Fact Check: Obamacare forcing small businesses overseas
September 25th, 2013
04:18 PM ET
9 years ago

Fact Check: Obamacare forcing small businesses overseas

Obamacare is forcing small businesses overseas.

Sen. Ted Cruz, R-Texas, during September 24 speech on Senate floor:
"I would ask you to take each of those small business owners and multiply it by the millions of small business owners across this country. The millions of small business owners who aren't growing, the millions of small business owners who are forcing their employees, forcibly reducing their hours to 29 hours a week, the millions of small business owners who are considering moving operations overseas or have already because of Obamacare."

"I would like to point out to you that if it weren't for Obamacare every small business that has an opportunity to expand right now and that isn't expanding because of Obamacare that is a job you are not able to get. If you want to know why the job economy is so bad, why there are so few jobs, why we have got the lowest workforce participation in decades in the United States? Well, small businesses generate two thirds of all new jobs in the economy and small businesses have been hammered under Obamacare unlike ever before."

The employer mandate, which requires firms to start providing insurance in [2015], pertains only to companies with at least 50 full-time workers.

As of 2010, there were roughly 5.7 million small businesses, defined as those with fewer than 500 workers. Some 97% of them have fewer than 50 employees. That means Obamacare's employer mandate applies only to 3% of America's small businesses. That's about 200,000 companies.

The data shows that only a tiny sliver of the nation's small businesses face the new rules - and even fewer face any changes. Of the country's 6.5 million workplaces, only 1% must actually start providing insurance [in 2015].

CNNMoney: The overblown Obamacare myth about small business

(***NOTE: This article predates the delay of the employer mandate; In July, the White House announced that it would delay the employer mandate until 2015)

False. There is no doubt that Obamacare has had some impact on small business hiring. But Cruz wildly overstates the case.

Filed under: Fact Check Obamacare • Health care
soundoff (25 Responses)
  1. Sniffit

    Yes, but doesn't everyone know that wild-eyed hysteria based on gross misrepresentations and blatant hyperbole are is the foundation of good governmental decision-making?

    Fact: GOPers/Teatrolls hate American companies hiring foreigners unless they're the ones doing the hiring.

    September 25, 2013 04:27 pm at 4:27 pm |
  2. Sniffit

    "If you want to know why the job economy is so bad, why there are so few jobs, why we have got the lowest workforce participation in decades in the United States? "

    Then look at middle-class salary trends over the past 40 years and compare them to the salary trends for management/executive and CEO-level employees. Then, look at the trending graphs for the wealth gap. Then, understand that supply side economics is a LIE and that the biggest thing hampering economic growth and job creation in this country is the redistribution of wealth upwards and the DEMAND VACUUM that it has created. The virtuous cycle has been mercilessly crucified by the right's push for plutocracy over the past half century. THAT is what lies at core of the entire problem.

    September 25, 2013 04:31 pm at 4:31 pm |
  3. somebody

    Yet another GOP talking point that is a lie. Thanks CNN for finally pointing out some of these.

    September 25, 2013 04:31 pm at 4:31 pm |
  4. Data Driven

    FACT! - Obamacare doesn't force small businesses to go overseas!

    September 25, 2013 04:33 pm at 4:33 pm |
  5. Name jk. Sfl. GOP conservatives,the garbage of America.

    What else is new , the GOP has been lieing and trying to scare people sence day one to protect their corporate cronies. Cruz Rubio and lee are out in their next election along with the rest of their teaparty zombies!!!!!

    September 25, 2013 04:39 pm at 4:39 pm |
  6. freedom

    First of all, Cruz did not overstate this. And second of all, I never read on CNN that Obama "wildly overstates" anything! And he does – all the time – from his podiums – with his mouth to the microphone. Total double standard.

    September 25, 2013 04:41 pm at 4:41 pm |
  7. Dutch/Bad Newz, VA -aka- Take Back The House -aka- No Redemption Votes

    CNN, give us your definition of what a "small business" is.

    September 25, 2013 04:43 pm at 4:43 pm |
  8. Boomer in Mo

    Why would a plumber relocate overseas. Aren't his customers here? Use some common sense people. My husband's small business is staying put and now he can get health insurance as he has a pre-existing condition and hasn't even been able to get a policy quote.

    September 25, 2013 04:49 pm at 4:49 pm |
  9. Sniffit

    "Cruz did not overstate this."

    Riiiight, "MILLIONS!!!!!!" when there's only about 200,000 that fall into the category of being subject to the ACA mandate in the first place. Nope...no overstatement there.

    September 25, 2013 04:52 pm at 4:52 pm |
  10. sonny chapman

    And where do those foreign workers get their health care? Their GUVMENT.

    September 25, 2013 04:57 pm at 4:57 pm |
  11. Brian

    OMG liberals!! the bottom line of the article "There is no doubt that Obamacare has had some impact on small business hiring" so even if one business went over seas doesn't that make this TRUE? Weather or not he embellished or not is not relevant. If a food or drink or activity gave one person out of a million a fatal disease, they would still say that "this product may cause whatever" and it would be a true statement! Go ahead, keep making excuses for this con-man in the white house. Keep drinking the kool-aid. You need to actually research, and view the other side of the argument for yourselves. THIS BILL IS BAD!! There are better ways to fix this.

    September 25, 2013 04:58 pm at 4:58 pm |
  12. Gurgyl

    This is silly news. I have a small business–it is right here in USA. I KNOW ALL ARE HERE.

    September 25, 2013 04:59 pm at 4:59 pm |
  13. Name jk. Sfl. GOP conservatives,the garbage of America.

    Hey freedom ,I'd take CNN word over a teaparty fool any day ,GOP moron!!!!!

    September 25, 2013 05:00 pm at 5:00 pm |
  14. Steve, New York City

    Among other conclusions, one obvious one is that Senator Cruz is not very bright. He and some others on the far right need to urgently heed Governor Jindal's warning about not being the stupid party. In several ways, Governor Jindal represents the rational right.
    It also makes me wonder - issues such as healthcare, climate change, etc. are extremely complex. People on the extreme right AND the extreme left have great difficulty acknowleding logical flaws in their own arguments – and many seem to boil down complex issues into simply yes and no's. All goes back to the notion that both extremes attract mentally challeged people that can't deal with too much complexity.

    September 25, 2013 05:13 pm at 5:13 pm |
  15. CAWinMD

    Brian - you say there are better ways to fix this bill. Then why are Republicans only talking about repealing the bill? Where are their suggestions to improve the bill? All we hear about is getting rid of it. Further, by your logic, if one person is helped by the ACA, then they can claim that it is beneficial. Well, millions of people are being helped by this bill. It is a good bill. It could be a better bill, but Republicans have to want to help. Shoot, even if they said "get rid of the ACA in favor of this omnibus bill that would achieve the same ends better" that would be progress. But they can't even bring themselves to do that, because Republicans don't have a clue how to do that.

    So spare us the kool-aid comments - you're just drinking a different flavor.

    September 25, 2013 05:23 pm at 5:23 pm |
  16. Sniffit

    "Weather or not he embellished or not is not relevant. "

    It's entirely relevant. Or do you base all of your household purchasing on WHETHER a product has a 1 in 6,000,000 failure rate?

    September 25, 2013 05:39 pm at 5:39 pm |
  17. Wake up People!

    Front page of the Detroit News says:

    Healthcare rates lower than expected under the ACA. (That's Obamacare for the not so swift)

    September 25, 2013 06:04 pm at 6:04 pm |
  18. Becker

    Companies shortening work hours in the States is the major impact. Just look at the unemployment figures for teenagers that need work. Most Americans even if they do despise Obamacare find work arounds for off shoring employment.

    September 25, 2013 06:07 pm at 6:07 pm |
  19. rs

    Two for two. The GOP is shown to be a bunch of feckless liars on the ACA.

    September 25, 2013 06:07 pm at 6:07 pm |
  20. Mike

    Small business sends jobs overseas. LOL.

    September 25, 2013 07:08 pm at 7:08 pm |
  21. vikingwoman

    Ted Cruz's assertion would be a funny joke (bada boom), if he wasn't serious & might even believe it (doubt it)! If a Small Biz w/50 employees can't afford Obamacare, who in the world would believe they have the capital to move their operations over seas! Small businesses are often mom & pop shops that serve their neighborhoods! I can't imagine even Cruz believes this blatant lie! Good try, though, dude!!

    September 25, 2013 07:12 pm at 7:12 pm |
  22. tiscali.it

    the fact that the GOP are trying so hard to stop it convinces me its a great bill. When was the last time the GOP was looking out for anyone but themselves?

    September 25, 2013 07:22 pm at 7:22 pm |
  23. sally hodges

    What "forces" businesses overseas is shareholder greed. Those fractions of a percent of profit margin is the root cause. It has nothing to do with competition because companies have moved offshore in their years of highest profits.
    It's just greed and whining about having to pay for health insurance for your employees is a clear indicator of this.

    Small companies, like large corporations, have to be socially responsible. If you look at all SuperFund sites in America, most of them are NOT owned by large corporations.

    I'm tired of the small business whine spewed forth by the GOP. The fact is, small businesses are not the ones who benefit from lower taxes and subsidies. The big corporations get 97% of the pie.

    September 25, 2013 08:36 pm at 8:36 pm |
  24. winkie

    Businesses large and small have been offshoring jobs since before "Obamacare" was even heard of. I know – mine went to China in 2007 and I know of a ton of them that went to Mexico after NAFTA went into effect. That's one of the primary reason for the unemployment rate these days, those jobs leaving and not coming back. Obamacare had ZERO to do with it. GREED was the reason.

    September 25, 2013 09:43 pm at 9:43 pm |
  25. Name Uche Agonsi

    GOPers have made cheaper and more frequent. American job moves to other countries were less under Obama than under GWD. But how many business-friendly countries in the world today do not operate healthcare system for their poor. If there is anything thats frustrating jobs in US, its either legislative gridlocks or sequestration, or both, among other instalments by the GOPERS.

    September 25, 2013 10:04 pm at 10:04 pm |