Presumptive Democratic Presidential Nominee Obama Announces Proposal To Help Small Businesses Offer Health Insurance
Presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) on Sunday announced a proposal to help small businesses offer health insurance to employees, the New York Times reports. Obama was speaking at the National Council of La Raza's annual conference.
Under the proposal, small businesses would receive a refundable tax credit valued at as much as 50% of health insurance premiums for employees (Zeleny, New York Times, 7/14). Small businesses would have to offer a "quality health plan" for all employees and cover a "meaningful" share of the cost to qualify for the tax credit, according to Jason Furman, economic policy director for the Obama campaign. Small businesses would receive the full tax credit, which would be phased out as companies become medium sized. Parts of the plan would require negotiation with the Department of Treasury and Congress, Furman said (Trottman, "Washington Wire," Wall Street Journal, 7/13).
The proposal would cost about $6 billion annually (New York Times, 7/14). Obama would finance the proposal partly by facilitating market entry of generic versions of biotechnology medications, which would increase competition and reduce federal spending on such treatments. In addition, Obama would use some savings from a reduction in disproportionate share hospital payments. Obama credited his former rival for the Democratic presidential nomination, Sen. Hillary Rodham Clinton (D - N.Y.), for the small business tax credit idea (Reuters/Washington Post, 7/13).
Obama said, "I'm announcing my plan to provide real relief for small-business owners crushed by rising costs" (New York Times, 7/14). The proposal would "help more employers provide health benefits for their workers instead of making it harder for them," he said, adding, "We know that small businesses are the engines of economic prosperity in our communities, particularly Latino communities" (Roug, Los Angeles Times, 7/14). He added, "If you're a service worker somewhere who doesn't have health care, you're going to be able to get health care as good as the health care I have as a member of Congress" (Keffe, Austin American-Statesman, 7/14).
Obama said, "My plan won't impose any new burdens on small businesses. Instead, we'll help them not just create new jobs, but good jobs -- jobs with health care, jobs that stay right here in America, the kinds of jobs we need in our communities" (Johnson, AP/Philadelphia Inquirer, 7/14).
Rep. Nydia Velázquez (D-N.Y.), chair of the House Committee on Small Business who also explained terms of the plan to media, said she expects Obama's plan to be particularly beneficial to Hispanics, who own some of the fastest-growing small businesses in the U.S. She said, "Nearly one in three [Hispanics] don't have health care, and they are one accident or illness away from financial ruin" (Washington Wire," Wall Street Journal, 7/13).
Tucker Bounds, a spokesperson for presumptive Republican presidential nominee Sen. John McCain (Ariz.), said the proposal is an expensive mandate that would have "a devastating impact" on small businesses. He added, "This is an obvious and crude effort to spackle together a quick political fix, but it lacks specifics, lacks funding and he lacks credibility" (New York Times, 7/14).
According to the Arizona Republic, the proposal is part of an effort by the Obama campaign to attract Hispanic voters, who have become "an increasingly influential political force in electorally crucial" states (Nowicki, Arizona Republic, 7/14).