'This Week' Transcript: Two Powerhouse Roundtables

STABENOW: You know what, George? If I might just jump in, George, on that one, first of all, and say Social Security is not going bankrupt. We're making reforms in Medicare. In fact, the costs for Medicare Advantage have gone down, the premiums, by 7 percent for seniors because what we've done.

But what's going to happen at the end of the year if the House doesn't act is middle-class families are going to see a tax cut -- or a tax increase that's going to be at least $2,200 per person. And I can tell you from one of my constituents who said that's four months' groceries for her family.

So there's a lot of talk. I agree with my colleagues, a lot of talk. But there's one thing that's very clear. At the end of this year, if the House of Representatives does not pass the middle-class tax cut, we are going to see middle-class families across this country paying at least $2,200 more in taxes they can't afford, all because they're trying to protect the wealthiest few from getting another round of tax cuts we can't afford.

STEPHANOPOULOS: I want to bring in...

STABENOW: So let's start there. I bet we would all agree with that.

STEPHANOPOULOS: I want to bring in Congressman Grijalva. And you're going to get the last word. But what if the Republicans do call the president's bluff, pass the tax cut extension for the middle class, but nothing else? That's going to be mean no extension of unemployment benefits, the sequester kicks in, cuts in both domestic and defense spending, and the president will have no more leverage after that fact. Isn't that true?

GRIJALVA: I think the leverage is there for the president, George. I really do. I'm happy the president and the Democrats are not negotiating with themselves this round. They're actually negotiating with people that are in a position in the House to make the decisions.

And -- and if the middle class is -- if that's the vote we take, that is a good vote, it is a step toward in a direction. But I think that one of the issues that's being left alone in this whole discussion is the amnesia of how we got into this situation, who's responsible for the situation. And to blame the three programs that we're talking about -- Medicare, Medicaid and Social Security -- as the drivers of this deficit is a mistake.

The drivers happened long ago, two wars on a credit card, financial institutions that didn't -- that took -- abused the American people, and now we're being asked to go back to the same people that have endured this crisis and ask them to pay up again. No. No.

STEPHANOPOULOS: So clearly the differences are still wide among you four, presumably between the president and the speaker, as well. Thanks for coming in today.

Our powerhouse roundtable is coming right up, their take on the fiscal cliff stalemate in just 90 seconds.

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(BEGIN VIDEO CLIP)

SIMPSON: ... Instagramming your breakfast and getting on YouTube so you can see "Gangnam Style" and start using those precious social media skills and go out and sign people up.

(END VIDEO CLIP)

STEPHANOPOULOS: Who knew that Alan Simpson could dance "Gangnam Style"? That's part of thecankicksback.org. He's part of this big debate over what to do about the fiscal cliff. We're going to bring in our roundtable now to talk about it all, George Will -- welcome back to George Will -- Nobel Prize-winning economist Paul Krugman of the New York Times, ABC's Matthew Dowd, and my favorite odd couple, James Carville and Mary Matalin. Thanks a lot for coming in.

So, George, we just heard the lawmakers there, as far apart as ever, with just 23 days to go. Is there any way out of this?

WILL: Well, conceptually, obviously, we're dealing here with splittable differences, numbers, how high rates ought to be. We've in our country had really unsplittable differences, abortion today, expansion of slavery into the territories, things -- differences you really couldn't compromise on. This is doable.

The problem, George, is, since the Second World War, really through all of American history, our politics has been about allocating abundance. Now we're allocating scarcity, and we're not very good at it, and we haven't had much practice. And I would like to postulate that the real problem in the country today isn't the divisions we talk so much about. It's a consensus as broad as the republic, as deep as the Grand Canyon, and it is this: We should have an ever-more-generous welfare state and not pay for it.

KRUGMAN: Oh, boy.

(CROSSTALK)

(LAUGHTER)

KRUGMAN: I mean, I think it's actually -- it's not just numbers, because we have -- we have a basic difference in outlook. And I think part of the problem is the Republicans are unable to actually make concrete proposals. If you actually look, all that talk we just heard about, you know, deficits and China and Greece, which is all nonsense, but all that talk about how we need to deal with this and ask, what is the Republican Party currently proposing? What have they actually put on the table? They put down some numbers, but what specifics?

And if you look at all of things that they've concretely mentioned, all of their actual proposed spending cuts, on, you know, raising the Medicare age, cutting the price index for Social Security, it's about $300 billion...

(CROSSTALK)

STEPHANOPOULOS: Higher Medicare premiums on the wealthy.

KRUGMAN: Yeah, it's tiny. They're -- what they've actually put on the table is almost nothing. All of the rest is just big talk. So how is the president supposed to negotiate with people who say, "Here's my demands. By the way, I can't give you any specifics. Just make me happy"?

STEPHANOPOULOS: You know, that is the point the White House keeps making, Mary, that they can't give the Republicans what they don't ask for.

MATALIN: That's completely mendacious, as was that. The Republicans have offered in theory and in specificity, for instance, to raise revenues, capping various deductions, not eliminating, but capping them, which the CBO says would raise $1.7 trillion over 10 years. They've been very specific...

KRUGMAN: Actually, that -- that -- that doesn't work.

MATALIN: You know, we have...

KRUGMAN: That kills charitable deductions. It hits the middle class hard. If you do it -- if you do it right -- we've done this, right...

MATALIN: Are you an economist or a polemicist?

(CROSSTALK)

KRUGMAN: There's only -- there's only $450 billion that you can get by doing that.

MATALIN: Do you want to talk about economy or do you want to talk about polemics?

KRUGMAN: No, this is not true.

MATALIN: We have two different ways of going forward. We will not have Medicare, we will not have Social Security. You have senior Democrat Dick Durbin saying Social Security is not costing us a penny. You have those congressmen, those Democrats saying that they're -- that Medicare, Medicare and Social Security are not the driver of this debt. Even the president disagrees with this.

What these guys should do -- Coburn is right -- this is meaningless. They should either give him 98 percent, let him eat that tax, or they should do what President Clinton proposed, which is -- like just extend it for three months and let the new Congress -- we have a new Congress. How is it fair that the outgoing Congress that lost is making this...

(CROSSTALK)

STEPHANOPOULOS: Well, they're the ones who voted for it.

CARVILLE: Yeah. First of all, what we want to do, what Paul and I want to do is we want to raise taxes. We want to raise tax rates. We're very clear on that. When you say you want to close loopholes, that does not count. You have to tell us which ones. Just a generic thing, to say, we're going to close loopholes, are you going to close charitable? Are you going to close home mortgage? Are you going to close state and local deductions (inaudible) sales rate and local finance? What is it that you're going to do?

MATALIN: All of the above.

CARVILLE: It's a generic statement is -- is doesn't count. We are very clear about what we want to do. We're not enhancing revenue or anything. We're talking about raising taxes.

KRUGMAN: By the way, one thing that had me mad was when Hensarling was talking, he said, well, the president hasn't proposed any specific spending cuts. Look at that proposal. It's got very specific cuts. I mean, it's...

(CROSSTALK)

KRUGMAN: ... not going to happen. No, no, the stuff that's in -- looking forward, there are major Medicare spending cuts. There are cuts -- mostly falling on providers, not on -- not on beneficiaries. But there's -- there's a lot of detail in there. I mean, this is a...

(CROSSTALK)

MATALIN: ... Professor, if you cut a provider, that doesn't cut the beneficiary? Is that an economic reality?

KRUGMAN: No, it doesn't, actually.

MATALIN: If you cut provider, you're going to cut with a beneficiary.

KRUGMAN: Not true. Not true in this case.

(CROSSTALK)

DOWD: ... you know I've spent a lot of time out in the country. I was in Norfolk talking to a whole bunch of folks about this. To me, this is really not a fiscal problem. This is actually a really leadership problem.

If you watch that -- watch what happened just right before we came on. The American public sees that and says, what's going on in Washington? What values do we stand for as a country? What do we really stand for?

With both sides basically taking out positions, where everybody -- where the American public is basically a pawn in the positions of both sides in this. And so if you ask yourself, if both sides sat down and asked themselves what values do we stand for, what do we represent -- do we represent a value of shared sacrifice? Do we represent a value of balanced budgets and fiscal responsibility? And even though people make the argument, like Paul does, that we don't need to worry about that, we try to convey values to the American public so that we say this is what we stand for.

STEPHANOPOULOS: But to go to George's point, every time the value of shared sacrifice is presented to the public, they seem to reject it pretty resoundingly.

DOWD: Well, that's because we keep -- Washington, D.C., keeps telling the American people you can have your cake and eat it, too. We keep saying that America -- it's the American public's fault, if they just want all these things. But we keep -- as leaders keep telling them the exact same thing we tell them not to do. We tell them it.

WILL: You know, this is exactly what we're doing. We are giving the American people $10 worth of government and charging them about $6.50 for it. And of course they think it's a good deal. We have made big government cheap.

It seems to me, Paul, first of all, you may not like the Ryan budget. You've made that clear over time. But the House has twice passed the Ryan budget and sent it to the -- to the Senate. They could have acted on it.

KRUGMAN: But the Ryan budget is full of -- is full of magic asterisks, too. It's not a real budget. It's a fake document. I mean, I'm amazed that people haven't gotten that. You know, we're now a couple of years into the Ryan thing, and the fact that he doesn't actually present real budgets.

WILL: Well, look, I have yet to -- I have yet to encounter someone who disagrees with you who you don't think is a knave or corrupt or a corrupt knave.

KRUGMAN: No, I've got some people. But anyway...

WILL: But, anyway, specifics have, indeed, been offered. But again the question is, are the American people ideologically and rhetorically conservative, but operationally liberal? We're in the process of calling some bluffs.

CARVILLE: George, I wrote a book about this. People -- we have not grown incomes in this country to any degree since the '70s. And people have watched this come, and they've watched wars come, and they've watched tax cuts come, and they've watched bailouts come, and their incomes having gone down, and then somebody comes up and says right now, after the election, "You're the cause of this. You're going to -- we're going to" -- and, you know, if they cut Medicare and Social Security without really laying a predicate, they're going to have a clock-like (ph) reaction to that.

And people are saying, why am I paying for all of the mistakes that these guys made over the last 30 years? I've had no growth in my income, and the top 1 percent has had 250 percent. That's what the average guy thinks out there.

DOWD: That's -- that's -- that's half...

(CROSSTALK)

CARVILLE: And I don't know if that's -- I don't -- I can't tell him he's wrong.

DOWD: That's half-true. That's half-true.

CARVILLE: OK...

DOWD: And then the other side says, you know who's at fault in this? It's those rich people who are at fault, and we're find a way to solve all your problems, and you're not going to have to share sacrifice if we just tax the rich more. What I'm saying is, is both sides have to actually come to the conclusion that if we want to tell the American public that balancing your checkbook is a good idea, having a sense of shared sacrifice is a good idea, personal responsibility is a good idea, helping your community is a good idea, Washington, D.C., ought to act on all of those same values that we want the American public in their neighborhoods to act on.

CARVILLE: But the people who are going to a lot of them share those values. A lot of people sat there and worked hard and played by the rules and saw their income stagnate or go down, and they saw the deficit go up, and they saw bad wars and bad decisions being made. And now we want them to pay for it, and they're not overly happy about it, and I can't blame them.

STEPHANOPOULOS: And this does present, I think, a political problem, Mary, for the Republicans on this. The tax increases for the 98 percent, that happens on January 1st. It does seem very difficult you're going to get all of this resolved by December 31st. So doesn't that put the pressure...

MATALIN: It makes -- that makes my point. I'm taking the Clinton position here, that to try to -- with the president repeatedly wasting week after week after week to -- to have a political -- be able to blame the Republicans politically for this, doesn't -- that's the problem. All of this -- Medicaid's a problem. All the structural debt is a problem. We do have declining wages. They've declined faster under the Obama recovery than under the Bush recession, but that's a whole separate problem that goes to education, goes to regulatory reform, goes to tax reform. It's all of a piece. You can't just take this piecemeal.

Republicans will have a problem if they capitulate on their principles. And I'll just make one little point. The reality in the real world, the Republicans, while we're looking dismal at the federal level, have won the majority of governorships and the majority of state legislatures. And in those cases, they are lowering taxes. They are flattening the tax rates. They are balancing their budgets and they're creating jobs and growing their economies at twice the rate of this Keynesian lunacy that the president continues to pursue.

KRUGMAN: Can I just make a...

(CROSSTALK)

STEPHANOPOULOS: Make a point, and then we've got to take a break.

KRUGMAN: Piecemeal is actually the way to deal with this. We have a short-run problem, which is purely a political problem, about this fiscal cliff. Has nothing to do with the bondholding. It has nothing to do with the debt. We should solve that and then work on whatever our long-term solution is going to be.

STEPHANOPOULOS: We got to take a break. Lots more roundtable ahead. We're going to get their take on the Supreme Court and gay marriage. Plus, why did a Tea Party star quit the Senate? What does it mean for the GOP? And Hillary's next move. The world is her oyster now, but what does she want?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CLINTON: I'm, frankly, looking forward to returning to living a life that enjoys a lot of simple pleasures and gives me time for family and friends.

RYAN: Marco is joining an elite group of past recipients for this award. Two of us so far. I'll see you at the reunion dinner, table for two. You know any good diners in New Hampshire or Iowa?

RUBIO: Paul, thank you for your invitation for lunch in Iowa and New Hampshire. But I will not stand by and watch the people of South Carolina ignored.

(END VIDEO CLIP)

STEPHANOPOULOS: The joking and the jockeying have already begun for 2016. We're going to get to that in a little bit with our roundtable. Let me reintroduce everyone, George Will, Paul Krugman of the New York Times, Matthew Dowd, James Carville, and Mary Matalin.

I do want to get to that, George. But, first, some big news out of the Supreme Court on Friday. They took up two big gay marriage cases, one on the Defense of Marriage Act, which denies federal benefits to couples that are legally married in various states, but perhaps more interestingly, they took up the Proposition 8 case, which banned gay marriage in California, which at least leaves open the possibility that they get to the underlying question, whether gay marriage is a guaranteed right under the Constitution.

WILL: As part of equal protection. Peter Finley Dunne, great American humorist, created a man named Mr. Dooley, who famously said the Supreme Court follows the election returns. This decision by the Supreme Court came 31 days after an Election Day in which three states for the first time endorsed same-sex marriage at the ballot box -- never happened before -- Maine, Maryland, and the state of Washington.

Now, the question is, how will that influence the court? It could make them say it's not necessary for us to go here. They don't want to do what they did with abortion. The country was having a constructive accommodation on abortion, liberalizing abortion laws. The court yanked the subject out of democratic discourse and embittered the argument. They may say we don't want to do that, we can just let the democracy take care of this.

On the other hand, they could say it's now safe to look at this because there is something like an emerging consensus. Quite literally, the opposition to gay marriage is dying. It's old people.

STEPHANOPOULOS: That is true. At the same time, James Carville, right now at least -- and this might argue for the split-the-difference position that George talked about -- 41 states still outlaw gay marriage.

CARVILLE: Yeah. And I think George's right. It depends on whether they're going to go, you know, to allow this to happen. But, I mean, his larger point is absolutely correct. The election just matters in profound ways that we can't believe.

Look in Salt Lake City, the 12 Apostles. The Mormon Church after the election says, well, maybe we're going to change our position on homosexuality is a choice, you're not born that way. I mean, the effects of an election reverberate all the way through society. And this is just one of these that did. I cannot believe that they took this up. The fact that they took it up just tells me instinctively that they're going to uphold some...

(CROSSTALK)

STEPHANOPOULOS: And, really, not just -- not just the election. We see it -- the trend has been pretty clear here over the last dozen years. I want to show this Pew poll, it shows right now, back in 2001, 57 percent of the country opposed gay marriage, only 35 percent were for. This year, it's crossed, the lines have crossed, 48 percent approaching, you know, going above 50 percent, 48 percent now support gay marriage in the country.

MATALIN: Right, well, because Americans have common sense. There are important constitutional, biological, theological, ontological questions relative to homosexual marriage, but people who live in the real world say the greatest threat to civil order is heterosexuals who don't get married and are making babies. That's an epidemic in crisis proportions. That is irrefutably more problematic for our culture than homosexuals getting married.

So I find this an important dancing on the head of a pin argument, but in real life, looking down 30 years from now, real people understand the consequences of so many babies being born out of wedlock, to the economy and to the morality...

(CROSSTALK)

KRUGMAN: By the way, that chart -- I don't know why they highlighted 2001, because it was actually a wider gap in 2004. And gay marriage was a losing thing for Democrats in 2004, and it's now a winning thing. That's amazing. Eight years, this country has changed dramatically.

(CROSSTALK)

STEPHANOPOULOS: So you think it's gone beyond neutral. You think it's winning?

KRUGMAN: I think -- yeah, I think it's actually -- it's actually a positive, because this is a significant bloc of voters that will make a decision based on which party they see as being favorable to equal rights here.

DOWD: To me, this -- the consensus has already emerged on this issue. It's just a question of who's going to -- is the Supreme Court going to catch up and follow that wind of the pack...

STEPHANOPOULOS: Or get ahead of it.

DOWD: ... or get ahead of it or put a block in the path of it. I mean, if you take a look at this, there is still a division in this country over this issue, but there is no division in this country among people under 35 or 30 years old on this issue. There is no division.

Now, I have a perfect example. My son went in the Army. They asked him -- 10 years before, they'd ask everybody to raise that hands, 300 guys raise their hand, who's for gay -- who's for gays in the military? Eighty percent of the troops said we're opposed to gays in the military. When he got in, five or six years later, 80 percent said they were for gays in the military. It had changed that much and that quick.

To me, we still -- you still have to know there's a huge group of folks in this country that believe this issue is not ready to be settled nationally, and they're over 35, they go to church regularly, they still view marriage as traditional and all that, but in the end, this issue, five years from now is even going to be more settled, 10 years from now is going to be more settled.

STEPHANOPOULOS: And interestingly, George Will, that is still the president's position. Even when he came out in support of gay marriage, he didn't come out for a complete federal solution. He was saying -- and he didn't say that it was a right guaranteed by the Constitution. He said let the states continue to decide this.

WILL: Well, marriage law is traditionally the prerogative of the states, but let's put a human face on this. One of the two cases concerns a New York woman who married in Canada her female partner. They lived together 44 years. The partner dies. As because the partner wasn't a man, the woman is hit with a $363,000 tax bill from the federal government. There are a thousand or more federal laws or programs that are at stake here. And the more the welfare state envelops us in regulations and benefits, the more the equal protection argument weighs in, and maybe decisively.

STEPHANOPOULOS: It's hard to see how the Supreme Court is going to allow the Defense of Marriage Act to continue to deny those benefits.

Let's move on right now. A surprise in Washington this week, something of a surprise. Senator Jim DeMint of South Carolina, conservative of South Carolina, left the Senate to become the head of the Heritage Foundation, ended up having -- created a big debate over does he have more influence inside or outside the Senate. He had this colloquy with Rush Limbaugh.

(BEGIN VIDEO CLIP)

DEMINT: I believe that I can do more good for the conservative movement outside of the Senate.

LIMBAUGH: Well, I think it's safe to say, Boehner is not forcing either of you guys out, right?

FEULNER: That's pretty true.

DEMINT: It might work a little bit the other way, Rush.

(LAUGHTER)

LIMBAUGH: All right.

(END VIDEO CLIP)

STEPHANOPOULOS: That was Ed Feulner, the current head of the Heritage Foundation, Mary Matalin. So do you think DeMint made the right choice if he wants to have more influence?

MATALIN: Yes, absolutely. As our hero, Keynes, once said, ideas drive history. Ideas drive progress. And Heritage has long been a fount of so much -- so many great ideas. And they have -- they're respected. And they're cutting-edge. We find in Congress, all of us have worked in Congress or the White House, is it's a laborious, piecemeal process. These guys have big ideas and they have big frameworks, and he, as a conservative, as a constitutionalist, that was a brilliant move, a good move for us, a brilliant move for him, and it also leaves Nikki Haley, Governor Haley, an opportunity to fulfill her legacy, her vision of real legislative reform and real economic reform by appointing somebody like Tim Scott in his place.

STEPHANOPOULOS: Who will become the first African-American -- the only African-American in the Senate right now and the only African-American Republican.

KRUGMAN: The actual Keynes quote is -- he said that ideas which are dangerous for good or evil. I guess I got a view (ph) in this case. The thing -- I'm more interested in, what does this do to Heritage? I mean, this is somebody who has no -- you know, no sense that he's a researcher or an academic, anything like that. This is sort of taking the think out of the think-tank, right? This is -- this is turning into a purely political institution.

MATALIN: Putting the polemics into your...

KRUGMAN: Well, there we are.

STEPHANOPOULOS: George, you were there at the beginning, sort of, at the Heritage Foundation.

WILL: It is the established myth at Heritage that 40 years ago this year I was crucial to establishing Heritage because I was working for Senator Gordon Allott, a Republican from Colorado, and a letter came from Joe Coors, very generous to conservative causes, the beer family in Colorado. And he said, I've got a quarter of a million dollars and I want to do something to disseminate conservative ideas. I was out of the office that day, which was a good thing, because I wouldn't have known what to do with it.

Instead, it went to Gordon Allott's press secretary, a young man named Paul Weyrich, who knew exactly what to do with it, got Ed Feulner, and a few years later, they opened the Heritage Foundation. This was an important part of conservativism building an alternative intellectual infrastructure. Liberals have the media, they have academia, they've got the -- they've got Hollywood. Conservatives said, "Let's build our own."

STEPHANOPOULOS: Meanwhile, right now, George -- I mean, James, it seems like parts of that infrastructure turning on each other.

CARVILLE: Yeah, it is. But the interesting part of that infrastructure I think is when Dick Armey left the Tea Party or FreedomWorks, he had an $8 million severance package. I mean, I've been in the wrong business. I mean, nobody...

(LAUGHTER)

(CROSSTALK)

CARVILLE: And at the same time, Senator DeMint, who is not, by the way, ever been thought of as a big thinker -- this is a guy who thought that unmarried schoolteachers, if you were unmarried and living with somebody, you shouldn't be able to teach in schools. I mean, this is what we're dealing with.

STEPHANOPOULOS: But he did have big influence in the Senate.

CARVILLE: He had big influence. I mean, he was -- but he didn't -- he was not a big idea guy. He's a very gutsy guy. And he -- you know, you're not a big -- you're not a big idea man if you're for Christine O'Donnell or Sharron Angle. But he was gutsy, I'll give him that.

DOWD: Well, that's what I was going to say. Two things. First thing, his biggest influence was keeping the Democrats in the majority in the Senate, which is what his -- when his backed candidates basically didn't allow Republicans to win in certain campaigns.

But let me just make a bigger point. I think this is actually a very sad commentary on our politics today, because here you have a guy that was a well-established U.S. senator with tremendous amount of experience in a deliberative body that was supposed to be respected in the world. He leaves that deliberative body as a U.S. senator and now becomes the head of a think-tank, or whatever way we describe it.

It is, I think, epidemic in our -- in our political -- we now have campaign people who used to love to work for presidential campaigns that now think their best route to success is working for Super PACs. And so as we keep stepping further and further away and people's success in politics is now no longer viewed as I'm going to hold office and I'm going to do something good. They now think they can't do that anymore in Washington, holding the office. They now have to leave in order to have more influence in Washington.

KRUGMAN: Yes, I mean, but it's partly -- it's the extreme partisanship. I mean, all that really matters for the most part in Congress is whether you've got an R or a D after your name. And since DeMint is going to be replaced by somebody else with an R after his name, he can have a lot more influence by moving off to this think-tank and, of course, increase his salary about 400 percent.

STEPHANOPOULOS: Meanwhile, there has been this real debate over where the Republicans go after the election, what the Republican vision should be, and there were two serious speeches this week by Paul Ryan and Marco Rubio at the American Enterprise Institute where they took on that challenge.

(BEGIN VIDEO CLIP)

RYAN: Both parties tend to divide Americans into our voters and their voters. Let's be really clear: Republicans must steer far clear of that trap.

RUBIO: I've heard it suggested that the problem is that the American people have changed, that too many people want things from government. But I'm still convinced that the overwhelming majority of our people, they just want what my parents had: a chance.

(END VIDEO CLIP)

STEPHANOPOULOS: George Will, I think Marco Rubio used the phrase -- term "middle class" more than two dozen times in that speech.

WILL: Yeah. Usually the forgotten middle class, and it's all we talk about, is the forgotten middle class. The Republicans' problem is the national problem, and it's the one James was talking about, the sense of stagnation among Americans who are not on the ladder of upward mobility right now, the widening disparities, health care costs and the cost of that which puts you on the ladder, the cost of college.

In about four or five weeks, we are going to pass a milestone, where we will have $1 trillion of student debt. That's more than credit card debt in this country. Two-thirds of kids leave college with student debt, average $29,000 a person. They're graduating from college with a mortgage already. How are they going to buy houses, form families, and all the rest? That's what the...

(CROSSTALK)

STEPHANOPOULOS: One of the big ideas Marco Rubio was talking about there, though, was making sure that there was a lot more transparency as people -- as kids are taking out those loans.

KRUGMAN: Yeah, well, sure. I mean, that -- I wouldn't have said there were any big ideas. I thought that what was really striking about both speeches was that they were both saying, "We need to reach out to lower-income working Americans, and the way we do that is by explaining to them really carefully that tax cuts for the rich are actually good for them." I mean, it was -- there were no substantive policy changes in either speech. It was really amazing stuff. It was -- it's showing how difficult the GOP's position is.

DOWD: Well, the GOP is in a very difficult position, because the American country has changed, and the Republican brand and their candidates today are -- in elections up until (ph) November do not match where the country is, just fundamentally the American electorate looks much different than the Republican...

MATALIN: Can I -- wait...

DOWD: Wait a sec, Mary. One -- that looks fundamentally different than American -- I think they need to stake out a ground that basically says we not only look different, we're going to say things different. And they have to -- in my view, the best match (ph) they can have -- which I know they're probably not going to do -- is they have to run against Washington and run against Wall Street. They have to become the party of the middle class. And whether they look it, Marco Rubio looks it, or Governor Christie looks different than what normal people look, their brand has to change if they're going to win elections.

STEPHANOPOULOS: You were just shaking your head (ph), Mary.

MATALIN: You just say one of those guys don't look like normal people. That's the difference between conservatives and liberals. Ideas are dangerous for good or evil.

Can I just say we're missing the reality here? The federal officeholders are not the entirety of our government. We have governors. We have legislators. We have mayors who are making progress in all kinds of states, and all kinds of different people are stepping up to run for office. And Rubio and Ryan are very deep in policy, and they're the policies that have been reflected in huge successes, in Indiana and Wisconsin and across the country, and everywhere where Republicans are -- hold the majorities at the governorship level.

CARVILLE: George, it was an interesting week. They gave two speeches to the Kemp thing. They were speeches. They were written, and they were -- it was nice-looking guys. We say they take a good shower (ph).

They had a vote. They had a vote, and it was a treaty that Dick Thornburgh negotiated, that Bush pushed through, that everybody was about how you treat disabled people around the world. It was not enforceable. It was the most innocuous thing (inaudible) bring Dole down to the floor of the House. And somebody said, oh, if you pass this, they're going to break into your house and you're not going to be able to home-school your kid unless you have a ramp. Thirty-six Republicans voted out of fear that they're going to get primaried voted against this.

This is where the rubber meets the road, is they can give a speech, but when it comes time to vote -- and the same thing comes back, and they're going to -- need to break out of it, I thought the vote was the most illustrative thing of the week.

WILL: Just as an example of how the country is, as Mary suggests, mixed in its views right now. Next week, Michigan, the fifth-highest unionization rate, and not coincidentally the fifth-highest unemployment rate in the country, may become the 24th right-to-work state, the second in the industrial Midwest after Indiana. That tells you that the country is in a more interesting ferment.

My suggestion, Matt, Wall Street, Main Street, and all the rest, I will know the Republican Party is on the way back when they have the good sense to come out for breaking up the largest banks.

DOWD: Absolutely agree. Absolutely agree.

WILL: Good policy. And (inaudible) thing to do.

(CROSSTALK)

KRUGMAN: I'm not sure whether -- whether the GOP sold its soul to Wall Street or vice versa in this last election, but there was clearly -- that was -- Wall Street tends to be relatively Democratic in the past and now it is that close to the Republican Party...

(CROSSTALK)

STEPHANOPOULOS: ... well, at least some conservatives calling for it right now, this idea.

Meanwhile, at the same time, we've got -- front page of the New York Times this morning -- I guess it is never too early -- look at it right here, Hillary Clinton, 2016, that's -- all of her choices hinge on that. And we also did a poll at ABC News this week, pretty remarkable poll, that said that 57 percent of the country right now would actually support Hillary Clinton for president.

James Carville, of course, you worked closely with her for many, many years. I think it's safe to say that no one knows what she's going to do, but the point is...

(CROSSTALK)

STEPHANOPOULOS: ... every decision she makes now does -- she has to look at it through the prism of that bigger decision, right?

CARVILLE: Since 1944, if we would have been sitting here, Republicans have always craved order. And they've always looked for the lion tail (ph) to get behind. We've always been people that we want to fall in love. We're looking for the next argument (ph).

This is entirely different. Every Democrat I know says, "God, I hope she runs. We don't need a primary. Let's just go to post with this thing. We don't want to fight with anybody over anything."

The Republicans, they need a fight. Somebody's got to beat somebody. Somebody's going to -- and beating Herman Cain and Michele Bachmann don't count. You got to beat somebody good. You got to go through the difficult process...

(CROSSTALK)

CARVILLE: Yeah, you've got to beat somebody. And the Republicans know that they need a primary. We don't want -- we don't want a primary. We don't want to be slugging this thing out (inaudible) you know what? We've got a pretty good demographic deck. We kind of get -- we like winning presidential elections. She's popular. Let's just go with it.

(CROSSTALK)

STEPHANOPOULOS: Making Mary laugh over there.

MATALIN: Well, the idea that this just defies -- I love Hillary. I wish she would run. But it defies human nature to think that Democrats, even though they are redistributionist and utopians, would not be competitive, that Warner or all these other Democrats who've been waiting in the wings are going to have a dynasty, since Democrats are always complaining about these dynasties, they're going to have another Clinton step up, and everyone's going to go, yeah, step back? I don't think so.

Furthermore, the Democratic Party is split. Seventeen percent of them are extreme liberals, and then the rest of them are centrist. And the 2014 senators that are running are centrists. The ones that just got elected are centrists. So she would have to run with the country, which would alienate...

STEPHANOPOULOS: She bridges that divide right now.

KRUGMAN: Yeah, I think -- you know, what's happened is the extreme liberals -- I guess that would -- I talk to a lot of those guys...

(CROSSTALK)

KRUGMAN: ... they're also pragmatic. They compromised a lot on health care reform. You know, they said they wanted Medicare for all, but they were told to take Obamacare. And they would see Hillary Clinton as -- as someone who could continue to, you know, make incremental progress towards what they want. I've never seen this much love for...

(CROSSTALK)

DOWD: I do think the interesting -- I mean, the whole race in 2016 right now pivots off of her. I think that, whether or not other Democrats run, it's all going to pivot off of her. And even the Republicans to a degree are going to pivot off what she does.

To me, though, this is -- this is a moment where we are going to have a dominant woman candidate for president. Whether Hillary runs or not, if she doesn't run, another woman candidate will emerge. And I think Washington actually is in dire need of women's leadership in the Congress, because if you look at the competition and look at all the dynamics, I think we would -- this country would be served well if -- whether it's Hillary or somebody else, a woman candidate emerge as a dominant force in this country.

STEPHANOPOULOS: Twenty women in the Senate right now.

WILL: The junior senator from New York will be that woman, who is now occupying Hillary's seat, Senator Gillibrand.

STEPHANOPOULOS: And Hillary?

WILL: I have no clue, and I'm not going to think about presidential elections...

(CROSSTALK)

DOWD: He does not want to talk about 2016.

(LAUGHTER)

(CROSSTALK)

CARVILLE: I don't know what she's going to do, but I do know this: The Democrats want her to run. And I don't just mean a lot of Democrats. I mean a whole lot of Democrats, like 90 percent across the country. We just don't -- we just want to win. We think she's the best person and shut it down. And that's across the board.

(CROSSTALK)

STEPHANOPOULOS: And until then, it freezes the race for a long time, which is a blessing to George Will.

(CROSSTALK)

STEPHANOPOULOS: We have one more round coming up. Another pro football death overnight. How should the NFL handle its moment of crisis? That is coming right up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(UNKNOWN): The new tragedy in the NFL tonight.

(UNKNOWN): Cowboys nose tackle Josh Brent was arrested early this morning and faces a charge of intoxication, manslaughter.

(UNKNOWN): Jovan Belcher was supposed to be taking the field today for the Chiefs. That is not going to happen, however. Police say Belcher killed his girlfriend on Saturday and then killed himself in front of his coach.

(END VIDEO CLIP)

STEPHANOPOULOS: What a rough weekend for the NFL. Cover of Time magazine this week, Roger Goodell, the NFL commissioner, is there. The question, can Roger Goodell save football? And here's what they write.

Here's the tabloid reality facing Goodell's NFL. Given all the news about retired NFL players suffering from mental illness or killing themselves, while coping with brain damage associated with head trauma from playing football, it is natural to wonder, what if? The Belcher tragedy may be another warning sign.

George Will, are the pressures of pro football worth our cheers?

WILL: We may -- it may be a guilty pleasure, the way boxing now is. We don't look at boxing the way we used to, because we know what's happening to brain trauma. George, let me give you some numbers. In 1980, there were three NFL players who weighed more than 300 pounds. In 2011, there were 352 over 300 pounds.

Football is played basically within 10 yards of other side of the line of scrimmage. And in that 20 yards, these big men are quick as cats. And the kinetic energy is such that you -- the body is simply not made for it. Last year, 31 of 32 NFL offensive lines averaged more than 300 pounds. I don't think the body's made for it. And I think these men are paying a terrible price.

CARVILLE: Well (inaudible) Super Bowl in 2013 in New Orleans. And just to demonstrate the fact that I'm never going to run for public office in Louisiana, the commissioner is a friend of mine, and I like the commissioner.

(LAUGHTER)

So that's (inaudible)

STEPHANOPOULOS: But that on the table.

CARVILLE: Having said that, I think he knows that he's dealing with a major problem. He's very upfront about it. And now we're talking about eliminating kickoffs. I wouldn't be surprised if...

STEPHANOPOULOS: Do you think that it's going to happen?

CARVILLE: Well, they think -- some people say the three-point stance could be gone, that linemen -- that people may just start from -- I don't know if that's going to happen. But you know what he's not doing? And I give him a lot of credit for this. He's not denying it. He's upfront. It's a huge game. It's a wonderful game. But it -- this is a real problem. This head trauma is a real problem. And he's not denying it. And I don't think any other person would deny that.

DOWD: This is -- I mean, this is a huge problem. And I'm going to be upfront. I'm a long-time-suffering Detroit Lion fan, so like eliminating football in some ways is not going to affect our city all that much, since we've never won.

I have three boys, and two of them played -- and I live in Austin, Texas, home of "Friday Night Lights." Football is like a religion there. My two oldest played football. I actually encouraged my youngest one to play lacrosse instead of football because of the risk of injury and what happens in football.

I think the commissioner is -- basically, all he's done is window-dressing. On the flight down here, I sat right next to Earl Campbell, the Tyler Rose, who was a dominant force -- he had to come on the plane on a wheelchair. He had to come on the plane -- and he could barely get up to even walk to the bathroom. His knees were shot. His hands were shot.

And I don't think the NFL has done their players right and done the country right by dealing with this. They have not dealt with the brain injuries that have happened in this country. They keep doing things -- they're going to eliminate the kickoff. They're -- when they know there's a fundamental problem here that they have not dealt with.

STEPHANOPOULOS: Ten seconds, George.

WILL: Change isn't going to come from the top down, from Goodell down. It's going to come from parents withdrawing their children from that sport.

CARVILLE: I'm sorry. I think he's done some things -- they have -- they have to wait out games. They have to be under evaluation. I don't want to be a suck-up to the commissioner, but I think he's taking this seriously.

STEPHANOPOULOS: That's going to have to be the last word. Thank you all very much.

And now we honor our fellow Americans who serve and sacrifice. This week, the Pentagon released the names of three soldiers and Marines killed in Afghanistan.

And finally, "Your Voice This Week." Henry Kinch, Jr., has today's question. How long is a second-term president relevant prior to lame-duck setting in?

Well, to quote Bill Clinton, "The president is always relevant." As commander-in-chief and chief executive, far and away the most powerful person in the country, even when leverage over Congress fades, which does happen. The window for real legislative success generally closes before the midterm elections.

But presidents have achieved a lot during years five and six. That's when Dwight Eisenhower signed the Civil Rights Act of 1957, Ronald Reagan forged a bipartisan compromise on tax reform in his sixth year, and Bill Clinton did the same with the Balanced Budget Act that put the U.S. on the road to surplus in 1997, all models for Barack Obama as he begins year five.

Send in your questions on Twitter @gstephanopoulos. And James and Mary are going to stick around and answer your tweets for this week's web extra.

That is all for us today. Thanks for sharing part of your Sunday with us. Check out "World News" with David Muir tonight, and I'll see you tomorrow on "GMA."

END

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