- The Washington Times - Wednesday, February 22, 2012

As the Supreme Court prepares for an epic legal clash next month on the constitutionality of President Obama’s health care law, Dan Danner admits to a certain feeling of vindication.

The president and CEO of the National Federation of Independent Business (NFIB), the nation’s leading small-business lobby, said his group launched its legal challenge to the law two years ago, at a time when other business interests and critics of the health law told him the effort was a waste of time.

Now the NFIB and 26 states are the lead plaintiffs in the case to overturn Mr. Obama’s signature domestic achievement, and Mr. Danner said in an interview Wednesday he sees mounting signs that a centerpiece of the law - requiring all individuals to purchase health insurance - will face a tough reception before the high court.

“I can tell you at the time, in 2010, most of our friends in the business community and some of our friends on [Capitol Hill] and some of our not-friends on the Hill were fairly unanimous that it was a stupid thing to do, ‘This isn’t going anywhere; this is folly; it’s all politically motivated,’ ” Mr. Danner said in an interview with editors and reporters at The Washington Times.

“I can tell you today that most of them are no longer saying that.”

In a wide-ranging interview, the NFIB head said that many of his members say they have yet to see or feel the effects of the recent economic rebound; that the Obama administration’s regulatory moves on the labor relations, taxes and the environment have created great uncertainty for small business; and that small businesses are finding it hard to get their voices heard in the election-year debate.

Mr. Danner ensured the NFIB would become a prominent face in the battle over the Affordable Care Act with the decision to join forces with state attorneys general to sue over the mandate shortly after Congress passed the law in 2010.

He said he was pleased to be in the epicenter of a landmark Supreme Court case expected to draw crucial lines about the reach of federal power. But he said the legal battle began in part because the president and his top aides are out of touch with the pressures facing small-business owners, creating new regulatory and taxing hurdles despite Mr. Obama’s recent promises to help small businesses succeed.

Add to that a continuing pessimism among business owners about the economy, and Mr. Danner painted a grim picture of the business environment for small employers, despite recent headlines of a slightly less gloomy economic picture.

“I don’t think the administration has any clue who small-business people are, and what they do, and what they’re about,” Mr. Danner said.

Noting the lack of small-business owners in the administration or on advisory panels, Mr. Danner said, “I think who’s at the White House, who’s on the visitors list, who’s on the party list, it’s primarily large corporations, unions and academics,” Mr. Danner said. “Small businesses certainly aren’t at that party.”

Mr. Danner also criticized a proposal Mr. Obama touted for small businesses last month to eliminate capital-gains taxes on stock purchased from small businesses, a proposal he called “ridiculous” because small businesses typically do not sell stock on the market.

“Our guys don’t issue stock,” he said. “If they do, it’s closely held family kind of stock. … To me, it says they just don’t get it. They don’t get who small businesses on Main Street are.”

Mr. Obama turned a fresh focus on small businesses last month, elevating Karen Mills, administrator of the Small Business Administration, to Cabinet-level status. And in his State of the Union address, he promised to roll back regulations and foster an environment hospitable to entrepreneurs.

“We should support everyone who’s willing to work and every risk-taker and entrepreneur who aspires to become the next Steve Jobs,” Mr. Obama said. “… Most new jobs are created in startups and small businesses, so let’s pass an agenda that helps them succeed.”

But Mr. Danner said the policies haven’t matched the rhetoric. He noted that Mr. Obama’s new proposal to cut corporate taxes to around 25 percent would not help many small-business owners who operate under a different corporate structure.

“If you’re a small business, and you’re paying close to 40 [percent] and GE is paying 25 [percent], you don’t think that’s a very fair deal, and you’re not very happy about that,” he said.

Despite talk of an improving economy, NFIB members said in a recent survey that they expect economic conditions to worsen before they improve. They also indicated that their No. 1 concern is uncertainty about the future - a fear Mr. Danner said has been greatly augmented by looming new requirements as the president’s health care law is implemented.

While the Affordable Care Act requires businesses to provide affordable coverage for their employees, it includes a number of provisions to assist smaller businesses who find it harder to pay for insurance. Tax credits to purchase coverage are available for businesses with fewer than 25 employees, and most businesses with fewer than 100 employees may shop for cheaper plans on insurance exchanges.

But Mr. Danner was skeptical of the provisions, saying businesses are still waiting to find out how the exchanges will run and noting that the tax credits will eventually be phased out.

Despite his opposition to most of the health care law, and his confidence that the Supreme Court will strike down the individual mandate, he was less confident that the court will agree with the NFIB and the states that the entire law should be thrown out, the so-called “severability” issue.

“I think we’re much more optimistic on the unconstitutionality of the individual mandate, and I think we would probably agree with most of what’s been written that severability is probably a higher hurdle and won’t be as easy,” he said.

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