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Before we begin, I would like to take a moment to remember the thousands of American lives that were lost on this day in 2001, and for the Americans who lost their lives during the terror attack in Benghazi last year. We will never forget them. The men, women, and children who died will ever be in our thoughts, and we will continue to pray for peace for their families. I ask my colleagues to join me for a moment of silence.
As we pause to remember the past today, it is fitting that we also hold this hearing to explore how we can move forward by supporting the brave men and women who have served our country in the wake of 9/11. America’s veterans face unique challenges as they return to civilian life. Some struggle with disabilities and combat stress injuries as a result of their service. Many others are older than traditional college students, work full time, or have a family to support.
Beginning with the enactment of the GI bill in 1944, the federal government has implemented a number of programs and initiatives to support servicemembers and veterans who wish to earn a postsecondary degree or obtain valuable job skills. This commitment to our men and women in uniform continues to grow with the Post-9/11 GI Bill, which provides financial support to help cover the cost of tuition, fees, books, and housing at all types of colleges and universities.
Since 2009, the Post-9/11 GI Bill has helped nearly one million veterans and their families access a postsecondary education. And as more troops return from Iraq and Afghanistan, postsecondary institutions now face the largest influx of student veterans on campus since World War II.
The higher education community has a responsibility to tailor programs and coursework to ensure the needs of this unique student population are met and taxpayer resources are used wisely and efficiently. Fortunately, many schools are rising to the challenge.
A growing number of postsecondary institutions now offer more flexible course schedules, the ability for veterans to earn credit for skills learned outside the classroom, and online coursework that can be completed on a student’s own time. Other institutions, proprietary schools in particular, are working with the business community to craft targeted programs that help veterans learn the skills necessary to compete for in-demand jobs in their local economy.
In my home state, the University of North Carolina’s Partnership for National Security not only coordinates with state business leaders, but also works directly with military partners to develop a number of initiatives geared toward supporting our men and women in uniform, including special degree programs, pre-deployment education courses, and internships and fellowships.
Additionally, the UNC SERVES program collects data to provide university leaders with a better understanding of the needs and outcomes of the active-duty and veteran student population. This information will help prospective students make more informed decisions about their postsecondary pathway, and it will also encourage institutions to establish special outreach efforts such as student groups, orientation events, and counseling offices that help veterans successfully transition into academic life.
With the Higher Education Act due for reauthorization next year, today’s hearing provides a valuable opportunity to highlight institutional efforts to support veterans and servicemembers, while also exploring potential policy changes that could strengthen the law. We have an excellent panel of witnesses with us today, and I look forward to their testimony.
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The House of Representatives today approved the Streamlining Claims Processing for Federal Contractor Employees Act (H.R. 2747). Introduced by Subcommittee on Workforce Protections Chairman Tim Walberg (R-MI) and Ranking Member Joe Courtney (D-CT), the bill moves responsibility for wage claims adjustments for federally-contracted workers from the Government Accountability Office (GAO) to the Department of Labor.
“I am pleased the House has passed this bipartisan, commonsense proposal that will decrease redundancies and promote greater efficiency within the federal government. This legislation will help ensure workers employed by federal contractors receive the pay they’ve earned in a more timely manner,” said Rep.Walberg. “I urge my Senate colleagues to support the bill and send it to the president as soon as possible.”
“Ensuring that federally-contracted workers receive compensation in accordance with the law is an issue of fundamental fairness. By moving the claims process to the Department of Labor, we can streamline the process and help workers get the pay they have rightfully earned in a timely manner,” said Rep. Courtney. “I applaud Chairman Walberg’s leadership on this important issue and look forward to continuing to work with him to find commonsense ways to improve protections for our nation’s workers.”
Under the Davis-Bacon Act, federally-contracted workers must be paid the “local prevailing wage” on government projects. The Contract Work Hours and Safety Standards Act (CWHSSA) requires federal contractors to pay workers one and one half times their basic rate of pay for hours worked in excess of 40 hours. While the Department of Labor enforces these laws, GAO has long been responsible for processing claims of workers who did not receive the appropriate wage. Since it no longer provides this service in other areas of the federal government, GAO has requested this authority be moved to the appropriate enforcement agency.
The Streamlining Claims Processing for Federal Contracted Employees Act will transfer this responsibility to the Department of Labor, which oversees other aspects of the Davis-Bacon Act and the CWHSSA. Identical legislation was approved by the House with overwhelming bipartisan support during the 112th Congress.
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With our nation facing difficult challenges at home and abroad, it is important we continue the work the American people sent us here to do. That includes pursuing commonsense reforms that will make the federal government more efficient and a better steward of taxpayer dollars. The legislation we are considering today is a small yet important part of that effort.
Approximately one out of every five workers is employed by a federal contractor. Drawing on the strength and expertise of the private-sector workforce to complete federal projects has helped deliver better results at a more competitive price for taxpayers.
A number of laws govern the wages workers on federal projects receive. For example, the Davis-Bacon Act requires federal contractors to pay workers the “local prevailing wage.” Additionally, the Contract Work Hours and Safety Standards Act ensures these workers receive one and one half times their basic rate of pay for hours worked in excess of 40 hours a week.
Both laws have played a central role in federal contracting for decades; however, both are plagued by inefficiencies. The department is responsible for enforcing these laws, yet the Government Accountability Office has long been a middle-man in an overly bureaucratic claims process.
Here is how the current process works.
The Department of Labor first determines whether workers have failed to receive their proper wages and calculates the amount of pay they are due. Next the department forwards to GAO a report that states the names of underpaid employees and the amount they each are owed. Funds from the relevant contracting agencies are delivered to GAO, which then deposits the money into an account at the Treasury Department. Based upon claims forms submitted by affected workers, GAO transmits payment requests to Treasury, which disburses directly to workers their unpaid wages. It should be noted that GAO has no authority to overturn or even challenge the department’s judgment in this area.
As a result of this lengthy back-and-forth between numerous federal entities, workers can experience delays in receiving their correct wages and taxpayers are forced to support an unnecessarily complex process. I think we can all agree we can do better.
H.R. 2747 is commonsense and bipartisan legislation that would transfer GAO’s administrative duties under these two laws to the proper federal agency – the Department of Labor. GAO has requested this relief and believes it will encourage more efficiency within the federal government. Furthermore, it will free up time and resources at GAO that can be better spent fulfilling its central mission of investigating waste and abuse in the federal government.
By moving wage claims adjustments for federally contracted workers to the Department of Labor, we can ensure workers receive their pay in a timelier manner while providing greater efficiency. Quite simply, Mister/Madam Speaker, this legislation is a win for workers and taxpayers.
The Department of Justice recently filed a lawsuit to stop the state of Louisiana from implementing a private school choice program to help low-income students trapped in failing public schools. House Education and the Workforce Committee Chairman John Kline (R-MN) is among those who have voiced concerns about the administration's action, stating, “Private school choice programs provide students the priceless opportunity to escape underperforming schools. Any effort by the Obama administration to prevent low-income and minority students from participating in these programs is extremely troubling.”
An article in Bloomberg News highlights the administration’s attack on school choice:
The administration’s latest strike against school choice is a lawsuit against a program in Louisiana, created by Republican Governor Bobby Jindal. The Justice Department is using a 1975 desegregation order to argue that Louisiana should get approval from a federal court before giving scholarships to students in some school districts. Otherwise, the department claims, the scholarships could make Louisiana schools less racially integrated.
The program is open to poor families with kids in public schools that have gotten a C, D or F from the state government. In Louisiana, most of those families are black, not members of the White Citizens’ Council. The Jindal administration says 90 percent of the recipients are black. The state’s department of education reports that so far these students are doing better on math and literacy tests than they were in public schools.
The Justice Department cites two public schools to illustrate its concerns. Five white students used scholarships to leave one, “reinforcing the racial identity of the school as a black school.” In another, the exit of six black students made a “white school” whiter.
This is racial bean-counting at its worst. Jason Bedrick, who studies education policy at the libertarian Cato Institute, calculates that the first school went from 29.6 percent to 28.9 percent white. The second went from 30.1 percent to 29.2 percent black. These are trivial changes.
The Justice Department is also measuring school segregation in a perverse way. It treats a school as integrated when it matches the racial composition of the school district. Yet the districts are themselves segregated -- and tying school attendance to residency makes that segregation worse. Neighborhoods with good public schools have higher property values, which makes it harder for poor black families to move into them. Americans who have enough money exercise school choice when they buy their homes.
Greg Forster, a researcher who favors school choice, addresses the measurement problem by comparing schools’ racial makeup to that of their metropolitan areas. He points out that seven studies have found that school choice promotes racial integration -- measured correctly -- while one found it has no impact. No study has found that it promotes segregation.
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Established by the Education Sciences Reform Act in 2002, the Institute of Education Sciences is responsible for gathering information on education progress, conducting research on educational practices in the nation’s schools, and examining the quality of federal education programs and initiatives.
The information collected and disseminated by the Institute helps schools identify and implement successful education initiatives. Additionally, the data allows taxpayers and congressional leaders to keep tabs on the federal investment in education, which is especially important in these times of fiscal restraint.
The Education Sciences Reform Act has been due for reauthorization since 2008 and traditionally moves right after the Elementary and Secondary Education Act. In July the House approved the committee’s legislation to rewrite ESEA, known as the Student Success Act. The Education Sciences Reform Act presents another opportunity to help provide teachers and parents the tools necessary to raise the bar in our schools, and I look forward to working with my colleagues on both sides of the aisle to develop smart policies that will improve the law.
To lay groundwork for the reauthorization, last year Ranking Member George Miller and I asked the Government Accountability Office to conduct a study on the effectiveness of the Institute’s research. Though the final report has yet to be released, we have received a few preliminary findings that highlight areas for improvement.
For example, GAO confirms the Institute has greatly improved the quality of education research over the last decade, but notes there is often a significant delay in disseminating key data and findings to education officials. As a result, the research is not always immediately relayed to parents and school leaders, reducing its usefulness and relevancy.
GAO also found the Institute does not always properly evaluate the efficacy of its own programs and research arms, which could lead to unnecessary costs, confusion, and redundancies. Currently the Institute operates 10 regional labs and 12 research and development centers to conduct research, provide technical assistance, and distribute data. Meanwhile, the Department of Education operates five content centers and 16 comprehensive centers that serve some of the same purposes.
As we develop policies to strengthen the Institute, we should consider streamlining the federal research structure to reduce duplication, enhance accountability, and make it easier for states and school districts to access important information. We must also ensure the Institute of Education Sciences has the flexibility necessary to modernize its research methods and keep up with new developments in education delivery and practice. Finally, we must acknowledge that the value of the Institute’s research depends on its political autonomy, and take the necessary steps to protect the organization’s independence.
We are fortunate to have with us several witnesses who can help us better understand what is and is not working within the Institute of Education Sciences, including a representative from GAO who can provide more information on the aforementioned study. Their testimony will inform our efforts to reauthorize the Education Sciences Reform Act and help us craft policies that will improve the quality and usefulness of education research.
The House Committee on Education and the Workforce, chaired by Rep. John Kline (R-MN), today held a hearing to examine opportunities to improve education research and the Institute of Education Sciences (IES).
Established in 2002 under the Education Sciences Reform Act, the Institute of Education Sciences gathers information on education progress, conducts research on educational practices in the nation’s schools, and examines the quality of federal education programs and initiatives.
During the hearing, National Board for Education Sciences Chair Dr. Bridget Terry Long described the value of quality education research: “As we work to raise student achievement, foster productive learning environments, and bolster the social contributions of our schools and universities, the knowledge, inventions, and partnerships created through educational research are essential – it is through research that we determine the best ways to produce the needed gains and help to make tough decisions about how to use our limited funds.” Dr. Long added, “In essence, research is the foundation for improving education.”
Kathy Christie, Vice President of Knowledge/ Information Management & Dissemination for the Education Commission of the States, explained how materials collected and distributed by IES are used to inform state and local education decisions. “Policymakers at every level in states – chief state school officers, governing board members, legislators, and governors – all have a role to play in developing and implementing education initiatives,” Ms. Christie said. “Research matters not only to those implementers in the field – the superintendents, principals, and teachers – but to those who are committed to improving the system of education."
Last year Chairman Kline and Ranking Member George Miller (D-CA) asked the Government Accountability Office (GAO) to conduct a study on the effectiveness of Institute of Education Sciences’ research. George Scott, the Director for Education, Workforce, and Income Security Issues for the GAO testified during the hearing about the study’s preliminary findings.
“Since its creation more than a decade ago, IES has made significant contributions to strengthening the rigor of the education research field and has considerably elevated the demand for conducting and has promoted the use of scientifically based research in our nation’s education system.” said Mr. Scott said. “However, IES could continue to build on these efforts by improving its ability to release relevant and timely information to policymakers and practitioners…In addition, the ability to prioritize and conduct effective evaluation is critical to helping make best use of limited resources and to support Congress in making informed decisions about which programs to continue, expand, modify, consolidate, or eliminate.”
Noting the committee’s plans to reauthorize the Education Sciences Reform Act this fall, Chairman Kline acknowledged the GAO’s findings and outlined his goals for improving the Institute’s work. “The Education Sciences Reform Act presents another opportunity to help provide teachers and parents the tools necessary to raise the bar in our schools…We should consider streamlining the federal research structure to reduce duplication, enhance accountability, and make it easier for states and school districts to access important information. We must also ensure the Institute of Education Sciences has the flexibility necessary to modernize its research methods and keep up with new developments in education delivery and practice.”
To read witness testimony, opening statements, or watch an archived webcast of today’s hearing, visit www.edworkforce.house.gov/hearings.
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On Wednesday, September 11th at 12:00 p.m., the Subcommittee on Higher Education and Workforce Training, chaired by Rep. Virginia Foxx (R-NC), will hold a hearing entitled, “Keeping College Within Reach: Supporting Higher Education Opportunities for America’s Servicemembers and Veterans.” The hearing will take place in room 2175 of the Rayburn House Office Building.
Since 1944 the federal government has implemented a number of programs and initiatives to ensure our men and women in uniform have affordable access to postsecondary education and training opportunities. As more troops return home to the U.S. from the wars in Iraq and Afghanistan, higher education institutions now face the largest influx of veteran students on campus since World War II – and that number is expected to continue to grow. Higher education institutions have a responsibility to offer effective and useful services to help these men and women gain the skills and knowledge necessary to successfully join the workforce.
Wednesday’s hearing will provide members an opportunity to explore the steps colleges and universities are taking to support American servicemembers and veterans, while also discussing best practices that might be utilized by institutions more broadly. To learn more about Wednesday’s hearing, visit www.edworkforce.house.gov/hearings.
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The drop in the unemployment rate in August to a 4½-year low was hardly cause for celebration. The rate fell because more people stopped looking for work.
More than 300,000 people stopped working or looking for a job. Their exodus shrank the so-called labor force participation rate — the percentage of adult Americans with a job or seeking one — to 63.2 percent. It's the lowest participation rate since August 1978.
Once people without a job stop looking for one, the government no longer counts them as unemployed. That's why the unemployment rate dropped to 7.3 percent in August from 7.4 percent in July even though 115,000 fewer people said they had jobs.
If those who left the labor force last month had still been looking for work, the unemployment rate would have risen to 7.5 percent in August.
"Pretty disappointing," said Beth Ann Bovino, U.S. chief economist at Standard & Poor's Ratings Services. "You saw more people leave the job market and fewer people get jobs. Not a good sign."
Back in 2000, the participation rate hit a high of 67.3 percent. At the time, women were pouring into the labor force. But women's participation fell modestly through the mid-2000s — then dropped sharply from late 2009 through 2013.
Women's participation rate is now 57 percent. The rate for men is nearly 70 percent.
Another factor in the declining participation is that the oldest baby boomers have reached retirement age.
But Craig Alexander, chief economist at TD Bank Group, says "demographics cannot explain the amount of decline" in labor force participation.
Many Americans without jobs remain so discouraged that they've given up on the job market. Others have retired early. Younger ones have enrolled in school.
Some Americans have suspended their job hunt until the employment landscape brightens. A rising number are collecting disability checks.
"It's not necessarily people retiring," Bovino says. "It's young people going back to school" rather than taking their chances on a weak job market.
Labor force participation for Americans ages 16 to 19 was just 34 percent last month. That's near their record low of 33.5 percent set last year.
It isn't supposed to be this way. After a recession, a brightening economy is supposed to draw people back into the job market. But it hasn't happened. Labor force participation "certainly shouldn't be at current levels," Alexander says.
There aren't enough jobs being filled. Employers are hiring about 4.3 million people a month — before layoffs, dismissals and resignations. In 2007, before the Great Recession, they were hiring 5.2 million a month.
There are three unemployed people, on average, competing for each job opening, compared with 1.8 when the recession began in December 2007.
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On Tuesday, September 10th at 10:00 a.m., the House Committee on Education and the Workforce, chaired by Rep. John Kline (R-MN), will hold a hearing entitled “Education Research: Exploring Opportunities to Strengthen the Institute of Education Sciences.” The hearing will take place in room 2175 of the Rayburn House Office Building.
Established by the Education Sciences Reform Act, the Institute of Education Sciences gathers information on education progress, conducts research on educational practices in the nation’s schools, and examines the quality of federal education programs and initiatives. This information helps parents make decisions about their children’s learning experience and provides taxpayers valuable data about the federal investment in education. Additionally, state and local education officials can use the Institute’s research to identify and implement successful instructional programs, curriculum, and school improvement strategies.
Tuesday’s hearing will provide committee members an opportunity to discuss ways to improve the quality, timeliness, and usefulness of education research. Members will also examine opportunities to strengthen the Institute of Education Sciences through the upcoming reauthorization of the Education Sciences Reform Act. To learn more about Tuesday’s hearing, visit www.edworkforce.house.gov/hearings.
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Amid news reports the administration is crafting new regulations to appease union critics of the health care law, House Education and the Workforce Committee Chairman John Kline (R-MN) and House Ways and Means Committee Chairman Dave Camp (R-MI) today requested the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) estimate the taxpayer cost of providing premium tax credits to individuals participating in multiemployer health care plans, which overwhelmingly serve union members.
“Any regulatory scheme that extends taxpayer subsidies to union health plans would blatantly contradict the president’s health care law,” said Chairman Kline. “Union leaders supported the government takeover of health care, and if they want to protect workers from its destructive consequences they should work with Congress to repeal the law. Propping up a fatally flawed law through executive fiat exacerbates the pain and costs suffered by America’s families.”
“In the more than three years since signing ObamaCare into law,” said Chairman Camp, “President Obama has unilaterally granted waivers, special deals and delays to unions and other politically-favored friends. This special treatment is unfair to the American families and individuals who are burdened with higher health costs and losing the insurance they have and like as a result of this law.”
BACKGROUND: The Patient Protection and Affordable Care Act (PPACA) provides that only individuals who purchase insurance through a “qualified health plan” sold in health benefit exchanges are eligible for premium taxpayer credits. According to an analysis provided to the Education and the Workforce Committee by the nonpartisan Congressional Research Service (CRS), multiemployer health plans do not meet the definition of a “qualified health plan” and “it seems unlikely that an individual who is enrolled in a multiemployer health plan would be eligible for a premium tax credit.”
Faced with this reality, unions are increasingly voicing concerns with the health care law. Leaders with the International Brotherhood of Teamsters, United Food and Commercial Workers, and UNITE-HERE wrote ObamaCare will “shatter” the “hard-earned health benefits” of union workers. The International Brotherhood of Electrical Workers believes “implementation of the [PPACA] is jeopardizing multiemployer plans and the individuals the plans cover.”
In response, Inside Health Policy reports the Obama administration is “working on regulations to address criticisms raised by unions about the health reform law.” It’s not clear how the administration would unilaterally respond to these concerns without a change in the law approved by Congress. However, extending taxpayer subsidies to union health plans would lead to more federal spending. As Chairmen Kline and Camp note in their letter:
According to the Department of Labor there are over 1,800 multiemployer plans that cover some 6.2 million individuals. While not all of these individuals would be eligible for premium tax credits due to income thresholds, potentially millions would qualify. Therefore, the implications for American taxpayers are significant.
To understand the potential costs, the chairmen requested a response from CBO and JCT by September 19th.To read the letter from Chairmen Kline and Camp, click here.
By Avik Roy
A few weeks ago, I discussed the fact that labor unions have been increasingly vocal about their objections to certain provisions of the Affordable Care Act. Obamacare will “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class,” wrote three labor leaders in July. Now, according to a report from InsideHealthPolicy, the Obama administration is considering offering insurance subsidies—intended for the uninsured—to labor union members who already have employer-sponsored coverage.
The issue at hand is the way Obamacare affects multi-employer health plans, also known as Taft-Hartley plans. These plans consist of employer-sponsored health insurance that is arranged between a labor union in a particular industry, such as restaurants, and small employers in that sector. Approximately 20 million workers in the United States are covered under such arrangements, including 800,000 of the 1.3 million members of the United Food and Commercial Workers International Union, whose leader, Joseph Hansen, signed the letter I described above.
Workers with employer-sponsored coverage don’t qualify for subsidized coverage on Obamacare’s insurance exchanges. Those subsidies are designed for low-income people who aren’t offered coverage from their employers, and have to shop for insurance on their own. But the labor union leaders want those subsidies to also apply to their members with employer-sponsored coverage, even though they already get those benefits tax-free due to the employer tax exclusion for health insurance.
Now, according to Rachana Dixit of InsideHealthPolicy, the administration is “working on regulations to address the issue” that people covered under Taft-Hartley plans aren’t eligible for subsidies. But it’s not an “issue” in the sense of being a glitch or a mistake; union leaders are seeking special treatment, and additional taxpayer subsidies, that other participants in employer-sponsored coverage don’t get.
“Democratic aides and sources off Capitol Hill say conversations about unions’ concerns are ongoing, and they say that the administration is working on regulations to address the issue,” Dixit writes. “But, it is not clear if the proposed Department of Labor rule” would satisfy unions’ concerns. “Separately, House Minority Leader Nancy Pelosi [D., Calif.] said to union members earlier this month that she was still working to resolve their concerns about the law, particularly on the Taft-Hartley plan issue.”
Richard Trumka, president of the AFL-CIO, confirmed to Alexis Simendiger of RealClearPolitics that “fixes” to the law were a “topic of conversation among top labor leaders and senior White House officials this week.” “We were talking about health care, and we’ll continue to talk about health care to try to solve problems,” said Trumka. Trumka, James Hoffa, chief of the International Brotherhood of Teamsters, and other labor leaders met with President Obama’s chief of staff, Denis McDonough, on Tuesday.
However, it’s not clear what the White House can unilaterally do to address unions’ concerns. The text of the Affordable Care Act is straightforward; if you have gained coverage through an employer-sponsored health plan, you’re not eligible for subsidized coverage in the exchange, because you already get a subsidy through the tax code: you don’t pay income or payroll taxes on the value of your health coverage.
If, suddenly, the 20 million people on Taft-Hartley plans were eligible for subsidies, Obamacare’s costs would skyrocket. If half of those Taft-Hartley enrollees gained $5,000 per year in tax credits along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.
I would say that it’s inconceivable that the White House would seek to impose such a “fix” to Obamacare without the consent of Congress. But, given the other changes that the administration has made to the health law—of similarly questionable legality—we can’t rule anything out.
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Good morning everyone and welcome to today’s hearing. I’d first like to take a moment to thank our witnesses for joining us to discuss the important issue of health care. I would also like to thank the staff at the Lexington Public Library for their warm hospitality.
Since the president’s plan for health care reform became law in 2010, employers and job creators have grown increasingly worried about the law’s effect on their families and small businesses. More than 11 million Americans are searching for a job today – including 178,000 workers here in the Bluegrass State. Building a stronger economy for businesses to grow and hire new workers remains a national priority. As elected policymakers, we have to examine whether federal policies are helping or hurting that effort.
According to the so-called experts in Washington, the health care law is working just fine. Secretary Kathleen Sebelius, the president’s top health care official, described reports of job losses stemming from the law as “speculation.” The White House called the law’s perverse incentive for businesses to rely more on part-time employees an “urban legend.” And the president himself has dismissed problems with implementation of the law as mere “glitches and bumps.”
However, news reports and personal experiences of every day Americans reveal a much harsher reality than supporters of ObamaCare would like to admit. It seems each day workers and job creators encounter new challenges as they look to ease the pain this government takeover of health care has inflicted on their workplaces.
A leading concern for many is the employer mandate, which requires businesses with 50 or more full-time workers to provide government-approved health insurance or pay higher taxes. The nonpartisan Congressional Budget Office has said this mandate will impose a $140 billion tax increase on employers. It’s no secret what happens when job creators are forced to pay higher taxes: Fewer jobs are created.
This is precisely what employers have said time and again. For example, a Gallup poll showed 41 percent of employers have frozen hiring due to the health care law. The same poll revealed more than half of small business owners expect the law will increase health care costs. As a result, one out of four small business owners may stop offering health insurance as they try to control costs.
Perhaps this explains why President Obama decided to delay enforcement of the employer mandate for one year. While this temporary reprieve is certainly welcome news, it does not alter the fact this fatally flawed law will destroy jobs – regardless of when it is implemented. The unilateral delay of the employer mandate is also an implicit admission that the president’s health care law isn’t working. In fact, the law is making our economy and health care system worse.
As a doctor who practiced medicine for more than 30 years, I know our health care system isn’t perfect. It is far too expensive and too many families lack access to affordable care. If we are going to put Americans back to work and advance smarter reforms that will help lower health care costs, we must first repeal or dismantle the president’s misguided law.
Today’s hearing plays a vital role in reaching these important goals. I want to thank our witnesses again for being with us today and sharing their personal experiences with the committee.
Thank you, Mr. Chairman. I appreciate you all coming to Kentucky today to discuss Obamacare and the impact it’s having on the economy and employers, particularly in the Commonwealth of Kentucky. Throughout August and the beginning of September, I am hosting 21 town hall meetings – one in every county in the Second District. Obamacare continues to be a top issue at each meeting, with Kentuckians wondering how it will impact them, their employees, their jobs, and their health care coverage.
Unfortunately, we don’t have all the answers. The law that was famously “passed so we could find out what’s in it” has yet to calm the fears of ordinary citizens. Will their employer reduce their hours so they no longer trigger the requirement for health insurance? Will they be able to stay on their current health insurance plan? Will their premiums be affordable or will they have to spend more for essentially the same coverage? Will employers be able to continue to afford to provide insurance for their workers? Will they be able to hire the few extra workers they need or will that cause them to trigger the employer mandate?
There is no shortage of red flags when it comes to the train wreck known as Obamacare. The one-size-fits-all law is proving to be disastrous for consumers, employers and health care providers alike. In July, the nonpartisan Government Accountability Office warned that because government officials have missed multiple key deadlines to set up the new health insurance exchanges, there is serious concern that the exchanges will not be ready in October, as scheduled.
The IT data security testing necessary to open the exchanges was recently pushed back until September 30th – the day before the exchanges are expected to go live. This is after multiple missed deadlines and leaving them with no buffer to correct any problems, risking possible security lapses.
Employers and families across Kentucky have expressed serious concerns about meeting the requirements of the law and wondering if they will lose their coverage, be forced to choose different providers, or be saddled with enormous new costs. Given the Administration’s move to delay only the employer mandate, families and small business owners are left with even more uncertainty.
Small businesses, the backbone of our economy, are likely to be hardest hit. Some local insurers say the law could put them out of business. One restaurant owner says it will be a challenge for the whole industry and many will be forced to lay off employees. Others simply say it will be extremely difficult to insure all of their existing employees. With the lack of information and transparency from the Administration, business leaders don’t even know what types of insurance programs they might be able to offer or if they will be forced to alter the shape of their workforce in order for their business to stay afloat.
Given the lack of information and tools available for implementation, it is evident that not only is this law not the solution to our nation’s health care problems, but it is not ready for implementation. I hope that today’s field hearing will offer us an opportunity to explore these concerns further and hear directly from employers about how the law is impacting them.
I’d like to thank everyone for coming today and participating in this field hearing. I’d especially like to thank the House Education and the Workforce Committee for its interest and willingness to come to Lexington, Kentucky to hold this hearing. Thank you to Chairman Roe, Congressman Guthrie, and Congressman Yarmuth for traveling to the Sixth District so that we can continue to assess the impact of the Affordable Care Act – commonly known as Obamacare – on American families and employers.
Finally, I’d like to thank all the witnesses with us today. You are the most important part of this hearing because you can provide vital, first-hand insights into the health care challenges facing workers and small businesses. We are here to listen to what you have to say.
It’s clear that cracks in Obamacare are growing and getting deeper. Slowly but steadily, the Administration and its supporters have reluctantly had to acknowledge the shortcomings of the law. In the past few weeks and months, we have seen the news stories about problems with the implementation of Obamacare; we have seen front page stories about massive rate increases in the insurance market; and we have all heard about the Administration’s decision to temporarily delay for one year the implementation of the law’s employer mandate.
While I certainly welcome the Administration’s interest in saving businesses from Obamacare’s costly and burdensome mandates, this does raise a number of questions that are central to the viability of the law:
Now, my opposition to Obamacare is not a partisan one – it’s not simply because the President is a Democrat and I’m a Republican. My opposition is simply because I believe that Obamacare is bad policy for the American people. Obamacare does nothing to lower healthcare costs, which are the main driver of our debt. Instead, the law will lead to massive job losses, the rationing of care, insurance policy changes, trillion dollar tax increases, increases to the national debt, violations of religious liberties, and higher health care premiums and costs on American families. In fact, despite the President’s promise that premiums would decrease by $2,500, the average family premium has grown by over $3,000 since 2008.
On top of all of this, it’s worth noting that young people are among those most punished by the law. Reports indicate a rate shock for young adults under this law, with these individuals seeing premiums increase on average between 145 and 189 percent annually.
As you can all see, there are many different aspects to this law. I’m excited for today’s hearing though because it’s a great opportunity for us to dive further into one particular area: Obamacare’s impact on jobs. One of my top priorities in Congress is getting Kentuckians back to work, and I believe that Obamacare stands firmly in the way of this goal.
As I have traveled around the Sixth District and spoken with employers throughout central and eastern Kentucky, a consistent theme I’ve heard is employers citing Obamacare as creating a severe chilling effect on their ability to retain and hire employees. And this is certainly not a sentiment exclusive to Kentucky. A March report from the Federal Reserve specifically stated, “Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.” Further, According to a study by the National Federation of Independent Business, an employer mandate like the one included in Obamacare could eliminate over one million jobs!
In addition to the lost jobs, there are also significant concerns with how Obamacare will lead to shifting more and more full-time workers to a part-time basis or to 29 hours. While this may seem odd and counterproductive, the law is unfortunately forcing employers to get creative in order to free themselves from its mandates and higher costs.
The bottom line is that Kentucky’s workers, families, and job creators deserve permanent relief from Obamacare, not a one year reprieve. I am hopeful that this hearing can play a constructive role in the process by shining a spotlight on the need to provide permanent relief from Obamacare. I look forward to hearing from the witnesses and again thank them for coming today to share their story.
Costly Regulatory Uncertainty
“Even though K-VA-T has long offered quality, affordable health coverage to its full-time associates, you might be surprised by the challenges that our company, distribution network, and each of our 106 stores are facing in order to comply with this new law. Over the past couple of years, I have spent a significant amount of time attending conferences, reading the regulations, and engaging with consultants and legal counsel to interpret the Affordable Care Act and its many new rules – some of which we are still awaiting…” – Mr. Donnie Meadows, Vice President Human Resources, K-VA-T Food Stores, Inc., Abingdon, VA
Higher Health Care Costs
“Next year many employers in Kentucky as around this country will face significant premium increases that will force them to radically change the way they provide benefits to their employees or in extreme cases, like my client that is facing a 110 percent increase, may be forced to drop health insurance altogether and send their employees into the exchanges.” – Mr. John Humkey, President, Employee Benefit Associates, Inc., Lexington, KY
More Job Destroying Bureaucracy
“No one can deny that the toxic ingredient in today’s job market is the so-called Affordable Care Act. We have an entrenched bureaucracy in the U.S. that is now the fourth branch of our government. It will be the IRS who will ram the Affordable Care Act down everyone else’s throats but their own. I never, ever dreamed that I would live to see the day when my own government would work day and night to put me out of business.” – Ms. Barbara Jane Moores, President & CEO, BJM & Associates, Inc., Lexington, KY
“According to the so-called experts in Washington,” said Rep. Roe, “the health care law is working just fine. Secretary Kathleen Sebelius, the president’s top health care official, described reports of job losses stemming from the law as ‘speculation.’ The White House called the law’s perverse incentive for businesses to rely more on part-time employees an ‘urban legend.’ And the president himself has dismissed problems with implementation of the law as mere ‘glitches and bumps.’ However, news reports and personal experiences of everyday Americans reveal a much harsher reality than supporters of ObamaCare would like to admit.”
To read witness testimony, opening statements, or watch an archived webcast of today’s hearing, visit www.edworkforce.house.gov/hearings.
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House Education and the Workforce Committee Chairman John Kline (R-MN) and Subcommittee on Workforce Protections Chairman Tim Walberg (R-MI) released the following statement after the Department of Labor issued a proposed regulation to reduce the permissible exposure limit to silica:
No one should be threatened by a deadly disease because of the work they do to support a family. Eliminating the health risks posed by silica must be a national priority. To achieve this goal we need strong, sensible standards and tough, responsible enforcement. OSHA’s regulatory proposal will have a significant effect on America’s workplaces. Two years ago the committee urged the administration to bring this regulatory proposal out of the shadows and allow for public input, and we are pleased to see the administration do so. The committee will closely examine the proposed rule, as well as the science and process surrounding its development, to ensure the best policies are in place to protect workers.
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House Committee on Education and the Workforce Chairman John Kline (R-MN) issued the following statement in response to President Obama’s proposal to address rising college costs:
The federal government, states, and institutions have a shared responsibility to help rein in college costs. Earlier this month, I was pleased to join my House and Senate colleagues as the president signed into law bipartisan legislation that lowers loan interest rates for millions of students. This new law illustrates the progress we can make on behalf of American families when we work together to craft smart policies, and I hope to build upon this success as we work toward the shared goal of ensuring more students have access to an affordable higher education.
While I am pleased the president’s new plan recognizes the importance of promoting innovation and competition in higher education, I remain concerned that imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage – and even lead to federal price controls. As always, the devil is in the details, and I look forward to examining the president’s proposal further as part of the committee’s ongoing efforts to reauthorize the Higher Education Act and help improve college affordability and access.
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