. >> rose: welcome to the program. we begin tonight with our continuing coverage of president trump's overseas tour and his address to nato. we talk to ivo daalder, former ambassador to nato and john micklethwait of bloomberg. >> the kind of grownups, a, they have pulled off by relatively, certainly the middle east, relative success against the picture of kind of carnage on the domestic policy side. yet they are doing all this, and ivo would understand it much better than us. they are doing it with virtually no staff at all. >> rose: we begun with ian bremmer, president of your asia group. >> the they came to riyadh to see the american president, they made him feel presidential, like he was on the right side. israel, netanyahu had to corral his cabinet to all actually show

up to see trump on the tarmac. you had a little bit of dissent, there's open media there. but of course its personal relationship is very warm. trump had a couple of gaffes but israel at the end of the day an incredibly strong ally of the united states and happy with trump and with obama. then he goes to the vatican and it's obviously a little more formal, stilted, awkward. the fact that pope francis gave him the autographed encyclical on climate change was about as much of a dig as you would get symbolically from the pope. >> rose: we conclude with peter orszag and ezra klein in a conversation about the future of health care in america. >> what the score shows is how hard it is, it's easy to kind of talk at a bumper sticker level. when you get into the details in health care there are all sorts of unexpected surprises. and one of them was just you think you're creating a high risk pool for unhealthy people but what you're actually doing is creating an incentive for the

healthy people to go into that pool and destabilizing the rest of what you are trying to do which is exactly what cbo said in this case. lots of unintended consequences, lots of complexity, this is not an easy topk and i think that is exactly what the house legislation definitively demonstrate. >> rose: the president overseas and health care in america when we continue. >> funding for charlie rose is provided by the following: bank of america, life better connected. ed >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.

>> we begin this evening with a fourth leg of president trump's first trip overseas. the president was in brussels today where at a speech at the new nato headquarters he criticized members of the alliance not contributing enough to collective defense. >> i have been very, very direct with secretary stilltonberg and members of the alliance in saying that nato members must finally contribute their fair share and meet their financial obligations. but 23 of the 28 member nations are still not paying what they should be paying and what they're supposed to be paying for their defense. >> rose: against expectations, president trump declined to explicitly endorse nato's article five, that includes holds that an attack on any one member is an attack on all. joining me now from chicago is

ivo daalder, former ambassador to nato, currently president of the chicago council on global affairs. with me at the table, john micklethwait, editor in chief of bloomberg, former editor of the economist. i'm pleased to have them both on this program. ivo, tell me what you thought of the president's speech? >> i thought it was disappointing to be frank. i think there is nothing wrong for the president of the united states to come to europe and remind europeans that they need to spend more on defense. in fact, every president from truman on has been doing that and doing it in the forceful way that he did is perfectly fine. although perhaps you get more results if you do it privately. but you also then need to tie it into a commitment of the united states to the essence of the alliance which is article five which is this notion that the united states stands four square with our allies when it comes to their squatter and their defense. -- their security and their defense. it was particularly important for donald trump to do this since during the campaign he

called nato into question. he called it on sol et. so the allies were setting there waiting for the treaty commitment of a treaty signed 68 yearses ag and they disn get it. >> rose: john? >> i-- ivo, there is a lot about, this and i think he said right to point out that he failed in that respect. but against that you have to take all the things he said on the campaign. so implicitly there was a degree of eating humble pie. here was trump standing beside the head of nato to some extent sings its praises. i agree it would be much better if he came out and said something specific. and to be fair, i think people can make the point that there is, it is wrong that all these allies sit there, they don't spend their two percent, some people say that there might be other better ways of measuring it than just the two percent. but the two percent of gdp is not a large amount to ask. >> that is what president obama is asking for too. >> he wasn't being particularly

outrage us. it has been a relatively disciplined approach. >> what about article five. >> i think it is crucial. without article five there is no alliance. ivo is exactly right about that. it sits there at the middle of things. it would have been better if he said it but against the panapoly of all the things donald trump has said before i think you could say this is at least some enthusiasm for it he came in saying that nato was a disgrace and all these things. >> obsolete. >> and he is there now doing things with them. >> why would he do this? why wouldn't he endorse article five? ivo? >> you know, i-- i don't know. i had expected him to do that. his aides had indicated that he would do it. and the fact that he isn't able to say this publicly is concerning. and it was particularly concerning at this particular moment. and i think i disagree with john. this is the first visit by the president to nato headquarters. it was, his speech was an

unveiling of a memorial to 9/11. now what is important about 9/11 is not only that the united states was attacked that day, but that the very alliance where he was standing in its headquarters, the feks day, invoked for the first and only time article five. and that, as a result of that invocation, vat nato soldiers and europeans, hundreds of thousands of them over the past 16 years have been deployed to afghanistan. they fought and died alongside americans, for what is, in essence the protection of the united states. that's what the alliance is all about. when it comes to whether you care, it is yes, dollars matter and euros and pounds, but it's really about the solidarity that was underscored by the afghanistan mission. >> i absolutely totally agree with everything ivo just said, is that, i wish trump had done that, i'm just really saying that relative to some of the rather more appalling things he said about nato before, it might

have been a typical trump thing where he gives quite a lot but not as much. he could have been cross about macron's extremely firm handshake or any of the things that might have irstated. >> rose: what did macron do. >> macron delivered a particularly firm handshake which seemed to shake trump because it was-- . >> rose: a firm handshake shaked the president of the united states. >> a strange thing. >> rose: are you shaking your head. >> the web has been alive with this this morning. >> rose: but it seems to be timely article five, at this moment, because of whatever threat there might be by russia to some of its neighbors in the balance can states, in the baltics. >> and i think that is the second piece. not only is it the failure to re-- to reaffirm the commitment to article five, it is the other piece which is the failure to recognize the degree to which russia is a true threat to nato

in a way that wasn't the case a few years ago. but with the invasion of you are crane, with the annexation of crimea, nato has responds quited-- responded quite forcibly-- forcefully to try to protect its new members in eastern europe, its deployed troops there, including the united states, but so has germany, so has canada and britain, all three of them who are leading, the italian side deployment into the baltic states. in order to demonstrate the reality of what article five is, and the russia threat was barely mentioned in the statement that the president made. and it's that combination, an unwillingness to recognize the degree to which russia actually does pose a danger to nato and combined to an unwillingness to declare article five as a solemn treaty commitment of the united states. >> you used to be there, and you know what member states and their nato representatives think. what would you say about the

reception today to the president's speech? >> i think there is a great deal of anxiety. this is an alliance that works in one way and one way only which is when the united states leads. to get 28 countries to agree on anything and it denies based on consensus requires somebody like the united states, the major power to bring these countries along, to be a leader. and it doesn't help to be a scolder when you are not willing at the same time to be leading. you're more likely to get results when you demonstrate that you are committed to get people to follow you rather than telling them in the way that the president did, scolding them almost like school children. that they weren't doing their part. now they're not doing their part and they should be doing their part and it's something that presidents have said all along. i spend a good amount of my time banging the table saying we need to do more on defense but it has to be part of a holistic package

and st the lack of the other parts, the recognition of russia as a threat, article five as a fundamental treaty commitment that sort of undermines the message about burden sharing. >> a few things, one part is he was exactly right, for many of these countries article five is not something, it's buy nary, they by on are you are either fully behind it or not, any weakness is always a problem. if you are one of those baltic countries you sit and you have russia right on the neighbor. the idea that america would not come to your help, really matters a lot. i think in general, there has been this trip as a whole began in saudi a rain why-- arabia in the middle east an there it seemed to go much better than people expected. the reaction in europe has been more frosty. people are less keen to be seen standing beside trump. there are fewer sort of canons going off and royal occasions happening. >> rose: what did you think of his trip to saudi arabia and basically aligning himself with

israel and the arab states against iran? >> well, i think he has done one thing which is interesting. historically american foreign policy in the middle east has had that awkward thing of having saudi arabia and israel as the principal allies in the region who don't agree about that many things. but the one thing pulling them together is the iranians. and trump by making a lot of noise about that has help bring in the gulf as well, a lot of people who think the iran deal is a good one and you should just take it. but there are also groups of people who are worried about it. i think in general, compared with the mess of washington he left behind, you have to say it went relatively well. he signed business deals, the whole choreography suited him. it gave him a lot of things to do. he didn't seem to have much time to do tweets and stuff like that. he was taken and the actual, the way it was organized, by am saudis, some extent by the israelis all sort of worked in his favor. now he arrived in europe.

it is a harder audience in some ways it is less about commercial deals, it is about him correctly voluming him, and it is also about them saying we don't, he is not terribly in our interest to be seen alongside you. and also the fact you have rack ron, merkel facing an election. none of these people are rushing, may is in an election. none of them are rushing to be seen hugging done all trump at this precise moment. >> rose: chancellor merkel is hugging barack obama because he happened to be there to accept an award. >> he remains the more popular figure. >> does it in anyway, can you imagine that these kinds of circumstances and this icon class particular president can show do something that previously was not able to do in terms of aligning forces so that some kind of israeli-palestinian deal is possible? >> ivo, or have you seen too many failures to ever even raise hope. >> well, you know, one always hopes because clearly a peace in

the middle east is something both parties deserve and need to get behind. and it would certainly change the character and nature of the middle east itself. if donald trump is able in some ways to rearrange the forces in a way that gets us to an agreement where others have failed, all the more power to him. and in that sense i think his commitment to this, the willingness to meet with both sides, the ability, the attempt to bring the arabs along as part of that are all to be welcomed and encouraged. i mean clearly he was coming to the middle east with a lot less baggage than he may have had in other places, particularly once he gave the speech on the importance of the muslim world coming together to stand up against terrorism. >> it starts from a pretty good position of having the trust of the israelis which is something

that obama if they had it lost it quite quickly. i think that is quite a sort of useful thing in his pocket. and the one thing donald trump has repeatedly told us is he is a deal maker. this is in a choice the hardest deal in even-- this is the hardest deal in this national politics and has been for a long time that there is, most people think there is the element of a deal there if somebody really wants to push for it. >> did he in the speech, in the meeting with leaders in terms of the politics that we're talking about, show overcome the reputation that he earned during the campaign, you know, banning muslim entries to the united states, ivo? >> well, i think he certainly softened his own rhetoric and made the crucial distinction between terrorists and the religion. which in the during the campaign he seemed to merge with a blanket ban on muslims.

so i think he made progress on that. and clearly was embraced by a large number of at least muslim country leaders from muslim countries. and that is to be encouraged. we want a president to learn over time where he may have been wrong and to adapt to the circumstances. again just to turning back to europe, i had expected and i think many people were expecting him to reflect that learning in the conversations he was going to have with the european leaders. i think john's right, there was a higher bar here. the europeans weren't particularly anxious to be closely associated with them, particularly those who are facing elections. and he did come with a lot of baggage but it looks like he's taking that with him to his next stop. >> rose: let me talk about a new leader on the world stage, theresa may of gret britain. everybody i know was impressed

by the way she stood in front of ten downing and said what he said with the presence she said it bns yeah, in a sense the crisis, to that extent, is always crude to think about these terms in terms of politics. but it has helped her. her appeal to the british people to say look, trust me, in a somewhat angela merkel way. i am the only person who can take us through this negotiation which most people would imagine is a choice between a slightly bad outcome and a very bad outcome. >> rose: which is the brexit negotiation. >> the brexit negotiation. the stuff she said about terrorism has been very direct. >> rose: where was the secretary of state in this trip. >> he has accompanied the president throughout the trip. he was with him in brussels an indeed he was sitting behind him at the nato meeting when they were showing the pictures. and again, just article five yesterday he said of course we support article five, of course the president supports article five. if that's the case, it should be pretty easy for the president of the united states to actually say so. >> you have to in some ways have

a lot of sympathy. this is a trip which in some ways reflects on him, you have mcmaster, the grown ups, some people alot of people see it in the trump organization. they have pulled off by relatively, certainly the middle east, relative success against a picture of kind of carnage on the domestic policy side. yet they were doing all this, ivo would understand it much better than us. they are doing it with virtually no staff at all. the trump administration has been incredibly inefficient in getting anybody through. they are working on a shoe string so i think tillerson has some ground for thinking that he, you know, he could have been more rewarded than he has been. >> rose: john, great to see you, thank you, ivo great to you have back from chicago. >> great to be there. >> rose: we'll be right back. stay with us. we continue our discussion of president trump's first foreign trip with ian bremmer, the president and founder of your asia group. i'm pleased to have him back at

this table, well welcome. p>>r this far the success of the first foreign trip of president trump? >> given expectations, pretty high. pretty high. every step of the trip it gets a little harder, right? and the saudis, of course, there is no domestic dissent. they are enormously happy that trump was there. everything went according to plan. didn't have to deal with, you know, any questions from the media, all simple, right? and also the whole region came to riyadh to see the american president, it made him lack presidential, made him feel like he was on the right side. israel, netanyahu had to corral his cabinet to all actually show up to see trump on the tarmac. you had a little bit of dissent, there's open media there. but of course its personal relationship is very warm, trump had a couple of gaffes but israel at the end of the day, an incredibly strong ally of the united states and happy with

trump than with obama. and he goes to the vatican, it is obviously a little more formal, stilted, awkward. the fact that pope francis gave him the autographed encyclical on climate change is about as much of a dig as you would get symbolically from the pope. so clearly there was a pretty strong message there. now we're on to brussels and nato. a lot tougher. you have a lot of ally there that don't feel like trump is on the same page with them. he's pushing them on spending more on nato 6789 you've got mr. tusk saying that they're not on the same page on russia, for example. not clear how committed ultimately trump is to this alliance even though he is obviously feeling more supportive than he was before. then he's going for the g7, broad multilateral organization. it is clear there is no more support of. they are all about shared values, not security. >> rose: who will he see there?

>> well, i mean, at the end of the day you've got the canadians are going to be tough. i think the italians are going to be tough. we've already seen macron, that meeting was not easy at all on climate. that meeting was not easy on security. that meeting was not easy on europe, or even on macron personally where trump said i was really supporting you. i was behind you. but of course that wasn't the case. and then the hardest part of all, of course, the trip back to the united states. so where he has to deal with enormous scandals and crisis and decisiveness. i think the trip on a whole, trump could have done a lot worse. and he's meeting allies and many of those allies actually have better relations with him than they did with obama. but this is, this is a very challenging global environment for any american president and more so by trump much of which is self-inflicted. >> self-inflicted and because their perception of him is unpredictable. >> incapable. >> incapable, sure, that he's

not aware of a lot of the issues. you saw when he went to the israeli holocaust memorial, that what he wrote in the visitors book implied he had no idea what the holocaust really was. i mean that's-- that was, for me that was the single part of the trip that i found painful. where the american president, i mean yes, israel is a strong ally. we are there for them. the personal relationship is fine. nothing is going to unravel this. and yet the american president is so far from being able to show empathy and understanding or historical context, for things that matter to a lot of people around the world. so yeah, they're going to go and they will give us a big show and treat us well because they feel like they have to and they should and because the relationship is more than just about one president. but these things, they're not just symbolic. they hurt. you have a president that isn't

able, willing to stand up to what american values and history actually mean. and i think that other nations around the world aren't just embarrassed by that, they are profoundly puzzle the by that. >> rose: there was a story this week about how much debt there is in china. is this a growing issue whether china's economy will be able to deliver what they hoped it will deliver. >> yeah. the fact that they got a downgrade is quite significant. there is a question about how long the bad loans are across the chinese, both state corporate space as well as the banking space. and nobody really believes chinese growth numbers. >> rose: nobody believes six percent? >> no, i think that-- six plus. i would say the economist that you talk to think it's closer from three to five. >> rose: wow. >> well, i mean, they're still showing good employment. >> rose: suppose it's three. that means half of what they say.

>> yeah. and i think generally speaking the economic consensus people that seem to know four percent, i'm not inside the numbers but i will say that irrespective of what the debt looks like, on i'm a political scientist, the ability of the chinese to fore stall challenges runs on their market. you remember, you and i were talking about a year ago about the enormous downturns that they saw in their market, right? i mean every day it was basically hitting the breakers, at the end of the day the chinese said okay, we're just going to shut this down and not a you law people to take short positions, right? that was the chinese government saying we have the political ability to avoid instability. if the chinese wanted to force people to become greater market participates, i mean if you are making a lot of money in china you are doing it because of the largest of the chinese government. they could do that. they have a lot of political capacity to stop economic

instability for now. but eventually you're going to have to come to face the reality of these credit programs. >> rose: let's take president xi jinping, he wants a quiet year, and to focus on all the things coming up. so he goes into that congress in october basically in a strong position so that he can get the people he wants on the standing commmmittee. >> he doesn't want problems. but i wouldn't say he wants a quiet year. so if you ask me, if you look around the world right now, there are two big things happening, right? one is the trump phenomenon. and how it plays out. but the second is is china's role in the world, the one belt one road summit that they hosted a weak ago. they had 29 heads of state show up. >> rose: how much attention did it get in the west. >> very little. >> rose: i know, i was surprised by that.

>> the biggest thing happening geio politically happening in the world right now aside from trump is the fact that the chinese are met oddically building long-term a strategic economic architecture that competes with that of the united states. it's not as big as what the united states did after world war ii t is not as universallallist, but it is enormously meaningful trk is definitive in asia, and the countries that aren't in it, it's going to be a problem for them. >> rose: and expansive in africa. >> it's-- not all of africa, just in nigeria last week, and west africans they like the chien ease writing checks but they don't really understand what is happening in terms of infrastructure strategy on the part of china. so i wouldn't say they are part of the game. >> rose: the fact that they don't understand it doesn't mean that it's not working. >> i would say, so for them, the one belt one road summit didn't meech much at all. they still see china as they saw china ten years ago. they are growing, they are writing big checks but they is not necessarily part of the big arc terk ture.

>> rose: define one belt one road. >> one belt one road is the idea that the chinese are building out infrastructure and they are spending an enormous amount of money to do so. it's port, it's train rail, it's roads, it's it architecture. and behind that is standards. and in return for giving that money, you, and things like cultural exchanges so it is a bit of a grab bag from the chinese perfect-- perspective, they exement a level of political alignment and political support, and economic alignment as well. and it's mostly bilateral t is not multilateral the way the americans set up institutions. this is absolutely the single biggest new geo political thing in the world. and xi jinping is not only rolling it out and not stopping it when he is about to have his big leadership transition in the 235u8, he is actually rolling out the red carpet, having the first summit route now. >> rose: what is going to happen in brazil? >> i think that are you going to

have another impeefment-- impeachment. >> rose: the second impeachment. >> can you believe this, yeah. south korea in between. but my goodness. it's a scandal is extraordinary. you have this tape. >> rose: brazil. >> tape of the brazilian president with the head of the largest meat producer in the world. and the tapes that he was bribing him. and turned out the tape was doctored. and that the fellow that was having the conversation with the president had a billion dollars of insider trading knowing that the story was going to drop. the guy doing the investigation also had his own insider trade going on it is an incredible mess. but the president can't explain why this corporate leader who was under investigation at the time, what he was doing in his private residence late at night without any security check or

being written down about, he's not been able to explain any of the discussions, the 500,000 dollars in a bag, that went from one of his top five advisors to this fellow. none of this is explainable. and there have been big demonstrations in brazil in the past 24 hours. he calls the military out to crack some heads and bring it down. it feels like a des operation move. he might not be out in a week but he's going to lose an immense amount of support from his coalition and eventually you're probably going to see-- . >> rose: any presidents going to go to jail. >> i don't think will go to jail. >> rose: why is he immune from it, because he's been linked to it. >> no, he's been linged to it i think there are a lot of cases australian him, tallly bringing him to jail implies they're going to be able to have-- that the cases are going to come to indictment. it's not clear that they rise to that level. but the amount of opposition,

strong opposition to him for 80% of the population, given him being caught up in all of this cor rums is a mess. so i think the next president of brazil, when we get to real elections as opposed to another acting president is an outsider that we don't know right now. and you know, the reform-- it can be someone that served under a previous president but this is just a mess. and you know, there are over a hundred ministers and former ministers caught up in the investigation. the brazilian scandals make american, washington politics look just benign. >> rose: mild. >> look mild. and there is no end in sight. the good thing though, is that brazil is showing us as the united states is showing us, that these institutions ultimately work. that you have an independent judiciary. >> rose: the democratic institutions. >> that can't be bought off and

that ultimately the law is supreme. and in the united states with trump and with the investigations, i think we're finding out the same thing. >> rose: when you travel around the world do people say to you, what is going to happen, will there be impeachment, asking about president trump. do they say is there a lot there, simply smoke and no fire. what is it they are asking about? because they're all asking. >> they're asking about how much they should be taking seriously what they are hearing out of washington and our media. they want to know-- because they know that in the united states these are just parosms of polarization and discontent and scandal after scandal. and that the news cycle, you can go on a plane for three hours, get off, and a whole new news story. so they want to know how much this is just the united states going a little nuts over something that doesn't matter to them. or is this really something to worry about. >> rose: simply worried about if there is instability here. >> yeah. and if-- the thing that starts to worry me from the

international community's perspective, you know, right now we have people that you and i both respect a lot that are making some important decisions around trump. that syria bombing went well in part because you had people like madison mcmaster that were providing their thoughtful recommendations on what the united states should do. now if you ask me, in a year's time, how confident am i that those people are still going to be serving in the trump administration, that they're not going to say you know what, we've just had it. when i saw mcmaster with stephanopoulos this last weekend, you prob leigh saw that, he looked uncomfortable to me. >> rose: he dodged the question four times. >> four times. >> and i think ultimately if they can't get trump to a more managed normal place. >> rose:-- has been pretty good, he has been pretty close to the prompter. >> that's right. i thought that speech that he gave in riyadh, he didn't is strai and it was a pretty good

speech. >> rose: he didn't strai in the nato speech either it is just people had a quarrel what what he said. >> people didn't like the speech. but he was much better managed on this trip. when he gets back to the united states i would be willing to bet you dollars to donuts which i guess goes your way in new york right now, that that won't continue. and i just think that people like-- people like mcmaster and mattis, they don't need this job. they're doing it because they believe they're doing the right thing. if suddenly their values look like they have to be thrown under a truck as opposed to just, you know, scruf eled a bit, i think they'll leave. and if that happens, and we have a crisis over north korea, if that happens we have a crisis over iran or over russia or over china, all of which is plausible , that i worry that an insecure trump who doesn't have people like that, that he is getting advice from, focusing just on his innercircle that don't have the expertese and the experience, that it might be more risk accept ant and lashing

out, then i think we have a real problem. >> rose: thank you for coming. >> good to see you. >> rose: back in a moment. the congressional budget office gave its analysis yesterday on the american health care act bill which was passed by the house earlier this month. the agency projected that the revised republican bill will leave 23 million more people uninsured in 2026. it would also reduce the deficit by $119 billion over ten years. the cbo reports that the bill could destabilize individual insurance markets in some states. it is expected that the senate leadership will make major changes to the house bill before moving forward. joining me ezra klein, editor in chief of vox. peter orszag, vice chairman of investment bankerring and global cohead of health care at lazard, another investment banking house. i'm pleased to have both of them here. let me begin with you, ezra. when you look at the cbo analysis, the implications are? >> kal am tus. so what the congressional budget office said, like the previous iteration of this bill, it would

deinsure-- deinsure about 23 million people. but the key thing they were looking at what had really changed here was republicans had added in this compromise language that would allow states to waiver out of obamacare's insurance regulations. and republicans said this language basically had no downside. they promised that among other things it would continue to protect people with preexisting conditions and it would continue to keep insurance markets stable. the congressional budge office said no, we think about one out of six states is going to use this waiver cap ability. and in those states people with preexisting conditions will find insurance becomes either too high priced or not available at all for them. they found about a sixth of americans are going to live in places where the insurance markets will destabilize completely. and one interesting thing, the number of people losing insurance again compared to what we would expect otherwise it went from 24 million to 23 million. that change costs $210,000 per-- 210,000 per new person

insured that is not exactly a great deal for the taxpayer. the senate is taking out a new bill thsm will throw this out more or less. so it isn't clear what the relevance of this is except to allow the senate to pivot away from the house bill. but the more the senate pivots away from the house bill, remember how hard it was for republicans to get anything through the house t makes secondary problems if the senate ever does get a bill that the house does not want to accept. >> rose: are there the same divisions in the senate as in the house as conservatives and more conservatives. >> yeah, 24r are a couple of things. the senate shall it is very slim in the senate, a much larger republican majority in the house than senate. the senate has more people who might come from the coverage caucus whereas in the house the key faults from the house freedom caucus, they wanted yet more people uninsheursed. more replacement to the preobamacare status quote. the senate is more people who are concerned about medicaid, mr people concerned about overall coverage levels. powerful senators folks like rob portman and others from ohio it also has folks like senator mike

lee, senator ted cruz who want a very conservative bill. so the range of opinion in the senate is extremely wide and the number of votes they can afford to lose are extremely narrow. so it's considered a harder task to get anything through the senate than it is for the house. the other thing is the senate as far as taking it a bit more seriously, the house you remember they voted on this bill before they had the-- before they. >> rose: or read it. >> the reading of it didn't come until. >> they voted on a bill that they didn't know what it did and didn't want to. the senate is not taking takingt attitude, they have taken a working group, trying to craft something. when you do that, you are faced with very difficult tradeoffs and it is very hard to get something right. which just taking it more seriously makes more a more difficult process in and of itself. >> rose: peter, how many hours do you think you have spent on health care legislation. >> i don't even want to estimate that. >> i would like to hear your estimation. >> too many, too many. >> rose: it was a principal concern of your first fowsh years. >> absolutely. >> rose: in the obama administration. >> the obama administration's first four years as a whole.

i wasn't there for all four but absolutely, a key focus. i think ezra is exactly right. what the house ledge-- what the score shows is how hard it is, it is easy to kind of talk at a bumper sticker level. when you get into the details in health care, there are all sorts of unexpected surprises. one of them was just you think you are creating a high risk pool for unhealthy people. but what you are actually doing is creating an incentive for the healthy people to go into that pool and then destabilizing the rest of what you are trying to do which is exactly what cbo said in this case. lots of unintended consequences, lots of complexity. this is not an easy topic and i think that is exactly what the house legislation has now definitively demonstrated. what?e: and the senate will >> well, the problem for the senate is the same basic constraints are going to be upheld. there is no magic here. if you start with the thought that it is not just that preexisting conditions are

covered, but that premiums should not be dramically higher if you are sick than if you are healthy. if you start with that principal, then you have to avoid people gaming, waiting until they get sick and then buying in at these commute rated premiums, so you need some kind of incentive or mandate or what have you. as soon as you do that you sneed subsidies for low and moderate income people or they couldn't afford the coverage otherwise. there is no magic here. and i think that is the box that frankly both the house and republicans find themselves in. they know they don't like obamacare but fundamentally, obamacare reflects those basic preaccepts which is the only place they can go. they effectively have no scwenlt place to go and so you wind up with either a somewhat incoherent plan like the house approach or what i suspect will konl out of the senate is a much later touch like senator cassidy and colins have proposed. lighter touch at the federal level and devolved much more responsibility to the states. >> rose: was the problem with

o bamentacare, and this is both of you, it got a lot of things right but it got several important things wrong, including the launch of it, because of what happened. >> everyone agrees on that. >> and that there were certain essential elements, it basically said, you know, if you like your insurance you can always keep your insurance. certain kinds of buzzwords lake that, that simply weren't true. >> look, there were a variety of. >> premiums did rise. >> here is the thing that is interesting and the congressional budget office which i used to run has taken a lot of heat for supposedly getting obamacare wrong and therefore it is supposedly discredit. they got it basically right. premiums in 2017 are within 1 percent of what cbo initially estimated when the affordable care act was tasked. coverage, people say oh, you know, the congressional budget office just blue it in terms of how many people would be on the

exchanges. that's right. cbo overestimated you had many people would wind up on the exchanges. but that's in large part because there were fewer employers who dropped coverage. it was expected that people, the firms would drop coverage, those people would go on to the exchanges. what matters is the net number of people without insurance. cbo in 2012 after the supreme court ruling that said the medicaid expansion would be up to the states rather than a requirement, said there would be 30 million people uninsuranced in 2016. the actual number was 27. it is pretty good. >> i am going to say what i think obamacare did get wrong. because i think it also helps illuminate where we are. among other things obamacare's subsidies were too small. there are more radical reform thases i would have preferred to the affordable care act but within the structure, you needed a higher willful of subsidies to just make insurance affordable, to make premium as fordable and make sure people could have insurance with deductibles that made that insurance usable to them. that is not a hard thing to fix. you can just add more money to the system.

and the system is not as peter said t does not come in over cost. if you are worried as republicans said they are, as disem krats say they are about deductible being too hoo, you can move in money, if you look at the american health care act, the republican alternative you can get very into the weeds on this, but what it basically does is very simple. it takes 600 billion dollars of money, that currently goes to subsidized insurance for poor people, and it moves it to give tax cuts to rich people. that isn't a loaded version of it, it isn't an arguably version. that is a literal statement of what it does. and there isn't as peter says magic to this. if you take money out, health care is expensive, health insurance in this country is expensive. making it cheaper is hard. there are ways to do it but it is hard, it takes time. if you want to make it more affordable to people you have to give them the money to buy a good insurance. if you take that money away from them, there isn't some fancy foot work you can do. what the republican plan is doing is taking $600 billion away, and then trying to figure out some way to keep people

covered. and you can't, you can't not square thattish sell there are tradeoffs in life. if you want to give that money as tax cuts, people will lose their health insurance in very, very large numbers. and that is where this bill is going. the thing to me that is a great betrayal of this is donald trump ran for president saying he was a different kind of republican. he said everybody would be covered. he said the insurance would be better. he said the dedublght -b8s would be lower, preexisting conditions would be plo tected and on every single one of these he in endorsing this bill is breaking his promise. again not an arguable breaking the promise, you can look at it one way or another, just breaking the promise. not going to cover everybody, deductibles will go up. there is something, there is a real betrayal of the people who thought they were voting for an economic populist here. and the more this sort of gets shatd owed up and obscured, i think it is bad. it is important that people are clear about what is happening. >> rose: yet at the same time the polls show, the polls show that up to this time, this people who supported him and who will be damaged by this, will lose insurance and lots of other

things, are still supporting him, at the same level. >> yeah. >> rose: it may change over months and months when the impact of things truly is felt. but so far, am i right or wrong. >> more or less right, at about 30% right now which isn't great. but i do wonder and peter would probably have more to say. >> rose: 38%. >> he is reasonably high with them but lost some support from them too. he is beginning to lose support from his core supportedders. something interesting you see in these special elections democrats are in, in montana and georgia, they are not talking about russia, they are talking about health care. that is what they are finding is polling high. >> rose: if they can find it in their own budget, russia they can't find a place. >> it is hitting the republicans hard. >> but don't forget, this is a proposal. it doesn't become reality f this were to become reality, and you are talking about for a 64 year old with 27,000 dollars in income, a 12,000 dollar increase on average in their net premium, the political reaction would be

dramically different. it's one thing when it is a piece of paper and a cbo thing. >> rose: three people at a table talking about it. it is a different thing if it is happening to you or you live in a high cost state, in alaska where the premium also skyrocket. the reality of that is different than the before the fact kind of. >> could we have a political revolution. >> i don't think this will become law, i don't think we will be able. >> if it dunts become law at the same time will there be political repercussions because as ben said the republican party promised that there would be a replacement of obamacare. >> that's right. i think that brings you back to this point which is, you know, as someone once put it, obamacare sort of is the republican plan it involves private insurance companies and exchanges and tax credits and all of that. yes, they have been saying repeal and replace the whl time. but again they have no place really to go substantively to back that up, in part because this plan sort of is their plan.

they just don't want to admit it. >> is there a place where they have perfected health insurance? >> could you almost not do it worse than we do it. i will start there. >> go ahead. >> there are a lot of interesting models out there. and different people like different ones. so i think the model most people think is the highest performing is france where you get a basic level of insurance and then the state gives some people supplementary insurance and other people buy it themselves. conservatives like singapore a lot and singapore is kind of interesting. they have a supercharge of individual mandate where they force you to save a large percentage of your paycheck to cover health bills and then they have a sort of universal catastrophic plan, not quite universe but most people buy into it. the thing that every one of these countries has in common, every single one is that in one way or another, in one way or another they set prices starl will centrally. every single country, just in a

developed country exsuspect for the united states. >> they set prices. >> the government says here is how much. >> here is how much an mri is going to cost. here is how much xanax is going to cost. no matter how they do t and that is the key thing that makes all of them cheaper. and when it is cheaper then you have a lot more room how you design insurance. >> rose: we just had ben in this, taping at this table saying what the republicans were horrified by is the idea of government setting the prices. >> right. and first of all, ezra is absolutely right. the reason that u.s. healthcare costs more than other countries, it's not as is often repeated that we do more here. it's that what we do, the prices are much higher. and so if we take for granted that we're not going to intervene directly in some big way just to set the prices because we have a different history and what have you, there is still so much we can do to try to get more efficiency out of health care that we're not doing. and ultimately if you want to

focus on driving premiums to reasonable levels, you've got to focus not on mixing up who is in the pool and who is not and the subsidies, you have to focus on the underlying cost of care. and we could do a lot more both on the price of it and also-- . >> rose: the efficiency. >> the efficiency of it, absolutely. by the way, we have been making some progress. the untold story of obama care is that you know when i was in office, it was widely said obama care fixes coverage but don't do anything on cost. the fact is we did everything we probably could think-- possibly think of. >> except regulate prices. >> except regulate prices. and the reality has turned out much better than i could have possibly hoped for. so for example medicare costs, no one talks about this, but medicare costs continue to grow much less rapidly than they have in the past, this year only up about three percent in nominal terms. and the result of that have been a much better, still not great

but a much better debt tra jectry for the whole country. there is a whole agenda there that this debate misses and that for most americans is far more important. there are ten times as many americans with coverage through their employer than on the exchanges. and for them what will matter is whether we are a attacking that problem. >> the only thing i was going to say here, responding, that what republicans are repelled by is the idea of-- . >> rose: mandating insurance hooter. >> that as well, cooers, government cooers in general. there is an honest there is a more honest debate we could have be having in this country. there is a consist ept, coherent and in some way is conservative case that if you regulate prices particularly in america where we are the single largest market for health services, pharmaceuticals, medical devices, all of it, that you would hurt innovation badly. and no matter whether it be cheaper, it wouldn't be worth hurting innovation. that is a fair argument. but what it implies is that the direction you are going is just

more expensive health care. that in order to have this world leading innovation, in order for the rest of the world to free ride off our innovations which they do, conservatives are right about that, that conservatives need to put more money into the american health-care system in order to be able to keep this going. it just costs more to do what we are doing. and liberals believe you should have single payor and medicare blirntion, at least in nonpharmaceutical areas nernts prices down, medicaid negotiations praise prieseses down, both cheaper than private insurance. that is the debate we should be having, between the liberal version of price regulation through government or all payor rate setting which is a cheaper way of doing health care and the republican version which maybe you need to spend more but you have more innovation, more consumer choice, you have more freedom. but we don't have that. people obscure. >> rose: have we seen whether the republican model of more innovation works. >> we do sub is i died diez medical innovation for the rest of the world. the issue is how and what kind of innovation. because we are have historically just paid for whatever comes

along and so we paid for even very minor improvements. on average innovation has been miraculous. but there is plenty of stuff, high cost that doesn't really do very much. and so the question is how do we move to a structure in which we're not just paying for more but paying for better, which is the only way to get the incentives for innovation correct. and we have been going down this path. the big risk at this point is that path has been lead by the government, by the centers for medicare and medicaid services that run medicare and medicaid, they've been moving that system away from just paying for quality peaceful and towards paying for value. actually we just conducted a survey of 300 investors and executives in which they expect 55% of the u.s. executives expect the majority of payments in the united states to be alternative value bailed versions by 2020. but the key question is, that requires continued government effort to push in that direction. and the current secretary of health and human services has

been quite agnostic about whether he would put any weight behind continuing down that path. it is absolutely essential. even if their version of health care, if you don't do this, ultimately nothing else you do can be affordable. >> rose: can you ever imagine this being show looking at this principles of how you see a free society, you know, looking at the principles of how you feel about a civil society and a society that is humane, that these reconciliations will take place, so that we will have a health-care plan that works in both attacks access as well as cost? >> i would like to believe that on the 15, 20 year time frame, and i think that the affordable care ak, obamacare put us on this path. and if hillary clinton had won we would be traveling along it more steadily. >> rose. >> and that on the 15, 20 time

frame, we are going towards access and coveragbeing more or less not completely solved but much improved. i do not think american health care is going to bees achieve as in our competitor nations, in any near term time frame. >> because of the regulation. >> no, because of the absence of regulation but even if you put it in today, past dependence is a powerful thing. would you vay tremendous amount of disruption in the health care if you tried to cut cost by 20% or 30% that quickly. i would like to believe we could get it further down, i think we can do a better jb than we are. can we go towards a more humane system, i think we can, will we, i think we will. i think are you seeing it right now, if there is anything in this health care debate which has been extraordinarily depressing, it gives a little hope, it is that republicans, there is a different base line in this country now. you are supposed to protect peop preexisting conditions. it is that of 23 million people who would have had insurance otherwise don't have it. i think the fundamental question of what is a government's responsibility to its citizens, what is our responsible to each other, has moved towards being a

little bit more solved. you see folks like senator cass i hade and snow in the senate who take it a lot more seriously. i don't think it is a great moment for this conversation. but i think compared to where we were 10 or 15 years ago, before we passed the affordable care act and before these understandings were built into law, we are at least at a better base line from which to build. >> you clerly agree with that. >> i'm an optimist here. i think in ten years we'll have a heal care system which is much more digitized. it's much more personalized in the sense of not just something works on average but works for you, mr. rose, or works for you, mr. klein, in which scheduling and billing is not as annoying and tedious as it is today. and the good part of all the inefficiency that exists in health care today is that we can slow the growth rate or even maybe reduce costs but at least slow the growth rate of costs without harming the quality of the health care that people get

by bringing those inefficiencies out so i'm a big optimist. >> rose: thank you, thank you very much. thank you for joining us. for more about this program and earlier episodes visit us online at pbs.org and charlie rose.com. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

>> rose: funding for charlie rose is provided by the following: bank of america, life better connected. >> and by bloomberg, a provider of multimedia news and information services worldwide. >> you'

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