MS. IFILL: The Republican faceoff, plus fact checking the candidates and peering behind the budge curtain, tonight on “Washington Week.”
MITT ROMNEY: Any one of the people on this stage would be a better president than President Obama.
REP. MICHELE BACHMANN (R-MN): We’re going to win. Just make no mistake about it. I want to announce tonight: President Obama is a one-term president. (Applause.)
MR. JOHN KING: Has he done one thing right when it comes to the economy of this country?
REP. RON PAUL (R-TX): Boy, that’s a tough question. (Laughter.)
MS. IFILL: Agreed, Republicans want to be President Obama, unclear who gets to do it.
Some at least are taking aim at Mitt Romney.
TIM PAWLENTY: He was involved in developing and he really laid the groundwork for ObamaCare and continues to this day to defend it.
MS. IFILL: But what’s true and what’s not? Tonight, we give you just the facts. And we explain why a deficit cutting budget deal may be closer than it seems.
BEN BERNANKE: Failing to raise the debt ceiling in a timely way would be self-defeating.
MS. IFILL: Plus, we connect the dots at the Pentagon, from the budget to Libya to NATO.
Covering the week: Dan Balz of the “Washington Post,” James Barnes of “National Journal,” Michael Duffy of “Time” magazine, and Nancy Youssef of McClatchy Newspapers.
ANNOUNCER: Award-winning reporting and analysis, covering history as it happens, live from our nation’s capital this is “Washington Week” with Gwen Ifill, produced in association with “National Journal.”
ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.
MS. IFILL: Good evening. The 2012 presidential campaign finally began to look like one this week, complete with web videos, minor gaffes, and full-fledged candidates debate. It ended pretty much the way it began with Mitt Romney looking like the man to beat, but it also clear he has even more reasons to look over his shoulder. So where does Romney, the frontrunner, Dan, stand tonight?
MR. BALZ: Well, and as you say, Gwen, there’s no more talk about a slow starting Republican race for the nomination.
MS. IFILL: Mostly because we’ve been talking about it like in here.
MR. BALZ: Well, we’ve talked about it for so long, but it’s happening. It’s real. And this was a week that proved that. I think if you’re Mitt Romney or Romney’s advisors, you get to the end of this week feeling pretty good. He had a good debate in large part because his rivals didn’t go after him. He had some awkward moments after the debate, in the couple of days afterwards, a couple of things he said, including “I’m unemployed,” to a group of unemployed people –
MS. IFILL: It was a joke, but –
MR. BALZ: It was a joke, but it was –
MS. IFILL: – awkward.
MR. BALZ: – but it was a little awkward. But nonetheless I think he ended the week where he began it, but with a little more clarity that he is the clear frontrunner or at least the frontrunner.
On the other hand, if you’re Romney’s rivals, I think you come out of this week and say, yes, he is the frontrunner, but he still has real vulnerabilities that he’s going to have to deal with and they will get dealt with before this nomination battle. And – and second that compared to past frontrunners for a Republican nomination, he is nowhere near as strong as others have been.
MS. IFILL: And yet his competitors don’t seem to know quite how to go after him. We saw that with Tim Pawlenty at the debate. We’ve seen it even with Michele Bachmann, who I saw interviewed today and every time she was asked whether she thought what Mitt Romney did in Massachusetts with health care was a bad idea, she wouldn’t say it.
MR. BALZ: Well, there’s two problems. One is generally it is early to go after the frontrunner if you are a relatively, you know, newish candidate. I mean, this is a time when party activists are beginning to pay attention. Most voters are paying very little attention. And to the extent they are, the candidates want to make a good first impression. And you don’t make a good first impression if the first thing out of your mouth is to attack somebody else. So that’s part of the problem.
Specifically with Tim Pawlenty, I think he had a problem this week because he had foreshadowed an attack at the debate over health care, using the term, Sunday morning show on Fox of “Obamney-Care,” which suggested he was going to use the debate to really make a fight over that issue. When he was given the opportunity, in fact given several opportunities to do it, he backed away. And they now believe and recognize that was a mistake. And so later this week, he did go after him.
MR. DUFFY: The other person who got a lot of oxygen this week, coming out of the debate was Michele Bachmann, the congresswoman from Minnesota. Tell us what you make of that phenomenon so far. And is that also possibly good for Romney?
MR. BALZ: Well, let me take the first part first. Michele Bachmann has been steadily moving towards a candidacy. I mean, in so many ways she has been in the shadow of Sarah Palin, but as Sarah Palin has remained on the sideline, Michele Bachmann has come forward. And I think what we saw at the debate on Monday night in New Hampshire, were the attributes of somebody who could become a factor and a force in this campaign. There are still people who question whether she can go the entire distance, but she showed in that debate she has personality. She has some magnetism. She has a personal touch with people. And all of those – and obviously appeal to the Tea Party.
Now, for Romney this is very good news because she’s going to be a force in Iowa. And Iowa is the place that Tim Pawlenty has to win if he wants to become the alternative to Mitt Romney.
MS. YOUSSEF: Now, Dan, we saw a lot of candidates on that stage and yet there’re still more names. I remember hearing about Governor Huntsman. Is he still a possible candidate? Could we still see more candidates coming forward?
MR. BALZ: Well, Governor Huntsman, the former governor of Utah, will announce his candidacy Monday at the Statue of Liberty, Reaganesque, at least the symbolic value of that. And he will then go to New Hampshire. And that tells you mostly what you need to know about the campaign. He would like people to think of him in kind of Reaganesque ways. He is staking his claim in New Hampshire. He is going to skip Iowa. The problem for Governor Huntsman, in addition to the fact that he’s not well-known and just came out of serving the president that he would like to unseat –
MS. IFILL: As ambassador in China.
MR. BALZ: – as ambassador in China is that he occupies or seeks to occupy the space that Mitt Romney already occupies. And that is going to be a difficult confrontation that we’re going to see unfold.
MR. BARNES: Dan, what about Texas Governor Rick Perry? He has now said that he’s going to take a second look at maybe jumping into the race. What do you think his prospects would be and do you think he’s going to actually jump in?
MR. DUFFY: I don’t know whether he’s going to jump in. He’s clearly shifted from where he had been, which was adamantly against running. Never would think about it, wouldn’t do it. He’s now thinking about it. His wife is encouraging him to think about it. I still don’t know that he will get in, although there are people in Texas who think it’s almost inevitable. But some of the people closest to him, when I last talked to them, said it’s basically a kind of a 50-50 deal. If he got in, he would appeal to the Tea Party people. He has a strong sort of push everything back to the states, diminish Washington. And he could be a force.
MS. IFILL: Well, let’s go on because in politics it often takes a minute to figure out whether what you’ve heard is true, kind of true, or just not so. And I don’t mean what Dan just said. Tonight, we launch a new feature to help with that. Throughout the campaign, we’ll bring you just the facts from debates, from the White House, and from the campaign trail. Jim Barnes kicks it off for us tonight by casting his gimlet eye on the New Hampshire Republican debate, starting with Michele Bachmann, who had, as we mentioned, the breakthrough night in Manchester. Among her claims, that the president’s health care plan will hurt the economy.
REP. BACHMANN: The CBO, the Congressional Budget Office, has said that ObamaCare will kill 800,000 jobs. What could the president be thinking by passing a bill like this, knowing full well it will kill 800,000 jobs?
MS. IFILL: Okay, there seem to be two things there, Jim. She said there are 800,000 jobs which will be killed. And she says the president knew full well that that would happen. Are they true?
MR. BARNES: Not really. The CBO report that she cited did not say 800,000 jobs will be killed. What it did say is that the workforce is going to go down by about one half percent primarily through workers who are choosing to reduce their labor. So think of someone near retirement age who’s basically hanging on to their job to keep their company provided health care program. If – under the Obama health care plan, they can qualify for tax subsidies that will then allow them to go purchase their own health care in exchanges, or they can enroll early into Medicaid.
So, you know, those may not be attractive options for everybody. How did we get the 800,000 number? Basically, you take 153.7 million people who are currently employed in the United States, reduce it by half of 1 percent, you get about 770,000 jobs, but it didn’t – but to say that ObamaCare is going to throw 800,000 –or just imply that ObamaCare is going to throw 800,000 people who want to keep their jobs out of work just really isn’t true.
MS. IFILL: It ignores nuance. And this idea that the president knew full well.
MR. BARNES: Well, there’s a little problem with that, as Dan’s colleague, Glenn Kessler at the “Washington Post” helpfully pointed out, President Obama signed health care reform in March of 2010. This CBO report came out in August of 2010, so whether you can accuse the president it doesn’t sound like you can accuse them of premeditated – we’re going to strangle and wring 800,000 jobs.
Now, you know, yes there is uncertainty around health care, but really when you think about it to try to project the impact of it, this is really complex piece of legislation. Over 10 years of the economy, that’s really risky business.
MS. IFILL: Makes for a great applause line, but it doesn’t necessarily square with the exact facts as we know them. So let’s take another look at what the field’s leader, Mitt Romney, had to say about the economy.
MR. ROMNEY: What this president has done has slowed the economy. He didn’t create the recession, but he made it worse and longer. And now we have more chronic long-term employment than this country has ever seen before.
MS. IFILL: Let’s unpack that. Did the president make the recession worse and longer?
MR. BARNES: Well, the problem is – is according to the “Economist,” the recession ended in June of 2009. Now, that doesn’t mean that people who are still losing their jobs aren’t hurting a great deal and there’s an awful lot of pain. But we know that the economy pivots a lot faster into a recovery than employment picks up. Unemployment has increased since President Obama has been president from 7.8 percent when he took the oath of office to about 9.1 percent today. But at the same time, that nonpartisan Congressional Budget Office just came out with a report recently that said that the stimulus package and what the administration has done has probably increased employment by anywhere between six tenths of a percent to about 1.8 percent.
MS. IFILL: One more that we want to look at because apparently there’s something about this debate over the economy that lends itself to oversimplification at best and inaccuracy at worst. This was Tim Pawlenty on Monday night.
MR. PAWLENTY: And this idea that we can’t have 5 percent growth in America is hogwash. It’s a defeatist attitude. If China can have 5 percent growth and Brazil can have 5 percent growth, then the United States of America can have 5 percent growth.
MS. IFILL: Five percent growth, China and Brazil, do they have 5 percent growth?
MR. BARNES: Brazil, for instance, over the last 20 years has averaged about 3.2 percent growth. At times, yes, but not currently. And here’s the problem with that. The U.S. has averaged about 3 percent annual growth since World War II. It’s bounced around – tends to bounce around between 2 and 4 percent. Yes, we’ve had some big periods of growth increases. Right after the 1982 recession, the Reagan tax cuts went into effect. And these are tax cuts that Pawlenty likens to his own that he’s proposing.
But there’s one big difference. Back in the ’80s, the Federal Reserve Board, you will recall, really tightened up – really raised interest rates to wring inflation out of the economy. When the Fed cut those rates, that was like a spring uncoiling, and that really boosted the economy then. We’re in a very different situation right now. The Fed has no room to cut interest rates. They rock bottom if anything they’re going to be increasing them.
MS. IFILL: Well, I hope that it helped a little bit. We’re going to try to keep doing this throughout the rest of the campaign, just kind of holding your feet to the fire a little bit.
So while the presidential candidates were sorting all of this out, the painful business of governing by negotiation – you know, actual governing, it was underway in Washington.
REP. ERIC CANTOR (R-VA): What we’re about in this house is trying to exhibit real leadership. And what the president I think needs to understand is economic growth is not a government program.
JAY CARNEY: The end goal is not to simply reduce the deficit and cut the debt to GDP ratio because those are worthy goals in and of themselves. The goal is to strengthen our economy.
MS. IFILL: Now, that’s what was being said in front of the blue curtain or the little White House logo, but guess what, things may actually be moving, it turns out. Michael?
MR. DUFFY: I’m going to say something that most people – people say a lot in Washington. This was a really interesting week in the complex world of debt reduction talks. (Laughter.) And even though we don’t really know what’s going on behind the scenes in these three minutes meetings that took place on Capitol Hill this week between Democrats and Republicans to try to cut $2 trillion, maybe more, out of the budget over the next 10 years. What was going on outside those meetings was like ice breaking, ice cracking for the first time. And let’s just quickly go through them.
You know, really for the first time in 25 years, the American Association of Retired Persons – a group no one at this table, from the looks of it, is even eligible for membership fully –
MS. IFILL: Yes, suck it up. It’s –
MR. DUFFY: – announced that it would be a – very quietly said, we would accept some cuts and benefits paid out under Social Security. This is a huge change, something that has not been possible from AARP’s point of view for years. And really sets the stage, potentially, to return to solvency in that program sometime.
Second thing that happened, more importantly, the Senate voted by a two to one margin to end the subsidy on ethanol, which is a cash payment the Treasury makes to farmers who grow corn that gets turned into fuel –
MS. IFILL: It’s been a great untouchable all this time.
MR. DUFFY: Great untouchable, very controversial program, not so much important with respect to ethanol, but because it put 33 Republicans on the record as saying tax breaks, ending tax breaks, tax preferences, tax loopholes is not the same as raising taxes. That’s a huge intellectual change from what the Republicans really have been saying in Washington about budgets and deficits for 15 or 20 years. It also suggests that maybe other tax loopholes might be repealable, maybe not in the House as quickly as in the Senate, but certainly on the table, and that puts another tens or hundreds of billions of dollars potentially on the table in this deal.
The third thing that happened was more of a thunderbolt from Olympus. Ben Bernanke kind of in a stage whispered to the negotiators on Capitol Hill, said, guys, you don’t have to do this all in one bite. On Wednesday, in a speech, he said, you can maybe do a little now. You can maybe do a little later, in the fall, maybe some next year, but in fact, he said, if you do it all at once, it might be unwise and risky, given how weak the economy is now.
MS. IFILL: Or he’s giving them a way out.
MR. DUFFY: So he’s giving them a way out. So does that mean in three or four weeks, we’re going to be sitting around the table, talking about what a great deal they’ve come up with? No guarantee. But it does suggest that there is an atmosphere of compromise that didn’t exist a few weeks ago.
MR. BALZ: Michael, there’s parameters of how much they’re going to be able to get in terms of deficit reduction. Two trillion seems to be kind of the base at this point, but there’s talk of $3 trillion or $4 trillion. What do you need to do to go from two to three to four?
MR. DUFFY: Right, you have to come up with revenue. The Republicans and Democrats have agreed that $2 trillion is possible over 10 years if we cut stuff, cut farm subsidies, cut defense, cut Medicare, cut Medicaid, other things. To get to $4, you’ve got to have revenue and we’re not going – they’re clearly not talking about raising income tax, but those kinds of tax loopholes, like they did this week on ethanol, other kinds of subsidies for all kinds of economic activities – you know, there’re billions of dollars with the tax breaks that all kinds of people get, big ones like home mortgages, small like commuter subsidies, can now be conceivably addressed, probably not in the next three weeks, but a change in sort of the scale of what they might be able to accomplish.
MR. BARNES: Mike, speaking of the timing, House Speaker John Boehner has said he’d like to get this done – this deal done before July 4th. The administration has obviously sent signals we’d like to get it done, too, before Armageddon comes sometime in early August, but I was talking to a member of Congress this week who said, you know, deadlines are kind of like alarm clocks around here. How realistic is that this deal is going to get done –
MS. IFILL: Like alarm clocks in that you take it, you throw it across the room and then –
MR. BARNES: Or you wake up and say, now, I really have to get to work.
MR. DUFFY: Washington has a huge snooze button. We’re famous for hitting it. And they will hit it again. And the difference between what the markets will accept as a deadline and what Washington and lawmakers will accept is a very big, huge difference. That’s another reason why the Bernanke signal was so important, because he was saying, don’t try to do the big fix now. Take a bit at it. Do this in steps. That way you won’t upset the markets because they’re going to get upset the closer you get to August 2. And we’re six weeks away. They don’t move that quickly. So I think this suggests it will be something smaller, something perhaps more gettable rather than something large.
MS. YOUSSEF: Michael, one name you haven’t mentioned yet is President Obama. Where is he in all of this?
MR. DUFFY: So far Joe Biden is running these talks or at least overseeing them, but Obama did make one – the White House did one quick concession this week and that was they suggested we might be able to – they might be able to do a quick payroll tax extension, which suggests there might be a stimulative kick at the beginning of this as well.
MS. IFILL: You know, Harry Reid was on the “NewsHour” tonight and one of the things he says, there are many bridges to cross. So I get the feeling that he was understating the count.
MR. DUFFY: Long way.
MS. IFILL: Pentagon Secretary Robert Gates is on a farewell tour of sorts and as he heads for the door, he’s weighing in on all the loose ends he’s leaving behind, including U.S. involvement in Libya, U.S. leadership of NATO, and the military budget.
SECRETARY OF DEFENSE ROBERT GATES: Here I would leave you with a word of caution. We must not repeat the mistakes of the past where budget targets were met mostly by taking a percentage off the top of everything.
MS. IFILL: So what is the imprint – the impression that Gates is trying to leave, Nancy?
MS. YOUSSEF: Really what he’s saying is even though there is a lot of talk about budget pressures and the need to make cuts, even though Osama bin Laden is dead, even though we’re drawing down in Afghanistan, he’s saying, don’t attack the defense budget. Don’t look at it as a place where you can make easy cuts and look for quick ways to cut the defense budget. So he’s cautioning against what’s happened in the past.
If you look at the defense budget in real dollars, it’s generally looked like an EKG line, where it goes violently up during war, and then drops precipitously afterwards. And yet, since 9/11 it’s been steadily rising. And we’re now at record level defense spending. And despite that, he’s saying, look at the budget in a smarter way. We live in an uncertain world. And as he’s cautioned, NATO is not spending more on defense. They’re spending less. And so the U.S. will have to still be the world’s policeman.
MS. IFILL: But he’s making that case just at a time when people seem to be losing their patience not only on budget issues, but also on U.S. involvement issues in Libya and Afghanistan.
MS. YOUSSEF: That’s right and two weeks to go in a job where he really had a lot of financial freedom and it wasn’t until the very end that he really faced any financial pressures. Remember, for the last decade, he’s been able to spend quite freely. I think he’s trying to set the tone, though, because his successor, Leon Panetta, is known as someone who’s going to make tough decisions. He balanced the budget the last time it was balanced. And so he’s sensing the climate and he’s worried that a lot of the gains that have been made and the level of sophisticating of the budget will be lost in this effort to just make across the board cuts as an easy way to solve the problem. And he’s saying long-term that could cost the United States more because it has in the past. Most notably, post-Vietnam we spent a lot of time slashing the defense budget and then figuring out how to rebuild the Army –
MS. IFILL: A hollow –
MS. YOUSSEF: Exactly.
MR. BARNES: Nancy, President Obama is going to be making a decision pretty soon about how many troops, how fast to withdraw from Afghanistan. What impact has this budget pressure had on those deliberations?
MS. YOUSSEF: Well, the secretary said during testimony this week on Capitol Hill that because of the drawdown in Iraq and the start of the drawdown in Afghanistan that the United States is expected to save $40 billion. That’s of the $150 some that’s spent now on those two wars. And he’s suggested that that’s going to be one way to see budget pressures go down. But I don’t know that it’s had a wider impact on the discussion of the number of troops. We haven’t heard that in the building yet. The most pressing discussion we’ve heard is how many troops can we cut without losing the very fragile gains that have been made so far.
It’s interesting. There’s one discussion that goes on with those in uniform and those that are in civilian clothes because they’re facing two different pressures.
MR. BALZ: Nancy, many months ago, Secretary Gates kind of opened the door to the idea that the defense budget was not sacrosanct and that they needed reforms and needed cuts. Now he’s warning, well, don’t take me too seriously on that front. Is there a view among military people of kind of what is an acceptable level if defense has to share in spending reductions, what is that?
MS. YOUSSEF: Well, they’re actually trying to find that out. And one of the last things he did was start what he calls a comprehensive review, where the military starts to discuss what kind of strategy can we have under what kind of budget, that the realization that the United States can’t do all things at all times with the same budget, that that’s not sustainable anymore.
So the military is really trying to get at that answer. What the secretary’s really saying is, I’ve taken a low hanging fruit. I’ve cut wasteful programs. I’ve started it, but don’t run amok and start cutting everything. And so there’s an effort to come up with an answer. That review is supposed to come out, the results of that review, this summer. And he’s hoping that that’ll lead to a discussion about what kind of military does the United States want to pay for, what kind of military can it pay for.
MR. DUFFY: The U.S. has four wars underway, depending on how you count: Iraq, Afghanistan, there’s clearly something going on in Yemen, and then of course, this week, we had a little bit of a tempest about whether the president needed to invoke War Powers on Libya. Do you know how much we’re spending on Libya? Can you talk – is it expensive, is it not? What does it cost?
MS. YOUSSEF: Well, I guess it’s your definition of expensive, right? (Laughter.) Up until –
MR. DUFFY: I wondered on the scale of one to Iraq. (Laughter.)
MS. YOUSSEF: Cheap, then. The numbers we heard this week was spend – the United States has spent in the first 60 days $761 million. It’s projected to go to $1.1 billion. A lot of that has been in ammunition because our NATO allies don’t have the ammunition and that’s where a lot of the costs have gone to. Now, again, the United States is spending about $2 billion a week right now on its wars. And so is that expensive over 90 days, it remains to be seen.
MS. IFILL: It’s probably considered expensive by members of Congress if they didn’t get a chance to vote on it, which is what this War Powers Act is all about.
MS. YOUSSEF: Exactly.
MS. IFILL: Okay, well, we’ll pick up where we left off. Thank you, everyone. The conversation has to end here for now, but it will continue online on our “Washington Week Webcast Extra.” You can go online for more information, more insight, at pbs.org. Keep up with daily developments over with me at the PBS “NewsHour,” and we’ll join you around the table next week on “Washington Week.” Happy Father’s Day. Good night.