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Explosions Rock Indonesian Hotels; Health Care Reform in Peril?
Aired July 17, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: ANNOUNCER: This woman burned down this apartment building in Dallas. We're on it.
Watch the man in the circle. He walks across the hotel lobby in Indonesia. There's a deadly explosion, and then smoke. What clues are revealed by this?
They are up in arms again in Iran. And this time, a former president is juicing the anger.
Overhauling health care. Will the president have to break a campaign promise?
UNIDENTIFIED MALE: The president is not helping us.
SANCHEZ: And that's a Democrat saying that.
Why did it take 40 years for us to see this original Apollo moonwalk? Something fishy here? Just asking for your national conversation for Friday, July 17, 2009.
Hello, again, everybody. I'm Rick Sanchez with the next generation of news. As we say, this is a conversation, not a speech. It is your turn to get involved. There is a scramble going on right now. I don't know if you have heard, but we have just picked up some information out of Washington in the last half-hour -- stay with us here -- that the president of the United States has just announced that he is going to give an impromptu news conference from the Diplomatic Room in the White House.
The reason he is doing this is, there is trouble in D.C. city, trouble that has to do with health care. As a matter of fact, even some Democrats have now, we understand, gone to the president and said, Mr. President, we may have to slow this thing down. We may be losing some votes. Why is the president losing some votes?
Well, because there is a CBO report that just came out. This CBO report seems to indicate that the president is going to have some problems, because selling this to the American people just got even more difficult.
Why? Because apparently this health plan is going to be more expensive for you as a taxpayer. That's the overview of this. And I am trying to be as transparent as I possibly can, so we can set you up before you get the information. So, the bottom line is, the president is going to come out in just a little bit and he is going to address you, using CNN as a conduit, to talk to you to give you his version of why he thinks we still need to get this thing done. And he wants to get it done by August, by August. That's next month.
We are going to be all over this one. When the president comes out in the next 14 minutes, you will give him a good hearing, I'm sure, and then we will have some of our own experts here to talk about this.
First, though, there's another big story that we are following for you right now. It's just one potential scenario that police are working on. But you have to look at this video. Let's watch it together. Here we go.
Take that, Rog, if you got it. Look at this man. See him right there? He is walking through the hotel lobby. He's following into that area where it seems like the elevator is on. He disappears into the archway and then, bam. Let's do this again if we possibly can.
That's a huge explosion. That's the explosion that's apparently happened in Jakarta. Not apparently. It did happen. It is massive. And this is why police are looking at this guy right here.
Let me read you what I just received. This is from lawyers for the police there. I am going to read you the quote as we watch this. "We are suspecting the man in the footage, say police, because the time frame matches with the time of the bombing. It is obviously too premature to confirm right now exactly what happened. And we are waiting for lab results."
But, still, it is an amazing piece of video that obviously is going to be very studied, as is this. Look at these pictures taken just from across that field. We are going to watch it again as well. These are what police are hoping will fill some of the holes of this investigation in Jakarta.
They were twin explosions, by the way, at two American-owned hotels, keywords, American-owned, first at the J.W. Marriott. That's what you are looking at right there, the second moments later at the very swank, as we know, Ritz-Carlton. That's right next door.
Look, without doubt, acts of terrorism, according to Indonesian President Susilo Bambang Yudhoyono. That's what he is saying. Heck of name, isn't it?
Now, I want you to watch this. This is exclusive CNN footage as well. There, you see the two hotels as mayhem begins to break out. At least eight people are dead, we understand, including the bombers and more than 50 wounded, including eight Americans.
Again, I want to read this quote to you from the man who used to live at the Ritz. It's obviously targeting establishments where there are Westerners. It is someone trying to send a message, no doubt, to Westerners. All right, stay with me. I promise to show you some of that surveillance tape again and again, because I certainly think it is worth for investigators and for us to look at it to see if there's any clues that may reveal exactly what this organization or alleged organization may have been trying to do.
No claim yet, by the way, of responsibility, but everyone is looking at that well-known Islamic group linked to al Qaeda. It's called Jemaah Islamiyah, Jemaah Islamiyah. You have probably heard of them in the past, but they are not like al Qaeda, but as bad as al Qaeda. You will understand why I say that in just a moment.
Members of the group committed to a 2002 bombing in Indonesia. They liked 200 people. Something else to note, there are indications the bombers had checked in as guests at Marriott, same as occurred last November in those attacks in Mumbai.
All right, joining me now from Washington is somebody who has been making phone calls on this. He's an assistant director from FBI, former FBI Assistant Director, I should say. Tom Fuentes is good enough to join us.
Why do we believe at this point that this same terrorist organization is involved in this particular bombing, only less than 24 hours after this happened? What's the clue?
TOM FUENTES, FORMER FBI ASSISTANT DIRECTOR: OK.
Rick, the most recent clue is information I just received a few minutes ago from sources in Jakarta that the bomb that was diffused in the 18th floor Marriott hotel room is made in the same fashion, the same type of explosive and container and wiring as in all of the other previous Jemaah Islamiyah bombings.
SANCHEZ: Well, let me stop you for a moment just to bring our viewers into this, because I know sometimes when we have these conversations, we get talking about stuff that they maybe don't understand.
Bombs, as I know and obviously you do, too, have signatures. In other words, every time a bomb goes off, guys like you can go in there and say, aha. We can tell by the way this is put together that it has the signature of a specific group of terrorists.
You are saying the signature of what's left of this bomb reveals that they are, in fact, tied to this organization?
FUENTES: Right. That's correct, Rick.
And the -- the main point with this is that, if you are a chef, you get points for creativity and making a new recipe. If you are a bombmaker, you don't want to be creative. If you were successful the first time, you follow that to the letter, because you want it to work out the same way every time.
And that's how law enforcement from around the world can piece together later the signature of which school of bombmaking that particular bomb came from.
Now, the police in Indonesia have done an exceptional job, not just in connection with the investigations of the prior bombings, but in disrupting a number of plots, three different plots in the last year- and-a-half, where they have arrested a number of subjects and seized weapons and explosives and bomb components. And those components, which were all Jemaah Islamiyah operations and safe houses, match almost identically to what they found in that hotel room.
So, that give them a signature, because, in this case, you have an unexploded bomb, so they can immediately analyze how it is put together.
SANCHEZ: Did you see the picture of that guy walking in with a suitcase? Do you think possibly he might have something to do with this?
FUENTES: He may. The forensic work will be able to determine whether the explosives were inside that hand roller board, luggage....
(CROSSTALK)
SANCHEZ: But look at him. Let's look at him together, if we possibly can.
Hey, Rog, you got that shot? See if you got that black and white again. Oh, it's actually not black and white. Look at the guy. He is walking in. He looks so nonchalant. By the way, he looks like a Westerner himself, doesn't he?
FUENTES: He does. And he could be an innocent bystander. He goes into that dark shadow area, at least on the monitor I am looking at. He goes into a shadowed area, and another bomber or the explosives could have been planted in that area, and he is an innocent victim, or he could have had explosives within that roller bag in a backpack under his suit.
That will be able to be determined. When they do the analysis on his body parts, if you will, they will be able to determine whether the explosive came from inside that roller board or from the outside of it.
SANCHEZ: Wow. It is amazing you would say his body parts. It's almost -- I guess you can't come up with any other conclusion.
Before I let you go, hey, Rog, if you happen to have -- I'm not sure if we hooked that up for you or not -- if you happen to have a map of that region around Indonesia, I -- you know, as Americans, we don't know a whole heck of a lot about Indonesia.
We have certainly heard of Jakarta and that region. But I am wondering, well, why is it so significant to us? How -- how populated is it? How many people who could possibly be like this -- this -- this organization could live there, and what's their beef?
FUENTES: Well, there could be hundreds. There could be thousands. Indonesia is the fourth largest population country in the world. It's the largest Muslim population, exceeding the combined total of the Middle East, Africa and Europe.
You have 17,500 islands. About 2,500 are generally uninhabited in jungle areas. So, you have fertile ground for recruiting young men to become suicide bombers to join this organization.
SANCHEZ: Yes.
FUENTES: And then you have so many available outlying islands where they can train and not even be discovered by law enforcement. It is a very difficult challenge for the Indonesia national police.
SANCHEZ: It is an interesting combination. The place is dangerous through terrorism acts in the past, and it's also paradise, considered one of the most beautiful places in the world to vacation. And that's why so many Westerners go there who sometimes become tantalizing targets for some of these bad guys, yes.
(CROSSTALK)
FUENTES: Sorry for interrupting.
SANCHEZ: No.
FUENTES: Keep in mind that this is a democracy and these extremists do not want democracy. They want to impose their brand of law. And they do not like the fact that the Indonesian country is so secular and so democratic.
SANCHEZ: Yes. Hey, Tom, as usual, you are the best. You fill us in with new information. You make phone calls. You are connected and we appreciate, the American people appreciate the information that you're able to share with us on this. My thanks to you, sir.
FUENTES: Thank you, Rick. Good to be with you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When a woman is able to conceive and have a child, she is an adult. And she could be married. But we don't do that at our church. We never have.
SANCHEZ: Why would you be saying that, then?
UNIDENTIFIED MALE: Because it is Bible. I have a right to preach the Gospel, don't I? OK?
(END VIDEO CLIP)
SANCHEZ: Oh, boy, this is one of the most amazing interviews that you will ever hear on network television with a man who just today we are hearing may have married an 8-year-old, may have married an 8-year- old.
And the girl, who is 18 now, by the way, has come forward in court. It happened today. We are going to show you the interview that I did with him where he insults me left and right, by the way.
Also, the recent coup in Honduras has us thinking that history could be repeating itself in Latin America -- what we, as Americans, need to know about what's going on down south of the border, this by the way from a man who handled Latin American for both Mr. Reagan and Mr. Bush. Otto Reich is going to be joining me right here.
And we are awaiting comments from the president, President Obama, on health care. We are going to hear what he has to say. We're going to hear a from Republican congressman, as well, by the way, who has his own ideas on how to fix this.
But, look, there is no doubt -- and I think we made this quite clear at the beginning -- all of the information I am getting from our political guys back here who spend the whole day on the phones working these stories is that the White House is scrambling. And that's why the president is calling this news conference that he wants you to watch in about five minutes.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I'm Rick Sanchez.
Again, the president of the United States is going to be speaking in just a little bit. We have been mentioning that the president, look, is scrambling on something that isn't looking real good for him, and that's the health care plan, criticism from both Republicans and now Democrats because of the CBO report. You know about all of that. So, when the president comes out, you will get to hear from him right here on CNN.
Now, do you realize that history is trying to repeat itself down in Central and South America? It is. Bear with me here. I promise this is all going to make sense for you. This is a story that I have been following for quite some time, because it is important.
Let me take you back to the late 1950s, Fidel Castro kicked out of Cuba, returns to Cuba. There he is. He lands in Santiago, begins a revolution against the government of Fulgencio Batista. He was barely even taken serious by the way when he was doing this by the United States or the rest of the world.
Well, guess what? They should have taken him serious, because the rest is history. Now, fast-forward 50 years, Castro still in power and another Latin America leftist leader may be trying to follow that Castro model. That guy in the big white hat, see him right there? That's Manuel Zelaya, technically still the president of Honduras. But he can't go back to his country. He might be arrested by the people who took over Honduras last month in a coup.
And now today a spokesperson for the ousted President Zelaya says he intends to return and set up an alternative government, much like Castro did on Granma, and fight the new leadership. Wow, that does sound familiar. It's our segment we call "Conexion."
Well, when I want to know about stuff like this, there is nobody else better to call on than the guy you are about to meet right here. He can better explain what is happening in Honduras than just about anybody else.
Otto Reich is who I'm talking about. You see him there sharing the screen with me. He is a former ambassador to Venezuela, former White House insider for Presidents Reagan and Bush I. This guy is the ultimate insider, because he has had a hand in U.S. policies for decades.
In fact, I should remind -- you know, Otto, good to see you, sir.
OTTO REICH, FORMER U.S. AMBASSADOR TO VENEZUELA: Nice to see you, Rick.
SANCHEZ: Mr. Ambassador, I should probably remind our viewers that Fidel Castro is blaming you for the coup and everything that has gone on in Honduras, you personally.
What do you have to say to Mr. Castro? Here is your chance to answer him.
REICH: Well, Mr. Castro is used to obviously not telling the truth. He must know that obviously I had nothing to do with the coup in Honduras. If he doesn't, he is just simply ignorant. If he does, then he's just lying.
SANCHEZ: Let me show you the people who have been protesting passionately for ousted President Zelaya, all right, because this is interesting.
It does appear, whether your like or not and whether anybody likes it or not, that this guy is a populist president, that there are people in the country who like this guy. As you have watched some of these protests that we have been watching, some of which by the way have gotten pretty violent, as a result of that, should Micheletti, the guy who is in power now on an interim basis, step aside and figure out a way to let Zelaya back in, so, if he is removed, he is removed legally?
REICH: Well, Rick, first, Zelaya did become a populist president, but not a popular president, first of all. The public opinion polls clearly that it is the minority of Hondurans who support him.
But that's not the important point in the removal, his removal from power. Even if he had been terribly unpopular and had been removed illegally, that would still have been a coup. But no less an authority on Honduras than the archbishop of Honduras, Cardinal Rodriguez, said today that to call this a coup is absurd -- and I quote -- absurd. It was not a coup.
The Supreme Court of Honduras voted 15-0, unanimously, including people named by Zelaya's own party to declare Zelaya to have violated the constitution and to be no longer president of Honduras.
SANCHEZ: Why? Because this guy was trying to pull a fast one. I mean, he was trying to stay in office a la Chavez, wasn't he? And back to the issue of whether this was a coup or not. You make a good point. We at CNN have been arguing this amongst ourselves an awful lot. We are used to seeing a president removed through Congress or an impeachment or a process. Maybe that's the process they use down there. The Supreme Court says you are out, you are out, right?
REICH: Well, they don't have an impeachment process in their constitution. Instead, they have an article, Article 239, that says that, if a high official such as the president violates the constitution, he is automatically removed from office. He automatically removes himself from office.
It is self-activating, as a lawyer said at a hearing we had last week. I testified before the House Foreign Affairs Committee. And one of the members of Congress who is a lawyer said this is a self-activating clause of the Honduran constitution.
So, in effect, as the Honduran congress then ratified by a nearly unanimous vote the next day, including, by the way, almost all the members of Zelaya's own party, so that he was no longer the president.
SANCHEZ: Right. No, listen, you make a great point, and probably a point that needs to be made on network television and in the media in general, because it's a point that has obviously often been overlooked. And that's why we have you on the show.
REICH: Thank you.
SANCHEZ: By the way, I want to broaden out the discussion a little bit more.
Do you worry about what's going on in Latin America with guys like Zelaya, for example? I mean, it's clear that there has been a little of a tilt going on there. Have we got that map that we wanted to put together?
Look, you got places -- let's talk about countries that have either gone left, have gone and come out of being on the left, or are tilting in that direction, countries like Argentina, countries like Nicaragua, countries like obviously Venezuela. Still, we have Cuba.
All of these places continue to be places where the United States needs to somehow get boosted itself, doesn't it?
REICH: Well, Rick, I do worry, but I worry about the totalitarian left or the authoritarian left, such as that in Cuba, Venezuela, Bolivia, Ecuador, increasingly in Nicaragua.
I don't worry about the democratic left in Chile, in Brazil, in Uruguay and other countries.
SANCHEZ: So, what's the distinction? Make the distinction for us.
REICH: The distinction is that there's a group of countries that have aligned themselves into something called ALBA. The Alliance of Bolivarian Alternative is what -- this would be the English translation.
SANCHEZ: These are Chavez's group?
REICH: Exactly, that Fidel Castro dreamed it up. Chavez is financing it. Chavez is driving it, because Castro has been in the hospital for the last three years.
And these are the countries that are encouraging the presidents who were elected democratically to once in office violate their rules or change their rules and stay in power indefinitely.
SANCHEZ: Yes. That's a problem.
REICH: These are not democrats.
SANCHEZ: That's a problem.
REICH: They were elected democratically. They are not behaving democratically.
SANCHEZ: That's interesting.
And I thank you for drawing out that distinction for us as well as you have.
Otto Reich, our guest today, my thanks to you, sir, for taking the time to take us through this.
REICH: Thank you. Appreciate it.
SANCHEZ: All right, when we come back, we understand that the president is ready to come out now. It is 3:21. We are told he is going to be coming out at about 3:20. That's a live picture of the White House right there. I think it's the Diplomatic Room where he is going to be speaking from.
And, again, let me set this up for you. Why is this an important speech? I know the president talks from time to time. This is a little bit of a scramble for the White House, because they have been getting bad news within the last 24 hours, bad news from the CBO report, bad news from Republicans, and even now some bad news from fellow Democrats, who are telling him, Mr. President, you have got to slow this thing down.
Will he slow it down or is he going to head full-tilt toward the August deadline that he set for himself? We're going to find this out in just a moment.
Stay with us. We will take a break. We will come right back.
(COMMERCIAL BREAK)
SANCHEZ: Wow, look at all these tweets that we are getting. Interesting. I'm going back and forth.
I said that we were going to have a conversation you don't often get in the media, because Latin America, sometimes, it is not that far away, but it seems that far away.
Go to the very top with Maria in New York City. She says: "Thank you for bringing out the truth about the real situation in Honduras."
That's nice.
And, then, under that, we see, "Hugo Chavez is like a Castro wannabe."
Yes. Well, we have heard that before. We will see.
All right, back to the topic at hand at the top of the show, when we learned 15 minutes before we started our newscast that we were going to be doing something a little different because the president has called a news conference. We were planning to talk about health care reform anyway, because, suddenly, President Obama has a very big problem on his hands.
Well, guess what? Just a short time ago, we did get the word that the president is going to be coming out and trying to explain this in his own words, the situation with health care, scrambling, as we have been putting it.
Let me try and set the stage for you. And I'm be joined, by the way, by Dana Bash in Washington and Sanjay Gupta is going to be joining us as well, who both have been closely following this debate.
Over and over again, Barack Obama has told us that rising health care costs are a long-term threat to our nation, which means that we need to, look, revolutionize the health care system in some way. And there is the president now making his case.
Oh, I'm sorry. I'm looking at that and I thought it was the actual picture. Let me go on.
All right, good enough. The president said he is going to find a way to revolutionize things. While we are at it, says the president, we are also going to assume the health care cost of the 45 million Americans who have no insurance.
So, let's see. We drive down the total cost of health coverage while adding millions of people to the rolls of the insured? That sounds counterintuitive. Can you possibly do both things at once?
Therein lies part of what is being considered the bad news. Look, this is that -- this is a CBO report, OK, that I was telling you about that came out earlier. The CBO report is the report given to Congress. Ready?
And what it says, according to the information we have received, six key senators, three Democrats, one independent and two moderates are now saying, because of that CBO report, Congress should slow down. Well, that's important.
Let's bring in Sanjay Gupta, if we possibly can, at this point.
Sanjay, you there? DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Hey, Rick. Yes, I'm here.
SANCHEZ: Dana Bash is with us as well.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Hi, Rick.
SANCHEZ: Hey, Dana, first of all, let me ask you what's going on with the situation. Is he getting a lot of heat from some members of his own party, saying, it doesn't look like we are going to be able to get this thing done?
BASH: Well, he is getting some pushback from a lot of members of his own party, particularly conservatives in his own party, saying that they want to get it done, but they want to get it done from their perspective the right way.
And when you look at the details of what everybody is talking about, they are all talking about having the same goals. And the primary goal that is really at risk here, if you will, is one of the things you just talked about, Rick, which is what President Obama calls bending the cost curve, meaning keeping the medical costs down.
We all talked -- talked for years about the fact that people go bankrupt because of high medical costs. Well, that is a main, main goal, not just covering almost all Americans, but controlling medical costs.
And that is why what the CBO director testified yesterday was so damaging. It was a bombshell. That's what one Democratic Congressman called it to me, a bombshell, because it said look, the Democratic plans right now, they are not going to achieve that goal. And that is what is causing this major stir here on Capitol Hill.
And that's what the president is trying to stop.
SANCHEZ: Sanjay, make this make sense to us. Make it make sense to those of us who aren't doctors, aren't in the health profession, but we are taxpayers, and we are wondering whether these 47 million people who don't have insurance in this country are simply going to have to be -- whether guys like you and me are just going to have to foot the bill for them and swallow that bitter pill?
DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Well, I think that that's -- what Dana said is absolutely right. It is hard to sort of imagine a scenario where you can cover so many more people and not have it cost some money.
The theory is -- and I think the president has talked about this since the campaign -- is that if the populist becomes healthier as a whole, because health care is better, because more prevention is instilled into health care overall, so people are not getting sick in the first place, that, ultimately, it will start to lower costs.
What you're hearing -- and, by the way, if you read through the entire CBO report -- I read most of it, Rick -- it says the long-term sort of projections are impossible really to project, predict, because it is hard to know how much prevention is going to actually save in terms of dollars in the long run. How much money do we save with a healthier Rick Sanchez than a potentially sick Rick Sanchez? And we really don't know the answer to that question, Rick, right now.
So, there are going to costs immediately...
(CROSSTALK)
SANCHEZ: But hold on, man. What's to say that this system doesn't help us in a preventive way, but the one we will put in will be able to do that? You know where I am getting at there?
GUPTA: Yes. So, a lot of people say the system that we are currently in, not only does it not incentivize wellness and prevention; it disincentivizes it.
For example, hospitals get paid every time a person gets readmitted to the hospital, as opposed to keeping the person from coming to the hospital in the first place. So, you are -- you could see some potential strategies to focus on prevention.
But it still gets to this question. Does it save money in the long run? How much money does it save? And is it enough to offset some of the costs that the president is talking about?
SANCHEZ: That's interesting. It's almost like what I hear you saying and I think what folks at home hear you saying is, if the system is only based on profit, which is what it is right now, then I hate to say it, but it is profitable for people who make money on people being sick for people to be sick, right?
GUPTA: Yes, I think that is a lot of what people have criticized the health care system about overall is that again you pay for the cardiac surgery, as opposed to paying for the person to never develop heart disease in the first place.
We don't for example, reimburse for a nutritionist to go to people's homes who are diabetics who are at risk of heart disease.
SANCHEZ: Yes.
GUPTA: But they will pay tens of thousands of dollars to have a bypass operation.
Again, it is a -- it's not to say that people who need the surgery should not get it. They absolutely should. But are there ways that can save money, keep people healthier, make us a healthier population in the first place?
SANCHEZ: That's tough, though. That's where we are going to bring Dana Bash into the conversation in just a little bit. How do you sell something to the American people that may not be good for them now but may be good for them down the road?
This is the same with the energy policy that a lot of people are talking about. Politically, I can't see that as being anything but a loser. Dana is going to help us with that in just a little bit, and we hope she can name some names as to who maybe has been talking to the president as well. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: We just learned, as a matter of fact, I'm going to be talking to Sanjay Gupta about this, that the American Medical Association is supporting the overhaul that we have been talking about.
But before we do anything else, and I want to bring Dana Bash into the conversation as we wait for the president to come out and address this scramble that they are going through today on the health care system or the health care plan.
I want you to listen to Max Baucus and what he had to say, a fellow Democrat, about what's going on with the president of the United States and his plan. I don't know if he meant to say this, but he did say it, nonetheless. Let's hear it together.
(BEGIN VIDEO CLIP)
SEN. MAX BAUCUS, (D) CHAIRMAN SENATE FINANCE COMMITTEE: The president is not helping us. He does not want the exclusion. That's making it difficult.
(END VIDEO CLIP)
SANCHEZ: All right, Dana Bash, what do you make of this? Was that the first sign earlier today that this thing was going either down in flames or creating a little bit of a problem, maybe taking on water?
DANA BASH, SENIOR CONGRESSIONAL CORRESPONDENT, CNN: I guess the best thing to do, which I have to do often here in Congress, is translate into English.
And basically what that was about was the fact that Senator Baucus is the chairman have the finance committee, and he has been working day in and day out for weeks, round the clock, with a small group of bipartisan senators trying to come up with a plan that is paid and that will do all of the things that everybody wants to do, primarily bring down the costs that everybody is upset about it.
The main way he and other Democrats and Republicans really were planning on doing this, saving about $320 billion, they think, is by taxes some employer-based benefits, health care benefits.
Well, the president and Max Baucus' fellow Democrats here on Capitol Hill, they don't want to do that. So what Baucus he is talking there is saying the president is not helping, because he is not allowing Max Baucus and others to tax these benefits, which he thinks and many people think is one of the key ways to address all of these cost issues, again, both in paying for the health care reform and also reducing -- that is the is frustration there.
SANCHEZ: For him to say that is a real shot across the bow, isn't it?
BASH: Big-time. And in fact, I was talking to one Senate Democratic aide about that and the CBO testimony, which both happened late yesterday, and this aide said it was a one-two punch, and exactly what they did not need now, because, remember, what the White House started this week out doing, Rick, is trying to get momentum, trying to get momentum to get this all completed at least in the House and Senate, their versions, by the time Congress leaves for August recess.
And the opposite has happened as this week has ended. And that's exactly why you see the president coming out today and trying to turn things around.
SANCHEZ: The CBO, by the way, for those of you who have been listening to this conversation, is the Congressional Budget Office, the folks who come up with how much something is going to cost essentially, or a cost analysis thereof.
Let me bring Sanjay Gupta back into the mix. We are waiting, for those of you joining us now. Any moment now, the president of the United States is going to come out and address the American people.
He decided to do this only about half-hour, 45 minutes ago, to be fair. But we got word from the White House that they were going to do this. And it has to do with everything that you have just been listening to in our conversation.
Apparently, some things have changed over the last 24 hours. Still, the American Medical Association is behind changing our health care plan in some way. So says, in fact, Sanjay Gupta, who has been watching that part of the story. Sanjay, why?
DR. SANJAY GUPTA, SENIOR MEDICAL CORRESPONDENT, CNN: Well, this is maybe a little bit of a surprise to people who have been following this closely. The AMA endorsing a couple of the House bills from a few of the committees that have come out.
It's interesting. A lot of people were surprised because the AMA have been typically been conservative on this, and these committee bills do have what is known as the public option, Rick, the public exchange, which has been a contentious part of the entire debate regarding health care.
So it was interesting, Rick. When I read this, there were a couple things that really came to my mind. The AMA really had a couple of things that they wanted toed address for a long time when it came to health care reform.
One was tort reform, the idea of frivolous lawsuits. And the other was something that's a little bit more of an archaic term known as SGR, sustainable growth rate.
In a nutshell, Rick, what that is, is trying to figure out the way that Medicare reimburses for certain procedures, office visits, and things like that. How much do doctors get paid? And for a long time, it has been believed that the formulas that Medicare was using were flawed, and, in essence, the reimbursements weren't high enough.
What I found interesting was that if you look at these bills coming out of committee, they agreed to repeal the SGR, in effect, possibly increasing the coffers of physicians overall in the next ten years.
So it was almost a little bit of a quid pro quo going on there with regard to the specific endorsement. The AMA says yes, but they might get more money in return.
SANCHEZ: I am curious. I'm going to get a break in, but I want both of your answers to this, and I think we are going to be joined by some congressmen as well, a Republican -- Who are we going to have, Michael? Let me know. Roy Blunt, Congressman Roy Blunt is going to join us in just a little bit.
Is there any explanation, Dana Bash, I want you to think about this during the break, that the president is going to back off on this thing?
BASH: Can I answer you now?
SANCHEZ: You are saying no?
BASH: No, no way.
SANCHEZ: The history of this thing with Bill and Hillary Clinton in the past was it just got too ugly, too much of a political hot potato, and they walked away from it.
Is there a chance we are seeing the beginning of that this time? More on that when we come back, including our conversations with Dana Bash and Sanjay Gupta and Congressman Roy Blunt.
Stay right there. We're expecting the president.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. We're in the middle of something big right now. I'm Rick Sanchez here in the world headquarters of CNN. I'm being joined by my colleagues, Dana Bash, who's following things there for us in Congress, as well as Sanjay Gupta, who is bringing us up to date on something that's very near and to his heart, this health plan being proposed by this administration that he has been following as well.
And we're also going to be joined now by Representative Roy Blunt of Missouri, Republican, who has been following this situation as well.
My thanks to all of you, by the way.
Dana, let me let you finish the point we were making a little while ago. Is there any possibility that you think, before we go to the congressman, is there any possibility that the congressman is starting to show signs that they might be backing off of this thing?
BASH: No. I don't think there is any way that the president would back off of health care reform since this is bar none his top priorities and what he says over and over again the underpinning of any kind of economic reform in addition to, just form his perspective, being the right thing to do.
However, what you are seeing in terms of the shift and the change is the president getting more involved, because what we have seen, covering day in and day out here in Congress, is it has been Congress and the Democrats in Congress who have been crafting this with some broad guidelines from the White House.
But they have been crafting. He is getting more involved in the specifics. And that is very, very crucial from this perspective of Congressional Democrats. They say, please, please get more involved.
SANCHEZ: And that's interesting you would say that, because I have been hearing a lot of Republicans lately pointing the finger, not at the president, but at Nancy Pelosi and saying, you see, this is Nancy Pelosi's plan, this isn't the president's plan. This is Nancy Pelosi's plan.
BASH: Her ratings are a lot lower than the president's.
SANCHEZ: Exactly. That makes sense. Just do the math, baby.
Roy Blunt is joining us now. He is a congressman from Missouri. He is good enough to talk to us now.
Congressman, thanks for being with us. I imagine the news that you are hearing, that there are problems here in the city, are ones you would have expected. But let me start you somewhere else and ask you, OK, what would your plan be?
REP. ROY BLUNT, (R) MISSOURI: Actually, that's the interesting thing about this debate, I think, Rick, is everybody agrees on the top line issues. We believe, I believe, as the leader of our group on our side that's tried to bring our committees together to work on this, I think we are in generally broad agreement.
We need a plan that has -- we need a health care system that has access for everybody regardless of preexisting conditions, one that has more competition, more choice in a way that would make it more affordable, and one that ensures that people have the maximum opportunity to make their own choices about their doctor and their health care.
So we agree on the goals, and our biggest disagreements are how you get there. And probably the biggest disagreement of how you get there is whether the government is going to run a plan that doesn't broaden competition, but actually eventually eliminates all the competition.
SANCHEZ: It's interesting, and I will let you maybe discuss this with my colleague, Sanjay Gupta, who has been giving this a lot of thought, and he seems to be suggesting, and Sanjay, I don't want to put words in your mouth, but maybe something in the middle may be the answer, right?
Because if you do everything based on profit, as you suggest, congressman, that leaves you some holes as well. And we all know if you let the government take care of it itself, that may leave you some holes. Sanjay, would you suggest a mixture of the two would be the way to go?
GUPTA: There are several different issues sort of at play here. and as far as a mixture of the two goes, people have suggested sort of a public/private option. And I am not sure if Representative Blunt is referring to that specifically or how he feels about the idea of a public option.
Let me lay it out this way. The public option would be, the way it has been presented would be for people who cannot afford health care and need some sort of subsidy or some other system in which they can purchase into to get their health care insurance.
The concern, the critics will charge this, Rick. They will charge that a public option that has the backing of taxpayer dollars will be such a big competitor that it eventually will sort of remove the private insurance industry all together, and that won't be any kind of competition at all. That's what the critics will charge.
SANCHEZ: Let's hear from the congressman on that. What do you make of that, sir?
BLUNT: Rick, and I think you said a moment ago that I was for a system based on profit. I'm actually not. I'm for a system based on competition, which is different than a system based on profit.
SANCHEZ: Aren't they the same? Aren't the really the same. You compete because you want to do better than the next guy.
BLUNT: You want to have some profit, but you don't want to have profit that the marketplace really shouldn't allow. That's the problem with the current system is it sort of grew up out of nowhere after World War II without any thoughts to really having maximum choices for people.
An example of maximum choices for people would be Medicare Part D, where everybody every year gets to look at their provider and decide if they still like that provider or not.
But back to Sanjay's point. I think many of us could accept the idea that if at some point the competition we are confident would be there doesn't materialize, and these new choices can't be developed, you visit this again.
But if you start out with a government competitor, nobody describes this as just a competitor for people who can't get insurance. The idea of the government competitor is to somehow make the marketplace more competitive.
What happens is that government competitor eventually drives all the other competitors away. A government competitor is like an elephant in a room full of mice. The fast mice get out of the room as quick as they can. The slow mice get crushed by the elephant. And then the only thing left in the room is the elephant. And then, you have government-run health care, which is what we don't want.
We want more competition. We just don't happen to think the government trying to run a big health care operation is the best place to give people more choice, more competition, and actually, ultimately, lower prices with their health care.
SANCHEZ: That makes sense. We appreciate the analogy with the elephant. We certainly understand that, quite vivid, in fact. What do you expect the president to come out and tell the American people in the next five minutes?
BLUNT: I think he is going to try to explain these numbers that the Congressional Budget Office came up with that really say that this isn't just a trillion dollars over 10 years, it is actually $2 trillion over ten years because the first five years, no money is spent. The second five years, you are spending almost $200 billion a year.
That's not anywhere close to being paid for by either tax increases that have been proposed in this bill or Medicare cuts.
And surely, he will try to explain why both his own Office of Management and Budget and the Congressional Budget Office are wrong in saying this does nothing to slow down the spiraling health care costs.
There were two goals supposedly here. One was to get people insured who aren't insured, and two was to stop the spiraling health care cost. And I don't think this program does either of those, but it sure costs the American taxpayer and the American economy a lot of money.
SANCHEZ: This is start to get somewhat curious, because we were told the president was going to be coming out and speaking -- pardon me for looking over, but we were told more than a half-hour ago, 3:15, we were told the president was going to come.
It gave the appearance that the White House was kind of scrambling to get the president's message out on this. And now we are more than a half hour, 37 minutes to be exact, past the deadline when we expected him to speak, and still no signs of the president.
We will continue with this conversation with Congressman Roy Blunt, Dr. Sanjay Gupta, and Dana Bash as well, to bring you the very latest information coming out of Washington on what seems to be a developing story that we are still waiting to get the climax on, and that's the president of the United States and what he has to say.
That's next. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: All right we're expecting the president to come out any moment now. Welcome back. I'm Rick Sanchez here at the world headquarters of CNN.
Let me just be as transparent as I can with this. The reason that we're following this story now is because the president is obviously going to speak.
But prior to that there was a report that was put out by the Congressional Budget Office, the CBO, and Dana Bash is still with us, and she is going to take us more into the significance of that report in just a little bit, but it seemed to be saying this thing is going to cost a lot more than maybe we thought it was going to cost to begin with.
And that's set off fireworks in Washington. In fact, let's hear first of all, this is Doug Elmendorf. He's one of the directors of the CBO. Let's hear what he had to say, and then we'll bring in our guests.
(BEGIN VIDEO CLIP)
DOUG ELMENDORF, DIRECTOR, CONGRESSIONAL BUDGET OFFICE: In the legislation that has been reported, we do not see the sort of fundamental changes that will be necessary to reduce the trajectory of federal health spending by a significant amount.
(END VIDEO CLIP)
SANCHEZ: Dana Bash, why has this set off such fireworks in Washington, this statement from Doug Elmendorf of the CBO?
BASH: It's actually, believe it or not, through all of this complicated talk about health care, it's actually quite simple, and it is because one of the president's top priorities in reforming health care, and Democrats here too, and frankly, Republicans as well, is to control the skyrocketing costs of health care for Americans and for businesses.
That is one of the key, key goals here. And what Doug Elmendorf testified is that the plan now going through Congress, the democratic plans, they will not do that. In fact, they will have the opposite effect.
And you've already had some conservative Democrats who serve in the House with Mr. Blunt, you've already had some conservative senators ringing those alarm bells prior to that CBO testimony.
So in the words of one conservative Democrat I talked to earlier today, what the CBO director did is give them validation, to say, wait a minute, Mr. President, wait a minute, leadership, let's just -- what's the rush? Let's just slow this down.
And in fact, that is exactly what this letter that we got earlier today from six senators, a bipartisan group of senators, said. We listened to Doug Elmendorf, the director of the CBO, who, we have to say, is somebody who has enormous, enormous authority and power here. Any director of the CBO does, and said, you know, let's delay.
SANCHEZ: Dr. Sanjay Gupta, let us assume that you were, in fact, the surgeon general of the United States, we know that you are not. You have decided to stay with us and become an analyst for us, as you are, one of the best in the business, and the president came to you and he said, man, this report from the CBO is rough.
I don't know quite what to do, but it's fourth down and we either go for it or we punt. What do you tell him?
GUPTA: I'm not in the business of consulting on these particularl issues, and neither would the surgeon general probably be as far as the specifics regarding numbers.
But having said that, Rick, I think what is happening here to some degree is that medicine is as much of an art as it is a science. And to try to apply some of these scientific principles to the practice of medicine I think is what the rub is, to some extent.
How do you determine how much money some of the plans that the president is proposing are going to save in the long-term.
And it goes back to what we were talking about earlier, Rick. How much money do you save to keep people healthy versus letting them get sick.
I think people would agree you're going to save some, but how much, really? And you don't really know.
And even at the end of that CBO report, they said the long-term implications of some of these committee bills are really hard to predict because of cost savings.
SANCHEZ: What about that? What about that, Congressman Blunt? Look, you know, I talk about that all the time. Maybe it's just a bitter pill. To become a better nation in the future, we might have to take a little bit of a hit now.
Are you willing to go along with something like that, or would your colleagues be willing to go along with something like that?
BLUNT: Again, Rick, I think the interesting thing about this is everybody is willing to work together, or at least work to change the system.
And so often the president says, we can either do nothing, or we can do my plan. And there are many more options between nothing and the plan that perhaps the president, the administration, or even this expensive plan that's being scored right now has.
And we want to do that. We want to be sure that everybody has access to coverage. We're willing to do whatever it takes to get beyond the preexisting conditions barrier. We want people to have more choices.
CBO could be wrong, and they may be wrong on this. But even if they're wrong, $2 trillion -- let's say that they're wrong by half, $1 trillion means you have to cut Medicare spending and Medicaid spending, according to the advocates, by $500 billion over ten years. You have to raise taxes by $600 billion over ten years. Even if they're 50 percent -- even if they're 100 percent above what it's really going to cost, they would still be a big problem here.
So we ought to work together to figure out how we get access for everybody into the system. And, obviously, government's going to help with that. Risk pools and other things can be put together.
And there is a great desire to make this system work better for people. Nobody wants to deny people help, nor does anybody want people to have to seek their medical care in the most expensive place possible, like the emergency room.
SANCHEZ: It's interesting. We're getting a lot of tweets on waiting for the president. Mike Bates, one of our regular viewers, says, "Rick" -- right there at the bottom, Robert, "we all know the one reason that could keep Obama off the air. His teleprompter broke." That's a bit of a cheap shot, but somewhat funny as well.
And here we got another one saying, "Obama being late caused Rick to devote 30 minutes and counting to talking about him to fill time. Coincidence? I think not."
You know, you twitters are very Machiavellian on this day. Maybe it's because it's a Friday. Nonetheless, we're with our guests, Congressman, Dr. Sanjay Gupta, and Dana Bash, and we'll be back in just a little bit, and hopefully so will the president.
(COMMERCIAL BREAK)
SANCHEZ: We are getting a ton of responses. Welcome back. I'm Rick Sanchez. Let's go to our twitter board if we possibly can.
It says, "I don't think the president should slow down on health care reform. He should keep on pushing Congress to get this done. I think many people have lots of money to lose with new health care. We the little people, when the fat wasters lose."
"Rick, do you think that President Obama would put his own family in the government-run health insurance plan? Never happen."
And by the way, Congressman Roy Blunt is with us, as is Dr. Sanjay Gupta. Dana Bash is getting ready to do "The Situation Room" for us in our next hour.
There are some people who want to know, what's your plan? What's your personal insurance plan, health care plan, and does that factor into the equation for you?
BLUNT: Are you asking me that, Rick?
SANCHEZ: No, actually, people on the twitter board are asking you that.
BLUNT: Oh. It's interesting. One of the things, I think, if we were going to have a plan that everybody could get into, why not let them into the federal employees plan. And all last year the president kept saying, people should have access to a plan just like mine. He didn't make a couple of points, one was that his plan and my plan and every other federal employee's plan, you have lots of choices, whether you're the park ranger, the postal employee, or the United States senator, like Senator Obama was at the time.
But there are lots of choices, some of them we pay quite a bit for. I think I have a Blue Cross/Blue Shield like plan, but I could have -- and I pay quite a bit. I could have an HAS plan and not pay so much.
And that's the other thing. When you start saying, everybody has to have insurance, which is now one of the president's positions, you then have to define what that means. What kind of insurance does everybody have to have?
SANCHEZ: Down to about five seconds. We're going to let you go.
BLUNT: It's good to be with you.
SANCHEZ: Congressman Roy Blunt, Sanjay Gupta.
By the way, our twitters say Roy Blunt's plan makes sense. So there you go.
Here's Wolf Blitzer in "The Situation Room."
