Health Care Q&A: Interview With President Obama

BRISTOL, Va. – Ten minutes is all we can give you, the White House press office told the Bristol Herald Courier’s three-member editorial board. It would be the only interview President Barack Obama gave Wednesday during his visit to the Midway Street Kroger.
It was Obama who decided to add four minutes and 10 seconds to the discussion, knowing a couple of other questions would deal with energy and wanting to provide cover for U.S. Rick Boucher, the congressman who represents Southwest Virginia.
Boucher joined Obama’s bandwagon early on – and endeared himself to the future president.
“I love Rick Boucher,” Obama said during an earlier speech to Kroger employees gathered for a town hall-style meeting on health care.
In an exclusive interview with the Herald Courier’s editorial board – Publisher Carl Esposito, Managing Editor J. Todd Foster and Opinion Page Editor Suzanne Tate – Obama addressed living wills, exploding deficits, optimistic forecasts for gross domestic product, and cap-and-trade energy legislation that recently passed the U.S. House of Representatives.
What follows is the transcript from the 14-minute interview, which occurred around a small round table in a Kroger back breakroom.

Foster: Few Americans have living wills or discuss these issues. That’s when medical costs explode. How do we address that?

Obama: Well, one of the things I want to encourage is living wills. We don’t have to make them mandatory, but I think if people have more information about a tool that can help them control their medical treatment at the end of life, then I think a lot of people will say that’s something I want. I speak from experience. My grandmother obviously just passed away. She had a living will and that meant that my sister and I didn’t have to guess what her intentions would have been in terms of extraordinary treatment. And as a consequence, I think that when the end finally came, it came on my grandmother’s terms with the kind of dignity that made sense and it eased what was obviously a lot of pain for her family as well.

Tate: You have indicated previously, and today reiterated, that any acceptable health care plan needs to have several elements. It’s got to … well, it’s got to do a variety of things. It’s got to cover nearly everyone, it needs to make sure we’re not increasing the federal deficit, and we’ve got to find a way to rein in existing costs. But I think, too, it’s going to have to require at least a trillion dollars, is my understanding, to help do some of that. So where do you expect the money to come from?

Obama: Here I think is something that everybody needs to understand – that first of all, a trillion dollars is over 10 years. So we’re talking $100 billion a year – significantly less than we spent on Iraq over the last six years and that, I think, helps to put things in perspective. No. 2, two-thirds of the money, we estimate, can actually come from savings on health care programs that are already paid for by taxpayers. So when I mention the $177 billion subsidy we provide insurance companies through the Medicare Advantage program, that’s money that is already in the kitty; it’s just we’re not spending it in an intelligent way. So now what you’re really talking about is somewhere between $300 [billion] and $400 billion over 10 years, or about $30 [billion] to $40 billion [a year] to cover people or to provide them subsidies if they currently don’t have insurance or are underinsured. That’s the real cost, the price tag, we’re talking about. And there are a lot of different ways being debated. One recent idea that’s coming out of the Senate Finance Committee that some Republicans appear to support, as well as some Democrats, is to impose a penalty on insurance companies for Cadillac, very high, very expensive plans – high-end plans. For example, Goldman Sachs gives its executives $40,000 health care plans each. That’s the cost of them. Imposing a penalty on those not only raises some revenue, but it also promises to discourage the kinds of hugely expensive plans where nobody has any incentives to try to control costs. But that’s just one idea. What I’ve said is that there are a range of different ways we can raise that money. We just have to make sure that it’s honestly paid for – that’s it’s not using some gimmick – and I want to make sure that middle-class folks are not paying it on their backs because I made that pledge during the campaign that now was not a time for us to be raising costs on middle-class families, and I continue to believe that. There have been no taxes, income taxes, proposed on middle-class families. They said … the House did have a provision for a surcharge on millionaires. Critics argue that, ‘Well that essentially becomes a tax on small businesses.’ The only problem with that analysis is it turns out that only 4 [percent] to 5 percent of small businesses have revenues of over $1 million. So, the fact of the matter is this would not be a burden on small businesses. Most small businesses would benefit from this plan because of the significant subsidies they would be receiving.

Esposito: During your campaign and I think you referred to it again today, Mr. President, you said that you wouldn’t raise taxes for anyone making less than $250,000 a year. The budget is predicated on GDP [gross domestic product] growth that exceeds that which were experienced in the ’70s, the ’80s and the ’90s. Is that realistic?

Obama: Well, I would have to look at the budget numbers specifically. It is not true that, I think, that we had those projections for the whole decade. The high-growth periods are projected right after the recession. It is true that historically, if you look at it, if you have a very severe recession of the sort we had, typically the growth rates in the two or three years immediately following that recession end up being pretty exceptional – partly just to get back to where we were before. So my suspicion is that probably that the first two- or three-year projections look high because this was such a severe recession. It’s just pretty much getting back to even. After that, how fast we grow in part is going to depend on the steps that we take. If we take no steps to free ourselves on our dependence on foreign oil, if we don’t control health care costs, if we’re not improving our education system, then probably we’re not growing that fast. Now, having said that, what I do believe is that our initial projections about our deficit this year and probably next year are going to be off because the severity of the recession was so much sharper than anybody anticipated. When we had to do our budget, it was still before the first-quarter analysis came out showing that we had actually contracted by 6 percent. Well, that ends up making a huge difference in terms of federal revenues. So we’re gonna have to make some adjustments, and I don’t want to have to deny the fact that we are going to have some very difficult choices to make long term and even medium term on our budget. The thing to remember is that almost all of the growth in our long-term deficit and debt are driven by health care costs. It’s almost all Medicare and Medicaid. It’s not even Social Security. Social Security … we’ve got some gap, but that’s actually relatively easily closed. It’s not defense spending, because we have projected fairly constant growth that is close to inflation. It’s not non-defense discretionary spending. People, I think, have the misconception somehow that half the federal budget is pork projects and foreign aid. Truth is, that only accounts for about 15 percent of our total budget, everything, when you tally it up – forest programs and education programs, you name it. So I could slash severely … let’s say 5 [percent] or 10 percent of the non-defense discretionary budget, and it would have a very small effect on the deficit and the debt. The key is going to be can we control health care costs so that Medicare and Medicaid aren’t getting out of control.

Foster: Cap and trade. Opponents say their power bill goes up $3,000 [a year]. EPA [Environmental Protection Agency] says $170. That’s a big range in the math. How do we reconcile that?

Obama: I think the EPA is right on this one because the independent analysts … this wasn’t just the EPA; it was also the CBO [Congressional Budget Office] and others, who are independent, [that] evaluated this. If I’m not mistaken, the person who did the $3,000 estimate, even that person has corrected it and said if you look at what was negotiated, that it turns out in fact that the costs will be very modest. ... I want everybody to understand, he [Rick Boucher] fought for a great deal for this region. It is true that there are significant regional differences that could have had an impact on this region. He sat there and he negotiated hard. If you look at what this does for clean-coal technology, if this looks at the investments that are made in strengthening an industry here that’s fallen on hard times, it’s pretty remarkable and promises a long-term sustainable future for the coal industry that, if we don’t have this bill, frankly, is not going to be there, because it’s very hard to just get a stand-alone subsidy for coal. It has to be part of a broader package that says we’re moving in a cleaner energy future. I think he [Boucher] deserves tremendous credit for that.

Tate: The environmental groups and power companies that primarily burn coal to generate electricity really have supported this legislation. And it’s an amazing feat to see these, to see them get on the same side of this. How do you see that both sides have gotten behind this, when they do often have divergent goals.

Obama: Because, because … here’s what the utility companies want. They want certainty. They’ve got to start making these decisions about investing long term. They’re worried that suddenly you have a bunch of environmental regulations imposed on them without any time for them to plan ahead. And they’re projecting what utilization rates are going to be. They’ve got to start making plans to build plants that may involve billions of dollars, so we can give them a structure that says, ‘Look here is the energy future. You are going to be able to make a profit. You’re not going to have to pass on all these costs to customers because we’re going to provide a whole bunch of rebates if you are having to make … retrofit your plants to accommodate these regulations.’ So from their perspective, this actually provides them with the certainty that they need. From an environmental perspective, people want to make sure that we are not sending pollution into the air that is increasing the temperature by 4 or 5 degrees. And from my perspective, from an economic perspective, this is a job creator. My secretary of energy, Steven Chu, just went to China. China is right now preparing for a strategic set of investments to corner the market on clean and renewable energy. They’ve said, ‘You know what, this is going to be the future. We want to be the Saudi Arabia of clean energy.’ And they’re pouring billions of dollars of investments into this right now. Now, this is where things are going to go. And the question is, ‘Who’s going to do it?’ And my attitude is an area like Southwest Virginia, that already has experience in energy, has workers who understand energy, for them to position themselves as a cutting-edge leader in this, as opposed to resisting change, that makes sense.

Esposito: Last question, have you ever met with a smaller editorial board?

Obama: You know, I have to say that this is the size that every editorial board should be. [Laughter]. I think it’s a sensible size. Thank you very much, guys.

jfoster@bristolnews.com | (276) 645-2513