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Guest Host: Terence Smith
The Labor Department reports that job growth slowed for the month of May. The increase of 54,000 non-farm jobs is the smallest increase since last September. The unemployment rate rose a tenth of one percent to 9.1% renewing concerns about a double dip recession. The credit rating agency, Moody’s,is warning it may need to lower the U.S. debt rating as political wrangling continues in Congress over a decision to raise the debt ceiling. Mitt Romney formally threw his hat into the ring for the Republican 2012 presidential nomination. Please join us for a discussion of these and other top national news stories of the week.
- Chris Cillizza author of The Fix, a Washington Post politics blog, and managing editor of PostPolitics.com.
- John King anchor of CNN's John King, USA, and chief national correspondent.
- Janet Hook congressional correspondent, The Wall Street Journal.
MR. TERENCE SMITHThanks for joining us. I'm Terence Smith, sitting in for Diane Rehm. The U.S. risks a credit rating downgrade unless progress is made towards a deal on raising the federal borrowing limit. The pace of the U.S. economic recovery has slowed. And former Massachusetts Gov. Mitt Romney formally enters the race for the GOP presidential nomination.
MR. TERENCE SMITHJoining me in the studio to talk about this week's top national stories, Chris Cillizza of The Washington Post, Janet Hook of The Wall Street Journal and John King of CNN. Welcome to all three of you. Janet Hook, what about these numbers? Obviously, it was anticipated that they would not be good. That was sort of signaled earlier in the week. Are they about what is anticipated?
MS. JANET HOOKWell, I'd say that these numbers are much more disappointing than people thought. They -- the growth in payroll and jobs created is much lower than it's been for the last couple of months. The unemployment rate -- there had been hope that it would drop below 9 percent, and it didn't. It went up a tick. This is really just, sort of, the latest piece of bad news in a week that had a lot of bad news for the economy.
MS. JANET HOOKEarlier in the week, there was a bad report on a slowdown in the manufacturing sector, which had been a part of the economy that people had been looking to to help along the recovery. And you can tell that the news wasn't good when even the president's economic adviser, Austan Goolsbee, the best thing he could say is, well, there's always a bump along the road to recovery.
SMITHAnd then at the beginning of the week, the housing market, the home prices sank even lower, suggesting that we may not have reached the bottom there as well, John.
MR. JOHN KINGYou're looking for building blocks, and instead you're getting more and more troubling signs. You know, you hoped for an improvement in housing and then hoped for an improvement in consumer confidence, because housing, consumer spending are the big drivers of your economy beyond employment, Terry, and what you're getting is this, as Janet mentioned, this past week, and you can actually go back a little bit more, five, six, seven reports in a row have suggested that not only has the economy sputtered, there are some people saying we're at risk of falling back into recession.
SMITHWell, that's the question. Is it a double dip in the works, Chris Cillizza?
MR. CHRIS CILLIZZAWell, I think we don't know yet. I would say, though, that -- we were talking about this off air. Look, there's a reason that every Republican presidential candidate and the House leadership, John Boehner, put out statements literally one second after this jobs report came out, and it took the White House and other groups significantly longer to do so.
MR. CHRIS CILLIZZAThis is concerning, I would say, clearly from a policy perspective, because Barack Obama -- the essence of Barack Obama's re-election campaign is, I came in in a disastrously bad economic situation. I put measures in place that yes, some considered drastic, but are working. Now, if you sub are for aren't working in that last sentence, it's going to be very difficult for him to get re-elected. So there are clearly policy considerations here.
MR. CHRIS CILLIZZAThere are clearly real-life implications, people still struggling with this economy, still not having the confidence, as John points out, housing, jobs. But from a purely political perspective, this is a very bad day for the president and, honestly, a day that he probably had hoped to be better. He's gonna be in Ohio, talking about what his administration believes is a major success story on the auto industry, in Chrysler. He -- that story is likely to get stepped on in a major way by these jobs numbers.
SMITHAnd, in fact, already the stock market is down again more that 100 points, so the reaction is as you might expect, John.
KINGAnd the human toll is disappointing. We will talk and we need to talk, politically, in Washington because we're heading into a re-election campaign, and there will be big policy choices -- the debt ceiling, now the spending cuts attached to that, what will they do about economic policy. The Republicans will certainly have more leverage now in those negotiations.
KINGBut if you think 9.1 percent and then if you add in the millions of Americans who've just simply given up, most economists would say the real unemployment, somewhere around 15 percent. So if you're in a room with 10 people, at least one of them doesn't have a job.
HOOKAnd this really is sort of an example of the real world intruding on Washington's political theater. Because while all of these bad reports have been coming out, things going on in Capitol Hill have been largely, sort of, staged for political purposes. You know, a vote up or down on a debt ceiling that the Republicans put up in the House, they knew it was gonna fail. It was just to make a political point.
HOOKLast week, the Democrats did something just as staged in the Senate when they voted on the Republican budget that they knew was gonna go down. So enough with the theater, here are some real-world facts, and maybe we'll see some more policymaking in the coming weeks.
SMITHRight. And, Janet Hook, it also revives or continues the debate over the efficacy of the stimulus program. What's the bottom line on that at this point?
HOOKWell, you know, it's been a debate ever since Congress passed the stimulus that President Obama asked for as soon as he came into office. And the administration has argued that it's worked in the sense that things would have been worst if they hadn't passed it. The thing about the economic news now is it feeds into a debate that -- it kind of, reinforces both parties' positions, because Democrats say, well, if the stimulus didn't work, it's because it wasn't big enough. We need more.
HOOKAnd the Republicans are saying, we need more -- we cannot raise taxes now. And this whole situation reinforces their view that in the deficit reduction talks, they'll say even more, now even more than ever, tax increases can't be part of the deal.
CILLIZZAAnd, you know, Terry, I think Janet makes a really important point and a difficult one, politically, to argue, which is what the Obama administration is arguing about the stimulus. You should see how bad it could have been. It's always difficult to make that negative argument. Remember, that was the argument for the Troubled Asset Relief Program, TARP, which has become, you know, a major problem, if you voted for it and you're a Republican.
CILLIZZAWell, the country was on the verge of going into, you know, a great depression. Without it going into a great depression, people struggle to imagine that. I think that's been part of the selling program, politically, on the economic stimulus package for the Obama administration, which is it's hard to argue how bad things might have been if we hadn't done this. It's just a difficult thing to do.
SMITHYou know, there's an old rule of thumb, John King, that an incumbent president doesn't get re-elected with 9 percent unemployment or more. Apply that to the current circumstance.
KINGIf you look at the narrative the last few months, people have been saying how the president was getting an increasingly better position for re-election, in part that's because of what we've learned from the census, and we're watching the changing demographics of the country. However, if you take the unemployment report today, when they put it out every month, they put out the top 10 states by population, and then they -- for the rest of the states, the data lag is about a month behind.
KINGIf you lay that out over an electoral college map, you will see the president's challenge. In places in the Midwest, big industrial states, they tend to be struggling the most. If you look at states the president won last time and if you just -- the question now is, can he -- it's a tough argument. A bumper sticker to say, you know, vote for me again, it would have been worse.
KINGAs Chris just noted, it's just a very hard argument. Now, he inherited many of these issues, and they will say that, of course. And they can say, we inherited a very tough economy.
KINGHowever, voters don't, you know, he's the president now. The buck does stop with the president of the United States.
CILLIZZAJust one quick point to back that up. What Barack Obama is hoping is that he is the Ronald Reagan trend line on the economy. In March of 1983, the unemployment rate was 10.3 percent. By 1984, November, when Ronald Reagan won overwhelmingly for re-election, it was 7.2 percent. Still not good, but Ronald Reagan is the -- that is 7.2 percent, the highest president -- the highest unemployment rate for a president to get re-elected since FDR.
CILLIZZAPresident Obama has to hope it is a trend line argument that he -- this jobs report certainly doesn't help that. But that the trend line is going downward so he can say, it's not great. Eight percent unemployment is clearly not good for this country, but the policies I've put into place are working. Again, today's report runs directly counter to that messaging.
SMITHOf course, we're still 17 months away from any election, and there's an opposite side to this coin, Janet Hook, and that is that voters don't seem very pleased with the Republican plans either. Congressman Paul Ryan's plan certainly has been roundly criticized for its -- the changes it would impose in Medicare. So this is not entirely a one-sided argument.
HOOKThat's right. And you could also argue that President Obama's best friend is the Republican candidate field of people running against him. There's a lot of dissatisfaction even among Republicans with the candidates that are stepping forward to run against him. Now, I think in the end, though, the Republicans probably have reasons to think that what matters more is the state of the economy than the quality of their candidate, often these kinds of elections are referendums on the incumbent rather than a referendum on a policy choice.
HOOKI mean, I think you can't see the 2010 election, even though Republicans won soundly, as a reasoned choice by the voters between two kinds of policies. Presidential campaigns usually make it -- bring it more into focus. But I think that John's absolutely right that the biggest problem for Barack Obama isn't just the 9 percent unemployment rate, but the fact that the unemployment rate is even higher in so many of the really important states.
SMITHLet's talk a little about the arguments back and forth on the debt and the debt rating this week. Moody's comes along and says, in effect, a warning shot across the bow, if agreement is not reached on extending and increasing the debt limit, a possible downgrade. John King, that certainly had an impact in Washington.
KINGIt will. It should have an impact in Washington. It gives everyone more urgency in the sense that we know the government's gonna have to keep borrowing money. And if your rating is lower, then it costs more to borrow money. Many people at home listening, if you've had your own problems with your credit rating, if you have a lousy credit rating, it costs you more to borrow money than the person who lives next door who has a good credit rating.
KINGSo this would actually increase the debt of the United States government if it has to borrow with a lower rating. The question is, does it give political urgency now to these negotiations. You know, the House Republicans staged a vote. They deliberately staged a vote saying, you don't get your debt ceiling increase, Mr. President, unless you give us spending cuts. And what will be part of that? Will there be a Medicare grant compromise as part of that? Will there be some other big compromise as part of that?
KINGHard to see because they disagree so much on the particulars. However, perhaps, perhaps, every now and then, it does happen in this country and in this town. When you have a bad unemployment report, a bad, you know, message from Moody's, the debt ceiling -- the debt limit approaching, perhaps the adults will actually go in a room and figure something out. You get skeptical because of recent events in this town, but this is a moment for, shall we say, adult leadership.
SMITHAnd yet, Chris Cillizza, the consensus is that there will be an agreement before the deadline?
CILLIZZAI think everyone assumes there will be, Terry, because the idea of there not being agreement and us going into default on our loans is viewed, kind of -- one of the few, to John's point, one of the few bipartisan things in this town is that that would be a very bad thing for the country. Now, there are outliers who say, you know what, us cresting -- us passing the debt ceiling is not a big deal. But, yeah, I think there will be a deal. The nature of what it will be, though, and how big it will be, will it be a year, will it be long term, we don't know.
SMITHOK. Coming up, more about the debt, presidential politics in the Friday News Roundup.
SMITHWelcome back. I'm Terence Smith, sitting in for Diane Rehm, and I'm joined by Chris Cillizza, who is the author of The Fix, a Washington Post politics blog, and managing editor of postpolitics.com, and by Janet Hook, who is congressional correspondent for The Wall Street Journal, and by John King, who is the anchor of "John King, USA" and is CNN's chief national correspondent. All right. Pick it up again, John, on the issue of the debt and the issue of raising it and the politics thereof.
KINGWell, the government needs to borrow more money. And so most of the leadership, Democrat and Republican, realizes you can't snap your finger and have a balanced budget or have the government operating within its means. So the question is, will Mitch McConnell, the Senate Republican leader, John Boehner, more importantly, the Republican Speaker of the House -- you know, these are the halls Janet walks every day.
KINGThey have, you know, there's no question these guys know they need to have a deal. And they are -- whether people listening will get mad at me if, because of their own partisanship -- they are, you know, responsible American citizens, as well as they happen to be partisan lawmakers. But they have pressures. They have pressures. The new Tea Party class, some of them want deeper cuts. There will be fights over whether you try, do you do a big deal.
KINGDo you cut a deal, a short-term deal, as Chris said, so we carry this over into the 2012 presidential election? There are a whole number of competing interests here. And the question is, when you get them in a room, will they make a deal because, as we've seen in some past cases -- not as big as this or consequential as this -- you know, these negotiations get tough because you move the bar forward.
KINGSpeaker Boehner can cut a deal with the president of the United States. He has to sell it to his caucus. Leader McConnell is looking at a very different calculation. He's sitting in the Senate thinking, I think I can get the Senate in 2012 no matter who wins the presidential election. And so they're all -- all their calculations are different.
SMITHJanet Hook, you've been writing about the meetings at the White House this week, both large gathering of the -- both Republicans and, separately, the Democrats from the House. Any movement there?
HOOKThere was no movement out of those meetings. It wasn't expected that are -- that there would be. I mean, this was the president of the United States meeting with all of the Republicans in the House. And it was more of a kind of a bridge-building exercise, an opportunity to -- for the Republicans to speak their piece, and they did, indeed, do that. It wasn't a place where you would expect compromises to be forged.
HOOKIf anything, I think what it did was that meeting and the meeting that he had separately on Thursday with the House Democrats was to kind of lay out the parameters of the deal that he's now gonna have to cut with probably Speaker Boehner, which is to say he -- the Republicans say, this deal isn't gonna have any tax increases. The Democrats say, this deal isn't gonna have any Medicare cuts. And within those two goalposts, the deal will be cut.
HOOKAnd I actually think that some of the drama of the meeting with the Republicans focused on a confrontation that -- not a confrontation -- a presentation that Paul Ryan, the House Budget Committee chairman, made. He stood up. He is the author of the House budget that included the changes in Medicare that have been so roundly criticized by the Democrats -- the notion that he would transform Medicare so fundamentally that it would not exist for people under 55.
HOOKSo he got up and said to the president, in essence, stop demagoguing my plan. Now he didn't put it quite that bluntly, but that was the clear message. And Obama responded, you know what? There's been demagoguery on both sides. I think that helped to clear the air. I think there still will be plenty of demagoguery, and the deal will not be cut in a room with that many people, I'll tell you that.
SMITHWhat is the real deadline on this issue?
HOOKWell, this is interesting. This is interesting, and I think that might actually be the real impact of the Moody's report yesterday, saying, you know, we -- Moody's said that we're gonna be reviewing the U.S. credit rating if we don't see action on a debt limit or a deal on deficit reduction in a few weeks. Well, the operating deadline among lawmakers so far had been August 2, which is, that's the date that Treasury Secretary Geithner had said, if we don't raise the debt limit by August 2, there's a risk of default.
HOOKSo what Moody's is saying, I think August 2 might be waiting a little too long. So it may -- I think that may put some pressure on the leadership. And John Boehner has already -- has just this week started stepping out and saying, I think it's time for me and the president to get together and do the big deal.
CILLIZZAThe one thing I would just say, Terry, to counteract that -- though everything Janet said is right -- is if you look at the way in which Congress has acted, certainly in modern history and oftentimes forever, they tend to approach any big compromise or deal or major piece of legislation, in my opinion, like a college student and a term paper. You know when it's due. You could write it early and hand it in weeks early. When do you write it? The night before.
CILLIZZALook at the budget compromise that kept the government from shutting down. They were literally cutting a deal 23 minutes before the government would shut down. I think what Moody's is saying is, start writing the paper now. I don't know, given what John said, in terms of the gulf that does exist between these two sides, and the fact that we are right in the middle of a presidential election -- I know people don't think so, 'cause it's 17 months away.
CILLIZZABut the truth of the matter is, the positioning for a presidential election is happening now. It worries me as kind of a citizen that we are going to see that last-minute deal cutting in. Everyone knows you don't write your best paper at (laugh) 2:30 in the morning the day before it's due.
HOOKBut, Chris, you know, believe me, I know Congress' inclination to wait until the last minute. There is one thing that's really different about this deadline. First of all, it's not as clear a deadline as -- when they were writing that budget bill, they knew the government was going to shut down if they didn't pass it on date X. So Tim Geithner says August 2 is the deadline. And there are actually a lot of conservatives who say, well, it's not really August 2.
HOOKSo, first of all, there's not the conviction about the deadline. And secondly, I think the dilly-dallying until the last minute has consequences. In the budget debate, the government didn't shut down until the very last minute. But I think that the spooking of the markets and the blowback from the economy will precede the deadline. And so that's why -- I wish I had more confidence that they'd act before August 2.
HOOKI do wanna go on, Chris, with my summer vacation. But it's -- I think there are some dynamics that are at work here that are different from the traditional deadline-driven behavior of Congress.
SMITHAll right. Let's segue a little bit here into that presidential campaign that you're talking about, Chris. John King, this week was notable in that somebody finally got in on the Republican side rather than getting out. That was obviously Mitt Romney. Anything surprising in his announcement speech and presentation yesterday?
KINGI think what is surprising about it is that this is a scaled-down Romney campaign, a more focused Romney campaign. We will see if it works. Last time he got in, he knew John McCain was, you know, the favorite, and he tried to sort of be everywhere, raise a lot of money, plant a lot of flags. Let's see if I can play in Iowa. Let's see what I can do here. He now realizes, number one, that New Hampshire is fundamentally critical to his campaign.
KINGAs the former governor of Massachusetts, he owns a vacation home in New Hampshire. That New Hampshire, New Hampshire, New Hampshire are his priorities in terms of where he must win early. He also is trying -- and we will see if this succeeds -- trying to keep his head focused squarely on this issue we've been talking about, the economy. He wants to say -- as a governor, as a businessman, as the head of the Olympics -- I turned things around that are broken.
KINGOur economy is broken. This is what I've done all my life. You need me now. The president has failed. Can he do that? If he can do that and stay very focused, you have to give him, because of his fundraising prowess and because of his experience. He got beat up last time and he's learned some lessons from it, as good politicians do. Then you'd have to good him pretty good chances. The question is, does he get drawn into the social conservatives and the issues? Did you flip-flop on that?
KINGCan he overcome his biggest albatross, which is he had a health care plan in Massachusetts that had an individual mandate, and that is simply anathema to the conservative movement, any kind of a government mandate. Now he says, state solution, worked for Massachusetts. I'm not trying to make South Dakota do it or South Carolina do it, but that is his problem.
SMITHChris Cillizza, the issue, I suppose, yes, he has to win New Hampshire, but I wonder if by the withdrawals of Mitch Daniels and the others, Mitt Romney doesn't rise up to become what can be plausibly seen as the frontrunner.
CILLIZZAYeah. I actually agree with you, Terry. I think he does -- he is strengthened by that. You know, there are a lot of people in this town, especially, but there are a lot of people in the Republican Party who run down Mitt Romney. And John mentioned this. Can't win health care. Romneycare is too much like ObamaCare. I mean, to that I would say, yes, it's clearly a major problem for him. Is he the only candidate in the field who has a flaw or a hurdle that they are going to have to clear? No.
CILLIZZAThey are all human beings, like all of us. They all have their strengths and their weaknesses. We know from history that the candidate who wins is the candidate best able to, you know, show his or her strengths and diminish his or her weaknesses. So, you know, I do think, structurally, Romney is the frontrunner because of his fundraising capacity. He raised $10 million in a single day late last month.
CILLIZZAThere will be candidates in this race, people whose names we know who will not raise $10 million in the entire three-month fundraising period. I think he will be significantly ahead when those reports come out in July 15 in terms of fundraising, and I think that will strengthen his hand a little bit. But, look, John is right. Ultimately, if Mitt Romney doesn't win New Hampshire, everything we've just said does not matter because he doesn't -- he's very unlikely -- whether he competes or not, he's very unlikely to win in Iowa.
CILLIZZAHe's very unlikely to win in South Carolina. And as Rudy Giuliani showed in 2008, you can't go five primaries and caucuses without winning or over-performing expectations and expect all of a sudden to be relevant in this process. He needs to win in New Hampshire.
SMITHRight. Then it's over before it begins.
CILLIZZAThat's exactly what happened to Giuliani.
SMITHJanet Hook, some of the coverage of Mitt Romney's announcement suggested he was, in effect, channeling Ronald Reagan. Most Republicans do, but did you get a sense of that as well?
HOOKWell, the idea of Mitt Romney channeling someone else, I think it -- a lot of voters are looking for Mitt Romney to channel the real Mitt Romney. I mean, one of the biggest liabilities he had in the last campaign, he's still up against, which is, you know, kind of that he's been inconstant in his positions on a lot of issues. And I do think that the sentiment that Chris was talking about of people thinking, oh, Mitt Romney can't win, it's not just inside the Beltway chatter.
HOOKI do sense that there's, among a lot of Republicans, a sense of, is there an alternative to Mitt Romney? You know, after Mike Huckabee and Mitch Daniels both dropped out, there was a sense of OK, now we've got the field, now we know who's running in the Republicans, and yet, there was still some churn. There was, you know, Sarah Palin taking her bus trip. Is she gonna run? There was -- Rudy Giuliani is back. He was in New Hampshire too. There's talk about Rick Perry. Maybe the governor from Texas will run.
HOOKThere is this sense of continuing unease in the Republican candidate field. And it does feel like people are saying, not quite anybody but Romney, but is there a choice here, is there anybody who could possibly still yet get in the race.
CILLIZZAAnd, Terry, I would just add very quickly, I do think there are comparisons to be made to the 2004 Democratic presidential field, in which John Kerry was seen as kind of the nominal frontrunner at the start. Howard Dean surged and then collapsed and we wound up with John Kerry, Democrats wound up with John Kerry.
CILLIZZAIt's possible that we're seeing something like that, whereas people will look for someone, whether they're in the field currently against Romney or they're getting in the field, to Janet's point, who may surge collapse. And Romney, we'll wind up with Mitt Romney too. I don't know if that's the case, but there is a parallel there, a relatively weak frontrunner.
SMITHI'm Terence Smith. You're listening to "The Diane Rehm Show." If you'd like to join us, call us at 1-800-433-8850, or send an email to firstname.lastname@example.org. Find us on Facebook or send us a tweet. John King, the -- New Hampshire was quite crowded this week, is quite crowded. (laugh)
KINGIt's going to be -- Iowa, New Hampshire and then South Carolina are gonna be very crowded from here on out. It took a while for this campaign to take shape, but now it is simply kicking to a second if almost not a third gear. You had Gov. Romney's announcement yesterday. He said it was terrific -- but he didn't mean it, Terry -- that Sarah Palin decided to move up into the state. If you look at The Union Leader of Manchester today, the front page is Sarah Palin, Romney's announcement is on page A-3.
KINGThe Democrats are having a lot of fun with that today, essentially saying, you know, what is she doing? What kind of mischief is Sarah Palin up to? As Janet mentioned, there are some New Hampshire Republicans who think Rudy Giuliani still has not decided to sit this one out, and that he's starting to poke around and is there a place for me. This unemployment report today will get Gov. Perry and a few other Republicans to think, OK, wait a minute. Maybe he's not unbeatable. Maybe I wanna think about this.
KINGGov. Huntsman will be back in New Hampshire. Utah governor was Barack Obama's ambassador to China. A little more than a month ago, he worked for President Obama. Now, he's running against him for president. We have a debate at CNN next week, a week from Monday, and we have seven candidates committed.
KINGGov. Hunstman has not committed to that, but we do have Romney, Bachmann, Herman Cain, Newt Gingrich, Tim Pawlenty, Ron Paul and Rick Santorum. So there's your field as of now, adding Huntsman to that list of seven I just gave you and maybe Giuliani or one or two others.
SMITHTim Pawlenty, somebody who's trying to get a campaign started -- as the old saying goes, can't get arrested in New Hampshire.
KINGHe can't get arrested in New Hampshire, but, again, this is a guy you wanna watch in the sense that with Huckabee not running, can he do some business in Iowa? Can, you know, Iowa produces surprises. Iowa produces -- sometimes the tortoise does win in Iowa. He has appeal among social conservatives. They just don't really know him yet. He has to watch Gov. Palin.
KINGI remember going to New Hampshire back in 2007, I guess it was with, you know, Mark Warner, the governor of Virginia, then the senator from Virginia, a very credible guy -- I'm not saying he could be president of the United States. But you had people like that who simply couldn't find any oxygen because of Hillary Clinton and Barack Obama and John Edwards, to mention a name, at the time. And Gov. Warner finally just said, you know what, I wanna be president.
KINGI think I could win, but there's no money to be raised and there's no activist to sign up. The Palin effect on somebody like Pawlenty in Iowa could be harmful. Otherwise, watch him. Watch him because he's a credible guy. He's a governor. Governors tend to win races for president, and if you look through the rest of this field, see what happens.
SMITHYou mentioned John Edwards. In a headline this morning, a federal grand jury has indicted John Edwards over sums of money spent to keep his mistress in hiding during the peak of his 2008 campaign for the White House. Chris Cillizza, what a downfall.
CILLIZZAIt, I mean, it is a remarkable rise and fall for John Edwards. I remember, I worked for Charlie Cook, a political handicap in this town. It was my first job. In 1998, I met a trial lawyer named John Edwards, who was running at the time against Lauch Faircloth, incumbent Republican senator. And I had never been more impressed with -- now, and I had met only about five candidates ever, Terry, but I had never, at that point -- this was someone who was incredibly gifted naturally at almost everything you can do in politics.
CILLIZZAAnd I think what happened over those intervening years is he became convinced that whatever he was doing was right because he was doing it. I don't think any of us foresaw how this ended. This is someone who was a very credible candidate in 2004. I would say if there was another week of the Iowa caucuses in 2004, he probably beats John Kerry instead of coming in second and then who knows what happens.
CILLIZZAYou know, these allegations relate to the 2008 campaign in which two people, Fred Baron and a woman named Bunny Mellon, two wealthy donors, who were longtime supporters of John Edwards, are alleged to have paid a certain sum of money to keep his mistress Rielle Hunter and the child that they had together quiet. Now, the Edwards folks say that that was friends helping out a friend. It had nothing to do with the campaign.
CILLIZZABut, of course, it is in the context of, they didn't want it to come out during his run for president, and that's where the charges stem from, the idea that this was an illegal contribution, or this contribution should have been reported through federal reporting statutes to get this out into the public, that you simply can't do this kind of thing.
CILLIZZAAnd that's what's at issue here, but it is a -- something, I think, you -- if I wrote that story 10 years ago, I think, and I showed it to everybody in this room, they would say, no, that's never gonna happen. That's fiction.
SMITHI'm Terence Smith, sitting in for Diane Rehm. Coming up, your calls and questions for our panel. Please stay tuned.
SMITHWelcome back. I'm Terence Smith, sitting in for Diane Rehm. I'm joined in the Friday News Roundup by Chris Cillizza of The Washington Post, by Janet Hook of The Wall Street Journal and John King of CNN. Well, lady and gentlemen, we are getting admonished by an emailer, from John, who says, "Stop talking as though the election is tomorrow. Jobs reports, job reports, unemployment and so forth will continue to go up and down. Reagan's second term motto was, 'are you better off today than you were four years ago?' And, indeed, it may come down to that."
SMITHBut, Janet Hook, another emailer, Marilyn, in Arvada, Colo., says, in effect, what some of the callers do, which is, "Who listens to Moody's anymore?" She writes, "Why on Earth is Moody still there at all and not in prison after what they did?" In other words -- and several emailers are asking the same question, why should we care?
HOOKWell, I don't know how much we should care. The people who are listening, or at least citing Moody's, are the politicians who are trying to frame the debate. This is a report that's being used by both sides, frankly, Democrats and Republicans, for their own purposes. So I think it's -- the callers and emailer are correct that it's worth looking at this with some skepticism. I think it actually won't have any concrete impact on what and how any deal is gonna be struck. I think it may have some effect on the timing, though.
SMITHAll right. Let's take a call. David in -- is it Statesville, N.C., David?
DAVIDYes. Yes. How are you?
SMITHYeah. I know you have a question or a thought on Sarah Palin. Go ahead.
DAVIDYeah. My comment is basically just how unhinged that Sarah Palin makes the mainstream media. I think it says a whole lot more about you guys than it does her. Martin Bashir was on MSNBC saying the fact that she had the American flag on her bus put her in violation of federal law. I don't know if you guys saw that. I thought it was not only ridiculous, but like I said, it plays to the whole thing of she's making you guys crazy. And as a conservative and a guy that wishes Paul Ryan would run for president, I love it.
SMITHWell. All right, David. It is certainly a fact that Sarah Palin is a manipulator of her own image and of the news and really quite gifted in that regard. John King?
KINGShe is very, very gifted at self-promotion, and I don't say that as a criticism. She is right now trying to improve her brand image. If you look at the polling, if you just study what happened in the last election campaign, she has very positive ratings among most conservatives, as David just chimed in and said. Her standing among some Republicans has dropped a little bit in recent months. Part of that is some debates she's been involved in and part of that is if she's on Fox News as a commentator.
KINGIf you're commenting on all the issues all the time, some people are gonna be turned away. I went up to Gettysburg, Pa., to cover part of her bus tour. I was criticized roundly by liberals saying, why are you doing this? She's not even a candidate. If you raise any questions about her, you're criticized roundly by conservatives. She's a very, perhaps even more polarizing than Barack Obama, or in that league, anyway, as a polarizing political figure.
DAVIDOh, I doubt that.
KINGI cover her -- I covered the trip, though, because she is the single biggest wildcard in the Republican race for president. If she gets into this race, she will have a dramatic impact. She would be considered one of the favorites. Gov. Romney, the nominal frontrunner, Gov. Palin would immediately be the chief challenger, if not the equal to Gov. Romney. So I cover her because of her potential to influence what is the next biggest election before us, the race for president. And, well, you know, you get criticized for that, but she's a fascinating political figure.
CILLIZZAYeah. Look, John is exactly right. I think -- we wrote quite a bit about this. One of the people who work for me went and traveled – attempted, at least --to follow her bus and travel with her, which was no easy task. I think the woman who I had do it cursed me for having her do it because it was kind of a wild goose chase. But look, here's the reason we cover her, because look at any national poll that, these days: Mitt Romney, 17 or 18, Sarah Palin, 15 or 16. You can't ignore that. If Mitt Romney went on a bus trip, we would cover it.
CILLIZZAThe fact that she isn't in the race yet, to me, is kind of immaterial. She's clearly -- she has said publicly she's thinking about running. She is, I think, the most divisive figure in our politics competing with Barack Obama, but certainly everyone has a view point on her. But we cover her because this is someone who has demonstrated support among Republicans.
CILLIZZALots of people disagree with her, lots of people think she shouldn't be president, but there is a segment within the Republican party that believes she is the best representative of what they believe, what they hope for, what they want in a leader. I'd say one other quick thing about her. My colleague, Dan Balz, I thought -- our senior political reporter, put it best about her, her unique ability is to always be interesting, which I think is a really nice way to put Sarah Palin's appeal.
SMITHOK. Let's take another call. Let's speak with Kevin in Detroit. Kevin, are you still there? You're on the air.
KEVINYeah. How's it going? You know, one thing, observation I just wanted to make is that when it comes to job creation, spurring economic growth, you know, the House of Representatives led by the Republican Party, I daresay, have not put forth one single policy, one single piece of legislation concretely to spur job growth in this country. Not one, not since they've been in power. And, you know, I'm pretty disappointed in the press as a whole for not, you know, at least inquiring about it. You know...
SMITHAll right. Kevin, let's ask Janet Hook to respond.
HOOKWell, this is actually the main line of argument that the House Democrats make often about the Republican agenda, that they are more focused on cutting spending than on creating jobs. And truth to tell, there are some signs that the Republican leadership are worried that that message is getting out, that they -- that Eric Cantor, the House majority leader, has said that their policies are all about cut and grow -- cut spending and grow the economy. And that the grow part has really been eclipsed.
HOOKWell, the Democrats would say, as the caller -- agreeing with the caller, that the reason why the grow part has been eclipsed is 'cause there hasn't been any there there. I do think that -- I'm looking forward to a day of covering Congress today where, in the wake of this jobs report, both sides are gonna be blaming the other for not creating more jobs. And I think the caller accurately kind of points to what the rap is against the Republicans.
HOOKThe Republicans, of course, are already blaming the Obama administration's policies. And so I just think that the unfortunate thing is that neither side really seems to have a very clear agenda on what they're gonna do next to create jobs.
SMITHMm-hmm. John King, Austin on Facebook has this to say, "With our continuing military engagements costing millions per day, how can anyone be serious about reducing our debt while this is going on?"
KINGThe cost of the military engagements -- Iraq, Afghanistan, now Libya -- is increasingly driving an interesting shift in politics. If you -- I would describe George W. Bush or John McCain as Republicans who were interventionists. Meaning, if they saw a problem, they were less reluctant to project U.S. military force overseas. If you listen to -- even Republicans now -- this is not just coming from anti-war Democrats. Gov. Palin, we were just talking about her. She has said, you know, this is costing a lot of money.
KINGGov. Huntsman, who's running for the Republican nomination, not formally declared yet, that he would not have gotten the United States into Libya at all, he sees no national security interest. So because of the overwhelming focus on a government that needs to do a better job living within its means, the costs of the overseas deployment -- before it was, should we be there, is it a vital national interest, was Iraq a mistake, how long should we stay in Afghanistan, can we trust Karzai.
KINGThe costs were much lower on the scale when people went through, why should we be there. Much higher now. You hear cost come out of the mouths of the -- of leading politicians very quickly.
SMITHAnd I think Austin's frustration is that it's not being discussed, at least not front and center.
KINGIt's not being discussed as much -- it has not been discussed as much front and center. I believe you will see that shift in the coming weeks, including just today, there's a vote in the House, I believe, in the coming days. Dennis Kucinich, again, a liberal Democrat trying to end the U.S. involvement in Libya. Republicans don't completely agree with him, but they have to come up with a proposal of their own.
KINGThe cost of this -- now, Dennis Kucinich is anti-war to begin with. It's not so much -- money is not the first and foremost for him. But you see more politicians, whether it's Ron Paul, who's always been against these things, but more and more people who have supported Iraq, supported Afghanistan, now pulling back and saying, you know what, it's been too long. We can't afford it.
SMITHSen. Barbara Boxer is among those trying to set a deadline. Chris, you have some numbers on the latest poll, presidential poll, that shows that people are not all that enthralled with this Republican field that we're talking about.
CILLIZZAYeah. Janet mentioned this earlier. The Washington Post did a poll with the Pew Research Center this week just trying to test how people felt about the field. And essentially what they asked is, give us one word, when we say the 2012 Republican presidential bid, what's the one word or phrase that jumps to mind? Thirty-seven percent of self-identified Republicans, I emphasize that, Republicans, almost four in 10 Republicans used a negative one word or phrase to describe their field.
CILLIZZAThat -- and the term used most was either unimpressed or not impressed. That goes to -- Janet mentioned this earlier -- that goes to, there is a longing out there for someone else. Most of us, I'll put myself in that category. I think I was on record of saying I thought Mitch Daniels was a coin toss, but that the Indiana governor would probably run. He didn't run. Mike Huckabee, who clearly would have occupied space, didn't run. Jeb Bush, the former Florida governor, does not look like he's running.
CILLIZZAChris Christie, the governor of New Jersey. I don't think you'd take a helicopter to your son's baseball games, say you're not going to reimburse the state, and then decide you are going to reimburse the state if you are running for president. So there's a longing out there. Now, that's not an uncommon thing. In 2004, Wes Clark, the former general, got into the race late because people were worried that Howard Dean was going to be the nominee.
CILLIZZAIn 2008, Fred Thompson, the former Tennessee senator, got into the Republican race late because people felt like the field wasn't great. Now, neither of them won. So there's always this desire, I think, among voters, and I will put the media a little bit culpable in this too, for a fresh face. Someone new, someone who can really galvanize support. It doesn't always work.
SMITHOK. I'm Terence Smith, sitting in for Diane Rehm. Let's take another call here. From Art in Indianapolis. Art has been unbelievably patient in hanging on. Are you still with us, Art?
ARTI am indeed.
SMITHAll right. Go ahead.
ARTOne very quick point back to the very beginning, I would say the more relevant economic cycle to compare with the situation today or what it could have been, would have been the panic of 1907 in which unemployment thereafter rose as high as 23 percent. But now, turning to my primary point, to me, the fatal flaw in this whole process is the disregard by nearly everybody about our balance of payments deficit, that on our manufacturers goods front, we have an annual deficit of around 320 to 340 billion, and about 320 to 400 billion in energy deficit, depending upon whether you're looking at it right now or if we have a little bit of inflation that drives -- as the dollar falls and the price of energy goes up.
ARTThat's a 700 billion a year or about a 5 percent of our liquid financial assets in America per year draining out of our national economy to the rest of the word.
SMITHAnd your complaint is that this is not being addressed?
ARTI don't think it is. And I think it's been a sleeper for 20 years.
SMITHMm-hmm. Janet Hook...
ARTAnd I think it's something of a, I think it's a defect with our overall economic policy or else they're too afraid to talk about it. And what we should really be focusing on is the fundamental economic growth drivers in our domestic economy and how to...
SMITHAll right. Let me ask Janet Hook to comment on that.
HOOKWell, I think the caller points to a real problem with our public debate about the economy. I mean, there are many, many large forces and moving parts, and our political system and our media, including myself, tend to focus on one part of the economy at a time. And right now, there's a really kind of, almost manic obsession with the deficit and the debt. And I think a lot of people would say that that's to the detriment of, that we're not paying enough attention to trade issues, our place in the world economy and, for that matter, unemployment.
HOOKI mean, right now, the focus is so much more on the deficit that we get a job report like we have today, and it's sort of a wake-up call. And so I appreciate your comment.
SMITHMm-hmm. Incidentally, the media is not -- apparently, the media are not the only people obsessed with Sarah Palin, because quite a few of the emails coming in here this morning ask about her. I guess there's a desire maybe, Chris Cillizza, for your sense of, in the end, will she run or not?
CILLIZZAWell, thank you for putting me on the spot, Terry. You know, I can guess -- make a reasoned guess on almost every politician, although reasoned, I think, is in the eye of the beholder. I cannot guess on her. I really do not know, and I would say I don't think most people who are in her "inner circle" know the answer to that. I think the only two people who make decisions about Sarah Palin's political life are, not surprisingly, Sarah Palin and her husband, Todd.
CILLIZZAEvery indication I have trying to -- trust me, I have tried to penetrate that inner circle as many ways as you could possibly imagine. It is very difficult. And even when you do, you find out that many people in there really are executing decisions made by Sarah and Todd Palin. And so, unless Sarah or Todd Palin gives me a call – and again, I would welcome that -- I don't know that anyone can make a decisive yes or no, or will be able to make a decisive yes or no until she tells us.
SMITHOK. We only have about 30 seconds or so to -- but we can't finish without mentioning, certainly, the most colorful candidate out there, Newt Gingrich. Can he restart his campaign, John King?
KINGIt is interesting when the Republican Party is looking, after George W. Bush, after the McCain campaign of last time, to challenge an incumbent president who is young, who ran on hope and change. Will the Republican Party go back to pick its leader for the future? That's a huge challenge for Speaker Gingrich. He has his own other issues and flaws as a candidate. He also has his great abilities as a candidate. But that's the generational thing is the big challenge, I think, for him.
SMITHAll right. I want to thank all three of you, John King of CNN, Janet Hook of The Wall Street Journal and Chris Cillizza of The Washington Post. A great discussion. I'm Terence Smith, sitting in for Diane Rehm. Thanks for listening.
ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture, Monique Nazareth and Sarah Ashworth. The engineer is Toby Schreiner. Dorie Anisman answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is email@example.com. And we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.
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