Panel: Small American Businesses Are Caught in the Middle of Political Standoff in Washington

Enhanced premium tax credits, which are designed to make health care more affordable through the Affordable Care Act marketplace, are set to expire this year. It's a major issue which is causing the government to shut down to drag out for longer. Democrats want to extend them, but now Republicans want to discuss it once the government is open again. Small businesses are watching it closely as health care for their employees is already a major expense. Joining us to discuss is Javier Palirez, founder and CEO of the US Hispanic Business Council and former Obama campaign adviser. And we have Michael Bustler, an economist and public policy analyst who serves as a professor of finance at Stockton University. So, thank you both for coming on this afternoon. Javier, I'll start with you. Uh, how are business owners feeling about the prospect of these premium tax credits uh expiring at the end of this year? Well, as you can imagine, uh, Don, this is a major issue for every American small business. You know, larger corporations don't have this issue. It doesn't impact them. I've said a hundred times. This doesn't impact Wall Street, but it could devastate Main Street. Uh, American small businesses employ uh, you know, literally millions of Americans, almost 50% of our population. Uh and it's those employees of the small businesses that you know depend on the uh the the tax credits that make health care affordable. And you're talking about 22 23 million Americans that def depend on these uh enhanced premium tax credits. So this is a very very difficult time for the small business community. You know the clock is ticking. We're at the 11th hour. Um, we're now in this is the longest shutdown in American history. I don't see, you know, any light at the end of this tunnel. We're talking to both sides of the aisle. Um, both sides are are pretty stuck in in their positions right now. And at the end of the day, it's the American small business community, our employees, uh, that are going to that are going to suffer. um these healthc care benefits are going to double triple in some cases making health care unaffordable for literally uh millions of Americans at a time when we certainly need it. >> So Michael Hav is right that we're approaching the longest shutdown uh ever in in history of this government. Um so why is it that small businesses are made to foot the bill in the first place? >> So let's look at the big picture here for um a minute. So, um Obamacare w was passed 15 years ago with the promise of reducing um health care premiums uh and ensuring more more people. Um before Obamacare, we had 90% of the population of of households had health insurance. After Obamacare, there's now 91% of the population that have uh have health insurance. Premiums have skyrocketed. So, back in the the big beautiful bill, um the uh Congress decided that um they've got to do something to reduce the annual deficit because the public debt is now over $ 38 trillion. And we're spending uh almost $2 trillion a year more, the government is than it takes in in tax revenue. So, we've got to cut government spending. So, in when the bill passed, they said, "Look, um, in 2021, Congress said, uh, we're coming out of COVID. Unemployment's fairly high. A lot of people can't afford their benefits, so we'll pass a temporary, uh, subsidy to help people pay the benefits." Um that subsidy was due to run out at the end of 2025 and Congress said um let's not extend it because we have to get uh government spending down to reduce the annual deficit. Uh just when they did that um Obamacare healthc care premiums are about to skyrocket on on their own. So, the uh problem that we have now, now the Democrats say, "We're not going to open up the government until you agree to uh pay for that, and over a 10-year period, that's $1.5 trillion. It will add to the public debt at a time when we're trying to hold the debt constant or even trying to get it down. The um the Republicans are going to stand uh hard with this. They're not going to bend. We can't continue to spend money. we don't have I'm very sympathetic to the people that are going to see these large increases in premiums um and we don't want to see that happen to anybody but on the other hand you can't ask the taxpayers who already pay 80% um of the premiums for these people to pay even uh more. The problem is health care is too expensive. We have to change the health care system to get it to a point where the costs are not going up so much every year, the quality improves and people are able to keep their uh doctors. >> So, Javier, what what do you think about those points that were just made by Michael? >> You know, no question that u you know, we're in a we're in a bad situation when it comes to the budget and the deficit. Uh no argument there. Uh, look, I'm not a politician and I'm not an economist like like Dr. Bustler. Uh, I'm a businessman and I'm talking to the people who pay the taxes, drive the economy, create the American jobs. It's the American small business community. We represent about 70% of net new jobs in this nation. We need help. Our employees are the ones that depend on the Affordable Care Act and these earned premium tax credits, uh, enhanced premium tax credits. uh at the end of the day uh there are arguments pro and and against and all of them seem to make sense but it is the American small business community it is our employees who are going to feel the brunt argue as a businessman I couldn't argue that we need to stay within our budget but there are other ways to to get the tax revenue we need there are other ways to fund this government we are spending an insane amount on military on on defense. Uh the these are expenses. These are dollars that could be used to help the average American family. We're talking about 22 million Americans that will not have healthcare. And as I said, our members in Congress and most of us will not get impacted by this. That's part of the problem. The people deciding what to do, they're going to go home. They'll still have a job. They'll still have excellent healthcare. this does not impact them, but we're the ones, it's our constituency of business owners and our employees that will get impacted. And the system is absolutely backass. And we need this Congress, this administration, and politicians on both sides of the aisle to pay attention to the American small business community. We're the ones who make this economy work. We don't have, you know, huge tax departments working for us. We don't have huge marketing departments working for us. We don't have uh you know lobbyists talking to every single member of the Congress. We just don't have those assets. We don't have those resources. Thank God that NTD and other other media networks are even listening to us. But this is a crisis and this will impact ultimately the American economy in ways that we may not be able to to to recover from very quickly. And so there is a way here for us to get through this thing. We need to fund the government. We need to get back to work. And we need to extend the earned premium tax credits, the enhanced uh premium tax credits on behalf of the Americans who need it. Working Americans, by the way. >> Okay. So, Michael, I'll go off of Javier's point a little bit and I see where you're coming from, Michael. And a lot of people would agree with you that we need to keep the national debt down, but how do you explain that in in light of small businesses suffering? They're thinking about their own situation right now. >> Javier is absolutely right. Small business is the backbone of this country. The vast majority of new jobs are created by small business and we need to do everything we can to make it easier for small businesses to succeed. Most new businesses end up failing within the first three years. So the ones that that make it um have done things right and they've created a business, they've create created jobs. We have to keep that going. On the other hand, we can't continue to spend money that we don't have. We just can't continue to spend money we don't have. Period. Every politician says, "Well, let's reduce government spending to get the deficit down." But as soon as you say, "This is where we're going to cut it," a politician has a problem. Well, that affects my constituents. You can't cut it there. Find some other place to to cut it. And then when you find another place to cut it, let's cut defense. Well, someone says, "Look, there's wars going on. We're trying to get over these wars. Our military was decimated during the last administration. We need to build that up. So, don't don't cut defense spending. Well, how about some of the other things? Uh uh Medicare and Social Security account for over half the spending. Well, we can't cut that because all these people paid into it all all these years. So, there's very little room to to cut spending, but we have to cut spending. This administration got the deficit down from a little over two trillion down to 1.8 trillion. They'll probably get it down to about 1.4 trillion in the next f fiscal year. And they'll do that if they're able to hold the line on spending. The dilemma we're in now is that we can't spend any more money we don't have. And yet, if we don't subsidize health insurance for the 20 million uh people, they're going to run into a lot of trouble. And Javier's right. Big business can afford well health insurance goes up a little bit. We'll absorb it here here and there. Big small business can't do that. You end up raising the um health insurance premiums and either they have to say to their employees, "Look, we're not going to be profitable if we pay this. So either you're going to have to pay it. We could try to raise our prices, but it's a competitive market. We're trying to fight inflation and keep prices down. This is a very difficult problem." the the answer to the problem is let's get the government opened. We only need five Democratic senators to vote for that. Let's get it open and then let's sit down and say, "Hey, we've got to mess with healthcare." Uh regardless of who likes it and who doesn't like it right now, it's not working and it's too expensive. So, let's figure out a way. There's some very intelligent people in in Congress. They should be able to figure out a way to keep the health care system improving, keep the quality of the health care, in my view, the best in the world. But we have to keep the cost down. I think a lot of it uh during Obamacare from Obamacare, they have very good intentions, get the government involved to kind of watch this, that, and the other thing. The problem is there's too much government involved now, and the only ones making out here are the insurance companies. health insurance companies profits are skyrocketing and they keep uh coming in and say we need um rate increases. What we need to do is get the cost down. Let's get the government open. Let's get both sides of the aisle to sit down. We all have the same goal. We want the best quality health care and try to cover as many people as possible and keep it at a reasonable cost. So, Javier, your response, but I also want to ask you, do small businesses have any backup plans or alternatives to footing the bill? >> Um, before I I get into that, Don, you know, again, you know, I'm not nearly as learned as as Dr. Dr. Bustler, uh, but but to give it a little bit more context, you know, you're talking about may maybe 5% the GDP. So, so this is not a huge hit. It is a hit and it is an expense but it's not an outlandish expense. This is a very small uh portion of our our GDP. Uh and and if we don't extend the the the tax credits and these go away, there are consequences. For example, 57 billion of economic output goes out the window. Uh you're looking at $34 billion uh you know of our GDP taking a negative hit on an annual basis. you're talking about $21 billion in state taxes that will go away. And on top of that, it's estimated some 300,000 American jobs will go away. So there there's the other side of this coin that that yes, you know, there this is a hit to our GDP. This is a hit, you know, in terms of our budget and our expenses, but it is not a significant expense when you look at everything else we've got going on. And there are some real benefits from an economic standpoint of keeping people healthy and keeping them on the job. So the to give the full story that's the other half of this. Now in terms of contingency plans, we have none. Uh you know it comes down to this. We let people go because we can't afford the health care for all of them. So some have got to go so that we can afford the higher price for the rest that are left. We shutter the business altogether. um or our people go without insurance at all. And none of those is an option that we're comfortable with. We shouldn't be. Uh it it is a dire situation. And again, the bad, you know, really sad part of all of this is that the people making the decisions at the end of the day are not impacted because their health care is going to be just fine. They're going to have the world's greatest health care. Their families will be taken care of. They'll have a job tomorrow. It's the small business community and the millions upon millions of Americans that we employ that are going to take this hit. >> Hey, so Michael, we're just about out of time. If you have any final thoughts, uh, you like to say right now. >> Yeah, one last thing. I agree with everything Javier said. Everything he said makes sense. The problem is we can't keep spending money we don't have. And every time we go to cut something, with all due respect to Javier, everybody says the same thing. Well, it's only a couple percent here and it's a couple percent there and but we can't keep increasing. We've got to start start cutting back. Health care is not an area where you typically say I want to cut back for exactly the reasons that Javier said. We've got to figure out a way to make the health care system work with the dollars that we we have now. In the short term, let's get the government open. Let's figure out how to help uh everybody without spending too much money. And in the long term, let's solve this problem rather than just kicking the can down the road, which is what we've done really every year uh since we've had the Affordable Care Act. It turned out to be not so affordable and they just keep kicking the can down the road. We're at the end of the road. It's time to address this uh problem. So, get the government open. Let's address this problem and let's try to come up with a solution that makes sense for everybody. >> Well, all right. Good discussion today. Thank you both Hav and Michael. >> Thank you Don.