'This Week' Transcript: Rahm Emanuel

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JAKE TAPPER, HOST: Hello, and happy Father's Day. Joining me this morning, the president's chief of staff, Rahm Emanuel.

Mr. Emanuel, happy Father's Day.

RAHN EMANUEL, WHITE HOUSE CHIEF OF STAFF: Thanks, Jake.

TAPPER: Before we start the questions, I'm interested in your reactions to photographs from Saturday's BP CEO Tony Hayward at a yacht race off the Isle of Wight in the clean waters off southern England. What goes through your mind when you see those pictures?

EMANUEL: Well, to quote Tony Hayward, he has got his life back, he

Interview With Rahm Emanuel
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would say. And I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting. This has just been part of a long line of PR gaffes and mistakes.

But beyond that photo is really the substance here that matters. That's clearly a PR mistake and he has made a number of those mistakes. What's important is, are we capping the well? Are we capturing the oil? Are we containing the clean-up? Are we filing the claims? Are we also cleaning up the mess? That's what's important.

Now this is a mistake and it's a big mistake, like others he has done in the sense when he said himself, he has got his life back. Well, that's what's more important is, do the people down there in that area have their life back? Do they have their livelihood back?

So this is just another PR mistake in a long line of PR mistakes. What I think you've got to really measure is, what are we doing to deal with this problem? What is BP being forced to do to deal with this problem, both contain the well, even getting the $20 billion for the escrow account.

That's the measure here. This will be fodder, as you would obviously ask this question. People will chew over this. But don't take your eye off the major priorities and the key goals, that is dealing with the problem down in the well, and dealing with the problems of the region as it makes as important the people getting the resources they need to restore their lives and restoring that coastline to it environmental purity that it had at one point.

TAPPER: Well, let's talk about that. Are you satisfied with what BP has done so far in terms of capping the well?

EMANUEL: Well, as you know, there is a test here. OK? BP originally was going to do one relief well. We forced them to do a second relief well. They weren't going to do that. BP originally had a plan on capturing a certain amount of oil. We forced that, as you know, today's reports, they're up to 25,000. By the end of June, we forced them by making them do different things to get up to 50,000 barrels a day.

And by mid-July we think we'll be -- and be able to get them to a point capturing 90 percent of that.

TAPPER: And those relief well...

EMANUEL: And originally...

TAPPER: ... by August, do you think they're going to be working?

EMANUEL: And by -- wait a second, and also, Jake, is they originally weren't thinking about $20 billion. And they originally weren't thinking about an escrow account and forcing them to do that. There are certain things that they had to be pushed -- not certain things, like a lot of things that they had to be pushed to do. And pushed to do faster, more of.

And so when you asked me, do we think the wells will work? Their original plan was only one. We forced them to take a step and have a redundancy in the system, which is what you're also seeing in the capturing of the oil that's spewing right now.

They had a system in place, not extensive enough. Not fast enough. So we've made them go from 25,000 to 50,000 barrels by the end of this month. And we think by mid-July force -- basically making them pick up their game. They can get to 90 percent.

TAPPER: I've been down to the Gulf three times since the crisis. The president has been down there four times. One of the big complaints I hear that I'm sure the president has heard as well is the government bureaucracy and red tape stand in the way of a quicker response.

Here's a phone interview with Alabama Governor Bob Riley.

(BEGIN AUDIO CLIP)

GOV. BOB RILEY (R), ALABAMA: If this is truly a war, then we need to begin to treat it like that. As long as you're having decisions made by committees, it's very difficult to do.

(END VIDEO CLIP)

TAPPER: Are you concerned at all that bureaucracies and red tape are standing in the way of the governors and the Coast Guard being able to stop the environment damage as soon as possible?

EMANUEL: First of all, this is, as you know, and everybody knows by now, the worst environmental disaster in recent memory. Second, it's being met by the largest response ever organized by the United States government.

There are over 6,000 ships in that area, over 25,000 workers dealing with containment and capture and clean-up. And there's also 17,000 National Guard on-call for any governor that needs them and wants them at any time that they need.

Now there is -- as president said in the Oval Address Tuesday night, there is -- given the size and the magnitude of what we're dealing with, there are going to be problems, there are going to be bottlenecks. We want to know about them immediately, and respond to them immediately. So when you're organizing something like this, there are going to be mess-ups. There is no doubt about it.

There are going to be -- because it's changing it all the time because given weather patterns, et cetera. You're going to have move and be flexible. What's happening in Louisiana is not the same thing that's happening in Florida. And you're going to have design a different response.

This has never been done before, basically. And are there going to be mess-ups? Like every other massive major operation, yes. Are you going to be flexible enough to -- smart enough to be able to be responsive and also realize when something is not working to change it and find what is? That is also being done.

TAPPER: During BP hearings this week, you were give what Democrats see as a political gift by Texas Congressman Joe Barton, the ranking Republican on the House Energy and Commerce Committee. Here he is.

(BEGIN VIDEO CLIP)

REP. JOE BARTON (R-TX), RANKING MEMBER, ENERGY AND COMMERCE COMMITTEE: I'm ashamed of what happened in the White House yesterday. I think it is a tragedy of the first proportion that a private corporate can be subjected to what I would characterize as a "shakedown." In this case a $20 billion shakedown

(END VIDEO CLIP)

TAPPER: Now Barton later apologized for his comments after some pressure from House Republican leaders. But the Svengali of the president's political arm, David Plouffe, has called for him to step down as ranking Republican on the House Energy and Commerce Committee. Do you agree?

EMANUEL: That's for the Republicans to decide. What I think is more important, you can say it's a political gift for us, and it is. But it's dangerous for the American people, because while the ranking Republican would have oversight into the energy industry, and if the Republicans were the majority, would have actually the gavel and the chairmanship.

That's not a political gaffe, those were prepared remarks. That is a philosophy. That is an approach to what they see. They see the aggrieved party here is BP, not the fishermen. And remember, this is not just one person. Rand Paul, running for Senate in Kentucky, what did he say? He said the way BP was being treated was un-American.

Other members of the Republican leadership have come to the defense of BP and attacked the administration for forcing them to set up an escrow account and fund it to the level of $20 billion. These aren't political gaffes. You know, I've been in hearings. Joe Barton was speaking from prepared remarks. Rand Paul, who is running Kentucky, a leading Senate candidate for the Republicans said BP, the way they were being treated was un-American.

That is an approach to -- they think the government is the problem. And in this balance, and the difference here is that BP made a mess. And the government, and also in the president's view, in certain areas like MMS, hasn't done its job.

TAPPER: Minerals Management.

EMANUEL: Minerals Management. But the approach here expressed and supported by other voices in the Republican Party, sees the aggrieved party as BP, not the American -- not the fishermen and the communities down there affected. And that would the governing philosophy. And I think what Joe Barton did is remind the American people, in case they've forgotten, this is how the Republicans would govern.

TAPPER: What do you say to -- when you hear criticisms that this administration has used too many strong-arm tactics when it comes to dealing with big business, whether it's in health insurance companies or Wall Street firms or the U.S. auto industry?

EMANUEL: Well, first of all, it has had a different approach based on the situation. And having seen a number of -- let me try to kind of walk through. In the case of General Motors, the prior administration wrote a check without asking for any conditions of change.

We said, without a check from the American people, get yourself right. You've got to make fundamental change. They've made changes and now, as you know, General Motors is going to have an IPO. And most importantly, they're going to keep open factories that they were planning on closing.

So we're righting an industry that was not doing itself, or the American people or its workers, the right thing. So it was a way of getting them to do the changes that they had postponed.

In the case of also the auto industry, for 30 years this country has debating whether we're going to raise the fuel efficiency standards. We finally broke that logjam, not just for cars, but for trucks, by bringing industry together and also all of the other players and we have now a consensus.

And in the case of BP and their $20 billion, in the case WellPoint and the way they were raising insurance premiums, we've jawboned them to do what's right because there are other equities at play here. And if you use all your tools, some cases its jawboning, in some cases it's building a consensus. And in other places, it's also understanding that if you need the government -- or most importantly, the tax-payers' resources, you have to make the changes that are necessary for you to survive and be a viable entity like in General Motors.

So there's not just one kind of tool out of the tool kit box. You apply it with a different way. And I will also draw this consensus -- difference. As we're thinking about energy policy, in the past administration, it was just industry in the room.

In this administration, you're going to have industry, you're going to have labor, you're going to have environmentalists, you're going to have other experts as it relates to the climate. You will have an entire approach rather than one voice, one perspective represented. It's the same way that what Joe Barton expressed.

He views that the industry is the most important voice. The president's views is the fact is there are many equities and they all have to be at the table defining a common ground and common solution.

TAPPER: Well, let's talk about the energy bill, because in the tradition of not letting a crisis go to waste, you guys are talking about an energy bill. And I'm wondering how important is it to the president that energy legislation includes a carbon tax.

Will he sign a bill that doesn't include that?

EMANUEL: He campaigned on the view that you've got to deal with comprehensive energy, and also that energy bill has to have a climate component and helping us reduce our dependence on carbon as well as our carbon -- reducing our carbon pollution.

TAPPER: Does that include the carbon tax?

EMANUEL: Yes -- no, wait, Jake, let me walk through it. In the House of Representatives, they've passed a cap and trade -- an energy bill with cap and trade as a component. He spoke about this in Pittsburgh. He also spoke about it in the Oval Office. Everybody is coming to the meeting next week. There will be a meeting on Wednesday, senators from both parties with array of ideas are coming to the table.

They know the president's perspective. He has been clear with them about what there needs to be done. His goal now, now that the House passed a bill, is to get the Senate to pass a comprehensive energy bill that reduces our dependence on foreign oil, makes key investments in the areas of alternative energy so America leads in that space, and deals fundamentally with the environmental degradation that happens from carbon pollution.

And so that's what his goals are. He is trying to find a consensus working with members of both parties. And the good news here, unlike in other past theories (ph), there obviously will be Republicans with a set of ideas, like Senator Lugar who has introduced his legislation. There are good parts of that. Senator Alexander on the Republican side. Senator Kerry and Lieberman, Senator Bingaman.

So all of those ideas will be at the table to try to build that bipartisan consensus and finally get an energy policy that has America on a different course. And it will strengthen this economy. And most importantly, make it the most competitive when it comes to alternative energy.

TAPPER: Your portfolio is a lot larger than just energy and the oil spill. I want to move on the Afghanistan. We recently have two grim milestones in Afghanistan. More than 1,000 U.S. service personnel have died in there in service to their country. And this war became the longest in our nation's history.

EMANUEL: Yes.

TAPPER: The president set a July 2011 deadline for the beginning of troop withdrawal. But there is some confusion as to what it means, exactly. In Jon Alter's new book, here's Vice President Biden, he says, quote: "At the conclusion of an interview in his West Wing office, Biden was adamant. 'In July of 2011 you're going to see a whole lot of people moving out, be on it,' Biden said as he wheeled to leave the room, late for lunch with the president. He turned at the door and said once more, 'Bet on it.'"

But here is General Petraeus testifying before Congress this week.

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS, COMMANDER, CENTCOM: ... said that it was very important that it not imply a race for the exits, a search for the light to turn off or anything like that.

(END VIDEO CLIP)

TAPPER: So what exactly does the July 2011 deadline mean? Is it going to be a whole lot of people moving out, definitely, as Vice President Biden says? Or could it be more nuanced, as General Petraeus says, maybe just a couple of people leaving one province?

EMANUEL: Well, no, everybody knows there's a firm date. And that firm date is a date -- deals with the troops that are part of the surge, the additional 30,000. What will be determined at that date or going into that date will be the scale and scope of that reduction.

But there will be no doubt that that's going to happen. And I know actually -- I look at both of those, and they're not inconsistent. But remember where we were on Afghanistan policy, that war had waxed and waned. And there really hadn't been a focus on how to bring that war to -- and the effort (INAUDIBLE), even with al Qaeda and Taliban, to a point given what was going on in Iraq.

The president raised the troop level and civilian participation to 30,000. This was creating a window of opportunity for Afghanistan. We are now at that point in Afghanistan, and in fact for the first time in eight years, nine years, they're actually meeting their police recruitment requirements as well as their army recruitment requirements. So they themselves can take more and more responsibility for the security of that country.

Second is we're also -- about a half of al Qaeda has been eliminated in this last 18 months. So we're taking the pressure to al Qaeda, taking the pressure to the Taliban. And we're making progress as it relates to, as you know, after the president's meeting with President Karzai, went back to Afghanistan, held a peace jurga.

There is also progress being made on that side. All of this has been predictable in the sense that we knew once we created this window of opportunity, we were going to focus on what are the resources that are necessary, where are we going to be making progress. But the July '11 date, as stated by the president, that's not moving. That's not changing. Everybody agreed on that date. General Petraeus did. Secretary Gates did. As also Admiral Mullen agreed.

And the goal is to take this opportunity, focus on what needs to get done, and then on July 2011, is to begin the reduction of...

(CROSSTALK)

TAPPER: But it could be any...

EMANUEL: ... troops.

TAPPER: But it could be any number of people.

EMANUEL: That's what you'll evaluate based on the conditions on the ground. That is -- but what had to happen prior to that was having a date that gave everybody, the NATO, international forces, as well as Afghanistan, that sense of urgency to move.

TAPPER: The prime minister of Israel, Benjamin Netanyahu, was supposed to visit the White House earlier this month. He had to cancel that because of the incident with the flotilla. Has that visit been rescheduled?

EMANUEL: Yes. The president has offered the dates of July 6th, where the prime minister, Netanyahu, will be coming back to the White House to reschedule. That will be the fifth visit by the prime minister to the White House to work on a series of issues that are from the peace process, the security of the state of Israel, also dealing with the other issues in and around the region.

TAPPER: Do you believe that Prime Minister Netanyahu is the kind of leader who is willing to take big risks to make peace?

EMANUEL: Yes. But it's not important what Rahm believes. I mean, he has been clear about what he intends to do, what he needs to do. And the president has been clear of what we need to do to seize this moment of opportunity here in the region to finally make peace. Peace that -- where Israel feels secure and peace that's in balance with the Palestinians' aspirations for sovereignty.

That is possible. It was close in the Camp David of 2000. It is now the time, given where we are, to basically find that proper balance that gives Israel that sense of security it needs, and the firm commitment it needs on security. And measure that up with what the Palestinians need for their own sovereignty.

TAPPER: You've said that the administration has broken the back of the recession. And yet unemployment continues to hover around 10 percent, 1.2 million Americas are scheduled to lose their unemployment benefits this month. And the president, in addition, has been pushing for $50 billion in emergency spending for states and cities that Congress at this point seems to have ignored.

Steny Hoyer, the House majority leader, refers to spending fatigue that Congress has. And Republicans and some Blue Dog Democrats are pushing for spending cuts to offset these spending programs, the $50 billion, the unemployment. That doesn't seem so crazy, does it? Should these spending programs be paid for and offset with cuts?

EMANUEL: Well, first of all, it's important to remember, Jake, when we had to -- came to office, the economy was shrinking by a little over 6 percent. Today it's growing by 3 percent. In some cases, a little more.

Second, we're losing on average 700,000 jobs. The last three months we've been adding on average about 140,000 jobs. Those are dramatic swings in 12 months. Now we have broken the back of the recession, but what we haven't -- what we don't have is a fast enough, strong enough recovery. And that's the focus of the president's agenda on a going forward basis.

We took decisive action, as the president indicated, break the back of the recession, the spin (ph) that it was getting close to something more precarious. But this recovery is not strong enough for the American people, not adding jobs quick enough. As you saw, the president spoke just the other day about 10,000 construction project that will going on.

What are the steps that are necessary? First and foremost, pass a comprehensive energy bill. Second, we're in the closing days of getting comprehensive, sweeping financial regulatory reform to give the markets certainty.

Third, the House has passed just this week, and he has called on the Senate to take it up, which they will in due time, is a small business lending bill. And third, one of the headwinds for the economy is the fact that state and local governments are facing their financial situations, are laying off teachers. And it is the president's view that it's better to have teachers in the classroom than on the unemployment line.

We have to help those communities in this particular window of time to get -- help teachers stay in the classroom, not make those cuts. They add to the unemployment when they have a responsibility in that classroom. And in the long-term basis, the president said, and this was a matter of sequencing, we have got to deal with our fiscal condition as a country -- our a long-term fiscal situation.

We have taken certain steps like instituting a pay-as-you-go rule that had been in absence for 10 years in Washington, which was responsible for -- one of the reasons we added the largest amount of debt in the nation's history in the shortest period of time.

But day (ph) steps what the economy needs is to take critical steps and making sure that we're dealing with our energy policy, small business lending, and making sure teachers stay in the classroom rather than on the unemployment lines.

TAPPER: I know your time is valuable, I just have a couple of more questions. A National Public Radio poll this week of voters in 60 competitive Democratic-held congressional districts, by Stan Greenberg, who did the polling for you when you took back the House in 2006, had some bad news.

"Which statement comes closer to your own view? President Obama's economic policies helped avert an even worse crisis and are laying the foundation for our eventual economic recovery: 37 percent. President Obama's economic policies have run up a record federal deficit while failing end the recession or slow the record pace of job losses: 57 percent."

How many Democrats are going to lose their seats because of the president's policies?

EMANUEL: Jake, first of all, midterm elections are always bad for the party in power. Second of all...

TAPPER: Those are some bad numbers.

EMANUEL: Yes. But I will tell you this. I do know politics well enough to say this. Anybody that tells you sitting here in the middle of June how many the number is, doesn't know anything about politics. It's as simple as that. Because there's a lot to happen here.

By way of example, elections are choices, OK? There is a choice that Joe Barton has offered the American people, a philosophy for the Republican Party, which is that BP is the aggrieved party. Rand Paul in Kentucky, other members of the Republican leadership.

Some members of the Republican leadership think that we don't need any reforms on Wall Street. Now that they've gotten back some of their financial health, we don't have to change any of the rules, we don't have to bring in another level of transparency as well as enforcement.

That's a governing philosophy. In the coming weeks you'll see the president speak to the country about these competing different philosophies. That is, do you have only the energy executives in the room, or do you have energy executives, environmentalists, and other people from the venture capital community to come to a consensus on energy policy?

Do you think that BP is the aggrieved party here? Do you think that Wall Street should be left alone and not have any reforms? Elections are about choices. Those are what is fundamental. There is a difference in our philosophies. And not only in our philosophies, how we make sure that American strengthens its economy.

Joe Barton and the Republican -- major voices in the Republican Party just told you their view. And in case you forgot what Republican governance was like, Joe Barton reminded you. In the coming weeks, the president is going to lay out a competing agenda, one that talks about an energy policy, one that talks about the essential needs of passing financial -- of reform for Wall Street, one that makes sure that small business companies are getting the capital they need to grow and expand, and one that is also -- that talks about the need that we also have of a rebuilt America, so the workers that the president was with yesterday don't have just this blip of a recovery, but that we have a rebuilt America and major investments in our infrastructure so that we're the most competitive economy going into the 21st Century.

TAPPER: Finally, sir. House Republicans introduced a resolution of inquiry on Thursday night to find out more about the jobs floated to Andrew Romanoff and Joe Sestak as part of a pitch for them not to run in contested primaries, Colorado and Pennsylvania respectively.

I know the White House position is that nothing illegal happened, nothing improper happened. But do you at all worry that you and the political arm of the White House have undermined the president's pledge to change the way Washington works?

EMANUEL: First of all, the White House -- it's also Bob Bauer, introduced and did a report, made it public that said nothing inappropriate. Two of George Bush's attorneys, one that worked at OLC in the Justice Department, one that worked in the White House, said nothing inappropriate happened here. There is nothing that -- more that needs to be added to that.

TAPPER: All right. Rahm Emanuel, thanks so much for joining us.

EMANUEL: Thank you.

TAPPER: The energy debate as seen by Jon Stewart, one of many topics for our roundtable with George Will from National Public Radio; Michel Martin; from the Council on Foreign Relations, Richard Haass, and from Fox News Channel, Greta Van Susteren. Thanks one and all for being here.

George, I want to start with you. I know you don't agree with what Republican Texas Congressman Joe Barton had to say, but does the idea of this $20 billion escrow account make you uncomfortable?

WILL: It does. Look, there is no defense of BP which has an execrable safety record in this country, from the refinery disaster in Texas in '05, the Morris Slope leak in '06, all of that and so no apology from BP. But if you don't want to live in a Northern Hemisphere Venezuela, you ought to be a little queasy about the fact that a president, any president of any party, using raw political power, without recourse to courts that exist for this sort of thing, under laws, with due process, essentially confiscates $20 billion from a publicly held corporation, about half of its shares held by Americans, to be dispensed, again, with out judicial supervision, as the political branch sees fit.

That is worrisome. Even, they have even said that BP maybe held responsible for the lost wages caused by, not BP, but the administration's own moratorium, six-months moratorium, on deepwater drilling. Which maybe more costly to the economy of the Gulf than the spill itself.

TAPPER: There is a separate $100 million account for those out of work-

WILL: Yes.

TAPPER: -workers who work for those oil rigs.

MARTIN: What a shock, I'm going to disagree with that.

(LAUGHTER)

(CROSS TALK)

Well, there are two questions here. Does the president have the authority and is that an appropriate use of his authority. And I credit George, it might not be an appropriate use of his authority. But we interviewed a number of environmental lawyers this week who say there are any number of statutes which give the president the authority to do this.

And he didn't bypass, of course, BP still has access to the courts. They can challenge this at any time, they can challenge liability. And frankly, the question I have is this a ceiling or a floor? I mean, there is a reasonable argument to be made that this represents a ceiling for their liability. The president also went on the record as saying that he doesn't want BP to go away. That it is in the interests of this disaster for BP to continue as a company, as an ongoing entity.

TAPPER: He said this was not capped at $20 billion, though.

MARTIN: Well, yeah, but I think you could argue that it becomes the argument for a cap. It is not legal cap, and so again, they can argue over that. The courts have not gone away. This is the means by-the president has the authority to do this and if he doesn't I'm that the courts exist to address these claims.

TAPPER: Richard, I mentioned that Rahm Emanuel, his famous quote about not letting a crisis go to waste. And they are meeting on energy policy with members of Congress on Wednesday. Do you think that the administration is seizing this and not letting this crisis go to waste.

HAASS: So far, no. They have not seized it. And I think that was the biggest weakness of the president's address the other night, from the Oval Office. It wasn't what he said, it what he didn't say. It was very thin on the policy side.

The United States uses one out of every three gallons of oil in the world that are devoted to road transit. We have got to cut that back. And what I would say that argues for a much more ambitious escalation of so-called CAFE standards, of mileage standards.

Secondly, the administration seems obsessed with long-term alternative fuels and the problem it, it is long term. We need to do something about the short and medium term. What I would suggest, we have that answered here at home, which is natural gas. You don't hear those words mentioned a lot, but natural gas is competitive in price, it is incredibly omnipresent, now, in the United States and it is very good for the environment. So instead of thinking about 30- or 40-year solutions we really need to think about the near term.

TAPPER: Greta, the congressional hearings with Tony Hayward, the CEO of BP, testifying provided a lot of good theater and obviously a lot of good powder for Rahm Emanuel. What was your take on that?

VAN SUSTEREN: I thought it was great theater, but that is all it was. I mean the whole idea of Congress, who-let's back up. I mean, I agree with George, and everybody else here. BP is horrible. In fact, I even think they go off easy at the White House, at $5 billion, they could have paid $7 billion in shareholder dividends.

TAPPER: $5 billion a year.

VAN SUSTEREN: $5 billion a year. Yes, I think they go off easy to start with. But the idea that Congress, who has the obligation to oversee the Department of Interior, who has the obligation to oversee MMS, and they are sitting there and for all these years they have let BP cut corners, create risks, do a cheaper way of trying to extract this oil from deep down in the Gulf floor. The idea that all of a sudden they are scandalized by what was going on BP.

Why weren't they checking up on the Department of Interior, and MMS? We hear these scandals out of what they were doing. That sort of the scandals, whether it is pornography, or getting too chummy with BP, but then Congress the gall to sit and point fingers. They, themselves, ought to point fingers at themselves. It doesn't let BP off the hook. BP is horrible. But I thought Congress was only grandstanding.

TAPPER: Rahm Emanuel seemed to really seize on those Barton comments almost as if President Obama were on the ballot this year, for the 2010 midterms, running against Joe Barton. Democrats argue that Barton's comments are not really out of Republican mainstream. And here are some comments from the Republican Study Committee, in the House; 114 members of the Republican Party in the House saying: "BP's reported willingness to go along with the White House's new fund suggests that the Obama administration is hard at work exerting its brand of Chicago-style shakedown politics. These actions are emblematic of a politicization of our economy that has been born out of this administration's drive for greater power and control."

George, it seems like mainstream Republican thought, if that is from the Republican Study Committee?

WILL: Well, among those asking, upon what meat doeth our Caesar feed that he has grown so great?, is "The Economist" of London, which I think we have all accept as a mainstream publication. They say, in a section of their lead editorial, called "Vladimir Obama", "The collapse of BP's share prices suggest he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding. If the president does not stand up for due process he will frighten investors across the board. The damage to Americans environment is bad enough, the president risks damaging the economy, too."

That's not a partisan outfit, "The Economist".

TAPPER: This is one other topic which Rahm talked about, which was the war in Afghanistan. And, Richard, I read a story in "The New York Times" this week that I was very interested in getting your take on. It is about Afghan President Hamid Karzai's skepticism about the U.S. campaign. In the story it says, "Mr. Karzai had lost faith in the Americans and NATO to prevail in Afghanistan. 'The president of Afghanistan has lost his confidence in the capability of either the coalition or his own government to protect this country,' the former director of the Afghan intelligence service said an interview."

Richard, if Karzai doesn't have confidence in the U.S. campaign, should we?

HAASS: The short answer is I think there is reason to have real doubts. The administration has a very ambitious policy in Afghanistan. It is to create conditions by building up our forces and training the Afghanistan so that we can leave, and the Afghans essentially become self sustaining. I think the odds of that being realized are extremely small. To build up a strong state is very un-Afghan. You have sanctuaries in Pakistan. Karzai is an incredibly flawed leader. To separate the Pashtuns from the Taliban is very tough. I don't think this is going to work.

I'm also not sure it is worth it. There is nothing unique about Afghanistan in terms of being a place for terrorists to operate. It doesn't necessarily hold the future to Pakistan. Pakistan does-we have real problems in places like North Korea and Iran. That is where we should be focusing. So, I think, the United States in some ways needs to listen to Karzai. We need to move faster. So, when July 2011 comes around it ought not to be a faux draw down. It ought to be real. We ought to take out sizable numbers of troops. We ought to try and negotiate a deal with those Taliban leaders who are willing to work with us on guidelines, say that they won't allow Al Qaida back in.

But essentially, this is an expensive, in terms human life, financially and militarily; this is an expensive investment. But it is also a strategic distraction. This ought not to be where the United States uses its limited resources in the world.

TAPPER: George?

WILL: Well, part of the problem is that counter insurgency, as defined by General Petraeus, who literally wrote the book, the manual on this, involves protecting the population, in order to win their affections. The problem with that is, that it requires rules of engagement, that put our own forces in danger.

TAPPER: In fact, you-if I could interrupt you?

WILL: Yes.

TAPPER: To quote you, you have a column today in "The Washington Post" called "Futility in Afghanistan", in which you quote an officer explaining why the rules of engagement for U.S. troops are too prohibitive for Coalition force to achieve sustained tactical success". I'm sorry.

WILL: He talked about his particular unit and they were reluctant to grant air support, even artillery, even a smoke canister fired up, so they can disguise their own movements, an illumination canister in order to illuminate where the enemy is, because they canister falls to earth and it might hurt someone. That is fine. You want to minimize casualties, but you are putting your own forces at risk.

Beyond that, General McChrystal, in words I think he'd probably like to take back, said when we went into Marjah we were going to bring in a government in a box, a transportable government. Well, we don't know how to do nation building and counter-insurgency, as Petraeus defines it, is nation building. And, in fact, when the purpose is to extend the writ of Kabul throughout the country, that terrifies Afghanistan, because the Kabul government is even more brutal than it is corrupt.

MARTIN: So, your argument then is there ought to be a hard date for a drawdown and there ought to be a real drawdown, too?

WILL: Right.

VAN SUSTEREN: But we don't even know what our goal is at this point. What is the goal being in Afghanistan? And we should at least identify the goal. If it is to get rid of these terrorist camps we could probably do that from the air. I mean, every single we read-I heard the introduction, we have hit the milestone of more than 1,000 deaths of American troops. They've got civilian deaths.

TAPPER: Longest war in U.S. history.

VAN SUSTEREN: Actually, I'm looking forward to next week's interview with Leon Panetta. See what he says about this. But this is not exactly a war that, regrettably, that we're winning. Look at the Soviets were there through everything they could-who had it for 10 years and they ran away from it. You know, this is not a war that is going well for us.

TAPPER: Michel, you and I were speaking before the show and you were intrigued by the story that appeared in "The New York Times". A different story, talking about the $1 trillion dollars worth of mineral value that was suddenly found, although, if you look back at other stories, you know, the mineral wealth in Afghanistan has been written about for, literally, more than a century. But this was a new report from "The New York Times". What was your take?

MARTIN: Which was leaked, and I'm just curious about what the intention of it was. Just to say that this is worth it because -- it is now worth it to stay in Afghanistan because there are these mineral resources that -- who will...

TAPPER: Do you think that was the case, that was...

(CROSSTALK)

MARTIN: Who will be (inaudible) these resources? Is it to shift the argument to saying that this is a war over resources as opposed to over national security?

WILL: I think Michel's skepticism is warranted. It came after weeks of very bad news, and here's the answer to your question, Greta. What are we -- our mission is lithium. We're going to get the minerals. I mean, it's absurd. In the first place, it's decades away from being extracted. Second, it raises the stakes for the Taliban to want to win. Third, the corruption in Afghanistan will be cubed by the corruption that always goes with extraction industry.

VAN SUSTEREN: And I think they were -- I think they were trying to suggest that this would be their great economy, that they would finally have some money, because we're making all our efforts to destroy their economy, because what their economy is, for better or for worse, is drugs. And so you know, we've got to destroy their economy. Then what do they have? Well...

(CROSSTALK)

MARTIN: It's a leading indicator of where public opinion is, because you can -- as, you know, sort of night follows day, when a conflict is not going well, at some point someone will pick his head up and say -- which is exactly what happened in Iraq, you know, years ago, which is to say, well, actually, this is about oil. And now we're saying now, this is about lithium? I mean, I'm not sure that the public is willing to tolerate ongoing loss of life over lithium.

TAPPER: Richard.

HAASS: If it was a leak, it was a dumb leak. Because what it's going to do is raise the specter in Afghanistan that we now have a real (ph) mission, and it's not to liberate Afghanistan, if you will, or protect them from the Taliban. It's to do something for ourselves, i.e. get access to minerals, so it will increase the desire to kick foreign forces out.

Secondary, Iraq is a cautionary tale. You can never extract resources on any level that's meaningful until you create conditions of political and military stability. The all thing we all know sitting around this table is there will not be conditions of political and military stability in Afghanistan for the foreseeable future.

MARTIN: But the irony of it is, though, that the public, I think, with all of its impatience at this and legitimately so, it's a dumb leak because the public is willing to fight over values, but I don't think the public is wiling to fight over lithium.

TAPPER: Interesting. Another fight going on in the public, Greta, you interviewed the governor of Arizona, Jan Brewer, this week, about the immigration law. Here's an excerpt from this interview.

(BEGIN VIDEO CLIP)

GOV. JANICE K. BREWER, R-ARIZ.: I will tell you, Greta, we are not going to back away from this issue. We are going to pursue it, we are going to be very aggressive, and we'll meet them in court. We will meet them in court, and we will win.

(END VIDEO CLIP)

TAPPER: And that interview, that phone interview followed an appearance by Secretary of State Hillary Clinton on South American television -- I'm not sure if she knew it was going to find its way back to the United States -- in which the secretary said this.

(BEGIN VIDEO CLIP)

SECRETARY OF STATE HILLARY RODHAM CLINTON: President Obama has spoken out against the law, because he thinks that the federal government should be determining immigration policy, and the Justice Department under his direction will be bringing a lawsuit against the act.

(END VIDEO CLIP)

TAPPER: That's the first time anybody in this administration said definitively whether the administration is going to be suing Arizona. But parse Secretary Clinton's statement for us.

VAN SUSTEREN: OK, first of all, racial profiling is what people have been screaming about, about this statute. I don't need to tell anybody here, racial profiling is horrible, it's bad, it's painful, it's all those things. Now, the question is, is SP1070 -- does it provide for racial profiling? And if you read the statute, I don't think it does. In fact, it was amended to try to handle that situation.

If you listen to what Secretary of State Clinton said, she didn't say anything about racial profiling. What she said was is federal immigration policy essentially usurp state. So the question is, does this, you know, is this federal immigration policy? A court will determine that. And I go back and forth on this. I've gone back to the Constitution, and I read that immigration isn't in the Constitution, but it talks about invasion of forces, and at moment I'll think, yes, this does try to usurp the states -- the federal government, so it will be unconstitutional. Other times, I think, no, this is simply, you know, enforcement of the law. It says illegal immigrants, and we don't give passes for people who shoplift, so do we give passes for people violating this law? So I go back and forth on this.

But here's the interesting thing. Neither the president nor Secretary of State Clinton talked about racial profiling, which is the hot-button item which has gotten people all riled up. And the reason is because both of them probably read the statute, and I don't understand why they don't put that issue to rest, because that would certainly calm things down a bit.

What this statute does is it needs to be tested in court, and the Justice Department if it's going to sue, needs to sue fast, before it goes into effect, before we have problems, and that will be the end of July.

MARTIN: When you say put this issue to rest, I don't think I understand what you mean.

VAN SUSTEREN: The whole issue of racial...

(CROSSTALK)

MARTIN: ... not going to open the door to racial profiling? How can they do that? I...

(CROSSTALK)

MARTIN: ... I'm curious what you think they...

(CROSSTALK)

VAN SUSTEREN: I think they should make the statement because I think they let it sit out there, because I think that's why there are boycotts of the state, because that -- I think that, because everyone thinks that this is racial profiling. That's horrible, that's a very bad thing to do. We even have the Constitution talking about the importance of equal rights for people, and there should be no statute that has racial profiling, none. But they don't speak to it. And instead, they sort of let that issue sort of sit out there and -- and percolate out there.

MARTIN: But there's the law, and then they have their -- it's how the law is interpreted. I mean, the fact is that the law has barred people from using race in jury selection for how many decades, but it still is used. There was recently a study in -- of 11 Southern states that indicated that African-...

(CROSSTALK)

MARTIN: ... Americans were, excuse me, barred from juries at three times the rate of whites for reasons like, well -- and prosecutors were saying, well, because he had glasses...

(CROSSTALK)

VAN SUSTEREN: You and I don't disagree (INAUDIBLE). Get that. You and I do not disagree about that.

MARTIN: But the question is whether there are policies in place actually lead to it or not, whether the policies are so stated or not.

(CROSSTALK)

VAN SUSTEREN: No, but if you look at the statute itself, you read the statute and you read the words to the statute, people will take armed robbery and apply -- and they'll racial profile armed robbery, which doesn't speak about racial profiling. That is so horrible. That is so bad. You and I don't disagree about that.

MARTIN: We're not talking about policy, Greta. We're talking about the implementation of the policy.

WILL: Precisely. You're talking about the law as applied. And since it won't be applied until July 29th, I think that for reasons we've heard nothing but -- from the Justice Department about why they might challenge this is they don't know how to challenge it.

First of all, they have to wait until it's applied to come up with as applied violations. Or they can say, it is wrong for Arizona to asset concurrent jurisdiction in enforcing federal policy. And I think that's a very tough argument to make also.

HAASS: It has got to be federal at the end of the day, because you have to deal not simply with security and not simply with those who are here without documentation, but the biggest issue, I actually think with this country with immigration is legal immigration.

This is one of the keys to opening up the U.S. economy to making us competitive again. And unless this is dealt with comprehensively from the federal level, we will never have an adequate immigration policy.

VAN SUSTEREN: But nobody will do that because there are businesses on the right who like the cheap labor. And so they'll fight against it. And that's a special interest. And then you have the special interests on the left that thinks this is potential voters. Nobody will do anything about this.

We've been hearing about this since 1986.

HAASS: We disagree then. There are a tremendous number of businesses need a larger number of talented people, foreigners who come here, they get their Ph.D.s. We've got to find ways to keep them in the United States. This is one of the ways we're going to make this country economically competitive.

VAN SUSTEREN: I'm going to agree with you that we do need something. I don't disagree with you on that. I'm just saying that I don't see the appetite for it up on Capitol Hill.

TAPPER: One of the other issues with the economy right now has to do with the 1.2 million Americans who are about to lose their unemployment benefits. And there has been a big debate on Capitol Hill about whether it has to do with unemployment extension or the $50 billion in funds for states and locals, emergency fund, the president calls them.

There has not been an appetite to pay for them with spending cuts elsewhere. Here is Republican, Oklahoma Senator Tom Coburn talking about this debate.

(BEGIN VIDEO CLIP)

SEN. TOM COBURN (R), OKLAHOMA: What the American people want us to do is if we need to do these things, find something somewhere within the federal government that doesn't make sense. Don't borrow it from our children.

(END VIDEO CLIP)

TAPPER: Richard, what is going on here in terms of the debate on Capitol Hill?

HAASS: You're actually seeing one of those interesting moments in American politics where I think we're seeing a fundamental philosophical debate about the role of government in the economy. On one side are those who want to have a larger government role, talk about a second stimulus package, extending unemployment benefits indefinitely.

And there are others who want to bring down the deficit and basically say the role of government is to create an environment in which the economy can do well. Have an open trade policy, have a more open immigration policy. Don't over-regulate. Don't over-tax. Be predictable so businesses can prosper.

And this is a first order debate, in some ways a defining debate between traditional Democrats and traditional Republicans.

WILL: This is a third stimulus because there was the stimulus of 2008 before the stimulus of February 2009. The Democrats are in the interesting position of turning to the country and saying, Washington is dangerously fertile (ph) right now, and we have to spend some more money to stimulate things, otherwise we will lose -- magic figure comes up, 300,000 teachers. Where did that number come from?

Aside from the ether, it came no doubt from the teachers unions. This is the standard Washington argument that says, oh, if we're going to cut -- balance the budget, we're going to have to close the Washington Monument.

MARTIN: This is a healthy discussion, it seems to me, about what exactly government is for. I mean, I think this is a healthy and appropriate discussion about the point at which you stop spending on one thing and start spending on another.

I mean, I talk to unemployed people all of the time. In fact, I had an interview with a man just last week who had lost his job on June 4th. And as a consequence of the timing of when he lost his job, he will no longer be eligible for the COBRA subsidy that was part of the stimulus pack...

(CROSSTALK)

MARTIN: But for people who have lost their health insurance for whatever reason, you can continue to buy it from your employer. And a federal subsidy was offered, which was a substantial benefit to a lot of these families.

This man is the sole breadwinner in his household. His health insurance costs alone for a family of four, $1,300 a month, and he doesn't know what he's going to do. So I asked him the question. I said, well, now, of course, the question becomes of the deficit and you're adding to the deficit, which is, of course, a tax on your children and mine. How do you think those things should be balanced?

And he said, you know, I don't know. But I do know that I'm really scared right now. So that is legitimate for political parties to balance those competing objectives. That's exactly the thing we should be debating.

TAPPER: We've only got a minute left. But what are the politics of this on Capitol Hill right now?

VAN SUSTEREN: Well, they all want to win in November. And so they cater to their clientele, the people back home. And so that's the bad part about it. But in terms of, you know, whether to extend the benefits or not, look, you know, as Richard said, it's the different political -- do we want more spending or less spending, and you know, they're going to battle it out. There's no bipartisanship up there, and we're just going to hear lots of talk and chatter, and I don't think we're going to see much done.

TAPPER: It doesn't seem so crazy, though, to say, can we cut spending elsewhere?

VAN SUSTEREN: Well, no, of course it doesn't, and you -- and the big picture is, you know, the more we have to borrow overseas, the less sort of diplomatic muscle we get to solve other problems in the world. The more we're beholden to China, for instance, so you know, this deficit that we're running up is not insignificant. But if you were back home in my home town of Appleton, Wisconsin and you just ran out of a job, you know, it's real significant to you. You know, so, you know, everyone's got an interest in this one.

TAPPER: All right. Well, the roundtable will continue in the green room on ABCnews.com.

END

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