Return to Transcripts main page
CNN Newsroom
Breaking Down Health Care Reform
Aired March 18, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GIBBS: I think that has crystallized people's desire to get something done this year, because that's a good preview of what happens if we don't do anything.
More letters like that. More -- more stories like Natoma Canfield get told. And I think the president believes these are the type of problems that he and his administration were sent here to solve. So I think that's the flavor of that intensity.
UNIDENTIFIED FEMALE: So more of the same, he hasn't articulated any sort of personal stake in any repercussions of this decision?
GIBBS: Look, I -- very clearly the president wants to get this done. I think -- I doubt any member that's spoken with the president would in any way doubt his strong desire to see this through. So I have no doubt that that's coming through, as well.
UNIDENTIFIED MALE: Thanks, Robert.
Democrat Stephen lynch who supported the health bill last year is now saying he's probably a "no" vote because he thinks it's disingenuous to do this deem and pass maneuver. I know the speaker has still not really told everyone how it's going to work.
But the president last night wouldn't tell FOX one way or another whether he supports it. Can you just tell us, yes or no, does the president support using this maneuver?
GIBBS: Again, as I said, the -- and as you just reiterated, it's unclear what -- what legislative process the speaker will use. And I'll let her decide and announce that.
I think the president was pretty clear yesterday, just as I was the day before that, that everyone knows what this vote is. Everyone knows what this vote is about.
UNIDENTIFIED MALE: Why can't you just tell the American people yes or no, "I want the speaker to do this or I don't?" Some Democrats are saying it will harm the credibility of the process.
GIBBS: Well, I think that the president is of the strong belief, and quite frankly, watching CNN it appears as if you all are of the strong belief that the vote that we're going to have on Sunday is about whether we're going to have health-care reform or not. I don't sense that the stories that are coming out are where you are on the rule. UNIDENTIFIED MALE: The president also last night basically said everyone knows what's in the bill. But as you said, it's just being put online now. We haven't really seen it. Since he says everybody knows what's in the bill, can you tell us whether some of these special deals are still in the bill, like the Connecticut hospital, et cetera.
GIBBS: I think what he said to Ed was that the outlines of what the national -- I'm sorry, the outlines of the exchanges and many of the things like that are based on the Senate bill. I have not had a chance, and I will wait for something to be posted online to go through any of those individual aspects.
UNIDENTIFIED MALE: Last thing. On the CBO numbers that you were talking about, obviously the most important things, it seems, to conservative Democrats who are deciding or are still on the fence is the long-term budget projections.
Specifically, CBO says that these numbers are imprecise, even though they're good in the short term. They're imprecise, especially in the long term, quote, "because there's a greater degree of uncertainty" about the second ten years of all of this. So how can...
GIBBS: I think, quite frankly, in most cases the CBO tends to under-factor, quite frankly, the savings that you generally see on the back end of these.
UNIDENTIFIED MALE: Well, but given the spending that's going on in Washington right now, how can the president assure the American people that these projections which are so far off are going to turn out to be true? I mean, we've seen numbers change in Democrat and Republican administrations repeatedly.
GIBBS: Well, again, I think our -- our reading of this is that CBO has tended to under -- under-factor savings that you're likely to see over the long term. This is -- this is their best estimation. It's the guidepost with which Congress uses for each and every piece of legislation.
Chip.
UNIDENTIFIED MALE: Thank you, Robert.
In the meetings, the president was holding with members of Congress, and by the way, is he having the meetings today?
GIBBS: Sure.
UNIDENTIFIED MALE: Jason Altmire was here today. Is he meeting with him? He was here for the bill sign.
GIBBS: I -- I have not talked about names. Obviously, there were -- I assume that there have been a number of people that were -- had a bill signing that probably were spoken to by -- with staff. I don't know who the president has met with.
UNIDENTIFIED MALE: Coup (ph) from Louisiana was here, too. Were they invited to try to get them to vote for this -- for this bill?
GIBBS: I think they played -- played roles in getting the bill, the very important legislation that the president signed right here just a few hours ago, to provide tax credits for small businesses that hire the unemployed. So that's why they were invited to that ceremony, I think, along with many dozen members of Congress.
UNIDENTIFIED MALE: It wasn't to twist their arms on health-care reform?
GIBBS: I don't doubt that somebody mentioned health-care reform while they were here. I don't -- my sense is they're probably not many conversations happening in any place in this town that don't involve something about health care.
UNIDENTIFIED MALE: In these conversations with members, to what degree is he stressing -- is the president stressing the importance of passing health care to his strength as president, the health of his presidency?
GIBBS: Again, Chip, I think -- I don't think anybody doubts the desire for the president -- the president's desire to see this through, the president's desire to get this done. He's spent quite a bit of time in the first 15 months of his presidency tackling a problem that he believes we have failed to deal with adequately for 70 or so years.
Again, after health care passes, I think that we will move on to many other extremely important issues. We've got several more bites at the economic apple in terms of small business lending, zero capital gains for small business, on the economic side. As I mentioned, financial reform; the Citizens United campaign finance case; comprehensive energy legislation. I think there's no doubt there will be many, many more big issues with which the president deals with. Obviously, this is one he wants to see through.
UNIDENTIFIED MALE: There was a report out there that says the president told some members that the fate of his presidency depends on passing health-care reform. Is that true? Has he said that?
GIBBS: I have -- I'm not aware of that, but I can certainly check again. But...
UNIDENTIFIED MALE: Would it be out of character for him to say that? Or is that one of the arguments that...
GIBBS: Again -- again, I think nobody doubts his desire to see this through.
UNIDENTIFIED MALE: On the trip, why not just delay it one day? If it's going to happen Sunday, does that signal that he's concerned about what's going to happen in the Senate?
GIBBS: No. The scheduling worked throughout the night, when it became apparent that the bill wasn't going to post yesterday, to -- to see about moving the trip back. We -- we looked through and pulled out what very little padding remained from having moved the trip from Thursday to Sunday. And without -- unless we took off basically extremely early in the afternoon on Sunday, it wasn't going to be possible to do -- and we had a speech to the Australian parliament that you don't want to call on Sunday and say, "Hey, is there a way we can move this back a day?"
So it just at that point seemed obvious to us that the best course of business was to reschedule Indonesia and Australia for June.
UNIDENTIFIED MALE: I talked to one expert on Indonesia today who said there's tremendous disappointment there that the president had canceled plans to bring his family. Do you think that might be reconsidered, given that he did spend four years of his life as a child there?
GIBBS: I don't know. I mean, obviously, I think those plans will be made as we look toward scheduling in June. I think the president is disappointed, based on the relationship that we have with a growing democracy, with an important country in our counterterrorism relationship, in a country that's the largest Muslim country in the world. The president looked forward to building off of what he'd talked about in Cairo. But we'll get a chance to visit both countries in June.
UNIDENTIFIED MALE: Final question. On deem and pass or the Slaughter rule, the president is a constitutional law expert himself. Does he believe it's constitutional? Would he sign a bill that...?
GIBBS: He would sign a bill. Yes.
UNIDENTIFIED MALE: He's not worried that it's constitutional?
GIBBS: He would sign that bill, yes. Yes.
UNIDENTIFIED MALE: Robert, are you worried that the sort of calendar vice grip that you have the House in with this trip now being gone, that they will take advantage of this delay and maybe dillydally a little bit?
GIBBS: Well, judging from what I've seen on television and in news reports today, I think this is -- you'll see a vote on -- as best I can tell, you'll see a vote on Sunday.
UNIDENTIFIED MALE: And than -- and then the Senate calendar, you feel confident that everything is going to get done before the Easter recess?
GIBBS: That's our strong hope. That's our strong hope.
UNIDENTIFIED MALE: And delay, not an option in your mind? Or...
GIBBS: Well, look, Chuck, I think the president would say that this says we've been working on this quite a long time. We want to get this done. UNIDENTIFIED MALE: Are all of his calls right now to House members or are there some senators now he's having to call to get them to sign this letter, this potential letter that they would send over?
GIBBS: He has -- he has spoken with a handful of senators over the past several days. And as I said over the weekend, this is a -- the president's involved in -- in talking to both the House and the Senate, because this is -- this is a two-step process.
UNIDENTIFIED MALE: Confident you have the 51 votes in the Senate?
GIBBS: I...
UNIDENTIFIED MALE: Have it now -- I know you don't have the House votes. I know that. Do you have...
GIBBS: I have not talked to the legislative about the latest vote count. But again, I -- I believe that we will -- this bill will pass the House, and then it will pass the Senate.
UNIDENTIFIED MALE: Did any Senate leadership ask you to delay this trip? We know plenty of House members have.
GIBBS: None that I'm aware of.
UNIDENTIFIED MALE: Can you rule out that the president has offered anything in exchange for a vote, you know, whether it's a re- election campaign thing or some sort of bill that they...
GIBBS: We...
UNIDENTIFIED MALE: Immigration or anything like that?
GIBBS: Chuck, we will -- I expect this president will spend a lot of time on the campaign trail when it's time to spend time on the campaign trail.
UNIDENTIFIED MALE: I understand that. Anything...
GIBBS: This is -- Chuck, I don't -- I don't think a member of Congress is going to say, "I'll vote for health care if you come visit my district and campaign for me." I don't -- I just don't -- I don't see that.
UNIDENTIFIED MALE: And finally, on the trip, sort of what it sends messaging. What -- how concerned are you that a domestic political crisis -- domestic political issue, problem, whatever you want to call this right now, delays an international visit like this in a very important region of the world? Are you worried the message that sends to a China or to Indonesia?
GIBBS: I...
UNIDENTIFIED MALE: How concerned is the president. GIBBS: The readout that we got from the calls that the president has made -- again, he'll talk with Prime Minister Rudd later today -- the readout that we've gotten from those calls is that each of these two countries understands what the president has been working on, what he's been involved in, and the importance that he has in seeing it through.
So -- and again, we've -- we've outlined when this trip would be rescheduled. But I will tell you the president believes -- believed it was an important trip now and believes it will be an important trip based on many of the things that we discussed, whether it's counter terrorism, whether it's our export agenda, a whole host of things that...
UNIDENTIFIED MALE: I know I said that was the last question, but you largely have said before, the president can walk and chew gum at the same time.
GIBBS: I can confirm that.
UNIDENTIFIED MALE: Does that send a message that in many case you guys are just choosing to stay here and do health care?
GIBBS: No. Look, again, I think the president believed -- again, understand this, that we did not want to wake up on -- we did not want, at 10 on Sunday morning to make a call to the Indonesians and the Australians and say, "I know we were going to be there in a matter of hours, but we're not going to be there." That's -- I think that -- I think that would cause some -- some problems just on common sense and manners.
But again, I think the president believed that this was something that was important to him. Both the trip and the legislation are. The president believes right now that the place for him to be is in Washington seeing this through.
I'll wind my way.
UNIDENTIFIED FEMALE: Robert, this one is on the jobs bill. When the White House was unrolling these various initiatives, the point was made frequently that these were all interlocking pieces of one package to create jobs. This is a partial move.
Is the White House concerned that, given the health-care debate and other items that are waiting on the agenda, that this is just too slow in coming and that these integral pieces will, in fact, not be passed by Congress?
GIBBS: I mentioned just a few minutes ago, I think, that the president will assume -- the president and the economic team will soon start working through the next step of this. I know there have been meetings already here this past week to talk about the small business aspects, whether it's, as I mentioned, zero capital gains, whether it's depreciation, whether it's $30 billion in lending to small businesses through smaller community banks. So we talked about this, I think, many weeks ago, that we understood that this was not all going to be engrossed in one big bill. And the president will continue to work through the plans that he's outlined either at the -- toward the end of December or at the State of the Union, about ideas that we have to create jobs and create an environment where businesses are hiring
UNIDENTIFIED FEMALE: The $30 billion lending facility sort of looms as the next big fight, given that the proposition is that TARP money will be used. Do you think the health-care debate sort of damages the landscape for that to pass, and now with the Easter recess coming, you're moving it at least two weeks down the road?
GIBBS: Look, I -- I take everybody at their word. I think there's not a member on Capitol Hill that, when they talk about the economy, doesn't talk about small business. I can't imagine that -- I can't imagine that you'd truly want to see politics played with, small businesses getting access to greater capital when that's what many of them tell the president and I think tell members of Congress they need in order to meet their payroll and expand their business.
UNIDENTIFIED FEMALE: Why do you think that politics won't be played with this, given the politics that are being played with health care for 30 million people?
GIBBS: Well, I think -- I think the voters will have their say on the politics. I note that 11 Republicans decided not to play politics with final passage of a jobs tax credit, despite warnings of what happens if health care goes forward.
Again, I think that -- I think that the president was and the Congress were sent here to address the problems that people face in this country. And that's what voters want us -- want to see us do. Yes, sir?
UNIDENTIFIED MALE: When Dennis Kucinich announced his decision to vote for health-care reform yesterday, he said that one of his big motivating factors was his concern about attempts to de-legitimatize the president. Do you sense that?
GIBBS: I did not -- I was in a meeting when -- when Congressman Kucinich made his announcement. I don't know -- I don't know what, in its entirety, that meant. Again, I don't think anybody would question the strong desire of the president to get this done.
UNIDENTIFIED MALE: You keep saying that.
GIBBS: I think that's largely proven by events. I don't think -- I think his desire to get it done is -- extends far beyond what I say.
UNIDENTIFIED MALE: Well, let me take another crack...
GIBBS: Sure.
UNIDENTIFIED MALE: ... at the enormity of this challenge as you -- from the White House. How much does set passage of all of the other future issues that you've outlined here today hinge on success on the health-care reform?
GIBBS: Well, again, at the risk of repeating myself, I think health care is going to pass the House on Sunday. I believe shortly it will pass the Senate and the president will be able to sign all of it into law.
And we will wake up a week or two weeks from now with what we talked about a minute ago, the need to get credit flowing to small businesses. We will discuss financial regulatory reform so that the rules of the road are different than what caused the type of greed and risk taking on Wall Street.
So you know, we will -- we will wake up, and there will be more to do. I think that's true -- true and safe to say about every day you're here.
UNIDENTIFIED MALE: One more on the fallout from this debate. What -- what are the legal and political assessments here of all of these actions by Idaho, Virginia, different states that say that they're not going to accept rules that require people to have health insurance and -- and, even on gun sales and other federal issues?
GIBBS: I'd have to look specifically at what they're arguing on. Gun sales, certainly the belief here is that a -- a provision that requires responsibility and accountability of health care is important, that that would certainly meet any constitutional argument.
And I would say that, again, I think you've heard the president discuss this. Some people say, "Well, why don't you just do half of this?" Well, in order to -- in order to institute provisions that will phase in the bill for pre-existing conditions, insuring that pre- existing conditions don't affect anybody ever, you need to have people in the system.
If not, you'd have the system be gamed. You'd have insurance companies, even more than they're doing now, pick winners and losers to the point where you wouldn't have reform.
So, again, the president and the team believe strongly that what we're about to pass and sign into law will meet constitutional muster.
Yes?
UNIDENTIFIED FEMALE: As Peter mentioned, there are, you know -- a couple of states have actually passed measures saying that "We're not going to let a universal mandate go through in our state." Dozens of others are poised to pass similar measures. So can you explain what the disconnect is?
The administration and Democratic leadership says this is going save states, overall, billions of dollars. Why don't they see that? Where...
GIBBS: Well... UNIDENTIFIED FEMALE: What's the disconnect, when they're saying this is unconstitutional, and dozens of states have lined up against it?
GIBBS: I -- you're asking me to explain the physics of politics. I -- I think the CBO discusses in great detail the type of -- the type of savings that -- that the system is going to see from this. Whether or not the politics is -- whether people's political agendas are speaking more than what's on -- what's best for their constituents, I think that will ultimately be for voters to decide -- Roger.
UNIDENTIFIED MALE: Thank you. Shift topics just a little bit. Mr. Netanyahu is going to be in town next week. Now with the trip postponed, what are -- can you walk us through plans for bi-lats?
GIBBS: We have -- we have not gotten that far down that road yet. We'll have a week ahead tomorrow, but I have -- I'm not sure they've gotten that detailed into next week.
UNIDENTIFIED MALE: There will be some bi-lats, wouldn't there?
GIBBS: Again, let me have a fuller conversation when scheduling has a chance to breathe a little bit.
UNIDENTIFIED MALE: "The New York Times" reported this morning some talk within the White House of an American plan in the wake of the stalled talks right now. Is that correct? And is there talk within the White House...
GIBBS: Roger, our focus is on -- and our focus for the past several days has been on restarting the proximity talks, and calling on both sides to take steps to return to the table, and to refrain from any type of actions of announcements that would undermine the trust that's necessary to get them there. That's what our focus is.
UNIDENTIFIED MALE: No American plan?
GIBBS: Our focus is on returning to proximity talks -- Major.
MAJOR GARRETT, FOX NEWS CORRESPONDENT: Robert, from the podium, either indoors or outdoors, you've taken the opportunity at times when the president has been misquoted or there's been a misimpression left about what the president has said in various conversations. And you haven't availed yourself of that opportunity to today to say he has not told members in their conversations about health care that either the fate of his president or the strength of his presidency rides on this. Do you wish to correct that impression?
GIBBS: No, I've not asked him. I generally don't...
UNIDENTIFIED MALE: You don't know?
GIBBS: I think I said that earlier. I generally don't...
UNIDENTIFIED MALE: You just said that everyone understands he wants to get it done. I'm just trying to find out if it would be wrong for...
GIBBS: Again, I don't -- I'll leave it to your own reporting rules whether you want to -- how you want to report certain things. I've not talked to the president about whether or not -- whether or not he said that.
Again, the president strongly wants to get this done, Major. Wants to get this done in the House this weekend. I think we're going to get that done. And as I said earlier, we wake up sometime next week with a whole set of issues, some of which none of us were thinking about and none of you all were writing and reporting on, that we'll have to deal with.
GARRETT: And when you wake up, if health care has passed, will you wake up in a stronger legislative and political position or a weaker one?
GIBBS: An equally sunny day as this.
GARRETT: Makes no difference, in other words?
GIBBS: No, again...
GARRETT: I don't think the American public, seeing the stakes as they're playing themselves out, would naturally conclude that it makes no difference one way or the other.
GIBBS: Well, I don't normally engage in hypotheticals. And I think I've said from the sunny confines from the Rose Garden several times today that I believe that health care is going to pass.
GARRETT: OK.
On the issue of the CBO scoring, there are a couple of sentences in there that note this is a preliminary analysis, and the full reconciliation language hasn't been fully vetted. Isn't that any numerical or political concern of the White House as it tries to get the final votes in the House? Do you think that has any implications?
GIBBS: I'm not a budget expert, Major, but I think that this is a pretty strong indication of the type of sense this makes fiscally. I think that you see that in the first ten years this legislation will save more than $100 billion. And over the ten years after that, more than a trillion dollars. Greater affordability, greater coverage for the uninsured. Stronger consumer protections.
Look, I have no doubt that CBO will continue to evaluate and provide scores for a long time to come. But I think the president is -- and the administration are strongly encouraged by exactly what CBO reported today.
GARRETT: Did you also note the one caveat, the additional caveat, that this only deals with mandatory spending and has not had time or the requisite data to analyze the discretionary spending implications of this legislation?
GIBBS: I've not read the full 25 pages that....
GARRETT: Is that...
GIBBS: ... that I'm sure many of you have. I have not talked to anybody on that.
GARRETT: OK. Secretary of State Clinton is overseas in Moscow. There is some suggestion that perhaps the start (ph) talks are reaching a moment of culmination. Do you have a general bit of guidance and a readout on that? Should we anticipate something in the near future? Is this something you think will culminate closer to the summit here in mid-April?
GIBBS: Well, we have...
ALI VELSHI, HOST: That's White House Press Secretary Robert Gibbs holding his daily press briefing in the Rose Garden at the White House where President Obama this morning signed a jobs bill.
President Obama, he said, strongly wants to get this bill done. Robert Gibbs repeatedly emphasizing he feels the vote will take place on Sunday and that the bill will pass on Sunday.
Also announcing the president is delaying his trip to Asia once again. He was supposed to go to Asia. He is now not going to do that. But that the vote is expected to take place.
We're continuing to follow that story. Right now on the rundown, two huge stories happening, both of them critical to your future. As I just mentioned, the president has signed a jobs bill. What now? Let's face it: pen and paper don't immediately translate into jobs and wages for Americans. How does a job actually and physically get created? I'm going to break it down very specifically.
Our second push you were just listening to, health care. It's crunch time, home stretch. Call it what you will. But we could be in the final hours of the health-care battle. And one crucial piece of information is falling into place: how much the administration's plan is going to cost. I am tallying it up, and it might surprise you.
But I'm not going to get caught up in the numbers. I and my friend, Dr. Sanjay Gupta, are going to tell you what it all means to you in plain, simple terms.
First, I want to start with the jobs bill that the president signed into law this morning. It was passed yesterday by the Senate. It was a bipartisan vote. There were some Republicans who actually signed onto it, largely because of a big part of this bill is a tax cut.
Let me break this down for you specifically. What is in the HIRE Act that the president signed into law?
First of all, it's a $17.6 billion bill of which $13 billion is going for job creation. Now, let's talk about the job creation part of this bill. The biggest part of this is it exempts employers from Social Security payroll tax on new hires who were jobless. They had to be jobless for the last 60 days, the last two months.
The Social Security payroll tax is about 6.2 percent, so it's about $6,200 maximum per employee. And a $1,000 credit if workers stay on the job for one year. So an employer can get up to $7,200 by hiring somebody who has been out of work for at least two months.
Now, the estimates are that this bill could create -- could create -- up to 300,000 jobs. And I'll tell you why there's a "could" in here.
But first, let me remind you of where we stand on the unemployment situation in the United States. Right now turn employment rate in the U.S. is 9.7 percent, lower than it has been. Nine point seven percent. But there are 14.9 million Americans out of work and actively looking for work.
Let's put this in perspective. From the beginning of this recession, we started losing jobs in January of 2008. Just a few at the time. Take a look at what happened last year. About last January, February, March, a year ago we were at the bottom here. More than 700,000 jobs in each of those months lost.
Then we started to creep up. There were some anomalies, but largely, we got to the point where we had one month of job gains. Then job losses again. Lost about 36,000 jobs in February.
So we've seen the job losses stem, but the bottom line is there are still a lot of people out of work who can't get that work.
Now let me just show you what this means. I've created a guy named Jobless Joe. And what the president's jobless -- jobs bill means for Jobless Joe.
So the government passes this program, which basically has $13 billion in tax cuts for people who employ new workers. So the company then gets some of this money. They get a discount, basically, on the payroll taxes that they have to pay to employ, in this case, Jobless Joe or Jobless Jane or whomever you want. That's how this bill ends up creating jobs.
Now, let's talk about what that means. We also looked at whether this will spur companies to actually create jobs. A recent survey by American Express says that 42 percent of companies say the No. 1 reason to create a job, well, it's pretty obvious. Customer demand increases. That's the reason businesses typically create jobs.
Eleven percent of companies say tax credits, like the one we saw signed into law today, will be influential. But again, that could move, depending on how big or how small the tax credit is. Five percent says it's access to loans. That companies, particularly small businesses, have difficulty with credit.
Now, let's talk a little about what you have to do, what companies have to do in order to create jobs. When the economy shifts, companies have to shift. So there's an example, for instance, in Austin, Texas. A plant that used to make Lincoln Continentals is now harvesting wind energy. It's a company called Extreme Energy. So companies have to shift.
Let's talk about what you have to do if you are Jobless Joe or Jane and you're looking for a job. There are a couple things. One is you need to -- let's just pass through this one, Michael, if we can. Let's skip this screen and go to the next one about what Joe or Jane has to do.
First of all, we need to think about retraining. A lot of those 14.9 million Americans out of jobs are out of manufacturing jobs. And as a result of that, they might need to do something other than manufacture. They may need to refrain into nursing or education or things like that where they can get a new job.
The other thing is they need to think outside of the box. They need to think about careers they wouldn't have otherwise thought of. And thinking outside the box also means geographically outside the box. If you come from the Rust Belt in the country where there have been manufacturing jobs lost, you may have to move into parts of the country like Texas, like the mountain states in the middle of this country where there are new opportunities.
Let me tell you about what Washington has done so far in terms of creating jobs. Stimulus, that we have been studying for several weeks now. A year into the stimulus bill it has created jobs. Some say not as many as it should have, but the bottom line is that is what Washington has done. They've extended jobless benefits. We spent time on this show discussing those jobless benefits. And they have focused and continue to focus on getting credit out to small businesses and individuals, people who want to study so they can get a better chance at a job.
That's what Washington has done, let's discuss what Washington needs to do. A lot of people say it's this, that is, by the way, our creative way of saying a tax cut, tax break. That's the word "tax" and it's broken. Tax breaks, this bill, $13 billion in tax breaks. That's half of the way there. And number two, creating and investing in infrastructure. Those are some of the stimulus projects, things that will actually create jobs and industries for the future.
So that is the jobs bill in a nutshell. And that's one the President Obama has signed into law today. Robert Gibbs, the press secretary, just saying on TV it's not all that needs to be done on the jobs front but it is some of it.
OK. That's number one. That's number one focus today, the jobs bill. That was passed yesterday, signed into law today. The other focus, health care. It is still far from a done deal, but health care reform at least now appears to be financially sound, according to the Congressional Budget Office. We're going to run the numbers and watch the fallout as soon as I come back from this break.
Stay with us.
(COMMERCIAL BREAK)
VELSHI: OK, one of the things that the number of undecided congressmen have been waiting for is a price tag on the final health care reform package. Well, that came down today from the Congressional Budget Office, the nonpartisan congressional office that puts a price tag, an estimate basically, on bills. This is a complicated, complicated process. Let's take a look at what they came out with.
Basically, they said the price tag of this bill over 10 years -- now remember, a bill goes for longer than 10 years -- but the price tag over 10 years will be about $940 billion. That's not a huge surprise.
They do say, this is interesting, there will be a saving to the deficit, a reduction in the deficit of $138 billion over the first decade. And in fact, that savings to the deficit balloons over time. The second decade actually has a savings of over a trillion dollars.
So that's going to help some people. There were some people in Congress who said I am not voting for this if it adds one dollar to the deficit. That should help some people make some decisions.
The president wasted no time in getting on to this estimate. Let's listen to what he had to say.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This morning, a new analysis from the Congressional Budget Office concludes that the reform we seek would bring $1.3 trillion in deficit reduction over the next two decades. That makes this legislation the most significant effort to reduce deficits since the Balanced Budget Act in the 1990s.
And this is -- this is but one virtue of a reform that will bring new accountability to the insurance industry and greater economic security to all Americans. So I urge every member of Congress to consider this as they prepare for their important vote this weekend.
(END VIDEO CLIP)
VELSHI: Interestingly, democrats are calling this the biggest deficit reduction act since the Clinton era,, which turned deficits into surpluses. President Obama liking this bill.
I want to bring Brianna Keilar in, she is our Capitol Hill correspondent. Brianna, you've been following this fairly closely. What's the take on Capitol Hill?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, democrats, democratic leaders say that they are absolutely giddy. That's what the number three democrat in the House said, Ali. And here's why, because -- you know, let's sort of break down the numbers here.
Nine hundred and forty billion dollar price tag and that's according to the nonpartisan Congressional Budget Office. Let's keep this in mind, though, this is a preliminary -- I emphasize preliminary -- estimates. These are not the final estimates that the CBO will do. And they say there is deficit reduction over those 10 years of $138 billion. You said that democrats are touting further savings over the next 10 years, but things get a little muddy there and the CBO has actually emphasized that it would be such a rough estimate.
So really, let's look at this $138 billion over 10 years that they're emphasizing. Why is this important? It's important because House democratic leaders, as they go it alone without republican support, because republicans say this is a government takeover of health care, democratic leaders are looking for support from within their own party. And they're having a hard time getting it from some of those moderate democrats. Many of them fiscal conservatives who say they're worried about this costing too much. They're worried about it adding to the deficit.
So that deficit reduction is key there. Just listen to what Speaker Pelosi said about these numbers.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (R-CA), HOUSE SPEAKER: We feel very strong about where we are in terms of how we proceed. The CBO report that we have that, again, speaks so eloquently. I love numbers, they are so precise. Speaks so eloquently to the savings that are there for the American people.
(END VIDEO CLIP)
KEILAR: That $940 billion price tag over 10 years, Ali, important to point out that costs more than what the Senate bill was. It was under $900 billion and under $900 billion is what President Obama said he wanted. But again, democrats are emphasizing this savings that in this preliminary report CBO is pointing out.
VELSHI: You know, I've had a lot of people posting to Facebook to say, I'm not understanding how it costs a trillion dollars and it saves money over 10 years. What's the basic math on this?
KEILAR: OK, and I think a lot of people get confused because you look at the bank bailout, you look at the stimulus, which was deficit spending, right? And this is not. And the reason it's not is because -- this is how democrats explain it -- that what they're doing is they're making cuts in Medicare. They insist they're not cutting benefits in Medicare, they're cutting wastes and they're cutting fraud. Because, you know, you've seen stories on this. There's a whole lot of fraud in Medicare. So that's one way they're going to squeeze out hundreds of billions of dollar from Medicare.
But they're also doing some revenue raises. They've got to bring in some cash to pay for this. They've got to do this in a couple of ways. One is the thing we talked so long about, the Cadillac-plan tax. The so-called Cadillac plans, high-end insurance plans, they're going to slap a fee, a tax on those plans that insurance companies have to pay, although critics say it's going to end up trickling down to some of the people who have these high-end plans.
And then the other thing I think is particularly interesting in this is a tax on -- it's kind of hard to explain so hang in there with me. It's a tax -- it's a Medicare fee that would be paid by people who make a lot of money, $200,000 or more as an individual or $250,000 or more as a couple. And this would take into account as well if they get things like annuities or interest, they're making money that way. That could also be taxed.
ALI VELSHI, CNN ANCHOR: Brianna, good to talk to you. This is a complicated issue. You did a great job of breaking it down for us. You will be continuing to do that until this thing is over, which might be a while. Brianna Keilar on Capitol Hill joining us to explain some of the pricing, the price tag on this. We will of course keep you posted as to whether or not there are members of the House of Representatives who are agreeing to change their votes from a no to a yes because they now have a price tag and an estimate that says it won't add to the deficit.
We could see a House vote on health care as soon as this weekend. Robert Gibbs, the press secretary, kept insisting it's going to happen on Sunday. What happens if it does pass and become law? When will the big changes start happening? In many cases they're not as soon as you think. Dr. Sanjay Gupta has the answers. He joins me after this break. Stay with us.
(COMMERCIAL BREAK)
VELSHI: As I promised you I'm going to join Sanjay now to tell us a bit about this health care bill, what it means to you and part of what it means to you is this isn't happening. If it passes on Sunday it does mean anything to do in the next few days.
DR. SANJAY GUPTA, CNN CORRESPONDENT: You know what's so interesting? I was just listening to your discussion earlier as well. There's really two parts to this, right? Insurance which we've been talking about a lot and then actually getting health care.
VELSHI: Yeah.
GUPTA: And those two things don't necessarily always go in order. So to your point, there are some things that are going to happen right away who I think they're going to make things easier for people who've been really waiting for assistance. Take a look at some of them. 2010, now, based on what happens this weekend, this idea of capping people. You only get so much money to take care of you. You can be capped yearly or over your lifetime. They say that's not going to happen at least annually anymore. If you got problems, you need (INAUDIBLE) that will help.
Pre-existing conditions. So you've had some sort of medical problem earlier in life. Ali, you're just too expensive to insure anymore. There's not going to be that. Interestingly, Ali, you'll appreciate this, the way they're going to deal with this issue is set up these high-risk pools all over the country and fund them.
VELSHI: You might understand this if you live in a part of the country that has a wind pool for hurricanes or something like that. It only works in a lot more people are signed up which is why this thing, insuring 32 million more Americans helps to mitigate the cost of that.
GUPTA: That's right. So you're getting some benefit from volume and also some dollars. $5 billion is what they target as being able to offset some of these costs. Young adults, that's an obvious one, people who have finished college. They have gotten their first job yet. They can still be covered.
VELSHI: Up to the age of 26, big deal there.
GUPTA: I know the drug discount for seniors. This may be worth explaining. You did a very good job of these. But when you think about this doughnut hole we talk about. It's a doughnut and this is what a doughnut looks like. This is the hole in the middle. You may get this part covered. So you start adding up drug costs. They say we're going to cover this. But then for this entire part until you get to the other part of the doughnut hole, it's not covered.
VELSHI: So the first big bunch of expenses are covered. Then there's this big empty space, $1700 that's not covered.
GUPTA: That's right.
VELSHI: And then once you spend a few thousand dollars on drugs, you get covered again.
GUPTA: They want to shrink this doughnut hole. That's what this last part is about and again, that may happen in 2010.
VELSHI: So those are the immediate changes we're going to see. What happens a little later down the road?
GUPTA: That's a good question, because even if you add up all of that stuff you're still not covering the fast majority of the 31 million Americans that you're talking about. Ultimately mandated coverage is going to be the mantra. You have to have health care coverage if you can afford it. If you can't afford it, we'll help you is what we're sort of hearing. Health insurance exchanges, thing of those as supermarkets all over the country. Let the private insurers compete for your business.
VELSHI: And the exchanges or super markets mean that you get to compare prices so the vendors give you a more competitive price because they know you can go somewhere else. That's the point of the exchange.
GUPTA: They're working for you as opposed to vice versa. No discrimination. This is an extension of that pre-existing condition rule. They can't discriminate against you based on your previous medical history. Tax breaks, you can probably explain this better, it's this idea that if you're not making enough money, it's too much to pay for health care insurance. You're going to get a tax credit.
VELSHI: You have to pay for your insurance but you're going to get a credit somewhere else on the tax that you otherwise would have paid.
GUPTA: That's right. So at some point you're going to get benefited financially. And finally, this Medicaid expansion. We looked at the language very carefully on this. This is for childless couples living near the poverty line. They're going to be also eligible for Medicaid. And as a result, eligible for insurance. Total all of that Ali, those twofold plans and that's where you get the 30 to 31 million people.
VELSHI: This is a big deal. Thank you for breaking this down in such an understandable way because there are so many slices of this thing and so complicated. But we're getting to the end. Sanjay is going to stay with us to make sure that we understand this all the way through.
One of the issues that we've been talking about that is hard to understand is how your insurance premiums, if you get insurance through work, are affected. Last week we talked about people who worked for big companies like I do which self-insure. We're going to come back and talk about people who get their insurance through work but from groups or companies that are too small to self-insure. They buy group policies. Your insurance is going to be affected in a different way. We'll talk about that when we come back.
(COMMERCIAL BREAK)
VELSHI: Last week we broke down the real cost of health care in America for the large employers who provide most of the coverage and the workers that they cover. Maybe you're one of them. Back then I promised you we would take another hard look at some even harder numbers -- those facing small businesses, the ones that are not big enough to self-insure and, of course, the people who work for them. Here they are. The HR consulting firm Towers Watson, which helped us last week, calculates that in 2010 the average yearly health insurance premium facing small businesses is $5,000 a year for an individual, $15,000 for an individual or their family or their dependents. That's the total cost of insurance paid for by the worker and their employers. Now that's higher, lower for the individual and higher for the family than in larger companies. Typically small employers split the cost of health care 50/50, 50 percent paid by the individual, 50 percent by the employer. That sounds fair until you see the split in large businesses that we talked about last week where the business -- the employer pays about 80 percent, the individual pays only about 20 percent, so that split is a little bit unusual.
Now, what are they paying for when you pay these premiums? In large businesses, about 92 percent of the premium goes to cover the cost of health care, about 8 percent are administrative costs and things like that. Now, in a small business, the cost, the actual money, the premium, $5,000 for an individual, $15,000 for an individual and their family, about 85 percent of that premium actually goes to the cost of health care, 15 percent goes to the cost of administration . The cost of administration for small businesses is higher than it is for big businesses. One big point to keep in mind is that while large employers provide health coverage to about 160 million Americans, the number that are covered by small employers is a fraction of that, but it's still in the millions and they have a disproportionate stake in this reform debate that seems to be getting closer to a resolution. Now, to discuss this more, I want to bring in Mark Olson. He's a principal and consulting actuary at Towers Watson, the company that helped us crunch these numbers, a major consultant to companies across the county and an administrator of these benefits. Mark, thank you for joining us. I appreciate your time.
MARK OLSON, ACTUARY, TOWERS WATSON: Yeah, thank you. Glad to be here.
VELSHI: Mark, what is the net effect of the health reform that is being discussed right now that is likely to pass or could pass, this weekend on this group that we're talking about, this group that works for small businesses, who have a bigger stake, they pay a bigger part of their premium, what's the net effect likely to be?
OLSON: Well, as one of your associates pointed out earlier, one of the interviews you were having earlier pointed out, it's -- it will take a while for it to have an impact, but certainly there's some things that are going to hit right away. The mandates on benefits and also the elimination of the annual maximums or lifetime maximums. Those will be increases that get passed through pretty much right away, as soon as the insurers can pass them on to the small employers, so they'll be looking at increases within the next renewal period, within the next year.
VELSHI: Which is not the same as people who work for companies like I do, where we're not -- we're not sure -- we're going to see increases, we know that, because those increases are tied to the cost of health care, but it's not clear that my insurance is going to go up as much as someone who works for a smaller company?
OLSON: Yeah. And smaller companies typically have -- are more likely to have limits on annual maximum annual benefit maximums or lifetime maximums. A lot of the larger employers the lifetime maximums are much larger and they may not have any annual limits on benefits at all.
VELSHI: Mark, we were talking about 160 million people or so who are covered by the large companies, call it the "Fortune" 500 companies that we call them self insure, that the 80/20 split between employers and employees, these companies that we're talking about more of a 50/50 split, how many Americans are we talking about who get their insurance that way?
OLSON: It's hard to tell, but when you kind of break the numbers down, we figure it's about 250 million that are, you know, in the population and there's about 30 or 40 million that don't have coverage, you can kind of figure out what the difference might look like, so it's somewhere in that, you know, the difference would be something like 40 to 50 million, somewhere --
VELSHI: Yeah, those are sort of numbers that we've heard before. What kind of companies are we talking about? Everybody working for a mom-and-pop company that does offer insurance to, what, a midsized company?
OLSON: Yeah, it might be a midsized company up to 1,000 employees. You know, it depends a lot on the business conditions, how much the employer's able to support, so as you get down to the smaller-size employers, it's very difficult for those increases, the health insurance premium increases, to get passed on through their businesses, so as you get down to the smaller-size employers, the mom-and-pop- shops, some of them may not provide health insurance at all, and this is part of what this is all about.
VELSHI: They can't absorb that cost. Now what happens to people who are subject to this, people who work for these smaller companies, anything from a mom and pops, to a midsize company who are facing higher increases. Over time will this creation of insurance exchanges and more people being covered, will that lead to lower prices for them over time or are we looking at increases for them year after year after year?
OLSON: Yeah, that's a really good question. Theoretically with a larger pool and hopefully being able to pull in better risks, it may not be insured, the theory is, yeah, the health insurance exchanges would help lower the increases. I think what it may actually do is help lower the rate of increase, but that still remains to be seen.
VELSHI: Your bottom line is that generally speaking people who get insurance through their employers are likely to see increases one way or the other whether or not this health care reform bill is passed the way it is on Sunday?
OLSON: Yes. There are certain aspects of this. There are assessments to brand-name manufacturers of pharmaceuticals. There are assessments to health insurers and the numbers aren't small, as you're well aware, $30 billion plus for the manufacturers of pharmaceuticals, another $60 billion on the health insurers and all that's likely to get passed through in one for or another.
VELSHI: That's the way it works.
OLSON: On top of the health care cost increase, yep.
VELSHI: Mark, thanks very much for your time and those great numbers that help us at least make some sense of what is going on. Mark Olson is a principal consulting actuary at Towers Watson joining me from Boston.
We're going to take a quick break. As I told you, we're covering two very big stories right now, health care and the jobs bill. Ed Henry has been on top of both. He's in the rose garden at the White House. We're going to check in with him about a briefing that just took place and find out what is happening with this health care bill when we come back.
(COMMERCIAL BREAK)
VELSHI: Let's go to the nation's capital and the rose garden at the White House, Ed Henry is there. Ed, we were listening into the White House briefing. You and -- and press secretary, Robert Gibbs, having an exchange there. What do you take away from the conversation that you had? Tell us a bit about it. ED HENRY, CNN CORRESPONDENT: Let me tell you what you couldn't see on camera. If you look at this wide shot behind me, the oval office is just over my right shoulder and as Robert Gibbs came out, the entire time I could peer through the window there into the oval office and the president was in there, working away, we believe on health care and from talking to other staffers who are familiar with what's going on back there, he was at the oval office, at the desk in the oval office, at one point with some paperwork. At another point he was up out of the desk. He was talking to other people who were in the room and so it was sort of surreal, you couldn't really see that television. But here in the rose garden we could see the president of the United States just over Robert Gibbs' right shoulder basically trying to push this health care bill through.
