Small businesses are a significant source of job growth in the United States – in 2006, firms with fewer than 20 employees accounted for approximately 18 percent of private sector jobs, but nearly 25 percent of employment growth from 1992 to 2005. Unfortunately, small businesses suffer more from our broken health care system than their larger counterparts. A few facts:

– Small businesses can pay up to 18 percent more per worker than large firms for the same health insurance policy.

– Only 49 percent of firms with three to nine workers and 78 percent of firms with 10 to 24 workers offered any type of health insurance to their employees, compared to 99 percent of firms with more than 200 workers.

– From 2002 to 2008, the percentage of firms with three to nine employees that offer health insurance to their workers declined from 58 to 49 percent.

President Obama talked about the impact of reform on small businesses this week -- watch it below. We also did a post on the topic earlier this month.

The fact is, our broken health care system is hitting small business harder than anyone else.

- Nearly one third of America’s uninsured – 13 million people – are employees of firms with less than
100 workers.

- Health insurance premiums for single workers rose 74 percent for small businesses from 2001 to 2008.

- More than one third of small businesses have reduced benefits in recent years and since the early 1990s, about a third of small businesses have dropped coverage for their employees altogether.

- Without reform,small businesses will pay nearly $2.4 trillion over the next 10 years in health care costs and lose 178,000 jobs by 2018.

High health care costs are making it impossible for many small businesses to provide insurance to their employees and turn a profit. National Small Business Association President Todd McCracken said, “Health care reform can not wait another year.” And health care reform topped the list of NSBA priorities when the membership recently voted on what issues they wanted Congress and the President to address.

Despite what the opposition would have people believe, President Obama’s plan to reform health care will make health insurance affordable for small businesses and their employees, helping the small business community by:

- Making tax credits available to for small business to provide health insurance. Tax credits will be based on their size, workers’ wages, and how much they contribute toward premiums. According to recent analysis by the Tax Policy Center, about 96% of small business would not be faced with a surcharge.

- Lowering administrative costs. Small businesses pay three times the administrative costs of large businesses for health insurance. Health reform will create a health insurance exchange that will significantly reduce administrative costs by reforming the health insurance market, enabling small businesses to easily and simply compare prices and health plans, and decide which option is right for their workers.

- Freeing up capital to invest in growth. Forty percent of small businesses say that health care costs have had a negative impact on other parts of their business. By lowering health care costs through more efficient care, more of our nation’s dollars can go towards investments in our economy, enabling businesses to thrive.

- Investing in preventative care. Chronic disease costs $1 trillion in lost productivity each year, and small businesses don’t have reserve of workers they can rely on when someone calls in sick. Health reform will require insurance plans to provide free preventive services and create a system that manages illness and disease instead of just treating it after people get sick. Healthy employees are productive employees -- increasing our economy’s output by up to $130 billion according to the Institute of Medicine.

- Sharing responsibility with big businesses. Reform would require larger businesses to provide insurance to their employees, or pay a fee to the government. Small businesses would be exempt from that requirement.

By some estimates, health care reform could save small businesses as much as $855 billion over then next 10 years and prevent the loss of 128,000 jobs.

No business owner wants to choose between cutting benefits, dropping coverage and laying off workers – they shouldn’t have to decide between being profitable or taking care of their employees. Bottom line: health care reform that lowers costs, guarantees choice (including the choice of a public option) and expands access to all Americans is good for small businesses.

UPDATE: This afternoon the DNC hosted a conference call about the importance of health care reform to small businesses with Congresswoman Jan Schakowsky (IL-9), Congressman Frank Pallone (NJ-6), Kristine Reger, the wife of a small business owner in Wisconsin, and Joan Lomask, the owner of a small business in North Carolina. Here’s the audio from the call

• Nearly one in five of the uninsured – 8.5 million people – live in rural areas.


• Rural residents pay on average for 40% of their health care costs out of their own pocket, compared with the urban share of one-third.


• In a multi-state survey, one in five insured farmers had medical debt

Rebecca Adelman of the Department of Health and Human Services noted;

The meeting participants gathered at the White House included farmers, ranchers, teachers, and fishermen, who spoke of their shared difficulty affording health care. Dr. Wayne Meyers, a pediatrician and organic farmer in rural Maine, summed it up by saying: "For most rural people, cost is the bottom line…health care costs are eating us alive." Many participants expressed frustration that farmers who spend their lives growing healthy food for the nation are struggling to afford medical care they need to live healthy lives. Jon Bailey, Director of the Rural Research and Analysis Program, spoke to the difficulty many small businesses are having in rural areas as they attempt to remain profitable while paying huge sums for health care coverage. Bailey said, "If we don’t solve the health care issues of small businesses, and farmers and ranchers and fishermen in rural areas, we won’t have an entrepreneurial economy, and that means we won’t have much of an economy in rural America."

While these listening events have been taking place the top two leaders on this reform effort in the Senate, Sen. Kennedy and Sen. Baucus have told the President they intend to have a health care reform bill ready in June.

The U.S. economy lost 524,000 jobs in December, closing out the worst year for job losses since World War II, the Labor Department said Friday.

Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months, according to a survey of work places. It's the biggest job loss in any calendar year since 1945, when 2.75 million jobs were lost as the wartime economy was demobilized.

The 1.5 million jobs lost in the fourth quarter were the most in any three-month period since 1945.
As a percentage of employment, job losses in 2008 totaled 1.8%, the worst since 1982 and the third largest since the war.

The numbers were released as Congresswoman Hilda Solis (D-California) began her Senate confirmation hearings as the next Secretary of Labor for President-elect Barack Obama's incoming administration.

President-elect Barack Obama's pick to become the top U.S. labor official said on Friday her priorities would be to boost job training and search assistance to fight a deepening U.S. recession.

Democratic Rep. Hilda Solis, tapped by Obama to become labor secretary, also told her Senate confirmation hearing she would fight job discrimination and ensure employees "get the pay they have earned working in safe, healthy and fair workplaces."

Wall Street joined a “selloff around the world” today, with the Dow Jones dropping more than 400 points and falling to below 10,000 for the first time in four years. As the AP reports, the “markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.”

Think about it -- while untold thousands of Americans lose their life savings or retirement funds because of the greed of Wall Street, John McCain wants to "turn the page" on the financial crisis.

Then again, we've seen this before from John McCain. He knows a thing or two about thousands of Americans losing their life savings.

It turns out, they won't get them.

John McCain, whose support for privatization of Social Security is well known, refuses to provide the details of his plan because it would, according to one senior adviser, "politicize the debate."

Consider McCain campaign senior adviser Taylor Griffin’s description of his candidate's plan for fixing Social Security:

"The history of the Social Security debate has taught that too many specifics, especially during a presidential campaign, has polarized the debate," he said of the program that McCain called "an absolute disgrace [that's] got to be fixed."

Will he contrast his plan to that of his opponent? "Sen. McCain believes this is so important that we do not politicize this debate during an election season."

This explains why John McCain's "Jobs for America" economic plan is only thirteen pages and economists widely criticized as thin on the details. It is not that John McCain wants to hide his massive tax cuts for the rich, and massive corporate tax breaks, he just does not want to politicize the debate.

And really, who needs to discuss policy details in a presidential campaign? John McCain doesn't want to cause a distraction from talking about Britney Spears and Paris Hilton -- you know, the things that matter.

The nation's unemployment rate climbed to a four-year high of 5.7 percent in July as employers cut 51,000 jobs, dashing the hopes of an influx of young people looking for summer work.

The numbers for July continued the troubling effects of Bush/McCain style economic policies.

July's reductions marked the seventh straight month where employers eliminated jobs. So far, this year, the economy has lost a total of 463,00 jobs.

Young people are heading back to the classroom in a few weeks, but many of them will be doing so a little lighter in the wallet than in the last sixteen years, as the economic downturn kept many of them out of work this summer.

This year, however, fewer of them were able to find work, the government said. The unemployment rate for teenagers jumped to 20.3 percent, the highest since late 1992.

Like George Bush's economy? Hire John McCain. He's too busy talking about Britney Spears and Paris Hilton.

Meanwhile, Senator Barack Obama is talking about what's on the minds of Americans: how we can turn our economy around.

Gramm told the Washington Times an interview published last week that the economy has "never been more dominant" and said we have become a "nation of whiners" constantly "whining and complaining." The McCain campaign may be quick to throw a top economic adviser under the bus but that does not hide the fact that John McCain offers four more years of George W. Bush on the economy.

We released this web video highlighting the shared belief of John McCain and Phil Gramm that these troubling economic times are "psychological" and a figment of your imagination.

MCCAIN'S HEALTH CARE PLAN WOULD OVERBURDEN SMALL BUSINESSES

Fact Check: McCain's Plan Would Result In Employers, Particularly Small Businesses, Dropping Coverage. According to Factcheck.org, "McCain's plan to tax workers on the value of their employer-provided health care plans and provide tax credits would encourage some employers, mainly small businesses, to drop health benefits, say experts, and the proposal could eventually eliminate job-based insurance altogether." Director of the health research and education program at the Employee Benefit Research Institute Paul Fronstin "says a tax credit plan like McCain's likely would mean the end of employer-sponsored health care." [Factcheck.org, "McCain's $5,000 Promise, 5/1/2008, http://www.factcheck.org/mccains_5000_promise.html ]

McCain Offers Little On Specifics On Affordable Health Care For Small Businesses. When asked about a "support system for small business" to keep workers comp down, and a more affordable health care program for small business and their employees, McCain discussed how expensive "free" health care from the federal government will be, his "$5,000 refundable tax credit," and his "outcome-based treatment" plan. [CNN Live Feed (Santa Ana, CA), 3/25/2008]

McCain's Plan Would "Weaken Small Business Protections." According to the blog Think Progress, McCain's health care plan would "weaken small business protections by enabling businesses to simply market insurance policies around the country from states with weak protections." [Thinkprogress.org, 4/25/2008, http://thinkprogress.org/wonkroom/2008/04/25/mccain-business-health-care/#more-736 ]

2000: McCain Opposed Tax Credits For Small Businesses Who Offer Insurance. In 2000, McCain voted against allowing businesses with up to 25 employees to receive a tax credit for employee health insurance for low-income workers. [Senate Vote #205, 7/17/00]

NFIB Economist Says Economy Slowing. "Recession fears are spreading and the economy is showing definite signs of slowing, even on Main Street," according NFIB Chief Economist William Dunkelberg." [NFIB Small Business Economic Trends, May 2008]

After casting himself as a "Maverick" in 2000, the new John McCain is walking in lockstep with President Bush, pandering to the right wing of the Republican Party, and embracing the ideology he once denounced. On the campaign trail McCain has callously abandoned many of his previously held positions, even contradicted himself, in a blatant attempt to remake himself into a candidate Republicans can accept in 2008. So just who is the real John McCain? The Democratic National Committee will present a daily fact aimed at exposing the man behind the myth.

The Republican Party, known since the late 19th century as the party of business, is losing its lock on that title. [...] Some business leaders are drifting away from the party because of the war in Iraq, the growing federal debt and a conservative social agenda they don't share. In manufacturing sectors such as the auto industry, some Republicans want direct government help with soaring health-care costs, which Republicans in Washington have been reluctant to provide. And some business people want more government action on global warming, arguing that a bolder plan is not only inevitable, but could spur new industries.

So it's important to note that not only might they be losing those constituencies, but they're losing them because those constituencies agree with key progressive issues.

From Government Executive:

According to SBA's report on fiscal 2006 contracting, a total of $77.7 billion -- or 22.8 percent of all federal contract dollars -- went to small businesses. This was just short of the governmentwide goal of 23 percent. A bill that passed the House in May would increase that statutory goal to 30 percent. [...] Just seven of 24 agencies met their small business contracting performance standards: the Agriculture, Energy, Homeland Security, Housing and Urban Development, Transportation and Veterans Affairs departments, and the SBA itself.

But the bulk of agencies fell well short of these goals. For example, the Defense Department -- far and away the government's largest procurer of goods and services -- awarded 21.8 percent of its contracts to small businesses and met only the small disadvantaged business goal.

It's important to make sure small businesses aren't shut out of the process. Thankfully, there are new laws passed by the Congress to toughen standards.

At an April 19 hearing on the bill, Rep. Nydia Velazquez, D-N.Y., said the new goal was needed because the administration has failed to meet the current 23 percent goal for the last five years. This costs small businesses $4.5 billion in business annually, said Velazquez, who chairs the House Small Business Committee.

According to Washington Technology (WT), President Bush has not said he will veto the bill, even though Bush administration officials are opposed to stronger goals. At the same time, WT also reports, some members of Congress want to increase it even further than the bill's current 25-percent standard.

It's important to strengthen small businesses, and the Democratic Party continues to fight on their behalf.

The new Congress will also try to slash regulations on small companies, a pet issue of Velázquez, Nancy Pelosi and John Kerry, the new chair of the Senate Committee on Small Business and Entrepreneurship. Shortly after taking her gavel, Velázquez introduced the Small Business Tax Fairness and Simplification Act of 2007, designed to reduce paperwork for small tax filers. [...] Regarding health care, several congressional experts believe the focus will shift from health savings accounts to health-care tax credits. Kerry introduced legislation giving small businesses a tax credit to pay for the health costs of their employees earning less than $50,000.

The new chair of the House Small Business Committee, Nydia Velázquez, also might help the SBA's ability to respond to disasters, such as Hurricane Katrina.

And this is just the beginning. On issue after issue, Democrats are on the side of small businesses.

The report by the Government Accountability Office focused on small Gulf Coast businesses that lost opportunities as limited-bid contracts were awarded to politically connected companies after the storm hit.

Large contractors routinely did not file reports explaining their efforts to find subcontractors, as required under federal rules, according to investigators. At other times, large companies provided figures that complied with the rules but were misleading as to how much work they were sharing.
[...]
For many weeks after the hurricane, small, minority companies received 1.5 percent of the total work - less than one-third of the 5 percent normally required - because they were not allowed to bid for many of the emergency contracts.

In the wake of a national tragedy such as Hurricane Katrina, it is a shame that contracts were doled out according to who was the most "politically connected," rather than who can do the best job for these families. It's way past time to support small businesses and give them a chance to join the effort to rebuild New Orleans.