 
businesses provide relatively few people, but that mandate has 
devastated the small business sector in Minnesota in recent years.
  If we move toward a Federal mandate on health insurance premiums with 
the open-ended nature of that sort of program where we can add benefits 
year after year and then those costs just start to layer on, we are 
going to cripple the business sector for many, many years to come.

                              {time}  2130

  Mr. Speaker, I am just baffled that we seem to be focused on this 
mandate when the promise of this administration was to be a job 
creating administration, and now in their second year, their top 
priority is a health care reform plan that includes within it a job-
killing initiative.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, before I yield to my 
colleague, the gentleman from Florida [Mr. Stearns], I want to 
reiterate what a very, very important point the gentleman just made, 
because few people are really understanding that adopting an employer 
mandate will turn health care costs into a fixed cost, just like 
workmen's compensation is a fixed cost. That fixed cost gets driven by 
government, government mandates, government bureaucracies unable to 
effectively control costs, but it is you that pays and you that cannot 
hire and you that has to close up your shop.
  The only folks in America right now who are controlling health care 
costs are people in the private sector. You read every day about 
companies that provide bonuses to their employees if they participate 
in a wellness program.
  I just had a company in my office the other day. Last year they gave 
a 15-percent copayment break to those employees who participated in 
their wellness program, and this year, because it has affected their 
health care costs and brought them down so much, they are going to give 
everybody a 25-percent break.
  It is in the private sector where employers and employees have worked 
together and thought, ``What is causing our health care costs to go up? 
What can we do to control it,'' and working together, sometimes by 
having a doctor right in the plant so things get taken care of right 
away, sometimes by giving people the time they need to get that kid to 
the doctor right away, so it does not get really sick.
  It is employers and employees working together that have brought 
medical inflation rates down to about 5 percent. What are they in the 
government sector? They are still right up there, 9 percent, 10 
percent.
  The gentleman's analogy to workmen's compensation is a very serious 
one, because while we talk about the job loss of an employer mandate, 
we forget it will literally tie our hands in terms of addressing the 
cost spiral that Charlie talked about, and which is the real problem, 
which is what has caused the crisis in our health care system.
  Mr. Speaker, I yield to the gentleman from Florida [Mr. Stearns].
  Mr. STEARNS. Mr. Speaker, I thank the gentlewoman for yielding to me.
  Mr. Speaker, I think in our discussion today each of the Members on 
both sides, bipartisan, have talked about this increase, this mandate, 
what it will do to the loss of jobs in their district and in their 
district and in their State. The gentleman from Minnesota [Mr. Penny] 
touched on the idea that this whole concept of pushing mandates is not 
something that is going to create jobs.
  Mr. Speaker, I just want to say that if Members of Congress on both 
sides of the aisle are against mandates and we have Lewin VHI, which is 
an outside accounting firm, say it is going to lose jobs, and then we 
go and ask the American people in polls, which I am going to read three 
here today that are against it.
  The USA Today-CNN-Gallop poll of November 1, 1993 said, ``Sixty-four 
percent believe employers should be encouraged by tax breaks, not 
required to pay health care costs for their workers.''

  The USA Today-CNBC poll of 55 economists, 78 percent said the 
enactment of President Clinton's health care plan would slow employment 
growth.
  The Wall Street Journal-NBC poll of September last year said 55 
percent agree that the President's health care plan would force small 
businesses to close.
  Mr. Speaker, if we have the American people believing that, we have 
the bipartisan group here in Congress believing that, and we have an 
outside accounting firm telling us, what more do we need? Why can not 
tonight, tomorrow, and from henceforth we start on a bipartisan group 
to get health care reform, to increase access and affordability, but 
still maintain a high quality? Why can we not do it? It is obvious.
  Mr. Speaker, I think what we have tonight in this special order, in 
conclusion, is a feeling that we have to change the focus away from 
employer mandates and get back to what the people, what the outside 
accounting firm, what the economists, and what bipartisan people here 
in the Congress want is a new health care reform package without 
employer mandates.
  Mrs. JOHNSON of Connecticut. Absolutely.
  Mr. STENHOLM. If the gentlewoman will continue to yield, that is kind 
of along the lines of what I wanted to end up with, too. I made it very 
clear tonight, and we all have, what we are against. I think perhaps 
one of the answers to the comments of my colleague, the gentleman from 
Florida [Mr. Stearns], is do we have agreement on what we are for?
  I want to reiterate again what the gentleman from Minnesota [Mr. 
Penny] mentioned just a moment ago, because I believe, and I believe 
most Members of Congress believe, we should do something because of the 
cost spiral.
  For us to do nothing, I think the American people will hold us 
accountable, as they should. It is my firm belief, however, that we can 
do it without mandates, for the reasons we have articulated.
  I want to reiterate what I believe I know I am for. Mr. Speaker, I 
think we can use the market system in reforming purchasing groups, 
which we have talked about tonight. I think that insurance that is 
portable, that stays with the employees, is something we can agree to, 
that is renewable and accessible.
  Certainly, I would hope we could agree that malpractice reform must 
be in any reform effort. An affordable health standards package or 
affordable standard benefit package that is capped. I know that is 
controversial, but I think that is the key to putting the market into 
our health system.
  Other proposals: reform the health insurance market; subsidize 
individuals who cannot afford health insurance. A recent study by the 
Health Care Leadership Council reveals that 97 percent of all health 
care spending can be covered by insurance, and 91 percent of the 
population could be covered if three basic reforms are implemented: 
First, insurance market reform, second; premium subsidies; and, 
finally, 100 percent tax deductibility for the self-employed.
  Surely somewhere in that market basket we can find something that not 
only we oppose tonight, but that we are for and achieve not just 218 
votes, but perhaps 300 votes.
  I thank the gentlewoman for yielding.

                              {time}  2020

  Mr. HALL of Texas. Mr. Speaker, I rise today in support of universal 
health care coverage but in opposition to additional employer mandates 
as a means of achieving this goal. Health care for all is a noble--and 
I think achievable--cause.
  Universal coverage does not require universal change. It doesn't make 
sense to completely overhaul the system and tell employers and 
employees that they have to take what the Government says they have to 
take. It doesn't make sense to risk loss of jobs, reduction in wages, 
and business foreclosures by embarking on uncharted territory.
  According to the Congressional Research Service, in the past 5 years 
private employers' costs for legally required benefits rose by 30 
percent. In contrast, wages and salaries rose by 18 percent. To place 
another financial burden on businesses--or to force them to alter 
current employer/employee contracts--is unfair, unrealistic, and 
unnecessary.
  Instead, we should approach this noble cause with caution and 
concentrate our efforts on the uninsured who need to be brought into 
the health care system. We need to provide assistance to those up to 
100 percent of poverty and to provide help on a sliding scale for those 
between 100 to 200 percent of poverty. For those uninsured who can 
afford health insurance but elect not to purchase it, there should be 
financial incentives to participate.
  Market reforms should be implemented and given time to work. We need 
better reporting, improved consumer information to ensure responsible 
choices, and penalties for health care fraud. We need administrative 
simplification, antitrust reform, better access for underserved areas, 
and malpractice reform.
  We need coverage of preexisting conditions, guaranteed issue and 
renewability of policies, portability of policies from job to job, and 
modified community rating that adjusts for age and family size. These 
reforms have been needed for some time and can easily be enacted.
  We need to give these reforms time to work. In 3 to 5 years we will 
know what is working, what is not, and what else needs to be done. We 
need to build on the strengths of our current system--not dismantle it.
  Mr. Speaker, my colleagues in the House and I believe these market 
reforms will help contain costs while maintaining the high quality of 
health care that sets America apart from the rest of the world. I am 
optimistic that common sense will prevail and the Congress will resist 
efforts to force additional taxes and penalties in the form of employer 
mandates on businesses.

                          ____________________