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pd22mr04 The President's Radio Address...

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[[Page 419]]

    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 
    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?

[[Page 420]]

    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 
    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. 
    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.

[[Page 421]]

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.

[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 
    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,

[[Page 422]]

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. 
    The President. I've got that relationship in my household too. 
    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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