Contact: White House, Office of the Press Secretary, 202-456-2580

CHATTANOOGA, Tenn., Feb. 21 /Standard Newswire/ -- The following text is of remarks by President Bush in a conversation on health care initiatives:

Chattanooga Convention Center

Chattanooga, Tennessee

12:33 P.M. EST

(Continued from part 1 of 2)

We've got Danny Jennings with us.  Welcome, Danny.  You're married?

MR. JENNINGS:  Yes.

THE PRESIDENT:  Yes, you are.  And how many children?

MR. JENNINGS:  Two.

THE PRESIDENT:  Ages?

MR. JENNINGS:  Eight and 10.

THE PRESIDENT:  They're Chattanooga baseball fans?

MR. JENNINGS:  Probably will be after this.  (Laughter.)

THE PRESIDENT:  What do you do for a living?

MR. JENNINGS:  I manage a nursery in McMinnville, Tennessee.

THE PRESIDENT:  Really?  Fantastic.  Now's your chance if you want to put a pitch out there for some rhododendron.  (Laughter.)

MR. JENNINGS:  Those are coming in soon, by the way.  (Laughter.)

THE PRESIDENT:  Yes, I'm just showing off a little -- flora.  (Laughter.)

Tell me about your health care -- are you insured?

MR. JENNINGS:  No.  At the present time, no.  I'm in between insurance companies.  I've had problems in the past with the rising cost of health insurance and, of course, the deductibles.  Then there's preexisting conditions, which drive the price up even more.

THE PRESIDENT:  So here's a guy that's got two children, eight and 10, and young family in America has got no health insurance.  And it's got to be a little bit intimidating for you.

MR. JENNINGS:  Absolutely.  I own my own home and that's very intimidating.

THE PRESIDENT:  One of the reasons I've asked Danny to come is because I want to help you understand how the standard deduction, in his case, of $15,000, will help him better afford health insurance.  As I understand it right now, that when you -- it costs Danny about $450 a month to be able to get insurance to cover his family's needs.

MR. JENNINGS:  Yes.

THE PRESIDENT:  If we can get Congress to change the tax code -- now, here's a fellow working for a small company that does not have insurance, can't afford to go on the market himself, but if we can get the standard deduction passed so that he's able to deduct $15,000 off his income tax and payroll tax, he saves about $4,500 in a year in taxes, which means that the cost per month for him and his family for health insurance goes down to $47 a month when you apply the tax savings.

The reason I asked Danny to come is because I want you to understand that the standard deduction can mean a lot to a fellow who's working and trying to be able to afford private health insurance.  In other words, there's more money in his pocket as a result of the tax standard deduction, and there's more peace of mind knowing that his kids and that he and his wife are covered. 

So I want you to do me a favor.  You don't need to write Wamp, he's on board.  We'll find you another congressman to write.  (Laughter.)  Sounds pretty good. 

MR. JENNINGS:  Absolutely.

THE PRESIDENT:  Yes, I think it will work for you, Danny.  I really do.  And Danny -- I'm concerned about a lot of our citizens, but I don't like to think about a society where the cost of health care has gotten such that a fellow who is trying to do the best he can for his family -- got him a house, got him a steady job, but he can't afford health care.  And here's one idea for the people of this -- for the Congress to think about.  Lets Danny make the decision, he gets to buy health insurance, but he's got $4,500 to do so on an annual basis.

Thanks for coming.  (Applause.)

Marty Ginn.

MS. GINN:  Yes, sir.

THE PRESIDENT:  Glad you're with us.

MS. GINN:  I'm glad to be here. 

THE PRESIDENT:  What do you do for a living, besides being  -- she's got the toughest job in America, and that's being a single mom.  That's the toughest job, by the way, in my judgment.  (Applause.)  So what do you do?

MS. GINN:  I'm an office manager in McMinnville, Tennessee.  I've been working there for about 10 years, and I love it.

THE PRESIDENT:  Do you?

MS. GINN:  Yes, I do.  I'm very good at it.

THE PRESIDENT:  It's important to have high job satisfaction.  Are you good at it?

MS. GINN:  Yes, sir.  (Laughter.) 

THE PRESIDENT:  Give the girl a raise, will you?  (Laughter.)  And so, do you have health insurance?

MS. GINN:  No, sir.

THE PRESIDENT:  Yes, so you work for a company that does not offer health insurance?

MS. GINN:  Yes, sir.  I have a -- I have inquired on some insurance, but I have a preexisting condition.  I have trouble with my left knee.  And the quotes were just outrageous.  So I'm just kind of stuck.

THE PRESIDENT:  So you'd rather go without insurance

-- or not rather go -- you just can't afford it.  Let me put it --

MS. GINN:  There you go.

THE PRESIDENT:  It's not a matter of rather, it's a matter of necessity.

MS. GINN:  Can't afford it.

THE PRESIDENT:  Since Marty is a single person, she gets to deduct $7,500 off of income and payroll taxes, which would yield her about $1,900 in savings on an annual basis, which could then be applied toward health insurance.  In other words, Marty can't afford health insurance; the plan needs to -- we've got to have something in government to help encourage people who cannot afford health insurance to do so.  One is to help deal with the cost, and we've laid out some ways to do it, but another is to change the tax code.

She doesn't get the same benefit when she buys health insurance as somebody working for a larger company.  That's patently unfair.  I know it wasn't designed that way when they did that in the health care system.  But it's unfair for her.  And all I'm going to ask from people in Congress is, be fair.  Treat the Martys of the world in a fair way.  And if we believe, in treating her fairly she'll be able to better afford health care.

MS. GINN:  That would be great.  (Laughter.)

THE PRESIDENT:  Good.  And you've got your daughter out there.  She's 21?

MS. GINN:  My son.

THE PRESIDENT:  Your son?  Yes.

MS. GINN:  My son.

THE PRESIDENT:  As I said, your son.  (Laughter.) 

MS. GINN:  Trust me, he's a son.  (Laughter.) 

THE PRESIDENT:  That's good.  Is he listening to his mother?

MS. GINN:  He always does.

THE PRESIDENT:  Yes.  Mine can't say the same thing.  (Laughter.) 

MS. GINN:  The Marines taught him well.

THE PRESIDENT:  He's a Marine?

MS. GINN:  Yes.

THE PRESIDENT:  Yes, ma'am.  I appreciate it.  (Applause.)  I know you're proud of him.  Where is he?  Is he out there?  Yes, sir.  Thanks for serving.  (Applause.)  Thank you.  Yes, sir.  He yelled, "Semper Fi," at the Commander-in-Chief.  Proudly received.

MR. GINN:  Hoo-ah.

THE PRESIDENT:  There you are.  (Laughter.)  That's enough.  (Laughter.)

Amy Childers -- isn't that right?

MS. CHILDERS:  Yes, sir.

THE PRESIDENT:  So are you gainfully employed?

MS. CHILDERS:  Yes, sir.

THE PRESIDENT:  What do you do?

MS. CHILDERS:  I'm an interior designer in Nashville, Tennessee.

THE PRESIDENT:  Great.  Came over with the Governor?

MS. CHILDERS:  I did.

THE PRESIDENT:  That's good -- from the same area.  Nashville is an exciting town, isn't it?

MS. CHILDERS:  Yes, sir.

THE PRESIDENT:  It really is a vibrant town, it's an exciting place.  Thanks for coming.  And so who do you work for?

MS. CHILDERS:  I work for Lumen Lamps.

THE PRESIDENT:  Yes.  That means you sell lamps?

MS. CHILDERS:  I do.  (Laughter.)

THE PRESIDENT:  I'm occasionally in the market.  (Laughter.)  And so what's your -- give us a feel -- your company -- once again, she works for a company that does not provide health insurance.

MS. CHILDERS:  We are a very small company.  I'm the only full-time employee besides my employer, and he can't afford for us.  And so I turned 35 last summer and my --

THE PRESIDENT:  You don't look a day over 34.  (Laughter.)

MS. CHILDERS:  Most people say 22, but, thanks.  (Laughter and applause.)

THE PRESIDENT:  Yes, I'm not running again.  (Laughter.)

MS. CHILDERS:  I'll let you slide.  (Laughter.)

THE PRESIDENT:  Who invited Amy?  (Laughter.)

MS. CHILDERS:  Okay.  So I turned 35 and my cover went from $130 a month to $210.  So my dad wasn't supposed to know this -- I dropped that health insurance --

THE PRESIDENT:  He knows it now.  (Laughter.)

MS. CHILDERS:  Yes, he does.

THE PRESIDENT:  I hate to tell you, Amy, but you know those cameras back there?  (Laughter.)

MS. CHILDERS:  He's over there.

THE PRESIDENT:  Where is your dad?  Is he here?  Good.  Okay, well, I'll see him afterwards.

MS. CHILDERS:  All right.

THE PRESIDENT:  I'll cover for you.  So, anyway, you dropped your health insurance because --

MS. CHILDERS:  It went up to $210 a month.  And so I got one that's $5,000 deductible at $100 a month.

THE PRESIDENT:  Here's the thing.  Amy -- look, I can't tell you how many people there are that work for small businesses who cannot afford insurance.  I mean, a big slug of the uninsured in America works for small business companies -- by the way, of the uninsured are young people who never think they're going to get sick and don't bother to buy insurance.  But a big slug work for people that are struggling to make ends meet. 

It's hard to be a small business owner.  It's hard to survive in a competitive world.  And, yet, we've got to make sure our small businesses are strong -- after all, they create 70 percent of the new jobs in America.  We want the entrepreneurial spirit to be strong.  One of the roadblocks to success is the cost of health care.  And so here's a man who's got a small business, he has to make a difficult decision not to provide insurance for his employee.  He has to decide.

Doesn't it make sense to change the tax code so that Amy Childers can better afford insurance?  And so if she gets the $7,500 deduction, she saves about $2,000 a year -- which means something other than the kind of plan you have is more affordable to you.  Isn't that right?

MS. CHILDERS:  Yes.

THE PRESIDENT:  See, the reason I've asked these three folks to come to talk about -- first of all, I just want people to be able to identify with what it means to be in a society in which you either don't have health insurance or you don't have adequate coverage.  And there's a lot of our citizens who are just that way.  And we've got to do something about it.  It's not right and it's not fair.

And there's an interesting debate going on, how best to solve the problem.  Some say, well, maybe the federal government ought to do it all.  I don't believe that.  I believe we can do a combination of good policy with the tax code, good policy to help those who we have an obligation to help, good policy with state and good policy with charity -- to make sure that we're able to provide that mosaic so that people can know that the society is better off as a result of accessible and affordable health care.

Thank you for coming, by the way.  You did a wonderful job.  (Applause.)

Will Smith, living the American Dream.

MR. SMITH:  Thank you, Mr. President.

THE PRESIDENT:  Is that an accurate statement?

MR. SMITH:  Yes, it's a correct statement.

THE PRESIDENT:  You know, I love a society where a fellow like Will Smith says, I want to start my own business.  We want people from all across the country saying, I want to take a risk and start my own business.  It's good for the country.  Ownership is good for the country.  Creating jobs through the small business sector is good for the country.  

So tell us what you're doing. 

MR. SMITH:  All right, I'm a developer, sir.  I was one of the -- we're the largest real estate developer in the city right now.

THE PRESIDENT:  Really?  Good.  Married?

MR. SMITH:  Yes, married.  Four kids.

THE PRESIDENT:  That's good.  And the name of your company?

MR. SMITH:  WAS Properties.

THE PRESIDENT:  Put his wife's name in the deal.  Will, and your wife's name is Andrea.

MR. SMITH:  Andrea.

THE PRESIDENT:  See, W-A.  Get it?  Will and Andrea?  (Laughter.)  And Smith -- S.  (Laughter.) 

MR. SMITH:  That's correct.

THE PRESIDENT:  That is a smart move to put the wife's name in the company.  So what are your problems?

MR. SMITH:  Well, I have nine full-time employees, and I count my contractors, which is about 50 -- subcontractors -- which is about 50 employees.  And in the nine employees that I have full-time, they're not only just my employees, they're part of my family because they've been with me for about four or five years.  And we just can't afford insurance for them.

THE PRESIDENT:  First of all, I want you to hear the spirit that he just talked to me.  He said, these are my close friends.  In other words, these are more than just employees.  A CEO of a small business views, many times, views the employees as family.  And so he's concerned about whether or not he is providing for his family, which is, frankly, an obligation of people who run a company.  But the problem is, insurance has gotten too expensive to be able to do that, I guess.

MR. SMITH:  Exactly. 

THE PRESIDENT:  So I got an idea for you -- two ideas.  One is to look at health savings accounts -- high deductible plans with a cash contribution to take care of ongoing medical expenses.  If your employee does not spend the money, he or she gets to keep it and earn money tax-free and gets to save it; that's one idea.  You ought to take a look. 

The other idea is -- I know I'm beating a dead horse, but sometimes you have to say the same thing over and over and over again, and I'm going to say it one more time:  We need to let Will and his employees be able to deduct a standard deduction of their income taxes so that he's got just as good a chance to provide insurance for his employees that big companies do here in Chattanooga.  That's what we need to do.  It is a really important idea. 

I know that you're looking and you're scrambling, but it would be a lot easier if you were able to work with your employees because of the money that they save as a result of tax deductions.

MR. SMITH:  That's correct.

THE PRESIDENT:  And so the whole purpose, by the way, of this discussion is to help the individual, but to also help the entrepreneur do their duty.  That's why I've come.  I've really come to say thanks to your Governor for being innovative.  See, he's helping lay out a basic health care plan.  One of the problems we have at state level is that over time a lot of mandates have been added to insurance.  You know, the hair follicle benefit -- well, you don't need hair follicles, particularly if you have hair.  (Laughter.)  If you're going bald, you might think you do, but it's probably not a necessary part of a health care plan. 

I'm not saying that's happening in Tennessee.  (Laughter.)  But after a while -- the Governor knows what I'm talking about and so does this Governor -- it's hard to resist.  And so they get -- these insurance plans get all kinds of things added on to them, which makes the expense beyond the reach.  And so the Governor said, look, we're going to try -- that's fine, we'll have those plans, but we're going to devise another plan, too, just to provide for basic health care.  That will help his employees, and so will change in the tax code.

I firmly believe we can do a better job in helping people get private insurance than we're doing today.  Matter of fact -- and we need to.  See, the status quo is unacceptable.  And so I've come to talk to you about some ideas, and I want to thank you for giving us the forum to do that.  Ideas matter in the public life.  And here's an idea, a series of ideas. 

I strongly urge both Republicans and Democrats to take a look at what we've announced.  We want to work with people in Washington, D.C.  I'm tired of the politics just like you're tired of the politics.  We can do a better job of finding common ground on common-sense ideas to solve common problems. 

And so I thank you for giving us a chance to come today.  I want to thank our fellow citizens -- my fellow citizens, for joining us in helping to illuminate the problem and helping me highlight the solution. 

Governor, I'm honored that you came.  You didn't need to come.  It's a great honor that you're here.  In return, Laura and I will have you for dinner next Sunday night.  (Laughter.)  Well, we were going to do it anyway.  (Laughter.)  All the governors are coming to town.  I'm looking forward to welcoming your Governor.  (Laughter and applause.)  And I thank the Secretary.  Doc, thanks for coming. 

God bless you all.  Thanks for your time.  (Applause.)

    END 1:21 P.M. EST