Home Depot co-founder on impact of ObamaCare on workers

Bernie Marcus: America's going to get hit 'hard'


This is a rush transcript from "Your World," January 8, 2014. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Now to the who saw a lot of this coming, Home Depot co-founder Bernie Marcus.

Bernie, what do you make of this? Because I think it begins to hit home that it's more than just sort of like the Cadillac insurance crowd that begins whining and now it goes way beyond that.

BERNIE MARCUS, CO-FOUNDER, HOME DEPOT: Well, Neil, it's just the beginning. You have to remember the mandate, they put off the big companies until 2015. It was supposed to come in 2014 with everybody else.

CAVUTO: That's right.

MARCUS: So you haven't really seen it hit.

And I speak to a lot of business owners and small businesses especially about people have 100, 200, 300, 400 people working for them, and I usually say, well, what's going to happen? And they say, well, we really haven't -- we're studying it, we're studying it.

Well, does this mean, number one, that you're going to stop carrying insurance on your employees? "Well, I can't tell you right now." Well, does it mean that you're going to put more people into part-time? "Well, I really can't tell you right now. "

Neil, you haven't seen anything yet, and what you're going to see in January of 2015, right after the elections are over -- boy, the Democrats were beautiful on this one. It's politics as usual. They put off this thing because America's going to be hit so hard.

All of middle-class America is going to get very, very hurt, very, very hurt by this, because that's where it's going to come out. So if you're somebody working for a living and you have been doing this for a number of years and your employer has been covering you and paying the premium for you, you're going to end up in two ways. Number one, you're going to end up with very little insurance. You're going to end up with very, very high co-pays and you're going to end up with just a mess on your hands. It's not good.


CAVUTO: So, you don't buy, Bernie, the White House line and other Democrats who support this thing saying that this is exaggerated, that when you get more people in, and they realize that they're getting good benefits at a good cost, that -- that these numbers will sort of even out?

MARCUS: No, it's not true, Neil.

Listen, I -- I can only speak from practical. I'm on a board of several nonprofits and we have several hundred people working for us. And all of their prices, they have all gone up, all of their premiums have gone up, their co-pays have gone up. And, of course, the limits that they have gone up, the deductibles.

So, I don't know what they're talking about. I mean, you know, they're talking about the White House, they're talking about Washington. That's a different world.


MARCUS: Let's go to the real world, where real people work. And it's not happening. It's just not happening.

Costs are going up around the board everywhere. I haven't seen -- nobody has ever said to me, and I'm talking about this year, nobody has said to me that the costs have gone down on insurance. They have all gone up.

CAVUTO: I always think that at a very minimum here, whether you argue costs are going to go up a little or a lot, they're going to go up for a lot of folks. But the biggest thing I think that Americans are finding is, change is afoot and it's big change for a lot of people.

And we're already seeing it when whether it's retirees at IBM who are switched off into a private exchange, or the same happening to Time Warner retirees, that it will extend well beyond that, not only those companies and retirees, but existing workers. And whether they're pushed into something that isn't the president's plan, it will be different than the plan that they're used to. And that is unsettling for folks, isn't it, and those companies.

MARCUS: Yes, but, you know -- but you have to think about this.

Think about middle-class people that are living on hand to mouth really. You're making $75,000, $80,000 a year today, it's not an easy life for you. Everything has gone up. The cost of food has gone up, the cost of gas has gone up, cost of food. Everything has gone up dramatically.

And all of a sudden you're taking home less pay than you did before because of your health -- your cost of health insurance. This hurts people, this really hurts them. And this is where most of America hasn't really gotten the blow that they're going to get in 2015.

But plenty of them are suffering right now. So that's why you see the survey where they say more and more people would like to see ObamaCare cut off and stopped in its tracks.

CAVUTO: Right. Right.

MARCUS: It's a tough world out there, Neil. And I feel for these people that are working so hard and trying to make a living. Look, we solved the problem for 30 million people, well, so-called. Actually, it's only five million. And we have hurt 150 million. The numbers don't really add up, do they?

CAVUTO: Well, you are in Atlanta, where the big jobs conference was going on, job creators conference, and where -- the wind at our back here, or you hear the White House say the wind at out back is an improving, certainly an improving, today notwithstanding, an improving stock market, and that companies are hiring more and that this is a good environment, the health care worries notwithstanding. What are you saying?

MARCUS: No, it's not true.

I don't know who they're talking to. Maybe they're talking to General Electric. They're not talking to the real people out there. The people that we had at this conference from Job Creators Network today in Atlanta, most of them are small business people who are struggling with all the costs that they have.

The biggest thing they talk about, Neil, other than ObamaCare are the regulations that are just causing them so much problems. And the regulations come from the Labor Department, they come from almost every one of the alphabet soup down the line, and Environmental Protection Agency.

All of these a agencies are causing so much havoc with small business guys. Most of them are not expanding. I -- you hear the -- the very few are expanding, but most of them are not expanding, and most of them are staying where they are. They're trying to cut costs. They know costs are going to go up.

And eventually they're waiting because they say -- this is what we heard over and over again today, uncertain, everything's uncertain. Well, what's uncertain? We don't know what our taxes are going to be. We really don't know what the medical costs are going to be for us in the future. We don't know what's going to happen with the Labor Department, whether or not we're going to have NLRB organizing in our places.

So you have guys who are afraid. A lot of businesspeople are afraid to go forward. And it's not a good atmosphere. This is not conducive to hiring people. The problem that the president has, he's got to be thinking about positive things to make and not the negatives. He's thinking about negative things and not the positive. He's not helping to create jobs in America. Get rid of some of those regulations, yes.


CAVUTO: Let me ask you. Let me ask you. We're always crunched for time and I love having you on.


CAVUTO: But, Bernie, if you had to do it over again, if you could start, there was a time before Home Depot became the huge conglomerate, and you made a great go of it, where it was just a vision on paper, your vision on paper and a couple of buddies, now, if you, in this environment, had to try to do it all over again, do you think you could?

MARCUS: Well, you couldn't do it.

Number one, if you want to start out -- when we started out, the biggest problem that we had was getting a line of credit from a bank, Neil, and we couldn't find a bank in Atlanta who would loan us money on our balance sheet. We had a very small balance -- the balance sheet was really bad

And we finally found a banker in California who would loan us money. Remember, this is to pay our bills, this is to pay our expenses before we opened. We needed that line of credit. Well, Dodd-Frank, which was passed this last year, is going to kill off community banks. That's who loaned us the money. And small businesses depend on community banks.

And slowly but surely, they're being merged, they're being eaten up or they're closing all over America. In another year or two, you're going to have very small amounts of community banks. That's number one.

Number two, Sarbanes-Oxley, and Sarbanes-Oxley, you remember, was signed by -- by President Bush. Sarbanes-Oxley -- Home Depot went public when we did $25 million in sales. Well, today, you can't afford to go public with at $25 million in sales, because the cost of Sarbanes-Oxley is between $3 million to $5 million. So, who could afford to do that?

So Home Depot, which today which has 2,200 stores, has 300,000 employees, if we started today, I doubt that we could open more than eight stores. I doubt it. I really doubt it.

CAVUTO: Really?

MARCUS: And I'm not trying to be political about it.

I have studied it, I have gone back, and I have looked at all the things we have done. There's no way we could do what we did before. You have got to be -- you have to be a nerd that invents an app. That's the only way to make it today, as far as I'm concerned.

CAVUTO: Amazing. Amazing.

Bernie Marcus, thank you, my friend. Very good seeing you.

MARCUS: Thank you. Thank you. Good seeing you.

CAVUTO: Incredible. That was then. He couldn't do it now. That's what he says.

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