'This Week' Transcript: David Plouffe and Lindsey Graham

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Right from the beginning, we looked -- I looked at the numbers, people like me looked at the numbers, said we have -- we're going to have huge cutbacks at the state and local level. You've got a federal increase which is going to be barely enough to limit those cutbacks. There is going to be no net fiscal stimulus, if you look at government as a whole, which is what happened.

WILL: And it...

KRUGMAN: So here we are.

WILL: It would be good to go to the election -- electorate and have a Krugman election this time, saying, resolved, the government is too frugal. Let's vote.

AMANPOUR: President Obama has been deeply involved over the last, you know, several days, last 48 hours for sure, but it's been a very rough week for him, George. How is this going to pan out?

STEPHANOPOULOS: For a few months. I mean, first of all, the president needs a deal, because he doesn't -- he bears the consequences of default more than anyone else. Even if the public blames the Republicans more for what happened, he's got to deal with what happens in the economy.

I think at this point, the White House is hoping that, by getting a deal, he -- he can at least start to right the ship. You look at what's happened in the polling and the president's approval rating over the last couple of months. The Gallup poll has him down to 40 percent. The Pew poll, George, you and I were talking about before we came on air has him barely beating a generic Republican now 41 to 40. It's taken a real toll on the president's position.

AMANPOUR: And...

NORQUIST: Look, we've also had 50 states that have sort of played this out, as well. In the last couple of years, there have been not -- they've not been raising taxes, states like New Jersey and Michigan and Wisconsin and Ohio and Pennsylvania, major states, Texas, Florida. And what they have done is rein in spending. The states that have reduced spending and not raised taxes are doing better than the states like Illinois and Connecticut and California, which are trying to raise taxes.

AMANPOUR: Is that right, Paul?

KRUGMAN: No, it's not. We can get into statistics here -- we'd get too deep into the weeds -- but it's just not true. And it's -- let me say, by the way, on the politics of this, if you look at the polling, it turns out that the average Republican voter thinks there should be some revenue as part of this deal, right? So the president has agreed to -- not just to an agreement that's way to the right of the average American voter. It's actually to the right of what the average Republican voter wants.

(CROSSTALK)

STEPHANOPOULOS: ... he has fought here. He simply doesn't have the votes.

KRUGMAN: No, he doesn't. He has -- he has options. There are -- there are -- I'm aware of at least four possible legal routes to just regarding the debt ceiling...

STEPHANOPOULOS: You're talking about the 14th Amendment.

KRUGMAN: The 14th Amendment, Article I, the platinum coin. Do people know about the platinum coin issue?

(CROSSTALK)

KRUGMAN: You can issue -- it appears to be legally possible to...

STEPHANOPOULOS: That are worth a trillion dollars each?

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