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CHRIS WALLACE, HOST: After months of public debate, the battle over health care reform has gone behind closed doors. White House officials are meeting privately with Senate leaders, Democrats only, to merge two very different committee bills before bringing a compromise to the floor.
Joining us now to talk about what they would support are Democratic senators Kent Conrad and Arlen Specter, who are in their home states, and Republican senator John Thune, who joins us here in studio.
Senators, let's start with the public option.
Senator Conrad, you have been an outspoken opponent of the idea of a government-run insurance plan to compete with private insurers. Will you vote for a Democratic plan, a final Democratic plan, that includes a public option?
SEN. KENT CONRAD, D-N.D.: Well, it's probably not wise for me to negotiate in public, Chris, but let me say this. I will not support any public option tied to Medicare levels of reimbursement.
My state has the second to third lowest level of Medicare reimbursement in the country. That would work an extreme hardship on my state. So I will not support that.
As you know, I have proposed not-for-profit insurance competitors to the for-profit insurance industry in the form of cooperatives that are run by their membership, not run by the government. That is included in the Finance Committee bill.
There are a series of compromises being suggested, including allowing states to opt in or opt out. And of course, Olympia Snowe has proposed a triggered mechanism so if the other reforms in the bill aren't as successful as we hope, that a public option would be triggered down the line, but not one -- and I want to emphasize this again -- not one tied to Medicare levels of reimbursement. That is unacceptable and could not get the votes.
WALLACE: But just to button this up real quickly, you are suggesting that you could accept some of those compromises.
CONRAD: I could accept something that is -- number one, cannot be tied to Medicare levels of reimbursement. I strongly favor a not- for- profit entity to compete with for-profit insurance. I have proposed a plan. That's what I favor.
WALLACE: Senator Specter, you, on the other hand, are a strong supporter of the public option. Could you support a final Democratic plan that does not include a public option?
SEN. ARLEN SPECTER, D-PA.: I'm not prepared to recede at all. I think the public option is gaining momentum. We had a very forceful speech by President Obama yesterday on his Saturday talk show emphasizing the importance of the robust public option to hold down the profits and bonuses, and I'm not going to step back a bit.
I'm going to continue to fight for the robust public option. When I listen to what my friend Kent Conrad has said, those conditions which he articulated at the very end I think could be consistent with a robust public option...
WALLACE: You're talking...
SPECTER: ... not -- not...
WALLACE: ... you're talking about, Senator Specter, either the trigger a couple of years down the line if the private health insurance companies don't provide affordable options, or the idea of state opt-ins. You're saying that those would be possible compromises you could support.
SPECTER: No, no, no. I'm not saying that at all. When Senator Conrad says he doesn't want a plan tied to a Medicare reimbursement, you don't have to have a public option tied to a Medicare reimbursement, so that when he is looking for conditions to protect his state -- and I respect that; that's what I do for Pennsylvania, fight for my state -- I think that that would be consistent with a public option.
WALLACE: All right. Now, I'm glad we clarified that.
Senator Thune, let me bring you in. You're against any government-run health insurance plan to compete against the private insurers.
How many Republicans, including -- not that you speak for them, but you do talk to them -- Senators Snowe and Collins of Maine -- how many Republican votes do you think there are for a public option?
THUNE: I -- I can't -- it's a little speculative to say exactly, but I -- you know, we know that Olympia Snowe did vote for the bill when it left the Finance Committee. She has sponsored a public option with a trigger.
But I think that Republicans for the most part in the Senate at least, Chris -- and I would think most -- for the most part in the -- in the House -- I'm not sure it's unanimous in the House, but it's very close -- reject the idea of government-run health care.
And I think the American people have turned a thumbs down on government-run health care. I think this is a very heavy lift to try and get this through the Senate and/or the House. But they want to do it.
I think the Democrats clearly want the public option. They want to call it something else. They want to label it. They want to call it a trigger, a state option or co-op. But it's still a government plan.
And as far as we're concerned...
WALLACE: Well, wait...
SEN. JOHN THUNE, R-S.D.: ... that's -- that's -- as far as we're concerned, that's not something that the American people want to see happen. And where it's been tried, it hasn't worked.
If you look at some of these other countries around the world -- and frankly, for that matter, a lot of the states that have tried to implement some sort of government-run health insurance plan -- it has been a disaster. And you can look at some examples of that here in our country.
WALLACE: Senator Conrad?
CONRAD: Let me just say, if I can, on the question of cooperatives, cooperatives, as Senator Thune knows, are not government-run. Cooperatives are run by their membership.
And the model that has worked in other parts of the world is a model in some ways like our own, employer-based coverage, with employees putting in, employers putting in, the government putting in for those that can't otherwise afford it -- but not-for-profit insurance intermediaries. That model has been very successful in Germany, in France.
WALLACE: But -- but...
CONRAD: ... in (inaudible)
WALLACE: ... wait, let me -- let me just interrupt, Senator. Senator Conrad, let me just interrupt, because the CBO, the non- partisan Congressional Budget Office, was asked to score the idea of these cooperatives. They said they'd have no effect at all because they wouldn't get any market share.
CONRAD: Ah. The best -- the best actuaries in the country have told us that the co-ops as we have designed them in the bill out of the Finance Committee would get 12 million members, be the third largest insurer in the country.
Look, CBO has to score based on what is past. What the best actuaries in the country have told us -- when you have a reformed insurance market, when you have 30 million new entrants, and when you have co-ops structured as we have in the Finance Committee bill -- that they would be a very effective competitor.
And again, if you look around the world -- look at these other countries that have not-for-profit insurance intermediaries to compete with for-profit insurance. Those systems have produced the best results -- universal coverage, costs one-half of ours, and health care outcomes that are at least equal to ours and, on many metrics, better than ours.
CONRAD: So if we want a reality test, I think we can look around the world and see systems that do work.
WALLACE: Senator Specter, the other big issue is how we're going to pay for this. And a number of critics say that all the Democratic plans hide the real cost of health care reform.
They point to a couple of things -- that the plans would start raising taxes and fees in 2011 but the real programs wouldn't start till 2015, so you're raising money for 10 years, but you don't have the programs for the whole first 10 years.
The other thing is that you called -- the Democratic plans call for hundreds of billions of dollars in Medicare cuts, and a lot of people doubt that this Congress or any Congress will ever have the will to impose those.
Aren't these really just ways to dodge what the real cost of health care reform is?
SPECTER: Well, the Republican objections are wrong. President Obama has pledged not to sign a bill which adds to the deficit at all, and there are many savings. For example, the annual exams will cut down on chronic ailments which are so debilitating and expensive.
We're going to have some tough criminal penalties so people will go to...
WALLACE: But, Senator, could you answer my...
SPECTER: Well, let me -- let me...
WALLACE: But could you answer my question?
SPECTER: Well, I can -- I can if you give me a little time to do so, Chris. I'm answering your question that the plan will not -- will pay for itself, which is the Obama contention.
Let me tell you why, if I can finish an answer just a little here. One way is that the annual exams will cut down tremendous costs, catching breast cancer, for example, at an early stage.
Second, lifestyle changes, smoking and checking your cholesterol.
Third, advanced directives.
Fourth, criminal penalties to put Medicare fraud, Medicaid fraud in jail so that there are specific savings which can be accompanied.
Listen, on the Republican side, it is no, no, no, a party of obstructionism. This is no longer the party of John Heinz and Mac Mathias and Lowell Weicker. You have responsible Republicans who had been in the Senate like Howard Baker and Bob Dole and Bill Frist who say Republicans ought to cooperate.
Well, they're not cooperating. Bob Dole reportedly wouldn't even return a telephone call from a Republican leader who wanted him -- who wanted him to back off. Take a look at the absence of any Republican plan.
WALLACE: Senator Thune, let me bring you into this, since Senator Specter is going after his former party, which -- of which you're still a member.
There is a price tag for doing nothing, and let me put that up on the screen. These are figures from your home state of South Dakota. Thirteen point five percent of adults under 65 are uninsured. Thirty- three percent of insured families spend more than 10 percent of their pre-tax income on health care, compared to 25 percent of families nationwide.
I know Republicans have their own ideas, but aren't you at this point -- doesn't Senator Specter have a point in this -- doesn't it look at this point as if you're going to end up blocking any change at all?
THUNE: Well, the people in my state, if these bills go through, Chris, are going to pay more. I mean, that's pretty clear. We've seen that.
All the studies show -- the Congressional Budget Office, when asked whether this would lead to higher insurance premiums for people, said roughly dollar for dollar, based on what the tax increases in the bill are going to be.
The one thing that's clear about all these bills -- you've got higher taxes. You've got Medicare cuts. And you're going to see higher premiums.
Now, I can't imagine trying to go back to South Dakota or Senator Conrad trying to go back to North Dakota and telling the people in our states that we reformed health care, we've created a $2 trillion new entitlement that's going to include new taxes that you're going to pay, that studies show -- CBO and the Joint Tax Committee -- that the middle class is going to be hit hard with the tax increases -- we're going to cut seniors' Medicare -- oh, and by the way, your premiums are going to go up, too.
This doesn't do anything to reform health insurance. And with respect to the public option, the government plan, I -- co-ops have worked in South Dakota. They're local co-ops. They allow people to buy things. They use group purchasing power. But that's not where this bill is going to end up.
Kent Conrad may like to see that option. Others may like to see that option. But at the end of the day, this is a down payment on -- this is the gateway to -- the government-run plan, which is what most Democrats in both the House and Senate want to see.
WALLACE: Senator Conrad...
WALLACE: Yeah, no...
CONRAD: ... can I -- can I just respond to...
WALLACE: Well, no, let me..
CONRAD: ... a couple of things that I...
WALLACE: ... I'm about to ask you a question, so you can respond when I ask the question.
CONRAD: OK. All right.
WALLACE: What are the -- what are the chances that Congress is going to end up passing and the president will sign a major health care reform bill this year? And how are liberal Democrats like Arlen Specter and moderate Democrats like yourself going to resolve your differences?
CONRAD: You know, it's the way it always happens. There is at some point a principled compromise. But I can tell you on the question of public option, it is not going to be one tied to Medicare levels of reimbursement. That would work a real hardship on Senator Thune's state and my state.
But there are other things that Senator Thune said there that really require a response. Number one, CBO has said this bill will reduce the deficit by $81 billion over the first 10 years and by hundreds of billions of dollars over the second 10 years.
On the questions of premiums, the CBO has said they've only analyzed the administrative cost portion. Twenty-three percent of every dollar goes to administrative costs. They say the legislation out of Finance will reduce that amount by 4 to 5 percent.
Number two, John Gruber, the noted health economist at MIT, has said the measure out of Finance will reduce premiums for people at every age level and at every income level.
With respect to taxes, the proposal out of Finance Committee provides $461 billion of tax credits to help people, to assist people, buy health insurance they would not otherwise be able to afford.
The one part of this that...
WALLACE: Senator Conrad, we're...
CONRAD: ... represents taxes...
WALLACE: Senator Conrad, we're running...
CONRAD: Let me just say...
WALLACE: ... out of time.
CONRAD: ... on taxes...
WALLACE: Very quickly.
CONRAD: Just very quickly, on taxes, the biggest component is a levy on companies that offer Cadillac plans. That was the proposal by John McCain when he was running for president of the United States. John Thune...
CONRAD: ... endorsed John McCain.
WALLACE: And it was President Obama who opposed it and said that you -- that there had never been taxes on health care benefits.
But anyway, I do want to talk about one other subject. And we've got you here.
Senator Thune, you, of course, are also a member of the Senate Armed Services Committee. There are reports that a U.N. commission is going to, in the next day or so -- possibly today -- is going to say that there was widespread vote fraud in Afghanistan and that there should be a run-off.
Should the U.S. insist that President Karzai agree to a run-off before the president sends any more troops to that country?
THUNE: I think it depends on the information that comes back from the commission. It looks like that's what they're going to recommend. And I think this is where I would hope that if the conclusion is drawn that there was fraud, that he's under 50 percent, that there would be a run-off with his main rival, Abdullah Abdullah, and perhaps they can come to some power- sharing agreement.
But either way, this needs to be an honest, fair election or we won't have the confidence of the Afghani people in their government, which is essential, I think, for us in order to succeed there.
WALLACE: But the basic question is does the political situation have to be resolved before the president makes a military decision to send more troops in?
THUNE: I don't think so. I think the fundamental issue with that decision, Chris, is America's national security interest. I think we're going to be dealing with some government in Afghanistan under any circumstance.
What's important to me and I think what's important to most Americans is that we have a strategy that can succeed and that it be properly resourced. And I think that's the decision the president needs to make, and I hope he'll make it soon.
WALLACE: Senator Thune, Senators Conrad and Specter, I want to thank you all so much for joining us today. We could have talked about this longer. Please come back, gentlemen.
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