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Special Report

Health Care Waiver on the Menu

This is a rush transcript from "Special Report," October 7, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The waivers are about ensuring and protecting the coverage that people have until there are better options available to them in 2014.

JOSEPH ANTOS, HEALTH CARE EXPERT: These 30 companies are the companies that are reasonably well organized. In other words, they read the Wall Street Journal.

But there are literally thousands of very small companies where nobody has time to read the Wall Street Journal.   They didn't realize what’s going to happen to their insurance coverage and they don't realize there is even the possibility of a waiver.

(END VIDEO CLIP)

BRET BAIER, HOST OF “SPECIAL REPORT”: Waivers issued for 30 companies, one union, the United Federation of Teachers Union. As you see, this is the environment in which the healthcare law is being received -- all voters, 56 percent to repeal, Democrats 23 percent.

These waivers essentially allow the companies, these 30 organizations, for one year to not be mandated to provide healthcare insurance for all their employees.

What about this? What does it say about the healthcare law and the politics surrounding it? Let's bring in our panel tonight, Steve Hayes, senior writer for the Weekly Standard, Juan Williams, news analyst for National Public Radio, and we welcome columnist Peter Wehner.

Steve, let's start with you.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I think this certainly smells like politics, right? Less than a month before the election you had this big story in the Wall Street Journal last week about McDonald's potentially having to stop providing health insurance for all sorts of hourly workers who are on these mini-med plans that allow them to pay in and get a low level of healthcare insurance.

Now you’ve got these waivers granted. The White House said that they granted the McDonald's waiver last week, and now you have these 30 waivers.  Essentially, I think what the White House wanted to avoid is a big story about all sorts of people right before the election, minimum wage people, low wage earners, being thrown out, not having health insurance, after making promises for 18 months that this is going to cover precisely those people.

And part of it is a timing thing in terms of the rest of the plan not kicking in into 2014, but it's also I think a more significant problem.  This is where you have this abstract theory that might sound great in classrooms at Harvard meeting the market realities, and this is what happens.

BAIER: The biggest single waiver is the teachers' union, Juan, and this United Federation of Teachers, 351,000 instructors in New York City schools.

Here is what the federation released. "We have 13,000 new members because of federal legislation, and rather than automatically raising payments to providers have asked for a waiver while we see if we have additional costs that would make such payments necessary."

Unions including this one were big supporters of the president's push for healthcare reform, yet now they're getting a waiver.

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: It's them, like 30 some companies getting waivers in addition, with the biggest going to the union. I think this is really evidence of the tremendous fly back or blowback coming from the insurance companies.

They’re the ones saying we don't want to cover people and give coverage like the mini-med plan that McDonald's offers because all of a sudden the cap will be raised on how much an individual is allowed to spend on medical coverage, or is able to claim from the insurance company before they have to start to spend their own money. And that’s going to cost the insurance companies more money.

The insurance companies are fighting hard here Bret.  They are fighting, playing hardball because they are trying to push public opinion against any kind of healthcare reform because it's going to cost them money.

BAIER: But these businesses are coming to the reality of what this law and the regulations are doing --

WILLIAMS: Businesses are coming to the reality, what the insurance companies saying to them, they will pull our coverage. You can't get it from us, that they have no option. And Steve is exactly right then politically the Obama's administration response is, oh, my gosh, we don't want to have this vulnerability exploited by our opponents.

BAIER: Peter?

PETER WEHNER, COLUMNIST: Steve said it smells like politics. I think it smells like a disaster because what they are saying with this is when you’re issuing a waiver just weeks after a huge domestic program went into effect and just weeks before an election, it means that something has gone profoundly wrong.

And well I think the waiver is a good idea, what it means is that people are going to have to bow before the federal government to try and get these waivers. This is precisely what people predicted would happen.

And what you are seeing on a whole range of issues from the premiums to bending the cost-curve down to other things is what Obama promised and what the reality are colliding. It will hurt him a great deal and it’s going to hurt the Democrats in 26 days.

HAYES: And the people who win in this are the people most politically connected. So I think in a sense it takes what might have been a well-intended, broad program, broad program of reform, and turns it on its head.

Because instead you have people like the unions and the mega- corporations who are able to hire lobbyists and get in front of these politicians and get in front of Kathleen Sebelius, the new empress of healthcare, and make their case.

You’re basically hoping for the good will of a bureaucrat, in this case a very powerful bureaucrat. But you also could come out on the other side. Remember, it was just a month ago when insurance companies said that they were going to have to raise premiums, and Kathleen Sebelius sent a tartly worded letter to insurance companies and basically threatened them, said states have new resources to go after insurance companies that are using raised premiums to scare their consumers. That's crazy.

BAIER: Juan, you’re putting the onus on the insurance companies, but isn't at it fact that we don't know exactly what all of these regulations are going to be from this 2,500 page law?

WILLIAMS: That's correct. There's no getting away from it. And there is no getting away from the fact--and this is a key point of discontent among many who are upset with the health care reform bill is it didn't go far enough. They say why isn't it in place now? Why don't I see some benefits now? All I see is the potential for loosing insurance coverage, for premiums going up. That's hurting Obama.

At the same time, I think its politics, and I hope that you see it. When you see insurance companies refusing to cover sick children or an insurance company saying they can't afford to spend 85 percent -- so they get 15 percent profit but won't spend 85 percent helping people who are sick, I just think the insurance companies are rich and powerful and they're beating Obama with politics right now.

BAIER: So you're saying Secretary Sebelius should threaten them?

WILLIAMS: I think you should say be responsible corporate citizen.

HAYES: And we decide what responsibility means, right?

BAIER: Our text to vote poll and our homepage online poll both deal with waivers tonight. You can logon to foxnews.com/specialreport to participate. Up next, Democrats focus on the moderates.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNE KIM, THIRD WAY: The only way that Democrats are going to get the numbers that they need this fall is not only to rally the liberal base, that's important, but they also have to appeal to moderates. Whoever you are, Republican or Democrat, it's the folks in the middle who are going to decide the election for you.

LARRY SABATO, UNIVERSITY OF VIRGINIA: The liberal base is unhappy with Obama because they don't think he's been liberal enough. The moderates and independents are disaffected from Obama because they think he's been too liberal. How do you resolve these tensions in three weeks?

(END VIDEO CLIP)

BAIER: That is the question. Take a look at Gallup's latest poll of how the voting population breaks down. You can see conservatives going up from 2008 to 2010, moderates shifting a little bit, liberal going down.

Here are the exit polls from 2008. President Obama actually won 20 percent of conservatives, 60 percent of moderates, 89 percent of liberals. Most people, Peter, are saying that’s just not going to happen this time.

WEHNER: It's not going to happen. And as this report said, even if it did happen, they would still lose. The central political fact, the most important fact of last 20 months is the hemorrhage of support that Obama has experienced among independents. You can't win that back in last three weeks. You can't airbrush out of existence the record that he’s amassed or the record the Democrats have voted for.

BAIER: So despite all these stories about the closing polls and Democrats picking up points --

WEHNER: That's just nonsense. If you look at the individual races it's getting better for Republicans. And this is going to be an epic election loss for Democrats, and there is nothing in the polling evidence to argue otherwise.

BAIER: Juan, David Plouffe, the president's advisor, said this to the Washington Post today, actually talking to reporters. "By their definition," talking about Republicans, "success is winning back the House, winning back the Senate, and winning every major governor's race. When you’ve got winds this strong in your favor, that's the kind of election you need to have -or it should be considered a colossal failure."

That doesn't seem like positive spin.

WILLIAMS: I think it's really positive spin.

(LAUGHTER)

He’s setting the bar so high for Republicans, that afterwards, because I think he expects Republicans are going to do very well. Their base is energized and they’ve got the big issues on their side at the moment, that he is saying if you don't win everything, if you don't clear the table, then the president and the Democrats are going to be able say, yes, we're still in control. It's kind of a ridiculous statement.

I think the key in terms of the numbers that you put up a moment ago are the increase in the percentage of people self-identifying as conservatives. I don't think there is any way that the president and the Democrats can say we'll win those folks back.

You can say to the base, the liberals, buck up, as the president has said, don't go backwards. Remember who got us in this ditch, and all that kind of language. And you can say to independents and the moderates, wait a second. Look at some of the extremist views and remember who’s your incumbent. So you can make those appeals.

But it's really troubling when you start to see the country is shifting more to the right even if you have a self-identified liberal president.

BAIER: Other numbers are also factoring in. We're going to get the unemployment figures for last month tomorrow. Take a look at these foreclosure numbers. Steve, the foreclosure threat, 11 million homes with negative equity. One in five borrowers could lose their homes, and 20 out of 100 have impaired mortgages. What about that?

HAYES: It's stunning. By most accounts the news on Friday is not going to be good news. So I think is certainly something that is an anvil around the neck of Democrats at this point.

I think you are essentially having a debate on the two -- the national debate about this election is happening on two levels. One is on the economy. And you have Republican candidates hammering Democrats at every turn about unemployment numbers, about the job, about the failed stimulus, about healthcare.

But I think you are also having a bigger debate. And this is the debate that I think means more and is likely to carry through to 2012.  You're having a debate about what it means to be an American and the overall direction that the country is headed. Is this going to be a country that -- this is one of Marco Rubio's lines -- is this going to be a country where every successive generation has more opportunities and does better than the previous one, or is it going to be a country in which we start to take steps back?

I think that is the bigger debate here, and I think that's, like I said, likely to be the one that carries into 2012.

BAIER: It's your first time on the panel. Ten seconds, here.  What's your prediction? House and Senate?

WEHNER: I think the Republicans will take both the House and Senate. I think they will win 65 seats in the House or better, and I think the recriminations we're going to see on November 3 among Democrats it’s going to be extraordinary.

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