Small-business advocate taunts health providers

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By David M. Dickson

UPDATED:

The president of the National Federation of Independent Business, the main small-business lobby, mocked promises made this week by health care providers to squeeze $2 trillion from health costs, saying they were akin to "putting the fox in charge of henhouse security."

Donald A. Danner told editors and reporters of The Washington Times on Thursday that insurance companies, pharmaceutical firms, doctors and hospitals "clearly have been a major part of the problem, and they have been slow to come to the table to fix it."

At the same time, Mr. Danner's group, which was instrumental in killing President Clinton's health care plan in the early 1990s, has changed its view of the problem and is now a strong advocate for change. He said health-insurance markets are "fundamentally broken" and added, "The status quo is no longer sustainable."

Small businesses can no longer cope with annual cost increases and fewer choices, he said. "The starting point must be cost, cost, cost," he said. "If legislators don't address cost, whatever else they do is not sustainable."

Health care reform will be a major legislative goal throughout the spring and summer. President Obama has made it a priority in his budget, and the Democrat-controlled Congress is committed to act on it this year.

A key issue once again will be whether the plan that emerges includes an employer mandate to provide insurance to workers.

"We strongly oppose an employer mandate and will continue to oppose it," the NFIB chief said. "It makes no sense to mandate something small businesses cannot afford. They will lay people off. It is a job killer."

He did say that an employer mandate that exempts small businesses is "certainly a possibility" that NFIB could accept.

He also said NFIB would be open to limiting the amount of employer-provided health care benefits that could be excluded from income taxes.

Although Mr. Danner opposes a government-run health care system similar to Canada's, he said he supports Mr. Obama's goals that health care overhaul in this country should provide more choice, more competition and lower costs.

On the energy front, Mr. Danner said the NFIB has taken no position yet on a bill working its way through the House Energy and Commerce Committee.

"If it looks like the result is an enormous energy tax, then we would certainly oppose it," he said.

In states where coal-fired power plants provide 90 percent of the electricity, a huge cap-and-trade carbon tax could raise electricity costs for small businesses by 40 percent. "That's a deal-breaker for small businesses," Mr. Danner said.

Mr. Danner said his members are "very concerned about the mid- and long-term impact of [this year's] $1.8 trillion budget deficit and $1.25 trillion for next year. In the category of non-sustainable, that's non-sustainable." He said his association was worried about the budget deficit's effect on interest rates, inflation, tax levels and the debt legacy to future generations.

Noting that small businesses account for half of the economy and create a disproportionately large share of new jobs, he expressed "significant disapproval" that the president's $787 billion stimulus plan targeted "very little" at small businesses. Small businesses enthusiastically supported the idea of a payroll-tax holiday, the impact of which would have been immediate and significant, he said.

On the taxpayer bailout of Chrysler and General Motors, Mr. Danner said his members "are concerned about small businesses being asked to pay for gold-plated benefits that they cannot afford for themselves and their workers." Further taxpayer support for the auto companies should be contingent on something being done to reduce those benefits, he said.