Transcript: Sens. Durbin and Kyl

July 12, 2009 — -- GEORGE STEPHANOPOULOS, HOST: Good morning, and welcome to "THISWEEK."

(BEGIN VIDEOTAPE)

STEPHANOPOULOS (voice-over): Welcomes abroad. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have the bloodof Africa within me.

STEPHANOPOULOS: Warnings at home.

REP. MARIO DIAZ-BALART (R), FLORIDA: There is a new definitionfor "dismal failure": stimulus -- this stimulus.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: What would theydo? What would they do?

STEPHANOPOULOS: The stimulus takes shots. Health care stalls.Is it time for President Obama to hit the reset button with Congressor should he stay the course? Questions this morning for ourheadliners, the Senate whips: Democrat Dick Durbin and Republican JonKyl, our "THIS WEEK" debate.

Then...

KATIE COURIC, CBC ANCHOR: The King of Pop...

BRIAN WILLIAMS, NBC ANCHOR: Michael Jackson...

CHARLES GIBSON, ABC ANCHOR: Michael Jackson...

UNIDENTIFIED MALE: Michael Jackson...

COURIC: Michael Jackson...

STEPHANOPOULOS: Michael Jackson mania. Did the media go toofar? That and all of the week's politics on a special expanded"Roundtable" with George Will, Donna Brazile, Cokie Roberts, SamDonaldson, and Bob Woodward of The Washington Post.

And as always, "The Sunday Funnies."

CONAN O'BRIEN, HOST, "THE TONIGHT SHOW": A lot of us are stillmourning the loss of one of America's most entertaining figures wholeft us all too soon, but don't worry, folks, Sarah Palin will beback.

(LAUGHTER)

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

(END VIDEOTAPE)

STEPHANOPOULOS: Hello, again. It was another whirlwind weekabroad for the president and the whole Obama family, touched down inWashington early this morning for what may be the most momentous monthof the year on Capitol Hill.

Confirmation hearings for Judge Sotomayor begin tomorrow. Butthe House and Senate are trying to pass health care by August, but theodds against that going up. And despite calls from some to scale backhis agenda, President Obama doubled down this morning, writing in TheWashington Post that now is not the time to defer hard decisions.

Here to debate all that is coming up, the two Senate leaders incharge of counting the votes: Democrat Dick Durbin, and Republican JonKyl. Welcome both back to "THIS WEEK."

And, Senator Durbin, let me begin with you on the issue thatprobably most directly affects most Americans, that's health care.Your counterparts, the House Democrats, are carrying forward a pieceof legislation that includes a $550 billion tax increase, with asurtax of about 1 percent that starts for individuals earning about$250,000 a year, climbing to 3 percent for individuals earnings amillion dollars a year or more.

Can Senate Democrats sign on to that?

SEN. RICHARD DURBIN (D-IL), WHIP: I think we're going to have adifferent approach. We understand that we have to combine cuts inactual spending on health care, savings from hospitals, from doctors,from health insurance companies, along with some new revenue.

Now this new revenue is not just to cover those who are uninsuredtoday, but to make sure that insurance is affordable for people...

(CROSSTALK)

STEPHANOPOULOS: New revenue but not a surtax on millions -- onpeople earning over $250,000 a year?

DURBIN: The Senate Finance Committee is considering a lot ofdifferent options. I don't want to preclude or select any option atthis point. But I think what we need to do is to make sure that atthe end of the day, we have real health care reform.

The American people are committed to change, George. There isresistance, of course, among some Republicans in the Senate. But thishas been a good week. A number of Republican senators came forward,met with Senator Harry Reid, continued to meet with Senator Baucus.

I think we're starting the kind of bipartisan dialogue that'sgoing to work.

STEPHANOPOULOS: I want to ask Senator Kyl about that bipartisandialogue. But first, on this tax increase.

SEN. JON KYL (R-AZ), WHIP: No.

(LAUGHTER)

STEPHANOPOULOS: Absolutely not.

KYL: No. Here is the problem. We're in a recession. We knowthat between 75 and 80 percent of the jobs created in the country arecreated by small business. At least 55 percent of the income thatwould be generated by this surtax directly hits the entrepreneurs whorun these small businesses.

It would be a job killer. It would be exactly the wrong thing todo any time, but especially when we're in the middle of a recession.

STEPHANOPOULOS: How about these bipartisan negotiations?Senator Charles Grassley, your ranking member on the FinanceCommittee, which you are also a member of, has been negotiating withSenator Baucus and others. He met with Harry Reid, as Senator Durbinjust said.

But I have been told that you've had some very toughconversations with Senator Grassley and that you've warned him againstgiving away too much to the Democrats. Is that true?

KYL: Well, no. I haven't warned him about anything. But it istrue that we've had a lot of discussions internally in our RepublicanConference, and that senators Hatch and Grassley and Enzi and OlympiaSnowe, who did meet with that bipartisan group, I think sent a verystrong message.

No on these taxes. No on the kind of mandates that the Democratsare talking about, including a government-run insurance company. Sowhile Republicans all...

(CROSSTALK)

KYL: George, can I just make one quick point? Republicans arevery committed to reform. But we do not like the ideas of spendingand taxing and creation of more deficit in order to achieve theseresults.

STEPHANOPOULOS: No. But Senator Grassley has talked about othertax increases, not taxing the -- taking away the exclusion for healthinsurance plans right now. He has also talked about a publicinsurance plan based on the idea of cooperatives.

On those issues, does he speak for the Republican Conference?

KYL: No. And I certainly disagree with any kind of government-run plan. I don't think it's fair to say that Senator Grassley hassupported any of these tax proposals. He has been very wary of thetax proposals.

Think about this, if you have a catastrophic health event in yourlife, you can take -- if it represents more than 7.5 percent of yourgross adjusted income, for income tax purposes, you can take adeduction on that.

They're asking to raise this up to 10 percent. Most of thepeople hit by that are seniors and 55 percent of them are making under$50,000 a year. These are bad tax policies.

STEPHANOPOULOS: So, Senator Durbin, you heard Senator Kyl rightthere. He says that no public health insurance plan, I hear a no onany kind of revenue enhancement. So is a bipartisan deal reallypossible? And how necessary is it? DURBIN: Senator Kyl is not ready for change and I guess that'shis position. But most Americans are ready for change. They want tokeep the health insurance that they have, if it's good policy. Butthey want us to fix the things that are broken in this system.

When Senator Kyl says he is opposed to any kind of government-runhealth insurance, is he opposed to Medicare? That covers 45 millionAmericans today, another 60 million covered by a government plancalled Medicaid.

I mean, the fact is overwhelmingly, three out of four Americanssay we should have a choice as Americans of a government-run insuranceplan. It's a choice we can make voluntarily. It brings competitionin the system.

The resistance to this idea comes from the health insurancecompanies. Those private companies that are making a fortune inprofits today, denying coverage to individuals, fighting with ourdoctors about the cure that we receive.

There should be competition...

STEPHANOPOULOS: But, Senator...

DURBIN: We should keep them honest.

STEPHANOPOULOS: ... the talks did at first bog down this weekand then seem to pick up again towards the end of the week. Is itstill possible for the Senate to pass a bill by the president'sdeadline of the August recess?

DURBIN: Yes, it is. And I'm glad that President Obama wentoverseas for critically important meetings with world leaders. NowI'm glad that he's home. He's going to be rolling up his sleeves.We've already been in communication with the White House.

He wants to get this job done. And that means the Senate shouldmove in an expeditious way to finish our committee hearings, bringthis bill to the floor before the August recess.

STEPHANOPOULOS: I'm going to ask Senator Kyl that question aswell. But let me broaden it out as well, because there has been a lotof talk this week also about the stimulus and whether or not it hasreally helped the economy.

You told -- you put out a statement earlier this week, you saidthat the stimulus ought to be canceled. But your own governor,Republican governor of Arizona, has talked about the successes of thestimulus in the state of Arizona, pointing to 24 highway projectscreating 6,000 jobs, a weatherization program creating 1,500 jobs, aseries of programs for child care and education that have all helpedthe state of Arizona.

So why do you want to cancel a program that your own Republicangovernor said has helped your state? KYL: Well, I don't want to leave that health issue without,first of all, reiterating the fact that Republicans very much wantreform, but not on the backs of the American people with the kind oftaxes and potential rationing of care...

STEPHANOPOULOS: Done by August?

KYL: ... that would result. There is no chance that it's goingto be done by August. President Obama was right about one thing. Hesaid if it's not done quickly, it won't be done at all. Why did hesay that? Because the longer it hangs out there, the more theAmerican people are skeptical, anxious, and even in opposition to it.

STEPHANOPOULOS: And that ties into the complaints you've madeabout the stimulus.

KYL: That then -- yes.

STEPHANOPOULOS: And that brings us right back to that.

KYL: Yes. And with respect to the stimulus, I think it's nowacknowledged, it hasn't done what it set out to do.

STEPHANOPOULOS: But your government says it has in Arizona.

KYL: No. What our -- look, all governors like "free money"coming to the state. My governor is no different. But the reality isthat it has added to our deficit. We're now going to have a $1.8trillion deficit this year.

It promised to create 4 -- or save 4 million jobs. We've nowlost another 2 million jobs. Unemployment is 2 points higher than itwas when the president took office. And even with the stimulus, it'shigher than they said that it would be without the stimulus.

The reality is it hasn't helped yet. Only about 6.8 percent ofthe money has actually been spent. What I proposed is, after youcomplete the contracts that are already committed, the things that arein the pipeline, stop it.

You can spend about half of the money on the stimulus and thelast half would be spent during the eight -- last eight years of a 10-year period. Why spend that money when it could be put to better useon other things like health care, for example?

And we're digging this deficit hole even deeper than we havetoday.

STEPHANOPOULOS: What's the answer, Senator Durbin?

DURBIN: Well, the answer is this, it's a two-year plan and we'refour months into it. The Republicans resisted President Obama'sefforts to put together the stimulus package. And at the time that hemade the proposal, our economy was in freefall.

We were facing a worldwide recession. It's true that we're notout of the woods yet. We still have a long way to go. But we havestarted to stabilize our economy and the world economy. And that's amove in the right direction.

What Senator Kyl fails to acknowledge is that we have actuallywritten checks so far for $56 billion out of $787 billion. We aregoing to see the impact of the stimulus package start to grow.

STEPHANOPOULOS: But Senator...

(CROSSTALK)

DURBIN: Well, first let me tell you, George. First it means taxbreaks for working families. Does Senator Kyl oppose that? Would hecancel those?

Secondly, it means transportation projects across America, inArizona, in Illinois, and other states, not only creating good-payingjobs but building America's infrastructure for the future.

Does Senator Kyl oppose that?

I think these are good investments in America's future. Let'sgive it time to work.

STEPHANOPOULOS: I think you (inaudible) answer, but let me justfollow up, one more question on this. With the jobs situation and thewhole economy being so much worse than everyone expected, severalmonths ago, why not focus on that right now?

Several people have said that President Obama should scale backhis agenda, right now, and put all of his focus on the economy.

DURBIN: George, because that president understands that, if wewant to build this economy for the future, it isn't just a matter ofsaving and creating jobs today; it's doing the fundamentals to makesure the American economy is strong at the end of this recession.It's taking care of a health care system.

Senator Kyl said that the idea of health care reform is a job-killer. Let me tell you, health insurance premiums today are job-killers. The cost of health insurance, I'm sure, in Arizona; I canguarantee you, in Illinois, is going up three times faster than theincrease in wages. We just can't sustain that.