'This Week' Transcript: Judy Smith, Jack Lew

LEW: You know, George, I have to start by saying that, uh, Chairman Bernanke has been an extraordinary and remains an extraordinary Fed chairman.

Um, I'm going to keep private any conversations that we're having, uh, with the president on the question of -- of when and what kind of succession, uh, there should be. I think that those conversations are best left in the privacy of the Oval Office.

STEPHANOPOULOS: But the Senate letter suggests that Ms. Yellen will be easier to confirm than Larry Summers. Is that a factor?

LEW: You know, George, I'm really not going to get into commenting on -- on different, uh, candidates and potential paths. The conversations really should stay where they are.

STEPHANOPOULOS: Let me ask you about the situation facing Detroit right now, filing for federal bankruptcy last week. The governing board of the AFL-CIO has weighed in very strongly, saying that the federal government must step up and provide assistance to Detroit.

Is that going to be coming?

LEW: You know, George, uh, Detroit's economic problems have been a long time in developing. We stand with Detroit trying to work through, uh, how it approaches these issues.

To that extent that there are kind of normal relations between the federal government and state and local government, we -- we've been using those methods. Even in the Treasury Department, we have a program where we work to -- to help with housing programs. I think when it comes to the questions between Detroit and its creditors, that's really something that Detroit is going to have to work out with its creditors.

STEPHANOPOULOS: So a federal bailout off the table?

LEW: I -- I think Detroit is going to have to work with its creditors on this.

STEPHANOPOULOS: And that will be the last word today.

Secretary Lew, thanks very much.

LEW: Thanks, George.

STEPHANOPOULOS: Let's get more on this now from the roundtable. Joined by George Will, Peggy Noonan of "The Wall Street Journal," former counselor to the Obama Treasury Department, Steve Rattner, and Katrina Vanden Heuvel, editor and publisher of "The Nation."

So George, you saw me go back and forth with Mr. Lew right there. He says the president is not going to negotiate over the debt limit, but it's going to get worked out. I guess the White House seems to be betting that the Republicans are just going to cave.

GEORGE WILL, ABC NEWS: I think the Republicans know this is a weak lever with which to try and move the world, because indeed the debt ceiling always at the end gets raised.

What interested me about what he said was, he's looking back and saying the reason the recovery is as bad as it is, and it is bad, is what happened in the summer of 2011 over the debt ceiling.

That is a pretty--

STEPHANOPOULOS: That did hurt confidence, though, didn't it?

WILL: Let's look at the recovery, George. We are now in the fifth year of a recovery. There are 2.2 million fewer jobs than there were in the pre-recession peak. That's five years, four and a half years in now, and after the recession of -- of 1981, '82, we were back at the pre-recession peak in 12 months. 31 percent of Americans 18 to 35 are living with their parents. That ought to scare parents.

STEPHANOPOULOS: And Katrina, that's one of the reasons that the president gave the speech this week. He says he wants to break this what he's called the destructive, damaging framework, focused on deficits in Washington. He wants to get back to investments that he believes will create jobs.

KATRINA VANDEN HEUVEL, THE NATION: And this is where I wish he had been for a while. It's important he's gone out to the American people, exposed the Republican Party for the wrecking crew it is. If it hadn't had sabotage as its only economic plan in these last few years, we would have seen the common sense policies the president is now advocating for -- investment in infrastructure, in health care, in education. This is what we need to break the terrible inequality that's not simply a moral problem, but a bad economic, political problem.

So I think we're on a better course, but it is going to require the support of people outside. And I think you see in the Democratic Party, a new level of commitment as social issues unify them, but Elizabeth Warren, Sherrod Brown, others have a broader, more populist voices in this conversation.

STEPHANOPOULOS: You are seeing (ph) more populist Democrats, I agree with that, but Peggy Noonan, you know, the president going back to the country one more time, it's unclear that these speeches are doing much to move public opinion, much less Washington.

PEGGY NOONAN, WALL STREET JOURNAL: Yes, I think that's true. But when the White House calls it a pivot, somebody counted it up and said it's probably the tenth pivot to the economy the president has done since he came in.

I noticed that in one of the speeches, it went over an hour. There was a heck of a lot jammed in. That tells me something. It said we're not sure exactly what to say, so we're going to say everything, but a speech about everything is a speech about nothing. Beyond that, I think every president in the intense media environment we have now, certainly every two-term president, gets to a point where the American people stop listening, stop leaning forward hungrily for information. I think this president got there earlier than most presidents. And I think he's in that time now.

STEPHANOPOULOS: In a more fractured media environment as well. Steven Rattner, the question is, if speeches aren't going to do the job, and Congress seems to be immovable, is there anything the president can do on his own?

STEVE RATTNER, FORMER COUNSELOR TO THE TREASURY DEPARTMENT: Well, he said he would use whatever executive authority he can muster, and there are various levers and programs. You heard Jack Lew mention that in the context of Detroit. There are little bits and pieces that they can do.


STEPHANOPOULOS: I heard him say on Detroit that he's not going to follow your advice that you wrote in the "New York Times," to provide some federal assistance.

RATTNER: We'll get to that, I hope, because I have a different view on some of that, anyway. But the point is, we have a system of government that requires consent from the congressional branch as well as from the executive branch, and there's a limit on what he can do.

I think he's doing the right thing to go out and call out this need to do something on the economy. I find it extraordinary that we're living in a world of 7.6 percent unemployment. I'll agree with George that the recovery is certainly slower than anybody would want. And yet Congress is doing nothing. The last Congress passed 30 percent fewer bills than any other Congress in modern history. This Congress has passed fewer still. You may say it's great, let them pass even fewer laws. But I think some of us think there's -- work could be done out there, and Congress ought to be doing it.

WILL: Passing fewer laws, but comparable to previous Congresses in legislative pages, they just jump them all into comprehensive legislations.

As far as you can tell, your argument is, Katrina, Republicans are at fault because of the 753,000 jobs created this year, 557,000 have been part-time. But it's not the Republicans' fault, surely, that workforce participation has declined during this recovery?

VANDEN HEUVEL: First of all, we have accepted in this country a level of joblessness that should not be the new normal.

But if you had had a Republican Party that was willing to do common sense things that Republican parties of previous years, I think of Eisenhower, had done in investing in infrastructure, for example, you would have seen the ability to see growth. And that has not happened.

And you had a speaker, John Boehner who said last week that his job is to repeal, not to pass legislation. That is not a constructive congress at a time when I would agree with you, this recovery is fragile. And I don't -- I think that is the function of a country and a party, both parties, which have said that austerity -- deficit reduction is more important than addressing joblessness. That has been the problem in these last few years. That is the real crisis.

STEPHANOPOULOS: One of the question is going to be, Peggy, though, whether the pressure created by the sequester, which has been real cuts in several programs, causes at least some Republicans to join Democrats to try to undo it.

NOONAN: Maybe that will happen. I haven't heard about any negotiations or talks or serious signaling that is going on, which is something that always confuses me a little bit about this administration.

Katrina, I think part of the problem here is that the president at some point decided these Republicans can't be dealt with, their recalcitrant, it just can't work. And my feeling has always been no president can ever say that. You've to try to make it work.

Excuse me, Tip O'Neill disliked the president he worked with. They made it work.

It always seems to me there's a lack of sway in this White House.

RATTNER: The president's going up to The Hill this week to meet with congressional leaders. You can say what you want about that. But here's the point, what the House Republicans want is not just sequester, the appropriations bills they are passing are far deeper cuts than sequester. They are massive cuts. You look at the transportation bill. They want to cut $5 billion out of it. The Senate wants to add $5 billion.

So the point is the House is not just saying sequester. Sequester itself is a terrible thing, of course, because we're cutting all the wrong things. We're cutting infrastructure, we're cutting R&D. We're cutting exactly the stuff we should be investing in.

But I think the president has gone to The Hill. I think he's had them to the White House. He's now out in the field and he's trying to make his case.

VANDEN HEUVEL: You're looking at a Republican Party that may well now cripple the credit markets and shut down government in order to ensure that 30 million Americans do not have health care. I mean, this is -- the president and I speak from the progressive, independent Democratic side of the aisle. People have been frustrated that until now the president has been unwilling to call out the Republicans. There was a lot of playing footsie in 2011. Where did that get him?

I don't know where it heads, because this Republican Party is not interested in legitimate, fair, common sense compromise.

WILL: Toward the end of the Knox College speech that threatened never to end, the president gave us an idea of his idea of reaching out to Republicans. He said you know, there are a lot of Republicans that agree with me, they tell me so in private, trust me. But he said they're afraid of their constituents so they won't do this. In other words, there are a few intelligent Republicans who recognize the brilliance of my policies, but they're moral cowards.

Now that's his approach to the Republicans?

VANDEN HEUVEL: I love cross-partisan alliances, George. We have agreed on various things over time. I think the most exciting thing in congress last week was Justin Amash and John Conyers coming together to say enough to NSA surveillance without accountability.

STEPHANOPOULOS: Got close, but did not pass, however.

We have to take a break. I want to go quickly back to you, Steve, on this question of the Detroit bailout. You, of course, you managed the auto bailout for President Obama. Wrote a piece in the New York Times last week saying he should consider federal assistance.

Jack Lew seemed pretty definitive right there it's not coming.

RATTNER: First of all, there's is a difference between a bailout and somehow rescuing the creditors -- avoiding the whole bankruptcy process and some kind of help. And what I'm thinking about is in the second category.

I recognize Washington is not going to come in and undo this default and pay off the bondholders. But you have got a situation where 80 percent of the pain from this restructuring is being borne by the workers and the retirees if this plan goes through. You have a situation -- where I have read that whole plan, and I don't believe it can solve Detroit's problems. Detroit needs investment, and that's where the federal government and the state, particularly, can and should help.

WILL: Can't solve the problems, because their problems are cultural. You have a city, 139 square miles, you can graze cattle in vast portions of it, dangerous herds of feral dogs roam in there. 3 percent of fourth graders reading at the national math standards, 47 percent of Detroit residents are functionally illiterate, 79 percent of Detroit children are born to unmarried mothers. They don't have a fiscal problem, Steve, they have a cultural collapse.

VANDEN HEUVEL: I find that really insulting to the people of Detroit. I think there is a serious discussion about the future of cities in a time of deindustrialization. But in many ways, Detroit has been a victim of market forces, and I think that what Steve said is so critical, that retirees and workers should not bear this. And this story should not be hijacked as one of about greedy, fiscal, public unions.

WILL: But Steve said he...

VANDEN HEUVEL: And fiscally responsibility.

WILL: But Steve said in his op-ed was the people of Detroit are no more to blame than the victims of Hurricane Sandy, because apart from voting, he said. Well, what did they vote for, for 60 years of incompetence, malcontents, and in some cases criminals.

STEPHANOPOULOS: OK, let's (inaudible) get the last word.

RATTNER: So that's fine. And so what do you want to do, do you want to leave them sitting in exactly the situation you just described, or in the spirit of America trying to help people who are less fortunate, whether their victims of natural disasters or their own ignorance or whatever, do you want to reach out and try to help them and try to reinvent Detroit for not a lot of money. We're talking about a couple billion dollars here, this is small potatoes in the great scheme of life, or else you have your scenario, just leave them all sit with feral dogs for the rest of their lives.

VANDEN HEUVEL: Hobbsian anarchy.

STEPHANOPOULOS: We do have to take a break. And coming up, we're going to looking at summer of scandal, Anthony Weiner to Ryan Braun. Judy Smith is going to join the roundtable and George Will weighs in on steroids in baseball.


JAY LENO, TONIGHT SHOW HOST: He was sexting women under the name Carlos Danger. This is Weiner's way of getting more Latino support, I'll use -- I'll be Carlos Danger.

CONAN O'BRIEN, HOST, CONAN: In the press conference, Weiner apologized. He said this will never happen, or my name isn't Carlos Danger.

STEPHEN COLBERT, COLBERT REPORT HOST: Yes, even after the sexting scandal that ended his congressional career, it turns out he learned nothing. Has this man never heard of Snapchat?


STEPHANOPOULOS: No summer slump for the late night comics, thanks to Anthony. Let's get to that with our roundtable. Joined by Judy Smith, crisis management pro who helped create the hit show Scandal.

And Judy, you've had no shortage of high profile clients in tough spots -- Monica Lewinsky, Michael Vick, Paula Deen. You know, I was surprised to hear you say this morning that you wouldn't even take Anthony Weiner as a client.

JUDY SMITH, CRISIS MANAGEMENT: Well, no. I mean, look, first of all it's apparent that he's not listening to anyone, because his campaign manager just quit.

I think he has so many problems. But I think the main issue is that he comes out, he says please forgive me to the American public, and then we're all shocked to find out that this has continued. And not like sort of the usual politician having an affair, there's an element of creepiness to this. And I think that the American people feel that. And I think people are saying, look, step down. It's not about you, it's about the people that you say that you want to represent.

I mean, look he's trying so hard to put the genie back in the bottle, it's not going to happen for him. He can't do it.

STEPHANOPOULOS: It's not going to happen, but, Peggy, it sure seems like he's not going to quit even though his poll numbers are plummeting in New York.

NOONAN: Yes, what's mysterious to me is not will he get out, it's why did he get in? He knew what the history was; he knew what he would be visiting on New York. It all seems to me quite mad.

And I think -- I mean, I think his behavior has been quite clinically sick. And I think we will now find out in the Democratic primary if indeed the voters are sick.


RATTNER: I don't think we're going to get to that point.

STEPHANOPOULOS: You think he's going to get out?

RATTNER: I think he has to. I just think -- I think the consequences, I think maybe you were about to say -- the consequences of him, for whatever future he has, whether it's in the private sector, whatever, of getting 5 percent or 10 percent, or some very small number in this primary, I just think, are overwhelming.

VANDEN HEUVEL: But, you know, I think that New Yorkers -- leave it to New Yorkers. You see the polls imploding already. But I have to say, as a life-long New Yorker, I find this such a turnoff, such a distraction from the real scandals of the city.

And to get serious for a moment, the metastasizing inequality in the city is a real scandal. When was the last time you really fixed on that? There is one candidate in this race, Bill de Blasio, who is speaking to that in a coherent way. But otherwise, until Anthony Weiner's sexting and all of that leave the race, the oxygen's sucked out.

STEPHANOPOULOS: He seems to be talking about that as well, George, and maybe making opposite calculation from what Steve says, that if he stays in the race, even if he doesn't do all that well, it's sort of flushed through the system.

WILL: I will not dwell on the fact, although it is a fact, that if these two people, Filner in San Diego and Weiner here were Republicans --


STEPHANOPOULOS: -- facing charges of sexual harassment.

WILL: -- this would be a part of a lot of somber sociology in the media about the Republican war on women. I will skip that. I will go instead to the fact, what explains this man, Peggy, is that animal neediness for public gratification. There are people like this. He got out of college, went to work on the congressional staff, became the youngest member ever of the New York city council, ran for the House. He can't live without this.

And what strikes me is, you talk as a New Yorker, New York City was the incubator of the heroic period of American liberalism, Franklin Roosevelt, Frances Perkins, his great secretary of the Labor, first female member of the Congress, Fiorello LaGuardia, Republican. And this is what New York liberalism now coughs up?

STEPHANOPOULOS: Judy, one of the things that surprised a lot of people, though maybe it's not surprising that Anthony Weiner wants to stay in, but his wife, Huma Abedin, close aide to Hillary Clinton, gives her first press conference on Tuesday after the new revelations. You know, in the past with other candidates, when the wife stands by them, it seems to make a difference with the voters; seems less likely this time.

SMITH: Well, absolutely. First of all, what they say that I think it's really a personal choice for -- to decide that.

But it made no difference whatsoever, because his behavior is just reprehensible. Clearly, he has sort of an interest in keeping the late night talk show host folks going with it, but, yes, he needs to step down. He's sort of engaging in the same behavior as the -- as the mayor, which is that --


SMITH: As -- I'm sorry.


STEPHANOPOULOS: (Inaudible) charged with sexual harassment, seven women have come forward. He's going to not resign, take two weeks off to get treatment.

SMITH: Two weeks to -- all right -- to fix the problem.

VANDEN HEUVEL: I'm going to pick up on what George said about the war on women.

First of all, many Democratic women have come forward to say this is reprehensible. This is odious, what we're seeing in San Diego with the mayor, with Anthony Weiner, but I think it's very simplistic to draw on the misdeeds of a few -- and let's not forget sexual harassment is not confined to one party -- Vitter, Sanford, Gingrich -- it's about the systemic policy that affect all women, and discrimination and harassment and how you protect women from that as well as giving them public policy tools to live their lives in full. And I think across the board, the Republican Party has vitiated, has gutted the rights on reproductive rights, protection from sexual harassment and discrimination, protection from domestic abuse, pay -- equal pay. These are issues that affect all women.

WILL: Now that's what I call a pivot.


UNIDENTIFIED FEMALE: Done well, done well.


Just one more pivot as well, just to pick up on that point, though, does this blow back on Democrats with having both Filner; you've got Eliot Spitzer in the race for comptroller here, Weiner all at the same time?

RATTNER: No, I don't think so, because I think it is something that affects both parties, whether it's Mark Sanford or David Vitter or whomever. I think it's confined to some individuals who clearly have issues. I don't think it is a broader point about politics or about anything. I think it's a bunch of people who are narcissistic, self-indulgent, sick; whatever Judy would classify them as.

SMITH: All of the above. And, look, I think Spitzer's done a good job in addressing the elephant in a room in particular in his ads and saying, yes, I've made a mistake, but I'm here to serve. He's also, I think, really taking a lower position, comptroller, trying to get that.

By saying let me reengage you and build back up the trust from the public, and that's important instead of Weiner sort of jumping in, you know, one of the most highest --

STEPHANOPOULOS: Crisis management lesson number one, you can't lie in your apology.

UNIDENTIFIED FEMALE: No. Hey, poor form.




STEPHANOPOULOS: Well, we'll be watching to see if Steve is right and see if he does get out of the race. Thank you.

I got to take a quick break. Thanks to our roundtable, George Will is sticking around to talk about the big news ready to drop on Major League Baseball. He'll be joined by ESPN's Jeremy Schaap to give us the latest on the steroid scandal.


And still ahead, Jeremy Schaap and George Will on the cloud over baseball.

Plus we remember a trail blazer with a very special connection to our THIS WEEK family.



RYAN BRAUN, MILWAUKEE BREWERS: If I had done this intentionally or unintentionally, I would be the first one to step up and say I did it. I truly believe in my heart and I would bet my life that this substance never entered my body at any point.

CURT SCHILLING, PITCHER: The more you think about it, the more disappointing -- I think disappointing is a great word, for the game. And for all the things that are around this, and as one of the guys who defended Ryan Braun after the things (ph), it's unbelievably disappointing.


STEPHANOPOULOS: Well, Ryan Braun did come clean this week. He is out for the rest of the season. Suspended. Another black eye for baseball.

There is more to come. We want to get the latest now from George Will, Jeremy Schaap of ESPN.

And Jeremy, a lot of rumors swirling around Alex Rodriguez as well as many others. What's your best reporting on how far this is going to reach and when it's all going to break?

JEREMY SCHAAP, ESPN: Well, we all think some time in a couple weeks, maybe a little bit longer, Alex Rodriguez and up to about 20 other players in the majors and the minors, will be suspended.

Rodriguez is a special case because...

STEPHANOPOULOS: He's fighting it, right?

SCHAAP: He's fighting it in the media right now in New York. But it's presumed that he's also fighting it with Major League Baseball. There's the possibility of a lifetime ban, because not only does baseball believe that he was cheating, not only does it believe that he lied them about it, but it also believes that he tried to undermine its investigation. So he's a special case.

STEPHANOPOULOS: Lifetime ban, George, that would certainly signify baseball's seriousness about cleaning this up.

WILL: The sea change here, the real seriousness now on the part of the players themselves. George, in 2011 the Brewers played the Diamondbacks in a five-game playoff. They beat the Diamondbacks 3 games to 2. In that series, Ryan Braun was 9 for 18, batted .500, four doubles and four RBIs. He was sensational, and he almost certainly was cheating.

Now, the players on the Diamondbacks know he took money out of their pocketbooks. And the Player's Association has changed in response to their constituency, the players themselves, which -- for years, the Player's Association treated this as a privacy issue, a civil rights issue, this resistance to testing.

One of the leaders of the player's union said it's like smoking cigarettes, it's a bad habit, but of no concern to anyone else.

The players have changed their minds.

STEPHANOPOULOS: Agree with that?

SCHAAP: It's totally changed. The leadership has changed, the player's union, the rank and file thinking about this has changed entirely. And that is an essential element here.

But it's still worrisome that there's no real deterrent, the way there is in other sports like track and field and cycling. It was Pete Rose who knows something about crime and punishment who said the other day up in Cooperstown there aren't too many people who wouldn't take the deal that Ryan Braun seems to have made, which is you get $120 million, and give back $3 million.

So until baseball approaches this with even greater punishment, and it's doing a better job than the other pro leagues, we're still going to have this problem.

STEPHANOPOULOS: George, it does suggest that someone is going to have to get a real permanent ban, because as Jeremy points out, Ryan Braun could be back next year making a whole lot of money.

WILL: Well, in a subsequent collective bargaining agreement with the players, you may find that there will be a mechanism for voiding contracts, voiding the, I don't know how many scores of millions of dollars Braun still has coming.

SCHAAP: About $120 million.

WILL: $88 million for Alex Rodriguez. If you can void contracts, that's the hammer.

STEPHANOPOULOS: We only have about a minute left. George, we've got to get you on a big change for your baseball team, the Chicago Cubs, Wrigley Field now going to have a jumbotron.

WILL: Jumbotron and some advertising. The problem is, Wrigley Field has been a little baseball Williamsburg. A quaint little artifact, but not serious. And the Cubs find that unless they can generate more revenue, they can't compete with the more modern venues to put a better team on the field.

STEPHANOPOULOS: They really had no choice, did they, Jeremy?

SCHAAP: Well, they had no choice, but some of the people who have the rooftop exposure into Wrigley Field are a little bit upset about his. You know, how many signs they put up, how many scoreboards they put up is of less consequence, obviously, than the lack of pennants they have put up.

STEPHANOPOULOS: George Will, Jeremy Schaap, thanks you very much for your insight this morning.

And in the Sunday spotlight today, we remember an American treasure with a special connection to This Week, Lindy Boggs, congresswoman, ambassador and mother of our own Cokie Roberts, passed yesterday at the age of 97.


STEPHANOPOULOS: Heartbreaking tragedy forced the spotlight on Lindy Boggs.

UNIDENTIFIED MALE: She worked harder on this campaign than anybody else, and Lindy, this is for you from me.

STEPHANOPOULOS: When the plane carrying her husband, House leader Hale Boggs, disappeared in Alaska.

UNIDENTIFIED MALE: 70 planes up over southern Alaska searching for the twin engine Cessna.

LINDY BOGGS: I hope I'll be half as good a congresswoman as you expect me to be. Thank you.

STEPHANOPOULOS: Boggs, who had run her husband's campaigns, said she was just carrying on his work.

But it didn't take her long to make a personal mark.

UNIDENTIFIED FEMALE: Lindy Boggs from the great state of Louisiana.

STEPHANOPOULOS: A Louisiana native who grew up on a plantation, she became a champion for civil rights and equal rights for women.

UNIDENTIFIED MALE: The chair now recognizes Ms. Lindy Boggs.

BOGGS: Thank you, Mr. Chairman.

STEPHANOPOULOS: Using her seat on the banking committee to get women credit cards without their husband's permission. As she told Cokie, her role model was another trailblazer.

COKIE ROBERTS, ABC NEWS CORRESPONDENT: You got to Washington, Eleanor Roosevelt was first lady.

BOGGS: She, of course, was my inspiration.

STEPHANOPOULOS: Boggs served 17 years in Congress. The first woman to chair a political convention, then ambassador to the Vatican.

What is it about John Paul that you think makes him so accessible and inspiring to this younger generation?

BOGGS: I think his total rapport with them. He believes in them.

STEPHANOPOULOS: Boggs retired in 1990. A Washington fixture famous for her southern charm, she never forgot lessons learned in the Louisiana she loved.

BOGGS: I suppose all women, but mostly southern women do what they do when they have to do it. And you just don't think about whether you should be doing it or not if you're called upon to do something, you do it.


STEPHANOPOULOS: What a lovely presence she was. Our thoughts are with Cokie and her family this morning.

And now we honor our fellow Americans who serve and sacrifice.

This week, the Pentagon released the name of four soldiers killed in Afghanistan.

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


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