Katie Couric: Mr. President, I know you met with House Democrats earlier this afternoon who were opposed to the House bill on health care, because of concerns about the deficit, taxing the wealthy, controlling long term spending. In fact, 40 House Democrats opposed the bill as it's currently written. Did you make any progress?
President Obama: We did. And they acknowledged that we made progress. You know, my working principle has been, number one, let's make sure that this package provides more choices to the American people, gives them more security, if they've got a preexisting condition, or they lose their job, or they're changing jobs.
It's got to be deficit neutral. It can't add to our deficits. And it's got to bring long term costs down. And I think, rightly, a number of these so called Blue Dog Democrats - more conservative Democrats - were concerned that not enough had been done on reducing costs.
It's the same concern that I shared. And we talked today with Henry Waxman, the chairman of the committee that was relevant. And I think that we're moving in the direction where, at the end of the day, by the time we have a bill on the floor, we will be able to say, unequivocally, that this is going to bend to the cost curve so that health care inflation is reduced. That's going to be good for American families. That's going to reduce their costs and make the system work better for everybody.
Katie Couric: But it's not going to add to the deficit?
President Obama: It will not add to the deficit. I will not sign a bill that adds to the deficit. Period.
Katie Couric: What about the nonpartisan Congressional office figures. As you know, you've heard that, that the House plan, as it stands, would add $230 billion to the deficit over 10 years.
President Obama: I mean, part of what you know, I haven't been in Washington as long as some of these folks, but you find out that you go forward in fits and starts. And I think that what is fair to say is that the Congressional Budget Office did not see enough of the cost savings to offset the increases for expanding coverage for all people.
And that's what we talked about today. That we've got to make sure that the cost savings are there, because there's so much waste in the system, Katie, that we know can be reallocated to reduce cost for families, make sure they've got health insurance, if they can't currently afford it.
The problem is grabbing onto those costs. Making sure that if we're subsidizing insurance companies that are already profitable, to the tune of $177 billion, let's take that money out. Let's make sure that that's going to families that could use some help to get health care.
Katie Couric: But aren't a lot of these cost savings, Mr. President, theoretical? I know you've said that the CEO and some leading economists say this plan has a good chance of working. But there are no guarantees these projected savings will really happen.
President Obama: Well here's what we know. Here is a guarantee: If we do nothing then health care inflation is going to keep on going up at eight percent, nine percent, 10 percent a year. It means that family premiums are going double over the next ten years at least.
It'll go up three times faster than wages go up. People's out of pocket costs are going to be higher. So we know that standing still means that more and more people are going to lose their health care or it's going to be less and less affordable. That's if we do nothing.
If we take these actions, we are confident that we can actually see some serious reductions in health care inflation. And, in fact, there have been times, for example, in the 1990s, where you actually saw health care inflation drop down to zero. But then it started jumping back up again. And so what we have to do is have to have a sustained effort. And all the ideas that have been put forward by health economists and the congressional budget office are ideas that, I think, we're going to try to make sure are incorporated into this bill.
Katie Couric: One of the sticking points in the House bill is a tax on people who make $280,000, or over that amount. Nancy Pelosi is reportedly saying, "Hey, let's raise taxes on people who make $500,000 a year, and on joint filers for those who make a million dollars. So it could be a millionaire's tax." It might be more politically palatable. What do you think of that?
President Obama: Well, here's what I think. Nobody wants to pay more taxes. I don't want to pay more taxes. You don't want to pay more taxes. On the other hand, I think we all recognize that, in a country like ours, we shouldn't have 46 million people without health insurance, and we shouldn't have a whole lot of other people who have health insurance, but the deductibles are so high, or the premiums are so high, that they can barely afford it. And so if we've rung out all the waste and inefficiency in the system, if we've reallocated, as I've proposed, that money that is being wasted that is already in the system, taxpayers are already paying for this. For example, on these subsidies to insurance companies.
We've taken that money and we've reallocated it so it's being spent well. And there's a little bit left that we've got to cover. Then I would rather have somebody like myself pay for it, who can afford to pay a little bit more, than I would to see middle class families burdened with higher and higher health care cost. So you know, I think that the proposal that Nancy Pelosi put forward is one way of doing it. The Senate Finance Committee is exploring a whole range of other options.
And I'm confident, that at the end of the day, that we will have found a way to pay for this that meets my earlier pledge that we're not going to see taxes increase for anybody making less than $250,000 a year. And we're going to do it in a deficit neutral way so that this thing is actually paid for.
Katie Couric: So you are not opposed to a tax hike for some of the wealthiest Americans. Either for those who make over $280,00 a year, or those who make over $500,000 a year.
President Obama: I am not opposed to people, like myself, who are at the, you know, top of the income bracket, paying a little bit more, if …
Katie Couric: You can't come up with another way to pay for it.
President Obama: If, as a consequence, middle class families are seeing their cost reduced, and if we've taken all of the waste out of the system that we can, and put that into the kitty. Because I don't think what's fair for people is to feel like we're not doing anything about the waste and we're going to tax folks. I think that's the kind of thing that the American people would be opposed to, and I would be, too.
Katie Couric: You said that if Congress doesn't have a deadline things don't get done in this town. But Democrats, like, Kent Conrad, are also saying, quote, "Sometimes, when you move too quickly, you make mistakes." So is this really something you want to dig in your heels on? I mean, is there any flexibility on this August deadline?
President Obama: Well, I want to keep the pressure on. Because we're making steady progress. People are working hard. I just met with these House Democrats. And they were in there for three hours. I could only join them for an hour. I understand that the Senate Finance Committee is meeting three times today.
That kind of work is going to produce good results. And it means that people are really digging in and getting to know how can we make sure that we're preserving people's choice of plan and option? If they already have health insurance, how can we reduce cost?
How can we make sure that preexisting conditions don't bar people from getting health insurance? If we figure out all those things over the next several weeks, then I think the American people are going to be happy with the end product. Here's what I won't do. I won't, as I said before, I won't sign a bill that I think does not reduce costs - does not keep deficit neutral. And does not benefit middle class families in America. So I want to put the pressure on. But, ultimately, the test is: Is this a bill that I think is going to be better for the American people or not? And, if it's not, then, you know, we'll keep at it.
Katie Couric: So, if it's not, you'll have some flexibility on this deadline.
President Obama: If I'm not happy with the end product, I will not sign a bill.
Katie Couric: Because, surely, you don't want to ram something through. After LBJ took a year and a half to get Medicare passed. As I know Senator Olympia Snow reminded you recently.
President Obama: She did. And I think that's fair. Look, part of what's going on, though, is remember we've been talking about this for four years. We've been studying this at infinitum. Starting in November, after my election, a lot of members of Congress, including the chairman of the Finance Committee, Max Baucus, started-- meeting and working through ideas.
So we've actually been working on this for a good solid nine months now. And I think that if we keep working, that I'm confident that we can get this done. ButI want the American people to understand I have no interest in creating a bad bill. That doesn't serve me. And it certainly doesn't serve the American people. Well, if we've got a bill that doesn't work.
Katie Couric: You are really putting yourself out there, front and center, on this issue. Which may be risky. Are you concerned at all that if health care reform fails it will be a huge and devastating setback to your presidency? And may put some of the rest of your agenda in peril?
President Obama: I think that the easiest way to keep your poll numbers up, and to garner good press, is to do not that much here in this town, and not to cause a lot of controversy. And there's some people who would probably advise that that's the approach you should take.
You know, take it slow. Don't make too many sudden moves. But that's not why the American people sent me here. They sent me here to solve problems. And my attitude is that I would rather work as hard as I can on the things that matter most to the American people, bringing down their health care costs, getting control of our energy agenda, improving our education system, regulating our financial system so that we don't have another crisis again.
Those things need to be done. Sometimes, in Washington, inaction is sort of the preferred way of doing business. I want to make sure that during the time that I'm here, that we're as productive as possible. And so far, at least I think if you look back, over the last six months, we have done an extraordinary amount of good even though my staff reminds me that they're not getting enough sleep.
Katie Couric: There's a lot of talk about momentum right now. And, of course, in the first month of the presidency, that's when the political wind is with you. Are you worried, if you can't get something passed soon, health care reform will be DOA?
President Obama: There have been so many times, during my political career, certainly, during the presidential race and even over the the last six months, where people have said, "Boy, this is make or break for Obama." That was true when I was in Iowa.
And people were sure that we weren't going to win. That was true, you know, during periods in the general election. When the stock market went down everybody was saying, "This is a disaster." And what I found is that as long as we are making good decisions, thinking always what's going to be best for the American people, that eventually, as long as we're persistent, and we're listening to the American people, that things get done.
So I think that we have a lot of work to do before we finally sign a health care bill. I think that the American people, understandably, are wary of changes such a big part of our lives as health care. And they want to make sure they understand it.
I've got to make sure I'm doing a good job explaining it. I think congress has to work with our administration to meet the demands of deficit neutrality and serious cost savings. But you know, we really don't have a choice. If we don't do this then Medicare and Medicaid costs are going to keep on spiraling.
The deficit will become out of control. We'll have a situation in which family premiums are going to keep on going up. And, you know, the worst thing that I could do is to not take the steps that are necessary, and then look back, four years or five years from now, and realize that more families don't have health insurance, and costs have been going up, and the deficit has gone up even higher.Katie Couric: What about the Mayo Clinic? It criticized the House bill yesterday. Saying, quote, "The legislation misses the opportunity to help create higher quality more affordable health care for patients. And, in fact, it would do the opposite."
President Obama: Well, as you know, I've consistently cited the Mayo Clinic as an example of …
Katie Couric: I know you have. So this must have been particularly painful to hear.
President Obama: No, look Katie, I think that this is a very tough process. Because there's so many moving parts to it. And when I said that we can achieve serious cost savings, and improve delivery systems so that people are getting better value for the health care dollars that they're spending, Mayo Clinic's a good example of it.
And figuring out how we encourage other health systems to adopt the same kinds of approaches that Mayo adopts, that's a tricky process. Because it means we've got to change how doctors are reimbursed, and how hospitals are reimbursed. That's part of what we meant to discuss today with the House Democrats. And I think that by the time we actually have a bill completed, what you're going to see is encouraging precisely the kinds of things that the Mayo Clinic is doing. That, I think, will be proof that we've made real progress.
Katie Couric: A very big concern for a lot of people is keeping their health care policy in place. But if you create a public insurance plan, what's to keep an employer from telling his or her employees, "You know what? We're not going to provide health insurance. Get the government plan"?
President Obama: Well, first of all, I understand that about 14,000 people every day are losing their health insurance because employers just can't afford it anymore. And they're starting to drop plans. Or they're putting a huge amount of cost onto the employee.
And the employee decides I just can't afford this. So that's already happening. And that will continue to accelerate if we do nothing. What we've said is let's set up a public option that people can choose. Although we'll have some rules and regulations around it so that, if you're already getting health insurance from your employer, your employer can't just dump you into the public plan. But ..
Katie Couric: What will happen if, say, my employer tried to do that?
President Obama: Well, essentially, the employer would be informed that certain people would not be eligible for this public option if they've already got health insurance through their employer. Or the employer would have to pay the equivalent of the insurance that he was already providing.
So there is going to be mechanisms that prevent people from just dumping folks into the public option. Where the public option becomes important is to make sure that the small business person, who just can't afford health care at all, when they go to what we call an exchange, a marketplace that has private insurers out there, but also a public option, he or she can choose which option works best for them.
And, by having that public option, we're putting pressure on the insurance companies to make sure that they are keeping costs as low as possible, and they're giving the highest quality for the best price. What's always interesting to me is folks say that government can't run things.
And I actually agree that the private sector does a whole lot of things better than government can. Well, if that's the case, then insurance companies should be able to compete effectively with a public option. As long as it's not being subsidized by the government. And I've already said I wouldn't support a public option if it was simply just a way to have taxpayers subsidize folks heavily.
Katie Couric: Do you favor a government option that would cover abortions?
President Obama: What I think is important, at this stage, is not trying to micromanage what benefits are covered. Because I think we're still trying to get a framework. And my main focus is making sure that people have the options of high quality care at the lowest possible price.
As you know, I'm pro choice. But I think we also have a tradition of, in this town, historically, of not financing abortions as part of government funded health care. Rather than wade into that issue at this point, I think that it's appropriate for us to figure out how to just deliver on the cost savings, and not get distracted by the abortion debate at this station.
Katie Couric: Do you think any illegal immigrant should be eligible for health care under the new plan?
President Obama: No.
Katie Couric: No. Why not?
President Obama: First of all, I'd like to create a situation where we're dealing with illegal immigration so that we don't have illegal immigrants. And we've got legal residents or citizens who are eligible for the plan. And I want a comprehensive immigration plan that creates a pathway to achieve that.
The one exception that I think has to be discussed is how are we treating children? Partly because, if you've got children, who may be here illegally, but are still in playgrounds, and at schools and potentially are passing on illnesses, and communicable diseases, that's not …
Katie Couric: Aren't getting vaccinated.
President Obama: That aren't getting vaccinated. That's, I think, a situation in where you may have to make an exception.
Katie Couric: Mr. President, if the stimulus plan isn't really working, at least for now, why should Americans sign off on spending billions of dollars on health care reform?
President Obama: I disagree that the stimulus plan is not working. Think about where we've been. I think people maybe have a selective memory here. It was only four or five months ago that people thought we might go into a Great Depression. We have gone through the worst economic crisis since the Great Depression.
And, since that time, we have stabilized the financial markets. We have created the ability of businesses to borrow again. We have prevented thousands of layoffs in states all across the country. We have made sure that people have extended unemployment insurance.
And that, if they lose their job, they can keep their health care. We've given a tax cut to 95 percent of working families. So are we where we need to be? Absolutely not. Would things be much worse if we had not put the recovery package in place? Absolutely.
Do we have a lot more work to do? We do. And, fortunately, we've still got a whole range of infrastructure projects, building roads and bridges, and laying broadband lines, that are going to put people back to work and lay the foundation for long term economic growth.
Katie Couric: But what's taking so long? Only about $60 billion of the nearly $500 billion of stimulus money has been dispersed. And a lot of people are saying, "What's taking so long?"
President Obama: Well, that's actually not entirely accurate. What you have is, first of all, the states have already received $144 billion of money, in terms of unemployment insurance, in terms of-- stabilization funds, so they don't have to lay off teachers, and firefighters and so forth.
Tax cuts have already been allocated. They went out back in April. So, in fact, about $500 billion of the total $800 billion recovery package was money that everybody agreed made sense. For tax cuts and to help states and to help individual families.
The money that's taken a while to get out is actually the money for infrastructure projects, but that's always the case. Because you can't start building a road or a bridge without making sure that the studies have been done. The engineering reports are there. And we don't want to waste this money.
And, by the way, this was always intended to be a two year project. Not a month to month project. But here's the larger point, Katie. Nobody thought that, given the severity of this economic crisis, that there was going to be any magic wand.
The recovery package was one part of a broader set of efforts to make sure that the financial system stabilized. We've got hundreds of thousands of people who are being helped by loan modifications through the homeowners project that we've put forward. We've got SBA loans that are going to small businesses all across the country.
And if we do continue to take all these various steps, in combination with reforming our health care system, setting up an energy plan that finally ends our dependence on foreign oil, and has serious financial regulatory reforms, so that we don't see banks doing the same things that they've been doing in the past, that's what's going to lay the foundation for long term economic growth. But this is not going to be easy. And I don't think anybody ever thought it would be.
Katie Couric: A recent online poll out today shows the number of Americans who trust you to find the right solutions to problems has fallen from 66 to 54 percent. And those who mistrust you have increased from 31 to 42 percent. Do you feel like the honeymoon's over?
President Obama: I never understood this concept of honeymoon. I think that, as soon as I took the job, on January 20, I think I was responsible. And that's what people expect from their presidents. That I take responsibility for the economy.
The economy is going through a rough period. And so, you know, nobody's more critical than I am of the need for us to create more jobs, to improve our health care system, to deal with our energy problems, and to make sure that our financial system works for families as opposed to just for fat cats on Wall Street.
We are moving, I believe, strongly in the right direction. But there are going to be ups and downs. And I think that, until people are confident that recovery has happened that's going to end up influencing people's broader opinions about whether we're moving in the right direction.
Katie Couric: President Obama, there was a stinging column in the New York Times today written by David Brooks. He says Democrats are losing touch with America because, quote, "The party is led by insular liberals from big cities and the coasts, who neither understand nor sympathize with moderates. They have their own cherry-picking pollsters, their own media and activist cocoon, their own plans to lavishly spend borrowed money to buy votes." He goes on to say that you have, basically, been co-opted by Nancy Pelosi. And you've differed to the, what he calls, old bulls on Capitol Hill.
President Obama: This was a really aggressive-[laughter]
Katie Couric: On issue after issue. [laughter] There was a pretty…
President Obama: Are we going to read the whole column here? [laughter]
Katie Couric: No, I'm not going to read - I'm not going to put you through that. But it was it was a tough column. And I'm just curious, A, have you read it? And, B, what's your response?
President Obama: I, you know, I don't spend a lot of time reading columns, Katie. The fact is that I am confident in the work that we're doing. And if you look at the steps we've taken on the recovery package, the steps that we've taken to reform things like the credit card industry, the legislation that we've been able to pass to prohibit tobacco companies to market to kids - each of these things, which had been sitting on the shelf for years, that we've been able to get done in the first six months, I think, is a testimony to the fact that we're moving America in the right direction.
But as long as the economy is still shedding jobs, and people don't feel confident about a recovery, then I think there's going to continue to be frustration. And rightfully so. I think people have to have high standards for, not only my performance as president, but the performance of government generally.
Reforming this town, and working through these problems that have been unattended to for decades - that's not an overnight process. It certainly doesn't get completed in six months. But ultimately, the report card that I'll be interested in is after we've seen the work of this year, and into next year, and we start seeing some of these plans bear fruit. I feel pretty confident that people are going to say we're finally moving beyond some of the gridlock in this town, and we're actually getting things done.
