Cadillac Tax: 'Strictly Power Politics' in Health Care Reform?

This is a rush transcript from "On the Record," March 1, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: And it's now time for another field trip. Earlier, we went to Capitol Hill and Republican senator Chuck Grassley went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Senator, nice to see you, sir.

SEN. CHUCK GRASSLEY, R - IOWA: Always glad to be with you. Thank you.

VAN SUSTEREN: Now, I know this was not your idea, but I'm curious if you can explain to me the Cadillac tax, the tax on these high-priced insurance -- health insurance programs. It doesn't set in until 2018 under the president's proposal. If it's a good idea, why not do it now?

GRASSLEY: Oh, it was delay so that the unions so would get a big deal from the Democrats in the Senate or something that the Democrats -- the unions put pressure on the Democrats not even to have it, but the Democrats needed the revenue so they wanted to tax it.

VAN SUSTEREN: Well, the tax, though -- I mean, the fact that it doesn't happen for -- I mean, the president will be out. Even if he has two terms, he'll be out. I mean, everybody's long gone. People who serve two years, even six years, long gone. So I mean, are we being tricked, basically?

GRASSLEY: Can I put it in a little bigger context...

VAN SUSTEREN: Sure.

GRASSLEY: ... to answer your question?

VAN SUSTEREN: Sure.

GRASSLEY: You know, we just had to be in session Christmas Eve 2009 to pass a bill that doesn't take effect until 2014, or the provisions you're talking about don't take effect until 2018. So you get back to a basic question. Why did we have to hurry up to get a bill passed on Christmas Eve on a partisan basis, when we could have worked on it and gotten something bipartisan that would have been a little more reasonable and -- and -- because we had plenty of time. It doesn't take effect until 2014. But I -- I make a joke out of it, but there's some truth to it. You know, we had to be in session Christmas Eve because (ph) we hadn't been in session Christmas Eve since 1895.

VAN SUSTEREN: All right, this tax -- does it equally apply to everybody who has a Cadillac plan, or is it only for -- are unions the only ones exempted until...

GRASSLEY: You can have people that live side by side. Some are union and some are not union, and they're going to be treated differently. That's the way the bill passed the House of Representatives.

VAN SUSTEREN: All right...

GRASSLEY: No, that's the way the bill passed the Senate.

VAN SUSTEREN: The Senate.

GRASSLEY: I'm sorry.

VAN SUSTEREN: All right. Here's what I don't -- in one Washington Post article -- I was trying to figure out if this is right -- it says that the tax exempts union plans and government workers until 2018. Does it not exempt the rest of us who might have that?

GRASSLEY: No, it does not.

VAN SUSTEREN: So it just -- the only ones who get this special deal are the unions and the government workers?

GRASSLEY: Yes.

VAN SUSTEREN: Until 2018?

GRASSLEY: Yes. Now, that's the way it passed the Senate Christmas Eve. Now, the president has proposed that it treat all exactly the same.

VAN SUSTEREN: How did the Senate decide that government workers get a deal and everyone else didn't? I mean, we'll set aside the unions for a second. But in the Senate, why -- why did the government workers get a special deal?

GRASSLEY: Well, listen, it's not right. It's not right. But you know, it's strictly power politics, the power of government unions and the power of private sector unions with the Democrat Party. And you got to remember that this was a partisan bill. This is not a bipartisan bill where maybe you'd get some moderation of these points of view. But it was strictly a power play.

VAN SUSTEREN: So at least the president's bill, whether you like it or not, although it does push off to the 2018 -- at least it includes everybody on Cadillac plans, not just government workers and unions getting the special deals (INAUDIBLE) special deals pushed off to 2018.

GRASSLEY: Well, that's absolutely right. Yes.

VAN SUSTEREN: What do you think about the sort of the tax implications of the bill? I mean, are everyone else's taxes going up or just those with the Cadillac plans?

GRASSLEY: No, everybody's taxes are going up. This is one of those instances where when they say that they have a revenue-neutral bill -- let me tell you how that game is played here in Washington. The common sense of the Midwest would not justify this. You have tax increases right now, but you don't have this program go into effect until 2014. So you have 10 years of taxes and five or six years of expenditure. Well, you can balance almost anything that way. That's the gimmicks that are behind this bill to show that it's revenue-neutral.

But if you do like the Congressional Budget Office normally does, looks ahead 10 years, and you start doing this at 2014 and look ahead to the years 2024, you're going to come out with a $2.5 trillion bill that's not balanced.

VAN SUSTEREN: All right. I assume because you're a member of the minority party that you're not wild about this reconciliation idea.

GRASSLEY: Listen, they don't need to use reconciliation because you know right this very minute, the House of Representatives could convene and pass the Senate bill by a majority vote, just a majority vote, not a super-majority in the House of Representatives, and it could go to the president right now. So they don't need to use reconciliation if they're talking about getting a bill passed by 51 votes, a mere majority. It's already passed the Senate. Just let the House pass it if they want to get a health care bill right now.

VAN SUSTEREN: That's never going to happen. The House doesn't like the Senate bill.

GRASSLEY: Well, then what are they going to do? They're going to play games? You've heard this, haven't you, that they're going to let the Senate bill sit in the House of Representatives until they've used reconciliation, which they can get done with 51 votes to pass a bill by reconciliation, amending a bill that's in the House that hasn't even gotten to the Senate! We have used reconciliation to amend a bill that hasn't already been law.

VAN SUSTEREN: Are you distinguishing this from what went on with, for instance, the Welfare bill? Because that was the -- that was passed by reconciliation.

GRASSLEY: Well, we're distinguishing it two ways. One, I just said they're going to use reconciliation to fix up a bill that hasn't even been sent to the president yet. That's never been done before. And the second thing that's very significant about this, different than any other reconciliation you can talk about, is that this is a massive restructuring of one sixth of our entire economy!

When you do something that massive and affecting life and death with 300 million Americans, it seems to me it ought to be done on a broad bipartisan basis and use -- not use gimmicks. Do you know, using reconciliation is the ultimate of backroom dealing. And that's why the public has turned against this bill because it's been done in secret, instead of the transparency that the president promised.

VAN SUSTEREN: Thank you sir.

(END VIDEOTAPE)

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