'This Week' Transcript: Mayor Rahm Emanuel and Sen. Kelly Ayotte

Mayor Rahm Emanuel and Sen. Kelly Ayotte are interviewed.

NEW YORK, July 15, 2012— -- (BEGIN VIDEO CLIP)

STEPHANOPOULOS (voice-over): Good morning, and welcome to "This Week." Down and dirty.

OBAMA: When you run for president, everything's called into question.

ROMNEY: Because he sure as heck ought to say he's sorry.

STEPHANOPOULOS: Felony, dishonesty. Charges fly in the presidential campaign's nastiest week yet.

(UNKNOWN): When a president doesn't tell the truth, how can we trust him to lead?

CUTTER: Either Mitt Romney was misrepresenting his position, which is a felony, or he was lying to the American people.

STEPHANOPOULOS: Are these debates fair game or distractions from the big issues? Which side is winning? And how much will voters care come November? Questions for our headliners, the former White House chief of staff and Obama campaign chairman, Chicago Mayor Rahm Emanuel, and New Hampshire Senator Kelly Ayotte, a top Romney surrogate and potential running mate.

Plus, outrage over those Olympic uniforms made in China...

BOEHNER: You think they'd know better.

STEPHANOPOULOS: And the cover-up of sexual abuse at Penn State.

(UNKNOWN): Sandusky was allowed to continue with impunity.

STEPHANOPOULOS: Those topics and all the week's politics on our powerhouse roundtable, with George Will, Donna Brazile, Matthew Dowd, and that political odd couple, James Carville and Mary Matalin.

ANNOUNCER: From ABC News, "This Week" with George Stephanopoulos. It's your voice, your vote. Reporting from ABC News election headquarters, George Stephanopoulos.


STEPHANOPOULOS: Hello again. Everything is happening at hyper-speed in this campaign. Only July, and the Obama campaign has already spent $100 million on campaign ads, most of them going after Mitt Romney. The Romney campaign and its allies have spent about the same, and their latest ad says that the president is lying about Romney's record at Bain Capital. Take a look.


(UNKNOWN): When a president doesn't tell the truth, how can we trust him to lead? The Obama outsourcing attacks, misleading, unfair and untrue. America expects more from a president. Obama's dishonest campaign, another reason America has lost confidence in Barack Obama.


STEPHANOPOULOS: And with that, let's get a response from Obama's campaign chair, the former White House chief of staff, current Chicago Mayor Rahm Emanuel.

Good morning, Mr. Mayor.

EMANUEL: Good morning, George.

STEPHANOPOULOS: You know, Governor Romney himself went even farther than -- than that ad in an interview with ABC's Jon Karl on Friday. He demanded that President Obama apologize for what he called Chicago-style politics that demean the presidency. Any chance he'll get one?

EMANUEL: Well, first of all, you know, it's interesting that -- no, I don't think so, because Mitt Romney said Bain Capital is his calling card for why he should be president. He doesn't talk about Massachusetts as governor. He doesn't talk about any other piece. He says, "I created jobs at Bain Capital."

And everything in that is documented by newspaper clips. And it talks exactly, in President Obama's campaign, about what Mitt Romney's record is in the sense of outsourcing jobs and exactly what the record was at Bain Capital.


STEPHANOPOULOS: But, as you know, what he -- what he says is that that outsourcing occurred after 1999 when he left Bain Capital. I know that you all point to that SEC filing that says he was the owner and chief executive...

EMANUEL: But it's not just -- George -- George, you say point to it. He signed it. He said chairman. He said CEO, sole shareholder, president. You can't -- as president of the United States you can't have a sign on your desk that says, "Gone fishing." You can't put that on that desk. It's basically the buck stops there.

You can't say to the SEC, "I was the CEO, chairman and president, but I'm not responsible. I'm not accountable." That's what he likes you to think. But then he says, "I am -- the reason I should be president is Bain Capital."

Well, let's look at it. And then when you look at it, it's not the record presented. And those are the policies that led to jobs going overseas rather than manufacturing jobs. And when he was...

STEPHANOPOULOS: Do you really...

EMANUEL: And he has already said -- and he told people, manufacturing is not part of our future. Five hundred thousand jobs have been created in the manufacturing sector in the last three years. It is part of our future. And if you're going to build and make sure the 21st century is again the American century, you can't take an entire sector of the economy...

STEPHANOPOULOS: But do you really believe...

EMANUEL: ... and wipe it clean, like he wanted to do with the auto industry. What's that?

STEPHANOPOULOS: Do you really believe, as Stephanie Cutter suggested just the other day, that Mitt Romney might have committed a felony when he signed those SEC reports?

EMANUEL: I think there's -- well, first of all, Stephanie cited the law, and it's very clear. Either the filing with the SEC is accurate and his personal financial disclosure is not honest, or that's honest and the SEC isn't, but both can't be accurate. Both cannot be accurate depicting a time where he said he was doing one thing or another. It's just not possible.

STEPHANOPOULOS: He says it was just a formality...


STEPHANOPOULOS: ... and he was untangling his -- during the time he was untangling his involvement with Bain.

EMANUEL: He has -- George, he has made Bain Capital his calling card for the presidency. And when you look at it, it doesn't measure up to what he claims. And, number two, on both of those filings, one is accurate and one isn't, and they both have consequences when one is not accurate. And that is what she stated.

And the second thing is, give it up about Stephanie. Don't worry about that. What are you going to do when the Chinese leader says something to you or Putin says something to you? Going to whine it away (ph)? You cannot do that.

And as Mitt Romney said once to his own Republican colleagues, stop whining. I give him his own advice. Stop whining. Defend -- if you want to claim Bain Capital as your calling card to the White House, then defend what happened to Bain Capital and what happened to those jobs that went overseas, those jobs that were actually cut and eliminated, the companies that went into bankruptcy.

And the very companies at Bain that went into bankruptcy while Bain was still getting paid, same philosophy that led to him advocating that the auto industry go bankrupt. The president of the United States said, no, we're going to defend Chrysler, we're going to defend G.M., and today America's auto industry is thriving, not in bankruptcy, as Mitt Romney had recommended.

STEPHANOPOULOS: The campaign has also been pushing...

EMANUEL: And that is -- and that is the facts.

STEPHANOPOULOS: The campaign has also been pushing very hard for Mitt Romney to release more of his tax returns. He says the public has everything they need to know to understand his finances. And we do know that Mitt Romney made a lot of money. We know he paid a relatively low tax rate. What more will the returns tell us that we don't know?

EMANUEL: George, just two points here that I think are really important. First of all, Mitt Romney's own father said you shouldn't release one year. And already he has released -- in my view, he's released one year. Let's take a step on two points...

STEPHANOPOULOS: He says he's going to release his second.

EMANUEL: ... one on -- OK, transparency and what that says. He has released only one year. To the McCain campaign, he released 23 years. And he's telling the American people, I'm not going to give you what I've given John McCain's people in 2008. And when he gave them 23 years, John McCain's people looked at it and said, "Let's go with Sarah Palin." So whatever's in there is far worse than just the first year.

You know, the campaign -- the Romney campaign isn't stupid. They have decided it is better to get attacked on lack of transparency, lack of accountability to the American people versus telling you what's in those taxes.

STEPHANOPOULOS: So what do you think is in there?

EMANUEL: Because they're not enjoying this. And he can clear this up, just make it public.

Now the second thing, George, he did not just relatively -- he paid 14 percent, about half of what a middle-class family pays.

Second is, you've learned in just one year about the Caymans, about the Bahamas, about Luxembourg, and about Switzerland, all where his tax and different accounts are. His tax -- his tax filing looks more like the Olympic Village than it does like a middle-class family.

And then, third, next four years, the president of the United States is going to have tax reform, and you're going to have to debate it with Congress and shape it. And unless you have his taxes -- and I've seen this in the Oval Office, George -- there's going to be times in which a president of the United States has to make tradeoffs and choices. Will it be a middle-class family's desired to save to send their kid to college or protecting the loophole in the Cayman Islands? Will it be a middle-class family's desire to get a tax credit for a child and help raise him in a middle-class family, or will we protect the Bahamas, Luxembourg, and Switzerland?

STEPHANOPOULOS: So, OK, you've made...

EMANUEL: And those are the tradeoffs in -- George, those are the tradeoffs that are going to come from tax reform...

STEPHANOPOULOS: I -- I get that.

EMANUEL: And in one year, you've already learned -- you've already -- no, this is a big decision. He has fully used what is legal in the tax code, and that's the problem with the tax code. And he has paid a rate...

STEPHANOPOULOS: But he's -- he's actually said that...

EMANUEL: ... half of what a middle-class...

STEPHANOPOULOS: He said he's going to talk for tax reform. I want to move on to what he also says. He says you all are pushing this issue to distract from the president's failures on the economy, desperate facts from a president, he says, who can't run on his record. And our polls do show that almost two-thirds of the American public think the country is going in the wrong direction and disapprove of President Obama's job on the economy.

EMANUEL: And you -- and you -- and, George -- and let's go to two very points. Your very same polls know that President Obama would fight for the middle class and Mitt Romney would not.

And, second, the most critical decision -- one of the most critical decisions made in the last three years about the economy, the industrial manufacturing base of the country, President Obama went one way, to help keep American jobs and to keep them here, the auto industry, saving 1.2 million manufacturing jobs. Mitt Romney let them go bankrupt. Why? That's how he's dealt with companies. He actually gave you his opinion of what he would do to a critical industry.

Our auto industry today is thriving, creating jobs here, and not only in the auto industry, in the supplier industry. And the reason was because the president of the United States would not throw the towel in on the industry...

STEPHANOPOULOS: You've also made -- you've also made the point that...

EMANUEL: ... and Mitt Romney...

STEPHANOPOULOS: ... Mitt Romney is going to be an outsourcer of jobs.

EMANUEL: And that's a critical economic decision.

STEPHANOPOULOS: I get it. You've made that point. You've also said he's going to be an outsourcer of jobs, but what Romney says in return is the president hasn't done enough to stop outsourcing of jobs from going overseas. And even Democrats have criticized part of the stimulus programs that ended up funding foreign companies. Take a look.


SCHUMER: Since this program began, 79 percent of the $2.1 billion in stimulus grants awarded through it went to overseas companies.

BROWN: Can you imagine the Chinese Communist Party passing a stimulus package and importing -- importing goods from the United States?


STEPHANOPOULOS: Outsourcing has also increased over the last three years. Doesn't it undercut the president's argument that Mitt Romney would be the outsourcer-in-chief?

EMANUEL: No, I mean, here's the thing. The fact is, the stimulus -- I actually opened up a facility here in Chicago. A health care facility was built with stimulus dollars and it now is a health care facility on the west side of the city in North Lawndale, and it's a health care facility in a poor area, and it created jobs. And I could tell...

STEPHANOPOULOS: But some of the funds did go overseas, as those Democrats pointed out.

EMANUEL: ... we could go -- you know, George, and here -- when we started, America's battery industry, the new batteries, it was only 2 percent of world production. Today, we're close to 40 percent, directly out of the stimulus bill. And those jobs are here in the United States.

Second is, here's the core issue. We just came out of a decade that was a lost decade for the middle class. And in the next four years, you're going -- we're going to have to decide a set of policies and either make sure the middle class have a chance to raise their kids with middle-class economics, middle-class values, save for their college educations, save for their retirement, pay for health care, and own a home.

And the question is, who -- what president in that Oval Office will hear the voices, the concerns, and the interests of the middle class or hear the other interests, the ones that actually have checking accounts in the Bahamas, can use what goes on in the Cayman Islands, can use the loopholes that allow you to move money to Switzerland, and only pay 14 percent, while you're making millions of dollars? And that is the question that will sit in the Oval Office. And which president behind that desk will hear the voices and the interests of the middle class or discard them and actually think about the Cayman Islands and Bahamas?

STEPHANOPOULOS: Let's put that question to the Romney campaign right now...

EMANUEL: And that is a fundamental question to this campaign.

STEPHANOPOULOS: ... we have -- thanks very much, Mr. Mayor. We have Senator Kelly Ayotte, New Hampshire Republican from New Hampshire, representing Mitt Romney this morning. Thanks for joining us, Senator.

AYOTTE: Good morning, George.

STEPHANOPOULOS: Well, you just heard Rahm Emanuel. He says this is a -- these questions about the tax returns and Mitt Romney's tenure at Bain Capital have to be cleared up because they go right to the heart of what a president is going to deal with in the next four years. Your response?

AYOTTE: Well, Mitt Romney's addressed these attacks. They're false and misleading. But, George, what's most disappointing about this is the president, who ran as an inspirational leader, look where we are with him right now. Unfortunately, with these attacks, it shows that he's just a small politician and running on small-ball politics at a time when our country is facing grave, grave challenges.

And no ad is going to decide this election, whether the president likes it or not.


AYOTTE: The economy and jobs are going to decide this election, and his record on that is abysmal. We've had over 40 straight months of over 8 percent unemployment, dismal jobs reports, and his policies have been a failure when it comes to turning our economy around.

STEPHANOPOULOS: But the questions aren't just coming from the president and his campaign, as you know. Just yesterday, the Republican governor of Alabama, Robert Bentley, came out and said he believes that Mitt Romney ought to release more tax returns. Take a look.


BENTLEY: The best thing to do is just get everything out in the open and just say, "Hey, I have nothing to hide, and I'm going to release my tax returns."


STEPHANOPOULOS: Haley Barbour and other top Republicans have said exactly the same things. Wouldn't that help put these questions to rest?

AYOTTE: Well, George, he's disclosed what he has to under federal law, but he's also gone beyond that. He's released his 2010 tax returns. He's going to release his 2011 tax returns. But that's not what the American people are focusing on. They're worried about their own tax returns, whether they can find jobs.

Small businesses, he wants to increase taxes on small businesses. I've heard from them. They're worried about their tax returns. Rising health care costs under the president's health care plan, that's the focus of this election. And that's what the American people are going to decide this election on.

And, George, the most astounding thing that happened this week is the president's statement that the biggest mistake that he made in his first four years was not telling his story well enough. He doesn't understand that it's his policies that are causing problems and why we aren't turning this economy around. And this story's not going to get any better with four more years.

I mean, look at the stimulus that Mayor Emanuel cited. I mean, this -- the president's team represented that we'd be under 6 percent unemployment now, with $787 billion of government spending, and we're over 8 percent unemployment with dismal job reports.

STEPHANOPOULOS: But it's more difficult, as you -- I think you would concede for Mitt Romney to make that case, as long as he's forced to be answering questions about Bain and his tax returns. And those Republicans clearly worry he's going to continue to face the questions if he doesn't release the returns. You're not?

AYOTTE: I -- I think that the difficult thing is for the president to answer to his economic record with the failed stimulus, higher health care costs. And look where we are. He represented that he was going to cut the deficit in half in his first four years. We have trillion-dollar deficits as far as the eye can see. He's added $5 trillion to the debt. And we've had no budget. And look it, right now, one of the things that's most disturbing is our military is going to be decimated in January because of across-the-board cuts, and he's not doing anything about it.

STEPHANOPOULOS: Yet at the same time -- and I have to -- I have to go back to -- clearly, you're saying on the tax returns you don't think it's going to hurt, but he's also facing real questions on Bain Capital.

I want to show the SEC filing that the Obama campaign continues to refer to, back in 1999. It says Mr. W. Mitt Romney is the sole shareholder, sole director, chief executive officer, and president of Bain Capital, and thus is the controlling person of Bain Capital. That's May 2, 2000. We also know from other forms that he attended board meetings of at least one company funded by Bain in that 1999 to 2002 period, that he received at least $100,000 for two separate years as an executive of Bain.

By a commonsense standard, isn't it hard to argue, as Romney has said, that he had no active involvement with the company in the face of documents like that?

AYOTTE: George, by a commonsense standard, we all know that in 1999 he was working 16 hours a day to turn the Olympics around, which he did a great job with. So he's addressed it. He wasn't running Bain Capital then. He was working to turn our Olympics around. It's the leadership that he showed at the Olympics and also as a strong governor. That's what he's going to bring to the White House to turn our economy around.

STEPHANOPOULOS: But how do you explain away that document?

AYOTTE: As opposed to this president who's just -- you know, this has been addressed. Bain Capital has said he wasn't in charge then. And not only that, but we know he had to be working 16 hours a day on the Olympics. We saw what he did with those Olympics. And so he couldn't be doing both at the same time, George.

STEPHANOPOULOS: But then why does he have a document saying he was chief executive officer and president of Bain Capital?

AYOTTE: You know, again, I think this has been addressed, and it's not what this election is about. The president can talk all he wants about this, but it's the economy and jobs that are going to address this election. And on that score, his policies of wanting to increase taxes on small businesses and the failed stimulus, not going back to Washington, on focusing on getting our economy moving, and the fiscal cliff that we're facing at the end of the year, those are the core issues that are going to drive voters in November.

STEPHANOPOULOS: Some top Republicans, Karl Rove, Governor Scott Walker of Wisconsin, have said -- they take your point you were just making about the past, but they say that Governor Romney has to do a much better job of laying out an aggressive detailed agenda for the future. And our Washington Post-ABC News poll shows that that -- that could help him at this point. Right now, more than half of Americans are most concerned about the next four years, and among those Americans, President Obama leads by 23 percent. Does Governor Romney need to put out a more aggressive, bold, visionary agenda?

AYOTTE: I think Governor Romney has a bold agenda moving forward, that he is going to reduce our debt, get our fiscal house in order. He has a tax reform plan, and it's very different from the president's. It's not increasing taxes on small businesses. It's actually simplifying the code and lowering rates.

And so he has an agenda moving forward. And it's very important. He has the experience to get Americans working again. And this president is not focusing -- he's focusing on these small things because he doesn't want to focus on the economy, which is where we need leadership right now in our country.

STEPHANOPOULOS: Finally, you've been mentioned as a possible vice president for Mitt -- running mate for Mitt Romney. Also over the weekend, we had this trial balloon of Condoleezza Rice as a potential vice president. Would she be a good choice?

AYOTTE: She's very qualified. She's excellent. She's tested. Yes.

STEPHANOPOULOS: Senator Ayotte, thanks very much for your time this morning.

AYOTTE: Thanks so much, George.

STEPHANOPOULOS: And coming right up, our powerhouse roundtable takes on the campaign's toughest week yet.


KIMMEL: Mitt Romney turned up in an unlikely place today. He gave a speech at the annual NAACP conference in Houston. Why, I don't know, but -- maybe he confused NAACP with NASCAR, but...

FALLON: President Obama said the biggest mistake of his first term was not telling a story to give Americans a sense of unity. In response, Americans were like, yeah, fixing the economy would have been cool, too, but that story thing...


STEPHANOPOULOS: Plus, that made-in-America controversy.


REID: I think the Olympic Committee should be ashamed of themselves. I think they should be embarrassed.


STEPHANOPOULOS: And outrage over the cover-up at Penn State.


(UNKNOWN): In order to avoid the consequences of bad publicity, the most powerful leaders at Penn State University repeatedly concealed facts relating to Sandusky's child abuse.




SAWYER: The U.S. uniforms were made in China. How could it be?

REID: I think they should take all the uniforms, put them in a big pile, and burn them, and start all over again. If they have to wear nothing but a singlet that says USA on it painted by hand, that's what they should wear.

(UNKNOWN): We should be showing our best, not just athletics, but also best manufactured products.

BOEHNER: You think they'd know better.

(UNKNOWN): This is America. We landed Americans on the moon. We're able to make uniforms for athletes to wear in London.


STEPHANOPOULOS: Well, Ralph Lauren says they're going to have new uniforms for 2014, not this year. We'll talk about that on our roundtable coming up.

First, let me introduce to everybody George Will, as always, Donna Brazile, Matthew Dowd, plus our friends, James Carville and Mary Matalin. James, the author of a new book with Stan Greenberg, "It's the Middle Class, Stupid," going on one of your famous lines, play off of one of your famous lines. We'll talk about that, as well.

But, George, let me begin with this whole argument we saw all week long. The Obama campaign says that Mitt Romney is lying about Bain Capital, they're hiding something with his tax returns. You heard this debate. On the other side, the Romney campaign saying President Obama is trying to distract from a failed record. Who's winning this argument?

WILL: Oh, Mitt Romney is losing at this point in a big way. If something's going to come out, get it out in a hurry. I do not know why, given that Mitt Romney knew the day that McCain lost in 2008 that he was going to run for president again that he didn't get all of this out and tidy up some of his offshore accounts and all the rest. He's done nothing illegal, nothing unseemly, nothing improper, but lots that impolitic. And this is -- and he's now in the politics business.

George, I remember, in 1994 in September, sitting in the Ritz-Carlton Hotel on the Boston Common, talking with the Republican candidate for senator named Mitt Romney, at a time when he was going through a mild version of this, with all of the attacks on his private sector...


WILL: The Republicans have now nominated someone from the financial sector at a time when the financial sector is in extremely bad odor. Hardly a day goes by, the LIBOR scandal, TARP, that conditioned the country to believe that we're allowing the banks to keep profits private and socializing losses, all of this conditions the atmosphere in which this is occurring.

STEPHANOPOULOS: Mary, how do you explain why he hasn't been able to clear this up? And how much is it hurting him? And what can he do?

MATALIN: I don't think it -- with deference and respect to my esteemed colleague here, people don't care where his bank accounts are. They care that they don't have much left in their bank accounts. And as Kelly said, they don't care about his taxes. They care about their own taxes.

This is a different election cycle. He's released 2010. He's releasing 2011. He has full disclosure. There's no tax advantages to being offshore. Debbie Wasserman Schultz, the handpicked Democratic chairman by Barack Obama, has these offshore accounts.

But it is a distraction. And it's not what people care about. And it hasn't hurt him anywhere. The -- the Obama campaign has spent $100 million, half of it in three swing states, three-quarters of it negative, and the dynamic hasn't changed. There's been movement back and forth, maybe some Democrats coming home, but the dynamic has not changed. It's a dead heat. And the advantage on the issues that people care about most are going to Mitt Romney.

STEPHANOPOULOS: On the economy. And especially, James...

CARVILLE: Well, yeah, look, going back to what George was saying, people that live in subtropical climates like Donna and I know that once your furniture is mildewed, you've got to throw it out. It can't come back.

The Bain thing is mildew for Romney. For better or for worse, accurately, inaccurately, or whatever, Bain is being defined as some kind of a part of capitalism that got rid of jobs and offshore accounts and everything else. And it doesn't mean he's going to lose the election. The economy could -- he could still win it there. He could still win it with other things, but Bain...

STEPHANOPOULOS: So there's nothing he can do now? Is that what you're saying?

CARVILLE: Bain is going to be a net loser for Romney between now and the end of the campaign. I think the opinions have set in. I think the furniture -- the Bain furniture is sort of mildewed. I don't -- I'm not saying that that's the end of -- end of the election cycle for Romney, but he's clearly lost this argument. And I think he's clearly going to continue to lose it. It's better to get out of it.

STEPHANOPOULOS: Do you agree with that, Matt?

DOWD: I agree that the Bain thing is a problem, but I think it's been a problem for a long period of time. I think he had baked-in fundamental problems that Republicans that ran against Mitt Romney in the primaries didn't do it well, but it was a problem in the primaries that they didn't do well.

I think the interesting thing about both these sides in this is neither side wants to run on their record. Barack Obama doesn't want to run on his record, which is why he's doing everything he can to tear down Mitt Romney, because he knows he can't run on his record, because the majority of the country thinks we're off on the wrong track, so he can't...

STEPHANOPOULOS: Although our poll does show he has an advantage if he's talking about the next four years.

DOWD: Yeah, he does have an advantage of looking to the future, but he can't say, "Look what I've done. Vote for me and give me another term because of what I've done," because he knows they think the country's on the wrong track, so he wants to distract from that.

Mitt Romney knows that he can't run on his record. He doesn't have a Massachusetts record that he wants to run on because it wasn't anything great there. Now Bain's a problem, so he doesn't want to run on his record.

So what we're going to have is 90 percent of what we're going to talk about is about bad things about the other guy. And my fear, George -- my fear, to project forward in the next 115 days on Election Day, my fear is this is going to be a very close election, could come down to a couple thousand votes, is whoever wins this election is going to have no mandate or no vision of where we want to take this country. And that's the problem.

STEPHANOPOULOS: I think there's a good chance of that. But let me press -- you served in at least two presidential campaigns for George W. Bush. How do you explain why Governor Romney hasn't put out more of his tax returns? And can he get away with it? You're seeing those Republicans now start to call for the returns to be released.

DOWD: I have seen this with candidates. I saw this with the DWI with President Bush that came out late in the campaign. I've seen it with a number of other candidates I worked for. I think it's two things.

First of all, there's obviously something there, because if there was nothing there, he would say, "Have at it." So there's obviously something there that compromises what he said in the past about something. So that's -- but I think the bigger thing is, it's arrogance. These -- many of these politicians think, "I can do this. I can get away with this. I don't need to do this, because I'm going to say something and I don't have to do this." And that in the end is the problem, is that they sort of walk into (inaudible) say, I don't have to do that, I can address it some other way, but he obviously -- if he had 20 years of great, clean, everything's fine, it'd all be out there, but it's arrogance.

STEPHANOPOULOS: But I -- I want to get to Donna, but you're nodding your head at that.

WILL: Absolutely. Look, what Mitt Romney has said is he has released, and I quote, "all that's necessary for people to understand something about my finances." Now, the something is a pregnant word. And people are going to say there's -- the cost of not releasing the returns are clear. Therefore, he must have calculated that there are higher costs in releasing them.

STEPHANOPOULOS: And he's going to tough it out.

BRAZILE: Right. It's drip, drip, drip. That's the problem. That's how you get to the mildew in the first place. That's why there's a mold right now that the campaign has to get rid of.

Look, the problem is, George, is that in 2002, to establish his residency in the state of Massachusetts to run for governor, he had to say, well, no, I did not sever ties. I had a leave of absence, so I was still here, technically coming back, technically doing this, technically. But we don't know, but he will not release anything. He has a penchant for secrecy.

So my first request, if I was working for Mitt Romney, is, first, stop whining. Number two, get Bain to release all of the relevant documents, the minutes of meetings, board of directors meeting. Let's see what's on the record. And also, I think he could clear it up by releasing his taxes from that period. There's a gray area, and maybe we can find out more if Mitt Romney...


STEPHANOPOULOS: Mary, when you hear all this, do you think he can tough it out the rest of the way?

MATALIN: He -- let's -- can we put some real facts on the table? Because we keep saying we -- this, that, and we don't know. We know the facts. He took a leave of absence to go run the Olympics in 1999. He never returned to Bain. He filed everything with the SEC that was absolutely by the law, letter and spirit of the law that the SEC required. Being a shareholder or an office-holder did not put him in any managerial or investment decision-making, which was said by Bain people who are working there, including a Democrat, who's for Obama, who ran for the Senate...

STEPHANOPOULOS: But, Mary, he has gone beyond that and said he had no involvement in Bain. And these documents seem to contradict that, that plus the $100,000 a year for an executive or former executive, that plus the attendance at the board meetings. Doesn't that add up to involvement?

MATALIN: The -- the charge is that he was making decisions that somehow sent jobs -- which is a complete another distraction, which, by the way, the real issue here is lying to the American people about outsourcing is -- is what this election should be about. Outsourcing is not a goal of private equity or -- it's -- it's a consequence of the global economy. And as one of your earlier guests said, if there were investments made with Bain that produced outsourcing, that -- that was with those investors' money. What Barack Obama has done is outsourced jobs with your tax dollars, with our money, and they're complete failures. But that's not what this election is going to be about. It's not...


WILL: But, Mary, Mary, is it not what you call a "real fact" that Mitt Romney gave to the McCain campaign, when it was considering him as a running mate, 23 years of tax returns?

MATALIN: So what -- what if we -- let's say he -- he gives 23 years, we could put two decades of tax returns out. Is that going to produce two jobs? Is it going to produce anything toward a mandate, anything toward the debate about what this is about? Is the charge -- is the charge that he's hiding...


DOWD: Mary, you know -- you know -- you know, if -- if that was -- that if you -- I said that's truth serum in that cup, and you were advising a candidate like Mitt Romney in this instance, you would say, "We've got to get this out there." You would say, "We've got to get this out there to deal with this."

To me, the problem is the president is doing exactly what he needs to do because he wants to cover up on a failed record. He's doing exactly what he thinks, the ends justify the means, I'm going to attack this guy, tear him down, and that's what I need to do, because the direction of the country is bad.

But Mitt Romney -- this is like karma to me. Mitt Romney did the same exact thing that Barack Obama is doing to him. He did it to Newt Gingrich. And he -- he's saying the exact same thing that Mitt Romney is saying. It's like, you're taking my record out of context. I can't believe you're saying -- he did the same thing to Rick Santorum.

So now, all of a sudden, he's running against a -- in a general election against a very professional group of people, against a very astute politician, against a Chicago machine who's doing the same thing he did, and now he's sitting there saying, "I can't believe you're doing this. I can't believe you're doing this."

MATALIN: No, he's not saying that.


BRAZILE: ... there's no policy that will give Mitt Romney any cover to say, well, look, here's my jobs plan, here's what I will do...


STEPHANOPOULOS: But let me take Matt's other point, though, to James, because, James, I mean (inaudible) will stipulate what you said as a political professional is probably true. How about his other point, that if you run and win a campaign, even if you do win a campaign like this, there is no mandate coming out, no mandate to help the middle class? Is he right about it?

CARVILLE: I agree, if I think of what I'm going to try to do is get Rahm -- Mayor Rahm to take two -- two days of leave and promote my book (inaudible) than I could ever be.

I think -- I do believe that this is a -- there's 30-year problem that's been ongoing, and I think that -- I expect the president to actually talk about his next term and what he's going to do sort of about the middle class, if you will. But right now, I think he would be wrong to get off where -- where he is.

And I think one of the big things that's happened in this campaign is kind of surprising. I'm a longtime reader of George Will's. He writes often about the law of unintended consequences. And we thought that the -- that the Citizens United was going to help the Republicans' super PACs, because they would have so much money.

STEPHANOPOULOS: It has, hasn't it?

CARVILLE: The real surprising thing of the campaign is the Democratic super PACs have been more influential thus far, Priorities USA, American Bridge. They have driven the debate in this campaign much more than -- than the Republican super PACs. Now, whether that continues through September and October, I'm not willing to say, but as of July 15th, it's the Democratic super PACs that have basically driven this whole Bain tax return, whatever it is. And for better or for worse, that's what happened.

WILL: It's an old story about advertising. Advertising dollars are just as good as the product they have advertised. The entire Ford Motor Company's marketing genius was put behind the Edsel, didn't help. The Edsel wasn't a good product.

STEPHANOPOULOS: One of the things you're seeing, though, with all of this, Donna, is an absolutely deadlocked race, where somewhere between 90 percent and 94 percent of the country, if you believe the polls, have already made up their mind. The candidates are fighting over 5 percent to 6 percent of the vote in eight or nine states. Most of the country's completely disengaged from this campaign.

BRAZILE: And that's why it matters to have this debate now, because what's happening -- President Obama's offense. He's engaging voters. And he's closed the enthusiasm gap. Democrats are coming back. They're more excited because they see a president who's out there defending his record on the economy, stabilizing the economy, rescuing the auto industry, you know, bringing bin Laden to justice, on and on and on and on. So they like the fact that he has -- he has that fighting spirit, that he's willing to take it to Barack Obama.

And you saw him yesterday in the rain, getting drenched, telling women, I'm sorry about your hairdos. I would have said...


STEPHANOPOULOS: I want to get one other issue on the presidential campaign before we move on. And it's a flash on the Drudge Report -- I think it was on Friday -- showing Romney narrows VP choices, Condi emerges as frontrunner. Mary Matalin, is that really true? Do you believe that is a viable possibility for Mitt Romney to choose...


STEPHANOPOULOS: ... pro-choice, moderately pro-choice Condi Rice?

MATALIN: Not -- I love Condi. We all love Condi. She's vetted. She's tested. She'd be ready on day one. She doesn't want to do it. And in the case of Condoleezza Rice, Dr. Rice, when she says I don't want to do it, she doesn't want to do it.

CARVILLE: But this is -- this is the vice presidential equivalent of birtherism. If you believe...



CARVILLE: ... that Condi Rice is going to be a Republican vice president, then you believe that Obama was born in Kenya. I mean, it's just -- it's...



WILL: Choosing Condoleezza Rice would inject tremendous excitement into the campaign and remove all suspense from the outcome. You would have such an uproarious convention in Tampa, you'd have perhaps a third party, you'd have a challenge to her on the floor, you'd have walkouts of delegations, and he'd lose 40 states.

CARVILLE: So I would -- never say this before, but I would rather have Condoleezza Rice than Sarah Palin, OK? That's...


BRAZILE: She would be a better number one than a number two.


STEPHANOPOULOS: ... address the other question coming this morning. You're hearing this a lot at the National Governors Association from Republican governors right now, they're saying, fine, if Mitt Romney wants to get -- whatever he does on the tax returns, what he needs to do is come out with a much more specific, much bolder agenda.

DOWD: What I actually think he needs to do -- he's got a 59-point plan or a 62-point plan or whatever. He needs a three-point plan. I mean, the problem in politics is not too many specifics. The problem in politics is, how do you pare it down with a vision and a message that the average person can lean over their back fence or talk on the front porch and say, "I like what Mitt Romney has to say about X, Y and Z, not X, Y, Z, A, B, C, one, two, three, four, five, six"? He needs a much more limited -- a limited message.

But the other thing I think he has a problem with is that most of his economic plan feels like it's retread of something from 25 years ago. It feels like what we're going to give you is more tax cuts, what we're going to give you is less government regulation, what we're going to give you is this, and it feels like it's something in the time gone by.

And I think a lot of the middle class, as James' book says and as James says, a lot of the middle class thinks all of those solutions aren't going to help us, all of those things aren't going to help us. I would take his 59-point plan, throw it out, and figure out a three- or five-point plan that basically addressed what we want to do in the next five years.

STEPHANOPOULOS: What should the three points be?

WILL: Well, we -- we had the Reagan example. Win the Cold War, cut taxes, lighten regulatory burden. We've won the Cold War. Plug another one in, because the first two still apply. But, again, 59 is not more than, it's less than three. Pascal once wrote a letter to a friend, he said, "I'm sorry about the long letter, I didn't have time to write a short one."


It is harder to get it distilled.

STEPHANOPOULOS: Could you do it?

MATALIN: I -- we're missing the forest for the trees. He's been the nominee for under three months. He's raising unprecedented amounts of money. These campaigns are sequences, a rhythm to them. What he's doing now is raising money to be spent in the fall. Obama is burning through his money. He is burning through his money that he won't be able to recapture.


MATALIN: Mitt Romney, what we find in all the polls, in your polls, what people most frequently say about Mitt Romney is they don't know who he is and what he'd do as president. So the sequencing of his ads is here's Mitt Romney, what I would do on day one. And he does have -- either criticized for having a too complicated plan or not having any plan.

Having been in that E-talk (ph) conference, he has very specific, 21st century plans for energy, for debt reform, regulatory reform, tax reform. It's very specific; it's all on his website. He's giving great speeches. He'll be introduced to the country at the convention. And he'll be great in the debates.

WILL: In the first 12 days of July, in one media market in one state, in Columbus, Ohio, the two campaigns and the super PACs supporting them ran 1,648 commercials. Now, we are going to learn soon the declining utility of political dollars. Both sides are going to have enough, and they're going to find that the last political dollars buy nothing.

CARVILLE: The (inaudible) political consultants have always thought this, that the least effective dollar is in the presidential race. The most effective dollar is in the race for assessor, because we -- we know these guys. I mean, we're not very likely to hear...


STEPHANOPOULOS: With the exception of early money, right?

CARVILLE: The early -- the early definition on the challenger in 2004 made a difference. The early definition on a challenger in 2012 is making somewhat of a difference here. But there's -- now as attitudes harden and people really know these guys, and so the next dollar in a presidential -- the dollar you spend on October the 27th in a presidential race is less effective than a dollar in the assessor's race, and that's because we don't know the guys are running...


DOWD: George, I think -- I think that the thing that I think Mitt Romney -- the people that are going to decide this election are the people that like Barack Obama, but don't like the direction of the country, that group of voters that basically says, I like this guy, I like his family, he's a good man, he's got good intentions, but the direction of the country is off. And that group of voters -- I think the more Mitt Romney stays away from hate this president, despise this president, dislike this president, and more stays in the go ahead and like this guy, nice guy, nice family...

STEPHANOPOULOS: Just doesn't have the answers.

DOWD: ... he doesn't have the answers. And that's, I think, ultimately where he has to focus.


STEPHANOPOULOS: I want to switch topics right now, to the bombshell report come out from Louis Freeh on the whole scandal at Penn State over the last now 12 years. Let's take a look at what Louis Freeh had to say.


FREEH: Our most saddening and sobering finding is the total disregard for the safety and welfare of Sandusky's child victims by the most senior leaders at Penn State. The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized.


STEPHANOPOULOS: Donna, all the leaders at Penn State, including the president, of course, Joe Paterno, implicated. The question now, what to do about it? Some are saying that the NCAA should step in, impose what they call the death penalty, stop, suspend the football program at least for a time.

BRAZILE: Look, I totally agree. There should be some penalty, some acknowledgment that there was a gross abuse of children, neglect in their duties as officers of that university.

You know, when I read that report, George, all I could -- I thought about the Catholic Church, I thought about the boy -- I thought about so many other institutions that's been implicated in these kind of cases. But what I like about the report at the end is that he gave us 120 recommendations on how we can protect children in the future, what institutional leaders should do, what people in the community should do, board of trustees and others. So he gave us a blueprint of how to avoid this happening, but it's a sad episode, and some heads should turn.

STEPHANOPOULOS: James, I was looking at...



CARVILLE: Look, this is awful, gut-wrenching. And people that I really respect are talking about the death penalty for Penn State football. That is a really dumb idea. Lives have been ruined, so the answer to it, let's go out and ruin more lives. Let's take a kid who's a football player who was in the second grade when this happened and let's suspend the program. Who knows what he's going to do with his education? Let's take every contract that's been signed, let's take the Penn State-Wisconsin game, every -- done to everybody that has a motel in Happy Valley, let's ruin their lives as a retaliation.

I mean, this is really a bad idea. Let Penn State football play, let them make money, bring the trial lawyers in, pluck that chicken clean.

WILL: Sitting between James and Donna, two LSU football fanatics, I'm taking my life in my own hands to say this, but I'll say it. We have grafted a multi-billion-dollar entertainment industry onto higher education. It is inherently discordant with the mission of the university. It is inherently corrupting. And you're going to get this and elsewhere different forms of corruption, but always forms of corruption, because big-time football has no business on college campuses.

DOWD: I -- George, you know, one thing -- I'm going to take up something that Donna said and James and George, it's awful, awful situation. If you took Jerry Sandusky and substituted Jerry Sandusky and put the word "priest," and then you put Joe Paterno and substitute the word "bishop," it's exact same thing.

What you have is an institutional -- an institutional corrupt problem, that basically the end (ph) of the institution becomes more important than the people involved. And nobody says let's give the Catholic -- grow up Catholic, I am Catholic, let's give the Catholic Church the death penalty. Is there something in the Catholic Church that needs to be reformed and changed so things like this don't happen so that the hierarchy of the Catholic Church or the hierarchy of football or the hierarchy of institutions don't -- don't have preeminence over the people or the children involved?

STEPHANOPOULOS: But to take issue with James, why isn't a one-year suspension -- that's maybe it's not -- it is or is not a death penalty. Why isn't that appropriate?

DOWD: This is -- if we think Jerry -- you know, Jerry Sandusky and Joe Paterno is the only thing going on around in this country in the institutions like in higher -- it's the only thing going on, we're fooling ourselves. There's a thousand other...


CARVILLE: What are you going to do with the kids that are there? Are they juniors the year that they lay out? What do they do that year? What do you do with all the contracts for all the games that have been scheduled for that year? How do you replace all of this? What is going to be -- you're just going to ruin a lot of other lives to do something like this.

And, look, to George's point, yes, I'm a big college football fan. Is it a kind of corrupting influence? Well, yeah, of course it is. We all know that.



STEPHANOPOULOS: ... get the last word on this.

MATALIN: ... college is -- because we're going through this, Matty is going to look at colleges -- is more than just learning in a classroom experience. I'm not a college football person. I didn't grow up with it. But it's your whole culture in Baton Rouge and LSU and Mississippi and Georgia, and it's part of these kids enjoying, moving into adulthood. And I -- I don't think we should undo it, even though I think you're crazy to be as obsessed with it as you are.

STEPHANOPOULOS: We're going to have to take a break right now, so we're back with more of our roundtable is just 60 seconds. Nielsen names the most memorable TV moments of all time. We'll weigh in with our picks, too.



(UNKNOWN): There's a hanging chad hanging up here.

(UNKNOWN): I think this (OFF-MIKE) it has a slight dimple (OFF-MIKE)

JENNINGS: The Supreme Court of the United States has reversed the decision of the Florida Supreme Court.

GORE: And now, my friends, in a phrase I once addressed to others, it's time for me to go.

STEPHANOPOULOS: ABC News has learned that Osama bin Laden has been killed.


OBAMA: After a firefight, they killed Osama bin Laden and took custody of his body.


STEPHANOPOULOS: Back with our roundtable now, a couple of the most memorable TV moments of all time. According to Nielsen, the number one, of course, the 9/11 attacks back in 2001.

George, you, though, have kind of an off-the-wall one.

WILL: Well, I didn't have a television in my house until I was 23, so I missed Howdy Doody and all that good stuff. I think what television does best is unscripted live things, live sports, of course, baseball best of all. Greatest game, in my judgment, in baseball history was the 1960 Pirates-Yankees game seven, won by Bill Mazeroski's walk-off homerun in the bottom of the ninth. Television did it. Only television could do it.

STEPHANOPOULOS: There is it right there.

WILL: That's Yogi Berra, by the way, playing left field.


BRAZILE: Oh, there's no question. I have many, but the one that really sticks in my mind is one that I think I will never forget, and that is seeing the pictures of people struggling to get airlifted out of Hurricane Katrina, thinking about my own family, and wondering if they had made it out alive. So that will always be the moment when I remember the brave reporters, the brave service people who risked their lives to save others.

STEPHANOPOULOS: And that was number two on Nielsen's list.

DOWD: Well, I picked Watergate, the Watergate hearings, because that's actually why I got into politics. It was when -- when I was 12 or 13 years old. I remember going up to vacation with my brothers and sisters on Lake Michigan, northern Lake Michigan, and they all playing outside, and I was fixated on the Watergate hearings, because I thought it was such a fascinating thing, where basically we were confronting corrupt power with an institution to how to fix it. And these two reporters basically took down a president, which, to me, brought me into politics and what we do and why we do it and all that, the Watergate hearings.

STEPHANOPOULOS: A lot of lasting impact there.

CARVILLE: I picked the man on the moon. I just couldn't -- I couldn't believe it. We just did it, and it was kind of over a tumultuous year, and I can just never forget that, that somebody actually, you know, walked on the moon. It was unbelievable. Obviously, 9/11, my wife was in the White House. Katrina, with my beloved New Orleans. But I tried to think of something with a little happier note, and so that's why I picked that.

STEPHANOPOULOS: That was the latest I ever stayed up. I was 8 years old when that came out, and I loved Walter Cronkite's reaction at the moment. All he could say was, "Oh, boy."

MATALIN: I picked 9/11, not the date, but the first anniversary of, because having been in the bomb shelter, the PEOC at the White House all day, I didn't see what the rest of the world and the country was seeing on 9/11. I saw it for the first time a year after the fact, and it was more gut-wrenching the second time around. It's amazing what -- how well it was covered live, contemporaneously, and if you didn't see it then, it's still shocking.

STEPHANOPOULOS: How much were you aware of what everyone else was seeing...

MATALIN: Nothing.

STEPHANOPOULOS: ... while you were in the PEOC that day?

MATALIN: We saw -- the only thing -- time we looked at the television is captured in that iconic photo of the towers imploding, and the vice president -- we all saw that. But we weren't watching TV. We had a few other things on our plate. And it just -- and we didn't watch it for several days after. Nobody watches TV in the White House anywhere (inaudible) for the news. It was just -- I can't even imagine -- my mind cannot wrap around the country seeing that contemporaneously. I just still cannot grasp that.

STEPHANOPOULOS: Seeing that second plane go in live was just such a shocking thing. I mean, I agree with everything you guys have said. And one of the interesting things, all 20 of the top 20 were all breaking news, live events.

So I'm going to go in a different direction. I think I have number 43, and that was the finale of "MASH," 100 million people watched. Alan Alda, in that finale of MASH, it was the biggest audience ever for a non-live event, for a scripted show right there. You see Hawkeye right there. It was an incredibly moment, very dramatic episode, as well. I don't think any scripted program is ever going to see that kind of audience again. We're not going to see the same kind of audiences for news programs, at least on the broadcast networks, either. But that was great stuff.

And you can see the full list of the most memorable TV moments on our website at abcnews.com/thisweek.

"Your Voice This Week" is also coming right up, but first...


STEPHANOPOULOS: Three moments from "This Week" history. What year was it?

(UNKNOWN): Six-year-old Elian Gonzalez seized from the home of his Miami relatives...

STEPHANOPOULOS: Little Elian sparked a tug of war with Cuba.

(UNKNOWN): This week, Hillary Clinton and Rick Lazio had their first face-off.

STEPHANOPOULOS: Hillary Clinton ran for Senate.

CLINTON: That was a wonderful performance, and -- and you did it very well.

LAZIO: I want you to sign it. I'm not asking you to admire it; I'm asking you sign it right here. Sign it right now.

CLINTON: Well, we'll -- we'll shake on this.


STEPHANOPOULOS: And in the fall classic, the Mets faced the Yankees for the first time.

WILL: There've been 96 World Series. In 50 of them, a New York team has played. A lot of people look upon this series like the Iran-Iraq War in spikes. They wish both sides could lose.

STEPHANOPOULOS: Was it 1998, '99 or 2000? We'll be right back with your answer.



STEPHANOPOULOS: So what year was it? When did Hillary Clinton run her first campaign, Elian Gonzalez become a household name? It was 12 years ago in 2000.

And now we honor our fellow Americans who serve and sacrifice. This week, the Pentagon the released the names of 11 soldiers killed in Afghanistan.

And finally, "Your Voice This Week." Today's question comes from Ronald Stanberry, who asks, why can't we have a debate now between the presumptive candidates while there's time left to consider what each has to say to the other face-to-face?

Great question, Ron. I'd love to see it. And both candidates have an open invitation to join us right here on "This Week" on any Sunday to have that debate. I know it's a long shot, but you never know, and we do know that the Commission on Presidential Debates has a full slate of three presidential debates, one vice presidential kicking off October 3rd in Denver. You can bet that both candidates will be there, and as I said, our invitation is open until then.

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