The Chamber of Commerce continues their "Just Say No!" strategy against health care reform with a new ad this week that flaunts a series of misleading numbers to make the case (or rather, their lack thereof) against legislation that will guarantee Americans access to quality, affordable health care. After all, who needs real facts when you can just distort the reality of what fixing health care will mean to millions of Americans and small businesses instead? Not the Chamber!

Now for some truth: We all know America's health care system is broken. But instead of proposing solutions to help ease the crushing burden of rising costs, the right-wing continues to spend millions to champion the status quo and attack common-sense health care reforms. At a time when small businesses are crumbling under the weight of rising healthcare costs, the last thing they need is more attacks on legislation that will guarantee small businesses and their employees' access to quality, affordable healthcare.

Here are the facts on how small businesses and taxpayers would actually be affected by the latest proposals for fixing our broken system.

False U.S. Chamber Claim: Proposed Surtax On America's Wealthiest Will Push Tax Rate Over 50% in 39 States. In a new print ad, the new U.S. Chamber of Commerce claims that the proposed health care surtax will push "the top marginal tax rate over 50% in 39 states." This information is based on a study by the Tax Foundation. [U.S. Chamber of Commerce ad, accessed 7/21/09; Tax Foundation, 7/14/09]

REALITY: Tax Foundation Numbers Apply to Only .2 Percent of Nation's Households. The Tax Foundation numbers apply only to the households in the United States that make over $1 million, which is only .2 percent of the population. [Center on Budget and Policy Priorities, 1/30/2006]

REALITY: Tax Foundation Assumes Tax Rates Would Rise After Two Years. The Tax Foundation's analysis assumes that the tax rates would rise again in 2013. This is because "If additional savings didn't materialize at some specified date, this would 'trigger' higher rates coming into effect in 2013." However, the Tax Foundation assumes these higher rates in 2011. [Citizens for Tax Justice, 7/15/2009; Tax Foundation, 7/14/2009]

REALITY: Proposed Surcharge Would Help Recover Some of $700 Billion In Tax Breaks Given To America's Top Earners. According to Citizens for Tax Justice, "the graduated surcharge included in H.R. 3200 to finance health care reform would require the richest one percent to give back some, but not all, of the tax cuts they received over the 2001-2010 period." [Citizens for Tax Justice, 7/15/2009]

U.S. Chamber Ad Also Cites Misleading Wall Street Journal Claim. In the new print advertisement, the U.S. Chamber of Commerce also cites the Wall Street Journal, which claimed that the surtax "would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators, or investors." [U.S. Chamber of Commerce ad, accessed 7/21/09]

REALITY: The Wall Street Journal Numbers Are Very Misleading and Overestimate Number of Small Businesses Affected.
According to Factcheck.org, it is unlikely that the number the Wall Street Journal used is that high, arguing the number "is a guess" and "some evidence suggests the true percentage is lower." Indeed, "only 2.2 percent of filers with small business income would be in the top two income tax brackets..." [Factcheck.org, Factcheck Wire, 3/6/2009; Center on Budget and Policy Priorities, 3/26/2009]

The U.S. Chamber of Commerce claims to defend the interests of small businesses, but even a quick examination of their legislative record shows them opposing bill after bill that may help small businesses--and health care reform legislation is no different.

More Than Nine Out of Ten Small Businesses Will Not Be Affected By Surtax. According to the Center on Budget on Budget and Policy Priorities, "More than nine in ten small businesses would feel no impact whatsoever," meaning "some 96 percent of taxpayers with business income would not owe the surcharge." [Center on Budget and Policy Priorities, 7/17/2009]

Even Those Paying the Surcharge Will Not See Any Impact On Business. According to Citizens for Tax Justice, the surcharge will only affect business profits, and "a small business owner deducts any money that she paid to employees as compensation, as well as any other operating costs...it is only business profits that are taxed." In addition, "even purchases of equipment to expand business operations would not be affected..." [Citizens for Tax Justice, 7/15/2009]

A Number of Small Businesses Will Benefit From Tax Credit Provided in the House Bill. According to the House Ways and Means Committee, "a substantial number of small businesses would benefit from a new tax credit included in the bill...the House proposal provides a tax credit of up to 50 percent of the employer's coverage for certain small businesses that choose to provide health coverage for their employees." [House Ways and Means Committee, accessed 7/21/2009]

Health Care Reform Can Save Small Businesses 36% Of Their Health Care Costs and Reduce Profit Losses By More Than 50%. With health care reform, "small businesses can save as much as $855 billion, a reduction of 36 percent." In addition, "over the next ten years...small businesses will lose $52.1 billion in profits to high healthcare costs. Healthcare reform can reduce these losses by more than 56 percent, saving $29.2 billion in small business profits..." [Small Business Majority, 6/11/2009]

Health Care Reform That Includes Shared Responsibility Will Save Workers Billions In Wages. According to a recent study, "Reforming healthcare, and providing support to small businesses under a new system of shared responsibility, can save workers up to $309 billion in wages over the next ten years. [Small Business Majority, 6/11/2009]

A new report released by SEIU today shows that Bank of America has cut small business loans made through the Small Business Administration (SBA) 7(a) program - despite taking billions in taxpayer-funded bailouts meant to stimulate the economy.

At a time when the failure rate of small businesses has been on the rise, Bank of America has - and continues - to reduce the amount it lends in SBA loans while increasing higher-interest credit card lending to small businesses. The result is less capital to support struggling small businesses and boost the economy.

Here's a quick look at the facts about Small Business Loans at the Bank of America.

FACT: Bank of America Cut Lending to Small Businesses AFTER Taking Billions in Bailout Money to Stimulate the Economy - Latest Cuts Came on Top of Years of Decreased Lending

• Not only did Bank of America cut small business lending after taking billions in bailout funds, but the bank lent out significantly less money to small businesses than many of its top competitors - under the SBA 7(a) program the Small Business Administration's main loan program.
• The average loan amount was comparatively small. In FY 2008, the average loan amount for all SBA 7(a) lenders was $182,492. At Bank of America, the average loan amount was only $31,032.

FACT: Bank of America Cut SBA 7(a) Loans by 90 percent -- Twice the National Average

• Over the past two years, Bank of America's small business lending has decreased from more than 10,000 SBA 7(a) loans to fewer than 500. The greatest decline occurred after the bank received bailout funds last October -- money intended to jump start lending.
• In the first seven months of FY 2009 (October-April), the bank made only 241 loans through the SBA 7(a) program, worth a total of $10 million. In the same time period last year, the bank made 3,053 SBA 7(a) loans, worth $92 million.

FACT: Bank of America Cut Small Business Lending in States

• In FY 2007, Bank of America lent more than $335 million to small businesses in 44 states through the SBA 7(a) program. In the first seven months of FY 2009, the bank cut SBA 7(a) lending completely in 14 states.
• Cuts were most severe in states like Arkansas, where the bank made 49 SBA 7(a) loans worth $1.4 million in FY 2007, and made zero in the first seven months of FY 2009, and in three New England states (Maine, New Hampshire, and Rhode Island), where the bank went from making 109 loans worth $2.8 million in FY 2007 to zero to date in FY 2009.

FACT: Bank of America Pulled a Bait and Switch, Shifting Small Business Portfolio from Traditional Loans to Higher-Interest Credits Cards

• Instead of lending money to small businesses through SBA loans (with typical interest rates of 7-9%), Bank of America appears to be moving its small business clients to higher-interest credit card loans. (Credit cards typically charge small businesses 16-23%.)
• In 2007 (the most recent year for which this data is currently available), more than 75% of Bank of America's small business loans were made through FIA Card Services, its credit card division. Bank of America acquired FIA (previously called MBNA) in January 2006. FIA's small business loan volume increased nearly 400% between 2006 and 2007. The $6.3 billion increase in the bank's total small business lending between 2006 and 2007 came almost entirely from the bank's credit card division.

FACT: Bank of America Hurt Small Businesses and Shareholders with Risky Lending Practices

• Bank of America shifted its loan portfolio - favoring "Express Loans" with lower underwriting standards - despite the fact that these loans are guaranteed by the SBA at a lower rate and have been found more likely to default. From FY 2006 through FY 2008, more than 95% of Bank of America's SBA 7(a) lending was through the SBA Express program, saddling shareholders and communities with unnecessary risk.
• Reminiscent of the mortgage crisis, small business defaults have risen. In fall 2008, Bank of America announced that its small business default rate had doubled to match the national rate and possibly exceed it, going from 6% in 2007 to 12% (annualized) in 2008. Bank of America's Chief Financial Officer Joe Price described the bank's small business lending as performing more like consumer debt than commercial lending. CEO Ken Lewis more bluntly called Bank of America's SBA loan portfolio "a damn disaster."

Read and download the full report "Small Business Lending at Bank of America" here.

On legislation to help small biz, U.S. Chamber is "Chamber of No"

The U.S. Chamber of Commerce claims to defend the interests of small businesses, but even a quick examination of their legislative record shows them opposing bill after bill that may help small businesses--and consistently siding with big corporations. From legislation that would ease the burden of credit card terms for small businesses, to bills that would stop outsourcing, the U.S. Chamber has proven to be the "Chamber of No." Here's our list of the top five worst Chamber policies for small businesses.

1) U.S. Chamber of Commerce Sided with Big Credit Card Companies over Small Business Owners. Small business owners are increasingly likely to rely on credit cards to finance their business operations, yet- like the rest of us- are increasingly finding the terms of their card agreements less favorable. The U.S. Chamber sided with big credit card companies over small business in the Credit Cardholders' Bill of Rights Act of 2008--legislation to provide common-sense regulations on credit.

Small Business Owners Rely On Credit Cards, Get Hurt By Credit Card Companies. A recent survey by the National Small Business Association found that 59 percent of all small businesses used credit cards to fund capital purchases and that 34 percent of small businesses held over one quarter of their business debt in credit cards. Moreover, 75 percent reported that the terms of their credit cards had become less favorable in the last six months.

2) U.S. Chamber of Commerce Sided with Big Oil Over Small Businesses on Bill to Stabilize Gas Prices. Despite the fact that gas prices were skyrocketing, the U.S. Chamber opposed the Consumer-First Energy Act of 2008, legislation designed to stabilize gas prices during a period of meteoric price increases. The bill-- which would have created a special supplemental 25 percent tax on the windfall profits of major oil and gas companies, suspended the filling of the Strategic Petroleum Reserve, punished price gouging, and limited oil market speculation-- would have gone a long way to help America's small businesses, who are disproportionately sensitive to fluctuations in energy prices and price gouging at the pump.

3) U.S. Chamber of Commerce Opposed Legislation to Help Steelworkers Keep and Create Jobs in the U.S. The Chamber showed its true colors when it opposed "American-made" provisions in the aptly named "American Steel First Act," which would require infrastructure projects receiving federal funds to use American-made steel. The requirement would help domestic steel producers enjoy the benefits of federal stimulus funds, keeping much-needed jobs and commerce in the United States. Although mammoth companies like GE and Caterpillar get half or more of their revenue from exports, the same is emphatically not true of many small, local businesses and steel producers who deserve to benefit from federal spending before foreign counterparts.

4) U.S. Chamber Opposed Legislation to Stop Outsourcing of Call Centers
The US Chamber has continually supported the out-sourcing of jobs, despite small business support for legislation like the Call Center Consumer's Right to Know Act, an anti-outsourcing bill that requires call centers to disclose their location during each call. The small companies associated with the National Association of Manufacturers (NAM) and the American Electronics Association (AEA) oppose outsourcing because it allows larger multinational companies to take advantage of cost-cutting mechanisms that are unavailable to smaller businesses, causing small businesses to close.

5) U.S. Chamber of Commerce Opposed Expanding Healthcare for, Low-Income Families and Children- Siding with Big Tobacco Over Small Businesses. By opposing the SCHIP Extension Act of 2007 and the Children's Health Insurance Program Reauthorization Act of 2009, the Chamber again found itself on the wrong side of small business interests. The National Federation of Independent Businesses and the Business Roundtable both supported the SCHIP extension because they believe "small business owners and their employees are especially vulnerable to the weakness of the current system." The Chamber of Commerce, in a letter to Senators Baucus and Grassley, called the bill "a broad-based entitlement program is grossly unfair" particularly for states with "tobacco-based agricultural and industrial activities."

"This isn't an either/or proposition between the interests of workers and the interests of shareholders. That's the old argument. The new argument is that the American economy is not and has never been a zero-sum game. When workers are prospering, they buy products that make businesses prosper." -- President Barack Obama, Jan. 30, 2009

Today, 225 Colorado businesses released a "directory" featuring businesses that support the Employee Free Choice Act.

"It's time our economy worked for everyone again," said Terri Monley, owner of Gate City Moving in Denver. "We have a fundamental economic problem: The middle class is disappearing in America. Congress needs to pass the Employee Free Choice Act because it is one of the most important steps we can take to strengthen our middle class and turn our economy around."

"As a business owner, I believe that workers should have the freedom to bargain with employees for good wages, health care and the opportunity to retire with dignity," said Diana Ortiz, owner of Colorado-based Ortiz Enterprises, LLC, and advisory committee member of Business Leaders for a Fair Economy, a national group of more than 1,000 businesses who have come together to support the Employee Free Choice Act. "Better wages mean that the whole community has more money to spend and to build our economy." Ortiz's business was recently named "Small Business of the Decade" by the Pueblo Hispanic Chamber of Commerce.

The facts speak for themselves: when workers can unite for a voice on the job, they make one-third more in wages and are 52 percent more likely to have health care. More people, with more money, invariably support small businesses. In this economic crisis, we have a duty to support entrepreneurs and start-up companies in building sustainable, long-term successful businesses, rather than being forced to compete against irresponsible companies in an unwinnable, low-wage race to the bottom.

Nearly 40 leading American economists, including Nobel Prize winners Joseph Stiglitz and Kenneth Arrow, have issued a joint statement calling for passage of the Employee Free Choice Act as a critical step towards rebuilding our economy.

On May 12th, small business owners came together from across the state to attend a forum sponsored by New Hampshire's Change that Works to discuss the rising costs to small business from health care.

With healthcare premiums almost 20% higher than those paid by large businesses, small business owners are hit the hardest by our current health care crisis. It's not fair that the hard-working, community oriented owners of small business should have to face the choice between taking a pay cut, or losing a long time employee because they can't afford to pay all their employees heath insurance. As the backbone of New Hampshire's economy, providing access to quality, affordable heath care coverage is a must in order for these hard working men and women to continue to have success running their business.

An article by Bill Hurley, in a recent edition of the Portsmouth Herald, told an all-too-common story. Hurley, the owner of the small business Infinite Imaging, speaks in the article of the tough choices faced by his business due to the rising cost of his and his employees' health care:

This recession has been tough on everyone, but out-of-control health care costs have made it even worse. Last year alone, my health care costs increased 15 percent, ratcheting up my annual health care bill to $15,000 just to cover my family.

According to some studies I have read, it is expected that these costs will increase another 80 percent by 2016. If health care costs keep going up like this, how can small businesses succeed?

We have had to make cutbacks and tough choices. This year, the entire company -- including me -- took a pay cut so that we could avoid having to lay anyone off. The company covered our employees' health insurance premium increases because they wouldn't have been able to afford coverage otherwise.

This October, when I find out how much premiums will increase next year, I don't know what I'll do. Will I be faced with the heart-wrenching choice between keeping a valued employee and out-of-control health care costs? These are choices that we shouldn't have to make year after year.

Bill Hurley and others like him shouldn't be forced to make those kind of decisions. He and other small business owners at the forum signed pledges stating their commitment to health care reform this year. Commitment that involves:

• Quality, affordable health care for all: Every person in America should have access to affordable coverage that will cover what they need to keep them healthy, and protect families and businesses from skyrocketing costs.
• Shared responsibility: Business, government, and individuals need to come together and share the responsibility for solving our health care crisis.
• Public health insurance option: The option of a public health insurance plan is necessary to ensure appropriate coverage, foster choice and competition, and reduce costs for everyone.

Thanks to the attendance of these small business owners, Senator Shaheen and Gregg will know that hard working men and women of New Hampshire are committed to doing what it takes to reform our health care system, and be a part of the change that provides quality, affordable health care for all us.