Transcript: Sens. Dodd, Grassley on 'FNS'

The following is a rush transcript of the June 14, 2009, edition of "FOX News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: The debate over health care really got going this week. It involves almost 20 percent of the economy, and it will affect every one of us.

We've brought in two men at the center of the debate, Senator Chris Dodd who, along with Ted Kennedy, has drafted the leading Democratic plan, and Senator Charles Grassley, the top Republican on the committee which will propose taxes to pay for health care reform.

Gentlemen, President Obama called for $300 billion in new spending cuts for Medicare and Medicaid yesterday. He now says he's identified ways to pay for a $950 billion health care reform plan, with two-thirds of it coming from savings.

First question to you, Senator Grassley. Do you think the president's spending cuts are realistic as well as his estimate of the overall cost?

SEN. CHARLES GRASSLEY, R-IOWA: I have not studied them to know if they're realistic. There's a lot of things coming out of the White House that can't be scored by Congressional Budget Office, and that's what really counts.

There is a lot of waste in government-run programs generally, and a lot of waste and fraud and misuse of money in Medicare and Medicaid that can be saved. But right now, I could not put a figure on that amount of money.

But there is some savings there that can be made and ought to be made, whether or not we are doing things for health care reform or not.

Only one caveat I would give you — in rural America, from Indiana over to the Northwest and from Kansas to Canada, if everybody practiced medicine in the rest of the country like we do there, we'd save about one- third of Medicare.

So I'm going to be looking at the president's suggestions to make sure that it doesn't make things worse in rural America, where — in Iowa, reimbursements are so low we have a hard time making sure that we can recruit doctors to come to our state.

WALLACE: Senator Dodd, an awful lot of health care experts say that the total cost of health care reform is more likely to be about $1.5 trillion, 50 percent greater than the president's estimate.

And they also say that these hundreds of billions of dollars in spending cuts he's identified are so flimsy that, as Senator Grassley said, Congress' own budget office can't put on a number to them.

SEN. CHRIS DODD, D-CONN.: Well, first of all, Chris, this is going to be a patient- centered program we're talking about. The health care system is in crisis in our country. It's too profit-driven. It's too bureaucratic. It's too inaccessible. It's too complicated.

And clearly, this is a major issue both in terms of patient care as well as economic issues. The president's identified some $300 billion. I agree with what Chuck has said. We need to look at that, obviously. That's a major responsibility of the Finance Committee. We put $654 billion in the budget specifically to deal with health care costs over the next 10 years.

The Institute of Medicine, Chris, identified in a very valid study that there are about a third of the tests or assessments that are being conducted that, frankly, we could do away with, which would save about a third of health care costs. That's some $700 billion.

And then prevention — if we're able to really, as Chuck and I and Mike Enzi and Senator Kennedy really believe — Tom Harken — that prevention could save a tremendous amount (inaudible) Steve Burd, who's the CEO of Safeway, the other day testified before our Health Committee.

He said something dramatic the other day, Chris. He said for every pound that a person would lose who's obese, there's a $50 savings per year in premium cost.

So if we deal with smoking issues, we deal with obesity, we deal with the cardiovascular issues as well as diabetes, the four chronic illnesses that cost 75 percent of health care — really have a wellness program — there are tremendous savings through prevention programs.

So between what's there in Medicare, what we can do with wasted tests and surveys being done — or assessments, rather, as well as in the prevention area, I think we can reach that target that will come somewhere in the area of a trillion dollars to a trillion, 200 billion over the next 10 years.

WALLACE: Gentlemen, let's address some of the big controversies in this debate. And let's start, first of all, with mandates.

Senator Grassley, what's wrong with requiring individuals and companies to pay for health insurance so that all the rest of us don't have to pick up the tab for the uninsured?

GRASSLEY: And you're probably picking up 1,000 — some estimates — $1,800 on your premiums for people that don't have health insurance because of the expensive use of emergency rooms, as an example.

There isn't anything wrong with it, except some people look at it as an infringement upon individual freedom. But when it comes to states requiring it for automobile insurance, the principle then ought to lie the same way for health insurance, because everybody has some health insurance costs, and if you aren't insured, there's no free lunch. Somebody else is paying for it.

So I think individual mandates are more apt to be accepted by a vast majority of people in Congress than an employer mandate would be, as an example.

And with that goes the portability of the insurance from one employer to another so you don't — you don't have to be tied to your job.

But there is a very important issue here, and that is that we consider that there are some people who can afford their own health insurance but decide not to buy it because they want to pay it out of pocket. Should you require those people to do it?

I believe that there is a bipartisan consensus to have individual mandates.

WALLACE: Senator Dodd, let me ask you about one aspect of the so- called Kennedy-Dodd plan. And let's put up the language on the screen.

This is going to get a little complicated, folks, but bear with me here.

The eligible individual involved is not required to pay — now we're going to get to the subordinate clause — in the case of an individual with a modified adjusted gross income that does not exceed 500 percent of the poverty line for a family of the size involved. The individual is not required to pay an amount that exceeds 10 percent of such individual's income.

Now, that's pretty complicated, Senator Dodd, but as I understand it, under your plan, a family of four making as much as $110,000 a year would be eligible for a taxpayer subsidy.

DODD: Well, what we're talking about here — and let me, first of all, thank Chuck for his recent comments there. And by the way, the first thing we always say about health care that — and I think all of us say this. We should say it. If you like the plan you have, you ought to be able to keep that plan. If you like your doctor, you like your insurance company, you like your hospital — the last thing you want to be doing is telling people they have to change what they like having.

Secondly is choice. People ought to have the right to make their own choices about the doctor they want, the hospital they want to be in. This is about fixing the problems that are wrong and sustaining and building upon the things that are working well.

Now, clearly, as Chuck just pointed out, when you start talking about individuals here in a mandate — and I think he's right about this, that you have to include that if you're going to make this work at all, then making it possible for people actually to meet those targets — now, the 500 percent of poverty is a number that we've put out there.

But clearly, there's some negotiation about that as well. But you need to have people to be able to support that.

WALLACE: Do you think that a family of four that's making $110,000 a year should have part of their health insurance tab picked up by the taxpayers?

DODD: Well, that number may be high.

GRASSLEY: Chris?

DODD: But nonetheless, that's part of the negotiation.

Yeah, Chuck, and you can jump in on this, if you want, as well.

We're working on these numbers. In fact, we spent all weekend this weekend, Chris, my staff and — that is, the Kennedy staff, I should say, Ted's staff and Mike Enzi's staff and others — working on some of these issues as we approach next week as well.

WALLACE: Let me bring in another big sticking point.

GRASSLEY: Chris, that's...

WALLACE: Senator Grassley, I'll let you answer, but let me bring up another point as well, and this may be perhaps the biggest sticking point, and that's the president's insistence — and it's also in the Dodd-Kennedy plan — on a government insurance plan to compete with private insurers.

Senator Grassley, why is — first of all, why is that such a concern? And do you think that the Senate can pass a government public insurance plan?

GRASSLEY: Let's go back to what Chris was talking about, what you had on the board there — 500 percent. For most of us, even a lot of Democrats, that's got to be a non-starter for the simple reason that we went through that debate even at 400 percent on the Children's Health Insurance Program. We can't afford that. It's not good policy. And we're not going to go in that direction.

In regard to your question is — you know, it's funny how this business of having a public option — in other words, the 350 insurance companies need some sort of competition. You know, I wish I would hear that from the Democrats that Medicare and Medicaid ought to have some competition, because that's a government-run program.

And you know what you do? You've got the government interfering in the practice of medicine, and we're reimbursing doctors 83 percent of costs and hospitals about 79 percent of costs.

And a little bit of competition like we have in Part D prescription drugs, where we thought originally the program by now would cost about $74 billion a year — it ends up only costing $44 billion a year.

WALLACE: Well, let — let — I don't want to get — I don't want to get too far...

GRASSLEY: That's competition. But in regard to yours...

WALLACE: I don't want to get too far...

GRASSLEY: Go ahead, I'm sorry.

WALLACE: ... into the weeds here.

Let me, if I may, Senator Dodd, ask you — because the president keeps talking about wanting compromise, and there are two possible deals out there.

One is the idea that the public plan could be a fallback, that it only kicks in if private health insurance doesn't work, doesn't clean up and doesn't become more competitive and lower costs, and the other is the idea, instead of a public health insurance plan, of cooperatives that would be organized and operated by the members themselves.

Are those possible compromises you could support instead of a public health insurance option?

DODD: Well, we'll see. And there are other ideas as well. Jack Reed of Rhode Island is proposing an idea. There are other thoughts out there. You've mentioned a couple of them here. This is — we're talking about even a nonprofit idea as well.

The last thing we want — we're not talking about a subsidized government plan. Chris, the reality is this. Premium costs have gone up 86 percent the last 10 years — in my state of Connecticut, up 42 percent in the last six years.

If we don't deal with cost issues here — this is a major factor. We talk about the uninsured in the country. We have — we have millions of people who are insured but can't afford the escalating costs of their premiums.

We're looking potentially at 50 percent of people's gross income paying premiums, health care premiums, by the year 2040. We need to get our arms around this and reduce these costs.

And so having some competition out there is not a bad idea, in my view, in this area. And whether or not it's a government process or a nonprofit or a cooperative, this is exactly what Chuck and Max Baucus, Mike Enzi, other members of the committee are talking about.

But clearly, it's too profit-driven in many ways that are causing this health care issue to see costs escalate at the rate they are. Senator Kennedy has dedicated four decades of his life. I'm merely a designated hitter for him at this point while he's struggling with his own cancer. But he has worked for four decades on this.

We're sitting down and talking with each other. This needs to be a bipartisan plan. Chuck Grassley has dedicated a strong part of his life to that bipartisanship. I agree with him about that. Max Baucus does. The Democrats do. We're working very hard to come to some agreement on this.

WALLACE: Let me — let me move on, if I can, gentlemen, because there's one other big issue...

DODD: Yeah.

WALLACE: ... and that is the issue of taxes.

Senator Grassley, will your Senate Finance Committee propose a tax on health care benefits? And would that hit people making less than $250,000 a year?

GRASSLEY: The answer is we could, but it's going to take the president of the United States, who made a big deal out of McCain so- called increasing taxes — and the McCain plan was a very good plan, but the president drove it into the ground, won the election.

It looks like he's looking at doing similar to what McCain wanted to do, and I think for the benefit of making this bipartisan, presidential leadership in this area would be very good based upon the tune of the last campaign.

There is another reason, though, for dealing with this, and that is at what level should we be subsidizing through tax credits the health insurance.

And we — it seems to me that we ought to take an average of the nation and decide that we're going to subsidize through the tax code health insurance for everybody at that level and not subsidize above another certain level.

That does two things. It takes some inflation out of health care, and it also raises some money.

WALLACE: So what you're basically saying — and I want to move on, because we're beginning to run out of time. What you're basically saying, Senator Grassley, is — and some people have said the number should be $13,000 — if your insurance plan is worth $13,000, it's tax-free. Anything above that would get taxed.

Senator Dodd, would you vote for a tax on health benefits? You're shaking your head already. No?

DODD: No, this is — this is unnecessary, in my view, and I feel very strongly about this, as many do as well.

I mean, the idea that you're going to have people out there that are struggling to make ends meet today, they're falling further and further behind with wages, people losing jobs, losing homes — to turn around and say, "You basically have no change in your health care plan, and by the way, we're going to tax you now for those benefits" — we can actually pay for this in the ways that I've suggested — the $654 billion that's allocated already, the $300 billion in savings we get out of Medicare.

The third of the savings are going to occur by doing away with unnecessary tests and exams, getting a prevention program that really works so that we'd reduce those — that 75 percent of cost. The idea of talking about taxing benefits at a time people are overwhelmed I think is a very bad idea.

WALLACE: All right. Gentlemen, I've got about two minutes left, and I want to ask you each about a question — because you've both been involved in controversies recently.

Senator Grassley, you have apparently discovered Twitter, and I want to put up a recent tweet by you, if I may. "Pres Obama while u sightseeing in Paris u said 'time to deliver in health care.' When you are a 'hammer' u think everything is NAIL. I'm no NAIL."

Senator Grassley, is that senatorial?

GRASSLEY: Yeah, very senatorial, because — you know why? We've had dialogue with this president since January the 20th on a program to get a bill to the floor on July — for July, and we're still on that timetable.

And the president, to say that we ought to deliver it, made it look like Congress wasn't working the very weekend that we were working Saturday and Sunday in Washington to keep on schedule while he was sightseeing. He didn't need to say that. It didn't contribute to it. It was a cheap shot.

WALLACE: Senator Dodd, you released an ethics disclosure form on Friday that indicates that your wife — and we should say that she was involved in this before she married you — but she sits on the board...

DODD: Thank you.

WALLACE: ... of four health care companies and that last year she received hundreds of thousands of dollars in salary and stock options.

Is that a conflict of interest for a senator like you, who is one of the point men in health care reform?

DODD: Well, I'm glad you pointed out she was a highly professional woman when I married her 10 years ago and deeply involved.

It's somewhat offensive, by the way. We don't hear these questions being raised about the — about the male spouses of female senators, in a sense. It's offensive to my wife that you'd be even talking about it.

These companies are research companies. They're not involved at all. She never lobbies in Congress, never been up petitioning on their behalf at all — a highly professional woman, highly skilled, and she deserves to have a career, particularly when we hired, in fact, an ethics lawyer to make sure that these boards she serves on would in no way pose any kind of conflict whatsoever with my job in the Senate.

WALLACE: So she will not step down from those boards.

DODD: No, there's no reason to. They're not companies that are affected. We've been through that. She's — this is a — this is a professional person.

WALLACE: Senator Dodd, Senator Grassley, I want to thank you both for talking with us and, obviously, explaining some of these key issues at stake in this debate.

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