The U.S. economy showed slowed growth in the first quarter of the year. The supreme court held a hearing on Arizona’s controversial immigration law. Former speaker of the house, Newt Gingrich, said he’s quitting the GOP presidential race. Mitt Romney won all five of Tuesday’s primaries. Congress gears for a fight over a cybersecurity bill. The Senate passed a bill to save the post office. And the campaign finance trial of former presidential candidate John Edwards began with testimony from his former aid, Andrew Young. Naftali Bendavid of The Wall Street Journal, Karen Tumulty of The Washington Post and John King of CNN join Diane for analysis of the week’s top national news stories.

Guests

  • Naftali Bendavid national correspondent, The Wall Street Journal.
  • Karen Tumulty national political reporter, The Washington Post.
  • John King anchor of CNN's John King, USA, and chief national correspondent.

Friday News Roundup Video

The panelists discuss the latest developments in the growing scandal around the behavior and alleged indiscretions of U.S. Secret Service agents abroad:

Transcript

  • 10:06:56

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The U.S. economy slowed its pace of growth in the first three months of the year to 2.2 percent. Mitt Romney swept the GOP primaries held Tuesday. Newt Gingrich says he'll leave the president race. And the Supreme Court heard arguments on Arizona's controversial anti-immigration law. Joining me for the domestic hour of our Friday News Roundup: Naftali Bendavid of The Wall Street Journal, Karen Tumulty of The Washington Post and John King of CNN.

  • 10:07:42

    MS. DIANE REHMI hope you'll join us, 800-433-8850. Send us your email to drshow@wamu.org. Feel free to join us on Facebook or Twitter. Good morning, everybody.

  • 10:08:00

    MS. KAREN TUMULTYGood morning.

  • 10:08:00

    MR. NAFTALI BENDAVIDGood morning.

  • 10:08:01

    MR. JOHN KINGGood morning.

  • 10:08:02

    REHMNaftali Bendavid, let's start with the economy. How did the Commerce Department's first quarter reading of economic growth compare with the expectations?

  • 10:08:17

    BENDAVIDWell, it's a little bit lower than expectations. Growth at the end of last year had been 3 percent. This was 2.2. percent. A lot of economists expected it to be a little bit more. But in some ways, this is -- in keeping with what we've seen really for months now, things are going OK. I mean, the recovery is underway, but it's nowhere near as fast or as broad as people had hoped for. Consumer spending is up. The jobless rate isn't going down that fast. The auto industry is doing well. They're sort of all over the place, and everybody is kind of in a wait-and-see attitude.

  • 10:08:45

    REHMSo what accounted for that slowing, Karen?

  • 10:08:50

    TUMULTYWell, there was -- basically, there's -- there has been all along some suspicion that part of the earlier rosier numbers were, in fact, seasonal and related to the weather, and so it could have been that some of the growth that you would normally see at this time of the year just got pushed a little bit earlier.

  • 10:09:10

    REHMSo then, John King, what do these numbers perhaps tell us about what we can expect?

  • 10:09:21

    BENDAVIDWell, if you look at these growth numbers and you -- the rollercoaster that has just been discussed that we've gone from the past few months then if you look at the last three weeks of filing of first-time jobless claims, they're pretty high -- up around the 330 -- 300, you know, above 380,000, right up around there -- 390,000 then 389,000. If they're under 350, economists say that's a sign of recovery.

  • 10:09:42

    BENDAVIDThree weeks in a row of that suggest that you're going to get next month what we got last month, a very disappointing jobs report. Jobs last month, 120,000 jobs is all the economy added. If that happens again, one, you have the economics, Diane. You have the proof that the recovery is very slow and very anemic. Then you have the psychology which affects us in a re-election year. Americans out there are discouraged. And I think, you know, not that he's going to celebrate this, but the biggest beneficiary of these bad numbers is Mitt Romney because this is not a recipe for re-election.

  • 10:10:09

    REHMBut, you know, it's interesting. You had the Fed predicting that economic growth is going to actually be better than expected. Does this or do these numbers indicate they may have to change their policy on zero interest rates?

  • 10:10:30

    BENDAVIDWell, I -- they've been sort of reluctant to change their policy, but if you look at their reports, the actual statements that they come out with month after month, they've gone back and forth. And, you know, they're supposed to be these oracles, but in many ways, they seem to me that they're kind of like the rest of us, you know? One month they're sort of more optimistic, one month they're less optimistic.

  • 10:10:45

    BENDAVIDI mean, I could put out a report that says that as well, and you'd get the sense that they're trying to read these tea leaves and really are a little bit mystified by why it goes up a little bit one month and then down the next.

  • 10:10:56

    REHMAnd what about housing, Karen?

  • 10:10:59

    TUMULTYWell, housing is the single biggest drag right now on the economy, and there was some bad but silver lining news this week, which is that home sales -- the decline in home prices may be slowing. It may be coming somewhere near the bottom. And if that's the case, that's very good news. It's bad news for people who want to go out and buy a house at rock bottom, but it may, in fact, convince people that this is the time to buy.

  • 10:11:28

    TUMULTYThe other thing is that as housing prices fall, more and more Americans find themselves living in houses that are not worth as much as they owe on those houses. And there is probably no single factor that makes people feel more trapped in this economy.

  • 10:11:45

    REHMJohn King.

  • 10:11:46

    KINGAnd that's what makes it so hard in the sense that on the one -- we were having this conversation -- how long have we been having this conversation? On the one hand, this is good. You need to get to the bottom so you can start rebuilding the foundation. However, as you get to the bottom, so many Americans looking at their own personal math, can't sell their house, or are underwater.

  • 10:12:02

    KINGTheir house isn't worth -- you know, the person next to her bought the same house foreclosed in much of the country -- if you go to Arizona, Nevada, Florida -- for half the price. So you're in this same environment, and it is a bit of a Groundhog Day. Some news is good, some news, not so good. And it's this tug of war. And another big dynamic -- and this is what frustrates the president and if you read the Fed report sheet -- corporate America is still sitting on, you know, all the gold in Fort Knox.

  • 10:12:24

    KINGThere's a lot of money that the expectation was they would start to spend that. They would start to hire. They would start to build new factories and build new plants. But their argument is the same argument we're hearing for a long time, uncertainty. They don't know where the tax code is going. They're waiting for the health care decision from the Supreme Court. So we're in this wait and see, and in the mean time, we have a very anemic economy.

  • 10:12:41

    REHMSounds as though they're waiting more for the election than anything else.

  • 10:12:46

    BENDAVIDI mean, I think that's possible. One interesting indicator of the psychology is consumer spending, of all things, is up, which suggest that the psychology is a little bit better. And speaking of the election, on Tuesday, Mitt Romney gave probably one of his series of opening speeches for the general election. And he asked a question, was sort of a version of the old Reagan question about are you better off four years ago -- today than you were four years ago.

  • 10:13:06

    BENDAVIDAnd the answer to that question doesn't have to be, yes, I'm way better off, for President Obama to win. But it does have to be, I feel like things are clearly headed in the direction. I wouldn't want to go back to Republican policies. And right now, I think we're not there yet, and a lot is going to depend on how that goes in the next few months.

  • 10:13:20

    REHMBut...

  • 10:13:20

    TUMULTYAnd, you know, the president doesn't even have until November on this. If you talk to pollsters, they will tell you that historically, if people aren't feeling a turnaround by the summer, by July or August, their feelings about the economy are essentially going to be locked in.

  • 10:13:39

    REHMHow much more can President Obama do for the economy?

  • 10:13:46

    KINGIn this environment, almost nothing in the sense that you did see a little bit of cooperation with the House Republicans on a small modest bill to help startup companies. Are there are one or two more of those out there? Maybe, but unlikely, given the closer we get to the election, the less likely that you're going to have cooperation on anything, Diane. You know, they've talked about what can we do to have this new oversight of the energy industry.

  • 10:14:07

    KINGThere's, you know, rather reckless speculation going on out there. Whatever administrative executive steps he can take, he will try to take. But in terms of jetting up job growth, jetting up expansion of the economy, the president doesn't have a magic switch and a magic lever.

  • 10:14:21

    BENDAVIDYeah, it's interesting. One of the things that's actually slowing job growth clearly is the shrinking of government. I mean, you see them in a number of incidents. We've seen these from a few reports actually that, you know, sometimes job expansion will occur in the private sector, but job reduction will occur in the public sector. But given the current environment, there's not much probably that can be done to change that.

  • 10:14:40

    BENDAVIDSo what you see the president doing, instead of concrete things that might help job growth, is trying to work on the message, and the message being at least we're headed in the right direction and, also, I'm on your side and the Republicans are not on your side.

  • 10:14:51

    TUMULTYHe's also trying to do things to help specific constituencies that he is very badly going to need in November. So we saw, for instance, this week a big, big push on student loans, which, by the way, now the amount of debt that people owe on their student loans actually exceeds the amount of credit card debt they have. So, you know, you hear the president talking -- he needs young people to be excited about him again.

  • 10:15:17

    REHMAll right. And you mentioned Mitt Romney's statement. Of course, he won five primaries this week quite handily. You've got Newt Gingrich saying he will drop out of the race. I don't understand the will. Why isn't that now, Karen?

  • 10:15:41

    TUMULTYIt really is a strange thing. Usually, when people drop out of a race, you get an hour's notice, not a week's notice.

  • 10:15:46

    REHMYeah. Right.

  • 10:15:47

    TUMULTYAnd in the meantime, he's traveling the country with a Secret Service contingent and...

  • 10:15:53

    REHMProbably going to appear on the Sunday shows, maybe?

  • 10:15:57

    TUMULTYIt's -- he just can't say goodbye. He just can't quit us.

  • 10:16:01

    KINGIt's a farewell tour. It's not a farewell. Look, this has been a rather bizarre campaign, and so this is just one last bizarre chapter. He said he wanted to keep commitments he had made to supporters down in North Carolina, and he says he wants to talk about ideas for one more week. He's not being critical of Gov. Romney. He's saying he will support Gov. Romney. So in the Romney campaign, they see no harm.

  • 10:16:19

    KINGA lot of the former speaker's friends see some harm in his own. If this is an effort to rebuild his legacy at the end, what is he doing? But it's over. It's just interesting getting there.

  • 10:16:28

    REHMWhat about taxpayers and Secret Service money, Naftali?

  • 10:16:33

    BENDAVIDWell, I'm sure they don't appreciate this, the fact that he's essentially not a candidate anymore but he's acting like one and drawing a Secret Service, you know, contingent like one. I mean, one thing about the Gingrich campaign that I think is very clear is that while he had his surge and he had his boom -- he won South Carolina, won Georgia, led in Iowa for a time -- I think that was not because there were some big groundswell of support for him in the Republican electorate.

  • 10:16:54

    BENDAVIDIt was reflective of concerns or doubts or questions about Mitt Romney. So the fact that Newt Gingrich may be going away, Rick Santorum may be going away doesn't mean that those questions around Mitt Romney do go away. And one thing we need to watch for is how that unfolds in the weeks and months to come.

  • 10:17:08

    REHMWhat about delegates that Newt Gingrich may have?

  • 10:17:14

    BENDAVIDWell, you know, I don't think there's any question, but that Mitt Romney is going to have the delegates he needs and that Newt Gingrich isn't going to, I assume, play some game withholding on to his delegates. You know, but what that does raise is the question of the role that the challengers to Mitt Romney play at the convention, and this is something that comes up pretty much every four years.

  • 10:17:32

    BENDAVIDYou know, do they get prominent speaking roles, and how do they handle that? I mean, how full-throated, how enthusiastic is their endorsement of Romney? There was personal animosity, deep personal animosity between Gingrich and Romney and actually between Santorum and Romney. So what happens now? How much has the party come together?

  • 10:17:47

    TUMULTYYou know, I think in that regard, the candidate to watch is the other candidate who is still in the race, Ron Paul. Four years ago, he was such an outsider that he had to have his own convention in Minneapolis. But his supporters, they haven't produced a lot of delegates for him, but they are so enthusiastic that I would really be surprised if he doesn't get a pretty visible role in this convention.

  • 10:18:10

    REHMAnd there is a Youth for Ron Paul meeting at Austin in city hall?

  • 10:18:17

    KINGIf you traveled at all in his campaign, the one thing you know about Ron Paul's supporters, they show up in huge rallies. They show up in rallies in greater numbers than they tend to show up on Election Day, but he has a great, fervent, young group of supporters. And there's a lesson to be learned for the other Republicans who have a problem with this constituency, no doubt about it.

  • 10:18:34

    REHMAnd, of course, I meant to say that meeting is at the University of Texas in Austin. Short break. We'll be right back.

  • 10:20:04

    REHMAnd just before the break, we were talking about Mitt Romney, Newt Gingrich, Ron Paul. Now, let's talk about Marco Rubio and the speech he made on Wednesday. John King, what do you have to say?

  • 10:20:21

    KINGHe delivered a very assertive foreign policy speech in which he sort of establishing himself, and he was introduced by Joe Lieberman, interesting thing there, a former Democrat, now an independent to more often on foreign policy issues in the last five or six years, has been with the Republicans with the McCain-Lindsey Graham vein of the Republican Party.

  • 10:20:38

    KINGBut Marco Rubio talking about America's role in the world, talking about how America has to lead, America has to be more assertive, not a neoconservative, you know, let's preemptively strike around the world to achieve our goals, but essentially saying that he thinks President Obama is a bit too passive, that he's not taking the leadership of -- whether it's international organizations and sometimes on his own.

  • 10:20:58

    KINGIt's a way -- this is a rising star in the Republican Party, and he's in the Senate. He's trying to get a little foreign policy credentials, and, of course, many people see because that was days after he campaigned alongside Gov. Romney, that, aha, we have an audition here. Yes, he'll be on the list. Is he likely to be the nominee?

  • 10:21:13

    KINGIf you listen closely to Gov. Romney's own standard and if you remember Gov. Romney's experience in 2008 having been vetted John McCain and then watching the Sarah Palin pick, which he won't say this publicly but privately, Gov. Romney didn't think much of, he has said, number one, ready to be president on day one. And his argument -- his central argument against President Obama is nice guy, not up to the job. Can you pick somebody with such little experience in national politics if that's your theme against Obama?

  • 10:21:38

    TUMULTYAnd, you know, that speech was very much in the mold of a presidential candidate's foreign policy speech in that we've seen this pattern. They are almost always -- whatever party they're coming from, they criticize their predecessor, the guy who's in office for not getting tough enough, almost always not getting tough enough on China, not getting tough enough on Syria.

  • 10:21:57

    TUMULTYBut when these guys get elected, then they always scale back on that. So he was very much echoing the lines that we've heard from a lot of the Republicans.

  • 10:22:05

    REHMTell me about Marco Rubio's revised DREAM Act, Naftali.

  • 10:22:10

    BENDAVIDWell, that's the other reason that he's been somewhat in the news recently. The DREAM Act is a bill that's pushed primarily by Democrats, although in the past, it hasn't been solely, that would give citizenship to people who were brought to this country illegally when they were very young but then go to college or go to the military. And it's very popular with Hispanics, and it's been one of the many reasons, I think you could say, that the Republicans are not popular with Hispanics.

  • 10:22:32

    BENDAVIDAnd Rubio's trying to thread that needle. And what he's doing is he's proposing a DREAM Act that wouldn't give citizenship to these folks but would give them temporary legal residence in the country. So he's trying to do sort of a modified or somewhat watered down DREAM Act, and in the process, I'm sure that he hopes this will help the Republican Party among Hispanics.

  • 10:22:50

    BENDAVIDFrankly, I'm sure he hopes it'll help him with Hispanics. I mean, you know, one of the reasons some Republicans want him chosen as vice president is this idea that he could help with the very important Latino vote. But most Latinos are in a very different place from him on immigration, so it's not clear that would help, and this may be an attempt to address that.

  • 10:23:06

    TUMULTYYou know, it's -- I talked to Marco Rubio about a week ago on this subject, and it was interesting because he said that this revised version of the DREAM -- he said his party has very deep problems with Hispanics. But that this revised version of the DREAM Act is not going to solve it, that it is going to address the very specific problems of a very small segment of the population. But he said his party really needs to sort of make a commitment in terms of policies and in terms of rhetoric, and that they need to present themselves election after election as wanting the Hispanic vote.

  • 10:23:40

    KINGAnd he is a big believer in the rhetoric part. If you listen to Marco Rubio, if you listen to Jeb Bush, who is a bit of a mentor to Marco Rubio back when he was younger in Florida politics, yes, they have some severe objections about some of the policy decisions Republicans have made or they have proposed. But they also say a lot of this is tone that even conservative Latinos, who agree, say, with the Arizona immigration law.

  • 10:23:59

    KINGIf you look at the polling, Latinos are split on the Arizona immigration law. You'll see some split there. There are liberal conservatives and independent Latinos out there just like everything else, but it's what they hear. Even if they agree with the Republicans and the policy, they hear this push away tone, this standoff-ish tone, the you're-not-welcome tone, and they find it hostile. And it has hurt the party not just in the last election and in this current election cycle. This is a generational problem for the Republican Party, given the growth of the Latino population.

  • 10:24:24

    BENDAVIDWell, and this is part of a broader dynamic that's happening in this election. Republicans are lagging with Hispanics. And they're scrambling to come up with a revised DREAM Act. They're lagging with women, and we saw today that they scrambled to come up with their version of the Violence Against Women Act. They're struggling with young people, so they're struggling to come up with their version of keeping student interest rates low.

  • 10:24:42

    BENDAVIDI mean, I think you have to say in the first couple of weeks of this general election campaign, if you will, the Democrats are kind of setting the agenda because they seem to have a lead with some pretty key groups, and Republicans are casting about for ways to catch up with him with these important groups.

  • 10:24:54

    TUMULTYAnd there are, most people think, nine really important swing states this fall, and in six of them, Latinos are going to be a very pivotal part of the constituency.

  • 10:25:05

    REHMHow about nine very important voices on the Supreme Court and the Arizona immigration law? Naftali, remind us what that law requires.

  • 10:25:18

    BENDAVIDWell, it did a few things. One of the provisions is perhaps gotten the most attention as it requires law enforcement officers when they make stops, if they have reason to believe that the person might be illegal or undocumented, they have to check it out, determine that status and act appropriately. One of the interesting things is the criticism of that act from certain quarters has been that that's racial profiling.

  • 10:25:39

    BENDAVIDI mean, why would you think somebody might be here illegally? Well, 'cause they're Hispanic. But that's not the argument that the government's making as it attacks this law in the Supreme Court. Their argument is solely that immigration is a federal issue, and that the states have no business getting involved and what is essentially a foreign policy matter that has to do with the country's borders. So, in some sense, the emotion around this law has not been transported into the Supreme Court where a very different and more legalistic argument is being made.

  • 10:26:06

    REHMSo can we glean anything from the way the justices reacted, John?

  • 10:26:13

    KINGWell, there was -- from Justice Sotomayor, one of this president's appointees, she essentially chastised the solicitor general, the president's top attorney in the case, saying, why don't you move on? You're not doing too well in this section of the law. Why don't you argue another section of the law? From the questions, it sounded like on the fundamental legal question, is this just a pure federal purview states have no right?

  • 10:26:35

    KINGThe justices seemed to be sympathetic to the states, saying, well, wait a minute, if you're not doing your job, the states are supposed to just sit there and do nothing? They're only doing this because you're not doing your job. So there appeared to be sympathy toward the state position. Will that translate into support for the specifics of SB 1070 as it is the Arizona law? That we will find out in June.

  • 10:26:52

    KINGBut it is very interesting on this immigration issue and on the health care issue. The questions from the justices led people to believe that the president's going to have a bad day on both of those decisions, and so there are big policy questions, huge state federal power policy questions that play in both cases. And then there's the huge potential, political impact, you know, whichever way the court decides what impact will it have on turnout in politics on the passion in the election campaign.

  • 10:27:16

    REHMKaren.

  • 10:27:17

    TUMULTYWell, one thing worth noting though is that justices made it clear that on this other issue of racial profiling that however they decide on this case is not going to prevent somebody from coming then and making the other argument that this is basically a discriminatory law.

  • 10:27:36

    REHMLet's talk for a moment about Secret Service and what in the world is happening. We've just heard that an investigation is now expanding into Secret Service behavior in El Salvador. Karen.

  • 10:27:55

    TUMULTYWell, the whole question, I think, in this whole scandal of, you know, Secret Service agents essentially, you know, boys gone wild when they go overseas, has been, was this an isolated incident, or is this a part of the Secret Service culture that needs to addressed? And I can tell you, you know, some of the people who are most horrified by this behavior are current and former Secret Service agents. I mean, this is one of the most revered institutions in this country.

  • 10:28:25

    REHMI certainly grew up thinking these were the best of the best.

  • 10:28:30

    KINGThey are the best of the best. I remember on 9/11, when we were being evacuated from the White House, watching Secret Service personnel surround the building. The vice president had been taken down to the bunker. They thought there might be a plane coming. All of the vital people they protect had been taken to safety, and yet here, we're 15 or 20 standing around the building thinking a plane might hit. And if the plane hit, they were dead, so they are the best.

  • 10:28:50

    KINGAnd what -- they do amazing, breathtaking things. Some of it we see as reporters, some of it we will never see as people around Washington to protect the president, to protect other key members and to protect foreign dignitaries when they come to this country. But...

  • 10:29:01

    REHMSo are these just a few gone rogue?

  • 10:29:04

    KINGWell, I think we -- you know, we don't agree on much in the country anymore. Like the president said, they were knuckleheads. I think Democrats, Republicans and anybody in between can agree these are knuckleheads. But to Karen's point, is this, you know, 12 Secret Service guys on this one trip, who were together or in different -- couple of different groups had too much to drink and did stupid, awful, reckless things? Or is it their behavior, in this case, part of a culture? Did they do it before? Is it part of a thing?

  • 10:29:28

    KINGI covered the White House for eight-and-a-half years. It does not surprise me at all. It would not have surprised me if one or two or three agents had had behavior like this happen. We see people go out into these clubs. Some reporters do it, too, so we're not, you know, pure here. To see so many do it and then to see some questions about the military as well, it does raise huge questions about discipline, standards and a culture. Is this some cultural problem?

  • 10:29:49

    BENDAVIDYeah. And I think in these situations, that's always the question, whether or not it's something that just happened once or is a broader issue. And there's actually a similar thing going on with this GSA scandal, where there was this over-the-top convention and, again, terrible judgment, taxpayer dollars being wasted. Nobody is defending it.

  • 10:30:05

    REHMNearly $1 million.

  • 10:30:06

    BENDAVIDMm hmm. And even the people involved aren't -- nobody's saying that it was in any way defensible. But -- and, of course, Congress has gotten outraged. This Congress always does. But the question is, you know, is this something that just happened once? Is this an aberration? Or are these conventions a broader problem within the GSA, within the government itself? And I don't think we have a clear answer to that yet. And so that's why sort of not just the explosion of the scandal, but the aftermath and the investigation is really important.

  • 10:30:31

    REHMAnd the reputation of the Secret Service is really on the line when you think about it.

  • 10:30:39

    KINGBoth the agency and its director.

  • 10:30:41

    REHMYeah.

  • 10:30:41

    KINGMark Sullivan has been the director. He was appointed director during the Bush administration. So...

  • 10:30:44

    REHMIs he going to hold on to his job?

  • 10:30:46

    KINGSo far, he has survived because Janet Napolitano -- Secret Service was moved into the Homeland Security Department...

  • 10:30:51

    REHMRight.

  • 10:30:52

    KING...in the reorganization after 9/11. It used to be in the Treasury Department. But Janet Napolitano likes and trusts Mark Sullivan. The president of the United States likes and, at this point, seems to trust Mark Sullivan. And he has very good relationships on Capitol Hill, and he very smartly started making phone calls and briefing members of Capitol Hill in the early days. They believe he acted decisively and quickly pulled them out, pulled the agents in question in Colombia out, and he's conducting an investigation.

  • 10:31:14

    KINGHe's also going to bring in an external panel of experts to look at the cultural question, including some women. But if you have -- if El Salvador turns out to be true and if somebody finds another one after that. He was also the director when the Salahis got into the White House. At some point, people say, you know, how many strikes do you get? But his personal credibility seems to be still pretty high.

  • 10:31:32

    REHMAnd how does all this reflect on the president and his bid for re-election, Karen?

  • 10:31:40

    TUMULTYWell, I think it just increases the cynicism about government and Washington and the fact that this happened on Barack Obama's watch, although it was interesting because one of these agents, one of our enterprising reporters found his Facebook page. And there were pictures of him sort of, you know, practically leering at Sarah Palin when she was campaigning, and he was part of her detail. And so Sarah Palin immediately went to the air to denounce Barack Obama, but it was pointed out that this happened when George W. Bush was president.

  • 10:32:15

    REHMOh, dear. Well, I guess the point is, as you say, if this continues to spread, then I think there are real concerns there. Another big ethical, moral issue with John Edwards' trial. John King, what's going on there?

  • 10:32:36

    KINGIt's a tabloid playing out in federal court. And, you know, most of the testimony is about trying to cover up an affair with a mistress and some pretty harsh language.

  • 10:32:45

    REHMShould it be there? Should it be there?

  • 10:32:47

    KINGIt is a serious question of whether the government believes it has evidence that he violated campaign finance laws to engineer this cover-up, to pay for this cover-up, to orchestrate this cover-up. And if he did that, of course it should be there. It's one of -- the case is not really about the details of the affair or the details of the cover-up. The question is, where did the money come from?

  • 10:33:08

    KINGAnd did he knowingly go to two very wealthy benefactors, have them give money while he was still on active campaign for president in sort of a shell game to, you know, to pay for this cover-up? If he did, that's a violation of campaign finance law. He says, no, I didn't. This was my campaign, and I was doing this cover-up, but I was doing it over here. And the money sort of never, you know, came into those accounts and the like. But it's a big test, and we're having a tabloid case play out over a very intricate campaign finance law.

  • 10:33:36

    REHMJohn King. He's anchor of CNN's "John King, USA" and chief national correspondent. You're listening to "The Diane Rehm Show." What am I hearing about Andrew Young and checks deposited or sent or given, double checking?

  • 10:34:01

    BENDAVIDYeah, it's -- I mean, this thing has devolved into a fairly complex discussion about...

  • 10:34:05

    REHMYou bet.

  • 10:34:06

    BENDAVID...about the money and not just where it came from but how it was used. And yesterday in court, Andrew Young admitted that he had sought money for, I guess, for a car, for Rielle Hunter, at the same time that that car had already been paid for by another donor. And I think this was really an attempt by the defense to shake the credibility of the prosecution's star witness. I think that's the dynamic that was going on there.

  • 10:34:30

    REHMDidn't he also buy a house?

  • 10:34:33

    BENDAVIDYeah. I mean, there's all kinds of stuff about commingling of funds and whether funds were for personal use or for campaign use, and then how they were, you know, actually distributed. I mean, the reason -- look, this case would have salacious interest for any prominent politician. You know, here we have -- the candidate's wife was ill. This was a mistress who then had his child, which he then hid. But I think perhaps more so because John Edward's campaign and his whole persona was built on sort of this moral foundation.

  • 10:35:00

    BENDAVIDYou know, he was a guy who was out there in politics talking about two Americas, right and wrong, poverty, and the people who believed in him saw him as a moral force on the American landscape. And I think, for that reason, this kind of betrayal, this kind of misdeeds that even he admits happened, I think is striking a particular chord with a lot of people.

  • 10:35:17

    TUMULTYYou know, ultimately, though, one of the biggest questions in this case is going to be what did Elizabeth Edwards know, and when did she know it? And, unfortunately...

  • 10:35:25

    REHMWhy does that make such a difference?

  • 10:35:26

    TUMULTYBecause if Elizabeth Edwards was aware of the affair, then that money, it could be argued, was being used to save his presidential campaign. But if, in fact, she was still in the dark about the affair, then his defense can argue he was just trying to cover it up from his wife. And, you know, sadly, Elizabeth Edwards is no longer with us to clear this up.

  • 10:35:52

    REHMSo how is that question ever going to be resolved?

  • 10:35:56

    TUMULTYThere is going to be a lot of testimony, including from Andrew Young, from -- a lot of the campaign aides are likely to be called up as well.

  • 10:36:04

    REHMHow much credibility does Andrew Young have at this point, John King?

  • 10:36:10

    KINGWell, it's -- that's -- it is the key issue. He is the star witness. And, look, he was -- he has admitted that he lied, and he initially said it was his child. He admitted that he has been -- he was the architect of -- the chief operating officer, if you will, of the cover-up. He admits that, and he now has conceded that some of the details in his book he wrote about just might not be exactly right. His recollection might not have been perfect.

  • 10:36:32

    KINGHowever, he is the government star witness, and his credibility is not going to be -- come out of this perfect. No witness ever does. There are questions about him. But John Edwards' credibility is the central question in the trial, and the government clearly feels that, yes, and we're seeing in his cross-examination. John Edwards has a good legal team. They're tough. But we're seeing -- in the end, the jury will decide and the judge will decide whether things stay in and out of his credibility. He's not a perfect character. There are no perfect characters in this drama.

  • 10:36:59

    BENDAVIDBut you also get the sense -- and I hasten to say I've not been at the trial or sat there, but certainly, reading the reports, you get the sense that the defense has made some progress in shaking his credibility. They pointed out discrepancies. Abbe Lowell, who is -- who's the attorney for John Edwards, is extremely experienced and savvy and has been around Washington, as well as courtrooms for a long time. And you feel like they're at least making some progress and raising questions about the veracity of the prosecution's star witness.

  • 10:37:23

    TUMULTYSpeaking of Andrew Young, I've been fascinated just because, having lived in Washington as long as I have, Andrew Young is the kind of extreme version of the type of person you see in a lot of politicians' office, the slavishly devoted aide.

  • 10:37:36

    REHMKaren Tumulty, national political reporter for The Washington Post. Short break. We'll be right back.

  • 10:40:04

    REHMAnd we're back. It's time to open the phones, 800-433-8850. First, to Orlando, Fla. Good morning, Jason. You're on the air.

  • 10:40:19

    JASONHi. Good morning. Thank you for having me. I just wanted to comment on the Arizona law and see what your panel had to say. You know, I think when you really look at the way that they're wording the verbiage of the way they're going to classify their protocol on stopping people, there's clear ambiguity in there, you know, the way they're dressed or the way that they look. Have they been through a ravine or through a field?

  • 10:40:46

    JASONOr, you know, the ambiguity is clearly there. It should provide them the, you know, the additional leverage to continue to profile people. You know, this is the way laws are always written.

  • 10:40:57

    BENDAVIDWell, you know, again, the issue of profiling is not coming up in the current Supreme Court case, but there, I think, is probably little doubt that it is going to come up in the future, not just politically but legally as well. And the argument that the caller is making is an argument that a lot of people are making, that to just say, you know, you -- if you sort of reasonably believe they may be illegal, that's so vague. Even with a protocol that the law enforcement officers are coming up with that it's so vague that there's really no way around a -- excuse me, a racial profiling issue.

  • 10:41:25

    TUMULTYYeah, I do think that this is, you know, not going to be the last that we have heard of this. But the justices don't usually make their leanings as clear as, I think, we saw this week.

  • 10:41:37

    REHMAll right. Let's take a call from Traverse City, Mich. Good morning, Bob.

  • 10:41:45

    BOBGood morning. How are you?

  • 10:41:46

    REHMFine, thanks.

  • 10:41:48

    BOBGreat. I -- earlier, President Obama -- a question was asked about what more he could do for the economy, for recovery, for business.

  • 10:41:56

    REHMSure.

  • 10:41:57

    BOBI thought he was given kind of an easy pass, so I wanted to review real quick. His taxation policies are causing a lot of negative consumer confidence. His tax policy for business is causing business people, like myself, to hold off on future investment until we know our cost. The health care is a huge business cost we don't know yet. And then he's got regulations happening right and left on business -- small business and medium-sized businesses, which give us a lot of visible cost.

  • 10:42:26

    BOBSo both things need to be reviewed. That's why he owns this economy and that's why he owns this recovery. He just continues to create uncertainty, which causes us to pull back and save what money we have left.

  • 10:42:41

    REHMJohn King.

  • 10:42:42

    KINGWell, welcome to campaign 2012. And Bob is not only making a point that you hear frequently from small business owners, that their taxes are too high, that the regulations -- there are more and more regulations under this president, and there's an uncertainty on top of all that because they don't know which way the Congress is going -- the administration is going. It's an argument you hear quite frequently.

  • 10:43:00

    KINGBob happens to live in Traverse City, Mich., which puts him right in the middle of a swing area of a swing state. So welcome to the campaign. And look, the -- you'll have a Democratic caller soon that will have a different argument, I'm sure.

  • 10:43:10

    REHMCourse. Of course.

  • 10:43:11

    KINGBut this is a defining difference in the campaign.

  • 10:43:14

    BENDAVIDAnd, you know, we talked -- the question was sort of what could President Obama do, but there's not much he can do by himself. A lot these things take acts of Congress, and there's huge, fierce debates anytime these things come up. You know, we just saw, you know, a couple weeks ago. The Democrats proposed this Buffett Rule. That was an absolute nonstarter for the Republican House.

  • 10:43:31

    BENDAVIDThe Republicans proposed this 20 percent tax cut for small businesses. That was a complete nonstarter in the Senate. I mean, everybody agrees that a lot needs to be done but nobody agrees on what it is.

  • 10:43:40

    REHMAll right. To Haverhill, Mass. Good morning, Richard.

  • 10:43:45

    RICHARDGood morning, Diane.

  • 10:43:45

    REHMHi.

  • 10:43:47

    RICHARDThank you. Mitt Romney liked to portray him as a smart businessman that can create jobs. Well, when he was governor of our state, we were 47th in job creation. And I love to see somebody do research study on when he had his Bain corporation to how many jobs were really created or how many jobs really lost. And it seems like his description for the economy is the Paul Ryan budget, deregulate more and give tax cuts more to the wealthy. I mean, but that's my opinion.

  • 10:44:19

    REHMAnd that is the debate, Karen.

  • 10:44:22

    TUMULTYYou know, and as someone who has tried to untangle this Bain record, which, believe me, it sends you rushing for the Advil because it is so hard. It's a private equity, so a lot of these records are not public. Many of the most controversial things that happened, companies going bankrupt or laying off people, would actually happen, you know, years after the Bain takeover.

  • 10:44:47

    TUMULTYSo actually, coming up with a hard figure -- and you then have to compare what would've happened to the companies if they hadn't been restructured. So those are the kind of answers that are very frustrating to reporters and really hard to get.

  • 10:45:00

    REHMAnd to Arlington, Va. Good morning, Rick.

  • 10:45:05

    RICKHello, Diane.

  • 10:45:06

    REHMHi.

  • 10:45:07

    RICKI'm -- I work for the government, for a major agency for three years. And I guess two things get me really angry about the GSA scandal. One is that it happened, but the other is the way the press and the Congress are taking it as typical of government conferences. Just anecdotally, one conference I recall in D.C. to save money, a very large conference, important. We could not serve coffee to people to save money.

  • 10:45:36

    RICKAnd not only could we not serve coffee, what that meant was during the coffee break, instead of mingling and talking, which is one of the values you get from conferences, people are going down to Starbucks and not seeing each other. Many times we had conferences that were required travel where really two or three people should've gone to learn about new technology and other things. Instead we were limited to send one person.

  • 10:46:02

    RICKAgain, it was not just not extravagant, it was foolish because the person we sent was supposed to report back, but you can't report back on many things that occur, and you also can't build those informal connections on which any policy in government works.

  • 10:46:19

    REHMI do understand Rick's frustration, Naftali.

  • 10:46:23

    BENDAVIDYeah, I do, too. And, full disclosure, my wife is a federal employee. But, you know, the Senate passed a bill or an amendment, you know, this week that required federal agencies to put their conferences and their conventions online and to sort of justify them. But there's a couple of big questions that are unanswered, you know, in this whole sort of fury around this whole thing. One is how common of a problem this is, but also how much -- the federal government has a lot of expenditure issues, and conventions, my guess, is a very small part of what the government spends.

  • 10:46:53

    BENDAVIDAnd so I think there's a certain perspective issue here. And there's another question that I wanted to mention, which is, you know, where was Congress? And as this thing came up and it was a huge deal, the inspector general made a report. And then they had five hearings and they were outraged, but part of their job is oversight. And I think one could fairly say that among the many people whose, you know, oversight in judgment comes into question here would be Congress, whose job after all is to oversee federal agencies.

  • 10:47:18

    KINGThey're the ones who appropriate the money in the first place. And you do see more aggressive oversight now. And it's interesting when you talk to the House Republicans, they say they're not doing it just to go after the Obama administration -- they admit the Iraq War and the intelligence estimates at the time would be one example -- that they didn't do enough when they had a Republican president and they were in charge of the Congress.

  • 10:47:35

    KINGBut there have been some partisan tensions in some of this oversight. I think actually probably a little less than we had anticipated. We'll watch as it goes forward. But to the call from Rick, I mean, there's an example of how whether it's the Secret Service or whether it's the GSA, let's hope it's a few small examples. But it does taint everybody else involved...

  • 10:47:52

    REHMExactly.

  • 10:47:53

    KING...the good players.

  • 10:47:54

    REHMAll right. To Rocky Mount, N.C. Good morning, Mel.

  • 10:47:59

    MELGood morning. I just had a comment about -- I'm 72, and I live on a fixed retirement and things like that. But my main concern is with this word cut that is being monitored by the Republicans, that everything -- every time the word cut -- seems the people in this country that have to spend money to keep the economy going. They see people losing their jobs, and they see people losing their homes. Why would they want to go out and spend money? And it's a mantra that -- it's hurting the economy and really holding it back.

  • 10:48:43

    REHMAnd certainly one of the cut, cut, cut has to do with the postal service.

  • 10:48:51

    TUMULTYThat's right. And this week we did see the Senate passed a bill -- the post office right now is losing $20 million a day. And, of course, you think about your own life and when was the last thing something important came in an envelope through the USPS?

  • 10:49:06

    REHMOh, I get lots of important things in envelopes.

  • 10:49:09

    TUMULTYYou're able to find it in the catalogs.

  • 10:49:11

    REHMYeah.

  • 10:49:12

    TUMULTYBut, you know, people are using email, people are using FedEx. They're using it basically. So this bill that passed the Senate was more of a Band-Aid to sort of hold the -- it together. But there is a bill being drafted in the House that would actually do some more fundamental structural reform in the post office that a lot of people think is needed, possibly eliminating Saturday mail delivery, closing down a lot of post offices. Now, mind you, in a lot of parts of the country, rural parts, to lose a post office is a major change in your life.

  • 10:49:42

    REHMBig deal. So is that going to happen? I mean, look at the political implications of closing post offices in small rural areas.

  • 10:49:59

    KINGSmall rural areas, which, I'm over-generalizing, tend to be more Republicans, however, and the Republicans are driving this ship right now. They say it's just -- it's a waste of money. It hasn't been well managed because of the competitive pressures and the technological changes. The House wants to go much further than the Senate. They don't think the Senate bill gives them enough power to either get rid off or rewrite the union rules, to find other ways to shrink the workforce, to shrink the services, to shrink the number of the footprint of the post office, if you will, around the country.

  • 10:50:27

    KINGYou have a pretty profound disagreement between the House and the Senate right now. There's no question the postal office -- postal service would shrink if there's a bipartisan agreement, but will there be one? We don't know.

  • 10:50:37

    REHMWho knows? To Clarksville, Ind. Hi, Kelly.

  • 10:50:42

    KELLYHi, Diane. I'm just so concerned that people are so short-sighted. I mean, we had eight years of a Bush administration that absolutely destroyed the economy, and Obama is not getting the credit for keeping us out of the Great Depression, for saving the automobile industry, for all of the positive things that he has done. And people are looking at Mitt Romney and acting like he's going to be better on the economy. No, he would be four more years of what George W. Bush gave.

  • 10:51:15

    TUMULTYYou know, Diane, I think you could get Bob from Traverse City on the show with Kelly, and the two of them would pretty much give us the entire framework of the economic argument at this election.

  • 10:51:25

    REHMBut doesn't Kelly have a good point?

  • 10:51:27

    BENDAVIDWell, it's certainly the point that the Democrats and President Obama are making. And one of the big areas this is going to revolve around, I think, is the auto industry because there you have a situation. We just saw a report from Chrysler -- I think it was yesterday or the day before -- that they're having an incredibly good quarter when it comes to profits.

  • 10:51:41

    BENDAVIDAnd the Obama administration, I think, is trying to do the job and, perhaps, could even do a better one of getting out the word that, you know, the Republicans didn't want to save the American auto industry. I did. I was right. Look what's going on. And those kind of debates are going to be -- will define the campaign.

  • 10:51:56

    TUMULTYIt's the line we keep hearing from Joe Biden. Osama bin Laden is dead and GM is alive.

  • 10:52:00

    KINGAnd the auto bailout itself started in the Bush administration but then brought to the finish line. And the Obama administration could take Michigan off the map for the Republicans. That's the state the Republicans thought they could get. Mitt Romney grew up there. His dad was governor there. But the Obama administration, especially now that Chrysler and GM seem to be on a firmer footing, say, see, I told you so, the government does have to help some time.

  • 10:52:18

    KINGBut on the broader economic arguments, as Karen just noted, you're getting it from the callers. There is a sharp divide, and it's not just between the president and his opponent. It's all across the country.

  • 10:52:26

    REHMAll right. To Cincinnati, Ohio. Hi there, Fred.

  • 10:52:31

    FREDHi. How are you doing, Diane?

  • 10:52:33

    REHMGood. Thanks.

  • 10:52:34

    FREDI just have a comment to make. I've started listening to this program late, but I heard someone saying, you know, that we need to keep the tax -- taxes -- tax cuts for businesses and all. I'm a small business owner myself. I believe that paying taxes is the right way to fix this economy. When I get a tax break, I don't use it to hire more employees, and I don't think most businessmen do. I worked with a lot of businesses. I think that we take that money, and we put it into our savings account. And we're not investing it.

  • 10:53:00

    FREDI think that we need to pay our taxes. We need to -- that will encourage growth in business, and we should certainly give business incentives in terms of buying capital equipment, et cetera. But I am a firm believer that taxes need to be paid to fix this economy.

  • 10:53:15

    BENDAVIDWell, you know, a lot of the debate that we've seen is revolving around tax policy in particular. And I was mentioning this earlier, but, you know, one way that the two parties kind of crystallized their argument is through tax messages. So the Democrats say, you know, millionaires should not be paying fewer taxes than younger people. And Republicans say we need a huge tax cut for everybody but particularly for small business. And it really -- in some ways tax policy defines, you know, what you want to do with the economy and your notions of fairness and of enterprise.

  • 10:53:41

    REHMNaftali Bendavid of The Wall Street Journal and you're listening to "The Diane Rehm Show." And to Birmingham, Ala. Good morning, Michael.

  • 10:53:54

    MICHAELGood morning. I just wanted to make a comment. A gentleman earlier mentioned that taxes were too high on businesses. You know, in my business, it's not taxes. It's lack of customers. That's the problem. And, you know, we've got lot of folks who are paying pretty low taxes right now, and we're not creating millions of jobs. That was the case in the Bush years, too. So I'm waiting for the magic of the marketplace to fix all of this.

  • 10:54:21

    REHMThe magic. Everybody is waiting for the magic.

  • 10:54:25

    KINGEveryone is waiting for the magic. You know, consumer confidence and spending is up a little bit. The question is, does it sustain itself? I also think one of the things we're learning here, Diane, from these calls is, you know, we sit in Washington sometimes, and we think we, you know, we speak for the country. Now, there are 50 very complicated and very different pieces of the puzzle, and the economy is different sometimes when you go state to state as well.

  • 10:54:46

    KINGAnd so when you sit in Washington, when you look at national statistics, it's like looking at a national poll in a presidential race. Sometimes they're helpful. Other times, they're useless. You have to actually go out and touch it and feel it.

  • 10:54:53

    REHMAnd here's an email from Matthew, who says, "How can everyone be so blind? Gas prices slow the economy. Extra money that people would have spent is being soaked up by big oil."

  • 10:55:12

    BENDAVIDAnd the last part is more subject of debate. But, I mean, there's no question that gas prices have been a drag on the economy, and you saw that from some other reports, from airline companies among others. You know, when gas prices are high, those things become more difficult. But it's another one of these examples we're talking about where it's not clear that anybody can do anything about it.

  • 10:55:29

    REHMAll right. One last quick call from Oklahoma City. Good morning, Eric.

  • 10:55:35

    ERICHi. Good morning, Diane.

  • 10:55:37

    REHMHi.

  • 10:55:38

    ERICI am just wondering -- a little clarification about the post office thing with the $20 million a day that they're losing. I'm under the impression that the Congress made them pay their retirement benefits for 100 years out and that's why they're losing their money. Wouldn't it make sense to just get rid of that, and then they'll become solvent again?

  • 10:56:00

    TUMULTYWell, actually, part of the House bill is dealing with some of those issues as well. The post office -- I think it's three-quarters of their costs are labor costs, and that's kind of built in to the whole problem here.

  • 10:56:14

    REHMBut I think he's right about having to pay forward on the retirement. I don't know how many years.

  • 10:56:24

    BENDAVIDYeah. And both bills actually do tackle that. I think that's recognized as one of the challenges, and both members of the House and Senate have looked at that and have tried to restructure that.

  • 10:56:32

    REHMWell, it's been yet another week of so-called news and where it takes us, nobody knows. Naftali Bendavid of The Wall Street Journal, Karen Tumulty of The Washington Post, John King of the CNN. We'll watch the news and be back here again next week. Thank you, all.

  • 10:56:57

    TUMULTYAnd thank you.

  • 10:56:58

    KINGThank you. Have a great weekend.

  • 10:56:58

    REHMAnd thanks for listening. Have a great weekend. I'm Diane Rehm.

  • 10:57:04

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn, and the engineer is Tobey Schreiner. A.C. Valdez 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 drshow@wamu.org, and we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.

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