This is a rush transcript from "On the Record," April 13, 2010. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Now, finally, you get answers from Nebraska senator Ben Nelson about the special $100 million deal Nebraska received in the December Senate health care bill. Did Senator Nelson made a shady backroom deal, or is he being hammered unfairly? We report, you decide.
VAN SUSTEREN: Senator, nice to see you, sir. And thank you for sitting down with us.
SEN. BEN NELSON, D-NEB.: My pleasure. Thank you.
VAN SUSTEREN: Is this the first television interview on this whole issue of the Nebraska -- what Nebraska got in the health care bill originally in the Senate bill?
NELSON: I believe it is. I think I've been asked in the hallway a time or two a question, but this is the first more comprehensive approach that I've had.
VAN SUSTEREN: All right. Take me back to the fall, last fall, is that when the negotiation discussion about the health care bill was going on in full force. As I understand it, you were concerned about primarily two things. One was the abortion issue, whether there would be federal funding. And the other is what would be the cost to the state of Nebraska, having been a governor.
NELSON: The major thing that I was trying to get handled was that there would be no public option, no government-run insurance operation as part of this health care plan.
Yes, I was concerned about the cost to Nebraska. I was concerned about that before the governor raised the issue. It wasn't just the cost to Nebraska. It was the cost to the states for continuing unfunded or underfunded federal mandates to pay for the Medicaid costs to the states that shared, not equally, but shared between the government, federal government and state government in every case.
VAN SUSTEREN: So fast forward to about December 16th, you received a letter from your governor in which he was distressed by the fact there would be this unfunded mandate as it related to Medicaid and it would impose a burden on Nebraska.
NELSON: He wrote me a letter and said in reviewing the current Senate bill, it appears while the increased state cost for the initial three years would be covered, the program quickly becomes a substantial unfunded Medicaid mandate.
He goes on to say the state of Nebraska cannot afford an unfunded mandate and uncontrolled spending of this magnitude. I agreed with him. So I wrote back I think the same day and said I agree, and that's why I'm pursuing -- I agree. That's why I continue to work to change it.
I proposed the Senate built be modified to include an opt-in mechanism to allow states to avoid issues you've raised, opt-in, opt-out, which would give the states the opportunity to decide whether or not they wanted to continue to provide that extended Medicaid coverage that was required.
In other words, states could decide. If they didn't want to do it, they wouldn't have the unfunded federal mandate.
VAN SUSTEREN: So your correspondence with the governor back and forth that day, there was no suggestion that Nebraska gets $100 million? It was simply in or out and other states in or out.
NELSON: Right. He said his agency, the Department of Health and Human Services completed an analysis, and they said that the Nebraska Medicaid program would cumulatively grow by $2.5 billion over a period of time. That's a substantial amount of money, quite a bit more than $100 million.
The point is, what I wanted to do was make sure Nebraska and all other states would have that opportunity to opt-in, or preferably opt-out.
VAN SUSTEREN: The way the program was being discussed at that time and ultimately decided about is that until the year 2017, the federal government picked up the freight, the additional cost. After the year 2017 is when this unfunded mandate began to hit states.
VAN SUSTEREN: Now, when was the first time you heard or anyone suggested that Nebraska get a $100 million, I don't want to use the word deal, that sounds insulting, but a $100 million provision?
NELSON: It was probably during the decisions about how we would take care of getting an opt-out. The staff for the committees concluded they -- since they didn't have a Congressional Budget Office scoring to know what the cost was going to be for the federal government that they couldn't put in an opt-in, opt-out provision at that time.
So they line-itemed something for Nebraska as an indicator that we knew we would go back and then make sure it would apply to everybody once we had the numbers, the calculation of the numbers.
VAN SUSTEREN: Here's the problem with that is that there was no rush. You could have gotten -- I don't mean you, but the Democratic members could have gotten a CBO score on everybody being included in the program.
NELSON: Not within a very short period of time.
VAN SUSTEREN: What was your time limit?
NELSON: It wasn't my timeframe to determine. It was the others that established the timeframe. The leadership established the timeframe.
VAN SUSTEREN: So that was Senate Majority Leader Harry Reid said you have to vote on this by such and such a date, and so in order to vote on such and such date we are not going to do CBO scoring on all these unfunded mandates.
NELSON: We wouldn't have it in time.
VAN SUSTEREN: That's the thing I don't understand. The time constraint was an artificial one.
NELSON: Not one that I set, absolutely.
VAN SUSTEREN: You agree it was artificial.
NELSON: They are always artificial. There were several timeframes. Everything going to be done before the summer, end of the summer, in the fall. They are always artificial.
But if you don't have a timeframe, you don't have a deadline, sometimes it just continues to go on. So I hardly ever criticize people for establishing drop dead dates and timeframes for things to get done. It wasn't for me to question that.
What I wanted to do was make certain that ultimately all states would get the same thing. And as it turns out, they do. Under the reconciliation package, they all get the same thing.
VAN SUSTEREN: I guess what I'm -- I'm asking you this, though. I understand what your goal was. Sometimes between the 16th and 24th of December you have this problem, the Senate Democrats want your vote. They need your vote. And you say it is the unfunded mandate.
They say OK, Senator Nelson, we are going to do $100 million -- in your expectation according to what you say is that every state was going to get it, but they couldn't do every state by December 24th when there was the vote because they hadn't scored it.
The problem I'm having to understand is that so the American people knew it was being voted on the people didn't think they cheated and you got a special deal is that December 24th date was artificial an almost to the point of being unfair because it didn't have to happen.
NELSON: From my standpoint, the Medicaid provision, while important, was way down my list of priorities. The number one priority was to make certain that there was no government-run insurance operation. When I got the assurance on that I was more inclined to vote for the final bill whatever the deadline was.
The second was adequate language to make hurt no federal funds were paid for elective abortions. Those were the two conditions for my support. The Medicaid was important, but it was not a condition for my support.
VAN SUSTEREN: Next much more with Senator Ben Nelson. We ask him point blank -- whose idea was the special $100 million provision for Nebraska? Senator Nelson's answer is next.
GRETA VAN SUSTEREN, FOX NEWS HOST: Continuing with Senator Ben Nelson in his first national TV interview since controversy exploded about the so-called "Cornhusker Kickback."
VAN SUSTEREN: Who came up with the idea that $100 million would go to Nebraska? Was that your idea?
NELSON: I think it was the idea -- someone's idea to put it in.
VAN SUSTEREN: Someone?
NELSON: There were various people involved at various times. This was one percent of the discussion I had.
VAN SUSTEREN: If you look at December 19th, there's an article in "Roll Call" by David Brucker during the 6 p.m. hour four Republicans asked for unanimous consent that the manager's amendment to the Democratic health care package currently be set aside to consider a proposal to extend the deal that you secured for Nebraska to other states and they wanted it for California, Colorado, Montana, and Virginia and finance chair Senator Max Baucus manning the floor for the majority quickly objected to the GOP. So the Republicans at that time were trying to get extended --
NELSON: I didn't have a problem with that. It was not a problem for me to have it extended. It was apparently a problem with the people trying to put the numbers together. They didn't have the CBO scoring and so they didn't know what the number was to put in.
And "Politico" jumped out on it December 19th, about 7:56 their timeframe. calling it the "Cornhusker Kickback" because that's what they say the GOP is calling it. It got all the attention Saturday, but other senators lined up for deals as Harry Reid corralled the last few votes for the health reform package.
It got wrapped up with other requirements that some of my colleagues had for their support. This was not a requirement for my support.
VAN SUSTEREN: I understand your view. Let me give that you one, because I know on December 29th you had you an op-ed piece in which you said were you trying to seek it for all the states. I got that, and maybe some think it was an alibi, I don't know.
But the fact is there is one aspect -- did Senator Harry Reid think it was the way to "buy your vote" was to give you the $100 million?
NELSON: No, there was no quit pro quo, there was -- no quid pro quo, no effort at all to buy my vote. I had requirements. The requirements were no government run plan, no federal exchange, national exchange, and adequate language to deal with abortion. Those were requirements. But nobody was buying any votes.
VAN SUSTEREN: I don't understand whose idea was it, the $100 million?
NELSON: The $100 million was put in as a block number.
VAN SUSTEREN: By whom?
NELSON: Well, I didn't draw the bill so I don't know the answer.
VAN SUSTEREN: Whose idea was it when were you in the room with the discussions?
NELSON: I don't know there was any idea about a particular number in that discussion.
VAN SUSTEREN: But it did result and other considerations as well, the abortion issue, but it did result in your voting. Without it would you have voted for the bill?
NELSON: Yes. Yes, I would have.
VAN SUSTEREN: So you didn't immediate this $100 million?
VAN SUSTEREN: It made no difference?
NELSON: It made no difference. I think it was important, good policy not to strap the states once again with an unfunded federal mandate, and I always object to them as I have ever since I've been here and eight years while I was governor. It wouldn't have changed my vote.
The thing is I participated in discussions. This Medicaid provision was one percent of the time. So it was so small by comparison to the other two things that it didn't get this kind of attention that it has caused for us to be talking about it.
VAN SUSTEREN: How do you convince the American people of that? Most people thought it looked shabby, what happened.
NELSON: That ties in with other arrangements for a hospital here, for Medicaid coverage elsewhere.
VAN SUSTEREN: You were the hold-out. The American people are trying to figure without is going on. On December 19th or so, you have a bunch of Republicans trying to get the same deal for a number of states and they get shot down by the Democratic Party.
Then you have a vote, and it's something that hasn't been scored and they throw yours in any way. December 24th wasn't really the drop dead date and wasn't going to change anybody's life if they wait until mid January.
And then the beginning of January you get $500,000 in ads from the DNC. You're not up until 2012, and poor Senator Blanche Lincoln down in Arkansas is hanging by a thread and she doesn't get any of it.
NELSON: She wasn't getting clobbered for being the 60th vote, number one. Number two, there wasn't something attributed to her state such as what was attributed to mine, which was completely out of context. And there was a decision made to come in and provide some support.
VAN SUSTEREN: But two things could have happened. Senator Harry Reid could have given an interview or you could have given an interview on camera. Instead you have the op-ed on December 29th, which could be construed by some as an alibi having now run knew this firestorm.
NELSON: I didn't need an alibi. By December the 22nd, I went to the floor and explained in detail that this was --
VAN SUSTEREN: I've got it right here -- "not a special deal for Nebraska. It is in fact an opportunity to get rid of an unfunded federal mandate for all the states. Let me repeat, for all states. There is nothing special about it and it is fair."
NELSON: That's on the 22nd, before the vote on the 24th.
VAN SUSTEREN: So where were you with the Republicans on December 19th?
NELSON: I wasn't on the floor, so I didn't see that.
VAN SUSTEREN: You didn't know the Republicans were trying to get that?
VAN SUSTEREN: That may have been a political maneuver.
NELSON: It was a political maneuver. But I would have been supportive of it.
VAN SUSTEREN: So you never heard about the Republicans trying to get it?
NELSON: I don't ever remember hearing about them attempting to do that. That doesn't mean it didn't cross my desk at some point, but I do not recall that they did that. But even so, that was not a genuine interest in doing in. It was just something thrown out there.
VAN SUSTEREN: The Republicans -- if the Democrats were so much in favor of doing all the states, and if Nebraska was just a place marker, then why would Senator Max Baucus, a Democrat just let this fail, this GOP move political or not, when they seek to get all the states funded?
NELSON: You would have to ask him to find out why. My sense is two things. One is they were blocking anything and everything on the floor from getting on. That happens all the time.
VAN SUSTEREN: That's something you guys wanted, you said.
NELSON: Look, not necessarily on the floor that way, number one.
Number two, I doubt that they had the number. I still don't note state by state breakdown, but I will soon. I know the block number $35 billion now. We had no idea at that time whether it was $35 billion or $50 billion or $10 billion.
VAN SUSTEREN: Which in some ways rattles the American people, because you are voting on something you don't know the number, it hasn't been scored, and you vote on something. We have scored what we are voting on but we know we are going to add this later.
NELSON: You only add it later when you know the number. I'm not going to attack the entire system back there, but there are some things about the system I don't particularly care for. And the scoring and having numbers I do care for. And I do happen to believe that you need to have the numbers if you are going to vote on something.
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