>> rose: welcome to the broadcast. tonight a look at health-care reform legislation from two perspectives. we begin with the man in charge of finding the votes to pass reform in the house, congressman james clyburn, the democratic whip. >> what we will be doing with this legislation is getting rid of all those special deals, fixing that, and then we are bringing in some of the other reforms that the president wanted to see us do to contain costs. and that's why you see thisçó great number coming from the congressional budget office that everybody is so happy about. >> rose: and we continue with the leading critic of the reform bill, congressman paul ryan, republican from wisconsin. >> the process matters a lot. because what it shows you is the hypocrisy. promise of a transparency, promise of open government,ñi promise of bipartisanship, none of that is occurring. and instead what you have here is the pursuit of an ideaological agenda at a time when people want to see problemsñ$r solved. >> rose: we conclude with ken feinberg appointed by president obama to oversee executive compensation. >> one thing i've learned in this job, compensation is not simply about material greed, or i want another home, or another automobile or another vacation. compensation in our society is sort of a surrogate for worth. relative self-worth. mr. feinberg, why are you paying me this when my next-door neighbor is getting that. and it becomes very emotional because it's not simply the bank account andñr paying the mortgage.çó >> rose: clyburn, ryan,@$h(tìáhp >> funding forñ has been provided by the following: ♪ if you've had a coke in the last 20 years, ( screams ) you've had a hand in giving college scholarships... and support to thousands of our nation's... most promising students. ♪ ( coca-cola 5-note mnemonic ) captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: democrats on capitol hill today received a boost in their efforts to overhaul the nation's health-care system. the congressional budget office estimated that the democrats plan would cut the deficit by over a trillion dollars over the next two decades. the estimate clears the house of representatives to a vote on the bill as soon as sunday. president obama postponed his trip to the pacific again to make a final push for the bill. joining me now from washington is the man in charge of finding the 216 votes needed to pass the he is congressman james clyburn of south carolina, the democratic whip. i'm pleased to have him back on this program, welcome. >> thank you. >> rose: has this been as busy a week as you've ever had in the congressñr in. >> i think so,çó without a doubt. the days are long and they're quite full ofñr activity. it's been a very enjoyable experience, though. i am enjoying it. >> rose: now did you say that you wereçó dô giddy about the cbo report? >> well, you know, i think i did use that word. i am very excited, i guess would be the better word about thisment because when you are waiting with bated breath trying to determine exactly what you will need to do to try to get the 216 on a bill like this and all of a sudden you get this number, 130 billion dollars in the first ten years,ñi 1.2 years, that is music to my ears. it's exactly what we had hoped for. but i tell you, very few of us thought it would be this good. >> rose: so what do you think happened? >> well, i think what happened is that we did a lot of deliberating. i think the president when he sat down with the house and senate leadership and he p always had in his m] there must beác containments. we've got to contribute to deficit reduction. and on top of all that, is the fact that we started out covering $31 million additinlal people and cbo comes back andñvmays you do it this way, you will coverñr 32 million additional people. and you will make medicare solvent for the next nine years. that is absolutely great news. you can't argue with that at all. >> rose: well, you knowñè!at the republicans are saying,c i'm reading from the committee on the budget republican caucus. they are saying that you want to use medicare as a piggy bank, over half a trillion in medicare cuts to create a new entitlement. >> what we are trying to do is make medicare solvent for our seniors going forward.ñr and we do that by making tremendous adjustments in all of these provider pays, reimbursementsñr for providers. we have seen all of the -- did shows i i this i you have done them about the fraud in the system. we are seeing a lot of tv magazines that are making people very, very up set with what is in the system. we are putting in place processes by which we will squeeze all of that fraud and abuse out of the system. we won't be taking one dime out of the benefits of medicare. onlyñi out of the provider side. >> rose: does this cbo report close the dealñi for you to get to 216. >> i think so. i really believe that the people who were very leary about what this would do to the country's debt and deficit are very pleased with this. it makes it easier. as well as on the progressive side, they wanted more people covered. and we'll be almost doubling the size of the community health centres. and i will say something else, charlie. i think the people need to know that all they hear about this bill, we are paying for and it won't take effect until four years from now there are a lot of things that will go effect immediately upon signing of this bill by the president. we will immediately be able to get rid of discriminating against children who were born with diabetes and other kind of preexisting conditions. that will be immediate. we will immediately fund almost a doublingçó of community health centres.ñi we will create thisñr high-risk pool that happens immediately, where people go into when they are a lot like not having automobile insurance so you can be in there an get services. so there are a lot of things, i think if my memory serves, there are about 13 reforms that take place immediately upon signing by the president. >> rose: you have said and compared this to the civil rights bill. >> yes. >> rose: in the context that it wasn't done in one fell swoop. that civil rights came to america legislatively over a period of time. >> sure. >> rose: so how are you going to do that in health care? >> well, this way. if we immediately are covering the children who have preexisting conditions in four years, we will be covering their parents, all adults will get coverage if they have preexisting conditions. immediately we will get rid of rescissions. that means you cannot get rid of people because they get a catastrophic illness. that happens in six months. and then you know, you look at what we did in civil rights, inñr 1964, when the civil rights act wasñr passed, it did not have voting in it. it only outlawed discrimination in the private sector of employment it was a year later before we got voting and it was three years after that before we got houses. and so i believe that what we are doling here is laying a solid foundation which over time will have complete universal access to quality health care by all americans. >> rose: the mum has swung, you think, inñr understanding this health-care reform. >> i think a lot of that did take place. people began to cut through all the rhetoric, begin to look at exactly what we were doing, and began to understand it. remember, when the house passed its bill weñr passed that bill lastñi year. we passed the bill thatñi had 63 percent approval by thqi people in this country. it was not until the senate started putting in all of these species deals that people got very up set that nebraska amendment and the few other things that they didn't like. and that's when public support begins to tumble for this bill. what we will be doing with this legislation is getting rid of all those special deals, fixing that, and then we are bringing in some of the other reforms that the president wanted to see us do to contain costs. and that's why you see this great number coming from the congressional budget office that everybody is so happy about. >> what's the toughest argument you have to cover yom within your own caucus. >> the toughest one right nowñi is getting all of our antiabortion people comfortable with the senate language. and we are making a lotñi of headway with that. because congressman killedy from michigan and the congressman from minnesota, two of the very pro-life democrats in our caucus say to us that they have read this, they are now very comfortable that what the senate language does is maintain the hyde amendment that will notñr allow for abortions being paid for by federal funds. they are comfortable that that is the case. >> rose: you have said, i think over the weekend, you thought that burt stupak would in the end vote for the bill. >> well, i thought he might get comfortable with the language and could, in fact, vote for the bill. i'm not sure that he will. mr. stupak is one of my best friends up here. we spend a lot of time together on the floor and off. and i know how strongly he feels about this issue. i really would love to see him get to a place where he could support this. but i would understand it if he did not. >> rose: and but for those who think like he does, what do you have to say to get him there. >> well, we continue to work with them. we continue to ask them to listen to the nuns, listen to the catholic hospital administrators, listen to the legal authorities on this, and we just keep working it, and who knows, there may be a tweak or two that can be in the management amendment that they will be comfortable voting for it. so there is still time toçó get them comfortable. >> rose: the vote will take place when? >> the vote i think will take place sometimes after 2:00 on sunday. remember, we promised the american people that we would not ask any member of the house to vote for this until there is 72 hours of posting. we post the bill a little bit after 2:00 today. and so we won't be voting for it until a little bit after 2:00 on sunday. >> rose: and then what happens? >> and then weñi will-- what we will be doing in the house. we will be taking the senate bill and the fixers. those two bills and laying them together. and we will vote on them at one time. and then those things will leave the house with the fixers going to the senate, and the senate bill going to the president and then we will see what happens in the senate with the so-called fixers. >> rose: all right, congressman clyburn it is always great to you have on the show. thank you very much. we will talk to you soon. >> thank you so much for having me. >> rose: jim clyburn from south carolina. back in a moment. >> we continue to see the health-care reform with a view from the opposition. joining me from washington, congressman paul ryan republican from wisconsin, he is a ranking member on the house budget committee, also originally named to president obama's bipartisan deputy commission that will propose ways to address swelling public debt. i am pleased to have him on this program for the first time. welcome. >> thanks, charlie, good to be here. >> rose: if i hear what i am hearing from people on this program the democrats think they have the votes.çó >> i don't think they do. i just came from the floor, talked to a handful of democrats and they told me they are still down. i think what you have here, and this is a fairly common strategy, is trying to give sort of a sense of an av ability, say they have the votes but get a sense of momentum as they go to thetz9pf. i think that is what is happening. from our counts we think they are down a handful of votes, maybe five, seven, eight votes. they don't have the votes. if they did they would already bring it up to the floor. they will get a sense of momentum, going to the floor. with the vote on sunday afternoon.ñr right now we are pretty convinced they don't have the votes. >> rose: does the cbo report help them? >> it doesn't really change anything. it's basically the same as we saw earlier. just some more medicare cuts and more tax increases on top to pay for at decisional spending that is in the reconciliation package. so no real new news except for more tacks and medicare cuts but the same direction. so double counting of medicare, double counting of social security taxes, double counting of these class act premiums. and so ten years of tax increases, ten years of medicare cuts to pay for six years of spending, same kind of fiscal char add as what we saw before. >> rose: what is your analysis the budget deficit issue. >> i think it about a 40060 billion budget deficit increase, and about a 1.4 trillion increase in the deficit over the second ten years. the reason i say that is if you look at the cbo's guidance, and look at all of that is going on here and incorporate the kinds of gains they have been playing, take out the double counting and factor in the spending that they are runing along side of it this bill but not in this bill that leads you to this conclusion. and that is just not me saying this this is the cbo, this is the actuary of the cms which is the president's chief actuary is sayingñr the same thing. going to make the cost curve go up, cause more deficits. when you add in all the spending they are runing along side this bill, massive deficits, now, huge deficits later. >> rose: what happened in the debate dow believe in the health care debate over the last year what has been the rhythm of it and what has been the evolution of it? >> that say really good question, actually. a year and a half ago i and others, tom coburn, richard bird, sent a bill to the president that we thought would be a good basis for a bipartisan compromise. it gives universal ago so to portsable insurance, help with preexisting but without a big tax increase or medicare cut. we put out these ideas and were really hoping to get to a bipartisan solution. we were talking to people like ron widen, other democrats all of whom got frozen out of the process. i think they decided about a year ago, this was told to us by leaders here, that they just wanted to do it their way. they wanted to go down this path, which is really the architecture of a government takeover of the health-care system. and they didn't want to go down the path that we wanted to bipartisan where we reform the system itself, fix the ununinsured problem, fix the high preexisting cost problem and instead they just wanted to do this system where the government basically runs it all. they knew they had great majorities. >> rose: the argument made by democrats is the public is going to soon forget about process. so all you say about reconciliationñi will pass right by because in the end they are only interested in content. >> i was in a grocery store in my homestown in wisconsin three weeks ago buying a box of cheerios for my kidsnd a woman in her mid 80s came up to me in the grocery store and said are they going to use reconciliation to jam this health-care bill through. i men if things like that are happening to members of congress in grocery stores in jamesville,ñi wisconsinñi, people are paying attention to this. the process matters a lot. because what it shows you is the hypocrisy. promise of a transparency, promise of open government, promise of bipartisanship, none of that is occurring. and instead what you have here is the pursuit of an ideaological agenda at a time when people want to see problems solved. the shame of all this stuff charlie, is we can fix what is broken without breaking what is working in health care. we want to work with democrats to fix these things but we are not going to sign up for a bill that really costs 2.4 trillion once it's fully phased in. >> rose: do you think the system with insurance companies operating as they do today is the best way to provide both inexpensive and quality health care? >> no, i don't. that's why i have a bill called the patient's choice act which dramatically changes that. which realigns the incentives of insurance companies to jibe with that of their patients or clients. right now they don't. and so we believe we have to have insurance reform. we believe we can come up with a system that gets the uninsured the money they need through tax credits and vouchers to buy health insurance. we believe in setting up high-risk pools to really subsidize people with preexisting conditions so they can get affordable we believe in having transparency on price and quality so people can really see what they are buying when they get health care. so we believe that the status quo is unsustainable. but we on the other hand think we ought to have a patient-centered consumer-driven system with the nucleus of the health-care system is that patient-doctor relationship, not the government. and they're running with a plan that says the government should run it all. we couldn't disagree more with that from many premises and we want to have a patient-centered system. either of these change the way insurance companies work. i think if you listen to the rhetoric today from people in the house, the idea here is not to make health insurance companies work better. i think the idea is to make them go away and have the government replace them. >> rose: you actuallyñi don't believe they are doing this to make insurance companies more competitive? >> no, i really don't. the reason i say that is we know, we know the people writing this bill very, very well. the authors of this bill are also cosponsors of the bill to have a singer payor government run system. they tell us they want the government to be running this system. they don't trust or like the fact that insurance companies exist to do this. >> rose: but as you know dennis kucinich when he changed his vote said i don't like this bill but i finally realized i better take something that is not perfect than nothing at all because this is better than nothing. >> yeah, i think from dennis's perspective and he is sin veerly you know progressivist, this gets to his destination slower than he would otherwise want to i think. >> rose: the of vouchers, did it ever have a possibility. i mean you can make that argument because people became leary of the privatization of social security. >> that's really, i would consider a non sequitur argument. but so yes, i think the idea works because we've had refundable tax credits to deliver benefits in many cases. the basic difference here of opinion, instead of having all this money flow from the government down to the individual, we want the money to flow through the individual into the health-care market and give the individual more power. more power in how they can buy insurance, more power with respect to the relationship with insurance companies, and give people based on income, you know, more money to go buy affordable insurance. and then break down these insurance monopolies, have interstate shoping so that you have real competition in insurance markets, and so the idea of say a voucher or a refundable tax credit i think works very well because we deliver lots of benefits in that way. pell grants are vouchers. food stamps are a voucher. so the government delivers benefits to citizens in many ways that liberal as prove of, why not health care. >> food stamps work. >> yeah, which got new technology, that makes it work so you can't have as much fraud. pell grants i would argue work pretty well. it helps you get education, college benefits. so the point i'm trying to make is the federal government delivers benefits to individual through vouchers in many, many ways. fairly successfully, i would add. and this is what we are proposing to do through health care. so the point that we are having here is we republicans have offered lots of ideas. we've offered constructionive solutions it to the problems in haetion care. we acknowledge, recognize and agree that the statusco isn't sustainable and we really do want to work step-by-step, piece by piece to get but they decided to go with ideology instead of bipartisanship. they decided to go with a government takeover instead of fixing what is broken in the health-care system versus trashing it and having the government take the entire system over. that is where we are today. they don't have the votes. they know they don't. and they are going to try and muss they will through by sunday. >> rose: do you think they will? >> i think it's about 50/50. >> rose: and what argument are they using based on what you know to their own caucus to get those remaining votes to 216? >> i have watched this evolve as the week goes on. and now they're arguing you can't let this presidency go down. you got to be a good loyal democrat. you know, we're going to get beat up in the next election anyway so we might as well get an accomplishment under our belts. do it for the team. this presidency is on the line. it's really party loyalty val what they are appealing to. >> rose: but people say the same thing about the r&b on the-- that on the republican side, this is president obama waterloo, a whole range of things. >> people know we have a principlesed opposition to this. people know that we have huge policy differences of opinions on this. and so look, there are a lots of democrats right now that don't like this bill. they think it is a runaway fiscal freight train and the stupak pro-lifeers.by the way, y clearly does fund abortions. that is extremely clear in law. all of the authorities that have been consulted on it claim as much. there is a problem of that. they peeled off a couple of people but not most of the pro-life democrats. what they are down to because they can't peel off the rest of the pro-life democrats is just sort of those moderates that may have voted no before but they could flip them to yes. and that's really more of a party ideology. and party loyalty kind of an argument that is being made. >> rose: the president continues to insist that if you like your health care you've got nothing to worry about. >> that could not be farther from the truth, charlie. and the actuarys at the congressional budget office and the president's own chief actuary tell us that, that you are going to lose it. look, people in the individual market are going to have huge price increases or just loss of their coverage all together. we are going to see about 60% of the 11 million seniors on medicare advantage are going to lose the health insurance that they've chosen for themselves. you have a new incentive now in this bill with the reconciliation package for companies who offer health insurance to their employees to dump their employees into the exchange. and so you are going to see massive disruptions in the individual market, in the group market, employer-based insurance, individual purchase insurance, medicare provided insurance, massive disruptions where people are going to eitez lose what they have right now or pay a whole lot more for what they've got. >> rose: the second argument that is frequently made as you know over theñi long summer and before is that medicareñi is government insurance, government health care. and it works. and here you are criticizing cuts in medicare so therefore you like medicare. >> medicare has a 38 trillion dollar unfunded liabilities. that's 38 trillion dollars of promises we're making to people for medicare that medicare doesn't have. if we don't do anything for four more years it's a 52 trillion unfunded liability. it's not even complete insurance right now by virtue of the fact that you have to buy supplement insurance to fill if all those gaps in coverage that you have right now with this program which is a 38 trillion unfunded liability. so if what we are trying to do here is go with medicare for allñi which is the word, the phrase that is used here a lot. why would we want to do medicare for all when this program is going bankrupt in seven years. >> rose: thank you very much. paul ryan, republican, back in a moment. stay with us. >> rose: ken feinberg is here in washington and on wall street he is widely known as theñi p pay czar. nine months ago he was appointed by president o bamo-- obama to oversee executive compensation for seven companies that received exceptional assistant from the government under tarp. since then stip group and bank of america repaid their debt. 2010 executive pay at the remaining five companies, aig, general motors, gmac, chrysler and chrysler financial will be determined by feinberg in the coming weeks. mi pleased to have him here to find out what he knows, what he has learned, and what it says for corporate america in general. welcome. >> thank you. >> rose: where are we? >> congress --ed-- passed a law. the law said that those seven companies, now five, who have received the most taxpayer assistance shall have their top 100 officials in each company have their compensation determined by a treasury official. that's because these companies are, in effect, owned by the taxpayer. and therefore they are the creditors. and therefore they have a right to have a say in compensation. that's my job, delegated to me by secretary geithner. and we are now preparing compensation determinations for five companies top officials in 2010. >> rose: how do you do that? >> first you read the statute that says make sure that these companies thrive. make sure that they have officials are there who can help the company thrive so that the taxpayer can be repaid. but make sure in the law that you don't set compensation in a manner that will promote excessive risk-taking by those company officials. try and keep them there long-term so that their compensation is tied somewhat to the overall success and value of the company they serve, and then collect the data empirical, get all the data from the companies from independent compensation consultants, evaluate what is this job worth. ask the companies for anecdotal evidence about each official and try and render a sound judgement. >> rose: how do you determine what a job is worth? >> well, you see what the rest of the world is paying for cfo or a vice president for human resources or an energy trader what have you. see if the compensation is aligned. see if it is guaranteed or is performance-based. evaluate others and ultimately implicit in your question, ultimately make a judgement call under the statute as to what the taxpayers can expect. >> rose: have you made a judgement that compensation that is sort of notion thatñiç certain level they are going to leave and go somewhere else. >> i hear that argument all the time. i'm quite dubious about it. >> rose: because? >> i don't see theçó imperial evidence of that. most of these officials at these companies have been there many, many years. they have accumulated great wealth even in troubling financial times. the idea that they can hold a company hostage by basically demanding x or y, i have become over the last nine or ten months, somewhat dubious about that assertion. now i do have to take that into account and it's important that i do so. but i do not believe that it is automatically validated that one leads to the other. >> rose: is it because they have nowhere to go or because something else. >>2oj, i think it's something else. >> rose: and something else. >> it may be that they have nowhere to go in some cases. it may also be that company officials who spend years at a particular company and become familiar with it, with the culture of it, with the certainty of it, with the stability of it, are in no rush to simply bolt and go elsewhere. >> rose: and certainlyñr over over 50 are they going to want to uproot. >> exactly. >> rose: there has been no flight overseas, has there? >> i hear that argument all the time h that if you don't pay a company official x she or he will leave not to a domestic competitor, but to a european company or an asian company or god forbid a chinese company. and you hear that and you become a little bit skeptical about a lot of those arguments. >> rose: in order to keep people, in order to pay them fairly, in order for american taxpayers to feel like this is the fair thing to do, what do you structure? >> no guaranteed income other than relatively modest cash-based salaries. under $500,000 a year. often well under $500,000 a year in cash. the rest of your salary will be performance-driven and not over a one-year period, over a two, three, four, five year period in the form of salarized stock which cannot be redeemed or sold until years go by, so that your personal compensation should be tied to the overall success of the company you work for. >> rose: and the long-term success. >> that's correct. and then we also have the luxury of providing these officials some so-called top stock which cannot be sold for five years and can then only be sold if and only if the company repays the taxpayer. >> rose: but that's not a new idea s it? the idea of using stock to compensate and using deferred stock to compensate? >> it's not a new idea. it's the systemic demand that we make that that be in every case a-- or almost every case a fundamental aspect or characteristic of what we are doing. some companies have done it for many years. it's also a question of balance. how much cash. and how much stock. we are definitely tipped the balance in the direction of much more stock. >> rose: when you look at wall street, is the most egregious disparity between people at the top and the people on the firing line on wall street or is it somewhere else. >> wall street. >> rose: why is that? >> ask wall street amñi but i must say over the last 25 years that gap that you speak about has grown exponentially and is much wider now than it's ever been. and is much wider now than it is in europe or asia or anywhere else it is a serious public policy. >> rose: you met with lord blankfine, the ceo of goldman sachs. >> yes. >> rose: what was the meet being? what did he want to know from you. >> mr. blankfine called me up and said mr. feinberg, even though i am not subject to your jurisdiction. >> rose: we paid back. >> we paid back, we're out. i would like to know what you think about our compensation structure, my compensation structure, and any advice you may be able to provide me in terms of weathering the storm that i confront now. >> rose: and so you said to him about what advice you had about his compensation structure and what. >> i gave him advice. you can talk to mr. blankfine but i gave him basic advice about just what i have told you about low cash salaries, performance-- . >> rose: did you suggest he should have a cap on his compensation. >> i suggested that he should take that into account. and de. >> rose: and de. >> in fairness to mr. blankfine, de. >> rose: and then there are people on wall street like swron mack who took no bonus for a couple of years. >> that's correct. >> rose: do you think that was a wise. >> very. >> rose: and beneficial thing to do. >> very. do not underestimate the populist political consequences of these decisions. the american people are right correctly, i think, in very uncertain economic times outraged by these numbers. and these companies would be wise to take into account the political consequences of what they do. >> rose: what might be the political consequences. >> well, there are a series, there are a series-- . >> rose: legislation that would -- >> exactly anticipate, there is a menu of initiatives out there, far beyond my jurisdiction. >> rose: you are talking about financial regulation, those reforms. >> corporate governance reform. regulatory reform, the federal reserve prescriptions on financial institutions, the sec's requirements for greater transparency on compensation. secretary geithner's leadership with the g-20 to make sure that foreign companies do not have a compensation advantage over american companies. president obama's bank fee proposal on excessive compensation. paul volker's proposal to break up banks too big to fail. all of this is out there. >> rose: do you think we're looking at something that will be a temporary fix. >> that remains to be seen, of course. i am fairly confidence that it is highly unlikely that the congress wio÷ ask me or anybody like me to extend my jurisdiction or continue to expand my role, something that i think would be very ill advised. the president and secretary geithner have expressed the view that it will be advise the. but whether or not the preskripings that we talk about today will become permanent with companies voluntarily, there are early hopeful steins but we'll see a forgetfulness returns, that's the question. >> rose: why did they choose you? >> well, you'll have to ask first deputy secretary neil woland a good friend of mine who came to me and asked me to do this. and then secretary geithner reaffirmed that. i think probably because of my work earlier in designing and admin center iting the 9/11 victim compensation fund. and the bipartisan support that i received in designing and running that fund. >> rose: you have said something to the effect that that was the hardest thing you ever had to do. >> nothing like that will ever be replicated. >> rose: because it was death, because it was people trying to understand what is the value on a life and because there were families who wouldñr say there is no monetary number here thati3( will ever heal my loss. >> you have exactly articulated what they said to me. and they said it to me not years after 9/11 which is usually theñr case in court, they said that to me months after 9/11. congress passed that 9/11 statute within a period of days, within two weeks after 9/11. so i was dealing with families in grief who had lost a loved one whose body hadn't even been returned yet. and we're talkingñi to them about compensation. it was very, very difficult. >> rose: so how did you do it? >> well, i learned a lot. >> rose: the question of what is a job is worth, which one thing. this is what is a life worth which is a very different thing. >> well, under the statute that congress created, i basically was judge and jury. so today as you know in every court, in every village, hamlet and city inñi our country if somebody falls off a ladder or gets hit by an automobile, what would they have earned over añi lifetime, economic loss. what about their pain and suffering wa, about the emotional distress of the survivors. we had a formula. and we tried as best we could to apply a statutory required formula to each and every claim, but my goodness, it's easy to try. >> rose: tell me the stories of people. >> mr. feinberg, i'm 24 years old. i lost my husband. he was a fireman. >> rose: why not me. >> that, but also mr. feinberg, we have two children 6 and 4 and i want my money that are youñr going to give me in the next month. i said why, we have to go through the process. i have terminal cancer. i have eight weeks to live, mr. feinberg. my husband was a fireman. he was going to survive me and take care of my two little once. now they're going to be orphans. so would you please hurry and get me the money so i can set up a trust fund before i'm gone and ten weeks later she died. storys like that. >> rose: what happened. >> she died. we got the money, the trust fund was set up in a timely fashion. and i heard about myself, about 1500 of those stories. >> rose: did you make it a point to listen to anybody who wanted to make a personal case. >> anybody. anybody who wanted to come and see me or if i ran out of time, one of my deputies, we would give anybody a hearing in confidence with a transcript, with a reporter under oath and we would allow them to basically vent about life's unfairness and how life threw somebody añi curve ball. >> rose: what is the skill here other than listening? >> don't underestimate listening do not underestimate listening. >> rose: but tell me more,. >> i think people who suffer what they perceive to be unfair innocence life, misfortune, they want the opportunity, especially with a government official who is trying to convince them to do something, they want the opportunity to be heard, to be heard, to validate the memory of a lost loved one or in the case of what mi doing now, to validate self-worth. >> rose: because they feel like they owe it to the person who has passed on. >> that's right, or themselves if it is current compensation and they have a family and so i think that. i think you have to be pretty objective. you can't be overly swayed emotionally by these arguments. are you only human. you can't help but be affected but you have to be consistent and transparent in how you reach theseñr decisions. but it's very difficult with 9/11, mr. feinberg, myñr husband was a fireman. you are giving me two million dollars less than the banker at the world trade center who worked foreign ron. i don't get it. what do you have against my husband. and you have to explain how the law works. and how economic loss is açó factor. but it is very, veryt& >> rose: now has all that been settled? >> yes. thereñi are about i think maybe one or two death cases from people who didn't want to go into my program, into the fund and wanted to litigate against the airlines, et cetera. there are some physical injury cases, many, many physical injury cases, thousands pending before judge hellerstein in federal court in manhattan. but i'm hopeful they will settle as well. >> rose: what other arbitration kinds of things have you done. >> agent orange, that was the first one that i did in in which one of the nation's most distinguished federal judges jack weinstein, brookline, asked me to try and mediate a resolution of that case involving vietnam veterans who claim that they had been injured by exposure to the defoliant argument orange in vietnam. that case had been kicking around for about eight years and i came in and with the help of judge weinstein, i must say, we settled if about six weeks. that sort of-- . >> rose: $180 million. >> 180 million which was the largest tort settlement of its time at the-- type at the time and that changed my professional career overnight. >> rose: so you became what? >> a mediator. >> rose: right after that you no longer were an attorney, you were a mediator. >> that's right, overnight people started calling me. >> rose: and what's the satisfaction for you? >> oh, the satisfaction is to take a challenging problem. where dispute ants are convinced that the differences are unbridgable, and find a creative way to get them to agree that it's better to settle the dispute than engage in endless protracted, costly litigation. >> rose: oranger. >> how much of it is insight that you get from some of the place other than law school having to do with psychology, having to do with being able to read someone, having to do with gaining their confidence so they trust you, so they believe even though they may not like to. >> i don't think law school is the key, in 9/11 it would have be better i think if hi had a divinity degree. >> rose: really. >> so. >> it took me awhile in 9/11 to get on the right page with these families at the beginning i was too much of a lawyer. and not enough of an empathetic figure. >> rose: and where are you limited by wanting to do something but the law says no. >> these contracts as excessive as they may seem are inviable. they cannot violate them. >> it's a very good point you make. the law creating my role as compensation executive, there are contracts that were entered into long before the tarp law was passed or implemented, long before i was appointed by secretary geithner. those contracts are valid. they're legal. they're binding. our society depends on the rule of law and the commercial stability associated with contracts. so the law says that in those cases, where attention contracts were entered into pretarp, either get the parties to renegotiate those retention contracts so that what is owed will be put in stock going forward. i managed to do that in almost every case, convince the parties. but if not, honor that contract. you have to do that. but i may take those contracts into account in determining prospective compensation. >> rose: what happened at aig. >> aig, for whatever the reason, decided unlike the other companies, the other six companies, aig decided that we had waited long enough for our valid, binding pay. we wanted, we're entitled to it i was unable to convince those officials to roll their money out. >> so i honored those contracts. >> you have to ask aig or ask them. >> i did take into account those contracts in setting prospective compensation. >> rose: this what david brooks wrote. these rules probably won't even have a big effect on executive wealth. they will just drive compensation into back channels and risk-taking into unseen parts of the market. again the issue is not whether government acts but whether it agos with an awareness of the limits of its knowledge. sometimes with we have seen they have a government with no sense of those limits. no sense what perhaps government officials don't know how to restructure general motors, pick the most promising battery technology, reengineer the health-care system from the top, or fine-tune the complex system of executive pay. >> there is a lot of truth to that. now i would say to mr. brooks that what i have tried to do with the seven companies consistence-- consistent with the statute is work out a public-private partnership when it comes to determining compensation. one of the unfortunate aspects of this title that the media has placed on me as pay czar is that sounds as if i'm issuing imperial edicts. >> rose: that you can do what you want because you are a czar. >> exactly right. when the point of fact is i'm more of a mediator than a pay czar and i'm trying with some of those concerns in mind, to make sure i get it right in working with the companies hand in glove to try and come up with the appropriate packages. >> rose: when you look at aig, what would you have done other than to persuade them, those individuals in context to give up, to give up because the circumstances demanded it and the public wanted it. >> first don't demand retention contracts. second, when you say that you will orally going to give back some of your bonus money, about $45 million, give it back. the taxpayers expect it. and third, lower your expectations and not just aig, don't get me wrong. i'm talking about most of these companies. lower your compensations and tie your compensation to long-term performance. the american people understand that. >> rose: long term. >> yes. the american people understand, i think, that compensation tied to performance okay. and you get into this problem of how much. but i think that no guaranteed income. no guarantees. justified these pay packages. >> paul krugman and others make the point, bankers are an exception. wall street is an exception in an exception that demands some kind of restriction on compensation because their compensation came from taking huge risk and when those risks did not work out, they put not their company in danger but the system in danger. so there was a collapse that we all know came perilously close if the government hadn't stepped in. >> that's correct. and that's why i try and emphasize my role in all of this is relatively modest. i think people are interested in what i do because i am the one official that actually calculates pay. so there's a lot of interest in that. but if you look at the rest of administration's menu dealing with krugman's concerns, that is where the real reform is, the regulatory reform, the corporate governance reform, the federal reserves regulations, the sec's regulations, that's where you see the long-term organic effort to reign in pain. >> rose: you have opinions about too big to fail? >> oh, i think that the proposal is -- >> the vocal rules are on the right track. >> i think on the right track. >> rose: even though they argue some people and wall street people argue proprietary trading is not what got into us this trouble. what got nice this trouble was people a incompetent and b taking risks that were beyond wisdom. >> you try and diffuse the risk, you see. i think that's a fundamental aspect of mr. volker's proposalment you try and minimize the adverse fallout there risk-taking. and thereby prop up the stability of the system. but again that's not on my watch. i have enough problems of my own. >> rose: you don't want to be testifying on this one. >> this is what buff heat said. the and directors of the failed companies have largely gone unscathed. their fortunes may have diminished by disasters they oversaw but they still live in grand style it is the behavior of these ceos and directors that needs to be changed. if they are constitutions and the countries are harmed by their breaklessness they should pay a heavy price. one not reimbursable by the companies they damage nor by the insurance. this is in his letter to stockholders in 2009. ceos and in many cases directors have long benefited from oversized financial carrots. some meaningful sticks now need to be part of their employment picture as well. couldn't have said it better. >> rose: couldn't have said it better. and if you look at and study the entire menu of add administration proposals that would impact executive pay and these executives, you can see i think even though is not on my watch that the overall menu really is aimed at what mr. buffett is pointing out in his letter. >> rose: so what guidance have we come up with here other than it ought to be investment if the company stock and it ought to be over a long period of time so that you can't take rising that will make themselves look good in the early stages and not later stages. >> and also in addition to that, very modest cash based salaries and to guaranteed long-term compensation. >> really, performance-based. and very important, with other companies et cetera, these other reforms like corporate governance. share share rights, independent compensation committees. i mean the administration has corporate governo governor-- governance legislation before congressman frank and others. >> the democratization of pay and how shareholders and others should have a say, more of a say and more of a transparent say in compensation. >> rose: so if the president calls you into the oval office and says or invites you into the oval office and says -- >> we have in this society two large a disparity between the top and the bottom, what should i do, what would you say. >> mr. president, you are already doing. if we could get bipartisan support for many of the items that are on the list that answer your question, i think we would go a long way. >> so we don't need new ideas, they are all out there. >> i think most of them are maybe, i wouldn't say we don't need any creative new ideas. but i think the dozen or so initiatives that are already on the piece of paper that secretary geithner and the president are pushing, there it is if you want to do it. >> some say there is too large a gap there is too large a difference between wall street and main street. >> if i've learned anything doing this continuation is the truth of that axiom, that the perception as to wall street worth as opposed to what main street thinks is not a gap, it's a chasm. i doubt very much we can bridge that gap. >> and wall street is not listening or what. >> wall street doesn't listen. >> historically i don't think wall street listens. now as we said earlier, they are starting to listen. whether or not over the long-term it will sink in that we've got a narrow that gap and narrow the difference between wall street and main street, we'll see. historically that gap has not closed with great ease. and i'm dubious. but hopeful that we'll be able to do so. >> rose: you also were called in for vigia tech. >> that was-- virginia tech. that was another 9/11 type horror where-- a parent says i sent my school to a small town in vergeian, rural, you know. >> rural virginia, out of harm away. >> rose: right. >> emotional deranged gunman kills 32 people. 30, 31 students. and how do you explain. how do you try and bring some sense of reason to a horror like that. president seeger, very wise man with a great deal of vision decided that it wasn't in his interest and his place to decide, they had about $8 million in unsolicited private funds, not like 9/11, private donations. and we developed, designed and administered a program that paid that money out to those families. >> rose: does this have any wear and tear on you? >> because it's emotional. it's not -- >> it is emotional and it does have wear an tear. you become very fatalistic.÷ãro- >> don't plan anything too far ahead. life has a way of up setting the best laid plans. >> rose: yeah. you see it first hand. >> you see firsthand. you also, i think, observe, firsthand, the incredible diversity of human nature. how people react to tragedy. some people in 9/11 came to me and said i will never again believe in god, never. others came to me and said you know mr. feinberg, this whole thing reinforces my religious beliefs. and the diversity, the mosaic of human emotion that you experience, anger, frustration, it was just unbelievable. >> rose: you wrote a book about that and i can't remember the title. >> what is lifeñi worth. >> rose: thank you for coming. >> my supply of that book is virtually indexhausable. >> rose: thank you for coming. >> thank you very much. >> rose: thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org ♪ ♪ if you've had a coke in the last 20 years, ( screams ) you've had a hand in giving college 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