Axelrod: Healthcare, energy and inaction

by Mark Silva and updated with transcript

The White House has drawn no lines in the sand in its push for healthcare reform, a senior adviser to the president says, but congressional Republicans appear intent on using inaction as a political strategy.

David Axelrod, President Obama's chief political adviser, says the president is not issuing any ultimatums in the healthcare debate. That, Axelrod suggested in an appearance on ABC News' This Week With George Stephanopoulos today, is how great ideas die in Washington.

Despite reluctance about the cost of healthcare reforms - with Senate Democratic leaders working to contain the cost of their bill to $1 trillion - Axelrod maintains that the White House has made progress on a plan. Obama has proposed broad guidelines, he suggested, is counting on Congress to fill in the details and wants to see final legislation enacted before Congress leaves for vacation in August.

At the same time, Axelrod suggested, the GOP is using its opposition to the energy and climate bill that squeaked through the House on Friday and awaits action in the Senate as a strategy for next year's midterm congressional elections.

"We're trying to solve a problem that has languished for a decade, the problem of energy that has bedeviled us for a long time.,'' Axelrod said. "And they're talking about how they can use it as an issue, inaction as somehow a strategy. And that's not a strategy."

House Republican Leader John Boehner (R-Ohio) maintains that the energy bill and healthcare proposals are all part of a Democratic "spending binge" for which the party will pay at the polls next year.

While Republicans call the cap and trade energy bill a job- killer and tax increase, Axelrod calls the criticism a "phony issue" with a "negligible" impact on the averrage American. The bill, he says, will create millions of environmentally friendly jobs.

And, as we noted in these e-pages, stirring some discussion this weekend, a handful of the House's Republicans, including Rep. Mark Kirk of Illinois, can claim the credit for moving a bill through the House that the GOP leadership tried to block.

Here, courtesy of ABC News, is a transcript of Axelrod's interview:

STEPHANOPOULOS: Hello, again.

Congress has gone home for their July 4th break and they had better

rest up, it's shaping up to be the busiest summer in a generation:

health care, energy, the Supreme Court, and the economy. And for the

debate on where things stand right now, we're going to begin this

morning with the president's senior adviser, David Axelrod.

Welcome back.

AXELROD: Thanks, George. Good to be here.

STEPHANOPOULOS: Let's begin with that vote Friday night in the

House, this vote on climate change legislation, very close, 219 to 212.

Democrats say it's a major step forward for energy independence, to

create green jobs, to control global warming.

But you know the Republicans are saying it's going to cost Americans

jobs, going to send jobs overseas. And most important, they say it is a

huge tax. And on that they have some backup from one of the president's

supporters, Warren Buffett.

Take a look.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: I think if you get into

the way it was written, it's a huge tax and there's no sense calling it

anything else. I mean, it is a tax. So it -- and it's a fairly

regressive tax.

(END VIDEO CLIP)

STEPHANOPOULOS: How do you answer that? Republicans say this is

the defining vote of 2008. They're going to use that in the 2010 elections.

AXELROD: Well, you know, it's interesting. We're trying to solve a

problem that has languished for a decade, the problem of energy that has

bedeviled us for a long time. And they're talking about how they can

use it as an issue inaction as somehow a strategy. And that's not a

strategy.

As for the tax issue, you know, I have a high regard for Warren

Buffett, and the president does as well. I think the Congressional

Budget Office addressed this issue, and their conclusion was the way the

bill was written, the impact on the average American will be negligible

over time.

And I think it was written for...

STEPHANOPOULOS: About $150 a year.

AXELROD: ... that reason. In 2020, and for lower income people, it

actually will be a net gain because they'll get some help with their

energy bill. So I think this is a phony issue.

And the real issue is, what is the Republican strategy for creating

jobs? This bill actually, they call it a job killer, it will create

millions of green jobs, the jobs of the future. We've lost millions of

jobs in the recession that began last year and continues.

What is their strategy for that? What is their strategy for

reducing our dependence on foreign oil? And how are we going to deal

with this issue of carbon pollution that threatens people's health and

the planet?

STEPHANOPOULOS: As you know, you're also facing some resistance

from Democrats though in the Senate on this bill as well, senators like

Claire McCaskill saying they're going to need some major changes.

And I've been trying to get into the issue of legislative strategy a

little bit. The president is also pushing very hard on health care

reform. He said he wants the Senate to act on this energy bill as well.

Does he want them to take it up right away or wait until after they

finish considering health care in the fall?

AXELROD: Well, I think this energy bill will probably be dealt with

in the Senate in the fall.

STEPHANOPOULOS: So after health care.

AXELROD: Health care I think will be the first thing on the

agenda. Both the Senate and the House are well down the road on that.

But, George, understand that both of these issues, energy and health

care, have languished for a long time. And the president believes that

we have to deal with these issues in order to build a stronger

foundation for our economy in the future.

And so he is taking the long view about how we get our economy

moving, not just in the short term, but the long term. And he is asking

Congress to join with him in this effort.

(CROSSTALK)

STEPHANOPOULOS: ... with that, especially on health care, excuse

me, is figuring out where the revenues are going to come from. And, you

know, a lot of talk about taxes in the House and the Senate as well.

And I want to show our viewers something the president said during

the campaign back in September.

(BEGIN VIDEO CLIP)

OBAMA: I can make a firm pledge: Under my plan, no family making

less than $250,000 a year will see any form of tax increase, not your

income tax, not your payroll tax, not your capital gains taxes, not any

of your taxes.

(END VIDEO CLIP)

STEPHANOPOULOS: Not any of your taxes, a firm pledge. Does that

mean the president will veto any health care bill that includes a tax

increase on people earning less than $250,000 a year?

AXELROD: Well, first of all, George, let's make a few points. The

president has said whatever is done has to not add to the deficit. So

that's one of the prerequisites for this bill. We've got issue with our

budget. Everybody is aware that we don't want to add to our deficit.

So this is going to have to be paid for. Two-thirds of the expenses

-- two-thirds of the expense of it under the president's plan and

proposal would be done by transferring money within the health care

system from Medicare on wasteful spending, giveaways to insurance and

drug companies, and so on.

And so we're talking about the final third. He has proposed a plan

that would be in keeping with the promise that he made, to cap

deductions for the wealthiest Americans on their taxes.

He still believes that's the way to go. And he has made a strong

case to the House and the Senate on it.

STEPHANOPOULOS: But he also said this week he was open to

compromise on this. And as you know, the Senate is looking especially

at this issue of capping the deductions for health care that employers

and employees now get. That would get -- would be a tax increase for

many families earning under $250,000.

But the president said he was open to it. So that means that the

tax pledge he made back in September is no longer operative?

AXELROD: Well, George, first of all, there are a lot of different

formulations of that plan. The president had said in the past that he

doesn't believe taxing health care benefits at any level is necessarily

the best way to go here. He still believes that.

But there are a number of formulations and we'll wait and see. The

important thing at this point is to keep the process moving, to keep

people at the table, to the keep the discussions going.

We've gotten a long way down the road and we want to finish that

journey.

STEPHANOPOULOS: But if you're open to tax increases for people

under $250,000, that means that the pledge he made last September in

Dover is no longer operative.

AXELROD: George, I think the president has made clear the way he

feels this should be funded. And certainly is consistent with what he

said during...

STEPHANOPOULOS: But he's not drawing a line in the sand.

AXELROD: ... the campaign.

STEPHANOPOULOS: He said that.

AXELROD: Well, you know what? The -- one of the problems we've had

in this town is that people draw lines in the sand and they stop talking

to each other. And you don't get anything done. That's not the way the

president approaches us.

He is very cognizant of protecting people -- middle class people,

hard-working people who are trying to get along in a very difficult

economy. And he will continue to represent them in these talks.

But they're also dealing with punishing health care costs, and

that's something that we have to deal with

STEPHANOPOULOS: One of the Republicans who is both drawing lines in

the sand and still talking is our next guest, Charles Grassley of Iowa.

And he has made it very, very clear what he believes has to be in a plan.

One of the things he said is, absolutely no public health insurance

plan in the bill. The president has said he has made a very strong case

for that this week. And Senator Grassley has also said that we're

probably going to have to have some taxation of benefits.

And I guess what I'm trying to get at, is that a price that the

president is willing to pay? I know you're saying that the president

has laid out his preferences, but what price is he willing to pay to get

Republican votes, to get a bipartisan bill?

AXELROD: Well, George, first of all, the bill will be bipartisan by

definition. Just this week the Senate Health Committee, Senator Dodd

has done a spectacular job in moving this along. And the Senate Health

Committee accepted 82 Republican amendments.

Republican ideas are going to be included in this package. We hope

it will come with Republican votes as well. But the important thing is

that we solve this problem. That we begin to move...

STEPHANOPOULOS: So that's the new...

AXELROD: ... forward on health care reform.

STEPHANOPOULOS: And the chief of staff, Rahm Emanuel, has made the

same point you just made. That seems to be the new White House

definition of bipartisanship. It's a bipartisan bill if there are some

ideas that have been advocated by Republicans, even if Republicans don't

vote for the bill in the end.

Senator Grassley says, no way. It is not bipartisanship either if

you include just the Republican ideas but not Republican votes, or even

if you simply get six or seven Republican votes, he says that's not

true, durable bipartisanship. That's not the road he's going to go down.

AXELROD: Look, I don't think we should get consumed by process at a

time when health care costs are increasing at -- you know, they've

doubled in decade. Out-of-pocket costs for people on health care up 32

percent, punishing families, businesses, banks, you know, ultimately

will bring the federal budget down (ph).

We have to act. We can't afford to get ensnared in these kind of

Washington discussions. We've got to deal with the issue that the

American people are confronting.

STEPHANOPOULOS: And the American people are also confronting the

issue of the economy. That is their number one issue. And some of your

critics say the president has gone off-course a little bit, has lost his

focus on the economy.

We had a new Washington -- ABC/Washington Post poll this week that

had some fairly revealing numbers. Number one, it showed on the

stimulus package, the support for people who felt the stimulus package

was helping the economy: 59 percent in April, down a little bit to 52

percent. Now whether the country is going in the right direction hit 50

percent in April, had been skyrocketing since the election, but for the

first time started to slip back.

How concerned are you by this? And how much are you worried about

the fact that people don't believe that the president's plans -- are

starting lose faith that the president's plans are actually helping the

economy?

AXELROD: George, we lived through several years in which we were

confronted with poll numbers that said we were 30 points behind in the

race for the presidency. I confront a lot of doomsday questions from

people less smart than you in this town.

And, you know, we take the long view on this. Look, when the

president signed the stimulus package -- the economic recovery package,

he said it's going to take a while for this to work, and we're going to

go through some rough times, and unemployment is going to go up, and

we've got to work -- we have to work our way through this. So...

(CROSSTALK)

STEPHANOPOULOS: But the money is not getting out as fast as you

hoped, is it?

AXELROD: ... none of this -- none of this is surprising. What?

STEPHANOPOULOS: The money is not going out as fast as you had

hoped, is it?

AXELROD: Well, I think the money -- we would like the money to go

out faster in some instances, but a lot has been accomplished, and that

should not be diminished. There are 4,000 or 5,000 road projects going

on in this country right now that would not have gone on. There are

energy projects going on in this country right now, and homes being

retrofitted to be energy efficient that would not have happened. There

are policemen and firefighters and teachers who are still on the job

today because of that package.

So I think it's done an awful lot of good. The fact is that we're

in the teeth of one of the worst recessions that we've had since the

Great Depression, perhaps the worst, and we're going to have to work our

way through that. And I think the American people understand that at

some level, and that -- and so we're not sitting there -- the numbers

we're worried about are not poll numbers. It's how many people can we

get back to work, how do we get this economy moving again in the long

run, and mostly how do we build a solid foundation so we're not in this

bubble-and-burst kind of economy that we've seen over the last decade

that leaves both our country and our families and businesses in jeopardy.

STEPHANOPOULOS: Some economists look at that, including Paul

Krugman, who's going to be on this show later in the program, he says

you're looking at 9, 10 percent unemployment coming in September.

That's going to necessitate a second stimulus package. Is that still on

the table for the president right now? And what would that mean for

your other plans on energy and health care?

AXELROD: Well, first of all, I don't want to prejudge that at all.

You know, as you said earlier, there's still -- most of the stimulus

money, the economic recovery money is yet to be spent. Let's see what

impact that has. I'm not going to make any judgment as to whether we

need more. We have confidence that the things we're doing are going to

help, but we've said repeatedly, it's going to take time, and it will

take time. It took years to get into the mess we're in. It's not going

to take months to get out of it.

STEPHANOPOULOS: Let me turn to the crisis in Iran. The crackdown

appears to be working for now. The streets have gone quiet. A huge

security presence in the streets. Mir-Hossein Mousavi, the chief

opposition leader, has not called for new protests. And President

Ahmadinejad is striking back at President Obama and the comments that

President Obama made on Friday. He has said -- he's calling on the

United State to stop meddling, and then he's gone on and said, "without

a doubt, Iran's new government will have a more decisive and firmer

approach toward the West. This time, the Iranian nation's reply will be

harsh and more decisive to make the West regret its meddlesome stance."

It does appear that the prospects for engagement are diminishing,

that Iran is taking a harder line.

AXELROD: Well, first of all, you know, let's be clear that we

didn't meddle in the election in Iran. The dispute in Iran is between

the leadership in Iran and their own people, and plainly, Mr.

Ahmadinejad thinks that by -- by fingering the United States, that he

can create a political diversion. So I'm not going to entertain his

bloviations that are politically motivated.

STEPHANOPOULOS: Well, (inaudible) entertaining them.

AXELROD: It's just an opportunity to say "bloviate."

(LAUGHTER)

AXELROD: No, I'm not -- the point is this. We are going to

continue to work through the P5, through the multilateral group of

nations that are engaging Iran, and they have to make a decision,

George, whether they want to further isolate themselves in every way

from the community of nations, or whether they are going to embrace

that. And understand that whatever Mr. Ahmadinejad says, everyone

understands that in Iran, he is not the person who makes decisions on

foreign policy, on defense policy. So this is political theater.

STEPHANOPOULOS: But the invitation is still open. If the Iranians

want to come to Paris and sit down with the United States and the

Europeans on the nuclear program, that invitation is still open.

AXELROD: Well, yes. And understand, you say it's an invitation.

It is not a reward. We are not looking to reward Iran. We are looking

to -- the nations of the P5, the five-plus-one, they want to sit down

and talk to the Iranians and offer them two paths. And one brings them

back into the community of nations, and the other has some very stark

consequences.

STEPHANOPOULOS: Final question. I was talking to an ambassador

from the region this week, who said now, if you sit down with the

Iranians after everything we've seen in the last couple of weeks, you're

going to be crushing the hopes of the young people in Iran and across

the region, who listened hard to the president's Cairo speech and

thought he was striking out in a new direction.

AXELROD: I think the president's sense of solicitude with those

young people has been very, very clear, and we're very mindful of that.

We are also mindful of the fact that the nuclear weapons in Iran and the

nuclearization of that whole region is a threat to that country, all

countries in the region, and the world. And we have to address that.

We can't let that lie.

STEPHANOPOULOS: David Axelrod, thanks very much.

AXELROD: Good to be with you.

STEPHANOPOULOS: And as we bring in Senator Grassley, here is a look

at how supporters of the president's plan are trying to pressure the

senator in his home state of Iowa.