Transcript: President Barack Obama

Transcript with President Barack Obama

ByABC News
July 12, 2009, 6:04 AM


GEORGE STEPHANOPOULOS, HOST: Mr. President, thank you very much.


STEPHANOPOULOS: Probably the most definitive promise you made in the campaign is that no one in the middle class would get a tax increase on your watch.

OBAMA: Right.

STEPHANOPOULOS: Yet this week, Senator Rockefeller and several other Democrats say that this bill by Senator Baucus is a big middle class tax increase.

Do you agree and does that mean you can't sign it?

OBAMA: Well, I don't agree. I think that what they were referring to – and I haven't looked at the quotes. But I think that they were concerned about whether or not this was actually affordable. If you're saying to people, you've got to get health insurance but they can't actually afford it and they have to pay a penalty if they don't get it, then that's a pretty big burden on middle class families. That's a concern I share -- making sure that this is affordable.

But the first thing we've got to understand is you've got what is effectively a tax increase taking place on American families right now. The Kaiser Family Foundation report just came out last week. Health care premiums went up 5.5 percent last year, at a time when the rest of the economy, inflation was actually negative. So that is a huge bite out of people's pockets.

And part of what I've been trying to say throughout this campaign – this effort to get health care done -- is that if we don't do anything, guaranteed, Americans' costs are going to go up, more people are going to lose health care coverage, the insurance companies are going to continue to prevent people from getting it for pre-existing conditions. Those are all burdens on people who have health insurance right now. And...

STEPHANOPOULOS: That is true, but...

OBAMA: And so -- and so -- just -- just to close the loop on this, the principles I've put forward very clearly, when I spoke to the joint session of Congress, is that we're going to make sure that, number one, if you don't have health insurance, you're going to be able to get affordable health insurance.

Number two, if you have health insurance, we're going to have insurance reforms that give you more security -- you know what you're going to get. You know that if you're paying your premiums, you're actually going to have coverage when you get sick.

Number three, it's going to be deficit neutral -- it's not going to add a dime to the deficit, now or in the future.

Number four, it's going to start driving down our costs over the long-term.

Now, 80 percent of what I'd like to see is actually already in all the various bills that are in Congress. That last 20 percent is tough because we've got to figure out -- making sure that we're paying for it properly, making sure that it really is relief to families who don't have health insurance, making sure that all the various details that are out there line up. And that's going to take some time.

But I think that the effort by the Senate Finance Committee is a serious, strong effort to move an agenda forward. We've seen some positive signs from people who might have been otherwise a little bit shaky on health care, including Republican Olympia Snowe, I think, had some nice things to…

STEPHANOPOULOS: Hasn't signed on yet, though.

OBAMA: Hasn't signed on, but has said that this is a legitimate effort to try to solve the problem. What I want to see is that we just keep on working on it over the next several weeks.

STEPHANOPOULOS: How about a matter of first principles, though. You mentioned these premium increases.


STEPHANOPOULOS: But they're not happening as a result of a decision by the government.

OBAMA: Right.

STEPHANOPOULOS: You were against the individual mandate...


STEPHANOPOULOS: ...during the campaign. Under this mandate, the government is forcing people to spend money, fining you if you don't

How is that not a tax?

OBAMA: Well, hold on a second, George. Here -- here's what's happening. You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care. Now what I've said is that if you can't afford health insurance, you certainly shouldn't be punished for that. That's just piling on.

If, on the other hand, we're giving tax credits, we've set up an exchange, you are now part of a big pool, we've driven down the costs, we've done everything we can and you actually can afford health insurance, but you've just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that's...

STEPHANOPOULOS: That may be, but it's still a tax increase.

OBAMA: No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.

People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs.

STEPHANOPOULOS: But it may be fair, it may be good public policy...

OBAMA: No, but -- but, George, you -- you can't just make up that language and decide that that's called a tax increase. Any...


OBAMA: What -- what -- if I -- if I say that right now your premiums are going to be going up by 5 or 8 or 10 percent next year and you say well, that's not a tax increase; but, on the other hand, if I say that I don't want to have to pay for you not carrying coverage even after I give you tax credits that make it affordable, then...

STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that.

Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it's a tax increase?

OBAMA: I absolutely reject that notion.

STEPHANOPOULOS: Let's go to Medicare then...

OBAMA: Good.

STEPHANOPOULOS: ...because you also said that no one will lose what they have. And Senator Bill Nelson, a Democrat, says that the cuts you're looking at in Medi -- the Medicare Advantage program...

OBAMA: Right.

STEPHANOPOULOS: ...are going to force people to lose coverage they now have.

OBAMA: No. Here -- here's what's going to happen. These are essentially private HMOs who are getting, on average -- and this is not my estimate, this is Democrats and Republicans, experts have said -- they're getting, on average, about 14 percent more over payments, basically subsidies from taxpayers for a program that ordinary Medicare does just as good, if not better, at keeping people healthy.

Now, they package these things in ways that, in some cases, may make it more convenient for some consumers, but they're overcharging massively for it. There's no competitive bidding under the process.

And so what we've said is instead of spending $17 billion, $18 billion a year, $177 billion over 10 years on that, why wouldn't we use that to close the donut hole so the people are actually getting better prescription drugs…

STEPHANOPOULOS: But Senator Nelson says it's going to…

OBAMA: …Why don't we make sure that we're using some of that money to actually make people healthier?

STEPHANOPOULOS: But he said it's going to cause beneficiaries right now to lose what they have.

OBAMA: Look, I understand that change is hard. If what you're saying is that people who are currently signed up for Medicare advantage are going to have Medicare and the same level of benefits, but they may not be having their insurer get a 14 percent premium, that's absolutely true and will the insurers squawk? You bet.

STEPHANOPOULOS: They may drop the coverage.

OBAMA: No, these folks are going to be able to get Medicare that is just as good, provides the same benefits, but we're not subsidizing them for $18 billion a year.

STEPHANOPOULOS: So Senator Nelson, he wants to pass an amendment that shields anyone currently on Medicare advantage from any cuts. Do you support that?

OBAMA: George, I'm not going to be negotiating a particular provision of the bill, sitting (ph) down with you here right now. What I am going to say is this: the basic principle that is indisputable is that we are wasting hundreds of billions of dollars in Medicare that is not making people healthier. I want to make sure that we're using that money to actually make people healthier.

STEPHANOPOULOS: But if people lose their Medicare advantage?

OBAMA: What I have said is we're not going to take a dollar out of the Medicare trust fund. We're going to make sure that benefits are just as strong if not stronger. We're not going to subsidize insurance companies in ways that end up creating a situation that Medicare is actually weaker and has a less financial foundation, because right now, we've got eight years from now potentially Medicare going into the red.

STEPHANOPOULOS: Let me ask you about the broader debate around this – and you've seen a lot of your allies look at this whole debate around healthcare… and see the issue of race being injected after Joe Wilson's outburst. This week, President Carter. I know you disagree with that - that race is involved here. And you know we've talked about this in several interviews, about these kinds of issues, and you always dismiss it. So I'm just wondering: Does it frustrate you when your own supporters see racism when you don't think it exists?

OBAMA: Look, I think that race is such a volatile issue in this society. Always has been. That it becomes hard for people to separate out race being sort of a -- part of the backdrop of American society versus race being a predominant factor in any given debate. And what I've said, what we talked about during the campaign, are there some people who don't like me because of my race? I'm sure there are. Are there some people who vote for me only because of my race? There are probably some of those too. The overwhelming part of the American population I think is right now following the debate and trying to figure out is this goingto help me? Is health care going to make me better off? Now there's some who, setting aside the issue of race, actually I think are more passionate about the idea of whether government can do anything right. And I think that that's probably the biggest driver of some of the vitriol right now.

STEPHANOPOULOS: Whether you're going to raise their taxes.

OBAMA: Well, it goes beyond taxes. I mean I think that what we're seeing right now is a part of a running debate that we saw during FDR, we saw during Ronald Reagan, anytime there's a president who is proposing big changes that seem to implicate (ph) the size of government, that gets everybody's juices flowing and sometimes you get some pretty noisy debate.

STEPHANOPOULOS: But you're in a different…

But -- but just to finish the thought. I think what I'm proposing is a very modest attempt to make sure that hard-working families out there are going to have the security of health insurance that they can count on. This isn't a radical plan. This isn't grafting a single payer model onto the United States. It's simply trying to deal with what everybody acknowledges is a big problem.

I think that there are some opponents who have used -- seized on this and tried to use this as a proxy for saying that somehow we are vastly expanding government and taking over every sector of the economy.

That's what a lot of this debate is about...


OBAMA: I think they're wrong. The one thing I hope is, is that we can have a civil argument about it and that we are able to acknowledge good motives on both sides. Everybody is a patriot. Each of us are Americans that care deeply about this country. And -- and sometimes I think that, frankly, the media encourages some of the outliers in behavior, because, let's face it, the easiest way to get on television right now is to be really rude. If you're just being sensible and giving people the benefit of the doubt and you're making your arguments, you don't -- you don't get -- you don't get time on the nightly news.

STEPHANOPOULOS: You might on Sunday morning, but…

OBAMA: But if you -- if you say something outrageous, you're there in a hot second.

STEPHANOPOULOS: But if you're – have some of your allies made it easier for -- handed your opponents some ammunition, like ACORN, for example...

OBAMA: Well, look, the -- you know, I think that -- are there folks in the Democratic camp or on the left who haven't -- haven't always operated ways that I'd appreciate?


STEPHANOPOULOS: Congress has just cut off...

OBAMA: Is -- is...

STEPHANOPOULOS: ...all funding for ACORN.

OBAMA: It's...

STEPHANOPOULOS: Are you for that?

OBAMA: Is that true on the other side, as well?

Of course that's true.

STEPHANOPOULOS: How about the funding for ACORN?

OBAMA: You know, if -- frankly, it's not really something I've followed closely. I didn't even know that ACORN was getting a whole lot of federal money.

STEPHANOPOULOS: Both the Senate and the House have voted to cut it off.

OBAMA: You know, what I know is, is that what I saw on that video was certainlyinappropriate and deserves to be investigated.

STEPHANOPOULOS: So you're not committing to -- to cut off the federal funding?

OBAMA: George, this is not the biggest issue facing the country. It's not something I'm paying a lot of attention to.

STEPHANOPOULOS: Afghanistan is a big issue facing the country right now.

OBAMA: That is a big issue. That's worth talking about.

STEPHANOPOULOS: You were for a flexible time line in Iraq. Some people now are saying that's exactly what should happen in Afghanistan if the same conditions hold.

Do you agree with that?

OBAMA: Here's what I think. When we came in, basically, there had been drift in our Afghan strategy. Everybody acknowledges that. And I ordered a top to bottom review. The most important thing I wanted was us to refocus on why we're there. We're there because al Qaeda killed 3,000 Americans and we cannot allow extremists who want to do violence to the United States to be able to operate with impunity.

Now, I think we've lost -- we lost that focus for a while and you started seeing a – a classic case of mission creep where we're just there and we start taking on a whole bunch of different missions.

I wanted to narrow it. I did order 21,000 additional troops there to make sure that we could secure the election, because I thought that was important. That was before the review was completed. I also said after the election I want to do another review. We've just gotten those 21,000 in. General McChrystal, who's only been there a few months, has done his own assessment.

I am now going to take all this information and we're going to test whatever resources we have against our strategy, which is if by sending young men and women into harm's way, we are defeating al Qaeda and -- and that can be shown to a skeptical audience, namely me -- somebody who is always asking hard questions about deploying troops, then we will do what's required to keep the American people safe.

STEPHANOPOULOS: So no final decision. I just have one -- one last question...

OBAMA: Now, the -- the only thing I want to say, though, is -- is that what we – I just want to make sure that everybody understands that you don't make decisions about resources before you have the strategy ready.

STEPHANOPOULOS: I just have time for one final question.

I'm sure you know the story about John Kennedy's first summit with Nikita Khrushchev back in his first year in office.


STEPHANOPOULOS: He meets with Khrushchev. Khrushchev cleans his clock.


STEPHANOPOULOS: Kennedy walks out and knows that's exactly what's happened.

I know you -- there are no perfect analogies, but what's the moment, in the last eight months, where you took a step back and said: 'Wow, I'm going to have to step up my game'?

OBAMA: You know, it's an interesting question. I -- I mean I don't mean to be immodest here, but I don't think I've had that moment with a -- with a world leader, where I said gee, you know -- you know, we've got to really tighten things up.

I think there have been times where I have said I've got to step up my game in terms of talking to the American people about issues like health care. I mean I think during this whole health care debate, I've -- there have been times where I've said...

STEPHANOPOULOS: You lost control?

OBAMA: Well, not so much lost control, but where I've said to myself, somehow I'm not breaking through. And -- and it's not -- you know, I know my critics would just say well, it's because you -- you know, the plan is just, you know, the -- the wrong one.

But it's -- it -- that's not so much it. It's -- this has been a sufficiently tough, complicated issue with so many moving parts that, you know, no matter how much I've -- I've tried to keep it digestible, you know, it's very hard for people to get their -- their whole arms around it. And that's been a case where I have been humbled and I just keep on trying harder, because I -- I really think it's the right thing to do for the country.

STEPHANOPOULOS: Thanks very much for sitting with us.

OBAMA: Great to talk to you. Thank you.

STEPHANOPOULOS: President Obama trying harder to communicate onhealth care.

STEPHANOPOULOS: Let's talk to the roundtable about all this now.I am joined, as always, by George Will, Peggy Noonan of the WallStreet Journal, Bob Reich of Berkeley and the American Prospect,former Bush strategist, Republican strategist Ed Gillespie, and DonnaBrazile.

Welcome to you all.

And, George, let's pick up on that last point with the president,a concession there from the president that he hasn't communicated aswell as he'd hoped on health care. Is this blitz we're seeing theanswer?

WILL: I don't think so. I mean, it was a concession to avoid abigger concession. Every president, when he has trouble selling anidea, says, "Nothing wrong with the idea. It's the packaging that'swrong. People have seen too little of me."

And so he's -- he's acting in character with the office. Butthere is a fact -- there is an inverse relationship between the amounthe speaks about health care and support for health care.

And this week, George, something immense happened, and that is wegot a big number. Actually, we got a little number. We deal withhundreds of billions and trillions of dollars in talking about this.The number that came out this week is 13 percent.

They said 13 percent of a family's income, a family making$66,000 a year, about $15,000 over the median income, about 13 percentof their income under this plan would go for health care, not countingco-payments and not counting deductibles.

STEPHANOPOULOS: Hence, the charge a middle-class tax increasefrom Democrats...

WILL: Correct.

STEPHANOPOULOS: ... like Jay Rockefeller. I want to get to moreon the policy on health care later in the roundtable.

But, Ed, let me bring you in here. I saw your former White Housecolleague, Dana Perino, say that what we've seen here is the presidentoverexposed. Are you sure that's right?

GILLESPIE: I think there's a lot to that. I mean, the fact is,four primetime press conferences in the course of this presidency, thejoint session speech in primetime, Leno and various appearances,including this morning, and it's not moving the needle, I thinkbecause he's dissipated the impact of -- of presidential speech rightnow.

STEPHANOPOULOS: When you say moving the needle, he didn't get abig bump out of the joint session speech, but it does appear that he'sstabilized the numbers on health care.

GILLESPIE: Well, according to ABC's own polls afterward, youhave 54 percent who say the more they hear about it, the less theylike it. You've got 78 percent who say that they think it's not goingto benefit them in terms of affecting costs or make it worse. The 82percent, I think it is, who say that it's not going to improve thequality of their care and probably make it worse.

So I'm not sure he did. He may have -- he may have stemmed somebleeding, but I -- I think he's diminished the impact of his -- of hisoffice a little bit with the overexposure.

BRAZILE: I don't think he's overexposed, George. I think he isnot only an effective communicator, but the president is -- is now inthe final months of his first year in office. And he's clearly tryingto get through his message through all the clutter, the new media, theold media, and everything in between, and this is an opportunity forthe president to orchestrate what I believe is the most importantphase of this health care debate and other debates, and that is tomake sure that he can find a less chaotic path to the passage.

So by communicating, by getting his message out through thisclutter, I think the president is once again demonstrating leadership.And this is a very important time for him.

STEPHANOPOULOS: Peggy, one of -- one of the arguments the WhiteHouse makes is that they're dealing with a very different mediaenvironment than any other president ever had to deal with. It's sucha fractured media environment that in -- and that even someone likeRonald Reagan, who you worked for, would have to do more of whatyou're seeing the president do in this environment.

NOONAN: Oh, I don't know. I think the president is doing whathe's doing now, being all over today and the past few weeks, he'sdoing it because he can, because people do what they know how to do...

STEPHANOPOULOS: No one's going to turn him down.

NOONAN: ... because this is his way, because everybody will sayyes. I don't think it's about the media environment, but I do thinkthe media environment allows a modern leader to be something subtlydamaging, and that is boorish. They get their face in your face everyday, all the time. It's boorish, and it makes people not lean towardsyou, but lean away from you, no matter what the merits of the issue,and the merits of this issue are not such great merits.

REICH: Well, let me disagree a little bit. I -- I think thispresident is anything but boorish. I mean, the face that we see isone of dignity and a gravitas and utter reasonableness. Ed, when yousay that...


REICH: Well, but -- but, you know, this is an interesting point.My -- my calculation is that, at the end of today, the president willhave appeared, in terms of national print and broadcast media, about124 times, up to this point in his -- in his -- in his term.

STEPHANOPOULOS: Thanks to Mark Knoller of CBS.



REICH: Well, it's extraordinary. But Bill Clinton by this time,I think the number was 47, or something like that. George W. Bush was40. I mean, this is -- this is a president who is very exposed, ourcurrent president, but he's the educator-in-chief. I mean, if heweren't effective at doing this, he would not be doing this.

And, Ed, let me go back to something you said. The polls areover the place in terms of effectiveness. That CBS poll showed a verysubstantial increase after he gave that speech to the joint session ofCongress.

GILLESPIE: But I think it was a bump. It wasn't lasting.

REICH: Well, but we can call -- can call it a bump. We can callit an increase. The point is that he is and he had to after Augusttake the initiative again. He is taking the initiative. He knowsthat if there's any lull right now, his opponents are going to jumpinto that lull. And it's very important that he educate the publicabout what's going on.

STEPHANOPOULOS: Let me jump in right here, because we're goingto have to take a break. We've got a lot of time on the back end ofthese commercials, a lot more to talk about. We'll be right back withthe roundtable and the Sunday funnies.



CARTER: An overwhelming portion of the intensely demonstratedanimosity toward President Barack Obama is based on the fact that heis a black man.

BECK: We have a former president who says, if you're opposed tothe president's health care, you're a racist.

LIMBAUGH: The left looks at everything through a racial prism.I'm just -- I'm just -- hey, they hit us, we hit back twice as hard.

PELOSI: In the late '70s in San Francisco, this kind of -- ofrhetoric was very frightening. And it gave -- it created a climate inwhich we -- violence took place.


STEPHANOPOULOS: The debate not coming down (ph) as PresidentObama called for. Let me bring the roundtable back in. I'm joined byGeorge Will, Peggy Noonan, Bob Reich, Ed Gillespie, and Donna Brazile.

And, George, as we -- as we get to this, let me show two magazinecovers from this week. First, Time magazine, Glenn Beck, mad man, andthe angry style of American politics. And then in the New Yorkmagazine coming out tomorrow, there's the tattooed face of BarackObama, big headline, "Hate."

We -- we heard President Obama say he thinks that a lot of anti-government feeling, the idea that the government can't do anythingright, is behind all this. What's your theory?

WILL: The president's right about that. What we're hearing isthe liberals' McCarthyism, which is, when in doubt, blame people forracism. Litigators have an old argument: When the law's on yourside, argue the law. When the facts are on your side, argue thefacts. When neither's on your side, pound the table. This amounts topounding the table.

I have yet to see evidence, is there -- does evidence evenintrude in this conversation? Is there any evidence that these peopleare racists? I think not.

STEPHANOPOULOS: Donna? BRAZILE: Well, George, there's some evidence that -- not anoverwhelming amount of evidence -- that some of -- a small fringe ofthis movement, clearly there's some racism. And you don't have toknow the motives of someone's heart to understand when you see signs,incendiary signs that basically compares him to a witch doctor, anAfrican heathen. We know racism; we don't have to be told or taughtthat. That -- that much we do know.

There's a culture of extremism that has gained mainstreamacceptance. And I think the president is absolutely right. When yousee it, you have to call it. You shouldn't duck it. But, on theother hand, you shouldn't exaggerate it.

This is why we need responsible leaders to denounce it, but moreimportantly, we need to find a way to have an honest and good dialoguewhenever race is a topic so that the president of the United States,which is very busy, does not have to have beer summits all the time.

NOONAN: You know what I think? When I look at this, I step backa little bit and I think, "There is a lot of anger now." Mrs. Pelosihad a point. Things get high. It's always good to cool things down.But, essentially, what we have here is a very new president. He'sonly been here for 10 months. He is a young man. He didn't havedeep, long, profound experience.

He is attempting right now to change, what is it, 17 percent, 18percent of the GNP of the United States of America, changing how itworks, health care. This is problematic on the face of it. Peoplewill argue about that. But on top of that, people are thinking about-- in America -- the economy, unemployment, war and peace, two warsthat are going.

This president, who is new and young, comes along and says, "Oh,that's not the issue. The issue is health care." It seems not like aprogram, but a non sequitur...


NOONAN: ... and it angers people.

STEPHANOPOULOS: Well, and that -- and, Bob, Bill Clinton facedthe similar -- and Hillary Clinton faced similar kinds of anger in1993 when they put health care forward, as well.

REICH: Yes. The difference, though, I think -- and, by the way,I think Donna is absolutely right. There is some element of racismhere. You can't avoid it.

The question is whether it's the dominant element. I don't thinkit is the dominant element. I think Peggy put her finger on it justnow, and that is, when 1 out of 6 Americans is underemployed -- eitherunemployed or underemployed -- and when you have about 1 out of 3Americans worried that they could be, there is an element of anxietyand fear in the population right now that demagogues either on theright or left will almost inevitably use to position themselves. The politics of resentment is something we've seen before in thiscountry. Right now, you have right-wing talk radio people who arewhipping it up, not just against the president, but againstforeigners, against immigrants, against blacks, against elites. Thisis what happens in this country when people are scared.

STEPHANOPOULOS: But -- that's true, and it's -- but it's rightand left. You know, Ed, I was struck this week -- I spent an eveningflipping between Fox News and MSNBC. And it's like you were living inparallel universes. They are basically taking completely differenttakes on a similar issue to just attack each other and not -- and notreally look at -- look at the problem.

GILLESPIE: Well, this is to your point, George.

STEPHANOPOULOS: I'll probably get attacked for that, but goahead.



GILLESPIE: Well, you have a -- you have a fractionalized mediatoday, which reflects the new environment in which the debate takesplace. And I do think there's a pull from the left and the right,whether it's talk radio or blogs.

But, look, I think, as Donna said, you know, responsible leadersin both parties need to note a couple things. One is, when you -- youknow, you make cheap comparisons to Adolf Hitler from -- from theright with the president or when you inject charges of racism wherethere -- where it's not evident, where people may have legitimateconcerns about intervention in their health care, which is a verypersonal matter, you inflame an already impassioned debate.

STEPHANOPOULOS: Let's -- let's get to that, because, GeorgeWill, you brought it up right at the top, that when people started tolook at this bill by Max Baucus, the Senate finance chairman, thisweek, they looked at some of the provisions. And for some middle-class families in the $66,000 to $100,000 range, 13 percent of theirincomes will be going to premiums before they go to co-pays anddeductibles.

And -- and, Bob Reich, this is something that it was interesting,Democrats pounced on this.

REICH: Jay Rockefeller and other Democrats. You know, I thinkthat the Baucus bill, you know, as a professor grading papers, I wouldgrade it somewhere between a D and an F.

WILL: No grade inflation there.

REICH: But -- there's no grade inflation. But, look, it's thebeginning point. I think it is -- this is the dance of legislation.Over the next month-and-a-half, we're going to see the Democrats inthe House come out with a very different bill. We're going to seesomething go to the Senate as a whole. We don't know exactly what itis. We're going to see a lot of negotiation in the Senate FinanceCommittee itself.

Is this a good place to begin? I would say it's not ideal, butit's at least a place to begin. I think the momentum for health careis such that we are going to get a health care bill on the president'sdesk that he will be comfortable about signing this fall.

STEPHANOPOULOS: But will -- will -- will it meet the president'sobjections? I think you're probably right that there's a lot ofmomentum behind this right now, but we're seeing 500-somethingamendments filed in the Senate Finance Committee. The beauty from thepresident's perspective of the Baucus bill is that it covers almosteverybody -- 94 percent...

REICH: And it keeps -- and it keeps the insurers and the drugcompanies and all the opponents traditionally inside the box.

STEPHANOPOULOS: And doesn't increase the deficit. But let mebring this question to George Will. If you start to address theseconcerns over affordability and cost, will the president's overall redline of it's not allowed to increase the deficit be met?

WILL: Of course not. The reason this meets that no increase inthe deficit are really two things. First, it lowers the subsidies forpeople who are being compelled to buy health insurance. Now, that'swhy you get to the 13 percent of their income they're going to spendon that. And, of course, subsequent Congresses will simply raise thesubsidies and blow the deficit off.

Second, the president says it's -- it's not going to add to thedeficit, because Congress is going to cut Medicare by hundreds ofbillions of dollars. No, it isn't.


BRAZILE: Well, look, first of all, I think the Baucus bill isthe floor, not the ceiling. And it's -- it gives the party aframework to make the bill better.

I agree that I would not give it a wonderful grade initially, aswell. But it allows the Democrats to really have a framework to makeit a stronger bill. And if the Republicans decide to continue to stayon the sideline, then the Democrats will have to really have a goodinside game to get this bill through.

STEPHANOPOULOS: Republicans, all but one, Peggy, I couldn't helpbut notice in -- in the president's opening answer on health care, he-- he knew he was going to work in his courtship of Senator OlympiaSnowe of Maine, one of the most powerful people in Washington rightnow.

NOONAN: She sure is. She's in an extraordinary position. It --it is also probably a dangerous position for her. I don't know whatshe will do. I don't have insight...

STEPHANOPOULOS: I don't think she knows yet.

NOONAN: ... into that. I -- I wonder. There is much to begained if she becomes part of something that is good, but it is hardto believe a really good bill is going to come out of this.

GILLESPIE: Yes, let me just say, I think -- I have to say, Ithink they've been a little bit ham-handed, frankly, in their handlingof Senator Snowe. I think they've been...

STEPHANOPOULOS: She's still in the game, no?

GILLESPIE: Absolutely, she's still in the game. I think othersare still in the game, as well, by the way, Senators Voinovich...

STEPHANOPOULOS: Other Republicans?

GILLESPIE: Absolutely. Republicans would like to get somethingdone on health care. They're for reform. They're just not for thereform that is coming from the left. And I think it'll be interestingto watch this bill as it moves through the committee. I suspect itmoves further and further actually to the left. And we're going to...

STEPHANOPOULOS: Well, it has to at this point, doesn't it? GILLESPIE: I suspect it does. And I think that brings us to apoint, George -- I think it makes it very tough for Olympia Snowe atthat point to try to stay with it. She has said in the past that shewill not be the sole Republican to support legislation.

But let me just say, they seem to be heading toward the -- theso-called nuclear option, going to the floor and trying to jam itthrough in the reconciliation process. I think that is a huge threatto this president and his greatest attribute politically, which isthis still aura of post-partisanship. He will become at that point avery partisan Democrat.

STEPHANOPOULOS: It's not just the...


NOONAN: It would be a catastrophic...

GILLESPIE: Catastrophic, I agree.

BRAZILE: But -- but let me just say this. Bipartisanship wasalways the goal. When you accept Republican amendments in the Houseand the Senate and try to bring Republicans aboard, as Chairman Baucushas tried to do, look, he took out the public option to gainRepublican support. He -- he gave them interstate marketability.

GILLESPIE: A little bit.

BRAZILE: He's doing everything to try to bring Republicansalong, but the Republicans don't want to come along.

REICH: You know, Mitch -- Mitch McConnell continues to say tothe Republicans, "Don't go along at all." Olympia Snowe is very, veryimportant to give cover to some of the more conservative Democrats,both in the House and the Senate.


STEPHANOPOULOS: ... get Democrats.

REICH: Because -- because it's -- you know, her being therebasically allows them to say, well, there are some Republicans there.

George, can I just respond to the deficit point? Because there-- the third most powerful person in this town besides the presidentand Ben Bernanke is Doug Elmendorf, who chairs or who runs theCongressional Budget Office. And he has found the Baucus billactually, after 10 years, has a surplus. I mean -- and he also hasfound that -- and he doesn't count the public insurance option at allin being...


STEPHANOPOULOS: But, Bob, I can see the question of Georgebefore (ph). If you -- if you -- and it might be the right thing todo, but if -- if these provisions that Jay Rockefeller and others arecalling for to add money back into the bill come through, then DougElmendorf is going to have to make another judgment. And will hestill find that the bill is deficit neutral?

REICH: No, I don't think so. I think he will -- there will haveto be further cuts somewhere along the line. I wish -- and this iswhy I bring it up -- because the CBO in scoring, this town is filledwith the arcane notions of scoring and projections and also what's onthe Byrd bill and what's not. Doug Elmendorf and his crew is going todecide whether and to what extent a public insurance option oranything by -- that looks like it can be scored in terms of savings,in terms of competition...

WILL: On -- on the basis...

REICH: ... and they will find nothing, because there's noanalogy.

WILL: On the basis of what experience -- and you've had a lot ofWashington experience -- do you believe Congress is going to cutMedicare? REICH: I think Congress is going to not cut Medicare...

WILL: Thank you.

REICH: ... but -- wait a minute -- but it's going to put somedamper on the increases in Medicare spending over time. It's going tocut...


REICH: ... it's going to get that cost curve under control. Ithas to. It has to.

GILLESPIE: You know, there's a lot of focus on the Medicareaspect of this, George, but there's a big Medicaid aspect of it, too,that I think is lying in the weeds on this. And -- and the governorsthemselves, who are in cash crunches all across the country, thisshift of a huge chunk of the federal Medicaid burden to the states, Ithink, is going to be one of the hidden things here that -- wherepeople stand up and say, "Wait, we can't do that," and it's going tolead to a lot of problems in terms of that deficit number.

REICH: But get out of the -- get out of the twigs. Get out ofthe branches. I mean, look at the trees and the forests. I mean,Medicare costs are going from, what was it, 8 percent in 1980 to 16percent of the GDP right now. Whatever you're talking about --government expenditures, state expenditures, individual expenditures-- we can't go on...


STEPHANOPOULOS: Let me -- let me (inaudible) on that, becauseyou said get out of the twigs. And you write, one, get out of thetwigs on the policy side, also on the political side. When Democrats,Peggy, take a step back, they say, "We're not going to fail because wecan't fail. It's simply too catastrophic to the president to -- tofail on health care."

Yet you get into the weeds of the -- of the actual detail line byline of the policy, and you don't see something that there's amajority support for, at least not yet.

NOONAN: I think what normal people watching what is going on inWashington think, to step back, is that, oh, they -- the people inWashington -- are going to make government bigger now. They're goingto make it more expensive now. And they're going to make it moreintrusive in my life, forcing me to buy, say, insurance if I don'twant to or a penalty if I don't. Do I want that now, with the economyin the shape it's in and with being worried about my nephew, who'sover in Afghanistan and is he coming back? No, I don't think that'swhere people are.

I think the president will get something. I think he will win.There will be a headline that says, "Obama gets health insurance," orwhatever he gets, however it's put, but I think it will be a sort ofvictory that makes people think, "That's not what we need." BRAZILE: Well, you know, the other flipside of that, of course,is that the status quo is untenable. We're paying more in premiums --I think the president said $900; I've seen estimates at $1,100 --additional dollars in uncompensated care, 45,000 people lose theirhealth insurance -- 45,000 -- Americans are dying each year becausethey lack health insurance, just 1 out of 12 Americans.

We need to convince the American people that this is in theirbest interest, that this is good in the long term, because whether wedo -- do something this year that might be incremental, may not be as-- as expansive as the House bills, but if we do nothing, Peggy, wepay up -- we pay a dear price in the deficit...

NOONAN: How about you do portability and tort reform and theRepublicans are on board, and it's bipartisan, and the Americangovernment did it, and Obama still gets, "Obama wins"?

REICH: Because, Peggy, with due respect, that does nothing aboutthe fact that most Americans are paying through their nose now for co-payments, deductibles and premiums on a scale that they cannotpossibly afford in the future.


NOONAN: Then why are they saying in polls, "Oh, my goodness, I'mafraid of the change"...


REICH: It's not just costs. It's also making this the most --the most inefficient insurance system in the world. We all know that.

Now, look, Franklin D. Roosevelt decided not to add health careto the New Deal. Why? Because he said to his colleagues, "I can'texplain it. It's too complicated."

STEPHANOPOULOS: We just heard President Obama say somethingsimilar...


REICH: Exactly. Exactly. I mean, this -- this -- we have nowone of the best communicators we've ever had, the educator-in-chief.That's why he's all over the media. We haven't listened to him.

STEPHANOPOULOS: Let's also -- before we go -- talk aboutsomething else the president brought up there. And, George, I heard alittle bit of news as I was talking to the president aboutAfghanistan, saying for the first time, I believe, he is skeptical ofthe idea of sending more troops to Afghanistan. This comes in a weekwhere his chairman of the Joint Chiefs of Staff was before theCongress saying more troops are probably going to be necessary.

WILL: Three words that should get all our attention. Skepticalis one of them. The other was secure. He said, I sent 21,000 troopsto Afghanistan to secure the elections. That's a very minor thing.The elections are over, or maybe they're not...


WILL: ... because of the Afghan winter, the run-off, if there isone, because of the corruption that we failed to secure the electionsagainst, we may have six months effectively without leadership inKabul.

Third, he said to you his aim is to narrow the mission. WhatGeneral McChrystal is trying to do is broaden it, at least in turns ofthe manpower-intensive nature of it, to protect the population, notnarrowed, not secured.

STEPHANOPOULOS: That -- that is the dilemma. The president hasa narrow goal of stopping Al Qaida, but a very broad mission, thiscounterinsurgency mission that McChrystal has come up with. Heactually fired his previous commander in order to get McChrystal inthere. So doesn't that mean he almost has to approve what McChrystalcomes back with?

GILLESPIE: I think it does, George. And I think Republicanswill support him in that. And, I'll tell you, I think this isdefinitional for President Obama. The fact is, he campaigned and saidthat Afghanistan is a strategic imperative for the United States. Itis critical to our national security that we be successful there. If he reverses that and backs away from it and is pulled by hisleft in Congress, I think that would be a huge...


GILLESPIE: ... mistake.

STEPHANOPOULOS: ... the timeline and just, you know, tries tobuy some time and just doesn't immediately add more troops?

GILLESPIE: I think, if you listen to the commanders in thefield, that's not going to result in doing what needs to be done to besuccessful there. And I think that would be an even worse mistake.Then you're...


GILLESPIE: Then you're out there in the middle of the road.It's the wrong place to be on this.

REICH: This is a classic example of mission creep, and we'veseen this again and again. The president knows this. He mentionedthat to you. He said mission creep. He used those words.

The problem is that, if he follows the Joint Chiefs of Staff, whosaid this week, look, I want a major increase, a huge increase, morethan McChrystal is talking about, we could get bogged down inAfghanistan forever.

The goal here, remember, is Al Qaida. Al Qaida is moving intoPakistan. Al Qaida can easily move its entire operations out of the-- of Afghanistan. What do we need to be in Afghanistan for?

STEPHANOPOULOS: He -- the president said you simply can't takeout Al Qaida with drones alone, as George Will has recommended.

BRAZILE: And Senator Levin has made it clear that sending moretroops without a very defined mission of perhaps training the Afghanarmy -- I mean, security forces and police is a non-starter. It'sgoing to be a very tough sell on Capitol Hill.

WILL: ABC poll this week said 66 percent of Republicans say wemust win in Afghanistan, but 57 percent of those Republicans who saywe must win said we should either decrease or hold level the forces inAfghanistan. The president -- the previous president said we willstand down as the Iraqi forces stand up. It took us six years to getto an army in Iraq of -- of 250,000 people. How long is it going totake in Afghanistan?

NOONAN: Politically, when you look at Vietnam, you see the pointat which Johnson's war became Nixon's war. I think the problem -- thepolitical problem for Mr. Obama now is that Bush's war is becomingObama's war. This is where things get really serious 10 months intohis presidency.

STEPHANOPOULOS: You know, a question was also, at what point didKennedy's war become Johnson's war? And a lot of people look back athistory and say, you know, there were inflection points. There werepoints when even though it might have been difficult, even though apresident might have been accused of losing credibility, of notfollowing through on his commitments, it might have been the wisercourse to just say, "Enough is enough."

GILLESPIE: May have been -- a flipside to that, if I could --because when President Bush authorized the surge, public opinion wasstrongly against putting more troops into Iraq at the time. Itworked. And the fact is, you have to, as a president and ascommander-in-chief, make decisions regardless of the polls.

President Obama has staked a claim that Afghanistan and successin Afghanistan is critical to our national security. If he changesthat perspective and appears to have done so because of either pullfrom his left or poll results, I think it'll damage his presidency forthe rest of his term.


BRAZILE: Afghanistan is not Iraq.

REICH: It's not poll results. It's -- it's more informationabout what is happening there. It's better information about what'shappening there. It's the same as this change in his entire policytoward Russia. You know, all of these things are interactive.

STEPHANOPOULOS: You know, George, I'm afraid that we're out oftime. I want you guys to continue this -- continue this in the greenroom. You can check that out later on And you can getpolitical updates all week long from our daily newsletter. That'salso on