Transcript: Alan Greenspan

STEPHANOPOULOS: How about on health care? We see the Senate Finance Committee about to pass, we think, their health care reform. And there is a big debate, it has now become a partisan debate of whether or not this is going to help or hurt the economy, help or hurt the deficit, help or hurt on job creation. From what you see the Senate doing right now, what's your view?

GREENSPAN: Well, I've always had the view that the real problem that we have existed before these reform proposals came in. In other words, we have a huge fiscal hole out there which is best measured by the fact that Medicare benefits are only 50 percent funded going all the way out. And what that implies is a very significant issuance of Treasury securities to meet the ever-growing and very indeterminately large federal deficit. You cannot continue to increase the federal debt. Of course, remember, over the generations, we have been very careful to keep the total level of debt well below the borrowing capacity of our economy so far as federal issuance is concerned. That cushion is now being tested. And I'm getting a little concerned and I don't want to find out where the upper levels are.

And the reason it's important is it will affect long-term interest rates. And long-term interest rates are very critical.

STEPHANOPOULOS: But are these proposals going to make that problem -- are they going to help it or hurt it?

GREENSPAN: Well, it depends on what the CBO writes on the Senate Finance Committee bill. We don't know what those numbers are going to look like yet. But I would say revenue neutral is not adequate. In other words, we have to not only have a revenue neutral reform program, but simultaneously recognize that we have to address the longer term. STEPHANOPOULOS: Mr. Greenspan, thanks very much. GREENSPAN: My pleasure.

STEPHANOPOULOS: We're going to go straight to our debate as the senators take their seats. Take a look at a long week on health care from the Senate Finance Committee.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The insurance companies, in my judgment, are determined to protect their profits. The government is not a fair competitor. It's not even a competitor.

UNIDENTIFIED MALE: So you don't want Medicare?

UNIDENTIFIED MALE: It's a predator.

UNIDENTIFIED MALE: We have to settle down and find ways of living within the promises that have been made.

UNIDENTIFIED MALE: No one has been able to show me how they can count up to 60 votes with the public option in the bill.

UNIDENTIFIED MALE: Aye.

UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: Aye. UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: I'm looking around, and there's some pretty tired senators here.

(END VIDEO CLIP)

STEPHANOPOULOS: The final vote was supposed to be on Tuesday, and we had deliberations all week long in Washington. We'll bring you two of the senators who were there: Democrat Chuck Schumer of New York, John Cornyn, Republican of Texas. I want to get to health care, but let's begin with the economy. You heard Chairman Greenspan there: no long-term stimulus, but he thinks that unemployment benefits have to be extended. The House's passed a bill. Will the Senate act this week?

SCHUMER: Yes. We're going to pass a bill this week, put it on the floor. I believe it will pass. It will extend unemployment benefits for four weeks for all states and another 12 or 13 weeks for all states above 8 percent...

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