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CNN LARRY KING LIVE

Health Care Reform Debate

Aired August 19, 2009 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LARRY KING, HOST: Tonight, Elizabeth Edwards debating health care reform for the first time. And she squares off on life and death issues with the former HHS secretary, Tommy Thompson.

Is President Obama's plan in critical condition?

A health care reform debate exclusive.

And then Bill Cosby speaks out. He'll explain why he believes a well-schooled kid saves you money.

Plus, what's really out there?

The British government releases official UFO files. "Newsweek" reports NASA is searching for aliens.

If E.T.s do exist, how do we make contact?

It's all next on LARRY KING LIVE.

Two extraordinarily gifted Americans join us now to discuss the health care question.

In Raleigh, North Carolina, Elizabeth Edwards, senior fellow at the Center for American Progress, primarily focusing on health care issues. She's the wife of the former Democratic vice presidential candidate, John Edwards, and "The New York Times" best-selling author of "Resilience."

And Madison, Wisconsin, Tommy Thompson, who was the secretary of Health and Human Services under President George W. Bush and is the former Republican governor of Wisconsin.

Elizabeth, in an interview last month, you said you thought substantial -- substantive health care reform would be enacted.

Do you stand by that?

ELIZABETH EDWARDS, SENIOR FELLOW, CENTER FOR AMERICAN PROGRESS, AUTHOR, "RESILIENCE": I still do. I'm incredibly optimistic. And I think the American people are still in favor of health care reform, despite the assault they've had of a lot of hyperbole and misstatements. And people know, in their real lives, that -- that they need -- that they're going to need change -- we're going to need change in health care, nationally and in their own communities and in their own families. KING: Tommy, in an interview with Dr. Val Jones, the CEO of Better Health -- that's a medical blog or education network -- in February, you said you can bet your bottom dollar that the health care system that we know today is going to be changed so considerably that I doubt you'd recognize it a year from now.

Do you stand by that?

TOMMY THOMPSON, FORMER SECRETARY HEALTH & HUMAN SERVICES: I stand by it because it already has many changes. In the stimulus package, there was a comparative equivalences. There's $20 billion set aside for electronic medical records. There is a lot of other projects that have been already passed that's going to transform health care in the future.

The truth of the matter is and I think the question you're getting at is what about the Barack Obama legislation and what the Democrats are doing in Congress?

I think the Democrats are going to have a very difficult time passing a comprehensive bill unless they want to bring in the Republicans and scale back and have a really comprehensive bipartisan bill. And that's what I'm hoping they will, because I believe that Elizabeth and I both agree that there needs to be comprehensive health care reform in America.

But the kind of comprehensive health care reform is what really is going to be the most important item. And I hope that it's a bipartisan one that I think can be passed energetically and have a great deal of support in the country.

KING: Elizabeth, can that happen without the government being involved in kind of a quasi insurance company of its own?

EDWARDS: Can we get -- can we pass health care reform?

We can pass health care reform without having what is commonly referred to as a public option, which means that to compete with your private insurers, with UnitedHealthcare or CIGNA or Aetna...

KING: Right.

EDWARDS: ...or Blue Cross/Blue Shield, you would have the federal government also offering you the option of insuring yourself through the government plan.

I think it would be a huge mistake to -- to pass anything -- any kind of reform without a -- without that public option for a lot of reasons.

One is that one of the things we want to do is make certain that we're providing to 46 million Americans who are uninsured, to 25 million who are underinsured, a way of getting reliable, transparent and cost-effective accessible -- cost accessible insurance. And the way do you that is to make certain you're going to have that option. And so far, the private sector has not provided it. I mean, we all know that. Insurance premiums are now $15,000. Next year, $18,000 might be the average. And in 10 years, $36,000 a year for a normal family.

If we want to have -- if we want those to be controlled, we're going to have to have a public option.

KING: Tommy the Republicans have fought that.

Why?

What's wrong with a public option?

THOMPSON: Well, if you want to really ruin health care in America, have the government run it. And everything Elizabeth said I -- I have difficulties agreeing with, because a public plan is really the tantamount to saying that health care has failed in America, we're going to turn it over to the government to run and regulate.

The innovations that Elizabeth wants for breast cancer and I want for breast cancer in America will be short-circuited. The new kinds of innovation of medicines will be put on the back burner. There will be, certainly, a reduction of reimbursements. The private health insurance companies would more likely have to be retracted and reduced.

Ninety percent of the people like their health insurance. That's going to be changed, because when you put the government in and have a public plan in the government, you're going to have a shifting. And you will -- and even Obama says, you know, that we're going to allow people to have their same health insurance. You can't with a public plan, because it's going to be a shift.

And if you want comprehensive health care, a public plan is going to be tantamount to having a partisan Democratic plan that I think is going to fail.

KING: Elizabeth, why is the current operation -- forget the pun -- so, so deficient?

EDWARDS: Well, I'd like -- I want to answer that. But I'd also like to respond...

KING: All right.

EDWARDS: ...because I -- because I think that what Tommy is saying is -- that the governor is saying is that it's -- or things...

THOMPSON: It's Tommy, Elizabeth.

EDWARDS: OK. Thank you, Tommy.

That is the mistaken kind of language we hear, that a public option creates a government-run program. What -- another part of what he said, though, if you listen to it, 90 percent of people are happy with their insurance. We have 46 million people who are uninsured who would like to have insurance and we have maybe 10 percent who are unhappy with their insurance and might be looking for something else.

Those are the people who are going to be moving, perhaps, to a public option. You're not going to see some huge shift in -- in the -- in the number of people who -- who go to private insurers. If private insurers do a good job of innovation, Tommy and I agree about that. But they don't do such a good job of keeping their administrative costs down and keeping the costs of their insurance down.

And when -- when their -- when the health executives are paid $30 billion a year -- and we had at least two major CEOs of health insurance, you can be pretty sure that the health insurance costs for those policyholders are going to be higher than they need to be.

And -- and so if we can keep those administrative costs down, maybe we can -- maybe it will have a good effect for both of them. Maybe the government will be required to be a little more innovative and maybe those insurance companies would be forced to keep their costs down.

KING: I want to have Tommy respond to that right after the break.

By the way, still to come, Bill Cosby.

THOMPSON: OK.

KING: And more of Elizabeth Edwards and Tommy Thompson, right after this.

(COMMERCIAL BREAK)

KING: Tommy, in response, can you say the insurance companies in America are doing a wonderful job?

THOMPSON: No. Of course I -- of course I can't. There's some that do a wonderful job, some do a poor job.

Let's face it, if you put the government in here, in which they don't have to have a -- make a profit, they're going to be able to undersell any private health insurance company and they're going to take away the business...

KING: So wouldn't we benefit from that?

THOMPSON: And it -- no, we wouldn't. If a company has -- is going to want to keep their own health insurance but knows the government is selling their health insurance cheaper, companies are going to migrate toward that and. You're going to see a demise of the private health insurance Industry in the country.

And if you want the government to control health insurance, which Democrats want and I think it's a terrible mistake, look at Medicare. It's going broke. Look at Medicaid -- breaking most of the states because of the costs. Look at Social Security. Everything the government really runs has not really measured up.

KING: But those things you mentioned...

THOMPSON: The private health insurance, we can make the...

KING: ...all the time...

THOMPSON: We can...

KING: Tommy, those things you...

THOMPSON: ...make the changes, Larry.

KING: Don't you think the public likes Medicare...

THOMPSON: We can make the changes on private health insurance...

KING: ...and loves Social Security?

THOMPSON: Oh, sure people do. But the truth of the matter is, they're going to broke. Medicare is going broke this year. And we can fix the health insurance industry. I'm not saying that the health insurance companies are perfect and should not be changed. We should. We should allow for guaranteed issuance, allowing people to come in. We should be able to cover all of the uninsured in America and do it in a competitive and free enterprise manner.

That's the way to have bipartisanship and that's the way...

KING: All right. Why couldn't that...

THOMPSON: ...to fix the health care (INAUDIBLE)...

KING: Why couldn't that work, Elizabeth?

EDWARDS: Well, because that's what we've been trying and it hasn't worked. And it always seems our costs go up and up. The costs have doubled since 2009, 2000 to 2009. The cost of our insurance has gone up 119 percent -- more than doubled. It's causing bank -- people to file bankruptcy. Sixty-two percent or 61 or 62 percent of the people who file bankruptcies cite medical costs as a substantial part of the reason why they -- why they had to file bankruptcy.

It is clearly not working. We're on a track right now where we could be paying, in 10 years, for our health care system overall, $40 trillion. We're going to have to get a hold of this. We can't -- and Tommy knows this. We can't stay on the same path we -- that we've been on.

And the very idea that -- that if you -- if the government does haven't to make a profit, therefore they're going to be able to under price the insurance companies, there are plenty of non-profits. HealthNet Colorado did a -- has done an analysis that said it didn't make any difference whether it was a profit or a non-profit company, that the price that they were offering this to consumers was the same -- all too high. And we need -- so we need somebody to be able to come in and put some downward pressure.

KING: Let me...

EDWARDS: You know, Federal Express and -- and UPS do fine in competition with the U.S. government.

KING: All right. Let me get call in.

Orlando, Florida, hello.

UNIDENTIFIED MALE: yes. I'd just like to ask Tommy Thompson, if my premium went from $500 a month five years ago to $2,500 a month today, does he feel that's fair?

THOMPSON: I've got to know what kind of coverage you've got, whether you changed it, who you've got it insured with. I'm not saying that it's fair or unfair. I don't know the facts.

But I want to tell you something. I want to come back to this private versus public. You know, you -- this is the issue that really is affecting whether or not we're going to have health reform.

KING: Right.

THOMPSON: I want health reform in America. And the way to do that is to look at the things that bring us together and we can reach a bipartisan thing and it's going to really help transform health -- health care in America and health insurance.

Number one, let's have something to do and change the system from a disease system to a wellness system. Let's do something about chronic illness. Let's manage diseases. Let's do something about the kinds of things like diabetes, like cancers and so on, that we can really impact and reduce the cost of health care. Seventy-five percent of the cost goes into chronic illness. And we can really change that by doing that. It can be done on a bipartisan.

Let's have the electronic medical records. Both parties want that. That's another 10 to 15 percent that we can take out of the cost, hold down health insurance and the premiums and still improve the system.

Let's do things about cessation of smoking.

All of these things can be done on a bipartisan basis. And we can fix the health care, we can reduce the costs and we can make it much more efficient.

That's what needs to be done in America.

KING: And we'll take a break and be right back with Elizabeth Edwards and Tommy Thompson.

Don't go away. (COMMERCIAL BREAK)

KING: We're back with Elizabeth Edwards and Tommy Thompson.

The debate over health care reform has gotten fierce. We've seen town halls turn into town brawls.

This from an event held by Congressman Barney Frank.

Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Why do you continue to support a Nazi policy, as Obama has, expressly supported this policy...

REP. BARNEY FRANK (D), MASSACHUSETTS: Wait. Let me...

UNIDENTIFIED FEMALE: -- why are you supporting it?

FRANK: When you ask me that question, I am going to revert to my ethnic heritage and answer your question with a question -- on what planet do you spend most of your time?

(END VIDEO CLIP)

KING: Elizabeth, is all of this deflecting away from the real -- the real debate?

EDWARDS: I think that it is. I mean you've seen the -- and I think that Tommy would probably reject some of the language that you've seen used to hype up crowds and some of the posters that you see.

We don't -- this is -- we are not unplugging grandma, as Senator Grassley said. We don't have death panels, as Senator Kyl said.

These kind of language, of course, generates an enormous amount of anger, an enormous amount of fear, when we have, as Tommy and I, can have reasonable discussion about the benefits, you know -- or, from my perspective, or the disadvantages, from his perspective, of a public option, which seems to be the center of the real controversy here.

We agree about almost everything else, but this seems to be the center. And we could have a reasonable discussion, but not when you use those kinds -- that kind of language.

KING: Tommy, would you agree?

THOMPSON: I think the language has gotten out of control. I think both sides -- I think Marty -- Barney Frank just come out and says what planet do you live on?

I mean if I was an elected official saying that to my constituents, I would be a little upset with my constituents (INAUDIBLE)...

KING: But if the constituent just said your president was a Nazi...

THOMPSON: Well, I'm saying the rhetoric is bad. But I think elected officials have got to temper their remarks, too. And it's just, you know, it's both sides.

I mean, it happens that, you know, that a lot of hyperbole, a lot of accusations are going on. But the truth of the matter is it's the American way. Americans should have an opportunity to influence legislation. And this legislation, Americans feel, are being crammed down their throats. They're upset about it.

They're afraid of the spending. They're afraid of the trillion dollars more in deficits. And they feel -- and I think rightly so -- that the government is spending way too much money and we've got to get it under control.

I agree with Elizabeth and myself -- I think we, Elizabeth and I could sit down and have a very constructive dialogue about public versus private. And I don't think we'd reach, convince each other, but I think we could certainly come out and articulate the issues.

And I think that we -- Elizabeth and I could come up -- and I think Democrats and Republicans. I think that's what we should do.

KING: But why don't...

THOMPSON: I think we should set aside those poison items and get down to trying and influence a transformation of health care. Cover the uninsured. Fix the insurance companies. Do something chronic illnesses. Give a tax credit so individual poor people that are the uninsured or the underinsured can buy health insurance in America...

KING: Why don't...

THOMPSON: ...and we would fix this problem.

KING: Why don't both parties appoint the two of you to sit down in a conference room, come out and whatever you decide is it?

We'll be back with more right after this.

(COMMERCIAL BREAK)

KING: Elizabeth Edwards, you have breast cancer. Tommy Thompson, your wife and daughter both had breast cancer.

For both of you, how does that affect your thinking in this?

Elizabeth?

EDWARDS: Well, you know, a lot of people who have breast cancer come up to me. And one of people who came up to me in Cleveland in 2007 was a working mother, who was said she was afraid for her children, because she couldn't go to the doctor despite the fact she felt a lump in her breast.

And she was whispering in my ear because she hoped that in America, you still had the power to whisper in the right person's ear and get the kind of changes you needed.

It is -- it is unconscionable that in a country of this wealth, a working mother cannot afford to buy the health insurance that will protect her and allow her to be a -- continue to be a good mother to her children.

KING: One of the keys, Tommy, is health a right?

Do we have the right to health?

THOMPSON: I -- I really believe we do. And I agree with Elizabeth, we should have health insurance for mothers. And there's many ways to do it. A tax credit for low income individuals to purchase health insurance would save so much more money and be the right thing to do. Many new companies and innovation like instead, and sexually transmitted diseases could break the barriers. There's companies like Liazon, which the guy asked me what about going from $500 to $2,500. This company can set up policies that everybody can be covered and hold down costs.

There's so much innovation out there, Larry, that's good for breast cancer patients, for individuals like my wife and daughter, who have had it, like Elizabeth still does, that we should be able to put the kind of dollars in research in order to do that. And we can fix the system.

Let's not damage the system by bringing in a public plan that is going to, I think, hurt and prevent really revolutionary transformation of health care in America.

KING: All right. What do you think is going to happen, Elizabeth?

EDWARDS: I hope that -- I was with -- with Tommy the whole way, until the last thing he said, which I think is more of this fearmongering. People need -- 14,000 Americans lose their health insurance every single day. And they lose it because it's too expensive. So unless we put a -- create a provider that's going to have cost accessible health insurance, which is apparently not going to be possible with these private insurers. I mean it's not possible today.

Right now, they have the most motivation of all time to make certain those people are not losing their coverage and yet they will not provide...

THOMPSON: Well...

EDWARDS: ...they will not provide a cost efficient program. And we can't do it -- I think it's -- it sounds like a great idea, let's do a tax rebate -- I mean a refundable tax credit to people -- to people so that they can get health insurance. Are we really going to give families $18,000 a year to pay for their health insurance next year?

Because that's what...

THOMPSON: No, we don't have to.

EDWARDS: Of course we have to. That's what -- that's what the average cost...

THOMPSON: No, we don't.

EDWARDS: That's the average cost of insurance next year...

THOMPSON: You put out...

EDWARDS: ...it's $18,000.

THOMPSON: You put out private -- you put private insurance out on a competitive basis, it would be down around $4,000 or $5,000; a refundable tax credit will cover that. You'll be able to solve a lot of the problems. You'll get a lot of the uninsured. The problem is, is that, you know, you...

EDWARDS: That's not just realistic, Tommy.

THOMPSON: It is -- it is, Elizabeth. It's very realistic.

EDWARDS: But that -- where can they get an insurance today?

THOMPSON: Put it out in a competitive way, like we did on Part D; like we did on Part D. We put drugs out for competitive bids and they've stabilized the drug prices.

EDWARDS: May...

THOMPSON: You put out the bids...

EDWARDS: No...

THOMPSON: ...for all the uninsured in every state and have the states hold and allow insurance companies to come in and bid on that, you will drive down the cost, put a refundable credit in for those individuals under 125 percent of poverty and we can cover everybody in America. And that's what you want, that's what I want.

EDWARDS: Well, there...

THOMPSON: And we can do it without the government running the health insurance.

EDWARDS: When the Republicans were in charge of doing something about health care, what they did was just what you said, prescription -- the prescriptions drug benefit for seniors. And what they decided was that the federal government could not negotiate the lowest possible price. We've protected -- protected the companies to the disadvantage of the American consumers. Again, we're seeing the Republicans protecting the companies -- the insurance companies -- to the disadvantage of the American consumer.

THOMPSON: No. Republicans want to protect health care in America. Democrats want to destroy it. If you want to -- if you want to call radical rhetoric...

EDWARDS: Of course we do not.

THOMPSON: ...Elizabeth -- well, then let's -- let's fix the system. Let's not -- let's not destroy it. Let's not have the government control health care...

KING: OK, I'll tell you what. I'm going to...

THOMPSON: People don't want it. People don't want it.

KING: Let's have both of you come back as this goes along, because you're both terrific.

Elizabeth, will you allow me just two quick personal questions?

EDWARDS: Sure, sir.

KING: I know you were so candid in the past about the impact of your husband's problems and your relationship.

How are things going?

EDWARDS: Things are going fine. We're getting the children ready for a new school year. Everything seems to be going pretty smoothly at my house.

KING: And the...

EDWARDS: But thank you for asking.

KING: And the continued questions about the paternity factor, is there any solution there -- DNA tests?

Do you know if anything is going to happen?

EDWARDS: I -- my expectation is at some point, something happens. And I hope for the -- for the sake of -- of this child that -- that it happens, you know, in a quiet way.

KING: How is your health?

EDWARDS: It's pretty good. I'm still -- I'm still out here fighting.

KING: Yes. You're stage four, though, right?

EDWARDS: Yes. Yes. No, it's a -- you know, the numbers don't look that optimistic. But I feel good and my recent -- I've had recent tests that show me in -- to be in pretty good health, all things considered.

KING: And, Tommy...

THOMPSON: Keep fighting, Elizabeth. We're...

KING: ...your family, how are they?

THOMPSON: First off, I'd just like to say, Elizabeth, we're pulling for and we're praying for you and keep fighting. We -- EDWARDS: Thanks.

THOMPSON: We think you're a great model. You're wrong on public insurance, but you're right on fighting for breast cancer. My wife and daughter, thank the good lord, are -- are doing well.

EDWARDS: That's great.

THOMPSON: And they're both working and doing great. And -- and this is one thing that's a common bond -- husbands and wives and children and that have go through cancer. Whether it be breast cancer or any other kinds of cancer, we've got to deal with it and we've got to find a cure for it. It's just ridiculous in America...

EDWARDS: It is.

THOMPSON: ...that we don't have a cure for breast cancer. When I was...

KING: Thank you.

THOMPSON: When I was running for president, I had a -- I had a motto that we're going to cure breast cancer by the year 2015. We can do it if we set our sights and set our will to do it.

KING: Thank you.

Thanks, both, very much, Elizabeth Edwards and Tommy Thompson.

EDWARDS: Thank you.

KING: We change gears.

THOMPSON: Thank you very much, Larry.

KING: But Bill Cosby next.

Thank you, guys.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL COSBY, COMEDIAN: These are our children. And we need no more cuts. We need help.

(END VIDEO CLIP) KING: Good news and bad news from the state of Pennsylvania. The good news; a 50 state study of test results by the Center on Education Policy shows that Pennsylvania is the only state to see increases in student achievement in elementary, middle and high school from 2002 through 2008. The bad news; a protracted and very partisan state budget impasse, including a fight over public education funding, might throw all of this into a turmoil.

Joining us from Philadelphia, Bill Cosby. The famed actor, comedian, education activist; he has a doctorate in education, and, of course, a best-selling author as well. In Harrisburg, Pennsylvania, our friend, the governor of Pennsylvania, Ed Rendell.

What do those test results show to you, Bill?

COSBY: You -- well, it means that we have made a great improvement over the years that Rendell has been in office. And he will give you the numbers. He sounds a lot better than I because he lived with them.

The most important thing is with the improvements that we are making, in the position we are in, why would anyone want to now make a cut or make cuts in something that is running towards perhaps 100 percent, instead of 70 percent?

KING: Now, this has national implications. School systems all over the country are facing budget cuts. California is in a crisis. Ed, what do you about it? It is a financial question. Where does the money come from?

GOV. ED RENDELL (D), PENNSYLVANIA: Well, I think we have to make choices, Larry. One of the choices we have to make is for our future. Our future depends on education. You know, we used to compete against Delaware, West Virginia, New York, New Jersey. We are competing against China, India, Singapore. And those countries are just off the charts in educational advancement.

We have to keep up. And the good news is we have done a great job of Pennsylvania, because the legislature and the administration together, we've invested over three billion dollars of addition funding on an annual basis for education. But now the crunch time rolls around, and the Republicans in the Senate say, no new revenue; we want to cut, cut, cut; and we want to cut a billion dollars out of public education.

I say we have to make cuts, and we have made 2.5 billion in those cuts, but we need to protect education. That means that raising reasonable revenues, getting rid of some of our sales tax exemptions, for example, as a possibility. There are a number of ways, without hurting the public badly, we can raise revenue.

KING: Bill, do you get what you pay for in education? The more you spend, do you get better schools, better education, kids?

COSBY: No. We need more money. For instance, it is 4,000 dollars per child. However, costs have gone up, and costs continue to go up. You can't pay 2,500 dollars for a brand-new car. So the important thing is that it costs 33,000 dollars a year to keep a person in prison. Well, let's look at the facts that we know. If someone by third grade is not doing well -- people who build prisons look at the numbers of the children not doing well and they begin to build more prisons according to children who are not doing well in third grade.

So I think that 8,000 per child would do very, very well, because then they would only be spending a smaller amount on the people who would be incarcerated, and we would lose those huge numbers.

KING: Let me get a break. And we will come right back with Bill Cosby and Governor Ed Rendell of Pennsylvania.

(COMMERCIAL BREAK)

KING: It's a national problem. We're focussing on Pennsylvania. We reached out, by the way, governor, to Pennsylvania's majority leader, Dominic Pileggi. His office provided this statement: "Senate Republicans have advance a proposal to increase public education funding by 14.1 percent. The governor's proposal would increase education funding even further, but it would require a massive tax increase." How do you respond, Ed?

RENDELL: First of all, they are not telling thank you truth, Larry. What they are using is stimulus funds. And they count the Special Education and Title One money as an increase. As you know, Special Ed money can only be used for special ed students, which are about five percent of the student population. And Title One money can only go into schools that have a high percentage of poverty kids. Sixty percent of our schools in Pennsylvania don't even get Title One money.

That's number one. Number two, they use the stimulus money to roll back the state level of education funding to '05, '06. When the stimulus goes away, it would leave a billion dollar hole. There is no way our school districts could make that up. They are not telling the truth, number one. Number two, every superintendent, every school board president in Republican areas have said that their budget would be disastrous for education, and we need to follow our budget, which continues to invest in education. And it is pretty clear.

KING: Bill, philosophically speaking, what is a good teacher worth? What's education worth? Couldn't we say, no matter what you spend, it is well spent, because you are educating our children. I mean, you could get out of hand with this, couldn't you?

COSBY: I don't know what you just dealt me. But --

KING: What I dealt you with is where you put a line.

COSBY: Well, it is how you spend the money also. I me, look, Larry, politicians have used education to have people vote them into office. They have used the Lottery, and we are going to give you better schools and more money for education. They use that so that there can be a state Lottery. They have used it all kinds of ways. And now because they don't want it, they now want to use a scare tactics -- scare tactic.

I'm looking at children that need better food in schools. They don't need this junk that they are being fed. I can get into that later. But that has to do with the health care. It has to could with whether the children can think properly. Our teachers, people who come out of college, who want to be teachers, don't do that, Larry, because they want to get money and become rich and retire. They do it because they want to save children.

And it is very, very important. Some of the things that we are losing in our schools, the way a school looks, the way a school feels, the way the books are not right, give children a feeling that education is not important. It gives a feeling to the children that nobody cares. Why should I? So they become highly truant. And it is very, very important. Stop cutting our education money.

KING: Ed, I can make a case, couldn't I, that there's nothing more important than educating your children?

RENDELL: There isn't. But you know, a very good point. It is not just throwing money after education. One of the things we are proud of in Pennsylvania is we invested in the right things. Pre- Kindergarten, full day kindergarten, smaller class sizes, after-school tutoring. The reason our scores have gone up so much is the after- school tutoring program, which makes it's easier for kids to get up to grade level in both reading and math.

So you have to target that money to programs that we know work. We shouldn't just spend willy-nilly. I'm against that, as much as I'm for education funding. We have done it in Pennsylvania. And Senator Pileggi should be proud of what we have done, because he has been a part of it.

KING: We are going to do a lot more on this. Thank you, guys. Obviously this deserves a lot of attention. We intend to give it a lot more on LARRY KING LIVE. Bill Cosby, Governor Ed Rendell.

The British government has released more of their previously confidential UFO files.

What's that? We will find out what's in those files next.

(COMMERCIAL BREAK)

KING: Have you seen this week's "Newsweek?" NASA is looking for aliens. The British government has released more of their previously confidential UFO files. Are we closer than ever to confirming extra- terrestrial life?

Joining us with all the latest news about space is Dr. Seth Shostak. He's a skeptic, a senior astronomer for the SETI Institute, Search for Extra-Terrestrial Intelligence, and author of "Confessions of an Alien Hunter, A Scientists' Search For Extra-Terrestrial Intelligence." In San Francisco, James Fox, film maker, UFO researcher. Before we get through this, we'll be out program. His new documentary, "I Know What I Saw," premiers October 5th on the History Channel. In London, our man, Nick Pope, used to run the British government's UFO project.

All our guests are staying put. We have to take a quick break. We will be right back.

(COMMERCIAL BREAK)

(NEWS BREAK)

KING: We'll start with Dr. Shostak. The organization is SETI, right?

DR. SETH SHOSTAK, SKEPTIC: That's correct.

KING: OK. The new NASA mission, Kepler, is going to apparently maybe find these things. Big story in "Newsweek." What do you make of it?

SHOSTAK: It's one of the more important things that has happened in astronomy for decades, Larry, because it is going to answer one question: how many cousins of Earth are there out there? How many planets are out there in the universe that are something like the Earth.

KING: Do you think they might be inhabitable?

SHOSTAK: You don't know if they're inhabitable. All you know is they are the right size, the right place. They could be inhabitable.

KING: James, do you salute this?

JAMES FOX, FILM MAKER, "I KNOW WHAT I SAW": You know, I do. Sometimes when you look for something, it could be right under your nose.

KING: Meaning?

FOX: I'm not saying that UFOs are of extra-terrestrial origin. But they're certainly, through the process of elimination -- doesn't appear to be -- excuse me, a trustful explanation a lot of times.

KING: Nick Pope, what's the British government saying about this? Does it say that there are -- there are extra-terrestrials?

NICK POPE, UFO RESEARCHER: No. The position of the British government is that it remains open-minded about the possibilities. It looked at the UFO phenomenon for several decades. We found no absolute proof positive of any extra-terrestrial visitation. But we have found consistently over the years some extremely interesting sightings that we couldn't explain in conventional terms. That's why I support any scientific effort to study this.

KING: Why isn't the United States more open about this, like Britain is, at least saying it might be there?

SHOSTAK: At lot of stuff has been released by the Freedom of Information Act. It is also the case that, you know, you have to consider, well, why is it that all the evidence is stacked up by the U.S. government? This is the same government that runs FEMA. They are doing a heck of a job with UFOs. They have been lying administrations sine Roswell. Have they covered it all up? I can hardly believe that the government has that much to say about it.

KING: James, you did the documentary "I Know What I Saw." It premieres October 5th. What do you believe, James?

FOX: I believer that there are structured craft of unknown origin whizzing around in our air space, whose flight characteristics are so beyond anything we've had. This is well documented for the last 60 years. I wanted to say that we managed to obtain an interview that was done in 1979 by Dr. J. Allen Hynek, who investigated UFOs for 22 years for the US Air Force. His job was to give a prosaic explanation when there clearly wasn't some times.

He recanted what he had done for the Air Force, and went on the record before he died, stating that we were most likely being visited, and that, you know, the flight performances of these things were just so far beyond anything that we have. I'm not saying that they're ET. But I'm saying we can no longer deny -- I think once this film comes out, people will really see that the debate will shift from do they exist to who's actually piloting these things.

KING: Nick, you were part of the effort to track UFO sightings. Let's say they're there. What are they doing there? Why do they keep circling? What are they finding? What is it all about?

POPE: I have no idea. I mean, to a certain extent, I mean, one could speculate aimlessly about all of this. We looked at it at the Ministry of Defense purely as a defense of national security issue. And to a lesser extent -- but we do have cases where these things come dangerously close to aircraft -- as a flight safety issue. But I'm not sure we at the ministry really thought that it was going to be profitable to speculate too much, because our unit was a very small one.

There were a lot of people who said, well, you shouldn't be wasting taxpayers' money on this sort of stuff anyway. So we tended to downplay this subject, even ourselves sometimes. But we said, look, if there's something in our air space, we know -- we need to know what it is. And particularly if its flight characteristics suggest some sort of technology, whether that technology is Soviet or whatever -- obviously we're interested in things like aerodynamics and propulsion systems.

KING: James Fox, your new documentary, James, "I Know What I Saw," assembles accounts from various UFO witnesses from around the world. Nick Pope is one of them. Let's take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It glided over my house. And there was absolutely no noise.

UNIDENTIFIED MALE: We saw what I thought to be kind of a boomerang shape.

UNIDENTIFIED MALE: I don't know if passengers can see this aircraft.

FIFE SYMINGTON, FORMER GOVERNOR OF ARIZONA: I'm Fife Symington. In 1977, during my second term as governor of Arizona, I saw something that defied logic and challenged my reality.

JIMMY CARTER, FORMER PRESIDENT: I saw one, but I don't know if it just disappeared.

COL. GORDON COOPER, ASTRONAUT: I saw it fly right over and put down over three little gear and landed out on the dry lake bed.

(END VIDEO CLIP)

KING: When we come back I'll ask Dr. Shostak what theories he might support to explain all this. Don't go away.

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KING: I'm often asked what I think about this. I don't often give my opinions on this program, but I'm certainly open to this. I'm not going to discount it. Anything's possible. And I think the public wants there to be something there. I don't think the government is afraid we would panic. I don't buy that theory. What theory do you support?

SHOSTAK: I think there's plenty of life in space. One of the things we've learned in the last dozen years, there's probably a trillion planets just in our galaxy. Not all of them are going to be bad. Some of them are going to be good. So I think there's plenty of life out there.

But if you're going to claim there's life here, then where's the evidence we can stack up in the Smithsonian? I don't see it? Where's the evidence that convinces the scientists?

KING: Yes, why, James -- why would they hide it?

FOX: Well, I addressed that issue in the film. I think one of the reasons is apparently we don't necessarily have control of our air space. And no governing body want to admit that. These things apparently fly rings around our fastest jets, and have been doing so in the modern UFO period for over last six decades.

KING: Nick, if they're controlling our air space, to what avail? We seem to fly and land OK.

POP: Well, I certainly wouldn't go so far as to say they control our air space. That said, there have been, as James said, plenty of encounters over the years where both commercial airline pilots and military pilots -- and I've spoken to many of them -- have actually seen these things up close and personal, and where there's corroborating evidence in terms of radar. But I guess what I'd like to see -- it always strikes me, as somebody with 21 years of experience in government, that actually the UFO community and the SETI community are arguably looking for the same thing, but in different places and with different methodologies. I guess I would like them to reach out on each other a little bit.

FOX: Nick, would you do me a favor, please?

KING: Hold on, Jim.

SHOSTAK: Actually, I'm open on that. I almost consider myself a part-time UFO investigator. Larry, every day I get e-mails, phone calls and -- well, telephone calls and e-mails from people who are having difficulty with aliens in their personal life, who have seen things. I can't think of a single example where I thought, this is a hoax. They've seen something. It's worth investigating. The evidence is just not there to convince people.

KING: James, what were you going to say?

FOX: I'd say to Seth, basically, is that the very person whose job it was to debunk UFOs for the UF Air Force for 22 years, Dr. Hynek, did a 180 and basically came out in 1979 and earlier, saying these things clearly did not appear to be of terrestrial origin, just because of the nature of their flight characteristics.

(CROSS TALK)

FOX: I hear you, Seth. I'm not saying that I'm a complete believer myself. But there's a physical phenomenon taking place here, with very unambiguous UFO accounts, radar recordings and photographs, and multi-eyewitness accounts. There has to be some sort of explanation. If it's not us, who is it? It's either someone's been in possession of this technology for over 60 years. And if they have, then they're in possession of revolutionary technology. And if not, then we're being visited.

KING: Nick, do you want to believe?

POPE: Well, like Seth, I'm convinced there must be life out there. And I think it would be one of the most stupendous discoveries of all time. So, yes, I think it would be a very boring and lonely universe if we were the only life. After all, it's one of those great fundamental questions, isn't it, are we alone or not?

KING: So we've been boring him all this time, because we don't know, right, Seth? It's a boring world.

SHOSTAK: But it may change within 10 or 20 years.

KING: Can I --

SHOSTAK: I think we'll have an answer to the question --

KING: James, quickly. POPE: A quick question. Seth, I just want you -- how can you explain what people are seeing, airline pilots, radar operators, military guys? These are unambiguous cases. In some cases they've actually touched these things. What are they, Seth, in your opinion? Have you looked into it? Have you talked to witnesses?

SHOSTAK: Well, I have.

KING: Quickly.

SHOSTAK: But the fact that they're unexplained doesn't mean they're alien visitors. They are simply unexplained. There are a lot of unexplained murderers in Los Angeles, but it doesn't mean that these murders were committed by --

KING: Thank you all very much. We'll hopefully some day have an answer. As we wrap up, Don Hewitt, the CBS News man who invented "60 Minutes," produced it for 36 years, died today of pancreatic cancer. He was 86. What an innovator. What a show man. One heck of a storyteller, as anyone who saw his dozen or so appearances on this program knows.

Our thoughts go out to Don Hewitt's his wife and his children, and to the entire CBS News family. They lost a great one today. Time now for Anderson Cooper and "AC 360." Anderson?

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