Senate to Business: Think Twice Before Starting a Construction Company

Americans for Prosperity
January 5, 2010

The New York Times reported this morning on special provisions placed in the Senate health care bill at the last minute. The bill requires businesses with more than 50 employees to provide health insurance for all of their employees or face significant fines. This applies to all industries except one: construction. Under this new provision, construction companies with only five or more employees will have to provide insurance or face a tax penalty of $750 per employee.

The provision was added after heavy lobbying by labor unions, who argued that smaller companies with fewer than 50 employees will have a competitive advantage. Yet forcing small businesses to allocate enormous amounts of their budgets toward health care will bankrupt millions of smaller businesses in the industry. Even more troubling is the government’s willingness to play favorites when it comes to certain industries.

The last minute addition of this special rule for the construction industry was proposed by Senator Jeff Merkley (D-Ore.) after some persuasion from lobbyist Daniel Gardner of the International Brotherhood of Electrical Workers. When asked to justify the new provision, Sen. Merkley stated: “Construction contractors are overwhelmingly small businesses,” with 90 percent of them employing fewer than 20 workers. If companies with fewer than 50 workers received an exemption, he said, that “would effectively exempt the entire construction industry.”

The article continues at AFP

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