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Second Opinion: Obamacare Puts the Squeeze on Small Businesses

January 31, 2013

“In this current economic environment, the last thing that we should be doing is making it more difficult for businesses to expand and hire more people. But because of the President’s health care law, that is exactly what is happening.”

WASHINGTON, D.C. – Today, U.S. Senator John Barrasso (R-Wyo.) spoke about how the President’s health care law has increased health premiums for American families and is making it harder for small businesses to expand and hire new workers. 

Excerpts of his remarks are below:

“This past weekend I had the opportunity to attend a conference of the Wyoming American Legion.

“Many of the veterans that I spoke with remain very concerned about their health care and specifically about the impacts of the Obama health care law on their lives, and on their health.

“The men and women that I met with are very worried that they may lose their health coverage. Why?  Because of the law.

“They wonder what happened to the insurance premium cuts that they were supposed to have gotten by now. These men and women haven’t gotten many of the benefits that they were told to expect, but what they are getting are all the costs.

“That’s why the people I talk with every weekend at home in Wyoming understand what the Democrats in Washington still won’t admit.

“That the President’s health care law remains unworkable, unpopular, and absolutely unaffordable.

“Remember when the President promised that if you like your health care plan, you can keep it? Well, all of America now knows it was an empty promise.

“Just like when President Obama promised health insurance premiums would go down.

“Over and over again, the President said that his law would lower premiums by $2,500 a family by the end of his first term in office.

“The President hasn’t talked much about that lately.  You didn’t hear anything about it in the inaugural address and I don’t expect to hear very much about in the State of the Union.

“It’s because average premiums across the country for families haven’t gone down. Not by $2,500 that the President promised.  Not by even a $1,000. Not even by a cent.

“Instead, average family premiums have actually gone up by more than $3,000 during the President’s first term.

“That’s a pretty big math error on the part of President Obama, and the American people unfortunately are the ones who have to pay for his mistake.

“Because of his policies, health insurance is a lot less affordable for a lot of people, and for a lot of small businesses.

“Now many small businesses are facing what is turning out to be an impossible decision.

“If they expand their business, and cross the law’s threshold of 50 employees – they’ll be subject to the employer insurance mandate.

“If they choose not to expand, then they’re holding back potential growth and the opportunities that come with it.

“In this current economic environment, the last thing that we should be doing is making it more difficult for businesses to expand and hire more people.  But because of the President’s health care law, that is exactly what is happening.

“The ‘Wall Street Journal’ ran a piece recently about a small business owner named Carl Schanstra.  He owns a parts assembly factory near Chicago, IL. It’s called Automation Systems LLC.

“Well, sales have been growing, and the business is doing well, but he has a problem because he already employs close to 50 people.

“That means he’s getting dangerously close to the law’s threshold, and the new health care burdens that it would place on him, including all of the expenses.

“As he puts it, ‘I’ll be hammered for having more people at work.’

“The cost of providing insurance would be enormous. The cost of paying the tax penalty for not offering insurance would also be enormous.

“Now, that’s not a good option for a small business like Automation Systems—a small business that wants to expand.  So he has to look for ways to stay under the law’s limits.

“He plans to raise prices to give himself a buffer against the new health care law, and he may even have to break his company into two different companies so they can stay below the limits.

“He may avoid hiring more people, he might buy new machinery to replace some of the workers.

“A rational and responsible business owner wants to make decisions based on what’s best for the business and its employees.

“Now we’ve got business owners and what they’re having to do is make these decisions based on the crushing regulatory burden imposed upon them by Washington.

“Carl is not the only business owner who’s having to face tough choices because of the health care law.

“According to a new survey Gallup put out last week, they say more than half of the small business owners say that the health care costs and taxes are hurting them a lot.  Those two things, health care costs and taxes, led the list of their concerns by a wide margin.

“When Gallup looked specifically at businesses that were not hiring, 61 percent of them—nearly two out of every three said it was because of the potential cost of health care.

“Washington should be creating policies that encourage businesses to hire and making hiring easier. Again, that’s what our economy needs to recover.

“Instead, this Administration has been piling up more costs, more regulations, and more ways to discourage hiring.

“Now, that’s just one person’s story, but just down the road from where Carl is trying to do what’s best for his business and his workers, the City of Chicago itself is facing some of the same concerns.

“Chicago has decided that it can’t afford to pay the health care costs of its retired city workers.

“So, what’s the whole city of Chicago going to do?  Well, it’s looking at dumping those former workers into the Obamacare exchange.

“It would save the city a lot of money, but the taxpayers of Illinois and every other state would have to pick up the tab because of Chicago, the city, is trying to skip out on paying their own bill.

“Federal subsidies for Chicago retirees would be $44 million in 2014; and that amount would only grow over time.

“Of course, we know that the mayor of Chicago is Rahm Emanuel.

“He was one of the main figures in the room when Obamacare was being written.  And we all know, all of America knows, that room was hidden behind closed doors.

“He knew exactly the kinds of incentives that the law was creating. He also knew exactly how people would be affected and he knew how people like him could use the law to push health care costs onto someone else.

“Chicago takes that step today. Other cities might be right behind in waiting to do the same thing tomorrow, and the day after that, and so on.

“We need to reduce health care costs in America—but all we do and all we see is getting cost-shifting, robbing Peter to pay Paul.

“We need businesses to hire people so our economy can grow — those businesses are holding back because of the health care law.

“We need to reduce Washington’s out of control spending – but cities like Chicago are trying to shift their health care costs to hard working taxpayers elsewhere. 

“Meanwhile, Democrats in the Senate and the White House refuse to accept that we have any problem at all with entitlement spending and budget cuts, and the budget deficits that we’re looking at.

“It’s time for Democrats to take their heads out of the sand—to admit that the President’s health care law did not solve our problems.  In fact, it made things worse.

“We need real entitlement reform that preserves vital safety net programs for future generations.

“We need real health care reform that gives people the care that they need, from the doctor they choose, at lower costs.

“President Obama continued to give the American people, and gave all of us empty promises.

“Congress should give hardworking American taxpayers the solutions that they expect and they deserve.”