Skip to main content



) -- Herman Cain brushed aside the shroud of major sexual harassment allegations on Wednesday night to notch another fluid debate performance with his campaign life at stake, but Cain's solid appearance could likely be attributed to the fact that he's a natural at it.

During a

town hall discussion in 1994, Cain sparred with President Bill Clinton over health care costs in relation to payroll as Clinton was on the road to pitch his universal plan, which included a mandate that forced employers to provide coverage to full-time and some part-time employees.

Bill Clinton in 1994

"It was a wake-up call to the business community and it caused them to get active in exposing the fallacies in 'Hillarycare,' " Herman Cain told



The video can be found on YouTube and shows a much younger Cain in a light suit telling a slightly graying Clinton wearing a signature French-cuff shirt that his Godfather's Pizza company would have to lay off a chunk of its 10,000 employees to afford the proposed comprehensive plan, if it passed Congress.

"My question is, quite simply, if I'm forced to do this, what will I tell those people whose jobs I will have to eliminate?" Cain asks Clinton.

Clinton methodically runs through the figures with Cain. Clinton asks the number of employees insured, and Cain tells him one-third. Clinton asks what percentage of pay roll their insurance costs. Cain says that it's about 2.5%.

In Clintonian fashion, the president estimates that pay roll is about one-third of the total cost of doing business in the food services industry. Cain responds that this is an "adequate" estimation.

Clinton takes over.

"Suppose, since you have part-time workers, and some wouldn't have to be covered -- so you wouldn't have to go from 2.5% of payroll to 7.9%, you might go to something like ... 6.5% -- that's a good, even number," Clinton says. "You add 4% of payroll, and that's one-third of your total cost, so you would add about 1.5% to the total cost to doing business -- would that really cause you to lay a lot of people off if all your competitors had to do it, too?"

The 7.9% Clinton refers to is the maximum that any firm would have had to pay under the health insurance plan in relation to company payroll,

Scroll to Continue

TheStreet Recommends

according to a Health Affairs paper from spring of 1994.

Clinton doesn't stop with the hard numbers without flashing some charm: "And why wouldn't you all be able to raise the price of pizza 2%

to offset the cost? I'm a satisfied customer; I'd keep buying from you."

Herman Cain

The room erupts into laughs and claps, but Clinton quashes the exuberance and reminds everyone that Cain's question is important because a huge number of Americans work in the food industry.

A stone-faced Cain delivers a signature line we've heard in the 2011 debates: "First of all, Mr. President, with all due respect, your calculation on what the impact would do, quite honestly, is incorrect."

Cain goes on to say that his estimates found that Godfather's Pizza would have had to pay the 7.9% maximum, not the 6.5% that Clinton predicted.

"Now let's suppose that 30% of my costs are labor costs -- 7.9% times that would be the 2% to 2.5% that you're referring to. The problem with that calculation, sir, is the fact that most of those 30% of people currently have zero

company health coverage," Cain says.

Cain says that if he was forced to pay 7.9% for those employees who didn't opt to receive company coverage, then his percentage of payroll to cover those costs would jump to 16%.

Cain doesn't relent as he addresses Clinton's suggestion that Godfather's simply raise the price of pizza as its competitors would have to do.

"Now, you're other point about having to pass it on to my customers in the competitive marketplace -- it simply doesn't work that way, because the larger competitors have more staying power before they go bankrupt than a smaller competitor," Cain says.

Cain then argues that the "larger competitors" would have more staff that they could do without until the marketplace reestablished itself.

Cain concludes his argument by saying that his company and others like his could not survive under the universal health care plan because they profit on between 1% and 3% of top-line revenue.

In the video, Clinton turns his eyes toward the ceiling and rocks his head from side to side as he appears to calculate what Cain has just said.

"Let me ask you a favor: Would you send to me personally your calculations?" Clinton says. "Send it to me and we'll work on it."

It was a pivotal moment in the massive health care debate that was championed and led by First Lady Hillary Clinton. Democrats were divided on the plan and proposed a multitude of their own versions. The legislation eventually failed as Republicans opposed the idea in lockstep and as Democrats couldn't reach consensus.

"An articulate black entrepreneur, Cain transformed the debate when he challenged Clinton at a town meeting in Kansas City, Mo., last April,"

Newsweek reported on Sept. 18, 1994.

Cain's comments came on the precipice of his tenure as president of the National Restaurant Association.

On the success of his town hall appearance, Cain launched in July 1994 an influential broadcast on satellite television that infuriated Hillary Clinton, according to the



"Who's going to enforce

health care? The health care police! You think the IRS is a friendly bunch of people -- wait until the health care police come knocking at your door looking for premiums because you didn't pay your alliance!" Cain warned restaurateurs on the broadcast.

In November 1994, Republicans swept the House of Representatives and gained 54 seats in the lower chamber, which marked the first GOP Congress since 1954. With the victory, Clinton's health care reform perished.

The Clintons famously blamed the "Harry and Louise"

ad campaign for health care legislation's destruction, but its undoing came when Cain explained to an uncharacteristically subdued President Clinton that his plan simply didn't work for small business.

"If I was the catalyst, I am thankful for that," Cain told



-- Written by Joe Deaux in New York

>Contact me here:

Joe Deaux


>Follow me on Twitter: