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BAIER: Monday in Ohio, you called for courage in the health care debate. At the same time, House Speaker Pelosi was saying this to reporters about the deem and pass rule: "I like it, this scenario, because people don't have to vote on the Senate bill." Is that the kind of courage that you're talking about?

OBAMA: Well, here's what's taking place — we both know what's going on. You've got a Senate bill that was passed, that had provisions that needed to be changed. Right? People were concerned about, for example, the fix that only fixed Nebraska, and didn't fix the rest of the states.

Now, a lot of the members of the House legitimately say, we want to vote on a package, as the president has proposed, that has those fixes embedded in it. Now that may mean they have to sequence the votes. But the ultimate vote they're taking is on whether or not they believe in the proposal that I put forward, to make sure that insurance reform is fixed, to make sure the deficits are reduced, and premiums go down, and small businesses are helped. That's what they're concerned about.

BAIER: Do you know which specific deals are in or out, as of today?

OBAMA: I am certain that we've made sure, for example, that any burdens on states are alleviated, when it comes to what they're going to have to chip in to make sure that we're giving subsidies to small businesses, and subsidies to individuals, for example.

BAIER: So the Connecticut deal is still in?

OBAMA: So that's not — that's not going to be something that is going to be in this final package. I think the same is true on all of these provisions. I'll give you some exceptions though.

Something that was called a special deal was for Louisiana. It was said that there were billions — millions of dollars going to Louisiana, this was a special deal. Well, in fact, that provision, which I think should remain in, said that if a state has been affected by a natural catastrophe, that has created a special health care emergency in that state, they should get help. Louisiana, obviously, went through Katrina, and they're still trying to deal with the enormous challenges that were faced because of that.

(CROSS TALK)

OBAMA: That also — I'm giving you an example of one that I consider important. It also affects Hawaii, which went through an earthquake. So that's not just a Louisiana provision. That is a provision that affects every state that is going through a natural catastrophe.

Now I have said that there are certain provisions, like this Nebraska one, that don't make sense. And they needed to be out. And we have removed those. So, at the end of the day, what people are going to be able to say is that this legislation is going to be providing help to small businesses and individuals, across the board, in an even handed way, and providing people relief from a status quo that's just not working.

BAIER: OK, the Florida deal, in or out?

OBAMA: The Florida deal —

BAIER: Paying for Medicare Advantage, exempting 800,000 Floridians from —

OBAMA: My understanding is that whatever is going to be done on Medicare is going to apply across the board to all states.

BAIER: Connecticut, Montana — there are a lot of deals in here, Mr. President, that people have issues about.

OBAMA: Bret, the core of this bill is going to be affecting every American family. If you have insurance, you're going to be able to keep it. If you don't have insurance, you're going to be able to buy into a pool, like members of Congress have. We're going to make sure that we have delivery system reforms that strengthen Medicare, that are going to make sure that doctors and hospitals are providing better service and better care, and this is going to reduce the deficit.

Now, there are going to be in this, as I just mentioned, on things like making sure that states who have gone through natural catastrophes and medical emergencies are getting help, but those are not going to ones that are driven by politics, they're going to be driven policy.

BAIER: Couple more process things, quickly.

You said a few times as Senator Obama that if a president has to eke out a victory of 50 plus one, that on something as important as health care, "you can't govern." But now you're embracing a 50 plus one reconciliation process in the Senate, so do you feel like you can govern after this?

OBAMA: Well, Bret, the — I think what we've seen during the course of this year is that we have come up with a bill that basically tracks the recommendations of Tom Daschle, former Democratic senator and leader, but also Bob Dole, former Republican leader, Howard Baker, former Republican leader. The ideas embodied in this legislation are not left, they're not right, they are — they are —

BAIER: I understand what you're — I know you don't like to talk about process, but there are a lot of questions in these 18,000 that talk about process.

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