House Committee on Education and Labor
U.S. House of Representatives

Rep. Howard P. “Buck” McKeon
Ranking Member

Fiscally responsible reforms for students, workers and retirees.


Fact Sheet

December 16, 2009

House Democrats Paint New Targets on Small Businesses
Job Creation Takes a Back Seat to Big Government Agenda

Small businesses are learning each day that Speaker Pelosi’s proposed government takeover of health care will be a bitter pill to swallow. Buried amid more than 2,000 pages of bureaucratic red tape are proposals that spell disaster for small businesses – the employers who create the majority of jobs in America. 

Play-or-Pay Scheme – Speaker Pelosi and Congressional Democrats have adopted an “our way or the highway” mentality in regards to America’s small businesses. If small businesses fail to or cannot afford to provide a health care plan that satisfies Washington bureaucrats, all but the very smallest micro-businesses will be forced to pay a new 8 percent payroll tax regardless of profitability – a tax on jobs at a time of double-digit unemployment. 

Tax Hikes on Job Creators – As part of their revenue raising regime, congressional Democrats will impose a new 5.4 percent surtax on small businesses that file as individuals. Because this new tax is not indexed for inflation, a larger number of small businesses will fall victim to this guaranteed job-killing proposal year after year. 

Health Choices Commissioner Holds All the Cards – The Pelosi government takeover of health care would give a newly created “Health Choices Commissioner” unprecedented power to make and break rules regarding health insurance coverage – leading to greater confusion and uncertainty for America’s small businesses and stifling job creation. 

Dictating Acceptable Coverage – Under the House Democrats’ plan, the government would dictate how small businesses must structure their health care plan – ignoring input from employers and employees alike. 

Promoting Lawsuit Abuse – By opening small businesses and their insurers up to new state court lawsuits and liability, Speaker Pelosi’s plan will promote lawsuit abuse. This will occur at the same time Congressional Democrats refuse to address malpractice liability reform that contributes to the rising cost of health care. 

Government-run Plan Increases Health Care Costs – A new government-run, taxpayer-funded health insurance plan will have the authority and the incentive to underpay physicians and hospitals just as Medicare and Medicaid do today. The net result will be an increase in private insurance costs – forcing small businesses to spend more money on employer-provided coverage. 

Government-run Plan Disrupts Current Coverage – With the power to make the rules, play the game, and act as referee, a government-run plan will inevitably choke the private market and force many small businesses to drop their current private health insurance coverage. This will come as unwelcome news to the millions of Americans who currently enjoy their coverage and who agree with President Obama’s promise that if you like your health care plan, you should be able to keep it. 

A Bigger Bureaucracy to Navigate – With 118 new boards, commissions, offices, and programs, the Pelosi government takeover of health care will force small businesses to spend more time and money deciphering Washington’s bureaucratic maze. This will mean less time for creating jobs and growing the economy.