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The Small Business Subcommittee on Contracting and Workforce, led by Chairman Richard Hanna (R-NY), today held a hearing to examine the effect of the President's health care law on self-employed businesses in America.
“Many self-employed businesses have experienced higher health insurance costs, shrinking provider networks, and coverage confusion since Obamacare was signed into law,” said Chairman Hanna. “This hearing provided a valuable dialogue about the effect of the health law on a segment of our community that many have forgotten about – the 15 million self-employed American businesses - and an opportunity to discuss positive healthcare solutions for these firms.
"Yesterday, the House passed the Individual Mandate Penalty Law Equals Fairness Act so that the self-employed would receive the same Obamacare mandate delay that other businesses enjoy. In fairness, the administration’s decision to delay part of the law should be applied equitably to all Americans, including sole proprietors and the self-employed.”
According to the National Association for the Self Employed (NASE), over 77 percent of small businesses in the United States are self-employed ones. A recent NASE survey found that nearly 60 percent of respondents believe there is a “low” or “very low” chance they’ll be able to secure affordable and comprehensive coverage in 2014 and about 17 percent of respondents indicated that they are forgoing health insurance in 2014 due to costs.
Materials from the hearing are available on the Committee’s website HERE.
Charlie Arnold, President and Owner of Arnold Powerwash LLC in Lewes, DE, said, “…I have found myself in a continued state of confusion to the status of my current health care coverage. As well as the additional confusion caused by the restrictive actions taken by both the Departments of Treasury and Health and Human Services toward the rules governing Health Savings Accounts (HRAs), and the continuing disparity faced by the self-employed versus 'big business.' namely the two reprieves given by the Obama Administration to larger businesses in the last year that grants them freedom from complying with the new law. However, the self-employed are left having the March 31, 2014 enrollment deadline looming over our heads, while we are forced to confront the potential for possible penalties for not enrolling in Obamacare.
“Compliance is not made any easier by the continued unilateral action taken by the Administration to delay or interpret the law without input that leads to further confusion and mistrust in the system.”
Todd McCracken, President of the National Small Business Association in Washington, DC said, “The highs costs and complexity they face today, combined with enormous uncertainty around any future improvement, have conspired to make many small businesses re-think whether their companies should continue to be entangled in the provision of health insurance. Of course, there is no such choice for our nation’s self-employed. Whether health insurance is an individual or employer responsibility, they cannot avoid participation.”
Alan Schulman, President of Insurance Benefits & Advisors, LLC in Rockville, MD said, “President Obama famously campaigned on ‘if you like your health plan you can keep it.’ Millions of Americans with individual coverage found out that wasn’t exactly true this past January 1. Many millions more small employers and their employees are going to find that out for themselves over the course of this year too, again with the bulk of them finding it out at some point this fall. Prices for many are increasing, but in addition, their plan options are going to change.”
“Helping small firms secure these opportunities fosters job growth, helps «small businesses»grow into larger ones and creates overall economic prosperity,” said Nydia M. Velazquez of New York, the panel’s ranking Democrat.
Velazquez, who sponsored the first bill (HR 2452), which the panel approved by voice vote, said it would help women’s businesses by permitting agencies to award sole-source contracts to female-owned «small businesses» and «small businesses» run by economically disadvantaged women.
“The bill does not create new tools solely for women-owned businesses, but rather allows contracting officers to use existing tools available for other contracts,” Velazquez said.
“Ensuring that they [women-owned businesses] have access to government contracts is essential to their continued growth.”
The anticipated award price of the contracts could not exceed $6.5 million for a manufacturing procurement or $4 million in the case of any other contract opportunities.
The panel also approved, by voice vote, a second bill (HR 2882), as modified by a Graves substitute amendment, that would authorize the «Small Business» Administration to manage the appeals and verification process for veteran-owned «small businesses». The Veterans Affairs Department currently manages the process.
Panel members said the bill would save the federal government money and reduce fraud.
“I personally believe our veterans deserve better, and HR 2882 is a good first step,” Graves said.
The money to pay for the verification process would come from a Veterans Affairs reserve fund instead of congressional appropriations.
The panel rejected, 10-13, a Velazquez amendment that would authorize $15 million each fiscal year for the SBA verification program. Republicans said that allocation would exceed the annual $10 million in the fund’s budget.
Members gave voice vote approval to an amendment offered by Ann McLane Kuster, D-N.H., that would require the SBA administrator and VA secretary to meet with veterans service organizations to discuss how to increase opportunities for «small businesses» owned by veterans.
The panel approved, by voice vote, a bill (HR 4093) that would raise the government’s prime contracting goal from 23 percent to 25 percent. Under the bill, the subcontracting goal would be set at 40 percent instead of the Obama administration’s current aim of 35.9 percent.
Democrats said it would help level women’s competitiveness in the marketplace by awarding them more federal contracts.
“With March as women’s history month, it is the perfect time to recognize the irreplaceable contributions women make to the economy,” said Patrick Murphy, D-Fla.
Republicans said that federal policy should not provide advantages for one specific group over another.
The panel also rejected, 10-12, an amendment by Yvette D. Clarke, D-N.Y., would raise the contracting goal for small disadvantaged businesses from five percent to eight percent.
The committee also advanced, by voice vote, a bill (HR 4121) that would direct the SBA to expand the use of «Small Business» Development Centers, which provide technical assistance for «small businesses» and entrepreneurs.
It also would allow «Small Business» Development Centers to collect fees or other income from private partnerships and cosponsorships with the administration. It also would allow the centers to market their services.
The panel adopted, by voice vote, a Murphy amendment that would allow «Small Business»Development Centers to provide assistance to «small businesses» outside of their immediate geographic area, during presidentially-declared disasters.
Members also gave voice vote approval to a Donald Payne Jr., D-N.J., amendment that would require «Small Business» Development Centers to provide counseling to unemployed individuals on entrepreneurship and starting a new business.
Another bill (HR 4094), approved by voice vote, would require the SBA to collaborate with other agencies to create a plan for improving the collection of data regarding consolidated contracts.
The measure also would require the Government Accountability Office to conduct a study on the effectiveness of the improvement plan. It would require the GAO to begin the study by 2018 and report to the House and Senate «Small Business» Committees within a year.
A Chu amendment, adopted by voice vote, would require the SBA to present the data quality improvement plan to Congress before implementing it.
The committee also gave voice vote approval to a measure (HR 2751) that would prevent the use of reverse auctions for construction services contracts that would be suitable for «small businesses. In such real-time, Internet-based auctions the award goes to the person who offers the lowest bid.
Bill sponsor Richard Hanna, R-N.Y., noted that two Army Corps of Engineers studies have indicated that reverse auctions put the government and contractors at risk while not saving much money.
Another bill (HR 776), approved by voice vote, would increase the guarantee rate, or how much the government will back, on the SBA’s bond program from 70 percent to 90 percent, as amended by substitute amendment offered by Sam Graves, R-Mo.
Government agencies for the first time since 2005 appear to have met the goal of awarding 23 percent of prime contracts to small businesses, leaders of the House Small Business Committee said March 5.
Although the Small Business Administration has not finalized the tally of federal contracts awarded to small businesses, it appears the government has reached the 23 percent goal, according to Reps. Sam Graves (R-Mo.) and Nydia Velazquez (D-N.Y.), chairman and ranking member of the committee. Their observations came at the outset of a meeting to mark up several bills to help expand access to the federal marketplace for small firms.
One of those bills, the Greater Opportunities for Small Business Act (H.R. 4093), sponsored by Graves, would increase the small business prime contracting goal to 25 percent. While progress has been made, there's a long way to go, Graves said.
Velazquez said raising the goal is “timely” given that it appears the government may have met the 23-percent threshold for the first time since 2005. The SBA's preliminary figures show that small businesses were awarded $83.2 billion in prime contracts in fiscal year 2013, she said.
According to the SBA's annual procurement scorecard, agencies awarded 22.25 percent ($89.9 billion) of their prime contracting dollars to small businesses in FY 2012, up from 21.65 percent in FY 2011.
Additionally, H.R. 4093 would:
• establish a goal of awarding 40 percent of all subcontracted dollars to small businesses, compared to the current goal of 36 percent; and
• increase reporting accuracy by requiring that only prime contract awards can count toward the prime contract goal.
The bill was reported out of the committee with unanimous support, but faces opposition in the procurement community.
Professional Services Council President and CEO Stan Soloway, for instance, warned against increasing the goal until accurate data showing the total extent of small business participation in federal contracting is available. Raising “either the prime or subcontracting goals without fully understanding total small business activity would be premature and counter-productive,” he said.
“Prior to raising any of the contracting goals, it is important for federal agencies and policy-makers to understand the total small business participation in federal contacting. To do so, clear and accurate data is needed of not just prime contracting dollars flowing to small businesses, but also federal dollars flowing to small businesses via subcontracts. However, such subcontracting data still does not exist in any meaningful or accurate form,” Soloway said.
SB Bills on the Move
In addition to H.R. 4093, the committee approved:
• the Contracting Data and Bundling Accountability Act of 2014 (H.R. 4094), also sponsored by Graves, to improve transparency and accountability in contract bundling and consolidation;
• the Commonsense Construction Contracting Act of 2013 (H.R. 2751), sponsored by Rep. Richard Hanna (R-N.Y.), to prohibit use of reverse auctions when a construction services contract is suitable for award to small business, or when the procurement is made using a small business program;
• the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013 (H.R. 2882), sponsored by Rep. Mike Coffman (R-Colo.). to transfer responsibility for verifying the status of service-disabled veteran-owned small businesses from the Department of Veterans Affairs to the SBA';
• the Security in Bonding Act of 2013 (H.R. 776), also sponsored by Hanna, to increases the access of small construction companies to surety bonds; and.
• the Women's Procurement Program Equalization Act of 2013 (H.R. 2452), sponsored by Velazquez, to standardize sole source authorities among the SBA's procurement programs in order to promote parity.
“The employer mandate has been delayed for most companies, but self-employed businesses are still unfairly accountable to the requirements of the health law,” said Chairman Graves. “In fairness, the administration’s decision to delay part of the law must be applied equitably to all Americans, including sole proprietors and the self-employed. The 15 million self-employed small businesses in America have experienced higher costs, shrinking provider networks, and confusion since it was signed into law and they deserve a break from Obamacare, just like everyone else. No one should be punished because of the size of their company, therefore, the Senate should take up H.R. 4118 so Washington can apply our laws equitably to all businesses. Tomorrow’s Small Business Subcommittee on Contracting and Workforce hearing will look at this very matter, discuss solutions, and allow small businesses to have their say on legislation like this.”
Tomorrow, the Small Business Subcommittee on Contracting and Workforce, under the chairmanship of Rep. Richard Hanna (R-NY), will conduct a hearing titled Obamacare and the Self-Employed: What About Us? The purpose of the hearing is to examine the effect of the President's health care law on self-employed businesses in America. According to the National Association for the Self-Employed, over 77 percent of small businesses in the United States are self-employed ones. Although the Obamacare employer mandate has been delayed for a year, the individual mandate went into effect on January 1, 2014. Typically, the self-employed purchase health insurance on the individual or non-group market and would be required to carry coverage to comply with the individual mandate.
The Small Business Committee, led by Chairman Sam Graves (R-MO), today conducted a markup of small business bills, including six contracting reform bills that promote more small business opportunities.
“Contracting reform that creates more opportunities for small business is an ongoing legislative priority for the Committee,” said Chairman Graves. “Small businesses are integral to economic growth and job creation. Greater small business involvement in federal contracting benefits companies and taxpayers alike. Small firms are innovative, and increased competition often leads to savings for the taxpayers. The legislation passed by the Committee today will continue to encourage small business participation in federal procurement.”
Under Chairman Graves’ leadership, the Committee has successfully spearheaded comprehensive small business contracting reforms that are now law. The National Defense Authorization Acts of 2013 and 2014 incorporated several Committee-sponsored contracting provisions. These include holding senior agency officials accountable for meeting the small business goals, improving acquisition planning, increasing contacting officer training, preventing contracting fraud by penalizing companies that front for large businesses, and changing limitations on subcontracting to make it easier for small companies to team on larger contracts.
• H.R. 4093 – Greater Opportunities for Small Business Act of 2014, sponsored by Graves: Increases the small business prime contracting goal from 23% to 25% and establishes a 40% subcontracting goal.
• H.R. 4094 – Contracting Data and Bundling Accountability Act of 2014, sponsored by Graves: Improves transparency and accountability in contract bundling and consolidation to better adhere to the current laws intended to protect small businesses.
• H.R. 2751 – Commonsense Construction Contracting Act of 2013, sponsored by Rep. Richard Hanna (R-NY): Prohibits the use of reverse auctions when a construction services contract is suitable for award to small business, or when the procurement is made using a small business program.
• H.R. 2882 – Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013, sponsored by Rep. Mike Coffman (R-CO): Transfers responsibility for verifying the status of service-disabled veteran-owned small businesses from the Department of Veterans Affairs to the SBA, in order to improve efficiency, transparency and uniformity in the processes.
• H.R. 776 – Security in Bonding Act of 2013, sponsored by Hanna: Increases the access of small construction companies to surety bonds in order to increase the number of small construction contractors able to participate in the federal market.
• H.R. 4121 – Small Business Development Centers Improvement Act of 2014, sponsored by Ranking Member Rep. Nydia Velazquez (D-NY): Ensures that the SBDCs are able to continue providing entrepreneurial development services and education to small businesses.
• H.R. 2452 – Women’s Procurement Program Equalization Act of 2013, sponsored by Velazquez: Standardizes sole source authorities among the SBA’s procurement programs in order to promote parity.
A prescription for a more robust American economic recovery is not a mystery — the catalyst of job growth is small business. At a time when small businesses should be at the heart of our nation’s comeback, America’s best job creators deserve leaders who create an environment where businesses can thrive.
President Obama, in his State of the Union address, gave yet another lecture on how critical small businesses are to this country. However, when you dig into it, the facts show this administration is drowning Main Street in regulations at a record pace and increasing costs and uncertainty at every turn while doing little to help promote growth.
The importance of small businesses to our economy is indisputable. They make up 54 percent of the private-sector economy and create about 70 percent of all new jobs. In January 2012, Mr. Obama elevated the Small Business Administration (SBA) to a Cabinet-level agency. This move was heralded as an example of how small businesses were at the forefront of the president’s agenda. However, the administration’s neglect of the SBA has proven otherwise. Earlier this month, the Senate Small Business and Entrepreneurship Committee finally held a nomination hearing for an SBA administrator. The time it took to nominate Maria Contreras-Sweet as SBA head — 11 months after the previous administrator’s resignation announcement — is indicative of the administration’s cavalier view of small business.
The previous administrator, Karen Mills, announced her resignation on Feb. 11, 2013, and since then, the administration has issued 3,854 regulations costing businesses $112 billion. This record pace has been extremely harmful for small businesses, considering their cost to comply with regulations is 36 percent higher than for larger firms. For small businesses, more time and money spent on complying with regulations means that fewer resources are available to grow and create jobs. Yet, this administration continues to pile it on.
The SBA remains the singular federal agency with the sole responsibility for overseeing issues that affect the United States’ 29 million small businesses. As a resource for loans, contracts, business development and counseling, taxpayers expect the agency to assist small businesses when they need it most. Instead, businesses have found extensive delays at the SBA to process the most basic applications. To cite an example, in the wake of Superstorm Sandy, small businesses were unable to get a loan promptly to recover and rebuild because the agency is repeatedly losing applications and documentation. When these businesses approach the SBA for help, they report to our respective committees a pattern of broken promises, missed deadlines and a government that is closed to small business.
Small companies have seen their health care insurance plans cancelled due to Obamacare and the promise of keeping their current coverage broken. Mr. Obama has delayed online enrollment for the Small Business Health Options Program (SHOPs) exchanges for an additional year, and choices within the federal exchanges are limited to just one plan. As a result, these same small businesses find they are victims of more government ineptitude and higher costs for plans that don’t fit their needs.
To fulfill the proper oversight role of Congress over this program, an inquiry request was sent to Health and Human Services Secretary Kathleen Sebelius in January about SHOP enrollment. The administration has released the enrollment numbers for the broader health exchanges, but has remained silent about the small-business exchange run by the federal government. To date, a response has not been received.
Late on Feb. 21, the Obama administration quietly released a study that proved that small businesses were again feeling the brunt of the law. The report, issued by the Office of the Chief Actuary at the Centers for Medicare and Medicaid Services, found that two-thirds of small businesses will see premium hikes under Obamacare. Add this to the long line of broken promises regarding the law.
Larry Katz, CEO of Dot’s Diner in Louisiana, recently testified before the Senate Small Business Committee that he wants to expand his business, but Obamacare is forcing him to close two diners to fall below the 50-employee mandate threshold. As these businesses downsize and struggle to survive, SBA leadership has been nowhere to be found.
As leaders representing small businesses and advocating for their success, we say “enough is enough.” Now is the time for Mr. Obama to fulfill years of unmet promises to this country’s entrepreneurs. Unfortunately, the rhetoric from the president’s State of the Union address does not heal the wounds inflicted on small businesses during his first five years in office. It is time for this administration to put small businesses at the forefront and allow America’s job creators to unleash a robust economic recovery.
Sen. Jim Risch is ranking member of the Senate Small Business and Entrepreneurship Committee. Rep. Sam Graves is chairman of the House Small Business Committee.
Small Business Committee Chairman Sam Graves (R-MO) today released the following statement in support of the Consumer Financial Protection and Soundness Improvement Act (H.R. 3193), which will reform the Consumer Financial Protection Bureau (CFPB):
“This bill strengthens the oversight of CFPB rulemaking by streamlining the Financial Stability Oversight Council’s review of CFPB rules that may not properly safeguard financial institutions. More oversight, accountability and transparency is a step in the right direction. Federal regulations often have unintended consequences for small businesses, and when small companies are affected, that in turn impacts jobs and consumers.”
The Consumer Financial Protection and Soundness Improvement Act allows the Financial Stability Oversight Council to set aside any CFPB rule that may undermine the safety and soundness of financial institutions by majority vote. Additionally, it replaces the CFPB director with a bipartisan five-member panel, and establishes the CFPB’s independence from the Federal Reserve. The bill also strengthens consumer protections in the CFPB’s information-gathering process.Last Congress, the Committee held a hearing with CFPB Director Richard Cordray that focused on the Bureau’s rulemaking process, and its consideration of small businesses impacts when developing regulations.
Chairman Sam Graves
Floor Speech on H.R. 2804, The ALERRT Act/Regulatory Flexibility Improvements Act
February 26, 2014
(Remarks as Prepared)
CLICK HERE to view the video
I rise today in support of H.R. 2804, the ALERRT Act. This legislation represents an important effort to bring common sense and transparency to an out-of-control regulatory process that is stifling growth, especially among small businesses.
I am especially pleased that legislation which the Committee on Small Business worked on: H.R. 2542, the Regulatory Flexibility Improvements Act, is incorporated into the ALERRT Act. I want to thank Chairman Goodlatte for working with our Committee on this title of the bill.
For over 30 years, agencies have been required by the Regulatory Flexibility Act, or RFA, to examine the impacts of regulations on small businesses. If those impacts are significant, agencies must consider less burdensome alternatives. However, agencies still fail to fully comply with the law. The result is unworkable regulations that put unnecessary burdens on America’s best job creators – small businesses.
In numerous hearings over the years, the Small Business Committee has heard about the consequences that burdensome regulations have on farmers, home builders, manufacturers and others. Instead of using their limited resources to grow and create jobs, small businesses have to spend more time and money on regulatory compliance and paperwork.
The Regulatory Flexibility Improvements Act will eliminate loopholes that agencies have used to avoid compliance with the RFA. Most importantly, it requires agencies to genuinely scrutinize the impacts of regulations on small businesses before they’re finalized.
Examining whether there are less burdensome or less costly ways to implement a regulation just makes common-sense. Reducing unnecessary regulatory burdens, frees up scarce time, money and resources that small businesses can use to expand their operations and hire new employees.
The Regulatory Flexibility Improvements Act is bipartisan legislation that has the strong support of the business community. It simply requires agencies to do their homework before they regulate. If agencies do their work, more Americans will be working.
I urge my colleagues to support the ALERRT Act. It will make the rulemaking process more transparent and reduce unnecessary barriers to job creation.
The economic recovery is slow, the labor force has been reduced, and small businesses are losing speed, but there's one area that just keeps growing: federal regulations. There's no shortage of new red tape or of bureaucrats to write new regulations, and small businesses are becoming overwhelmed.
It's time for some common sense from federal agencies. Federal regulations should promote safety without unnecessarily burdening small firms and costing much-needed jobs.
As Chairman of the House Small Business Committee, I've worked for several years now with colleagues of both political parties to update and strengthen the Regulatory Flexibility Act (RFA). The outgrowth of that collaboration is the Regulatory Flexibility Improvements Act. This week, for "Stop Government Abuse Week," the House is scheduled to vote on a regulatory reform bill that includes this legislation — a priority of the Small Business Committee.
The RFA requires federal agencies to assess the economic impact of their regulations on small firms, and if significant, consider less burdensome alternatives. Federal agencies sometimes fail to comply at all, or simply "check the box," fulfilling the letter of the law, while missing the purpose of the law entirely. Their analysis is weak; their solutions unworkable. These agencies must be accountable for the way their rule-writing plays out in the real world.
A small business owner from Wichita, Kansas, Carl Harris, earlier this year testified before the Committee that "…the reality is that far too often agencies either view compliance with the [Regulatory Flexibility] Act as little more than a procedural 'check the box' exercise or they artfully avoid compliance by other means."
That's not acceptable. The economy needs thriving, job-creating small businesses, but excessive and ill-considered regulations too often get in the way of growth. Congress must insist through the provisions of the Regulatory Flexibility Improvements Act that federal agencies can no longer get away with paying mere lip service to the RFA. The law is there to protect small businesses, and these job creators deserve those full protections, as Congress designed.
The point of the RFA is to ensure agencies examine how the regulations will affect small businesses and get the input of those who have to live with the requirements before putting a rule into effect. If agencies followed the spirit of the RFA, they would effectively work with — not against — America's 28 million small businesses. As Harris said in his testimony, "Agencies should seek to partner with small entities to help create more efficient, more effective regulations and, in so doing, reduce the compliance costs for small businesses."
The bipartisan Regulatory Flexibility Improvements Act, now Title III of the ALERT Act, updates the RFA's requirements and provides new tools to ensure compliance from regulating agencies. Among these key provisions, the bill requires all agencies to convene small business review panels to get input before proposing rules that will have a significant impact on small businesses. This way, small firms have a chance to be involved in the development of regulation on the front end before they have to live with it on the back end. Additionally, the bill requires agencies to consider the economic impacts more thoroughly, by assessing indirect impacts from regulations — the ripple effect — not merely the immediate or direct effect.
In September, 125 small-business groups and organizations signed a letter voicing the strong support of the small-business community for this legislative effort. Moreover, a U.S. Chamber of Commerce small-business survey revealed that regulations are among the top concerns of small businesses, only exceeded by the requirements of the health care law — further justifying the legislative fix.
Small businesses bear a heavy regulatory cost without the same resources in personnel or expertise as larger companies. In fact, in 2010, the Small Business Administration's study found that regulations cost small companies an average of $10,585 per employee, and compliance costs were 36 percent higher than large companies. The same study found that regulations cost the U.S. economy $1.75 trillion annually.
Regulations are mounting up, and the pace of new rule-making has reached record levels in recent years, with 2012 the costliest year on record. That regulatory pace is unsustainable for a healthy economy. The common sense provisions of this small-business legislation will encourage smarter, better regulations that avoid stifling growth, innovation and job creation. If the federal agencies can do their work as the law requires, then more Americans will be working for our nation's best job creators: small businesses.
The Greater Opportunities for Small Business Act of 2014 will increase the federal government goal for small business contracting percentage from 23 percent to 25 percent, and the Contracting Data and Bundling Accountability Act of 2014 will bring more transparency to data reported on bundled and consolidated contracts. When many small contracts are combined into one large contract, many small businesses are left at a disadvantage when bidding. Both bills will work to create a more even playing field for small contractors.
“These two pieces of legislation will go a long way towards increasing opportunities for small companies who want to grow and create jobs by doing business with the federal government,” said Chairman Graves. “By increasing the federal-wide goal for contracts to small businesses, and requiring greater accuracy, transparency and accountability in contract bundling and consolidation, we make it easier for small businesses to enter this marketplace and compete for contracts. The federal government spends nearly half a trillion dollars on contracted goods and services, therefore, we must ensure that the money is being spent efficiently, and small businesses have proven that they can do quality work cheaper and often faster.”
During Chairman Graves’ leadership, the Committee has successfully spearheaded small business contracting legislation that has become law. The National Defense Authorization Acts of 2013 and 2014 incorporated several Committee-sponsored contracting provisions, including making the small business goals part of senior agency employee reviews and bonus discussions, preventing contracting fraud by penalizing companies that front for large businesses, and changing limitations on subcontracting to make it easier for small companies to team on larger contracts.
Details of the legislation:
Greater Opportunities for Small Business Act of 2014:
• The federal government spends about $460 billion in contracting each year, with a goal of awarding 23% of prime contract dollars to small businesses.
• This legislation raises the small business contracting goal from 23% to 25%. Raising the goal by 2% means a substantial amount of new business for small businesses – about $10 billion worth.
• The federal government has missed this goal for seven consecutive years, but past success proves it is achievable.
• The legislation also ensures opportunities for small businesses as subcontractors, with a goal of awarding 40% of all subcontracted dollars to small businesses – an increase from the current goal of 35.9%. The new goal will go into effect once the subcontracting reforms in the FY 14 NDAA are fully implemented.
• The bill also promotes accurate reporting, by requiring that only prime contract awards can count towards the prime contract goal.
Contracting Data & Bundling Accountability Act of 2014:
• Recent GAO reports and Committee hearings have brought to light that the data on contract bundling and consolidation reported each year is seriously flawed. Some agencies claim not to have bundled a single contract in the 17 years since the original contract bundling legislation passed, but even a brief examination of contract practices suggests otherwise.
• This legislation requires the Small Business Administration (SBA) to work with other agencies to create and implement a data quality improvement plan to promote greater accuracy, transparency and accountability in the reporting of contract bundling and consolidation. It then requires GAO to assess the agencies’ success, and offer suggestions for further improvement.
• Properly labeling a contract as bundled or consolidated is incredibly important to small business competition, since the act of labeling the contract is what triggers a series of reviews and mitigation steps intended to promote opportunities for small businesses.
CMS Actuary Report
Basis of Report: Premium estimate is based on ACA provisions requiring guaranteed issue, guaranteed renewability and community ratings.
Comments: House Speaker John Boehner (R-Ohio) and House Small Business Committee Chairman Sam Graves (R-Mo.) say the report shows that two-thirds of Americans who work for small businesses will see premium increases.
Feb. 24 (BNA) -- Premiums for roughly 11 million people will increase, while those for about 6 million will decline because of provisions in the Affordable Care Act requiring health insurers to cover everyone with limited rate variations, according to a Feb. 21 report by the Office of the Actuary for the Centers for Medicare & Medicaid Services.
The Affordable Care Act requires all nongrandfathered health insurance coverage in the individual and group markets—plans issued after the law was signed March 23, 2010—to be guaranteed issue and guaranteed renewable, the actuary's report said. All nongrandfathered insurance plans in the individual and group markets can vary premium rates based only on age, family status, geography, and tobacco use, and the variation in the age and tobacco use factors is limited, it said. “This new premium rating requirement will impact the premiums paid by individuals and families working for small employers who offer health insurance,” it said.
The “Report to Congress on the impact on premiums for individuals and families with employer-sponsored health insurance from the guaranteed issue, guaranteed renewal, and fair health insurance premiums provisions of the Affordable Care Act” was released Feb. 24 by House Speaker John Boehner (R-Ohio) and House Small Business Committee Chairman Sam Graves (R-Mo.). The actuary's office is nonpartisan, Boehner said in a release.
“For all the promises of lower costs for small businesses, the administration now admits that far more of these workers will pay higher than lower premiums under the law,” Boehner said. “Two-thirds of small business employers face higher premiums as well, which is one of the reasons so many are struggling to create jobs under the president's law,” he said.
About 17 million people have been enrolled in fully insured small group health insurance through employers with 50 or fewer employees who will be affected by the new premium rating requirements in the ACA, the CMS actuary report said. Firms with employees who had better than average health risks would typically pay lower premiums and were more likely to be the firms that offer health insurance, it said.
About 65 percent of small employers offering health insurance coverage have premium rates that are below average, the report said. Once the new premium rating requirements go into effect small employers that offer coverage to their employees and their families would have average premium rates, it said. “Therefore we are estimating that 65 percent of the small firms are expected to experience increases in their premium rates while the remaining 35 percent are anticipated to have rate reductions,” it said.
Report Two Years Late
Boehner said the report was required at his request as part of the 2011 Budget Control Act, and it was due 90 days after enactment of that law. “The report, two years late, was published by the Obama administration late on Friday, February 21, 2014, with no public announcement,” he said. “It's clear why the Administration sought to delay and deemphasize the release of this report. It undermines the central promise of the president's health care law: affordable coverage. And the only reason this information has come to light is the hard oversight work of House Republicans,” he said.
“The Obama administration's long delay of this CMS report is consistent with the rest of the law—behind schedule and bad news for small business,” Graves said in a release. “The fact that two-thirds of Americans who work at small businesses will see premium increases because of the health law is devastating news. This is one more in a long line of broken promises from President Obama and Washington Democrats.”
Graves also said that a report by the nonpartisan Congressional Budget Office released earlier in February “provided economic data that echoed what many small businesses have been telling us—that the health law is killing jobs and harming the economy.” The CBO report said the number of hours worked because of the effects of the ACA will reduce the number of full-time-equivalent workers by about 2 million in 2017, rising to about 2.5 million in 2024 (24 DER A-15, 2/5/14).
Factors Not Considered in Estimate
In addition to premium impacts from guaranteed issue, guaranteed renewability and premium rating provisions, other factors in the ACA affecting rates include changes in product design, provider networks or competition, which weren't considered, the report said.
“In addition, other provisions of the ACA, including the coverage expansions, the extension of dependent coverage to age 26, the individual mandate, and the employer mandate will impact the availability of coverage, the take-up of that coverage, and the premium rates charged to those who currently have employer-sponsored insurance, but those impacts are not included in this estimate,” the report said. The actuary's office did a more complete report on the financial impacts of the ACA in 2010, it said.
The Department of Health and Human Services didn't respond to Bloomberg BNA's request for comment on the CMS actuary's report.
“The study just looked at: no preexisting condition exclusion, premium rating reforms, and guaranteed issuance, and found significant increases in premiums,” William Schiffbauer, a health-care attorney, told Bloomberg BNA in an e-mail.
“The legislation that directed the study did not factor in all of the other reforms including requiring individual and small group coverage to include the essential health benefits, no lifetime or annual limits, the MLR [medical loss ratio] rebate, and all of the new Exchange fees, fees for effectiveness research, and industry sector fees,” Schiffbauer said. Some of those provisions could add more pressure on premiums, he said.
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“Earlier this month, the nonpartisan Congressional Budget Office provided economic data that echoed what many small businesses have been telling us – that the health law is killing jobs and harming the economy. The bad news keeps mounting and our nation’s best job creators are paying the price. Also this month, the National Small Business Association released a detailed report that the overwhelming majority of small companies would suffer health insurance cost increases, and now the federal government’s CMS agrees.
“The Obama administration’s long delay of this CMS report is consistent with the rest of the law – behind schedule and bad news for small business. The fact that two-thirds of Americans who work at small businesses will see premium increases because of the health law is devastating news. This is one more in a long line of broken promises from President Obama and Washington Democrats.”
The 2011 Budget Control Act mandated that this report be completed 90 days after enactment of that law. However, two years later, the report was posted by the Obama administration late on Friday, February 21, 2014.
House Small Business Committee Chairman Sam Graves (R-MO) released the following statement on President Obama’s executive order to expedite the completion of the International Trade Data System by December 2016:
“Although 95 percent of the world’s market exists outside the United States, only one percent of small businesses participate in the international trade process, and this is primarily due to the complicated and duplicative export process,” said Chairman Graves. “The President’s executive order aims to expedite the completion of the International Trade Data System, however, more needs to be done to simplify the export process, so we can improve operational efficiency for those who already export and attract more small businesses that aren’t exporting. I hope the next step we take is to enact export coordination legislation like the Export Promotion Reform Act (H.R. 1409) and the State Trade Coordination Act (H.R. 1926), because more exports from small businesses translate to more jobs and greater economic growth for America.”
Last month, the Small Business Subcommittee on Agriculture, Energy and Trade, held a hearing on this topic with James Sanford, Assistant United States Trade Representative for Small Business, Market Access and Industrial Competitiveness. An August 2013 Government Accountability Office (GAO) report, requested by Graves, showed that the federal government needs to better manage, collaborate and promote trade programs so that export resources can be more efficient, ultimately leading to more small business exports. Last year, Graves and Committee Member Rep. Steve Chabot (R-OH) introduced legislation to reduce some of the key barriers and obstacles faced by small exporters. Both pieces of legislation were reported out of the Foreign Affairs Committee by voice vote on July 24.
The Small Business Committee, led by Chairman Sam Graves (R-MO), today held a hearing on the impact of wireless technology on small business growth and the overall economy, and the potential challenges and barriers that could limit growth.
The Committee received testimony from small businesses that create or rely on innovative wireless technologies about the economic benefits of these advances, and the need for spectrum so that expansion continues. Demand for mobile data soared by 62 percent in 2012, and is forecast to increase ninefold by 2017, according to the technology firm Cisco. Rapid innovation and new capabilities in wireless devices are driving this growth. A McKinsey Global Institute report estimates that one trillion devices and machines may be connected across the globe by 2025.
“Wireless technology brings a new job-creating dimension and efficiencies to all sectors of the economy with far-reaching potential for small businesses,” said Chairman Graves. “Not only are small firms designing new innovations, but also small businesses and family farms are effectively using wireless technology in myriad ways. We must ensure that future innovations aren’t limited by constraints on spectrum or other government-erected barriers that could restrain growth. The testimony of the witnesses today provided excellent insight on the innovative ways they rely on wireless technology for business growth.”
Materials from the hearing are available on the Committee’s website HERE.
Michael Feldman, Vice President of Engineering, BigBelly Solar, Newton, MA, said, “This industry is aimed at connecting devices together all around us, and providing useful data for humans to make intelligent decisions. A significant part of the BigBelly solution incorporates wireless technology to transmit data from the trash receptacles to a central database for processing…The technology used is very similar to that found in modern cell phones today, only instead of calling another person, the BigBelly calls another machine.”
Brian Marshall, Owner, Marshall Farms, Maysville, MO, testifying on behalf of the Missouri Farm Bureau Federation and the National Farm Bureau Federation, said, “For years, farmers have used technology advances to better match varieties of seeds, production inputs and management practices with specific field characteristics… While farmers have been experimenting with this technology for well over a decade, only now is the industry starting to consider all the uses of this transformative technology.”
Leo A. McCloskey, Senior Vice President, Technical Programs, Intelligent Transportation Society of America, Washington, DC, said, “Another challenge is the need to preserve dedicated spectrum in the 5.9 GHz band which was set aside by the Federal Communications Commission (FCC) to ensure high-speed, accurate, secure and reliable communications which are critical for connected vehicle safety systems. It is essential that the availability and performance of this spectrum is protected for safety purposes, while also freeing up additional spectrum where it makes sense and where it can be done without jeopardizing safety for expanded WiFi applications.”###
SHOP Enrollment Data Is Latest Front In Bickering Over Information on ACA
By Phil Kushin, February 10, 2014
“Today’s decision to delay yet another part of the law is another sign it is simply bad policy and is doing more harm than good to our economy and health care system. If it’s so great, why the need for multiple delays? Small businesses are grappling with health care costs that have doubled as a result of the law, and many businesses have already made hiring decisions based on the law’s requirements. Many companies are confused and perplexed by all of the changes and delays to the law, and today’s decision doesn’t help. Small businesses don’t need another postponement, they need a better law.”
HHS Ignores Congressional Inquiry Into SHOPs While Small Businesses
Continue To Suffer Under Obamacare
Graves Letter To Secretary Sebelius Goes Unanswered
Last month, Small Business Committee Chairman Sam Graves asked Health and Human Services Secretary Kathleen Sebelius to update Congress about the Obamacare Small Business Health Options Program (SHOPs) enrollment progress. The state-run SHOPs are off to a very sluggish start, and there is no data available for the federally-run program. The Administration has released the overall enrollment numbers for the health law, but hasn’t disclosed any information about enrollment via the SHOP exchange run by the federal government. Graves’ letter requested the enrollment numbers by last Friday, but the Committee has not received a response.
As small businesses are grappling with health care costs that have doubled as a result of Obamacare, many are confused and perplexed by all of the changes and delays to the law and the SHOPs in particular. A recent nonpartisan report shows that just the actions to repeal, defund, or delay the health law take up a dozen pages. It’s hard to imagine trying to run your small company while trying to keep up with the Obamacare cost increases, requirements, mandates, and rules, especially when deadlines keep changing. The following comments are just a few of those received from small business owners through the Committee’s interactive website, Small Biz Open Mic on this difficult challenge:
Because we are a small manufacturer in Massachusetts, we already have the highest health care costs in the US. The ACA has made things exponentially worse. It has slowed economic growth considerably and completely hampered our ability to hire new people.
Mark S. (Attleboro, MA) Lenn Arts, Inc., January 8, 2014
My husband and I own a small manufacturing company. We have contributed more than 50% towards our employees health insurance premiums for over 10 years. We have absorbed double-digit increases in premiums and offered high deductible plans in order to allow our employees and their families to be covered at a manageable cost. The plan that we offered in 2013 is considered "non-compliant" with the ACA. A "comparable" plan that is compliant will result in an average 27.9% premium increase for 2014. We cannot afford our portion and my employees cannot afford theirs. The delays in getting rates to employers will mean that we don't have enough time to make a well-considered decision on what to offer (if anything) to our employees. I spend more time on insurance issues than I do on running my business. How is this better for anyone?
Nancy Williams (Cheshire, CT) Harkness Industries, October 22, 2013
I have a small manufacturing business in Virginia. I have always offered health coverage to my full time employees… The cost for coverage went from $37,850.00 per year to $188,000.00 per year – almost a 500% increase. I can't afford to pay this amount!... We are a small group of people that like working together and the ACA law could have significant negative effects on my people and company. What are small businesses to do? We had good coverage and were able to barely afford it, now it is out of our hands!! and out-of-control!
David Carpenter (Wytheville, VA) Southwest Specialty Heat Treat, Inc., September 10, 2013
Recognizing the importance of entrepreneurs’ feedback in the process of shaping the very policies that will help determine their business sustainability and growth, Chairman Graves launched Small Biz Open Mic in September of 2011.
Committee to Hold Hearing on Small Business Opportunities in the Wireless Industry
WASHINGTON, DC – The House Small Business Committee, chaired by Rep. Sam Graves (R-MO), today announced the schedule for the week of February 10, 2014:
On Tuesday, February 11, at 1:00 p.m., the Committee will conduct a hearing titled, Building on the Wireless Revolution: Opportunities and Barriers for Small Firms. The hearing will focus on the development of innovative wireless products, the economic benefits and capabilities of these technologies, and potential barriers that could constrain the further growth and development of the wireless economy.
“The benefits of innovation and new wireless technology are evident throughout every sector of the economy, from family farms to the automotive industry,” said Chairman Graves. “While the wireless economy carries enormous economic potential, we must ensure that the market has the spectrum needed to continue to expand and that government barriers are not impeding growth.”
Watch the hearing live HERE.
Tuesday, February 11, 2014, 1:00 p.m. EST
2360 Rayburn House Office Building
Small Business Committee
Building on the Wireless Revolution: Opportunities and Barriers for Small Firms
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