Senators McCain, Conrad, & Klobuchar on "Fox News Sunday"

Senators McCain, Conrad, & Klobuchar on "Fox News Sunday"

By Fox News Sunday - December 20, 2009

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

It's the Sunday before Christmas, but all through the Senate health care reform awaits to be finished. Can Republicans block the legislation? We'll ask their point man, Senator John McCain .

Can Democrats hold on to the magic 60 votes to pass their bill? We'll ask two of their key players, Senators Kent Conrad and Amy Klobuchar . McCain, Conrad and Klobuchar -- only on "Fox News Sunday."

Plus, the Copenhagen compromise -- is it a meaningful deal or empty rhetoric? We'll ask our Sunday group what it means for global warming and President Obama's image.

And our Power Player of the Week, honoring the nation's military during the holiday season, all right now on "Fox News Sunday."

And hello again from Fox News in Washington where we have been hit with 16 inches of snow. In case you don't know how Washington handles the white stuff, that qualifies as a full-fledged blizzard around here.

But the weather aside, the Senate is in session working on health care reform, and it looks like Democrats now have the 60 votes they need to pass it. Here to discuss what Republicans do now is senator John McCain .

And, Senator, thanks for coming in. Welcome back to "Fox News Sunday."

MCCAIN: Thank you, Chris.

WALLACE: Now that Senator Ben Nelson has signed on to the Democratic plan, is there anything...

MCCAIN: Signed on, is it (inaudible)

WALLACE: Well, we'll talk about that. Is there anything that Republican senators can do to stop the Senate from passing health care reform by Christmas eve?

MCCAIN: Probably not. But what we can do is continue winning the battle of American public opinion.

It's very clear since we have been waging this battle on the floor of the Senate and on the -- all over America that increasingly American public opinion is against this massive new addition to our debt and deficit and government intervention in health care in America.

So we'll fight the good fight. We will fight until the last vote. We owe that to our constituents, because we can't -- we must do everything. We must look back and say, "We did everything we can to prevent this terrible mistake from taking place."

WALLACE: Now, you laughed when I talked about Senator Nelson signing on. What do you think of the deal that was made that got him to be a supporter, the 60th vote?

MCCAIN: I'll let the American people judge the fact that Medicaid costs will not be borne by the state of Nebraska forever, and that puts an added burden on all the other states, including mine.

But I think the real problem here and the situation that we have gotten ourselves in is that the president of the United States when running said we would have a new way of doing business in Washington, there would be change, he -- we would negotiate across the table, we'd have the C-SPAN cameras in.

And obviously, with their majorities -- and I understand majorities -- they decided to govern from the left and without Republican participation. That's why they're in a position of having to purchase the last vote or two.

WALLACE: The nonpartisan Congressional Budget Office has scored the bill, has read it and analyzed it. And let's put up on the screen what it says.

It says this new Democratic plan cuts the deficit by more than $130 billion in the first decade, by up to $1.3 trillion over the second 10 years, and it expands coverage to 31 million uninsured. Senator, aren't those all good things?

MCCAIN: You know, first of all, that assumes that the cuts in Medicare, which are to the tune of a half a trillion dollars, are going to take place.

That assumes that things like the doctors' fix and others are taken care of, which they haven't been in the past.

The fact is that this is -- and of course, only Bernie Madoff would approve of this kind of budgeting. In other words, for the first four years after this budget is signed, the taxes are increased and the benefits cut, and the costs are reduced.

It is only after four years that the benefits kick in. So I'm not trying to get too arcane here, but if you go out and you buy a car, nowadays you don't have to pay for a year. Now this deal is you pay for four years before you get the benefits. That is budget gimmickry, and we all know it.

WALLACE: One part of the Democratic plan that you've hit hard, and you referred to it, is the almost half trillion dollars in Medicare cuts that are provided for in the bill. Here's what you said recently on the Senate floor.


MCCAIN: These are not attainable cuts without eventually rationing health care in America, and rationing health care for our senior citizens.

(END VIDEO CLIP) WALLACE: But, Senator, Democrats point out that during the last presidential campaign, last year, you proposed big cuts in Medicare and Medicaid, and Senate Majority Leader Harry Reid accused of you a, quote, "big belly-flop flip-flop."

MCCAIN: The fact is is what I proposed was changing the tax treatment of employer-provided health care benefits, that we would give Americans a $5,000 refundable tax credit to go out and buy insurance wherever they want to.

I also had medical malpractice reform. I also had ability to go across state lines to buy insurance of your choice, outcome-based treatment, wellness and fitness...

WALLACE: But -- but -- but...

MCCAIN: ... all of those...

WALLACE: ... to be fair, Senator...

MCCAIN: ... were reductions -- all of those lead to reductions in cost of health care.

WALLACE: But to be fair, Senator...

MCCAIN: And the fundamental -- wait. Let me just say, the fundamental of it was not providing -- was removing the tax benefit from health-care-provided (sic) health benefits.

WALLACE: But to be fair, in the campaign you wanted to cut government funding for Medicare Advantage and, according to a Wall Street Journal article in October of 2008, after talking to your top economic adviser, Douglas Holtz-Eakin, that you -- you proposed cuts to Medicare and Medicaid of $1.3 trillion over 10 years.

MCCAIN: And the immediately debunked that article by that Wall Street Journal writer. It was false. They called it false. It had nothing to do with our proposal.

Of course we need savings in Medicare and Medicaid. Ask Dr. Coburn. We can find all kinds of savings in fraud, abuse and waste. But we certainly aren't going to do it by taking away Medicare Advantage from 330,000 citizens of mine who are under Medicare Advantage program, which has been most successful.

We can reduce costs, but these kinds of draconian cuts that they're talking about, a half a trillion dollars, is certainly not doable in any way, shape or form. And it is violating the president's commitment to the people who are under Medicare.

WALLACE: As of today, the president -- as of today, the president has been in office 11 months. How do you think he's done? Has he been the president he promised when he ran against you?

MCCAIN: No, in this respect. He said there would be a change in the climate in Washington. There's been a change. It's more partisan. It's more bitterly divided than it's been.

I have never been asked to engage in a single serious negotiation on any issue, nor has any other Republican. Now they've brought single Republicans down to try to pick off one or two Republicans so you can call it, quote, bipartisan.

There's never been serious across-the-table negotiations on any serious issue that I have engaged in with -- I and others have engaged in with other administrations, both Republican and Democrat.

WALLACE: Are you saying...

MCCAIN: I'm saying there has been no real effort...

WALLACE: More partisan than Bill Clinton?

MCCAIN: Oh, in some ways, of course. Yeah. At least under "Hillarycare" they tried seriously to negotiate with Republicans.

There's been -- there has been no effort that I know of that -- serious across-the-table negotiations, such as I have engaged in with Democrats and with other administrations. And that was the commitment that the president made.

Look, they can govern however they want to with a majority, but the commitment that the president made to change the climate that, quote, "sit down and bring the C-SPAN cameras in so that --" and that's practically an exact quote, Americans can see who's on the side of the pharmaceutical companies and who's on the side of the American consumer.

Guess the most unsavory deal of all, of all these unsavory deals -- the pharma, with the pharmaceutical companies. We could have saved $100 billion to consumers by being able to re-import drugs from Canada. We turned it down.

Medical malpractice reform -- ask any doctor. They'll tell you that the practice of defensive medicine drives up the cost of health care. There's no provision in here for that because of the trial lawyers.

WALLACE: The president, talking to Oprah Winfrey, gave himself a grade of B-plus the other day and said if we get health care reform it tips into an A-minus. What grade do you give him?

MCCAIN: Well, I would still give him an incomplete, because I still think we can win overtime on this health care issue. I think he has fond out in Copenhagen in some rather bizarre scenarios that maybe it's more important to be respected than to be loved.

WALLACE: Well, let me ask you -- let me pick up on Copenhagen.

MCCAIN: And by the way, I don't -- presidents I know usually don't grade themselves. Usually they let the people grade them.

WALLACE: President Obama is just back from Copenhagen with a climate deal that he called an unprecedented breakthrough. How meaningful do you think it is?

MCCAIN: I think that the fact it has no binding provisions to it whatsoever is a rhetorical attempt to cover up what was obviously a serious failure.

But again, the American people right now are not interested in giving $100 billion to other countries, not when we have 10 percent unemployment, and we have people who can't stay in their homes and the serious economic situation that prevails in the United States today.

WALLACE: Some people are asking -- and I know you know this because you read the papers; you're aware of what people say -- "What's happened to John McCain ?"

You, for instance, were a big supporter of global warming legislation, and yet two of your closest friends in the Senate, Joe Lieberman and Lindsey Graham , came out with a provision and you said it was horrendous.

And on many issues observers say that you have become this year more combative and more conservative.

MCCAIN: I, unfortunately, have always been combative. Second of all, I'm having...

WALLACE: Have you always been conservative?

MCCAIN: Yes, although I've certainly stood up for the things that I believe in. But look. I'm -- I am happy with the honor of serving the people of Arizona. I am happy to be back in the arena. I'm happy that people listen to my views and enjoy the debate and discussion.

I still continue to work across the aisle with my Democrat colleagues. But the fact is this issue that's before us is one-sixth of the gross national product of our country. We have to fight with every tool we have.

And the debates we've been having have been vigorous, respectful and very important. And American public opinion has swung way over in our direction. Most Americans now want to do nothing. And I -- and I -- at this moment, and I agree with them.

WALLACE: Does the fact -- you may argue whether it is a fact, but does the perception that you have moved to the right this year have anything to do with the fact that you might face a possible primary challenge from former conservative congressman J.D. Hayworth next year?

MCCAIN: I have always taken every race that I'm in seriously, no matter who's running against me. But the fact is that I have gotten back in the arena. I have fought for the things that I believe in. I've worked with the administration on defense acquisition reform, on a whole variety of issues.

I will continue. I believe the job of the loyal opposition is to work with the president and the Democrats where you can. But where it's philosophically fundamentally different, do everything you can to see that your point of view prevails.

And I've been very happy to have the teamwork with my colleagues and the Republicans in the Senate and the work they've been doing, and I'm proud of every one of them.

WALLACE: In the time we have left...


WALLACE: ... let's do a lightning round...


WALLACE: ... of quick questions, quick answers. I know you like this.

MCCAIN: It's my favorite.

WALLACE: You support, and have supported for years, the idea of closing Guantanamo.


WALLACE: What do you think of the president's plan -- apparent plan to send up to 100 detainees from Guantanamo to a prison in rural Illinois?

MCCAIN: I think it's a serious mistake, and I think that the way to dispose of the -- of this issue is by having an overall policy.

Right now they're going to -- they're going to try terrorists in New York City, thereby giving Khalid Sheik Mohammed what he wanted when he was captured. He said, "I want a trial in the United States and a lawyer." I think they're making a serious mistake.

WALLACE: What's wrong with Thompson, Illinois?

MCCAIN: Well, first of all, I think that it's anywhere in the United States. It's not the fact that it's Thompson, Illinois. It's any...

WALLACE: No, but what's wrong...

MCCAIN: ... any place.

WALLACE: ... with sending them there?

MCCAIN: I think that they should be either sentenced to have the kind of military commissions that we have outlined in law and may make -- have to make additional changes to, and -- because they are enemy combatants, and I don't think they should be kept in prison in the United States.

WALLACE: Iran keeps enriching uranium. It has now just tested a missile that apparently could hit Israel. Has the president's effort to diplomatically engage Iran failed? And what should he do now in terms of sanctions or military action?

MCCAIN: Well, obviously, we've just given the Iranians some additional time to continue their efforts at acquisition of nuclear weapons. And we have additional information about the work that they are doing.

The president should impose sanctions and all the ones we've talked about and will on this program. But the president should stand up for the people who are demonstrating and risking their very lives on behalf of freedom on the streets of Tehran.

The president refused to speak up when the first days of those demonstrations I think was wrong and I think we ought to have -- be able to -- I think we should pass legislation to encourage that -- those demonstrators, to provide them with the information that they need and the moral support.

It's not an accident the demonstrators are saying "Obama, Obama, who's -- are you on -- are you with us or are you with them?" Let's make it very clear we are with these people who are struggling for freedom as we always have.

WALLACE: Finally, your running mate, Sarah Palin , went on a -- I assume you know this -- went on a vacation -- you can look at the picture there -- to Hawaii and wore a sun visor with your name blacked out in magic marker. She says she adores you, she just wanted to travel incognito. Your reaction?

MCCAIN: Can't you take her at her word? It's -- Sarah and I and Todd, Cindy -- we have a wonderful relationship. We're dear friends. She is a -- going to be a force in the Republican Party for a long time. And the hysterical attacks on her from the left continue to validate that.

WALLACE: So what do you think of the blacked out...

MCCAIN: Oh, it's fine. Sarah said she wanted to be a little bit incognito. I don't blame her. I understand that. But the fact is -- I mean, are we in such a world now where we have climate change, health care reform, all these issues that are going on -- massive debts and deficits -- that we worry about Sarah Palin 's visor?

WALLACE: I didn't ask you about Tiger Woods, Senator.


MCCAIN: Thank you. Thank you, Chris.

WALLACE: Thank you so much...

MCCAIN: Good to be with you.

WALLACE: ... for coming in, especially braving the elements to come in today. Merry Christmas to the McCain family, and we'll see you in the new year, sir.

MCCAIN: Same to you.

WALLACE: Always a pleasure.

MCCAIN: Thank you.

WALLACE: Up next, we'll hear from two top Democrats about the compromises they had to make to get the 60 votes for health care reform. We'll have the inside story right after this break.


WALLACE: Early Saturday morning as snow fell on Capitol Hill, Democrats secured the 60th vote from Nebraska senator Ben Nelson . Now it appears to be just a matter of time and parliamentary procedure before they pass health care reform on Christmas Eve.

Here to discuss the package are two key Democratic senators. Kent Conrad is chairman of the Senate Budget Committee. Amy Klobuchar is a member of the Joint Economic Committee.

And, Senators, welcome to "FOX News Sunday."

Senator Conrad, we went through some of the strong points of the Democratic plan with Senator McCain, so I'm going to ask you to address some of the problems, and let's put them up on the screen.

According to the CBO, federal spending on health care goes up about $200 billion over the next decade. It doesn't bend the cost curve down. The bill raises $518 billion in new taxes at a time when unemployment is 10 percent. And it leaves 23 million Americans still uninsured.

As chairman of the Senate Budget Committee, isn't there a lot wrong with this bill?

CONRAD: Look, no legislation is perfect, but this bill is a very significant advance to address health care reform. Fact is it reduces the deficit in the first 10 years by $130 billion, in the second 10 years by $1.3 trillion. That is a major accomplishment.

With respect to bending the cost curve, CBO says in the second 10 years it does bend the cost curve -- in the first 10 years very modest increase, but you'd expect that when you cover 30 million more people.

What's remarkable is in the second 10 years, according to CBO, it does bend the cost curve in the right way.

WALLACE: One of the ways that Democrats got Ben Nelson 's vote -- and this has been remarked on by Senator McCain -- was to pick up the entire cost, federal and state, of the expanded Medicaid coverage in one state, Nebraska, forever, what Republicans are calling now the "Cornhusker kickback."

That's tens of millions of dollars on top of the $300 million to get Louisiana senator Landrieu on board. As chairman of the Budget Committee, how do you justify sweetheart deals for a few states?

CONRAD: Well, on a policy basis, look, all states have the federal government picking up all of the Medicaid expansion through 2016, so that's...

WALLACE: But only one state after that.

CONRAD: But the fact is no Congress can bind a future Congress. So that's, frankly, not without a whole lot of manning. Let's just be frank. The reality is every state has all of the Medicaid expansion paid through for 2016.

After that, states like mine and states like Nebraska that are going to be having Medicaid expansions, most of it, the overwhelming majority of it -- in my -- in my state, 99 percent of it is paid for by the federal government.

WALLACE: All right. You said...

CONRAD: That's true of all the states that...

WALLACE: You say it's a policy matter...

CONRAD: ... are in that category.

WALLACE: ... it's a political matter. I mean, does it offend you in any way that Louisiana gets a special deal, Vermont gets a special deal, Michigan gets a special deal?

CONRAD: Look, my state gets a special deal. Virtually every state gets some kind of differential treatment based on their situation.

My state along with the other frontier states, five in number, get an increase in their Medicare levels of reimbursement because we're the lowest states in the country. And that doesn't offend me at all. It's, in fact, fair.

KLOBUCHAR: And actually, Minnesota, as a part of an amendment that Senator Grassley introduced, also because we are a high-quality, low-cost state, got a good deal on that as well.

And I'd add one more thing, that medical device tax -- remember that? -- $40 billion reduced to $20 billion. Evan Bayh and I led that effort because it fell on our states -- Indiana, Minnesota, Massachusetts. So when you really look at this...

WALLACE: But I thought -- I thought President Obama was going to change the way business is done in Washington. This sounds like politics as usual.

KLOBUCHAR: I think you would agree with me on the reduction of this tax. It's better for the country. It's better for the country that with this burgeoning industry that exports products... WALLACE: But it wasn't -- it wasn't done for that reason. It was done to get -- I mean, it was done in all these cases to get individual senators.

KLOBUCHAR: People fight for their own states. That's the nature of a democracy.

WALLACE: Isn't that business as usual?

KLOBUCHAR: I think that that is not the business as usual when Obama was talking about -- he was talking about under-the-table deals that people find out about two years later. I'd say this process has been fairly transparent. Like we're up here talking about it right now.

WALLACE: So we find out about it now instead of two years. All right.

Senator Klobuchar, let me ask you about another aspect of the effort to win over Senator Nelson. Democrats agreed to further limit abortions in these new public exchanges.

In fact, Nebraska or any state can vote to ban any policies being offered on the public exchanges from offering any abortions, even to women who would pay for them privately. As a pro-choice woman, how can you accept that?

KLOBUCHAR: Well, first of all, I preferred the original Senate language, but we had a job here, and that was to get something done for the people of this country with premiums escalating, Medicare going in the red by 2017. We had to get something done.

What this was, was a balance. There was general agreement. You want to keep the Hyde amendment in place. That's been in place in decades. It says no public funding for abortion. The question was how do you do that when you're dealing with private exchanges.

And what the compromise said was basically if you're getting subsidies, you can choose, you can have a policy that has abortion in it, you can you have a policy that doesn't. There always has to have a policy that doesn't cover abortion.

If you're in one that covers abortion, then you have to have two transactions, basically, for how you pay for that to make sure that no public funding...

WALLACE: Are you -- are...

KLOBUCHAR: ... is used for that abortion.

WALLACE: Are you offended by this?

KLOBUCHAR: I am offended that so many people don't have insurance in this country. I'm offended that kids get sick and their parents are running around trying to get treatment for them because they are kicked off their insurance. I'm offended by that. Would I have preferred the Senate language originally? Of course I would.

WALLACE: Let me ask you, though, as a liberal Democrat, there's a lot that you have to stomach in this bill. And let's put it up on the screen. No public option. No Medicare buy-in. No end to the antitrust exemption for insurers. New restrictions on abortion.

As you well know, you're a liberal. There are a lot of other liberals like Howard Dean, like some of the big labor unions, that say it's a bridge too far, that this is no longer true reform, that it's a bailout for insurance companies, and the bill should have been voted down.

KLOBUCHAR: My major focus here, Chris -- my major focus was always on reducing cost. Minnesota is a medical Mecca. We have high quality, low cost. And I wanted to take that model. And you see all kinds of cost reforms in this bill.

So that what's happening right now is a bunch of our taxpayers' money -- getting sucked down to Florida where they don't have as efficient a health care system. I think the people of Florida should have Mayo-type services.

WALLACE: So what...

KLOBUCHAR: They should be able to have high-quality, low-cost care. That was my major focus.

WALLACE: So what do you say to a liberal like Howard Dean who says kill the bill?

KLOBUCHAR: You know, I disagree with him. I don't have that ability to just, like, leave my Christmas presents and go home. We had to get something down here.

WALLACE: Senator Conrad, what do you expect to happen? Because now this isn't the end of the process. It's just another step in the "Perils of Pauline."

What do you expect to happen in the House-Senate conference next month? After struggling for months to get Senate Democrats on board to accept this, what are you going to do for Democrats who have a bill which is considerably to the left of your bill?

CONRAD: I think any bill is going to have to be very close to what the Senate has passed because we're still going to have to get 60 votes. And anybody who's watched this process can see how challenging it has been to get 60 votes.

And let me say, if I can, on this question of reducing Medicare, there are $500 billion of savings to Medicare. Most of those savings have been negotiated with the providers. They're going to get less than they were anticipating. They've agreed to those savings because they know they're going to get 30 million more customers. That is a dramatic increase in business for them, and they are sharing some of the savings so that we can pay for this bill. There's not unreasonable.

WALLACE: But to go back to the question of the conference, you're saying that you don't -- you can't go further, that the House is basically going to have to accept -- the House is going to have to accept the Senate bill?

CONRAD: It is very clear that the bill, the final bill, to pass in the United States Senate is going to be -- have to be very close to the bill that has been negotiated here. Otherwise you will not get 60 votes in the United States Senate.

So, look. This is a bill that does reduce the deficit according to the independent expert. This is a bill that expands coverage to 30 million people. This is a bill that will begin to control the cost explosion, has got critically important insurance reforms, delivery system reforms.

So those who say kill the bill, I think they have really missed the boat. This is critically important legislation to this country. And frankly, to do nothing, which is what I heard Senator McCain say -- that's not an option.

We are headed for Medicare being bankrupt in eight years. Premiums are rising three times as fast as wages. Doing nothing is really not an option.

WALLACE: Senator...

KLOBUCHAR: (inaudible)

WALLACE: Let me pick up, if I can...


WALLACE: ... because we're running out of time, Senator Klobuchar.

According to the latest Rasmussen poll -- and let's put it up on the screen -- 57 percent of voters given a choice between do nothing -- you were just talking about this, Senator Conrad -- do nothing or pass this bill, 57 percent say it would be better to pass no health care reform bill. Only 34 percent say it would be better to pass the bill.

Senator, don't Democrats run a considerable political risk when you're going to pass major legislation with no bipartisan support over what seems to be almost a 2-1 opposition from the American people?

KLOBUCHAR: Do you know what the poll numbers were on Medicare when they voted for Medicare decades and decades ago? Like 28 percent of the people favored it. Now 96 percent do.

I don't blame the people for being mad right now -- all of this bickering. This thing has gone on and on and on. They want us to get something done. My view is once we get this done, some of these reforms are going to hit immediately.

If your kid gets sick, you're no longer going to be banned from getting insurance. Seniors are...

WALLACE: Yeah, but most of them...

KLOBUCHAR: ... going to be able to...

WALLACE: ... aren't going to kick in till 2014.

KLOBUCHAR: Well, that got a little changed with this amendment. By 2011, you know, seniors are going to be able to start having some of their prescription drugs covered that weren't covered before. The taxes actually got moved, a number of them, to 2011. So you saw bringing together some of the taxation and the benefits that we didn't have before in this amendment.

WALLACE: Most of the benefits don't come in till 2014, Senator.

KLOBUCHAR: But a number of them come in sooner -- the real important one on the prescription drugs, the preexisting conditions on kids, the lifetime limits on what the coverage is. A number of them have been moved up.

WALLACE: Senator Conrad, we've got about 30 seconds left. You said the other day that in the short term this is going to be a political drag for Democrats. How come?

CONRAD: Because there have been hundreds of millions of dollars spent misrepresenting what is in this bill, and people are confused. People of my state have had millions and millions of dollars of advertising spent saying things that just aren't so about this legislation.

WALLACE: Senators, well, that's one of the reasons we have you and these shows exist, is so you can -- you and Senator McCain on the other side can set the record straight.

Thank you so much for coming in today, both of you. I know it wasn't an easy trip, although for you, from Minnesota...

KLOBUCHAR: I have all the (inaudible).

CONRAD: North Dakota.

WALLACE: Exactly. I mean, this I...

KLOBUCHAR: We're used to it. Why do you think you invited us today?

WALLACE: Well, actually, we did take that into account. Thank you both.

KLOBUCHAR: Thank you. WALLACE: Merry Christmas to both of you.

KLOBUCHAR: Appreciate it.

CONRAD: Merry Christmas to you, Chris.

WALLACE: Up next, the president goes to Copenhagen and comes back with a climate deal, sort of. Our Sunday panel breaks it down. Back in a moment.



OBAMA: Today we've made a meaningful and unprecedented breakthrough here in Copenhagen. For the first time in history, all major economies have come together to accept their responsibility to take action to confront the threat of climate change.


WALLACE: President Obama trumpeting a climate deal in Copenhagen Friday.

And it's time now for our Sunday group -- Fox News contributors Bill Kristol of The Weekly Standard, Mara Liasson of National Public Radio, former White House press secretary Dana Perino, and Juan Williams, also from National Public Radio.

So, Bill, as we just heard, the president calls the climate deal an unprecedented breakthrough. What do you call it?

KRISTOL: I'm happy about it. There was no binding agreement. There's not going to be a binding agreement next year in Mexico City. Kyoto, the current accord, runs out in 2012 and we'll be liberated from all this foolishness.

So I enjoyed watched the spectacle at Kyoto -- Hugo Chavez, Ahmadinejad giving anti-American speeches, huge applause from the delegates, snowing during this global warming conference. And I'm glad that it has done limited damage to the U.S. economy.

LIASSON: And that's why, probably, politically this issue has been defused a little bit for the president. I think there is a kind of perverse silver lining in this.

I think, obviously, it was a disappointment for environmentalists who wanted something binding and wanted more firm targets, but I think what this means is that a very small step has been taken, and now we'll see if the Senate will pass this treaty.

But this no longer is this huge burning issue because some of the juice has been taken out of conservatives' opposition to this.

WALLACE: But do you agree with Bill, in his own backhanded way, that Copenhagen didn't accomplish much? LIASSON: Oh, of course. Copenhagen did not accomplish what it set out to do. It was a symbolic step forward, not a big substantive step forward, but also I think this is probably the end of this kind of process, all these nations, this United Nations mega-negotiations format.

From now on, it's going to be a smaller group of countries. And really, it boils down to two, the United States and China.

WALLACE: Dana, it may be all promises but let's go through it. It does commit each country to state its current pledge for cutting greenhouse gas emissions. It does put the various countries on record to promise to allow monitoring of their programs, whether they do it. Isn't that something?

PERINO: Well, it's a little bit of something, but it is a scaled-back version of what China and India had even agreed to last year.

What I think is interesting is what Senator Murkowski has said, a way forward, which is for the United States to get some certainty in regards to future energy policy in the United States.

Let's assume there's no international agreement and let's move forward and get an energy bill that allows us to build new nuclear power plants, get all the sorts of different types of energy that we need, and just move forward so that we can bring some certainty to this, because I think ultimately that helps the economy.

WALLACE: Juan, are your colleagues here being too cynical? I mean, did it really accomplish as little as they say it accomplished?

WILLIAMS: It accomplished nothing. Zero. Zilch. That's why Bill Kristol's celebrating at the other end of the table. From his perspective, he wanted nothing done. Nothing was done.

The Chinese were even ducking President Obama while he was there so that they wouldn't have to negotiate a deal. And there's nothing binding about this.

The poor countries that were looking for some kind of relief, some kind of leadership from the major nations, China and the U.S., got zero and feel more threatened now than they did before the conference.

You know, the reason that President Obama changed his schedule -- initially he was to go early in the process, and the reason then was that his credibility would not take a hit if no deal was accomplished. They were going to just keep him at the front-end celebratory part.

Instead, they decide, "You know what? No, there's a chance for a deal. China and India are talking. President Obama will go at the end, and he will, you know, be there to say he's the deal-maker." Well, he goes and nothing happens.

And he's come back with no deal on emissions, no monitoring. The Chinese said it would be an invasion of their sovereignty. It really is damaging now to his stature internationally as well as here at home. I think people who are his supporters worry that he has taken a major hit.

WALLACE: You know, Bill, Juan was talking about what the developing countries wanted. They wanted more than just binding treaties. They wanted money.

And one of the things that the big countries, the E.U. and the United States, committed to was $10 billion a year for three years to help them cut their greenhouse gas emissions, and then -- I love this -- an aspirational goal -- I have an aspirational goal over Christmas to lose 10 pounds. They have an aspirational goal of $100 billion a year by 2020.

What do you think are the chances that the U.S. will pay those billions of dollars out to the developing countries?


KRISTOL: Not great. I'd love to see that debate in Congress. I'd love to see the assurance that this money going to various developing countries is going to go to what it says it's going to go to, not to the pockets of various rulers -- leave aside whether it's worth actually spending that money in the first place. So I don't think that's serious.

Look, the one thing that happened that we're going to remember is not the Copenhagen meeting. It's the Environmental Protection Agency ruling issued on December 7th, a day that will live in infamy and that will live in infamy for the EPA, which is an attempt -- a huge regulatory scheme.

This is binding. This is real, unlike Copenhagen. And this will be a huge regulatory burden on the U.S. economy. I believe Congress -- next year Congress isn't going to be debating Copenhagen.

They're going to be debating overriding this EPA regulation, which -- I think when people see the extent of it, and its intrusiveness, and the cost to the U.S. economy, people are going to be shocked. And I think Congress can really override it.

WALLACE: Well, let me just pick up on that with you, Mara, for a minute, because let's remind people that the Supreme Court...


WALLACE: ... said that the EPA could regulate carbon dioxide...

LIASSON: That's right.

WALLACE: ... and other greenhouse gas emissions, and the EPA has now gone with this and has had an endangerment finding, saying it's a danger to people's health and that they're going to regulate it unless Congress...

LIASSON: Yeah. WALLACE: ... legislates. But there's some blowback and pushback in Congress where they're saying, "You know, we may override the EPA..."


WALLACE: "... and prevent them from doing that."

LIASSON: Well, that might happen. I mean, I think right now the ball is in the Senate's court, and they have to figure out what they want to do about the EPA, what they want to do about cap and trade, and when they want to do it. And yeah, I think that's what's going to happen.

But the idea of the EPA moving forward was to put pressure on the Senate, that if they weren't going to go forward, that the administration would do this, because it does have these powers conferred upon them by the Supreme Court.

KRISTOL: But these powers, if I just could explain, are pursuant to legislation. The court said the legislation entitles -- perhaps even requires -- the EPA to do something. The legislation could be amended.

LIASSON: Well, then they can change the legislation, sure.

KRISTOL: And I think you will see Republicans in Congress moving very hard to either stop the regulation, which they can do independently, or change the Clean Air Act to make clear that the Clean Air Act, which has succeeded in many ways, was designed for a lot of things. It was not designed to regulate the entire U.S. economy.

WILLIAMS: No, it wasn't -- all they're trying to regulate right now is some of the small trucks that are joining with the Transportation Department and saying, "Let's put some limits on emissions." This is a good thing.

Let me ask you, do you want to live in Beijing where you can't breathe the air? Where they can't even have Olympics -- you've got to -- because the air is so filthy? Do you want to have gas masks...

WALLACE: Did they not have the Olympics in Beijing?

WILLIAMS: They had to -- they shut down all the factories. They kept the traffic out of the city.

I think Bill Kristol wants to live, you know, in a place with dirty air, hand out gas masks to the children before they go to school. And you say, "Oh, yeah, it's just a matter of the American economy." The American economy would be helped by going green.

WALLACE: Wait. Wait a minute.

WILLIAMS: That would be innovation.

WALLACE: Let's -- Dana?

PERINO: Well, here -- look, the Clean Air Act has done really great things, and we all are looking at a beautiful sky today partly because of that. And those aren't going to go away.

In fact, they're ratcheted down so that people are not allowed to do as much emissions as even they were two years ago. But the difference is carbon. And how do you find the technologies that will allow you to strip carbon out of emissions from traditional fossil fuel burning?

That's a technology play, which is one of the reasons I think Senator Murkowski's got a good point. To move forward, do it smart, do it effectively, and just assume there's no international agreement, and get a bill down here for us.

WALLACE: OK. We have to take a break here.

But when we come back, late nights, working weekends, and now a snowstorm -- we'll make sense of what the Senate was up to as they reached a deal on health care reform and what it will mean for you. Stay tuned.


WALLACE: On this day in 1963 the Berlin Wall opened for the first time, allowing West Berliners with special passes to visit family in East Berlin. The wall was finally torn down in 1989.

Stay tuned for more from our panel and our Power Player of the Week.



SENATE MAJORITY LEADER HARRY REID: From the very beginning, we knew the end result had to be a bill that saved lives, saved money and saved Medicare. We did that.



SENATE MINORITY LEADER MITCH MCCONNELL: This bill is a legislative train wreck of historic proportions.


WALLACE: Well, that was Senate leaders Harry Reid and Mitch McConnell putting their very different spins on the Democratic deal on health care reform.

And we're back now with our panel.

Bill Kristol, you have been nothing if not consistent for months in saying that you do not think that the Democrats are going to pass sweeping health care reform.

After the Nelson deal and the apparent 60th vote, and the apparent passage by the Senate, do you still feel that way?

KRISTOL: I think they still have problems in the House, but no, I think the odds are that they will -- they will succeed in the suicide mission that they have engaged on and will pass -- no, but for the first time in U.S. history will pass on a purely partisan vote a piece of -- a massive piece of legislation that is manifestly unpopular. Good luck. Good luck selling this.

LIASSON: Well, I agree that they're going to pass it. I think that Bill finally realizes that this thing had a certain kind of grinding momentum, as shaky as it looked at every step of the way.

I don't think it was an accident that President Obama chose the metaphor we're at the brink -- we're at the -- we're at the precipice of passing health care reform, because most of the time it looked like it was going to fall off the edge of a cliff. But yeah, I think they finally got a deal. Everyone has their price, and Ben Nelson had his. And when Planned Parenthood and the national rights to life groups both say they hate the abortion language, well, gee, maybe that means that they came out right in the middle.

But it can't -- it can't do two things at once. It can't make abortions both harder to get and easier to get with federal funding, so...

WALLACE: Dana, let's go through the bill, because it -- there's a lot to like in the bill, and let's put it up on the screen. It expands coverage to 31 million Americans. It cuts the deficit, according to the CBO, by $130 billion.

There's also a lot not to like in the bill. It raises taxes by half a trillion dollars and it greatly expands government's role in health care.

Looking at the pluses and the minuses, how do you sort it out?

PERINO: Well, I think that at the end of the day this is a massive entitlement expansion that's going to subsidize a lot of people without the reform that was needed.

So you look at the CBO report -- if you actually tease it out, they're basically saying, "We don't know really what's going to happen." It says that 23 million people are going to remain uninsured, so I don't know how to break out those numbers.

In addition to that, it does say that in 2010 they assume that doctors will be reduced in their reimbursements by 21 percent. This called "doc fix" up on Capitol Hill. It never happens.

And what I would like to see is for Speaker Pelosi and Harry Reid to make their caucuses sign a pledge today, before they pass this bill, that they will vote to cut doctors' pay by 21 percent. It has never happened before.

WALLACE: Juan, when you look at the pluses and the minuses -- your idea of pluses and minuses, I'm sure, are different than Dana's -- how do -- how do you sort it out?

WILLIAMS: Oh, I think this is -- you know, this is something that the American people are going to come to embrace over time. Right now we're all tangled up in the weeds about this idea, this amendment, who got what in order to get their vote, and it's a very negative perception. So if you ask people specifically about this in the polls, they tend to be negative.

But if you ask in general, "Do we need health care reform in this country," it's overwhelming. The American people want health care reform. Do we feel the insurance companies can be abusive? Yes. And what happens in this bill? The insurance companies now have to spend 80 percent of their premiums on actually delivering health care. That's a good thing. If you think about the fact that now we're going to have, like -- I think it's 94 percent of the American people under the age of 65 covered, have health insurance, that is a tremendous breakthrough. That's historic. That's a tremendous accomplishment for President Obama and this Congress. And that's a good thing to do. This Christmas season that's a gift to the American people.

KRISTOL: It's a gift...

LIASSON: You know, there's a...

KRISTOL: Go ahead.

LIASSON: No, I was going to say, you know, there's -- we're talking as if this as a completely done deal. This thing still has to be conferenced with the House, then it has to be passed, and then there is a huge, huge job to convince the American people that it is a good thing.

The White House is going to have to do that at the same time that Republicans are going to be saying every single day -- pointing out all the things that they don't like about it. So he has a huge...

WALLACE: Mara, let me just...

LIASSON: ... selling job. Yeah.

WALLACE: ... quickly pick up on that, about the conference...


WALLACE: ... because you heard Kent Conrad basically say, "Look, we were barely able to get..."

LIASSON: Right, right, right.

WALLACE: "... 60 on board for this." Obviously, the House bill is...


WALLACE: ... considerably to the left of this on the taxes, on the public option, and he was, in effect, saying, "Forget it, you -- we -- the Senate bill is the way it's going to have to be."

LIASSON: This is going to be a very painful thing for the House of Representatives because they have to realize that they're not in the driver's seat because the math is not on their side.

You know, 60 votes in the Senate is what you need to pass a bill, and they're going to have to agree to a bill that can get 60 votes in the Senate.

KRISTOL: Juan said this as a gift to the American people. I mean, some gift. It's a gift to big government. It's a gift to big insurers, who get a trillion dollars from the American public over 10 years, from 2014 to 2024. They get all these premiums that have to be paid to them, all these subsidies.

It's a gift to big pharma, to the big pharmaceutical companies, who don't get drug re-importation, a staple of pro-consumer Democratic legislative efforts for the last, what, five years. They've been trying to get the cheaper drugs re-imported. They gave up on that because they cut a deal for the big pharmaceutical companies.

And there -- and huge Medicare cuts, raising -- going to about $100 billion a year once this bill fully kicks in in the mid part of the next decade. Those Medicare cuts are serious. And the CBO -- if you look at page 19 of their report, the CBO says because of the Medicare cuts, this could reduce access to care or diminish the quality of care.

WILLIAMS: No, Bill...

KRISTOL: Reduce -- reduce access to care or diminish the quality of care.


KRISTOL: That's the core of it. This is going to hurt the quality of care and/or reduce access to care for Americans, especially seniors.

WILLIAMS: Yeah, you are going at scare tactics, especially aimed at seniors who feel they don't want any violation of their Medicare benefits in this country, even Medicare Advantage.

But you're not talking about a nation that's coming to grips with the fact that the cost of Medicare and Medicaid is escalating at such a rate that this whole system is going to do bankrupt. We have to do something.

Where are responsible Republicans who would say to the American people, "We are going to have to have some cutbacks and let's do it in an effective way that would allow the entire health care system to be reformed and cover more Americans, especially those children and the poor in need," you know?

PERINO: I think that there are Republicans that are willing to do that, and they've been saying so -- Mitch McConnell and John Boehner -- but this bill isn't it.

And I think also another thing politically that they have to think about...

WALLACE: Why isn't this bill it? Why is what's going to happen to Medicare in this bill so bad?

PERINO: Well, I think what it does -- it doesn't reform the program. It just cuts it. It takes $500 million and spends it on other services.

WALLACE: $500 billion. PERINO: $500 billion, excuse me. Thank you. And spends it on other services without reforming the program. And CBO says it doesn't -- it doesn't bend the cost curve down. It doesn't lower costs over time. I agree with you, Juan, that has to happen.

In addition to that, a spectacular breaking of a pledge -- President Obama said he would not raise taxes on the individuals he's about to raise taxes on.

WILLIAMS: The rich.

PERINO: He defined them as the middle class. That was his definition.

WILLIAMS: $250,000.

WALLACE: Well, we settled this here. Thank you, panel. See you next week.

And don't forget to check out the latest edition of "Panel Plus" -- good plug -- where our group here continues the discussion on our web site, and we will,, shortly after the show ends.

Up next, our Power Player of the Week.


WALLACE: It's become a Christmas tradition around here to share a story of how one family found a new way 17 years ago to express the holiday spirit. It's a remarkable example of gratitude, generosity and patriotism.

Once again, here's our Power Player of the Week.


WORCESTER: We wouldn't have the opportunities if it wasn't for the people that fought for us and who gave their lives for us.

WALLACE: It's that plain-spoken wisdom that has driven Morrill Worcester for years on a mission that has touched America's heart. Each December Worcester places wreaths at Arlington National Cemetery, and thousands of volunteers there are to help him.

WORCESTER: I think a lot of people think like I do. They just want to -- you know, they appreciate the veterans and they want to show it.

WALLACE: This story begins back in 1962 when Worcester, then a 12-year-old paper boy from Maine, won a trip to Washington. What impressed him most was Arlington, its beauty and dignity and those rows and rows of graves.

WORCESTER: Every one represents a life and a family and a story. They're not just tombstones. I mean, those are all people. WALLACE: 30 years later, in 1992, Worcester was running his own wreath company in Harrington, Maine. But as Christmas approached, he had a bunch left over.

WORCESTER: These wreaths were real fresh. They were great, just made, and I just didn't want to throw them away.

WALLACE: He thought of Arlington and all those graves. When the cemetery approved, he and a dozen volunteers drove the wreaths down and laid them on the headstones. And so it continued for years, until a few Christmases back when an Air Force sergeant took this picture, which ended up on the Internet.

WORCESTER: It kind of struck a nerve, and people e-mailed it to each other, and it really went around the world.

WALLACE: We were there the next year as he and his workers at the Worcester Wreath Company loaded up 5,265 wreaths. Then they embarked on what Worcester calls the world's longest veteran's parade, a 750-mile journey that at some points attracted more than a hundred vehicles. And when they got to Arlington, so many people wanted to participate.


(UNKNOWN): This ceremony you are about to witness is an Army wreath-laying ceremony to be conducted for the Worcester Wreath Company.


WALLACE: For years Worcester paid for all of this out of his own pocket, and he started Wreaths Across America, sending hundreds to cemeteries and war memorials around the country. But he will need help to reach his new goal.

WORCESTER: I think there are around 2.7 million graves, and that's a tall order to decorate 2.7 million graves, so...

WALLACE: But you'd like to do it, wouldn't you?

WORCESTER: I really would, yeah, sometime. I don't know how but, hey, you know...

WALLACE: How long are you going to keep doing this?

WORCESTER: I'm going to keep doing it for as long as I work, and then I know my family is going to continue. So it will be here for a long time.


WALLACE: Worcester is finally getting some financial help. Walmart has donated $150,000 to lay 16,000 wreaths at military sites across America. And next December, Morrill Worcester will be at it again for the 18th year. And that's it for today. Have a great week and a merry Christmas, and we'll see you next "FOX News Sunday."


For more visit the FOX News Sunday web page.
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