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STATE OF THE UNION WITH JOHN KING

Interview With Senators Brown, Bennet, Shaheen; Interview With Senate Minority Leader Mitch McConnell

Aired November 22, 2009 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, HOST: I'm John King and this is "State of the Union."

(BEGIN VIDEOTAPE)

KING: The magic number, 60.

SEN. CHRISTOPHER J. DODD, D-CONN.: The motion is agreed to.

KING: Senate Democrats clear a critical health care hurdle, but will differences within the party unravel the sweeping measure? We'll go inside the deliberations with three leading Democratic senators, Sherrod Brown of Ohio; Michael Bennet of Colorado; and Jeanne Shaheen of New Hampshire.

Then in an exclusive interview, we'll hear the Republican reaction and strategy from Senate GOP leader, Mitch McConnell.

And our "American Dispatch" from Arkansas. Two small business owners showcase the policy divides that make health care politics so dicey for vulnerable Democrats.

This is the "State of the Union" report for Sunday, November 22nd.

(END VIDEOTAPE)

KING: We begin this Sunday morning with the Senate's dramatic step to open debate on major health care legislation. It was a rare Saturday night session, and in the end, a big win for the Democratic majority, but just barely. Leader Harry Reid needed 60 votes and he got just that. All 58 Democrats and both independents voted aye on the motion to proceed. Every Republican voted nay. Their leader will join us in just a moment for an exclusive conversation about the Republican strategy going forward, but first, the many challenges still ahead for the Democrats.

Let's talk those over with Democratic Senators Jeanne Shaheen of New Hampshire, Sherrod Brown of Ohio, and, in his first Sunday show interview, Michael Bennet of Colorado.

Congratulations are in order on this morning for the Democrats, but you got across the starting line. Let's talk about what it will take to get to the finish line. And the big divide in the party still is over the public option. Three supporters of the public option at the table here. But you saw Senator Lincoln of Arkansas says, I vote to go forward in this debate, I don't like the public option. Senator Landrieu, I don't like the public option, at least in its existing form. Senator Lieberman has said he will not vote for a bill that includes a public option.

Senator Shaheen, to you first. Will you have to get that up to get 60 in the end? You had 60 in the beginning, but to have 60 in the end, will you have to go to a trigger or some other form and give up what you would like?

SHAHEEN: You know, first of all, I think it's important to again what a milestone it is for us, after 50 years of debating health care, that we are now finally on the floor of the Senate, going to be able to debate this issue is significant progress forward.

You know, I support a public option. I think it's important for us to get competition in the health insurance industry so we can lower costs for people. But there are a number of ways to do that. We're at the beginning of this debate, and I think we've got to see how it plays out.

KING: Senator Bennet, you want to go home -- you're on the ballot next year -- you want to go home and say, we did this. It's not only is it important, not only did we debate it, but we passed it. Will you have to give that up to get 60 at the end?

BENNET: I don't know. My sense of it, John, is that people understand that there's a requirement in this bill that they have insurance. What they're saying to me is, even though they didn't say this early in the summer, what they're saying now is I want all the options. I want a public option, I want a private option, I want nonprofit. I want to be able to make the choice that's in the best interest of my family. I think other people are going to be hearing that too.

So I think last night was a big step forward, because it allows us to debate not just this issue, but a range of issues around health care that the American people, you know, deserve to have. As Jeanne said, after 50 years of delay, delay, delay, we finally now have the opportunity to debate these issues on the floor of the Senate.

KING: Let me try asking you it as a yes or no. If in the end, you cannot get Senator Lieberman, Senator Lincoln, Senator Landrieu and you can't pass a bill without at least going to a trigger, would you make that compromise?

BROWN: I'm not going to answer yes or no, because I don't think we get to that.

I think what happens, John, is there are two weeks, three weeks, whatever, of debate. Senator Lieberman, everybody has a chance to offer amendments. I'm going to offer amendments on some pharmaceutical issues, because I think the bill could be strengthened there. I know that my colleagues are going to do the same on some other -- that and some other issues. So they will have their chance to do this. And I think, in the end, I don't want four Democratic senators dictating to the other 56 of us and to the country, when the public option has this much support, that it's not going to be in it.

And I echo what Michael said, is that people want every option. If we're going to -- if we're telling people you have to buy insurance, we shouldn't tell them they've got to buy insurance from a private insurance company.

But in the end, I think that all four of our colleagues surveyed this -- look at this bill in the end and say, I don't think they want to be on the wrong side of history. I don't think they want to go back and say, you know, on a procedural vote, I killed the most important bill in my political career. I don't think they want to be there on that. So I think in the end, we get them.

KING: I was just in Arkansas this week, though, and if Senator Lincoln cast that vote, this is the most important issue, I'm going to cast the vote -- she may lose her job. Do you think that if that's the calculation, she should do it?

BROWN: I certainly can't -- I don't know what Arkansas looks like. I mean, I'm not an expert on Arkansas politics. But overwhelmingly, the public option is popular. The people that don't like the public option are people that oppose this bill anyway. I mean, it really gives people additional (ph) choice. It bends the cost curve down. It injects competition. In southwest Ohio and Cincinnati, two insurance companies have 85 percent of the market. That means low-quality, high-cost insurance. Provide another option, like the public option, and you get better prices and better quality.

KING: We've got some time to air this out. So let me give each of you, take a minute. You say you're going to have an amendment. Tell me how you would like to make this better.

BROWN: I would start on the pharmaceutical issue, that we need drug reimportation. We neat direct negotiations with the drug companies for Medicare to bring prices down, the same way the VA does, the same way most countries do. We need a generic path for biologics, where it's just too expensive for some of these new drugs like Herceptin and these biologic drugs which are an increasing percentage of our health care dollars are going into these biologics. They can be $20,000 to $50,000 to even $100,000 a year. There's no competition, no generic competition. Those are some of the things I would start with.

KING: Senator Bennet?

BENNET: I think there are three things that are all related to cost, because no matter where you fall out on public option, not a public option, the thing that our working families need more than anything else is to end these double-digit cost increases that they're having every single year with health insurance. So the first is to make sure we really have done all we can do to change the Medicare incentive structure so that we're driving quality and we're driving lower cost. I think, second, we need to do a much better job of making transparent what things actually cost. No one knows in this country what it really costs to get a knee replacement. No one knows what it costs to get other medical procedures. And they can't compare across a range in the geographic area. So I think that's very important for consumers and for providers.

The last piece is administrative efficiency. You know, our insurance companies and doctors have to fill out -- the doctors in particular -- multiple forms. The coding is all screwed up in a lot of ways, and people -- and it just isn't as easy as it should be. People are spending 30 percent of their overhead just trying to get paid by insurance companies. I think there's more we can do to streamline that too.

SHAHEEN: I agree. I think we've really got to address cost as part of this bill, and how we deliver health care to people. I have -- I agree with Sherrod's comments about the pharmaceutical industry, especially now as we see increased prices. There's more we can do there. I have talked about a current drug labeling laws that need to be changed so that there's more competition with generics.

And I also think we've got to do something about emergency room care. We've talked about how to improve emergency room care to reduce costs.

But that's what we've got to do in this bill. I was talking to a businessman from New Hampshire over the weekend, and he's got something called Highliner Foods (ph), it's a fish processing plant. He said that he can't afford the cost of his health insurance, and so he's got three choices. Either he can go out of business, he can automate, or he can go overseas. None of those choices are good for New Hampshire, good for America, or good for workers.

KING: Let's talk about how we pay for this. The Senate bill would cost about $850 billion over 10 years. Here's how it's currently paid for in the proposal before you. A 40 percent tax on so-called Cadillac insurance plans, those that cost over $8,500. $436 billion in Medicare savings or cuts depending on how you look at it, and we can talk about that. Increase in the Medicare payroll tax for those making over $250,000 a year, and a 5 percent tax on elective cosmetic procedures, already lovingly called the botax here in Washington, D.C.

As you know, a number of these proposals are quite controversial, and your friends in the labor movement particularly don't like the Cadillac insurance plan tax. Here's what Jim Hoffa, the president of the Teamsters, says. "This provision is really a massive tax increase on the middle class by calling it a tax on insurers. But it is naive to think that insurers won't pass this tax directly on to workers. The idea that this tax will curtail rising premiums is just dead wrong." Is Jim Hoffa right?

BROWN: Generally, he is.

KING: Will you (inaudible) that proposal? BROWN: I would prefer that we look more at the version that the House did on a surtax on people making $500,000 a year or more. Even with the House proposal, I know we're talking -- when you talk about either bill, but even with the House proposal, it's still -- the tax rate is still significantly less for upper-income people than it was before the Bush tax cuts for the rich that were unpaid for and caused us huge budget, in part, with the war and the Medicare privatization, that caused these huge budget deficits.

BROWN: And I know that Mitch McConnell, when he speaks after this, is going to spend a lot of time talking about the budget deficit.

But it's the Mitch McConnells of the world that voted for the war and didn't fund it, voted for the tax cuts for the rich and didn't fund it, and voted for the Medicare privatization and didn't fund it. That's why we're in this situation and the economy we have.

So it's just important as we listen to Mitch in the next segment that people kind of keep that as a...

(CROSSTALK)

KING: I will remind him of that point, but the Democrats are in charge now.

BROWN: I understand that. That's why were...

KING: They have the White House and both branches of Congress.

BROWN: That's exactly right. We're in charge now. And Jeanne Shaheen and Michael Bennet and I, all of us, have made sure this bill pays for itself. We're embarking on something very new and very important, this health care bill. And we've all committed that it be paid for, something that hasn't happened in 10 years.

That is no longer business as usual. And that's why -- that's one of the reasons why this bill is the right way to go.

SHAHEEN: And it's not just that it's paid for, it actually is going to reduce the deficit over the next 10 years by about $130 billion. That's real progress.

KING: And to make that happen, if you read the Congressional Budget Office analysis, if you talk to interest groups around town, even those who support you, academics, they say you have, you know, the $400 and something billion in Medicare savings. And some people call it cuts, other people say this is waste, fraud, and abuse, let's make a run at this.

But what we do know will happen is that next year and the year after, whether it's the hospitals, the hospices, the senior groups, will come back saying, this is too hard on us, this is too hard on us, give us some of that money back. Will you all commit today that if you pass this bill and it sets that target to save in Medicare, that you'll say no when they come back. And you may have to cast the tough votes against your friends saying, no, we committed to doing this, it is the key to bending that curve, and you will make the tough votes?

SHAHEEN: But, listen, I think there's a lot of misinformation about where the cuts from Medicare are going to come from. They're basically from two places. One is we're going to make private insurers who offer Medicare Advantage plans pay the same amount that everybody else is getting under Medicare. There are significant savings there.

And then the hospitals have said, we're going to be able to charge less for Medicare, because we're going to have a lot more patients, because a lot more people are going to be insured. And then there's a third provision that I think is reflected in a number of ways in the bill that Michael and I have been working on, which is hospitalizations, and making sure that people on Medicare, when they're let out of the hospital, are able to stay out because they've got better transitional care.

BENNET: I would say, John, I think it is critically important that we maintain the fiscal discipline that's represented by this bill. We maintain it as the bill works its way through the floor and also in the years to come. Because one of the things that people are really cynical about here is whether Washington actually can pass a piece of legislation and pay for it.

You know, they're worried about -- they don't like the existing health insurance system, that's clear, but they're very worried about our capacity to make it even worse. And so for those of us that are proponents of reform, I think we carry a heavy and very appropriate burden to make sure that we really are paying for it, not just in the near-term, but in the out years as well.

BROWN: And there are a number of components to this bill that aren't even counted in terms of cost savings, the discharge procedure, the first 30 days out of the hospital that Michael and Jeanne -- or that several are working on in the Senate, where a dietitian or a nurse or some home health care person spends -- monitors and stays with those people in those 30 days, continues to talk with them, that's not reimbursed now.

And there are ways of doing that. That will save a lot of money. The checklist that the physician at Johns Hopkins, Peter Provost, developed that saved hundreds of millions of dollars in Michigan. That's not counted in the savings.

All the wellness and prevention parts of the bill that Senator Harkin wrote in our Health, Education, Labor, Pension Committee that Michael and I sit on, all of that will be additional cost savings that are not so-called scored, too much inside-the-beltway...

(CROSSTALK) KING: Let's take a quick break -- let me take a quick break, we'll be back. Plenty more to talk about with our senators about what's in the health care bill for you. Don't go anywhere.

(COMMERCIAL BREAK)

KING: We're back with Democratic senators Jeanne Shaheen of New Hampshire, Sherrod Brown of Ohio, and Michael Bennet of Colorado.

Let's talk about another tough issue in the health care bill. And Senator Bennet, I was listening yesterday on the floor when you were talking about your views on this, and that is, how should abortion be dealt with national health care reform?

I want to show our viewers, here's what the Senate bill before you right now does. It bars the use of federal funds for abortion coverage. The public man that would be created could provide abortion coverage, but money from the premiums must cover the procedure, not tax dollars.

The exchanges that would be created in each state must have one plan that includes abortion coverage and one that does not. And people who receive federal subsidies to buy insurance could choose a health plan that covers elective abortions. But, again, the private insurance would have to make sure that money comes from premiums, not federal tax dollars.

Here's what the House bill does in contrast. It is much more restrictive on this issue. It bars the use of federal funds for abortion coverage. The public plan would not provide abortion coverage. And private plans in the health care exchanges could not provide abortion coverage. People who receive federal subsidies to buy insurance could not choose a health plan that covers elective abortions.

I heard you on the floor yesterday saying the House goes too far. Again, in the end, would that be a make or break for you? We're going to have to cut a deal at some point if you get this bill through the Senate. And some people say, oh, if there's no public option, that's not good enough, I'll walk away. What about on abortion?

BENNET: I don't think there's any reason to change what the long-standing policy has been from the federal government about...

KING: But what if the reason is, you don't get a bill unless you do?

BENNET: I think -- I don't know, John. I don't think we will get that bill and I think that it would be very unfortunate if we did. We shouldn't be using health care reform to rewrite long-standing policy from the federal government on abortion. It's just not right. It's not the place we should be doing it.

I think the Senate bill strikes a very good balance. It's the balance that we've had for many years around this issue. And I think there are also very important things in the health care legislation that deal with long-standing issues around discrimination against women in a way health care is provided and insurance is delivered.

And I think that's where we should end up. I don't see a reason to be where the House is on this issue. KING: Well, let me talk to you about the process a little bit. If you look at the front page of The Washington Post today, "Sweeteners for the South." To get Senator Landrieu's vote, just to proceed, just to go across the starting line, language was inserted in the bill that gives her state up to $300 million. To get Senator Nelson's vote, the leader agreed to drop a request that you take away the antitrust exemptions for insurance companies.

This got us to day one of the debate. Is this the way to do things? The central promise of the Obama campaign was to change the way Washington works. That's Washington as usual, is it not?

BROWN: It is and it isn't. I mean, I -- this bill is extraordinarily complicated.

BROWN: This legislation is -- you know, as Jeanne said at the outset of the show, 50 years, you could maybe even say 75 years -- Franklin Roosevelt attempted it, Harry Truman really attempted it in earnest...

KING: But is it important enough to buy votes?

BROWN: I don't say it that way. I think there are a lot of things that we all go to the leader and talk about things in our state. And news reports sometimes aren't accurate about what might have been done for somebody or what might not have been done for somebody.

I want to see this bill pass. Nobody likes these kinds of -- any kinds of deals. I think anything that's done needs to be in the best -- in the best interest of those states and this country. I think those probably helped, if that, in fact, really happened -- I have no way of really knowing if it did. I suppose that helped a lot of people in Louisiana that don't have insurance, and so I think we move forward.

We do what we need to do, within ethical bounds. We do what we need to do within practical bounds. Keeping this, as we've all said, keeping this bill, keeping the costs down and keeping this bill budget-neutral or better, as Jeanne points out.

KING: Does it make it harder to do that? Does it create a climate if you're on the fence, legitimately on the fence, you think, all right, well, maybe I want to be a good Democrat and swallow my pride or swallow an issue or two and vote for this in the end, but I'm going to get something for it, and that's going to cost money?

SHAHEEN: Listen, in the end, this is going to be a compromise. It's not going to be a perfect bill, but it's going to be a very important starting point. And I think it's important to point out that this bill is not just about how do we deliver health care in a way that is more cost-effective, because families can't afford it anymore, business can't afford it anymore, and the economy can't afford it.

But it's also about how do we do it in a way that improves people's health and their lives. And, unfortunately, we're spending more money right now on health care in this country than any other industrialized nation. And yet, we're not healthier. And so we've got to change the way we do things. And that's what this legislation is about. BROWN: John, 400 Ohioans every day are losing their insurance. And you know, the Republicans, it was amazing last night, 39 Republicans, every Republican that voted, said, we shouldn't even debate this. We shouldn't even move forward. We shouldn't even have a chance to go to the floor and offer amendments to improve it. 400 Ohioans every day. You know, dozens of Coloradans and New Hampshire -- people in New Hampshire -- I mean, we need to do this, and we aren't hurrying it. We've taken the whole year, and not to mention 75 years, and this is done right, and we need to do what we need to do to get this bill enacted, and it's just so important.

KING: We saw this week how hard it will be to bend that cost curve in the example of when the mammogram study came out and the pap smear study came out, and you had groups outside of the government but affiliated with the government saying, change the policy on mammograms. Make it 50, not 40 for the screening, the pap smear thing. Do you believe -- use this dustup as an example -- when it comes to evidence-based medicine, comparative research, that we need -- do you believe we need that to bend the cost curve, but what's going to -- it's going to be men for prostate next, or somebody's vision test after that?

BENNET: I do, and I think that we've got to -- this bill does a very important thing, which is it gets some of those decisions out of the hands of Congress. You were just talking about how, doesn't this look like it's the same old thing? You know, the same old political, inside-Washington, D.C. special interest game? And it does look like that to a lot of people. This has been about moving the ball down the field, getting through to a place where finally we can now debate the bill comprehensively, end to end, and Americans can see whether or not this is something they want to support, which I think is great.

And I think it's very important as part of that, that we get, for example, out of the hands of Congress, making these decisions on a one-off basis about how people are reimbursed, for example, for oxygen. I mean, you can imagine what lobby day looks like for oxygen in the United States Congress. People come in and say, you should use this much oxygen at that price. It has nothing to do with patients, it has nothing to do with the quality of care, or comparing a certain kind of treatment in one place to another. And I think that if we can establish an infrastructure to really do that in a thoughtful way over time, not only can we bend the cost curve, we can take the politics out of it, and the quality of care will improve as well.

KING: I want to move on to some other issues. Before I do, I want to try one yes-or-no question on you, a new senator who's on the ballot next year in a tough state. If you get to the final point and you are a critical vote for health care reform, and every piece of evidence tells you, if you support that bill, you will lose your job, would you cast the vote and lose your job?

BENNET: Yes. KING: All right. That tape will be held -- I hate to tell you that, but that tape will be held right now. I want to move on. There's a lot of criticism this week. We saw unemployment in 29 states went up. In two of your states, it went down a little bit. In one of your states, it went up a bit. In 29 states, the unemployment rate inched up again. And there's been a lot of criticism of the president's economic team, including from Peter DeFazio, who is a Democrat. And he said this, Congressman Peter DeFazio. "It's pretty embarrassing for a Democratic administration and a Democratic Congress to be identified with total attention to Wall Street and nothing for Main Street and jobs. I still support the president, I just think he's being poorly served by his economic team."

Some Republicans went further and said Secretary Geithner should resign.

Is this administration and its economic team in touch, in sync with the people of Youngstown and Cincinnati and Cleveland at this moment, or more in touch with Wall Street?

BROWN: I think the president is. I think that the vice president is. I think the advisers are mixed. I spoke with secretary -- I was with Secretary Geithner at the Treasury Department this week at the small business summit, Senator Warner and I with a bunch of small-business people with Karen Mills, the administrator of SBA, and Secretary Geithner. And I took him aside and said, we need more focus on manufacturing, we need an industrial policy. Manufacturing creates middle-class jobs, and there's not been the -- there's not been a manufacturing policy in this country for forever, really. And the former presidents haven't had it, and -- and President Obama's moving in that direction. I mean, Ron Bloom and others in the administration really are beginning to focus on that. So I think they've turned a corner. I think, particularly next year, the focus is all about creating jobs, and I think we'll begin to see changes.

BENNET: What's staggering to me about this is it's not just that we're in the worst recession since the Great Depression, although we are. It's also that in the last period of growth, working families income in the United States actually declined during the Bush recovery. So our working families are trying to recover not just from one recession, but two. This is not just a short-term issue about stimulus. It's a long-term issue about where we're headed with this economy. And I think we do need to turn more of our attention to that.

I think we need to do much more to get small business access to loans again so they can start hiring again. We haven't done a good enough job at that. We really do need to turn our focus in a very meaningful way to Main Street.

KING: And as he makes that point, he says we, he's being polite. Does the president's team need to do a better job?

SHAHEEN: Sure. I think we all need to do a better job. I voted against the TARP funding because I thought we weren't holding the financial community accountable enough for how that money was being spent. So I think we've got to look now at what more we can do. Both Sherrod and Michael made the point, we need to make sure business gets access to credit. We need to have a manufacturing policy. We need to do more to give business access to international markets so that they can export more. So there's a lot more we need to do. We need to invest in our infrastructure, and I think the president and his economic team recognize that, and we've all got to work together and work harder.

KING: Senator Shaheen, Senator Bennet, Senator Brown, thanks for coming in on this Sunday morning. Appreciate it. We'll continue the conversation. We've got a long way to go here on both the health care and the economic front.

And up next, the Republican perspective on health care, Afghanistan, and more from the Senate Republican leader, Mitch McConnell. Stay with us.

(COMMERCIAL BREAK)

KING: I'm John King and this is "State of the Union." Here are stories breaking this Sunday morning. Chinese media say 87 people have died in a coal mine explosion in the northeastern part of the country. And a rescue effort is under way for another 21 workers trapped underground. Officials say it appears the cause was a gas explosion.

Students at the University of California-Santa Cruz are refusing to leave the administration building where they have been staging a sit-in since Thursday. They say they expect police will soon forcibly remove in.

The students are opposing a 32 percent tuition hike. The demonstration in Santa Cruz is just one of the several protests at U.C. campuses across the state this past week.

An out-of-this-world experience for astronaut Randolph Bresnik. He celebrated the birth of his second child while in orbit. Bresnik's wife gave birth to their daughter back home in Houston last night. Just hours earlier, Bresnik was taking a space walk outside the International Space Station. He and the rest of the Shuttle Atlantis crew are scheduled to return to Earth on Friday.

Those are your top stories here on "State of the Union." Up next, the Senate's top Republican, Mitch McConnell joins us for an exclusive conversation about health care, Afghanistan, and more.

(COMMERCIAL BREAK)

KING: With us now exclusively, the Senate Republican leader, Mitch McConnell of Kentucky.

Mr. Leader, thank you for joining us. You don't like the way the vote went down last night. You were on the losing side.

Now that the Democrats have 60 votes to start debate -- a long way to go, a lot of issues to debate, but do you believe, like it or not, that that vote means that the Senate will pass and the Congress will send to the president a health care bill late this year or early next?

MCCONNELL: Yes, not necessarily. First of all, we'll have an extensive debate. The Senate's not like the House. They had three votes on one day and it was over. Just to look at recent legislative activities on the Senate side, we spent four weeks last Congress on a farm bill, seven weeks creating the Department of Homeland Security a few years ago, eight weeks on an energy bill. The Senate doesn't do things quickly.

So we'll have multiple amendments, John, from both sides, a free- ranging, open debate. And as we begin the debate, the one thing we know for sure, that didn't come up in the last segment -- I know why it didn't; they don't want to talk about it -- we know the American people don't want us to do this.

The CNN poll is the same as all the other polls. The American people are opposed to this particular health care bill. They thought this was all going to be about controlling costs, but, in fact, we've ended up with a $2.5 trillion budget-busting proposal that CBO, the scorekeeper in Congress, tells us, after it's all over, will not control costs.

KING: The scorekeeper does say, after 10 years, it brings down the deficit, if the Democrats cast all those tough votes.

MCCONNELL: Yes, but, you know, it was full of gimmicks. They delayed for five years the benefits. If you look at 10 years for the whole program fully implemented, it's $2.5 trillion.

So this proposal picked the most favorable 10-year period in order to get the CBO to say, within this framework, it would actually bend the deficit some. But that -- it's not the truth. I mean, everybody knows it's not the truth.

KING: Is the Republican strategy just get in the way and block it? Or is the Republican strategy, try to improve it and then maybe vote yes on a final bill that you don't like some of it, but it's better than today?

MCCONNELL: Well, this bill is certainly not better. It drives the costs up for Americans; it cuts Medicare dramatically.

KING: Now, the Democrats say it saves Medicare, but it doesn't cut a benefit.

MCCONNELL: Yes, let me tell you, five years ago we passed, when my side was in the majority, a rather modest reduction in the rate of increase of Medicare, at about $10 billion over five years. My counterpart, the majority leader, called it immoral. This is half a trillion dollars over 10 years, higher taxes on individuals and on businesses, higher insurance premiums for 85 percent of the American people who already have insurance.

That's not reform. That's not what the American people thought this was all about.

KING: Answer the skeptic out there who's watching right now. You just made the point. You were the majority leader. The Republicans ran the Senate; they ran the House, as well, and you had a Republican president in the White House in George W. Bush. Answer the skeptic out there who says, well, why should I listen to you now, Mitch McConnell? Where was the McConnell bill to deal with pre- existing conditions? Where was the McConnell bill -- as Republicans say, let's do this; let's sell insurance across state lines -- where was the McConnell bill to help bend that cost curve in a helpful way? So how can you say no now, when you didn't -- and say, let's do this incrementally now, when you didn't do it then?

MCCONNELL: Well, we didn't have the votes to pass it. They were against doing something about junk lawsuits against doctors and hospitals which would save $54 billion. They were not in favor of the kind of wellness programs that we think would drive down the costs. They were not in favor of insurance competition across state lines. They were not in favor of equalizing the tax cod, so that individual purchasers of insurance are treated the same way corporate purchasers of insurance are.

KING: Again, the skeptic might say, why didn't we have all these issues on the floor, though? Harry Reid may lose this. He may lose this.

MCCONNELL: We had myriad health care debates during the period that President Bush was in office and during the time when there was a Republican majority. The Democrats simply don't want to do incremental changes.

John, we feel that we ought to go step by step to fix our current health care system. We do not believe, take -- the government taking over one-sixth of our economy, completely restructuring one-sixth of our economy is a good idea at any time. It is a particularly bad idea when we're looking at double-digit unemployment.

This bill is a job-killer. If you were running a small business, John, and you wanted -- thinking about whether or not to expand employment next year, and you looked at what's coming your way with this health care bill, you're going to have health care taxes, you're going to have expiration of the Bush tax cuts, so your tax rates are going to go up. The cost of hiring additional employees will be greatly exacerbated by the steps that they're taking. This is the wrong direction to go.

KING: And you mentioned you would prefer incremental reform. I want to ask you a question in the context of what you know is coming from the Democrats over the next several weeks as this debate goes on. Leader Boehner was here a few weeks ago; he heard it in the House. Senator Durbin and the Democrats say, Well, we have a plan. Maybe it's not perfect, but where's the Republican plan?

(BEGIN VIDEO CLIP)

DURBIN: I challenged Mitch McConnell and the Senate Republicans to produce a health care bill that will save us $127 billion in the deficit over the next 10 years, and there's nothing posted on the Internet. I challenged Mitch McConnell to come up with a bill that makes sure that 94 percent of Americans have the peace of mind of health insurance coverage, but the Republicans put nothing on the Internet.

(END VIDEO CLIP)

KING: Will you continue to say, "We want to do this incrementally," or will, because of the politics of the moment, do you feel compelled to come up with a comprehensive Republican alternative?

MCCONNELL: Yes, what we don't think is America wants another 2,000-page bill. It's this high. We had it on the floor. We don't think that's the way to go. We think we ought to go step by step to improve the -- the system that you and I have just been talking about, some of the steps we would take that would have an impact on the cost of health care.

The American people are not complaining about the quality of American health care. They're complaining about the cost of it. This proposal that the Democrats voted to proceed to last night will explode cost; it will make the situation worse. We think you ought to go in a different direction.

So don't hold your breath. We're not planning on having a 2,000- page bill.

KING: Let me -- well, before I shift gears, let me ask you this. You've been at this a long time, both as the majority leader and as a minority leader. On a scale of 1 to 10, the likelihood the Senate will pass a health care legislation this year and that Congress will send the president a bill before the State of the Union address next year?

MCCONNELL: Well, we don't often ignore the wishes of the American people. They are literally screaming -- many of them -- telling us, "Please don't pass this. Don't pass this bill."

If the majority is hell-bent on ignoring the wishes of the American people, they have 60 votes in the Senate. You would think that they might be able to do this, but I believe there are a number of Democratic senators who do care what the American people think and are not interested in this sort of arrogant approach that everybody -- sort of shut up and sit down, get out of the way, we know what's best for you.

Now, we're hearing from the American people, they don't want us to pass it. So I would -- you know, it's hard to handicap the ultimate outcome, whether the majority will ignore the American people or not, but they'll be heard. The American people will be heard. They'll either be heard sooner or they'll be heard later.

KING: Let me shift to the economy. Unemployment went up in 29 states this week, down in 13. I've traveled to 45 states in the last 45 weeks. And as much as they care about the health care debate, they care, first and foremost, about jobs and the economy.

There's been a lot of criticism of the president's economic team, including from a House Republican who said this week the secretary of the treasury should quit. Let's listen.

(BEGIN VIDEO CLIP)

REP. KEVIN BRADY (R), TEXAS: Conservatives agree that, as point person, you failed. Liberals are growing in that consensus, as well. Poll after poll shows the public has lost confidence in this -- in this president's ability to handle the economy. For the sake of our jobs, will you step down from your post?

(END VIDEO CLIP) KING: Now, Secretary Geithner, of course, says no. Are you among those who think that he's the problem? Does he need to go? Or is that just a little political pinata?

MCCONNELL: You know, look, I'm not here to call for anybody's resignation today. I think we ought to go in a different direction.

First of all, we ought not to pass this job-killing health care bill; that would be a good place to stop.

Second, we ought to repeal the balance of the stimulus package, which has been a failure. We added almost $1 trillion to the debt earlier this year, presumably to hold unemployment below 8 percent, which is what the administration said it would do. Now unemployment's over 10 percent.

In my state, John, it actually went up last month, unemployment getting worse. Rather than passing this job-killing health care bill, why don't we concentrate on getting the economy in better shape?

KING: I want to ask you -- last time you were here, you were pushing the president to make his decision about Afghanistan.

MCCONNELL: Yes.

KING: The White House now tells us it will probably come not this week, but the week after, and they're working with NATO allies. As he makes this decision, you know the pressure from the left, and I want you to listen to the speaker of the House, Nancy Pelosi. She did an interview with National Public Radio. She says this is a bad idea, not worth the money and not worth the American blood.

(BEGIN VIDEO CLIP)

PELOSI: The president of Afghanistan has proven to be an unworthy partner. How can we ask the American people to pay a big price in -- in lives and limbs and also in dollars if we don't have a connection to a reliable partner?

(END VIDEO CLIP)

KING: Does the speaker have a point? MCCONNELL: Look, I wish that we had a better regime in Afghanistan, but this is really about us, not them. Has everyone forgotten that when the Taliban was running Afghanistan, that's when Al Qaida planned and launched the 9/11 attack? We're not in Afghanistan for any reason other than to protect America.

And I had hoped -- and I still hope -- that the president's going to make the right decision here, which is to keep the pressure on. He said during the campaign that the war in Afghanistan was the good war, the war in Iraq was the bad war. Well, this is the good war and -- by his own definition.

And we need to keep on offense against both the Taliban and Al Qaida -- and by the way, this is not just Afghanistan, it's also Pakistan -- if we want to continue to protect the homeland.

So I haven't given up hope the president's going to do the right thing. I think, John, the military people are getting a little frustrated with the delay in making the decision. It's really time for the president to make the call.

KING: Let me ask you, lastly, Chairman Levin of the Armed Services Committee has said that he thinks we need a war surtax of some sort, a surtax on those making $200,000 or $250,000 a year to help pay for this. He says that's the way we need to go, and some in the House have called for something similar, not exactly the same as Chairman Levin. Do we need that, a special tax that says this is to pay for the cost of these wars?

MCCONNELL: Well, we've -- we've paid for both of these wars by borrowing money. There's no question about it. We did it in the previous administration; we've done it in this administration. It's a tough call as to whether or not we try to fund it through existing Defense Department resources or not, but we have had a tradition...

KING: You don't rule out some kind of a war tax?

MCCONNELL: I do, because I think we ought -- this is about our national security, you know? The Democrats are willing to bust the budget to pass a domestic program that the American people are against, but all of a sudden find it offensive to do something that is absolutely essential to the security of Americans here in the United States, which is to keep on offense in the war on terror.

KING: The Republican leader of the United States Senate, Mitch McConnell of Kentucky, thanks for joining us.

And up next, Democratic Senator Blanche Lincoln was the critical 60th vote to move the health care debate along. When we come back, we're going to take you to her home state of Arkansas and show just how that vote might cost Senator Lincoln her job.

MCCONNELL: Thanks, John.

(COMMERCIAL BREAK) KING: The health care policy and political debate forces some tough choices. The pressure perhaps greatest on the woman who cast the 60th vote to open debate last night in the Senate. She is Senator Blanche Lincoln of Arkansas. She was once the youngest woman elected to the Senate. Prior to that serve served in the House of Representatives.

Look at her approval rating, 54 percent a year ago, down to 43 for Senate now. So in our "American Dispatch" this week, we wanted to travel to Senator Lincoln's home state of Arkansas to get a sense of the pressure on her as she asked the voters to re-elect her in a very conservative state.

(BEGIN VIDEOTAPE)

KING (voice-over): Aisha's Fish and Chicken is a family business, known for its friendly service.

STANLEY WALKER, OWNER, AISHA'S FISH AND CHICKEN: We're going to hook them today, huh?

KING: Wings and catfish.

WALKER: A five-piece wings, extra sauce on it.

KING: And a spicy signature sauce.

WALKER: 131.

KING: Tough times in a bad economy, so owner Stanley Walker says health care is out of the question.

WALKER: It's too expensive right now. We're kind of having a little bit of trouble keeping our head above water.

We had it at one time, but it was so expensive that we finally dropped it. I get a lot of complaints from my wife about it that we don't have health care.

UNIDENTIFIED FEMALE: Five-piece, no sauce.

KING: It is both a business decision and a personal risk. Stanley has diabetes and takes just half of his four-pill a day prescription because he can't afford the $500 a month bill for the full dose.

WALKER: Because I work by myself a lot and I'm always moving all the time, I don't want to get somewhere and go into a coma, you know, because my sugar dropped too low. It's a situation where you actually take a gamble, but you can't afford not to.

KING: Stanley hopes Congress makes it makes health care more affordable and thinks creating a new government-run public option is the best way to do that.

WALKER: If they don't do that, then I don't think I will vote for them.

KING: It's an important statement because African-American votes in places like Pine Bluff will be critical in next year's midterm elections. And Democratic Senator Blanche Lincoln faces a tough re- election race.

PROF. ART ENGLISH, UNIVERSITY OF ARKANSAS AT LITTLE ROCK: No question they see an opportunity here and an opportunity to win a Senate seat doesn't come often for Republicans in Arkansas.

KING: Senator Lincoln opposes a public option, and while that angers liberals, political scientist Art English says Lincoln needs to worry about conservative Democrats and independents in a state President Obama lost by 20 points.

ENGLISH: It's tough. It's like that show, "Malcolm in the Middle," but this time it's kind of, you know, Senator Blanche Lincoln in the middle, and it has been tough on her.

KING: Larry Levy owns this Little Rock brake shop, and has gone from paying 100 percent of employees' health care to 60 percent.

LARRY LEVY, OWNER, STUART'S BRAKE SHOP: It kept going up and as my employees got older, the premiums, they began to get so high we just couldn't realistically afford it.

KING: But Levy sees disaster in Democratic plans to create a public option or a mandate that everyone buy health insurance.

LEVY: We don't know what it's going to cost us. We have health issues, I agree. There needs to be reform. But let's identify the problems that we have and let's fix those problems. Let's just don't throw out everything and start all over.

KING (on camera): They say that if taxes go up, it will only be on people above 250 grand a year, but you don't buy it?

LEVY: No, no, I don't. I don't buy it. We middle-class people will shoulder the burden. I have no question about that.

KING (voice-over): Levy describes himself as a conservative who did not vote for Mr. Obama, but does sometimes votes for conservative Democrats. He is not a fan of Senator Lincoln.

LEVY: She is playing games right now, I think, you know? She is just kind of swaying back and forth. I know she's in a tough position, but if she'll listen to her constituents we don't want her to vote for this, I think.

KING (on camera): You think that she has -- she had better listen?

LEVY: I think she needs to listen if she wants to keep her job, yes.

KING (voice-over): But Levy says Lincoln has already lost his vote. He sees Washington as veering too far left and sees the midterm elections as a chance to vote Republican and put the brakes on the Obama agenda.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

KING: I'm John King and this is STATE OF THE UNION.

(BEGIN VIDEOTAPE)

KING (voice-over): Sarah Palin is back under the media spotlight with a new book. Is the former vice presidential candidate faring any differently with reporters and commentators this time around?

And after 25 years at the top of daytime TV talk, Oprah Winfrey announces she's moving on. Jerry Springer weighs in on how his fellow talk show host has changed the nation's media and cultural landscape.

In this hour of STATE OF THE UNION, Howard Kurtz, as always, breaks it down with his "Reliable Sources."