found out, he had a simple majority for two years, things change. if they don't strike while it's on the table it can be a different environment. the less it is we need to more bipartisan gestures at the adolescent is bipartisan gestures only go so far and you start getting bogged down and you end up having to cut to the chase. that's one theory of what happened about eight years ago, we will see what happens at this time around. on the other side of this rhetoric, having to run on those results and that has a disciplined force when you're firing real bullets. nevertheless, i do think that would be some real changes ahead in direction and emphasis am just never as much as people either fear or hope. what i'm going to have in that direction? more private, less public matters of degree. lighten the load in terms of regulation and mandates. a rearrangement but not essentially a reduction of the overall subsidies, and what goes with that is readjusting the

winners and losers. you reallocate the levels of decision-making more back to the states, more in the hands of consumers. nothing crazy. and then what else? new sets of over promises and developing new excuses. trouble starts, you restore to the three d's, more dollars are spent at the end of the day. they had to get moved in more creative ways and the other is delay which means it's going to get there eventually but not as fast as you can and get to adjust. and the key one is definition. you are going to get things said to be different than you were before. what you do to solve a problem is you invent new acronym and come up with another 90 that works for a good day in washington. there are some imperatives that have to be done. you have to pass something because the alternative is it's not very good. what you do is whatever you past you call repeal. it's just a matter of language even though it doesn't come out the same way. you have to develop some creative workarounds, all the

institutional factors. they will be posted by majority which has no other alternative to do it. you will have to recalibrate the incentive structure. the idea that it's going to be one side, what do you need is that it's going to work. it will be changed to render the same way they were browbeating in the last administration, that will happen when push comes to shove in terms of what keeps them on board because the alternative isn't that attractive. the problem is kind of this separation in time between some version of repeal and some version of replace. the goal is to compress that gap between the two. the real goal is to make it never happened but you can't do that politically. to bring them closer together when you make a compromise, emphasized this is all being done for this clear commitment to higher goals were in favor of. look at that and don't look at the ugly details inside and meander on down the way in trying to do that.

i come off as being so critical of the affordable care act. i like to give them credit. it's about -- let's talk about what we accomplished at a cheat and some failures but some great successes in the affordable care act. they were able to change legislation without legislating. good accomplishment. rounds of consulting and conferences such as this one. we appreciate that. didn't actually reduce cost but again shuffled them much more critically than we've done in the past. that's helping to build on in the future. set a new record for the longest opposition to make atomic program. seven use after it is passed with still fighting about it. that's pretty good. unable to shift all or most of the blame. that's the failure, and objective but didn't quite get it all there. substantial increasing enrollment and high deductible health plans plans, more than ay legislation ever did. we just put them into the exchanges. they didn't capture all the space and reconstructive unlike

general sherman. but goals always, along the way. nevertheless version substitute for claiming victory as majority which wants to remain a majority pixel as the assessor in texas, there is no back door to the alamosa there's no surrender. the problem is you need a lot more firepower to fight to the front door. some of my friends in the conservative community say we will repeal it anyway. in the background playing is at this theme song from m*a s*h, suicide is painless. i would just just point out both it may turn out to be a mutual suicide pact. thank you. [laughter] [applause] >> that was disturbingly upbeat. [laughter] spin why do you think he's on the panel? [laughter] >> let's see. we have a few minutes. i'd actually anticipated a

little argumentation across the panel, bu but i see a certain common theme. but let'sstart off with any of the panelists wanting to make additional comments at this point. >> no commitments. spoon revise and extend our remarks for the record. >> i will make one comment, which is that, that, i'll call it obamacare for this comment. obamacare had a huge advantage. it got there first. so to some extent by getting there first, it cut off many of the options that you might have rather done. in particular, although i agree with bob's point about the difficulties moving from, moving to a cap of the employer exclusion. nonetheless, the cadillac tax

had not come, maybe the cap, maybe economist dream of a cap on the employer exclusion for employee sponsored health insurance, might've actually been tried. it's hard to predict. that's at least a pretty clear example you can't go back, and you can't go back because it's one thing to take away a tax, but for republicans and democrats, it's another thing to put a new tax on. so that's a real problem. the other aspect of this that always struck me is about the democrats really took the easy job. it's very easy to find ways to funnel money into an insurance market and expand coverage. that's the easy part. the hard part is that affordable part, which republicans have in essence said we are going to do. and -- >> stole the name. >> well, that's true.

we will have to have a new term for that. how about less expensive? anyway, it's not just an uphill fight for all the reasons that people talk about, but because there is already history. it's not just the regulatory history, it's the political history that he think may be the biggest challenge of all. anyway, with that bit of commentary, let's go to the audience. i'm sure somebody must have a good, positive remark to make. here somebody up front. please wait for the microphone. it's going to take a little bit. when you do get the microphone, please say who you are. please make a statement in the form of the question. >> good morning. i'm an independent healthcare

consultant under work on both policy and new product technology that answers the question that i think it's important, which is is how do you improve the outcomes so you drive down the cost of care? frankly, it's the best time i've seen and a long time which is the good news but a number of the programs the charge penalties and incentives are changing in the direction of healthcare at the local level. they hold great promise, and the accountable care organizations ultimately will be a great model to drive down costs. as i hope we don't lose in the shuffle of the national policy which is kind of a very macro thing and will take more time, that many of these programs that are ongoing out such as under the program are incentivized and frankly we use the accountable care model to drive compliance on some of our medicare patients who are at the highest risk of incidents of episodes which are good.

so the question is how don't we lose in this national policy, let's repeal obamacare, which is going to take more time than anybody thinks disturbances on the good stuff that's happening? >> well, the first answer is they are not in great danger because most of the republican policymakers never read that parpart of the law. so it's somewhat flyover land and it's not a part of political contention. however, i would temper your optimism. i think we've done a remarkable job of doing is expanding the vocabulary of delivery system reform in coming up with all kinds of theories in terms and not yet proven in order to feel good about that. when you pour to the actual evidence on the ground, there's a lot less there. part of the problem is, you can have all kinds of experiments which worked very well for some experiencing. it's the standing at recognizing. what i would help policy makers would do is stand back and wait for someone else succeeds at

that and then claims it's their idea and push the spotlight on it. that tends to be innovation through policymaking. >> that make sense to me. the other thing is, let's keep in mind that terms have to change. we're not going to call them accountable care organizations because that is used up, right? but another factor is that people often forget, what's called the innovation center isn't very innovative because most of the ideas have been kicked around for decades. and furthermore they haven't worked out very well. not just accountable care organizations, but partly because those ideas fall into the same category as philosophy. i was talking about earlier. philosophically, they make sense. on the ground how do you do it? certainly having a system where you simply say okay, there's two-thirds of the country, you will do it this way. probably isn't a reliable test

of whether something works or not. there's a real challenge there. i a big believer in testing ideas, but i believe in testing, not simply legislating without the use of congress. other questions? actually, i think i saw you second and then i have lost all track who raised their hands. >> all republican plans talk about competition across state lines. how difficult is that to implement? what would be the political forces that would impede that from going forward? >> on partly responsible for that since i wrote about it about 14 years or so ago, ago, hypothetically in theory. a couple of problems. wrong moment, wrong time. good idea conceptually which is in its better iteration you really trying to create a consumer driven competition in

how health insurance is regulated. we've done this in other policy areas and you get some variation. federal regulation of one type of monopoly regulation which doesn't work very well. just when you have a smaller boundary line for state it doesn't mean state regulation is only way to regulated. if people don't like the regulation, they should find something else in its component. there are some speed limit on it. the standard one throw throat os you not get a new entry into new market because you can't get the provider networks, et cetera, et cetera, et cetera. that's trial and error. put capital debt and make it a successful business. sometimes you open the door and people come in, sometimes they don't. the other is where in the wrong moment in time. people point to like about a half-dozen states give limited versions of tried to make this possible. who is going to do anything when you just past the aca, which is is compressing and making more uniform the regulatory parameters so you don't have that variation by looking for

regulation and other states. how do you become a millionaire, steve? first earn a million dollars. the same type of thing is -- i credit steve martin for that joke. if you first repeal the aca or the federal regulation attach to it and just a face and timer states very again where there's a reason to shop somewhere else, then you might have a market opportunity which was a huge amounts of money but we have looked at some numbers and depend on the variation in mandates and other rating rose under regulations, with some safeguards, you might be able to save 15% on the premiums if you get the other miracle which is a state and church regular say i'm not perfect and they might have better regulation summer else which is why you do a bypass of the federal legislation to create a template when opened the door regardless of our regulator saying you can't come into my stay. over the horizon may be. right now it doesn't matter but is something people talk about. it seemed like a good idea at the time.

>> i would add that anyone who implies that moving in that direction as some sort of a game changer, really doesn't understand how insurance markets currently work and the intricacies associate with having that work out in practice. >> it's also an issue that becomes rather complex because you have to decide are they going to national minimal standards for what we consider insurance to be. if you're going to leave that up to different states, some estate is going to permit rather skimpy packages or insurance that doesn't cover certain expense of mental health or whatever, and then go off and sell that, and it's going to undermine the risk pool in the other states, and everything begins to fall apart. >> it works in two directions. they can be for the top as well as to the bottom. what you to think about is why you have a mismatch between how your regulate insurance and estate and what most people want

to buy? that's only a problem if it's a problem. if you put in some other provisions which say you can't sell insurance in another state unless you sell it in your stay, you create those mutual incentives to say you can't get away with fly-by-night stuff otherwise they'll come back to hound you. >> the extreme, but you get him moving in that direction spirit which would be good. you are squeezing the outliers. those who do too little regulation and those who do too much regulation have to move back towards the middle. >> on one hand the proposal is to devolve a lot of authority back to the states under repeal and replace the proposals, but on the other hand, we don't trust the states to develop regulations to protect their own citizens. as good republicans we want the federal government to tell those states what they can do, and i'm being of course a little satirical. i have a problem with insurance over state lines and federalism.

you have to pay attention. if new jersey wants to have mandates, i want to know how does it affect me in pennsylvania. if there's a spill over then maybe we should go tell the jersey they can do something or undermine new jersey system but otherwise i think there has to be deference to state authority, clearly the repeal repeal and replacement proposals decide states can get this right that they can come up with their own systems to provide affordable coverage without as many federal constraints. there's a limit of inconsistency in the dialogue spirit it's annoying that health service markets don't align perfectly with state lines. bubut i think we can fix that. [laughter] >> let's see now. someone back there. >> i heard this addressed in drips and traps but i'm looking for a cohesive answer. what needs to be done to keep

the individual insurance market place from eroding or imploding during the transition? and asked that in the context of when you think about it, you have a president who expended a lot of energy trying to implement this law and get it signed up. it has his name on it. you are moving from that president to a president who doesn't believe in this law lawd the regime is saying get rid of this law. i wonder if that's whatever impact in the market place in and of itself. how do you address that? >> i could clean up. [laughter] >> you might try. this is a new concept, selling cheaper, more attractive policy people are willing to buy. that's the starting point. that could help in that regard. you can stage manage transitions however you want to.

you flush dollars out the door to keep people at the table or you're threaten with higher taxes for exiting those workers as a flipside when they don't do it. never use both tools depending on what is necessary. you can call the risk court orders and reinsurance something else under a different name in order to best of the payoff people to for the short term. but on the long run you are probably going to spread the subsidies for individual markets to other groups of buyers that left this behind at the table in the outside market. it will be happy about it and you'll have less a tragic and less expensive coverage of other people who are not going to get as much because it would be less income related. it's not going to blow up. the last refuge of anybody who doesn't want to change health policies a adverse selection, run for your lives. we never had that meltdown because a short circuits because people are realistic about we don't go all the way to the explosion point. you self correct, sell different products. we saw this with all the bad loss of the 1990s.

it never hit that explosive point. we move onto another set of disappointing, frustrating policies and that's a legal success. >> you need the microphone. >> could you repeat that? >> i'm just asking before the legislative fix, i understand the direction that the republicans want to take the system but before the legislative fix you can't come you still operating under the mechanism of the current law, right? >> that you are stuck for the next -- you can't exit the next month, just to bleat out, you go to the other end of the pyramid. basically you're looking for better days ahead. you've all recover mise the lot which is bleeding edge along in, another year, another yupik --

the same thing will happen. >> democrats will sit there and laugh. another point that tom made in my office, if you work your you learn a lot of things that are pretty useful to know. so i'm going to give it, credit for this but i'll take the blame for getting it wrong. part of the aspect is how much, who has something to lose now? in other words, it's a bargaining situation. leaving aside whether donald trump is really a great bargaining or not, this is a bargaining situation situation. it's the same situation that barack obama had six years ago. and so the question is who is going to give, who's going to say uncle? it's not obvious to me that insurance companies are all going to immediately exit every market. >> insurers were concerned were

circles going to come from? we're stuck with a flat employer market. we've got to get into medicaid, which they did. we've got to get into other areas, and if you give us some subsidies they can sell the stuff and will come out ahead. they put some stuff on the table thinking it would eventually make up their losses on volume. it didn't happen but hope springs eternal. >> we have time for about one more quick question. actually this would be less question because i think you with the next person. >> i just want to ask about winners and losers and subsidies are change to tax credit system that is age-based works if we have a problem of giving young invisibles into the market before, how will that change with changes to the subsidies? who are the winners and losers in the replacement plans?

>> winners, lower middle income white males, slightly older, poorly educated. [laughter] >> go with the folks who vote for you. >> that's the definition as opposed to re-up. >> under any sensible rating system, younger people who might not qualify for subsidies under the affordable care act should be winners under the system because they will now get a tax credit to help them pay for coverage. and in addition they won't have to be substantially higher premiums to help subsidize older and less healthy people. so there will be less of that compression of premiums that does harm younger people and less the qualify for a major subsidy under the affordable care act. losers, it will depend a lot on the detail. the refundable tax cut programs, it's not clear, and, and robert mentioned this, it's not clear how that will work in terms of

providing the same amount of subsidy or a comparable on a subsidy as gourmet rises under the affordable care act where people would say 150, 250% of poverty but that's going to be very politically sensitive. if we see significant reductions in the net subsidy under some replacement plan for that group of the population population, te politically controversial to say the least. >> well, let's see, we really have run out of time. so anybody has questions for this panel, ask the next benefit you are liable to get better answers. [laughter] if we can come let's try to change panels very quickly. so thank you very much, and please join me in thanking the current panel. [applause] [inaudible conversations]

>> the american enterprise institute discussion on healthcare continues with a conversation on the legislative plan for the so-called repeal and replace approach republicans are planning for the nations healthcare law. >> try this again. good morning, everyone. let's try that. get this right. good morning. this is of the second panel of our event today and i'm very pleased to moderated. my name is james capretta and i'm a resident fellow at the american enterprise institute and we have a very distinguished panel whom i will introduce in order of how they will speak this morning. just a word about what we're going to try to do. that first panel cover a lot of issues and a wide range of subjects associated with the status of the aca going forward and its potential repeal and replacement. these folks are going to be able to touch on all those same topics but we want to focus at least in part on the how, how would you go about doing this in a legislative sense. because i think lots of times

but particularly in this case, that procedure and the process that is decided on for moving forward with something actually can vary maturely affect what is done. maybe thinking to the application of the various potential paths, can help folks see where they might end up if they go down that particular road. a little bit this morning on the hop of doing this because it's quite complex as you will hear as we move forward. let me introduce our panelist. the first speaker will be james wallner. james is the heritage foundation group vice president for research who served on the hill in various capacities for a decade, including for senator jeff sessions, and others. he received his doctorate and masters degree in politics with distinction from the university and he's written relevant to our

conversation this morning, especially the one that will be coming out next year from the university of michigan press entitled on parliamentary war, partisan conflict and procedural change in the united states senate. our next big will then be doug badger. doug and i've known each other for a very long time, longer than we probably want to admit. he said a distinguished career working boat in the legislative and executive branches. i worked with him closely when we both serve in the administration of president george w. bush. he worked in the white house as a top healthcare policy adviserr to the president, and then later as a key person in the office of legislative affairs. he worked on the hill in various capacities including a long-standing with senator don nickles of oklahoma. and his capacity and republican leadership in our third speaker will be john mcdonough session by the way, doug is currently a fellow at the galen institute.

john mcdonough is the proposal public health practice and the department of health policy and management at the harvard school of public health. between 2008-2010 he served as a senior advisor on national health care policy to the u.s. senate committee on health, education, labor and pension where he worked on and helped pass the affordable care act. for five years prior to that he served as executive director of healthcare for all in massachusetts where he was a incidental player in helping lead the push for massachusetts reform under governor mitt romney in 2006 and its implementation. he has written many different booksbooks, probably most relevt for our discussion today is inside national health reform, history of what went on behind the scenes in the push for the aca published by the university ofcalifornia press in 2011.

so with that i will turn it over to each of you to speak. i think we will have 10 minutes for each of you or so, and then we'll have some discussions amongst us and then some questions. >> good morning and thank you, jim, i think you to aei for hosting this debate, not a debate, a discussion i should say. it's say. it's wonderful, great to be indisputable building. it's a little chilly outside but i can tell you the climate system here is certainly modern and ready to go. it's not chilled in him at all. it's always good to appear alongside such knowledgeable and distinguished panelists and i will do what i've tried to do in my life and associate myself with people smarter than myself so that you all will think that i know what i'm talking about. as jim said we'll talk about the how of healthcare reform and how we can expected to play out. in this instance as we've all been reading in the newspapers over the past couple of weeks the how is just as important i think as what, is what can

happen. i'm just going to emphasize very briefly three points i think to help frame how you think about the how of a health care reform. the first one, which i think is more apparent now than it has been in the past, is if the republican party is not as unified on repeal as it has does appear to be over the past seven years. the unity around the repeal effort is really striking if you think about it. other than the idea of repeal and replace, there's been no qualification whatsoever in repeal. the early messaging was in taxes too much, spends too much. we've had our leaders say we will tear it out root and branch completely. this has been a consistent message from literally every single candidate for office that has been running on the republican party under the banner of the republican party for the past seven years. this has implications i'm going to return to in a little bit. that unity one could suspect could be a function of the

expectation we would ever be any position to actually follow through and repeal the law. it could've led members to be a little more aggressive and privately then they may have wanted to. but it is a reality. it has created a new political reality for the party. another point i would like to emphasize is that 2015 reconciliation bill, as you recall, last year the house and senate passed reconciliation bills. they were then reconciled and the president ultimately vetoed the last bill. the 201515 bill, the house originally passed a bill that didn't reveal much of obamacare, of the aca. it certainly didn't reveal everything you are allowed to do under the rules, under the budget rules governing reconciliation. more or less the base of the repeal the individual employer mandates, medical device stacks, that sort of stuff. it came over to the senate and the senate was ready to go to pass the same bill. a couple of senators said we will demand we reveal everything

we can under the rules. and so that's what ultimately led to the 2015 reconciliation bill that the president vetoed. even that that process is a struggle. as i mention you with a house passing a bill that wasn't as aggressive as a good event under the rules here in the city there was a very aggressive debate in private and close doors as to whether not that bill should be expanded. even at a time when the bill is going to be vetoed, it wasn't going to become law. there was a very aggressive private debate as to how hard republicans to push to repeal. ..

how should it work and is it a practical matter if someone who has lots of experience in the senate and congress and seeing how things play out, the only thing i see that can be possible is to repeal first and replace later. this is just a practical matter of no democratic senator is going to vote for a bill to replace obamacare. as long as that bill is coupled to a repeal of obamacare. that's just a fundamental point therefore, it seems to me you have to first repeal. we did pass this 2015 bill and that seems to be the floor. we can potentially get more and i'll mention that in a second, but it but it definitely is the floor.

there's some talk of figuring out how to keep the taxes or bank the savings so we can use them later on. that kind of talk also runs head into the messages going back to the unity on this bill that has been compounded by every single republican since the beginning which is that it taxes too much, it spends too much. we have to repeal it all, root and root and branch. if you say that for seven years and then you turn around and say maybe we should keep the tax increases, that doesn't make sense to the people who are supporting you. there is the argument that the bill could be expanded to include a lot of the insurance mandate that were included in the original legislation. i think there's a good argument you can make but we don't know yet, that is a debate going on right now behind closed doors with the senate parliamentarians in the budget committees in both parties. that's a debate that will play out. it was not adjudicated in 2015 when the reconciliation bill was originally debated the first

time. one thing i will say is i'm a bit of an optimist when it comes to the insurance regulation. even if the 2015 bill isn't the floor, and that's all you can get and you can't come back for the insurance relations, as we've heard from the prior panel, those things will significantly drive up costs and if you remove the subsidies that create the problem. it creates a lot of problem for uncertainty in the market and for consumers. in an environment where repeal has already occurred, you can have a debate as to what regulations you need. you can have a debate as too why insurance regulations you need. a lot of people say were not going to do that. were going to make the republicans, as someone who has advocated that kind of thinking for many, many members that i've worked for over the past ten plus years, i can tell you that's not going to happen. voting is a choice. members of congress confront the status quo and they are confronted with another proposal

and they are asked to cast a vote. if the insurance regulations are causing havoc in the marketplace there will be a demand to vote one way or the other. i will also return to the other, regular order is critical. if you can debate alternatives or try to vote down things they don't agree with, then it's going to be very difficult for them to sustain an obstruction. that's when you have gridlock and when you don't allow them to bid to debate. i think that is the key first point, or first step in the replace effort and then turned to the insurance regulations and work through the difficult debates that we have to have about what kind of healthcare

system we want. once we get to the repeal part to replace, that needs to be a step-by-step approach and it needs to be done via regular order. it doesn't need to be done via reconciliation and bob mentioned a lot of this, when you write something in secret, when you jam it through and don't allow people to have any say in it, then you get the situation we are talking about today. i think you have to break this thing into more manageable pieces and you go through step-by-step pieces and you allow for a debate and they can weigh in on what they think is and isn't appropriate. it's not going to be great.

i'm not going to be happy with it all, but i think we've seen the way the system ought to work. when it doesn't work that way, everyone ends up being unhappy. just a conclusion, i would say say three very short things. one, we put too much emphasis in our discussions of this issue in particular, but all issues on this idea of what is the silver bullet plan. when are all the members going to go into a room and talk it out and come out with a big idea, and that idea will give everybody certainty and everybody will love it will go off into the sunset and will all be happy. that doesn't work. it just doesn't. no one should have an idea that that kind of thing works. we have a legislative process for a reason. we have rules in the house in the senate for a reason. guess what. they actually drive us to outcomes, and when you follow them, you will get to an outcome one way or the other and allows for a debate play out in it allows for the american people to take stock of that debate and

to weigh in on what kind of system they want. so the idea that we can't start this process until we all come up with some silver bullet that all the republicans are all the democrats are all the republicans and democrats can agree to will mean that we never get started in the first place. the next point i would make is that the republican party has raised expectations on this issue. i think that's the understatement of the century. going back to this idea of false unity, if that actually becomes apparent and they are unable to do this, or if they say were going to repeal everything but the tax increases because we want to use that money that we been attacking for the past seven years as being bad for the economy or whatever you want to say, we can use that for our health care plan, that becomes a very difficult proposition for

the people who have been voting for them. lastly, with the election results of this past november, there are no more excuses. we have heard from the republican party time and time again, give us the house and everything will be okay. then okay. then we need the senate and every will be okay. then it's like we can't do anything without the presidency. now we have unified government heading into the next congress and right now, if the republican party doesn't deliver, it is going to be very interesting to see what happens because i don't think anyone interprets the election results are somehow a vote of confidence in the republican party. that's not what happened in november. the people are frustrated and fed up and tired of excuses from both parties. i think it's incumbent upon them to follow through their repeal effort and to take a step back and let the process play out on how best to replace it. >> thank you. >> thank you. like tom muller, i have a slideshow.

my goal today is to add a third arc to repeal and replace and that is rescue because i think one of the first things that president-elect trump will encounter as the new president, and that the new congress will have to deal with is in fact that there is generally a failure in the individual market , i'm talking strictly about the individual markets. the 2015 data that cms released last month documents this to some extent. the risk quarters were alluded too in the earlier panel, but essentially the idea is to transfer access gains from some insurers to their competitors who made access losses. what we found out is that in

2015 the excess loss more than doubled from 2.2 billion to 5.2 billion five-point to billion and losers outnumbered winners by 5 - 1 and even in california which is a state where the aca individual markets are working, access losses outnumbered access gains by a ratio of 282 - 1. that was 2015. since then, things have gotten bad. we have seen four of the five largest insurers withdraw from most of the exchange, the fifth anthem, the ceo, this was prior to the election said on an investor call that he may pull his plan off the exchanges and 2018 and his stock price spiked up in a matter of minutes. even the blues plans have pulled out of several states. it is a real quandary that this is now the new administration's problem because we've already

had the narrative out there that president-elect trump is responsible for the crash in the aca individual markets. it's a problem that's waiting for him on the desk at the end of the inaugural parade next month. there is also a general political contest they have to be aware of which is that think tanks are competing with each other over just how many people will lose coverage if republicans repeal and replace obamacare. the administration uses 20 million people who gain coverage under the aca, i think that is an inflated figure for of friday of reasons, but even if we accept that, the latest bidding is that 30 million will lose coverage if a republican replacement is put into place. that is the political context that's going to surround the house deliberation. i'm going to lay out three

possible pathways for how this plays out as congress moves forward. the first is one we've heard the most about, that there would be a two-step process, first to repeal bill and later the replaced bill. the repeal bill starts with the budget budget resolution. this is a simple majority vote in the house and senate and it will provide reconciliation instructions to the various committees. the house is there going to start work on the budget resolution on january 3 or 4th immediately after being sworn in. they're hoping this moves very quickly and then to a reconciliation bill that we will talk about in a little more detail in a minute, and generally they're talking about completing that process, a budget resolution and a reconciliation on the president's desk by the first part of february. we are talking about a very

abbreviated five or six week process. you do in fy 2000 with reconciliation. to the point that was made on the first panel. you are probably limited to what you can do so this is the pathway that's been discussed and this will take a number of months. the previous repeal bill, there we go, the previous bill as mentioned didn't repeal everything. it did repeal the subsidies in

the medicaid expansion but there was a two-year delay. it immediately repealed, as james pointed out, a variety of taxes. it did not repeal all of the things in obamacare and it was a question what about things that they could've repealed that they did not in medicare and medicaid and there may be things that they may allow to be considered on the senate floor and i will spare you a tutorial. jim will have to do that one. last time out, two republican republican senators voted to gant it, one is not coming back, susan collins is, as james points out, a very narrow knife edge to get the repeal bill through.

i do believe they are going to have to address some of the rescue things in this bill. i know we had a question about that. one in particular is the cost sharing reduction subsidies. these are the subsidies that were the subject of the house lawsuit that they succeeded at the district court level in saying that congress had failed to appropriate these subsidies and that the administration was spending them anyway. now the house prevailed on that point, it still up on appeal to the d.c. circuit, but i would say, if the new congress wants the aca individual markets to continue for a couple of years, i would argue they need to appropriate this money because you cannot take that money out of the system if you're rejection is a constitutional one, it is something that you are to address.

now the challenges to the two-step approach are many. first is passing the budget resolution. the reason why there is no fy 2017 budget resolution when we are already coming into the second quarter of 2017 is republicans in the house couldn't agree on spending levels so the first thing that has to happen is that members have to understand that this is a shell budget resolution which is being passed only for the purpose of allowing consideration of a repeal bill. i don't think that's a done deal. the second difference that we are all well aware of, the existential one, last year they were passing a bill they knew the president would veto. this year they are passing a bill they know the president will sign. that changes the mentality a little bit and brings out some of the potential concerns that

james raised in his. thirdly, an active repeal without replace does fuel the debate that republicans are just hearing everything down and they don't have anything to put in its place. so all of those estimates about 30 million people losing coverage will become 40,000,050,000,000 the stars will begins shooting from there's fears. this will escalate the criticism that republicans are it aren't serious about replacing it, and the fourth point is the trump administration administration. all of this is happening at the time where shortly after the swearing-in, when you are hoping to get some cabinet members in place and you really don't have established routines in the affected departments and agencies, not to mention the fact that i don't know that the president-elect has signed off on this particular approach and set of priorities. those are the challenges. the one step approach talks

about a similar kind of procedure, but says look, let's package the repeal and replace together. as james points out, that may cause some angst among folks so it does phase some challenges, the first being that they say they're going to repeal it and then they say let's wait and not repeal it until we can agree on what replaces it. that is going to be something that can be difficult to sell to some members. secondly, i think joe pointed out at the beginning of last nights panel, it's not that republicans don't have replace bills, it's that they probably have a couple dozen of them, and

the problem is there's no consensus around any one of them and so the question is, will that consensus continue to prove elusive. the third thing is, the longer congress waits the more other things are going to crowd out or crowded onto the agenda. the administration has its own priorities, there's a send senate bandwidth issue, they have to do confirmations, executive branch nominations, they have to deal with the supreme court nominee, resolutions of disapproval against regulations, the continual resolution expires on april 28, the debt ceiling resets on the 15th of march, if you don't act early on this, one argument is you're going to lose your window of opportunity. finally, unforeseen events, the one thing we know about the trump administration is that president trump want to find

what is going to mark that administration. stuff happens. it happens in the world, it happens in the country and how presidency is ultimately judged is how they respond to those unforeseen events. finally, the no step approach which is more a product of inertia, we can't agree on a two step, we can agree on a one-stop and so we end up simply delaying action so there is both a process and a substance we can't agree on what legislation we want. i think that is a very short life to discussion because by the time we get to the middle of next year, it's going to become apparent that no insurers are going to be coming into the exchanges in some states and were sitting out of a number of counties in numerous states and so you're going to have to do something to address that term

issue and that leads you naturally into taking one of these approaches. finally, for those who want to bet along with me, and i would strongly advise against it, i would say the two-step approach probably is still the highest priority as of today, i don't know where people are going to be a month from now, but if i were handicapping this i would say it's a very high probability. a lesser is the one step approach although there are still members and others who call for that in the note step approach is a negligible probability, but never bet inertia when it comes to the legislative branch. the ultimate irony is that it may be the urgency of rescuing the aca that ultimately motivates its repeal and replacement. >> thank you. it's nice to be here.

thank you jim, thank you joe for having me here. when i left this morning, it was 5° so it's it's really nice to come down to a warmer climate. this is a beautiful new headquarters. congratulations but i also want to congratulate you for being so in step with the tenor of the incoming trump administration by having a panel with eight older white guys on it. [laughter] really in step. i'm sitting in tom miller's seat so that means, from what i understand, understand, i'm required to make a movie allusion so the movie i would call to your attention is ghostbusters one. forget two or three. ghostbusters one, you remember there's the four ghostbusters, they capture goes, they put them in a containment facility in the bottom of a former new york city firehouse and the nemesis of the ghostbusters is that an attorney for the epa named walter and

walter, at one point comes into the firehouse and with utility workers from the city and the police, they stormed down to the basement where the container facility is an orders the utility workers to shut it off. the ghostbusters are saying you really don't want to do this. you don't know what's going to happen. bad things are going to occur. please, please don't don't do it. walter peck says shut it down. they shut it down and quite literally, all hell breaks loose i offer that as a metaphor. now, people on my side of the fence would welcome the opportunity and welcome and thank you for having us, welcome, welcome the opportunity to offer our insights and advice and i do notice this past week

that donald trump invited zeke emanuel to trump tower to talk about it so, let the healing begin. let me focus just a few points, the central matter from our perspective that stands in our way of feeling comfort with this process and where were going, we have had heartening words and promises from donald trump and paul ryan, from mitch mcconnell that no one is going to lose coverage, that it's going to be just as good or better coverage and it's going to cost less. if that can happen, we are all for it, but the thing that stands in our way is the reality as we look at the plans that have been advanced by donald trump, by paul ryan, by tom price, by aei. it doesn't come close to the levels of coverage and support

that we have now. and, we see in the reconciliation bill from a year ago and others, let's repeal those taxes so fewer dollars, when you move from an income -based subsidy system through the premium tax credit to a flat one, you are going to put it at a level where most of the people who get the today, it's not going to be nearly enough and so we are looking at potentially, and we don't know, but this but this was the estimate not from democratic think tanks, this was from a year ago scoring the reconciliation bill, 22 million people would lose coverage with the reconciliation bill that the president vetoed last december so there is major issues in terms of it and i guess, if those people are in charge and were being asked, let's repeal the financing and trust us, what

comes next is going to be much better, it's going to be good ,-comma what business man or woman would accept that kind of deal? that stands in the way, but that's not all. another major concern. guaranteed issue. it is heartening that the president and the speaker and other folks say we are going to continue guaranteed issue, but as we've heard today from the first panel and others, there is fine print after it. if guaranteed issue for people who maintain continuous coverage. the people who don't maintain continuous coverage are sent into the seventh circle of hell of medical underwriting. we have gotten us out of our system. it is gone. rating people based upon their prior illnesses, their chronic illnesses, their gender, whether they've ever been a victim been a victim of domestic violence, all that is done and if you look at the letter that was sent last

week, they are not hungry, zero boy, let's get back into medical underwriting, they don't want to go there. i don't know why we want to go there. so, how you maintain continuous coverage, how long is the gap. how many people are we estimating are going to fit into the circle. there is some number, according to your subsidy scheme of the 20 million who are going to lose coverage and fall into it. the next recession people are going to fall out. what are we talking about here. no one is demanding, i don't see anyone demanding it and i think there needs to be a little bit more being on the level with people.

[inaudible] advancing medical care access

for people who have mental illness and substance abuse, guaranteed issue, essentially important in terms of not having substance abuse held against you when you're trying to buy insurance. an annual lifetime benefit is incredibly important if you have serious mental illness. the essential health benefits, behavioral health is one of the ten essential health benefits, and prescription drugs is one of the ten essential health benefits. these are just a few of the things that are critical. i don't hear any clear conversation from my colleagues or people who are in charge of this on how you're going to keep us together. how are you going to not make this work because these are the people on the firing line in terms of losing coverage and there is a bipartisan to buy our

that we want to deal with substance abuse and mental abuse and folks were falling into this deep systemic problem, but i don't see people facing up to the consequences. fourth concern hospitals. hospitals cannot step forward, they came out and made a deal. we will give up $155 billion over ten years, now it's $350 billion over the current ten year time. to finance the coverage expansions in the aca. they did it. they did it and they stepped up to the plate because they wanted to get the monkey of america's uninsured off their back. they made a commitment and they stuck to it. now we see, in the reconciliation bill that you're going to repeal the taxes for the high income folks through the medicare payroll taxes, the

unearned income in the earned income, you're going to repeal the taxes on the drug company, you're, you repeal it on the medical device tax, you're even going to repeal the taxes on the indoor tanning salons which is probably the most important public health measure in the whole law if you know anything about melanoma among young women and where they're getting it. you get all those things, but the hospital who are going to be on frontline of the tens of millions of uninsured, you're saying you're going to keep those cuts. last week, american hospital association's sent a letter saying folks, if you're going to repeal all the stuff we want our money back. is that so illegitimate, i think in this is part of the disingenuous that we see going on. democrats were cutting medicare,

cutting grandmas medicare to to pay for obamacare and that in budget after budget they would repeal the whole aca except for the cuts to medicare. leave them in all the time. there's this opportunistic thing going on. i think it's going to be fair to hospitals, then you have to address that. we don't hear anybody saying that, but there's a problem with that in the problem with that is that if you do give them that money back you increase the cost of medicare and you're going to increase the premium in part be in part d for all medicare enrollees and you're going to substantially shorten the life of the medicare part a hospital trust fund. you are in a dilemma so where's the fairness here? where's the fairness and saying everybody else has been paying taxes whether they agreed to it or not and they get a big break the hospitals tough luck, good luck for 20 million uninsured, and through your doors for services.

the last thing i want to mention is about the exchanges. an idea from the heritage foundation, it was heritage foundation folks who came up to mitt romney and said you've really got to create these health insurance exchanges. one of my colleagues at the kennedy school who likes to say there are two kinds of problems. there are technical problems and there are adaptive problems or system problems, bigger things. i think we need to have a more thorough discussion about the problems with the exchanges. are these technical problems or the systemic adaptive problems. i think it would be fair to say all three of my colleagues here would say these are big systemic problems. i would challenge that. i would give the example of alaska. alaska, this past summer saw their premiums and their individual market go up 42%.

the alaska legislature, they said we can't let that happen so they got together, they created a state reinsurance program for their individual market, the exchange market and nonexchange and overnight the premium increases went from 42% down to 7%. california doesn't have a broken market, other states don't have a broken broken market, we had a good exchange structure with premiums under control in 2014, 15, and 16. it's going haywire in 17 because the 17 because the risk were doors in the reinsurance are out. the risk adjustment has gotten messed up because of political fighting in congress, but these are not systemic problems. these are fixable problems if there was a will. i spent 13 years as a member of the massachusetts legislature and i have learned something in those years. we had joint committees, house and senate so i was a a house chair and had a senate cochair.

when the senate cochair and i, when we trusted each other, the most difficult things could get done with ease. when we didn't like each other, we couldn't schedule a darn hearing. we couldn't agree agree on lunch. it was just impossible. that is the problem, but it's not that there is a deep systemic failure of the exchanges going through very rocky time. right now because if we had had a conference committee in time, we would have maybe made the 3r's permanent like they are in medicare part d. why does reinsurance risk adjustment and risk orders both a bailout for the insurance industry in the exchanges and as american as apple pie and medicare part d. can someone explain that to me. >> okay will wait your turn. >> anyway, love to help you and

we've got some stuff to talk about. >> thank you very much. excellent presentation by all three. supposed be the moderator of this, but boy so many things i'd like to say in response to these comments, but i will restrain myself a little bit. let's talk about the issue of the three rs. >> will give you the short answer, first of all the risk were doors in the part d program should be repealed. the government has made money every single year on those. in the aca, i keep seeing obamacare. in the aca, you've got them losing money every year at an accelerated pace. the other difference is, in the part d program, congress provided for money to be appropriated in the case of the shortfall.

in the aca according to the comptroller general they neither authorized or appropriated money and the congressional budget office and cms predicted they would make money and risk orders. there's a problem that you can't legally spend the money on reinsurance. i will say the comptroller general's opinion, cms was required by law to remit $5 billion to the treasury, not distribute distribute them to the insurance company. the controller general in a very strongly worded legal opinion indicated that was unlawful so the difference between the two programs, what they share in common is the same name for this program. the difference between the two programs by march, one is one is lawful in the others not. >> so 16 years ago the market in our healthcare system was a mess.

it was called medicare plus choice now known as medicare advantage. if people took the attitude toward medicare plus choice in 2000 that we are taking to the exchanges, we would've tossed this whole program out. in romans were plummeting, insurers were dropping out in markets all over the country, there there was a massive number of counties in the united states that had no medicare plus choice plans at all, and rather than saying stupid idea, off with the ted, out the door, mostly republicans in 2003 in the medicare modernization act when jim was in the bush administration fixed it. we think they fixed it too much in creating medicare advantage, but it got fixed and now it's a healthy duck sailing along, having a good time.

by the way, massive, massive accusations that democrats come in 2009 that we were plotting to kill medicare advantage. it has never been healthier than it is right now. again, yes problems, issues where people have a mind of let's try to fix things and make them work, you can do all kinds of stuff. the problems in these markets is not systemic, it's fixable. where there is political will to do it. if you guys want to keep these exchanges going over the next couple of years so that you don't have chaos and the collapse, you are going to rediscover the value of these mechanisms in these markets. >> let me jump in here on this particular part of the conversation. it's very important. there's a couple things i would say about what john brought up about the exchanges. i sort of agree with you that the concept of an exchange actually, providing consumer information and some transparent

and clear way to help them decide on what insurance option they want to enroll in, i'm for that. the question is whether the combination of the individual mandate in the guaranteed issue and reading rules that they put in place, i don't really call them exchanges, the more mandates of how it's being enforced, the tax penalty and the insurance rules, whether that combination will calibrate it to be sustainable. now, i agree it might be able to be calibrated and be sustainable, but i don't think they calibrated it right to be sustainable because the penalty on the individual mandate had a go way up, and by the way, democrats in the senate committee voted to bring it down and so, there's no one to blame. >> it's you guys. >> i was a.

>> it was your original idea. >> will maybe john, maybe there's there's a question here of what's politically sustainable. so, how much can the mandate go up and be sustainable in a way that would stabilize the market in a calibrated way to make it sustainable. people will come to different judgments about that and i think continuous coverage is just another judgment about what our political process and what our political economy can reach over time. it's one thing to tell americans you have to buy an insurance product, it's another thing to say you have to take some personal responsibility. you have a pathway to always have insurance and if you decide not to have it, even for low income people, you always you always have a pathway to have insurance. if you decide not to have it and you say it's too skimpy etc., then insurance needs to protect people first and foremost for big events and if someone decides not to have it, what are the consequences. would they be unlimited forever

and they won't get healthcare? i don't think they really want them to do that. so look, there's a huge question of calibration that i agree. but i wouldn't say the calibration on the individual mandate has got it just right. i'm also not sure they found out the combination on the other one yet either. i will agree to that and i will concede that. i'll let you respond to that just a second. let me turn this to james. we are really short on time and i want to make sure we talk about one question that is really essential to the how of this which is that he brought up the point that the level of political commitment to repeal is very high and now that they control the white house and the congress ,-comma what excuse do they have to not move forward. i certainly have a degree of sympathy for that point of view, but i must say, maybe my ear is a little bit, i don't know, i always heard and i do believe

when mitch mcconnell came out i could've sworn i heard repeal and replace. honestly, when i watch canada trump on the trail, he never really said repeal. he said were gonna repeal and replace affordable care. now why is this important? it's important because james presentation seems predicated on the notion that were going to repeal. replacing is big and messy and complicated number and have too just work through that in a regular order process. actually, i don't think that's what they promise. i think they promised were going to repeal it and we will replace it in some kind of clear way because there's uncertainty about what's going happen to people's healthcare. the reason they connected this is for the very reason that promising repeal without replaceable been politically problematic. so, i think there's a little bit

of playing fast and loose a little bit with the wording that was promised on the campaign trail by which politician at what point in time. i kind of reject the notion that it was repeal only. i think. i don't think that's what what i heard. what would you say in response to that? >> i take your point in the message has been repeal and replace. the reason it's repeal and replace is because one, it's good politics. it's also a rhetorical device. repeal and replace was the response to those were pushing at the time just repeal but i don't think anyone was arguing that the status quo was good. i don't do anyone to repeal it and hang up the cleats and go home and have a good time and not worry about it anymore. i don't see anyone saying that either. the question was where was the

emphasis. repeal and replace was a rhetorical device for many times. there are number of plans that have been proposed, there are a number of different ideas and those should be considered in the way that the aca ought to be considered in the first place. that's via an open and deliberative process where everybody gets to weigh in. a lot of the problems were talking about were because the process was basically organized force through this piece of legislation. if it was a little more open, my guess would have been that maybe i wouldn't of been happy with it and others would've been happy but it would've been a lot more sustainable, we would've had more bipartisan by an, but instead the idea was we have all the answers and when you jam it through and if we can get the with a jam through what we think otherwise. my point on repeal first and then replace, because nobody sang just repeal and call it a night is that just as a practical matter, you're not replacing if you're also repealing. you're tweaking and you're saving which presents political

cost to the republican party given their commitment to repeal and replace. i don't think it was ever at a level of nuance or detail were somehow repeal and replace would be done simultaneously and finally, even had it been that way, it is, as a practical matter, an impossibility an impossibility because i don't see any scenario in which you are repealing the law and replacing it with something else it's just not going to happen. what you're going to do as you go and you fix the law and that something the republican party is not open to doing so far as i can tell right now judged on the message of the past seven years. >> john a should've given you a chance right away, but you want to response my comments? >> it's very widely believed that the individual mandate penalties are too low. i would counter that. i would say the issue is not that the penalties are too low, i would hold out the example of massachusetts. massachusetts mandate penalty and its state law, just as low,

different formulation, but pretty low. not at all equal to the cost of buying insurance, and yet very quickly with the implementation of massachusetts in 2007, we got the rate of uninsurance down somewhere between two and a half to up to 4% depending on the measure you use to count. and it stayed stayed there. it stayed there through the evolution of the aca. what's different question but different is that the subsidy support for people buying insurance in massachusetts was twice as generous in massachusetts as in the aca and when the aca came, massachusetts put state dollars on the table to maintain the affordability under massachusetts reform, and coverage has stayed very low so i would say, the problem is not that the penalties aren't high enough, the problem is that the subsidies are not supportive enough in terms of the real needs of families who are on the economic edge who need to buy health insurance and make these decisions.

that is the place that needs change, not jacking up the penalties which, i don't think his politically salable anyway. >> you've listed two places where the aca individual market has been repaired. one of massachusetts and one in alaska. in both cases, it's with state dollars. it's very interesting. >> but the state had to put in place the scheme for raising the money. >> when the state takes it from one insurer and gives it to another, that a state money. >> having said that, what i think we are starting to hear on both of these panels, very subtly and very softly is that one pathway forward on this is instead of the federal government usurping the

individual and small group concerns market, instead of of trying to impose a uniform scheme that may work in massachusetts but doesn't work in alaska and doesn't work in montana or alabama or something is one in which the federal government pulls back a little bit, provides resources to the state, holds them accountable for the use of the resources but doesn't dictate to the state to the extent to which the aca has done. federal interventions into health insurance markets have been a series of minor disasters. this one is a little more than minor, beginning with the rest of through hepa, now the aca and at some point, maybe those of us in washington might allow for the fact that we don't know everything and provide a little more discretion to states to organize their markets in ways

that achieve a goal that we don't all share. were not arguing that were trying to increase the number of uninsured. were all trying to figure out how to change this law in a way that works. maybe the answer isn't here, maybe it's more in the states. >> this is the first time i've ever moderated the panel and maybe the last because they may pull me off of this job because i ran long so were going to have time for like two questions and then we will have to wrap it up. i saw his hand up first and then we'll come over this way. >> first of all, great panel. you did did moderated very well or are moderating it very well. i have an overarching question and then i want to ask a detailed question about process. overarching is, i think one of

the criticisms of the affordable care act or obama care, depending on what side you're on is that it was really about fixing insurance, or changing insurance and not changing healthcare. >> i just have to ask you to be pretty quick about it. >> what are some of those things that can be done outside of risk were doors and in this process, are any of those in the whole replace process or is that a conversation for later, and to that point, is center for innovation, medicare, is any of that likely to be in the first part of the reconciliation piece or again, are are we talking about much later conversations? >> i would just say, if you look at the macro law that congress passed bipartisan, 2015, to address part b spending and you ask yourself the question, the macro model and the myth, the

new payment model, you you ask, does that continue in advance the direction set by the aca, does that rejected or is it a model mass in the middle. it seems it seems to me it's pretty clear that it continues and strengthens the direction set in terms of health systems, change and transformation in the aca. there may be some playing around with the edges of see mmi, but if you pull out you get rid of see mmi which she macro which is a bipartisan victory that they herald, is in big trouble. >> some of us wonder why a republican congress passed it but that's another story. mike you will have to be the last question and that we have to wrap up. >> doctor mike muller. i want to get something back to

what james said but taking off what john mentioned is that change happens at the speed of trust. you mentioned in the legislative arena and i've seen in the private sector and in public private partnerships at the state and federal level. given that congress has an approval rating going back maybe a decade in the single low teens, coming out of an election where it was on one side lock it up and the other side tax cheat and liar, how does that influence your thinking about what we can do in terms of the free pass and going through regular order since this is a panel about how we will move forward. >> thank you. i think the first thing that's unique to health care is that we had to get more comfortable with conflict. guess what. it's okay, it's good. that's what our our system is built for. through the process of conflict you get the outcome that people like and for those who don't like them they feel like they were hurt. i think this speaks to the core of the problem we have in our healthcare system now which is the way this law was pushed

through on both sides come the debate that happened has poison the well. the best way to start over is to get rid of it and then come back to the table. the last thing i will say and i know were short on time is all i can think of is lbj as being this genius in the senate and he was in a lot of respects, but i think he was also would genius it was bounded by time. had he not been vice president and stuck around in the senate and managed the senate, would he have been as successful. it's a little bit counterfactual, i submit to you he would not have been because the way he exercised power was ill-equipped for the senate of the 60s. you had a whole host of northern route liberals common who didn't want to play by the old rules anymore. the republican party was getting more consolidated. mansfield comes along in his genius was to recognize he couldn't control it. what did he do? he took it up step back.

he let go and he focused on facilitating the participation of all the members in the process. if any problems arose, he would try to work it out on the backend, and guess what, the senate had its golden age according to people on both sides of the aisle and they tackled a lot of really difficult questions during that time. i think we have to have enough humility in our debate right now to recognize that no one person, particularly in the senate were a lot of this will be decided will control it. mitch mcconnell won't do it, chuck schumer can't do it, they need to realize they can't control outcomes and they need to let the senate work its will. everybody on all sides of the debate needs to weigh in and the best outcome hopefully will prevail. it may not, but again that's the way our system is set up. >> i think that will have to be the last word. please join me in thinking the panel.

[applause] ,-comma. [inaudible conversation] [inaudible conversation] this week on c-span2, it's book tv in prime time each night. tonight biographies and autobiographies. we will hear from authors of books of l component and eleanor roosevelt and a former secret service agent worked under eisenhower, kennedy, nixon and ford. also by congressman. [inaudible] join us on tuesday, january 3 for live coverage of the opening day of the new congress. watch the official swearing-in of the new and reelected members

of the house and senate. also the election of the speaker of the house. our live coverage of the days events from capitol hill begins at 7:00 a.m. eastern on c-span. also c-span.org. or you can listen to it on the free c-span radio app. >> we are looking at preparations for the inauguration, taking place on january 20. the viewing stand is being built outside the white house ground on pennsylvania avenue. the new president his family and others will be watching the inaugural parade on pennsylvania avenue after he takes the oath of office to become the nation's 45th president.

[inaudible conversation]

[inaudible conversation] ♪ the presidential of a nonaggression of donald trump is friday, january 20. c-span will have live coverage of all the days events and ceremonies. watch live on c-span and c-span .org and listen live on the free c-span radio app. former army general david petraeus was a finalist to be his secretary of state. he recently sat down at george washington university to talk about his meetings with the president-elect and offers views on the syrian civil war, they ran nuclear deal and russian interference in the election. :

>> welcome to the first of what i'm confident we'll become an important series of conversations on topics as global and national interest. i'd like to extend a special welcome this evening to congressman george holding, representing north carolina, the george washington president emeritus, to the dean of libraries and academic innovation and, of course, our featured speaker general david petraeus. we also note gw students come to us from all 50 states and 140

nations, enjoy a front row seat in the theater of history. tonight is a good example of why that's true. it's hard to imagine someone who would be more important to hear at this moment in history than this evenings featured speaker. david petraeus was one of the most prominent military leaders of the post-9/11 era picked his achievements during his 37 year career in the army notably include his leadership of the surge in iraq. he held six consecutive commands as general officer, five of those incompetent. a record unmatched since the second world war. after retiring from the military, general petraeus was nominated and confirmed as director of the cia where he established a strategic plan and work to develop its human capital. he's now a partner with the global investment firm kkr and yields a visiting professor ships are other significant roles at numerous institutions. his military declarations, his

and his awards are too many to list. i first had the honor of meeting general petraeus when he spoke at an event for the international church and society in april of 2012. general petraeus will be conversing this evening with the inaugural director of the national church old library and center michael bishop. please join me in welcoming general petraeus and michael bishop. [applause] >> thank you, president knapp. thanks to you, general petraeus, for your service and for being our first honored guest at the national churchill library and center. we are the first research facility in the nations capital devoted to the study of winston churchill. here, students, scholars and visitors have access to substantial and growing collection of primary and secondary sources and interactive touchscreen exhibit an online access to the massive

churchill archives housed at churchill college, cambridge. in the the months to come, art, artifacts and other historical treasures will be on display. so for the development of the library, one might say, this is not the end. [laughter] it doe is not even the beginninf the end. [laughter] but it is perhaps the end of the beginning. the in the lc is not just a place for study but also a venue for discussion and debate. through events such as this will library and center will be a form for the examination of both historical and contemporary problems through the prism of churches extraordinary leadership. there can only be a better way to inaugurate esters the discussions on leadership and a conversation with our guest tonight general petraeus, welcome to the nclc. >> congratulation on all your done to bring this to fruition. thanks, president knapp tank to

all of you for being here on a frigid night in our nations capital. and, indeed, congratulations on this terrific library. it is a special privilege to be, to walk point for this effort as they say as the first speaker and as a huge admirer of the man rightly described as the last lion to the inner place inspired by them, i think is really quite special. so thanks very much. >> thank you. thank you. i thought we begin by discussing your current activities with kkr which understandably can you all over the world, although your travels were briefly interrupted by a trip up the gilded elevators of trump tower, a subject i think everyone here and everyone watching later will be very curious about. i wonder if you could come first of all tell us what you're up to now answer a few details about your recent trip to new york? >> sure. i'll start with the latter.

kkr is literally across fifth avenue, almost more trump tower is. went over after having a variety of exploratory discussions with folks back and forth. and i think the way to understand where the president-elect and, indeed, his team are is to recognize that what they are now doing is a process where he personally and the team collectively are pretty -- putting policies around what understandably were campaign rhetoric. you run on very short statements, and now they're in the process of again putting architecture around that for true policies through true strategies. what we did actually in this conversation which i found fascinating was, talk about one of those campaign promises, if you will, campaign slogans. and then discuss what would be around it.

so should we rebuild the wall clocks we should build the wall but in the context of an overall comprehensive strategy to improve security on our southern border which would include more board officers, more reconnaissance assets assets, me technology, more this, more that, more work with our mexican neighbors. maybe more work with their southern border. and part of that should be a wall where there is not already a wall. so we had a lot of those kinds of conversations. they actually went both ways. he asked about nafta. worked on a council in foreign relations task force in north america that at five pages of issues that need to be resolved. this is together with bob zoellick. so i suggest, there will be talent issues we need to address. i'm sure they've issues they issues. they have issues. you call president pangaea,

prime minister kudrow, and hammer and hammer out some of these and more poorly it's driving the implantation forward through various bureaucracies are and that can move forward i think. i asked him i said, let me just satisfied myself. i'm someone who believes in global trade and believes it can't be reversed by and large. globalization is here to stay. there will be some backs and fourthsfourths, but i do recognt there have been sectors in our country and our economy where there are then serious losers due to global trade, and trade agreements whereas all the rest of us generally just pay a little bit less for sneakers or blue jeans or something like that. so for those who are affected this is an accidental issue. for the rest of us it's great. it's for the better wealthy to. what we need to do its batter was called trade adjustment assistance. this is the funding that is allocated in the legislation for these kinds of deals but takes

care of those who have been displaced, else retrain, we educate, what have you. it generally has not been enough overall and it has not been a sufficient duration. so that's one of the challenges within. i said, just want to understand, you are not anti-trade, your anti-unfair trade, right? he said that the gaza right. there was that kind of process, including its been going on, his team that is regarded right of different policies and all of the different transition team elements but it was a a stimulating conversation in that regard. we walked our way all the way around the world. and then you leave and walk the gauntlet of the press. actually it was interesting intd because then i went back across the street with the trailing press. stood there and uber, went off to the class with my 14 undergraduates. had fifth avenue and the honors

college of the city of university which was great. i have been very fortunate after government. worked hard at it. very, very privileged to be with kkr. i've been her three and half years, two years apart. it's one of biggest private equity firms in the world, about 130 billion under management. all over the world. i've been all over the world in retirement. many of them multiple times, places like mexico, canada, uk and others and the mideast countries as well. i also have these academic appointment. i teach once a week at the city of university in europe called the north american decades which is what i contend describes the pure in now. we are no longer in the american centric but we're not yet into chinese center or the asian city. he got a decade will be determined how -- as a good policy school right here at our nations capital, appreciate. and i've done it again for seven

semesters. i have a chair at the university southern california where i spend a week per semester doing all kind of different activities including our version of shark tank. i am a personal venture capitalist in 11 startups. and then i have a fellowship at harvard as well. we started this morning with an event for that over at the museum. i'm on the speaking circuit. this is the highest form of white-collar crime in america. [laughter] i do participate in that. it's great fun. i do want you to know that there is no speaking fee at all tonight. >> we are very grateful spirit pro bono. you have no idea how grateful. [laughter] and then i'm active with four think tanks and there's about 10 veterans organizations that i am in, along with -- it's hard to say no to those with whom we are privileged to serve in combat. so it's a personal experience, huge amount of traffic but i

managed to get home on most evenings when and not at the churchill library for dinner with my wife and family. we live in arlington and i have an apartment where my office is as well. i have been the favorite fortunate spirit so there's definite life after government. >> and he can be incredibly stimulating and that's the essence of a think what it is you're seeking. it has to fit together and it does. >> that's great. i thought we might step back a little bit and look at fairly recent history. churchill was by this may be it in 1940, but yours began in 2007. as commander of coalition forces in iraq, you inherited a you inherited a bidding war effort but under your leadership the situation was completely reversed. as you look back on that experience, what are the leadership lessons we can draw from what you accomplished? >> there's a lot of them, and the first is of course always about the team. there is no light in team and all the rest of that.

this happened to be a collective extraordinary effort. 100 city 5000 american men and women in uniform and tens of thousands of coalition and hundreds of thousands of iraqi partners. at the end of the day what really you should take from the surge in iraq is that the surge that adipose was at the surge of ideas, not the surge of forces. we added about 25-30,000 additional americans to an existing force that somewhere around 135-140,000. that was not predicted by itself that you would be able to drive the violence down by 85%. it stayed down for a good three and half years after that until tragically it was undone by the highly sectarian activities of every prime minister with whom we work to get the fabric of society back together. the real key then, the surge that mattered was the surge of ideas. it was the change in strategy. many of these were 180-degree shift from consolidated on big

bases as you would call julie with the people because that's the only way you can secure them. 77 additional locations just in baghdad, the vast majority which we had to fight for very definitively against an enemy who did not want us in there where they're trying to cause problems either as sunni extremist or shia militia. so the big idea piece of this was enormous. it was we're going to embrace reconciliation. you can't kill or capture your way out of industrial-strength insurgency so you've got to strip away as many of the rank and file as you can. then you had to expose the irreconcilable and jsoc, stanley mcchrystal and other guys with mike flynn by the way as intelligence officer, now the nationals good adviser designate, we went after them with even greater temple. we were doing 10-15 high-value target operations and night, a staggering number of those, building from a force that was

extraordinary but at previous to that had just been used for ship date dance or this other kind of stuff, rescue and hot assistance whatever. and that whole host of others that we wouldn't release detainees until we got the extremist out of the midst and had rehabilitation programs. that or going to integrate even more of the civil and military aspects of this. it's the big ideas. beyond that then that there are four task of the strategically you to perform all of them adequately really well actually. the first is to get the big ideas right and again for me that's not something where you get hit on the head by newtons apple fully formed if you sit at the right tree. it is generally a process where you start with a colonel of an idea and to shape it like clay. we would have the benefit of being many of us back in the state for 15 avenue mont spotted this will begin the counterinsurgency, field manner where we built the capital of which we drew, that's with a big ideas came from.

you had to giv get those right,u medicate them throughout the organization of you which way. the very first speech you make taking command command, a lettee first day to the soldier sailors and airmen and marines and civilians of the multinational force in iraq. all of this you doing, the commanders can we change the mission statement in the first week. we change the base document and first week and then you keep working that from there. and then you have overseen a limitation, the big ideas. how did you spend your own time? clerks what is your daily battle rhythm what your semiweekly, weekly, biweekly, monthly come all the way up to the quarterly combined campaign plan and review, civil military with the ambassador and th me writer together, the two of us with all the other nations ambassadors, all the three stars, two stars, others all there. a really, really painful

endeavor every time, about six hours but really important because that's how you try to campaign. so this rhythm of contact with these guys, the planners, the trainers, and on on. and then the last task which is often overlooked, and that is what you gather together, you're constantly trying to be a learning organization. this is we have to determine how the big ideas need to be refined and then you actually take the action. these are lessons, but they are not lessons learned yet. they are not learn until you are incorporated into the campaign plan, sop is, procedures, policies and so forth and you do it all over again. this works in the private sector. you think of a firm like netflix, hugely impressive. big idea, we'll put blockbuster and brick-and-mortar out of business by mailing cds out. they do that, works terrific until other struggling the same

thing. so then they decide now broadband assassin ecuador are now going to deliver movies by over the internet. that's great until of course others catch on to that and then they bid $100 million on "house of cards" and other so we'll do content and we will go all the way through that. they are still working that one. i know that cl reasonably well. kkr have used him to speak because we spent a lot of time on innovation and so forth. that is a hugely impressive from. you contrast that with kodak, which new digital photography was coming. this wasn't as if they missed it, and they got all the way down here and they were too slow to recognize a lesson they needed to learn. and so boom, you are gone. america online. americans will pay for dial-up access to the internet. they sure will bite up until google starts giving it away for free. so again it's who can adapt fast as and for whatever it's worth, coming back to the battlefield,

we had a very strong conviction that the side that learns and attach the fastest is normally the side that prevails. we to beat outside. >> thank you. we've learned the power of netflix at the international church and society, of which which i'm also executive director, because of john lithgow as portrait of churchill in the crown. spirit that's a great, big idea. >> absolutely. speaking of mr. churchill, he rallied his nation during the darkest days of world war ii with his great and uplifting rhetoric. but not everyone was so moved. the novel is mocked what he called churchill sham augustine pros and claimed he and his fellow authors hated the primus is broadcast. what do you consider the role of political rhetoric in war? in your long experience how did

the utterances of leaders affect the morale of your troops? >> i think it's hugely important. basically upfront, the communication is hugely important. that's the second task of the strategic leader, whether it's political rhetoric or military rhetoric or communication. and for what it's worth i have a speechwriter, a a couple different times for the nato commanders. a century for the chairman of joint chiefs, although i was executive officer for chief of staff of the army. so on fairly begun worth anything they do matter. as i mentioned the very first day i put out a letter to the troops and that was setting the tone that the number one task is securing the people pick the decisive terrain is the human terrain. and we can only secure it i live within so we will live with the people. you've got to distill those as well. i had a whole series, several pages of counterinsurgency guidance and started with admonitions.

one was the very first one, live with the people. there was one that said walk. so there was another one, promote initiative. that was added. and as i see the examples of initiatives, i would capture them and tried to distill them because again this is only a few pages. in the case i found on a company commanders plywood door of his command post in what used to be a series a difficult place in baghdad, and on there it said in the absence of guidance or orders, figure out what they should've been and execute aggressively. [laughter] so you're always looking for that kind of thing. but i think communication can establish the town, in part guidance, guidance, give energy, promote determination. think of the ringing words of churchill and how they steeled the citizenry of great britain. so hugely important. and again there's a whole variety of ways in doing this.

but i would caution that rhetoric has to be grounded in reality. you can't spew sunshine if it's been a really tough day. and, in fact, i made some changes. we had, in fact, a very senior guy, a couple stars, who is called the director of strategic indications i think of something like that. and who on one occasion when we had a horrible day in baghdad, three suicide car bombs in different major markets, hundreds of people killed, it went out and start out by giving good news. there was good news. yes, the soccer league did start back up. yes, this 11 ball is in operation over in sadr city and a couple of other these things but i said look, the baghdad is, the people of baghdad baghdad, w that this was a terrible day and we owed it to them, to our troopers, to everybody to step up to that microphone and say, today was a terrible day in baghdad.

here is what took place. here's the latest on that. here's what we're doing in immediate response to that. here is what we will do in the future. lay out all, we will never stop all of this but we are determined to stop more and to mitigate the risk. you have to again, you can't get ahead so the challenge is, if the political rhetoric is to ringing and then it's not backed up by action or what have you, then i think your problem on your hands and then obviously credibility starts to be called into question. >> to turn to an issue that has occasioned a great deal of rhetoric but far less action, as the fall of aleppo calls to my church is wartime words, tonight the sun goes down on more suffering than ever before in the world. president putin has shown no desire to slack in the russian campaign in syria and his

unwavering in his support of the assad regime. under present obama, the united states is mostly stood by. mr. trump has made conciliatory comments about putin and russia. what does this portend for syria and what should we do about the ongoing carnage? >> i think it portends more bloodshed and also may portend a situation which humpty dumpty can't be put back together again. it's hard to see. i just don't have a sense that bashar al-assad and his regime and sources in the lebanese hezbollah supporters and shia militia from the region, and even russian airpower necessarily will enable him to conquer all the remaining elements. in fact one of the big questions right now is, so reason a level. does he go back and get palmyra which he pulled troops out of that to take aleppo, and though the old isis is back in. so i think there's a real question about how far from how

much fun he can go, number one. number two, we have a real problem that he clearly can never have legitimacy in the eyes of the majority of the country which is sunni arab, albeit with a reasonable shia out of the white population which he springs within also syrian kurds and others through even christians and others in the population. but how to put them back together and then the dilemma is no, we all, regional policy of the present was bush are must go and he is not. now the challenge is that although none of us want to see him stay because again the legitimacy to him because he's the magnetic attraction for would-be jihadists from around the world, the concert is that he shouldn't go into you know what's going to follow him because you could actually get worse. so there's a real conundrum here. clearly, our focus is really twofold.

it has been. it has been to defeat the islamic state and al-qaeda affiliate. and that also just in some fashion to try to figure out how you're going to establish a way forward for the country. originally it was that he would go and then there would be a great consensus and you would end up with a multiethnic multi sector in pluralistic democracy and popularly elected in damascus. i don't think that is coming to a theater near as. i think you second objective has to be something that is stop the bloodshed, however you can do this without just completely capitulate because they are not going, the sunni arabs and others are not going to give in. and so at some point in time i think you sure them up further, may be time to do a no-fly zone. i say forecastle say gosh, the russians are there, you could precipitate a conflict. just be very clear. but, of course, it have to be ready. what you cannot do, needless to say, is have a redline crossed

and not act on it. that's very injurious to again to credibility credibility, note but around the world. and then at some point with the new administration, and this is the case where a new commander-in-chief, a new team can potentially embark on new opportunities. and i do think with eyes wide open about what president putin has ordered in invading georgia, crimea, don't ask, syria and the right of others threatening action in eastern europe and so forth, that the does need to be a strategic dialogue with him that start out at a very high level and then talks about what's actually unacceptable to us in article v guarantee that will come to the aid of anyone in self-defense in the nato alliance has to be absolute ironclad. but in discussing the other issues and what will be the

future in ukraine. how can we resolve the issues in syria? what are some of the other cases in which we actually get some mutual objectives. they want to say islamic extremists defeated just as we do. they have a bigger problem with it in their own home country that we do actually. so again moving forward in the way i think is going to be important. frankly i think o on the other side of the world even more important what would be the relationship between the number one and number two economies of the world, and that's u.s. and china. and again similar process to see if we can resolve some of the issues that could be flashpoints there. >> you mentioned china. president-elect trump is only shook a desire to shake up long existing diplomatic arrangemen arrangements. most notably bursting a congratulatory phone call from the president of taiwan. do you think this was a mistake, or is the time to revisit the one-china policy? i was a just and negotiating gambit having more to do with

trade than security policy? >> the truth is i really don't know without knowing how it was arranged and what the briefings were and whether people consider the pros and cons and all the rest of that. i like to think i do think there's foundation for it being the third was busy shaking up with it. this is a president-elect who has said repeatedly that he wants to be unpredictable in some respects. you have to be careful because you want to be seen as unpredictable and was called a crisis deterrent situation where they will think you need to take the first shot before you do. but in some situations that can be useful. i've actually seen comments by european leaders that say look, we really do finally had to get serious about spending more on defense. yes, we were lecture by secretary gates and by other u.s. leaders, but this is different. this guy is really serious. so i think they can actually be some beneficial effects out of that.

i don't think that you want to shake the one-china policy, nor by the way, do you forget the taiwan relations act which you want to remind people about as well. so this is very delicate stuff, and i think a little bit of a disturbance to the force is not all bad, but you do need to think about what is next and then what do they do and then what happens and then what do we do and so forth on down the ro road. >> another pressing issue, much debated and now with the new administration will be confronting, possibly new realities with iran. should a and more to the point perhaps do you think the united states will withdraw from the iran nuclear treaty? >> let me put that in context because again it's always really good if you take again what's a discrete action and then tried to put it into some kind of strategic context. li