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Health Care Summit

Aired February 25, 2010 - 14:00   ET


WOLF BLITZER, CNN ANCHOR: And David Gergen, I thought they both did a very strong job in making their respected cases.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: That's the most animated I have ever seen Lamar Alexander in a public speech. I mean, he was forceful.

He's a very low-key guy. He's very bipartisan. He does work across the aisle very well. I happened to talk to him yesterday, and he was previewing some of what he was going to say, but I had no idea he would come out of the box as strongly as he did.

BLITZER: And it was pretty smart, I think -- we've made this point, Gloria -- for the Republican leadership. John Boehner, we really haven't heard much from John Boehner. Mitch McConnell, we really haven't heard much from Mitch McConnell -- to delegate a lot of this responsibility to their team that really knows a lot about health care.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: They clearly made a decision to take away the polarizing forces. I mean, you saw the Democrats. You had the same old, same old, Harry Reid, Nancy Pelosi.

Here, the leaders kind of deferred to their experts. They had clearly planned for this, assigned people certain areas of expertise.

One thing I want to say about from the White House point of view, they are happy any time you see this president acting differently. They believe they got in a trap because they didn't bring the change to Washington they had promised. Here's a president kind of convening this kind of open session saying over and over again to Republicans, let's not focus on where we differ, but where we agree. They think it's good for this president.

All right. The president has now asked everyone to sit down, take their chairs. I assume members of the House are back from the House floor, where they had a chance to vote on what piece of legislation.

As the president resumes, we'll listen.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There were several people who were still in the cue who didn't have a chance to speak prior to us breaking. The topic was still insurance reform, although obviously these things interrelate, and I suspect that people may have some other issues that they want to raise. After this, we're going to go to the issue of deficit and -- which touches on some of the issues related to Medicare that have been raised already. And I'm going to actually have Joe Biden open that up.


OBAMA: Well, no, no. I mean, we will be -- we will be talking about health reform, Charlie. I guarantee you will be called on before -- you'll have a chance to talk about all these issues. All right?

UNIDENTIFIED MALE: Mr. President, what time do you expect to end the meeting?

OBAMA: My hope is that we get out of here -- we're running a little bit late, but for having a lot of elected officials sitting around a table, we're not too late.


My hope is, is that we can adjourn by 4:15. All right? OK. 4:15. Originally it was scheduled to go to 4, we're starting a little bit late on this front, you know. So we'll see if we can get out of here by 4:15. All right?

That will require probably a little more discipline on all our parts, including myself, than was shown in the morning session, although let me just say that I thought the tone of the discussion was helpful and I appreciate everybody's participation so far.

With that, I'm going to go to Mike Enzi. (INAUDIBLE) I'm going to go to --



DINGELL: -- talking about leaving, Mr. President, please put me on the list.

OBAMA: Well, I guarantee, you guys are all going to have a chance to speak.

But we're going to go to Mike Enzi, and then we're going to go to Tom Harkin. I know that we had Jay Rockefeller was still on the list. Was there another Republican that wanted to speak just on the insurance reform issues?


OBAMA: You want to go to John Barrasso?

Well, all right, we'll let -- we'll let you guys split time on this one.

All right. Mike?

SEN. MIKE ENZI (R), WYOMING: Thank you, Mr. President, colleagues.

When we're -- when we're talking about insurance reform, we haven't really talked about, but Representative Slaughter kind of opened the door on it, and that's Medicare.

Seniors out there are really nervous. Seniors are the ones objecting the most to the program, and it's because they see half a trillion dollars coming out of their program.

If Medicare were separate, and any savings that we did in Medicare reform went back into Medicare, it would do a lot to relieve the tension that's out there. It'd even be a way to pay for the doc fix.

So I'm hoping that can be a piece of what we're doing.

I really appreciate this exchange. It would have been helpful had we had this nine months or a year earlier and had it in even more detail and for more days.

What we were presented within the HELP Committee of course was a bill that was already half drafted, and we started the markup on it, and then we got the other half later, and since we had not had any input to the drafting we're credited with 150 amendments. Well, 17 of those amendments were Senator Murkowski where she was inserting Native Americans and tribal in 17 different places. I had 11 of them where we put in a thing that required agencies to cooperate.

So the ideas that we had -- when Senator Kennedy and I were working bills, we'd set down some principles and then put some detail in, and then draft the bills together. And I hope that that's something that we go to on future bills. It works. In a three-year period, he and I got 38 bills signed by the president. In the last year I've gotten two that I've gotten pens from this president. And the way that we've done those has been through that kind -- that kind of a process, and unless we go through that kind of a process, I don't think we're going to -- I don't think we can get to the bipartisan thing, and that's what the purpose of this meeting is, is to kind of get all these ideas together and see how they gel.

In insurance reform, small-business health plans, that's different than the AHPs, which is what they were talking about, and it covers some of the problems that were talked about.

One of the problems is mandates. And Olympia Snowe contributed to that part. She had a provision that if 26 of the states adopted a mandate, it would be a mandate nationwide. And as other mandates became 26, they would be included with it, too.

We talked about health savings accounts. I don't think that meets some of the federal minimum standards that the federal government might put on it, and that's going to disappoint some of our employees, because that is one of the options that federal employees have, is health savings accounts.

And it's particularly good for the younger, healthier people. They can get that. They've got catastrophic coverage. If they put the amount of money that they would have spent on a Blue Cross plan or some other plan, the difference between the two, into a savings account, in three years they've covered the huge deductible, and they can continue to do that tax-free. So it's a -- it's a process that would be really objected to if it's excluded or changed.

I like the exchanges, and the reason I like the exchanges is it's kind of a form of bidding, it's more transparency, people can see what they're buying, and that would be a big help. When we were in the shoe business, my wife used to -- after 10 years she decided she'd bid out our insurance. We didn't know there was that much flexibility in insurance. She saved a bunch. And then, of course, she didn't -- since we were selling shoes, it's kind of a fixed price, so she didn't really take the low bid and then go back to somebody else and say, "Can you make this a little lower?" But that insurance company we'd been with for 10 years came to us and said, "We could have done a better deal." She said, "You should have when I was buying the insurance." And we got much better -- much better bids the next year.

So these exchanges can be good. But what I would hope you would consider is having the exchanges to list anybody's insurance that wants to put in on there, and then mark the ones that meet the federal minimum standards so that people can decide really what's out there in the market, and I think it would pull up some of the ones that are lower down up into the category, and at the same time everybody could see what all is on the market out there, and hopefully regardless of states.

Thank you, Mr. President.

OBAMA: Thank you very much, Mike. And thanks for (inaudible) succinct. Thank you very much. And I thought you shared some important ideas there.

Tom Harkin?

SEN. TOM HARKIN (D), IOWA: Mr. President, thank you again for bringing us together today. I think, if anything, what I have learned here so far is that, quite frankly, we may be closer together than people really think in actually getting agreement that we can move forward on. I hope that's the case.

There's been a lot of figures thrown out here and a lot of process things, but I keep thinking we've got to bring it back home to what this is all about. We all have our stories.

I got a letter yesterday from a farmer in Iowa. It really encapsulate (INAUDIBLE).

"I'm a 57-year-old Iowa farmer. I'm writing to voice my concern regarding my family's rapidly escalating health care costs. On Saturday, February 20th, I received a notice from Wellmark Blue Cross/Blue Shield of Iowa informing me that our health insurance premium will be increasing $193.90 per month, to a monthly total of $1,516.20.

"This is a 14.6 percent increase and will result in a yearly cost of $18,194.40 for a family of four. Ten years ago our monthly health insurance premium was $373.50 per month for a similar policy which had a lower deductible and covered three additional children.

"Health care costs are out of control and as a self-employed individual I feel powerless. At the current rate of increase, by the time I reach Medicare age, my premiums will cost $42,000 per year.

"As a farmer, I manage risk on a daily basis, weather, weeds, insects and fluctuating commodity prices. I have not yet found a way to control my exposure to health care expenses.

"Because of pre-existing conditions, I've been denied access to coverage under more economical insurance plans. Therefore I'm stuck in an expensive pool and have few options.

"The best option would be for the U.S. Congress to pass comprehensive health care reform, resulting in affordable health care for all. The health of my family and the future of my small business depends on it.

"Sincerely, Raymond Smith, Buffalo Center, Iowa."

Mr. President, we spent -- I hear talk about, well, we've got to start over and do all this thing again. You know, we spent one year considering a range of ideas from experts from all over the political spectrum. Two committees, the HELP Committee, under the able leadership of Senator Dodd; the Finance Committee, under the leadership and Senator Baucus, held over 100 bipartisan meetings and walk-throughs to discuss this bill. Our bill contains over 147 distinct Republican amendments.

Now, on the issue of health insurance reform. Of the 10 key elements in the House bill, we have nine of them in our bill -- nine out of 10. That's not bad. The only one that's missing is the -- is the health savings accounts. But nine out of ten are in our bill that are in the House Republicans' bill.

Now, again, what are they? You know, again, preexisting conditions -- we've covered that; no rescission when you get sick; no lifetime annual caps, no gender-based ratings; keeping your kids on until they're age 26.

That's in the House Republican bill. That's it's in our bill. So I think we're very -- we're very close on this.

The last two things I just want to address myself to is this idea that somehow we can do a little bit; we can take an incremental type of an approach; somehow we can do insurance reforms but we don't have to do anything else.

Well, quite frankly, if we want insurance reforms, you can only do that if everybody's in the pool. You can only get everybody in the pool if you make it affordable for middle-class families and others. You can only make it affordable for middle-class families and others if you have cost controls.

What I'm saying, Mr. President and others, is this all hangs together. You can't pick one out and do it without doing it all together. It all hangs together.

Cases in point: Some states, in the '90s, tried to do health insurance reform without doing anything else. And they found it to be a debacle because the insurance premiums skyrocketed.

New Hampshire, Kentucky and Washington were forced to repeal their reforms because of that. Case in point, Massachusetts, in the '90s, put in health insurance reforms without anything else. Individual market premiums doubled.

Four years ago, when they did their comprehensive reform and they put the package together, premiums dropped by 40 percent in Massachusetts.

That's why you can't do this incremental approach. Every time I hear about -- you know, we're sinking. We're drowning, in this country, on health care. An incremental approach is like a swimmer who's 50 feet offshore drowning, and you throw him a 10-foot rope. And you say, well, it didn't reach him, but we'll get it back and we'll throw him a 20-foot rope next time. Then we'll throw him a 30-foot and a 40 -- by that time, the swimmer's drowned.

And that's what's going to happen to Ray Smith and so many other families in this country. They're going to drown by the time, if we do this kind of incremental type of an approach that I hear others talking about.

Lastly, I would like to put this in a different kind of a contextual framework. We don't allow segregation in our country on the basis of race, creed, color, national origin, et cetera. Twenty years ago this year, we also said we're not going to allow segregation on the basis of disability, and we passed the Americans with Disabilities Act.

And yet we still allow segregation in America today on the basis of your health. Why should we? Why should we allow that to happen?

It's time to stop segregating people on the basis of their health. That's why insurance reform is so vital, because the health insurance industry in this country is based on a flaw. And the flaw is the ratings are based on segregating people because of their health.

Think about that. Whenever I hear the word "pool," this pool, that pool, this pool, I think segregation. You're segregating people out because of their health status. I think it's time to end that.

I sold insurance. I was an insurance agent when I was a young man. And there's one principle of insurance I learned then that I've never forgot. The more people in the pool, the cheaper it is for everybody.

You start setting up these pools, you're going to make it more expensive and you're going to be segregating people on the basis of health. Let's think about that. It's time to stop that kind of segregation in our country.

OBAMA: All right, Tom. The -- Dave Camp?

REP. DAVE CAMP (R), MICHIGAN: Thank you very much. On the issue of insurance reform and pre-existing conditions, there are responsible ways to solve this problem and reduce the cost of health insurance for everyone.

And we support state universal access programs that address high- risk pools and reinsurance, that makes affordable coverage available to those who are sick and those who have a pre-existing condition.

And I won't go all of those -- through all of those things that Dr. Boustany and others here have talked about. But -- and our approaches are somewhat similar on this issue, pre-2014, in the period where the House and Senate bills are wrapping up -- ramping up.

But they are -- there is a pretty big distinction, and that is that there's a key difference in the approaches. We prevent waiting lists during that period, and we have these programs managed by the state level. And they're robust enough that CBO has scored that they'll be effective.

And what -- what the House and Senate approaches are is that those rules are set in Washington. And the House and Senate bills are similar in that, if you look at the Senate bill on page 48, 51 and 52, it's the unelected secretary of health and human services who has the authority to establish waiting periods for access to these programs, raise premiums, reduce benefits. And so it is a very -- while we are similar in what we talk about, there's a very key different approach there.

And then, after 2014, when the bill fully comes into play, you have a very different approach there. And what you do is establish a pre-existing condition and link it with the individual mandate. And the American people have told us they don't want to be forced to buy health insurance that they don't want and they can't afford.

And this is a significant issue across the country. And the American people are telling us that the individual -- the mandates, the requirements to buy insurance are something that they want us to scrap and start over on. And that's why you're seeing state legislatures around the country passing resolutions saying, our citizens are going to have a choice on whether they buy health care; they're going to have a choice on the kind of coverage they want to have.

And so this is a fundamental difference in this area of insurance reform that I think we -- we have to -- we have to really begin again and really take into what the American people are saying and expressing this through their elected representatives in the state legislatures.

I know there's a lot of former state legislators here. I'm one as well. And I think that's a very serious point that we need to address.

OBAMA: I'll just touch on your last point, which is the whole issue of pre-existing conditions. Tom Harkin mentioned it, but I -- and I'll be very brief, because I know that we've got to move on to the next topic.

The way I understand Leader Boehner's bill works -- and I think that's the one you're referring to -- the way you deal with a pre- existing condition is to essentially set up a high-risk pool. I mean, that's the mechanism.

So what you're saying is, if you're sick or older or you've got hip replacements or what have you, and you're having trouble buying insurance on the open market, you're going to be able to buy into a high-risk pool.

Now, Tom made the point earlier that -- and this is indisputable. I don't think anybody would disagree with this, that if you set up a high-risk pool in which you don't have healthy people, younger people in the same pool as older, sicker people, the premiums for the older, sicker people, who have been segregated into this pool, is just going to be higher.

Now, I have -- you know, we looked at the Boehner bill to see, sort of, how you approach that, and you have got some reinsurance. And keep in mind, we use a high-risk pool, as well, until we get to the exchange. And we have reinsurance, for example, for federal -- or for people who are on retiree plans who want to help employers maintain those plans.

And they've got an older population, so we want to help reinsure them.

But given the amount of money that you have allocated for that pool, it's just not going to be a very useful tool for the vast majority of people who've got preexisting conditions, just because there's not enough money that you guys put into it to be able to cover all the people with preexisting conditions.

Which is why other states have high-risk pools. Kathleen mentioned -- they're -- I don't how many states, but let's say 20, 21 states currently have high-risk pools. Out of all those 21 states, about 200,000 people use the high-risk pool. And the reason is because by just dealing with older, less healthy individuals separately, or people with preexisting conditions, it is very, very expensive.

Tom's point was if everybody's in it because presumably none of know at any given moment who's going to end up being healthy and who's not. We don't know whether our kids are going to be suffering some sort of disease that we don't anticipate yet. Or, you know, our spouses get ill. That if everybody is in it, then that drives prices down cheaper for everybody.

So it's not that I think that the high-risk pool idea is a bad one. As I said, the House and the Senate bill, the bill -- the proposal that I put forward -- all use the high-risk pool as a stopgap measure to get to a broader pool. But the goal has to be to get everybody in a place where those risks are spread more broadly.

CAMP: And if I just might say, we support high-risk pools and reinsurance with $25 billion in funding. The House and Senate versions are $5 billion in funding. And because of that robust support, CBO says this will work.

The fundamental difference after that is that the health and human services secretary in that four-year period when they're somewhat similar has the authority to raise the premiums, so all that -- all of that is brought to Washington. We -- we leave that authority in the states so that they can manage their state pools.

And then after the bill becomes effective in 2014, the real problem becomes this individual -- the mandate and the cost that the forcing of the purchase of insurance, which many Americans find objectionable. And that, you can avoid that mandate if you continue to design this as we do in the beginning, and both the plans are somewhat similar on that, but it's a very different structure.

OBAMA: What I'd like to do is to move on to the topic which I think underlies -- oh, I'm sorry. We've still got Jay. My apologies. Please go ahead.

BLITZER: All right. We're going to interrupt a little bit, get back to Senator Jay Rockefeller, the Democratic senator from West Virginia, in just a moment.

Our coverage will resume from Blair House, this historic Health Care Summit here in Washington, right after this.


BLITZER: Welcome back to the Health Care Summit. This is a beautiful shot of the White House on this day in Washington. Washington, D.C., basically escaping the snow that's hitting a lot of the Northeast.

That's Blair House, across the street from the White House. Inside, they're continuing their discussions. The president convening a meeting of congressional Republicans and Democrats.

Jay Rockefeller, the senator from West Virginia, making the point for the Democrats right now.

As we listen and monitor what's going on, John King, the American people have some pretty strong views on all of this right now, because they have been hearing it for about 13 months, this debate.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Thirteen months in this administration, and you could argue they've been hearing it dating back to the Clinton administration if they follow politics closely.

And as we watch these disagreements, you hear the Democrats frequently saying we're actually maybe closer than we think, but they can't get over some of the philosophical or legislative hurdles. Let's go through some of the issues, to your point, because we asked the American people what they think on these specific issues in advance of this summit.

Here's one: "Do you favor preventing insurance companies from dropping coverage for people who become seriously ill?" And there is widespread support for this among the public, keeping insurance companies from dropping people. Sixty percent of Democrats, 64 percent of Independents and 60 percent of Republicans favor preventing insurance companies from dropping somebody when they become bill. This has come up a lot today, and you can see that the American people think we should be able to agree on that one.

Here's another issue: "Do you favor preventing the insurance companies from denying coverage for pre-existing conditions?" This one, again, 65 percent of Democrats say insurance companies should not be able to do that, 55 percent of Independents don't want companies to be able to drop you for a pre-existing conditions, and 53 percent of Republicans. So, majority support, a little less than Democrats among Independents and Republicans, but it's still an area where the American people have a consensus. The Congress can't agree on a bill just yet.

Here's another one: "Favor limiting the amount of money awarded in medical malpractice lawsuits." Now, the president has said -- this is a Republican priority, and the president has said, I want to work with you on this one. Not all the Democrats agree.

But among the American people, 57 percent of Democrats, 69 percent of Independents and 72 percent of Republicans say you should limit the amount of money awarded in these medical malpractice suits. Doctors, of course, want that, Wolf. You heard Dr. Barrasso talk about it earlier as one of his priorities.

One last one, and this is an interesting one, because so much of the debate in the past year has focused on this issue. "Do you favor a public health insurance option administered by the federal government?"

Seventy-six percent of Democrats, yes, they want it. That's the pressure on the president. Independents, 49 percent say yes. So they are divided. Twenty-five percent -- only 25 percent of Republicans want that public option.

So those bottom two numbers, that is the big political divide that has complicated the debate. Candidate Obama never spoke the words "public option," but this debate in Washington, for a long time, focused over that one controversial proposal, and it has changed the political environment about this bill.

BLITZER: That's a good point.

And I want to bring in Donna Brazile and Ben Stein.

Donna, the public option, you saw that wide discrepancy between Democrats and Republicans on whether or not the government-run health insurance company, if you will, should be a good idea or a bad idea. But for all practical purposes right now, the public option, as it's called, that's dead, because those who support it simply don't have the votes.

DONNA BRAZILE, CNN CONTRIBUTOR: It is true, Wolf, and it's unfortunate that the public option is off the table. And it was taken off of the table so long ago, especially in the United States Senate.

Look, what John was alluding to, the fact that there is broad agreement on so many of the principles that are currently in the democratic proposal, the proposal the president put forward, as well as the two bills that have passed both chambers.

The question today is whether or not these lawmakers will have the stomach, the guts to vote on this legislation pretty soon so that we can get beyond health care which is a very important issue, and focus on some of the other concerns that's clearly driving voters in the country to be concerned about their own economic security.

BLITZER: But there is a major disagreement we are seeing in the meeting today over at Blair House, Ben Stein, whether or not you should go for a comprehensive agreement doing everything. That's what you just heard Tom Harkin, the democratic senator from Iowa, make the case for a comprehensive global agreement, if you will, to bring everything. As opposed to the republicans who say, you know what, not so fast, step by step. Let's start with some modest things and continue down the road in the years to come. This is a procedural debate, but it comes to the core of the current issues right now.

BEN STEIN, ECONOMIST: You asked one of the most brilliant questions I have ever heard anyone ask on TV, which is why are so many republicans against more government interference in the health care system and so many democrats in favor of it. And I think the answer is a much higher percentage of republicans are taxpayers than democrats, and the republicans are the people paying for it and the democrats are the people receiving it. So that has a lot to explain there.

There are a tremendous number of wealthy democrats just as there are some very wealthy republicans, but as a general matter, republicans as a group pay income tax at a much higher rate than democrats, and I think that has a lot to do with everything. They also have a much higher rate, are paying members of the insurance pools, and they realize that the insurance premiums are going up so that people who would not otherwise be able to get insurance are going to be able to get insurance. But I think it has a lot to do with the fact that republicans are just a different group of people than democrats.

BLITZER: Well, clearly, that is the case.

BRAZILE: That is patently untrue. I don't think that -- this is about --

STEIN: Yes it -- It is not untrue.

BRAZILE: -- it is patently untrue.

STEIN: No, it is not untrue.

BLITZER: Hold on. Hold on.


BLITZER: Donna, specifically, what is untrue, Donna?


BRAZILE: -- well, partisan stuff, let's go after it. The fact that, you know, somehow the republicans, the republicans as individuals registered to a minority party at this time, they are paying more taxes than democrats --

STEIN: No, no. A higher percentage --

BRAZILE: That is not --

STEIN: A higher percentage of them are taxpayers.

BRAZILE: Ben, the question is, is that whether you are a democrat or a republican, if someone today without health insurance goes to the emergency room, we are both paying for it. We are paying for uncompensated care. And what the proposals that the president are trying to address is how you lower costs for people with existing insurance, how do we cover those without insurance, and how do we allow small businesses and others who buy individual health care proposals, how do we ensure that they are paying essentially a very small amount of their income?

So, this is not -- you know, this notion that somehow the republicans is paying for my care. I can tell you without a doubt, I am paying for my own health care. Most democrats and most Americans, we're paying more -- we're paying more and we are getting less, Ben. That is why we are all in this together. This is not no partisan stop.

STEIN: Donna, you are a high-income person so of course, you would pay a lot of tax. But as a general rule, only a small number of people --

BRAZILE: But I am also paying for people without health insurance, Ben, and so are you.

STEIN: I know, but as a general rule --

BRAZILE: And so are you --

STEIN: I know I am.

BRAZILE: -- as a high-income person. And I'm willing to pay taxes to pay for that.

STEIN: Not many people in the country pay income taxes on any meaningful scale anymore and of those people, republicans as a group tend to pay more than democrats. I think that has a lot to do with it.

BRAZILE: I don't know that, Ben. I will check with the IRS. I will check with the IRS. I am sorry, if I am talking over you and not hearing you.


BLITZER: All right, guys, hold on one second. Let David Gergen, let's get back to this issue. Step by step --

BRAZILE: Thank you.

BLITZER: -- relatively modest agreements first, and then you move on to more, more down the road or do you go for the whole nine yards right now?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, let's go step by step to a different place. That was a very, very interesting discussion between Donna and Ben.

But it is a question, that, you know, coming out of this, the White House will have to make a decision whether it wants to go for reconciliation, which is this Plan A, that is what they prefer to do, or whether they should go for a scaled back plan closer to the step by step. And that's going to -- what they wanted out of this was a lot of momentum out of Blair House meetings that would help them do that. And perhaps they'll get that, but I think so far, we have not seen evidence of it.

But my question is to John King. When the President Obama makes that choice, if he chooses reconciliation, will that so poison the well that he will never be able to get a step-by-step backup? Does he have to make a choice now one way or the another, or can he try both in effect?

KING: His decision to hold this summit reflects the White House choice that they were not give up on health care. There were some more outside voices than inside voices saying, you know, Mr. President, focus on jobs, take the defeat on this one, wait until after the election, do jobs, jobs, jobs. So they held this summit, that shows you their investment in the issue.

The calculation now would be, if they do reconciliation, one of the reasons they're trying to push this now is to get it done in late March and in April to give you some time before the election. Because most of the people watching in country don't know what reconciliation mean, they don't know what a cloture vote is. They're not so much worried about the process, they want to know what is this bill, if it finally passes, is going to do me and mean for me. And so the democrats are hoping if they do it now, by the time the election comes around, it'll be OK, if they fail -- GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And if by having -- right.


KING: If they fail, it will be very hard for the White House to then go back to the democrats after you have just asked many of them to cast a tough vote to say, we're going to bring this issue up yet again and we're going to scale back our bill. Liberals will be mad; they'll say, why are you scaling back. And moderates and conservatives in tough districts will be saying, why are you going the make me take another tough vote in an election year when the wind is in my face.

GERGEN: It is all or nothing choice then.

BORGER: Well, I don't think so. I don't think so. I think there are good vote counters up there by the way. You know, Nancy Pelosi and Harry Reid know how to count, and I think before they decide to do anything, they're going to know where the votes are on it.

And so -- and what the democrats are hoping will come out of the summit is a president essentially shifting public opinion to a certain degree -- I don't know that you're going to see that -- but they -- well, they want him to shift public opinion to show I have tried to work with republicans. I have put their stuff in my bill. We are going to vote on their stuff, and if they vote against it, that is their choice.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Politically for the democrats, there is a sort of do no harm position that they want to try to take now. Clearly, they're not going to get what they wanted when they first went into this. Now, they have to get something to make it look good.

But the trick is, if you do it in a certain way that inflames an electorate that already seems like it's moving against you, you could end up with more problems in November than if you had just never even passed a bill.

GERGEN: And no (INAUDIBLE) at all.

JOHNS: Right, exactly.

BORGER: Right, right.

JOHNS: So it is sort of a Catch 22 for them -- they don't want to enflame the electorate, they want to get a bill to keep their base and they want to go into the election no worse for the wear than they are today.

BLITZER: Yes, sort of reminds me of Middle East peace --

(LAUGHTER) BLITZER: -- step by step where you go for the comprehensive agreement, you might go for the comprehensive agreement, wind up with nothing or you go step and step --

BORGER: Is there peace in the Middle East?


BLITZER: Their minds are covered in Middle East peace for a long time. So far they haven't wound up with a lot.

All right, we'll take a quick break. We'll go inside Blair House and resume our coverage right after this.


BLITZER: All right, there is Blair House across the street from the White House. Let's go inside, the discussion continuing, the president having a little exchange with Marcia Blackburn, the republican Congresswoman.

OBAMA: -- not unique to California. It's not as if there are insurance companies that are giving great deals in Iowa, that gentleman farmer who just talked about. These are some structural problems that exist in every state.

It is -- what is true --


OBAMA: No, I want to say this -- hold on a second, guys -- what is absolutely true is that some states probably have higher mandates than others, and so you can probably attribute a certain amount of the cost in a high -- you know, a state that has more requirements for bare minimum coverage, doesn't allow drive-by deliveries or requires mammograms or what have you -- those things all may add some incremental cost, but the truth of the matter is, is that that's not the reason that you're seeing such problems. In a lot of states, the problem is just you don't have competition at all. We want competition. We just want some minimum standards.

All right, Joe, let's talk about cost, because -- and now we're not talking about costs to families, but we're talking about deficit, how (inaudible) respective ideas cost. I think this is a good place to talk about Medicare as well, because it's been brought up several times.

Joe, go ahead.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Mr. President, I'll try to be brief. There's a lot to talk about. I'd like to focus it, though, on the deficit, the impact on the deficit which we're all talking about.

And I must tell you, maybe I've been around too long, but I'm always reluctant after being here 37 years to tell people what the American people think. I think it requires a little bit of humility to be able to know what the American people think. But -- and I don't. I can't -- I can't swear I do.

I know what I think. I think I know what they think, but I'm not sure what they think.

And the second point I'd make is, you know, this probably has an echoed -- and this is slightly off point -- but this debate about the philosophic difference has an echo of the debate that probably took place in the mid-'30s on Social Security. It was mandated, and it was mandated because everybody knew you couldn't get insurance unless everybody was in the pool. And they knew if only some people were in the pool, what would happen is, a lot of people, when they got old, we'd take care of them anyway, and you'd have to pay for them.

So it's kind of a -- it's not the same, I'm not the exact, but it's the same philosophic debate that took place back in, you know, I the '30s.

But, look, I think if I can lay out, Mr. President, what I think we all agree on, and then figure out whether there's a way to deal with the deficit end of this, bending the cost curve, to use a phrase you and many others have used, Mr. President.

First of all, everybody agrees we have the finest docs and the finest hospitals and the finest nurses in the world. And we don't have quite enough of them, but we have the finest.

Everybody also agrees, I got from this morning, but I think we have before, that Senator Coburn is right that we waste a heck of a lot of money, and that somewhere around a third of all of the dollars we spend on Medicare is -- goes for nothing useful.

The third thing it seems we -- I assume we can all agree on is that over the last decade costs have doubled for health care in America. Costs have doubled for government-provided health care, but everybody's health care. And that that meant that, you know, right now, everybody knows that that wrecks budgets. It wrecks state budgets, it wrecks family budgets, it wrecks federal budgets.

Every -- 35 cents of every dollar spent on health care is spent by the federal government or the state governments for Medicare or Medicaid, 35 cents on the dollar. That doesn't count veterans and other things, just those two.

And so -- and what's happened is -- on the dollar -- on every health care dollar. And so we're facing, all of us around this table, Democrat and Republicans are facing the fact that there is $919 billion now we're spending on Medicare and the federal portion of Medicaid, and that if things -- I don't see any firewall that's going to keep costs from doubling again, we're going to be talking about in the year, you know, 2019, we're going to be spending $1.7 billion -- excuse me, $1.7 trillion, if we don't do something to bend that curve.

So I -- and the -- and the fourth point I think we can agree on is that whether you agree how it is arrived at, CBO has gone out and scored the various plans as to whether or not they bend the cost curve, and everybody's acted in good faith. John's (ph) plan, they've gone out, and points out over 20 years, it will -- it will -- and I don't know if that's the Republican plan or John (ph), I don't think there is any one plan that is out there, but John's (ph) plan cuts those costs by $300 billion over 20 years, according to CBO. The Senate plan cuts it by over $1 trillion over 20 years, $100 billion over 10.

Again, we can argue on the margins, but the fact is it's not just CBO that said this, you had the Business Roundtable (inaudible) study that shows that the Senate plan slows growth by 15 to 20 percent, and that business costs per employee by the year 2019 would be $3,000 less per employee.

Again, it may be wrong, may be wrong the exact amount. It may be $3,800, it may be $2,200, but it cuts cost.

And so it seems to me that there is -- and I might add that in the process here, it wasn't part of the -- specifically part of the long-term debt debate, but, you know, as has been pointed out here, we're not cutting Medicare benefits in this. We're trying to eliminate the third of the problem that's a waste.

And as Senator Enzi, who I have an inordinate amount of respect for, points out, he said it'd be nice if we put some of these savings back into Medicare.

Well, the fact is we do. We close the prescription drug donut hole, we provide for preventative care for seniors, which they don't have now without a co-pay, and we also, it's -- everyone, I think most every major study agrees that it's going to extend the life of Medicare trust fund and it changes the -- these changes, the actuarial group pointed out, would save about $200 on a premium per Medicare recipient out there that people are paying.

So, look -- and the source of how we do this is getting rid of waste, making sure that we don't overpay insurance companies for Medicare Advantage.

I want to remind everybody about Medicare Advantage, because some of us around here, probably all of us around this table were here when it got put in. What was the rationale for Medicare Advantage? The rationale for Medicare Advantage a decade ago was that private insurers could provide insurance, better insurance, cheaper than the government can do it. They can do it better.

And we said, the reason why we're going to pay them more than what they're going to give at the front end is to incentivize them to get in the business of doing it. And so, we paid them $1.15 for every dollar's worth, what we could have bought for a $1. We did it -- and it was a rational thing to try -- we did that because we wanted them to get engaged in the business we thought government didn't do as well as the private sector did.

Well, here we are, we're overpaying insurance companies about 15 cents on the buck that -- what we could buy for $1, and we call for eliminating that.

And so the other point I'd make, Mr. President, is that we're in a situation here where at the end of the day nobody in this room -- I don't think anybody in this room is going to say, "You know something, we are really going to be reforming the health care system without affecting the effect on the long-term deficit." Unless we bend that cost curve, we're in trouble.

And, Mr. President, we can argue, which we will, about whether or not the way you and I want to go after dealing with the long-term debt, whether commissions make sense, whether or not we're ever going to deal with entitlement, this is a big entitlement. It's a big entitlement, Medicare. It exists. We got to figure out how to keep it from bankrupting the country without denying seniors what they're entitled to in a nation like ours, decent health care that provides for their needs.

So I'd like to ask, Mr. President -- and I'm going to hush -- I'd like us to talk about, if we can, specifically, what we all agree on, what do we do about bending the cost curve?

What's the best way to do it?

And I yield the floor, as I used to say as a senator.

REP. JOHN A. BOEHNER (R-OH), HOUSE MINORITY LEADER: Mr. President -- Mr. President, Mr. Ryan is going to open this conversation on behalf of us.


Look, we agree on the problem here. And the problem is health inflation is driving us off of a fiscal cliff.

Mr. President, you said health care reform is budget reform. You're right. We agree with that. Medicare, right now, has a $38 trillion unfunded liability. That's $38 trillion in empty promises to my parents' generation, our generation, our kids' generation. Medicaid's growing at 21 percent each year. It's suffocating states' budgets. It's adding trillions in obligations that we have no means to pay for it.

Now, you're right to frame the debate on cost and health inflation. And in September, when you spoke to us in the well of the House, you basically said -- and I totally agree with this -- I will not sign a plan that adds one dime to our deficits either now or in the future.

Since the Congressional Budget Office can't score your bill, because it doesn't have sufficient detail, but it tracks very similar to the Senate bill, I want to unpack the Senate score a little bit.

And if you take a look at the CBO analysis, analysis from your chief actuary, I think it's very revealing. This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health care entitlement at a time when we have no idea how to pay for the entitlements we already have.

Now, let me go through why I say that. The majority leader said the bill scores as reducing the deficit $131 billion over the next 10 years. First, a little bit about CBO. I work with them every single day -- very good people, great professionals. They do their jobs well. But their job is to score what is placed in front of them.

And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors. Now, what do I mean when I say that?

Well, first off, the bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.

Now, what's the true 10-year cost of this bill in 10 years? That's $2.3 trillion.

It does couple of other things. It takes $52 billion in higher Social Security tax revenues and counts them as offsets. But that's really reserved for Social Security. So either we're double-counting them or we don't intend on paying those Social Security benefits.

It takes $72 billion and claims money from the CLASS Act. That's the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets.

The Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.

Now, when you take a look at the Medicare cuts, what this bill essentially does -- it treats Medicare like a piggy bank. It raids a half a trillion dollars out of Medicare, not to shore up Medicare solvency, but to spend on this new government program.

Now, when you take a look at what this does, is, according to the chief actuary of Medicare, he's saying as much as 20 percent of Medicare's providers will either go out of business or will have to stop seeing Medicare beneficiaries. Millions of seniors who are on -- who have chosen Medicare Advantage will lose the coverage that they now enjoy.

You can't say that you're using this money to either extend Medicare solvency and also offset the cost of this new program. That's double counting.

And so when you take a look at all of this; when you strip out the double-counting and what I would call these gimmicks, the full 10- year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.

And I think, probably, the most cynical gimmick in this bill is something that we all probably agree on. We don't think we should cut doctors 21 percent next year. We've stopped those cuts from occurring every year for the last seven years. We all call this, here in Washington, the doc fix. Well, the doc fix, according to your numbers, costs $371 billion. It was in the first iteration of all of these bills, but because it was a big price tag and it made the score look bad, made it look like a deficit, that bill was -- that provision was taken out, and it's been going on in stand-alone legislation.

But ignoring these costs does not remove them from the backs of taxpayers. Hiding spending does not reduce spending. And so when you take a look at all of this, it just doesn't add up.

And so let's just -- I'll finish with the cost curve. Are we bending the cost curve down or are we bending the cost curve up?

Well, if you look at your own chief actuary at Medicare, we're bending it up. He's claiming that we're going up $222 billion, adding more to the unsustainable fiscal situation we have.

And so, when you take a look at this, it's really deeper than the deficits or the budget gimmicks or the actuarial analysis. There really is a difference between us.

And we've been talking about how much we agree on different issues, but there really is a difference between us. And it's basically this. We don't think the government should be in control of all of this. We want people to be in control. And that, at the end of the day, is the big difference.

Now, we've offered lots of ideas all last year, all this year. Because we agree the status quo is unsustainable. It's got to get fixed. It's bankrupting families. It's bankrupting our government. It's hurting families with pre-existing conditions. We all want to fix this.

But we don't think that this is the answer to the solution. And all of the analysis we get proves that point.

Now, I'll just simply say this. And I respectfully disagree with the vice president about what the American people are or are not saying or whether we're qualified to speak on their behalf. So --


-- we are all representatives of the American people. We all do town hall meetings. We all talk to our constituents. And I've got to tell you, the American people are engaged. And if you think they want a government takeover of health care, I would respectfully submit you're not listening to them.

So what we simply want to do is start over, work on a clean- sheeted paper, move through these issues, step by step, and fix them, and bring down health care costs and not raise them. And that's basically the point.

OBAMA: I'm going to call on Xavier Becerra, but I just want to follow up on a couple points. There are some strong disagreements on the numbers here, Paul, and, you know, but I don't want to get too bogged down in --

BLITZER: All right, we're going to monitor what the president is saying, we're going to make sure we hear every word.

Stand by for a moment, we're up against a time break. Let's take a quick break and resume the coverage right after this.