updated 12/12/2010 12:37:41 PM ET
MR. DAVID GREGORY: This Sunday, the tax fight. The president gets some powerful support for his deal with Republicans, but liberal Democrats are in revolt, unmoved by the president's rationale for compromise.
PRES. BARACK OBAMA: I think it's tempting not to negotiate with hostage takers, unless the hostage gets harmed. Then people will question the wisdom of that strategy. In this case, the hostage was the American people.
MR. GREGORY: Will the deal pass Congress? And what will it do to create jobs? We'll ask our lead news-maker guest, the chairman of the White House Council of Economic Advisers, Austan Goolsbee.
Then, the politics of the center. If Washington is broken, is the answer an independent? Independent mayor of New York City Michael Bloomberg joins me exclusively to discuss the economy, the president's leadership, and his own political future.
Finally, our political roundtable on the president's course correction after the midterms. What does the tax deal say about the prospects for bipartisanship over the next two years? With us: Democratic congressman from New York Anthony Weiner; former congressman from Tennessee, Democrat Harold Ford; editorial page editor for The Wall Street Journal, Paul Gigot; and NBC News White House correspondent Savannah Guthrie.
Announcer: From NBC News in Washington, MEET THE PRESS with David Gregory.
MR. GREGORY: Good morning. Back in September, Austan Goolsbee was appointed chairman of the president's Council of Economic Advisers, the two-person agency charged with providing the president with objective economic advice to help shape his policies both at home and abroad. Along with Treasury Secretary Tim Geithner, Goolsbee is part of the group that delivers a daily economic briefing to the president. He's been part of the president's inner circle and one of his closest advisers since the two met when Obama was running for the Senate in 2004. Goolsbee is now front and center in the administration's attempts to achieve agreement in Congress on this tax cut deal before they go home for the holidays.
Mr. Goolsbee, welcome to MEET THE PRESS.
MR. AUSTAN GOOLSBEE: Thanks for having me, David.
MR. GREGORY: And let's start there. You going to get a deal? Is this going to pass through Congress before Christmas?
MR. GOOLSBEE: I certainly hope it does. I mean, the--what the president got in the package is very important for the economy. And to see 150, 200 million people and their families have their taxes go up in less than three weeks I think would be a serious blow. So I, I think everybody should take a step back if they--I understand the feeling that it's a bitter pill to swallow, the high income tax cuts. But what the president was able to get that is substantially bigger than that and important for the economy, whether it's incentives for investment for firms, whether it's a payroll tax cut for 155 million workers, money for college education, etc., it's really important and we can't let that go away.
MR. GREGORY: You're predicting passage, though?
MR. GOOLSBEE: I, I'm predicting passage.
MR. GREGORY: Let's talk about the rationale for this deal. This week the president's economic adviser, Larry Summers, warned of the consequences of inaction here in a briefing. I'll put part of what he said up on the screen. "Failure to pass this bill," Summers said, "in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip [recession]." Now, for months this administration, the president's economic advisers, have been downplaying, dismissing the idea of a double-dip recession. And yet here, when it comes to building political support for this tax deal, suddenly this is the, the fear. Is this a scare tactic?
MR. GOOLSBEE: Well, look. I, I think that takes Larry's comment a little out of context. I think all private forecasters agree that--when they saw this package announced, you saw them step forward and say that it would significantly raise the growth rate of the United States in the coming year if we were to pass it and get the unemployment rate down and jobs created more than they thought before that. And if you let these tax cuts expire, which they will in 20 days if we do nothing, I think that would be a serious blow to the economy. Everybody agrees on that. So I, I don't think we should get into the semantics of whether it's what--how much it raises the probability of double dip. I think we should just recognize not acting is very bad for the economy, and acting would be good for the economy. That's why we should do it.
MR. GREGORY: What about the effect on jobs? Because that's what matters here, right, whether the unemployment rate is going to come down. Ron Brownstein, in his column in the National Journal, is critical of that prospect of stimulus. This is, again, part of what he wrote this week: "It further entrenches," this deal, "the Bush tax cuts, even though the median income and the number of Americans with jobs are lower today than when the tax cuts were originally signed in 2001 (an almost unprecedented decade-long record of futility)." What evidence is there that this kind of tax cutting is actually going to get people back to work?
MR. GOOLSBEE: OK, wait. Be, be a little careful with that because the context before the president came out with this deal was a bit the cycle of dysfunction, in which Democrats are putting forward reasonable ideas like a three-month extension of unemployment--defeated; extending the middle class part of the Bush tax cuts--defeated. The Republicans are also arguing about the Bush tax cuts. What the president was able to do in this negotiation was expand the board beyond just the Bush tax cuts. The important stuff in this, in addition to preserving the tax cuts for the middle class, are the Obama tax cuts. So you've got incentives for education, a new payroll tax cut for 155 million workers, the earned income tax credit, investment incentives that are new. These are things which I think help the economy. And all I would say to Mr. Brownstein, who I respect a great deal, is that when they announced this package--it's not often that Washington announces something that leads the private economic forecasters to come out and say, "We believe the GDP growth rate will be one point higher." But that's what they did.
MR. GREGORY: But I'm asking about the president's economic philosophy. But, Mr. Goolsbee, this is the tough question.
MR. GOOLSBEE: Yes.
MR. GREGORY: The president and his economic team said in the first stimulus that the tax cut provisions there were the least stimulative part of the package. Now I'm asking whether or not you believe there's a change in philosophy here, that in fact tax cuts are going to put people back to work and stimulate the economy.
MR. GOOLSBEE: Well, the, the question is tax--which tax cuts? I don't believe, the president doesn't believe, that the high income tax cuts work, period. I don't think the evidence supports that. And, as I say, that's a bitter pill to have to deal with. But it's a compromise. And by giving that one piece, we were able to get a series of things that I think make a big difference to the middle class and to working families.
MR. GREGORY: All right, but what about 2012? This is a two-year extension. The president said, "Look, you know, we're going to wait till 2012, make the case that these upper--the tax cuts on the upper earners, that they don't make economic sense." What makes him think that he can make a better case in 2012? You really think in an election year you're not going to see a vote in Congress to extend these?
MR. GOOLSBEE: Well, I think the, the only argument that's being put forward by the Republicans of why to extend them are, as you come out of the deepest recession since 1929, we shouldn't affect anybody's taxes. In 2012 that's not going to be the circumstance. In 2012, I believe they will have to stand up and defend on their own merits that they think these high income tax cuts work, and they will not be able to do that because they don't. But the point was, by giving on this one issue, the president got more than twice as much than the size of those for his priorities that are going to help us grow our way out of this.
MR. GREGORY: All right, we're--let's talk about the broader context here. We're talking about a jobs crisis, we're also talking about a debt crisis. This is what Treasury Secretary Geithner said back in August about a temporary extension of the tax cut for wealthiest Americans in the country. This is what he said.
(Videotape, August 4, 2010)
SEC'Y TIMOTHY GEITHNER: The world is likely to view any temporary extension of the income tax cuts for the top two percent as a prelude to a long-term or permanent extension, and that would hurt economic recovery as well by undermining confidence that we're prepared to make a commitment today to bring down our future deficits.
MR. GREGORY: Now, you've got a compromise here, but isn't the secretary's warning already coming true? Eighty hours after the president says the debt commission did great work to slash the deficit, within 80 hours he's announcing this compromise deal that adds a trillion dollars to the deficit; and a two-year extension to 2012, when the prospects of reversing these is really very difficult to imagine, in an election year, that Congress wouldn't extend the tax cuts further.
MR. GOOLSBEE: Well, you got a couple questions embodied in that question. The first, on the adding to the deficit, it's--the majority of that money is preventing taxes from rising in this recession. There's--that's $500-plus billion of the total. There's $350 billion of new tax cuts that are on the Obama program. So I think it's, it's a little bit different. I agree that that is the downside. The president doesn't support--if we were voting just on extending the high income tax cuts on their own, we would be 100 percent against it. The--they don't work, and we've all been publicly stating for many--for a long time that they don't. But by trading that, we were able to get things that really matter for the economy. And...
MR. GREGORY: But how can you show you're serious about long-term efforts to bring down the debt?
MR. GOOLSBEE: OK, then that's the second part of your question, and what I would emphasize there is the, the Bowles-Simpson fiscal commission and other fiscal commissions highlight that it's medium and long-run fiscal consolidation and responsibility which is their goal. You cannot reduce the deficit if the economy is not growing. Period. They each have made clear that the short-run growth of the economy--we, we should not be conflating medium-run deficit reduction with short-run getting out of recession and getting ourselves growing.
MR. GREGORY: That's not a distinction Secretary Geithner made in August.
MR. GOOLSBEE: Well, I, I, I don't know that that's true. Secretary Geithner has made that distinction many times.
MR. GREGORY: Well, the, the language is plain, which is that if you extend them temporarily, which was done...
MR. GOOLSBEE: Well, I don't what is said just before and just after that.
MR. GREGORY: Well, but his language says--I didn't take it out of context.
MR. GOOLSBEE: We have said...
MR. GREGORY: The language is plain.
MR. GOOLSBEE: ..."Do not, do not make these high income tax cuts permanent. We cannot afford to do that. It would be a mistake." I agree there is some risk. But we are going to fight that; and, as I say, in 2012 we will have been growing out way out of this and those tax cuts will have to stand on their own merits, which they cannot. In the meantime, by making that two-year trade, we got things on the Obama priority list, twice as much as what's in those high income tax cuts, that are fundamentally important for the growth of the economy.
MR. GREGORY: But, Mr. Goolsbee, is it a fundamental flaw that this compromise did not accompany long-term solutions to deal with the debt?
MR. GOOLSBEE: I, I don't know that we could sort out the entire long-run solutions to the debt in the 20 days that remain before hundreds of millions of Americans are about to see their taxes go up. The president created the fiscal commission, believes that the medium and long-run fiscal consolidation that's required in the country is critically important. But we've got to sort that out in a way that is distinct from getting the economy growing, which is what we're going to do with this package.
MR. GREGORY: Be--after two years, when you hit that two-year mark of the extension, do you agree with Peter Orszag, who was the budget director for the president, that tax cuts for wealthy Americans, even for the middle-class, are simply unaffordable?
MR. GOOLSBEE: Well, I absolutely agree that the 700 billion that you've got to borrow to, to pay for the high income tax cuts is a mistake because that doesn't work. Now I--the president has called for extending the middle-class part of the tax cuts permanently, and I don't think you can try to balance the budget just on the backs of the middle class. That will not work.
MR. GREGORY: But can we afford even middle-class tax cuts?
MR. GOOLSBEE: We can...
MR. GREGORY: Peter Orszag said we can't.
MR. GOOLSBEE: It depends what other actions you take. It's clear that the medium and long-run fiscal challenges facing the country have to do with the rise of entitlement spending, they have to do with the longer run imbalances that we've created in the structure of the system. It--you can't just choose one thing and say, "Can you afford this one piece?" unless you're looking at the whole package. That's why the president set up the commission.
MR. GREGORY: Final question, quickly. When do you think we'll see a meaningful reduction in the unemployment rate?
MR. GOOLSBEE: Well, as you know, the unemployment rate in influenced, not just by how many jobs are created, but also by people coming in from the out-of-the-labor-force status. There's an official forecast and--that the government puts out and we update it every six months, it's been a little better so far this year than it was forecast to be in February, but it's not nearly enough. Having private sector job growth for 11 months and adding 1.2 million jobs is a good start, but we've got to do much more. This tax deal, according to private forecasters, goes a long way to up the growth rate. That's why the president's for it. That's why he insisted to try to get these things in it.
MR. GREGORY: And it'll bring down unemployment in your view?
MR. GOOLSBEE: I think it will, but it's--look, deepest hole since 1929, it takes a while to get out of that, there's no question.
MR. GREGORY: All right, we'll leave it there. Mr. Goolsbee, thank you very much.
MR. GOOLSBEE: Thank you for having me, David.
MR. GREGORY: And coming up next, the politics of the center. Independent mayor of New York City, Michael Bloomberg, joins me exclusively to discuss the economy, Washington, and his own political future. Then it's our political roundtable on bipartisanship and the state of the president's relationship with his liberal base: Democratic Congressman Anthony Weiner; former congressman, Democrat, Harold Ford; The Wall Street Journal's Paul Gigot; and NBC's Savannah Guthrie.
MR. GREGORY: Coming next, my exclusive interview with independent New York City mayor Michael Bloomberg. If Washington is broken, could an independent candidate be the answer? Right after this brief commercial beak.
MR. GREGORY: We are back, joined now by the mayor of New York City, Michael Bloomberg.
Welcome back. Always nice to have you.
MAYOR MICHAEL BLOOMBERG: Thank you for having me.
MR. GREGORY: You have heard the administration make its case on the issue of tax cuts. I want to ask you, last time you were here you were in favor of a temporary extension of the tax cuts, middle class, wealthier earners. But you felt it had to be pegged to some long-term solutions as well, which is not the case in this compromise. Are you disappointed with what's been accomplished?
MAYOR BLOOMBERG: No, I think you should be encouraged because at least the--both sides of the aisle and both ends of Pennsylvania Avenue have finally come together to do something in a bipartisan way. And I'm sure the president would have liked other things, but the real world of governing is to do what is possible, and everybody getting something, nobody getting 100 percent of what they want. So I think--I view this as the first step. And incidentally, the president did get some of the things he wanted--an extension of some tax cuts that he was in favor of for business, and an extension of benefits for the unemployed.
MR. GREGORY: What about the debt? I mean, here we were--last week the president was talking about the debt, the Debt Commission's findings. Within 80 hours he is championing an agreement that adds a trillion dollars to the debt.
MAYOR BLOOMBERG: Well, the bottom line is, unless he does this, he's not going to get a chance to do the next step. You know, the president has got to get some of the other party to go along with him, and he's got to keep his own party in line. That's what leadership is all about. And you can't sit there and say, "I'm going to do everything at once," you'll never get anything done. He's made a step, he's opened the door, and I think now it's incumbent on him to keep working together with the Republicans and the Democrats. And the next thing is going to be a lot tougher, as you point out. It's easy to reduce taxes, very hard to reduce expenses.
MR. GREGORY: But is there a concern that when, really, people look at this, this is a two-year extension...
MAYOR BLOOMBERG: Yeah.
MR. GREGORY: ...2012, hard to believe any politician's not going to vote in an election year to extend tax cuts. Does it send a signal that we're not serious about tackling the long-term debt picture?
MAYOR BLOOMBERG: I don't--no, I don't think it does that. I think we are not serious about attacking the long-term debt problem, and that's one of the things that he's going to have to find a way to get on the agenda. You saw--you have this commission, well-run commission, some smart people, they come up with some ideas, and then Congress doesn't even want to consider them. That's disappointing.
On the other hand, eventually they're going to have to face some of these issues because some--the Chinese are going to stop buying our debt, we're going to get to the point where business has so little confidence they're not willing to expand. There's a lot of problems facing us down the road. Some of these trust funds, like Social Security, running out of money. Medicaid and Medicare just taking over the whole economy. So, whether you like it or not, there's going to be a point where you have to stop kicking the can down the road. And this president is, his job is, to some extent, to explain to the public why that's the case. It's going to require shared sacrifice. Never easy to get sacrifice, but that's what leadership's all about.
MR. GREGORY: What about the impact on jobs? Do you believe the tax cuts have an actual stimulative effect on the economy?
MAYOR BLOOMBERG: I don't think there's any question that they put more people--more money in people's hands, and I think that the public will do a better job with more money in their hands to stimulate the economy than you will do with government programs.
MR. GREGORY: But, Mayor, economists say, especially wealthier Americans don't end up necessarily spending money that they, that they keep through tax cuts. And look at the effect of the Bush tax cuts over a decade.
MAYOR BLOOMBERG: Well...
MR. GREGORY: ...what some have called a decade of, of futility, if you look at the number of jobs created.
MAYOR BLOOMBERG: OK. But number one, some of these things are not connected, they just happen to have at same--happened at the same time. And I think the more money you put in people's hands, the more they will spend. And if they don't spend it, they invest it. And investing it is another way of creating jobs. It puts money into mutual funds or other kinds of banks that can go out and make loans, and we need to do that.
MR. GREGORY: What about the president's leadership? You've had some observations about him, one of them in, in an interview with GQ, a portion of which I'll put up on the screen. You said, "The president, I think, needs some better advisers. He campaigns, `I'm going to do A,' then he doesn't do it. Now he's pissed off the supporters and the opponents. You go for it." Does his agreement on this deal signal to you that he's going in a different direction?
MAYOR BLOOMBERG: No. I think he signals that he's going for it.
MR. GREGORY: He is going for it?
MAYOR BLOOMBERG: Because--he's got--yeah, because he can't just sit there and depend on ideology. His job is to lead, and, and leadership is about doing the possible, not sitting around and waiting for the perfect. You know, I start with the assumption that--or with, with the belief that this president has to succeed. We all have an enormous amount of capital invested in his success. His success is the country's success. And whether you like him or not, whether you voted for him or not, if you want to vote for somebody else, you'll have that opportunity in two years. But right now we should all pull together--Republicans and Democrats, both sides of the aisle, the public as well as the elected officials--and make sure that this president's successful.
MR. GREGORY: How does he deal with an angry liberal base?
MAYOR BLOOMBERG: He says, "Look, this is what I did. This is the best I can do. Suck it up and let's get on together. We have a lot of other things that we can do together. This is not the only tough vote, this is not the only issue. And whether you're a liberal or a conservative, there are lots of other things that you probably feel the country should be doing and can do."
MR. GREGORY: The big question is whether our nation's leaders are making the tough choices, whether they're making the sacrifices to really make progress. You spoke about that this week in New York about the gridlock in our politics.
MAYOR BLOOMBERG: Yes.
MR. GREGORY: Let me play a portion of that.
MAYOR BLOOMBERG: As families struggle to get by, they have seen little but partisan gridlock, political pandering and legislative influence peddling, finger-pointing, blame games, and endless attacks. Put simply, when it comes to creating jobs, government hasn't gotten the job done.
MR. GREGORY: And to follow up on that, do you think we have the balance right between investment in the economy, innovation in our economy, and the kind of austerity that you've just been talking about that is necessary to make tough choices about how much we're spending?
MAYOR BLOOMBERG: No, no, I don't. I don't think that we're focusing on innovation. If you go back and look at history, back in like--I think it was like 1816 or something like that, DeWitt Clinton built the Eric Canal. It opened the whole Midwest. During the Lincoln presidency, the Civil War, transcontinental railway opened the whole country up. Henry Ford, about 1900, 1905, all of a sudden created factories and processes that could employ and awful lot of people. You go World War II, World War II did help the economy a little bit, but the great thing that came out of World War II was the GI bill. For the first time, the average person could go to college and have the skills to do it. And you go right on, whether it was microchips or lasers or cell phones, the Internet, each of these things is innovative things that have created new industries, and we are not putting the kind of money into basic research that we used to do, so that I don't know where the next thing is coming from. And what's really worrisome is, because of our immigration policy, the next great thing might be invented or developed elsewheres, not in our country.
MR. GREGORY: But so that raises the question of--Larry Summers suggested this, this week--which is the best thing you can do for economic recovery is make sure you achieve rapid economic recovery before you get to the business of slashing the deficit. And yet that doesn't seem to be where the politics is moving in Washington or, or even the voice of the electorate in midterms.
MAYOR BLOOMBERG: No, no, it isn't. But on the other hand, I don't believe that you need big stimulus things to get the economy going. I think there's some things that don't cost very much money but would have a much greater impact. Number one, you've got to build confidence. If you think about it, banks have money but they're unwilling to make loans. Companies have money. I think we're at a record amount of cash. There was an article in the paper the other day in companies, bank accounts that they are unwilling to spend on plant and new employees. We've got to make sure that people understand that this country is going to pull together. It's confidence more than anything else. If people have confidence, the, the consumer will start spending money. And it's the biggest single impediment to growth.
MR. GREGORY: What about tough choices? As you look at this landscape of spending, entitlements, other parts of the budget, immigration, what is a tough choice that you would support Washington making now that moves the country forward?
MAYOR BLOOMBERG: First thing is open the doors to those with the skills we need from around the world. I think the whole issue of what you do with 11 million undocumented, I feel very strongly we should give them a path to citizenship. But, regardless, the whole issue of family reunification, it's a compassion thing, understand that, but we cannot let those two issues, which are controversial and will take some time to work out, get in the way of right away starting to make sure anybody that gets a graduate degree in America from overseas gets a green card attached to their diploma. That's the ways that we are going to keep going. You know, all these other countries are trying to attract the best and the brightest, and we're helping them. It's even worse, we're educating them and then helping them. This is craziness. I call it national suicide. We have to go and, and get the immigrants here. So the first thing I would do is that, and that doesn't cost any money.
MR. GREGORY: Let me spend a couple minutes talking about politics. There was the cover of...
MAYOR BLOOMBERG: I'm shocked. I didn't think it would come up.
MR. GREGORY: Shocked we would get to that.
MAYOR BLOOMBERG: Yeah.
MR. GREGORY: Let me show you the cover of the New York Post this week about your speech. State of the Union. "Presidential" in quotes, "Mike reads riot act to DC."
MAYOR BLOOMBERG: Good picture.
MR. GREGORY: Do you think an independent can be president?
MAYOR BLOOMBERG: I don't know. I'm not going to run for president, for the, the job. I've got a great job. I'm going to finish out my 1,100 and whatever number of days it is left to go, and I'll leave the politics to the experts.
MR. GREGORY: Do you think that it's possible to scrap the two party system? Would you be in favor of that?
MAYOR BLOOMBERG: Well, the original Founding Fathers didn't seem to have an interest in party politics, and I've worked very hard in New York for nonpartisan elections. I'm going to give a speech at an organization next week on nonpartisan redistricting. Now, parties have a place; but party loyalty, I don't think, should get in the way of doing what you as an elected official believe what's right. And I think that's what most of the public wants.
MR. GREGORY: You say you don't want to run for president. Yet, based on all my reporting, you're taking a serious look at this, doing some calculations about whether this could be something that you could actually win. Are you saying that you're not even looking at the possibility of running?
MAYOR BLOOMBERG: No, I'm not looking at the possibility of running. I've got a great job, and I'm going to stay with it.
MR. GREGORY: OK. So...
MAYOR BLOOMBERG: I am going to speak out on those things that affect New York City. That's my job. People that say, "Oh, you shouldn't be talking on a national level," well, we crated 55,000 private sector jobs in New York in the last 12 months. That's much greater than the percentage we should create with our population. But we can't do everything without help from the federal government and our state government. And so I'm out there talking about immigration, talking about regulation, talking about the president being out there selling our products, all of these kinds of things, because that'll help us out.
MR. GREGORY: But if, if advisers came to you and said, "You know, Mr. Mayor, we've taken a hard look at this. We think this would not just be a vanity plate, you could actually win this thing," would you change your mind?
MAYOR BLOOMBERG: No.
MR. GREGORY: No way, no how?
MAYOR BLOOMBERG: No way, no how. Because...
MR. GREGORY: So your supporters who, who create all this buzz should cease and desist?
MAYOR BLOOMBERG: They--I don't think most of them do create this buzz. I mean, yes, they should cease and desist, but most of this is just because the press wants to have something to write about. But the bottom line is, I've got a great job, I want to go out being, having a reputation as a very good, maybe the greatest mayor ever. And I'm lucky to have three predecessors, Giuliani and Dinkins and Koch, all of whom have been very helpful in trying to make me a better mayor.
MR. GREGORY: One of the things you said, I want to play another portion of your speech from Wednesday, because you talked about the broken nature of our politics. And let me show that piece of it.
MAYOR BLOOMBERG: Despite what ideologues on the left believe, government can't tax and spend its way back to prosperity, especially when that spending is driven by pork barrel politics. At the same time, despite what ideologues on the right believe, government should not stand aside and wait for the business cycle to run its natural course.
MR. GREGORY: As somebody who wants to influence the national dialogue, you know, we've looked at this, sounds a lot like what candidate Obama said in 2008. And it's easy on the outside to say that kind of thing rhetorically. But what makes you think that you or anybody else who believes what you believe, could come in to be the president and could roll Congress, and could somehow do what the president has been unable to do in terms of bridging that divide?
MAYOR BLOOMBERG: Well, my job is to do what I'd said the federal and state government should do in New York, at our level. And been in office for nine years now, New York City has done pretty well during that period of time. We never had the deep recession that other cities have, and we have recovered faster.
MR. GREGORY: But the question is still, how do you--even a New York model, you're not dealing with Congress. Isn't it easier said than done to say from the outside, "Hey, get in there and roll Congress, tell the far left and the far right that they're both irrational"?
MAYOR BLOOMBERG: You know, this--there's no easy jobs in the world, and particularly in the politically charged world that we live in with the constant scrutiny of the press and the lack of bill--of funds to go ahead. But, you know, that's the job. And I think the president is personally capable of doing it, and I think he is doing it. I think we don't give him enough credit. I have said he should go around the world and, and sell our products. He was in India. I--he negotiated a trade deal with Korea, which I think will be great for our manufacturers who will sell to Korea, and great for the consumers who will buy stuff from Korea.
I've said that he should get more business experience on--in his advisers. Why? Well, I--well, I come from the business background, so of course I would think that. But you, you read the papers, he's talking to Roger Altman, somebody I was told in the--saw in the paper was being considered. He'd be perfect. There are other people like that who can give him a broader perspective, and I think the perspective of somebody who's actually had to get up in the morning and sweep the floors before his employees can--came in, and locked the door afterwards, and worry about how to make the, the payroll is exactly the kind of experience that he should have himself, or if he doesn't have it, because nobody's going to have all experiences, get other people that have that they can tell him and say, "You know, what you're talking about is theoretical. Let me tell you the real world." Unless you've done everything, which you can't do, you don't know everything. But you can have advisers that can give--tell you what the real world is about.
MR. GREGORY: And before you go, is Cliff Lee the key to a world championship for the Yankees?
MAYOR BLOOMBERG: You know, as they say, hope springs eternal. My job before I leave office, and I've only got three seasons to do it, is to have a Subway Series. Giuliani had a Subway Series. I'd had a World Series, had a, a Super Bowl win, haven't had a subway series yet.
MR. GREGORY: We'll wait and see. Mayor Bloomberg, thanks, as always.
MAYOR BLOOMBERG: Thanks for having me.
MR. GREGORY: Up next, course correcting. After the midterms, what does the president's tax deal with Republicans say about the prospect for bipartisanship over the next two years? And what damage will the deal do to the president's relationship with his liberal base? We'll ask our roundtable: Democratic congressman from New York Anthony Weiner; former congressman from Tennessee, Democrat Harold Ford; editorial page editor for The Wall Street Journal, Paul Gigot; and NBC News White House correspondent Savannah Guthrie, after this brief station break.
MR. GREGORY: We're back now, joined by our roundtable: NBC News White House correspondent, co-host of MSNBC's "The Daily Rundown," Savannah Guthrie; editorial page editor of The Wall Street Journal, Paul Gigot; Democratic congressman from New York, Anthony Weiner; and former congressman from Tennessee, Democrat Harold Ford.
Welcome to all of you. All right, we've talked about the substance, we've talked about the impact on the economy. I do want to talk about the politics of tax cuts this week and the president's difficulties with his liberal base.
Savannah Guthrie, really something extraordinary on Friday. President Clinton comes to meet with President Obama. They meet privately, presumably to get some advice. And then a funny thing happens on the way to the exit, and that is they find their way into the briefing room. And, and watching the scene unfold was great Washington theater. Here was a portion of it.
PRES. OBAMA: I'm going to let him speak very briefly, and then I've actually got to go over and do some--just one more Christmas party. So he may decide he wants to take some questions, but I wanted to make sure that you guys heard from him directly.
FMR. PRES. BILL CLINTON: Thank you.
PRES. OBAMA: Thank you.
PRES. CLINTON: Thank you very much, Mr. President. First of all, I feel awkward being here, and now you're going to leave me all by myself?
PRES. OBAMA: Here's what I'll say, is I've been keeping the first lady waiting for about half an hour, so I'm going to take off. But...
PRES. CLINTON: And I, I don't want to make her mad. Please go.
PRES. OBAMA: You're in good hands. And, and Gibbs'll call last question. Thank you.
PRES. CLINTON: Yeah, help me. Thank you.
(To reporter) Yeah, go ahead.
MR. GREGORY: Savannah Guthrie, what I love is that I didn't sense the awkwardness that Bill Clinton felt or that he expressed.
MS. SAVANNAH GUTHRIE: Yes.
MR. GREGORY: What was behind that? And what good did it do them, do they think?
MS. GUTHRIE: Well, it may not surprise you, having watched that, that this was not something that was planned over a series of days. This was as ad hoc as it gets. In fact, when the two presidents came down to the press briefing room, they found it locked, had to go back, were wandering around trying to get into the briefing room. They ran into press secretary Gibbs and they said, "We're looking to talk to some reporters." And he said, "Give me five minutes."
Look, they had this meeting, it was long scheduled. The president had called President Clinton after the midterms to express his thanks for what he'd done in the campaigns. They scheduled this meeting. Frankly, until they had this meeting, the White House and White House aides weren't 100 percent sure where former President Clinton stood on the tax deal. Having met in the Oval Office 90 minutes, the two presidents decided amongst themselves to come out and do this news conference. And I think, especially in a week in which the left wing of the party was so disappointed with the president, to have this former president, considered the most successful Democratic president in modern history, come out and ratify the deal, validate it...
MR. GREGORY: Right.
MS. GUTHRIE: ...they felt it was well worth it.
MR. GREGORY: And, Congressman Weiner, look, he was speaking to you. I mean, you have been outspoken in your opposition to this tax compromise. And to have the president, the former president up there to synthesize the deal, to make the case for it, this is in part what he said to opponents like yourself.
PRES. CLINTON: Look, if we had five percent growth and unemployment was dropping like a rock, maybe you could have the so-called Mexican standoff and you could say, "It'll be you, not me, the voters will hold responsible for raising taxes on middle class people if they all go down, you know, next year." That is not the circumstance we face.
MR. GREGORY: His point, this is not the time to fight in the way that you wanted the president to.
REP. ANTHONY WEINER (D-NY): Well, since he officiated my wedding, I think I'm constitutionally prohibited from disagreeing with him. But one of the things that President Clinton being there reminded us is the difference in the attitude that the White House took with the Gingrich Congress when he was there. He stood up and fought for the values of the Democratic Party, fought for what we, what we cared for and made the Congress, the Republican-led Congress, the reason that the, that the country came to a standstill with the government shutdown.
Look, many of us have been saying that we want the president to succeed. And it's simply a question of this: In these times, when the middle class is under so much pressure, when debt is approaching $14 trillion dollars, can we really afford to give millionaires $160,000 tax cut? That's really the big question here. And I think that now you saw Mr. Goolsbee, the president, even President Clinton all agree that the answer is no, yet that doesn't seem to be the fight that we had in Washington.
MR. GREGORY: In the end, do you vote against this?
REP. WEINER: Well, I think the entire House of Representatives on the Democratic side has said we're not going for this deal. I believe in a couple of things. One, we have to get something done to make sure the taxes go down on the middle class, and two, it has to be done quickly. So now we're going our job in Congress. We're going to change this, and we're going to--hopefully the president's going to back us up as we try to take out the worst things that are in it.
MR. GREGORY: Congressman, how do you see it?
FMR. REP. HAROLD FORD JR. (D-TN): This position that Anthony's taking is the one that was rejected on November 2nd. As much as I believe that all taxes should go up on every American to some small extent, we're dealing with a different Congress and a different reality. In comparison to President Clinton when he lost in '94, remember, unemployment was not at 10 percent. The kind of whipping that we took as Democrats in the Congress was not as large and as grave as it was just a few weeks ago. I think the president should lean more into this agreement. We got everything we wanted. We got the cuts for the middle class, we got a payroll tax cut, we got an acceleration of business tax cuts. We even have extended some of the other tax cuts that the president wanted, and in addition, 13 months of unemployment compensation. The only thing that we added was the cuts for the top earners. Now that's less than a quarter of the spending. If you look at the bulk of the spending, the additional debt spending here, the majority of it is for the middle class cuts which I support. Now, if we had 65 votes in the Senate, 300 in the House, I think Anthony's point would be the one that would be followed. But President Clinton said it very well. There--this is no time for a Mexican standoff. The challenges we face are grave, the agreement reached by this president and Republicans is a good one. It could have been worse. And, frankly, I think the president should be prouder of it and use different language to support it.
MR. GREGORY: But, but, Paul Gigot, the question is to you, does this signal an actual shift in the president's philosophy about what's going to make the economy work again?
MR. PAUL GIGOT: Well, they're saying, "No, no, no. No, shift." However, implicitly, it is a shift. I love the symbolism of two Democratic presidents--not one, but two--endorsing Bush tax cuts, saying, "We need them crucially to help the economy." The president, I think, is implicitly admitting that tax rates matter. After a couple of years, as you showed on the--with the, the discussion with Austan Goolsbee and Tim Geithner had said, "They don't matter." We--now they're saying, yes, they do matter, and then implicitly admitting that tax cuts matter more for growth than spending. And it makes you wonder why didn't they do this two years ago.
MR. GREGORY: Mm-hmm.
Congressman, you heard from Mayor Bloomberg. To the left, the president should say, "Suck it up. You got to take the longer view here." I gather that didn't sit well with you.
REP. WEINER: No, I--look, I--it depends on what your philosophy is. I'm not a member of the tail-between-my-legs wing of the Democratic Party. I believe we still fight for the things we care about. And I believe this...
MR. GREGORY: You think the president is?
REP. WEINER: Well, here's what I will say. This is not a fringe element of the debate that's gone on in the last 10 years. This is the very crux of it. The middle class is getting crushed while the very-well-to-do have done remarkably, remarkably well. You know, I did a little math on the back of an envelope here on the way in. Three percent of the beneficiaries of this--of the tax cuts are going to get 38 percent of the cash. It's just not fair. And also something else. You know, you cannot say you are concerned about the debt and the deficit and support giving giant tax cuts on the estate--on estates of billionaires. Or giant tax cuts to millionaires. It's just inconsistent. So I believe you fight for the values. And today, with a majority in the House, the majority in the Senate, and we control the presidency and we're acting like we have a weak hand. We have the right side of the issues and the numbers, and I don't know why should--we don't fight more.
MR. GREGORY: It's a question of timing, Savannah, too. Why it is that the president put himself in this position to have to negotiate out of such weakness and what's going to be different in 2012, another political year, for him to think he's going to be able to prevail in this argument?
MS. GUTHRIE: Well, on this latter question, you heard Austan Goolsbee basically make the argument, "We think the economy will be in a better position." They are banking everything on that because they think they'll be able to say, "Look, now we can afford to see those tax rates rise on the wealthiest Americans." One of the most potent arguments against letting those wealthiest Americans' tax cuts expire. On the Republican side was, "It will imperil the recovery. You can never raise tax in a recession." I think the president has not backed off his position of being against the tax cuts, you know, rolling back the tax cuts for the wealthiest. I think the point is he's staring at the barrel of a gun. These tax rates are going up in January, and he's not going to take that gamble. And that's why he made this deal. The question is...
MR. GREGORY: Right.
MS. GUTHRIE: ...six months ago, why didn't Democrats in the House force this issue. Why didn't they make it a campaign issue, as some liberals members of the, the caucus wanted to?
MR. GREGORY: Yeah.
REP. FORD: Democrats probably should have done that, and I supported them doing that. But, but, Paul, in fairness, y'all wrote a great editorial, and it was funny in some ways saying President Bush should have been on the panel, been up there with President Obama and, and Clinton. The reality is, one of the reasons we're in the mess that we're in, is that we passed Medicare prescription drug plan without paying for it, which President Bush did.
MR. GIGOT: I was opposed.
REP. FORD: You wouldn't ask him to be up on the panel on that one. We're fighting two wars that we have not paid for, as much as they're noble causes and noble ends to, and I got to think we're going to have a strategic reassessment of whether or not Afghanistan should continue. But President Obama has a unique opportunity now to reduce the debt. I hope The Wall Street Journal and others will ask the, the Paul Ryans of the world, will ask the Jeb Hensarlings of the world to support responsible, responsible tax increases...
MR. GIGOT: We're in favor of...(unintelligible).
REP. FORD: ...and responsible spending cuts. You cannot be for just cutting spending and not raising taxes at some level. I think this president might have had a stronger hand had he just said, "You know, we're going to raise taxes on everybody, and I'm going to stand firm." But since he chose not to do that, which I'm glad he did not...
MR. GREGORY: Right.
REP. FORD: ...I think it's the right thing to do, and I think that Anthony and others will come around and find a way to support this guy's bill.
MR. GREGORY: Well, let me, let me--quickly, and then I want to get a break in, Paul...
MR. GIGOT: Yeah.
MR. GREGORY: ...what about, you know, Peter Orszag's point, which is all of them--all of these tax cuts are simply unaffordable, and in two years, they ought to all go away.
MR. GIGOT: Right. No. No, I don't, I don't agree with that.
MR. GREGORY: You don't agree.
MR. GIGOT: Look, I'd love to see a larger tax reform...
MR. GREGORY: Right, which the president has talked about wanting to do.
MR. GIGOT: ...because all this really does, all this, this deal really does is extend the status quo. So that's not terrific. It's going to help avoid a huge hit to the economy in 2011, and that's good, but I'd love to see a larger reform. Maybe both parties can get together on that, and maybe that's the kind of debate we'll have going into 2012.
MR. GREGORY: All right. I want to take a break here. I want to come back and ask two very, you know, pointed questions. Is there something of a war between the president and the left, given his comments this week? And what does this deal say about the next couple of years in Washington in terms of bipartisanship? More from our roundtable after this quick break.
MR. GREGORY: We're back with more from our roundtable because they just keep talking even during the break. You got to hear all of this.
Congressman Weiner, to hear the president say it this week, he is irritated with liberals in his party. And, as he talked about this deal and he talked about the criticism on the left, he said it was like a return to the debate over health care and the public option. And his point was, "Look, I could have stuck to my guns on that and then we wouldn't have had healthcare reform at all." Listen to how he put it.
PRES. BARACK OBAMA: So this notion that somehow, you know, we are willing to compromise too much reminds me of the debate that we had during health care. This is the public option debate all over again.
And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are. And, in the meantime, the American people are still seeing themselves not able to get health insurance because of pre-existing condition.
MR. GREGORY: That's his view. In Congress this week, you were leading a chant that said, "No we can't," not "Yes, we can." This is a real standoff.
REP. WEINER: Well, first of all, I wasn't leading any such chant. But, look, let me, let me just say this, that the president has to understand that critique that he gets from his base and his supporters who want him to succeed is fundamentally different from the one they get from Mitch McConnell. We're trying to help him be successful, and I kind of agree with him, this is like the public option. If he would have fought harder for that, we would have had it. You know, I think that we need--the president needs to understand that there's an enormous number of us who are just waiting to be called to kind of really have this competition of ideas. We really need to have this contest. And, you know, look, he made a deal. It doesn't necessarily mean it's a great one. We, in Congress, now have it. We're trying to improve upon it. But we're on his team. That's the fundamental difference he needs to understand. When he calls us sanctimonious and says this is like past debates, all--the only reason, the only reason that it's like past debates is we still want him to be the president that we elected. And we're going to help him do that. And if he digs in and he fights for these values, he's going to find the American people support it, and we, his supporters, are really going to rally to his side.
MR. GREGORY: You know, Harold, the question was, was this a Sister Souljah moment, to go back to the Clinton era, for President Obama, standing up to the base?
REP. FORD: Look, I think it's a moment where he's standing up for America and standing up for jobs. Look, I like Anthony, respect him a lot, but to suggest that the president doesn't fight a lot, we had a fight, we had an outcome declared on November 2nd. Now, he has fought and fought and fought, and frankly, has given Democrats in the Congress the ball to run every time. Unfortunately, the American people, whether it's a communications problem, and I don't think it is. It's hard to communicate effectively when we have 9.8 percent unemployment, and have people rally around you. The reality is we've done that before. The president's move last week was an important move for the American people; and, at the end of the day, if unemployment begins to drop over the next quarter or two by a quarter point, every Democrat, including Anthony and others, will say, "This was the right thing to do. Now we have to look at the next step in reducing the debt and ensuring that we create jobs.
MR. GREGORY: But the larger question, Savannah, is, what does this say about how this president wants to do business in Washington over the next couple of years?
MS. GUTHRIE: Well, what's fascinating about this is, I don't know that there was a ton of strategy going into this. I think as, again, it was dictated by circumstances, they had to make a deal, they felt they had to. But perhaps they stumbled upon a strategy, which is to draw out the partisans on both sides and stake out this middle ground. And that news conference on Tuesday was so remarkable in the sense that it seemed to me to be the most authentic view of President Obama we've seen. This seemed to me to be the closest approximation of the man behind closed doors being forceful and compelling. But, interestingly, all that fight, all that vim and vigor, was directed toward the left of his own party. And you can see that he's incredibly frustrated by that. It's almost as though he thinks Republicans, "Well, gosh, I expected them to oppose me."
MR. GREGORY: Right.
MS. GUTHRIE: "But where's the love? Why aren't Democrats, why isn't the left in my own party supporting me when I'm out there bleeding on things like health care, things that have been articles of faith in the Democratic Party for years."
MR. GREGORY: The--there--Paul Gigot, there was a--one conservative who's been talked a lot about, The Washington Post's Charles Krauthammer, the columnist who apparently the White House loves now, at least this week, because he wrote the following, which is much more complimentary of Obama and where he's going in the next couple of years. He writes this: "At great cost that will have to be paid after this newest free lunch, this package will add as much as 1 percent to GDP and lower the unemployment rate by about 1.5 percentage points, That could easily be the difference between victory and defeat in 2012.
"Obama's no fool," he writes. "While getting Republicans to boost his reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we're-serious persona of debt-averse fiscal responsibility."
MR. GIGOT: Well, that's a little overstated, but I think Charles is right that this is a victory for the president. I mean, it's going to help the economy by not having a huge tax increase. I don't think it's going to be that great a stimulus, but the economy right now has some momentum. This makes sure that we're not going to stop that momentum and send the economy back into recession. But on when it comes to--so it is going to help him, no question about it. It also going to--helps Republicans, though, honor a campaign promise. So they get to do that. But I'll tell you, there are a lot of Republicans who aren't thrilled with this deal because they had to give up a lot...
MR. GREGORY: Mm-hmm.
MR. GIGOT: And they--they'd love to see the House Democrats defeat this, because they'll come back in January and say, "We'll clean up the mess. You'll be responsible for the tax increase, we'll get a better deal for our voters."
REP. WIENER: But it's also the only thing that the Republicans really wanted coming out of this campaign. We know what they're against. They're against health care, they're against a lot of things the Democrats did the last couple of years. The only things they really wanted they now got. They've got them. So where does the leverage come now? You know, the estate tax was going to lapse in January, it's going to go down much...
MR. GIGOT: Sure.
REP. WEINER: That's where the leverage ultimately was for the president on that. We gave away that and then some. The only question...
MR. GIGOT: But he needed to get--he needed to do that to get some of the other tax stuff.
REP. WEINER: But, but here's the thing, and I just want to make sure we understand this. Every one of the economists the president rolled out and supported this plan, every one of them said the tax cuts on the upper brackets and the estate tax do virtually zero on the stimulus side to add to that growth. Those were the giveaways to the Republicans. So the question is this, when did the fight happen, did the full-throated fight happen? Harold is a hundred percent wrong if you think it happened during the campaign. The president gave a grand total of one speech in October in Ohio where he even mentioned it. Between the time of the State of the Union and the election, this, this--our primary point of difference with the Republicans is the priorities. We defend...
REP. FORD: But, but...
REP. WEINER: We defend the middle class, they defend the rich, and we essentially backed away from that fight.
MR. GREGORY: All right.
REP. FORD: Anthony, your position was defeated roundly November 2nd. I'm a Democrat, I'm a proud Democrat. But more importantly, I'm a proud American. The president, for the first time in the eyes of many Americans, particularly independents who voted for him, said, "You know what, we're going to strike a deal." I got everything I wanted. I don't know of anything in this tax deal that we didn't get as Democrats that we wanted. And what did he do? He extended the cuts for the top earners. Now, remember, we lost an election. If we had gained 60 seats, then what you're saying, you wouldn't have to be here. There'd be a huge agreement, broad agreement, around what you're saying. The reality is, the big winners yesterday and the day before and the day before that are the American people
MR. GREGORY: All right.
REP. FORD: ...because government is working again.
MR. GREGORY: Savannah, 20 seconds. Has the president redefined himself? Is there a pragmatism about his politics now that we see over the next couple of years?
MS. GUTHRIE: Well, I'll say this, aides say he's always been this guy. Remember, back in the primaries...
MR. GREGORY: It's not how he's been seen, though.
MS. GUTHRIE: Correct. But on the left, they liked Edwards. That was their candidate, not Barack Obama. And once he became the nominee, aides say, look, people projected all manner of things on him. They say he's just being true to who he is, progressive pragmatist, and that's the president you'll see.
MR. GREGORY: All right. We are going to leave it there. Thank all of you for a heated discussion, an interesting discussion.
Before we go this morning, we want to take a moment to remember Elizabeth Edwards, who was laid to rest yesterday next to her late son, Wade. Before a crowd of hundreds of mourners gathered at her church in Raleigh yesterday, Mrs. Edwards was praised for her strength, wit and grace. The 61-year-old wife of former Democratic vice presidential nominee John Edwards died Tuesday after a six-year battle with breast cancer. She was a political force in her own right, an attorney, author and a fighter for healthcare reform. Our thoughts and prayers are with her surviving children and her loved ones.
That is all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.