CQ Transcriptswire

SPEAKERS: JOHN KING, HOST

CHRISTIANE AMANPOUR, CNN CORRESPONDENT

SECRETARY OF HEALTH AND HUMAN SERVICES KATHLEEN SEBELIUS

SEN. KENT CONRAD, D-N.D.

SEN. BEN NELSON, D-NEB.

SEN. SUSAN COLLINS, R-MAINE

HOWARD KURTZ, CNN ANCHOR

RICK SANCHEZ, CNN ANCHOR

GREGG DOYEL, CBS SPORTSLINE

MARK HALPERIN, TIME MAGAZINE

ANA MARIE COX, AIR AMERICA

JIM GERAGHTY, NATIONAL REVIEW

MARY MATALIN, CNN CONTRIBUTOR

JAMES CARVILLE, CNN CONTRIBUTOR

REP. MIKE PENCE, R-IND.

[*] KING: I’m John King. And this is our STATE OF THE UNION report for this Sunday, June 14.

President Obama makes a new push for health care reform, but there are strong objections to his call for a government-sponsored insurance option, as well as concerns about the cost of his ambitious plan. Health secretary Kathleen Sebelius is here to lay out the case.

And, as Congress begins the work of writing health care legislation, there is broad agreement on the need for changes, but significant divides over how to pay for reform and how much power to give the federal government. We will break down the options with three senators crucial to any chance for a bipartisan deal.

And, in Tehran, crowds are thronging the streets in support of the reelection of Mahmoud Ahmadinejad to the presidency. Just a short time ago, Ahmadinejad spoke to reporters. He said the election was fair and free, despite accusations of vote fraud.

Our Christiane Amanpour was in the room. We will talk to her just ahead on STATE OF THE UNION.

We will spend most of our day today discussing the administration’s urgent push for health care reform here in the United States.

But, first, we go overseas on this Sunday, dramatic developments in Iran: President Mahmoud Ahmadinejad claiming a reelection mandate, his lead opposition candidate claiming voter fraud on a massive scale.

Just a short time ago, President Ahmadinejad gave a speech, claiming the election was free and fair and that he has a new mandate to govern. In the room and asking the questions included our chief international correspondent, Christiane Amanpour. She joins us now on the telephone from Tehran.

Christiane, a dramatic morning there.

AMANPOUR: That’s right.

He held a press conference for the domestic and international press, and it was an exceptionally defiant opening statement of 15 minutes, in which he basically claimed complete and total victory, saying that there was no question about the result, and blaming the foreign press for having their own agenda and questioning the results, saying that nobody else in Iran was doing so.

When people mentioned that there were people on the streets protesting, he said they were a handful of radicals and hooligans. He also said that Iran has the only true democracy, that it set a new model for democracy. And he lambasted liberal democracy, assigning it to the ash heap of history.

When he was specifically asked about the United States, he said: There are countries that we are now looking at them with. We’re considering the position of all countries with regard to the elections and how they behave -- quote -- “to the will of our people.”

And then he said: I have already offered to have a debate with the U.S. president, Obama, on the matter of the nuclear program. He said: In my mind, that is a thing of the past. We stand ready to prepare for any partnership on the nuclear issue and not going to give way to our desire to keep up what he calls a peaceful nuclear program.

I asked him specifically, when I got a chance to ask a question, about the opposition leader, because there are many rumors -- and we can’t pin down where he is, Mir Hossein Mousavi, or what is his fate.

We know that several, seven to 10, opposition leaders, officials, activists have been arrested, and more arrests may come. He (AUDIO GAP) directly answer me, despite the fact that I asked it twice. He answered with some kind of allegorical metaphor, in which he referred to traffic light infractions and anybody who speeds and goes past a red light will be fined.

And he seemed to imply that the opposition had broken the law and were being fined or punished right now -- John.

KING: And, Christiane, different set of rule rules when it comes to protesting and airing your anxiety, your frustration, perhaps your opposition to this.

What are we seeing on the streets of Tehran compared to, say, 24 hours ago? Are the opposition forces still out in numbers? Are the police making a determined effort to keep those who believe Mr. Ahmadinejad may have stolen the election off the streets?

AMANPOUR: Yes, they are making that determined effort. There have been riot police on the street, plus the sort of uniformed, non- uniformed shock troops, thugs who go out with their batons and -- and basically pound flesh and crack heads to keep law and order.

That’s what’s been going on. There were many, many of these protests yesterday, with several thousand people more than that. But, just where we were, several thousand people gathered and holding protests and rallies and shouting to “Mousavi, Mousavi, get my vote back for me.”

Overnight, we went out as well in the dark of the night, the early-morning hours, and we still saw many people in the streets. We saw garbage cans burning. We know that there were buses burnt and motorcycles burnt and the like.

Today, there have been smaller groups, ad hoc groups, but also some violence, we understand. Crews have been around that. But now the streets are being turned over to the supporters of Mahmoud Ahmadinejad. And his organization, the presidency, has bussed over foreign and domestic (AUDIO GAP) to go and cover that. And we will probably mosey on over there and cover that as well.

KING: Christiane Amanpour on the ground for us in Tehran, a dramatic story unfolding in Iran.

We will continue to follow it in the hours ahead.

Christiane, stay safe. We will be in touch with you.

The administration issuing a very carefully worded statement so far, saying, it is watching the situation closely. That statement did mention some voting irregularities. We will watch the White House reaction, too, in the hours ahead.

We want to turn now, though, to the major domestic story here -- unfolding here in Washington, and that is the administration’s push for dramatic health care reforms now.

(BEGIN VIDEOTAPE)

KING: President Obama begins his workweek Monday with a major push for health care reform. He calls the cost the nation’s current system unsustainable and says Congress must act this year.

But as his supporters on Capitol Hill get down the details, there are several different flash points. One is the call for a government- run insurance option that would compete with private insurance plans. Another is how to pay for this at a time of a punishing recession and already rising deficit spending.

Joining us now to make the administration’s case is the health and human services secretary, Kathleen Sebelius .

Welcome to STATE OF THE UNION.

SEBELIUS: Thanks, John.

KING: Let’s start with the moment. Why now, when you have a punishing recession, near 10 percent unemployment, GM bailout, billions of dollars being spent on that. That’s just at home? If you look around the world, the uncertainty in Iran, Iraq, Afghanistan, the push for Middle East.

Why now?

SEBELIUS: Well, John, as the president has said all during the campaign, and continues to say now, we can’t fix the economy without fixing health care.

The costs are crushing us. It’s hurting families. Our businesses are less competitive. We can’t continue on this pathway, so, fixing health care, not only taking some cost out of the system, but delivering higher-quality care to all Americans, and making sure that the 47 million Americans who don’t access on a regular basis to preventive care in the health care system has to change. And it has to change now.

KING: There are some who would say we have heard this argument before. And I want to take you back in time. It was in 1945, more than 60 years ago, Harry Truman said we needed a national health care system, that it was an urgent priority.

Critics called it socialism. Harry Truman didn’t get his way in. Then, in 1993, 16 years ago, then President Clinton said health care was a huge priority for many of the same reasons President Obama lists now.

Let’s listen.

(BEGIN VIDEO CLIP)

PRESIDENT WILLIAM J. CLINTON: ... to strengthen the economy will fail, unless we also take this year, not next year, not five years from now, but this year, bold steps to reform our health care system.

(APPLAUSE)

CLINTON: Our families will never be secure, our businesses will never be strong, and our government will never again be fully solvent until we tackle the health care crisis. We must do it this year.

(APPLAUSE)

(END VIDEO CLIP)

KING: The Clinton plan, of course, was defeated in Congress. Now the next Democratic president, Barack Obama , says, the moment is now.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Let there be no doubt, health care reform cannot wait, it must not wait, and it will not wait another year.

(CHEERING AND APPLAUSE) (END VIDEO CLIP)

KING: Many people will say, we have been down this road. And some, Secretary Sebelius, make the argument that President Clinton made the very same argument: Our businesses cannot survive. Our economy cannot survive. We must have health insurance.

And, yet, after the Clinton plan was derailed, we had the biggest period of growth in this country in the last 25 years. The unemployment rate was low. The government actually ran a surplus at the end of the Clinton administration, without health care reform.

So, there are many out there who will say this is, you know, boy crying wolf.

SEBELIUS: Well, I think that the situation has changed. The good news, is a lot of the people who opposed, not only the plan that Harry Truman put forward -- and he did relentlessly during his administration -- and what Bill Clinton put on the table, they were back as opponents, they’re now they’re at the table.

Doctors understand the current system doesn’t work. They’re spending way too much time on paperwork and overhead, and not enough time with patients. Hospitals can’t sustain it. The Medicare system is going to be broke down the road in the not-too-distant future, a system that millions of seniors rely upon.

Insurance companies are saying they are willing to change, they’re willing to talk about this. That’s a very different dynamic than even in the Clinton era, when those same folks were pushed away, saying the status quo is acceptable.

Everybody recognizes the status quo is the enemy. It’s unacceptable, unsustainable. We can’t continue down this path.

KING: Let’s look at some of the policy options. You mentioned doctors.

The president tomorrow will speak to the American Medical Association. Doctors are skeptical about this public option. And let’s look at -- we will show our viewers what our means. It’s a government-owned health insurance plan, similar to Medicare and Medicaid. And it essentially would increase competition. And the goal is to lower prices by having competition with private insurers.

Those who argue against it say the subsidies from the government would be unfair competition, hurt private insurers, and perhaps drain the federal treasury, because, once you have a government option in place, you need to pay for it.

How will the president make the case to the skeptics, even in his own party, that this is too much government?

SEBELIUS: Well, I think that competition is a good thing, that most Americans understand that choice and competition is what we want. So, if you look at a health exchange, a marketplace, where people can have some options -- in many parts of the country, private insurers have no competitor, in -- in a state like my own home state of Kansas. There is a dominant insurance company in a lot of the states.

So, we created a public option for state employees, so they could choose side by side benefits and prices. Competition is good. You can write the rules for a level playing field.

The president does not want to dismantle privately-owned plans. He doesn’t want the 180 million people who have employer coverage to lose that coverage. He wants to strengthen the marketplace.

But, you know, I -- I don’t think it’s a big surprise that a lot of insurers say, you know, what we would really like is, everybody who doesn’t have insurance to be told they must buy it, and buy it only from us.

The president feels that having a public option side by side, same playing field, same rules, will give Americans choice and will help lower costs for everybody. And that’s a good thing.

KING: And how do you answer those who would say: “We’re not sure. We’re not sure. Maybe we will be in that position of a public option, but we’re not sure. So, how about a trigger? How about you enact reforms that give the private insurance industry, maybe it’s three years; maybe it’s five years, and if, by then, they haven’t lowered costs, they haven’t brought the uninsured into the thing, then the government option would trigger and kick in then”?

What’s wrong with that?

SEBELIUS: Well, there are a lot of, now, specific ideas being discussed on Capitol Hill. And, certainly, the trigger is one of them.

But what Massachusetts found when they moved to insuring all citizens of the commonwealth is that, unless you address costs from the very first day, unless you have a system where cost control and cost lowering is one of the goals, you don’t do so well. You -- you can bring everybody into the system, but the costs may rise.

So, I think having a public option from the outset, having the design, being competitive, and making sure there is some choice, making sure that consumers have a choice of plan, and, for the first time ever in the United States, making sure that insurers don’t decide who gets covered -- if you got a preexisting condition, we want you in the marketplace, we want you and your family to be covered, and we want you to be able to go to a doctor of your choice and have preventive care and wellness care.

That’s part of reforming the system.

KING: Another option put forward by those, including in your party -- Senator Kent Conrad , the chairman of the Budget Committee, will be with us later.

He says he’s a little skeptical of having a national government- run plan. How about do something like they do in rural areas with electric co-ops? And, so, have a co-op plan. They’re privately owned, nonprofit health insurance cooperatives. And he says that would get you your goal. You would increase competition and lower prices.

The argument against it is, it’s hard to scope out how much that would cost the taxpayers. But is that worth trying as an alternative, if you have so many centrist Democrats and maybe even some Republicans who would join you if you did that way, not a government option?

SEBELIUS: Well, again, I think that having these ideas on the table is exactly where we need to be right now. The Senate is actively engaged in looking at strategies.

There is no one-size-fits-all idea. The president has said: These are the kinds of goals I’m after, lowering costs, covering all Americans, higher-quality care. And around those goals, there are lots of ways to get there. So, we’re going to look at idea by idea. I -- I think the good news is, the Senate and House are rolling up their sleeves. They’re ready to go to work, and they’re ready to work with the president to get this done this year.

KING: Another -- I’m going to use a term that might cause some eye-glaze-over at home, but it could become very important in this debate.

And it’s comparative effectiveness research. And this is where you collect and compare data on everything that is done out in the health care. And you want to see essentially what therapies, what tests, what surgeries have a high effective rate and -- and what don’t.

SEBELIUS: Right.

KING: The argument for is, you improve the quality of care and you eliminate unnecessary tests, unnecessary procedures, which saves money. The argument against is that, well, that will be used for rationing of some kind.

Will that be used in an Obama administration plan? And is there someone out there who might not get an MRI, might not get a CAT scan, might not get a certain test or a certain procedure because it only works in 50 percent of cases or it only works in 20 percent of cases, and, so, they will be told, no, sorry?

SEBELIUS: Well, John, I think the great news is, is there is fabulous medical care being delivered at lower costs all across America.

I was just in Omaha, Nebraska, and went to Lakeside Hospital, where it’s a fully digital hospital. And the doctors have come up with protocol to deal with everything from heart attacks to trauma care.

And they are trying to drive quality, so that every patient who comes through the doors of Lakeside gets the same high-quality care. And they find, not only is it very effective in reducing costs, but it’s very effective in terms of outcome. That’s what we want to have happen across the country.

So, comparative effectiveness research says, you know, does paying twice as much in McAllen, Texas, as some other part of the country deliver better care? And the answer is no. What are the strategies that work?

Every patient, if you could choose not to be operated on, and have a -- you know, a medication that works just as well, I think, would opt for that. If three tests don’t produce a better result than one test produces, I would rather have the one test, thank you very much.

So, we want to empower doctors and empower consumers to know what works, how often it works, what is the most effective, and try to help with that care.

KING: You say empower doctors. But if you -- once you have that data, you will be telling doctors, won’t you, especially if you have a government-run plan that is setting the tone of the marketplace and the rules of the marketplace? You will be telling them what’s in and what’s out, won’t you?

SEBELIUS: Actually, the comparative effectiveness research says, as part of the rules, that Medicare cannot use the research for payment decision. It prohibits, you know, the kind of rationing that people talk about.

What we’re doing right now is rationing quality, not cost. Higher cost does not translate to higher quality. We want better health outcomes for every patient. If you come through the doors of a hospital, if you see your doctor, you should be getting the best possible information, the best possible strategies.

And that’s happening some places. It’s not happening every place. And we think that part of reforming the system is that every American should getting the best bang for their buck. And they’re not doing it right now.

KING: Much more to discuss with the secretary of health and human services, Kathleen Sebelius . Stand by. We will have a lot more to discuss.

We will also get a status report on efforts to fight the H1N1 flu virus, which the World Health officials now say is a global pandemic.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

KING: We’re back with Health and Human Service Secretary Kathleen Sebelius .

And we wanted to come over to the magic map to take a peek. This is a map that shows...

SEBELIUS: Right.

KING: ... the percentage of uninsured across the United States -- essentially, the brighter the state, the highest percentage of residents in that state that are uninsured.

But I want to just focus on a few facts as we continue the conversation here. There are an estimated nearly 46 million Americans who are uninsured. Those projections vary a bit, but that’s a rough number people accept.

Sixty million Americans, by most estimates, lack a relationship (AUDIO GAP) you get when people get sick, 120 million emergency room visits a year, which drive costs way up.

SEBELIUS: Right.

KING: Now, how to deal with that is a big part of this debate, Madam Secretary.

I was in Florida this week. And a family physician named Dr. Dennis Saver says you need more primary care physicians, like him, but that medical students don’t want to do it. And here’s why, he says.

(BEGIN VIDEO CLIP)

DR. DENNIS SAVER, PRIMARY CARE OF THE TREASURE COAST, INC.: There aren’t enough primary care physicians right now. The economics right now make medical students disinclined to choose a career in family medicine or another primary care specialty, because most of them come out with a very substantial debt out of medical school, substantial meaning $150,000.

And they say, well, I can earn this, or I can earn twice this. What am I going to choose? Well, these are not dumb people. They make an obvious choice. (END VIDEO CLIP)

KING: How do you use the power of the government, whether it’s tuition subsidies, other incentives, to get more of these doctors to go into family primary care, and not the higher-paying specialties?

SEBELIUS: Well, John, the doctor is absolutely right, that the financial incentives are now weighted toward specialty care, and not to primary care and not to family practice docs.

I was with two young third-year residents in Omaha, and they said exactly the same thing. They want to go in family medicine, but they say, you know, at the end of the day, you say: How can I do this? How can I justify it?

We can begin to change those payment incentives. And we’re doing that right now through the Medicare system, helping to pay off tuition, helping to rebalance the incentives, financial incentives, to go into primary care.

The other thing that we -- we are doing -- and the Recovery Act provided some important resources to do it -- is double the number of Commissioned Corps members, so that doctors who serve in underserved area, who provide primary and preventive care absolutely are going to have their tuition paid.

We want more nurses and more mental health professionals. But the notion of the emergency room visits, which is going on all over the country, people coming through the door of emergency rooms, not only is it expensive and ineffective, but, frankly, they come at a sicker time.

If they had that early checkup, if their kids got the preventive care they needed, we would lower costs for everybody, instead of having them come through the doors of an emergency room.

KING: In the absence of national reform, many states have acted on it.

And I want to just remind our viewers again here, the brighter the state, the higher percentage...

SEBELIUS: Right.

KING: ... of its residents who do not have health insurance.

Well, look, Massachusetts is blue, the smallest percentage in the country without. Now, why is that? They have enacted state health care reform that includes a controversial item, an individual mandate on health insurance. You must get health insurance in Massachusetts.

You can be penalized more than $1,000 if you don’t buy insurance. Employers with 11 or more employees are required to buy it. And, as a result of this program, more than 97 percent of the state’s residents now have health insurance. Is this the way to go, Secretary Sebelius, at the national level, an individual mandate that says, you buy insurance, or else you will pay a penalty?

SEBELIUS: Well, as you know, the president, during the campaign -- and continues to say -- he -- he felt that parents need to purchase health insurance. The individual mandate should fall on parents.

There’s a lot of discussion in Congress of whether to expand that, like Massachusetts, and say, everybody has a responsibility. Most people, in my experience, don’t have health insurance, not because they don’t want it -- because they can’t afford it.

So, a mandate only works if, in Massachusetts, you have subsidies, help to pay if you’re lower income, help for employers to come into the system, help for everybody to get insurance, and get rid of the rules that say, if you’re sick, if you have had a preexisting condition, if you have had a heart attack or a stroke, we don’t really want you, or we’re going to charge you so much, that it’s totally unaffordable.

So, the rules have to change in order for any kind of a mandate to work.

KING: But you’re open to it?

SEBELIUS: Well, I think having everybody step up to the plate, having employers encouraged to come into the system, individuals certainly come into the system, and the government play its role, I think, then we can fully cover all Americans and lower costs for everybody.

KING: Well, let’s have a seat as we continue to what is the crux of the issue now, which is, how do we pay for this?

During the campaign, you mentioned that then Senator Obama was a bit skeptical about an individual mandate. He was also quite critical of a proposal pushed forward by Senator McCain, saying, increase -- to put tax -- tax the benefits that you receive from your employer.

I want you to listen to the president from the campaign.

(BEGIN VIDEO CLIP, AUGUST 28, 2008)

OBAMA: Now, I don’t believe that Senator McCain doesn’t care what’s going on in the lives of Americans. I just think he doesn’t know.

How else could he offer a health care plan that would actually tax people’s benefits?

(END VIDEO CLIP)

KING: But a tax on benefits is now on the table, right? Many in Congress think that’s the best way to go. SEBELIUS: Well, certainly, it’s one of the items being discussed, not by the president, but by members of the House and Senate.

I think that, again, the president starts with the premise that 180 million Americans have health coverage through their employer, that attacks on those benefits may dismantle that marketplace. So, while you are trying to make sure we cover the 47 million Americans who don’t have coverage, what we don’t want to do is destroy the system that currently is in place that lots of Americans like.

You start with the premise of, you continue what works and fix what’s broken. So, there is still a great deal of disagreement on whether or not taxing benefits at any level of any kind really does put us a step forward or take us a step back.

KING: We will have you back as the debate unfolds.

Before I let you go this morning, I want to just ask you about the H1N1 flu virus. You were on the program a short time back, when we were very concerned about the spread of the virus. Seems to have calmed down, but do you expect a resurgence in the fall, as the flu runs its normal cycle, and will there be a vaccine ready by then?

SEBELIUS: Well, we’re certainly making every effort to be totally prepared. The flu vaccine, strains are being tested as we speak. Production lines are being set up, so that production could start as early as late summer and be ready by the fall, if, indeed, a vaccine program is recommended.

We’re watching the Southern Hemisphere. Flu season is unfolding there, and we need to know what H1N1 is going to do when it mixes with the flu, and certainly watching across the country, as transmission continues.

The good news is, it still seems like not such a lethal virus, but we’re fully prepared. We’re getting governors ready to go, in case a major vaccination program is needed, working with school officials and health officials. So, preparation is -- is very much under way for what may happen this fall.

KING: Thanks for stopping in.

SEBELIUS: Glad to do it.

KING: We will, again, catch up again as the health care debate unfolds.

And you just heard the Obama administration’s side of the health care debate. Next, we turn to three senators who agree with the president that reform is an urgent priority, but they worry the White House wants to give the government too much power.

Stay with us.

(COMMERCIAL BREAK)

KING: Many Republicans, as well as some Democrats, are skeptical of President Obama’s health care proposals. So, what are the odds of passage, and is there any chance Democrats and Republicans might come together on this important issue?

Democratic Senator Ben Nelson of Nebraska joins us from Omaha. Republican Senator Susan Collins is in her home state of Maine this morning, and, here in Washington, Democratic Chairman of the Senate Budget Committee Kent Conrad of North Dakota.

Senators, thank you, all.

I want to spend most of our time on health care, but I want to start with the dramatic developments in Iran. President Ahmadinejad says he’s won in a landslide. The opposition candidate says he believes he’s been cheated. And the White House, in a very carefully worded statement, does say it believes there have been some voting irregularities.

Senator Conrad, to you first.

This president has said he wants to reach out to Iran, he wants to have a big dialogue with Iran. If Ahmadinejad claims victory, and the White House believes there are irregularities, does that diminish the reasons and the -- the moral standing of Mr. Ahmadinejad, to the point where you think dialogue should be lessened?

CONRAD: You know, I don’t know any of us know at this moment. If he won in a legitimate election, that’s one thing.

If it was filled with fraud, as is now alleged, that’s quite another thing. And we see the Iranian people in the streets by the thousands, saying that they believe that their votes were stolen. So, this becomes a very serious matter for the Iranian people, and certainly for our relations with them.

KING: And, Senator Collins, our Christiane Amanpour is on the scene, and she says some opposition leaders have been arrested.

Can President Obama have a dialogue with a government if he believes there have been voting irregularities and if he believes people who are trying to protest are being arrested?

COLLINS: It certainly makes such a dialogue much more difficult. But, frankly, I have always been skeptical about the success of any kind of dialogue with the hard-line leaders of Iran. We should certainly give diplomacy a chance. But I am skeptical that it will be successful. And these voting irregularities, the arrests of opposition clerics and opposition leaders, certainly makes it far more challenging for the president.

KING: And, Senator Nelson, does the United States have many options here, in a country that doesn’t often care much what we say?

NELSON: Well, certainly not until there’s some more clarity about what did or didn’t happen in this election.

But the arrest of opposition leaders for traffic violations probably tells more about the story than anything else that’s being reported.

KING: All right, let’s move on to the health care debate here in the United States.

Chairman Conrad, you have put forward a proposal skeptical of this government option -- number one, skeptical. Number two, you have done the math and don’t think the votes are there for it in the United States Senate.

So, you say, let’s do what we do in rural America with the electricity cooperatives. Let’s form a cooperative, some government help, but not government power. We just had Secretary Sebelius on the program. She said, well, let’s see, a lot of ideas on the table.

But they would not commit to it, not against it, but not for it right now. Why do you think that is the way to go, and the president’s plan, or Senator Kennedy’s plan, as it now stands, is wrong?

CONRAD: This really isn’t, to me, a matter of right or wrong. This is a matter of, where are the votes in the United States Senate?

About two weeks ago, I was given the assignment by this so-called G-11 group. That’s the chairman and ranking members of the key committees. And they asked me, almost in an offhanded way, see what you can come up with in terms of a compromise, because we have one group who very much wants a competitive delivery model to for-profit private insurance companies.

We have got another group, Republicans and Democrats, who are adamantly against the public option, because they see that as government control. So, a co-op model came to mind.

And, by the way, it’s not just in rural areas. We have real electrics in 47 states -- real electric cooperatives. Ace Hardware is a cooperative. Land O’Lakes, $9 billion entity, is a cooperative. REI is a cooperative.

So, we have got lots of cooperative models around the country that are very successful. And they’re membership-owned and membership-controlled, not government-run. But they do provide a nonprofit competitive model for the for-profit insurance companies. That’s -- that’s the potential of this idea. It appeals to both sides.

KING: And, Senator Collins, if Senator Conrad can sell that idea, can President Obama get Republican votes here?

COLLINS: Well, it’s an intriguing idea.

I have long supported the idea of allowing small businesses to band together and bind co-ops to increase their bargaining power. In addition, I’m a co-sponsor of a bill with Senator Feingold that also would establish purchasing co-ops for big businesses, small businesses, farmers, a wide variety of people.

So, I commend Senator Conrad for coming up with this idea. It’s far preferable to the government-run plan that has been discussed by the administration. So, this is a possible compromise. I need to know more details. We need to better understand how it would work. But it’s certainly better than a Washington-run plan.

KING: Senator Nelson, will you accept a public option? You have, on previous occasions, said it’s a bad idea. And, other times, you have said, well, you would need to see the details of it.

What can the president do to get Senator Ben Nelson of conservative Nebraska to say, “I can take more government role in health care”?

NELSON: Well, I think the government role can be a backup, as it is in the case of -- of the prescription drug benefit that’s been part of the Medicare plan. That’s a private -- private market that has been made available with a backup by a government option, if you will, a public option, that’s triggered in the event that there’s no market available on the private side.

And I think that’s what -- what we really ought to be looking at. I -- I -- Senator Conrad is on to something here. This -- this can be an additional method for competition. You will have private insurers. You can have cooperatives. And a lot of these ERISA-type programs are self-insured. Many large employers self-insure.

What we want to do is, we want to make sure that we preserve what’s there -- the president has made that very clear -- and be able to have competition, but to do it in a way that you don’t destabilize the insurance for 200 million Americans, trying to provide a way for 42 to 46 million Americans to have health insurance as well.

KING: Does it make you, Senator Conrad, somewhat skeptical of their motives, if they won’t take a trigger?

Let’s say, you take your proposal, co-ops, you do other things, and you essentially tell the private insurance industry, you are going to get your act together, or else? Whether it’s three years, five years, two years, pick your date. Pick your threshold. And, if you don’t meet this standard by then, then this government option will kick in.

Why does the White House, why does Senator Kennedy, why does Chairman Waxman on the House side say no?

CONRAD: Well, you would have to ask them. Obviously...

KING: You talk to them.

(LAUGHTER)

CONRAD: I do.

And they’re very committed to what I would call the pure public option approach, and understandably. There are very good arguments they can advance.

The problem is votes, you know? At the end of the day, nothing advances unless you get 60 votes in the United States Senate. Now, I know there are some who are saying, we can do this through reconciliation, which is a special fast-track process...

KING: Right.

CONRAD: ... that only requires 51 votes.

But I think, on exploration, people will find that really does not work, for a lot of arcane reasons we don’t need to go into. So, I think you are in a 60-vote environment. And that means you have got to attract some Republicans, as well as holding virtually all the Democrats together.

And that, I don’t believe, is possible with the pure public option. I don’t think the votes are there.

KING: We’re going to ask our senators to stand by. We’re going to work in a quick break. We will be back with Senator Conrad, Senator Nelson, Senator Collins in just a minute.

Much more to discuss when STATE OF THE UNION returns.

(COMMERCIAL BREAK)

KING: We’re back with Democratic Senators Kent Conrad and Ben Nelson and Republican Senator Susan Collins .

I want to spend a few moments on how we’re going to pay for this, at a time the government is in such dire straits. And I want to do by showing our viewers a fascinating graphic. We borrowed this from this morning’s “Washington Post.”

But, if you look at this, cost of Iraq war, $0.6 trillion in government borrowing, cost of World War II, $3.6 trillion. Government borrowing under President Obama’s proposals from 2010 to 2020, $9 trillion. And you look at the different circles there, the big blue circle on that screen is what President Obama proposes borrowing over the next decade. When you look at stunning numbers like this, Senator Collins, can the United States government afford health care reform right now?

COLLINS: Well, the president’s budget projects deficits that simply are not sustainable in the long run. They pose a threat to the health of our economy.

I do believe that we need to tackle health reform. And that’s important. We need to tackle entitlement reform to get a handle on our budget. But, so far, there is not agreement on how to pay for health care reform.

I think we need to look at where the money is going. For example, nearly one out of four Medicare dollars are used to treat and care for people with diabetes. That calls for an initiative to help improve treatment for people with diabetes and ultimately to prevent it.

Thirty percent of Medicare is used for care during the last year of life. We need to change our reimbursements to promote hospice care and home health care, which most people would prefer to have. So, there are steps we can take to improve the health care delivery system that can actually help us pay for an expansion of care, and, also, most important, to make health insurance more affordable for families who are insured now.

KING: So, if -- Senator Nelson, if you agree that this should be more targeted, number one, for policy reasons, and, number two, for price reasons, why is it that the administration wants to do it all at once?

You hear the administration’s argument, the business community needs this. Our economy needs this as much as the patients need it. And you hear others saying, well, that’s what Bill Clinton said. And when his plan went off the tracks in 1994, the economy actually grew. The unemployment rate was low. The government, God forbid, ran an operating surplus for a couple of years.

Is the administration’s big argument wrong?

NELSON: Well, I -- I think what they’re right on, for sure, is that we do need to improve the delivery system to reduce the costs.

Senator Collins is right on target there. If we can reduce the costs of care, we’re going to reduce the cost to the public and we will reduce the cost to the government in the -- in the overall.

For example, there’s a study out that says about 45 percent of the procedures that are applied in health care are inappropriate -- not malpractice, but inappropriate. In other words, what we -- with electronic transfer of records, with the focus on outcomes, on comparative medicine, we’re going to find better ways to deliver health care, more cost-effective -- cost-effectively, and better health care.

That will result in a reduction in the costs, including, I think, the -- the very expensive process we have right now of the shifting of costs from the government-run programs, Medicare, Medicaid, TRICARE, the -- the availability of SCHIP, or KIDS CONNECTION in Nebraska, which are -- in many cases, under-re -- under-reimbursing health care providers, which is a cost shift to private pay, as well as to self- insured.

So, there are ways to squeeze and wring some of the costs out, which I think will be helpful in the overall computation about how we pay for it.

KING: We will -- we will spend a lot more time on this in the weeks and months ahead.

I want to close with you, Senator Conrad, on the math of this. You say the votes aren’t there right now to pass what the president wants. I want you to project that out a bit further. When you look at all that borrowing that you saw in that graphic right there, you were around in this town in 1994. The Clinton plan went off the tracks. The Democrats lost 52 seats in the House and enough in the Senate to give the Republicans a majority.

Do you see your party right now on a similar road, if people -- if we continue the deficit spending, and if Republicans are able to make a big-government argument, because, even if all this passes, and even if it is near perfect, the results won’t be known to the American people by the time they vote next November. They won’t see it yet.

CONRAD: Look, this is a challenging circumstance.

But you asked the fundamental question: Can we afford to do it now? We can’t afford not to. If you look at what’s happening to family budgets, what’s happening to our businesses, what’s happening to our government, in this economy, we’re spending one in every $6 in health care.

On the current trend line, we’re headed for one in $3 to be spent on health care. That’s totally unsustainable. We have got to reform the system. Senator Collins, Senator Nelson have given very good ways to do that by reforming the delivery system.

I hope my co-op idea makes a contribution. Look, this is something that we simply must do for our families, for our businesses, for the country itself.

KING: We will have all three of you back as the debate continues. I wish we had more time this morning.

Chairman Conrad, Senator Nelson, Senator Collins, thanks for being with us this morning.

And next: the health care debate up close. We take you to Central Florida, where the recession is adding more people to the already crowded waiting rooms at clinics that help those who can’t afford health insurance.

Stay with us.

(COMMERCIAL BREAK)

KING: In our travels this week, we wanted to get a sense of how you feel and how you see the health care debate.

We went down to Florida because it captures so many of the big demographics in our country -- the state unemployment rate now, 9.6 percent -- 3.7 -- 21 percent of the people of Florida lack health insurance. That number has gone up because of the rising unemployment rate -- 270 doctors per 100,000 residents. That’s ranked third in the country.

We wanted to ask these questions of patients: How do you think the health care system could be better? We also wanted to ask doctors, what’s right with the system and what’s wrong?

(BEGIN VIDEOTAPE)

KING (voice-over): Mary Yates is back. And, again, the news about her blood pressure is not good.

MARY YATES, UNINSURED: We want to see a number around 100 or below. And yours is 145. LDL, which is the bad cholesterol, is a risk factor for coronary artery disease.

KING: The last prescription made her dizzy, so Mary gets a different drug this time, as well as an anti-inflammatory for a sore hip.

YATES: Taking all this medicine, can you just take it just one pill after -- after another at night?

UNIDENTIFIED MALE: You can. You can. But you...

YATES: Really?

UNIDENTIFIED MALE: Just be sure to take them with food.

KING: This is the employees clinic at Florida Hospital in Orlando. But Yates doesn’t work here. In fact, she doesn’t work at all. Two years ago, she lost her job, then her home, and more.

YATES: I’m the person that’s fallen through the cracks here, after working all these years. You know, I thought I was saving toward retirement. I have -- I have used that.

KING (on camera): So, without this clinic, you would be what?

YATES: I might be dead. That’s what they were telling me. My blood pressure was running about 180 over 100. He said, it’s at stroke level. You need -- you have got to get in to see a doctor.

KING (voice-over): Three days a week, this is a free clinic, first come, first served.

And Dr. Jenni Keehbauch says the recession is driving up demand.

DR. JENNI KEEHBAUCH, FLORIDA HOSPITAL: And what we have found is that we’re turning more patients away, unfortunately. And -- and we are needing to expand in the near future. We’re seeing patients that saw us in the early 2000s, left us, got jobs, got insurance. And then now they’re coming back again, saying: Hey, we’re glad you’re here. I just got laid off.

KING: Ask Dr. Keehbauch about the health care reform debate in Washington, and increasing access is her first priority.

KEEHBAUCH: In our county alone, we have 200,000 patients that are uninsured. So, there’s just poor access to care. And the care is fragmented. Even the people with insurance, you know, they have a lot of specialty care, but they don’t have a permanent care person that is kind of captaining the ship.

DR. DENNIS SAVER, PRIMARY CARE OF THE TREASURE COAST, INC.: Breathe real deep.

KING: Dr. Dennis Saver, whose practice is in Vero Beach, sees major long-term savings in erasing that shortage of primary care physicians.

SAVER: The whole system is really, really expensive, because we don’t do it right. If we had thoughtful primary care on the front end, then people would not need to go and see three or four different doctors for one problem.

All right, sir.

KING: And Dr. Saver sees merit in calls for an individual mandate requiring every American to get health coverage.

SAVER: I think it does make sense, because you -- you can’t have a system in which people are out of it when they’re healthy and only in it when they’re sick. And, so, it’s kind of like everyone pays taxes. To make the infrastructure work, I think that -- that you really have to have everyone in there contributing.

KING: Mary Yates would love to be contributing, but can’t find work. And even the help from the free clinic only goes so far.

YATES: It’s just tough. I feel sorry (INAUDIBLE) because there’s people out there I have met here that have nobody. You know, at least I have some family that can help.

But even family I have called this year, they have said: “Don’t call me and ask me anymore. I can’t.”

I mean, now I have got to come up with money to go buy prescriptions. And that’s not going to happen a lot. It may not happen this week. I don’t know. I don’t know what to do.

(END VIDEOTAPE)

KING: Just want to thank Mary Yates and everyone we met in Central Florida for sharing their stories and their thoughts with us.

Coming up at the top of the hour for viewers here in the United States, Howie Kurtz looks at why the media spotlight is back on Alaska Governor Sarah Palin .

(COMMERCIAL BREAK)

KING: I’m John King, and this is our STATE OF THE UNION report for this Sunday, June 14.

Alaska Governor Sarah Palin is back, making headlines and sparring with a late-night talk host. Is she getting fair coverage from the national media?

Our -- in our RELIABLE SOURCES hour, Howie Kurtz breaks down the press coverage with three veteran observers.

And later: tweets and Twitterers who send them. What is the 140- character limit doing to journalism? CNN’s Rick Sanchez and Gregg Doyel of CBS SportsLine debate issue.

And, of course, we will have continuous updates on the developing situation in Iran, where demonstrations in support and in protest of the election of President Ahmadinejad continue.

That’s all ahead on this Sunday’s STATE OF THE UNION.

It’s time now, as we do every Sunday, to turn things over to Howard Kurtz and his RELIABLE SOURCES.

And, Howie, “The New York Times” one of many newspapers across the country today dedicating a lot of space and dramatic pictures to what’s going on, the developing situation in Iran over the presidential election.

KURTZ: Yes. And, John, executive editor Bill Keller one of the journalists in Tehran doing the reporting there.

Which struck me in watching the coverage yesterday and today, including that from CNN’s Christiane Amanpour, it is awfully difficult for journalists, even the best ones, to sort out the central question there: Was this election rigged?

KING: Absolutely right. It’s a very tough country to cover. And we applaud everyone over there trying to do their best.

(LAUGHTER) KURTZ: All right. Talk to you later in the hour, John.

But, first, from the moment she stepped into the national spotlight last summer, Sarah Palin has been a source of endless fascination for the media. Everything, from her hunting habits, to her looks, to her baby, to her daughter’s baby, has been deemed fair game.

But, with the governor spending the last few months in Alaska, the press has lacked an opening -- until this week, when Palin first agreed to speak at a big Republican Party fund-raiser here in Washington, then backed out, then wound up attending, but not speaking, while Newt Gingrich gave the keynote address.

That was all the pundits needed to start yacking about a GOP civil war.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR, “AC360”: Is she trying to remake the GOP into the party of good old Palin?

BRET BAIER, FOX NEWS: There has since been a considerable stink about whether she would show up and be allowed to speak.

RACHEL MADDOW, MSNBC HOST: Sarah Palin will not be speaking. She mustn’t upstage Newt Gingrich. She knows how he got...

CAMPBELL BROWN, CNN ANCHOR: Is the GOP afraid of Sarah Palin ?

DAN ABRAMS, ABRAMS RESEARCH: Sarah Palin to me is like the representative of everything that’s gone wrong lately.

(END VIDEO CLIP)

KURTZ: Palin meanwhile found a better platform. A friendly chat with Sean Hannity where she and the Fox News host took turns ripping the President Obama.

And then of course, she took to the airwaves to do battle with David Letterman.

Joining us now to talk about the media’s Palin fixation and whether Letterman went way over the line in mocking her: in New York, Mark Halperin, editor-at-large and senior political analyst for “Time” magazine and editor of the blog known as “The Page;” here in Washington, Ana Marie Cox, national correspondent for “Air America Radio” and now a columnist for “Playboy” magazine; and Jim Geraghty, contributing editor at “National Review.”

Mark Halperin, on this speech flap, the journalists pump up this little mishap just so they could -- oh I don’t know -- talk and argue about Sarah Palin ?

MARK HALPERIN, EDITOR-AT-LARGE, “TIME” MAGAZINE: Howie, this is one case where it’s not the press creation. A lot of Republican sources that all of us talked to were very unhappy with what Governor Palin did and the confusion in her political operation.

And it goes to a larger question. If what we’re interested in is Sarah Palin ’s political future, and not just gossip about her and her family. The question is, is she doing what she needs to do now in order to be a plausible presidential candidate in 2012? Her relationship with the National Republican Party, confusion in her operation, a lack of confidence in her and those around her is what was at issue there; not gossip and not the rivalry with Newt Gingrich. And that’s a legitimate issue and one the people covered.

KURTZ: Sure, but the way that it was largely framed on television Ana Marie Cox was Sarah versus Newt. The dinner showdown and actually, Gingrich said some nice things about her at that dinner.

ANA MARIE COX, NATIONAL CORRESPONDENT, “AIR AMERICA RADIO: And I -- from what I understand from people that I’ve talked too, say the same things the people that Mark has talked to, I mean, it was not about Sarah versus Newt it was more about Sarah versus sort of the apparatus of the GOP.

And her relationship with him, indeed lack of professionalism in her operations.

KURTZ: Then television, I would say, missed the main point. Jim Geraghty did the mainstream media, some journalists, at least have something of a chip on their shoulder when it comes to Governor Palin?

JIM GERAGHTY, AUTHOR AND FOUNDER THE CAMPAIGN SPOT BLOG ON NATIONAL REVIEW ONLINE: A chip or even an entire bag or maybe entire truckload. A Silicon Valley’s worth of chips out. Look, let us say, there have been -- having dealt with some of Sarah Palin ’s staff, there are times where it’s tough to get statements out of them.

They are not terribly quick to put -- at least they’ve gotten better. But particularly when she -- right after the election it took a long time to get a fully-staffed, fully-mobilized press operation going.

KURTZ: I’ve been told it’s hard to get answers out of the governor’s office even now which of course, let some of these stories fester.

GERAGHTY: Its not unthinkable that I’m more like -- more liked by her people in other people out but nonetheless, look, when you don’t get a -- when a reporter doesn’t get his phone call returned, that grates on them. That may in some form or another, get reflected in the coverage.

You may end finding out people who are taking out kind of a personal dissatisfaction for her staff out of the coverage of the governor herself.

KURTZ: All right, and what also got a lot of coverage this week was of course a series of jokes by David Letterman on “The Late Show.”

Let’s take a look at a couple of them and then we’ll talk about Sarah Palin ’s reaction.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST OF “THE LATE SHOW WITH DAVID LETTERMAN”: Number two, bought makeup at Bloomingdale’s to update her slutty- flight attendant look.

One awkward moment though, during the game maybe you heard about it, maybe you saw on one of the highlight reels one awkward moment for Sarah Palin at the Yankee game. During the seventh inning, her daughter was knocked-up Alex Rodriguez.

(END VIDEO CLIP)

KURTZ: Mark Halperin, I give comedians a pretty wide berth for satire, but going after a teenage kid?

HALPERIN: Howie, you and I are in exactly the same place on this. David Letterman, not known -- he’s not Sarah Silverman, he’s not the most edgy comic actor but in this case I think people across the board say he went too far.

That’s analysis of comedy, that’s something we can do, but in terms of Sarah Palin , it’s not necessarily clear that just because he went over the line its politically smart for her to do what she did.

KURTZ: And she certainly, either out of personal or political motives, or combination thereof she called Letterman’s jokes crude, sexist, perverted. And those are even...

COX: She implied that he was a pedophile. And I have to say that I think the joke was over the line, but that’s over the line, too. I think that if you look at the analysis of humor, it was a joke that shouldn’t have left the writer’s room but it’s not something that you needed to go to war over.

Especially, since -- I think he gave a sort of smug apology, kind of smarmy non-apology. But she could have let it drop.

KURTZ: I would agree that it was a non-apology. Let’s play some more for the viewers and let them decide.

(BEGIN VIDEO CLIP)

LETTERMAN: Were the jokes in question in questionable taste? Of course they were.

UNIDENTIFIED MALE: Of course.

LETTERMAN: Do I regret having told them? Well, I think probably I do but, you know what? There are thousands of jokes I regret telling on this program.

Would I do anything to advocate or contribute to underage sexual abuse or misconduct? Absolutely not, not in a thousand years.

(END VIDEO CLIP)

KURTZ: Jim Geraghty, he knew he had stepped in it, but he didn’t seem terribly sorry.

GERAGHTY: The words “I’m sorry” would have been nice. And the other thing I was going to observe is it seemed like -- look, even in the Mafia they talk about not going after civilians, people who are in the game, people who are not in the game. Don’t go after kids.

If I have to explain why it’s wrong for a grown man to tell a joke in which the butt of the joke is an underage child, I don’t know -- if that doesn’t come instinctive to you, I don’t know if I can explain it.

KURTZ: And once -- and once it happened, do you believe that the press by and large gave Letterman a pass, in a way that perhaps would not have been the case if the joke had been about Obama’s daughters or Chelsea Clinton when she was younger or something like that?

GERAGHTY: Anyone who told joke about Obama’s daughters would be crucified in the mall and I’d probably be there carrying the torches myself. So I think again, kids should be off-limits. I think there was a mild tsk-tsking. I think everyone kind of recognized it was wrong.

But there was not the full-edge firestorm you saw for say Don Imus when he made his comments about the Rutgers’ basketball team.

KURTZ: Mark Halperin, way in on that if you would.

HALPERIN: Well, I think David Letterman has a lot of goodwill in the press and again, this is not typical for him. I think given how much goodwill he has there was a fair amount of condemnation.

Again, to talk about though, from Governor Palin’s point of view, if she’s doing this purely for personal reasons if she feels it’s important to defend her family, that’s fine.

But if you’re thinking about it from the point of view of -- is she increasing her chances of being a player in 2012 or her stature within the Republican Party, I don’t think going after a comic, even if he’s crossed the line as Letterman did in this case, is a good strategy.

KURTZ: One of the things that she did, of course, is keep the story in the news beyond the initial day or two by going on television.

She was on CNN with Wolf Blitzer, she was on “The Today Show” with Matt Lauer. And in that NBC interview, Governor Palin talked about how she wouldn’t want her daughter Willow anywhere near David Letterman. Let’s take a look.

(BEGIN VIDEO CLIP)

MATT LAUER, NBC HOST, “THE TODAY SHOW”: Are you suggesting that David Letterman can’t be trusted around a 14-year-old girl?

GOV. SARAH PALIN, (R) ALASKA: Hey, take it however you want to take it. It is a comment that came from the heart that Willow, no doubt, would want to stay away from David Letterman after he made such a comment. (END VIDEO CLIP)

KURTZ: So is she speaking there as a mother, as a governor, as a potential presidential candidate as Mark Halperin suggests?

GERAGHTY: For starters, I wouldn’t treat her as a 2012 candidate until she gets more serious about it, which I think isn’t going not to happen anytime before they -- any potential reelection bid in 2010.

But even beyond that, look, even if that’s a harsh comeback against David Letterman to kind of insinuate a certain pedophilic vibe to him, you can’t really beg for mercy after you just told a joke about the woman’s daughter. I mean, you kind of went there, Dave. You kind of invited a rough response.

COX: And even if it’s the 18-year-old, and not the 14-year-old, that doesn’t make it a lot better. I thought that was a weird distinction...

KURTZ: His defense was no, no he was not talking about 14-year- old Willow who was at the Yankee game with her mother, but 18-year-old Bristol who of course has a baby, famously.

COX: Yes.

KURTZ: And so that’s OK?

COX: Right. It’s not OK.

I think the thing that really frustrates me about the situation is not how much people are taking Sarah’s side or Letterman side, is that they were covering it all because as Halperin said, if -- I don’t think this is part of a concerted strategy to position herself for 2012. I think this is an angry mom. Maybe she isn’t saying -- saying things that aren’t the smartest political things to say, but I don’t know why we need to give it that much coverage.

There has been a back and forth that we understand what the two positions are; let’s move on.

KURTZ: Well, here’s my two cents. I just think that the mainstream media, they like David Letterman. They don’t think we want to come down on David Letterman. Maybe they think that Sarah Palin is fair game for this kind of personal sharp humor.

And he got a total pass, very few major newspapers even talked about this. There’s a big television talk-topic and even fewer had anything other than as you say Jim, a tsk-tsking toward David Letterman. This was not Tina Fey gentle mockery, this was pretty rough to go after as he did a 14-year-old girl or an 18-year-old girl.

And I don’t think the apology was sufficient. Nobody at CBS has said a word about this. And I think that’s unfortunate.

Let’s move on to a slightly lighter topic. Sticking with the topic of comedy, we had the President of the United States in the last two weeks making -- popping up on a couple of late night programs. Let’s take a brief look at the comedy stylings of Barack Obama .

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think that Conan will do an outstanding job. This is something we discussed several times in the Oval Office, how to manage this transition between Leno and Conan.

I say if Steven Colbert wants to play soldier, it’s time to cut that man’s hair. General, as your commander-in-chief I hereby order you to shave that man’s head.

(END VIDEO CLIP)

KURTZ: And he did.

Mark Halperin, some people are wondering, doesn’t the leader of the free world have better things to do?

HALPERIN: Well, that’s part of the gift of Barack Obama . I think two-fold, one is he’s a great performer in those situations. He -- I don’t know how many takes that required, and how much of his time actually he gave out but he hits it every time.

Look, it’s a challenge for every President who wants to be seen as an ordinary person to be -- have the majesty of the office, and show that he’s hard at work but also to show that he is a regular guy.

And Barack Obama with the help of the Press Corps who really likes that side of him is able to pull it off. I think he’s untouchable on things like this, even though I think there are other presidents who might have engaged in such things would have gotten a little more criticism.

KURTZ: I’ve got 20 seconds each. Does it help the President to hang out, electronically speaking with Conan and Colbert?

COX: Well, it certainly helps Conan and Colbert.

GERAGHTY: I’ve got a lot of gripes with Barack Obama ; this is not one of them.

KURTZ: But if some critics are going after him on this, the way they did about when he took his wife to New York to see a Broadway play, do they risk come up as little humorless?

GERAGHTY: Yes.

KURTZ: (INAUDIBLE)

GERAGHTY: No.

COX: You got short answers that of both.

KURTZ: That’s an unusually brief response from Jim Geraghty. It gives us a chance to go to break. When we come back -- crazy talk. The pundits pounce after a crazed anti-Semite kills a guard at the Holocaust museum. Here we go again, should commentators be blaming anyone but the guy who pulled the trigger?

(COMMERCIAL BREAK)

KURTZ: Ten days after the murder of abortion doctor, George Tiller sparked an eruption of partisan finger pointing, tragedy struck again, this time at Washington’s Holocaust Memorial Museum when James Von Brunn shot and killed a security guard this week, the pundits went at it again. Was there a link between inflammatory talk on the right and this deranged anti-Semite?

(BEGIN VIDEO CLIP)

RACHEL MADDOW, MSNBC HOST: Now within less than two weeks, we have seen two shootings -- two fatal shootings in which the prime suspect is quite clearly motivated by extreme right wing political views.

KEITH OLBERMANN, MSNBC ANCHOR: Rush Limbaugh knows not to bother denying that Von Brunn’s rhetoric sounds a lot like Rush Limbaugh’s.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: This guy is a leftist. If anything, this guy’s beliefs, this guy’s hate stems from influence that you find on the left, not on the right.

(END VIDEO CLIP)

KURTZ: Ana Marie Cox, is it fair in the case of this Holocaust Museum nut job for liberal pundits to suggest any link at all to right-wing media talk?

COX: Is it fair at all? That’s a really complicated question. I mean, obviously, this sort of -- whether or not you could take a moral responsibility for something over a direct responsibility for something. I think if I was someone who was using some of the same rhetoric that he used, I would feel some moral responsibility for his actions, but there’s not something you can draw a legal line between.

And I do think it is irresponsible to make that a very like hard connection. I have to totally disagree with Rachel and Keith on this. I think that that was going a little bit too far to compare him to Rush Limbaugh.

KURTZ: Jim Geraghty, when Von Brunn -- this guy has a well- documented history of hate, going back 30 years, which is well before there was a Fox News or Rush Limbaugh had a national radio show.

GERAGHTY: It’s always very tempting to say that those who disagree with you aren’t just wrong or mistaken, but that they’re actively evil and that they’re insane. And I think it’s a temptation you find on both sides of the aisle.

The Unabomber, apparently was a very involved in varying environmental causes so there are some folks on the right who wanted to say, “This shows you that the left environmentalists are wackos. Not all of them are. In fact quite a few of them aren’t.

So it’s kind of just cheap point scoring to say, “Look, this is why you shouldn’t listen to Bill O’Reilly or Rush Limbaugh or Glenn Beck because all their listeners are potential terrorists just waiting to go off.

KURTZ: And yet Mark Halperin, it seems that both sides -- at least some members on both sides -- can’t resist the point scoring. We saw this in the George Tiller murder as well; an immediate rush by commentators to start assigning blame.

HALPERIN: It’s really unfortunate, Howard. The first thing we should all do is deplore the loss of human life and feel bad for the victims and their families. The second thing is we should not let the freak show of our left/right politics on cable TV, on the Internet, dominate how people can cherry pick biographical aspects of some of the people who’ve committed these horrible acts.

What we need to do is have responsible people. And I think the president should be stepping forward more than he has. He should lead a bipartisan, nonpartisan dialogue to say what has happened here -- what does it mean for our society.

This kind of dialogue and kind of debate which is run of the mill and takes over almost every political discussion in this country cannot be allowed to dominate discussions of horrible acts of violence on either side in any case.

KURTZ: But since you raised that part, Mark, how much responsibility does cable TV have for putting on what you call this nightly freak show?

HALPERIN: A ton and it shouldn’t happen. Because once you start cherry picking and trying to figure out how to connect the motivations and biography and rantings of people who commit these horrible acts with other people, you are committing an absolutely irresponsible act. And you’re committing an act, which, again, is only going to inflame.

You know, cable TV does what it does. People need to step forward -- responsible people, politicians, civic leaders, people in the media -- and say we’re not going to take an act of violence and turn it into a political football.

KURTZ: I want to play some tape from Friday when Salon editor Joan Walsh who had pretty strongly criticized Bill O’Reilly for his repeated and personal attacks on George Tiller before of course the Kansas abortion doctor was murder. She went on the O’Reilly Factor and it got pretty heated. Let’s look at that.

(BEGIN VIDEO CLIP)

BILL O’REILLY, FOX NEWS ANCHOR: You don’t care.

JOAN WALSH, EDITOR, SALON: He was running a legal facility.

O’REILLY: You know who has blood on their hands? You.

WALSH: That’s ridiculous, Bill.

O’REILLY: It isn’t ridiculous.

You’re the zealot, you are the zealot.

WALSH: You’re a piece of work my friend.

O’REILLY: You’re the one who has blood on your hand.

WALSH: I don’t have blood on my hand. You do.

O’REILLY: You’re the zealot who wouldn’t even -- you won’t even consider this man...

(CROSS TALK)

WALSH: I’m a pro-choice Catholic.

O’REILLY: Oh, baloney.

(END VIDEO CLIP)

KURTZ: Did O’Reilly bully Joan Walsh and tried to tie her to the killing of babies?

COX: Yes. But the only thing that can make that more of a freak show would be clown shoes. I think that’s really unfortunate. I almost am sorry that we watched it just now.

Because these are all -- these are very serious issues. There are some things that actually all three of these cases have in common which are why they were allowed to happen, not what the motivations were. All three of the people -- I’m referring to the third case is the shooting of the National Guard station in Arkansas. The alleged assailants in these cases all had previous crimes that should have been really big red flag.

I want to make one point about George Tiller though. The Tiller case is different than the other two in one way which is that as a country we are usually really good about not letting terrorists scare us. People will continue to go to the Holocaust Museum. I imagine people will continue to sign up for the National Guard. George Tiller’s clinic got shut down.

KURTZ: O’Reilly was defending himself before things got out of control against Walsh saying that he bore some responsibility or at least indirect responsibility in the Tiller murder. What George Tiller was doing, whether you like it or not, was legal. What did you make of that confrontation?

GERAGHTY: I found it extremely edifying. When people yell at each other and then wave their fingers and say how dare you, it seems like this was destined for an endless, ever-increasing “how dare you” effect.

KURTZ: But Joan Walsh was trying to respond, he was talking over her, and then they started talking over each other.

GERAGHTY: Which is what some cable news programs do at their best like you see there or as part of the schtick. I don’t think there’s anything particularly useful about it. But to a certain extent, if you are going to accuse someone of having blood on their hands, they’re not going to react, gee, maybe I do. They’re going to respond “How dare you.” And then maybe you’re destined to have that screaming pointer.

(CROSS TALK)

KURTZ: Just briefly, Mark Halperin, some of the conservative shows have been playing up the murder of Private William Long -- this was the guy who was killed by a Muslim extremist allegedly at a recruiting station -- it seems like ideology even plays a part in these news decisions?

HALPERIN: Well, it may in some news organizations, but it’s also the reality of one murder taking place in Arkansas, one taking place in Washington, and one taking place involving someone who had been a national figure. There are other things at issue.

I think our friend Bill O’Reilly might want to go on dictionary.com and look up the word “host” and get a sense of what that actually means.

KURTZ: This is a complicated and emotional issue. And I appreciate all of you discussing it this morning, Ana Marie Cox, Jim Geraghty and Mark Halperin in New York. Thanks for joining.

Coming up in the second half of RELIABLE SOURCES, taking on Twitter -- CNN’s Rick Sanchez will respond to a bit of mockery by Jon Stewart over his addiction to viewer feedback and a columnist who finds the whole Twitter thing just plain annoying.

The ABC News president David Westin on reporting the human face of the recession, the evening news race and the future of “Nightline.”

And coming up at noon Eastern, as the Obama administration makes its push for health care reform, John King sitting down with Health and Human Services Secretary Kathleen Sebelius .

(COMMERCIAL BREAK)

I’m John King and this is “STATE OF THE UNION.” Here are the stories breaking this Sunday morning.

New clashes between police and protesters in Iran today even though President Mahmoud Ahmadinejad insists his re-election was legitimate. At a news conference today he refused to guarantee the safety of his rival, Mir Hossein Mousavi.

On the streets of Tehran, Ahmadinejad supporters held a huge victory rally.

Joe Biden says it is critical that the United Nations and other nations enforce new United Nations sanctions against North Korea. Those sanctions include searching ships suspected of carrying banned weapon material to North Korea and expanding an arms embargo against the Communist nations. The sanctions were passed on Friday in response to Pyongyang’s recent nuclear tests.

Israel’s prime minister is scheduled to give what’s being called a major speech on Mideast peace today. Benjamin Netanyahu has rejected the idea of two states for Israelis and Palestinians and rejecting freezing Israeli settlements in the West Bank. Those are the goals President Obama endorsed during his policy speech recently in Cairo.

That and more ahead on “STATE OF THE UNION.”

Time now though to turn things back over for to the second half hour of Howie Kurtz and his RELIABLE SOURCES -- Howie.

KURTZ: John, before you ago, as you know, it’s now one year since the death of Tim Russert, watching some of clips on NBC. I’m reminded of his great passion both for politics and for life. His passing has left something of a void, hasn’t it?

KING: Without a doubt he’s left a void in our business but Howie, I will tell you how I miss him most. I’m a Wizard season ticket holder here in Washington. Used to see him quite a bit with his son Luke and as a parent I admired him for how much he loved his son. That’s the model I would follow.

KURTZ: Yes, he talked about Luke quite a lot. And of course, his passing also has intensified the Sunday morning competition as you and David Gregory and Stephanopoulos and Bob Schieffer and Chris Wallace all try to seize that mantle.

We’ll talk to you later in the hour. Thanks very much.

You heard me talk more than once about being on Twitter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Today’s story this week, what would Shakespeare tweet? Lots of folks at CNN talk about the Web site and make an art of brevity; all messages are limited to 140 characters. In fact, Twitter has become so embedded in the culture here that Jon Stewart had a little fun with the subject the other night.

JON STEWART, HOST, “THE DAILY SHOW”: By the way, why do I have to follow CNN on Twitter? If I want to follow CNN, I can follow them on CNN. RICK SANCHEZ, CNN ANCHOR: I’m talking about twitter. This is “Time” magazine. It’s on the cover. Twitter, which I think is fabulous.

TONY HARRIS, CNN ANCHOR: Tell us what you think about president Obama’s speech? Leave us a comment on my blog.

KYRA PHILLIPS, CNN ANCHOR: Why don’t you tell us what you think? Tweet us.

JACQUI JERAS, CNN METEOROLOGIST: Tell me what you’re doing this weekend. I want to hear from you.

STEWART: CNN has basically given up. They’ve actually put the power of the news in your hands.

DON LEMON: A lot of you are weighing in tonight. Here’s what Bugsack says, “Fighting for the life of children should not include the killing a doctor.”

STEWART: Whenever I’m troubled with the difficult moral question of abortion, I think what would Bugsack say?

(END VIDEO CLIP)

KURTZ: Are we going overboard with this Twitter business? Joining us now from Atlanta is CNN anchor and Twitter fan, Rick Sanchez. You just saw him with that “Daily Show” bit and in Orlando, where he’s covering the NBA finals, Gregg Doyel, columnist for CBS Sportsline.

All right, Sanchez. Jon Stewart basically says you’re a wuss and you’re just filling up your programs with these brief bursts from the masses.

SANCHEZ: Here’s what’s going on. There is no question that there’s a group of people out there who have formed communities and they want to be connected. What could possibly be wrong with us wanting to connect to people who want to connect to us?

It just makes all the sense in the world. For the longest time we, who call ourselves, journalists have really been a bit of a closed community. I think what social media is doing is allowing us to talk to people for the very first time and give them an opportunity to talk back to us.

KURTZ: Rick, is it really two-way communication when so many people write in? Isn’t it more like talk radio when only a few callers get through?

SANCHEZ: Very different from talk radio. With talk radio, you’re lucky if you get in. And usually the one person who gets in is chosen is chosen because they’re going to make a lot of noise. The host doesn’t go home and continue the conversation with all those people on talk radio. Twitter and social media is very different. I use it because within there I find reliable sources and I also find consensus builders. So I get -- look, social media has made me a better journalist. It’s made my show a better newscast. I’m convinced of that.

KURTZ: Let me toss the ball to Gregg Doyel. I want to quote something you wrote about Twitter. Let me make sure I get this precisely. You called it annoying as hell.

DOYEL: Yes. That pretty much sums it up. Twitter is the teeny bopperification of America, the dumbification of America. L.O.L. -- it’s one more example of us going down the tubes. We are already falling behind in science and math in the rest of the world. Let’s go ahead and fall behind on English, too. Why the hell not?

(COMMERCIAL BREAK)

KURTZ: Why do you call it “the dumbfication of America” and I’ll let Rick Sanchez here in a minute. It seems to me as somebody who’s on that site a lot -- there’s a lot of smart people on there if you -- depending on who you follow. And you are underestimating what you can learn in terms of lengths and commentary and breaking news.

In other words, there are lots of different conversations going on there. You seem to think it’s a bunch of tongue-tied teenagers.

DOYEL: There’s too many conversations going on in the world. I think part of the problem is there’s so many things to listen to, we choose to listen now to nothing.

You can’t possibly hear everything, so let’s just listen to nothing and play Sudoku all day long. I think we need to limit a couple of these conversations and cut out all these corporate Christmas cards of communications which is all Twitter is. It’s not one to one. It’s one to 10 million. I’ve got no time for that myself. Get off of my lawn.

(LAUGHTER)

SANCHEZ: Well, you know, I can’t help but accuse Gregg of being extremely priggish and over weaning when he says that. I mean that’s like saying that journalism is bad because there are some people out there who write ridiculous columns or some newscasters who say ridiculous things.

I mean you have to kind of look at this thing in its totality. There are people out there who are talking to each other and talking to us. They have provided on my particular newscast bits of information that I wouldn’t otherwise have been able to furnish the rest of my viewers.

They’ve also given me opportunity to connect with regular people. Not just us talking. Not just journalists talking, or not just the so-called newsmakers, but what people around the world are thinking about a particular story.

Iran, in particular, is a story that hits that right on the buzzer. Here you have an opportunity to talk to people about what they’re thinking about what’s going on in Tehran in Tehran, as I did on my newscast the other day. And then I was able to go through Gmail and interview one of them on the air. KURTZ: Right.

SANCHEZ: I wouldn’t have been able to do that have not bee for social media, Gregg.

KURTZ: Gregg, you seem to feel that it’s particularly kind of an ego boost for celebrities and TV types to amass big numbers of people.

SANCHEZ: He’s right. He’s right about that.

KURTZ: Let me hear from Gregg.

SANCHEZ: He’s right.

DOYEL: Yes, there are media applications that are more mature and sensible than Lance Armstrong telling people at 5:30 in the morning, I just woke up and had a Denver omelet. You know if that’s what Twitter is and that’s ridiculous.

The media has applications, I get that. But there are so many now Twitter feeds and Twitter whatevers getting sent out.

I sat next to a guy game three of the NBA Finals the other night who has spent the whole game, not watching the game, reading his Twitter updates, looking at Twitter updates, who’s getting updates all day long, eventually it becomes white noise. We’re going to hear none of it.

SANCHEZ: Well, and what happens is -- and I think Gregg has a point there, all right? Just like I called him over weaning and priggish a minute ago, now I’m going to call him brilliant.

DOYEL: Oh.

SANCHEZ: I think it’s -- I think what’s -- there you go. See? And -- anyway. I think there is too much attention being paid by us in the media, as usual, where instead of looking at the serious nature of something, we start looking at the fact that Ashton Kutcher is doing it. And look, Oprah is doing it.

And that becomes the story about Twitter, which sends a message which isn’t really what it’s all about.

(CROSSTALK)

SANCHEZ: That’s bothersome. He’s right.

Let me now jump in and ask you a journalistic question. We in the news business used to do man on the street interviews, call on people, knock on doors. And obviously there’s still some of that. But is there a danger this is becoming a lazy way to have the illusion of being connected to the public?

DOYEL: I love that possibility. Yes. And I -- and let me jump in quick and say it is totally the lazification and the illusion and the teener bopperification and the dumbification of America. It’s the lazification of America. And we’re just -- journalistic flailing -- look, we were all behind the times in the Internet 10 years ago. We all missed it. We all thought it was big. We have no idea how big it is now.

Everything that comes along now, we jump on it with two hands and two feet. Let’s jump on Twitter. You know what Twitter is? Twitter is the pet rock from the 21st century.

SANCHEZ: You’re 150 percent wrong, Gregg, and here’s why. The opportunity to actually go on a Web site, where you can talk to different people and there is so much sharing and connecting going on on there that they make you privy or informed about something you wouldn’t have otherwise known.

Last night when I went on and I started Twittering about what was going on in Iran, I learned as much about the situation in Iran as I would have watching, frankly, my network, the BBC, the “New York Times,” the “Washington Post” combined.

And here’s why. Social media allows those people to link these URLs to whatever it just has been written. So it’s hey, great, did you just read this story that crossed two seconds ago in the “Washington Post”? Take a look at this.

KURTZ: Yes.

SANCHEZ: Look what they said about what happened in Tehran.

KURTZ: I appreciate that.

SANCHEZ: That’s interesting.

KURTZ: By the way, URL is a Web lingo for linking to a story.

But, Greg, you know, it is one thing for Ashton Kutcher tore get more than one million followers, as he has, but you know, Ann Marie Cox who is on this program earlier, 600,000 followers. John Dickerson 560,000 followers. So people must get something out of trying to follow the feeds of these journalists.

DOYEL: They do. But I think the people that would subscribe to a journalist will subscribe not just to one. We’re fooling ourselves if we think they’re subscribing to me only.

They’re subscribing to me, and you and him, and them and them, and eventually they’re going to subscribe to the point there’s going to be a diminishing return point, there’s going to be a tipping point where it’s just a little bit too much.

So I can see Twitter at the very outset being OK for some people, but I see as the trend goes on, crash and burn.

SANCHEZ: Let me just respond to that because I think there’s something going on, Howard, that people should be aware of.

KURTZ: I got 20 seconds, Rick. SANCHEZ: No, that’s fine. This will be real easy.

Over the next year what’s going to happen is, you’re going to see more focus and more filtering in Twitter to dissipate the arguments that Gregg makes.

KURTZ: Right.

SANCHEZ: Where he’s right. It’s too busy. There’s too much stuff going on. There will be a way where you can get in there and say look, I only want to talk to people about the NBA Finals or I only want to talk to people about Iran.

KURTZ: All right, got to cut you off.

SANCHEZ: And go.

KURTZ: NBA Finals, Gregg, Orlando Magic, game five tonight. Any chance of coming back against the Lakers?

DOYEL: I hope so because I like to travel. I like to go down there...

(LAUGHTER)

KURTZ: He doesn’t want the season to be over.

DOYEL: It’s all about -- it’s all about me.

KURTZ: All right, gentlemen.

SANCHEZ: And stay off of my lawn.

SANCHEZ: Teach them to hit a free throw, will you?

KURTZ: All right, guys.

Up next -- thank you very much -- the new normal. We’ll talk with ABC’s David Westin about the network’s week-long effort to examine how the financial crunch is changing the country. And what about those rumors of a new time slot for “Nightline”?

(COMMERCIAL BREAK)

KURTZ: From the housing bubble popping to the stock market swoon, from the collapse of Wall Street banks to the bankruptcy of GM. The media have devoted enormous time and attention to the struggling economy. But have they really captured the human impact?

Starting tomorrow ABC New will spend a week examining how the economy is changing American life, on its news programs, including a “20/20” special on Friday, on its radio network and online.

(BEGIN VIDEO CLIP)

ELIZABETH VARGAS, ABC NEWS: So today, do you have credit cards still?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: No.

VARGAS: So you are cash only?

UNIDENTIFIED MALE: That’s right.

VARGAS: And what kinds of adjustments in daily life have you had to make?

UNIDENTIFIED MALE: One simple example is the car. It’s a dented up 10-year-old Toyota that...

UNIDENTIFIED FEMALE: But it’s paid for.

UNIDENTIFIED MALE: That’s paid for. And we haven’t taken a regular vacation in a couple of years now.

(END VIDEO CLIP)

KURTZ: Can such an effort provide more than a glimpse of a complicated and far-ranking subject. I spoke earlier to ABC News president David Westin from New York.

(BEGIN VIDEOTAPE)

KURTZ: David Weston, welcome.

DAVID WESTIN, PRESIDENT, ABC NEWS: It’s nice to be with you, Howard.

KURTZ: You know covering the economy has been pretty job one for all of us in the media since last fall. Except when we’re covering John and Kate. So what makes this series you call “The New Normal” different from the previous coverage?

WESTIN: What we’re specifically trying to get beyond is the day- to-day, almost box score way that a lot of the media coverage has been handling the economic stories. You say it’s -- in many ways the most important story we’ve covered in recent years because it affects everyone. But a lot of what we see is, is the stock market up today, is it down? Are housing prices up or down?

And unfortunately, I think, implicit in some of that coverage is the notion this is going to be over sometime soon and we’ll go back to where we were in 2005/2006 and from what I’ve heard from the experts, I don’t think that’s accurate.

KURTZ: Well, when you talk to the ABC -- the ABC News release does about Americans goals and values may be changed permanently by this emerging economy. How do we know that? How do we know it won’t be fleeting like $4 gas and then everybody will go back to partying and buying stocks and living on the next bubble? WESTIN: Well, if we’ve learned anything from the last 10 or 12 years of news coverage, we should know that we can’t know anything for certain -- about the future given all the twists and turns that we’ve taken.

KURTZ: Right.

WESTIN: That said, we started last fall having a series of editorial meetings, one a week, with expert economists, an d business leaders and regulators to try to learn what we could about the economic crisis we were in.

And they disagree about a lot of things. Have different views about what’s been done and what should be done. But the one thing that came through very consistently from everyone, from every persuasion is whatever happens, we are not going to go back to where we were.

Now some things about where we’re going are less certain, some things are more probable. But the one thing that was absolutely emphatic was there’s no way, structurally, we can go back to the economy just the way it was in 2005 and 2006.

KURTZ: Now you know of the media, and maybe particularly television which I think has a hard time covering economic stories because there are a lot of numbers and some of those abstract.

Didn’t every in this story do a pretty lousy job at warning the country, at picking up on the warning signs that a financial meltdown might be coming? To lose too much risk in the financial system?

WESTIN: Yes, this is my direct answer to you. I think all of us fell short of the goal. Now there was some individual reporting in some places. “World News” some years ago, I remember doing some pieces on particularly some of the mortgage lending in California where people were paying zero money down and paying zero principle over the term of the mortgage because I remember being shocked by it.

So there were isolated instances, but as a group we did not do our job as well as we might have.

KURTZ: Let’s talk about the battle at 11:30. Jay Leno, as you know, who is number one in that time slot for most of 17 years, has moved on, turned over the reigns to Conan O’Brien. Has this provided an opportunity for “Nightline”?

WESTIN: Well, things will be different and whenever things are different, it provides an opportunity. I think -- now I’m prejudiced and I admit to it. I think “Nightline” has largely created its own opportunity because even before Jay Leno moved off of the 11:35 time slot, and now he’s going to come at 10:00, before that “Nightline” had made substantial inroads, not only overtaking Letterman but actually narrowing the gap with Leno.

I often say -- how you heard me say I think this is more a game of golf than tennis. We should play the course, rather than play one- on-one with competition. They’ll do whatever they do, and the chip will fall where they may.

Our job is to put on the best, most compelling program we can. And we have, I think, a very strong program and one that is a true alternative to stand-up comedians doing monologues, however expertly they do it, and doing interviews.

KURTZ: Right. Journalists can be funny on occasion, but not on the Letterman/Leno level. But now what about the buzz I see in some media columns that ABC might be considering moving “Nightline” up to 10:00 to fill that primetime hour?

WESTIN: I saw that. I have no idea where it came from. And if it’s a buzz, it certainly hasn’t reached me.

KURTZ: All right. Well, you’re the president of ABC News, I’ll take that as a no.

“World News”, the evening news race, Charlie Gibson. I think the consensus is that Gibson has done an excellent job since he became the anchor of that broadcast but he has been stuck in the ratings at number two, substantially, behind Brian Williams. Is that frustrating?

WESTIN: We went up to number one, as you know, for a while.

KURTZ: Right.

WESTIN: And we went back to number two. My response is, number one, we continue to reach a lot of people, millions of people every night, and that is deeply gratifying. At the same time we’re not reaching as many millions as we would like to and we won’t rest until we grow that audience.

KURTZ: Katie Couric is reaching even fewer millions at the “CBS Evening Weeks” and the week before last she slipped to the lowest rating that “CBS Evening News” had in a long time. Well, over five million, compared to seven to eight million for Charlie and Brian.

Why do you think that she’s had such trouble pulling in the numbers?

WESTIN: Boy, I don’t know. I have a tough enough time trying to explain what we’re doing, rather than trying to analyze what they’re doing. But please understand, I take no pleasure at all when CBS News does not do as well as they would like to do you don’t root for them to lose. And I don’t think that helps us all.

KURTZ: You don’t root for them to lose?

WESTIN: No. Never. It doesn’t help us. As I say, this is more of mental golf. We need to track viewers, a lot of the competition was -- it’s not CBS, it’s all the other things online and on air that people are going to turn to. And I don’t think it’s good overall for news, for a broadcast to be falling down any more than I think it’s good for a newspaper if one of the papers is faltering.

KURTZ: Right. Which, of course, is happening in far too many places. There’s far too many (INAUDIBLE) have gone down bankrupt.

Now there’s a renewed competition on Sunday morning, including from our “STATE OF THE UNION,” people trying to catch up with “Meet the Press” now that David Gregory is the host. George Stephanopoulos on “This Week” has made some progress in the ratings. She’s made quite the transition, hasn’t he, from a one-time Democratic operative.

WESTIN: I’m very proud of George and the job he’s done on Sunday because as I know, he got a lot of flack for it, a lot of criticism, a lot of doubts. And George is a very intelligent, very committed, well-prepared man who does a great job. And has grown substantial in that role and in that time period. I think that he can be a very powerful source in Washington for many years to come.

KURTZ: But do you think there is skepticism when he does something like he did last week, interview Hillary Clinton, and who wouldn’t want to interview the secretary of state? Since he worked in the Clinton White House, worked alongside her when she was first lady, hat that -- you know make people just a little bit skeptical now that Democrats are back in power.

WESTIN: Well, that’s of course in the eye of the beholder. And you’d have to ask all the Americans who watched what they thought. I will tell you that all of the research we’ve done would indicate that in the early days there were some questions raised, and that that has entirely gone away.

Absolutely. We see no indication of that at this point at all.

(CROSSTALK)

WESTIN: If you look at the interview itself, I don’t think any reasonable person could conclude that that was nothing anything other than a superb interview.

KURTZ: No, and I’ve seen him do an aggressive interview with Rahm Emanuel who he was friendly with in the Clinton White House and of course is now President Obama’s chief of staff.

You know, ABC does not have a cable news network but you’ve got a digital network, ABC News Now. Do you see more and more of the news product and the news audience migrating online? And is that a challenge for you as well?

WESTIN: It’s an opportunity as well as a challenge. Our audiences are going increasingly to online whether it’s printed or video, streaming video. We need to go to where the audiences are and reach them any way they want to complain to us.

My sense is that people aren’t so much just turning away from television and turning to online, they’re adding it on. They’re doing both. And we need to be there for them.

KURTZ: All right. David Westin, looking very normal as he’s here to talk about “The New Normal” series. Thanks very much for joining us.

WESTIN: Thank you, Howard.

KURTZ: And before we go to break, as you probably know, Laura Ling and Euna Lee of Al Gore’s Current TV were sentenced this week to 12 years hard labor in a North Korean prison camp after drifting over the border. They are political pawns. They are not spies. That notion is just ludicrous.

But here’s the challenge for journalism. How do we keep this in the news when such a shroud of secrecy over the whole case so they’re not simply forgotten?

After the break, Rupert Murdoch’s Washington magazine is getting a new owner. The “Boston Globe” is looking for one and one of the ladies from “The View” will be doing a little moonlighting. Our “Media Minute straight ahead.

(COMMERCIAL BREAK)

KURTZ: Rupert Murdoch is selling off a small piece of his media empire, his only outpost here in Washington.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): “The Weekly Standard” has always had more influence, especially on the right, than its modest 80,000 circulation would suggest. Founding editors Bill Kristol and Fred Barnes are also high-profile pundits on Murdoch’s FOX News Channel. Now a Denver billionaire named Philip Anschutz is buying the 14- year-old magazine from Murdoch who’s got his hands full with such big outlets as the “Wall Street Journal.”

Never heard of him? Anschutz owns two small papers, the “Washington Examiner” and “San Francisco Examiner” but also a chunk of such major sports arenas as L.A. Staples Center and such teams as the Los Angeles Kings and the L.A. Galaxy, the soccer team that paid a fortune to get David Beckham to America.

The “Standard’s” ideology probably would not change. Anschutz is a big time Republican donor.

Speaking of media properties for sale, the “Boston Globe” is now looking for a buyer. The “New York Times” company slashed newsroom salaries by 23 percent this week after the journalists union voted down a smaller pay cut. And the “Globe” disclosed that “Times” has hired Goldman Sachs to arrange a sale.

Former GE boss Jack Welch used Twitter to blast the “Times” for what he called its brutal dark ages approach to labor relations.

(END VIDEOTAPE)

KURTZ: Three men have emerged as possible bidders, including a member of the Taylor family that sold the paper to the “Times” 16 years ago, and a co-owner of the Boston Celtics. But whether any of them can pull off a deal and rescue the struggling “Globe” remains an uncertain question.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): Joy Behar, the funny, outspoken and sometimes controversial panelist on “The View” has decided to moonlight. HLN, CNN’s sister network, says it has signed Behar to host a nightly talk show at 9:00 p.m. Eastern. Behar is no stranger to the moderator’s role having frequently filled in for Larry King. She is also an unabashed liberal who got into with it with John McCain during the campaign.

JOY BEHAR, CO-HOST, “THE VIEW”: Those two ads are untrue. They’re lies. And yet you at the end of it say I approve these messages. Do you really approve them?

SEN. JOHN MCCAIN (R), ARIZONA: Actually they are not lies.

KURTZ: Which mean she’ll fit in with the likes of opinionated HLN host, Nancy Grace and Jane Velez-Mitchell.

(END VIDEOTAPE)

KURTZ: Still to come, landing the interview, the anchor who was so determined to talk to a foreign president that she did something that I wouldn’t do in a million years.

(COMMERCIAL BREAK) KURTZ: Journalists have been known to go to great lengths to score an interview. I mean will convince, cajole, sweet talk, bag, you name it. But HLN anchor Robin Meade really took a leap of faith to get some face time with the elder George Bush. A man who still likes to jump out of airplanes.

(BEGIN VIDEOTAPE)

ROBIN MEADE, HLN ANCHOR: What was your penchant for jumping still?

GEORGE H.W. BUSH, FORMER PRESIDENT: Well, two reasons. One, it still feels good.

MEADE: Yes.

BUSH: You still get a charge out of it. It’s not easy to do at 85. And I get...

(LAUGHTER)

MEADE: I don’t think it’s easy at any age.

(END VIDEOTAPE)

KURTZ: John King, I don’t jump out of airplanes myself. Is that something that you would do to connect with a former president?

JOHN KING, CNN ANCHOR: You know I keep saying we should take this show on the road. Maybe we should go jump out of an airplane.

KURTZ: Do you think it would boost the ratings?

KING: I don’t know if it would boost the ratings but it looks like it’s a fun and Robin had fun and it looked like the former president had some fun. Why not?

KURTZ: How about this? You jump out of the plane and I’ll interview you when you land.

(LAUGHTER)

KING: I think I’d rather rob an interview when I land.

(LAUGHTER)

KURTZ: Thanks very much, John.

KING: All right. Take care.

We continue now with another hour of STATE OF THE UNION. Iran’s president Mahmoud Ahmadinejad says he has been overwhelmingly re- elected fair and square, but his main opponents says the election was rigged. And Vice President Joe Biden says he may have point.

(BEGIN VIDEO CLIP) JOE BIDEN, VICE PRESIDENT: We don’t have all the details. It sure looks like the way they’re suppressing speech, the way they’re suppressing crowds, the way in which people are being treated that there’s some real doubt about that. I don’t think we’re in a position to say.

(END VIDEO CLIP)

KING: Here at home it’s a big week ahead for the health care reform debate. Some in Congress want to pay for the reforms by taxing health benefits many Americans receive from their employers.

The administration won’t flatly rule that out, here on STATE OF THE UNION, the president’s health secretary came pretty close.

(BEGIN VIDEO CLIP)

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: The president starts with the premise that 180 million Americans have health coverage through their employer, that a tax on those benefits may dismantle that marketplace. So while you’re trying to make sure we cover the 47 million Americans who don’t have coverage, what we don’t want to do is destroy the system that currently is in place that lots of Americans like.

(END VIDEO CLIP)

KING: Another controversy in the health debate is whether to create a government-run insurance program to compete with private insurance. The president wants to do that and so do most leading liberals in Congress.

KING: But most Republicans don’t like it. Some warn, it’s the first step of a government takeover.

(BEGIN VIDEO CLIP, “THIS WEEK WITH GEORGE STEPHANOPOULOS”)

MITT ROMNEY (R), FORMER MASSACHUSETTS GOVERNOR: This is not about getting competition in health insurance, which is already there. This is, instead, a Trojan horse.

Barack Obama , when he ran for office, said he is in favor of single-payer system. He has said it for years. This is a way of getting government into the insurance business, so they can take over health care.

(END VIDEO CLIP)

KING: You see the White House there on a beautiful Sunday here in Washington. And, as you can see, we have been watching all the other Sunday shows, so you don’t have to.

Let’s bring in two members of the best political team on television, as we do every hour this Sunday, and break down the issues.

Joining me from their home in New Orleans, two CNN contributors, Democratic strategist James Carville and Republican strategist Mary Matalin.

James and Mary, thanks for being with us.

I want to start with the vice president’s words on the election in Iran. President Ahmadinejad says he won big, fair and square. The leading opposition candidate says the election was rigged.

And, if you listen to Vice President Biden there, he seems to think there are a number of questions, a number of doubts about this.

You have both worked in international elections. This is not like here in the United States. We cannot expect, can we, a transparent and open recount?

(CROSSTALK)

CARVILLE: Well, I don’t know that we can.

The truth of the matter is, is that, in these -- in these elections, the best safeguard against this is to have a credible poll taken by some international organizations, news media organizations, which you can do pretty effectively in a country like Iran.

And had we done something like that, and had it shown a close election, or even Ahmadinejad losing, then there would -- we could be legitimately a lot more skeptical. I think every American, everybody around the world is skeptical about this outcome.

But the state controls the election -- election machinery there. So, we may never know here. But there’s certainly reasons to doubt this outcome. But, boy, a good poll 10 days ago would have been a lot of help to people in the international community who -- who -- who don’t much like this regime or particularly Ahmadinejad.

KING: But, absent such a poll, Mary Matalin, what are the options for the U.S. administration at this standpoint, when Mr. Ahmadinejad says, “I won, I won overwhelmingly, and I have a mandate”?

MATALIN: Well, the option for the United States is as it always was, which was to accept reality.

They are not like us. They are not transparent. They’re not a democracy. A Carnegie scholar said every election in Iran is unfree, unfair, and unpredictable. So, this one was predictable, however, that the mullahs control, and the mullahs do -- it don’t matter to the clerics if it’s Ahmadinejad, or Mousavi, or who is in that position.

They still want to pursue the nuclear ambitions. And that’s an ongoing threat to us.

KING: And, so, let’s say what happens going forward. And I want you both to listen. We had a number of senators on the program earlier.

And, as you know, President Obama, during the campaign, said he would sit down with Ahmadinejad, Kim Jong Il, any of the leaders of so-called rogue nations, in his first year in office.

The administration has since retreated some, saying they would sit down if they see a reason, in preliminary talks, that there would be some progress.

But I asked Senator Susan Collins , Republican of Maine, should the administration now be less open to dialogue? She said this.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS (R), MAINE: It certainly makes such a dialogue much more difficult.

But, frankly, I have always been skeptical about the success of any kind of dialogue with the hard-line leaders of Iran. We should certainly give diplomacy a chance. But I am skeptical that it will be successful. And these voting irregularities, the arrests of opposition clerics and opposition leaders, certainly makes it far more challenging for the president. (END VIDEO CLIP)

KING: James, does the Democratic president now have to isolate Iran, or do you just accept the cards you’re dealt, even if you don’t like them, and sit down at the table with him?

CARVILLE: Well, we know eight years of not talking to people has led to failure. So, that -- we have had that experience.

And, you know, whether or not you can get to something by talking to these guys, I don’t know. I think Senator Collins is probably right to be very skeptical. I think the president is right that -- that you would have to see some kind of a thing in some preliminary talks.

But the reality is, is that they are the regime there. And the reality is, is the United States has a great interest in -- in trying to do something about them pursuing this nuclear program. So, it’s a difficult situation. Hopefully, you know, that something will come around and there will be some break in these negotiations. But, right now, I think the -- I think the position of the administration is -- actually makes some sense, at least for the time being.

MATALIN: If we knew what the administration’s current position is.

This is a quintessential Obama-esque kind of straw man, to say the failure of the last eight years, that there was no talking. There is -- everybody who works in this arena understands there’s always talking going on behind the scenes. There’s pressure from other leaders in the region, because they want the same thing we want, which is not to have a nuclear-armed Iran.

But diplomacy, talking at any level, does not work without being married to the certainty of action. And hard-liners perceive talking in, the absence of the certainty of action, as a weakness. And weakness invites provocation.

So, welcome to the real world, Mr. President. This is how it works there. And you can talk, but you have to assure that, if they don’t act in ways consistent with our security and our needs, there will be some action.

KING: Let me bring you both home to the health care reform debate going on here in the United States.

And, during the campaign, then Senator Obama disagreed with Senator McCain when he said one way to raise the money to help pay for this is taxing the benefits that most Americans, many Americans, get from their employers.

The administration has since said it is open to these ideas, as Congress puts together a bill, that it would open to that, doesn’t like it, but is open to it.

But, this morning, both Secretary Sebelius here on this program, and Vice President Biden on another, delivered quite strong language, suggesting the administration has a change of heart and wants to push that option off the table.

Let’s listen to the vice president.

(BEGIN VIDEO CLIP, “MEET THE PRESS”)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: And the bill is going to come. This is the most -- this is going to be one of the most comprehensive changes in the law since Medicare in the beginning.

We will have to see what the whole bill says. But we have made it clear we do not believe you should be taxing -- taxing -- the benefits that people receive through their employers now.

(END VIDEO CLIP)

KING: Emphases on the word “taxing,” James, from the vice president there.

CARVILLE: Right.

KING: Do you get the sense the administration that opened the door to this is now seeing more views out there that there’s more spending and more taxing, and maybe they need to retreat from this?

CARVILLE: Yes. Actually, Senator McCain proposed that during the election. And that didn’t work out very well for him.

And I think people -- this is a political nonstarter. And I think the vice president is right -- right, and I think Secretary Sebelius is right. I think there are other ways to pursue this. But -- but a lot of people that get their insurance through their employer are satisfied with the insurance as it exists right now.

And, politically, this is not going to happen. And I think -- I think the statement that they made this morning is consistent with -- with -- with good politics. And I suspect it’s consistent with good policy also.

MATALIN: And, John, it’s also a reflection of what polls are showing, which is that the public prefers an attention to deficit reduction and economic stabilization, and -- and -- reforming Medicare, which is the currently existing government-run health care program.

When those three things are under control, then we can take a look at reforms, some of which were enumerated by Senator Collins and Senator Nelson and Senator Conrad earlier on your show. There’s not just the government-run option. There are many options that have been tried, do work, and have a better possibility for passing.

And that’s what we should be focusing, not just this sort of government-run takeover, before we fix anything else, which does not work and for which there are not sufficient votes.

CARVILLE: Well...

KING: I want to take you both up to 30,000 feet. We’re about 150 days into this administration.

And you know, James, what the Republicans are saying. And “The Washington Post” had a pretty fascinating set of graphics this morning that we have borrowed to show borrowing under this administration. And I want to put it up on our screen, if we can.

This is the cost of government borrowing. They show -- a small circle is the cost of the Iraq war. A bigger circle is the cost of borrowing for World War II. That was $3.6 trillion. And that big blue circle on the screen right there is the cost of proposed borrowing in the Obama administration over the next decade from 2010 to 2020, $9 trillion.

Now, James, the president says this is necessary to fix the economy, to deal with health care, to do other things. But, as somebody who runs political campaigns, as somebody who lived through 1994, when you look at something like that, if you were Mary, you would run against the tax-and-spend Democrats.

How do the Democrats deal with that?

CARVILLE: Well, first thing is, you would point out that, as many people did, that this is primarily because of policies that were instituted the -- the last eight years. This is primarily because we chose to -- to pay for three wars with three tax cuts.

And most of this is not President Obama’s doing. But this is a problem. Debt is going to be the biggest problem that we’re going to be talking about in American politics for some time to come. It’s certainly going to impact the health care debate.

I suspect that the biggest event in the coming health care debate is going to be how CBO scores this. And depending on how they score this is going to have a -- a pretty big -- be a pretty big determinative fact on the -- on the outcome of this debate.

But you’re right. It is a problem. People look at it, and they have got a sense of this. And the way that the savings are going to come, by the way, is through health care. And this administration is already talking about $200 million in -- in -- in savings in the way that hospitals are reimbursed.

I suspect the hospitals will not much like that, and they will fight it pretty hard. But the debate has begun, and it’s been engaged here. And I think they have got some good people ready to deal with this.

KING: I wish you could see, James, out of the side of your head at your wife shaking her head and her lips pursed when you’re speaking.

(LAUGHTER) KING: Go ahead, Mary.

(LAUGHTER)

MATALIN: Well, I -- I -- I’m just counting. I’m wondering how long it’s going to take the Democrats, and not just James, but this is an Obama model.

He has a straw man model, where he says a position that isn’t a position -- then you have to defend it -- what he’s going to say in his speech tomorrow, that the alternative to his government-run won’t work, costs too much. Health care reform is the Republicans saying do nothing.

Senator Collins and her Democratic colleagues this morning had credible alternative reforms. So, that’s a straw man.

The second thing is to blame the president, the previous president. How long can they go to keep blaming the Bush administration? It’s just -- it’s -- it’s absurd. It doesn’t work. It’s getting -- it’s getting less politically palatable by the day.

If they want to, they have to focus on getting done what we can get now on health care reform. And all of this deficit-spending and this debt building up has nothing to do with the Bush years. Bush’s deficits never exceeded 6 percent of the GDP.

This is explosive debt that our kids, your kids, their grandkids are going to pay for. And the Republican option is to join up with smart Democrats and stop it.

CARVILLE: Actually, there was a piece in “The New York Times” about this. And every credible analyst says -- knows exactly where this came from.

And we’re never going to solve the problem unless we get to the root of the problem. The root of the problem is, is -- is, we chose to fund three wars with three tax cuts. And we have to change that policy.

KING: All right, let’s -- let’s take a quick time-out.

(LAUGHTER)

KING: There will be much more to discuss with Mary and James, a bit more on health care, and some interesting reflections from one of Mary’s former bosses, former President George H.W. Bush.

We will be right back with Mary, James, and a lot more just ahead.

(COMMERCIAL BREAK)

KING: We’re back with CNN political contributors Mary Matalin and James Carville.

And I’m at the map to go through a little bit the politics of health care reform. This is how the election played out last year. But this is the experience -- and I want you guys to watch this at home in New Orleans and around the country -- this is the experience of the last Democratic president.

Bill Clinton wins in 1992. Here’s the Democrats, a majority in the House, the Democrats, a majority in the Senate, an advantage at the governors’ level as well. But then they put the health care on the table. See if I can get this to play out. And we have the 1994 elections play through.

(LAUGHTER)

KING: And look at what happens if you bring that the here, 230 Republicans. The Republicans take the majority in the House by winning 52 seats. The Republicans take the majority in the Senate.

And, James Carville, you were involved in one of the key Senate campaigns in that race, where Rick Santorum, running against your candidate, Harris Wofford, focused on health care, and ran this ad.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Santorum’s health care guarantees you can spend plenty of time with the doctor of your choice. With Harris Wofford’s choice, you are guaranteed spend plenty of time.

Join the fight -- Santorum for Senate.

(END VIDEO CLIP)

(LAUGHTER)

KING: Could this possibly be, James, if the Democrats don’t handle health care reform right, deja vu all over again?

CARVILLE: Well, John, you really know how to hurt a guy. I mean...

(LAUGHTER) CARVILLE: ... thanks for bringing all that up.

(LAUGHTER)

CARVILLE: No, sure. Sure, it -- it could.

And my -- you know, my daddy used to have expression when he would serve something. And I was the oldest of eight kids. And he would announce, “You are going to like it because you have got to like it.”

And I think the Democrats -- and every Democrat -- and I know I am -- are -- we’re very cognizant of our experience to this. And that’s why I think something is going to pass.

You know, is it going to be easy? Is it going to be everything that everybody wants? No. But, if you look like you’re too disorganized -- and what happened was that the combination of health care failing, and then, believe it or not, it was because we lost a rule on a -- on a crime bill, that people had the sense that, well, Democrats really couldn’t govern.

And that’s something they are going to be faced with. And, I mean, I -- I look at people like Rahm Emanuel . He understands that. He is working with Senator Baucus. He’s, you know, day and night in the Congress doing these kinds of things.

And I think that my sense is, in the end, that they are going to get this ball across the goal line. But it’s -- it’s a long drive ahead of them. But they -- they know they have to score here.

(CROSSTALK)

KING: And, Mary, is the risk for Republicans that they think that model will work, that they think, just let the Democrats go, let them do this, and we can go to the 1994 model? Is that risky for your party? Could they be relying maybe on old-school thinking?

MATALIN: Well, they’re not. That’s -- that’s not the option. That’s what Obama is trying to make us think is the option, that they are presenting no alternative, or, as Governor or Secretary Sebelius said this morning, the status quo.

They’re not presenting the status quo. They’re presenting what Susan Collins talked about, targeting chronic cost drivers, like diabetes, getting home health care, help pooling insurance. There’s a lot of Republican programs that increase competition, which reduces costs and improves quality. There’s plans out there.

That’s what they’re doing. They’re not counting on the Democrats just destroying themselves. And many of the Democrats are not going to let Obama destroy them. Our own Democratic senator here, Mary Landrieu, said there will be no vote from her for a public option.

And the Democrats you had on this morning did not sound like they were for the public option. Rahm Emanuel knows that. James is 100 percent right. They can -- they can walk and chew gum. And you have to do that when you’re in the White House. But no -- there’s no poll that shows that Americans want to completely have the government take over health care before they deal with the existing problems.

CARVILLE: You know, I’m old enough, unfortunately or fortunately, to remember that was what we heard when we had Medicare, that this was going to be socialism. This was the government takeover of health care.

Well, you know, the Republicans tried to cut Medicare. That didn’t work out too good for them.

KING: Let’s...

CARVILLE: And what you have here, if -- if -- if you have a public option, that’s hardly the government taking over health care. This is the same argument that -- that we always hear.

MATALIN: John...

CARVILLE: This is something that we have got to, you know -- go ahead. I’m sorry.

MATALIN: Go ahead. I just want to say this.

KING: All right, quickly.

CARVILLE: Right.

MATALIN: Medicare funding is going to run out in eight years, James, eight years. It costs 15 times more than its original estimates. That’s what will happen with this. We can’t afford it. It won’t improve quality. It will dismantle private insurance and it will eliminate options. It is government-run health care.

CARVILLE: Well, let me say this. The Democrats want to keep Medicare...

(CROSSTALK)

KING: All right, let’s -- let’s close -- let’s close on a different subject. Let -- let me call time-out and close on a different subject.

I first met your...

CARVILLE: All right.

KING: I met your bride, James, when she worked for President George H.W. Bush back in the 1988 presidential campaign.

(LAUGHTER)

KING: We can all live vicariously through him today, because, even at the ripe age of 85, he’s jumping out of airplanes.

(LAUGHTER)

KING: And I want to show our viewers some of this footage. George H.W. Bush jumps out of an airplane with CNN’s Robin Meade. And he -- there you go. I’m not sure you could get me to do that. You could try.

When he gets to the bottom, he conducts an interview, in which he has something quite interesting to say. He’s asked about his legacy, but he also talks, not only about himself, but about his son and his son’s decision to keep pretty quiet.

Let’s listen.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: We had a good administration and good people. And I think the same thing is true of our son.

And, you know, he had tough times and all, but he’s -- he’s doing it right. He’s laying back there and he’s not criticizing the president. And I’m very proud of him.

And I hope that we both have set examples for how you ought to conduct yourself when you have been president and then go out of office. Let the other guy do it. And -- and support him when you can, and be silent. Don’t be out there criticizing all the time.

(END VIDEO CLIP)

KING: Mary Matalin, I love you, and I hate to do this to you, but I’m going to put you on the spot.

Your former boss George H.W. Bush says, be silent; don’t criticizing the other guy when you leave.

Your more recent former boss, Dick Cheney , has been out there quite a bit criticizing this administration.

Who’s right, George H.W. Bush or Dick Cheney ?

MATALIN: It’s -- you would have to infer from -- which would be a wrong inference from what poppy, beloved poppy, who can stand up there and give an interview after jumping out of an airplane -- I get vertigo standing on a -- a stepladder -- be -- he’s not attacking Dick Cheney .

I’m fairly confident -- and you can be confident in my confidence -- that the -- the 43rd president -- or the former president, W. Bush, is quite happy that Dick Cheney is defending those policies that Obama would retract that were keeping us safe.

And Laura Bush said as much that last week. I believe she said that on CNN. So, the Bushes -- a president attacking a president in office is not what the Bushes do, but defending those policies is an obligation of the people who worked for that former president. CARVILLE: Well, John, I also thought it was interesting that -- that he took on the talk radio crowd, when he defended Judge Sotomayor, which is, of course, somebody that he originally appointed to the bench.

And I think that everything about President Bush 41 is, he’s just a classy guy. Mary and I had a chance to work with he and Mrs. Bush on a health care thing in Houston this past January. And he -- he is really a remarkable man, and has done some really remarkable things in his post-presidency, too.

And he and President Clinton have been enormously good to our home city of New Orleans, obviously, in the post-Katrina thing.

(CROSSTALK)

KING: Well, we shall end, see, on this touching moment -- on this touching moment on a Sunday morning, a moment of agreement in the Carville-Matalin residence. We shall end it there.

(LAUGHTER)

KING: James and Mary, thanks for coming in today. And we will see you soon.

We will have more analysis of what to expect in the coming week in just a moment.

But, straight ahead, we will head to Orlando’s Florida and Junior’s Diner, where the food was delicious -- I had the oatmeal -- and the conversation was about health care.

We will be right back.

(COMMERCIAL BREAK)

KING: If you look at the map, the brighter the state, the higher percentage of uninsured in that state.

Health care was the focus of our travels this week. We went down to Florida.

Before we get to our diner, a few more statistics. Young adults in the 19-to-29 group, that’s the largest group of uninsured Americans across the country. Twenty percent of Americans live in rural areas. But only 9 percent of the nation’s physicians practice in rural areas.

And get this. For every one percentage point rise in the nation’s unemployment rate, the number of uninsured people increases by a stunning 1.1 million.

So, we went to Junior’s Diner. It’s in Orlando, Florida. We sat down. Everyone at the table agreed on the urgency -- the urgency -- of doing something about health care. But getting them to agree on just what, that is a whole other matter.

(BEGIN VIDEOTAPE)

KING: ... with the way we do health care in this country now, if anything?

BLANCHE DORMADY, ORLANDO, FLORIDA: I think that depends on the person. I -- I have -- I don’t like the insurance. The insurances decide what you’re going to have and what you’re not going to have. And I certainly don’t want the -- the government to have that ability. And I like it to be private.

KING: Well, are you -- are you -- are you worried, though, that they will make it worse, the politicians will make it worse?

B. DORMADY: It will make it worse. But I’m not a worrier.

(LAUGHTER)

MARGARET DORMADY, ORLANDO, FLORIDA: I’m against health -- national health care. I personally don’t have health insurance, because it is too expensive.

But I want to get for myself what I need. I -- I don’t want to be told what I can have and when I can have it. And I sure as hell -- excuse me -- don’t want...

(LAUGHTER)

M. DORMADY: ... the government having my medical records running throughout the U.S.

KING: One of the things in the proposal put forward by Senator Kennedy, and most likely in the House by the Democrats as well, would be a mandate that would require you to get health insurance. That’s the way they do it in the state of Massachusetts now. And you would have to get health insurance.

If you had a job, and you were able to afford it, you would be -- you would have to get it, and you would be penalized if you didn’t?

Is that right?

M. DORMADY: Just like the car insurance. I understand that. And I don’t like that either.

STAFFORD EZZARD, WINTER PARK, FLORIDA: I trust the government more than many people do. I’m a Democrat. And I think the Democratic Party, at heart, has the people’s interests in mind. I’m somewhat skeptical of our ability, politically speaking, to reach a -- maybe a conclusion at all.

KING: You don’t want the government involved, but do you think they will pass something? The Democrats have big majorities.

M. DORMADY: I’m a Democrat. I vote open ticket. And I’m afraid they will. And I just feel more power, control by the government, so that I no longer have ambition to be able to go out and strive and do what I want to do in life and have the life that I want. I have to be under someone’s thumb.

KING: You think they will do something?

B. DORMADY: Oh, I hope not.

(LAUGHTER)

B. DORMADY: I’m sorry, but if they put it back in the hands of the doctors to do what the doctors want, maybe it will be done. But to have government getting involved....

M. DORMADY: And I think that’s a good point. Doctors need to be more involved in this, and not be pushed around.

KING: Well, do you think they’re pushed around by -- by the insurance companies?

M. DORMADY: I think they’re pushed around by insurance companies. I really do.

EZZARD: Yes, I think we are agreed on that.

I just had an experience with -- with my primary provider, who joined a -- a private -- I don’t know what you would call it, but it’s a -- but it’s a group of doctors who have banded together.

And, in order to stay with him, I was going to have to pay him $1,500 cash, and my wife would have had to pay $1,500. My son would have had to pay $1,500. That’s in addition to our health insurance.

KING: Paying for it is the big question mark, where many think this could collapse. One of the things on the table is to tax the health benefits you get from your employer.

Is that a fair way to do it?

B. DORMADY: I don’t think the government ought to get into it.

M. DORMADY: Well, I see what you’re saying.

And even McCain was trying to say we should back...

KING: Right.

M. DORMADY: ... we should tax...

KING: Right.

M. DORMADY: ... everything. So, you would have to pay more taxes on what your benefits are.

But you know what? Why not. I don’t have a problem with that. (END VIDEOTAPE)

KING: A fun discussion and great oatmeal with raisins at Junior’s Diner. You can see we brought the CNN Express along, and took up most of the parking lot there.

(LAUGHTER)

KING: We will be right back with three veteran Washington reporters for a preview of next week’s political headlines.

And we want to know what the headlines are in your hometown paper. Find the link on our Facebook page, CNN.com/stateoftheunion, and tell us what you’re thinking about this morning.

STATE OF THE UNION will be back in a moment.

(COMMERCIAL BREAK)

KING: I’m John King, and this is STATE OF THE UNION.

Here are stories breaking this Sunday morning.

New clashes between police and protesters in Iran today, even though President Mahmoud Ahmadinejad insists his reelection was legitimate. At a news conference today, President Obama refused to guarantee the safety of his rival, Mir Hossein Mousavi. On the streets of Tehran, Ahmadinejad’s supporters held a huge victory rally.

Israel’s prime minister scheduled to give what’s being called a major speech on Mideast peace today. Benjamin Netanyahu has so far been cool to the idea of creating two states for Israelis and Palestinians, and he has not listened to the United States’ demand he freeze Israeli settlements in the West Bank. Those are the goals President Obama has endorsed, including in his big policy speech in Cairo.

Vice President Joe Biden says it is critical the United States and other nations enforce new United Nations sanctions against North Korea. Those sanctions include searching ships suspected of carrying banned materials into North Korea and expanding an arms embargo against the communist nation. The sanctions were passed Friday in response to Pyongyang’s recent nuclear tests -- that and more ahead on STATE OF THE UNION.

A shot of the Capitol there on a mid-June Sunday here in Washington.

And I’m joined here in studio by Jerry Seib of “The Wall Street Journal,” Karen Tumulty of “TIME” magazine, and CNN senior White House correspondent Ed Henry.

Let’s begin with the drama in Tehran -- more demonstrations on the speech today, more pro-Ahmadinejad people out today, questions about the legitimacy of the election. The first opposition candidate, the leading candidate, says he believes this election was stolen by the incumbent president. The White House says there were some irregularities.

And vice President Biden today -- and I want you to listen to this -- quite strong in saying, we’re not sure, but we think the opposition candidate might be right.

(BEGIN VIDEO CLIP, “MEET THE PRESS”)

BIDEN: We don’t have all the details. It sure looks like, the way they’re suppressing speech, the way they’re suppressing crowds, the way in which people are being treated, that there’s some real doubt about that. I don’t think we’re in a position to say.

(END VIDEO CLIP)

KING: Ed Henry, you cover the White House.

If there’s real don’t about that, what happens now, including with the administration efforts to have a dialogue?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, the administration has to be very careful not to be interfering too much, and that’s why Vice President Biden walking a very fine line there. If the U.S. gets too involved, then Ahmadinejad can use that to his advantage.

It certainly complicates the equation. If the opposition leader had won, obviously, a week, a week-and-a-half after the president gave this speech to the Muslim world, it would have been a big victory for this administration.

Now it complicates things, because, if people around the world do not believe that this was a legitimate election, and the U.S. sits down to talk with Ahmadinejad and his representatives, and pushes forward on diplomacy, starts giving him concessions, that’s going to harden the right in this country and around the world, saying, look, you’re giving in to somebody who did not win a legitimate election.

KING: So, how does the administration handle this? The vice president out there pretty much saying they -- they’re worried there were irregularities.

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, “TIME”: I think the administration really has no choice but to let this play out a little bit.

You saw it in the awkwardness of the statement that came out of White House Press Secretary Robert Gibbs yesterday, sort of commending Iran for the vigor with which it had engaged in this election debate.

But you look at what’s going on, on the streets now in Tehran, I mean, this is a country that could be at the verge of a really big moment of social change. And I think, at this point, again, the White House and the administration and this country have to let it play out a little bit.

KING: As they let it play out, Jerry, it would have been a dramatic change if Mr. Mousavi had won the election. And then it would be very hard to criticize President Obama’s efforts, saying, we’re going to reach out and talk.

If Ahmadinejad is the current and future president of Iran, does it change the world diplomacy dynamic at all? Or do we not know what pressures he will respond to?

GERALD SEIB, “THE WALL STREET JOURNAL”: Well, I think it changes the world dynamic in the -- in the way that Ed suggested, which is, you have to confront, then, not only negotiate with an erratic Iranian leader, but an erratic Iranian leader who may not seem legitimate. That’s a difficult thing to do.

One of the problems here is that -- and I think Karen is right -- that the administration has to let this play out a little bit. What sort of crystallizing event is this really going to turn out to be?

In the meantime, though, the Iranian nuclear program does not stop. They keep buying centrifuges. They keep enriching uranium. That’s the problem with this -- this situation, is, there’s a tension between the diplomatic track and the stop-Iran track. And it will be interesting to see what the Israeli prime minister has to say about that this afternoon.

KING: And we will watch that.

And, as this plays out, I want to bring you something that was posted on our Facebook page. And, on the one hand, you say, oh, this is a political statement. But, on the other hand, it does get to some of the problems for the administration.

And Mackel writes this -- Marckel -- I’m sorry -- writes this on Facebook: “It would be very hard for the United States to say much about the Iran elections, because, if we can remember, the same thing happened in this country in 2000. The only people that can fix this problem are the people of Iran. I do feel the pain that those people are going through. To have your vote stolen is like a slap in the face.”

(LAUGHTER)

KING: So, online, people are making Gore-Bush 2000 recount analogies.

(LAUGHTER)

KING: But, on the one hand, that’s nice. We can laugh and joke about it. But, on the other hand, it does tell us, you know, whether you like or not the way it turned out, we had a recount process. We had a Supreme Court hearing and court hearings up the vine. We had transparency on that process.

We don’t have that, Jerry, in Iran. And it’s very hard for the international community, whether it’s organizations or journalists, to have a good sense of what’s happening.

SEIB: No, that’s exactly right.

And the other thing that makes it difficult, from the Iranian perspective, is that what the Iranians could always say was, look, you may not like us, but we basically have a democratic government here. We have as democratic a government as there is in our region. If this is really seen as an illegitimate election, that’s a harder claim for them to make. That puts them in a difficult position. I don’t know if that makes the country more dangerous or less dangerous or the U.S. to deal with, by the way. That’s going to be told over time.

But will change the way people look at this Iranian regime if this remains an illegitimate election or is seen as an illegitimate election.

KING: And, as we -- we watch, Ahmadinejad says, “I won fair and square.” His opponent, says, “You stole the election from me.”

I suppose the voices we want to hear most are the clerics, who actually call the shots.

TUMULTY: And the whole thing -- you hit on it, the transparency. We don’t know who is calling the shots. And that is -- this is something that is -- as much as, you know, traditional media as attempting to cover this, most of the reports coming out of Iran at this point are on Twitter. This -- it is -- it is a very opaque situation right now.

KING: And that’s an interesting point, because, online, in our community, on Facebook, on Twitter -- you can see the tweet board up behind me in the studio -- young Americans and young other people around the world are messaging about this all morning.

And one of the tactics, one of the strategies used by the opposition candidate was to text-message, borrowing from the Obama campaign, you might say, to organize rallies and events, text- messaging. The government shut that down at some point.

So, we may get a sense here technology may be our mini- transparency, our small...

HENRY: There may be the seeds of revolution, as Karen was talking about a few moments ago.

And, for the administration, it’s sort of looking at these pictures, probably thinking, so close, and yet so far, because they almost saw the victory from the opposition leader. But maybe there are some seeds there that will keep building and building.

You’re right. If you watch what’s going on Twitter, you watch what’s going all over the Internet, all kinds of people around the world talking about it. And people within Iran, young people -- it’s something like 70 percent, 75 percent of the population there is 30 or -- or under -- they’re tasting -- you know, trying to get a taste of freedom that the leaders may not want to get.

Now, if we get James Baker and Warren Christopher over to Iran...

(LAUGHTER)

HENRY: ... we will have 2000 all over again. TUMULTY: Or Katherine Harris.

HENRY: Yes.

(LAUGHTER)

HENRY: Well, that would be interesting.

SEIB: Just one quick cautionary note.

It is worth remembering that, early in the -- in the Bush 43 term, there was a period in which college students were in the streets in Iran, in Tehran. And people in the Bush administration then thought maybe this is the beginning. And then it just sort of went away and was ground down by the regime.

So, you could get a little carried away at a time like this and think maybe something started. And maybe it is. But we have been here before, and it never quite takes hold.

KING: And let’s spend a few seconds more on this subject from the very important perspective, Jerry, you just mentioned.

Prime Minister Netanyahu is going to give a big speech today. He has said: Iran is my number-one priority. Then I will deal with the Palestinian conflict.

But he views the biggest threat to the state of Israel as the statements by President Ahmadinejad, that Israel should be wiped off the map, that the Holocaust never happened.

Does this strengthen Mr. Netanyahu’s argument on the world stage?

SEIB: In an odd way, he may be actually the one person who is happy with the way the election turned out in Iran, because it’s easier to demonize an Iran run by Ahmadinejad than by the opposition, by a moderating opposition.

So, I think, absolutely, it strengthens his conviction, his core conviction, which I think is quite genuine. It also may actually help him, in a strange way, in tactical terms.

KING: Much more of our conversation with Ed Henry, Karen Tumulty, and Jerry Seib after the break.

We will bring the debate home, the Supreme Court nomination of Sonia Sotomayor and the big health care reform debate.

Stay with us.

(COMMERCIAL BREAK)

KING: Los Angeles, California, there, a little traffic on the freeway, if I can see that just right. What a surprise.

(LAUGHTER)

KING: Once again, I’m joined by Jerry Seib, Karen Tumulty, and Ed Henry.

Let’s bring the debate home and start with the nomination of Judge Sotomayor for the Supreme Court.

The initial conservative reaction was pretty harsh, most Republicans agree. Among those now commenting on it is former President George H.W. Bush, who jumped out of an airplane on Friday, God bless him, landed safely -- he likes to do that -- for his 85th birthday.

Then, he gave an interview with HLN’s Robin Meade. And he was asked about the criticism of the judge. And he said this.

(BEGIN VIDEO CLIP)

BUSH: I think she has had a distinguished record on the bench. And she should be entitled to fair hearings.

I mean, she was called by somebody a racist. Well, that’s not right. I mean, it’s not fair. And it doesn’t help the process to be out there name-calling. So, let them -- let them decide whether they want to vote for her or not, and get on with it.

(END VIDEO CLIP)

KING: Maybe the current president will send the former president a little thank-you note for that one?

HENRY: Absolutely.

I mean, I think he certainly put his finger on a problem for the Republican Party, which is, some of the conservatives got a little ahead of themselves at the beginning of the problem, certainly helped Judge Sotomayor, because it pushed, you know, some party elders, like the former president and others before him, to come forward and said, wait a second; this is not the direction to go. And I think it sets the stage for her that, barring some major development we don’t know about today, it seems like she is going to be confirmed, because maybe they went a little too far in the opposition early on. It wasn’t on the substance. It was personal. And it backfired.

KING: That sound right? Tough questions on affirmative action, tough questions about this Latina heritage and the frequency of her mentioning it in speeches and stuff, but anything out there that says trouble?

TUMULTY: Well, the virtue of having nominated somebody who has been on the bench as long as she has, who has thousands and thousands and thousands of rulings, and -- on her record, is that it is hard to take two, or three, or four statements that she’s made in various settings and speeches, and sort of turn those into the kind of weapons against her that the Republicans originally tried.

SEIB: I think that’s right.

And, you know, if this were going to be an appointment that was really going to radically change the ideological balance on the bench, then maybe the stakes would be higher, and maybe you might have more opposition.

But I think, in this circumstances, in which you have a liberal justice being replaced by a liberal justice, essentially, I don’t think people are going to go to the mats for this one in the end, you know, unless something happens, as Ed said.

KING: Let’s -- let’s move on to this issue. It is on the cover of “TIME” magazine, where Karen works. And many of us in the news industry are covering this big debate. And there’s a policy -- there are policy questions and political questions as we look into health care.

And one of the big questions in this debate is, can the president and the Democrats sell a so-called public option? You create a government-run, government-sponsored insurance program that competes against Aetna and Blue Cross and everybody else out there in the private sector.

Republicans don’t like it. Here is the Senate Republican leader, Mitch McConnell , saying, it’s a bad idea.

(BEGIN VIDEO CLIP, “FACE THE NATION”)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I think that, for virtually every Republican, a government plan is a nonstarter. There are a whole lot of other things we can agree to do on a bipartisan basis that will dramatically improve our system.

But we already have the best health care in the world. We know it costs a lot, but we have the best health care in the world.

(END VIDEO CLIP) KING: But it’s not just Republicans raising objections.

Earlier, in this room, we had Kent Conrad , a centrist Democrat, the chairman of the Senate Budget Committee. And he says he’s not necessarily opposed to it, per se, but you need 51 votes to pass the bill.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: This really isn’t, to me, a matter of right or wrong. This is a matter of, where are the votes in the United States Senate?

(END VIDEO CLIP)

KING: So, if you can’t get -- he wants 60 votes. He doesn’t think you should do this through the Senate budget rules of so-called reconciliation.

But if Kent Conrad is worried, Karen Tumulty, is a public option in trouble?

TUMULTY: Well, first of all, I -- in here -- in Senator McConnell’s comments, you heard conflating a whole bunch of different things.

When people say a public option, a government plan, it can mean any number of things. And what Senator McConnell was talking about, which is a big government-run system like Canada and Britain, nobody is talking about that.

And even a government plan could look like many, many different things. And Kent Conrad himself has proposed an idea that would operate almost like a rural co-op system.

So, I think that, ultimately, there is likely to be some version of this somewhere in the bill, but I think it’s going to be very watered down and it’s going to look like a private insurance company that happens to be financed through the government, than some sort of big new version of Medicare.

KING: When the president goes to the AMA tomorrow, doctors groups skeptical of a public option, skeptical of government reaching in to its business, what is he going to say?

HENRY: Well, he’s going to need to try to build on what I saw Secretary Sebelius say on your program at the beginning, which is that the administration understands they have got to keep the parts of the system that worked and fix the parts that are broken, because they have to counter that argument that the government is going to come here and take over a system that has flaws, but largely works for millions of people.

The 46 million who are uninsured, you have got to deal with that, as you have been talking about. But I think, politically, for the president, he’s going to use a lot of political capital here, because, unlike the Supreme Court fight, where the Republicans can’t seem to find their voice of opposition, very easy for the Republicans to rally and say, the government is going to take over.

Even if it’s technically not right, it’s a great issue to demagogue. They’re already starting to do that. And then you have got centrist Democrats adding to the mix, saying, “We’re concerned as well,” as you had on your program.

So, that’s a bad political mix for the president. He’s got to make that argument that he’s going to find that sort of middle ground, where there’s going to be a public option, where the government doesn’t take over your health care, but sort of comes in and helps the people who are falling through the cracks.

KING: What happened this morning, because the administration -- during the campaign, Senator Obama said, do not tax the benefits, the health benefits, the most of us get from our employees. He said that’s a bad idea.

Then the administration said, you know what? It’s going to be hard to pay for this, and we’re using our money from the Bush tax cuts somewhere else, for deficit reduction. So, we’re open to that idea. If that’s what the Congress decides, OK.

Then, today, Vice President Biden and Secretary Sebelius saying, don’t do it, pushing back again heavily on the taxation-of-benefits issue.

What happened?

SEIB: Well, this is about reassuring the middle.

And you have to reassure the people in the center who have insurance that the change won’t take their insurance away. The president says it. When people hear about their benefits being taxed potentially by their employer, they think, well, that -- that’s going to make my employer drop my health benefits.

That basically destroys one of the cardinal rules for -- of the Obama administration, which is, keep people who are happy with what they have got happy with what they will still have.

I think the interesting thing that is easy to overlook -- and those of us who were around in ‘94 should not forget this -- that much of the arguing now is about how to do this, not whether to do this. And that’s an important distinction now.

The -- a lot of the posturing, and even some of the opposition, is designed to improve people’s position within the negotiation, under the assumption something is going to happen this year, not because they think they can stop the train entirely.

That’s a big difference. And I don’t know where that leaves the train at the end of this year, but people think this train is still moving, even if they’re unhappy with some of the direction.

KING: And do -- do the leaders in Congress pushing this like this relatively hands-off approach from the White House, saying, you know our broad principles, you guys fill in the blanks, or would they like, Karen, the president, who has a higher approval rating than they do, to take on some of the hard ones?

TUMULTY: At some point, the president is going to have to come in and be clearer about where -- where he stands in the weeds, in the fine print of this. But we’re not at that point yet.

And, right now, they want him to go out and sell the idea publicly and come up -- and come up with the arguments against the demagoguery that’s out there. But they want to work this out themselves.

HENRY: Because, on those points, your -- your diner conversation, you saw it right there, where people -- there was clearly consensus that something needs to be done. But, there, it’s also clear that the American people are not fully engaged in this debate yet. They don’t really know, what is the prescription here?

And, as you mentioned, the president’s approval ratings are very high. That’s where he can use his political capital now, engage the public. That what he plans to do in Chicago tomorrow, to say, here is the direction we need to go, because they know there’s a problem, but they don’t know how to fix it.

KING: We will keep watching.

Ed Henry, Karen Tumulty, Jerry Seib, thanks for coming in on a Sunday and helping us out.

Usually, we bring you news about the tough economy, hard times, tough choices, the uninsured. In a moment, we want to make you smile, something a little different.

We were in Orlando. The NBA finals happened to be there -- no coincidence. I will admit that one. We want to show you NBA players making kids smile for a great cause.

Stay with us.

(COMMERCIAL BREAK)

KING: Often in our travels, we report on sadness, people who don’t have health insurance, people who are losing their jobs, factories shutting down, and communities changing.

This week, we wanted to also make you smile. We were down in Orlando, Florida. We were focusing on health care. But I’m a big basketball fan. And the NBA finals were playing there. There’s Dwight Howard jumping there against Andrew Bynum. That’s the tipoff right there in game three.

We were down there, and we wanted to see some basketball. There’s Kobe Bryant, the Lakers in a huddle right there during a time- out. This is the ultimate goal, winning the Larry O’Brien Championship Trophy. I got to hold that up in Orlando. It was pretty cool.

But we were at this event for this reason. They’re not only playing basketball. They are participating in the NBA Cares program. Look at the smile on these faces. This is the NBA community service project. And what it does is, it brings reading and literacy into schools.

And thanks to the investment of the NBA and its partners, they opened a new reading center at an inner-city school in Orlando. And when you see this happen, you think, pro athletes, they’re rich, they make money. Some of them, many of them, also want to make kids, not only smile, but succeed.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Blue and white!

UNIDENTIFIED CHILDREN: Yeah!

UNIDENTIFIED FEMALE: Blue and white!

UNIDENTIFIED CHILDREN: Yeah!

AHMAD RASHAD, HOST, NBA TV’S “FAN NIGHT”: Today, we’re continuing an NBA finals tradition by dedicating a new reading and learning center filled with new furniture, books, computers and so many other great resources to help the young people in this community succeed.

BILLY HUNTER, EXECUTIVE DIRECTOR, NBA PLAYERS ASSOCIATION: There is no player that I know any more about in the NBA who is more committed to educating and expanding the horizons of youth than Adonal Foyle.

ADONAL FOYLE, NBA PLAYER: Whether or not we think we’re role models or not is irrelevant. I think the kids view us as role models.

You want to be a point guard?

You know, we owe it to them to kind of create a space where they can have a -- a childhood. I mean, a lot of these kids, you know, don’t have the opportunity to have safe places to play.

I think, as a professor athlete, we have a moral responsibility to give back to our community, to give back to the people who have made our lives amazing.

DAVID STERN, NBA COMMISSIONER: And that’s something that we understand, because, actually, as government becomes more limited in its resources, I think the private sector has to step up.

KING: The resources for this harder to define in difficult economic times? STERN: Well, so far, they’re OK, but they will be harder next year, and we’re just going to have to dig deeper.

J.J. REDICK, NBA PLAYER: We like to be engaged. We like to actually give our energy, interact with the kids, put a smile on their face. That’s important to us.

As fun as it is for the kids and as -- as much joy as it brings them, it’s even more fun for us.

FOYLE: These are the people that make our life what it is. These are the people that come to the game who scrape up every last cent they have to buy a ticket. And we have to remember that. We’re connected. And these kids are the ones that is going to determine our future. We have to do what we can to help them and to get them on the right path.

(END VIDEO CLIP)

KING: A great visit with the players and some former NBA greats at that learning center. And the kids were great. And let’s hope it helps them succeed in life.

We would like to welcome back our international viewers now to the STATE OF THE UNION report for this Sunday, June 14.

President Obama makes a new push for health care reform, but there are strong objections to his call for a government-sponsored insurance option, as well as concerns about the cost of his ambitious plan.

The health secretary, Kathleen Sebelius , is here to lay out the administration’s case.

KING: And as Congress begins the work of writing health care legislation, there is broad agreement on the need for changes but significant divides over how to pay for reform and how much power to give the federal government.

We’ll break down the options with three crucial senators, crucial to any chance of a bipartisan deal.

And Iran’s President Mahmoud Ahmadinejad claims victory in that country’s disputed presidential election. We’ll talk with CNN’s chief international correspondent Christiane Amanpour in Tehran.

All of that ahead, on this hour of “State of the Union.”

It was a major push for health care reform. He calls the cost of the nation’s current system “unsustainable,” and says Congress must act this year.

But as his supporters on Capitol Hill get down to the details, there are several difficult flash points. One is the call for a government-run insurance option that would compete with private insurance plans. Another is how to pay for this at a time of a punishing recession and already rising deficit spending.

Joining us now to make the administration’s case is the Health and Human Services Secretary Kathleen Sebelius .

Welcome to “State of the Union.”

SEBELIUS: Thanks, John.

KING: Let’s with the moment. Why now, when you have a punishing recession, near 10 percent unemployment, GM bailout, billions of dollars being spent on that. That’s just at home? If you look around the world, the uncertainty in Iran, Iraq, Afghanistan, the push for Middle East.

Why now?

SEBELIUS: Well, John, as the president has said all during the campaign, and continues to say now, we can’t fix the economy without fixing health care.

The costs are crushing us. It’s hurting families. Our businesses are less competitive. We can’t continue on this pathway, so, fixing health care, not only taking some cost out of the system, but delivering higher-quality care to all Americans, and making sure that the 47 million Americans who don’t access on a regular basis to preventive care in the health care system has to change. And it has to change now.

KING: There are some who would say we have heard this argument before. And I want to take you back in time. It was in 1945, more than 60 years ago, Harry Truman said we needed a national health care system, that it was an urgent priority.

Critics called it socialism. Harry Truman didn’t get his way in. Then, in 1993, 16 years ago, then President Clinton said health care was a huge priority for many of the same reasons President Obama lists now.

Let’s listen.

(BEGIN VIDEO CLIP)

PRESIDENT WILLIAM J. CLINTON: ... to strengthen the economy will fail, unless we also take this year, not next year, not five years from now, but this year, bold steps to reform our health care system.

(APPLAUSE)

CLINTON: Our families will never be secure, our businesses will never be strong, and our government will never again be fully solvent until we tackle the health care crisis. We must do it this year.

(APPLAUSE)

(END VIDEO CLIP)

KING: The Clinton plan, of course, was defeated in Congress. Now the next Democratic president, Barack Obama , says, the moment is now.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Let there be no doubt, health care reform cannot wait, it must not wait, and it will not wait another year.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KING: Many people will say, we have been down this road. And some, Secretary Sebelius, make the argument that President Clinton made the very same argument: Our businesses cannot survive. Our economy cannot survive. We must have health insurance.

And, yet, after the Clinton plan was derailed, we had the biggest period of growth in this country in the last 25 years. The unemployment rate was low. The government actually ran a surplus at the end of the Clinton administration, without health care reform.

So, there are many out there who will say this is, you know, boy crying wolf.

SEBELIUS: Well, I think that the situation has changed. The good news, is a lot of the people who opposed, not only the plan that Harry Truman put forward -- and he did relentlessly during his administration -- and what Bill Clinton put on the table, they were back as opponents, they’re now they’re at the table.

Doctors understand the current system doesn’t work. They’re spending way too much time on paperwork and overhead, and not enough time with patients. Hospitals can’t sustain it. The Medicare system is going to be broke down the road in the not-too-distant future, a system that millions of seniors rely upon.

Insurance companies are saying they are willing to change, they’re willing to talk about this. That’s a very different dynamic than even in the Clinton era, when those same folks were pushed away, saying the status quo is acceptable.

Everybody recognizes the status quo is the enemy. It’s unacceptable, unsustainable. We can’t continue down this path.

KING: Let’s look at some of the policy options. You mentioned doctors.

The president tomorrow will speak to the American Medical Association. Doctors are skeptical about this public option. And let’s look at -- we will show our viewers what our means. It’s a government-owned health insurance plan, similar to Medicare and Medicaid. And it essentially would increase competition. And the goal is to lower prices by having competition with private insurers.

Those who argue against it say the subsidies from the government would be unfair competition, hurt private insurers, and perhaps drain the federal treasury, because, once you have a government option in place, you need to pay for it.

How will the president make the case to the skeptics, even in his own party, that this is too much government?

SEBELIUS: Well, I think that competition is a good thing, that most Americans understand that choice and competition very much is what we want. So, if you look at a health exchange, a marketplace, where people can have some options -- in many parts of the country, private insurers have no competitor, in -- in a state like my own home state of Kansas. There is a dominant insurance company in a lot of the states.

So, we created a public option for state employees, so they could choose side by side benefits and prices. Competition is good. You can write the rules for a level playing field.

The president does not want to dismantle privately-owned plans. He doesn’t want the 180 million people who have employer coverage to lose that coverage. He wants to strengthen the marketplace.

But, you know, I -- I don’t think it’s a big surprise that a lot of insurers say, you know, what we would really like is, everybody who doesn’t have insurance to be told they must buy it, and buy it only from us.

The president feels that having a public option side by side, same playing field, same rules, will give Americans choice and will help lower costs for everybody. And that’s a good thing.

KING: And how do you answer those who would say: “We’re not sure. We’re not sure. Maybe we will be in that position of a public option, but we’re not sure. So, how about a trigger? How about you enact reforms that give the private insurance industry, maybe it’s three years; maybe it’s five years, and if, by then, they haven’t lowered costs, they haven’t brought the uninsured into the thing, then the government option would trigger and kick in then”?

What’s wrong with that?

SEBELIUS: Well, there are a lot of, now, specific ideas being discussed on Capitol Hill. And, certainly, the trigger is one of them.

But what Massachusetts found when they moved to insuring all citizens of the commonwealth is that, unless you address costs from the very first day, unless you have a system where cost control and cost lowering is one of the goals, you don’t do so well. You -- you can bring everybody into the system, but the costs may rise.

So, I think having a public option from the outset, having the design, being competitive, and making sure there is some choice, making sure that consumers have a choice of plan, and, for the first time ever in the United States, making sure that insurers don’t decide who gets covered -- if you got a preexisting condition, we want you in the marketplace, we want you and your family to be covered, and we want you to be able to go to a doctor of your choice and have preventive care and wellness care.

That’s part of reforming the system.

KING: Another option put forward by those, including in your party -- Senator Kent Conrad , the chairman of the Budget Committee, will be with us later.

He says he’s a little skeptical of having a national government- run plan. How about do something like they do in rural areas with electric co-ops? And, so, have a co-op plan. They’re privately owned, nonprofit health insurance cooperatives. And he says that would get you your goal. You would increase competition and lower prices.

The argument against it is, it’s hard to scope out how much that would cost the taxpayers. But is that worth trying as an alternative, if you have so many centrist Democrats and maybe even some Republicans who would join you if you did that way, not a government option?

SEBELIUS: Well, again, I think that having these ideas on the table is exactly where we need to be right now. The Senate is actively engaged in looking at strategies.

There is no one-size-fits-all idea. The president has said: These are the kinds of goals I’m after, lowering costs, covering all Americans, higher-quality care. And around those goals, there are lots of ways to get there. So, we’re going to look at idea by idea. I -- I think the good news is, the Senate and House are rolling up their sleeves. They’re ready to go to work, and they’re ready to work with the president to get this done this year.

KING: Another -- I’m going to use a term that might cause some eye-glaze-over at home, but it could become very important in this debate.

And it’s comparative effectiveness research. And this is where you collect and compare data on everything that is done out in the health care. And you want to see essentially what therapies, what tests, what surgeries have a high effective rate and -- and what don’t.

SEBELIUS: Right.

KING: The argument for is, you improve the quality of care and you eliminate unnecessary tests, unnecessary procedures, which saves money. The argument against is that, well, that will be used for rationing of some kind.

Will that be used in an Obama administration plan? And is there someone out there who might not get an MRI, might not get a CAT scan, might not get a certain test or a certain procedure because it only works in 50 percent of cases or it only works in 20 percent of cases, and, so, they will be told, no, sorry?

SEBELIUS: Well, John, I think the great news is, is there is fabulous medical care being delivered at lower costs all across America.

I was just in Omaha, Nebraska, and went to Lakeside Hospital, where it’s a fully digital hospital. And the doctors have come up with protocol to deal with everything from heart attacks to trauma care.

And they are trying to drive quality, so that every patient who comes through the doors of Lakeside gets the same high-quality care. And they find, not only is it very effective in reducing costs, but it’s very effective in terms of outcome. That’s what we want to have happen across the country.

So, comparative effectiveness research says, you know, does paying twice as much in McAllen, Texas, as some other part of the country deliver better care? And the answer is no. What are the strategies that work?

Every patient, if you could choose not to be operated on, and have a -- you know, a medication that works just as well, I think, would opt for that. If three tests don’t produce a better result than one test produces, I would rather have the one test, thank you very much.

So, we want to empower doctors and empower consumers to know what works, how often it works, what is the most effective, and try to help with that care.

KING: You say empower doctors. But if you -- once you have that data, you will be telling doctors, won’t you, especially if you have a government-run plan that is setting the tone of the marketplace and the rules of the marketplace?

KING: You’ll be telling them what’s in and what’s out, won’t you?

SEBELIUS: Actually, the comparative effectiveness research says, as part of the rules, that Medicare cannot use the research for payment decision. It prohibits, you know, the kind of rationing that people talk about.

What we’re doing, right now, is rationing quality, not cost. Higher cost does not translate to higher quality. We want better health outcomes for every patient.

If you come through the doors of a hospital; if you see your doctor, you should be getting the best possible information, the best possible strategies. And that’s happening some places. It’s not happening every place. And we think that part of reforming the system is that every American should be getting the best bang for their buck. And they’re not doing it right now.

KING: Much more to discuss with the secretary of health and human services, Kathleen Sebelius . Stand by. We’ll have a lot more to discuss.

We’ll also get a status report on efforts to fight the H1N1 flu virus, which the world health officials now say is a global pandemic. Stay with us.

(COMMERCIAL BREAK)

KING: We’re back with Health and Human Service Secretary Kathleen Sebelius .

And we wanted to come over to the magic map to take a peek. This is a map that shows...

SEBELIUS: Right.

KING: ... the percentage of uninsured across the United States -- essentially, the brighter the state, the highest percentage of residents in that state that are uninsured.

But I want to just focus on a few facts as we continue the conversation here. There are an estimated nearly 46 million Americans who are uninsured. Those projections vary a bit, but that’s a rough number people accept. Sixty million Americans, by most estimates, lack a relationship (AUDIO GAP) you get when people get sick, 120 million emergency room visits a year, which drive costs way up.

SEBELIUS: Right.

KING: Now, how to deal with that is a big part of this debate, Madam Secretary.

I was in Florida this week. And a family physician named Dr. Dennis Saver says you need more primary care physicians, like him, but that medical students don’t want to do it. And here’s why, he says.

(BEGIN VIDEO CLIP)

DR. DENNIS SAVER, PRIMARY CARE OF THE TREASURE COAST, INC.: There aren’t enough primary care physicians right now. The economics right now make medical students disinclined to choose a career in family medicine or another primary care specialty, because most of them come out with a very substantial debt out of medical school, substantial meaning $150,000.

And they say, well, I can earn this, or I can earn twice this. What am I going to choose? Well, these are not dumb people. They make an obvious choice.

(END VIDEO CLIP)

KING: How do you use the power of the government, whether it’s tuition subsidies, other incentives, to get more of these doctors to go into family primary care, and not the higher-paying specialties?

SEBELIUS: Well, John, the doctor is absolutely right, that the financial incentives are now weighted toward specialty care, and not to primary care and not to family practice docs.

I was with two young third-year residents in Omaha, and they said exactly the same thing. They want to go in family medicine, but they say, you know, at the end of the day, you say: How can I do this? How can I justify it?

We can begin to change those payment incentives. And we’re doing that right now through the Medicare system, helping to pay off tuition, helping to rebalance the incentives, financial incentives, to go into primary care.

The other thing that we -- we are doing -- and the Recovery Act provided some important resources to do it -- is double the number of Commissioned Corps members, so that doctors who serve in underserved area, who provide primary and preventive care absolutely are going to have their tuition paid.

We want more nurses and more mental health professionals. But the notion of the emergency room visits, which is going on all over the country, people coming through the door of emergency rooms, not only is it expensive and ineffective, but, frankly, they come at a sicker time.

If they had that early checkup, if their kids got the preventive care they needed, we would lower costs for everybody, instead of having them come through the doors of an emergency room.

KING: In the absence of national reform, many states have acted on it.

And I want to just remind our viewers again here, the brighter the state, the higher percentage...

SEBELIUS: Right.

KING: ... of its residents who do not have health insurance.

Well, look, Massachusetts is blue, the smallest percentage in the country without. Now, why is that? They have enacted state health care reform that includes a controversial item, an individual mandate on health insurance. You must get health insurance in Massachusetts.

You can be penalized more than $1,000 if you don’t buy insurance. Employers with 11 or more employees are required to buy it. And, as a result of this program, more than 97 percent of the state’s residents now have health insurance.

Is this the way to go, Secretary Sebelius, at the national level, an individual mandate that says, you buy insurance, or else you will pay a penalty?

SEBELIUS: Well, as you know, the president, during the campaign -- and continues to say -- he -- he felt that parents need to purchase health insurance. The individual mandate should fall on parents.

There’s a lot of discussion in Congress of whether to expand that, like Massachusetts, and say, everybody has a responsibility. Most people, in my experience, don’t have health insurance, not because they don’t want it -- because they can’t afford it.

So, a mandate only works if, in Massachusetts, you have subsidies, help to pay if you’re lower income, help for employers to come into the system, help for everybody to get insurance, and get rid of the rules that say, if you’re sick, if you have had a preexisting condition, if you have had a heart attack or a stroke, we don’t really want you, or we’re going to charge you so much, that it’s totally unaffordable.

So, the rules have to change in order for any kind of a mandate to work.

KING: But you’re open to it?

SEBELIUS: Well, I think having everybody step up to the plate, having employers encouraged to come into the system, individuals certainly come into the system, and the government play its role, I think, then we can fully cover all Americans and lower costs for everybody. KING: Well, let’s have a seat as we continue to what is the crux of the issue now, which is, how do we pay for this?

During the campaign, you mentioned that then Senator Obama was a bit skeptical about an individual mandate. He was also quite critical of a proposal pushed forward by Senator McCain, saying, increase -- to put tax -- tax the benefits that you receive from your employer.

I want you to listen to the president from the campaign.

(BEGIN VIDEO CLIP, AUGUST 28, 2008)

OBAMA: Now, I don’t believe that Senator McCain doesn’t care what’s going on in the lives of Americans. I just think he doesn’t know.

How else could he offer a health care plan that would actually tax people’s benefits?

(END VIDEO CLIP)

KING: But a tax on benefits is now on the table, right? Many in Congress think that’s the best way to go.

SEBELIUS: Well, certainly, it’s one of the items being discussed, not by the president, but by members of the House and Senate.

I think that, again, the president starts with the premise that 180 million Americans have health coverage through their employer, that attacks on those benefits may dismantle that marketplace.

So, while you are trying to make sure we cover the 47 million Americans who don’t have coverage, what we don’t want to do is destroy the system that currently is in place that lots of Americans like.

SEBELIUS: You start with the premise of, you continue what works and fix what’s broken. So, there is still a great deal of disagreement on whether or not taxing benefits at any level of any kind really does put us a step forward or take us a step back.

KING: We will have you back as the debate unfolds.

Before I let you go this morning, I want to just ask you about the H1N1 flu virus. You were on the program a short time back, when we were very concerned about the spread of the virus. Seems to have calmed down, but do you expect a resurgence in the fall, as the flu runs its normal cycle, and will there be a vaccine ready by then?

SEBELIUS: Well, we’re certainly making every effort to be totally prepared. The flu vaccine, strains are being tested as we speak. Production lines are being set up, so that production could start as early as late summer and be ready by the fall, if, indeed, a vaccine program is recommended.

We’re watching the Southern Hemisphere. Flu season is unfolding there, and we need to know what H1N1 is going to do when it mixes with the flu, and certainly watching across the country, as transmission continues.

The good news is, it still seems like not such a lethal virus, but we’re fully prepared. We’re getting governors ready to go, in case a major vaccination program is needed, working with school officials and health officials. So, preparation is -- is very much under way for what may happen this fall.

KING: Thanks for stopping in.

SEBELIUS: Glad to do it.

KING: We will, again, catch up again as the health care debate unfolds.

And you just heard the Obama administration’s side of the health care debate. Next, we turn to three senators who agree with the president that reform is an urgent priority, but they worry the White House wants to give the government too much power.

Stay with us.

(COMMERCIAL BREAK) KING: Many Republicans, as well as some Democrats, are skeptical of President Obama’s health care proposals. So, what are the odds of passage, and is there any chance Democrats and Republicans might come together on this important issue?

Democratic Senator Ben Nelson of Nebraska joins us from Omaha. Republican Senator Susan Collins is in her home state of Maine this morning, and, here in Washington, Democratic Chairman of the Senate Budget Committee Kent Conrad of North Dakota.

Senators, thank you, all.

I want to spend most of our time on health care, but I want to start with the dramatic developments in Iran. President Ahmadinejad says he’s won in a landslide. The opposition candidate says he believes he’s been cheated. And the White House, in a very carefully worded statement, does say it believes there have been some voting irregularities.

Senator Conrad, to you first.

This president has said he wants to reach out to Iran, he wants to have a big dialogue with Iran. If Ahmadinejad claims victory, and the White House believes there are irregularities, does that diminish the reasons and the -- the moral standing of Mr. Ahmadinejad, to the point where you think dialogue should be lessened?

CONRAD: You know, I don’t think any of us know at this moment. If he won in a legitimate election, that’s one thing.

If it was filled with fraud, as is now alleged, that’s quite another thing. And we see the Iranian people in the streets by the thousands, saying that they believe that their votes were stolen. So, this becomes a very serious matter for the Iranian people, and certainly for our relations with them.

KING: And, Senator Collins, our Christiane Amanpour is on the scene, and she says some opposition leaders have been arrested.

Can President Obama have a dialogue with a government if he believes there have been voting irregularities and if he believes people who are trying to protest are being arrested?

COLLINS: It certainly makes such a dialogue much more difficult.

But, frankly, I have always been skeptical about the success of any kind of dialogue with the hard-line leaders of Iran. We should certainly give diplomacy a chance. But I am skeptical that it will be successful. And these voting irregularities, the arrests of opposition clerics and opposition leaders, certainly makes it far more challenging for the president.

KING: And, Senator Nelson, does the United States have many options here, in a country that doesn’t often care much what we say?

NELSON: Well, certainly not until there’s some more clarity about what did or didn’t happen in this election.

But the arrest of opposition leaders for traffic violations probably tells more about the story than anything else that’s being reported.

KING: All right, let’s move on to the health care debate here in the United States.

Chairman Conrad, you have put forward a proposal skeptical of this government option -- number one, skeptical. Number two, you have done the math and don’t think the votes are there for it in the United States Senate.

So, you say, let’s do what we do in rural America with the electricity cooperatives. Let’s form a cooperative, some government help, but not government power. We just had Secretary Sebelius on the program. She said, well, let’s see, a lot of ideas on the table.

But they would not commit to it, not against it, but not for it right now. Why do you think that is the way to go, and the president’s plan, or Senator Kennedy’s plan, as it now stands, is wrong?

CONRAD: This really isn’t, to me, a matter of right or wrong. This is a matter of, where are the votes in the United States Senate?

About two weeks ago, I was given the assignment by this so-called G-11 group. That’s the chairman and ranking members of the key committees. And they asked me, almost in an offhanded way, see what you can come up with in terms of a compromise, because we have one group who very much wants a competitive delivery model to for-profit private insurance companies.

We have got another group, Republicans and Democrats, who are adamantly against the public option, because they see that as government control. So, a co-op model came to mind.

And, by the way, it’s not just in rural areas. We have real electrics in 47 states -- real electric cooperatives. Ace Hardware is a cooperative. Land O’Lakes, $9 billion entity, is a cooperative. REI is a cooperative.

So, we have got lots of cooperative models around the country that are very successful. And they’re membership-owned and membership-controlled, not government-run. But they do provide a nonprofit competitive model for the for-profit insurance companies. That’s -- that’s the potential of this idea. It appeals to both sides.

KING: And, Senator Collins, if Senator Conrad can sell that idea, can President Obama get Republican votes here?

COLLINS: I commend Senator Conrad for coming up with this idea. It’s far preferable to the government-run plan that has been discussed by the administration. So, this is a possible compromise. I need to know more details. We need to better understand how it would work. But it’s certainly better than a Washington-run plan.

KING: Senator Nelson, will you accept a public option? You have, on previous occasions, said it’s a bad idea. And, other times, you have said, well, you would need to see the details of it.

What can the president do to get Senator Ben Nelson of conservative Nebraska to say, “I can take more government role in health care”?

NELSON: Well, I think Senator Conrad is on to something here. This -- this can be an additional method for competition. You will have private insurers. You can have cooperatives. And a lot of these ERISA-type programs are self-insured. Many large employers self- insure.

What we want to do is, we want to make sure that we preserve what’s there -- the president has made that very clear -- and be able to have competition, but to do it in a way that you don’t destabilize the insurance for 200 million Americans, trying to provide a way for 42 to 46 million Americans to have health insurance as well.

KING: Does it make you, Senator Conrad, somewhat skeptical of their motives, if they won’t take a trigger?

Let’s say, you take your proposal, co-ops, you do other things, and you essentially tell the private insurance industry, you are going to get your act together, or else? Whether it’s three years, five years, two years, pick your date. Pick your threshold. And, if you don’t meet this standard by then, then this government option will kick in.

Why does the White House, why does Senator Kennedy, why does Chairman Waxman on the House side say no?

CONRAD: Well, you would have to ask them. Obviously...

KING: You talk to them.

(LAUGHTER)

CONRAD: I do.

And they’re very committed to what I would call the pure public option approach, and understandably. There are very good arguments they can advance.

The problem is votes, you know? At the end of the day, nothing advances unless you get 60 votes in the United States Senate. Now, I know there are some who are saying, we can do this through reconciliation, which is a special fast-track process...

KING: Right.

CONRAD: ... that only requires 51 votes.

But I think, on exploration, people will find that really does not work, for a lot of arcane reasons we don’t need to go into. So, I think you are in a 60-vote environment. And that means you have got to attract some Republicans, as well as holding virtually all the Democrats together.

And that, I don’t believe, is possible with the pure public option. I don’t think the votes are there.

KING: Our thanks to Senator Conrad, Senator Nelson and Senator Collins. Up next, the latest on Iran’s disputed presidential election. We’ll talk with CNN’s chief international correspondent Christiane Amanpour, who is in Tehran. Stay with us.

(COMMERCIAL BREAK)

KING: A great deal of anger and confusion over Iran’s presidential election. The incumbent president, Mahmoud Ahmadinejad, was declared the winner by a large margin. His main rival is disputing that result. Let’s bring in CNN’s chief international correspondent Christiane Amanpour. She’s in Tehran. And Christiane, President Ahmadinejad defiant today, saying he won and he won big, but it appears his lead opponent, Mir Hossein Mousavi, would like the election annulled. Is that right?

AMANPOUR: Well, look, what’s happening is that this evening, there is this huge rally that’s really stretching as far as the eye can see. You can see helicopter shots from Iranian television, for President Ahmadinejad, as he’s held this press conference to basically fend off and reject any allegations of fraud and cheating and declare himself the clear and transparent winner.

But you say, Mr. Mousavi, apparently, according to a web site posting, and it is hard to pin this down, but there is a letter circulating amongst his supporters and posted on his web site that attributed to him that says that he is calling on Iran’s Guardian Council to nullify the result.

Now, this is the body here, the religious body that vets all things electoral. They vet the candidates who can run. They, you know, make the rules and basically oversee the electoral process, so this is what we’re hearing is being circulated on his web site, although it is not signed by him.

When I tried to ask at the press conference of Mr. Ahmadinejad would they guarantee Mr. Mousavi’s safety and security and why were opposition leaders being arrested, he basically didn’t answer me, except by an allegorical, roundabout way to say, well, if people blow a red light, then they have to pay a fine.

So the condition of Mr. Mousavi is still a bit of a mystery, and there are still protesters out on the street, and there are lots and lots of riot police out as well.

KING: And, Christiane, let’s assume for the moment that President Ahmadinejad will get another term. Did he say anything in that news conference that suggests a policy shift at all vis-a-vis the nuclear program in Iran, relations with the United States? AMANPOUR: No, he didn’t. And in fact, John, the fact is that neither of the candidates were going to have a different nuclear policy. Certainly Mr. Mousavi had spoken in more moderate tones about it and said that there was more inspection and verification and confirmation that Iran could do regarding any militarization, to allay the international community’s concerns at bay, but both continue to say that they would have a peaceful nuclear program and that there was nothing that could stop that.

And he was asked that in the press conference today, and he gave pretty much that answer. He said that I, last month, wrote a letter offering to debate Mr. President Obama at the United Nations on this issue, and further asking -- in response to a further question about possible repercussions, somebody said, do you still worry that all options are still on the table, as the U.S. had said and others have said? And he said, who would dare to try such a thing? Who would dare to even think such a thing? Who would dare to even threaten Iran?

So, you know, the press conference was very -- what’s the right word -- it was very defiant. He was in a very defiant mood, and that was that, really.

KING: Let me ask you lastly, I’ve heard you reporting that some opposition figures have been arrested. What about yourself and other foreign journalists? Iran is not the easiest place to do business if you’re in our business.

AMANPOUR: Well, you know, the surprising thing is, that actually, I’m surprised that we have been allowed to do so much reporting and so much shooting on the streets and so much broadcasting and live broadcasting without any repercussions.

Now, it is true that today Al Arabiya was shut down. The authorities shut down the Tehran bureau for a week without explanation, according to the Al Arabiya network. And it is true that some journalists were beaten up and variously sort of had their cameras taken and tapes taken. We were briefly taken aside by some of the very, very tense police earlier this evening, but we talked our way out of it.

It’s an exceptionally tense situation on the streets, but I would not say that it’s out of control at this time. There are protests. There are a huge amount of riot police in full riot gear. But everything I’ve seen with my own eyes from yesterday through today suggests that the police and the riot security forces are out basically sort of running battles with the protesters, but mostly stone throwing and pushing them back. There has been some head banging, there have been some baton wielding, but it’s not the same kind of clamp-down as perhaps one had seen back in the university protests of 1999. And the police are, by and large, not intervening as heavily as might have been expected. There is no notion at the moment of any curfew or martial law or anything like that being called.

KING: Christiane Amanpour on the ground for us in Tehran, tracking a dramatic and developing story. Christiane, thank you, and we’ll keep in touch in the days and hours ahead.

KING: And don’t forget. Coming up at 1 p.m. Eastern, at the top of the hour, “Fareed Zakaria: GPS” has a lot more on the fallout from Iran’s election.

(BEGIN VIDEO CLIP)

AFSHIN MOLAVI, NEW AMERICA FOUNDATION: We’re witnessing a generational rift here in Iran. Ahmadinejad represents the second generation of Iran’s revolutionary elite, who cut their teeth in the war with Iraq. Many of them come from security and intelligence backgrounds and the Revolutionary Guard.

What he did in this campaign is he took aim at the old guard of the revolutionary elite and he basically called them corrupt, fat cat insiders doing dirty business deals. Well, this is going to have ramifications beyond these elections that could spark a crisis of legitimacy.

ZAKARIA: And these guys, this old...

(END VIDEO CLIP)

KING: Stay tuned for “Fareed Zakaria: GPS,” coming up at the top of the hour, only here on CNN.

And up next, here, how conservatives are responding to the election in Iran and to President Obama’s ambitious domestic agenda here at home. One of the most powerful Republicans in the House, Congressman Mike Pence , gets the last word.

(COMMERCIAL BREAK)

KING: Twenty-eight -- 28 newsmakers, analysts and reporters were out on the Sunday morning talk shows, but only one gets the last word. That honor today goes to Republican Congressman from Indiana Mike.

Thanks for coming in.

PENCE: You bet, John.

KING: I want to start with Iran. The president of the United States wanted to have a dialogue, even if it were President Ahmadinejad. President Ahmadinejad now says he won, and overwhelmingly so. His opponent says the election was stolen.

And Vice President den, this morning, says, from everything he’s seen, the guy might have a point, that there are definitely irregularities, and the White House wants to know more.

What happens now, in U.S. relations?

PENCE: Well, I think, first and foremost, we need to take a half-step back from this administration’s olive branch and apology approach to enemies and countries that have been hostile to the United States of America and our allies, particularly with regard to Iran.

I think it’s important that we step back, that we -- I’m hoping, before the end of the day today, the president of the United States will speak a word of support for Mr. Mousavi and for the dissidents and the reformers within Iran.

You know, we always hear about that. I’ve been on the Foreign Affairs Committee for a while, John, and we hear about the difference between, you know, the -- the clerics who lead the theocracy, the -- the raging rhetoric of the anti-Semitic, Holocaust-denying President Ahmadinejad.

We always hear that there’s an enormous gulf between them and many of the good and decent people of Iran. I think now’s a great moment for this administration and the United States to reach out, express support, look for ways that we can encourage that demonstration within Iran. And I’m -- I’m hoping the president will do that.

KING: Let’s bring the debate home. Health care reform will be the president’s focus in the week ahead. And congressional committees are getting about the difficult business of writing the legislation.

The administration wants a public option, a government-run insurance program to compete against the ABC and XYZ insurance company. If you don’t like your insurance company, maybe the government will have a better deal for you.

Secretary Sebelius was on the program this morning. She knows that many conservatives, Republicans have said this is a Trojan horse designed to be the beginning of a government takeover. She says, and I want you to listen, no way, that the president -- if you like your health care plan now, you can keep it.

(BEGIN VIDEO CLIP)

SEBELIUS: Competition is good. You can write the rules for a level playing field. The president does not want to dismantle privately owned plans. He doesn’t want the 180 million people who have employer coverage to lose that coverage. He wants to strengthen the marketplace.

(END VIDEO CLIP)

KING: Would a public option, as the Democrats insist must be in there, strengthen the marketplace?

PENCE: Well, no. In fact, one of the things -- I keep hearing the word “competition” on all the programs this morning. You know, the government competes in the private sector the way an alligator competes with a duck.

(LAUGHTER)

I mean, the reality is, John, that if you introduce a government- funded option into the private health insurance industry, millions and millions of Americans will lose their current health insurance because their employers will simply either, you know, either choose to discontinue coverage or you’ll see health insurance companies out across the country say, you know, we can’t compete with Uncle Sam.

And, so, you know, voluntarily and involuntarily, you’ll see millions of Americans move into a government program. And ultimately, government -- you know, with a $2 trillion national debt, government is always, but especially now, at a time of scarce national resources -- government always involves rationing.

So, if people want to lose the ability, under their private health insurance plan today, to choose their own doctor; if they want government rationing to begin to be introduced into our health care economy in a wider way, the way it’s been in Europe and in Canada, then the government-run option is the way, or some new iteration of it, this co-op business we’re hearing of this morning.

You know, the reality is what we ought to do is what Republicans are proposing, and that is respect the doctor-patient relationship and look for ways that we can bring about immediate reforms that will strengthen our private health insurance system in this country.

KING: You mentioned deficit spending. I want to get your thoughts on this. I’m going to hold up the front page of today’s Washington Post.

“Obama’s spending plans may pose political risks.”

And we can show the graphic full on our screen now, so you don’t have to see it right here. But this smaller dot on the graphic, that’s the cost of borrowing for World War II, $3.6 trillion. The outer loop, the blue loop, is what the president proposes borrowing from 2010 to 2020, $9 trillion.

The president of the United States says this is necessary because of investments the government must make and because of the “mess” -- he calls it -- he inherited from George W. Bush . Mike Pence says?

PENCE: Well, the answer to following an administration that doubled the national debt is not tripling the national debt in the next 10 years, which is what the president’s budget will call for us to do.

You know, everywhere I go in Indiana and traveling a little bit as I am around the country, I hear more Americans every day expressing concern about runaway federal spending. People know we can’t borrow and spend and bail our way back to a growing economy. This stimulus bill, this $1 trillion stimulus bill that’s in effect today, you know, since it was passed, we’ve seen unemployment in this country rise from 5.2 million to 6.7 million.

The American people know this kind of borrowing and debt cannot be sustained. We have to have fiscal discipline in Washington, D.C. We have to be willing to make hard choices, and ultimately, we have to pursue tax policies that will encourage people to invest in ways that will create jobs and grow this economy.

KING: We’re out of time on this day, but I give you an invitation right now -- I know you’re very passionate about the energy debate that is about to begin in this country. We’ll have you back when Congress gets the bill on the floor. Mike Pence , thanks for your thoughts today. And thank you.

And next, the health care debate up close. We take you to central Florida, where the recession is adding more people to the already crowded waiting rooms at clinics that help those who can’t afford health insurance.

(COMMERCIAL BREAK)

KING: The map here shows you the uninsured, the percentage of uninsured across America. The brighter the state, the higher percentage of uninsured.

In our travels this week, we focused on health care and we went down to the Orlando area. We want you to look at some data here. The unemployment rate in the state of Florida is 9.6 percent. 3.7 million people in the state, 21 percent of Floridians, are uninsured. There are 270 doctors per 100,000 residents, which ranks Florida third in the country.

In the punishing economy, unemployment goes up, so does the number of Americans without insurance. So we wanted to meet on the front lines with those who urgently need health care and the doctors who treat them, to ask them, what should Washington do?

(BEGIN VIDEOTAPE)

KING (voice-over): Mary Yates is back. And, again, the news about her blood pressure is not good.

UNIDENTIFIED MALE: We want to see a number around 100 or below. And yours is 145. LDL, which is the bad cholesterol, is a risk factor for coronary artery disease.

KING: The last prescription made her dizzy, so Mary gets a different drug this time, as well as an anti-inflammatory for a sore hip.

YATES: Taking all this medicine, can you take it just one pill after -- after another at night?

UNIDENTIFIED MALE: You can. You can. But you...

YATES: Really?

UNIDENTIFIED MALE: Just be sure to take them with food.

KING: This is the employees clinic at Florida Hospital in Orlando. But Yates doesn’t work here. In fact, she doesn’t work at all. Two years ago, she lost her job, then her home, and more.

YATES: I’m the person that’s fallen through the cracks here, after working all these years. You know, I thought I was saving toward retirement. I have -- I have used that.

KING (on camera): So, without this clinic, you would be what?

YATES: I might be dead. That’s what they were telling me. My blood pressure was running about 180 over 100. He said it’s at stroke level. You need -- you have got to get in to see a doctor.

KING (voice-over): Three days a week, this is a free clinic, first come, first served.

And Dr. Jenni Keehbauch says the recession is driving up demand.

DR. JENNI KEEHBAUCH, FLORIDA HOSPITAL: And what we have found is that we’re turning more patients away, unfortunately. And -- and we are needing to expand in the near future. We’re seeing patients that saw us in the early 2000s, left us, got jobs, got insurance, and then now they’re coming back again, saying: Hey, we’re glad you’re here. I just got laid off.

KING: Ask Dr. Keehbauch about the health care reform debate in Washington, and increasing access is her first priority.

KEEHBAUCH: In our county alone, we have 200,000 patients that are uninsured. So, there’s just poor access to care. And the care is fragmented. Even the people with insurance, you know, they have a lot of specialty care, but they don’t have a permanent care person that is kind of captaining the ship.

DR. DENNIS SAVER, PRIMARY CARE OF THE TREASURE COAST, INC.: Breathe real deep.

KING: Dr. Dennis Saver, whose practice is in Vero Beach, sees major long-term savings in erasing that shortage of primary care physicians.

SAVER: The whole system is really, really expensive, because we don’t do it right. If we had thoughtful primary care on the front end, then people would not need to go and see three or four different doctors for one problem.

All right, sir.

KING: And Dr. Saver sees merit in calls for an individual mandate requiring every American to get health coverage.

SAVER: I think it does make sense, because you -- you can’t have a system in which people are out of it when they’re healthy and only in it when they’re sick. And, so, it’s kind of like everyone pays taxes. To make the infrastructure work, I think that -- that you really have to have everyone in there contributing.

KING: Mary Yates would love to be contributing, but can’t find work. And even the help from the free clinic only goes so far.

YATES: It’s just tough. I feel sorry (INAUDIBLE) because there’s people out there I have met here that have nobody. You know, at least I have some family (ph) that can help.

But even family I have called this year, they have said: “Don’t call me and ask me anymore. I can’t.”

I mean, now I have got to come up with money to go buy prescriptions. And that’s not going to happen a lot. It may not happen this week. I don’t know. I don’t know what to do.

(END VIDEOTAPE)

KING: We thank Mary Yates and everyone in central Florida for sharing their thoughts and their stories.

We’ll see you back here next Sunday at 9:00 a.m. for the first and last word in Sunday talk. Until then, I’m John King in Washington. Have a great Sunday. For our international viewers, “African Voices” is next. For everyone else, “Fareed Zakaria: GPS” starts right now.