World leaders react to a historic shift in U.S. policy toward Cuba. Pakistan buries victims of a school massacre by the Taliban. And U.S. officials say North Korea is behind the hacking of Sony Pictures. A panel of journalists joins Diane for analysis of the week's top international news stories.
President Obama defended his campaign’s attacks on presumptive GOP nominee Mitt Romney’s tenure at Bain Capital, after Newark, N.J. Mayor Cory Booker called the ads “nauseating.” The U.S. housing market showed signs of strengthening as sales of both new and existing homes rose. Four Secret Service agents implicated in the Colombian prostitution scandal said they would fight their dismissals. Ron Elving of NPR, Susan Davis of USA Today and David Leonhardt of The New York Times join Diane for analysis of the week’s top national news stories.
- Ron Elving Washington editor for NPR.
- David Leonhardt Washington bureau chief, The New York Times.
- Susan Davis chief congressional reporter, USA Today.
David Leonhardt of The New York Times, Susan Davis of USA Today and Ron Elving of NPR discuss why investors are upset and suing Facebook and Morgan Stanley.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. More mixed signals on the economy this week. Sales of new and existing homes rose in April, but business investment spending fell for the second month in a row. President Obama defended his campaign's attacks on Mitt Romney's tenure at Bain Capital. And three IPO investors sued Facebook and Morgan Stanley charging disclosure fraud.
MS. DIANE REHMHere in the studio for the domestic hour of the Friday News Roundup, Ron Elving of NPR, Susan Davis of USA Today and David Leonhardt of the New York Times. Join us as well, 800-433-8850. Send us your email to email@example.com. Join us on Facebook or Twitter. Good morning, everybody.
MS. SUSAN DAVISGood morning, Diane.
MR. DAVID LEONHARDTGood morning, Diane.
MR. RON ELVINGGood morning, Diane.
REHMGood to see you. Ron Elving, what's the CPO predicting? It's talking about a contraction if certain things like a fiscal cliff occur. Explain that fiscal cliff.
ELVINGAs we have been talking about now for about a year, the Congress is approaching a point where the tax cuts are going to expire that we have been temporarily extending back to the early Bush years, the Bush tax cuts as we call them, and where the sequestered amount -- this is a cutoff in federal spending -- of really unusual amount, really one could say an unprecedented draconian kind of sudden cutback in federal spending are going to occur in 2013.
ELVINGNow, most people have regarded these as a couple of swords of Damocles that Congress was going to operate under, but eventually do something to keep from falling. Now, it's not so clear. They keep putting it off and delaying. And now, of course, we have the presidential race, and we have Mitt Romney saying, maybe all these cuts should be postponed into 2013. Maybe we should get to the point where we have a united Republican Congress and presidency.
ELVINGMitt Romney, of course, talking. So it's not clear that Congress is going to do anything, even though we had, for some time, assumed that when we got to December of this year, they would have to act.
REHMHow could a track record does a CPO have, David Leonhardt?
LEONHARDTWell, no one has a great track record in forecasting the economy. But among all the highly flawed track records out there, the CPO is pretty good. They take it really seriously. They're not a partisan group. They try their best, and they've done a lot of great work over the years. And I think what's important about this report is that it lays out in really stark and specific terms the spectrum of choices that Congress is facing.
LEONHARDTOn the one hand, if you let all the Bush tax cuts expire, if you let all the Obama stimulus tax cuts expire, if you let these deep cuts, depending how you look at them, they're deep or less deep, but if you let these cuts in both domestic and military spending take effect, you will do enormous good for the country's budget deficit. The medium term budget deficit that we've all been wringing our hands about essentially goes away.
LEONHARDTOn the other hand, you probably send the economy back into recession. And the reason, as Ron was saying, that this is a real possibility is that two sides can't agree on the solution.
REHMSo, Susan Davis, what are the odds that Congress and the White House are gonna let this Bush era tax cuts expire?
DAVISWell, I think it so much depends on what happens in November. Both sides have essentially said, this can't be -- we need an election to weigh in on what we're gonna do. I think the lame duck session of Congress after Election Day before this December 31 to January 2 fiscal cliff is gonna be a really decisive time. Now, Mitt Romney said if he wins, if he beats Barack Obama, he wants Congress to wait till he's president so he can deal with it.
DAVISI think if Barack Obama wins reelection, Democrats are gonna have a much stronger hand in negotiating with Republicans on the Bush tax cuts. Essentially, Democrats are -- part of the reason why they wanna wait until after the election is they feel that they have no leverage in this argument. And all these efforts, deficit reduction efforts in this Congress, tax cuts or revenue has -- and essentially almost off the table.
DAVISRepublicans are almost universally opposed to any form of tax cut. But with the -- one Democrat called the action forcing event of the expiration of the tax cut, it gives Democrats some leverage. I think that they would be willing to exchange some forms of tax revenues for reworking what we call in Washington, speak the sequester, these automatic across-the-board cuts.
REHMBut what about the Pentagon and cuts that could happen there automatically, David?
LEONHARDTI think the Republicans would get rid of those if they control the government. So I think if you have a Romney presidency -- and if you have a Romney presidency, you probably do have a predominantly Republican Congress. Then what you're looking at is all the Bush tax cuts get extended. Probably most of the Obama temporary ones go away, the Republicans cancel the cuts to the Pentagon, and they make maybe even deeper cuts to some domestic spending.
LEONHARDTThe net result of all that is still a significantly higher deficit. But Republicans have basically shown in the last 10 or 20 years, they'll take tax cuts and accept higher deficits with them. If Obama wins, it then becomes much more complicated, and I think you're more likely to see some sort of meld of things being extended or not extended.
REHMSo, Ron Elving, are you expecting nothing to happen before November?
ELVINGIt's hard to say that's what we're expecting. There will be certainly a great deal battle over this. Whether or not we get a global deal of the kind that was contemplated in the summer of last year before everything fell apart in August, that seems unlikely at this point. But you do begin to hear people saying, it would be a lift. It would be a boost for the prospects of all incumbents running this fall if the government could seem to get its act together, if there could be some sort of bipartisan deal.
LEONHARDTNow, that bipartisan deal would, by its very nature, if it were effective at all, make a lot of people unhappy. And you don't wanna make people unhappy right before an election. So this is going to be a difficult challenge, but I wouldn't wanna rule out the possibility that Congress sees its own best interest in making a deal before November.
LEONHARDTThe only way -- sorry, Diane. The only way I see a deal being really likely, and I agree with everything Ron just said, is if the Republicans in Congress decide this summer that Romney is likely to lose. That happened in '96 with Dole. And so that would then really increase the Republican's incentive to do a deal with Obama to save their own congressional majorities. I think that's unlikely. I think we're unlikely to be sitting here in July and August saying, wow. Mitt Romney looks like a huge underdog.
REHMBecause right now, they are pretty much even.
LEONHARDTYeah. And because you'd really need to see the economy take off over the next couple of months to change that fundamental dynamic.
REHMWhat about new and existing home sales? That seems to be looking a little better, Susan.
DAVISYes, for sure. I mean, there are -- in all the talk of the current economy, there are indicators out there that things are getting better. And I don't think we can separate that from the presidential election. New home sales are rebounding. They're going up. They're still far below what they should be in terms of what is seen as a healthy economic indicator. But I think for the first time in a long time, people are starting to see a turnaround in the housing market, which is absolutely critical.
REHMAnd what about what's happening in Europe, Ron, and how that could affect the economy here?
ELVINGAmazing the degree to which we're paying attention to Europe in this American election. And that's obviously because of the warfare in Europe between austerity and growth advocates and...
REHMSame thing here.
ELVINGIt is their version, if you will, and I don't wanna overextend the analogy here. But this is, to some degree, their version of the austerity versus growth argument we're having now in Congress. There are a lot of people in Congress who are willing to take some restriction in growth if it means we shrink the budget deficit, if we live within our means, as the expression goes, if we set ourselves on a better fiscal course for the long term. There are even some people, Ron Paul and others, who have said, if it's going to take some serious disruption in our economy to get a grip on our federal budget deficit, let's take our medicine now. It would only be worse down the road.
REHMRon Elving of NPR, Susan Davis of USA Today, David Leonhardt of The New York Times. Do join us, 800-433-8850. What happened to Facebook, and why are investors suing Facebook and Morgan Stanley, David Leonhardt?
LEONHARDTWell, there are a couple of answers to that. In some respects, you can say they're probably suing 'cause they're angry that the stock hasn't done better, right? That if a bull market can paper over a lot of other disagreements and arising stock for an individual company can paper over a lot of disagreements, Facebook has come out, it turns out, that its, A, coming out at a time when the news about Facebook's business is not as positive as its been at some other times, and B, it looks like this may be a little bit frothy.
LEONHARDTIt may be a little bit of a bubble as is happened in the past. People may have gotten a little over excited about what is, by any definition, a fantastically dynamic business, but maybe not quite worth as much as people thought. And so now you -- and the second thing is that there's some sense that the banks and Facebook may have hidden some information. And so it really -- it went from this very happy bubbly business story to a much darker business story more quickly than the average bubbly story turns.
REHMSo, Susan, what is it precisely that people are so unhappy about that could have happen before the sale began?
DAVISAnd this goes back into some of the anger at Wall Street that we've seen in the past couple of years. So the idea is that the major bank underwriters of Facebook, Morgan Stanley in particular, that before the company went public, they received some information -- the big banks received some information that maybe Facebook wasn't worth exactly as much as they would like it to be or that the estimates were a little bit too rosy.
DAVISAnd this was information that average shareholders were not given. They were not given -- they were not privy to the same information. So there's this idea that there's one set of rules for the banks and there's one set of rules for everybody else. I don't think it helps Facebook that it comes on the heels of the JPMorgan $2 billion loss, and it's, once again, firing up this feeling that Wall Street just plays by its own set of rules, and we are victim to it.
DAVISAnd I think you've already seen members of Congress call for an SEC investigation into Facebook in what went down and how that information was both gathered and disseminated.
REHMSo I realized you're not an attorney, Ron Elving, but do the three people who are suing because of what Susan just said have a case?
ELVINGIt seems to me it would be fun to argue their case, whether it holds up in court, whether it passes all the applicable laws as to Morgan Stanley has been saying is another question for a court to decide. But it does seem it would be fun to argue their case that they should've been given just the same information that any Morgan Stanley insider would've been given. And they should've known as much. Also we have the whole question of whether or not NASDAQ was really ready to handle this kind of volume and the interruption...
REHMWhich was a mess.
ELVING...of the sentiment of they're not being able to handle it was key.
REHMRon Elving, he's Washington editor for NPR. We'll take a short break. When we come back, we'll talk about the Secret Service and the Government Services Administration.
REHMAnd welcome back to the domestic hour of our Friday News Roundup this week with Susan Davis of USA Today, David Leonhardt of the New York Times and Ron Elving of NPR. Let's talk about what happened to the Secret Service this week. Susan Davis, on Wednesday, Mark Sullivan, the director of the Secret Service, appeared before Congress. Anything new?
DAVISOne of -- the most interesting take-away from that hearing was that there seemed to be a real divide between the senators questioning him and the Secret Service director over whether the Secret Service has a cultural problem, whether this was an isolated incident or whether -- as it is sometimes been referred to as the secret circus, and the pattern of behavior of these agents, both domestically and abroad, that brings questionable character issues.
DAVISAnd Mark Sullivan, the director who I would say members of Congress almost universally have given really high remarks in how he's handled this investigation. But there is definitely moments in this hearing where he fundamentally would not agree with the premise that there's a problem, a cultural problem within the Secret Service. And Susan Collins, who's a Republican from Maine, said he -- there's just a disconnect. There is so much evidence that there's clearly a cultural problem here, and he's just not getting it. This is an isolated incident.
REHMAnd, Ron Elving, Susan Collins talked about the fact that these Secret Service agents used their own names as they registered, brought prostitutes in. They seemed to have no concern about that.
ELVINGStrongly suggesting this was not an inaugural outing for any of these four, and this was not something that they thought they were going to have to hide or cover up. They registered the prostitutes with the hotel, which was apparently a standard procedure for the hotel and apparently standard procedure for the agents. Not that they go to Cartagena all that often but they do go other places.
ELVINGAnd, of course, the talk was in the days after the scandal originally broke that wheels up parties would happen for agents who were left behind when a president would leave a particular venue. And that this was longstanding, that this went back many years through several administrations and that this was part of the culture, if you wanna use that particular word. This is a hands-off agency to a large degree.
ELVINGThis is one of those agencies, and I think some of this is true of GSA too. We're gonna get to GSA. But it's one of the ones that the Congress has generally regarded as being well-run, effective. They're doing an important job. They're protecting the president. They're protecting a lot of other important people. You don't wanna mess with them too much. Don't ask too many questions.
REHMSo what's gonna happen here, anything?
ELVINGI suspect that these agents will have hard time getting their jobs back, that they will be made the martyrs or the sacrificial lambs, if you will, for whatever may have gone on and whether it was widespread in the agency or not. And I'm certainly not saying that I know the extent of its widespread-ness, but let's just say that there have to be consequences when something of this degree of embarrassment happens to an agency this important in the federal government.
LEONHARDTI think when this first broke, you felt like, wow, this could really end up having a sweeping effect on the Secret Service. We could have not just assuming that this had gone on before because of the way they behaved in this case, but we could get tales of this having happened before. And we could have women all over the world come forward.
LEONHARDTAnd because that hasn't happened and because the agency itself doesn't exactly seem to be highly introspective about this at this point, they seemed to be trying to close ranks instead, I think there's a chance it's gonna work for them, and I'm not sure that's the right thing. But I think there's a chance that this won't, in fact, lead to sweeping changes. And we're gonna talk about -- scapegoats is a hard word to use 'cause these guys did things that are deserving of punishment from what we can tell.
LEONHARDTBut we're gonna end up with people who -- we're gonna end up with a very small number of people who face very dire consequences maybe deserve. But that you don't actually see much of a systemic change.
REHMAll right. And let's turn to the Government Services Administration. The GSA executive responsible for that $823,000 conference in Las Vegas is now out of the job. His name is Jeffrey Neely. GSA wouldn't say whether he resigned or was fired. We have a photograph of him this morning, Susan Davis. Describe that photograph, if you would. I thought it was rather bizarre.
DAVISIt's a pretty telling photograph. We don't know whether he resigned or fired, but I think looking at this photograph might give you an indication of which one it was. He's sitting shirtless in a bathtub with two glasses of red wine behind him overlooking Las Vegas during the trip -- the GSA trip out there for the conference that cost almost $1 million and included things like mind readers and rodeo clowns and -- I do think, you know, when you -- there's a sort of government accountability.
DAVISI do think what separates this GSA from Secret Service is -- and what makes it more scandalous is that GSA involved taxpayer dollars. Secret Service involved personal failings of agents, but it wasn't necessarily an abuse of taxpayer dollars or -- and it was on off-duty time. This was on-duty time on the government dime, and it is so egregious and so over-the-top in a time of, you know, when everyone's mindful of the economy, of government spending, it just seemed completely tone deaf and completely irresponsible.
REHMAnd you're going to have a Justice Department inquiry go into this even though Jeff Neely is gone, David.
LEONHARDTYeah, and as we should, right? I mean, we're just talking about the fact that when you have the sort of allegations of misbehavior at any kind of organization and certainly a government agency that's dealing taxpayer dollars, you don't just wanna hold individuals responsible. You wanna figure out what happened and how to prevent them in the future. What I love about this photo is that the two wine glasses, there are two wine glasses here next to his bathtub.
REHMBut we're only seeing one person.
LEONHARDTOne person, yeah. And the wine glasses are different. They're shaped different, so I'm wondering were they...
DAVISWell, somebody had to take the picture.
LEONHARDTWere they different varietals of wine here? I'm not sure what's going on.
REHMWhy would you do this?
ELVINGShouldn't it be item one on the government service manual that the only time you should every have your picture taken as a government official you should be wearing a tie...
ELVING...and a shirt and everything else?
REHMSomething like that. One other sad scandal, the jury in John Edwards' campaign corruption trial has now begun a six day of deliberations. No decision yet, though they have asked for more exhibits to aid their process. What does this long deliberation from the jury indicate to you, David?
LEONHARDTWell, it doesn't seem great for the prosecution. I mean, I don't think we know, but I think most people would say that in a case like this, it certainly suggest that there's some amount of disagreement, and that they didn't go in there and immediately decide that the prosecution proved its case. Now, they could still get to some number of convictions, but it's certainly not what the prosecution would have hoped.
REHMThere are an awful lot of people who feel that this case should not have gone to a jury trial to begin with, Susan.
DAVISPart of the problem is campaign finance laws. They're very -- it's almost -- when we talk about Wall Street regulations, there's a lot of gray area in how you can you can spend money, how you can transfer from accounts. And part of the prosecution's problem is they didn't have a slam dunk case. I think John Edwards has certainly been found guilty in the court of public opinion, but whether or not he knowingly and willfully violated campaign finance rules is difficult to nail down in terms of how the money was transferred.
DAVISNow, the idea that they've been deliberating on six days, I think, is probably a sign in John Edwards' favor because if this was a simple case, I think they would probably made a decision by now. And the fact that they've asked for more information suggests that there's probably quite a bit of dispute over what exactly he did wrong.
ELVINGAnd it could have implications for what the judge might eventually hand down with his verdict, rather with his sentence if the verdict is adverse to John Edwards. We'll see. A big question here is just how much is he going to be punished. Are we gonna be talking about a fine? Is he really gonna be given some kind of super jail time? Is he really gonna be given a long sentence?
ELVINGAnd the other thing to bear in mind here is that with no sympathy for his behavior at all, he is not on trial for bad behavior, and he's not trial for what people are angry at him about. He is on trial for what are essentially technical violations of campaign finance laws. And to be sent to jail for many years for that, I don't think we have a precedent.
LEONHARDTThere's an interesting analogy here to another story from this week, which is the Rutgers case. This is the case in which a student at Rutgers videotaped his roommate having sexual relations and then essentially got other people to watch it. And the kid who was videotaped ended up committing suicide. It's a horribly tragic story. No one, I think, would question the idea that the behavior here was odious, right? That is was just terrible behavior, same in John Edwards case. Was it criminal? Was it deserving of a significant prison sentence?
REHMUp to 30 years.
LEONHARDTUp to 30 years, and ultimately, the Rutgers kid got, I think, 30 days, right? In both of these cases, I think you see people struggling with this question of when does odious, immoral behavior cross the line into felony behavior.
REHMAnd that was indeed the final judgment from the judge that it was odious behavior but not deserving of that kind of prison sentence. Ron Elving, you asked during the break about consumer sentiment from Reuters/University of Michigan. That survey was released this morning, the final May consumer sentiment index, 79.3 percent, the highest reading since October 2007. And the index came in at 76.4 percent in April. What does that say to you?
ELVINGWell, that's possibly the best economic news and therefore political news...
REHMOf the week.
ELVING...of the week for President Obama and the White House. That is a measurable increase over the last month. And, look, here's a couple of contextual numbers since that's just an abstract number. Average consumer sentiment in the country, as measured by the University of Michigan, for presidents who are re-elected has been in the 90s. The average for presidents running for re-election who were not re-elected -- we're talking here about Jimmy Carter and George H.W. Bush -- was 76.
ELVINGSo you don't wanna be bumping along right at 76, the average for losers, when you're getting this close to your re-election month. So the White House really wants to see that number get up over 80 at a minimum, and it wants to see it moving in this direction.
REHMAll right. And let's talk about these polls showing Obama and Romney in a dead heat. Are these problems for President Obama, Susan?
DAVISI don't know if they're problems for him. I think it certainly shows that this is gonna be a competitive national election. I do think in the past couple of weeks you have -- in conversations with Republicans, you start to see a certain amount of optimism coming from them that they didn't have particularly during the primary battle, which I thought was sort of said in a negative tone. And there was a lot of confidence, at least in Washington, that Obama was in a pretty good place. National polls, at this point, don't really matter much.
REHMThat's what I was going to ask.
DAVISIt's a sign that the race is competitive and that it's going to be a tight battle, but there's really only 12 to 15 states that are critical in deciding this presidential election. And some of the poll data that came out beyond the national data in three crucial swing states -- in Florida, Ohio and Virginia -- there's been dueling polls. Recent NBC poll out this week showed Obama with single-digit leads in all three states.
DAVISAnd then a Quinnipiac poll in Florida had Romney up by six. So it depends on polling methods, sample size data. There's different -- but I think the key point, the key takeaway, is that in critical battleground states, Mitt Romney is running a competitive campaign.
REHMSusan Davis. She is chief congressional reporter for USA Today. And you're listening to "The Diane Rehm Show." What about questionable or bad news for Romney, David Leonhardt?
LEONHARDTYou mean on the economic front?
REHMOn every front.
LEONHARDTOn every front. Well, so I would say the biggest disadvantages that Romney has are, one, the economy is recovering. If you look historically, there is nothing that predicts the outcome of presidential elections like job growth in the year before the election. If you go back to World War II, there are only three elections where the result is different from what job growth would have predicted. And they're all elections we can explain away.
LEONHARDTIt's the Watergate election in '76. It's the Vietnam election in '68, and it's Ike's massive personal popularity in the '50s. In every other election, you look at job growth in the last year, and it's a really great predictor because it really influences people's views. Even in 2000, when the economy was at such a high level, it had slowed markedly. And so Al Gore did roughly as well as you would have expected for someone running essentially as an incumbent.
LEONHARDTThe economy now seems to be picking up steam. It is not at a level that Obama can coast on, but it is at a level that I think makes Obama a slight favorite, very slight favorite. And I think that's the biggest problem for Romney. I think we can get into all kinds of other things about who's running a better campaign, about who's a better candidate. Romney is not a great natural candidate, but I think the economy is the biggest problem for him. And if it weakens, which it very much could, it will quickly become his biggest strength.
REHMAnd what about the fact that he is a Mormon, Susan?
DAVISYou know, I think, in a different year, I think that the faith question may be more of an issue. I do think that with the -- economy is still number one. I don't -- he doesn't necessarily bring it up. Democrats aren't gonna use it against him. I do think that there's a certain segment of voters that it will be an issue with, particularly evangelical voters. But I also think among those voters, the desire to beat Obama might outweigh any reservation they have with Mitt Romney.
DAVISI will say when you were asking about problems with Romney, one thing that really strikes me and has been consistent in the polls is I do think he has a problem with female voters -- I don't know if it's particularly Romney, but Republicans overall. In the same swing states, Barack Obama has -- most of them double-digit leads among women voters.
DAVISI think, you know, there's been a lot of talk about women's issues this year. I think the contraception debate fueled a lot of it. I think that -- and I think Democrats have driven and fueled the issue as much as possible because they see the advantage in this. Women, historically, tend to vote in greater numbers than men. They tend to vote disproportionately in favor of Democrats.
DAVISAnd if Barack Obama is going to win re-election, he is going to need an exceedingly strong turnout among women voters. So when they see things like a 12-point edge over Romney among women voters in Ohio, I think they take that as a really good sign. And I do think when you see Mitt Romney doing things like emphasizing Ann Romney, his wife, and talking about women's issues, they are aware that this is a problem, and they need to close that gap.
ELVINGWomen voters are the most important voters because most of the voters are women. It's just that simple. They're an outright majority of the voters. I'd say right now Mitt Romney has as big a problem, if not a greater problem, though, with Hispanic voters because the polls show him with only 29 percent of the Hispanic vote.
REHMAnd why is that?
ELVINGWell, throughout the entire primary season, of course, he was competing with the other Republican candidates for the Republican nomination to see who could be most hostile to certain kinds of immigrants. Now they certainly are not hostile to regular legal immigrants, people who have followed the full system. But they seem to be hostile to a lot of people who are in this country, some of whom are related to people who are here legally, and some of whom are not. And they seem to talk a lot about deportation and higher walls and delegitimizing certain parts of the population.
REHMAnd what about Romney's pledge to lower unemployment to 6 percent by the end of his first term, David?
LEONHARDTThat's a great pledge because it is -- it happens to be almost exactly what the private forecasters predict unemployment will be regardless. So it's setting sort of a low bar. I think what's interesting at some of these swing states is both because of the objective state of the economy and how bad it's been for a lot of working-class people and middle-class people, and because of Obama's own profile, he -- Obama has some real vulnerabilities among, particularly, white voters, people who are not college graduates in places like Ohio.
LEONHARDTAnd you could have imagined the Republicans nominating someone who really connected with those voters and would have caused enormous problems for Obama, and instead they nominated someone who also has real troubles connecting with those voters. And it's gonna be interesting to see which one of those candidates can ultimately get voters who are suspicious of both of them.
REHMDavid Leonhardt of the New York Times. Short break here. And when we come back, we'll open the phones. I look forward to hearing from you.
REHMAnd it's time to go to the phones. Let's go first to Miami, Fla. Good morning, Rob.
ROBGood morning, Ms. Rehm and guests. I just wanted to say about the media and how they are addressing the Bain issue. President Obama was specific. He didn't say that these types of companies were inherently evil. What he was saying is that Romney had made a point that he can create jobs. And we know that this type of business is not in the business of creating jobs, but in the business of making money.
ROBHe can't talk about his time in Massachusetts because he's 47th out of 50 states. And I just wish Cory Booker and the media would get this right instead of suggesting that he's against these type of businesses. Thank you.
REHMCory Booker's comments were interesting, weren't they, David?
LEONHARDTYeah, they were. They definitely were. I mean, a lot of this discussion on both sides reminds me of the famous line from Captain Renault in "Casablanca" when he announced he's shocked to find gambling going on here, right? I'm shocked to find politics going on in a presidential race. And I just really can't get too upset that one campaign wants to talk about the fact that Obama had in his life -- a very influential person in his life, a reverend who is incendiary and, to some people, offensive.
LEONHARDTAnd I can't get worked up about the fact that Obama wants to talk about this firm where Romney spent his whole career and Romney bases much of his campaign on. I think it should be the subject of a vigorous debate. I don't think it's the most important thing out there. I think their policies are. But I think it's legitimate to talk about. And I think the caller is right that what Obama needs to do -- the caller sounds like an Obama voter. What Obama needs to do is focus not on the notion of private equity, but specifically, about what he finds problematic with Romney's career at Bain.
REHMAll right. Let me follow up with an email posting from Renee here in Washington. She says, "I'm frustrated to hear the discussion around Governor Romney's Bain experience. Business is not government. Is the public actually confused about that? How relevant to the operation of government is that experience? Enough to be central to the campaign?" Ron Elving.
ELVINGI'm not certain that that's going to be the central thing that people focus on. I think people want the government and the economy to work well together. They want business and the government to be, in some sense or another, coordinated. But as soon as they start to really coordinate well and produce actual changes in policy and in the economy, people get uneasy. That's too much big government. That's too much government getting involved.
ELVINGSo this has been a dynamic for as long as we've had politics in America, how much should the government get involved in picking winners and losers in affecting how the economy works.
REHMBut then, Susan, you had Cory Booker make his statement that he wasn't interested in hearing about Bain, that that shouldn't really be the focus of the campaign. And then he apparently got word from the White House that they weren't too pleased, and he backed down.
DAVISIt was definitely not a good week for Cory Booker. I don't know if it's gonna affect the Romney campaign. I don't know if -- the Obama campaign certainly isn't gonna be calling on Cory Booker to be a surrogate anytime soon. I also think -- just in terms of context from what Cory Booker said, I think it's important to remember that his home state of New Jersey has a lot of wealthy private equity-based citizens, and Cory Booker is seen as someone who may be eyeing a senate run or a governor's run.
DAVISSo I don't -- part of this, I think, was he was looking out for himself and his constituents, and he just trampled his messages. I don't think it helped him that the RNC was then -- the Republican National Committee was then incorporating him into their ads and saying, you know, stand with the RNC and Cory Booker on this issue. So he became what we call in campaigns a distraction, and it's unfortunate for him 'cause I think he was hopeful that he could be a surrogate for the campaign and raise his own national profile. And I don't think that's gonna happen now.
REHMAll right to...
ELVINGWell, he raised his profile.
DAVISWell, he raised his profile, but certainly not in the way he wanted.
REHMTo Jeanne (sp?) in Anderson, Ind. Good morning to you.
JEANNEGood morning, Diane.
JEANNEYou're simply the best.
JEANNEMy concern is around your talk about the close polls and the economy, if it tanks, what it will do for president Obama. My question is where might we be now in terms of recovery with a Congress that works more as a team, versus the Republicans just saying no to all things Obama, more as a re-election plan? It seems we might be further along. And giving Republicans the White House just seems like we're rewarding their bad choices and behavior.
REHMSusan Davis, where might we be had there been that cooperation that Jeanne and probably a lot of other people in the country wish there had been?
DAVISWell, it goes back to what was called the grand bargain that they tried to strike on deficit reduction.
REHMAnd did strike early on.
DAVISAnd got close. They got close.
DAVISBut close doesn't count.
DAVISIt doesn't even come close.
DAVISI mean, obviously, we'd be in better shape if Republicans in Congress and Obama were able to work out something along the lines of the Simpson-Bowles commission that outlined this long-term deficit reduction plan, but that is just not the political reality in which we live. The parties are far more partisan. They're far more polarized. And there's very -- the common ground on these fiscal issues is -- there's not a lot there. There's not a lot that you -- particularly on the revenue side of things that unites the two parties.
DAVISSo I think that part of the reason why they're waiting till after this election is it's a referendum on a lot of these debates that we've been having all year on the -- the visions for -- between the two parties on the fiscal feature of this country are strikingly different, and you need an election to weigh in toward a -- to sort of flip the coin.
REHMAnd here's a posting on our website from Michael in Alexandria, who says, "Why can Congress take up Simpson-Bowles and stop worrying about politics and save the country?"
LEONHARDTWell, it did. The House took up Simpson-Bowles, and what, how many votes did it get? It's only like 20 out of 350?
ELVINGYeah. It was a handful.
LEONHARDTSimpson-Bowles has become this talisman for people who say, why can't we just have common sense people in Congress? Well, that's fine, but what Simpson-Bowles is, when you take off the packaging, is it's a big old tax increase and a big old spending cut. It whacks the military, it whacks domestic programs, and it raises taxes on every American. And I don't see a huge groundswell of support for that from swing voters or any voters for that matter, and I think that's why our politicians aren't passing it.
ELVINGIt could be called a fiscal cliff if you were the CBO, although, in fairness to Simpson-Bowles, they were trying to do it in a way that was much more planned and much more intelligent than what would happen if we simply go past December and we haven't done anything to deal with the fiscal cliffs that CBO was describing.
REHMAll right. And here is an email from Kevin who listens in China, who says, "the Secret service Scandal says more about Americans' sexual immaturity than about the integrity of the officers involved. In France, nobody would have noticed." What do you think?
LEONHARDTThere is a more issue here than -- or there is another -- some people would argue the more serious issue is one's views of marital fidelity, and that actually strikes me as a very good argument. But there is a different issue than just that, than whether we should be like the French and not care about these things, and it is a security issue. Right? These Secret Service agents put themselves at risk of being blackmailed and, as a result, to some degree, put the president at risk.
REHMAll right. To San Francisco, Calif. Good morning, Denise.
DENISEGood morning, Diane. My question is going back to the GSA scandal...
DENISE...you know, with them going to Las Vegas. And my point is that where is the outrage over a manufactured war and the cherry-picked intelligence and the trillions of dollars spent and that hundred, maybe 200,000 Iraqi citizens and thousands of American lives and tens of thousands of young men and women living their lives as amputees or with head trauma. Where are the pallets of cash that went missing in Iraq? The bungles and irresponsible way that the Bush administration funded those wars, where does this debt come from? Where is the outrage about that?
DAVISIt's a great question. I do think one of the things that's been really striking to me about this election year is how little Afghanistan and the on-going wars have been as part of the debate. And I think that may intensify as we get closer to the general election, but you have a president whose policy has more in line with Republicans. And I think Democrats thought -- that they thought it was gonna be when he came into office.
DAVISHe's actually have been fairly hawkish about his foreign policy, and you have a progressive left that is not particularly organized or willing to go after the president in any kind of coordinated way. I think there's been a willful silence in the Democratic Party of unity behind the president on this. And it has been surprisingly not an issue in this election year so far.
REHMAll right. To Sydney, Australia. Good morning, Henry.
HENRYYes, ma'am. Thank you very much for taking my call.
HENRYYou know, six weeks ago, I moved my family from Margate, Fla., to Sydney, Australia, because we just got tired of the Republican attempts to destroy America. Okay. These are the people who call themselves patriots. Now, when Barack Obama was first elected, the first thing Mitch McConnell said was, it is my job to make sure he's a one-term president. When George Bush was in office, Democrats worked with him to move America forward.
HENRYHow can the people who call themselves patriots work so tirelessly to the arduous filibuster to destroy America? Since I have been here, the question I keep hearing people ask me is, how did the Taliban come to be running the Republican Party?
REHMAll right. Ron Elving, the Taliban does not run the Republican Party.
ELVINGNo, that's a metaphor and one I'm sure the Republicans would find highly offensive. Nonetheless, the Republican Party has become dominated by one of its most distinct subgroups and these are people who are against all forms of tax increase, and they are people who are also on the right when it comes to social issues.
ELVINGAnd we've seen these in states like Indiana, which used to be something of a swing state in the Midwest, where they have just turned out Senator Richard Lugar, a 36-year veteran on the Senate and somebody who had been conceived off as a conservative by pretty much everybody in Indiana for a long time. But he could be cast as having been in Washington too long, having voted for the bailouts for the banks in 2008, for being too close to Barack Obama because he worked with him when they were both on the Senate Foreign Relations committee.
REHMAnd being too much of a moderate.
ELVINGAnd being too much of a moderate, even though his voting record is really not what you would call...
ELVING...a moderate voting record. He certainly know Olympia Snowe. So because of that sort of dynamic within the Republican Party, it's now become extremely difficult for any senator, even a senator as conservative as Orrin Hatch, to behave as he had behaved before for fear of a primary that would run him out of the Republican Party and run him out of the Senate. I think that's what the caller is referring to even if the language is incendiary.
LEONHARDTI'm gonna pick up on one of the caller's words that's not Taliban, which is filibuster. And I think one of the real questions here is we have a democracy that -- in which majority rule can't always function well because we have this filibuster and because it's used vastly more often than it used to be used. And I do think there's a question about whether we've reach the point in which these causes serious problems for a long-term policy.
LEONHARDTThe Democrats won, in 2008, a sweeping victory, but couldn't pass many things even though they were the majority party because of the filibuster. The same thing could happen in 2012 for the Republicans. They could win a sweeping victory and not be able to pass what they want. And I think there's a real question about whether because of the filibuster we are flirting with a real level of dysfunction in our government that we haven't had before.
DAVISCan I just add one point to this? And I agree that the filibuster -- it's surprising how much it's become part of the public dialogue. While I do think the filibuster has been abused, that's a very fair statement to say in recent years, there is an element of -- in defense of the filibuster, I would say, if the Senate was governed by a 51 majority vote, the public policy in this country would spin so fast and be so dependent on the majority party that -- I'm not sure it would be the -- I am not sure the answer is getting rid of the filibuster.
DAVISI think it would make the Senate almost as dysfunctional as the House. They would be able to pass legislation so quickly. And there's an element of the Senate that should force and slow down these decisions on things like gay rights and abortion and controversial social issues that could be pendulum back and forth with whoever control the Senate.
REHMSusan Davis of USA Today, and you're listening to "The Diane Rehm Show." Sounds to me as though one of our upcoming programs ought to be on the filibuster.
REHMLet's go now to Pasadena, Md. Good morning, Al.
ALHey, how are you doing?
ALI wanted to make a comment. When Romney came to Philadelphia yesterday, a day before, and they were questioning him about education and those kind of things.
ALAnd he came back with his -- I don't know where his study was from or his evidence that larger class sizes are beneficial. But to me, the question would have been, what was the class sizes of your private school and were any of your teachers or parents clamoring to have your class size increase in your lead public -- private school? To me, that goes to the heart of him being out of touch with the American people, the average working person.
REHMAnd that is a refrain you hear quite often in this case regarding classroom sizes.
DAVISI do think -- first, I'd say Mitt Romney probably get some credit for going into Philadelphia to talk about education 'cause this is definitely not an area that's gonna vote for Mitt Romney in November. What the caller did bring up, and I have actually read about this before, is he was talking about Mitt Romney made a -- talking about the class size and if matters or not. And a teacher there pushed back and said -- I've never talked to a teacher or a parent who ever said bigger classes were a good thing.
DAVISAnd Romney cited a McKenzie firm study on class sizes in foreign nations. And that it kind of gets to the connection that you're talking about earlier where Mitt Romney sometimes has a hard time connecting with people. I'm not sure citing McKenzie studies in conversations with teachers is a way to appeal to them on education policy.
LEONHARDTNo, it's not. And I agree, it does speak to his difficulty in connecting. There is a fairly large body of research that suggests class size is not the most important determinant of how well kids do in this country. And so it's not that large classes are better than small ones. I've never heard that argument seriously. But it's that the small classes may not be that much better. And given how much more expensive they are, there is a serious argument that the way we should be spending our resources is not trying to minimize class size. It's a really interesting debate.
DAVISIt's also interesting 'cause Mitt Romney has called education the civil rights issue of our era, which struck me because that was the same phraseology that Chris Dodd used, the Democrat who ran for president in 2008. So education has been sort of one of these issues that there's a tremendous amount of agreement on but very little action.
ELVINGYou know, this is a sense tearing a page from the book of George W. Bush in 2000 who is showing he was a compassionate conservative by going out and talking about, you know, the soft racism of low expectations and things of that nature and trying to show that he had compassion for the less fortunate in America by talking about education improvements. And then we have No Child Left Behind, and that was a big bipartisan effort between George W. Bush and Teddy Kennedy.
ELVINGAnd then people didn't like it very much. It became unpopular. So now Mitt Romney wants to put that aside and no longer talk about No Child Left Behind but give every child a chance. Let's give it a different name. Let's come back with largely the same sort of performance-based testing, and let's see whether or not kids do well on standardized tests. It sounds a little bit familiar and it has exactly the same intention.
REHMRon Elving of NPR, Susan Davis of USA Today, David Leonhardt of the New York Times. Thank you all so much.
ELVINGThank you, Diane.
LEONHARDTThank you, Diane.
REHMHave a great holiday weekend, everybody. Stay safe. Thanks for listening. I'm Diane Rehm.
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