CHRIS WALLACE, ANCHOR: The president is scheduled to announce this week how he wants Democrats to proceed on health care reform. But will Congress listen?
We're joined by two key senators -- from Phoenix, Jon Kyl, the Republican's number two leader, and from New York, Robert Menendez, who's in charge of getting Democrats elected to the Senate this year.
Gentlemen, it seems almost certain that the president and congressional Democrats are going to try to pass comprehensive health care reform by using the parliamentary maneuver called reconciliation, where they would need 51 votes in the Senate instead of 60 votes.
You're both professional vote-counters so, Senator Menendez, starting with you, do Democrats have the simple majority they will need in the Senate to pass it?
SEN. ROBERT MENENDEZ, D-N.J.: Well, Chris, our first hope is that we could actually get some movement from our Republican colleagues as a result of the summit. At the summit we heard a lot of Democrats, including the president, embrace many of the ideas of Republicans. Hopefully we could get some movement very shortly on that.
But in the absence of that, you know, there may be the ability to proceed on a simple majority vote that has been used many times by Republicans in the past, including for the passage of the Bush tax cuts and changes to Medicare that were some of the biggest cuts in Medicare.
So the opportunity is there. We'd really like to get a bipartisan bill. In the absence of that, the American people, I think, have said in the polls that they want to see move forward on health care reform.
WALLACE: So to answer my question, do you have the votes or not, Senator Menendez?
MENENDEZ: I think we will get to that point where we will have the votes. I believe that we will pass health care reform this spring.
WALLACE: Senator Kyl, do Democrats have the votes to pass what they will need to pass, which will basically be the fix to the Senate bill, through a simple majority? Will they have 51 votes?
SEN. JON KYL, R-ARIZ.: It's unclear right now. As Bob said, they may do a lot of things in order to get those votes, some of the backroom deal-making that characterized the previous legislation that the American people didn't like so much.
I think their bigger problem is going to be in the House of Representatives where they basically don't have any votes to spare on a pure majority vote.
And when they took their vote in the House, it was many months ago before this legislation was well-known to the American people. Now that it is so unpopular with the American people, I doubt seriously that there will be enough House members, House Democrats, who will risk their careers to vote for this legislation the second time around.
WALLACE: Senator Kyl, while under reconciliation rules you could not filibuster, you can offer unlimited amendments. Is that what you would try to do?
KYL: Well, it's not really that simple. Robert Byrd, who actually wrote the reconciliation rule, has said that its application in this case would be an outrage that should be -- that must be resisted, he said.
He pointed out that it's not designed for this, because there is very limited debate, only 20 hours. And he said the opportunity to offer amendments is essentially meaningless when you don't have more than 20 hours to consider the bill. He said it's not designed for this purpose. It has been used several times before, but primarily to balance the budget. It is a budget procedure.
WALLACE: Well, but, Senator Kyl--
KYL: And you can either--
WALLACE: -- forgive me.
KYL: -- raise -- sure.
WALLACE: We're going to get into that in a second. But you could offer hundreds and hundreds of amendments, each of which would require quorum calls, votes. I mean, that -- you could -- you could tie the Senate up in knots if you want to.
KYL: Sure, but nobody wants to do that. And there is no debate on the amendments. See, that's the point. You could -- you could offer 200 amendments and nobody would ever have any debate on any of them. That is not a procedure designed to reach a good conclusion.
WALLACE: Senator Menendez, are you as convinced that they won't try to tie the Senate up with a long list of amendments?
MENENDEZ: Well, look. I think Americans should know that when we hear the words about reconciliation, it is simple -- simply a majority vote. You know, we learned that all our lives, you know, 51 out of 100.
On certain budget elements -- that's the other thing. This whole bill cannot be passed on reconciliation. It would be the budget elements of the bill, with a simple majority vote, a procedure that Republicans used to pass the Bush tax cuts, which are about two times the size of this bill, and that were used in other health care issues like Medicare and Medicaid by Republicans in the past.
So I find it very interesting that our colleagues on the Republican side, many who defended the use of a simple majority 51- vote process on budget-related issues, now object to it.
The reality is -- is that when you see 40 percent premium increases in California, when you see people denied because of preexisting conditions, when you have lifetime caps, when you can't keep your child on your insurance to -- you know, through college, those are the things that Americans want to change.
And those are the things that we are seeking to change in our comprehensive health care reform.
WALLACE: Senator Kyl, I cut you off before.
KYL: Chris -- Chris, if I could just--
WALLACE: Senator Kyl, let me -- let me pose my question, because I think it's right on this very issue. KYL: OK.
WALLACE: Let's look at the record of what reconciliation's history is. First of all, it's been used 22 times, two-thirds of the times by Republicans, not Democrats.
And it's been used for such big-ticket items as the Reagan tax and spending cuts, the children's health program, welfare reform and the Bush tax cuts. Question: A lot of those go beyond simple budget measures, Senator Kyl.
KYL: Most of the time it has been used for simple budget matters. Other cases, you had large majorities. For example, on welfare there were 78 senators who voted for it, and a majority of Democrats. And on the Bush tax cuts, I believe the number is 12 Democrats supported it.
And that -- and those were revenue measures. Tax reductions or tax increases are one of the things that reconciliation is designed for. The American people, according to a brand new poll, oppose the use of reconciliation here by a vote of 52-39, I believe it is.
And the reason is because they appreciate that the comprehensive nature of it that Bob just spoke to is precisely what makes this not applicable here. It's not just a matter of adjusting a number here or a number there.
You've got a 2,500-page bill that in its first 10 years of full implementation is $2.5 trillion. It affects virtually everything having to do with health care in the country. That is a process that needs more than 20 hours of debate and an opportunity to provide amendments that you can actually debate--
WALLACE: But, Senator Kyl--
KYL: -- rather than just throw out.
WALLACE: -- I'm not quite sure I understand. If reconciliation was a proper tool to use for something as expansive as welfare reform, why isn't it OK to be used for the fix of the Senate bill?
KYL: First of all, I'm not sure that it should have been used for welfare reform. But again, 78 senators said that it was OK. So you didn't need to use reconciliation to get the number of votes.
WALLACE: But they did.
KYL: What they're trying to do here -- yes, but it wasn't needed for that purpose, is my point. And so here it is only being used because they cannot get the 60 votes that would ordinarily be required.
That's why Robert Byrd said to use it in this situation would be outrage. As he said in his letter, if you can't do it the usual way, then you shouldn't do it by reconciliation just because you can't get the votes otherwise. In the case of the welfare legislation, as I said, 78 senators were willing to do it. So it wasn't necessary to use it in order to pass it.
WALLACE: Senator Menendez, Senator Kyl--
MENENDEZ: Chris, we already had -- we've already had--
WALLACE: Senator Menendez--
MENENDEZ: .. a majority vote--
WALLACE: Senator Menendez--
MENENDEZ: -- in the Senate of this issue.
WALLACE: -- let me ask a question, if I might, and then -- and then you can answer it. You know, the -- Senator Kyl keeps talking about public opinion. The fact is, as we mentioned, you're the man in charge of electing Democrats to the Senate.
In November -- the polls -- Senator Kyl's right -- are overwhelmingly against comprehensive health care reform. We had this Massachusetts election in which Scott Brown won campaigning as the 41st vote against health care reform.
If Democrats, against all of that, go ahead and pass comprehensive health care reform using reconciliation, this parliamentary maneuver, don't you risk tremendous voter backlash in November?
MENENDEZ: Chris, you know, the numbers I see -- I see the Washington Post poll just the other day that said 66 percent of Americans want to us move forward on comprehensive health care reform.
I see the numbers of 40 percent premium increases in California and other parts of the country. I see Americans and New Jerseyans who tell me, in fact, that they can't afford health insurance. And this bill is the biggest tax cut for health insurance that we have seen.
$500 billion goes to tax cuts to help individuals and small businesses be able to afford health insurance. And it does it in a way by eliminating the waste, fraud and abuse and stop overpayments to insurance companies.
WALLACE: But -- but, Senator, I'm asking--
MENENDEZ: -- that, in fact, are getting overpaid right now.
WALLACE: -- I'm asking--
MENENDEZ: So I don't know why Republicans would oppose a process that they have used in the past to accomplish exactly those goals.
WALLACE: But, Senator--
MENENDEZ: And that's what Americans want to see. They want--
WALLACE: But, Senator, I'm asking you -- Senator Menendez--
MENENDEZ: -- to end the preexisting conditions.
WALLACE: -- if I may, I'm asking you a--
MENENDEZ: They want to afford health insurance.
WALLACE: -- political question, not a policy question.
MENENDEZ: And they want to -- and they want to stop the insurance company abuses.
WALLACE: And the political question I'm asking is do you think that voters are going to reward Democrats for passing comprehensive health care reform through reconciliation when the polls indicate they oppose it?
MENENDEZ: I think Americans, when they see the final product that stops the preexisting conditions limitations, that gives them the biggest tax cut for health care in history, that gives them $500 billion to them and small businesses, that if you get your insurance at work, you're going to see reduction in cost, that if you buy insurance you're going to -- for the same exact type of insurance you might have right now, under the exchange we offer we'll see a 14 to 20 percent decrease -- that all of these things -- and fully paid for, reduce our deficit by $100 billion in the first 10 years, a trillion dollars in the next 10 years after that -- I think Americans want to see that. They want to see--
MENENDEZ: -- progress.
MENENDEZ: And they're tired of hearing no.
WALLACE: Senator Menendez, please, let me -- let me get in here a little bit.
Senator Kyl, I want you to respond to that, but let me ask it to you in the form of another question, because you were involved in one of the more interesting exchanges with the president. And let's take a look at it right here.
(BEGIN VIDEO CLIP)
KYL: Do you trust the states or do you trust Washington? Do you trust patients and doctors making the decision or do you trust Washington?
PRESIDENT BARACK OBAMA: OK. Any time the question is phrased as "does Washington know better," I think we're kind of tipping the scales a little bit there, since we all know that everybody is angry at Washington right now.
(END VIDEO CLIP)
WALLACE: Senator Kyl, do you think the president and Democrats ever really wanted to reach out to Republicans? Or do you think they just wanted to score a political point of appearing to reach out?
KYL: I don't know what was in the president's mind, but I think that little exchange actually was very valuable, because the president is right. People are not very crazy about Washington solutions these days.
A bill that spends about $2.5 trillion, 2,500 pages, massive government takeover here, big tax increases -- that's what folks are leery of. They don't want Washington making all of those decisions, especially if they think it might interfere between them and their doctor.
And that is a fundamental difference between us. It's one of the reasons it's very hard to reconcile our two approaches here. Just to give you an example, the tax cuts that my friend Bob Menendez talks about are really direct subsidies to the insurance companies. There was a deal made with the insurance companies.
We will force everybody to buy insurance and then we, the federal government, will pay you, insurance companies, directly. It's not a tax cut to people. The people never see the money. It goes directly to the insurance companies.
It's one of the things that we don't like. And the polls, by the way -- the most recent poll is a CNN poll about three days old. Twenty-five percent of the people support this plan, 25 percent say, "Absolutely stop working on it," 48 percent say, "Stop and start over."
So you've got nearly three-fourths of the American people saying stop or stop and start over.
WALLACE: Gentlemen, we've got less -- we've got less than two minutes, and I want to get in a couple of more quick questions to you.
Senator Menendez, your Democratic leader in the Senate, Harry Reid, was just able to pass a smaller jobs bill with 13 Republican votes. And one of the things he said afterwards is, "Look, we're not going to pass one big huge bill. We have a jobs agenda which is several smaller bills." And in this case you got a lot of bipartisan support.
Why not treat health care the same way?
MENENDEZ: Well, look, even Governor Schwarzenegger says, you know, starting all over again is really political speak for -- you know, and partisan speak for "my way or the highway," in essence.
Basically, we have spent months on this. We have incorporated a whole host of Republican ideas. And to hear my friend Jon Kyl say that the insurance companies are going to get the benefit -- look, they're the ones fighting us the most.
And with all due respect, Jon took their positions on a whole host of amendments in the Finance Committee, basically supporting their views.
Democrats believe that there should be, you know, simple rules of the road in which insurance companies can't tell people who have insurance, when they make a claim, "No, you're denied." They can't stop people who have an illness--
MENENDEZ: -- from getting insurance.
WALLACE: Senator Menendez--
MENENDEZ: And that also, we can make it more affordable, so--
MENENDEZ: -- you know, that's a fundamental difference. You know, hearing that--
WALLACE: Senator -- Senator Menendez--
MENENDEZ: -- you know, Washington knows best--
WALLACE: -- I have to break in here because we're--
MENENDEZ: -- it's not Washington knows best.
WALLACE: Senator Menendez, I have--
MENENDEZ: We want insurance companies--
WALLACE: -- to break in here--
WALLACE: -- because we're running out of time and I want to ask Senator Kyl one quick question.
You have 30 seconds, Senator Kyl. One of your Republican colleagues, Senator Bunning, blocked the extension of unemployment benefits this past week. This coming week, will Republicans vote against Bunning and vote to extend unemployment benefits to millions of Americans?
KYL: I think the -- this is a temporary extension. It's over $10 billion. And all Senator Bunning was saying, quite correctly, is it ought to be paid for.
Congress just passed the so-called pay-go legislation which is supposed to require that we find offsets or other savings if we're going to spend money. And what's--
WALLACE: So -- so--
KYL: -- the first thing we do? We exempt this bill from it. It will pass, though, I -- because it's a temporary extension. The question for the longer term extension is a different issue, because that's well over $100 billion.
WALLACE: Senator Kyl, Senator Menendez, sorry for occasionally having to break in. But I wanted to get to a lot of ground, and we did. Thank you, both. And please come back, gentlemen.
MENENDEZ: Thank you, Chris.
KYL: Have a good interview with Junior.
WALLACE: All right, thank you.