“Job-Killing Regulations” Claim Cites Survey That Does Not Mention The Health Care Law — And Which Found Weak Demand Is Much Bigger Problem

The ad’s claim that the health care law means “job-killing regulations on our small business owners.” cites a report from Gallup Economy on February 15, 2012.

Gallup Poll Cited “Potential Cost Of Healthcare” As Obstacle To Hiring, But Did Not Ask Specifically About The Affordable Care Act. According to Gallup Economy:

U.S. small-business owners who aren’t hiring — 85% of those surveyed — are most likely to say the reasons they are not doing so include not needing additional employees; worries about weak business conditions, including revenues; cash flow; and the overall U.S. economy. Additionally, nearly half of small-business owners point to potential healthcare costs (48%) and government regulations (46%) as reasons. One in four are not hiring because they worry they may not be in business in 12 months.

[Gallup.com, 2/15/12]

Gallup Poll’s Top Four Reasons That Businesses Aren’t Hiring Were All Related To Insufficient Consumer Demand.  From the Gallup poll write-up cited by the Chamber: “U.S. small-business owners who aren’t hiring — 85% of those surveyed — are most likely to say the reasons they are not doing so include not needing additional employees; worries about weak business conditions, including revenues; cash flow; and the overall U.S. economy. […] Small-business owners hire when they need to respond to increased business activity and have the opportunity to grow. Although some small businesses in selected industries and markets have been growing, the weak economy of the past four years has limited overall small-business growth. Further, many small businesses continue to feel financially vulnerable, with 66% saying they are worried about the current status of the U.S. economy and nearly one in four telling Gallup they fear they may not be in business 12 months from now.” [Gallup.com, 2/15/12]

• Wall Street Journal: “Scant Demand, Rather Than Uncertainty Over Government Policies,” Is “The Main Reason” For Slow Recovery In Jobs Market. From the Wall Street Journal: “The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey. […] In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren’t hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing.” [Wall Street Journal, 7/18/11]
• McClatchy: “Little Evidence” To Support Blaming “Excessive Regulation And Fear Of Higher Taxes For Tepid Hiring.” As reported by McClatchy: “Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation. ‘Government regulations are not ‘choking’ our business, the hospitality business,” Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. ‘In order to do business in today’s environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order.’” [McClatchy, 9/1/11]

Affordable Care Act Slows Trend Of Rising Health Care Costs

Rising Health Care Costs Are Part Of A Long-Term Trend. The following chart from CNNMoney illustrates  increasing health care costs between 2002 and 2011:

[Money.CNN.com, 5/11/11]

Without ACA, Health Care Costs Would Rise Even Faster. From CNNMoney: “The individual mandate would help spread health care costs to a larger pool of individuals, thus potentially lowering costs. Should the Supreme Court strike down the Affordable Care Act, consumers can expect that percentage to increase even more as costs rise ‘very fast,’ [Mathematica Policy Research senior fellow Deborah] Chollet said. Without the law’s measures to promote preventative care and spread costs across a larger population, overall costs will rise, she explained. Those without employer-provided health care coverage … will likely pay more for their plans because there will be fewer restrictions on insurers. Individuals could be denied coverage altogether because of a pre-existing health condition or offered coverage only at a very high premium, both of which are prohibited under the Affordable Care Act, Chollet added. Those with insurance through their employer will also pay more to cover the growing number of uninsured, she said.” [Money.CNN.com, 3/29/12]

Conservative Portrayal Of Affordable Care Act As “Job-Killing” Is Inaccurate

FactCheck.org: “Job-Killing” Claim Is “Health-Care Hooey.” From FactCheck.org: “The exaggerated Republican claim that the new health care law ‘kills jobs’ was high on our list of the ‘Whoppers of 2011.’ But the facts haven’t stopped Republicans and their allies from making the ‘job-killing’ claim a major theme of their campaign 2012 TV ads. […]All of this is health-care hooey, aimed at exploiting public concern over continuing high unemployment, with little basis in fact. As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs — and also some gains in better-paid jobs in the health care and insurance industries. It’s also expected that more workers will decide to retire earlier, or work fewer hours, when they no longer need employer-sponsored insurance and can obtain it on their own with help from federal subsidies. But that just means fewer people willing to work — and it will free up jobs for those who want them. If anything, that could reduce the jobless rate.” [FactCheck.org, 2/21/12]

• AP: Republicans Misuse CBO Statistics To Support “Job-Killing” Claim About Health Care Overhaul. From the Associated Press:  “A recent report by House GOP leaders says ‘independent analyses have determined that the health care law will cause significant job losses for the U.S. economy.’ It cites 650,000 lost jobs as Exhibit A, and the nonpartisan Congressional Budget Office as the source of the analysis behind that estimate. But the budget office, which referees the costs and consequences of legislation, never produced that number. What CBO actually said is that the impact of the health care law on supply and demand for labor would be small. Most of the lost jobs would come from people who no longer have to work, or can downshift to less demanding employment, because insurance will be available outside the job. ‘The legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent— primarily by reducing the amount of labor that workers choose to supply,’ budget office number crunchers said in a report last year.” [Associated Press via USA Today, 1/24/10]

Affordable Care Act Does Not Raise Taxes On Most Americans – And Includes Tax Credits For Millions 

Affordable Care Act “Will Provide More Tax Relief Than Tax Burden” For Middle Class. According to the Washington Post fact checker Glenn Kessler: “The health law, if it works as the nonpartisan government analysts expect, will provide more tax relief than tax burden for middle-income Americans.” [WashingtonPost.com, 7/6/12]

FactCheck.org: “A Large Majority Of Americans Would Not See Any Direct Tax Increase From The Health Care Law.” According to FactCheck.org: “It’s certainly true that the health care law would raise taxes on some Americans, particularly those with higher incomes. The law includes a Medicare payroll tax of 0.9 percent on income over $200,000 for individuals or $250,000 for couples, and a 3.8 percent tax on investment income for those earning that much. The Joint Committee on Taxation estimated that the biggest chunk of revenue — $210.2 billion — comes from those taxes. There are other taxes in the health care law — including an excise tax on the manufacturers of certain medical devices and on indoor tanning services. The health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation‘s calculations. Republicans tend to add in fees on individuals who don’t obtain health insurance (which the Supreme Court now agrees can be considered taxes) and businesses that don’t provide it to bump that up to about $500 billion. Some taxes, such as those on medical devices, may or may not be passed on to consumers in the form of higher prices, but a large majority of Americans would not see any direct tax increase from the health care law.” [FactCheck.org, 6/28/12]

• Individual Penalty Payments “Tiny” Compared To President Obama’s Previous Tax Cuts.According to FactCheck.org, the increased revenue from penalty payments by individuals who do not obtain health insurance represents “a tiny future increase compared with the tax cuts Obama has already delivered, including an estimated $120 billion in 2012 alone from the 2 percentage point cut in payroll taxes.” [FactCheck.org, 5/17/12] 

Affordable Care Act Includes Tax Credits For Millions Of Americans. According to Families USA: “We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion. The new tax credits will provide much-needed assistance to insured individuals and families who struggle harder each year to pay rising premiums, as well as to uninsured individuals and families who need help purchasing coverage that otherwise would be completely out of reach financially. Most of the families who will be eligible for the tax credits will be employed, many for small businesses, and will have incomes between two and four times poverty (between $44,100 and $88,200 for a family of four based on 2010 poverty guidelines).” [FamiliesUSA.org, September 2010]

Health Insurers Poured Money Into Chamber To Attack Reform

Health Insurance Industry Gave Chamber Over $100 Million To Fight Health Care Reform. From the National Journal: “The nation’s leading health insurance industry group gave more than $100 million to help fuel the U.S. Chamber of Commerce’s 2009 and 2010 efforts to defeat President Obama’s signature health care reform law, National Journal’s Influence Alley has learned. During the final push to kill the bill before its March 2010 passage, America’s Health Insurance Plans gave the chamber $16.2 million. With the $86.2 million the insurers funneled to the business lobbying powerhouse in 2009, AHIP sent the chamber a total of $102.4 million during the health care reform debate, a number that has not been reported before now. The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform.” [NationalJournal.com, 6/13/12]

Chamber Claims Ending Bush Tax Cuts For Top Earners Means Taxing Small Businesses

Article Chamber Cites For ‘Taxing Families And Small Businesses’ Claim Reports Foster’s Support For Extending Most Bush Tax Cuts, Ending Them For High Earners. From the Chicago Daily Herald article cited by the Chamber ad: “Democrat Bill Foster says he would vote to extend the Bush-era tax cuts only for middle class earners with less than $250,000 of annual income. […] ‘This is an example of how Washington is broken,’ Foster said. ‘Where there is an area of agreement like middle class tax cuts, we should have that agreement and pass it into law. It’s being blockaded by people who want to use that area of agreement to protect the tax cuts for the wealthy and the many special interests who have tax breaks they want to protect.'” [Chicago Daily Herald, 8/11/12]

CRS: Allowing Tax Cuts For The Rich To Expire Will Reduce Deficits “Without Stifling The Economic Recovery.” According to Reuters: “Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. […] Republicans want the cuts continued for all income groups while Democrats favor letting them expire for the most affluent Americans. ‘If the economy is still weak, a temporary extension (of all the rates) will not harm the economy,’ despite adding to the deficit, the CRS report said, citing CRS economist Thomas Hungerford. But allowing the rates to rise just for the wealthy could help ‘reduce budget deficits in the short term without stifling the economic recovery.’” [Reuters, 7/19/12]

Few Top Income Taxpayers Are Actual “Small Businesses”

CBPP: “Only 2.5 Percent Of Small Business Owners Face The Top Two Rates.” According to the Center on Budget and Policy Priorities: “Allowing the top two marginal tax rates to return to pre-2001 levels as scheduled next year would affect very few small businesses, a recent Treasury Department study found.  The study shows that only 2.5 percent of small business owners face the top two rates.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]

• Conservatives Rely On Definition Of “Small Business” That Counts President Obama And Mitt Romney. According to the Center on Budget and Policy Priorities: “The claims that allowing the Bush tax cuts for high-income people to expire would seriously harm small businesses rest on an exceedingly broad, and misleading, definition of ‘small business.’ The definition is so broad, in fact, that under it, both President Obama and Governor Romney would count as small business owners — as would 237 of the nation’s 400 wealthiest people.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]

• Conservative Definition Of “Small Businesses” Includes Multi-Billion-Dollar Corporations Like Bechtel And PricewaterhouseCoopers. According to the Center for American Progress: “‘That’s 750,000 small businesses in America, the most productive, the ones that are the most successful, getting hit by a tax increase on top of everything else that’s happened to them in the last 18 months of this administration,’ said Senate Minority Leader Mitch McConnell (R-KY). But McConnell’s number is only accurate if you take an incredibly expansive view of what constitutes a small business. Included in that 750,000 is the Bechtel Corporation, the largest engineering firm in the country. It is the fifth-largest privately owned company in the United States, posting gross revenue in 2008 of $31.4 billion. […] The auditing firm PricewaterhouseCoopers, which has operations in more than 150 countries, fits the bill as well.” [Center for American Progress, 10/21/10, emphasis added]

• Former Bush Economist Alan Viard: GOP’s Definition Of Small Businesses Is A “Fallacy.” As reported by the Washington Post: “Which is why Republicans continually define pass-through entities of all sizes as small businesses, a position [former Bush White House economist Alan] Viard called a ‘fallacy.’ ‘How can it be that 3 percent of owners are accounting for 50 percent of small business income? Those firms they’re owning can’t be all that small,’ Viard said. ‘And that’s true. They’re very large.’” [Washington Post, 9/17/10]

Joint Committee On Taxation: “3.5 Percent Of All Taxpayers With Net Positive Business Income” Fall Into Top Tax Bracket. According to the Joint Committee on Taxation: The staff of the Joint Committee on Taxation estimates that in 2013 approximately 940,000 taxpayers with net positive business income (3.5 percent of all taxpayers with net positive business income) will have marginal rates of 36 or 39.6 percent under the president’s proposal, and that 53 percent of the approximately $1.3 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent. [Joint Committee On Taxation, 6/18/12]

Those In The Top Bracket Still Benefit From Middle-Income Tax Cuts. According to the Center on Budget and Policy Priorities:

Furthermore, as Figure 2 shows, under the proposal to allow tax cuts on income above $250,000 ($200,000 for single filers) to expire, taxpayers in the top two brackets would still keep sizeable tax cuts on the first $250,000 of their income ($200,000 for single filers).

[Center on Budget and Policy Priorities, 7/19/12]

Chamber Ad Misleadingly Cites Heritage Report On Chamber-Commissioned Study

The Chamber cites a Heritage Foundation post from July 18, 2012, to support its claim that the Democratic position on the Bush tax cuts “could devastate job creation in Illinois.” That post touts an Ernst & Young study purporting to find that President Obama’s tax proposals “would kill 710,000 jobs.”

Ernst & Young Study Commissioned By Chamber & Other Business Groups. From the July 2012 Bloomberg article with that headline: “The U.S. would lose 710,000 jobs and economic output would decline by 1.3 percent, or $200 billion, if tax cuts for high earners are allowed to lapse, said a report prepared for the U.S. Chamber of Commerce and other supporters of the tax breaks. The study by Ernst & Young LLP supports Republican efforts to extend all of the George W. Bush-era tax cuts set to expire at the end of the year. President Barack Obama called on Congress last week to pass a one-year extension of tax cuts for married couples making less than $250,000 a year while letting rates rise for higher earners. […] In addition to the Chamber of Commerce, the largest U.S. business lobby, the report was issued on behalf of the Independent Community Bankers of America, the National Federation of Independent Business and the S Corporation (SCI) Association.” [Bloomberg, 7/17/12]

Ernst & Young Study Didn’t Address President’s Proposals. According to economist Jared Bernstein: “First off, E&Y quite conspicuously fail to simulate what it is the President is proposing, so their main findings shouldn’t be considered in evaluating his proposals.  Second, when they get a little closer to what he is proposing, they find it adds jobs.” [JaredBernsteinBlog.com, 8/14/12]

Ernst & Young Study Assumes Revenue From Ending Tax Cuts Will Pay For More Spending, But Obama Proposed To Use It For Deficit Reduction. From an analysis by the National Economic Council’s Jason Furman via the White House: “The President has proposed to let the high-income tax cuts expire and use the resulting $1 trillion in savings (over 10 years) as part of a balanced plan to reduce deficits and debt and put the nation on a sustainable fiscal course that includes $2.50 of spending cuts for every $1.00 of revenue.  But rather than modeling the President’s proposal to reduce the deficit, the headline numbers in the study explicitly assume that the revenue would be used entirely to finance additional spending.  In fact, the study explicitly states, ‘Using the additional revenue to reduce the deficit is not modeled.’” [WhiteHouse.gov, 7/17/12, underlining original]

When The Study Models Ending Top-Tier Tax Cuts While Giving Middle Class Cuts, It Projects An Employment Increase. According to economist Jared Bernstein: “But for all of that, they actually find that when they model something that’s closer to what the President is proposing — getting rid of the Bush tax cuts for high-income families, while providing additional tax  cuts to the middle-class — employment grows by 0.4%, or almost 600,000 jobs. When they simulate the wrong scenario of new tax revenues used to support higher spending (column 1, table 2), they estimate that employment would fall by 0.5%.  But if the revenue was used to finance across-the-board tax cuts, employment grows.” [JaredBernsteinBlog.com, 8/14/12]