CNN "The Situation Room" - Transcript: CBO Affordable Care Act Report

Interview

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BLITZER: Good point. Let's get some reaction, though. Brianna, thanks very much. Republicans clearly saying we told you so as they pounce on this latest report. Joining us to discuss this and more, Republican senator, Rand Paul of Kentucky. Senator, thanks for joining us.

SEN. RAND PAUL, (R) KENTUCKY: Glad to be with you, Wolf. BLITZER: So, what do you think about this report that suggests that now that people can get insurance. They don't have to worry about pre-existing conditions. If they don't have a job they can still get insurance. (INAUDIBLE) to their jobs, they're going to have more freedom, if you will. What do you think about this conclusion from this report?

PAUL: Well, I think, you know, what we've always said is that Obamacare adds a cost to employment and if you increase the cause of employing someone, you will cost unemployment. So, if two million people won't get their jobs because of Obamacare, economists also say another million people may be prevented from getting a job because we have to manage such an enormous debt. So, there's a lot of things going on that makes the economy weak.

PAUL: And we've got 20 million people out of work. It's a disaster out there. And we need to decide, are the president's policies working or they not working?

BLITZER: I spoke earlier today with Gene Sperling, the director of the president's National Economic Council. After this report was released, listen to what he told me.

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GENE SPERLING, DIRECTOR, NATIONAL ECONOMIC COUNCIL: People who are working more than they want to simply for health care, some of them will have the option of working a little less. And in terms of what the overall impact on jobs will be, I think you have to look at what the impact on productivity is because people are healthier, working harder, having less sick days.

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BLITZER: He's making the point that if you have health insurance, you're going to be healthier presumably because you'll be going to doctors. You're a physician. You understand that.

PAUL: It doesn't necessarily equate. Now, good behavior, exercise, and diet may prevent illness. Going to the doctor doesn't necessarily prevent illness.

BLITZER: But it can prevent an illness if they can detect some serious illness there in an early stage and deal with it, that's going to prolong your life.

PAUL: But if you look dollar for dollar and you say you spend more on health care, we'll be healthier, there are some preventive illnesses, but it's not dollar for dollar, and often, it isn't even correlated, to tell you the truth. Healthier behavior causes healthier people but not necessarily spending more on health care. But really, we're missing the real point. The real point is is that Obamacare is going to cost two million fewer people to have jobs. The huge advance and increase in our debt also costs us another million, and really, we need the opposite. We need millions of new jobs created. Instead, what we're seeing is an Obama economy with 20 million people really searching for work.

BLITZER: But you like the fact that children can stay on their parents' health insurance programs until they reach the age of 26. You don't have to worry about pre-existing conditions any longer. You can change your jobs, still get health insurance. You like all the positive features of the Affordable Care Act.

PAUL: Well, here's the though, Wolf, it sounds good to keep your kid until 26 until you find out how much is going to cost. I have a 21- year-old and I found out it was going to cost me nearly $500 a month to keep him on. There was a report this morning or yesterday that came out of Pennsylvania showing that some families were going from like $700 a month to $1,300 a month.

So, having those extra kids on your policy sounds good, but they're extraordinarily expensive because Obamacare charges you per individual whereas your old policy sometimes didn't cost you more if you had more children.

BLITZER: So, if you were to redo the law right now and I know you've studied it extensively, what would you keep from Obamacare?

PAUL: The main thing you want to do that's different than Obamacare is you want to expand choice and you want to expand health savings accounts and people's ability to save for their insurance. We did the opposite. We limited health savings accounts and we contracted choice. We really took away the freedom of choice.

So, really, what I would say is you want people to have more choices, more competition and lower prices. And I'd say Obamacare does the opposite. Less choices, more expense. So, there's a lot of things you could do. You could create a market.

Even if we weren't able to repeal Obamacare, which I would repeal it, you could simply expand choice by opening up health savings accounts and allowing insurance to be sold across state lines. That in and of itself would go a long way towards try to bring prices down.

BLITZER: Let me go your thoughts in a couple other critically important issues right now, including raising the nation's debt ceiling by the end of this month. The treasury secretary, Jack Lew, says if you don't do that, if Congress doesn't pass this legislation, it will cause enormous harm to the U.S. credit rating, to the overall U.S. economy. Are you ready to vote in favor of raising the nation's debt limit?

PAUL: Well, the interesting thing is, in 2011, when we did raise the debt ceiling and we added sequester budget caps to try to restrain spending, the S&P said it was inadequate and downgrade our debt anyway. So, we're now giving up on this sequester. So, absolutely, we should tie any increase in the debt ceiling to budgetary restraint. And when the president says he won't negotiate with a gun to his head, well, he won't negotiate without a gun to his head or without a deadline. Absolutely, there needs to be budgetary restraint because it's unconscionable to keep raising the debt ceiling without trying to restrain spending.

BLITZER: When I hear you saying is unless the president is willing to accept some concessions, that the Republican side is demanding you won't vote to raise the nationa's debt ceiling?

PAUL: Yes, but I'm afraid I'm in a minority of the minority. The recent Ryan-Murray budget already gave up on the sequester. So, I jokingly said, are you going to be able to stop the debt ceiling? What would we ask for? Getting back what we already just gave up a month ago? So, I don't have any high hopes for Republicans standing firm and saying we won't raise the debt ceiling. They've already been played.

I mean, they've shown that they're unwilling to stand firm because we gave up the sequester.

PAUL: Do you think they're, all of a sudden, going to get a backbone and say, oh, now, we're going to stand up. And what are we going to ask for, the sequester back? I mean, the sequester slowed down the rate of growth of spending but didn't even make any cuts and we gave up on that. So, I'm kind of discouraged about how things are going around in Washington.

BLITZER: That Ryan-Murray budget as you well know, that basically curtailed the sequester as it's called the forced spending cuts for the next two years, not for all of the next ten years, but you voted against it. You hated it to begin with?

PAUL: Well, the thing is, it's the only thing believable in Washington as about two years where the budgeting -- here. The sequester was a ten-year plan and we adhered it for two years. So, really, nothing in the out years is believable. In fact, I tell people in America, don't send your money to Washington. They're not good with money. They're not to be trusted.

So, try to keep the money in your states and in your cities and in your pocket but don't send it to Washington because they misspend it, misallocate it. We don't know where $100 billion is. We lost $100 billion last year and we can't find it. So, don't send money to Washington.

BLITZER: Two other issues before I let you go. You're ready to accept a compromise to extend unemployment benefits for at least three months for more than a million, maybe a million and a half workers out there, many of whom are in desperate need of that money?

PAUL: Yes. I'd like to give them jobs. And so, what I'd like to do is let's do something to create jobs. And so, I have an economic freedom zone package that would dramatically lower taxes in areas of high unemployment and areas of long-term unemployment and this would be going at the source of the problem instead of trying to put a Band- Aid on the problem.

The Band-Aids aren't working and they're trapping people in long-term unemployment and then employers don't want to hire the long-term unemployed. They want to hire the guy that's been out of work two months, not two years. So, we have to be careful about it.

Even though I know people's motives are correct, they want to do the right thing, they want to help people, but you don't want to trap people in an area where they can't get out from under long-term unemployment and they never go back into the workforce. That's really the wrong result.

BLITZER: Well, you have a long-term solution, but over the next three months -- three-month deal to help these people over the next three months and then you can start talking about these longer term issues, are you with those Republicans and Democrats who are ready to accept such a compromise?

PAUL: Well, I think the deal ought to be part of this. If we're going to extend unemployment benefits, I can vote for it if it's paid and if we do something good to create jobs. I'll give you another example. There's $2 trillion overseas. It won't come home because we tax it twice at 35 percent the second time.

Tax it at five percent, hundreds of billions of dollars will flow home creating jobs at home and that money will come from overseas. But why don't we do something good instead of just putting Band-Aids on things. Let's try to bring some of that money home and create jobs.

BLITZER: Sometimes you need a Band-Aid, though, as you well know. You probably have some Band-Aids in your medicine closet. You need those from time to stop the bleeding, shall we say. All right. Senator, thanks so much for joining us.

PAUL: Thank you.

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