WASHINGTON — Gov.-elect Nikki Haley challenged President Obama over his landmark health insurance law Thursday in a candid, personal exchange in front of Cabinet members and newly elected governors from across the country but away from reporters.
In an exchange recounted by Haley and confirmed by White House aides, Obama rejected Haley's request to repeal the health care bill - but said he'd consider letting states opt out of its mandates if they ran exchange programs, banned insurance firms from denying coverage of pre-existing conditions and enabled people to pool together for better rates.
With only four Democratic incoming governors joining 18 Republicans and one independent, Obama acknowledged the Nov. 2 elections hadn't gone as he'd hoped.
"I'm a very proud Democrat, as many of you in the room are, though not as many as I expected," Obama quipped.
Reporters covered Obama's opening remarks, but they weren't allowed in the room for the unusual exchange of questions from the newly elected state executives and answers from the president at Blair House, an elegant guest house across Lafayette Square from the White House.
Haley, in Washington for her second day of meetings with national leaders, asked two of a dozen questions the Republican-dominated governors asked Obama in the closed-door lunch session that lasted almost an hour.
In addition to their exchange about health care, Obama rejected Haley's request that he reconsider his decision to freeze development of the Yucca Mountain repository in Nevada to receive nuclear waste from the Savannah River Site and sites in other states.
Haley, who sat next to Vice President Joe Biden at the lunch, said afterward that she'd been impressed by Obama's willingness to field questions from governors who'd won office by attacking his policies.
"I appreciated his openness and his willingness to spend time with us and to really listen to what our concerns were and to address our concerns," Haley told McClatchy.
"It was respectful, it was a strong line of communication, and I was doing my job to protect the people of South Carolina."
Haley's prominence at the high-level meeting and her confronting Obama over the signature legislative achievement of his White House tenure provide more evidence of her status as a rising star who is being eagerly promoted by GOP powerbrokers.
White House aides were sent a detailed transcript of Haley's account of her exchanges with Obama. They didn't dispute it.
In the most dramatic moment, Haley asked Obama to repeal the landmark health insurance bill he signed into law in March after Congress passed it with only three Republican votes in the Senate and none in the House.
"I said the people of South Carolina and the small businesses of South Carolina cannot afford the mandated health care law they had passed," Haley recalled after the meeting.
"I told him that our economy is already in a tough spot, and our budget cannot sustain the mandate."
When Obama ruled out repeal, Haley tried a different tack.
"I asked him if the state of South Carolina gave solutions, so we're not just saying no, would he allow us to opt out or allow any other state to opt out should they choose," Haley said. "He said that he would consider an opt-out provision if it contained three clauses."
Obama's conditions, Haley said, were that states would have to run exchange programs enabling uninsured residents to choose among different health plans; would have to ban coverage exclusions for treatment of pre-existing illness; and would have to create pools for large groups of individuals to get discounted coverage.
Haley said afterward that she would start working on Obama's tentative proposals.
"I think right now what's best for me is to go back to South Carolina, look at all three of these issues and then make a decision," Haley said. "I want to start to research on what it would take in order for us to do something to meet his provisions.
"The goal is to make sure that we are giving choices to the people of our states and not mandating them."
Haley's exchange with Obama on the Yucca Mountain nuclear waste dump was less complicated.
"The taxpayers of South Carolina have paid $1.2 billion to [develop a plan] to send our nuclear waste to Yucca Mountain," she said.
"I asked him if he would consider honoring the federal commitment and allow waste to go to Yucca Mountain. His answer was no.
"He went on to the fact that they feel like they had safety concerns. He was pretty adamant that was not an option that was on the table."
Haley then made a direct demand.
"Then give us our money back," she told Obama.
"He said that he would have [Energy] Secretary Chu call me."