MS. IFILL: More bad economic news spells bad political news for the president and possibly for the people who would replace him. We explain how it all works, tonight on “Washington Week.”
PRESIDENT BARACK OBAMA: Our great ongoing challenge as a nation remains how to get this economy growing faster.
MS. IFILL: The question, of course, is how to move things along a little more quickly.
FMR. GOV. JON HUNTSMAN (R-UT): Rather than tinker around the edges of what is a broken system, I'm going to drop a plan on the front steps of the Capitol that says: we need to clean house.
FMR. GOV. MITT ROMNEY (R-MA): Career politicians got us into this mess and they simply don’t know how to get us out.
MS. IFILL: But as the White House and Congress faced off over when the president should speak –
JAY CARNEY [White House Spokesman]: Thursday today, Thursday today, we want to give the speech – the president wants to talk to the American people.
MS. IFILL: – the race for solutions has quickly turned into a race for the political upper hand, even when it comes to paying for disaster recovery.
GOV. ANDREW CUOMO (D-NY): We believe at the end of the day the total damage will be close to $1 billion.
REP. ERIC CANTOR (R-VA): Those monies will be offset with appropriate savings or cost cuttings elsewhere in order to meet the priority that – of the federal government’s role in a situation like this.
MS. IFILL: And the beat goes on. Covering the week: Eamon Javers of CNBC, Naftali Bendavid of the Wall Street Journal, Charles Babington of the Associated Press, and Jeanne Cummings of Bloomberg 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.”
ANNOUNCER: Once again, moderator Gwen Ifill.
MS. IFILL: Good evening. More bad news on the jobs front today sent the stock market into a tizzy and guaranteed that the president will spend his Labor Day weekend working. No job growth, a flat unemployment rate, and a sharp increase in unemployment among African-Americans, at 16.7 percent, now the highest since 1984. Unimpressive new numbers as the president prepares to present his jobs plan to a joint session of Congress next week. Republican candidate Mitt Romney weighed in today while campaigning in Florida.
GOV. ROMNEY: I watch Washington right now and it breaks my heart because the people there don’t understand how America works. Obama is not working and he has disappointed the American people. And this morning, very bad news – did you see the numbers that came out on job growth? Look, there is zero faith on Barack Obama because he’s created zero jobs last month.
MS. IFILL: This economic undertow is affecting everything this week, igniting new recession worries, and raising, as you just saw, political questions for Republicans and Democrats alike. What are we to read into these numbers, Eamon, what?
MR. JAVERS: Well, look, it was a total wipe out. I mean economists have expected maybe 60,000-70,000 jobs created and this morning we saw zero new jobs created in the month of August. That’s an astonishingly bad number. We saw the stock market respond. We saw the political system respond to that, as you just saw. And this was the first time since February of 1945 that we’d actually gotten goose egg for the job numbers. It’s been negative, of course, but that is a really bad sign and symbolically it’s very bad. The RNC put out a statement, calling President Obama President Zero shortly after that number came out. So it’s really an awful (climate ?) on the economy now.
MS. IFILL: And perhaps the administration saw this coming because yesterday we saw that OMB, the Office of Management and Budget say it’s going to be 9 percent. Right now, we’re at 9.1 percent employment. It’s going to be that way all next year through the election.
MR. JAVERS: Yes, it’s not really turning around, and that’s the problem for the Obama administration. Typically, in the past, when we’ve had these monthly jobs report numbers come out, the president has gone out to a manufacturing plant or someplace where he can stand in front of some piece of equipment and give a sort of reassuring speech saying, it wasn’t good enough, but we’re doing everything we can. We didn’t see that from the president today. About 12:30, he left for Camp David for a long weekend. And he didn’t talk to reporters at all about this number. That was a little bit of a surprise.
MS. IFILL: In fact, he walked across the lawn to the helicopter holding his daughter Sasha’s hand, as if she were his last friend in the world. How does this expect – how does this affect his plans for his big speech next Thursday night, Chuck?
MR. BABINGTON: Well, Gwen, this speech, as you said, was going to be about jobs all along. The problem is that there’s only so much any president can do and particularly this president because he’s tried so many things. The stimulus package, which a lot of economist said helped, but it proved to be very unpopular with the public. And now, there’s so much emphasis on cutting spending, and that has a kind of an anti-stimulus effect if anything. So the president really is probably – he’ll repeat some of the rather small-bore thing he talked about like patent reform and trade deals that might produce some jobs. But the thinking is he can’t make a sweeping, dramatic proposal jobs – for jobs that would be very plausible.
MS. IFILL: And he didn’t get to do it on the night that he originally chose. He sent this letter to the Hill, saying, I’ll see you Wednesday night at 8:00. And John Boehner said, no, not so much.
MR. BABINGTON: Yes, that so happened, Gwen, that that was the very night that we’re going to have a Republican debate, the first one involving Rick Perry. And even though John Boehner, Speaker Boehner’s response to him didn’t mention the debate, he said Wednesday night really would not be convenient. How about Thursday night? The president did give in. The whole thing looked kind of muddled and messy. In the big scheme of things, it’s not a big deal, but it wasn’t a pretty picture.
MR. BENDAVID: So Chuck, what are the Republicans saying about jobs? They do have this debate on Wednesday night and obviously the president is the president, but the Republicans want to be presidents, so what kind of solutions do they have to all of this?
MR. BABINGTON: Yes, well, you know, Naftali, when you’re a challenger, you never have to be terribly specific. And so you see a lot of what we just saw with Mitt Romney there just saying, the president has failed, the president has failed. Now, Romney is going to give a speech Tuesday, where he’s supposed to lay out some jobs proposals. But basically what the Republicans have said over and over again, we need to cut regulations, cut taxes, or hold taxes down, and set a more robust environment for job creation. The truth is that, you know, taxes have been fairly low, and regulations haven’t changed a lot and that hasn’t produced jobs either. But they are not held responsible for it the way the president is.
MS. CUMMINGS: Eamon, even if the president were to succeed to pass, as Chuck mentioned, patent reform and trade deals, the business community wants these things. They’re hungry for them, but they are not going to be instant job creators. Is there – what kind of short-term thing does he have left that could make a difference between now and next summer?
MR. JAVERS: All of those measures are pretty small, be it relative to the size of the U.S. economy. What he’s trying to do is at least show that they can do something, right? Because all we’ve got going on right now is an economic stall at the same time that we have a political stall on the part of the president. The economy is at that point now – we were saying earlier – where, when you’re driving up a hill in the snow and you start to realize, hey, wait a second, I’m not going forward anymore, I’m starting to slip to the side. That’s where the economy is. And it’s a little bit where the president is politically as well. We’re starting to see his polls really taking a nosedive now, and we’re also starting to see some speculation that whatever he says next week in terms of proposals doesn’t really stand much of a chance of getting through Congress anyway. So there’s a question of whether he can actually do anything at all at this point. And that’s got to – that’s got to be what has the White House most scared at this point.
MS. IFILL: Well, and Chuck, the president seemed to be stuck – as he always seems to be in some sort of rock and hard place because a lot of Democrats aren’t very happy with him this week. And today, the latest example was he decided to hold off on these clean air regulations, which environmentalists really wanted, and in doing so made the oil companies and the Chamber of Commerce very happy.
MR. BABINGTON: That’s right, Gwen. Every president sort of has to do a balancing act between his base and the independent voters that are crucial in a general election. And so for Obama, of course, his base is a liberal base. They have been very unhappy about, you know, going all the way back to concessions made with health care and a number of things. And this ozone decision today just really fired up in a very unhappy way the environmental community.
One thing sort of along these lines that we might look for in this Thursday speech before the joint session of Congress is a somewhat different tone from the president. I’m hearing that he may draw a little sharper line regarding the problems of Republicans digging in in a partisan way. And what he might try to do is say, you know, I’m calling for bipartisanship. That’s what I want. That’s what I need. But if you don’t provide it, we’ll take our case to the American people.
MR. JAVERS: You know, that ozone decision was really more important than just the merits of the particular case because what the president did there was he conceded the point to Republicans that regulations inhibit economic growth. In their statement about that rule and pulling back the EPA, they said the economy is simply too fragile for us to do right now. That’s a Republican point -- that overregulation is hurting the economy, that the Obama administration, by extension, is hurting the economy by imposing all sorts of new regulations on it. Obama basically played into the Republican argument on that. That’s one of the things, in addition to the environmental issue itself, but conceding the case is what’s got the base so frustrated.
MR. BENDAVID: So what turns this around? I mean, what is there on the horizon that could possibly turn this terrible job situation around and make it look a little better?
MS. IFILL: And in time to please people like the Congressional Black Caucus, which is not very happy about these jobs numbers and don’t see a way out and became increasingly vocal about it.
MR. JAVERS: That’s what’s the problem right. Is that there’s nothing really on the horizon that’s going to turn this situation around. I mean, people expected that this would – had been turned around long ago. Economists were saying, we should start to see growth. We should start to see growth. We’re not seeing it. Part of the reason why is that U.S. corporations are extremely profitable right now by and large. And a lot of them have an enormous amount of cash on hand. I mean Apple, for example, has more than $70 billion worth of cash sitting on the sidelines. Companies are very afraid of the economic outlook going forward. And so they’re not doing anything with that money.
If they were to put that money into the economy, start buying companies, building plants, doing something with it, that would help, but you got to get past that fear factor and that’s what’s holding everything back.
MS. CUMMINGS: Well, and we’ve discussed here, Chuck, that the president probably can’t get much through Congress. And that’s really bad for the president. But do Republicans get a cake walk? I mean, they’ve got elections, too, next year. What is their political – are there political ramifications for them as well?
MR. BABINGTON: Well, they do – of course, Jeanne, the Republicans in Congress, all in the House and quite a few in the Senate do have to run for reelection. Generally speaking in big economic issues such as jobs, the public. They see the president more than anyone else as the government. But I do think all this portends a quite likely very negative, possibly very bruising presidential campaign because when you’re a president, you’ve got a bad economic record, and there’s not a whole lot you can do, as we’ve been discussing here, the only thing you can do is make the alternative worse. And for some time you’ve been hearing Obama’s people say this will not be a referendum. It’ll be a choice. Of course, it will be a referendum, but really that’s a code – I think that’s code for you think things are bad with us? The other guy would be even worse.
MS. IFILL: Does it matter anymore whether the president inherited this mess or is – does he now fully own it?
MR. JAVERS: No because I think going into election next year, you’re going to hear the famous question: are you better off now than you were four years ago? And four years ago – the implication is during the president’s time in office. And I think he’s got to answer that. He owns the economy politically.
MR. BABINGTON: I don’t think they can frame the question exactly that way, which of course, is a way that Ronald Reagan famously phrased it because right at the time of the 2008 election, things were very, very bad. Polls do show that to some degree people still pin some of this problem on George W. Bush.
MS. CUMMINGS: A majority of them.
MR. BABINGTON: Yes. Which is kind of surprising. Now, the election’s 16 months away. What that number will be at the end, I don’t know, but that is a ray of hope for Obama.
MS. IFILL: Well, he’s probably happy for any ray of hope at this stage. Thank you all. It’s one thing to talk about economic and political theory, but this is where the rubber hits the road: disaster spending. The question: is it really possible for the federal government to help states hit by hurricanes, tornadoes, and earthquakes without cutting something somewhere else? We got the first test of that argument this week didn’t we, Naftali?
MR. BENDAVID: Well, we did, because Eric Cantor, the House majority leader, suggested that if we’re going to give aid for victims of Hurricane Irene, which, he said we absolutely should, that that money should be offset by cuts elsewhere if possible. And that immediately was jumped on by Democrats who were saying, look, that’s not compassionate. These are fellow Americans suffering. And we have to not get back into the political debate over spending. We’ve just got to help these folks.
MS. IFILL: And wasn’t it also jumped on by some Republicans as well, who happen to be governors of the states?
MR. BENDAVID: That’s right. I mean, particularly Chris Christie in New Jersey and Bob McDonnell in Virginia, Eric Cantor’s home state, they didn’t really jumped on him, but they took a different view. And in fairness to Mr. Cantor, they don’t have to worry about federal spending because they’re state governors. And they just said, we need the money. Let’s not worry about offsetting it. We need help now. But it’s an interesting and emotional issue because I think the public is very affected by images of their fellow Americans suffering. And so to have that come up against this concern about spending makes for a very interesting and unusual tension.
MR. JAVERS: How did Cantor respond to the criticism? There was this immediate firestorm when he said – what was his statement, you know, 24 hours, 48 hours later?
MR. BENDAVID: Well, I mean his folks certainly would not say that he backed off it, but it’s true that he didn’t repeat it. And his office put out some things that to me at least seemed intended to kind of soften it. They made it clear that they think victims should get help and that, hey, the president hasn’t actually asked for anything, so why are we even talking about this. I think it’s something where Republicans see a bit of peril because disaster relief is one of those areas where even a bunch of hawks think we need to be spending money. It’s a role for the federal government. And so you don’t necessarily want to get into a fight about exactly how disaster relief spending is offset.
MS. CUMMINGS: And well, where are we now? I mean, clearly Irene is going to cost the government quite a bit of money. There’re a lot of people who have suffered tremendous loss with their homes and their cars, not to mention people’s lives. But where we – where is the money? Now, do they have the money?
MR. BENDAVID: Well, that is interesting. In some ways, this whole thing’s taking place in the realm of hypothetical because, again, there’s no overall estimate of the cost. The administration hasn’t asked Congress for more money. But the reason this came up is that the Federal Emergency Management Agency, FEMA -- its disaster relief fund is down to about $700 million, which is on the low end.
MS. CUMMINGS: Yes.
MR. BENDAVID: And in fact, they’ve decided that they’re not going to consider some long-term projects because they want to save the resources for people who need it now. And so the question is when will that fund really run low or start running out? When will the administration ask for money? That hasn’t happened yet. And so to some degree, this won’t come to a head until that happens.
MS. IFILL: We remember how poorly FEMA was seen in 2005, after Katrina. Have they managed to walk this tightrope, especially in this political back and forth?
MR. BENDAVID: I think they have. I mean you’re hearing even, you know, Chris Christie, governor of New Jersey rising Republican star, his state was hit pretty badly, and he’s had nothing but praise for FEMA. And you haven’t really heard criticism of the agency itself in direct contrast to what we saw after Katrina. And they’ve basically handled this whole flap by staying out of it, as you would expect them to do. They’re not saying anything about offsets. They’re not saying anything about spending. They’re just kind of reassuring people that they’re going to get the aid that they need and that they’ll ask for help if they need it. So they have walked a very careful tightrope. I think they really do want to avoid being the same sort of punching bag that they were a few years back.
MS. IFILL: Who can blame them?
MR. BABINGTON: I wonder, does this foreshadow debates we’re going to see further down the road when we start talking about deficit reduction? A lot of people like the idea of cutting government in the abstract, but oh, you’re going to cut FEMA right after a hurricane? That didn’t seem like such a great idea. So when this super committee sits down to look – they’re going to run into this kind of thing over and over.
MR. BENDAVID: Yes, I think they are. I mean, everybody took great note of this deal that we reached in early August, but that didn’t end the fight. In fact, a lot of the things in the deal – there were triggers and there were limits and there were caps, but some of the nitty-gritty tough decisions have yet to be made. And there’s going to be a lot of decisions, like this one on FEMA that people are going to be hurt, you know. The cuts are going to mean something to people. And so I think what this shows is we’re going to see this sort of battle play out over and over again in the next few months.
MS. IFILL: And there’s no agreement on what is immune. War spending has been considered immune to this kind of balanced budgeting, the zero, pay-as-you-go kind of concept. And so has disaster spending.
MR. BENDAVID: Exactly. I mean, those are sort of the two big areas, where really they’ve been considered kind of beyond this sort of budgetary discussion. But I don’t think that’s true anymore. I mean, even Republicans are putting defense spending on the table. You know, now, of course, some Republicans are talking about offsetting disaster relief. I think it’s a new ball game and these battles are going to be bloody and they’re going to be difficult, and this is just the first of many.
MS. IFILL: It’s a real reality check and we have another one for you. It’s one thing for challengers to declare that it’s time for the incumbent to go. It’s another thing for them to raise the money to make it happen. Mitt Romney, Rick Perry, Jon Huntsman, and Michele Bachmann are all raising the money, but are they going to use it to turn their fire on the president or on each other, Jeanne?
MS. CUMMINGS: Well, it looks to me like this fight’s going to get a lot more interesting. The primary among the Republicans, the entry of Rick Perry, governor of Texas, a hardball player, sharp elbows, sharp tongue, noted for being an expert at defining his opponent before his opponent can define himself.
MS. IFILL: He’s never lost an election.
MS. CUMMINGS: Never lost an election. He’s been in office for almost two decades. So he gets in the race and everybody started to put up their defenses. And Michele Bachmann was among the first. She was overcome in the polls, stomped on her – her rise after that straw poll victory. She was the first to deep into what is called a super-PAC, which is technically not hers, technically she never coordinates with these people, but they went out and launched the first attack out of the primary against Perry. They’ve unleashed – they have released it this week. It will run next week, in the beginning of the week, in South Carolina. And that where these super-PACs, the new, brand new toy of the presidential campaign will be playing this year. And the super-PAC, of course, is a political action committee, just like any other, but because of a loophole in federal election law, that went on steroids after the Supreme Court decision, takes unlimited amounts of money from anyone. And so they can rev up one of these things with four friends with million dollar checks or less.
MS. IFILL: We love our loopholes.
MR. BABINGTON: Jeanne, talk about the role that these super-PACs play and that possible they could actually be just so out of control of the candidate that they could be a problem or is that very unlikely?
MS. CUMMINGS: In a presidential campaign, that’s difficult. However, we saw in 2010, in midterm, when we saw the trial run of this type of committee that we did have House races, in particular, where you had an incumbent Democrat basically running against these committees. The actual Republican candidates they were running against in at least two cases were broke. They had no money. But the Democrat was forced to spend millions on advertising because these groups came in and spent millions against him or her.
The Senate not so much. The senators were able to fight back. So I think in a presidential campaign, they’re not going to be able to rise to that level. Presidential candidates should be able to take care of themselves. But what’s happened is everybody’s in the game now. The Democrats were late last year, in 2010, not so now. So we have six candidates who have super-committees – super-PACs and between them all, there’re about 12 super-PACs. So there’re – some of them are consolidating. Rick Perry came into the race with six of them. They’re all now consolidating under one. Michele Bachmann has two, right now. Obama has two, right now, but they’re coordinated.
MS. IFILL: We should say Obama partisans and Bachmann partisans and Perry partisans because they’re the candidates themselves, yes.
MS. CUMMINGS: That’s right. These are friends of these particular candidates. Even Ron Paul’s friends have started – (laughter) – one with a name that I actually think is wonderful. It’s the Revolution PAC. And that’s perfect for the Ron Paul crew.
MR. JAVERS: How do these Republicans’ fundraising compare to the president’s because we’ve seen – he’s taken such a political beating in the past couple of months. And yet you see his schedule and he’s got a lot of time on there for going out and having dinner at the homes of wealthy donors.
MS. CUMMINGS: The White House knows – from everything you all have spoken about, they are in for a race. They knew they were in for a race anyway. Incumbents get challenged because they have a record. And so it’s just tougher. Reelection is tougher. But it’s made all the worse because of the economy. So they know they’re in for a hard race and that’s going to cost a lot of money. In terms of the fundraising, he’s cleaning their clocks. I mean, he raised over $40 million in the second quarter with events with the DNC. If you put it all together, it was $86 million. And Romney raised the most for the Republican field at 18 (million dollars). So that’s how much more money he’s got than them.
But Bachmann and Perry are a known stress right now. They are both also noted fundraisers. They are – have built their own reputations. Bachmann raised more money than any other House member, $13 million in the last cycle. And she did much of that with small donors, a la Obama. And so that’s a hidden strength with Michele Bachmann that we’ll get a good look at when her report comes out later this month.
She got into the race four days before the last report deadline. And so there was no way to measure her strength. Perry, on the other hand, is also a noted fundraiser.
MS. IFILL: Quickly.
MR. BENDAVID: Well, I just was wondering how the shakeup in the presidential campaign with the – (inaudible) – of Perry how that affected fundraising on the Republican side.
MS. CUMMINGS: Yes, Perry’s come in and tried to scoop up people who were on the sidelines that are friends of Mississippi Governor Haley Barbour. And he’s also working the ex-Tim Pawlenty crowd, trying to collect up those friends and build a broad national donor base.
MS. IFILL: So we’ll wait for the next reports and see how everyone is competing against each other. Thank you, everyone. We’re out of time for now, but keep up with daily developments, including live PBS coverage of the president’s jobs speech all week on the PBS “NewsHour.” And as we enter a period of observances for the 10th anniversary of the 9/11terrorists attacks, turn to “Washington Week Online” for special features, showcasing how our “Washington Week” panelists covered and experienced the day and the years that followed. We’ll post new remembrances on our website every day, beginning Tuesday. You can find us at PBS.org. And we’ll also have a special look on next week’s broadcast. Here’s a preview. Happy Labor Day and good night.