SBAM Update on Congressional Struggle Over Health Care Reform

(By SBAM health insurance expert Scott Lyon)

Health care reform continues to consume all of the oxygen in Washington, D.C., and on most of the cable news networks. The President has delayed his oversees trip hoping that by his new departure date of Sunday that he will have a major political victory in hand.

Meanwhile extreme political pressure continues to be exerted on the “holdout Democrats” in the House. Closer to home Rep. Dale Kildee has recently agreed to vote for the bill and Rep. Bart Stupak (and as many as 12 other House Democrats who do not want any federal funding for abortion) continues to hold out as a no vote. It seems to SBAM that every other member of our House delegation in Washington is in the camp of their political party – meaning that all of the Democrats are a yes vote and the Republicans are no votes.

On March 16, on behalf of SBAM’s 9,000 small business owners and their 100,000+ employees, I sent a letter to each of our Representatives urging a NO vote. We urge you to do the same. SBAM’s primary opposition to the bill is that it does very little with regards to cost containment. H.R. 3590 contains provisions that will increase the cost of private health insurance and damage our health care delivery system. The bill that passed the Senate includes billions in new taxes, and employer mandates or penalties.

House leaders are attempting what most would consider an end-run. They are working to structure a rule to “deem” the Senate bill completed upon passage of a companion bill that makes changes to the underlying Senate version. In other words, they would be making changes to a bill that has not seen a formal vote and is not law. In essence, they are hoping that the modified bill makes the underlying bill law, even though the bill being “corrected” has never been voted upon. Said Speaker Pelosi: "It's more insider and process-oriented than most people want to know...but I like it, because people don't have to vote on the Senate bill."

Speaker Pelosi may like "deeming" laws passed, but passing laws without voting on them is blatantly unconstitutional. As former federal judge Michael McConnell wrote in the Wall Street Journal:

"It may be clever, but it is not constitutional. To become law...the Senate health-care bill must actually be signed into law. The Constitution speaks directly to how that is done. According to Article I, Section 7, in order for a "Bill" to "become a Law," it "shall have passed the House of Representatives and the Senate" and be "presented to the President of the United States" for signature or veto. Unless a bill actually has "passed" both Houses, it cannot be presented to the president and cannot become a law." Only in Washington…

All the rule bending/breaking is intended to avoid putting House Democrats in the uncomfortable position of voting on the Senate bill directly, which contains many unfavorable provisions. H.R. 3590 contains provisions that raise costs and cause many problems for our health care system. The bill that passed the Senate includes billions in new taxes, a weak individual mandate that will drive up insurance premiums as people opt out of private insurance until they are sick, the expansion of Medicaid that will cripple state budgets, and a new national long-term care program that would make Bernie Madoff proud. It has been described by Senate Budget Committee Chair Kent Conrad (a Democrat) as a "Ponzi Scheme.” Further, HR 3590 still includes the special deals negotiated for individual Senators (read bought their votes) in several states including Louisiana, Florida and Nebraska among others. If this becomes law, Michigan taxpayers will be subsidizing these states’ Medicaid populations. Is our economy in good enough shape to afford that?

The House Rules Committee was expected to meet March 17 after the House Budget Committe

West Michigan business publication MiBiz calls SBAM President "Gardener in Chief"

MiBiz's article on SBAM's economic gardening efforts notes the organization's efforts to drive state policy toward growing entrepreneurial small businesses. Excerpt:

"Like plants in a garden, businesses of all sizes need to be tended to and nurtured in order to ensure a successful economy. Similar to crops, businesses’ needs are the greatest when they’re in the early growth stages. That’s not some hippie flashback from the 60s. Rather, it’s the Small Business Association of Michigan’s new mantra for the way the state should approach economic development in the 21st century. “The term economic gardening is what we’d like to put in the lexicon of public policy,” Rob Fowler, president and CEO of SBAM, told MiBiz." 

Here is the complete article:

By Joe Boomgaard | MiBiz

LANSING — Like plants in a garden, businesses of all sizes need to be tended to and nurtured in order to ensure a successful economy. Similar to crops, businesses’ needs are the greatest when they’re in the early growth stages.

That’s not some hippie flashback from the 60s. Rather, it’s the Small Business Association of Michigan’s new mantra for the way the state should approach economic development in the 21st century.

“The term economic gardening is what we’d like to put in the lexicon of public policy,” Rob Fowler, president and CEO of SBAM, told MiBiz.

Gardening fills a pillar of SBAM’s strategic plan for the next few years. Capitalizing on the looming change in leadership in Lansing, the state’s small business advocate wants to seize the opportunity to help drive state policy to favor small business interests.

“It’s a thought leadership role we intend to take,” he said. “We have a window of opportunity, and we must strike during this time, which is (with the election of) the next governor.”

Regardless of who wins the race for the state’s chief executive, SBAM wants to bring the discussion of small business to the forefront. And that starts at the top.

“We’ve had no help from this administration — no help from the beginning. I don’t want to be overly critical because no one has embraced entrepreneurship as a strategy. It’s never risen to the level of strategic importance,” he said.

Fowler said he’s never met a lawmaker that was anti-small business, but he’s fed up with being patronized by too many legislators whose words and actions don’t match up. If he and SBAM have their way, the politicians won’t get to define what’s good for small business — that task will be up to the businesses themselves.

“This is a whole new way of taking the issues to our membership,” Fowler said.

The small business community in the state seems to be listening. In an 18-month period, SBAM grew from 5,000 members to 9,000 by early 2010, thanks to some new membership strategies and the organization’s new message, according to Fowler. Not only does the organization help small business owners save money through group purchasing, it also serves as their collective voice in the Capitol, he said.

“Owners are mad, and it’s palpable,” Fowler said. “They’re frustrated and angry about what’s going on in the state, and they want movement. They know they can’t be influential by themselves, that they have to work together to have an impact. And what we’re talking about with them today is to join the fight. We have a different stance when it comes to fighting. We’re not going to be polite and diplomatic. We’re going to take the gloves off and fight for small business.”

Hunting needed, but not exclusively

SBAM has been especially vocal since the first of the year that the state’s 15-year economic development hunting safari hasn’t worked. The Michigan Economic Dev

SBAM Partners With Davenport University to Offer Special Tuition Rates to Small Business Owners

Through a new partnership with the 14-campus Davenport University (DU), members of the Small Business Association of Michigan (SBAM) and their employees (along with dependents) have the opportunity to further their education at a reduced rate. The SBAM/Davenport program offers 25% off tuition and waiving of the $25 application fee.

For more information, go to

Davenport has a rich history of providing relevant programs for future careers since 1866. DU has been a leader in business education and in recent years added programs in health and technology as those industries moved to the forefront. The university is well connected with employers and works together with the business community to develop programs to meet job demand.

Davenport offers associate’s, bachelor’s and master’s degrees in business, technology and health programs – areas essential to Michigan’s new economy. The university also offers a number of certificates to add to current credentials or prepare for certification exams. Campuses are conveniently located across Michigan and courses can be completed on campus or online.

If a company is interested in a program designed specifically for its needs, Davenport can assist. Through its Leadership Management & Development Institute (LMDI), Davenport can design training and deliver it onsite or at a DU campus. LMDI can also customize a current Davenport program and deliver courses onsite. To learn more about these and more services visit the LMDI Web site:

About Davenport University

Davenport University – the only West Michigan-based private university specializing in business, technology and health professions – serves an enrollment of approximately 12,000 students at its W. A. Lettinga Campus in Grand Rapids, at campuses throughout Michigan and online. Davenport focuses on innovative, practical and affordable education and offers graduate and undergraduate programs. More information is available at  


Election 2010

Last week the Democratic gubernatorial primary game of musical chairs continued, and a high-profile candidate announced that he would run as an independent. 

As expected, House Speaker Andy Dillon announced that he was running for the Democratic nomination for governor.  Two weeks ago, we reported that Dan Kildee had officially thrown his name into the ring as well.  That was short-lived however.  Eleven days later, Kildee withdrew from the race.

So that leaves Speaker Dillon, State Rep. Alma Wheeler Smith, and Lansing Mayor Virg Bernero in the Democratic field.  There are two months to go before the filing deadline and it appears that this may be the complete list.  As of now (for the first time in two months,) no known candidates are mulling over a decision to get into the race or rumored to be considering a run.

Also last week, former Congressman and State Senator, Joe Schwarz announced that he was filing the necessary paperwork to run for governor as an independent candidate.  Schwarz, a former Republican from Battle Creek, needs to collect 30,000 signatures by July to qualify for the November ballot.

Hearings Begin on Day-Care Owner Unionization Bills

This week, the Senate Families and Human Services Committee began testimony on SBs 1173, 1178, and 1179.  The bills would make it clear that day-care owners and home-healthcare workers who own their businesses are not public employees and therefore cannot be unionized and have dues withheld from subsidies that they receive from the state.

The bills stem from an issue that has been getting a great deal of state and national media coverage in recent weeks.

In December of 2008, approximately 40,000 in-home day care owners were notified by mail that they were now members of a newly formed union. 

Shortly thereafter, the Department of Human Services (DHS) began withholding union dues from the subsidy checks that these daycare providers receive from the state.  The state provides the subsidy checks to the daycare providers to assist low-income parents with the costs of child care.  It is estimated that the amount of money being withheld for union dues is $3.7 million.

A class action suit was filed against the DHS in 2009.  In December of 2009 the Michigan Court of Appeals dismissed the case.  The dismissal is being appealed.

SBAM Member Testifies Before Senate Reforms Committee

As noted above, SBAM member Paul Hense, testified in support of bills that would require public employees to contribute 20% of the cost of their health care.  Currently most public employees pay less than 10%.

Hense owns an accounting firm in Grand Rapids and is a former SBAM Board Chair.  Hense testified as to his observations in serving his business clients.  He pointed out that many small business owners and employees have had to make sacrifices just to survive. 

He also pointed out that the level of benefits that public employees receive is just not sustainable in today’s economy, citing the bankruptcy of GM and Chrysler as an example.

The Reforms and Restructuring Committee will be voting on these bills later this month.

SBAM op ed opposing sales tax-on-services published in today’s Detroit Free Press

SBAM President and CEO Rob Fowler authored an op-ed that appeared in today’s Detroit Free Press. The text of the op-ed:

"First of all, let me say that I agree that the state of Michigan, and in particular our schools, need revenue. We have differences of opinion over priorities and precise levels of funding, but in the end we must have some amount of revenue every year to fund vital services like educating our children.

The question is how to generate that revenue. I disagree with the proposal that the best way to meet the revenue needs of state government and public education is by imposing a sales tax on services. That’s a tax hike, plain and simple, and it increases the overall tax burden on struggling Michigan citizens.

We need to get away from the tired old prescription of addressing revenue shortfalls by automatically seeking additional taxes. Part of the solution involves structural reform of state spending that makes state government operate more efficiently and live within its means. That makes perfect sense to small business owners. These entrepreneurs across Michigan have worked ceaselessly, and made tremendous sacrifices, to find ways to live within their means. They expect state government to do no less and are very impatient with the business-as-usual attitude they perceive in Lansing.

But you may be surprised to hear me suggest that another important part of the solution is growing government revenues, but growing them the right way – not by expanding the tax burden but by fostering a vigorous and prosperous state economy, an economy that provides an appropriate level of tax revenue that meets the needs of public services and schools without levying an undue tax burden on the private sector.

A thriving economy begins with entrepreneurial business growth that energizes job creation and boosts incomes. That in turn generates revenue for government. But a sales tax on services hurts consumers and hurts small businesses by taking dollars out of their pockets, and away from business growth in the private economy, and transferring an even higher percentage of private resources to the public sector. That’s exactly the wrong formula for solving our economic woes.

We’re at a tipping point in Michigan’s economy. We can either add more taxes, in the form of a sales tax on services that further burdens our struggling consumers, or we can take down barriers to business and income growth. Meeting Michigan’s revenue needs begins with expanding Michigan’s economy, continues with real structural spending reforms and concludes with a higher level of prosperity that benefits everyone in our state."

See the op-ed online at the Detroit Free Press Web site.

(What do you think of SBAM's policy on sales tax on services? We welcome your comments, pro or con, in the comment section below. Or, join the conversation in our Forum.)



(Audio) The Small Business Champion Podcast: Legislation Would Require Michigan Government Workers to Have a 20% Co-Pay on Health Coverage (7:19)

This week, Michael Rogers talks with long-time small business advocate Paul Hense about Paul’s legislative testimony in Lansing in favor of a measure that would require all government employees to have a 20% co-pay on their health insurance benefits. Paul is a Grand Rapids-based CPA, long time small business advocate and a past chair of SBAM.


Click here to listen.


Green Energy Entrepreneur Featured Speaker at 2010 Michigan Celebrates Small Business

Nationally-known green energy entrepreneur (and past SBAM board member) Maria Thompson of Ann Arbor is the featured speaker at the April 29 Michigan Celebrates Small Business event in Lansing.

Ms. Thompson was President and CEO of T/J Technologies, Inc., a nationally recognized Michigan company for proprietary alternative energy technologies that she and her husband, Dr. Levi Thompson, co-founded in 1991. T/J Technologies was acquired by A123Systems Inc. in 2006. She now runs the Government Solutions Group of A123Systems. A123Systems is known internationally for its Nanophosphate™ lithium ion battery technology for electric vehicles, hybrid electric and plug in hybrid vehicles, grid stabilization, power tools, defense and aerospace.

Tickets for Michigan Celebrates Small Business are $135 per person or receive a 20% discount and reserve a table of eight for $850. The evening includes a cocktail reception, an address by Governor Granholm, awards dinner and keynote by Maria Thompson. Black tie is optional. Michigan Celebrates Small Business will be held at the Lansing Center in Lansing. To register by phone, call Pam Lantrip at 800.362.5461 or register online at

Michigan Celebrates Small Business is a premier annual program to recognize entrepreneurs and small business supporters in a variety of categories. The program is a cooperative effort of the U.S. Small Business Administration – Michigan, the Small Business Association of Michigan, the Michigan Economic Development Corporation, the Michigan Small Business & Technology Development Center and the Edward Lowe Foundation.

Underwriters for this year’s Michigan Celebrates Small Business event are National City (now a part of PNC), Clark Hill PLC, the Michigan Economic Development Corporation, the Michigan Certified Development Corporation, Accident Fund Insurance Company of America and Dynamic Edge Inc.

Media partners for Michigan Celebrates Small Business are MiBiz, Crain’s Detroit Business, Upper Peninsula Business Today, the Traverse City Business News, Michigan Radio,, WWJ Newsradio 950 and the Greater Lansing Business Monthly.