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State of the Union

Interview With Kathleen Sebelius; Debate on Health Care Reform

Aired July 12, 2009 - 09:00   ET


WOLF BLITZER, HOST: This is our "State of the Union" for this Sunday, July 12th. I'm Wolf Blitzer in for John King. President Obama wants Congress to deliver a health care reform bill for him to sign this year. But can the United States afford to implement ambitious and expensive changes with an ailing economy? And what role will the government have in any final plan?

In our exclusive Sunday interview, the health secretary, Kathleen Sebelius, outlines the administration's case. Plus, four key U.S. senators weigh in on the health care debate and whether there's a need for another economic stimulus package. Plus, the president in Africa, Anderson Cooper brings us an exclusive interview with the president from a castle that was the center of the African slave trade. It's a remarkable interview with America's first African-American president.

That's all ahead in this hour of "State of the Union."

You're looking at live pictures of the White House. A beautiful Sunday here in the nation's capitol. Up on the other end of Pennsylvania, Capitol Hill, the U.S. Congress, where they're debating health care reform. While President Obama spent the past week overseas tending to global matters, his administration pressed ahead with its effort to revamp the U.S. health care system. The vice president Joe Biden announced a new agreement with the hospital industry to help pay for reforms, but there are still major issues to resolve, including whether to tax health care benefits in order to finance a final reform plan.

Here to outline the Obama administration's view is the Health and Human Services Secretary Kathleen Sebelius. Madame Secretary, thanks very much for joining us.


BLITZER: How are you going to pay for $1 trillion if not more for this health care reform over 10 years? SEBELIUS: Well, President Obama has outlined his preferred payment plans, about $660 billion in savings out of the existing system. So money that's already in the system that's not making us healthier and going to procedures and practices that work very well. And about $330 billion in a proposal that would cap the itemized deductions that the wealthiest Americans take. Return them to the level where they were in President Reagan's days. The Souse and the Senate have slightly different variations, a lot of the same savings and they're looking at different funding... BLITZER: Because the House version that Charlie Rangel, the chairman of the Ways and Means Committee announced on Friday would tax the wealthiest Americans additional tax to help pay for the hundreds of billions of dollars that would still be needed if you make more than $300,000 a year or $400,000 a year, make more than $1 million, you're going to be paying a lot more taxes in the years to come.

SEBELIUS: Well, the House has a version, there are a couple of different proposals being worked on in the Senate.

BLITZER: You like the House version?

SEBELIUS: I think that it's one of the ideas that will be discussed in the long run. I prefer the president's version, I think it makes good sense that, again, the wealthiest Americans pay --

BLITZER: But you're open to the version of increasing taxes on richest -- the richest Americans to pay for health care for everyone else?

SEBELIUS: Well, I think the bottom line is, it's got to be paid for. And we all have a shared responsibility that we all need to play a role. The House and Senate version also have employers included, and individuals included. And what's been remarkable, Wolf, is the stake holders in the early '90s were the most vocal opponents of anything changing in the health care system are really at the table with their own suggestions of how to pay --

BLITZER: Just to be precise, you're open to Charlie Rangel's proposal.

SEBELIUS: Well, I think everything is on the table and discussions are underway.

BLITZER: Are you also open to taxing health care benefits that employers provide their workers?

SEBELIUS: Well I think, again, the president's made it pretty clear from the beginning, certainly during the course of the campaign and since then that that proposal may well dismantle the current employer-based system. He has always suggested that we want to build on the current system, 180 million people have insurance provided by employers. What we don't want to do is discourage employers from offering coverage.

BLITZER: This is what he said back when he was a candidate in September of 2008. I'm going to play this little clip.



PRESIDENT BARACK OBAMA: Everyone in America, everyone, will pay lower taxes than they paid in the 1990s under Bill Clinton at a time when the economy was growing and we produced 22 million new jobs.


BLITZER: All right, so just to be precise, you're rejecting a proposal to tax health care benefits employees get from their employers?

SEBELIUS: Again, Wolf, the House and Senate are busily at work and I think the president continues to reemphasize that he has opposed the notion that we would tax health care benefits, continues to think that is not the best strategy to go forward. If at the end of the day that's the chosen way, I mean, the House clearly doesn't have it in, the health committee doesn't have taxing benefits as part of the proposal. We're waiting to see what Finance comes up with. But he continues to work with the Finance Committee saying this is not the preferred strategy.

BLITZER: Not the preferred, but it's not necessarily completely being ruled out?

SEBELIUS: Well, no lines in the sand at this point. The most important thing is a health care reform bill passed this year, comprehensive reform because we can't afford to pay what we're paying right now. We're paying twice as much as any nation on earth, living sicker, dying younger, and that isn't good for any American.

BLITZER: Will the president accept health care reform that does not include a public option? In other words, public government-run health insurance companies competing with the private health insurance companies?

SEBELIUS: Again, he has said consistently and very strongly a public option is one of the strategies that will help lower costs, provide some competition for private insurers, and make sure that consumers in many parts of the country have a choice. Absent that, you won't have cost competition and you won't have choice.

BLITZER: So be precise, is the president going to reject any -- if the House and Senate says, you know what? We can do this with co- ops, we can do this with other ways, but there's not going to be a public government-run health insurance system, is the president going to accept this?

SEBELIUS: I think you're going to hear from senators in a little while about a variety of strategies to get to a public option. There isn't one size fits all. So he, I think, the president has said we can have -- the issues are competition and choice and how you bring that into the private marketplace. There probably are a variety of strategies, all of which are on the table.

The good news is that Congress is hard at work. We've got Republican senators working day in and day out with Democratic senators trying to figure out how to make sure reform happens this year. And they're working really hard.

BLITZER: When is the president going to say, you know what, enough, the House and the Senate, they have got their own version, I'm going to come up with a Barack Obama version that I want you guys to pass?

SEBELIUS: Well, everybody assumed that I had the 1,000-page plan in my purse as I traveled through the Senate for my pre-confirmation hearings.

What the president understands is that this package of legislation, this very comprehensive bill needs to be a bipartisan approach. It needs to be owned by the House and the Senate with lots of input from the administration. That's exactly what's going on now. Progress is happening day in and day out, people are at the table, Senator Grassley is working hard with Senator Caucus and Senator Conrad and others.

I think we're going to have a bipartisan bill with not only votes from Republicans and Democrats, but lots of ideas from Republicans and Democrats to reform the health care system.

BLITZER: Let's talk about the swine flu. You're getting ready --


BLITZER: You're getting ready, flu season is going to be starting in the fall here in the northern hemisphere. It's going pretty wild right now in the southern hemisphere. Will there be a vaccine that will be ready when the flu season starts in the United States?

SEBELIUS: We are aggressively working on, first of all, testing the virus strains to get a vaccination ready. It needs to be safe so testing and clinical trials will start this month. We'll know a lot more by the end of the summer and it needs to be effective. Will it inoculate folks against the H1N1 virus? Assuming that's the case, by mid-October, we will have a vaccination ready. When exactly the flu season starts, we can't predict, but we will have a vaccination ready by mid-October, assuming we have a safe, effective strain that's been identified.

BLITZER: Because millions of people, potentially, are at risk in the United States.

SEBELIUS: Well, we have about 1 million cases of H1N1 right now.

BLITZER: Around the world?

SEBELIUS: No, in the United States right now. BLITZER: In the United States alone?

SEBELIUS: And 102 countries are seeing presentations of this disease. The good news is that it's not terribly lethal right now. We've had about 170 deaths, that's too many, but we know 36,000 people die every year with seasonal flu. So we're watching southern hemisphere, no vaccine, H1N1 mixing with flu right now. We'll know a lot more as we move toward the fall, but we are preparing to keep Americans safe and secure.

BLITZER: Give us a preview of the announcement you're going to make tomorrow on the vaccine.

SEBELIUS: There'll be another $1 billion worth of orders placed to get the bulk ingredients for an H1N1 vaccination. Congress has agreed with the president that this is the number one priority, keeping Americans safe and secure. So the science is underway, the FDA is working with the scientists at NIH to make sure that we have a safe and effective strain and then we're getting ready to make sure that we have a vaccination program.

We did a major flu summit last week with 500 state and local officials to get -- use the summer months for planning, to make sure that we're ready if a major vaccination program is launched in the fall to get ready to get the shots in folks' arms.

BLITZER: Madame Secretary, thanks very much for coming in, good luck.

SEBELIUS: Thank you, great to see you.

BLITZER: Thank you. President Obama even sees a health care bill, says he wants to see a health care bill on his desk by the end of this year. Lawmakers on Capitol Hill have to agree on what goes into it. Up next, four key U.S. senators break down what needs to be done to reach a bipartisan agreement.

Also, Anderson Cooper's exclusive interview with President Obama in Africa. It's a remarkable interview from the exact location where millions of Africans were sold into slavery. You're going to see it right here on "State of the Union."


BLITZER: Well, we just heard the Obama administration's view of health care reform, now let's turn to four U.S. senators who are playing a key role in crafting a plan. In his home state of New Hampshire, Republican Judd Gregg. And from her home state of Michigan, Democratic Senator Debbie Stabenow. Here with me in Washington, Republican Lamar Alexander of Tennessee, and Democrat Kent Conrad of North Dakota.

Senator Conrad, let me start with you. You just heard Kathleen Sebelius, the secretary of Health and Human Services say the Obama White House is open to this House proposal that Charlie Rangel, the chairman of the Ways and Means Committee has put forward to put additional taxes on the richest American families to pay for health care reform for everybody else who doesn't have it yet. Is that a good idea?

CONRAD: Look, everything does have to be on the table. You can't negotiate properly without that rule in place. But I don't think the House proposal as I've heard it will be what's part of the final package. I think there may be some request from those of us who at the highest levels of income this country to pay a bit more. But there will be a much broader package of revenue as well as spending reductions in order to make this package work. BLITZER: Yeah, are you open to the House version to consider a tax on people making more than let's say $250,000 or $300,000 or $350,000 a year at 1 percent or 2 percent additional tax on their gross income to pay for health care reform?

ALEXANDER: That's a bad idea, Wolf. What is on the table seems to be taxes like that more state taxes to support Medicaid, more cuts in Medicare, more employer taxes. What should be on the table and more government programs. What should be on the table are more proposals like the one Senator Gregg has made or Senator Burr, Senator Coburn. There are 14 of us, Democrats and Republicans, who support the Wyden-Bennett plan, and that would give every American dollars with which to buy their own health insurance and could be done without adding a penny to the debt.

BLITZER: You want to tax benefits, health care benefits that employers provide to their employees as income?

ALEXANDER: I'm willing to stop giving tax deductions to people for Cadillac health insurance plans in order to give everybody a chance to buy their own health care insurance and not add a penny to the debt. I think that would be a good way.

BLITZER: No matter what their income.

ALEXANDER: No matter --

BLITZER: No matter what the income?

ALEXANDER: What it means is if we've got a Cadillac insurance plan and your employer gives you that, then some of it's going to be taxed. That money will be used to make sure we do -- we can't keep adding to the debt in the way we are.

BLITZER: Senator Stabenow, is that OK with you?

STABENOW: Well, Wolf, I think realistically, the one thing that is off the table is taxing employee benefits. I think we'll see some other combination of things. But employees don't determine what insurance companies are going to charge them for their health care for their family. And I think that's pretty much off the table. What's most important --

BLITZER: Senator Alexander says it should be on the table.

STABENOW: Well that may be his view. I respect that. But it is not I believe the majority opinion. But I think what's also very important in this discussion is that over half of the cost of reforming and changing the health care system is going to come with greater efficiencies, it's going to come with changing from quantity of tests to paying for quality, paying for health care not sick care.

BLITZER: But hundreds of billions of dollars, Senator Stabenow, are still going to be required and that money according to President Obama, he wants a deficit neutral plan, doesn't want the taxpayers to be burdened with additional costs. That's going to have to come from somewhere, and that's what I hear you saying is you don't want it to come from taxing health insurance benefits. Let me ask Senator Gregg what he thinks.

STABENOW: That's correct.

GREGG: What do I think about that issue? Well, I think the UAW is calling the shots there, and that's why it's not on the table because they've got some very high-end health policies, and they don't want them to, their union members to have to reduce those health policies.

But I think the bigger issue here is why are we going to increase spending and health care by $1 trillion, $2 trillion, $3 trillion? Most of which we can't afford, add that to the debt or add it the tax burden of the American people. Why don't we approach this horse from the other end? I think we're approaching it from the wrong end.

When you start increasing spending like that and increasing the debt of this country, which is already excessive, why don't we look at trying to control the rate of spending by looking at better quality delivery systems, which are more affordable? We've got a lot of excellent studies that tell us you can deliver a lot better health care at a lot less cost if you give people incentives to go out and buy health care intelligently, if you give the employers capacity to reward people for purchasing health care intelligently and giving up lifestyles which are basically counterproductive such as smoking.

BLITZER: Well, quickly, Senator Gregg, would you support, could you see yourself voting in favor of health care reform legislation that includes this public option, a public government-run insurance company to compete with the private insurance companies like Blue Cross and Blue Shield or United Health Care or some of these others?

GREGG: No because a public option is a slippery slope to a single payer system like Canada or England have, which inevitably leads to putting a bureaucrat between you and your doctor and inevitably leads to delays, it leads to rationing. In England, for example, you have major rationing so that people who get breast cancer in England, they only have a 78 percent survival rate. We have 92 percent. The difference is the fact that we encourage people to go out and get tested.

In England, you've got to go through this regime of being approved for testing and it doesn't work that well. So we do not want to go down the road that basically undermines our fundamental health care delivery by creating a state-run government system in this country and that's what a public plan is, it's a stocking horse for a single payer system.

BLITZER: Because Senator Conrad, you're not convinced that a public option would necessarily pass, that's why you've come up with your own compromise version of co-ops. Having these co-ops that wouldn't necessarily be completely public or private, it would be somewhere in the middle. You think that's passive?

CONRAD: I do. And really just to be clear, the cooperative plan is something that we see across many business lines in the country, very successful. The "Associated Press" is a co-op, we've got Ace Hardware as a co-op, Land O'Lakes, a $9 billion entity is a co-op. The beauty of it is that it does provide competition for insurance companies.

CONRAD: But it is not government-run, government-controlled, it's membership-run, membership-controlled.

BLITZER: Could you support that, Senator Alexander, the cooperatives?

ALEXANDER: Well, it all depends. I mean, Blue Cross could probably fit under his definition of a co-op. The problem with a government-run plan would be something like this. Say the president said let's buy the rest of General Motors to keep the Ford Motor Company honest. And that wouldn't matter unless he gave the government car some advantage.

So he might say, well, all your repairs are going to be at a very low cost, but all of the mechanics might say, we're not going to -- we're not going to work on the government car. That's what you have with a government plan today with Medicaid, 40 percent of the doctors won't serve Medicaid patients because of the low service and it's the only option --

BLITZER: I want to ask Senator Stabenow, I'll rephrase the question for Senator Stabenow. Could you support that does not include a public option?

STABENOW: Well, my first choice and very strong choice is a public option. And I have to say, Wolf, that what my friends are saying, Senator Gregg and Senator Alexander really are scare tactics that have been put forward by folks that don't want to change the system because they make a lot of money off the current system right now.

The reality for families today is if there's an insurance company bureaucrat between you and your doctor telling your doctor what they're allowed to do because of what they'll pay for, telling you what they'll pay for, putting you through all kinds of bureaucracy to try to figure out if you can get care, assuming you're not dropped if you get sick or can't get insurance if you have a pre-existing condition.

So what we're talking about is putting somebody on your side, being able to make sure that the insurance company, the for profit insurance company won't provide you with a low cost insurance policy for your family that you have another choice.

BLITZER: I want to go around --

STABENOW: American choice.

BLITZER: Very quickly, all four of you, if you can give me a yes or no answer, I'm going to play a clip of what the president of the United States said in an exchange with a reporter in Italy on Friday. And I want your answer, listen to this.


UNIDENTIFIED MALE: Is it a pretty much a do or die by the August recess?

OBAMA: I never believe anything is a do or die. But I really want to get it done by the August recess.


BLITZER: Will there be legislation on the president's desk, Senator Gregg, by the August recess?

GREGG: On health care, I think that's highly unlikely since the Finance Committee doesn't even have a bill drafted yet. And we're in the middle of the Sotomayor hearings for this week and then we're going to be debating her nomination for a week before we adjourn for the August recess.

BLITZER: Let me ask the chairman. What do you think?

CONRAD: I think we'll be through the Finance Committee by the August recess and I think that's a realistic goal. You know, there really is plenty of time. Congress is going to be in session until Christmas Eve.

BLITZER: What do you think?

ALEXANDER: No, there's no reason to rush. We need to get it right, not add debt, not have a Washington takeover.

BLITZER: Is the president going to be disappointed, Senator Stabenow?

STABENOW: Well, I think he's going to be very pleased with the progress we're making. I believe we're going to move this through the Finance Committee. We're going to get it done as quickly as possible. The most important thing is to get it right. The American people have waited for a long time.

BLITZER: I want all of you to stand by because we have a lot more to discuss. We're coming back with the senators. We're going to talk about the confirmation hearings that begin tomorrow morning for the U.S. Supreme Court nominee Sonia Sotomayor.

Also, word that the CIA withheld information about a secret counter-terrorism program from Congress on direct orders from then Vice President Dick Cheney.

Plus, we'll bring you Anderson Cooper's exclusive interview with President Obama recorded only hours before the president left Africa. It's a remarkable interview done in the Gulf Coast castle. That was a prison where Africans were held before being sold into slavery. You're going to want to see it and hear it right here on "State of the Union." (COMMERCIAL BREAK)

BLITZER: We're back with four U.S. senators, Republican Judd Gregg and Democrat Debbie Stabenow. And here in Washington, Republican Lamar Alexander and Democrat Kent Conrad.

Senator Alexander, the stories in the "New York Times," we've confirmed it that the former Vice President Dick Cheney over nearly eight years told the CIA on one very sensitive piece of intelligence, and we don't know what that piece of intelligence is, do not share that information with the U.S. House of Representatives or the Senate. Is that appropriate?

ALEXANDER: Well, let's -- we don't know whether it was appropriate. The CIA is in the secrecy business. And what I hear from the Democratic members of Congress is they want the CIA to tell more of them what's going on. The best way to ruin a secrecy business is to tell --

BLITZER: Even if you just tell the leaders, if you tell eight leaders, four in the House and four in the Senate, the majority leader, the minority leader, and the chairman and the ranking member of the two intelligence committees.

ALEXANDER: That is appropriate.

BLITZER: Because that's the tradition, you tell the eight or so- called gang of eight.

ALEXANDER: But what I'm hearing from the Democratic members of the House is tell us all, tell more of us about it. If the eight leaders think what Vice President Cheney did was inappropriate, they should sit down with the new president and the new CIA director and say we'd like to know more. That's the way to fix that problem. I have no way of knowing -- nor do or anybody else.

BLITZER: No because presumably, Senator Conrad, even these eight leaders who traditionally are informed I think of almost everything, they were told by the vice president if you believe this story, don't even tell them about this program.

CONRAD: That's a serious breach. Look, you can't gloss over it. It has nothing to do with what the House is asking going forward. This is a question of whether something was not given the elected leaders of the Congress, which is required by law. That's a serious matter.

BLITZER: If the current vice president, Senator Gregg, told the CIA, you know what, there's a really sensitive program, I don't want you to tell these eight leaders of the House and Senate what's going on, would that be appropriate? GREGG: No. But let's -- there's no question that's not appropriate. But the problem here is different than that in my opinion. This continued attack on the CIA and our intelligence gathering organizations is undermining the morale and capacity of those organizations to gather intelligence. The war we're in today is a war of intelligence. The only way we're going to stop a terrorist of using a weapon of mass destruction on us is to find out who that terrorist is and what they have before they attack us.

GREGG: The only way we're going to get that information is through intelligence gathering.

We have to have an extraordinarily robust and strong CIA, an extraordinarily and robust intelligence gathering organization. And this national attempt by some of our colleagues on the other side of the aisle to basically undermine the capacity to protect and develop intelligence is, I think, going to harm us in the long run.


GREGG: Yes, this is wrong. If somebody told the CIA not to inform the appropriate members of Congress on information they should be informed on, that's wrong, but that isn't -- that isn't reason to disassemble the CIA and make them a whipping child in the middle of the public opinion, which undermines the morality of the whole agency.

BLITZER: Senator Gregg, no one wants dismantle the CIA, at least no one in a serious position. But if the former vice president, Dick Cheney -- and I want to pin you down on this -- if he did tell the CIA, "Don't share this information with the House and the Senate -- if he did say that, would he have been wrong?

GREGG: Yes, if that information was correctly -- it should have been shared. I mean, I don't know what the information was; you don't know what it was. And there are instances, I presume, where something is so sensitive that it can't be released. But as a very practical matter, if it should have been shared, it should have been shared.

BLITZER: Because I went back and looked back at the legislation, at the law, of the 1947 law, Senator Stabenow, and it does leave a loophole there for the executive branch of the U.S. government not to share certain intelligence information with the legislative branch of the U.S. government.

It says that the congressional intelligence committees should be fully and currently informed of all intelligence activities, but it does say this, "to the extent consistent with due regard for the protection from unauthorized disclosure of classified information relating to sensitive intelligence, sources, and methods or other exceptionally sensitive matters."

So, presumably, the former vice president could have determined this was such an exceptionally sensitive matter, it would fall into that loophole. STABENOW: Well, I would be extremely surprised if that was the case, Wolf. I think the person who's been undermining the credibility of the CIA is the former vice president, by his actions, if, in fact, this is true.

This is very, very serious, and I think it goes beyond even the -- to the credibility of the CIA.

And we all want a strong, effective, credible CIA. We have to have that as part of our national security. It's integral to our national security. But this really goes to a larger question that we struggled with throughout the Bush presidency, which is checks and balances. You know, the presidency or even the vice president, who said he wasn't a part of the Senate; he wasn't part of the administration -- I'm not sure where he fell in his mind in the Constitution, but the reality is that there is a reason why there are checks and balances.

We don't have a dictatorship. We have a Congress that is responsible to oversee and to ask questions on behalf of the people. And I think that's what we continually saw challenged...


BLITZER: Go ahead, Senator Gregg.

GREGG: Well, listen, wolf, this is -- this is a big issue, not only from the standpoint of whether -- what the vice president did, but from the issue of the morale and capacity of the CIA to develop information -- and other intelligence-gathering sources.

And I sense -- and I've been here before and you have, too -- that we're heading back into this Frank Church atmosphere in this Senate and in this Congress, where, basically -- where people use the CIA as a whipping boy and, instead of supporting their initiatives in overseas intelligence gathering, they become a symbol of the errors of a prior administration and it becomes taken on at a level that basically leads to legislation or to just hearings that basically fundamentally undermine the atmosphere and the morale of this agency, which is absolutely critical to us right now.

And we saw it happen before. This isn't the first time.

BLITZER: And you may -- and you may have more ammunition, because there's now word that the attorney general, Eric Holder, is thinking of asking for a special council to investigate the CIA's interrogation of certain terror suspects. We're going to get into that...

ALEXANDER: But on that point, if he does that, he needs to go all the way back to 1995 and investigate the Clinton administration renditions, which might have led to -- to interrogations in other countries at a time when he was the deputy attorney general, and ask what laws were broken; did he know about it? What precautions were taken? So that's what happens when we begin to go back in -- we go back to 9/11. Let's go on back and let's ask which congressmen knew about it.


BLITZER: The president has said he doesn't want to go back; he wants to look ahead.

Go ahead, Senator Stabenow.

STABENOW: Well, Wolf, I just want to emphasize, one more time, that this is not about not supporting the CIA or undermining the CIA or trying to to in any way lower morale. This is not about that.

I mean, we are strongly supportive of a professional, credible CIA. We have -- I think they have incredible challenges, as it related to information before going into the war, we have had so many different stories that have come forward about the intervention of the former vice president. We want to change that. We need them to be strong, credible, and supported.

But part of what's happening right now is the continual information coming forward about what kind of pressure they were under under the previous administration.

(UNKNOWN): Wolf, can I...

BLITZER: Very quickly.

(UNKNOWN): ... just make this point?

Look, I've had close relatives in the CIA. I've got profound respect for what they do. Senator Gregg is entirely correct. We absolutely are in a war of intelligence. It's critically important we're the best at it.

But this story in the New York Times has nothing to do with an attack on the CIA. This is a question of whether the former vice president of the United States denied certain sensitive information to the intelligence leaders in Congress. That is not acceptable.

BLITZER: Well, I'm sure there's going to be a lot more on this coming up, but I want to thank all four of the senators for joining us here on "State of the Union." Thanks so much.


BLITZER: Thank you.

And President Obama is back home from an overseas trip, including a visit to Ghana. CNN's Anderson Cooper was in the African nation and spoke with the president. We're going to bring you some of Anderson's exclusive interview. That's ahead on "State of the Union."

(COMMERCIAL BREAK) BLITZER: I'm Wolf Blitzer, and this is "State of the Union." Here are stories breaking this Sunday morning.

A source confirms to CNN the CIA withheld information about a secret counterterrorism program from Congress on direct orders from the then-vice president, Dick Cheney. The source says the CIA director, Leon Panetta, has informed lawmakers about Cheney's role and has stopped the program.

Efforts to contact the former vice president for reaction so far have been unsuccessful.

BLITZER: Confirmation hearings for the Supreme Court nominee Sonia Sotomayor kick off tomorrow morning. Democratic senators say they'll push back against Republican opponents who paint her as an activist judge. If confirmed, Sotomayor would become the first Latina on the high court. You can catch all of the action right here on CNN. Our coverage begins tomorrow morning, 10:00 a.m. Eastern.

And you're looking at a live picture of the space shuttle Endeavor. NASA will try to launch the shuttle again tonight, but only if the shuttle's electrical system checks out and the weather cooperates. Last night's launch was scrubbed after several lightning strikes near the launch pad. If the mission gets the thumbs up, liftoff is set for 7:13 p.m. Eastern later tonight. That and much more ahead on "State of the Union."

After a week of international travel, President Obama and his family arrived back at the White House just after midnight. Before he left his final stop in Ghana, he sat down with Anderson Cooper for an exclusive interview. You can see, by the way, the full interview tomorrow Monday night on "A.C. 360." But here are some of the highlights. The number one topic, as it was for most of us, the U.S economy.


ANDERSON COOPER, CNN ANCHOR: Vice President Biden said that you've misread the economy. You said no, no, no, we had incomplete information, and nevertheless you said that you would not have done anything differently. Wow, that seems contradictory. How can you say that if you had known unemployment would go to 9.5 percent, wouldn't you have asked for more money in the stimulus?

OBAMA: No, it's not contradictory. Keep in mind that we got an $800 billion stimulus package, by far the largest stimulus package ever approved by a United States Congress.

And the stimulus package is working exactly as we had anticipated. We gave out tax cuts early so that consumers could start spending or at least pay down debts so they could at a later date start spending. We put in $144 billion to states so that they wouldn't have to cut teachers and police officers and, you know, other social services that are vital, particularly at a time of recession. And we always anticipated that a big chunk of that money then would be spent not only in the second half of the year, but also next year. This was designed to be a two-year plan and not a six-month plan. Now, it may turn out that the enormous loss of wealth, the depth of the recession that's occurred requires us to reevaluate and see what else we can do in combination with the --

COOPER: A second stimulus?

OBAMA: Well, there are a whole range of things, Anderson, that we've done. The banks have stabilized much more quickly than we had anticipated. They're not all the way to where we'd like them to, but we've seen significant progress.

COOPER: Do you still see glimmers of hope?

OBAMA: If you look at both the financial sectors, the ability of the businesses to get loans, the drop off of volatility that's taken place, the general trajectory is in the right direction.


BLITZER: Anderson also asked the president about a story that broke last week, a possible war crime committed by an ally of the United States during the 2001 war in Afghanistan.


COOPER: It now seems clear that the Bush administration resisted efforts to pursue investigations of an Afghan war lord who was on the CIA payroll. It's now come out they were hundreds of Taliban prisoners under his care who got killed. Some were suffocated in a steel container. Others were shot, possibly buried in mass graves. Would you support, would you call for an investigation into possible war crimes in Afghanistan?

OBAMA: The indications that this had not been properly investigated just recently was brought to my attention. So what I've asked my national security team to do is to collect the facts for me that are known and we'll probably make a decision in terms of how to approach it once we have all of the facts gathered up.

COOPER: But you wouldn't resist categorically an investigation?

OBAMA: I think that, you know, there are responsibilities that all nations have, even in war. And if it appears that our conduct in some way supported violations of laws of war, then I think that, you know, we have to know about that.


BLITZER: Finally the president spoke of how he was personally and deeply affected by the tour he took with his family visiting the Cape Coast castle of prison where enslaved Africans were held before being sold and shipped overseas. Anderson spoke to the president during that tour.

(BEGIN VIDEOTAPE) COOPER: You think what happened here still has resonance in America? That the slave experience still is something that should be talked about and should be remembered and should be present in every day life?

OBAMA: Well, you know, I think that the experience of slavery is like the experience of the Holocaust. I think it's one of those things you don't forget about. I think it's important that the way we think about it and the way it's taught is not one in which there's simply a victim and a victimizer. And that's the end of the story. I think the way it has to be thought about, the reason it's relevant is because whether it's what's happening in Darfur or what's happening in the Congo or what's happening in too many places around the world, you know, the capacity for cruelty still exists.


BLITZER: And don't forget, you can see Anderson's interview with the president tomorrow night, 10:00 p.m. Eastern only here on CNN. Also be sure to catch a special "AC 360" presentation, President Obama's African journey. That will air Friday night 10:00 p.m. Eastern.

Up next, the challenges that come with rural health care. The nearest hospital is miles and miles away And many stay away from getting even the most basic care because they can't afford it. Much more "State of the Union" right after this.


BLITZER: Welcome back to STATE OF THE UNION. I'm Wolf Blitzer, sitting in for John King. Every week John likes to get outside of Washington and speak with you about the issues being debated right here in Washington. In John's American dispatch this week, an up- close look at how many in rural America worry their unique concerns and challenges might not fit with Washington's debate over accessible and affordable health care.


JOHN KING, CNN ANCHOR (voice-over): Clay, West Virginia, is tucked into the remote, rolling hills of coal country. The nearest hospital is 50 miles away on these winding, rural roads. With the poverty rate approaching 30 percent, many here could barely afford the drive, yet alone the care, like Carl and Elizabeth Walls.

CARL WALLS, CLAY, WEST VIRGINIA: If life and death depended on money, I'd just have to die.

ELIZABETH WALLS, CLAY, WEST VIRGINIA: You would be dead right now.

C. WALLS: I'd have been dead right now.

KING: Carl had a massive heart attack a little more than a month ago. First, a long ambulance ride and blood thinners at a rural hospital, then an emergency Medevac to Charleston.

C. WALLS: (INAUDIBLE) with dignity with every (INAUDIBLE) that you could ask. And in spite of me not having any money, I'm treated as if I were a king, you know?

KING: Most of their life savings went to paying for back surgery and other health issues Elizabeth had a few years back. She has diabetes and is legally blind.

(on camera): Why won't you go to the doctor?

E. WALLS: Because I can't pay for him. And I -- you know, I could go and I get bills and I can't pay those bills, so.

C. WALLS: We have got thousands and thousands of dollars worth of bills come in and what can you do about them?

KING: But so you'd rather not go to the doctor than to have a bill come that you can't pay?

E. WALLS: Right.

UNIDENTIFIED FEMALE: Did you get in touch with her regarding that repeat on the mammo?

KING (voice-over): It is the dilemma Dr. Sarah Chouinard faces every day, trying to convince the uninsured not to wait for the heart attack, cancer diagnosis, or some other major problem to seek medical care.

DR. SARAH CHOUINARD, CLAY PRIMARY HEALTH CARE CENTER: We offer sliding fee payment scales. If they're at 100 percent federal poverty level or worse, then they owe us $5 only and the rest of their care is waived. Thirty-five percent of our patients are uninsured and so we have to come up ways to deliver health care at low cost and try to figure out what to do with their health care once they are outside of these walls.

KING: The urgent focus here is preventive care because it's the right medical approach and because Dr. Chouinard and her colleagues know many of their poor and uninsured patients will ignore suggestions to see expensive specialists.

CHOUINARD: We see a large portion of diabetics, hypertensive and hypercholesterolemic (ph) patients. Our hope is that we keep people away from needing expensive health care services. So our role in a rural setting is key. The question is, how do we keep paying for it? How do we keep giving discounted care? How do we afford to keep the doors open?

KING: A big chunk of the clinic's budget comes from federal grants. And Dr. Chouinard says she hasn't heard much talks during the reform debate in Washington about how to protect places like this in small town America.

CHOUINARD: It will be interesting to see what happens if they come up with universal coverage, what will our role as a federally- qualified health center be? How is our role defined after that? I worry that we have patients here who will maybe not fall into some category and somehow slip through the cracks.

KING: Carl and Elizabeth Walls share that concern. They sold two small businesses, watched the money go to health care bill, and now have thousands of dollars more because of Carl's heart attack.

E. WALLS: You know, we have worked all of our life and tried and we can't seem to get any programs that work for us.

KING: It's not that the Walls or Dr. Chouinard oppose the idea of universal coverage, to the contrary, it's just the sense that when there is talk of big change, people like them and places like this so often get left behind.


BLITZER: John King reporting for us.

We want to say good-bye to our international audience for this hour, but, up next for our viewers here in the United States, Howard Kurtz breaks down Sarah Palin's love/hate relationship with the news media.

Plus, joining us at 11:00 a.m. Eastern, one hour from now, James Carville and Mary Matalin together right here on STATE OF THE UNION.


BLITZER: I'm Wolf Blitzer and this is our STATE OF THE UNION for this Sunday, July 12th. John King is off today.

Stories about Michael Jackson are certain to dominate the news for weeks to come. Allegations of drug use, the future of his children, legal battles over his estate. But last week were all the negative stories washed away in a wave of positive media? Howie Kurtz says the coverage was out of control and, straight ahead in our "RELIABLE SOURCES" hour, he'll argue that one with a panel of veteran journalists. Stand by.

Plus, a fictionalized retelling of his battle with former President Richard Nixon 32 years ago is now a hit movie, but this legendary journalist isn't resting on his laurels. Howie sits down with Sir David Frost to talk about his past and current job with the Arab-based news channel Al-Jazeera English.

And at the top of the hour, stand by for fireworks. Republican strategist Mary Matalin and Democratic strategist James Carville, they will both be here in our studio. It's a face-off you'll see right here on STATE OF THE UNION.

First, let's go Howard Kurtz and "RELIABLE SOURCES."