Return to Transcripts main page

CNN Newsroom

U.S. Soldier Kills Five in Iraq; President Obama Gets Support From Health Care Industry; General Motors Bankruptcy 'Probable'; Cutting Health Care Costs; President Obama's Healthcare Meeting

Aired May 11, 2009 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: We are following breaking news out of Iraq. A U.S. soldier opens fire, killing five people.

Let's get right to our Pentagon correspondent, Chris Lawrence.

And Chris, for people just joining us, what do we know?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Here's the gist, Tony. We know that five U.S. service members have been killed on their own base at a stress clinic, on their own base at Camp Liberty in Iraq. It happened this afternoon Baghdad time, and the man in custody, in military custody, suspected of killing them, is one of their own.

He is an American soldier. He is in custody right now, in military custody there in Baghdad.

We also have learned that it's obviously just sending ripples through the community there in Baghdad. Here's what Colonel John Robinson, who's a spokesman for the forces there in Iraq, said.

He said, "Any time we lose one of our own, it affects us all. Our hearts go out to the families and friends of all the service members involved in this terrible tragedy."

Now, again, what we don't know, we don't know that this service member who is suspected of shooting his other fellow service members, if he was a patient at the clinic or anything like that. But we do know that a lot of soldiers do seek treatment for mental stress, combat stress, but perhaps not as many as should be getting treatment.

We know that -- I went on the U.S. military's Battlemind Web site, which is a Web site dedicated to mental health. It found that last year, about nearly one in five troops that were deployed in Iraq were suffering from some form of Post-Traumatic Stress Disorder.

There was another study done by the American Psychological Association that found that over 60 percent of servicemen and women who were serving in Iraq felt that if they sought treatment for mental problems, it would negatively impact their career. That suggests that there are a lot of service members who may be having mental problems, but don't necessarily feel comfortable with the idea of getting treatment for it -- Tony.

HARRIS: The irony of this -- and we're talking about people who were killed inside a stress clinic. And just to sort of drive the point home, are we clear on whether we're talking about all service personnel killed, or is it still a possibility that we're talking about a mix of troops and civilians here?

LAWRENCE: The way it was characterized to me, that it was five U.S. service members, that they were definitely American. We also have learned that there were several other people wounded, at least three others wounded. Not sure exactly what their conditions are, whether these were minor wounds or whether they were much more serious as well.

HARRIS: And the condition of the alleged shooter?

LAWRENCE: We don't know his medical condition, but we do know that he is in custody, in military custody there in Baghdad right now.

HARRIS: All right. Chris Lawrence for us.

Chris, appreciate it. Thank you.

And Defense Secretary Robert Gates and Joint Chiefs Chairman Admiral Michael Mullen plan a news briefing, 2:00 p.m. Eastern Time. Of course, CNN will bring it to you live, right here in the NEWSROOM.

President Obama gets support for his plan to overhaul the nation's health care system. Groups from the health care industry are offering to help promising huge savings over the next decade. We will hear from the president live this hour.

White House Correspondent Suzanne Malveaux joining us with a preview.

And Suzanne, what is -- we talked about it last year. It's worth repeating. What is the president trying to do with these reforms?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, he's certainly trying to make sure that all Americans have health insurance, but they're also trying to work on the federal deficit, saying that they're going to cut that in half by the end of his first term. They're trying to deal with a huge budget. So obviously, a lot of things, very ambitious plans here.

And one of the things, Tony, that they have to do is get the health care industry on board to cooperate. So that's why they have reached out to some of these folks. And we're talking about big names here -- Kaiser, Health Net, Cedars-Sinai Hospital, also the American Hospital Association.

That's just a number of groups that are going to be here with the president saying, look, we will work with you to try to deliver health care that's more efficiently, more cost-effective, so that what we can do is try to at least slow down the increase, the cost increase that we expect in the years to come by 1.5 percent or so, each year over the next 10 years. They believe that that is going to be a significant amount. But Tony, one of the things you should know is that they are also counting on the fact that Congress will do something by the end of the year to reform the health care system, that this is not going to work without their cooperation -- Tony.

HARRIS: Suzanne, what am I hearing? I know people at home are hearing it. What am I hearing behind you, around you? What is it that I'm hearing?

MALVEAUX: I actually knew you were going to ask that, because we were asking, too. It has nothing to do with health care. It has to do with protesters that have gathered outside, Sri Lankan protesters against a terrorist organization that is in that country, and they want the president to do more, essentially. So that's why you're hearing those chants.

HARRIS: OK. All right. White House Correspondent -- wow -- Suzanne Malveaux. Talk about loud, big megaphones.

MALVEAUX: There's always protests around here, Tony, especially when it warms up, the summertime. You get all different groups represented here in front of the White House. So I'm sure...

HARRIS: You're going to be hearing it, and we will be hearing it all summer.

Appreciate it, Suzanne. Thank you.

We will, of course, bring you President Obama's -- a serious story, by the way, the Tamil Tigers and what's going on in Sri Lanka, perhaps we'll get to, to tell that story to you a little later in the hour. But the president's remarks on health care savings and reform live. The president expected to speak around 12:30 Eastern. That's 9:30 Pacific Time.

The top man at General Motors indicated again today that bankruptcy may be the only way. Fritz Henderson, in fact, calls it probable. GM is facing a June 1st government deadline to restructure. One of the president's point men on the auto industry visited Michigan looking for ways to help laid-off workers and their communities.

(BEGIN VIDEO CLIP)

ED MONTGOMERY, AUTO COMMUNITIES RECOVERY DIRECTOR: Clearly, the problems that we face and the challenges that we face today didn't occur overnight, and they're not going to be solved overnight. We need to get the economy growing, we need to get people buying automobiles again, we need to get some growth in the economy.

(END VIDEO CLIP)

HARRIS: "YOUR MONEY" co-host Christine Romans joining me at the business desk in New York, and Susan Lisovicz is at the New York Stock Exchange.

Good to see you, again, ladies. Christine, I know Fritz Henderson has indicated that there was a probability, a possibility of bankruptcy. I don't know that I've heard the word "probable" or "probability" before. Is that moving the ball down the field to what to many people feel is like an inevitability?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, let me explain, first, this is a conference call that Fritz Henderson had. And he said this was part of their transparency, trying to get out there and tell people what's happening because, as you know, all of us are big investors in this company now. And at the outset, he said they weren't going to make any news, but there were a couple of things in there that really caught our attention.

One of them, he had said language like this before, frankly, Tony. But this was pretty firm. He said it is probable that we will have to solve all these problems under bankruptcy protection. But he said there's still a chance we can do it outside of bankruptcy court, and that's what we want to do.

Look, nothing is certain here. I mean, I walked away from that call, 30 minutes of listening to them talk about what's happening here. Gosh, Tony, there's a lot for this company to do by June 1st. Nothing is certain here.

For dealers who are trying to find out -- 2,600 dealers, don't forget -- who are trying to find out whether they're going to be axed and no longer selling the GM models, they still haven't found out exactly what that time frame is going to be. Later this week, those dealers will be alerted, and then there will be a wind down throughout this year.

So, you're talking about whether there could be bankruptcy. That would be pretty soon here. They've got this June 1st deadline, and they need more money. Dealers still waiting to find out who's going to survive, who is not. And they're still talking with the union and, presumably, one would think, with the bondholders.

HARRIS: Well, and Susan, what is this going to ultimately come down to, this idea of bankruptcy, no bankruptcy? Is it going to come down to stakeholders, bondholders forgiving enough debt?

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Well, yes, that's probably one of the biggest sticking points right now. It is an enormously complicated situation, and there's not a lot of time, as you and Christine have indicated. But there's nothing like a deadline to really push the ball.

Having said that, bondholders, for their $27 billion investment in GM, are going to get GM shares. Well, guess what? GM shares aren't very valuable right now. They're trading under $1.50.

This is a stock that was trading at $28 last year, $44 the year before. You get the picture. So it's -- GM was having problems before there was a recession, and that was complicated by when we got a credit crisis. So you have a lot of parties and you have a very little amount of time.

HARRIS: OK. Ladies, thanks for the update. I just wanted to give everyone a bit of an update on the conference call this morning.

Susan Lisovicz and Christine Romans, both from New York for us.

Thank you both.

LISOVICZ: You're welcome.

HARRIS: And now to that wildfire in Santa Barbara, California. Fire officials say it apparently was ignited by a power tool being used to clear brush. Most of the 50,000 people that were evacuated last week have returned home. Flames destroyed almost 80 homes and damaged 22 others. More than 4,000 firefighters fought the blaze.

An overnight fog has helped firefighters bring the blaze to about 70 percent containment. The fire caused almost $11 million in damage.

(WEATHER REPORT)

HARRIS: In Pakistan, the military is pressing its fierce offensive against the Taliban, but the fighting is also creating a humanitarian crisis. The United Nations says more than 360,000 Pakistanis have fled their homes since May 2nd. Camps for the displaced are sprouting up throughout the northwest.

The military says it killed as many as 200 militants over the weekend. A Pakistani official says up to 15,000 troops are battling about 5,000 Taliban fighters in the Swat Valley.

Let's get more on the offensive and the thousands of Pakistanis trying to get out of the war zone.

Our Ivan Watson is in Islamabad.

And Ivan, good to see you.

If you would, update us on the offensive.

IVAN WATSON, CNN CORRESPONDENT: Well, the fighting does continue. You are getting reports from the Pakistani army claiming that dozens of Taliban fighters are being killed every day. We can't confirm those figures, Tony, and we haven't been offered any evidence to back that up either. However, the military does say that it has come under attack.

There has been resistance from the Taliban. They've been firing mortars, for example, at police stations at a Pakistani army base in the Swat Valley. And there was also a suicide bombing this morning in the western city of Peshawar that killed a number of civilians, as well as a Pakistani paramilitary trooper.

And what this is doing, it's still flushing out the civilians that are trapped in that area. Every time the curfew gets lifted in this conflict zone, we see tens of thousands of civilians trying to get out as fast as possible -- Tony.

HARRIS: Well, let's stay on that point here. What about the thousands of displaced people, Ivan? Are they being fed? Is there enough shelter, aid right now for them?

WATSON: Well, there is an effort to try to help these people. We've seen camps cropping up, the Pakistani government working with organizations like the United Nations. And they have been handing out tents, setting them up, providing food and water and some medical services as well.

But the sheer crush of people coming, Tony, I mean, the United Nations is saying more than 360,000 people registered in the just the last week and a half. That's like the population of Minneapolis pouring out, a wave of humanity, and that's not all the people that have come. They predict that there are more as well. What are you going to do with these people in the long term? - Tony.

HARRIS: Yes, absolutely.

All right. Our Ivan Watson in Islamabad.

Ivan, appreciate it. Thank you.

Live pictures now. The Shuttle Atlantis is on the launch pad and is set to lift off this afternoon. The mission: fix the Hubble space telescope.

Wow. We are looking at the big challenges -- nice pictures here -- and the possible dangers facing this crew.

(COMMERCIAL BREAK)

HARRIS: Dick Cheney takes another dig at President Obama, you will hear that a little later.

Before Cheney's latest barrage, the president got in a preemptive strike at the former vice president. It went down at the White House Correspondents' Dinner.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Dick Cheney was supposed to be here, but he is very busy working on his memoirs, tentatively titled "How to Shoot Friends and Interrogate People."

(END VIDEO CLIP)

HARRIS: So political pundits have suggested that the annual White House Correspondents' Dinner is a less-than-dignified event for a president. We put his entire speech on our blog page. You can listen to his comments from Saturday night's dinner, and send us your thoughts -- CNN.com/newsroom.

(COMMERCIAL BREAK) HARRIS: We are eagerly watching and waiting for Space Shuttle Atlantic to take off for the Hubble space telescope in just about two hours. This will be the last mission to fix and upgrade the 19-year- old telescope.

The astronauts on board Atlantis will have to replace batteries, gyroscopes and cameras. It is a complicated mission with five spacewalks. And the high orbit raises the risk of collisions with space debris that could damage the shuttle.

But as CNN's John Zarrella tells us, another shuttle is on backup in case of emergency.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): For NASA, the U.S. space agency, this is a first. On one launch pad sits the Shuttle Atlantis. On the over is Endeavour, ready to go.

TONY CECCACCI, FLIGHT DIRECTOR: We are well prepared for it. And we don't want to use it, but we're prepared.

ZARRELLA: If something goes wrong, endangering the Atlantis crew on their mission to service the Hubble space telescope, Endeavour would be launched within days in a last-ditch attempt to save them.

CHRISTOPHER FERGUSON, ENDEAVOUR COMMANDER: I feel as confident about this -- our ability to pull this off, if need be, as I would any other mission.

ZARRELLA: The need for a rescue vehicle standing by at the ready grew out of the Columbia disaster. But until now, there's been no need.

All the previous missions since Columbia have gone to the International Space Station. The crew of a damaged shuttle could take refuge there for months, if need be, until another shuttle was ready to go get them. But Atlantis, going to Hubble, won't be anywhere near the station and can't get there.

FERGUSON: In this case, it's a much shorter fuse because the shuttle crew, the Hubble crew, would only have their vehicle to survive aboard.

ZARRELLA: Consumables like food and oxygen would run out quickly.

For Atlantis Commander Scott Altman, it feels good knowing Endeavour is ready.

SCOTT ALTMAN, ATLANTIS COMMANDER: Even in the worst possible imaginable case, we can stay up there and last until somebody comes up and gets us. So it feels like we've got all our bases covered.

ZARRELLA: But the rescue would be no cakewalk. It would be a series of spacewalks. Endeavour would come up underneath Atlantis and hook on using its robotic arm. Over the course of two days, the seven astronauts would spacewalk to Endeavour, holding on to a tether line strung between the two vehicles.

ALTMAN: The spacewalkers can come out of Atlantis and go hand over hand on a rope.

ZARRELLA (on camera): The seven Atlantis astronauts and the four on Endeavour would then all head home together. Atlantis would be put into what's called a disposal burn, burning up as it reenters the either's atmosphere, and whatever is left falling harmlessly into the ocean.

John Zarrella, CNN, Miami.

(END VIDEOTAPE)

HARRIS: Ruth Martinez is a working mother and something else you would never guess. She and her son are homeless. In her own words, you'll hear how they got there and how they're working to recover.

(COMMERCIAL BREAK)

HARRIS: I have to tell you, I was very moved by the story of Ruth Martinez. We shared the story last hour. She is a working mother taking care of her son, and she is also homeless.

Ruth Martinez represents the changing face of homelessness in America, and she shared her story with CNN Chief National Correspondent John King.

(BEGIN VIDEOTAPE)

RUTH MARTINEZ, HOMELESS: People can have a job and be homeless like me. Because of the recession, so many people are losing their jobs. They're just not losing jobs, they're losing their families, they're losing their minds...

UNIDENTIFIED MALE: Their homes.

MARTINEZ: Their homes. They are losing so much because of it. And the reason I never give up is because of him. He's the reason I don't give up.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And tell me how it happened to you.

MARTINEZ: Well, we had our family. And, you know, my husband, me, my son. He played football, he went to school, I went to work. The perfect little, you know, more or less, family.

Well, his company was going to be closing down because they weren't doing as much painting. They laid him off. After that, the obvious happened within the relationship of financial struggling, and we got evicted. And after the eviction, I refused to just go to the street because I didn't have nowhere to go for me and my son, so I told the manager, "Evict me." And she did evict me. And we became homeless.

KING: Tell me about the first few days.

MARTINEZ: Here?

KING: No, before that.

MARTINEZ: Well, we were in my car. And we take it as a joke (ph). We drive. We drive.

And then we were always trying to stay at my job even though I wasn't supposed to be there. I would try to always be at my job always. Always, literally. Try to, like, watch TV there without my boss knowing, or just try to drive to where we had to drive for, or just trying to stall for the time, you know, the first couple days.

And then at last someone gave me a voucher for a hotel that was very, very low, low class. Like, really run down. I mean, people were selling drugs there, kids running around.

My purse got stolen, my car got stolen. It was just scary. But I was willing to deal with it because I had nowhere else to go.

(END VIDEOTAPE)

HARRIS: Ruth Martinez and her son are currently living in a shelter until she can save enough for rent.

Very quickly now, we want to get to Barbara Starr at the Pentagon. And Barbara's on the beeper line with us.

And Barbara, I understand you have news of a pretty significant change to the command structure in Afghanistan.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Yes, Tony. Once again, Defense Robert Gates doing what he's done several times before, replacing a top U.S. military official.

It is now expected that at 2:00 this afternoon East Coast Time, Gates will announce he is replacing the top U.S. commander in Afghanistan, General David McKiernan. The commander of U.S. and NATO forces is out and will be replaced by General Stanley McCrystal.

That announcement now, several U.S. defense officials say, will be coming at this hastily called press conference that Secretary Gates is having this afternoon. General McKiernan under a lot of pressure because the war in Afghanistan clearly not going well.

General McCrystal, the man now said to be coming into the war as the top commander, of course, his background, Special Forces, Special Operations command. General McCrystal headed up for years one of the most secretive organizations in the United States military, the Joint Special Operations Command. Very secretive, the head of the covert arm of the U.S. military. He was said to be directly responsible for the killing of Zarqawi back in Iraq. A very capable man, knows counterinsurgency backwards and forwards.

This comes, of course, as tens of thousands of additional U.S. combat forces headed into Afghanistan. This now apparently the Obama's administration's major move to try and turn the course of that war around to have a complete change right at the top -- Tony.

HARRIS: Wow. OK.

Barbara, just a quick follow-up as we take a look at this picture of General McCrystal. I wonder what this says about the strategic change -- the tactical change is maybe the more important question here -- for the war in Afghanistan moving forward.

STARR: Well, I think most people will tell that the new watchword is "counterinsurgency." And that means two things -- lethal warfare, using your firepower to go right after the insurgents, to go after the Taliban leaders. But a lot of people may not understand counterinsurgency also means winning the hearts and minds, going village by village, town by town, not just killing and capturing insurgents, but offering aid, assistance and help to the people of Afghanistan. And no matter who's at the top, that's going to be a very tough fight.

Afghanistan really is a war town by town, village by village, mountain by mountain. This is something that General McCrystal has a real track record with success with during his time in Iraq. But I think it should be pointed out, General McKiernan, the man being replaced, by all accounts, had spent months and months asking for additional troops, saying he did not have enough resources on the ground.

The Obama administration, Secretary Gates agreed to some of his requests for additional forces. But even today, Tony, not everything that General McKiernan has been asking for has been given to him while he's been in command in Afghanistan.

HARRIS: Very interesting. Very interesting.

Barbara Starr at the Pentagon for us.

Barbara, appreciate it. Thank you.

A boost in the effort to overhaul health care in this country. President Obama to make remarks shortly.

(COMMERCIAL BREAK)

HARRIS: OK. I'm trying to figure out what the big business headline is at CNNMoney.com. But you can go there yourself. CNNMoney.com, your source for all of the day's money news. And you can check out the latest financial analysis. It's all there at cnnmoney.com. Let's take a look at the big board. Just past three hours into the trading day. What a nice rally last week. Last Friday ending on a very positive note. So far today, not so much. The Dow down in negative territory 112 points. Anyone with a number on the Nasdaq for me? No one. We are following the numbers throughout the day for you right here with Susan Lisovicz in the CNN NEWSROOM.

We are also awaiting remarks from President Obama on one of his priority issues, health care reform. We will bring you his comments live. The president has been meeting with representatives from health industry groups. They are pledging to cut the growth and health care cost to the tune of $2 trillion over 10 years.

So let's talk more about it. The health care industry planning to save all that money and also about the president's plan for reforming health care. Our senior medical correspondent, Elizabeth Cohen, is here now.

Look, Elizabeth, I actually wrote a note to Kate Bolduan, our Capitol Hill correspondent, yesterday, because I saw her entry at cnn.com and thought this was a big deal. It feels significant. Is it?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Oh, it is significant. I mean if he truly manages to save $2 trillion over 10 year, he will have accomplished what nobody else has accomplished. And, believe me, they have been trying for decades to try to save money in health care and it basically has not worked very well.

So what the president has done, if you put all -- he put all the players in the room, pharmaceutical companies, the doctors, the hospitals, the insurance companies, of course, and said, hey, can you guys figure out a way to make $2 trillion worth of cuts over 10 years? And they basically said, hey, yes, sure, we'll sign on. We'll try to do that.

Now, the devil is in the details. Will they really want -- be able to do that? I know they want to do it, but will they be able to do it.

HARRIS: Take a look at this picture. Let's take the picture full. Get it out of the gizmo and let's take the picture full here. Here is the room. All right, now we've got a number of players in the room here. And what I want to know from you, Elizabeth, the president -- oh, shoot. I'll ask the question in just a moment.

COHEN: Maybe he'll answer your question.

HARRIS: Exactly.

Let's get to the president.

OBAMA: All right. Well, I just concluded an extraordinarily productive meeting with organizations and associations that are going to be essential to the work of health care reform in this country, groups that represent everyone from union members to insurance companies, from doctors and hospitals to pharmaceutical companies.

And it was a meeting that focused largely on one of the central challenges that we must confront as we seek to achieve comprehensive reform and lay a new foundation for our economy, and that is the spiraling cost of health care in this country.

They're here because they recognize one clear, indisputable fact: When it comes to health care spending, we are on an unsustainable course that threatens the financial stability of families, businesses, and government itself.

This is not news to the American people, who over the last decade have seen their out-of-pocket experiences soar, health care costs rise, and premiums double at a rate four times faster than their wages.

Today, half of all personal bankruptcies stem from medical expenses, and too many Americans are skipping that checkup they know they should get or going without that prescription that would make them feel better or finding some other way to scrimp and save on their health care expenses.

What is a growing crisis for the American people is also becoming an untenable burden for American businesses. Rising health care costs are commanding more and more of the money that our companies could be using to innovate and to grow, making it harder for them to compete around the world.

These costs are leading the small businesses that are responsible for half of all private-sector jobs to drop coverage for their workers at an alarming rate.

And, finally, the explosion in health care costs has put our federal budget on a disastrous path. This is largely due to what we're spending on Medicare and Medicaid, entitlement programs whose costs are expected to continue climbing in the years ahead as baby boomers grow older and come to rely more and more on our health care system.

That's why I've said repeatedly that getting health care costs under control is essential to reducing budget deficits, restoring fiscal discipline, and putting our economy on a path towards sustainable growth and shared prosperity.

So we as a nation are now spending a far larger share of our national wealth on health care than we were a generation ago. At the rate we're going, we are expected to spend one-fifth of our economy on health care within a decade, and yet we're getting less for our money.

In fact, we're spending more on health care than any other nation on Earth, even though millions of Americans don't have the affordable, quality care they deserve and nearly 46 million Americans don't have any health insurance at all.

Now, this problem didn't just appear overnight. For decades, Washington has debated what to do about this. For decades, we've talked about reducing costs, improving care, and providing coverage to uninsured Americans.

But all too often, efforts at reform have fallen victim to special interest lobbying aimed at keeping things the way they are, to political point-scoring that sees health care not as a moral issue or an economic issue, but as a wedge issue, and to a failure on all sides to come together on behalf of the American people.

And that's what makes today's meeting so remarkable, because it's a meeting that might not have been held just a few years ago. The groups who are here today represent different constituencies with different sets of interests.

They've not always seen eye to eye with each other or with our government on what needs to be done to reform health care in this country. In fact, some of these groups were among the strongest critics of past plans for comprehensive reform.

But what's brought us all together today is a recognition that we can't continue down the same dangerous road we've been traveling for so many years, that costs are out of control, and that reform is not a luxury that can be postponed, but a necessity that cannot wait.

It's a recognition that the fictional television couple Harry and Louise, who became the iconic faces of those who opposed health care reform in the '90s, desperately need health care reform in 2009, and so does America.

That's why these groups are voluntarily coming together to make an unprecedented commitment. Over the next 10 years, from 2010 to 2019, they are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year, an amount that's equal to over $2 trillion, $2 trillion.

Their efforts will help us take the next and most important step -- comprehensive health care reform -- so that we can do what I pledged to do as a candidate and save a typical family an average of $2,500 on their health care costs in the coming years.

Let me repeat that point: What they're doing is complementary to and is going to be completely compatible with a strong, aggressive effort to move health care reform through here in Washington with an ultimate result of saving health care costs for families, businesses and the government.

That's how we can finally make health care affordable while putting more money into the pockets of hard-working families each month. And these savings can be achieved by standardizing quality of care, incentivizing efficiency, investing in proven ways not only to treat illness, but to prevent them.

This is an historic day, a watershed event in the long and elusive quest for health care reform. And as these groups take the steps they are outlining and as we work with Congress on health care reform legislation, my administration will continue working to reduce health care costs to achieve similar savings. By curbing waste, fraud and abuse, and preventing avoidable hospital readmissions, and taking a whole host of other cost-saving steps, we can save billions of dollars while delivering better care to the American people.

Now, none of these steps can be taken by our federal government or our health care community acting alone. They'll require all of us coming together as we are today around a common purpose, workers, executives, hospitals, nurses, doctors, drug companies, insurance companies, members of Congress.

It's the kind of broad coalition -- everybody with a seat at the table -- that I talked about during the campaign, that is required to achieve meaningful health care reform, and that is the kind of coalition which -- to which I am committed.

So the steps that are being announced today are significant, but the only way these steps will have an enduring impact is if they are taken not in isolation, but as part of a broader effort to reform our entire health care system.

We've already begun making a down payment on that kind of comprehensive reform. We're extending quality health care to millions of children of working families who lack coverage, which means we're going to be preventing long-term problems that are even more expensive to treat down the road.

We're providing a COBRA subsidy to make health care affordable for 7 million Americans who lose their jobs.

And because much of every health care dollar is spent on billing, overhead, and administration, we are computerizing medical records in a way that will protect our privacy. And that's a step that will not only eliminate waste and reduce medical errors that cost lives, but also let doctors spend less time doing administrative work and more time caring for patients.

But there's so much more to do. In the coming weeks and months, Congress will be engaged in the difficult issue of how best to reform health care in America.

I'm committed to building a transparent process where all views are welcome, but I'm also committed to ensuring that whatever plan we design upholds three basic principles.

First, the rising costs of health care must be brought down.

Second, Americans must have the freedom to keep whatever doctor and health care plan they have or to choose a new doctor or health care plan if they want it.

And, third, all Americans must have quality, affordable health care.

These are principles that I expect to see upheld in any comprehensive health care reform bill that's sent to my next. I mentioned it to the groups that were here today.

It's reform that is an imperative for America's economic future and reform that is a pillar of the new foundation we seek to build for our economy, reform that we can, must and will achieve by the end of this year.

Ultimately, the debate about reducing costs and the larger debate about health care reform itself is not just about numbers. It's not just about forms or systems. It's about our own lives and the lives of our loved ones. And I understand that.

As I mentioned before, during the course of the campaign, my mother passed away from ovarian cancer a little over a decade ago. And in the last weeks of her life, when she was coming to grips with her own mortality and showing extraordinary courage just to get through each day, she was spending too much time worrying about whether her health insurance would cover her bills.

So I know what it's like to see a loved one who's suffering, but also having to deal with a broken health care system. I know that pain is shared by millions of Americans all across this country.

And that's why I was committed to health care reform as a presidential candidate. That's why health care reform is a key priority to this presidency. That's why I will not rest until the dream of health care reform is finally achieved in the United States of America.

And that's why I'm thrilled to have such a broad, diverse group of individuals from all across the health care spectrum, representing every constituency and every political predisposition, who feel that same sense of urgency and are committing themselves to -- to work diligently to bring down costs so we can achieve the reforms that we seek.

So thank you very much to all of you for being here.

Thank you very much, everybody.

HARRIS: Oh, very interesting.

Our senior medical correspondent Elizabeth Cohen is here.

And, Elizabeth, let's start with -- we're seeing people walk out of the room. Those are the same people, obviously, who have been meeting with the president throughout the morning and in some of these breakout panels talking about health care reform.

I'm interested as to why people, many of them in that room as the president referred to just a moment ago, who in the past -- what, how many, 15 years ago?

COHEN: Yes, almost 16 now. Right.

HARRIS: Almost 16 years ago now may have been opposed to these ideas are now on board seemingly this time this day. What's going on here?

COHEN: Right. It's such a great question. Why all of a sudden are doctors, insurance companies, pharmaceutical companies . . .

HARRIS: What is going on here?

COHEN: Right. Who gave Hillary Clinton such a hard time in '93 and now they are literally in the room. You just saw them in the room standing next to the president.

HARRIS: Yes.

COHEN: Well, there are several reasons for that. One of them is that they're kind of scared because there is now much more of a recognition now than in 1993 that health care reform needs to happen. As the president said, I'm going to quote him here, "reform is not a luxury that can be postponed" because so many people, 46 million Americans, are uninsured.

So the message that the administration appears to have given to these so-called stakeholders is, look, you can either get on the bus now or you can have the bus run over you later.

HARRIS: Yes.

COHEN: So in other words, what he's sort of subtly or maybe even not so subtly saying to insurance companies is, look, you need to figure out a way to bring you prices down for people who need insurance or else maybe the government's going to start offering insurance to more people and maybe people will choose the government insurance over your insurance.

HARRIS: So let's talk about what this group is offering as a promise here to slow the rate of growth in health care by - what? - 1.5 percent from 2010 to 2019. You do the math, that is a lot of money. But we didn't get a lot of specifics, although there were a couple of areas mentioned that might produce some savings.

COHEN: Right. You might want to call it sort of specifics light.

HARRIS: Yes.

COHEN: I think that's sort of what we just heard in that speech. For example, the president said, incentivize efficiencies, better prevention, curb waste. Let me sort of give some example of that.

For example, right now -- I know this has happened to me. It may have happened to you. You go to a doctor and then he refers you to another doctor. You go to the second doctor and he's looking for test results from that first doctor because that first doctor did some tests on you and he can't find them, so he just does them over again. That happens. When it happens once, twice, it's not such a big deal. But when that happens over and over again, you have a lot of money wasted. So here is where sort of the important question is. How in the world are they going to tell doctors, you need to stop doing this duplicate testing. You've got to stop doing it. How do you tell doctors to do that?

HARRIS: Well, and here's the thing. You had this conversation with Heidi earlier today. And I want to ask the question, as I was jotting it down. You said a major component of health care reform is about changing the way insurance companies pay doctors. Will you please explain that to us.

COHEN: Right, incentivize efficiency is what the president just said. OK, this is what we're talking about. In the way the system is built right now, there are huge financial incentives not to do good prevention. And, of course, nobody thinks that's good.

For example, for diabetics, doctors don't get paid very much for keeping up with Mrs. Smith and saying, Mrs. Smith, did you take your diabetes medications today? Mrs. Smith, did you follow your diet today? So when Mrs. Smith stops doing those things and she becomes very ill and needs to have an expensive surgery, then they pay doctors a boatload of money to do that surgery. That is what some people would call sort of backwards incentivizing. It doesn't make sense. We should be incentivizing prevention. That's often not done in the system the way it should be.

HARRIS: A lot here. And as you said, it's a significant day.

COHEN: It is definitely a significant day. If they can follow through on these details, it will be a significant event.

HARRIS: Yes. Absolutely. Our senior medical correspondent Elizabeth Cohen.

COHEN: Thanks.

HARRIS: Thank you.

Pope Benedict is in the holy land for a five day visit. Hear his plea for the Palestinian people.

(COMMERCIAL BREAK)

HARRIS: Secretary of State Hillary Clinton has just confirmed that Iranian-American journalist has been set free in Iran. Roxana Saberi was convicted last month on spy charges which she has denied. Her one-day trial was closed to the public. Saberi was sentenced to eight years in prison. An appeals court reduced her jail term today to a two-year suspended sentence.

Pope Benedict begin a five-day visit to Israel today. He will also make stops on the West Bank. The pope called for a Palestinian state immediately after his arrival. And his timing seemed to take some Israelis by surprise. Benedict is looking to make amends on this trip. He outraged many Jews earlier this year when he let a Holocaust denying bishop return to the church fold. Your comment on the president's performance at the annual correspondents dinner straight ahead in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: You know, we have been asking for your reaction to President Obama's jokes at the White House Correspondents' Dinner. Here's what you're saying on my blog.

Dan Nelson from Lafayette, Indiana, says, "I don't think that this is the right time for comic relief from Washington, D.C. We have to many problems to deal with in these hard times, like the economy, housing, credit and just the poor in the world. No, we should not be making jokes at people. We should be coming together to solve these problems."

And Starden (ph), Scott Starden says, "I watched President Obama during the correspondents dinner and thought he was very funny. Not only did he crack jokes about Republicans, but also his Democratic friends and constituents as well. I thought he was very funny, especially the joke about Hillary. Sorry, Hillary, I still love you."

And Randall says, "President Obama proved he can handle yet one more challenge. He made us laugh because he understands people. The president also listens to and truly cares for people and this is why we're going to see a successful presidency for a change."

We are pushing forward with the next hour of CNN NEWSROOM with Kyra Phillips.