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Paulsen: Repeal of 3% Withholding Rule Good for Hospitals & Job Creators


Location: Washington, DC

Rep. Erik Paulsen (MN-03) released the following statement after the House of Representatives voted to repeal the 3% withholding rule for government contractors. The pending rule requires the government to withhold 3% on certain payments made to contractors doing work with federal, state and local governments in hopes that it would increase compliance. However, for many companies the 3% withholding is larger than their profitmargins and implementation of the rule would be detrimental to their business. Today, the bill passed by a vote of 422-to-0 and is now awaiting President Obama's signature.

"The Washington crowd has come up with some pretty ridiculous ideas over the years, but one of the more absurd ideas is the rule that requires the government to withhold three percent of payments to government contractors," said Paulsen. "You don't need to be a math guy to understand that this onerous rule would be detrimental to many Minnesotabusinesses including hospitals and contractors who build and repair our infrastructure by withholding money that is owed to them. I'm glad that Republicans and Democrats were able to work together on this issue and get government off the backs of our job creators."

Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation currently serves on the House Ways and Means Committee, and is co-chair of the Congressional U.S.- Korea Free Trade Working Group and co-chair of the House Medical Technology Caucus.

For more information on Rep. Paulsen's work in Congress, please visit

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