this woman burned down the apartment building in dallas. we on it. watch this man in the circle. he walks across the hotel lobby, a deadly explosion and then smoke. what clues are revealed by this. they are up in arms in iran. a former president is juicing the anger. will the president have to break a campaign promise? >> the president is not helping us. >> that's a democrat saying that. why did it take 40 years for us to see this original apollo moon walk? something fishy here? just asking for your national conversation for friday, july 17th, 2009. hello, again, everybody. i'm rick sanchez with the next generation of news. as we say, this is a conversation, not a speech. it is your turn to get involved. there is a scramble going on

right now. i don't know if you have heard. we have just picked up some information out of washington in the last half hour. the president of the united states has just announced he is going to give an impromptu news conference from the diplomatic room in the white house. the reason he is doing this is there is trouble in d.c. city, trouble that has to do with health care. as a matter of fact, even some democrats have now, we understand, gone to the president and said, mr. president, we may have to slow this thing down. we may be losing some votes. why is the president losing votes? because there is a cbo report that just came out. this cbo report seems to indicate that the president is going to have some problems, because selling this to the american people just got even more difficult. why? because apparently this health plan is going to be more expensive for you as a taxpayer. that's the overview. i am trying to be as transparent as i possibly can so we can set you up before you get the information. so the bottom line is the president is going to come out in just a little bit and he is going to address you using cnn

as a conduit to talk to you to give you his version of why he thinks we still need to get this thing done and he wants to get it done by august, by august. that's next month. we are going to be all over this one. when the president comes out in the next 14 minutes, you will give him a good hearing, i'm sure and we will have some of our own experts to talk about it. first, another big story we are following. one potential scenario na police are working on. you have to look at this video. let's watch it together. look at this man. see him right there. he is walking through the hotel lobby following into that area where it seems like the elevators are. he disappears into the archway and then, bam. let's do this again if we possibly can. that's a huge explosion. the explosion that's apartly happened in jakarta. not apparently. it did happen. it is massive. that's why police are looking at this guy right here. let me read you what i just received. this is from lawyers for the police there.

i am going to read you the quote as we watch it this. we are suspecting the man in the footage, say police, because the time frame matches with the time of the bombing. it is obviously too premature to confirm right now exactly what happened. we are waiting for lab results. it is an amazing piece of video that obviously is going to be very studied as is this. look at these pictures taken from across that field. we are going to watch it again as well. these are what police are hoping will fill some of the holes of this investigation in jakarta. they were twin explosions at two american-owned hotels. keywords, american-owned. first at the jw marriott. that's what you are looking at right there. seconds later at the very swank ritz-carlton. acts of terrorism according to the indonesian president. i want you to watch this. this is exclusive cnn footage as

well. there, you see the two hotels as mayhem begins to break out. at least eight are dead, including eight americans. i want to read this quote to you from the man who used to live at the ritz. it's obviously targeting establishments where there are westerners. it is someone trying to send a message, no doubt, to westerners. stay with me. i promise to show you some of that surveillance tape again and again. i certainly think it is worth for investigators to look at see if there are any clues that may reveal what this organization or alleged org zation may have been trying to do. no claim of responsibility. efrp is looking at that well-known islamic group linked to al qaeda. they are not like al qaeda but

as bad as al qaeda. members of the group committed to a 2002 bombing in indonesia killing 202 people. there are indications the bombers had checked in as guests in the marriott, the same as occurred last november in the attacks in mumbai. an assistant director from fbi, former fbi assistant director is good enough to join us, tom puentes. why do we believe that this same terrorist organization is involved in this particular bombing, only less than 24 hours after this happened? what's the clue? >> the most recent clue is information i just received a few minutes ago from sources in jakarta, that the bomb that was diffused on the 18th floor, marriott hotel room, is made in the same fashion, same type of explosive and container and

wiring as in all of the other previous jemaah islamihay bombings. >> we get talking about stuff that they maybe don't understand. bombs, as i know and obviously you do too, have signatures. in other words, every time a bomb goes off, guys like you can go in there and say, we can tell by the way this is put together that it has the significant of a specific group of terrorists. you are saying the signature of what's left of this bomb reveals that they are, in fact, tied to this organization? >> right. that's correct, rick. the main point with this is that if you are a chef, you get points for creativity in making a new recipe. if you are a bombmaker, you don't want to be creative. if you were successful the first time, you follow that to the letter, because you want it to work out the same way every time. that's how law enforcement from around the world can piece together later the signature of which school of bomb making that

particular bomb came from. the police in indonesia have done an exceptional job not just in section with investigations of the prior bombings but in disrupting a number of plots, three different plots in the last year and a half where they have arrested a number of subjects and seized weapons and explosives and bomb components and those components match almost identically to what they found. they can immediately analyze how it is put totgether. >> do you think that guy with the suitcase may have something to do with this? >> he may. they will be able to determine whether the explosives were inside that. >> rod, you got that shot. see if you got that black and white again. it's actually not black and white. look at the guy. he is walking in, looks so

nonchalant. he looks like a westerner himself. >> he does. he could be an innocent bystander. he goes into that dark shadow area, at least on the monitor i am looking at. he goes into a shadowed area and another bomber or the explosives could have been planted in that area and he is an innocent victim or he could have had explosives in a backpack under his suit. that will be able to be determined when they do the analysis on his body parts. they will be able to determine whether the explosives came from inside that roller board or the outside. >> it is amazing you would say his body parts. >> do you happen to have a map of that region around indonesia? as americans, we don't know a whole heck of a lot about indonesia. we have certainly heard of jakarta and that region. i am wondering, why is it so significant to us? how populated is it?

how many people who could possibly be like this organization could live there and what's their beef? >> well, there could be hundreds. there could be thousands. indonesia is the fourth largest population country in the world. the largest muslim population, exceeding the combined total of the middle east, africa and europe. you have about 2,500 islands generally uninhabited in jungle areas. you have fertile ground for recruiting young men to become suicide bombers to join this organization and then you have so many available outlying islands where they can train and not even be discovered by law enforcement. it is a very difficult challenge for the indonesia national police. >> it is an interesting combination. the place is dangerous through terrorism acts and paradise, considered one of the most beautiful places in the world to vacation. that's why so many westerners go

there who sometimes become tan ta looizing targets. >> these extremists do not want democracy. they want to impose their brand of law. they do not like the fact that the indonesian country is so secular and democratic. >> tom, as usual, you are the best. you fill us in with new information. you make phone calls. you are connected and we appreciate it. the american people appreciate the information your able to share with us on this. my thanks to you, sir. >> thank you, rick. good to be with you. >> if a woman is able to conceive and have a child, she is an adult. she could be married. we don't do that at our church, we never have. >> it is bible. i have a right to preach the gospel, don't i? okay. >> this is one of the most amazing interviews that you will ever hear on network television with a man who just today we are hearing may have married an

eight-year-old. the girl who is 18 now, by the way, has come forward in court. it happened today. we will show you the interview that i did with him where he insults me left and right, by the way. also, the recent coup in honduras has us thinking that history could be repeating itself in latin america. we as americans need to know about what's going on down south of the border. this by the way from a man who handled latin american for mr. reagan and mr. bush. otto reich is going to join me right here. we are waiting comments from president obama on health care. we will hear with a republican congressman as well who has his own ideas on how to fix this. there is no doubt, all the information i am getting from our political guys back here who spend the whole day on the phone, is that the while house is scrambling. that's why the president is calling this news conference he wants you to watch in about five minutes.

welcome back. i'm rick sanchez. the president of the united states will be speaking in a minute. he is scrambling on something that isn't looking real good for him, the health care plan. criticism from republicans and now democrats because of the cbo

report. you know about all of that. so, when the president comes out, you will get to hear from him right here on cnn. do you realize that history is trying to repeat itself down in central and south america. this is all going to make sense for you. this is a story i have been following for quite some time because it is important. let me take you back to the late 1950s. fidel castro, kicked out of cuba, returns to cuba. there he is. he lands in santiago and begins a revolution against the government. he was barrel even taken serious by the way when he was doing this by the united states and the rest of the world. guess what? they should have taken him serious. the rest is history. fast forward 50 years, castro still in power and another leader may be trying to follow that model. that's man well zelaya. he might be arrested by the

people who took over honduras last month in a coup and today a spokesperson for the ousted president zelaya says he intends to return and set up an alternative government and fight the new leadership. wow, that does sound familiar. its our segment we call connection. there is nobody else better to call on than the guy you are about to meet right here. he can better explain what is happening in honduras than anybody else. he is a former white house insider for president reagan and bush one. he has had a hand in u.s. policies for decades. you know, otto, good to see you, sir. >> nice to see you, rick. >> mr. ambassador, i should probably remind our viewers that fidel castro is blaming you for the coup and everything that has gone on in honduras. what do you have to say to mr.

castro? here is your chance to answer him. >> well, mr. castro is used to obviously not telling the truth. he must know that obviously i had nothing to do with the coup in honduras. if he doesn't, he is ignorant or lying. >> let me show you the people that have been protesting passionately for ousted president zoo lie gentleman li . if you watch these protests, as a result of that, should micheletti, the guy in power on an interim basis, step aside and figure out a way to let zelaya back in so that if he is removed, he is removed legally? >> well, rick, first, zelaya did become a populous president but

not a popular president. that's not the important point in the removal. his removal from power, even if he had been terribly unpopular and had been removed illegally, that still would have been a coup. no less an authority on honduras than the archbishop of honduras said today. to call this a coup, it is absurd. it was not a coup. the supreme court of honduras voted 15-0, u nan mustily to declare zelaya to have violated the constitution and to be no longer president of hon do yodu >> he was trying to pull a fast one. back to the issue of whether this was a coup or not. we at cnn have been arguing this amongst ourselves an awful lot. we are used to seeing a president removed through congress, flew an impeachment or a process.

maybe that's the process they use down there. the supreme court says, you are out, you are out. >> they don't have an impeachment process in their constitution. it says they have an article, article 239 that says if a hyo figures such as the president violates the constitution, he is automatically removed from office. he automatically removes himself from office. it is self-activating as a lawyer said at a hearing we had last week. i testified before the house foreign affairs committee. one of the members of congress who is a lawyer says this is a self-activating clause of the honduran constitution. in effect, as the honduran congress then ratified by a nearly unanimous vote the next day, including, by the way, almost all the members of zelaya's own party, so he was no longer the president. >> you make a great point, probably a point that needs to be made on network television and in the media in general. it's a point that has obviously been overlooked.

that's why we have you on the show. >> thank you. >> i want to broaden the discussion a little more. do you worry about what's going on in latin america with guys like zelaya for example? do we have that map? let's talk about countries that have either gone left, have gone and come out of being on the left or are tilting in that direction, countries like argentina, countries like ni nicaragua. all of these places continue to be places where the united states needs to somehow get boosted itself, doesn't it? >> rick, i do worry. i worry about the toe tall tearian or the authoritarian left such as in cuba, venezuela, ecuador, increasing in nicaragua. i don't worry about the democratic left in chile,

brazil, uruguay and other distinctions. >> make the distinction for us. >> there is a group of countries that have aligned themselves into something called alba, the alliance of bolivarian alternative would be the english translation. >> chavez' group? >> exactly. castro dreamed it up. chavez is financing it. these are the countries that are encouraging the presidents who are elected democratically to once in office violate or change their rules and stay in power indefinitely. >> that's a problem. >> these are not democrats. they were sleblthed democratically. they are not behaving democratically. >> i thank you for drawing out that distinction for us as well as you have. otto reich, our guest today. thank you. we understand the president is ready to come out now. it is 3:21.

we are told he is going to be coming out at 3:20. that's a live picture of the white house. i think it's the diplomatic room where he is going to be speaking from. again rs l again, let me set this up for you. why is this an important speech? this is a little bit of a scramble for the white house, because they have been getting bad news in the last 24 hours, bad news from the cbo reports, bad news from republicans and fellow democrats who are telling him, mr. president, you have to slow this thing down. will he slow it down or is he going to head full tilt toward the august deadline he set for himself?

look at all these tweets we

are getting. latin america, it is not that far away but it seems that far away. go to the top with maria in new york city. she says, thank you for bringing out the truth about the real situation in honduras. under that, we see hugo chavez is like a castro want to be. >> we have heard that before. we learned 15 minutes before our newscast we were going to be doing something different. we were planning to talk about health care reform anyway. suddenly, president obama has a very big problem on his hands. guess what? a short time ago, we did get the word the president is going to be coming out and trying to explain this in his own words, the situation with health care, scrambling as we have been putting it. let me try and set the stage for you. i will be joined by dana bash in washington and sanjay gupta will be joining us as well.

over and over again, barack obama has told us that rising health care cost is a long-term threat to our nation, which means we need to revolution nooiz the health care system in some way. there is the press making his case. i'm sorry. i thought it was the actual picture. let me go on. good enough. the president said he is going to find a way to revolutionize things. while we are at it, says the president. we are also going to assume the health care cost of the 45 million americans who have no insurance. let's see. we drive down the total cost of health coverage while addings millions of people to the rolls of the insured. that sounds counterintuitive. can you possibly do both things at once? therein lies part of what is being considered the bad news. this is a cbo report that i was telling you about that came out earlier, the cbo report is the report given to congress. ready? what it says, according to the information we received, six key

senators, three democrats, one independent and two moderates are saying because of that cdo report, congress should slow down. that's important. let's bring in sanjay gupta if we possibly can. sanjay, are you there? >> dana bash is with us as well. >> hi, rick. >> dana, let me ask you, what's going on with the situation? is he getting a lot of heat from members of his own party saying, it doesn't look like we will be able to get this thing done. >> reporter: he is getting pushback from a lot of members of his own party saying they want to get it done but they want to get it done from their perspective the right way. when you look at the details of what everybody is talking about, they are all talking about having the same goals. primary goal that is really at risk here, if you will, is one of the things you just talked about, rick, which is what president obama calls bending the cost curve, meaning keeping the medical costs down. we have all talked for years about the fact that people go bankrupt because of high medical

costs. that is a main, main goal, not just covering almost all americans but controlling medical costs. that is why what the cbo director testified yesterday was so damaging. it was a bombshell, what one democratic congressman called it. the democratic plans, they are not going to achieve that goal. that is what is causing this major stir here on capitol hill. that's what the president is trying to stop. >> sanjay, make this make sense to those of us who aren't doctors and aren't in the health profession but we are taxpayers and we are wondering whether these 47 million people who don't have insurance in this country are simply going to have to be did shall-whether guys like you and me are going to have to foot the bill for them and swallow that bitter pill? >> i think what dana said is right. it is hard to imagine a sin nar yo where you can cover so many more people and not have it cost money.

if the populous becomes healthier as a whole because health care is better and more prevention is instilled into health care so people are not getting sick in the first place, ultimately, it will start to lower costs. by the way, if you read through the entire report it says long-term projections are impossible to project, predict. it is hard to know how much prevention is going to actually save in terms of dollars in the long-run. how much money do we save with a healthier rick sanchez than a sick rick sanchez? >> what's to say that this system doesn't help us in a preventative way but the one we will put in will be able to do that? you know where i am getting at there? >> a lot of people say the system we are currently in, not only does it not insensitive advise wellness and prevention,

it dissensitive advises it. it still gets to the question, does it save money in the long run? how much does it save? is it enough to offset some of the costs the president is talking about? >> what i hear you saying is if the system is only based on profit, which is what it is right now, then it is profitable for people who make money on people being sick for people to be sick. >> that is a lot of what people have krit soocriticized the hea system is. you pay for the cardiac surgery as popposed to helping people from having heart disease in the first place. we don't pay for nutritionist. but they will pay tens of thousands of dollars for bypass

operation. people who need the surgery should get it but are there ways that can save money, keep people healthier. >> that's tough. that's where we are going to bring dana bash into the conversation. how do you sell something to the american people who may not be good for them now but may be good down the road? this is the same with the energy policy. i can't see that as being anything but a loser. dana is going to help ush bit. stay with us. we'll be right wack. you know why i sell tools? tools are uncomplicated? nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. come on. how about...a handshake.

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we just learned that the american medical association is supporting the overhaul we have been talking about. before we do anything else, i want to bring dana bash into the conversation as we await for the president to come out and address this scramble they are going through today on the health care system or the health care plan. i want you to listen to max baucus and what he had to say, a fellow democrat, about what is going on with the president of the united states and his plan. i don't know if he meant to say this but he did say it, nonetheless. let's hear it together. >> the president is not helping us. he does not want the exclusion. that's making it difficult.

>> dana bash, what do you make of this? was that the first sign earlier today that this thing was going either down in flames or creating a little bit of a problem, taking on water? >> i guess the best thing to do is translate into english. basically, what that was about was the fact that senator baucus is the chairman have the finance committee working day in and day out for weeks trying to come up with a plan that is paid for and will do all of the things everybody wants to do, primarily, bring down the costs that everybody is upset about it. the main way he was planning on doing this, saving $320 billion, they think, is by taxes some employer-based benefits, health care benefits. the president and max baucus' fellow democrats here on capitol hill, they don't want to do that. what he is talking about is saying the president is not helping, because he is not allowing max baucus and others

to tax these benefits, which he thinks and many people think is one of the key ways to address all of these cost issues. paying for the health care reform and also reducing -- there is frustration there. >> for him to say that is a real shot across the bough, isn't it? >> big-time. i was talking to one senate democratic aide about that and the testimony. he said it was a one-two punch and exactly what they did not need now. remember, what the white house started this week out doing, rick, is trying to get momentum, trying to get momentum to get this all completed in the house and senate. by the time congress leaves for august recess and the opposite has happened. as this week has ended. that's why you see the president coming out today and trying to turn things around. >> the cbo, by the way, for those of you listening to this conversation is the congressional budget office, who come up with how much something is going to cost or a cost analysis there after. let me bring sanjay gupta back

into the mix. we are waiting. any moment now, the president of the united states is going to come out and address the american people. he decided to do this only about half an hour, 45 minutes ago to be fair, when we got word from the white house that they were going to do this. it has to do with everything you have just been listening to in our conversation. some things have changed over the last 24 hours, still, the american medical association is behind changing our health care plan in some way. so says, in fact, sanjay gupta, who has been watching that part of the story. sanjay, why? >> well, this is maybe a little bit of a surprise to people who have been following this closely. the ama endorsing a couple of the house bills from a few of the committees that have come out. a lot of people were surprised because the ama has typically been conservative and they do have the public option shall the public exchange, which has been a contentious part of the entire debate regarding health care. what was interesting, when i read this, a couple things that came to my mind.

the ama really had a couple of things that they wanted toed address for a long time when it came to health care reform. one was tort reform, the idea of frivolous lawsuits. the other was something known as sgr, sustainable growth rate. in a nutshell, what that is is trying to figure out the way that medicare reemberses for certain procedures, office visits and things like that. how much do doctors get paid. to are a long time, it has been believed that the formula that medicare was using was flawed. in essence, the reimbursements weren't high enough. what i found interesting was that if you look at these bills coming out of committee, they agreed to repeal the fgr, in effect, possibly increasing the coffers of physicians overall in the next ten years. it was almost a little bit of a quid proquo going on there with regard to the specific endorsement. the ama says yes but they might get more money in return. >> i am curious. i want to get a break in. i want both of your answers to this. i think we are going to be

joined by some congressmen as well. a republican. who are we going to have, michael? let me know. congressman roy blunt is going to join us in a little bit. is there any explanation, dana bash, that the president is going to back off on this thing? i want you to think about this during the break. >> can i answer you now? >> you are saying no. >> no, no way. >> the history of this thing with bill and hillary clinton in the past was it just got too ugly, too much of a political hot potato and they walked away from it. is there a chance we are seeing the beginning of that this time? more on that when we come back, including our conversations with dana bash and sanjay gupta and congressman roy blunt. stay right there. we are expecting the president.

welcome back. i'm rick sanchez. i'm being joined by my colleagues, dana bash as well as sanjay gupta, bringing us up to date on something veneer and deer to his heart.

this health plan being proposed by this administration that he has been following as well. we're also going to be joined by representative roy blunt of missouri, republican, who has been following this situation as well. my thanks to all of you, by the way. dana, let me let you finish the point we were making a little while ago. is there any possibility that you think, before we go to the congressman. is there any possibility that the congressman is starting to show science that they might be backing off of this thing? >> i don't think there is any way he would back off since this is bar none his top priorities which he says is the underpinning of any kind of economic reform in addition to his perspective of being the right thing to do. however, what you are seeing in terms of the shift and the change is the president getting more involved. because what we have seen covering day in and day out here in congress is it has been congress and the democrats in

congress who have been krafting this with some broad guidelines. they have been krafting. he is getting more involved in the specifics. that is very, very crucial from the perspective of congressional democrats. they say, please, please rs get more involved. >> that's interesting you would say that. i have been hearing a lot of republicans pointing the finger, not at the president but at nancy pelosi and saying, you see, this is nancy pelosi's plan, not the president's plan. >> her ratings are a lot lower than the president's. >> do the math, baby. roy blunt is joining us now e is a congressman from missouri. he is good enough to talk to us now. congressman, thanks for being with us. i imagine the news that you are hearing that there is problems here in the city are ones you would have expected. let me start you somewhere else and ask you, okay, what would your plan be? >> actually, that's the interesting thing about this debate, i think, rick, is that everybody agrees on the top line issues. we believe, i believe, as the leader of our group on our side that's trying to bring our

committees together to work on this, i think we are in generally broad agreement. we need a plan that has -- we need a health care system that has access for everybody regardless of pre-existing conditions, one that has more competition, more choice in a way that would make it more affordable and one that ensures that people have the maximum opportunity to make their own choices about their doctor and their health care. so we agree on the goals and our biggest disagreements are how you get there and the biggest disagreement of how you get there is whether the government is going to run a plan that doesn't broaden competition. >> i will let you discussion this with my colleague, sanjay gupta. he seems to be suggesting and sanjay, i don't want to put words in your mouth. something in the middle may be the answer, right? if you do everything based on profit, as you suggest, congressman, that leaves you some holes as well. we all know if you let the government take care of it

themselves, that may leave some holes. sanjay, would you suggest a mixture of the two would be the way to go? >> there are several different issues at play here. a mixture of the two, people have suggested a public/private option. i am not sure if representative blunt is referring to that specifically or how he feels about the idea have o a public option much the public option would be, the way it has been presented, would be for people who cannot afford health care and need some sort of subsidy or other system in which they can purchase into to get their health care insurance. the concern, the critics will charge this. they will charge that a public option that has the backing of taxpayer dollars will be such a big competitor that we eventually sort of remove the private insurance industry all together. that won't be any kind of competition at all. >> let's hear from the congressman on that. what do you make of that, sir? >> i think you said a moment ago that i was for a system based on profit. i'm actually not. i'm for a system based on

competition, which is different than a system based on profit. >> aren't they the same? >> you want to have some profit but you don't want to have profit that the marketplace really shouldn't alalow. the current system grew up out of nowhere after world war ii without any thoughts of having maximum choices for people. medicare, part d, where everybody gets to look at their provider and decide if they still like that provider or not. back to sanjay's point. i think many of us could accept the idea that if at some point the competition we are confident would be there doesn't materialize and these new choices can't be developed, you visit this again. if you start out with a government competitor, nobody describes this as just a competitor for people who can't get insurance. the idea of the government competitor is to somehow make the marketplace more competitive. what happens is that government

competitor eventually drives all the other competitors away. a government competitor is like an elephant in a room full of mice. the fast mice get out of the room as quick as they can. the slow mice get crushed by the elephant. the only thing left in the room is the elephant. then, you have got-run health care which is what we don't want. we want more competition. we happen to think the government running a big health care operation is not the best place to give people lower prices with health care. >> that makes sense. we appreciate the analysis with the elephant. we understand that. what do you expect the president to come out and tell the american people in the next five minutes? >> i think he is going to try to explain these numbers that the congressional budget office came up with that really say this isn't just a trillion dollars over 10 years, it is actually $2 trillion over ten years, because the first five years, no money is spent. the second five years, you are spending almost $200 billion a year. that's not anywhere close to

being paid for by either tax increases that have been proposed in this bill or medicare cuts. surely, he will try to explain why both his own office of management and budget and the congressional budget office are wrong in saying this does nothing to slow down the spiraling health care costs. there were two goals supposedly here. one was to get people insured who aren't insured and two was to stop the spiraling health care cost and i don't think this program does either of those. it sure costs the american taxpayer and the american economy a lot of money. >> we were told the president was going to be coming out and speaking. pardon me. we were told at 3:15, the president was going to come ut o. it gave the appearance that the white house was scrambling to get the president's message out on this. we are more than a half hour, 37 minutes past the deadline when we expected him to speak. still, no signs of the

president. we will continue with this conversation to bring you the very latest information coming out of washington on what seems to be a developing story that we are still waiting to get the climax on. that's the president of the united states and what he has to say. that's next. stay with us. he financial advice you need? where will you find the stability and resources to keep you ahead of this rapidly evolving world? these are tough questions. that's why we brought together two of the most powerful names in the industry. introducing morgan stanley smith barney. here to rethink wealth management. here to answer... your questions. morgan stanley smith barney. a new wealth management firm with over 130 years of experience. naing onon ud r.

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we're expecting the president to come out any moment now. welcome back. i'm rick sanchez here at the world headquarters of cnn. let me be as transparent as i can with this. the reason we're following this story is because the president is obviously going to speak, but prior to that there was a report that was put out by the congressional budget office, the cbo, dana bash is still with us and will take us into the

significance of that report in a little bit, but this thing is going to cost more than we thought it was going to cost to begin with. and that's set off fireworks in washington. let's hear first of all, doug elmendorf, one of the directors of the cbo, let's hear what he had to say and then we'll bring in our guests. >> in the legislation that has been reported, we do not see the sort of fundamental changes that will be necessary to reduce the trajectory of federal health spending by a significant amount. >> dana bash, why has this set off such fireworks in washington, this statement from doug elmendorf of the cbo? >> reporter: it's actually, believe it or not, it's actually quite simple. it is because one of the president's top priorities in reforming health care, and democrats here too, and frankly, republicans as well, is to control the skyrocketing costs of health care for americans and for businesses. that is one of the key, key goals here. and what doug elmendorf

testified is that the plan now going through congress, the democratic plans, they will not do that. in fact, they will have the opposite effect. and you've already had some conservative democrats who serve in the house with mr. blunt, you've already had some conservative senators wringing those alarm bells prior to that cbo testimony. in the words of one conservative democrat i talked to earlier today, what the cbo director did is give them validation to say, wait a minute, mr. president, wait a minute, leadership. let's just -- what's the rush? let's slow this down. in fact, this is exactly what this letter that we got earlier today from six senators, bipartisan group of senators said. we listened to doug elmendorf, the director of the cdo, who we have to say is somebody who has enormous, enormous authority and power here. let's delay it. >> dr. sanjay gupta, let us assume that you were, in fact, the surgeon general of the united states, we know that you are not. you have decided to stay with us and become an analyst for us, as you are one of the best in the business, and the president came

to you and said, man, this report from the cbo is rough. i don't know quite what to do, but it's fourth down and we either go for it or we punt, what do you tell him? >> i'm not in the business of consulting on these issues, nor would the surgeon general be with the specifics of numbers. but having said that, rick, what is happening here to some degree is that medicine is as much of an art as it is a science. and to try to apply mof these scientific principles to the science of medicine is what the rub is, to some extent. how do you determine that some of the plans the president is proposing is going to save in the long-term. and it goes back to what we were talking about earlier, rick. how much money do you save to keep people healthy instead of letting them get stick. i think people agree you're going to save some, but how much, really? you don't really know. and even at the end of that cbo report, they said the long-term implications of some of these committee bills are really hard to predict. >> what about that? what about that, congressman blunt?

look, you know, i talk about that all the time. maybe it's just a bitter pill, to become a better nation in the future, we might have to take a little bit of a hit now? are you willing to go along with something like that or would your colleagues be willing to go along with something like that? >> so often the president says, we can either do nothing, or we can do my plan. and there are many more options between nothing and the plan that perhaps the president, the administration, or even this expensive plan that's being scored right now has. and we want to do that. we want to be sure that everybody has access to coverage. we're willing to do whatever it takes to get beyond the pre-existing conditions barrier. we want people to have more choices. cbo could be wrong. and they may be wrong on this, but even if they're wrong, $2 trillion, let's say they're wrong by half, $1 trillion means you have to cut medicare spending and medicaid spending according to the advocates by

$500 billion over ten years. you have to raise taxes by $600 billion over ten years. even if they're 50% -- even if they're 100% above what it's really going to cost, they would still be a big problem here. so we ought to work together to figure out how we get access for everybody into the system. and obviously, government's going to help with that. risk pools and other things can be put together. and there is a great desire to make this system work better for people. nobody wants to deny people help, nor does anybody want people to have to seek their medical care in the most expensive place possible, like the emergency room. >> it's interesting. we're getting a lot of tweets waiting for the president. mike bates, one of our regular viewers says, rick -- right there at the bottom, robert. we all know the one reason that could keep obama off the air. his teleprompter broke. that's a bit of a cheap shot but somewhat funny as well. and another one says, obama

being late caused rick to devote 30 minutes and counting to talking about him to fill time. coincidence? i think not. we're with our guests, congressman, dr. sanjay gupta, and dana bash and we'll be back in just a little bit and hopefully so will the president.

we are getting a ton of responses. welcome back. i'm rick sanchez. let's go to our twitter board. it says, i don't think the president should slow down on health care reform. he should keep on pushing congress to get this done. i think many people have lots of money to lose with new health care. we the little people, when the fast wasters lose. rick, do you think that president obama would put his own family in the government-run health insurance plan? never happen. and by the way, congressman roy blunt is with us, as is dr. sanjay gupta. dana bash is getting ready toot "the situation room" for us in our next hour. there are some people who want

to know, what's your plan? what's your personal insurance plan, health care plan, and does that factor into the equation for you? are you asking me that, rick? >> no, actually, people on the twitter board are asking you that. >> oh. it's interesting, one of the things, i think if we were going to have a plan that everybody could get into, why not let them into the federal employees plan. all last year the president was saying, people should have access to a plan like mine. he didn't make a couple of points, the fact that his plan, my plan, and every other federal employee's plan, you have lots of choices, whether you're the park ranger, a united states postal employee, or a united states senator, but there are lots of choices, some of them we pay quite a bit for. i think i have a blue cross/blue shield like plan, but i could have an hsa plan and not pay so much. that's the other thing. when you start