Obama’s New Health Care Policy for Small Businesses Adopts Clinton Plan

Jul 13, 2008 6:02pm

ABC News’ Sunlen Miller reports: Speaking before the National Council of La Raza in San Diego, Sen. Barack Obama rolled out a new policy in his healthcare plan: announcing that he will offer a new tax credit for small businesses that offer quality healthcare to their employees.

To note, this is an adoption of a part of Sen. Hillary Clinton’s health care plan — and one that Obama gave Clinton direct credit for during his announcement.

"Today, I’m announcing an aspect to my plan to provide real relief for small business owners who are crushed by rising costs, an idea championed by my friend Hillary Clinton, who’s been leading the way in our battle to insure every American," Obama said. "It’s a plan that would help more employers provide health benefits for their workers — instead of making it harder for them, as Senator [John] McCain would do."

On a conference call earlier in the day the Obama campaign danced around the issue of giving credit solely to Clinton for the development of his health care plan.

"Very naturally we looked at other health plans out there and Sen. Clinton was a champion of this issue and it was clearly a very good element to her plan and we’re very happy to take it on board," Obama’s economic policy director Jason Furman said. "It’s also something that several other people have covered — Dick Durbin, John Kerry — and so we took a look at a lot of people who proposed this."

Announcing his new policy rollout purposely before the Hispanic community, Obama said that small businesses are the engines of economic prosperity — especially in Latino communities.

"And under my plan, if you’re a small business that wants to provide health care to your employees, we’ll give you a tax credit to make it affordable," he 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 kind of jobs we need in our communities.

Within his remarks, Obama contrasted his health care plan with that of McCain, his likely Republican opponent in the presidential election, and issued a warning to the crowd.

"Under the McCain plan, many Americans could lose the health care that they have — and pay more in taxes for the health care that they get," he said.

Obama has been working hard to court the Latino vote. Today’s speech was the third he has made before Hispanic groups in the last few weeks. Obama told the group that their votes could make a difference in the election.

"The Latino community holds this election in its hands," Obama said. "Some of the closest contests this November are going to be in states like Florida, Colorado, Nevada and New Mexico — states with large Latino populations. "

Obama’s proposed small business tax credit comes six days after Sen. John McCain, R-Ariz., criticized the "pay or play" aspect of Obama’s original health care proposal.

Under Obama’s original proposal, small businesses that did not hit unspecified revenue thresholds would have to provide a "meaningful contribution" to their employees’ health coverage or else contribute a percentage of payroll towards a national plan.

"You have a number of companies that essentially are freeloading off of those that are covered," Obama health care adviser Stuart Altman told ABC News on Monday in reference to the Illinois Democrat’s original proposal. "The Obama plan is an attempt to level the playng field. … Just because you’re small doesn’t mean you’re not profitable."

In an interview with ABC News published on Friday, Rep. Tom Allen, D-Maine, an Obama supporter running for the Senate, objected to what he said was the impact that Obama’s original "pay or play" proposal would have on non-exempt small businesses.

"Before you say we’re going to have a mandate for an individual or a business, you really have to create the system," Allen said when asked about Obama’s original health plan. "I want to create that public plan, and then I believe that most businesses will go in that direction.

"Otherwise," he added, "you’re shutting down the smallest businesses, the ones that are on the edge. They might not be the smallest businesses always, but they are the ones most on the edge, and you don’t want to do that if you’re trying to cover everybody with health care."

Under his new proposal, Obama would provide a refundable credit of up to 50 percent on premiums paid by "small businesses" on behalf of their employees.

The Obama campaign estimates that this tax credit would cost $6 billion.

Despite offering the press an estimate of what its plan would cost, the Obama campaign will not disclose which firms constitute a "small business" for purposes of this tax credit. It also has not revealed what constitutes a "medium-sized business" for purposes of his partial tax credit.

An Obama spokesman says those details will be worked out with Congress.

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