[Congressional Record Volume 155, Number 154 (Thursday, October 22, 2009)]
[House]
[Pages H11693-H11694]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     THE IMPACT OF HEALTH CARE REFORM ON SMALL BUSINESS IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Colorado (Mr. Coffman) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. COFFMAN of Colorado. Thank you, Mr. Speaker.
  Tonight, I am joined by Congressman Doug Lamborn of Colorado and by 
Congressman Glenn Thompson of Pennsylvania.
  What we want to talk about tonight is the impact that health care 
reform, or the Democrat proposal, is having on small businesses 
throughout this country. It wasn't that long ago that the President's 
chief economic adviser, Christina Romer, looked at the proposal, H.R. 
3200, and said that this could cost up to 5.5 million jobs. So it is 
important that we talk about why this happens.
  About $900 billion is the target for the cost of the proposal, of 
H.R. 3200, with half of it coming from Medicare and with half of it 
coming from increased taxes, surcharges and penalties.
  So, with that, let me first refer to my colleague from Colorado, 
Congressman Doug Lamborn, to talk about the effects of these new taxes, 
surcharges and penalties on small business.
  Mr. LAMBORN. Well, I thank the gentleman for yielding. Representative 
Coffman, I want to thank you for your leadership and for taking the 
time to speak on this important issue of the economic impact of H.R. 
3200, the Democrats' health care proposal, here in the House. It's a 
little different from the one in the Senate, but there is an impact 
that it will have on small business.
  I remember very fondly, Representative Coffman, when you and I served 
in the Colorado legislature together. It was before you were either the 
State treasurer or the Secretary of State in Colorado. I really knew at 
that time, as I think you knew with me, that we were proponents of 
small business and that we wanted to have lower taxes and a more 
favorable economic environment and climate for the State of Colorado so 
that young people would have jobs when they graduated from high school 
and college, so that we would have a strong economy and, I think, as a 
result of that, so that we would have a better quality of life.
  Sure enough, with some other tax-saving kinds of measures the State 
voters passed, like TABOR, Colorado had the best business environment 
in the United States. Now it has slipped a little bit, but we're still, 
in the latest ranking I've seen, No. 4 in the country. That's an 
excellent thing. It's because of trying to hold the line on taxes. So 
I'm concerned that, when we talk about H.R. 3200, the Waxman bill for 
health care which my colleagues on the other side of the aisle are 
promoting, it is going to have a negative impact.

  For instance, House Democrats pay for a portion of their health care 
in this bill by imposing a 2 percent surtax on individuals with more 
than $280,000 in income, or $350,000 for a couple. That's a lot of 
money. Keep in mind that many small businesses file as individuals. 
They use the subchapter S type of status for their tax returns. So this 
is actually the income that a small business can have when it's hit 
with a 2 percent surcharge.
  Mr. COFFMAN of Colorado. Will the gentleman yield back just for a 
moment?

[[Page H11694]]

  Mr. LAMBORN. Yes, Representative Coffman.
  Mr. COFFMAN of Colorado. Congressman Lamborn, let's talk about that 
whole thing.
  It starts out at 2 percent. As we know, in looking at section 313 of 
the bill, when we talk about the gross annual payroll of $250,000 to 
$300,000, it's at 2 percent. Then it moves up to 4 percent when going 
to $350,000. Then with $400,000 of gross annual payroll and above, it 
goes to 8 percent. So it's at 4, 6 and 8 percent.
  Many small businesses which cannot afford health care insurance are 
going to be hit with a penalty of 8 percent. Clearly, they're going to 
have to make a decision: Either they're going to have to reduce that 
payroll to be able to pay that tax or they're going to have to close 
their doors--one of the two.
  I think what Washington doesn't understand is that these small 
businesses are hanging on by their fingernails right now trying to keep 
their doors open, and unlike the Congress of the United States, they 
can't simply print money when they don't have it. So this is putting 
them in an impossible position. I think, simply, that the liberals in 
this Congress just don't get it. They're just not understanding the 
stresses of small businesses in America today, small businesses which 
have been, historically, the greatest job creators in our economy.
  I yield back.
  Mr. LAMBORN. I thank the gentleman.
  Yes, you're right. You're exactly right. There is that 2 to 8 percent 
surcharge on small business or on individual income, and there's the 8 
percent penalty if you don't provide government-approved health care 
for all of your employees.
  So, when you add that all together, like you said, Barack Obama's own 
economic adviser, Christina Romer, said that there would be about 5 
million jobs lost as a result of those tax increases, and this is the 
worst possible time to have tax increases on small business. Small 
business is the backbone of our Nation's economy. I think the figure is 
72 percent of new jobs created in this country are created through 
small business.
  So, in the middle of a recession, is this the time to be raising 
taxes? I really don't think so. In Colorado alone, Representative 
Coffman, 16,500 small businesses will be required to pay this surtax.
  I yield back.
  Mr. COFFMAN of Colorado. At this time, I would like to recognize 
Congressman Glenn Thompson from the State of Pennsylvania.
  Congressman Thompson, what do you think about this issue in terms of 
H.R. 3200, which is the Democratic bill before the Congress, and its 
impact on small business in the State of Pennsylvania?
  Mr. THOMPSON of Pennsylvania. Well, it certainly will have.
  First of all, I thank my good friends--both of my colleagues from 
Colorado--and I thank Mr. Coffman for hosting this very important 
session tonight because what we're talking about is truly the economic 
engine of this country, and that's small business. Small business is so 
important. It has been and always has been our economic engine. You 
know, small businesses employ half of the workforce, and they create 72 
percent of all new jobs.
  Old fables would refer to small businesses as the geese that laid the 
golden eggs, and last month, unfortunately, we lost 263,000 jobs in 
this country.
  Now, we normally would encourage small business, with incentives, to 
help the economy and to grow those jobs and to maintain those good 
family-sustaining jobs--jobs that provide health care benefits in most 
of those positions. Well, unfortunately, instead, the Democrats are 
going to tax the few golden eggs that are left and will probably kill 
the goose.
  According to data from the IRS, more than half of those targeted 
under the Democrats' health care surtax are small business owners. When 
you look at those businesses that are organized as S corporations or as 
limited liability corporations, they constitute over 60 percent of 
individuals who file their taxes as individuals who are making over 
$200,000. These are small businesses. Out of those moneys, they pay a 
payroll every week. Then there will be the $208 billion in new taxes on 
businesses that can't afford to pay now for their employees' health 
care.
  I was in the little town of Emporium, which is in Cameron County. 
It's a great county. It's in the middle of my district. Unfortunately, 
unemployment there is significant. Cameron County unemployment is among 
the highest in the Commonwealth of Pennsylvania.
  I was there. I was with a young lady who was an entrepreneur. She was 
somebody who had that American dream, that drive to strive for 
something better. She had created this small business, and she had a 
payroll she was maintaining. In fact, it was early in the first couple 
years of this small business where she was at the point she was willing 
to sacrifice, and she wasn't taking a salary because she was dedicated 
to seeing this business be successful and because she was faithful to 
her employees and to the jobs that she had created. She chooses not to 
take a salary, and she doesn't offer health care. She would like to, 
but she can't.

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