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Washington Watch - February 11, 2009

Quick Look: Stimulus Update
On Tuesday, the Senate passed its economic stimulus proposal, sending it back to the House for a final conference to work out the differences in the two versions before delivering it to President Obama to sign into law. At $838 billion, the Senate measure is nearly $20 billion more than the House version, which passed in late January. The first major piece of legislation in the new Congress has lawmakers pushing to finish by Presidents Day recess.

Among those points of contention still to be resolved:
  • Allocations for the alternative minimum tax and for state aid; 
  • Funding for education efforts and Medicaid; 
  • Provisions for roadway projects; 
  • College tuition tax credits

Stay tuned to for major updates on the stimulus package.

NASE Health Advisor Calls For Congress to Address Health Care Costs
The House Committee on Small Business recently held a hearing on how small businesses will be affected by various proposals for health care reform, especially in regard to the critical issues of affordability and choice.

In testimony before the committee, the NASE’s Senior Health Advisor Michael Beene informed members of Congress that, according to a 2008 NASE study, micro-businesses are spending a median of 5.5% of their total sales on health insurance benefits. That number has increased by nearly half (48.6%) since 2005.

“The escalation of health costs is most strongly felt by solo practitioners, who are spending more of their total sales on health insurance compared to three years ago,” said Beene. “With such a large percentage of revenues going to health coverage, we can see why this expenditure is one of the first to be decreased or cut when business owners are faced with hard economic times.”

Beene mentioned proposals such as a self-employment tax deduction on health insurance, allowing the self-employed to participate in Health Reimbursement Arrangements (HRAs), and the introduction of health tax credits to make health coverage more affordable to the self-employed and micro-business.

Also addressed was the effect that an individual or employer mandate may have on health insurance affordability. An employer mandate to purchase and provide health coverage that does not exempt micro-business, those with ten or less employees, would be destructive to this important sector of the economy. Based on NASE's 2008 health study, only one in five micro-businesses nationwide are currently providing employer-based coverage to full-time employees. Consequently, an employer mandate would put millions of owners out of business and leave millions of workers unemployed.


Expansion of Children’s Health Insurance Program Becomes Law

President Obama recently signed legislation (H.R. 2) into law to expand the State Children’s Health Insurance Program (SCHIP) with $32.8 billion in extra funding over the next four and a half years.

President George W. Bush vetoed two similar bills during the 110th Congress.

“The way I see it, providing coverage to 11 million children through CHIP is a down payment on my commitment to cover every single American,” said President Obama at the signing ceremony.

The additional funding provided by the bill is estimated to allow coverage of an additional 4.1 million children under the program.

Republicans in both chambers opposed provisions in the bill such as increased family income eligibility limits, loosened identity checks for enrollment, and enrollment of legal immigrant children who have been in the United States for less than 5 years.

The final version of the bill, as amended by the Senate, included a state option to provide dental insurance and other provisions.

SCHIP is a joint federal-state program that was created in 1997 to provide health insurance to children in families that are low-income but do not qualify for the larger Medicaid program.


Micro-Businesses Turn To Federal Outreach Programs
The self-employed are speaking out about their support for federal small business programs and hoping the Obama Administration is listening. In a recent online poll by the NASE, an overwhelming majority of business owners (80%) want the new president to improve and expand current small business federal programs.

Over one-quarter of entrepreneurs have utilized services offered by the federal government, despite the dwindling resources of many small business programs. For years, the NASE has been a supporter of federal outreach that consistently and effectively aids the self-employed and micro-businesses community. Funding for SBA programs has faced drastic cutbacks for the past several years, including Women’s Business Centers and Small Business Development Centers (SBDCs).

As indicated by the poll, the most popular programs offered by the federal government are SBA Business Loans (Basic 7(a) loan, Micro-Loan, 504 loan), SBDCs, SCORE (Service Corps of Retired Executives) and Women Business Centers.

Click here for the full study results.


Lawmakers and media outlets across the country rely on and regularly cite the NASE as a source of small and micro-business expertise. Help the NASE make sure the micro-business perspective is heard by taking this month’s poll.

Click here to log-in and participate

Washington Watch Online
Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.

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