GWEN IFILL, WASHINGTON WEEK MODERATOR: From North Korea to Cuba, from Christmas present to Christmas future -- the last seven days put Dickens to shame.
We explore it all tonight on WASHINGTON WEEK.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They caused a lot of damage. We will respond proportionately and we will respond in a place and time and manner that we choose.
IFILL (voice-over): North Korea threatens, Sony caves -- and the president weighs in.
OBAMA: I'm sympathetic that Sony is a private company, worried about liability and this and that. I wish they had spoken to me first.
IFILL: As terrorism fears shake Hollywood and the nation, the president had been to his Hawaiian holiday with more than a few issues brewing, including the prospect of normalized relations with Cuba.
OBAMA: Today, the United States wants to be a partner in making the lives of ordinary Cubans a little bit easier, more free, more prosperous.
REP. ILEANA ROS-LEHTINEN (R), FLORIDA: The Cuban people are no more free today than they were before Obama's terrible deal.
IFILL: So, after a year filled with accomplishments as well as setbacks, who would want to be president? Well, Jeb Bush for one.
JEB BUSH (R), FORMER FLORIDA GOVERNOR: Don't be afraid to shake things up, and don't be afraid of change, especially in your own life.
IFILL: We examine the lame duck meme, and the potential for an extended Bush/Clinton dynasty, with the reporters covering a remarkable week: David Sanger, chief Washington correspondent for "The New York Times", Tom Gjelten, national security correspondent for NPR, John Harwood, chief Washington correspondent for CNBC, and Karen Tumulty, national political correspondent for "The Washington Post."
ANNOUNCER: Award winning reporting and analysis covering history as it happens, from our nation's capitol, this is WASHINGTON WEEK with Gwen Ifill.
Corporate funding for Washington week is provided by --
ANNOUNCER: Funding for WASHINGTON WEEK is also provided by the Annenberg Foundation, the Corporation for Public Broadcasting and by contributions to PBS stations from viewers like you. Thank you.
Once again, from Washington, moderator Gwen Ifill.
IFILL: Good evening.
President Obama and FBI both pushed back at the North Korean government today, elevating what had been a Hollywood story of packing a terror threat into an international standoff. The spark improbably was a Seth Rogen movie, one that fictionalized the assassination of Korean leader Kim Jong-un.
By today, the motion picture was yanked from theaters -- a decision the president was wrong-headed.
(BEGIN VIDEO CLIP)
OBAMA: We cannot have a society in which some dictator someplace can start imposing censorship here in the United States. Because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they will start doing when they see a documentary that they don't like, or news reports that they don't like.
(END VIDEO CLIP)
IFILL: Strong language that springs from years of confrontation with an isolated nation that has long posed a regional and global threat. Now, it's a cyber threat that some dictator someplace, as the president put it, is posing, David.
DAVID SANGER, THE NEW YORK TIMES: Well, that dictator was supposed to be the subject of a movie that somewhat crudely and many would say rudely posited his assassination. But, you know, Gwen, whenever we have been on the show before and we talked about North Korea, it's always been about the threat of their nuclear arsenal.
SANGER: So, the whole idea that they are at once isolated, Stalinist, disconnected from the Net, and yet able to pull off what was clearly one of the most sophisticated cyberattacks the U.S. has ever seen and the most destructive one we have seen on American soil is pretty mind-blowing.
IFILL: Isn't that where the world is now? Where the big -- it's not the biggest threat, it's not the bloodiest threats, because we have seen other threats which came to fruition this week which were bloodier, but certainly just as scary, these cyber threats. Isn't that where we are now?
SANGER: Not only just as scary but a lot more useful than nuclear weapons or even conventional weapons. Nuclear weapons have an on/off switch. Once you've launched it, you can't sort of judge how big the explosion is going to be and you know what the retaliation's going to be.
IFILL: Plus, North Korea has some trouble getting those rockets.
SANGER: They do. And, you know, you're usually safe to stand wherever they're aiming.
SANGER: But in this case, their aim was pretty good. And cyber weapons sit on a rheostat. You know, you can turn it up and down like the heat in your home.
And in this case, North Korea went quite brilliantly inside the computers of Sony Pictures. Sony was completely unprepared for this. They pulled out full movies that had not been released, which astoundingly were unencrypted. They pulled out the salary levels of many of the Sony executives, proving once again everybody at this table went into the wrong business. And they pulled out, you know, nasty notes about Angelina Jolie.
But what was really important about this was they also wiped the hard drives, did a destructive attack. And it's that and the threat on theatergoers that turned this from a corporate attack to a national security.
KAREN TUMULTY, THE WASHINGTON POST: So, how -- how do we know that it was the North Koreans and not, say, a bunch of disgruntled Sony employees? And how do we know they did it by themselves?
SANGER: Karen, we don't necessarily know they did it by themselves. They may have gotten some outside help. Though the president interestingly said today he didn't think any other country was involved.
IFILL: But he didn't say a non-state actor.
SANGER: He didn't say anything about non-state actor. And you would think that's sitting in Pyongyang, you might not know that the way you drive studio executives crazy is to release their salaries. But in any case, that's what they ended up if you believe the FBI doing.
Your question, though, is just the right one. What the FBI turned out was evidence that these tacks were similar to some other attacks that were believed to have been done by the North Koreans, including one on South Korean banks and media last year. But they didn't reveal what I suspect is the strongest evidence, which probably comes from classified monitoring systems.
TOM GJELTEN, NPR: David, one of the things you and I and others have heard before is that actors with the capability to carry out a massive cyber attack don't have motive and that actors with the motive probably don't have the capability. Do we now see an actor with both the capability and motive to really carry out a devastating attack on the United States?
SANGER: Well, they certainly had the motive because they declared that this movie intended as a comedy was actually an act of war. The capability I think surprised a lot of people in the U.S. government. And whether attacking Sony is the same as being able to bring down the electric grid or telecommunication systems, we don't know that. But it's one of the things you have to worry about when you think about what the American response could be.
JOHN HARWOOD, CNBC: David, on the response, the White House said they would respond in a proportional way. What is that, if it's not the North Korean film industry, which I don't think is a big, fat target? What is the option -- what are the options for the United States to do? Is there any danger of escalation?
SANGER: Well, there certainly is danger of escalation. You know, in the old nuclear world, people used to talk about making sure you had something called escalation dominance, that you could control escalation. Not clear in cyber necessarily you can do that.
In this case, the president would seem to have ruled out, say, bombing North Korea. But I could imagine financial sanctions. You could even imagine counter cyberattacks, but again, you're into that escalation problem.
IFILL: Well, and you're also into the problem of years trying to deal with North Korean leaders who just don't respond to the normal pressure, levels of pressure.
SANGER: That's absolutely right. So, that makes you wonder, would more financial sanctions even be effective?
IFILL: Exactly. OK. Thank you, David.
Five decades of ice cracked this week as President Obama announced he would restore diplomatic relations with Cuba, setting the stage to heal and economic, hemispheric and political fracture so deep that it took the pope's involvement to bring it about. Few noticed when the president shook hands with Cuban President Raul Castro there at Nelson Mandela's funeral a little over a year ago. But we now know, 18 months of secret talks led up to this week's announcement.
(BEGIN VIDEO CLIP)
OBAMA: I do not believe we can keep doing the same thing for over five decades and expect a different result. More moreover, it does not serve America's interest or the Cuban people to try to push Cuba towards collapse.
(END VIDEO CLIP)
IFILL: Staunch anti-Castro activists, including some members of Congress, are not persuaded.
(BEGIN VIDEO CLIP)
SEN. MARCO RUBIO (R), FLORIDA: This entire policy shift announced today is based on an illusion, on a lie -- the lie and illusion that more commerce and access to money and goods will translate to political freedom for the Cuban people.
(END VIDEO CLIP)
IFILL: Tom Gjelten is author of "Bacardi and the Long Fight for Cuba", the book that taught me everything I need to know about Cuba.
What do the president's actions do immediately?
GJELTEN: Well, as you say, he can establish diplomatic relations. There is no question about this. That is squarely within the authority of the executive branch.
Now, Congress, you know, can quiver about how much money is spent on an embassy or, you know, the ambassador. But he clearly can do that. Then, there is the issue of the embargo, which prohibits certain things.
But it often prohibits things in kind of general way. For example, it very much limits travel to Cuba with certain exceptions. Well, the executive branch can say what those exceptions are. So, by making a lot of exceptions, you can undermine that aspect of the embargo.
Same thing, for example, with financial relationships. The embargo says financial institutions are very limited in what they can do with some exceptions. And again, the president can fiddle with those regulations and make it possible, for example, for people to use credit cards in Cuba.
So, even though there is an embargo in place, there's a lot that the president or any president can do to undermine it really.
IFILL: Is the big difference here the presence of Raul Castro, even though he's in his 80s as well, instead of Fidel Castro?
GJELTEN: I think that's a huge difference, Gwen. You know, Fidel -- when I was working on this book, I found a quote from him from 1961 where Fidel said, "A revolution cannot survive without an enemy in front of it." And that really was his guiding thought for many years. He had this existential need, or he thought Cuba has this existential need for the U.S. to be an enemy.
Raul is more pragmatic. There are certain things he wants to do. He's willing to sort of take a risk, and it is a risk, a political risk for Cuba.
IFILL: For him?
GJELTEN: Yes, for the regime, to not have the United States as its enemy anymore.
HARWOOD: Tom, one of the critiques of this from Ileana Ros-Lehtinen, who we saw in the setup, from Marco Rubio and others, is that the president got a bad deal. He was fleeced in the deal. What is the right way to think about what the United States gave and what we got and what's reasonable to expect?
GJELTEN: John, this really was a unilateral deal. I mean, there's very little that you can see that Cuba gave. I mean, Raul Castro came out and said, we are still going to have socialism. We didn't have to give up any of our principles.
But one thing that they did give up, which is, you know, what Gwen just asked, is this idea of the United States as enemy. And now, they are committed to a collaborative relationship with the United States which could be politically awkward. But --
IFILL: They gave up Alan Gross.
GJELTEN: There was a prisoner swap there that they -- they saw that as a prisoner swap, not as something that's really recession on the part of their system.
SANGER: Tom, the president referred to two other cases of American engagement with former adversaries. He named China, where again the concept was if you engage them, you can change them and Vietnam.
Now, in China's case, you could argue we have not changed the Chinese as much as we thought we would. Vietnam, harder case.
When the Castro brothers look at those two examples, what lessons do they draw?
GJELTEN: Well, there's more political freedom in China by a long shot then there is in Cuba. So, I think there's always a wariness about the China model. Vietnam is less democratic and I think that might be of the two of the more likely options.
The one thing is that President Obama has basically laid out this idea, as you say, that engagement will actually produce democracy or lead step by step to democracy in Cuba. And I think that is the questionable thing. Fifty years of isolation did not do it, he said.
Well, you can also make the argument 50 years of engagement with Cuba on the part of every other country on the planet hasn't made any difference either. So, you can look at it either way.
TUMULTY: What about the domestic politics of this? We heard nearly everybody being talked about for the Republican nomination in 2016, with the exception of Rand Paul coming out against this. It used to be that going soft on Cuba was essentially surrendering Florida, a key swing state in an election. Is there a new calculus out there?
GJELTEN: There is a new calculus, Karen. I mean, the percentage of voters in, as you know, percentage of voters in Florida, Cuban-American voters who voted Democratic, has gone up and up and up. And President Obama got more of those votes than his Democratic predecessors have.
There's also I think still a feeling among a number of Cuban-Americans, not the ones in Congress necessarily, that may be this will be a way to work for more democracy in Cuba.
TUMULTY: And they're younger.
GJELTEN: They are younger. And if you really get involved, if you really take advantage of the leverage that you would now have, maybe you can produce it. So, I do think --
SANGER: Generational change.
GJELTEN: There is a big -- and also a chronological -- don't know if it's chronological is the right word, Cubans that arrived in the last 25 years have a much more nuanced view than Cubans who came 50 years ago. So, that's also an important difference.
IFILL: Thanks, Tom.
The president's actions on Cuba are only the latest in a remarkable robust year-end push from the White House.
WASHINGTON WEEK contributing correspondent John Harwood is here with the "Friday Focus".
OBAMA: Today, the United States of America is changing its relationships with the people of Cuba.
HARWOOD (voice-over): The president's move on Cuba this week stunned Washington and the world. But no one should be surprised by his approach to his job this year. He declared it plainly back in January.
OBAMA: I've got a pen and I've got a phone. And I can use that pen to sign executive orders and take executive actions, administrative actions that move the ball forward.
HARWOOD: In a State of the Union Address, he announced executive action to raise the minimum wage for some federal contractors.
At the United Nations, he rolled out one of several moves to curb climate change. Last month, after Congress failed to act on immigration reform, Obama kept his promise to act himself. His directive shielded millions from deportation if they paid back taxes and pass background checks but does not provide a path to citizenship.
OBAMA: There are actions I have the legal authority to take as president.
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president is taking actions that he himself have said are those of a king or an emperor. Not an American president.
HARWOOD: So, when the president spoke on Cuba, his go-it-alone approach was as familiar as the Republican outrage.
OBAMA: Neither the American nor Cuban people are well-served by a rigid policy that's rooted in events that took place before most of us were born.
RUBIO: It is just another concession to a tyranny by the Obama administration.
HARWOOD: On Cuba, like his other goals, Obama can do a lot more with Congress, but he's decided some progress on core priorities is better than none.
IFILL: Nothing like that pen and that phone, John.
So, is this a new muscular action that's a brand-new thing for a president? Or is this something that's always been done?
HARWOOD: Well, it's always been done to some degree. Bill Clinton towards the end of his administration enacted executive orders and regulations that protected a lot of environmental -- took a lot of environmental measures, ergonomics to reform the way workplaces function and physical condition for workers.
President Bush, like every president on foreign policy, made his great mark with the wars in Iraq and Afghanistan. And that's something presidents have a unique capacity to do. But I think what is different here is the scale of what he's doing on two big domestic policy issues that have been very difficult to legislate.
IFILL: And now foreign policy issues.
HARWOOD: Correct. But on climate, he's using the EPA to do something he couldn't get through Congress and on immigration, he's taken a substantial step towards a priority that he and President George W. Bush shared could not get through.
And so, the fact that on both of those issues, Cuba's a little different case because as Tom said, the president's power to make foreign policy and engage in diplomatic relations, I think it's greater exercise of executive authority than we have seen.
TUMULTY: So, what's left? I mean, are there going to be more of these? And what shoes do people think are likely to fall?
HARWOOD: Well, I think especially on the environment, the president, he has continued to look at different ways, methane gas, other regulatory steps that he could take to achieve the commitments that he agreed to with China, for example, on climate and the attempt to get a global deal on carbon emissions. I think that is one.
I think the president in part he's got to focus on how to make these withstand legal challenge because certainly you're going to see legal challenges and a subsequent president can reverse them. President -- Congress and President Bush reversed President Clinton on the ergonomics order.
GJELTEN: How does that play out? I mean, you've got the president and you've got the Congress. What's the -- what's the scenario where they actually go to court, so to speak?
HARWOOD: Well, you're going to have industries and businesses, utilities, suing over the limitations on carbon that are being imposed. And if the administration cannot craft a sound legal basis that allows that to withstand pressure, especially as long as the Supreme Court is tilted towards Republican appointees as it is, that's going to play out and probably won't be completed during his presidency. But that's a legal challenge that will play out over long term.
SANGER: John, "The Washington Post" said the president had the worst year in Washington. But could you argue these kinds of actions, if he carries them forward to the next two years, can actually create you any kind of legacy?
IFILL: Maybe lame ducks are dead.
HARWOOD: Absolutely. I would argue it refutes that idea. Because if you look at the substance, remember the president ran for office to do things. If you look at the things he attempted to do -- immigration reform, accomplished big swath of that this week. Climate change, got something done. Health care law, rocky roll-out last year but it had a successful close to the initial enrollment, had a lot of people and they're continuing to make progress there.
So, substantively, the president had a pretty good year.
IFILL: OK. Well, thank you for that "Friday Focus," John.
Finally, how is this for change of pace? Little 2016 politics. Republican presidential hopefuls like Marco Rubio who we saw and Rand Paul staked out opposite arguments on the Cuba debate. Ted Cruz and Paul Ryan weighed in as well.
But all eyes were on former Florida Governor Jeb Bush, who confirms he's thinking about actively exploring, thinking about running for president, which sets us up for the year of the dynasty, with Hillary Clinton dominating the Democratic speculation and Bush on the other side.
Bush/Clinton, where have we heard this before, Karen?
TUMULTY: What do you mean? If they both get their nominations, it would have been 24 years over the last Bush and Clinton race.
IFILL: Oh, well, in that case is, let's try it again.
TUMULTY: Actually, it's interesting. I went back and did the math. If you are 38 years old or younger, you had lived through only one national election in your lifetime where there has not been a Bush or a Clinton and/or a Clinton either running for president or on the ticket as vice president.
IFILL: That means none of us remember. We're all 38 and younger. Yes, I saw that coming.
TUMULTY: So, you know, it's just really extraordinary the degree to which these two families have come to dominate politics in a country that after all what's founded by -- over shaking off a monarch.
HARWOOD: Karen, what do you -- what is your actual assessment of the underlying strength of those two dynastic candidates? On the one hand, you could say, Hillary Clinton, she'll be fairly old. She could be seen as yesterday's news. It's not exactly change in a new direction. Jeb Bush hasn't been on the ballot a long time. He's got the Bush overhang.
IFILL: Fairly old -- I might add, also fairly old, if we're talking about age.
HARWOOD: Sure, fair enough. Are these actually powerhouse candidates or do you see flaws there?
TUMULTY: You know, having these names gives you a big head-start because it gives you name recognition, it gives you money, it gives you organization and it gives you a really big base of people who are ready to go out and work for you because they have been attached to your family for a long time.
But it can't -- as Hillary Clinton learned in 2008 -- it can't overcome what is basically a weak message or weak candidacy. And there are some disadvantages there too, as David Axelrod, President Obama's strategist, said to me, you're driving a used car. I mean, somebody else may have put the dings in this car but you've still got to drive it. Or as George W. Bush used to say, I get half my dad's friends and all of his enemies.
SANGER: Well, Karen, George W. Bush and Jeb's mother, Barbara Bush, said really there has to be some other families in this country.
IFILL: And then, she's kind of took it back.
SANGER: She did.
TUMULTY: She changed her mind on that.
SANGER: I think somebody may have advised her that wasn't the wisest thing to say before your son announces.
But, what do polls show that Americans think of that?
TUMULTY: You know, at this point, again, these candidates, by virtue of their names, immediately become the front-runners. But let's face it, this country has always had sort of mixed feelings about this. George Washington in his first inauguration was so anxious not to be thought of a king that he wore this old, kind of, you know, brown cloth suit and wouldn't let them call him, as Congress wanted him to, his highness.
But, you know, by the second and sixth president, we've already elected two Adams, I mean, there were Roosevelts, there were Kennedys. There's something magical throughout our history about names like this.
GJELTEN: Karen, we've got yet more Clintons and Bushes perhaps waiting in the rings, right?
TUMULTY: There's yet another George Bush, in fact. I covered the campaign this fall of George P. Bush, who won -- the son of Jeb Bush -- who won Texas agriculture commissioner. It doesn't sound like a big job but he won it in a landslide. He campaigned his heart out.
A lot of people think the big Super Bowl of Texas politics someday will be George P. Bush running for governor against Julian Castro, which is a dynastic name down there.
IFILL: These Texas roots will always show.
This is -- what did this do for other candidates, briefly, who are left out here in the shadows by this huge dynasty? I can name half dozen on the Republican side, couple more on the Democratic side.
TUMULTY: It creates -- it creates a space for being an alternative to this person. And again, Hillary Clinton was almost exactly the same spot in 2008 as she was now. I mean, who would have thought that this -- this guy with a foreign-sounding name who barely entered the Senate could have come from behind and beaten her?
So, again, the name, it creates a space for alternative and also it can't overcome.
IFILL: Nothing is a done deal until it's done. Thank you, Karen. Thank everybody else too.
We're out of time for now but we plan to keep talking online. You can join us there on our WASHINGTON WEEK webcast extra, streaming live at 8:30 p.m. Eastern and all week long at PBS.org/WashingtonWeek.
Among other things, we will talk about the week's other big stories from the secret service to Pakistan.
Keep up with developments with me and Judy Woodruff at the "PBS NEWSHOUR", and just in time for last-minute gift-giving, check out our holiday reading list online. Make your friends and family just a little smarter.
Happy Hanukkah. Merry Christmas. And we'll see you next week with a special year-end wrap-up right here on WASHINGTON WEEK. Good night.