Transcript: HHS Secretary Kathleen Sebelius and Mitt Romney

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.


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.


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?

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