Despite Federal Mandates, Obama Says Health Care Law Helps Small Businesses

By Fred Lucas, CNSNews.com Staff Writer
Mar. 26, 2010

In his first speech on the road since signing the new health care legislation into law, President Barack Obama said on Thursday that the new law would help small businesses. But critics said the federal mandates in the law would be burdensome and costly to small businesses.

“This year, millions of small business owners will be eligible for tax credits that will help them cover the cost of insurance for their employees,” the president said on the campus of the University of Iowa in Iowa City, Iowa.

“Starting today, small business owners can sit down at the end of the week, look at their expenses, and begin calculating how much money they’re going to save,” the president said. “And maybe they can even use that savings to hire that extra employee they’ve needed. This health care tax credit is pro-jobs, it’s pro-business, and it starts this year.”

Under the new health care law, the government is going to mandate that employers provide health insurance for their employees. This mandate applies to small businesses with revenues below $250,000 per year.

If the employer does not provide health insurance, the business will have to pay a penalty/tax of $750 for each full-time employee. For the company that requires a waiting period of 30-to-60 days before insurance kicks in, there is a $400 tax per employee, and $600 per employee if the business takes longer than 60 days to comply. This is found in Section 1513 of the bill for “shared responsibility for employers.”

According to polls, the health care law passed by the Democrats, who hold large majorities in the Senate and the House of Representatives, is still unpopular.

A CNN Opinion Research poll from March 19-21 found that 59 percent opposed the plan and 39 percent approved of it. A CBS News poll taken from March 18-21 found 48 percent disapprove and 37 percent approve of the health care law.

A Bloomberg Poll conducted March 19-22 found that 50 percent opposed the plan while 38 percent were in favor of it. And a Quinnipiac University Poll from March 22-23 found that 49 percent “mostly disapprove” of the legislation while 40 percent “mostly approve.”

In his Thursday speech, Obama cited the pledge by congressional Republicans to “repeal and replace” the health care legislation.

“If these congressmen in Washington want to come here to Iowa and tell small business owners that they plan to take away their tax credits and essentially raise their taxes, be my guest,” the president said.

Rep. Tom Price (R-Ga.), chairman of the Republican Study Committee, said the legislation is generally tough on employers.

“Employers as varied as John Deere, Verizon, Caterpillar, Honeywell International, ski resorts, and medical device manufacturers have already announced that this government takeover will drive up their costs,” Price said in a statement.

“The Democrats’ plan punishes families and those who create jobs with trillions of dollars in new spending, taxes, and debt while incentivizing many small and large businesses to drop their employees’ insurance coverage,” said Price. “Health reform shouldn’t mean wrecking our economy and upending Americans’ access to the coverage they enjoy.”

Speaking to the Iowa crowd, Obama recalled that it was in Iowa where he vowed to reform health care and won his first major primary as a presidential candidate.

“And now, this is your victory,” Obama told the crowd. “Because when the special interests sent an army of lobbyists to Congress and blanketed the airwaves with millions in negative ads, you mobilized and organized and refused to give up.”

While much of the insurance industry opposed the legislation, as did the Chamber of Commerce and the small business advocacy group the National Federation of Independent Businesses, some of the largest lobbying groups backed the health bill that passed Congress 219-212 on Mar. 21. No Republicans voted for the legislation and 34 House Democrats joined them to vote against the bill.

Special interest groups backing the health care overhaul included the AARP, the American Medical Association, the Pharmaceutical Research and Manufacturers Association of America (PhRMA), the AFL-CIO, the Service Employees International Union and the National Council of La Raza, among others.