'Meet the Press' transcript for July 19, 2009

(Announcements)

MR. GREGORY:  And we're back now with our roundtable:  Paul Gigot and Richard Wolffe, Michele Norris and John Harwood.  Welcome to all of you.

All right, tomorrow marks six months in office for President Obama.  John Harwood, this is do or die time, as I've been saying, on healthcare reform. And to me the biggest issue, and you heard it addressed with Secretary Sebelius, is whether or not the number one goal of containing costs over time will be achieved.  The CBO said this week, Congressional Budget Office, said not with the plans you've got in Congress so far.  How can the president stand behind these plans?

MR. JOHN HARWOOD:  Well, I think you're going to see some adjustment in the plan.  You already saw, since Doug Elmendorf spoke on the Hill, a ramped-up effort to get this MedPAC idea, an independent commission that would say no to some of the spending that's now taking place in the system.  And I think you've got a live conversation ongoing within the administration, within the--between the two parties on Capitol Hill about whether, in fact, you ultimately finance part of this package by taxing health benefits, which is one proposal that would both raise revenue and could bend the cost curve. Health economists agree on that.

MR. GREGORY:  Hm.

MR. HARWOOD:  It's very politically touchy.  Labor unions are against it. Are the Democrats going to go there and try to strike a deal with Republicans? We don't know yet.

MR. GREGORY:  We know, for one thing, that the president's in campaign mode. He was campaigning this week for Governor Corzine in New Jersey, who's got a tough race for re-election there this year; also campaigning for health care. This is what he said.

(Videotape, Thursday)

PRES. OBAMA:  We have talked and talked and talked about fixing health care for decades, and we have finally reached a point where inaction is no longer an option, where the choice to defer reform is nothing more than a decision to defend the status quo.  And I will not defend the status quo.  We are going to change healthcare reform.

(End videotape)

MR. GREGORY:  So, Paul Gigot, is he a president who has, has got the reigns here, or does he appear defensive?

MR. PAUL GIGOT:  Oh, well, he's still popular, but he is in a rush to get this done in August for a couple of reasons.  One, because his own--the popularity of his own agenda is falling.  He's personally more popular than his, than his agenda is, particularly on health care and the economy, and they're worried that if they don't pass this by August it's going to be more difficult in the fall because a lot more Democrats are going to see his approval rating fall, particularly if unemployment rises.  It's now 9.5 percent, it's probably going to get to 10.  More and more Democrats are going to get jittery about the 2010 elections.  And they're also worried about this House bill...

MR. GREGORY:  Right.

MR. GIGOT:  ...which has enormous tax increases in it.  And if that hangs out there in August, it's going to be a real opportunity for a lot of people.

MR. GREGORY:  You wrote about that this week on the editorial page of the Wall Street Journal, highest tax rates...

MR. GIGOT:  Higher than France if you combine state and federal.

MR. GREGORY:  Right.

MR. GIGOT:  Higher than France, higher than all but three European countries, top marginal income tax rate, upper 50.  That's very dangerous for the economy at this time, and a lot of Democrats are nervous about it.

MR. GREGORY:  Right.  Because it's not just Republicans.

MS. MICHELE NORRIS:  Right.

MR. GREGORY:  I mean, you heard Senator McConnell.  Obviously, Republicans aren't going anywhere, which is another problem in terms of getting bipartisan support, if there's going to be any Republican support.  But it's Democrats who look at this and say, "Hey, we're in the middle of a recession, we've got to go campaign next year.  Should we be raising taxes to this extent?"

MS. NORRIS:  That's one of the things that has been so interesting about this is the president is having a hard time selling this plan to members of his own party.  I thought it was really interesting to see him just on that clip now and hear the Barack Obama that we heard on the campaign trail.  I mean, you know, he usually sounds much more measured right now.  But it's a little bit--if you're following this, he's sort of all over the place right now. He's talking about health care, but he's also doing all kinds of other things. And so the message is, is, you know, people make the, the legitimate criticism that he's not putting as much into this as perhaps he could.  And with all the horse trading going on on the Hill right now...

MR. GREGORY:  Right.

MS. NORRIS:  ...the, the danger is that when you see this kind of last-minute horse trading, arm twisting going on, it usually makes legislation worse instead of better.

MR. GREGORY:  You know...

MS. NORRIS:  We saw that with the, with the climate change bill.

MR. GREGORY:  Richard Wolffe, take this on.  I mean, the conventional wisdom here is that he's on the ropes here on health care.  Is that overstated?

MR. RICHARD WOLFFE:  No, I think it's a challenge.  And the longer it goes on--Paul is right not about the polls, but about delay has always killed health care.  So the longer this delays, the worse his authority gets.  But he is going to try and step this up now.

MR. GREGORY:  Right.

MR. WOLFFE:  Can he get--do it just by being in campaign mode?  The answer is no.  He has to give Democrats the tools to go sell this program.  He has to do some arm twisting.  He has to be like LBJ here and get involved, especially with his own Democrats.  And while this is a debate about tax and spend and budget curves, while he's being conventional, he's going to struggle.  He has to go out and say this is about gimmicky politics.  He's the outsider.  He's the authentic voice.

MR. GREGORY:  Right.

MR. WOLFFE:  And people are paying more and getting less.  If he puts it on those terms, he has a path.  Right now he's not on that path.

MS. NORRIS:  (Unintelligible)

MR. GIGOT:  (Unintelligible)

MR. GREGORY:  You're shake, you're shake...

MR. HARWOOD:  (Unintelligible)...does he meet his own test?  In--he's put out the test that cost control is the first principle.  He knows that's a more popular thing to talk about, he's also for it.  But if you--if his own bill, if the Democrats' own bill doesn't meet his test, how does he go vigorously sell it and make it work?

MR. WOLFFE:  The test becomes about what is affordable.  You know, in the campaign they realized that health care wasn't its own issue, it was an economic pocketbook issue.  So while they're talking about budgets or the uninsured--they don't talk about the uninsured anymore, they don't really talk about universal coverage at all--they need to make this about what people can afford and what they're getting for health care.  Anything else, while it's the Beltway discussion, is going to kill it.

MS. NORRIS:  But outside of the Beltway there's an interesting data point here that people involved in the process talk about, the fact that some 90 percent of the people who voted actually have health insurance and three-quarters of them are satisfied with what they got.  And there's different ways of looking at that.  And one way to look at that is to say that perhaps there is not the public mandate for this that would dictate this sort of rush to legislation, and that's going to make it harder to make that point and sell that when they, when they...(unintelligible).

MR. GIGOT:  I agree with that.  But he's making the same mistake that he made on the stimulus.  And he got away with it on the stimulus because it was first bill and it was early and the economy was in bad shape.  But he's governing from the left.  He's turned over.  He's subcontracted out a lot of his agenda to the committee chairmen, predominantly liberals, on Capitol Hill, and they're driving this from the, from the left.  That's why you see these, these extraordinary cost and these extraordinary taxes.  There is a better way to govern through the center out, the way Bill Clinton did on welfare reform, where he could get Republicans pass tax credits to help the uninsured, get those Republican votes, deal with the tax exclusion that John McCain suggested in the campaign, that John just talked about.  But he won't do that because he knows that will upset his political left.

MR. GREGORY:  Let's, let's add the economy into this.  And again, all about jobs.  This week a remarkable figure, the deficit topped a trillion dollars for the year.  And looking at unemployment, the idea of the long, hard slog here, The New York Times did an analysis, going inside the numbers.  Beyond the unemployment late, if you factor in people who are working part-time who want to work full-time or those who are, who are not now looking for a job, look at those states where unemployment gets us into the high double digits here.

John, if you combine the economy and health care, this is about Obama performance.  If he doesn't, if he doesn't get health care, if he doesn't change the dynamic on the economy, this is the blueprint for a Republican opposition to him in 2010.

MR. HARWOOD:  Yes.  And this is the issue on which the timing gets very, very tough for Barack Obama.  Even if you do everything right on the economy--and the administration would not concede Paul's point that they made the mistake on the stimulus--even if that's working and the economy's in the process of returning to positive GDP growth, unemployment, by their own estimation, is going to continue to rise in the top 10 percent.  How do you get the public to accept that this is going to work in the long run when they're seeing these scary numbers and, and seeing in some states, like Michigan, where unemployment's 15 percent?  And that's why Senator McConnell's argument that he made with you is pretty powerful.  Look at this size of this deficit, over a trillion dollars, and now here comes health care.  If you look at the polls, the issue of spending and the deficit are where the administration's most vulnerable.

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