The latest news from Capitol Hill with Arizona Congressman Jeff Flake.
Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. The president's state of the union address is set for Wednesday, this as Congress works on health care reform and tries to find ways to push an economic recovery. Joining me to talk about congressional issues is U.S. representative Jeff Flake from Arizona's 6th congressional district. THANKS FOR JOINING US.
Jeff Flake: THANKS FOR HAVING ME.
Ted Simons: WHAT DO YOU WANT TO HEAR FROM THE STATE OF THE UNION ADDRESS?
Jeff Flake: A REVERSAL CERTAINLY WITH HEALTH CARE. I HOPE THE PRESIDENT ACKNOWLEDGES THAT WE CAN'T GO WHERE HE WANTs IT TO GO. THAT THEY'LL PAIR BACK AND ENTERTAIN SOME OF THE PROPOSALS THAT REPUBLICANS HAVE PUT FORWARD. THAT'S WHAT I THINK WE WOULD LIKE TO HEAR WITH HEALTH CARE. ALSO, HEAR THAT THEY'VE ABANDONED CAP AND TRADE. NOT GOING TO GO THERE EITHER. AND WE'RE GOING TO HAVE SOME KIND OF CERTAINTY AHEAD FOR THE BUSINESS COMMUNITY, SOME KIND OF BUSINESS CLIMATE THAT IS CONDUCIVE TO ECONOMIC GROWTH AND JOBS. IF WE DON'T HEAR THAT, THEN WE'RE IN FOR MORE OF THE SAME.
Ted Simons: LET'S TALK ABOUT ECONOMIC GROWTH. SOUNDS LIKE THE PRESIDENT WILL BE CONCENTRATING ON THE MIDDLE CLASS. WHAT HE SAID TODAY, THE MIDDLE CLASS HAS BEEN UNDER ASSAULT FOR QUITE AWHILE. DO YOU THINK THE MIDDLE CLASS IS UNDER ASSAULT?
Jeff Flake: WELL, I THINK IT WAS UNDER ASSAULT WITH THE HEALTH CARE BILL, FOR
EXAMPLE. THAT WOULD HAVE INCREASED TAXES ON SOME OF THE MIDDLE CLASS, DEPENDENT ON THE KIND OF PLAN THEY HAD. SMALL BUSINESSES CERTAINLY WOULD BE FACING EITHER 8% INCREASE OR DEPENDENT ON HOW THEY'RE ORGANIZED, MAYBE 5.4% SURTAX ON TOP OF THAT. THAT'S MIDDLE CLASS. THAT'S PEOPLE WHO FILE AS A SUB S CORPORATION, FOR EXAMPLE. THAT'S MIDDLE CLASS. THAT'S THE SMALL BUSINESS COMMUNITY. YES, THEY'VE BEEN UNDER ASSAULT, BUT MOSTLY BY GOVERNMENT.
Ted Simons: BUT THE CBO AND OTHERS ARE SUGGESTING THAT IF THESE REFORMS COME INTO PLACE, THAT ACTUALLY HEALTH CARE COSTS WOULD BE REDUCED AND, THUS, THE MIDDLE CLASS --
Jeff Flake: THAT ONLY ASSUMES --
Ted Simons: CBO ESTIMATES, YES.
Jeff Flake: AND CBO HAS TO TAKE CONGRESS AT ITS WORD AND YOU SHOULDN'T. FOR EXAMPLE, THEY SAID WE WOULD CUT $500 BILLION FROM MEDICARE OVER TEN YEARS. WE WILL NEVER DO THAT. SO SIMPLY ADD TO THE DEFICIT. THEN YOU HAVE INTEREST RATE ISSUES AND OTHER THINGS THAT HIT THE MIDDLE CLASS EVEN HARDER.
Ted Simons: SOUNDS AS IF HE GETS TO HEALTH CARE ON WEDNESDAY, LOOKS LIKE HEALTH CARE REFORM WILL CHANGE INSURANCE COMPANY PRACTICES AND NOT QUITE AS MUCH OF AN EMPHASIS ON EXPANSION OF CARE. DOES THAT MAKE SENSE TO YOU?
Jeff Flake: THAT'S PROBABLY WHAT THEY'LL DO. I THINK THEY'LL TAKE MORE POPULAR PARTS OF THE HEALTH CARE PLAN AND PASS THEM INDIVIDUALLY AND DECLARE VICTORY.
Ted Simons: SOUNDS LIKE, I WANT TO GET YOUR RESPONSE IN EXTENDING THE LIFE OF MEDICARE. YOU KIND OF ALLUDED TO THAT EARLIER. A GOOD IDEA? VIABLE?
Jeff Flake: EXTENDING THE MEDICARE?
Ted Simons: YES.
Jeff Flake: YOU HAVE A LOT OF PEOPLE PAYING INTO MEDICARE. YOU HAVE TO CHANGE THE TRAJECTORY HERE BECAUSE IT'S SIMPLY UNSUSTAINABLE AS IT IS. UNLESS WE HEAR SOME REAL REFORM IN PROPOSALS, THEN WE WON'T EXTEND THE LIFE.
Ted Simons: REFORM PROPOSALS THAT YOU WOULD LIKE TO SEE?
Jeff Flake: YES. YOU HAVE TO. WE CAN'T SUSTAIN THE PATH WE'RE ON WITH MEDICARE. THE EXPENSES ARE SIMPLY OUTSTRIPPING WHAT WE'RE PUTTING INTO IT. WHEN YOU LOOK OUT-OF-CONTROL ENTITLEMENTS, MEDICARE IS FAR AND AWAY THE BIGGEST CULPRIT, FAR BIGGER THAN SOCIAL SECURITY. I HAVE TO SAY AS REPUBLICANS, WE DIDN'T DO WELL. SOME OF US ADDED ON PRESCRIPTION BENEFITS, SOME OF US DIDN'T VOTE ON IT BUT WE ADDED IT. IT ADDED TENS OF TRILLIONS OF DOLLARS OVER THE NEXT 75 YEARS, MADE MEDICARE EVEN MORE UNSUSTAINABLE. WE'VE GOT TO GO THE OTHER DIRECTION THERE.
Ted Simons: WELL, SO IF THE PRESIDENT ON WEDNESDAY OFFERS SOMETHING ALONG THE LINES OF HELPING SENIORS WITH PRESCRIPTION DRUGS AND THESE SORTS OF THINGS, IS THAT SOMETHING YOU THINK, AGAIN, IS VIABLE OR JUST NOT THE TIME FOR IT?
Jeff Flake: UNLESS YOU OFFSET IT SOMEWHERE ELSE, SAVE IN REFORMS SOMEWHERE ELSE, IT'S NOT VIABLE.
Ted Simons: CAP ON OUT-OF-POCKET EXPENSES, AGAIN, HEALTH CARE.
Jeff Flake: AGAIN, IT'S NICE TO SAY THESE THINGS. BUT UNLESS YOU REFORM THE WHOLE SYSTEM, UNLESS YOU DO THINGS LIKE -- THERE ARE THINGS THAT COULD BE DONE. FOR EXAMPLE, REPUBLICANS HAVE BEEN PUSHING FOREVER AND JOHN SHATTUCK IN FRONT OF THE PACK SAYING, WHY NOT ALLOW INDIVIDUALS TO PURCHASE HEALTH CARE ACROSS STATE LINES? WOULDN'T COST ANYBODY ANYTHING. IT WOULD SIMPLY INCREASE COMPETITION AND LOWER COSTS, BUT THEY DON'T WANT TO GO THERE. DEAL WITH TORT REFORM. THEY DON'T WANT TO GO THERE. THEY DON'T SEEM TO WANT TO GO ANYWHERE WHERE THERE MIGHT BE ACTUAL COST SAVINGS. THEY SIMPLY WANT TO SAY WE'LL CAP OUT-OF-POCKET COSTS. THAT SIMPLY SHIFTS THE COSTS FROM THOSE PAYING PREMIUMS ON TO TAXPAYERS. AND SO UNLESS YOU REALLY REFORM THE SYSTEM, YOU CAN'T JUST pander TO THE PUBLIC AND SAY, WE'RE GOING TO MAKE COSTS LESS -- CARE LESS COSTLY.
Ted Simons: CAN YOU DO FREE MARKET REFORMS, THOUGH? THIS IS ALMOST A UNIVERSAL AGREEMENT, THAT THOSE WITH PRE-EXISTING CONDITIONS HAVE TO BE ABLE TO FIND HEALTH INSURANCE SOMEWHERE. THAT IS A FLAW. BUT CAN YOU HAVE A PRE-EXISTING CONDITIONS INCLUDED IN REFORM AND NOT MAKE EVERYONE GET INTO THE SYSTEM, EVERYONE INTO THE BOAT? HOW DO YOU MAKE SURE -- DO HEALTHY PEOPLE ALL WIND UP HERE, THE PRE-EXISTING CONDITION PEOPLE WIND UP HERE, THE ILL HEALTH -- I MEAN --
Jeff Flake: UNDER THE REPUBLICAN PROPOSAL, WHAT WE DID WAS WE GAVE INCENTIVES TO STATES WHO FORM A RISK POOL. SOME STATES HAVE TOO FEW OF THEM NOW, TO CARE FOR THOSE WITH PRE-EXISTING CONDITIONS. WHAT YOU CAN'T DO IS SAY, INSURANCE COMPANIES, YOU HAVE TO COVER ALL PRE-EXISTING CONDITIONS, NO STIPULATIONS THERE. THAT JUST MOVES INSURANCE FROM TRUE INSURANCE, A HEDGE AGAINST RISK, TO KIND OF PUBLIC UTILITY. AND IF THAT'S WHAT YOU WANT TO DO, THEN SAY IT AT LEAST, BUT DON'T PRETEND THAT WE'RE SIMPLY GOING TO AND WE CAN BY FIAT, TELL INSURANCE COMPANIES YOU HAVE TO COVER ALL PRE-EXISTING CONDITIONS AND IT WILL LOWER THE COST FOR EVERYBODY. IT'S NOT. IT WILL INCREASE IT SUBSTANTIALLY. I SAY, IF YOU'RE GOING TO DO IT, AND WE DO NEED TO DEAL WITH PRE-EXISTING CONDITIONS, DO IT SEPARATE FROM REGULAR INSURANCE CARE. AND SO YOU SIMPLY DON'T INFLATE THE COST FOR EVERYBODY ELSE. BECAUSE IF YOU REQUIRE INSURANCE COMPANIES ALL TO COVER PRE-EXISTING CONDITIONS, YOU HAVE RAISED PREMIUMS FOR EVERYBODY, THE MIDDLE CLASS AND EVERYBODY.
Ted Simons: SO WHAT PAYS FOR THOSE WITH PRE-EXISTING CONDITIONS?
Jeff Flake: IF YOU ESTABLISH -- WHAT WE REPUBLICANS DID IS SAID, ALL RIGHT, STATES YOU HAVE MONEY. WE DID IT WITH SAVINGS THAT WOULD COME FROM TORT REFORM. THE BEST ESTIMATES THERE ARE BETWEEN 50 AND I THINK $200 BILLION OVER TEN YEARS THAT COULD BE SAVED IF WE ENACT A REAL TORT REFORM.
Ted Simons: REAL TORT REFORM, ARE YOU SAYING TORT REFORM ITSELF COULD PAY FOR MUCH OF THIS?
Jeff Flake: YES. THAT'S WHAT -- THAT'S HOW REPUBLICANS IN THEIR PLAN FREED UP SOME MONEY TO DO THESE STATE RISK POOLS, IS BY ENACTING TORT REFORM.
Ted Simons: LET'S GET BACK TO THE ECONOMY AND THE PRESIDENT'S IDEA OF MAYBE A
CONSUMER FINANCIAL PROTECTION AGENCY. GOOD IDEA?
Jeff Flake: NO. PROBABLY NOT. NOT THE WAY -- WELL, I GUESS I'LL HOLD THE JUDGMENT UNTIL I SEE THE DETAILS. AN AGENCY THAT DUPLICATES THE THINGS WE'RE ALREADY DOING, WE MAY SEE SOMETHING LIKE THE DEPARTMENT OF HOMELAND SECURITY. WE'LL CONSOLIDATE OTHER AGENCIES AND STREAMLINE PROCEDURES AND WE HAVEN'T SEEN IT AT ALL. ANOTHER AGENCY JUST TO PILE ON WHAT TO OTHER AGENCIES ARE ALREADY DOING WOULD PROBABLY NOT BE A GOOD IDEA.
Ted Simons: BUT ARE THESE OTHER AGENCIES DOING ENOUGH? WERE THEY DOING ENOUGH WHEN THE WHOLE FINANCIAL SYSTEM SEEMED READY TO COLLAPSE?
Jeff Flake: NO DOUBT. THERE ARE A LOT OF THINGS THAT SHOULD HAVE BEEN DONE. BUT I DOUBT ADDING A NEW AGENCY NOW IS GOING TO FIT THE BILL, PARTICULARLY GIVEN WHERE THE ADMINISTRATION SEEMS TO WANT TO GO HERE. WE HAVEN'T -- MY -- MY DIFFICULTY IS IF WE TRULY HAVE BANKS, FOR EXAMPLE, THAT ARE TOO BIG TO FAIL -- AND THAT WAS A PROBLEM BEFORE -- WHAT ARE WE DOING TO MAKE SURE THAT WE DON'T HAVE INSTITUTIONS THAT ARE TOO BIG TO FAIL? I HAVEN'T SEEN ANY REAL EFFORT TO ADDRESS THAT. INSTEAD, WE'RE SIMPLY SAYING WITH THE, FOR EXAMPLE, THE FINANCIAL REGULATORY REFORM THAT'S BEEN INTRODUCED BY BARNEY FRANK, SIMPLY HAVE A PERMANENT BAILOUT FUND. ASSUME WE'LL ALWAYS HAVE COMPANIES, BUSINESSES TOO BIG TO FAIL AND THEY HAVE A PERMANENT BAILOUT FUND TO DEAL WITH THAT. THAT'S THE WRONG DIRECTION TO GO. IF WE TRULY HAVE BUSINESSES TOO BIG TO FAIL, THEN FIND A WAY TO DEAL WITH THAT SPECIFICALLY, INSTEAD OF JUST SAYING, WE'LL BE BAILING THEM OUT FOR DECADES TO COME.
Ted Simons: IT SOUNDS AS IF, ONE FINAL THING, THE PRESIDENT WILL PROBABLY TALK ABOUT IS THE TENOR, THE TONE OF WASHINGTON, THE PARTISAN BICKERING BACK AND FORTH, IF YOU WILL. CONGRESSIONAL QUARTERLY WEEKLY CAME OUT WITH THE IDEA THAT YOU HAD VOTED AGAINST THE PRESIDENT'S EXPRESSED WISHES MORE THAN ANY OTHER HOUSE MEMBER IN THE ENTIRE BODY. THOUGHTS ON THAT.
Jeff Flake: I HAVEN'T AGREED WITH THE PRESIDENT'S DOMESTIC AGENDA. SOME OF THE INTERNATIONAL THINGS I AGREE WITH THE PRESIDENT QUITE A BIT. HIS EFFORTS TO LIFT THE TRAVEL BAN OR LIFT RESTRICTIONS ON TRAVELING TO CUBA, HIS WILLINGNESS TO TALK TO SOME LEADERS AROUND THE WORLD OUR PREVIOUS ADMINISTRATION WANTED TO TALK TO, I THINK THAT'S GOOD. DOMESTICALLY, I HAVEN'T FOUND MUCH I LIKED WHAT THE ADMINISTRATION HAS DONE. AS FAR AS BEING PARTISAN, THOUGH, I DON'T THINK THAT I'M ANY MORE PARTISAN THAN ANYONE. I GO TO THE WHITE HOUSE, PLAY BASKETBALL WITH THE PRESIDENT. I LIKE HIM AS A PERSON, AND I JUST THINK THAT THE AGENDA IS ALL WRONG.
Ted Simons: ASKED THE QUESTION BECAUSE CRITICS WILL SAY, AND DEMOCRATS SPECIFICALLY WILL SAY, THAT IT'S -- THEY CAN FIND SOME FOLKS THAT THEY CAN AGREE WITH, BUT NO ONE IS AGREEING WITH HIM BECAUSE IT SEEMS THE REPUBLICAN PLAN IS TO OPPOSE AT ALL TIMES TO QUICKLY REGAIN POWER. RESPONSE.
Jeff Flake: THAT COULDN'T BE FURTHER FROM THE TRUTH. THERE HAVE BEEN TIMES WHEN I'VE SEEN PARTISANSHIP IN WASHINGTON AND ONE PARTY SIMPLY STANDS UP AND SAYS, LET'S NOT OFFER ANY ALTERNATIVES. LET'S JUST VOTE NO. BUT THIS ISN'T IT. REPUBLICANS THIS YEAR HAVE OFFERED ON HEALTH CARE, PROPOSAL AFTER PROPOSAL AFTER PROPOSAL. THERE ARE IN THE REPUBLICAN STUDY COMMITTEE, I THINK THERE'S SOME 70 BILLS THAT HAVE BEEN PROFFERED ON HEALTH CARE ALONE. SO WE HAVE ALTERNATIVES. BUT WHEN YOU HAVE BIG MARGINS, LIKE THE ADMINISTRATION DOES IN CONGRESS, LIKE THE DEMOCRATS DO IN CONGRESS, THEN IT FORCES -- DOESN'T FORCE THEM TO ACTUALLY DEAL WITH THE OTHER SIDE. WHEN YOU HAVE 60 VOTES IN THE SENATE AND A 40-VOTE MARGIN IN THE HOUSE, IT DOESN'T FOSTER COOPERATION VERY MUCH. I HAVE TO SAY THAT I WAS PRETTY HARD ON MY PARTY WHEN WE governed. I THOUGHT HOLDING THE VOTE, BEATING THEM OVER THE HEAD WAS WRONG. I THOUGHT THE WAY WE HANDLED THE PROCESS WAS WRONG. TODAY, FOR EXAMPLE, WE WENT THROUGH THE WHOLE YEAR LAST YEAR WITHOUT HAVING AN OPEN RULE ON APPROPRIATION BILLS TO ALLOW MEMBERS, ANY MEMBER, REPUBLICAN OR DEMOCRAT, TO OFFER THE AMENDMENTS THAT THEY'VE WANTED TO ON ANY APPROPRIATION BILL. THAT'S THE FIRST TIME IN THE HISTORY OF THE REPUBLIC THAT WE'VE HAD ANYTHING EVEN CLOSE TO CLOSED RULES ON APPROPRIATION BILLS. AND SO THIS MAJORITY IN THE HOUSE WITH A 40-VOTE MARGIN HAS NOT FELT THE NEED TO REACH OUT.
Ted Simons: CONGRESSMAN FLAKE, THANKS FOR JOINING US.
Jeff Flake: THANKS FOR HAVING ME.
Jeff Flake: U.S. Congressman;
