Fiscal cliff negotiations appear stuck in neutral. The Fed ties interest rates to jobless numbers. And the Michigan governor signs a “right to work” law. Diane and a panel of guests discuss the week’s top domestic stories.

Guests

  • Ron Elving senior Washington editor for NPR.
  • Karen Tumulty national political reporter at The Washington Post.
  • Susan Page Washington bureau chief for USA Today.

Friday News Roundup Video

After Michigan passed an anti-union measure Thursday amid protests and criticism, the panel looked at what right-to-work laws actually mean and what’s next for the nation’s organized labor movement.

Transcript

  • 10:06:56

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. President Obama and House Speaker John Boehner met again last night on fiscal cliff negotiations. There are reports the distance between the two sides is widening. Susan Rice withdrew her name for secretary of state. And the Michigan governor signed the so-called right-to-work law.

  • 10:07:20

    MS. DIANE REHMJoining me for the Friday News Roundup: Susan Page, Washington bureau chief for USA Today, Ron Elving, senior Washington editor for NPR, and Karen Tumulty, national political reporter at The Washington Post. I hope you'll join us, 800-433-8850. Email your questions to drshow@wamu.org. Follow us on Facebook or send us a tweet. Good morning, everybody. Good to see you.

  • 10:07:56

    MS. KAREN TUMULTYGood morning.

  • 10:07:57

    MS. SUSAN PAGEGood morning.

  • 10:07:57

    MR. RON ELVINGGood morning.

  • 10:07:58

    REHMAll right. This question of Susan Rice taking herself out of the running as secretary of state, is there any connection between her withdrawal and fiscal cliff negotiations, Karen?

  • 10:08:17

    TUMULTYWell, I found something really interesting in both the letter that she sent to the president and some of the stuff that she is saying in interviews, including with NBC last night, which is -- she very explicitly said that she thought that her nomination and the controversies surrounding it -- that it wasn't a nomination -- even being considered for nomination was distracting from the president's ability to get through -- she named a bunch of domestic issues -- immigration, debt reduction and jobs.

  • 10:08:52

    TUMULTYAnd I thought that was interesting because it was very explicit acknowledgement on her part that this was going to make it harder for the president to get what he needs in his domestic agenda.

  • 10:09:05

    ELVINGIt's more atmospheric really than a direct connection. It's not as though anything in the fiscal cliff negotiations has anything directly to do with Susan Rice as a person or with the job she was being considered for. But the overall relationship between the president, speaker of the House, Republicans in general and the Senate -- and the Senate is a separate institution.

  • 10:09:26

    ELVINGIt, of course, is Republicans and Democrats, but it's also a place and a thing unto itself where everybody is a little bit of a, you know, a separate dookie or a separate principality, if you will. And some of the egos up there had been strained by the president insisting on Susan Rice at a time when they think there are a lot of more important things and when they have a candidate of their own whom they prefer for the job.

  • 10:09:51

    PAGEAnd, you know, presidents only have a certain amount of political capital to use. President Obama could have gotten Susan Rice confirmed as secretary of state, but he would have had to pay something for it. It would have cost some of that political capital and taken it away from other fights like the fiscal cliff.

  • 10:10:08

    PAGEYou know, Republicans during the campaign and else -- and at other times portray President Obama as a left-winger, as a socialist, as an ideologue. This is one more example that he is, at heart, a pragmatist. He decided that this was not a fight that was going to be worth what would it cost when there are other things that he needs to do.

  • 10:10:28

    REHMOf course, he was defending her, defending her, defending her.

  • 10:10:32

    PAGEWell, he defended her and then we heard less from him. And they had this, I thought, a very odd scenario here where she wasn't nominated but she was, in fact, auditioning for the nomination, that those five appearances she made on the Sunday TV shows that prove to be so controversial, that was an audition to be secretary of state.

  • 10:10:49

    PAGEWhen she went to the Hill and met with the senators who were critical of her, that was a chance for her to show that she could get through a confirmation fight in good shape. After those meetings, the situation was worse in the Senate, not better. And that's why I think at that point, it was inevitable that this nomination was not going to go forward.

  • 10:11:07

    REHMHere is a tweet, "Does the outcome regarding Susan Rice make President Obama and Democrats more or less likely to compromise regarding fiscal cliff negotiations?"

  • 10:11:22

    ELVINGI don't believe that it makes a great deal of difference to their willingness to compromise on the fiscal cliff negotiations. I think it has more to do with creating a situation in Washington where a compromise would be generally possible, where there is a little less of the brackishness and the being at loggerheads for the sake being at loggerheads on every issue. If you can take one thing off the table that does not have to be further negotiated, that does not have to represent another battle in the war, you get a little closer to the moment where you can get some kind of a negotiated truce.

  • 10:11:53

    REHMSo now you've got John Kerry's name being mentioned again and again, Karen.

  • 10:12:00

    TUMULTYYes. And by the way, had Susan Rice been nominated, we would have had this really awkward spectacle of Chairman Kerry having to chair the confirmation hearings of this woman who is getting a job that, you know, he very bad -- has made no secret of the fact that he wants. At this point, you know, guidance that I think people are getting from he White House is that, barring something very odd happening, John Kerry's going to be the guy.

  • 10:12:28

    REHMAnd what does that mean for the votes in the Senate?

  • 10:12:33

    PAGEYou know, there are couple of dominos that fall because of this. If Sen. Kerry is nominated as secretary of state, as I think we all expect -- it would be a big surprise for him now not to get it -- there'll be a special election in Massachusetts. We would expect Sen. Scott Brown, who won the last special Senate election they had in Massachusetts but was defeated in November, would very likely run for that again.

  • 10:12:56

    PAGEHe's a very -- it's a very Democratic state but he's a good candidate, and you'd see that as being at least one that he could possibly win. You know, impact on other cabinet choices too. The president is, in effect, replacing his entire national security team: secretary of state, secretary of defense, head of the CIA. Each nomination affects the next. He's also going to be replacing his Treasury secretary.

  • 10:13:19

    PAGEOne of the -- there are two interesting things to note. If Kerry is nominated as secretary of state and Chuck Hagel, the former Republican senator from Nebraska, is nominated as secretary of defense, which we think is likely, that would mean Vietnam vets head of both departments. That's never happened before.

  • 10:13:35

    PAGEAnd if he goes in that direction and nominates Jack Lew, his chief of staff, as Treasury secretary, for the first time in 20 years, there will be four white men in the four big jobs in the cabinet. And that is a kind of irony given the coalition that elected President Obama.

  • 10:13:52

    REHMAnd...

  • 10:13:52

    ELVINGThat's right. Right at this particular moment, we have a House of Representatives coming in in January where the majority of the Democrats in that House will be women and minorities, and that's a first. And that is reflective of the Democratic Party, and it's reflective of the majority that elected President Obama, who only got 39 percent among white people.

  • 10:14:08

    REHMYou mentioned Scott Brown as coming up in Boston, in Massachusetts. Who, on the Democratic side, might they put forward?

  • 10:14:18

    TUMULTYYou know, I think there are a number of people who could. Possibly Congressman Ed Markey, possibly the governor himself, Deval Patrick. There's a big difference between now and when Scott Brown won in January of 2010. The Democrats were asleep back then, and Scott Brown was able to surprise them. This time around, the entire Democratic machinery of the state is revved up because of Elizabeth Warren's victory. You know, labor -- I was up there several times to cover that race.

  • 10:14:51

    TUMULTYThere is now a ground operation and a ground operation that knows how to run a race and has done it quite recently. So this idea that somehow Scott Brown who, at one point, was the most popular politician in the state could just sort of walk into that Senate seat, I think, is not necessarily true.

  • 10:15:10

    ELVINGWe don't even know for certain that Scott Brown would run. He may have other interests at this point, and he may not want to take two losses in a row and be finished in politics. He may want to save his water and come back at some more ideal moment for him to get back in the Senate. And then the other possibility in terms of the thinking of the White House is that even if in a worst-case scenario -- and I think Karen's right about Massachusetts right now.

  • 10:15:30

    ELVINGIf in a worst-case scenario Scott Brown did come back to the Senate, he wouldn't be the least attractable. He would not be the person they were worried about, let's put it that way, in the Senate because he is a sort of person who would need to be a centrist in order to get reelected. They could work with him.

  • 10:15:43

    REHMCome back to Sen. John Kerry. How good a secretary of state might he be?

  • 10:15:52

    PAGEHe seems -- he has the perfect credentials to be secretary of state...

  • 10:15:57

    REHMWhy?

  • 10:15:58

    PAGE...because he has a long political history. He ran for president. He was a Democratic nominee for president and came close to winning. He has been on the foreign relations committee for years and is now the chairman of it. He has done -- he has been running for secretary of state since Barack Obama was elected president. He has done secret missions on behalf of the administration. He has guarded the administration's interest on Capitol Hill.

  • 10:16:24

    PAGEHe has, I think, in no case caused any embarrassment of problems for the Obama White House. These are issues he has been dealing with. He's popular with fellow senators. Senators tend to like other senators. That's why senators have easy confirmation battles in these cases. So I think the thinking is he's got the stature and the personality and the background that would make him a very credible secretary of state.

  • 10:16:46

    TUMULTYAnd this is an administration where most of the policy setting in international relations is done inside the White House. You know, even a secretary as, you know, of such stature as Hillary Clinton has not really been, you know, setting the policy on the central issues of foreign policy. So again, Susan Rice there may be an opportunity here for her to be national security adviser, which, in terms of just sheer decision-making power, is a job that is, I think, on an equal with secretary of state.

  • 10:17:19

    PAGEBut it's not on equal. I mean, it's a great job. It's not on equal with being secretary of state. The senior member of the cabinet, I mean, there's -- it's a different job. It's a consolation prize.

  • 10:17:31

    REHMWould she have to be confirmed?

  • 10:17:33

    PAGENo, not for national security adviser. Then you're just working for the president.

  • 10:17:36

    REHMSo in the meantime, she stays at the U.N. What kind of a job is she doing there, Ron?

  • 10:17:44

    ELVINGI think she's doing the kind of job that we have come as a nation to expect of our ambassador to the United Nations, which is not necessarily super diplomatic. When you think about the period of time that John Bolton had the job -- and there are some interesting parallels about the whole Bolton nomination process confirmation, non-confirmation, recess appointment, ugliness -- one of the people fighting against them at the time, of course, was a new senator named Barack Obama.

  • 10:18:06

    ELVINGBut when you think about him as one extreme version, we like a United Nations representative for the United States to go there, be tough, punch some noses. The other day she, well, reportedly, said some tough things to the Chinese representative about their position on Korea's missile launch and how it hadn't been tough enough.

  • 10:18:24

    ELVINGAnd, you know, this is the kind of thing we like to hear, I think, as American consumers of news about the United Nations. It may not be the best way for us to get ahead or make new friends in the U.N., but that's not what most people want. We want to be represented.

  • 10:18:37

    REHMRon Elving of NPR. When we come back, we'll talk about Michigan's right to work law, take your calls. I look forward to speaking with you.

  • 10:20:05

    REHMAnd first email from Diane in New York, "The president's failure to stand by Amb. Rice is eerily reminiscent of his abandon -- abandonment of Elizabeth Warren when he refused to appoint her to the consumer financial protection agency, the very organization she had sponsored." Susan.

  • 10:20:33

    PAGEThere is criticism of the president by some prominent women who support him, including women in his administration, that he didn't do enough to stand by her and respond especially to the attacks on her account of the situation in Benghazi, for which there was a defense. And some liberal Democrats generally feel like he should've stood up. He has -- he had -- he has power from having won reelection and won more decisively than we might have expected and that he should've fought harder for her.

  • 10:21:04

    ELVINGHe did fight for her for a period of time, for a period of weeks. We saw a combative president. We saw him personalize it. We got the strong impression, I think, a lot of people in the media that the president might not have been planning to appoint Susan Rice as secretary of state. He might have had John Kerry in mind all along but that, given the Benghazi controversy, given the attacks on Susan Rice, he had said, well, now we have to fight for Susan, and we're going to go ahead and we're going to nominate her.

  • 10:21:29

    ELVINGThat impression was given out of some aspects of the White House. And so we had this prospect that the president was going to, as Susan said earlier, spend a lot of that political capital from this election, which granted he does have, on something that might be what we call a Pyrrhic victory. Even if he got her confirmed, which he probably would, he would pay a cost for it. It would hurt negotiations on many other things. And as Amb. Rice herself said, it would make it more difficult to do immigration reform and a number of other things because of that expended capital being gone.

  • 10:21:58

    REHMWill we ever know whether Susan Rice was deliberately given the wrong information to go on those talk shows with?

  • 10:22:11

    TUMULTYWell, people like Sen. Lindsey Graham were saying yesterday after she withdrew herself from consideration that that investigation is going to continue.

  • 10:22:23

    REHMSo whether we know or not?

  • 10:22:27

    ELVINGThat is an excellent question, and it really goes to the heart of the whole controversy. Was she sent out as a sacrificial lamb with what people knew was not good information so that she could take the hit and she could protect the president's reelection prospects? Now, I remember it was September -- early September. It was a very close race. No one knew what was going to happen. The president was clearly running on the Osama bin Laden decapitation of al-Qaida.

  • 10:22:49

    ELVINGAnd here suddenly was the prospect of a new al-Qaida threat, a terrible story, a terrible tragedy in Libya, and it could have turned badly, badly for the president right then. And they were able to buy a little bit of time, get the intelligence cleaned up, get the whole thing back on keel so it didn't hurt the president so badly. And she bought them that time, and she may have bought them that time with a huge sacrifice on her part possibly, possibly, although we'll never really know, possibly costing her the chance to be secretary of state.

  • 10:23:18

    PAGEI continue to be perplexed by why there are so much focus on the talking point so and not more focused on the actual failures of security at -- in Benghazi, which seems to me to be a more important issue and one that I think we're going to hear Secretary of State Hillary Clinton have to address when she goes to Capitol Hill next week.

  • 10:23:37

    REHMAll right. Let's talk about Michigan's governor signing the right-to-work law. Had he not previously said or indicated he was not going to sign a right-to-work law. Ron.

  • 10:23:53

    ELVINGHe certainly left that impression with a lot of people, who thought that he was not committed to signing it and was not necessarily all that happy about having the issue forced to his desk, not happy about having the legislature vote on it, not happy about having, you know, the chance to become the new Scott Walker of 2012 -- of 2013.

  • 10:24:08

    REHMSo what happened?

  • 10:24:10

    PAGEWell, he says that Democrats actually forced the issue by pushing -- indicating they were going to push for a constitutional amendment that would enshrine in the state constitution collective bargaining rights . And therefore, Republican legislators didn't want to respond by passing this law -- this right-to-work law in which he didn't signed. And they did it in a heartbeat. I mean, for a big piece of legislation, they did it like in the space of a week from saying they were going to do it to having the signing ceremony.

  • 10:24:35

    PAGEHe had -- this -- the governor who's known as a kind of pragmatic former businessman Republican has tried to avoid some of these divisive issues in favor of what he thinks of as bigger, more important issues. His argument is this got forced on him and that this was a right thing to do for the state's economy.

  • 10:24:51

    REHMKaren, what does this right-to-work law actually mean?

  • 10:24:57

    TUMULTYWell, what it does is it says that if you work for a company that is represented by a union and you share in the benefits that that union negotiates in its contracts, you do not have to join that union or necessarily pay the dues or even, you know, pay dues or pay anything. So they're, you know, I think at this point, correct me if I'm wrong, I think there's -- how many...

  • 10:25:22

    REHMTwenty-four.

  • 10:25:23

    TUMULTYTwenty-four. OK. So it's about half of the states in the country are right-to-work states. They, you know, one thing that Gov. Snyder argued is that they're -- that Michigan is facing competitive pressures from other states that are right-to-work states because they are seen as more open and friendly to business.

  • 10:25:43

    REHMBut, you know, for years, for decades, unions have represented the working people. And for years, the idea of unions fighting for those working people has been at the forefront. This sort of turns it on its head by calling it a right-to-work law.

  • 10:26:09

    PAGEAnd look at where this has happened. Two states have enacted right-to-work laws this year, Indiana and Michigan, in the heart of the industrial Midwest Michigan where the UAW was forged. And I think that made this defeat so much tougher on unions and labor leaders who faced some significant setbacks in terms of union membership for a couple of decades now in this country.

  • 10:26:31

    REHMI have an email here from Jerry in Kalamazoo, who says, "I'm a business owner. I was a union member for only six years 35 years ago. But for the first time in my very long life, I am ashamed of Michigan. You cannot imagine how painful it is to say so. Michigan was a proud foundation of worker rights."

  • 10:27:01

    PAGEThat's right. A place where the union movement got its start, and the UAW argues that its representation of workers in the auto industry helped create a middle class in America...

  • 10:27:12

    REHMExactly.

  • 10:27:13

    PAGE...of people who didn't have a college education but worked hard in auto factories and were able to have -- to buy houses, to send their kids to college.

  • 10:27:20

    TUMULTYBut I do think that we've seen two instances where the state unions have sort of overreached politically in Wisconsin by trying to recall the governor, which I think Wisconsin voters, even if they didn't necessarily agree with the governor on the issue, felt like, you know, this is not a kind of thing that you would call the governor over. And I think in Michigan that when organized labor tried and failed to pass this constitutional amendment, again, they -- by overreaching politically, they exposed their vulnerability, and the Republicans were ready to come in and sit on that.

  • 10:27:59

    REHMSo what happens to unions now? Ron.

  • 10:28:02

    ELVINGTo some degree, unions need to go back to making their case for unionism to the working people of the country. They have dwindled -- their political power has dwindled primarily because fewer and fewer people are in unions. And especially in the private sector, it's become quite a de minimis fraction of the total workforce even though, of course, it's very important in certain industries.

  • 10:28:21

    ELVINGIt has become increasingly seen by the rest of the country as some sort of special interest, not as their champion, but as some sort of special interest that it is serving its own political and economic good and that as an organization as opposed to somebody fighting in their interests. If you believe in unionism, you need to go out and make the case for it.

  • 10:28:39

    ELVINGYou need to make people say, yeah, I understand that I'm making $10 or $20 or $30 an hour instead of a couple of bucks an hour because of this union that fought for this 20 years ago, 30 or 50 years ago and are still -- and is still fighting for that higher wage today. If people are sold on that idea, they'll come back to union membership whether they're required to or not.

  • 10:28:58

    TUMULTYAnd it's not even just the wages. Union members of both public sector and private sector union members enjoy a lot of benefits that people who are not union members don't. And I think there is, you know, when you look at the fact that...

  • 10:29:12

    REHMCertainly job protection, among other things.

  • 10:29:14

    TUMULTYAnd traditional pensions as opposed to 401 (k) s...

  • 10:29:16

    REHMYeah.

  • 10:29:18

    TUMULTY...and those sorts of things. And there is this disconnect between, you know, what the majority of workers get and then what they see union members getting.

  • 10:29:28

    ELVINGIn Wisconsin, there was a big divide when they were recalling Scott Walker last -- earlier this year between the private sector unions that sort of like Scott Walker to a large degree and with whom he had made nice and the public sector unions the teachers, the government workers who were very angry at him for taking away or restricting their collective bargaining rights.

  • 10:29:46

    ELVINGAnd so when he came down to the recall vote, you did not get an overwhelming vote among members of the UAW and members of other private sector unions in favor of recalling Scott Walker. So that divide within the union movement itself, that's what's really costing them power.

  • 10:30:02

    PAGEAnd it's also true that some unions remain pretty popular. The governor, the legislation in Michigan carves out exceptions for police officers and firefighters and the -- who had some of the same kind of protections in the battle in Wisconsin.

  • 10:30:15

    REHMAll right. Let's talk about "negotiations" -- I put that in quotation marks -- on the fiscal cliff. President Obama and John Boehner met again last night. Are the two sides hanging tough to appease each of their bases before finally coming to an agreement, Susan?

  • 10:30:43

    PAGESo this is the issue, or they're hanging tough so that in the next two weeks, they can make the case, well, we've hung tough long enough. Let's make a compromise and have a deal. Or they're hanging tough in a way that means they will not make a compromise. Neither side will be making -- be willing to make the concessions first.

  • 10:30:58

    PAGEAnd we will have a much messier situation -- either going over the fiscal cliff, or Republicans, some Republicans in the Hill now talking about a sort of plan B that would involve letting the Bush tax cuts expire for the wealthiest taxpayers and leaving the fights over some of these other issues to next year.

  • 10:31:17

    ELVINGTo next year, specifically to approximately February, when we're going to hit the debt ceiling again. And, of course, it was the debt ceiling in August of 2011 that caused the last one of our great crises on all of these issues and which caused the rating agencies -- or at least Standard & Poor's -- to downgrade the United States debt and caused the stock market a huge hit and set back the recovery and did a lot of other things that did not redound well for the president or for the Republican Party.

  • 10:31:47

    ELVINGAnd you would think they wouldn't want to go there again. But if the Republicans have a choice between fighting this out in December -- when the issue has been framed pretty well by the Democrats and by the president and by Jack Lew, the chief of staff who did all this back when they negotiated the sequester -- this fiscal cliff thing is coming down to a set of terms that are very favorable to the president.

  • 10:32:08

    ELVINGYou see it in all the polls. People are with the president on this. He's well over 50 percent. The Republicans are under 40 percent. This is a situation where the Democrats could come out ahead. So as Susan has suggested, this plan B is let's kick the can just for 30, 60 days, get to the point where the real issue is no longer the sequester or the tax increase for 2 percent of the population, but, rather, the debt limit. And there the Republicans feel they have, ultimately, the threat of allowing us to default on our obligation.

  • 10:32:37

    TUMULTYAnd why...

  • 10:32:38

    REHMBut what happens on Dec. 31?

  • 10:32:41

    TUMULTYWell, a lot of people's taxes go up is what happens on Dec. 31.

  • 10:32:44

    REHMAnd the defense spending goes down?

  • 10:32:48

    TUMULTYExactly. And...

  • 10:32:49

    PAGEAnd long-term unemployment benefits expire...

  • 10:32:51

    REHMExactly.

  • 10:32:52

    PAGE...and the alternative minimum tax patches go on.

  • 10:32:54

    REHMAre both sides really prepared to do that?

  • 10:32:59

    TUMULTYI have -- maybe I've been in Washington long enough that I'm so cynical. I cannot recall any negotiations of any magnitude that were settled or even begun to look like they were being settled when you still had two weeks to go. These guys just don't work unless the -- they're like college students. They can't work unless the exam is tomorrow.

  • 10:33:22

    REHMAnd you're listening to "The Diane Rehm Show." So does the big sticking point remain those taxes on upper income?

  • 10:33:35

    PAGEThe big -- first sticking point are the tax rates on households that make $250,000 a year and more, and that's a fundamental one, and it seems as though we don't get down the road until we get past that one. But, boy, it's not going to be the last sticking point because...

  • 10:33:51

    REHMOf course not.

  • 10:33:51

    PAGE…they're going to be -- following that will be a debate over what we do exactly about entitlement spending. That is what Republicans want. If Republicans give on tax rates for high-income taxpayers, they're going to do that only if the White House and Democrats are willing to give on Medicare and Medicaid and possibly Social Security, maybe less likely Social Security. That is another titanic battle. So two weeks is both a very long time and a very short time to negotiate these things.

  • 10:34:17

    REHMAll right. So I want a prediction from each of you. Are we going to have a deal before midnight Dec. 31? Karen.

  • 10:34:31

    TUMULTYWell, my predictions are worth exactly what you're paying for them, but I still think they're going to come up with something. It may be just a patch that gets them through to the next thing. But I just can't imagine for the -- all but the, you know, the wealthiest that everybody is going to see their taxes go up on Jan. 1.

  • 10:34:52

    REHMRon.

  • 10:34:52

    ELVINGWe will some -- see some kind of a deal, but it may not be anywhere near as global as it needs to be, and it will be a -- an extension of the negotiations into the political climate of the next 30 to 60 days, bringing the debt limit into the question. I think the president will prevail on some big, showy things, but he will not prevail across the board, and he'll be right back in the soup, negotiating with these same people in January.

  • 10:35:15

    REHMSusan.

  • 10:35:16

    PAGEI agree with both of my colleagues. I think there will be a deal. It will raise tax rates, perhaps not back all the way to the Clinton levels, to 39.6 percent. And it will have some concession on the part of the White House toward Republican concerns on entitlements, but it won't be the grand bargain that they tried to negotiate in 2011, and these issues will be back early next year.

  • 10:35:38

    REHMUgh. I want to be more optimistic. I'm going to say they come to a deal. Taxes do go up on that top 2 percent, and we have a grand bargain. You can forget it even though I've said it.

  • 10:36:03

    TUMULTYAnd, Diane, every time a bell rings, an angel gets his wings.

  • 10:36:07

    REHMI love it, Karen. Now let me ask you about this announcement from Fed Chair Ben Bernanke, Susan. He said he's going to tie the current low interest rates to...

  • 10:36:26

    PAGEHe's going to tie it to employment levels. This is interesting. They've never -- the Fed has never before tied these decisions to specific numbers in the economy. They're going to do so in this -- at this point.

  • 10:36:37

    REHMAnd to inflation.

  • 10:36:39

    PAGEAnd to inflation, but a higher measure of inflation. Their target has been 2 percent.

  • 10:36:44

    REHMRight.

  • 10:36:44

    PAGEThey're going to allow inflation get just a little bit more than that...

  • 10:36:46

    REHMTo six.

  • 10:36:46

    PAGE...and -- yes. In an effort to combat this very stubborn problem of unemployment. So this is a significant shift...

  • 10:36:55

    REHMBig deal.

  • 10:36:56

    PAGE...by the Fed, and it also indicates to investors that these very low interest rates are going to continue until 2015, say, because we expect unemployment to remain high enough for that to happen for two more years.

  • 10:37:09

    REHMHow surprising was the announcement?

  • 10:37:12

    TUMULTYWell, I think my colleague Neil Irwin at The Washington Post said the biggest surprise was that it was viewed as a surprise. There has been some need for a while to sort of calm the markets down and make this whole process a little bit more transparent, and this is what they were trying to do.

  • 10:37:29

    REHMKaren Tumulty of The Washington Post. When we come back, it's time to open the phones. I look forward to speaking with you.

  • 10:40:05

    REHMAnd welcome back. We'll open the phones now. Your questions, comments, 800-433-8850. First to Houston, Texas. Hi there, Andrew.

  • 10:40:20

    ANDREWGood morning, Diane. Thank you for taking my call.

  • 10:40:22

    REHMCertainly.

  • 10:40:24

    ANDREWI'd like to know with respect to the budget deficit why no one is talking about cutting the tremendous cost of the public sector. For example, why not put all public sector employees onto 401 (k) plans so they can fund the cost of their own retirement rather than the rest of us having to do it?

  • 10:40:43

    REHMRon.

  • 10:40:44

    ELVINGActually, I believe Karen Tumulty made a reference earlier to how this is a big division in the labor picture nationally where there are those that are the haves and the have-nots. Fewer and fewer people have a pension, but people in much of the public sector do have a true pension where they can retire at some point sometimes with as little as 25 years or something along that line of service and draw a substantial amount of their last paycheck for the rest of their lives.

  • 10:41:09

    ELVINGThat's a wonderful, wonderful benefit, I think, everyone would love to have. And it's -- the property, it's vouchsafed to fewer people in America all the time as 401 (k) s have been brought in to replace it. And, of course, 401 (k) s haven't really fulfilled their promise either. They were supposed to make us all rich and then, of course, they started going south after some of the downturns in the market.

  • 10:41:28

    REHMAll right, to Carthage, N.C. Hi, William.

  • 10:41:33

    WILLIAMHi. Thank you. I would like to know why I'm not hearing the name of Richard Lugar as a possible nominee for secretary of state. The political advantages of that are potentially enormous, and he's obviously qualified so why not?

  • 10:41:54

    REHMKaren.

  • 10:41:55

    TUMULTYI think if he were 15 or 20 years younger, you would definitely be hearing that. And by the way, he's not only qualified, he has worked very closely with President Obama in the past when Sen. Obama was in the Senate. His biggest foreign policy credential was the fact that he had worked with Sen. Lugar on nuclear proliferation issues.

  • 10:42:19

    ELVINGYes, Sen. Lugar actually reached out and took Barack Obama, the first-term senator, under his wing a little bit and liked him, and they worked together. And Lugar would probably make a magnificent secretary of state in another era. But we're talking about somebody who's been in politics for 50 years and the kind of travel...

  • 10:42:35

    REHMHow old is he?

  • 10:42:36

    ELVINGWell, I'm just trying to fix the age. I would say approximately 80. I think we're coming up on 80. For someone at that age to take on the challenges of what a secretary of state has to do in terms of travel alone, let alone the stress levels and so forth, I think Hillary Clinton and a lot of other people would line up and say not possible.

  • 10:42:54

    REHMHillary Clinton has set her own record, has she not, in terms of miles traveled. I mean...

  • 10:43:03

    PAGEYeah. She's traveled an unbelievable amount. You can see how exhausted -- you can see how tired she looked.

  • 10:43:09

    REHMAbsolutely.

  • 10:43:09

    PAGEAnd she says, you know, that she's not really engaging in the conversation of running for president 'cause she really wants to get a good night sleep first.

  • 10:43:15

    REHMHere's an email from David, who says, "I find it curious that Secretary Clinton has not been a forceful defender of Amb. Rice. Is it because of her position or is there something else going on, Ron?

  • 10:43:34

    ELVINGShe has the position, of course, to say, well, as the secretary of state, I shouldn't really be commenting on my successor. And that's a perfectly reasonable answer. However, there is a little more history here than that. Susan Rice was in the Clinton administration. She had a position in the Clinton administration in the 1990s. And going into the 2008 presidential bid that she made, Hillary Clinton was rather counting on Susan Rice to be among her supporters. Susan Rice bailed out and went with Barack Obama.

  • 10:44:01

    ELVINGThat is not the kind of thing that is forgotten by Clintons. That is not the kind of thing that's forgotten by people who run for president. And there is that chance that on several occasions they may have crossed swords. There may have been moments when they didn't necessarily see eye to eye. And it would not really be proper for Hillary Clinton to get terribly involved in this particular discussion, but of course, if she had done so on Susan Rice's behalf, it would've been seen by a lot of people as quite a generous gesture.

  • 10:44:27

    PAGENow, she did -- Secretary Clinton did make comments defending Susan Rice a couple of days ago, but some people thought it was a little late. It was at the point where it seemed pretty clear Susan Rice was not going to be nominated.

  • 10:44:40

    REHMAll right. Let's go to Little Rock, Ark. Hi, Antonio.

  • 10:44:45

    ANTONIOHow are you doing, Diane Rehm?

  • 10:44:47

    REHMGood, thanks.

  • 10:44:48

    ANTONIOI've been a longtime listener and first-time caller.

  • 10:44:51

    REHMI'm so glad to hear from you.

  • 10:44:53

    ANTONIOOh, I am a college student, just got out of the class, labor relations and human resource management, so I'm getting a little bit of both sides of the corporate and the union side. Arkansas, we have a right-to-work state here. I'm against it and the reason is why -- because it takes away the voice of the people. Companies have the right to hire and fire at will without really giving an explanation or a reason why. So they lessened the power of the worker.

  • 10:45:23

    ANTONIOMy number two point I want to make is where we will probably go over that cliff, it may be a benefit towards Obama and his administration because if the -- if we go over the cliff, the American people will blame the Republican Party, Obama can then come back with a solution to fix it -- raise taxes on the wealthy, lower taxes for the middle class -- and still come out on top.

  • 10:45:47

    REHMThat's why I think there's going to be a big deal. Go ahead, Karen.

  • 10:45:53

    TUMULTYWell, Antonio, though, gets to something that I've been wondering, which is why the Republicans would think their hand is going to be any better if they wait and fight this out again over the debt ceiling. They've got public opinion running against them so heavily now. What would possibly change that?

  • 10:46:10

    PAGEWell, but it's -- the strongest issue that the president has is raising the tax rates on the wealthy. That's one of the specific things he campaigned on. We know 60 percent in the exit polls from the campaign -- 60 percent of voters said they supported that idea. So that does seem to me to be his strongest issue and the best leverage he has.

  • 10:46:28

    PAGEAnd some of these other issues, obviously, he also has a strong hand. When you talk about curbing Medicare spending, for instance, that's not a popular thing. But I could see Republicans thinking if we get this issue of taxing the rich out of the way, it takes away the Democrats' best issue and maybe levels the playing field.

  • 10:46:45

    ELVINGOne thought, though, about the Republicans, what they fear most is not necessarily Barack Obama or even general public opinion. It's primaries. They're worried about 2014 primaries -- senators, members of the House, no matter how safe their district. In fact, the safer the Republican district, the greater the chance of a Republican primary challenge if they deviate from the line.

  • 10:47:05

    ELVINGThere was a letter this week written by Morton Blackwell -- for those who remember Morton, former head of the Virginia Republican Party -- and signed by about 100 people who are a perfect luminary list of the Republican activists of the last 30, 40 years. Some of whom we were surprised to see were even still around. And they all said, stand your ground, give nothing, absolutely no compromise with this president. House and Senate Republicans, if you give any ground, we're coming after you.

  • 10:47:30

    PAGESo this becomes a part of the debate that we're going to see unfold about what direction does the Republican Party go in the wake of their -- in the presidential election 2012.

  • 10:47:37

    REHMExactly. Absolutely,

  • 10:47:40

    PAGEAnd there are -- there's more than one school of thought within the GOP, one that they just weren't conservative enough. They need to be more aggressive. The other is that they really need to figure out a way to do more to appeal to women and to Hispanics and to young people.

  • 10:47:51

    REHMAnd to Indianapolis. Thomas, you're on the air.

  • 10:47:56

    THOMASHi, Diane.

  • 10:47:57

    REHMHi.

  • 10:47:57

    THOMASThank you. I so appreciate your graceful maintenance of this space for public discourse.

  • 10:48:04

    REHMThank you.

  • 10:48:06

    THOMASAnd mainly, I'm just frustrated. I feel like the Republicans keep interjecting terms into our major public discourses, terms that the media just picks up and uses, and it completely -- it sends them -- it skews the discussions -- terms like right-to-work, which is really just union busting, terms like entitlements, which everybody pays in this money, so they're entitled to that money back.

  • 10:48:44

    THOMASAnd then there's other terms like job creators that set corporate heads up as deities. And then we all know the debt panel discussion. So I'm a little frustrated the way media so easily picks up the terms that are planted by the right into these conversations.

  • 10:49:06

    REHMRon, do you want to comment?

  • 10:49:07

    ELVINGWell, let's include fiscal cliff. Let's include lots of other things, right to life, you know...

  • 10:49:12

    TUMULTYPro-choice.

  • 10:49:13

    ELVINGPro-choice. Any number of political communications are dominated by whomever comes up with the best terminology to describe their position in a phrase or to frame the issues in a phrase that catches. And, yes, we in the media are susceptible of that. We are truly susceptible of that because we're always trying to sign, post things.

  • 10:49:33

    ELVINGAnd we're trying to help people understand what the issues are. And if something comes along that catches the popular imagination, like some of these phrases -- right-to-work is probably the classic example of all time of an issue that was totally framed by just coming up with those three words.

  • 10:49:48

    REHMAnd skewed.

  • 10:49:49

    ELVINGAnd, of course, it's framed by the people who favor those laws and don't want labor union.

  • 10:49:53

    REHMHere's an email from Brian in Flushing, Mich., who says, "Right-to-work has nothing to do with labor or business per se. It's all about destroying funding by the Democratic Party of the top 10 donors to political groups. Nine donate to the GOP. One, the unions donate mostly to Democrats. It's a statement, and it is indicative of why this union destruction is partly going on." And I do want to let our listeners know, Monday, we'll be doing a program in the first hour on what's ahead for unions. Let's go to Laura, who's in Ann Arbor, Mich. Good morning. You're on the air.

  • 10:50:57

    LAURAGood morning, Diane. Thanks for taking my call.

  • 10:50:59

    REHMSure.

  • 10:51:00

    LAURASo I'm an unemployed teacher here in Michigan. And I've been trying to figure out if this right-to-work move could lead school districts to be able to better fire teachers who really aren't pulling their weight and get some better, more passionate teachers in.

  • 10:51:20

    PAGEYou know, I think it's hard for us to see down that road, but I think it does -- it is likely to weaken the hands of unions and you could...

  • 10:51:29

    REHMAll kinds of unions?

  • 10:51:30

    PAGEAll kinds of unions on all kinds of negotiations. I think it's hard to figure out exactly what it's going to mean to a particular thing like the question you raised. And, by the way, Laura, good luck, finding a job as a teacher.

  • 10:51:40

    REHMI should say…

  • 10:51:41

    LAURAThank you.

  • 10:51:42

    REHMTo Framingham, Mass. Hi there, Cathy.

  • 10:51:47

    CATHYHi. How are you?

  • 10:51:48

    REHMI'm good. Thanks.

  • 10:51:50

    CATHYWell, I just had a quick comment. You know, I'm a nurse's aide in Framingham, Mass. I live on my own. My rent is pretty high. I live paycheck to paycheck. I'm not the most educated, most political person in the world, but I know one thing that if my taxes go up and my paycheck goes down, for a lack of a better word, I'm screwed.

  • 10:52:09

    CATHYIt would be like a fiscal plummet not a fiscal cliff. And if there's anyone in the Beltway listening, if I could sway you any way, it would just be hardship on so many people I know. And that's not even a good enough word, hardship. It would be an absolute -- I don't even know a good word. It would be horrifying.

  • 10:52:30

    REHMSo have you written to your own members of Congress? Have you called their offices? Are you urging them to negotiate?

  • 10:52:43

    CATHYWell, of course, but, you know, I live in Massachusetts. We just got Elizabeth Warren elected to the Senate. We have John Kerry in there, you know, we're the most liberal state in the entire country. I mean, my mother still has the bumper stickers from the Nixon era that says, don't blame me. I'm from Massachusetts. So there's not much I can do on that part.

  • 10:53:03

    REHMWell, Cathy, I wish you the best of luck. I thank you for the work you do as a nurse's aide. Boy, do you we need those jobs out there. And let's hope, as I have predicted, something good comes out of all this. Thanks for calling. And let's go to Fairfax, Va. Hi there, James.

  • 10:53:30

    JAMESHi, Diane. I love your show. I listen every Friday at 10 o'clock for sure.

  • 10:53:34

    REHMI'm glad.

  • 10:53:36

    JAMESMy question was, if we went over the debt -- I mean, if we went over the fiscal cliff, would that additional revenue have any effect on delaying hitting the debt ceiling and delaying that negotiation?

  • 10:53:55

    REHMLet me just remind our listeners, you're listening to "The Diane Rehm Show." Ron.

  • 10:54:03

    ELVINGI gathered that just, so far, just with all the talk about the fiscal cliff and so forth seems to have slowed down just a little bit the growth of the deficit. It's not going to make enough of the difference. We're going to hit the debt limit. There's no way around it. We're going to be hitting the debt limit very soon. In fact, technically, I think we hit it very soon after the 1st of January. But the Treasury Department can move some things around, as they say, to keep us from actually defaulting on our obligations until February or March. But it's not going to take us into the summer.

  • 10:54:29

    REHMHow likely is it that the president will get the authority to leave the ceiling on his own?

  • 10:54:35

    PAGEI think that the chances are very, very slim. I think that would be a huge battle for him to try to assert more executive authority on that. So I don't think that's going to happen.

  • 10:54:46

    TUMULTYBut one thing that is -- that the president is asking for is that it be lifted as part of this negotiation and not have essentially this second bite of the apple for the Republicans.

  • 10:54:56

    REHMAll right. And finally, to Oklahoma City. Karen, hi there.

  • 10:55:02

    KARENGood morning. Thanks for taking my call.

  • 10:55:04

    REHMSure.

  • 10:55:05

    KARENI've been wondering what the differences between what's considered a right-to-work state and an at-will state because I -- when I moved to Texas -- and now I live in Oklahoma -- I had to sign papers that say, they can fire you for any purpose so it doesn't have to be a reason. You can be terminated. And I've always equated right-to-work with at-will state. And to me, that's kind of a loss of rights of the workers.

  • 10:55:32

    REHMBut the at-will employee is free to leave at any time and be dismissed at any time. It works both ways.

  • 10:55:43

    ELVINGThat's an interesting distinction and one that labor lawyers would probably have some detailed statement about and that they might very well disagree about. But I couldn't tell the caller what the exact distinction is in her particular case.

  • 10:55:57

    REHMYeah.

  • 10:55:58

    TUMULTYAlthough right-to-work state, again, is that has to do with your -- whether you're required to pay union dues if you are a represented by a union shop.

  • 10:56:06

    REHMRight.

  • 10:56:06

    ELVINGAnd the union dues are the great focus of the campaign money issue.

  • 10:56:09

    REHMSo do you believe that other states are going to join in this effort?

  • 10:56:15

    PAGEYou know, there are some advocates who say they're going to press it in other states, but I think the chances are not very good. In the states like Ohio, this -- the Republican governor there, John Kasich has said he's not interested in pursuing this, an issue that would take too much time, take too much effort. There are other things he wants to do.

  • 10:56:31

    PAGEIn a state like a New Hampshire where there are also advocates pushing for it, they've just elected a Democratic governor, who says that she would not sign it. She would veto a right-to-work law as the last Democratic governor did. So I think the prospects are not great. That we're going to see this happen in a lot of other states, but this is not, again, an issue going away. We'll be talking about it in the future.

  • 10:56:49

    REHMSusan Page of USA Today, Ron Elving of NPR, Karen Tumulty of The Washington Post, have a great weekend.

  • 10:57:02

    PAGEYou too, Diane.

  • 10:57:02

    TUMULTYYou too, Diane.

  • 10:57:02

    ELVINGThank you, Diane.

  • 10:57:03

    REHMAnd thanks for listening. I'm Diane Rehm.

  • 10:57:06

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Susan Nabors, Rebecca Kaufman, Lisa Dunn and Jill Colgan. The engineer is Erin Stamper. Natalie Yuravlivker 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, D.C. This is NPR.

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