[Congressional Record Volume 150, Number 110 (Wednesday, September 15, 2004)]
[Extensions of Remarks]
[Page E1636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               JOBS ACTION TEAM'S COMPETITIVENESS AGENDA

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                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                     Wednesday, September 15, 2004

  Mr. KNOLLENBERG. Mr. Speaker, the focus of the Jobs Action Team's 
``Competitiveness Agenda'' this week is ending lawsuit abuse, and with 
good reason. The United States is the lawsuit capital of the world, and 
this puts American companies at a competitive disadvantage.
  Frivolous lawsuits are costing American businesses $129 billion each 
year. The U.S. Chamber of Commerce found the greatest impact is on 
small businesses--which contribute three-fourths of all new jobs, which 
face additional costs of $17,000 each year. This is unacceptable.
  The House of Representatives has responded by passing numerous legal 
reform bills. H.R. 4571, introduced by Representative Lamar Smith, 
passed the House yesterday. This bill provides for appropriate 
sanctions against those who file junk lawsuits. The Senate must act 
now.
  Americans should not have to fear life-ruining lawsuits. This should 
not be a country where individuals can file cases to get money wherever 
they can--many with no intention of going to court. Let's end lawsuit 
abuse now.

                   Liability Costs for Small Business


                               fast facts

       ``America's small businesses are the driving force behind 
     our economic achievements, and the U.S. Chamber is proud to 
     support and represent this country's small business 
     owners.''--Thomas J. Donohue, president and CEO, U.S. Chamber 
     of Commerce
       The total annual cost of the tort system to U.S. businesses 
     (large and small) is $129 billion.
       Small businesses with $10 million or less in annual revenue 
     bear 68 percent of that cost, paying $88 billion a year.
       Very small businesses ($1 million or less in annual 
     revenue) bear 26 percent of the business cost, paying $33 
     billion a year.
       A small business with $10 million annual revenue pays about 
     $150,000 a year in tort liability costs--money that could be 
     used to hire additional employees.
       A small business with $1 million annual revenue pays about 
     $17,000 a year in tort liability costs--money that could be 
     used to expand or improve health benefits for employees.
       Very small businesses ($1 million or less in annual 
     revenue) pay 44 percent of their tort liability costs ($15 
     billion) out-of-pocket, as opposed to through insurance.
       There are over 4.5 million U.S. small businesses with $10 
     million or less in annual revenue.
       There are about 3.8 million U.S. small businesses with $1 
     million or less in annual revenue.
       Small businesses contribute approximately three-quarters of 
     all new jobs added to the economy.
       The Liability Costs for Small Business study was conducted 
     for the U.S. Chamber Institute for Legal Reform by NERA 
     Economic Consulting.

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