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Health-Care Reform Bill Passes House, Debate Continues
Aired March 22, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: All right. It is go time. CNN NEWSROOM continues right now with Ali Velshi!
ALI VELSHI, CNN ANCHOR: Good to see you, my friend.
As Tony says, I'm Ali Velshi. I'll be with you for the next two hours today and this two hours every day. I'm going to try and take every important topic we cover and break it down for you, giving you a level of detail that's going to help you make important decisions about, well, obviously your health, your taxes, your student loans and your security.
So let's get started. Here's what I've got on the rundown right now. A massive health-care overhaul is on its way to becoming the law of the land. So, what now? We've heard from the politicians. Now it's time to focus on you. How will health-care reform affect your health care, your costs, and your access to care? We're going to break it all down and talk to some experts about it.
Plus, there's another part of the bill out there that's important for anyone who's going to college, been to college, or supporting a college student. It would boost grants to millions of students and make Uncle Sam a one-stop shop for relatively cheap student loans. It's making private lenders a little bit worried, though.
Also on the rundown, your name, your birthday, your hometown. It's seemingly innocent information. So how does someone use it to determine things like your Social Security number, or even your sexual orientation? You won't look at your privacy the same way again. You've got to stick around to listen to this.
All right. When your grandkids study American history, they will spend a week on the past 24 hours and the days and weeks to come. Since last we spoke, a historic overhaul of the U.S. health-care system squeaked through the House of Representatives, literally, and now awaits -- awaits the president's signature sometime tomorrow.
But that, of course, is not the end of the story or the end of the voting. Here's why. All right. The House passed the health reform bill on Christmas Eve. You'll remember that. That was the Senate passed it on Christmas Eve. That's that one.
It then went through a series of changes that most House Democrats never would have voted for the Senate bill without. So now the Senate has to pass those changes. This is so-called -- this is called the reconciliation process. But it can't even start until the first bill, which got passed last night, gets signed into law, which is probably going to happen tomorrow.
Now, assuming that all goes as planned, opponents, by which I mean Republicans and others, still have options. They can try to repeal the reform in Congress. They can challenge reform in the courts, and they can try to block the federal efforts in state legislators -- legislatures. We'll break down those options a little bit more later in this hour.
But first, one more look at the sound and fury that capped a full year of sound and fury. Listen to this.
(BEGIN VIDEOTAPE)
REP. MARSHA BLACKBURN (R), TENNESSEE: My colleagues cheered that this bill is paid for. They ignored the fact that it is our children who will pay for their greed. My colleagues shame us for scaring the American people about the contents of this bill. We know the consequences of this bill will be frightening and horrible. Freedom dies a little bit today. Unfortunately, some are celebrating.
REP. PAUL RYAN (R), WISCONSIN: This bill is a fiscal Frankenstein, a government takeover. It's not democratic. Mr. Speaker, my colleagues, it is not too late to get it right. Let's start over. Let's defeat this bill.
REP. JAMES MCGOVERN (D), MASSACHUSETTS: I regret the fact that my Republican friends are not standing with us. I regret the fact that they deliberately tried to obstruct this process. But you know what? The Republicans opposed Social Security. They opposed Medicare. They were on the wrong side of history then; they're on the wrong side of history today.
REP. JOHN LEWIS (D), GEORGIA: This may be the most important vote that we cast as members of this body. We have a moral obligation today, tonight, to make health care a right and not a privilege.
There are those who have told us to start over. There are those who have told us to wait. They have told us to be patient. We cannot wait. We cannot be patient. The American people need health care, and they need it now.
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: On this vote, the yeas are 220. The nays are 211. The bill is passed.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tonight's vote is not a victory for any one party. It's a victory for them. It's a victory for the American people. And it's a victory for common sense.
REP. JAMES CLYBURN (D-SC), MAJORITY WHIP: I consider this to be the Civil Rights Act of the 21st century. Because I do believe that this is the one fundamental right that this country had been wrestling with now for almost 100 years. I think tonight we took a giant step toward the establishment of a more perfect union.
(END VIDEOTAPE)
VELSHI: OK. Well, with all that in mind, let's start drafting that history book I talked about.
Joining me to talk about the impact, the fallout, the future of health-care reform, CNN political analysts Roland Martin, David Gergen and Gloria Borger.
Thank you all for being with us. We were watching, David and Gloria, late into the night as they -- as they tried to make sense of this, as that history was unfolding.
David, it really, one way or the other, wherever you stood on this, it was very clear from the Republicans, and from the Democrats, that they were all aware that history was being made last night.
DAVID GERGEN, CNN POLITICAL ANALYST: Sure was. That was the first rough draft last night, Ali. But I think we know today that, even as the ink starts to dry, that there are going to be more chapters yet to come.
Because this is a very polarized nation still. The president is going to set off on this blitz. He's going out to Iowa on Thursday to convince people, you know, this is a good idea.
At the same time, of course, the Republicans feel they have the bit in the teeth. And they're going to keep pushing and pulling to see if they can't derail this before it finally gets passed. I think that's unlikely. But more importantly, to win the fight for November and see if they can't roll back some of these provisions.
VELSHI: Right. And that's -- I guess that's the key part, when you said that was a rough night last night.
Gloria, we saw passage of the bill. The president's got to sign it. But really, what's going to matter is how this leads up to November and whether Americans say, as John Boehner and the Republicans have said, that they have -- they have put their foot in the face of Americans. They have gone against what people want.
Gloria, when you listen to John Boehner and you listen to Nancy Pelosi last night or any combination of Republicans and Democrats, you might have thought they were talking about two different things, two different bills.
GLORIA BORGER, CNN POLITICAL ANALYST: Completely different things. I mean, it shows you how polarized the Congress is. And it shows you the differences in the way they think about the role of government.
What's really interesting about this, if you look at this historically, you have just passed a plan, a health-care plan that depends more and more on government. Yet, you have an American public that trusts government less at any time than it has since Watergate. It's lower, in fact, than it was during Watergate. This is a big risk for this administration.
And what they're banking on is that, once people get -- get to see what's in this bill, and there are going to be some things people are going to like coming down the pike within the next three to six months, that once they start seeing some of those things, they're going to say, "Gee, not so bad." And Republicans will have a very difficult time, they believe, putting the genie back in the bottle.
Do you want to repeal, for example, an enhanced Medicare prescription drug benefit for seniors? Do you want to repeal something that eliminates lifetime caps on your health insurance policies? You know, those kinds of things are going to be hard to take away from people. So they're banking -- they're banking very much on different sides of history here. And each of them believes the public in the end will side with them.
VELSHI: All right. Roland, I haven't heard from you yet.
ROLAND MARTIN, CNN POLITICAL ANALYST: But Ali...
VELSHI: Hold on. Hold that thought, because I know it's going to be good. But hold that thought, because we've got to pay the bills. Stay right there, the three of you.
When we come back, Roland, I want to hear how they're going to sell this thing and how the test run's going to work and what your thoughts are.
Stay with us, Roland Martin, David Gergen, Gloria Borger. We're not going to finish this conversation. We'll continue talking about the real cost of reform, financial and otherwise, when we come back.
(COMMERCIAL BREAK)
VELSHI: All right. It's health care the day after. We're going to be breaking down, through the course of this show, what this means for your insurance, your access to doctors, your costs. But there's a big, big consequence politically to what happened last night.
David Gergen, Gloria Borger and Roland Martin join me right now.
We haven't heard from you yet this morning, Roland, or this afternoon. Tell us your thoughts.
MARTIN: Gloria talked about this distrust in government. But we must understand, one of the reasons there's so much distrust is because both sides have painted the other as being so corrupt. And so we forget the fact that this country is still split in so many different ways.
We look at all these different polls. The Republicans who are saying Americans don't want this. But the reality is, in many ways, it's 50/50.
And so I don't buy the notion that Democrats are the only ones who are going to be in trouble going into November when it comes to health care. You're going to have Republicans who are also going to have to defend why they would not support the uninsured.
Here's the other thing that really jumps out. We talk as if this election in November is sort of like November 2008. It is not a national election. In it there are small elections. There are congressional elections. And so what plays nationally may be a lot different than that particular congressional district. So the dynamics will be a heck of a lot different.
VELSHI: Well, let's think about this. Because we do have polling that people indicates that people are mad at both parties, and people are mad at incumbents.
But let me show you a new poll where we asked about government involvement in health care under the Democrats' bill: "What do you think of government involvement in health care under the Democrats' bill?"
Fifty-six percent of respondents said "too much." Sixteen percent said "not enough." And about 28 percent said "about right." So, you know, a bit of a plurality for the "too much," Gloria. What does that mean?
BORGER: Yes. Well, that's President Obama's problem. I mean, he's got to convince people, not that Republicans and Democrats can work for you, but that the government bureaucracy can work for you and can make things better for you. And people just don't trust that. You know, they don't like the IRS. That's always the example that's thrown around. But, you know, that's the crux of the problem that Barack Obama has.
And let me disagree with Roland a little bit. I do think that this first midterm election for this new president will be a national election. The Republicans are going to nationalize it. There are over 50 members who came in really new on Barack Obama's coattails...
VELSHI: Right.
BORGER: ... many of them in swing districts. And a lot of them we saw last night voted with Barack Obama on this health-care bill. And that could really, really hurt them.
VELSHI: David?
MARTIN: But Ali, the same...
VELSHI: Hang on a second...
MARTIN: The same poll you cited...
VELSHI: Yes. Go ahead.
GERGEN: Go ahead, Roland, please. Roland, please.
MARTIN: No, no. The same poll -- the same poll that Ali cited, Americans trust President Barack Obama more on health care. So the problem here is, they -- 56 percent say it's too much.
VELSHI: Yes. MARTIN: But more Americans trust the president on this. So it's really going to be his job to sell this to get them to rally behind him.
VELSHI: Which, David, a lot of people say is why we got to where we are, because the president decided to take a different approach and really sell it.
But the bottom line is, there are people last night saying this is historic; this is like Social Security; this is like Medicare. And there are some people saying this is the worst thing that ever happened to America. They've got to square the circle somehow, David.
GERGEN: Well, they do. But let me -- I happen to come down where Gloria is arguing here. But let me come -- let me make a different point.
There are all these advances -- and yes, people are going to wake up and see that they -- this year, they don't have their children who are going to be OK, even if they have preconditions. That's going to be helpful to the president. And there are other elements in this bill that are going to be very helpful.
But it's also true that people are now going to be looking to the government to -- as responsible for their general condition of their health care. And -- and premiums are going to continue to go up this year, Ali.
There are employers who are going to continue to lay off people, because it's too expensive. There are employers who are going to say, "Aha, here comes this great, big pool. I can just put my employees over in that pool."
And there's going to be -- and people are going to say, "I thought the government was protecting me now." And that protection is not going to be there.
BORGER: Right.
GERGEN: In some ways, I think both sides have oversold this. The -- the Republicans have argued that socialism -- and socialism in the morning, and people are going to wake up and see it's not there.
But the Democrats have sold this as there's way too much suffering. And tomorrow morning the suffering will be over. And it's not going to be over.
BORGER: You know, he...
GERGEN: This is a painful period.
BORGER: Here's the...
MARTIN: And the great fear, the great...
BORGER: It's sort of interesting. When you passed Social Security and Medicare, people knew exactly who was -- that was going to affect and how it was going to affect them. OK, Medicare...
VELSHI: Yes.
BORGER: ... you're over 65, whatever, it's going to help you out.
When you pass this health-care reform, it's so huge.
VELSHI: Yes.
BORGER: People are scratching their heads. That's why we're trying to explain it.
VELSHI: And that's what we're going to be doing. You've teed me up very nicely for that, Gloria, because we're going to get into some very specific discussions. Roland is going to come back a little later. We're going to talk about the students who are affected by this, because there's a whole part of this bill that affected students.
MARTIN: That's right.
VELSHI: But we're going to talk about costs and benefits. We're going to talk about benefits and who gets them.
So thanks to all three of you. It was really great to watch you through this whole process. And as David says, it's just the first wrap. We're going to be doing a lot more talking about this and it's effect. Thank you.
MARTIN: It was so rough on David, he came with no tie.
VELSHI: Doesn't have a tie on.
GERGEN: The "JK, USA" approach. The "JK, USA" approach.
VELSHI: That's right. It's part of the "JK, USA." It starts tonight, "JOHN KING, USA."
Thanks to all three of you for being here.
When we come back, we're going to talk about how we're actually going to pay for this health-care reform. Who is really footing the bill for it? And you might not care who's footing the bill, but it has implications for our economy. CNNmoney.com's Poppy Harlow and economist Mark Zandi (ph) are joining us with a look at the bottom line of this health-care bill when we come back.
(COMMERCIAL BREAK)
VELSHI: All right. How are we going to pay for this health-care bill? What are the overall effects on the economy? This is an important question for you.
CNNmoney.com's Poppy Harlow joins us from New York with a breakdown of who's footing the bill. And Mark Zandi from MoodysEconomy.com in West Chester, Pennsylvania, has got the broader picture and the implications for that.
Poppy, let's start with you.
POPPY HARLOW, CNNMONEY.COM: Sure.
VELSHI: Quite simply, who's paying for this thing? It's $940 billion.
HARLOW: It is. We are -- it's going to come from taxes to a number of Americans. This is something you heard Republicans, led by John Boehner, talking about late last night before we saw that final vote, because this is money that we don't currently have. A lot of it is going to come from taxes.
The biggest revenue raiser, Ali, is going to be a higher tax on Medicare for people that are these high earners. They make $200,000 a year for individuals, or couples making $250,000 or more.
Let's give you an example just so you can actually understand what's happening.
VELSHI: Right.
HARLOW: Right now, those high earners currently pay over $3,600 a year, just for Medicare taxes alone. This is going to bring that up $450 to $4,075. So that's an increase.
But Ali, here's another increase. A 3.8 percent new Medicare tax on those people's investment income, like their interest and their dividends. This is the first time we've seen a tax like that.
The majority of people, though, Ali, to be fair, are not considered high earners in this country, so those Medicare taxes are not going to change at all.
Another big thing that is going to pay for this is a tax on what you now know has been called those Cadillac health-care plans. This was in the Senate version. It was watered down in the House version passed last night. This will raise about $32 billion over the next ten years. But this doesn't even kick in until 2018.
So here's an example. This is a tax on insurance companies that offer these really high-priced plans. For individuals, they are plans that are over $10,200 a year for individuals or over $27,500 for families.
The idea, Ali, and it's pretty clear here, if you tax the insurance companies for offering these high-end plans, that's going to incentivize them to offer cheaper plans. The thinking here is that people generally buy more coverage than they need, Ali.
VELSHI: Right.
HARLOW: So those are two big ways, too big taxes that you're going to need to pay for.
VELSHI: So in other words, if you gave them a discount, they'd buy more insurance with it...
HARLOW: Right.
VELSHI: ... as opposed to using that saving. That's an interesting fact. While that tax is on insurance companies, the general belief is that will get passed on to people's...
HARLOW: Passed down, exactly.
VELSHI: Poppy, you break it down very well. Thank you very much.
HARLOW: Yes.
VELSHI: Poppy Harlow, anchor with CNNmoney.com. And CNNmoney.com is full of information about this.
Let's go to Mark Zandi. He's the chief economist with MoodysEconomy.com, joining us from Pennsylvania.
Mark, let's -- let's talk about this for a second. The extra taxes hit what we largely believe is the top 5 percent of earners, or top 5 percent of families. That's always been in the -- in President Obama's sights ever since he was campaigning. He said 95 percent of Americans won't see increases in taxes. The top 5 percent were. So for now he's just keeping his promise.
MARK ZANDI, CHIEF ECONOMIST, MOODYSECONOMY.COM: Yes. That's exactly right. That's where the money is. So if you want to generate revenue, that's where you've got to increase taxes. And the tax increases hit very high-income, high-net-worth households.
VELSHI: But it's quite an increase. I mean, you've got this 3.8 percent increase that will be going in on income that you don't earn from working. I mean, they're taxing dividends and investment income and rental property income and things like that.
Is there some negative effect that comes from taxing people at the highest end of the income scale of our country to pay for something like this?
ZANDI: Sure. There are negative consequences to that. I mean, obviously, it raises the cost of investing. So high-income households may not put as much money into stocks and bonds and other things that ultimately drive the growth in the economy.
But having said that, I mean, I think these increases are small enough that they won't have that large a -- a negative economic impact.
VELSHI: What do you think, Mark, the positive economic impact is on giving people what I might call mobility in their jobs, the fact that people will be able to have health insurance and move around in jobs, even if they've got preexisting conditions? Is that going to hurt the economy? ZANDI: Yes, well -- yes, I think so. That's an intangible, and it's hard for me -- you could ask me how many jobs that would create. I couldn't tell you. But I think that is an important positive, near- term positive.
And that is, you know, if -- if I get covered for preexisting conditions, and I'm not as fearful about leaving my existing job, which I may not like, and I can go to another job where I will be more productive, and that will increase the mobility in the labor force. Which is actually one of the greatest strengths of the American economy, and that's why the American economy pulls out of recessions faster than most others, because people are willing to move. And this will only help that mobility.
VELSHI: Well, Mark, you've really made a name for yourself in sort of looking at proposals from both sides of the aisle and trying to make sense of them. On balance, what do you think of the economics of this health-care plan? What's the long-term effect on the country?
ZANDI: Well, you know, I would have voted for it if I were a congressman. Because we're insuring the uninsured, and I think that's absolutely necessary. And we reasonably paid for it.
The one big down side, the thing that, if I were king for the day, I would have really worked on here, is there's nothing in this legislation that will reduce the long-term growth in health-care costs.
VELSHI: right.
ZANDI: And that's what we need to do to address our long-term fiscal problems. We're never going to get our deficits down in the long run unless we reduce health care costs. And so the bottom line is we're probably going to have to address health-care reform again.
VELSHI: Right. And these were always two issues: coverage of the uninsured and health-care costs. So hopefully, the government sets itself to the health-care cost side of things now.
Mark, good to talk to you, as always. Thank you.
ZANDI: Thank you.
VELSHI: Mark Zandi is the chief economist at MoodysEconomy.com.
All right. Let me give you a check on the top stories we're working on at CNN right now. Four new suspects are under arrest in connection with a house party massacre in Juarez, Mexico, that left 15 people dead. The Mexican military says they now have a total of seven suspects in custody in the January killings. Most of the victims were students with no ties to organized crime.
Tiger Woods has admitted he was living a lie, telling ESPN that he alone is responsible for the sex scandal that's kept him off the links since November. The golfer says he's rededicating himself to Buddhism and meditation as he returns for his return at the Masters tournament next month.
And former presidents Bill Clinton and George W. Bush are traveling to Haiti today. They'll meet with government officials and relief workers. January's magnitude 7 quake killed more than 200,000 people.
All right. When we come back, we are revisiting health care. We're doing it all afternoon, and we're doing it in a way that becomes relevant to you. How will the new reforms affect your access to health care? And will that depend on how much money you make?
Elizabeth Cohen has been right in on this stuff, and she'll be with us in a moment to make sense of it for you. Stay with us.
(COMMERCIAL BREAK)
VELSHI: Listen, we are going to talk about the stuff that matters to you now. We've been talking about the politics of health care for so long. You know, Elizabeth Cohen is here. She's been working on the stuff that, honestly, the truth is, the politics, the reconciliation, the number of people voting, it's been interesting to watch. But this is what people care about: my cost and my access.
ELIZABETH COHEN, CNN CORRESPONDENT: Right. What this means to them, right. Absolutely.
VELSHI: Right. Tell me.
COHEN: So what this really means, this means a lot to people who earn in the 30 to $85,000 range.
VELSHI: OK.
COHEN: That's because that's where the subsidies are going.
VELSHI: OK.
COHEN: So let's take a look at that. We have some examples. This is courtesy of the Kaiser Family Foundation.
If you were a family of four, and this is in today's dollars, you make $30,000, an insurance policy would cost you about $9,435.
VELSHI: This means not through work. This is a private insurance.
COHEN: Of course, yes. That's important to say. If it's through work, that's a whole other thing.
VELSHI: Right. Yes.
COHEN: So, with the subsidies that are part of this bill, you're going to end up paying $954. So that's a huge subsidy you can see right there.
VELSHI: Right. COHEN: And that's for a family of four, where you're making $30,000.
Now, let's change it a bit, so instead this family of four is making $85,000. The insurance policy is going to cost them the same. That doesn't change. But they're going to have to pay...
VELSHI: It's much smaller.
COHEN: It's much smaller. They're going to have to pay about $8,000. So the subsidy is much smaller. But that subsidy is still there. So this whole notion of government subsidies to help buy insurance is -- is different.
VELSHI: Right. And as you get higher up there, you're just -- you're not getting any subsidies.
COHEN: Right. Anything over about $85,000, you're getting very little, if anything.
VELSHI: Right. And over $200,000, you're paying regardless of whether you're buying insurance, because they're taxing you on other things that I just discussed with Mark Zandi.
COHEN: That's right. That's right.
VELSHI: All right. There's cost, and then there's this big question about access. Are you talking about that now, or are you going to come back and talk about that? How -- how does this affect your access to health care?
COHEN: Well, these subsidies affect -- affect your access. Because some of these people couldn't afford it without these subsidies.
VELSHI: Right.
COHEN: So that's important to note.
The second thing that's important to talk about is these community-based health centers.
VELSHI: Right.
COHEN: There's a lot of money in this bill for those.
VELSHI: Yes.
COHEN: So right now, the way it would work is that, with this bill, it would send about $15,000 primary care physicians...
VELSHI: Yes.
COHEN: ... into these areas that don't have them.
VELSHI: Yes -- COHEN: So, that's going to increase access as well.
VELSHI: Have you heard a lot of doctors saying as a result of this, they're going to stop taking Medicare or they're going to stop serving in underserved population because they're going to get served somewhere else?
COHEN: I think they're taking a wait-and-see attitude. Some doctors have sort of slowly said I don't want to deal with Medicaid anymore. I think they do pretty much deal with Medicare. I think they're taking a wait-and-see attitude. But if you've got millions of people on these subsidies, I have a hard time imaging they would say no.
VELSHI: More people in the system.
COHEN: Right.
VELSHI: That should, from my business perspective, make the system more efficient. If you have that many more people that the insurance companies are covering, who are paying premiums, that should help the system. But for people who are working, we've seen over and over in the last several weeks, they're still going to see increases in premiums in the next few years.
COHEN: That's right. If you get insurance through your employer, the Congressional Business Office says, this legislation isn't going to be a huge change for you. But you and I know we've seen premium hikes all the way through. I think that that, according to the CBO, will probably not change.
VELSHI: And one of the things you brought up, and the economists I just talked to, brought up, this bill deals very well with coverage of a lot of people who weren't covered. It hasn't gone all that far yet with respect to costs. So, that why we're seeing those health care costs --
COHEN: Costs are skyrocketing out of control. Everybody agrees on that. And there hasn't been a good plan for what you do about that. Well, what do you do about the doctor who's constantly prescribing MRIs, even when it's not necessary? That's not a hundred percent taken care of.
VELSHI: But if more people are insured, those costs -- Sanjay did a piece on it, you've done it, the remarkable costs that --
COHEN: $100 Tylenol --
VELSHI: Theoretically that should go down, too, right? If more people are covered, the hospital isn't having to subsidize by charging you ten times as much or 20 times as much.
COHEN: Theoretically, if they have people coming in who are paying rather than people not paying, they won't have to charge $100 for Tylenol. But I don't know. If they've gotten away with it for this long, they might continue doing it. I mean, I'd charge $100 for a Tylenol --
VELSHI: If you could get it. Right. If you could get it.
All right, Elizabeth. Thanks very much. What a great conversation. You'll be with us later in the show. We'll stay on this and talk about how this health care bill affects you.
All right. Health care and higher education. In that bill that was passed last night, there was another component, and it was about student loans. It could mean huge changes for the way that college kids and Uncle Sam pay down their debt. When we come back, we're going to talk to Roland about it.
(COMMERCIAL BREAK)
VELSHI: If you're listening to the speeches last night before the health care reform bill passed, you heard Nancy Pelosi talking not just about health care, but about education. Health care and education being an underpinning in how to help the economy recover. And if you didn't know what she was talking about, you may have not realized there was a big student loan component to this bill passed.
Roland, who was involved in the coverage last night, was one of the people who really picked up on this and said let's talk about the student loan part because it's important. Some people criticize it, saying the student loan part was just put into this bill because it will actually have huge savings, so it brings the overall cost of the health care bill down. But you decide that for yourself.
Let's actually talk about what it is. Right now, the government provides about $31 billion in student loans. The private enterprise banks -- private banks, basically -- provide about $67 billion. In many cases, they're guaranteed by the government. But really, you can see the private enterprise gives about twice as many loans as the government does.
Now, the plan according to the bill last night is basically for the government to rub out the middle man, to stop sort of subsidizing or guaranteeing these loans and be the lender directly to people with loans. And in doing that, in cutting out the middle man, what happens when you cut out the middle man? You save money. The bill -- the Congressional Budget Office predicts that this bill will save $61 billion over ten years. $61 billion.
Now, let's talk about how that $61 billion becomes relevant to you. Of the $61 billion in savings over ten years, $36 billion will be redirected into Pell grants. $4 billion will go to historically black colleges. And here's the rub, $19 billion of the savings, one- third of the savings, will go toward deficit reduction and those health care costs.
So basically, more Pell grants, more money for historically black colleges, but it disproportionately brings down the cost of this health care bill, which is why some people say there's a student component in the health care bill. The bottom line is, these are the effects of that bill. The other thing is loan repayments, when it comes time to pay your loan back, loan repayments will be capped at 10 percent of your monthly income. Right now it's 15 percent. There will also be automatic annual increases in the maximum Pell grant amount. As you know, education costs increase faster than inflation does, so they're trying to keep these Pell grants moving up at the same pace of inflation.
Let's bring Roland. Roland, here you go. That was what I was just talking about. There we go. Roland, give me your thoughts on this. You were pretty fired up about it.
ROLAND MARTIN, CNN POLITICAL ANALYST: Well, I've been covering this for the last several months on my TV One show in the morning. Because, you know, it really is an important issue. We saw a couple of weeks ago, protests in 33 states by students angry with the rising costs of tuition. And so one of the problems you've been hearing is, look, because of the credit freeze with these banks, students were not getting the same access to private loans.
VELSHI: Right.
MARTIN: Now, banks were saying, oh, no, it's saving jobs. But you made a point that was critical. And that is, we the taxpayer are subsidizing these loans. Banks are getting upwards of $9 billion a year.
Secondly, if a student defaults, we are still responsible. So the banks, frankly, are a pass-through. So, that's really the difference here, and so the federal government was already providing student loans, anyway. Right now some 2,300 universities are participating in the direct student loan program from the Department of Education, according to the Obama administration, up to 1,000 colleges a few years ago.
So, if you're a high school student, if you're a parent, someone in college, at the end of the day you get more money. But also, we can't leave out the public service component. The president's been saying as opposed to honoring people, saying be a doctor, we'll pay for your education if you work on an Indian reservation or for Native Americans or whatever, what they're saying is, wait a minute. If you commit to public service, we'll cut ten years of your student loans off.
C'mon. We want more teachers. Right.
VELSHI: And that's a big deal. Because we talked about it on many fronts when it comes to government regulators and the financial industry, how do you get people to actually work in the public service when they don't make as much as they do in private industry. So, that's a big deal. If you can come out with less of a student loan burden, it can really, really affect your career choices.
MARTIN: Absolutely. So, we're trying to push people to become excellent teachers. We want them in public service. This is an incentive to actually do so. The debt that students are bearing is tremendous across this country. So, capping that number is vital.
Now, also, Ali, you say why was it in the health care bill? Beyond the fact of the savings cost, you also had the problem because you had Democratic senators, about six of them, who were blocking this. So, from the political standpoint, you put it under the health care bill, we do it all the time - we come to defense bills to get certain things passed. Because they were trying to stop this.
The banks wanted to keep the subsidy. The president was saying, no more money should go to student. And I'm sorry, I agree with the position. That is not a Democratic position or Republican position, or independent. It is about trying to get more money to the students. Win-win.
VELSHI: What's the danger in the government getting involved in businesses that we think sometimes the private enterprise can do better? We're cutting out the banks and the government now the lender to the students.
MARTIN: We were already in this. So, as your graphics show, we're already providing student loans. As a taxpayer, we're already assuming all of the risk. And so, if we're going to assume all of the risk, we might as well assume all of the benefit. And so, that's really what it boils down to.
Also, we saw in the military, there was this whole attitude in the '80s and '90s of privatizing everything, saying, oh, they can do everything better. We saw cost overruns, corruption in government. We see the exact same thing in the private entity. So, I just don't believe that everything can be provided to private enterprise. Let them make they're money. But why give them a $9 billion subsidy when we have all the risk, anyway?
VELSHI: That's a good point. Roland, I'm glad you brought it up. I'm glad you wanted to talk about this. We wanted to discuss it, but it's always great to discuss it with someone who knows it as well as you do.
Roland Martin, as always, our CNN political analyst, joining me live from Chicago.
All right. When we come back, trouble on the tarmac in Britain. Maybe you've heard about this. Maybe it affected one of your flights, maybe it didn't. But hundreds of flights, thousands of travelers disrupted by a cabin cruise strike.
Guess what, another one is on its way. Richard Quest standing by. He is live in London. Nobody knows more about airlines than he does. He'll tell us whether we should be worried about this when we come back.
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VELSHI: Nickelback. This afternoon, they bashed each other for over a year until British Airways cabin crew finally told the airline to stow it. They're wrapping up the first of several planned strikes over BA's plans to save money by cutting salaries, staffing levels and perks. Hundreds of flights canceled over the last few days, making for some very ticked-off travelers.
Richard Quest, my fellow frequent flier, knows exactly what that is like. I don't even want to ask you if your travel was affected by this. But tell us the story. Tell us what we need to know about it.
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Well, this is basically a nasty, bitter and deep strike, between British Airways cabin crew, who believe they've been badly done to by changes that the airlines introduced, and British Airways the airline, which says these changes are necessary because of the deep recession. It has to become more effective. It has to become more efficient. A three-day strike that started on Saturday.
But here's the interesting thing, Ali, BA was determined to beat the strike.
VELSHI: Right.
QUEST: So, what they did is they hired in charter planes, they put passengers on other airlines. And they retrained volunteers to act as cabin crew. Now, BA says they managed to get out about 50 percent to 60 percent of their flights. The unions say it was a lot less than that. That is a straightforward he says/she says argument, which doesn't take us very further. But I can tell you, BA has been flying.
VELSHI: All right. What was the point of these splitting these strikes over weekends, the next one I guess, is going to be over Easter?
QUEST: Yes, I suppose -- no, now, remember, BA nearly had a 12- day strike over Christmas that had the public up in arms. This is going to be just before Easter. The idea is to try and ratchet up the pressure but not necessarily hit people at their worst moment when they're on their Easter break.
It's a strategy. But there's one other thing to remember. BA has told their flight attendants who have gone on strike, they have now lost all their travel perks for life.
VELSHI: Which is a big deal. You've got great travel perks.
QUEST: You get free flights and you get flights 90 percent discount. A lot of cabin crew have lost those permanently.
VELSHI: Let's talk about the other airlines. There are strikes affecting in various forms. Al Italia, TAP (ph), the Portuguese airline, Air France, Luftansa. What's going on?
QUEST: Luftansa -- Iceland maintenance workers are on strike. Luftansa pilots, Al Italian cabin crew and pilots as well.
I think what's happening is, they've seen -- they've gone through the recession, but they still haven't quite accepted the necessity of the change that's taken place. I think that is different. And I'm not taking sides here.
VELSHI: Right.
QUEST: And I'm treading carefully, so neither you or I do take sides here. But if I look at what happened in the U.S. system, a lot of the U.S. airlines either went into Chapter 11 and restructured, so they came into the recession leaner and meaner, or we had Delta- Northwest merging, or they went out of business. Quite a few U.S. carriers simply disappeared.
That has not happened in Europe. They've either been bailed out. They've either kept flying. They've either run up huge losses. And now it's time to pay the price.
VELSHI: Right.
QUEST: And of course, that is simply not being allowed to take place.
VELSHI: Because it's happened here already, we're not likely to see a contagion effect of these labor action that we're seeing in Europe catching in the United States. Do you agree with that?
QUEST: Look, I think if you talk to anybody in the U.S. airlines where they lost their pensions, already taken a pay freeze, may have gone on furlough and come back again, they would say to you, we've done the damage. We've had the pain. But they knew somehow that lemmings go over the cliff, and suicide is not a painless option.
VELSHI: Yes. I hear you. All right, Richard, always a pleasure to see you. Come visit us more often. If you want to visit Richard, "QUEST MEANS BUSINESS" on CNN International.
All right. f you think your Facebook or MySpace page isn't giving too much information away, you may be mistaken. We're going to talk about how your profile could reveal your Social Security number and even much more, even your sexual orientation. When we come back.
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VELSHI: Last week, we talked about this. The Federal Communications Commission released a plan to bring high-speed broadband to a lot more of you.
But with greater speed and access comes greater risk. And one of the major risks is your private information, information as simple as your name and birthplace could put your finances and your identity at risk. And is this why. Internet crime costs have doubled in the last yaer. Check out these numbers. We went from $265 million to $595.7 million in costs incurred from Internet crimes. This is just scary. Last year, two researchers say they were able to predict millions of Social Security numbers based solely on your full name, birthplace and birth date. The Social Security Administration says we shouldn't be worried about the research, but they worried enough to change the way Social Security numbers are actually assigned.
And this just -- this past month, NetFlix dropped a contest to help the company better identify customer preferences. It was a follow-up contest to one that NetFlix did a couple years ago. They posted customer ratings that they said had been stripped of all customer identification. But two researches were able to identify some of the customers simply by linking large databases together.
So, here's the risk. Even if you remove your name, your e-mail address and your birth date from your online profiles, and you have many of them, everything can be tracked online. The friends you keep, the movies you watch, birthday wishes from your family, the vacations you take.
Last year, two M.I.T. researchers did a study sexual orientation study prediction on Facebook based solely on your friends. The two researchers are live with us. We'll talk with them after the break about how they do this and what you need to do to keep your information safe. Stay with us.
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VELSHI: Let's talk more about how your personal information can be used to find out things about you, particularly on a social networking site. Let's bring in the co-author from a M.I.T. study, getting his Ph.D at Stanford right now. And Carter Jurnegean (ph) is from Boston. Same study. He is now a software developer.
OK, guys, you -- used your study. Just let me know if this is clear. You went on Facebook, and basically from people's information on there, figured out their sexual orientation. Is that basically it?
BEHRAM MISTREE, M.I.T. STUDY AUTHOR: Yes, sir. Absolutely. In essence, what we were trying to test is the age-old adage, birds of a feather flock together and have it apply it to the digital age. And is our research showed that based on your friends online, we could infer information about you, whether you disclosed that information about yourself or not.
VELSHI: Carter, is that particularly scientific? Because I guess you could sort of figure it out when you look at things like that or figure out where somebody is from, based on where their largest concentration of friends is, or where they went to college, even if they didn't put that on. Were your findings sort of a mystery to you?
CARTER JERNIGAN, M.I.T. STUDY AUTHOR: Well, I mean, I think what was novel about our research is that we've really shown that this birds-of-a-feather phenomenon applies in online communities, even when people don't publicly disclose information. So, if your profile had basically no information and it was very bare bones, just by seeing who you're associated with, we could still learn certain significant information about you.
VELSHI: Let's take it beyond sexual orientation. Where else could you be vulnerable about people learning things you didn't feel like you wanted to have known on Facebook, for instance?
JERNIGAN: That's a great question --
MISTREE: Go ahead.
There's emerging work that's suggesting that similar information could be found based on -- about political affiliations, religious affiliations, income bracket, those kinds of things. So, there's nothing to suggest that this work is just specific to sexual orientation. In reality, for this type of network data, you could have lots of privacy risks associated across a gamut of different traits.
VELSHI: Carter, if I were gay, I may not want to say that on Facebook, but it may not matter to me if that information was out there. If I live in Atlanta, I may not say I'm from Atlanta, it may not matter that it gets there.
Where do you draw the line as to protect information you don't want out there? Should I be on Facebook if I don't want people to know where I live, where I shop, who my friends are or what my sexual orientation is? Is it just too much information to be able to protect yourself?
JERNIGAN: Right. And it's -- become very difficult to keep all of that information private. And so as part of our research, we were very interested in raising awareness in these sort of surprising risks with online privacy. So as I said, again, a lot of people think oh, well, our research doesn't apply, because, you know, I don't have any information on my own profile.
VELSHI: Right.
JERNIGAN: But again, we were really interested in raising awareness, even if you think you have done the best job you can do to keep information private, that may not be the case.
VELSHI: Behram, there's a quote in your study from Scott Abrams, the creator of Dilbert. I just want to share this with you. It says, "Let's say that someday, technology will allow anyone to find out every possible thing about my life. I can compensate by being so uninteresting to that nobody could survive the process of snooping on me without lapsing into a coma."
Is that really going to be the solution?
MISTREE: Perhaps it is. But just so that you know, even if you're very uninteresting to the average person, you're very interesting to different companies. So, there's a real financial incentive for these -- for lots of large companies to have information about for marketing and other types of purposes. So, whether or not you're very uninteresting to the average person, you're very interesting to, say, an advertiser.
VELSHI: Carter, any conclusions here about how we should behave online?
JERNIGAN: I think, really, being aware of the fact that any actions you take online, you know, can have unintended privacy consequences. And so, again, it's this awareness that we think is really important.
VELSHI: But you're not advocating that people don't put information in, you're just saying they should know what it is.
JURNIGAN: I mean, I think it's going to be up to each person's own decision. I think disconnecting yourself entirely from technology is going to have its own consequences, just as well as connecting yourself with technology has consequences. And so, you know, full disclosure and being fully aware is definitely a very good first step.
VELSHI: Great study, guys. We were chopping off little bits of this technology, privacy issue to try and understand it better. Thanks for helping us. Behran Mistree is one of the co-authors of the study and the other Carter Jernigan, joining me from Boston. Thanks, guys.
MISTREE: Thank you.
VELSHI: All right. When we come back, back to health care for a little while. There are some states fighting back against the health care reform passed last night in the House. Let's see where some state legislators are taking the federal government to court when we come back.
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