captions paid for by nbc-universal television this sunday, has the president retaken control of the health care debate? >> the time for bickering is over. the time for games has passed. >> but republicans aren't backing down. >> this isn't the way that you get people to cooperate with you. you don't say that if you disagree with me, we are going to call you out. >> is there room for compromise or will this be a partisan bill? how will reform be paid for and can it all be done this year? with us exclusively, assistant majority leader, democratic senator, dick durbin of illinois. republican senator john cornyn

from texas, former democratic national committee chairman, howard dean and former house speaker republican newt gingrich. then, the loss of civility in washington. >> you lie! >> is the political middle ground gone for good? plus, the economy. a year after the financial meltdown, why mounting job losses may be the biggest challenges of all facing the white house. insights from the roundtable, anchor of "street signs" erin burnett, "thyme" magazine contributor author joshua cooper ramo and nbc political director and white house correspondent chuck todd. but first, the debate on health care. joining us, senators john cornyn and dick durbin and former house speaker newt begin river and former dnc chairman, dr. howard dean. good morning to you.

a lot to get to. we'll start with senator durbin. in light of the president's speech this past wednesday, what specifically will be achieved on health care this year? >> i think we can pass health care reform. i really believe the american people are ready for it, we are closer to victory than we have ever been, and i hope we understand that failure to pass this health care reform this year will make things overwhelmingly worse. those who are opposing us, those who are criticizing us, really don't have an alternative. they would stay with the current situation, which leaves families with health insurance, with the uncertainty of its cost and the uncertainty of whether coverage will be there when they need it and millions of americans with no protection at all when it comes to health care insurance. we can do better, and i hope that the republicans will join us. we have opened the doors to them in the help committee in the senate, they had hearing that is went on for hours and hours and chris dodd chaired it, they accepted 161 republican amendments at the end of the day, more than half the amendments were from the republican side and still not a single republican senator would vote for the bill.

we need their help. we'd like to have it. >> are we talking about large scale reform achievable this year? >> yes, i believe it is. we've got to understand that just taking small steps at this point won't stop the obvious increase in health care premiums, which are making it very difficult for individuals and families to pay for health insurance and a lot of businesses are dropping health insurance. we also have to understand the insurance industry is fighting this tooth and nail. they understand real health insurance reform is going to make sure they can't be denied coverage for pre-existing conditions, there won't be caps on the amount of money spent in a lifetime, the health insurance companies won't abandon you when you need them the most. those are the kinds of reforms americans desperately need. >> the white house is sending a no so subtle signal, the vice president saying on the "today" program this week, there will be a bill by thanksgiving. will the senate, will the congress meet that deadline? >> i believe we can and we hope that we'll have republican support to do it. despite the best efforts of

chris dodd on the help committee as well as max baucus on the finance committee, only three senators have stepped up to this point. i really hope they will be with us and they will work with the finance committee to pass a bill, but our doors are open, as the president said, anyone who would like to step forward from the republican side and help us write the bill in a constructive, positive way, we need their help. >> senator cornyn, is this a democratic only bill? >> well, i hope not. republicans would like to see health care reform to bring down the cost and make it more accessible to more people who currently don't have health insurance. but i would respectfully suggest the president first has to convince members of his own party with his proposal. he's laid out what he called his plan during a speech before the joint session. no one has seen his plan and what he described is not reflected in any of the bills that have been voted out of house or senate committee so far. he has at least 13 senators by my count who disagree with the public option or government-run

plan and about 90 members of the house, either blue dogs or conservative democrats or liberals who disagree with what that bill should look like. we would like to work with the president and democrats to try to come up with a common sense solution. i would suggest that this is a case where the 80/20 rule applies, that 80% of this we could probably agree with as long as people would agree to leave the 20% we can't agree with. >> senator, you're being a lot more diplomatic here this morning. you went much farther and said the president paid lip service to the idea of bringing republicans onboard? >> i agree. i think he has. because when he's talked about waste, fraud and abuse, something i know gingrich has worked on, people want to see exactly what the savings can be from that before they agree to some big plan, the big expansion of government, unfunded mandates on the states through medicate expansion and huge cuts in medicare, which is currently unsustainable. >> but you said only lip service and the white how says, wait a minute n the president's speech

and the plan, he is giving a nod to malpractice reform, expanding insurance pools, that was senator mccain's idea during the campaign. the idea of capping the tax exemption on employer plans, fiscal triggers, the white house says when do republicans stop moving the goalpost and say he's actually hit something here? >> it was a good speech, but he said, he described what he called his plan. and so far, we have not seen his plan. there's a difference between campaigning, giving a good speech and actually governing, and i think we are seeing the disconnect here because the president needs to work with us to make hard decisions in order to solve the problem. >> you can see the republican ideas he outlined in the speech? >> those are good ideas. i would like to see them reflected in legislation. >> if they are, that's something you can vote for? >> i certainly would support those. i'd like to see the entire picture. i don't see how to cut $500 billion out of medicare, which is currently scheduled to go insolvent by 2017.

i disagree we should raise taxes on small business that is are primary job creators in our economy, so let's see what the whole package looks like, but those are good ideas. >> let me bring in gingrich and dean here. dr. dean, let me start with you. how is the president doing leading this fight for health reform? >> well, the democrats did two things he had to do. he showed he was a strong leader. and presidents, regardless of the issue, the americans want to see a strong leader in the presidency. that's the most important thing. the second thing is he unified the democrats and he's going to have to have those. at the most, we are going to get three republican senators and probably no republicans in the house to vote for this, so the democrats have to be together. >> can you say united democrats yet? you have 10 to 12 moderate conservative democrats saying, we are not there yet. >> well, my vote count, we have 51 volts in the senate to pass health care reform with the public option, so, you know -- >> that would be ramming it through. that would be a reconciliation strategy and -- >> look, in this audience, i think we can talk about ramming stuff through. newt has been the speaker, republicans and democrats both

ram things through. at the end of the day, the american people want a bit bill. they are not going to care if its reconciliation or ramming it through, what they want is a decent bill that makes sense to them. >> let me get an opening thought from you, speaker gingrich. you said this week the president had to make a decision, show up as a president or partisan. who showed up? >> well, i think he was 80% president. about 20% partisan. i think the partisan part didn't help him. i think what he did on monday giving the campaign speech didn't help him, but the big difference -- let me go back to what senator cornyn said, i can go through the president's speech and find a lot of things i like. then i go to the house democratic bill and i don't find a single one of those things reflected in the legislation. now, they literally had voted down efforts to make sure that health insurance only went to people who are legally in the united states. so they would have to go back and have very significant changes, which i think would split the democratic caucus. i think part of the reason you saw some real anger about the speech is he kept describing things that had been explicitly

not put in the bill on the house side and the house bill has no resemblance to the president's speech. whether or not he can get speaker pelosi to agree to rewrite that bill, i think, is very doubtful. so i'm not convinced yet, as president, that he's capable of leading his own party. >> i'm going to disagree with that, if i can, for a second. first of all, in the bill, it says undocumented aliens can't get health insurance. now, is that saying they have to show proof of citizenship. we are talking about small details. the other thing is this bill is remarkably helpful to small business. small business is less than 25 employees in the senate bill and they don't have to pay anything for health insurance ever again. less than half a million dollars in the house bill, and the bluedogs put this in. payroll, don't have to pay

health insurance ever again. that's a huge boost for the people who create 80% of all the new jobs in america, and that's never talked about. this is a big boost for small businesses. >> i want to get into the issues. senator durbin quickly here, on the vote count, do you have senator snow? do you have 60 votes? >> listen, i'm not going to presume any republican senators at this point. senator baucus is working with grassley and snowe as well as others. i spoke to him over the weekend and he's reaching out to other republican senators. some of them understand this is a historic opportunity, in terms of the democratic side, we are going to work closely with our members, too. they have to be satisfied this bill will help them, help their states and this nation, but the fact is we are not going to miss this opportunity. we invite the republicans to join us for this historic opportunity. if they do not, we are still going to go forward. >> let me ask you about a key policy provision here taking up so much oxygen in this debate, that is the public option, the idea of a government plan in these exchanges that would compete with private insurance plans. the president stood behind the idea of competition, keeping the insurance companies honest, but this is what he said about the public plan wednesday night. >> the public option is only a means to that end.

we should remain open to other ideas that accomplish our ultimate goal. >> senator, that was an important statement. is the public option now buried and gone? >> no, it's not. i support the public option, but i also think the president stated it correctly. what we are looking for is real competition. understand the health insurance companies hate this public option, as dale bumpers used to say, like the devil hates holy water, because it means there's going to be a force in place there that is going to put in competition and keep costs under control. the so-called lewin group happens to be an organization owned by the united health care group, a health insurance company, so they have been discredited. the fact is we understand that putting in a public option means that people will have a choice in markets where there are only a handful of private health insurance companies and people have nowhere to turn. >> but, senator, it can't pass the senate, can it? it can't pass the senate. >> i wouldn't go that far.

i would say at this point the house of representatives includes a clear public option. i don't know what the senate bill will look like coming out of the finance committee, but we have to have, at least be true to the principal. the president said to make sure there's competition for the private health insurance companies. these companies do not want that competition, but if we don't have it, the prices won't come down. >> but dr. dean, white house officials i talked to have been very clear saying the left and the democratic party has overshot the runway here, overstating the importance of the public option. did the president put it away? >> i don't think so at all. i'm with dick on this. look, the president said yesterday that if you can find another way around to control the insurance companies costs, then that would be fine. there are two countries in europe with universal health care entirely run by insurance companies, but they treat the insurance companies like regulated utilities. if they would prefer to be treated like regulated

utilities, we would drop it in a heartbeat. >> first of all, the president can't keep his promise that if you have what you like now that you can keep it with a public option or government-run option, it is not just the liuen group, they said depending on the final shape of the plan, it could be $8 million to $10 million, as high as $110 million. you cannot keep what you have now if you like it, so the president can't meet that promise. secondly, our goal ought to be, let's give the american people the same kind of choices that members of congress have when it comes to buying health coverage. right now there is no public plan for members of congress. you get a choice between various insurance coverages that suit your family's needs. and at a price that you want to buy it at. so, i think that ought to be our goal. this whole ideological fixation on the public option is just that, it is not a practical solution to the problem. we are ready to work with practical solutions to cover people, to bring down the price, but not a government takeover. >> speaker gingrich, let me bring you in here, shift a little bit about the speech on wednesday night.

and that is the tone and the tenor of some of the opposition to this. congressman joe willson has gotten so much attention this week for his outburst this week calling the president a liar in the house chamber. does he galvanize republican opposition or does he hurt the party's image? >> well, i don't think either one. you may remember that in 2005 democrats booed president bush when he proposed social security reform. there were dozens of democrats booing him. didn't seem to be a very big issue that year. the fact is the country is looking at the speech and the country is asking about the speech. and the good example is what howard dean just said. when you say to me, no small business under 25 employees will ever again have to buy, pay for health insurance, how are we going to pay for it? i want to know who's going to pay for it.

the company is facing $9 trillion in increased deficits. the average american is thinking, life doesn't work like this. the idea that every small business in america is going to be able to somehow magically wave a wand and we are going to be given free health insurance? >> i didn't say free. >> then where is the money coming from? >> the way the bill works, there's a government subsidy and you choose what kind of health insurance -- >> where does the money come from? who is going to give the government a money? i have a couple small businesses and my small businesses could easily meet this. as a small business owner, i would love to have free health insurance. >> it is not free. employees have to pay something for it. >> i want to get to the deficit question. does he hurt the image of the gop or become the face of the opposition? you are helping to run the campaign for senate republicans next year, what would you like to see him rank? >> there is a time and a place for everything, but that was not the time and place for that comment, but the democrats have done a pretty consistent job of trying to demonize people who

show up at town halls, anyone who disagrees with their proposal. this is not the time to be demonizing people or calling people names on either side, this is a time to work together to solve a practical problem and we stand ready to do that if the president will meet us halfway. >> let's talk about the deficit. the president made an important pledge during this speech on wednesday. >> i will not sign it if it adds one dime to the deficit now or in the future, period. >> senator durbin, a hard pledge to meet when you have house legislation that already does that. it already breaks the deficit. it can't be paid for over ten years according to the cbo. here's a "washington post" editorial this morning, having to do with where the details does the math work. when politicians start talking about paying for programs by cutting waste and abuse, you should get nervous. when they don't provide specifics and when the amounts under discussion are in the hundreds of billions of dollars, you should get more nervous. how does this get paid for

without adding to the deficit? >> members of congress should take the president at his word. he will not sign a bill that adds to the deficit. he walked into the white house and inherited a $1 trillion-plus deficit from the republican administration because they had fought a war in iraq they didn't pay for, they gave tax breaks to the wealthy they didn't pay for and had a prescription drug program under medicare they didn't pay for. this president said that's over and members of congress should take that seriously. i disagree with "the washington post." the fact is under medicare now we are providing multi-billion dollar subsidies for manager called medicare advantage. the health insurance companies said to us, let us run medicare. we can show you how the government is not doing it efficiently. we can do it at a lower cost. guess what? it's not at a lower cost. we are subsidizing private health insurance companies to provide the medicare benefits we can provide at a lower cost. that has to change. that subsidy has to end. that is the kind of savings that can come back into the system to help small businesses to provide health insurance and help those

with lower incomes pay their premiums in america. >> speaker gingrich, how do you keep that pledge? >> listen carefully to what he just said. he just said to the senior citizens of america. we're going to take hundreds of billions of dollars out to of medicare and divert it to people who aren't senior citizens. this is part of why you are seeing the town hall meetings. people who run medicare in rural america, they are getting a quality of health care they never got before. i just got an e-mail from a clinic in lacrosse, they are on medicare advantage. they don't want to be forced to give this up. it is interesting, the president says on the one hand nobody has to give up anything, but by the way, if you are a senior citizen on medicare advantage, we are going to take a couple hundred billion dollars away from you. i think this section you show to the president is an example of why we are in the kind of debate we are in right now. i don't believe most americans believe it's possible to have the plan he wants and not see the deficit go up, unless he's going to propose in the middle of the deepest recession since the great depression massive tax

increases, which would further deepen the recession. >> first of all, the money is not being taken away from senior citizens, it is being taken away from the insurance companies who are responsible for a lot of the problems in the first place. secondly, it pains me to see one of the great optimists, who is speaker gringrich, the thing we have in common is america can do anything. every other democracy in the world has a health care system that covers everybody and we don't. of course we can do this. how ridiculous. >> but dr. dean, you said when runs for president in 2004, people have to understand that you've got to pay for it. if you want that coverage, you have to pay for it. how do you not raise taxes? >> two-thirds of the money -- when president obama talks about taking $500 million out of medicare, that's not taking $500 billion away from seniors, that's taking the waste, the republicans have been talking about it for years, the abuse that the republicans have talked about for years, the stuff that the insurance companies are getting for profit over and above what their

services are, two-thirds of the bill is paid for with savings. if you don't think the savings are there, how come we spent 17% of our gross national product on health care and the canadians, the british, the french all of whom insure everybody spend 10%. there is so much fat in this system, we can pay for it. >> we have to be honest about the cost. so far we haven't heard the president be clear about the cost. the senate budget committee estimates that the house bill will cost not $1 trillion but $2.2 trillion. the health committee bill, the senate committee bill is estimated to cost $2.2 trillion over a full ten-year budget window. we need to be honest about what the cost is, what the pays for are going to be in terms of cuts and existing programs that are already very fragile and not going to be solvent by 2017. i think that is what is making people nervous. that's why people are speaking up and expressing their concerns. >> senator durbin, you are in the senior leadership, can you

see unequivocally that the taxes won't have to go up in order to pay for a $900 billion health care reform plan? >> of course not. that's irresponsible. the president said if we need new revenue, and some will be needed, it will come from those who can afford to pay. he has talked about tax increases for those making over $250,000 a year. a tax increase on health insurance companies for certain policies they sell. those are the realities of the situation. and let me tell you, i have heard the song before from mr. gringrich and others that we just can't do it. that america is incapable of doing it. dr. dean has it right. this is our chance. if we don't do it this time, we won't have a chance in my lifetime and the situation will get progressively worse. let us face up to the reality and do it in a responsible way. >> let me bring up an issue that has a lot of people worried. i have spoken to some people this week who asked me, they are trying to figure out the details of the plan and say, let me get this straight, if i'm not old enough yet to afford medicare, the president says i've got to

buy health insurance. he's going to mandate that i buy health insurance. maybe i've lost my job. and can i afford what it is he's suggesting? can i afford to buy insurance if i'm mandated to do so? the national journal had this headline in an article it had, at what price? it's one thing to require everyone to have health insurance. quite another thing to make sure they can afford it. speaker gingrich, is that a real concern here? >> yes. if you look at massachusetts, they now have the most expensive health insurance in the united states. it was an interesting noble experiment and it will turn out to be very expensive. james carville had a sign in 1992. it is the economy. this white house ought to put the sign up in the oval office. everything they do should be designed to get the economy growing again, to create jobs again, and what they are doing

is layer iing everything, they call it reform. i think it is very dangerous. the reason small businesses aren't excited about this opportunity for free healthcare is they figure out who is going to pay the tax for the free health care. it is the small business owner who will have his or her taxes go up dramatically to pay for the government's free health care. >> the point of it is if you are forced to buy insurance as a family, and if you can't afford it, the government says, okay, we are going to give you subsidies and pay for it for you, but in order to make the bill less expensive, you have to cap those subsidies. you can't do it for everybody, but there's still a lot of people who can't afford it. >> we have universal health insurance for everybody under 18 years old. the reason we did that was we didn't use a mandate, we used medicaid and raised the reimbursement to primary care physicians, got a waiver, and for $480 you can pay for -- you can pay a premium and every kid in your family will be insured for under 300% of poverty. people over 300% don't get a subsidy.

that's being talked about in the bill. let me say one thing about massachusetts, it was put in by a republican governor and a democratic legislature. i think the jury is out. i agree with newt. the health care is too expensive, but they are down to 2% uninsured. that's comparable to foreign countries as an extraordinary achievement. one of the reasons it's so expensive is they didn't have a public option. if they had, the costs would be under better control. that's my argument. the speaker will probably disagree with that one. but the fact is, there are a lot of these state experiments beginning on, some of which are successful and some that are problems and with things needing to be changed around. we have to learn that we are going to have the exchange development that they developed from massachusetts in the big bill, that's a good idea. >> ultimately. senator durbin, to keep costs under control, can you achieve universal coverage? >> i think we can get close to it. i also want to add here there's a hardship deferment in the bills being considered for those who in extraordinary circumstances cannot have health

insurance and there's also a cap of 13% of your income to pay in premiums and help for those who can't afford it. we are doing everything in our power to bring everyone under the tent because understand the current system, the uninsured people today show up at the hospital sick. they are treated and their costs are passed on to the rest of us. the average family pays an additional $1,000 a year in premiums just to cover the uninsured. >> let's be clear what we're talking about. if you're in your 50s and you can't qualify for the subsidies, under the senate plan, the baucus plan, as it's called, the insurance companies can charge you at that age a higher premium than they would a younger person without insurance. >> that's a big problem. >> that's a big problem you said, doctor. >> you cannot do that. we did in our state 15 years ago. it works great. >> finish the point, senator durbin. >> well, i can just say the baucus plan is being debated and goes back to dr. dean's point. the rating questions are important.

gender questions and questions of age and whether or not you smoke, those are important questions, but the bottom line is we have to understand everybody has to accept the personal responsibility of health insurance. if you are opting out and saying, i have to exercise my freedom here, i'm not going to have health insurance and then turn up sick, guess who pays for it? the government or other people who are insured. we've got to bring everyone in the system for their own good and the good of everyone in this country. >> i just have a minute left. senator cornyn, what are the consequences of doing nothing here for the democrats and what's the upside as you look down the road in the midterm elections for republicans? >> i don't think doing nothing is an option. and, indeed, we have said, i've said here today, we have probably 80%, whatever the number is, of things that we can probably do in terms of insurance reform and providing lower cost access to health care providing coverage, but i think dr. dean makes a good point. what works in vermont in a population, a small state, may

not work in a big state like texas with 24 million people with a large number of people who are not american citizens who are living there. and who would not be eligible for this plan according to the president. so one-size fits all is part of the problem and we ought to offer flexibility at the state level to have state-based insurance exchange, to let people boy and have the same choices that members of congress have among private plans and not undermine the private insurance market and provide a pathway ultimately to a single-payer system, which is my concern and i think born out by some of the experts. >> senator durbin, the political consequences for democrats if reform does not get through this year is what? >> listen, this president has committed to this issue like no other president before him. he said he'll spend every penny of his political capital to get this done. that's the kind of leadership we need and the feeling we left from the house chamber the other night after the speech. we are going to pass health care reform.

we may not have another chance. we have to seize this opportunity, otherwise we are going to have overwhelmingly negative results if we don't do it. >> before you go, the other issue is afghanistan that is dividing democrats. senator levin was quoted as saying this in the new york sometimes, the leading senator on the arms services committee chairman carl levin said until the united states speeded up the training and equipping of more afghan forces. is there a split? do you support sending more troops to afghanistan? >> no, i don't. i agree with senator levin. i think at this point sending additional troops would not be the right thing to do. >> has the president made a determination that is politically untenable to try to get congress approve sending more troops? >> i can't say that, but the president has not asked for more troops, at least not to my knowledge. that the point, we should follow senator levin's suggestion and let the afghans bring stability to their own country.

let's work with them to make that happen. >> that will be the last word. from health care to afghanistan, thank you very much. up next, the fight over health care reform rages on while the obama administration also struggles to save the economy. insights from the political roundtable, erin burnett, joshua cooper ramo and chuck todd only here on "meet the press."

inside the politics of health care and the economy after this brief commercial break. ;=

well come back. we are joined by cnbc's erin burnett, nbc's chuck todd and author and "time" magazine contributor joshua cooper ramo. chuck today, the politics of this thing, is the president back in control of this debate? >> well, i think he is in more control. he did you night the democrats. i think if he had the single most important thing to do at the speech on wednesday was to get democrats rallying behind him, and i think that he did accomplish. the most fascinating thing, and i go back to the roundtable, senator john corp nip, a member of the republican leadership, he's not the first one over the last couple of days to say this, but suddenly, it is a new talking point about we agree on 80% of what the president said in there, and house speaker newt gringrich said the same thing. it is as if the republicans decided, okay, they have made

their point, they obstructed or whatever you want to call it over august, now they have to shift gears a little bit and look like they want to work with them. the question is, you know, is there really a middle ground? is that a real thing or is this a political tactic because republicans realize you can't be zbeps against something. you have to show some give here. it is interesting to see the shift in the tone of republicans, at least in leadership. >> in fact, cornyn is saying there were good ideas the president supported. he said they were republican ideas, but he doesn't see them in the legislation. whether he is ready to sign on to that might be a stretch. >> just to see the rhetorical shift shows you it is not good politics to be the party of no. you can't do that. >> let's talk about organizing democrats or rallying democrats. what about the republicans here? one of the headlines was joe wilson calling the president a liar. he did apologize once the leadership made him do it, and he released this web video in the concept of raising $1

million. this is what he said in the video. >> this occurred after a month of town hall meetings and deeply emotional conversations. i had with constituent who is are as passionate as i am agent this issue, who fear a government takeover of health care will reduce the quality of care and increase the cost of coverage. on these issues i will not be muzzled. i will speak up and speak loudly against this risky plan. >> he is not the only one. look at the streets of washington, d.c., yesterday. a huge crowd of protestors protesting the president's health care plan, other government policies. they see this as the expansion of government under president obama. also, people carrying signs, erin burnett, saying "you lie." there is some grass roots organization in rallying behind, not only congressman wilson, but the opposition as well. the republicans are united on this one. >> i would say so. from the business perspective,

newt gringrich said to focus on the economy and getting jobs, but health care is central to that and getting it done is crucial. 58% of small businesses said they didn't give raises last year because health care costs were going up so much. you look at some of the numbers for big companies and they are saying 30% of them are going to play people off because of health care. this comes when incomes are back to levels of 18 f 1977. getting something done is crucial and maybe the step you are talking about that the republicans are starting to see there's going to get something done moves us in the direction of getting something. >> does this move galvanize republicans? >> i think he did. it is hard to imagine his apology was real when you look at the web video, the fact that he says, i will not be muzzled, the fact he would not go down to the well of the house floor and apologize. it is interesting, he's almost going to call the bluff of the house democratic leadership who said we are going to introduce a new resolution. whatever. clearly, wilson has decided he's

going to grab on to this excitement that is there among about 10% to 15% of the republican base. the question is, how does the republican leadership balance keeping the sort of anger on the right wing. we saw this of the democrats when the anger was on the left, but figure out how to channel the anger on the right into something that's productive. >> josh cooper ramo, the big question on reform is what is the nitty-gritty here and the president had this response in talking about the areas of disagreement on wednesday. >> while there remains some significant detames to be ironed out, i believe -- >> that was the understatement of the night. "the washington post" on friday details still lacking on obama proposal white house unclear how some far-reaching goals would be met. >> the president has this very ambitious outline, he has to stick in the details, but it is vital he get this thing passed. this is a challenge for him. he has to find a way to reach

compromise to allow him to look like he is leading. it is not a matter of winning, it is how he comes out of this what is important. >> the president provided a road map, but there are crucial details. you heard some of it on the idea of the mandate, how you subsidize people to keep the costs down. ultimately, as one leader advisor said this week, everything in this debate is about cost. >> well, the only good news for the white house, i think, as the details are being ironed out n a sense, the rest of this month, they have the opportunity to fake take the fous to cuss off health care. later we are going to talk about economy, and this is the economy week as far as the white house is considered. the white house should have a sign up, ram emmanuel does that say. he yells at a lot of reporters and says we are focused on the economy every day because they do know ultimately they are going to be judged on that. taking the spotlight off health care this week when it comes to the economy, next week at the u.n. general assembly and all

this stuff gives breathing sfau space to congress to work on some of the details. if that's the case, if that happens, that probably pushes the ball farther down the road than if we were all on top of him every second. >> it is about the economy, it is about paying for health care reform as i just said, you had a town hall meeting at cnbc this week with secretary treasurer tim geithner and the question on taxes came up front and center. >> so you cheered for the president last night? we are going to do health care reform without adding a cent, a dollar to our future deficits. and we are going to make sure we it in a way that helps bring them the growth and long-term health care costs so that the long-term deficits are lower. it is going to be a hard thing for us to do. >> will taxes go up? >> i want to -- let me do it this way. i want to do this carefully. >> as long as you answer the question, you can do it any way you would like. >> talk about the squirm there, erin burnett. did he answer the question?

>> he tried to not answer the question. and in doing so, i think he actually did. what he did was come out and say, we cut taxes for 95% of americans in the stimulus bill and the burden of tax increases, if they come, should be on the remainder, i.e., the top 5%. it is clear taxes are going up. and the question is when. maybe chuck has a better sense of timing, but what i hear is, yes, they are going up. maybe through the mid-term elections, but not through the full re-election cycle, so that's where it is coming through. if you look at the deficit and taxed every in the top 5%, you wouldn't get rid of it. the math doesn't work and the tax increases are going to come in some way, shape or form. >> where can the president stick to the pledge of not taxing the middle class when it comes to health care? >> the overwhelming lesson of all the reform projects is it is impossible to do. that's why the specifics are so important. >> the public option of this, before we take a break here, is this dead and gone, chuck? or isn't it? >> no, i think this trigger, the

idea of the trigger, and to explain that, the threat of a public option so it would never go away, but the threat of the public option, of the government starting an insurance plan to compete with private insurance. if it always is there, i talked to one policy guy inside the white house who said, when you actually have a gun to the head of the private insurance industry, they do keep costs down. they do act like good citizens, good, productive citizens. if you take away the gun to their head, they don't. they cite a couple times of when it happened in the early '90s and in the '60s it happened. i think the trigger is where this thing is headed. look, if olympian snow is the one who suggested it, that is how they get to 60 votes. >> when we come back, we'll talk about the future of the financial system in wake of the financial collapse. we'll be right back and do that after this brief station break.

and we are back to talk about the economy. as much as we have been talking about health care, some might say it is unemployment that is america's dirty little secret. joshua, you have written the cover story for "time" magazine. this is the cover, out of work in america, why double-digit unemployment may be here to stay and how to live with it. this is what you write, it is very interesting. america now faces the direst employment landscape since the zpregs. and if the result is that we're stuck with persistent 9% to 11% unemployment for a while, a range whose mathematical konguence with that of 9/11 -- like that 9/11, this one demands a careful refiguring of some of the most basic tenets of national policy. and just as the shock of september 11 prompted long overdue and still not settlemented -- a client that

has been deteriorating for years. this is scary stuff. >> it is terrifying and resembles a lot of the economic crisis, things that defy what the experts tell you. the best prediction when coming up for the stress tests for banks was 8.9%. we passed that in the spring. this is another one of these things that just seems to be cascading beyond control. last week we had the dubious honor of passing europe in terms of unemployment, that's long been the pride of the united states, at least we are not europe. what's going on seems to be a fundamental shift in the economy and why jobs are created. that suggests things could get much worse. >> a frightening prospect on one, erin, that the white house has not anticipated. they put out their own projections on where unemployment has been and it exceeded that. as they talk about 4 million jobs created or saved, they are not dealing with the persistent unemployment that would lag behind any recovery? >> right. if you look at transforman

periods, you saw the big shift in jobs. that's what it seems like they have tried to identify, we are in the midst of one of the shifts losing manufacturing jobs since 1980 this has been a very long process. so what comes next? they identify that as alternative energy. it will come from retraining, but there's a huge question mark as to whether that's possible. you look at where the leadership in that area is coming from, it is clear it is coming from china, not just the jobs, but the invasion has come from there. it is alternative energy and it is very clear how we capitalize on that. >> it is likely to be unsufficient. in the three period of the 1930s, the 1940s and today, the main difference between the 1980s and the other periods was the '80s people got jobs. today most of the jobs people lost are never coming back. we are not seeing any attempt to deal with that. we need a massive rethink of the way we deal with unemployment in this country. people talk about this idea, what does obama do after health

care? i think it has to be employment. you have to have some imaginative approach to change what it means to be unemployed in america and change the way jobs are created. >> not just jobs training. >> one of the problems, you look at the retraining stuff, you train people for six months to get out of a job they are out of in one or two years. you have internships, the manage high-level skills, it is a different concept of the way the economy works. between 1999 and today, there have been no new net jobs in the economy, and the fed is calling for limited job growth in the next five years. you are looking at 15 years without job growth. that's not a way to have a powerful country. >> the political challenge here is just like health care, when you talk about the economy, fundamental change is so difficult to pull off politically. in other word, in health care, getting to the root cause of what's driving health costs upward. in this way, the president is facing in an election year 9% to

11% unemployment, that's a huge problem. >> it is, because it is an easy symbol to grab onto. you go into politics, unfortunately or fortunately, it is the simple thing that an elect rat digests, and that will be the similar tell thing, this idea of unemployment. that's why every election expert you talk to when they predict 2010 or 2012, you tell me what employment is and i'll tell you how bad the margins will be on either side. look, they know it. i go back to something, it is like, i went to one white house official and said, okay, so this is health care week and he says, no, it is always the economy. and you know the person i'm talking about. it is always the economy. it is always it. it is always it. but when you go to this thing in this crisis about unemployment, it is not just that we have this -- it is because more people are trying to get into the workforce. don't forget, people are ageing to a point and people are working past 65. that adds to the problem.

you know, there's another issue here right where people are staying in their jobs so younger folks can't replace them, so this is -- >> this is one of the records we hit last week, the record number of people with long-term unemployed. people out of work for more than 27 weeks. we have never seen that number before. >> when you take the unemployment issue and go back to the tax issue, that's when you say, what are we going to do? we are projected by the obama administers's numbers to spend more than we take in through the year 2019. we are expected to borrow 40% of our budget next year. taxes are only accounting for 27% of the budget, so as you come into the election cycle and are looking at the unemployment rate so elevated and the fiscal situation, it comes down to this. are you going to be forced to raise taxes in the midst of what is a severe unemployment recession if not more? >> the president is on wall street tomorrow giving an important address about the future roads of the road for wall street. here's the cover of the magazine. one year on, what's changed? joshua? what has changed? >> not a whole lek of a lot in

terms of the risk taking, the culture of risk taking. we are talking about the reregulating of industries. the financial industry is a great example. you have the same activities going on occurring that were occurring a year ago. they are not easier to regulate, the exposures throughout the system are as large as they have been. and the risk we face today, even though we are not in the financial industry, because we are networked together are shared. what has changed, reality, is not much. >> it is interesting, some conversations with officials of treasury, they actually think the biggest risk flight is the banks are taking too little risk, so it is very unclear. that's their perction. obviously, when you look at it from the ground, i would wld seem what you are saying is in a sense very little has changed, but the reform plan that they are pushing through, i think that's what the president is going to be talking about. it is unclear what would change as a result of that. there seems to be a lot of argument over who is going to get the regulatory authority as opposed to what exactly they are going to regulate. they say we are not going to

have systemic risk, but nobody knows exactly what that means. >> and a year ago, we were talking about housing. are we in much better shape in terms of housing? >> i think that's the elephant in the room. it has really gone on the backburner in terms of the dialogue, but it is crucial. some say housing prices could do gown another 25%. we found out all the mortgages that were supposed to be modified, bank of america is only modifying 7% of the eligible loans. we have a real issue in housing. right now you are looking at potentially half of american mortgages under water when the mortgage exceeds the value of the home within the next year and a half. combine that with a lack of income growth, it is hard to see how the consumer gets out. maybe you know more about this than i do, the white house talking more about it and extending the housing buying credits. >> the president has admitted that is not working the way they designed it, but two things on the financial regulation that i find fascinating on the political front. one, the administration wrote the bill. you know, how they bragged

about, oh, they are going to let congress -- one person said, look, congress doesn't have the capacity to write a really smart financial regulatory reform bill. so that was number one. the second thing about it that's interesting is just how i think you are going to see the president latch on to it because republicans, everybody seems to agree, you have to have more regulation on this front, but the one unattended consequence is going to be this, congress a lot of times reforms the last problem. and it is always that unattended consequence, what new loophole is created. we seen it with campaign finance reform for years where congress is always reforming the last issue and doesn't know how to anticipate the next issue. >> all right. well, my question about new york tomorrow for the president is, does he call derek jeter to congratulate him on passing lou ger rilg. he's a great git. >> i love derek jeter, but only the yankees, only the yankees can somehow brag about not getting to 3,000 hits. i'm a baseball fan. you are a baseball -- 3,000 hits is the mark. hey, derek jeter, call me in a

season and a half when you get to 3,000. >> wow. awakened the giant there. >> i'm sorry. >> thank you very much to all of you. we'll be right back.

that is all for today. we'll be back next week, if it is sunday, it is "meet the press."

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