Debt Limit Fight Heats Up

This is a rush transcript from "Special Report," January 17, 2011. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. STEVE KING, R-IOWA: It's all got to go. Pull it all by the roots; otherwise it will grow back on us. It's a malignant tumor that threatens to metastasize on us.

REP. JAMES CLYBURN, D-S.C.: Let us modify the healthcare law in a bipartisan way, but this whole stuff of repeal and then throwing it out and starting all over, that's not going to happen.

(END VIDEO CLIP)

SHANNON BREAM, GUEST HOST: All right, we are talking about repealing the healthcare reform legislation. Let's bring in our panel now, Bill Kristol, editor of The Weekly Standard, Nia-Malika Henderson of The Washington Post, and syndicated columnist Charles Krauthammer. Welcome all.  I thought they were going to tone down their rhetoric a little bit. But Charles, that sounded pretty pointed.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: But there was one an excellent example of the rhetoric being toned down. When the speaker of the House, remember this is a bill whose name, where it says the repeal of "job-killing healthcare bill," the speaker now refers to it as the "job crushing healthcare bill." So I think that's a great advance --

BREAM: An important first step.

KRAUTHAMMER: Right. We're on our way. Obviously, it will pass the House. It will not pass through the president. However, if the Republicans after repeal of the bill concentrate on one area, I think, you know, they have this idea of attacking it all kind of fronts, taking away the funding in a lot of different areas. I think they ought to concentrate on one item, which is individual mandate, A) because it's intensely unpopular, it could even be unconstitutional, it’s in the courts and because of the many Democratic senators, over 20 who are up for reelection in 2012, a lot of them are wary about supporting the individual mandate. So it only takes four Democrats to create a majority in the Senate.

I think if they concentrate on that, which would destroy the bill because it's the source of the funding, it would be a way to focus on one item of the bill that I think the Republicans would always win in the court of public opinion rather than attacking it at the edges.

BREAM: If not in the court of law, as we see that one playing out.

KRAUTHAMMER: Exactly.

BREAM: Most Democrats don't want to engage in the debate or see a full-out repeal opposed, but there is an exception. Someone with a unique viewpoint on what it could present is Senator Schumer.   Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER, D-N.Y.: We welcome in a certain sense their attempt to repeal it because it gives us a second chance to make a first impression. There are so many good things in the bill.

(END VIDEO CLIP)

BREAM: Nia, is that the more they know about it, the more they will like it?

NIA-MALIKA HENDERSON, WASHINGTON POST: That's what the Democrats have been saying for awhile now. The president his whole midterm campaign was all about selling health care. It didn't really work. He didn't connect with the American people, and you see the polls where 40 percent are still for repeal.

I think one of the things that you are starting to hear from Democrats is that there is a way to come up with a bipartisan compromise to change this, whether or not that's going to mean repealing this individual mandate, or smaller things like this 1099 provision with small businesses. That’s the way you'll see them shift.  You'll hear them out there trying to resell it. They have these conference calls with grassroots organization, but they are also going to have to realize that the large majority of Americans really don't want it to be repealed but they want it to be tweaked. And also you'll have the president probably in the State of the Union lay out some sort of middle of the road compromise here.

BREAM: You mentioned a poll, so let's put that up, just so people can see it, an APGFK poll.  This is talking about the healthcare reform. That is the Rasmussen Report poll, 55 favor repealing it, 40 percent oppose, in the AP poll, 40 percent support, 41 percent oppose, and there are some questions about those numbers and why they're tight. But technically at the end of the day you still have more Americans, Bill, who sound like they want it gone at least in some form.

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: Yes. Even the AP poll, which is all adults, not likely voters, has a negative judgment on the president’s landmark initiative, which is striking.

And what Jim Clyburn said in the first clip, he is the number three House Democrat, not an unimportant person, and he began saying let's modify the healthcare law in bipartisan way. What? I thought this was the greatest thing since sliced bread. This was the cat's pajamas.  I don't know what that is. I never understood that expression.

(LAUGHTER)

Now suddenly the leading Democrats are saying of course, we have to make changes, it’s not perfect. That is a big concession. Republicans need to drive the debate. They need to not just grandstand over the next few day, they need to explain to the American public how damaging this bill is on several fronts to our healthcare, to the fiscal situation of the country, centralization of power in Washington. They need to emphasize that point as well. This is a huge power grab by Washington.  And then for the rest of the year, they need to lay out their own reforms and vote on them in the House. Even if we know the president is not going to sign the repeal.  They have to act as if, who knows? Maybe the president will have a blinding moment of clarity. He'll sign the repeal and say yes the Republican reforms to make case they have the better proposals than Obamacare. After all, this is the president's biggest achievement. It was a pure partisan split.  The Republicans need to continue making the case to the public.

BREAM: Bill, you talk about making the case for the economy or the fiscal impact, but they have to deal with this number from the CBO saying there will be a $230 billion addition to deficit between 2012 and 2021 if they get it repealed. Charles, how do they deal with that number making the case to the public?

KRAUTHAMMER: They can do it in two ways. One is to explain all the loopholes and the phony numbers that were fed in those assumptions. That is tough.  We do it on the air and we lose half the viewers.

BREAM: In our diagrams.

KRAUTHAMMER: Exactly.

But I think the other way to do is point out the CBO, how do you get to that reduction for the deficit, you add half a trillion of new spending and three-quarters of trillion of new taxes. Is this the way you want to reduce the deficit, by adding half a trillion of spending, not only old taxes, new taxes?

We have an agreement where the president agreed with McConnell on the big extension of the tax cuts, because they understand you don't want any new taxes on the American economy. This is a way to increase spending half a trillion at a time.  Everyone understands you have got to cut spending. I think that is a powerful argument.

BREAM: Nia, how much does this factor the 2012 race, this particular issue?

HENDERSON: I think it's huge, especially for Mitt Romney. The Republicans are clearly in 2012 are going to run on repealing healthcare.  So it's going to be a tough dance for Mitt Romney to explain his position in Massachusetts.

KRISTOL: For the president it's huge. He can cut deals; he’s cut a tax deal and pivot to center in all kinds of ways. He’s doing it with Bill Daley and chief of staff and the rest of the Clinton retreads, if I can use that term. That's not quite fair.  Veteran’s of the Clinton administration who are now in the Obama White House. The one thing he can’t come to the center on is this was his landmark piece of legislation, he’s for it.  Republicans are going to be against it.  It provides a pretty clear voice for voters in 2012 on what kind of political philosophy you want guiding public policy in the future.

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