"Face the Nation" transcripts, July 1, 2012: Speaker Boehner, Senators Schumer and Coburn, Governors Walker and O'Malley

(CBS News) Below is a rush transcript of "Face the Nation" on July 1, 2012, hosted by CBS News White House correspondent Norah O'Donnell in for Bob Schieffer. Guests include: House Speaker John Boehner; Senators Charles Schumer, D-N.Y., and Tom Coburn, R-Okla.; Wisconsin Governor Scott Walker; Maryland Governor Martin O'Malley; and a roundtable with Major Garrett, Jonathan Martin and CBS News' Jan Crawford and John Dickerson.

NORAH O'DONNELL: Today on FACE THE NATION, the Supreme Court upholds the President's signature health care law. The White House says the reforms are working but critics say the fight's just begun.

PRESIDENT BARACK OBAMA: It's time for us to move forward to implement and, where necessary, improve on this law.

MITT ROMNEY: If we want to get rid of Obamacare, we're going to have to replace President Obama.

NORAH O'DONNELL: We'll get reaction from the top Republican in the land, House Speaker John Boehner.

REPRESENTATIVE JOHN BOEHNER (House Speaker): This has to be ripped out by its roots. This is government taking over the entire health insurance industry. The American people do not want to go down this path.

NORAH O'DONNELL: And he says the House will push for repeal yet again.

REPRESENTATIVE JOHN BOEHNER: We will not flinch from our resolve to get-- to make sure this law is repealed in its entirety.

NORAH O'DONNELL: For reaction from both sides we'll hear from two top Senators Democrat Chuck Schumer and Republican budget hawk Tom Coburn. What does it mean for the states? We'll get the governors' perspective from Democrat Martin O'Malley of Maryland and Republican Scott Walker of Wisconsin. And how will the decision play out on the campaign trail? We'll ask our political round-table--John Harris of Politico, Major Garrett of National Journal and our own Jan Crawford and John Dickerson--the Supreme Court's ruling and what it means for you--

(Crowd Cheering)

NORAH O'DONNELL: --because this is FACE THE NATION.

ANNOUNCER: And now from CBS News in Washington, FACE THE NATION with Bob Schieffer, substituting for Bob Schieffer, CBS News chief White House correspondent Norah O'Donnell.

NORAH O'DONNELL: Good morning again.

The big news came this week when the Supreme Court decided to uphold the President's signature achievement, his Affordable Care Act, including its most controversial element, the individual mandate, which requires people to buy health insurance or pay a penalty. We're joined now by the speaker of the House, John Boehner. Mister Speaker, thank you for joining us.

REPRESENTATIVE JOHN BOEHNER (Speaker of The House): Good morning.

NORAH O'DONNELL: Were you surprised by the Supreme Court's decision?

REPRESENTATIVE JOHN BOEHNER: I was. The idea that the federal government can mandate that the American people purchase a product is shocking to me. But they made their-- their decision. I respect their ability to make that decision. But all it really does is strengthen my resolve and resolve of Republicans here in Washington to repeal this awful law, which is increasing the cost of health insurance for the American people and making it harder for small businesses to hire new workers.

NORAH O'DONNELL: The House has already voted some thirty times to repeal or defund this law. What's one more time going to do?

REPRESENTATIVE JOHN BOEHNER: And we're going to do it one more time.

NORAH O'DONNELL: What's the point?

REPRESENTATIVE JOHN BOEHNER: It's-- we want to show people we are resolved to get rid of this.

NORAH O'DONNELL: You don't think after thirty times they think you're resolved?

REPRESENTATIVE JOHN BOEHNER This law-- this law will bankrupt our nation and put the government in charge of everyone's health care. This is the wrong direction. And while the court upheld it as constitutional, they certainly didn't say that it was a good law. This-- this law is-- is making it much more difficult for workers to get jobs. It's raising the cost of health insurance for the American people. Republicans believe in a common-sense step-by-step approach that will lower health care cost and allow the American people to choose the health insurance they want, not the health insurance the government wants them to have.

NORAH O'DONNELL: Is there anything good in this law?

REPRESENTATIVE JOHN BOEHNER: Well, there's always going to be parts of it that are good. But when you look at the twenty-seven hundred pages that no one read and, uh, you know, remember Nancy Pelosi said, well, we have to pass this before we know what's in it. Republicans are not going to go down that path.

NORAH O'DONNELL: I asked ask you if there's anything good in it because I want to ask you about some of the specific provisions in the bill. Since you are going to be repealing it, are you willing to roll back the provisions that would provide free mammograms under Medicare?

REPRESENTATIVE JOHN BOEHNER: Listen, there are a lot of provisions that can be replaced. Remember, I said, we want to take a common-sense, step-by-step approach to replacing Obamacare.

NORAH O'DONNELL: Let's talk about what's specifically in this bill because there are a lot of protections for individuals.

REPRESENTATIVE JOHN BOEHNER: Of course, there are.

NORAH O'DONNELL: If you are under twenty-six years old, you are out of a job, you can stay on your parent's insurance. Do you support that?

REPRESENTATIVE JOHN BOEHNER: I do. And the health insurance industry has made that a practice within their industry.

NORAH O'DONNELL: What about it--

REPRESENTATIVE JOHN BOEHNER: They came out and made that statement a couple of weeks ago.

NORAH O'DONNELL: What about additional preventative care like for children, for instance, you don't have to pay a copay on immunizations?

REPRESENTATIVE JOHN BOEHNER: As I-- as I said Republicans believe in a common-sense, step-by-step approach to replacing this law. And all of those provisions, popular provisions, many of them very sound provisions can, in fact, be done in a common-sense way, but not in twenty-seven hundred pages that no one read.

NORAH O'DONNELL: What about preexisting conditions? What about the millions of Americans that have preexisting conditions and are discriminated against?

REPRESENTATIVE JOHN BOEHNER: We believe that the way it is done within Obamacare is-- is pushing the cost of health insurance for all Americans much too high. We believe that the state high-risk pools are a much more effective way to making sure that those with preexisting conditions have access to affordable health insurance.

NORAH O'DONNELL: But access to affordable health insurance, but you're not saying you would be for a law that would prevent discrimination of those individuals?

REPRESENTATIVE JOHN BOEHNER: No, we just believe there is a better way to make sure that they have affordable access to quality health insurance.

NORAH O'DONNELL: So when you repeal this, what are you going to replace it with?

REPRESENTATIVE JOHN BOEHNER: I just started pointing out. We're going take a common-sense, step-by-step approach that puts in place the kind of policies that will make our-- our health insurance system more what I call patient-centered and lower cost. The only proposal out there last year that would lower the cost of health insurance came from Republicans. Why? Because we've got policies that really will help bring down the cost of health insurance. It's clear that Obamacare is increasing the cost of health insurance for all Americans and making it virtually impossible for small employers to hire new workers.

NORAH O'DONNELL: How does it make it hard for small employers to hire more workers?

REPRESENTATIVE JOHN BOEHNER: Because they're being required to either provide health insurance or pay a fine. Well, I'm sorry, a tax. It's now a tax since the court said it was a tax.

NORAH O'DONNELL: Chief Justice John Roberts said it was a tax.

REPRESENTATIVE JOHN BOEHNER (overlapping): He-- even though, the President had tried to admit for, you know, over a year that it wasn't a tax and nobody believed it and now we know it. But it-- it's getting in the way of employers hiring new workers. Because of these increased costs of government-run health insurance and the fact that, if they don't, they have to provide a tax, so employers--

NORAH O'DONNELL (overlapping): The White House says for employers if you have twenty-five or fewer employees, you actually get a tax benefit. If you have fifty or fewer employers, you don't have to provide them health insurance. So how is that hurting small businesses?

REPRESENTATIVE JOHN BOEHNER: Well, when we talk about small businesses, under the-- the federal government's definition of small businesses, those five hundred and under. When you're talking about a lot of businesses, the majority of businesses in America would fall within that category and-- and-- and-- we're raising their cost to no end and what's going to happen is most Americans get their health insurance through their employer. Now, a lot of employers are just going to pay the tax and dump their employees into these health exchanges. Well, they are not going to be able to keep their health insurance that they have. Remember, the President said if you like your health insurance, you can keep it. It's not true.

NORAH O'DONNELL: But when I talked about some of the specific provisions, you said you want a common-sense approach. But why not be specific about exactly what kind of protections you want to provide individuals? You won't be specific. Why not say--

REPRESENTATIVE JOHN BOEHNER (overlapping): We-- we--

NORAH O'DONNELL: --you would prevent discrimination of--

REPRESENTATIVE JOHN BOEHNER (overlapping): We've outlined.

NORAH O'DONNELL: --preexisting conditions?

REPRESENTATIVE JOHN BOEHNER: We've outlined a number of provisions last year allowing employers to-- or-- the American people to buy insurance across state lines. Why wouldn't we allow small businesses to group together for the purchases of buying health insurance? Why wouldn't we deal with one of the big cost drivers in-- in health care and that is medical malpractice reform that results in almost one out of four tests being ordered by a doctor as unnecessary only to protect themselves from being sued? These are kinds of common-sense steps that we can take.

NORAH O'DONNELL: Why not, then, if you like some of the provisions in the Affordable Care Act, why not work with it rather than ap-- repeal the whole thing.

REPRESENTATIVE JOHN BOEHNER (overlapping): No, no, no.

NORAH O'DONNELL: Even Mitt Romney said--

REPRESENTATIVE JOHN BOEHNER (overlapping): No, this has to be-- this has to be ripped out by its roots. This is government taking over the entire health insurance industry. The American people do not want to go down this path. They do not want the government telling them what kind of insurance policy they have to buy and how much they're going to pay for it and if you don't like it, we're going to tax you. It has to be ripped out and we need to start over, one step at a time.

NORAH O'DONNELL (overlapping): And so you say so-- so-- so to heck with all these provisions like additional preventative care for children, for women--

REPRESENTATIVE JOHN BOEHNER (overlapping): All of them. All of-- we can-- we can replace. While we replace this, we can have a common-sense debate about which of these provisions ought to stay and which ought to go.

NORAH O'DONNELL: So all those people who have preexisting conditions, you say we're going to get rid of this and then at some point we'll deal with it?

REPRESENTATIVE JOHN BOEHNER: Listen, I've already outlined we believe there's a better way to provide access to high quality health insurance in a different way than we have in Obamacare. We believe ours will work just as well at much less cost to the American people.

NORAH O'DONNELL: It's clear you oppose the individual mandate and yet your Republican nominee Mitt Romney came up with an individual mandate and proposed a tax penalty in Massachusetts. Does he have a credibility problem?

REPRESENTATIVE JOHN BOEHNER: Listen, Governor Romney, just like all the rest of us Republicans in Washington, are going to work to repeal Obamacare and our resolve is stronger than ever with the passage or with the approval of the Supreme Court.

NORAH O'DONNELL: But he was for it before. Doesn't he have a credibility problem?

REPRESENTATIVE JOHN BOEHNER: Yeah, this is an issue that was in Massachusetts. That's in one state. That's why we have fifty different states. They are laboratories of democracy. Governor Romney understands that Obamacare will bankrupt our country and ruin the best health care delivery system in the world.

NORAH O'DONNELL: The facts are that the penalty in Massachusetts under Mitt Romney for not buying health insurance was twelve hundred dollars. The penalty under the President's health care law at its highest rate would be about seven hundred dollars. The Massachusetts tax penalty was more restrictive and more punitive than the President's.

REPRESENTATIVE JOHN BOEHNER: Listen, look, listen, Governor Romney believes, as I do, that this law has to be repealed. That this is--

NORAH O'DONNELL (overlapping): It doesn't matter what he did before?

REPRESENTATIVE JOHN BOEHNER: This is far-- this is far more than anything any state had ever comprehended or even tried to do. This-- this law is making health insurance more expensive, it's making it harder for employers to hire new workers and taking away from the American people their choice of the health insurance they want and the doctor they choose.

NORAH O'DONNELL: Do you think this is going to be an issue in this campaign?

REPRESENTATIVE JOHN BOEHNER: It certainly will be.

NORAH O'DONNELL: Why?

REPRESENTATIVE JOHN BOEHNER: Well, because that's what elections are for. You know when the President and I would have disagreement over the course of last summer, as we were trying to solve our debt crisis, we'd get to a dead end and the President would look at me and say, "John, that's what elections are for." Well, now we know that that's what this-- when it comes to Obamacare that's what elections are for.

NORAH O'DONNELL: But the truth is you say Mitt Romney would work to repeal this he says on day one. But don't you need a Republican Senate with a supermajority in order to get rid of it?

REPRESENTATIVE JOHN BOEHNER: We-- we-- we will not flinch from our resolve to get-- make sure this law is repealed in its entirety.

NORAH O'DONNELL: Let's turn now to another issue in this campaign which is, of course, government spending. You have attacked Obamacare as something that this government can't afford. Are you willing to go forward to the American people and say, you're not going to be able to enjoy the same kind of services you have in the past. We've got to cut those services as-- as part of shrinking the government?

REPRESENTATIVE JOHN BOEHNER: We clearly have a problem. This President's driven the debt up five trillion dollars in less than four years. We've got a sixteen-trillion-dollar national debt now. We have a 1.3-trillion-dollar budget deficit this year. You can't continue to spend money that you don't have. And I do believe that it's time to deal with this. I tried everything I could last year to work with the President to try to come to some agreement to begin the process of getting our debt under control.

NORAH O'DONNELL: But can you look people in the eye and say you are not going to enjoy the same services you had before?

REPRESENTATIVE JOHN BOEHNER: We've got to make changes to all of our programs, because if we don't they will not exist.

NORAH O'DONNELL: So people won't have the same kind of services.

REPRESENTATIVE JOHN BOEHNER: We've got to make adjustments to them. How we do it that's going to be the subject of a great debate as we get into this election cycle and as we get into the post-election cycle.

NORAH O'DONNELL: Let's turn to Fast and Furious. There was a House contempt vote. Do you expect that the Justice Department will bring suit against their own attorney general and when will you file a lawsuit in federal court?

REPRESENTATIVE JOHN BOEHNER: Well, we are going to go down both paths. It's not clear to me that the attorney-- the district-- U.S. district attorney will in fact, unless he recuses himself, will proceed down that path. That's why we're also going to also file in district court a civil suit over the issue of executive privilege.

NORAH O'DONNELL: When will that be?

REPRESENTATIVE JOHN BOEHNER: I would expect that would be coming in the next several weeks. But it needs to happen. The American people have a right to know what happened here. Brian Terry's family has a right to know what happened here and the fact is is that the only facts that we've received about this entire Fast and Furious operation came from whistleblowers and others associated with it. We got no information that helped in our investigation from the Justice Department at any point in this investigation. The American people deserve the truth.

NORAH O'DONNELL: Finally, you've said recently that you believe that you've got a two-thirds chance that Republicans will keep the House of Representatives. How does the Supreme Court ruling change that at all?

REPRESENTATIVE JOHN BOEHNER: Well, I let the pundits figure out the politics of this. When it comes to the Supreme Court ruling, I'm more concerned about the cost of health insurance for the American people and what it's doing at a time when the American people are asking where are the jobs? The pundits will figure it all out.

NORAH O'DONNELL: Mister Speaker, thank you.

REPRESENTATIVE JOHN BOEHNER: Thank you.

NORAH O'DONNELL: We'll be back in a minute.

(ANNOUNCEMENTS)

NORAH O'DONNELL: Joining me now, two top senators--Democrat Chuck Schumer who's in his home state of New York this morning; and Oklahoma Senator and medical doctor, Tom Coburn, author of The Debt Bomb: A Bold Plan to Stop Washington from Bankrupting America.

All right. Senator Schumer, you just heard Speaker Boehner say this needs to be ripped out from its roots. What's your reaction?

SENATOR CHUCK SCHUMER (D-New York): Well, you know, I think if Republicans make as their number one issue the repeal of health care they are certainly going to lose the election in the House, in the Senate, and the presidency. Bottom-line is most Americans are not for repeal. If you look at all the polls, a little more than a third are for repeal, the rest are either for keeping it or changing it but not repealing it. And some of those who are for changing it want to make it tougher. And that's-- there's good reason for that, as you pointed out in your interview with Speaker Boehner, there are a lots of things people like in the bill. The obvious ones like your kids can stay on your health care till they are twenty-six, the doughnut hole, prescription drug, payments for seniors.

But there are others that even Republicans like, surprisingly, subsidies for people who can't afford health care, requiring employers to provide health care. So the bill overall, people do not want repeal that's number one. Number two, Mitt Romney's in a total pickle here. He prescribed this. This was his bill. Speaker Boehner's saying it's a tax increase. They have some ads saying it's a tax increase. So they are going to say that Mitt Romney would have the biggest tax increase in Massachusetts? Forget about it.

But most important, Norah, and finally, the number one thing people want us to focus on is jobs, the economy, and increasing middle-class paychecks. The Republican Party's in a box, the Tea Party's pulling them over to just talk about repeal. That's number six or seven in the polls. The economy, jobs, middle-class paychecks--number one. The week we get back to Congress there's going to be a great contrast.

NORAH O'DONNELL: I see.

SENATOR CHUCK SCHUMER: They are going to vote on repeal of health care, litigating a battle that's been going on for four years and the American people want us to move on. And we are going to put on the floor a small business jobs tax cut. You get a ten percent tax credit for every new employee you hire or when you increase people's salaries.

NORAH O'DONNELL: All right. What about that, Senator Coburn? Do you want to throw this whole law out or is that a distraction from the main issue, the economy?

SENATOR TOM COBURN (R-Oklahoma): Well, I think-- I think it's extremely intertwined with the economy. And I think it's an example of where Washington doesn't get it. One of the reasons we don't have significant job creation is the federal government itself. We haven't created the confidence, we haven't created the certainty for those who could invest and create jobs and what we've done is put up roadblocks to that. Look, we're-- we're approaching the health care problem the wrong way. As a practicing physician for over twenty-five years, the one thing you want to do is fix the real disease, not the symptoms; and the Affordable Care Act fixed a lot of symptoms but not the disease and the disease is this health care costs too much? And with the Affordable Care Act it's going to cost a whole lot more. Now the estimates with the Supreme Court ruling is about 1.9 trillion dollars. We don't have that money; 1.9 trillion dollars more over the first ten years is fully in-- in place.

NORAH O'DONNELL: No, Senator--

SENATOR TOM COBURN: So--

NORAH O'DONNELL: --Coburn but doesn't that--

SENATOR TOM COBURN: --our country is essen--

NORAH O'DONNELL: --the CBO has scored this as not just deficit-neutral but actually saving taxpayers a hundred billion dollars.

SENATOR TOM COBURN: No that--

NORAH O'DONNELL: Correct?

SENATOR TOM COBURN: Well, that's true but-- that is not true. If you go look at their latest scoring, they-- they scored as a cost, they also scored as a costing tremendous in number of jobs and-- and the other thing they have not scored since the-- the Supreme Court ruling which is going to markedly increase the cost of the exchanges. So that's not accurate. This bill costs 1.6 trillion dollars minimum. It's going to cost more than that with the changes that the Supreme Court made in terms of the optionality of Medicaid for the states.

NORAH O'DONNELL: I know you--

SENATOR TOM COBURN: So the-- the-- the point is is that we ought to fix the problem, not the symptoms and you're hearing all this politics about it. What-- what we should have is real access and real care for people without a insurance company or the government between the patient and the physician. And we've not done that with this bill and-- and a lot of the programs that are out there today don't do it and we need to change health care in America but what we've done is making the problem worse, not better.

NORAH O'DONNELL: Well, let me ask you about something you said this week to your Eagle Daily Investor about what this plan does. Let's play a little bit of that tape.

SENATOR TOM COBURN: What we're trying to do with the Affordable Care Act is sovietize the American health care system. And I want to tell you, it didn't work out well for the soviet system.

NORAH O'DONNELL: What did you mean by that sovietize?

SENATOR TOM COBURN: Well, that means the bureaucrats and politicians are in charge of your health care. And that's exactly what this has done. There's not going to be individual choice. Remember-- remember the components of this bill. There's an iPad bill. There-- there is, in fact, the Preventive Services Task Force that is going to mandate what care will be given and what care won't be. There's the innovation council that will approve or disapprove of any new innovation. We have three agencies that are going to totally take away the options of your freedom about your care and what you and your physician decide is best for you. So it-- soviet sty-- the-- what I'm saying is--

NORAH O'DONNELL: And--

SENATOR TOM COBURN: --is you're going to have a bureaucracy. And I want to tell you, the bureaucracy at CMS didn't working. The bureaucracy in terms of HRSA didn't working. The government bureaucracies today is one of the reasons costs are out of control. They're not a reason that they're lower. They have actually raised the cost of health care.

NORAH O'DONNELL: All right. Senator Schumer, you know the Republicans say this is going to be a tax on individuals now and businesses.

SENATOR CHUCK SCHUMER: Yeah. Look, this is a penalty on free riders, when you talk about the mandate very simply. And what does that mean? It means that when someone who doesn't have health care shows up at a hospital or a doctor's office and needs treatment for an injury or an illness, who pays for it? The rest of us. The average family pays one thousand seventeen dollars more in health care cost to pay for those free riders and we say, yes, that they ought to pay a penalty and shouldn't be a free rider. It's the right thing to do. And let me just say this, Norah, it's lucky. There are very few of them. You know, you heard Speaker Boehner, Mitt Romney, ninety-five percent of Americans will be affected. One percent will be under this penalty because most other Americans, obviously, have health care.

NORAH O'DONNELL: One percent of individuals but what about one percent of small businesses?

SENATOR CHUCK SCHUMER: Well, as you said, small businesses under fifty don't have to provide health care. Those with under twenty-five employers get a subsidy to do it and those who are larger than that are going to find their costs going down and their bureaucracy going down once these exchanges take effect. And so, it'll be a good thing for everybody. Their-- you know, bottom line, health care was a mess, costs were going up. Everything-- people-- fewer people were covered, employers were kicking people, millions off the rolls. This is going to make it a whole lot better. It started to already and it's going to get a lot better in 2014 when the exchanges--basically free-market Republican idea which the President adopted in an effort to compromise--go into effect.

NORAH O'DONNELL: All right. Obviously, we got a lot more to talk about here what's next for health care and what about Mitt Romney's pledge to repeal it on his first day in office. We're going to be back in one minute with more of this conversation.

(ANNOUNCEMENTS)

NORAH O'DONNELL: And we're back with Senators Schumer and Coburn.

Senator Schumer, let me start with you. Mitt Romney says he is going to repeal this on day one of his presidency. Can he actually do that?

SENATOR CHUCK SCHUMER: No. And this is-- again, he's just making the wildest statements here that don't have basis in fact. The bottom line is that for states to put in-- to not do the health care plan, they'd have to put in an alternative plan that meets even better and stronger criteria. Most of the states that want to repeal it don't even want to go as far as the health care bill, so he is not. And the author of the provision that allowed people to opt out, Senator Wyden, who's done a great job on this area, has said specifically that Mitt Romney is totally wrong on this issue.

NORAH O'DONNELL: All right. Senator Coburn, let me ask you. Now that the Supreme Court has said this is a tax, does that make it easier if Republicans gain control of the Senate to dismantle this law?

SENATOR TOM COBURN: Well, I don't know if it makes it easier but it-- you know, we-- we've said it was a tax all along and-- and it is a-- actually a rather huge tax. I-- I want to go back to one thing about the exchanges. What Senator Schumer didn't inform you of is there's going to be subsidies in the exchanges. Where are we going to get the money for the subsidies for the exchanges? Where's that going to come from? Talking about growing our deficits.

The-- the fact is, look, we all want to solve the health care problem and we're missing one key point is we're not going to allow any market forces to actually work in this bill because we are controlling them. And-- and until we actually have market forces work where we put individual responsibility along with an insurance project on purchasing of health care, we're going to have indiscriminate use both by physician and patients. And until we correct that flaw, we're never going to control the costs and we're never going to be able to afford-- we can't afford-- remember, Medicare will be bankrupt in five years. I don't care what any politician in the country says. We're not going to be able to borrow the money for Medicare. We took five hundred billion dollars out of Medicare in this bill and we need to be solving those problems. And we can get-- we can create access for seniors--

NORAH O'DONNELL: All right.

SENATOR TOM COBURN: --that gives them just as good a care by not ruining the economy and borrowing more money from the Chinese.

NORAH O'DONNELL: All right. That's all the time we have. Senators Schuburn-- Schumer and Senator Coburn-- I almost molded those two names together.

SENATOR CHUCK SCHUMER: Yeah. That was--

NORAH O'DONNELL: Yeah.

SENATOR CHUCK SCHUMER: --very bipartisan, Norah.

NORAH O'DONNELL: A good--

SENATOR CHUCK SCHUMER: Very bipartisan.

NORAH O'DONNELL: --a good dis-- a good discussion this morning. We'll be back in a minute.

(ANNOUNCEMENTS)

NORAH O'DONNELL: Some of our stations are leaving us now. For most of you, we'll continue our discussion on the health care decision and Campaign 2012. Stay with us.

(ANNOUNCEMENTS)

NORAH O'DONNELL: Welcome back to FACE THE NATION.

We're now going to get the states' perspective on the Supreme Court's health care decision with Republican Governor Scott Walker of Wisconsin, who's joining us from Madison; and here in our studio with me, Democratic Government Martin O'Malley of Maryland.

Gentleman, let's cut right to this. The law now requires that the states set up a marketplace, otherwise, called an exchange for residents to buy this insurance. And many states, including Maryland, have already begun that process. Others like Wisconsin are waiting to-- to see-- well, waiting to see what the court decided. Governor Walker, let me ask you now, the ball is in your court, what are you going to do?

GOVERNOR SCOTT WALKER (R-Wisconsin): We're going to wait. We said all along that it was a legal step, that it was a political step, and then after each of those steps were exhausted we see what the future is holding. But very clearly the-- the court pointed out that the-- the law is upheld constitutionally, but it also pointed out very clearly it's a massive tax increase. That's what we've said all along. This is a tax increase and at a time when we're trying to help the private sector create more jobs in our state and across America. A massive tax increase is not the right answer. So my hope is for people whether it's in Wisconsin or anywhere else around the country who don't like Obamacare because of the tax increase, because of the impact in the economy and on the budget, now the only chance to repeal that is to put in place a new President, a new Senate majority, and to sustain the House majority and to ultimately repeal the law so that states like Wisconsin and others can push a free market alternative.

NORAH O'DONNELL: Governor O'Malley, is it a massive tax increase?

GOVERNOR MARTIN O'MALLEY (D-Maryland): That's the biggest falsehood being perpetuated by these unflinching ideologues that this is a massive tax increase. The massive so-called tax increase they're talking about is the freeloader penalty, which would affect at most one to two percent of people that could afford health care and instead want to be freeloaders on the rest of us with uncompensated care. We decided early on to be an early implementer of health care reform of Obamacare, because we know that's good for businesses. We know that that will allow businesses to invest money in expanding job creation, expanding middle-class opportunity, instead of, throwing it away on ever escalating health care costs.

In fact, Governor Walker also signed an executive order himself in 2011 before his ideological politics got in the way that would have had Wisconsin setting up the exchange, too. So, frankly, Norah, we think that we will have a competitive advantage on other states that are ruled by ideology when we engage in the hard work necessary to bring down health care costs.

NORAH O'DONNELL: What about that, Governor Walker? I mean, is that a specious argument--

GOVERNOR SCOTT WALKER: Yeah.

NORAH O'DONNELL: --that it's a massive tax increase when the CBO, the Nonpartisan Congressional Budget Office, has said that it-- that it will be a penalty on about one percent of Americans?

GOVERNOR SCOTT WALKER: Well, the CBO shows a number of things, not the least of which is Medicaid is one of the biggest drivers of any state budget, Wisconsin, Maryland, or anywhere else. And they show on top of the normal increase that we would get all too often without adequate funding from the federal government. That you're going to have almost three-percent increase in terms of cost to the states in the eight years when Obamacare is fully enacted from 2014 on. So, for starters, the CBO shows that it's going to be a cost increase to taxpayers at the state level not just at the federal level. But the other part is the practicality is it's-- yes, it is a tax increase, that's the whole reason why the law was upheld. For those who claim victory they have to acknowledge that it wasn't upheld because of the Commerce Clause, it was upheld because of the tax increase that's included in the measure itself. But take, for example, Wisconsin. Wisconsin, Governor O'Malley is right, we looked at this, we looked at the opportunity and then we looked at the facts and the facts showed by the same firm that my predecessor or Democrat have employed the facts showed us in Wisconsin, in our case, the majority of people in our state after Obamacare is fully implemented will actually pay higher costs for less benefits than they got before. That's not a practical reality for the people of Wisconsin. That's not a benefit for them. That's certainly not good for the economy. And I think for people here in Wisconsin and plenty of other states across the country, we want to put the power back in the hands of the people at the state and the local level not be driven by a federal mandate.

NORAH O'DONNELL: Well, let me just challenge on that, Governor Walker. Your Republican nominee--

GOVERNOR SCOTT WALKER: Mm-Hm.

NORAH O'DONNELL: --for President Mitt Romney put in place an individual mandate in Massachusetts. As part of that he also imposed a tax penalty to encourage people--

GOVERNOR SCOTT WALKER: Mm-Hm.

NORAH O'DONNELL: --to buy insurance, to comply with the law. Does that raise some questions about Mitt Romney's credibility on this issue?

GOVERNOR SCOTT WALKER: No. I think what he shows is, as a former governor, he understands that the best place to tackle these issues is the state level and he understands you learn from the lessons of other states. In the case of Wisconsin, we learned looking at-- at that state, Massachusetts is a good example. We even learned from one what we found from our actuarial assessment that we did early this past year--

NORAH O'DONNELL: Would you ever put in place--

GOVERNOR SCOTT WALKER: --that that was not a good measure for the state of Wisconsin.

NORAH O'DONNELL: --an individual mandate?

GOVERNOR SCOTT WALKER: No. In our case we think there's two extremes, that the government mandate that you have under Obamacare ultimately the only way you control health care costs, not today but in the future, the ultimate way that would end up leading towards is rationing of health care. I don't think that's a good decision. On the other end--

NORAH O'DONNELL: Mm-Hm.

GOVERNOR SCOTT WALKER: --I and plenty of other governors would like to go down the path of a free market-driven solution that actually engages me and every other consumer of health care in being a more active participant in controlling our health, not just our health care costs.

NORAH O'DONNELL: What about that?

GOVERNOR SCOTT WALKER: What we do to control diabetes and health care and other issues like that.

NORAH O'DONNELL: What about that, Governor O'Malley, that Mitt Romney instituted an individual mandate, including a tax penalty in his state?

GOVERNOR MARTIN O'MALLEY: Well, I think the reason-- I think the reason why he did that was because he saw that the free market solution wasn't working. Let's be honest here. The so-called free market solution during the decade of George Bush led to us parting with seventeen percent of our GDP to rising health care costs. That's more than we-- we pay in taxes. It led to a hundred and thirteen percent increase for businesses in their health care costs. So the reason why Governor Romney did that before he had to twist himself into an ideological pretzel to satisfy the Tea Party wing that's running their party is because he saw that it would be better for businesses and, in fact, you know what it was. Seventy-seven percent rather than seventy percent of businesses now cover their employee's health care costs.

GOVERNOR MARTIN O'MALLEY: He saw Massachusetts actually bring down unemployment at a faster rate even after the freeloader penalty kicked in at that state level. So these-- these fears that this horrible thing is a massive increase in taxes are absolutely false. I will agree with one thing that Scott said and that is that we need to do a better job on wellness. And that's what Obamacare does. It moves us from a disease-based system that's with ever-escalating costs to one where good companies like United Healthcare are hiring more people to do the wellness, to do the prevention, and these are the things covered by Obamacare makes sense in terms of reducing costs and also increasing the-- our ability to invest in an economy that lasts.

NORAH O'DONNELL: I want to return to this question though about Governor Romney, Governor Walker, who proposed this. You have advocated even on this show in the past that-- that Mitt Romney should be more bold. Should he be bold and come out and say what his alternative is on health care?

GOVERNOR SCOTT WALKER: Well, he's talked about repealing-- giving the powers to the states. I mean Massachusetts, Maryland, Wisconsin, are all very different places. In our case, as I mentioned, under Obamacare a majority of peoples, as the data shows, from an actuarial assessment, not just some number we picked out of thin air, majority of people in our state will pay more for less benefits. That's not a good deal under the federal mandate, under this federal not just tax increase but this federal mandate issue out there. For us if we ultimately--

NORAH O'DONNELL: Replace--

GOVERNOR SCOTT WALKER: --want to go down--

NORAH O'DONNELL: --I'm confused about--

GOVERNOR SCOTT WALKER: --the path and I-- I--

NORAH O'DONNELL: --what about replace it with what?

GOVERNOR SCOTT WALKER: --and I--

NORAH O'DONNELL: What specifics? Would you support a federal law--

GOVERNOR SCOTT WALKER: --I-- I support--

NORAH O'DONNELL: --that prevented discrimination--

GOVERNOR SCOTT WALKER: --first--

NORAH O'DONNELL: --for those with preexisting conditions?

GOVERNOR SCOTT WALKER: Well, I think some of those issues could be addressed federally. Some of those should be addressed at the state level. First thing I did as governor was sign into law, repeal the state tax and health savings accounts, that was one of things that gave small businesses and farmers in my state one more option out there. I think this should be more done for transparency. I agree with Governor O'Malley when we talk about the need to have greater wellness. I think the way you get there though is by getting people more engaged and I think there's been a problem in the past with a very limited free market solution. There's been a-- certainly a problem in the future in 2014 and on, when Obamacare's fully implemented. In each of those cases the average consumer really doesn't know what they're doing when it comes to health care. And I point out all the time people get out there-- their cell phones or their iPhones, most Americans know more about their cell phone coverage, heck, I know as the-- the father of two teenagers. If I don't have unlimited texting, I'm going to be in the poorhouse and yet most Americans don't know what's covered under their health insurance or their health care coverage and they won't likely in the future under Obamacare. We need a system that's more transparent so you are actively involved in those health care decisions.

NORAH O'DONNELL: Governor O'Malley, that message from Republicans and certainly a lot of the Tea Party anger after the President's Affordable Care Act was passed, led to Democrats losing a lot of seats in the House and in governorships. Should Democrats campaign on this, this year or talk about something else?

GOVERNOR MARTIN O'MALLEY: Well, I think we need to do a better job of doing as a party, Norah, is emphasizing the fact that we cannot build an economy that lasts. An economy that's creating jobs and expanding middle class opportunities if we are every year throwing away more and more money on ever more expensive health care for fewer and fewer people with worse and worse outcomes. So what we have an opportunity to do now that the Supreme Court has affirmed Obamacare is to show that this will allow us actually to reduce the rising costs of health care. In fact, since passage last year, we've seen premium costs, the-- the rate of growth has actually declined, not increase.

NORAH O'DONNELL: So you're advocating that Democrats should campaign on it?

GOVERNOR MARTIN O'MALLEY: I think we should tie it to the fact that we need to create jobs and expand opportunity. And one of the key things that kept us from being economically competitive was that instead of businesses being able to invest in job creation and plant upgrades, they had to just throw away more and more money on rising health care costs. That's why in Maryland we chose to be an early implementer. That's why we have an exchange that's up and going. And that's why we're going to have an economic competitive advantage over other states that decide to put their head in the sand and pretend that this isn't a problem.

NORAH O'DONNELL: Finally Governor Walker, what you did in Wisconsin, reining in public unions, you've said should be a model for the nation. Why then shouldn't what Governor Romney did with an individual in Massachusetts, why should that not be a model for the nation?

GOVERNOR SCOTT WALKER: Well, I think, again, we should learn from it and the case here is simple. That-- that ultimately the thing I do agree with Governor O'Malley on is the fact that, one, we should have this be a key part of the debate come November and two, that it is about jobs, particularly about small businesses growing in each of our states and around the country. I just think people-- voters need to look at it logically and say looking to the future which do you think is more likely to drive down health care costs and make our states and our jobs more competitive having something driven by the government in terms of the mandate or having something that opens up the door so that all of us as consumers play a much more active role of having skin in the game when it comes to health care. I think the latter is the more appropriate approach. I think that's the approach that will ultimately create lower costs--

NORAH O'DONNELL: Mm.

GOVERNOR SCOTT WALKER: --a better environment for creating jobs and will be better for America as well as each of our states.

NORAH O'DONNELL: All right. Governors, thank you. It appears the fight goes on even though the Supreme Court has decided. Thanks so much.

We'll be back in a minute with our political round-table.

(ANNOUNCEMENTS)

NORAH O'DONNELL: And now for some perspective on all of this, we turn to our political round-table--Major Garrett of National Journal, John Harris of Politico, CBS's legal and political correspondent Jan Crawford, and our political director John Dickerson.

And we're going to start first with Jan because you've done some reporting. The big question was why did Chief Justice John Roberts do what he did? And you've learned some new details, right?

JAN CRAWFORD (CBS News Legal Correspondent): Well, that's right. I mean what was striking about this decision was that it was the conservative chief justice who was providing that decisive fifth vote, joining the liberals to uphold the President's signature achievement. And, Norah, that was something that no one would have expected back in 2005 when President George W. Bush put him on the Supreme Court and that was something that not even the conservative justices expected back in March when the court heard arguments in this case. I am told by two sources with specific knowledge of the court's deliberations that Roberts initially sided with the conservatives in this case and was prepared to strike down the heart of this law, the so-called individual mandate, of course, that requires all Americans to buy insurance or pay a penalty. But Roberts, I'm told by my sources, changed his views deciding to instead join with the liberals. And he withstood--I'm told by my sources--a month-long desperate campaign by the conservative justices to bring him back to the fold and that campaign was led, ironically, by Justice Anthony Kennedy and why that's ironic is because it was Justice Kennedy that conservatives feared would be the one most likely to defect but their effort, of course, was unsuccessful, Roberts did not budge, the conservatives wrote that astonishing joint dissent united in opposition and Roberts wrote the majority opinion with the four liberals to uphold the President's signature achievement.

NORAH O'DONNELL: Has there been anything like this on the court before? I mean that's extraordinary that the chief justice, according to your reporting, about a month ago decided to do this and then was lobbied unsuccessfully.

JAN CRAWFORD: Yes, that has happened before and often in high-profile controversial cases, including Justice Kennedy who's changed his views in a very high-profile case involving a woman's right to an abortion back in 1992 and justices do change their mind. There is precedent for that. One justice told me that surprisingly enough it happens about once a term. But in a case of this magnitude with so much on the line conservatives believed they were-- they had Roberts' vote in this case and there's quite a lot of anger within the hallways of the Supreme Court right now.

NORAH O'DONNELL: Very interesting. Let's turn now to the politics of this and how it will play out. Major, you've done some reporting, I mean, do the Democrats-- does this White House want to campaign on this now? I mean they won this victory in the Supreme Court, but are they going to use it out on the campaign trail?

MAJOR GARRETT (National Journal): They will in a couple of contexts. David Plouffe has told Democrats that one thing that they learned from all their focus groups in the course of this campaign is that most swing voters are very numbed and fatigued by the health care debate. And so what they wanted is a-- is a resolution from the Supreme Court and then the first question they would ask themselves is does this affect me, my policy, my family? Oh, it doesn't? Let's get on with the campaign and let me get back to my life. And so that's the Obama campaign's approach to this. Leverage it a little bit. David Axelrod believes it can help the President recapture a bit of that changed dynamic that was so powerful in 2008, so he was the change agent. He has changed the country. He has taken big risks and if you're motivated by that, come along for the ride. But will it be front and center? Absolutely not, front and center will be, of course, we all know, the economy.

NORAH O'DONNELL: And John Dickerson, what about that for the Romney team, will they use it?

JOHN DICKERSON: Well, Romney does have an opening. You know if you think about this decision we've had these storms here in Washington, a neighbor of mine, a tree fell in his yard, just missed his car. Car is okay, but still has a tree in the yard and that's the way it is for the President--ducked the disaster but still has a bill that people don't like. Thirty percent of the country before this decision did not like the bill and Mitt Romney is benefiting from that. He's taking advantage of that. So he's raised over five million dollars after this decision and he's also been able to consolidate his conservatives and his Tea Party behind him. That was already happening but it's really happening now and also small business people. When you hear Governor Romney talk about this, he says it's a job killer, they hate this health care bill, but Governor Romney does have liabilities because of his Massachusetts experience.

NORAH O'DONNELL: And on that very point Governor Romney back in 2009--I want to just put this up on the screen--I mean he talked about the individual mandate and the tax penalty he used in Massachusetts saying, "using tax penalties, as we did, or tax credits, as others have proposed, encourages 'free riders' to take responsibility for themselves rather than pass their medical costs on to others."

So, John, does, I mean he was for a tax penalty that in fact was more punitive than the tax penalty under the President's Affordable CARE Act.

JOHN DICKERSON: If you will remember in the primaries Rick Santorum said, you know, the problem with nominating Governor Romney is he won't be able to take the fight to the President on this question of health care because of the liabilities in his past. So in your interview with John Boehner he's saying this tax that allows the individual mandate to happen, boy, that's terrible, it's a fatal flaw. But then you have Mitt Romney here in his past with these statements--not saying it's a fatal flaw--saying that it is in keeping with this Republican notion of personal responsibility that's a conflict, it's going to make it hard to use this to beat up the President.

NORAH O'DONNELL: Yeah, how do you see it, John? I mean, they are, you know, each of them is I think in some ways want to move on to the discussion about the economy and jobs.

JOHN HARRIS (Politico): I think they're not the only ones that move on-- want to move on. This election is going to be decided by a fairly narrow slice of swing voters. We're a highly polarized country. That means most people would know how they're going to vote right now and there's no chance of swinging them. There is a middle out there. It's a disaffected middle that is sour on politics and I think, increasingly sour with the choices that they face in this campaign. I think that group is desperate for a forward-looking argument. Tell me about the future and how you would make it better. The thing about this health care debate is it's almost by definition a backward-looking argument. Let's debate what we, uh, uh, tried to legislate and ultimately pass in 2009 and 2010. That's not the debate that people want. They want a forward looking debate.

NORAH O'DONNELL: Another big issue out on the campaign trail is the attacks that the Obama team has made on Bain Capital and Mitt Romney's record as a businessman. We saw this week it kind of got overshadowed by the-- the focus on health care. Joe Biden launched this tough attack this week. Let's listen.

JOE BIDEN: Look, folks, we need to choose between a commander who can be commander in chief, not outsourcer in chief. We need someone who creates jobs in Davenport and Dubuque and Pittsburgh and Toledo, not Singapore, South Korea, and Shanghai.

NORAH O'DONNELL: And, Major, you saw the Romney team, um, even go to the Washington Post--

MAJOR GARRETT: Yes.

NORAH O'DONNELL: --to ask them to retract a story that sort of started this where they, um, put forward some reporting about how Bain had led to some offshoring--

MAJOR GARRETT: Right.

NORAH O'DONNELL:-- of--of jobs. If you--I mean, do you--is it having an effect? Is the Obama campaigns focused on this working?

MAJOR GARRETT: Writ large it is. And it's not just Bain, it's outsourcing, offshoring. And we can have a debate about what the difference is between that.

NORAH O'DONNELL: Yeah.

MAJOR GARRETT: The Obama campaign believes people will comingle them together. They will hear offshoring and think outsourcing where the bottom line is--

NORAH O'DONNELL: Mm-hmm.

MAJOR GARRETT:--they are focus group (INDISTINCT) for an opposition party that wants to put someone in a box intellectually and politically and they believe they have put Romney in a box. And the overarching theme for the Obama campaign for Romney is take everything he will assert about his ability to create jobs and take it away from him, bit by bit by bit. Not all in one fell swoop but over time. And they believe this last month a lot of people in Washington think it's been a terrible month for the President. They look at swing state favorability ratings for the Romney campaign moving in the negative direction. They've been-- they believe they've been more successful than has been properly received or interpreted.

NORAH O'DONNELL: So, Jan, you covered the Romney campaign, how are they going to respond to these attacks about his business records?

JAN CRAWFORD: Well, I mean the Romney campaign believed from the beginning that this was going to be a brutally negative campaign. They knew that they were going to come under enormous assault for everything that Mitt Romney has done whether in the-- the private sector or as governor because they believe that the President has no record to run on himself, nothing to point to his own accomplishments. And so, that is going to be and they believe their job, to talk about what the President has done and how, as they put it, he has failed on the economy and that's going to be their message to continue saying that the President has failed on the economy and, in fact, he wasn't this great change agent, that he's just another career politician and it's business as usual when Americans want something different and new.

NORAH O'DONNELL: Ands what about they're going to do some new focus on the career politician and stuff?

JOHN DICKERSON: Well, if you look at these polls and, as Major said, in the states you see Governor Romney's unfavorable numbers going up. Well, the Romney campaign is going to return fire on this question of favorability with the President. There's something keeping the President aloft. Bad economy, people think the country is going in the wrong direction. They think the President has been a bad steward on the economy and yet in head-to-head polls with Mitt Romney he does well. He beats him. And his approval number, while below fifty percent danger zone for any President, is not in the really bad place. What's holding him up? What's allowing him to defy gravity? It's that people like this President. This attack on him being a career politician goes right at that trying to make him unfavorable, make people think less highly of him.

NORAH O'DONNELL: And, John Harris, do you think we will be talking more about Bain Capital or health care come October?

JOHN HARRIS: That will be a kind of a sour election, frankly, to be drag, if either one of them is still dominating four or five months from now. Again, this idea of a backward-looking campaign. I don't think that the Obama campaign even intends for us to be talking about Bain Capital--

NORAH O'DONNELL (overlapping): Yeah.

JOHN HARRIS: --then. What they're trying to do is build a narrative, as Major said, systematic demolition of Mitt Romney's image and so this is just part of a narrative. I think what they're trying to say is, look, that his values in Bain Capital would reflect his values of how he'll govern and probably that will be the argument in October.

NORAH O'DONNELL (overlapping): And-- like I agree and that will set up then the narrative about what they're going to do for the future come the debate time in October. Great round-table. Thanks to all of you, great reporting.

We'll be back in a minute with our FACE THE NATION Flashback.

(ANNOUNCEMENTS)

NORAH O'DONNELL: Back in 2007 when presidential candidate Barack Obama made health care reform one of his key campaign promises, many thought it would never happen. But more than five years later the President's Affordable Care Act has survived a nasty political fight, ending with a stamp of approval from the Supreme Court. Well, the history of the battle over health care reform is this week's FACE THE NATION Flashback.

PRESIDENT BARACK OBAMA: The time has come for universal health care in America.

(Applause)

PRESIDENT BARACK OBAMA (February 24, 2009): Health care reform cannot wait, it must not wait, and it will not wait another year.

(Applause)

REPRESENTATIVE JOHN BOEHNER (July 30, 2009): Throwing the current system under the bus and replacing it with this giant government bureaucracy is not what I want. It's not what the American people want.

MAN: Now, wait a minute. Now, wait a minute.

PRESIDENT BARACK OBAMA (October 5, 2009): We have now been debating this issue of health insurance reform for months.

REPRESENTATIVE NANCY PELOSI (October 29, 2009): We are putting forth a bill that reflects our best values and addresses our greatest challenges.

CROWD (in unison): Kill the bill. Kill the bill.

SENATOR MITCH MCCONNELL (December 13, 2009): The core problem is the American people do not want us to pass it.

SENATOR LAMAR ALEXANDER (February 25, 2010): We-- we have to start by taking the current bill and putting it on the shelf and starting from a clean sheet of paper.

JOE BIDEN (March 21, 2010): The Patient Protection and Affordable Care Act is passed.

PRESIDENT BARACK OBAMA: We're done.

(Applause)

SCOTT PELLEY: President Obama's health care law is headed to the Supreme Court.

CROWD (in unison): Hey-- hey, ho, ho. Obamacare is (INDISTINCT).

JAN CRAWFORD (Thursday): The Chief Justice has joined with four of the court's liberals to uphold the mandate.

CROWD (in unison): Yes, we can. Yes, we can.

MITT ROMNEY: We must replace Obamacare.

PRESIDENT BARACK OBAMA: It's time for us to move forward.

NORAH O'DONNELL: While the legal battle may be over, as we've heard from today's guests, the political fight is heating up all over again. This week's FACE THE NATION Flashback.

(ANNOUNCEMENTS)

NORAH O'DONNELL: That's it for this week. Thank you for watching FACE THE NATION. Bob Schieffer will be back next Sunday. I'm Norah O'Donnell