Capitol Comment: Government-Run Health Care Hurts Jobs and Economy

U.S. Sen. Kay Bailey Hutchison Dec. 17, 2009, 6:19am

Since President Obama took office on January 20, more than 3.5 million Americans � including 300,000 Texans - have lost their jobs, the federal budget has tripled to $1.4 trillion, and the federal debt as a portion of the U.S. economy has risen to its highest level since World War II. In light of this unprecedented economic uncertainty, many Texans are growing increasingly wary about the President's agenda, including his $2.5 trillion health care plan.

Despite the massive debt this government-run health care plan will bring, Democratic leaders in both houses of Congress are rushing to pass it. Their plan will increase taxes by $494 billion. Starting on January 1, 2014, most employers that do not provide coverage for their full time employees or do not provide coverage that is affordable will be required to pay a penalty. When the penalty takes effect, the price could be as high as $3,000 per employee.

Americans are concerned about jobs and the economy. National unemployment is at 10.2 percent and the Texas unemployment rate is the highest level in over two decades. The Democrats' cascade of new taxes and regulations will have a devastating effect on small businesses that create 70 percent of new jobs in our country. Adding more burdens on small businesses with penalties and sky rocketing premiums at this time will make it even harder for small businesses to hire new employees.

The Democrats will point out that there is a sliding scale tax credit to small business employers with fewer than 25 employees and average annual wages of less than $40,000 and that purchase health insurance for their employees. However, very few small business owners will qualify for that credit, and even those who do qualify will not receive enough money to absorb the costs that the new employer mandate will impose. And, the credit is only temporary, lasting a maximum of five years. Given the enormous gap between the employer mandate and the tax credit subsidy, many small business owners would rather pay a fine to Washington than actually purchase the more expensive health insurance for their employees.

In order to improve this situation, I am proposing an amendment to the Senate health care bill that will expand the tax credit to small businesses that have employees who earn up to an average of $50,000, and that will increase the number of years that the credit is available. This will enable more small businesses to escape the growing costs imposed upon them by Washington and keep enough of their money to hire new workers and revitalize our economy.

While I will work to improve the Democrat health care plan as much as possible by proposing amendments and working to pass them, ultimately I could not vote for any bill that hurts our economy, increases the size of government, and reduces patient choice. The best thing for the American people would be to scrap the Democratic proposals that are weaving their way through Congress and start over with a bipartisan coalition charged with drafting legislation that can earn support from all sectors of the populations.

I have proposed several common-sense health care reforms that use the private sector � not Washington bureaucrats � to reduce costs and increase access for all Americans. These ideas include allowing small businesses to pool together to purchase health insurance, increasing the size of the risk pool, lowering premiums, and legalizing the purchase of health insurance across state lines. I have championed legislation that will provide a tax credit worth $2,000 per individual and $5,000 per family for the purchase of health insurance every year. Medical malpractice reform that curbs lawsuit abuse would lower costs by over $50 billion annually, which could be passed on in the form of lower premiums or to bolster health care provider reimbursements in Medicare.

I'm confident that all of these ideas � and more - could earn bipartisan support if given a chance. But that would require a new philosophical commitment to free enterprise and individual rights. The current Democratic proposals � which increase the size of government and the magnitude of federal debt at the worst possible time for our economy � are exactly the wrong approach.

We need a fresh start. And we need it now.

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