A Strong Middle Class Blog

Blogging To the Middle: Rising Health-Care Costs and Small Businesses

Posted by Terrell McSweeny on July 10, 2009 at 1:28 PM EDT

Mary Anne Murray is a small-business owner in Newark, Delaware. Her home care company serves hundreds of senior citizens providing home health-care services. As a small-business owner, Mary Anne faces the challenge of providing health-care insurance to her employees in the face of rising health-care costs. Currently, Mary Anne is able to cover her full-time employees but worries how rising health-care costs will affect her workers and company’s competitiveness.

Across America, the Middle Class Task Force hears stories just like Mary Anne’s. Small businesses are facing higher costs, fewer options, and decreasing coverage. As a result, employers are forced to make tough choices between offering health insurance to their employees or staying competitive in a 21st-century economy by cutting back on health insurance for their workers or even getting rid of it altogether.

Today, the Middle Class Task Force hosted a roundtable discussion on the rising costs of health care for small-business owners and employees and heard first-hand accounts of the tolls that high costs are taking on middle-class families across America. Vice President Biden and Secretary Sebelius led the discussion with small-business owners and employees.

(Vice President Joe Biden and Secretary of Health and Human Services Kathleen Sebelius listen Perry Gaskins, a small business owner talks about rising health insurance costs his company is facing, during a healthcare roundtable in room 350 of the EEOB, Friday, July 10, 2009. Official White House Photo by David Lienemann)

The Middle Class Task Force today also released a report examining how the current health-care system has failed the middle class and why we must enact health-care reform this year.

The status quo is unsustainable. We must enact health-care reform that will help Mary Anne and the thousands of small-business owners like her by giving them access to a health insurance marketplace—an exchange—where they will be able to compare prices of health plans and choose the one that works best for them. In order to market a plan in the exchange, insurance companies will have to comply with its rules: No denial of coverage for pre-existing conditions; limits on premium variation related to age; fair prices, for decent benefits; and guaranteed renewal of coverage. For small businesses, administrative costs will be lower and plans will be more affordable.

As health-care reform moves forward, President Obama, Vice President Biden, and other task-force members will work to ensure that small-business owners and employees aren’t bogged down by the burden of high health-care costs. President Obama and Vice President Biden believe that no employers should have to choose between staying competitive and providing health care for their employees, and that’s why this administration is working to make sure that small-business owners like Mary Anne don’t have to make that choice.

Visit the Middle Class Task Force website and provide us with your story about how rising health-care costs have affected your family.

(Vice President Joe Biden is photographed by a an attendee of the healthcare roundtable in room 350 of the EEOB, Friday, July 10, 2009. Official White House Photo by David Lienemann)

Terrell McSweeny is Domestic Policy Advisor to the Vice President.

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Health Reform and the Middle Class

Posted by Jesse Lee on July 10, 2009 at 11:37 AM EDT
[UPDATE: Read more from Terrell McSweeny, Domestic Policy Advisor to the Vice President.]
As the Vice President was beginning his roundtable with HHS Secretary Sebelius and White House Health Reform Director DeParle, the Middle Class Task Force was releasing its new report : "Why Middle Class Americans Need Health Reform."
- Read the full report (pdf)
It may seem to go without saying that the middle class needs health reform as much as anybody, but the report reveals statistics that put the urgency of that need in a new, harsh light. The report’s analysis of diminishing coverage for the middle class is a good example:

Diminishing Coverage

Middle class Americans and their families are facing a growing challenge in obtaining or maintaining their health insurance coverage.
- Over a quarter of the uninsured are middle class Americans.
- The number of non-elderly middle class Americans who are uninsured has grown over time, from 11.1 million in 2001 to 12.5 million in 2007. Looking forward, without health reform, the number of middle class Americans without health insurance could be as high as 18.2 million in 2019.
- In part, high rates of the uninsured among middle class Americans arise because middle income workers have a higher chance of not being offered health insurance through their job. In fact, of the 10.7 million non-elderly adults in the middle class bracket who are uninsured, nearly 90 percent are employed.
- Nearly one in four middle class employees are not offered health insurance by their employers – and of those that are not, more than half remain uninsured. In comparison, only one in six high-income employees are not offered health insurance by their employers.
- Part of the reason that middle income Americans are less likely to be offered coverage is because they are more likely to work in small businesses – 53 percent of middle income Americans work in small businesses, compared with 46 percent of higher income Americans. Of those who work in small business, 40 percent are not offered insurance.
(Vice President Joe Biden and Secretary of Health and Human Services Kathleen Sebelius speak at a healthcare roundtable in room 350 of the EEOB, Friday, July 10, 2009. Official White House Photo by David Lienemann)
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Blogging to the Middle: Simplifying Financial Aid Applications

Posted by Terrell McSweeny on June 29, 2009 at 3:18 PM EDT

Here at the Middle Class Task Force, we have been working on ways to make college more affordable for families in America. The President, the Vice President and the Middle Class Task Force are committed to making sure that every student has the opportunity to earn a college degree.

In April, the Vice President hosted a Middle Class Task Force Meeting on college affordability in St. Louis, Missouri to discuss ways to expand opportunities and help make the dream of a college education a reality for more families. In Missouri, we released a staff report on ways that the administration can work to increase college affordability.

For high school seniors or aspiring college students facing the daunting task of applying for financial aid, the FAFSA (Free Application for Federal Student Aid) form can be a needlessly difficult obstacle on the path to higher education. Previous versions of the FAFSA have included as many as 153 questions, most of which had no relevance to financial aid packages.

On Wednesday, Secretary of Education Arne Duncan – a Task Force Member - followed up on our Missouri findings and announced a shorter, simpler, and more user friendly FAFSA form that will make it easier to apply for financial aid. Starting this summer, students will be able to access the new web based FAFSA that dramatically simplifies and shortens the application form, and by next January, the FAFSA application will be streamlined with the IRS for a one stop, easy and pain free application.

The new version will make it easier and less intimidating to apply for aid, and will increase access for hundreds of thousands of students who are eligible, but do not apply for aid.

Simplifying the financial aid application is a policy that members of the Middle Class Task Force believe will help families benefit from important resources to cover the cost of college. We are continuing to work with Congress, the Treasury Department, the Department of Education, and the Administration to strengthen and affirm the opportunity for every student to pursue higher education.

As always, please continue sharing your ideas by visiting the Middle Class Taskforce Website.

Terrell McSweeny is Domestic Policy Advisor to the Vice President.

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Chains in Command

Posted by Jared Bernstein on June 23, 2009 at 11:00 AM EDT

Ed. Note: The Middle Class Task Force is meeting today on the future of American manufacturing in Perrysburg, Ohio.

When we think about manufacturing in America, most of us probably picture a big factory churning out cars or refrigerators. But there’s another side to manufacturing in America: the supply chains that provide these end-users with the inputs they need to make the final product.

In fact, there are more workers at the suppliers for big companies that make cars, or appliances, or wind turbines than there are at the factory that actually puts the thing together. In the case of autos, suppliers employ 3-4 times the number of workers at the big factory at the end of the line.

So supply chains are a big deal, and when the big factories hit hard times, the pain is amplified through this chain of suppliers. These are often good jobs too, so this is an important issue for the Middle Class Task Force.

The good news here is that, while some segments of the manufacturing industry, like autos, are contracting, others, like wind and solar production, are expanding. And these folks need supply chains too.

And while these manufacturing subsectors have been doing relatively well for a while, their growth is being accelerated by the Recovery Act, which helps to generate some pretty hefty demand for products like renewable energy, advanced battery technology, smart grid components, and advanced medical devices.

So we’re in that space where crisis equals opportunity, but we need to make sure that suppliers have the information they need to make the necessary transition. They don’t always know what these new, growing industries are, what kinds of parts they need, and whether those parts are a good fit for the equipment and the skilled workforce the suppliers already have.

Another problem is that, even with the right equipment, suppliers can’t turn on a dime. They’ll often need to retool existing equipment (e.g., they might still make transmissions/gearboxes, but for a turbine instead of a car) and perhaps even learn whole new technologies.

That’s where the Commerce Department’s Manufacturing Extension Partnership and its National Innovation Marketplace (NIM) come in. The task force and our friends at Commerce see the NIM as a great solution to this problem, but it’s really just a pilot project now. As we’ll announce today in Perrysburg, Ohio, we plan to bring it up to scale.

The NIM helps manufacturers figure out what new products they can make and whom they can sell them to. It helps connect suppliers, who have often depended on one customer for years or decades, to large manufacturers in new industries who can become their customers of the future.

These suppliers have valuable, advanced equipment and some of the most skilled manufacturing workforces in the world. In some cases, all they need is information. In other cases, they might need to craft a new business plan, involving new capital, new tools, and new technologies. Oftentimes their workers will need new skills.

This isn’t a huge, new, expensive program, but it doesn’t have to be, because once we help manufacturers get the information they need, they’ll be able to take advantage of new opportunities and thrive in new industries. By helping our manufacturers make that shift, from aging industries into vibrant, growing manufacturing subsectors, this program will help put them on a self-sustaining path, building strong supply chains to support the new economy and creating good jobs along the way.

Jared Bernstein is Executive Director of the Middle Class Task Force and the Vice President's Chief Economist

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Middle Class Task Force Meeting: Promoting Manufacturing in America

Posted by Jesse Lee on June 19, 2009 at 6:30 PM EDT

On Tuesday, June 23rd,Vice President Biden and the Middle Class Task Force go to Perrysburg, Ohio to promote one of our economy’s key sectors: manufacturing. They will be visiting a solar plant that’s making solid inroads into the new, clean economy, where the Vice President will host a discussion on the present challenges and future opportunities facing the sector.

The discussion will include both experts and the public, and will focus on the state of manufacturing today, and how the administration is supporting manufacturing communities during tough economic times. As the President continues to develop and lay out his vision for an American economy fit to lead the world through the 21st Century, the Vice President will talk about the integral role manufacturing will continue to play. Joining Vice President Biden will be Secretary of Commerce Gary Locke, Ohio Governor Ted Strickland, and Ed Montgomery, who has been touring the Midwest and working with some of the hardest hit workers, as Director of Recovery for Auto Communities and Workers.

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Double Savings: Save On Your Energy Bill And On Taxes

Posted by Terrell McSweeny on June 3, 2009 at 6:45 PM EDT

Making your home more energy efficient is now an even better deal – thanks to expanded tax credits for energy efficient home improvements that were passed in the Recovery Act. This is a great concept: you get a discount through a tax credit on certain products now, and you save additionally down the road on energy costs as well.

Here’s how it works: you can get a tax break for installing energy-efficient technology - like windows, furnaces, air conditions, heat pumps, doors, insulation - of up to 30 percent of the product cost or up to the $1,500 maximum.

Savvy homeowners are taking advantage of this new incentive to go green. In an article in the Knoxville News Sentinel, Larry Cooper from West Knoxville recently explained:

"Our home's HVAC unit was 21 years old and we knew sooner or later it would go out. Rather than it giving out on us in the middle of the summer, we took a proactive step to take advantage of the tax rebate, save energy and replace it at a time that's convenient for us."

Approximately 30 percent of Mr. Cooper’s unit was paid for by the tax credit and because the system is about 25 percent more efficient on heating and cooling he will also save on his energy bills.

This is just one example of how the energy efficiency tax credits can help save middle class families money on energy bills and on taxes. About 21 percent of our country’s energy is used in residential homes -- around 75 percent of which could be made more energy efficient. The potential savings is substantial.

To be eligible for these tax credits save your receipts and the Manufacturer’s Certification Statement for your records when filing your 2010 taxes. Check out the details.

For additional information about home improvement tax credits, visit the Energy Department.

Terrell McSweeny is Domestic Policy Advisor for the Vice President.

Learn more about Energy and Environment, Taxes