updated 7/17/2011 12:23:51 PM ET
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DAVID GREGORY:
Joining me now, the president's top budget advisor, Jack Lew. Welcome to Meet The Press.
JACK LEW:
Good to be here, David.
DAVID GREGORY:
Good to have you here. So what is the latest? Have there been substantive talks over the course of the weekend?
JACK LEW:
Well, the latest is that after the meeting on Thursday there have been a lot of conversations within each of the party caucuses, within the House and the Senate. Phone calls and conversations back and forth. That's how the president left it on Thursday. That we'd kind of put all of the items on the table. It was now a question of Congress figuring out what it could do. So I think that-- that will continue over the next-- day or so.
DAVID GREGORY:
But you don't have, as we sit here now, a better sense of what Congress is willing and able to do?
JACK LEW:
I think that what is encouraging is that the leaders in Congress seem to have all agreed that we can't push to a default. That we need to have a path that makes sure that the United States can keep its obligations and pay its bills in August. So I think that there are many conversations going on in order to make sure that that doesn't happen.
DAVID GREGORY:
Well, let me be clear. Is the president's position that he would accept no more than a trillion dollars in cuts if there's no tax increases? Is that the number that he is sort of--
JACK LEW:
--I think--
DAVID GREGORY:
--dealing with in his head?
JACK LEW:
I-- I think it's a little less mechanical than that. The president made clear he wants the largest deal possible. He wants to do the most we can to reduce the deficit. That would be the right thing to do for the American people. He made it clear he's willing to go into areas that he's not in the past been comfortable going into and others'll have to--
DAVID GREGORY:
But he used--
JACK LEW:
--do that as well.
DAVID GREGORY:
--that figure?
JACK LEW:
But he also said that if we can't get the most done, then in addition to extending the debt we should do as much as we can. There are a number of ways to get there.
DAVID GREGORY:
But the--
JACK LEW:
--but we have--
(OVERTALK)
JACK LEW:
--started--
DAVID GREGORY:
--my question--
JACK LEW:
--(UNINTEL) started--
DAVID GREGORY:
--is more (UNINTEL) a trill-- if you get beyond a trillion dollars and he still can't get any tax increases, the president said, "I'm not willing to find something that-- that cuts more spending without having taxes."
JACK LEW:
Well, what-- what-- what the president said was to do major structural changes on the spending side there would have to be tax increases. And I think that one can see a path to getting well over a trillion on things that we should be able to agree to.
DAVID GREGORY:
So if that's something of a fall back plan, because the president wanted something on the order of $4 trillion over 10 years of spending cuts-- Erskine Bowles has told my colleague Chuck Todd, on his program The Daily Rundown-- that that might fall well short of what's necessary here. This is what he said.
(VIDEO NOT TRANSCRIBED)
DAVID GREGORY:
In order, the markets, our creditors are going to look at that and say, "That's not a fallback position. That's well short of what the United States should be doing."
JACK LEW:
I think if you look at what the markets are saying, they're saying two things. They're first saying the United States cannot default. And I think that is the bare minimum. And I say that again only because it has to be clear that there are some extreme views and-- and some places that think that that's something we can do. We can't.
The second is we need to get our fiscal house in order. I think that we've said for some time now, as have most, that we need to do on the order of $4 trillion of deficit reduction over the next 10, 12 years. We would like to get that done now.
If that can't happen, if there's not a willingness to come together, the president has shown he's willing to make the kinds of-- of moves that are necessary to get there. But if there's not a similar willingness, we should do as much as we can now. I think that the markets will understand moving far-- as far as we can. What-- what would be hard to explain is doing nothing.
DAVID GREGORY:
You talk about the perils of default, as has the-- the Fed chief and the president and others-- as a given. And yet look at the polling on this. Even among people who are paying close attention in the Gallup poll, 53 percent-- are in favor of voting against raising the debt ceiling. Do you think that's because there are Republicans like Michelle Bachmann and others saying that this administration is merely selling, in her words, a misnomer that-- that we're headed toward default? Where does that come from? Do you think they actually believed that or you think they're doing that cynically?
JACK LEW:
I can't explain what motivates-- people to say-- say those things. I can tell you the facts are the facts. If we don't raise the debt ceiling-- we won't be able to pay our bills in August. And that has dire consequences. It will, for the first time, mean the United States cannot keep its obligations.
It will cascade through the economy. It will mean that people, regular people, who are buying homes and-- and-- and-- and cars will pay higher interest rates. It means that we will put a cloud over the United States that might not go away anytime soon.
DAVID GREGORY:
Final question. You said this is a question of will, political will. It's also a question of political leadership. This president said back in 2009, economy job one. His responsibility. This is what he said.
[ ERSKINE BOWLES ON TAPE ]
ERSKINE BOWLES:
The problem is, Chuck, that so many people are talking about doing it with just about $2 trillion of deficit reduction. That's not a solution. That's not going to fool our creditors.
[ END TAPE ]
DAVID GREGORY:
Is the president's failed leadership that has brought us to this moment? Does he bear responsibility?
JACK LEW:
I think the president's shown enormous leadership from the first day in office. He inherited an economy where the bottom was falling out. He stabilized it through dramatic actions without which millions of Americans would be looking for work who are working today.
We still had a lot of work to do. The economy is not growing fast enough. We've made a lot of proposals. We want Congress to act on things like trade agreements and patent reform, things that are up there on the hill right now which would help the economy.
We think that it's important to extend the payroll tax and unemployment insurance. And we want to work together on things like infrastructure and other things that are necessary for the future. There's a lot of work to be done--
(OVERTALK)
DAVID GREGORY:
But -- that-- that's a programmed answer. I mean the reality is he said, "My job is to get the economy back on its feet. That's my job." The reality is it's not. And this budget deal has fallen apart. The president's trying to lead but he's not accomplishing it.
JACK LEW:
Well, I-- I think that if you look at where the parties are compared to discussions over the last decades, there are things that both sides are talking about doing that are very dramatic. I think there's still time to get something big done. And the president's made it clear he wants to do something substantial.
When you look in the past at agreements between divided government, it's taken leadership on both sides. It took Reagan and O'Neill. It took Clinton and Gingrich. The president is out there. He's willing to do it. He said it on the State of the Union. He said it in the budget. The question is do we have a partner to work with? And I hope the answer to that is yes.
DAVID GREGORY:
But you suspect it may not be yes?
JACK LEW:
Leadership requires a partner.
DAVID GREGORY:
All right. Mr. Lew, thank you very much.
JACK LEW:
Pleasure.
DAVID GREGORY:
Thank you for your time.
( COMMERCIAL )
DAVID GREGORY:
And the conversation continues. Now joining me, assistant majority leader of the Senate, Democrat Dick Durbin of Illinois and Republican Senator from South Carolina, author of The Great American Awakening: Two Years That Changed America, Washington and Me, Senator Jim DeMint. Welcome both.
SENATOR DICK DURBIN:
Thank you.
SENATOR JIM DEMINT:
Good morning. Thank you.
DAVID GREGORY:
Tim Geithner, the Treasury Secretary, was here last Sunday. I asked him about this ongoing deliberation and he was emphatic about the outcome. This is what he said.
(VIDEO NOT TRANSCRIBED)
DAVID GREGORY:
Senator DeMint, is he right? No alternative but to raise the debt ceiling?
SENATOR JIM DEMINT:
Well, he's probably right on that, but there's only one plan in Congress right now to do it in a way that the credit agencies say won't turn us towards a negative rating and that's to cut cap and balance plan in the house that gives the president the increase in the debt limit, but it does it with those credible, long-term, deficit-reduction measures that both Moody's and S&P have said we have to do or they will lower our credit rating.
DAVID GREGORY:
Well, what-- what is in that? Be specific about what that would do?
SENATOR JIM DEMINT:
Well, it does the three things that we have to do. We cut spending significantly but reasonably in this budget year. We cap spending over the next 10 years to bring us towards a balance. But probably most importantly, and to have any kind of permanent reform, we send to the States a constitutional amendment that would force Congress to balance the budget. Let's let the states and the American people decide. It wouldn't happen until about 10 years out, but it gives us time to fix our tax code, to fix Social Security and Medicare. And that's what we have to do.
DAVID GREGORY:
Senator Durbin, there aren't votes for what Senator DeMint is talking about. That's just a legislative reality. However-- and-- the president made the point, "Look, we don't need a Constitutional amendment to balance the budget for us to do our job." But is he wrong? Maybe you do need something to force you guys to do your job because its' not being done now.
SENATOR DICK DURBIN:
Let me just tell you about the constitutional amendment. It does not have the votes in the Senate. I don't know about the House of Representatives. And this notion that we somehow have to change the constitution to do what we were elected to do is just plain wrong.
The bottom line is those who want to push a balanced budget amendment are saying, "I can't promise you that I won't steal again, but I will vote for the 10 Commandments." That isn't a good, solid approach. I've said through a year and a half dealing with this whole deficit crisis, both at the Bowles Simpson Commission and the Gang of Five, bipartisan efforts both.
And I can tell you the president has put on the table a reasonable-- list of alternatives that can bring us to $4 trillion in deficit reduction and we don't have to wait for the states to ratify a constitutional amendment. Let's get our job done now.
DAVID GREGORY:
Was Senator DeMint, what-- what's going on here? I mean so many people I talk to are frankly disgusted with Washington. You know, you have on the one side people saying that-- that Republicans are-- are just crazy. That they won't negotiate. That they're being unreasonable. That they're denying the prospect of a default. Michelle Bachmann saying it's a misnomer when the Fed chief says it would be economic calamity.
And on the other side you-- you know, you've got Republicans saying, "Look, somebody's got to draw a line in the sand here. It's-- it's the Democrats who have run up-- the debt since President Obama got into office." But the reality is nobody is really willing to compromise and to make a deal.
SENATOR JIM DEMINT:
Well, David, we certainly are willing to compromise. We're willing to give the president an increase in the debt limit. And you'll see the House pass that bill this-- this week. But Senator Durbin and 20 other-- Democrats in the Senator are on record supporting a balanced budget amendment. And that is a place that we have to get to.
But we need to realize, setting all politics aside, that our country is on course for a financial disaster. We can't take another $10 trillion in debt that the president has proposed. So it is absurd to say that we cannot agree that sometime in the next decade that we have to stop spending more than we're bringing in. You'll see in the next week Republicans are more than willing to work with the president.
DAVID GREGORY:
But--
SENATOR JIM DEMINT:
But the only pro-- proposal that the president has sent to Congress, David, is a budget that increases the debt another--
DAVID GREGORY:
All right.
SENATOR JIM DEMINT:
--$10--
DAVID GREGORY:
But-- but--
SENATOR JIM DEMINT:
--trillion.
DAVID GREGORY:
--Senator DeMint.
SENATOR JIM DEMINT:
Not the--
(OVERTALK)
DAVID GREGORY:
Let's be realistic. Bottom line here. If a balanced budget amendment is not passed, which it-- you heard Senator Durbin say it's not going to be passed, will Republicans still vote to raise the debt ceiling? And if not, are you prepared for the consequences on this economy and for the country?
SENATOR JIM DEMINT:
Well, I hope the president won't take us through that. And I hope Senator Durbin won't. But we've got to draw a line in the-- in the sand now, because the day of reckoning is going to come. And the longer we put it off, the bigger the problems are going to be for our country.
I mean Moody's, Standard and Poor, these agencies are telling us if we increase this debt limit without credible and long-term deficit reduction, that they're going to lower our ratings. That means it's going to be harder and more expensive to borrow money and we can't borrow another $10 trillion that the president's proposed.
DAVID GREGORY:
Right. But Senator--
SENATOR JIM DEMINT:
Again--
(OVERTALK)
DAVID GREGORY:
--I'm sorry. I'm not getting an answer, though. But what-- what's going to happen? How does this end? I know what your position is. How does this end? Are you saying that you would put the country into default by not raising the debt ceiling unless you get this balanced budget amendment?
SENATOR JIM DEMINT:
Well, David, we're not going to default. And if you listen to your previous guest, he said we won't meet some obligations, but he didn't say we were going to default. I don't want to put the country through that, but the fact is Republicans and Democrats have been irresponsible. They've brought our debt to the point where we literally can't borrow much more money without bankrupting our country.
So now is the time for the president, Senator Durbin and the Democrats to work with us and at least agree that we can make some cuts now and-- and cap spending over 10 years and let the states decide if sometime over the next decade that we'll balance our budget.
DAVID GREGORY:
You know, Sen--
SENATOR JIM DEMINT:
That's hardly a radical idea.
DAVID GREGORY:
Senator Durbin, you and others have described what Senator DeMint just said as intransigence, stubbornness and unwillingness to negotiate. The reality is it's exactly what Democrats said about President Bush when he wanted to raise the debt ceiling for bringing up too much debt. And-- and the scale was completely different there. I mean now you want $2.4 trillion in additional-- debt ceiling. When it was $800 billion. So you can understand why Republicans are saying, "Enough has got to be enough."
SENATOR DICK DURBIN:
Well, I can understand it, but keep in mind that it was the economic policies of the Bush administration that led us into a situation where we more than doubled the national debt under President George W. Bush. Now I hear from Senator DeMint and others, "Let's stick with those same policies, giving tax breaks to the wealthiest people in America and not facing reality."
David, let me tell you, those people who minimize the impact of a default-- on the debt ceiling, a default on America's-- debt and our full faith in credit, really have said thing-- things that are outrageous. Some of the Republican presidential candidates in Iowa, one of 'em says he's praying for a default. Another one said she is opposed to extending the debt ceiling.
And others are saying, "Well, listen, maybe we can't make Social Security payments for a month or two. Maybe we can't pay our veterans what we promised. But we'll work it out." That is highly irresponsible. What we need to do is to sit down and work together. The president has laid out a big plan. Majority leader Harry Reid and the Senate Democrats have said, "We want to work toward a big plan to reduce this deficit by at least $4 trillion over the next 10 years."
DAVID GREGORY:
Senator Durbin--
SENATOR DICK DURBIN:
You've got to do this--
DAVID GREGORY:
My question is is whether-- Senator, whether President Obama is the one to really lead this. There are some progressive as well as Republicans who say that he has been late to this negotiation, late with ideas and late to provide leadership.
SENATOR DICK DURBIN:
David, let me tell ya, if you could have been in-- in the White House cabinet room, as I was, for six separate meetings and watched this president of the United States patiently listen to each member of the leadership in Congress lay out their ideas on where to go and how we can do this together, if you know that he started the meeting saying, "I'm putting everything on the table so that we can have a reasonable, comprehensive approach to him." You saw real leadership in action. I can't think of another president in my memory who would devoted that much time and that much patience to trying to bring--
DAVID GREGORY:
Well--
SENATOR DICK DURBIN:
--both sides together.
DAVID GREGORY:
--quickly--
SENATOR DICK DURBIN:
But ultimately the responsibility is ours.
DAVID GREGORY:
Quickly from both of you, Senator DeMint first, what happens in the end? What-- what-- what-- what resolution do we get before or by August 2nd?
SENATOR JIM DEMINT:
David-- we can't vote on a speech. The president hasn't sent us a proposal. There's been no proposal out of Democrats in the Senate. The only plan on the table that'll keep us from default and will keep us from falling to a negative rating is the cut cap and balance plan. Now folks can say that it's outrageous to balance our budget, but over 70 percent of Americans think we need to. And that's what--
DAVID GREGORY:
Right. But--
SENATOR JIM DEMINT:
--we're going to insist on as Republicans. You're seeing real leadership now in the House from John Boehner and that's the only leadership--
DAVID GREGORY:
But--
SENATOR JIM DEMINT:
--you're seeing in Washington right now.
DAVID GREGORY:
Senator Durbin, bottom line, what-- what's going to happen? First of all, will-- will they meet again today? Will folks meet today?
SENATOR DICK DURBIN:
There won't be a meeting of the same group but I can tell you what's going on. Majority Leader Harry Reid and Mitch McConnell are working on an approach which will avoid this terrible deadline of August 2nd and a default which would drive up interest rates and we-- will hurt our economy.
We will have a debate on the balanced budget amendment this week in the United States Senate. We've got to get this job done. The president is there standing by, willing to help us, but we have got to accept the initiative as elected leaders in Congress to really solve this problem and move America's economy forward.
DAVID GREGORY:
Before I let you both go, I want to ask you about the breaking news this morning and-- and the reported arrests of Rebecca Brooks-- News of the World in Great Britain. And this scandal that's unfolding in the Murdoch-- media empire. It's something that also has reached here in the United States. Would you like to see Congressional hearings as to whether there's any-- you know, tie here to the United States in this phone hacking scandal, Senator Durbin?
SENATOR DICK DURBIN:
Yes, I would. I could tell you that there are questions about whether the Foreign Corps Practices Act has been violated by Rupert Murdoch and his-- news empire. And what's going on in England is startling. To think of the extent that they went to to break the law to try to report a story. We need to follow through with the FBI investigation and also with Congressional investigation.
DAVID GREGORY:
Senator DeMint, what do you think?
SENATOR JIM DEMINT:
David, we need to let law enforcement work here. Congress has had-- has got a big issue in front of us. We need to handle our own business for a change. And wi-- the focus this week is on the on-- the only plan we've got and that's cut cap and balance.
DAVID GREGORY:
All right. We're going to leave it there. Thanks to both of you.
( COMMERCIAL NOT TRANSCRIBED )
DAVID GREGORY:
And we're back this morning with a special discussion about jobs and the economy. Joining me now, the former mayor of New Orleans, he's now the president of the National Urban League, Marc Morial. Republican governor of Ohio, John Kasich, the chairman and CEO of Honeywell, David Cote, chief economic for Mesirow Financial, Diane Swonk, and host of CNBC's Strategy Session, David Faber. Welcome to all of you. Governor Kasich, your 20th appearance on Meet The Press.
GOV. JOHN KASICH:
Is that right.
(OVERTALK)
DAVID GREGORY:
So many of course when you were House budget chairman, so you know about what is going on. Can you explain it to the rest of us? What is going on and how is this going to end?
GOV. JOHN KASICH:
You know, you always-- I was-- budget chairman, one of the chief architects of the last time we balanced the budget in 1997. It always gets down to-- the end. And-- but David, it's a matter of-- of-- will. If-- both sides have a will to get this done then--
(OVERTALK)
DAVID GREGORY:
Do you see the will now? Is it different from how it's been?
GOV. JOHN KASICH:
Well, I mean there's a little-- look, it's always difficult to put a big deal together. Is the will there? I think right now they're still talking past one another.
DAVID GREGORY:
Yes.
GOV. JOHN KASICH:
But I have to tell you, in my state where we faced an $8 billion deficit, we wiped it out. We eliminated it. And here's the interesting thing. We have just been taken off of negative watch in the middle of this and-- and we also have jumped, according to CNBC, 11 places in terms of business friendly. We've been able to cut taxes, improve reform government. And you know why? We looked it square in the eye but-- 'cause Ohio was dying. And-- we are beginning to really become business friendly. That is what they're not doing here in D.C. right now.
DAVID GREGORY:
All right. Financial implications. Let's go around the horn here. Diane, what do-- what do you see? I mean this-- this debate about whether we're really going to default or not default. Seems like economists have been pretty clear. Don't mess with the debt ceiling.
DIANE SWONK:
Don't mess I was the debt ceiling. But, you know, it's interesting 'cause David and I were talking, the (UNINTEL) Wall Street is absorbing that this-- is a real possibility and even a probability. They're pricing in zero risk right now. But the thought that we actually might-- go past, this idea that you could go a day or two or three days or four days or-- that is just really ridiculous to-- (UNINTEL) abroad.
And now for-- our foreign counterparts, economists abroad, are looking at me going, "We got a real-- debt-- sovereign debt crisis here. Why would you deliberately give away your credit rating in the United States. Deliberate undermine yourself. Cut your nose off to spite your face." And we've got time to-- you've got-- you-- you can fix it now and phase in the kind of changes and not have grief.
DAVID GREGORY:
David Cote, it appears like we're headed toward a small solution to a big problem, which is what a lot of corporate America thinks is wrong with Washington. The-- are politics unable to meet the challenges we face?
DAVID COTE:
It's the sort of thing that scares me is. We're-- I'm-- Honeywell's a global company with $37 billion in sales. Got 130,000 people. Half our sales in people outside the U.S. I've traveled the world a lot and the world has changed. We went from a billion participants in the global economy to four billion over the last 20 years.
Yet we still act like we did 20 years ago. And we need-- an American competitiveness agenda that-- gets our finances right, gets our energy policy, math and science education, infrastructure. And we can't even do something like this. It's very scary as a businessman.
DAVID GREGORY:
I want to jump into talking about jobs in just a second. David Faber, I do want to ask you about this breaking story that we're talking about. This is the cover The Week magazine and it has-- Rupert Murdoch literally-- on the hot seat with the question, "Is Murdoch's media empire nearing its end?" The fact that Rebekah Brooks, who is the editor of News of the World, has reportedly been arrested for corruption and some-- other crimes, how serious is this at this point?
DAVID FABER:
Well, it's-- it's a very-- it's the most serious crisis that Murdoch-- has ever faced, certainly, in his long career. There's no doubt about that. And I think-- the middle of last week it started to sink in for him. Prior to that people close to Murdoch, David, tell me that he perhaps had not appreciated the depth of anger that was taking place in the U.K.
And perhaps for the first time in his long career he wasn't out in front of something. Wasn't able to dictate the pace of events. That changed in the middle of the week. You know, big-- beginning of last week he had his arm around Rebekah Brooks. By the end of the week of course she was gone. So was his long-term lieutenant Les Hinton.
The key will be the U.S. You had-- earlier of course you asked the Senators about the FBI probe. Will there be subpoenas issued? One never knows what will occur if that starts to happen. And, ultimately, what, if anything, is found in the U.S. will be a key for him. They are not going to be flat footed in their response in the U.S. the say way they appear to have been--
DAVID GREGORY:
Governor, you--
DAVID FABER:
--in--
DAVID GREGORY:
--work for Fox News. What's the impact there? What's the reaction there?
GOV. JOHN KASICH:
Well, it-- you know, they-- they have not been touched this, they have told me. And-- I believe them. And-- we just have to see how this all unfolds. It's-- you know, Murdoch's fired people. He's-- you know, he's-- he's quoted as-- as-- as being told that his hands in his-- his-- in his-- his head in his hands, crying with the family that-- was impacted. I mean it's-- it's a terrible thing. And-- hopefully we'll get to the bottom of it. And it will change-- it'll change journalism.
MALE VOICE:
You know, I want to go back to something David said about the inability to solve problems. I think the business community has been absent. They play politics themselves. Instead of going to politicians and saying, "You fix this thing, they say, 'Give money to both sides.'" And they have been unwilling to stand up in too many cases and stay, "Enough is enough."
Look, I don't think we just have a crisis in Washington of leadership. I think it's across all the sectors. I think we see it in sports where we let-- sometimes these thugs go out on the field and play on Sunday 'cause they can score a touchdown. We see it in our pop culture. There is a crisis of leadership in America and we are witnessing it now in politics.
DAVID GREGORY:
All right. Let--
(OVERTALK)
DAVID GREGORY:
--let me-- well, I want to-- I want to focus things a little bit. I want to get Marc Morial on this. I want to-- but I want to refocus to this primary question too, because the-- the debt fight is part of the backdrop to this still-- chronic problem of unemployment. Let me just show the figures, Marc, if I can. This is unemployment around the states. The unemployment figures where it is highest. Nevada over 12 percent. California almost 12 percent. Rhode Island, Florida, Michigan over 10 percent. Where are the jobs? Is government sufficiently--
MARC MORIAL:
We--
DAVID GREGORY:
--focused on the budget?
MARC MORIAL:
--we have a jobs crisis in America. And I think that the-- debt ceiling discussion should be decoupled from the deficit discussion. And the nation needs a jobs plan. We have 14 million people out of work. The black unemployment rate is at stifling levels. It's in fact increased since the recovery has begun.
And so we need a jobs plan. And we need to be very cautious and careful that a deficit cutting plan that unfairly targets vulnerable people, jobs, housing and education program might be a cause for short-term celebration and a cause for deepening the recession, stifling the recovery. That's the hard reality. And the polling shows, my visits around the country demonstrate, that's what's in the hearts and the minds of the American people.
DAVID GREGORY:
What's driving this persistent jobless recovery?
DIANE SWONK:
Well, that's-- you know, that's the real interesting issue. Is-- one, I want to respond to the leadership issue. I've actually been in-- involved in some of the bipartisan meetings around here. We've shown up together at meetings. And the business community-- I've been warned, you know, "Be careful. It's gotten so politicized--"
MALE VOICE:
Be careful.
DIANE SWONK:
--"you can't go out there." And-- and I'm just an economist. I'm talking about the economy and talking about what's best for the economy. I'm not being political. But it's gotten so politicized I know people who've said, "I won't sit at that table and be seen with those politicians."
DAVID GREGORY:
But Diane I want to--
DIANE SWONK:
Right--
DAVID GREGORY:
--focus for--
DIANE SWONK:
--but--
DAVID GREGORY:
--the moment-- I--
DIANE SWONK:
The jobless--
DAVID GREGORY:
--we could have--
DIANE SWONK:
--sector.
DAVID GREGORY:
--a whole leadership debate--
DIANE SWONK:
Yes. I know.
DAVID GREGORY:
--which is worthwhile.
DIANE SWONK:
But the jobless--
DAVID GREGORY:
But I want to focus on where the jobs--
(OVERTALK)
DIANE SWONK:
--I know. I want to-- I want to-- yeah, but (UNINTEL PHRASE). No. There is an issue. You know, in-- Norway, Sweden and Finland they had a financial crisis in the early '90s. They did everything right. They had consensus in government. They reformed. They went towards more market reforms. They got their fiscal house in order.
You know, the one thing that disturbs me, 20 years later, they've never hit their pre-crisis lows on unemployment. Twenty years later. There was great-- of pre-- (UNINTEL) of labor force, which is one of the things I view as a hope. Throw your hat in. Say you're looking for a job. It's still lower than it was before the crisis and long-term--
DAVID GREGORY:
David --
DIANE SWONK:
--employment--
DAVID GREGORY:
--David--
(OVERTALK)
DAVID GREGORY:
--Robert Reich writes this in-- in-- in the Wall Street Journal on Friday about what we're facing. "When the Great Recession wiped out $7.8 trillion of home values," this is the former labor secondly, "it crushed the nest eggs and eliminated the collateral of America's middle class. As a result, consumer spending has been decimated."
"We're in a vicious cycle in job and wage losses further reduce Americans' willingness to spend which further slows the economy. Job growth has effectively stopped. The fraction of the population now working 58.2 percent is near a 25 year low, lower than it was when the recession officially ended in June of 2003."
DAVID FABER:
Yeah, I mean all of those are frightening statistics. There's no doubt this is a consumer-led economy and has been for some time. And you had a significant pullback by consumers on their willingness to spend, in part because of that old uncertainty. CEOs may like to use it, but consumers actually face it at home. If I don't have a job or if I lose my job, of course, I am not going to be spending money.
That being said, I mean, I'm curious. You know, we talk about the jobs crisis now, David, but the fact is that during the Bush presidency we had the lowest job creation numbers we ever had annually. About three million total jobs over those eight years. The question really is has there been a seminal change in the ability of the U.S. economy to create jobs.
DIANE SWONK:
Right.
DAVID FABER:
That certainly is something a lot of people are starting to believe. You heard David Cote talking about these larger issues of competitiveness. Much of that goes back to that. But we haven't created a lot of jobs for a very, very long time. Not--
MALE VOICE:
Well--
DAVID FABER:
--just the--
MALE VOICE:
--we--
DAVID FABER:
--the last years?
DAVID GREGORY:
Why? What-- what's happening?
(OVERTALK)
MALE VOICE:
Well, right now the problem that we've got is uncertainty of demand. Businesses don't add until they're sure that there's somebody who's going to want to actually buy something. To that I would have add-- we've added uncertainty of regulation. And when you combine those two, it just causes businesses to say, "I'm going to wait a little bit."
DAVID GREGORY:
But you--
(OVERTALK)
MALE VOICE:
--I always find it interesting when I hear government say, "We need to create jobs." And I say, "No, actually, government doesn't create jobs. Government can create an environment where jobs can be created." And I think it's important to (UNINTEL)-- distinguish between the two.
DAVID GREGORY:
You know, David--
DIANE SWONK:
Well, but--
(OVERTALK)
DAVID GREGORY:
--here-- let me go--
DIANE SWONK:
--but I--
MALE VOICE:
--David, 'cause I--
DIANE SWONK:
--growing six to eight percent, the economy, it would be a no-- no brainer. We would be generating jobs and the uncertainty would be a ray--
MALE VOICE:
Look--
DIANE SWONK:
--ray-- away.
MALE VOICE:
Believe it or not, consumer spending is up over the last eight months. Okay?
DIANE SWONK:
I'm--
(OVERTALK)
MALE VOICE:
Here's the problem. Here's the problem.
(DIANE SWONK: UNINTEL)
MALE VOICE:
This man doesn't know what's coming, (THROAT CLEARING) whether it's regulation, whether it's taxes. And this high debt presupposes--
(OVERTALK)
MALE VOICE:
--you're going to have higher taxes. He can't make a decision about investment when the roof's about to cave in.
MALE VOICE:
But that's--
(OVERTALK)
MALE VOICE:
We need certainty--
GOV. JOHN KASICH:
--that's what we're trying to do--
DAVID GREGORY:
All right.
GOV. JOHN KASICH:
--in Ohio, Marc.
(OVERTALK)
DAVID GREGORY:
Marc Morial.
MARC MORIAL:
--raise the issue of demand because I think there's a lot of politics in uncertainty about taxes, uncertainty about regulation. The bottom line is there's not enough demand in the economy. So if you have a job, you're concerned about being laid off.
Look at state and local government where you've had a plethora of layoffs over the last eight months. If there are further budget cuts-- from the federal government in those areas you're going to have more layoffs and the private sector is not poised, because of demand, to pick that up.
DIANE SWONK:
Right. Well--
MARC MORIAL:
We need a jobs plan in this country. If as much time was devoted to a consensus jobs plan as the country's devoting to a consensus deficit reduction plan--
MALE VOICE:
But I'm not--
MARC MORIAL:
--and then in fact--
MALE VOICE:
--sure--
DAVID GREGORY:
But Governor, what does that actually mean, because--
(OVERTALK)
DAVID GREGORY:
--that's a reflection of what is it-- I asked the Treasury Secretary last week, "Does the president have to acknowledge, 'Look, there's things we've done. There's things the Fed can do. But we can only do so much as the government.'"
GOV. JOHN KASICH:
David--
DAVID GREGORY:
That's (UNINTEL)--
(OVERTALK)
GOV. JOHN KASICH:
--David--
DAVID GREGORY:
--the truth?
GOV. JOHN KASICH:
When a business-- and I've been in business for 10 years-- before I got this governor's job. When a business is uncertain about the future they sit on the sidelines. We have more-- we have so much money on the sidelines waiting to be invested, but they're uncertain about where we're going to go.
The answer, get this god darned deficit under control, do not raise taxes on capital gains risk takings, provide incentives for investment. Real changes in education to connect our kids with real job opportunities. And, you know, if you begin to-- and-- and lay down some-- some-- certainty on regulatory reform, he'll be investing.
DAVID GREGORY:
Right.
MALE VOICE:
Well, you know what? He's got $3 billion. Right? Three-- over $3 billion in cash to (LAUGHTER) balance this out.
(OVERTALK)
MALE VOICE:
That was last quarter. So it's all been (UNINTEL). It's not yours, obviously. It's the shareholders. But if you're choosing-- what'd you spend, $800 million on capital expenditures this year?
DAVID COTE:
Yeah.
MALE VOICE:
Could have been more. Could be a lot more, right?
DAVID COTE:
Uh-uh (NEGATIVE).
MALE VOICE:
But, you know, I hear this uncertainty about regulation. And, frankly, I think a lot of CEOs say it because why not. Why not get some regulatory relief if you can or tax relief? But at the end of the day your first answer, demand--
(OVERTALK)
MALE VOICE:
--would seem to me is the case.
DIANE SWONK:
Well--
MALE VOICE:
It's uncertainty and demand.
DIANE SWONK:
Yeah, and-- and--
DAVID GREGORY:
Well, can we just-- can we just unpack this a little bit? Because this idea that the consumer being king, that debt is really the issue. There's government debt, there's personal debt. People that deleveraging, the fancy term of basically getting out of from under your debt, paying your debt down means--
(OVERTALK)
DAVID GREGORY:
--you're not spending, you're not creating demand. Businesses, it seems to me, Diane, are actually making a decision which is we're just going to get leaner and meaner.
DIANE SWONK:
Yeah. That the--
DAVID GREGORY:
The jobs aren't coming back?
DIANE SWONK:
--that-- that-- well, many of the jobs aren't coming back, but the jobs that do come back are ones that we never expect. The fact that we're in a renaissance in the manufacturing sector.
MALE VOICE:
Exactly.
DIANE SWONK:
It's a lack of imagination. I do think-- the one silver lining here. And it's part of the reason we haven't generated jobs is because coming out of a financial crisis like you do, this is the nature of it. It-- you don't get enough growth and enough demand.
That said, where's the silver lining? We've had more IPOs since the fourth quarter of 2000-- of 2010 than we've had since 2000. Why is that important? New businesses. Not just small businesses. New businesses interacting with established firms is where you get the miracle in job creation. That was what happened in the 1990s. To an extreme. Companies that never should have hired. And there may be some bubbles out there. We can all talk about some of the--
MALE VOICE:
--should have been able to raise capital.
DIANE SWONK:
Right. And they did.
MALE VOICE:
This-- its--
DIANE SWONK:
And they may be--
MALE VOICE:
--a good point.
DIANE SWONK:
--happening today.
MALE VOICE:
I mean if you--
DIANE SWONK:
They (UNINTEL)--
MALE VOICE:
--want a good news story, take a look at Groupon, for example. A name some of your--
DIANE SWONK:
In Chicago.
MALE VOICE:
--viewers may know.
DIANE SWONK:
Yeah. I know. And--
MALE VOICE:
7,000 employees have been hired over the last couple of years.
DIANE SWONK:
At-- at one point in time--
MALE VOICE:
Google, for example, one of the grow-- only 10 years old. 28,600--
(OVERTALK)
MALE VOICE:
--employees. 2,400 employees--
DIANE SWONK:
And it's not--
MALE VOICE:
--added over the last quarter.
DIANE SWONK:
Not--
(OVERTALK)
MALE VOICE:
--so there is still--
DIANE SWONK:
There's still--
MALE VOICE:
--growth in this--
MALE VOICE:
What this con----
MALE VOICE:
--economy (UNINTEL)--
MALE VOICE:
--what this conversation shows is that Wall Street is back. The business community's come back. But main street's--
DIANE SWONK:
Main street's not--
MALE VOICE:
--back street lag behind.
DIANE SWONK:
Right.
MALE VOICE:
And it may point to the fact that these are structural shifts in the American economy. We have to focus on competitive-- ness, yes, but producing things so that when we spend money in this country, it creates jobs in this country. So--
DIANE SWONK:
But we--
MALE VOICE:
--we need--
DIANE SWONK:
--are doing that.
MALE VOICE:
--a larger (UNINTEL).
(OVERTALK)
GOV. JOHN KASICH:
We also need--
DAVID GREGORY:
--point governor--
GOV. JOHN KASICH:
--we also need training in real world. Vouchers for companies so that they can train for things that they need. In Ohio because we faced our-- our eight-- billion dollar budget deficit and provide tax relief, what's happened? CNBC says we jumped 11 points--
(OVERTALK)
GOV. JOHN KASICH:
--eleven places in terms of business friendly. The credit agencies say your credit, we have taken you off negative watch. When you provide certainty to people, then they are able to-- they're able to respond to it. And we're we're seeing in Ohio are positive things. If they did it in Washington we'd be better.
DIANE SWONK:
Well, the--
(OVERTALK)
DAVID GREGORY:
You know, let-- let's-- I want to get a break in here. I want to get a break in here. I want to talk more about the issue of jobs, the overall economy. When eco-- when recovery will actually feel like recovery, including the debate over taxes and the relationship to economic growth. More with our panel after this.
(OFF-MIC CONVERSATION)
DAVID GREGORY:
We're back with our discussion about the economy, which continued even during the break because this is a hot (LAUGHTER) topic. As you know-- and-- and these are spirited folks.
DIANE SWONK:
So we decided we could talk.
DAVID GREGORY:
Right. I want to talk about the debate over taxes. And it's very interesting. You have House Speaker John Boehner on Friday say the following about these debt talks and taxes.
(VIDEO NOT TRANSCRIBED)
DAVID GREGORY:
That's the assertion. Is that really true? Ron Brownstein took a whack at that in his column in the National Journal this weekend. And this is what he writes. "In the past three decades job growth has thrived after tax cuts and after tax increases. And it has stagnated after tax cuts. If there's a patter it's that tax policy typically isn't the decisive factor in driving a machine as complex as the U.S. economy."
"Given those precedents, tax policy ought to be seen not as a secret to growth but, more modestly, as one part of the fiscal policy toolbox. And on that front the case against including some revenue in a comprehensive deficit reduction package is even weaker."
MALE VOICE:
Budget Chairman?
MALE VOICE:
Well--
DAVID GREGORY:
Hey Governor, you were expose-- you-- you were for closing--
GOV. JOHN KASICH:
I've been--
DAVID GREGORY:
--tax loopholes?
GOV. JOHN KASICH:
Yeah. I-- I-- I was. Look, in '97 we cut taxes, by the way. We cut taxes on capital gains. We balanced our budget. The economy was going great. The problem with tax increases, and I was telling David this. He was on the Bowles commission. Got bless him. (LAUGHTER) Is that-- you raise the taxes, they spend the money but they never cut the spending.
David, I saw it. When Bush said, "Read my lips," and then he caved in on a tax-- tax increase. We put Graham Rudman. And this was this program to cut spending. We spent the money and every time we got to the cuts we put 'em off. Now the problem we have here is we have a spending problem not a tax problem. But I would support loophole closings, lowering rates, lowering the corporate rates, lowing the-- lower the personal rate.
MALE VOICE:
Okay.
GOV. JOHN KASICH:
But, frankly, the revenues-- that come from that shouldn't be spent on--
(OVERTALK)
DAVID GREGORY:
Marc, 'cause I just show you one thing--
MARC MORIAL:
Yes.
DAVID GREGORY:
--from-- from Grover Nordquist, who amplifies in this argument. And we talked to him as part of our press pass conversation that's available on our blog. And I asked him, "Why don't conservatives care as much about deficits as they do keeping taxes low?" And this is what he said.
(VIDEO NOT TRANSCRIBED)
MARC MORIAL:
Grover is engaging in spin because the issue is not tax increases. It's tax reform, tax simplification and closing loopholes. The dirty secret of Washington is that the tax earmark business tied to K Street lobbyists is bigger than the spending earmark business.
So you've got $1 trillion worth of tax loopholes. And if Congress would attack that and if the conversation would be about tax simpli-- simplification and reform, we might be able to get a (UNINTEL) package. I reject the idea that spending on domestic programs, housing, jobs, programs like food stamps, is the reason for the budget deficit.
DIANE SWONK:
No, I (UNINTEL).
MARC MORIAL:
You had wars.
(DIANE SWONK: UNINTEL)
MARC MORIAL:
You had wars. You had-- increases in the prescription drug benefit program. You had a wide range of things. You had tax-- cuts. They all piled onto the deficit. But--
(OVERTALK)
MARC MORIAL:
--don't fix the deficit on the backs of the most vulnerable Americans.
DAVID GREGORY:
Dave-- David Cote, what-- what about corporations and taxes? We hear-- about the need to lower tax rates, but then you have companies that aren't-- aren't paying taxes at all?
DIANE SWONK:
Right.
DAVID COTE:
Well, if you wanted the most dynamic jobs creating economy in the world, you would have a zero percent corporate tax rate. However, nobody can stand that because in our-- pursuit of fairness we actually hurt the very people we're trying to be fair to.
So if we say, "All right, what we need to do is-- in the pursuit of fairness attach some kind of tax rate," you should make it the most simple, easy to thing-- do possible. And that's why I think the Simpson Bowles Commission, I think we got it right. 'Cause we said take it away for everybody. Ev--
DIANE SWONK:
Right.
DAVID COTE:
--all the exclusions, all the exemptions, every-- take it away for everybody so that you broaden the base and just significantly lower the rates.
DIANE SWONK:
Yes.
DAVID COTE:
You can get an increase in taxes and everybody's going to be happy and corporations will--
(OVERTALK)
DAVID COTE:
--also get territoriality.
DIANE SWONK:
But-- but--
DAVID COTE:
So they'll be able to get their cash back from outside the U.S.
DIANE SWONK:
Well-- and this gets to the issue of we have-- we're in a position where we-- freedoms are what we-- we-- we love in this country. We have the freedom to decide what our future is going to be like or we have-- going to give away that freedom and let the world decide for us.
And in the long-term if we get on a more simplified tax-- get out of these complications, elo-- eliminate the loopholes, lower the rates, get in a more clean tax code, we're going to be making better decisions economically. We're been be more competitive economically.
MALE VOICE:
Exactly.
DIANE SWONK:
And that's an opportunity to-- to let it go away because of lobbyists and all the little-- the tax lobbyists that we talk about. That is just-- it's-- it's in-- it's--
DAVID GREGORY:
But-- but it's--
DIANE SWONK:
--incomprehensible--
DAVID GREGORY:
--interesting though--
DIANE SWONK:
--right now.
DAVID GREGORY:
--to see if-- we were in a position in these negotiations, Boehner and the president talking about-- raising some taxes while at the same time getting the sort of tax reform that you're talking about. And there was a disagreement ultimately about-- not so much what our rates were but how progressive it was. And it got a big complicated. But we couldn't even get to that point.
MALE VOICE:
Yeah. It seems an impossibility that what we just heard from our panelists would actually ever occur. Elimination of all loopholes. (LAUGHTER)
(OVERTALK)
MALE VOICE:
I mean we-- it's-- it would be great--
DAVID GREGORY:
But what you're in--
MALE VOICE:
--'97.
MALE VOICE:
Yeah. It did. And then--
(OVERTALK)
MALE VOICE:
--and then somehow we got 'em all back, didn't we?
MALE VOICE:
Well--
MALE VOICE:
Well, that's the problem.
(OVERTALK)
DIANE SWONK:
--if we do it every 10.
MALE VOICE:
Da-- David Faber. Go ahead.
DAVID FABER:
Da-- you know, we started this conversation about the markets to a certain extent and the debt ceiling. And the fact is if you were to get that $4 trillion in spending cuts and see some compromise, you'd get a very positive response--
MALE VOICE:
Yeah.
DIANE SWONK:
At a--
(OVERTALK)
DAVID FABER:
--from our--
MALE VOICE:
That's why--
DAVID FABER:
--creditors around the globe.
MALE VOICE:
For (UNINTEL).
DAVID FABER:
There's no doubt. It seems, though, unfortunately, perhaps something simply too--
(OVERTALK)
DAVID FABER:
--far beyond our-- our leadership (UNINTEL).
MARC MORIAL:
Pass the debt limit and continue to have discussions about a consensus plan that's going to create jobs and address all--
MALE VOICE:
Well--
MARC MORIAL:
--of these problems.
MALE VOICE:
--well the--
MARC MORIAL:
It's being done--
DIANE SWONK:
No--
MARC MORIAL:
--under the--
DIANE SWONK:
--but--
MARC MORIAL:
--pressure of a false deadline--
DIANE SWONK:
I think there's--
MARC MORIAL:
--and that--
DIANE SWONK:
--also some--
MARC MORIAL:
--is tying this to the debt limit vote. Look, the car was purchased. It was driven off the lot. And now we're going to debate whether we sign the loan papers?
MALE VOICE:
Look, I mean it's-- at the end of the day you have to deal with this deficit. And you're not going to get it done--
DIANE SWONK:
Right.
MALE VOICE:
--without reforming programs.
GOV. JOHN KASICH:
Mayor, I would disagree with you on this. I believe it is possible to design a federal government that doesn't hurt the most vulnerable by bringing in reform of those programs. We've done it in Ohio with Medicaid.
DIANE SWONK:
They love it.
GOV. JOHN KASICH:
We've saved billions in and the AARP supports our program. We let Mom and Dad stay at home if they qualify for a nursing home. It saves us a lot of money.
(OVERTALK)
GOV. JOHN KASICH:
But-- but-- so I think that's one thing. The loophole closings ultimately will happen, because if you can get lower, flatter rates, it's going to happen. But at this point, look, we all know it. If we don't deal with the $14 trillion debt by changing the spending patterns of Washington--
(OVERTALK)
DAVID GREGORY:
But Marc, it's--
MALE VOICE:
I'm not going to respond (UNINTEL) with this.
DAVID GREGORY:
Two questions. I want to go back to David Faber. I want to put up. The housing crisis, which is still a crisis. Look at the bright spots and the weak spots around the country in terms of housing markets. The cities with the highest increases in home prices, D.C., San Francisco, which would--
(OVERTALK)
DAVID GREGORY:
--include Silicon Valley, which is hot because--
DIANE SWONK:
Right.
DAVID GREGORY:
--bruson-- technology out there. Atlanta, Seattle. And then the highest drops in home prices, Detroit, Vegas, Chicago and Tampa. The reality is that everything the federal government has tried to do has not worked. A lot of threats about the mortgage giants, Fannie Mae and Freddie Mac. Everybody's afraid to wind those down because they're the only ones propping up our housing market. Can we have recovery until we bottom out on housing?
DAVID FABER:
It's very hard to imagine we're going to have a significant recovery until we bottom out on housing. Not just because of the-- of what you mention. And we were-- I talked earlier about-- the lack of job growth under the Bush administration. So much of that came as a result of a housing boom that ultimately turned into--
DIANE SWONK:
Right.
DAVID FABER:
--into this bust that you're talking about with construction and all the related industries. So there's a lot of employment related to a recovery in housing. There's also a psychological impact. When you are-- underwater on your mortgage, as about 30 percent are in this country. When your mortgage is worth more than your home you're not going to go out and spend a great deal of money.
DAVID GREGORY:
Right.
DAVID FABER:
Of course, the reverse occurred in the mid oughts when we watched everybody taking out home equity loans because of the incredible rise in the value of their homes and that resulted in enormous consumer spending. So housing is very much interrelated to the economic problems that we can see (UNINTEL).
DAVID GREGORY:
David Cote, here's a bottom line question. You-- are a jobs creator. You're a businessman. Explain to folks out there who are either scared about losing their job or have been out of work for a long time. When is economic recovery actually going to feel like economic recovery?
DAVID COTE:
Well, it never feels like a recovery till you get your job back, right? I mean it's at that point that you get there. But it's interesting with consumers. We're at-- a point where we tell them, "We need you spending. But hey, by the way, save for a rainy day 'cause bad times happen." And--
(OVERTALK)
DAVID COTE:
--those two don't quite go together. We need to start thinking about consumers perhaps a little differently when it comes to something like oil prices, because right now you take a look at consumers. They're just starting to feel a little bit better. The news is generally better. Now they're paying four bucks a gallon for gas and they're saying, "I don't know where this is going to go."
We need a different policy when it comes to oil, for example. If we just allowed more drilling-- and, by the way, I keep saying, I'm an energy efficiency guy. My whole company's devoted to that. However, oil supply would make a big difference in driving down gas prices and putting money in people's pockets, generating royalties for the-- for the government-- and generating a couple hundred thousand jobs in the process. That's the sort of changes that we oughta be thinking about that I don't even see us talking about today.
DAVID GREGORY:
All right. let me get my final break in here.
(OFF-MIC CONVERSATION)
DAVID GREGORY:
We're back. Final moments with our roundtable. And-- we wanted to refer back to-- a takeaway sound byte from earlier in the program from Jack Lew, the president's budget director-- who again reiterated the stakes-- in these negotiations. This is what he said.
(VIDEO NOT TRANSCRIBED)
DAVID GREGORY:
Marc Morial, we're still waiting. You listened to the Senators (THROAT CLEARING) this morning. There doesn't seem to be a lot of room. They want to spend the next week talking about a balanced budget amendment.
MARC MORIAL:
I think they're going to need to engage in sort of a temporary measure to raise the debt ceiling. And I think they should continue the discussions. I don't think it should be the end. It's an artificial deadline. A plan for the future of the economy and a fiscal plan for the nation-- is going to take more time.
DAVID GREGORY:
We-- are watching, of course, as there is a simultaneous conversation going on online this morning. And from Facebook there's this from Christopher G. "I think both sides are playing chicken with an important situation and I believe that both sides need to agree and stop this same scuffle that you would see two kindergarteners have with a toy they both wanted."
It's interesting. David Cote, The Weekly Standard cover-- shows the following scene taking place-- here in Washington. Polls playing poker with-- (LAUGHTER) Republican and Democratic leaders-- really facing each other off at this point to see who will blink first.
DAVID COTE:
Well, I-- the way I've likened it is it's-- it's like both parties have a grip on each other's throat and they're more focused on simultaneous asphyxiation than they are on actually resolving the problem. (LAUGHTER) And that-- that's got to change. We can't-- we-- we're not going to be a competitive power in the world unless we start to be able to--
DIANE SWONK:
Right.
DAVID COTE:
--fix things like get our fiscal house--
DAVID GREGORY:
Now--
DAVID COTE:
--in order.
DAVID GREGORY:
--is there a threshold-- real quick, Diane. A threshold where it has to be-- of a certain level for our creditors to think we're serious?
DIANE SWONK:
Well, our credit-- (LAUGHS) we've already seen the debt rating agencies have said we-- we don't make August 2nd, they're going to downgrade us. So, yes, the threshold is here already. But Washington's not listening. They're at-- Wall Street's not listening. But--
MALE VOICE:
Even--
DIANE SWONK:
--I think--
MALE VOICE:
--with $4 trillion we could be doing this again in five years.
DAVID GREGORY:
Governor Kasich, I want to show you our trend tracker, the hottest political stories this morning as we're following them. The debt limit debate. The president met with the Dalai Lama. And Obama 2012 fundraising, he's raising a lot of money. I do want to ask you a political question. Are you going to endorse a Republican candidate in the-- process of the primary?
GOV. JOHN KASICH:
Not for a while. Not for a while.
DAVID GREGORY:
In the primaries or--
(OVERTALK)
GOV. JOHN KASICH:
I don't-- I don't know yet. David, let me say, you know, I had a little golf game with John Boehner, the president and vice president. We sat around the table when it was all over and I said, "Guys, none of us-- really belong at this table. The lord's put us here. We've been blessed. Let's not blow it."
At the end of the day, America can be great when every American looks in the mirror and says, "What did I do to make this country a little bit stronger? What did I do for my children?" And that means these Congressmen and Senators, the president, everybody as well. We can do it.
DAVID GREGORY:
Call to action. The president-- Tweeted, "Go USA." The national soccer team, the women facing--
MALE VOICE:
Very--
(OVERTALK)
DAVID GREGORY:
--Japan today. (LAUGHTER) Which (UNINTEL) as well. We have to leave it there. Thanks very much.
DIANE SWONK:
Go for the women.
