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CQ Transcript: Sens. DeMint, Conrad on ABC's ‘This Week'

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STEPHANOPOULOS (voice-over): Will delay kill Obama-care, or give time to get it right? Is the president's plan what America needs now?

Questions this morning for our headliners, Democratic Senator Kent Conrad and Republican Jim DeMint , our THIS WEEK debate.


UNIDENTIFIED MALE: This man clearly was a rogue police.

PRESIDENT BARACK OBAMA: The Cambridge police acted stupidly.

UNIDENTIFIED MALE: He's way off base, wading into a local issue without knowing all of the facts.

STEPHANOPOULOS: Defending a friend, President Obama sparks a national debate on prejudice and policing.

That and all of the week's politics on a special expanded "Roundtable" with George Will, Donna Brazile, Paul Krugman, Arianna Huffington, and David Brooks.

And, as always, the "Sunday Funnies."

CONAN O'BRIEN, HOST, "THE TONIGHT SHOW": Obama says the conversation went well. But there was an awkward moment when the cops arrested Obama.


ANNOUNCER: From the heart of the nation's capital, THIS WEEK with ABC News chief Washington correspondent George Stephanopoulos, live from the Newseum on Pennsylvania Avenue.



After a week of dueling press conferences and closed door negotiations, it's clear now that Congress will not meet the president's August make-or-break deadline for health care. The Senate put off votes until September.

And while House Speaker Nancy Pelosi holds out some hope for a vote next week, House Democrats have not yet agreed on an approach. That guarantees several more months of struggle. So both sides are buying new ads to shape the battlefield.


UNIDENTIFIED MALE: When your representative comes home, ask them a simple question: Before you voted on health care, did you even read the bill? That's it, Congressman. Did you read the 1,017-page before you voted?

Now the Republicans say Congress should slow down? That's because when something goes slow enough, it's easy to kill it dead in its tracks. Tell Congress you want health insurance reform now. (END VIDEO CLIP)

STEPHANOPOULOS: And with that, let me bring in two senators at the center of the debate, Senator Kent Conrad , the chairman of the Senate Budget Committee; also Senator Jim DeMint , the chairman of the conservative Senate Steering Committee and the author of a new book called "Saving Freedom: We Can Stop America's Slide into Socialism."

You've got that vivid rhetoric there. And you've also gotten into a bit of a war of words with the president in the last couple of weeks when he said the health care issue could be Obama's Waterloo and that his plans will destroy America's health care system.

But his allies argue that the plan will provide real benefits to your state. Let me show you what they're saying, the House Energy and Commerce Committee, that the president's plan could provide tax credits for up to 92,200 small businesses in your state.

It will provide $648 million for doctors and hospitals in your state, and get access for about 669,000 people who don't have health insurance now in South Carolina. They say you're standing in the way of what your state needs.

DEMINT: Well, they gave a similar numbers with the stimulus and promised our unemployment wouldn't go above 8 percent. And now in South Carolina, it's over 12. So the numbers are hard to trust, George.

This is not personal against the president. I like the president, but he is out of control and he has been leading a stampede of more spending and debt and taxes and government takeovers.

He has taken a bad economy and made it worse. He used a lot of false promises and bogus numbers and panic to push through the stimulus. And the promises have not panned out. And now he's trying to use the same strategy on health care.

And what I'm trying to do and I think even Kent has had reservations, let's slow down and get this right. My goal is to protect the right of every American to make their own health care decisions.

And if we can do that, we can come up with a bill.

STEPHANOPOULOS: Slow it down and get it right. Is there any meeting of the minds here?

CONRAD: Look, the critical thing is that we do get this right. This is going to affect every American. Very few legislative initiatives affect every single American. And it's one-sixth of the national economy. So it's critically important we get it right.

But that shouldn't be used as a pretext to kill it. I mean, Jim, I think, has been very clear. He wants to kill it. And I think that would be a tragedy, because we've got a crisis here for the country. Not only are we spending one in ever six dollars in the economy, we're headed for a circumstance in which we'll spend one in every three dollars in health care. That would be a disaster for families, for businesses, and the government itself.


STEPHANOPOULOS: Both you and President Obama have really said that the number one priority has to be to get costs under control. And the president endorsed a proposal this week for an independent Medicare commission that would really look hard at and crack down on payments to doctors and hospitals.

But the head of the Congressional Budget Office put out a letter yesterday where he said the savings -- the 10-year savings for that proposal would be only $2 billion over 10 years. And he went on to say the probability is high that no savings would be realized.

So do you have to go back to the drawing board?

CONRAD: No, because in the plan that we're working on, you know, there are six of us on the Finance Committee, three Democrats and three Republicans who have been given the responsibility to come up with a proposal for our colleagues.

And in the effort that we're making, we've recognized that there would be savings in this area, but that they would be relatively modest. But the two big drivers are delivery system reform -- so we've got...


CONRAD: Well, we look around the country. What is working? The Mayo Clinic model, the Cleveland Clinic, Intermountain out in Utah. They are teams of doctors that are patient-centered, that share diagnostics, that share administrative staff. They save money. They get the best health care outcomes. That's what we've got to replicate all across the country.

The second big driver is the income tax subsidy to have health care, $2.4 trillion over the next 10 years, virtually every economist that has come before us has said, you've got to reduce that tax subsidy to health care to reduce over-utilization.

STEPHANOPOULOS: Now the president has taken that off of the table. But administration officials quoted in the Politico today saying that he is now open to taxing the "Cadillac plan," he calls them.

One of the examples they give is the Goldman Sachs partners have a $40,000 plan. You're saying tax those?

CONRAD: Yes. I think we've got to. Again, virtually every economist that has come before us has said, you've got to reduce that tax subsidy as part of an overall strategy to really contain costs.

STEPHANOPOULOS: What's wrong with that?

DEMINT: Well, I can tell a lot of these folks have not been in business. So if you tax the insurance companies, it's going to affect the cost of every policy. This is not about the numbers. Republicans, including me, have introduced lots of health care reform proposals.

I introduced a tax equity which would allow people to deduct the cost of their health insurance. The president and Senator Conrad voted against it. I had a proposal that would allow people to buy health insurance in any state, not just a single state monopoly. The president and the Democrats voted it down.

I had a proposal that would allow individuals to use their health savings account to pay for a premium. They voted it down. They even voted against allowing small businesses to come together and buy their health insurance.

So, George, what we've seen is that Republicans do want reform that will make health insurance more affordable and available.

DEMINT: But the only proposals we're getting from Democrats is more government control of health care.

STEPHANOPOULOS: So what's wrong with the Senator's proposal?

CONRAD: Well, the senator's proposal, the DeMint proposal in itself would be a proposal. It has no insurance market reform. In fact, it's kind of a protection for the insurance, private insurance companies, the DeMint plan. In addition to that, it would force millions of people out of employer-based coverage, onto some kind of government health. That could conceivably cost $2 trillion for the government. In addition, he's going to give you a voucher, $5,000 in...

STEPHANOPOULOS: That's a tax credit.

CONRAD: Yes. He's going to give a voucher worth $5,000 when health care costs $20,000. That's in 2016. It doesn't sound like much of a deal to me.

DEMINT: I'm afraid he didn't describe it right. The Healthcare Freedom Plan, George, that I introduced, would not take anyone off of their current plan. It wouldn't bother people on Medicare. You keep your coverage you have at work. What we do is give fair treatment to those who don't get their health care at work, and that would be a $5,000 a year health care voucher for every family.

STEPHANOPOULOS: But how about the point that most plans cost far more than $5,000?

DEMINT: Well, they wouldn't, if we would allow interstate competition. They think we have to have a government plan to have competition. But the president and Senator Conrad have voted to maintain a state by state monopoly by insurance companies instead of allowing a national market for insurance plans. There are plenty of products out there that could get people insured for $5,000 and if we allowed employers to put money in health savings accounts and let the individual use that to pay for a premium, people could buy more expensive policies. But we don't impact anyone who has insurance now.

STEPHANOPOULOS: Senator Conrad, let me bring it back to these bipartisan negotiations you talked about, because that really is the big game in town right now to the Senate Finance Committee. You've got three Democrats, three Republicans, but a Republican senator, Orrin Hatch, dropped out of the negotiations this week. And you've got a dilemma. Senator Chuck Grassley, the Republican ranking member in the committee says he's going to need some guarantees that the deal you strike here is going to survive all the way to the president's desk. You've got your own Democrat warning you not to give away the story. Chris Dodd in the "New York Times" this morning saying "If they overstep the line in these negotiations," talking about his fellow Democrats, "to bring three or four Republicans along, there will be a reaction among Democrats unlike anything you'll hear among Republicans." So how do you solve that dilemma?

CONRAD: You know, you've got to keep putting one foot in front of the hour and try to have a plan to propose to our colleagues that can win their support, Republicans and Democrats. Look, there are not the votes for Democrats to do this just on our side of the aisle. This is going to require...

STEPHANOPOULOS: So it's not possible to have a Democrat-only bill.

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CONRAD: No, it is not possible and perhaps not desirable either. We're probably going to get a better product if we go through the tough business of debate, consideration, analysis of what we're proposing. It is so important we get this right and that it's sustainable.

If I can just come to back to Jim's point, the $5,000 voucher as he has proposed, he says there are a lot of plans out there that have $5,000. Yes, there are, but what are they? They don't cover much of anything. In fact, they work not to provide you coverage. That's why they only cost $5,000. And his plan is to provide you $5,000 out years from now, when the cost of health care will have gone up even further. So that really is not a serious option for American families.

STEPHANOPOULOS: Senator DeMint, is there a chance that these bipartisan negotiations can get broader Republican support? There are three Republicans talking with the Democrats in the Finance Committee. What if the broader pool of Republicans are open to the kind of bipartisan compromise they're working on?

DEMINT: Well, Republicans want to protect the right of Americans to make their own health care decisions, to pick their own doctors and their own plans. We can do that and I'm afraid the senator is not representing my ideas correctly, but we could have a plan in a few weeks, George, if the goal is not a government takeover. We've never seen the government operate a plan of any kind effectively and at the budgets we talked about.

This is about the most personal service that Americans have. We don't want to put a bureaucrat -- as the president talked about the other night, he was talking about taking a red plan, a red pill or a blue pill. He was accusing doctors of taking out children's tonsils just to make a profit. He doesn't have the right respect for doctors and how the industry works.

STEPHANOPOULOS: You know, Senator Conrad, it seems pretty clear that one of the red lines that Senator DeMint is identifying here at minimum is that this idea of a public health insurance option, which matters so much to many of your Democratic colleagues, is something that is going to guarantee you limit Republican support to three or four, maybe zero, Republican senators. So are you telling your Democratic colleagues that is simply not going to happen?

CONRAD: What I am telling them is there is an alternative that tries to capture the best of both sides. I have put forward a cooperative approach, cooperative business model as successful all across America. You know, Ace Hardware is a cooperative. Land O'Lakes is a cooperative. We have group health out in Washington that's a cooperative. It's not government run, it's not government controlled, it's membership run and membership controlled and that is a model that would provide additional competition for for-profit insurance companies. And half the states in the country, there is no affective competition.

One place where Jim and I probably can agree is more competition is a good thing. More choices for consumers is a good thing. And that's what we're trying to provide, not a government run system -- a membership controlled, membership run that will provide additional competition.

STEPHANOPOULOS: What's wrong with that?

DEMINT: What the senator is talking about having a Fannie Mae or a Fannie Med type organization in every state, a government sponsored organization that decides what insurance you can have and what you can't have. It makes no sense when all we have to do is take these barriers away from interstate competition of insurance plans. We can have dozens and dozens of insurance companies competing for business and my children and his children. We don't need the government to take this over.

STEPHANOPOULOS: We're going to have to leave it there, but very quickly, Senator Conrad, are you going to finish your negotiations by August 7th?

CONRAD: You know, we're going to finish when we're finished and we're going to do everything we can to get it right. We're moving with dispatch. We meet hours every day. We've got the best analysts in the country helping us. We'll be ready when we're ready.

STEPHANOPOULOS: OK senators, thank you both very much.


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