back to the beginning, not to do this type of legislating. they want us to sit down and do what is best for all americans, not just those who live in florida or other favored status. they the uniform treatment ofi all americans treatment hoped that would be an argument for us to go through this document and remove all the special deals for special interests and favored few, and treat all americans the same under provisions of law so that they will know the geography does not dictate what kind of health care they will receive. >> let me just make this point, john, because we're not campaigning. the election is over. >> i am reminded of that every day. >> we can spend the remainder of the time with our respective

talking points going back and forth. we were supposed to be talking about insurance. obviously, i am sure that harry reid and chris dodd and others who went through an exhaustive process through both the house and senate with the most hearings, the most debate on the floor, the longest,up in 22 years on each and every one of these bills would have a response for you. ry one of these bills, would have a response for you. my concern is that if we do that, then we're essentially back on fox news or msnbc on the split screen just arguing back and forth. so my hope would be that we can just focus on the issues of how we actually get a bill done.

and this would probably be a good time to turn it over to secretary sebelius -- >> could i just say, mr. president, the american people care about what we did and how we did it. i think it's a subject that i think we should discuss. >> they absolutely do care about it, john, and i think that the it, john, and i think that the way you ch obviously would get some strong objections from the other side. we can have a debate about process or we can have a debate about how we're actually going to help the american people at this point. i think that's the latter debate is the one they care about a little bit more. so kathleen, why don't you just address some of the issues related to insurance reform. there is some agreement here, but i know that on the republican side, there are a couple concerns about the issue of rate review, the issue of setting up some benchmark standards that insurance companies have to abide by. some people may think those have

been a little bit too aggressive. you have been both a governor as well as an insurance commissioner. maybe you can talk a little bit about what you've seen at all those different levels and how you think we can best move forward to protect american families. >> well, thank you, mr. president, and i know there are lots of people who want to comment on these topics but i don't think there's any question and i think there's a lot of agreement that the current insurance market really fails way too many people. it is a system that is not a market for about 40 million americans who are either in an individual policy or in a small group policy, have no choice. there is no competition according to the american medical association in their study yesterday, 99% of the market in metropolitan areas, 75% of the markets across the country are very concentrated, which means they're monopolies, they're not markets.

so we've got a trap. i think the rules allow people to be locked out from the front end, if you've got pre-existing conditions, allow people to be thrown out with a stop on benefits during the course of a treatment or when your policy expires and you're supposed to renew, you're dumped out of the market, or to be priced out, which is going on across this country. there's been highlight of a couple of rates but double digit rates across the country on top of double digit rates on top of double digit rates and people have no choices. so the common areas, i think, of agreement, high risk pools. there are lots of states across the country running high risk pools, as an insurance commissioner, we ran the high risk pool in kansas. it is a strategy that's been in place for almost 30 years in many states. 200,000 people total in the entire united states are in high

risk pools because they are so expensive that they really don't offer -- because when you put all the sick people together and you say okay, you get to buy a policy, and you get no help with that policy, it is a death spiral. you will always have the highest cost and on top of that, the highest cost and you've got the sickest people who are already paying the highest cost for treatment. they don't work very well. they are a stopgap measure that the house and senate have proposed to get people from here to a new market. i think what the exchanges have a lot in similarity with the health plans that have been talked about by the house and senate. there's a big difference. it's not a washington difference. it's a state difference. the state insurance commissioners across this country have unanimously opposed health plans for decades and they feel that it takes people -- it isn't the pooling

that's objectionable, it's the fact that there is no consumer protection. that there is no ability to apply common sense rules and we have the drive-by deliveries in kansas where people were being kicked out of the hospital 18 hours after having a baby to save money, only to be readmitted with jaundice and readmitted with dehydration. it's not a particularly good idea. so getting rid of pre-existing conditions, getting rid of caps on yearly benefits and long-time benefits, allowing kids to stay on plans are ideas that have been accepted by both. setting up a new marketplace, giving small business owners and individuals choice and competition in the private sector but making the private sector operate on a different set of rules, including having some loss benefit analysis. how many of those dollars you heard senator coburn eloquently

talk about the 30 cents of every dollar that goes to pay for expenses other than medical costs. a loss benefit analysis and medical ratio would do just that. how many of your dollars are you actually spending on provider care, on prescriptions, on treatments, and how much is going to overhead and ceo salaries and advertising to try and get a handle on rates. having some rate review. having some transparency and some opportunity to have people make choices and make companies compete with one another and not separate the marketplace. i think the most dangerous part of the system right now is having people -- having insurance companies pick and choose who gets coverage and who doesn't based on your health condition. it's a lot cheaper to insure people who promise never to get sick. i watched it as insurance commissioner. but segregating that market is not insurance. it's not pooling a risk.

i think your proposal, mr. president, gets back to the notion that there be a pool, there be an opportunity to pool that risk and have people have the kind of negotiating powers a governor, like senator alexander, i am a former governor. we both ran our state employee health pools. i don't know about tennessee, but in kansas, that was the largest pool in the state, 90,000 covered lives. we had a lot of negotiating power. we could get a pretty good deal on a couple of companies competing on hospital rates, on doctor rates. that's what this kind of pooling mechanism in a new exchange would give everybody, and it's around a set of standards that made sense. >> okay. >> mr. president? >> yes. >> mr. cantor, please. >> eric? >> mr. president, thank you again very much for having us and for staying with us for the six hours. appreciate that.

i don't know if you will after the six hours or not -- >> let me just guess. that's the 2400 page health care bill. is that right? >> well, actually, mr. president, this is the senate bill along with the 11-page proposal that you put up online that really i think is the basis for the discussion here. but i do want to go back to your suggestion as to why we're here, and you suggested that maybe we are here to find some points of agreement, to bridge the gap in our differences. and i do like to go back to basics. we're here because we republicans care about health care just as the democrats in this room, and when the speaker cites letters from the folks in michigan, the leader talks about letters he's received, mr. andrews, his, all of us share the concerns when people are allegedly wronged in our health care system. i think that is sort of a given. we don't care for this bill. i think you know that.

the american people don't care for the bill. i think that we have demonstrated in the polling that they don't. but there is a reason why we all voted no. and it does have to do with the philosophical difference that you point out. it does have to do with our fear that if you say that washington can be the one to define essential health benefits, there may be a problem with that. that's the language in the section 1302 of this bill. it says that the secretary shall define for people what essential health benefits are. but let's, in the spirit of trying to come together, let's try and say maybe if we assume that washington could do that, could really take the place of every american and decide what is most essential, what would be the consequences, and that's also where we have a big

difference in this bill and what would happen. first of all, the cost. jon kyl laid out the tremendous costs in the nearly $1 trillion of this bill and i don't quite know if the cbo said it couldn't assess how much your additions would cost to it, but we do know that there are plenty of taxes on income now, you suggest investment income should be taxed. we have additional taxes on medical devices and the rest. what is the consequence of that. we know there are consequences that small businesses will feel because of the impact on job creation. but also, mr. president, when we were here about a year ago across the street, you started the health care summit by saying one of the promises you want to make is that people ought to be able to keep the health insurance that they have, because as we also know, most people in this country do have insurance and overwhelming majority of people do like that coverage. it's just too expensive.

well, the cbo sent a letter, i think it was about the senate bill, and in that letter it suggested between eight million and nine million people may very well lose the coverage that they have because of this, because of the construct of this bill. that's our concern. so as we are in the market -- in the section of this discussion about health insurance reform, i know, mr. president, that you have suggested strengthening oversight of insurance premium increases because we want to make sure that there aren't excessive insurance premium increases that take place. the problem is when you start to mandate all of the essential benefits, there are going to be some insurance premium increases. none of us really want to see them but if you stop them, who's going to pay for it? well, we get back to the fact

that businesses won't be able to pay for it and people are going to lose their coverage. so i guess my question to you is in the construct of this bill, if we want to find agreement, we really do need to set this aside and we really do need to say okay, you know, the fundamental structure is something we can agree on, but there are certainly plenty of areas of agreement and because i don't think that you can answer the question in the positive to say that people will be able to maintain their coverage, people will be able to see the doctors they want, in the kind of bill that you're proposing. >> well, let me, since you asked me a question, let me respond. the eight to nine people people that you refer to that might have to changed their coverage, keep in mind, out of the 300 million americans that we're talking about, would be folks who the cbo, the congressional budget office, estimates would find the deal in the exchange better. would be a better deal.

so yes, they would change coverage because they've got more choice and competition. let's be clear about that point number one. point number two, you know, when we do props like this, you stack it up and you repeat 2400 pages, et cetera, the truth of the matter is, is that health care's very complicated. and we can try to pretend that it's not, but it is. every single item that we've talked about on the republican side, if we wanted to exhaustively deal with fraud and abuse, would generate a bunch of pages. i point that out just because these are the kind of political things we do that prevent us fr -- let me respond to your question. we could set up a system where food is cheaper than it is right now if we eliminated meat inspectors.

and we eliminated any regulations in terms of how food is distributed and stored. i will bet in terms of drug prices, we would definitely reduce prescription drug prices if we did not have a drug administration that makes it -- to make sure we test the drugs so they do not kill us. okbut we do not do that. we make some decisionsç to çprotect consumers in every aspect of our lives, and we have bipartisan support for doing it, because what we do not want is the situation in which it suddenly people think they are getting one thing and they are getting something else. they are harmed by a product. what secretary sebelius referred to, which is not a washington

think, in fact, state insurance standards are higher than anything done in washington, is as a consequence of seeing consistent abuses byç the insurance companies and people finding themselves helpless to deal with them. ce 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.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> if you would like to see this

entire meeting and health care, go to c-span's healthcare hub. read what members of congress are saying, and it joined in the conversation yourself on twitter. you can find cost estimates and hundreds of hours of videos from house and senate debates. cspan.org/healthcare. >> i come from latin america. i was never expecting to find this kind of poverty in the capital of the u.s. >> photographer and documentary filmmaker on a different side of the nation's capital. tonight and c-span's "q&a. >> following a lunch break, democrats and republicans returned it to blair house, across from the white house, to

continue the discussion on health care legislation with president obama. this afternoonç session is thre hours, 25 minutes. >> there were several people in the queue who did not have a chance to speak prior to us breaking. i suspect people may have other issues they 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 will have to buy and open that up -- joe biden. >> i would like health reform to get on the list. [inaudible] >> no, no.

we will be talking about health reform. i guarantee you will be called upon -- you will have a chance to talk about all these issues. ." >> mr. president, what time to expect to end the meeting? >> we are running a little bit late, but for having a lot of elected officials sitting around the table, we are not too late [laughter] my hope is that we can adjourn by 4:15. all right? çoriginally scheduled to go to 4:00. we are starting a little bit late on this front. we will see if we can get out of here by 4:15. that will require more discipline on all our parts then was shown in the morning session, including myself. i thought the tone of the discussion it was helpful and i appreciate everybody's participation so far.

with that, i will go to -- >> [inaudible] >> you're talking about leaving, mr. president, please put me on the list. >> i guarantee you you guys will all have a chance to speak. we will go to mike enzi and then to tom harkin. i know we had jay rockefeller on the list. was there another republican that wanted to speak on the insurance reform issues? do you want to go to john barrasso? 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 country is based on a flaw. and the flaw is, their ratings are based on segregating people because of their health.

whenever i hear the word pool, this pool, that pool, this pool, i think segregation, you're segregating people out because of their health status. i think it's time i sold insurance as a young man. the more people in the pool, the more chance to segregate. you will segregate people on the basis of health. it is time to stop that kind of segregation in our country. >> thank you very much. on the issue of 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 programs that makes affordable coverage available to those who are sick and those who

have a pre-existing condition. i will not go through all those things that others have talked about, and our approaches are somewhat similar on this issue -- pre-2014, in a period where the house and senate bills are ramping up, but there is a pretty big distinction. and that is that there is a key difference in the approaches. we prevent waiting list during that period what the house and senate approaches are is those rules are set in washington. when you look at the senate bill on pages 48, 51, and 52, it is the secretary of health and human services that has the

authority to raise premiums, reduced benefits. while we are similar and what we talk about, there is a key different approach there. then, asfter 2014, when the bill fully comes into play, you have a different approach the re. and what you do is establish pre-existing condition and a blanket with the individual mandate. -- linke i it with the individual mandate. the american people have told us they do not want to be forced by health insurance -- to buy health insurance. the american people are saying the requirements to buy insurance is something they want to scrap and start over on. that is why you're seeing state legislatures are around the country passing resolutions saying, our citizens will have a choice on whether they buy health care.

there will have a choice other kind of coverage that will have. this is a fundamental difference that i think we have to really begin again and really take into what the people are saying and expressing this through their elected representatives in the state legislatures. i know there are a lot of former state legislators. that is a very serious point we need to address. >> i will just touch on your last point, which is the whole issue of pre-existing conditions tom harkin mentioned it, and i will be very brief brea. the way you do with a pre- existing condition is to essentially set up a high risk pool. that is the mechanism. what you're saying is if you are sick or older or you have hip

replacements or what have you and you are having trouble buying insurance on the open market, you are going to be able to buy into a high risk pool. tom made the point earlier that, and this is in dispute -- i do not think anybody who would disagree with this -- if you set up a high risk pool in which he did not have healthy, young people in the same pool as older, sicker people, the premiums for the older, sicker people will be higher. we looked at the dinner bell. -- to sethe baynor bill to see w you approach that. you have some re-insurance. we use a high risk pull as well until we get to the exchange -- the high-risk pool fountil we get to the exchange.

given the amount of money that you have, allocated for that pool, it is not going to be a very useful tool for the vast majority of people who have pre- existing conditions, just because there is not enough money you guys put into it to cover all the people with greek and this -- pre-existing conditions, which is why other states have high risk pools. there are, i do not know how many states, let's say 21 states currently have high risks pools. of those cut to under thousand people use of high risk -- 200,000 people use the high-risk pool. the reason is just by dealing with older, less healthy

individuals, or people with pre- existing conditions separately, it is very expensive. tom's point is if everybody is in it, we do not know whether our kids are going to be suffering some sort of disease that we do not anticipate yet, or are spouses get ill, that if everybody is in it, then that drives prices down cheaper for everybody. it is not that i think the high risk pool is a bad idea. the proposal i put forward all use that as a stopgap measure to get to a broader pool, but the goal has to be to get everybody in a place where those risks are spread more broadly. >> if i just might say, we support high risk pools and re-

insurance with $25 billion in funding. the house and senate buildings are $5 billion in funding. because of that, cbo says it will work. the fundamental difference after that is that the health and human services secretary, in a four-year period, has the authority to raise premiums. all that is brought to washington. we leave that authority in the states so they can manage their state pool. after the bill becomes effective in 2014, the real problem is the mandate and the cost, the forcing of the purchase of insurance which many americans find objectionable and you can avoid that mandate if you continue to design this, as we do in the beginning. and both plans are somewhat similar on that. but it is a different structure. >> what i would like to do is to move on to the topic which i

think underlines -- we have still go jay. my apologies. >> we have not discussed, i think, what is at the basis of the frustration about this whole business of pre-existing conditions and lifetime limits, all the rest of it, and that is the way and the nature of the health insurance industry for the most part. they are, a mall all industries i have encountered -- on the congress committee we have spent a year analyzing and bringing out some of their sins and ills -- they are terrible. they are in it for the money. they're terrible, they're we will not sacrifice -- we had a fellow named wendell potter

who worked for cigna for 20 years and described the way health insurance companies operate. they are looking for reasons to keep you out. they are looking for reasons, if you already have health insurance, for doing rescissions. yes, we will ban those, but not unless we pass a bill. in fact, often employees are incentivized financially, to find reasons to kick people off insurance they are paying for. so you can be paying your prints and they discover, they come up with something they found in your background they do not like and they kick you out. they can do that now legally. people say, well, maybe this states should do this better. that situation we have now, abou 3444 of 50 states make it

legal for health insurance companies to do this, to deny coverage for something for which people got sick, babies or adults. i've got a letter from the ceo of cigna written to me, and he said i want to apologize because we spend $5 billion on this small group insurance, and i checked, and we had not. why don't people know that? because the health insurance industry is the shark that swims just below the water. you do not see that shark until you feel the teeth of that chart. and lest i be accused of trying to overdramatize, this is the way they operate.

no one has oversight. they are not under any antitrust rules. they can do what they want. they so dominate the market, as the secretary pointed out, that there is not a real competition. they can do what they want and they do. and it is money. and it makes me sick. it should not happen in america. people say, well, government- run. you have got to do that are put that restriction on them. if you do not put the restriction on, they will go on doing this. the public option -- i liked that a lot, but that will not be possible. you have to go at them and clip their wings in every way that you can. and with this general agreement on pre-existing conditions and recisions and lifetime annual limits, it is not a lot of fun

to sue and 8-year-old kid, which i knew this kid, and he had leukemia. and he had annual limits, and he ran out, and then he died because there was no insurance. could they have cured his cancer? i do not know, but that is what insurance is for. this is a rapacious industry that does what it wants. unknown in their behavior to the people of america, except on an individual basis. when you talk about individual mandate, that is not in there for some government makes that decision purpose. is there because you have to have a big pool.

i have a son who is old enough to of health insurance. he does not have it. when my wife and i found out, we told them to get it the next day. he did not think he needed to have it. he would live forever. that is the premise among young people. that is why we have the requirement that people sign up for health insurance. and they do not know if they are going to need it. and he does not know that he will need it. so you make everybody participate, and then you have a bigger risk pool. i want to say one word about medical loss ratio, because it is a crazy name, but it is a good concept. what we say is the health insurance industry says they spend 87% of all their revenues from premiums or investments they might have on health care. that does not work out quite that way. for large businesses, they do a better job.

for small businesses and the individual market, they are down and west virginia in the high 60's and low 70%. how do stop that? you cannot stop that by asking them to. you stop that by having an law, which is a good law, saying you have to spend between 80% and 85% of everything you taken on medical care for your patience, and if you do not, we will know about it, because we will be tracking it and you have to rebate that difference to the people. so there is a reason for doing that. it is good public policy. it cannot just have been on a voluntary basis. -- just happen on a voluntary basis. the rate review.

i wish we could talk about the medicare advisory board, which is controversial pickup we will have a chance. let's wrap it up. -- we will have a chance. let's wrap it up. >> the insurance rate review is important. if kathleen sebelius is to be called an unelected person, and she has had the group that does all of medicaid and medicare in health and human services and she has been a governor and an insurance -- she knows the whole thing. i do not call her down because she was not elected, but was appointed by you and was a brilliant choice. sometimes decisions have to come from washington. what we are about here is not trying to run by government. we are trying to protect

consumers. if you are going to protect consumers, you have got to have a way they really do get protection and they know it and they feel it in their lives. so this insurance reform is important. it is profoundly emotional. and we have got to do something about it. >> mr. president? >> ms. blackburn was on the list before we left. >> ok, go ahead. >> thank you, mr. president. one of the points we want to cover was the across state lines purchasing of insurance. you alluded to that a couple of times and mentioned that you felt like we were close on that issue. i think there are some very important structural differences in the way we approach this, just as i think there are some very deep philosophical differences in how we approach to health care reform. . .

differences in how we approach health care reform. now a lot of the people that i talk to want us to start over in this issue. they want us to give them the ability to hold insurance companies accountable, one of those ways is through very robust competition. if you have a very robust district like mine, where the bulk of our constituents are within 15 miles of the state line, the ability for those individuals who have families individuals who have families and love and work and employees who shop on the other side of the state line for major purchases every day is to be able to allow them to make those purchases. if you want to empower patients in front of those insurance companies, take the power away 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 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. memo we are basing the fact that there are $919 billion that we are spending on health care and medicaid. i do not see any fire walls that will keep costs from dublin again. in the year -- from dublin again. in the year 2019, we will be spending $700 billion if we do

not do something to bend a that occurred -- $1.70 trillion if we did not do something to bend that curve. we have scored the various plans as to whether they have no accompanied the cost curve. i do not think there is anyone plan that is out there. one plan does cut the cost by $300 billion over 20 years, according to cbo. the senate plan cuts it by over $1 trillion over 20 years. $100 trillion over 10 years. the fact is it is not just cdo that said this. you have the business roundtable study that shows that the senate plan slows growth by 15% to 20%

and that business costs for employees by the year 2019 would be $3,000 less per employee. the wrong -- it may be wrong in the exact amount, but it cut costs. it seems to me that -- and i might add that, in the process here, it was not specifically part of the long-term debt debate, but as has been pointed out here, we are not cutting medicare benefits, we are trying to eliminate the problem of waste. senator enzi pointed out that some of these savings could be put back into medicare. 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 m i want to establish whether we have agreement at the medicare a dented program -- which is what we are planning to reform -- -- the medicare advantage program -- which is what we're planning to reform is not a good deal. they are paying an extra premium of $80 or $90 a year to subsidize medicare advantage. >> i would also like to address that issue. >> if somebody else would like to --

>> why in the world would we carve out 800,000 people in florida who would not have their medicare and advantage cut -- medicare advantage cut? i propose an amendment on the floor that everybody should be treated the same. why should we are about 800,000 people to keep the program and then -- >> i think you make a legitimate point. >> thank you. [laughter] >> let me just step in for a moment. >> i am going to javier. in fairness, i ask a question and will let a republican response. >> we have medicare part d, except no senior in this country ever paid a tax dollar for it.

we're talking about filling the novel -- billing the doughnut hole in the billions of dollars of debt for children. children. i'm not sure the seniors want us to leave more debt for the children to fill a donut hole. when we talk about filling the 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 you are going to put 14 million or 18 million people into medicaid -- it pays in my state about 60% -- 80% of costs. doctors do not take medicaid. you're going to promise all those people medicaid that they will be covered -- but what if you do not have doctors to

service them? is that not dishonest? to promise something you cannot deliver? there are things in this bill -- medicare, medicaid cuts, that i do not see any future congress having any more guts than we do to close more hospitals. you have to take into consideration the consequences of the actions or the unproven promises that will not materialize. that is just the way i see it. working in those 31 meetings -- hundreds of hours of meetings, i learned a lot about health care. we did not get a bill out of that bipartisan effort, but i am sure glad i spent all that time there, because i learned a lot about our system that i would not have otherwise known. >> thank you.

i am going to kent next. i want to make one point. if the notion -- the notion is that, if we cannot make some hard decisions about how entitlements work, because it is not realistic -- nobody is going to have the guts to do it -- then we are in big trouble. that means that the federal budget and state budget and business budget and family budget will be gobbled up by this thing. 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 i told you i would never say anything outside of the room that i would not say inside the room. i have been patient. i have listened to the debate. why can we not agree on those insurance reforms that we have talked about? why cannot we agree on purchasing across state lines? why get we do something about medical malpractice and defensive medicine?

let's start with a clean sheet of paper and get into a lot in the next several months. >> the challenge i have here -- and this has happened periodically -- every so often, we have a pretty good conversation try to get to specifics, and then we go back to the standard talking points that democrats and republicans have had for the last year. it does not drive us to agreement on issues there are so many things you said that people on this side would profoundly disagree with. i would have to say, based on my analysis, they just are not true. i think the conversation gets bogged down pretty quick. we were trying to focus on the deficit issue. the fact of the matter is, as we indicated before, that according to cbo, this would reduce the

deficit. paul has different ideas about it. other folks may think there are better ways of doing it. right now, what we are doing is focusing on the issue of federal entitlements and whether we can make some changes. . 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. 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 p , his checklist manifesto is a very basic approach to reducing medical errors. i would like to say, mr. president, that what you and the secretary have done is the right thing, incentivizing states to find innovative ways to reduce medical errors. but let me tell you, limiting the recovery for pain and suffering for someone who is entitled is not eliminating junk lawsuits. i will tell you, as far as the president is concerned, in his neighborhood is a great hospital that i will not name. a woman went in for a simple removal of a mole from her face, and under general

anesthesia the oxygen caught fire and she will never be the same. you are saying that this innocent woman is only entitled to hundred and $50,000 in payment and suffering. our jury system makes that decision. if you ask the basic question, has the number of paid malpractice claims in america -- or been cut in half? most people in america would 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 decide that they will spend a couple of million dollars on the absolute best health care. they are folks that are left out.

this notion, somehow, that for them the system was working in it they just a little better and were better health care consumers, they could manage, is just not the case. the vast majority of these 27 million people, 30 million people that we are talking about, they worked every day. some of them work two jobs. if they are working for a small business, they cannot get health care. if they are self-employed, they cannot get health care. you know what? it is a scary proposition for them. we can debate whether or not we can afford to help them, but we should not pretend that they somehow do not need help. i get too many of let -- i get too many letters saying that

they need health -- need help. ñr>> having a high deductible plan is a option for members of congress. >> that is right, they get paid $160,000 per year. >> 16,000 employers take advantage of that. >> john, members of congress are in the top income brackets of the country. health savings accounts can be useful tool, but everyone -- all the studies show that the people who use them have disposable ñrincome and the people we are talking about do not. 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

foundation and we can do much better. one republican proposal out there that would reduce the number of uninsured by 3 million people, you heard it today in many ways. in closing, remember the child with etch-a-sketch and over a period of time the more crazy look to the more you drew on that? i will tell you what, one year's worth of work and this is what we have come up with? the american public i have heard from are vehemently opposed to this. start over, let's do incremental things with a common, high- yield. >> i want to make sure that everyone gets an opportunity to speak, but i want to caution everyone that it is now 4:15 and

a number of folks have not had the chance to speak. my question was, were their ideas beyond expansion beyond what was in the bill? i did not get an answer. it may be that the answer is that that is all we can do. one issue that i think is important, most of the people, we would like to be in the exchange. time to sees a an evolution where people could purchase it through an exchange the same way that members of congress do. the problem we have got right now is that very poor people

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 we are actually going to ron first, then we will go to

another republican. we will end with john dingle, who was there when the idea of everyone having health care was first introduced by his father, many decades ago. >> why not call upon the republicans who have not spoken? >> i want to make sure that they are able to respond to whatever is said. >> thank you, mr. president. i think that this has been a very constructive session. for the last six hours we have essentially heard republicans talk about incremental coverage and the democrats talk about comprehensive or broader coverage. i want to outline something that i'd think to bring both sides together for just a couple of minutes. first, on the incremental plan, evidence shows that incremental

reform not only does less, it costs more. the experts that both democrats and republicans rely on have found this. blueing group -- llewin group says that, both sides have used them. throughout history we have been doing incremental reforms since 1994. since the blow up of the clinton plan, that is exactly what we have been doing and costs have been gobbling up everything in sight. . been doing. 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. company. every one of us. to hold the insurance companies accountable and to fire them. one of the promising points you . 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. i would think this is where we okçótake care of legislative business if we agree on stuff, and why do you want us to scrap what we have, unless it ends up that you have made up your mind that we're not going to have a

health bill? and then i would say that most all of america would find it difficult to understand why the bill is a big or why we should use reconciliation -- i think one of the big problems americans would have is, why does it take 60 to get a majority? and i have to explain to them. what i would hope would happen is that we leave here, not thinking that we're going to start all over -- we cannot get back that time. this is the last year for a whole lot of people in the house of representatives -- we represent the people, too. what can we not take what we've agreed to? sick people are democrats sick people are republicans -- they are americans. they know what can happen to our country if we are not educated and strong and healthy.

we need to bring together those issues that cannot be contradicted in terms of what you want. i know you want more than just 3 million people insured. i know you would want to achieve having most all americans or all americans with the celsame health benefits. 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 of people, then we can work out -- and god knows we have tried desperately hard to realize that people are concernedçó with what we're going to do. stthey are concerned with what they can

produce. if you're sick you're sick and they not going check out whether or not you are 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. 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 >> this has been hard work. i want to thank everybody for being here and conducting themselves in an extraordinarily civil tone. given the number of folks around this table, the fact that we are only an hour late is -- it beat my prediction. [laughter] here is what i would like to do. i am one to take about 10 minutes. i want to go through where i

think we agree and summarize where we disagree and i will address some of the process issues that have been brought up. we agree that we need some insurance market reforms. we do not agree on all of them, but we agree on some of them. i think that, if you look at the ones we do not agree on, since there have been a lot of references to what the american people want, it turns out that the ones are not included in the republican plans right now that are included in the democrat plans -- they are actually very popular. there has been discussion about whether government should intrude in the insurance market, but it turns out that, on things like tapping out of pocket expenses or making sure that

people are able to purchase insurance, even with pre- existing divisions -- overwhelmingly, people say that the insurance market should be regulated. and so one thing that i would ask from my republican friends is to look at the listñi of4zoñt included in your plans right now are ones, in fact, that you do not think the american people should get. ones, in fact, that you don't think the american people should get. because i strongly believe in insurance reforms. i've talked to too many families who have health insurance and find out what they have does not provide them with the coverage they needed, and they end up being bankrupt or they end up going without care, or they get

care too late as was the 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 somehelp. 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 h ñiin terms of reducing medical errors,çó incentivizing doctorso coordinate better, transparency , improving prevention -- of those are all things that, not only do i embrace, but we have included every single one of those ideas in these bills. the irony is that that is part of where we got attacked for a government takeover.

what happened was when we set up the idea of a medpac, 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 that is wasted in medicare and medicaid -- a republican idea -- that was part ofzát ammunition you all used to say that the government is going to take away your health care. if we're serious about the delivery system reform and squeezing out the waste that tom coburn refers to, you should embrace those mechanisms that are in this bill. i will end by saying this -- ñii suspect that,ñi if tho democras

and theñr administration were willing to startçóñiçó over andn adopt don bamirçó -- johnñr boehner'sñrñi bill,ñ;we would ga whole bunch of republican votes. çóñi 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 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 ]>yy= [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

çóñrçó >> following a daylong me,

democratic and republican members of course spoke with reporters. we begin with the democratic leaders from the house and the senate. then he was so patient and responsive. -- >> he was so patient and responsive. it was an issue-oriented meeting. there was so much agreement, but yet, every republican used the same talking points. every member of congress use the same talking points. we want to do a bill for the

american people. we are going to continue to work very hard. we have to do something very soon. we are willing to work with them. 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. madam speaker? >> thank you, mr. leader. i agree with our distinguished leader. our president is a great leader, in that he has vision for our country about how we move forward health insurance reform. he is striving to build consensus. he is listening for any common extendn invitation for that. i am hopeful that something may come of it. i am not overly optimistic that we would get republican votes for the bill, but that does not mean we couldn't incorporate some of their ideas into that legislation, should they put some on the table. the president, one year ago, had

this all here at the white house on march 5 -- he had a bipartisan health summit and began the debate, which over the past year has been in the committees of jurisdiction and in the congress. he has saw bipartisan support. that continues until today. i hope that something will come of this. i use the analogy of the kitchen table. if we sat around the table, we have to represent the aspirations of americans as they sit around their kitchen tables, concerned about their jobs, the education of their children, as well as their health care costs and how they're going to pay their medical bills. to those people who are struck with illness or pre-existing conditions and the rest, they want us to act and what results. we cannot say to them -- we had an idea and a vision and a majority, but the process did

not allow us to make a change for your life. we need to have the courage to get this job done and we will. i think today took us a step closer to passing -- to improve health care, lower costs, and make it much more accessible to many more americans. mr. durbin? >> i want to make two points. i want to drink the president for bringing us together -- thank the president for bringing us together. we agree on many basic things. we feel that any bill will need to have the kind of regulation of insurance companies so that people understand that when they buy a policy, it will be there when you need it. the issue of pre-existing conditions -- if we allow

companies to turn down americans because of these, we will not give them the peace of mind and security they need. secondly, i looked around at room and realized that virtually every member of congress in that room is part of a health insurance exchange run by the federal government, would impose minimum standards on the health insurance companies. our republican friends find this so objectionable for the rest of america, but live with it every day. we should offer the american people the same kind of health insurance coverage we enjoy as members of congress. >> thank you. steny hoyer, the majority leader of the house. >> i have been in the house for almost 30 years. i have lived in the washington area for along time. i cannot remember a similar event. i cannot remember a president of united states spending an entire day sitting with some 30 members of congress to discuss an issue.

he displayed extraordinary depth of knowledge of that issue and extraordinary passion to accomplish the objectives of that legislation. my view is that this meeting was worthy of the objectives we seek. it was worthy of the objective of including all americans with access to affordable health care. you have heard that mantra, but that is reality. what we saw in the meeting was a difference -- a philosophical difference, a difference of this scope. one party, the republican party as a bill which essentially includes 10% of those who are uninsured. we believe that all americans need to be included. it is a substantive difference. there were areas of agreement. we have pointed those out.

many areas of agreement that the republicans sought already been included in our bills. we hope that, based on this discussion, we can move forward. we will move forward to accomplish the objectives that all of us, including the president of united states and including john mccain, said were the objectives of including every american. .

>> there has to be some regulation of the insurance industry. that seemed to be the big separation between the democrats and republicans. whether that can be bridged remains to be seen. >> republicans are saying the only way to move forward is to start over. >> 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 then said, that is interesting. everything you talked about is in our bill. logic has anything to do with reaching agreement --

>> we appreciated the opportunity to meet with the president today and discuss health care. as he conceded, and number of the majority conceded, there are plenty of good republican ideas. the core problem is this. we don't think a 2700 page bill that cuts have a trillion dollars out of medicare, raises taxes, 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 areas of possible

agreement that we discussed in the meeting today. frankly, i was encouraged -- discouraged by the outcome. i think it is clear that the majority, including the president, want to continue with basically the senate bill, which has been made even more expensive based on the present recommendations that were put on the internet a couple of days ago. i do not believe there will be any republican support for this 2700-page bill that the american people are opposed to. >> i think the american people want us to work together on common sense steps to make it work better. americans are concerned about health care. there are areas that we can work together on to make -- to take steps to make our current system work together and bring down the cost of that system.

but we cannot do it within the framework of a 27-hundred page bill. we need to start over on those things we can work together on. >> i wrote a note to myself. i just did not think the president was listening, even though he invited us to hear our ideas. he consumed more time than all the republicans combined or all the democrats combine, and much of it was responding to our ideas. he wanted to argue with us. there are fundamental differences of opinion. it is not going to be possible with that kind of approach to come together within the timeframe that he indicated, if you insist on starting with this 2700-page bill. the whole concept of the bill

with its government mandates and all the features of a are what make it unacceptable to us and to the american people. that is where we have to start. >> what is the next step? >> you heard what we recommend, that we scrap this bill and start over. we also know that the average of all the public opinion polls indicate americans are opposed to this bill of duty by-37. gallup just this morning polled americans on how they would feel about using this little use reconciliation device, and by 52-39%, americans are opposed to doing that. i think the message is very clear. the american people have followed this issue like no other in the time i have been in 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 would not call it a waste of time. it was a good discussion. you have in the room virtually all of our really knowledgeable people on the subject. , so i would not call it a waste of time. >> it sounds like you would call it a waste of time. you said the same thing you said very early on in the health care summit. what was gained by all those hours? >> the president kept saying the same thing, too. i think it is clear on this issue. we have very strongly held opinions on both sides. we think the best way for this to be resolved is to pay attention to the people who sent us here, who are speaking overwhelmingly, saying do not pass this bill.

>> in terms of the meeting, it was worthwhile. there are a number of areas we are in agreement. let's take those issues of agreement, are things we can work together on, but we cannot do it in the context of eight trillion dollars bill that has tax increases in medicare cuts in it. >> at friday's one house news briefing, press secretary robert gibbs said the president will release more details on the way forward on health care later this week. >> if you would like to see this in our meeting on health care again, go to c-span's health care ohub and read what members

of congress are saying. join the conversation yourself on twitter. you can find cost estimates for the bills and hundreds of hours of video and the house and senate for debate, committee hearings, workups, and other events. since then's healthcare hub, c- span.org/healthcare. >> i come from latin america. i would never expect to find this kind of poverty in the capital. >> a different side of the nation's capital, in the shadow of power, tonight on "q&a". >> now, dennis blair, the director of national intelligence, talks about intelligence gathering. this took place at kansas state university. the event had to be moved to another building because of an

incident that is referred to here. we pick it up after introductory remarks from general richard miers. [applause] >> thank you for that kind introduction. it is a great pleasure to have such a distinguished graduate as a former colleague and such a good friend. i have done little intelligence on this occasion, and i was told that bomb threats were primarily exam week phenomenon, so i thought i was that, but apparently that was not very accurate either. thanks very much to all of you for your flexibility in changing being used and for sticking with it. i will be signing class excuses to miss the rest of the afternoon right after these remarks. as someone who has spoken year

before, general miers knows the pressure i am feeling right now, having to follow in the distinguished footsteps of senator bob dole, secretary of defense bob gates. these were native kansans who had an inherent advantage. presidential, dr. regan, thank you for the opportunity to get the word out about the good things the u.s. intelligence community is doing now. i think most of you know that, and we heard in the introduction, that dick is a fighter pilot, which means that even when he is on the ground, he likes to drive fast in his corvette around northern virginia. you have probably seen him at the annual harley days football game, riding his bike around the building. he is well known in the

washington, d.c area for writing that bike during the rolling thunder run, when hundreds of thousands of bikers converge on the nation's capital on memorial day and ride together to show support for the efforts to find veterans who are still missing from our past conflicts. when the general was chairman of the joint chiefs of staff, he always wrote his harley in and rode around with those who are supporting the veterans. i am not a biker myself, but i can appreciate the intelligence that general myers gathered on the road. i recently found a document that i swiftly declassified so i could share it with you. that is one of the things i do. [laughter] it was called "richards rules of the road." it contained a number of nuggets of wisdom distilled over the ages, such as, when you are writing in the lead, do not spit. well-trained reflexes are quicker than luck.

there are those who have crashed and those who will crash. if you really want to know what is happening, look at least five cars ahead, and never be ashamed to unlearn an old habit. dick, thank you for all the wisdom and for the friendship over many years. it is wonderful to see other leaders here from many fields. i would like to recognize a few other friends who are with us. randy o'boyle who headed the air force rotc program here for several years, and dale, a colleague of many years who invited the former first visit here in 2002. he is a very distinguished scholar of the soviet union and of russia, and we once took a trip together over to russia.

and the soldiers of the big red one. the headquarters is over in iraq right now. my background is navy, but i have learned to speak a little army. your honor us all with your presence, and we thank all of you for coming. [applause] i understand that this sort of greeting is typical of away our troops are supported in this area day in and day out. junction city and manhattan have become famous for their hospitality and care for the big red one. it is a remarkable relationship. i understand there are

partnerships between the sports teams and first division units, with personal visits back and forth to see what it is like to be in the other person's shoes, or boots. videos from the latest games are sent to those on deployment. the women's basketball team with the first brigade, and the men's basketball team with the field artillery, first lightning. this is the only place i have heard that has such an amazing and wonderful program. we all appreciate it who have served time in uniform. ladies and gentlemen, it is a special privilege, as you can see, for me to be here in kansas state university. i have been tremendously impressed by this institution, not just a beautiful campus, but i am impressed by the breadth of

what you do, the broad range of issues you engage in the life of the university. offering an outstanding education to students from around the country and around the world, you are working on the big issues that face our country both here at home and internationally. this afternoon i would like to talk about the intelligence community, who we are, what is we do, and some of the issues we are dealing with right now. before leaving this room, i would like to make a shameless pitch to some of you to come join us in the important work of intelligence. first, a quick description of the intelligence community that i lead as the director of national intelligence. as the general mentioned, we are 16 different agencies, mostly parts of other parts of our government. the central intelligence agency is independent. the cia is responsible for human intelligence, recruiting spies,

and also for taking the information collected by all the agencies to produce analyses for policy makers and four officials in the field. four of the biggest agencies are in the department of defense, the national security agency responsible for gathering communications, voice, video, and data from around the world. the national ngo spatial agency produces analyses, and videos and turns them into reports and maps. the defense intelligence agency primarily serves military officials and units in the field. the national reconnaissance office launches and operates the satellites that collect intelligence information from orbit. the fbi is responsible for gathering intelligence on threats within the united

states, and the homeland security department is also responsible for tracking threats in this country and working closely with state, local, and tribal law enforcement organizations. that leaves eight other members of the community that include the intelligence organizations from each of the five armed forces and from the state department, a financial intelligence organization within the department of the treasury, a nuclear intelligence agency in the department of energy, and the intelligence arm of the drug enforcement agency. just a simple description of the different parts of the intelligence community illustrates the complexity involved in bringing them together. the key is to integrate the 16 organizations so that viet mazing different abilities and skills they bring are focused on the right mission and they can work together. that is really my job as

director of national intelligence. the first step is to set the overall goals of the enterprise. we have done that international intelligence strategy. there are four. the first is to enable national security policies. we do that by monitoring and assessing the international security environment so we can warned policy-makers of the threats and alert them to the opportunities. we provide daily intelligence briefings to the president himself. our job is not to decide policies, but to make sure that those who do can make want -- wise policies. our second goal is to support national security action, and

that means delivering actionable intelligence to diplomats, organizations and the bill, and to domestic law enforcement organizations. this includes thousands of intelligence officers, provincial reconstruction teams throughout iraq, and the military units that are driving the taliban out of helmand province. we need to make tough choices to invest in the right new satellites, computers, information networks, aircraft, and software programs to make our intelligence officers even more capable in the next generation. our four strategic goal is to function as an integrated team. these four goals for the intelligence community seem fairly straightforward. back during the cold war when

our fundamental intelligence organization was put together, they probably would have been relevant. what has changed? there have been three major seismic shifts since that time that have made a fundamental difference to the intelligence community. these have affected all of our national security organizations, but especially important for intelligence. let me take you back to the first words ever uttered in a landon lecture by governor clinton himself. he said we must face the challenges of new realities of international life today. 23 years after he spoke those words, there was a big new reality. the berlin wall came down. before then, our intelligence mission was to steal secrets about the soviet union. we recruited spies and recruited analyst to understand its military capabilities and its actions around the world. retrained linguists and drug

tunnels -- dug tunnels. we built a huge ship to pick up a single submarine on the floor of the pacific ocean. when the cold war ended, it affected our inter approach to intelligence. in the 1980's, our primary focus on latin america was on what the soviets were doing in cuba and nicaragua and granada. now after the cold war, we have to understand the trends in the region more deeply on their own terms as well as in terms of threats and the opportunities they offer for the united states. let's let it just one country, colombia. it matters because it is the primary source of cocaine coming into the united states. the intelligence community is expected to provide analyses of the drug organizations there. this intelligence is essential to solid american policies for

colombia. the united states has assisted and is still insisting colombia to defeat the farq organization. the threat from a global competitor could destroy this country. it made the job intelligence agencies more complex and more difficult. we had been set up to focus on a single adversary over a long period of time. of a sudden we had to keep watch on the entire world in a more detailed and dynamic way, and covering threats to our national interest and be alert for opportunities to advance those interests. since the end of the cold war, depending on how you count, the u.s. has been involved in about 15 major deployments of military force. many of them have been to places we would not have predicted in the 1980's. bosnia, iraq, panama. for many areas in which there

are crises, the intelligence community has been called on to understand a society, the issues, the country, the region. decisions were made as to whether we should use military or diplomatic tools. once a decision is made that the united states will act, the intelligence community was called on for a fine detailed intelligence. to stabilize troubled societies and establish long-term arrangements to put the country's back on their feet. the second hinge point, about the same time the cold war was ending, has been the information revolution. in the 1980's, the first intermission networks began to be deployed in a serious way. it is not surprising that an

information revolution would shake business intelligence to its core. intelligence is about collecting sharing and using information. networks changed our access to information and to one another. they totally changed how we do business. building and using data sources, sharing audio and video files so we can work lover to lee and more quickly. and so that we can -- so we can work collaborative lely and more quickly. the term "connect the dots" is often misused, but it has a large grain of truth. there are so many data sources, some that intelligence agencies maintained like files and satellite imagery, that goes back decades. some are available in the public domain, like research papers. the challenge is to find the right information, to understand

its validity, and to put it in context, and to get it done in time for a policy maker in washington or an officer in the field to be able to use it. we use many of the tools familiar to you at k state. çówe use web sites that look vey much like what you probably used to keep up with your fields of interest. rss feeds coming in with new information on the subject. links to previous information that has been done on a subject. unlike the open academic work, -- the open academic world, we have some constraints on working together. the more we linked our intelligence data sources together, the more they become vulnerable. one enemies by can do more damage than one could years ago

-- 1 enemy spy can do more damage than one could years ago. while we take advantage of all the tools of the information revolution, we have to build a security features on are connections, and these are expensive, and a slow us down some. the information revolution is giving us better tools to do our job. it is important because it is fundamentally collecting -- affecting our collection of information as well as sharing and analysis. the information we want, in order to find out what others are thinking, is stored in shared in their networks, so that is where i go to get it. foreign governments communicate on networks. terrorist organizations like al qaeda use the internet to put out their messages. drug traffickers have to communicate to sen shipments and receive payments. organizations which are

interested in store their information electronically, not in paper and file cabinets. one of the major growth areas in gathering intelligence is penetrating foreign networks and bringing that information back to analysts to write reports to inform our policymakers. in this area, i cannot give you many specific examples, since they are classified. it is not difficult to imagine the value of being able to read the e-mail some foreigner who is involved in a plot against the united states. the third hinge point was 9/11 and the effect has been profound. as the 9/11 commission stated, exposed internal barriers to sharing that prevented the intelligence committee from understanding the threat that was forming against us in the months leading up to that attack. our enemies were seamless, we were compartment. there were pieces of intelligence that were held but agencies that were not shared or

analyzed to warn about a tax so that we could stop them. the difficulties of sharing between agencies that were focused on foreign intelligence and those that were focused on law-enforcement and domestic security on the other hand were laid bare by that incident. in addition, we discovered as a nation that our armed forces did not defend us against every threat, that our nuclear weapons did not deter every enemy from attacking us. it was those 9/11 attacks and the investigations afterwards that led to legislation in 2004 that reorganized intelligence community in fundamental ways. the position of director national intelligence was established at that time in order to bring together a more integrated than an agile intelligence community and to address these new threats that were emerging. for the first time, domestic law enforcement and security organizations, the fbi, the new

department of homeland security, were included in the intelligence community so that we understood threats. new organizations were established to focus different agencies on missions that all needed to work together. so here we are, 20 years since the end of the cold war, well into the information revolution, eight years since 9/11, five years since the director of national intelligence was established. how is it going? are we really as integrated and agile as we need to be? are we on top of developments in china, iran, and afghanistan, as well as al qaeda, and drug cartels, and global warming? my answer, after a little over

you are on the job, is that we are doing well, but we are not satisfied, and we still have to continue to evolve and improve. let me start with the subject of integration of the community, the sharing of information and teamwork. overall, we are more unified as a community than were five years ago. we do a better job of sharing intelligence and building mission teams to work on problems that we need different skills from different agencies to solve. as general myers knows, we -- with your something similar in 1986. legislation told the armed forces were together as a team. it took decades after that legislation to overcome all the negative aspects of rivalry among the army, navy, air force, and marine corps. i remember very clearly when and move happen. i had been in a navy uniform for 18 years. like my contemporaries, i was not enthusiastic about joint operations with other services.

i figured if we just brought them up to navy standards, we would be fine. i have to tell you, i was wrong. the armed forces are much more effective now because they are working together than they were never fighting separately, mostly over who was in charge, rather than against the common enemy. i see the same progress in the intelligence community. like the armed forces, we have made it a requirement that an intelligence officer sir fourth time outside of his or her parent agency in order to reach -- served for a time outside his parent agency to reach higher ranks. while there are still instances in which intelligence is not shared with other agencies, they are fewer than before and more the exception than the rule. never be ashamed to unlearn an old habit.

the primary lesson for the intelligence community from 9/11 was that we need to share information. our preliminary investigation of the unsuccessful bombing over detroit on christmas day of a northwest airlines flight did not find that information was being held. in fact, it was being shared. the national counter-terrorism center has access to over 50 different intelligence data sources. the problem was that we were unable to put these different pieces of information together in time to be able to issue a warning to stop the threat. we are working on that problem. so that is immigration. what about the agility of the defense of the intelligence community? perhaps we cannot quite look five cars ahead, the weight richard's rules of the road would have us do, but we are able to look ahead one or two,

we are adjusting to what we see. last year when the swine flu was a threat we did not understand well, the intelligence community mobilized the best information we had on it. we provided solid assessments on the potential extent of the epidemic under various conditions. although we did not keep the mark through abdul mutallab of the flight, last year we stopped an alleged attack in new york city. we arrested a man who was planning attacks on our friends and allies, and arrested several others who were planning to blow up public buildings right here in the united states. last september, months of painstaking work by the intelligence community led to the announcement by our presidents flanked by the president of france and the prime minister of the uk that the iranians had been

constructing a secret facility to enrich uranium and concealing it from the international atomic energy agency. these are few examples of the excellent work being done by the intelligence community in new areas. i can assure you that none of us believes we can rest on our laurels. there is much work to be done. let me turn to the future and tell you about the priorities for the intelligence community. some of our missions remain traditional, exactly what you would expect, as we analyze related intelligence, assessing the capabilities of other nations states. even though the cold war is over, we still need to know a lot about russia with its nuclear weapons, its vast energy reserves. we need to understand if it will work with us on a common challenges. we are also working to learn more about china, with its

impressive economic success, growing armed forces, and thriving economic profile. beijing is also our partner for dealing with such challenges as north korea and iran. i understand there are quite a few chinese students here accept kansas state, and that is excellent. it will be interesting when the chinese students take the wildcat traditions back to china. can you imagine 1.3 billion people dancing around to the wabash cannonball? there many areas including intelligence in which we cooperate, but we still need to know what they think and say about us in secret. we are learning more every day about iran, north korea, and these countries both britain regions where we have vital interests. we are learning all we can about non state groups that are

powerful, international, and threat americans and our way of life. i am talking about al qaeda and its affiliates and the groups inspired by it. i am also talking about drug trafficking organizations, nuclear proliferators, and those who try to sell the knowledge and hardware necessary to make weapons of mass destruction. we are exploring the trends that affect american interests, globalization, the free flow of people in technology around the world, economic threats to international exports like beef, pork, corn, and wheat from right here in the center of the united states. we are staying abreast of international trade. we have people who are setting the implications of -- studying the implications of climate strangchange.

imagery is showing where problems are located in haiti and where help is needed in that country. we track international oil and gas developments that affect u.s. supplies and have a profound geopolitical effects. we are working hard to stay current with technology trends in areas like information technology, biotechnology. these are to edged swords, and we need to make sure we need to eat you use the eds that helps us benefit the country and minimize the other side that could hurt us. in cyber technology and biotechnology, defenders have a tougher job than attackers. we have to spend more and work harder to enjoy the benefits of the internet and biotechnology without being vulnerable to those who would use them against us. this is an area where press could affect the typical student or resident of manhattan.

nobody here wants to be the victim of id theft or have to worry about biological warfare, strikes against critical infrastructure, or food crises. it was bad enough in washington with the recent snowstorms. people panicked when they would run out of ships and beer for the super bowl. here we have the national defense facility that is on its way to manhattan. despite the risks that have to be managed, you as a community have embraced it. you understand that it is needed, and that with the history and experience here, including exceptional research institute right here that already assists the intelligence community, this is clearly the right community to host it. i believe your during the country a great service by taking that on. as a reward, we will send the

money, but keep the bureaucrats in washington. [laughter] the real challenge of all these subjects is to understand the different types of interactions and trends, how all these players out -- how all these played out. they interact in interesting ways that make a big difference. in mexico, drug trafficking organizations are a threat. they can be even more of a threat if they are linked to extremist or computer criminals, but they are also an opportunity for cooperation between the united states and mexico. international cyber crime is a threat, but it also represents an opportunity for cooperation with the private sector in this country and with many governments in europe and the far east that share our goals of

having an internet used for legal purposes. at the technological level, we can also take the view that what has happened since 9/11 has been both a challenge and opportunity. on the challenge side, a cut uses global us communications very effectively, not just for propaganda but for recruitment, logistics', and internal communications -- al qaeda uses global u.s. communications very effectively. related to that, the megatrend of global media plays an important role. now more than ever, one person causing a relatively small number of casualties can have a huge impact on our country and the world. one man with explosives in his shoes changed airport's security all around the world. now we have to take our shoes off. technology helps us, too. we can connect the dots like never before.

once we get a lead, we can scour many data repositories for more clues. as we learned over the court on christmas day, we still need to do that better -- as we learned over detroit on christmas day. we are working on that. let me turn to some concerns that i have for the future, as we pursue these difficult and complex issues. one major concern is that the measure of success encountering violent extremists has become nothing less than perfection. we are expected to find and stop every plot before it proceeds. let's look at the reality of this. perfection is impossible target, given that the united states is the prime engine of globalization. in 2008, we had 50 million legal, foreign visitors who came

here for many reasons, including to attend some of the world's best universities. many foreign students came here to kansas state. that is good for both the u.s. and for their home countries. how much should we be expected to know about every person who seeks to enter our borders? what is the threshold? what is fair for us to investigate? when it comes to americans, a free society where we enjoy civil liberties and our citizens expect privacy -- that kind of society does run some risks. we can eliminate risk with a government that has the right to gather a limited information on all its citizens and turn that information over to intelligence services, but we do not want to live like that. where do we want to draw the line between security and personal freedoms? here are some realities of terrorism. last year, we had just over

14,000 homicides in this country. the know how many people were killed on u.s. soil that were tied to extremist groups? 14, and that number falls to zero if you look at those perpetrated directly by foreign extremists. success or failure should not only be measured in lives lost. also should be measured in lives saved, but that is harder to do than anything. even one death caused by violent extremist strikes at the core of a free people. it is a violation of the highest order. it cannot be treated solely as a number. when someone breaks into your house, it is not what he stole that matters the most, it is your sense of security. the standard for success in countering violent extremism has to be high, because the stakes are incredibly high. no one is harder on us than ourselves about the times that

we fall short. but i cannot promise you that the intelligence community will be able to discover and to stop every attack by a violent extremist group like al qaeda. as a country, we cannot allow a successful attack to damage our resolve or to diminish our way of life. that happens, then the violent extremists win. remember the rules of the road. there's are those who have crashed, and those who will crash. what we do when we survive is to learn from it so it does not happen again, and then we get back on the bike. a related concern i have is to increase the openness of our work in the intelligence community without giving away secrets. that is part of the reason i in your giving this talk at kansas state. i want to take some of the mystery and some of the menace out of the intelligence community.

the american people should all feel as proud as i do about the work we accomplished, and they should be reassured that we do it all respecting all the liberties and civil protections and privacies that americans have under the constitution, and óthat we act in accordance with american values and everything that we do. i truly believe that the more open we are in the intelligence community, the easier it is, ultimately, for us to do our jobs. then it becomes more apparent that we are providing safety, not trying to deceive fellow americans. we are maintaining the moral high ground, and doing our jobs under the law without invading the privacy or infringing the civil liberties of americans. we are primarily focused on foreign threats, but of course we have to worry when they have connections with those who threaten this country from within. of all the secrets that exist, there are countless ones that we do not intrude on, like how the tv series "lost"is going to end.

we don't really need to find out who will lead the wildcats really is. -- who willy the wildcat really is, unless he is a terrorist, which we believe he is. [laughter] our world is a world of secrets, but it need not be a world of mysteries. our people joined patriotic motives. their jobs or about protecting the lives, freedom, and security of americans. i want them to be proud of what they do, and i want you to be proud of them too. we believe that if the public understands a little more about what we do and why we do it, we will be a stronger, safer nation for it. yes, we interrogate those whom we detain, because we suspect they have conducted attacks on

the united states or are planning attacks. no, we do not torture them, but we are investigating new ways to interrogate them consistent with our national values. maybe we should have coach frank martin go into a room and stare at them for a while. [laughter] i understand that is pretty effective. or if we are really going for timor, put them on the 50 yard line, have the marching band played "wabash cannonball" and have you interrogate them. the intelligence committee is conducting one more magnificent experiment in american democracy. can we operate a large, powerful, effective intelligence enterprise while adhering to the u.s. constitution and american principles of openness, separation of powers, respect for privacy? we think we can. we think we are doing it every day. that brings me to my final

point, because i want to take advantage of this lecture to do some shameless recruiting. all your outstanding young wildcats out there, i really hope that as you decide where to begin your post college life, as many of you as possible considered the intelligence field as an occupation. lacher, the partnership for public service and american university's institute for the study of public policy implementation came up with policies. more than half the people came to us after 9/11. they enjoy being part of an honorable profession. they are a younger crowd than you might think. there are these rival team edward and team jaggecob clothes that i do not understand.

sometimes we receive five dozen applications a month. only 10% make it through the clearing process, which comes with background investigations, medical exams, and a polygraph. plus, you need some mad skills. but i want to encourage you. persistence is everything. the stereotype is that we want great men and women who are able -- willing to go out on dusty streets at night in hostile regions to gain information about evildoers. we do need those people, but we also need linguists, criminal- justice experts, researchers, historians, political scientist, cyber security specialists. we need engineers to work on advanced satellites, facial recognition technology, business savvy professionals. we need smart analysts who can

make sense of the flood of data that we collect every day. if you want to try to build high-performance surveillance devices that can be hidden in a pair of glasses, consider the cia. if you want to be with world- class computer scientist, we have them at the national security agency. you are interested in building software to turn pictures from space in 23 models of city blocks, think about coming to the national ngos spatial intelligence agency. if you want to become a serious rocket scientist, there may be a place for you at the national reconnaissance organization. that is only four of our 16 organizations. for those of you taking foreign languages, besides engineering, i have just one thing to say. gracias, merci. you have no idea how important

that language skill is. it is important in truly understanding another culture. if you are a first or second generation american who already speak another language and already understands another culture, we would definitely love to have you. you have something that no amount of training can replicate. if you are still not sure but are curious, you might check out the online application for our summer seminar. there are 40 slots, two weeks in july in washington. the weather is delightful. travel expenses, room and board, $500 in walking around money. triad, you might like it. the deadline is coming up march 7. i will stop right there. thanks for persisting through the interruption, and i would like to take a few questions.

[applause] >> we really appreciate everybody's patience in moving around. we have time for just a couple of questions, and we would ask if you like to come down and ask some questions to the microphone. when we run out of time, i will cut the questions of. we really appreciate everyone coming out today. >> the online group anonymous recently shut down the home page for the government of australia. a group of a few thousand people is a botnet that

encompasses millions of people. how can we hope to come to terms with such an overwhelming network? >> there certainly is no easy answer to that question. right now, as you point out, the way the internet is designed, it is easier for somebody wants to do something bad with it than for something big. last year, one of the big internet security companies came out with this statistic but there were more illegal applications of design for the internet than legal applications. they are having a tremendous effect. turns out that a lot of this can be overcome by just ^ with

what you are doing with the network. basic things that people do not take the time to do, leaving their computers wide open. the rest of it we have to do by public-private partnership to be able to track down a tax like the one you are talking about. -- attacks like the ones you were talking about. there is a lot of our work in all, but it is not impossible, if we get individuals to run the companies both on the private side and across the government, and the international cooperation will help us be able to stop it. >> what is the national intelligence agency's policy on

third-party involvement like the private sector? does the government is a lot of private sector organizations -- use a lot of private sector organizations in acquiring private intelligence, or is it mainly through government entities? >> we have a lot of private sector partners, both those who actually have contracts with the intelligence agency to perform functions. a lot of them are functions that most any company uses, private support for some basic services. certainly when we buy equipment, it is almost always true a private company. we built very little of ourselves -- almost always

through a private company. we have lots of private partners. we are careful, because some functions that are inherently governmental have to be done by people who work for the government. for instance, interrogators are now all government officials. we are careful to do things the government ought to do with government officials, but whenever it makes sense in terms of skills and in terms of saving money, we do use private partners. it is a combination, the way it is in most of government. >> given that on december 5 the start treaty expired between the u.s. and russia and we have been

in negotiations for its renewal, given that the negotiations are intended to be a sign of good faith, why is it that the u.s. has been placing missiles in poland and that russia has been purchasing battleships from france? >> my older brother from the state department will be happy to answer the policy question. my job is to provide the intelligence in order to make that a good answer, or a good policy. the whole technology of missile office and defense has changed since the old days of salt treaties and mutually assured destruction and so on. there are more countries in the world with more different types of nuclear weapons. american policy has shifted with

that line. the time it is taking to complete these negotiations that we are involved with the soviet union is really a function of the complexity of the problem that is there. i can tell you that the subjects you raised, the relationship between off with the defense, monitoring and verification, all of these are being negotiated hard in order to make a treaty that secures the security of the united states, and of course the russians want a security treaty that will support the interests of russia. it is hard work, and it is going on now. >> please join me in thanking director blair once again. [applause] >> i come from latin america. i was never expecting to find this kind