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Republican Whip Jon Kyl’s Obamacare status report

Tuesday, December 15, 2009

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HH: We begin with an update on the overall situation in the United States Senate with the Republican number two, the minority whip in the United States Senate, Senator Jon Kyl from the great state of Arizona. Senator Kyl, thanks for joining us again.

JK: Great, good to be with you and your listeners.

HH: Well, big day yesterday. Medicare buy-in went down, the public option went down. Where does this bill stand today?

JK: As you know, the Democrats are at the White House as we speak. I’m sure they’re getting a big pep rally there, and the President’s saying we’ve all got to rally around this and support it. They still don’t have the 60 votes. And you know, the most transparent administration in history has been decidedly opaque about exactly what is going on. So what I tell you is much rumor. Obviously, this is all behind closed doors. But the, I think you’re correct that they have dropped a reference to what they called the public option, and the Medicare buy-in, but they have retained something that’s very close to the public option, which is a, without getting into a lot of detail, a way that all of the people that don’t have insurance could buy insurance through these exchanges. That would be negotiated by the Office of Personnel Management of the U.S. government, the OPM, it’s called. And they would presumably negotiate rates with insurance companies, and bottom line is eventually, the government would have to ensure that this worked, and therefore would probably stand behind it. And voila, you ultimately get to something that looks very much like a public option. So you know, you can drop what’s called a public option, but they’ve always wanted to still get back to something that was pretty much like that. And they have not dropped things like the so-called CLASS Act, that several Democrat Senators said they could not support a bill that included…and so we’ll see. They’re still working to get their 60 votes, and I’m sure they’ll come out of the White House with big smiles on their faces and say they’re unified. But it’s some steps between there and actually having a bill.

HH: You know, Senator Kyl, just to digress, I was the deputy director and general counsel of OPM in the second half of the Reagan years. We couldn’t run the Federal Employee Health Benefit program then. I mean, it was always out of money and breaking down, and poorly administered, because it was complicated, it was beyond a bureaucracy’s ability to…why does anyone think the OPM can do a much more complicated mission when it’s never been able to run the FEHB?

JK: Well, and in fact, there are a lot of questions and concerns about that right now for exactly the reasons that you mentioned. There’s a hearing over in the House of Representatives, Representative Pomeroy had the OPM representatives there, and he said, and I’m quoting now, “the bottom line is, in my view, people are being hurt. And some of the most vulnerable people in the country are being hurt every day because of the bureaucratic bungling at OPM.” And he goes on to talk about what that was all about. But no, they don’t have the staff to do it, they don’t have the capability of doing it right now. I don’t think that matters to these folks. They just want to say that somebody in the U.S. government is in charge, and they’ll figure it out later.

HH: Now Senator Kyl, there were reports this morning that not only Senator Nelson retains his doubts, but that Senator Webb from Virginia has been rather ambiguous in his statements about health care. Are there more people besides Joe Lieberman who might provide the 41st vote for Republicans in denying cloture?

JK: Yeah, there are many Democrats who have said very critical things about parts of this bill. For example, I mentioned the CLASS Act. Two of three of them have said they couldn’t vote for the bill as long as it had the CLASS Act in it. And Kent Conrad…the CLASS Act, by the way, is a new entitlement program that for long term, and here’s the way Kent Conrad, a Democrat from North Dakota called it. He called the CLASS Act a ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of. And that’s because it promises a lot more in benefits than it could ever hope to deliver. So there are Democrats that have big concerns about various pieces of the bill. The question is whether in this hot box of the White House, with the President saying okay, let’s all hold hands now and jump off the cliff together, whether any of them have the courage to say wait a minute, my constituents back home don’t want this, hold on a minute. And I think that some of them potentially do. So we’ll just have to see whether they’re going to go down with the President, or they’re going to represent the wishes of their constituents, who by the way, according to CNN, and I’m sure you’ve quoted this, brand new poll, 61% of the American people oppose it. Now only 36% support it. It’s getter very close to 2-1 against this.

HH: Now Senator Kyl, yesterday we played an exchange between Senator Thune, who runs the Republican Conference, and doing a lot of time on the floor when you and Senator McConnell can’t be there, and Al Franken. And Senator Thune was making what I thought were agreed upon points, that the taxes kick in immediately, and the vast bulk of the benefits are years down the road. And Al Franken was yelling at him. Who’s right about that? Did Senator Thune have it right?

JK: Oh, absolutely. And John has done a terrific job for us. No, he’s exactly correct, and that’s the next amendment, after we dispose of four amendments this afternoon, is an amendment that he and Senator Hutchison will offer, that says okay, let’s just make sure that none of the taxes kick in until the benefits do. And you’ll see Democrats oppose that. So that’ll be the proof of the pudding as to the question was Thune correct or not. Of course, he’s correct. For four years, there are virtually no benefits, but a lot of taxes. And that’s the only reason that they can say that in the first ten years of the bill, it’s “in balance,” because it collects taxes for ten years, and only pays benefits for six. If you take the first full ten years of implementation, where you’re both paying benefits and collecting taxes, then you’re about $2.5 trillion dollars, and it’s not in balance.

HH: Senator Kyl, the office of the Actuary put out a report on Friday, which has had very little attention paid to it. It’s part of the Obama administration, so I’m surprised by that. But it showed that there is no cost curve bending here, that this bill will, in fact, accelerate spending, total spending, above what would have been spent even if you did nothing at all. Why is that not getting any attention?

JK: We’ve been trying to broadcast it. I think a lot of the reason is, of course, mainstream media doesn’t want to talk about the facts of this bill. They just want to “make history.” But that’s exactly correct. I’m holding a summary of it right here in my hand, and it makes the point that…first of all, it makes the point I just made about the benefits for only six years, the taxes for ten. You can’t keep your current coverage if you like it. It’s going to…the benefits are going to be decreased, for example, in Medicare Advantage. We’ve talked about that, decreased by as much as, or by about 33%, the Actuary says. Medicare cuts, jeopardizing access to care for beneficiaries, I’m quoting here, the Medicare advisory board, they’re very critical of that. It’s reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, meaning you can’t pay for it. The taxes on drugs, devices and insurance are passed through. Employers will reduce employees’ health benefits. I mean, all of the things that we’ve been saying are now confirmed by the Actuary for CMS, which is an entity of the Department of Health and Human Services.

HH: Now there’s also a story out in Politico today that the head of the Business Roundtable got tapped on the shoulder over at the White House Christmas party, and dragged into a meeting with President Obama, because the Roundtable, which represents 160 CEO’s, is the last group, the last business group, that is pretending to support this, and he’s afraid he’s going to lose them. What is the Business Roundtable thinking, Jon Kyl?

JK: I hesitate to say too much about it. You’ve got a bunch of CEO’s that fly into Washington every now and then, and they may have a little bit different view on things than the associations that have to work with these things all the time. If you go to the different groups, they are very concerned about it – the hospital groups, the physician groups, the folks that manufacture the devices, and so on. And you go to the small business groups like the NFIB, the Chamber of Commerce, they’re all totally opposed to this. So it’s a little odd that the Business Roundtable hasn’t been quite as vociferous, but I’ll just leave it at that.

HH: What about the deal that Byron Dorgan is pushing against Big PhRMA on reimportation? I thought Big PhRMA did a deal with the White House to sell all of us down the river, but they’d get to keep their high priced drugs, at least?

JK: They did, and that deal apparently is alive and well. The votes this afternoon, there will be two votes. One will be to a Lautenberg amendment, which will say that the only way you could import drugs from Canada would be if the FDA certified that they were safe. And then if that, and I assume that that amendment will pass, as it has in the past. And then the Dorgan amendment presumably will pass, but it’s viewed as kind of a pyrrhic victory at that point, because since FDA says that it cannot certify that these drugs can be brought in safely, therefore, as a practical matter, they’re not going to be reimported.

HH: So Big PhRMA is going to stay on the side of the White House on this?

JK: Yes, and the Democrat leadership, and a majority of the Democrats, will stand on the side of PhRMA, and keep the deal with them.

HH: Last question with a minute to go, Senator Kyl, is it too late for people to fight and register their opinions?

JK: Oh, no. No, no. There is no deal yet, and you know, I think the deal, the last time Harry Reid said when they had a deal, that was number 20, the times he’s come to the microphones and said we’ve had a deal. They do not have a deal, and even if they came out and announced that they had a deal, they haven’t written it, it has not been scored by the CBO, and we haven’t had a full and complete debate about it. And by the time you do all of those things, the American people will have even more opportunity to see what they don’t like about this, and register their opinions.

HH: Senator Jon Kyl, thanks for taking time to inform people. America, get to the phones. 202-224-3121. Call Blanche Lincoln, call James Webb, call Ben Nelson. Tell them vote no on cloture when it comes up. 202-224-3121.

End of interview.

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