Healthcare remains on center stage this week, and every special interest from the health insurers to the soda companies will be busy trying to protect their flanks.
But as Democratic leaders try to find a way forward, one particular lobby may deserve special attention: small businesses.
{mosads}Lost at times amid the infighting among House Democrats on regional issues, independent Medicare commissions, taxes and a government-run insurance plan is the Blue Dogs’ emphasis on small-business issues.
House Democrats argue that their bills would create unprecedented opportunities for small employers to purchase more affordable insurance coverage for their workers. Because large firms and their workers are able to utilize the tax exemption for large-group health insurance premiums, they have always had a huge market advantage over smaller companies.
The House legislation would offer tax credits for small companies and give employees at small firms access to the new health insurance exchange, which in theory would provide them with greater choice among plans, at lower rates, than they can obtain now in the small-group and individual markets.
Obama made small businesses the focus of his weekly radio address last Saturday and the White House issued a report laying out the case that Democratic healthcare reform would be a boon to small companies.
On Monday, Majority Leader Harry Reid (D-Nev.) said the Senate too would keep an eye out for small businesses.
“Small businesses in big cities and small towns across the country play an immeasurable role in sculpting how the future will look,” Reid said. “These are the entrepreneurs who innovate, invent and fuel our economy. They are the visionaries who create jobs and cultivate ideas.
“We, in turn, must help nurture these businesses.”
The Blue Dogs and other centrists aren’t convinced a healthcare bill will boost small business, though, and neither is the National Federation of Independent Business (NFIB), the largest of the small-firm lobbies.
One thing the Blue Dogs are pressing Waxman and the Democratic leadership about is a larger exemption from the bill’s mandate that most employers offer health benefits or pay into a kitty to offset government subsidies for their workers.
The current bill would completely exempt firms with payrolls under $250,000 a year. But from $250,000 to $400,000 and above, companies that don’t provide coverage — and pay most of the premiums — would have to pony up between 2 percent and 8 percent of their payroll to Uncle Sam.
Practically every business lobby in Washington — and just about every company except Wal-Mart — opposes this so-called “play or pay” employer mandate, but the NFIB and its allies might feel it just a little bit stronger.
Michelle Dimarob, manager of legislative affairs at NFIB, equated the effort to raise the exemption level to “trying to make a silk purse out of a sow’s ear.” She said the House bill will not do enough to lower healthcare costs on small-business owners, and therefore NFIB will continue to lobby against a higher exemption. That includes an active grassroots effort when members are back in their districts in August (assuming they leave).
Blue Dogs and other centrist Democrats also are pushing House Speaker Nancy Pelosi (D-Calif.) to scale back the high-income surtax that’s part of the House bill, in another nod to small-business owners.
As written, the surtax would apply on a sliding scale to workers earning more than $350,000 — a level at which some Democrats worry the tax would hit too many small-business owners. Pelosi wants the tax to apply only to those earning $1 million or more a year but has met resistance to that from liberals in her caucus. The surtax starts at 1 percent for those earning more than $350,000 and rises to 5.4 percent at the other end of the scale.
In addition to healthcare, House Democrats are looking to get the ball rolling on a major overhaul of the financial-services industry. The Obama administration intends to send legislation to Capitol Hill this week on derivatives legislation, said a Treasury Department spokesman. Lobbyists are getting a whiff of what Financial Services Committee Chairman Barney Frank (D-Mass.) has in mind when it comes to clamping down on derivatives, the exotic investment instruments some blame for the financial crisis.
According to a draft summary of legislation obtained on Monday by The Hill, lawmakers will consider banning naked swaps in a market that has ballooned in recent years to tens of trillions of dollars in gross value.
In naked swaps, traders do not own the underlying asset or security.
Lawmakers are also looking at other ways to beef up oversight of speculative positions, including the use of “confidential reporting” requirements.
The draft summary indicates that lawmakers will consider shifting oversight of credit default swap clearinghouse IntercontinentalExchange Trust to the Securities and Exchange Commission from the Federal Reserve. All trades would also be recorded in a trade repository.
According to the summary, lawmakers wish to move the vast majority of derivatives onto public exchanges and have them cleared by an approved clearinghouse.
Exceptions may include when regulators have concerns about the depth and liquidity of a market, when a regulator deems a product insufficiently standardized or when a buyer of the derivative “does not qualify as a ‘major market participant’ as determined by the appropriate regulator in consultation” with an oversight council of regulators envisioned by the financial overhaul.
Lawmakers are looking at ways to provide “strong incentives” for shifting the bulk of the derivatives market onto public exchanges and are considering “significantly higher capital and margin charges” for transactions that remain customized.
The House, meanwhile, is racing to put the finishing touches on its 2010 defense spending bill, but a few critical issues remain to be resolved.
Those include whether or how much to put into programs the Pentagon wants eliminated or cut, including a second engine for the Joint Strike Fighter (JSF), a new presidential helicopter, missile defense programs and the F-22.
Other projects near and dear to the hearts of defense spending panel members also would win in the bill, according to Taxpayers for Common Sense. The spending watchdog found that the 18 members on the defense spending panel got nearly one-third of all the earmarks in the bill, projects worth a total of $2.75 billion.
The House is expected to vote on the defense spending bill this week. Senate defense appropriators have yet to mark up their version of the spending bill.
Jim Snyder and Roxana Tiron contributed to this article.