Sens. Richard Durbin, D-Ill., and Jon Kyl, R-Ariz., are the exclusive guests this Sunday, July 12, 2009 on "This Week with George Stephanopoulos."
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GEORGE STEPHANOPOULOS, HOST: Good morning, and welcome to "THIS WEEK."
(BEGIN VIDEOTAPE)
STEPHANOPOULOS (voice-over): Welcomes abroad. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have the blood of Africa within me.
STEPHANOPOULOS: Warnings at home.
REP. MARIO DIAZ-BALART (R), FLORIDA: There is a new definition for "dismal failure": stimulus -- this stimulus.
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: What would they do? What would they do?
STEPHANOPOULOS: The stimulus takes shots. Health care stalls. Is it time for President Obama to hit the reset button with Congress or should he stay the course? Questions this morning for our headliners, the Senate whips: Democrat Dick Durbin and Republican Jon Kyl, our "THIS WEEK" debate.
Then...
KATIE COURIC, CBC ANCHOR: The King of Pop...
BRIAN WILLIAMS, NBC ANCHOR: Michael Jackson...
CHARLES GIBSON, ABC ANCHOR: Michael Jackson...
UNIDENTIFIED MALE: Michael Jackson...
COURIC: Michael Jackson...
STEPHANOPOULOS: Michael Jackson mania. Did the media go too far? That and all of the week's politics on a special expanded "Roundtable" with George Will, Donna Brazile, Cokie Roberts, Sam Donaldson, and Bob Woodward of The Washington Post.
And as always, "The Sunday Funnies."
CONAN O'BRIEN, HOST, "THE TONIGHT SHOW": A lot of us are still mourning the loss of one of America's most entertaining figures who left us all too soon, but don't worry, folks, Sarah Palin will be back.
(LAUGHTER)
ANNOUNCER: From the heart of the nation's capital, "THIS WEEK" with ABC News chief Washington correspondent, George Stephanopoulos, live from the Newseum on Pennsylvania Avenue.
(END VIDEOTAPE)
STEPHANOPOULOS: Hello, again. It was another whirlwind week abroad for the president and the whole Obama family, touched down in Washington early this morning for what may be the most momentous month of the year on Capitol Hill.
Confirmation hearings for Judge Sotomayor begin tomorrow. But the House and Senate are trying to pass health care by August, but the odds against that going up. And despite calls from some to scale back his agenda, President Obama doubled down this morning, writing in The Washington Post that now is not the time to defer hard decisions.
Here to debate all that is coming up, the two Senate leaders in charge of counting the votes: Democrat Dick Durbin, and Republican Jon Kyl. Welcome both back to "THIS WEEK."
And, Senator Durbin, let me begin with you on the issue that probably most directly affects most Americans, that's health care. Your counterparts, the House Democrats, are carrying forward a piece of legislation that includes a $550 billion tax increase, with a surtax of about 1 percent that starts for individuals earning about $250,000 a year, climbing to 3 percent for individuals earnings a million dollars a year or more.
Can Senate Democrats sign on to that?
SEN. RICHARD DURBIN (D-IL), WHIP: I think we're going to have a different approach. We understand that we have to combine cuts in actual spending on health care, savings from hospitals, from doctors, from health insurance companies, along with some new revenue.
Now this new revenue is not just to cover those who are uninsured today, but to make sure that insurance is affordable for people...
(CROSSTALK)
STEPHANOPOULOS: New revenue but not a surtax on millions -- on people earning over $250,000 a year?
DURBIN: The Senate Finance Committee is considering a lot of different options. I don't want to preclude or select any option at this point. But I think what we need to do is to make sure that at the end of the day, we have real health care reform.
The American people are committed to change, George. There is resistance, of course, among some Republicans in the Senate. But this has been a good week. A number of Republican senators came forward, met with Senator Harry Reid, continued to meet with Senator Baucus.
I think we're starting the kind of bipartisan dialogue that's going to work.
STEPHANOPOULOS: I want to ask Senator Kyl about that bipartisan dialogue. But first, on this tax increase.
SEN. JON KYL (R-AZ), WHIP: No.
(LAUGHTER)
STEPHANOPOULOS: Absolutely not.
KYL: No. Here is the problem. We're in a recession. We know that between 75 and 80 percent of the jobs created in the country are created by small business. At least 55 percent of the income that would be generated by this surtax directly hits the entrepreneurs who run these small businesses.
It would be a job killer. It would be exactly the wrong thing to do any time, but especially when we're in the middle of a recession.
STEPHANOPOULOS: How about these bipartisan negotiations? Senator Charles Grassley, your ranking member on the Finance Committee, which you are also a member of, has been negotiating with Senator Baucus and others. He met with Harry Reid, as Senator Durbin just said.
But I have been told that you've had some very tough conversations with Senator Grassley and that you've warned him against giving away too much to the Democrats. Is that true?
KYL: Well, no. I haven't warned him about anything. But it is true that we've had a lot of discussions internally in our Republican Conference, and that senators Hatch and Grassley and Enzi and Olympia Snowe, who did meet with that bipartisan group, I think sent a very strong message.
No on these taxes. No on the kind of mandates that the Democrats are talking about, including a government-run insurance company. So while Republicans all...
(CROSSTALK)
KYL: George, can I just make one quick point? Republicans are very committed to reform. But we do not like the ideas of spending and taxing and creation of more deficit in order to achieve these results.
STEPHANOPOULOS: No. But Senator Grassley has talked about other tax increases, not taxing the -- taking away the exclusion for health insurance plans right now. He has also talked about a public insurance plan based on the idea of cooperatives.
On those issues, does he speak for the Republican Conference?
KYL: No. And I certainly disagree with any kind of government- run plan. I don't think it's fair to say that Senator Grassley has supported any of these tax proposals. He has been very wary of the tax proposals.
Think about this, if you have a catastrophic health event in your life, you can take -- if it represents more than 7.5 percent of your gross adjusted income, for income tax purposes, you can take a deduction on that.
They're asking to raise this up to 10 percent. Most of the people hit by that are seniors and 55 percent of them are making under $50,000 a year. These are bad tax policies.
STEPHANOPOULOS: So, Senator Durbin, you heard Senator Kyl right there. He says that no public health insurance plan, I hear a no on any kind of revenue enhancement. So is a bipartisan deal really possible? And how necessary is it? DURBIN: Senator Kyl is not ready for change and I guess that's his position. But most Americans are ready for change. They want to keep the health insurance that they have, if it's good policy. But they want us to fix the things that are broken in this system.
When Senator Kyl says he is opposed to any kind of government-run health insurance, is he opposed to Medicare? That covers 45 million Americans today, another 60 million covered by a government plan called Medicaid.
I mean, the fact is overwhelmingly, three out of four Americans say we should have a choice as Americans of a government-run insurance plan. It's a choice we can make voluntarily. It brings competition in the system.
The resistance to this idea comes from the health insurance companies. Those private companies that are making a fortune in profits today, denying coverage to individuals, fighting with our doctors about the cure that we receive.
There should be competition...
STEPHANOPOULOS: But, Senator...
DURBIN: We should keep them honest.
STEPHANOPOULOS: ... the talks did at first bog down this week and then seem to pick up again towards the end of the week. Is it still possible for the Senate to pass a bill by the president's deadline of the August recess?
DURBIN: Yes, it is. And I'm glad that President Obama went overseas for critically important meetings with world leaders. Now I'm glad that he's home. He's going to be rolling up his sleeves. We've already been in communication with the White House.
He wants to get this job done. And that means the Senate should move in an expeditious way to finish our committee hearings, bring this bill to the floor before the August recess.
STEPHANOPOULOS: I'm going to ask Senator Kyl that question as well. But let me broaden it out as well, because there has been a lot of talk this week also about the stimulus and whether or not it has really helped the economy.
You told -- you put out a statement earlier this week, you said that the stimulus ought to be canceled. But your own governor, Republican governor of Arizona, has talked about the successes of the stimulus in the state of Arizona, pointing to 24 highway projects creating 6,000 jobs, a weatherization program creating 1,500 jobs, a series of programs for child care and education that have all helped the state of Arizona.
So why do you want to cancel a program that your own Republican governor said has helped your state? KYL: Well, I don't want to leave that health issue without, first of all, reiterating the fact that Republicans very much want reform, but not on the backs of the American people with the kind of taxes and potential rationing of care...
STEPHANOPOULOS: Done by August?
KYL: ... that would result. There is no chance that it's going to be done by August. President Obama was right about one thing. He said if it's not done quickly, it won't be done at all. Why did he say that? Because the longer it hangs out there, the more the American people are skeptical, anxious, and even in opposition to it.
STEPHANOPOULOS: And that ties into the complaints you've made about the stimulus.
KYL: That then -- yes.
STEPHANOPOULOS: And that brings us right back to that.
KYL: Yes. And with respect to the stimulus, I think it's now acknowledged, it hasn't done what it set out to do.
STEPHANOPOULOS: But your government says it has in Arizona.
KYL: No. What our -- look, all governors like "free money" coming to the state. My governor is no different. But the reality is that it has added to our deficit. We're now going to have a $1.8 trillion deficit this year.
It promised to create 4 -- or save 4 million jobs. We've now lost another 2 million jobs. Unemployment is 2 points higher than it was when the president took office. And even with the stimulus, it's higher than they said that it would be without the stimulus.
The reality is it hasn't helped yet. Only about 6.8 percent of the money has actually been spent. What I proposed is, after you complete the contracts that are already committed, the things that are in the pipeline, stop it.
You can spend about half of the money on the stimulus and the last half would be spent during the eight -- last eight years of a 10- year period. Why spend that money when it could be put to better use on other things like health care, for example?
And we're digging this deficit hole even deeper than we have today.
STEPHANOPOULOS: What's the answer, Senator Durbin?
DURBIN: Well, the answer is this, it's a two-year plan and we're four months into it. The Republicans resisted President Obama's efforts to put together the stimulus package. And at the time that he made the proposal, our economy was in freefall.
We were facing a worldwide recession. It's true that we're not out of the woods yet. We still have a long way to go. But we have started to stabilize our economy and the world economy. And that's a move in the right direction.
What Senator Kyl fails to acknowledge is that we have actually written checks so far for $56 billion out of $787 billion. We are going to see the impact of the stimulus package start to grow.
STEPHANOPOULOS: But Senator...
(CROSSTALK)
DURBIN: Well, first let me tell you, George. First it means tax breaks for working families. Does Senator Kyl oppose that? Would he cancel those?
Secondly, it means transportation projects across America, in Arizona, in Illinois, and other states, not only creating good-paying jobs but building America's infrastructure for the future.
Does Senator Kyl oppose that?
I think these are good investments in America's future. Let's give it time to work.
STEPHANOPOULOS: I think you (inaudible) answer, but let me just follow up, one more question on this. With the jobs situation and the whole economy being so much worse than everyone expected, several months ago, why not focus on that right now?
Several people have said that President Obama should scale back his agenda, right now, and put all of his focus on the economy.
DURBIN: George, because that president understands that, if we want to build this economy for the future, it isn't just a matter of saving and creating jobs today; it's doing the fundamentals to make sure the American economy is strong at the end of this recession. It's taking care of a health care system.
Senator Kyl said that the idea of health care reform is a job- killer. Let me tell you, health insurance premiums today are job- killers. The cost of health insurance, I'm sure, in Arizona; I can guarantee you, in Illinois, is going up three times faster than the increase in wages. We just can't sustain that.
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