The National Association of Manufacturers is a member of the StartOver! Coalition, the members of which believe one can best achievable an affordable, flexible and sustainable health care system by repealing last year’s Patient Protection and Affordable Care Act. The supporting employer associations signed onto a full-page ad that ran in Capitol Hill publications.
To see the full ad and its list of supporting organizations, click here.
Writing at The American Spectator, Quin Hillyer previews an expansive regulatory agenda the Obama Administration is likely to pursue even more aggressively in the wake of the November elections. The reasonable thesis: If the Legislative Branch will not write economy-choking laws, then the Executive Branch will accomplish the same through regulation.
From “Not Triangulation but Regulation“:
Obama’s promised “hand-to-hand combat” will increasingly pit executive overreach versus constitutional legislative authority. Republican congressmen understand this, and the Pledge to America includes support for a bill that would block any new “major rule” promulgated by federal agencies until the rule is approved by both chambers of Congress and signed by the president. Of course, President Obama would kill that bill with one of the quickest vetoes imaginable.
Former House Appropriations Committee chairman Bob Livingston of Louisiana suggested another solution in a recent Wall Street Journal column. Just insert language in necessary spending bills that specifies that “none of the funds appropriated in this Act shall be used for… [whatever Congress wants to block].”
Obama can’t regulate if he can’t pay the regulators. But unless newly empowered congressional Republicans challenge him, he’ll regulate all of us half to death.
The power of appropriating — or not appropriating — is shaping up to be the House’s primary point of leverage in the 112th Congress, with implementation of the new health care law being the biggest battle. The omnibus spending bill that Senate Majority Leader Reid was forced to pull included $1 billion for health care funding.
P.S. In surveying the Administration’s various regulatory focii, Hillyer cites Rosario Palmieri and Keith Smith of the National Association of Manufacturers on their areas of expertise, regulatory policy and labor policy, respectively. Thank you.
The Patient Protection and Affordable Care Act, the new health care law, is sickening small business with its requirement that companies file IRS 1099 forms to report every purchase 0f $600 or more. Yes, that’s a lot of reporting, a lot of paperwork.
Reuters has a good report on the ins and outs of this stomach-churning provision, “1099 tax rule may bring big pain to small business“:
Who will it affect?
It will affect all businesses, including sole proprietors, consultants, self-employed people and freelancers, who are considered businesses for tax purposes, but may not think of themselves that way. It also will apply to charities and other tax-exempt organizations. The National Taxpayer Advocate, based on Internal Revenue Service data, figures that it will affect 26 million sole proprietorships, 4 million S corporations, 2 million C corporations, 3 million partnerships, 2 million farms, 1 million charities and other tax-exempt organizations, and likely more than 100,000 federal, state and local government entities. All told, that’s more than 38 million taxpayers and taxpaying entities.
The story notes the NAM’s concerns, especially as the law will create all sort of disparate record-keeping and reporting requirements — an exemption for credit card purchases, but not cash?
“It’s a headache, there are increased costs, and I think there is also significant concern about how they will implement it,” says Dena Battle, director of tax policy at the National Association of Manufacturers, one of the business groups that has pushed for repeal. “Any time you have these ‘tax gap’ provisions, there are gigantic unintended consequences.”
Earlier Shopfloor posts:
Take that, small business!
The Senate today defeated both amendments to change the IRS tax filing mandates included in the health care law discussed earlier here and here.
A cloture vote on the Sen. Mike Johanns’ amendment to strike the onerous filing mandate failed on a vote of 46-52. A cloture vote on Sen. Bill Nelson’s amendment to keep the requirement while changing it on the margins failed 56-42, with 60 votes needed.
Anticipating the vote, The Wall Street Journal editorialized today:
[This] issue won’t go away. The President’s opposition to a clean repeal shows the hollowness of his alleged support for small business, which he expresses at every campaign stop but is less a priority than preserving his health-care legacy.
The larger political story here is that ObamaCare is already under bipartisan siege—and in the same Congress that passed it. The 1099 provision is only one plank, but repealing the law plank by plank may be the right strategy. Sooner or later the whole thing becomes unworkable. Voters should watch this vote to see who’s really on the side of small business.
The Senate subsequently invoked cloture on the underlying small business financing bill, H.R.5297, with 61 votes. Senate Majority Leader Harry Reid called it the biggest most important vote to support small business since the stimulus bill.
Sen. Mary Landrieu (D-LA) then took to the Senate floor saying she’s going to introduce a bill today to repeal the IRS 1099 filing requirement, acknowledging the legitimate protests but arguing that immediate action is not necessary. We have a year and a half to fix 1099, we don’t have any more time to help small business.”
The Obama Administration on Monday signaled its support for amending the onerous tax filing mandate included in the new health care law, which requires any business making purchases of more than $600 from a vendor to file an IRS 1099 to report the exchange. It’s a paperwork nightmare — especially for small business — that the IRS estimates could hit 40 million businesses.
Unfortunately, while acknowledging the problem, the Administration has only endorsed the amendment sponsored by Sen. Bill Nelson (D-FL) that would lift the filing threshold from $600 to $5,000 and apply it only to companies with more than 25 employees.
Talk about an anti-jobs message. Say you’re an small business owner with 22 employees. You really want to expand your product line, have the financing to buy the equipment, but will need to add six new workers to operate the machinery. But then you see that the new hires will push into past the threshold requiring the additional IRS filing. Not only are the burdens and costs of the new paperwork a disincentive, there’s the increased potential error and IRS liability.
Forget it, you say. I just won’t bother.
Isn’t this obvious? The Nelson amendment discourages the growth of small business, which is supposed to drive hiring in the coming years. The National Association of Manufacturers instead supports an amendment sponsored by Sen. Mike Johanns (R-NE) that would repeal the provisions.
In acknowledging the problem, the Obama Administration has at least expressed a willingness to amend the new health care law. It’s not sacrosanct, which is a big political concession.
But the only cure for this horrible IRS filing requirement is its repeal.
Coverage …
Infrastructure and taxes top the President’s agenda this week , but let’s not forget health care. President Obama signed the legislation to expand government control, regulation and subsidies of U.S. health care services on March 23. How’s it going, politically at least?
CNN, “Democrats start touting health care reform ‘no’ votes”:
Washington (CNN) – House Democrats who voted against one of the Obama administration’s signature policy initiatives – health care reform – are now cashing in on their no votes by using campaign ads to highlight their opposition to the legislation.
Politico, “Democrats run away from health care”:
[Party] officials in Washington can’t identify a single House member who’s running an ad boasting of a “yes” vote — despite the fact that 219 House Democrats voted in favor of final passage in March.”
Michael Barone, Washington Examiner, “Sinking with Obama, Democrats plan political triage”:
They jammed the Senate version of their health care bill through the House in March, in the face of the clear opposition signaled by the voters of Massachusetts as well as every public opinion poll. I can’t think of a more unpopular major measure passed by Congress since the Kansas-Nebraska Act of 1854.
But Mike, if they had the health care law back in 1854, John Brown’s body today would not lie a molderin’ in his grave.
During the consideration of health reform, we were assured repeatedly by President Obama and proponents of the behemoth euphemistically called the Patient Protection and Affordable Care Act (PPACA) that if we liked our health insurance we could keep it. Many opponents of the bill, including the National Association of Manufacturers, never bought that talking point and now we know for a fact the promise will not be kept.
Ostensibly, the intent of health reform was to insure the uninsured and protect the coverage of those who get health insurance from their employer. Instead, what we got is a looming crisis for as many as 170 million Americans who could lose their coverage because their employer can’t afford to provide it anymore or inadvertently runs afoul of the government. Now that’s reform.
The “grandfather rule” issued by the Department of Health and Humans Services (HHS) in June essentially read like a cynical attempt to make good on a promise never intended to be kept. (HHS news release, fact sheet, rule.) In a technical sense, if your plan doesn’t change at all from what it looked like on March 23, 2010, you can keep it – but how realistic is that? Not very, and they know it.
In fact, the HHS itself acknowledges that up to 70 percent of all employers will either lose their health plan by violating the new federal regulations or forgo grandfather status on their own within the first three years.
Under the rules for so-called “grandfathered plans,” small businesses that purchase health insurance for their employees have been stripped of the single most important tool they have to keep their rates in line – the ability to shop around and negotiate with multiple health insurance companies to get the best coverage they can afford. If an employer switches insurance companies now, they lose their grandfather status.
If employers decide to stick it out with their current plan, other tools to keep costs in check have been taken away as well. Increase co-payments beyond limits set in the regulation? Lose your grandfathering. Increase employee cost-sharing for premiums beyond what the government tells you? Lose your grandfathering. And the HHS isn’t done yet.
HHS has asked for comments on whether a plan should lose its grandfather status if it changes their prescription drug coverage or the network of physicians and hospitals beneficiaries can see. These are common alterations insurers and employers look to for cost control so their employees can afford the coverage. The NAM will be submitting comments to the HHS today on these and other issues raised by the rule. [UPDATE: Here are the NAM's comments.]
Unless significant changes are made, it seems clear what the end goal is with the so-called “grandfather rule” – design it to effectively ensure that within three years all current employer-based plans will go the way of the Dodo.
Joe Trauger is the NAM’s Vice President for Human Resources Policy.
When business calls for the federal government to show restraint on taxes and regulation, that is not a call for inaction.
In its weekly Intelligent Investing feature, Forbes.com interviews David M. Cordani, President and CEO of Cigna and a member of the National Association of Manufacturers’ board of directors. From “Get Briefed,” in which Cordani reviews the new health care law, which he says addressed one challenge — access to care. Now, it’s time to “tackle the remaining twin challenges of managing health care costs and closing gaps in quality of care.”
The empirical data is in: consumer-oriented plans bend the cost curve in a positive way, without compromising care.
Our ChoiceFund study, a multi-year study comparing the actual claims experience of 655,000 individuals covered in Cigna’s traditional managed care plans and those covered with our consumer directed plans, shows that medical costs for individuals in consumer-directed plans went down 26% over four years, while levels of care for their preventive medicine, chronic disease management and evidence-based treatments were higher than their counterparts in traditional managed care health plans.
If the share of Americans enrolled in consumer-directed plans rose from a current 18% to 50%, and the results of the Cigna study were applied, the U.S. could achieve $350 billion in savings over 10 years.
In a recent Wall Street Journal column, John Lechleiter, president and CEO of Eli Lilly, looks further down the road and sees a serious threat to U.S. leadership in life sciences, including pharmaceutical R&D. From “America’s Growing Innovation Gap“:
The evidence is certainly mounting that we are facing today nothing short of an innovation crisis in America’s life sciences. The industry I know best, biopharmaceuticals, is facing unprecedented pressure. R&D costs continue to rise, fewer potential new medicines gain regulatory approval, and key products lose patent protection. In fact, the number of new molecular entities approved by the FDA over the past five years—92—is lower than in any other five-year period since I entered the industry in the late 1970s.
Meanwhile, the rest of the world is not standing still. The U.S. is not the only country looking to the life sciences to drive economic growth, and the very qualities that brought much of the world’s research capacity to our shores could just as easily attract that work to Asia or elsewhere.
In examining the growing conflict between business and the Obama Administration, CNBC host and commentator Larry Kudlow included Lechleiter as one of the business leaders warning against overregulation and taxation. (continue reading…)
Gov. Mitch Daniels of Indiana was at the American Enterprise Institute on Tuesday, June 15, for a day long conference, “Health Care Reform: An Initial Checkup,” where he gave the keynote address. Excerpt from his remarks:
I wish honestly that national health care policy had headed in some direction more like this [Indiana's model of consumerism in health care]. When people sometimes ask me what we ought to do or what my reaction to this whole bill is, I sometimes start by saying that “in a dead end, full speed ahead is the worst option.” That’s what I think we did. My own view is that we could hardly have built a health care system more guaranteed to produce excessive costs. . . . Whatever else you think or say about it, don’t call this reform. It didn’t reform anything. It took the form we had and blew it up to poster size. And I’m afraid by perpetuating the drivers of higher costs, it’s setting us up for more disappointments in the future.
Daniels, a Republican, was also interviewed by AEI’s Nick Schulz, editor of American.com. Video segments of the interview are available here. Since there appears to be a renewed push for some form of government carbon-tax-regulation-control scheme, this exchange is timely:
Schulz: The cap-and-trade legislation and carbon regulation are much in the news again, and there’s activity here in Washington on that front. You’ve described the current legislative push for cap and trade as a way to regulate carbon as a kind of imperialism. Sounds like strong stuff, but I want to give you a chance to explain what did you mean by that exactly? If you’re not in favor of cap and trade, are you in favor of, say, carbon taxes or some other way to deal with carbon regulation?
Daniels: The reference to imperialism was a reference to the differential way that at least some of the initial schemes would have fallen on our state – massive cross-subsidy, raise the costs of utility bills, maybe double them in a state like Indiana, raise the cost of doing business, driving jobs out of our state, probably off shore, while leaving untouched or even subsidized places like, well, California or elsewhere. So it was massively unfair, and I tried to raise dissent on behalf of the workers and the ratepayers of our state.
You know, the whole notion here of carbon dioxide regulation seems to me requires a huge burden of proof be carried before we do this. (continue reading…)
NAM President John Engler mentioned the medical device industry in remarks at the Managing Automation Summit in Palm Beach, Fla., yesterday, remarking that it was one of the industries where U.S. industry is an indisputable global leader. And how does Congress treat this center of competitiveness and innovation? By taxing it to pay for an expansion of health care?
Here’s the inevitable response, via The Boston Herald, “Mass. device firms see health law as burden“:
Massachusetts medical-device companies say they’ll cut back on operational costs – and jobs – after a planned 2.3 percent tax on their products is implemented in 2013, according to a new survey.
The Massachusetts Medical Device Industry Council, which held its annual meeting yesterday in Boston, said about 90 percent of the 100 medical-device firms said they would reduce costs due to the new tax tucked into the recently passed health-care reform bill.
The tax – imposed to help pay for the massive health-care industry overhaul and expansion – is “of the greatest concern” to a majority of its members, the survey found.
MassDevice, an online trade publication, also covers the survey, “Survey: Device tax could force job cuts, higher prices.”
Twitter @ ShopfloorNAM News From the NAM
© 2012 National Association of Manufacturers. All Rights Reserved.
Join NAM | Manufacturing Policy Issues | Facts About Manufacturing | Manufacturing Industry News |
Manufacturing Buyers Guide | Contact Us | Terms & Conditions | Privacy Policy | Manufacturing Social Media
