'This Week' Transcript: Sen. Jim DeMint

PHOTO: Senator Jim DeMint (R-SC) is interviewed on "This Week."

(BEGIN VIDEO CLIP)

AMANPOUR (voice-over): This week, start your engines. Campaign 2012 shifts into overdrive as Mitt Romney ramps up...

ROMNEY: Career politicians got us into this mess, and they simply don't know how to get us out.

AMANPOUR: ... Rick Perry cleans up...

STEPHANOPOULOS: What an August it has been for Texas Governor Rick Perry.

KARL: Rick Perry has transformed this race.

AMANPOUR: ... and Sarah Palin, well, that's anybody's guess.

PALIN: I want to tell you what my plan is.

AMANPOUR: Today, our headliner rates the field. I'll talk to South Carolina Senator Jim DeMint, who hosts the top candidates tomorrow. The Tea Party kingmaker on who he thinks has what it takes to beat Barack Obama.

And then, the big zero. Jobs flat line and the president faces his biggest test yet. What should he say next week when he addresses Congress and the American people? Our expert economic roundtable debates employment solutions.

Plus, it was the deadliest attack on American soil since 9/11. Now, the family of the Ft. Hood shooter speaks out in a "This Week" exclusive.

(WOODRUFF): If you had known what was possibly going to happen, would you have turned him in?

AMANPOUR: And we'll take you on an emotional tour of rarely-seen artifacts from the World Trade Center.

ANNOUNCER: Live from the Newseum in Washington, "This Week" with Christiane Amanpour starts right now.

(END VIDEO CLIP)

AMANPOUR: Welcome to the program. We've got lots to get to today, but first, some news since your morning papers.

Tropical Storm Lee makes landfall this morning, as the Gulf Coast braces for impact. Lee is expected to dump 10 to 15 inches of rain on the region. And ABC's Yunji De Nies is in New Orleans with the latest.

Good morning, Yunji. And, of course, nobody can look at New Orleans without remembering Katrina. What's happening there right now?

YUNJI DE NIES, ABC NEWS: Well, the rain has been incredible. It started two days ago, and it really has not stopped. It's putting the levee system and the drainage system here to the test, although so far, everything has been holding. The wind has also been incredible, with gusts of up to 60 miles per hour. Ten tornadoes have touched down along the Gulf Coast, though, thankfully, no one has been injured.

We've seen quite a bit of flooding in low-lying areas. On some roads, people opted for boats instead of cars. This is supposed to be the final holiday weekend of the summer, but across the Gulf Coast, much of it has been spent working, because people have been sandbagging to protect their homes. There are also big concerns about storm surge.

Take a look at this boat in Pass Christian, Mississippi. Firefighters tried to tie it down, but the surf was just too strong.

Now, the winds on the ground here are incredibly fast, but the storm itself is very slow-moving, just two miles an hour. That will mean this region and this city will get exactly what it does not need today: more rain and possibly more flooding.

Christiane?

AMANPOUR: Yunji, thanks so much for being with us there in New Orleans and keeping an eye on that.

Labor Day is the traditional kickoff of the campaign season, so get ready for a flurry of activity. There's a debate on Wednesday. And tomorrow, the leading Republican presidential candidates take center stage at a South Carolina forum, hosted by the state's powerful senator, Jim DeMint. Former Massachusetts Governor Mitt Romney was planning to skip the event, but he changed his mind when Rick Perry surged ahead in the polls.

Senator DeMint, of course, is a major force behind the Tea Party movement. His enforcement is one of the major prized of 2012. And he joins me now from Clemson, South Carolina.

Senator, thank you for being with us.

DEMINT: Christiane, it's great to be with you. And we're really looking forward to this forum, because it's set up in a very different style. Instead of the typical debate, with lots of candidates on stage, each candidate gets to spend 21 minutes on the stage by themselves to define themselves in their own terms. So I think folks all over the country will find it very interesting.

AMANPOUR: Well, let me ask you then for your view on the latest entrant into the race, and that is Texas Governor Rick Perry. Earlier this summer, you said you didn't know enough about him. Now can you tell me your views since he's been in the race and there's been a lot said by him over the last couple of weeks?

DEMINT: Well, I'm excited about our field. I think the more people find out about the Republican candidates, the more strengths they see. I think that's why a lot of people have hesitated to jump in. And it's good to give people a choice. So I'm glad Governor Perry jumped in.

But I'm going to withhold any endorsement or support for several months. It's really important to me to see how these candidates respond to the big issues of the day. I want to see not only their policy proposals, particularly as it relates to jobs, but I want to see how they respond to recommendations from this super-committee and what Congress is doing towards balancing the budget and other issues like that. That's going to play out over the next couple of months.

But this forum's going to be very helpful to me and others, because instead of forcing them to answer my questions, we are going to encourage them to define the issues on their own terms. This will give us a little bit deeper understanding on how they view the Constitution and their role as president.

AMANPOUR: Senator, I know you want to withhold an endorsement, but I do want to press you, because Rick Perry is the front-runner at the moment. And I want to know -- and particularly he's quite beloved of the Tea Party movement, of which you're a major force. What can you tell me? How do you feel, for instance, about his endorsement of Al Gore back in 1988, of his praising Hillary Clinton's and the Clinton health care plan? What do you feel about those stances?

DEMINT: Well, I want to find out more about him, obviously, but we know people change. Reagan was a Democrat. And I want to look at what the governor's done as governor of Texas, just as I'm going to try to dig into a lot of the issues, past, present and future policy proposals of all the candidates.

But I want to give them all a little room to change. I know I've changed some positions I had 10 years ago, because the country's in a very different situation. So I'm going to listen and look and do my -- do my homework. And I'm not counting any of them out at this point.

AMANPOUR: What about Governor Perry's stance on Social Security? In his book, which is now being pored over, as you can imagine, he basically called Social Security like a bad disease and a big failure. Do you think that is going to haunt him on the campaign trail?

DEMINT: Well, I want to hear him explain his views on that. I've developed a lot of reform proposals myself and been accused of trying to destroy Social Security, when the whole point was to try to save it. I think most people know that Social Security is bankrupt. And I believe the governor probably feels as I do: We need to keep our promises to seniors and offer better choices to younger workers.

But I want to hear him explain these things on his own terms. And so I think we'll learn a lot about that and other issues on Monday.

AMANPOUR: Well, just quickly to wrap up Governor Perry, do you like what you've seen so far? Is he the presumed front-runner for you?

DEMINT: Well, there are things I certainly like, just like I do with all the candidates. Like I said before, I see some good things, some strengths in a lot of the candidates. And the ones -- we're having -- we've got the top runners or the top tier there on Monday.

So I'm not making any real judgments, but there are things I like about all of them.

AMANPOUR: Now, you're being very cagey, Senator. Let me ask you about Governor Mitt Romney, who did earn your endorsement the last time he ran. He's having a lot of trouble with the Tea Party right now. He's decided to come to your forum, where he was going to skip it. Where do you think he needs to go in order to get Tea Party support? Do you think he'll get it?

DEMINT: Well, the Tea Party's being thrown around a lot today, but for everyone who calls him a Tea Party -- themselves a Tea Party member, there are hundreds of people who have the same concerns about our spending and our debt. We know over 70 percent of Americans want to balance the budget.

So it's not one, small group. What it is, is just thousands of groups around the country who are concerned about the future of our country. I think it's one of the best things that's happened to our country and to politics, because there's a broad cross-section of Americans involved in citizen activism today. And some are called Tea Party; some are not.

But all the candidates are going to have to appeal to this new grassroots movement. And that's really what I'm looking for. I'm not trying to anoint any candidate. I'm looking at which one really catches the attention and inspires the average American, who has gotten involved with politics and the political process.

So that's key to me. Any of these candidates are going to have to appeal to those Americans who are unified, particularly around fiscal issues.

AMANPOUR: Talking about fiscal issues, President Obama is going to be making a big speech towards a joint session of Congress this week. Do you expect him to make any proposals that will win Republican support?

DEMINT: Well, I'm, frankly, very tired of speeches. I don't want to be disrespectful to the president, but what I want to see is something in writing and that the Congressional Budget Office tells us what it's going to cost so that we can not only read it ourselves, but the American people can read it.

Speeches, we've found, are not very similar to the actual legislation. So I'm pretty frustrated with the speech idea. And, frankly, the things that have been leaking out of the White House, none of them are like what I've been hearing from businesses all over the country. You know, extending unemployment, cutting payroll taxes, offering tax credits when you hire someone, I haven't heard one business say things like this.

What they want is some certainty. They want the regulators off their back. They want the National Labor Relations Board to stop pushing the union agenda and try to help companies that create jobs.

So I don't think the president is going to come out with things that are really going to create jobs. I'm afraid it's just pandering to his base.

But if he'll send a written proposal, I'll give it every chance, in -- but I'm not interested in his speech right now. And as the Congressional Budget Office said, we can't score a speech. We can't tell him what it's going to cost or what it's going to do.

AMANPOUR: Senator DeMint, thank you so much for joining us from South Carolina.

AMANPOUR: And we'll certainly be watching his candidate forum tomorrow. And so, no doubt, will our roundtable. With me today, Michael Gerson, a former speechwriter for President George W. Bush and a columnist for the Washington Post; Clarence Page, who writes a column for the Chicago Tribune; Dana Loesch, editor at BigJournalism.com and a founder of the St. Louis Tea Party; and ABC's senior political correspondent Jon Karl.

Jon, let me turn to you first. You know, tried to get some sort of determination out of Senator DeMint, but keeping his powder dry. Given that, what do Governor Perry and Governor Romney have to do to break out of the current situation?

KARL: Well, frankly, you've seen the polls that show that Perry has just shot to the top. We don't know how real this is. This is the month we'll find out whether or not he is truly the front-runner.

We have three debates over the next three weeks. Perry has taken off because he's got this record as the jobs governor in Texas and he speaks the Tea Party language, but there is the biggest oppo file on Rick Perry than of all the other candidates. He's got the longest record. You alluded to his book. He's got the most that can be attacked. We'll see over the next three weeks whether or not he can survive it.

AMANPOUR: Well, you just alluded to polls. Let me just put them up. The latest Quinnipiac poll has Rick Perry six points ahead of Mitt Romney. The CNN poll shows an even wider gap.

Michael, good news for Rick Perry, but the Republican establishment, as Jon alluded to, because of all that oppo, must be quite worried about it.

GERSON: No, I think there are some worries. This is a remarkable rise. He has gotten support not just from the Tea Party, but actually from a lot of establishment Republicans in these polls.

But they're just getting to know him. The Tea Party people could have questions of their own. He supported TARP. You mentioned some of these other issues. And the establishment is already having questions about his book and other things, with views that seem odd or extreme. He opposes the direct election of senators, apparently, which is, you know, a interesting position to take.

KARL: Big populist issue, yes.

(LAUGHTER)

GERSON: Right, exactly. But I would say that every front-runner has to be wary of the Giuliani fate. Giuliani led in all the polls the last time. He ended up with one delegate at the convention. You know, this can change very quickly.

AMANPOUR: You said it's a remarkable sort of rise. Is it remarkable like Michele Bachmann was remarkable when she entered? Or is it beyond that?

GERSON: Well, I think it's a little bit beyond that. I think he has a serious governing record. I think his appeal on jobs is a real advantage in this case. I don't think this is necessarily a bubble. I think he's going to be serious.

And I think that Romney may want people like Palin getting in the race, in order to divide and create an inter-Tea Party rivalry, you know, going forward. But I think Perry's been very good at marginalizing Bachmann. It shows that he's a savvy politician. And, you know, that's a real achievement so far.

AMANPOUR: We'll get to Palin in a second, but, Dana, I wanted to ask you, again, alluding to some of the things that Governor Perry has said. And he is a Tea Party favorite, and yet he's talked about Social Security, he's talked about it as a crumbling monument to the failure of the New Deal. But we know and the polls show that 87 percent of Americans believe, of course, Social Security has been good for the country. Does that not put him completely out of step with the rest of the country on this major issue?

LOESCH: Not really, because I think that what he wants to do is reform Social Security and hopefully take it out of the hands of the government and allow people to be able to decide what they want to do with their own money.

And that's something that grassroots has always been supportive of. We trust ourselves more than we trust the government. And the government has done a horrible job. They said this money was supposed to be there for people who are my parents' age, who are my aunts' and uncles' age. This money was supposed to be there for them when they retired. It was supposedly put in some sort of lockbox. And then when you open the box, when these people hit retirement age, it's not there anymore.

So I think that this is something that grassroots has pushed for. I think Perry is beginning to speak to that. That's not to say, though, however, that there are other issues that I think that he, over the next -- the course of the next several weeks, he's going to have to answer to, to grassroots.

AMANPOUR: Such as?

LOESCH: Well, I think -- well, for one, his stance on immigration. He's spoken out against building a fence at the border. And I think there's also, too, a lot of people want to talk about Reagan during this political time, but some of Perry's stances on immigration, frankly, aren't all of that different from where Reagan stood on immigration.

We have to remember the immigration bill that was signed into law by Reagan in '86. Reagan was very proud of that, but the difference is, is that Reagan wanted to support a strong border, not just amnesty. And Perry doesn't match up on that. So he's got a lot of answering to do.

AMANPOUR: Clarence, you've written today's column on the Social Security issue. You just heard what Dana said, take it out of the hands of government, and it's just a way of Perry saying he wants to reform it. But how difficult do you think his record, his written record on what he thinks about Social Security is going to be for him?

PAGE: Actually, his written record, he's been very consistent about -- more consistent than his own press spokesman who told us in the media a week or so ago, don't take that book seriously. He wasn't planning on running for president then. And then Perry came out across Iowa, stopped saying, "Oh, yeah, read my book. That'll show you how I feel."

His book is very explicit. Dana's right. He wants to take Social Security out of the hands of federal government, put it in the hands of the states. As Michael wrote eloquently this week, he spoke with great admiration of a temporary program that for a couple of counties in Texas that were able to -- to opt out of Social Security program.

This will not go well with regular Americans. Now, with all due respect, the term grassroots, I had a city editor years ago who said never use the term grassroots, because it is meaningless. Everybody has their grassroots.

The fact is, most -- well, President George W. Bush went around campaigning for a program that would just offer us the option of investing part of our Social Security contribution in the stock market. The more he talked about it, the less popular it became. It died on Capitol Hill.

And Perry calls it a "Ponzi scheme." You know what a Ponzi scheme is? Bernie Madoff, wizard of Wall Street.

KARL: Well, he invokes Bernie Madoff in the book. But, you know, I've got to say...

PAGE: He wants to put more money -- well (inaudible) he wants us to put more money in Wall Street, where Bernie Madoff is. The average American I don't think right now is ready to go for that kind of a radical move.

KARL: But -- but -- but to Dana's point, I think that some of this rhetoric may actually help him with the base that he's trying to excite.

(CROSSTALK)

KARL: But -- but he's going to have some problems. You know, at some point during one of these debates, one of the candidates, maybe it'll be Mitt Romney, will stand up and say, there's only one candidate on the stage here who has voted for tax increases, including the biggest tax increase in the history of Texas. Now, that was Rick Perry. It was a long time ago. He was a Democrat. But this will be an issue. There will be issues that the Tea Party, that hard-right conservatives will go at Rick Perry over.

AMANPOUR: Well, you just mentioned Mitt Romney, who, of course, was the front-runner until Rick Perry jumped in. Where does he need to go now? He's sort of been coasting on his record and being the presumed front-runner. What does he need to do tomorrow and in the coming days and in these debates?

KARL: They know that they've got an issue here. Look, for three years, Christiane, Mitt Romney has been essentially the front-runner in this race. Before he officially declared, he has been the front-runner. He has been the guy, but suddenly this has changed.

And like I said, we'll see over the next month whether it really has changed, but they know that they're going to have to go after Rick Perry. They could sit back when Tim Pawlenty was the big threat. They could kind of let it play out. You can't do that when you're running against Rick Perry. And they know it.

AMANPOUR: And, Michael, I mean, again, let's get to primaries versus general election. Can Rick Perry -- or is it dangerous for the Republican Party to -- to sort of let Mitt Romney slip behind?

GERSON: Well, I think that there's a serious amount of discontent with the field. I don't think Republicans regard this as a strong field. So there is still talk of people getting in the race, not just Palin, but last week, Governor Chris Christie of New Jersey was in Chicago, had two meetings with serious Republican groups from the Midwest.

AMANPOUR: Even though he's said no, no, no, no, no?

GERSON: He's actively, I think, considering getting in this race, which would throw things open once more. But the desire for that to happen, for people like Paul Ryan, who are pushing this to happen, it shows that they're not happy with the current field. They think that it needs to be filled out in important ways. But I don't know if that's going to happen, but the desire for many Republicans to expand this field shows that they're not content with the field.

AMANPOUR: All right. Well, let's play something that Sarah Palin said at her rally in -- yesterday when she was out talking. Let's see what she said about this race.

(BEGIN VIDEO CLIP)

PALIN: The challenge is not simply to replace Obama in 2012, but the real challenge is who and what we will replace him with, because it's not enough.

(END VIDEO CLIP)

AMANPOUR: So, Jon, conventional wisdom is that maybe she's left it too long, but you're hearing different, right? Do you think she's going to jump in?

KARL: I think it is more likely that she jumps in than most of us have thought for a long time. We really don't know.

But I will tell you this: For months and months and months, it has been accurate to say that Sarah Palin has been teasing publicly, but has done nothing behind the scenes to prepare for an actual presidential run. I do not believe that is still the case. I think that she is -- she is laying the groundwork to decide, yes.

AMANPOUR: Where do you see that?

KARL: I -- I -- I think that she's beginning to look at what she would have to do to staff up the campaign. I think she's looking at what she'd have to do to actually establish a campaign organization, which she has done absolutely nothing until now.

AMANPOUR: So would that bring you great hope if she jumps in? I mean, look at her negatives. They're very, very high.

LOESCH: I think that she does have a little bit to overcome, in terms of -- I know that there was the Fox News poll which came out, and there was also an independent study which was done in conjunction with that, that also looked at Republican voters to see who they would or would not choose.

I think -- but we're still -- I mean, we're still really early on into this race, so anything is possible. I mean, and when I say anything is possible, I mean, when you look at the polls right now, the last poll that was released showed generic Republican candidate was beating this president in the polls.

KARL: That's who they should nominate.

LOESCH: So I think that we do -- I think that we do have a strong field. I do really think that we do have a strong field. But whether or not we're going to end up with someone that is speaking to the base -- because I think not only is this election going to be a referendum on Obama's first term, but this is also going to be a referendum on the Republican Party.

This is the Republican Party's decision right now. Who are they going to put forward? Are they going to keep going with the same Bush policies that helped create the Tea Party? Or are they actually going to put forward a real conservative, real Republican candidate, and actually unite the right once and for all? That's the question.

AMANPOUR: We're going to get to President Obama in our next panel, but thank you all very much for joining us. And the roundtable will continue in the green room at abcnews.com.

We've done the politics, as I say, but up next, the policy behind the jobs plan that President Obama will outline on Thursday. Will it be enough to put America back to work? A powerhouse roundtable of economic experts weighs in next.

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OBAMA: Next week, I will be laying out a series of steps that Congress can take immediately. These are bipartisan ideas that ought to be the kind of proposals that everybody can get behind, no matter what your political affiliation might be. So my hope and expectation is that we can put country before party and get something done for the American people.

(END VIDEO CLIP)

AMANPOUR: That's President Obama promising a jobs plan with something for everyone. But as details of the speech leaked out, there are real questions about whether his proposals will go far enough and whether he can count on any support from Republicans in Congress.

Joining me now to discuss the scenarios, Doug Holtz-Eakin, former director of the Congressional Budget Office, and he's now president of the American Action Forum; Nobel Prize-winning economist Paul Krugman, a columnist for the New York Times; Carol Lee, who covers the White House for the Wall Street Journal; and Jared Bernstein, who stepped down as Vice President Biden's top economic adviser earlier this year and is now a senior fellow at the Center on Budget and Policy Priorities.

Thank you all for being here. Paul, let me go to you first. The president has a major task this week. You've got unemployment still at 9.1 and the jobs growth -- at least this last month -- zero.

KRUGMAN: Yes. And let me say, by the way, there were two numbers on Friday, jobs -- one was zero, and the other was two. Jobs growth was zero. The interest rate on 10-year government bonds was two, which is very close to a historic low.

In effect, the market is screaming at us: You idiots. You've been worrying about the wrong problem. You've been focusing on the deficit. The deficit is not our problem right now. Jobs is our problem.

And Obama has an interesting problem, because I think that -- the way I think of it is, there's three different things. There's what we should be doing. And what we should be doing is a huge public investment program. No better time to do it. Government can borrow money almost for free, lots of unemployed workers.

Then there's the -- that's not going to happen, because the second question is, what can actually pass Congress? And the answer is nothing. Nothing. If Obama were to call for endorsing motherhood, the Republicans in the House would oppose it.

And then, third, is what he should say. And I think that's an interesting thing. I think he has to -- he probably shouldn't be calling for what I would want, because the public should want what I want, but it doesn't. So he probably should be calling for things like a limited, but significant program of infrastructure repair, things that we really need, plus things that -- like a large payroll tax cut.

The main thing is, I think he has to be bold, has to be making the case, look, there are things we could be doing, there are things I want to do. Those guys are not letting it happen.

AMANPOUR: Well, Doug, can he be bold for the very reasons that poll just suggested, it's -- it's not possible?

HOLTZ-EAKIN: Well, the question is, can he show some ideological flexibility, which he has not shown so far? He showed a little leg this week by rolling back a very expensive rule with the EPA. That was important.

AMANPOUR: Do you think that's true, that he hasn't shown flexibility, since he's -- he's sort of come completely to the Republican end of the debate?

HOLTZ-EAKIN: But what we've seen is again and again the same playbook, which is we want to focus on near-term stimulus. And if you look at measures, like the budget deficit, if the economy is at full employment, that's still rising in 2011. That playbook's been in place. It's not working. It didn't work in the '60s and '70s, when we used, again and again, to use stimulus to fine-tune the economy.

So he needs to go to a different playbook, which says we have to have a fundamental change toward a growth philosophy. We need to have some permanent changes, like a lower corporate rate, tax repatriations for our business community. And he actually does have to show some respect for the business community. He needs small, medium and large businesses not to be the target of sort of class warfare rhetoric, but to be the focus of his policies.

AMANPOUR: Well, let me turn to you, Jared Bernstein. You've come from the vice president's office. He's been saddled with this complaint for a long time, that he's not friendly enough to the business community. What does he have to do, in your opinion, to be more friendly? Or does he?

BERNSTEIN: I don't think he has to. I think the person Doug just described sounds very different than President Obama to me. And I think the business community outside of Washington and the lobbies that kind of go through the talking points recognize that.

I think what the president needs to do, much like Paul suggested, is put forth a plan that meets two broad criteria. First, it has to move the needle on unemployment, which has just been stuck at 9 percent, and that's unacceptably high. And I think the plan that he's putting forth, it's going to have payroll tax cuts in it, it's going to probably extend the unemployment insurance, it's going to have some fast-working infrastructure, perhaps working down the maintenance backlog at our public schools.

The thing about that plan, it has two attractive attributes. One, again, it will move the needle on unemployment. And, two, I think it has the political plausibility, credibility, as the president himself just said, that in normal times these are programs that would garner bipartisan support. A payroll tax cut, an -- we've never failed to extend unemployment insurance, with the unemployment rate this high, repairing the nation's public schools. I mean, again, in normal political times, these would be widely embraced. But it...

AMANPOUR: And this is something you're pushing very hard, the repairing of the public schools?

BERNSTEIN: So -- exactly, FAST, fix America's schools today. And given -- and once the president articulates that plan, and if he is blocked by House Republicans, as he may well be, he then can go out to the nation and explain to people, in precise and clear language, who is standing between you and your jobs and your paychecks and your kids' career trajectories. And that's what I think we're looking at here.

AMANPOUR: Let me ask you, Carol, you're in the White House, covering the White House.

LEE: Sure.

AMANPOUR: Do they think that this speech is going to be received well? Will they be able to say anything that gets past Congress?

LEE: Well, I think that, first of all, this is a really important moment for the president. This is arguably one of the most important moments that he's had in his almost three years in office. And not only are a lot of people still hurting and the economy is not getting better for them, but I think there's a sense that the president is lacking a narrative.

I think if you try to sum up Barack Obama's presidency right now, it's a hard thing to do. And so what you're going to see him try and do -- and that's a tough thing to -- tough position to be in going into a re-election campaign in an economy like this.

And I think what you're going to see him set out to do in his speech and with his plan is -- is several things. First, he's going to do -- put forward a number of policies, some of which Jared mentioned, and -- to deal with the long-term unemployed, to try and put teachers back to work. You'll hear several things that we've heard before, some new.

And, secondly, he's going to have to lay out how he's going to pay for those things, because of political environment in Congress, and so you're going to hear him talk about deficit reduction.

And then, thirdly, you know, he really is -- he has to inspire confidence in Americans and business. There's this sense out there, mood is really pretty dark in the country. There's a sense out there that the recovery is not happening. You know, it's stalled and it's not happening. And so that cycle sort of feeds on itself, and businesses pull in, and consumers stop spending, and then that leads to more fear. And so he's got to address that cycle.

AMANPOUR: Let me ask Doug. Paul talked about how basically, in his opinion, we've been focusing on the wrong problem, that it's deficit instead of jobs. Now, certainly the Wall Street Journal this week, on Friday, talked about how so much of this cut, cut, cut doesn't just cut programs, it cuts people. So a lot of people who've been laid off in the -- you know, from their jobs is a result of this.

HOLTZ-EAKIN: It will shock you that Paul and I will continue to disagree about this.

AMANPOUR: No, it doesn't shock me. But is there a certain amount of responsibility also to be taken for not focusing on jobs and just on cutting?

HOLTZ-EAKIN: They're not mutually exclusive. We are headed straight toward a Greek-style fiscal crisis. We are in the -- in the range of the kinds of measures that show countries have that. So that's not a pro-jobs agenda, to have a fiscal crisis. So if you steer away from it, that's a good idea.

And the cutting gets greatly exaggerated. There's all this huffing and puffing about the so-called $100 billion cuts the Republicans proposed at the beginning of the year. That would have cut actual spending by $7 billion in 2011. It's a $15 trillion economy. So at some point, economic rationality has to enter and all this demagoguing of cutting back spending...

(CROSSTALK)

BERNSTEIN: The problem is it goes the wrong way.

KRUGMAN: But, yeah, and it's more than that. I mean, it's relative...

(CROSSTALK)

KRUGMAN: ... what has been happening on trend and what should have been happening. It's all wrong. Look, we've laid off -- in effect, America has laid off several hundred thousand schoolteachers in the last couple of years. That's crazy, right? First of all, education is a priority. Second, we're cutting jobs that we need at a time when -- when we need to be creating more jobs, when we need to be -- you know, this is -- so these are real things.

If you look at -- I actually just did these numbers. If you look at actual government buying things, as opposed to things like food stamps, but actual government purchases of goods and services, in a normal year, that rises by around $50 billion a year. Over the past year, it's fallen by $60 billion. That, again, is crazy. That's a major drag on the economy.

And I can't believe -- you know, Doug is saying, you know, we need to stop talking about short-term stimulus. Nine percent unemployment and two percent interest rates is the...

HOLTZ-EAKIN: Well, here's the problem.

KRUGMAN: Why should you not be talking about...

HOLTZ-EAKIN: I want to address that, because you take something like what Jared proposed on the schools, which is the place where there's great overlap both politically and on conservative and liberal economics. Productive infrastructure is very important. Having prettier schools at the end of a big spending program makes no American worker more productive. So if you want to do infrastructure, do it on productive infrastructure. That would get support.

(CROSSTALK)

AMANPOUR: Apparently it does. You say -- you say...

BERNSTEIN: Absolutely. No...

(CROSSTALK)

AMANPOUR: ... invest in people rather than just machinery?

(CROSSTALK)

BERNSTEIN: The schools have buildings.

AMANPOUR: Right, but people do it.

BERNSTEIN: The schools have a backlog of maintenance and repair that has everything to do with energy efficiency, with safety, with the ability of kids to go to schools that we can drop our kids off in the morning and feel good about. And this is a program that is labor-intensive, as opposed to capital-intensive. Right now, we've got to put people to work insulating, repairing windows, boilers, roofs, floors.

But let me say one thing about another -- another number that's very important right here. It's not just that Paul is exactly right on what we need to do. And by the way, the president is, as well, and I think the ideas that we're talking about will move the needle.

It's also that the ideas that we're hearing from the Republican side -- cut the corporate tax rate and close the doors of the EPA -- are demonstrably ineffective.

Right now, let me give you a number that I think is extremely compelling. The corporate profits as a share of the economy were higher in the last quarter, 2011 second quarter, than at any other quarter in the history of the data, after tax, after-tax profits, going back to 1947.

So if you're going to tell me that these corporations, who are profitable by not selling into this country, selling into other emerging economies, just need another tax break to get ahead, or that deregulation, which, you know, it's the deregulatory zeal that got us into this mess, is somehow going to get us out, it's -- that's just wrong.

AMANPOUR: Well, let me ask Carol on that in the last 30 seconds. This business of walking away from the EPA regulations, I mean, is that a vision for the future? Or is that just a one-off?

LEE: I think you're very likely to see more of these. The White House is -- the Republicans have been very effective at tagging the president as being very pro-regulation. This was clearly a move -- business welcomed it. The Republicans welcomed it. And if you talk to people in the White House, they say there's more of these to come.

AMANPOUR: And on that note, up next, a "This Week" exclusive. The family of Fort Hood shooter Nidal Hasan breaks its silence nearly two years after the worst terrorist attack on American soil since 9/11. Stay with us.

(COMMERCIAL BREAK)

AMANPOUR: It's been nearly two years since Army Major Nidal Hasan opened fire on the Fort Hood military base, killing 13 people. It was the biggest terrorist attack on American soil since 9/11, and it left Hasan's family searching for answers.

A new Pew study shows that nearly half of American Muslims think that Muslim leaders in the United States haven't done enough to speak out against Islamic extremists. It's one of the reasons that Hasan's family is now breaking its silence.

And ABC's Bob Woodruff spoke exclusively with them, and he joins me now. Fascinating, Bob.

WOODRUFF: It's very fascinating, Christiane. And so Nader (ph) actually decided to talk about his cousin, Nidal, because he deeply believes the influence of extremists turned him into a different person. Nader never imagined his cousin would be accused of murder. And Nader is doing all he can to make sure something like this never happens again.

(BEGIN VIDEOTAPE)

WOODRUFF: What's been the impact on your family and you?

NADER HASAN: Devastation. I mean, clearly, condemnation. I mean, from the beginning, I think the shock, the pause, you're just unable to believe -- you still have to keep asking yourself and pinching yourself, is this really what happened?

WOODRUFF (voice-over): On a sunny afternoon in November 2009, Nader's cousin, Major Nidal Hasan, opened fire on his Fort Hood Army colleagues who were preparing to deploy to Iraq and Afghanistan, over 100 shots fired in 10 minutes.

SMITH: On the phone with us, Nader Hasan, who is a cousin of the shooting suspect.

NADER HASAN: And as I'm on the phone, I'm staring at the TV and I was seeing some of these images come up. And just I think more than anything, I was just talking to myself saying, wait, this can't be him. He was the last person any of us would have thought. He was never violent, ever. He wouldn't kill a bug in the house.

WOODRUFF (on-screen): When do you think he changed?

NADER HASAN: I don't know.

WOODRUFF: This is a very different person than the one you describe.

NADER HASAN: Doesn't -- doesn't make it any better. I mean, he did what he did now. And -- and we've lost him.

WOODRUFF (voice-over): The image of a deranged shooter is a long way from the childhood Nader remembers with Nidal, growing up together in suburban Virginia.

NADER HASAN: Two kids growing up in Arlington County, at the local fire department, meeting their firemen, putting on the firemen's hats on their heads, and thinking that they were on top of the world.

WOODRUFF: Nader says they had the typical upbringing, from birthday parties to Santa at Christmas. Graduations were family occasions. Nidal, there on the left, celebrated with Nader. They didn't speak Arabic and weren't very religious.

(on-screen): Was Nidal religious, more religious than you? Or the same?

NADER HASAN: No, not at all, same.

WOODRUFF: Same thing?

NADER HASAN: Kid, play soccer, catch fireflies, you know? And, no, we were never -- we were fast. That was the big thing.

WOODRUFF: Nidal had joined the Army out of high school and turned to religion after the death of his mother in early 2001.

NADER HASAN: That was his mom's wish, know God. And so he started praying more and becoming more pious. And then, all of a sudden, four months later, September 11th happens. Now that you might see that as your first challenge as to, how much do you believe in your faith? Who knows what was going on in his head?

WOODRUFF (voice-over): As an Army psychiatrist, Nidal was assigned to Walter Reed Hospital to counsel returning combat soldiers. His family says their traumatic stories deeply affected him. And as he became more religious, he began to question the war on terror as a war on his faith, dreading his own deployment.

He even gave PowerPoint presentation to military colleagues which seemed to solidify his evolution of beliefs. He wrote, "It's getting harder and harder for Muslims in the service to morally justify being in a military that seems constantly engaged against fellow Muslims."

NADER HASAN: There was this issue of choosing God and country. And I think that's where his sickness really started to morph.

WOODRUFF (on-screen): Do you think that Al Qaida terrorists are the ones that influenced to the point where he was ready to commit murder?

NADER HASAN: I don't know. I believe that maybe some of the things that are seen on the Internet, some of the websites -- I'm still not privy to any of it, the alleged, you know, e-mails between him and Anwar Awlaki.

WOODRUFF (voice-over): It is believed Nidal exchanged e-mails with al-Awlaki, the suspect Al Qaida terrorist in Yemen, reportedly writing to him, "I can't wait to join you in the afterlife," and asking, "When is jihad appropriate?"

(on-screen): You know, the Senate investigation called this a ticking time bomb, I guess potentially more violent as time moved on. You saw nothing like that?

NADER HASAN: Nope.

WOODRUFF: If you had known what was possibly going to happen, would you have turned him in?

NADER HASAN: Absolutely, without question, without question. And that's why we had the FBI come to our house right away, if there was anybody else out there that we could help.

WOODRUFF (voice-over): Nidal was shot three times during the shooting rampage and is now paralyzed from the chest down. He has since been charged with 13 counts of premeditated murder and 32 counts of attempted murder and could face death for these crimes.

(on-screen): Do you think he should get the death penalty?

NADER HASAN: I don't believe in the death penalty. And that's going to be left up to the jury.

WOODRUFF: Should this be temporary insanity?

NADER HASAN: He committed a crime. I don't think there's any question as to who the shooter was, and the question is still why, and that's -- he'll get his day in court, and he'll be tried by a jury of his peers. And they'll make the ultimate determination.

WOODRUFF (voice-over): Some of the Fort Hood families who attended Nidal's preliminary hearing said he showed no signs of remorse.

(on-screen): Would you apologize at all for what -- for what your cousin did?

NADER HASAN: That's not my place. I mean, clearly, I apologize for what's happened to them. I'd apologize to anybody, whether my cousin was involved or not. I'm sorry for that happening. But that's what our family wants. Our family wishes our cousin would come back, accept responsibility, show remorse, try to turn this into a positive thing.

WOODRUFF (voice-over): So Nader is taking it into his own hands, a positive step, by starting the Nawal Foundation, whose primary message is one of nonviolence, his all-American upbringing instilling in him the belief you can be both devoutly Muslim and defiantly patriotic.

NADER HASAN: It's almost two years now since my cousin, I believe, was stolen from -- you know, stolen by some psychotic combination of whatever might have happened, but we lost him. The Nidal that we knew before Fort Hood is not the Nidal from Fort Hood forward. And so how do we make sure that doesn't happen again?

WOODRUFF (on-screen): Why are you doing this now?

NADER HASAN: As one of the agents that I work with in my business said, the silence is deafening from the moderate voice. I think the terrorists really have an effective poison that they're putting out there, and the terrorists are trying to make it an issue of false choice, of choosing God over country. You can be fully Muslim and you can be fully American and there's no conflict.

WOODRUFF: Do you have any desire to talk to some of the family members?

NADER HASAN: If they'd want to talk to me. I do know that they're good people and they've been in our prayers.

WOODRUFF: If you did talk to them, what would you say?

NADER HASAN: God bless you. God bless the ones you've lost or been harmed. And God bless our country to get through this.

(END VIDEOTAPE)

WOODRUFF: Now, Nader Hasan hopes the foundation named for his mother can give voice to moderates and be a force for change against radicalism.

AMANPOUR: Bob, thank you so much. So valuable, and such blunt commentary from the cousin.

WOODRUFF: Very blunt.

AMANPOUR: And coming up, remembering 9/11. We take an emotional tour of some of the artifacts from the World Trade Center. And we see the memorial at Ground Zero.

(COMMERCIAL BREAK)

AMANPOUR: And now, the Sunday funnies.

(BEGIN VIDEO CLIP)

LENO: President Obama has now agreed to move his jobs speech from September 7th to September 8th. It's the same night as football season starts. And, of course, the main difference, Obama's job plan have a lot more Hail Marys in it.

LETTERMAN: CIA is hoping that Gadhafi weapons don't fall into the wrong hands. And I thought, well, wait a minute, weren't they already in the wrong hands?

FALLON: Get this. In a recent interview, Dick Cheney said that his new memoir will have, quote, "heads exploding in D.C." Yeah, especially if you read it while you're on a hunting trip with Dick Cheney. "I thought it was a duck."

(END VIDEO CLIP)

AMANPOUR: We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: And now, "In Memoriam."

We remember all of those who died in war this week. The Pentagon released the names of six soldiers killed in Afghanistan.

When we return, we turn our attention to the 10th anniversary of the September 11th attacks. We'll take you on an emotional tour of artifacts from that terrible day, and the pictures tell a powerful story. Stay with us.

(COMMERCIAL BREAK)

AMANPOUR: This is the mangled top of the antenna from the North Tower of the World Trade Center. It fell on September 11, 2001, 10 years ago next Sunday.

The artifact is housed here at the museum, but many others are at New York's JFK airport. And earlier this week, I got a rare tour.

(BEGIN VIDEOTAPE)

AMANPOUR (voice-over): Here's the lower half of that antenna from the North Tower, flattened police cars, steel bars twisted like spaghetti, a bike rack for those who rode to work on 9/11, a charred fire engine, all disturbing reminders of that fateful late summer day 10 years ago.

(on-screen): A year after 9/11, thousands of tons of twisted steel from the Twin Towers began to be collected here, in Hangar 17 at JFK Airport for an eventual museum. But in the last 18 months, most of that steel has been shipped out to cities across all 50 states and eight different countries for their own 9/11 memorials.

(voice-over): When we visited Hangar 17, a large chunk of the World Trade Center wreckage was being loaded into a truck, destined for a town in Florida, to be displayed in a local park. Some relics have yet to find a suitable home, like these remnants of an Alexander Calder sculpture that stood between the towers. Others are being readied for transport to the new museum at Ground Zero.

WARD: Early on, the Port Authority recognized that there was a story to be told. And we saw an archival role for the Port Authority and brought as much of the material as we could to help tell, now 10 years later, the tragedy and the dimensions of that event.

AMANPOUR: Chris Ward is executive director of the Port Authority, which oversees the World Trade Center site.

WARD: This is Ladder 18. It was from Lower Manhattan. Raced to the scene. The destruction of the truck itself is representing what -- the amount of people who were lost with the Fire Department.

AMANPOUR: Ward was late for work that day and narrowly survived the disaster. His boss, Neil Levin, was not so lucky. He was killed when the towers collapsed.

Christy Ferer was married to Levin. She is the mayor's liaison to the victims' families and has been instrumental in organizing the 9/11 Memorial.

FERER: That was a moment where everybody was united. And wouldn't it be great to have that feeling again?

AMANPOUR: She showed us a room full of these posters we all remember so well, put up by people in Manhattan pleading for information on missing loved ones.

FERER: They were all over Manhattan. My daughter, for one, put Neil's picture up on the Upper East Side everywhere.

AMANPOUR: She showed me another room full of artifacts from shops, such as a Warner Brothers store in the World Trade Center mall.

FERER: As I walked through all these archives in 2002, trying to choose something that would be symbolic, I saw this, and I thought, well, that's pretty amazing.

AMANPOUR (on-screen): "That's all, folks," the iconic Warner Brothers signoff. What does it say to you?

FERER: It says it's over. To me, it says the age of innocence is over.

AMANPOUR (voice-over): Today, at Ground Zero, new towers are rising towards the sky. The finishing touches are being put on the 9/11 Memorial Plaza, which opens next Sunday, 10 years after the attacks.

In a center of the plaza is a pear tree that emerged from the rubble of the Twin Towers. It's known as the survivor tree. President Obama laid a wreath there a few days after Osama bin Laden was killed.

(UNKNOWN): (inaudible) the southern edge of this memorial plaza.

AMANPOUR: Michael Arad showed us the site. He's the memorial's designer.

ARAD: The difficult part of this project was the names arrangement.

AMANPOUR: The new memorial incorporates two large pools where the towers once stood. Around each pool are bronze panels inscribed with nearly 3,000 names of the dead. In an extraordinary move, Arad says families were consulted on how to organize the names. And we were asked not to film them, so that they will be the first to see them next Sunday.

ARAD: It took a year to arrange the names. So a name of -- obviously, names of relatives who died together would be grouped together, but also the names of friends and people that were engaged to be married and people who went to school together or commuted together or people that happened to die together that day.

AMANPOUR (on-screen): Co-workers?

ARAD: We got a request to place the name of someone's father next to her best friend. Her father was on Flight 11; her best friend was in the North Tower. And that flight crashed into that tower.

AMANPOUR: Next week, the memorial will finally open, and the World Trade Center site will once again be part of the city. It's been 10 years of hard work and sometimes bitter controversy for family members like Christy Ferer.

FERER: I think it's going to be much like childbirth. Once this is built, hopefully we'll all forget the pain we went through.

(END VIDEOTAPE)

AMANPOUR: The pain, of course, was deeply felt by the youngest generation, children who had never experienced violence and hatred. Now, this book, "Art for Heart," features drawings and messages from 457 children who lost a parent in the 9/11 attack. They have poured their grief into this book. It's compelling, and it's heartbreaking. And for information on how to buy "Art for Heart," visit our website at abcnews.com/thisweek. Proceeds will go to the 9/11 Memorial Fund.

And next week, please join us for a special live coverage of the 10th anniversary of 9/11, "America Remembers."

We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: That's our program this week. Remember, you can follow us any time on Facebook, Twitter, and at abcnews.com. Be sure to watch "World News with David Muir" tonight for all the latest headlines.

For all of us here, thank you for watching, and we'll see you next week.

END

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