Of the many aspects of the House Democratic health-care bill, none is more troubling than its impact on small business. This report explains:

House Democrats on Tuesday unveiled sweeping health-care legislation that would hit all but the smallest businesses with a penalty equal to 8% of payroll if they fail to provide health insurance to workers.

The House bill, which also would impose new taxes on the wealthy estimated to bring in more than $500 billion over a decade, came as lawmakers in the Senate raced against a self-imposed Thursday deadline to find ways to finance their health-care bill. Senators are weighing a combination of several more-modest tax increases, including some that would hit health-care industries.

Under the House measure, employers with payrolls exceeding $400,000 a year would have to provide health insurance or pay the 8% penalty. Employers with payrolls between $250,000 and $400,000 a year would pay a smaller penalty, and those less than $250,000 would be exempt.

The relatively low thresholds for penalties triggered criticism from Republicans, who said the burden on small business is too high.

In some ways, this is an eerie replay of the cap-and-trade vote. The liberal House leadership has thrown out a massive tax and regulatory scheme and is trying to force it down the throats of the less liberal (and more politically vulnerable) members of their caucus. And even if they succeed, the bill faces near-certain defeat — or severe re-design — in the Senate, which seems to have no stomach for this sort of approach:

Mr. [Max]Baucus spent much of the day meeting one-on-one with members of his committee, and he put on an optimistic face. “We’re going to pass very significant health reform this year,” the Montana Democrat said.

But the pre-recess deadline appeared in danger as Republicans expressed concern that the process is moving too quickly.

Sen. Olympia Snowe, a key Republican whom Mr. Baucus is trying to win over, said Tuesday that the legislation is far too complex to rush and that she saw little chance of moving a bill through the Senate before the August break.

“I frankly couldn’t imagine at this point bringing it to the floor and completing our deliberations…before the August recess,” the Maine senator said. She said “arbitrary, artificial time frames really are not realistic given the magnitude of the task we are assigned to do.”

[. . .]

A further complication is that if it looks as if the Senate can’t or won’t act this summer, many House Democrats are likely to hesitate about voting on a contentious issue — including raising taxes — for something that might never become law.

So the first move is up to the Blue Dogs in the House: do they roll over and play dead or do they push back? It is one thing to walk the plank once for a job-killing energy tax; it is quite another to do it twice, with a special kick in the shins for small business. But if they are inclined to vote for it, they might keep in mind the date of August 7. That’s the next release of national unemployment figures. How high must it go before Congress starts thinking of ideas to aid rather than cripple the private sector?