The Middle Class

Floor Speech

Mr. RUBIO. Mr. President, even as I speak at this very moment--or maybe he has wrapped up--the President is in Jacksonville, FL, today. He is discussing the middle-class and how to get the middle class growing again in America, and it is a very worthy topic.

I wish the President would do less talking and more listening. If he listened to the middle class--and particularly those middle-class Americans who either work at a small business or own a small business--he would hear the No. 1 concern many of them now have is about ObamaCare.

Recently, I made the statement that I don't believe we should pass a short-term budget here that pays for ObamaCare. Since that time, I have heard the comments of some that that is an unreasonable request. I wish to outline one more reason why I think it is an unreasonable request to actually fund it. It is unreasonable because of the impact ObamaCare is having on real people--particularly those in the middle class in the United States.

I wish to focus on small businesses today because they truly are the backbone of the American economy. People here throw that term around all the time, ``the backbone of the economy.'' It truly is.

I live within a few blocks of 8th Street, the famed Calle Ocho, where literally every business is a small business, such as bakeries, sandwich shops, you name it. They are primarily run by immigrants who are here in search of a better life and the American dream. They own these small businesses. They will be impacted by the changes this law will have, and I wish to describe some of them.

Yesterday, we had a hearing in the Small Business Committee where the administration spoke first. Basically, their take on it is that ObamaCare will be good for small businesses for two reasons: One, we will set up these health exchanges small businesses can go to and offer health insurance to their employees on these exchanges.

Basically, the exchange is a one-stop shop. A company owner can go online--and there are theoretically 8 or 10 private insurers--and the owner of the business gets to pick a plan from one of those choices and their employees get insured from it. In theory that is not a bad idea. However, in a moment I will outline why that is not working out.

The second thing they brag about is the tax credit that small businesses will be able to use. I want to use the testimony--not just of them but of small businesses--to outline why, in fact, these things are not only not going to work, but ObamaCare is going to be deeply hurtful to small businesses and the middle class.

Let's talk first about the exchanges. The exchanges are not unfolding as they were planned. I asked the administration yesterday: Is it going to be ready about October 1? Are businesses going to be able to go on this exchange and find an insurance plan for their employees? They said they are sure it is going to happen. But the truth is it is not working out that way.

There are 17 States that have decided to go on to their own exchanges. All 17 of those States are behind schedule in one form or another. Maryland was one of the first States to embrace it. They asked for a delay in April because they couldn't get it going on time.

A recent report from the Government Accountability Office reported that all 17 States were behind schedule and that they were missing deadlines on 44 percent of the key things they had to do.

Here is the second problem: These exchanges only work if you have a lot of companies competing against each other, but that is not happening either. Insurers are not flooding to offer insurances on these exchanges.

Let me give an example. There are three States: Washington State, New Hampshire, and North Carolina where only one company has responded. There is no competition, and that is what is supposed to drive down the rates. In another State, not a single company responded until very recently when Humana came in to save the day and actually decided to jump on board.

Here is what the vice president of a consulting firm that specializes in this--it is called Avalere Health. Caroline Pearson is the vice president and she said:

Humana may have a difficult time building competitive networks in [Mississippi], so we could see higher than average premiums in this region.

Again, another reason to doubt that these exchanges are going to work and the impact it is going to have is terrible.

What about the tax credits? That is a great idea, right? We are giving tax credits to small businesses that they can use to buy health insurance for their employees. That is not working out either.

Let me give an example: Only 14 percent of companies that are eligible for the tax credit are using it, and I will explain why.

I have a quote from Pat Thompson, a tax partner at Piccerelli, Gilstein & Company, in Providence, and chair of the American Institute for Certified Public Accountants, who said:

The definition of an eligible business is challenging because it is not based on [the number of] employees, but on full-time equivalents. For companies with a lot of part-timers ..... that is not very transparent.

He went on to say that the way to decide whether you are qualified for this tax credit is so complicated that most small companies can't figure it out. In fact, the companies that benefit the most from the tax credit are the ones that are least likely to get it because they cannot afford to hire a professional accounting firm to figure it out for them.

Here is another one from the Birmingham Business Journal. The manager at a health care consulting group, Warren Averett, LLC, said that only 20 percent of the small businesses they deal with even qualify for the credit. He said many businesses he worked with offered less than 50 percent, and bumping their coverage to meet the requirement would have cost them more than the credit saved them.

These are serious problems with this tax credit, not to mention that the General Accounting Office has already said the credit is so small that it is just not enough to change the equation for these small businesses to use it.

What is the bottom line? The bottom line is that two of the things we are being told are going to help small businesses with ObamaCare are not going to.

One is an exchange that is relying upon there being competition among insurers. They are not signing up, folks. The other is this tax credit that is being deeply underutilized and it is so complicated and so small that most small businesses will not benefit from it.

I say all that to my colleagues because yesterday we heard from a real small business owner--someone who is the epitome of what it means to own a small business in America. His name is Larry Katz. He owns some restaurants called Dots Diner. Here is what he said. His dream was to own his own company so he cashed in his whole life insurance policy, he calculated how much credit card availability he had, and emptied his life savings. With less than $200,000, he opened his first diner. Within 12 months he had stopped sleeping. He was down to less than $10,000 in savings. He considered two options: Either mortgage his home or declare bankruptcy. That is what he faced, but he made it through, as many small businesses make it through in America. Today he owns 6 diners, 85 employees, 65 of them are full-time.

Here is what he offers those employees today: paid holidays, vacation, dental, vision, term life, and health insurance. He offers those to them right now, but because of how much ObamaCare is going to cost him, here is what he is going to have to do. He said:

I have unfortunately made the decision to quit offering coverage as soon as the employer mandate kicks in, as the penalty, while huge, is less than the costs of offering the required coverage to all of our employees.

What he is basically saying is that there are employees today in his business in Louisiana who have health insurance, who are happy with their health insurance, but because of ObamaCare they are going to lose that health insurance.

One of the promises made to the American people was, if you are happy with your health insurance, you get to keep it. I know of at least one business in Louisiana where that is not true, and I promise it is not limited to just this business. In fact, the evidence keeps coming in from all over the country the impact this is going to have.

Here is a quote from Texas: At Lion & Rose pubs and Golden Chick SA restaurants, 1,000-plus employees saw their work schedules reduced to part-time shifts.

From the Wall Street Journal: Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health care costs.

From the same article: Rod Carstensen, owner of 11 Del Taco restaurants around Denver in Colorado, began in April converting his mostly full-time workforce into one comprised of mostly part-time to help minimize the health care costs.

This is the real impact.

Interestingly, I asked an administration official yesterday: Can you tell us whether anyone who has health insurance now and is happy with it will lose it?

The answer: I can't answer that.

I don't know if she meant she doesn't know or if she meant she can't tell me. But I can tell my colleagues, and small businesses will tell us, if we talk to them, the impact this is going to have is not only that people are going to lose their health care coverage, they are going to lose their hours and get moved from full time to part time.

Here is something: The U.S. Chamber of Commerce did a poll: 74 percent of small businesses plan to deduct the costly law of ObamaCare by either firing workers, reducing hours of full-time staff and moving them to part time or not offering any coverage at all.

This is the real-world impact of ObamaCare on the middle class and working class. This is terrible for our country.

This is no longer a Republican or Democratic issue. It doesn't matter if a person voted for Mitt Romney or Barack Obama. This is going to hurt everybody. There are working-class people in America who have existing insurance who are happy with their doctor, and they are going to lose all of that because of this experiment. There are people today who are struggling to make it just as it is, and they are going to lose their hours. They are going to get forced from full-time work to part-time work. That is the real-life impact of ObamaCare. That is the impact it is having on the working class and on the middle class.

How can we go forward with this? We have a chance to stop this. It may be our last best chance, and it comes in September when we have to pass a short-term budget in this Chamber. If we vote for a budget that funds this, this is going to move forward and hurt people terribly, and those who vote for it are going to have to answer for that.

To my Republican colleagues I would just say this: If we are not going to draw a line in the sand on ObamaCare, we have no lines in the sand. If this issue is not important enough for us to draw a line in the sand, what issue is? This is not a political issue. This is not a partisan issue.

Today I am giving this speech on behalf of the hard-working men and women of this country--working class, middle class, small business owners--who are going to be terribly impacted by this law. We cannot just stand by and allow it to go further. We have to do everything we can to keep this from happening to people, and in September we will have our last best chance to do that.

Mr. President, I suggest the absence of a quorum.

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