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Anderson Cooper 360 Degrees

President Obama Spars with Republicans

Aired January 29, 2010 - 23:00   ET

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

SOLEDAD O'BRIEN, CNN GUEST ANCHOR: Good evening, again, Soledad O'Brien here, in for Anderson Cooper.

President Obama laid down two big challenges to Republicans in his State of the Union address. One, stop the political slash and burn, and two got any better ideas about how to fix health care and the economy? Speak up. I'm all ears.

Today he gave them a chance to answer to both. He also gave the American public a chance to judge how well he, himself, is meeting his challenge of changing the tone. It all went down at a remarkable meeting at the House Republican caucus in Baltimore on live TV.

We're bringing you the highlights on this special "Raw Politics" edition of AC360.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I very much am appreciative of not only the tone of your introduction, John but also the invitation that you extended to me. You know what they say, keep your friends close, but visit the Republican caucus every few months.

Now, part of the reason I accepted your invitation to come here was because I wanted to speak with all you and not just to all of you. So I'm looking forward to taking your questions and having a real conversation in a few moments and I hope that the conversation we begin here doesn't end here; that we can continue our dialogue in the days ahead.

It's important to me that we do so, it's important to you, I think, that we do so but most importantly it's important to the American people that we do so.

I've said this before, but I'm a big believer not just in the value of a loyal opposition, but in its necessity. Having differences of opinion, having a real debate about matters of domestic policy and national security, that's not something that's only good for our country, it's absolutely essential.

It's only through the process of disagreement and debate that bad ideas get tossed out and good ideas get refined and made better. And that kind of vigorous back and forth, that imperfect but well-founded process, messy as it often is, is at the heart of our democracy. And it's what makes us the greatest nation in the world. So, yes, I want you to challenge my ideas and I guarantee you that after reading this I may challenge a few of yours. I want you to stand up for your beliefs and knowing this caucus I have no doubt that you will. I want us to have a constructive debate. The only thing I don't want -- and here I am listening to the American people and I think they don't want either -- is for Washington to continue being so Washington-like.

I know folks when we're in town there spent a lot of time reading the polls and looking at focus groups and interpreting which party has the upper hand in November and in 2012 and so on and so on and so on. That's their obsession. And I'm not a pundit. I'm just a president. So take it for what it's worth.

But I don't believe that the American people want us to focus on our job security. No, they want us to focus on their job security.

I don't think they want more gridlock. I don't think they want more partisanship. I don't think they want more obstruction.

They didn't send us to Washington to fight each other in some sort of political steel cage match to see who comes out alive. That's not what they want. They sent us to Washington to work together to get things done and to solve the problems that they're grappling with every single day.

And I think your constituents would want to know that despite the fact it doesn't get a lot of attention, you and I have actually worked together on a number of occasions. There have been times where we've acted in a bipartisan fashion. And I want to thank you and your Democratic colleagues for reaching across the aisle.

Now, there has been, for example, broad support for putting in the troops necessary in Afghanistan to deny al Qaeda safe haven. To break the Taliban's momentum and to train Afghan security forces. There's been broad support for disrupting, dismantling and defeating al Qaeda. And I know that we're all united in our admiration of our troops.

So, today, in line with what I stated at the State of the Union, I've proposed a new jobs tax credit for small business. And here's how it would work. Employers would get a tax credit of up to $5,000 for every employee they add in 2010. They'd get a tax break for increases in wages as well. So if you raise wages for employees making under $100,000 we'd refund part of your payroll tax for every dollar you increase those wages faster than inflation.

It's a simple concept. It's easy to understand. It would cut taxes for more than one million small businesses. So I hope you join me. Let's get this done.

I want to eliminate the capital gains tax for small business investment and take some of the bailout money the Wall Street banks have returned and use it to help community banks start lending to small businesses again.

So join me. I am confident that we can do this together for the American people. And there's nothing in that proposal that runs contrary to the ideological predispositions of this caucus. The question is what's going to keep us from getting this done?

I've proposed a modest fee on the nation's largest banks and financial institutions to fully recover for taxpayers' money that they provided to the financial sector when it was teetering on the brink of collapse. And it's designed to discourage them from taking reckless risks in the future.

If you listen to the American people, John, they'll tell you they want their money back. Let's do this together; Republicans and Democrats.

I've proposed that we close tax loopholes that reward companies for shipping American jobs overseas and instead give companies greater incentive to create jobs right here at home. Surely that's something that we can do together; Republicans and Democrats.

We know that we've got a major fiscal challenge in reining in deficits that have been growing for a decade and threaten our future. That's why I've proposed a three-year freeze in discretionary spending other than what we need for national security. That's something we should do together. That's consistent with a lot of the talk both in Democratic caucuses and Republican caucuses. We can't blink when it's time to actually do the job.

And I know how bitter and contentious the issue of health insurance reform has become. And I will eagerly look at the ideas and better solutions on the health care front. If anyone here truly believes our health insurance system is working well for people, I respect your right to say so, but I just don't agree. And neither would millions of Americans with pre-existing conditions who can't get coverage today or find out that they lose their insurance just as they're getting seriously ill. That's exactly when you need insurance.

And for too many people they're not getting it. I don't think a system is working when small businesses are gouged and 15,000 Americans are losing coverage every single day. When premiums have doubled and out-of-pocket costs have exploded and they're poised to do so again.

I mean to be fair the status quo is working for the insurance industry, but it's not working for the American people. It's not working for our federal budget. It needs to change. This is a big problem. And all of us are called on to solve it.

Let me close by saying this. I was not elected by the Democrats or Republicans but by the American people. That's especially true because the fastest growing group of Americans are independents. That should tell us both something.

So I am optimistic. I know many of you individually. And the irony, I think, of our political climate right now is that compared to other countries the differences between the two major parties on most issues is not as big as it's represented. But we've gotten caught up in the political game in a way that's just not healthy. It's dividing our country in ways that are preventing us from meeting the challenges of the 21st century.

I'm hopeful that the conversation we have today can help reverse that. So thank you very much. Thank you, John.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

REP. MIKE PENCE (R), INDIANA: Now, last year -- about the time you met with us, unemployment was 7.5 percent in this country. Your administration and your party in Congress told us that we'd have to borrow more than $700 billion to pay for a so-called stimulus bill that was a piecemeal list of projects and boutique tax cuts, all of which was -- we were told had to be passed or unemployment would go to eight percent, as your administration said.

Well, unemployment is 10 percent now, as you well know, Mr. President. Here in Baltimore it's considerably higher.

Now, Republicans offered a stimulus bill at the same time. Cost half as much as the Democrat proposal in Congress and using your economic analyst models it would have created twice the jobs at half the cost. It essentially was across the board tax relief, Mr. President.

Now, we know you've come to Baltimore today and you've raised this tax credit which was last promoted by President Jimmy Carter, but the first question I would pose to you very respectfully, Mr. President, is would you be willing to consider embracing in the name of little David Carter Jr. and his dad, in the name of every struggling family in this country, the kind of across the board tax relief that Republicans have advocated, that President Kennedy advocated, that President Reagan advocated and that has always been the means of stimulating broad-based economic growth?

OBAMA: Well, the -- there was a lot packed into that question there.

Let's talk about just the jobs environment generally. You're absolutely right that when I was sworn in -- the hope was that unemployment would remain around eight percent or in the eight percent range. That was just based on the estimates made by both conservative and liberal economists because at that point not all the data had trickled in.

We had lost 650,000 jobs in December. I'm assuming you're not faulting my policies for that. We had lost -- it turns out, 700,000 jobs in January, the month I was sworn in. I'm assuming it wasn't my administration policies that accounted for that. We lost another 650,000 jobs the subsequent month before any of my policies had gone into effect. So I'm assuming that wasn't as a consequence of our policies. That doesn't reflect the failure of the Recovery Act.

The point being that what ended up happening was that the job losses from this recession proved to be much more severe in the first quarter of last year going into the second quarter of last year than anybody anticipated.

So I mean, I think we -- we can score political points on the basis of the fact that we underestimated how severe the job losses were going to be. But those job losses took place before any stimulus -- whether it was the ones that you guys have proposed or the ones that we proposed -- could have ever taken into effect.

The package that we put together at the beginning of the year, the truth is should have reflected and I believe reflected what most of you would say are common sense things. This notion that this was a radical package is just not true. A third of them were tax cuts and they weren't -- and when you say they were boutique tax cuts, Mike, 95 percent of working Americans got tax cuts. Small businesses got tax cuts. Large businesses got help in terms of their depreciation schedules.

I mean, it was a pretty conventional list of tax cuts. A third of it was stabilizing state budgets. There is not a single person in here who had it -- not been for what was in the stimulus package wouldn't be going home to more teachers laid off, more firefighters laid off, more cops laid off.

And the notion that I would somehow resist doing something that cost half as much but would produce twice as many jobs, why would I resist that? I -- I wouldn't. I mean, that's my point, is that I am not an ideologue. I'm not. It doesn't make sense if somebody could tell me, you could do this cheaper and get increased results that I wouldn't say, great.

The problem is I couldn't find credible economists who would back up the claims that you just made. Now, we can -- here's what I know going forward, though. Right, I mean, we're talking -- we were talking about the past. We can talk about this going forward.

I have looked at every idea out there in terms of accelerating job growth to match the economic growth that's already taking place.

The jobs credit that I'm discussing right now is one that a lot of people think would be the most cost effective way for encouraging people to pick up their hiring. There may be other ideas that you guys have. I am happy to look at them. And I'm happy to embrace them. I suspect I will embrace some of them; some of them I've already embraced.

But the question I think we're going to have to ask ourselves is, as we move forward, are we going to be examining each of these issues based on what's good for the country, what the evidence tells us, or are we going to be trying to position ourselves so that come November we're able to say the other party, it's their fault?

If we take the latter approach then we're probably not going to get much agreement. If we take the former I suspect there's going to be a lot of overlaps, all right?

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

PENCE: Marsha Blackburn, Tennessee.

OBAMA: Hey.

REP. MARSHA BLACKBURN (R), TENNESSEE: Thank you, Mr. President. And thank you for acknowledging that we have ideas on health care because indeed we do have ideas. We have plans. We have over 50 bills. We have lots of amendments that would bring health care ideas to the forefront. And if those good ideas aren't making it to you, maybe it's the House Democrat leadership...

OBAMA: Well...

BLACKBURN: ...that is an impediment...

OBAMA: ...now...

BLACKBURN: ...instead of a conduit. When will we look forward to starting anew and sitting down with you to put all of these ideas on the table? To look at these lessons learned? To benefit from that experience and to produce a product that is going to reduce government interference, reduce cost and be fair to the American taxpayer?

OBAMA: Actually I've gotten many of your ideas. I've taken a look at them, even before I was handed this. Some of the ideas we have embraced and are in our package. Some of them are embraced with caveats.

So let me give you an example. I think, one of the proposals that has been focused on by the Republicans as a way to reduce cost is allowing insurance companies to sell across state lines. We actually include that as part of our approach. But the caveat is we've got to do so with some minimum standards because otherwise what happens is that you could have insurance companies circumvent a whole bunch of state regulations about, you know, basic benefits or what have you, making sure that a woman is able to get mammograms as part of preventative care, for example.

Part of what could happen is -- the insurance companies could go into states and cherry pick and just get those who are healthiest and leave behind those who are least healthy, which would raise everybody's premiums who weren't healthy. Right?

So it's not that many of these ideas aren't workable, but we have to refine them to make sure that they don't just end up worsening the situation for folks rather than making it better.

Now, what I said at the State of the Union is what I still believe. If you can show me and if I get confirmation from health care experts -- people who know the system and how it works -- including doctors and nurses, ways of reducing people's premiums, covering those who do not have insurance, making it more affordable for small businesses, having insurance reforms that ensure people have insurance even when they've got pre-existing conditions, that their coverage is not dropped just because they're sick, that young people right out of college or -- as they are entering into workforce can still get health insurance.

If those component parts are things that you care about and want to do, I'm game.

At its core if you look at the basic proposal that we put forward that has an exchange so that businesses and the self-employed can buy in to a pool and can get bargaining power the same way big companies do, the insurance reforms that I've already discussed making sure that there's choice in competition for those who don't have health insurance.

The component parts of this thing are pretty similar to what Howard Baker, Bob Dole and Tom Daschle proposed at the beginning of this debate last year.

Now, you may not agree with Bob Dole and Howard Baker and Tom -- certainly you don't agree with Tom Daschle on much. But that's not a radical bunch. But if you were to listen to the debate and frankly, how some of you went after this bill, you'd think that this thing was some Bolshevik plot.

Now, I mean, that's how you guys -- that's how you guys presented it. And so I'm thinking to myself, well, how is it that a plan that is pretty centrist at -- no, look, I mean, I'm just saying -- And I know you guys disagree, but if you look at the facts of this bill, most independent observers would say this is actually what's many Republicans -- it's similar to what many Republicans proposed to Bill Clinton when he was doing his debate on health care.

So all I'm saying is we've got to close the gap a little bit between the rhetoric and the reality. I'm not suggesting that we're going to agree on everything, whether it's on health care or energy or what have you. But if the way these issues are being presented by the Republicans is that this is some wild-eyed plot to impose huge government in every aspect of our lives, what happens is you guys then don't have a lot of room to negotiate with me.

I mean, the fact of the matter is that many of you, if you voted with the administration on something, are politically vulnerable in your own base, in your own party. You've given yourselves very little room to work in a bipartisan fashion because what you've been telling to your constituents is this guy's doing all kinds of crazy stuff that's going to destroy America.

And I would just say that we have to think about tone. It's not just on your side, by the way; it's on our side as well. This is part of what's happened in our politics, where we demonize the other side so much that when it comes to actually getting things done it becomes tough to do.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

REP. MIKE PENCE (R), INDIANA: Dr. Tom Price from Georgia. And then we'll have one more after that if your time permits, Mr. President.

OBAMA: You know, I'm having fun.

PENCE: Ok.

OBAMA: This is great.

PENCE: So are we.

Tom Price, Georgia.

REP. TOM PRICE (R), GEORGIA: Mr. President, I want to stick on the general topic of health care but ask a very specific question. You have repeatedly said -- most recently at the State of the Union -- that Republicans have offered no ideas and no solutions. In spite of the fact...

OBAMA: I don't think I said that. What I said was, in the context of health care -- I remember that speech pretty well. It was only two days ago. I said I welcome ideas that you might provide. I didn't say that you hadn't provided ideas. I said I welcome those ideas that you'll provide.

PRICE: President, multiple times from your administration there have come statements that Republicans have no ideas and no solutions. In spite of the fact we've offered, as demonstrated today, positive solutions to all of the challenges we face including the energy and the economy and health care. Specifically in the area of health care, this bill, HR 3400 that has more co-sponsors than any health care bill in the House. It's a bill that would provide health coverage for all Americans, would correct the significant insurance challenges of portability and pre-existing, would solve lawsuit abuse issue which isn't addressed significantly in the other proposals that went through the House and the Senate, would write into law that medical decisions are made between patients and families and doctors and does all of that without raising taxes by a penny.

But my specific question is what should we tell our constituents who know that Republicans have offered positive solutions to the challenges that Americans face and, yet, continue to hear out of the administration that we've offered nothing?

OBAMA: Tom, look, I have to say that -- let's just take the health care debate. It's probably not constructive for us to try to debate a particular bill. This isn't the venue to do it.

But if you say we can offer coverage for all Americans and it won't cost a penny, that's just not true. You can't structure a bill where suddenly 30 million people have coverage and it costs nothing. If...

PRICE: (AUDIO GAP) and I understand we're not debating this bill. But what should we tell our constituents who know that we have offered these solutions and, yet, hear from the administration that we have offered nothing?

OBAMA: Let me -- I'm using this as a specific example, so let me answer your question. You asked a question, I want to answer it. It's not enough if you say, for example, that we've offered a health care plan, and I look up -- this is just under the section that you've just provided me or the book you've just provided me, Summary of GOP Health Care Reform Bill.

The GOP plan will lower health care premiums for American families and small businesses, addressing America's number one priority for health reform. I mean, that's an idea that we all embrace, but specifically it has to work. There has got to be a mechanism in these plans that I can go to an independent health care expert and say, is this something that will actually work? Or is it boilerplate?

MIKE: Mr. President, a point of clarification. What's in the "Better Solution Book" are all the legislative proposals that were offered...

OBAMA: I understand -- I've actually read your bills.

PENCE: ... throughout 2009.

OBAMA: I understand.

PENCE: And so rest assured the summary document you received is backed up by precisely the kind of detailed legislation that Speaker Pelosi and your administration have been busy ignoring for 12 months.

OBAMA: Mike, hold on a second. No, no, no, no. Hold on a second, guys. You know, Mike, I've read your legislation. I mean, I take a look at this stuff and the good ideas we take.

But here's the thing -- here's the thing I guess that all of us have to be mindful of. It can't be all or nothing, one way or the other. Right?

What I mean by that is this. If we put together a stimulus package in which a third of it are tax cuts that normally you guys would support, and support for states and the unemployed and helping people stay on COBRA that your governor certainly would support, Democrat or Republican, and then you have infrastructure and maybe there's some things in there that you don't like in terms of infrastructure or you think the bill should have been $500 billion instead of $700 billion or there's this provision or that provision that you don't like.

If there's uniform opposition because the Republican caucus doesn't get 100 percent or 80 percent of what you want then it's going to be hard to get a deal done. That's because -- that's not how democracy works. So my hope would be that we can look at some of these component parts of what we're doing and maybe we break some of them up on different policy issues.

So if the good Congressman from Utah has a particular issue on lobbying reform that he wants to work with us on, we may not be able to agree on a comprehensive package on everything but there may be component parts we can work on. You may not support our overall jobs package, but if you look at the tax credit that we're proposing for small businesses right now it is consistent with a lot of what you guys have said in the past. And just the fact that it's my administration that's proposing it shouldn't prevent you from supporting it.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

PENCE: Mr. President, a point of clarification. What's in the "Better Solution Book" are all the legislative proposals that were offered...

OBAMA: I understand -- I've actually read your bills.

PENCE: ... throughout 2009.

OBAMA: I understand.

PENCE: And so rest assured the summary document you received is backed up by precisely the kind of detailed legislation that Speaker Pelosi and your administration have been busy ignoring for 12 months.

OBAMA: Mike, hold on -- hold on a second. No, no, no, no. Hold on a second, guys.

You know, Mike, I've read your legislation. I mean, I take a look at this stuff and the good ideas we take.

But here's the thing -- here's the thing I guess that all of us have to be mindful of. It can't be all or nothing, one way or the other. Right?

And what I mean by that is this. If we put together a stimulus package in which a third of it are tax cuts that normally you guys would support. And support for states and the unemployed and helping people stay on COBRA that your governor certainly would support -- Democrat or Republican. And then you have infrastructure and maybe there's some things in there that you don't like in terms of infrastructure or you think the bill should have been $500 billion instead of $700 billion or there's this provision or that provision that you don't like.

If there's uniform opposition because the Republican caucus doesn't get 100 percent or 80 percent of what you want then it's going to be hard to get a deal done. That's because that's not how democracy works. So my hope would be that we can look at some of these component parts of what we're doing and maybe we break some of them up on different policy issues.

So if the good Congressman from Utah has a particular issue on lobbying reform that he wants to work with us on, we may not be able to agree on a comprehensive package on everything but there may be some component parts we can work on.

You may not support our overall jobs package, but if you look at the tax credit that we're proposing for small businesses right now it is consistent with a lot of what you guys have said in the past. And just the fact that it's my administration that's proposing it shouldn't prevent you from supporting it.

That's my point.

PENCE: Peter Roskam from the great state of Illinois.

OBAMA: Oh, Peter's an old friend of mine.

PENCE: That's not surprising.

OBAMA: Peter and I have had many debates.

REP. PETER ROSKAM (R), ILLINOIS: Well, this won't be one.

Mr. President, I heard echoes today of the state senator I served with in Springfield and there was an attribute and characteristic that you had that I think served you well there. You took on some very controversial subjects, death penalty reform, you and I...

OBAMA: We worked on it together.

ROSKAM: ... negotiated on it. You took on ethics reform. You took on some big things.

One of the keys was you rolled your sleeves up. You worked with the other party and ultimately you were able to make the deal.

Now, here's an observation. Over the past year in my view that attribute hasn't been in full bloom. By that I mean you've gotten this subtext of House Republicans that sincerely want to come and be a part of this national conversation toward solutions but they've really been stiff-armed by Speaker Pelosi.

I know you're not in charge of that chamber, but there really is this dynamic of, frankly, being shut out. When John Boehner and Eric Cantor presented last February to you some substantive job creation, our stimulus alternative, the attack machine began to marginalize Eric and we can all look at the articles as "Mr. No" and there was this pretty dark story ultimately that wasn't productive and wasn't within the sort of framework you're articulating today.

So here's the question. Moving forward I think all of us want to hit the reset button on 2009. How do we move forward, and on the job creation piece in particular, you mentioned Colombia, you mentioned Panama, you mentioned South Korea. Are you willing to work with us, for example, to make sure those FTAs get called? The obstacle is, frankly, the politics within the Democratic caucus.

OBAMA: Well, the -- first of all Peter and I did work together effectively on a whole host of issues. One of our former colleagues is right now running for governor on the Republican side in Illinois. In the Republican primary, of course, they're running ads of him saying nice things about me, poor guy. Although that's one of the points that I made earlier, I mean, we have to be careful about what we say about each other sometimes. Because it boxes us in, in ways that makes it difficult for us to work together because our constituents start believing us.

They don't know sometimes this is just politics what you guys, you know -- or folks on my side -- do sometimes. So, just a tone of civility instead of slash and burn would be helpful. The problem we have sometimes is a media that responds only to slash and burn style politics.

You don't get a lot of credit if I say, you know, I think Paul Ryan's a pretty sincere guy and has a beautiful family. Nobody's going to run that in the newspapers, right?

You know -- and by the way, in case he's going to get a Republican challenge, I didn't mean it. Don't want to hurt you, man.

But on the specifics, I think both sides can take some blame for a sour climate on Capitol Hill. What I can do maybe to help is to try to bring Republican and Democratic leadership together on a more regular basis with me. That's, I think, a failure on my part is to try to foster better communications even if there's disagreement. And I will try to see if we can do more of that this year.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

REP. JEB HENSARLING (R), TEXAS: Your administration proposed a budget that would triple the national debt over the next ten years. Surely you don't believe ten years from now we will be mired in this recession to propose new entitlement spending and move the cost of government to almost 24.5 percent of the economy. Now, very soon, Mr. President, you're due to submit a new budget and my question is...

OBAMA: I know there's a question in there somewhere because you're making a whole bunch of assertions, half of which I disagree with and I'm having to sit here listening to them.

At some point I know you're going to let me answer.

HENSARLING: That's the question. You are soon to submit a new subject, Mr. President. Will that new budget like your old budget triple the national debt and continue to take us down the past of increasing the cost of government to almost 25 percent of our economy?

That's the question, Mr. President.

OBAMA: All right. Jeb, with all due respect, I have to take this last question as an example of how it's very hard to have the kind of bipartisan work that we're going to do. Because the whole question was structured as a talking point for running a campaign.

Now, look, let's talk about the budget once again because I'll go through it with you line by line. The fact of the matter is that when we came into office the deficit was $1.3 trillion, $1.3 trillion. So when you say that suddenly that I have a monthly budget that is higher -- a monthly deficit that's higher than the annual deficit left by the Republicans, that's factually just not true. And you know it's not true.

And what is true is that we came in already with a $1.3 trillion deficit before I had passed any law. What is true is we came in with $8 trillion worth of debt over the next decade; had nothing to do with anything that we had done. It had to do with the fact that in 2000 when there was a budget surplus of $200 billion, we had Republican administration and a Republican Congress and we had two tax cuts that weren't paid for, we had a prescription drug plan -- the biggest entitlement plan, by the way, in several decades that was passed without it being paid for, you had two wars that were done through supplementals.

And then you had $3 trillion projected because of lost revenue of this recession. That's $8 trillion.

Now, we increased it by a trillion dollars because of the spending that we had to make on the stimulus. I am happy to have any independent fact checker out there take a look at your presentation versus mine in terms of the accuracy of what I just said.

Now -- now -- going forward, here's the deal. I think Paul, for example, the head of the budget committee, has looked at the budget and has made a serious proposal. I've read it. I can tell you what's in it. And there's some ideas in there that I would agree with but there's some ideas that we should have a healthy debate about because I don't agree with.

Now, Paul's approach, and I want to be careful not simplifying this because I know you have got a lot of detail in your plan. But if I understand it correctly would say we're going to provide vouchers of some sort for current Medicare recipients at the current level -- no?

No? 55 -- well, no, I understand. I mean, there's a grandfathering in but just for future beneficiaries. That's why I said I didn't want to -- I want to make sure that I'm not being unfair to your proposal but I just want to point out that I've read it. And the basic idea would be at some point we hold Medicare cost per recipient constant as a way of making sure that that doesn't go way out of whack. And I'm sure there's some details that...

REP. PAUL RYAN (R), WISCONSIN: A blend of inflation and health inflation. The point of our plan is, because Medicare, as you know, is a $38 trillion unfunded liability.

OBAMA: Right.

RYAN: It has to be reformed for younger generations because it won't exist because it's going bankrupt. The premise of our idea is, look, why not give people the same kind of health care plan we here have in Congress? That's the kind of reform we're proposing for Medicare.

OBAMA: Look, look, as I said before this is an entirely legitimate proposal.

The problem is twofold. One is that depending on how it's structured if recipients are suddenly getting a plan that has their reimbursement rates going like this but health care costs are still going up like that then over time the way we're saving money is essentially by capping what they're getting relative to their costs.

Now, I just want to point out, and this brings me to the second problem, when we made a very modest proposal as part of our package, our health care reform package, to eliminate the subsidies going to insurance companies for Medicare advantage, we were attacked across the board by many on your aisle for slashing Medicare. Remember?

We're going to start cutting benefits for seniors -- that was the story that was perpetrated out there, scared the dickens out of a lot of seniors. So the question is at what point can we have a serious conversation about Medicare and its long-term liability or a serious question about -- serious conversation about social security or a serious conversation about budget and debt in which we're not simply trying to position ourselves politically?

That's what I'm committed to doing. We won't agree all the time in getting it done but I'm committed to doing it.

(END VIDEOTAPE)

O'BRIEN: President Obama, the House Republicans, their questions, his answers; our special report.

Thanks for watching. I'm Soledad O'Brien in for Anderson Cooper.

And for all of us here, have a great weekend.