[Weekly Compilation of Presidential Documents Volume 40, Number 12 (Monday, March 22, 2004)]
[Pages 415-423]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 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--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

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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.
    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 your 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 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 
business 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--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 hadn'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

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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 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

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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 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 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?

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    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.

[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 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.

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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.

[Ms. 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, 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 just got to think of the 
bright side, ice fishing--the positives.
    The President. Yes, okay. [Laughter]
    Mr. Schmidt. That's the key. You 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,

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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?
    Patty 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 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

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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?

[Mr. 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 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.