[Congressional Record Volume 140, Number 123 (Wednesday, August 24, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  SBA PROPAGANDA ON HEALTH CARE REFORM

  Mr. PRESSLER. Mr. President, during my opening statement on health 
care reform, I took the Senate floor to decry the partisanship that has 
ruled this debate. The partisanship we have witnessed has brought 
meaningful health care reform to a standstill. As the ranking member of 
the Senate Small Business Committee, I wish to bring my colleagues' 
attention to another partisan act--this one orchestrated by the Small 
Business Administration [SBA].
  The SBA recently issued a press release in region VIII, which covers 
Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming. It 
may also have been sent out by other SBA regional offices. This release 
was received by my State offices in South Dakota. It outlined the 
benefits of the Clinton health care plan for small business and gives 
an example of one small businesswoman who would save money under the 
Clinton mandate/subsidy system.
  The SBA release does not give the real story on health care reform 
and small business. It gives one viewpoint--the administration's 
viewpoint. Many small business owners and small business advocacy 
groups strongly disagree with the administration plan for reform. There 
is no consensus that an employer mandate is fair or effective in 
containing costs and providing coverage. These real world experts 
understand that job loss and wage reduction would be the bottom line. 
Job loss estimates due to an employer mandate have run from 600,000 to 
3.5 million.
  I have talked extensively with small business men and women 
throughout the course of this health care debate. They have told me, in 
no uncertain terms, that an employer mandate would not protect them--it 
would put them out of business. An employer mandate of the type 
proposed in the Clinton/Mitchell bill would cost businesses in South 
Dakota $266,195,000 by the year 2002.

  The release purports to dispel misinformation about President 
Clinton's health care plan. In fact, the piece compounds misconceptions 
about health care reform by promoting the Clinton plan. The President's 
health care plan is dead. Congress is now debating alternatives. Some 
contain an employer mandate. As if their reliance on such a mandate 
were not bad enough, they fail even to offer an adequate subsidy system 
to help small employers. At the same time, there are viable proposals 
to help small businesses on the table. If the SBA intends to provide 
objective information on health care reform, shouldn't the agency 
include a comparison of all the plans and give people the chance to 
make their own decisions?
  I do not feel such propaganda is an appropriate use of SBA funds. 
Last year, the agency also put out a slick brochure advocating the 
President's agenda and tested a computer program and tool-free phone 
line to disseminate information about Clinton health care reform. Along 
with the ranking member of the House Small Business Committee, 
Representative Jan Meyers, I exercised my oversight duties as ranking 
member and fought to stop those activities. Now, we are in the same 
position. I said this before and I will say it again: it is not the 
mission of the SBA to act as a mouthpiece for President Clinton's 
health care reform agenda.
  Reasonable people may disagree, but it appears unreasonable, 
unlawful, and unethical to use taxpayer funds, supplies, and equipment 
to lobby for the administration's bill. Federal agencies are prohibited 
by law from carrying out lobbying activities. This release was sent, 
unsolicited, to media outlets in my home State and takes a particular 
viewpoint which can hardly be considered educational.
  Accordingly, I have requested that SBA Administrator Erskine Bowles 
provide me with some answers. I have asked Mr. Bowles to provide me 
with a list of everyone who received this release; the names of those 
who directed this effort; whether the General Counsel's Office was 
consulted as to its legality; and if similar lobbying campaigns have 
been conducted. I ask unanimous consent that this letter, also signed 
by three of my colleagues on the Small Business Committee--two of whom 
also represent region VIII States--be printed in the Record immediately 
following my remarks, together with a copy of the press release.
  The SBA release is correct in one respect. We are at an historic 
moment. The security of thousands of small businesses and their 
employees are at stake. It is critical that small business owners and 
their workers understand the stakes and the various proposals for 
reform. They need access to accurate and complete information to 
participate in this process. They do not need taxpayer-financed 
propaganda.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                  Committee on Small Business,

                                  Washington, DC, August 23, 1994.
     Hon. Erskine Bowles,
     Administrator, U.S. Small Business Administration, 
         Washington, DC.
       Dear Erskine: Enclosed you will find a copy of a press 
     release authored by the Small Business Administration (SBA) 
     Region VIII Administrator, Tom Redder. This release was 
     received last week by Senator Pressler's state offices in 
     South Dakota. We assume similar information was released 
     throughout the country. The release outlines the benefits of 
     the Clinton health care plan for small business and gives an 
     example of one small businesswoman who would save money under 
     the Clinton mandate/subsidy system.
       This release does not give the full story on health care 
     reform and small business. It gives one perspective--the 
     administration's viewpoint. Many small business owners and 
     advocacy groups strongly disagree with the administration 
     plan. These people understand that job losses and wage 
     reductions will occur if the administration plan is enacted. 
     Job loss estimates resulting from an employer mandate range 
     from 600,000 to 3.5 million.
       We have talked extensively with small business men and 
     women throughout the course of the health care debate. They 
     have told us, in no uncertain terms, that an employer mandate 
     would not protect them--it would put them out of business. 
     For instance, in the first year of implementation alone, an 
     employer mandate of the type proposed in the Clinton/Mitchell 
     bill would cost 1,708 jobs in South Dakota, 922 jobs in 
     Wyoming, 1,784 jobs in Montana and 18,616 jobs in Missouri.
       The SBA press release purports to dispel ``misinformation'' 
     about President Clinton's health care plan. In fact, that 
     release compounds misconceptions about health care reform by 
     promoting the Clinton plan. The President's health care plan 
     is dead. Congress is now debating alternatives. Some contain 
     an employer mandate. As if their reliance on such a mandate 
     were not bad enough, they fail even to offer an adequate 
     subsidy to help small employers. Many alternative plans to 
     help small businesses also are on the table. If the SBA 
     intends to provide objective information on health care 
     reform, shouldn't the agency include a comparison of all the 
     plans and give people the chance to make their own decisions?
       As members of the Small Business Committee, we do not feel 
     such propaganda is an appropriate use of SBA funds. The 
     concerns we have outlined here are the same as those 
     expressed to you earlier regarding the SBA health care 
     brochure, computer program and toll-free phone line. It is 
     not the mission of the SBA to act as the mouthpiece for 
     President Clinton's health care reform agenda.
       Accordingly, we wish to be provided with a list of all who 
     received this release, not only in South Dakota, but 
     throughout the country. Further, we want to be provided with 
     information about any and all regions which have conducted 
     similar ``lobbying'' campaigns. We also would like to know 
     who directed this effort. Did the direction come from SBA 
     headquarters? The White House? Who cleared the text of the 
     message? Particularly, we wish to know whether the General 
     Counsel's office was consulted as to its legality.
       Reasonable people may disagree, but it appears 
     unreasonable, unlawful, and unethical to use taxpayer funds, 
     supplies, and equipment to lobby for the administration's 
     bill. As you know, federal agencies are prohibited by law 
     from carrying out lobbying activities. The enclosed release 
     was sent, unsolicited, to a variety of states--perhaps to all 
     states. It takes a particular viewpoint which hardly can be 
     considered ``educational.''
       This SBA release is correct in at least one respect. We are 
     at an historic moment. The security of thousands of small 
     businesses and their employees is at stake. It is crucial 
     that small businesses owners and their employees understand 
     the stakes and the various proposals for reform. They need 
     access to accurate and complete information to participate in 
     this process.
       We look forward to hearing from you in the very near 
     future.
           Sincerely,
     Larry Pressler.
     Conrad Burns.
     Malcolm Wallop.
     Christopher Bond.
                                  ____


The Real Story on Health Care Reform and Small Business in South Dakota

                            (By Tom Redder)

       This is an historic moment--after 60 years of fits and 
     starts, of road blocks and dead ends, we are finally making 
     real progress toward comprehensive health care reform. For 
     the first time ever, both houses of Congress are 
     simultaneously considering proposals to guarantee all 
     Americans health care that can never be taken away.
       As the process moves forward, it is important that we 
     continue to focus the debate on the special needs of small 
     businesses. This is an extremely personal debate: the 
     economic vitality of South Dakota's eighteen thousand small 
     businesses and the health security of South Dakota's more 
     than 243,000 small business employees are at stake. South 
     Dakotans need to know the real story on health care reform 
     and small business.
       For small business owners who want to cover their 
     employees, the most important question is ``What will I 
     pay?''. Small business owners want to know the bottom line--
     what reform means for their business and their family. They 
     want facts, not ideology.
       Regina Jaramillo owns one such business, a small restaurant 
     in Topeka, Kansas, that she inherited from her parents. 
     Through that restaurant, she provides minimum wage jobs for 
     11 people. Regina pays more than $3,400 a year for health 
     insurance. Yet, that covers only the members of her family--
     but, none of her employees.
       Regina's situation resembles that of thousands of small 
     business owners in South Dakota and the rest of the country.
       The facts are that the most reasonable approach, and that 
     of the President, is about building on the current system by 
     providing guaranteed private insurance through the workplace. 
     Quite simply, the President believes that all Americans who 
     get up and go to work each day should have health care 
     coverage.
       Today, nine out of ten privately insured Americans get 
     their coverage through an employer. The simplest and least 
     disruptive way to cover everyone is to task employers to 
     share the responsibility. Yet, the question often asked is 
     ``Will this be good for the small businesses that do not now 
     cover their workers?'' Consider Regina's story:
       Under the President's approach, businesses like Regina's--
     those with fewer than 25 employees and average wages of less 
     than $12,000 a year--would have paid no more than 3.5 percent 
     of payroll to cover all of their employees.
       With the President's special discounts for small 
     businesses, Regina would have paid $3,100 to cover all of her 
     workers and her family, while today she pays $3,400 for her 
     family alone. In other words, the President's health care 
     plan would have allowed Regina to cover all 11 of her workers 
     and her family for $300 less than she pays now to cover her 
     family and none of her workers.
       Why then are small business owners in Regina's situation so 
     concerned with health care reform?
       First, there is a lot of misinformation about the 
     President's plan and other reasonable approaches in Congress. 
     Ideology, not the bottom line, has governed much of the 
     debate.
       Second, the difficulties small businesses face in today's 
     health care system make it hard for them to imagine being 
     able to more easily provide coverage.
       Little wonder. Consider what Regina faces today. Right out 
     of the starting gate, her firm is likely to be denied 
     coverage. Insurers commonly refuse to cover restaurants. 
     Under a practice called ``occupational redlining'', entire 
     industries, including everything from oil field operations to 
     lumber mills, are refused coverage at any price because they 
     are considered to be shaky financially or to have high-injury 
     risks.
       Regina then has to fill the role of an entire employee 
     benefits department--enrolling her employees, negotiating 
     coverage, and dealing with endless forms.
       When her health insurance bill arrives, Regina will likely 
     get hit again. She will likely be charged much more than a 
     large company for the same benefits--as much as 35 percent 
     more. Administrative expenses claim a large part; some small 
     businesses pay up to eight times what large firms pay on 
     these costs.
       Once Regina secures a policy, she still faces great 
     uncertainty. Her insurer can raise her rates, drop her from 
     coverage at any point or, if Regina or one of her employees 
     falls seriously ill, exclude that employee or radically raise 
     the rates for the entire company. Just when her family or her 
     employees most need their insurance, it might not be there.
       The President's approach would fundamentally change the 
     rules of the game and protect small businesses.
       The discriminatory insurance practices under which insurers 
     can refuse to cover certain businesses or exclude people 
     because of pre-existing conditions would be outlawed. Regina 
     and her workers would be guaranteed private health insurance, 
     a comprehensive package of benefits, and a choice of doctors 
     and insurance plans. Entrepreneurs would no longer have to go 
     out on their own and negotiate insurance coverage, or deal 
     with today's high administrative costs, hassle, and 
     paperwork.
       Most importantly, the President's approach would ensure 
     that affordable health care coverage is available to small 
     businesses. Substantial discounts--from 25 percent to 85 
     percent--should be provided for employer of low-wage workers. 
     And through buying groups, small businesses and the self-
     employed should have the bargaining power they need to get 
     the insurance rates that big businesses and government 
     currently receive.
       In Regina's case, that would mean better insurance for her 
     family and her employees--for less than she pays for just her 
     family today.
       Will health reform be good for your company, your families 
     and your workers? In the past few days, members of Congress 
     have begun to debate the concept that every job should come 
     with shared health benefits, as many have come to understand 
     that it is an economically sound approach. Simply put, 
     guaranteeing health benefits at work, with structured 
     discounts for small businesses, is good for the economy, good 
     for workers, and good for small business. In fact, the U.S. 
     Employers in South Dakota that currently offer insurance 
     would pay $630 million less in premium payments in the year 
     2000 than they would have without reform. Small businesses--
     who pay the most today--would gain the most under reform.
       Look beyond the rhetoric. Judge whether offering insurance 
     will help you attract and keep more productive workers. Get 
     the facts, calculate how much you would pay under each plan 
     that is debated, and decide for yourself.

                          ____________________