This is a rush transcript from "On the Record," March 18, 2010. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Over and over, you've heard about the so-called "Louisiana Purchase." Is Senator Mary Landrieu being hammered fairly or unfairly? We report, you decide. Louisiana senator Mary Landrieu goes "On the Record."
VAN SUSTEREN: The so-called "Louisiana Purchase" -- I take it you don't use that reference to the provision in the health care reform bill that...
SEN. MARY LANDRIEU, D - LA.: Absolutely -- absolutely not!
VAN SUSTEREN: You don't like that?
LANDRIEU: Well, not only do I not like it, but it's really a mischaracterization of what happened.
VAN SUSTEREN: OK, what happened?
LANDRIEU: It is not a special deal for me. It is a fair deal for the people of Louisiana. I'll tell you what happened -- the levees broke. The hurricane hit and the levees broke. And our personal income went up 40 percent, not down, but up 40 percent.
VAN SUSTEREN: Personal income?
LANDRIEU: Personal income went up according to the federal government 40 percent. It's never happened in the history of the country. It is false and it's not right.
VAN SUSTEREN: Why did it go up?
LANDRIEU: Because all the extra money that poured into the state. And so the federal government claims we are 40 percent richer. It is laughable, a joke. And so we fixed it, did not fix it secretly. John McCain says it was secret because he didn't know. Just because it is unknown to him doesn't mean it is secret.
VAN SUSTEREN: You say that the income went up 40 percent. How does it go up? Because of all the jobs? I know your unemployment is about two percent points below the national average. I don't understand how the income goes up is a reason to get something in this bill?
LANDRIEU: Because when the income goes up 40 percent, our Medicaid reimbursement drops. And the income that was raised by 40 percent was not because we had 40 percent more business or 40 percent of the people were really richer. It is just because of the insurance money that poured in, the federal funding that poured in, and it arbitrarily and artificially increased our per capita income. It has happen in Hawaii as well.
So I publicly announced two weeks before Barack Obama got sworn in and a year ago, publicly announced that we were going to fix this. The governor and I, my Republican governor stood with me at a public news conference and explained why we needed it fix. We make no apologies for it, and it wasn't a special deal.
VAN SUSTEREN: Is it every single person increased 40 percent? That sounds like a better deal than before. Some are saying people are 40 percent richer. Now I think why do you need the money? Explain it to me.
LANDRIEU: OK, let me try. I don't believe and know that the people of our state are not 40 percent richer. That's the deal. The federal government is saying we are. It's a joke.
VAN SUSTEREN: You are not 40 percent richer?
LANDRIEU: The federal government is saying we are. According to the federal government's formula, we are 40 percent richer. That is why the governor and I stood shoulder to shoulder to tell the federal government that is incorrect. We are not 40 percent richer.
And we tried to change the law so that we could continue to pay the same amount for Medicaid that we paid for the last 10 years.
VAN SUSTEREN: This doesn't change your contribution. It is an arbitrary matrix?
LANDRIEU: Exactly. That's one reason we've been unfairly criticized. We have always paid in Louisiana 70 cents on every dollar for Medicaid and the federal government has paid thirty. We want to continue to do that.
But if we wouldn't have changed this provision which I championed and I'm proud to champion, we would have had to pay 60 percent and the federal government would have paid 40 -- or the reverse. We would have paid more, in other words.
VAN SUSTEREN: Your unemployment level in December is about 2.2 percent lower than the national average, which is good. And I also noticed that your foreclosure rate is lower than most states which is good, which suggests that the economy in Louisiana is on an upward trend. So that's why I'm wondering why this 40 percent, why you need -- you know why you need this help.
LANDRIEU: Our foreclosure rate is lower that's because we have 60,000 blighted homes in the city of New Orleans and surrounding areas. Our foreclosure rate is lower because we didn't get foreclosed on by credit crunch, we got foreclosed on by a flood.
VAN SUSTEREN: And that's not counted? OK.
LANDRIEU: Yes. And so foreclosures don't really mean anything us to because we foreclosed on by the storm.
So the bottom line is, we never asked for a special provision. We never did it secretly. I was done in a bipartisan way. Our legislature passed a public resolution. Our governor signed a letter asking us to fix it, and I did. The fix is only that Louisiana will continue to pay the same amount we've been paying for the last 10 years.
VAN SUSTEREN: So without this, and if the Senate health care bill passed and became law, your state would take a dive financially --
LANDRIEU: Our state would have paid more for Medicaid than it would have before. What I'm saying is it is not fair to ask us to pay more because the people in our state aren't actually 40 percent richer. The numbers say we are, but if you ask anybody in Louisiana we didn't get richer after the storms. We either stayed the same or got poorer.
VAN SUSTEREN: You pay the same amount before and after the -- the same amount before and after the Senate bill.
LANDRIEU: That's right.
VAN SUSTEREN: Would it had been wiser to have this run separately and not part of the Senate bill, politically smarter? Not for you personally, but getting this whole health care bill passed.
LANDRIEU: No, I don't think so, and I'll tell you why, even though some people want to criticize it because they don't understand it and won't take the time to understand and they are using it for their own political purposes to tell me I should not put on a health care amendment on a health care bill, is kind of a joke.
VAN SUSTEREN: Then are you not in favor -- if you that I should be included in because it is a health care bill, should it not be included into the health care cost, the doctor fix of $250 billion, $350 billion on the side of trying to figure out what the cost is. Shouldn't that be in the health care bill?
LANDRIEU: It could be.
VAN SUSTEREN: Could be? Should be.
LANDRIEU: It could be. But in the health care bill, there should be amendments to a health care bill. This is an amendment to a health care bill which, again, was announced two weeks before Obama was ever sworn in as president, was announced in three separate press conferences with myself and the governor, passed a resolution by our legislature.
Again, it might have been unknown to a few senators, but just because it was unknown to them doesn't moon it was secret. It was done in a very public way. I'm quite proud of asking for this to be changed, because if it wasn't the people of Louisiana would unfairly have to pay about $350 million to $400 million more for the same Medicaid program.
VAN SUSTEREN: The deal that Nebraska got, I hesitate to call it the cornhusker deal, because sometimes it is flippant and can be insulting to people, but what is your thought on what Senator Ben Nelson secured for his state, because it has caused a lot of upheaval and a lot of people are unhappy about it.
LANDRIEU: I think Senator Nelson has to speak for himself.
VAN SUSTEREN: I know, but what do you think about it? Is it different?
LANDRIEU: It is different in the sense that our provision for Louisiana was caused by the flood. It wasn't caused because I was trying to jockey my vote for the bill. It was caused because of a storm.
And the provision that we put in for Louisiana, a public effort, will also help state of Hawaii because for some reason the state of Hawaii had some kind of catastrophic disaster and their income arbitrarily went up. So my amendment was never fashioned just to help Louisiana.
VAN SUSTEREN: Next, more with Senator Landrieu. And are Democrats pulling a fast one leaving hundreds of billions off the price tag of the health care bill? We're going to ask, next.
VAN SUSTEREN: More with Senator Mary Landrieu and whether we can afford the health care bill.
VAN SUSTEREN: One of the things that has caught my attention and many people's attention is the fact that the way we pay for it is the Cadillac tax. And it starts going into effect in 2018 in order to finance this bill.
It appears from the outside that if this is a good idea, this tax, if we need to pay for this, maybe we should do it now. Instead the Democratic Party pushes off to 2018 when even if the president serves a second term he will be long gone.
LANDRIEU: I agree with you, because I supported that tax going into effect now. I think it is one of the most important things we can do to get the cost of health care down. The moderate Democrats feel strongly about it.
But you know what, we don't control the votes around here. We have a say, we have an influence --
VAN SUSTEREN: You pretty much control -- you may not control the content, but the agenda.
LANDRIEU: But we pushed very hard for that on our side. But this is a democracy. It is not a dictatorship. So there are lots of people that have views. And I wish we could have done that a little differently, but that's the way it came out.
VAN SUSTEREN: One thing not included the so-called doctor fix, which is $250 billion to $350 billion depending on who gives you the number. That is being excluded from the number.
Would it not be the right thing to do to include it in the numbers so the American people can see what this is going to cost? They may think it is a good or bad idea, not saying whether it is good or bad, why not put it in the number?
LANDRIEU: I'll tell you why now. Even though technically it would be according to the book the thing to do, if we put that $300 billion dollars in we have to take $300 billion of something else out. What is going to come out is help for the elderly.
VAN SUSTEREN: Why? Maybe you should change the cap.
LANDRIEU: Maybe we should, but then the bill gets quite large.
VAN SUSTEREN: And it's hard to sell it.
LANDRIEU: You either have to raise that in additional taxes or cut services to either the elderly who are trying to get help with their prescription drugs or eliminate preventive care. And it is not necessarily because technically those cuts aren't even going to happen.
VAN SUSTEREN: But explain to me. And maybe I'm ignorant, but I don't understand how -- if we're going to have to pay this number anyway, the doctor fix --
LANDRIEU: But you are not going to pay it, because we never -- we say -- this is what we did a couple years ago. And I really wasn't here when this started, but I think I know a little about it. We said to save money in health care we're going to cut doctors and hospitals 10 percent every year. We've never implemented that. We've never implemented it.
VAN SUSTEREN: We've never cut the doctors?
LANDRIEU: We've never cut them regularly 10 percent or 20 percent every year because it's unsustainable. That's the way we used to fix health care, we cut hospitals and doctors. That's not right. We don't need to cut hospitals and doctors. We need to change the system.
And that's what this health care bill attempts to do, change the incentives. So everyone is trying their best to deliver better quality health care for lower costs so we don't have to keep cutting hospitals and doctors again.
VAN SUSTEREN: So you're telling me that if we do this health care bill according to the Democratic plan this so-called doctor fix will be irrelevant because doctors won't need to be fixed?
LANDRIEU: Because doctors shouldn't be cut, because the cost of health care will come down because of streamlining processes that we put in.
VAN SUSTEREN: The Republicans tell me they are in favor of low cost health insurance, health insurance for people with preexisting problems. What the Republicans tell me is they believe rather than this sort of huge revision or huge overhaul is that we do it step-by-step so essentially we can see where we are and what is happening along the way.
They say they are not opposed to it. They say that your party is unwilling to listen and want to just use your power and do as you feel.
LANDRIEU: I would say two things. One, when they were in power they didn't do it. When they were in power they didn't spend two weeks on health care. All they did was give tax cuts to people that make over a million dollars. That's what they spent all their time talking about.
Number two, Barack Obama won this election, John McCain didn't. And there are consequences of winning. Democrats promised the people of this country we would provide the same or similar insurance that the members of Congress have, and that's what we are doing.
VAN SUSTEREN: But he also promised transparency and no special deals, and we get this special deal to the pharmaceutical industry last June behind closed doors at the White House, and then we have the deal with Nebraska, I understand Louisiana, deal with Nebraska, a special interest, the state of Nebraska to get Senator Ben Nelson's vote. And then we have the union deal in early January.
So he may have won the election and he's delivering on his promise, but there are other promises which many people relied upon which is how we're going to achieve these goals.
LANDRIEU: Those are disappointing aspects, and you have pointed out three that are disappointing. But the union deal is out. But the Nebraska deal has been pushed to everyone. And the Louisiana deal has been fly explained and will stand in the light of day.
VAN SUSTEREN: But it would have been in except for the Republican raising hell. And when they were raising hell, they were suddenly called the "party of no" by the Democrats because they were objecting --
LANDRIEU: We called them the "party of no" way before, because they said no many, many times before the Nebraska.
But we need to get through this health care piece as soon as we can and get on. This will be a jobs' creator as well. But we really need to get on to an energy and jobs creation bill, and I'm excited about that.
And I think both parties made a lot of mistakes in the health care debate. I don't want to see us make the same mistake in the energy debate. We have such an exciting opportunity, and I hope that we can do it in a bipartisan way.
(END VIDEOTAPE)Content and Programming Copyright 2010 Fox News Network, Inc. Copyright 2010 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.