deal in exchange better. yes, they would change coverage because they have more choice and competition. let's be clear about the first point. the second point, when you do props like this and you repeat 2400 pages, the truth of the matter is that health care is very complicated. we can try to pretend that it is not but it it is. every single item that we have talked about, if we wanted to sauce of lead deal with fraud and abuse, that would generate a bunch of pages. these are the kind of political things that we do that prevent us from having a conversation. not respond to your question. we could set up a system where

food was probably cheaper than it is right now if we just eliminated meat inspectors. we could eliminate any regulations in terms of how food is distributed and stored. i am betting in terms of drug prices, we would definitely reduce prescription drug prices if we did not have a drug administration to make sure that we test the drugs so they don't kill us. . . but we don't do that. we make some decisions to protect consumers in every aspect of our lives. and we have bipartisan support for doing it because what we don't want is a situation in which suddenly people think they're getting one thing and they're getting something else.

they're harmed by a product. what secretary sebelius just referred to, which is not a washington thing. in fact, state insurance standards in many states are higher than anything that's done in washington, is as a consequence of seeing consistent abuses by the insurance companies and people finding themselves helpless to deal with them. now, we can have a philosophical disagreement about how much insurance regulation is appropriate. what you have indicated to me just based on the bills that i've seen is, you guys believe in some regulations. you already said you did. you believe in making sure that you can't just drop somebody with coverage. now, if you don't have a law there, let me tell you, that happens all the time. i've got a bunch of stories in here of folks who thought they had insurance, got sick, the insurance company goes back and figures out a way to drop them.

i'm not making this up. i'm not trying to just add to the pages of that bill. it's in response to an actual problem and you guys have agreed to it. so philosophically at least, on a whole range of issues, you agree that we should have some insurance regulation. my suggestion had been that we try to focus on what are the specific regulations, since we agree that there has to be some, what are the specific ones that you object to. now, let me just close by saying this. pre-existing conditions is one that theoretically we all say we agree on. theoretically, everybody thinks it's a bad deal if my wife's had breast cancer, i lose my job, i now try to buy insurance, and they may well, you know what, we can't cover you because your wife has a history of cancer. we all think that's a bad deal. there are two ways of dealing

with that. one is what kathleen raised which is a high risk pool. you could say you know what, you can go in there and buy it in a big high risk pool. and by the way, you could probably set up a high risk pool without having as many pages in the bill. and it's an option that's been around for 30 years. here's the problem. what happens is the reason that all our rates as members of congress or as elected officials are pretty low, is we've got such a big pool, there are millions of federal workers, and as a consequence, any single one of us has cancer, any single one of us have a child with a disability, our costs are spread out over millions of people and so all of us are able to keep our rates relatively low. even though if any individual in that situation was trying to buy insurance, it would skyrocket. that's the concept of pooling,

is you get the healthy people and the young people alongside the not so healthy and the older people, but we're all kind of spreading our risk because each of us don't know at any given time what might happen. maybe our kid's the one who gets diagnosed, heaven forbid, for something. and as a consequence, we insure ourselves by making sure that we're also insuring somebody else. when you get into something like a high risk pool, what happens is all the sicker, older people are in that pool. all the younger people, they end up getting really cheap rates and overall, you could say well, that's how the market works, it's a good thing, there's more choice. there's more choice for the young, healthy person but not for the person who, heaven forbid, got sick. now, on pre-existing conditions, we've got a similar situation. the challenge we have, i would love to just pass a law that said insurance companies, you can't exclude people based on pre-existing conditions.

the problem is what they'll say to you is well, you know what, what prevents somebody from not buying insurance until they get sick and then going in and just buying it and gaming the system. so we've tried to respond to a difficult problem by saying well, let's make sure everybody has some coverage. without that, it's hard to do. so i just wanted to respond to yes, we've got a philosophical objection but let's not pretend that any form of regulation of the insurance market is somehow some onerous burden that's going to result in terrible things happening to consumers. that's a good thing. >> mr. president, if i could respond. >> if i can respond. we again have a very difficult bridge to gap here. i know that this is something that we don't want to look at, but these are as i said the complexities of what this is about w. when you start to mandate that everyone in this

country have insurance and you lay on top of that, now the mandates that we all would like to see in a perfect world, there consequences to that. we can't afford this. that's the ultimate problem here is in a perfect world, everyone would have everything they want. this government can't afford it and businesses can't afford it. we continue to say go step by step to address the cost and we can ultimately get there. we are asking that you set aside this mandated form of insurance regulation, this mandated form of health care regulation and go back to things we agree on without this trillion dollar attempt. >> the cost issue is legitimate and whether or not we can afford it, we will be discussing it. that's a legitimate discussion. >> can i have 10 seconds? we don't have a philosophic disagreement. if you agree that you can't be

dropped, there has to be dependent coverage. if there is no lifetime cap, you acknowledged that is the government's role. the question is, how far to go. to this idea we have a fundamental philosophic difference. you are in our you're out. the government can't do it or they can do some of it and how much? >> the cost issue is legitimate. we will address that. >> mr. president, if i could, it's the cost issue, but it's being driven by the fact that you have got in the bill and i assume this your proposal supports that the secretary define what a health benefit package should be. >> only in the exchange. only as part of the pool that people who don't have health insurance would buy into. if you were working at a big company that has a big pool, i want to make sure because we are going to end up in a back and

forth that cuts everybody else out. on the democratic side, a couple of people that want to speak and a couple of republicans. we are overtime. i burned some of it. i apologize. i am going to luis and then mike and tom harkin and then go back to dave. i have five speakers and i don't have a lot of time. go ahead. >> thank you mr. president and thanks to my colleagues who are here. i am timely and will not take up a lot of time, but i have to say some things. the first is the preexisting conditions has to go. it is cruel and capricious and done only against the bottom line. this was not even anything we talked about 10 or 15 years ago,

but i mentioned that all americans should be treated the same. let me give you a history. eight states have declared that domestic violence is a preexisting condition on the grounds i assume that if you have been unlucky enough to get yourself beaten up once, you might do it again. 48% is the higher cost for women to buy their own insurance. believe you me that is really a discrimination. in 1991 women were not included in the trials because we had hormones. it wasn't until we had a critical mass of women here that said this will not do for more than half the population of the united states who pay taxes and we made certain that diseases like osteo54osis and cervical cancer and uterine cancer were looked at. up to that point, 1991, all research at the institutes of

health was done on white males. think about that for a minute, if you will. we couldn't do that because we said can you stop doing that? it took legislation. doing this will take legislation. i have been through this before. i was here when we had the clinton debate. it started some of you will remember by lee iococa who said we cannot export automobiles. there is a $1,000 cost for health care in every one of them. my competitors are way ahead of them. they are eating my lunch. that was one of the main reasons that we decided we had to do something about that. in the 13 to 15 years since that happened, we have done nothing about health care and don't export so much anymore and the automobile business is basically gone. we have done nothing to encourage entrepreneurs. we need to think about the economic benefits of doing this.

they will reduce trade policies and let us make something else in the united states and really want to make sure that it's t succeeds and this would be a great part of that. i think it's terribly important that we do that. also since the clinton health care plan, we have seen awful things. we saw hospitals abandoned to the streets. critically ill, elderly, mentally ill persons and there was no great cry out there. now i understand there is actually a proposal which god knows i hope never sees the light of day that shot down medicare and turned it into a voucher system. obviously we were not paid the full cost health care as they go to the public market to try to find something. what are we going to be doing then? once again abandon our elderly and mentally ill and our seriously ill to the streets.

we are better people than that. it would be a good thing for us while we are here in this room together to think about what's important here. not nit pick, but think about all the people out there every day, the number of people that have excess deaths because they have no health insurance. i have 1 constituent that you won't believe and i know you won't, but her sister died, this poor woman had no dentures. she wore her dead sister's teeth which of course were uncomfortable and did not fit. do you believe that in america that's where we would be? this is the last chance as far as i'm concerned on the export business. we have fallen behind and no longer the biggest manufacturer in the world and lost our technological edge. we have an opportunity to do that, but the major part of the success of that is getting this health care bill passed. thank you very much. >> louise, thank you.

i was just inform and by the way, this has been a terrific conversation so far. the house had to schedule a vote on an item and my understanding is it already started. so what i would like to do is this. we have got four remaining speakers, mike, dave again and as well as tom harkin and jay rockefeller. i would like to break so that the house can take the vote and when we come back, we will start with mike and we will return to finish up the issue of insurance reform and then we will move on to the questions of coverage. >> mr. president, can i -- >> we are scheduled to be back here at 1:45. >> i want to inform the house members, there is only one vote. the vote is on and they will hold it until we get there.

we need to vote and come right back. >> thank you, everybody. >> everybody, let's get started.

ok, all right, there were several people who were still in the queue who did not have a chance to speak prior to us breaking. the topic was still insurance reform, although these things relate, and i suspect people may have other issues they may want to raise. after this, we are going to go to the issue of deficit, which touches on some of the issues related to medicare that have been raised already. i am going to have joe biden open that up. >> [inaudible] >> we will be talking about health reform.

i guarantee, you will have a chance to talk about all these issues. >> mr. president, what time do you expect to end the meeting? >> my hope is we get out of here -- we are running a little bit late, but for having a lot of elected officials around the table, we are not too late. my hope is that we can adjourn by 4:50. ok -- for a cut 15. we were originally scheduled -- 4:15. we were originally scheduled to be out by 4:00. that will require more discipline. discipline on all our parts including myself than was shown in the morning session, but i thought the tone of the discussion was helpful and i appreciate everybody's participation so far. with that, i'm going to go to mark lindsay. i'm going to go to --

>> if you're talking about leaving, mr. president, please put me on the list. >> i guarantee you guys are all going to have a chance to speak. but we're going to go to mike enzi and then we're going to go to tom harken, i know we had jay rockefeller was still on the list, was there another republican that wanted to speak just on the insurance reform issues? going to john barazzo. well, all right, we'll let you guys split time on this one. mike. thank you plpmr. president, whe we're talking about insurance refochl. that's medicare. seniors out there are really nervous. seniors are the ones objecting

the most in the program and it's because they see half a trillion dollars coming out of their program. if medicare were separate and any savings that we did in medicare reform went back into medicare, it would do a lot to relieve the tension that's out there, it would even be a way to pay for the dock fix. i'm hoping that could be a piece that we're doing. i really appreciate this exchange, it would have been helpful if we had had this nine months or a year yearearlier and it for more days. we had a bill that was half started and we got the markup on it and we got the other half. since we did not have any input into the drafting, we had 117 amendments. 17 of those amendments were where senator markowsky had 11 -- so the ideas that we had,

when senator kennedy and i were working bills, would set down some principles and put some details in and draft the bills together. in a three-year period, he and i got 13 bills signed by the president. in the last year, i've gotten -- the way that we have done that is through that kind of a process and unless we know that process, i don't think we can get to the bipartisan thing. that's what the purpose of this meeting is to get these ideas toblgt and see how they gel. the small business health plans, that's different than the ahps which is what they're talking about. one of the problems is mandates and olympia snowe contributed to that part. she had a provision that if 26

of the states adopted a mandate, it would be a mandate nationwide. and as other mandates became 26, they would be included with the two. we talked about health savings accounts. i don't think that meets some of the federal minimum standards that the federal government might put on it. and that's going to disappoint some of our employees because that is one of the options that federal employees have is health savings accounts and it's particularly good for the younger, healthier people, they can get that, they have got catastrophic coverage, if they put the amount of money that they would have spent on a blue cross plan or some other plan, in three years they have covered the huge deductible and they can continue to do that tax free. so it's a process that would be really objected to if it's excluded or changed. i like the exchanges and the

reason i like the exchanges is that it's kind of a form of bidding, it's more transparency and people can see what they're buying. my wife after three years decided we had bid out or insurance. we didn't know there was that much flexibility in insurance, she saved a bunch. it was kinds of a fixed price and so she didn't take the low bid and say can you make this a little bit lower. that insurance company said we could have made a better deal. so these exchanges can be good. but what i would hope you would consider is having the exchange list anybody's insurance that wants to put it on there and then mark the ones that meet the federal minimum standards so people can understand what's out there in the market and i think it would pull some of the ones that are lower down up into the

category and people could see what all's on the market out there, hopefully regardless of states, thank you, mr. president. >> thanks, mike, and thanks for staying succinct. very much. you shared some important eyes there. today i think if anything, what i have learned here so far is that quite frankly we may be closer together than people really think. i keep thinking we have got to bring it back home to what this is all about. i am i'm a farm never iowa, i'm writing to voice my concern

regarding my family's rapidly escalating health care costs. on saturday february 20, i received a letter informing me that our health insurance premium will be increasing 193.90 per month. this is a 14 .6% increase. and will result in a yearly cost of 18,194.40 for a family of four. ten years ago, our monthly health insurance premium was 360.50 per month for a similar policy which had a lower deductible and covered three additional children. health care costs are out of control and as a self-employed individual i feel powerless. by the time i reach medicare age, my premiums will be cost $42,000 per year. as a farmer i manage risk on a

daily basis. weather, weeds, insects and fluctuating commodity prices. i have not yet found a way to control my exposure to health care expenses. i have been covered under more -- i am stuck in an expensive pool and have few options. the best option would be for congress to pass health care reform providing health care for all. sincerely, raymond smith, buffalo center, iowa. mr. president, we spent, i hear talk about how we got to start over and do all this thing again. we spent one year considering a range of ideas from experts from all over the political spectrum. two committees, the health committee under the leadership of senator dodd held over 100 by

partisan meetings and walk throughs, our bill contains 147 distinct republican amendments. now on the issue of health insurance reform, of the ten key elements in the house bill, we have nine of them in our bill. nine out of ten, that's not bad. the only one that's missing is the health savings accounts. but nine out of ten are in our bill that are in the house republican bill. no recession when you get sick, no lifetime annual caps, no gender based ratings, keeping your skids on until they're age 26. that's in the house republican bill, that's in our bill. i think we're very close on this. the last two things i just want to address myself to is this idea that somehow we can do a little bit. we can take an incrememental type of an approach.

somehow we can do insurance reforms but we don't have to do anything else. quite frankly if we want insurance reforms, you can only do that if everybody's in the pool. you can only get everybody in the poolive you make it affordable for middle class families and others. you can only make it affordable for middle class families and others if you have cost controls. what i'm saying, mr. president and others is this all hangs together. you can't pick one out and do it without doing it all together. it all hangs together. cases in point. some states in the '90s tried to do health insurance reform without doing anything else and they found it to be a debacle because the insurance premiums skyrocketed. new hampshire, kentucky and washington were forced to repeal their reforms because of that. case in point, massachusetts in the '90s, put in health insurance reforms and not anything else, individual market premiums doubled.

four years ago, when they did their comprehensive reform and they put the package together, premiums dropped by 40%. in massachusetts. that's why you can't do this incrememental approach. every time i hear about, we're sinking, we're drowning in this country on health care. an incrememental approach is a swimmer who's 50 feet off shore drown and you throw him a 10-foot rope. and you say well, it didn't reach him, but we'll throw him a 20-foot rope next time. then a 30-foot and by that time the swimmer has drowned. and that's what's going to happen to everybody in this country, they're going to drown if we do this kind of incrememental approach they hear others talking about. lastly, i would like to put this in a different kind of a cont t

contextual frame work. we don't want to allow discrimination in our country, on the base of -- 20 years ago we also said we're going to allow segregation on the issue of disability when we passed the americans with disabilities act. yet we still allow segregation in america today on the basis of your health. why should we? why should we allow that to happen? it's time to stop segregating people on the basis of their health. that's why insurance reform is so vital, because the health insurance reform in this think about that. whenever i hear the word poole, i think segregation. you are segregating people because of their health status. i think it is time to end that.

i sold insurance when i was a young man, and there is one principle i learned then i never forgot. the more people in the pool, the cheaper it is for everybody. you start setting of these pools, you're going to make it more expensive, and you're going to start segregating people on the basis of health care. it is time to stop that kind of segregation in our country. >> dave camp. >> thank you very much. on the issue of insurance reform and pre-existing conditions, there are responsible ways to solve this problem and reduce the cost of health insurance for everyone. we support state universal access that has affordable coverage available to those who are sick and those with pre- existing conditions, and i will not go through all those things that others have talked about,

and our approaches are somewhat similar on this issue, pre-2014 and in the time when the health incentives bills are ramping up. there's a pretty big distinction, and that is there is the key difference in the approaches. we prevent waiting lists during that time, and we have these programs managed by the state level, and they are robust enough, and what the house and senate approaches are that those rules are set in washington, and the house and senate bills are similar in that you looked at the senate bill on page 48, 51, and 52, it is the department of health and human services that can set up a waiting period, raised premiums, and while we are similar and what we talk about, there is the key difference in the

there's a very key different approach there. and then after 2014 when the bill fully comes into play. you have a very different approach there, and what you do is establish a preexisting condition and link it with the individual mandate. and the american people have told us they don't want to be forced to bye health insurance that they don't want and they can't afford. and this is a significant issue across the country. and the american people are telling us that the individual -- the mandates, the requirements to buy insurance are something that they want us to scrap and start over on. that's kwli're seeing state legend fors around the country passing resolutions saying our citizens are going to have a choice on whether they buy health care, they're going to have a choice on the kind of coverage they want to have.

this is a fundamental difference in this area of insurance reform that we really have to begin again and really take into what the american people are saying and expressing this through the state legislator. i know there's a lot of former state legislators here and i'm one as well and i think that's a very serious point that we need to address. >> the way you deal with a preexisting condition is essentially set up a high-risk pool. that's the mechanism. so what you're saying is if you're sick or older or you got hip replacements or what have you and you're having trouble buying insurance on the open market, you're going to be able

to buy into a high risk pool. tom made the point earlier, that and this is indisputable, i don't think anybody would disagree with that, if you set up a high risk pool in which you don't have healthy people, younger people in the same pool as the older sicker pool, we looked at the boehner bill to sort of see how you approach that and you've got some reinsurance and we use a high risk pool as well until you get to the exchange and we have reinsurance for federal people -- for people who are on retireee plans, we want to help employers maintain those plans and they've got an older population, so we want to help

reinsure them. given the a lot of money that you have allocated for that pool, it's just not going to be a very useful tool for the vast majority of people who's government preexisting conditions. it's just not enough for the people that you put into it. which is why other states have high risk pools that kathleen mentioned, they're -- i don't know how many states, but let's say 20, 21 states currently have high-risk pools, out of all those 21 states, about 200,000 people use the high risk pool. and the reason is because by just dealing with older, less health people separately or people with preexisting conditions, it is very, very

expensive. tom's point was if everybody's in it. because presumably none of us know who's going to be end up being healthy and who's not. we don't know whether our kids are going to be suffering some sort of disease that we don't anticipate yet, that our spouses get ill, if everybody's in it, that drives the prices down cheaper for everybody. it's not that i think that the high-risk pool idea is a bad one. the house, the senate bill and the proposal that i put forward all use the high risk pool as a stopgap measure to get to a broader pool, but the goal has to be to get everyone in in a place where those risks are spread for broadly. and if i just might say the

house and senate versions are 5 to 7 million. cbo says this will work. the fundamental difference after that is that the health and human services has the authority to raise the premiums, so all that is brought to washington, we lead that authority in the states so that they can manage their state pools. so that the real problem becomes the mandate and the cost, the forcing of the purchase of insurance which and both plans are somewhat similar on that, but it's a very tough structure. what i would like to do is move on to the topic.

>> we still got jay. we haven't discuss ed and that s the way and the nature of the health insurance industry for the most part. they are among all industries i have ever encountsered and we have spent a year analyzing and bringing out some of their sins and ills. they're terrible, they're in it for the money. a nice lady that running well point, says we will not sacrifice profitability for membership. money first, people second. we had a man named wendell potter who worked for cigna for 20 years as a high executive.

he came before us on his own and volunteered and described the way health insurance companies operate. they are looking for reasons to kick you out. they are looking for reasons if you already had the health insurance for doing the rescissions, yes, we're going to ban those, but not unless we pass a bill. you can be paying you're people mums and then you discover they come up with something you found in your background and they just kick you off, they can do that now legally. people say, well r, that's the situation we have now, but 44 of those -- 44 of the 50 states make it perfectly legal for

health insurance companies to do this preexisting condition, to simply deny coverage for something which people just got sick, babies or as adults or whatever. i got a letter from the ceo of cigna, written to me, and he said, i want to apologize because we had said that we spent $5 billion on the small group insurance market.

they can do what they want, and they do. it makes me sick. it should not happen in america. people said government-run. you have got to do this or put that restriction on it. if you do not put the restriction on it, they are going to go on to this. on them, they're going to go on doing this, and so, you know, the public option was, i like that a lot, but that's not going to be possible. you have to go at them to clip their wings in every way that you can. and that's why -- and with this general agreement on preexisting conditions and rescissions and

he had leukemia and he had annual limits and he ran out and then he died. because there was no insurance. could they insure his cancer? i don't know, but that's what insurance is for. this is an industry that does what it wants. unknown in their behavior, that's not in there for some government makes that decision purpose, it's there because you got to have a big pool. everybody's made that point. i got a son who's old enough to have health insurance and doesn't have it. and when my wife and i found out

about it, we told him to get it the next day, he didn't think he needed to have it. he would live forever. that's why we have the requirement, people sign up for health insurance, they don't know that they need it and he doesn't know if he's going to need it. so you're going to make everybody participate. and then you're going to have -- what we're going to say is that this health insurance industry says they spent 87% of all of their revenues from premiums and investment they might have on health care. that doesn't work out quite that way for a large businesses, they do a much better job, but for small businesses and the individual market, they're down in west virginia, in the high 60s and low 70s.

so how do you stop that? you can't stop that by asking them to, you stop that by having a law, which is a good law, saying that you have to spend between 80% and 85% you take in for medical care for your patients and if you don't, we will know about it because we'll be tracking it and then you have to rebate that difference to the people. so there's a reason , the rate review. and i wish we could talk about the medicare board, which is controversial.

>> we will have a chance to talk about it next. if kathleen sebelius is to be called and on elected person, and she is head of the group -- an unelected person, and she is head of the group, and she knows the whole thing, i do not call her down because she is not elected but was appointed by you, and it was a brilliant choice. people said decisions cannot all come from washington. sometimes decisions have to come from washington, because what we are about is not trying to run by government. we are trying to protect consumers, and if you are going to protect consumers, you have to find a way they are going to

have protection and they feel it in their lives, so this insurance reform is important. it is a profoundly emotional subjects, and we have got to do something about it. >> mr. president, mr. blackburn was on the list i saw before we left. >> thank you, mr. president, and one of the points we did want to cover today was the across state lines purchasing of insurance. you have alluded to that a couple times and mentioned you felt we were close on that issue. is think there are some important structural differences in the way we approach this, just as i think there are very deep philosophical differences in how we approach health care reform. a lot of people i talked to want us to start over in this issue, and they want us to get the -- give them the ability to hold

insurance companies accountable. one way is through robust competition, and when you have a district like mine in tennessee where the bulk of our constituents are within 15 miles of a state line, the ability to have families and work and employees on other state -- other sides of the state line to shop for purchases every day is to be allowing them to make those purchases. from them, then give them the ability to buy a policy that suits their needs. they are really tired of paying for coverage they don't want. if you want to prevent premium acceleration, such as the issue in california right now. where the premiums have gone up 39%.

if you are siding with protecting those insurance companies and not allowing across state line competition then what you're doing is denying californians from buying a policy across the state line and lower their cost 26% or go to wisconsin and buy one and lower their costs 74%. now some of the very differences in our bill, we have a way to do this without putting a federal bureaucracy in charge of it. states can already do compacts. but the senate bill legislation would require state action and -- there's another important point here, the bill that you all are proposing would not put

these in place until 2016, and quite frankly, i think a lot of american people would care access delayed as care and access denied. basically they have state line when it comes to across state line access, they would like to see that come down and would like to see those access portals opened up so they can first lower their cost and secondly so that they have greater ability to hold insurance companies accountable and also state legislators, even some of our governors, many of the governors favor approaching this model and allowing our constituents a way to access this, get the costs down and i will be brief so that we can move on to other topics.

i'm going to address that pretty briefly and then i'm going to turn it over to joe. i support the idea of purchasing insurance across state lines. and you're right that the way we structure it is to have compacts between states so that you start getting a regional market. i think there are two things that are important to understand. number one, with respect to california for example, the problem as was presented yesterday in california, was not that there were a whole bunch of insurance companies from other states who were clamoring in to get insurance to those individuals who saw their premiums spike by 39%, there weren't. the problem has to do with the fact, according to them, that people who have lost their jobs

now, who are health y, who say they're not going to get insurance because they can't afford it. but there's poem who have to keep their insurance so the pool has become older and sicker. now the way to get at that problem is actually what we have discussed earlier which is to broaden the pool. make sure everybody's in the pool. and that's what the exchange is. i actually think that on the purchasing insurance across state lines, there may be a way of resolving the philosophical difference, not entirely, but there's a potential way of

bridging these gaps, once there was a national exchange with the national market place and anybody could be able to sell into the exchange. this is something that mike enzi just mentioned. i think that might be workable. on the mandate, because the mandate issue is connected. i'm just going to mention this real quickly and then i will move on. when i ran in the democratic primary, i was opposed to the mandate. >> bless you. >> and -- because my theory was, you know what, the reason people don't have health insurance isn't because somebody's not telling them to get it but because they just can't afford it and if we lowered costs enough, then everybody would be

able to get it. so i was dragged kicking and screaming to the conclusion that i arrived at which is that it makes sense for us to have everybody purchase insurance and i have to say this is not a democratic idea, i mean there are a number of republicans sitting around this table who have previously supported the idea of an individual mandate. response. -- responsibility. the reason i came to this conclusion is twofold, one is cost shifting, which is a fancy term for saying, everybody here who has health insurance is one way or another paying for those who don't. every time somebody goes into the emergency room, if jay's son got hit by a bus and his dad wasn't jay rockefeller and he ends up in the emergency room, we would give them emergency treatment, and we don't pick up the tab. and the calculation, not our

calculation, but independent economists is that each family with health insurance right now is picking up $1,000 to $1,100 worth of costs for people who don't have health insurance. when tom coburn earlier said when a kid comes to the emergency room they're going to get treated, who's paying for it? we're paying for it. every american who's got health insurance is paying for it and every employer who provides health insurance for his employees is pay fogger it. so is knowing that we don't ask people to carry their responsibilities, that we're saving money, we're not saving money, it's just we don't see it. it's called uncompensated care and we all get charged an extra $1,000. so that's part of the reason, the second reason has to do with the issuing of preexisting

conditions and the pool that we have already discussed. you had one thing that you wanted to respond to? >> i would just suggest that we're looking at this from in your example, we're looking at it the wrong way, you're talking about letting companies into california. i'm talking about letting individuals out. >> but it's the same idea, marsha, it doesn't matter whether there are companies going in or people going out. >> free it up. >> no, no, i promise u you that the problem that's going on in california is going on in every state. it's not unique to california. it's not as if there are insurance companies that are giving great deals in iowa. that gentleman farmer he just talked about. these are structural problems that exist in every state, what is true, i want to say this, hold on a second, what is absolutely true, is that some

states probably have higher mandates than others and so you can probably attribute a certain amount of the cost in a high -- a state that has more requirements for bare minimum coverage, doesn't allow drive by deliveries or requires mammograms or what have you, those things may all have some incrememental cost, but the truth of the matter is that that's not the reason that you're seeing such problems. in a lot of states the problem is you just don't have competition at all, we want competition, we just want some minimum standards. let's talk about costs because and now we're not talking about costs to families, but we're talking about deficits, we're talking about deficits, it's a good place to talk about medicare as well, because it's been brought up several times. joe, go ahead. >> mr. president, there's a lot to talk about, i would like to focus it on the deficit. the impact on the deficit, which we're all talking about. and i must tell you, maybe i've

been around too long, but i'm always reluctant after being here 37 years to tell people what the american people think. i think it require s s it probably takes place on social security. it was mandated. it was mandated because everybody knew you couldn't get insurance unless everybody was in the pool. and you knew if only some people were in the pool, a lot of people knew when they got old we would take care of them anyway, and you would have to pay for them. i'm not making it exact, but it's the same philosophic debate

that took place back in the $$30 '30s. if i can lay out what we think we all agree on. and then to bend the cost curve, to use a phrase you and many others have used. first of all, everybody agrees we have the finest docs and the finest hospitals and the finest nurses in the world. we don't have quite enough of them, but we have the finest. everybody also agrees that senator coburn is right, that we waste a heck of a lot of money and that somewhere around a third of all the dollars we spend on medicare goes for nothing useful. the third thing it seems, i assume we can all agree on, is that over the last decade, costs have doubled for health care in america, costs have doubled for government provided health care, and everybody's health care, and that meant that, you know, right now, everything knows that that wrecks budgets.

it wrecks state budgets, it wrecks family budgets, it wrecks federal budgets. every 35 cents of every dollar spent on health care is spent by the federal government or the state governments for medicare or medicaid. 35 cents on the dollar. that doesn't count veterans and other things, just those two. and so, what's happened is, on the dollar, on every health care dollar. and so we're facing all of us around this table, democrat and republicans are facing the fact that there's $919 billion we are going to be talking about in the year 2019, we are going to be spending 1.7 trillion dollars if we didn't -- if we do not do something, and the fourth one we can agree on

is the cbo has gone out and scored the various plans, and everybody is acting the same. john's plan goes over 20 years, and i do not know if that is the republican plan, but john's plan cuts the price by $300 million. the senate plan cut it by over one trillion dollars. we can argue on the margins, but the fact is this is not just the cbo that said this. you would have the roundtable study that shows the senate plans to slow growth by 15% to 20% and the business costs by employees would be $3,000 less per employee.

it may be wrong about the exact amount. it may be 3800, but you cut costs, so it seems to me -- i might add that in the process, it was not specifically part of a long term debate, but as has been pointed out, we are not cutting medicare benefits. kn know, we're not cutting medicare benefits in this. we're trying to eliminate a third of the problem as a waste, and as senator enzi who i have an inordinate amount of respect for, it would be nice if we put some of those savings back into medicare. the fact is we do, we closed the prescription drug doughnut hole, we provide for preventive care

for seniors, which they don't have now without a co-pay and we also, it's -- most major study agrees that it's going to extend the life of the medicare trust fund and it -- these changes, the actuarial group that pointed out it would save about $200 on a premium per medicare recipient out there that people are paying. and the source of how we do this is getting rid of waste, making sure we don't overpay insurance companies for medicare advantage, i want to remind everybody about medicare advantage. because some of us around here, probably all of us around this table were here when it got put in. what was the rationale for medicare advantage? the rationale for medicare advantage years ago was that

private insurers could provide insurance, better insurance cheaper than the government can do it, they can do it better. we said the reason why we're going to pay them more than what they're going to give at the front end is to incentivize them to get into the business of doing it. so we paid them $1.15 for every dollar's worth that could have stopped for a dollar. it was a rational thing to try. we did that because we wanted them to get engaged in the business we thought government didn't do as well as the private sector did. here we are, we're overpaying insurance companies about 15 cents on the buck, that we can buy for a dollar and we call for eliminating that. and so the other point i would make, mr. president is that we're in a situation here where at the end of the day, nobody in this room, i don't think anybody in this room is going to say,

you know something? we're really going to be refo reforming the health care system without affecting the effect on the long-term deficit. unless we bend that cost curve, we're in trouble. and mr. president, we can argue which we will about whether or not the way you and i want to go after dealing with the long-term debt, whether commissions make sense, whether or not we're ever going to deal with entitlement, this is a big entitlement. this is a big entitlement, medicare, it exists, we got to figure out how to keep it bankr country without denying seniors what they are entitled to in a nation like ours -- decent health care that provides for their needs. so i would like us, mr. president -- i'm going to hush -- i would like us to talk about, if we can specifically what we all agree on. what do we do about bending the cost curve?

what's the best way to do it? and i yield the floor. >> mr. president, mr. ryan's going to open this conversation on behalf of us. >> thank you. >> look, we agree on the problem here and the problem is health inflation is driving us all to the fiscal cliff. you have said health care reform is budget reform. you're right. we agree with that. medicare has a $38 trillion unfunded liability. that's $38 trillion in empty promises to my parents' generation, our generation, our kids' generation. medicaid is growing at 21% this year suffocating state budgets, adding trillions in obligations that we have no means to pay for it. you're right to frame the debate on cost and health inflation. in september when you spoke to us in the well of the house, you basically said -- and i totally agree with this -- i will not sign a plan that adds a dime to our deficits now or in the future. since the budget office can't

score your bill because it doesn't have of sufficient detail but tracks similar to the senate bill i want to unpack the senate's score a little bit. if you look at the cbo analysis, analysis from your chief actuary, it's very revealing. this bill does not control costs. this bill does not reduce deficits. instead, this bill adds a new health care entitlement at a time when we have no idea how to pay for the entitlements we already have. let me go through why i say that. the majority leader said the bill scores as reducing the deficit $131 billion over the next ten years. first, a little bit about cbo. i work with them every day. good people, great professionals. they do their jobs well, but their job is to score what is placed in front of them. and what has been placed in front of them is a bill that is full of gimmicks and smoke and mirrors. what do i mean when i say that? first off, the bill has ten

years of tax increases, about half a trillion with ten years of medicare cuts about half a trillion to pay for six years of spending. what's the true ten-year cost of the bill? in ten years that's $2.3 trillion. it does other things. it takes $52 billion in higher social security tax revenues and counts them as offsets but it's reserved for social security. either we are double counting or don't intend on paying social security benefits. it takes $72 million in claims money from the long-term care insurance program. it takes the money from premiums designed for that benefit and instead counts them as offsets. the senate budget committee chairman said it is a ponzi scheme that would make bernie madoff proud. when you look at medicare cuts this bill treats medicare like a piggy bank. it raids money to spend on the

new government program. when you look at what this does is according to the chief actuary of medicare he's saying as much as 20% of medicare's providers will go out of business or will have to stop seeing medicare beneficiaries. many seniors who chose medicare advantage will lose coverage they now enjoy. you can't say you are using the money to either extend medicare sol general si and offset the cost of the new program. that's double counting. when you strip out double counting and what i call gimmick. the full ten-year cost of the bill has a $460 billion deficit. the second has a $1.4 trillion deficit. probably the most cynical gimmick in the bill is something we probably agree on. we don't think we should cut doctors 21% next year. we have stopped the cuts from occurring every year for the last seven. we call this the doc fix.

according to your numbers that costs $371 billion. it was in the first iteration of all the bills, but because it was a big price tag and made the score look bad, made it look like a deficit that provision was taken out. it's been going on as stand-alone legislation. ignoring the costs doesn't remove them from the backs of taxpayers. hiding spending does not reduce spending. so when you take a look at this, it just doesn't add up. let's finish with the cost curve. are we bending the cost curve down or are we bending the cost curve up? if you look at your own chief actuary at medicare, we're bending it up. he claims we're going up $222 billion, adding more to the unsustainable fiscal situation we have. when you look at this, it's really deeper than the deficits or the budget gimmicks or the actuarial analysis. there really is a difference between us. we have been talking about how much we agree on different issues but there really is a difference between us.

it's basically this -- we don't think the government should be in control of this. we want people to be in control. and that, at the end of the day, is the big difference. we have offered lots of ideas last year, this year because we agree that status quo is unsustainable. it's got to get fixed. it's bankrupting families, our government. it's hurting families with pre-existing conditions. we all want to fix this. we don't think this is the answer to the solution and all the analysis we get proves the point. now i will simply say this and i respectfully disagree with the vice president about what the american people are or are not saying or whether we are qualified to speak on their behalf. we are all representatives of the american people. we all do town hall meetings and talk to our constituents. the american people are engaged. if you think they want a government takeover of health care i would respectfully submit you're not listening to them. what we want to do is start

over, work on a clean-shaded paper, move through the issues step by step and fix them and bring down health care costs and not raise them. that's basically the point. >> i'm going to call on javier, but i want to follow up on some points. there are strong disagreements on the numbers here, paul. i don't want to get bogged down. the first question i have is whether your side thinks medicare advantage is working well. because i think it's important to point out that when we keep on talking about cuts in medicare what we are really talking about is what joe alluded to which is the decision was made a while back to set up a system in which medicare costs, let's say a dollar, under

the government program that 80% of people still use and are satisfied with and there is no showing that it's not working for them. we said we'd give it to private insurers and we'd give them a bonus of $1.15 for every dollar in the normal plan. and it turns out that people aren't healthier because of the extra 15 cents. it's estimate aed that it's costing us about $180 billion over ten years, say $18 billion a year. and essentially what my proposal would do and what the house and senate proposals would do would say instead of having the insurance companies get that money, let's take that money -- the savings are between $400 billion and $500 billion a year, and let's devote some of the money to closing the donut hole which has already been talked

about. seniors who need more prescription drugs than medicare is willing to pay for hit this gap where suddenly they have to use it out of poblcket. they just stop taking the drugs or break them in half. that costs about $30 billion a year or $300 billion. and, let's make some other changes that would result in actually the 80% of seniors who aren't in medicare advantage getting a better deal. so we can address the broader issues, but i just want to focus on medicare advantage because i haven't seen an independent analyst look at this and say, seniors are healthier for it or taxpayers are better off for it. that's what we are talking about reforming, not cutting benefits under the medicare program as is required under law.

what we are talking about is medicare advantage. it may be that some people here think it's working. i know there are some republicans sitting at this table who don't think it's working. you can argue and say, okay, let's not do medicare advantage and let's not close the donut hole, for example. or, you know, there may be other ways you want to spend the money. i want to establish whether we have agreement that the medicare advantage program, which is what we are proposing to reform is actually not a good deal for taxpayers or seniors and certainly not for the 80% of seniors who aren't in medicare advantage. because, by the way, they are paying an extra treem yum of $90 a year to -- premium of $90 a year. >> john mccain would also like to address that issue. >> i'm sorry. somebody else wants to address it. >> i'll just make one comment. why in the world would we carve

out 800,000 people in florida that would not have the medicare advantage cut. i propose an amendment on the floor to say everybody will be treated the same. mr. president, why should we carve out 800,000 people because they live in florida to keep the medicare advantage program and want to do away with it? >> you make a legitimate point. you do.@@@@@ @ @ @ @ rn%@ @ @ @r

donut hole by takinging away from people who can't afford to buy a supplemental policy that's where medicare part a helps poor people in oklahoma. they get to buy medicare part c -- we never call it part c, but that's what it is. they don't have to buy a supplemental policy. consequently they get lots of benefits that other people with better buying power in medicare with a supplemental policy, so it's a trade-off of whether or not we say where are we going to give the benefits. we should be saying, we're broke, medicare's broke, we're struggling together to get there. let's not add new benefits anywhere and let's make sure the benefits we have today are applied for eckequitably. >> that's a legitimate point.

80% of seniors are helping to pay for the 20% in this medicare advantage. it's not means tested. it's not as if the people who were in the medicare advantage are the poor people who can't afford supplementals. it's random. we also know -- and i want to point this out, tom -- $180 billion is going to insurance companies, not seniors. including big insurance company profits. with any appreciable improvement in health care benefits. that's not a good way to spend money. i agree with you about the fact that the prescription drug plan added to deficits because we didn't pay for it. that didn't happen under my watch. there are people -- john is an example of somebody who was true to his convictions and didn't vote for it. >> i didn't vote for it. >> but the fact is that was

costly. do we have to deal with that? >> on the other hand, the problem, i don't think, is that we gave seniors prescription drug benefits. the problem is we didn't pay for it. taking the money out of medicare advantage and putting it into the donut hole does pay for it. i breeched protocol here, but i thought that was important to get clear. we are talking about medicare advantage in terms of where the cuts come from, not medicare benefits through the traditional medicare plan. javier? >> thank you very much for bringing us all together, mr. president. i want to discuss something my friend paul ryan said. i almost think we can't have this discussion further without addressing something paul said. paul, you called into question the congressional budget office. now we can all agree to disagree. we can all have our politics. but if there is no referee on

the field, we can never agree how the game should be played. >> let me clarify to be clear. >> let me just finish. so i think we have to decide do we believe in the congressional budget office or not? paul, you and i have sat on the budget committee for years together and on any number of occasions in those years you have cited the congressional budget office to make your point, referred to their projections to make your points and today you essentially said you can't trust the congressional budget office. >> no. that is not what i'm saying. >> i apologize if i misinterpreted it. paul, if i could just finish. >> i'm questioning the reality of the score. >> okay. i take your point on your clarification. >> let me say it. ten years of tax increases of. ten years of medicare cuts to spend for six years of spending. >> if i could make my point.

>> assuming you believe that the cbo is a legitimate agency to render decisions on spending for the congress? >> you know i believe that. >> okay. let's work with that. honestly if we can't work with cbo numbers, we're lost. because then we really get into a food fight. i apologize, paul, if i misinterpreted what i heard. i appreciate that we left the referee on the field. so if the referee is on the field we have to at least accept what a the referee has said and the referee said that the bills that are before us reduce the deficit -- the federal government's deficit by over $100 billion in the first ten years of. the congressional budget office, the referee, not political parties, the referee said that a these bills reduce the deficit in the succeeding years after the first ten years by over $1

trillion. now, you're right. all the discussion makes it clear. it wasn't easy. there are going to be some savings that we extract out of medicare. what we do in the bills is try to make the point that as we reduce the deficit, we're not going to put the onus, the burden of those cuts on seniors who receive medicare. we're asking the providers to stop, as some of my colleagues on the senate said, overutilizing or overspending in services so that we don't see someone having four different x-rays for chest pain. so what we are trying to do is figure out the ways to reduce the costs without impacting benefits. in fact, that's how, in these two bills, that the senate and house pass we were able the to close the donut hole for prescription drug coverage and medicare and still extract, according to the cbo, over $100 billion in savings. so, mr. president, i would say

the thing i would love for us to get into the details of in terms of the deficit reductions that are made is the fact that we do it while putting the brakes on medicare overpayments that went to insurance companies which were getting reimbursed at greater levels than were doctor and hospitals that relied on traditional medicare fee for service to provide services to seniors. we have any number of provisions to deal with the issue of fraud which says at least total $60 billion. working with some of the republican colleagues, we are doing exactly that, going after the waste in the system, certainly the fraud. that's how we, extract the number of savings. perhaps one of the unsung secrets of what we learned from listening to doctors, homspital and the providers is we can do a better job of coordinating care

for people. if you make sure someone who walks in the door of any one of the great physicians who are in this room when they were practicing and made sure we followed them through, not just the first visit to the primary care or family doctor but then into the specialist and then into the hospital. and afterwards to perhaps the nursing home or the home health center that what you do is you coordinate the care instead of having each provider do just its share and forget the patient, if you coordinate care you can reduce costs dramatically. that's how we were able to reduce costs for medicare and able to extract, according to the referee on the field the congressional budget office over $100 billion in deficit reduction and over $1 trillion in deficit reduction in the second ten years. i believe, mr. president, what we have is a chance to discuss how we can put this country back on a good fiscal track and do right by seniors in medicare and increase the amount of people

covered by health insurance by about 31 million. >> we'll now turn to -- >> first of all, to clarify, if anyone says medicare advantage is a subsidy going to insurance companies let me say what the statute says. it says that with a bid differential where it goes, 75% goes to beneficiaries and benefits and 25% to the federal government. >> i'm sorry, chuck. i just want to make sure. i don't think -- that doesn't sound right to me. that would mean 100% is going to either benefits or the federal government which means -- >> no. 75% to beneficiaries and benefits and 25% to the federal government. we consider -- i consider cbo god around here because it takes 60 votes in the senate to overrule them. i'm not questioning cbo.

but in regard to what mr. ryan said, i want to back it up with a quote from december 23 letter from cbo about this double accounting. the key point is that the savings to the health insurance trust fund under the bill would be receive bid the government only once. so they cannot be set aside to pay for future medicare spending and at the same time pay for current spending on other parts of the legislation. then skip a couple sentences and say to describe the full amount of the h.i. trust fund savings with both improving the government's ability to pay future medicare benefits and financing new spending outside of medicare would be essential

double count a large share of the savings and thus overstate the improvement in the government's fiscal position. now, you can argue about the exact amount of savings or whether there isn't any savings, but you can't argue that you can't count a dollar twice. you just can't argue that. common sense. common sense tells you that. you don't even have to have an accountant tell you that. i think what we want to remember here is there are consequences to things we do. you change tax policy and there are consequences to tax policy. you decide you're going to save money in certain areas, there are consequences to that. so we have big tax increases. i think that without a doubt when you put tax on labor, it's harmful. it doesn't do anything to create employment. both bills hit small business with higher tax rates. the house bill by 33%, the

senate bill by 20%. the house bill hits small business harder obviously. the senate bill hit it is middle class harder. it's a fact that when you do these things, you hurt the economy because small business is the machine that brings employment in america. 70% of new employment. you have to be careful how you treat small business. small business can be -- health care needs of small business is being taken care of with these association health plans and other things that can be done to make it beneficial. 35 states have high risk pools. most of them, 150% is the maximum cost. so you can build on those high risk pools to take care of people that have need,

particularly those that would be hit by the mandate and might not be able to afford insurance without the high cost. the high cost of this bill comes from a nonconstitutional mandate. it comes from the fact that for the first time in the 225-year history of the country, the federal government is telling you you've got to buy some. that doesn't make sense to a lot of people at grassroots of the midwest and if you think i don't listen to my people, i have had 32 town meetings so far this year. i think i have a good feeling of what's out there at the grassroots. now we have unrealistic cuts in here. not unrealistic from the standpoint of the way cbo scored them, not at all. cbo's god around here. they say we give them policy, it saves x number of dollars, it's going to save x number of dollars. but do you think we're going to sit around in rural america or even in downtown urban america

in the poverty parts of the city, that we are going to let hospitals close down and they raise the concern about access to health care. no. we aren't going to reduce benefits for seniors at all. but when you put our health care institution and our delivery system in jeopardy, well, people, you're going to promise people health care they aren't going to get. if you're going to put 14 -- i don't know whether it's 14 million or 18 million people under the bill into medicaid. medicaid pays about 60-some percent. doctors don't take medicaid which pays 80-some percent. so you will promise 14 million to 18 million people in medicaid they are going to be covered but if you don't have doctors that service them, isn't that

intellectually dishonest to promise something that you can't deliver on? and so there are these things in this bill. medicare, medicaid cuts that i don't see any future congress having any more guts than we do having any more guts than we do to close the sha&@ @ @å@ @ @ @ i learned a heck of a lot about the health care system that i wouldn't have otherwise known. >> thank you, chuck. i'm going to kent next. i just want to make one point.

the notion is that we can't make some hard decisions about how entitlements work because it's not realistic and nobody's going to have the guts to do it then we are in big trouble. because that means that the federal budget and state budgets and then business budgets and family budgets are all going to be gobbled up by this thing. so i hope that, in fact, we've got the courage to make some of these changes. now when i say that medicare advantage is not a useful way for us to spend tax dollars to provide health care to seniors, at least the way that's currently structured, as i said, that's not a democratic idea. i mean, there are a bunch of republican commentators and some

folks who have sat around this table before who suggested that that's probably right. you can make an argument that whatever savings we get out of medicare advantage should not go to filling the donut hole, for example. that's a legitimate argument. you can make an argument that it should go just to deficit reduction. those are all legitimate arguments. but my point is that the savings that are obtained here are from a program in which insurance companies are making a lot of money, but seniors who are in these kinds of programs are not better off and the 80% of people in these programs are paying an extra $90 a year to subsidize the folks who are in them. that doesn't seem like a good deal for them or for the taxpayer. ken conrad? >> will you give me 30 seconds, please? >> yeah.

>> i think we have already had it laid out here in four or five different ways how a heck of a lot of money can be saved. and i think that those things that we can agree on, we ought to proceed on. but i think that it's legitimate to take into consideration that if you're going to have program cuts that cbo says out there in the second decade could be 15 to 20% a year that you've got to have a system left to serve the people that we are promising health insurance to. that's the point i'm making. >> i think it's a legitimate point. what i'm saying is that on medicare advantage, that does not have to do with the concerns you've got about hospitals or doctors getting properly reimbursed. this is a program going to insurance companies. i want to make sure that kent gets in here because kent knows

something about the budget as the chairman of the budget committee. >> thank you, mr. president. thank you for allowing us to come and visit about what's really the 800-pound gorilla facing the federal budget. and that is the health care accounts of the united states -- medicare, medicaid and the rest. what we all know that is true is the biggest unfunded liability of the united states is medicare. what we all know is true is the trustees have told us medicare is going to go broke in eight years. so the idea that we don't have to do anything about medicare is utterly disconnected from reality. the idea that we don't have to find savings in medicare is an admission that we are headed for a fiscal cliff that we are going

to go right over. if we really want to endanger the benefits to people who are getting medicare, the best way to do that is to do nothing. because if we do nothing, we will guarantee that medicare goes broke. so together we can either do this together or we can have this imposed on us. i very much hope we do it together. senator coburn, and i'm sorry -- did he leave? i'm sorry he's not here because he said something that i thought was one of the most important comments made here today. and something that i think has gotten way too little attention. that's the question of those who are chronically ill. as we analyzed medicare, we found a startling statistic. 5% of medicare beneficiaries --

5% -- use half of all the money. i think paul knows this well. 5% use 50% of the money. who are they? they are the chronically ill, people who have multiple serious conditions. i think dr. coburn was references that when he talked about the need to better coordinate their care because we are wasting massive amounts of money and getting worse health care outcomes than we could if we better coordinated their care. what do we mean by that? a study was done with 20,000 patients. they put a care coordinator on each one of them. these are chronically ill patients and they found by coordinating their care and the first thing they did is go into the kitchen tables, sit down, get out all the prescription drugs. on average they found they were taking 16. they found that by looking at

them they could eliminate eight. the result was hundreds of thousands of savings per patient, better health care outcomes. i did this with my own father-in-law and his final illness. went to his kitchen table. didn't know it was his final illness. got out his prescription drugs and, sure enough, he was taking 16. i get on the phone to the doctor, go down the list -- dr. coburn, you were out of the room. i referenced you because you triggered something in my mind that i think is important. went down the list of what my father-in-law was taking 16 prescription drugs. i get on the line to the doctor and i get to the third one. he says, kent, he shouldn't be taking that one for the last five years. further down the list, he shouldn't be taking those drugs they work against each other. i said, doc, how does this happen? he said, kent, it's simple. he's got a heart condition, a

lung condition, orthopedic issues, doctors for each one of those. he's getting prescription drugs mail order, at the hospital pharmacy, down at the beach. he's sick and confused. his wife is sick and confused. we've got chaos. my conclusion after all of these hundreds of hours of meetings that senator grassley and enzi and baucus was indeed we do. we have a system that's characterized especially for those people by chaos. we can do better. of and we really don't have a choice because we've got a debt now 100% of gdp headed for 400% that nobody believes is sustainable. so i just pray that we find a way to come together and deal with these things seriously. because if we don't, we will rue the day.

mr. president? >> i want to make sure that we're balancing off the time between democrats and republicans here. and house and senate as well. john, go ahead. >> mr. president, i'm going to say thank you for having us here. i think it's been a useful conversation and as i listened to you open up this meeting, i thought to myself, i don't disagree with anything that you said at the beginning of the meeting in terms of the premise for why we are here. the american families are struggling with health care. we all know it. the american people want us to address this in a responsible way. so i really do say thanks for having us all here. i think our job on behalf of our constituents and on behalf of the american people, is to listen. and i spend time in my district.

i spend time a lot of places. i have heard an awful lot. i can tell you the thing i have heard more than anything over the last six or seven months is that the american people want us to scrap this bill. they have said it loud. they have said it clear. let me help understand why. the first thing is we heard from the two budget directors about our fiscal condition. we have medicare that's going broke. we have social security going broke. we have medicaid that's bankrupting not only the federal government but all the states and yet, here we are having a conversation about creating a new entitlement program that will bankruptcy our country and it will bankrupt our country. it's not that we can't do health insurance reform to help bring down costs to help save the

system. this 2700-page bill will bankrupt our country. secondly, mr. president, i'd point out that this right here is a dangerous experiment. we may have problems in our health care system. but we do have the best health care system in the world, by far. and having a government takeover of health care -- and i believe that's what this is -- is a dangerous experiment with the best health care system in the world that i don't think we should do. so why did i bring this bill today? i'll tell you why i brought it. we have $500 billion in new taxes here over the next ten years. at a time when our economy is struggling, the last thing we need to do is to be raising taxes on the american people. secondly, we've got $500 billion worth of medicare cuts here. i agree with kent conrad. we need to deal with the problem of medicare, but if we are going to deal with a problem of

medicare and find savings why don't we use it to extend the life of the medicare program as opposed to find spending that money creating a new entitlement program. it's not just the taxes or the medicare cuts. you've got the individual mandate here which i think is unwise and i do believe is unconstitutional. you've got an employer mandate here. it says that employers -- you've got to provide health insurance to the american people or you're going to pay this tax. it's going to drive up the cost of employment at a time when we have over 130r7b9 or near 10% unemployment in america. and beyond that, a lot of employers are going to look at this and say, well, i'll pay the tax and they are going to dump employees into the so-called exchange because in five years every american is going to have to go to the exchange to get their health care. and who's going to design every health care bill offered in the

exchange under this bill? the federal government's going to design every single health care bill in america within five years once this bill were to pass. i could go on and on and on. let me just make one other point. i'll save you. for 30 years, we've had a federal law that says that we're not going to have taxpayer funding of abortions. we have had this debate in the house. it was a very serious debate. but in the house, the house spoke. the house upheld the language we have had in law for 30 years that there will be no taxpayer funding of abortions. this bill that we have before us and there was no reference to the issue in your outline, mr. president, begins for the first time in 30 years allows the taxpayer funding of abortion.

mr. president, what we have been saying for a long time is let's scrap the bill. let's start with a clean sheet of paper on those things that we can agree on. let's take a step-by-step approach that will bring down the cost of health insurance in america. if we bring down the cost of health insurance we can expand access. mr. president, i told you the day after -- maybe it was the day you were sworn in as president -- that i would never say anything outside of the room that i wouldn't say inside the room. i have been patient. i have listened to the debate that's gone on here, but why can't we agree on those insurance reforms that we have talked about? why can't we come to agreement on purchasing across state lines? why can't we do something about the biggest cost driver which is medical malpractice in the defense of medicine that doctors practice. let's start with a clean sheet of paper, and get it into law in

the next several months. >> john, the challenge i have here -- and this has happened periodically -- is every so often we have a pretty good conversation trying to get on some specifics and then we go back to, you know, the standard talking points,@@@@ br of the matter is, as we indicated before, that according to the congressional budget office this would reduce the deficit. paul has different ideas about

it. other folks may think there are better ways of doing it. but right now what we are doing is focusing on the issue of federal entitlements and whether we can make some changes. i will come back to you, i think, at the end of the session to answer a range of questions that you just asked. right now, i want to go to jim cooper who i think everybody knows cares pretty deeply about the federal budget. he's been championing this for a very long time. do you want to address some of the issues that have been raised in terms of medicare and medicaid? >> thank you, mr. president. we're all here, dressed up, but i think folks at home are wondering how we behave when the camera's off. the deficit, in my opinion is probably the single most important issue we face.

paul ryan said it well. it is driving us off a cliff and i'm intrigued by the conversation. so far we have heard folks trying to outdo each other in deficit reduction. i welcome that competition. especially if it's backed up with votes because it's easy to talk tough on this. it's harder to deliver. i personally like senator mccain's idea to get rid of the special deals. that's just a starting point. paul ryan is right again. tom coburn is right when they point out we are probably wasting a third of medical spending. medicare alone is $37 trillion in the hole. that means for all the folks who want to talk tough and not vote tough, that's not good enough. it means that for all the folks who want to do this next year or next decade or leave it to their successor, that's not good

enough. we have had some examples of how we have behaved recently. a wonderful bipartisan measure. the conrad gregg bill, completely bipartisan for years and a bipartisan fiscal responsibility commission was brought up for vote in the senate. we had 60 votes. but only 53 people showed up for work. seven people who had been original cosponsors of the measure suddenly got different ideas when the moment of truth came. so, mr. president, i'm thankful you appointed a president shall fiscal responsibility commission with alan simpson and erskine bulls to address these fundamental problems f. you love medicare you need to act to save it fast. every day matters. a report will come out issued by the treasury department.

it's come out every year. lit come out in the next few days. it's the only report that uses real accounting to describe america's fiscal problems and the news is not pretty. it will reaffirm what's been discussed here about medicare, medicaid and other vital american programs being deeply in the hole. and the opportunity of cost for delay is extraordinary. so we can face the problems, mr. president, solve them with political will, but the talking points won't do it. we've got to acknowledge the real questions. as every business person knows if you can't measure it, you can't manage it. too many people in the federal government are refusing to measure it. much less take the tough votes required. because the reason we have a medicare advantage program, mr. president, is you know in 2003 when the other party was completely in charge of everything here we passed a program that was almost completely unfunded and added $8 trillion in one bill to our

children and grandchildren. now, those benefits, if offered, should be paid for. so this is a challenge for everybody in both parties. nobody's hands are clean, but let's have a new day, a new beginning. i think we can do this and this bill is a great place to start. if you don't think the bill reduce it is deficit enough, vote for more savings. if you want to reform medicare more, vote for it. don't just talk a good game. so i hope the american people are watching. they will be watching after the cameras are turned off, too. i'm thankful you called this meeting because this is a moment of truth for our country. and together, we can solve this problem. >> i want to see if there are any republicans who want to speak. i still have dick durbin. >> mr. president, john mccain. >> thank you, mr. president. i say to my friend from north dakota, none of us want to do nothing, but we do want to start

over. we have just had a discussion about the 800,000 carve-out and all of the other special deals and special interests that were included in this bill which is more than offensive. but i want to talk about one specific issue on deficit reduction. and that is medical malpractice reform. last year, mr. president, you said when you spoke to the congress, you asked your distinguished secretary of health & human services to look at ways that we could address the issue and then again this year. i paid close attention to all of your speeches. >> thank you. that's more than michelle does. >> and the point is that we don't have to go very far. there's two examples right now of medical malpractice reform that's working. one is called california and the other is texas. i won't talk about california because we arizonans hate

california because they have stolen our water, but texas has established a $750,000 cap for noneconomic damages, caps doctors at $250,000, hospitals at $250,000 and any additional institution $250,000. and patients harmed are not subject to any limitations on recovery for economic losses. i hope you will examine it. but important aspect of what they have done in texas is the following. lawsuit filings are down. defensive medicine increases annual medical costs by 10%. physicians' recruitment is up. 65% increase from two years preceding reforms. 31% increase in rural emergency medicine physicians. amarillo lost 26 physicians and

has gained 37. largest malpractice in the state. some 217 may in over four years and now there are over 30 companies competing for business. it's already there. all we have to do is enact this into legislation. it's already been proven. so i don't think we have to experiment around. there are two states that have proven that you can enact medical malpractice reform and great savings and provide health care providers with the incentives they need. i want to mention one other thing. there is an issue overhanging the entire conversation. we all know what it is. it's whether the majority leader of the senate will impose the, quote, reconciliation, the 51 votes. haven't been in the majority and the minority -- i prefer the majority -- i understand the frustration ha the majority feels when they can't get their

agenda through. it's real and i understand it. i have some sympathy, but i remember and i think you do, too, mr. president, the last time when there was a proposal that we republicans in the majority would adopt a 51-vote majority on the issue of the confirmation of judges. there was a group of us that got together, said, no, that's not the right way to go. that could deal a fatal blow to the unique aspect of the united states senate which is a 60-vote majority. we came to an agreement and it was brought to a halt. if a 51-vote reconciliation is enacted on one-sixth of our gross national product, never before -- there has been reconciliation but not at the level of this magnitude. i think it could harm the future of our country and our institution which i love a great deal for a long, long time. >> okay. let me just address two of the points you made and then i will

turn to dick. you know, this issue has been brought up before. i think the american people aren't always all that interested in procedures inside the senate. i do think that they want a vote on how we're going to move this forward. i think most americans think that a majority vote makes sense. but i also think that this is an issue that could be bridged if we can arrive at some agreement on ways to move forward. medicare -- or the issue of malpractice that you brought up, i have already said that i think this is a real issue. i disagree with john boehner -- john, when you say it's the single biggest driver of medical inflation, that's just not the case. the congressional budget office took a look at the proposal you've got for medical

malpractice and estimates that the government system would save about $50 billion over ten years which is $5 billion a year which is real money, but understand that we've got a $2 trillion system. let's assume you extrapolate that into the private marketplace. let's say it's another $5 billion or another $10 billion. it's still a small portion of our overall health inflation problems, but having said that, it's still something that i care about. i have said i care about it. now not only have i asked kathleen to initiate some pilot program at the state level, but there are some examples of legislation which i actually would be interested in pursuing. tom coburn, you and richard talked about incentivizing and

allowing states to experiment much more vigorously with ways to reduce frivolous lawsuits to pursue settlements to reduce defensive medicine. that's something i would like to see if we can get going. so i might not agree to what john boehner has proposed, and it's interesting that i think i have heard a lot today about how we shouldn't have washington impose on the state's ideas except when it comes to the ideas that you guys like in which case it's fine to override what states are doing. there seems to be a little bit of a contradiction on this, but i think there may be a way of doing it that allows states to tackle this issue in a very serious way. and i'd be interested in working with you, john, and working with tom to see if we can potentially make that happen if we can arrive at a package that also

deals with the other drivers of health care inflation that are so important. now, we are running out of time. i've got dick durbin and then we are going to go into coverage. i know that henry and john and charles have been interested in talking about it. frankly, it's something we haven't spoken a lot about lately and that's a bunch of people who don't have health care. >> mr. president, i have been biding my time throughout this meeting. i thank you for inviting us on the issue of medical malpractice. before i was elected to congress i worked in a courtroom. for years i defended doctors and hospitals and for years i sued them on behalf of victims of medical malpractice. i have sat at both tables in a courtroom. at least many years ago i think i kind of understood this area of the law better than some. but i listened time and again as our friends on the other side when asked what are the most important things you can do when it comes to our health care system in america. the first thing they say is

medical malpractice. today it was the first thing said. the point made by the president is if we do believe the congressional budget office when orin hatch asked them, how much will we save if we implement the republican plan on medical malpractice from the house they said $54 billion over ten years. $5.4 billion a year is a lot of money, expect in the context of the bill we pay each year for health care. it represents one-fifth of one percent of the amount of money we spend each year on health care. the congressional budget also said as you lose accountability for what the doctors and hospitals are doing, more people will die. 4,800 a year according to the congressional budget office's reference to this study. now 98,000 people a year die in america because of medical malpractice. i think there are things we put

in this bill to change that. most of you have heard of this dr. gwandi. we read him. i talked to him on the phone. his checklist manifesto is a basic approach to reducing medical errors. i want to say, mr. president, what you and the secretary have done is the right thing. hospital which i will not name and at this hospital a woman went in for a simple removal of a mole from her face. under general anesthesia the oxygen caught fire, burning her face. she went through repeated surgeries, scars, deformity.

her of life will never be the same and you are saying this innocent woman is only entitled to $250,000 in pain and suffering. i don't think it is fair. the jury decisisystem makes the decision. if you were asked over the last 20 years has the number of paid malpractice claims in america doubled or been cut in half? if you listen to most people here you would say they must have doubled. no. according to the keyser foundation they have been cut in half. but how about the money being paid? clearly that's gone through the roof. no. between 2003 and 2008 the total amount paid for malpractice claims in america was cut in half from $8 billion to $4 billion. this is an important issue. i don't dispute it. i think we have treated it as an important issue, but to make it the overriding issue is to, i think, really trivialize some of the other things that should be part of the conversation. i have been asked to speak about deficit reduction and i won't

other than to say when i hear my friend john boehner say that we have the best health care in the world, i don't dispute it for a moment. if i were sick, this is the country i want to be in with these doctors, these hospitals and these medical professionals. but step back and look at who we are in this room. as was said many years ago, the law in its majestic equality forbids both the wealthy and the poor from sleeping under bridges. when it comes to the wealthy in health care per capita, we are the wealthiest people in america. the federal employees health benefit program administered by the federal government setting minimum standards for the health insurance we enjoy as individuals and want for our families is all we are asking for in this bill for families across america. if you think it is a seshlist ploontd it's wrong, drop out of the program. but if you think it is good enough for your family, shouldn't our health insurance be good enough for the rest of america? that's what it gets down to.

why have the double standard? tom harkin is right. why do we discriminate against people when we know that each one of us is only one accident or one diagnosis away from being one of those unfortunate few who can't afford or can't find health insurance. >> all right. what i would like to do is this -- it is now a quarter to 4:00. i said we would try to get out at 4:15. we have not spoken about coverage. we need to wrap this up. i know that some people may be on a tight schedule. i'm going to ask that people are willing to stay until 4:30 which gives us 45 minutes. and what i would like to do is to round out this conversation by focusing on what i think is probably at the core one of the bigger philosophical disagreements between the parties in how we address health care moving forward.

i think we have identified one already which is the issue of insurance and minimum standards. and that was a debate surrounding the exchange. it was a debate that we discussed when it came to being able to buy insurance across interstate lines. i think the second issue, which eric cantor alluded to earlier and john boehner just alluded to is the issue of coverage. and that is can america, the wealthiest nation on what every other advanced nation does which is make sure that every person here can get adequate health care coverage whether they're young or old. whether they are rich or poor. and, you know, i think that the effort in the house and senate

has been to control costs to reform the insurance industry, to deal with some of the structural deficit issues surrounding entitlements and to do that in a context in which everybody is getting a fair shake. and right now, frankly, the 30 million people who don't have health insurance at all, there are a whole bunch of people who aren't added to that list. they never go visit a doctor unless they are really sick. the way we try to do it was not a government run health care plan. good language has been used quite a bit. the fact of the matter is that as dick just alluded to, through the exchange would be to allow people to pool.

allow everybody to join a big group and for people who can't afford it to give them subsidies including small businesses. we need to reach an agreement. john, we looked at your bill. there is some overlap on the issues but when it comes to the coverage issue, yours would potentially increase the efforts of the house and the senate. that's a 27 million person difference. with can have an honest disagreement as to whether we should try to give some help to those 27 million people who don't have coverage. that's the aspect of this.

providing those tax credits to families and small businesses cost money. and we do raise revenues in order to pay for them. and it may be that the other side just feels as if you know what? it's just not worth us doing that. we will get those 30 million people covered? we are not. if we think it's important as a society to not leave people out, then we're going have to figure out how to pay for it. if we don't then we should acknowledge that we're not going do that. but what we shouldn't do is pretend that we're going do it and that there's some magic wond to do it, with that i will go to whoever you want first.

>> because we are short on time let's keep our remarks relatively brief. >> for people who don't know me i practiced medicine on casper, wisconsin. my wife is a breast cancer survivor. bobby has been through three operations, chemo therapy. we have seen this from the different sides of care. and this discussion needs to be about all americans because everyone is affected not just people who don't have insurance. if you go any community in america and you ask the question do you believe that this bill up here, if it becomes law, do you

believe you will pay more for your health care x you personally, every hand goes up. if this bill becomes law, overall health care spending in the country will go up. your personal care will get worse? every hand goes up. and most worried of all are the seniors. they know there's going be $500 billion taken away from those who depend upon medicare for their health care then it's not just medicare advantage. it's home health. it's a lifeline.

one in five hospitals, one in five nursing homes will be operating at a loss in ten years. for 25 years, i never requested anybody if they were a republican or democrat or republican, it took care of everyone. we take care of everyone regardless of ability to pay. doctors work long hours. nurses work long hours. and mr. president when you say with catastrophic plans they don't go for care until later. sometimes those are the best consumers of health care. because a lot of people come in and say my knee hurts. maybe i should get an mri.

people with cat strafk health plans ask the best questions, shop around, are the best consumers of health care. but to put 15 million more people in medicaid, where many doctors do not see them. you say how are put all the doctors who -- turned federal torts claim act. that will help them because they are not getting paid enough. i believe we have the best health care system in the world. that's why one of the premier of the canadian provinces came here to have his heart operated on. he said it's my heart, my life

and i want the best. that's why he came to the united states. a member of parliament came to the united states for care. they have coverage there but what they want is care so coverage does not equal care. what we heard from senator conrad is also right. half of all the money we spend on people goes to 5%. so the focus ought to be on the best possible care. people are happy with the quality of care they get. mr. president the first week in medical school we got our stethoscopes and the professor of cardiology who just died this past year he said this is to listen. this is to listen to your patients. listen to their heart, their lungs. but it's a constant reminder to

listen to them. listen to what they are telling you. it means listen to the other people in the room. if you are seeing a child listen to what the mother is saying. an elderly person? listen to what their adult child is saying. it is a constant reminder to listen. i have great concerns that people around this table are not listening to the american people and are fearful of the consequences of this large bill which is why only one in three people in america support what is being proposed here and that is why so many people are saying it's time to start over. >> there are some issues that i have significant difference with you think we would be better

health care purchases. >> i think actually we would. you wauld rely focus on it. >> it is very important for us. when you say to listen the truth of the matter is they are not premiers of any place. they are not sultons from wherever. they don't fly in to mayo and suddenly decide they will spend a couple million dollars on the absolute best health care. they're folks who are left out.

for them the system was working. if they just ate a little better and were better health care consumers is just not the case. the vast majority of people we are talking about, they work every day. some of them work two jobs. but if they're working for a small business they can't get health care. if they are self-employed they don't get health care. it is a scary proposition for them. we can debate whether or not we can afford to help them but we shouldn't pretend that they don't need help. i get too many letters saying they need help.

>> having a high detectible plan is an option for members of congress. >> members of congress get paid $116,000 a year. >> many didn't take advantage of that. it's the same plan that park rangers get. >> john, members of congress are in the top income brackets of the country and health savings accounts can be a useful tool but the people who use them are folks who have a lot of disposable income. and the people we're talking about don't. henry? >> mr. president, i just wonder if some of our republican friends would like to have seniors on medicare have catastrophic coverage only. i would say the seniors in this country are people who are worried about this health care bill, they ought to worry if we don't do something.

not only will we hear ideas of putting them on catastrophic coverage only. paul ryan has a proposal now to say that medicare recipients in the future ought to have a little voucher and they can shop for their own insurance. they can be prudent shoppers. yesterday i had a hearing with people who are supposed to be prudent shoppers. they are people from california who were told by anthem well point that their insurance was going go up 30%. 39%. could you imagine if you have to go shopping with your voucher and this private policy went up 39%? and the way to save the federal government money is to shift it on to the seniors. that's where we are going if we don't do anything. what do we do that makes sense. we had some ideas that we seem

to agree about to hold down health care costs. the california law is in effect so it isn't holding down their health care costs. we have got look at holding down held care costs. that's hard to do unless we have insurance reform so that we can get more people buying health care. i thought tom just summed it up so well. all these issues go together. if you don't bring more people in to be covered and you segment the groups to be covered in high risk pools, and everybody else will get a break. the republican proposal, the

people who get a brake for insurance are the people ho are healthy and the people who pay more are the people who are sick. is that what we want in this country? i hear people all day say mr. president, the public doesn't want your plan. if i heard the rhetoric over and over again, i wouldn't want your plan either. a federal takeover of health care? that's not what's being proposed. somebody said that people ought to be able to buy a policy that suits their needs. well how many people are going come forward and say i don't want certain things covered and find out they are sick and they need that coverage. we need to have a market like the federal government employees, like members of congress. we know what we can choose. if somebody wants to choose a health savings account because they want to put some of their money away because it's tax free and it's a really great deal if

you got a lot of money. most people have to know they will have necessary medical coverage for the doctors and hospitals when they need it. and they have something that is basic for anybody. yesterday a woman told nus her family she had a child with a hole in his heart and that became a pre-existing condition so she has health insurance coverage through an individual market. she says i barely use it. i'm afraid to use my health insurance. she's now told she will have this 39% increase. she said her health insurance is going cost her about as much as her mortgage. she's afraid to drop it because she doesn't know if she could ever get health coverage again. another woman had asthma.

she was going face a 39% increase as well. if they were pooled with everybody else in the individual market, then there are more people buying insurance and there's more leverage. it's spreading the cost, not making people have to pay more. the people who we have talking about are people -- they got unemployee with a real serious medical problems and nobody is in that group is going get coverage. or women cost more for small businesses especially if they are older. they don't want to get coverage. they don't want to give them coverage, ether. we have single adults. a lot of them not very healthy.

dealing with chronic conditions. parents and families living on low incomes. they need help from medicaid. we need to bring everybody into this system. now in medicare, what does our bill do? it affects the solvency of the program. for medicare we closed the donut hole which means that when seniors have to pay for the prescription drugs they don't have to do it all on their own. we keep them with the medicare policy. and we provide preventive services and they don't have to pay for them. we know that services will have to keep us from having to pay for more costly care. this bill is good for people on medicare. if we don't, they will get policed like crazy. this bill is good for the american working people. this bill is good for our health care system. for us to take the republican

proposal. 3 million people. we wouldn't hold down the deficit a bit. we would still have all those preexisting conditions that would keep people from getting their insurance coverage. maybe if people go and pretoend be patients we could stop some of the false claims. i am sure they happened in the private insurance market not just the public insurance market. not only are we covering more people but innovative ways to deliver the care that would make it less costly. as we develop ways to deliver care especially with chronic care that will hold down the cost of care and those ideas will be picked up. they always follow what medicare does and then they adopt id.

>> i'm going be equal opportunity and say we're not making campaign speeches right now. your points i agree with but i still there there is a lot of areas of agreement we have discussed so far this is an area in which we do have some philosophical disagreements. i think it's -- i want to go a republican. the question i would ask to my colleague colleagues coverage for people who don't have health care that you would embrace and agree with

beyond what has been presented in the leader's bill. there may not be. that may be the threshold which all of you think we can afford to provide help to people who don't have coverage. >> thank you. mr. president, thanks for your hospital alty. i want to take you to an experience i had when president obama took on a controversial initiative regarding the death penalty situation. unless you think that death penalty is a jr. varsity issue, it's not. it's crimes. it's claims of innocence.

it's penalties forever. then state senator obama approached republicans and said look, let's fix this. let's recognize the problem here. let's fix it. but it was very different that what i sense is happening today. what i sense is happening today is what is it going to take for you republicans to vote for our bill. that's the sub text that i'm getting. and a whole host of other venues, interviews, talking. you have all seen it, all participated. when the american people when the conversation first began about expanding coverage, lowering costs were actually hopeful and it wasn't just a

bump bumper and they listened. they are becoming increasingly disappointed with what they have seen come out of this process. this is not a prop. this is the senate bill. my district says you know what? that's sure looking like something that's now being popped in the micro wave and put it back to say do you like it now? and my district really doesn't. i suppose you represent some districts that do. i think one of the problems to get to this coverage issue. coverage is expanded through medicaid, welfare.

and medicaid is a house of cards. medicaid is not i think states

high bound in how they approach these things. this is something in my view isn't sustainable. the governor said, let me give you a quick quote. about 20% of america is on a medicaid program and washington would like to shift exit grow it to somewhere around 25 or 30%. medicaid is a system that isn't working. almost everyone agrees. but what congress intends to do is increase the number of people on medicaid. in my view and i think the view of folks in my district. i think many, many people across america, it is a flawed foundation and we can do much, much better. a republican proposal that's out there would reduce the number of

uninsured by 3 million people. you have heard it today. >> you start out with an etch-a-sketch and the more you dialed, the more crazy it looked and finally you would do like that and do the etch-a-sketch. a year's worth of work and this is what has come up with? the american public as far as the ones i have heard from are opposed to this. they say look, take the etch@@℠

have coverage through medicaid. it's somewhere flawed. there are problems with doctor

reimbursements. the people who are really left in the cold are working families who make too much for medicaid they are paying taxes and they are working and they have nowhere to go. i promise you they would say to themselv themselves. coverage through medicaid is a good deal. similar to the pool that members of congress enjoy.

the group that is being left out because you threw out the word welfare which is one where most american people don't want to be a part of welfare. very poor people have coverage that is superior to what a lot of folks who make a little more money and are working very hard trying to support their families do not. i know there are other folks who haven't had a chance to speak. i am going to go -- chris and patty murray on our side and we will alternate to make sure we have -- i know that joe is speaking as well.

>> thank you. i will try to keep this brief. let me first of all thank you as well. thank all of our colleagues. 31 hospitals and they are terrific people. whether or not the quality of care is equal to everyone in this country is requestable. certainly the quality of people who are our health care providers. they do an incredible job every single day. i was struck when the congre congressman was talking about the death penalty issue. i think most of us around this table would agree today that every person if confronted with a legal problem has a right to a lawyer. that's something we have accepted as a country.

yet at the same tie we acknowledge that we provide care. if you show up in an emergency room we take care of you and that's a great testimony to who we are as a people. the cost associated with that is a false assumption that that's one group of people who has no impact on who has insurance today. they should be taking better care of themselves. they should eat better. they should get a job. if you accept that which i don't, the fact of the matter is that sector of our population affects everyone else. it costs us about $248 billion a year in lost productivity when you have increased numbers. at this very hour there is a cost with every single insured person in this country of roughly $1100 a year. to pay for the cost of that person getting that care.

every dha we are discussing this, 14,000 people lose their health care. many gather around this table because they are uninsured that we lose that many people on a daily basis because they lack health insurance. there are tr costs associated with in. henry said it well, tom said it well and plpt you said it well. these are not segmented issues.

lastly let me say this to you. a guy in my state, kevin -- he employs seven people. he wanted to buy health care. like the stories he lost a fellow of 24 years because the guy had a health care issue. he took another job for less pay because there was health care provided. kevin did more than tell me a story about himself. he went out and organized 19,000 small businesses and they changed the law in connecticut regarding pooling in small

businesses. here was a small business guy who wanted to take care of his people because he could not provide it for them any longer. every district and every state wants to provide that health care. understand how valuable it is to them. but coverage is the critical issue. we know that the next ten years every state in this country will have a 10% increase in uninsured people. we know that in 30 states in our country there will be a 30% increase in the uninsured and half the population will at one point or another in the next ten years be without insurance. this is the lynch pin that holds it all together.

>> thank you. i want to commend you for asking us to come here andly say that never have so many members of the house and senate behaved so well for so long before so many television cameras. we may want you to be the moderator if we get to a conference committee. there is a fundamental difference between the vision that you and your friends have put forward and the vision of myself and those of us in the minority have put forward. it's the fundamental role of government we believe we should use free markets to empower people and give them choices.

the regulation to require something, that's a difference -- that's a distinction without much of a difference. so the six common sense ideas that various republicans have put out here is not incrementalism in the sense that it doesn't go together but it does not radically change the basic health care system of america. and prevent a state from precluding it, if the insurance company can prove that its solvent and it will pay the benefit. health care premiums would go down 50% if californians could buy insurance from nevada or

oregon. if you create the high risk pool and put the cap on it, and allow small businesses to create the pools that we have talked about you are going be able to give those americans who can't get insurance because of a pre-existing condition and want it. the ability to one of the things we seem to have an agreement on according to yourself and is medical malpractice. your proposal and the house bill and senate bill pay lip service to medical malpractice but they don't really do it. if you take the proposal that was put together and put up on the house floor. and it's based on what happened

in texas. texas has gained 18,000 doctors since this reform was put in. they are 55 rural counties in texas that now have an obstetrician. you will not save the $54 billion that was alluded to if you combine the direct savings with the indirect savings because the price of practicing defensive medicine goes down. you probably save $150 billion a year. that's real money we're talking about as senator mcconnel said, let's start over in the sense that we change the vision and

work together to do the things that we agree upon. the american health care system the best in the world. >> i'll respond to you, but i think we should wrap it up. you are right. the proposal that is put forward doesn't radically change the existing system. the proposal that's been put forward by the house and senate democrats also doesn't radically change it in the sense that the vast majority of people who currently have health care will still get it but they will see it cheaper. people who do not have coverage

will start getting it. i need to make sure that everybody who has not had a chance to speak is allowed to speak. that means we will probably go a little later than anticipated. by the standards of washington, we're still in the ballpark here. again, there may be some comments -- there may be some other republicans who are interested in speaking. we will go to -- we're going ron first. then we will go to another republican. we will end with john who was

mayor when the idea was first introduced by his father. >> i want to make sure that they can respond. go ahead. >> i think this has been a very constructive session. for the last six@@@@@ @ @ @ @ @

the real reform in effect changes the incentives that drive the system. and particularly empower the consumer. mr. president, i have been very pleased that you have been

constantly coming back to the system for members of congress. all of us can fire our insurance company. every one of us. to hold the insurance companies accountable and to fire them. one of the promising points you made this afternoon. this is a another opportunity if done properly, properly to empower the consumer. the one that we enjoy already allows inner state competition for health insurance. that's the way the federal system works right now. there are good consumer protections. when you made that offer to all of us today to work with us on this, not only am i going to

follow up on what i think is a very gracious offer to try to bring both sides together it allows us to build on the exchanges that we have which begin to empower and if we just keep building on that looking in my view. to know that i'm going be following up with both sides of the aisle this afternoon and your administration in pulling this group together. >> john kyle remines me that hsas are not exactly for rich

people. the median income of a user makes $69,000 a year. i have a feeling we haven't been listening to them very carefully. if you average all of the polls in america, we know that the american people oppose this proposal on an average of 55 to 37%. they have also been asked and we keep reading in the news paper that where we're headed next is to the reconciliation approach.

so we understood what this word actually means and at the gallop poll were opposed using that 52 to 39 this has been a fabulous discussion. we have a lot of experts around the room. i think it's really important since we represent the americans that we not ignore their view on this. health care is a uniquely personal issue. every american cares deeply about the quality of their health care and access to health care and cost of health care.

the solution to that is to put that on the shelf and to start over with a blank to improve the american health care system which is already, as all of us agree, the finest in the world. >> i'm just going make this remark. i'm going to save the two lions of the house here for the end. there are comments about the polls and what they are hearing and as i said, i hear from constituents in every one of your districts. and every one of your states. you poll people about the individual elements in these bills, they're all for them. so you ask them do you want to

prohibit preexisting conditions? do you want to make sure that everybody can get basic coverage that's affordable? yes. i'm forthat. do you want to make sure that insurance companies can't take advantage? and you have got the ability as ron said to fire an insurance company that's not doing a good job and hire one that is. if you poll people and ask them is the system working right now. should we move forward, they'd also say yes to that. and my hope had been and continues to be that based on this conversation there might be enough areas of overlap.

without a situation where everybody goes to the respective corners. this is something that has to be solved. we have had three people who have not had an opportunity to speak. if you don't mind, in the interest of time i would like to go ahead and let each of them speak. if there is an intervention that somebody on the republican side wants to make then i will recognize them. speaker pelosi may want to make a brief summary. if everyone could keep their remarks relatively brief, that would be helpful. >> thank you. this has been a very good discussion and i think all of this come to this table today having heard a lot of stories and talked to a lot of people he

told me his single mom taking care of him and his two younger systems had a job managing a fast food restaurant. was doing okay but got sick. she had to take time off work and because she was missing so much work she lost her job. when she lost her job she lost her health care. and sadly, his mom died. i think about him every time we talk about this bill.

either they are denied, or they are a small exist tense whose premiums have gone up that they can no longer afford to provide it for their employees. frankly it's why so many americans today are passionate about a pob lick option. it was a choice for them that they felt was important to them. by giving them an exchange that they can go to. and giving them insurance reform. but opening up community health centers so people have choices. by making sure that we lower the cost for all americans. when we provide coverage for 30 million americans it lowers the cost of everyone who has insurance today by $1,000 a year a family.

oi want to make sure that nobody loses their mom again because they tint have a choice. >> thank you. >> mr. president. >> if we don't think about what the key goal is, the key goal if we don't reconnect the mechanism of payment with purchase, we're not going get good value. and i outlined one out of every

three dallas that doesn't help anybody get well. and there is enough potential there in that pool of money that we don't have to have the government run it. what we can do is create and allow that money for everybody to have the access that senator murray wants that individual to have. the thing that draws us apart is the level of involvement in the government in making those choices. i wult put forward to you that we ought to have another talk like this as we get closer and closer on ideas because we all want the same thing. but how we get there. whether or not we're in charge of it or the patient is in charge of it. what we need to do is spend it much more wisely.

>> i'll pick up on this in my close. >> i appreciate the fact that you saved the best for last ch. >> absolutely. >> we have been pushed over the top. we are so close to national health insurance. so close to allowing people that go to work every day and don't know what could happen to them whether they lose their job or lose their health insurance. i know they call the senate the upper house. having said that, for my new yorkers, even though we have more self-confidence than we need, i want them to know that they are americans and we do

listen to them and that the states that oppose this great plan doesn't speak for all of america. not with standing the fact we have five republicans from the weighs and means committee here at your summit. and there wasn't one bill before us. i would think instead of taking the president's time. why do you say scrap what we got unless it ends up that you have made up your mind that we're not going have a health bill? then i would say that most all of america would find it not

more difficult to understand why the bill is so big. what i would hope would happen is that we leave here not thinking that we're going to start all over. we can't get back those times. this is the last year for a whole lot of people in the house of representatives so we believe we represent the people too. why can't we take what have agreed to. i mean, sick people, scared people. not republican and democrats. they are americans. you made it abundantly clear that you have the same sensitivity to recognize the fiscal crisis. you know what can happen to our country, if we're not educated or sflong a healthy way. have staff or somebody bring together those issues that cannot be contradicted. i know you want more than three

million people insured. i know you can explain why it is difficult to do it but i know you want to achieve having all americans with the same health benefits because that is so important, and then, mr. president, after we start learning to agree with each other and it is not a question of no but the congress working its will for the good people then we can work out and god knows mr. camp and i have tried desperately hard and jim before him, to realize people are not concerned with the debate. they are concerned with what are we going to produce? and i don't care what your color is. i don't care what your party is. if you're sick, you're sick, and you don't check out the doctor and they are not going to check out whether or not you're republican or democrat so i just hope that we can change this to a positive thing where you can

say let's leave here at least talking about what we agree on. where you can ay let's leave here at least talking about what we agree on. let's stop knocking each other as to who is the smartest and let's really then. i will assure you that they won't be concerned with how big the bill was. i have no clue as to how big the associate security bill. how many pages was in the medicare bill and i don't really think that somebody sick in the emergency room is concerned about the size of the bill that we are trying to help them with. i appreciate this.

>> i saw a cartoon. two people are sitting down and they say terrible news. our health care rates are going up 40%. and the other says you're not concerned because you have pre-existing conditions. this solves both problems. and mr. president we desperately need your lead. and the reason people don't have health care in this country is they can't afford it. my dad was right. i saw this morning a statement that was made with regard to starting over. this came from governor schwarzenegger in california. i think any republican that says you should start from scratch, i

think that's bogus talk and partisan talk. i think we need to buckle down and get to the business of solving the biggest problem that this country has coming down the road that's not going be important. in 20 a.d., the cost of all of our health care is going equal the gross coverage when the patient gets sick. but we don't -- and the republicans do, too.

but they don't cover pre-existing conditions. both of us prohibit annual and lifetime limits. high-risk pools they have and we have. high-risk pools carry a risk because it constitute incentive for a race to the bottom whereby people will move their insurance companies to a place where they have the least regulation and the least protection for the consumers. and it also includes, amongst the other items we agree on the possibility of health care accounts. there's lots we have and we need. i would say i've seen some of my friends who i knew before. they were pushing, for example, use of the extraordinary budgetary mechanism.

and to get this decided by 51 votes. seemed like a great idea. i'm curious, why in the name of common sense are we being so fussy about having the decisions in the people's house and the people's senate decided on the basis of a simple majority. 51 votes. is there something wrong with that? i want somebody to tell me why we shouldn't give the people that kind of representation. i would note mandatory coverage mandates. that was in a bill introduced by my good friend bill thomas, chairman of ways and means committee and 20 members of the u.s. senate. they said -- and they were not fussy about that. i think we ought to look to see, here we have a chance to serve the people. i have people coming to my office with tears in their eyes.

they can't get coverage. they have preexisting conditions. a young dental surgeon i know could not get health care. why? because she had had breast cancer years before. she couldn't get care. i've seen a lot of other cases like that. people who would have drive-through pregnancies or drive-through mastectomies and all manner of high-handed abuse by insurance companies. i'm always surprised when i can find somebody that's defending the insurance companies after the things that they do to the ordinary people in this country. they could cancel your insurance policy while you're on the gurney headed into the operating room. if some be would explain that to me, i would be deeply grateful. but the fact of the matter is, we have a chance to do something that dan webster one time

observed. i thought it was a very useful thing that he said. and i think we -- he said, let us see whether we also, in our day and generation, may not perform something worthy to be remembered. it's on, madam speaker, as you well know. it's on the wall of the house of representatives. it's there for us in the house. my house and colleagues in the senate will know it and recognize it as something. we have before us a hideous challenge, the last perfect legislation that was presented to mankind was delivered to the israelis at the base of mount sinai. it was on stone tablets written in fingers of god. nothing like that has been presented to mankind since. what we're going to do is not perfect, but it sure is better and it's going to ease a huge

amount of pain and suffering at a cost which we can afford, which has been costed out by the office of management and purchase of the congressional budget office, said its budget neutral. it, in fact, reduces the budget. i beg you, my friends, to let us go forward on this great task. >> thank you, john. speaker pelosi wants to say a brief word. john, do you want to say anything in closing? then i will wrap up. nancy. >> thank you very much, mr. president. as one who has abided by the three and a half minute, i'm going to take a few seconds more now in closing to extend thanks to mr. president for bringing us together, for your great leadership. without it, we would not be so very close to affordability, accountability for insurance company and accessibility for so many americans to improve their health care, to lower their cost. mr. president, i harken back to

that meeting. at that time senator grassley questioned you about the public option. you said the public option is one way to keep the insurance companies honest and to increase competition. if you have a better way, put it on the table. well, i bring that up, because we have come such a long way. we're talking about how close we are on this, how far apart we are here. but as a representative of the house of representatives, i want you to know that we were there that day in support of a public option which would save $120 billion, keep the insurance companies honest, and increase competition. we've come a long way to agreeing to a republican idea. the exchanges senator enzi has been a leader in that. senator snowe along with senator durbin had legislation to that

affect and bipartisan, because insurance companies opposed the public option. they couldn't take the competition. we have in our bill market oriented, encouragement to the private sector initiatives. i think that the insurance industry left to its own devices has behaved shamefully, and we must act on behalf of the american people. we have lived on their playing field all this time. it's time for the insurance companies to exist on the playing field of the american people. i believe i have news for some of my colleagues, because we have very much more in common. senator, you had so many positive suggestions, which i didn't hear much else of, but from you we did. i think you'd be pleased to know after much debate in our house, we came up with value, not volume. others have called it quality not quantity in terms of

utilization, overutilization. senator mccain when you talk about -- we're talking about addressing regional disparities in terms of compensation and health care. so we have addressed many of these new issues in the bill. i think it's really important to note, though, and i want the record to show, because two statements were made here that were not factual in relationship to these bills. my colleague, leader boehner, the law of the land is there is no public funding of abortion and there is no public funding of abortion in these bills and i don't want our listeners or viewers to get the wrong impression from what you said. mr. kemp, you said medicare cuts for seniors. they do not. they do not. i want the record to show just in those two cases, we may have differences of opinion and

approach and evaluation of the value of different things, but certain things are facts about our bills that i cannot let the opposite view stand when they are stated. yes, it's hard to do this. misrepresentation campaign that is going on about these bills, it's a wonder anybody would support them, as mr. waxman said. but the fact is, as the president said, many of these provisions on their own are largely supported by the american people. so this will take courage to do. social security was hard. medicare was hard. health care reform for all americans, insurance reform is hard, but we will get it done. as we leave this debate, i think that many of the differences that we have are complicated and they are legitimate. they are differences of opinion about the role of government. but i think it's really clear on one point that the american people understand clearly, they understand that there should be an end to discrimination on the

basis of pre-existing conditions. the proposals we have put force end discrimination on the basis of pre-existing conditions, the republican bill does not. with that, mr. president, i thank you again for the opportunity to discuss the differences and to try to find some common ground on this. >> well, listen, this has been hard work. and i want to first of all thank everybody for being here and conducting themselves in extraordinarily civil tone. and as i said, given the number of folks that were around this table, the fact that we're only an hour late beats my prediction. here is what i'd like to do, and i'm going to take about ten minutes. i want to go through where i think we agree and i want to

summarize where i think we disagree, and i'll address process issues that have been we agree that we need some insurance market reforms. we don't agree on all of them but we agree on some of them. i think that if you look at the ones that we don't agree on, since there has been a lot of reference to what the american people want, it turns out that the ones that are not included in the republican plans right now but are included in the democratic plans are actually very popular. i know there has been a discussion about whether the government should intrude in the insurance market, but it turns out that on things like capping out of pocket expenses or making sure that people are able to purchase insurance even if they have got a pre-existing condition, overwhelmingly people

say that the insurance market should be regulated. and so, one thing that i ask from my republican friends is to look at the list of insurance reforms and make sure that those that you have not included in your plans right now are ones in fact, that you don't think the american people should get because i strongly believe in these insurance reforms. i have talked to too many family who is have health insurance and find out that what they have does not provide them with the coverage they needed and they end up being bankrupt or end up going without care or they get care too late, as was the case in the story that patty murray mentioned. case in the story that patty murray mentioned. the second thing i think we

agree on is the idea that allowing small businesses and individuals who are right now trapped in the individual market, and as a consequence have to buy very expensive insurance and effectively oftentimes just go without insurance could be solved if we allowed them to do what members of congress do, which is be part of a large group. again, the idea of an exchange is not a government takeover, it is how the market works, which is if you have a lot of purchasing power you get a lot of deal. that's how walmart drives its prices down. because everybody who wants to supply walmart, walmart tells them, you give me the best deal possible. and as a consequence, the supplier gives them a much better deal than they do the mom and pop shop in the corner. well, we should be able to give

small businesses and individuals who are self-employed who aren't able to get insurance through a large employer that same deal. it sounds like we've got some philosophical difference whether there should be some minimum benefits in that exchange, some baseline of coverage. again, there's a baseline of coverage for members of congress. the reason we set that up is because we want to make sure any federal employee who is part of this big pool is getting good quality kompl. not perfegold plated, adequate coverage. i'd like my colleagues to look and see is that an area that can be resolved. there's been a lot of discussion an one of the main tools the republicans have offered to drive down cost is purchasing insurance across state lines. this is an idea that is embodied

in the house and senate bill. but again, the details differ. the approach that john boehner and some of the republicans appear to take is to say, let's just open things up. anybody can buy anything anywhere, regardless of what state insurance laws are and that will drive competition and cost. the philosophical concern i have on that is that you potentially get what's been referred to as a race to the bottom. and for people who may not be following the intricacies of the insurance market, let me give an example people understand and that's credit cards. in the credit card market, part of what happened was we ended up allowing people to get credit cards from every other -- whatever state, and there were a few states that decided, you know what, we're going to have

the least restrictions on credit card companies that we can have. and what ended up happening was that every single credit card company suddenly lo and behold started locating in that state that had the worst regulations and consumer protections, and all these fees and practices that people don't like, folks weren't happy about. so the question i'm going to have, is there a way for us to deal with the interstate purchase of health insurance but in a way that provides, again, some baseline protections. because what we don't want is a race to the bottom. we want everybody to have the basic protections that make sense. that's not a big government takeover. that is a standard thing that we do in almost every area of life.

we protect people with respect to the food that they buy, with respect to the drugs that they purchase. we license and regulate the medical profession because we don't think anybody should just be able to cut somebody open. we want somebody like tom or john to actually know what they are doing before they start practicing medicine. and the same should apply when it comes to how we think about insurance. medical malpractice has been mentioned. now look, let me be honest. this is something historically that democrats have been more resistant to than republicans. i will note when we had a republican president, republican control of the house and republican control of the senate, somehow it didn't happen. i'm surprised. >> we needed 60 votes in the senate, too, mr. president. >> see there. so as a consequence what i have

suggested is that we explore building on what we've already done administratively with that law, asking kathleen to help states come up with new ideas. i've suggested, well, let's take a look at, tom, the suggestion you have that gives states even more incentive to start thinking about ways to reduce defensive medicine. joe barton how you got from $5 billion to $50 billion, i didn't quite follow the math. i'm not sure you did either. but it's okay. but here is my commitment. if folks were serious about getting this done, i'd be interested in seeing if we could work on something. i actually agree with dick durbin with respect to hard caps because of the story he told about the woman who burned her face. there are situations where there is actually a very severe

problem. i would distinguish that from the frivolous problems. ob-gyn have the most problem because people are sympathetic when children are born with problems. the same is true for neurologists and so on. there may be ways we can work on that. i guess what i'm saying is i've put forward, then, very substantial ideas that are embraced by republicans. peter, they are not -- i forget what metaphor, before you popped it in the microwave, whether it was bacon bits or sprinkles. >> breadcrumbs. >> breadcrumbs. that's what it was. when it comes to the exchange, that is a market-based approach. it's not a government-run approach. there were criticisms about the public option. that's when supposedly there was going to be a government

takeover of health care. even after the public option wasn't available, we still hear the same rhetoric. it turns out that what we're now referring to is we have an argument about how much we should regulate the insurance industry. we have a concept of an exchange, which previously has been an idea that was embraced by republicans before i embraced it and somehow suddenly it became less of a good idea. with respect to the most contentious issue, i'm not sure we can bridge the gap. that's what we have to explore. that's the issue of how do we provide coverage not only for people who don't have health insurance right now but also people who have pre-existing conditions and are being priced out of the market, or potentially lose their jobs and will find theirselves in a

situation where they don't get coverage. an interesting thing happened a couple of weeks ago. that is a report came out that for the first time, it turns out that more americans are now getting their health care coverage from government than those that are getting it from the private sector. you know what, that's without a bill from the democrats or from president obama. it has nothing to do with quote, unquote, obama care. it has to do with the fact that employers are shedding employees from health care plans. and more and more, folks, if they can, are trying to get into the social security system and the medicare system earlier through disability or what have you so they can get some help. the point that tom harkin made, the point that chris dodd made, the point that henry made and a number of other people made i think is very important to understand. i did not propose and i don't think any of the democrats

proposed something complicated just for the sake of being complicated. we'd love to have a five-page bill. it would save an awful lot of work. the reason we didn't do it, it turns out that baby steps don't get you to the place where people need to go. they need help right now. and so a step by step approach sounds good in theory, but the problem is, for example, we can't solve the pre-existing condition problem if we don't do something about coverage. now, it is absolutely true, and i think this is important to get on the table, because we dance around this sometimes. in order to help the 30 million, that's going to cost some money. the primary way we do it is to say, for example, the people who currently get their income in capital gains and dividends,

they don't pay a medicare tax, even though the guy who cleans the building for them does on his salary or his wages. and so what we say is if you make more than $200, $250,000 a year, if you're a family and your income is from those sources, then you should do -- you should have to do the same thing that everybody else has to do. somebody mentioned the fact that we say to small businesses, i think jon kyl you said, we're taxes small businesses. look, we exempt 95% of small businesses from any obligations whatsoever because we understand that small businesses generally have a tough time enough, they don't need any more government work. what we do say is if you can afford to provide health insurance, you have more than 50 employees, meaning you're in the

top 4% of businesses, and you're not providing coverage and you're forcing other businesses or other individuals to pick up the tab because your employees are either going to the medicaid system or they are going to the emergency room, we don't think that's fair. so we say you've got to pony up some. it's not an employer mandate, it just says you've got to pay your fair share, because otherwise all of us have to pick up the tab. that, by the way, contributes to the overall deficit that medicaid is running. in fact, most small businesses through this program get huge subsidies by becoming members of the exchange. that's where the money is going. the money is not going to some big welfare program. the money is going to give tax credits to small businesses, tax credits to those who are self-employed to buy into this pool. that's not a radical

proposition, it's consistent with the idea of a market-based approach. and finally, with respect to bending the cost curve, we actually have a lot of agreement here. this is an area where if i sat down with tom coburn, i suspect we could agree on 95% of the things that have to be done. because the things you talk about in terms of -- and i wrote some of them down. in terms of reducing medical errors, in terms of incentivizing doctors to coordinate better and work in groups better, in terms of price transparency, improving prevention. those are things that not only do i embrace but we've included every single one of those ideas in these bills. now, the irony is that that's part of where we got attacked for a government takeover. because what happened was when we set up the idea of a medpac,

which is basically a panel of doctors and health care experts who would recommend ways to make the delivery system better so that we can squeeze out that one-third in medicare and medicaid that's wasted, a republican idea, that was part of the ammunition you all used to s so if we're serious about deliffry system reform and skis squeezing out the ways that tom coburn referred to you should embrace the mechanism s that arein this bill. i will end by saying this. i suspect that if the democrats and the administration were willing to start over and then

adopt john bohner's bill we would get a bunch of republican votes. b republican votes. and i don't know how many democratic votes we'd get, but we'd get a whole bunch of republican votes. the concern, i think, that a lot of the colleagues both in the house and the senate on the democratic side have is that after a year and a half -- or more appropriately after five decades -- of dealing with this issue, starting over, they suspect, means not doing much or doing the proposal that john boehner or other republicans find acceptable. and that it's not possible for

our republican colleagues to move in the direction of, for example, covering more than 3 million people. it's not possible to move more robustly in the direction of dealing with the pre-existing condition issue in a realistic way. it's not possible to make sure that we get people out of a high-risk pool and get them into a situation where, as tom harkin put it, healthy people, young people, rich people, poor people, old people, sick people, everybody is part of a system that works. that, i think, is the concern. having said that, what i'd like to propose is that i've put on the table now some things i didn't come in here saying i supported but i was willing to work with potential republican sponsors on.

i'd like the republicans to do a little soul searching and find out is there some things that you'd be willing to embrace that get to this core problem of 30 million people without health insurance and dealing seriously with the pre-existing condition issue. i don't know, frankly, whether we can close that gap. if we can't close that gap, i suspect mitch mcconnell, harry reid, nancy pelosi and john boehner are going to have a lot of arguments about procedures in congress about moving forward. i will tell you this, that when i talk to the parents of children who don't have health care because they have diabetes, heart disease. when i talk to small businesses

that are laying people off because they just got their insurance premium, they don't want us to wait. they can't afford another five decades. and the truth of the matter is that politically speaking there may not be any reason for republicans to want to do anything. we can debate what our various constituencies think. i don't need a poll to think republican voters are opposed to this bill and might be opposed to the kind of compromise we could craft. it would be very hard for you politically to do this. but i thought it was worthwhile for us to make this effort. we've got a lot of other things to do. i don't think, tom, we're going to have another one of these, because people don't have, you know, seven, eight hours a day

to work some of these things through. what i do know is this. if we saw movement, significant movement, not just gestures, then you would need to start over because essentially everybody here knows what the issues are. and procedurally it could get done fairly quickly. we cannot have another year long debate about this. so the question that i'm going to ask myself, and i ask all of you is, is there enough serious effort that in a month's time or a few weeks' time or six weeks' time, we could actually resolve something. and if we can't, i think we've got to go ahead and make decisions. then that's what elections are for. we have honest disagreements about the vision for the country

and we'll go ahead and test those out over the next several months until november. all right? but i very much appreciate everybody being here. thank you for being so thoughtful. you know, hopefully we'll all keep our constituents in mind as we move forward. thank you, everybody. [ applause ]>y=>= [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> remarks from harry reid and other democrats. in about 10 minutes mitch mcconnell talks to reporters.

>> first of all, the most patient man in the world is barack obama. he sat through that and was so patient and responsive. it was an issue-oriented meeting. the president let everybody talk and talk and talk and i think that there is so much agreement but yet, every republican used the same talking points, every one. every member of congress used the same talking point and we want to do a bill for the american people. we're going to continue to work very hard. we're ready to do it. the president said we have to do something very soon. i agree with him. we're willing to work with him. time is of the essence. the american people have waited five decades for this. it is time we do something and we're going to do it. >> thank you mr. leader. i agree with the distinguished leader. a president is indeed a great

leader in that he has a vision for our country in how we move forward with health insurance reform. he is striving to build consensus. he is listening for any common ground and extending an invitation for that and so i'm hopeful that something may come of it. i'm not overly optimistic that we would get republican votes for the bill but that doesn't mean we couldn't incorporate some of their good ideas into legislation should they put some on the table. the president one year ago had us all here at the white house, march 5, widespread his health -- where he had his health summit and over the past year within the committees of jurisdiction and in the congress he has sought bipartisan support that continues until today. i hope that something will come of this. i use the analogy of the kitchen table. we sat around the kitchen table,

that table in that room. we have to represent the aspirations of americans as they sit around their kitchen tables concerned about their jobs and the education of their children as well as their health care costs and how they are going to pay their medical bills. those people who are struck with illness or pre-existing conditions want us to ask they want results. we can't say to them at the end of the day, we had an idea, we had a vision, we had a majority but the process did not allow us to make a change for your life. we need have the courage to get this job done and we will and i think today took us a step closer to passing health care, to improve health care, to lower costs and to make it much more accessible to many more americans. i salute the president for his leadership.

>> mr. durbin? >> i just want to make two points. first to thank president for bringing us together. it was a long day where he was open to everyone's comments. there were two things that come through to me. first we agree on many basic things, we feel that any bill that is going to serve the american people has to have the kind of regulation of an insurance company so that people understand when they buy a health insurance policy it will be there when they need it. the whole issue of pre-existing conditions, if we allow them to turn americans down because of pre-existing conditions we're not going to give them the peace of mind and security they need. secondly, i looked around that room and realized that virtually every member of congress in that room is part of a health insurance exchange run by the federal government with imposed minimum standards on the health insurance companies. our republican friends who find this so objectionable for the

rest of america live with it every day. we should offer them the same coverage that we enjoy as members of congress. >> thank you. steny hoyer. i've been in the house for almost 30 years. i've lived in the washington area for a long period of time. i cannot remember a similar -- i cannot remember a president of the united states spending an entire day sitting with some 30 members of congress discussing an issue. displaying an extraordinary depth of knowledge of that issue and an extraordinary passion to accomplish the objectives of that legislation. my view is that this meeting was worthy of the objectives we seek. worthy of the objective of including all americans with

access to affordable health care. you have heard that mantra but that is reality. and what we saw in that meeting was a difference. a philosophical difference. a difference of scope. one party, the republican party having a bill which essentially includes 10% of those who are uninsured. we believe that all americans need to be included. that's a difference but there were also areas of agreement 3789 and we pointed those out and many of the areas of agreement that republicans sought have already been included in our bills. we hope that based upon this discussion we can move forward, but move forward we will to accomplish the objective that all of us, including the president of the united states, and including john mccain, said

were the objectives of including every american and that is the phrase of john mccain. every american in affordable health care. >> the fact is that we are going to move forward. the ball was in everybody's court to try to find some common ground on how we move forward. mr. durbin pointed out that in order to make the changes, in order to end discrimination on the basis of pre-existing conditions and all the reforms that we want to make, in order to hold the insurance companies accountable there has to be some regulation of the insurance industry. that seemed to be the big stration between the democrats and the republicans. whether that can be bridged remains to be seen.

>> first of all, one of the first speakers was dr. coburn. he laid out a logical approach as to what should be done with health care. the president said that's interesting. everything you have talked about is in our bill. if logic has anything to do with reaching an agreement, it should be pretty easy. >> thank you. >> we had the opportunity to meet with the president today and discuss health care and as he conceded and a number of the majority conceded there are plenty of good republican ideas. the core problem is this. we don't they 2700-page bill that huts a half a trillion dollars out of medicare and

raises taxes by half a trillion dollars and drives insurance premiums up is a good idea. what we think you ought to do is start over and go step by step and target the areas of possible agreement that we discussed in the meeting today. frankly i was discouraged by the outcome. i think it is pretty clear that the majority, including the president, want to continue with the -- basically the senate bill, which has been made more expensive based on the president's recommendations put on the internet days ago. we're happy to contend the areas of agreement but i just don't believe there will be any republican support of this 2700-page bill that the american people are so overwhelmingly opposed to. >> i think the american people want us to work together. on common sense steps to make our current system work better. american people are concerned about health care.

there are some areas that we can agree on, that we can work together on. bring down the cost of that system. butñi we can't do it within the framework of a 2700--page bill. why the bill needs to be scrapped. >> let me just say one thing quickly. i wrote a note to myself at the end. i just don't think the president was listening even though he invited us to hear our ideas. he actually consumed more time than all of the republicans combined or the democrats combined. much of it was responding to our ideas. he wanted to argue with us. there are some reasons for it. there are some fundamental differences of opinion. it is not going to be possible with that kind of approach to come together within the

timeframe he indicated as senator mcconnell said starting with this 2700-page bill and tweaking it to adopt some of our bills. the whole concept of the bill with this government mandate and taxes and spending and all the other features of it are what make it unacceptable to us and to the american people. that's where we have to start. >> what is the next step? >> well, you heard what we recommend and that is that we scrap this bill and start over. we also ought to listen to the public. we know that public opinion polls indicate americans are o positived to this bill 55% to 37%. a gallup just this morning how americans would feel using this little used reconciliation device and by 53% to 39% americans are opposed to doing that. i think the message is very

clear. the american people have followed this issue like no other in time i've been to washington. everybody is interested in their own health care. they do not want this bill. it is time we started listening to the people that we represent. >> i wouldn't call it a waste of time. it was a good discussion. you d.n.a. the room i think -- you had in the room most of our really knowledgeable people on the subject so i would not call it a waste of time. >> you just said to us at the end of it the same thing you said early on in the health care -- what was gained by all of those hours? >> well, the president kept saying the same thing too. i think it is pretty clear on this big, important issue, we have very strongly held opinions on both sides. we think the best way for this

to be resofted is to pay attention to the people who -- resolved is to pay attention to the people who sent us here and do not pass this bill. >> i do think in terms of the meeting, it was worthwhile. there are a number of areas that are in agreement. but let's take those issues that are of agreement, things that we can work together on and let's do this but we can't do it in the context of a trillion dollar bill that has all of these tax increases and medicare cuts in it. >> you can watch the white house health care summit in its entirety at c-span's health care webpage. read the president's health care plan released this week. go to c-span.org/healthcare.

>> on this morning's "washington journal" new jersey congressman rob andrews who attended the health care meeting will talk about what's ahead for health care and then sandy praeger joins us and later thomas hoenig talks about banking regulations. "washington journal" begins at 7:00 each morning. up next, a hearing on executive pay at a.i.g. and other financial companies who received government loans. we'll hear from the treasury department and the federal reserve. the house financial services committee is chaired by barney frank . this is a one-hour portion. >> chairman frank, ranking mechanic baucus, thank you for

the opportunity to testify on this important subject. our principle is to attract and obtain the executive leadership needed to ensure the ongoing function of the secondary mortgage market while minimizing taxpayer losses. at the inception, the incumbent c.e.o.s were replaced and received no severance payment because most of their compensation has been in the form of stocks and roughly 2/3 of their pay during their ten. ultimately, five of the six highest paid fannie mae

executives and the top four freddie mac left but known of them received severance or other golden parachute pames. i would like to add that many of the more 11,000 enterprising employees earned portion of their payments in stock and suffered accordingly. in developing a new compensation structure for senior executives, f.h.a. consulted with mr. feinberg on how to adapt the approach he was targeting. in making that adaptation, a major consideration was a compensating executives with company stock would be ineffective because of the questionable value of such stock. further, large grants of low-priced stock could provide substantial incentives for executives to seek and take large risks. accordingly, all components of executive compensation of the enterprises are in cash. another consideration is the

uncertain future of the enterprises as continuing entities, which is in the hands of congress and beyond the control of enterprise executives. it is generally best to focus management's incentive towards the institution's performance in the long run rather than just in the near term. >> let me interrupt you briefly. let me just thank mr. feinberg. it hasn't been an easy day. the next witness -- you will have seven or eight mince to collect yourself. we there was a train wreck. we thank you for making every effort to come here. i apologize mr. marco. please continue. >> in setting target compensations for the most senior positions we considered data from interprice and received from our own

consultants. it was important to set pay at levels sufficient to compete for quality talent because the enterprises had many key vacancies to fill, potential departures to avoid and pay has been a significant issue in some cases. f.h.a. settled on a targets of $6 million a year for each c.e.o.. $3.5 million for the chief financial officers and less than $3 million for executive vice presidents and below. i know $6 million is a considerable sum of money but that rolls back pay to pre-2000 levels, less than half of targets pay for enterprise c.e.o.s before the conservatorship. fannie mae and freddie mac have reduced target a pay by an average of 40%. the basic compensation structure, has had institutions

receiving tarp assistance comprised of base salary, defered salary. my latest statement details these components. in my judgment we have achieved the right balance while preventing compensation from exceeding appropriate bounds. directors tied to the financial collapse of each enterprise are no longer with the company. the group of senior executives who remain as well as those who were recently hired are central to the enterprises filling their important and challenging responsibility and in attempting to do so, the enterprises must operate with an uncertain future that will be the source of debate. as conserve or the, i believe it is critical to protect the taxpayer interests in the enterprises by ensuring that each company has experienced, qualified people managing the

day-to-day business operations in the midst of this uncertainty. any other approach puts at risk the management of more that are $5 trillion in mortgage credit risk supported by the taxpayers. thank you and i'm pleased to answer questions. >> next, mr. scott alvarez. >> chairman frank, ranking member baucus. members of the committee. thank you for the opportunity. compensation arrangements soy several important and worthy objectives. for example, they help firms attract and resane skilled staff. however, compensation arrangements can also provide employees with incentives to take excessive risk s that arenot consistent with the long-term health of the organization. this misalignment of incentives can occur at all levels of the firm and is not limits to senior executives.

having experienced the consequences, many financial firms are re-examining their compensation structures to better align the interests of managers and other employees with the long-term health of the firm. for firms that have received assistance from tarp, that includes ensuring their compensation structures are consistent with the special masters rules designed to protect the financial interests of taxpayers. the federal reserve has also acted as a supervisor. the guidance which we expect to finalize shortly is based on three key principles. first, compensation arrangements should not provide employees incentives to take risks that the employer cannot effectively identify and manage. financial firms should take a more balanced approach that

adjusts incentive compensation that so employees bear some of the risk as well as the rewards associated with their activities over time. second, firms should integrate their approaches to compensation arrangements with their risk management and internal control frameworks. risk managers should be involved in the design of incentive compensation arrangements and should regularly evaluate whether compensation is adjusted in fact to account for increased risk. third, boards of directors are expected to actively oversee compensation arrangements to be sure they strike the proper balance between risk and profit on an ongoing basis. recently the federal reserve began to initiate i evers to spur the improved practices. the first is a special horizontal resue. large firms warrant special supervisory attention because

the adverse effects are more likely to have consequences. although our review ongoing, we have seen positive steps, at many of these firms. however this substantial changes of many firms will be needed to confirm practices with principles of safety. it will be some time before these changes are fully address. nunl we exps these firms to make progress in improving the sensitivity of their compensation practices for the 2010 year. the second initiative is retail and smaller banking organizations. they are not nearly as complex as at larger institutions. accordingly, review of incentive compensation practices at these firms will occur as