Transcript: Feinstein, Chambliss, McGovern, Keane

This Week: Senator Saxby Chambliss, Congressman Jim McGovern, Senator Feinstein, General Keane.

ABC NEWS, THIS WEEK WITH GEORGE STEPHANOPOULOS INTERVIEW WITH SENATOR DIANNE FEINSTEIN, SENATOR SAXBY CHAMBLISS, REPRESENTATIVE JIM MCGOVERN, AND RETIRED GENERAL JACK KEANE.

SPEAKERS: GEORGE STEPHANOPOULOS, HOST: STEPHANOPOULOS: Good morning, and welcome to "This Week."

(BEGIN VIDEO CLIP)

(UNKNOWN): Barack Obama...

STEPHANOPOULOS (voice-over): A puzzling prize for peace...

OBAMA: I will accept this award as a call to action.

STEPHANOPOULOS: ... as the president deliberates on war.

(UNKNOWN): What approach should we take in Afghanistan? I say humility.

CLINTON: There is no discussion going on about leaving Afghanistan.

GATES: The situation in Afghanistan is serious and deteriorating.

STEPHANOPOULOS: And Congress pushes forward on health care.

PELOSI: We're coming around the curve.

MCCONNELL: The bill it's referring to will never see the light of day.

STEPHANOPOULOS: Two defining issues, two powerhouse roundtables. Afghanistan with key Senate leaders, the retired general who devised Iraq's surge and the congressman leading the charge for an exit from Afghanistan, our "This Week" debate.

Then, health care, ethics and all the week's politics with George Will, Arianna Huffington, and our dueling strategists, Democrat Donna Brazile and Republican Nicolle Wallace.

And, as always, the Sunday funnies.

FALLON: Along with the Nobel Peace Prize, President Obama also gets $1.4 million. Usually to get a check that big, you need to blackmail David Letterman.

(END VIDEO CLIP)

ANNOUNCER: From the heart of the nation's capital, "This Week" with ABC News chief Washington correspondent George Stephanopoulos, live from the Newseum on Pennsylvania Avenue.

STEPHANOPOULOS: What was the Nobel committee thinking? What impact will the peace prize have on President Obama and his agenda? We're going to debate both those questions today, but we will begin with the president's looming decision on the war in Afghanistan.

And for that, let me bring in our first roundtable. I am joined by the chair of the Senate Intelligence Committee, Dianne Feinstein...

FEINSTEIN: Thank you.

STEPHANOPOULOS: ... the former vice chair of the -- the chiefs of staff for the military, Jack Keane, retired general, architect of the surge in Iraq, Congressman Jim McGovern from Massachusetts, the author of a bill calling for an exit strategy from Afghanistan, and Senator Saxby Chambliss, member of the Senate Armed Services and Intelligence Committee.

Welcome to you all.

And, Senator Feinstein, let me begin with you. You met with the president this week. He had a group of members of Congress and senators down to meet with him. And I -- we -- we know -- and you saw Secretary Clinton say that, as well -- the president seems to have ruled out immediate withdrawal...

FEINSTEIN: That's correct.

STEPHANOPOULOS: ... from Afghanistan or a major increase of troops, in the hundreds of thousands. But did he reveal anything else about his thinking? And what did you recommend to him?

FEINSTEIN: Well, what he revealed was his thinking up to this point, and that the fact that he wanted to hear from various members, and some of us spoke up. And I'll tell you what I said. I reviewed all of the intelligence and looked at the situation, and it was pretty clear to me that violence was up 100 percent, 950 attacks in August. The Taliban now controls 37 percent of the people in the areas where these people are. Attrition in police is running 67 percent, either killed or leaving the service.

And the mission is in serious jeopardy. I think General McChrystal, who is one of our very best, if not the best at this, has said a counterterrorism strategy will not work. The president said to us very clearly, just as you said, George, we will not pull out.

Now, if you're going to stay, you have to have a way of winning. The question is, what is that way? And I think the counterinsurgency strategy, which means protecting the people, not shooting from afar, but securing, taking, holding, and providing security for a period of time is really critical.

STEPHANOPOULOS: How many more troops does that take?

FEINSTEIN: Well, I don't know how many he's proposed. I only know what I've read in the newspapers. At the same time, there has to be a process of reconciliation. At the same time, there has to be a process of finding out, which of these people can we work with and which can we not, like the Haqqani network, which really need to be taken out? How do you grow this sort of feudal-type warlord government into stability? How do you strengthen Karzai's spine, if you can?

And I think those are all questions that have to be put together into a strategy.

STEPHANOPOULOS: A lot of questions there, Senator Chambliss. Does that lead you to believe that the president should approve General McChrystal's request now?

CHAMBLISS: I don't think there's any question (inaudible) going to have to, and I think it's the right thing to do. He sent General McChrystal over there in the spring and said, "You go see what it's like on the ground. Give me a report, and let's devise a strategy for going forward." He's done that, and Dianne's exactly right. It's a very fractious government over there. It's a lot of corruption within the Karzai government and not much stability.

CHAMBLISS: But if we're going to move forward, we've got to do two things. First of all, we've got to think about the civilian side and what we're going to do with that government. From the standpoint of trying to help the Afghan people clean it up, in order to be successful at doing that, then we've got to quell the violence.

We've got to slow down the Taliban. That means prevailing militarily. And, obviously, that's where the additional resources in the form of troops come in. That's where General McChrystal has -- has recommended. And I think the president has got to follow his commanders on the ground...

STEPHANOPOULOS: But...

CHAMBLISS: The situation in Iraq that Jack was very much involved in is -- was not unlike where we are right now. The Iraqi government was very unstable. The violence was up. We stopped the violence for the most part, and then you saw people have confidence in government.

STEPHANOPOULOS: Well, let's -- let's get into that, and I want to bring General Keane in on that, because you were very involved in the -- in the surge in Iraq. But there are differences, as well. As unstable as the Iraqi government was, it did have -- the Iraqis did have a history of having a strong central government, number one. Number two, the surge, as far as I understood it, led you to a situation where you had about one American soldier for every 100 or 125 Iraqi civilians. Here, even if you approve General McChrystal's 40,000, you're going to be at a 1-to-200 ratio.

So even if you approve this, will there be enough for a full counterinsurgency strategy, as Senator Feinstein was talking about?

KEANE: Well, first of all, you don't have to do the counterinsurgency strategy in the entire country. The south is really the center of gravity of the Pashtun insurgency and also in the east. So there are areas where we can focus.

The problem we have is, we know what the defeat mechanism ultimately is. It is the Afghan national security forces, just as it has been in Iraq, with the Iraqi security forces.

STEPHANOPOULOS: They have to take the lead.

KEANE: They eventually will come in full play. The problem is, they're too small, George. Right now, we only have about 200,000, and -- and most who look at this, to include the generals, believe we need about 400,000. If that's the case, we can't get there until 2013, 2012 at the earliest.

In the meantime, to put the counterinsurgency strategy in play, we need the additional U.S. forces. That's -- that's why this issue now is so pregnant, in terms of timing, because we cannot wait for that strategy to take hold.

STEPHANOPOULOS: Let me -- let me bring that question to Congressman McGovern. You and 99 other members of Congress have called now for an exit strategy, want that exit strategy by the end of this year. Does that mean that you can't accept more troops now as a component of an exit strategy later, if, indeed, the final exit strategy means you need Afghan forces built up?

KEANE: Well, I think adding more -- more American forces to -- to Afghanistan would be a mistake. I think it would be counterproductive. And I think there's a strong case to be made that the larger our military footprint, the more difficult it is to achieve reconciliation. And, quite frankly, it's been used as a recruiting tool by the Taliban.

The reason why we want an exit strategy is in part because I want a clearly defined mission, and that means a beginning, a middle, a transition period, and an end. And we don't have an end in Afghanistan.

When I voted to use force to go to war after 9/11, I think I and everyone else in Congress voted to go after Al Qaida. That was our enemy. And Al Qaida has now moved to a different neighborhood, in Pakistan, where, quite frankly, they're more protected. And we're told by General Jones that there are less than 100, if that, members of Al Qaida left in Afghanistan.

So we're going to need to -- so we're -- we're now saying we should have 100,000 American forces to go after less than 100 members of Al Qaida in Afghanistan? I think we need to re-evaluate our policy.

STEPHANOPOULOS: That leads to -- that leads to a key question that I know the White House was debating, actually, this week. In order to defeat Al Qaida, do you need to completely defeat the Taliban or can you learn to live with the Taliban?

What's your answer to that question, Senator Feinstein?

FEINSTEIN: I think it depends on what you mean by "Taliban." I think if you take the Haqqani network, which I gather was generally responsible for the bombing of the interior ministry in Kabul, I think they're hardcore fanatics.

If you look back, too, at Taliban control, when it had more in the earlier days, and I've got to tell you, I particularly worry about women in Afghanistan, acid in their face of children, girl children who go to school, women who can't work when they're widowed, huddled on the streets, begging, women beaten and shot in stadiums, you know, Sharia law with all of its violence, I mean, that's one element of the -- of the Taliban.

I think we need to look for those warlords that we can work with, those Pashtuns who want to work for stability, for good, solid governance. I don't think we can make the country into a Jeffersonian democracy, but I do think you -- you've got to stabilize this country.

You leave this country, and the Taliban are increasing all of the time. They're taking over more. It will have a dramatic impact on Pakistan one day. I really believe that.

FEINSTEIN: Now, should we stay there for 10, 12 years? General, I don't think so. I don't think the American people are up for that or want that. But I think -- I don't know how you put somebody in who was as crackerjack as General McChrystal, who gives the president very solid recommendations, and not take those recommendations if you're not going to pull out.

If you don't want to take the recommendations, then you -- you -- you put your people in such jeopardy, just like the base in Nuristan. We lost eight of our men. We didn't have the ability to defend them, and now the base is closing, and effectively we're -- we're retreating away from it. And so I think the decision has to be made sooner, rather than later.

STEPHANOPOULOS: So you've got Democrat and Republican agreeing to accept the McChrystal recommendations right now. I think part of the reason, though, Senator Chambliss, that the president is at least rethinking this right now is that concern that -- that Congressman McGovern talked about, about the footprint, about your increasing the -- the number of troops in a way that might be counterproductive, that might drive more people into the arms of the Taliban.

CHAMBLISS: Well, you're not going to increase the footprint just for the sake of adding more troops. It's got to be done for the right purpose, and obviously, that's what the president's got under consideration right now.

Two things, though. One, we've got an Afghan citizen that is simply a better fighter than what we had in Iraq. And I think we have the opportunity to train those folks at a quicker pace than what we did in Iraq and, ultimately, turn the -- both the military and the -- and the police over to the Afghan people to run that country. That's our goal there.

Secondly, you can't de-link Pakistan and Afghanistan. They are coupled together. If Afghanistan falls, if we pull out and it goes totally in the hands of the Taliban, it doesn't make any difference whether there are 100 Al Qaida in there right now or not or whether there are 1,000 across the board or in -- going back and forth. We know that the neighboring country has the opportunity to be really invaded or encroached upon by bad guys.

STEPHANOPOULOS: I want to get to that question. I'm going to bring that to General Keane, as well.

But, first, Senator Feinstein raises a question that -- that I do want to ask you about. How does President Obama put General McChrystal in, say that, "I want you to implement this counterterrorism strategy with a counterinsurgency element, as well," and then not take his recommendations? You served in the military. What are the pressures like right now? And what does General McChrystal do if the president rejects his recommendation?

KEANE: Well, I can't speak for what General McChrystal's, you know, reaction would be to a presidential decision that opposed him. I can say this. I mean, if you're a general on the ground, then you believe that a recommendation you made is the -- is the winning recommendation in terms of strategy that'll accomplish the goals that you've been assigned.

And then you're told that you cannot execute that and ask the troops to go out and do something else that you don't believe will accomplish those goals, that gets very difficult, in terms of a moral dilemma, asking your troops to do something you believe is going to fail.

STEPHANOPOULOS: So you resign?

KEANE: That would be up to face that. I mean, that's something personal for every general...

(CROSSTALK)

STEPHANOPOULOS: Is that what you would do in that situation?

KEANE: Probably, yes, under those circumstances, yes. But the fact of the matter is, you know, the -- presidents have a right to make decisions, George. And one of the recommendations they get all (ph) from generals. That's -- that's the reality. And the president also has a right to take information from -- from other sources to inform those decisions.

STEPHANOPOULOS: And it -- and it's my understanding that that's actually what's happening inside the White House review right now and that several other options, in addition to what General McChrystal has already put forward, are likely to be generated.

So I want to bring that question back to you, Congressman McGovern. If the president lays out a clear mission, a focused mission on Al Qaida, if he determines the -- and if puts a time limit on that mission, says that we're not going to be there forever, and then -- but also says that we do need some -- 10,000, 12,000, maybe even 20,000 troops to implement that strategy -- what would be wrong with that? And could you go along with it?

MCGOVERN: Well, I'd have to wait and see the details of whatever he comes up with. But, look, nobody's talking about cutting and running in Afghanistan and -- and this notion that if we lessen our military footprint, that somehow the Taliban is going to come back in control, I think, is wrong.

We have been in this war for 8 years. We have spent hundreds of billions of dollars. We have lost a great deal in terms of U.S. blood and treasure already. We have trained their military; we have trained their police.

One of the central problems in Afghanistan right now is you have a government that is corrupt and incompetent. And according to Peter Galbraith, who just got fired by the United Nations for being outspoken, 30 percent of Karzai's vote -- votes are fraudulent. You know, if you don't have good governance at the center of all of this, you can put all the troops you want in there, you can invest all the money you want in there, and it won't make any difference.

STEPHANOPOULOS: Isn't that right, Senator Chambliss?

CHAMBLISS: I don't think there's any question but what (ph) that's right. And that's why you've got to approach this from a dual point of view. Number one, you've got to stop the violence. If you don't stop the violence, then, you know, we -- we can't hope for a healing to take place in Afghanistan and hope for the people to take over that government.

It is corrupt; there's no question about it. But we know, too, that if we don't prevail there, we have the opportunity for the bad guys to come in and have access to nuclear weapons next door. We can't afford for that to happen.

We know that there is a training opportunity for Al Qaida in Afghanistan if we're not there, as well as in Pakistan. We can't afford for that to happen.

So it's clear that, from a military standpoint, we've got to listen to the guys on the ground who have the opportunity and the know-how to make sure that those things don't happen.

One other component of this that we haven't given enough talk to, I think, is the civilian side. You have to remember that the Afghan people have a literacy rate of somewhere in the high teens or low 20s. That is -- there's no way for those people to develop any kind of economy. The economy in Iraq this year is going to be about $900 billion. The economy in Afghanistan, $900 million.

We've got to stop the violence, work towards influencing the -- the Afghan people to make sure they take their government back and develop an economy for the long term. That's going to take a while...

(CROSSTALK)

STEPHANOPOULOS: It's going to take a while. It's going to take a lot of money. But -- and you -- you do have to put a cost-benefit analysis on any decision like this. And this is something raised internally by Vice President Biden.

There's a report in Newsweek this morning -- it's actually on the cover of Newsweek, where the vice president is pointing out that this year we're going to spend about $65 billion in Afghanistan, about $2.25 billion in Pakistan. And according to the report in Newsweek, this is what the vice president went on to say in the National Security Council meeting: "By my calculations, that's a 30-to-1 ratio in favor of Afghanistan. So I have a question: Al Qaida is almost all in Pakistan, and Pakistan has nuclear weapons. And yet for every dollar we're spending in Pakistan, we're spending $30 in Afghanistan. Does that make strategic sense?"

What's the answer?

FEINSTEIN: Well, this whole situation is a bit of a conundrum. I basically agree with Senator Chambliss in what he said. I think reconciliation -- the first thing has to be to stop the violence. It has to be security. The Taliban has to know it cannot take over all of Afghanistan because the next step in Pakistan. And that's very serious.

And the Pakistanis are only recently beginning to show, I think, their mettle. I think Swat was a big wake-up call for them. I listened to the Pakistani foreign minister yesterday, and they -- they seemed to have much more get-up-and-go, to really be -- be able to work with us in securing some of the FATA areas and other -- other areas. So I think that -- that's really critical.

This is not an easy situation. Nothing is straightforward. Our allies have 39,000 troops. That's a lot of people over there. They, I gather, will continue their involvement on that level. I think we ought to press for them to increase it.

STEPHANOPOULOS: That's not going to happen.

FEINSTEIN: I think obviously -- I know it's not, but financially, we ought to have more financing from the rest of the world community. We cannot be everyone's gatekeeper, everyone's policeman, and I think what's lacking in the world is some universality of putting together movements which can change the dynamics in difficult situations.

STEPHANOPOULOS: General Keane, what do we do now in Pakistan? Three major attacks in the last week. Yesterday, the most brazen attack yet, the insurgents take over their army headquarters. It would be like coming in to the Pentagon. And how do you see the interrelationship between putting more troops in Afghanistan and putting more pressure on the situation in -- in Pakistan?

KEANE: Yes, the elephant in the room with Pakistan -- and, also, to a certain degree, with Afghanistan -- has always been, their lack of understanding that we're going to stay in that region. They -- they're not sure we are.

And -- and given our track record in Afghanistan and also in Pakistan, there's reason for that skepticism. That's why Musharraf and this regime to this day has a hedging strategy with the Taliban. We have to convince them that we're there, that Pakistan's stability is in our national interest. And we also have to prove that, as well, by stabilizing Afghanistan.

I agree with the senators. If we ever lost in Afghanistan, that contributes directly to destabilizing Pakistan. So our actions in Afghanistan relate clearly to Pakistan.

KEANE: The other thing, to get specifically to your point, we're starting to make some headway with Kiyani and the generals in Pakistan, to pull forces away from the Indian front, so to speak. We have great difficulty convincing them that the major threat to the nation-state is, in fact, the ranging insurgency inside the nation- state and not the external threat of India. To us, it's self-evident, but to them it's not.

STEPHANOPOULOS: It's not.

KEANE: And that's the reality of it.

STEPHANOPOULOS: We're just about out of time. I want to go once around the table with this question: What's the one thing you want President Obama to have in mind as he makes these decisions?

CHAMBLISS: Our troops and the stability of our troops and -- and the fact that we're giving our troops what they need. And I mean, from the top down, we've got to make a decision from the leadership standpoint whether we're giving more troops, but we've still got to make that commitment of making sure that we're enforcing and reinforcing them like we need to.

MCGOVERN: I would urge them to keep in mind that stabilizing Afghanistan should not mean and does not mean enlarging our military footprint there. I think it would be counterproductive.

I also think we're going bankrupt. We have wars in Iraq, in Afghanistan, hundreds of billions of dollars that are all going on to our credit card. Our kids and our grandkids are paying for this. You know, we need to be smarter about where we deploy our -- our resources. And I think enlarging our military footprint in Afghanistan would be a mistake.

We need to come up with a strategy that includes an exit strategy because it'll also put pressure on the government of Afghanistan to step up to the plate, which it has not done so far.

KEANE: Well, I think he has the opportunity to be decisive, in terms of our national interest in Afghanistan and also in Pakistan. The reality is, since 2003, when we shifted our priority to Iraq, Afghanistan has been a distant second priority. Now those resources are available to make it the main effort, and that we should do, and that's what I mean by -- he now has the opportunity to be decisive, to control the outcome in Afghanistan, and we can get the outcome that we desire. FEINSTEIN: He said we're going to stay. If we stay, we cannot lose. What strategy, what tactics give us the best chance to carry out the mission? And the mission has to be to stop the violence and secure the country and see that you have an honest government that can begin to take care of its people. And to me, that's the plan.

STEPHANOPOULOS: Thank you all very much. Difficult problem, very enlightening discussion.

The roundtable is next, George Will, Arianna Huffington, Donna Brazile, Nicolle Wallace. And later, the Sunday funnies.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(UNKNOWN): President Barack Obama for his extraordinary...

(UNKNOWN): This is the committee's preaching to America.

(UNKNOWN): Obama's ideas and principles are very much the principles of the Norwegian Nobel committee.

OBAMA: I do not feel that I deserve to be in the company of so many of the transformative figures who've been honored by this prize.

GORE: I think it's extremely well deserved.

LIMBAUGH: He's not only the first post-racial president. He's also the nation's first post-accomplishment president.

MCCAIN: I'm sure the president understands that he now has even more to -- to live up to.

(END VIDEO CLIP)

STEPHANOPOULOS: Another Friday, another shocker. Everyone's got an opinion. Let me bring in the roundtable on all this.

I am joined, as always, by George Will, Nicolle Wallace, former communications director in the Bush White House, Arianna Huffington of the Huffington Post, and Donna Brazile.

And -- and, George, I have to confess, when I found out about this, I first wanted to know what White House thought. The next thing I wanted to know, what you thought, given your history with the Nobel Prize committee.

WILL: Well, the Nobel Prize committee would with this decision have forfeited its reputation for seriousness if it had a reputation for seriousness. The president has a problem in Afghanistan. He has a real problem in Scandinavia, first Copenhagen, then Oslo.

The award set off a global cry of two words: For what? Well, the committee answered that. They said, after 263 days of his presidency, but, really, after 11 days, because the -- it was February 1st that the nomination list closed, he was honored for values and attitudes -- notice the word "attitudes" -- values and attitudes shared by a majority of the world's population. This is an award for attitudinizing.

BRAZILE: It is well deserved, because after 11 days...

WILL: Well deserved?

BRAZILE: Come on, George. I am a forward-looking optimistic person, and the president has -- in my judgment, he has -- it is not only well deserved, but he must also earn it.

George, in 11 days, President Obama overturned many of the policies that much of the world disliked. He ended -- banned torture. He proposed closing down Gitmo Bay.

WILL: You mention Gitmo?

BRAZILE: And he -- yes. Yes. It's a proposal, and he has to work with members of Congress and states to get it finally closed.

(CROSSTALK)

BRAZILE: He closed secret prisons, CIA prisons across the globe. And he reversed the global gag rule. So, yes, in 11 days, he committed a great deal...

(CROSSTALK)

STEPHANOPOULOS: Nicolle, Donna went even farther than the president...

(CROSSTALK)

BRAZILE: He was humbled and surprised. I was shocked and -- and excited.

WALLACE: I love Donna Brazile.

STEPHANOPOULOS: But he did, I think, take out some of the sting of whatever embarrassment might have been felt by coming right out on -- on Friday and saying, "I don't think I deserve this."

WALLACE: "I didn't deserve it." Right, there wasn't a debate in this country about whether he deserved it or not because he came out and said he did not.

But, look, I think Republicans have to resist the irresistible temptation to be too snarky with this, because I think it is often an outside event that a White House -- you know, White House staffers work hundreds -- you know, over 100 hours a week, but it is often that outside event that you never saw coming that crystallizes a narrative that undermines a president.

And I think, in this case, you know, the ads that the McCain campaign ran against the one who would part the seas and heal the waters and the air, you know, this is really an affirmation of that caricature. And I think, no matter what they do, I don't know that they'll ever be able to get beyond the image of Obama, the one -- style over substance.

STEPHANOPOULOS: Well, they -- but they clearly seemed aware of that, which is, I think, what drove the president's statement on Friday. But, Arianna, it does lead to the question of what kind of impact this has on the president's agenda going forward. And, clearly, the Nobel committee wanted to encourage the kinds of decisions that Donna was citing there.

HUFFINGTON: But, you know, my first reaction was actually to cringe on the grounds that this wasn't hubris, this wasn't egos flying too close to the sun. This was another theme in Greek mythology, George, which is, when there's too much good fortune piled on someone, the gods get jealous and they want revenge. And so it really...

STEPHANOPOULOS: And the revenge is the Nobel Peace Prize here?

HUFFINGTON: And the revenge is whatever is going to happen next. And the -- and the revenge could be in the form of Afghanistan, because if the president makes the wrong decision in Afghanistan and escalates, this could be a bloodshed, an attack on civilians inevitably that will make giving Henry Kissinger the Nobel Prize in '73 seem OK.

STEPHANOPOULOS: Let me -- let me press you on that -- on the -- on the politics of that, we don't know. But if that idea were lurking somewhere in the minds of those in the Nobel committee, I don't think they understand the country. I mean, if anything -- I don't there's going to be political impact here at all. I think the president will be disciplined about making a decision for non-political reasons. But if anything, this would drive him into the arms of General McChrystal, wouldn't it?

HUFFINGTON: Well, I hope it doesn't. I mean, I hope that he is going to make a decision based on the best interests of this country rather than on what the Nobel Prize committee did.

But there's no question, listening to the roundtable here this morning, that in the end there's going to be so much pressure on him that he's not going to be able to withstand, to split the difference. And that's what's problematic about this White House. Splitting the difference is not leadership.

At some point, you've got to be on one side or the other. He's got to listen to George Will. This issue is beyond left and right. And there are many conservatives who actually recognize that this is imperialism that has absolutely no good point to be made for American national security.

STEPHANOPOULOS: The -- the only thing that probably you and George will -- will agree on in this -- in this season...

WILL: And I wouldn't quite characterize my position as anti- imperialism at this point. But I -- I want to go back to something you said about the narrative.

If there is a narrative that's developing that's -- that's problematic for this presidency, it is the belief that there is a cult -- in which the presidency, president himself, is a communicant -- that is entirely detached from accomplishment, that this is entirely a presentational presidency, and that's where we come down to.

Just -- just -- I mean, the president -- today there are more American troops in Iraq and Afghanistan combined than there were when the winner of the Nobel Peace Prize became president.

BRAZILE: Well, first of all, this is not just about Barack Obama. It's about the movement he represents, the movement for change, the movement that ignited so many ordinary citizens to take to the streets and get out to vote for the first time.

I think the Nobel committee also recognized that this was a new era in American politics, an era that will defined more about our engagement with the rest -- with the rest of the world and not our isolation.

So I think there's something much larger than just giving one man a prize. It's acknowledging that there's something else going on in this country.

HUFFINGTON: But, Donna, you're in touch with this movement, and you know this movement is deeply disillusioned, and this movement is disillusioned on many fronts.

The fact is that, right now, it appears there are two set of laws in America. One applies to Wall Street and the powerful in Washington; and one applies to the rest of America. And it's not clear where Barack Obama is. Increasingly, it appears that it is where Larry Summers and Wall Street is, while millions are losing their jobs, their homes are being foreclosed, their credit cards are being defaulted on. And where he is? Where is his leadership?

BRAZILE: I think that is -- that is, in essence, what the White House must now grapple with as they not only come to a decision about Afghanistan, but as they confront, really, a big problem in this country, and that is the rising number of unemployed Americans.

The movement clearly want the president to act boldly and to take on the status quo and not to allow this need for bipartisan or need to compromise to rule his agenda. That's been the problem.

STEPHANOPOULOS: You know, the -- the chair of the Republican National Committee, Michael Steele, in his first statement -- and he probably took it a little too far, was a little too sharp, but he did go straight to jobs and the economy. And I think that's why, all things being equal, the White House probably would prefer the Nobel Prize for economics so they could focus more -- more on -- on jobs.

WALLACE: That's right.

STEPHANOPOULOS: But how -- how big of a problem is this for the president now?

WALLACE: Well, look, the other problem with the movement is that it's shrinking, and it's not nearly as exciting to support an incumbent president as a candidate for president.

So, you know, I think there was a joke during the Bush years that being president is hard work. And I think Obama is confronting the same reality.

But, you know, I think to the extent that he has become insulated from the gritty realities, I think that is furthered by this prize. I think when you are adored by European capitals and viewed as detached from the concerns of everyday Americans, that is never good for a president.

STEPHANOPOULOS: Meanwhile, you talk about...

BRAZILE: But there's no evidence that he's detached.

WALLACE: Well, the approval numbers are down to 50 percent from 78 percent. So I think there is evidence that he is losing touch...

(CROSSTALK)

STEPHANOPOULOS: It's between 50 percent and 60 percent.

HUFFINGTON: Yes, I don't think that's the main proof, though. The main proof is that the special interests that he ostensibly came to Washington to counter are more powerful than ever. The banks that had to be bailed out to the tune of trillions of dollars are actually writing laws in Congress, watering down foreclosure amendments, are watering down credit card reform. What happened?

STEPHANOPOULOS: Well, in fact, on Friday, the other event the president had was coming out for this Consumer Financial Protection Agency...

HUFFINGTON: Which has already been watered down.

STEPHANOPOULOS: They're trying to water it down. He's pushing for it.

HUFFINGTON: And were it not -- were it not for Elizabeth Warren, who's a real American heroine, who is actually driving this reform, this would have been even further watered down.

STEPHANOPOULOS: Well, you've got to give the president credit for pushing it. He is out there pushing it.

WILL: Here's the problem, Arianna, is that the Democrats who control the Senate and the Democrats who control the House and the Democrats who control the White House, what is the problem with this change you don't seem to be believing in?

HUFFINGTON: Well, this problem is that we have a Washington bipartisanship that exists only when it comes to how laws are made. The power of lobbyists in this city is really overwhelming. I mean, millions of dollars...

WILL: You think there's excessive bipartisanship? HUFFINGTON: ... are spent every day...

WILL: That's your...

HUFFINGTON: On -- in this one issue, in this one issue of how laws are made.

WILL: How many Republicans voted for the stimulus?

(CROSSTALK)

HUFFINGTON: In this one issue of the power of special interests, that's bipartisan.

STEPHANOPOULOS: And -- and we're about to see how many vote for health care. I'm going to switch topics here right now, because you talked about gritty realities. There was some grinding forward on health care this week, the Senate Finance Committee likely to vote on Tuesday.

After a -- a report from the Congressional Budget Office, which kind of affirmed some of the president's goals in -- in this Finance Committee legislation, says it will reduce the deficit by $81 billion over 10 years, cost about $829 billion. And -- and the White House is now trying to get at this issue of -- of partisanship by pointing to Republicans who are supporting their efforts of reform.

(BEGIN VIDEO CLIP)

(UNKNOWN): Bob Dole said, "I want this to pass. We've got to do something." Bill Frist said that, if he were still in the Senate, "I would end up voting for it." Tommy Thompson said that failure to reach an agreement on health care reform this year is not an acceptable option. But some Republicans are siding with the insurance companies and just saying no to health insurance reform.

(END VIDEO CLIP)

STEPHANOPOULOS: Now, as ads are wont to do, that left out some other comments by those same gentlemen who indicated that they had real problems with -- with some of the bills. But there does seem to be momentum behind the president's efforts. This week, more of those Republicans out of office coming behind it. It appears it will pass the Finance Committee and a change in the psychology among Democrats, feeling now this really will pass, this is going to happen this year.

WILL: Well, the CBO report was very important because it said it will only -- a new way of thinking -- only be $829 billion. But the Congressional Budget Office, a real nest of honest people in this town, did what they are statutorily required to do, that is take the bill at face value, at what it says will happen will happen.

But what the bill says is, the most expensive provisions begin in 2013. The 10 years they priced it for were 2010 through 2019. Therefore, an honest accounting of this, which the -- the bill was written to prevent -- an honest accounting would say, in the first 10 years of the full implementation of this, it would be $1.3 trillion. Now, they -- they wanted to get below $1 trillion. They didn't come close by an honest accounting.

HUFFINGTON: You know, it's really always interesting what we send to CBO and what we don't. Like, we did not say to CBO, can you please tell us what's going to happen if we go into Iraq? Can you please tell us what's going to happen if we escalate in Afghanistan? Or can you please tell us what will happen if we desegregate the schools?

Whenever we consider something really important...

STEPHANOPOULOS: Well, it's not really their job, but I'll take your point.

HUFFINGTON: Whenever we consider anything really important in this country, we do it. So this is one of those fundamental reforms that needs to happen. My problem with the Max Baucus bill is that it was really written by the health insurance industry. It does not include a public option. It concedes a lot to pharma. And, basically, it's not going to bring about the cost containment that is essential if there's going to be real reform. There is no competition allowed in it.

STEPHANOPOULOS: That is one of the questions, Donna. Another one is that part of the way that it achieves this deficit reduction over the first 10 years and the second 10 years is with this tax on insurance companies, the high-priced health insurance plans. Now it's an excise on -- on insurance companies.

And that's the only way you could get real deficit reduction, yet you've got at least 170 Democrats in the House who say there's no way they're going to go along with it.

BRAZILE: George, I do believe, at the end of the day, that issue is going to be resolved, because the White House is clearly engaged at this point, whereas before they took -- they had a hands-off approach, let the committees handle all of the details. Now that we're -- we're at the -- the final leg of this -- this jigsaw puzzle, the Senate Finance Committee, the White House will be working side by side with Reid, Baucus, Dodd to produce a leadership bill that meet all of their -- the goals that the president stated from day one, which was to make it deficit-neutral, to bring down the costs, more choice in competition, and if you like what you have, you can keep it, if you don't have anything, you'll have more -- more options.

Now, that said, I do believe that this issue of reducing the overall costs of the Medicare expenditure, that is -- that is a contentious issue. Should we tax the -- the Cadillac plans? Should we give more tax credits to the middle class so that they can afford health insurance? These issues will be resolved, but I'm confident, at the end of the day, the president will have something on his desk by Christmas.

WILL: Donna, they have been -- Congress has been required by law to cut Medicare since 2003 and always puts it off. What makes you think they're going to cut it now?

BRAZILE: I do believe this administration, working with Congress, it's on the table, George. It's on the table.

STEPHANOPOULOS: And that -- that -- that could end up being politically perilous for Democrats going into next year. But I wonder, Nicolle, to flip the question around, you saw the ad by the DNC right there.

WALLACE: It looks like a tryout reel for "Dancing with the Stars."

STEPHANOPOULOS: Well, a lot of former...

(CROSSTALK)

(LAUGHTER)

STEPHANOPOULOS: ... a lot of -- a lot of serious former Republicans all saying, "Get behind this effort." Isn't there some political peril for the Republican Party in being seen as not part of this process?

WALLACE: Well, I think it exposes the degree to which the Democrats have successfully mischaracterized the Republican position on health care. All Republicans are not against reform; they're against this reform.

And I think this health care debate has brought Obama down to Earth. His numbers came down to Earth when the American public started to seriously contemplate an expanded role of the federal government in their health care.

And I think what's happening in Washington is certainly a focus on -- on the Baucus bill, but what's happening in America is increasing anxiety, not decreasing anxiety, about an expanded role for the federal government in the way they receive health care.

HUFFINGTON: But that -- but that anxiety is really the anxiety about what's happening in people's lives and the anxiety about where this administration put its priority, in terms of how much we gave to Wall Street. There is an opportunity cost in everything.

The fact that we gave trillions to Wall Street in order to save Wall Street -- there has been no connection to the real economy. Remember...

STEPHANOPOULOS: Well, the White House is -- and I think they would concede that. But what does the president do about it now on health care?

HUFFINGTON: But it's -- it's very significant, because the anger that we've seen unleashed is very related -- the minute you asked the second question -- to the bailout. And the fact that this is now focused on health care, it's because that is what is on the table. But the president needs to address this. He cannot ignore the fact that we saved Wall Street in order to save the real economy, and there has been no credit extended to the real economy, to small- business people, to families, any of that that was supposed to be the reason for saving them.

WILL: Let me give an alternative explanation of why people are anxious. Why? Only 1 in 5 Americans believes that under the bill proposed their insurance would be improved. This is a $1.3 trillion program that leaves 25 million Americans still uninsured and includes, for example, $40 billion tax on the makers of medical devices.

Now, we all know, Arianna, corporations do not pay taxes; they collect taxes. It will be passed on as a cost of doing business to the great American public, which was, the president said, immune from any tax increases.

BRAZILE: Once again, we're arguing maintaining the status quo, which I think everyone agrees is -- is unsustainable. Going back to what Nicolle said, 80 percent -- some Republicans are saying they agree with 80 percent of the bill. Well, fine. Let's get behind the 80 percent that they support. They want more...

WALLACE: Well, Democrats control everything. I mean, I think if that's what the Democrats suggested...

(CROSSTALK)

BRAZILE: Well, and -- and -- and, look, the -- look, the...

WALLACE: That's not on the table, Donna.

BRAZILE: And -- and -- and let me just say this. The Republicans have had plenty of opportunities in the committees to put forward their ideas, and the Democrats have incorporated many of those ideas in this bill. It's time for the Republicans to either put an alternative on the table or to just basically say that they want to keep the status quo, which means, for women, especially women my age and under, that we will continue to pay higher premiums just because we're female.

HUFFINGTON: But, Donna, you know, there's really no point in passing a bill that will be called reform, but will not be reform. We did that with education, remember...

BRAZILE: I agree.

HUFFINGTON: ... and nothing was reformed. And I think that's where we are headed. There will be some bill passed. There won't be a real public option. There will be a trigger or an opt-out or some compromise. But in the end, we'll water it down.

(CROSSTALK)

STEPHANOPOULOS: ... part of a big political problem the president faces now, though? I mean, I -- I think that, you know -- I think the psychology that's going to take hold among Democrats in -- in the House especially is the idea that, even if they have some of the concerns you have, that failure is not an option, that if -- if -- if the Democrats and the White House fail here, the entire enterprise goes under. As a supporter of President Obama, aren't you concerned about that?

HUFFINGTON: Well, politically, in terms of 2010, I think it will be very problematic, but this administration and the Democrats are facing so many problems when it comes to 2010, including Charlie Rangel, that I don't know what they're going to start focusing on. I mean, they have a real problem.

The approval of Congress is now down to 21 percent. It fell 10 points over the last month. So either they're really going to stand up for the change for which they were supposedly elected or they're going to be part of the problem and part of the status quo.

STEPHANOPOULOS: You've brought me to my next issue, because there were two big ethics issues up this week. Charlie Rangel, the chairman of the House Ways and Means Committee, facing a series of questions about whether he reported income that he received for rental properties, whether he had the right disclosure of -- of -- of other assets. The Ethics Committee announced that they were expanding an investigation after the House rejected a resolution criticizing him for that.

Also, Senator John Ensign of Nevada facing questions about whether he helped the husband of a former staffer -- another former staffer get jobs and lobbying contracts to cover up his affair with the former staffer. Here's how they responded.

(BEGIN VIDEO CLIP)

RANGEL: What is normally done is members wait until the Ethics Committee completes its investigation and its report. That's what I'm hoping happens with the Republicans.

ENSIGN: We absolutely did nothing except for comply exactly with what the ethics laws and the ethics rules of the Senate state.

(END VIDEO CLIP)

STEPHANOPOULOS: George, Ensign down to 22 percent support in his own state, but it seems like, at least in the short run, more problems for the Democrats with Congressman Rangel, chairman of the Ways and Means Committee, has tax issues. Now they've had to vote on these resolutions I think at least twice and are starting to lose a little bit of Democratic support. A couple leaked away.

WILL: Charlie Rangel is a genuine war hero, a delightful person, intelligent and a good committee chairman, but his committee writes the tax laws. And there are some niggling people out there who think those who write the tax laws ought to abide by them. Seventy-five thousand dollars in -- in income that taxes were not paid on. He underestimated by about half his assets on his disclosure form to Congress. Do the rules mean anything at all? BRAZILE: Well, Mr. Rangel has admitted his mistakes, and he has called for this inquiry. I don't think we should adjudicate this on the House or Senate floor, in terms of Mr. Ensign. You know, there are other investigations.

Jerry Lewis from California is under -- he's under investigation by the Department of Justice. He's a Republican accused of selling earmarks to family members and friends. Sam Graves from Missouri is under investigation. You know, we will always have some form of hanky-panky corruption up there.

STEPHANOPOULOS: Hence, Congress's low approval rating.

(CROSSTALK)

BRAZILE: But -- but I do believe, at the end of the day, that if -- if these -- especially for the leadership, they will have to decide at some point if Mr. Rangel needs to step aside, in terms of his chairmanship of the Ways and Means Committee. I think the speaker and others are waiting for some action by the Ethics Committee before they take...

(CROSSTALK)

STEPHANOPOULOS: And they want to get through health care, but it has to happen before 2010.

Fifteen seconds.

HUFFINGTON: Fifteen seconds, they should decide it on Monday morning. He should step down from his chairmanship of the Ways and Means Committee if they want to improve their chances for 2010. Otherwise, they might see their approval rating come down to single digits.

STEPHANOPOULOS: You guys continue this in the green room. You can all follow it later on abcnews.com and get our daily newsletter all week long, also on abcnews.com.

END

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