Full Episode: Netanyahu Re-Elected in Israel, Nuclear Talks with Iran, GOP Budget Battles and Big Money in 2016

GWEN IFILL, "WASHINGTON WEEK" MODERATOR: Making deals in politics and diplomacy. Stories from Israel, Iran, and the back rooms on Capitol Hill, and at the 2016 campaigns -- tonight on WASHINGTON WEEK.

(BEGIN VIDEOTAPE)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): Against all odds, we achieved this huge victory.

IFILL (voice-over): Benjamin Netanyahu foils his critics, and vindicates his supporters, at home and in Washington.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Lastly, let me congratulate my friend, Benjamin Netanyahu, on his party's victory this week.

IFILL: But can the U.S.-Israel relationship recover? And might his victory scuttle negotiations to scale back Iran's nuclear ambitions?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our negotiations have made progress, but gaps remain.

IFILL: At home, Congress gears up for another budget battle.

REP. STEVE SCALISE (R-LA), MAJORITY WHIP: Our budget is our vision for how to get the country back on track.

REP. NANCY PELOSI (R-CA), MINORITY LEADER: It's the same old, same old warmed-over stew. It's all I can call it.

IFILL: And, the 2016 campaign heats up behind closed doors, as likely candidates line up to snag the billionaires who might help them get the nomination.

Covering the week -- Michael Crowley, senior foreign affairs correspondent for "Politico", David Sanger, chief Washington correspondent for "The New York Times", John Harwood, chief Washington correspondent for CNBC, and Jeanne Cummings, deputy managing editor at "Bloomberg News".

ANNOUNCER: Award-winning reporting and analysis, covering history as it happens. Live from our nation's capitol, this is WASHINGTON WEEK with Gwen Ifill.

Once again, live from Washington, moderator Gwen Ifill.

(END VIDEOTAPE)

IFILL: Good evening.

This week's big story was about an election that happened on the other side of the Atlantic, but could have immediate impact on all the things you are not supposed to talk about at the dinner table -- war, politics and religion. Israeli Prime Minster Benjamin Netanyahu pulled off a strong reelection victory this week. But that's where the drama begins.

Our friend, NBC's Andrea Mitchell, sat down with Netanyahu after the election. He said the bilateral relationship between the U.S. and Israel is intact even after he defied the White House by delivering a highly controversial speech to Congress.

(BEGIN VIDEO CLIP)

NETANYAHU: We'll work together. We have to. We have our differences on Iran.

By coming to the U.S., I didn't mean any disrespect or any attempt at partisanship. I was merely speaking, Andrea, of something that I viewed could endanger the survival of Israel. I felt my obligation to speak up there. But there are so many areas that we have to -- we must work together.

(END VIDEO CLIP)

IFILL: For his part, President Obama offered what many saw as grudging congratulations on the victory.

So, break it down for us Michael, is there a break here now in the relationship?

MICHAEL CROWLEY, POLITICO: In on some fundamental level, the relationship between the U.S. and Israel is still extremely strong. We send Israel $3 billion a year of military assistance. You know, if it ever comes to a true existential crisis for Israel, we're there to protect them.

But in terms of the government-to-government relationship, leader-to-leader, Obama and-Netanyahu, it's like a totaled car. I mean, you thought it wouldn't get any worse. And then along came this election, where Netanyahu veered to the right to save his hide after he was trailing in the polls, essentially renounced the two-state solution that he had publicly subscribed to since 2009. It has been U.S. policy for two decades, and you know, did essentially what the Washington believes is play the race card in the closing days of the campaign, and, you know, talk about a way to horrify this particular president, took a relationship that was very bad and I think kind of burned what was left of it.

And so, now, the question is, how do we carry on and what are the repercussions?

IFILL: But doesn't Netanyahu think that Israel is already facing an existential threat, that this is not a question of something that’s likely to happen, but it is already underway?

CROWLEY: That's right. I mean, part of the debate about Israel is what are the existential threats, and what are the threats that are not quite as eminent, not quite menacing. I guess I mean that on some level, there's not going to be hostility between the U.S. and Israel where we wouldn't defend them in a shooting war, for instance, OK?

But the question now is, will in the diplomatic arena, will we not necessarily have their back at the United Nations? If they are resolutions condemning Israeli settlement building, like one that the United States vetoed in 2011, we were one of 15 members of the U.N. Security Council to oppose that resolution.

What would we do if there was a resolution setting out parameters for a final peace deal that included two-state solution? What would we do and, for instance, the European Union has talked about imposing sanctions on Israel, to punish settlement construction? How much diplomatic capital will this president expend to defend Israel, in the international arena against growing pressure and anger at Netanyahu’s policies?

JEANNE CUMMINGS, BLOOMBERG NEWS: Michael, on the Democratic front, the other thing that we hear about is this -- the great anonymity between this White House and the ambassador here.

IFILL: Animosity.

CUMMINGS: Yes, animosity.

CROWLEY: Point taken. Ron Dermer who is sometimes called Bibi’s brain is very close to Netanyahu. He’s his man here in Washington. He arranged that infamous speech where Netanyahu came and addressed Congress and the White House was very upset about that.

There are some kind of suggestions around town saying that one way Netanyahu might try to make amends here, is sort of pull Dermer back, you know, throw him under the bus, or is it sacrificial lamb in the sense. I don't see it happening. And, in fact, in general, I mean, it’s sort of case study. Netanyahu is not a guy who retreats. He’s a guy who doubles down. And I think Ron Dermer is going to stick around and continue to drive people in this administration crazy.

JOHN HARWOOD, CNBC: Michael, Netanyahu told our colleague, Andrea Mitchell, in that interview today after that, oh, well, I still support a two-state solution just under different circumstances. The public indication we got was that the White House is not inclined at all to say oh, yes, well, that was a campaign rhetoric at the end.

Do we have any indication of how the president personally feels about it? What he might have said to Netanyahu when they spoke by phone?

CROWLEY: Well, it does not sound like it was a warm phone call. The White House statement, by the way, said that the president didn't congratulate Netanyahu on his victory. He congratulated him on his party winning a plurality of seats in the election. So, boy, that’s not exactly a big high five.

IFILL: That's a way not to say congratulations.

CROWLEY: That’s right. Now, I don't know if the president himself said this, but I did hear from a former administration official that there's a sense that Netanyahu showed his true colors, and those closing days of the election. So, I think some people around Netanyahu would have you believe that he said a bunch of things that would get him reelected. You know, give him a break, it’s campaign season.

But I think people in this administration feel that that was the real guy shining through, we got an X-ray and it kind of confirmed their worse suspicions of him.

DAVID SANGER, THE NEW YORK TIMES: Let's follow that up, Michael. If it was the real Bibi that you saw, what does that tell us about what President Obama can actually accomplish in the next two years with the Israelis on the three big issues that really surround us, which are settlements and, of course, the Iran negotiations but then also the question of whether or not you could send Secretary of State Kerry back to actually try to get a resolution?

IFILL: The real Bibi, isn't it the real Israeli voting population as well?

CROWLEY: I think that’s a really important point, which is to say that Netanyahu won a fairly decisive victory, and, you know, to people in Washington, in the Obama administration, Netanyahu is extremely conservative. There are a lot of Israelis who think that Netanyahu is a little squishy. Sometimes, I think about Mitt Romney having the Tea Party to his right.

You know, his senior defense official resigned during the Gaza conflict, because he wasn't storming into the Gaza with more force. So, it’s very hard, David. And I think the White House is saying they are reassessing all their options. But I don't see a lot of hope for the peace process at this point.

IFILL: Well, at this diplomatic dispute, what Israel is tied closely to the halting and difficult negotiations now underway in Lausanne, Switzerland, about the future of Iran's nuclear program. Netanyahu and many of his U.S. admirers believe nothing good can come of the talks. But John Kerry and his Iranian counterparts Javad Zarif keep offering glimmers of optimism.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: We hope that this is a year that can bring us progress and peace.

JAVAD ZARIF, FOREIGN MINISTER OF IRAN: Thank you, I appreciate that. In fact, Nowruz is the beginning of spring, and in Farsi, it means "new day." I hope this new day will be a new day for the entire world.

(END VIDEO CLIP)

IFILL: It turns out, that's easier said than done, and the external pressure is as difficult as the internal.

SANGER: It is, Gwen. And, you know, from those statements that you just heard -- you heard about the only thing that they agreed on all week. You know, we're down to the wire here.

IFILL: They agreed that spring --

SANGER: They agreed that spring was coming and slightly warmer weather would be in. But, you know, it was John Kerry who stood up in front of reporters in Vienna in November when they extended these talks and said we're getting so close we're not going to need all of the time, I suspect, that we've allowed to the end of March and then a final agreement that they're supposed to reach in June.

Now by the time they all left Lausanne today and they're supposed to get back together again next week, the question is could you even make a March agreement? And if you did, would the Iranians agree to something that was written down and on paper?

Now, think about this. If they say we've come to general agreement but we're not going to tell you what those details are, it's going to be very hard to stop this movement and Congress to try to impose additional sanctions come June 30th.

So, the key here is: first, whether or not you stop Iran's three different pathways to a bomb, uranium, plutonium pathway or just buying one, a covert one, and then whether or not you can solve these differences on how long these limitations on Iran lasts. This agreement maybe as short as 10 years, it could be parts of it could extend out to 15.

And finally, there's a big question about the Iranians insisting that they’d be allowed to do extensive research and development, that would really allow them as soon as the agreement is over, to race ahead in the production and material. Those are all big issues to try to solve in a week.

CUMMINGS: If that’s the case, if they're that far apart, then why did the president make this video that, you know, was intended to be shown to the people of Iraq? I mean --

IFILL: Iran.

CUMMINGS: What is with me tonight?

(LAUGHTER)

CUMMINGS: But the -- some said if he's going to do that, maybe they're close.

SANGER: You know, this video was the president's effort to go above the head of the mullahs and the generals and basically to make a case to the young population of Iran. Almost all of it was geared toward the young. And he said, look, if we can get past the nuclear thing and isn’t going any --

(CROSSTALK)

SANGER: This little nuclear thing, once your past that, there will be visas to study abroad, they’ll be investments. They’ll be jobs. It’s basically saying, you've got a very young population there, entranced by the West, particularly by the United States and it's all on your doorstep, if you can just get around these guys who are stepping in your way for a nuclear program, you may not even really want.

HARWOOD: David, let's assume that these difficult gaps get closed and these difficult negotiations succeed, what are the chances that Congress would then act in some way as to blow up the agreement?

SANGER: Well, this gets just to Gwen's question about the external pressures as well as the internal. So, there are three agreements here that you've got to reach. The first and maybe the simplest is between Mr. Kerry and Mr. Zarif. Then there's got to be one between President Obama and the Congress and as you suggest given the letter that you saw two weeks ago, this could be an extremely difficult proposition particularly once the details are out there.

I mean, Prime Minister Netanyahu was out arguing about a vague concept but it's going to be a lot easier to argue once the opponents say you're leaving them with 3,000 centrifuges? And then, there's a third agreement between President Rouhani and the mullahs. We think that's pretty well wired. But it could come unstuck as well because there are a lot of forces in Iran that dislike this as much as the Republicans in the Senate dislike it.

CROWLEY: What's the Bibi factor? Will it be more of the same or will he be emboldened to speak against the deal even more forcefully, and does that make the nut harder for the president to crack?

SANGER: I think it's going to make it harder because he's got a lot of influence in Congress still.

IFILL: OK. We'll be watching that. It's an amazing story and bit by bit by bit. You'll be in Lausanne next week. So, we'll find out what you think.

Few things give more insight into Washington priorities without the actual prospect of becoming law than partisan budget proposals. Who supports the troops? Who wants to balance the budget, post-haste? Who wants to repair bridges? Who wants to scale back Medicare?

Just listen to the way lawmakers frame all this.

(BEGIN VIDEO CLIP)

SEN. JOHN THUNE (R), SOUTH DAKOTA: It's going to be a budget that balances without raising taxes and it's going to deliver a government to the American people, that is more effective, more efficient and more accountable.

REP. TONY CARDENAS (D), CALIFORNIA: The budget that is being proposed by the Republicans in this House denies dreams, denies food, denies health care to seniors, and many more disasters are in this budget.

(END VIDEO CLIP)

IFILL: All of this tells us a lot about the year to come and about the issues that will come to frame the 2016 presidential campaign.

Let's start with what the Republican leadership would do.

What's their proposal, John?

HARWOOD: Well, the Republican leadership is struggling to come to terms with the reality of the budget cuts that we had over the last several years and bring that into line with their philosophy. One of the reasons that's difficult is the very national security issues we've been talking about. You've got defense hawks within the Republican Party defying what the chairman of the budget committee wanted to do saying, no, we need more money for defense. President Obama has said the same thing.

They won an initial skirmish in the Senate. They added some money for defense. It looks like they're going to add some in the House. We don't know how this is going to play out whether the people who absolutely want any additional spending offset with cuts elsewhere are going to prevail and make it difficult to pass the budget. But more broadly than that, we've seen over the last several years and since they passed several deficit reduction deals, the last one in 2011, we've seen the kind of spending that is politically viable to cut, get cut beyond where Republicans even want to go farther themselves.

So, you have the chair so the appropriations committee who say, no, no, that budget sequestration, it needs to come up. We need to spend more. The people running the budget committee are saying, no, they're not.

What they’re proposing to do is cut deeply into domestic programs that President Obama says are necessary to grow the economy. They're cutting Medicaid which is the health care program for the poor. They're repealing Obamacare. But interestingly, to fulfill their ambition that John Thune said in that clip to eliminate the deficit in 10 years. They're assuming that they -- even though they repealed Obamacare, they still get the tax money that Obamacare was going to raise taxes and they didn’t -- they never quite said how they were going to do that.

And they proposed that because of the tax reform which they also haven't passed. There there's going to be so much of an increase in the economy activity that through what the process they call dynamic scoring they're going to get more money in.

IFILL: So, it's an ideological document. That’s not new.

HARWOOD: It's completely an ideological document with one very practical twist, they want to cut programs like Medicaid and food stamps and other domestic programs. They want to increase defense.

What they don't want to do any time soon is cut Medicare and Social Security, which are the popular programs. So, in the House budget, for example, they do nothing at all for Social Security, called for a bipartisan commission. And on Medicare, they said we want to fundamentally reform the program with these vouchers they call premium support, but we're not going to start it for 10 years. It's something that's not a recipe for concrete action.

CUMMINGS: One other thing that's different is -- you know, we've seen these budgets come and nobody votes on them. Well, they own the Congress now, and so, there's a lot of pressure on them to actually pass something.

And, you know, in the past, the House could pass whatever they wanted because the Senate wasn't going to don't it and the same thing for the Senate and the president's budget went down a rabbit hole. This is different. Where is Boehner? Can he do this with his own caucus? Because clearly this is not one he's going to negotiate with Pelosi to get Democrats to vote for.

HARWOOD: Well, you have to start with a standing assumption that he cannot get it through his caucus because that's the experience that we've had on multiple controversial issues.

And it’s clear that it can get through the Senate either. Remember, you've got several presidential candidates in the Senate, Rand Paul, Marco Rubio, Lindsey Graham, Ted Cruz, they're going to have to accommodate themselves to the eventual shape of a budget. And you've got this intense split between the John McCain and Lindsey Graham faction that wants to substantially increase defense spending and others who don't.

So, it’s difficult to reconcile them. And it doesn’t matter all that much if they don’t pass it because they are still going to have to pass spending bills and those would happen independently.

SANGER: John, what happens to sequester? This was the way that we’re going to cut a little bit of everything in the defense budget, and everybody agreed that wasn't a great way to go about it.

HARWOOD: Well, remember that we had the Ryan Murray budget deal a couple of years ago which increased the sequester caps? But that expires this year. And so, what that means is the caps take effect and the relief that the Pentagon and domestic programs got from that earlier deal goes away. That's why the defense hawks are so upset about it. President Obama has proposed raising the caps for both domestic and defense. The Republican approach is we'll give defense more money and we’ll give less to domestic and it’s not something that appears to be politically tenable.

IFILL: Something that will reverberate on the campaign trail.

We end tonight with our weekly look at the 2016 presidential race, who's running, who's not, and why?

The "why," of course, is often money. Jeanne Cummings reports that -- announced or not -- the big names are already making big bank. Jeb Bush, for example, is going for "shock and awe," as you write, Jeanne.

CUMMINGS: Yes, indeed. He's hoping to raise $100 million by the end of next week. And that would be his first report. This is a tactic his brother used George W. Bush in 2000. He didn't raise $100 million in one quarter. He raised $60 million over two.

But it had an effect. And there were candidates such as Dan Quayle, John Kasich back then and others Senator Lamar Alexander, that were considering races. They looked at that and they said we're not getting in. So, it's very effective in clearing the field of some of his opponents.

So, Jeb now is trying the same tactic. And it -- the world is entirely different and it's not having the same effect.

The interesting thing to note is that that worked for Bush in 2000 and it has never worked since. In 2004, Howard Dean was the money man. He didn't get the nomination.

In ‘12, Hillary Clinton started raising out more than Obama. That didn't work out so well for her. Romney was the run away money guy. John McCain got the nomination.

And then if you look at our last cycle, Romney was well ahead when it came to money, but also nobody quit. Now, why? Internet billionaires, that's it. I mean, Adelson sustained Newt Gingrich's campaign with personal checks for a month.

And that is a new dynamic here and what we see is that, you know, Marco Rubio's got a billionaire in Florida. Scott walker's got a billionaire in Chicago. They're all lining up. They've got the billionaires here and then they'll have their super PAC there. And if you get all the tools together, you can play.

IFILL: Yes.

CROWLEY: How do the Democrats respond to this? And does Hillary Clinton have her own billionaires?

CUMMINGS: I’m sure that she does. They haven't been named yet. But to be honest, the Democrats are mortified at this moment. That may be because they're frozen in place and so they can't really tell what they will accomplish.

But they know -- they don't just have Adelson and these other billionaires and the Kochs. The Kochs are talking about spending $900 million by themselves. So, they've got all kinds of different places where a lot of Republican is going to come at them and they don't have a history. They just don't have the history of playing and raising this kind of money because they're ideologically opposed to it.

And Obama didn't want it. So, Hillary's got to build it and we don't know if she can.

HARWOOD: So, given that a single very, very wealthy do nor can propel somebody even if they don't much popular support, is there any reason to think that somebody on the Democratic side would oppose Hillary Clinton could get a sponsor like that and make a big difference in the Democratic race?

CUMMINGS: Well, theoretically, yes. But you have to have -- you can have that to sustain your campaign operation. But you do have to show other attributes as a candidate. And that's why Adelson sustained Gingrich for a month but Gingrich didn't win. And Santorum, similarly, had a billionaire behind him. Gave him extra time on the trail but he didn't win.

SANGER: Jeanne, what happened to the old theory that it was in hill rip Clinton's interest to not announce for a long time and freeze all the money so that nobody else could get at it. It would be waiting on the sidelines for her to get in?

CUMMINGS: Right. Well, she has accomplished that task. She has no serious opponents against her right now. And I think that the mistakes that her campaign made last week with the e-mail controversy have been a wake-up call that she needs to get moving.

IFILL: And a lot of it doesn't have to do with money when it comes to Hillary Clinton. It's just the elephant in the room. Thank you, everybody. We are done here.

But the conversation, as always, will continue online. Join us on the WASHINGTON WEEK Webcast Extra where we'll talk about the sudden resignation of Congressman Aaron Schock and how he got in trouble because of "Downton Abbey." It wasn't our fault.

You can watch the webcast later tonight, and all week long at PBS.org/WashingtonWeek. Keep up with developments with me and Judy Woodruff over at the "PBS NEWSHOUR", and we'll see you here, next week on WASHINGTON WEEK.

Good night.