Meet the Press Netcast   |  June 30, 2009

Sebelius, McConnell, roundtable

President Obama has asked Congress for a health care reform bill by their August recess and now the debate over how best to reform the system reaches a critical point. We'll talk to the President's Secretary of Health & Human Services, Kathleen Sebelius, about the administration's health care reform priorities. Then, the other side of the debate, with the Republican Leader in the Senate, Sen. Mitch McConnell (R-KY). Also, a political roundtable.

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MR. DAVID GREGORY: This Sunday: it's do or die for the president's massive healthcare reform .

PRES. BARACK OBAMA: We have finally reached the point where inaction is no longer an option, where the choice to defer reform is nothing more than a decision to defend the status quo . And I will not defend the status quo !

MR. GREGORY: But the toughest obstacles remain over taxes, coverage and overall cost. Will the president's August deadline be met, and what will the final bills look like? With us, the administration 's point person on health care , Health and Human Services Secretary Kathleen Sebelius . Then, the view from the Senate 's top Republican, Mitch McConnell . Will healthcare reform be bipartisan? And why is he preparing to vote against the nomination of Judge Sonia Sotomayor for the Supreme Court ?

Plus, our roundtable weighs in on this high stakes political moment for the president on health care and the economy . Joining us: Paul Gigot , editorial page editor of the Wall Street Journal ; John Harwood of CNBC and The New York Times ; Richard Wolffe , author of "Renegade: The Making of a President"; and Michele Norris , host of NPR 's " All Things Considered ."

And finally, in our MEET THE PRESS Minute , we remember legendary newsman Walter Cronkite .

(Videotape, November 22, 1998 )

MR. WALTER CRONKITE: The emotional aspect of it hit me when I had to say that the president was dead.

MR. GREGORY: But first, secretary of Health and Human Services , Kathleen Sebelius .

Welcome back to MEET THE PRESS .

SEC'Y KATHLEEN SEBELIUS: Thank you. Nice to be here.

MR. GREGORY: I thought we'd frame our discussion by going through what the president says must be included in healthcare reform if he's going to accept it. Now, this is what you said on that topic back in June on PBS : "It really has to lower costs , cover Americans , drive quality and be paid for." So let's go through that.

SEC'Y SEBELIUS: OK.

MR. GREGORY: And I want to start with that first principle of lowering costs . Most people may not know how expensive health care really is; $2.5 trillion per year, 16 percent of our economy . Here was the president on that score on Thursday.

(Videotape, Thursday)

PRES. OBAMA: Even as we rescue this economy from this crisis, I believe we have to rebuild an even better economy than we had before. That means finally controlling the healthcare costs that are driving this nation into debt.

MR. GREGORY: Controlling those healthcare costs . But on that very day, just hours before the president spoke, there was this from Capitol Hill from the nonpartisan director of the Congressional Budget Office . He's kind of the umpire for these plans. He says this:" Congress ' chief budget scorekeeper cast a new cloud over Democratic efforts to overhaul the nation's healthcare system , telling lawmakers Thursday that the main proposals being considered would fail to contain costs -- one of the primary goals -- and could actually worsen the problem of rapidly escalating medical spending. `We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,' Douglas Elmendorf , director of the CBO , told the Senate Budget Committee . `On the contrary, the legislation significantly expands the federal responsibility for healthcare costs .'" So if lowering costs is the rationale, the president can't support what's going through Congress right now, can he?

SEC'Y SEBELIUS: Well, as you know, David , first of all, this is a work in progress . The good news is the House and Senate are actively working and share the president's goal that overall costs have to come down for everyone. So they have an initial report on one of the initial bills that says in the long term this doesn't bend the cost curve enough. The president has a proposal that he hopes will be incorporated where MedPAC , an independent group of providers, will help to lower the Medicare costs long-term. But he's very committed to this, and I think it will be part of the package going forward. About 16 of the recommendations are already in the legislation in the House and Senate , and we want to include some more.

MR. GREGORY: But wait, but this is a huge blow, it seems like, on the face of it. If the priority is lowering costs , you've got the person who's in charge with a nonpartisan way of looking at these saying it's not going to contain costs . That was goal number one. It doesn't appear to be getting achieved through this.

SEC'Y SEBELIUS: Well, I think, I think, first of all, it's clear that this will bring costs down to a degree. It won't do enough over time, and I think we'll incorporate that. But I think you got to start from ground zero , which is the status quo is absolutely unsustainable. We have costs ratcheting up at this alarming rate, 16 percent of our GDP ; every business, every family, every organization, every government is paying more and getting less. We live sick or die younger and spend more than any nation.

MR. GREGORY: Well, but that's fine. But you want to spend a trillion dollars to bring costs down, and that the CBO is saying you won't bring costs down. And all you're saying in response to that is, "Well, no, they actually will"? I don't understand the disconnect here.

SEC'Y SEBELIUS: No, I think, I think that more will be done, the House and Senate are committed to working with the president with that.

MR. GREGORY: All right. Well, what is the president committed to doing in terms of saying to both the House and the Senate leaders working on this, "You've got to control costs "? Because it seems to me this was a wake-up call, was it not?

SEC'Y SEBELIUS: Well, he's been doing that all along. He's very engaged and involved. And I think the Senate and the House members want to do this. This is a, a sort of initial scoring, if you will. The House is still...

MR. GREGORY: Was it a wake-up call to the president?

SEC'Y SEBELIUS: Well, I think, I think we know now that more has to be done. As I say, he's got a proposal on the table that he hopes Congress will take a serious look at.

What I think is, is somewhat disingenuous, though, is that the last real health reform put on the table, the incorporation of Medicare Part B , wasn't paid for at all and is part of the cost driver . We have some initiatives that are under way that we know we need to reform. There's no scoring at this point, no cost savings at all for the prevention and wellness investments that we know will pay off long-term. So we'll continue to work on this and...

MR. GREGORY: So this isn't ready yet?

SEC'Y SEBELIUS: No.

MR. GREGORY: In other words, this is not ready, this does not meet the president's goals yet?

SEC'Y SEBELIUS: Well, we don't have the bill even out of the Senate Finance Committee , that's still under way, the bipartisan effort that's going on. The House is still on markup. This is a work in progress . And I think the House leaders and Senate leaders share the president's goal that costs will come down.

MR. GREGORY: Right. So the message here, the bottom line from the president to leaders working on this in the Congress is, "You had better lower costs before this gets to me."

SEC'Y SEBELIUS: Well, it isn't that the president is scolding anyone.

MR. GREGORY: Right.

SEC'Y SEBELIUS: He's congratulating them for the work and saying we...

MR. GREGORY: But it's his goal.

SEC'Y SEBELIUS: Well, we need to keep...

MR. GREGORY: But, Madam Secretary , it's his goal.

SEC'Y SEBELIUS: I understand.

MR. GREGORY: He said it's got to lower costs ...

SEC'Y SEBELIUS: Yes.

MR. GREGORY: ...and you're not contradicting the idea that the CBO says it's not.

SEC'Y SEBELIUS: Well, we have gone, I think, a long way to, again, incorporating what the CBO director said needed to be in the bill. Many of those elements, the vast majority are already in the bill. And I think we need to take another step in terms of -- and it's probably the, the MedPAC idea, making sure that an independent group a step removed from Congress is able to continue to watch that cost curve and help us drive quality . I mean, that's what we're really trying to do.

MR. GREGORY: Right. And we'll get to that in a minute.

SEC'Y SEBELIUS: Out of the...

MR. GREGORY: But in other words, an independent group watches costs after it's been passed...

SEC'Y SEBELIUS: No, no, no.

MR. GREGORY: ...to try to contain them?

SEC'Y SEBELIUS: It, it's part of the changes that we need so that we go ahead and implement a number of the recommendations, the cost-cutting recommendations that have been made year after year but Congress has failed to implement them.

MR. GREGORY: Right. Let me get to the other priority here, which is coverage of Americans .

SEC'Y SEBELIUS: Right.

MR. GREGORY: Forty-seven million Americans , roughly, uninsured right now. Is universal coverage the priority?

SEC'Y SEBELIUS: It isn't the priority, it's one of the priorities: cost, quality , coverage . All three have to be part of this fundamental reform.

MR. GREGORY: So if there are, say, millions of Americans who are left uninsured, it would not stop the president from signing a healthcare reform bill?

SEC'Y SEBELIUS: Well, I think that it -- one of his goals, again, it, it's not one or the other. He wants a bill that covers all Americans , that offers affordable, quality coverage to all Americans .

MR. GREGORY: We have some experience with universal health care now in Massachusetts ...

SEC'Y SEBELIUS: That's right.

MR. GREGORY: ...and they're taking a hard look at that, because on the issue of costs it doesn't appear to be going so well. This is how the Wall Street Journal reported it on Friday:"In 2006 , Massachusetts adopted a healthcare law that was attain near-universal health insurance coverage ...[b]ut the plan has done little to control costs , which are now 33 percent higher than the U.S. average and projected to grow faster than the rest of the country ." Is that another flashing red light here?

SEC'Y SEBELIUS: Well, I think -- I've had a lot of discussions with the Massachusetts individuals, including the head of their retail association, who was very involved in passing the bill. He said they made a fundamental mistake, they did this as two steps; they went for universal coverage , now they have a group back at the table revisiting the costs . What the president has said from the outset is we need to do them both together. We need to have this as a comprehensive reform that both covers all Americans , but also lowers costs .

MR. GREGORY: But what are you doing to anticipate the result that you've already seen here, which is universal coverage , covering more people, subsidizing more people to get insurance ...

SEC'Y SEBELIUS: That's right.

MR. GREGORY: ...drives up costs , does not bend the cost curve .

SEC'Y SEBELIUS: Well, not unless you incorporate that at the outset, and that's why 16 of these proposals are already in. We're going after fraud and abuse in a, in a fundamentally different way. We know there are billions of dollars stolen out of the system every year. It's why the president insistent on the public option. One of the ways to lower costs ...

MR. GREGORY: The idea -- public option of a government plan that competes with private insurance plans.

SEC'Y SEBELIUS: Competing. We have insurance companies right now who pick and choose not only who gets covered, but basically with monopolies in many parts of the country , drive the costs up. We need some competition in the system to bring those costs down.

MR. GREGORY: Right. Because a public plan would necessarily be less expensive.

SEC'Y SEBELIUS: Competition will lower costs .

MR. GREGORY: Right. But a public plan would necessarily, for it to, to work, would be less expensive for consumers.

SEC'Y SEBELIUS: Well, I think it will...

MR. GREGORY: Right.

SEC'Y SEBELIUS: ...I think it will lower the overhead costs that are often 30 cents on the dollar, give some affordable options to small business owners and self-employed Americans and help jump-start this economy .

MR. GREGORY: So why wouldn't everybody go to a public plan, then? If it's less expensive, why wouldn't everybody choose that?

SEC'Y SEBELIUS: Well, I think that a lot of people have coverage they like. I think what you'll see is private insurers will be competitive. They will have innovative practices, they'll compete for benefit plans that may be more attractive. That's what we want in a marketplace.

MR. GREGORY: All right. Let's talk about quality . And you mentioned, if I like my insurance , I'm going to be able to hold on to it. That's what the president talked about in his weekly radio address. Listen to that.

(Videotape, Saturday)

PRES. OBAMA: Under our proposal , if you like your doctor, you keep your doctor. If you like your current insurance , you keep that insurance . Period, end of story .

MR. GREGORY: But is that truth in advertising? The AP did an analysis of this, and this is what they reported Saturday:"It's a pledge beyond Obama 's control. His plan leaves companies free to charge their health plans," rather, "to change their health plans in ways that workers may not like or to drop insurance altogether." If an employer says, "We can't afford what we've got," a small business owner, they can change whether the employee likes it of not.

SEC'Y SEBELIUS: Well, David , that is the -- that's exactly what's happening in this marketplace. We have 12,000 Americans each and every day losing coverage . We have small business owners, over half of whom used to offer coverage , who don't anymore, who are being priced out of the marketplace. What the president is talking about is stabilizing employer coverage , making it easier for small employers to, first of all, offer coverage .

MR. GREGORY: Mm-hmm.

SEC'Y SEBELIUS: A lot of them tell me, "We can't compete for good employees because they'll go down the street to somebody who's got health benefits when I can't offer them." We got people locked into their job who would like to start a small business or work for somebody else. We have parents terrified when their kids graduate from college, happy day, but they're suddenly uninsured and some of them uninsurable. We have a system that absolutely doesn't work.

MR. GREGORY: But it doesn't address the fact that if you like your insurance you may not be able to keep it, like the president says.

SEC'Y SEBELIUS: Well, the employer market would be more stable in a new reformed healthcare system than it is right now, and that's really what the president is talking about, where employers would have help and incentives to offer coverage to their employees. Small employers would have a tax incentive and be excluded from the pay or play, be able to stabilize that marketplace and be far more competitive than they are right now.

MR. GREGORY: You can't have it all, though. The president said no free lunches.

SEC'Y SEBELIUS: That's right.

MR. GREGORY: And what I have not heard from the president and I wonder what you would say to Americans , what is it that they have to sacrifice in order to achieve this goal of universal coverage ?

SEC'Y SEBELIUS: Well, I think both the House and Senate bills are contemplating some responsibility that both -- that everyone would, would have a, a responsibility to have health insurance , that business owners would have a responsibility to provide health insurance and that the government would do their fair share . We're also hoping that that personal responsibility extends to lifestyle; that in order to have a healthier America , a more productive America , we need to make some basic changes in what we eat, how much we exercise, getting our kids up off the couch, turning off the video games .

MR. GREGORY: Right.

SEC'Y SEBELIUS: But that's a personal responsibility that all of us can take.

MR. GREGORY: But the government , in this plan, would say there are certain things we're not going to pay for. Do Americans have to accept the fact that there's going to be some limit to what gets paid for?

SEC'Y SEBELIUS: There's limits right now. Insurance companies pick and choose every day who gets what benefits, who gets what drugs, whether or not you get the procedure your doctor ordered. This notion that we're going to somehow ration in the -- rationing is going on each and every day and it's done in the private market. I think what has to happen is we know about 30 percent of the tests that are done don't make us any healthier. We know that there are areas in the country where there's a redundancy of medical procedures, people readmitted to the hospital, other areas where there's high quality , low cost care. That's what we want every American to have access to.

MR. GREGORY: Let's talk about how you're -- the, the, the other principle here, the president says it's got to be paid for, it can't add to the deficit . Let's talk about how you want to do that. The House plan would levy a surtax on the richest Americans , and there's some concern about that even among Democrats . This was The New York Times ' analysis on Saturday:"Representative Jared Polis , a freshman Democrat from Colorado ...said he worried that the new taxes `could cost jobs in the middle of a recession.' To help finance coverage of the uninsured, the House bill would impose a surtax on high-income people and a payroll tax -- as much as 8 percent of wages -- on employers who do not provide health insurance to workers...In a letter to the House speaker , Nancy Pelosi , Mr. Polis and 20 other freshman Democrats said they were

`extremely concerned that the proposed method of paying for healthcare reform will negatively impact small businesses , the backbone of the American economy .'" Does the president support a surtax on the richest Americans to get this health care paid for?

SEC'Y SEBELIUS: What the president supports is paying for this bill. He has said that it will not add a dime to the deficit , that we won't pass it along.

MR. GREGORY: But does he support this?

SEC'Y SEBELIUS: He knows that the House has a plan to pay for it . That's very good news. The Senate has a...

MR. GREGORY: But why won't he commit, Madam Secretary ? Why can't the American people know what it is he'll support ? This is a very concrete plan that is now moving its way through the House .

SEC'Y SEBELIUS: I understand, David . But as you know, there are basically five different plans in Congress right now and there are a variety of ways. What's the good news, this Congress and this president are committed to paying for this over time. In the last bill, the Medicare bill in 2003 , billions of dollars of new drug benefits were provided for America 's seniors. That's good news, they needed the drug benefit. Not a dime was paid for, not an effort to put any money on the table. so we are committed to paying...

MR. GREGORY: But we're talking about this plan, we're talking about this plan. But...

SEC'Y SEBELIUS: And it will be paid for.

MR. GREGORY: You say you're committed, but you won't say whether you support this surtax.

SEC'Y SEBELIUS: Well, I think the ideas are in play.

MR. GREGORY: All right.

SEC'Y SEBELIUS: This is a very legitimate way to go forward. The Senate is working on some other ideas.

MR. GREGORY: Right.

SEC'Y SEBELIUS: The president has put forward his ideas. In all the plans, more than half the money to pay for this proposal is already in the system . It's money that is misdirected now to efforts that don't work very well. So a lot of the money is really coming from savings and efficiencies from fraud and abuse from other areas and being directed to high quality , lower cost care.

MR. GREGORY: Does the president believe if everybody benefits under healthcare reform , everybody should pay?

SEC'Y SEBELIUS: Absolutely. Absolutely.

MR. GREGORY: He does? Then why is it he doesn't support taxing benefits for employees?

SEC'Y SEBELIUS: Well, he's always said from the outset that he's -- back to the notion that you should keep your coverage if you have it, that that may dismantle the private market, that it is the incentive given to employers to provide coverage . And what he -- 180 million Americans have coverage through their employee workplace, and a tax on those benefits may dismantle that market and then have people lose their coverage . So he's reluctant to move in that direction without...

MR. GREGORY: Even though that's consistent with the idea of if everybody benefits, everybody pays.

SEC'Y SEBELIUS: Well, I understand.

MR. GREGORY: He thinks that upper-income Americans should shoulder most of the burden.

SEC'Y SEBELIUS: Well, not most of the burden. As I say, half the money in all the plans is already in the, in the system . There are a variety of proposals to raise revenue. The House has one that's a very legitimate proposal . The Senate is working on others.

MR. GREGORY: Right.

SEC'Y SEBELIUS: The Senate Finance Committee hasn't come out with their proposal . He talked about a cap on, on itemized deductions that he still thinks is a very legitimate way to go .

MR. GREGORY: Right.

SEC'Y SEBELIUS: So there are a variety of proposals on this. But it will be paid for, it, it will not add to the deficit , and that's very good news.

MR. GREGORY: On timing, will the president meet his deadline? There are Democrats who say, "We shouldn't have a fixed deadline to do this by the August recess, we need more time." What will his bottom line be?

SEC'Y SEBELIUS: Well, I think he's, he's very clearly urging the House and Senate to stay at the table and work. They're working very hard. The August recess is looming. The bills are -- the good news is, you know, that this week America 's doctors, through the American Medical Association , endorsed the health reform bills . The nurses have endorsed the health reform bills . The hospitals and drug companies and others are at the table.

MR. GREGORY: Right.

SEC'Y SEBELIUS: And we think this can be done. The House and Senate are on track and on time, and we think that he...

MR. GREGORY: He's urging, but not demanding.

SEC'Y SEBELIUS: Well, I, I -- he isn't a member of the House or the Senate .

MR. GREGORY: Right.

SEC'Y SEBELIUS: He's saying this is an important issue. It may be the single most important issue to get our economy back on track, and the status quo cannot work. It doesn't work. It's bankrupting this country .

MR. GREGORY: But it looks like that deadline could slip.

SEC'Y SEBELIUS: Well, hopefully they'll get it done before the August recess.

MR. GREGORY: Before you go, on the issue of swine flu , which is still moving throughout the country and around the world , the fall is a big concern.

SEC'Y SEBELIUS: That's right.

MR. GREGORY: Will there be a vaccine ready, if necessary, and how big of a hit do you think we'll feel in flu season ?

SEC'Y SEBELIUS: Well, we, we don't know how big a hit. We're watching the Southern Hemisphere , which right now is in flu season , and H1N1 is moving. So far it hasn't gotten more lethal, but the cases continue to grow. We're on track to have a vaccine ready by mid-October. We need to make sure it's safe, and so clinical trials will begin. And we need to make sure it's, it's effective against this new novel strain. So that's what's happening in the meantime. And if the scientists say it's a go, by mid-October we will have a vaccine available and start with the priority communities.

MR. GREGORY: We will leave it there. Secretary Sebelius ...

SEC'Y SEBELIUS: Thanks.

MR. GREGORY: ...thank you very much for being here.

SEC'Y SEBELIUS: Nice to be with you.

MR. GREGORY: Up next, the other side of the healthcare debate and a look at the upcoming vote on Supreme Court nominee Judge Sonia Sotomayor . We'll be joined by the Senate Republican leader Mitch McConnell . Plus, insights and analysis from our political roundtable, coming up only on MEET THE PRESS .

MR. GREGORY: The view from the other side with the Senate 's top Republican, Mitch McConnell , after this brief commercial break .

MR. GREGORY: Joining us now, the Senate 's top Republican, Senator Mitch McConnell .

Welcome back to MEET THE PRESS .

SEN. MITCH McCONNELL (R-KY): Glad to be with you, David .

MR. GREGORY: We just heard from the secretary of Health and Human Services , and I thought a couple of significant points, the first on timing. Is the president going to get a bill out of the House and Senate by the August recess?

SEN. McCONNELL: Well, I don't think he ought to get the particular bills that we've seen out of either the House or the Senate before August, because they're really not the right way to go . I mean, what's going on here, David , it's perfectly clear, this is the same kind of rush and spend strategy we saw on the stimulus bill. We're going to have a deficit this year, $1.8 trillion, that's bigger than the deficit of the last five years combined. They passed a budget that puts us on the path to double the national debt in five years, triple it in 10. And here comes health care on top of it. As you just pointed out with Secretary Sebelius , CBO says it's a quarter of a trillion dollars will not be paid for. And even if you look at the pay force, they're taking it out of the backs of senior citizens and small businesses . This is a bill that shouldn't pass at any point, either before the August recess or later in the year. What we need to come up with is a truly bipartisan proposal .

MR. GREGORY: Will they get what they, what they're working on now, though? Do you think they'll get it passed?

SEN. McCONNELL: Well, I certainly hope not. I don't think this particular measure ought to pass either the House or the Senate , because it's not good for the country .

MR. GREGORY: And that's the big factor here in terms of cost. Did you hear from Secretary Sebelius , who certainly recognized the fact that the CBO said that increased costs over time undermines their goal. The president would have to really drive some specific cost-cutting before signing on to these measures.

SEN. McCONNELL: Well, if you're going to do something as comprehensive as the president wants to do and you're going to pay for it , and you, you ought to pay for it , there are no easy choices. And this is what they're grappling with right now.

Let me, let me just tell you what I think, David , if I may, is flawed about the whole approach. They don't seem to grant that we have the finest health care in the world now. We need to focus on the two problems that we have, cost and access , not sort of scrap the entire healthcare system of the United States . It's laughingly said around the Senate , "Where would the Canadians go for quality health care ?" John McCain and John Cornyn and I were down at MD Anderson in Houston , one of the world 's famous cancer hospitals, a couple of weeks ago, having a meeting with their healthcare professionals . They take care of patients from 90 countries who come to Houston to save their lives. We have quality health care now. Surveys indicate that Americans overwhelmingly like the quality .

MR. GREGORY: Right.

SEN. McCONNELL: So let's focus on access and cost and not try to scrap the whole system .

MR. GREGORY: Well, but wait a minute. You, you say that we have the best healthcare system in the world , you say it as a matter of fact.

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: But it seems to be a matter of debate. You just mentioned access . You've got 47 million people who are uninsured.

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: And there are experts, including one expert who is now an Obama adviser, who actually writes about this idea that it's a myth that it's the best health care in the world .

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: And this is what he wrote along with another expert last fall, saying:"It's a myth that America has the best health care in the world . The United States is number one only in one sense, the amount we shell out for health care . We have the most expensive system in the world per capita , but we lag many developed countries on virtually every health statistic you can name"; life expectancy , infant mortality , obesity, death rate from prostate cancer , heart attack recovery. That's the best system in the world ?

SEN. McCONNELL: That's one expert. If you look at the surveys and ask the American people what they think, they don't think quality is a problem . They think cost is a problem and access is a problem .

Let's look at access , the people who are uninsured that you mentioned. A better way to begin to deal with that problem is to equalize the tax treatment. Right now if you're running a business and you provide health care for your employees, it's deductible on your corporate tax return. But if you're an individual buying health care on the open market , it's not deductible to you. We ought to equalize the tax treatment. Another cost item we seriously ought to address, that the administration only pays lip service to and some of the proposals kicking around in Congress actually discourage, are these wellness efforts that we've seen on display, for example, at the Safeway company, which through their own efforts have targeted the five biggest categories of preventable disease -- smoking, obesity, high cholesterol , high blood pressure and lack of exercise -- and incentivized their employees to improve their personal behavior in all of those areas and capped their costs . They never mentioned junk lawsuits against doctors and hospitals. We're spending billions every year, billions in junk lawsuits defending, in defensive medicine , defending all these lawsuits. They don't want to do anything about that.

MR. GREGORY: And yet you say that the time is now to act. You think something must be done.

SEN. McCONNELL: Oh, absolutely. I'm not in favor of doing nothing. We have a cost problem and we have an access problem . We do not have a quality problem .

MR. GREGORY: Do you think it's a moral issue that 47 million Americans go without health insurance ?

SEN. McCONNELL: Well, they don't go without health care . It's not the most efficient way to provide it. As we know, the doctors in the hospitals are sworn to provide health care . We all agree it is not the most efficient way to provide health care to find somebody only in the emergency room and then pass those costs on to those who are paying for insurance . So it is important, I think, to reduce the number of uninsured. The question is, what is the best way to do that? The proposals over in the House , according to CBO , not only aren't paid for, they don't really dramatically increase the -- decrease the number of uninsured.

MR. GREGORY: Ted Kennedy , a driving force behind healthcare legislation -- Senator Kennedy , obviously, suffering from brain cancer . He's on the cover of Newsweek magazine , he's written an essay, and in it he writes this:" Quality care shouldn't depend on your financial resources, or the type of job you have, or the medical condition you face. Every American should be able to get the same treatment that U.S. senators are entitled to. This is the cause of my life. It's a key reason that I defied my illness last summer to speak at the Democratic Convention in Denver -- to support Barack Obama , but also to make sure, as I said, that we will break the old gridlock and guarantee that every American...will have decent, quality health care as a fundamental right and not just a privilege." Is he a driving force in this debate that will prevail, in the end?

SEN. McCONNELL: Well, we all love Ted Kennedy and we wish him well and hope for his recovery. But we don't necessarily agree that his particular prescription is going to bring about quality health care for Americans , for all Americans . We'd all like to do that. The problem is the direction in which the Democratic majority seems to want to go and the president wants to go would basically put the government in charge of our health care . We've had an experience with that already with government -run automobile companies. Ford Motor Company makes automobiles in my hometown. The CEO called me up recently and he said, "We're doing reasonably well compared to everybody else in this recession. People appreciate the fact that we haven't taken any money from the government . But we've got a problem . The government now runs the finance companies of GM and Chrysler . And since they're running the finance companies, they're undercutting us on the financing of our automobiles." Sound familiar? When Secretary Sebelius says that there will be more competition if you have a government -run insurance company , there will be no competition. The government will, with the backstop of the taxpayers, undercut the 1300 or so health insurance companies we have. We won't have any competition at all. Pretty soon the doctors and the hospitals will all be working for the government . And the notion that this'll be cheaper, I'm reminded of what the humorist P.J. O'Rourke said:"If you think that health care is expensive now, wait till it's free."

MR. GREGORY: Although it's pretty expensive now.

SEN. McCONNELL: It is.

MR. GREGORY: And there are issues like rationing the, the Republicans bring up that goes on now, when private insurance companies say you can't have certain things covered. That already exists.

SEN. McCONNELL: Yeah. Not like it would if you had a government plan. I had a friend of mine in Florida who called up recently and said he'd just lost a friend of his in Canada because the government decided he was too old for a certain kind of procedure, and apparently he didn't have the money or the ability to get down to the United States for quality health care . I don't think that's the direction the American people want us to go, David .

MR. GREGORY: Final point on this, and that's political tactics here.

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: This is what the Washington Post reported Saturday: "[The] main goal [of Republicans ] is to slow down the pace of legislation in Congress in the hope of fomenting wider opposition. `If we're able to stop Obama on this, it will be his Waterloo ,' Senator Jim DeMint said during a conference call with conservative activists. `It will break him.'" Is this constructive opposition?

SEN. McCONNELL: Look, my goal is not to stop the president, my goal is to get the right kind of health care for America . And the direction in which the president and the majority in the House and Senate want to take this is the wrong direction. What we hope to do is to have enough time here for people to truly understand what's going on. As you know, David , they're having a hard time -- our Democratic friends are having a hard time selling this to their own members, a very difficult time, because it's a flawed approach and the wrong direction in which to go.

MR. GREGORY: Let me move on to the economy .

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: You have said that the stimulus plan was a failure. Critics on the left have said it's simply too small, there needs to be more stimulus .

SEN. McCONNELL: Mm-hmm.

MR. GREGORY: Paul Krugman , columnist for The New York Times , liberal economist, wrote this on July 9th :"Policymakers should stay calm in the face of disappointing early results, recognizing that the plan will take time to deliver its full benefit. But they should also be prepared to add to the stimulus now that it's clear that the first round wasn't big enough. ... Republicans -- and some Democrats -- have treated any bad news as evidence of failure, rather than as a reason to make the policy stronger."

SEN. McCONNELL: We've got an old saying down home that there's no education in the second kick of a mule. We've seen what happened with the first stimulus . The president said "Rush and spend it, pass it, we'll, we'll hold unemployment to 8 percent," which now pretty clear we're going to 10. In my state it's almost 11. By any measurable index, the stimulus package has been a failure.

MR. GREGORY: Mm-hmm.

SEN. McCONNELL: And we are adding, as I indicated earlier, dramatic amounts of money to the deficit . We're spending, David , $100 million a day in interest on the stimulus that we passed back in January -- February. The rush and spend was what they told us; pass it and we'll hold unemployment to 8 percent. By any objective standard, this has been a failure.

MR. GREGORY: You have announced that you will oppose Judge Sonia Sotomayor for the Supreme Court . Why?

SEN. McCONNELL: I think her personal story is remarkable. I myself am married to an immigrant who came to this country not speaking a word of English and who ended up in the president's Cabinet . I'm a big fan of her career, the way she rose from humble beginnings and went to fine schools and had a, a marvelous career. The -- but the problem is, as the president himself indicated in opposing Justice Roberts and Justice Alito , both of whom he opposed, and he filibustered Justice Alito , we're looking for judges here who're going to be, as Chief Justice Roberts said, an umpire, call the balls and strikes. And what I worry about with regard to Judge Sotomayor is that her personal views, which she's expressed quite frequently, lead me to believe that she's -- lacks the objectivity that you would prefer to have in a member of the Supreme Court . And by the way, there's no appeal from the Supreme Court . It, it's the last word.

MR. GREGORY: Do you see anything stopping her confirmation?

SEN. McCONNELL: Oh, I'm not going to predict the outcome. I, I'm, I'm just...

MR. GREGORY: But there will be Republican support .

SEN. McCONNELL: There, there were three Republicans announce their support Friday. As I said, she's, she's an outstanding individual and should be commended for her lifetime of public service .

MR. GREGORY: Before you go, it's been a disturbing development overnight, a U.S. soldier captured by the Taliban and they've made a videotape showing him speaking about the hardships of the war. What's troubling, as you see this at a time of ramped-up commitment of troops to Afghanistan ? What's troubling to you about seeing, seeing that video at this point?

SEN. McCONNELL: Oh, I'm sorry, I thought you were going to show it.

MR. GREGORY: No.

SEN. McCONNELL: The, the president's doing the right thing in both Iraq and Afghanistan . It's regretful that this soldier has been captured, but it illustrates, again, the nature of the enemy, that they would try to coerce an American soldier into saying bad things about his country or to, or to suggest that we ought to stop the effort in Afghanistan . The president, in my view -- I want to -- happy to say something nice about him here, something supportive. I think he's done the right thing in both Iraq and Afghanistan . He's recognized that being on offense in both those countries has kept us safe. And it's just regretful that this soldier has been captured.

MR. GREGORY: Senator McConnell , thank you very much for being here this morning.

SEN. McCONNELL: Thank you.

MR. GREGORY: And up next, a crucial moment for the Obama administration on both health care and the economy . Our political roundtable weighs in: Paul Gigot , John Harwood , Richard Wolffe and Michele Norris . Plus, our MEET THE PRESS Minute , remembering Walter Cronkite , after this brief station break.

MR. GREGORY: And we're back now with our roundtable: Paul Gigot and Richard Wolffe , Michele Norris and John Harwood . Welcome to all of you.

All right, tomorrow marks six months in office for President Obama . John Harwood , this is do or die time, as I've been saying, on healthcare reform . And to me the biggest issue, and you heard it addressed with Secretary Sebelius , is whether or not the number one goal of containing costs over time will be achieved. The CBO said this week, Congressional Budget Office , said not with the plans you've got in Congress so far. How can the president stand behind these plans?

MR. JOHN HARWOOD: Well, I think you're going to see some adjustment in the plan. You already saw, since Doug Elmendorf spoke on the Hill , a ramped-up effort to get this MedPAC idea, an independent commission that would say no to some of the spending that's now taking place in the system . And I think you've got a live conversation ongoing within the administration , within the -- between the two parties on Capitol Hill about whether, in fact, you ultimately finance part of this package by taxing health benefits , which is one proposal that would both raise revenue and could bend the cost curve . Health economists agree on that.

MR. GREGORY: Hm.

MR. HARWOOD: It's very politically touchy. Labor unions are against it. Are the Democrats going to go there and try to strike a deal with Republicans ? We don't know yet.

MR. GREGORY: We know, for one thing, that the president's in campaign mode. He was campaigning this week for Governor Corzine in New Jersey , who's got a tough race for re- election there this year; also campaigning for health care . This is what he said.

(Videotape, Thursday)

PRES. OBAMA: We have talked and talked and talked about fixing health care for decades, and we have finally reached a point where inaction is no longer an option, where the choice to defer reform is nothing more than a decision to defend the status quo . And I will not defend the status quo . We are going to change healthcare reform .

MR. GREGORY: So, Paul Gigot , is he a president who has, has got the reigns here, or does he appear defensive?

MR. PAUL GIGOT: Oh, well, he's still popular, but he is in a rush to get this done in August for a couple of reasons. One, because his own -- the popularity of his own agenda is falling. He's personally more popular than his, than his agenda is, particularly on health care and the economy , and they're worried that if they don't pass this by August it's going to be more difficult in the fall because a lot more Democrats are going to see his approval rating fall, particularly if unemployment rises. It's now 9.5 percent, it's probably going to get to 10. More and more Democrats are going to get jittery about the 2010 elections. And they're also worried about this House bill...

MR. GREGORY: Right.

MR. GIGOT: ...which has enormous tax increases in it. And if that hangs out there in August, it's going to be a real opportunity for a lot of people.

MR. GREGORY: You wrote about that this week on the editorial page of the Wall Street Journal , highest tax rates...

MR. GIGOT: Higher than France if you combine state and federal.

MR. GREGORY: Right.

MR. GIGOT: Higher than France , higher than all but three European countries , top marginal income tax rate, upper 50. That's very dangerous for the economy at this time, and a lot of Democrats are nervous about it.

MR. GREGORY: Right. Because it's not just Republicans .

MS. MICHELE NORRIS: Right.

MR. GREGORY: I mean, you heard Senator McConnell . Obviously, Republicans aren't going anywhere, which is another problem in terms of getting bipartisan support , if there's going to be any Republican support . But it's Democrats who look at this and say, "Hey, we're in the middle of a recession, we've got to go campaign next year. Should we be raising taxes to this extent?"

MS. NORRIS: That's one of the things that has been so interesting about this is the president is having a hard time selling this plan to members of his own party. I thought it was really interesting to see him just on that clip now and hear the Barack Obama that we heard on the campaign trail. I mean, you know, he usually sounds much more measured right now. But it's a little bit -- if you're following this, he's sort of all over the place right now. He's talking about health care , but he's also doing all kinds of other things. And so the message is, is, you know, people make the, the legitimate criticism that he's not putting as much into this as perhaps he could. And with all the horse trading going on on the Hill right now...

MR. GREGORY: Right.

MS. NORRIS: ...the, the danger is that when you see this kind of last-minute horse trading , arm twisting going on, it usually makes legislation worse instead of better.

MR. GREGORY: You know...

MS. NORRIS: We saw that with the, with the climate change bill.

MR. GREGORY: Richard Wolffe , take this on. I mean, the conventional wisdom here is that he's on the ropes here on health care . Is that overstated?

MR. RICHARD WOLFFE: No, I think it's a challenge. And the longer it goes on -- Paul is right not about the polls, but about delay has always killed health care . So the longer this delays, the worse his authority gets. But he is going to try and step this up now.

MR. GREGORY: Right.

MR. WOLFFE: Can he get -- do it just by being in campaign mode? The answer is no. He has to give Democrats the tools to go sell this program. He has to do some arm twisting. He has to be like LBJ here and get involved, especially with his own Democrats . And while this is a debate about tax and spend and budget curves, while he's being conventional, he's going to struggle. He has to go out and say this is about gimmicky politics. He's the outsider. He's the authentic voice.

MR. GREGORY: Right.

MR. WOLFFE: And people are paying more and getting less. If he puts it on those terms, he has a path. Right now he's not on that path.

MS. NORRIS:

MR. GIGOT:

MR. GREGORY: You're shake, you're shake...

MR. HARWOOD: ...does he meet his own test? In -- he's put out the test that cost control is the first principle. He knows that's a more popular thing to talk about, he's also for it. But if you -- if his own bill, if the Democrats ' own bill doesn't meet his test, how does he go vigorously sell it and make it work?

MR. WOLFFE: The test becomes about what is affordable. You know, in the campaign they realized that health care wasn't its own issue, it was an economic pocketbook issue. So while they're talking about budgets or the uninsured -- they don't talk about the uninsured anymore, they don't really talk about universal coverage at all -- they need to make this about what people can afford and what they're getting for health care . Anything else, while it's the Beltway discussion, is going to kill it.

MS. NORRIS: But outside of the Beltway there's an interesting data point here that people involved in the process talk about, the fact that some 90 percent of the people who voted actually have health insurance and three-quarters of them are satisfied with what they got. And there's different ways of looking at that. And one way to look at that is to say that perhaps there is not the public mandate for this that would dictate this sort of rush to legislation, and that's going to make it harder to make that point and sell that when they, when they....

MR. GIGOT: I agree with that. But he's making the same mistake that he made on the stimulus . And he got away with it on the stimulus because it was first bill and it was early and the economy was in bad shape. But he's governing from the left. He's turned over. He's subcontracted out a lot of his agenda to the committee chairmen, predominantly liberals, on Capitol Hill , and they're driving this from the, from the left. That's why you see these, these extraordinary cost and these extraordinary taxes. There is a better way to govern through the center out, the way Bill Clinton did on welfare reform , where he could get Republicans pass tax credits to help the uninsured, get those Republican votes, deal with the tax exclusion that John McCain suggested in the campaign , that John just talked about. But he won't do that because he knows that will upset his political left .

MR. GREGORY: Let's, let's add the economy into this. And again, all about jobs. This week a remarkable figure, the deficit topped a trillion dollars for the year. And looking at unemployment, the idea of the long, hard slog here, The New York Times did an analysis, going inside the numbers. Beyond the unemployment late, if you factor in people who are working part-time who want to work full-time or those who are, who are not now looking for a job, look at those states where unemployment gets us into the high double digits here.

John , if you combine the economy and health care , this is about Obama performance. If he doesn't, if he doesn't get health care , if he doesn't change the dynamic on the economy , this is the blueprint for a Republican opposition to him in 2010 .

MR. HARWOOD: Yes. And this is the issue on which the timing gets very, very tough for Barack Obama. Even if you do everything right on the economy -- and the administration would not concede Paul 's point that they made the mistake on the stimulus -- even if that's working and the economy 's in the process of returning to positive GDP growth , unemployment, by their own estimation, is going to continue to rise in the top 10 percent. How do you get the public to accept that this is going to work in the long run when they're seeing these scary numbers and, and seeing in some states , like Michigan , where unemployment's 15 percent? And that's why Senator McConnell 's argument that he made with you is pretty powerful. Look at this size of this deficit , over a trillion dollars, and now here comes health care . If you look at the polls, the issue of spending and the deficit are where the administration 's most vulnerable.

MR. GREGORY: Well, doesn't that get to the point which is, why do all of this right now?

MR. WOLFFE: Well, I don't think they've got a whole lot of choice here. I mean, the economy was falling off a cliff and they, you know, some White House officials told me...

MR. GREGORY: Vice President Biden didn't want it -- didn't think it was a good idea to go for healthcare reform right now.

MR. WOLFFE: Right. But, well, the question is whether health care can be this pocketbook economic issue.

MR. GREGORY: Yeah.

MR. WOLFFE: But interesting, John raised Michigan , OK? There -- the White House has just done some polling in Michigan . Their internal polls show the president's numbers holding up really well in Michigan . He's above 60 percent with independents, who are supposed to have left him. Now, how can that be? What is this guy doing right now? The answer for the White House is he's looking like he's doing everything. And as long as he's doing that, people give him a pass because they know the economy wasn't his doing. On the other hand, how long are they going to be patient? And the question is, as they go into 2010 , unemployment, according to the Fed, is still going to be above 9 percent or thereabouts. That's a very tough situation.

MR. GIGOT: And, David , the uncertainty of the Obama agenda hangs over the economy , because you're talking about rearranging 18 percent of GDP with health care . You're talking about the uncertainty of a huge cap and trade tax on energy. You're talking about what are union rules going to be like? All of that reduces the risk taking, the, the borrowing and lending that we need in this economy to really get it fired again.

MR. GREGORY: All right, we talk about health care , we talk about the economy , it just leads you to start thinking about the campaign and opposition from Hillary Clinton , and then all of the questions about the secretary of state, who is now in India . She's sort of off the injured list here and her elbow's in better shape, and so she was in India on a diplomatic mission over this weekend. This is what the AP wrote on Wednesday about Hillary Clinton falling off center stage :"Eclipsed by a globe-trotting president, a foreign policy -savvy vice president, a bevy of special envoys, Secretary of State Hillary Rodham Clinton is struggling to re-emerge this week as the Obama administration 's diplomatic heavyweight. Clinton is trying to retake center stage as the top foreign policy force of the U.S. government after four frustrating low-profile weeks during which a fractured elbow forced her to cancel two overseas trips. Her diminishing presence abroad and at home, followed by her starling public criticism of the White House this week for delaying a major State Department appointment, has prompted a flurry of speculation whether her influence is waning inside President Barack Obama 's Cabinet ."

The counterpoint to that, Michele , people saying she has been quieter but a huge force on foreign policy .

MS. NORRIS: I think too much, perhaps, is made of this continuing Obama vs. Clinton narrative. I mean, when, people suggesting that she's not taking center stage , she's a secretary of state. The secretary of state generally does not take center stage . The president normally takes center stage . I think what you see with Hillary Clinton in India is a very savvy politician with the agenda that she set out: meeting first with the business leaders, the symbolic things that she's doing, staying in the hotel that was the site of the, the horrible situation there in Mumbai and also, at the same time, applying pressure in Pakistan . I think what you see there is a very smart politician, and I think too much is made of the fact that she's below the radar.

MR. GREGORY: Richard ...

MR. HARWOOD: You tell me, David , how does somebody retake center stage when they work for Barack Obama ?

MS. NORRIS: Yeah.

MR. GREGORY: Right....

MR. HARWOOD: As, as, as present and visible he is around the world . And so much of what has been important so far in the Obama foreign policy is his attempt to repair America 's relationship with the rest of the world . I think where Hillary Clinton 's influence is likely to be felt is in that tough bargaining as we move forward with Iran , for example...

MR. GREGORY: Mm-hmm.

MR. HARWOOD: ...on curtailing the nuclear program .

MR. GREGORY: Also, Richard , Peggy Noonan suggests on, on the op-ed page of the Wall Street Journal that she's, she's waiting.

MR. WOLFFE: Oh, yeah.

MR. GREGORY: She knows how to wait. If there are excesses in this administration , if there are mistakes, she will be there as a Democratic alternative .

MR. WOLFFE: Yeah. And I don't think anyone doubts that the Clintons have a bigger strategy in mind. But all the reports from inside the White House that I hear say the principals respect each other enormously.

MR. GREGORY: Yeah.

MR. WOLFFE: There is still a lot of rancor and petty rivalry between the staff on both sides, both sides, and they end up arguing about the ambassador to Liechtenstein and who spoke when, and it really is small fry when there are big things to do...

MR. GREGORY: Right.

MR. WOLFFE: ...like terrorism, global warming . This is her agenda, and it's a big one, but she isn't president.

MR. GREGORY: All right. I want to end here, we just got a couple minutes left, on more of a personal note here. I had a great honor this week, I took my son to the All-Star Game in St. Louis. We had a terrific time. And I thought baseball did something really great, and we have some video of it. Before the game they had the All-Stars Among Us , people who engage in community service , who are giving to other people. They lined up there, all the presidents' taped messages, and then look at this: all the players descended on them during a round of applause to shake their hand and pay tribute to them. And, you know, as a dad sitting in the stands I thought, you know what, I love -- this is what's wholesome about baseball.

And it's a lot easier, Paul , than having to answer my, my son's questions about who has taken steroids and who hasn't. That's tough.

MR. GIGOT: No, it was a great moment for, for, for professional sports and it, you know, it gives the lie to the fact that what we sometimes think, which is that all of these athletes are