Obama: Bankruptcy w/out health reform

by Mark Silva and updated with transcript

There is a ''disconnect'' between what the public wants out of health care reform -- lower costs -- and what President Barack Obama wants -- heatlh care coverage for the millions of uninsured -- according to that Battleground Poll today.

But the president maintains the two are one in the same: The health-care reforms which he is pressing will "bend the curve'' of spiraling health-care costs.

The White House this week reported that the bills that have narrowly cleared the House and are under intensive debate in the Senate can curtail the rising costs of health care by 1 percent a year -- slowing the growth, that is.

Without that brake, the president maintains, the governnent wll go "bankrupt'' with the rising costs of Medicare and Medicaid, and insured Americans stand to lose the coverage that they already have as costs grow unsustainable for employers.

"If we don't pass it, here's the guarantee....your premiums will go up, your employers are going to load up more costs on you," Obama tells ABC News' Charles Gibson, in an interview that ABC is airing on World News this evening. "Potentially they're going to drop your coverage, because they just can't afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year."

The costs of Medicare and Medicaid are on an "unsustainable" trajectory and if there is no action taken to bring them down, "the federal government will go bankrupt,'' Obama says in the interview with Gibson, according to ABC. "This actually provides us the best chance of starting to bend the cost curve on the government expenditures in Medicare and Medicaid.''

Obama maintains: "If we don't do this, nobody argues with the fact that health care costs are going to consume the entire federal budget.''

Polls have shown dwindling public support for the health-care overhaul that Congress is debating, however. "The latest ABC News/Washington Post poll found that support for the health care reform package, while never robust, is now at a low ebb and opposition has been steadily growing stronger in intensity,'' ABC reports.

"For the first time, a majority of those surveyed disapproved of the president's work on health care (53 percent) and oppose the health care reform package making its way through Congress (51 percent, compared to 44 percent approval).''

See a transcript lof the ABC interview with Obama:

CHARLES GIBSON: Mr. President, a year ago today, you were in Chicago. You knew you were going to be president, but you weren't. What didn't you anticipate? What did you underestimate? What didn't you know?

PRESIDENT OBAMA: Well, I think the main thing is we didn't understand the rapidity of job losses in those first three months -- January, February, March -- actually, starting in December. You saw 700,000 jobs lost or 650,000 jobs lost in each of those months. So none of the economists had anticipated that.

By the time we were in legislative session, had actually passed a Recovery Act, you had already seen over 3 million jobs lost, on top of what had been lost the previous year, and that meant that unemployment was going to go up higher, and even as we moved aggressively to start boosting economic growth, we knew at that point that job growth was going to be lagging severely and that that was going to be one of our greatest challenges.

GIBSON: You surprised me a little, because I think -- and I've heard other presidents say -- the thing that you can't anticipate is the weight of the job when it comes to you, particularly when it comes to committing young men and women to war.

OBAMA: Well, I will tell you that, unfortunately, I anticipated the difficulties involved in managing two wars at the same time. I think Iraq has actually gone better than we anticipated, or at least as well as we could have anticipated. And I've been very fortunate to have extraordinary leadership not only in the secretary of defense, Bob Gates, who understood all the ramifications of our wartime policies, but also having Ray Odierno on the ground, who's been doing outstanding work.

So Iraq, I think, we knew we could manage, and we have. Afghanistan we understood was going to be a problem.

Now, we have been disappointed, I think, in the fact that the Taliban had gained more momentum during the course of the year than was anticipated. When General McChrystal came back with his assessment, the sense of what deterioration had taken place on the ground was worse than what had been initially reported.

The weight of making decisions around sending young men and women into war is something that, frankly, I foresaw being difficult. When you're in the midst of making the decisions, though, nothing compares. And when you meet with families and you talk to soldiers who've come home disabled as a consequence of their service, the -- the -- the sheer emotional force of that I think is something that you can't anticipate. It's something that hits you like a ton of bricks.

GIBSON: I've always been fascinated by this question of -- of what it takes and what you have to go through internally to send kids off, as you said a few moments -- when you were in the Nobel speech, you said some will kill and some will be killed.

OBAMA: Right.

GIBSON: It's an enormous responsibility. And before Gulf War I, I went to Kuwait, and I talked to the commanders, Army, Navy, Marines, Air Force, and I asked them, what does it feel like to commit kids to war? And they all said, "We don't. The president does. It's his job. We just carry out his order."

OBAMA: Right.

GIBSON: And I thought, "Holy God, what a weight that is on your shoulders."

OBAMA: It is tough. And, you know, probably the most powerful moment of my year was when I traveled up to Dover and not only met with the families who were there in the middle of the night waiting for their loved ones to come home in caskets, but walking up the ramp of the transport plane by myself and seeing those caskets, it's -- it's -- it's indescribable, and it reminds you of the extraordinary courage and sacrifice that these young men and women are willing to make, but it also reminds you that you have the solemn obligation to make the best possible decision that you can make and that there is an element of tragedy involved in war that is inevitable, and that was the topic of what I spoke about last week. And if you don't understand that, if you think that this is all chest-beating and glory, then you're probably not making the best decision as possible.

GIBSON: As you went through that assessment in recent weeks, is there a calculus in your mind? Do you have to go through it? What is this worth in terms of human life?

OBAMA: Yes.

GIBSON: Is this goal worth 500 lives, 1,000 lives, 1,500 lives? Does that go through your head?

OBAMA: I don't think that you make a decision trying to weigh the value of 1 or 10 or 100 lives, because every life is precious. I think you make decisions based on an assessment of America's national security, the potential for additional lives, thousands of lives potentially being lost if we're not making the right decisions that preserve that national security.

What you want to make sure of is that, in these decisions, you are not making them based on abstractions, notions of, you know, of a battalion here or a battalion there, a brigade here, a brigade there, without understanding that in each of those battalions, in each of those brigades, there are young men and women with their lives ahead of them who you are committing.

And so that is a constant ballast, I think, to making the best possible decisions. But, look, part of the decision I have to make is also what is the absolute best way for us to prevent another 9/11 from happening. What is you know, how do we make sure that we're not in a situation in which a major American city is threatened?

So all these things go into the calculus. In the end, the best you can do is make sure that you've heard every opinion, that you have evaluated and analyzed every aspect of your decision, that you have clarity about what your choices are, understanding that the choices that you have are very rarely the ideal choice versus a terrible choice, but rather a range of choices, all of which have problems with them.

GIBSON: Cost-benefit analysis is what people go through. It's one thing when there's an insurance company or whatever, but when there's human lives at stake...

OBAMA: Yes.

GIBSON: ... it's just totally different. How did you change from the beginning of that analysis and process that you went through to the end, inside you?

OBAMA: I think that there is a sobriety that overcomes you during the course of a decision like this that -- that's hard to describe. Look, we've had to make a lot of tough decisions this year. You know, there was moments where we thought that the financial system might be on the verge of collapse. There are decisions that you've got to make about intervening in the auto industry, which you know are going to be wildly unpopular.

And so there are a series of decisions that I've made, up until the decision most recently to send additional troops into Afghanistan, in each of those decisions, I could step back a little bit and say, "All right, what's" -- in -- in a fairly calculating, analytical way, what's the best decision to make?"

With this one, you feel it viscerally. You lose sleep. You think about families. You think about history. You walk through Arlington. You're reminded of the image of a mother in the rain sitting in front of a tombstone. And so the -- the gravity of the decision is just of a different quality.

Transcript: Charles Gibson Interviews President Obama (cont.)
GIBSON: In the West Point speech, you talked about reversing the Taliban's momentum. What if this surge doesn't?

OBAMA: Well, then we're going to have to make additional decisions based on what the situation on the ground is. Look, you know, the thing that prompted by decision was the belief that, if we just sustained the status quo, in the long term, meaning -- or even the medium term, over the course of five to eight years, we'd probably be devoting just as many resources, as many troops because there would never be a clear break, a clear inflection point where we could start to draw down without enormous risks, risks that might not be in America's national interest.

What we did, I think, was find that point where, having built up Afghan capacity, we're then in a position to start reducing our presence because we've built up a partner in the region that can work with us effectively.

There are no guarantees that that works perfectly. In fact, I think it's safe to bet that, no matter how well we do, there are still going to be problems with Afghan governance...

GIBSON: Sure.

OBAMA: ... there are still going to be problems with Afghan capacity to deal with the Taliban, Al Qaida is still going to be active in the region in some way. So as I said before, my job is to make the best decisions possible given the circumstances. And the circumstances are, you've got a very unruly place in that border region between Afghanistan and Pakistan. It is going to take, I think, a long time for us to reverse the mindset that is leading young Afghans and young Pakistanis and jihadists from the region to direct their anger and frustration at the United States, but what we can do, I think, is create an environment in which those impulses are contained and that, over time, we're reversing this dynamic.

It's going to go in fits and starts. It's not going to be a smooth line; it's not going to be a smooth trajectory. Even in Iraq, as I said, it's gone as well as I think we could have hoped, but you still see the occasional bombing there that kills civilians. You still see enormous -- enormous problems in terms of just getting an election law passed.

So in all these situations, what we're doing is managing a difficult situation, but putting us on a trajectory where you can see the possibilities of long-term change in the region.

GIBSON: The one question about which it seems the United States public is skeptical of what you're doing is the question of whether the U.S. has to defeat the Taliban in order to defeat Al Qaida. People don't see the Taliban necessarily as a threat to the United States.

OBAMA: Well, actually, I've been clear that our job is to degrade Taliban capacity. Look, there are members of the Taliban who don't have some global jihadist view. They're just a member of a tribe. They're looking for a job. They see this as an opportunity. And those are the folks who I think potentially you can reintegrate into Afghan society.

So it's absolutely true -- and this was part of the review process -- that we had to work with our military to define the mission and be clear. Look, our -- our job here is not to get a body count on the Taliban, because that, I think, takes us down an open-ended commitment that is not required for our narrow security interests. What is required is making sure that you don't have an entire nation, Afghanistan, or huge swaths of Afghanistan and Pakistan that are so lawless that it is difficult for us to keep up the pace of offensive activities against Al Qaida.

One of the unwritten stories this year is we have been very successful in going after Al Qaida and keeping them pinned down. And I believe that that has saved American lives and the lives of our allies, because they really can't operate with the kind of impunity that they did prior to 9/11.

But in order to do that, we've got to make sure that we've got a platform in that region that allows us to keep that pressure on. And we can't expect to have that same kind of ability to be on the offensive against Al Qaida if you've got Afghanistan in utter chaos or if you've got a Taliban that is controlling huge parts of the region and are actively engaged in planning with Al Qaida.

GIBSON: Let me turn to health care. When we talked in the White House and throughout the early stages of health care reform discussion, you talked about the absolute need to bend the cost curve of health care, that we had to bring costs into line if we're going to right the country. If there's no government insurance program, if we're not even going to expand Medicare to keep insurance companies competitive, how does the cost curve bend?

OBAMA: Well, a couple of things. Number one -- and something that hasn't been discussed, partly because there's been some broad-based agreement on this -- we're setting up an exchange in which you've got 30 million people and small businesses who are now able to pool their buying power and negotiate, essentially, with insurance companies by choosing the best price from a range of different plans, forcing insurance companies to compete the same way they compete for the business of federal employees. That drives costs down.

Every single what's called game-changer, every idea that's out there about changing delivery systems, how hospitals are built, how doctors are reimbursed, how we can incentivize them to plan better, reduce numbers of tests in order to improve quality of testing and diagnoses, all those things are embodied in the bill.

There was a terrific article in the New Yorker just about a week ago by a doctor, Atul Gawande, who pointed out that there is not an idea out there for cost control that is not in this health care bill. The problem is, is that a lot of these things proceed by trial and error, because what we're trying to do is change behavior of hospitals and doctors and health systems all across the country.

And the goal here is to create a system in which people try things out. Suddenly, somebody says, "You know what? We're saving money. The hospital here is saving money and reducing errors because we've got a protocol or a checklist of procedures in terms of how doctors and nurses work together to deal with a patient in a more effective way." Another hospital down the road starts learning from that, and you start seeing these changes cascade through the system.

So, you know, all I can do is talk to the smartest people in this country, the health economists, people who are involved in health care each and every day, find out from them what ideas they have and make sure that's incorporated into the bill.

Transcript: Charles Gibson Interviews President Obama (cont.)
GIBSON: And then there's the problem of getting the darn thing passed, which is proving to be devilishly difficult.

OBAMA: Yes.

GIBSON: You thought you had a compromise last week that was going to expand Medicare to younger people, and Senator Lieberman says, "Well, I'm not sure I want that," and then all of a sudden, we hear it's out of the -- out of the bill. Do you feel as if individual senators are holding you hostage?

OBAMA: I think that what we have right now in the Senate is a situation where the opposition party has made a political decision that we are going to say no to everything, we're going to not be at the table, we're going to just not get involved. What that -- what that...

GIBSON: Which leaves you needing all 58 Democrats and two independents.

OBAMA: What that means is...

GIBSON: Every one of them.

OBAMA: Every single one of them.

GIBSON: Every single one.

OBAMA: Every single one of them. And...

GIBSON: Anyone can tell you, "If I back off, you have to do what I need you to do."

OBAMA: You know, I -- I spend a lot of time talking to individual senators.

GIBSON: Yes, you do.

OBAMA: And -- and it's not just on health care. I mean, there are -- health care is the most prominent example, but, you know, one of the...

GIBSON: But do you feel like they're holding you hostage on this?

OBAMA: Well, here's what I'll say. Each of them have very strong opinions.

GIBSON: Don't they ever. You think?

OBAMA: And -- and, you know, many of them, I think, sometimes feel that they've got a better idea than we do. We try to incorporate as many as possible. The problem is, each one of them may have ideas that are completely contrary to what the other senator wants.

And so there is a balancing act. But and one of the challenges that we as a country are going to have is that, for our system of government to work, for our deliberative democracy to work, for the Senate especially to work, because of all the arcane procedures that are involved, you have to have a sense that occasionally we're willing to rise above party. You've got to have a sense on the part of each individual senator that -- that every once in a while, we are...

GIBSON: You think there's 60 senators doing that?

OBAMA: Well, I think it's hard. And -- and -- and there's got to be a sense sometimes that we're willing to rise above our particular interests, our particular ideas in order to get things done. Right now, that culture has, I think, broken down over the last several years, and one of my jobs over the next three years is to try to see if we can revive that. But that's tougher than I would have liked.

GIBSON: But when you need every vote like this, and when senators can do this to you -- and those are my words, not yours -- a lot of people worry that what you're going to wind up with is hash. There's even some Democrats saying now we've got a bill that's so compromised that it's not worth signing.

OBAMA: Let me address that specific point. When I went before the joint session of Congress and talked about what I wanted to see on health care, I asked for some very specific things. I wanted to make sure that it was deficit-neutral. Now, according to the Congressional Budget Office analysis, not only is this deficit-neutral, but it actually reduces the deficit, something that somehow has gotten lost in the debate.

Number two, I said it needs to help reduce premiums and lower costs for families and businesses. And as I indicated before, every health economist that's out there says it does so.

Number three, I said that we have to make sure that insurance company abuses are reformed, you know, not being able to get health insurance because you've got a pre-existing condition, having a bunch of fine print so that when you get sick, suddenly you don't have coverage. We've got the most vigorous health insurance reforms in there.

And, number four, I want to make sure you had the people who did not have health care in this country and small businesses who couldn't get it for themselves or provide it to their employees, that they were able to get health care. Thirty million people, according to the Congressional Budget Office, will get health care if this passes.

Now, if you can tell me that those things are not worth it, then you and I have a very different opinion about -- about what the task is here. This will be the single most important piece of domestic legislation that's passed since Social Security. And I have confidence that we're going to pass it.

There's a reason why seven presidents and seven Congresses failed to get this done. It is really hard. But it is going to get done. And as a consequence, people who have health insurance are going to have more security with the health insurance that they've got and people who don't have health insurance are going to be able to get it.

And last point I'll make on this: If we don't pass it, here's the guarantee, that the people who are watching tonight, your premiums will go up, your employers are going to load up more costs on you. Potentially they're going to drop your coverage, because they just can't afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year. And the federal government will go bankrupt, because Medicare and Medicaid are on a trajectory that are unsustainable, and this actually provides us the best chance of starting to bend the cost curve on the government expenditures in Medicare and Medicaid.

So anybody who says that they are concerned about the deficit, concerned about debt, concerned about loading up taxes on future generations, you have to be supportive of this health care bill, because if we don't do this, nobody argues with the fact that health care costs are going to consume the entire federal budget.

GIBSON: Let me talk to you a little bit about deficit reduction, because that's something that's certainly going to loom very large for you in the next couple years. You're going to get a spending bill with 5,000 earmarks in it worth $4 billion, discretionary spending up 12 percent when inflation is essentially zero. How can you sign such a bill and be serious about deficit reduction?

OBAMA: Well, look, the -- keep in mind that some of the things that are in there are funding for unemployment insurance, veterans affairs, things that we -- are still part of the emergency situation that we are in. The costs -- everybody would acknowledge that the costs of this recession and just providing help to states and families and so forth has added to the deficit.

But people need to understand where our real debt and deficit comes from. It's not the trillion dollars of Recovery Act spending and, you know, the carryover of TARP that we inherited when we came in. It's actually the fact that we have a structural deficit. We take in 18 percent of gross domestic product in taxes, and we spend 23 percent.

So here's what we're going to have to do. I've been very clear -- and this will be reflected in my budget and my State of the Union address next year -- that trying to either raise taxes or cut spending next year would be the wrong thing to do for an economy that's still coming out of a recession and is still very fragile.

What we have to do is identify ways that, mid-term and long term, we are pulling the deficit down and reducing our debt. That has to be a priority. And what are the things that are required to do that? The main priorities are going to have to be dealing with Medicare and Medicaid, our health care costs, and that's why health care is so important. I think that we can reduce non-defense discretionary spending in a significant way. We've got to wind down this war in Iraq on a timely basis. I mean, there are going to be a host of tough decisions that we're going to have to make over the next year, and I'm prepared to make them.

Transcript: Charles Gibson Interviews President Obama (cont.)
GIBSON: And you've just given me a very good exposition on budgeting in Washington.

OBAMA: Right.

GIBSON: You know that. I know that.

OBAMA: Right.

GIBSON: The public is fixated on earmarks. They're fixated on discretionary spending.

OBAMA: I know.

GIBSON: Why not just say, "Congress, get those out of there, and I'll sign the budget, which is absolutely necessary"?

OBAMA: You know, there may come a point fairly soon in which we have to take that approach. I mean, this is part of the challenge of democracy, is that, you know, I have to deal with 535 members of Congress of both parties who may in the abstract say, "We hate government waste and government spending," but when it comes to that project in their district, they think it's absolutely vital.

And so we are trying to change a culture here. It is not something that is going to happen overnight. We have seen a reduction in earmarks, but, you know, let me take a very specific example. If I've got a defense bill that's presented to me, and defense funding is running out in three days, and I've got troops out there that I've got to make sure are equipped and we have planning for the deployment that's coming up, and somebody says to me, "You know what? I'm not going to vote for this defense bill unless I get this project in there," I've got...

GIBSON: You don't mean to say that they would say that to you, would you?

OBAMA: Well, I'm just saying that those are the decisions that you make. And you know, I think the public rightly sort of feels like, "Well, why would you tie those two things together?" Well, that's part of the legislative process that has evolved over time, and this is why, once again, what you hope for is that there are moments where people are able to rise above parochial interests or party interests to make decisions that are right for the country.

It's not happening enough. And, frankly, because a lot of these issues are complicated and cloudy and you've got all this cable chatter that's going on all the time, you know, it's not hard for members of Congress or any elected official to not act responsibly.

GIBSON: Final question. What do you have to do in the next three years to satisfy you, that you've had a successful, worthwhile presidency?

OBAMA: I've got to get, number one, the economy back on track, and I think that we have been successful in averting disaster, and, you know, you don't get a lot of credit for that, because nobody knows how bad it could have been, but what is absolutely true is, is that until people who are out there looking for work can find jobs, they are going to discount whatever progress we've made.

Economic growth was strong in the third quarter. We think it'll be good in the fourth quarter, as well, but job growth has not caught up. So my number-one priority over the next three years is to make sure that we're not only growing the economy in the aggregate, but people are getting hired, and they're able to support their families and their mortgages and sending their kids to college. That's my job number one.

Number two is making sure that Afghanistan is in a decent place so that, if I only serve one term, when I hand it off to the next president, they are on a trajectory in which Afghanistan is more stable, we are able to execute our strategies against Al Qaida, and we're drawing our troops down so that we don't have a perpetual occupation in Afghanistan.

I think number three is making sure that we implement health care effectively, as well as pass it, because this is going to be a big, difficult job. And if I can say at the end of my first term that, you know what, we are poised to deliver on the promise of health care after the legislation has passed, I think that'll be important.

Number four, moving us in a direction of clean energy so that our economy is not subject to the whims of what a bunch of oil-producing countries in the Middle East want. Not only is that critical for our economy, not only is that critical for our environment, but it's critical for our foreign policy, because the less reliant we are on petro-dollars -- or the less reliant we are on petroleum, the less we are feeding, I think, a sense that somehow we are inextricably tied to a region that is volatile, and it would free us up, in terms of our foreign policy, in really important ways over the long term.

So if I can get those things done over the next three years -- and that's a pretty big list -- I will feel really good. And, you know, if I get three out of four, then I'll still feel pretty good about myself.

GIBSON: Mr. President, thank you.

OBAMA: Charlie, let me say thank you to you for your extraordinary career, and you've always been a class act. It means a lot to be able to sit here and talk to you in your last week.

GIBSON: You're kind to say that. Thank you.

OBAMA: Appreciate it.