I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Outburst made, apology accepted. Now that a Republican congressman has apologized to the president for calling him a liar, some people are looking into the issue the congressman is raising.

Let's talk about that and more with the health and human services secretary, Kathleen Sebelius.

Madam Secretary, thanks very much for coming in.

KATHLEEN SEBELIUS, U.S. HEALTH AND HUMAN SERVICES SECRETARY: Great to be with you, Wolf.

BLITZER: All right.

The president flatly said last night -- and this is what caused the stir out there -- he says, none of the -- the proposals he's putting forward would help those who are here in the United States illegally. Is that right?

SEBELIUS: That's correct.

He made it clear that the bill specifically bars anyone who is in the country illegally from accessing the health insurance system.

BLITZER: But the president also says that, maybe later this year, early next year, he wants the Congress to enact comprehensive immigration reform, which would find a way to allow millions of illegal immigrants to have legal residence in the United States.

Would they then be eligible for all of these benefits that -- that are now being considered?

SEBELIUS: Well, Wolf, I don't pretend to know what may end up in a comprehensive immigration bill.

I think the president has long figured that we need a comprehensive solution to fix the situation where people are in this country illegally. And we need Congress to roll up their sleeves and address it.

What they may decide to do with any number of situations, I don't know. But it's very clear that the health reform bill pending in Congress, the bills that the House wrote, the bill that is out that the Senate wrote specifically ban anyone in the country illegally from becoming part of that insurance system.

BLITZER: Because John Boehner, the Republican leader in the House of Representatives, today, he said you had a chance -- Democrats, we're talking about -- to underline that point during the committee process in the House, but you didn't do it, which raises these questions. Listen -- listen to Boehner.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: There were two opportunities in committee for House Democrats to make clear that illegal immigrants would not be covered by putting in requirements to -- to show citizenship. Both of those amendments were, in fact, rejected.

(END VIDEO CLIP)

BLITZER: Was that appropriate, to reject those amendments?

SEBELIUS: I just think it's very disingenuous of the minority leader in the House, who has not been a part of this conversation from day one, who backed away from the table, to suggest that the language that is in a bill which is very specific and very clear isn't sufficient.

Read the bill. It clearly bans those in the country illegally from accessing the system. I guess you could say it four or five more times. But, unfortunately, in spite of over 100 Republican amendments that were part of the House process accepted in the bill, not a single Republican voted for the bill out of committee.

So, I would suggest the minority leader needs to come to the table with suggestions that he thinks would be helpful, and then participate in a process.

BLITZER: The new department -- I guess we could call it the department of public option that is being considered out there, a new government agency, in effect, to have a new health insurance company competing with the private insurance agencies, how big of a bureaucracy, how big of an operation would this be? How many employees, new government workers, would be required to work for this public option agency?

SEBELIUS: Well, again, Wolf, the specifics of what the House and Senate will end up with aren't clear.

What is clear is that in a new marketplace which would be available to those Americans without insurance coverage right now at all or those Americans who have -- or the so-called underinsured, who have limited coverage, they need affordable coverage, so a new marketplace that will be primarily private plans offering a series of benefits, and, as a competitive ingredient, you would have a public option.

BLITZER: But, Madam Secretary, have you not looked at what this new government agency would entail, how many workers, how many people would have to be employed in order to get it off the ground?

SEBELIUS: We haven't begun to do that analysis, because, as you know, there's a version in the House. There's a different version in the Senate Health Committee. The Finance Committee is describing even a -- a third version.

Once we get to a bill and have some language, I think we will start in this agency to flesh that out. But suffice it to say that, whatever it is, we currently have major government programs run by the Department of Health and Human Services, Medicare, Medicaid. We have our friends at the Defense Department who run a major nationwide health service, the Veterans Administration.

So, there are lots of networks to tap into. There's lots of experience already here running a major health insurance program for Americans. And...

BLITZER: But it would be -- presumably, if it's going to compete with Blue Cross and Blue Shield, or UnitedHealthcare, or Kaiser, or some of these other big private insurance companies, this would be a big bureaucracy, requires thousands, if not tens of thousands, of employees? SEBELIUS: Well, I think what you see in -- in the government programs that are currently operational -- and 43 million Americans have Medicare -- another 39 million are in the Medicaid system that is a partnership with state and federal government -- that the overhead cost incurred by the government is far less than the administrative costs, the number of employees, the number of bureaucrats from private insurance companies.

So, my guess is, we can do a more efficient plan from the get-go. And that's one of the reasons that the costs may be well lower and more competitive.

BLITZER: I'm -- I'm going to show you some pictures of the president last night when he walked into the chamber of the House of Representatives. He was enthusiastically received. You can see he's shaking hands with a lot of the members, kissing some of the other members.

And I wondered, because some people were raising this, at a time of concern of the H1N1 swine flu, is -- is this what we want to see, this kind of activity going on?

(LAUGHTER)

SEBELIUS: Well, we hope that, if members of Congress were sick, that they stayed home. Maybe that was the case. That's what we're urging people to do.

I think, eventually, if H1N1 begins to spread more widely, we may encourage people to do the flu bump, you know, elbow one another, instead of shaking hands or -- or kissing.

At this point, I think the most effective strategy is stay home if you're sick. Don't kiss anyone, but, hopefully, stay away from other folks, because...

BLITZER: I like -- I like that flu bump. We got a picture of...

SEBELIUS: Yes.

(LAUGHTER)

BLITZER: ... you doing that -- that elbow -- that elbow bump over there...

SEBELIUS: That's right.

BLITZER: ... so you don't actually touch each other or shake hands at a time of...

SEBELIUS: That's true.

BLITZER: There is a pandemic out there right now. We're all concerned.

Anything else you want to tell us right now about the H1N1 that we need to know?

SEBELIUS: Well, today, I participated in a seasonal flu seminar, driving the message that, right now, seasonal flu vaccine is available. I'm actually going to get my shot tomorrow from the Medical Reserve Corps.

But we sure want older Americans, Americans with underlying health conditions, health care workers, to get their seasonal flu shot right now. We are still...

BLITZER: When is the H1N1 vaccine going to be ready?

SEBELIUS: Well, we think we're still very much on target for mid-October. And, as you know, the clinical trials are under way now.

But having people step up and get seasonal flu shots will keep them that much safer. And then we -- we will begin to get information out about the vaccine sites and where people will be able by mid- October to get the H1N1 vaccine.

BLITZER: If I were there, I would give you the elbow bump right now, instead of shaking your hand, because it's...

(LAUGHTER)

(CROSSTALK)

BLITZER: ... very nice.

Thanks very much, Madam Secretary.

SEBELIUS: Nice to talk to you.

BLITZER: Good luck with all of these issues.

SEBELIUS: Thank you.