▶ 0:16:38Chair Cassidy: The health, education, labor, and pensions committee will please come to order. The american workforce looks different than it did 10, or even five, years ago. Let alone 100 years ago when some of our labor and employment laws were first enacted. There are more than 27 million americans working as independent contractors, having the flexibility to make their own schedules to decide when, where, and how they want to work.
▶ 0:17:05Chair Cassidy: More and more, I'm hearing from people back home. They want jobs that offer this type of freedom. I got picked up by an uber or lyft at the new orleans airport. He just moved from san francisco to new orleans. Two great cities, but he chose the best of the two. He called lyft and said I am moving to new orleans. He showed up and went immediately to work.
▶ 0:17:35Chair Cassidy: Because he worked independently he had the ability to move place to place without losing the source of income. The other guy is a chemical engineer. He said he would rather be a lyft driver. He said I'm tired of the cubicle. I take the car fishing on my day off. I can take a day off whenever I want a day off. He stays with his chemical engineering job because he wants the benefits. He would rather have the freedom and the benefits. I get that.
▶ 0:18:06Chair Cassidy: People need a 401(k) and health insurance. Whether it is a hairstylist, musician, artist, in my state a swamp tour guide, independent truck driver, none of them should have to choose between a flexible work schedule and having a 401(k) or health coverage. Congress, we, should modernize labor laws to catch up with the 24th century and meet the needs of today' as workers. Our labor laws are about 100 years ago.
▶ 0:18:34Chair Cassidy: That prevents the independent worker from receiving the benefits that they would have if they choose to be a flexible independent worker. We've heard from companies that want to give benefits to contractors but they don't because of the fear of misclassification lawsuits. I joined senators paul and scott in releasing a legislative package modernizing federal law, giving power back to the workers.
▶ 0:19:03Chair Cassidy: This pro-worker package establishes a safe harbor so that a worker can keep his/her independent status while unlocking benefits for themselves and their families. This strengthens workers' flexibility, makes it clear what bleakley constitutes an independent contractor, the package increases workers' access to health care and retirement accounts like solo 401(k)s that are already available.
▶ 0:19:36Chair Cassidy: I appreciate senator paul and tim scott for their leadership. This is not partisan. States with the democratic governors like pennsylvania, maryland, and wisconsin, red states like georgia, utah, and tennessee are all working on pilot programs or legislation. While these concepts are being vetted in laboratories and democracies, outdated federal law still brings the threat of lawsuits for -- lawsuits preventing workers nationwide from accessing benefits.
▶ 0:20:02Chair Cassidy: It is time for those who wish to be independent contractors to not only have the flexibility and independence but financial security. I urge all of us, democrat and republican, to work together to achieve this goal as democrats and republicans on the state level or doing the same. I thank the witnesses for being here and presenting your position. I look forward to our discussion on how we can empower workers to succeed.
▶ 0:20:28Sen. Sanders: Thank you, Mr. chairman I don't have any good uber stories. What I do know is that in america today we have more income and wealth inequality then we have ever had in the history of the united states. We have a situation with the top 1% owning more wealth than the bottom 93%.
▶ 0:20:50Sen. Sanders: Ceos of large corporations now earn 350 times more than their average workers. According to the rand corporation, not a socialist operation, over the past 50 years 79 trillion dollars in wealth has been redistributed from the bottom 90% to the top 1%.
▶ 0:21:17Sen. Sanders: Today, quite unbelievably, the average american worker makes less, less, in real inflation accounted for dollars that he or she did 52 years ago. That is where we are right now. There are a lot of reasons for that, but we aren't going to get into that today.
▶ 0:21:37Sen. Sanders: One of the more important reasons why the working class in america is worse off than they were 50 years ago, despite huge increases in worker productivity, is the fact that corporate america has been waging a war against the trade union movement for decades. According to the latest gallup poll, 70% of the american people support. Labor unions yet only 6% of private-sector sector workers belong to one.
▶ 0:22:07Sen. Sanders: All over the country people want to join unions and 6% are in unions. Unfortunately, Mr. chairman, I'm afraid the bills we are considering today would make a bad and unfair situation even worse. These proposals would make it easier for large corporations to mis-classify workers as independent contractors in order to avoid paying them decent wages and decent benefits.
▶ 0:22:37Sen. Sanders: These bills are not about giving workers the freedom to work. These bills are about giving corporations the freedom to deny workers the right to form a union. They are about giving corporations the freedom to pay workers poverty wages and denying workers the overtime pay that they are owed. They would give corporations like amazon, uber, and lyft the freedom to exploit their workforce.
▶ 0:23:01Sen. Sanders: The reality is the safe harbor provisions included in this legislation would give large corporations a blank check to break our nations labor laws. A few years ago, I met with truck drivers in california who were misclassified as independent contractors. I will never forget that. A lineup of trucks in the harbor. One truck driver told me that he worked 100 hours a week.
▶ 0:23:27Sen. Sanders: Not only did he not get paid for that work week, he ended up owing the company a check. What was his crime? The trucking company forced him to lease the truck that he was driving for an outrageously high fee, and then fired him for speaking out against that injustice. That's happening all over the country.
▶ 0:23:47Sen. Sanders: Yesterday we heard concerns from senator hawley about how amazon drivers are misclassified as independent contractors and denied the right to form a union even though they wear amazon vests, drive amazon vehicles, deliver amazon packages, and have their work schedule controlled by amazon. Instead of denying workers the right to form a union, we should make it easier for workers to organize and bargain for better wages and benefits.
▶ 0:24:14Sen. Sanders: Virtually every major union in this company supports the probe act, the right for workers to join a union without being illegally attacked by their employer. Mr. chairman, I ask unanimous consent to enter into the record letters opposing these bills from the afl-cio, the national nurses union, the national employment law program, and others.
▶ 0:24:39Sen. Sanders: Instead of denying workers the right to decent wages, we should raise the minimum wage to at least $17 an hour. Instead of denying health care to workers with pre-existing conditions, we should do it every other major country on earth does come a guaranty health care to all people as a human right. If we are serious about addressing the retirement crisis, which is what we're talking about today to some degree, the way to do that is to bring back defined benefit pension plans.
▶ 0:25:06Sen. Sanders: I know that a lot of young people in the audience may not even know what a defined benefit pension plan is. Your grandparents when they went to work if they worked for a large company, when they retired they had a pension plan. They knew exactly how much they were getting for the rest of their lives.
▶ 0:25:26Sen. Sanders: According to the congressional research service, the 19 75, 40 4% of private sector workers in america had a defined benefit pension plan that guaranteed a monthly income in retirement. Today, that figure has dropped to 9%. This is the wealthiest country in the history of the world and we shouldn't have millions of people reaching retirement age with nothing in the bank, worrying about how they will make it through their last years on earth. That has got to change.
▶ 0:25:56Sen. Sanders: That is why I've introduced the pensions for all act this morning. This legislation would provide comprehensive retirement coverage to the more than 56 million working-class americans who currently have no pension plan through their employer. If we can guarantee a defined benefit pension plan for members of congress, not a bad plan, we can and must provide that same retirement security for every worker in america.
▶ 0:26:23Sen. Sanders: That is precisely what this legislation would do and I filed it with the alliance for retired americans and the association of flight attendants. I look forward to hearing from our witnesses.
▶ 0:26:33Chair Cassidy: Thank you. Now we will hear from our witnesses. First I will introduce patrice onwuka, the director for the center for economic opportunity at the independent women's forum. An expert on economic and employment issues and has written extensively on independent work.
▶ 0:26:59Chair Cassidy: She is a senior adjunct fellow with the philanthropy roundtable and a fellow at the steamboat institute. She holds a bachelor's degree in economic employment and a masters degree in international relationships from boston college. We look forward to hearing from you today.
▶ 0:27:17Mrs. Onwuka: Thank you, chairman cassidy, ranking member sanders, members of this committee. I appreciate being invited to speak. I am patrice onwuka at the director for the center for economic opportunity at independent women advancing policies that enhance people's freedoms, opportunity, and well-being with a special focus on women's opportunities. Flexible work through independent contracting is critical to women's labor force attachment.
▶ 0:27:43Mrs. Onwuka: Independent workers value the ability to work for whom they want, when, where, and how they choose. They don't want to lose that flexibility but some of them lack access to benefits like health care by the nature of this 1099 worker arrangement. This creates economic and health vulnerability and this incentivizes entrepreneurship. Congress can overcome some of these challenges by avoiding misclassification and harmonizing the independent contractor definition across federal agencies with a clear and simple test.
▶ 0:28:14Mrs. Onwuka: Also, create a safe harbor so that organizations and companies can offer affordable benefits to independent contractors without triggering misclassification. I will share more today. No worker should be forced into a traditional 9-to-5 job. Freelancing and self-employment are long-standing work arrangements in the united states. An estimated 70 million people freelance. Nearly half of them women. Over 80% of independent contractors said that they prefer their work arrangement over traditional employment.
▶ 0:28:43Mrs. Onwuka: Flexibility is the driving force. People are raising children, caregiving for aging parents, and managing their own health issues. Others find independent contracting in entrepreneurship. Nine out of 10 fema workers who left full-time employment did so because of flexibility. Like jeanette, a long haul freight driver, who serves as the primary caregiver for her father-in-law while working a full-time job.
▶ 0:29:10Mrs. Onwuka: Independent contractors want and in some cases need to remain independent because of their unique circumstances. Today, employer-provided health care is the predominant source of health insurance for working age adults. For many american workers that's fine, but out of reach for independent contractors by law. Even would-be entrepreneurs. 20% say they have abandoned the idea of starting a business because of fear over losing health insurance. Not all flexible workers are the same.
▶ 0:29:40Mrs. Onwuka: According to the irs data, the largest share of independent contractors are supplemental earners. They have full-time jobs elsewhere and may have benefits, employer-provided benefits. Yet there is a meaningful share of independent contractors who don't because they don't have full-time work or a spouse with health care coverage and they would benefit from some option. Mass reclassification is the wrong solution to this problem.
▶ 0:30:05Mrs. Onwuka: Expanding health care benefits by forcing independent contractors to be reclassified as employees is ill and undermines workers' choices, freedoms, and labor attachment for the protect the right to organize act organizes an abc test while the independent contractor will finalized in 2023 uses a multifactor test. Both approaches would effectively reclassify millions of independent contractors against their will. When california did so, we saw the devastating impacts.
▶ 0:30:36Mrs. Onwuka: Self-employment fell 10.6 percent and overall employment fell over 4%. Entire professions were wiped out. Professionals were left with nothing. Jessica tucker, for example, was earning $60 per hour as a transcriber. She says this took it away from me and my family and we have been struggling to put food on the table ever sense.
▶ 0:31:00Mrs. Onwuka: They know the right way forward respecting independent status, staying with the worker instead of with the specific employer, and workers can get access to different benefits. Federal law prohibits companies and individuals from being offered this. A safe harbor in federal law would make it possible for affordable benefits to be offered and support, public support, is a strong. We released polling this year that found 82% of women said that the government should not force people to work nine to five jobs.
▶ 0:31:31Mrs. Onwuka: An even higher share, 87% of women, 83% of adults said the government should make it easier for independent contractors without traditional employment to get access to affordable health and benefits. States are not waiting for washington. We see in utah, pennsylvania, alabama, tennessee, georgia, wisconsin. Key bills that can overcome these hurdles? Unlocking benefits for independent workers act, the modern workers and security act.
▶ 0:32:02Mrs. Onwuka: Policy makers, you have an opportunity to harmonize the independent contractor definition across federal law and even more to unlock affordable business -- for full benefits for independent workers without sacrificing their freedom.
▶ 0:32:16Chair Cassidy: Thank you for staying under five minutes. Thank you.
▶ 0:32:20Mrs. Onwuka: It is the radio work.
▶ 0:32:31Chair Cassidy: Next, we are joined by kim kavin, a freelance journalist who became a full-time freelance writer and editor in 2003. Previously spending nearly a decade as a staff editor for daily newspapers and monthly magazines. Ms. kavin also cofounded fight for freelancers to advocate for independent workers. She writes a sub stack on this issue. Ms.
▶ 0:32:59Chair Cassidy: Kavin is a graduate of the university of columbia school of journalism. Thank you for your testimony.
▶ 0:33:03Ms. Kavin: Thank you, chairman cassidy and ranking member sanders for the chance to speak on behalf of america's tens of millions of independent contractors today. My name is kim cavin from new jersey. My parents were a public school teachers, and I grew up in a proud union household. I earned a journalism degree from the university of missouri and I had staff jobs that you newspapers and magazines until I was about 30 when I realized that some freelancers were earning more than I was.
▶ 0:33:35Ms. Kavin: It's one reason I chose to go freelance 22 years ago. Now, I am 53. Freelancing is one of my best life choices. When gallup says that two thirds of americans want to be their own bosses, I get it. You can count me strongly among the 80% of independent contractors who prefer this way of working. It was alarming to all of us in 2019 when california passed assembly bill 5.
▶ 0:34:02Ms. Kavin: The claim was that a b 5 would stop employee misclassification, but it went beyond that. The regulatory language hurt independent contractors across more than 600 professions. When new jersey tried to copy it , friends and I created a coalition called fight for freelancers. We packed our state house for a standing room only public hearing where we testified for more than four hours straight.
▶ 0:34:31Ms. Kavin: Women, men, people of all races, ages, people who voted for you, senator sanders, and president trump. All of us stood shoulder to shoulder fighting for our freedom to earn a living. We won and ever since we have been fighting to stop this lunacy nationwide. I respect people who choose traditional jobs and unions, but I don't see that the same respect being given to independent contractors.
▶ 0:35:00Ms. Kavin: Instead, we are being forced to fight the pro-act in congress, we had to sue the U.S. labor department, and our friends in california are still suffering. Ab-5 is such a disaster that governor newsom's former deputy chief of staff said that it is truly horrific how many people are negatively impacted by it. The trump administration's deputy U.S. labor secretary called it catastrophic. Members of the california advisory committee to the U.S.
▶ 0:35:27Ms. Kavin: Commission on civil warned that it disproportionately and negatively affects women, immigrants, people of color, and the politically powerless. The california assemblyman is asking the U.S. department of justice to investigate. It is just that policy. California's pace of job creation tanked by 81 percent. Union membership went down. Self-employment for affected professions took a 10.5 percent hit. Overall employment dropped, too.
▶ 0:35:57Ms. Kavin: The state of new jersey is trying to create ab-5 on steroids. Attorneys say that a rule almost entirely eviscerates any chance of being an independent contractor while the state it's self says that the rule won't create a single job. This isn't targeting employee misclassification. This is weaponizing regulatory language to attack independent contractors.
▶ 0:36:24Ms. Kavin: We just had another public hearing in trenton and it was standing room only, again, for more than three hours, in a heat wave. The chief legal officer at prudential with headquarters in newark for 150 years said what is happening may be impossible for them. Aaa's witness said that it could jeopardize public safety by impairing roadside towing. The president of the bistate motor carriers who is sitting behind me today said that this would crippled the port of new york and new jersey.
▶ 0:36:54Ms. Kavin: It went on and on. There was a new talking point. This is not unions versus independent contractors. Just as we see at this table today, every single witness for this in new jersey was employed by unions or affiliated with organizations that have strong union ties. I listed them in my written testimony, and I can provide video.
▶ 0:37:19Ms. Kavin: I detailed how some of their so-called research is highly questionable. Some of it seems purposefully mischaracterized, including in a government report. You will hear a lot today about how employee misclassification is wrong. That's true. It is equally wrong to reclassify independent contractors out of business. We shouldn't need a law to protect our freedom to be our own bosses, but here we are.
▶ 0:37:47Ms. Kavin: Please, pass the modern worker empowerment act and end this madness once and for all.
▶ 0:37:52Chair Cassidy: Next, next witness is kev coleman, a research fellow at paragon health institute. Mr. coleman is an expert on the topic of health insurance, which is a major focus of today's hearing. Provides a critical perspective on affordable health care options for independent workers. He holds degrees from eastern nazarene college, yale university, and duke. I look forward to hearing from you today.
▶ 0:38:21Mr. Coleman: Chairman cassidy, ranking member sanders, members of this committee, my testimony's intent, is intended to briefly illuminate the small business needs for association health plans, ahp's, and of the way that they can satisfy those needs. I am kev coleman, a research fellow at paragon health institute, an independent nonpartisan research organization dedicated to informing government and empowering patients.
▶ 0:38:53Mr. Coleman: Prior to paragon and I worked mostly in tech startups. My testimony represents mine alone. The national federation of independent businesses' 2024 survey reported health insurance cost remains "the number one small business problem," a position it has held since 1986. The past decades have brought increased revenue expense and declining coverage availability for workers.
▶ 0:39:19Mr. Coleman: Almost half of small employers offered health care coverage in 2000. By 2023 that percentage had fallen to 30%. Within this period there was significant decline in the use of small group health insurance.
▶ 0:39:36Mr. Coleman: The national association of insurance commissioners data shows covered lives covered by one third from 2014 to the first year of the affordable care act small group insurance coverage until 2023, the most recent year for their published data. Government data for the same period found small business cost of single coverage rose 35% and family coverage rose by 37%. Ahp's offer relief to the situation.
▶ 0:40:03Mr. Coleman: Technically an association health plan is not a type of insurance, but rather a legal instrument by which a group of businesses can ban together and cooperatively sponsor a single health care plan limited to their own workers. Assume their aggregated employees is of sufficient size, the ahp can access the large group health care market, a market that already covers over 80 million americans.
▶ 0:40:29Mr. Coleman: There are many antecedents for ahp's cooperative arrangements like credit unions, professional employer organizations, and group captives. Such organizations employ similar strategies where demand for products and services is pooled among multiple businesses and they voluntarily work together to secure prices. The way large group health plans achieve savings is scale.
▶ 0:40:56Mr. Coleman: Large group plans covering thousands of employees are in a better position to negotiate with insurers, because a large plan offers a bigger risk full over which health claims may be moderated. Large group plans also pay less for the same benefits because of rules on the medical loss ratios and practices around actuarial load. In the brief 2018 period when ahp access was expanded, new ahp's provide a broad health benefits and double-digit savings.
▶ 0:41:25Mr. Coleman: In my own research of nearly three dozen of these plans come the high savings reported was 23% and 29% for a self-insured plan. Separate research found a savings examples like the tennessee realtors ahp affording savings of 25% to 50%. Likewise, at the time, market projections predicted future ahp premiums would substantially lower or substantially lower than those in small group and individual markets.
▶ 0:41:54Mr. Coleman: The 1974 employee retirement income security codified ahp's as a subtype of multiple welfare arrangements. In the decades since the passage, ahp regulation has improved.
▶ 0:42:15Mr. Coleman: States for their part have enacted numerous laws and regulations to improve since the amendment. Hepa guarantees that an eligible employee may not be denied ahp coverage based on health factors, prohibited from denying coverage based on health status, pre-existing health conditions or mental health, claims history or genetic information.
▶ 0:42:41Mr. Coleman: Opponents of ahp's have stuck to prevent access to large group health insurance by small businesses, however, these ahp's are oddly silent regarding why large group coverage is acceptable for big businesses, universities, and nonprofits but not traditional small businesses and the self-employed. This double standard is all the more problematic given the excessive insurance prices small businesses pay. Thank you for the opportunity to testify today.
▶ 0:43:09Chair Cassidy: Senator sanders to introduce his witnesses.
▶ 0:43:11Sen. Sanders: I would like to introduce tim driscoll, president of the international union of bricklayers and allied craftworkers. Mr. driscoll joined the bricklayers union in 1985 as an apprentice and has served in several leadership roles with his union and was elected president of the bricklayers in 2020. Thank you very much for being with us.
▶ 0:43:32Mr. Driscoll: Thank you, ranking member sanders, chairman cassidy. Thank you. And I am here today on the behalf of bac, international union of bricklayers and allied craftworkers.
▶ 0:43:49Mr. Driscoll: Today's hearing as I understand it is an examination of proposed legislation that seeks to address the accessibility, affordability, and security of benefits for workers and those who may indeed work for multiple firms and at times need to work across state lines.
▶ 0:44:06Mr. Driscoll: I'm well acquainted with the needs of such workers because bac members come along with millions of other building trades workers, find it necessary to work for multiple employers, often across various jurisdictions, throughout the year. The availability and security of benefits is a core concern for our members. My union is dedicated to strengthening laws that protect workers and the benefit systems that they rely upon.
▶ 0:44:33Mr. Driscoll: Unfortunately, the unlocking benefits for independent workers act falls short on both of these counts. Misclassification of workers as independent contractors is rampant in the construction industry and other sectors of our economy. It provides a low road employers the ability to mistreat workers as contractors, denies those workers the essential protections afforded to employees, and it deprives to and local governments of the tax revenue that such employment should generate.
▶ 0:45:03Mr. Driscoll: The unlocking benefits for independent workers act would only accelerate this insidious race to the bottom by providing unscrupulous employers a safe harbor under all federal laws and such companies provide employees any benefit or protection commonly provided to employees.
▶ 0:45:22Mr. Driscoll: This unnecessary expansion of independent contractor status would leave affected workers without the basic protections of the fair labor standards act and would make it next to impossible for them to exercise their ability to form unions or bargain collectively under the national labor relations act. This proposed legislation is an extreme departure from the benefits and protections that workers have relied upon for decades.
▶ 0:45:46Mr. Driscoll: It is a thinly veiled attempt to weaken the rights of workers to join unions, have safe working conditions and wages. Similarly, senator scott's internment act with narrow to the usual common law rules and thereby expand the ability of unprincipled employers to misclassify workers as contractors.
▶ 0:46:14Mr. Driscoll: Congress was clear when it established the flsa that people working from someone should enjoy the benefits afforded by the act. This broad scope laid out under the economic realities test has been established through decades of case law and rulemaking. However, the modernization promised by the proposed bill is an open invitation to opportunistic employers who would exploit workers and deny them the most basic protections that the act guarantees.
▶ 0:46:46Mr. Driscoll: Rather than spend time on disingenuous efforts, congress should focus on passing the protecting the right to organize, pro act, so people have the freedom to join together, negotiate with their employers for better wages, benefits, and working conditions. Research consistently shows that when union density is a strong, whether in specific regions or occupations, it leads to a wages, improved benefits, and a higher standard of living for entire communities.
▶ 0:47:18Mr. Driscoll: Unions achieve this by uniting workers to bargain collectively for improved standards at work, standards that benefit nonunion workers as well. Robust unions helped set wages for entire industries and occupations, they reduce wage disparities by ensuring fair pay, and they bring living wages to underserved communities.
▶ 0:47:40Mr. Driscoll: Crucially, for today's proceeding the pro act offers vital solutions to the challenge that american workers face. It guarantees bargaining rights for employees who are misclassified as contractors and establishes a process for helping newly organized workers achieve a first contract. These are the real policy solutions that face american workers. These are the solutions that provide workers a real voice on the job and empowers them to secure the benefits they need.
▶ 0:48:09Mr. Driscoll: These are the true reforms that workers across our country needs today. Thank you for the opportunity to address the committee and to speak on behalf of american workers this morning and I look forward to answering any questions the committee may have.
▶ 0:48:21Sen. Sanders: Thanks very much. I would like to introduce karen friedman, the executive director of the pensions rights freedoms, has worked over 20 years for workers and retirees of the pensions rights center conducting important work to find innovative solutions to the retirement crisis facing working americans.
▶ 0:48:45Ms. Friedman: Good morning, chairman cassidy, ranking member sanders, members of congress. Thank you for this opportunity to testify about expanding coverage to the millions of private sector workers who are not now covered by an employer-sponsored plan.
▶ 0:49:06Ms. Friedman: The pension rights center which was founded in 1976 is a national nonpartisan consumer organization that works to promote and protect the retirement incomes of workers, retirees, and their families. We worked on two different directions.
▶ 0:49:30Ms. Friedman: The policy program works to identify and address gaps and work for innovative solutions. Our legal program is the go to place for individuals when they need help with a pension or 401(k)-type plan.
▶ 0:49:48Ms. Friedman: On that score, the pension rights center is proud to be the resource center verse six regional pension counseling projects providing free hands-on assistance for individuals and 31 states helping them address their retirement income problems to ensure that they get the benefits they've earned.
▶ 0:50:08Ms. Friedman: Since the inception of the program, which is funded by the administration for the -- living, they provided and helped more than 75,000 people recovering some 290 million dollars in earned benefits. P.r.c.'s passion and my passion is to help people and to ensure that everyone can retire with secure income.
▶ 0:50:35Ms. Friedman: Since our founding, we've heard from tens of thousands of people from across the country who tell us how they are suffering and struggling in retirement because they cannot make ends meet. Why? Some don't have a pension. Many don't have enough money saved in their 401(k) plans. An alarming number don't have a retirement plan at all.
▶ 0:51:00Ms. Friedman: To top it off, the average monthly social security benefit in 2025 is less than $24,000 a year. With so many people living on just that modest social security benefit alone, over 5.7 million older americans are living in poverty.
▶ 0:51:23Ms. Friedman: That is why it is so vital that we not only ensure pension coverage for all american workers, but we also need to work to strengthen and expand social security, which is america's most important antipoverty program. Just yesterday, I was talking to cindy, a woman we have helped for many years. She lives in kansas city, missouri. She said something incredibly astute.
▶ 0:51:54Ms. Friedman: Actually, it is very similar to what you said, senator cassidy. Karen, when you're talking to the senators tomorrow, remind them that retirement security is not a partisan issue. It is not a republican issue. It is not a democratic issue. It is an american issue. She continued.
▶ 0:52:17Ms. Friedman: We are all united in wanting to have sufficient money after years of hard work so we can pay our bills, stay part of our communities, support local businesses, and help our kids and grandkids. The great part is cindy can do all that because her husband has a good defined benefit plan, which she thinks everyone should have.
▶ 0:52:43Ms. Friedman: According to the national institute of returned security, a poll that they did, people across party lines agree with cindy, with 80% of americans saying that all workers should have a pension so they can be independent and self-reliant in retirement. Sadly, that is not the case for most people. In fact, polls show running out of money in retirement is a top concern for all americans.
▶ 0:53:15Ms. Friedman: A poll from allianz life insurance shows 64% of americans are more worried about not adequate income than death. That's a pretty amazing statistics. The facts support people's fears. Half of private sector workers participate in an employer-sponsored retirement plan.
▶ 0:53:40Ms. Friedman: For those cover there has been a shift from defined benefit plans providing secure, guaranteed lifetime income, to less secure 401(k) plans where individuals are not saving nearly enough money to make it through retirement. To that end, p.r.c.
▶ 0:53:55Ms. Friedman: Has developed policy principles included in my written statement, that we think should be used to evaluate any legislative proposal that aims at bolstering retirement income, particularly for low and moderate wage earners. In short, our top four principles are these.
▶ 0:54:19Ms. Friedman: Universal coverage, secure income, adequate income, retired contributions from employers and employees. Ranking member sanders, we applaud you for introducing the pensions for all act which embodies these principles. Your visionary bill is modeled on the pension plan provided to new members of congress. I think workers of all views appreciate the value of this type of pension and feel that every american deserves no less.
▶ 0:54:48Ms. Friedman: Your bill is aspirational and an inspirational challenge to all of us to think big. Thank you again. I guess that I have just run out of time. Thank you for inviting me today. Thank you. Thank you for inviting me today and I'm happy to answer your questions. Thank you so much.
▶ 0:55:18Chair Cassidy: Everybody wants -- the motto of my office, we want to be profamily, pro-worker, pro-patient. I think each of you could say that. The question is, how do we get there? We want that person, our fellow american, to retire with adequate benefits. I agree with you regarding social. One thing that we have ignored so far is in eight years there will be a 20% cut by law in social benefits.
▶ 0:55:48Chair Cassidy: Senator kaine and I have a bipartisan bill that would attempt to address that, increasing benefits for those at the lower income scale. That's not this committee, but I wanted to mention that because social security getting a cut of 20% would be antiworker, anti-patient, anti-family. I will speak to the two of you. Senator sanders pointed out something we should be concerned about. Increasing wage inequality. Disparity.
▶ 0:56:19Chair Cassidy: His prescription is, as we've heard. In california, both of you referenced how ab-5 extensively was going to improve -- all extensively come that was going to improve things for workers but ended up with lower employment overall, not just among independent workers, but if I read your testimony correctly Ms. kavin, among union workers too. Why don't you start, Ms.
▶ 0:56:44Chair Cassidy: Kavin, because I have limited time, speak to what seemed to be -- oh, we are addressing this and probably california has the greatest disparity between ceos and workers and we ended up with workers being worse off.
▶ 0:56:57Ms. Kavin: The union data that I cited came from the bureau of U.S. labor statistics. You can see the line gone straight down. Talking about what I said in my opening statement about, I went freelance because I thought that I could earn more money. That turned out to be true for me and true for a lot of people. One of the most recent studies that came out on that was, they looked at the skilled freelancers performing knowledge work.
▶ 0:57:26Ms. Kavin: We brought in about $1.5 trillion in 2024. More than one quarter of us in the united states are freelance. Those who earn exclusively through freelance work preferred a median income of 85,000 dollars, surpassing their full time employee counterparts at $80,000.
▶ 0:57:46Chair Cassidy: Include the benefit, does that include the benefit -- benefits? If you say 20% of your income goes to benefits, is that 85 k accounting for that differential, the fact that the person whose full-term employee it has benefits as well?
▶ 0:58:05Ms. Kavin: We don't have access to the big, juicy group rate plans, which is what you are trying to fix and what senator paul is trying to fix for us. I brought my health insurance stub and I have to shell out to get a silver level, not even gold, blue cross plan in new jersey 999 dollars $.87 per month just to get access to the health care. That is supposed to be affordable health care. It's not.
▶ 0:58:33Ms. Kavin: We have to buy independent, individual plans. I took a poll among independent contractors that I know and some are getting jacked for $2000 a month. If they have kids, 3000 dollars a month premiums. Not even going to the doctor and getting something done. Yeah, a lot of us do well as freelancers and we have to pay more for health insurance.
▶ 0:58:58Chair Cassidy: Comment upon this.
▶ 0:59:04Mrs. Onwuka: In california, the original bill had to exempt over 100 occupations because it was so sweeping. After that, 600 occupations full of tens of thousands of californians are still under the gun of ab-5. They've lost incomes. They've lost contracts. They've lost livelihoods. They've lost small businesses.
▶ 0:59:28Mrs. Onwuka: I spoke to a breast cancer survivor who was raising three children well starting a business and ab-5 in 2019 helped push her out of business. When you talk about mass reclassification, what this effort is, it is a sweeping effort to try to consider every single independent contractor and every occupation as the same. Sure, there might be mess sure, there might be mes -- misclassification in some industries, but you are penalizing a lot of people who don't want to be penalized.
▶ 0:59:59Chair Cassidy: Mr. coleman, Ms. kavin spoke about premiums being so high. The association health plan by pooling risk, how do you estimate that would lower the potential of premium health insurance for such a worker? Be quick.
▶ 1:00:15Mr. Coleman: Lower it potentially by thousands depending on factors of location , age, etc.
▶ 1:00:24Chair Cassidy: By thousands dependent on those factors but each location theoretically would lower?
▶ 1:00:30Mr. Coleman: Correct. Just accounting for differences and local costs of health care.
▶ 1:00:35Chair Cassidy: I will defer now to senator sanders.
▶ 1:00:39Sen. Sanders: Mr. coleman, you talked about the burden of health care costs on small businesses. Absolutely right. Ms. kavin come you said health care in america is expensive. Yeah. It is double what it is in most other countries around the world. I would ask our panelists briefly, yes or no, do you think that it makes sense for the united states to join every other major country on earth and guarantee health care to all people as a human right?
▶ 1:01:10Mrs. Onwuka: Mrs. onwuka, not the way you are suggesting.
▶ 1:01:15Ms. Kavin: I agree. Not the way you are suggesting.
▶ 1:01:19Mr. Coleman: I don't think the question really understands the philosophy of human rights versus localized --
▶ 1:01:26Sen. Sanders: Despite the fact that every major country on earth guarantees health care care to all people?
▶ 1:01:32Mr. Driscoll: Health care is an essential right everyone is entitled to.
▶ 1:01:36Sen. Sanders: Mr. driscoll, you state that the misclassification of workers as independent contractors is rampant in the construction industry and has led to a destructive race to the bottom. Please, tell us how this has harmed construction workers and why you believe the congress shouldn't make it easier for corporations to misclassify workers as independent contractors.
▶ 1:01:58Mr. Driscoll: Currently, under existing law, senator sanders, approximately 2.1 million workers are misclassified as contractors. Within my trade, a bricklayer working next to another bricklayer working on a project that they have no control over are often deemed contractors to avoid paying unemployment insurance, health insurance. That cost is ultimately borne by the community that those workers participate in, because they can't afford health care.
▶ 1:02:28Mr. Driscoll: It drives a race to the bottom where our employers, responsible contractors who provide health care and pension benefits, can't compete against these low road contractors. If this law enacted under its current language, it would simplify that and lead to an expansion of those types of contractor relationships.
▶ 1:02:46Sen. Sanders: The bills that we are discussing today would give companies a "safe harbor" that would allow them to deny workers a minimum wage over time and the ability to form a union. In your opinion, would these "safe harbors" help or harm workers?
▶ 1:03:06Mr. Driscoll: They would greatly harm workers.
▶ 1:03:09Sen. Sanders: Astoundingly -- we are the wealthiest country in the history of the world and yet nearly half of all the workers have no retirement savings. I have introduced legislation today that would bring back defined-benefit pension plans for over 56 million american workers. What would it mean if every american had access to a defined benefit pension, like the one members of congress have?
▶ 1:03:41Ms. Friedman: As I said in my written statement, defined-benefit plans, which are guaranteed plans that provide lifetime payments to individuals, have created a middle class in this country. If everyone had a defined benefit plan, then they would be able to pay their bills, they would be able to take care of themselves and not be a burden on society, they would be able to participate in community --
▶ 1:04:12Sen. Sanders: I will interrupt. Is it fair to say, I trust no one disagrees, that if you are 60, 65 come about to retire with nothing in the bank, which is the case for millions of people, there is a tremendous amount of anxiety. How do we survive?
▶ 1:04:32Sen. Sanders: One of the astounding facts that I've learned about last year when I was sitting where you are, 22 percent of seniors in america are trying to survive on $15,000 a year. That's insane. What we are striving for here, and you tell me, Ms. friedman, is a defined pension plan so that when people retire they know what they are going to get. Also, social security.
▶ 1:05:00Sen. Sanders: The chairman correctly mentioned that we have a problem with social security. Why don't you tell people, if someone is making $2 million a year and someone is making $160,000 a year, who pays more into the social security trust fund?
▶ 1:05:14Ms. Friedman: Well, if someone is -- the lower income person pays much, much more.
▶ 1:05:24Sen. Sanders: Because we have a cap. What would happen if we lifted that cap for all taxable income? The legislation that I've introduced would greatly expand benefits and increase the solvency, the issue senator cassidy talked about, to 75.
▶ 1:05:46Ms. Friedman: That makes sense to me and the pension rights center also thinks that it's a great idea. Senator, if I may add, social security is this country's nearly universal pension plan. It is completely portable, it's extremely efficient, it is spending less than one penny on the administration of every dollar spent, and returning more than $.99 of every dollar in benefits.
▶ 1:06:14Ms. Friedman: These benefits have not been -- increased. It is a great thing.
▶ 1:06:22Sen. Tuberville: . Thank you to the witnesses for being here today. Regardless of what you think about all of this, this is a bipartisan issue. Outside the beltway, left-leaning groups and forward thinking unions understand the reality that the vast majority of independent workers want to work independently and that they want access to benefits. This is the 21st century the last time that I looked. It is not our job in washington, D.C. to tell workers what they want. It is not our job.
▶ 1:06:53Sen. Tuberville: To that point, I would like to request to enter into the record, Mr. chairman, a couple of letters by seiu 775 and a press release by teamsters affiliated drivers including a statement that teamsters local 117 in washington state are all in support of portable benefits for gig workers. Thank you.
▶ 1:07:16Sen. Tuberville: Since president trump has taken office, we have been seeing consistent job growth, but we cannot sustain this growth and bring new industry to our communities if those companies don't have flexibility to offer benefits that their workers want. They want it. Our labor laws are outdated. In order to grow and upgrade american workers must be in charge. The workers.
▶ 1:07:39Sen. Tuberville: That means giving independent workers, contractors, gig workers the freedom and confidence to work how they want and take care of themselves and their families. What an idea. Gone are the days when american workers want to spend 40 hours a day, 40 years working on the same assembly line at the same factory. That is over with. Day in and day out. That is not going to be sustainable.
▶ 1:08:06Sen. Tuberville: America's future workforce once the freedom of flexibility and the opportunity to still provide for their families while pursuing different jobs that work for them and their schedules. Republican and democrat states alike are passing bills providing more freedom to independent contractors and benefits, including alabama. Mr. coleman, there has been a lot of conversation with my colleagues in this chamber over the last few months about making sure that medicaid is going to people who really need it.
▶ 1:08:33Sen. Tuberville: That sparked conversation about how and where americans get their health care coverage. If businesses were providing a legal avenue to offer portable benefits to independent contractors, how would that fit into the landscape of uninsured and insured americans seeking health care?
▶ 1:08:48Mr. Coleman: Thank you for the question, senator. Obviously, it would create a positive effect with respect to insurance by expanding small businesses' ability to offer affordable health insurance to its workers. We could hopefully reverse the decline that we've seen and offer coverage amongst all businesses.
▶ 1:09:13Mr. Coleman: As I mentioned in my testimony, we have a situation where at the turn-of-the-century nearly half of small businesses offered insurance to its workers. We are now in a situation where that has plummeted to 30.1%.
▶ 1:09:26Sen. Tuberville: Thank you. Ms. kavin, your will and passion for protecting independent contractors is a byproduct of why we are having this hearing. Millions of americans are facing the same issue that you faced. I'm proud to cosponsor chairman cassidy's bill unlocking benefits for independent workers act to help millions of americans. Can you talk about your grassroots coalition fight for freelancers and explained what freelance testing is?
▶ 1:09:55Ms. Kavin: Freelance busting is a term that I came up with when I was doing yard work listening to a podcast about unionbusting. They seemed to think that anything happened that unions didn't like fell under the term unionbusting. We need to call what is going on against us freelance busting because they seem to be trying every since way since sunday to knock us out of business and cause us harm.
▶ 1:10:20Ms. Kavin: My coalition, I am a cofounder, not the founder, we are fully bipartisan. We have people from every political stripe you can imagine who have voted for everyone under the sun. We don't believe that this is a partisan issue. We are just people who choose to be our own bosses. This has been legal in the united states since the day that this nation was founded and we are sick and tired of having to fight our own government that keeps trying to take that freedom away.
▶ 1:10:46Sen. Tuberville: Thank. Mrs. onwuka, as far as benefits like health insurance, retirement benefits, I am interested in what the landscape looks like. How many workers currently lack access to employer-provided benefits because they are part-time employees or independent contractors?
▶ 1:11:07Mrs. Onwuka: Some research I've seen is anywhere between 20% to 30% of those independent contractors don't have access to benefits, either because they don't have a full-time position elsewhere, or they are not covered by a spouse.
▶ 1:11:20Chair Cassidy: Thank you. Senator hassan.
▶ 1:11:26Sen. Hassan: Thank you, Mr. chairman. Thank you and ranking member sanders for this hearing and for our witnesses, sharing your experience and expertise. I appreciate it. I will say as we are discussing the importance of making sure that workers have access to health care and retirement and benefits, it's worth pointing out that it has been less than two weeks since president trump and congressional republicans unilaterally voted to take away the health care of millions of americans, so I find a little
▶ 1:11:58Sen. Hassan: Irony in this moment today. Also, I really appreciate the focus on how to address the need to update our rules and laws to reflect a modern economy. But, the thing is, the devil is in the details. The details really make a difference. If you sat where I set as the governor of the state and talked to a lot of people forced into independent contract status.
▶ 1:12:24Sen. Hassan: The 18-year-old kid hired by a contractor falls off of the roof and breaks his back and has no workers comp and no insurance. The rest of us bear the cost of that. That is a real issue that we have to think about and be careful about. When we think about association health plans we have to make sure they are not association junk health plans.
▶ 1:12:49Sen. Hassan: It -- if all you have are people with illness and injury in the pool that will drive the cost up and they will discover that they are not covered for a lot of things. We have to get the details right. Let me start with a question to you, Mr. driscoll. President trump's budget law will result in millions of americans losing health care insurance.
▶ 1:13:07Sen. Hassan: This will cause a health insurance premiums and costs to go up for patients who receive insurance through their job, because the increase in the number of uninsured people turning to emergency rooms for care will drive up costs for all americans. Mr. driscoll, how will increase to health care costs impact the workers you represent?
▶ 1:13:25Mr. Coleman: As you indicate,
▶ 1:13:28The Devil --Mr. Driscoll: As you indicate the devil is in the details. There is cost projecting from the projected 20 million folks will lose health insurance coverage, and that will be the insured plans such as ours which will have to absorb those costs.
▶ 1:13:42Sen. Hassan: Insurance providers will need to drive up premiums in order to cover the uninsured costs. Ms. freed men, women face many obstacles for saving for retirement, including they are more likely to come in and out of the workforce due to caregiving responsibilities. According to a 2024 survey by the national council on aging, one third of rural women reported saving for retirement.
▶ 1:14:12Sen. Hassan: Can you speak to the unique circumstances that women face when saving for a secure retirement?
▶ 1:14:16Ms. Friedman: Yes, thank you for that question. It is absolutely true. First of all, as I've talked about, our efforts are working to make sure that everybody gets good coverage. Everybody has portability. Senator sanders' bill, pensions for all, would address that, along with other approaches.
▶ 1:14:44Ms. Friedman: You are the data is abundantly clear that women do lag behind men in outcomes. There are lots of factors at work. Women still earn less for comparable jobs. They take more breaks from the workforce for caregiving. I know this because I was taking care of my parents.
▶ 1:15:10Ms. Friedman: That leads to much lower lifetime earnings which will affect how much they are getting. Divorce and separation can disproportionately affect women's income. All of those are really important factors. Also women tend to live longer. They will have to make their income less longer. All of these things are happening that we need to address.
▶ 1:15:40Ms. Friedman: We support senator baldwin's women's protection act in 2025 and that addresses some of the concerns.
▶ 1:15:46Sen. Hassan: I appreciate that. One last question for Mr. driscoll. Plants protect workers rights while also supporting benefits a lot of them -- that allow them to stay with their families. What benefits do employers see and how can we help more employers offer them?
▶ 1:16:07Mr. Driscoll: The beauty of these plans for our employers -- we have employers who employ hundreds and in some cases we have employers with three employees. They get access to affordable healthcare. Growing the rate of unionization in any given area would give more employers access to the benefits that they generally -- genuinely want to provide.
▶ 1:16:35Sen. Hassan: Thanks. They also want to negotiate fixable schedules for their employees. Thank you. >> health plans are also regulated and have the same sort of requirements. Next would be senator marshall.
▶ 1:16:51Sen. Marshall: . Let's start with Mrs. onwuka. We appreciate you being here. What protections do workers have if a benefit provider were to go under or misuse funds?
▶ 1:17:04Mrs. Onwuka: Under a portable benefits plan there are protections in place to ensure that whatever investments have would be there to be protected. There are some companies that have those accounts and set those up to ensure that happens.
▶ 1:17:22Sen. Marshall: Many of them have failed? As that happened very often -- has that happened very often?
▶ 1:17:33Mrs. Onwuka: I have not seen that happen very often.
▶ 1:17:38Sen. Marshall: I am surprised it is not more so to be honest. What is keeping that from exploding in a good way and what do we need to do to put wind beneath those sales?
▶ 1:17:53Mr. Coleman: Thank you very much for that question. A primary obstacle to association health plans underneath legacy regulation deals with the obstacles to be able to form a coalition for association of businesses whose aggregate employee body can be seen as a single health plan.
▶ 1:18:20Mr. Coleman: There is a doctor that says if you don't have the right affiliations among businesses, trade -- we will treat each business with respect to insurance.
▶ 1:18:35Sen. Marshall: We need to change the law or is it the regulatory issue?
▶ 1:18:40Mr. Coleman: Changing the law is best because not only do you have the benefit of being a clear statutory precedent but you also have a situation where technologists like myself are going to make investments in that market to build platforms. If it is a regulatory solution there is more hesitation because the next administration may change regulation.
▶ 1:19:10Sen. Marshall: I would just like to ask the staff to understand but we can do to improve that situation as well. We have seen some great success in kansas with those plans. I am surprised there are not more people utilizing. Ms. friedmanms. Friedman I will go to -- I will go to Ms. friedman next.
▶ 1:19:41Sen. Marshall: How under portable benefits can lead to ensure that employers are providing benefits on par with many of the wto ♪ 2 employees?
▶ 1:19:58Ms. Friedman: Portability has been an intractable problem. There are lots of proposals that will address this. Senator sanders pensions for all would be portable. The state has some portability. I think we have to ensure that we are looking at solutions -- what we are trying to do is address the concern which is for ability.
▶ 1:20:27Ms. Friedman: People changing jobs a lot and benefits going with them. We need to explore those options and make sure they are options that protect employees Sen.
▶ 1:20:37Marshall: I understand the problem. Now I am looking for the solution. Mrs. onwuka, can you take a stab at that?
▶ 1:20:45Mrs. Onwuka: They can be negotiated between independent contractors and the client. It is able to pay, they can define how much the employers want to pay on top of their negotiated rate, how much they will pay into the benefit plan. They can match with whatever they are paying their w-2 employees. Let's not forget these plans can be paid into by multiple different entities.
▶ 1:21:16Mrs. Onwuka: A contractor can do well in terms of negotiating the benefits package that works for them.
▶ 1:21:20Sen. Marshall: If you were doing that negotiation and you had seven or 10 clients, are you asking them to match 10% or 20%?
▶ 1:21:33Mrs. Onwuka: It would be up to the independent contractor to decide. >> I yield back.
▶ 1:21:41Chair Cassidy: The next person is senator kim.
▶ 1:21:45Sen. Kim: Thank you for coming out and talking to us today. It is very much on my mind the challenges my family is facing right now. My family is struggling. My father has been in the hospital four times since father's day weekend. He just had major surgery a few days ago. We have been rushing back and forth to see him and care for him along with family. I know things will only get worse.
▶ 1:22:14Sen. Kim: He does not know what country he lives in. He has a lot of physical issues. This is accentuated by the fact that for a variety of reasons my father was not able to save up for his retirement. It is similar to what you were saying. One of those people getting less than $24,000 per year from social security, that is the entirety of his income right now. This is obviously not just affecting him. It is affecting me, my kids. What I can think about to provide for them.
▶ 1:22:45Sen. Kim: Ms. friedman I just wanted to ask you. I'm struggling with this. A lot of people are. They feel that anxiety. One woman told me it feels like it is hard for her to breathe right now. I feel that right now as I'm talking to you. What suggestions do you have for us to dig through how to ensure more people especially those low and middle class have access to retirement plans? The breadth of what we are talking about includes independent contractors too.
▶ 1:23:15Ms. Friedman: Thank you for that question. First of all, my condolences for all you are going through because I had to do something similar with my family. Families throughout this country are struggling right now. The fact is 50% of the workforce has no pensions or savings to supplement social security. They are struggling. My parents only have social security so I know how that is.
▶ 1:23:47Ms. Friedman: We have to explore solutions. One of the solutions that we talked about earlier is looking at the state administered auto iris for people who are not covered, working for pensions for all, senator sanders bill, looking at our principles, seeing if there are other proposals.
▶ 1:24:07Ms. Friedman: One of the things we are trying to do is see if we can find, we are working from small to large, large to small, supporting senator sanders proposal but also supporting the state facilitated auto iris.
▶ 1:24:22Sen. Kim: Does it make sense to look into make sure how that can be expanded? I know it is in a number of states already but try to expand it some may other contractors can benefit?
▶ 1:24:37Ms. Friedman: A lot of the states include independent contractors. I think they aspire to all do so. We have to all work together. And we look forward to doing that with the committee.
▶ 1:24:56Sen. Kim: I hope we can work together. This is on the minds of everyone. Our state does have one of these autos ira efforts underway, efforts to expand it to more broadly include all forms of independent contractors. I'm trying to think of tools at our disposal, federal, what is accessible to people. Is that something that you see value in?
▶ 1:25:25Sen. Kim: Is there opportunity where that can provide additional tools for independent contractors if we are able to pursue that kind of auto ira effort?
▶ 1:25:32Ms. Friedman: The first thing we have to do is protect our freedom to be independent contractors and that is under attack at the federal level and very much right now in our home state.
▶ 1:25:42Sen. Kim: I understand that. I want to make sure people have flexibility. I want to make sure they can live the lives that they want to live. We will take that long and have some tough conversations no doubt. I'm trying to think pragmatically. Is that something you would be open to exploring and seeing how that type of tool at the state level might be utilized?
▶ 1:26:06Ms. Kavin: I'm happy to meet with you and talk with you about anything. I feel for you with your dad. We are going through something similar. My aunt took a bad fall. She spent a few days in the er. She was impressed with the traveling nurses, the independent contractors who helped her get better and get home.
▶ 1:26:27Ms. Kavin: First and foremost, before we delve into the specifics on other types of things, we need to protect the freedom for all of us to actually be independent contractors and earn a living.
▶ 1:26:37Sen. Kim: My mom was one of those nurses who worked at a hospital and wanted to have more freedom to do home visits and try to find different arrangements. I see how that benefited her to be the mom she wanted to be. Let see if we can work together to see what we can get done.
▶ 1:26:58Chair Cassidy: Very compelling. Thank you for sharing. Senator husted.
▶ 1:27:08Sen. Husted: I am hopeful one
▶ 1:27:16Sen. Husted: I am hopeful o this is one of these issues we can have bipartisan progress on. We all care about making sure everyone in america has access to healthcare but part of having access is being able to afford it. We have a situation in this country where we spend far more. It is not for lack of effort in terms of how much it cost to provide healthcare that we are in this challenge.
▶ 1:27:39Sen. Husted: 18% of our economy has healthcare, 5.20 6 trillion dollars per year, for outpacing per capita what any other country spends on healthcare. It reminds me when I was a kid I went with my dad to buy a used car. When we walked up to the guy who had the car sale, he said, my dad said what do you want for the car. He looked and said, how much do you have.
▶ 1:28:10Sen. Husted: Right? If you don't know the price of something, it is pretty hard to know whether you are getting a good deal. In this country right now, we have no idea what we are paying for healthcare as consumers whether you are an employer, an individual, a healthcare program. None of us know. In most markets, we know the price. Not in healthcare. It is a mystery. None of us really know how much it is.
▶ 1:28:39Sen. Husted: It seems to me that is a fundamental component of trying to figure this out. Mr. coleman, thoughts on that?
▶ 1:28:50Mr. Coleman: Thank you for the question. 95% of my time as a researcher is spent on the issue of the application of artificial intelligence within healthcare because it is one of the most promising mechanisms we might have to be able to curb healthcare costs. People tend to forget that our insurance costs -- I'm sorry, thank you.
▶ 1:29:15Mr. Coleman: People tend to forget that our health insurance premiums are largely reflective of the cost of medical claims and we need to be able to reduce the costs. Right now the cost of hospitals and physicians are way out of line with comparable nations. Europe, 17.4% of our gdp is spent on healthcare.
▶ 1:29:37Mr. Coleman: We need to look at our delivery issue because that would further enable the savings potential of the work we are discussing today on things like association health plans.
▶ 1:29:49Sen. Husted: When you think about labor unions, they represent their members and negotiate for better wages, working conditions, healthcare, benefits. As an individual independent contractor, if I want to drive a car or have a small business, Ms. kavin, maybe you can answer this.
▶ 1:30:15Sen. Husted: Do I have the same ability to come together and negotiate under the law as you would as an employee in a business or a union?
▶ 1:30:24Ms. Kavin: You are talking about health plans?
▶ 1:30:27Sen. Husted: Yes.
▶ 1:30:28Ms. Kavin: We need better access to group rates. This is not my area of expertise but just asking everyone knowing I have been an independent contractor for more than two decades now, we are getting killed on these individual rights and we need equal access.
▶ 1:30:44Sen. Husted: Mrs. onwuka, thoughts on that?
▶ 1:30:49Mrs. Onwuka: Nothing in particular. They have set everything.
▶ 1:30:52Sen. Husted: Mr. coleman?
▶ 1:30:56Mr. Coleman: I have the same opinion. We have ways to aggregate independent contractors so they have more leverage on things like health insurance.
▶ 1:31:04Sen. Husted: If you want a better price, you have to know what the price is and improve your negotiating power so that you can figure out how to get the best deal for yourself.
▶ 1:31:15Mr. Coleman: Absolutely. It is literally the basis of the group health insurance market.
▶ 1:31:20Sen. Husted: We need to do better on that front. I just want to say this is an issue of healthcare when I think of small businesses. We just passed in the big beautiful bill, we helped social security, small businesses, we help people have more money in their pockets. Healthcare is going up, the cost is going up so fast.
▶ 1:31:49Sen. Husted: And if you don't have the ability -- you make so many decisions in your life as a family member based on whether or not you can have healthcare. Where you are going, where you are. I hope that we will work very closely together to improve the way we are serving our customers , the people of the country. Thank you.
▶ 1:32:11Chair Cassidy: I just want to note Ms. friedman has been saying only 50% of workers have access to defined contribution plans. I will submit for the record a report based on irs data showing that almost 80% do. Just a point that out.
▶ 1:32:31Ms. Friedman: Thank you very much senator cassidy. I would like to suggest that I am talking about 50% of people who participate in the plan. Access is a slightly different issue. I would be happy to share that with you. But thank you very much.
▶ 1:32:44Chair Cassidy: Next is senator blunt rochester.
▶ 1:32:49Sen. Blunt Rochester: Thank you chairman cassidy and the panel for being here. Delaware has recognized how crucial continued access to benefits like retirement are to persons economic stability. As we have heard even the economic stability of families. I was really struck Ms. friedman by the remark that you made of individuals being more afraid of running out of money than dying.
▶ 1:33:20Sen. Blunt Rochester: That really stuck with me. I can tell you this issue of making sure that social security was an anti-property program for our seniors, making sure that people actually can live out their lives with dignity and be able to feed themselves, be able to live. It is certainly important.
▶ 1:33:46Sen. Blunt Rochester: In my state in 2024 the delaware state treasurer rolled out a program called delaware earns, a retirement plan that makes it easier for the 150 thousand people in delaware to have access to retirement plans including independent contractor s to save for the future. Ms. friedman, how common are these plans and are they generally successful?
▶ 1:34:16Ms. Friedman: Thank you for that question. Yes. We have been on the ground floor of supporting these approaches so we had a common ground initiative in the early 2000 and one of our recommendations was to do some sort of state plan. We were involved early on and with washington, connecticut, illinois and other programs. There are probably 20 states that have implemented this plan.
▶ 1:34:47Ms. Friedman: They are modest. They are not senator sanders bill. They are not offering defined-benefit plans to everybody. But they are expanding coverage for private sector workers who do not have access to an employer-sponsored plan. My understanding is that there is hundreds of thousands of now individuals who are participating in these plans. Employers are getting more enthusiastic.
▶ 1:35:17Ms. Friedman: I think it is about $2 billion saved overall. So congratulations on delaware in setting up the plan and we would like to work with you in anyway. There are additional protections we would like to see in these plans. We would like to see the law change at a federal level so that employers can contribute because certainly as senator sanders pointed out, you really need an employer and employee contribution if you want
▶ 1:35:48Ms. Friedman: Adequacy. Also we are looking forward to seeing the savior's credit that was in secure 2.0 actually implemented.
▶ 1:35:57Sen. Blunt Rochester: You are actually answering my next question.
▶ 1:36:00Ms. Friedman: That is a government match for low and moderate wage earners. In iowa's 401(k) plans, we think it is important. We would like to see congress implement the match and expand it in terms of eligibility and the amount.
▶ 1:36:19Sen. Blunt Rochester: Can you talk about how it would work in practice and why this is such a big deal for the traditional employees and as well as independent workers.
▶ 1:36:30Ms. Friedman: We are still waiting to see how it is going to work. But the idea would be if low and moderate wagers put in, the government would match that. It is super important for low and moderate wagers, especially at the pension rights center. Most consumer retiree and other organizations have supported for a longtime. We were really happy when it was passed as part of secure 2.0. We need to improve it.
▶ 1:36:59Ms. Friedman: I think we have to work on what I would call the incremental and a large and that is where the pension rights center is. We will be doing a conference in 2026 as part of our 50th anniversary celebration and continuing this dialogue.
▶ 1:37:18Sen. Blunt Rochester: Thank you so much. I had the opportunity in my state to serve as state personnel director so the pension office was within our purview. Also, benefits and dealing with benefits. Particularly healthcare as well as of a concern to me. I hope that we really take seriously the fact that there are so many people in this country that still do not have access to affordable healthcare and that we continue to try to work together to make it strong.
▶ 1:37:49Sen. Blunt Rochester: I think when we start chipping away at the affordable care act and chipping away at medicaid and chipping away, it moves us further from our goal. I yield back.
▶ 1:38:01Chair Cassidy: Senator kaine.
▶ 1:38:03Sen. Kaine: On this topic I think there are a number of areas where we have been and can be bipartisan. There are some differences of opinion. With the chairman, we have bills to focus on auto enrollment in private pension plans for folks who work with companies that offer them. We have a bill to change the mandatory age for if a company offers a private pension plan, right now it has to make that available to every full-time worker over age 21. We want to change it to over age 18.
▶ 1:38:35Sen. Kaine: We have social security proposals so there is bipartisan space and at some differences of opinion. It strikes me that on some big principles we should be able to agree that the devil is in the details. One is a printable that I don't hear disagreement about the mother panel is folks who want to unionize and vote for union should be able to have a union.
▶ 1:38:56Sen. Kaine: One of the reasons I decided to support the pro-act was the fact that after a tough unionization campaign, workers who successfully vote to unionize, they never see a contract. The employer that lost the election never enters into a contract. That seems to completely cut against the ocean of workplace democracy where there is an election and consequence. If workers vote to unionize, they should see a contract and the proactive provides a mechanism for that to happen.
▶ 1:39:26Sen. Kaine: Second, workers should not be misclassified as independent contractors if they are employees and that happens every day. I am also sympathetic to the position that the folks who really want to be their own balls and be an independent contractor should be. That balance of not letting people get ripped off and pushed into independent contractor status, allowing people who want to be their own boss to their own boss, trying to find a balance truly important. Some of my kids are artists.
▶ 1:39:57Sen. Kaine: They would not call themselves independent contractors. It will call themselves artists. The way they make their way in the world is part time without any benefits and sale of art often through an llc or something that they set up to do artistic work. And other little giggle work -- gig work here and there. They are not doing that because an employer is pushing them. They want to do it.
▶ 1:40:28Sen. Kaine: I want to be my own boss. Wanting to be your own boss is a good thing. I'm trying to find that balance between keeping people from being ripped off and preserving the ability of folks who want to be their own boss to be their own boss. That is what we have to do. The two most important benefits, if you just summarize, are health and retirement. I acknowledge what senator hassan said. We just took a huge step backward.
▶ 1:41:02Sen. Kaine: About 16 million people whose health insurance either because of changes to medicaid or because of the changes to the premium support available under the affordable care act. The aca creation of exchanges where people can buy insurance individually and get premium support if they are low income has been a huge move in virginia to innovation and entrepreneurship.
▶ 1:41:23Sen. Kaine: People who were locked into a job, I really wish I did not have to work but I need health insurance, suddenly had the ability to go and buy health insurance and if they were starting out a business and they did not have a lot of income, they can get premium support. Premium support that would enable them to have insurance for their family. That is how my two kids get health insurance. They don't have an employer. They get health insurance because they go on the exchange and with premium support they are able to afford that.
▶ 1:41:53Sen. Kaine: Insurance at the end of the year because of the expiration of some of the premium support that was put in place in the american rescue plan will be dramatically more expensive, especially for young people. For young working people they were really see their premiums go up. That is going to lock some people into jobs as employees when they would really want to be their own boss. I applaud anybody who is going to bat for the artists and the independent contractors.
▶ 1:42:20Sen. Kaine: I would hope that you would be every bit as strong in supporting the availability of health and premium support as we need to be. We are going to see a tsunami of people losing health insurance or seeing their premiums jack up 50, 70, 80% when we get to the end of the year. That is cutting against the goal that we all share that people should have portable benefits. That is my plea to everybody.
▶ 1:42:50Sen. Kaine: The last thing I will say is this. I really wish this hearing was one where we were sitting around table firing questions at each other because this has been a good one and and a lot of ideas are out. I would like to enter up somebody and challenge them and I would like them to enter up to interrupt me and challenge me. There is not enough common ground to match on the details. The traditional five minutes then on to the next witness does not necessarily get out what we need to get out.
▶ 1:43:22Sen. Kaine: I think a panel like this and discussion like this is important. Sometimes on the help committee it is health, education, labor, pension. We don't really give the p in the help committee the attention. I was really glad you had this hearing this morning.
▶ 1:43:42Chair Cassidy: There is an incredible amount of common ground to help our fellow american. How do we get there? Senator alsobrooks.
▶ 1:43:56Sen. Alsobrooks: Good morning. I agree with senator kaine but I do not agree that we had a hearing up until 2:30 last night. I don't know about that concept. Thank you to our ranking member for holding the hearing today. I want to say at the top that I really do fully support the concept of unlocking benefits and the promise of the american dream for all workers. I agree with the concept that the way that we work is changing and we have to really leave room for that.
▶ 1:44:25Sen. Alsobrooks: That the way that people want to work is changing. The thing I disagree with is what is preventing workers from achieving the dream. Just in the past few months we have seen this administration take repeated and unprecedented steps to attack the american worker and undermine federal worker protections. We have seen the firing of tens of thousands of federal workers who are my constituents, without cause.
▶ 1:44:53Sen. Alsobrooks: We have seen the steamrolling of civil servant protections and issuing of executive orders that eliminate collective-bargaining rights across federal agencies. We have seen the cutting and politicizing of the merit system protections board. This administration has targeted collective-bargaining agreements and agencies that afford workers due process. Today this committee I believe is considering legislation that will yet again undermine the american worker.
▶ 1:45:24Sen. Alsobrooks: Mr. driscoll, a question for you. The senate voted on a bill that will kick in millions of americans off of their health insurance and increase costs for families and now we are discussing a bill would further erode patient protections and increase healthcare costs. Can you talk about unions again and help educate the public about the way the unions every day have to fight for real health benefits and lower healthcare costs for their members and their families?
▶ 1:45:51Mr. Driscoll: Thank you for the question senator alsobrooks. The reconciliation bill is going to have devastating effects at the state level. As senator kaine just referred to, the support for state exchanges which are critical not just for workers but for independent contractors to access health care will be devastating. Those uninsured patients, because they will show up somewhere. They may not get the regular checkup but they will show up at the emergency room.
▶ 1:46:21Mr. Driscoll: There is a bill to pay and health care providers cannot do it for free. They will look to the insured plans that unions and jointly design to take care of that. We are going to bear the burden of that cost.
▶ 1:46:33Sen. Alsobrooks: As you mentioned, and further building on that, the rising uncompensated care costs is something that will be devastating to the whole system. That as well as the republican reconciliation bill will increase costs for working families with employment-based coverage. Can you talk about how that cost , because the theme is we are increasing costs for working people.
▶ 1:47:01Mr. Driscoll: Correct. The larger agreement here is the rising cost of healthcare and health pricing that is on families. How we address that, we can agree it is a principle we should be getting what we actually do to arrive at that is going to be the key difference. Expansion of plans that don't provide for employee input, the actual beneficiaries, fiduciary obligations.
▶ 1:47:31Mr. Driscoll: Union health plans actually have employee input into their design. That does not exist for some of his other health plans that are out there -- some of these other health plans that are out there. We have to be careful in advancing a principle that at the same time should always preserve do no harm to the existing system. That is my concern with what this legislation could do.
▶ 1:47:52Sen. Alsobrooks: With the last few seconds I have, today's hearing is framed around benefits. But it's impossible to separate the conversation from the trump administration's broader antiworker agenda. I just want to ask you how the attacks on federal workers because I don't think we can ever forget the way that our federal workers have been demonized by these in patriots, my constituents, many of whom have worked for decades under both republican and democratic. They don't care who the president is. They work for the people.
▶ 1:48:25Sen. Alsobrooks: How do those attacks and collective-bargaining agreements threaten all workers?
▶ 1:48:28Mr. Driscoll: I cannot agree more. These are public servants who have dedicated their lives to providing vital services. If collective-bargaining can be wiped out with the stroke of a pen or executive action in the federal sector, I have every reason to believe that the same effort could happen for collective bargaining agreements for workers across this country.
▶ 1:48:49Sen. Alsobrooks: Thank you. Thank you Mr. chair and Mr. ranking member.
▶ 1:49:06Chair Cassidy: Hickenlooper just got in because they could not find my end of hearing notes. Impeccable timing. Senator hickenlooper.
▶ 1:49:31Sen. Hickenlooper: Thank you, Mr. chair. I appreciate your patience. I accommodate your lack of patience. You almost threw me off. Thank you all for being here. I appreciate your public service . This is a chaotic time in the workplace as you all know.
▶ 1:49:54Sen. Hickenlooper: We have spent a lot of time in our office working to look at how do we provide more secure retirement futures for all workers of all different kinds. Let me start with Ms. friedman and talk a little bit about, we have a bill called the retirement savings for america act. I don't know if you've had a chance to look at it. In colorado 80% of our workers work a very small companies.
▶ 1:50:23Sen. Hickenlooper: Either gig workers or companies with less than 50 employees. They are less likely than those working at larger firms to have literally any retirement savings through their workplaces. When you add those very small businesses to them, it becomes a significant liability to the future of colorado and our country.
▶ 1:50:53Sen. Hickenlooper: As a former small business owner, I started a restaurant that brews its own beer. It was really hard for us. We put in a 401(k) program. But the cost for a small business was burdensome to say the least.
▶ 1:51:14Sen. Hickenlooper: The retirement savings for americans act provides a real solution, so workers without access to an employer based retirement plan would be enrolled in a plan similar to tsp, that we have access to here in congress and most federal employees have access to. These plans would be portable, follow the workers for their entire lives. How important is it that we expand access to retirement benefits for all workers?
▶ 1:51:44Ms. Friedman: Thank you so much. First of all, do you have any of that beer here today? [laughter] I could use some right about now. Only kidding. Super important. As we talked about today, we have talked about the fact that millions of people, 54 million or so, don't even have any kind of retirement savings plan to supplement social security.
▶ 1:52:14Ms. Friedman: That is just wrong, in the richest country in the world, that doesn't exist. I want to say that yes, we commend you for introducing your bill. We are evaluating lots of bills right now based on our principles, some of which I have put in my written statement. We are looking forward to talk with you.
▶ 1:52:39Ms. Friedman: We do support the state auto ira bills and we are very much in support of the aspirations of senator sanders bill. Thank you.
▶ 1:52:53Sen. Hickenlooper: Appreciate that. Let me point out that we have 800,000 employees in colorado that generally have nothing. They have nothing at present and really nothing in the works that will make sure that they have a happy, safe retirement.
▶ 1:53:19Sen. Hickenlooper: I think we need a number of more innovative savings options so that this workforce of largely low income workers can have that opportunity. If you were going to look at a bill like the retirement savings for americans act which is auto enrolled, the federal government would pay the first 1% and matched their savings as they are able to save more, how would
▶ 1:53:51Sen. Hickenlooper: A bill like retirement savings for americans act improve access to retirement for low and middle class employees middle income workers? It is portable and would follow them for their entire working careers.
▶ 1:54:09Ms. Friedman: We have to do more but it sounds like you are making progress. We are evaluating a number of proposals. There is the pensions for our proposal and your proposal and many others. Look forward to working with you.
▶ 1:54:30Sen. Hickenlooper: With the amount of time, I have written questions. You will all get your chance. I want to emphasize we spent about $276 billion per year in federal subsidies. When I started out, my ira, my 401(k), you were allowed to put $2000 away and get that to grow. Now it is close to $30,000.
▶ 1:54:58Sen. Hickenlooper: From that $276 billion per year that the government puts away for retirement, $16 billion goes to the low was 40% of workers.
▶ 1:55:12Sen. Hickenlooper: My argument is we could lower that from almost $30,000 per year for wealthy individuals, high income earners, move that down to $25,000, still very generous but it creates a cushion to allow us to put something like what I'm suggesting, that 1% auto enrolled. I yield back before the hammer cuts me off. I could see it coming.
▶ 1:55:37Chair Cassidy: I enjoyed your last comments so thank you. Members will have 10 business days for questions for the record. That is july 31 at 5:00 p.m.. I thank the witnesses for being here. It really was illuminating so thank you. And with that, this committee is adjourned.