GWEN IFILL: The election ends, but the politics continue. From generals under fire to a looming fiscal cliff, we examine the gauntlets being thrown down, tonight, on “Washington Week.”

PRESIDENT BARACK OBAMA: (From tape.) I think we’re all aware that we have some urgent business to do.

MS. IFILL: At the White House today, talk of compromise.

REPRESENTATIVE JOHN BOEHNER (R-OH) [Speaker of the House]: (From tape.) It’s (going to be ?) incumbent for my colleagues to show the American people that we’re serious about cutting spending and solving our fiscal dilemma.

SENATOR HARRY REID (D-NV): (From tape.) We have the cornerstones of being able to work something out.

MS. IFILL: But the post-election sparks are flying everywhere else – distinguished generals under fire, accused of inappropriate behavior.

SECRETARY OF DEFENSE LEON PANETTA: (From tape.) It was a very sad situation to have a distinguished career like that end in this manner.

MS. IFILL: Lawmakers pledging to get to the bottom of the Benghazi attacks draw lines in the sand.

SENATOR JOHN MCCAIN (R-AZ): (From tape.) We will do whatever is necessary to block the nomination that’s within our power as far as Susan Rice is concerned.

MS. IFILL: And the president pushes back.

PRESIDENT OBAMA: (From tape.) For them to go after the U.N. ambassador and to besmirch her reputation is outrageous.

MS. IFILL: And Mitt Romney stirs intraparty recrimination with this post-election analysis.

FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (R-MA): (From tape.) It’s a proven political strategy, which is give a bunch of money from the government to a group and guess what, they’ll vote for you. The giving away free stuff is a hard thing to compete with.

LOUISIANA GOVERNOR BOBBY JINDAL (R): (From tape.) We need to stop being the dumb party. We don’t win elections by insulting voters.

MS. IFILL: It’s the circle of political life. Covering the week, David Wessel of the Wall Street Journal; Helene Cooper of the New York Times; Martha Raddatz of ABC News; and Charles Babington of the Associated Press.

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

(Station announcements.)

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

MS. IFILL: Good evening. No one got the chance to catch a post-election breath here in Washington before all heck broke loose – filibuster threats, sex scandals, intraparty finger pointing, demands for Watergate-style hearings. And that’s just in the last 48 hours.

But today at the White House, we saw what may be a glimmer of hope from Democrats and Republicans who never agree, let alone appear on camera side by side. Was it perhaps bipartisanship?

REPRESENTATIVE NANCY PELOSI (D-CA) [House Minority Leader]: (From tape.) It was a very constructive meeting. We had a recognition that every person in America knows that we must reach agreement.

SENATOR MITCH MCCONNELL (R-KY) [Senate Minority Leader]: (From tape.) We’re prepared to put revenue on the table, provided we fix the real problem.

MS. IFILL: In agreeing that they must avoid what has come to be known as the dreaded fiscal cliff, the congressional leaders used the word “constructive” once each to describe today’s White House meeting, and the White House used it twice in its official statement. So did we see any real movement today or was it just all rhetoric, David?

DAVID WESSEL: Well, I think the first thing we saw is that the two sides have agreed that it’s in their interest to appear reasonable. During the campaign, everybody wanted to be resolute in their positions. Now we’re in the appearing reasonable thing.

Secondly, as we saw Mitch McConnell, the Senate minority leader, say, the Republicans have basically conceded that taxes are going to go up.

But there remains this huge issue, which was not as far as we can tell really resolved or even discussed today – is the president going to insist on raising tax rates on the rich or will he come up with some other way to get money out of rich people that the Republicans find more palatable, perhaps by limiting deductions or something?

MS. IFILL: So today – I flash back to these previous conversations, Helene, in which everybody comes out and there’re separate microphones and they’re not saying nice things about one another. They’re digging their heels in. Instead, today, we saw a joshing around the table about John Boehner’s birthday between the president and John Boehner. Is it any different or is this just about, I don’t know, smoke and mirrors?

HELENE COOPER: I think the atmosphere is certainly different. As you mentioned, in the past, these guys would skulk back separate to Capitol Hill and put out competing statements about what went on during these meetings. You saw what happened last year during the debt ceiling negotiations.

This time, you know, it was all one big happy family. I think there certainly seems to be some sort of recognition on the part of how fed up the American people are with sort of seeing this game of chicken being played at such a high stakes time.

And I think there’s certainly – after this election, there’s kind of a let’s get down to business – let’s see if we can get this thing done. Whether that translates – David just said, the biggest sticking point, you know, taxes on the wealthy, is on the table. So you can sing happy birthday to John Boehner as much as you want, but you still have that.

MS. IFILL: He’s still saying no. He’s still saying no.

MR. WESSEL: Absolutely. And so I think it’s really premature to try and predict what’s going to happen here. We had a few days where everybody was jockeying for a position trying to get their negotiating stance. We have this conversation today where, as you point out, they come out and hold hands.

I tried to find another picture of the four congressional leaders outside the White House. I couldn’t find one for the last year and a half. And then, I think they’ve kind of agreed on the shape of the table. And we’ll have to see.

They don’t have very much time. They’re under a lot of pressure. I honestly think each side has decided that going over the cliff would make them look bad. So if we go over the cliff, the automatic spending cuts and tax increases that are said to take effect at year end unless something happens, it will probably be because there’s a miscalculation or one side has really dug it in.

MS. IFILL: So both sides are kind of testing the optics of this.

MR. WESSEL: Absolutely.

MARTHA RADDATZ: Haven’t they said in the past – I mean, they did. They had competing statements in the past, but in the beginning, they were optimistic.

MR. WESSEL: Right.

MS. RADDATZ: So does it really make a difference because this is the second time around? They really know they have to get something done.

MR. WESSEL: I think Helene has it exactly right that on all sides there’s a sense that their standing with the American people is in trouble. People who don’t agree on what they should do want them to compromise.

Secondly, we did have an election and the president did win. And the Republicans are not any stronger than they were before, and the president is taking advantage of that.

And third, there is this ticking time bomb of the fiscal cliff which makes it harder to just do nothing.

MS. COOPER: This is sort of a sign, too, that we could actually end up getting into more trouble. The White House very much believes that – President Obama believes that he, if nothing else, he has a mandate on the taxes, raising taxes on the wealthy and big business. It was a part of every single one of his stump speeches during the campaign.

MS. IFILL: And certainly of their testing, of their polling.

MS. COOPER: Yes. Yes. And you can’t go to the White House without telling you that exit polling showed that Americans agree with them. People at the White House at the very least think that the message has gone through to the Republicans, but gotten through to the Republicans. Whether that’s the case or not, that sort of describes the circumstance for where we could actually end up in a situation where we’re standing on the edge of the cliff is if the White House miscalculates how much the Republicans are willing to back down on that.

CHARLES BABINGTON: We use these dire terms like ticking time bomb, edge of a cliff. There are some people who say it might not be that bad if we get past the December 31 deadline. They talk about of maybe it’s a slope.

MR. WESSEL: There’s like – we’ve gotten to the point in Washington where you can’t even agree on the metaphor.

MR. BABINGTON: Right. Right.

MR. WESSEL: Fiscal obstacle course, some people – look, if we get to the end of the year with no deal, what happens? Well, spending is supposed to be cut across the board indiscriminately and taxes –


MR. WESSEL: By law. And taxes are supposed to go up. The White House and Treasury actually have a little wiggle room here. The lights don’t go out across the federal government. And Uncle Sam doesn’t reach into everybody’s paycheck right away. They can delay it with changing the withholding tables. They can spread out the spending cuts. So if there’s actually – if we’re close to a deal, going over the cliff for a couple of weeks probably isn’t such a big deal.

If we go over for a long time, we have a recession. But I think the problem is, if we get to the end of the year, and they’re still at odds, and it looks like they can’t agree, then I think there will be a really adverse reaction from the financial markets and from the public because people are – think these guys they said they were going to get –

MS. RADDATZ: And credit ratings and all that, right?

MR. WESSEL: Credit rating. Right. The credit rating was downgraded not because of our debt but because of fiscal – political dysfunction.

MS. IFILL: And the other interesting thing to me is that, remember, during the campaign, we started deciding what was really important about the battleground states the candidates were going to based on where they actually physically went. So, in this case, we look at the president’s physical schedule this week. He met with a group of liberals who he had been avoiding for other parts of the campaign. And then he met with some CEOs who came in. And that was the same top subject on the table each time. What was the message being sent by who he chose to meet with this week?

MS. COOPER: It was very much that this is at the top of his agenda. This was a make nice session with the CEOs. They came the day after the labor leaders came. And that in particular I found to be a really interesting meeting because Obama has been – President Obama has been beating up on these guys forever and he really needs now to patch things up. He opened the meeting telling them that he realized that there was a perception that he had been beating up on big business.

MS. IFILL: A perception.

MS. COOPER: Yeah. He said that he didn’t think that he really deserved that but he wanted to move forward. He extended the olive branch. And these guys all came out of the White House saying we’re ready to move forward as well because they want to be a part of the process and they know that – you know, they don’t want to leave this to just the White House and Congress as well.

But, at the same time, they were very much delivering their warning, which is, you can’t go – we cannot go over – the economy can’t afford to go over this cliff. You saw the Wal-Mart head talking about Wal-Mart shoppers need to know and they don’t need, you know, any kind of uncertainty right now when they’re going into the Christmas season. I mean, business doesn’t want to see this happen.

MS. IFILL: And labor? It seems to me that they may want the same thing but for different reasons and in different ways that, ultimately, they don’t want to go over the cliff, but they can’t agree on how do they stop that.

MR. WESSEL: That’s right. And the labor leaders were saying, don’t cut entitlements too much, Mr. President. And I’m sure in that meeting he explained to them why he thinks it’s in our collective interest to get the deficit settled so we can do other things.

I also think what these meetings show is the president last year had a very inside the White House strategy. You know, he and John Boehner sat down, and the president had a beer, and John Boehner had his red wine, and they got nowhere.

The president’s going to be much more visible this time. He’s going to build a campaign for his position. We’ve already seen some people move from the Obama presidential campaign to organizations that are standing behind him on raising taxes on the rich. So I think this will be a much more public negotiation or at least this part of it. And just meeting with these people just provides a great theater for that public.

MS. RADDATZ: Didn’t Nancy Pelosi say today that they would have sort of milestones along the way and that there might be miniature goals as we get to the end? What do you see? How do you see that playing out?

MS. COOPER: Well, I think that this, again –

MS. RADDATZ: That part of the public –

MS. COOPER: Yeah. Yeah. This is another sign of the fact that they have to get this done. There’s no – there’s nobody right now on either side of the aisle who wants to see this happen. And I think what you’re seeing when Harry Reid, for instance, is standing there and practically promising that we’re going to get a deal before December 31st, he stood up there and said that today, you know, they mean business.

MR. WESSEL: Right. And there are lots of pieces to this. So I think what they agreed today was to divide into pieces. There’s how do we deal with the end-of-the-year problem on spending, is what do we do about a longer term budget deficit thing, so this is what I meant by the shape of the table. They’re trying to set up a framework so this actually can get done instead of just having a lot of yammering.

MS. IFILL: And the big bite is that $65 billion sequester which is – that’s part of what they’re going to talk about down the road.

MR. WESSEL: Right. They’re probably going to find a settlement for this year, where they’ll do $100 billion down payment on deficit reduction, which is one year’s worth of the sequester, while they talk about the longer term deficit.

MS. IFILL: OK. Well, in agreeing – the week’s other big story that is, involved a growing scandal that has now tarnished two of the nation’s most admired military men.

General David Petraeus forced to step down as CIA director after admitting to an extra-marital affairs with his biographer, testified in secret today on Capitol Hill about that affair and also about who knew what during the Benghazi attack.

And General John Allen’s nomination to the next commander of NATO forces in Europe has been put on hold as the Pentagon inspector general investigates his friendship with another woman. Add to that the escalating tension between Israel and Hamas, and the head spins, Martha. How do you keep up? (Laughter.)

MS. RADDATZ: It certainly does. You definitely need a flow chart for this week. It is incredible to me that just one week ago tonight we learned about David Petraeus and that he resigned as CIA director. And today, he’s up on Capitol Hill testifying about Benghazi.

Of course, this happened September 11th of this year, the attack in Benghazi – a lot of different stories right away about why that happened, how that happened. But it was Susan Rice, U.N. ambassador, I think was five days later on the Sunday talk shows saying that she thought it came as a result of some protests, and because the Egyptian – in Cairo there were protests about this anti-Muslim film. The Republicans have pounced on that. You heard John McCain and Lindsay Graham saying there’s no way they want her to be secretary of state, nominated to secretary of state.

MS. IFILL: Because everybody knew, they say, that it was terrorism.

MS. RADDATZ: Yes. Everybody knew it was terrorism. Well, today, one of the things that David Petraeus said is that he knew right away it was terrorism. And in the talking points, they took that out because it was classified and they talked about extremists.

Now, Susan Rice says this began as a spontaneous, not premeditated response to what had transpired in Cairo. I don’t think her language was very careful. I think that’s why they pounced on that language. But I think things were slightly settled down today because you heard from Dave Petraeus, because he said she was given these talking points. I don’t think it settled down completely. I think you’ll see – you’ll probably still see John McCain and Lindsey Graham –

MR. WESSEL: And you think she’ll be secretary of state?

MS. RADDATZ: I don’t know. I don’t know whether she’ll be nominated. And that’s one of the things that President Obama said yesterday. He said he hadn’t decided.

MS. IFILL: Yes. How much was this about whether she was really going to get the nomination, how much of this was not letting them tell him whether he was –

MS. RADDATZ: Exactly. I’ve just told you that I can nominate anybody I want to, and if I want to nominate Susan Rice, I will. But he certainly hasn’t done that yet and Hillary Clinton is not gone. So we can’t do that yet.

But I think certainly – I’ve seen a couple of very negative articles in the past 24 hours, too, about her so it sort of seems there is an effort to undermine that nomination, but maybe that will just –

MS. IFILL: Let’s not forget the big story of the week, which is – (laughter).

MS. RADDATZ: Yes. Just one week ago.

MS. IFILL: Even though I don’t even know what the question is anymore. (Laughter.) We have women coming in and out who have passes to the bases, who have secret clearance, and that have had computers taken from their homes.

MS. RADDATZ: Twin sisters, and the letter by two generals about the twin sister’s custody.

MS. COOPER: Custody case. Don’t forget the custody case. Yeah.

MS. RADDATZ: But let’s just sort of clear up where we are now. He resigned a week ago. And what I saw this week is a lot of his surrogates, people who have known him and admired him, are coming out to speak for him. It’s almost like the rehabilitation of David Petraeus one week later has started in earnest. It really has. I really screwed up, that’s the line that he’s put out this week. This is terrible. I’m doing terrible things to my family.

But I still think there are a lot of questions about the timeline of this. The surrogates said this week that it ended four months ago, and yet there are pictures of them at events together just a couple of weeks ago. He made a very strong point through the surrogates again to say this did not happen while he was in the Army.

MR. BABINGTON: Aside from the soap opera aspects, do we know whether classified material was leaked, or important classified material? Is that clear or not?

MS. RADDATZ: Well, so far the FBI seems pretty satisfied that David Petraeus didn’t leak any, and, again, he is saying that he didn’t give her any classified material, but they found classified material on her computer.

No matter what that classified material is – and believe me, the military in particular – classified everything, including weather reports when you got into there, whatever it is, it is illegal to take classified material home, to have it on your home computer. You just can’t do that.

MS. IFILL: John Deutch, the former CIA actually had to leave.

MS. RADDATZ: John Deutch, yes. And you saw the FBI agents this week, earlier this week go to her home, take out all sorts of boxes. I’m sure they will look at all that and examine that.

MS. COOPER: All right. Can we go back to the soap opera aspects? General Allen emails – what –

MS. RADDATZ: That was – was that Tuesday? I can’t even –

MS. COOPER: What is going on there?

MR. WESSEL: It’s much better than the fiscal cliff, I have to admit. (Laughter.)

MS. COOPER: What’s in those emails?

MS. RADDATZ: Those emails, you know, it started out with great drama this week. And I think it was about 1:00 a.m. in the morning and Leon Panetta was traveling somewhere. And you get an electronic email saying that General Allen is going to be investigated, the man in charge of the war in Afghanistan. And lots of things saying, yes, it was these emails with Jill Kelley. So it looked very bad. I mean, I thought he is finished.

But the next day, the White House supported him, saying we have faith in him. So I think they backed off on that a little bit, but they haven’t cleared him yet, and they don’t want to do that.

MS. IFILL: The person who’s succeeding him in Afghanistan is – that’s moving ahead.

MS. RADDATZ: That’s moving ahead. You already have a successor name. General Allen is supposed to be head of NATO. That’s what’s been held up. And he could very well – they can very well pull the nomination. We’ll just have to see what’s going to happen.

MS. IFILL: Well, if I know everything about this week is if I wake up tomorrow morning and there’s a whole new story about this, I will not be surprised.

MR. WESSEL: And another woman, no doubt.

MS. IFILL: Well, now, now. That’s now – David, yes. So that’s what a post-election week looks like, but what about the second Obama term? Mitt Romney, for one, was still mulling over his defeat offering these surprising words in a telephone call yesterday, or Wednesday I guess it was, to donors.

MR. ROMNEY: (From tape.) What the campaign did was focused on certain members of his base coalition, give them extraordinary financial gifts from the government, and then work very aggressively to turn them out to vote.

MS. IFILL: Gifts. But at his first news conference since March, the president was the victor eyeing the spoils.

PRESIDENT OBAMA: (From tape.) I’ve got one mandate. I’ve got a mandate to help middle-class families and families that are working hard to try to get in the middle class. That’s my mandate. That’s what the American people said. I didn’t get reelected just to bask in reelection. I got elected to do work on behalf of American families.

MS. IFILL: The president still has a line to walk, but on the one hand you hear Mitt Romney talking about gifts and you hear the president talking about, I’m not basking in reelection. But one of them kind of is.

MR. BABINGTON: I thought the president did walk a careful line in that news conference. He did just win an election. But you didn’t really see him gloating. There was a bounce in his step. He did not do what George W. Bush did right after he won his reelection when he said, I’ve got political capital to spend and I’m going to go spend it. I sounded a little boastful. And what Bush immediately tried to do was partly privatize Social Security, and it was a gigantic wreck, and it really cast a pall over his entire second term.

MS. IFILL: Obama didn’t say that, but it almost was like he meant it. I mean, when you look at his priorities for the second term that he’s talked about.

MR. BABINGTON: He’s definitely ambitious, as he should be, but we talk about mandates. We perhaps should stop using that word.

MS. IFILL: Yeah.

MR. BABINGTON: Because it wasn’t terribly long ago that Ronald Reagan won 49 states. That’s a mandate. You’ll never see that again, not in my lifetime because the country is realigned politically. It’s unthinkable that any candidate can win anywhere close to that.

Obama won a pretty impressive victory. Even without a serious third-party candidate, he did not get 51 percent of the popular vote. He won 26 states to Romney’s 24 states.

We’re going to see time after time very, very close elections. So I think we need to rethink this notion of mandates, and just say, this person won the presidency. He or she needs to go forward with that agenda.

MR. WESSEL: And what about the Republicans? Are they going to do a big rethink here?

MR. BABINGTON: Yes, they are, more than one. It was interesting that the Republican governors happened to be meeting this week in Las Vegas when this news about the interesting comments that Romney made to his donors that we just saw. And the Republican governors, Bobby Jindal of Louisiana in particular, did not miss five seconds before they really denounced what Romney was saying.

The Republicans have a lot of things to think about, not the least of which is their growing problem with Hispanic voters, which that is the big growing group in this country. Republicans are still largely a party of white people and older white people. And that group is getting smaller and smaller.

They haven’t figured out what to do yet, but they do know that talking about the people who might – who vote against you, whether it be the 47 percent, or they just like to get gifts is not the best way to get started.

MS. COOPER: So, Chuck, you’re President Obama now and you have a second term. What’s at the top of his agenda? What does he – and, you know, how does he prioritize what he’s going to do?

MR. BABINGTON: Well, first, obviously, the fiscal cliff that you’ve been talking about is the big thing on his plate now and it will determine so much about what happens after that.

But I think the big possibility that could sort of rival health care, which was the big accomplishment in the first term for all the problems that – but he did get that law, would be immigration reform. He talked a good bit about that in the news conference. It would be a big, big achievement that past presidents have not been able to do.

One thing that might help is because of the political reasons we’re just talking about, Republicans might start getting on board. We’ve still got a lot of details to go, but that might be the big new goal for that term.

MS. RADDATZ: Chuck, what President Obama will we see in this second term? I mean, he’s criticized sometimes for being cool and remote, reaching out this weekend, which one?

MR. BABINGTON: He’s still no-drama Obama. So I don’t think you’ll see a change in personality. One thing he has learned and we’re seeing it now in the fiscal cliff, don’t sit back and wait for Congress to – that happened early on the health care negotiations that cost him all kinds of trouble so now he can be getting out front. He could be more assertive.

MS. IFILL: That’s assuming that Israel and Hamas don’t blow each other up in the weekend and then another distraction ends up on the presidential plate. That happens in second terms too.

Thank you everybody. We have to leave you now, but the conversation continues online on the “Washington Week Webcast,” where among other things, we’re going to talk about the stories we’ve covered this year that made us the most thankful. Keep up with daily developments – they didn’t know that – keep up with daily developments with me on the PBS “NewsHour.” And we’ll see you right here again next week on “Washington Week.” Have a wonderful Thanksgiving. Good night.