Interview With Bret Baier on Fox News Channel's "Special Report"

[Begin videotaped interview.]

Bret Baier: Welcome to Washington. I'm Bret Baier, and this is a special edition of "Special Report," beginning tonight in the Blue Room in the White House, mid-way through what many people are calling the most pivotal week of his presidency so far. We are interviewing President Barack Obama.

Mr. President, thank you for the time.

The President: Thank you for having me, Bret.

Bret Baier: You have said at least four times in the past two weeks, quote, "The United States Congress owes the American people a final up-or-down vote on health care." So do you support the use of this Slaughter rule, the deem and pass rule, so that Democrats avoid a straight up-and-down vote on the Senate bill?

The President: Well, here's what I think is going to happen and what should happen. You now have a proposal from me that will be in legislation, that has the toughest insurance reforms in history, makes sure that people are able to get insurance, even if they've got preexisting conditions, makes sure that we are reducing costs for families and small businesses by allowing them to buy into a pool, the same kind of pool that members of Congress have.

We know that this is going to reduce the deficit by over $1 trillion. So you've got a good package on the substance. And I don't spend a lot of time worrying about what the procedural rules are in the House or the Senate.

Bret Baier: But will you support this measure?

The President: What I can tell you is, is that the vote that's taken in the House will be a vote for health-care reform. And if people vote yes, whatever form that takes, that is going to be a vote for health-care reform. And I don't think we should pretend otherwise.

Bret Baier: But Mr. President, this Monday --

The President: Bret, let me finish. And if they don't, if they vote against, then they're going to be voting against health-care reform, and they're going to be voting in favor of the status quo.

So Washington gets very concerned about these procedural issues in Congress. This is always an issue that's, whether Republicans are in charge or Democrats in charge, when Republicans were in charge, Democrats constantly complained that the majority was, you know, not giving them an opportunity, et cetera.

What the American people care about is the fact that their premiums are going up 25, 40, 60 percent, and I'm going to do something about it.

Bret Baier: Mr. President, let me insert this. You know, we asked our viewers to e-mail in suggested questions. More than 18,000 people took time to e-mail us questions. And these are regular people from all over the country. Lee Johnson, from Spring Valley, California, "If the bill is so good for all of us, why all the intimidation, arm-twisting, seedy deals and parliamentary trickery necessary to pass a bill, when you have an overwhelming majority in both houses and the presidency?"

Sandy Moody in Chesterfield, Missouri, "If the health-care bill is so wonderful, why do you have to bribe Congress to pass it?"

The President: Bret, I get 40,000 letters or e-mails a day.

Bret Baier: I know you do.

The President: And I could read the exact same e-mails --

Bret Baier: But these are real people. It's not just Washington punditry.

The President: No, listen, I've got the exactly the same e- mails that I could show you, that talk about, why haven't we done something to make sure that I, a small-business person, am getting as good a deal as members of Congress are getting, and don't have my insurance rates jacked up 40 percent? Why is it that I, a mother with a child with a preexisting condition, still can't get insurance?

So the issue that I'm concerned about is whether not we're fixing a broken system.

Bret Baier: Okay, back to the original question.

The President: And the key is to make sure that we vote, we have a vote on whether or not we're going to maintain the status quo, or whether we're going to reform the system.

Bret Baier: So you support the deem-and-pass rule?

The President: I am not --

Bret Baier: You're saying that that's that vote.

The President: I am not -- what I'm saying is, is that whatever they end up voting on -- and I hope it's going to be sometime this week -- that it is going to be a vote for or against my health- care proposal. And that's what matters. And that's what ultimately people are going to judge this on.

Bret Baier: Monday --

The President: If people don't believe in health-care reform -- and I think there are definitely a lot of people who are worried about whether or not these changes are, in some fashion, going to affect them adversely, and I think those are legitimate concerns on the substance -- then somebody who votes, you know, for this bill, they're going to be judged at the polls. And the same is going to be true if they vote against it.

Bret Baier: Monday in Ohio, you called for courage in this health-care debate. At the same time, House Speaker Pelosi was saying this to reporters about the deem-and-pass rule, quote, "I like it, this scenario, because people don't have to vote on the Senate bill." I mean, is that the kind of courage you're talking about?

The President: Well, here's what's taking place, you know, I mean, we both know what's going on. You've got a Senate bill that was passed, that had provisions that needed to be changed. Right? People were concerned about, for example, the fix that only fixed Nebraska and didn't fix the rest of the states.

Now, a lot of the members of the House legitimately say, we want a vote on a package, as the president has proposed, that has those fixes embedded in it. Now, that may mean they've got to sequence the votes. But the ultimate vote that they're taking is on whether or not they believe in the proposal that I've put forward, to make sure that insurance reform is fixed, to make sure the deficits are reduced and that premiums go down and small businesses are helped. That's what they're concerned about.

Bret Baier: Do you know which specific deals are in or out, as of today?

The President: I am certain that we have made sure, for example, that any burdens on states are alleviated when it comes to what they're going to have to chip in to make sure that we're giving subsidies to small businesses and subsidies to individuals, for example.

Bret Baier: So the Connecticut deal is still in?

The President: So that's not -- that's not going to be something that is going to be in this final package. I think the same is true on all of these provisions. I'll give you some exceptions, though.

Something that was called a special deal was for Louisiana. It was said that there were millions of dollars going to Louisiana, this was a special deal. Well, in fact, that provision, which I think should remain in, said that if a state has been affected by a natural catastrophe that has created a special health-care emergency in that state, they should get help. Louisiana obviously went through Katrina, and they're still trying to deal with the enormous challenges that were faced because of that.

Bret Baier: I understand. But do you know which ones are still in, is my question, Mr. President?

The President: Hold on a second, Bret. That also -- well, I'm giving you an example of one that I consider important. It also affects Hawaii which went through an earthquake. So that's not just a Louisiana provision. That is a provision that affects every state that is going through a natural catastrophe.

Now, I have said that there are certain provisions, like this Nebraska one, that don't make sense. And they needed to be out. And we have removed those. And so, at the end of the day, what people are going to be able to say is that this legislation is going to be providing help to small businesses and individuals, across the board, in an even-handed way, and providing people relief from a status quo that's just not working.

Bret Baier: Okay, the Florida deal, in or out?

The President: The Florida deal --

Bret Baier: Paying for Medicare Advantage, exempting 800,000 Floridians from --

The President: My understanding is, is that whatever is going to be done on Medicare is going to apply across the board to all states.

Bret Baier: Connecticut, Montana -- I mean, there are a lot of deals in here, Mr. President, that people have issues about. And --

The President: Bret, the core of this bill is going to be affecting every American family. If you have insurance, you're going to be able to keep it. If you don't have insurance, you're going to be able to buy into a pool like members of Congress have. We're going to make sure that we have delivery system reforms that strengthen Medicare, that are going to make sure that doctors and hospitals are providing better service and better care, and this is going to reduce the deficit.

Now, there are going to be in this, as I just mentioned, on things like making sure that states who have gone through natural catastrophes and medical emergencies are getting help, but those are not going to ones that are driven by politics, they're going to be driven policy.

Bret Baier: Couple more process things, quickly.

You said a few times as Senator Obama that if a president has to eke out a victory of 50 plus one, that on something as important as health care, quote, "you can't govern." But now you're embracing a 50-plus-one reconciliation process --

The President: You know, Bret --

Bret Baier: -- in the Senate. So do you feel like you can govern after this?

The President: Well, Bret, the -- I think what we've seen during the course of this year is that we have come up with a bill that basically tracks the recommendations of a Tom Daschle, former Democratic senator and leader, but also Bob Dole, former Republican leader, Howard Baker, former Republican leader. The ideas embodied in this legislation are not left, they're not right, they are --

Bret Baier: I understand, Mr. President. I know you don't like to talk --

The President: -- they are -- they are --

Bret Baier: I know you don't like to talk about process, but there are a lot of questions in these 18,000 that talk about process.

The President: I understand being --

Bret Baier: And there are a lot of people around America that have a problem with this process.

The President: Bret, I --

Bret Baier: You've called it an ugly process just last month.

The President: Bret, I've got to tell -- I've got to say to you, there are a lot more people who are concerned about the fact that they may be losing their house or going bankrupt because of health care.

Bret Baier: Okay, so we have --

The President: And so the -- the -- look --

Bret Baier: Deem and pass, Senate reconciliation and we don't know exactly what's in the fix bill. Do you still think --

The President: No, we will -- by the time the vote has taken place, not only I will know what's in it, you'll know what's in it because it's going to be posted, and everybody's going to be able to able to evaluate it on the merits.

But here's the thing, Bret, I mean, the reason that I think this conversation ends up being a little frustrating is because the focus entirely is on Washington process. And yes, I have said it, that is an ugly process. It was ugly when Republicans were in charge, it was ugly were in Democrats were in charge.

Bret Baier: This is one-sixth

The President: And the reason --

Bret Baier: -- of the U.S. economy, though, sir. One-sixth.

The President: Sir -- and, Bret, let me tell you something, the fact of the matter is that for the vast majority of people, their health care is not going to change, because right now they're getting a better deal. The only thing that is going to change for them is, is that they're going to have more security under their insurance, and they're going to have a better situation when it comes to if they lose their job, heaven forbid, or somebody gets sick with a preexisting condition, they'll have more security.

Bret Baier: So how can you --

The President: But -- so -- so -- the notion --

Bret Baier: -- guarantee that they're not going to --

The President: -- so -- Bret --

Bret Baier: -- they're going to be able to keep their doctor?

The President: Bret, you've got to let me finish my answers.

Bret Baier: But sir, I know you don't like to filibuster, but --

The President: Well, I'm trying to answer your question, and you keep on interrupting. So let me be clear.

Now, you keep on repeating the notion that it's one-sixth of the economy. Yes, it's one-sixth of the economy, but we're not transforming one-sixth of the economy all in one fell swoop. What we're saying is, is that for the vast majority of people who have health care, they're going to be able to keep it.

But what we are saying is, is that we should have some basic protections from insurance company abuses, and that in order for us to do that, we are going to have to make some changes in the status quo that we've been debating for a year.

This notion that this has been not transparent, that people don't know what's in the bill -- everybody knows what's in the bill. I sat for seven hours with --

Bret Baier: Mr. President, you couldn't tell me what the special deals are that are in or not today.

The President: -- I sat -- I sat -- I just told you what was in and what was not in.

Bret Baier: Is Connecticut in?

The President: Connecticut -- what are you specifically referring to?

Bret Baier: The $100 million for the hospital. Is Montana in for the asbestos program? Is -- you know, listen, there are people -- this is real money

The President: Absolutely.

Bret Baier: People are worried about this stuff.

The President: And as I said before, this -- the final provisions are going to be posted for many days before this thing passes, but --

Bret Baier: Let me get to some of the specifics on substance, not process.

The President: The only thing --

Bret Baier: You said --

The President: The only thing I want to say, just to close up, is that when you talk about one-sixth of the economy, this is one- sixth of the economy that right now is a huge drag on the economy. Now, we can fix this in a way that is sensible, that is centrist. I have rejected a whole bunch of provisions that the left wanted that are -- you know, they were very adamant about, because I thought it would be too disruptive to the system.

But what we can't do is perpetuate a system in which millions of people day in and day out are having a enormously tough time, and small businesses are sending me letters constantly saying that they are seeing their premiums increase 40, 50 percent.

Bret Baier: Mr. President, you said Monday that -- and you praised the Congressional Budget Office numerous times. You also said this, "This proposal makes Medicare stronger" -- and you just said it to me here --

The President: Right.

Bret Baier: -- "it makes coverage better, makes its finances more secure, and anyone who says otherwise is misinformed or trying to misinform you."

The President: Right.

Bret Baier: The CBO has said specifically that the $500 billion that you say that you're going to save from Medicare is not being spent in Medicare. That this bill spends it elsewhere outside of Medicare. So you can't have both.

The President: Right.

Bret Baier: You either spend it on expenditures or you make Medicare more solvent. So which is it?

The President: Here's what it does. On the one hand, what you're doing is you're eliminating insurance subsidies within Medicare that aren't making anybody healthier, but are fattening the profits of insurance companies. Everybody agrees that that's not a wise way to spend money. Now, most of those savings go right back into helping seniors, for example, closing the donut hole.

When the previous Congress passed the prescription drug bill, what they did was, they left a situation in which after seniors had spent a certain amount of money, suddenly they got no help, and they were stuck with the bill. Now, that's a pretty expensive proposition fixing that. It wasn't paid for at the time that that bill was passed. So that money goes back into Medicare, both to fix the donut hole, lower premiums.

All those things are important, but what's also happening is, each year we're spending less on Medicare overall and as consequence, that lengthens the trust fund and its availability for seniors.

Bret Baier: Your chief actuary for Medicare said this, that cuts in Medicare, quote, "cannot be simultaneously used to finance other federal outlays and extend the trust fund." That's your guy.

The President: No -- and what is absolutely true is that this will not solve our whole Medicare problem. We're still going to have to fix Medicare over the long term.

Bret Baier: But it's $38 trillion in the hole.

The President: Absolutely, and that's the reason that we're going to have to -- that's the reason I put forward a fiscal commission, based on Republican and Democratic proposals, to make sure that we have a long-term fix for the system. The key is that this proposal doesn't weaken Medicare, it makes it stronger for seniors currently who are receiving it. It doesn't solve that big structural problem, Bret. Nobody's claiming that this piece of legislation is going to solve every problem that's been there for decades.

What it does do is make sure that the trust fund is not going to be going bankrupt in seven years, according to their accounting rules --

Bret Baier: So you don't buy --

The President: -- and in the meantime --

Bret Baier: -- the CBO or the actuary that you can't have it both ways --

The President: No --

Bret Baier: -- that you can't spend the money twice?

The President: -- no, what is absolutely true and what I do agree with is that you can't say that you are saving on Medicare and then spend the money twice.

What you can say is that, we are going to take these savings, put them back to make sure that seniors are getting help on the prescription drug bill instead of that money going to, for example, insurance reform, and --

Bret Baier: And you call this deficit-neutral, but you also set aside the doctor fix, more than $200 billion. People look at this and say, how can it be deficit-neutral?

The President: Bret, as you well know, the doctors' problem, as you mentioned, the "doctors fix," is one that has been there for years now. That wasn't of our making, and that has nothing to do with my health-care bill. If I was not proposing a health-care bill, right -- let's assume that I had never proposed health care --

Bret Baier: But you wanted to change Washington, Mr. President.

The President: Bret -- Bret --

Bret Baier: And now we're doing it the same way, right?

The President: Bret -- wait, Bret, let me finish my -- my answers here. Now, if suddenly, you've got, over the last decade, a problem that's been built up, and the suggestion is somehow that, because that's not fixed within this bill, that that's a reason to vote against the bill, that doesn't make any sense. That's a problem that I inherited. That was a problem that should have been solved a long time ago. It's a problem that needs to be solved, but it's not created by my bill. And I don't think you would dispute that.

Bret Baier: I'm getting the wrap-up sign here.

The President: Yeah.

Bret Baier: Can you be a transformative president if health care does not pass?

The President: Well, I think that -- look, I came in at a time when we probably had the toughest economic challenges since the Great Depression. A year later, we can say that, although we're still a long way from where we need to be, that we have made the economy stronger. It's now growing again. We have created a financial situation that is vastly better than it was before.

And so we're now in a situation in which the economy is growing, moving, and we're reforming areas like education, we're taking steps on energy. We're doing a whole bunch of things out there that are going to create the foundation for long-term economic growth.

Bret Baier: So if it doesn't pass, does that diminish your presidency?

The President: Well, if it doesn't pass, I'm more concerned about what it does to families out there who right now are getting crushed by rising health-care costs and small businesses who were having to make a decision, do I hire or do I fix health care? That's the reason I make these decisions.

Look, the --

Bret Baier: Mr. President, I'm getting wrapped up, and I don't want to interrupt you, but to finish up, do you think this is going to pass?

The President: I do. I'm confident it will pass. And the reason I'm confident that it's going to pass is because it's the right thing to do. Look, on a whole host of these measures, whether it's health care, whether it was fixing the financial system, whether it's making sure that we passed a Recovery Act, I knew these things might not be popular, but I was absolutely positive that they were the right thing to do and that, over time, we would be vindicated in having made those tough decisions.

I think health care is exactly the same thing. You know, we've -- I've got a whole bunch of portraits of presidents around here, starting with Teddy Roosevelt, who tried to do this and didn't get it done. The reason that it needs to be done is not its effect on the presidency. It has to do with how it's going to affect ordinary people who right now are desperately in need of help.

Bret Baier: I apologize for interrupting you so much, sir.

The President: That's okay, Bret.

Bret Baier: I was trying to get the most for our buck here.

The President: That's your job.

Bret Baier: Thank you very much for your time.

The President: Thank you very much. I appreciate it. Thank you.

Bret Baier: Welcome back to the North Lawn of the White House. After our sit-down conversation, the president and I chatted as we walked through the White House. We focused first on foreign policy.

[Begin videotaped interview.]

Bret Baier: Mr. President, some are saying, many are thinking, that this is a crisis in relations between the U.S. and Israel. Is it?

The President: No. Look, Israel is one of our closest allies. And we and the Israeli people have a special bond that's not going to go away. But friends are going to disagree sometimes. And I specifically sent Vice President Biden to Israel to send a message of support and reassurance about my belief that Israel's security is sacrosanct and that was have a host of shared interests. There is a disagreement in terms of how we can move this peace process forward.

And obviously, when I sent Vice President Biden there, it was at a moment when we were trying to restart talks between the Palestinians and the Israelis. The actions that were taken by the Interior minister in Israel weren't helpful to that process. Prime Minister Netanyahu acknowledged as much and apologized for it.

And what we've said, we need both sides to take steps to make sure that we can rebuild trust. And yesterday when there were riots by the Palestinians against a synagogue that had reopened, we condemned them in the same way, because what we need right now is both sides to recognize that it is in their interests to move this peace process forward.

Bret Baier: If Iran gets a nuclear weapon before the end of your term, will your foreign policy be a failure?

The President: It is one of our highest priorities to make sure that Iran doesn't possess a nuclear weapon. And that is why I have worked so hard to mobilize the international community successfully to isolate Iran.

But as we've seen, the Iranian government has been more concerned about preventing their people from exercising their democratic and human rights than trying to solve this problem diplomatically. That's why we're going to go after aggressive sanctions. We haven't taken any options off the table. We are going to keep on pushing.

It is a hard problem, but it is a problem that we need to solve, because if Iran gets a nuclear weapon, then you could potentially see a nuclear arms race throughout the Middle East, and that would be tremendously damaging to our national security interests.

Bret Baier: Thank you very much for your time.

The President: Appreciate you.

Bret Baier: One of the e-mailers asked to ask you, what do you think about Tiger returning to the Masters?

The President: You know, I think that, you know, Tiger has acknowledged that he betrayed his family and, you know, that's a personal issue that he's got to work out. I hope they've worked it out. I'm sure he's going to still be a terrific golfer. All right.

Bret Baier: Thanks for the time.

The President: Appreciate you.

[End videotaped interview.]