SCHIEFFER: And good morning again. All of our senators are in the studio this morning. We're going to start with the Democrats. Senator McConnell will be along in just a bit.

Last week 10 senators, including Senators Nelson and Rockefeller, who are with us this morning, came up with a health reform plan to replace the plan that included the so-called public option. That is a government-run health insurance program like Medicare.

It would do that by setting up insurance plans run by nonprofit companies which would be supervised by the government and it would allow people with no insurance to buy into Medicare, beginning at age 55.

But now those negotiations, which seemed to be going pretty well last week, at midweek, seemed to grind to a halt on Friday. So are we back to square one, Senator Rockefeller?

ROCKEFELLER: No, we are not. In fact, I think we're -- we have tremendous momentum.

I've always believed that, Bob, that as you come closer to taking a vote, that you have to look at this most important piece of legislation since Social Security and you have to look at the whole thing. It gets harder and harder to stick on one individual subject and say, I don't like that; therefore I'm going to vote against the bill.

I actually think that we're -- that the momentum is building and that our chances of working well are increasing.

And just to give you an example, Joe Lieberman and I are working together on the Medicare control cost factor. Ben Nelson and I are working together on health insurance reform. And I'm really proud of that. And I think that's symbolic.

SCHIEFFER: Well, let me ask Senator Nelson. Do you agree with that, Senator?

NELSON: Well, I think I can -- I can say this, that there have been so many improvements to the legislation now that perhaps it is easier for some.

I still have the unique issue of abortion, and while we're going to continue to work together on health insurance reforms, I want to make certain that, at the end of the day, whatever we do is the best bill that can be possibly put together.

SCHIEFFER: Well, let me -- let me just cut to the chase here. If this bill -- as the wording on abortion in it now stands, can you vote for it?

NELSON: I said I can't support the bill with the -- the abortion language that's there. Unfortunately, the Nelson-Hatch... (CROSSTALK)

NELSON: ... failed and -- but I do know that there are some who are, right now, trying to find language that might be compatible with the Stupak language in the house. That's a tall order for people. And I'm not prescribing ahead what they may be able to do.

SCHIEFFER: Let me ask you this, Senator Nelson, because Senator Rockefeller, here, seems to be pretty optimistic.

You were one of the senators, along with Senator Rockefeller, who worked out this compromise proposal. By working out this proposal, did that mean that you can vote for this proposal?

NELSON: Well, no, I -- I think there's -- it's important to point out that what we put together was something to get scored, where the financial analysis of the...

(CROSSTALK)

SCHIEFFER: In other words, you voted for something to send it to the Congressional Budget Office to find out how much it would cost?

NELSON: I think we all did. I know that there are those who want to vote for this, but I withheld my decision on that until you see the numbers and see how it all works. And there are some concerns, of course.

SCHIEFFER: So -- so you're not saying you can vote for this. You're just saying you worked on this proposal to see how much it would cost.

NELSON: I want to be a friend of the process. And the bill that originally was there was something I could not support. But I have always felt obliged to try to make something better rather than obstruct. And that's what I've been attempting to do.

SCHIEFFER: Why, Senator Lieberman, does nobody really know what's in this bill?

I mean, I was watching the Senate debate the other day. Senator McCain got up on the floor and said he couldn't find out exactly what was in the bill.

And Senator Durbin, who is one of the -- is part of the leadership of the Democratic Party, responded. And I want to put these words up on the screen. He said, "I would say to the senator from Arizona that I am in the dark almost as much as he is and I am in the leadership."

Why is it nobody knows what this proposal is that was sent?

LIEBERMAN: Yes, let me just...

(CROSSTALK)

LIEBERMAN: Right.

SCHIEFFER: ... to the Congressional Budget Office.

LIEBERMAN: Right, a very important question. On the basic bill, about 2,000 pages, we all know what's in it. But on this -- on these compromises, which my friends tell me really were not agreed on, as Ben said, but just, they agreed that they were interesting enough to send to get analyzed by the Congressional Budget Office.

Senator Reed has decided that, if you let them out, they'll get mauled.

(LAUGHTER)

And it puts us all in a very difficult position because we don't know exactly what's in them. But I will you that, on one part of it, the so-called Medicare buy-in, the opposition to it has been growing as the week has gone on. And though I don't know exactly what's in it, from what I hear, I certainly would have a hard time voting for it because it has some of the same infirmities that the public option did.

It will add taxpayer costs. It will add to the deficit. It's unnecessary. The basic bill, which has a lot of good things in it, provides a generous new system of subsidies for people between ages 55 and 65 and choice and competition.

So, you know, Bob, I think we're at a -- they're not 60 votes for health care reform in the Senate now. We're at a point where -- and yet the basis of the bill, covering 30 million people who can't buy insurance today, regulating insurance companies so they treat consumers more fairly; for instance, not denying them health care.

SCHIEFFER: So you can't vote for the bill right now?

LIEBERMAN: Yes.

SCHIEFFER: You can't vote for the bill right now.

So why do you think that it's going to pass, Senator Rockefeller?

Because we know this is going to be one or two votes here.

ROCKEFELLER: I know that. And the reason that it has to be 60 votes; the reason it's so difficult is because every single Democrat and independent has to vote for it, you see? Because the Republicans are withholding all of their votes. They have been throughout the entire process.

And that has to be said to the American people. I mean, it's very hard to pass a bill under any circumstances. But when everything is filibustered; you have to get 60 votes, it's very, very hard.

I feel that...

(CROSSTALK) ROCKEFELLER: I feel that way, that it can pass or will pass because, as I say, I think, the closer you get, the more you have to look at the whole bill, the more likely you are to say, I have to do this for the nation.

LIEBERMAN: Bob, as I was saying, there's a good basic bill in here. And the parts of it can be supported by 60 senators, including some Republicans. But we've got to stop adding to the bill. We've got to start subtracting some controversial things.

I think the only way to get this done before Christmas is to bring in some Republicans who are open-minded on this, like Olympia Snowe. I'll tell you, it...

SCHIEFFER: Well, what do you have to do to do that?

LIEBERMAN: You've got to take out the Medicare buy-in. You've got to forget about the public option. You probably have to take out the Class Act, which was a whole new entitlement program that will, in future years, put us further into deficit. And you've got to adopt some of the cost containment provisions that will strengthen cost containment, that all of us favor.

If you did that, you'd have an enormous accomplishment. Thirty million Americans who can't afford insurance today would get it. Insurance companies would be more aggressively regulated and costs would be bent down. So it's time to get reasonable.

SCHIEFFER: Well, what about that, Senator Nelson?

NELSON: Well, I think every piece of landmark legislation has had bipartisan support, in many cases, two-thirds or more of the Senate voting for that legislation.

That's one of the things that is missing right now. It's not easy to reach across the aisle under the circumstances we find ourselves, highly politicized, very partisan

SCHIEFFER: Why do you think it's a bad idea to add this buy-in to Medicare, to let younger people buy into this program, Senator Nelson?

NELSON: Well, first of all, we don't know what the numbers are yet, Bob. And so that -- that's...

SCHIEFFER: You don't know what it's going to cost?

NELSON: We don't know what it's going to cost.

The second thing is I'm concerned that it's -- it's the forerunner of single-payer, the ultimate single-payer plan, maybe even more directly than the public option.

SCHIEFFER: Senator Rockefeller?

ROCKEFELLER: I don't agree. First of all, I introduced the original public option bill into the Senate with a Medicare benchmark, because that would have saved $50 billion. I tried to do it in the Finance Committee. They wouldn't listen. I tried to do it in the little meeting -- it just wasn't -- it's wasn't advancing.

So I have a decision to make. I mean, I think the public option is a fundamentally correct way to provide competition. I don't think it's a slippery slope to single-payer system at all. I just think it's a very good way, nonprofit; they don't have to make any money.

But my -- my decision is this. Am I going to say -- if the public option doesn't come through, am I going to say, well, count me out?

ROCKEFELLER: Or am I going to say, you know what, if we are creative and think of other forms of dealing with the health insurance industry, which is public enemy No. 1 as far as I'm concerned in terms of the American people...

SCHIEFFER: Would you be willing...

ROCKEFELLER: That's my option.

(CROSSTALK)

SCHIEFFER: Would you be willing to vote for health care legislation that did not have the public option and it did not have this buy-in to Medicare, which seems to be a non-starter for these two senators?

ROCKEFELLER: I'm very much for the buy-in. Because that's 30 million plus Americans. Only four million -- and four million of them have no health insurance at all.

SCHIEFFER: But would you vote for health care reform if that was not a part of it?

ROCKEFELLER: I'd have to look at the whole thing. You see, I don't like the question, if this were not a part of it. It is a very important, very huge project. And I have to look at the whole thing. So I'm not going to get trapped by an individual, let's say something I have fought for and I didn't win.

SCHIEFFER: Do either of you think this can pass with the buy-in to Medicare in it? And -- or a public option?

LIEBERMAN: No, no. There are not 60 votes for that, because the bill itself does a lot to bring 30 million people into the system. We don't need to keep adding onto the back of this horse or we're going to break the horse's back and get nothing done.

I want to tell you, we could pass a health care reform bill this week with more than 60 votes, and it would be bipartisan, if we just took a few things out of the bill as it is today.

SCHIEFFER: We have just a short time. Give me the list of things that have to be taken out to pass.

LIEBERMAN: From my point of view, no public option, no Medicare buy-in, CLASS Act which will add to our debt in the future. It doesn't take much more than that, and you've got a great bill left.

SCHIEFFER: Senator, you'd have to change the language on abortion for you to vote for it?

NELSON: Exactly. Exactly.

SCHIEFFER: Senator Rockefeller, it's hard for me to think that your optimism is going to prevail here when you hear the statements that these two senators make.

ROCKEFELLER: I know. And they're both very good friends. We're both working on major parts of the bill together. And it's not hard for me to feel optimistic. I do.

SCHIEFFER: OK. We're out of time.

ROCKEFELLER: Because history calls on us.

SCHIEFFER: We're out of time. Thank you very much. We'll get the Republican side of this in one minute.

(COMMERCIAL BREAK)

SCHIEFFER: And we're back now with yet another view on health care. The Republican leader in the Senate, Mitch McConnell . Senator, thank you for coming this morning. You heard what these two Democratic senators, Senator Nelson and Senator Lieberman, just said. They said if you took out the Medicare buy-in proposal, if you took out the so-called CLASS action proposal, and Senator Nelson says if you change the language on abortion, you could get more than 60 votes. And you'd get some Republicans. Are they right?

MCCONNELL: Well, it's noteworthy that you had to have three Democrats on to explain the Democratic position. In fact, there are more Democratic positions than you'd find in a stack of newspapers. And therein lies the problem.

And let's just talk about the core of the issue here. The American people are saying, please don't pass this. Your own CBS poll indicated opposition. The CNN poll said 61 percent were opposed and only 36 percent in favor. The government's actuary down at the Center for Medicaid and Medicare Services said that it will drive up health care costs by a quarter of a trillion dollars. Republicans uniformly, without exception, believe that cutting a half a trillion dollars out of Medicare, raising $400 billion in new taxes, and providing the increase, the actual increase in health insurance premiums for everybody else is not reform.

So you can see why, Bob, the Democrats are deeply divided.

I doubt if those adjustments that were suggested by my three colleagues representing three different points of view about this bill right before me would get there, I think they're in serious trouble on this, and the core problem is the American people do not want us to pass it. SCHIEFFER: Well, I mean, but that's just -- it's a hypothetical question obviously, but do you think that that would attract some Republican votes if they would do what Senator Lieberman says?

MCCONNELL: No. There are two Democrats, one of whom is here and one of whom is not here, who have been voting with us against the Medicare cuts. Senator Ben Nelson has also objected to the half a trillion in Medicare cuts. Senator Jim Webb of Virginia has objected to the half a trillion dollars in Medicare cuts. So even if you were able to fix these peripheral matters that you all were discussing, you still have the heart of the bill, Bob, which has a half trillion dollars in Medicare cuts that Ben Nelson voted against those cuts and Jim Webb voted against those cuts.

SCHIEFFER: Give me your version of why this buy-in to Medicare is not a good idea.

MCCONNELL: Medicare is already unsustainable now. It's going broke in seven years. Under the Reid bill, it's being used as a piggy-back. A piggy back. They're taking a half trillion dollars out of Medicare, not to make it more sustainable, but to start a whole new entitlement program for a different set of Americans, and the Medicare buy-in would create even more problems, because everyone anticipates a lot of very sick people would buy in, and it would exacerbate the problems that Medicare has, and it's already unsustainable before you even get to this bill that has been styled health care reform.

What we really need to do is to stop and start over and go step by step to deal with the cost issue, which is what the American people thought this was all about.

SCHIEFFER: Let me just put up on the screen here what the chairman of the Republican Party, Michael Steele, said the other day. He said "Democrats have accused us of trying to delay, stall, slow down and ultimately stop them from experimenting on our nation's health care. They are right. We do want to delay, stall, slow down and ultimately stop them from experimenting on our nation's health care. And guess what, so do a majority of Americans." Is that your position as well?

MCCONNELL: Well, I think that it's clear that the American people do not want us to pass this 2,100-page bill that seeks to restructure one-sixth of our economy. But the Democrats have 60 people in their conference in the Senate. They could do anything they wanted to, Bob. You had three different points of view right here around this table a few minutes ago. That's the problem. They can't get together themselves.

SCHIEFFER: Do you think no health care reform would be better than what the Democrats are proposing?

MCCONNELL: I'm not in favor of no health care reform. I think we ought to go step by step to fix the cost problem. Target junk lawsuits against doctors and hospitals, have interstate competition among health care companies, incentivize wellness programs that companies like Safeway have shown can bring down the cost. There are things we can do to improve what is already the finest health care in the world.

SCHIEFFER: Do you think you can keep your caucus together here on this?

MCCONNELL: Republicans do not think a half trillion dollars in Medicare cuts, $400 billion in new taxes, and higher insurance premiums for everyone else is reform. We want to reform the health care system. We do not believe this bill, this 2,100-page monstrosity, is health care reform.

SCHIEFFER: You've been getting a little heat yourself on this from some Republicans. I noticed last week, Rush Limbaugh was really on your case. He says you're not putting up enough of a fight. He says you're helping the Democrats by letting this debate go on.

MCCONNELL: Look, the Republicans are together. Republicans who have a vote on this issue in the Senate are together. We all would like to see health care reform. We do not think this 2,100-page bill with its half a trillion dollars in Medicare cuts, its $400 billion in new taxes and its higher insurance premiums is the direction we ought to go.

SCHIEFFER: He thinks you ought to use every parliamentary device that you have to slow this down and strangle it. If it comes to that, will you do that?

MCCONNELL: Well, we haven't seen the bill yet. You know, none of the Democrats you had here have seen the final bill. The assistant Democratic leader has not seen the final bill.

First, we need to see the final bill. That would be a good place to start before you even get to whatever parliamentary techniques may be available.

Look, I think their biggest problem, Bob, is not 40 Senate Republicans. It's the American people, who are saying, please don't pass this bill.

SCHIEFFER: What is wrong with the setting up these nonprofits, which seems to be another part of this proposal, that would be overseen by the government to offer health care which the government would negotiate the rates on?

MCCONNELL: You mean the government insurance issue?

SCHIEFFER: Yes. Yes.

MCCONNELL: Well, you know, there's been a lot of discussion around that here inside the Beltway. Whether the government insurance option is in or out, you still have a hugely controversial core of the bill that is not likely to change in whatever iteration of this bill comes out of Reid's conference room at the end.

MCCONNELL: That's not likely to change. Most of us feel that the government getting in the insurance business is the first step and there was a Democratic congressman from New York who said that this week, the first step to what is called a single-payer system. That is a European type government-run health care system. We know the American people are not in favor of that. So I think the Democrats have a dilemma. Do they put it in? Do they take it out? They still have the core of the bill that's very controversial.

SCHIEFFER: Do you think there's anyway that any kind of a bill could be passed before Christmas?

MCCONNELL: With the American people as overwhelming opposed to this bill as they are for the Democrats to basically arrogantly take the position that we're going to ignore public opinion and jam this through before Christmas, I think that's really a stretch.

SCHIEFFER: One quick question. Larry Summers, the president's economic adviser, said this morning on one of the other shows that he thinks the recession is over. Do you think it is?

MCCONNELL: Well, if 10 percent of the Americans who are without work don't think it's over. And the 11 percent who are unemployed in Kentucky don't think it's over. I hope he's right, that we're beginning to come out of this economic slowdown but unemployment is the key.

SCHIEFFER: All right. Senator McConnell, thank you so much.

MCCONNELL: Thank you.