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Special Report

'Special Report' Panel on Blue Dogs Coming Around on Health Care Bill

This is a rush transcript of "Special Report With Bret Baier" from July 29, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. STENY HOYER, (D-MD) HOUSE MAJORITY LEADER: I'm hopeful that this will move the bill forward. That's our intent, to move the bill forward, and to provide for a context in which we can get health care reform done when we come back after the August break.

WALT MINNICK, (D-ID) Blue Dog COALITION: Well, we all try to represent what we think is best for the country. And I would say the majority of the Blue Dogs think that this bill is not the best bill we can get, and we'd like to keep trying, would like to talk to our constituents, hopefully come up with a bill closer to what the Senate Finance Committee is considering.

(END VIDEO CLIP)

BRET BAIER, "SPECIAL REPORT" HOST: All this talk of a deal today, and Blue Dog Democrats signing on to a big deal in the Energy and Commerce Committee. It came down basically to four moderate House Democrats signing onto a compromise to cut the cost of the overall bill in that one committee by $100 billion, also, to make a few other changes.

But the House is not going to vote on anything until after the August recess.

Here is what one of the Blue Dogs, a member of the 52-member Blue Dog coalition said, "The 52-member Blue Dog coalition has not taken a group position on the draft health care legislation that is working through the committee process. Today's announcement signifies that the committee process is moving forward. The committee will work it's will, but the broader coalition has not ratified any agreements related to the draft legislation."

So what about this big deal and all the talk about it today? Let's bring in our panel, Fred Barnes, Executive Editor of "The Weekly Standard," Nina Easton, Washington Bureau Chief of "Fortune" magazine, and Mort Kondracke, Executive Editor of "Roll Call."

Mort, we talked about all the different versions up on Capitol Hill. This is one of them in the Energy and Commerce Committee. Explain for the viewers what this deal was and how big of a deal it is.

MORT KONDRAKE, EXECUTIVE EDITOR, "ROLL CALL": I think it's a big deal in that probably now you can vote on a bill out of the Energy and Commerce Committee. So in a sense, this is moving the process along.

However, there is loads of trouble ahead. I mean, as you pointed out, the entire Blue Dog coalition, 52 members, has not endorsed this bill. There are a lot of objections to it.

And a bigger coalition in the House, the progressive caucus, 82 members, is mad at any kind of compromise that does not have a Medicare-like public option in it, an option that pays Medicare rates, which is designed to kill the private insurance industry.

And this is unacceptable so far to most of the Blue Dogs. It's utterly unacceptable to the Senate Finance Committee, to all Republicans, and somehow Obama is going to have to merge all these ideas together, because it's going to have to be him that's brokering the thing, and it's going to be enormously difficult.

BAIER: Quickly on the process. There are three bills in the House, two in the Senate. Most people in Washington look at the Senate Finance Committee as the possibility for any bipartisan compromise that comes out for health care reform, and so far they don't have a bill yet either, Nina.

NINA EASTON, WASHINGTON BUREAU CHIEF, "FORTUNE" MAGAZINE: But at least they are including Republicans.

This deal in this House committee, which is a deal, but it's not a done deal, even in the committee, I mean, they canceled a markup, which is a drafting legislation session this afternoon. The Democrats are back behind closed doors. They've ordered dinner in, as we speak, and Republicans are still shut out of the process. And as Mort suggested, they don't have problems just with Blue Dogs. They have problems also with the left is raising concerns about this.

The other question is these Blue Dogs say they have saved $100 billion. We haven't seen the details of that yet. But what they have done is sort of like a constituent service.

They've actually raised the cost of the bill by protecting payments to rural hospitals, which tend to be in the Blue Dog districts, rural hospitals, rural hospitals, rural providers. That's what they really wanted out of this, and that's what they got.

Now that's not a cost savings, though. So it's unclear where they're getting that cost savings from.

But, again, I think the real action is still going to be in the Senate simply because they're moving forward on this co-op plan that has probably more likelihood of passing.

BAIER: Fred?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": Some of us are old enough to remember the magical savings like the $100 billion. Mort remembers, in Stockman's budgets for President Reagan, remember, the asterisk? These will be the cuts we'll tell you about later when we find them. And of course, they never materialized, as I'm sure this $100 billion wouldn't materialize either.

I think the most important thing was that they put off a vote in the House until after the recess.

Now, they're going to — here's what has to happen. President Obama and Democrats in favor of some sort of reform bill like this are going to have to change public opinion, because it is running rapidly in the other direction. As polls show — I know you have some polls.

BAIER: Yes, let's put up the Gallup poll, the effect new health care reform will have on your personal medical care — no change, 29 percent, 34 percent in Gallup say it will worsen it.

BARNES: And other polls, whether the Fox poll, the Rasmussen poll, or other polls, show that even a greater percentage of the American people think it will actually worsen their care. In other words, Obama care will make their care expensive, their taxes will go up, and the care will be worse.

This is what happened back in 1994 with Clinton care, same thing. And it's when you start discussing all the parts, and people don't like most of them, because we know, and are reminded again by the ABC/"Washington Post" poll this week that showed that the vast majority of Americans, nearly 90 percent, are pretty satisfied with the health insurance they have. Obviously some of the uninsured people aren't, but most Americans are. And to convince them, as Democrats have to do over the recess, that they need this huge change in their health care and their health insurance is going to be very difficult.

BAIER: Mort, Wendell Goler did a good job of lying out what a he cooperative is and how it will work. It is much like a credit union in some ways. What about the battle between the public option, federal government run, and the cooperatives that apparently are gaining steam in the Senate finance committee?

KONDRACKE: As I said before, the liberals do not like anything but a Medicare-style plan, government run, that sets prices at the Medicare rate.

BAIER: But the White House steps in and says what?

KONDRACKE: Right now, the White House is saying that they might go along with the co-op idea.

Now, the details of the co-op idea, and how it's going to work and whether there's going to be government subsidies on it, all of that has yet to be determined. Is it private? Is it government run? Is it government overseeing it? All of those details have yet to be determined.

EASTON: That's right. And those details, and that will determine the kind of support. I mean, you have people like Senator Schumer who say, ok, a co-op, but it should be government run, government subsidized kind of like a Fannie Mae, Freddie Mac model.

BARNES: What a plan!

EASTON: Exactly. I don't think you will get many Republicans onboard.

What Republicans want and probably the insurance industry would let go through without a huge battle is something more homegrown, run by members, not controlled by the government.

And so even on the co-op issue, you've got a division.

BAIER: OK. It used to be the biggest fear out there was foreign terrorists coming to America. Well, now, some recent stories appear to be the other way around. The panel will discuss this when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NAPOLITANO: I think one of the things we need to do is communicate that, unfortunately, the terrorist threat is not just focused on New York City or Washington, D.C., or a few other urban areas.

Indeed, if you look at the last couple of weeks, arrests have been made in places like Minneapolis and North Carolina.

So I think better education about the breadth of the threat and how it can be carried out is important.

(END VIDEO CLIP)

BAIER: In recent weeks, nine American citizens have been charged and indicted on plots involving foreign targets. Terrorist training, apparently inside the U.S. in numerous parts throughout the country.

What about this phenomena and how the administration is addressing it? We're back with our panel — Fred?

BARNES: Well, they have adopted pretty much the Bush policies. I think Janet Napolitano tried to make them sound a little different, but they're the same thing, and good for her.

At least she's now started using the word terrorism. I mean, you counted that she mentioned 26 times in her speech today, which is good, because that's what the threat is. It is a terror threat.

You know, some of these cases are incredibly surprising. The one in North Carolina, where somebody's neighbors thought he couldn't possibly be a terrorist.

Of course, these people, when they sign up with Al Qaeda, they don't put a sign on their front yard saying "Al Qaeda, welcome here," or anything like that.

My worry is the recruiting that's being done in prisons. And we have seen that. Remember when the guy was arrested from shooting an army recruiter in Little Rock? He was someone who had been recruited in prison.

And then these five or six New Yorkers who were arrested a month or so ago recruited in prison again. And to allow that kind of thing to happen in prison, Islamic extremists turning prisoners into Islamic extremists, has to be stopped.

BAIER: Nina?

EASTON: So I guess Dick Cheney is not paranoid, that there actually is a terrorist threat out there? I think that's what she was suggesting today.

Homeland Security Secretary Napolitano, she went out of her way not to mention terrorism in her first prepared remarks to Congress. This time she, as you said, used it many times. This whole speech about the threat of terrorism, this concern about domestic home gone terrorists has been around.

There is this guy, the case that really frightens me is this guy, it's well done on your Web site, the "Weekly Standard" Web site, a good summary of this, but this guy Dennis out of Long Island who was basically — he was able to get into the top ranks of Al Qaeda, which doesn't let — you know, thinks everybody is a CIA spy, isn't going to let an American get in that easily.

So how did he do it? He did it through friends in New York who were able to connect him with Al Qaeda sources, which means that there is not only possibly sleeper cells in the U.S., there are recruiting networks in the U.S.

And he actually gave details of a Long Island railroad to Al Qaeda and confessed to all sorts of activities when he was over in Pakistan

BAIER: Mort?

KONDRACKE: It makes you wonder why the CIA can't do the same thing and infiltrate if they are really sophisticated. Maybe they have. Let's hope they have.

But I'm astounded, frankly, that there hasn't been more of this, and that it isn't more sophisticated than it is, and that it hasn't actually pulled something off.

I mean, there are tens of thousands of people in prison subject to recruitment, subject to training. They are disaffected people. They're tough, they're hardened, and, you know, could easily be sent off to Afghanistan for further weapons training or cyber-training, or chemical weapons training, and we haven't had any of that so far.

We have got these nine cases, rather isolated cases, people in various parts of the country, not very sophisticated in what they were planning to do, you know. It makes you wonder whether there is something worse lying out there.

Or it could be, and I hope it is, that the FBI is keeping good tabs on them, and they're just lying low, but we know who they are. I mean, there is just a lot we don't know.

BAIER: Did you sense a change in tone in Janet Napolitano's —

KONDRACKE: Oh, yes.

BAIER: Drastically?

KONDRACKE: I mean, they are taking this seriously now. There is no joking about it.

LIASSON: And the other thing that I thought was very noteworthy was she was basically saying let's spy on our neighbors. Well, if George Bush had said that, or when they did say that, it was suggested that — the ACLU went nuts. But it's OK coming from this administration.

BARNES: Yes, when the Bush people said — I think there was a sign on the 14th Street bridge when you drive in in the morning saying "If you see anything unusual, let us know."

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