[Congressional Record (Bound Edition), Volume 159 (2013), Part 9]
[Senate]
[Pages 12382-12383]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE MIDDLE CLASS

  Mr. RUBIO. Mr. President, even as I speak at this very moment--or 
maybe he has wrapped up--the President is in Jacksonville, FL, today. 
He is discussing the middle-class and how to get the middle class 
growing again in America, and it is a very worthy topic.
  I wish the President would do less talking and more listening. If he 
listened to the middle class--and particularly those middle-class 
Americans who either work at a small business or own a small business--
he would hear the No. 1 concern many of them now have is about 
ObamaCare.
  Recently, I made the statement that I don't believe we should pass a 
short-term budget here that pays for ObamaCare. Since that time, I have 
heard the comments of some that that is an unreasonable request. I wish 
to outline one more reason why I think it is an unreasonable request to 
actually fund it. It is unreasonable because of the impact ObamaCare is 
having on real people--particularly those in the middle class in the 
United States.
  I wish to focus on small businesses today because they truly are the 
backbone of the American economy. People here throw that term around 
all the time, ``the backbone of the economy.'' It truly is.
  I live within a few blocks of 8th Street, the famed Calle Ocho, where 
literally every business is a small business, such as bakeries, 
sandwich shops, you name it. They are primarily run by immigrants who 
are here in search of a better life and the American dream. They own 
these small businesses. They will be impacted by the changes this law 
will have, and I wish to describe some of them.
  Yesterday, we had a hearing in the Small Business Committee where the 
administration spoke first. Basically, their take on it is that 
ObamaCare will be good for small businesses for two reasons: One, we 
will set up these health exchanges small businesses can go to and offer 
health insurance to their employees on these exchanges.
  Basically, the exchange is a one-stop shop. A company owner can go 
online--and there are theoretically 8 or 10 private insurers--and the 
owner of the business gets to pick a plan from one of those choices and 
their employees get insured from it. In theory that is not a bad idea. 
However, in a moment I will outline why that is not working out.
  The second thing they brag about is the tax credit that small 
businesses will be able to use. I want to use the testimony--not just 
of them but of small businesses--to outline why, in fact, these things 
are not only not going to work, but ObamaCare is going to be deeply 
hurtful to small businesses and the middle class.
  Let's talk first about the exchanges. The exchanges are not unfolding 
as they were planned. I asked the administration yesterday: Is it going 
to be ready about October 1? Are businesses going to be able to go on 
this exchange and find an insurance plan for their employees? They said 
they are sure it is going to happen. But the truth is it is not working 
out that way.
  There are 17 States that have decided to go on to their own 
exchanges. All 17 of those States are behind schedule in one form or 
another. Maryland was one of the first States to embrace it. They asked 
for a delay in April because they couldn't get it going on time.
  A recent report from the Government Accountability Office reported 
that all 17 States were behind schedule and that they were missing 
deadlines on 44 percent of the key things they had to do.
  Here is the second problem: These exchanges only work if you have a 
lot of companies competing against each other, but that is not 
happening either. Insurers are not flooding to offer insurances on 
these exchanges.
  Let me give an example. There are three States: Washington State, New 
Hampshire, and North Carolina where only one company has responded. 
There is no competition, and that is what is supposed to drive down the 
rates. In another State, not a single company responded until very 
recently when Humana came in to save the day and actually decided to 
jump on board.
  Here is what the vice president of a consulting firm that specializes 
in this--it is called Avalere Health. Caroline Pearson is the vice 
president and she said:

       Humana may have a difficult time building competitive 
     networks in [Mississippi], so we could see higher than 
     average premiums in this region.

  Again, another reason to doubt that these exchanges are going to work 
and the impact it is going to have is terrible.
  What about the tax credits? That is a great idea, right? We are 
giving tax credits to small businesses that they can use to buy health 
insurance for their employees. That is not working out either.
  Let me give an example: Only 14 percent of companies that are 
eligible for the tax credit are using it, and I will explain why.
  I have a quote from Pat Thompson, a tax partner at Piccerelli, 
Gilstein & Company, in Providence, and chair of the American Institute 
for Certified Public Accountants, who said:

       The definition of an eligible business is challenging 
     because it is not based on [the number of] employees, but on 
     full-time equivalents. For companies with a lot of part-
     timers . . . that is not very transparent.

  He went on to say that the way to decide whether you are qualified 
for this tax credit is so complicated that most small companies can't 
figure it out. In fact, the companies that benefit the most from the 
tax credit are the ones that are least likely to get it because they 
cannot afford to hire a professional accounting firm to figure it out 
for them.
  Here is another one from the Birmingham Business Journal. The manager 
at a health care consulting group, Warren Averett, LLC, said that only 
20 percent of the small businesses they deal with even qualify for the 
credit. He said many businesses he worked with offered less than 50 
percent, and bumping their coverage to meet the requirement would have 
cost them more than the credit saved them.
  These are serious problems with this tax credit, not to mention that 
the General Accounting Office has already said the credit is so small 
that it is just not enough to change the equation for these small 
businesses to use it.
  What is the bottom line? The bottom line is that two of the things we 
are being told are going to help small businesses with ObamaCare are 
not going to. One is an exchange that is relying upon there being 
competition among insurers. They are not signing up,

[[Page 12383]]

folks. The other is this tax credit that is being deeply underutilized 
and it is so complicated and so small that most small businesses will 
not benefit from it.
  I say all that to my colleagues because yesterday we heard from a 
real small business owner--someone who is the epitome of what it means 
to own a small business in America. His name is Larry Katz. He owns 
some restaurants called Dots Diner. Here is what he said. His dream was 
to own his own company so he cashed in his whole life insurance policy, 
he calculated how much credit card availability he had, and emptied his 
life savings. With less than $200,000, he opened his first diner. 
Within 12 months he had stopped sleeping. He was down to less than 
$10,000 in savings. He considered two options: Either mortgage his home 
or declare bankruptcy. That is what he faced, but he made it through, 
as many small businesses make it through in America. Today he owns 6 
diners, 85 employees, 65 of them are full-time.
  Here is what he offers those employees today: paid holidays, 
vacation, dental, vision, term life, and health insurance. He offers 
those to them right now, but because of how much ObamaCare is going to 
cost him, here is what he is going to have to do. He said:

       I have unfortunately made the decision to quit offering 
     coverage as soon as the employer mandate kicks in, as the 
     penalty, while huge, is less than the costs of offering the 
     required coverage to all of our employees.

  What he is basically saying is that there are employees today in his 
business in Louisiana who have health insurance, who are happy with 
their health insurance, but because of ObamaCare they are going to lose 
that health insurance.
  One of the promises made to the American people was, if you are happy 
with your health insurance, you get to keep it. I know of at least one 
business in Louisiana where that is not true, and I promise it is not 
limited to just this business. In fact, the evidence keeps coming in 
from all over the country the impact this is going to have.
  Here is a quote from Texas: At Lion & Rose pubs and Golden Chick SA 
restaurants, 1,000-plus employees saw their work schedules reduced to 
part-time shifts.
  From the Wall Street Journal: Ken Adams has been turning to more 
part-time workers at his 10 Subway sandwich shops in Michigan to avoid 
possibly incurring higher health care costs.
  From the same article: Rod Carstensen, owner of 11 Del Taco 
restaurants around Denver in Colorado, began in April converting his 
mostly full-time workforce into one comprised of mostly part-time to 
help minimize the health care costs.
  This is the real impact.
  Interestingly, I asked an administration official yesterday: Can you 
tell us whether anyone who has health insurance now and is happy with 
it will lose it?
  The answer: I can't answer that.
  I don't know if she meant she doesn't know or if she meant she can't 
tell me. But I can tell my colleagues, and small businesses will tell 
us, if we talk to them, the impact this is going to have is not only 
that people are going to lose their health care coverage, they are 
going to lose their hours and get moved from full time to part time.
  Here is something: The U.S. Chamber of Commerce did a poll: 74 
percent of small businesses plan to deduct the costly law of ObamaCare 
by either firing workers, reducing hours of full-time staff and moving 
them to part time or not offering any coverage at all.
  This is the real-world impact of ObamaCare on the middle class and 
working class. This is terrible for our country.
  This is no longer a Republican or Democratic issue. It doesn't matter 
if a person voted for Mitt Romney or Barack Obama. This is going to 
hurt everybody. There are working-class people in America who have 
existing insurance who are happy with their doctor, and they are going 
to lose all of that because of this experiment. There are people today 
who are struggling to make it just as it is, and they are going to lose 
their hours. They are going to get forced from full-time work to part-
time work. That is the real-life impact of ObamaCare. That is the 
impact it is having on the working class and on the middle class.
  How can we go forward with this? We have a chance to stop this. It 
may be our last best chance, and it comes in September when we have to 
pass a short-term budget in this Chamber. If we vote for a budget that 
funds this, this is going to move forward and hurt people terribly, and 
those who vote for it are going to have to answer for that.
  To my Republican colleagues I would just say this: If we are not 
going to draw a line in the sand on ObamaCare, we have no lines in the 
sand. If this issue is not important enough for us to draw a line in 
the sand, what issue is? This is not a political issue. This is not a 
partisan issue.
  Today I am giving this speech on behalf of the hard-working men and 
women of this country--working class, middle class, small business 
owners--who are going to be terribly impacted by this law. We cannot 
just stand by and allow it to go further. We have to do everything we 
can to keep this from happening to people, and in September we will 
have our last best chance to do that.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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