    [Public Papers of the Presidents of the United States: George W. Bush (2004, Book I)]
    [March 16, 2004]
    [Pages 394-404]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Discussion on Health Care Access
    March 16, 2004

        The President. Thanks for coming. Please be seated. Thanks for the
    warm welcome. What you're about to hear is a discussion about how to
    make sure America's economy continues to grow and practical ways to help
    employers and employees to grow the economy, make the right decisions.
    That's what we're here to discuss. It's an economic lesson. But we're
    not using Ph.D.'s. Well, we're using Ph.D.'s in the sense that we're
    talking to entrepreneurs who are on the frontline of making capital
    decisions every day, and decisions of--big decisions for each person
    they hire. That's what we're here to discuss.
        But before we do, I want to thank the chamber for allowing us to use
    this fantastic facility. It's a short drive from the White House, and
    it's a beautiful place. So thank you very much for letting us be here.
        I noticed I've got some of my friends from the Congress here. Sam
    Johnson from the great State of Texas, I
    appreciate you coming, Sam. Congresswoman Katherine Harris from Florida, thank you for coming, Katherine.
        Yesterday, I had the fortune of being in Ardmore, Pennsylvania, to
    talk about homeownership. It turns out that one of the fantastic
    statistics and one of the realities of our society today is more people
    own homes than ever before. And Congressman Jim Greenwood traveled with me yesterday. He is here today. He is
    here not because he particularly likes to hear his President talk; he is
    here because he

    [[Page 395]]

    is the author of the national medical liability reform law. And I
    appreciate you coming, Jim, and thank you for being here.
        I want to thank all the small-business owners who are here. Thank
    you for being dreamers and doers and employers. Thank you for taking
    risk, and thank you for following your heart. I mean, I love the
    entrepreneurial spirit of America. It's an incredibly important part of
    our country and our future. You see, the role of Government is not to
    create wealth; the role of Government is to create an environment in
    which the entrepreneurial spirit can flourish. And we've got a lot of
    small-business owners here today, and I want to thank you for following
    your dreams.
        I want to thank the local community leaders who are here. I hope
    you're as optimistic as I am about the future of this country. The
    reason I am is because I know what we've overcome. We've overcome a lot.
    We've overcome a recession. We've overcome an attack on our country, an
    attack which, by the way, not only affected our spirit; it affected our
    economy. They estimate over a million jobs were lost after the attacks
    of September the 11th. We overcame that, those attacks, because of the
    resolve of the American people. The American people refused to be
    intimidated by coldblooded killers. We refused then to be intimidated.
    We refuse now to ever be intimidated by coldblooded killers.
        And then we had a problem in our society in that we've had some
    people that were in positions of responsibility didn't tell the truth.
    You might remember the corporate scandals. That affected the psychology
    of the country. A capitalist system requires trust. If you're going to
    invest, you need to trust the numbers. If you're an employee, you need
    to trust your employers. And yet, unfortunately, there was some
    citizenry that forgot what it meant to be a responsible citizen, and
    they didn't tell the truth.
        But we passed tough laws. I want to thank the people from the
    Congress here to help pass those laws. It is now clear we were not going
    to tolerate any dishonesty in the boardrooms of our country. People will
    be held to account. And we overcame that.
        And then, as you know, I made a tough decision about keeping our
    word and about making this country secure and the world more peaceful,
    and we went to war. And I committed, along with other nations, brave
    sons and daughters of our respective countries to deal with the
    tyrant who refused to yield to the demands of
    the world. And now he sits in a jail cell, and Iraq is free.
        We marched to war, which affected the economy. It's hard to be
    confident about the future when you look on your TV screens and you see
    the banner ``March to War.'' As decisionmakers and entrepreneurs, it had
    to be an unsettling time to plan for the future, when you've got a
    country marching to war. Now we're marching to peace. We're marching to
    peace. A free Iraq is going to help change the world. A free Afghanistan
    is changing the world. The world is becoming more peaceful.
        In other words, we've overcome a lot, and the statistics show it.
    We're growing. Our economy is the strongest of all the major
    industrialized nations. It's a growing economy. I just mentioned
    homeownership. We've got more people owning their home than ever before.
    We're closing the--there's more minority homeownership in America. And
    that's what we want. We want people owning something. We not only want
    them owning their own business; we want people owning their own home and
    owning and managing their own health care accounts as well. We're going
    to discuss that in a second.
        The interest rates are low, and inflation is low. We had a great
    report yesterday on the manufacturing sector. Things are looking up, but
    there is more to do--there's more to do.

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        I think one of the reasons why we're doing so well is because we cut
    the taxes right at the right time. I went to Congress and said, ``Look,
    we've got a problem. We've got some hurdles we've got to overcome. We've
    got to overcome a recession. We've got to overcome attacks. We've got to
    overcome all the things you heard about.'' And Congress responded,
    thankfully, and passed robust tax relief. We cut the taxes on everybody
    who pays taxes. We increased the child care--the child credit to help
    people with families. We reduced the marriage penalty. By the way, it
    doesn't make any sense to penalize marriage in the Tax Code. We ought to
    be encouraging marriage, not penalizing marriage.
        And we put the death tax on the road to extinction, which is good
    for entrepreneurs and farmers and ranchers. People say, ``Why did you do
    that?'' Well listen, if you're a small-business owner, you ought to be
    able to leave your assets to whomever you choose. You've worked all your
    life to realize a dream. You build up your asset base. You build up your
    company. You pay taxes when you're successful, and then you have to pay
    taxes again when you die. That doesn't make any sense. We want these
    owners of businesses to be able to pass them on to whoever they choose
    to pass them on to, without the Government getting in the way again.
        And so we've worked hard on good, smart economic policy. And the
    entrepreneurial spirit is strong, and one of the reasons why is because
    the tax cuts pertained directly to small-business owners. Most small
    businesses are Subchapter S corporations or sole proprietorships. And
    when you're a Subchapter S or a sole proprietorship, you pay tax at the
    individual income-tax level. So when you hear people say we cut
    individual income taxes or tax on the rich, really what you ought to put
    in your mind is these were taxes to help the entrepreneurial class of
    America. Small businesses benefit. And since most new jobs are created
    by small businesses, it makes sense to have economic policy directed at
    the small-business sector. And the entrepreneurial class is expanding,
    and it's strong, and we're adding new jobs. And there's more to do.
        And here's some things we need to do. First, we need to make the tax
    cuts permanent. If you're a mother or a dad who received tax relief as a
    result of the child credit and you're beginning to plan for your future,
    it is unsettling to know that Congress hasn't resolved this issue yet.
    If they don't make the tax cuts permanent, they're raising the taxes on
    the hard-working people in America. We need tax relief. And at the very
    minimum, Congress needs to make sure that the child credit and the
    marriage penalty relief and the 10-percent bracket are made permanent.
    And I'm calling upon them to do so.
        Business leaders need permanency in the Tax Code. They don't need to
    be worried about whether the taxes are going to go up this year or next
    year. They don't need to be worried about whether or not the
    deductibility aspect of the tax relief remains steady or not. We need
    permanence in order to make sure that jobs don't go overseas, for
    example. We need Tax Code permanence to make sure that job growth is
    strong here at home.
        We need an energy bill. If you're a manufacturer, it's hard to plan
    if you're worried about your--either your energy costs or whether you're
    going to have energy at all. Congress needs to get us an energy bill. If
    they're interested in jobs staying here at home, if they're interested
    in creating an environment in which we're competitive, we need an energy
    bill, one that encourages reliability for electricity and one that
    encourages conservation and helps us become less dependent on foreign
    sources of energy.
        We need less regulations. I suspect--we met with a homeowner--
    homebuilder yesterday, Congressman.
    Remember the guy? He was upset that he had to fill out forms at the
    Federal, State, and local level in

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    order to build a house. But he also made a pretty valid point. He
    pointed to one of the new homeowners there and said, ``By the way, every
    form I fill out costs me money, and you have to pay.'' We need
    regulatory relief. I suspect these businessowners, if they were honest
    with you, say they spend too much time filling out the forms. And I,
    frankly, can't assure them that anybody has ever read the form here at
    the Federal level.
        We need to open up markets for U.S. products. See, our markets are
    pretty well open. Both Republican and Democrat Presidents in the past
    have said let's keep our markets relatively open for the consumers of
    the country. Now we've got to make sure that if our markets are
    relatively open, then others need to open up theirs. It's only fair. So
    when you hear me talking about trade, really what I'm talking about is
    let's make sure we're treated fairly. Let's make sure the playing field
    is level.
        We can compete with anybody. At least, I think so. That's why the
    economic isolationists have it wrong. That's why the people here in
    Washington--see, that's the message the pessimists send. They say, ``We
    better put up walls and barriers between America and the world, because
    we can't compete.'' That's not what I think. I think we can compete with
    anybody.
        My job is to make sure that playing field is level and let the
    American workers out-produce anybody in the world and let our farmers
    outplow anybody in the world. We're good at a lot of things, and we
    ought to be selling our products. Heck, we're 5 percent of the world's
    population, which means there's 95 percent of the people ready for
    products that say, ``Made in the USA.'' This administration will reject
    economic isolationism, for the good of our workers.
        And finally, to the point we're here to discuss. In order to make
    sure America remains a competitive place, in order to make sure that we
    can expand the job base where people can find work, in order to make
    sure the entrepreneurial spirit remains strong, we need to address the
    issue of the cost of health care. The rising cost of health care affects
    these good folks' ability to hire workers, and we need to address that.
    I want to talk about some practical ways to address the rising costs of
    health care.
        But first, it's important to understand we have a struggle here in
    Washington. It's a philosophical struggle. It's the difference between
    the decisionmakers in health care, who should be the decisionmaker. I
    believe strongly the decisionmakers ought not to be the Federal
    Government and Federal bureaucrats. I think the decisionmaker in health
    care ought to be individuals and employers.
        And there's a philosophical divide, and it's part of the debate. The
    debate is whether or not the marketplace ought to have a function in
    determining the cost of health care or whether or not the Federal
    Government ought to make all decisions. I've made my stand. I believe
    that the best health care policy is one that trusts and empowers
    consumers and one that understands the market.
        Now, there are some things the Federal Government has got to do to
    make sure health care is reasonable and sound, one of which is to expand
    what we call community health centers. In other words, we recognize
    there are people who have trouble getting health care, and we need to
    address those needs. And to me, an efficient and appropriate way to do
    so was to expand the number of community health centers, primary care
    providers for poor people in the country.
        And we've done so. We've opened or expanded 600 centers since 2001.
    There are 3 million more people now serviced by these community health
    centers. My goal is to expand--open and expand another 600 by 2006. And
    I appreciate the Congress working on this. This is a smart way to make
    sure that health care is delivered to people who can't afford health
    care. And

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    it's a smart way to get people out of emergency rooms. Many times people
    go to emergency rooms, which is costly health care, for primary care
    needs. And community health centers work, and they make a lot of sense.
        Secondly, we dealt with Medicare, as you might have heard. This is
    an issue that had been passed on from Congress to Congress, an issue
    that people talked about, but nobody wanted to do anything about it. I
    felt we had an obligation to our seniors, as did Members of the United
    States Congress, to provide a modern system, a reformed system--a
    system, frankly, that hadn't been changed much since Lyndon Johnson
    first introduced Medicare.
        And it was high time we put a new system in place, one that said
    there needs to be prescription drug coverage for our seniors. And after
    all, if Medicare covers a heart operation that costs a lot of money for
    the taxpayers, doesn't it make sense to cover the medicine that might
    prevent the heart operation from having to happen in the first place?
    And that's a new element involved in Medicare, thanks to the reforms of
    Congress.
        We want our seniors to have choices. There's some people in
    Washington who resisted that aspect of the Medicare bill because they
    want the Government making choices for the patients. It's a different
    way of thinking than our way of thinking. Our way of thinking is, the
    more choices seniors have, the better the Medicare system will become.
    And so an inherent part of the Medicare reform was to trust people with
    their decisions. And so you'll see a much more vibrant private sector
    involved now with the delivery of services to Medicare patients.
        This year we're going to put out a Medicare--a drug discount card
    for our seniors that will save between 10 to 25 percent off their drugs,
    which is positive. Next year we're going to have preventive screenings,
    and the next year the drug benefit will kick in to Medicare. So we've
    addressed that aspect of medicine.

        Thirdly, we passed what's called health savings accounts. You're
    going to hear an interesting discussion on health savings accounts. Part
    of the purpose of the discussion is to put meaning behind, like,
    letters. In Washington you hear, ``Oh, we got you HSAs.'' And the
    average person out there goes, ``Huh? HSA?'' So we're going to talk
    about health savings accounts to explain what they mean.

        They basically work this way: You or your employer buys a low-cost
    insurance policy to cover major medical bills. And what happens, by the
    way, if you trust the market, if you devolve away from Federal control
    of health care, then the market begins to respond, and now more
    insurance companies are beginning to provide policies that provide
    coverage for major medical.

        And then you take that policy and you combine it with an HSA, which
    means you can contribute money tax-free, that earns interest tax-free,
    that can be withdrawn tax-free to cover other medical expenses. Now, the
    advantage of this plan is--the tax-free is an advantage, by the way. If
    you're putting money in tax-free and it accumulates tax-free and you can
    take it out tax-free, that's the beginning of a pretty good deal for the
    individual.

        But there's also some other advantages. You're the decisionmaker,
    not a bureaucrat in an HMO. You get to make the decisions. You get to
    decide. There's incentive built in to make the right choices in your
    life. When, all of a sudden, when you see your savings account--it
    covers your incidental costs, and the major medical, of course, covers
    the big costs--you begin to make wiser decisions. All of a sudden, it
    makes sense to start walking five times a week to save money. It's your
    money, and then it rolls over, and you can build up quite a healthy
    account.

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        But the good news as well is this: Inherent in the health savings
    accounts are savings, savings for employers, savings for employees. In
    other words, one way to deal with the cost of health care is to push for
    health savings accounts. You're going to hear an interesting discussion
    on this today.
        Another way to make sure that small businesses can survive and
    provide care for their employees is through association health plans.
    These would provide small businesses the same opportunity that big
    businesses get, and that is the economies of scale, the economies of
    purchase, the ability to share risk in larger pools, which drives down
    the cost of health care for small businesses.
        These plans are resisted here in Washington by special interests.
    We're trying to bust through the special interests to make sure that
    small businesses have got the same advantages of big businesses. And
    there's some good law passed out of the House of Representatives, stuck
    in the Senate, like a lot of other things are stuck in the Senate. And
    they need to get it out, for the sake of controlling health care costs.
        You hear a lot of rhetoric in Washington about jobs and job creation
    and outsourcing. The best way to deal with job creation and outsourcing
    is to make sure our businesses are competitive here at home. The more
    competitive we are here at home, the better it is to do business at
    home, the more likely it is we'll keep jobs here at home. And
    association health plans is one such way.
        And there's another way we can help control the cost of health care.
    I mentioned Congressman Greenwood. He is
    fighting the ultimate entrenched interests and special interests, and
    that is the lawyers who love the fact that you can sue right and left in
    America. That's what he's fighting. He understands available and
    affordable health care is affected by frivolous and junk lawsuits. It's
    an issue--it's a national issue.
        When I first came up from the Governor, I said, ``We'll just let the
    States deal with the medical liability reform.'' And then I saw what the
    practice of defensive medicine does to our budget. That's--defensive
    medicine means we're going to practice more medicine than we need to in
    order to make sure we've got a good case in the court of law when we get
    sued. See, everybody is getting sued. It's like a giant lottery. ``I'm
    just going to sue and sue and sue, and maybe I'll get lucky and win one
    of those settlements where I get 40 percent of the take.'' But it's
    harming our society. It's harming people who are trying to create jobs,
    because it's running up the cost of their health care.
        And so I took a look at the cost to the Federal Government. Imagine
    what the Federal Government is paying. We pay Medicaid and Medicare and
    veterans' health care costs, all of which are affected by the practice
    of defensive medicine as a result of frivolous lawsuits. And so I said,
    ``Well, let's get to work on this issue. Let's take on the special
    interests here in Washington, DC.''
        And Congressman Greenwood stepped up
    and got a good bill out of the United States Congress. I said, ``It's a
    national problem that desires a--needs a national solution.''
    Congressman Greenwood responded. We basically said, ``If you get hurt by
    a bad doc, you get paid the economic damages.'' That's fair. That makes
    sense, but there needs to be a cap on noneconomic damages at $250,000,
    so the settlements are reasonable, not outrageous. And of course, if
    there is a need for punitive damages, they've got to be reasonable. And
    Congressman Greenwood is willing to be reasonable on such an issue.
        Medical liability reform will make it easier for people to afford
    health care, which will make America more competitive a place. It means
    we're more likely to hire people right here at home. His bill got out of the House. It's stuck in the United
    States Senate. The trial bar won't let it

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    out. For the sake of good health care, for the sake of job creation, for
    the sake of expanding--an expanding economy, we need medical liability
    reform now.
        Okay, you've heard enough from me. Roman is with us. Roman, tell us your business. He's from
    Knoxville, Tennessee. It doesn't sound like it.
        Roman Botcharnikov. Well, yes, I'm
    from Russia originally.
        The President. Are you? Raised in Russia?
        Mr. Botcharnikov. Yes.
        The President. Born in Russia?
        Mr. Botcharnikov. Born and raised
    there.
        The President. Where?
        Mr. Botcharnikov. Sochi, it's Black
    Sea.
        The President. Yes, I know Sochi.
        Mr. Botcharnikov. It's a resort area.
    I think you've been there.
        The President. No, I haven't been there, but Vladimir Putin called me from there. He's been there. [Laughter]
        Mr. Botcharnikov. Putin, yes. He's
    always there.
        The President. It's a nice place.
        Mr. Botcharnikov. Yes, it is.
        The President. So when did you come to the States?
        Mr. Botcharnikov. Well, I'm a
    professional coach, actually, and I coach pole vaulting. And I coach
    American recordholder and silver medal winner at the Sydney Olympic
    Games.
        The President. Really?
        Mr. Botcharnikov. Yes. That's my
    profession. That's how I end up----
        The President. Have you got somebody vaulting in the Olympics this
    year?
        Mr. Botcharnikov. Well, we're
    getting--we have to upgrade our medal from silver.
        The President. Yes.
        Mr. Botcharnikov. There's only one
    way.
        The President. That would be gold. [Laughter] Okay, so you're a pole
    vault coach, but you're also a businessman. First of all--let me just--
    I'm fascinated by knowing this--this is the first I've heard
    he came from Russia. So what age were you
    when you came?
        Mr. Botcharnikov. Well, I actually
    went to Australia first when I was 19. Then I lived there for 3 years
    and then came here in '92.
        The President. So at 22 years old.
        Mr. Botcharnikov. Yes.
        The President. Fantastic. Why did you come here?
        Mr. Botcharnikov. Well, it's a land
    of opportunity. The United States is unbelievable country, unbelievable.
    People all over the world look up to United States and see what's going
    on here and have the business. You were just talking about products made
    in USA. All over the world, people want ``Made in USA.'' They do. And
    everybody dreams to come in here and test--and everybody is allowed--
    there's a good environment here where entrepreneurs can succeed. I had
    my business--several businesses actually, kind of expanding and
    expanding. And how I got in--why we have a hair design studio, which----
        The President. Yes, I was wondering about the hair design thing.
    [Laughter]
        Mr. Botcharnikov. Yes, finally.
    [Laughter] Third attempt. My wife----
        The President. Is it wigs or--[laughter]--what is your business?
    Tell us your business, how you started it.

    [At this point, Mr. Botcharnikov, business director, Salon Azure,
    Knoxville, TN, made further remarks.]

        The President. Listen, here's the thing. Here's what people have got
    to understand. The combination of his premium payments for major medical
    insurance--major medical means if you have a real expensive problem--
    plus what he puts into his savings
    account equals a savings of $200 a month, and yet he gets as good a
    coverage----
        Mr. Botcharnikov. Better.
        The President. ----even better coverage. And that's the point. This
    is a new product. This is a new idea, and people--one of

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    the reasons we're having this discussion is to encourage employers and
    individuals and employees to look into what's called health savings
    accounts. They used to be called MSAs; they're now called HSAs.
        And I just--again, I repeat Roman's
    story. He puts 177 in for his insurance, monthly premium. He puts $100
    in a month for his savings account. It goes in tax-free. It accumulates
    interest tax-free. When he withdraws it to pay for medical bills, it's
    tax-free. If he doesn't use it all, he rolls it over to the next year.
    It's a savings account to pay for medicine, and yet, he's saving $2,400
    a year.
        It's an interesting, interesting opportunity, and I want to thank
    you for describing it.
        Mr. Botcharnikov. It is kind of
    unbelievable to me.
        The President. Yes, it is unbelievable, just like America.
        Okay, Sandy Calohan is with us. She is the
    president of Carolina Paper & Builders Materials, Inc. By the way, when
    you hear her talk, she is a--first of all, there's a lot of female-run
    businesses in America, which means the country is better off. There's
    a--the fastest growing component of the entrepreneurial class is women-
    owned businesses. They're being created, like, at two times the rate
    other businesses are, which is a really exciting part about the country.
    Secondly, she's a Subchapter S corporation. She's part of the rich.
    You'll hear, ``taxing the rich.'' That means we're going to tax
    Subchapter S corporations. These are people who are actually hiring
    people, people who are expanding the job base because they're willing to
    take risk.
        And so--and by the way, just an aside, just to keep everybody's
    perspective properly focused, when you're running up individual tax
    rates, you're taxing small businesses just like Sandy.
        Welcome.

    [Sandy Calohan made brief remarks.]

        The President. And the--see, what's interesting about how a
    marketplace works, all of a sudden Sandy bugs
    her provider, and the provider begins to say, ``Well, gosh, maybe
    there's a demand here for a different kind of product. We'd better get
    involved. If we want to keep her business, we better come up with a new
    way to deal with her problems.'' I think what you're going to find is,
    is that the more widespread the notion of health savings accounts
    become, the more carriers will start providing this kind of insurance.
    That's how a market works. That's in stark contrast to a Government-run
    policy in which there is no market. It's like, ``Here it is, as decided
    by bureaucracies and/or law.''
        And I thought it was a very interesting story that you've been
    bugging the guy for 7 years. A new product becomes available as a result
    of Government action, which I find pretty interesting, isn't it? I guess
    it's the tax aspects that required Government action in the first place.
    But--and all of a sudden, these products are becoming more available,
    and Sandy has got one. And she is a satisfied
    customer, but most importantly, so are her employees, I presume?
        Ms. Calohan. Yes, we are. It was either--
    we were going to have to do something because it was--the cost of health
    insurance was getting prohibitive. We weren't going to be able to have
    any if we didn't do something.
        The President. Yes.
        Ms. Calohan. Because I just can't--
    $100,000 a year is a lot of money for health insurance for 19 people.
        The President. For a small business. Yes. The other day--are you
    going to hire anybody this year? Yes, hope so. Me too. [Laughter]
        Small businesses are expanding, and one way to help them is so they
    can control their cost, health care costs. It's a major part of a
    person's outlook. A small-business owner's outlook is improved when
    there's a new product available that says, ``Gosh,

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    I'm meeting the needs of my employees and also been able to better
    control costs.''
        Dan Schmidt is with us. He's the CEO of
    Mercury Office Supply, St. Paul, Minnesota. How's the weather up there?
        Dan Schmidt. Well, it's beautiful. You've
    just got to think of the bright side, ice fishing--the positives.
        The President. Yes, okay. [Laughter]
        Mr. Schmidt. That's the key. You've got to
    be active in winter.

    [Mr. Schmidt made brief remarks.]

        The President. Yes, you see what he's saying
    is, what's interesting about this, that one of the great elements about
    health savings accounts is that all of a sudden the consumer starts
    being more in charge of the decisionmaking process. As he said, the
    consumer can make choices. And when consumers make choices, it then
    encourages them to start making healthy choices, particularly when you
    get to save money, when it's like your money on the line.
        And remember, you save money. People say, ``Well, why would I want
    to put money aside when it's being paid for me?'' Well, the answer is,
    because the costs of the HMO plans on a monthly basis far exceed the
    costs of major medical insurance, plus your own savings. In other words,
    you're saving money, but you're also watching your money grow if you
    start making healthy choices. People say, ``Will there be gaps in
    coverage?'' No. You get the same amount of health care coverage. I
    presume your employees are not complaining about the fact that they
    don't get coverage?
        Mr. Schmidt. No. And that was one of the key
    things. We were actually looking at, can we afford this as a small
    business? Are we going to have to drop insurance? And morally and
    ethically, I had to take care of my employees. It's just something that
    every American should do.
        The President. Yes, see, you're part of the responsibility era. You
    see the responsibility that comes with owning your own small business. I
    love that sentiment. ``I have a moral responsibility to take care of my
    employees,'' says Dan. And that's why the
    country's great, by the way. There's a lot of people who have that great
    sense of responsibility. That's why it's important to keep the
    entrepreneurial spirit strong. Small-business owners know that they
    can't survive without taking care of their employees. It's kind of a
    necessity, isn't it? Not only do you have a good heart, but there's an
    economic necessity involved as well.
        I want to thank you for coming, Dan. By the
    way, he's a Subchapter S corporation, which means if Congress doesn't
    act, they're going to be raising taxes on people like Dan Schmidt.
    Employers who are looking to expand--he's got 13 employees. I know
    that's not a lot for some of the people here in Washington, but there
    are millions of companies that employ 13 people or less. And there's a
    lot of small businesses. And it's that vibrancy in the private sector
    that really defines a strong economy. The vibrancy of owning your own
    business makes people come from Russia with a great dream. And Congress
    must understand that good policy is necessary to keep these people
    energized and excited so that the small-business sector is strong. If
    you've got too much Federal Government intruding into the lives of small
    business, it's going to make it hard for us to expand the job base.
        Now, speaking about people who are interested in expanding the job
    base, Patty Orzano is with us. Patty, I'm
    glad you're here. She owns her own business. Isn't that true?
        Patricia Orzano. I'm a partner with my
    husband for over 30 years in 7-11 franchises.
        The President. In more ways than one. [Laughter]
        Ms. Orzano. Now--okay--[laughter]--I'm
    the managing partner. [Laughter]
        The President. I've got that relationship in my household too.
    [Laughter]
        Good job, everybody.
        Ms. Orzano. Mr. President, I'd like to
    thank you for coming back to New York

    [[Page 403]]

    last week. New York does love you, and we need you back.
        The President. Thank you.

    [Ms. Orzano made brief remarks.]

        The President. I appreciate that. Listen, what you're hearing is the
    call for help. By the way, Patty is a 7-11
    franchisee, owner, pays taxes, by the way, business taxes at the
    individual income-tax rate. So when you hear them talking about, going
    to run up these--tax the rich, that's who she's talking about, right
    there.
        And she is--wants to stay in business.
    She wants to expand. She doesn't need the added expenses. She's got huge
    medical costs already. Perhaps HSAs will help you, but more importantly,
    AHPs, associated health plans, will, because basically what she's saying
    is, is that ``I need to be able to afford--have a basic health care
    plan, free of mandates, available to my employees, where I can share
    risk with other small-business owners.'' That's not too much to ask, is
    it, to allow small-business owners to have the same benefits as large
    businesses in America? That's what she's asking for.
        And frankly, that's what I'm asking Congress to do, to provide small
    businesses with the same opportunity that big businesses have. It's a
    practical way to deal with the costs of health care. It will allow this
    good lady to feel comfortable about expanding her business and, at the
    same time, taking care of her employees. The costs of health care, the
    rising costs of health care, for a lot of reasons, are affecting the
    ability of the Pattys to be able to be comfortable in her relationship
    with her employees and expand her business.
        And the option, by the way, is not to say, ``The Federal Government
    ought to take it over, take over the health care industry.'' That would
    be the absolute wrong prescription. The right prescription is reasonable
    policy, one of which is associated health plans.
        We've got with us the president of R.W. Murray Company, Bill
    Fairchild. By the way, Subchapter S
    corporation--he pays tax at the individual income-tax level. The
    rhetoric that says, ``Oh, we're going to raise the taxes on a certain
    group of people,'' that's who they're talking about. They're talking
    about a lot of others as well--don't get me wrong--but small businesses
    will pay higher taxes. It doesn't make any sense to be raising the taxes
    on small businesses as we're starting to recover. Seventy percent of new
    jobs are started by small-business owners. Why would you penalize those
    who are creating the new jobs? You don't want to be doing that.
        Anyway--Bill, welcome. What do you do?

    [William Fairchild made brief remarks.]

        The President. You understand what he's saying is this, is that if you're able to spread
    risk, it lowers the cost of buying health care. In other words, if an
    insurance carrier can spread risk across a variety of people or a
    variety of firms, it makes it more likely his health care goes down. If
    he's in the market bidding for a health care plan for 26 people, it's a
    lot different than if you're in the market bidding along with 260,000
    people. And that's--by spreading risk, it reduces the cost of health
    care to him.
        That's all we're asking for, is to give small businesses the
    opportunity to spread risk, not only within the State of Virginia, but
    he ought to be able to share risk with small contractors in Crawford,
    Texas, for that matter. What we're interested in is a market working so
    that people can hire people. That's what we want. That's the public
    policy ramifications of good health care insurance.
        And the option, again, the other alternative you'll hear in
    Washington is, ``All this stuff doesn't work. Let's block this from
    happening because we want the Federal Government to make all the
    decisions. We want the Federal Government to be

    [[Page 404]]

    the decider. We want the Federal Government to be the consumer and the
    provider.'' And in my judgment, that would be a disaster for small
    businesses and consumers. It would make the health care cost more likely
    to go up than go down. It would mean the health care wouldn't modernize
    like it has been lately, and we wouldn't be on the leading edge of
    innovative change.
        And so good health care policy first has to make a philosophical
    decision. We have to make this decision: Where do we want the
    decisionmakers to be? We want the decisionmakers to be right--these
    people right up here. This is the best health care plan, is when the
    small-business owners are involved in the market, making decisions best
    for their employees. The best health care plans are those in which
    people have control over the decisionmaking process. We've got to trust
    people to manage their own health care plans.
        You heard me talk about homeownership. An ownership society is one
    that not only encourages small-business ownership and homeownership, but
    it also encourages the ownership of your own health care plans so you're
    the decisionmaker. And that will help control the costs, which is a
    major issue as to whether or not our country remains a competitive place
    to do business and whether or not people who are looking for a job are
    able to find one.
        I want to thank the entrepreneurs who are here. You're a living
    example of what is great about America, the fact that you are able to
    dream and work--[applause]. Thank you for being such responsible
    citizens. Thank you for following your dreams. And thank you for setting
    such a great example.
        May God bless you and your families, and may God continue to bless
    our country. Thank you for coming.

    Note: The President spoke at 10:37 a.m. at the U.S. Chamber of Commerce.
    In his remarks, he referred to former President Saddam Hussein of Iraq;
    and President Vladimir Putin of Russia.