that is where we're going to talk about tonight's show. tomorrow night's special show at 10:00 p.m. eastern. good night from washington, d.c. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- >> welcome to washington. president obama has been on the job 232 days, and this will be his second address to a joint session of congress. this time there is a single topic, health care reform. the president says his speech will include specifics on his plan, including cost, application, and what he hopes to see from congress and the coming weeks. one of the most contentious issues, a government run health insurance option, the so-called public option.

how will he walk the line? lawmakers on the left of his party say they cannot pass a bill without it, while conservative democrats say they cannot sign onto a bill with it. the stage is set. let's listen in to the house floor. [applause] this is the introduction to the diplomatic corps. president obama is running a little bit late. we expect to see him in just a moment. the sergeant at arms of the house of representatives will do his famous introduction of the president, as he has done since 1995. this is always an interesting spectacle, as you look all the lawmakers who have gathered along the entryway, waiting for

president obama. >> there is a certain set of legislators who always like to get on the aisle. up above the chamber, there are always certain members to crowd the aisles of the can be photographed on national television greeting the president as he comes in. sheila jackson lee the congresswoman from texas. elliott ingle. we will see that tonight as the president comes. in there will be wild cheering. the white house and the president are obviously hoping that this setting, this very ceremonious setting and the moment that it create will add impetus to the speech which as you pointed out earlier, steve pointed out earlier this is his 29th on the subject. not to mention the hundreds of instances he has discussed the issue in other public settings. bret: a.b., this is a challenge. he still has to deliver on specifics. >> that's right.

this is his last speech. he can't do this again. you can't pull this card again. there will be no more televised speeches or prime time press conferences on health care reform. this is really his last moment on this. bret: ok. this is the cabinet introduction. again, the whole thing is running behind schedule and you will see an introduction prior to the introduction of president obama. steve, when you look at all he has to get done in this speech, the concern is really within democrats. there is all this talk about republicans and how they don't have plans. the republican study committee put out a list tonight right before the speech of 35 bills that are out there so far in the 111th congress. it's about democrats, convincing democrats. >> i think that's exactly right. look, the president is going to say tonight that he wants participation from republicans. he is looking for constructive

advice as to how to reform the healthcare system. i think the problem is he has had it. he has had this from republicans. republican leadership sent him a letter may 14th requesting a meeting for him to talk about their specific proposals. they didn't get a meeting. they haven't gotten a meeting. so i think, you know, it's disingenuous for the president to suggest he hasn't had input from republicans and there aren't republican proposals out there. bret: as we are looking here at the picture of the cabinet coming. in eric holder and other cabinet members walking. in there you see secretary of state hillary clinton doing her hugs along the entryway. we should point out if you are tuning in to see bill o'reilly, he will follow in a very special o'reilly factor immediately following this speech. brit, the g.o.p. response tonight is by a louisiana congressman, congressman boustany. he is a physician. he is not well-known. he has a challenge after a 45- plus minute speech. bret: i think his challenge,

challenge anybody who is doing the opposition response always has. that is that you have this enormously impressive setting here for the president. it always carries a certain magic and a certain majesty. and then you have got someone in a -- basically quiet room speaking directly into the camera. it just isn't the same. and congressman boustany can do a fine job and perhaps he will. i have no reason to think otherwise. but, basically, the big event tonight, make no mistake about it, is this president's speech and the question that hangs over all, whether at this moment he can turn things around with another speech. i must say, i have never seen anything quite like this. this president, i mean, as i was saying yesterday, they don't call it the bully pulpit for nothing. this president has had quite a lot to say and has been quite well covered for saying it for quite a long time on this subject.

and, you know, he may add some detail as to certain things that he favors or doesn't favor as he may have some modest initiatives. he is thought to be prepared to say something which will be a nod at least in the direction of lawsuit reform on this. but whether he would have a new fact to place on the table, a new idea to place on the table that would change the whole atmosphere obviously is what remains to be seen. you know, we haven't been given any indication from the white house today and excerpts that that's going to happen. bret: let's turn to the white house. major garrett, we talked about tort reform, medical malpractice reform for lawsuits. major, what do we know about what the president is going to put on the table? >> well, it will be pretty modest in that it will not be a part of this overall legislative package. it will be something that the white house will try to do through administrative rule changes. taking it out of all negotiations about the future of this health care reform bill. that will probably entice

republicans to at least will say the president is taking our discussion of medical malpractice seriously. it may not encourage them enough to get in the legislative game because after all, it would be handled out of the white house through administrative rule change not through a legislative package giving it no legislative mandate. no legal permanence. that might be a sticking point. one thing about this setting. this is an act of rhetoric for the president. it's also a political exercise within his own party. the symbolism tonight is, i, president obama, you congressional democrats are linked together on this and don't think otherwise. if we fail on this, the implicit message will be we will risk our own political future not just in 2010 in the mid terms but my own prospects for reelection. is it that dire? no, but the white house does not discourage thoughts this is a very high stakes event for not only the president but the members of congress. the president want to give this speech right now? no, he didn't. the white house had game planned for a speech of this kind. they wanted to wait until this legislative process was farther

down the river. it's not very far down. we haven't had a single chamber pass out a bill yet. that doesn't even leave time for a conference committee to merge whatever the house and the senate pass. those are difficult negotiations. way, way down in the future. the president would have preferred to wait until then. but because of the damage inflicted in august, damage the white house tries to deny, the president is speaking tonight to try to reenergize, refocus, reframe this debate and give political strength to some democrats who have gotten nervous over a long, hot summer. bret: we just saw sheila jackson leon the aisle as always. a.b., i want to turn to you, we just saw a shot of white house chief of staff rahm emanuel who did spend some time up on capitol hill today, we're told, trying to twist arms. as major mentions is, this about telling democrats that my presidency comes down to this issue? >> i think tonight's speech obviously has many audiences. the middle, the political middle, republicans, his

liberal left in the congress, americans at home across the political spectrum. he also really needs to follow up, obviously with these discussions with democrats in private. after tonight, his next appearances are one on one or in small groups there at the white house. eyeball to eyeball where he tells his liberal left, not his conservative right of his party, fall into line, together we fall or together we rise with passing this bill. and that's the message from rahm emanuel. everyone thought at the beginning he would be bringing the blue dogs, the conservative moderate centrist members to the table, no. it's bringing the liberal left who is threatening all or nothing at this point to the table. and, in terms of timing, it is interesting, i think major is right, i think it's early. everyone thinks we are in this anxious end game now. but it's actually early. in speaking to democrats who are crafting the bill in the house, they are exasperated with the road ahead. it's just not the public option. you are talking about tax increases that haven't been decided on.

tax increases that democratic members of the house don't want to vote on repeatedly like they did in the clinton administration. only to be used in commercials, only to be used in their primary and general election campaigns next year. they don't want to act before the senate does. they don't want to move on tax increases before the senate -- they see what the senate is doing. it's not just the public -- the government health care program, a public option that's the big beast in the room. there is a lot of sticky issues that are left on the table. and it's very hard to see when you are looking at the math how to contain costs, how to pay for it, and then just the political realities. it's very hard to see how you get to something in the next couple of months. bret: not only the math of how much it costs, but also the math of counting votes, steve. i mean, they are adding those votes in both chambers. so far they are not. >> there no. that's exactly right. and the house minority whip,

eric cantor sent out a very interesting document earlier tonight, counting up the votes. counting up people in the democratic caucus who have said that they either oppose the house bill as it stands now or they would vote against the house bill as -- without a public option. bret: let's let in -- listen in to the house floor. this is barry suleman. the service chief. then you will hear the legendary wilson livingood as you see the president standing in the hallway of the background. >> madam speaker. >> the president of the united states. [cheers and applause]

[cheers and applause] bret: wanted to listen in there for the house floor for just a second. you saw the action shot of the first lady looking down there. brit: can you hear what's being said. it doesn't appear that that camera down on the floor will allow us to do that tonight. and sometimes can you hear better at the end when he is leaving and the floor has quieted down a little bit and is he walking up the aisle, you can hear a little bit better what's being said.

pick up a news worthy tid bit. bret: there you see behind him the senate minority leader and senate majority leader harry reid. republicans do want reform but they don't want what the white house and top democrats are selling. senator reid, of course, has a challenge as the majority leader in nevada he is facing stiff opposition in his reelection bid. latest polls there have him at 36% approval in nevada. bret: you don't notice as many members reaching over as with the president or mitch mcconnell. bret: there you see senator clovatar. the first lady looking down. bret: a question, bret, as to whether what this president faces tonight is a problem that has to do with ineffective or poor salesmanship and ineffective explanation of what the measure is or whether it's a substantive problem that has

to do with what's promised from this bill and what the facts are about what congressional budget office and others say the bill -- or the set of ideas that will form the basis of the bills in both houses will do. i mean, for example, the president is talking about having to be deficit neutral. the congressional budget office has said that the proposals now before the congress would certainly not be that. that they would cost something on the order of a trillion dollars. and the president has indicated that they would have to be some cuts in medicare expenditures. he said it would all be waste. good question as to whether people believe that. if they do, obviously that would be an enormous boost to the president and to the democrats trying to pass this legislation. bret: steve, quickly, you were nodding your head there, steve. >> this is the main dispute. the white house thinks it's a message problem. republicans and people around the country who are opposed to

the program or at least skeptical of it see it as a substance issue. bret: here now, from the house floor, president obama. >> thank you. [cheers and applause] thank you thank you. thank you. [gavel]

>> members of congress, i have the high privilege and distinct honor to present to you the president of the united states. [cheers and applause] >> thank you, thank you so much thank you very much. thank you. thank you, please please, nbe seated.

madam speaker, vice president biden, members of congress, and the american people, when i spoke here last winter, this nation was facing the worst economic crisis since the great depression. we were losing an average of 700,000 jobs per month. credit was frozen and our financial system was on the verge of collapse. as any american who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. a full and vibrant recovery is still many months away. and i will not let up until those americans who seek jobs can find them. [applause]

until those -- until those businesses that seek capital and credit can thrive, until all responsible homeowners can stay in their homes, that is our ultimate goal. but thanks to the bold and decisive action we have taken since january, i can stand here with confidence and say that we have pulled this economy back from the brink. [cheers and applause] now, i want to thank the members of this body for your efforts and your support in these last several months. and especially those who have taken the difficult votes that

have put us on the path to recovery. i also want to thank the american people for their patience and resolve during this trying time for our nation. but we did not come here just to clean up crises. we came here to build a future. [applause] so, tonight, i return to speak to all of you about an issue that is central to that future. and that is the issue of health care. i'm not the first president to take up this cause. but i am determined to be the last. [cheers and applause] it has now been nearly a century since theodore roosevelt first called for health care

reform. and ever since nearly every president and congress, whether democrat or republican has attempted to meet this challenge in some way. a bill for comprehensive health reform was first introduced by john dingell sr. in 1943. 65 years later his son continues to introduce that same bill at the beginning of each session. [applause] [applause] our collective failure to meet this challenge year after year, decade after decade has led us to the breaking point. everyone understands the extraordinary hardships that are placed on the uninsured who live every day just one accident

or illness away from bankruptcy. these are not primarily people on welfare. these are middle class americans. some can't get insurance on the job. others are self-employed and can't afford it since buying insurance on your own costs you three times as much as the coverage you get from your employer. many other americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or too expensive to cover. we are the only democracy, the only advanced democracy on earth, the only wealthy nation that allows such hardship for millions of its people. there are now more than 30 million american citizens who cannot get coverage. in just a two-year period, one in every three americans goes without health care coverage at some point. and every day 14,000 americans lose their coverage. in other words, it can happen

to anyone. but the problem that plagues the healthcare system is not just a problem for the uninsured, those who do have insurance have never had less security and stability than they do today: more and more americans worry that if you move, lose your job, or change your job, you will lose your health insurance, too. more and more americans pay their premiums only to discover that their insurance company has dropped their coverage when they get sick or won't pay the full cost of care. it happens every day. one man from illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn't reported gallstones that he didn't even know about. they delayed his treatment, and he died because of it. another woman from texas was about to get a double mass -- mastectomy because she forgot to declare a case of acne. by the time she had her

insurance reinstated her breast cancer had more than doubled in size. that is heart breaking. it is wrong. and no one should be treated that way in the united states of america. [cheers and applause] then there is the problem of rising costs. we spend 1.5 times more per person on health care than any other country. but we aren't any healthier for it. here is one of the reasons that insurance premiums from gone up three times faster than wages. it's why so many employers, especially small businesses are

forcing their employees to pay more for insurance or dropping their coverage entirely. that's why so many aspiring entrepreneurs cannot afford to open a business in the first place and why american businesses that compete internationally, like our automakers are at a huge disadvantage. it's why those of us with health insurance are also paying a hidden and growing tax for those without it. about $1,000 per year that pays for somebody else's emergency room and charitable care. finally, our healthcare system is placing an unsustainable burden on taxpayers. when health care costs grow at the rate they have, it puts greater pressure on programs like medicare and medicaid. if we do nothing to slow these skyrocketing costs. we will eventually be spending more on medicare and medicaid than every other government

program combined. put simply, our health care problem is our deficit problem. nothing else even comes close. [applause] nothing else. >> now, these are the facts. nobody disputes them. we know we must reform this system. the question is how. there are those on the left that believe the only way to fix the system is through a single pair system like canada's. [applause] >> where we would severely restrict the private insurance market and have the government provide coverage for everybody. on the right, there are those who argue that we should end employer-bass systems and leave individuals to buy health insurance on their own. i have said -- i have to say that there are arguments to be made for both of these

approaches. but either one would represent a radical shift that would disrupt the health care most people currently have. since health care represents one sixth of our economy i believe it makes more sense to build on what works and fix what doesn't. rather than try to build an entirely new system from scratch. [cheers and applause] >> that is precisely what those of new congress have tried to do over the past several months. during that time, we have seen washington at its best and at its worse. we have seen many in this chamber work tirelessly through this year thoughtful ideas how to achieve reform. the five committees asked to

develop bills, four have completed their work and the senate finance committee announced today that it will move forward next week: that has never happened before. our overall efforts have been supported by an unprecedented coalition of doctors and nurses, hospitals, seniors groups, and even drug companies, many of home opposed reform in the past: and there is agreement in this chamber on about 80% of what needs to be done. putting us closer to the goal of reform than we have ever been. but what we have also seen in these past months is the same partisan spectacle that only hardens the disdain that many americans have towards their own government. instead of honest debate, we have seen scare tactics. some have dug into unyielding ideological camps that offer no hope of compromise.

too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. and out of this blizzard of charges and counter charges, confusion has ranging. well, the time for bickering is over. [cheers and applause] the time for games has passed. now is the season for action. now is when we must bring the best ideas of both parties together and show the american people that we can still do what we were set do. now is the time to deliver on health care. the plan i'm announcing tonight would meet three basic goals. it will provide more security and stability to those who have health insurance it will provide insurance for those who don't. and it will slow the growth of health care costs for our families, our businesses and

our government. [applause] it's a plan that asks everyone to take responsibility for meeting this challenge. not just government, not just insurance companies, but everybody. including employers and individuals. and it's a plan that incorporates ideas from senators and congressman, from democrats and republicans. and, yes, from some of my opponents in both the primary and general election. here are the details that every american needs to know about this plan. first, if you are among the hundreds of millions of americans who already have health insurance through your job or medicare or medicaid, or the v.a., nothing in this plan will require you or your employer to change the coverage or the doctor you have. [applause]

let me repeat this. nothing in our plan requires you to change what you have. what this plan will do is make the insurance you have work better for you. under this plan it will be against the law for insurance companies to deny you coverage because of a preexisting condition. [cheers and applause] as soon as i sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it the most. [cheers and applause]

they will no longer be able to put some arbitrary cap on the coverage you can receive in a year or in a lifetime. [cheers and applause] we will place a limit on how much you can be charged for out- of-pocket expenses. because, in the united states of america, no one should go broke because they get sick. [cheers and applause] and insurance companies will be required to cover, with no extra charge, routine checkups and preventative care like mammograms and -- it makes sense, it saves money and it saves lives. [cheers and applause]

now, that's what americans who have health insurance can expect from this plan. more security, and more stability. now, if you are one of the tens of millions of americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. [applause] if you lose your job, or you change your job, you will be able to get coverage. if you strike out on your own and start a small business, you will able to get coverage. we do this by creating a new insurance exchange, a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. insurance companies will have an incentive to participate in this exchange because it let's them compete for millions of

new customers. as one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. this is how large companies and government employees get affordable insurance. it's how everyone in this congress gets affordable insurance. and it's time to give every american the same opportunity that we give ourselves. [cheers and applause] now, for those individuals and small businesses who still can't afford the lower priced insurance available in the exchange, we'll provide tax credits, the size of which will be based on your need. and all insurance companies that want access to this new marketplace will have to abide by the consumer protections i already mentioned. this exchange will take effect

in four years, which will give us time to do it right. in the meantime, for those americans who can't get insurance today, because they have preexisting medical conditions, we will immediately offer low cost coverage that will protect you against financial ruin, if you become seriously ill. this was a good idea when senator john mccain proposed it in the campaign. it's a good idea now, and we should all embrace it. [cheers and applause] now, even if we provide these affordable options, there may be those, especially the young and healthy, who still want to take the risk and go without coverage. there may still be companies that refuse to do right by their workers, by giving them

coverage. the problem is, such irresponsible behavior costs all the rest of us money. if there are affordable options, and people still don't sign up for health insurance, it means we pay for these people's expensive emergency room visits. if some businesses don't provide workers health care, it forces the rest of us to pick up the tab when their workers get sick and gives those businesses an unfair advantage over their competitors. and, unless everybody does their part, many of the insurance reforms we seek, especially requiring insurance companies to cover preexisting conditions just can't be achieved. that's why under my plan, individuals will be required to carry basic health insurance, just as most states require to you carry auto insurance. [applause] likewise, businesses will be required to either offer their workers health care or chip in

to help cover the cost of their workers. there will be a hardship waiver for those individuals who still can't afford coverage and 9 5% of all small businesses, because of their size and narrow profit margin would be exempt from these requirements. but, but we can't have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. improving our healthcare system only works if everybody does their part. and while there remains some significant details to be ironed out. [laughter] i believe a broad consensus exist for the plan i just outlined. consumer protections for those with insurance. and exchange that allows individuals and small businesses

to purchase affordable coverage and a requirement that people who can afford insurance get insurance. and i have no doubt that these reforms would greatly benefit americans from all walks of life, as well as the economy as a whole. still, given all the misinformation that's been spread over the past few months. [applause] i realize that many americans have grown nervous about reform. so tonight i want to address some of the key controversies that are still out there. some of people's concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. the best example is the claim made not just by radio and cable talk show hosts but by prominent politicians that we plan to set up panels of bureaucrats with the power to kill off senior citizens. now, such a charge would be laughable if it weren't so cynical and irresponsible. it is a lie, plain and simple.

[cheers and applause] now, there are also those who claim that our reform efforts would insure illegal immigrants. this too is false. [boos] >> the reforms i'm proposing would not apply to those who are here illegally. >> one more misunderstanding i want to clear up, under our plan, no federal dollars will be used to fund abortions and federal conscience laws will remain in place. [applause]

now, my health care proposal has also been attacked by some who oppose reform as a government takeover of the entire healthcare system. yeah. as proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly sponsored insurance option, administered by the government just like medicaid or medicare. so, let me set the record straight here. my guiding principle is and always has been that consumers do better when there is choice and competition. [applause] >> that's how the market works. [cheers and applause]

unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. in alabama, almost 90% is controlled by just one company. and without competition, the price of insurance goes up and quality goes down. and it makes it easier for insurance companies to treat their customers badly. by cherry picking the healthiest individuals and trying to drop the sickest. by overcharging small businesses who have no leverage and by jacking up rates. insurance executives don't do this because they are bad people. they do it because it's profitable. as one former insurance executive testified before congress, insurance companies are not only encouraged to find reasons to drop the seriously ill, they are rewarded for it.

all of this is in service of meeting what this former executive called wall street's relentless profit expectations. now, i have no interest in putting insurance companies out of business. they provide a legitimate service and employ a lot of our friends and neighbors. i just want to hold them accountable. [cheers and applause] the insurance reforms i have already mentioned would do just that. but an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. [cheers and applause]

let me be clear, let me be clear, it would only be an option for those who don't have insurance. no one would be forced to choose it. and it would not impact those of you who already have insurance. in fact, based on congressional budget office estimates, we believe that less than 5% of americans would sign up. despite all this, the insurance companies and their allies don't like this idea. they argue that these private companies can't fairly compete with the government. and they would be right if taxpayers were subsidizing this public insurance option. but they won't be. i have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. but, by avoiding some of the overhead that gets eaten up at

private companies by profits, excessive administrative cost and executive salaries, it could provide a good deal for consumers. it would also keep pressure on private insurers to keep their policies affordable and treat their customers better. the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities. [applause] it's worth noting that a strong majority of americans still favor a public insurance option of the sort i propose tonight. but, it's impact shouldn't be exaggerated by the left or the right or the media. it is only one part of my plan. a shouldn't be used for the handy excuse for the washington battles.

to my progressive friends i would remind you for decades the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it. [applause] the public option is only a means to that end. we should remain open to other ideas that accomplish our ultimate goal. and to my republican friends, i say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have. [applause] for example, some have suggested that the public option go into effect only in those markets where insurance companies are in the providing affordable policies. others have proposed a co-opt

or another to administer the plan. these are all constructive ideas worth exploring. i will not back down on the basic principle that if americans can't find affordable coverage we will provide you with a choice. [cheers and applause] [cheers and applause] and i will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need. [cheers and applause] finally, let me discuss an issue that is of great concern to me, to members of this

chamber, and to the public. that's how we pay for this plan. and here is what you need to know. first, i will not sign a plan that adds one dime to our deficits either now or in the future. [cheers and applause] i will not sign it if it adds one dime to the deficit now or in the future, period. and to prove that i'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promise don't materialize. [applause] now, part of the reason i faced a trillion-dollar deficit when

i walked in the door of the white house is because too many initiatives over the last decade were not paid for from the iraq war, to tax breaks for the wealthy. [cheers and applause] i will not make that same mistake with health care. second, we have estimated that most of this plan can be paid for by finding savings within the existing healthcare system. a system that is currently full of waste and abuse. right now too much of the hard- earned savings and tax dollars we spend on health care don't make us any healthier. that's not my judgment. it's the judgment of medical professionals across this country. and this is also true when it comes to medicare and medicaid. in fact, i want to speak directly to seniors for a

moment. because medicare is another issue that's been subjected to demagoguery and distortion during the course of this debate. more than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. that's how medicare was born. and it remains a sacred trust that must be passed down from one generation to the next. [applause] that is why not a dollar of the medicare trust fund will be used to pay for this plan. [applause] the only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud as well as unwarranted subsidies in medicare that go to insurance companies. subsidies that do everything to pad their profits, but don't

improve the care of seniors. and we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead. [applause] now, these steps will ensure that you, america's seniors, get the benefits you have been promised. they will ensure that medicare is there for future generations. we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pockets for prescription drugs. [cheers and applause] that's what this plan will do for you.

so don't pay attention to those scary stories about how your benefits will be cut. especially since some of the same folks who are spreading these tall tales have fought against medicare in the past and just this year supported a budget that would essentially have turned medicare into a privatized voucher program. that will not happen on my watch. i will protect medicare. [cheers and applause] now, because medicare is such a big part of the healthcare system, making the program more efficient can usher in changes in the way we deliver health care that can reduce costs for everybody. we have long known that some places, like the inner mountain health care in utah or the geisinger health system in rural pennsylvania offer high quality health care.

the can help encourage the adoption of these common sense best practices by doctors and medical professionals throughout the system. everything from reducing hospital infection rates to encouraging better coordination between teams of doctors. reducing the waste and inefficiency in medicare and medicaid will pay for most of this plan. [applause] much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. this reform will charge insurance companies a fee for their most expensive policies. which will encourage them to provide greater value for the money. an idea which has the support of democratic and republican experts. and according to these same experts, this modest change could help hold down the cost of health care for all of us in the long run. finally, many in this chamber,

particularly on the republican side of the aisle, have long insisted that reforming our medical malpractice laws can help bring down the costs of health care. [applause] [cheers and applause] there you go. now, i don't believe malpractice reform is a silver bullet, but i have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. [cheers] >> so i'm proposing that we move forward on a range of ideas about how to put patient's safety first and let doctors focus on practicing medicine. [applause]

>> i know that the bush administration considered authorizing demonstration projects in individual states to test these ideas. i think it's a good idea. and i'm directing my secretary of health and human services to move forward on this initiative today. [applause] now, add it all up, and the plan i'm proposing will cost around $900 billion over ten years. less than we have spent on the iraq and afghanistan wars and less than the tax cuts for the wealthiest few americans that congress passed at the beginning of the previous administration. [applause]

now, most of these costs will be paid for with money already being spent, but spent badly in the existing healthcare system. the plan will not add to our deficit, the middle class will realize greater security, not higher taxes. if we are able to slow the growth of health care costs by just one tenth of 1% each year, one-tenth of 1%, it will actually reduce the deficit by $4 trillion over the long term. now, this is the plan i'm proposing. it's a plan that incorporates ideas from many of the people in this room tonight, democrats and republicans. and i will continue to seek common ground in the weeks ahead. if you come to me with a serious set of proposals, i will be there to listen. my door is always open. but, know this, i will not waste time with those who have

made the calculation that it's better politics to kill this plan than to improve it. [cheers and applause] i won't stand by while the special interest use the same old tactics to keep things exactly the way they are. if you misrepresent what's in this plan we will call you out. [cheers and applause] and i will not accept the status quo as a solution. not this time, not now. every one in this room knows what will happen if we do nothing. our deficit will grow, more families will go bankrupt. more businesses will close. more americans will lose their

coverage when they are sick and need it the most. and more will die as a result. we know these things to be true. that is why we cannot fail. because there are too many americans counting on us to succeed. the ones who suffer silently and the ones who share their stories with us at town halls and emails and letters. i received one of those letters a few days ago. it was from our beloved friend and colleague ted kennedy. he had written it back in may, shortly after he was told that his illness was terminal. he asked that it be delivered upon his death. in it, he spoke about what a happy time his last months were, thanks to the love and support of family and friends, his wife vickie, his amazing children who are all here

tonight. and he expressed confidence that this would be the year that health care reform, that great unfinished business of our society, he called it, would finally pass. he repeated the truth that health care is decisive for our future prosperity, but he also reminded me that it concerns more than material things. what we face, he wrote, is, above all, a moral issue. at stake are not just the details of policy but fundamental principles of social justice and the character of our country. i have thought about that phrase quite a bit in recent days. the character of our country. one of the unique and wonderful things about america has always been ourself reliance, our

rugged individualism, our fierce defense of freedom and our healthy skepticism of government. and figuring out the appropriate size and role of government has always been a source of rigorous and, yes, sometimes angry debate. that's our history. for some of ted kennedy's critics, his brand of liberalism represented an afront to american liberty. in their minds his passion for universal health care was nothing more than a passion for big government. but those of us who knew teddy and worked with him here, people of both parties, know that what drove him was something more. his friend, orrin hatch, he knows that. they worked together to provide children with health insurance. his friend john mccain knows that. they worked together on a patient's bill of rights. his friend chuck grassley knows that. they worked together to provide health care to children with disabilities.

on issues like these, ted kennedy's passion was born not of some rigid ideology but of his own experience. it was the experience of having two children stricken with cancer. he never forgot the shear terror and helplessness that any parent feelings when a child is badly sick. and he was able to imagine what it must be like for those without insurance, what it would be like to have to say to a wife or a child or an aging parent there is something that could make you better but i just can't afford it. that large heartedness, that concern and regard for the polite of others is not a partisan feeling. it's not a republican or a democratic feeling. it, too, is part of the american character. our ability tan