Obama: Health plan would buoy small businesses

President Obama sought Saturday to spin the national discussion back to healthcare overhaul, focusing his national address on how small businesses would be helped by reform.

Obama touted a report by his Council of Economic Advisers that concludes reforming healthcare would help small businesses by lowering the cost of providing insurance.

“These are the mom-and-pop stores and restaurants, beauty shops and construction companies that support families and sustain communities,” Obama said in his weekly address.

“They’re the tiny startups with big ideas, hoping to become the next Google or Apple or HP. And, as shown in a new report released today by the White House Council of Economic Advisers, right now they are getting crushed by skyrocketing healthcare costs.”

Obama continued his push on healthcare even while facing a splintered Democratic Party, particularly in the House.

His address came less than a day after Blue Dogs on the Energy and Commerce Committee Friday evening stood by Chairman Rep. Henry Waxman’s (D-Calif.) side and announced together that the once-collapsed healthcare negotiations are back on track.

The push on healthcare also follows the distraction of Obama’s comments on race and the arrest last week of a black Harvard professor, Henry Louis Gates.

Obama had sought to tamp down the controversy Friday by calling the Cambridge officer who arrested Gates. Obama came under criticism for saying police had acted “stupidly” in arresting Gates for disorderly conduct at his own home after Gates was mistaken for a burglar.

Obama on Saturday harkened back to the personal stories of small-business owners and returned the focus to the Council of Economic Advisers report.

The report said the U.S. healthcare system essentially imposes a tax on small businesses and their employees because of broker fees and administrative costs that are higher than what large businesses pay.

Small businesses that do provide insurance to their employees pay up to 18 percent more per worker than large firms pay for the same insurance policy, according to the report.

That means workers receive lower wages, and the cost also eats into the profits of the small businesses.

As a result, more small businesses don’t offer healthcare to their workers than larger firms. Christina Romer, chairwoman of the Council, said in a conference call with reporters Friday that employees of small businesses account for about one-third of the nation’s uninsured.

According to the report, only 49 percent of firms with 3 to 9 workers and 78 percent of firms with 10 to 24 workers offered any health insurance to employees in 2008. That compares to 99 percent of firms with 200 or more workers.

The report argues healthcare reform options supported by the president and under consideration by Congress would allow small businesses to purchase insurance though an exchange that could provide better coverage at lower costs.

Many small businesses could also receive a small-business tax credit to offset higher costs, and to encourage coverage.

Republicans have argued healthcare reform would harm small businesses by increasing their costs.

“This debate is not a political game for these Americans, and they cannot afford to keep waiting for reform,” Obama said in his address. “We owe it to them to finally get it done – and to get it done this year.”

In the GOP response to Obama’s address, Rep. Cathy McMorris RodgersCathy McMorris RodgersSome doubt McCarthy or Scalise will ever lead House GOP Young GOP lawmakers want more power GOP House super PAC reserves million in fall TV ads MORE (Wash.) said small businesses would pay a “steep price” for the Democratic healthcare plan. She noted an estimate from the National Federation of Independent Businesses that says the House healthcare reform proposal would cost 4.7 million jobs because of a surtax on the wealthy that would hit small-business owners.

But Romer said the current system is unsustainable for small businesses and their workers, since rising healthcare costs make it even more difficult for small businesses to provide insurance plans to employees.

“We’re hearing a log of claims out there that health reform will be bad for small businesses, and what we found was really the opposite,” she said.

Roxana Tiron contributed to this report