MR. DAVID GREGORY: This Sunday, as the president makes a surprise one-day trip to Afghanistan, Washington feels the full weight of a sour economy, with the jobless rate creeping up to 9.8 percent in November, a seven-month high. But still, no deal on taxes or unemployment benefits despite a summitlike sit-down between the president and Republican leaders, and a Democratic attempt to force the issue in the House.
REP. JOHN BOEHNER (R-OH): This is nonsense. All right? We're--the election was one month ago. We're 23 months from the next election, and the political games have already started trying to set up the next election.
.MR. GREGORY: Can there be agreement? And what about the rest of the crowded agenda for the lame-duck session of Congress and beyond? The START nuclear arms treaty with Russia, the ban on gays and lesbians in the military, and the now stalled debt commission report. At the center of it all, my lead newsmaker guest this morning, Republican leader of the Senate, Mitch McConnell of Kentucky, and for the Democrats, chairman of the Senate Foreign Relations Committee, John Kerry of Massachusetts.
Then, America's anxiety. When will the economy turn around? Are taxes going up? How vulnerable are we to another terrorist attack? Can anything get done in Congress? And who leads us out of this sense of limbo? Our roundtable weighs in: from The New York Times, columnists Tom Friedman and David Brooks; Republican strategist Mike Murphy; and the BBC's Katty Kay.
Announcer: From NBC News in Washington, MEET THE PRESS with David Gregory.
MR. GREGORY: Good morning. A political showdown. Yesterday, as the Senate met in a special Saturday session, Republicans blocked an effort to extend tax cuts to the middle class only, which would have raised tax rates on higher earners. The president, speaking after the vote, seemed to keep a door open to compromise.
PRES. BARACK OBAMA: We need to redouble our efforts to resolve this impasse in the next few days to give the American people the peace of mind that their taxes will not go up on January 1. It will require some compromise, but I'm confident that we can get it done.
MR. GREGORY: Joining me now exclusively, the top Republican in the Senate, Mitch McConnell of Kentucky.
Welcome back to the program. Welcome to the studio. Good to have you here.
SEN. MITCH McCONNELL (R-KY): Good morning. Good morning.
MR. GREGORY: So where are we? Are you close to a deal with the president on taxes?
SEN. McCONNELL: Well, let's put it this way, we've had more conversations in the last two weeks than we've had in the last two years, and I think that's a good sign, a growing awareness that the power's going to be more symmetrical in the next Congress, and I'm optimistic we'll be able to come together.
MR. GREGORY: And so what are the contours of what the deal might look like?
SEN. McCONNELL: Well, I'm not going to negotiate it here on, on MEET THE PRESS this morning. But I think you're, you're familiar with all the issues that are exigent. The big, the big issue on the public mind, of course, is whether or not we're going to raise taxes on anybody in the middle of a recession. And it is almost laughable that we were in session yesterday. It reminded me of the old movie "Groundhog Day." We just kind of keep doing the same thing over and over and over again. The voting, once again, on the tax issue, it could have been dealt with at any point during the course of the year. Here we are at the end of the year. I think it's pretty clear now taxes are not going up on anybody in the middle of this recession. We're discussing how long we should maintain current tax rates. And there are other issues that many people feel are important to address on unemployment compensation.
MR. GREGORY: Well, let, let's break some of those down. How long of an extension would--could you agree to? Because there's a lot of talk of it being temporary, a year or two.
SEN. McCONNELL: Well, I, I don't want to frustrate you, but I'm not going to negotiate that here on the show this morning. You know, I...
MR. GREGORY: But the notion of a temporary extension is something that you could live with, whatever that exact figure is?
SEN. McCONNELL: I would prefer to do it permanently.
MR. GREGORY: Right.
SEN. McCONNELL: And you and I have discussed that on earlier shows. I think the current tax rate is appropriate for our country. It's been in place for, for 10 years. Obviously, the president won't sign a permanent extension of the current tax rate, so we're going to have some kind of extension. I'd like one as long as possible.
MR. GREGORY: But you're comfortable that rates are not going to go up on anyone in America?
SEN. McCONNELL: I'm very hopeful that, that rates are not going to go up. And what we saw yesterday in the Senate, every single Republican and five Democrats voted that we shouldn't be raising taxes on anybody. In other words, it's bipartisan opposition to raising taxes on anybody at this time.
MR. GREGORY: What about extending unemployment benefits? You have said in the past we're in the middle of a jobs crisis. That being the case, could you then agree to an extension of jobless benefits as part of any tax cut package?
SEN. McCONNELL: I, I think we will extend unemployment compensation. We've had some very vigorous debates not--in, in the Senate, not about whether to do it, but whether to pay for it as opposed to adding it to the deficit. All those discussions are still under way.
MR. GREGORY: Do you sense there is a mandate from the American people to keep tax rates where they are?
SEN. McCONNELL: I and my members feel that the American people feel strongly that taxes shouldn't go up. I know our colleagues on the other side don't see it that way. But, look, all of, all of Republicans in the Senate, and a significant number of Democrats, feel the same way. It isn't going to happen.
MR. GREGORY: What about the impact on jobs? Senator Reid, on the floor of the Senate this week, said it's, it's fantasy to believe somehow this is going to be helpful to the jobs situation. This is what he said.
SEN. HARRY REID (D-NV): They can pretend giving the rich tax breaks creates jobs even though we know from the past decade that it doesn't. If that were the case, Mr. President, the economy would be booming.
SEN. McCONNELL: Let me, let me give you some figures that aren't fantasy. Over 700,000 small businesses pay taxes as individuals. They would be hit by raising the top rate above $250,000; 700,000 of our most productive and effective small businesses. That's 50 percent of small business income and 25 percent of the work force in the middle of a recession.
MR. GREGORY: Democrats do point out a lot of those people include some, some people who are doing quite well, whether they're law partners or other individual business owners who are not exactly, you know, the typical small, you know, business owner, mom and pop store.
SEN. McCONNELL: I understand that. But the question is, is it a good idea to raise taxes on 700,000 small businesses, affecting 50 percent of small business income, in the middle of a recession, when we know that small business is the biggest job generator in our country? I mean, I--you know, look...
MR. GREGORY: Well, but you've had these tax rates in place since 2001. What's been the impact on jobs?
SEN. McCONNELL: Imagine, imagine how much worse it would been if we'd had the, the higher tax rate. Look, this argument's over, David. You and I can continue to engage in it, but it's over. The Senate voted yesterday, and every Republican and five Democrats said we're not raising taxes on anybody in the middle of a recession.
MR. GREGORY: And bottom line on, on the extension of the tax rates, unemployment benefits being extended, you see a compromise here in short order.
SEN. McCONNELL: I, I think the American people expect us to work together to make sure their taxes don't go up, and we're working on that package. We've had, as I said, we've had more conversations in the last two weeks than in the last two years, and I think we're going to get there.
MR. GREGORY: And, and assuming that that's the case, would that also open the door then for debate and actual ratification of the START nuclear arms treaty with Russia?
SEN. McCONNELL: Look, I don't set the agenda in the Senate. What we have said--42 Republicans sent our friends on the other side of the aisle a letter earlier this week saying the two things we need to do first, decide what people's tax rates are going to be come January 1, and decide how we're going to fund the government for the next 10 months. We haven't done that either. Once you get those two things out of the way, what we do the balance of the session is up to the majority leader. He sets the schedule. He will have to decide whether or not to bring up the treaty.
MR. GREGORY: Do you see it being ratified in a lame-duck session?
SEN. McCONNELL: I have no idea what, what the outcome of that will be.
MR. GREGORY: Are you prepared to vote to ratify it?
SEN. McCONNELL: I haven't made a decision on how I'm going to vote on that yet.
MR. GREGORY: Let me talk about the debt. The deficit commission proposal came out this week, and here are just some of the highlights. And tough medicine here in terms of what they propose. Social Security: Raise the retirement age, cut future benefit increases. On taxes: Eliminate mortgage deduction, increase federal gas tax by 15 cents per gallon. Federal spending: Cap security, nonsecurity spending; freeze federal pay for three years; eliminate congressional earmarks. You said on the program back in August, if this was a credible proposal you'd be behind it. You had three senators who you appointed to this commission, all of whom voted for it.
SEN. McCONNELL: Mm-hmm.
MR. GREGORY: Are you now prepared to endorse this and be a catalyst to get some of these measures passed?
SEN. McCONNELL: First, let me say I was extremely proud of my appointments: Senator Coburn, Senator Crapo, Senator Gregg. They supported it not because they like every part of it, because they, because they thought that this comprehensive recommendation underscored how deep-seated this problem is. This is an enormous problem. I think the message to us is, let's see what we can do with the president. You cannot do entitlement reform--and for, for your viewers, entitlements mean long-term liabilities set by law. We don't even vote on them every year. Some--many of them very popular: Social Security, Medicare and the like. You cannot do entitlement reform with just one party. You can only do entitlement reform on a bipartisan basis. So I think the message to us coming out of this deficit reduction report ism it's time for the president of the United States, and people like John Boehner and myself and others, to sit down and talk about what we can do to make sure that we have the same kind of country for our children and our grandchildren that our parents left for us.
MR. GREGORY: But, but, Senator, people have been hearing this a long time, and politicians make these promises.
SEN. McCONNELL: Yeah.
MR. GREGORY: The president said there's got to be broad sacrifice.
SEN. McCONNELL: Yeah.
MR. GREGORY: Why can't you say whether you'll specifically endorse this plan, and what your, what you intend to do as a party, as the leader...
SEN. McCONNELL: Well, David...
MR. GREGORY: ...to, to, to make some painful choices?
SEN. McCONNELL: Well, it would be absolutely irresponsible to sit here on a Sunday talk show and blow the talks by starting to endorse and rule out things. What I'm saying is, this is the road map. We need to sit down with the president, see what we can do together, because the only way we will actually accomplish something--I want to actually accomplish something.
MR. GREGORY: But do you endorse these specific proposals?
SEN. McCONNELL: What I endorse is the, the effort to underscore the, the, the magnitude of the problem, and I'm prepared to sit down with the president and figure out what we can do on a bipartisan basis. That's what this report was about. Now it's time to do something.
MR. GREGORY: Let me ask you about this WikiLeaks controversy. How much damage has been done here? What's the real story here that you're focused on?
SEN. McCONNELL: I think the man is a high-tech terrorist. He's done an enormous...
MR. GREGORY: Assange.
SEN. McCONNELL: Yeah.
MR. GREGORY: Who runs...(unintelligible).
SEN. McCONNELL: He's done an enormous damage to our country, and I think he needs to be prosecuted to the, the fullest extent of the law; and if that becomes a problem, we need to change the law. I think it's done enormous damage to our country and, and to our relationships with our allies around the world.
MR. GREGORY: Is there a question of incompetence here in the Obama administration, in your mind, about how this happened?
SEN. McCONNELL: Well, I'm sure that they're, they're going to pursue the way it happened internally as well. I hear that they know who, who did it. That individual also should be prosecuted to the fullest extent of the law. And they need to be looking at how we can avoid this in the future.
MR. GREGORY: Well, that is the issue of information sharing, and Secretary of State Clinton has said, you know, part of the problem, after 9/11, more of an emphasis on information sharing. In fact, the Pentagon, she specifically said, has more access to a lot of these cables, and ultimately that's where Private Manning, who is accused of doing this, got that information. Is information sharing the problem? The ability to download information in the, in the government?
SEN. McCONNELL: I don't know, but we sure need to look at it thoroughly because this is a huge problem.
MR. GREGORY: I want to ask you, finally, about your measure of the, the president politically at this juncture. You had an opportunity to sit down with him. You said at the outset of this interview, it's more talking you've done with him face-to-face than you've done in a while, as you've met with other congressional leaders and the president on Tuesday. Here is where the president stands politically compared to Ronald Reagan and Bill Clinton at a similar juncture after they faced a tough midterm race. And you look at his approval rating, he actually rates a bit higher, which is counter to the conventional wisdom, because he's taken quite a licking here. What's your assessment of his political strength as a, as a political adversary for you?
SEN. McCONNELL: Well, the political thing will play out over the next two years, but the thing we need to do now is to figure out how we can work together. The American people didn't send us here to do nothing for the next two years. In fact, we've had a regularly scheduled election every two years since 1788 in this country, and I think--what I hope will happen is the president will hear the message of the American people. I think they spoke rather loudly and rather clearly. One pundit described it as a restraining order against what we've been doing the last two years, this splurge of spending and debt and Washington takeovers. That needs to stop. And hopefully we can focus on things that we can agree on. For example, the president has apparently secured an agreement with, with Korea with regard to trade. That's something I'm very likely to support, can support.
MR. GREGORY: And do you consider that a big accomplishment by him? Because he was criticized roundly leaving South Korea without that free trade deal, and he got it. He waited for it and he got it.
SEN. McCONNELL: Well, regardless of how he left South Korea, if he now has an agreement, that's something we ought to go forward with. And by the way, we ought to do the Colombia agreement and the Panama agreement as well, which has been languishing for years.
MR. GREGORY: But, Senator, the question I ask here is about his political strength. You, you have said that your goal is to make him a one-term president.
SEN. McCONNELL: Well...
MR. GREGORY: That's what you told the National Journal.
SEN. McCONNELL: ...his goal is to be a two-term president.
MR. GREGORY: Right.
SEN. McCONNELL: I mean, so what's unusual about that?
MR. GREGORY: What makes you think he's vulnerable enough to be a one-term president that you could succeed?
SEN. McCONNELL: Look. I don't think that we ought to be talking about what's going to happen two years from now.
MR. GREGORY: But you did talk about it.
SEN. McCONNELL: He--well, but you know...
MR. GREGORY: You said you wanted him to be a one-term president, that that was your goal.
SEN. McCONNELL: He wants to be a two-term president, I want him to be a one-term president. The American people have put us both in charge for two more years, and we need to have a relationship with each other and see what we can do working together. I hope he pivots and starts helping us reduce spending, reduce debt, ratify trade deals. He, he's in favor of nuclear power, so are most of my members. There are things we can do together for the American people that would be very important in the next two years.
MR. GREGORY: You predicted he'd become a born-again moderate. Is that...
SEN. McCONNELL: I sure hope so.
MR. GREGORY: Is that--but is that playing out in this tax debate?
SEN. McCONNELL: Well, we'll find out. We'll find out.
MR. GREGORY: But you're confident it will.
SEN. McCONNELL: You know. Dan Balz wrote in the Post this morning the two models we've been looking at for six months, the Harry Truman model and the Bill Clinton model. Truman decided to run against the Congress, worked for him in 1948. Clinton decided to do things with the Congress, it worked for him in '96. Those are decisions the president's going to have to make. My view is, we're all here to do the people's business for the next two years. To the extent that the president wants to do things that I and my members are comfortable with, we want to do that for the country.
MR. GREGORY: Is he tougher than a lot of people think in terms of being politically vulnerable, in your mind?
SEN. McCONNELL: I--look, I, I like him personally. We have different political agendas, but some of--there, there will be some overlap, and hopefully we can find a way to work together.
MR. GREGORY: Before you go this morning, "Don't Ask, Don't Tell"...
SEN. McCONNELL: Yes.
MR. GREGORY: ...the ban on gays and lesbians in the military, a lot of activity on that this week. Will that ban be lifted?
SEN. McCONNELL: It's a--you know, people are talking like that, that is the only issue. That defense bill also has abortions in military hospitals. Once you get on the defense bill, it typically takes two weeks. I don't see how we can possibly finish the Defense Authorization Bill, a two-week bill, wholly aside from these controversial items that are in it--there are a whole lot of other things in it--before the end of the year.
MR. GREGORY: All right. But even as you get into January, in your mind, do you think the support is there to lift the ban in Congress?
SEN. McCONNELL: Well, my, my personal view is that Senator McCain is correct on this. I intend to follow his lead. We'll find out when we finally get around to debating this bill, which I think will not be before the end of the year.
MR. GREGORY: All right. We'll leave it there. Senator McConnell, thank you very much for being here.
SEN. McCONNELL: Thank you.
MR. GREGORY: Appreciate it.
Coming up, the view from the Democrats on all the looming battles in Congress--tax cuts, the deficit commission, gays in the military and more. Senator John Kerry will be here coming up next. Plus, our political roundtable weighs in: from The New York Times, columnists Tom Friedman and David Brooks; Republican strategist, Mike Murphy; and the BBC's Katty Kay.
MR. GREGORY: Coming up, the politics of the lame duck session. What can Congress get done before January? My exclusive guest, chair of the Senate Foreign Relations Committee, Democrat John Kerry, up next after this brief commercial break.
MR. GREGORY: We are back, joined now by the other side of the aisle, Democrat from Massachusetts, Senator John Kerry.
Welcome here. Good to have you in the studio as well.
SEN. JOHN KERRY (D-MA): Delighted to be here.
MR. GREGORY: So, so look, the big news is tax cuts, unemployment benefits. Senator McConnell was careful in his language, but seems to be suggesting a deal is at hand. Where are we?
SEN. KERRY: Well, David, I think that there will be an agreement because yesterday's vote made it very, very clear this enormous divide between the Republicans and the Democrats. The Republicans are fighting to keep in place a tax policy that has failed over the last eight years. It has failed. We have had a net loss of jobs, and what we've seen is a Republican Party that's absolutely prepared to deny unemployment insurance to people who have been laid off, who can't pay their bills, who want to, you know, put food on the table for their families. They've said, "No, we're willing to hold that hostage so that we can give the wealthiest people in the country a bonus tax cut." And what I mean by that is, you know, people aren't focused on the fact that, under the Democratic proposal, everybody in America got a tax cut. The wealthiest people in America got a tax cut, up to the $250,000 of income. What they're fighting for is to give those people who earned more than a million dollars a year a bonus tax cut above that, even though it's the least effective way of creating jobs and, and putting impact into the economy.
MR. GREGORY: But, Senator, isn't it true that the president's own economic advisers have said to him at this juncture, "Look, you may feel like you've drawn a line in the sand, no extension on the tax cuts for wealthy Americans. But uncertainty right now in the economy means that you could lose more jobs. You could have a worsening job situation if you don't..."
SEN. KERRY: Let me tell you...
MR. GREGORY: "...if you don't extend these tax cuts for now..."
SEN. KERRY: Yeah.
MR. GREGORY: "...for a temporary period"?
SEN. KERRY: We're--we want to extend the tax cuts for every single American, but up to a level that makes sense in terms of our economy. You talk about uncertainty of the economy, how much uncertainty is there to our economy when you add $800 billion to the deficit.
MR. GREGORY: But the, but the...
SEN. KERRY: How much...
MR. GREGORY: ...president seems willing to deal, is the point. I mean...
SEN. KERRY: Well, obviously.
MR. GREGORY: ...there may be a disagreement about this still...
SEN. KERRY: But I think...
MR. GREGORY: ...but he seems willing to deal.
SEN. KERRY: I think it's critical for people to understand what the Republican--how bankrupt, how fundamentally reckless their position is and has been. And the fact is--I mean, let me go a little bigger here for a minute. Our country is challenged economically as never before. You know, people talk about American exceptionalism and how there's sort of this automatic for America. Yes, we are exceptional, but we're exceptional when we do exceptional things, when we behave exceptionally. We're not doing that today. We're locked down into a gridlock status where other countries are racing by us. I'll give you an example. Over the next 20 years, $600 billion is going to be invested in green technology and green energy. New jobs. New jobs that could be for Americans. Ninety percent of that investment's going to be in other countries, David.
MR. GREGORY: What about the Chinese?
SEN. KERRY: By the Chinese and by a lot of other people. You know, two years ago China produced 5 percent of the world's solar panels. Today they produce 60 percent. We're not even in the game. We, we invented this technology at the Bell Laboratories 50 years ago. We don't have one company in the top 10 companies of the world. Shame on us. The point I'm making is that you can't just talk about American exceptionalism and then sit around and feed the frenzy of this tax cut at the upper end. You've got to invest in America's future.
MR. GREGORY: But, you know, a lot of viewers will look at this, especially liberals, Senator...
SEN. KERRY: Yeah.
MR. GREGORY: ...and they'll say, "Absolutely right. Senator Kerry's got it exactly right. Then why is the president caving to the Republicans?"
SEN. KERRY: He's not.
MR. GREGORY: What is the, wait a minute, but what is the political fallout if the president makes a deal where he might get an extension of unemployment benefits, but all of these tax cuts are, are extended for a period of time, including on the wealthy Americans.
SEN. KERRY: Well, let me tell you what the president is fighting for, and appropriately. And, and first of all, the president's not caving. The president insisted that we have the votes that we had yesterday so that America could see what the Republicans are fighting for, and they could see what we're fighting for. His preferred position is $250,000. Give every American a tax cut up to say, $250,000, but don't, don't put money back into the pockets of people who may never invest it in the United States. I mean, if you're earning more than $1 million a year, you--you're--that investment, when, when you give that tax cut, you get about a 30 cent return on the dollar given. If you give unemployment insurance, you get $1.60 back on the dollar that you put in. There are multiplier effects that are a reality of our economic laws. The Republicans are ignoring them...
MR. GREGORY: All right.
SEN. KERRY: ...in order just to feed that upper end. And, and, and they're willing...
MR. GREGORY: But what's the political price, is what I'm asking.
SEN. KERRY: They're willing to hold unemployment compensation hostage to that desire to give a bonus tax cut.
MR. GREGORY: I understand. But, but you also heard that there may be a deal on that as well.
SEN. KERRY: Well, all right, let's say there's a deal.
MR. GREGORY: And that's, that's just political compromise.
SEN. KERRY: Here's the problem. You just had the minority leader sitting here for whatever period of time and all he talked about was the need to come to them. All he talked about was if they could do something that "makes us comfortable." That's not how you compromise. They need to have a little discomfort, just as we have a little discomfort.
MR. GREGORY: So what does the president do to create that discomfort?
SEN. KERRY: Well, I think he's...
MR. GREGORY: Would you not agree that politically the, the problem for the president has been he has done nothing to make the Republicans uncomfortable.
SEN. KERRY: Just a minute, David. Let me, let me take you on, on that. The president of the United States came into office with a president who'd left him with a $5 trillion add-on to the debt of this country, an unprecedented financial crisis. The fact is that the TARP that we passed that everybody hates--they hate the word, they hate the concept--it saved, it saved countless numbers of jobs in this country. The Recovery Act saved millions of jobs in this country and brought our financial system back from the brink. Wall Street ought to be singing this president's praises. We've had a 60 percent increase in the stock market in two years. How often does that happen? You have a $3 trillion increase in the net value of the Fortune 500 companies, $3 trillion increase in two years. Under George Bush, in eight years, it only increased by several hundred billion. You've had the Hire Act, the Republicans opposed it. It created hundreds of thousands of jobs. The Recovery Act, the Small Business Act.
MR. GREGORY: I know that. But I'm asking you a political question, which is, where do you create the discomfort? I mean, you, you, you know the game here as a senator.
SEN. KERRY: The president...
MR. GREGORY: You've run for president.
SEN. KERRY: Right, let me tell you point blank.
MR. GREGORY: You know the pressure points in Washington.
SEN. KERRY: Here's what the president is doing. The president is fighting to get unemployment insurance that they have held hostage. This is the point. People need to focus in America. The Republicans have been willing to hold unemployment insurance hostage to this bonus tax cut that has the least impact and adds to the deficit. And the phony recklessness of their position is this, they've said for months, "We can't give you unemployment compensation because it's unpaid for and it will add to the deficit." But yesterday they were willing to vote for a $4 trillion increase that wipes out everything the debt commission is doing, in order to give a tax cut to the wealthiest people. Now, the president's prepared to compromise to get unemployment insurance, to get the work for pay tax cut, to get a child care credit tax cut, to get additional tax cuts that go to average people and will create jobs. But he wants to do more than that, and this is the most important difference between us and them. The Republican agenda is tax cut and cut spending. We cannot cut our way to competition with these other countries. If we're going to be a great power, if we're going to project in the world, if we're going to put America back to work and be part of the $6 trillion market that is the new energy market of the future with six billion users, we need to invest in America's future.
MR. GREGORY: All right.
SEN. KERRY: And the president is fighting to get an infrastructure development effort in America so we regrow our own country. He's fighting for an energy policy that they fought against all last year and delayed and delayed and delayed, even though we made compromise after compromise. And I know that because I was negotiating it. And we need R and D, we need science, technology, engineering, math. We need to kick America into gear. This is our Sputnik moment. We've sort of seen Sputnik going across the sky, but we've done nothing similar to what we did...
MR. GREGORY: All right.
SEN. KERRY: ...in the 1960s to respond to it.
MR. GREGORY: I want to get you on a couple of other matters here that are very important. I want to start with WikiLeaks. You heard Senator McConnell says this a "high-tech terrorist." Secretary Gates, Defense secretary, of course, had a slightly different view of what the fallout actually is, and this is what he said this week. And I want to show it.
SEC'Y ROBERT GATES: Now, I've heard the impact of these releases on our foreign policy described as, as a meltdown, as a, as a game changer and so on. I think, I think those descriptions are fairly significantly overwrought. The fact is, governments deal with the United States because it's in their interest, not because they like us, not because they trust us, and not because they believe we can keep secrets.
MR. GREGORY: You disagree with that in terms of what the damage done here is?
SEN. KERRY: I think there, there is damage and maybe a little bit more profound than the secretary. I don't think it's, goes to the extent that some people have been saying, but, yes, there is real damage. Social Security numbers of individuals have been made public. Technology about roadside bombs has been made public. The relationship of a president, let's say, of Yemen, who is involved with us in helping to fight domestic terror in Yemen has been exposed for parts of his relationship with the United States. It could be very damaging to our efforts there. There are many similar kinds of efforts. In Germany, some people are calling for the return of the ambassador. In other places, they won't talk to some of our people for a while. This hurts. This--I, I think this act...
MR. GREGORY: Will some ambassadors be removed from countries?
SEN. KERRY: I, I can't tell you, but it's possible that in some places people are going to say they can't work with them.
MR. GREGORY: Mm-hmm.
SEN. KERRY: And they'll say that quietly and behind the scenes. David, you know, I was very much involved back in the days when the Pentagon Papers came out. This has no relationship to something like that. This is voyeurism. This is sort of a anarchical kind of act by someone who wants attention that is not revealing some truth about a government lying or a policy that's been misled. This is just letting people in on the inside of something where it has great ability to undo our ability to protect the interests of our country.
MR. GREGORY: I want to ask you, finally--this is a bigger topic than we can get into all the details of, but I want to ask you about Afghanistan. The president visiting the troops there this weekend, a surprise visit. And when we talk about our goals, all of the concerns about Hamid Karzai, the Afghan leader, questions about corruptions and so forth. And it, and it takes me back to a famous moment before you were senator, April 1971, when you said this on Capitol Hill about Vietnam.
(Videotape, April 22, 1971)
SEN. KERRY: How do you ask a man to be the last man to die for a mistake?
MR. GREGORY: My question to you, as you look at the landscape of our withdrawal plans in 2014, is it a mistake in Afghanistan to think, to ask soldiers to be the last to die in a war that may not be able to achieve the results that we have laid out forth?
SEN. KERRY: Well, first of all, I, I just looked at that and I said, "Boy, he needs a haircut." But leaving that aside...
MR. GREGORY: Right, right.
SEN. KERRY: ...look, in my judgment, Afghanistan is just not Vietnam. We shouldn't have been in Vietnam. It was a surrogate war, it was a civil war, it was a Cold War surrogate war. There were any number of reasons why it was a gigantic mistake. In Afghanistan, we're there for a purpose. Now, I don't believe we need the size of the footprint doing everything we're doing, and I've said that many times publicly. And I don't think the president, in the long run, wants to do that, which is why he has committed to this transition. I believe the president and our military and our policy is on the right track, and that track is to turn this over to the Afghans as rapidly as possible, in a way that meets their needs to have sufficient stability and capacity to survive, and our needs...
MR. GREGORY: Can you do that by 2014?
SEN. KERRY: ...and our needs to be able to prosecute counterterrorism efforts. I think you can do a lot of counterterrorism with a smaller footprint and still manage the, the, the progress of Afghanistan. And most of that, in my judgment, will depend on what we're succeeding in doing in Pakistan.
MR. GREGORY: Mm-mm.
SEN. KERRY: Pakistan is as much the key of the outcome in Afghanistan as anything else. Now, can we do it by 2014? Yes, I believe we can. And I think the president is absolutely intent on preventing this from being the mistake that begged the question that I posed in 1971.
MR. GREGORY: We will leave it there. Senator Kerry, thank you very much, as always.
SEN. KERRY: Thank you.
MR. GREGORY: Coming up next, America's anxiety. Questions about the economy, terrorism and the direction of the country. Our roundtable weighs in on our discussion so far, the question of politics and leadership. From The New York Times, columnists Tom Friedman and David Brooks; Republican strategist, Mike Murphy; and the BBC's Katty Kay.
MR. GREGORY: We are back now with our roundtable. Joining me now, the BBC's Katty Kay; Republican strategist Mike Murphy; and from The New York Times, columnist Tom Friedman and his colleague, fellow New York Times columnist David Brooks.
Welcome to all of you. So much to get to.
David Brooks, this question of this, this sense of limbo that we're in, in the country. Are we going to recover from this economy? Is there another terrorist threat out there? The fallout from WikiLeaks. What about the debt? What's going to get done in Washington? Do we learn anything in this moment about the prospect for compromise on taxes, just based on what you've heard this morning?
MR. DAVID BROOKS: Well, it depends what we believe. Sixty-five percent of Americans think the country's in decline. We go through pessimistic phases. I can't remember a pessimistic phase this long. And to me, the problem is we don't know what we want to be in 50 years. President Obama talked about building new foundations. New foundations for what? And so that's the big question that's out there. And I would just say, as the beginning of an answer to it, the one thing the United States has that no other country has is that we're a universal nation. People come here from all over the world, and we have connections to all over the world. China will never have that. And that's got to be the basis as we move forward. Once we have that defined, we'll know where we can compromise, what we can work with, what we can't do.
MR. GREGORY: Mike Murphy, this was a cartoon that caught my eye this week. I'll put it on the screen. You see it there from Weyant's World by Chris Weyant, and it's, it's Obama and Boehner, "In the spirit of bipartisanship, why don't you take a step toward the middle first?" Into the chasm. And yet, on taxes and even the extension of unemployment benefits, it looks like we're seeing the contours of a deal.
MR. MIKE MURPHY: Yeah. Yes.
MR. GREGORY: I mean, Mitch McConnell apparently underrates the value of negotiating on MEET THE PRESS, but was signaling that they're close.
MR. MURPHY: Yeah. No, no, that was, that was under McConnell's sunshine sending strategy there. Something's going to happen. I think they're going to get START, I think they're going to get the Bush tax cuts, even though we're doing this silly kind of political litigation of it now, which we just did in the election. Democrats think the big word is millionaire, Republicans think the big word is jobs. Republicans'll win in that fight. But something's going to come. It is in the president's interest to understand that two things happened at the election: People want to get something done; and they want the country to move right economically. So if he will move right economically, something will get done.
MR. GREGORY: But there's this question--for, for Katty first, and then Tom--about whether we're having the right conversation. Here is the job growth chart from 2009 to 2010. I'll put it up on the screen here. And what you'll see is the, the, the down arrow, in too many cases, lasting for too long. You see the change in jobs going up last month, but then November, only 39,000 new jobs. That sense of anxiety, and whether--we're talking about all this austerity in cutting the debt, what about investing in the economy? Are we having the right conversation?
MS. KATTY KAY: And I think that's what exactly is producing anxiety amongst ordinary Americans. And to get back to David's point that, you know, there is this sense of where the country is going, and I think Americans are thinking, "Well, if I haven't got a job, and I don't see how we're going to get out of this slump, I'm worried for the first time in generations that I might not be passing on a better country to my children; that my, my children might not be better off, better educated than I am." And that is tied in with these unemployment numbers, because that's how it's affecting people directly. And what, what's interesting, I think, to me is looking at the bright spot for America is that you don't have what you've got in Europe, where tens of thousands of people are taking to the streets demanding that the state intervene and give them those jobs or give them those benefits. And this is the saving grace for Americans and always has been is that they want to do it themselves. That you--so it's anxiety, it's not anger at the government that people are feeling. They want to fix this problem themselves.
MR. GREGORY: Tom Friedman, you wrote this week a, a column that was so popular, called--you know, about "Wiki China." Explain the premise, and why that had such traction in terms of being top of mind in, in what you're thinking about.
MR. TOM FRIEDMAN: Well, the column was about what if we could read China's cables about us, basically. And I think what the Chinese would be saying is, is how polarized the Americans are about all the wrong things. And, and that's really what I think is, is the, is the big story right now, David, that I think what, what people want to know first of all, from President Obama and our political leaders, where are we going? OK? If you don't know where you're going, any road will get you there.
So it starts with what world are you in? Well, I think we're in a flat world where, for the first time, we're competing with two billion more people just like us. OK. That's the first reality. Second reality is, in that kind of world, how do you get rich? Well, you've got to create more jobs that make people's lives more productive, more secure, more entertained, more comfortable and more healthy, OK? And you have to do that with such good infrastructure and such a productive, educated American worker that one American worker can do the job of five or 10 Chinese, and therefore be paid like five or 10 Chinese.
Well, if that's the world you're in, OK, then what do we need? We need better education, more investment in infrastructure, more immigrants. You can go right down the list. Well, if that's what you need, then what is the hybrid politics that says, jeez, we've got to cut here so we can invest over here. OK? We need to raise gas, gas taxes or carbon taxes to get money so we can actually cut payroll taxes and encourage businesses to invest in this country. So I think what people are really looking for is a hybrid politics. What they're looking for is not two parties, OK, that grudgingly compromise on their ideologies, but actually come together for a strategic collaboration.
MR. GREGORY: But that interests me, Mike Murphy, because Matt Bai wrote something in his column in The New York Times this week, and I want to put it up on the screen because I think it gets to something important here in terms of the political calculus.
MR. MURPHY: Mm-hmm.
MR. GREGORY: He write--writes, "Mr. Obama has almost invariably sought to position himself halfway between traditionalism and reform, just as his vague notions of `hope' and `change' during the '08 campaign were meant to appeal simultaneously to both disaffected independent voters and core progressives. And in virtually every case, he has satisfied pretty much no one."
So look. Here's the president...
MR. MURPHY: Right.
MR. GREGORY: ...he's probably willing to deal on tax cuts because he, he realizes the Republicans have the leverage on that right now.
MR. MURPHY: Right.
MR. GREGORY: Liberals are going to be very, very unhappy. They are unhappy about that, they feel like they're caving. Then you've got this disaffected middle that doesn't necessarily agree with Tom that says, "Well, government's got to play a big role in investing in some of this new economy."
MR. MURPHY: Well, he's caught because his base has actually become more liberal in the Congress because of many of the losses. He ought to cut them loose. They're the losing team. They just lost an historic election. The ideology is discredited. His biggest problem was he campaigned in the center, and he governed from the left. What he does--what his problem now is he looks weak and he looks secondary to the congressional battle. He ought to get out in front, he ought to pivot, he ought to have--I think you could create, and Tom kind of implies this, kind of a national interest, economic agenda to link the two because we are in a tremendous economic competition now. But it does mean a rightward move on things. And he ought to, frankly, call the Republicans to task on entitlement cutting. We campaign on it.
MR. GREGORY: Right.
MR. MURPHY: Make us do it. That would be good for the country. It would be politically tough for the Republicans, but he could become the leader again from the center.
MR. GREGORY: And it is striking to me that the Republicans won't specify painful choices when this is where they say they have the mandate to cut spending, and yet they're still so hesitant to do that.
MR. MURPHY: Well...
MS. KAY: But, David, maybe nobody will specify painful choices. The one word that politicians can't say at the moment is that you have to sacrifice. We're living in this age of entitlement where there is an almost messianic attitude to either raising taxes or cutting spending from both Democrats and Republicans. Neither side want to give on those.
MR. BROOKS: If I, if I...
MS. KAY: And neither side want to make the tough choices it's going to take.
MR. BROOKS: There's a two-level conversation going on here. At the surface level, Katty's absolutely right, that no one is going to step out and say the--make the painful choices. But inside, in private conversations, they're having a different conversation. I guarantee you right now, at the White House, they're having serious conversations about tax reform, big tax reform. In the Republican Party, there are Republicans like Paul Ryan who are campaigning within the Republican caucus for serious entitlement reform. There's push-back from the leadership, obviously.
MR. GREGORY: Right. But look at the disagreement, though.
MR. BROOKS: So what strikes me is the...(unintelligible)...level of the private conversations, which are more inspiring than what we see.
MR. GREGORY: So what do we do with that? I mean, what does it do for the country if we have inspiring private conversations?
MS. KAY: Right.
MR. BROOKS: Well, but what...
MR. MURPHY: No, no, that's the first step.
MR. BROOKS: ...Mitch McConnell said today was important...
MR. MURPHY: He said...
MR. BROOKS: ...that he was willing to sit down.
MR. GREGORY: Yeah.
MR. BROOKS: That...
MR. GREGORY: Yeah.
MR. BROOKS: To willingness--I thought what he said today was actually quite newsworthy.
MR. GREGORY: Yeah.
MR. BROOKS: He, he didn't commit himself to too much.
MR. GREGORY: Yeah.
MR. BROOKS: But he said he was willing to have a meeting, and you don't say that unless you're willing to put a lot of stuff on the table the Democrats want.
MR. GREGORY: To do something.
MR. MURPHY: It's very important because it has to start on the inside, and then it has to be forced on the voters, because it's easy to say in a poll you want all this sacrifice. And most of the time voters look at sacrifice, they grab the person suggesting it and they throw them in the political wood chipper.
MR. GREGORY: Mm-hmm.
MR. MURPHY: Voters do not reward sacrifice. Politicians are very tuned into voters. Look at the deficit commission vote. The, the retired politicians were 5-to-1 for it. The active politicians were split 50-50, on a bipartisan basis, to the credit to some Democrats.
MR. FRIEDMAN: I think, David...
MR. MURPHY: So this is where it begins inside, and it, it is a hopeful sign.
MR. GREGORY: Tom.
MR. FRIEDMAN: I think, you know, you were saying that this 40 percent in the middle, or, or Mike was saying that, I'm not sure who said--that they're against what's going on. I disagree. I think they will be for it if they think the president has a plan to make America great again.
MR. GREGORY: Mm-hmm.
MR. FRIEDMAN: If they don't think he has a plan for that, but he's just doing health care, they're going to say I don't want to spend a dime. What we're looking for is something big. We're doing things that are small and easy when we need to be doing things that are big and hard.
MR. GREGORY: And a big move by--excuse me.
MS. KAY: And it's been possible. It was possible in '92. You had Ross Perot come in. He campaigned on a platform of reducing the deficit, and he got votes on it. He gave Bill Clinton the political cover to do it. But there was a very big difference. In '92, interest rates were at 8 percent, so American voters were feeling the pain directly. Anyone with a car payment, a mortgage, was feeling the pain of the deficit.
MR. GREGORY: All right.
MS. KAY: They're not feeling it today.
MR. GREGORY: Let me take a quick break here.
MS. KAY: It's an abstract concept.
MR. GREGORY: I want to come back, continue this, but also talk about some of the political leadership questions. Who leads us out of this sense of anxiety? More from our roundtable right after this break.
MR. GREGORY: We're back. More from our roundtable. This sense of America's anxiety and who leads us out of this.
David Brooks, I want to put this back on the screen because I think it's instructive in terms of where the president rates in his approval compared to Reagan and Clinton, November '82 and '94, they both suffered big midterm defeats. We know how that story played out in terms of second terms. Is the conventional wisdom wrong here, that somehow Obama's vulnerable and he's weakened? Is he, in fact, after all the beatings he's taken, potentially stronger politically?
MR. BROOKS: The conventional wisdom is never wrong.
MR. GREGORY: Never wrong. Right. Yes.
MR. BROOKS: No. He's weaker than those guys because the economy is not Reagan's economy, it's not Clinton's economy. And he's good nationally, but we don't win elections nationally. We run in Ohio and Indiana and North Carolina and places like that...
MR. GREGORY: Yeah.
MR. BROOKS: ...and he's extremely weak there. And then the important thing that happened this week is the collapse of liberal morale. A lot of liberals have said he's just not strong, he's not fighting. And he, you know, Brother Murphy, as much as I love you, but he can't just leave those guys as the losing team. He's a Democrat.
MR. GREGORY: Right.
MR. BROOKS: He's got to rally those guys and win back the Senate. I think he's strong, he's a great politician, he'll be back. But I, I think the troubles have been mounting on the left and the center for him.
MR. GREGORY: The issue is, and I've tried to raise this with Senator Kerry, I'm not sure I got, you know, a very clear answer on this, which is politically, what does the president do to make life hard for Republicans? Because they, I mean, I've talked to Republicans who say he's making it very easy for us to say no.
MR. MURPHY: The meanest thing you can do in politics is steal the other guy's act. Bill Clinton was a master at it. He ought to go to that playbook and learn. I think he is in more trouble for those structural reasons, but more trouble also means more opportunity. He needs to make big moves, he needs to move ideologically. He's never going to get the left back. He's broken their hearts. And they are the losing team in numbers. So yeah, he can't completely cut them off, but he can't do what he did for the last two years, which is let them drive. He needs to be the--he needs to run against all of them and create this agenda of economic nationalism with a conservative tilt. He's got to move or we're going to keep relitigating this stuff. The Democrats are silly to keep doing this millionaire thing.
MR. GREGORY: Hm.
MR. MURPHY: It's been beaten to death, it's a loser.
MR. GREGORY: Ah, ah, ah...
MR. MURPHY: We keep winning that way. Now, it--I'm a, I'm a partisan Republican. I'm happy to keep winning.
MR. GREGORY: Yeah.
MR. MURPHY: Wait two years, get a Republican president and run the table, which we have a good shot, now, of doing.
MR. GREGORY: But what's the theory of the case for a Republican?
MR. MURPHY: Right now?
MR. GREGORY: To win, yeah.
MR. MURPHY: We can run the economy.
MR. GREGORY: That's it?
MR. MURPHY: We win that, we win the election.
MR. GREGORY: I want, I want to come back to some of the presidential stuff.
Tom Friedman, I want to show the cover of The Weekly Standard this week on this WikiLeaks fallout. It's Hillary Clinton on the, the cover with a number of phones to her ears, trying to mitigate the damage here. What have we learned and what really hurts about all this?
MR. FRIEDMAN: Well, I think the thing that we've learned the most, David, is how we're, we're leaking power. You know, that, that's my view of it. We're--what do we do? We're begging the Saudis to not have their private donors fund al-Qaeda. OK? So what do we do, we borrow money from China. We cycle it through our cars, send it to Saudi Arabia. They send it to the Taliban, their private individuals, and then our soldiers go over and try to kill them. We're begging China, "Please, China, North Korea wants to send ballistic missile parts to Iran through Beijing Airport, could you not do that?" No, can't do that either. So why are we in this situation, David? Because basically we were hooked on oil. We're addicted to oil, and we're addicted to credit. And there?s a fundamental law, OK, of geo politics. Addicts never tell the truth to their pushers. China is our credit pusher, Saudi Arabia is our oil pusher, and we cannot have a frank conversation with them because we are in their debt.
MS. KAY: Yeah.
MR. BROOKS: Can I, can I--I rarely disagree with either of these guys, but let me disagree with you, Tom, on this one. You know what...
MR. GREGORY: (Unintelligible)...points, by the way, for Freeman--Friedman. Friedman.
MR. BROOKS: When, when Jimmy Carter was president, did he snap his fingers and the country do what he wanted? When Bill Clinton--I covered those summits in the '90s, we did not snap our fingers. When Ronald Reagan was trying to place missiles in Europe, didn't snap his fingers. Harry Truman, we were the height of our power, we couldn't tell China what to do. China attacked us in North, in Korea. So, you know, I'm not sure--I, I think what it shows--I'm not sure we're leaking power.
MR. FRIEDMAN: Mm-hmm.
MR. BROOKS: We've got the problems that you've described. But the other thing it shows is there's no secret conspiracy, that the stuff that's going on inside, which these cables reveal, is the stuff that we, as journalists, reveal ever day. And the people who think there's some hidden secret conspiracy in government, that's just not true.
MR. GREGORY: But what about the fallout? I mean, does this really hurt America?
MS. KAY: I think it hurts, the fact that there are not back channels and, perhaps, people who had been willing to share information with American diplomats are going to be less willing to do so. We've already seen a senior German official resign because he had--was named in the WikiLeak cables as sharing information and being useful to American diplomats. We have a Canadian ambassador also might be resigning for the same basis. I think having people around the world who are now thinking twice about whether they're going to have private conversations with American diplomats doesn't help Americans.
I agree with Tom. I think that the WikiLeaks shows that this is a super power whose powers are not so super anymore, that when it comes to--we had a period, after the end of the Cold War, where America was the only big guy on the block and where you could get other countries to do what you wanted in very big questions, and you haven't got that now. With China, North Korea, Russia, even. We're having to do deals with Moscow to get what we want there, and we're not always getting it when it comes to Iran. So...
MR. GREGORY: It was...
MR. FRIEDMAN: (Unintelligible)...David, which is that that was a bipolar world. The reason we couldn't do a lot of it because there was a Soviet Union on the other side.
MS. KAY: But post, post the end of the Soviet...
MR. FRIEDMAN: That Soviet Union has collapsed now, and we should actually have more leverage.
MS. KAY: And we were the, we were the big guy.
MR. MURPHY: A lot of these countries have a cynical strategy of abdicating any responsibility because Big Brother America will do it.
MR. FRIEDMAN: Yes. Absolutely.
MR. MURPHY: The Middle East is a great example. In the private room, go clean up every problem we have.
MR. FRIEDMAN: Absolutely.
MR. MURPHY: And meanwhile we cash in on oil.
MR. FRIEDMAN: Yeah.
MR. MURPHY: I think the problem with the WikiLeaks things, and I think Senator Kerry was right about that, it, there was no ideologist reason for it, no argument. It was pure destruction. It was a huge monkey wrench into the machinery of American diplomacy. I feel sorry more than anybody in the country right now for the U.S. ambassador in France, because you know the French foreign minister he's going to play that stuff to the max. And in a thousand small little negotiations...
MR. GREGORY: Yeah.
MR. MURPHY: ...our team now is playing with a sandbag tied around it...
MS. KAY: It makes the job harder.
MR. MURPHY: ...which is bad for America. This was an act of treason.
MR. GREGORY: And to that point, the politics of this, and I want to, I want to touch on some of how this is used and, and more broadly. It was interesting, as, as we think about the theory of the case for the right and who some of the players are on the right, Romney was out this week on Jay Leno. Sarah Palin continues to be out there in big form with her book. And my colleague, Joe Scarborough, wrote this in Politico, that I thought was interesting in terms of how the right is dealing with Sarah Palin. "Republicans have a problem," he wrote. "The most-talked-about figure in the GOP is a reality show star who cannot be elected. And yet the same leaders who fret that Sarah Palin could devastate their party in 2012 are too scared to say in public what they all complain about in private.
"Enough. It's time for the GOP to man up."
MR. FRIEDMAN: Mm-hmm.
MR. GREGORY: And my question is, what impact does she have whether she runs or doesn't run? Because she's a force.
MR. MURPHY: Yeah, a huge force, though a huge force now. You know, we're 14 months away, even though that sounds painfully close, to when the caucuses and primaries may begin. I think--you know, I started--I've been a critic all along. It started on this show at the Republican convention saying I thought she was a bad strategic choice because she's a poison pill in the general election, wipe us out, I believe. But in the Republican primaries, particularly in the movement conservative silo, which generally will win the Iowa caucus and therefore get a lot of momentum, she's very, very powerful, if she runs. So I think she'll have a half life, but she's going to be a terrifically powerful force, in some ways for good. She's kind of a polemicist and everything. But as a candidate, she'd be a disaster.
MR. GREGORY: I've...
MR. MURPHY: And we'll see if other Republicans start to take that position quietly. A lot of them do.
MR. GREGORY: I've got a minute left. Tom Friedman, the president, we saw, I think we have some of the pictures of the president, a surprise trip to Afghanistan in the holiday season to buck up the troops. But it's also coming at a time when we have a review that's under way of our Afghanistan policy. You heard Senator Kerry say he thinks the footprint can get a lot smaller. Where are we on Afghanistan, and how fraught do you think this review process will be?
MR. FRIEDMAN: To me, David, the first rule of Middle East politics is the Middle East only puts a smile on your face when it starts with them. OK? When they want it more than we do, whether it was Camp David or the Oslo peace agreement. And you read the WikiLeaks, basically, and it's all about, "Who's going to pay me which, you know, amount of money and, which, rubles or dinars or dollars, to do what you want." So we are basically paying our Afghan and Pakistani partners to be two-faced because if we didn't pay them to be two-faced, they would be one-faced and all against us. That's not a winning hand.
MR. GREGORY: And that's...
MR. FRIEDMAN: That's the hand we're holding.
MR. GREGORY: That's what we're up against right now.
All right, we're going to, we're going to have to leave it there. But thank you all very much.
Before we go, a quick programming note. Be sure to join us next week. I'll have an exclusive interview with New York City Mayor Michael Bloomberg on leadership and politics and where we go.
That is all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.