Main Street small business owners need an HHS Secretary with a plan to address affordable health coverage for themselves and their employees.
Small Business Owners Say The Trump-Led Republican Health Plan is a Disaster for MN Small Businesses
A Repeal of the ACA Threatens The Financial Health of Small Business OwnersRead more
Main Street business owners counter Trump’s divisive rhetoric and executive action with a message of diversity and inclusion.Read more
Immigration and inclusion power the U.S. economy; efforts to shut out immigrants and refugees will hurt communities and small business bottom lines.Read more
Main Street Alliance Urges Senators to Reject Nomination of Rep. Tom Price for Health and Human Services Secretary
Main Street small business owners oppose Price nomination; warn Senate leaders his efforts to repeal the Affordable Care Act, privatize Medicare and block-grant Medicaid would negatively impact their bottom line.
Ahead of today’s confirmation hearing, Main Street Alliance (MSA), a national network of state-based small business coalitions, calls upon the Finance Committee to oppose Mr. Trump’s nominee for HHS Secretary, Representative Tom Price (R-GA). In a letter to the committee opposing his nomination, Main Street Alliance warns that Rep. Price’s policy agenda would prove particularly harmful for small business owners.
MSA National Director Amanda Ballantyne writes:
“HHS-administered programs, such as the ACA, Medicaid, and Medicare, have provided much-needed relief to small business owners, who have long struggled to obtain affordable, quality coverage in the private market…. Unfortunately, Representative Price’s record on these programs is dismal.
Representative Price is a proponent of radical proposals to cut billions from Medicare, converting it to a voucher which would lose value over time and shift more and more costs onto seniors and people with disabilities. He also supports increasing the age of Medicare eligibility from 65 to 67, which would increase the number of older adults--many of whom are small business retires-- without health care coverage. Furthermore, Representative Price supports the repeal of the Affordable Care Act (ACA), a plan that would cause 30 million people to lose their coverage by 2019, including over 4 million business owners; collapse the individual market; and cause premiums for small business owners to skyrocket.
Beyond the direct health and financial costs to small business owners, Representative Price’s plan to dismantle the current health care system would siphon billions of dollars out of local economies, starve state funding, and under-resource vital programs that small businesses rely on.”
The ripple effects of repealing the ACA and implementing Representative Price’s policy agenda would be far-reaching and disproportionately hinder small business growth. Main Street Alliance urges members of the Senate Finance Committee to oppose the nomination of Tom Price for Secretary of Health and Human Services.
View the full letter HERE.
Trump budget's cuts to Medicaid threaten small businesses and local economies.
What is Medicaid?
Medicaid is a popular and successful program, jointly run by the federal and state governments, that provides health care to over 75 million people. As the single largest insurer, Medicaid offers high-quality care at affordable rates and finances over 15% of all personal health care spending in the U.S. Enrollees include:
6.1 million people who own or work in small businesses
37 million, or 1 in 3, children
37 million seniors and people with disabilities
Medicaid provides parents and other adults economic security through health coverage that protects them from medical debt and allows them to stay healthy and work. Robust research shows that Medicaid leads to better birth outcomes, lower mortality rates, improved health, higher earnings, improved long-run educational attainment, reduced disability, and lower rates of hospitalization and emergency department visits.
What would the Republican plan to cut Medicaid mean for small businesses?
President Trump and Congressional Republicans are trying to significantly cut Medicaid by instituting a “block-grant” system that would weaken the program and cripple state budgets.
The Republican plan essentially shifts significant financial responsibility from the federal budget to state budgets, and cuts entirely the program’s additional federal support during times of economic crisis. To compensate for these severe funding cuts, states would likely have no choice but to institute draconian cuts to eligibility, benefits, and provider payments. Here’s how these cuts would impact small businesses:
Up to 21 million people will lose their health care coverage, including many small business owners. States would also likely be allowed to institute waiting lists or to limit the number of people with coverage. Poor seniors and people with disabilities would be at risk since health care costs for those people comprise almost half of all Medicaid spending. Provider payments would be cut, making it harder to find participating doctors.
Local economies will suffer job loss and billions of dollars will drain from local economies. The proposal would eliminate an estimated 3.1 million jobs between 2013 and 2020. The cuts would siphon billions of dollars out of local economies (both direct spending and multiplier effects), reducing consumer demand and local economic activity.
Health care costs will rise for everyone. Deep cuts to Medicaid will mean millions won’t get the coverage they need and will end up in emergency rooms without insurance to pay for their care, increasing the costs of uncompensated care. To cover these expenses, insurers will charge higher rates for their products, increasing premiums for small business owners and the self-employed.
State budgets will be decimated. Costs will shift to states that are already facing deep cuts to health and other programs because of budget crises. The 2017 budget would cut federal Medicaid funding by $1 trillion — or nearly 25 percent — over ten years. These cuts would grow to 33 percent by 2026. Currently, the federal government and states share in unanticipated costs. Under a block grant, states alone would bear them.
Small businesses in the Chicago and Los Angeles-San Diego region are getting fewer loans and smaller amounts from banks than in 2001.
A new report by Woodstock Institute shows stark disparities in loan rates for business owners in disadvantaged neighborhoods. Small business owners in low- and moderate-income areas receive disproportionately fewer bank loans than small businesses in more affluent areas.This lack of access to capital compromises a crucial source of economic opportunity and asset-building within lower income neighborhoods. Bank loans to businesses are necessary for community development because businesses without adequate access to capital fail to grow, cannot hire workers, and cannot make the kinds of investment often required of entrepreneurs.
“I needed a small loan to manage a surge of growth at my gourmet donut shop. It would’ve allowed me to triple my workforce with 24 new jobs and rescue a dilapidated corner of my neighborhood,” said Brad Keiller, the owner of Nomad Donuts in San Diego and a member of the Main Street Alliance. “I should’ve been a shoo-in for a small business loan. I have hundreds of thousands of personal capital invested, excellent credit, I’ve been in business for over two years and my revenue is through the roof. But even with the loan guaranteed by the SBA, banks don’t have enough incentive to lend to a business like mine. It’s been over a year and I’m on my eighth attempt to secure funding.”
The report, Patterns of Disparity: Small Business Lending in the Chicago and Los Angeles-San Diego Regions, examines bank lending to small businesses in the Chicago region as well as in the Los Angeles and San Diego region. It is the first in a four-part series of research reports examining small business access to bank loans in eight major metropolitan areas.Read more
The confirmation of Mnuchin would be a return to the failed policies that decimated small businesses, caused widespread job loss and destroyed the economy.
Today, small business owners, still struggling in the aftermath of the 2008 financial crisis, urge the Senate to oppose the nomination of Steven Mnuchin as Secretary of the Treasury. One of the architects of the Great Recession, Mnuchin has a track record of irresponsible economic decisions, and cannot be trusted at the helm of the US economy.
The Treasury Secretary is the leading cabinet official responsible for the economy, tax revenues, and the stability of our financial system. As the economic drivers of our economy, small business owners need financial stability and access to capital to thrive and create jobs. While on Wall Street, Mnuchin’s practices resulted in small business owners losing capital, having to downsize, and on many occasions, shut their doors completely. Small businesses cannot afford another economic crisis like the Great Recession.
Mnuchin, the co-founder and former CEO of OneWest Financial, a predatory lending institution, has built his success at the expense of small business owners and the communities they serve. Notorious for their “foreclosure first” policies, OneWest and Mnuchin engaged in extractive business practices that decimated small business owners and their communities. Sixty percent of the net job loss between 2007 and 2012 was in the small business sector. For businesses with fewer than 50 employees, employment declined 14.1 percent, compared to an overall employment decline of 8.4 percent.
During his tenure at OneWest, Mnuchin demonstrated a lack of commitment to fair and inclusive lending to small business owners. His financial institution had no significant branch presence in communities of color, rarely lent to small businesses, and has been accused of discriminatory lending practices.
“Given his history of predatory lending practices, and the very real challenges small business owners of color face in accessing and securing loans, it is profoundly disheartening that someone with Mnuchin’s track record would be offered this appointment,” said Michelle Sternthal, Main Street Alliance Deputy Director of Policy & Government Affairs.
Main Street Alliance and our small business members urge the Senate to block Mnuchin’s nomination. A Wall Street financier who accumulated massive wealth by sapping the revenues of small business owners and hardworking homeowners can not be trusted to steward the U.S. economy.
The proposed charter would undermine critical state protections and place small businesses at grave financial risk.
Today, Main Street Alliance expressed our concern over Comptroller Thomas Curry’s plan to enact a special purpose charter for fintech companies. Access to safe and affordable capital is a key policy priority for Main Street Alliance business owners.
Below is an excerpt from the letter to Comptroller Curry from MSA National Director, Amanda Ballantyne:
“While the growth of the fintech industry presents new opportunities for overlooked businesses to access capital, it also brings considerable risks. To date, irresponsible, and potentially predatory, lending practices have been documented in the online lending market. For instance, average APRs have hovered around 94%, with rates as high as 358%, according to a study by the Opportunity Fund. Fintech lenders have also included hidden or deceptive prepayment charges, opaqueness in repayment policies, and questionable brokerage practices. Not surprising, a 2016 Federal Reserve study reported exceedingly low satisfaction levels among business owners who used online loans (15%), attributable to the high interest rates and unfavorable payment terms of these loans.
For small business owners, the potential for fintech companies to inflict serious harm is even more pronounced since many critical federal consumer protection laws do not extend to commercial loans. Consequently, state laws are the primary, and in many cases, only, line of defense against the lending industry.
Robust and comprehensive federal protections are clearly needed to address the current regulatory gaps. However, rather than serve this function, we believe that the proposed charter--in extending bank preemption to fintech companies--would create a more perilous lending environment for small business owners by weakening existing state protections without offering comparable coverage at the national level.”
The letter warns “the OCC’s proposal would endanger small business owners by extending national bank preemption to fintech companies without offering comparable national protections.”
View the full letter HERE.
Small businesses brace for instability as Congress moves to repeal ACA and gut other health programs.
In a major setback for small business owners and entrepreneurs, the House voted today(227-198) to move forward with the repeal of the Affordable Care Act. Repealing the health care law would lead to unaffordable premiums, job loss, and budget cuts that would devastate the economy and harm small business growth.
“Before the Affordable Care Act, annual double-digit insurance premium increases meant instability in our business planning and growth," said Jim Houser, co-owner of Hawthorne Auto Clinic in Portland, OR and Main Street Alliance Executive Committee Member. "The ACA has stabilized our premium costs, raising our confidence enough to fill more full-time positions. Repealing the ACA will turn full control of health insurance pricing and coverage options back over to the largest insurance companies, and create the kind of instability that makes it challenging for businesses like mine to grow."
The House vote comes just a day after a joint report was released by the Treasury and Department of Health and Human Services finding that one in five marketplace enrollees is a small business owner or is self-employed. Small business owners and self-employed individuals are nearly three times more likely to use the ACA Marketplace to purchase insurance.
"As an entrepreneur and small business owner, I rely on the ACA to provide me and my growing family with affordable health insurance options," said Jeff Beck, owner of East Side Mags in Montclair, New Jersey. "The ACA makes it easier for me to sustain and grow my business because it means I have more funding available for inventory, marketing, and other crucial business expenses. By repealing the law without a providing a replacement plan Congress is pulling the plug on health insurance coverage for millions of Americans, including myself and my family. And it makes it more challenging for entrepreneurs like myself to start or grow a business."
Without the ACA, small businesses will be vulnerable to price gouging by health insurers, and will no longer have access to the bargaining power, risk pooling, or economies of scale that the ACA created. Costs would increase immediately for every small business that qualifies for the health premium tax credits. The higher cost of coverage for small business owners would mean less money to hire workers, making it harder for employers to add jobs–contributing to an estimated loss of 2.6 million jobs, mostly in the private sector.
Repealing the health care system is a misguided effort that will squash entrepreneurship, stall job growth and have a ripple effect throughout the economy.