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White House chief of staff Jacob Lew on State of the Union

Today on CNN's State of the Union with Candy Crowley, White House chief of staff Jacob Lew spoke about the controversy surrounding the administration’s contraception policy, payroll tax cut negotiations, the budget, unemployment numbers and Americans detained in Egypt. Highlighted excerpts are below, and a full transcript is after the jump.

Highlighted Excerpts

On the White House contraception policy

LEW:  You know, I have to tell you, as somebody who's done budgets for a lot of years, usually when people say to me that something doesn't cost money, I ask them, how could that be?  This is the exception to the rule.  If you priced two insurance plans, one of them with contraception and other without, the plan without contraception costs more than the one with it.  So this will not cost the insurance companies money.  It will not put religious institutions in a position (ph) where they have to violate their principles.

CROWLEY:  Why won't it?  Why - why is that?

LEW:  Because the total cost of care for persons is higher without than it is with contraception…

… CROWLEY:  As far as the White House is concerned, is this done?

(CROSSTALK)

LEW:  ... put out a pretty solid plan.

CROWLEY:  So no more compromising?

LEW:  We've put out the plan that reflects where the president intended to go.

CROWLEY:  So that means there is room for compromising or is not?

LEW:  No.  This is our plan.

On payroll tax cut negotiations

LEW:  I believe it should get solved.  And I know there are people working hard even this weekend trying to solve it.

On American hostages in Egypt

CROWLEY: What are you doing - I mean, as far as the administration is concerned, is it all right for the Egyptian government to be holding these Americans inside the country?

LEW:  Well, let's be clear.  The situation in Egypt is quite serious.  We have made clear we're having conversations - General Dempsey is there this weekend - that it's important to resolve this country to country.  But to compare this to the Iranian hostage crisis really does a disservice to those Americans in Iran who truly were held hostage.  This is a situation that can be resolved.  There's time to resolve it.  And our government is working very hard.

CROWLEY:  Are you close to getting them out of the country?

LEW:  I don't want to speak to where things are going, but all efforts are being made.

On the budget

LEW:  Unless Republicans are willing to work with Democrats in the Senate, Harry Reid is not going to be able to get a budget passed.  And I think he was reflecting the reality that that could be a challenge.  But let's be clear.  There's time and the desire to work together.  You know, we've put a lot of things out there, ranging from authority to reorganize the government so that we have a government that's the 21st century, not the 19th and the 20th century, home financing proposals so that Americans, Republicans and Democrats alike, can refinance homes that are underwater.  There's a lot that we can and should do together on a bipartisan basis this year

On unemployment

CROWLEY:  What's the economy going to look like in September?  What will the unemployment rate be?

LEW:  You know, we've been very heartened by the economic news of the last two, three months…. I can't predict that each month will be as good as the last few, but we're certainly headed in the right direction.  What we need to make sure is that we don't do anything to get in the way.  Washington needs to get its work done.  That's why the payroll tax needs to be extended on time without a lot of drama.  It's why we need to do our business in a way that doesn't create the kind of uncertainty that did harm to the economy over the summer.


Full Transcript

THIS IS A RUSH FDCH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CROWLEY:  Joining me here in Washington, White House chief of staff Jacob Lew.  Thanks for joining us.

LEW:  Good to be with you this morning.

CROWLEY:  I want to start out with what has roiled certainly some in the Catholic community, I know has really set (ph) the White House off in trying to get things situated, and that is this idea that Catholic universities, Catholic hospitals should have to pay for contraception for its employees as part of the health care plan.  The president comes back with a compromise and says, well, the health care insurance will contact the women in these facilities and offer contraceptive services, and the women can accept or not accept, and the health care - the health care provider, Aetna, whatever, will pay for it.  Is that where we are right now?

LEW:  Well, let me actually tell you where we are, Candy.  The president's had a consistent position throughout this.  He has two principles that are very important.  One is that all women have a right to all forms of (inaudible) health care, including contraception.  Secondly, in the greatest tradition of this country, we have to respect the religious liberties of people with very different views.

I think where this policy has come out is that the initial announcement of the policy said it would take some time to work through the details.  Because of the concern that arose, we speeded up the process.  And on Friday, what the president announced was we think a very good resolution of the problem.

It's gotten the support of a wide range of organizations, from Catholic charities and the Catholic Health Association to Planned Parenthood.  It respects both of these core principles, and we think it's a good solution.

CROWLEY:  Well, let me - it did not win the support of the U.S. Conference of Catholic Bishops, which put out a statement Friday and said today's proposal, being the compromise proposal, continues to involve needless government intrusion in the internal governance of religious institutions and to threaten government coercion of religious people and groups to violate their most deeply held convictions.  You're an observant Jew, I know.  Was there anything about this that made you think twice when it first went out?

LEW:  No, you know, I have to say that the solution that we came up with puts no religious institution in a position where it either has to pay for or facilitate the provision of benefits they find objectionable.  If the issue is, should women have access to all forms of preventive care, including contraception?  We believe the answer to that is yes.

CROWLEY:  Can you say, though, with a straight face that the insurance company is going to pick up the cost of this?

LEW:  You know, I have to tell you, as somebody who's done budgets for a lot of years, usually when people say to me that something doesn't cost money, I ask them, how could that be?  This is the exception to the rule.  If you priced two insurance plans, one of them with contraception and other without, the plan without contraception costs more than the one with it.  So this will not cost the insurance companies money.  It will not put religious institutions in a position (ph) where they have to violate their principles.

CROWLEY:  Why won't it?  Why - why is that?

LEW:  Because the total cost of care for persons is higher without than it is with contraception.

CROWLEY:  Then why isn't - why don't health insurance companies everywhere just offer free contraceptive services?

LEW:  I actually think there won't be as much resistance to this from insurance companies as people might think because of what I just said.  If you look to examples in other states where it's worked (ph), it's worked pretty much the way I've described.

There is an issue here.  The issue is, do women have a right to contraception?  And we think the answer is yes.  Should religious institutions have their sensibilities protected?  The answer is yes.

You know, I am a person of faith.  I care deeply that we're a country that respects faith and that respects people's rights to have different views.  This was a challenge to reconcile two important principles, and the president found a way to reconcile those.  There are others who don't have the same objective, and they have to speak for themselves.

CROWLEY:  As far as the White House is concerned, is this done?

(CROSSTALK)

LEW:  ... put out a pretty solid plan.

CROWLEY:  So no more compromising?

LEW:  We've put out the plan that reflects where the president intended to go.

CROWLEY:  So that means there is room for compromising or is not?

LEW:  No.  This is our plan.

CROWLEY:  OK.  Let me move you on to the payroll tax cut.  We're coming up to the end of the month.  How certain are you that Congress is going to pass a year-long extension of this payroll tax cut and the other things that come with it, the doc fix and unemployment insurance?

LEW:  You know, I think that it's clear that the economy is doing much better, but it needs to have that additional push that comes from this payroll tax.  We saw in December that it didn't work out so well to have a big, ugly fight over the payroll tax.  We can avoid that.  We have enough time for Congress to get its work done.

You know, we all care about having the economic growth and having unemployment go down and employment go up.  This payroll tax is important.  There are - this can be solved.  Congress needs to gets its work done.

CROWLEY:  And will it be solved (inaudible)

LEW:  I believe it should get solved.  And I know there are people working hard even this weekend trying to solve it.

CROWLEY:  Let me show you a recent ABC News poll about the president's handling of the federal budget deficit, and we will get to the budget, which we know is coming out tomorrow, in a bit.  But I want to ask you in general.  This poll shows that 38 percent of Americans approve of the way the president's handling the deficit, and 58 percent disapprove.  Why is that, do you think?

LEW:  You know, we've just come through one of the worst economic periods in modern history.  When the president took office, we were losing jobs at a rate of 750,000 a month.  We're now at a point where we're gaining jobs at a rate of 250,000 a month, so it's a swing of a million jobs from when we took office to now.

CROWLEY:  (inaudible) deficits specifically.

LEW:  In order to get to the point where we are, it has required us to do things that you wouldn't have done under other circumstances.  So the Recovery Act that did involve some spending, having federal programs that automatically kick in.  Revenues were down because economic growth was lower.  We share the concerns of the American people that we need to focus on the deficit, and we'll talk about the president's budget, which does $4 trillion of deficit reduction in a fair, balanced way, that asks everybody to do their fair share.

So we have a plan.  But it's not surprising to me that the American people are looking at the deficit today and saying they'd like some action now.

CROWLEY:  (inaudible)

LEW:  Yeah, we - we agree with them.

CROWLEY:  Let me - before we get to that - and it'll be after the break - let me ask you about Egypt.  Newt Gingrich said in a recent speech that there are Americans being held hostage in America.  We do know there are Americans are not being allowed to leave, because the Egyptian military government has said it may want to prosecute them.  He compared it to the Iranian hostage crisis.  What are you doing - I mean, as far as the administration is concerned, is it all right for the Egyptian government to be holding these Americans inside the country?

LEW:  Well, let's be clear.  The situation in Egypt is quite serious.  We have made clear we're having conversations - General Dempsey is there this weekend - that it's important to resolve this country to country.  But to compare this to the Iranian hostage crisis really does a disservice to those Americans in Iran who truly were held hostage.  This is a situation that can be resolved.  There's time to resolve it.  And our government is working very hard.

CROWLEY:  Are you close to getting them out of the country?

LEW:  I don't want to speak to where things are going, but all efforts are being made.

CROWLEY:  OK.  Coming up, more with White House chief of staff Jacob Lew.  And later, Rick Santorum got a rousing reception at CPAC, but lost the conservative straw poll vote to Mitt Romney.  We'll ask him why.

(COMMERCIAL BREAK)

CROWLEY:  We are back with White House chief of staff Jacob Lew.  I want to put up for our viewers what we know about some of the things that are coming out of this - the president's budget plan tomorrow, and that is $350 billion in short-term jobs spending, $476 billion in spending on infrastructure, $60 billion for schools and retaining teachers, first responders.  We just got finished talking about the deficit, and we saw the low numbers of the approval numbers for the president on dealing with the federal deficit.  This looks like another stimulus plan.

LEW:  Well, this is a budget that takes both a short- and a long-term view.  I think that there's broad agreement from all of the commissions that were out doing work on the budget to most budget experts that, over this next period of time, we still need to pay attention to sustaining economic growth and creating jobs.  That's why it's so important to pass the payroll tax before the end of February.  It's why it's so important that we jump-start our investment in infrastructure.

CROWLEY:  But isn't this a stimulus plan (inaudible)

(CROSSTALK)

LEW:  This is a budget that takes a look at the short and the long term.  Over the long term, there's $4 trillion of deficit reduction in this budget.  It comes by adhering to the rules that were part of the budget agreement last year, which was $1 trillion of savings in the annual appropriation.  It has another $1 trillion of savings that were part of the August debt agreement.  And then there's $2 trillion of additional savings on top of that.  This comes from very tough policies in almost every area, from mandatory programs to revenues.

CROWLEY:  It also comes from more spending, some of this funding.

LEW:  The savings come from the tough decisions.  The savings come from having a policy that's based on the principles that the president outlined in Kansas and that he outlined in the State of the Union.

CROWLEY:  What's the toughest cut (ph) of the whole thing?

LEW:  Oh, there are a lot of tough cuts, ranging from, you know, consolidating field offices and closing them down in places like the Agriculture Department to consolidating training programs to...

CROWLEY:  Do you think that sounds like a tough cut, you know consolidating agriculture departments?

LEW:  I think that when you look at $1 trillion of savings over 10 years, that's a lot of money; $1 trillion doesn't have to come by - you know, we have to make sure that as we make these reductions, we do it in a smart way.  So we cut some things, and we increase other things.

So, for example, while we're cutting the things that we can do without, we're increasing what we put in over this period of time into research and development, so we can build the economy of the future and make sure that we have an economy that can last.

CROWLEY:  Do you think it looks like a stimulus plan?

LEW:  No, I think it's exactly...

(CROSSTALK)

LEW:  I think most Americans understand that a crumbling infrastructure is not the way to build an economy that can last.  You know, we need to make sure that we have a manufacturing base in this country.  We need to make sure that we have American workers with the skills for the jobs of the future.  We need to make sure that we have an energy policy that will leave us in a place where we can generate our own energy and also not be dependent on overseas (ph).  And we also need to have a policy that's true to American values, and that means that everyone has to pay their fair share and have a fair shot.

CROWLEY:  I know we'll want to talk about the tax hikes in a second, but I want to read for our viewers something that Senator Harry Reid, the Democratic majority leader in the U.S. Senate, who said, we do not need to bring a budget to the floor this year.  It's done.  We don't need to do it, talking about last year's two-year agreement and saying that, you know, so it's already done.

This budget, I can assure you and you know, because you've been in this town for a long time, is going to be attacked as a political document.  This is a budget that promises 2 million more jobs if it's passed, so that come September the president can go out there and say, well, if they'd only passed by budget, we'd have 2 million more jobs, but those darn Republicans are standing in my way, when, in fact, even the Democratic leader in the Senate says, you know what, we don't need a budget.

LEW:  Well, let's be clear.  What Senator Reid is talking about is a fairly narrow point.  In order for the Senate to do its annual work on appropriation bills, they need to pass a certain piece of legislation which sets a limit.  They did that last year.  That's what he's talking about.

He's not saying that they shouldn't pass a budget.  But we also need to be honest.  You can't pass a budget in the Senate of the United States without 60 votes, and you can't get 60 votes without bipartisan support.  So unless Republicans...

(CROSSTALK)

LEW:  Unless Republicans are willing to work with Democrats in the Senate, Harry Reid is not going to be able to get a budget passed.  And I think he was reflecting the reality that that could be a challenge.  But let's be clear.  There's time and the desire to work together.  You know, we've put a lot of things out there, ranging from authority to reorganize the government so that we have a government that's the 21st century, not the 19th and the 20th century, home financing proposals so that Americans, Republicans and Democrats alike, can refinance homes that are underwater.  There's a lot that we can and should do together on a bipartisan basis this year (ph).

CROWLEY:  Last question.  What's the economy going to look like in September?  What will the unemployment rate be?

LEW:  You know, we've been very heartened by the economic news of the last two, three months.  It is...

CROWLEY:  (inaudible) keep falling?

LEW:  ... that unemployment has been falling.  Job growth is strong.

CROWLEY:  Do you think it will continue to fall and be lower in September than it is now?

LEW:  I can't predict that each month will be as good as the last few, but we're certainly headed in the right direction.  What we need to make sure is that we don't do anything to get in the way.  Washington needs to get its work done.  That's why the payroll tax needs to be extended on time without a lot of drama.  It's why we need to do our business in a way that doesn't create the kind of uncertainty that did harm to the economy over the summer.

CROWLEY:  White House chief of staff Jacob Lew, thanks for joining us.

LEW:  Good to be with you, Candy.

- END  -

Lew defends new contraception policy
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