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updated 3/3/2010 3:30:05 PM ET 2010-03-03T20:30:05

MR. DAVID GREGORY:  This Sunday:  the healthcare divide.

(Videotape)

SEN. LAMAR ALEXANDER (R-TN):  We ought to start over.

(End videotape)

(Videotape)

SEN. MAX BAUCUS (D-MT):  We are actually quite close.

(End videotape)

MR. GREGORY:  Is there room for compromise or will the made-for-TV summit result in stalemate?

(Videotape)

PRES. BARACK OBAMA:  We're not campaigning anymore.  The election's over.

SEN. JOHN McCAIN (R-AZ):  I, I, I--I'm reminded of that every day.

PRES. OBAMA:  The--oh--well, I...

(End videotape)

MR. GREGORY:  We'll ask our exclusive guests this morning, Arizona senator, Republican John McCain, and then White House healthcare czar, Nancy-Ann DeParle.

Plus, the politics of reform.  As the president makes one final push, what does the public really want from Washington?  And will success or failure on health care tip the scales in the 2010 midterm race?  Insights and analysis from our roundtable, three political insiders, House Republican whip, Congressman Eric Cantor of Virginia; president and CEO of the National Urban League Marc Morial; and House Democratic chief deputy whip Congresswoman Debbie Wasserman Schultz of Florida.  Plus, two Washington journalists, the National Journal's Ron Brownstein and "BBC World News America"'s Katty Kay.

MR. DAVID GREGORY:  But first, Senator John McCain, welcome back to MEET
THE PRESS.

SEN. McCAIN:  Thanks for having me back, David.

MR. GREGORY:  The healthcare summit on TV, much anticipated, it happened, many hours worth.  What's changed?

SEN. McCAIN:  Well, I think the American people are much better informed, and I think it was a good thing because I think there was an in-depth discussion with a lot of--about a lot of issues, and I'm glad that it happened.  And it gave--I think a lot of Americans watched.  I'm not sure not all seven hours, but I think that it was a good forum.  I think that the American people learned something.  And I hope that it could be the basis for us to have some serious negotiations.  But we still have the fundamental problem:  Do we go on the partisan plan that was rammed through the Senate and the House or do we start over from the beginning?  And we obviously--the--apparently the president may be intent, along with the speaker and the majority leader, to go the 51-vote route, which I'm sure we'll get into in our conversation.

MR. GREGORY:  And, and that's called budget reconciliation where they could pass it with a simple majority.  How would you react if, indeed, that's what will happen?

SEN. McCAIN:  Throughout history, recent history anyway, the majority has always been frustrated by the 40-vote or the 60-vote threshold in the United States Senate.  And when Republicans are in the majority, they're frustrated by the Democrats and vice versa.  I did object strongly when, during the Bush administration, when we couldn't get any judges confirmed that there was the advocacy of the "nuclear option." I objected to that because I believed, as Robert Byrd does, that, that we should not be addressing these issues through 51 votes.

MR. GREGORY:  But, Senator, you have voted for bills through reconciliation nine times since 1989.

SEN. McCAIN:  Yes.  Yes, I have voted for them, but I objected strenuously to us changing the rules so the Senate--so that 51 votes would prevail.  And let me also say that Robert Byrd also in the '70s exempted Social Security. Social Security cannot be considered in reconciliation.  We should do the same thing with Medicare.  Lindsey Graham and I will be introducing legislation. Entitlements should not be part of a reconciliation process, i.e., 51 votes. It's too important.

MR. GREGORY:  You...

SEN. McCAIN:  One-sixth of our gross national product.

MR. GREGORY:  You were critical of how this bill came to be.

SEN. McCAIN:  Yes.

MR. GREGORY:  Some of the deals that were made.  You talked about that during your--the speech during this summit.  And you had this notable exchange that we played a portion of during the open to the program.  Let me show it to you.

SEN. McCAIN:  Mm-hmm.

(Videotape)

PRES. OBAMA:  Let me just make this point, John, because we're not campaigning anymore.  The election's over.

SEN. McCAIN:  I, I, I--I'm reminded of that every day.

PRES. OBAMA:  The--oh--well, I...

(End videotape)

MR. GREGORY:  What was your reaction to that moment?

SEN. McCAIN:  Well, look, the president said that the, the campaign is over. What I was saying to the president is that you--the mistake that has been made is assuming that with 60 votes in the Senate and overwhelming majority in the House, you can move legislation through which has to be bipartisan in nature. It has to be.  Every major reform has had bipartisan support.  And so what they ended up with is, in order to buy votes, they did these unsavory deals. They are unsavory.  To say that 800,000 people in Florida will be carved out from any reduction in a
Medicare Advantage program--330,000 of my citizens in Arizona are Medicare Advantage enrollees.  To, to say that you're going to put $100 million in for a hospital in Connecticut?  Look, these are unsavory deals.  They were done behind closed doors, and it has been--look, I'd have town hall meetings all over the place in my state of Arizona. People object to the process as much as they do to the product.

MR. GREGORY:  But, you know, Senator, the president...

SEN. McCAIN:  And policy cannot be made through an unsavory vote-buying process.

MR. GREGORY:  But the president has said that there were negotiations with Republicans.  For months ground was lost through a negotiation on the Finance Committee with Republicans that didn't come to pass.  And you say this is not a bipartisan bill, and yet Ron Brownstein, who will be on the program, the columnist makes clear in a column on Friday, this has all the similarities of the Dole proposal in 1993 to Romney's proposal...

SEN. McCAIN:  Mm-hmm.

MR. GREGORY:  ...that was passed for healthcare reform in Massachusetts. How is this a partisan bill?

SEN. McCAIN:  I have been part of bipartisan negotiations for many, many years, and I have a record of bipartisan results.  This was not bipartisan. The way you have bipartisan negotiations, you sit down across the table, as we did with Ted Kennedy, as I've done with many other members, and you say, "OK, here's what I want, here's what you want. We'll adhere to your principles, but we'll make concessions." This bill was written by Democrats, for Democrats, and then they tried--and I understand power--what they tried to do was peel off a couple of Republicans, as he did with the stimulus bill, and call it bipartisan. It's not bipartisan.  I know bipartisanship, and with all due respect to any of our other observer, let's start over, then.  It's not too late.

MR. GREGORY:  Is there one thing...

SEN. McCAIN:  It's not too late.  Why don't we sit down together and say, "OK, let's start with medical malpractice reform"?  We agree, I think, fundamentally on that.  Why don't we address going across state lines? Why don't we go across many of the positive proposals that we Republicans have had, too, and maybe we can find common ground?

MR. GREGORY:  Final point on health care.

SEN. McCAIN:  Sure

MR. GREGORY:  The politics of this is something that will be much discussed in this election year.

SEN. McCAIN:  Yes.

MR. GREGORY:  Whether success or failure, hurts or helps, Democrats and Republicans for the midterm race.  Well, we've been here before, back in 1994 when President Clinton tried this.  And you've been here before talking about this very issue.  Back in 1994, Tim Russert asked you about the political implications.  I want to play that for you.

(Videotape, July 10, 1994)

MR. TIM RUSSERT:  Politically, is it better for the Republicans in the congressional elections to have healthcare reform bill or not to have that bill?

SEN. McCAIN:  If the Republicans can convince the American people they are doing it to prevent something like the catastrophic health insurance bill of the late '80s, then yes.  But if we are viewed, as the Democrats will attempt to portray us, as just obstructing people from getting the health which they need, then we do so at great risk.

(End videotape)

MR. GREGORY:  So same question now.

SEN. McCAIN:  I was certainly better-looking in those days.  Let...

MR. GREGORY:  Same question now:  Better for Republicans to have a bill or have no bill?

SEN. McCAIN:  I don't know, but I know what's happened with American public opinion, and that is also--seems to be missing in the, the calculations of the president and the Democrats.  Overwhelmingly, the American people, depending on which poll you look at, but overwhelmingly,
American people are saying stop and start over.  We realize you can't do nothing.  That, that's just a straw man.  We know that Medicare's going broke in seven years, but we need to start over.  That's what the American people want us to do.  And, again, I get back--they don't like
these cynical deals.  They are cynical about us.  They don't trust us. When you have these deals, these unsavory deals, to the pharmaceutical companies.  David, how can we say to the pharmaceutical companies, "We'll let you have breaks such as not competing for Medicare pay--enrollees, such as banning the import--reimportation of drugs from Canada in return for which you'll run $100 million or such touting the administration's healthcare reform plan"? That's not right.  Americans see through it.

MR. GREGORY:  More on the politics of 2010.

SEN. McCAIN:  All right.

MR. GREGORY:  You are in a, a primary battle for re-election against former Republican Congressman J.D. Hayworth of Arizona.  And on the issue of health care, this is what he says on his Web site, on the issues, "Nowhere is the Obama administration's socialist agenda more evident than  in their attempts to grab control over 17 percent of our nation's economy." Socialist agenda, do you think that goes too far?

SEN. McCAIN:  Look, you'll have to have Mr. Hayworth on to explain the things he says.

MR. GREGORY:  All right.

SEN. McCAIN:  I'm, I'm not ready to do that.

MR. GREGORY:  Do you think that goes too far?

SEN. McCAIN:  Oh, well...

MR. GREGORY:  That this is a socialist agenda from the president?

SEN. McCAIN:  Look, look, there is no doubt in my mind America's a right-of-center nation and this administration is governing from the left. That's why the president's approval rating's continued to, to decline.  And I know you want to get off health care, and I will.  But I want to say again--and Eric Cantor who's coming on later will affirm this--we want to sit down and have negotiations, and we have a positive agenda, and we would love to see that agenda...

MR. GREGORY:  But--OK, but...

SEN. McCAIN:  Yes.

MR. GREGORY:  ...my question is do you think that kind of--because you've heard that description before, not just from J.D. Hayworth but others. Does it go too far to say the president's agenda is a socialist agenda?

SEN. McCAIN:  I, I think I gave my description.  I think they're governing from the left on a broad variety of issues, but I'll let others speak for themselves.  I, I have enough time taking care of my own misstatements.

MR. GREGORY:  Well, let's talk about, you--you've been criticized by some who say because you're in a primary battle that you've changed a little bit, that you've taken more conservative positions.  And they go through some particular issues.  Let me bring up a couple.  One has to do with the...

SEN. McCAIN:  Good.

MR. GREGORY:  ...issue of "don't ask, don't tell," the prohibition against gays to serve in the military.  Back in 2006...

SEN. McCAIN:  Mm-hmm.

MR. GREGORY:  ...on MSNBC, this is what you said about your view.  "The day that the leadership of the military comes to me and says Senator, we ought to change the policy, then I think we ought to consider seriously changing it because those leaders in the military are the ones we give the responsibility to." Chairman of the Joint Chiefs Mike Mullen testified earlier this month, this is what he said:

(Videotape, February 2, 2010)

ADM. MIKE MULLEN:  It is my personal belief that allowing gays and lesbians to serve openly would be the right thing to do.

(End videotape)

MR. GREGORY:  And the head of CENTCOM, General David Petraeus, who was on
MEET THE PRESS just this past Sunday, said this.

(Videotape, Last Sunday)

MR. GREGORY:  Do you think soldiers on the ground in the field care one way or the other if their comrade in arms are gay or lesbian?

GEN. DAVID PETRAEUS:  I'm not sure that they do.

(End videotape)

MR. GREGORY:  Why doesn't that meet your standard of 2006 for you to say, "OK, it's time to change views"?

SEN. McCAIN:  Because, as I said back then, that we need to have a careful examination, and Admiral Mullen was, as quote, "speaking personally." Just this week, commandant of the Marine Corps said that he did not want "don't ask, don't tell" repealed.  There are many in the military who do not want to. We are going to go through, hopefully, a yearlong study that will hopefully also have the feelings of the men and women who are serving.  But, David, what--also the chief of staff of the Air Force and the chief of staff of the Army pointed out we're in two
wars.  We have the highest trained, most professional, best military in history.  We have the highest retention, highest recruitment in history. And they're all saying, "Wait a minute. Before we change this, let's make sure we go through a careful examination, ranging from what you heard Admiral Mullen say, his "personal opinion," to what the commandant of the Marine Corps said, he doesn't want it changed.  So it's clear that we need to do be very careful as to how we move forward on whether we change this policy or not.

MR. GREGORY:  But if the result of that study is that we should move beyond it...

SEN. McCAIN:  I believe that it's working.

MR. GREGORY:  ...you would, you would side with that?

SEN. McCAIN:  If the result of that study is, is one that I can trust and believe in and is supported by our military leaders, obviously, I would have that--give that the most serious consideration.

MR. GREGORY:  One question about the bailout, the TARP.

SEN. McCAIN:  Oh, yeah.

MR. GREGORY:  You voted for it, but you've said that you were misled by former Treasury Secretary Paulson.  How so?

SEN. McCAIN:  We were all misled.  We were all misled.  I mean, he said that they were going after the toxic assets.  The toxic asset--his word--was the housing market.  He testified to that.  I mean, we were all misled.  So what did he do then?  They started pumping money into the financial institutions. Now the financial institutions are fine.  Wall Street's doing great.  Main Street is in deep trouble.  In my home state of Arizona, 48 percent of the homes are under water.  In other words, they're worth less than the mortgage payments people are making.  The...

MR. GREGORY:  But he says without TARP, you'd have 25 percent unemployment. You would have had that.

SEN. McCAIN:  He can--he said that, that they would be going after the toxic assets, which were the housing market.  And that's what his testimony was, that's what he pledged to do, and--to the American people and to the Congress. And they turned around--I mean, it's a matter of record, it's been reported in all the media.  They turned around and switched from trying to address the housing market to bailing out the financial institutions on Wall Street.  Who ever thought that we would, when we passed that, we would own General Motors and Chrysler, GMAC?  I mean, it's, it's, it's beyond what anyone had anticipated.

MR. GREGORY:  Final moment on foreign policy...

SEN. McCAIN:  Yeah.

MR. GREGORY:  ...and I'll conflate Iraq and Afghanistan in one question. Here's the cover of Newsweek magazine this week.  "Victory At Last:  The Emergence of a Democratic Iraq." And as you follow the offensive that's taking place in southern Afghanistan to make strides toward shoring up the government in Afghanistan, do you think success along the lines of Iraq, if you believe it's a success...

SEN. McCAIN:  Mm-hmm.

MR. GREGORY:  ...is possible in Afghanistan?

SEN. McCAIN:  Oh, of course.  In fact, the Afghans do not want the Taliban back.  When the surge started in Iraq, things were in total chaos.  It--I think we have significant advantages in Afghanistan.  But, look, Iraq is not over.  I have--I appreciate that cover, but it's two steps forward and one step back.  These elections coming up are very important.  In Afghanistan, it's two steps forward and one step back. It's a long, hard process and...

MR. GREGORY:  Can it be achieved in that 18-month time frame that the administration has put forward in Afghanistan.

SEN. McCAIN:  Well, the thing that worries me the most is the president's statement about leaving in the middle of 2011.  I would appreciate it if the president told these, all the way down to Afghan tribal leaders who have questioned me about it, to say we're going to do what's necessary to succeed, period.  I would love to see that.  That's of great concern. They have to stay in the neighborhood.  And if we leave, they have to adjust.  But I am--I have great confidence in our leadership and the men and the women who are serving.  I have never been more proud.

MR. GREGORY:  We will leave it there.  Senator McCain, thank you, as always.

SEN. McCAIN:  Thank you for having me on, David.

MR. GREGORY:  Appreciate it.

Up next, the president's blueprint for healthcare reform.  What will we see in a final bill and how does the plan get there?  We'll speak with his healthcare czar, Nancy-Ann DeParle.  Plus, our roundtable weighs in on the politics of reform and the 2010 landscape, only here on MEET THE
PRESS.

(Announcements)

MR. GREGORY:  The view from the White House with healthcare czar Nancy-Ann DeParle on the president's plan for reform, after this brief commercial break.

(Announcements)

MR. DAVID GREGORY:  We're back, joined now by White House healthcare czar Nancy-Ann DeParle.

Welcome to MEET THE PRESS.

MS. NANCY-ANN DePARLE:  Thank you.

MR. GREGORY:  This week during the healthcare summit The New York Times described it as a "hail Mary pass, a last ditch effort for the president to keep his top legislative priority from slipping out of his grasp." As you sit here today, do you have the votes to get this passed in Congress?

MS. DePARLE:  Well, David, what the president wanted to do is bring everybody together again, as he has before during this process, to really have an open and honest discussion about what's at stake here for the American people. What with people loving their coverage, with premiums sky rocketing, you know, how do we deal with these problems?  And I think
we achieved that this week. And...

MR. GREGORY:  Do you have the votes, though, in Congress to pass it?

MS. DePARLE:  What he wants to do, David, is to make sure that he's fighting for American families and businesses by doing something about this problem, to reduce their costs, to make it more accessible, to give them the kind of options and choices and protections that members of
Congress have.  And I believe...

MR. GREGORY:  OK.  But, but, but my question is, do you have the votes?

MS. DePARLE:  I believe that we will have the votes to pass this in
Congress.

MR. GREGORY:  OK.

MS. DePARLE:  I believe that the president will keeping fighting and that the American people want to have this kind of health reform.

MR. GREGORY:  But you don't have the votes yet?

MS. DePARLE:  Well, look, the president will have more to say about that later this week, and he's working with the Congress on how best to address that.

MR. GREGORY:  Has he made a decision, especially given the results of this summit, that you've got to move forward with reconciliation, just go for a simple majority and, you know, losing the opportunity to try to bring some Republicans along?

MS. DePARLE:  Well, look, he's going to have more to say later this week about how he thinks is the best way to move forward.  But I think what it's important to remember here is that we have some fundamental problems with our insurance markets.  We have insurance companies sending out premium increases of 39 percent out in California.  These are problems that need to be fixed, and the president hears every day from Americans who are hurting because of that.

MR. GREGORY:  Right.  OK.  But fixing those problems, you have to get through procedure to get there, and I've been told by several people the decision has been made.  It's reconciliation, go for the simple majority, or else the reforms you're talking about simple won't be possible.

MS. DePARLE:  Well, I don't know about that, but I do know this, that healthcare reform has already passed both the House and the Senate with not only a majority in the Senate but a super majority, and we're not talking about changing any rules here.  All the president is talking
about is, do we need to address this problem and, and does it make sense to have a simple up or down vote on whether or not we want to fix these problems?

MR. GREGORY:  A lot of talk at the summit about where public opinion is. And, and here's one poll from CNN/Opinion Research about how Congress should proceed, a similar bill, a new bill, or stop working on the bill. Nearly three-quarters of the public saying either start over or stop
working.  I wonder if you respond to Senator McCain who says the "unsavory deals," in his words, that were made by this administration with pharmaceutical companies, the insurance companies, really hurt the president's effort overall?

MS. DePARLE:  Well, first of all, I'm not sure what he's talking about with deals with insurance companies.  If you've watched your network or any others, you've seen a lot of the ads they're running to try to stop reform.  And I think we know why.  I think we know that right now insurance companies are making the rules and that's part of what the president's...

MR. GREGORY:  Right.

MS. DePARLE:  ...trying to change.  So...

MR. GREGORY:  But they did agree to more regulation and to allow people with previous, you know, prior conditions, because they'd get access to a wider of market of people who would be insured.

MS. DePARLE:  I don't know that they agreed to anything.

MR. GREGORY:  There was a deal with pharmaceutical companies.

MS. DePARLE:  I think...

MR. GREGORY:  There was a deal with the senator from Nebraska...

MS. DePARLE:  Well...

MR. GREGORY:  ...and deals for Louisiana and Florida's both with regard to Medicaid.

MS. DePARLE:  And let's, let's, let's talk about that.  The, the Medicaid provisions in the president's proposal that he put out last week are not the same ones.  And, in fact, all states are treated the same with respect to Medicaid.  But the more important question, David, is are we going to move forward here or just start over?  What is that really code for?

Is that, is that just code for let's not do anything?  And I don't think that's what the American people want.  That's not the people that I'm hearing from every day.

MR. GREGORY:  But where's the evidence--the, the president has said that Americans don't want to wait.  But you see the poll that I just showed, and I'm asking where, where's the evidence that Americans don't want to wait, that they really want to move forward?  The only protests you've seen publicly are on the right in opposition to the bill.  Is it a problem of apathy among those who support it or is it not really there?

MS. DePARLE:  No.  I think it's a problem partly of who has the power in this whole equation, and I think that's part of the president's fighting for is that, right now, the people that he hears from every day--I get notes from him about people that he's hearing from when he's there out talking to them and the letters he gets--who can't get insurance coverage because their child has a pre-existing condition.  They have asthma, they can't change jobs, their premiums are skyrocketing.  So I leave the polls to others.  What the problem he's asked me to work on is to try to get the best, most effective way we can to help Americans who are dealing with these problems.

MR. GREGORY:  Right.

MS. DePARLE:  The small business people who...

MR. GREGORY:  But you can't...

MS. DePARLE:  ...can't afford to keep providing coverage.

MR. GREGORY:  But you can't separate the lack of public support for an effort as you move forward on, on the policy.  Can this be passed through Congress without support from the American people?

MS. DePARLE:  I think there is support.  I think when you talk to the American people about whether it's fair for them to get knocked off their coverage when they get sick, I think they agree that, no, we need some common sense rules...

MR. GREGORY:  Mm-hmm.

MS. DePARLE:  ...to help regulate that market.  I think they agree with
that.

MR. GREGORY:  One of the big selling points on this is that this would reduce cost over time and that it would be paid for, that it would actually lower the deficit.  But David Brooks, given--before I get to that, but the issue of a tax on those gold plated plans is a key way that
you pay for this and balance the costs down the line.  Well, that has been changed in the president's plan to take effect later.  This is what David Brooks writes in his column on Friday.  "The Democrats (and the Republicans)" at the summit, "conveniently neglected to mention the fact that they had just gutted the long-term revenue source for their entire package, the excise tax on high-cost insurance plans. That tax was diluted and postponed until 2018.  There is no way that members of a Congress eight years from now are going to accede to a $1 trillion tax increase to pay for a measure that the 2010 Congress wasn't brave enough to pay for itself."

MS. DePARLE:  And by the way, David, that, that tax, that fee on high-cost insurance plans was designed to bring down pressure in the long term, and it does just that.  And that's why the economists across the spectrum who have looked at it say that's something that they want in this bill and they're glad that it's remained in there.  The, the president's fought for it.

MR. GREGORY:  But it's pushed back.

MS. DePARLE:  It is, by the way, one of the Republican ideas.

MR. GREGORY:  Right.  But it's pushed back to 2018.

MS. DePARLE:  It is, but it was also improved to make sure that it really does focus...

MR. GREGORY:  But, but the question that David Brooks is asking, you really think Congress down the road is going to pay for a tax increase that this Congress wasn't brave enough to pass now?

MS. DePARLE:  Yes, I do, because this president has--is paying for reform, unlike similar measures in the past, first of all.  And, secondly, it, it's something that over 10 years is going to reduce the deficit.  They're not going to walk away for that.

MR. GREGORY:  Final point, will incremental reform, will a smaller package still be considered reform by this president?

MS. DePARLE:  Well, this president's fighting to get the most effective package possible to help the American people to lower their costs, to get everyone covered.  And, unfortunately, these are big problems.  It's a fundamental problem that he's been left with here, and we have to deal with it.  We can't just walk away.  I think everyone agreed at the meeting on Thursday that we can't just do nothing.  Well, what does that mean?  That means we have to address these, these problems, and the baby steps that they talked about, some of which are worthy ideas, many of which we've spent hours talking to them about over the last year and we've incorporated in the bill, they just don't solve the problem.  I think that's the issue.  So whether we can solve those problems in a piecemeal fashion, I think, is a real challenge and the real issue here.

MR. GREGORY:  We will leave it there.  Thank you very much.

MS. DePARLE:  Thank you.

MR. GREGORY:  Coming up next, the 2010 elections, the impact of the healthcare debate and a growing sense of voter anger and mistrust of Washington.  Insights and analysis from our roundtable:  political insiders Congressman Eric Cantor, the National Urban League's Marc Morial, and Congresswoman Debbie Wasserman Schultz; along with Washington journalists Ron Brownstein and Katty Kay, all after this brief station break.

(Announcements)

MR. DAVID GREGORY:  And we are back.  Joining us, the National Urban League's Marc Morial; the House Republican whip, Congressman Eric Cantor of Virginia; and House Democratic chief deputy whip, Congresswoman Debbie Wasserman Schultz of Florida.  Plus, two Washington journalists, Ron Brownstein of the National Journal and Katty Kay of "BBC World News America," plus two minor league round draft picks to be named later.

Offscreen Voice #1:  Right.

Offscreen Voice #2:  Right.

MR. GREGORY:  We have our own healthcare summit here.  We have a big group. Welcome to everybody.

Congressman Cantor, let me begin with you.  The big question is where are we after this summit, after all the machinations and negotiations?  Are there the votes in the House to get this done?

REP. ERIC CANTOR (R-VA):  Well, I'm sure my colleague will have something to say about that.  But, David, there's a reason why we're here with no healthcare bill having been passed and that's because the American people have decided this is not the healthcare bill for them.  And that's why you heard, during the seven-hour discussion that we had at the Blair House with the president, Republicans come to the table and say, "Look, we do care about health care and we want to do something to effect positive reform." It's just that we want to take a much more commonsense, modest, incremental approach trying to address the first issue first, which is cost, and then go on to try and deal with some of the things that the president and Speaker Pelosi want to do.

MR. GREGORY:  All right.  We'll come back to that.  But--in terms of what the general approach is.

But, Congresswoman Schultz, is there and are there the votes in the House, which is really the, the big testing ground here, if it's, if it's reconciliation, for instance, where you go for a simple majority.  Are the votes there?

REP. DEBBIE WASSERMAN SCHULTZ (D-FL):  When we start counting, the votes will be there.  Because the American people want to make sure that we take the abusive practices that the insurance companies engage in and make sure that we put doctors and patients back in the driver's seat. Right now it's insurance companies that decide what kind of coverage you
have.  Right now it's insurance companies that can drop you based on a pre-existing condition.  I know that from personal experience.  Right now you can get dropped when you become sick.  You--we've got to make sure that we put doctors and patients, not insurance companies, back in the driver's seat.  And if you look at the polling, if we're going to talk about polling, that the American people have, have weighed in on, they support the components that are included in this bill because they want to make sure that we end abusive practices by insurance companies.

MR. GREGORY:  But, Marc Morial, the--but the, the composite of all of those, the difficulty that the president faces is that he has not sold the public on his version of healthcare reform.  That's the reality of his situation right now.  I spoke to one very close ally of the president's on this fight, saying he thinks 40 percent chance this ultimately gets done.  Where are we?

MR. MARC MORIAL:  I think that there's a strong chance that it's going to happen because it needs to happen.  Because, beyond the politics of Washington and the infighting, the fact of the matter is there's a problem in this nation and that is there are many people uncovered, and
for those who do have coverage, costs are exploding.  So I think that the president rightfully went back and had a discussion, which was a healthcare summit.  Some may have said it didn't make good TV, but what it did is it showed that the discussions are substantive, that the
issues, in fact, are serious.  And I think, at the end, something should get done and something will get done because it needs to get done.

MR. GREGORY:  You know, it's interesting, Ron Brownstein, and our congressmen and women will talk about some of the philosophical differences, for all the talk of the petty politics, one thing that came through the summit...

MR. RON BROWNSTEIN:  Right.

MR. GREGORY:  ...is that there are very big philosophical and ideological divisions about the role of government...

MR. BROWNSTEIN:  Yes.

MR. GREGORY:  ...in the healthcare system and how many people should be covered, particularly given the finances during a recession.

MR. BROWNSTEIN:  Absolutely.  I mean, I think one of the, the real points that came out of the summit was the depth of the disagreement between the parties.  And, in fact, each party's healthcare plan I think largely crystallizes their view of the, of the role of government.  And they differ not only in, in their solution to the problem but their definition of the problem.  I mean, we're not really, to use the president's term, comparing apples to apples.  The president's plan, the Democratic plan attempts to cover roughly, by the CBO estimate, 33 million people who are uninsured over the next decade.  The Republican plan, by the CBO
estimate, aims to cover three million people.  It is a much more minimalist plan.  It's basically recycling ideas--the association health plans, the interstate sale of insurance, the medical malpractice--that Republicans pushed and were unable to bring into law when they held
unified control of the House and the Senate and the White House in the middle part of this decade.  They were unable to build enough public consensus for those ideas when they had unified control to, to get them into law.  So--I mean, I think what we're seeing here--the, the reality is health care is a very difficult issue.  It has, it has defeated every president who has tried it for 70 years, it's a very complex problem. And, and what you're seeing, in the end, are fundamentally different divisions of the parties about how to attack this and, really, what even
you are attacking in the end.

MR. GREGORY:  What about the president's leadership on this, Katty?

MS. KATTY KAY:  I don't think that the summit changed things either way in terms of the potential for passage or not passage of this reform bill. And I want--one area where I think the president hasn't managed to try to get those poll numbers to shift in favor of reform is to say to Americans, "Listen, you may have a level of care at the moment that you're happy with, but if we carry on with these exploding costs, care will deteriorate." At the moment, America has globally the 37th highest quality of care in the world.  That puts it just above Costa--just above Cuba, just below Costa Rica.  Now is that where America sees itself in terms of its quality of care?  And that number will decline.  It's going to slip down the global poll of where its level of health care is if something isn't done about healthcare reform.  And that's an argument that the president hasn't managed to get across.  I think the other thing he hasn't done is really appeal to an--a sense of generosity in the American people.  I travel around the country and I've seen the poll numbers, but I'm struck by how many Americans say to me, "We don't see ourselves as a country that doesn't allow people access to a doctor if they don't have insurance." That's, that's just not how Americans see themselves.  This is the country that gives the highest level of charitable donations in the world. Americans think of themselves as a different country than that.

MR. GREGORY:  And, and yet--all of you can weigh in on this--the, the, the, the tension seems to be that individual elements are popular, you can talk to people who want better health care, better access to health care, reform.  But there's a lot of distrust that government can deliver this kind of care and handle it well.  And isn't that the fundamental tension?

MR. MORIAL:  But, but you know, David, the fundamental delivery system here will be the private insurance system.  That's what's key.  This is not the government running insurance.  It is changes to how health care is delivered. But what it would do would be to provide opportunities for more Americans to purchase private insurance.  And I think there's been a
great deal of confusion.  This is, in essence, a, a, a partnership between the government and the private sector to expand health coverage. And I think that it's been confused by talking points, it's been confused by political broadsides, but that's essentially what it is.

REP. CANTOR:  David, the, the...

MS. KAY:  David...

REP. CANTOR:  ...the, the reality is, and take a little bit a different approach here and difference with that statement, the reality is Republicans do care about health care.  We want to address the first and most foundational element which is cost, because if we can bring down
costs, more people can  access care.  But we also know that there is something we need to do to get more people on insured.  The problem is with the president's bill, it's about expanding Medicaid.  No one wants to, to go onto Medicaid.  That's why physicians in Florida and other
states are leaving Medicaid in droves because of the imperfect reimbursement structure.  That's what this bill is about is expanding the government programs that don't work.  We need real reform to bring down costs.

REP. SCHULTZ:  David, you want to talk about bringing down costs, our bill makes sure that we address the problem of every family in America having an--a $1,000 hidden tax for covering the uninsured.  There's 47 million people in America that don't have insurance, and we are all
paying for them because they show up at the emergency room as their primary access point for health care. In order to reduce costs, we can cut to a tax of $1,000 on American families just by covering those people.  We can also make sure that we bring down costs by broadening the pool, adding the healthiest people who are choosing right now to not, to
not carry health insurance, and then when they get hit out of a clearblue sky by an unexpected illness, they don't have insurance and we're all paying for it.  We've got to make sure we take care of this.

MR. GREGORY:  But let's reality-check this for a second, Ron.  The, the, the, the claim by Congressman Cantor that there isn't cost reduction here, we're not lowering costs, is that accurate?  Look what the CBO says about the effect on the deficit.

MR. BROWNSTEIN:  Well, well, there, there are two ways to look at this. The CBO says that it would--the Democratic plan would reduce the deficit. Republicans believe that many of the changes in Medicare would not be implemented in the long run and call that into question.  The broader question of what it means to overall national healthcare spending has been analyzed by the Medicare actuary, which is an independent position. And what they concluded was that between now and 2019, if you did the Democratic plan, you would ensure 33 million more people and national health--total national health spending would increase by less than a
penny on the dollar.  So does it break the back of rising costs?  No. But does it reallocate resources within the medical system more efficiently potentially than they are now?  Clearly, the actuary is suggesting yes if you can cover 33 million more people at a total cost of
less than a penny on the dollar increase in our, in our total national health expenditures.  That is a part of the debate that has not, that has not come through.  Can I just go back to...

MR. GREGORY:  Yes.

MR. BROWNSTEIN:  ...your point, though, very quickly, which was--you're absolutely right--even though individual elements of this plan do poll well, overall, Democrats have never been able to get it to a position where most Americans, particularly most white Americans--because there is a difference between minorities and whites in the polling--believe it will help them and their family.  That's why this is, I think, a real gut-check moment for these Democratic majorities.  I think if you poll them privately, clear majorities in both chambers would believe they have produced a plan that is a reasonable way to do universal--approach universal coverage if that is your goal.  The question is, do they believe they can sell it to the American people if they go forward with it?  Because, as you say, right now, they haven't, and Republicans, I think, exuded confidence at that summit that they believe they are winning this argument.

MR. GREGORY:  Well, so--and so, Congresswoman, what happens between now  and the point at which you say you have the votes?  What is the president going to say this week?  How will he justify reconciliation going for a simple majority in a way that congresswomen, other than yourself, will presume they can cast a vote for this safely in her district?  How do other members of Congress go back and say, "No, this is a good thing. We're going to do this"?

REP. SCHULTZ:  Because the American people support the pieces of this plan, and, after Thursday, they see through the Republican--the Republican mantra that we need to start over.  Start over means do nothing.  I mean, make no mistake about it.  It's disingenuous for my colleague to suggest that they really want to cover people when the only thing they've got out there covers three million people.  Our--nothing in their plan would bring down costs.  We have the largest tax cut for small businesses and people paying--who pay for health care in our bill in American history.  And that's the bottom line.  We have cost reduction, we have comprehensive coverage, we cover 31 million people, and they don't even come close.

MR. GREGORY:  But, Congressman Cantor, let me revise that by asking this, what specifically--you had the bill piled up in front of you--what can you say yes to that's in the president's revised proposal?  Anything?

REP. CANTOR:  We, we can--listen, David, let's take a step back for a second, because this notion that somehow Republicans never came forward with solutions, I think the American people are over that now.

MR. GREGORY:  Well, but hold on.

REP. CANTOR:  Even Ron...

MR. GREGORY:  But what you said specifically is there is a big difference in scope:  30 million covered vs. three million covered.

REP. CANTOR:  Well, and...

MR. GREGORY:  Difference in the role of government.  We established that.

REP. CANTOR:  And what we say, what we say is this, our approach is an incremental approach.  It is not do nothing.  I think that's a tired
argument.

REP. SCHULTZ:  Do very little.

REP. CANTOR:  It's an incremental approach.  Let's talk about doing the first thing, which is bringing down healthcare costs.  That's how this whole debate began over a year ago at the White House when the president had his first summit.  Then we go about trying...

REP. SCHULTZ:  Where's the evidence that you'd do that?

REP. CANTOR:  ...to do the kind of things--well, we, we certainly--the CBO has validated that we bring down healthcare insurance premiums without a doubt.  So that helps folks who have it, and we can expand coverage.  We also say, "Look, we don't approve of denial of coverage for pre-existing conditions.  We have a plan...

REP. SCHULTZ:  It's not in your bill.

REP. CANTOR:  Absolutely, it's in our bill.

REP. SCHULTZ:  It isn't.

REP. CANTOR:  We have a plan that creates universal access programs at the state level which allows folks to access insurance if they're denied by their insurer.

MR. GREGORY:  Right.

REP. CANTOR:  David, let me, let me, let me just bring to...

MR. GREGORY:  Well, wait.  Quickly respond to anything there that you
think should be...

MR. BROWNSTEIN:  Well, well, no.  In fact, CBO has estimated that both plans, both the Democratic plan and the Republican plan, if you're looking at existing insurance--your existing insurance plan--would bring down premiums by about the same amount for the apples to apples.  CBO says roughly for the Republicans, 5 to 8, roughly 7 to 10 percent for Democrats, on the effect, on the same plan.  Now, the reason why Democratic--the cost goes up, and this is a question I think Democrats are going to have to answer as they go forward on this, is that they are mandating a richer plan than, than, than, than in some cases, people--a more comprehensive plan than people now have, as the baseline in these, in these exchanges.

REP. SCHULTZ:  Ron...

MR. BROWNSTEIN:  So one of the questions I think Democrats may be asking themselves is can they bring down the cost of this somewhat by moving back away from some of those, some of those mandates.  But if you look at the CBO analysis of both kind of core proposals, remember, their impact on insurance premiums, it's very similar for people who...

REP. SCHULTZ:  David, if you look at...

MR. MORIAL:  David, if I could...

MR. GREGORY:  Well, hold, hold on.  Let me get Kat, let me get Kat in here for a second on this question, too, of what are Republicans saying yes to, which goes to the overall question is, the politics for Republicans here. What's it worth to them to have any sort of reform or not to?

MS. KAY:  Well, it seems to me at the moment the politics of the Republicans is to say--to carry on saying no.  I don't see where the value for the Republicans politically is to signing up pretty much to anything.  They do believe that they have public opinion on their side on this, and they will be able, in November, if health care doesn't pass, to turn to the public and say, "Look, the White House was expending an awful lot of energy on trying to get the president's signature bill through, when what he should have been concentrating on was jobs, jobs, jobs and the economy." And you can see the Republican...

MR. MORIAL:  Here's, here's, here's--no, no.

MS. KAY:  ...the Republican ads being written at the moment if this bill isn't passed.

MR. MORIAL:  Here's what--here's what, here's what the people deserve. They deserve an up or down vote and not a lot of procedural delay tactics, the use of all sorts of measures.  We deserve, the people deserve, an up or down vote on health care.  Let everyone put their
proposals on the table, let the House of Representatives and the Senate vote it up or down.  That's what the...

MS. KAY:  The risk for that--the risk for that is...

REP. SCHULTZ:  I think the...

REP. CANTOR:  Let me weigh on this.  Let me, let me just weigh in right now because, I'll tell you one thing, if Speaker Pelosi rams through this bill through the House using the reconciliation process...

REP. SCHULTZ:  Just like--a simple majority vote.

REP. CANTOR:  ...they, they will, they will lose.  They...

MR. GREGORY:  Hold on, hold on.  One at a time.

REP. CANTOR:  They will lose their majority in Congress in November.

MS. KAY:  I think--this...

REP. SCHULTZ:  Hold on.

MR. GREGORY:  No, but hold on.  Let me just--I want to just follow the issue of reconciliation.  But, Congressman, reconciliation has been used many times before by the, by the Republicans.

REP. CANTOR:  Absolutely.  Listen, there are differences in every instance when reconciliation was used.

REP. SCHULTZ:  The Bush tax cuts pork package.

REP. CANTOR:  This is, this is something, health care, that is going to alter a significant portion of our economy.

MR. GREGORY:  Can I just...

REP. CANTOR:  And if they do this, this--the public does not like this bill. And so it's, it's that somehow...

REP. SCHULTZ:  That's not true.

REP. CANTOR:  ...the Democratic majority just won't listen to the public. If they do this...

REP. SCHULTZ:  No.  At the end of the day here...

MS. KAY:  Just...

MR. GREGORY:  Can I, can I just--all right.

REP. SCHULTZ:  David, let me--I need to respond.

REP. CANTOR:  If they do this and don't allow us to start over with an incremental approach...

REP. SCHULTZ:  Let me respond to what he's saying here.

MR. GREGORY:  OK.  Quick comment.

REP. SCHULTZ:  Because the Republicans have repeatedly said that they agree with 80 percent of what's in our bill.  And, at the end of the day, what we need to do is sit down and negotiate over the differences on the 20 percent. The Republicans right now are focused all about regaining power.  They don't have any interest in us accomplishing comprehensive
healthcare reform.  That's been evident.  There isn't anyone that is saying, "Come on, let's just work this out." What they're saying is, "Start over." Start over, the American people understand, means do nothing.

REP. CANTOR:  David--how can, how can you say that?

REP. SCHULTZ:  Because if we are successful--because if we're successful, then they lose.

MR. GREGORY:  Final point.  Hold on.  Final point before I move to the politics.

Congressman, I want this very narrow point.  What would be in a revised bill that you could vote for?  What, out of all the president's ideas, could you support now?

REP. CANTOR:  Well, we, we could start with implementing real medical malpractice reform.  We could start by creating universal access programs at the state level to allow those who are being denied coverage by their insurance company right now the ability to access insurance.  We could put in place the ability, real ability, for people to purchase insurance across state lines for real competition that would help bring down costs.

MR. GREGORY:  And if those elements--for instance, those three elements, you could vote for it under those circumstances?

REP. CANTOR:  If, if you listen to my discussion and my comments with the president on--at the Blair House, when he asked that, I said, "Look, it is the construct of the bill." It goes back to the level of mandate from Washington, And the president and I had an exchange about why is it that we need the secretary of Health and Human Services here in Washington telling people what benefits should look like.

MR. GREGORY:  I want to just--no, hold on, I just want to move--I want to move beyond some of the fine points of this to go a little bit larger in terms of the politics.

Katty, Charlie Cook talked about what all this means politically this year, and this is what he said in a report as Politico reported it this week.  "I think choosing to take a Captain Ahab-like approach to health care - I'm going to push or this even in the worst downturn since the Great Depression - is roughly comparable to Bush's decision to go to war. It basically destroyed the first year of a presidency." Does the president comes through this, however it turns out, tarnished in some way?  Is he hurt as he goes into the midterm race?

MS. KAY:  No.  I think to some extent, the whole debate, politically, about reconciliation, is a little bit of a red herring, because, if this bill passes and it proves to be popular with the American people, it will be judged on its merits.  If it passes and proves to be unpopular, it
would also be judged on those merits.  People will soon forget how it was passed.  That's what happened with welfare reform.  It took all of us a little while to dig out our books and remember that welfare reform was actually passed through reconciliation.  People don't remember the
bickering beforehand.  They will vote for--they will support or not support this bill on its merits.  Now, the problem, I think, for the president, is that this is gumming up all of the time he needs to be spending on other things.  Business leaders are going to the White House
and saying, "We cannot make decisions about trying to hire people because we don't know what our costs are going to be.  We don't know what our healthcare costs are going to be.  We don't know what the energy plan's going to be.  We don't know what the tax reform is going to be." So they--they're not making decisions.  They are frozen because Washington
is frozen, and he needs to get moving on...

MR. GREGORY:  Mark...

MS. KAY:  ...on these legislative issues.

MR. GREGORY:  Mark, the, the, debate, of course, is how close does the president get to legislation like this?  There's a reason why, with all respect, members of Congress often suffer in their popularity because sausage making, lawmaking, is not a popular thing in the public.  Does he risk the tarnish of being too close to the process now that he's decided to get this close?

MR. MORIAL:  I think he takes credit for being able to get something very big and something significant done.  Poll numbers change, public opinion changes. What people are reacting to is a messy, confusing process.  I think that a victory on health care will help the president.  He's staked his first year of the presidency on it.  People can debate whether he should have done something else.  But the fact of the matter is, he's on the goal line and now I think people want to see him get the ball in the end zone and pass his plan.

MR. GREGORY:  Ron, the, the effect on the election?

MR. BROWNSTEIN:  I agree with both of them.  I--look, I think that the--this really is a gut-check moment for the Democrats.  They have not won the debate to this point.  And it is not unusual.  Every other president who has tried to do this has found it is very difficult in a
prospective manner to convince the country that government can reform a system this complex, especially at a time when you have such distrust of government after the 2008 financial meltdown. And I think the choice before them is exactly right, as Katty said, I don't think people are going to remember very long how this was done.  If they do go ahead with
this, they would have to do so in the belief that they can turn around those poll numbers and convince the country that this is worth doing. And, ultimately, this has, this has been, you know, a top priority for every Democratic president since Truman.  They are, as, as Mr. Morial
says, on the goal line.  And if they don't do it, I think it would be a striking admission that they do not believe, in the end, they can win this argument about an issue at the core of the party's mission for many decades.

MR. GREGORY:  Let me move, let me move on.  There was another question I wanted to ask you regarding Charlie Rangel.

REP. SCHULTZ:  OK.

MR. GREGORY:  Congressman Rangel of New York, who was criticized by the Ethics Committee for a series of trips that he took down to the Caribbean. Should he retain his job?

REP. SCHULTZ:  Well, I think we, obviously, when a member is found to have violated House ethics rules, it's a very serious thing, and there are a number of other investigations that are ongoing.  And I think what Speaker Pelosi has said is that we need to look at the totality of those recommendations and wait till the--all the investigations are completed to--before a decision is rendered on that.

MR. GREGORY:  But you're concerned about the finding?

REP. SCHULTZ:  Obviously, anytime a member is found to have violated House ethics rules, it's deeply concerning.

MR. GREGORY:  What's going to happen, Congressman?

REP. CANTOR:  I mean, look, Nancy Pelosi said in the very beginning this is going to be the most open, honest and ethical Congress in history. And what we're seeing is she's breaking that promise every day.  And I'm sure my colleague...

REP. SCHULTZ:  The ethical...

REP. CANTOR:  ...would, I'm--would join me in saying that the American people would say right away Charlie Rangel should step aside in--from being chairman of the most major committee in Congress...

REP. SCHULTZ:  We have the ethics process.

REP. CANTOR:  ...after having been found to be in, in violation of House rules, House rules.  And, as we know in press reports, this is only the tip of the iceberg.  So, you know, listen, I have--I called for his stepping down...

MR. GREGORY:  Mm-hmm.

REP. CANTOR:  ...before even this finding, and now I do think it's time for, for that.

MR. GREGORY:  Ron, does he make it, do you think?

MR. BROWNSTEIN:  This is the first shoe.  I think that this is not enough by itself, but I think many Democrats are expecting that the further revelations on the, on the ongoing investigation on his financial dealings may create irresistible pressure for him to step down.

MR. MORIAL:  I strongly support...

REP. SCHULTZ:  But, Ron, the important thing is, yeah.

MR. GREGORY:  Yeah.  Yeah.

MR. MORIAL:  ...Charlie Rangel, and his future is up to the voters who
elected him.

REP. SCHULTZ:  The important thing to know.

MR. MORIAL:  He's had a long, great career in Congress, and I think there's always going to be a lot of back and forth about ethics investigations.  Not to sanction what he said, but his future should be up to the voters of his district.

REP. SCHULTZ:  David...

MR. GREGORY:  Katty, another interesting point, another political situation. In New York, Governor Paterson saying he will not pursue his campaign for governor, striking because here you have the Obama administration, who tried to get him to back out of this race months ago,
unsuccessfully, and now the scandal involving his administration and any potential interference with the domestic violence situation involving one of his aides has now come to the point where he's still in the job, still calls for him to resign outright.

MS. KAY:  Front page paper calls for him to resign, out from nearly all of the New York City papers included.  I think it's a suggestion, isn't it, that the White House's bid earlier to try to get him to resign is a--is an indication of the limitations of the White House's clout when it
comes to Democrats all around the country.  I mean, they've, they've had this problem in elections across the country as well, in trying to support Democrats who didn't then get elected.  It is something that makes the White House not look particularly powerful.

MR. BROWNSTEIN:  You know, you know, it's a, it's a measure of the kind of year it is right now for Democrats...

MS. KAY:  Right.

MR. BROWNSTEIN:  ...that often the best headline for them this year is when somebody steps aside in the race.

MS. KAY:  Is a Democrat steps down.

MR. BROWNSTEIN:  Bill Ritter, Chris Dodd, Paterson.

MS. KAY:  From the White House point of view...

MR. BROWNSTEIN:  I mean, that is, that is a tough year when the good news is somebody isn't running.

MS. KAY:  From the White House point of view, it might have been
better...

MR. GREGORY:  Right.

MS. KAY:  ...if it was the White House who asked them to step aside, and then he would step aside then.

MR. BROWNSTEIN:  Yes.

MR. GREGORY:  Right.  Good.  Final point that you...

REP. SCHULTZ:  The, the bottom line, when it comes to ethics reforms, is that we got the Ethics Committee--Democrats got the Ethics Committee moving again. It's an effective process that was totally neutered under the, under the Republicans.  And now we have an Ethics Committee that is fully functioning and making sure that we take care of the ethics problems when they're there.

MR. GREGORY:  All right.  We are going to leave it there.  Thanks to all of you.  Covered a lot of ground.

We will talk more with Mark Morial about the National Urban League's century of service to American communities.  It's in our MEET THE PRESS Take Two Web extra.  It's up this afternoon.  Plus, look for updates from me throughout the week.  It's all on our Web site, mtp.msnbc.com.

And we'll be right back.

(Announcements)

MR. DAVID GREGORY:  Before we go, a programming note.  On this final day of the Olympics in Vancouver, watch the gold medal hockey game right here on NBC, 3 PM Eastern Time.  Team USA vs. Canada in the improbable matchup.  And I can say since Ovechkin and the Russians were knocked out, I no longer have that uncomfortable divided loyalty in my house with my
son that I mentioned here a couple of weeks ago.  So it's Ryan Miller and Team USA all the way.

That's all for today.  We'll see you next week.  If it's Sunday, it's MEET THE PRESS.

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