MS. IFILL: Presidential politics, taxes, budget priorities, and a looming confrontation with Iran, we tackle it all, tonight on Washington Week.

FORMER SENATOR RICK SANTORUM (R-PA): Governor Romney supported the bailout of Wall Street and decided not to support the bailout of Detroit.

MS. IFILL: Those might be fighting words in Michigan, except –

MR. SANTORUM: My feeling was that we should not support – the government should not be involved in bailouts, period.

MS. IFILL: Running to the right, can Rick Santorum outpace Mitt Romney?

FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (R): Senator Santorum is getting his moment in the spotlight now, which is a good thing. I hope people take a very close look at his record. If you want a fiscal conservative, you can’t vote for Rick Santorum because he’s not – he’s not a deficit hawk.

MS. IFILL: While in Washington, Congress grudgingly extends the payroll tax holiday.

SPEAKER OF THE HOUSE JOHN BOEHNER (R-OH): The only reason we’re even talking about a payroll tax break or an extension of unemployment benefits is because the president’s economic policies have failed.

PRESIDENT BARACK OBAMA: This is a make-or-break moment for the middle class in America and for folks who want to be in the middle class.

MS. IFILL: As Republicans reject the president’s budget blueprint out of hand.

SENATOR JOHN BARRASSO (R-WY): It’s not dead on arrival. It’s debt on arrival.

MS. IFILL: And Iran resurfaces as a nuclear flashpoint. We take you to the Strait of Hormuz.

Covering the week, Karen Tumulty of The Washington Post, Susan Davis of USA Today, Jackie Calmes of The New York Times, and Martha Raddatz of ABC 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.

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

MS. IFILL: Good evening. The candidate who has captured the imagination of Republican voters this week doesn’t have a national headquarters, a 50-state campaign infrastructure, or even a fancy campaign bus, but he seems to have one big advantage, at least for now: His last name is not Romney. So another big primary fight is underway and in a half dozen states this is what voters are seeing.

POLITICAL ADVERTISEMENT: Santorum even voted to raise his own pay and joined Hillary Clinton to let convicted felons vote. Rick Santorum: big spender, Washington insider.

POLITICAL ADVERTISEMENT: Mitt Romney’s negative attack machine is back on full throttle. This time, Romney’s firing his mud at Rick Santorum.

MS. IFILL: But if Santorum is soaring in state and national polls right now, it’s because people are – is it because people are for him or is it because people are against Romney. Karen, straighten this out for me.

MS. TUMULTY: That’s some really uplifting stuff in those ads.

MS. IFILL: I liked – (inaudible) – that was very interesting.

MS. TUMULTY: You know, we’ve now seen this sequence of events play out so many times, where somebody emerges as the alternative to Romney. Romney and his allies turn on the big guns, the negative ads, the scrutiny. They pulverize whoever it is and – but it never clears the way for Romney. He can’t somehow make the sale. Always there’s another alternative that people are looking for. So at some point you’ve got to assume that what is really going on here, more than anything else in this primary, the real dynamic is Mitt Romney and his inability to close the deal with the Republican electorate.

MS. IFILL: I heard him quoted today. Someone asked him whether it was a two-man race. And he says, it’s always been a two-man race. It’s been him against Bachmann. It’s been him against Cain. It’s been him against Gingrich. It doesn’t matter. He’s always against someone who’s trying to take the momentum from him. Yes, he is strong with the money and the establishment cred. So does that allow him to – is it a good thing that he can make all these people go away, I guess?

MS. TUMULTY: Well, at some point, though, the question does become why is – why is it that the Republican rank and file – in a year when people are so passionate and so desperate on the Republican side to bounce Barack Obama out of office, why it is so hard for the Republican electorate to coalesce behind anyone? And now we are going into this big run of primaries. We have two of them on the 28th. We have Super Tuesday the following week.

You know, if Mitt Romney cannot make the sale at some point during this, people are going to start wondering about the biggest argument that he has had going in his favor, which is his inevitability and his electability.

MS. RADDATZ: What is the messaging problem that Romney has? What is going wrong for Romney and how does he change that?

MS. TUMULTY: Well, I am – I spent most of this week following him around through Arizona and Michigan and Ohio. And it is really difficult to – he’s running on his biography and he is – he changes his tactics. His stump speech has now devolved into one line of biography, followed by a line of why he loves America, you know, followed by sort of the vaguest of – the vaguest of promises of what he would do if elected. But none of this seems to add up to a rationale or a real clear picture of how he would do things differently. He makes the argument that essentially, you know, the country’s biggest problem could be solved just by firing the CEO and changing who’s in the White House.

MS. CALMES: If he were to lose in Michigan, is that fatal?

MS. TUMULTY: You know, it’s not fatal, but it does, I think, shake the biggest thing he’s had propping him up so far, which is this aura that in fact ultimately people are going to come around to Mitt Romney because this is his home state. He was raised there. His father was the governor of the state, and it’s also a state that he won quite handily four years ago.

MS. DAVIS: What about the – excuse me – what about the other man in the race, Rick Santorum? Why is he excelling right now and does he have staying power or is he just the latest not Romney.

MS. IFILL: And can I piggyback on that? I want – we’ve had this big social cultural debate going on in Washington now for a couple of weeks, it feels like, about contraception, birth control, you name it, in which Rick Santorum is on the right in this? Does that help him?

MS. TUMULTY: You know, this is one of these things where you are looking at the Republicans, the conservatives, the bishops, and it really looks like on this contraception thing they are truly trying to snatch defeat from the jaws of victory. I think that they had a lot of sympathy going into this, but increasingly, this is looking not like an argument about religious freedom. It’s looking like an argument about contraception.

MS. IFILL: And it doesn’t help that he told our friend Andrea Mitchell – his Super PAC guy told our friend Andrea Mitchell that probably contraceptive would be handled if women would just put an aspirin between their knees.

MS. TUMULTY: Right. So it’s – you know – so there is the question of whether what is happening in the Republican primary is something that is ultimately going to make it harder for their nominee, whoever he is, to get elected in the fall. But Rick Santorum does have some things going for him that the previous not-Romneys didn’t. I think he has a lot of appeal for blue collar voters because his story is their story.

MS. IFILL: Well, here in Washington, they’ve been debating these same social issues, but they have also passed – Congress actually passed legislation – (laughter) – and it will extend a payroll tax cut and unemployment benefits. You’ll remember, this is the same debate that almost crippled the government last December. This time, not so much. And the president took a victory lap of sorts today at a Boeing plant in Washington State.

PRES. OBAMA: Just before we got here, Congress did the right thing and voted to make sure the taxes would not go up on middle-class families at the end of this month. It is amazing what happens when Congress focuses on doing the right thing instead of just playing politics.

MS. IFILL: That’s a mighty big jet engine right behind it, wasn’t it? The Democrats and Republicans jumped off the bandwagon at the final vote on this, and therein lies in the story that Sue is going to tell us. What happened?

MS. DAVIS: I think what closed the deal in the end is Republicans showed a tremendous amount of pragmatism in this. They looked at the debate and they realized it was a political loser, and they made the decision to neutralize the president’s best argument. And so they said that they didn’t have to pay for it. This fiscal Congress that has drawn such a hard line on fiscal issues walked away from a commitment to pay for the tax cut. It’s a lot easier to pass legislation when you don’t have to pay for it. And the Speaker’s office has been fairly pragmatic in saying this is a success for the president, but where they’ve succeeded is they have neutralized what has been a very potent political attack by the White House and the president that this is an ineffectual Congress, that this is an obstructionist Congress.

And then the reality is this bill affects millions of Americans. And there was going to be very real consequences. And voters have shown a real distaste for brinksmanship politics. And from the – the payroll tax cut means about $40 a paycheck for an American making about $50,000 a year or considered to be about $1,000 a year over the course of the year for an American family. Unemployment benefits, at a time of very high unemployment, $300 paychecks, depending on the state and the formulas, and a drop in physician payments to seniors. Imagine the political consequence –

MS. IFILL: If they’d said no to all that.

MS. DAVIS: – is seniors were being dropped from doctors and not seeking treatment. So the sort of reality affecting real lives forced the hand. It also – so it was a remarkable amount of bipartisanship. Chuck Schumer walked off the Senate floor after the Senate passed it and said it’s a miracle. And in the House, almost the exact number of Republicans voted for it as Democrats. So it was sort of unilateral disarmament on this issue.

MS. CALMES: Susan, we remember last fall when the Republicans first set this condition that their tax cuts had to be paid for and it was pointed out by Democrats and others that they hadn’t set this condition for tax cuts in the past, including notably the Bush-era tax cuts. And now, are they doing this now to sort of set a precedent, go back to the old precedent that you don’t have to pay for them because they’re looking to the end of this year when the Bush-era tax cuts are ready to expire and thinking, well, we can move to extend those without paying for them?

MS. DAVIS: You know, this was a short-term win, I think, in some sense for Republicans, but there’s long-term consequences. I think it’s notable that the three Senate Republicans who were supposed to negotiate the deal didn’t sign off on it and voted against it. And because – in part because Republicans, including Mitch McConnell, who’s the leader of the Republican s in the Senate, as of last week had been saying, Republicans will not support a package if it’s not paid for and 180-ed (ph) within a week. So the Republican Party has been very inconsistent on this issue. And it’s going to come up again at the end of the year, when we’re facing the expiration of the Bush tax cuts on December 31st, and this is an issue that’s probably going to have to be resolved in this very short period of time after the election.

MS. RADDATZ: So you mentioned this very briefly, but what does this do to President Obama if Congress passes things, then how does he run against them?

MS. DAVIS: Well, it will be very telling, and I think Republicans are looking for this, as you know, does the president have a big Rose Garden signing ceremony with Mitch McConnell and John Boehner behind him, or is this – you know – they sign it and pass it –

MS. IFILL: What do you think?

MS. DAVIS: – and move on. Exactly.

MS. RADDATZ: I think not.

MS. DAVIS: And I think Republicans noted that when they passed the bill, NFA authorization that was pitched as a job bill, you know, the White House signed and moved on, didn’t talk about it. I mean, it definitely does not help the White House’s message that Congress is ineffectual. But I mean looking forward to this year, you talk to different Republicans, you talk to Democrats, there’s not a lot of more options for compromise this year. And I think after this, they’ll do what they have to do and there’s not going to be a lot more payroll compromises before the election.

MS. TUMULTY: And so what you’re saying here is this was like everybody just sort of doing, as you said, what they had to do. So you think at this point the terms have been set and from here on out – I mean, does the president still have his argument that the Republicans are a do nothing Congress?

MS. IFILL: And have they cleared the decks and nothing much else happens now for the rest of the year?

MS. DAVIS: Well, there’s not much they have to do now. You know, in terms of what the government has to do, we’re not going to really hit that until the end of the fiscal year in September. And I do think one thing that’s going to sort of reinforce the bright lines on the Hill is Paul Ryan, Budget Committee Chairman. He’s going to unveil his budget in a couple of weeks, and that’s going to create this very stark contrast between the Democrats and Republicans, and it’s going to go from there.

MS. IFILL: Well, let’s talk about something else they don’t have to do because it’s an annual ritual and it seldom goes anywhere anymore. The president delivered his budget plan to Congress this week. Republicans dismissed it, but it’s worth examining anyway if only for what a $3.8-trillion election year spending request tells us about the president priorities for a hoped for second term. So what did you see in it that tells what we’re looking at here?

MS. CALMES: Well, I’ll segue strait from Susan, who said that this – when Congressman Ryan puts out the House Republican budget, it will set up a contrast. And that’s exactly what the White House wants because they think they have the better of that argument, you look at any poll, that the contrast is they are – for all the emphasis and all the talk about deficit reduction for another year, the second year in a row, they have emphasized more of the investments they’re making in the country, while also bringing down deficits over the next 10 years, they would say, by $4 trillion. The Republicans, of course, contest that estimate.

But they’re really emphasizing the things – the president made his announcement at a Virginia community college, happened to be a young audience. Those are the voters they really target, a community college, which is a winner in his budget amid all the losers that have to be cut back, and it’s in a swing state, Virginia. So this is a political document. It also could be looked at as an agenda for a second term. Clearly, this budget you see with the economy starting to improve, he’s moving away – this administration, finally, in the fourth year, feels it can emphasize less the short-term stimulus and more, especially now that they’ve gotten the passage of the payroll tax cut bill with the unemployment compensation in it, and they can move into the long-term investments.

If I could just give one example there’s – you know, the president likes to talk a lot about how we need to get out of Iraq and Afghanistan in order to do some nation building at home, so he proposed a six-year $476-billion transportation program. And so those sorts of things are where he’s putting his emphasis.

MS. TUMULTY: But at every single event that I went to with Mitt Romney this week, the first thing out of his mouth was, remember when the president promised that he would cut the deficit in half by the end of his first term? He’s going to get hit with that over and over again. Have they decided that people don’t care about deficit reduction as much anymore?

MS. CALMES: Well, they certainly hope so because there’s nothing they can do about it at this stage. You know, it’s probably the president made that promise in like February of 2009, just after taking office, and what they – what the administration will say, which has the benefit of some truth behind it, is that no one knew then exactly how severe the recession was. So we’ve had not only the stimulus bill they passed that year to cover two years, there’s been – we’re continuing, as this discussion on payroll tax reflects. So they’re thinking – they always said it would be as a percentage of GDP. He inherited a deficit that was about 9 percent compared to the size of the economy. The budget he proposes for – well, he will leave – the budget year that ends on October 1st or on September 30th, so right before the election, will have a deficit to GDP ratio percentage of 8.5 percent. So that’s hardly cutting in half. And – but next year, he’s proposing 5.5 would be the – percent would be the deficit, but you know. So even a year from now, it won’t be cut in half from what he inherited, but they’re thinking the public thinks that he was dealt a bad hand.

MS. RADDATZ: So Jackie, it’s not really dead on arrival. We hear dead on arrival, dead on arrival, but we’re just going to mess with this for a long-time.

MS. CALMES: Well, you know, you hear dead on arrival about every president’s budget because Congress’ constitutional power is the power of the purse. They jealously guard it. But ever president gets some of the stuff passed. I think one thing – you know, so it isn’t unfair to call dead on arrival like most. There will be some things that pass.

But one thing about this we need to keep in mind, and this goes back to what Susan was saying about – you know, there’s only – there’s not a lot left they need to do. Well, part of that is because they – everyone’s assuming now they’re not going to finish the appropriation bills, and there will be – before the election, there will be a lame duck session that will come right before the Bush tax cuts are supposed to expire and right before this $1.2-trillion sequester, automatic spending cuts that they allowed for if Congress doesn’t come up with some alternatives. Those will take effect. To avoid those, there will have to be a lame duck session. The president, whether he wins or loses, will still have a veto and hope that he can get some of his things through in a lame duck session.

MS. IFILL: Quick question.

MS. DAVIS: Quick question on Medicare. The biggest Republican criticism of the president’s budget is that he doesn’t fundamentally answer the biggest budget crisis this country’s facing, is how do we make Medicare more solvent. Is it a fair criticism and did the president take an easy way out by not offering radical reforms to an entitlement program?

MS. CALMES: Well, most of the –

MS. IFILL: It’s a hard quick answer.

MS. DAVIS: Yes or no?

MS. CALMES: Most of the savings would come from providers like care providers, not beneficiaries, although there would be some higher out-of-pocket costs for beneficiaries. House Republicans – the contrast with Paul Ryan is they want to remake this into a voucher program and Medicaid into a state grant. So there is a big difference there, and they’ll – that’s what they’ll debate.

MS. IFILL: Okay, we’re now moving on to the foreign policy front, where worries are percolating again about what Iran is up. Israelis are nervous about an apparent Iranian nuclear buildup. New economic sanctions are being imposed against Iran. And the drama is playing out in the Strait of Hormuz, a waterway that carries one-fifth of the world’s oil supply. Martha is just back from a U.S. Navy destroyer that steamed through the Strait this week, which is very dramatic. How tense was it there?

MS. RADDATZ: Well, first of all, I was on a destroyer. I was on a carrier, back and forth. You had briefings from all sorts of admirals and commanders, and the one message they wanted to get out is this is just business as usual. It’s not tense here. It’s fine. Of course, the Iranian will come out and check us out. We’re going through this waterway. Which makes me believe they’re pretty tense. (Laughter.) Because everybody’s saying they’re not tense.

MS. IFILL: Protesting a bit too much.

MS. RADDATZ: Yes, protesting a bit too much, exactly. When you go through the Strait of Hormuz, and we’ve all read about it – I mean, it is very dramatic when you go through there, you can see Oman on one side, and way, way, off in the distance, you can see Iran. It’s only about two miles wide at one point, where the shipping lanes are. And there’re Iranian craft that come towards our boat.

Now, I think there would have been a whole lot more, but the seas were very, very high that day. I think the biggest fear of commanders right now is miscalculation. I don’t think the Iranians – and it’s the Iranian Revolutionary Guard navy that they’re most worried about – that they’ll come out and create some sort of incident. We’ve seen in the last few months. They come out and they harass the big ships and the U.S. is like we really don’t want to shoot back. We’ll do anything but shoot back. They’ll drop flares. They have a whole line of defense before they would ever – ever go kinetic. But I think what they worry about is that the Iranian Revolutionary Guard might misperceive something that the U.S. ships are doing and cause an incident. I think they’re trying to deescalate that. I think they’re trying to stay in communication with them as much as possible. They do not want anything to happen in the Strait of Hormuz that will start something bigger.

MS. DAVIS: How realistic is it that they could actually close the strait?

MS. RADDATZ: Oh, they could definitely close the strait. In fact, I think one of the things people realize now is that all the Iranians would have to do is say, oh, by the way, we mined the strait, because at that point insuring – Lloyd’s of London is going to say we’re not going to insure the tankers anymore. But they could mine them. The U.S. – I actually asked one of the commanders, would you know whether they’d actually mine them, I mean they have all kinds of surveillance there that they’re watching to see if the Iranians actually mine the strait. They don’t really think they’re going to do it. They think that’s a bluff. But if Israel took action against Iran, that’s certainly something that the Iranians could do.

MS. CALMES: Well, the Iranian economy is already reeling from the international sanctions. Wouldn’t mining or closing the straits be a nail in the coffin?

MS. RADDATZ: Suicide, yes. It would be basically suicide. And from what I’ve – from what I’ve said and talked to commanders, I think they do not think it would be mined unless Iran was attacked – that it is a bluff unless Iran is attacked by Israel, then they would probably not mine the strait for exactly the point you made, Jackie, because it would be really suicidal.

MS. TUMULTY: And what are the prospects for that, for the possibility of Israel attacking Iran and sort of what’s the U.S. thinking of what this country’s response would be then.

MS. RADDATZ: You heard quotes from the defense secretary, who did not deny those quotes in The Washington Post, saying that he thought that Israel would attack Iran in the coming months. Now, there are things that the Iranians might be able to do to avoid that, but it is looking fairly likely that that could happen in the next six months. The Israelis see a threat that we don’t. We feel we have time. The Israelis don’t feel that they have that time. They’re in that very bad neighborhood. They feel threatened by the nuclear program, and they don’t want that to cross a red line where even if they tried to take it out, it wouldn’t do any good.

MS. IFILL: Are sanctions enough to make Israel step back for a moment on this?

MS. RADDATZ: Not unless they see absolutely the Iranians stopping that nuclear program. I think the U.S. is clearly trying to say let sanctions work. Let sanctions work and we’ll push Iran into a corner. But until they see some real change, you might see an attack.

MS. IFILL: Martha, welcome back from your latest scary trip. Before we go tonight, we want to actually take a moment to honor one of our colleagues, New York Times correspondent Anthony Shadid. He died yesterday in Syria after suffering an apparent asthma attack. Anthony was a two-time Pulitzer Prize winner, a survivor of kidnap and assault, and a gifted teller of important stories. Martha, you’ve covered a lot of the same important stories and you knew Anthony Shadid. What made him different, what made him stand out? He really was a remarkable journalist’s journalist.

MS. RADDATZ: I’m not saying this for any other reason than it’s true. He was better than all of us. He did the – always got the whole story. He didn’t just get the military. He didn’t get the people on the street. Anthony just kept working and working. He was a beautiful, passionate storyteller. He wasn’t just a reporter. He was a storyteller. He made you read those stories and you were there with him. You were learning something from everything Anthony wrote and he was a wonderful, wonderful man, too.

MS. IFILL: It’s one thing for us to sit here on our easy chairs and read the stories that he wrote. It’s another one for someone like you who’s been out there actually covering these stories and who can gauge the danger of trying to get those stories. Does that make you look at it and think, gee, I want to go back? Or does it make you look at it and think, you know, maybe the risks are too great?

MS. RADDATZ: The risks are great, but Anthony in this case died of asthma, but he took a lot of risks. People take a lot of risks for a lot of reasons because they think it’s important, and that’s what he thought.

MS. IFILL: Well, thank you, Martha. And thank you all very much. We have more to say, but we’ll have to say it online on our Washington Week Webcast Extra. You’ll be able to find it at Keep up with daily developments online and on the air at the PBS NewsHour, and we’ll see you again right here, next week, on Washington Week. Goodnight.