CNBC "The Kudlow Report" - Transcript

Interview

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MR. KUDLOW: Senator Charles Grassley a few days ago tweeting on Twitter, seemingly in anger at President Obama over the whole health care reform issue. We welcome back to the program the distinguished senator from Iowa, who is the ranking Republican on the Finance Committee which will decide the fate of the health care entitlement proposals from President Obama.

So, Senator Grassley, let me read this. This is the Grassley tweet, we're putting it up on the full screen. "President Obama, you've got nerve, while you sightsee in Paris, to tell us time to deliver on health care. President Obama, while you're sightseeing in Paris, you said, time to deliver on health care when you are a hammer. Do you think everyone is nail? I'm no nail!"

Now, first of all, I really admire your tweeting skills. I'm working on them myself. But what did you mean by this?

SEN. GRASSLEY: Well, first of all, I think people may think I'm resenting the president being with his family in Paris. It's not that at all. I've met with the president frequently on health care, his people, and, you know, this is a bipartisan effort at this point. It may end up being, but right now it is. And he tends to keep track of what we're doing. And way back in November we set a goal of getting a bill on the floor in July. And the bottom line of it is we're still on schedule. Will we stay on schedule? Time will tell. But right now we're on schedule, and he knew that.

And while he was sightseeing in Paris, my staff, Senator Baucus' staff were meeting each day of the weekend to work out compromises. And you know, they consult us from time to time, so we're all engaged, and he knew that. And I thought it was a cheap shot on his part.

MR. KUDLOW: All right, very well. Now, we're a little pressed for time because of this Chrysler-Fiat stuff. But Senator, you're a really important player here. Let me ask you this. Are we going to get a new government entitlement, a new government health insurance plan, a government-backed health insurance plan? Lord knows what it might cost. Lord knows what the health impact might be. There seems to be a lot of opposition to this. What are you thinking these days?

SEN. GRASSLEY: There cannot be such a government plan in the bill if it's going to be a bipartisan bill. I think there's one thing Republicans are united on, it's on the issue that we should do this through the private sector. And we see a government plan as a back- door attempt to eventually take us to Canadian-style health insurance. And we do not want to deny and delay care like they do in Canada. We want to enhance the quality of care in the United States.

And let me suggest, we talk about health care, yes, but, you know, this is one of the few bills that I know, in the history of our country, where we're working on something that's going to affect the quality of life of everybody in America. And we're redirecting 17 percent of our gross national product. And something that sweeping should be done on a bipartisan basis or it shouldn't be done.

MR. KUDLOW: I mean, Senator Coburn is always e-mailing me, we don't need more, we're already spending more than enough, it's how we do it, and whether there's enough of a consumer-oriented competition. Let me ask you about this government plan which has become so controversial. As you say, it's not going to get any bipartisan Republican support. You can set up today under any law a private, nonprofit company to do exactly the same thing, but that would not have government backing and would not necessarily crowd out the rest of the private insurance company. Why not just go there? If it's such a great idea, why not let it stand on its own two feet without the huge expense and the huge tax cost?

SEN. GRASSLEY: Well, of course, you know that is one place where, like, we don't have a lot of competition in some states, because of the 350 health insurance companies in America, they don't all play in every state. If they did, then we'd have plenty of competition. In my state, roughly, two have 85 percent of all the business.

And you know, I know about cooperatives. I'm a farmer, so we have the grain cooperatives, we have the rural electric cooperatives to get electricity to every farmer. And so what you're saying is another way of enhancing competition. And enhancing competition accomplishes for Republicans what we want through private sector competition to determine things in health care. And it ought to be what the Democrats want if they are saying that there's not enough competition now and we need to press the insurance companies to a greater extent.

MR. KUDLOW: But Senator, just quickly, if I can get a lightning one. I always appreciate your time. Can a bill pass with a straight Democratic up-and-down vote without the government-sponsored plan? In other words, if you take out the government-sponsored plan, is there a bill? And conversely, will the Democrats just roll through and put the government-sponsored plan in?

SEN. GRASSLEY: If it's not there, there's a good chance of having a bipartisan program. If it is there and they do it Democrat, there's a lot of Democrats that don't want a government plan, either.

MR. KUDLOW: All right. Senator Grassley, again, sir, I want to congratulate you on your tweeting skills. Really terrific stuff. Senator Charles Grassley, we will see more on the disposition of the health care reform, so called.

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