The following is an exclusive piece from Joel Fox, President of the Small Business Action Committee, who shares some very important perspective in response to the main stream media’s blow out coverage of the recent poll conducted by Field, on behalf of their client, the New America Foundation, an organization that supports universal health care coverage, starting with all children. They promote this "shared responsibility" doctrine which is a shift away from individual responsibility towards some sort of collective group responsibility, where the government plays a significant role in providing for health insurance for the people. Scary stuff. – Flash
FROM JOEL FOX…
A new Field Poll says 78% of the people want to place a mandate on employers to pay for health insurance or to pay into a statewide pool to cover employees that are not covered at work. Commentators grabbed onto this poll result and declared the governor and legislature will have little trouble setting up an employee mandate to deal with rising health care costs.
Of course, poll questions typically are asked in a vacuum, with no regard for the consequences or costs. But, political actions do not occur in a vacuum. There will be consequences to a requirement that employers pay for health care costs. Those consequences could hit hard at California’s economy, and that will be bad news for Sacramento.
The legislature and governor were able to bring in last year’s budget on time because California’s robust economy produced a bump in tax revenues. Put a burden, such as a health care mandate, on business, particularly the small business engine powering our economy, and revenues would likely drop, straining the state’s ability to cover all its costs.
The Small Business Action Committee conducted a poll of its members and other business interests in late December and asked how small business might react to a health care mandate from government. Admittedly, the survey was not scientific. It was conducted through the Internet and measured the responses from those who replied. However, the results give an indication of the perils to California’s economy if a health care mandate hits small business.
Only 2% of those responding said their business probably could absorb a new health care mandate for their employees with no consequences. Twenty-three percent of the small businesses said they would have to cut employees to deal with the new mandate; 14% answered they would not be able to hire new employees they need to hire; 19% said they would have to raise prices on consumers to cover the new mandate. Thirty-four percent said they already provided health care to their workers. (Note that by the nature of the multiple choice question, this last choice probably under-represents the true portion of small businesses that provide some health care).
Missing from the current discussions in Sacramento is the need to reduce health care costs. Seventy-three percent of responders to the SBAC poll said the first order of business is to reduce health care costs before there is talk of how to address access. Indeed, lowering costs may be the surest way to get more employers to offer care.
Clearly, small business and job creation would suffer under any new mandate. The Small Business Action Committee does not support mandates. But when there are mandates placed on small businesses there must be offsets in the form of tax cuts or credits or other mechanisms to allow small businesses to survive. Placing a mandate on a business and expecting that there will be no repercussions is naïve at best.
The Field Poll result and the rush to endorse the approach of requiring small business to provide health care reminds me of initial polls that come out about initiatives that qualify for the ballot. The first polls, which test the goal of the initiative, usually indicate strong support for the goal. But, after a campaign in which consequences resulting from the proposed initiative are revealed, the end result is often defeat of the initiative at the ballot box.
Once the public understands that a health care mandate on small business hurts job creation and effects revenue to the California treasury, the people will take a second look at approving a health care mandate on business.
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Joel Fox is the president of the Small Business Action Committee, founded in 2003 to battle for small business on important political issues. Recently, Fox served as co-chairman of the non-profit Citizens to Save California dedicated to support a major reform agenda offered by Governor Arnold Schwarzenegger and others. Fox also operates Joel Fox Consulting, a public affairs consulting firm.
Prior to starting his own firm, Fox worked for the Howard Jarvis Taxpayers Association for 19 years, serving as the association’s president from 1986 to 1998, becoming president when Mr. Jarvis passed away in August on 1986. Fox took a key role in many statewide and local ballot proposition campaigns, including leading the campaign to successfully pass Proposition 218, the "Right to Vote on Taxes" measure, on the 1996 ballot.