Health Tips

Small businesses can’t seem to get a break from Washington.  The health care bill is moving through Congress and it would impose added costs on our small business owners, mandating that they provide their employees with health care.  Legislation to mandate paid sick leave is gaining steam on Capitol Hill.  And, now Congress is fast tracking legislation that would create a Consumer Financial Protection Agency (CFPA) that would further regulate the flow of capital.

Specifically, the new Consumer Financial Protection Agency would assume regulatory responsibilities related to consumer finance now performed by other federal agencies, including the Federal Trade Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA).  The role of the federal government in determining what financial products consumers can access would grow.

We can all agree that some reforms are needed, but a government takeover of our financial system is not the answer.  We can’t afford to limit access to credit, at a time when many of our small businesses need it most. 

How would this new agency impact small businesses?  Most of the 26.7 million businesses in the United States rely on sources of consumer lending to finance their business.  Thus, small businesses ability to access credit would have to go through a government run agency.  That is concerning since, according to the U.S. Chamber of Commerce, 97% of businesses with 20 or more employees use some form of credit.

While small businesses rely heavily on credit, they still have a difficult time accessing it.  Most new small firms do not have a credit or revenue history, and their high failure rate makes them a risky investment for lenders.  In 2003, “close to 20% of firms with fewer than 20 employees did not even try to apply for credit because they expected to be denied.”  Due to the poor economic climate today, small businesses have an even greater need to be able to borrow in order to either start their firm or keep it growing.

Regulations enforced by the CFPA, would alter the free flow of capital and reduce the market forces in our consumer lending system.  If small businesses cannot get the resources they need to serve their customers, they will likely be forced to close or significantly change their business.  According to conservative estimates by law professors at George Mason University and the University of Chicago, the implementation of the new agency’s regulations would:

• increase the interest rates consumers pay by at least 160 basis points;
• reduce consumer borrowing by at least 2.1 percent; and
• reduce the net new jobs created in the economy by 4.3 percent.

The agency would also dictate who can receive loans, taking that decision away from banks and other institutions.  This “one-size-fits-all” approach to financial services would, according to the U.S. Chamber of Commerce, “ignore the fact that small businesses use consumer financial products in different ways than the average (household) consumer.”

Small businesses are the backbone of our economy, creating most of the jobs, providing vital services and products to consumers around the world.  The proposed Consumer Financial Protection Agency would only make it even more difficult for small businesses to access credit and will do very little to actually protect consumers.  At a time when the economy is still struggling to recover, the last thing Congress ought to consider is an additional layer of government regulation that will hurt our small businesses.

What do you think?

from: http://terry-neese-blog.com/government%e2%80%99s-role-in-financial-services-should-be-limited/

Welcome back from a hopefully long, restful weekend of eating too much and catching up with family and friends. I took the opportunity to kick back and branch out my reading into other areas besides healthcare. Following Roethlisberger’s concussion, Federer’s fifth time ending the year at #1, and Tiger’s defeat by a fire hydrant and a tree, I thought about the decisions – good and bad – that led to and followed from those events. Federer gets the crown for best decisions, Tiger wins the dunce cap for worst. Then I happened upon a four-letter word: trigger. In the world of Washington, D.C., ‘trigger’ is the definition of deciding NOT to make a decision. Welcome back to the healthcare reform debate.

We previously covered why a policy trigger is a Really Bad Idea, historically and philosophically. Specifically, we discussed why a public option trigger is a cop-out, pretending to set conditions for a gun to fire when those conditions have already been met. It’s political cover for passing the buck, being able to say you addressed the problem while actually ducking it. So it should be no surprise that a “strong public option trigger” is back in the conversation as the Senate digs in for a long battle.

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Senate Democrats didn’t have much time to relish their historic victory before the Thanksgiving holiday – health reform’s sworn enemies began pulling out the knives virtually the minute all 60 votes were counted to move the Senate health bill to the floor. Republican senators vowed to block the debate at every turn. The business contingent threatened to pile on the attack ads. Catholic bishops solemnly swore to defeat the bill over the abortion clause. And the gun lobby … wait a second. The gun lobby? Since when did health care reform become a special interest of the gun lobby?

Apparently reforming health care could jeopardize your right to own guns. As reported in the Washington Post, the Gun Owners of America warned its 300,000 members that the Senate health bill would threaten their ability to acquire firearms licenses because it would force doctors to provide “gun-related health data” – including the potential gun-owner’s mental-health history – to the government. So, let me get this straight … Americans, even deranged ones, will surely be robbed of their right to bear arms if health legislation passes?

It would be easy to write this off as yet another bizarre manifestation of America’s love affair with guns. But it isn’t about guns. It’s about the fact that conservatives want to crush Obama and what they believe is his “socialist agenda.” Trouble is, they’ve run out of ideas. So they resort to scaring the public by telling the weirdest lies. Like all that talk about death panels last summer. Or the claim that people could go to jail if they don’t buy health insurance. And now guns.

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