This is a rush transcript from "Special Report," February 28, 2011. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: I know that many of you have asked for flexibility for your states under this law. In fact, I agree with Mitt Romney, who recently said he's proud of what he accomplished on health care in Massachusetts and supports giving states the power to determine their own health care solutions. He's right.
GOV. MARY FALLIN, R-OKLAHOMA: We want to have flexibility. We don't want to have mandates upon our state's health care system. We are very concerned about Medicaid costs and how that affects our state's budget.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: Well, Medicaid was a big topic with the governors and the president. Governors fear it could add 20 million more people under the Obama health care law, and Medicaid already accounts for about 23 percent of all the spending in the state budgets, and both Democrats and Republicans want to cut the Medicaid recipients.
We're back with the panel. Steve, what about this issue?
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: The president proposed another bipartisan commission in which he solicited Republican ideas and said if everyone comes together in a bipartisan way we can sit down and I am open to Republican ideas. Which reminds you all too much of the Blair House confab that they had when he invited members of Congress up, asked Republican for their ideas, and then basically didn't really accept any.
And the interesting thing was that after the president proposed this bipartisan commission and after he floated the idea of taking some Republican ideas, his aides held a phone call in which they basically said, we are not interested in the main idea that Republican governors have, which is block granting some of this Medicaid funding. So he already said -- took the chief Republican idea and set it aside.
JUAN WILLIAMS, SENIOR EDITOR, THE HILL: Well, the block grants might drive up the size of the budget, and that's one thing that he said very clearly. This is not gonna be a budget buster, he's not gonna bail out the states. The states have to come in with some way that they have as an idea that this can be managed. And that probably means that for Medicaid, and this is dealing with the poor as opposed to Medicare dealing with the elderly, that you're gonna have to raise the levels that people qualify for because you have a number of people who are unemployed balloon the roles for Medicaid in this country. So that's put added pressure on the states. The governors want no part of that because they don't have the budget to pay for it.
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look what Obama now is pretending he's the man who wants to see states experiment on their own. He is a federalist. Well then why did you pass a national health care law which imposes all these mandates and has all these governors screaming that it is unaffordable and also inflexible?
The fact is that the Obamacare law imposes on states the following eligibility standard. You have to give Medicaid to people up to 130 percent of the poverty line. It was originally intended as a plan for the poor. Now it is becoming an entitlement. And on the Chip program which is the one that is for the assistance of children, in some states the eligibility requirements are so expansive that a family earning about $70,000 is eligible.
Now that's insane. It's unaffordable. As you say, it would add 20 million people on the rolls in this decade. In 2019, there will be 85 million Americans on Medicaid, costing a total of $900 billion a year. Utterly unsustainable, but that's what's in the law.
BAIER: Not to mention all the doctors who are now saying they wouldn't take Medicaid.
BAIER: And that presents a huge problem. Very quickly, Steve, the politics of all of this, the president seems to love mentioning Mitt Romney in Massachusetts.
HAYES: How do you think people at Romney headquarters felt when President Obama cited Mitt Romney as his example? I think they were pulling their hair out.
BAIER: That's it for the panel, but stay tuned for a classic battle.
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