Transcript: HHS Secretary Kathleen Sebelius and Mitt Romney

June 14, 2009 — -- STEPHANOPOULOS: Good morning and welcome to this week.

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PRESIDENT BARACK OBAMA: We have finally decided to fix what's broken about health care in America.

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STEPHANOPOULOS: Health care heats up.

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SEN. JON KYL, R-ARIZ.: We are opposed to a government plan, and the sooner it's off the table, the better.

(UNKNOWN): Those are two words we hear a lot today -- Washington takeover.

OBAMA: For those who criticize our efforts, I ask them, what's the alternative?

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STEPHANOPOULOS: As President Obama begins his campaign, what are his bottom lines? We'll ask the Cabinet member in charge, Health and Human Services Secretary Kathleen Sebelius.

Plus, who leads the GOP?

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ROMNEY: We're here to get ready for the battles we're going to win.

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STEPHANOPOULOS: An exclusive interview with once, perhaps future candidate Mitt Romney.

And what do Iran's controversial elections mean for us? That and all the week's politics on our roundtable, with George Will, Donna Brazile, Ron Brownstein from the National Journal, and the Wall Street Journal's Kim Strassel.

And as always, the Sunday Funnies.

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STEPHEN COLBERT: Saddam had fantastic taste. There was so much marble and gold paint, I thought I was watching "The Real Housewives of New Jersey."

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STEPHANOPOULOS: Hello again. It makes up almost 20 percent of the economy, impacts every single American, and fixing health care is President Obama's top domestic priority. Congress could have its first votes on reform this week, and the president kicked off his lobbying effort on radio and YouTube yesterday, promising that every dime of his plan will be paid for.

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OBAMA: Real reform will mean reductions in our long-term budget, and I've made a firm commitment that health care reform will not add to the federal deficit over the next decade.

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STEPHANOPOULOS: And for more, I now welcome the secretary of health and human services, Kathleen Sebelius. Good morning.

SEBELIUS: Good morning.

STEPHANOPOULOS: Let's begin with the bottom lines of the president. So far, he's been making the broad case for health care reform. Says it's up to Congress to fill in the details, but he just said he has a firm commitment not to increase the deficit. Does that mean that the president will veto any legislation that is not fully paid for?

SEBELIUS: I think, George, he is very serious about having health reform this year and having it paid for. And what is going on right now is exactly what needs to happen. Congress is fully engaged in, figuring out the details of this proposal, working closely with the president, and he's already put on the table, the president has put on the table about $900 billion. Some of that saving from existing programs that we've used to drive quality and expand coverage, and other from a proposal that we alter the minimum tax, that we go back to the deductions of the Ronald Reagan era for the richest Americans, minimize the itemized deductions, and come up with about $300 billion. So he's very...

STEPHANOPOULOS: But the Congress has rejected -- hasn't acted on these parts...

SEBELIUS: Well, they haven't -- they haven't even started to really discuss how they want to pay.

STEPHANOPOULOS: Well, they made it pretty clear what they think about that tax proposal, and some say that the savings the president outlined will be very difficult to realize as well. So I'm just trying to get a sense. You say he's very serious. If every diem of this is not paid for, will the president say, no, that's not good enough, Congress, and send it back?

SEBELIUS: Well, I think absolutely, he wants a bill that's paid for, not to increase the deficit at a time when we are looking at looming deficits. The problem is, though, we can't sustain the current system. This is not just paying for the future. It's also the fact that doing nothing has a huge cost. It's crushing businesses, it's crushing families. Our workers are less competitive. We can't sustain the system that we have right now, so the status quo is not an acceptable alternative, and Congress knows that. The providers know it, the hospitals know it. That's why people are at the table, working this year on health reform.

STEPHANOPOULOS: And if it's not paid for, he'll send it back?

SEBELIUS: I don't know the detail, but I think what he wants is for Congress to pay for it.

STEPHANOPOULOS: He wants Congress to pay for it, but you're not willing to say right now -- you're not willing to make a veto threat right now?

SEBELIUS: I don't think veto threats at any point are particularly helpful. What's better is to come to the table and get something done.

STEPHANOPOULOS: How about on the question of taxes? You mentioned the president's proposal to change those deductions for wealthier Americans. During the campaign, he was very critical of the idea of taxing health care benefits, for those who have them right now, and you were quite critical when you talked to the Congress last month.

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SEBELIUS: Eliminating the tax write-off, which was a component of encouraging employees to offer coverage in the first place, has a huge potential of destabilizing the private market and leaving more Americans uninsured.

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STEPHANOPOULOS: But Senator Max Baucus, the chairman of the Senate Finance Committee, came out of a meeting with the president last week and said the president is willing to consider this idea. Is that true?

SEBELIUS: I wasn't in the meeting with Senator Baucus, but I've talked to the president a number of times, and he feels strongly that 180 million Americans have employer-provided health care, that taxing those benefits may indeed discourage employers from offering health care to their employees, exactly the opposite of what we want to do in the future.

And it would mean, for many Americans, that they wouldn't keep the health plan that they have and they like, the doctors that they have and they like.

What we want to do is fix what's broken. And currently, employer-based health coverage is working pretty well for millions of Americans. So anything we do in the future needs to build on that system that provides benefits.

STEPHANOPOULOS: But there seems to be an emerging consensus, especially in the Senate -- Senator Baucus, Senator Grassley, a Republican, and others -- Congressman -- I mean Senator Wyden and Senator Bennett, and they seem to think this is the way to get a lot of the savings.

So, again, is the president saying he doesn't want it but he might accept it or there's no way he's going to accept it?

SEBELIUS: Well, again, I wasn't in the specific conversations. I think what's happening now is exactly what needs to happen, as they engage in writing the bill that will mean health reform this year, and that's putting some details together. And that dialogue will go on, about how to pay for it.