INTERVIEW TRANSCRIPT

C-SPAN’S “NEWSMAKERS”

Guest: Senator Judd Gregg (R-NH), Budget Committee Ranking Member

Reporters: Donna Smith, Reuters & Chris Frates, Politico

Moderator: C-SPAN

AIR DATE/TIME: SUNDAY, NOVEMBER 15, 2009 at 10 a.m. and 6 p.m. ET

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Reporters: Chris Frates, Donna Smith Donna Smith

SUSAN SWAIN: Newsmakers is pleased to welcome back Senator Judd Gregg of News Hampshire who’s joining us this morning from the New Hampshire Institute of Politics on the campus of St. Anselm’s in Manchester, New Hampshire. Senator Gregg is in his third term in the U.S. Senate. He serves as the senior republican on the budget committee. He’s also a member of the Senate HELP committee which is one of the two legislative committees working on healthcare legislation and a member of the appropriations health and human services subcommittee.

So Senator, you’re coming at this legislation from many different directions. We’re pleased to have you with us this week.

SENATOR JUDD GREGG: Well, Susan, thank you for putting me on. I appreciate the opportunity to talk with your listeners.

SWAIN: Let me introduce our two journalists, Donna Smith is a long time congressional correspondent for Reuters. Chris Frates is covering healthcare for Politico. Why don’t we start with you Donna?

DONNA SMITH: OK, Senator, we haven’t seen the Senate democratic bill yet.

SENATOR GREGG: Where is it? Where is it?

SMITH: Democrats are hoping…

SENATOR GREGG: Can you find it?

SMITH: …to at least start debate on it next week. And if – once the bill gets to the floor what will be the republican strategy? Will you be offering an alternative? Or will you just be going issue by issue with amendments?

SENATOR GREGG: Well, let’s start with the fact that we don’t have a bill. I mean it is pretty incredible when you think about it that the most important piece of legislation that I’m going to see in my career in government effecting 16 percent to 20 percent of our economy and every American in a very personal way is being written in the leader’s office with four or five members of the democratic party there but no press, you folks aren’t allowed and certainly no republicans.

And then it’s going to be brought out. It’s going to be brought to the floor. It’s being represented it’s going to be brought to the floor almost instantaneously. And we know the House bill is 2,000 pages. It cost a billion dollars a page. And we don’t know who big this will but I presume it will be in the 2000 page range. And you know there’s got to be time to take a look at this. And there has to be a time for the CBO to do a real score on it.

We understand from the information that’s been leaking out that Senator Reid has been sending sections of over to CBO to be scored but CBO really can’t do an effective score until they score the whole bill because in a bill this big with this much complication a lot of the parts are effected by the other part so how you score one part effects how the other part scores.

So this should be sitting out there for at least 72 hours at the minimum. It really should be there a week so the people can read the language and find out what’s in it.

What’s our strategy as republicans? We’re going to offer a series of amendments if we’re allowed that would basically address the bill, address health reform in a constructive way and be a positive effort at improving our health system without a massive increase in the size of government. You know the House bill scores when it’s fully implemented at $3 trillion of new government. That’s how much it costs. And without that type of spending and without a massive interference of the government in your and everybody else’s healthcare decisions. But we can improve the healthcare system by doing specific targeted things, I’d be happy to go through those if you want later in the show but basically that will be our approach. We’ll be amending it with specific proposals which will improve healthcare a little bit.

SWAIN: All right, Chris.

CHRIS FRATES: Senators, you have talked a lot about and the republicans have talked a lot about cost control and so have some of the moderate democrats. And I’m just wondering what specifically do you plan on offering to control the costs of whatever Senator Reid offers on the floor?

SENATOR GREGG: Well, we don’t know what he’s offering on the floor. We do know this that the House bill does not control cost. The bill that came out of the Kennedy committee does not control costs, and the bill that came out of finance does not control costs.

And, in fact, to quote David Walker who’s a fair arbiter on this. He’s the former Comptroller General of the United States he said that they actually have the opposite effect. They all significantly increase the out year curve. Instead of bending the curve down which is what we’ve heard we’d like to try to do which is what we would like to do and which was a condition of doing health reform all of these bills bend the healthcare curve up in the area of cost.

As I said, the House bill was fully implemented over a full 10 year period is a $3 trillion increase in cost. What can you do to address cost? Well, first off you don’t create a brand new entitlement that’s going to be extraordinarily expensive. We can’t afford that. We can’t afford the entitlements we have. They’re all headed towards insolvency, social security, Medicare specifically. Throwing in a new entitlement doesn’t make a whole lot of sense. That’s just going to add to the debt of our children.

So secondly, specifically things you can do in the healthcare arena that would assist in the cost issue, number one you could address torte reform. That CBO scores said is a $54 billion event ending abusive lawsuits or least controlling them the way Texas and California do. Ironically, the House bill goes in exactly the opposite direction it actually expands abusive – the availability of abusive health suits – law suits in the area of healthcare. I’ve made a proposal, for example, that would limit the abusive lawsuits relative to baby doctors so that more OB/GYNs could practice in rural areas. That was defeated in committee when we marked up the bill.

Initiatives in the area of ending or at least limiting abuse lawsuits would have a very significant effect on bending the out year healthcare costs.

Another thing that we could do is we could target the major disease groups that are causing healthcare problems. We know there are four or five disease groups that are basically the cause of most of the healthcare costs, obesity being number one, soon to be followed by Alzheimer’s. Let’s really focus on getting those disease groups under better control.

A third thing we can do, we can reward people for living healthy styles, actually reward them with dollars. Unfortunately, the law today doesn’t allow us to do very well in this area. And, in fact, regrettably, the House bill once again retrenches on this issue. I would propose that you expand the ability of employers to basically pay their employees, if they quit smoking you play your employee more. If an employee does – gets the tests they need, mammograms, colonoscopies you pay them more. If they live a healthier lifestyle where they start to lose weight you pay them more. Things like that which would significantly improve the healthcare system in this country.

A fourth thing we could do is to reward the provider groups, specifically doctors and hospital groups for providing quality and value rather than quantity. Today, we have a system that basically rewards quantity. So you get a lot of medicine going forward that we don’t really need but it’s just simply rewarded, it’s paid for so it gets undertaken. There are health groups in this country that have shown you can get better care at lower costs if you do it more on the quality side. And the groups are places like the Mayo Clinic, the Salt Lake City Group has done that. Pittsburgh Group is doing that. So you take those areas where healthcare is being delivered effectively with quality at lower costs and you basically replicate them across the country.

SWAIN: Senator, the politics of New Hampshire have been changing over the past decade and I’m wondering what you’re hearing from people as you’re traveling the state during this break?

SENATOR GREGG: Well, I’m hearing that people are really worried and they’re really actually fairly angry too. They’re angry about the fact that the government appears to be spending our children’s future away. You know most Americans here in New Hampshire and everywhere else have gone through some pretty trying financial times and they still are.

They’ve had to tighten their belts. They’ve had to make decisions. They’ve had to prioritize what they can spend their money on. They’ve got to be very careful about borrowing money. And yet, they look at the federal government and we’re just expanding at an unconscionable rate. We’re talking trillion deficits every year for the next 10 years. We’re talking taking the federal debt from 38 percent of GDP up to 80 percent of GDP. We’re talking about a new healthcare program which, as I’ve said a couple of times is going to add $3 trillion to new spending in the federal government. We’re talking about growing the government from 20 percent of our gross national product up to 26 percent of our gross national product under the Obama proposals.

And people recognize that this makes no sense. That you’re going to end up passing on to your kids something they can’t afford and they’re really worried about it. And there’s a fair amount of anger out there about it. People are really upset that the government is being so irresponsible with our kid’s future.

SMITH: Going over some of the list of things that you would do for healthcare reform, well they must have a cost. I mean presumably you would do this through government incentives to businesses and to care providers to take care of these things. Have you cost these things out? And do you democrats are wrong to try to move towards universal coverage and require everyone to obtain health insurance.

SENATOR GREGG: Actually, the four things I just listed and there are quite a few more I could list but I didn’t want to take up the whole show - don’t cost money. They actually save money. They would – some of them don’t score because we don’t really know in – how to score them under CBO rules but we know from experience that they would actually produce more effectively delivered cost service.

For example, rewarding quality versus quantity in the reimbursement area. There’s been a lot of studies done ironically here at Dartmouth College up in Hanover which is the leading center for studying how healthcare is delivered in this country which has pointed out that if you go in for an appendectomy, I use that as an example it may not be the right example, but if you go in for an appendectomy in Rochester, Minnesota, that appendectomy is going to cost you about 20 percent less than what it would cost you in let’s say Los Angeles or Miami but your outcomes are going to be 20 to 80 percent better, 20 to 50 percent better. And we know for a fact that that’s not a function of practicing better medicine in Rochester. It’s a function of the way they deliver medicine. In other words, they’re delivering the same type of medical care, they’re just doing it more effectively and they’re not over utilizing the system.

And so that can be addressed. The issue of rewarding people in – who are living healthier lifestyles that doesn’t cost the government anything. Companies like Safeway are trying to do that right now where they basically pay their employees a cash premium if they go out and have mammograms when they’re supposed to and colonoscopies when they’re supposed to and if they lose weight and if they stop smoking. But the problem is the federal law dis-incentivizes that. It says you can only pay a 20 percent premium advantage to people who live a healthier lifestyle. It should be at least 50 percent.

But the big labor unions are very resistant to having that change made. And, of course, in the abusive law suit area we know 30 percent of healthcare today is defensive healthcare. We know that that represents about a quarter-of-a-trillion dollars every year of spending which we could reduce. But we can’t change it because the trial lawyers have such a lock hold, hammer lock on the congress. There should be no reason why we shouldn’t have – follow the lead of states like Texas and California which have been very successful in this area and reduced abuse lawsuits. None of those things cost more money. They all save money.

SMITH: And to follow up, do you think the democrats are wrong then in trying to obtain health coverage for everyone and actually requiring people to obtain health insurance?

SENATOR GREGG: No. I think it’s a good idea to set up a system where you strongly encourage everybody to get health insurance. And my bill or my proposal does exactly that but it doesn’t do it by this massive expansion of an entitlement which creates huge costs to the government. And the reason this entitlement, this new entitlement where you’re going to basically cut Medicare to fund basically uninsured individuals and raise taxes to fund uninsured individuals, the reason it costs so much is because the insurance that’s being set up as the insurance that must be bought, is extremely high end insurance.

There are a lot of people in this country today and the biggest group being the people between the ages of 25 and 40 who opt out of insurance not because they can’t afford it, they opt out of it because they want to spend their discretionary money on something else. Those folks should have insurance so that if they have a serious accident or they get a healthcare event like cancer, they don’t end up costing the rest of us for their care.

The way you do that is you have a very simple catastrophic coverage plan which they should buy. And you say to them, it will be cheap because it’s just covering one area which is catastrophic coverage. Let me them self insure up to the catastrophic level. But let them have to have that catastrophic coverage. But what the bill out of the House did was it said you not only have to have that coverage, you have to all of these bells and whistles of all these different interest groups who want to get insurance – who want to get in under the insurance umbrella and have their procedures or their activities covered, whether it’s acupuncture or chiropractors, whoever it is. And so a very practical matter their policies are so expensive that you end up driving up all the overall costs dramatically and you don't have to do that.

SWAIN: Chris.

FRATES: Senator, I wanted to ask you, do you see the cost issue as a political landmine? And if so, how?

SENATOR GREGG: Well, I see the cost issue as at the essence of what is the biggest problem our nation has confronting us after the threat of the terrorists or the weapon of mass destruction attacking us. And that is the impending fiscal meltdown of our nation. We’re taking ourselves down a road to third class status as a nation.

You cannot grow the government from 20 percent to 26 percent of our GDP and pass all of the debt that that’s going to generate because no matter how much you raise taxes you can’t catch your tail when you get that big, on to our children. Because they can’t pay for those debts. I mean you get – let me try to put this in context. When the public debt which goes from 38 percent of GDP to 80 percent of GDP that essentially means that the debt will – the financing of that debt is going to exceed the cost of anything else in the government including military expenditures, national defense.

And, in fact, if we tried to get into European Union, for example, which we’re not trying to do but that’s a group of industrialized states who set certain standards for what a responsible government does, we could not get into the European Union beginning in about 2013 because our public debt would be too high. It would be over their 60 percent threshold.

And we’re seeing all ready, international statements from China, from other places that they’re worried about our debt and they’re the ones who buy the debt. And if they start to worry about our debt, what does that mean? Well, we’re going to have to raise the price in other words, in other words we’re going to have to raise the interest that we’re going to pay on that debt in order to get those folks to buy our debt. We’re also seeing these international rating agencies like Moody’s say well, gee, we don't know if you stay on this path which is unsustainable we may have to downgrade your debt.

All of this leads to an instability in our nation because the only two things you can do when debt gets so high that you can’t afford to pay it you basically have to inflate the economy which means you devalue the dollar and you put in place one of the cruelest taxes which is inflation or you raise tax levels so high that you reduce the productivity of the nation and it becomes a downward spiral where basically as productivity drops your revenues drop again.

So we’re on an unsustainable path. It’s that simple. And you shouldn’t aggravate that unsustainable path by adding another $3 trillion program on top of it.

SWAIN: Senator, can I just add this note in before you do it – we just learned before we started here from AP wire story that the White House has now told domestic agencies to assume that their budgets will be frozen or even cut by five percent as it signals a big push to take on the deficit next year. Do you have a reaction to that?

SENATOR GREGG: If it’s true, it’s great. I mean that’s one step that should absolutely occur. We should freeze discretionary spending. But as Willie Sutton said – and that would be good – but as Willie Sutton said when he was asked why do you rob banks, because that’s where the money is. The money is in entitlements. The money and the problem is in the fact that we’re facing a $60 trillion unfunded liability already without this new major healthcare entitlement being put on the books which is being proposed by the House and the Senate and the democratic leadership. Without that even on the books we all ready are short $60 trillion as we go forward.

So that’s – those are the accounts we have to face up to and address, but yes, if the administration comes forward with a discretionary freeze or five percent cut in discretionary spending I will strongly support that effort.

SWAIN: We have 10 minutes left. Sorry, Chris, go ahead.

FRATES: No, that’s OK. Senator, I just wanted to follow up and ask how do you translate that cost and deficit message into something for the elections in 2010? In other words how do republicans sell that to the voters?

SENATOR GREGG: Common sense. I mean people get it. You know as I said earlier people have been through this themselves. You know they’ve been trying to figure out how to make ends meet. Make the mortgage payment. Send the kids to college. They know that you can’t spend like this and run up the debt like this. I mean it’s just intuitive. And everybody knows it except for it appears the democratic leadership and the congress.

And so it’s – we almost don’t have to do anything to explain it. I mean I go out on the – around New Hampshire people come up to me and explain it to me. They keep coming up to me and saying, what are doing down there? Why are you spending all of this money we don’t have? What are you doing to our kids? This is not difficult to understand. I think it’s intuitive to the American culture that we don’t want to be a debtor nation. We don’t want to be a third class nation. We don’t want to have China basically owning all of our debt.

You know we appreciate the fact that they’re willing to buy it today but we don’t want to end up owing more to them than we can afford to pay back. And people understand that.

SMITH: Well, given your growing concerns about the debt and I believe Congress is about to raise the debt ceiling, do you think that the democrats will have to – will at some point have to scale back what they’re proposing on the healthcare reform? Or do you think that they’re going to be successful in getting pretty much well what they have proposed.

SENATOR GREGG: Well, ironically they’re going – they’re not scaling back. They’re actually being more expansive. Every time it moves somewhere it seems to pick up more baggage and expensive baggage and that’s because they’re trying to get votes and sometimes to get votes you have to create new programs and give people something they want in the area of spending. And so the House bill just picked up a huge amount of baggage. And now we are hearing that Harry Reid is shopping around a bill that basically says well to get your vote I’m willing to do this and that means more money being – more bags being thrown on the train and they’re all bags that require spending.

Are they going to get a bill? I presume so. I mean they’ve got super majorities in both Houses. They lost 39 democratic votes in the House but they were still able to pass it a lot of those folks they let take a walk I suspect. In the Senate they need 60 votes my guess is they’ll get them. The president has basically invested his political domestic policy future on this. It’s his number one item. He’s obviously put a tremendous amount of personal capital into this.

So yes, I think, a bill is going to pass. I don’t know how – what it’s going to end up being. I suspect what will pass the Senate will be much more benign than what passed the House and the area cost and the area of expansive government. I don’t think it will probably have a public plan but – because they need the 60 votes. But when they get to conference I think it’s going to move very hard to the left, become a very expensive bill, have a very robust public plan initiative in it that will lead to a single payer system in five to 10 years.

And they’ll bring that back out of conference and then they’ll just have one procedural vote to get passed unlike when they bring it initially across the floor the Senate where there will be multiple procedural votes, there will just be one procedural vote and they’ll need 60 votes. And then on final passage they’ll only need 51 votes and they can let some of their folks go and vote against the bill and still pass the bill.

So I think the scenario for passage if you’re looking at it is unfortunately fairly high for a fairly bad bill.

SWAIN: Five minutes. One last question from each.

FRATES: Sure. Senator, the democrats would argue though that this healthcare reform bill actually lowers the deficits and it’s wise to spend the money up front because then you lower the deficits in the back end, what’s your answer to that?

SENATOR GREGG: If you believe that, I’ll sell you a bridge in Brooklyn, in fact, I’ll sell you one in Oakland, it doesn’t work.

FRATES: You don’t believe COB?

SENATOR GREGG: You know that’s so absurd it’s not – CBO is given certain assumptions that they must work off of. One of the assumptions that they were given and this is classic was that they were going to have 10 years of revenues and six years of expenditures. In other words, they started the revenues on day one and the cuts to Medicare on day one but they don’t start the programs until year four and then they match them in a 10 year window. So you’ve got six years of expenditure matched against 10 years of spending cuts in Medicare and revenues. Well, of course, you’re going to end up balancing it in that scenario.

But if you look at it in the second 10 year block where it’s fully implemented and it’s a $3 trillion bill they cannot possibly generate the revenues they want to generate unless they’re going to cut Medicare by over $1 trillion. Now, you know and I know that that’s absurd. Nobody is going to cut Medicare in our Congress by over $1 trillion. I tried to get a Medicare adjustment which was fairly reasonable when I was chairman of the budget committee of $10 billion and was voted down by the Democratic Party and that was just to make people on the Part D premiums pay their full costs who were high end people like Warren Buffett pay the cost of their premium.

So this idea that there numbers on the revenue side and on the Medicare cut side are real is absurd on its face because we know we’re not going to end up with those reductions occurring. They’re just being put – they’re plugged numbers for the purposes of getting a better score. And the fact that you would match 10 years of revenues in spending cuts to four – to six years of expenditures and claim that you’re in balance is just totally dishonest.

SWAIN: Final question.

SMITH: OK I want to ask you about something that I believe you’ve been working with Senator – Senate Budget Committee Chairman Conrad with and that’s your deficit commission, a body that would, the way I understand it, make recommendations on how to reduce this enormous debt that you are worried about. Do you – and I believe it’s going to be – you’re planning to offer it soon on the Senate floor, do you think it will pass? And do the think the House would accept it?

SENATOR GREGG: Well, this is – I congratulate Senator Conrad as the Chairman of the Budget Committee for pursuing this initiative. I’m happy to be the primary sponsor with him. You know, we’ve come to the conclusion that the only way you’re going to be able to address these big entitlement questions is if everybody holds hands and jumps off the cliff together because it’s just politically not doable otherwise.

And the only way you can accomplish that is under a procedural process and the procedural process has to be what we call fast track where a group of people come together, who understand these issues, makes some suggestions as to how to make these accounts work such as social security and Medicare and our tax laws and then make those proposals to the congress. Congress must vote up and down without an amendment.

That’s the framework. So it’s absolutely bipartisan. It’s an absolutely fair proposal. Nobody gets gamed. And there has to be a vote and there has to be a super majority so there has to be overwhelmingly support for doing it.

We think that this is critical, if you’re going to get this out year issue of the insolvency of our country under control and corrected, and I’m hopeful that it will pass. I think we have a fairly good working group in the Senate which is very bipartisan. The House is a different problem. The speaker’s been very reticent and not supportive of the idea.

SWAIN: We do have two minutes. One more question.

FRATES: Sure. Senator, also just wanted to talk to you a little bit about how you see the democrats getting this bill done. The say they want to get it done by Christmas. Do they do reconciliation? Do they do it through conference? Do they single shot it? Ping pong it back and forth with a single ball? What procedural maneuvers do you think they’ll use to get – to meet their timelines?

SENATOR GREGG: Well, we don’t have much time but first off we don’t have a bill yet so I can’t really answer that question. When we get a bill I’ll have a better idea. But reconciliation doesn’t work very well on a big piece of legislation like that because the number of points of order against it are innumerable and would come out looking like Swiss cheese and you’d have very bad policy even if the initial policy – the initial policy would just be shot full of holes no matter whether it was good policy or not.

The issue of pingponging a possibility but I doubt it because I think what they’re really going to want to do is write this bill in conference. So I think what they’re going to do is figure out how to get a reasonably benign bill across the Senate floor with 60 votes, take it to conference, really put all of the hard stuff in it, the hard left stuff relative to the expansion of the government, relative to spending, relative to protecting the trial lawyers and all of that sort of stuff and then bring it out of conference and try to run it through the Senate on the single procedural vote and then on final passage do it with 51 votes. So that’s the game plan I suspect is what is being outlined here. But I can’t guarantee that because we haven't seen a bill.

SWAIN: Well, we’re out of time, Senator. Thanks to you and to St. Anselm’s for joining us for Newsmakers this week and we’ll see you back in Washington next week. I appreciate your time.

SENATOR GREGG: I appreciate your time.

SWAIN: Thank you. We return to Donna Smith of Reuters and Chris Frates of Politico to put in context what we heard from Senator Judd Gregg. First of all, Donna Smith, the – as the Senator described it the bill might arrive on the floor in very short order, is that a political risk to the democratic leadership given all of the concerns we hear about the bill being constructed in private and not having 72 hours for the public to digest it before hand.

What are the risks for them versus the rewards of getting the legislation passed?

SMITH: Well, we had former President Clinton up on the Hill talking to the democrats, the senate democrats and his message to them was just do it. That they face more political risk not doing it than they would doing what they want to do, getting it in place. And then if there are some glitches fixing it later. And I think that’s the calculation democrats have made is that it’s – they have to get it done. I was – Senator Gregg said that he thought that they would get it done and it wasn’t going to be a small bill. It was going to be a big bill because they obviously are trying to win some votes and this is an opportunity for everybody to get their project in there.

SWAIN: Yes, we actually should have said when we were talking about the beginning of his biography Senator Gregg is up for election this year. And it’s also interesting I was reflecting and listening to his level of frustration and concern that he flirted early on in the administration with actually leaving the Senate to join the administration. So I’m wondering what that period of time looks to him in the rearview mirror.

What did you learn about the process that is going to follow forward and what the republicans chance for shaping the debate or shaping the outcome might be?

FRATES: Well, I think that the republicans are going to have a real hard time shaping the actual bill when it comes to the floor. I think they’re all for amendments. There’s still a question about how many amendments Harry Reid will actually allow the republicans to offer because there’s a sense among democrats that republican strategy here is to stall it out. And if they can stall it for long enough then this bill eventually will die under its own weight and it will crush the democrats because of the inability of them to move this big piece of legislation.

So I’m not sure that they have a real good shot particularly when most amendments need 60 votes to pass and they only have 40 to pass and have much say in crafting it. And that’s also by political design. You know the republicans have set themselves up as an opposition. They believe that this is going to be a good issue for them to run on in 2010 and most of them lock step have refused kind of the entrees of democrats early on to shape it in a way that there could be some real bipartisan support for it.

SWAIN: And at the same time that congress is working on this legislation the president is making his large decision about Afghanistan and increased troop deployments which come with multi billion dollar price tags as well.

So do the two issues for congress have any connection if there’s a rise in concern about the deficit in debt?

SMITH: Well, the deficit is definitely a concern. And then when you put that in the context of the bail out of Wall Street, there is real anger there about one the bail out and two the cost of it and people still are struggling to get – to find jobs. And yes this is all adding up and the Afghanistan decision is going to be very, very important for the President and for democrats and for the public.

SWAIN: Well, if its adding up it’s adding up in which party’s favor?

SMITH: At this point, I would argue that the republicans have been very successful raising these points on the deficit of the debt and the cost of this bill and what it’s going to mean for individuals in terms of their healthcare. I think they’ve been quite successful in breaking through with their message. I think democrats were less successful in breaking through with their message on why they need it.

But if you talk to the business community and any independent business person who is trying to provide healthcare for workers and their families they know there’s a problem there and they want something done whether or not the democratic plan is going to answer their questions – answer the needs still remains to be seem when it’s implemented. But there is a very definite need out there for healthcare reform particularly in the small business community. And then the large companies too say we cannot continue to pay this bill. Something has to be done.

SWAIN: Facing double digit increases…

SMITH: Double digit increases in premiums, yes.

SWAIN: You agree?

FRATES: I think I do agree with what Donna said. And I think what’s interesting about what republicans have done is they’ve messaged it so well that the deficit is starting to appear as an area of concern for Americans on polls. I mean generally in most elections people don’t think about the deficit. It’s kind of an abstract number that a lot of people really don’t put much kind of pocket book issue to but in a recession when they feel like when they look at Afghanistan like you pointed out when they look at the car companies being taken over, when they look at the Wall Street bank bailouts there’s just a growing sense and republicans have harnessed this that the government is taking over too much of our economy. They’re putting us in debt that we’re not going to be able to pay. And that message is going to resonate with folks who look at their bank accounts and say well I’ve had a cut back because my spouse has lost their job but the government continues to spend wildly.

SWAIN: Well, as we close here you indicated that the bill might be on the Senate floor very soon what information can you tell people who have been following it?

SMITH: Well, we’re waiting for Senator Majority Leader Harry Reid to unveil the version of the bill that he will take to the floor. Now we’ve had committee action on bills. And we sort of know the broad outlines of what to expect but we are waiting final cost estimates from the Congressional Budget Office and the final – well the legislation that he’ll take to the floor won’t be the legislation that comes off the floor. It will get changed once it’s on the floor.

SWAIN: As early as this coming week?

SMITH: It’s possible. That’s their goal but they’ve missed so many deadlines that it remains to be seen.

SWAIN: Well, thanks to both of you for being here this week and for questioning the Senator.

FRATES: Thank you.

SMITH: Thank you.

END