MS. IFILL: Three issues that could decide who becomes your next president: gas prices, the deficit, and war. We walk you through all of them, tonight on “Washington Week.” As always, more questions than answers. Can the U.S. dig itself out of its financial problems without getting into an even deeper hole? Will skyrocketing gas prices cost more votes than skyrocketing federal spending?
PRESIDENT BARACK OBAMA: Everybody right now is dealing with $4 a gallon at the pump. It hurts because you know every time you go to work, a big chunk of your paycheck is being eaten up.
MS. IFILL: Will an open ended war in Libya and with Gadhafi still in control –
SECRETARY OF STATE HILLARY CLINTON: Colonel Gadhafi’s troops continue their vicious attacks, including the siege of Misurata.
MS. IFILL: – and will Republicans come up with a nominee who can beat the incumbent? We explore these questions tonight with David Wessel of the “Wall Street Journal,” Coral Davenport of “National Journal,” Martha Raddatz of ABC News, and Dan Balz of the “Washington Post.”
ANNOUNCER: Award-winning reporting and analysis, covering history as it happens, from our nation’s capital this is “Washington Week” with Gwen Ifill, produced in association with “National Journal.”
ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.
MS. IFILL: Good evening. It’s a tough time to want to be president. Tonight we’ll show you some of the reasons why. First up, the sluggish economy and burdensome national deficit. There is some bipartisan noodling going on, but little agreement on the common problems, let alone the common solutions. Add to that this week’s ominous warning from the Standard & Poor’s rating agency. What should Americans be most worried or even most optimistic about, David?
MR. WESSEL: Well, there’s certainly lots to worry about, everything from high unemployment, the sinking U.S. dollar, to the fact that multinational firms over the last decade have done a lot of hiring abroad, but cut workers here. I think it’s worth remembering that the economy is growing again and I’ll bet President Obama would rather have American problems than the problems, let’s say, the Japanese or the Europeans have.
But I think this week was one in which Washington kind of got a wakeup call from Wall Street that, hey, we’re watching and we don’t like what we see. This Standard &Poor’s warning that the debt rating might be at risk if they don’t get their act together, flew a bit like that Outlook reminder you get, 15 minutes until the meeting. You’re not – you’re not late, but not yet. There was nothing new in it for people who’ve been following the deficit and it’s hard to believe that rating agencies have any credibility whatsoever, given the abysmal job they did during the financial crisis, but I think what they showed the Congress was that if you do nothing, if you just argue that the U.S. AAA credit rating could be at risk.
MS. IFILL: So does that mean that now the Biden Commission suddenly becomes critical and the gang of six bipartisan commission get to work?
MR. WESSEL: Probably not. I think the first thing it means is that they’ll get their act together and do something on the debt ceiling. The federal debt ceiling has to be raised because past spending and tax cut decisions have meant a lot of borrowing and even if Paul Ryan’s budget, the House Republican, passed in its entirety tomorrow, his budget calls for $7 trillion more federal debt over the next decade than we have now. So the question is will they attach something to it to make people feel comfortable in voting for it? And that something could be something that comes out of the Gang of Six, this bipartisan group in the Senate or this other group of six that Vice President Joe Biden is leading.
MS. RADDATZ: What do you think the Republicans do when they – when the campaign really starts in earnest? How will this change what Congress does and what they look at?
MR. WESSEL: Well, I think that – I think the campaign has started. And if you have any doubt, the tone of the president –
MS. RADDATZ: In earnest.
MR. WESSEL: – president’s speech sounded to me like a campaign speech. And when he went out this week, he sounded like it. I think the Republicans are going to have an interesting time when they get back to Washington after the break. They’ve been out there and a number of them have been beaten up by people who don’t like what the Medicare and Social Security discussions that they hear from Washington. And so I think what they want to do is they want to blame the president for the deficit not coming down, but they have to get some kind of coherent view about how they can be in favor of cutting spending, but not seeming to be hardhearted in cutting the spending that the voters care about. It’s tough.
MS. DAVENPORT: David, I wanted to ask, getting back to Joe Biden and the gang of six, what is Biden up to? What is – how is this going to –
MR. WESSEL: Well, if the president called you and asked you to do something and you were the vice president, you’d do it. I think what they’re looking for is some process by which there can be some negotiations between leaders of the Congress, particularly Republicans, and the White House so that if they attach some face saving thing to this debt ceiling bill, they can give people some sense that there’s some way to agree on something, so it has some credibility. So far it really hasn’t gotten off the ground and I don’t expect it’ll get off the ground soon. It’s just a meeting room where if they want to negotiate, they have a venue for doing it.
MR. BALZ: Look farther out into the future beyond this immediate question of how they get through the debt ceiling vote, and that is how do you get to a grand bargain to deal with the entitlements issues? What are Republicans going to have to give on? What are Democrats going to have to give on? And is there any likelihood, at this point, of that happening?
MR. WESSEL: I think the first thing that has happened, and this is positive, is that they’ve kind of agreed on the target. They’ve kind of agreed how much the deficit has to shrink. They’re talking about $4 trillion in cuts over a decade or so. So the argument is over how to get there. S&P made a very, I think, trenchant point about that you can only get there if both parties agree and that the compromise is going to be obvious. There’s no way the Democrats come to this without raising taxes on someone. And there’s no way the Republicans come to this unless the Democrats sign on to some pretty significant changes and cuts to Medicare and maybe even Social Security.
MS. IFILL: From what you’ve been able to see, is it possible – I know this is a stunning thought – that the public is ahead of the politicians on exactly what’s going to be necessary in order to solve these problems? Or is the public opinion saying, just don’t cut anything, but fix the problem?
MR. WESSEL: I think the public was ahead of the politicians in identifying spending and deficits as a big concern. So in a sense the public was very farsighted in seeing like over the next decade or two we’ve got to fix this problem, and the politicians are ready to catch up. When it comes to getting beyond the contradictory impulses, like I’m in favor of reducing the deficit as long as it doesn’t involve cutting spending or raising taxes, I don’t think they’re there yet. But I think we’re having the conversation. We’re in the post-deficit denial phase.
MS. IFILL: And are there other drags on the economy besides these mixed feelings about the deficit there? Housing, which is always going to stay as a drag, right?
MR. WESSEL: Right. So I think what happens is when you – the polls – the CBS-“New York Times” poll just this week showed that people, if you ask them about they’re worried about the deficit, they say yes. But they asked them about what are you most worried about and it was 39 percent said jobs or the economy and 15 percent said the deficit. And that’s everything from oil prices to housing prices to haven’t had a raise in a couple of years if I’m lucky enough to have a job.
MS. IFILL: Well, let’s talk about oil prices, for instance. Thank you for that segue because next up is something which is actually much more easily understood by the average citizen and by both political parties, which is spiking gas prices. Our partners at “National Journal” weigh in this week with the poll of political insiders: 94 Democrats, 102 Republicans, and they ask which party is hurt more by rising gas prices? On this, both parties seemed to agree, with 75 percent of Democrats saying their party will take the hit and 94 percent of Republicans saying the same thing.
The president said at a fundraiser in Los Angeles, last night, that if you follow the bouncing ball of his poll numbers, you’ll find gas prices at the bottom of it all. So how is that shaping the political debate, Coral?
MS. DAVENPORT: Gwen, it has a huge impact on the political debate. Pew actually just did a poll that found the number one financial concern of most Americans was gas prices and that gas prices were more important to Americans than reducing the deficit. It’s such a visceral, concrete issue. It’s an everyday issue. Americans, even if they don’t understand sort of the broad economic indicators, they drive down the street; they see those gas price numbers.
And some Republicans have jumped on that. Republicans are the party clearly linked with drilling, with production, and Republicans have always – this is an issue that has always played so well for Republicans in the political debate. We saw that so clearly in 2008, with “drill, baby, drill.” So they have jumped on it. They’re starting hearings. There is clearly a strategy of injecting the gas price issue right back into the campaign –
MS. IFILL: And at the same time, we see the president saying he’s going to have his attorney general look into that price gouging issue, which I feel like I’ve heard a lot of this before.
MS. DAVENPORT: – you know, my colleagues and I who cover the energy issue, a couple of months ago – a couple of weeks ago started saying we should just start calling up all the stories we wrote in 2008, because the talking points are the same, the proposed solutions are the same, but what the president knows full well and what Republicans who understand policy know full well is this is not an issue that the president can solve. This is not an issue that the Congress can solve. There is not a policy that can be enacted that can make gas prices go down in the next couple of months. And that’s one of the hardest things about this. There are policies that you can act. It’s pretty clear what you have to do to reduce the deficit. It’s just a matter of how do you get there. Gas prices – that magic policy doesn’t exist.
MR. WESSEL: But sometimes gas prices can push Congress to do things. So if they were going to do something on energy as a result of all this new angst, what do you think it would be?
MS. DAVENPORT: Well, you know, “National Journal” did another insiders’ poll this week and we asked our energy specific insiders: will rising gas prices push Congress to enact legislation? And the majority of them said no. What will happen is we’re already seeing a slew of bills being introduced. The House Natural Resources – or the House floor is taking up three new bills to increase offshore drilling next month, as soon as Congress gets back from recess, so we will see lots of bills, lots of talking points, all of those talking points projected straight into the campaigns. But with partisanship so high, it’s clear we’ll see a lot of pushes for legislation, but it’s also pretty clear that it will go as far as the campaign, but it’s very unlikely to see any actual legislation.
MS. RADDATZ: So what happens? So the public just sits and watches the gas prices rise and rise and politicians get more panicked and more panicked? I mean how do you see an end-state here?
MS. DAVENPORT: You know, it’s interesting. We’ve seen this debate come back again and again and again. A couple of things that might be different this time: we are – it’s almost certain that we will see gas prices get back to a national average of $4 a gallon. We’re at $3.54 today. And that’s kind of the magic number. That’s kind of the thing that really – $4 a gallon – but what –
MS. IFILL: It’s terrifying.
MS. DAVENPORT: – yes and –
MS. IFILL: Some of us have already paid $4 a gallon.
MS. DAVENPORT: – yes, here in D.C., we’ve been there for a little while. What energy economists are saying is that it’s possible we could get close to $5 a gallon this year. That would be – the record high is just a little bit over $4. If we hit a new record high this year, I think that it could have a very big impact on the political debate. It could be a huge issue for the campaign. It could elevate the issue of energy –
MR. WESSEL: Does anybody link it to Libya?
MS. DAVENPORT: Oh, absolutely, absolutely. This is one of the reasons why it’s not – the president really can’t – any one government can’t really do anything to change this. The high gas prices are linked to market uncertainty due to Libya –
MR. WESSEL: It’s your fault. (Laughter.)
MS. DAVENPORT: It’s true. There’s just – it’s a global market and there’re so many things sort of in supply, in demand, in market uncertainty, in speculation that affect these prices. So there’s just – there’s no one thing that one government can do. So there’s –
MS. RADDATZ: And psychological.
MR. BALZ: But if the Republicans are trying to seize on this as an issue politically, put aside whether there’s any practical solution, what does the president do to counter that politically?
MS. DAVENPORT: So this is such a tough issue for Democrats. Here’s what the president’s trying to do. The Republicans have a nice, clean, easy message: drill. What the president is trying to do is claim some of that drilling message for himself. We’ve seen over the past couple of weeks the –
MS. IFILL: Moratorium is lifted.
MS. DAVENPORT: – the moratorium is lifted and they’ve been issuing new permits to drill in the Gulf. And every single one of those new permits has been – or the first 10 were accompanied by huge press releases, press conferences, big announcements. This is not usual. You don’t usually tout – this should be just sort of a standard thing, new drilling permit. So the president is trying to show, look, I support drilling. This administration is pro-drilling.
MS. IFILL: And you get the feeling that this is just the beginning of the argument they were going to have about this as long as the prices keep going up.
Well, we touched on challenge number three there, which is that nothing is getting better in Libya. Defense Secretary Robert Gates announced yesterday that U.S. unmanned drones will now be allowed to fire on Gadhafi’s forces, but the deadly standoff in Misurata continues. Two photojournalists, including Oscar nominee Tim Hetherington, were killed this week covering the frontlines. So where does this lead our U.S. foreign policy in the region, Martha, or as some people like to think, non-policy?
MS. RADDATZ: And I think a lot of people are saying non-policy. I mean, the policy is basically we’ll help the civilian population. We’ll help the opposition. But the U.S. role on – in early April, the U.S. basically turned over control to NATO. And a lot of those air strikes have not been as effective. The rebels are in desperate shape and you’ve got John McCain who’s going in there now and saying, you rebels are my heroes. Let’s see what we can do. You got $25 million of aid that the U.S. is now promising –
MS. IFILL: Non-lethal aid.
MS. RADDATZ: – non-lethal aid, but we’re talking about body armor. We’re talking about transportation trucks. We’re talking about equipment. We’re talking about that kind of incremental additions to the fight in Libya.
MR. WESSEL: Doesn’t this just add up to mission creep in the classic sense? Next thing – what’s next?
MS. RADDATZ: Yes, what’s next is exactly right because I think about three weeks ago, none of us would say that they will be supplying body armor. One of the big questions still remains. Who are the rebels? And I think there’s still a great deal of nervousness within the administration about who exactly they’re sending that body armor to, who exactly is going to be trained by France and Britain. They’re sending in military advisors now to help the rebels organize, to try to figure out some way to defeat the Gadhafi forces. And at this point they don’t seem to have a prayer of doing that.
MS. IFILL: John McCain, when he got to Libya, said not only that the rebels were his heroes, but that there should be increased arming of the rebels, something which the U.S. is top short of.
MS. RADDATZ: And – I mean, you can talk about giving body armor is certainly a passive way of arming the rebels. It goes back to David’s question.
MS. IFILL: It’s not a gun.
MS. RADDATZ: It’s not a gun, but it helps protect you from the other guns. And they have said again and again they’re not sending boots on the ground. They’re not going to – President Obama has been very firm about that. Let’s talk about those drones for a minute. They are pretty precise, pretty deadly. And you look at those drones and they can do some pretty specific things.
MR. BALZ: Well, what can they do and what was behind that decision? What can they do that the NATO airstrikes are unable to do?
MS. RADDATZ: I’ll tell you what they can do. Because there are no pilots –
MS. IFILL: As we just point out, Tim Hetherington was on Twitter; his last tweet from Misurata was “no sign of NATO.”
MS. RADDATZ: – no sign of NATO and that the Gadhafi forces are truly attacking the rebel forces in Misurata and terrible, and of course Tim and Chris Hondros as well, were both killed.
Let me talk about the drones a little bit what they can do to helping that fight. One of the problems is they’ve still got surface-to-air sites, surface-to-air missiles around there that move around, mobile surface-to-air sites. So those move around. They can take out airplanes. These drones do exactly what the name Predator implies. They can fly low. They stock their target. They can loiter over an area really literally all day or all night and then they can blow that target up. And they can spot people. They can spot snipers. They can do things that airplanes can’t do.
MS. DAVENPORT: Is one of those targets like going to be Gadhafi?
MS. RADDATZ: Well, the U.S. will say we’re not – our mission is not to go after Gadhafi. But if I were Moammar Gadhafi, I’d be a little nervous. These are the same kind of Predators that we’ve used in Afghanistan, in Pakistan, in Yemen, and what they’re used for there is to go after high value targets: al Qaeda, the Taliban. So I think it’s a really legitimate question, what’s up here, and at the very least he’s nervous.
MS. IFILL: Well, you can’t help but wonder if John McCain is saying what the administration can’t but would like to say, which is go after Gadhafi.
MS. RADDATZ: Yes, I think in some ways McCain – it’s kind of a wink-wink. Yes, you know, we can’t say that. We’re not going to fight what John McCain is saying. And John McCain is not really going to go over there and stir up too much trouble for the administration, but he is sending that message that we want Gadhafi out of there. The U.S. wants Gadhafi out of there. They want to make him nervous and these drones have got to make him a little more nervous.
MR. WESSEL: So all this talk about we’re not for a regime change, that’s just a lie? That’s basically –
MS. RADDATZ: Oh, no, no. I think that’s not a lie. I think they would very much like him out of there. They’ve said that specifically. They’re not going to go in there and say “we’re going to kill him and kick him out of –
MS. IFILL: – there’s internal upheaval.
MS. RADDATZ: – internal upheaval, they say again and again. And Robert Gates said that again yesterday and Secretary Clinton says it’s up to the Libyan people to get rid of him, but boy, we’d sure like to see him go.
MS. IFILL: Okay, so we move on because as the current president is working his way through all these challenges, the Republicans who would oust him are preparing to exploit his weaknesses. But they have weaknesses of their own. A “Washington Post”-ABC News poll out this week finds that less than half of Republicans and Republican leaning independents are satisfied with the GOP field. And a “New York Times”-CBS News poll out today shows the president’s approval rating sliding on everything from Libya to the economy. So let the political positioning begin, right, Dan?
MR. BALZ: It’s clearly beginning and I think if you look at sort of the totality of the polls this week, you can see that everybody – President Obama, all the Republican rivals – have got work to do in order to get in shape for 2012. Start with the broad view of these polls. We’ve been talking about it all session here. A lot of economic pessimism that we are seeing in the polls, it’s clearly tied to gas prices and I think the unrest in the Middle East. Our poll showed that two-year high in the number of people who say the economy’s getting worse. The “New York Times” has found similar. They’ve got a two-year high point on people saying the country’s going in the wrong direction. These are numbers we haven’t seen since the depth of the recession right at the beginning of the Obama administration.
So people are uneasy about where things are going. That has had a clear effect on President Obama’s approval ratings. He is down in almost everybody’s polls compared to where he was. In the “Post”-ABC poll, he was at 47 percent. That’s down 7 points since his high point in January. Fifty seven percent disapprove of the way he’s handling the economy in our poll. In the “New York Times”-CBS poll just out, he’s down 10 points on his approval of how he’s been handling Libya.
MS. IFILL: How does that compare to other presidents at this point in the presidency, economy aside?
MR. BALZ: Well, he is – the two that they watched closely at the White House are Ronald Reagan and Bill Clinton. Both of them were in the 40s at this point. I think that the issue for the president – if you’re over 50 percent in approval as you near the election, you’re going to be very tough to beat. History just says if a president’s over that mark, they’re in good shape. If you’re below 42, below that you’re in real trouble. He’s in that kind of netherworld, vulnerable, not in the clear danger zone, but certainly not in a comfort zone.
MS. RADDATZ: Dan, how about that Republican field? Who’s leading the Republican field, I can tell you who we’ve seen the most of lately, Donald Trump, but is he leading?
MS. IFILL: So somebody’s got to actually beat the president, is that what you say?
MR. BALZ: Somebody will have to beat him. Donald Trump has gotten an enormous amount of attention, most of it self-generated. He has made himself available for –
MS. IFILL: With some aid and comfort by people who do what we do for a living. (Laughter.)
MR. BALZ: No, no, no, I mean he’s made himself available and all of us have climbed onboard to do interviews. And in some polls now he is at or near the top of the pack. It’s quite remarkable. He is a celebrity and celebrity, we know, in politics today is important. The three people who now are at the top rank are former Arkansas Governor Mike Huckabee, former Massachusetts Governor Mitt Romney, who a lot of Republicans still think is the nominal, the weak frontrunner, and now Donald Trump. And everybody else is kind of trailing in their wake.
MS. IFILL: Including people like Sarah Palin, who used to get a lot of attention.
MR. BALZ: Well, and in fact, Sarah Palin I think has faded some. She’s not been helped by either the emergence of Donald Trump, who has great celebrity or Congresswoman Michele Bachmann, who has a kind of similar appeal to the Tea Party Republicans.
MR. WESSEL: And who do you think the White House most fears as a Republican opponent?
MR. BALZ: Well, I think they believe in the end they’re most likely to run against Romney, but they are as confused as everybody else. If you talk to them, they want to know what everybody else thinks because they’re trying to puzzle it out, too.
They see others as potential – I think they see Mitch Daniels, the governor of Indiana, who is not at all clear is going to get in the race, as somebody who would be a serious opponent if he were able to make it to the general election and somebody who was carrying the message of take on debt and deficit. They have a lot of respect for Haley Barbour’s political skills. They’re not sure whether he’s capable of really doing it as a candidate. So there is as much confusion on the Democratic side as to who the nominee is going to be as there is on the Republican side.
MS. DAVENPORT: The president is raising a lot of money. He’s kicked off his campaign. He’s at this point much more active than any of the Republicans. Why is that on both sides?
MR. BALZ: Well, the interesting thing when you talk to Democrats and some of the people around the president, they are a little bit baffled as to why the Republican field is moving this slowly because their view is this is a big enterprise that we’re taking on. They raised north of $700 million last time. They’re going to raise more than that this time. It takes a long time to raise that money. But just as important for the Obama team, they still have this kind of grassroots mentality. And they know that their organization needs energy, enthusiasm. It needs to be rebuilt. They do that in a very particular way: one-on-one, a lot of work at the grassroots. They know that that also takes time and they’re trying to make sure that they’ve got organizations in as many states as possible well in advance of the general election. So they’re out doing the nuts and bolts at this point, when the Republicans are not.
MS. IFILL: Okay. Well, thank you, Dan. Thank you everybody else. Before we go, I would like to actually congratulate our Dan Balz for winning this year’s White House Correspondents Association Merriman Smith Award for excellence in presidential coverage on deadline. Thank you, Dan, congratulations.
MR. BALZ: Thank you, Gwen.
MS. IFILL: The conversation has to end here for now, but it continues online in our “Washington Week Webcast Extra.” Check it out at PBS.org. Keep track of daily developments on air and online with the PBS “NewsHour,” and we’ll see you again next week on “Washington Week.” Good night.