AMANPOUR: This Week, a ticking time bomb. All eyes on the exploding national debt.
(BEGIN VIDEO CLIP) PRESIDENT BARACK OBAMA: Doing nothing on the deficit is just not an option.
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AMANPOUR: And that looming threat which could force the United States government to default.
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REP. JOHN A. BOEHNER, R-OHIO, HOUSE SPEAKER: There will not be an increase in the debt limit without something really, really big attached to it.
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AMANPOUR: Tough questions for President Obama's point man on the economy, Treasury Secretary Timothy Geithner.
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GEITHNER: The people who would take this to the edge, to the brink, they'll own responsibility.
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AMANPOUR: And then the leading edge of the opposition, the Tea Party. Key members join us, 100 days after a revolution swept them into office. How far are they willing to push the president and their own party to fulfill their promise to balance America's checkbook?
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DONALD TRUMP: We have to take our country back.
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AMANPOUR: What to make of this surprise Republican frontrunner? Plus, Hillary Clinton warns the Arab spring may melt into a mirage in the desert. But will it? A special reporter's notebook from Terry Moran at the heart of the revolution that is still unfolding.
Welcome to our viewers here and around the world. President Obama hits the road this week on a mission to sell his brand of fiscal responsibility to the American people. This just days after House Republicans approved their dramatic plan to tackle the debt crisis. At issue: A national debt that has ballooned to more than $14 trillion. The United States is now borrowing $2 million a minute.
As for the plans, President Obama wants to end the Bush tax breaks for the wealthiest Americans, and he's calling for spending cuts, including at the Pentagon, and cost-cutting reforms to Medicare and Medicaid. Republicans are demanding steep spending cuts, no tax hikes, and a massive restructuring of Medicare and Medicaid that would fundamentally transform two pillars of the American safety net.
The plans are worlds apart, and the clock is ticking. In a month, the United States will reach its borrowing limit. In order to borrow more money to meet obligations, Congress must vote to raise the debt ceiling, and getting Republicans on board may not be that easy. I spoke with Treasury Secretary Tim Geithner about the showdown and the stakes.
AMANPOUR: Secretary Geithner, thank you for joining us.
GEITHNER: Nice to see you.
AMANPOUR: The debt ceiling is going to be the next big battle, it is the next big battle. Can you really spell out in plain English for our viewers what is the impact, if it's not raised, for the United States and for the average American?
GEITHNER: Well, I want to make it perfectly clear that Congress will raise the debt ceiling.
AMANPOUR: You're sure about that?
GEITHNER: Absolutely. And they recognize it, and they told the president that on Wednesday in the White House. And I sat there with them, and they said, we recognize we have to do this. And we're not going to play around with it. Because we know -- we know that the risk would be catastrophic.
And it's -- you know, it's not something you can too close to the edge.
AMANPOUR: So what they say in private is not quite what they say in public?
GEITHNER: Well, you know, they have said in public, too, that they recognize that America has to meet its obligations.
Again, you know, this is just about the basic trust and confidence in the United States. It's about the basic recognition that we made commitments, we have to meet our commitments. There's no alternative, and they recognize that.
AMANPOUR: What if it wasn't raised? What is the doomsday scenario?
GEITHNER: I'll be very direct about it, and people understand this. Again, anybody running a business or -- understands this. What will happen is that we'd have to stop making payments to our seniors -- Medicare, Medicaid, Social Security. We'd have to stop paying veterans' benefits. We'd have to stop paying all the other payments on all the other things the government does. And then we would risk default on our interest payments. If we did that, we'd tip the U.S. economy and the world economy back into recession, depression. I think it would make the last crisis look like a tame, modest crisis. It would be much more dramatic. The cost of borrowing would go up for everybody, and it would have a permanent devastating damage on our credit rating as a country. And that's why there is no responsible person that would take any risk that we allow the world to start to fear that the U.S. would court that -- that tragedy.
Again, if you take it too close to the edge, then people will start to wonder, really, what are we doing, what are we thinking.
AMANPOUR: You seem to be confident. You're saying that they will vote to raise the debt ceiling. On the other hand, you're also leading quite a concerted campaign with Wall Street, with big bankers to try to persuade the Republicans -- those who may be doubting this -- that they have to do this. So you're not sure?
GEITHNER: Well, we're not -- we're not leading that, because the business community is -- wants to make sure that people up there understand. You know, remember, there's a lot of new people up there, and this is a hard vote for people. And you know, there's been a little bit of a tradition that people play politics with this. So the business community is doing what we'd expect to make sure people up there don't miscalculate. And again, the people who would take this to edge, to the brink, they'll own responsibility for calling it to question, our credit worthiness, and that would not be a responsible thing to do.
I'll tell you what -- what's the hard thing to do. The hard thing is not to raise the debt limit, because Congress will always do that, and they recognize that. The hard thing is to try to take advantage of this moment, and get Republicans and Democrats to come together and lock in some reforms that will reduce our long-term deficits.
That's -- that's going to be -- that's really important to do, because the world is watching now. And they want to know that Washington takes these things seriously, and is willing to get ahead of this problem.
You see the Republican leadership say, and you see the president of the United States say, and you've seen a bipartisan fiscal commission say, that we need to try to lock in reforms that will bring about -- about $4 trillion in deficit reduction over 10 to 12 years. When they all agree that we have to do it, they agree on the basic magnitude, the basic -- same basic timeframe, then we have a chance now to get Congress to lock in some concrete targets and concrete timelines. And then enforce them there, just to make sure it happens, and I think we can do that.
AMANPOUR: And yet, this week, when the president made his speech, certainly, many Republicans thought that they were sort of ambushed.
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OBAMA: And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill.
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AMANPOUR: Is this the right tone, do you think, that will encourage people like Speaker Boehner to actually come together and, as you hope, get this thing passed?
GEITHNER: Look, we recognize, the president recognizes, and Republicans recognize, this is something we have to do and we have to do it in a bipartisan basis. Neither side has the votes to do this on their own, and you have to come together to do it.
AMANPOUR: What can you give to the Republicans ahead of this vote?
GEITHNER: Well, let me step back for one sec.
You know, we, in the years before this crisis, we were piling on a lot of debt. As a country now, we borrow about 40 cents for every dollar we spend. We're on an unsustainable path. And that -- again, that's why it's so constructive and so encouraging you see Republicans now and Democrats all saying this is an important commitment, and laying out the same basic order of magnitude cuts that are going to be necessary.
Now, we have very big disagreements on what the right balance is, but there are things we agree on and we can lock in today. The things we're going to disagree on for some time, we can take more time to resolve.
But what we think we can do is lock in some targets for deficit reduction, specific timeframe, ways to make sure those happen, that there are credible enforcing mechanisms, and we can agree on that now and still give us some room to debate and to disagree and to negotiate on composition of tax reform.
AMANPOUR: Now that we're talking about budget cuts and that's the whole conversation in Washington, is that going to damage the recovery?
GEITHNER: No, I don't -- I think we can do this -- and that's a very good point, I'm glad you raised it.
One of the reasons why you want to do this in a way that's balanced and has a medium-term plan, you know, it locks in changes over several years, is because you need to do this gradually so that you protect the recovery, and I think we can do that.
But we can make these changes, if we do it carefully, without, I think, hurting the economy, without adding to the burden on the middle class, and without gutting or eroding investments in things we need to make sure we do in the future.
AMANPOUR: So the president, also in his speech, talked about revenue raising -- taxes, taxes on the wealthy. GEITHNER: Well, I think it's important for people to recognize that we cannot afford to extend these tax cuts for the wealthiest 2 percent of Americans. We can't afford it and we have to do tax reforms.
AMANPOUR: So Speaker Boehner says that's a non-starter.
GEITHNER: But there's no surprise to that. You know, they believe that.
But I think, you know, Chairman Ryan's budget helps explain why this is going to be essential, because if you want to extend these tax breaks for the top 2 percent, then either you have to ask me to go out and borrow trillions of dollars from the Chinese or from foreign investors or from Americans, from our children, or you have to cut -- as he proposes to do -- very, very deeply into basic benefits for seniors, the disabled, the poor. And we don't need to do that in order to restore balance for our fiscal position.
AMANPOUR: Will raising taxes on the wealthy be enough to really make a dent in the deficit? Many economists are saying that you're going to have raise taxes on the middle class as well.
GEITHNER: Yes, very important question, and I'm glad you raised it.
And think about it this way. If you -- it's true we have to bring these deficits down, but if you do it in a balanced way, that includes spending savings, reforms to health care and tax reform, then you can do it in a way that has acceptable costs for the economy, preserves our capacity to invest, and doesn't add to the burden of the middle class.
And the reason why that's true is because a -- we have a huge amount of spending in the tax code, special tax breaks that go disproportionately to the most fortunate Americans.
So it is possible to do this, the president believes we can do this, I believe we can do this, without adding to the burden on the middle class.
AMANPOUR: Where would the specific reforms be? The president talked about closing certain loopholes and certain deductions for people. Where would the specifics be?
GEITHNER: Well, the two basic foundations of this we think that would be responsible, are, again, to let the tax cuts -- temporary tax cuts put in place under President Bush for the top 2 percent -- let them expire.
And the second is to reform the tax code by eliminating some of these special expenditures, special tax breaks, again, that go disproportionately to the wealthy Americans.
AMANPOUR: Which ones? GEITHNER: Remember, only -- only 30 percent of Americans itemize. And those benefits, even like the mortgage interest deduction that lets people have two homes, pretty expensive homes, those are things, again, if you target them on the most fortunate Americans, they can afford to take a little bit larger share of the burden. They can afford to do that.
AMANPOUR: The IMF, and there's the meeting this weekend, has basically said that the United States is not doing enough right now to attack its deficit problem, and that dramatic measures, drastic measures should be taken.
Are you going to take any more drastic measures? I mean, they're complaining.
GEITHNER: We -- I think we all agree, and again, it's important for people to recognize, Americans to recognize, that the world is watching us. They want to see, is America up to this.
Of course we're up to this. We can handle this challenge. But it does require that we act. We can't just keep putting this off. We can't get behind this risk. Because then if we do, then the world will lose confidence in us and you'll see growth weaker and Americans will pay more to have to borrow, and more of our savings will have to go to foreign countries. So we have to do this.
AMANPOUR: And yet, your very close ally, Britain, is in a year or more of its austerity program, and the results don't look great. Retail sales are plunging, income looks like it's going down. I mean, that can't give you a lot of confidence, can it, on this austerity program?
GEITHNER: We're in fundamentally different positions, the U.K. and the United States. Their challenges are much greater challenges. They had a much larger hole to dig out, a much larger financial system they had to reform, and they have a much harder road ahead of them.
We're in a fundamentally stronger position. And although we have to move too to reduce our deficits, I'm very confident, if we do it in a balanced way, that you can do this without putting at risk this expansion. You have to do it gradually.
And again, this is why you want to do it over a multi-year period of time.
AMANPOUR: A lot of views this week, a lot of disappointment among many people that many of those big bankers and financial institutions responsible for the financial crisis have still not been prosecuted, punished.
I mean, how does that bring confidence to the American people?
GEITHNER: Well, let me just say, I agree that you saw a -- really a huge loss of confidence in the average American in our financial system and how it works, whether it protects them from abuse, whether it's a fair system with the kind of integrity you need. And financial systems require trust and confidence. And you saw in this crisis just terrible mistakes, devastating loss of confidence.
AMANPOUR: Do you think that some of these people should have been at least prosecuted, punished?
GEITHNER: You know, that's really a question for my colleagues in the enforcement --
AMANPOUR: I know it is. I know it's not your job. But in terms of trying to build confidence in the American people?
GEITHNER: I'll tell you what I think. I think two things are very important. One is, we have to have a more stable system. We have to have a system that provides better protection for consumers and investors, and that's what we're building. That's what Congress passed, and that's really my job, to make sure that happens.
But that is not enough. You also have to have confidence in the American people that our enforcement authorities will hold people accountable, make sure they abide by those rules.
You need both those two things, and we're starting to rebuild that. And I'm very confident that we're going to be -- do a better job and be ahead of the rest of the world in doing that.
AMANPOUR: So you've had a pretty rough couple of years. It's been a pretty thankless job in the -- trying to get out of this recession in a fragile recovery now. Secretaries Clinton and Gates have said they won't be around for a second term. Will you?
GEITHNER: I got a lot on my plate still, and we've got a lot of challenges ahead. And I want to tell you, this is hard, but I believe in this work and I enjoy these challenges.
AMANPOUR: So you'll stay.
GEITHNER: Well, again, not going a -- I'm going to keep at trying to fix what's broken here, make sure we're helping get the economy growing and help deal with these long-term challenges.
AMANPOUR: Secretary Geithner, thank you very much, indeed.
GEITHNER: Nice to see you.
AMANPOUR: Thank you.
AMANPOUR: Up next, Tea Party nation. Sarah Palin and Donald Trump rallying the faithful across the country this weekend. The movement has already taken Congress by storm and changed the conversation here in Washington. We've gathered a group of Tea Party freshmen to ask whether they've only just began the fight.
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SARAH PALIN, FORMER ALASKA GOVERNOR: We didn't elect you to just stand back and watch Obama redistribute those deck chairs. What we need is for you to stand up, GOP, and fight.
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AMANPOUR: Sarah Palin at a Tea Party rally in Wisconsin this weekend. Her message to the movement's representatives in Congress, don't sell out your principles. Those principles -- small government, big cuts -- are setting the agenda in Washington these days.
Tea is the drink of choice on Capitol Hill and as John Donvan tells us, it may be the flavor of the month at the White House too.
JOHN DONVAN, ABC: Tea? No, that would be water, and there you have beer, champagne, soda pop, a nice, cold smoothie, a shot of orange juice, and yes, OK, he also drinks tea. In fact, it seems he has had to swallow quite a bit lately. So much so, that this week, when the president at last put forth a budget proposal of his own, it sounded somewhat tea-stained in places.
OBAMA: We have to live within our means. We have to reduce our deficit.
DONVAN: A message not at all like the theme he rode into office. Remember?
OBAMA: I do believe the government should do that which we cannot do for ourselves. That's why I'm going to create a $25 billion fund to help states and local governments pay for health care, pay for education.
I do think it's important for the federal government to step up.
DONVAN: But then some new folks came to Washington, and they have really changed the conversation. The 59 members of Congress sworn in this season who are not only Republicans, but who are also marching behind this, and the movement that has claimed it for itself, the Tea Party, which wants smaller government and lower taxes, whose supporters a mere two years ago were only really just getting acquainted with each other when they took to the streets. A lot of folks who didn't do politics before, and now some of them are in politics.
He owned a pizza parlor. He's a dentist from Washington state. A funeral director from Florida. A nurse. And he, a car salesman from California.
They came in saying they wanted to change things. Wait, that was his line.
OBAMA: That's what change is.
DONVAN: But the Tea Party folks may, may have a better shot at that, because their obvious distaste for the politics of compromise -- that is what changed the conversation, and almost shut the government. And yet when a deal was reached that cut the budget by $38.5 billion, which is historic, they had wanted 100 billion. That's why many of them defied their own Republican House Speaker John Boehner, voting against a deal that he reached so that then he needed a lot of Democratic votes to pass it, raising the question who is leading whom? They of course are still going to want big tax cuts, and that's going to be a fight, because he also talked this week about government that is worth saving. And said.
OBAMA: There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.
DONVAN: Because, to him, that tea sounds like Kool-Aid, and that he's not drinking.
I'm John Donvan for "This Week" in Washington.
AMANPOUR: And joining me now to discuss lessons learned and the road ahead, four Tea Party stars from the House freshman class. All of them new to elected office. With us from Florida, Congressman Allen West. From North Carolina, Renee Ellmers. And here in the Newseum with us, Congressman Joe Walsh of Illinois, and Steve Southerland, also of Florida.
Thank you all for joining us. Thank you, and welcome back to the program.
Steve Southerland, let me ask you first. You all came to Washington to tame that deficit, to cut spending. Now this latest battle is going to be about raising America's debt ceiling. Are you going to vote for that? You heard what Secretary Geithner told me, that it would be catastrophic if that didn't happen?
SOUTHERLAND: Sure. Well, let me say this. You know, they are pushing for a single subject vote, a clean debt ceiling vote, and I'm not for that.
Look, we've got to have some guarantees going forward, caps and some guarantees that if we raise that debt ceiling, that we get this economy on a trajectory to where we service our debt, like any banker. A banker wants to know--
AMANPOUR: So you can see raising -- you could see voting for it if something was given to sweeten it?
SOUTHERLAND: Well, it's going to have to be a lot more than just sweetening it. I mean, it's going to have to be concrete. And I've yet to see that from the administration. They talk about the necessity of raising the debt ceiling, yet they've proposed nothing regarding guarantees that we can satisfy our debt long-term.
AMANPOUR: They have talked about trying to reach some kind of targets and some kind of compromise around what both sides are talking about now, which is cutting spending.
AMANPOUR: Congressman Walsh, do you believe when Tim Geithner says, and also the chairman of the Fed, Ben Bernanke, that not raising it could be a recovery-ending mistake?
WALSH: I wish -- Christiane, I wish they got as excited and animated about all of this debt we're placing at the feet and on the backs of kids and our grandkids. That's what sent us here. Look, look, business as usual in this town is no longer going to exist. We were sent here -- the American people sent us here, because in a large way they recoiled against a lot of this spending the president was putting upon us.
If you're going to ask this Congress to support a raise in the debt ceiling, there has got to be something structural on this spending site. Because we've got to cut up this credit card.
A couple examples. I sponsored two weeks ago a balanced budget amendment in the House. Something very structural that would make this town do what households do, what a number of states do. It's going to have to be tied to something pretty major like that.
AMANPOUR: So I asked you about the stakes that Tim Geithner raised. Congressman West, do you believe it when the secretary of the treasury, the chairman of the Fed, say that the stakes are this high?
WEST: Well, one of the things, having served 22 years in the United States military, I don't believe in leadership by fear and intimidation. I think that leaders have to come up with viable solutions, I agree with one of the things that Joe Walsh just brought up, we need to have a balanced budget amendment.
We need to put in spending control measures, such as a cap on federal government spending. I say 20 percent, because that's historically a good spot to be at. Right now federal government spending per the GDP is about 24 percent, and the president is going to take it up to 25 or 26 percent.
But I think also now is a great time where we can cut our corporate business tax rate in half, bring it from 35 percent down from 22 to 20 -- 20 to 22 percent. Because there's a lot of capital just sitting out there we could use to invest in long-term sustainable job growth.
But the most important thing, we should have some type of trigger mechanism so that when you reach a certain percentage of getting close to this debt limit, there are automatic spending cuts that come right in.
This is not about a debt ceiling being raised. This really comes down to debt suggestion, because this is about 73 or 74 times we've done it. We have got to be fiscally responsible.
AMANPOUR: All right.
WEST: And right now we're not showing that to the American people.
AMANPOUR: Let me ask you about the Paul Ryan budget, which all of you voted for this week. Congresswoman Ellmers, the House did pass that budget and everybody voted for it, as I said. And it includes a radical restructuring of Medicare, essentially converting it to a voucher system, sort of privatizing it.
Now the Congressional Budget Office estimates that the average senior will then have to end up paying an extra $6,000 or more out of their own pocket, I mean, how do you think that that will sit with the voters? With the American people?
ELLMERS: Well, let me just say, Christiane, that, first of all, as a nurse, you know, Medicare is an issue that we absolutely have to deal with. And, as you know, you mentioned in the Ryan budget that this issue is going to be addressed.
It is not a voucher system. Basically what we will be doing is allowing seniors to be able to make the choices for their health care, the same that we in Congress are doing. It's the very same basic plan. And it actually saves money. It saves money in Medicare over time and it actually increases the coverage, but at the same time, it also increases coverage for those in the low income areas as well.
And so that is why I am very much for the Ryan budget. I think it answers all of the issues that we've just been talking about. And we can go...
AMANPOUR: Let me just ask you, because you raised the issue that it provides you the same -- it provides people the same sort of benefit that Congress has. You know, obviously, there are big differences between members of Congress and the very poor.
And most economies -- economists, whether you're quibbling over numbers, do actually say that seniors will not be able to keep up with the rising costs, they will have to pay out of their pocket. I mean, I guess I'm still asking, is that fair?
ELLMERS: Well, as it is -- no. Actually that is not correct. And, as it is right now, if we do not address Medicare, as it is, it will be -- it will not be there for myself, it will not be there for our children or our grandchildren. And we have to address the issue. And we are. And the Ryan budget does that.
And it actually improves upon all of those areas of unsustainability that we're faced with. So, you know, the numbers play out. AMANPOUR: OK.
ELLMERS: And I'm very much in favor of it. Again, we must save Medicare. We have a spending problem in this country, not a revenue problem.
AMANPOUR: All right. Well, you raised revenue problem. Let me ask you too, congressmen Walsh and Southerland. The Ryan budget does not talk about raising revenues. President Obama's proposal does, eliminating tax cuts on the wealthy.
Can you really sustain what everybody is calling for just by cuts in public services? Doesn't there need to be revenue-raising mechanisms?
SOUTHERLAND: Go ahead, Joe.
WALSH: Christiane, you raise revenue by growing the economy. And everything this president has done the last two years has gone against that. You get taxes and regulations off the backs of businesses so that revenues can increase.
AMANPOUR: I know -- I know that that is your position. But there's so much evidence, even going back to Ronald Reagan, where he did tax cuts and in fact the debt increased, and then he had to make tax increases. I mean, can you really cut public spending by that amount and just expect to balance the budget?
WALSH: But -- and Steve will say this, in the '80s, government revenues went up. We didn't cut spending. Revenues went up in the '80s. Every time we've cut taxes, revenues have gone up, the economy has grown.
Look, Christiane, I've said this before, the president of the United States ought to be ashamed of himself. And I don't know why your profession hasn't gotten on him more. Two months ago he presents a budget and doesn't even talk about entitlement reform. And then all of a sudden last week he gets a redo?
The Republicans are leading on this, perfectly prepared to take whatever political hits we have to take, because the crisis is so severe. I wish he would be a part of this.
AMANPOUR: But that is an interesting point you made, about taking the hits that you have to take, because, for instance, there are all sorts of ads now, going out about Medicare, and being careful about it.
You know, the Republicans actually tried to put those ads out in 2010 and did get seniors on their side. So you're not concerned that these cuts and this restructuring of Medicare is actually not going to be good for you at the voting?
SOUTHERLAND: Well, listen, great leadership understands that sometimes you're going to take hits. And you don't make this decision -- you don't make decisions in the best interests of American people and expect to be applauded for everything you do.
Look, we have dug ourselves a hole and the only way that we can dig ourselves out or climb out of this hole is to make some very difficult decisions. I've said, numerous times here on the Hill, I may lose 2012, but I'm not going to lose me in this process.
And so we've got -- if we care about these programs, we have to make decisions now in order to save them.
AMANPOUR: All right. Well, thank you very much indeed, all of you, for joining us.
And up next, our powerhouse "Roundtable," with insight from Alice Rivlin, the Clinton budget director who helped Paul Ryan with his budget; political analysis from Matthew Dowd; President Obama's close friend, Massachusetts Governor Deval Patrick; and our own George Will. That's ahead.
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OBAMA: These are the kinds of cuts that tell us we can't afford the America that I believe in and I think you believe in. I believe it paints a vision of our future that is deeply pessimistic.
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REP. PAUL D. RYAN, R-WIS.: What we got was a speech that was excessively partisan, dramatically inaccurate, and hopelessly inadequate to addressing our country's pressing fiscal challenges.
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AMANPOUR: An acrimonious week of punch and counterpunch in Washington, President Obama and House Republicans outlining dramatically different visions for the size of government and its role in American life.
This conversation will be the foundation of next year's election.
And joining me today to make sense of it all, ABC's George Will; Alice Rivlin, Bill Clinton's former budget director, who has worked closely on Medicare overhaul with Congressman Paul Ryan; Matthew Dowd, former chief political strategist for George W. Bush; and President Obama's close friend, Massachusetts Governor Deval Patrick. His new book is called "A Reason to Believe."
Thank you all for joining me today.
PATRICK: Good morning.
AMANPOUR: Good morning to you all.
George, the president came out and presented his vision. So the battle is enjoined, as we saw.
Is this a beginning to a great compromise to where this country needs to be?
WILL: I don't think so, not yet. He didn't present an alternative budget. I can't -- maybe Alice can remember this -- I can't, in 40 years in Washington, remember a president submitting a budget and two months later saying, "Oh, never mind" -- say a Mulligan, in effect.
So, in effect, he has not yet presented other than a critique of Paul Ryan's budget. Now, both parties are clearly making a wager. The Republicans are wagering that the American people mean what they say and that it's different this time. The president's party is wagering that they don't, that they're still rhetorically conservative but operationally liberal.
RIVLIN: I thought the president did a good job. He laid out a Democratic alternative. He made clear that he is serious about all parts of the budget, serious about getting the deficit and the debt under control and that that has to include the entitlements, Medicare and Medicaid; it has to include defense as well as discretionary spending cuts, and it has to include the revenue side.
The main problem with Paul Ryan's budget is he thinks we can do it without any more taxes, and indeed by extending tax cuts to upper- income individuals. And that means very dramatic, draconian cuts, in spending, especially if you leave out defense.
AMANPOUR: I'm going to get to that right in a second.
But I do want to ask you, because so many people -- and you're so close to President Obama, Governor Patrick. So many people have complained that, even on the big issues he cares for, he hasn't really gone into the fight, and, sort of, outsourced them to allies and in Congress. Do you think this now means he's going to fight for what he believes in?
PATRICK: Well, I thought the speech, which I didn't see -- I've read -- was a real leadership moment. I think the president took us to the place where we really ought to be debating. It's been the subtext for a long time. And that is, what kind of country do we want to live in?
That's the underlying questions in terms of the budget and the deficit and health care as well, for that matter. And that's what we should be debating. He laid out a clear vision of the kind of country that he believes in, that I believe in, I think most Democrats, and for that matter, most Americans believe in. And it's a -- it's a fiscally responsible but also mutually responsible kind of community. And I support that.
DOWD: I -- to me, this whole budget fight demonstrates a complete abdication of responsibility by both political parties in this. Both political parties aren't willing to tell the truth to the American public in different ways.
The Republicans aren't willing to tell the truth to the American public that we don't have enough revenues to pay for everything that we have. The Democrats are unwilling to tell the truth to the American public that we cannot live anymore with the entitlement programs as they exist today. To me, the president -- he gives a good speech; he does all that; Republicans make these grand announcements, but in the end, they are unwilling to tell the American public the truth.
They keep telling the American public they can have it all and they don't have to pay for it. To me, the difference between the two political parties today is you have a Democratic Party that believes in big government that shouldn't be paid for, and you have a Republican Party that believes in a slightly less big government that shouldn't be paid for. That's the problem.
AMANPOUR: Let's go back to the Paul Ryan budget, which you worked on elements of. I just -- I know it's not exactly as it turns out.
RIVLIN: Oh, it isn't -- it isn't at all. I worked with one element. Paul Ryan and I have worked together on a concept for Medicare reform called premium support. It's very much like what they do in Governor Patrick's state. But the form in which Ryan put it in his budget was not the form that I support -- much, much lower and much more drastic cuts for seniors.
But I don't support the Ryan budget. I think it illustrates how much you'd have to cut if you don't raise taxes and you don't cut defense.
AMANPOUR: So you heard the argument with the Congresspeople, just in the previous segment, when they were talking about Medicare. And the whole idea is that, apparently, according to economists, that the elderly would have to contribute more of their own, under this reform. Is that sustainable?
RIVLIN: Some of the elderly will have to contribute more, particularly those in upper-income groups. Medicare, in its present form, is not sustainable. We -- it is growing faster than the economy is growing and faster than we can afford.
So we have to have a reform of Medicare, phased in gradually. It's not going to throw granny in the street. And I'm granny.
But it's got to reduce the rate of growth of Medicare. Now, the president's for that, too. He just has a different way of doing it.
PATRICK: Christiane, may I just build on that? Because I want to come back to Matt's, I think, really important points, although I want to differ with your -- with your outcome.
This notion that -- that the cartoons of the party, of our respective parties, don't talk squarely to the American people, I think, was exactly what the president was going at in his remarks this week. He talked about the importance of making Medicare and Medicaid sustainable. He has a different strategy for doing that than the Paul Ryan budget. He talked about the importance of additional revenue and shared sacrifice. He talks about and he has supported spending cuts, and there's direct evidence of that. So I think that what the president is doing is exactly what Matt, if I may say, Matt, if you don't mind...
... is suggesting hasn't been done for a long, long time.
AMANPOUR: Let me ask you...
WILL: Alice has uttered two inconvenient truths here that I'd like to hear from the president. One is we've made promises we cannot keep; that is, it's unsustainable on its current path. And the other is that people are going to have to pay more. That's the point.
We have a 12-cent problem. 12 cents is the portion of every health care dollar that the person receiving the health care pays, the other 88 percent paid by someone else. When Jack Kennedy was president, it was 47 percent. People had more skin in the game and had a whole different approach, therefore, to the health care system.
AMANPOUR: But you say people have to pay more. But, again, we get back to this revenue-raising, taxes and all the rest of it. I mean, it looks like people are willing to pay more for the things that they believe in and that they really want.
DOWD: The problem -- the problem we have is the American public is always willing to pay more for effective, efficient government. They're always willing to do that. But the American public going to have a very difficult time believing that tax increases at a time where they don't trust that government does the job well; they don't trust that they know how to keep their pocketbook balanced, that they don't know what to do when the government doesn't have a plan for things to do. Until you prove to the American public that they should trust the federal government, it's going to be very difficult to raise taxes.
AMANPOUR: We're going to break and -- take a break and come back. And up next, Trump turns up the heat.
(BEGIN VIDEO CLIP)
TRUMP: Whether you liked him or not, George Bush gave us Obama and I'm not happy about it. I'm not happy about it.
We have a disaster on our hands. We have a man right now that almost certainly will go down as the worst president in the history of the United States.
(END VIDEO CLIP) AMANPOUR: He's ahead in the polls, but does he have the ghost of a chance? The roundtable take on the Donald.
AMANPOUR: Twenty-twelve heats up with Donald Trump on the trail and a hot-mike hiccup for President Obama.
AMANPOUR: More with our "Roundtable" next.
AMANPOUR: Donald Trump wants you to know that he has the brains, the bucks, and the bluster to take on President Obama. He's telling anyone who asks him. But the question remains, is the celebrity billionaire for real? And if he is, does he have a chance?
(BEGIN VIDEO CLIP)
DONALD TRUMP, REALITY TV STAR: If I decide to run, and if I win, I will not be raising taxes but will be taking in billions of dollars from other countries, and will be creating vast numbers of productive jobs, productive. Productive. And will rebuild our country. The United States will be great again.
(END VIDEO CLIP)
AMANPOUR: And welcome back to our "Roundtable." So quickly, does Donald Trump have a chance? Is this a real candidacy?
DOWD: He has a chance, just like everybody has a chance. But the ability for him to go from celebrity to politician, yes, I think is going to be very, very, very hard. I don't think -- I think in the end, his best day happened the day he started this process and everything else from there will be downhill.
AMANPOUR: And while the candidates entered the race quite quietly, Mitt Romney. And he's busy trying to run away from his health care program. But as governor of Massachusetts, it's working, isn't it?
PATRICK: It's working brilliantly. We are -- over 98 percent of our residents have health insurance today, over 99 percent of children. It has added 1 percent to state spending. And we've got our next chapter, which is to bring the system costs down, and get those costs passed on to rate-payers.
But, you know, as an expression of our values in Massachusetts, that health is a public good, and that everyone deserves access to care, we're there. And we have got more to do, but really proud of it.
AMANPOUR: In the "new Medicaid," as it has been laid out under the Ryan proposal, it gives big block grants to the states, right? Is that good? Will that help? Will that help somebody like Governor Patrick?
RIVLIN: Only if it has conditions on it. Now I'm not worried about Governor Patrick's state, but there are certainly states that would run away from their responsibilities to low income Americans.
So, if one were to go the block grant route on Medicaid, one would have to have very strong controls on the amount of spending, and that would not allow states to just say, well, we're going to forget about poor people.
AMANPOUR: And let me get to another big issue that came up this week. Secretary Clinton talked about what's going on in the rest of the world, in the Middle East and elsewhere, saying, unless one's careful, this revolutionary fervor could turn into a mirage in the desert.
Right now, the United States is locked in literally combat to get Gadhafi out. There are all sorts of reasons that people are saying the United States should really commit its major assets, for instance, tank-busting, helicopters, the kinds of planes and aircraft that they need in order to break the stalemate. Why wouldn't they do it?
WILL: Because that's not why we're there. It seems almost (ph) niggling to call attention to the fact that we went in to protect the people of Benghazi.
AMANPOUR: Right. But there's a medieval siege around Misrata right now.
WILL: Christiane, this is the 50th anniversary of the Bay of Pigs invasion, I never thought I'd live to see a more feckless use of American power, but lo and 'hold, you live long enough, you get to see something like Libya.
We have no coherent exit strategy because we have no coherent objective, other than to get someone else to overturn the existing Libyan government so that people we don't know can take over.
DOWD: To me, the big problem is the difference between Egypt and Libya, is that in the history of the world, externally imposed by the military democracies never work. We've basically seen that in Iraq. We're bogged down in Iraq. We've seen that in the history of this country. When the people do it themselves, and rise up themselves, and do it themselves, it works. When it's imposed militarily from the outside, it usually doesn't work.
AMANPOUR: But does it not concern you? And here we are -- and the president has committed himself now. To draw back right at the moment where they could actually break the stalemate, is that smart?
DOWD: Well, I think the president in a situation where he has got our country involved in two wars. He didn't bring him there, but he is involved in two wars. We've now had -- we're exercising the only -- we're the only military power that exercises across the world.
We have very little resources to apply ourselves all over the world in many ways after the discussion we just had about the budget deficit, when the military needs to take on some cuts, it's very hard for him to make a decision to impose the military.
AMANPOUR: So let's get back to the budget deficit. And we heard what Tim Geithner talked about. People who do not vote to raise the debt ceiling, he said, will own the catastrophe that follows. Do you think that it will be raised and there will be some kind of compromise reached on that?
RIVLIN: I do. I think it must be raised for the same reason as the secretary said, it will be a disaster not to. But we do need to come together, the Republicans and the Democrats, around a plan or a plan to get a plan, a plan to force a plan. And I have a great deal of hope for the six senators, the so-called "gang of six" in the Senate, three Republicans, three Democrats, very serious folks, ranging from Dick Durbin from Illinois, who is a serious liberal, to Tom Coburn from Oklahoma, a serious conservative.
And they were both on the president's commission, both signed it. They understand, and their colleagues, and I think a lot of others in the Senate, that we have to come together, and reach a compromise.
AMANPOUR: And on that note, we're going to continue this conversation in the "Green Room." And when we return, we'll take you inside the revolution with a special "Reporter's Notebook" from Terry Moran, on the dramatic changes transforming the Arab world.
AMANPOUR: That was Cairo's Tahrir Square, jubilation just after Hosni Mubarak resigned after ruling his country with an iron fist for 30 years.
I spoke with Mubarak in the final days of his rule. Now he is gone, but how much have things actually changed? Across the region the uprising continue, in Syria, Bahrain. While in Libya, Gadhafi is still hanging on after weeks of NATO air strikes. What does it mean for the future of the region?
Secretary of State Hillary Clinton offered a sobering warning this week.
(BEGIN VIDEO CLIP)
SECRETARY OF STATE HILLARY RODHAM CLINTON: When we meet again at this forum in one year, or five years or 10, will we see the prospect for reform fade and remember this moment as just a mirage in the desert?
(END VIDEO CLIP)
AMANPOUR: So, will dreams of democracy slip into the sand? ABC's Terry Moran filed this dispatch from the revolution.
(BEGIN VIDEOTAPE) TERRY MORAN, ABC NEWS CORRESPONDENT: This was no mirage, it was one of the most stirring and most hopeful events of resent years. A people rising. A dictator falling. A nation, reaching for a new era of freedom. It all seemed so real.
Two months later, Cairo, a city that has seen so many centuries of rulers, and revolutions and conquers, Cairo has returned to its ancient rhythms and ways, but a shadow has fallen across the city, across the hope of those heady revolutionary days.
Eight days ago, violent crashes erupted in Tahrir Square which was the center of the region which was the center of the revolution that toppled President Hosni Mubarak, but this time protesters were targeting the military government that took hit place and promised a transition to democracy. Two were killed, dozens injured. It was an ominous sign of increasing frustration with the change of pace here. And there are other disturbing signs.
He was charged with insulting the army.
MAGED MAHER, ACTIVIST: Yes. Criticizing the army, most of time, considered as insulting.
MORAN: But I thought you had a revolution here?
MAHER: I thought the same.
MORAN: Maged Maher is an activist and a good friend of the imprisoned blogger, Michael Nabil, whose case has become a human rights flash point here.
Nabil was hauled to a military court last month and sentenced to three years in prison for what he wrote.
UNIDENTIFIED MALE: We're not free yet. We went to streets and we shouted loudly that we want freedom. If people go to jail, because of expressing an opinion, so we don't have it yet.
MORAN: So a question hangs over Egypt and the answer to it matters to the whole world.
Are you free today?
UNIDENTIFIED MALE: We are free. And we are to create the system now.
MORAN: Abdel Rahman Yousuf (ph) is a poet. And he was one of the more prominent activists in the revolution.
We first met him when he was camped out in Tahrir Square during the protests. We returned to the square with him on Friday. A few protesters were there, urging national unity. The biggest security presence was the traffic cops.
And we found Yousef (ph) is still cautiously optimistic like so many Egyptians we met. UNIDENTIFIED MALE: We are free people but we want to be a free nation.
MORAN: It matters so much because Egypt with 85 million people and ancient culture have long been the center of gravity of the whole Arab world. The fall of Hosni Mubarak here helped to light the fires of revolt in country after country.
Gas prices, the dangers of terrorism, relations between Islam and the west, it's all riding on these revolutions. And it turns out, revolution is hard and tricky work, even, perhaps especially in Egypt.
The real question in this country is did they have a revolution or a coupe? The military has power but so do the people and the protesters here. And the situation right now is a delicate, sometimes tense balance between the guns of soldiers and demands of the people.
WAEL GHONIM, GOOGLE EXECUTIVE: I don't think Secretary Clinton was right about the comment of the revolution becoming a mirage.
MORAN: Wael Ghonim, an Egyptian executive with Google is a leader. He helped organize it on Facebook and other social media and he was imprisoned by Mubarak's regime during the protests. Today he too wants to give the military the benefit of the doubt.
GHONIM: The army is actually so far is trying to protect the revolution. They're doing mistakes just like any system in the world. Plus this is completely new to them. But at the end of the day, they have been showing a great deal of commitment towards protecting the revolution.
MORAN: The military government has scheduled elections later this year and the generals did seem to respond to the people's demand this week when Mubarak himself and two sons were arrested for corruption and other charges.
So, is Egypt heading towards true democracy or is it a mirage?
There are no guarantees here, but the people are rising and there is no going back.
For This Week I'm Terry Moran in Cairo.
AMANPOUR: And we will keep monitoring those stories. And when we come back, a moment in history, 50 years since an iconic turning point in the Cold War. A milestone for a perpetual thorn in America's side.
AMANPOUR: With attention focused on falling dictators across the world, a dictator right next door marks a milestone for endurance. There are parades and commemorations in Cuba this weekend on the 50th anniversary of the Bay of Pigs invasion, a turning point of the Cold War. ABC's Jim Sciutto is in Havana and you can find his full report online at abcnews.com/thisweek.
That's it for our program. You can follow me online on Twitter and abcnews.com. For all of us here at This Week, thank you for watching and see you again next week.