Transcript: Sebelius, Pawlenty

PAWLENTY: Well, George, in the legal sense, I think the courts have addressed these Tenth Amendment issues, but more in the political sense, in the common sense arena, we need to have a clear understanding of what the federal government does well and what should be reserved to the states.

We have essentially Obamacare that's been deployed in two states in major ways. One is in Tennessee. We have a Democratic governor, Phil Bredesen, said hey, look, we tried this cost savings as a way to fund a major overhaul of health care; it didn't work. He's in the news this morning saying, you know, don't go down that path.

We have another state, Massachusetts, who tried essentially the same thing. They have the most expensive health care in the country. They have increasing waiting lines, and it's not working.

STEPHANOPOULOS: So just to be clear, are you suggesting that any parts of the plan as the president has laid it out are unconstitutional?

PAWLENTY: Well, I wouldn't go so far as to say it's a legal issue. I was raising it as much as a practical matter, that there are some things that the federal government shouldn't do, doesn't do well, and should leave to the states.

STEPHANOPOULOS: Secretary Sebelius, what about that? The governor says there's two places that a form of what the president is calling for has been tried, Tennessee and Massachusetts. He says they haven't worked.

SEBELIUS: Well, I think that -- first, good morning, Governor Pawlenty and senators. I -- Tim and I were elected in 2002 and reelected in 2006, and I haven't seen him in a while.

As he well knows, the Tennessee experiment is really different from anything that's been talked about here. It's something that really was an attempt to make a vastly over-expensive Medicaid system work. It did crash and burn. It's different than any place in the country, I would suggest, that has done a much better job at expanding care and holding their costs.

In Massachusetts, they readily admit that they expanded care and didn't look at the cost side of the puzzle, which is why I think the president continues to suggest that anything we do, it has to bend the cost curve. And as he said to Congress the other day, even if you bring down the rising health care costs .1 of a percent, you save $4 trillion over the first 10 years of the plan. So bending the cost curve has always been part of what Congress is talking about, and it's impossible to do a state at a time. We need a national strategy.

STEPHANOPOULOS: And I want to get to that in a second. But first, let me bring in the two senators on the issue that has divided Democrats so far, this whole issue of the public health insurance option.

Now, Senator Rockefeller, I know you have said that this is a critical component of the health care plan. You heard the president on Wednesday night. He says he supports it, but you can't sacrifice the entire bill for the sake of this public option. Can you vote for a bill without a robust public health option?

ROCKEFELLER: If there were a good alternative, I would certainly have to look at it.

STEPHANOPOULOS: What's a good alternative?

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