CHRIS WALLACE, HOST: We'll talk with Congressman Joe Wilson in a few minutes about his outburst during the president's speech and whether he will apologize on the House floor or face some form of discipline from the Democratic leadership.
But first, was Mr. Obama's speech a game changer in the debate over health care reform? And let's get right to it.
Senator Orrin Hatch of Utah, you have a history of working with Democrats on health care reform. Did the president's speech improve his chances for getting his plan through this year?
SEN. ORRIN HATCH, R-UTAH: Oh, I think it probably did. It was, in my opinion, long on rhetoric and very very short on substance. But nevertheless, it was a very good political speech. Too bad that wasn't this wasn't 2008 rather than 2009.
But no, it was a good speech, but I really believe that the hard work has to be done, and hopefully we can we can all work together and get it done. But I really don't see it with what they're what they're trying to do.
WALLACE: Well, let me bring in Senator Lindsey Graham of South Carolina. Did the president, with his speech, improve or hurt his chances of getting health care reform through this year?
SEN. LINDSEY GRAHAM, R-S.C.: I thought it was a disaster. I thought it was combative. He he's obviously on the defensive. He's lumping every critic in with a demagogue. He's accusing us of bickering when we're trying to have major policy discussions.
He outlined a $900 billion proposal that really doesn't make sense in how you would pay for it. So I don't think it advanced the ball substantively. And politically, it made it very hard, I think, to find a middle.
WALLACE: Well, perhaps the president doesn't want the middle.
And, Senator Claire McCaskill of Missouri, let me ask you about that. Did the president resolve the differences between liberals and moderate Democrats in Congress?
SEN. CLAIRE MCCASKILL, D-MO.: Well, I think the speech he was trying to speak to America and make sure that Americans realize the kind of misinformation that has been out there.
As we try to come up with a plan that works for most Americans in terms of holding onto insurance and stabilizing insurance, there's give and take. But the president, I think, cleared the air about what is true and not true about what we're trying to get done here and why it's so important for America.
I thought it was a strong speech, and I think the polling indicated that after, that there were a lot of swing voters out there that said, "Hey, he's willing to compromise and be pragmatic. That's good."
WALLACE: Senator Kent Conrad of North Dakota, are Democrats in the Senate now unified behind the president's plan?
SEN. KENT CONRAD, D-N.D.: You know, I think Democrats are pretty much unified in the Senate around a plan that brings down costs, because that's the central goal here, and I thought the president made a very powerful case that the course we're on now is utterly unsustainable.
Anybody that says we just stay on the current course is not paying attention. We have got a circumstance in which cost has to be brought down. That's the number one issue I heard all across my state during the break.
Second, he said he's prepared to hear a better idea, so if somebody's got a better idea, bring it to him.
Third, he said, "Look, I am ready to move toward the middle." He talked about a plan that's very close to the bipartisan plan that's being developed in the Finance Committee.
WALLACE: All right. Let's break this down. There are obviously a bunch of issues here. The big issue, I think it's fair to say, going into the speech was whether the president was going to insist on the public option, government-run insurance, to compete with private insurers. Here's what he said.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: The public option is only a means to that end. We should remain open to other ideas that accomplish our ultimate goal."
(END VIDEO CLIP)
WALLACE: Senator Conrad, some people read the president as paving the way in this speech for dropping the public option. As one of the people one of the leaders in the Senate among Democrats who's looking for another option besides government-run insurance, is that the way you read it, that the president do you think he's giving up on the public option?
CONRAD: I don't think he's giving up. I think he made a very strong case for his support for a public option as an option. But I think he also said, "Look, I'm open to other ideas." In fact, he spoke favorably about the cooperative approach, which would provide a nonprofit competitor but would not be government-run, would be run by its membership, as all co-ops are.
So I thought he left the door open to a compromise, really across the board, in order to achieve the result of bringing down cost, expanding coverage and improving quality.
WALLACE: Senator McCaskill, as a practical matter, isn't the public option dead?
MCCASKILL: I don't know. And I think the public option in some ways has become a distraction. The meat of this matter is that we're losing 14,000 Americans from health insurance every day.
The meat of the matter is that most middle-class families are worried that they won't be able to afford health insurance next year.
And the bottom line is we any deficit hawk cannot look you in the eye and honestly say we can do anything about the deficit if we don't bring down health care costs.
So I think what the president tried to do is shift the emphasis of the debate to the vast majority of the provisions that are going to accomplish some of those things reduce the deficit, bring down costs, make health insurance available and affordable and secure for most Americans.
That's really the meat of the matter, not the distraction of whether it's a co-op or a public option. That's a small part of this. And I think he did a good job kind of re-prioritizing our debate in that regard.
WALLACE: Well, Senator Graham, let me ask you, because when they start talking Democrats do about it as a distraction, it certainly increases my feeling that we're not going to end up with a public option. Republicans have been fighting that.
Why not take yes for an answer and work with Democrats to find a compromise?
GRAHAM: Well, I think the public option is dead. It's probably been dead a long time because the public is very afraid. Eighty-five percent of the people with private health insurance like what they've got, and they understand if the public option is part of any reform measure private insurers cannot compete against the government over time.
I think one thing we can say if the deficit matters, which I'm glad to hear it does, and the public option's unacceptable, then the House bill is dead. We should just throw it in the garbage can, because it's $239 billion added to the deficit over a 10-year period. It has a public option. So it looks like all the action's now in the Senate.
WALLACE: I'm going to get to this question of cost in just a minute, but I want to bring Senator Hatch into this.
The president praised you in his speech for the fact that you worked with Ted Kennedy to pass children's health care. And SCHIP, as it's known, is government health insurance.
So if you can accept government health insurance for SCHIP, why can't you accept some form of it for all the rest of Americans?
HATCH: Well, the original SCHIP bill basically was a block grant to the states where the states basically ran it. That's why it worked. If we would do that in federal health care, I think we'd be a lot better off, because we'd have 50 state laboratories developing their own plans for their own demographics.
Utah, for instance, isn't Massachusetts, and Massachusetts is not Utah. And you can say that about every other state. You know, we're talking about 306 million American people, 85 percent of whom basically think their health insurance is better than anything they can get.
Do we need to reform? Yeah. But think about it. If you deduct and they say 47 million people. The president said 30 million in his speech. If you deduct the 6 million who basically work for companies that provide health insurance but they don't buy it, if you deduct the 11 million people who really qualify for CHIP or and/or some Medicaid, you deduct the 9 million who early over $75,000 a year and can afford it, and you deduct the 6 million of undocumented workers, it really comes down to about 15 million people.
So we're going to throw out a whole system for 300 million and 6 million people because of 15 million people who we could subsidize and help without ruining the whole system, and we're going to save money, we're going to save taxes, we're going to have less spending, we're going to have greater choices. Come on, we're living in the real world here.
WALLACE: All right. Let me let me go to another issue, and I think we're all have been talking about that. That is cost. The president pledged that this huge new government program will pay for itself. Let's watch.
(BEGIN VIDEO CLIP)
OBAMA: I will not sign it if it adds one dime to the deficit now or in the future, period.
(END VIDEO CLIP)
WALLACE: Senator Conrad, you're chairman of the Senate Budget Committee. Let's take a look at the numbers and let's put them up on the screen.
The non-partisan Congressional Budget Office projects the main House bill will add $239 billion to the deficit in the first 10 years, but that includes 10 years of taxes and only six years of full services.
The Lewin Group, a private group, looked at the second 10 years of the plan, when it's fully running, and they said it would add a trillion dollars more to the deficit.
Senator Conrad, how do you get from a trillion dollars-plus to not adding a dime to the deficit?
CONRAD: Because that plan is a plan out of one committee in the House and it's not going to pass.
What only the only thing that has a prospect of passing is what is happening in the Senate, in the Finance Committee, where three Democrats and three Republicans have been given the responsibility to come up with a proposal for our colleagues.
And the proposal that we are developing is fully paid for, bends the cost curve in the right way, extends coverage to 94 percent of the American people not everybody, but 94 percent is a big improvement over where we are now dramatically improves the insurance market because it reforms it, improves the delivery system by providing big incentives to adopt the best practices that are out there.
Those systems that we know are working, like Intermountain out in Utah, which is outstanding, like Mayo Clinic...
WALLACE: Let me ask you a quick question. You're talking about the Gang of Six, which is six leaders you're part of it on the Senate Finance Committee. Are you going to reach a compromise this week that Republicans and Democrats sign onto?
CONRAD: We hope to. We meet again on Monday. We have people working all weekend. A number of us have worked through the weekend. We think we are very close to an agreement. And I want to repeat, the agreement that we have the Congressional Budget Office has told us is fully paid for, bends the cost curve in the right way and does extend coverage to 94 percent of the people.
WALLACE: Let me bring Senator Hatch into this.
First of all, do you believe that they've got a deal that's going to pay for itself? And secondly, the president says, "Well, look. Even if it doesn't, we're going to have a deficit trigger, so if we don't get all the savings we think we're going to get from Medicare, we will automatically cut savings." Why isn't that enough for you?
HATCH: Well, of course, that just also pushes us into a public plan even more so that the federal government can control.
Look, you said there aren't going to be any increases in taxes. How about the 25 percent of seniors who are on Medicare Advantage? They're going to cut Medicare Advantage by $130 billion as part of raising revenues.
They're going to have an employer mandate, at least a form of an employer mandate, that basically is going to hurt low-income employees.
They've got an individual mandate that if you if you earn more than if you earn more than 300 percent of the federal poverty level, you're going to be paying up to $3,800. Now, if that isn't increase in taxes, I don't know what is.
And you can go on and on on how even with all the work that I give my fellow senators credit for in the Finance Committee, it's hardly and you're talking about almost a trillion dollars in spending, but that's only for seven years, because it doesn't trigger till 2013. That's one year after the presidential election of 2012. Kind of interesting, isn't it?
WALLACE: All right. Let let me...
HATCH: And I could go on and on. All I can say is I just do not believe that they're going to have the Republican support on this type of an approach. And I can tell you right now people all over the country don't want this.
WALLACE: All right. You mentioned Medicare. It brings us to the president's claim that he can squeeze hundreds of billions of dollars out of Medicare without in any way endangering or cutting services to seniors. Let's watch.
(BEGIN VIDEO CLIP)
OBAMA: The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud as well as unwarranted subsidies in Medicare that go to insurance companies.
(END VIDEO CLIP)
WALLACE: Senator McCaskill, do you really believe that that's possible, that you can take hundreds of billions of dollars out of Medicare without cutting services to seniors?
MCCASKILL: Well, I don't know how many ads you've seen for scooters on cable TV, but I see a lot of them. Those are scooters paid for by the American people, and a lot of them are going to folks who don't need scooters.
It's one example of many examples where we are paying for services or things instead of outcomes. And I think it's very important that we start focusing on the patient and what's good for the patient rather than five or 10 or eight CAT scans in one week so docs and hospitals are trying to pay for those machines.
There's lots of things we can do without cutting any of the services. And rankly, Medicare Advantage, with all due respect to Orrin, we just transferred a lot of taxpayer money to insurance companies. It hasn't brought down the cost of Medicare. It hasn't improved the services.
WALLACE: But but, Senator McCaskill, let me let me ask you, because this is a question I get a lot in e-mails. If there is already hundreds of billions of dollars of waste and fraud in Medicare, why would we want to trust government with an even bigger role in health care?
HATCH: You got that right.
MCCASKILL: Well, part of the problem is is that we've had the private sector come in and get Congress to do things. A great example is Medicare D.
For gosh sakes, where were all the fiscal conservatives, you know, five or six years ago when the Republican Congress and Republican president...
WALLACE: We should point out that's the prescription drug benefit.
MCCASKILL: ... passed a trillion-dollar program without any way of paying for it. That's a good example of where we have transferred money from taxpayers to private insurance companies, and it has not produced the kind of result the American people deserve.
WALLACE: Senator Graham...
MCCASKILL: We need to pay for this.
WALLACE: Let me bring in Senator Graham, because Democratic congressman Jim Cooper, one of the so-called Blue Dogs, who actually teaches health care policy, says that between private and public health care, we waste about $700 billion a year, so it should be easy to find these kinds of savings.
GRAHAM: Well, no one's found them before, and the only way you're going to find them now is to do something that no one's been willing to do, and that's get in here and change the system.
You're not going to find $300 billion in Medicare and Medicaid savings. This trigger idea that at a certain point in time we'll stop spending and go back and cut things has never worked anywhere else, so the trigger is a phony baloney idea.
They said the same thing in Tennessee about TennCare, "We're going to make the system efficient and that's how we're going to pay for TennCare." Listen to what the governor of Tennessee had to say about that.
I voted against Medicare Part D for the very reason that we don't pay for things around here. The Wyden-Bennett bill seven Republicans and seven Democrats is revenue neutral. I'd like to talk to the president about it.
But here's the one thing that we've learned from this show today. The House bill is dead because deficit politics apparently matter, and the public option is unacceptable, so that's a good start.
If we can kill the House bill, let's sit down with Kent Conrad and others and see if we can do something reasonable. But it is not reasonable to assume that we're going to cut Medicare and Medicaid costs to pay for other people's insurance and get $300 billion savings and have a trigger that works in Washington. Neither one of those makes sense to me.
CONRAD: Chris, can I just say on this point...
WALLACE: Go ahead, Senator.
CONRAD: Look, we have negotiated with Medicare providers hospitals, nursing homes, home health hundreds of billions of dollars of savings. Why are they willing to come forward and negotiate those savings? Because they know with more people covered, they are going to have more business. They're going to have fewer circumstances in which they don't get compensated, they don't get paid.
So we have gotten hundreds of billions of dollars of savings from Medicare providers because they know they're going to get more business.
WALLACE: All right. We are almost...
GRAHAM: Can I add something? Can I add something? What about the doctor fix? Are we going to let it go into effect? It's supposed to go into effect every year and we never let it go into effect. That's exactly what's going to happen with these other cuts.
WALLACE: All right. We have really less than a minute left. I'm sorry, Senator Graham. I just want to ask or Senator Hatch. I just want to ask Senator Graham one final question. We're about to get Joe Wilson on the show. Should he apologize to on the House floor? You're his fellow South Carolinian. Should he apologize on the House floor and end this controversy?
GRAHAM: Well, I think Joe needs to make it clear that what he did was wrong. He has apologized to the president. That's enough for me. It's good that the president accepted it. But I'd like to see this matter end.
Joe's a good man. He made a mistake. Don't give up on fighting health care. But what he said was inappropriate. This needs to come to the end for the good of Joe, South Carolina and the country.
I'll leave it up to his good counsel as to what to do next. But he has apologized to the president, and I appreciate that very much.
WALLACE: Senators, we're going to have to thank you all thank you all so much for coming in today and joining us, and we'll see how the fight over health care reform shakes out over the next few weeks.