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Senator DeMint, Reps. Pence and Rangel on "Fox News Sunday"

Senator DeMint, Reps. Pence and Rangel on "Fox News Sunday"

By Fox News Sunday - August 2, 2009

WALLACE: I'm Chris Wallace, and this is "FOX News Sunday."

Health care reform at a crossroads -- with competing plans and a long August recess, what are the chances anything will be passed? We'll ask two key players, Democratic congressman Charles Rangel, chairman of the powerful House Ways and Means Committee, and Republican senator Jim DeMint , leading the fight against the president's plan -- Rangel and DeMint, only on "FOX News Sunday."

Then, "Right Now," our series on the future of the GOP continues with one of the Republicans' bright young stars, Indiana Congressman Mike Pence .

Also, the president takes a hit in the polls. We'll find out from our Sunday panel how the slide will affect his political agenda.

And our Power Player of the Week on her personal and public battle with breast cancer, all right now on "FOX News Sunday."

And hello again from Fox News in Washington. President Obama's top domestic priority, reforming health care, will remain unfinished business, at least until Congress returns to work in September.

Where does the plan stand now? For answers, we're joined in New York by Congressman Charles Rangel, chairman of the tax-writing Ways and Means Committee, and with us here, Senator Jim DeMint , a fierce critic of the Democratic plan.

And, gentlemen, welcome back to "FOX News Sunday."

DEMINT: Thanks, Chris. Great to be with you.

WALLACE: Senator DeMint, you said famously a few weeks ago that if you could delay health care reform until the August recess that voters (sic) would go back to their home districts, hear from outraged voters, and it would be the president's Waterloo.

So now we're at the beginning of a five-week recess. What do you think that will do to health care reform?

DEMINT: Well, people are starting to figure out that the president is on record, Congressman Rangel's on record, for wanting a single-payer government health care system in America.

So the debate's really between the Democrats and the American people right now. And what we wanted mostly is to be able to put the -- the bill itself on the Internet and the airways so that the American people know what's in it.

They know it's going to cut Medicare. They know it's going to raise taxes on the small businesses that create jobs. And they know it's going to eliminate jobs across the country.

WALLACE: So what do you think will end up happening as a result?

DEMINT: What's -- what's going to happen is you're going to see Americans take to the street in August, and go to their congressmen's office, and they're going to go to town halls, and I think they're going to let congressmen and senators know that they need to keep their hands off their health care.

WALLACE: Congressman Rangel, according to the polls, support for the president's health care reform plan is dropping. How worried are you about what's going to happen this August in terms of the battle to define health care reform?

RANGEL: I'm not worried at all. The president polls -- we in the Congress, in the Senate and the House -- we should have his numbers in terms of -- of his falling.

But I'm really surprised at Jim being so negative with a problem that all Americans recognize face this nation. There's not any American, any adult American at least, that doesn't have a horror story of what has happened to them under this terrible system.

And the Republicans and Jim -- they have nothing in terms of responding to this -- very serious needs. And for him to have to say that we have a single-payer plan means that he's not aware of the plan that we have in the House, he's not working with the Republicans in the Senate.

And if -- I cannot think of anything except a fiscal crisis that warrants more of a bipartisan attack on a serious problem.

So I'm looking forward to the House getting together and having one bill in there. Fortunately, there are more positive-thinking Republicans in the Senate, and I hope we can come up with...

WALLACE: All right.

RANGEL: ... a bipartisan...

WALLACE: Gentlemen...

(CROSSTALK)

RANGEL: ... as well.

WALLACE: ... let -- let -- let's break it down and let's talk about the two big issues at the center of this debate. And the first one of them is how to pay for health care reform.

Senator DeMint, it looks like the House is going to pass Congressman Rangel's proposal to raise a half a trillion dollars by imposing a surtax on top earners.

Now, combined with other Obama tax policies as well as local and state taxes, that would raise the top marginal tax rate in 39 states to over 50 percent.

And take a look at this. The top tax rate in Denmark is 60 percent. It would be over 57 percent in Oregon, almost 57 percent in New York and California. That's higher than Sweden and Belgium. Senator DeMint, what would that do to the economy?

DEMINT: Well, half of the so-called rich are small businesses that create 70 or 80 percent of the jobs in this country, and it's a real jobs killer.

But the debate is not just about what this thing costs and how we're going to pay for it. The debate is are we going to protect the right of Americans to make their own health care decisions -- moms and dads and grandmas and...

(CROSSTALK)

WALLACE: Well, let me just stop you right there, because we're -- we're going to get to that. But I just want to...

DEMINT: OK.

WALLACE: ... talk about the taxes first. We're going to get to the...

DEMINT: Well, they cut Medicare to come up with some money, and they raise taxes on -- on small businesses, and they penalize any American with a 2.5 percent tax if they don't have government-approved health care.

I mean, this is not the America we know. And the problem is not just with insurance. In fact, a lot of Americans are happy with it. We need to do a lot of things to make it work better. But a government takeover is going to work just like the "cash for clunkers" program, Chris.

WALLACE: Well, we're going to get to that as well, because some people think that's worked well.

Congressman Rangel, please respond to that, about the high tax rate, the top tax rate in your plan, as well as the fact that according to independent studies, two-thirds of small business profits would be hit by the surtax.

RANGEL: Well, under our statistics, 96 percent of small businesses would not be hurt by this tax. It's less than 1 percent of the wealthiest people in the United States that would be taxed, and that's at a 1 percent tax.

There's just no question that the way that they're talking about paying for it -- that they don't take in consideration the cap that we're going to have on premiums.

They don't take into consideration the number of people that have no insurance now that can walk in any hospital, any doctor's office, and be fully insured.

They don't take the productivity in having a healthy, educated workforce.

And they don't consider that America is the only industrialized country that doesn't have a national health plan.

And so there is just no question that at the end of the day, America saves money, it's more productive, and this is something that is long -- very long -- overdue.

WALLACE: Congressman, negotiators on the Senate Finance Committee -- in effect, your counterpart on the Senate side -- have already rejected your idea of a surtax, and they're talking about imposing a tax on insurance companies that offer gold-plated benefits.

Would you be willing to accept that kind of a tax on insurance companies instead of your surtax?

RANGEL: I hope as a result of this exchange Jim DeMint would at least say whether he agrees or not that he's willing to work with the Democrats in the Senate to see what we come up with.

I, for one, am not prepared to reject anything. Whatever they do in the Senate, they have to combine two bills. They have to bring it to conference. We have three bills in the House that we successfully passed. We have to get one bill. We have to go into conference.

And I don't think either side, Republican or Democrat, should be saying at this point in time what we're going to reject and what is not acceptable. The truth of the matter is when this is over, all Americans should feel more secure as it relates to national health insurance. And that's what I'm working toward.

WALLACE: All right. All right.

Let's get to the other issue, and this is something you wanted to talk about, Senator DeMint, and that is whether the government should offer a public health insurance option.

Now, the moderate Democrats, the so-called Blue Dog Democrats in the House, have forced House committees to rewrite the rules and, in effect, to make it a more level playing field where the public option would have to compete in negotiating prices with the private insurers.

Does that make it more acceptable to you?

DEMINT: Well, no matter what you call it, Chris, this is a government takeover. Barney Frank admitted this week that the whole reform effort is a way to move towards a single-payer government plan.

There are better ideas, and I will work with Charlie Rangel and others in the Senate if we'll focus on making the system work better and not replacing what's working right now.

There are a couple of things we could do, Chris. If we just had tax fairness for those who didn't get their insurance at work, we could get every -- we could give every family $5,000 a year to buy their health insurance.

And if we just allowed interstate competition -- they say we need a government plan for competition, yet Charlie Rangel and others have fought us on opening up competition. Right now we have a state-by- state monopoly system.

If people in New York, where Congressman Rangel lives, where they pay twice what they pay in Pennsylvania, could just buy policies in Pennsylvania, you'd see a competitive market develop very quickly, and a lot of the problems they talk about would quickly go away.

WALLACE: Congressman Rangel, I want to pick up on one point that Senator DeMint made, and I want to play for you Congressman Barney Frank , one of the top Democratic leaders in the House of Representatives -- what he had to say this week about the public option. Here it is.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK, D-MASS.: I think if we get a good public option, it could lead to single payer, and that's the best way to reach single payer. The best way we're going to get single payer -- the only way is to have a public option and demonstrate its strength and its power.

(END VIDEO CLIP)

WALLACE: Congressman Rangel, here's a top House Democrat saying the Republicans are right, that the public option is a stalking horse for a single-payer government takeover like we see in Britain or Canada.

RANGEL: Well, we've got 435 members of Congress, and I'm -- I'm very pleased that Jim DeMint says that he's willing to work with me and other people to get national health insurance.

I don't know what he's got to work with. There is no Republican plan. All they have done is to be critical.

But this is not a -- what a -- single payer. What we are talking about is that if we have 50 million people there, just makes a lot of sense, and they don't have any insurance, we shouldn't just turn them over to the private insurance company that have denied people insurance because they've had pre-existing conditions, that have excised conditions in the contract when they found out that people were sick.

Those people out there made billions of dollars in the private sector, and all we're saying is that the people, Americans, are entitled to an alternative. And that's the public option.

And so I don't think there's anything for the private sector to be afraid of. And what the Blue Dogs have done is just increase the costs in terms of negotiating.

But why in the heck Jim DeMint would be afraid of a public option, where people will have a choice as to which insurance plan they want, knowing that 50 million Americans have no plan at all...

WALLACE: Well, wait, wait.

RANGEL: ... and about half that number...

WALLACE: Congressman, let's give Senator DeMint an opportunity to...

RANGEL: ... are under-insured

WALLACE: Let's give Senator DeMint an opportunity to respond.

DEMINT: The congressman knows Republicans have a plan. Paul Ryan on his committee has filed a great plan.

I've introduced the Health Care Freedom Act that would force interstate competition, that would give every family who doesn't get their insurance at work $5,000 a year to buy health insurance, which is above the national average for the cost.

Lawsuit abuse reform, which the congressman won't touch because of the political side of this -- and block grants to the states to set up pools or high-risk systems so people who have pre-existing conditions can have affordable insurance.

There are good ideas out here. The idea that we need a "Fannie Med" in every state to compete with insurance companies is ridiculous.

WALLACE: And that's the idea that it's going to be a Fannie Mae -- whether it's a public option or a cooperative, it's going to end up being like Fannie Mae or Freddie Mac.

DEMINT: Of course it is, and they're going to -- we're going to have taxpayer-subsidized insurance competing with the private market, just now like General Motors is subsidized and they're competing with other companies.

I don't understand why the congressman is opposed to interstate competition of insurance companies.

WALLACE: If you could answer that briefly, Congressman, because then I want to move on to another subject.

RANGEL: I certainly can answer it briefly. When you're talking about Paul Ryan and you having a plan -- what I was talking about -- a plan that you had Republican support.

Paul Ryan's a great member. He's a Republican. He sits on my committee. He doesn't even have the support of the Republicans on the committee.

So I'm not saying that none of you guys have some idea. I'm saying you should come together with your leadership, compete with your ideas, and at the end have a bipartisan national health insurance program.

WALLACE: OK. Let's move on to "cash for clunkers," which most of us didn't even know about until about a couple of weeks ago. And this is the program that offers up to $4,500 rebates to anyone trading in an old car for a new, more fuel-efficient car. Now, as many as 250,000 cars, Senator DeMint, were bought -- new cars -- bought in the very first week. In the midst of a recession, why do you oppose putting more money into the program?

DEMINT: Well, this is another bill that congressman and senators didn't even read. The federal government getting in the used car business -- and we think, "Hey, this is working great."

But my children and grandchildren are going to have to pay for these cars, and we're helping auto dealers while there are thousands of other small businesses that aren't getting the help.

The role of the federal government is not to run the used car business. And it's clear. You can look at Amtrak or the post office, and now "cash for clunkers." The federal government went bankrupt in one week in the used car business, and now they want to run our health care system.

I just think this is a great example of the stupidity that's coming out of Washington right now, and I think Americans realize the numbers that we're throwing around don't work. We estimated this would cost $1 billion. Now they're saying we need $2 billion more. Our children and grandchildren can't afford to make these car dealers well right now.

WALLACE: Real quickly, because it sailed through the House in a day -- it's going to come up to the Senate next week -- are you going to be able to block it?

DEMINT: Well, we're definitely going to debate it. And I've heard John McCain is going to stand up and try to stop it. And I'm going to work with him every way I can, because...

WALLACE: That means a filibuster?

DEMINT: ... it makes no sense. I don't know what it means right now, Chris, but this is crazy to try to rush this thing through again while they're trying to rush through health care, and they want to get on to cap and trade electricity tax. We've got to slow this thing down.

WALLACE: And finally, Congressman Rangel, there's a story today that one -- because this recession has gone on so long that 1 million unemployed Americans are in danger of running out of their unemployment benefits very soon.

Do you favor and will you push to extend unemployment benefits for another 13 weeks?

RANGEL: There's no question, and they deserve it. They are the true victims of this fiscal disaster. And I do hope that the Republicans will come forward and realize by giving assistance to these people, they're allowing them to be able to put food on the table, to pay their rent and their mortgages.

It's the right -- it's the moral -- it's the -- it's the -- for us to do. And I hope that Jim would get the Republicans to work with us so that it's not a Democrat plan, but it's an American congressional plan.

WALLACE: Real quick, in 30 seconds, are you going to support extended unemployment benefits or not, Senator?

DEMINT: We need to take care of those who are unemployed, but we also need to make sure they get jobs. And if we do what Congressman Rangel wants to do, we're going to tax our small businesses that create the jobs, and we're going to have a whole lot more people on unemployment.

WALLACE: But yes or no on extending unemployment?

DEMINT: Yes. Yeah. We'll definitely support that.

WALLACE: All right. We're going to leave it there on a rare note of agreement.

 

Congressman Rangel, Senator DeMint, thank you both for coming in. No letup in this debate over health care reform. Thank you both, gentlemen.

DEMINT: Thanks.

WALLACE: Up next, our series on rising stars in the Republican Party, "Right Now," continues with Congressman Mike Pence . Back in a moment.

(COMMERCIAL BREAK)

WALLACE: "Right Now," our ongoing look at the future of the GOP, continues now with Indiana Congressman Mike Pence , chairman of the GOP Conference. He's the number three Republican in the House.

And, Congressman, welcome back to "FOX News Sunday."

PENCE: Thank you.

WALLACE: Let's start with the economy and some recent signs of progress. Let's put them up on the screen.

The economy was down only 1 percent last quarter, after a 6.4 percent drop the prior three months. New home sales soared 11 percent in June. And the stock market had its best month in seven years.

Congressman, isn't the recession leveling off? And doesn't President Obama deserve some credit?

PENCE: Well, let me say I hope the recession is leveling off. Slowing the rate of descent is encouraging, I'm sure, to millions of Americans. But I really believe that it's in spite of the prescriptions of Washington, D.C., Chris.

I mean, this so-called stimulus bill that -- you know, that was passed last February -- we've lost 2 million jobs since the stimulus bill was passed.

And I think what we're seeing in the economy now is the inherent resilience of the American economy and the American people.

And while those -- while those numbers are encouraging, what we ought to be doing is pursuing the kind of broad-based prescription for recovery and stimulating this economy that has always worked, which is fiscal discipline in Washington, D.C. and tax relief for working families, small businesses and family farms.

WALLACE: All right. Let's look at the stimulus bill which you voted against. The Democratic National Committee, as I'm sure you know, is running a radio ad in Indiana in which they note that the stimulus package is funding public works projects across the state and in your home district. Let's listen.

(BEGIN AUDIO CLIP) NARRATOR: These projects are creating and saving jobs and boosting our economy. So when you see that sign that says this project funded by the American Recovery and Reinvestment Act, you can say, "No, thanks," to Mike Pence .

(END AUDIO CLIP)

WALLACE: Congressman, "No, thanks," to Mike Pence ?"

PENCE: Well, let me say Indiana's lost 20,000 jobs since the so- called stimulus bill was passed.

WALLACE: But nobody -- excuse me. Nobody said that the stimulus bill was going to stop the recession.

PENCE: Well, now, hold on a second. The Democrats in Congress and the administration said that we were going to have to borrow nearly a trillion dollars from future generations and spend it on this -- this long laundry list of liberal spending priorities that we called stimulus and that unless we did that, unemployment would reach 8 percent nationally.

It's 9.5 percent nationally today. In my beloved Indiana, it's 10.7 percent and still rising, Chris. I mean, the reality is that, you know, borrowing a trillion dollars from future generations of Americans and spreading it around the economy is going to have some catalytic effect in the economy in the short term, but again, it's no substitute for fiscal discipline in Washington, D.C. and tax relief across the board for working families and small businesses.

WALLACE: But I want to ask you about another report, and we're going to put it up on the screen. More than 2,400 people are now at work on federal-stimulus-funded roadway projects in Indiana.

"What's clear is that the stimulus projects have boosted an industry otherwise floundering in Indiana." And that is not from the DNC. That's from the Evansville, Indiana Courier & Press.

PENCE: Right. That's right. I saw that report as well. To be honest with you, though, I've talked to officials with the Indiana Department of Transportation, and no one's really sure where that number came from, Chris.

But, look. Republicans were always prepared earlier this year to support funding for roads and bridges and infrastructure. It's unfortunate that that was such an infinitesimally small portion of the stimulus bill that was passed by the Congress earlier this year.

If you check the Indianapolis Star this morning you'll see a couple of stories about the stimulus. One is that four out of 10 major projects in the stimulus for Indiana had been allotted to companies outside the state of Indiana.

And this weatherization funding -- Governor Daniels has expressed some frustration in newspapers this morning that Indiana's gotten no funding from -- they've been... WALLACE: Yeah, but I don't understand.

PENCE: ... conditionally approved for that. All of this...

WALLACE: First you're saying the stimulus is bad. Now you're saying you're just not getting your fair share of it.

PENCE: Well, what I'm saying is that this piecemeal approach -- government handouts through a government bureaucracy -- is no substitute for broad-based tax relief and fiscal discipline in Washington, D.C.

Chris, the quickest way to get money into this economy is not to take it in the first place. And Republicans fought for broad-based tax relief.

We fought for fiscal discipline all year long, opposing the stimulus, opposing runaway spending in the budget, opposing the national energy tax and cap and trade and this government takeover of health care with its higher taxes, and we're going to continue to make that fight.

WALLACE: Let me ask you about one last element in the stimulus package. You voted on Friday against the "cash for clunkers" program...

PENCE: Right.

WALLACE: ... which a lot of people are saying is a big success -- 250,000 new cars bought in just one week alone.

Even if you're right that a lot of the stimulus money wasn't stimulative and ended up just being Democratic social spending, isn't the clunkers program successful?

PENCE: Well, look. I think the "cash for clunker" program is a -- is a good deal for car buyers, but it's a bad deal for taxpayers.

And again, it's no substitute for sound economic policy that will encourage across-the-board growth. I don't blame any Hoosier or any American for taking advantage of $4,500 in free federal money to go and buy a new car.

But is that really what it's going to take to get this economy moving again? You know, I think, quite frankly, that most Americans know that the way to get this economy back on its feet is for us to put our fiscal house in order here in Washington, D.C. and to give working families and small businesses more of their money to spend.

WALLACE: Where do you think your party is right now in the battle for public opinion versus President Obama and the Democrats?

PENCE: Well, I think Republicans are starting to earn back the confidence of the American people that we squandered, really, in the last 10 years. I mean, look, let's be honest. We didn't just lose our majorities in 2006. We lost our way. I mean, the American people saw a Republican Party that walked away from its commitment to fiscal discipline, limited government and reform, and the American people walked away from us.

We saw -- we saw in the last Republican administration, you know, increase at the federal Department of Education, the Medicare prescription drug entitlement, and an administration that ended up taking $700 billion in bad decisions on Wall Street and transferring those to Main Street, that on top of a doubling of the national debt.

But since the last election, Republicans on Capitol Hill are returning to their commitment to fiscal discipline, limited government and reform, and the defense of traditional values.

And I believe we're -- we're beginning to get a second look from the American people, and they're beginning to see that Republicans are returning to the principles that minted our majority in 1980 and again in 1994.

WALLACE: But, Congressman, while new polls show that support for the president, and especially for his health care reform plan, are slipping, they also seem to indicate that the voters are not at this point ready to give a second look to Republicans.

I want you to take a look at the latest poll. When asked their opinion of congressional Republicans, "not favorable" won by more than 2-1. When asked about Democrats, the margin, as you can see, was five points-plus favorable. That's not exactly a vote of confidence for the GOP.

PENCE: No, it's not, and -- but let me say I don't think the debate in this country is about President Obama or about Democrats or Republicans. I think it's about who we are as a nation.

I think it's about -- about what we believe is the proper role of government in our lives and the proper responsibility of individuals. You know, this whole business -- you know I opposed those bailouts when they started last fall, and I've been opposing them all the way through last Friday's vote.

You know, the American people know we can't borrow and spend and bail our way back to a growing economy. And they also know that the freedom to succeed includes the freedom to fail.

But here we have this clash of ideas that's taking place. Republicans for a while were on the wrong side of that argument. We've gotten back on the side of fiscal responsibility, personal responsibility, limited government.

And I think as we continue to fight consistently on Capitol Hill and take our message to the American people, the American people are going to come back to us.

WALLACE: How important do you think this August recess is in shaping public opinion over health care reform? PENCE: Well, I think it's -- I think it's enormously important, but I bristle at the suggestion that anyone from Washington will shape public opinion of the...

WALLACE: No, I'm actually talking...

PENCE: ... government takeover of health care.

WALLACE: ... more about the role that the -- that the voters...

PENCE: Oh, OK. All right.

WALLACE: ... are going to play as members go back to their home districts.

PENCE: Yeah. I always tell -- I always will remind folks here on Capitol Hill that there's somebody who sits at the table that usually gets left out of conversations in Washington, and that is the American people.

I think the American people have a very strong idea that we ought to lower the cost of health insurance for families and businesses, that we ought to lower the cost of health care.

But the American people oppose a government takeover of health insurance, and they know if the Democrats and the administration get their way and create a new government-run plan, tens of millions of Americans will lose their health insurance.

My bet is, Chris, that as Republicans and Democrats fan out across this country in the next month, they're going to hear from the American people that they want modest and responsible health care reform that lowers the cost of insurance and health care, but they don't want a government takeover. And hopefully, that will set the stage for some modest but responsible reforms in a bipartisan way this fall.

WALLACE: One last question I want to get into with you. Nine days ago you headlined a GOP picnic -- and there's a picture of it -- in Iowa, which, of course, just happens to hold the first presidential contest in 2012.

I know you say that you were there just to help out a friend who's a member of Congress, but you are not flatly ruling out a run for president in 2012.

PENCE: I have no plans to run for president, Chris. I'll tell you what. My focus right now is on serving the people of Indiana in Washington and doing everything in my power, whether it was in Iowa -- I was in North Carolina. I've been in Florida, California, Ohio and Kentucky.

I'm going to do everything in my power to elect as many conservatives to Congress in the year...

WALLACE: But you're not flatly ruling it out. PENCE: ... 2010 as possible. Look, the focus right now for the American people is on the role of government in our lives.

I'll leave you with one thought. There was a guy in Newcastle, Indiana who came up to me after the second bailout vote. He had lost his job the day before and he walked up to me. He said, "Congressman," he said, "I lost my job yesterday, but I wanted to thank you for voting against that bailout, because I can get another job, but I can't get another country."

I mean, I really believe millions of Americans are not interested in the politics of 2012. They're not interested in who's up and who's down in the polls. They want to see us in Washington, D.C. defend the fundamental freedoms -- free market economics, the values -- that make this nation great. And that's where our focus is going to be.

WALLACE: Congressman Pence, we're going to have to leave it there. I want to thank you so much for coming in today. And please come back, sir.

PENCE: Thank you, Chris.

WALLACE: Up next, our Sunday group on what's turned out to be a tough month for President Obama. How much trouble is he in? Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: ... the recovery act.

(END VIDEO CLIP)

WALLACE: That was the president taking credit for recent encouraging news about the economy.

And it's time now for our Sunday group -- Fox News contributors Bill Kristol of The Weekly Standard, Mara Liasson of National Public Radio, Stephen Hayes, also from The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, Bill Kristol, the president, understandably bragging about the economy because it has been a tough month for him -- and take a look at some of these recent poll numbers.

According to a Wall Street Journal survey, Mr. Obama's job approval has dropped -- has dropped from plus 34 in February to plus 13 now. And take a look at this. In June, when asked whether the Obama health care plan was a good or bad idea, the margin was plus one. Now it's minus six.

So, Bill Kristol, what's going on?

KRISTOL: He's losing the debate on substance, honestly. It's not just that the -- I mean, I think Senator DeMint is a very impressive spokesman for the opposition to President Obama, Mike Pence as well.

But it's not as if the Republicans have glitzy ads out there or have come up with brilliant catchphrases. They're having a very big, substantive debate on health care, on the role of government, on debt and the deficit, and I think the Republicans are winning it.

And it's damaging -- you know, President Obama's approval is going down for policy reasons, not for personal reasons.

WALLACE: Do you agree with that, Mara?

LIASSON: I actually don't agree with that, although I do say NPR had a new poll this week where we also showed the president's approval rating at 53, and we have a minus five on health care, but very similar -- different numbers, but the same spread. I think...

WALLACE: But she was able to get the plug in for NPR....

LIASSON: Yes, I was able to get the plug in...

WALLACE: ... so it was worth doing.

(LAUGHTER)

LIASSON: ... as I know you would -- you would do if you were in my situation.

However, I think what's happening is not just substance. In the NPR poll, when we actually tested the president's arguments, health care did better. It flipped. When you ask people what -- from what you've heard about the president's plan, are you for it or against it, they're against it.

But the fact is what have they been hearing? It has a $1 trillion price tag over 10 years, it's going to raise your taxes. I think...

WALLACE: Well, aren't those both true?

LIASSON: I think this is a result of the president's legislative strategy. He left this up to Congress, and Congress -- what are we seeing from Congress? Very, very messy, Democrats divided, plans that don't do what the president wanted them to do -- bend the cost curve down, be deficit neutral.

He has, I think, to a large extent, lost control of the narrative of health care, and that's one of the reasons his numbers are going down.

Also, the economy isn't getting better. He oversold the recovery plan. He said it was going to be a jolt to the economy, it was going to happen really fast. And despite the good news from the stock market this week, the unemployment numbers are lagging really badly.

WALLACE: Steve, one fallout from these falling poll numbers is that Democrats in Congress, and in the White House to some degree, have begun increasingly to demonize insurance companies, to make this less about health care and more about insurance reform.

This week House Speaker Pelosi said that the insurance companies have been working, quote, "immorally," and then she added this. "They are the villains in this. They have been part of the problem in a major way."

What makes this especially interesting to me is the president's pollster, Joel Benenson, said a month ago that his surveys show people, quote, "think the insurance companies have been the villains here, not the government." Steve, just a coincidence?

HAYES: No, not a coincidence, I don't think. And I think it's actually smart politics. You can talk to virtually anybody -- I think Charlie Rangel made this point -- and they've got a horror story, you know, either with themselves or with their family, about insurance -- you know, somebody who is not getting claims covered. You can go one after the other after the other.

But Democrats have been, I think, lurching around looking for a villain in this. They tried the Republicans. That was clearly not going to work, because basically the president's opposition came from within his own party. They seem to have settled on insurance companies as their villain.

You know, I think it's smart politics. I think it's too little, too late, frankly, and they're going to go home and hear from voters who I think, despite what Mara says, are very skeptical of the substance of the program.

WILLIAMS: Well, I think that there's a change in the message, and the change in message suggests that the White House thinks that there was a need to, you know, reorient the way the discussion was going away from the cost, which was what was being emphasized by the Republican critics, and emphasize more the consumer protection aspect of dealing with insurance companies so that you -- everybody will have some coverage, you can be sure that if you have a pre-existing condition that it won't -- you won't be limited...

WALLACE: And this answers the question to the middle-class person who's basically happy with his health care insurance now...

WILLIAMS: Correct.

WALLACE: ... "What's in it for me?"

WILLIAMS: Exactly, what's in it for me, as opposed to this larger discussion about big government and big government spending, which has not been working for the president.

But overall, Americans still want a health care system that works and still think that the insurance companies are very difficult to deal with and don't respond to their personal needs. So this seems to me to be rich territory.

The problem is that as you head into this August recess where the White House hopes that the pressure will build from the grassroots on conservative Democrats, I think the argument still is largely about cost, despite the victory the White House and Speaker Pelosi had Friday in the House with the final committee vote in favor of some legislation.

WALLACE: Bill, as we talk about the president's political standing, I want to throw -- and the declining poll numbers, I want to throw one other thing into the equation. And that was the president's "beer summit" and the whole beer controversy -- well, not the beer controversy -- the controversy this week.

The picture there -- he brought together Harvard professor Henry Louis Gates, Cambridge Police Sergeant James Crowley at the White House. According to another poll, the public really disapproved of the president's handling of this, especially whites.

How damaging was that? And how much do you think that has contributed to this bad July for him?

KRISTOL: Not that damaging. Most of this -- the decline in the polls was actually before that, and I do think it is substance that is killing him, if I could just return to health care for a minute.

They can demonize the -- try to demonize the insurance companies all they want. Big insurance is not against Obama's plan. You know, facts really do matter. What does big insurance hate? Senator DeMint's proposal to let people buy insurance across state lines, which would introduce competition in health insurance. Big insurance is OK with carving up the market in an oligolopolistic (sic) way.

So you know, this is what you do when you're desperate. You're trying to sell a big proposal. Instead of selling it on the merits, you try to make it a political campaign where people don't like the insurance companies who supposedly like your proposal.

But you know what? People are capable of not liking the insurance companies and not liking Obama's reform.

LIASSON: There is one thing -- there is one thing that the insurance companies don't want. They love the individual mandate because they want the big new market. They do not want a public option competing with private insurers.

And I think that is the one thing that is taking on more and more water every day as this thing goes on, and I wouldn't be surprised if, in the end, the public option -- the robust public option which liberal Democrats in the House particularly want is gone and we're left with something much more benign.

WALLACE: Well, it's interesting, because there -- there are stories in the papers today that say that the White House is now talking increasingly, Steve, about a glide path to a public option, which basically means that we'd put something in there -- maybe it's the co-ops, maybe it's something else -- and it's not the public option, but it's a glide path towards a public option down the line.

HAYES: Yeah, I think we're going to hear them say that this is the public option. They're going to sort of reframe the definition of what the public option is, because at the end of the day, he needs to be able to declare that he's done something.

He needs to be able to say to voters, and Democrats running in 2010 needs to be able to say to voters, "We've gotten this accomplished." They need to be able to point to a plan, whether it's with the public option, whatever it is, and say that they've delivered on something that they promised in 2008.

WALLACE: So, Juan, again, getting back to Obama's political standing, given the fact that back in ‘93, ‘94 "Hillarycare" crashed and burned, and despite a bad defeat in the ‘94 congressional elections Clinton still won re-election, how much does Obama have riding on health care reform the rest of this year?

WILLIAMS: Oh, it's just about everything. I mean, it is his major domestic agenda. He needs to get it through. He needs to claim some victory, as Steve was saying, no matter what it is. He's got to have some kind of victory in hand.

It's important to understand here, at the moment, in terms of the polls, he's actually a little more popular than President Clinton was at a similar time, a little less popular than George W. Bush at the similar time.

But if you look at his numbers, what it suggests is that, you know, he can get this done. He has to keep his numbers up sufficiently so that the American people continue to trust him.

In terms of the polls, even as he's slipping, what you see is the American people like him and they trust him. If he loses that, then he's going to lose this fight.

And I think that's why, to get back to Mara's earlier point, as compared to Clinton, where Clinton said, you know, "Here's the plan, I'm creating it in secret and I'm going to unveil it," Obama has let the -- President Obama has allowed the Congress to do this.

And now people are saying, "No, we want to know what you think. We want to know what you defend."

I think the insurance companies, Bill, by the way, are happy to have the status quo, and President Obama is the one who's speaking for change.

WALLACE: Real quick, Bill, do you think the president has everything riding on this? Because you know, we do overstate.

KRISTOL: No, of course not. And incidentally, the Obama- besotted media here with Mara -- personified by Mara and Juan think Obama's great, he shouldn't have let Congress do it. That's crazy.

Henry Waxman is 10 times better at doing this than President Obama. He's done a great service for the president by managing to get this through, pretty amazingly, the Energy and Commerce Committee.

The problem isn't that Obama's going to -- the idea that President Obama is going to ride to the rescue here -- I don't buy it for a minute.

WALLACE: All right. We have to take a break here. We're going to ride to the rescue. And when we come back, a new government program that worked perhaps too well and too quickly -- our panel's take on "cash for clunkers," after the break.

(COMMERCIAL BREAK)

WALLACE: On this day in 1990, Iraqi forces invaded Kuwait. Saddam Hussein's army overwhelmed the oil-rich neighbor. The invasion eventually led to the Persian Gulf War. Stay tuned for more from our panel and our Power Player of the Week.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JEB HENSARLING: ... maybe we should have a "cash for cluckers" program and pay people to eat chicken.

(END VIDEO CLIP)

WALLACE: Members of Congress offering up some differing thoughts about the "cash for clunkers" program.

And we're back now with Bill, Mara, Steve and Juan.

First of all, I want to deny that we're talking about the subject because I wanted to play Jeb Hensarling again talking about "cash for cluckers," although I do like -- although I do like the line.

But, Mara, what should we make of this program, which gives rebates to people to sell their old cars for more fuel-efficient new ones? Should we make of it that it's a very remarkably stimulus, 250,000 cars sold in the first week, or should we make of it that the government so grossly underestimated how long its billion dollars would last?

LIASSON: Well, certainly the second is true. I mean, they had to add another billion dollars because it's so popular.

WALLACE: Another $2 billion...

LIASSON: Another $2 billion...

WALLACE: ... in the House.

LIASSON: ... so it was more popular -- because it was so popular.

Look, I do think Jeb Hensarling has a point, and it's a Keynesian point. I mean, I think it was Keynes who said just give money to people to dig holes and fill them up again. Just anything to get money out into the economy is a -- is a stimulus. And that's exactly what this is doing.

I don't think it's doing much for the fuel economy standards of the American car fleet or will really make that...

WALLACE: Well, it is getting people into car dealerships.

LIASSON: Yes, it's getting people into car dealerships and spending money, and that in itself is fine. It's such a tiny, tiny drop in the bucket of the entire stimulus program that I don't think the harm it does is very great.

Now, would it be better to give people more rebates, payroll tax rebates, or extend unemployment insurance? That might be a simpler, more straightforward way of stimulating the economy. But I don't think this does very much harm.

WALLACE: Steve?

HAYES: Well, it's amazing to me that this plan that combines politicians and used car dealers is as popular as it is. Add lawyers and journalists and ex-cons -- it could be -- it could bury it.

I think the problem with the program is, as Jim DeMint said earlier in the show, it demonstrates government inefficiency in a huge way, and it comes at a time, I think, when people are talking about bigness in government with respect to the president's health care program.

The program was supposed to start on July 1st. They couldn't start it, despite $50 million in administrative costs, until July 24th. It ran out of money that was supposed to last until November -- ran out in a week.

You have government computers crashing. You have car dealers unable to get online to register these "cash for clunker" trades. They're going to be fined $15,000 if they don't do it.

This is an administrative nightmare, and it comes in the middle of a time when we're talking about the government, you know, as Jim DeMint said, in effect, taking over one-sixth of the U.S. economy.

WALLACE: So, Juan, this sailed through the House in one day by a 3-1 margin. But as we heard from Jim DeMint , there is opposition in the Senate not only from DeMint and John McCain on the right, but also from Democratic senators, including Claire McCaskill , who is generally very supportive of this president.

And given the fact that they're up against this August break, are they going to get it through the Senate?

WILLIAMS: I think they will. I mean, largely the opposition that comes from Democrats in the Senate has to do with raising the fuel efficiency standards, as opposed to simply condemning the program.

This -- what's surprising to me is that Republicans are so negative about this. This is a wild success. This is a moment to say, "Hey, look at this. This is money that's pumping up the economy, pumping up consumer confidence." Car sales for the first half of this year were down 35 percent. It's good news to have the local car dealers selling, people in the lots, building consumer confidence. If consumer confidence right now was really high, the recession would definitely be over. We wouldn't have any debate about it. Business and Wall Street believe the recession is over. It's individuals, you and me, who are saying, "You know what? I want to save more money. I'm not sure I really want to take that vacation right now or buy that car right now."

This program, it seems to me, should be hailed by Republicans as the kind of stimulus we want, as opposed to giving money to big boys on Wall Street.

WALLACE: Bill Kristol, are you prepared to hail this program, hail "cash for clunkers?"

KRISTOL: Well, by Juan's principle, we should just give away more money, because it would boost consumer confidence even more.

Why stop at $4,500? That's not really very much. If you really want consumer confidence, give $10,000, $20,000 for cars. And why only cars? What about boats and houses and food and everything else?

WILLIAMS: What about a -- what about an economic...

(CROSSTALK)

KRISTOL: This is a disgrace. Here's why it's a -- it's a disgrace that someone like Juan is praising this.

This is going to middle-class and upper-middle-class families who can afford to buy a car even with the $4,500 right now, a new car for 20, 25, $30,000.

Unemployment insurance is running out. Long-time unemployment -- long-term unemployment insurance is running out, as you and Senator DeMint discussed. That -- this money could pay for -- actually to help people who really are down on their luck.

And if liberals were serious about being liberals and helping poor people, they would be targeting this money to those who need it, not to a bunch of upper-middle-class people who have some cars sitting around from 12 years ago and now were going to buy a new car anyway a year or two years from now, and now they're just accelerating their purchase to get 4,5000 bucks...

(CROSSTALK)

WALLACE: So, Juan, are you a "clunker" limousine liberal?

WILLIAMS: That's what -- apparently so. I didn't realize it, but with Bill's help, I'm redefining myself as decided for Obama and a limousine liberal.

KRISTOL: Absolutely.

WILLIAMS: But let me just say it's accelerating getting this country out of a recession, and the money is not going to big boys. It's going to people -- average Americans, Bill.

They're the people who are going to spend money, and if we build their confidence up, get this economy revved again -- and that helps everybody. Then you don't have to pay for more unemployment benefits.

(CROSSTALK)

HAYES: You don't know that it's going to average Americans. You don't know that it's going to average Americans.

WILLIAMS: Who's buying a car? You see...

HAYES: What about -- look.

WILLIAMS: ... the example from the car dealers. The car dealers say somebody comes in who says, "I was going to buy a car. I was thinking about it. Eighteen or $22,000 -- this drives it down a little bit. I'm going to do it now." That's good news.

HAYES: This will have the effect of also distorting the used car market. And when you have people buying new cars, you're distorting the used car market. You're taking cars that might be more fuel efficient than other cars that people are getting rid of and killing them.

You're pouring -- literally pouring stuff into the engine that will kill these cars...

WILLIAMS: To get rid of them.

HAYES: ... that will get rid of them. And they may far more -- they may be far more fuel-efficient than these other cars that people are trading in.

WILLIAMS: Look, I think history has shown that you want to be proactive when you're dealing with economic recession, not just stay -- you know, lean back.

And in this situation, rather than look at the glass as half empty, why don't you say, "Wait a second. This is improving fuel efficiency and getting Americans in new cars?"

HAYES: So you're assuming that all economic activity is good economic activity.

WILLIAMS: In this case...

HAYES: And that's not true.

WILLIAMS: ... it is. In this case it is.

HAYES: So why not do it -- why not do it for televisions?

(CROSSTALK)

WILLIAMS: For televisions? Because the auto industry has lots of subsidiaries, so you get people more jobs. And we want jobs for more Americans at this point.

KRISTOL: Look, this is slight -- this is very small in terms of its overall economic effect. But to the degree it has an effect, it's slightly going to increase consumption and spending the next quarter -- the next quarter will probably be positive on the GDP -- and it's increasing the chances -- and policies like this are increasing the chances -- of a W-shaped recession.

We're going to come out a little bit in late 2009 because we're pouring all this money in, but there's no sustainable demand, and we're borrowing from the future. People are buying a car now that they would otherwise buy in six or nine months...

WALLACE: Mara...

KRISTOL: ... and it's more likely that we will have a dip in 2010.

WALLACE: ... I'm not -- I want to -- let me just step back for a minute and give this a macro look as we -- as we get to the end of this segment.

What is the danger for Republicans -- because we did see some good economic news -- that Republicans who have gone on record against the president's policies, against the stimulus, whether that was responsible or not -- if this economy really does begin to turn around, are they in trouble?

LIASSON: Oh, I think there's big danger. There's big danger for Republicans. Just like there's danger for the president to oversell the green shoots, there's danger for the Republicans, because you know what? This economy is going to turn around at some point, and they're going to be left out there saying that everything was bad and none of this would work.

And at that point, the bully pulpit of the White House gets to be very powerful, when there's good news to trumpet.

WALLACE: Do you agree with that, Steve?

HAYES: I do. I don't think it's going to be because of "cash for clunkers." I don't think it's going to be because of Obama's stimulus package. If I'm Republicans right now, I'm out there talking about just how little of the stimulus package has actually been spent to set the stage for making the argument that this stimulus package wasn't, in fact, stimulative.

WALLACE: But if, in fact, we see that the third and fourth quarter -- that growth is up and some time in 2010 unemployment goes down...

HAYES: Right.

WALLACE: ... does it matter what the reason was?

HAYES: Well, I don't -- I'd be surprised if unemployment goes down that quickly. But if it does, yeah, I think they need to be making setup arguments now, talking about the role of the Fed, talking about the other things that have contributed to the turnaround.

WILLIAMS: Well, why won't you talk about the fact that because of the stimulus there's been efforts to limit foreclosures, unlock the credit markets? These are positive things, and yet everything is focused on the negative.

(CROSSTALK)

HAYES: Seven to 10 percent of the stimulus has been spent -- 7 to 10 percent.

WILLIAMS: Right, so there's more...

HAYES: And you're going to give that credit...

WILLIAMS: ... coming.

HAYES: ... for turning around the economy?

WILLIAMS: Bill Kristol's saying, "Oh, we're going to go down again." More is coming in the future...

WALLACE: Gentlemen...

WILLIAMS: ... to help with just that problem.

WALLACE: ... lady, we have to end this. I want to thank you all.

I never in my wildest dreams imagined that we would have such a conversation about "cash for clunkers."

Don't forget to check out "Panel Plus," where our group here continues the discussion right after the show on our website, foxnews.com/fns.

And also, please visit our new blog at foxnewssunday.com where you can read about my private concert from Paul McCartney. Honest.

Up next, our Power Player of the Week.

(COMMERCIAL BREAK)

WALLACE: With the news Friday about Senator Chris Dodd fighting prostate cancer, it reminded us of the battle another member of Congress secretly waged for more than a year, a story we first told you about in April.

Here's our Power Player of the Week.

(BEGIN VIDEOTAPE)

WASSERMAN SCHULTZ: You know, I just -- I just dealt with it. I'm not someone that -- I don't know, I just dealt with it. WALLACE: Debbie Wasserman Schultz has blazed quite a path since coming to Congress four years ago. The South Florida Democrat rose in the House leadership, then became a leading campaigner for Hillary Clinton and, after she lost, for Barack Obama .

As I was researching your career, the phrase that keeps coming up over and over again -- rising star.

WASSERMAN SCHULTZ: I really have never paid much attention to that label. I'm just -- I'm a very focused person. I'm a "give me the ball" kind of person.

WALLACE: Which made what happened this March even more startling.

WASSERMAN SCHULTZ: I didn't find my tumor early because of luck. I found my tumor early because of knowledge and awareness.

WALLACE: It turned out while Wasserman Schultz was traveling the country last year, she was fighting a secret battle with cancer that led to a double mastectomy and having her ovaries removed.

WASSERMAN SCHULTZ: ... without thanking my wonderful husband, my family, my friends, doctors, nurses and staff who supported me throughout this journey -- I'm so sorry.

WALLACE: It started in December of 2007 when the then-41-year- old found a lump in her breast.

When you got the diagnosis, how tough was that?

WASSERMAN SCHULTZ: It was devastating. It's a call that every woman dreads. It's one that in a million years I never thought it would happen to me.

WALLACE: Then a genetic test revealed a high risk she would get ovarian cancer or a recurrence of breast cancer.

WASSERMAN SCHULTZ: I have 9-year-old twins and a 5-year-old and a wonderful husband who I wanted to be around for for a long time.

WALLACE: In all, how many surgeries did you have?

WASSERMAN SCHULTZ: In all, I had seven.

WALLACE: But remarkably, almost no one knew. She scheduled a major operation nine days before she hosted a fundraiser for Nancy Pelosi .

WASSERMAN SCHULTZ: I had a drain taped to my body and a pain pack coming out of my chest which we hid in a purse, and I just hugged people gingerly.

WALLACE: Walking around the capital, she would have a staffer carry her briefing books. WASSERMAN SCHULTZ: I really stressed out about it, because it made me -- to me, it made me look like a prima donna, and that's just so not me.

WALLACE: Why did you decide to hide it?

WASSERMAN SCHULTZ: I didn't want it to define me, not " Debbie Wasserman Schultz who's battling breast cancer."

WALLACE: Now she has turned her challenge into a cause, pushing for a new campaign to teach women and doctors about the risk of breast cancer to those under 40.

WASSERMAN SCHULTZ: We need to ensure that every young woman in America can rely on more than just luck.

WALLACE: How has this experience changed you?

WASSERMAN SCHULTZ: It's made me not sweat the small stuff as much. If my kids would need me to test them for a social studies test on the phone and I'm going to be a little bit late to a speech, they're going to come first.

(END VIDEOTAPE)

WALLACE: And Wasserman Schultz keeps fighting through adversity. Last month she organized the first-ever congressional women's softball game to raise money for educating women under 40 about breast cancer.

Sliding into second base, she broke her leg, but her staff notes she didn't miss any votes in Congress and, by the way, she was safe at second.

And that's it for today. Have a great week and we'll see you next "Fox News Sunday."

For more visit the FOX News Sunday web page.
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