MS. IFILL: The money debate over deficit reduction, disaster spending, and paying for roads and bridges. And the political debate in the Republican primary and over Palestinian statehood, tonight, on “Washington Week.”

PRESIDENT BARACK OBAMA: Middle-class families shouldn’t pay higher taxes than millionaires and billionaires. This is not class warfare. It’s math.

MS. IFILL: The president fights back, and so do the Republicans.

REP. JOHN BOEHNER (R-OH) [Speaker of the House]: Giving the federal government more money would be like giving a cocaine addict more cocaine.

MS. IFILL: Staring each other down on principle and politics, while out on the campaign trail the Republican primary begins to resemble a two-man race.

FMR. GOV. MITT ROMNEY (R-MA) [GOP Presidential Candidate]: It’s different from what the governor put in his book just – what – six months ago. So you’d better find them, Rick Perry, get them to stop saying that.

GOV. RICK PERRY (R-TX) [GOP Presidential Candidate]: Now, it’s not the first time that Mitt’s been wrong on some issues before.

MS. IFILL: And at the United Nations, a tense showdown over Palestinian statehood.

Covering the week: John Harwood of CNBC and the New York Times, Susan Davis of National Journal, Karen Tumulty of the Washington Post, and Christi Parsons of Tribune Newspapers.

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.

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

MS. IFILL: Good evening. This has been a week of standoffs between the president in Congress, in Congress between the House and the Senate, among the GOP presidential candidates, and at the United Nations. The president was first up with a proposal to tax the rich and use the money for stimulus spending and deficit reduction.

PRES. OBAMA: We shouldn’t balance the budget on the backs of the poor and the middle class, that for us to solve this problem, everybody, including the wealthiest Americans and biggest corporations, have to pay their fair share.

MS. IFILL: The Republican response was swift.

REP. BOEHNER: I don’t believe that class warfare is leadership. And, you know, we can get into this tax the rich, tax the rich, but that is not – that’s not the basis for America. And it’s not going to get our economy going again. And it’s not going to put people back to work.

MS. IFILL: Putting people back to work, John. Did we get any closer to that this week?

MR. HARWOOD: Absolutely not, but we did get a good political brawl.

MS. IFILL: Yes, we did.

MR. HARWOOD: What happened this week, Gwen, was that following on the week before when the president laid out the elements of his jobs act, which – to try to get people back work, there was a lot of bipartisanship in that, in particular payroll tax cuts that the administration hopes would stimulate hiring.

But this week we go the pay-fors, and the pay-fors were straight out of the Democratic playbook, the so-called Buffet rule saying that – named after Warren Buffet, the famed investor. Anyone who makes $1 million income ought to on principle pay the same share of their income in taxes at least as middle-class people. Warren Buffet said he pays less than his secretary.

You have the rollback of the Bush tax cuts for the top end, people over $200,000 in individual income; rollback of deductions that they have. Oil and gas, corporate jets – all the things the Democrats had been talking about in the past. And Republicans responded, as John Boehner said, it’s class warfare.

MS. IFILL: That’s the key. That’s all the things the Democrats were talking about in the past and all the things Republicans had said no to. They promised us a new focus on the economy, but to what end?

MR. HARWOOD: Well, one end is to get the president’s approval ratings up, to get him having a greater ability to pressure Congress to deliver on his agenda. And the second is to win reelection in 2012. Now, the president believes he tried over the summer to negotiate a bipartisan deal that included entitlement cuts, cuts to Medicare, Social Security and tax increases. John Boehner wanted to make that deal. The Republican Caucus wouldn’t let him. And the president decided, okay, that’s the way they want to play? We’re going to have a big fight, and that’s what we’ve got.

MS. TUMULTY: I was struck by how Warren Buffet’s secretary became the biggest celebrity in the country who nobody knows who he or she is. But what about this does in fact –

MR. HARWOOD: By the way, Warren Buffet’s secretary probably makes more than all of us put together. (Laughter.)

MS. IFILL: Oh, that.

MS. TUMULTY: So is it true that Warren Buffet pays lower taxes than his secretary does?

MR. HARWOOD: He could, although we don’t know for sure. The key to that issue is how much of his income comes in capital gains and dividends, which is taxed at a lower cap gains and dividends rate, 15 percent currently rather than the maximum personal income tax rate.

One thing that it’s indisputably true is over the last three decades, the wealthy have done a lot better in this economy than people in the middle and the bottom. Republicans counter and say, yes, well, they’ve done better but they’re also paying a higher share of all of the income taxes paid because so many people don’t make enough to pay income taxes. Both sides have talking points in this debate.

But the president thinks he’s on strong ground for uniting his base and he thinks that average Americans agree with him. And if you look at our recent NBC-Wall Street Journal polls, 80 percent of the American people said, yes, tax millionaires; 60 percent said, yes, get rid of those Bush tax cuts for people over $200,000, so he does have a solid basis in the public.

MS. TUMULTY: Although I do hope Warren Buffet’s secretary does have at least a few Berkshire Hathaway shares.

MS. PARSONS: It’s striking to me that both sides are using this class warfare language. What do you think is going on there?

MR. HARWOOD: Well, it’s an old standby for Republicans to try to resist these popular Democratic initiatives. The Democrats’ response is, yes, there’s class warfare and the rich have been winning. Warren Buffet himself has used that line. But it’s likely to lead nowhere except to campaign commercials in the 2012 elections.

I do think still there’s a prospect for some sort of a deal involving payroll tax cuts to provide some stimulus. I don’t know whether it’s going to be paid for, how it’s going not be paid for. I think that’s likely to come at the end of this super-committee process which is supposed to culminate in – around Thanksgiving time.

MS. PARSONS: And also, given that polls show that Americans kind of agree with Obama on the idea of taxing the wealthy, is this a vision he can sell?

MR. HARWOOD: That’s really the question. Americans do agree with him on some specifics. He hasn’t been able to get traction and generate effective pressure on Congress. Partly that’s because the general environment is so bad, people are so sour on the economy and that makes them sour on Obama’s leadership. So his ratings are down. His economic ratings are especially down.

So the question is, are people listening to the president and will they pressure members of Congress? There hasn’t been any evidence that he can move them so far, but he’s just begun this different tactic.

MS. IFILL: Part of the shifts seem to be this week that people were talking – in the past, the president and the White House have resisted this notion that he was raising taxes. And this time he’s – if not quite embracing it, he seems to not be shying away from that idea, even though one man’s revenues are another man’s taxes, obviously.

MR. HARWOOD: He’s not only not shying away from it – he came out in the Rose Garden and said he would veto any deal that had cuts in Medicare benefits for middle working class people that did not raise taxes. So that’s how the president was sharpening the divide. And it’s something that liberals very much wanted him to do. They were tired of this backroom negotiating he was doing with John Boehner. So he at least made part of his political base happy, even if Democrats, as everyone has noticed, are not rushing to pass this jobs bill right now.

MS. IFILL: Well, that sets the stage for the next big standoff. Are we once again on the verge of a government shutdown? The fight this time is whether to provide additional disaster aid to FEMA without offsetting cuts. But as always, it’s more complicated than that. House Republicans actually passed a bill. Senate Democrats rejected it. And now each side is waiting for the other to blink.

SEN. HARRY REID (D-NV) [Majority Leader]: I mean, do they want the government to shut down? Do they want FEMA to close? And FEMA will close. FEMA – they have money to go until Monday or Tuesday if we’re fortunate.

REP. ERIC CANTOR (R-VA) [Majority Leader]: Harry Reid now says he won’t take that bill up. Harry Reid is arguing with himself. This is why people don’t like Washington.

MS. IFILL: That’s among the reasons, anyway. Susan, how did we get back to this point where we’re debating government shutdowns again?

MS. DAVIS: We are back here because this is a Congress that has proven time and time again this year that they only function when under extreme deadline pressure. And unless things are about to fall off a cliff, they can barely agree on anything. I would say that the government is not going to shut down, that if anything both sides have been clear on this. But it is another example of how everything has become, even the most basic requirements of governance, which is what this is. This funding bill only funds the federal government through mid-November. And it is in terms of what their funding disaster relief for in the scope of the federal budget, it’s tiny. It’s nothing. But almost every vote has become either a test of philosophical purity on either side, party unity or just plain electoral politics.

MS. IFILL: So does this mean that all the disputes that we’ve seen in the past, which have come to last-minute resolution, have basically been papering over fundamental disagreements which just aren’t going away?

MS. DAVIS: I think that’s right. I mean, the parties I think increasingly are just entrenching in their positions. There is almost – as simple as this equation was, there was an element on the Hill today that was also just personal and partisan. I think there was a real anger both coming directing from Harry Reid towards Mitch McConnell, towards John Boehner, and vice versa. I think John Boehner had a very terse, brief conversation with Harry Reid this morning where Harry Reid said we should talk about what we should do. And Boehner said, we passed a bill. Now it’s your turn.

MS. TUMULTY: Well, have members of Congress not seen these polls that suggest that people hold them in lower regard than they ever have? Are they trying to get their approval rating into the single digits?

MS. DAVIS: They’re doing a good job if that’s the case.

MS. IFILL: They were at 12 the last I saw.

MS. DAVIS: They did come back a little bit chastened from the August recess. They went home for a month. Polls show that the public was not happy with Congress, the way they were doing. There was this initial softening of the tone, but at their first test – you know, this is the first thing they’ve really had to move since they’ve come back, we’ve seen them go back into their original positions.

MR. HARWOOD: Well, you said that you think there will not be a shutdown. That’s also my instinct. But given how quickly they fell back into this posture of gridlock, how would you explain to people watching this show why you think there’s not going to be a shutdown? Why should we think they’re going to work it out?

MS. DAVIS: I think because they both know that a shutdown is mutually just ensured destruction. I think that they realize that it’s not – no one’s going to come out the winner. And if you can’t see in the end how you’re going to come out on top, they’re going to agree.

MS. IFILL: But there’s no incentive to compromise.

MS. DAVIS: The incentive I do think is that – I do think Republicans still fear in some level that if the government shuts down, they will seen as the party that did it, even if that – the optics on this, in part because –

MR. HARWOOD: Including all those tea party Republicans?

MS. DAVIS: I think there’s an element in which they would almost cheer it on. I think we did see this week. I mean, John Boehner, the speaker of the House, has sort of a two-prong war he has to fight here. He has to face off with Democrats in the Senate and Obama in the White House. And he also has an internal faction within his caucus that we jokingly refer to as the “no, not ever” caucus. It doesn’t matter what he comes up with, they’re going to be a no vote.

So what he had to do after the bill – their bill failed the first time around. And what they had to do instead of going and finding Democratic support, which they could have done – there was a path there – they decided to stick to their base and to get the conservatives on board.

So John Boehner made a very clear choice this week. Is it going to be bipartisan or is it going to be on the Republican backs? And that choice was clear and which I think that was a shot across the bow to Harry Reid to say, we’re going to stick to our guns.

This whole thing perfectly explains why American disapproval ratings are – it’s in the teens now. It was at 13 percent, it’s at 15 percent. I think if you’re unemployed, if you don’t have a job – it’s hard to even explain to get outside the beltway this mentality that they’re fighting over process and cloture votes. It just seems – I think it’s just clutter and noise coming from Washington.

MS. PARSONS: It’s almost enough to make you wonder if they’re ever going to do anything again in this Congress. Is this a do-nothing Congress? Is Obama going to be able to make that case like he seems to be setting out to do?

MS. DAVIS: It’s a great question. The number one thing – I mean, beyond once they fund the government, is the super-committee, this deficit committee that’s tasked with finding further deficit reduction. They’ve got deadlines, Thanksgiving, to report out and Christmas to vote. The expectation is that they’ll get something done, but I don’t think that this is a Congress that’s going to do big things. I think it’s a Congress that’s going to do small things and I don’t think they’re going to do anything without a fight.

MS. PARSONS: And anything to improve the economy?

MS. DAVIS: It’s hard to see how it happens. It’s hard to see, because I think we’re already seeing the 2012 elections coming into play here, in part because I think Republicans have a confidence about the weakness of President Obama. I don’t know if they’re necessarily confident about a nominee. But I think they’re confident that Obama is beatable. And I think when you look at the Senate, I think that there’s confidence that that chamber will flip. So if you think you can get more of your worldview enacted next year, they’re patient.

MS. IFILL: If they come back Monday, as they’re planning to now, and vote on something, how far apart are they really?

MS. DAVIS: They’re not far apart. What they’re essentially fighting over now is $1.5 billion which would offset, which would pay for partially this $3.5 billion that would fund disaster relief. It is less than a fraction of a percent. So they’re not that far apart but it does go back to a philosophical question of conservatives that they don’t want to spend any money unless it’s paid for.

MS. IFILL: Okay. Well, let’s turn back to the philosophical discussions among conservatives because there may have been nine people on the stage on Orlando last night, but the debate was clearly only between two of them. Whether it was about health insurance or Social Security or immigration, Mitt Romney and Rick Perry commanded center stage as in this exchange when Romney attacks Perry support for tuition aid in Texas.

GOV. ROMNEY: I don’t see how it is that a state like Texas, to go to the University of Texas if you’re an illegal alien, you get an in-state tuition discount. Do you know how much that is? It’s $22,000 a year.

GOV. PERRY: If you say that we should not educate children who have come into our state for no other reason than they’ve been brought there by no fault of their own, I don’t think you have a heart.

MS. IFILL: Now, Rick Perry has a reputation for being the doctrinaire conservative. Mitt Romney has a reputation for being in this world the more moderate of the two, yet they had kind of switched roles there last night. What were they trying to do?

MS. TUMULTY: Well, what you saw was essentially Mitt Romney trying to box Rick Perry in and really get to the right of him on one of the few issues where he really could, which is immigration. And for Rick Perry it was a difficult moment because he was forced to choose between defending this position, which he did, even though it was very unpopular with the audience, and being – had he done anything else, he would have been accused of being a flip-flopper, which is his main argument against Mitt Romney.

But I think the whole evening went to what is becoming a fundamental problem for Rick Perry because he came into this race, shot to the front of the field and in these three debates he’s becoming progressively a wobblier and wobblier frontrunner because people thought that this was going to be the candidate who could come in and really could win over the Republican establishment because of his record as the longest serving, continuously serving governor in the country and at the same time ignite the passions of the tea party.

MS. IFILL: Is it that he got into late and it’s not as easy as it looks?

MS. TUMULTY: Well, that’s one thing you’re also seeing. It’s looking like he’s not able to do either one. And in part what you saw was the contrast last night between him and Mitt Romney is the contrast between someone who hasn’t done this before and someone who has.

MS. DAVIS: Do you think there’s room for someone to still get in the Republican race or is this really the field?

MS. TUMULTY: You know, Republicans keep speculating that there is. But I think what Rick Perry’s entry has suggested is that anytime a white knight enters, that’s his best day. And from there on out, he sort of gets scuffed up along with everybody else.

MR. HARWOOD: Karen, don’t we have to assume that anybody who, like Rick Perry, beat Kay Bailey Hutchinson like a drum in a primary for governor, has got some skills, especially before a primary electorate. What do you think the problem is exactly? He flubbed his flip-flop attack, which is the kind of thing that you ought to have down because that’s you going on offense. What do you think is – how do you diagnose the problem? You know Texas pretty well.

MS. IFILL: And can I piggyback on it? Is it that Rick Perry didn’t do well or that Mitt Romney really did?

MS. TUMULTY: Well, one thing. Mitt Romney is – for those of us who covered his campaign four years ago, he’s much sharper, much more focused and disciplined and much quicker on his feet than he was four years ago. And Rick Perry, yes, he drubbed Kay Bailey Hutchinson, but he has spent his career in a state that is essentially a one-party state and he is running in a Republican primary but he’s running in a primary where people are very concerned that they nominate someone who can appeal then to a general election audience and can appeal to independents.

MS. PARSONS: There were moments last night where that sounded like a book club meeting to me more than a debate, a really contentious book club.

MS. TUMULTY: After the wines ?

MS. PARSONS: Yes, after the wines. And the back-and-forths over, you said this in your book and now you’re saying that. Were people – were there some whoppers flying around there or elsewhere?

MS. TUMULTY: There were so many. Even by the standards of presidential debates, there were a lot of them. Rick Perry talked about how one person who’d lobbied him on these controversial HPV vaccines was this desperately ill dying woman. In fact, he’d never met this woman until after he’d already signed his executive order. Mitt Romney denied changing a line between the paperback and the hardcover of his book when he did – I mean, there were just any number of claims last night I think flying around that were immediately contradicted.

MS. IFILL: And there was the incredible kind of incomprehensible Pakistan response in which he didn’t really seem to get a sense that Pervez Musharraf is no longer president. So it’s going to be a long campaign season.

Now we move on to the last in this week’s “haven’t we been here before” scenes. Despite the Obama administration’s most vigorous efforts to head it off, Palestinian leader Mahmoud Abbas presented the United Nations with a request for recognition today. Abbas’ speech was warmly received at the U.N. General Assembly but not by the U.S. or by Israel. So how did it come to this, Christi?

MS. PARSONS: Well, we could go back many decades to answer that question but we can also start with the Obama administration which you remember began with the president rather hopeful about being able to do something in the Middle East.

MS. IFILL: They’re always hopeful.

MS. PARSONS: They’re always hopeful, but at least get folks talking and defuse some tensions that way and maybe that would be a bridge to the U.S. building some warmer relations in the region. But, you know, two years later things have obviously fallen completely apart. The parties aren’t even talking to each other anymore and they don’t really seem to have any incentive to do that.

MS. IFILL: And the really key – the U.S. could not persuade Abbas not to bring this big challenge to the U.N., which they were desperately trying to do.

MS. PARSONS: They had many weeks, many months to work on that and they’ve obviously been trying desperately to do that. It would be embarrassing. The U.S. opposes it because they want – the U.S. and Israel want to see this worked out in direct talks. But despite all of these months of diplomacy, that still didn’t really change the basic facts of the case, which are that Abbas doesn’t have any real reason to go into talks with the Israelis expecting anything more than he’s already gotten.

MS. TUMULTY: What does this say about the role of the United States and the balance of power in the Middle East, especially after the Arab spring?

MS. PARSONS: Yes, it says a lot, because, you know, Obama did go into – this was a key part of his foreign policy that he was going to turn a page and begin a new relationship with the Arab world, with the Muslim world. And that did happen. Just, as it turns out, the reboot wasn’t really the one he was trying to set and everything’s changed in the Arab world since then.

What it says about what’s going forward here, the U.S. position is a little more compromised now than it was before. No one in the region really saw the U.S. as an impartial broker going into this. But there was some hopefulness. Obama had changed the tone a little bit, seemed to be a little bit more sympathetic. Those things were not in play this week when he addressed the U.N. Of course he was making it very clear that the U.S. has a bottom line here and it’s as it always has been, the security of Israel.

But this is happening as there’s kind of a shift taking place in the dynamics there. And it’s no longer just the U.S. – it’s no longer just the Israelis, the Palestinians and the U.S. You’ve got the Europeans coming in and taking a stronger role. And the U.S. and Israel are a little more isolated from the rest of the international community.

MR. HARWOOD: We’ve been talking about politics in the other segments. How much pressure is the White House feeling politically on its stance towards Israel? You had both Mitt Romney in the debate saying that he’d thrown Israel under the bus; Rick Perry sharply attacked him on his stance toward Israel. How much of a problem is that for the White House?

MS. PARSONS: You know, that’s a good question. I think that when you look at the actual policy, the Obama administration hasn’t changed it. I mean, every U.S. administration going back to Lyndon Johnson has had the same basic bottom lines and Obama hasn’t departed from that. What he changed was the tone, of course.

MR. HARWOOD: The claim about the ’67 borders was false because –

MS. PARSONS: Right. This is – so – right. Exactly. There’s been some twisting of Obama’s actual position on this, which is that, you know, he wanted to use the ’67 borders as a starting point for conversations but then for land swaps to take place and then essentially, you know, for the parties to work it out themselves and make their own peace. But your question was – what was your question?

MR. HARWOOD: It was about the political pressure the Republicans, how much heat they’re putting on him.

MS. PARSONS: Right, the political pressure. Because I do – right. That’s very important. I want to go back to that because the administration did – I think that it didn’t affect foreign policy, but I do think you did see Obama responding to some domestic political pressure from his own base when he was speaking before the U.N. this week. And he was emphasizing, you know, we really do stand with Israel. It was kind of – it was a much more lopsided story than he’s told in the past. It was much more sympathetic to the Israelis. And that was a message to his base. I don’t know how much he’s really at risk of losing Jewish voters.

MS. IFILL: And Netanyahu got up today and spoke and certainly was very supportive of the U.S. and even thought they seem to be the only people applauding each other in the room. Everybody else was applauding Abbas.

Okay. Thank you everyone. We have to stop there, but the conversation continues online in the “Washington Week Webcast Extra” where we’ll get to everything we couldn’t get to here, and there’s a lot. It will be posted 11:00 p.m. Eastern time on And before we go tonight, we want to send condolences to the family of the late Charles Percy of Illinois, the three-term senator, and among other things father of Sharon Percy Rockefeller, the CEO of WETA right here in Washington. Chuck Percy was 91 years old.

Keep up with daily developments on air and online at the PBS “NewsHour.” And we’ll see you right here next week on “Washington Week.” Good night.