MS. IFILL: A lame duck Congress comes face to face with tough choices – national security, taxes and spending, public opinion and expectation. Who will lead? We tackle that tonight on “Washington Week.”

Welcome to Washington.

Rep.- Elect Billy Long, (R-MO): I’ve never been in the capital.

MS. IFILL: Where everything old is new again, at least when it comes to party leadership.

SEN. MITCH MCCONNELL (R-KY) [Minority Leader]: In the ’08 election we had two freshman Republican senators. Obviously I’m pretty excited to be sitting here with 13 this year.

REP. NANCY PELOSI (D-CA) [Speaker of the House]: We extend a hand of friendship to the Republicans. We look forward to hearing their ideas on job creation and deficit reduction.

MS. IFILL: But is this what the voters wanted?

REP. WILLIAM PASCRELL (D-NJ): I think we missed an opportunity today to send a signal to America that we understand what happened this past election.

MS. IFILL: On the docket, $1 trillion budget bill, a tax cut debate, an ethics debate and a troubled nuclear deal.

HILLARY CLINTON [Secretary of State]: For anyone to think that we can postpone it or we can avoid it is, I’m afraid, vastly underestimating the continuing threat that is posed to our country.

MS. IFILL: And in a setback for U.S. terror prosecutions, a former Guantanamo detainee tried in civilian court gets a split verdict.

MICHAEL MUKASEY [Former Attorney General]: It is a less than satisfactory outcome to what I think was a very unwise and dangerous gambit.

MS. IFILL: Covering a complicated week: John Harwood of CNBC and the New York Times; Janet Hook of the Wall Street Journal; David Sanger of the New York Times; and Pete Williams of NBC News.

ANNOUNCER: Award winning reporting and analysis, covering history as it happens, live from our nation’s capital, this is “Washington Week with Gwen Ifill,” produced in association with National Journal.

(Station announcements.)

ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.

MS. IFILL: Good evening. This was the week where everyone was trying to make a point. Republicans wanted you to know that they are drop dead serious about cutting spending.

SEN. MCCONNELL: Old habits aren’t easy to break, but sometimes they must be. And now is such a time. Banning earmarks is another small but important symbolic step that we can take to show that we’re serious, another step on the way to serious and sustained cuts in spending and the debt.

SEN.-ELECT MARCO RUBIO (R-FL): If we can’t deal with the issues of earmarks, how are we going to deal with $13.5 trillion?

MS. IFILL: Democrats want you to know that they are the party of bipartisanship.

VICE PRES. JOE BIDEN: The message was they didn’t have a lot of faith in the Republican Party. They don’t have a lot of faith in the Democratic Party. And so it’s like, okay, we want you guys to work together.

SEN. HARRY REID (D-NV) [Majority Leader]: We reach our hands out to the Republicans. We want them to work with us as they didn’t do the last two years.

MS. IFILL: But here’s where the rubber meets the road: sometime between now and the end of the year, lawmakers have to agree on a lot of things they just don’t agree about. If they don’t, there could be consequences, up to and include government shutdowns and tax hikes. But first of all, who’s right? Who were voters actually asking – what were voters actually asking for, John?

MR. HARWOOD: Well, one of the things that they were consistently asking for in the election was a cut in federal spending. The voters tend to associate high deficits in economic bad times with the cause of the bad times or a reflection of the bad times so they want something done about. We asked in our NBC/Wall Street Journal poll this week what were major reasons why you voted for congressional candidates? Sixty-six percent said it was a major reason if they supported cutting spending. But here’s the problem, and that’s where the rubber is really going to hit the road both in the lame duck and next year when the new Congress comes in, when you talk about the specifics, including some of the specific steps that Erskine Bowles and Alan Simpson from that deficit commission laid out, they’re not comfortable with them because to save real money you’ve got to cut things like Social Security, Medicare, defense. Seventy percent of the American people said, no, not comfortable with that. Then you ask about tweaking taxes – gas taxes, home mortgage interest deductions, that sort of thing. Sixty percent said, no, don’t do that. Even when you ask, would you phase in an increase in the Social Security retirement age to 69, phase in over 60 years? Six in 10 said no, don’t want to go there.

MS. IFILL: So after all this talk about change, Janet, and all of this, we’re going to send a signal, a message to the American people, talk we’ve been hearing from Capitol Hill this week, what are the real priorities going forward?

MS. HOOK: Well, the priorities for the lame duck session go straight into the teeth of the issues that came up in the election: taxing, spending. You know, you couldn’t have a lame duck facing more basic issues because you’ve got the Bush tax cuts about to expire at the end of the year, and so if Congress doesn’t do something, everybody gets a big tax increase. They also have to figure out what the federal budget is going to be, the spending levels for the next year because before the election, Congress just punted and they have a temporary budget in place that expires on December 3rd.

So at least there are some action forcing deadlines set for Congress to move on. Another thing that’s – the unemployment benefits are about to expire on November 30th. So a lot of stuff for Congress to deal with and every time they’ve tried in the last week since they got back, they’ve bumped up against a brick wall.

MS. IFILL: And yet, and yet, we now look at the leadership – except for two new freshmen on the House Republican side, they’re exactly the same leaders who left Washington before the election.

MS. HOOK: Yes. If voters are looking for change, don’t look to the leadership. It was particularly striking on the Democratic side because the Democrats were the ones who really lost the election in a big way and there was a lot of talk about the need for change. And in fact, people were expecting the leadership to change because they thought on the Senate side that Senate Majority Leader Harry Reid wasn’t going to win, that the voters were going their leader for him. And on the House side they thought that Nancy Pelosi was going to step down from the leadership because in losing the speakership she would – now she decided instead to become minority leader. But a lot of people thought she would just stand down and there would be change there. Well, that didn’t happen so now we’ve got two Democratic leaders that are very familiar faces.

MR. WILLIAMS: May I ask you about the Washington institution of earmarks? Number one, how serious do you think the Senate is about not doing it? And secondly, if the Senate forswears earmarks, does that give all the power to the House to have them and the House members will say, well, I brought home the bacon?

MR. HARWOOD: Well, the reason why Mitch McConnell came out and said that he was going to support a moratorium or an end to earmarks is because of pressure from the House. This is something that tea party people feel very strongly about, Republicans are pushing for strongly, and can make common cause with President Obama. You know, in his post-election news conference, he very quickly embraced the suggestion from Eric Cantor, as a member of the Republican leadership, to do that.

Of course, we know – and this is why Mitch McConnell has been opposed to this step from the beginning that that makes only a trivial contribution to the deficit problem that we’ve got. And one of the challenges for lawmakers in trying to reconcile the desire for austerity with the popularity of programs is that in the mind map of many voters, they see the amount of waste in the government associated with things like earmarks as much biggest than it actually is. Pollsters have found this when they do focus groups. People think vast amounts of the federal deficit can be resolved by waste. We know from these presidential bipartisan commissions they can’t.

MR. SANGER: They sure can’t. Let me ask you about taxes because this is the part of the game that everybody’s going to be focused on between now and the end of the year. One theory is kick the can down the road, extend the Bush tax cuts for another two years, make it the big issue of the presidential election. Another theory is have the president back off a bit and just have tax increases for those making more than $1 million. And if the Republicans oppose it, the president can cast them as the party of millionaires and so forth. Which is more likely? Is there another scenario? Why didn’t the president get this resolved before the election?

MR. HARWOOD: Well, we’ll see if Janet agrees with me. My assumption is that we’re going to see across the board extensions for everyone for, say, two to three years. I think Democrats could adjust the threshold but it’s a complicated argument to explain. The Republicans would still say they’re raising taxes.

MS. HOOK: Yes. I think that the big question is why they didn’t work this out before the election because, to be honest, all of the options were on the table before the election.

MR. SANGER (?): They’ve been on the table for the past eight years. Yes.

MS. HOOK: True. True. True. But as they were getting up to the election they could see, well, there isn’t going to be a big compromise on this. So people before the election were even talking about some straightforward extension. But there’s a lot at stake –

MS. IFILL: But isn’t the president under pressure from the left about if he had given in before the election they would have said, ah, there he is, he’s caving again?

MS. HOOK: Exactly. And that’s already happening. I mean, after the election, Obama in his press conference and David Axelrod in an interview were signaling that they were willing to compromise along the lines that John was talking about and the left just went nuts saying, well, this is a capitulation. You have to at least fight to not extend the tax cuts.

MR. SANGER: Might be a capitulation, but there isn’t that much leverage that we’ve seen out here.

MS. HOOK: Right.

MR. WILLIAMS: What does it say for bipartisanship that the Republicans and the president can’t even agree on a time when they’re going to have this big come to Jesus meeting?

MS. HOOK: Yes. It does not bode well for bipartisanship, does it? You know, it was funny because right after the election Obama said, I want to have a big meeting with the bipartisan leadership at the White House. Come for a meeting. Have dinner. And he said, I want it on this day. And then – it was funny because when I called the Republican leadership after that was announced, they said, so you guys are on board for this? And they said, well, we’re checking the schedule.

MR. WILLIAMS: We’re booked.

MS. IFILL: Which is not usually what you say when the president calls and asks you to drop by.

MS. HOOK: Yes. You know, can I get back to you on that?

MR. WILLIAMS: I want to ask you about that. I mean, was it really that they had irreconcilable scheduling problems or was it just a little message to the president that, you know, we’re not easily led around like that?

MS. HOOK: I would say it sent a very clear message that they are in no rush to show up at any bargaining table.

MS. IFILL: John, I was interested in the Wall Street Journal/NBC News poll, one of the interesting things was that the pollster said that they felt Americans now had embraced resigned realism. And when you look at everything that happened in Washington this week, whether it was pettiness over meetings at the White House or even the conviction of – and censure of Charlie Rangel, this 40-year veteran of the House, you begin to think that maybe Congress has got a little resigned realism going on as well.

MR. HARWOOD: I think resignation is the appropriate attitude in this situation. Look, voters were pleased with what they did in the election. When you ask people, is it a good thing that we’ve now divided power between Republicans and Democrats in Washington? Sixty percent say, yes, it is. And then when you say, well, okay. So now are the two parties, as Pete suggested, going to work together, 75 percent say no. They’re going to fight and they’re not going to compromise.

And that’s a pretty accurate forecast I think because it’s very difficult in the nature of political competition and the ideological differences between these two parties for them to work together. They’re going to fight and we’ll see on issues like this tax standoff, the two sides will draw a line, we’ll see how hard the Democrats decide to fight the Republicans. And who wins in the end? If nothing is passed, everybody’s taxes go up, who’s going to take the hit for that? That’s going to be one of the big sources of political competition.

MS. IFILL: Are there deals in the works that you know about?

MS. HOOK: Well, there are deals in the works, but it seems like they’re bumping up against a deadline but for Congress. They’ve got weeks to go before they have to settle this thing. They’re just like college students who wait until the last night to finish their term papers. I mean, we’re talking about a December 31st deadline and we’re not in December yet.

MR. HARWOOD: Of course, they’re all cooking next week so they’re not going to be able to do any work.

MS. IFILL: December 31st. Happy New Year to everybody, right? Thank you both very much. As if all that weren’t enough to leave dangling as lawmakers adjourned for this holiday week, President Obama traveled to a NATO summit in Lisbon today empty handed, without the ratified nuclear reduction treaty he’d hoped the Senate would pass during its lame duck session. In spite of support from big foreign policy names like Baker and Albright and Nunn and Kissinger, the START treaty languishes. This was what the president had to say about it in Lisbon today.

PRES. OBAMA: We know that failure to ratify and move forward with new START will put at risk the substantial progress that has been made in advancing our nuclear security and our partnership with Russia on behalf of global security.

MS. IFILL: So, David, how important is this treaty really and if it is important, why hasn’t the Senate moved on it?

MR. SANGER: You know, its real import is what happens if you don’t get it. The treaty itself, if you look at it, is something of a nothing burger. I mean, there have been big arms control treaties before.

MS. IFILL: This ain’t it.

MR. SANGER: This ain’t one of them, not even close. This is relatively modest reductions based really on the agreement that President Bush struck with the Russians in 2002. It goes a little bit beyond that. It adds some verification features which the Bush-era treaty did not have. But if there’s a criticism of this treaty, it’s that it’s so unambitious. In fact, it was supposed to be the easy one before you got to all the hard treaties, big reductions by the Russians and by the United States, the Comprehensive Test Ban Treaty which President Clinton tried to get through the Senate and failed and it’s been sitting around for more than a decade, other treaties that would help advance President Obama’s vision of ultimately getting to zero nuclear weapons. So they got tripped up on the truly easy one.

MS. IFILL: So – exactly. So why did they get tripped up? What is Jon Kyl – let’s just put it out there – the senator from Arizona, who’s objected to this and slowed it down. What is his objection to it if it’s not that big a deal?

MR. SANGER: Well, his stated objection has been that he wanted to see a commitment from the Obama administration to go invest in the nuclear infrastructure, the nuclear laboratories, which have not been conducting tests and which have fallen into some disrepair. And this is a way of saying, even if we are cutting numbers, we need to increase the quality and reliability of the nuclear arsenal. And interestingly, this is an area where he was in agreement with President Obama. And so, in order to win agreement on this, President Obama agreed to $80 billion, in a time of significant austerity, to add to the investments in the nuclear laboratories over a number of years, and even threw in another $4 billion last week and they thought they had a deal with Kyl.

But he shocked them when he stood up and basically said this isn’t going to do it and he doesn’t want to bring it up in this Senate. Now, if it has to spill over, then the whole process starts all over again and there have to be new hearings and, of course, there will be many more Republican senators. They would need 14 Republicans to vote for it. Remember, this is a treaty. It needs 67 votes.

MR. WILLIAMS: Well, if $80 billion isn’t enough, what is enough for Jon Kyl and the Republicans?

MR. SANGER: He hasn’t said. And that’s part of the interesting element of this. He also hasn’t said that he has particular objections to the treaty itself. For a while, Republicans were saying that they thought that it would stop the United States from announcing ABM systems. But, in fact, when you read the treaty, wording doesn’t seem to be there that would really restrict it. And in fact, NATO today when the president was at Lisbon embraced the concept of an ABM system for Europe.

MR. HARWOOD: But from the Republicans’ point of view – let’s take them at their word they’re not just trying to deny President Obama a victory on the treaty. If in fact it’s an incremental step, does that suggest that the administration is hyping the negative consequences that would occur if we don’t take that step right now?

MR. SANGER: Well, they may be. And, you know, the thing is that you just don’t know until you see it. There have been two major negative consequences they have discussed. One of them is that relations with Russia, the Russian reset would be set back. And certainly there are reasons to wonder whether the Russians would react badly to this.

The second is that the thing we’ve needed the Russians on the most has been containing Iran and the Russians have been pretty helpful on that. They’ve refused to sell Iran a number of missile systems. They’ve been enforcing these new embargoes. And the big question is, would the whole containment system over Iran fall apart? So what you’ve heard the administration begin to do in recent days is say, you know, the Republicans, if they oppose this, are helping President Ahmadinejad move ahead with the Iranian nuclear program.

MS. HOOK: But I thought Republicans liked this kind of thing. I mean, isn’t it sort of unusual to have Republican opposition to a treaty of this sort? And Richard Lugar, the ranking Republican on the Foreign Relations Committee, really wants this to go through. Is there some kind of intra-party problem with this?

MR. SANGER: There sure is. And it’s the old establishment Republicans who have been invested in this kind of arms control that goes back to the Cold War versus a new breed of Republicans. Think of the people President Obama put in the White House the other day that support this: James Baker who, of course, had worked –

MS. IFILL: Old establishment guys.

MR. SANGER: Right. And Henry Kissinger. How many more old-line Republican names can you get than that? And the new members of the party didn’t really want to hear it.

MS. IFILL: Yes. Well, everyone’s got different pressures working. But there was also other mixed news on national security this week. Ahmed Ghailani, the former Guantanamo detainee charged with conspiring in the 1998 embassy attacks in east Africa was found guilty of but one of the 284 counts brought against him in the case. The controversy, that he was tried in civilian rather than military court, a key Obama administration strategy. The question, would that have changed the outcome? Pete.

MR. WILLIAMS: And that’s, I think, what the Justice Department itself was asking this week and certainly members of Congress. Here was the problem: the judge said – as this case was getting ready to go to trial – that the government could not call a key witness, a taxi driver from Tanzania, who would have testified that he sold Ghailani the explosives used in the bombing. The judge said the problem was the way Ghailani was interrogated when he was still overseas, questioned by the CIA. The judge called it extremely harsh interrogation. Ghailani’s lawyers called it torture. But the problem is the Fifth Amendment put Ghailani’s statements off – they couldn’t touch it, his self-incriminating statements. So anything that flowed from that, including the fact that it was Ghailani that told them about this guy, that meant the witness could not be used at the trial.

MS. IFILL: So how big a setback was this for the Justice Department?

MR. WILLIAMS: Well, you know, legally, they’ve got a conviction, but politically it has touched off this whole debate again and perhaps made it harder for the government to proceed here. Republicans – John Boehner, for example, has said that this shows the decision was bad from the start. Mitch McConnell was out there saying that this approach is deeply flawed, potentially harmful to national security. But as for whether it would have come out differently in a military commission, which is the question – would this have been admissible – the judge himself in the civilian trial addressed himself to that question. And he said, the military’s own rules might have blocked the same kind of testimony or the Constitution itself. So it’s not clear.

MR. HARWOOD: Two things: first of all, Ghailani still could get a life sentence in the case.

MR. WILLIAMS: Yes. Twenty years to life is the statute.

MR. HARWOOD: How much difference will that make in the political fallout if, in fact, he’s sentenced to life in prison because if the goal is to get the guy locked up, he was acquitted on many, many counts but –

(Cross talk.)

MR. WILLIAMS: Well, this is what the government will say. They’ll say if he gets a life sentence – which I must say seems likely given the magnitude of this crime, 12 Americans died, 224 people died in this attack – the government will say, look, he got a life sentence. What more could you get? The government didn’t ask for the death penalty here. But that’s legally. Politically I think the damage is done no matter what the sentence is.

MS. HOOK: And what do you think it means for the future for more – even higher profile cases coming up?

MR. WILLIAMS: Right. It certainly says that for those people who were interrogated overseas and brought here, it’s going to be harder to try them in civilian court if they blurted out the key evidence in the case, which is what happened here. But for people like – I think the Justice Department makes this argument with some justification – for people like Khalid Sheikh Mohammed, the 9/11 mastermind, Ramzi Binalshibh, the other top say three or four 9/11 defendants, the government insists that it has lots of independent evidence. Remember, Khalid Sheikh Mohammed was waterboarded. So anything he said, anything that flowed from what he said certainly will not be admitted. That passes every test. But the government says there’s lots of independent evidence on him. And there’s some reason to think that’s the case.

MR. SANGER: But think of where the Obama administration is on the Khalid Sheikh Mohammed case. And they started off wanting to try him in New York City right near Ground Zero. Then they had to back away from that when New York turned against it. Then they were going to look for another civilian location. Then we hear, well, maybe there won’t be a trial for a long time. You’ve got think this makes this vastly more complicated.

MR. WILLIAMS: It does. You know, step one, to get the Guantanamo Bay detainees to the U.S., there has to be some place to put them. And Congress hasn’t given the Justice Department the money to fix that prison in Illinois to house them. Congress doesn’t seem to want to do anything.

Now, it’s interesting that this week Boehner said, you know this trial just proves that we’re going to have to pass a law saying these folks have to be tried in military commissions. That would be a big change for Congress because from 9/11 on, Congress has really sat on the sidelines and let the courts fight this out with the president.

MS. IFILL: Pete, was this something that the Department of Justice intended to be a test case and it kind of blew up in their face or was this something they didn’t see coming?

MR. WILLIAMS: Well, I’d say yes to both. I think they did intend it to be a test case. Ghailani managed to get into the U.S. just before Congress sort of slammed the door on bringing further detainees. And the government thought they had a very strong case against him even without this witness. But obviously they were wrong about that.

MS. IFILL: Okay. Well, we’ll be watching all these other upcoming cases as well. Thank you, Pete. Thanks everybody else as well. We’re done here but the conversation continues, as always, online on our “Washington Week Webcast Extra.” Check us out at “Washington Week’s” website. You can also find us at Keep up with daily developments online and on the air on the PBS “NewsHour.” And we’ll see you again right here around the table next week on “Washington Week.” And, by the way, have a lovely Thanksgiving. Good night.