MS. IFILL: The next big fight: will the government be able to impose strict new controls on the big banks? We talk about that, nuclear politics, Supreme Court politics, and tea party politics, tonight on “Washington Week.”

SEN. HARRY REID (D-NV): Wall Street took advantage of America. It’s now our turn to look at Wall Street, have them contribute to a better America.

MS. IFILL: Sounds simple enough, but a bank regulation bill that seemed like a slam dunk only a short time ago –

TREASURY SECRETARY TIMOTHY GEITHNER: I think we’re very, very close.

MS. IFILL: – has run into a partisan buzzsaw on Capitol Hill.

SEN. MITCH MCCONNELL (R-KY): This bill wouldn’t solve the problems that led to the financial crisis. It would make them worse.

MS. IFILL: Might the same thing happen to President Obama’s eventual Supreme Court nominee or to the plan embraced by global leaders this week to reduce nuclear weapons -- buzzsaws everywhere, much of it building under the tea party flag.

MS. SARAH PALIN: I’m not calling anyone un-American, but the unintended consequences of these actions, the results are un-American.

MS. IFILL: Covering the week: David Wessel of the “Wall Street” Journal, Gloria Borger of CNN, Peter Baker of the “New York Times,” and John Dickerson of “Slate” Magazine and CBS 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. We may be approaching high noon for financial deregulation or, as the Democrats have begun calling it, “Wall Street reform.”

PRES. BARACK OBAMA: It’s no surprise that the financial institutions that profit from the status quo have sent hordes of lobbyists to kill reform. It’s like throwing a piece of meat into a piranha tank. They’re going to race to see how fast they can tear it apart. But we can’t allow them to succeed.

MS. IFILL: Any hope of bipartisanship faded a bit today when Senate Republican Leader Mitch McConnell presented the White House with a solid list of 41 Republicans opposed to the bill in its current form.

SEN. MCCONNELL: Signs we get from the White House is they’re not interested in talking. They’re not interested in making a deal with us. They want to jam through a totally partisan bill.

MS. IFILL: Yet, just today, the Security and Exchange Commission brought civil fraud charges against financial giant Goldman Sachs, boosting the Democrats’ crackdown argument. That’s a complicated fight that turned sharply political only recently when Capitol Hill negotiations broke down. What happened, David?

MR. WESSEL: Well, you’re absolutely right. The big news today was in the courts, where the SEC went and they filed this 21-page charges against Goldman Sachs. It provided us a very convenient narrative. People have been looking for a narrative of what happened here and that people kind of believed Goldman Sachs was the villain. And the SEC today said, yes, they were.

They said that Goldman Sachs had a client, a hedge fund. It wanted to sell something short. They wanted to bet on something going down. That they work with Goldman Sachs to come up with something which was going to go down. And then Goldman misled investors and sold it to them without telling them that it had been kind of preprogrammed to go down.

Goldman Sachs, of course, says that this is absolutely not true and they’re going to fight it. But it does give the Democrats a very convenient whipping horse at this moment to think.

Then, outside the courts, in the Senate, there were two things that really interfered with the president’s hope of getting a little bit of bipartisanship here. One was that the Senate Agriculture Committee, led by Blanche Lincoln, a Democrat from Arkansas, went so far left, so hard on the banks that Tim Geithner, the treasury secretary, is now trying to pull her back. And McConnell, as you say, the minority leader in the Senate, comes up with this letter from 41 Republicans saying, we’re not going to deal with you guys.

But it’s interesting that both the president and the Republicans want to be clear to everybody that they agree on who the bad guys are: Wall Street. The Republican letter says, “we must ensure that Wall Street no longer believes or relies on Main Street to bail them out.”

MS. IFILL: Well, yes, it’s like saying we all want health care reform. I just don’t like the way you’re doing it.

MR. WESSEL: Exactly. But the president and the Democrats had thought that they had maneuvered the Republicans into a position, where at least some of them would feel that being opposed to the bill would be too politically risky. Instead, the Republicans are trying to define it as “we’re not against reform. We’re just against this lousy Democratic –

MS. BORGER: Well, but they’re calling this bill now a bailout bill and that’s a good buzz word if you want to get the public on your side and you want to argue against financial regulation, right?

MR. WESSEL: Absolutely. I mean – so now is – this thing is very complicated and most people can’t understand it. Even some of the insiders can’t understand it. So the labels really matter. So the Republicans want to call this the permanent bailout. They want to associate this with all the things that happened during the financial crisis that are unpopular. The White House now has suddenly started calling it “Wall Street reform.” It’s kind of like they finally figured out that financial regulatory reshaping or something wasn’t like a great sound bite.

MS. IFILL: No, not very catchy.

MS. BORGER: All like a public option.

MR. WESSEL: It’s all like trying to define – exactly, but trying to define the terms in a way that people will side with you, even though they don’t understand anything.

MR. BAKER: Go past the terms to help viewers who don’t have a chance to read the bill, probably will never read the bill. Is this a permanent bailout bill or does this in fact rule out the idea of a bailout?

MR. WESSEL: This is to distinguish it from the members of Congress who are going to read the law.

MR. BAKER: Or the journalists. (Laughter.)

MR. WESSEL: Look, the point of this bill is twofold. One is to make it less likely that we have bailouts in the future. That’s the point of having more rules, more regulations, so we don’t have firms exploiting the cracks in regulation. And the other is to say, when there is a need for a bailout that it’s somewhat more orderly than the chaos we saw last fall.

What the Republicans are saying, aha, you said you want a bailout again. And what Tim Geithner, the Treasury secretary says is, my gosh, haven’t we learned anything in the past couple of years? When you have a panic, it may be in the interest of the public, the taxpayers, and the economy to bail some people out. Do not tie my hands and my successor’s hands – (inaudible).

MR. DICKERSON: We’re in the kind of situation here where we have a complicated bill that people may not understand, rotating buzzwords and Republicans unified against the president. So is this health care act two or it is there are differences in this?

MR. WESSEL: I don’t believe that the Republicans are necessarily going to be united about this as they were in health care. The thing about health care was most Americans felt they had something at stake. Either they wanted to get insurance or they had a preexisting condition or they thought their premium’s too high, or they’re on Medicare. So for them, they were communicating with their congressmen and the congressmen understood and the senators understood a lot of the dynamics of health care. My gosh, we’ve been arguing about this for about 20 years.

This is very new to people. But I think that the reason – there was a bit of a surprise that it looked for a while like there were going to be some Republicans supporting this thing.

MS. IFILL: Like yesterday, it looked like that.

MR. WESSEL: And I think there might be again because the letter doesn’t say we’re going to be against you no matter what you do. The letter’s saying is you’ve got to give us something so that we can say we had an impact.

MS. BORGER: But don’t you think you have a split Republican Party there in the Senate, where you’ve got some moderates like Susan Collins of Maine or Senator Corker, who actually want to get something done, versus those who would rather have the issue and say this is bailout?

MR. WESSEL: I think absolutely because I think that some Republicans are afraid that to say we did nothing on financial reform will be hard to defend in November.

MS. IFILL: Well, it feels like we’re on another slippery slope here, but we’re beginning to see more than simple partisan fights as well here in Washington. The president is developing, I call it a carrot and stick and carrot approach that is perhaps best detected in his foreign policy. As dozens of foreign leaders came to Washington for a nuclear summit this week, the president moved beyond the issues he inherited – Iraq, Afghanistan, and Middle East peace process – and on to the issues that reflect his vision, like reducing nuclear weapons. Did this give him the boost on the world stage, however, that he can’t quite seem to maintain at home, Peter?

MR. BAKER: Well, he’s sitting there, of course, in the conference hall with 46 other world leaders. And any president in that position, of course, chairing such a meeting, is going to look like a man of stature, a man of world leadership, and so forth. And the White House will tell you this is the largest gathering of heads of state by a president since FDR’s – well, of course he didn’t survive, but the conference in San Francisco to create the United Nations.

Now, this was a much less sweeping affair than San Francisco in 1945.

MS. IFILL: In terms of what was accomplished.

MR. BAKER: In terms of what was accomplished and what was aimed at. But – and it’s also a much more technical thing. What are we going to do with the highly enriched uranium? That’s not exactly something that grabs people. And so the president was talking about nuclear terrorism. What happens if al Qaeda gets a nuclear bomb, trying to scare people a little bit into taking action on something he’s cared about even since he was a senator.

MS. BORGER: So what have we learned, though, about Barack Obama, A, on the world stage and B, his foreign policy doctrine?

MR. BAKER: Right. I think you’re beginning to see the beginning of an Obama doctrine, if you will. It’s one that’s more realpolitik than idealistic, although the White House would say there’s idealism still there. He met with people on the sidelines of this conference, a number of bilateral meetings, including with people like Nursultan Nazarbayev. He’s the president of Kazakhstan, a pretty repressive place, but it also has a lot of oil and has a lot of uranium. And they gave up their nuclear weapons after the fall of the Soviet Union. So they were given a spotlight to shine and be rewarded in effect for that and talk of democracy and human rights was left to the private sessions and not emphasized the way it might have been in some other setting.

MS. IFILL: In general why is it that we seem to see him establishing more cordial – if you can call it that – relations with people like President Hu of China and President Medvedev, rather than old allies like Prime Minister Benjamin Netanyahu, who didn’t come to this.

MR. BAKER: Exactly. And that’s a big critique you’ll hear from Republicans in particular that we – President Obama is attacking his friends and making nice with the enemies. And there’s a lot of squabbling in the last few weeks with President Karzai in Afghanistan, with Prime Minister Netanyahu in Israel. And that’s created a really uncomfortable situation for the Obama administration. They’ve now pulled back on the fighting with Karzai. It was just a misunderstanding who – really there wasn’t meant to be a big fight about whether Americans are invaders or not.

With Netanyahu it’s a different situation. They’re still holding firm. And some of the language he used suggested that – he said that blood and treasure, American blood and treasure is at risk with this Palestinian-Israeli conflict, which is a really interesting way of phrasing America’s interests in that region.

MR. WESSEL: Now, of course, Netanyahu is worried about Iran, just like the Obama administration is. With all these bilaterals, did he make any progress on that front?

MR. BAKER: Well, they say that they did. They say that the Chinese and the Russians are both much closer toward agreement on the idea of sanctions, at least. The Russians are more forthright about saying sanctions are needed without saying specifically what they’ll agree to. China is still more skeptical. We’re going to see. The president says he wants this to happen in the next few weeks, rather than months.

It feels very familiar to anybody who covered this, of course, under President Bush, who got three sanctions resolutions, none of which actually changed Iran’s behavior. So the question is not whether they get sanctions, but do the sanctions actually have any genuine bite.

MR. DICKERSON: And what did he actually accomplish in this meeting?

MR. BAKER: Well, I think they got a number of what they call house gifts, individual agreements with different countries –

MS. IFILL: House gifts.

MR. BAKER: – house gifts.

MS. IFILL: Deliverables?

MR. BAKER: – deliverables, exactly. Wall Street reform, public option. (Laughter.) Wording matters, exactly –

MS. IFILL: It does matter.

MR. BAKER: – hope. Ukraine agreed to send back all of its weapons grade uranium. And Canada and Mexico, all these different countries had agreements. Now, the problem is of course agreements only go so far. One of the agreements they signed here is with Russia to get rid of plutonium that they no longer need. I was in Moscow in 1998 when they first made that agreement with President Clinton and President Yeltsin. It’s been 12 years since then. They still haven’t done anything with that agreement. This is the agreement that put in place the agreement they made 12 years ago.

MS. IFILL: And even the START treaty, it has to be ratified by the Senate and there has been some noises that maybe that might be a little more difficult.

MR. BAKER: It could be challenging. The Republicans are still trying to figure out whether they want to attack it for not doing too much or doing too little. It’s a real question there. Some Republicans, conservatives like Jon Kyl, the number two in the Senate, say this may put us at risk. He’s worried that it might make missile defense more difficult to build, even though it doesn’t directly limit that in the treaty. Other Republicans have kind of pooh-poohed in saying, well, it doesn’t really do much more than what George Bush already did in 2002 with the treaty that he signed with Russia. So we’ll have to see how that plays out.

MS. IFILL: It’s been fun watching it all play out. The president’s friends and his foes are waiting to see how another thing will play out; how he will fill the Supreme Court vacancy he was handed last week. Will he use it to address the concerns that have always occupied the court like abortion, school prayer, and the death penalty? Or will he use it to put his stamp on the more recent judgments of the court affecting campaign finance regulations and property rights? And how is that shortlist shaping up, Gloria?

MS. BORGER: Well, at least it hasn’t gotten any longer, this week. There’re sort of nine or 10 names on it and it’s a mix. It’s a mix of some people you would call liberals, some people you would call more moderate, and some folks who’ve been in politics and in public service. So what’s really new and interesting about this out coming fight, in talking to both Republicans and Democrats about it, is that I think we’re going to hear some new issues being talked about because we always have the old cultural issues. This is not to say that they are going to go away. But everybody who’s covered one of these hearings understands that when one of the nominees gets asked a question, “what do you think about Roe v. Wade,” they say, “precedent, I believe in precedent,” and you never get around that.

But there is a new political dynamic. That is, of course, driven by the tea parties on the Republican side. And the question of federal power, what should the government be allowed to do? Is health care reform, for example, constitutional? It’s now being challenged. States rights, property rights – a very, very big issue out West.

And on the Democratic side, you have this Supreme Court decision, which was a five-four decision that gets people at the White House very upset, as you know, which essentially loosened restrictions on corporations and the way they can spend their money in campaigns now.

So those are going to be things that they’re going to talk about in this confirmation hearing on both sides. So maybe it’ll be a little bit different and more interesting for all of us to observe.

MR. DICKERSON: If it’s different, do we think it’s going to be as ugly as we’ve seen before. It’s the fact that it’s an election year, that both sides have constituencies they might raise money from by kind of flaming some of these issues. What’s the kind of pre-game guessing on the (conflicts ?).

MS. BORGER: Well, first of all, obviously it depends on who Barack Obama picks to be his nominee. And –

MS. IFILL: This is why we keep hearing this “wait and see” stuff –

MS. BORGER: – and you talk to people at the White House. It doesn’t seem to me that they are looking for a fight here. It also doesn’t seem – or a huge fight. Doesn’t seem to me –

MS. IFILL: Is this president ever looking –

MS. BORGER: – but he’ll get a fight. He will get a fight. On the other side, in talking to Republicans, it seems to me they want to be able to make their points and they understand that they’re not likely to be able to get enough votes to filibuster because if they wanted to – even though the Democrats don’t have the 60 votes, the Republicans could lose some moderate Republicans, so it’s not likely they’d be able to successfully filibuster a nominee. So what do they want to get out of it? They want to raise money. They want to make their points on these issues that will be very helpful to them in the election – smaller government, less activist judges, et cetera, et cetera. And so take it into the 2010 elections and both sides use it.

And by the way, this is important for a president’s legacy. So let’s not underplay the fact that Barack Obama is going to pick somebody he’s very comfortable with, who he thinks will be an important player on the court in the future.

MR. BAKER: We had a hearing today on one of his lower court nominees, of course.

MS. BORGER: Goodwin Liu.

MR. BAKER: Goodwin Liu for the California Appeals Court. What have learned from that?

MS. BORGER: Well, it was nasty. It was nasty. People didn’t hold back. Goodwin Liu had said some things.

MS. IFILL: His five-year old daughter was sitting there and they were just banging him out.

MS. BORGER: Banging and he had said some things that – he called a little unwise or intemperate or whatever about Sam Alito. Actually Jon – Senator Kyl called him intemperate about Samuel Alito when he was nominated to the Supreme Court. And senators were raising the question of his judicial temperament, okay? And that’s always kind of an unknown. That came up with Sonia Sotomayor, if you’ll recall.

So Republicans were not holding back. I think they were putting down some markers here today, sending a signal to the White House. We may not be able to win this, but we’re not going to roll over either. To go back to your question about whether it will be ugly, I think that that’s going to be a political decision Republicans will have to make, depending on what happens with financial regulation and all sorts of other things because there’s a line – you walk up to that and if you step over it, you can turn off a lot of voters.

MR. WESSEL: So they’re worried – do you think the Republicans worry that they’re against financial reform, they’re against health care, they’re against START, some of the same arguments they make on financial reform – some of them think it’s too much, some of them think it’s too little – they’re against the Supreme Court. Is that a winning argument?

MS. BORGER: Well, Sarah Palin says we’re the party of “hell no,” right? I think they are about to test that strategy right now. And I think there are divisions within the Republican Party about it and some would like to go to mat on everything and some folks say, you know what? We can’t say no to everything.

MS. IFILL: Well, I’m glad you mentioned Sarah Palin because now we’re getting to the next little key here because there’s a backdrop for all of these challenges facing Democrats and Republicans this midterm election year. As David was mentioning, no one in Washington is exactly popular and – (laughter) – that disapproval is showing its face in tea party rallies and already bruising primary battles. Both sides are grasping for advantage.

SARAH PALIN: It is all about this coming November. We have to take the House, then the Senate, and two years from now Barack Obama is a one term president.

PRES. OBAMA: These things go in cycles, the mood of the media and how things get portrayed. And so you’re like a genius for about a month. Then you’re an idiot for about six months. (Laughter.) Then – you know – you’re smart again for – you’re not as smart as you were, but you’re a little smarter than they thought you were. Then you’re an idiot again. (Laughter.)

MS. IFILL: It’s kind of – I want to ask who’s the idiot now, but I can’t do that because that will be too hard. So it’s a seesaw. It’s quite a seesaw.

MR. DICKERSON: Hand out the Dramamine for all of us. Look at where we were 15 months ago, right? The President Barack Obama had won progressives and liberals had the wind at their backs. Conservatives were routed. Tea parties were just what you had with the queen. Now, look at where the energy in politics is. It’s with the tea party movement in the Republican ranks. And the president is below 50 percent in some – in his approval ratings. And the change in the bipartisan – this bipartisanship that he promised, is gone. It’s a partisan town.

And that line he mentioned about being called a genius, this is what he tells his aides. He says, you know, people think we’re geniuses now, but we’ll be goats tomorrow, so let’s be temperate. If they think he’s a genius, that conventional wisdom really is only in Washington, if it exists. If you look out in the country and you look at health care, it’s been a success, certainly a historic success for the president. But if you look at the public opinion, it has gotten worse since the bill passed. His approval rating on the issue of health care has gone down. Numbers are as bad as they were in August. So the country doesn’t think he’s a genius just yet.

MS. IFILL: So the passion is all on the conservative side, or not just the conservatives, but the far edge of the conservative party.

MR. DICKERSON: Well, that’s right. There’s passion in the Democratic Party. They’re happy the president passed healthcare reform. They get angry about the Wall Street bailout bill. There are things to spur Democrats, but it’s not like what’s happening on the Republican side. And I say Republican, it’s really conservative populist and –

MS. IFILL: Who may no necessarily identify themselves by party.

MR. DICKERSON: – well, that’s right. We learned some things about the tea party this week. There was a CBS “New York Times” poll about the tea party supporters. And we learned some things. They tend to be Republicans. They’re extremely white. Almost 90 percent of them are white, 1 percent black. They do not like this president. They don’t – large majorities don’t think he shares the values of this country. Ninety two percent think he’s a socialist. Ninety four percent think they hate the government. But we also learned about attention. They do not like the size of government, but they like social security and Medicare, which are responsible for the size of government and its growth.

MR. WESSEL: So are they good or bad for the Republican Party?

MR. DICKERSON: It’s a mix. They are good. They are good things for the Republican Party. In some races, they’re quite good. They are helping very conservative candidates – Republican candidates to raise money, get a lot of enthusiasm going on. But I talked to somebody in one of these races who’s very involved in one of these races, one of these red hot candidates the tea party loves. And they said, we have to keep our distance for two reasons. One, the tea parties are disorganized and there are some – as in all political parties, there are some extreme people who behave in ways that are embarrassing. And our candidate, this person was saying, we don’t want to have him answer for every crazy person in the tea party movement. And when it gets to the general election and these senate races, we want to appeal to independents and moderates. And a lot of the rhetoric coming out of the tea party movement is not independent and moderate.

MR. BAKER: And who leaves this movement? We saw obviously Michelle Bachmann. We saw Sarah Palin, these sort of disparate elements that feel unhappy with things in Washington. Do they follow anybody in particular?

MR. DICKERSON: Well, the beauty of the movement, in some ways, is it has no leader, which gives you some sense of its authenticity. This is people have real concerns and this is viable and real. But it is very different in different places. And it has no leader. In the “Times” poll, CBS poll, they asked about Sarah Palin, who is in some ways, to the extent it has a leader, the leader. And the plurality, 47 percent or 40 said they didn’t think she was qualified to be president. That’s among tea party supporters. The number’s around 70 percent in the more general public. They have no leader, and so this is one of the questions the movement is at a hinge. There is a movement, but the question is whether it’s going to be channeled through a person. And that’s where we are with that question.

MS. BORGER: But look at the race in Florida, okay? You have Governor Charlie Crist running for this Senate seat against Marco Rubio. He could become an independent?

MR. DICKERSON: Well, Rubio has – where Crist is right now is he’s got two options. He’s going to drop out of the Republican – my reporting tells me – drop out of this Republican race. Why? He’s getting pounded. He used to be up 30 points. He’s now down 20. He’ll either become an independent or drop out altogether and run another day.

MS. IFILL: Okay and we’ll be watching Florida and all those other hot races because it’s not – it’s going to be – it’s going to play out so far outside of Washington and the debates are just beginning. We’ll be following every bit of it. You can follow us, too, our blogs, our stories, our tweets, especially John, and send your thoughts, too, to our website. Just log on to As always, keep up with daily developments on the PBS “NewsHour.” And then join us again next week on “Washington Week.” Good night.