MS. IFILL: The sum of our fears: the economy, the political landscape and the dilemma of distraction -- all of our national insecurities on display. We take a look tonight on “Washington Week.” Battles on every side, all on display at a lunchtime presidential news conference. Over the economy –

PRES. BARACK OBAMA: The policies that the Republicans are offering right now are the exact policies that got us into this mess.

REP. JOHN BOEHNER (R-OH) [House Minority Leader]: I think it just shows how out of touch the White House is. The American people are asking the question: where are the jobs?

MS. IFILL: Over the coming midterm elections.

PRES. OBAMA: Between now and November what I’m going to remind the American people is that the policies that we have put in place have moved us in the right direction.

SEN. MITCH MCCONNELL (R-KY) [Senate Minority Leader]: No apologies for opposing the stimulus. No apologies for opposing the healthcare bill. No apologies for opposing what they call the Wall Street bill.

MS. IFILL: And over a sensational and distracting threat from an obscure Florida pastor.

TERRY JONES [Dove World Outreach Center]: We are simply burning a book.

SECRETARY OF STATE HILLARY CLINTON: It doesn’t in any way represent America or Americans or American government or American religious or political leadership.

PRES. OBAMA: We have to make sure that we don’t start turning on each other.

MS. IFILL: We will put the rollercoaster week in context with Jackie Calmes of the New York Times, David Wessel of the Wall Street Journal, Karen Tumulty of the Washington Post and Michael Duffy of Time magazine.

ANNOUNCER: 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. Once again and probably not for the last time the president today tried to shift the national debate back to the issues most Americans say they care about – their jobs, their taxes, their families.

PRES. OBAMA: Now, for all the progress we’ve made, we’re not there yet and that means the people are frustrated and that means people are angry. And since I’m the president and Democrats have controlled the House and the Senate, it’s understandable that people are saying, what have you done?

MS. IFILL: True enough. And therein lies the fight. The president this week said no to extending Bush-era tax cuts and yes to more government spending to stimulate the economy. Here is the Republican response in a nutshell from Congressman Peter Roskam.

REP. PETER ROSKAM (R-IL): We’ve seen where expansive government leads. It leads to a nagging unemployment rate of about 10 percent.

MS. IFILL: It’s a pretty bright dividing line, but one that has not yet seemed to take root in the American psyche or in Washington. So who’s proposing what? And what if any of these ideas are going anywhere? I’ll start with you, Jackie.

MS. CALMES: Well, Gwen, we’ll start with the president. In your intro you said that he said no to the Bush tax cuts, which is true, for the upper income people and yet to more government spending. That’s the perception that he’s been fighting since the original stimulus. What he’s actually proposed is three major steps, two of which are tax cuts for business – mainly corporations – that are geared towards – not only towards trying to stimulate the economy but towards getting Republican votes. Failing that – and most people think he would fail – the Democrats’ calculation is that he would expose the Republican for what they say the Republicans are doing which is being so intent on denying the president any victories that they would even vote against things that they’d been for in the past. And I don’t think anybody thinks – even the White House they’ve now have just – they don’t really think this will happen before the election. And even if it did, you wouldn’t see results. Maybe in a lame duck session but that’s a big if.

MS. IFILL: Okay. Maybe I’m being a little naïve here, David, but is there anything that the Republicans, the opposing party, has to propose or is proposing that might be an alternative to what the president suggests will jumpstart the economy?

MR. WESSEL: Well, one thing they’re saying is it’s a really stupid time to raise taxes when the economy is so weak and it’s an argument that apparently impressed Peter Orszag, the president’s former budget director, wrote an op-ed saying when – if the outcome was we extended the tax cuts for two years for everybody that might be okay.

And they are also, according to voters who think that the problem here is government spending, by saying they would do a very sharp reduction in appropriated spending for things other than security. But it’s not a very well fleshed out plan and a lot of the Republican economists with whom I’ve spoken are a bit concerned that the Republicans are running on a campaign of anti-Obama an angry public, angry for very good reasons, and that may win them control of the House but it doesn’t give them much of a governing agenda. It’s a very different situation than in ’94 when Newt Gingrich took over and really did have a kind of game plan.

MS. IFILL: But how alarming – we’re talking about insecurity and fear tonight. How alarming is it just the idea that so many people, for instance, know someone else who can’t find a job?

MR. WESSEL: Look, I think this is huge. There is just no doubt that the economy is in terrible shape that it’s growing again but very slowly. We have 9.6 percent unemployment. There’s 6.3 million people who’ve been out of work more than six months. Some of them may never go back to work. And I think both the Republicans and the Democrats are sensing that the one thing that people want is somebody who has some assurance that I have a game plan here and they’re both joking for positions.

MS. CALMES: So the question is: did the original stimulus fail and is that why he’s proposing another one now?

MS. IFILL: Right.

MS. CALMES: And I think all the nonpartisan studies, the macroeconomists in the corporate world are all agreed that it helped. Things could be worse. But that’s a heck of a slogan to run on. Now, you quoted Congressman Roskam, the Republican from Illinois, at the outset of the program saying we have seen where expansive government leads. It leads to a nagging unemployment rate of about 10 percent. Well, you know, I’d like David to try to tell me, see if we agree where the unemployment rate would be if you hadn’t done the steps – you know, the Republicans opposed what Obama did.

MR. WESSEL: I think the president’s problem is that he promised people he would get them back to work.


MR. WESSEL: And they’re not back to work. And so the question is, did we need, as you suggest, more medicine or did we use the wrong medicine? And you can do all the counterfactuals and economic models you want but many Americans think what happened here is we had a big stimulus, it was somehow a lot of pork barrel spending to get through Congress. We bailed out Wall Street. We didn’t bail out Main Street. And they want to know where’s the beef.

MR. DUFFY: Today in the press conference there was a kind of undercurrent of questions that essential was – it goes like this: didn’t you try to do too much? Didn’t you just take you eye off the ball when it came to the economy by doing healthcare as well, some other things in the first 18 or 19 months? Do you think at the White House they think that – I mean, they’d never admit it but do you think that they think that did try too much and they should have kept their eye more clearly on the economy now?

MR. WESSEL: I think that some of them do think that. I think the problem was they had a short term economic focus and a very long term focus on things like healthcare and they kind of let the middle part of it take care of itself. They’d hoped by now the economy would be doing better and it wouldn’t need more nurturing, that it would have in Ben Bernanke’s phrase, have achieved escape velocity from government support. It didn’t and now they’re forced to back up and say, oh, we didn’t mean to let you think that we crossed the economy off the to-do list.

MS. CALMES: Right. And we know that the White House Chief of Staff Rahm Emanuel did have qualms when it was clear healthcare was going to be a hard slog and wanted to do the financial re-regulation first. But, you know, to be the devil’s advocate, so they had put in place by the first month in office, February 2009, this nearly $800 billion, two-year economic stimulus plan.

Meanwhile, at Treasury, they’re working on the financial stability plan for the banks and the Fed is doing the monetary policy. So they can do – they can walk and chew gum at the same time so these committees are taking up healthcare and these other things. I think they know that when the results are in in November the big argument is going to be that they overreached, classic, big party takes over Congress, the Republicans have done, Democrats have done it. They overreach. But, you know, the argument as David knows is that for doing healthcare, it’s also a big deficit reducer over a 10-year period. So that’s been their argument.

MS. IFILL: But we’re only a year in.

MS. CALMES: Right. But first it will increase the deficit.

MS. TUMULTY: Well, David mentioned the now famous op-ed that Peter Orszag wrote in the New York Times this week. What he argued was for a two-year extension of all the tax cuts, not so much on policy grounds but just because that’s basically what you can get through Congress, he thinks, at this point. Is there a compromise here because the president was sounding pretty inflexible this week?

MR. WESSEL: I think that’s a bargaining position and one aimed at getting the Democratic base out. I wouldn’t be the least bit surprised if the outcome here is in agreement to extend the tax cuts for a couple of years. The Orszag argument –

MS. TUMULTY: All of them.

MR. WESSEL: All of them. And the Orszag argument was two years and then it’s over. The president has not committed to raising taxes on people under $250,000. Peter Orszag thinks he’s going to have to do it.

MR. DUFFY: It looked like he might have even hardened a little today on that. When you look at the – both parties are trying to maneuver here to keep the voters happy but when you actually look at the polls and ask them, what is it the voters really want the government to do, what’s the answer?

MR. WESSEL: I think we’ve shown that you can’t do economic policy by polls. We asked at our poll, the Wall Street Journal/NBC poll, should the government do more or is the government doing too many things – evenly split, 47 percent.

MS. IFILL: In fact, they seem that they’re evenly split on tax cuts to evenly split on whether the deficit’s more important. But like 40 percent say that President Obama’s policies have made things worse.

MR. WESSEL: Right.

MS. IFILL: That’s where the politics comes in.

MS. TUMULTY: And is that why they were so – nobody in the White House now is willing to put the label stimulus on this latest package of measures? And the president – he was willing to use it as a verb but not as a noun today.

MS. IFILL: To stimulate but not a stimulus.

MS. CALMES: Well, you could argue that if stimulus has become a pejorative, they have only themselves to blame in terms of not selling this argument. I can remember in mid-2009 when the Republicans were already making headway, even as the economy looked and was growing more than it is now, the Republicans had the Americans believing this is a big – $800 billion in spending instead of one third tax cuts. And I can remember Senator Mark Warner of Virginia, Democrat, saying to me, only the Democrats could pass the biggest middle-class tax cut in history and have it be called a spending bill.

MS. IFILL: Well, and that – isn’t that some of the frustration among some Democrats. And even today, when the president was asked questions like this, he gives nuanced, thoughtful answers but they’re not something they can take out and throw like a piece of red meat on the campaign.

MR. WESSEL: Yes, but as Jackie said, the basic problem the president has is his strongest argument is it could have been worse. He talked today in the press conference – we would have had a depression if they hadn’t done all these things. And, as Barney Frank said, House Financial Services Committee chairman and God’s gift to economics reporters because he’s the only one who gives us laugh lines, he said no one ever got reelected with a bumper sticker that said it would have been worse if not for me.

MS. IFILL: Is part of this though also that the nature of this recession is different than what we’ve gone through before? Is that part of the problem?

MR. WESSEL: Yes. It was worse. And we know that recessions that are caused by financial crises tend to be much more dangerous and the recovery more prolonged. The administration knew that. They honestly thought that they had done enough. They misdiagnosed the patient.

MS. IFILL: Which Christina Romer as much as admitted on the way out.

MR. WESSEL: She said it. She said that – one of the things she said to me as she was leaving that she thought that the prudent thing to say is you do this and if you need more, you’ll do more later. It never occurred to her that they would never get another bite of the apple.

MS. CALMES: Right. And in fairness to Christina Romer, when they sat down even before President Obama had been inaugurated as President Obama and they were looking at the range and the economy was worsening by the day, the range was $800 billion to $1.3 trillion, Christina Romer was at the 1.3 trillion end of that scale. So she over – she was way over optimistic on her economic projections but she also had argued for the higher amount.

MR. DUFFY: And is there anything in this conversation that suggests the Republicans have a more cogent approach?

MS. IFILL: That silence.

MS. CALMES: What is their approach? Congressman Boehner, the speaker in waiting for the House, had what he called a two-point plan this week. One, cut spending to 2007 levels, which of course is only spending for what they call discretionary spending which is everything the government does except Medicare, Social Security and Medicaid which happen to be –

MR. WESSEL: And not defense.

MS. CALMES: And not defense. And not homeland security. And then the other thing was freeze tax rates.

MS. IFILL: Okay. Well, there was another revealing moment from the bully pulpit this week – President Obama in Cleveland.

PRES. OBAMA: People are frustrated and they’re angry and they’re anxious about the future. I understand that. I also understand that in a political campaign, the easiest thing for the other side to do is to ride this fear and anger all the way to Election Day. And that’s what’s happening right now.

MS. IFILL: Yes. Oh, yes. Election Day. We were talking about that. Purple states are leaning red and blue states are leaning purple so the president is heading out on the campaign trail to states where House seats, Senate seats, governor seats are slip sliding away from the Democrats. Karen, you were in Wisconsin this week of all places.

MS. TUMULTY: I was in Wisconsin.

MS. IFILL: What did you see?

MS. TUMULTY: And the president was in Wisconsin this week.

MS. IFILL: Yes, he was.

MS. TUMULTY: In fact, the president has been in Wisconsin quite a bit lately. He’s been there three times in the last two months. Wisconsin is a state that I think pretty recently people would not have thought was going to be a problem for the Democrats. It’s been closely fought in the past but President Obama won it by 14 points in 2008 and Russ Feingold, the senator who’s on the ballot this year, this is a state that has not sent anything but a Democratic senator to Washington since its first senator, Russ Feingold, in 1992.

But all of a sudden, Russ Feingold finds himself in the race of his life. And so this state that Democrats sort of thought was going to be their insurance policy is really turning into a bellwether of how bad it is going to be for them in November. And there are two other states that are also like that: Washington State and California. Again, these are Democrats who – Barbara Boxer and Patty Murray who everybody were thinking were going to be their insurance for holding the Senate. And now they’re in races that are really too close to call.

MS. IFILL: If you’re President Obama, you fly to Wisconsin or Washington State or any of these states which are suddenly in flux, do the incumbents greet you at the airport or do they find a way to be someplace else in the northern part of the state?

MS. TUMULTY: Well, in fact, in Wisconsin, Russ Feingold was not there to greet the president, although he says he will be there the next time if it’s at all possible. But his problem, as much as he has been sort of an iconoclast, a real independent thinker, he is being tarred with the same brush everyone else is this year which is, if you’re from Washington, you’re a Washington insider. And that is just about the worst thing anybody could be called.

MR. DUFFY: Is there anything that the president can do to make a difference in these races, especially if they’re not turning to greet him?

MS. TUMULTY: Well, actually, what the Democrats announced this week is that essentially they’re going to try and make it feel like 2008 again. The president is going to barnstorm the country. They’re going to have these gigantic rallies in swing states like Wisconsin and Pennsylvania and Ohio and Nevada where Harry Reid is in the fight of his life. They’re going to do what they’ve calling tele-town halls which are all these events all over the country where the president will speak to his core supporters.

MS. IFILL: To get them to show up.

MS. TUMULTY: To get them to show up because right now what they are trying to do is address this so-called enthusiasm gap. The fact is that most polls show that Republicans are much more excited about showing up in November than Democrats are.

MR. WESSEL: And is this really like 1994 when the Republicans took over or is it different? Is Obama doing something that Bill Clinton didn’t do?

MS. TUMULTY: You know, it’s very interesting. I looked into that this week and I came across a part in President Clinton’s own memoirs where he said that he and his adviser, Dick Morris, had decided that the best thing he could have done for the Democrats in 1994 was actually look presidential. His approval rating was over 50, better than Barack Obama’s is right now. And he tried to resist. And he said, every time I’d turn around, I would find 10 more states on my schedule. And he says that ultimately this kind of campaigning on the part of the president hurt the Democrats more than it helped them because while it made the base excited, it made everybody in the room excited that to the wider audience watching him out there, he was not looking like the president. He was starting to look like just another politician.

MS. CALMES: Isn’t there an argument in ’94 as now that there really isn’t anything – you can’t not say something but there really isn’t anything you can say that’s going to change things when the winds are blowing like this.

MS. TUMULTY: Well, right now, certainly. There seems like there’s nothing they can do to the economy, which is the main problem, to make a difference between now and November. But the president’s in a difficult spot because if he isn’t out there on the road pushing as hard as he can to save these Democrats and if things go as badly as it looks like they might in November, there would be a lot of finger pointing and recriminations the morning after.

MS. IFILL: Is it just me or does this seem like he is using John Boehner’s name, the speaker in waiting as you called him or he hopes he’s a speaker in waiting, the same way that Republicans are using Nancy Pelosi’s name as kind of a slur to get people worked up?

MS. TUMULTY: It’s sort of difficult though because most people don’t really know who John Boehner is.

MS. IFILL: Exactly.

MS. TUMULTY: I heard a number of Democrats raising the question of why he went to Cleveland, the city that John Boehner had been to the week before to respond to John Boehner’s speech, and the question being why is the president of the United States essentially elevating –

MS. IFILL: Or lowering whichever way you look at that.


MS. IFILL: Okay. Thanks, Karen. Finally tonight, there was probably more ink spilled, blogs posted, satellite time booked on one story more than any other this week thanks to a corky Florida pastor who vowed to burn a “Koran,” then changed his mind and to a still roiling dispute about an Islamic Center plan for Lower Manhattan, a debate about Islam expanded to include David Petraeus, Hillary Clinton, Robert Gates, and today, at some length, the president.

PRES. OBAMA: At a time when the country is anxious generally and going through a tough time, then fears can surface, suspicions, divisions can surface in a society. I’ve got Muslims who are fighting in Afghanistan in the uniform of the United States armed services. They are Americans. And we honor their service. And part of honoring their service is making sure that they understand that we don’t differentiate between them and us. It’s just us.

MS. IFILL: It feels like we’ve been having this argument now for several weeks but only this week the president and his folks decided really to engage. Why?

MR. DUFFY: Well, Gwen, time was running out. The pastor from Gainesville had made it clear he was going to start burning books at 6:00 p.m. on Saturday night, on the ninth anniversary of the 9/11 attack. Demonstrations had already begun in Afghanistan on Thursday and U.S. officials were quite concerned about force protection there and other places in southwest Asia. And then the pastor let it be known that someone called him and asked him and invited him to stand down that he might do so if someone from the government and the White House saw its opportunities and Bob Gates put in a phone call and asked him to cease and desist, and he has for the moment, and we can come back to that in a minute. This was to a constitutional question about protected speech, though a lot of people threw that around. You can burn books in this country. You can burn flags. You can burn draft cards if they still had draft cards. It’s –

MR. WESSEL: Why are you looking at me? (Laughter.)

MR. DUFFY: Just – I don’t know. But there is also the national security interest. And without actually pushing one against the other, the government said this is just more important. You have to protect these troops. As the president said, that’s my first responsibility, and they leaned on the pastor. It would have been nice if someone had just said, this is a stupid idea, please stop, but he used a different argument. And as the president said today in the press conference, this is probably – we’ve been through a number of these this summer. This is about the third round of religious intolerance we’ve had, issues rise to the White House level.

Some of it probably has to do with the, as the president diagnosed, the general feeling of fear and discontent and anger in the country. Certainly we’ve been in wars in the area for many years. But I think there’s also a political element about what happened today. There are politicians – Sarah Palin, Newt Gingrich, John Boehner just mentioned – who have drawn a clear link between the “Koran” burning incident, though it didn’t happen, and the mosque building in Lower Manhattan. And though they’re not equivalent in any way, they draw that equivalency.

MS. TUMULTY: Speaking of the Islamic center in Lower Manhattan that would also include a mosque, where do things stand on that? Is that going to happen or not?

MR. DUFFY: Today the president talked about it again for the third time. He was asked directly whether he supported it. You know, he’s been sort of for it in principle and then against it sort of –

MS. IFILL: In practice.

MR. DUFFY: – in practice today. He seemed to move back a slight bit saying, I’m for this. He likened it to building a church or a shul, synagogue there.

MS. CALMES: You don’t think his comment today was even stronger than his original one, I mean in terms of the passion?

MR. DUFFY: I mean, I’d have to really have to match them up word for work. It was certainly in the – he was giving a straight up opportunity to do it in front of a very large group of people in a high-profile setting. So it looked to me like he’d hardened it. But there are increasing concerns about the – I don’t want to say cogency – but the direction of the group and people behind it and whether they can or will stick to their plan. So it’s still unfolding. Having stunt upon stunt this week – Donald Trump offered to buy the site. So –

MS. IFILL: It was a crazy week.

MR. DUFFY: It was just a nutty, nutty, almost by the hour kind of story and it suggested this is not going to go away anytime soon.

MR. WESSEL: You mentioned that tomorrow is the anniversary of 9/11. Has this become a political holiday which politicians have to use to take sides on? Is something changing there?

MS. IFILL: Only in an election year perhaps.

MR. DUFFY: Certainly this year, they’re trying to avoid and that’s probably why the pastor did it. It’s probably why the president’s opponents stepped up their rhetoric about it. It’s certainly the president today made several comments about how this was a time when we should use it as an opportunity to show our tolerance, not just for the purposes of this. He said that our troops who are Muslims but also because it’s something we can take away from 9/11. He called it I think his national day of service tomorrow.

MS. IFILL: Well, we can only hope that this boil, this latest boil has been lanced and then we’ll talk about it again if it hasn’t. Thank you everyone. Keep up with us on FaceBook and Twitter and at and then stay on top of daily developments on the PBS NewsHour. And join us again for our look at what it all means next week on “Washington Week.” Good night.