Full Episode: November 11, 2011

Nov. 11, 2011 AT 8 p.m. EST

GOP presidential candidates debate the economic recovery. Rick Perry's memory lapse. Herman Cain's harassment scandal. A Newt Gingrich surge? What's motivating U.S. voters? The potential impact of the Euro debt crisis on America. US. Pete Williams hosts with: John Harwood, CNBC/New York Times; Michael Duffy, TIME; Karen Tumulty, Washington Post; Greg Ip, The Economist.

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Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors.

MR. WILLIAMS: Rick Perry’s oops moment, Herman Cain on the defensive, but pushing back, and what Europe’s debt problem could mean for this nation. I’m Pete Williams in for Gwen Ifill this week. All that tonight, on “Washington Week.”

Republicans gather for another debate with a moment to remember.

GOVERNOR RICK PERRY, GOP Presidential Candidate: The third agency of government I would do away with the education, the, um, commerce – and let’s see – I can’t – the third one, I can’t, sorry, oops.

MR. WILLIAMS: How Rick Perry is trying to turn around his on-stage brain freeze.

GOV. PERRY : I stepped in it last night.

MR. WILLIAMS: While Herman Cain fends off another allegation of sexual impropriety.

SHARON BIALEK, Herman Cain Accuser: He suddenly reached over and he put his hand on my leg under my skirt.

HERMAN CAIN: I have never acted inappropriately with anyone. Period.

MR. WILLIAMS: Are the allegations against Cain affecting his White House bid. We’ll assess the state of the campaign and mood of America one year out from Election Day 2012. And will leadership changes in two troubled European countries help calm the economic storms that threaten to engulf the U.S.?

Covering these stories, John Harwood of CNBC and “The New York Times,” Michael Duffy of “Time Magazine,” Karen Tumulty of “The Washington Post,” and Greg Ip of “The Economist.”

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

(Station announcements.)

ANNOUNCER: Here again, live from Washington substituting for Gwen Ifill, Pete Williams of NBC News.

MR. WILLIAMS: Good evening. It’s probably not a good sign when the reviews of your debate performance focus on the workings of your brain’s prefrontal cortex, but that’s how it went for Governor Rick Perry of Texas. During a Republican debate in Michigan Wednesday night, he fumbled for nearly a full minute trying to remember the third cabinet department that he would eliminate if elected president.

GOV. PERRY: And I will tell you. It’s three agencies of government when I get there that are gone: commerce, education, and the – what’s the third one there? Let’s see – (laughter) –

MR. WILLIAMS: Immediately afterwards, he was clearly mortified.

GOV. PERRY: Yes, I stepped in it, man. Yes, it was embarrassing.

MR. WILLIAMS: And then he promptly flew to New York, hoping to make light of it with David Letterman. John Harwood was one of the debate moderators. John, what was going through your mind, when this moment happened?

MR. HARWOOD: Well, first of all, I was happy because for most of the debate, the candidates had made a very determined strategic decision not to engage with one another. And when you have a debate, you’re hoping to provide something interesting for the audience and we thought we had some good questions for these guys, but they were not engaging with one another. They were giving their typical answers. Some of it was interesting on a policy level, but for viewership, not so sure.

There was also, though, a moment of ambiguity at the beginning because when he failed to get the third item initially. He started chuckling. A lot of people were laughing. I chuckled a little bit. But then it was obvious that he really couldn’t get it and Mitt Romney, over on the side of the stage called out EPA, and Perry repeated it, and I wasn’t sure whether that ended the matter. So I said is EPA what you’re talking about? And he said no. When he said no, then the obvious follow was, okay, what was it? And he couldn’t remember it. And it was mind blowing. I’d never seen anything like that in a debate. I guess none of us have. And – and you know, you knew immediately you at least had something that viewers would remember from it.

MR. WILLIAMS: To say the least. Many people have had an experience like this, where you just can’t remember that other thing. Do you think people are making too much of this?

MR. HARWOOD: I don’t know if they’re making too much of it. It was – because it is a human moment, it sort of has universal appeal and everybody gets a little guilty pleasure out of watching somebody in a high-profile position, especially at a time when people don’t like politicians very much, struggle with that. I, like you, it’s happened to me on television, might happen before the show’s over, who knows? But you know, Rick Perry went into this debate laboring under the presumption of proving that he could compete on a national stage. He entered the race, went to the top of the polls, raised a lot of money, performed poorly in debates, and he started seeing his poll numbers go down. He got very aggressive after some sort of sleep-walking debate performances earlier, went after Romney hard in the last debate. Here he took a little bit of a different tack and he’s going to have a hard time digging out of this.

MS. TUMULTY: But, John, he’s still sitting on something like $15 million, apparently a million of which is about to be spent on Fox News in the very near future. Is he done?

MR. HARWOOD: I would be very reluctant to flatly say somebody’s done if they got $15 million in the bank. Along with Mitt Romney, he’s the only person who’s got resources that way. He has the potential, when he starts not only running positive ads about himself, which he’s been doing in Iowa, but going hard after Mitt Romney to see whether he can take Romney down a little bit, build himself up.

His problem is, though, that his poll numbers have gotten so low – you look at Iowa, New Hampshire, South Carolina – South Carolina ought to be his base. He was in single digits the last number that I saw and that just tells you that his problems are very deep.

MR. IP: John, how did the other candidates react? I mean I think it’s interesting that Romney’s first reaction was to try and help the guy out, but you know, you think about it. This is a beautiful gift to Romney and the others. Are they in fact treating it as such? Are they exploiting it?

MR. HARWOOD: Well, Mitt Romney has been very level in this campaign. He’s performed at a high level in debates. His campaign has run flawlessly. They haven’t made any big mistakes. On the other hand, they can’t make anybody love him. So the self destruction of his rivals is a good thing.

It was a gift to Herman Cain because Herman Cain went into this debate expecting to be the center of attention because of these sexual harassment allegations. We got booed for asking about that. But that story was completely supplanted by Rick Perry. And Ron Paul, his fellow Texan, sort of cracked a joke about it, and said, well you’ve got three departments. I got five. And he held up his hand. I think everybody did have some sympathy for him. Michele Bachmann said afterwards we didn’t like to see anybody struggling like that. But the truth is that’s what debates are about is sort of letting people see who somebody is under pressure, and unfortunately for Rick Perry, it wasn’t a pretty picture.

MR. DUFFY: In previous debates at moments like this Perry’s not performed well, not as badly as he did this week. And there was talk that he might not debate again. Are we hearing that possibility again that he will cease to kind of –

MR. HARWOOD : I think it would be very tough for him not to show up on Saturday night in South Carolina for the CBS-“National Journal” debate. So I would expect him to do that. I do think he’ll be selective coming out of that. The foreign policy debate, which is the subject of Saturday night’s discussion, is going to be challenging for him. That is not home turf for Rick Perry. It’s not home turf for Herman Cain either, as we saw on the debate the other night when we talked about international economic stuff. So I think he needs to show up and show that gags and jokes on Letterman are not his only tool in his toolkit for getting out of this thing.

MR. WILLIAMS: Well, one thing about this debate. Herman Cain was relieved to be asked about the economy this week, but he could not escape questions about sexual harassment and indiscretion during his time in charge of the National Restaurant Association. His latest accuser, Sharon Bialek of Chicago, claims that she asked him for help finding work after she lost her job with the Restaurant Association’s Foundation. She says when they met to talk about it, Cain made sexual advances.

MS. BIALEK: I was very, very surprised and very shocked. I said, what are you doing. You know I have a boyfriend. This isn’t what I came here for. Mr. Cain said, you want a job, right?

MR. WILLIAMS: Cain categorically denied this new allegation, first appearing with comedian Jimmy Kimmel, and then in more forceful terms at a news conference of his own the next day.

MR. CAIN: The fact is these anonymous allegations are false and now the Democrat machine in America has brought forth a troubled woman to make false accusations, statements, many of which exceed common sense. And they certainly exceed the standards of decency in America.

MR. WILLIAMS: So Michael Duffy, what has this done to his support?

MR. DUFFY: Well, it hasn’t helped it and there’s some evidence tonight really for the first time today that Cain is beginning to fall back to the ground in some polls. There were two released today, both of which suggest that he has suffered some damage, not a lot, 5 to 8 points, but that’s not small, and particularly more among women than among men, more among social conservatives than economic conservatives, and across the board among Republicans generally.

To me, the interesting question isn’t so much whether he’s lost some ground, because it’s clear that he has and almost obvious that he would, but why he hasn’t lost more. And I think there’re two reasons for this. One is that he started from a remarkably strong place. You know, the Perry campaign was out in Iowa two weeks ago testing their own problems and discovered that Perry – I’m sorry, that Cain had astonishing favorability rating among Iowa Republicans, in high 80s. People just like his story. They liked his – the way he came in. He wasn’t part of the political process, and so when you start from that high of a base of personal approval, you could lose 30 or 40 points and you’re still okay.

The second reason is how he fought back this week. He didn’t just go on the offense. He attacked everybody. He attacked the Democrats. He attacked his fellow campaigns for leaking it. He attacked the women who were accusing him. And part of – I’m sorry – Cain’s campaign this week really was sort of anti-party, anti-establishment, anti-media, and by the end of the week, he was anti-tort bar. So he’s turned this moment, to some extent, into an invitation to other people who might be angry at the country or the rest of the world to cast their lot with him and join the protest.

MR. WILLIAMS: Is it your sense that this is just sort of soaking in now or have most people make up their minds about it so any further allegations are not going to make any difference?

MR. DUFFY: Two really interesting numbers also on the polls today. One was that 60 percent -- a little more than that -- of all Republicans thought that these allegations made no difference at all and wouldn’t affect their feelings about him, which is fairly high, given the attention it’s gotten. And maybe a more interesting number is that something like 70 percent of people who vote in Republican primary say, and we don’t want you to get out. We may not be for you, but we don’t want you to get out.

MS. TUMULTY: The other surprising figure in the polls today was the re-emergence of Newt Gingrich, who I think a lot of people had sort of left for dead in June. And I was out with him a couple of weeks ago and was surprised to see 400 people show up to hear him at a Chick-fil-A. Is this real?

MR. DUFFY: Well, I think there’s – I think there’s definitely movement in these polls that we saw, as you noted, for Romney. Newt was talking to people over the last week and saying I think my moment’s coming. That’s partly because everyone else had their moment and have faded, so he’s kind of the only one left. He is making a bigger push out in Iowa.

He knows that he has two basic challenges. He has tended so far in these debates, particularly the other night, to do sort of narrow, attacking usually issues that aren’t really that central to the race. And he also knows that he has a habit history – and you know better than anyone – of doing well for a few weeks, and then flaming out, saying something that is just not helpful. So he faces a challenge to seize this moment and then not blow it.

MR. HARWOOD: Well the other challenge, it seems to me, is both with Cain and with Gingrich, you’ve got candidates who have some support – significant support in the polls, more for Cain than for Gingrich, but essentially no campaign infrastructure. So how do you capitalize on public opinion or is the notion that in this age of new media social networking they can get people out without infrastructure?

MR. DUFFY: It’s really interesting, you know. Cain’s ground game in some of these states is little to nonexistent, and his political operation, which is to reach out and talk to people who are important and influential in these states, absolutely nonexistent. He’s able to raise a lot of money, as he’s now saying, in Cain’s case, that he’s raised almost $1 a day since last weekend. On the other hand, there are places he’s not even on the ballot and unlikely to get on the ballot this year. So it is a kind of a little bit of a puzzle that way, able to generate a lot of interest sort of in the blogosphere, but not necessarily --

MR. IP: You’re mentioning that among the people he lashed back were his accusers. And it’s interesting to see him, his proxies, his spokesman going after some of these women, raising questions about their backgrounds. How well do you think this scorched earth policy is working and in particular what happens next with respect to his popularity, especially among women voters?

MR. DUFFY: Yes. I think they made a decision this week that they had to go on the offence or if they didn’t that it just might be Katy bar the door and they might not have a future. That’s a risky strategy. We’re seeing it among women voters. We’ll see if it works in the long run.

MR. WILLIAMS: All right. Thank you and of course Election 2012 is now about a year away, and while the pollsters study what’s on the electorate’s mind, some voters were actually telling us, this week. In off-year balloting in Mississippi, voters soundly defeated a conservative attempt to define a fertilized egg as a legally protected person that would have outlawed abortion and limited some forms of contraception and in vitro fertilization. In Virginia, which Barack Obama won in 2008, the state senate switched control, giving Republicans the upper hand in the legislature and the governor’s mansion. And in Ohio, voters overturned a law that had taken collective bargaining rights from public service union workers. That law had been promoted by the Republican Governor John Kasich, who was pragmatic in the initiative’s defeat.

OHIO GOVERNOR JOHN KASICH: It’s clear that the people have spoken and you know, my view is when people speak in a campaign like this, in a referendum; you have to listen when you’re a public servant.

MR. WILLIAMS: So the governor says the public servants were listening. What were the voters saying?

MS. TUMULTY: Well, the messages, as you said, were so mixed. I think what the public was saying was that this is a time when they’re deeply concerned, but what they’re not ready for is the kind of overreach that we’ve been seeing in some parts of the country, which is what I think they thought the measures to end collective bargaining for public employees in Ohio were. And you know, the same is true with the abortion initiative in Mississippi.

But the fact is we are one year out from this election. It is probably the most difficult electoral terrain that an incumbent president has faced in at least a generation. The country is – in our polling at “The Washington Post,” but elsewhere, the country is deeply pessimistic, deeply polarized, and increasingly has misgivings about Barack Obama and his leadership.

MR. WILLIAMS: One of the things I noted was the voter turnout was especially strong; I guess the highest turnout in Ohio in an off-year election in 20 years. Is that enthusiasm going to carry over next year?

MS. TUMULTY: That’s a very good question because – elsewhere, you saw, for instance in Virginia, that it was actually very low. It was somewhere around 30 percent. And the real question is going to be who the electorate next year is, because Barack Obama’s biggest hope is that he can reenergize his base, that he can bring out some of these electorates that don’t normally vote in high numbers, including minorities and young people.

MR. HARWOOD: Karen, one of the ways that the Obama team wants to energize their base is by scaring voters about Republicans going too far to the right on social issues. For that reason, were Democrats disappointed that the Mississippi initiative went down to deprive them of a bogyman that they could use to try to rally, say, suburban women in other states to say, hey, look at what Republicans will give you if they get in charge?

MS. TUMULTY: Probably, you know, to some degree, if you want to look at three-dimensional political chess, but the fact is this coming year is going to be incredibly negative because the Democrats are saying that, you know, this will not be a referendum, it will be a choice. Well, the way you turn an election into a choice is you demonize your opponent and make your opponent unacceptable.

MR. DUFFY: The Republicans suffered a defeat in Ohio this week on that public employee union vote, but does that mean it’s going to translate into an advantage for the Democrats in 2012 or is that not automatic?

MS. TUMULTY: Well, there was something else on the Ohio ballot and that was a measure – it was largely symbolic – that would turn back the individual mandate that is sort of the linchpin of the president’s health care bill. So it does suggest that this was – again, the public was saying that they thought that what had been done was overreaching, but that did not mean that they are ready to embrace the Obama agenda.

MR. IP: Karen, I think one of the most interesting outcomes is in Virginia. Now, of course, one of Obama’s reelection strategies is to take the purple states that he won in 2008 and strengthen the grip on them. And one of those was Virginia, but now, as a result of the election, Virginia is Republican at all levels of government. What message can we take from that poll in Virginia about Obama’s reelection strategy?

MS. TUMULTY : Well, quite frankly, the Democrats were relieved in Virginia that it wasn’t worse. At least the state senate now is tied and a lieutenant governor breaks the votes. And they do believe that they protected some Democratic incumbents who were in great danger in some parts of the state. But a number of Democratic incumbents were running away from Barack Obama and in fact trying to – trying to warm up and embrace the Republican governor.

MR. WILLIAMS: Well, finally tonight, while this country considers whether to elect a new president, Europe is hoping that new leadership there will help end the financial crisis. In Greece, a new government was formed and hopes of salvaging a plan for bailing out its economy. And Italy’s colorful Prime Minister Silvio Berlusconi agreed to step down, giving investors some confidence that the troubles can be stopped before it goes over a cliff.

Back home, the U.S. Treasury secretary made it clear this week that the Obama administration is not offering any lifelines.

SECRETARY OF THE TREASURY TIMOTHY GEITHNER: It’s already having effect on growth around the world. You know, growth is slower in the United States, slower than it needs to be in part because of the effect of Europe on us.

European leaders gave the ability to contain this. They have the ability to get on top of this. They have the ability to solve this problem. They just need to move a little more – a little more quickly to do it.

MR. WILLIAMS: So Greg, the U.S. message to Europe is basically good luck?

MR. IP: I would say it’s more like God speed. (Laughter.) We are really pulling for you, but there’s not a lot we can do. And the reason is quite straightforward. Europe’s problem is not a lack of money. It’s a lack of political will. And it’s political will on two sides. It’s political will on the part of the weak countries like Italy and Greece to do the tough reforms and the austerity they need to get their fiscal houses in order and restore the confidence of the markets. And then the political will on the part of the strong countries like Germany and of the European Central Bank to reward them then with lend them all the money they need in the event they get cut off from the markets.

What was important about this week is that both Greece and Italy demonstrated they have their necessary political will. In both countries, you had an unpopular government basically hand over power to a government – to a coalition of both sides run by technocrats. This sends a very powerful signal that that will is there for those countries to do what is necessary. But what is still missing is the offsetting signal from Germany, from the European Central Bank, they are now willing to lend as much money as needed to keep those guys in the markets and not cut off.

MR. HARWOOD: Greg, this may be an area where we have bipartisan agreement because the clip that we just played from Tim Geithner saying Europe has the capacity to solve this problem is almost precisely what Mitt Romney said at our Republican debate. Are they saying that because, in fact, it is true or are they saying it because the scope or the problem and the potential consequences are so difficult for American politicians that nobody wants to touch it?

MR. IP: Both I think would be true. Herman Cain’s response was 9-9-9 and let’s keep 60 minutes to the hour. You know, I thought that was an interesting response. Look, the Americans can do two things. Behind the scenes, they have worked with – tried to buck up the strength of the Germans and the French to leverage up their bailout fund, to get more bang for their buck. And then, on the other side, they’ve tried to shoot down some pressure to expand the IMF and have it do the lending. The American’s attitude is you don’t need the IMF. You have the money you need and we’re not going to let you use the IMF as an excuse not to do what you have to do.

MS. TUMULTY: But how exposed is the U.S. banking system?

MR. IP: Well, it’s an interesting question. Europe – U.S. banks don’t own a lot of Italian and Greek debt, but European banks do, and American banks own a lot of debt of European banks, like French banks and German Banks.

MR. HARWOOD: Domino effect.

MR. IP: Exactly. So if Italy goes down, then Europe’s banks go down, and very quickly our banks will be in big trouble.

MR. DUFFY: And there was a brief technocratic moment in Washington on Monday when Senate Republicans suggested, I think for the first time in 10 to 15 years, maybe longer, that they might be willing to consider taxes as part of a budget deal that the Supercommittee is wrestling with. They may not come to an agreement on, but just the mere fact that they were willing to use the T word.

MR. WILLIAMS : Or at least the word revenue.

MR. DUFFY: It came – it may have come and gone, but I guess the question I’m asking you is are you suggesting that if we’re lucky we might get up to the technocratic will of the Greeks and the Italians? (Laughter.)

MR. IP: Well, the lucky thing is that if we don’t we’re probably not going to have to call on the IMF. However, it’s an interesting thing that you raised because yes, you know, the long dynamic has been Democrats won’t cut entitlements unless Republicans raise taxes and Republicans won’t raise taxes. So when Pat Toomey, a member of the committee, put tax on the table, it was – one Democrat, Dick Durbin, said breakthrough. Was it? Well, on a closer examination maybe not because it came with kind of a poison pill. We’ll give you your taxes, but all the Bush tax cuts are not just permanent, we’re going to lower the top rate. I think the question on everybody’s mind, and I suspect even the Republicans’ minds, is this is a good faith offer, or is this a negotiating strategy, so that when the talks fall apart, they can blame the Democrats. And I don’t think anybody’s going to know the answer for another 10 days.

MR. WILLIAMS : Greg, does it appear now that the worst is behind Europe or is – who’s next?

MR. IP: No, I don’t think the worst is behind Europe because in fact next week will be very important. We’ll see whether the markets are satisfied with what the political people in Italy and Greece have done. And remember, Silvio Berlusconi hasn’t left yet. He still has to actually give up power. And we have to see whether the European Central Bank and the others start to make positive noises about their willingness to keep them afloat.

MR. WILLIAMS: All right. That will have to wrap it up. Thank you all very much. What a week. Be sure to check out our “Washington Week” Webcast Extra any time after 11 o’clock tonight at pbs.org. And Gwen will be back next week. In the meantime, from all of us here at “Washington Week,” a special thank you to America’s veterans. I’m Pete Williams. Goodnight.


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