month of august, that's at they wanted. they wanted the status quo t hold. we're not going too that. the insuranceompanies have fierce, fiee defenders, many on the repubcan side of the aisle andwe're breaking rough thatnd it's ful hard but we're going to do it. >> chaie, if i can. >> rose: go ahead. >> theiggest most powerful enti on the face of the human planet is the united state federal government. and what we're lking about doing is expanding its and powers. so when anthony talks about not gettingrepublican supportr our schophrenia first, for the president to get up and stay entire health ca system is at the breaking pnt, when u pot to the successes and unfunded lbilities that aren't having anying addressed right now outside ofbeing used to maybe find costs f an en larger health ca program, that's schizophrenic, that's actuallyysfunctional. our concern has en if you start from the premise that you're gng to have larger contl of the marketplace, of ople's decision, we won't support that. if you want toreak up and hav more competition, eower patients andconsumers, wee the for you. but, again, you'reoing to have

to set that will debate internally. >> rose: is that whe it is? you know, i think as we go forward, binesses, asnthony mentioned, the can... they will drop people today. they will dr people next year. we caot have the status quo. we've got to move forrd. and the republicans hen't brought us the ideas. bring us some new eas. bring us othe ways to corol e costs. believe the pubc option is the way to control costs d i don't see any other way that we can athis point just come rward with new ideas. >> let me push back on t notion of governmencontrolled healthare. all wee talking abo now is whs going to take our money and give it tooctors. right now under medicare, medire, the federal government does it with 4% overhead. der private insurance, up to 30% of i is profits and adnistration who gives the money to docrs. insurance companiearen't doing a single cckup. they aren't doing a single operatn. the doctors ardoing that and undemedicare andevery government plan we have, pple arempowered to choe their doctor as they e fit. the idea simply is wt role are the insurance companies playin in a this? are they playing a constructive

role? are they apportioning risk? no, becau they're not covering anyone ove 65 and dropping anyone who gets sick. the question ishat are th doing and should they very, very least fe a little b of competition? if you want to advoca on behalf of insurance mpanies, th's someone else's job. buy stock their company or dial the 800-number. we should be advocating for taxpayers. and if wal-mart can negiate r low prices for its customers why shouldn't we do the same thing r our customers, meaning taxpayers. at's what this argument is abt. on the side ptecting the insurae company should notbe with where the democratic par is a that's not where we are. unfortunately it is whe a lot of people in ngress on the republican sidof the aisle ar >> rose: i haveto leave it there. thank you very much. thank yovery much. thank you, conessman, good to have allf you here. i goo new york, w, joe califano. joe, y have been involved in this issue for a long, long time. you listen to the president tonight, you've just listened to reactionrom threeembers of congress. how do you s it? >> well, i me, as far as the president tonight, mean, i thinhe made a ver eloquent

spee. i thinhe rubber ll hit the road when th go to confence with t house and the sete. but i think th reality... all thisonversation about controlling costs is only one way to control costs an that's to keep peoe out of t sick care system. the onlyhings in templ of sick care that wl help control costs are if we have a sittion which we deal with some of the thin thatcreate them: the fee forervice system for doctors. the way hospitals a reimbursed essentially on aost-plus basis. e failure to have any health omotion and disease prevtion. you know, whydon't the mocrats tax alcohol? why don't they taxobacco? substance abuse, charlie, alcohol an tobacc account. and the diseases they spawn count for 30% of the heah careosts in this country. 35% of medicars cost. i think tt i wish t president talked about a lot more.

bui don't see a public option or a non-puic option, either of those thing,really having much of an impact on health care costs. the ings that proce health care costs are dtors, hospals, medica equipment manufacters, pharmeuticals. the insurae companies, sure maybe they're making toouch money, i don know. but their level of profit is not the iue here. the issue is the way the system is now organized, nothing in this bill changes that. >>rose: ri how willery,hat d you think of the esident? >> it was very able perfmance. giving barack obama a teleprompter i like giving a yo-yo ma a cello. it's a can't-miss sort of thing. but undeeath thehetoric about being open to republica ideas anthis door being open althe time was a very tgh an partisan speec it w a speech that basally brushed aside all the concerns we saw in those townall meetgs expressed in august a to the attitude that the

oppositiono these plans is basically ill inntioned or ignorant or both. and, you know, look, i think it will probably help him in the near term, but he still has two rely big problems in sling this thing, charlie. one is jus the concern that's been stoked inthepublic about the level of debt and defits. he tried to address that by saying he won't sign a bill that increases defit by adime in the near tm or the long-term. m not sure that's a commient he's going to be ae to keep. also, ople are concerned about health care, they don't like, necessarily, thetatus quo. but it's not crisis. it's not at the top of people's minds right now. that's the econom and that's the bs. jobs. so those are two big drags on his salesmanship over te in this pla >> re: a little bitof housekeeping her ngressman mccotter, can you stay with us? don't know whether iad ntact with him or notut i could see a picture.

the speec opportunity, wha has it changed and did the president help himself? >> yeah, arlie, he did. i thought he thread it ha needle. he had to appealo a mber of different gups tonight and i think he did that. you know, usuly a presidential address ke this is settg the terms of the debate. this, after a summerf discontent in which he let the other side setthe predite he got back in theall game. >> rose: does at mean he should have ma the speech before the summer? >> one can argue tha you can say bi clinton did and it didn't work. if he winse should have made the spee when he made i if he loses,e should have mad it earlier. what he did is he tossed out enough red meat, hgot the base excited, he invoked the memory of the great liberal lion edward kennedy. athe same time i think he went rther than rich lowr suggests, he made concessions and impoant issues at risk for the at risk pools, medical malpractice. d the initial reaction a to

beery enencouraging. benelson, the key democrat in the sete called it a game changer. the mai may said.... >> re: why is it a game changer? >> to ben nelson's view he' moderate enough soe can support things like th, i suspect. olympia snowe,ho is the mos coveted man in america today politically said that...he said more good things tha bad things about it-- politically that i charlie. so ihink from the president's point of view itas a good night. buthere's still a long way to go. >> rose: david? >> i thought it s the best speech of s presidency ju as a speech. i thought the teddyennedy part was extremely strong, th little philosophical part at the end was quite strong and t explanion was strong. and for what it achieved, politically it gave the liberals red meat stylistically, substanily i agree with al, it gave the center a lotf meat. whether u want to think about the public oion, it's dead. the white house...he people insi the white house are completely committed on this they'd like it iprinciple but th know they won't get so

they walked ay. on top ofthat, the cost is now down to.. >> ros and by doing that thers no threat of losing the house? or the is a threat. >> their view, whichs comptely correct as far as i can see, is thatthe left lever l never walk away fromhis bill just becse it doesn't have a public option because does so much else fothem. >> rose: al, y agree wit th? >> i do. i think it will b harderto get there, there wl be mes, ere will be threats, the maxine waterscongresswoman from california d others will yell and seam but in the end i think david right and i tnk wh they were doingonight was again,aying the groundork r some kind o.. whether is trigger, a co-op, some kind of backup tat least give them some excuse to say all right, we don't like it but w won't let th perfect bethe enemy. but a robust public optn is absolutely dead. and it's not ctral in my case. i think the present is absolute right on that. was not a big cost saver, it was not going to change insunce markets. >> re: was it necessa to increase competion? well, the c.o. doesn't really thi so. ey estimate the st sings as reasonay minimal. then hgave the cenr some other thin.

he mentned medical malpractice. ere's a john kerry optiono help increase taxes on.... >> rose: that's going back to wherbush was, is it not? >> but it's an idea a l of republicans have suprted through thback door. the's this fiscal trigger whh rich mentione the ir-clad promise to not do a plan that increases the deficinow or ever. now, that is an incredible promise. i don't think he can come ose to tha but thatromise made so vehently at least will probably appea to some be dogs. >> rose: joe califano, public option is dead? >> oh i think the public option is dd. i would ke to make a point. i think the ttom line is i do think the presiden got acros thathere's a basic element of social justice here that's important whetheyou're a republican or decrat, which is to provide health ce to everybody. onhe cost issue, charlie, you know, can i just go bk to when

we passededicare and medicaid? there were no... and the sts that have eloded. why? there were no pet scansthere were no c.a.t. ans, there were no... ere was no expensive chemherapy, there were no organ ansplants. nobody expecd the eression life expectancy that cam after we passed it. now, for the congress totry and say they can project ten year out what thecost of health care going to be is patently absurd. we haveo idea. we'rin the midst of a genetic revolution, ofa neurological revoluon, we don't know where stem cell researchs going to take us. we have dino transplants. we have artificial organs. there are tremends costs coming. that doesn't an they shouldn't pass the bill. i think we just ought to be realistic,nd this is goi to a comtment in term of social justice. it is gng to be expensive. the on way to avoid t expense, as said before, is to provide tremendous prevention

programs and keep people out of the sick ce system. >> rose: congressman mccotter, can you do it with prevention programs and kping people out of the system? >> wl, i think you ve to incentivize people to take preventative meares for their health carand be resnsible for . i ink you can dog that by alwing insurance companies and ople to contract for health care iurance that recogzes th rewards them fo doing so. but i think one of the concerns people have you're still taing about in the overarching goalof reducing the supply of healthare to reduce the cost. at is reallyhat we're looking at. and the problem is with the demographitrends that mr. califano pointed out with the people living longer, the ba boomers, the largest genetion in american history ling on, whatyou're goingto see is a continued rise in demand. and if theovernment tries to ntrol costs through addressing the supply issue, you're going to see costs goup. that's why t projections that we've seen for other health care that are the governmentas provided thrgh medicare and mecaid, those expenses are in unfunded trillions over the coming years.

>> rose: didhe predent's argument today abouthis is the right time, t urgency argument this is wha we need to do that thiss an iss of humanity a all ththings that he eloquently said make a difference to you or to other republicans? >> well, i thi the keys everyone agrees that what we want too is have health car reform that is effective for the american pple, that in a very chaotic time ds not add a compound and exacerbate the oblems they currently ha. but the questio is does the system actually provide the goal that is proffered or doe it actually makehings woe? the road to he is paved with good intentions. my argumt is what we hav to do is get this right. if we sh to a dgment for artificialdeadlines, beit no or had it bee before theugust recess when thbill was firs demanded, yo increase the risk thathe dicm will come true. no matter howbad a pblem is, congress can always make it

worse. we want to avoid that. >> charlie can i just.... >> rose: yes,please. >> i think one verymportant thinthat happened tonight is we got some passion from bark ama. this was not a cool spee, a teacher... ofessor in a college. we got passion. anyou need passion. when lyndon john season said th the we'll figh for medicare uil i have no breat left in my body" we got some of that from fmarack tonight that'she only way we're going to get gislation to provide coverage for allhe uninsured in this coury. he's the ly guy that can do it. >>ose: what would lyndon joson do that barack obama shouldo? >> o crlie. i mean, you kw, first of all.... >> rose: (laughs) >> (laughs) >> you can say that on the air joe! >> i c give you one simple ample. oneimple example after the bill came out of the house lyndon johnson had harry byrd... harry byrd was the most

consertive finance committee chairman over the w t white house. >>rom virginia. >> couldn't get the senate to move on the bill. and then he saidto harryi'll walk you out t your car." and he walks him out and he's got the press right in front of him anhe turned to harry byrd, he sd "it's a wonderful thing that wbur mills reported this bill out of the house committee today andou've got so many thousand unemployed. uninsured in yourtate, can you at least have a hearing?" and th press baered him and he finall said "ye, we'l have a hearing." and lyndon johnson said "good." you have to do tngs like that. bluntly put, youeed balls to get mething like ts through. (laughter) and i thin obam will. where he'sot to demonstratehat is certainlwhen he gets t conference. are we on hbo, charlie? aughter) >> ias hesating to say

lyndon would have done se nut cracki, butoe took caref th for me. (laughter) >> rose: beyd that, david, what else do the president have to do? where does t president g from this speech in t president? >> well, he's actually got get to getlegislation. ngressman weiner poted out, he kept talki about "my plan, my plan." there is no plan. but i ink it's pretty clear... >> rose: you don buy the argumenthat essentially his plan isthelan comingut of the sete finance... >> i thinke's shifted over esntially to the senateplan. so he's gotto do that. he's got to ttle the public option once d for all, which i ink.... >> rose: what els does he need do on settling it? >> well, i mean he's got to... he sort ofays... he say "i' li it, i understand it's going to go" but he didt explain how it's going to go, what people are going toet in favor of it. the nal thing i ink he has todo... listen, august happened. the summer happened, this bill, at lea until the speech, was stl unpopulaand i thoughte went some way to easing so of that anxiety, especially the

last secon of the speech, because itas not aiberal address. it was the left has some ias, the right has somedeas, i'm going to head straight down the middle. that's sort of quintesstial barack obama and i thought he recaptured some of his essential sell >> the sech. but he still hasoeassure people that government i't taking over. anthe weakest part the speech by far is the cost section. the idea that you're going to cut dicare and medicaid $600 billion without anyffect, that's riculous. >> rose: and youan't find savings... >> and people know that waste fraud and abuse, you c't say that with a strait face. so he's got to explainhat and then he's got to explain essentially now it's not going to.... >> rose: is there a universal belief in whington and around the countryhat medice works and works well? that a consensus? >>ell, it's a popular program, buit's also arogram that's unstainable, like the rest of the health ce system. and the costs are eloding. the speech wt well. as i said, thought it wa a great speech. thers a guy in washgton named doug elman dorf who heads

the conessional budget office. heould utr a sentence at a hearing in a few wee and it could undermine it all. he could it err sentence where he says "this doe not reduce costs, this increasethe decits. then baby bara obama's own promise he's g to not si the bill. he's actually t to substantively bend the cost cue. >> he did a little biof that, i think, wh a proposal endorsing the insurance tax which someepublicans have embraced before. charlie,s ing to be a very messy procs for thenext seven weeks. joe califo can talk out what the legislave process is like. it is an absute can national guard that ts thing is a slam dunk in the house. between some liberals who tnk it doesn't go far enoug and some conservative, some blu do who say i w't vote for a public option. ey have delicate maneuvering to do in the house. that's the balancing a. that's why heon't throw in the tol yet on the pubc option. but what he will do a some point, he has t say what h

ll accept, whether it's a trigger, a co-, whateve emerges. >> ros when does he he to do at. >> what emerges from the senate finance committee ll be portant and then they'll start putting deals togethe so certainly by early october. >> i think, charlie ere's another factor here,t's not just democts and republans and blue dog democrats and liberal democrats. you've got incredible financial interests here. you'veot the doctors. you've got the pharmaceutic compans, the medicalquipment manufacturer the hospits. they're all going toe in int is battle. i mean, as al said, this is gog to be quite a bloody battleecause believe me in y billhat's going to r a thousand pages, they're gng to find language to protect themselves and ty're going to fight for it in committees and ey're going to fight for it on the floor. >> rose: will recallly, let me also say fory friendsl and david, to to me was a very liberal speech. the medical mpractice business is just wdow dressing. we're talking about demonstration projects in e ates. it doesn'tven have to affect theactual legislation.

$900 bilon over tenyears just let me remindveryone, the day before yterday that was considered aot of money. and remember a lotf these bills, t real spendin doesn't kick in until later inthe n-year window. so you'rnot really capturi the true cost. i thinfor a lotf people barack obama's lling this things a greatct of fisca restraint and fiscal conservatism. for most people, a neay trilli dollar new health care entitlemt is not a tural intuitive way address out-ofontrol government spending. and i ought tonight he w... ma a very eective case talking to seniors abt medicare. but let me tel you, if they manage to pass hundreds of billions of dollars worth of vings and medica without agitating a lo of seniors, newt gingrich will be very, very jealous. >> rose: (ughs) >> he's jealous anyway.

>> rose: the president talkin out the malpractice issue, congressman mctter, di republicans...t got a se out of republicans how you weigh thatin terms of theresident'sillingness to listen and to respond? >> well, first it w intesting because it was like watching him have a molar removed spitting out the phrase "tort reform." (laughter) and i don't ow that that evences a real comtment or the passion that we heard lked about for that specific issue. in fac i wld agree... i think it wasr. brooks said this is the quintessential barack obama. what he did is set a straw man on theleft, a strawman on the right andretended to be a centrist. >>ose: (laughs) >> the reality is, ifou're ing to come out d... you talked abo l.b., i meanold school joseph califano god love you. l.b.j. is a former legislator, would come in, sit you dow from whatever room his place h wahiding and he would say "i want x, y,nd z in this bill."

d he'd find a way to ma that happen. tonight as i said earlier, the public option, we're still discussing whether or not thinks that's essential. and at's the key ement in the inrnal democratic debate that haso happen. >> re: well, i'm noture we're discussinthat. i think david brooks carly sa... and al hunt both said that t public option night the president me clear it's not essential. >> wel you'reoing to have i think over 100 progrsives and other democrats thathave said that the publicption is criticalo their vote. and, look.... rose: okay, so they vot for hit in the house and then it goes to conference and... >> and tn it gets taken out. it becomes problemical. we used to do this, charlie. we used do this. we we in minority because of it we would start aill on the far right and try to move it to e ceer counting ourown noses whilthe public and the demoats held their noses. evtually that doesn't work. an oldhairman once told me if you want to get somethg big done, you start in the middle and work out both ways. d i would hope that theyould

come back, reset the butn and start to seriously work with us because do think it's possible to get something constructiv done. >> rose: so you think hehould stt all over? >> no, i tnk tt he should me and look at where we're at, where he's at, where his caucuses is at. because whilthere have been bills put out of committee, the ly bipartisan votes against this legislation have en agnst it. >> rose: this speech was adessed to both congress a tohe public. at has to change? what kind of sponse out there...r is itsimply now a se of push and pulln the congress? >> well, the inside ga.... >> rose: dynamiof where we are. >> the inside politic is affected by the ouoor politics in the sense that fe he changed public rceptions a little bit, particularlyf he appealed to me of those iependent voters o were gettingncreasingly skepcal of this plan, that's going to me it easr for the centrist democrats and maybe even a f repubcans-- not very many, you're talking about two or thr at the mosts uck grassley, mike enzire

never going to vote fo this bill. but olympia sno, as i said earlie, mig. so i he changes perceptionsut there-- and i don'know that he did, i susct he did-- at's very important, charlie th makes the insid game easier and i uld just go and jump in on this. i had just read about mecare. i wasn't around th, joe. t in reading about that medicare debate, whichis fascinatin that wasn't as easy... lyndon was a a magician but wilbu millswent through all kinds machinions. it took months a monthsand months of changes. that wasn't a simple, easy process. >> no, it wasn't. fairness remember joson real playedills. but think about it. in 1964, in those days social security increases were not automatic. the congress voted them every year just... every two years just before they wen home. johnson got the medare bill attaed to the social security incrse that passed the senate, wilb mills had the social securityncrease in the house he wouldn take it.

johnsonliterally killed the social security increase to build up pressure for medicare the next yea i meanyou have to understand. al iright. this is a tough, hard pross. and member, he then came to congress with this whopping liberal majorit and the first thing, incidentally, that happened in early 1965 was that wilbur mills had lost thr members of his committee tt we against medicare. lyndon johnson got t... speake mccormack tout three membs on that comttee that we for medicare. i an, al is rit. thiss going to be a tough fight. but i thin it is time for the prident to really get his fingernail dirty and try and get mething. try d get something, charlie, to makit a little easie.. the nference is going to tough. but he has the ability to she

little... to shapeo some exnt what comes ouof the house, justs he... igree with what you said in washington. i ard that speech tonht as barack sing i'm withax baucus and theenate finance committee bill. >> but when medicare passed... i saw a pollhe other day quoted that it was 6-0- in favor public opinion polls. soou had... re b.j.'s legislate management mattered but you also had the blic very strongly behind a very large change in h government worked. there's there's an a.p. poll that shows 20% of peoe pport either starting over entirely or thing happeningat l. so prior t tonight the democrats are tryi to push through a huge newreat socie style govnment program against the winds of popular opinion that a much more difcult sk. >> well, think the president affected popular opinion tonight. i'd also note one other thg. e congress was a diffent ple than it is today.

we had rghly half the republics in the hse and half the replicans in the senate vot for medicare wn it finally came to the floor. wead libera republins in both bodie... legislative bodi. we don't really have much of that tay. >> well, also, joe, wh you had ck then was in addition a very politically effective president, you had somekillful legislator including the aforemenoned mr. mills. think that's a proem this president has. in the house, with the excepon of henry waxman, i'm noture they havthe skillful legislors and with ted kennedy gone i don't know who u have in t senate to shepherd this through. i think that's a real problem. >> i d agree wi that. the numberf people whoave experiend putting together complicated pieces of legislation just isn't tre the way there was the 1s. then you havto issue, which rich elud to. part... why isthe bl popular now? i thk one, people have had loofgovernment sved down their throats for od reasons and baover the last couple

months, they're a little nervous. it's not a country that's attuned to have having big government. >> rose: are they worried aut vernment or the defit and the cost? >> many my view... and ithink that's why t president understands that, that's whyis rhetoric about themerican characteis so central. america has a tradition. the traditi is lited gornment. and ontop of that you have defici. you have what' going to b.. i don't kn, our public debt to g.d.p. wille 83% by 2019. soou have a great deal of anxiety. then the thi thing is it's almost impossible, it's very hard, least,to pass a major piece of legislati in a time of economic anxiety. in 1964, itas boom time when y have economic anxiety, you tend thave people pulling in, risk averse, htorically that's been very hard. now, having sd all that, i still think it'squite likely they will pa something. >> rose: is that perhap the reason the president is taking credit for stoppingthe slide of the ecomy and saying that whilpeople still ht we have

turned the corne so topeak? >> well, it test ild up... lien, this is what i did. i dot buy that argument but in the white housthey're firmly convinced thestimulus packa was a home run for them and ey'll say look, we did this, now u can trust us to do health care. >> ros is... in washington today, the question of gornment intervention and some of the issues that have be expresseon the program tonight a hugeear and somow has the president los that debator lost controlf that dedate terms of the roll of gernment, which he tried to make again tonight? >> well, the country has been this way for 200 some odd years, resistant big government. we do not have a european lfare system. the are deep reasons we do not have a european welfa system. there's ju an innate suspicio i think whenyou hear in th wnalls.... >> rose: but now they'resaying people like medire. >> well, the cntry is plit. people like certain prrams th benefit themsees but on the whole. in the abstract they don't like th sense of b gornment. >> rose:hey like the veterans health care.

>> right. there are certain things once they get used toth they tend to likthem and it's often made thateople are plosophically libertarian and operationally libel. so that' a contradiction. nonetheless,hen you have a system where 8 20% of the people are satisfied with what they have and you have someone ty thk is a big government liberal cong up with plan, well,they're going to be suspicious. >> charlie.... >> rose: hold on one, second, joe. i think th 8 20% number is totally fraudent. i think people are satisfi with insurance until ty have to use it. anthe people who fear they may have to use it also aret satisfied th it. i do agree with you there's always thischizophrenia on the role of t. today, prie, people are far mo friendly to theidea of reguting financial institutions and the like because of the csis. but always tre's the sense of will they too far a that's why theritics were so effeive this summer. >> rose: ando they have an it strategy. congressman mccotter, tell me your response to the aument the