'This Week' Transcript: Napolitano, Gibbs, McConnell

JAKE TAPPER, GUEST HOST: Good morning and welcome to THIS WEEK.

(BEGIN VIDEOTAPE)

TAPPER (voice-over): Terror in the skies.

UNIDENTIFIED MALE: This, if nothing else, is a wake-up call.

TAPPER: How did the attempted airline bomber slip through security? We'll ask the top cabinet official in charge of homeland security, Janet Napolitano.

Then…

UNIDENTIFIED MALE: The patient protection and affordable care act is passed.

TAPPER: Finish line.

PRESIDENT BARACK OBAMA: Let's make 2010 the year we finally reform health care.

TAPPER: What hurdles remain for Democrats to arrive at a final health care bill? Can Republicans still stop it? Those questions for our headliners, the president press secretary, Robert Gibbs, and the top Republican leader in the Senate, Mitch McConnell, only on THIS WEEK.

Plus, more debate and analysis and predictions for 2010 with our "Roundtable.": Nobel Prize-winning economist Paul Krugman; former Bush strategist Matthew Dowd; David Brooks of The New York Times; and Ruth Marcus from The Washington Post.

And as always, "The Sunday Funnies."

JAY LENO, HOST, "THE JAY LENO SHOW": Meteorologists are calling this a record blizzard, which makes sense if you think about it. I mean, Republicans always said the Senate would pass health care when hell freezes over. And apparently…

(LAUGHTER)

LENO: Apparently it has.

ANNOUNCER: From the heart of the nation's capital, THIS WEEK WITH GEORGE STEPHANOPOULOS, live from the Newseum on Pennsylvania Avenue, filling in this morning, ABC News senior White House correspondent Jake Tapper.

(END VIDEOTAPE)

TAPPER: Good morning.

We're learning more about the 23-year-old Nigerian man the U.S. government has charged with trying to blow up that Northwest Airlines flight on Christmas Day. He told investigators that the explosive material had been sown into his underwear and his name was known to U.S. officials but it never made it onto a no-fly list. Now air travelers will face stepped-up security measures

Joining us this morning from San Francisco, Homeland Security Secretary Janet Napolitano.

Madam Secretary, thanks for joining us.

JANET NAPOLITANO, SECRETARY OF HOMELAND SECURITY: Good morning.

TAPPER: I want to get your reaction to a comment from the chairman of the Senate Homeland Security Committee, Joe Lieberman of Connecticut, who said in a statement: "I am troubled by several aspects of this case, including how the suspect escaped the attention of the State Department and law enforcers when his father apparently reported concerns about his son's extremist behavior to the U.S. embassy in Lagos, how the suspect managed to retain a U.S. visa after such complaints, and why he was not recognized as someone who reportedly was named in the terrorist database."

Madam Secretary, how do you answer Senator Lieberman's questions?

NAPOLITANO: Well, I think, first of all, we are investigating, as always, going backwards to see what happened and when, who knew what and when. But here -- I think it's important for the public to know, there are different types of databases.

And there were simply, throughout the law enforcement community, never information that would put this individual on a no-fly list or a selectee list. So that's number one.

Number two, I think the important thing to recognize here is that once this incident occurred, everything happened that should have. The passengers reacted correctly, the crew reacted correctly, within an hour to 90 minutes, all 128 flights in the air had been notified. And those flights already had taken mitigation measures on the off-chance that there was somebody else also flying with some sort of destructive intent.

So the system has worked really very, very smoothly over the course of the past several days.

TAPPER: Well, let me ask you a question about intelligence-sharing. When the suspect's father went to the U.S. embassy in Nigeria and said, I'm worried because my son is displaying extremist religious views, how was that information shared with other parts of the U.S. government, or did it just stay at that U.S. embassy?

NAPOLITANO: Well, again, we are going to go back and really do a minute-by-minute, day-by-day scrub of that sort of thing. But when he presented himself to fly, he was on a tide (ph) list. What a tide list simply says is, his name had come up somewhere somehow.

But the no-fly and selectee list require that there be specific, what we call, derogatory information. And that was not available throughout the law enforcement community. He went through screening in Amsterdam as he prepared to board a flight to the United States.

The authorities in Amsterdam are working with us to make sure that screening was properly done. We have no suggestion that it wasn't, but we're actually going through -- going backwards, tracing his route.

But I think important for the traveling public recognize that A, everybody reacted as they should. We trained for this. We planned for this. We exercised for this sort of event should it occur.

And B, we have instituted additional screening in what we call mitigation measures that will be continuing for a while. And so we ask people perhaps to show up a little bit earlier at the airport during this heavy holiday season, and to recognize we're going to be doing different things at different airports.

So don't think somebody at TSA is not on the job if they're not doing exactly at one airport what you saw at another. There will be different things done in different places.

TAPPER: But, Secretary Napolitano, you keep saying everybody acted the way they were supposed to. Clearly the passengers and the crew of that Northwest Airlines flight did. But I think there are questions about whether everybody in the U.S. government did.

And here's a question for you, how many of -- so many of us are subject to random security searches all the time, how come somebody who is not on a terrorist database isn't subject to more stringent security when they check in to a flight to the U.S.? Why does that automatically just happen?

NAPOLITANO: Well, if he had had specific information that would have put him on the selectee list or indeed on the no-fly list, he would not have actually gotten on a plane.

But those numbers pyramid down. And they need to, because again, there is lots of information that flies about this world on a lot of different people. And what we have to do in law enforcement is not only collect and share, but do it in the proper way.

Now once this incident occurred, everything went according to clockwork. Not only sharing throughout the air industry, but also sharing with state and local law enforcement, products were going out on Christmas Day, they went out yesterday, and also to the industry to make sure that the traveling public remains safe. .

And I would leave you with that message, the traveling public is safe. We have instituted some additional screening and security measures in light of this incident. But again, everybody reacted as they should, the system -- once the incident occurred, the system worked.

TAPPER: What can you tell us about the suspect? Has a definitive connection with Al Qaida been established yet?

NAPOLITANO: That is now the subject of investigation. And it would be inappropriate for me to say and inappropriate to speculate. So we'll let the FBI and the criminal justice system now do their work.

TAPPER: OK. One final question for you, Madam Secretary: An October report from the Government Accountability Office says that almost $800 million has been spent on new screening technologies by the Transportation Security Administration since 2002, but, quote, "since TSA's creation, 10 passenger screening technologies have been in various phases of research, development, test and evaluation, procurement and deployment, but TSA had not deployed any of these technologies to airports nationwide."

More than eight years after 9/11, an incident obviously involving airplanes, why have these technologies not been deployed to airports nationwide?

NAPOLITANO: Well, without going into the accuracy or inaccuracy of that particular report, new technology has been deployed, but there is a more important point to be made, which is that, A, technology is evolving all the time, it's not a static situation.

And B, even with the most sophisticated technology, everybody needs to play a part in their security. That's why I think the actions of the passengers and the crew on this flight deserve praise. That's why the men and women who have been working really overtime Christmas Day, yesterday, whatever, to make sure that all other flights remain safe, why that system is so important.

You just -- you can't rely on just one part of your security system, you have to look at the system as a whole.

TAPPER: All right. Madam Secretary, thanks so much for joining us.

NAPOLITANO: Thank you.

TAPPER: And now we'll turn to the president's chief spokesman and close adviser, Robert Gibbs.

Merry Christmas, and thanks for joining us.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Happy holidays. Good morning, Jake.

TAPPER: The terrorist attack almost happened, had it not been for a faulty detonator. Are you confident that the Obama administration is doing everything it needs to do and did so in this instance to keep the American people safe?

GIBBS: Absolutely, Jake. Let's touch on a few things that the secretary just touched on. The database that this individual was on contains about 550,000 names, OK? A smaller database of about 400,000 of those names are what selectee and no-fly lists are drawn from.

The selectee list has about 14,000, the no-fly list 4,000. So you can see the database that many government agencies and are concerned into is whittled down into much smaller no-fly and selectee lists.

What the president has asked for as a result of this incident are two look-back reviews. First, on our watch-listing procedures, did the government do everything that it could have with the information that they had? Understanding these procedures are several years old. Did we do what we needed to with that information, and how can we revise watch listing procedures going forward to ensure that there is no clog in the bureaucratic plumbing of information that might be gathered somewhere going to the very highest levels of security in our government.

Second, obviously we have to review our detection capabilities. The president has asked the Department of Homeland Security to, quite frankly, answer the very real question about how somebody with something as dangerous as PETN could have gotten onto a plane in Amsterdam. I think those are the two things that -- two reviews that have come directly out of this.

But Jake, the president is very confident that this government is taking the steps that are necessary to take -- to take our fight to those that seek to do us harm. And I'll go through a few things that he's done. First, we're drawing down in Iraq, and focusing our resources on Afghanistan and Pakistan, the places in the world where attacks have previously been planned, and where this planning goes on now. We've strengthened our partnerships and cooperation with a number of countries, including Yemen, Somalia and Pakistan, as I mentioned before, and used all elements of our American power to seek to eliminate heads of Al Qaida, and we've had great success in all three of those countries.

TAPPER: Let me ask you a question. Knowing the president -- I've been covering him for a few years -- I can't imagine that he would hear this guy's father reported to the U.S. embassy that he has extremist religious views, and within a matter of weeks, he boards an airplane with explosives on his person and is not subject to additional security. I can't believe that he would not hear that information and say, "that's nuts." Why did that happen?

GIBBS: Jake, he's heard that information and heard it not long after it was brought to the situation room. That's what has precipitated both a watch listing review and a detection capabilities review, to ensure that one, the information that we have goes through the process the right way and surfaces to those that have to make those decisions. Again, we have a watch list that this individual was on, that contains about 50 -- 550,000 names. So this individual was listed in November of 2009 on that database based on that information. The no-fly list and the selectee list...

(CROSSTALK)

TAPPER: But who's watching him? If he's on that watch list, who's watching him?

GIBBS: Well, again, Jake, I think if you read the papers this morning, you'll find that the name was listed, concern was brought, but the ability...

TAPPER: Brought to who? Anybody can just write down a name. I mean...

GIBBS: No, no, this is a database that a series of agencies enter names into, and a series of agencies draw information from. But again, Jake, the investigation will look backwards and figure out if any signs were missed, if any procedures can be changed about how names are watch-listed. But again, understand there are 18,000 people on either a selectee or a no-fly list. This is a database that contains -- I'm sorry, 550,000 of those names. It's a huge number. We have to ensure and the president has asked that a review be undertaken swiftly to ensure that any information that's gathered and put into any database, that it gets to where it needs to go, to the people that are making decisions.

But again, Jake, understanding, 550,000 are on that one database. The president wants to review some of these older procedures and see if, quite frankly, they are outdated...

TAPPER: They need to be updated.

GIBBS: ... (inaudible) what we're facing today.

TAPPER: I want to (inaudible), just because I want to get to health care reform with the limited time we have left.

GIBBS: Sure.

TAPPER: There was some deal-making that went on as the legislation hit the House and hit the Senate, especially. And that kind of deal-making is one of the reasons that President Obama, then Senator Obama, pledged this on the campaign trail.

(BEGIN VIDEO CLIP)

OBAMA: Well, have the negotiations televised on C-SPAN, so the people can see who is making arguments on behalf of their constituents and who is making arguments on behalf of the drug companies or the insurance companies.

(END VIDEO CLIP)

TAPPER: Now, PolitiFact labeled that a broken promise. I'm not -- I am a little bit more generous this Christmas spirit. You still have one more step in the negotiation process, and in fact President Obama said this to PBS about this final reconciliation between the House bill and the Senate bill.

(BEGIN VIDEO CLIP)

OBAMA: There needs to be some more work before we get to the point where we're not changing the status quo, and that's the goal.

(END VIDEO CLIP)

TAPPER: In any case, it's sound of President Obama saying, we hope to have a whole bunch of folks over here in the West Wing, I'll be rolling up my sleeves and spending some time before the full Congress even gets into session, because the American people need it now. So with that in mind, will the president open up the doors for this final negotiation? He's in charge of it. It's going to be taking place at the West Wing. You have Democratic leaders from the House and Senate reconciling this House and Senate bill. Will he commit to opening up that process to C-SPAN cameras so we can see how this happens?

GIBBS: Well, Jake, first of all, let's take a step back and understand that this is a process legislatively that has played out over the course of nine months. There have been a countless number of public hearings. The Senate did a lot of their voting at 1:00 and 2:00 in the morning on C-SPAN. A lot of this debate -- I think what the president promised and pledged was so that you could see who was fighting for their constituents and who was fighting for drug and insurance companies...

TAPPER: But he was talking about negotiations, not voting.

GIBBS: Well...

TAPPER: The bill being put together.

GIBBS: Well, but the bill gets put together on the floor of the Senate. That's where the bill got augmented. And I think if you watched that debate -- I don't know -- I wasn't up at 1:00 or 2:00 in the morning for a lot of those votes, but I think if the American public had watched -- has watched the committee process play out in both the House and the Senate, watched the process play out on both the floor and the -- the floor of the House and the floor of the Senate, you'd have seen quite a bit of public hearing and public airing, and I think quite frankly, people have a pretty good sense of who is battling on behalf of thousands of lobbyists that are trying to protect drugs profits and insurance profits, and who's fighting on behalf of middle-class Americans hoping once and for all to have access to affordable insurance and removing insurance company restrictions like discriminating against people that are sick.

TAPPER: All right, Robert Gibbs, we'll have to leave it there. Thanks so much for joining us. Happy holidays and good luck.

GIBBS: Happy holidays and to you, your family and to all your viewers, happy new year.

TAPPER: Thank you.

TAPPER: Senator McConnell, thanks so much for joining us.

MCCONNELL: Good morning, Jake.

TAPPER: Well, turning back to the terror attack or the attempted terror attack, the Obama administration was following procedures established by the Bush administration in creation -- in the creation of the TSA. Are they doing enough? Does more need to be done?

MCCONNELL: Well, our leader on this issue, Senator Susan Collins of Maine, suggested to me yesterday, when we were talking about this, a question she's going to be asking, which is, how does a person on the terrorism watch list get a U.S. visa? I mean, particularly when you consider that his father was concerned about his son's proclivities this fall?

I think there's much to investigate here. And in addition to that, he obviously had some kind of connections with Yemen. And we know there was an imam in Yemen who may have been the inspiration for the Ft. Hood attack. There is much to investigate here. It's amazing to me that an individual like this, who was sending out so many signals, could end up getting on a plane going to the U.S.

TAPPER: Do you think individuals who are on either of the two terrorism databases that Robert Gibbs referred to, do you think that they should automatically be at the very least subjected to additional security searches at airports?

MCCONNELL: It only makes common sense.

TAPPER: All right. Well, turning to health care reform, which is another big issue on the plate of the administration and of course on your plate as well. You've been criticized by several conservative voices, Rush Limbaugh, Erick Erickson at Redstate.com and others, for not doing enough to stop health care reform. As the Senate Democrats passed the bill, you said this fight is not over, my colleges and I will work to stop this bill from becoming law. So what are you going to do and what can you do with only 40 votes?

MCCONNELL: Well, first, every single Republican opposed the measure. All of the procedural devices that are available to slow down a measure were employed. It didn't pass until Christmas eve at 7:00 a.m. The American people are overwhelmingly opposed to the bill. I'm not sure what's to criticize about that from a conservative point of view. And of course, the bill is not law yet. It's still got be reconciled between the House and Senate. There are deep differences among Democrats. Every single Democrat in the Senate provided the one vote that passed this 2,700-page monstrosity. It cuts Medicare by half a trillion dollars, raises taxes by half a trillion dollars, and instead of curbing the rate of increase of insurance premiums, most Americans' insurance premiums are going to go up.

This bill is a colossal failure, and that's why the American people were literally screaming at us, you know, please, don't pass this bill.

TAPPER: You criticize this bill for cutting Medicare. And there are Medicare cuts in this. Medicare Advantage is cut. Doctors' fees are cut 21 percent next year. But you have a history also of voting for Medicare cuts as well. In a 1995 deficit reduction plan, you voted to cut Medicare by $270 billion. In a 1996 budget resolution, you voted to cut it $158 billion, and in the 1997 Balanced Budget Act, you voted to slow its growth by $393 billion. How do you square those votes from when Senate Republicans ran the Senate, with your current criticism of the bill for cutting Medicare?

MCCONNELL: Easily. Those reductions were related to making the Medicare program itself, which is going broke in seven years, more sustainable. What they're doing here is using Medicare as a piggy bank. They're taking half a trillion dollars out of Medicare, not to save Medicare or to make it more sustainable, but to spend it on a new entitlement program for a whole different set of Americans. So we don't think you ought to take grandma's Medicare and start a new program for someone else.

TAPPER: Do you think that Republicans running for Senate in 2010 should run on a platform of vowing to repeal the health care reform bill, should it become law? And will that be one of your first items should you regain control of the Senate, repealing what you guys call Obama-care?

MCCONNELL: Well, certainly, politically, it's a big problem for them. They all kind of joined hands and went off the cliff together. Every single Democrat provided the vote that passed it in the Senate. You have seen what's happened already with Congressman Parker Griffith in Alabama switching parties. There are rumors there may be others. There is great unrest in the Democratic Party. And the reason for that is, the surveys indicate the American people are overwhelmingly opposed to this effort to have the government take over all of their health care. It will be a huge political issue next year, and that's why you hear the Democrats saying, let's don't tackle any more big issues. I mean, I was reading an article this morning indicating they don't want to do cap-and-trade anymore, they're nervous about financial reregulation. What they understand is the new administration and the new Congress has squandered its goodwill with the American people, leading to what could be a big setback for them a year from now.

TAPPER: Respectfully, sir, you didn't answer my question, which is should Republicans campaign on a platform of repealing the health care reform measure? And will that be one of the first items on your agenda should you become the new Senate majority leader after the 2010 elections?

MCCONNELL: Well, I'm sorry, I thought I did answer your question. There's no question that this bill, if it were to become law, and frankly even if it doesn't become law, will be a big, if not central issue not only in the 2010 election, but in the 2012 election.

TAPPER: All right, I'll take that as a yes, that they should campaign on repealing Obama care.

You cut a deal with Harry Reid to secure a vote on the debt limit issue for the first week that Congress returns, a stand-alone vote on the debt limit plus five Republican amendments. Why was that important to you?

MCCONNELL: Well, look, this administration has run up more debt in its first year than the previous one in four years. They passed a budget that will double the debt in five years, triple it in 10. Raising the debt ceiling is no longer an automatic. This is the nation's credit card we are talking about, and so we think it's important to have a debate with amendments about what we intend to try to accomplish for the American people to get this debt down. Americans are afraid that their children are no longer going to have the kind of country they have had because of this burgeoning national debt. And raising the debt ceiling is a good time to have that debate.

TAPPER: The Congressional Budget Office says that the health care reform bill will actually reduce the deficit by $132 billion. But there's also this criticism from Bruce Bartlett, an official in the administrations of Ronald Reagan and George H.W. Bush, who wrote in a "Forbes" magazine article, titled "Republican Deficit Hypocrisy," that the 2003 Medicare prescription drug benefit offered by the Republican Senate was, a quote, "pure giveaway," that quote, "had no dedicated financing, no offsets, no revenue raisers. 100 percent of the cost simply added to the federal budget deficit." Quote, "As far as I'm concerned, any Republican who voted for the Medicare drug benefit has no right to criticize anything the Democrats have done in terms of adding to the national debt."

Senator, you voted for that Medicare prescription drug benefit, which some say will cost $1 trillion over 10 years and was not offset by revenue or spending cuts.

MCCONNELL: Well, the first thing, you should notice that it came in 30 percent underbudget because of the competitive mechanisms that are involving in extending a prescription drug benefit to seniors. The Democrats criticized it at the time because it was not generous enough. And look, they have gone far beyond any deficit spending discretions -- indiscretions that Republicans might have had. In their first year alone, they ran the deficit up more than the last four years of the Bush administration combined.

Enough is enough. The American people are expecting us to stop this effort to spend, tax, and borrow us into oblivion, which has been going on for the last 12 months.

TAPPER: All right, Senator Mitch McConnell, have a good holiday. Thanks so much for joining us.

MCCONNELL: Same to you, Jake.

TAPPER: The roundtable is next with David Brooks, Ruth Marcus, Matthew Dowd, and Paul Krugman. And later, the "Sunday Funnies."

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

SEN. CHRISTOPHER S. BOND, R-MO.: 'Twas the week before Christmas, when all through the Hill, not a creature was stirring, not even a bill.

SEN. ROLAND BURRIS, D-ILL.: People had voted; they mandated reform, but Republicans blew off the gathering storm.

BOND: How far away from common sense we've been led. Our kids and grandkids have their futures to dread.

BURRIS: Democrats explained, as they drove out of sight, better coverage for all, even our friends on the right.

TAPPER: Ah, the Christmas stylings of Senators Kit Bond and Roland Burris. And joining us now to talk about health care reform, which their poems were about, and also other issues, are David Brooks and Matt Dowd, Paul Krugman and Ruth Marcus.

Thank you so much for joining us.

We're going to start with, obviously, the alarming Christmas attack that almost happened. David, you heard Secretary Napolitano and Robert Gibbs give their answers about why this guy was allowed on the plane.

Did it -- pardon the pun. Did it fly with you?

(LAUGHTER)

BROOKS: Yes, I actually don't think it passed the laugh test with me.

Listen, we all go through the airport. We all go through the TSA screening procedures. And at least I and I think a lot of people have the sense that it's a jobs program, not a security program, that it's all a joke; people can sneak stuff through.

And that, sort of, reconfirms that. It was the passengers, not the official program that does this.

And the second thing is, the guy was actually fitting every single stereotype of a terrorist you could possibly imagine. He was a rich guy; he went to fancy schools; he was a mechanic; he gets radicalized; and then he's on the watch list. So it's like a perfect bit of stereotypical profiling would catch this guy, and even in this case, they couldn't seem to do it.

TAPPER: Matt, when -- when Richard Reid, the shoe bomber, did the same thing, or failed in his attempt to blow up a plane, President Bush -- then-President Bush did not come out, did not say anything to the nation. President Obama followed that playbook. Is that the right thing?

DOWD: Well, yes, part of the problem here is that all the facts that you think are true at the beginning turn out not to be true as the days go on. Some of that stuff we've learned in the process of this, as, actually, we're learning some of the things we first heard, we didn't catch.

But how are -- the real question is, it's, what are we doing -- what are we spending the billions of dollars on, as David says, that are really doing the job?

Is it a jobs program or is it a government employee program or is it a terrorist-catching program? And I think that's the question.

MARCUS: And I think one of the really -- there's two really alarming things that happened here. The first was, this suspect's father went to the U.S. authorities and said, you may have a problem here. He's not a U.S. citizen. He's a Nigerian national. He's got a multiple-entry visa to the United States. He has no entitlement to that. Why wasn't he -- why wasn't that visa yanked? Why wasn't he, at the very least, moved to the top of a real watch list, not the 550,000.

I don't think that this is the Obama administration's fault. This is the way that bureaucracies work or don't work.

And, then, second, as David said, the screening processes -- clearly, though we've spent billions and billions of dollars, there's simply not enough equipment to find the things that need to be found.

KRUGMAN: I think we do want -- I mean, someone's head ought to roll over this. Something needs to be looked at. But if you read your military history, every major military surprise that ever happened, there were ample warnings. You go back to the record; you find out there was information.

The trouble is, there is so much information. You know, there's 500,000 people on this list we're talking about. Stuff is going to fall through the cracks. Ultimately, you do what you can, but someone who is prepared to die while killing a bunch of civilians, that's going to happen now and then. In fact, we're quite lucky it didn't happen now.

But, you know, I think -- I think we are using a lot of 20/20 hindsight. What was the kind of thing that always happens whenever anything goes wrong.

(CROSSTALK)

DOWD: Well, to me, OK, so the situation now is, what do we do in the aftermath of this?

So what it looks like we usually do is we profile an article of clothing, not the person.

(LAUGHTER)

And so we're reluctant, because of politically correctness, to profile a person, but the shoe bomber happens and now we all have to put our shoes on the conveyer belt for it to go through, and we're not going to profile a person.

This guy's underwear is on fire...

(LAUGHTER)

I'm afraid what we next have to profile...

(CROSSTALK)

(UNKNOWN): Everyone's going to have to wear their underwear on the outside.

(LAUGHTER)

(CROSSTALK)

BROOKS: They're talking about -- TSA's now talking about new rules for international flights. For the last hour, you can't have any personal items in your lap. You can't get up for the last hour of a flight on international flights. So this is going to affect us in the same way.

But, you know, one of the other interesting things about this, Ruth, is that this man, apparently, according to the information we have now, and it's early. You point out a lot of the early information turns out to be wrong.

But, apparently, he spent time in Yemen and was trained by Al Qaida in the Arabian peninsula, which -- and this is an increasing -- I don't want to say that this is necessarily a new front in the war on terror, but this is coming up over and over. There was a U.S. Yemen air strike on Thursday morning.

MARCUS: I think you could say it's a new front in the war on terror. It's not particularly surprising. And it doesn't mean that Afghanistan isn't a concern and the areas in Pakistan aren't a concern. But it does underscore the new reality that terror is -- you know, it's a, sort of, floating crap game. And you can move to it different locations. And if you have a failed or failing state, as Yemen is, as Somalia is, things can -- those are breeding grounds and areas where Al Qaida in the Arabian peninsula is flourishing.

BROOKS: Let's not materialize it. It's an ideological thing. I mean, this guy, as I said, fit the classic profile. He's rich. He's trapped between two worlds, the traditional world of his imagined past and the modern world of being a mechanical engineer.

And this is just like the 9/11 guys, sort of, like the Fort Hood guy. And so they're trapped between these two worlds, and they imagine some pure Islamic ideology of the past which they're going to act out by killing people. And it's the ideology that matters, and it can happen to somebody living in London or Hamburg or anywhere else around the world, and then they find Yemen.

TAPPER: There are reports -- and again, early reports -- reports that he may have been radicalized in London, where he went to school.

But I want to turn now to another big issue, which is health care reform, which I know has been consuming a lot of your attention.

Specifically, Paul, you wrote a recent op-ed saying -- in favor of the Senate health care reform measure. And you said those who oppose it fall into three groups. These are your characterizations, not mine.

One would be the crazy right. Two would be unhappy progressives who wanted more. And three would be what you called the "Bah, Humbug" caucus, fiscal scolds.

Now, I don't want to point fingers, but...

(LAUGHTER)

... one of your fellow colleagues in the New York Times op-ed page, is opposing the health care reform measure.

KRUGMAN: Right.

TAPPER: I'm assuming you don't think David is a member of the crazy right?

(LAUGHTER)

BROOKS: Let's not jump to conclusions.

(LAUGHTER)

(CROSSTALK)

MARCUS: ... disappointed progressive.

KRUGMAN: Let me say this. The objection, supposedly, is it doesn't do enough control costs. And you have to ask, you know, what more, realistically, could you expect?

I know David (inaudible) in one article of his. There was a later one, a recent one, which said, look, they are in fact trying everything that people have suggested, in the form of pilot programs. There's a whole list of things that we think might control costs. This is going to be in the legislation. It's something that's going to be tried.

This is the first serious attempt we've made to control health care costs. And by doing that, it actually proves something to people like me, advocates of universal coverage have been saying, which is that the only way to control costs is as part of a package that also covers the uninsured, that you're not going to be able to just go and say to people, OK, we're going to take away some of your health care. You're going to have to go to them and say, this is is what we need to do in order to provide health security to everybody.

And this is a -- this is landmark piece of legislation, flawed, annoying, underfunded. Lots of things are wrong with it. I wish there was a public option. I wish there were lots of things in there. But this is the most dramatic move toward getting rational about health care spending, at the same time that it finally fills at least a good part of the hole in our system, the holes in our safety net.

So, you know...

(CROSSTALK)

BROOKS: I don't oppose it because I want to step on the necks of the poor, as you could say. I oppose it, and it's a close call for me. Because we used to spend 10 percent of our GNP on health care; now it's 17 percent. Soon it will be 20 percent, 22 percent -- more on health care, less on education, less on infrastructure, less on investment, less on everything else.

This bill will do absolutely nothing. It will slightly increase the amount of money we spend on health care. So what could you do politically to do something about that? Well, I wouldn't mind a single-payer. Frankly, I'd prefer a single-payer to what we have now, because that actually would control costs.

My preferred option, though, would be to give consumers choice. There are health economists, (inaudible). There was a bill, called the Wyden-Bennett bill. And people said, oh, it's politically impossible.

Well, this bill, right now -- in the NBC/Wall Street Journal poll, has 32 percent support. I think I could get 32 percent support for some consumer-related bill that would...

(CROSSTALK)

KRUGMAN: I think this is actually important. A fair number of the people who say they don't support it wanted something stronger, wanted something more aggressive. So it doesn't break down that way.

And if you ask people about specific provisions, by and large, they get public support. I know the example of Massachusetts. This is, kind of, a Massachusetts-type program for the United States, better than a Massachusetts program, but along those lines.

If you ask people, do you approve of -- now that they have it in Massachusetts -- do you approve of it, it's not very favorable. If you ask people, do you want to get rid of it or do you want to maintain it and perhaps extend it, overwhelming support, 79 percent of the Massachusetts public wants the program to continue.

I think that's the way this is going to work. This bill is going to be -- people will complain. They'll say, oh, this isn't what I want; this isn't good. You'll ask, do you want to go back on it, and overwhelmingly, they'll say no.

TAPPER: And you think -- you think -- you would go farther. I couldn't really get Senator McConnell to say that Republicans should campaign on repealing Obama care as they call it. But you think they should campaign?

DOWD: I think if this bill passes, it's the best thing for the Republican Party in the short run if this bill passes. I think there's no question about the polling on this as consistent. The majority of the country is opposed to it. The majority of the country thinks their health care, their own health care costs will go up. The majority of the country thinks the overall cost of the systems will go up. And the majority thinks their care will get worse.

Now we can argue in Washington or whatever at the Capitol and say we know better than the public does on this or we know what they should get, but the country is decided on this. The country is overwhelmingly decided on this. And Congress has proceeded to go against what the public wants and pass a bill. And whether it is good in parts, bad in parts, whatever it happens to be, the country doesn't want it. And if it passes in January and they don't sell it, which I don't think they're going to do, because they have to figure out it's negative in its entirety, they're going to go on to jobs but it's going to be an albatross on almost every Democrat in a swing district in the country.

TAPPER: I want to come to you in a second, but in fact one of the members of Congress speaking against the health care bill is a former freshman Democrat from Alabama now freshman Republican from Alabama, Parker Griffith. This is what the National Republican Campaign Committee was saying about Parker Griffith last year in a TV ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: 2000, the USS Cole was attacked. 2001, terrorists attack America. 2008, the Marriott in Pakistan is bombed but Parker Griffith says we have nothing to fear from radical Islam.

PARKER GRIFFITH: I think America's greatest enemy is America and its materialism. We have nothing to fear from radical Islam.

UNIDENTIFIED MALE: Parker Griffith, wrong for Alabama.

(END VIDEO CLIP)

TAPPER: Now, of course, the Republicans say Parker Griffith is right for Alabama. But there are those who think that this is something of a canary in a coal mine, Parker Griffith's defection. Among them, the former commerce secretary William Daley who said in an op/ed in the "Washington Post," "While it may be too late to avoid some losses in 2010, it is not too late to avoid the kind of rout that redraws the political map. The leaders of the Democratic Party need to move back toward the center."

Is Daley right? Do the leaders of Democrat Party need to move more toward to the center?

MARCUS: I thought he overstated the case and I think Parker Griffith is going to turn out to be a pretty lonely canary in that coal mine.

There's no indication from talking to the people who would know that any other potentially squishy Democrats are thinking about morphing themselves into Republicans. And I think that to get back to Matt's point about the potential albatross of the health care bill, absolutely they're going to pivot to jobs, jobs, jobs. Absolutely if they don't start to also simultaneously sell this health care bill. We're all talking about it as if it's a fait accompli but it will be eventually, I think, Senator McConnell's desire not withstanding.

If they don't find a way to also sell it as a positive transformation, it is going to be an albatross.

TAPPER: How do they do that?

MARCUS: By talking to people. Well, it's both doable and complicated. The complicated part is that many of the things that it will achieve will not start until 2013 or 2014. So it's a little hard to say to people, life is going to be great two elections from now if you don't have health care or if you're nervous about your health care. But there's going to be a lot of talk about the immediate deliverables, which is one of the terms that the administration uses.

So for example, senior citizens -- senior citizens, who are A, nervous about what's happening to their Medicare, witness grandma, will have their donut hole filled or somewhat filled very quickly. And people will be able to keep their kids on their insurance policies after they're out of college until age 26 or 27. So there's going to be some focus on that. It is hard to talk about legislation that is promising something in the future as and inevitably they will, as people's health premiums continue to go up.

TAPPER: Can the Democrats sell this?

KRUGMAN: Some. I mean, I'm waiting for the first poll that asks do you want to repeal this which is very different from whether you approve of it. And I bet you're not going to find anything like those numbers.

Let me also say about Parker Griffith. As I've looked at it, I think the correct description of him is he's a living fossil. He's sort of the last Dixiecrat. All of those conservative Democrats in the South are now Republicans and here's this one guy whose left over. It isn't necessarily an omen of very much.

I don't think health care is going to be a big sell for the Democrats. It's something they have to do. To go through -- this was something that was a core issue during the campaign. It's a core promise to the base, even if part of the base is temporarily at least really riled up as to what they wanted.

So it was something they had to check off. It's a little bit in a way like the Medicare drug benefit back in 2003 which didn't phase in for a long time. It was something that Bush had to do in order to just shore up that front.

So I don't think the campaign will be about health care. I think it is going to be about jobs, the economy, and just do you want those guys back in?

BROOKS: When FDR did the New Deal, 70 and 80 percent of the American people basically had a good view of the government. Now, like 15 or 20 percent of the American people have a good view of government. So if you have a whole series of things that look like big government and a lot of spending, they're going to take it out on you. And I don't know if more people will switch, but 20 House members, House Democrats are going to lose in all those states, North Carolina. They're just going to get wiped out. Harry Reid might get wiped out. People will get wiped out across the country.

TAPPER: I was just going to say, this is an end of the year show. So it's a good time for predictions. And you've just offered yours. Charlie Cook, the respected political prognosticator predicted that Republicans will pick up 20 to 30 seats in the House, and four to six in the Senate. You said 20 in the House, how many in the Senate?

BROOKS: I'm with Charlie. Twenty or 30 at least. And look at states like Illinois which is a Democratic state, got a very moderate, very impressive candidate, Mark Kirk has a chance to win there. You'll see some unexpected places. I think assuming things don't change, the Republicans will do pretty well and they'll repeal half of health care, only the painful half.

DOWD: Well, I agree with that. I think they're going to probably pick up 25 seats in the House and they're probably going to pick up five seats in the Senate.

TAPPER: Still not enough to control.

DOWD: No, but I think one prediction I have in the aftermath, of that, which I think will happen, the Republicans will misread the mandate. The Republicans will think it was because of something they said or they did as opposed to the Democrats went off tangent and wasn't in line with the American public and the Republicans will do something, which actually in my view, could be a benefit for Barack Obama going into 2012 if he has to deal with a more Republican Congress and then he can pivot against what the Republicans are doing.

KRUGMAN: Can I just say, mega dittos to that?

TAPPER: Prediction for election 2012?

MARCUS: So my prediction is slightly rosier. Let's remember ...

TAPPER: Rosier for Democrats?

MARCUS: Rosier, slightly rosier for Democrats. And let's remember the president's party always -- almost inevitably loses seats in the mid-year election. And I think the answer to the question depends on what Paul can tell us about where the economy is -- particularly where the unemployment rate is going to be in next spring heading into the fall because that will really determine how people feel about the incumbent party.

I say some in the House, somewhere in the 20s, anything under 20 will be viewed by Democrats as a huge sigh of relief for them. In the Senate, I think it's a little bit more complicated. There are more Republican senators retiring than Democrats and in more divided swingy type states. And so I would say closer to three.

TAPPER: OK, we are getting close to short on time but I do want to ask you a question about the economy for 2010. Your fellow laureate, Joseph Stiglitz has said there's a significant chance the U.S. economy will contract in the second half of 2010. He's calling on the government to prepare a second stimulus. Do you think that's possible?

KRUGMAN: Yes, it's a reasonably high chance. I don't think it's more -- it's less than 50/50 odds, but you know, what we've got right now is a recovery that first of all is not showing up very much in jobs yet. It's being driven by fiscal stimulus which is going to fade out in the second half of next year and by inventory bounce. You know, production was low because companies were running on their inventories. They're stopping doing that so now you've got a bounce in the economy.

But that's also going to run out. So the things we know about are all going to be negative in the second half of next year. Now the financial markets, the last month, the financial markets have gotten really optimistic. You look at things like the term spread on bond rates. They suggest that the financial markets really think there is going to be a much more vigorous recovery. I don't see where it's supposed to come from, so the range is huge here. I would basically go with Joe Stiglitz. I'm really worried about the second half.

TAPPER: OK, I'm going to have to wrap there. The Roundtable continues in the green room on ABCNews.com. You can get political updates all week long by signing up for our newsletter, also on abc.com. Coming up here, "The Sunday Funnies."

END

TAPPER: And you think -- you think -- you would go farther. I couldn't really get Senator McConnell to say that Republicans should campaign on repealing Obama care as they call it. But you think they should campaign?

DOWD: I think if this bill passes, it's the best thing for the Republican Party in the short run if this bill passes. I think there's no question about the polling on this as consistent. The majority of the country is opposed to it. The majority of the country thinks their health care, their own health care costs will go up. The majority of the country thinks the overall cost of the systems will go up. And the majority thinks their care will get worse.

Now we can argue in Washington or whatever at the Capitol and say we know better than the public does on this or we know what they should get, but the country is decided on this. The country is overwhelmingly decided on this. And Congress has proceeded to go against what the public wants and pass a bill. And whether it is good in parts, bad in parts, whatever it happens to be, the country doesn't want it. And if it passes in January and they don't sell it, which I don't think they're going to do, because they have to figure out it's negative in its entirety, they're going to go on to jobs but it's going to be an albatross on almost every Democrat in a swing district in the country.

TAPPER: I want to come to you in a second, but in fact one of the members of Congress speaking against the health care bill is a former freshman Democrat from Alabama now freshman Republican from Alabama, Parker Griffith. This is what the National Republican Campaign Committee was saying about Parker Griffith last year in a TV ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: 2000, the USS Cole was attacked. 2001, terrorists attack America. 2008, the Marriott in Pakistan is bombed but Parker Griffith says we have nothing to fear from radical Islam.

PARKER GRIFFITH: I think America's greatest enemy is America and its materialism. We have nothing to fear from radical Islam.

UNIDENTIFIED MALE: Parker Griffith, wrong for Alabama.

(END VIDEO CLIP)

TAPPER: Now, of course, the Republicans say Parker Griffith is right for Alabama. But there are those who think that this is something of a canary in a coal mine, Parker Griffith's defection. Among them, the former commerce secretary William Daley who said in an op/ed in the "Washington Post," "While it may be too late to avoid some losses in 2010, it is not too late to avoid the kind of rout that redraws the political map. The leaders of the Democratic Party need to move back toward the center."

Is Daley right? Do the leaders of Democrat Party need to move more toward to the center?

MARCUS: I thought he overstated the case and I think Parker Griffith is going to turn out to be a pretty lonely canary in that coal mine.

There's no indication from talking to the people who would know that any other potentially squishy Democrats are thinking about morphing themselves into Republicans. And I think that to get back to Matt's point about the potential albatross of the health care bill, absolutely they're going to pivot to jobs, jobs, jobs. Absolutely if they don't start to also simultaneously sell this health care bill. We're all talking about it as if it's a fait accompli but it will be eventually, I think, Senator McConnell's desire not withstanding.

If they don't find a way to also sell it as a positive transformation, it is going to be an albatross.

TAPPER: How do they do that?

MARCUS: By talking to people. Well, it's both doable and complicated. The complicated part is that many of the things that it will achieve will not start until 2013 or 2014. So it's a little hard to say to people, life is going to be great two elections from now if you don't have health care or if you're nervous about your health care. But there's going to be a lot of talk about the immediate deliverables, which is one of the terms that the administration uses.

So for example, senior citizens -- senior citizens, who are A, nervous about what's happening to their Medicare, witness grandma, will have their donut hole filled or somewhat filled very quickly. And people will be able to keep their kids on their insurance policies after they're out of college until age 26 or 27. So there's going to be some focus on that. It is hard to talk about legislation that is promising something in the future as and inevitably they will, as people's health premiums continue to go up.

TAPPER: Can the Democrats sell this?

KRUGMAN: Some. I mean, I'm waiting for the first poll that asks do you want to repeal this which is very different from whether you approve of it. And I bet you're not going to find anything like those numbers.

Let me also say about Parker Griffith. As I've looked at it, I think the correct description of him is he's a living fossil. He's sort of the last Dixiecrat. All of those conservative Democrats in the South are now Republicans and here's this one guy whose left over. It isn't necessarily an omen of very much.

I don't think health care is going to be a big sell for the Democrats. It's something they have to do. To go through -- this was something that was a core issue during the campaign. It's a core promise to the base, even if part of the base is temporarily at least really riled up as to what they wanted.

So it was something they had to check off. It's a little bit in a way like the Medicare drug benefit back in 2003 which didn't phase in for a long time. It was something that Bush had to do in order to just shore up that front.

So I don't think the campaign will be about health care. I think it is going to be about jobs, the economy, and just do you want those guys back in?

BROOKS: When FDR did the New Deal, 70 and 80 percent of the American people basically had a good view of the government. Now, like 15 or 20 percent of the American people have a good view of government. So if you have a whole series of things that look like big government and a lot of spending, they're going to take it out on you. And I don't know if more people will switch, but 20 House members, House Democrats are going to lose in all those states, North Carolina. They're just going to get wiped out. Harry Reid might get wiped out. People will get wiped out across the country.

TAPPER: I was just going to say, this is an end of the year show. So it's a good time for predictions. And you've just offered yours. Charlie Cook, the respected political prognosticator predicted that Republicans will pick up 20 to 30 seats in the House, and four to six in the Senate. You said 20 in the House, how many in the Senate?

BROOKS: I'm with Charlie. Twenty or 30 at least. And look at states like Illinois which is a Democratic state, got a very moderate, very impressive candidate, Mark Kirk has a chance to win there. You'll see some unexpected places. I think assuming things don't change, the Republicans will do pretty well and they'll repeal half of health care, only the painful half.

DOWD: Well, I agree with that. I think they're going to probably pick up 25 seats in the House and they're probably going to pick up five seats in the Senate.

TAPPER: Still not enough to control.

DOWD: No, but I think one prediction I have in the aftermath, of that, which I think will happen, the Republicans will misread the mandate. The Republicans will think it was because of something they said or they did as opposed to the Democrats went off tangent and wasn't in line with the American public and the Republicans will do something, which actually in my view, could be a benefit for Barack Obama going into 2012 if he has to deal with a more Republican Congress and then he can pivot against what the Republicans are doing.

KRUGMAN: Can I just say, mega dittos to that?

TAPPER: Prediction for election 2012?

MARCUS: So my prediction is slightly rosier. Let's remember ...

TAPPER: Rosier for Democrats?

MARCUS: Rosier, slightly rosier for Democrats. And let's remember the president's party always -- almost inevitably loses seats in the mid-year election. And I think the answer to the question depends on what Paul can tell us about where the economy is -- particularly where the unemployment rate is going to be in next spring heading into the fall because that will really determine how people feel about the incumbent party.

I say some in the House, somewhere in the 20s, anything under 20 will be viewed by Democrats as a huge sigh of relief for them. In the Senate, I think it's a little bit more complicated. There are more Republican senators retiring than Democrats and in more divided swingy type states. And so I would say closer to three.

TAPPER: OK, we are getting close to short on time but I do want to ask you a question about the economy for 2010. Your fellow laureate, Joseph Stiglitz has said there's a significant chance the U.S. economy will contract in the second half of 2010. He's calling on the government to prepare a second stimulus. Do you think that's possible?

KRUGMAN: Yes, it's a reasonably high chance. I don't think it's more -- it's less than 50/50 odds, but you know, what we've got right now is a recovery that first of all is not showing up very much in jobs yet. It's being driven by fiscal stimulus which is going to fade out in the second half of next year and by inventory bounce. You know, production was low because companies were running on their inventories. They're stopping doing that so now you've got a bounce in the economy.

But that's also going to run out. So the things we know about are all going to be negative in the second half of next year. Now the financial markets, the last month, the financial markets have gotten really optimistic. You look at things like the term spread on bond rates. They suggest that the financial markets really think there is going to be a much more vigorous recovery. I don't see where it's supposed to come from, so the range is huge here. I would basically go with Joe Stiglitz. I'm really worried about the second half.

TAPPER: OK, I'm going to have to wrap there. The Roundtable continues in the green room on ABCNews.com. You can get political updates all week long by signing up for our newsletter, also on abc.com. Coming up here, "The Sunday Funnies."

END

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