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CBS "Face the Nation with Bob Schieffer" - Transcript

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We're now going to get the states' perspective on the Supreme Court's health care decision with Republican Governor Scott Walker of Wisconsin, who's joining us from Madison; and here in our studio with me, Democratic Government Martin O'Malley of Maryland.

Gentleman, let's cut right to this. The law now requires that the states set up a marketplace, otherwise, called an exchange for residents to buy this insurance. And many states, including Maryland, have already begun that process. Others like Wisconsin are waiting to-- to see-- well, waiting to see what the court decided. Governor Walker, let me ask you now, the ball is in your court, what are you going to do?

GOVERNOR SCOTT WALKER (R-Wisconsin): We're going to wait. We said all along that it was a legal step, that it was a political step, and then after each of those steps were exhausted we see what the future is holding. But very clearly the-- the court pointed out that the-- the law is upheld constitutionally, but it also pointed out very clearly it's a massive tax increase. That's what we've said all along. This is a tax increase and at a time when we're trying to help the private sector create more jobs in our state and across America. A massive tax increase is not the right answer. So my hope is for people whether it's in Wisconsin or anywhere else around the country who don't like Obamacare because of the tax increase, because of the impact in the economy and on the budget, now the only chance to repeal that is to put in place a new President, a new Senate majority, and to sustain the House majority and to ultimately repeal the law so that states like Wisconsin and others can push a free market alternative.

NORAH O'DONNELL: Governor O'Malley, is it a massive tax increase?

GOVERNOR MARTIN O'MALLEY (D-Maryland): That's the biggest falsehood being perpetuated by these unflinching ideologues that this is a massive tax increase. The massive so-called tax increase they're talking about is the freeloader penalty, which would affect at most one to two percent of people that could afford health care and instead want to be freeloaders on the rest of us with uncompensated care. We decided early on to be an early implementer of health care reform of Obamacare, because we know that's good for businesses. We know that that will allow businesses to invest money in expanding job creation, expanding middle-class opportunity, instead of, throwing it away on ever escalating health care costs.

In fact, Governor Walker also signed an executive order himself in 2011 before his ideological politics got in the way that would have had Wisconsin setting up the exchange, too. So, frankly, Norah, we think that we will have a competitive advantage on other states that are ruled by ideology when we engage in the hard work necessary to bring down health care costs.

NORAH O'DONNELL: What about that, Governor Walker? I mean, is that a specious argument--

GOVERNOR SCOTT WALKER: Yeah.

NORAH O'DONNELL: --that it's a massive tax increase when the CBO, the Nonpartisan Congressional Budget Office, has said that it-- that it will be a penalty on about one percent of Americans?

GOVERNOR SCOTT WALKER: Well, the CBO shows a number of things, not the least of which is Medicaid is one of the biggest drivers of any state budget, Wisconsin, Maryland, or anywhere else. And they show on top of the normal increase that we would get all too often without adequate funding from the federal government. That you're going to have almost three-percent increase in terms of cost to the states in the eight years when Obamacare is fully enacted from 2014 on. So, for starters, the CBO shows that it's going to be a cost increase to taxpayers at the state level not just at the federal level. But the other part is the practicality is it's-- yes, it is a tax increase, that's the whole reason why the law was upheld. For those who claim victory they have to acknowledge that it wasn't upheld because of the Commerce Clause, it was upheld because of the tax increase that's included in the measure itself. But take, for example, Wisconsin. Wisconsin, Governor O'Malley is right, we looked at this, we looked at the opportunity and then we looked at the facts and the facts showed by the same firm that my predecessor or Democrat have employed the facts showed us in Wisconsin, in our case, the majority of people in our state after Obamacare is fully implemented will actually pay higher costs for less benefits than they got before. That's not a practical reality for the people of Wisconsin. That's not a benefit for them. That's certainly not good for the economy. And I think for people here in Wisconsin and plenty of other states across the country, we want to put the power back in the hands of the people at the state and the local level not be driven by a federal mandate.

NORAH O'DONNELL: Well, let me just challenge on that, Governor Walker. Your Republican nominee--

GOVERNOR SCOTT WALKER: Mm-Hm.

NORAH O'DONNELL: --for President Mitt Romney put in place an individual mandate in Massachusetts. As part of that he also imposed a tax penalty to encourage people--

GOVERNOR SCOTT WALKER: Mm-Hm.

NORAH O'DONNELL: --to buy insurance, to comply with the law. Does that raise some questions about Mitt Romney's credibility on this issue?

GOVERNOR SCOTT WALKER: No. I think what he shows is, as a former governor, he understands that the best place to tackle these issues is the state level and he understands you learn from the lessons of other states. In the case of Wisconsin, we learned looking at-- at that state, Massachusetts is a good example. We even learned from one what we found from our actuarial assessment that we did early this past year--

NORAH O'DONNELL: Would you ever put in place--

GOVERNOR SCOTT WALKER: --that that was not a good measure for the state of Wisconsin.

NORAH O'DONNELL: --an individual mandate?

GOVERNOR SCOTT WALKER: No. In our case we think there's two extremes, that the government mandate that you have under Obamacare ultimately the only way you control health care costs, not today but in the future, the ultimate way that would end up leading towards is rationing of health care. I don't think that's a good decision. On the other end--

NORAH O'DONNELL: Mm-Hm.

GOVERNOR SCOTT WALKER: --I and plenty of other governors would like to go down the path of a free market-driven solution that actually engages me and every other consumer of health care in being a more active participant in controlling our health, not just our health care costs.

NORAH O'DONNELL: What about that?

GOVERNOR SCOTT WALKER: What we do to control diabetes and health care and other issues like that.

NORAH O'DONNELL: What about that, Governor O'Malley, that Mitt Romney instituted an individual mandate, including a tax penalty in his state?

GOVERNOR MARTIN O'MALLEY: Well, I think the reason-- I think the reason why he did that was because he saw that the free market solution wasn't working. Let's be honest here. The so-called free market solution during the decade of George Bush led to us parting with seventeen percent of our GDP to rising health care costs. That's more than we-- we pay in taxes. It led to a hundred and thirteen percent increase for businesses in their health care costs. So the reason why Governor Romney did that before he had to twist himself into an ideological pretzel to satisfy the Tea Party wing that's running their party is because he saw that it would be better for businesses and, in fact, you know what it was. Seventy-seven percent rather than seventy percent of businesses now cover their employee's health care costs.

GOVERNOR MARTIN O'MALLEY: He saw Massachusetts actually bring down unemployment at a faster rate even after the freeloader penalty kicked in at that state level. So these-- these fears that this horrible thing is a massive increase in taxes are absolutely false. I will agree with one thing that Scott said and that is that we need to do a better job on wellness. And that's what Obamacare does. It moves us from a disease-based system that's with ever-escalating costs to one where good companies like United Healthcare are hiring more people to do the wellness, to do the prevention, and these are the things covered by Obamacare makes sense in terms of reducing costs and also increasing the-- our ability to invest in an economy that lasts.

NORAH O'DONNELL: I want to return to this question though about Governor Romney, Governor Walker, who proposed this. You have advocated even on this show in the past that-- that Mitt Romney should be more bold. Should he be bold and come out and say what his alternative is on health care?

GOVERNOR SCOTT WALKER: Well, he's talked about repealing-- giving the powers to the states. I mean Massachusetts, Maryland, Wisconsin, are all very different places. In our case, as I mentioned, under Obamacare a majority of peoples, as the data shows, from an actuarial assessment, not just some number we picked out of thin air, majority of people in our state will pay more for less benefits. That's not a good deal under the federal mandate, under this federal not just tax increase but this federal mandate issue out there. For us if we ultimately--

NORAH O'DONNELL: Replace--

GOVERNOR SCOTT WALKER: --want to go down--

NORAH O'DONNELL: --I'm confused about--

GOVERNOR SCOTT WALKER: --the path and I-- I--

NORAH O'DONNELL: --what about replace it with what?

GOVERNOR SCOTT WALKER: --and I--

NORAH O'DONNELL: What specifics? Would you support a federal law--

GOVERNOR SCOTT WALKER: --I-- I support--

NORAH O'DONNELL: --that prevented discrimination--

GOVERNOR SCOTT WALKER: --first--

NORAH O'DONNELL: --for those with preexisting conditions?

GOVERNOR SCOTT WALKER: Well, I think some of those issues could be addressed federally. Some of those should be addressed at the state level. First thing I did as governor was sign into law, repeal the state tax and health savings accounts, that was one of things that gave small businesses and farmers in my state one more option out there. I think this should be more done for transparency. I agree with Governor O'Malley when we talk about the need to have greater wellness. I think the way you get there though is by getting people more engaged and I think there's been a problem in the past with a very limited free market solution. There's been a-- certainly a problem in the future in 2014 and on, when Obamacare's fully implemented. In each of those cases the average consumer really doesn't know what they're doing when it comes to health care. And I point out all the time people get out there-- their cell phones or their iPhones, most Americans know more about their cell phone coverage, heck, I know as the-- the father of two teenagers. If I don't have unlimited texting, I'm going to be in the poorhouse and yet most Americans don't know what's covered under their health insurance or their health care coverage and they won't likely in the future under Obamacare. We need a system that's more transparent so you are actively involved in those health care decisions.

NORAH O'DONNELL: Governor O'Malley, that message from Republicans and certainly a lot of the Tea Party anger after the President's Affordable Care Act was passed, led to Democrats losing a lot of seats in the House and in governorships. Should Democrats campaign on this, this year or talk about something else?

GOVERNOR MARTIN O'MALLEY: Well, I think we need to do a better job of doing as a party, Norah, is emphasizing the fact that we cannot build an economy that lasts. An economy that's creating jobs and expanding middle class opportunities if we are every year throwing away more and more money on ever more expensive health care for fewer and fewer people with worse and worse outcomes. So what we have an opportunity to do now that the Supreme Court has affirmed Obamacare is to show that this will allow us actually to reduce the rising costs of health care. In fact, since passage last year, we've seen premium costs, the-- the rate of growth has actually declined, not increase.

NORAH O'DONNELL: So you're advocating that Democrats should campaign on it?

GOVERNOR MARTIN O'MALLEY: I think we should tie it to the fact that we need to create jobs and expand opportunity. And one of the key things that kept us from being economically competitive was that instead of businesses being able to invest in job creation and plant upgrades, they had to just throw away more and more money on rising health care costs. That's why in Maryland we chose to be an early implementer. That's why we have an exchange that's up and going. And that's why we're going to have an economic competitive advantage over other states that decide to put their head in the sand and pretend that this isn't a problem.

NORAH O'DONNELL: Finally Governor Walker, what you did in Wisconsin, reining in public unions, you've said should be a model for the nation. Why then shouldn't what Governor Romney did with an individual in Massachusetts, why should that not be a model for the nation?

GOVERNOR SCOTT WALKER: Well, I think, again, we should learn from it and the case here is simple. That-- that ultimately the thing I do agree with Governor O'Malley on is the fact that, one, we should have this be a key part of the debate come November and two, that it is about jobs, particularly about small businesses growing in each of our states and around the country. I just think people-- voters need to look at it logically and say looking to the future which do you think is more likely to drive down health care costs and make our states and our jobs more competitive having something driven by the government in terms of the mandate or having something that opens up the door so that all of us as consumers play a much more active role of having skin in the game when it comes to health care. I think the latter is the more appropriate approach. I think that's the approach that will ultimately create lower costs--

NORAH O'DONNELL: Mm.

GOVERNOR SCOTT WALKER: --a better environment for creating jobs and will be better for America as well as each of our states.

NORAH O'DONNELL: All right. Governors, thank you. It appears the fight goes on even though the Supreme Court has decided. Thanks so much.

We'll be back in a minute with our political round-table.

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