Mr. William Shear
Director, Financial Markets and Community Investment
U.S. Government Accountability Office
Mr. Hannibal “Mike” Ware
Acting Inspector General
U.S. Small Business Administration
Ms. Shirley Bailey
Co-Owner-Executive Vice President and Chief Operating Officer
GCC Technologies, LLC
*Testifying on behalf of the HUBZone Contractors National Council
Ms. Mansooreh Mollaghasemi, Ph.D.
President & CEO
Atria Technologies LLC
WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) made the following statement after the U.S. Senate confirmed Scott Pruitt as the new administrator of the Environmental Protection Agency (EPA).
“From WOTUS to the CO2 rules, our Committee has been spotlighting the EPA's regulatory rampage against American small businesses for years,” said Chairman Chabot. “I am confident that Mr. Pruitt is the right man to rein in this out-of-control agency and provide small businesses with much-needed relief from their costly, burdensome regulations.”Read More
WASHINGTON – Economic policy experts told a Small Business subcommittee today that overregulation is harming the health of the U.S. small business economy and stunting economic growth nationwide. Today’s hearing of the Small Business Subcommittee on Economic Growth, Tax and Capital Access comes as House Republicans are delivering on their commitment to provide regulatory relief for America’s 28 million small businesses as promised in A Better Way to Grow our Economy.
“The economy grew at an anemic rate of 1.6 percent in 2016, and 1.5 percent over the last 8 years. This rate is half of the historical average,” said Subcommittee Chairman Dave Brat (R-VA) in his opening statement. "Although it is important to label the problem, Congress is actively working to implement solutions. We are starting the process to repeal and replace the Affordable Care Act. We are passing regulatory reform bills such as the Regulatory Accountability Act of 2017 and utilizing the Congressional Review Act to repeal burdensome Obama-era rules.”
“The Administration is also taking actions, such as their “two-out, one-in” regulatory approach to help cut red tape. The unified Republican government is committed to helping the nation’s economy escape slow growth, and we are backing up our words with action,” observed Rep. Brat, who was chairing his first hearing as the Subcommittee’s new Chairman.
Creating More Certainty for Small Businesses
“A number of the initiatives of the new Congress will be helpful in attaining this goal of creating more certainty about the business environment,” said Stan Veuger, a Resident Scholar at the American Enterprise Institute (AEI).
Veuger pointed to two key pieces of legislation that were authored by Small Business Committee Chairman Steve Chabot (R-OH) as examples of the type of regulatory relief policies that would help entrepreneurs. Both measures passed the House last month.
“The Small Business Regulatory Flexibility Improvements Act, for example, passed as a part of H.R. 5, the Regulatory Accountability Act, requires more careful consideration before new rules and regulations, demands that their impact on small business be considered more specifically, and mandates periodic of rules that significantly impact substantial numbers of small businesses,” Veuger testified.
“The HALOS Act, which also passed the House last month, is helpful on the other side of the ledger: by making it easier for startup firms to connect with angel investors and gain access to capital, the negative impact from heightened policy uncertainty will be somewhat dampened,” Veuger added.
The “Entrepreneurship Deficit”
“America is suffering from an Entrepreneurship Deficit,” stated Victor Hwang, the Vice President of Entrepreneurship at the Ewing Marion Kauffman Foundation. “It’s slowly but surely eroding our quality of life and our national competitiveness. I’ve personally experienced the challenges of starting and growing new businesses. My parents were entrepreneurs. For most of the past decade, I’ve been an entrepreneur and investor in Silicon Valley. And over the past year, I’ve gotten a “big picture” perspective as the head of entrepreneurship of the Kauffman Foundation, an institution that funds research on entrepreneurship, educates policymakers, and supports entrepreneurial success.”
“So what is causing this Entrepreneurship Deficit? Based on our work, we believe the deficit comes from a long-term decline in what economists call business dynamism, the pace at which firms start and grow. As a case in point, Americans are starting new businesses at roughly half the rate they were a generation ago,” Hwang explained.
“When barriers hinder Americans from pursuing their entrepreneurial dreams, our whole nation suffers. That’s no longer conjecture; there is accumulating research evidence for it. Together, let’s commit to lowering barriers to entrepreneurship so all Americans, regardless who they are or where they’re from, can turn their ideas into reality,” Hwang added.
Hwang’s testimony came as the Kauffman Foundation published its annual State of Entrepreneurship Report for 2017, titled “Zero Barriers: Three Mega Trends Shaping the Future of Entrepreneurship.”
Small Biz Still Struggling to Bounce Back
“Over the past 10 years, small-business owners have struggled to bounce back from the great recession,” said Holly Wade, the Director of Research and Policy Analysis for the National Federation of Independent Business (NFIB) Research Foundation. “The economic recovery has been painfully slow for many, at first due to poor sales, but quickly overtaken by issues related to taxes, regulations and the cost of health insurance.”
“NFIB hears from small-business owners year round about the various challenges they face operating their business,” Wade added. “The primary step in developing pro-growth policies is to first, ‘do no harm,’ especially when it comes to artificially increasing the cost of doing business whether in the form of higher taxes, health insurance costs or more regulations, to name a few. Small business owners are in a great position to invest in and grow their business given the right set of policies. Most attention must be paid to the benefits of regulation that use up valuable human and financial capital.”
Wade’s testimony comes as NFIB published a brand new survey showing that half of all small business owners say regulations are a “serious” problem for them, creating burdensome costs and unnecessary confusion. You can read the read the full report on NFIB’s Small Business Survey of Regulations HERE.Read More
WASHINGTON – Small business owners told the House Small Business Committee today that provisions in the current tax code which penalize saving and risk-taking represent the biggest barrier to American entrepreneurship. The hearing comes as lawmakers work towards a comprehensive tax reform package using the House GOP’s Better Way for Tax Reform as a blueprint.
“In the coming weeks and months, Congress will have a once-in-a-generation opportunity to pass comprehensive tax reform, the likes of which we have not seen since Ronald Reagan’s historic tax reforms in the 1980s,” House Small Business Committee Chairman Steve Chabot (R-OH) said.
“Entrepreneurs simply aren’t taking the kinds of risks they once did and this will have serious economic consequences, both in the short-term and in the long-term,” explained Chairman Chabot. “America’s entrepreneurs are crying out for tax relief, and we are listening to them as we take action. They want a tax code that is simpler, fairer and flatter so they can start and grow their businesses and turn their dreams into reality.”
“The bottom line is that our current tax system is working against entrepreneurs when it should be working for them. We have to do better. And fortunately, with the Better Way agenda as our roadmap, we will do better,” observed Chabot.
One Ohio Small Businessman Shares His Story
“My company is a Subchapter S firm,” explained Tim Reynolds, the President of Tribute Inc., a small business with 38 employees based in Hudson, OH. “As such, the income of my company flows to my personal tax return. I have an MBA from the University of Michigan, run a company that develops and sells accounting software and have been in business for more than 20 years. Yet, I would view it as taking an irresponsible risk to attempt to do my own tax returns. The Code is so complicated that I feel certain I would inadvertently run afoul of the law. So I have to pay an accounting firm to do these taxes. No doubt the CEO of a Fortune 500 company feels the same way. But as a small business person, the cost of compliance is disproportionately large.”
Tax Code Costs Him “More than $14,000 and 40 Hours A Year”
“The majority of small businesses, 68 percent, spend more than $1,000 per year on the administration alone on federal taxes,” said Reynolds, who testified on behalf of the National Small Business Association (NSBA). “More than half say that federal taxes have a significant to moderate impact on the day-to-day operation of their business. Just imagine the collective business and job growth that could be done absent that burden. My company pays our accountants more than $14,000 each year to prepare our taxes. In addition, we spend about 40 hours a year preparing various forms and making various estimated payments required to comply with tax law.”
“Weighing in at more than 70,000 pages, the Tax Code punishes work, investment, risk-taking and entrepreneurship. The Tax Code is unfair to small businesses, biased against savings and investment, and impossibly complex. A tax system dedicated to investment, savings and small business growth must be put in its place,” Reynolds added.
Experts Agree: Tax Code Hindering Entrepreneurship
“The U.S. tax code tends to impose higher burdens on businesses that run losses for many years, businesses that are risky investments, and businesses undergoing rapid expansion – all of which are typical characteristics of entrepreneurial ventures,” testified Kyle Pomerleau, the Director of Federal Projects for the non-partisan Tax Foundation. “Lawmakers interested in removing these barriers to entrepreneurship should consider ways to mitigate these three distortions in the U.S. tax code: the limited deductibility of business net operating losses, the limited deductibility of capital losses, and lengthy depreciation schedules.”
David Burton, a Senior Fellow for Economic Policy at the Heritage Foundation’s Institute for Economic Freedom and Opportunity, identified what he sees as the primary impediments to economic growth in the tax code.
“The current U.S. tax system has a very substantial negative impact on the economy,” Burton explained in his testimony. “It has high marginal tax rates that reduce the incentive to work, save and invest. The U.S., for example, has the highest corporate tax rate in the industrialized world. It substantially raises the cost of capital by double, triple or even quadruple taxing savings and investment.”
“It places U.S. businesses and at a competitive disadvantage in international markets. It is riddled with special tax preferences. And it imposes large compliance costs on U.S. businesses, which has a disproportionately negative impact on small firms,” Burton stated.Read More
WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) made the following statement after the U.S. Senate confirmed Linda McMahon as the new Administrator of the U.S. Small Business Administration (SBA) by a vote of 81 to 19.
“I congratulate Linda and her family on her well-deserved confirmation as SBA Administrator,” Chairman Chabot said. “Throughout the confirmation process, she demonstrated why she will be a dynamic and effective leader for the SBA. I have every confidence that Administrator McMahon will be able to work with Congress on small business issues ranging from disaster assistance to veterans entrepreneurship to strengthening the SBA’s loan programs. Our Committee cannot wait to begin working with Linda and her team at SBA on behalf of America’s 28 million small businesses.”Read More
WASHINGTON - House Small Business Committee Chairman Steve Chabot (R-Ohio) made the following statement after the U.S. Senate confirmed Steven Mnuchin as the 77th Secretary of the Treasury
“I congratulate Mr. Mnuchin on his confirmation as our nation’s new Treasury Secretary and look forward to working with him to open new doors for America’s 28 million small businesses,” said Chairman Chabot. “Mr. Mnuchin’s strong background in finance gives him a keen understanding of and appreciation for the struggles small businesses face in obtaining access to capital. Secretary Mnuchin will be a key ally as Congress works to provide regulatory relief for small businesses and to address the crisis Dodd-Frank has caused for our small community banks and credit unions.”Read More
By Rep. Steve Chabot
That’s how Tom Secor, a small businessman from Ohio,respondedwhen the top Democrat on the House Small Business Committee insisted he gotmorehealth insurance options under ObamaCareat a hearing last week.
“We had one carrier that was willing to offer insurance, that’s what our insurance agent told us,” he explained. “Fewer and fewer small businesses, especially those with fewer than 50 employees, offer health insurance as an employee benefit. This is not because they do not want to, or cannot find an insurance carrier in their market; it is because they simply cannot afford to offer a plan.”
As Chairman of the Small Business Committee, I have heard from countless Americans like Tom over the last seven years who either own or work for an American small businesses.
They were promised ObamaCarewould make it easier for them to access quality, affordable health insurance. In reality, it has made it more difficult.
The previous administration promised them that premiums would decrease by $2,500 per year. Instead, average premiums in job-based coverage have increased by $3,775.
President Obama famously promised: “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”Nothing could be further from the truth.
ObamaCare– or theUnaffordable Care Act as it should have been titled – has been an unmitigated disaster for our nation’s 28 million small businesses.
Most Americans get their health insurance through their employer. Half the private sector workforce goes to work every day at a small business. That’s why small businesses, and the people who depend upon them, have an enormous stake in the repeal and replacement of ObamaCare. With our Committee’s hearing last week, I wanted to assure them that they will no longer be an afterthought in health care policy.
In 2016, the National Federation of Independent Businesses, or NFIB, published asurveywhich found that the cost of health insurance continues as the number one problem small businesses face.
NFIB members aren’t the only ones concerned. In late 2015, the National Small Business Association, or NSBA, released asurveythat found that while the majority of employers think offering health insurance is very important to recruiting and retaining good employees, just 41 % of firms with fewer than five employees offered health benefits, down from 46 % in 2014. Overall, the NSBA survey found that 65 % of small firms reported offering health insurance in 2015, down from 70 % in 2014.
Surveys like these track with what we have been hearing from our constituents back home in our districts and in our hearing room.
Most employers want to do right by their employees, and try to provide health insurance for them, not just as a recruitment and retention tool, but also out of a sense of duty to people who are like family to them.
Over the years, Small Business Committee witnesses have made the case for repeal and replacement using their own experiences far better than any politician could. That’s why we have compiled theirstorieson our Committee’s website.
It’s no coincidence that our hearing came days before one of the most compassionate and dedicated medical professionals I know, Dr. Tom Price, was confirmed as our new Secretary of Health and Human Services.
Secretary Price understands as well as anyone how bad a deal ObamaCarehas been for America’s small businesses. Our Committee looks forward to working with him as we move forward with repeal and replacement. Anyone who has a friend, family member or constituent who works for a small business should be ready to roll up their sleeves and get to work.
Last year, House Republicans put forward a series of solutions-oriented policy plans including "A Better Way to Fix Health Care" and "A Better Way to Grow our Economy." Unlike the authors of ObamaCare , we will be precise, methodical and think before we act on health care legislation.
Our small businesses deserve no less.
To read the full article click HERE.
Republican Steve Chabot represents Ohio's 1st congressional district in the U.S. House of Representatives where he serves as chairman of the Small Business Committee.
WASHINGTON - House Small Business Committee Chairman Steve Chabot (R-Ohio) made the following statement after the U.S. Senate confirmed Congressman Tom Price as the 23rd Secretary of Health and Human Services.
“Since Dr. Price first arrived in Congress, he has been a dear friend, indispensable colleague and one of the leading conservative voices on health care policy,” said Chairman Chabot. “As a physician and as a legislator, Tom has always put the care and wellness of patients first and foremost in everything he does. Secretary Price also understands that Obamacare has been an unmitigated disaster for America’s 28 million small businesses. Our Committee looks forward to working with him as we repeal and replace this unworkable, unaffordable law so we can provide the American people with quality, affordable health insurance.”
The Small Business Committee held a hearing earlier this week on "Reimagining the Health Care Marketplace for America’s Small Businesses."
Improving the Health Care Marketplace for Small Businesses
House GOP’s “Better Way” Health Care Plan Discussed at SBC Hearing
WASHINGTON – Small business owners and experts told Members of the House Small Business Committee today that Obamacare has made the health insurance marketplace worse for the owners and employees of America’s 28 million small businesses. In the Committee’s first hearing of the 115th Congress, witnesses explained how replacement proposals crafted by House Republicans could improve access to quality, affordable health care for these small businesses.
“Doing nothing is not an option because the current system is in a death spiral,” said House Small Business Committee Chairman Chabot (R-Ohio). “It is important to remember that the damage done by Obamacare was not limited to the new problems it created for the health care marketplace. It also exacerbated and made worse long-standing problems in that marketplace.”
“We must move forward to eliminate the destructive policies of the past and enact real, patient-centered reforms that lower costs, improve portability, and ensure coverage for the millions of Americans who are struggling to find affordable and reliable health insurance,” Chairman Chabot added.
“While we have a badly damaged system right now, I believe there is a light at the end of the tunnel. We have a real opportunity to enact positive change, and we’re going to do it the right way, a better way,” said Chabot.
Small Businesses Make The Case for Repeal and Replace
“Fewer and fewer small businesses, especially those with fewer than 50 employees, offer health insurance as an employee benefit. This is not because they do not want to, or cannot find an insurance carrier in their market; it is because they simply cannot afford to offer a plan,” testified Mr. Tom Secor, the president of Durable Corporation, a small business based in Norwalk, Ohio, who appeared on behalf of the National Small Business Association.
When Committee Democrats pressed him by insisting that his business had more health insurance options under the ACA, Mr. Secor countered: “Actually, we got less. We had one carrier that was willing to offer insurance, that’s what our insurance agent told us. I’m in a rural section of Ohio and I think that’s part of the difficulty. In the state of Ohio, we have 88 counties. We have what I’ll call three major cities – Cleveland, Columbus, Cincinnati… but most of Ohio is rural so we don’t the kind of coverage. If you’re in Cleveland, Columbus, Cincinnati, you have options. We do not.”
“It is important to understand that our members view their health insurance purchase as a business decision and unfortunately the self-employed and micro-business owners currently do not receive the same tax incentive as other businesses," testified Mr. Keith Hall, President and Chief Executive Officer of the National Association for the Self Employed. “Therefore, the self-employed business owner is caught in the middle because they don’t typically qualify for subsidies, while also not receiving the same favorable tax treatment as other businesses.”
“Today we are focused on solutions and we certainly appreciate the opportunity to provide our commentary on the current climate and how legislative action could both stabilize and foster a robust health care system that is rooted in three principles: quality, accessibility, and affordability,” Hall noted.
Speaking about a popular provision of the ACA which deals with coverage for pre-existing conditions, Hall added, “we support the language included in Speaker Ryan’s, “A Better Way: Our Vision for a Confident America,” which is one of many proposals that continues to prohibit a pre-existing conditions exclusion.
Obamacare’s Dire Consequences for Small Businesses
“These consequences led to a significant 25 percent reduction in the offer rate for small businesses between 2010 and 2015," explained Mr. Kevin Kuhlman, Director of Government Relations for the National Federation of Independent Business. “For the first time, fewer than 30 percent of businesses with under 50 employees offered health insurance to their employees in 2015. Small business was clearly an afterthought during ACA consideration and implementation.”
“As Congress considers a partial repeal of the ACA through reconciliation and a repair of the health insurance markets, please prioritize affordability, flexibility, and predictability for small businesses. Health reform that works for small business will work for the rest of the country," Kuhlman added.
“I think there are a lot of plans out there. I’ve read the Better Way plan and there are many things in there, we agree with,” Kuhlman told lawmakers.
The House Small Business Committee has heard testimony from numerous small business employees and owners over the years about how Obamacare has cost jobs and opportunities in communities across the United States. See their stories HERE.
House Republicans crafted several, solutions-oriented policy plans last year including "A Better Way to Fix Health Care" and "A Better Way to Grow our Economy."
WASHINGTON - House Small Business Committee Chairman Steve Chabot (R-Ohio) made the following statement about President Donald J. Trump’s executive actions on financial regulations.
“President Trump’s executive actions set the stage for rolling back some of the most harmful parts of Dodd-Frank that have hit small businesses worst and first,” said Chairman Chabot. “This is an important first step that will surely help as Congress works to improve access to capital for small businesses and remedy the crisis Dodd-Frank has caused for our small community banks and credit unions, particularly in rural communities across America.”Throughout the 114th Congress, members of the small business community testified before the House Small Business Committee and shared their personal accounts of how Dodd-Frank banking regulations were preventing them from getting the credit and capital they needed to start and grow their businesses. In his remarks at the American Enterprise Institute last month, Chairman Chabot said improving access to capital for small business will continue to be a top priority for the Committee in the 115th Congress. Read More
Click Image to View Chairman Chabot's Remarks on the House Floor
WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-Ohio) took to the House floor today in support of H.J. Res. 37, a measure to undo the Obama administration’s controversial “blacklisting” rule which barred many small businesses from competing for federal contracts.
“The blacklisting rule will force innocent small businesses to settle unproven claims, disclose commercially sensitive information to their competitors, and report information the federal government already has,” Chairman Chabot explained. “Ultimately, this rule will result in small businesses being blacklisted from participating in federal contracting based on accusations where they may ultimately be found innocent."
H.J. Res 37 passed the House this evening by a vote of 236 to 187.