Transcript: Sens. Durbin and Kyl

"This Week" transcript with Sens. Richard Durbin, D-Ill., and Jon Kyl, R-Ariz.

ByABC News
July 12, 2009, 6:04 AM

July 12, 2009 — -- GEORGE STEPHANOPOULOS, HOST: Good morning, and welcome to "THISWEEK."


STEPHANOPOULOS (voice-over): Welcomes abroad. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have the bloodof Africa within me.

STEPHANOPOULOS: Warnings at home.

REP. MARIO DIAZ-BALART (R), FLORIDA: There is a new definitionfor "dismal failure": stimulus -- this stimulus.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: What would theydo? What would they do?

STEPHANOPOULOS: The stimulus takes shots. Health care stalls.Is it time for President Obama to hit the reset button with Congressor should he stay the course? Questions this morning for ourheadliners, the Senate whips: Democrat Dick Durbin and Republican JonKyl, our "THIS WEEK" debate.





UNIDENTIFIED MALE: Michael Jackson...

COURIC: Michael Jackson...

STEPHANOPOULOS: Michael Jackson mania. Did the media go toofar? That and all of the week's politics on a special expanded"Roundtable" with George Will, Donna Brazile, Cokie Roberts, SamDonaldson, and Bob Woodward of The Washington Post.

And as always, "The Sunday Funnies."

CONAN O'BRIEN, HOST, "THE TONIGHT SHOW": A lot of us are stillmourning the loss of one of America's most entertaining figures wholeft us all too soon, but don't worry, folks, Sarah Palin will beback.


ANNOUNCER: From the heart of the nation's capital, "THIS WEEK"with ABC News chief Washington correspondent, George Stephanopoulos,live from the Newseum on Pennsylvania Avenue.


STEPHANOPOULOS: Hello, again. It was another whirlwind weekabroad for the president and the whole Obama family, touched down inWashington early this morning for what may be the most momentous monthof the year on Capitol Hill.

Confirmation hearings for Judge Sotomayor begin tomorrow. Butthe House and Senate are trying to pass health care by August, but theodds against that going up. And despite calls from some to scale backhis agenda, President Obama doubled down this morning, writing in TheWashington Post that now is not the time to defer hard decisions.

Here to debate all that is coming up, the two Senate leaders incharge of counting the votes: Democrat Dick Durbin, and Republican JonKyl. Welcome both back to "THIS WEEK."

And, Senator Durbin, let me begin with you on the issue thatprobably most directly affects most Americans, that's health care.Your counterparts, the House Democrats, are carrying forward a pieceof legislation that includes a $550 billion tax increase, with asurtax of about 1 percent that starts for individuals earning about$250,000 a year, climbing to 3 percent for individuals earnings amillion dollars a year or more.

Can Senate Democrats sign on to that?

SEN. RICHARD DURBIN (D-IL), WHIP: I think we're going to have adifferent approach. We understand that we have to combine cuts inactual spending on health care, savings from hospitals, from doctors,from health insurance companies, along with some new revenue.

Now this new revenue is not just to cover those who are uninsuredtoday, but to make sure that insurance is affordable for people...


STEPHANOPOULOS: New revenue but not a surtax on millions -- onpeople earning over $250,000 a year?

DURBIN: The Senate Finance Committee is considering a lot ofdifferent options. I don't want to preclude or select any option atthis point. But I think what we need to do is to make sure that atthe end of the day, we have real health care reform.

The American people are committed to change, George. There isresistance, of course, among some Republicans in the Senate. But thishas been a good week. A number of Republican senators came forward,met with Senator Harry Reid, continued to meet with Senator Baucus.

I think we're starting the kind of bipartisan dialogue that'sgoing to work.

STEPHANOPOULOS: I want to ask Senator Kyl about that bipartisandialogue. But first, on this tax increase.



STEPHANOPOULOS: Absolutely not.

KYL: No. Here is the problem. We're in a recession. We knowthat between 75 and 80 percent of the jobs created in the country arecreated by small business. At least 55 percent of the income thatwould be generated by this surtax directly hits the entrepreneurs whorun these small businesses.

It would be a job killer. It would be exactly the wrong thing todo any time, but especially when we're in the middle of a recession.

STEPHANOPOULOS: How about these bipartisan negotiations?Senator Charles Grassley, your ranking member on the FinanceCommittee, which you are also a member of, has been negotiating withSenator Baucus and others. He met with Harry Reid, as Senator Durbinjust said.

But I have been told that you've had some very toughconversations with Senator Grassley and that you've warned him againstgiving away too much to the Democrats. Is that true?

KYL: Well, no. I haven't warned him about anything. But it istrue that we've had a lot of discussions internally in our RepublicanConference, and that senators Hatch and Grassley and Enzi and OlympiaSnowe, who did meet with that bipartisan group, I think sent a verystrong message.

No on these taxes. No on the kind of mandates that the Democratsare talking about, including a government-run insurance company. Sowhile Republicans all...


KYL: George, can I just make one quick point? Republicans arevery committed to reform. But we do not like the ideas of spendingand taxing and creation of more deficit in order to achieve theseresults.

STEPHANOPOULOS: No. But Senator Grassley has talked about othertax increases, not taxing the -- taking away the exclusion for healthinsurance plans right now. He has also talked about a publicinsurance plan based on the idea of cooperatives.

On those issues, does he speak for the Republican Conference?

KYL: No. And I certainly disagree with any kind of government-run plan. I don't think it's fair to say that Senator Grassley hassupported any of these tax proposals. He has been very wary of thetax proposals.

Think about this, if you have a catastrophic health event in yourlife, you can take -- if it represents more than 7.5 percent of yourgross adjusted income, for income tax purposes, you can take adeduction on that.

They're asking to raise this up to 10 percent. Most of thepeople hit by that are seniors and 55 percent of them are making under$50,000 a year. These are bad tax policies.

STEPHANOPOULOS: So, Senator Durbin, you heard Senator Kyl rightthere. He says that no public health insurance plan, I hear a no onany kind of revenue enhancement. So is a bipartisan deal reallypossible? And how necessary is it? DURBIN: Senator Kyl is not ready for change and I guess that'shis position. But most Americans are ready for change. They want tokeep the health insurance that they have, if it's good policy. Butthey want us to fix the things that are broken in this system.

When Senator Kyl says he is opposed to any kind of government-runhealth insurance, is he opposed to Medicare? That covers 45 millionAmericans today, another 60 million covered by a government plancalled Medicaid.

I mean, the fact is overwhelmingly, three out of four Americanssay we should have a choice as Americans of a government-run insuranceplan. It's a choice we can make voluntarily. It brings competitionin the system.

The resistance to this idea comes from the health insurancecompanies. Those private companies that are making a fortune inprofits today, denying coverage to individuals, fighting with ourdoctors about the cure that we receive.

There should be competition...


DURBIN: We should keep them honest.

STEPHANOPOULOS: ... the talks did at first bog down this weekand then seem to pick up again towards the end of the week. Is itstill possible for the Senate to pass a bill by the president'sdeadline of the August recess?

DURBIN: Yes, it is. And I'm glad that President Obama wentoverseas for critically important meetings with world leaders. NowI'm glad that he's home. He's going to be rolling up his sleeves.We've already been in communication with the White House.

He wants to get this job done. And that means the Senate shouldmove in an expeditious way to finish our committee hearings, bringthis bill to the floor before the August recess.

STEPHANOPOULOS: I'm going to ask Senator Kyl that question aswell. But let me broaden it out as well, because there has been a lotof talk this week also about the stimulus and whether or not it hasreally helped the economy.

You told -- you put out a statement earlier this week, you saidthat the stimulus ought to be canceled. But your own governor,Republican governor of Arizona, has talked about the successes of thestimulus in the state of Arizona, pointing to 24 highway projectscreating 6,000 jobs, a weatherization program creating 1,500 jobs, aseries of programs for child care and education that have all helpedthe state of Arizona.

So why do you want to cancel a program that your own Republicangovernor said has helped your state? KYL: Well, I don't want to leave that health issue without,first of all, reiterating the fact that Republicans very much wantreform, but not on the backs of the American people with the kind oftaxes and potential rationing of care...


KYL: ... that would result. There is no chance that it's goingto be done by August. President Obama was right about one thing. Hesaid if it's not done quickly, it won't be done at all. Why did hesay that? Because the longer it hangs out there, the more theAmerican people are skeptical, anxious, and even in opposition to it.

STEPHANOPOULOS: And that ties into the complaints you've madeabout the stimulus.

KYL: That then -- yes.

STEPHANOPOULOS: And that brings us right back to that.

KYL: Yes. And with respect to the stimulus, I think it's nowacknowledged, it hasn't done what it set out to do.

STEPHANOPOULOS: But your government says it has in Arizona.

KYL: No. What our -- look, all governors like "free money"coming to the state. My governor is no different. But the reality isthat it has added to our deficit. We're now going to have a $1.8trillion deficit this year.

It promised to create 4 -- or save 4 million jobs. We've nowlost another 2 million jobs. Unemployment is 2 points higher than itwas when the president took office. And even with the stimulus, it'shigher than they said that it would be without the stimulus.

The reality is it hasn't helped yet. Only about 6.8 percent ofthe money has actually been spent. What I proposed is, after youcomplete the contracts that are already committed, the things that arein the pipeline, stop it.

You can spend about half of the money on the stimulus and thelast half would be spent during the eight -- last eight years of a 10-year period. Why spend that money when it could be put to better useon other things like health care, for example?

And we're digging this deficit hole even deeper than we havetoday.

STEPHANOPOULOS: What's the answer, Senator Durbin?

DURBIN: Well, the answer is this, it's a two-year plan and we'refour months into it. The Republicans resisted President Obama'sefforts to put together the stimulus package. And at the time that hemade the proposal, our economy was in freefall.

We were facing a worldwide recession. It's true that we're notout of the woods yet. We still have a long way to go. But we havestarted to stabilize our economy and the world economy. And that's amove in the right direction.

What Senator Kyl fails to acknowledge is that we have actuallywritten checks so far for $56 billion out of $787 billion. We aregoing to see the impact of the stimulus package start to grow.



DURBIN: Well, first let me tell you, George. First it means taxbreaks for working families. Does Senator Kyl oppose that? Would hecancel those?

Secondly, it means transportation projects across America, inArizona, in Illinois, and other states, not only creating good-payingjobs but building America's infrastructure for the future.

Does Senator Kyl oppose that?

I think these are good investments in America's future. Let'sgive it time to work.

STEPHANOPOULOS: I think you (inaudible) answer, but let me justfollow up, one more question on this. With the jobs situation and thewhole economy being so much worse than everyone expected, severalmonths ago, why not focus on that right now?

Several people have said that President Obama should scale backhis agenda, right now, and put all of his focus on the economy.

DURBIN: George, because that president understands that, if wewant to build this economy for the future, it isn't just a matter ofsaving and creating jobs today; it's doing the fundamentals to makesure the American economy is strong at the end of this recession.It's taking care of a health care system.

Senator Kyl said that the idea of health care reform is a job-killer. Let me tell you, health insurance premiums today are job-killers. The cost of health insurance, I'm sure, in Arizona; I canguarantee you, in Illinois, is going up three times faster than theincrease in wages. We just can't sustain that.

Secondly, the president says, in addition in to health carereform, do something about America's dependence on foreign energy.Let's not only be sensitive to the environment but sensitive to thefact that economic growth demands a sensible, sustainable energypolicy.

KYL: George, I...

DURBIN: We can do these things. KYL: ... I did not say health care reform is a job-killer. Isaid imposing taxes on small business to pay for health care reform isa job-killer. And it is.

And there's something else fundamental about economic recovery.The government doesn't create jobs, except more government jobs.

It was interesting, a bit amusing, to find that some of the jobscreated by the stimulus bill were to hire people to apply for morefederal grants. That's not the kind of jobs that we want to create.

The private sector creates jobs. And you don't support theprivate sector creating jobs by imposing more taxes on it.

STEPHANOPOULOS: Let me switch subjects, here, because there's apretty startling allegation in this morning's New York Times.

The headline is "Cheney is Linked to Concealment of CIA Project."

And both of you gentlemen have served, in the past, on theIntelligence Committee.

According to this article, the Central Intelligence Agency, atthe beginning of this decade, for eight years, withheld information onthe secret counterterror program at the direct orders of the vicepresident.

This is according to two people with direct knowledge of thematter. They say that Leon Panetta told the intelligence committeesthat.

Senator Durbin, do you think this has to be investigated?

DURBIN: Absolutely, it does. Let me tell you, we have a systemof checks and balances. There's accountability in our Constitution.The executive branch of government cannot create programs like theseprograms and keep Congress in the dark. There is a requirement fordisclosure.

It has to be done in an appropriate way so it doesn't jeopardizeour national security, but to have a massive program that is concealedfrom the leaders in Congress is not only inappropriate; it could beillegal.

STEPHANOPOULOS: So you want the Intelligence Committee to lookinto this?

DURBIN: Absolutely.


KYL: I believe they are. And in any event, Leon Panetta, theCIA director, has come forward with information. He said the CIAdoesn't mislead the public. And specifically, in response to HouseDemocrat allegations that the CIA had misled, he said that's not true.

So I don't think we should be jumping to any conclusion.Moreover...

STEPHANOPOULOS: But he also said, according to this article...


STEPHANOPOULOS: ... that Cheney ordered this program to be keptsecret?

KYL: The Republican leader on the Intelligence Committee in theHouse described this certainly not as some kind of massive program butsomething that was on again, off again...

STEPHANOPOULOS: Never got off the ground, actually?

KYL: ... and actually never got off the ground.

STEPHANOPOULOS: But this allegation of the vice presidentordering it to be kept secret -- do you believe that should beinvestigated?

KYL: Look, the president and the vice president are the twopeople who have responsibility, ultimately, for the national securityof the country. It is not out of the ordinary for the vice presidentto be involved in an issue like this.

STEPHANOPOULOS: But to order it be kept secret?

KYL: What if it's a top-secret program? Of course, he and thepresident would both be responsible for that. Let's don't jump toconclusions is what I'm saying.


DURBIN: I can just tell you, we know that Vice President Cheneyplayed an unusual role with President Bush in the early days of theadministration. That seemed to change over time.

But it is inappropriate for the vice president or the presidentto be ordering that a program be kept secret and not disclosed at thehighest levels of congressional leadership.

We have to have a check and balance in our system. To give tothe president unbridled power and authority goes way beyond what ourConstitution has in mind.

STEPHANOPOULOS: Also, Attorney General Holder, as reported byNewsweek, Senator Kyl, that he's looking at -- hasn't decided yet, butlooking at appointing a criminal prosecutor to investigate whether CIAinterrogators went outside the law, went outside their guidance duringinterrogations.

Would you support that kind of an investigation?

KYL: The president himself has said that it's out of bounds toin any way go after people in the U.S. government who were asked orordered to do investigations.


STEPHANOPOULOS: ... about this is those who went outside of thatguidance.

KYL: Well, it's always a question of whether you pursued theorders that you were given. Obviously we don't want to protect peoplewho have broken the law. But the problem with some of Democraticfriends is that they simply believe that people who followed the lawshould be prosecuted.

The president and the attorney general both have said that's notgoing to happen because of the effect it would have on the morale ofour agents, CIA and other agents who are asked in very dangeroussituations to get this information to protect the American people.

We don't want them to be afraid to ask questions that can savelives.


DURBIN: And we don't want the attorney general to be afraid toask questions when it comes to violations of the law. I agree withSenator Kyl, those who followed the law, followed their directions,did it appropriately, whether in intelligence agencies or militaryagencies, certainly should not be prosecuted.

But those who went beyond it, those who broke the law need to beheld accountable. No on is above the law.

STEPHANOPOULOS: Finally, we're at Judge Sotomayor -- herconfirmation hearings begin tomorrow to be Justice Sotomayor on theSupreme Court.

Senator Kyl, you've been described in your hometown newspapers asmasterminding the Republican strategy for these confirmation hearings.What is the strategy?

KYL: Well, the strategy is to be as thorough as we can inexamining her record, what she has said, and to conduct the hearingsin a fair, impartial, and thorough way, and then make our decisions.And I think Republicans have done a good job of that.

It's interesting that I just reviewed the Rasmussen poll, mostrecent poll about American public opinion about Judge Sotomayor. Theyoppose her confirmation, only 37 percent support it. And I found itinteresting that among women, by a majority of 9, they oppose herconfirmation. Hispanics and Asians, by a majority of 11, theyoppose...


KYL: Oppose her confirmation. This is the Rasmussen survey thatended June 30th. And even independents by, I think, 23 points, opposeher confirmation.

So these hearings are going to be very important for her todemonstrate that she should be confirmed to sit on the Supreme Court.

STEPHANOPOULOS: Senator Durbin, you get the last word. Are youconfident she can quell these questions of bias that have really beenthe flashpoint for the first several weeks of this process?

DURBIN: Absolutely, she received the highest possible ratingfrom the American Bar Association, has more judicial experience thanany nominee in the last 100 years, the support of law enforcementgroups.

She has a compelling life story. She is a restrained andmoderate jurist who was put on the bench initially by RepublicanPresident George Herbert Walker Bush and promoted by PresidentClinton. She's an exceptional person. I believe she's going to dovery well.

And let me tell you, George, give her high marks. She has metface-to-face now with 89 senators, answered all of their questions. Ithink she has done an exceptional job preparing for this hearing.

STEPHANOPOULOS: All of that and a cast. We'll all be watchingtomorrow.

We're going to go straight to "The Roundtable" now. So as ourpanelists take their seats. Take a look at these moments fromconfirmation hearings past.


SANDRA DAY O'CONNOR, SUPREME COURT JUSTICE, THEN-NOMINEE: I'mover the hill, I'm not going to be pregnant anymore.

CLARENCE THOMAS, SUPREME COURT JUSTICE, THEN-NOMINEE: This is acircus, it's a national disgrace. And from my standpoint as a blackAmerican, as far as I'm concerned, it is a high-tech lynching.


SAMUEL ALITO, SUPREME COURT JUSTICE, THEN-NOMINEE: I have tothink about people in my own family who suffered discriminationbecause of their ethnic background, or because of religion or becauseof gender.

(END VIDEO CLIP) STEPHANOPOULOS: And with that, let me bring in "The Roundtable."I'm joined, as always, by George Will, Donna Brazile, Bob Woodward ofThe Washington Post, Sam Donaldson, and Cokie Roberts.

And, George, we just heard Senator Kyl talk about the Republicanstrategy right there. And he had some surprising numbers that Ihadn't seen about possible opposition to Judge Sotomayor. But this ispretty much a forgone conclusion.

GEORGE WILL, ABC ANALYST: It is, not least because the Democratshave, and given the candidate it's not surprising, cast this as aquestion of biography, that her personal attributes are all-important.

There will be two contentious matters. One is the Riccidecision. The lead fireman from the New Haven case is going totestify. And Republicans will stress that all nine justices on theSupreme Court faulted the handling of three-judge panel on which...


STEPHANOPOULOS: Even though not all nine voted that way?

WILL: That's right. But even in the 39-page dissent by RuthBader Ginsburg, it was faulted. So they all rejected that.

Second, the "wise Latina" comment. And the question is going tobe asked her, I'm sure, why is the statue of justice blindfolded?What is it that the law is not supposed to notice and take cognizanceof?

STEPHANOPOULOS: And, Cokie, my...


COKIE ROBERTS, ABC ANALYST: The statue of justice has its earsstill open and can hear a wise Latina. And I think that here thereare differences of tone and accent that will make a difference.

STEPHANOPOULOS: And she'll also point to her record and say, ifyou look at my record, it's not a record of bias.

ROBERTS: Oh, of course, of course. And we've also just heardthat she met with 89 senators. So, you know, she has gone through theworst of it already.

STEPHANOPOULOS: She certainly has.

One thing, I was surprised at, Donna, George talked about thisRicci decision. And one thing that Frank Ricci, the firefighter, isgoing to actually testify at these hearings. But you're starting tosee some complaints that Democrats have asked for more investigationof his background.

They say he's litigious. That seems to be like playing withfire. DONNA BRAZILE, ABC ANALYST: Well, first of all, I don't thinkthe judge will have any problem explaining her reasoning between theRicci decision, because at the time that was the law, the equalemployment opportunity law, Title VII.

What the Supreme Court did was set aside that law and made a newruling in order to rule in favor of the white firefighters. I don'tthink she will have any problems explaining that, her "wise Latina"comment in the context of 17 years of being on the bench, and that shehas followed the rule of law throughout her entire career.

STEPHANOPOULOS: One thing, though. Sam, she's been 17 years onthe bench but has not had the kind of experience arguing before theSupreme Court like John Roberts had or teaching constitutional lawrecently.

So I know that her advisers are setting expectations a little bitlow, saying you can't expect to have some kind of a brilliantconstitutional scholar here?

SAM DONALDSON, ABC NEWS: Well, maybe not. But it's interestingto me that the Republicans have adopted a, kind of, a three-Pstrategy, posturing -- here I am; I have questions -- pandering to aparty base, which seems to believe that anyone to the left of GenghisKhan is not acceptable -- and positioning, which is probably wise, incase the president should, in his next appointment, lose track ofwhere he is and appoint someone like, you know, Harriet Miers.

Let me just say that I would remind you that Antonin Scalia, thefierce conservative on the court, was confirmed at a time thatDemocrats controlled the Senate. He was confirmed 98-0, twoRepublicans being absent who would have voted for him.

I think she'll be confirmed handily, and I hope with a fewRepublican votes.

STEPHANOPOULOS: She'll be confirmed handily; I think that'sright.

But these are different days, Bob Woodward. And I think in partbecause of the Democrat strategy against Judge Alito that we just sawthere. President Obama, Dick Durbin, several other Democrats -- 25, Ithink -- joined a filibuster. More than that voted no.

So we're not going to see a 98-0 vote, here, or anything likethat?

BOB WOODWARD, WASHINGTON POST: I expect not. You know, there'salways the surprise factor. Somebody may come up with something. Shemay say something that's controversial. She's quite capable of that.

What I find interesting is how much she wants this job. If youlook at her biography, she prepared all of her life for it. Shereally has experience.

Apparently, when Obama met with her, she -- she really blew himaway on the constitutional law issues, which she understands. The question is, if she's confirmed, what's her impact going tobe on the court?

And she has the potential -- because she wants it so badly, sheis an engaged judge. She cares about these things -- becoming aplaymaker on the court and having an impact beyond just one vote.

STEPHANOPOULOS: So watch her relationship with Justice Kennedy?

WILL: Yes.


One assumes that, until a conservative retires and is replaced bya liberal, Justice Kennedy will remain what he is today, the centerand master of the universe.

DONALDSON: And wanting something is not something that's a badthing.

BRAZILE: No, no.

DONALDSON: I mean, I think, to get some place, you have to wantit desperately.

WILL: But this isn't going to be nearly as much fun because JoeBiden has been elevated off the committee...


... to the glory of the vice presidency. Because when he -- hisfirst question to Sam Alito -- the question was 8 1/2 minutes long.

STEPHANOPOULOS: That record will not be broken tomorrow.


We'll all be watching. We'll also going to come back in just aminute and talk about health care, the economy, and those newinvestigations. We'll be right back.



OBAMA: An excellent opportunity to put U.S.-Russian relations ona much stronger footing.



OBAMA: Sasha was walking down one of the halls of the Kremlinyesterday. She had her trench coat on, had her pockets in her trenchcoat. We called her Agent 99.



OBAMA: The United States has sometimes fallen short of meetingour responsibilities.



OBAMA: I'll never forget the image of my two young daughters,the descendants of Africans and African-Americans, walking throughthose doors of no return.


STEPHANOPOULOS: President Obama overseas. You heard SenatorDurbin say he's glad President Obama is back home.

Let me bring our roundtable back in, George Will, Donna Brazile,Bob Woodward, Sam Donaldson and Cokie Roberts.

And, George, while the -- the president was overseas, there wasso much talk here about the economy, sparked in part by what VicePresident Biden said on this program last week about how they misreadthe economy.


VICE PRESIDENT JOSEPH R. BIDEN JR.: We and everyone else misreadthe economy.



OBAMA: What Vice President Biden was referring to is simply thefact that, when we passed the stimulus, we hadn't gotten the fullreport of first quarter contractions in the economy. So there'snothing that we would have done differently.


STEPHANOPOULOS: Nothing they would have done differently, GeorgeWill, but the president is starting to face some calls now, as hecomes back, that he should be doing something different, that heshould scale back.

He writes in The Washington Post this morning. "No way. I'mgoing forward."

WILL: And that he should have what they're calling a secondstimulus, which proves that those in charge of our money cannot countto three.


Because we had a stimulus 17 months ago, the George W. Bush/NancyPelosi $168 billion, was it?


WILL: Tax cut and all that stuff, spur to the economy;unemployment then was 4.8 percent. Then six months ago, we had astimulus. Now they want another one, proving the wisdom of MitchMcConnell's favorite saying, that there is no education in the secondkick of a mule.

ROBERTS: You know, Joe -- Joe Biden, of course, was justspeaking vicious truths, which he's want to do, which is that they didmisread the economy, and...

STEPHANOPOULOS: He says everybody did.

ROBERTS: Well, but it is also true that a lot of people havebeen saying all along that unemployment would get to 10 percent. Andall of a sudden, this 9.5 percent number has everyone saying, oh, mygoodness, this is terrible; we've got to do something else. And thereis no sense of, sort of, waiting and seeing what happens with thisstimulus package that has been done.

DONALDSON: You know, we could be penny-wise and pound-foolishand say, well, we're not out of it yet, so let's not spend any moremoney. And that would be disastrous.

The mistake of the big Great Depression was not that Rooseveltdid all these things but he didn't do enough. I think we're going toneed a second stimulus.

I'm sorry that Rahm Emanuel, on your program a while back...


DONALDSON: OK -- sort of, tried to close the door to it, andthey said that it wouldn't be over 8 percent, 9 percent unemployment.

I think we'll need a second stimulus. I think, if we don'tspend, we're not going to get out.

STEPHANOPOULOS: The problem is, Bob Woodward, that -- there area couple problems. Even if it's economically necessary; even if youneed to prime the pump a little bit more, it's politically impossible,right now, and you're running up against record-high deficits?

WILL: And George has got a point. I mean, what does thestimulus really do? It doesn't change the economic fundamentals. Andthat's what Obama is going to have to do.

Look, the -- millions of people have lost their jobs. At somepoint, they have to have the expectation they're going to get thosejobs back.

STEPHANOPOULOS: But wouldn't it have been worse for a lot ofthose people if they didn't have these stimulus funds that...


WOODWARD: It may be, but I don't think you -- if you really getthe economists, here, on sodium pentothal, truth serum...


I don't know that you could do that, but if you did, they wouldsay, you can't tinker around the margins, and that's what a stimulusis. You have to address fundamentals.

ROBERTS: And the president claims that that's what he's going todo this week.


Some of the other programs are addressing the fundamentals, but,you know, this is a big issue out there with people, particularlythose who are feeling the pain and those who have lost their jobs.

DONALDSON: But the last stimulus spent a lot of money but didn'ttarget it on creating jobs. You're quite right. There are -- some ofthese great programs that we all would like are not really helping.The next stimulus must target jobs. And we must get the assets off --the toxic assets off the books.

WOODWARD: Or people who are losing their houses. I mean, thisis a big...

STEPHANOPOULOS: And that program has...


WOODWARD: There's a lot of pain out there. Yes.

BRAZILE: But the economic guru, Warren Buffett, said that thesecond stimulus was like taking Viagra with a bunch of candy.

STEPHANOPOULOS: The first one was.


BRAZILE: Well, but anyone who knows anything about Viagraunderstands that it takes some time for it to work itself in thebloodstream and work its magic.


DONALDSON: I have no comment on that, but does candy work?


BRAZILE: Well, you know, we all know candy is much quicker thanViagra, but that's another conversation between you and I.

DONALDSON: "Candy is dandy, but liquor is quicker." RememberOgden Nash?


BRAZILE: But -- but, so far, $200 billion has been spent. Andthere's another $600 billion that's somewhere in the pipeline. Thiswas not meant to be a four-month program, but, rather, a two-yearprogram, the first part to help rescue the economy in a free fall.And now, this next part is meant for a recovery.

ROBERTS: But there is no political will for other stimulus.

STEPHANOPOULOS: There's no question about that.

ROBERTS: So it seems to me...

STEPHANOPOULOS: Not right now. It could change.

ROBERTS: But, I mean, it seems to me what they need to do isjust make sure that unemployment compensation is extended for thepeople who are out of work.

And apparently, according to the president's own op-ed thismorning, he plans to come out this week and talk about long-term fixeslike making our education system better, the community college systembetter, all of that.


ROBERTS: And, of course, that is something that will make adifference in the long run. But that is a very long run.

STEPHANOPOULOS: He also says health care is part of that, but weheard Senator Kyl say that's a job-killer.

WILL: Well, we don't know. And I'm not sure we're going toknow. Because they're $1 trillion short on how to pay for that.

But, Donna, more of today's stimulus money will be spent in 2011than in 2009. Why is that?

Well, defenders of the Obama administration say, and they'reright, government's terrible at this. It takes so long. And there'sso many requirements and so many set-asides and so many environmentalimpacts statements, it just can't act quickly.

Well, good. Now that we have -- we're all on the same page thatgovernment is not very nimble or efficient at this, should we reallygo on and expand the government?

DONALDSON: Well, George...


WILL: One more thing, Sam.


Bob says, what is the stimulus accomplishing?

I rise in defense of the stimulus because it's accomplished onething. And that is it's sent so much money to state and localgovernments to prevent unionized public employees, which are the baseof your party, Donna, from suffering the same kind of sacrifices thatprivate-sector employees...

STEPHANOPOULOS: So it is saving jobs...


BRAZILE: You would rather see 14,000 school teachers in New Yorklaid off, 14,000 schoolrooms that go closed in order to give back --no, this -- this money has been used to not just create and save jobsat the state and local levels, but also to help states cover theirbudget shortfall, in terms of Medicaid spending, which has beenincreasing.


ROBERTS: Right. I mean, that's why Mark Sanford was in troublein South Carolina his...


ROBERTS: ... before his peccadillos became public, because ofrejecting the stimulus, because of school teachers. It was all aboutschool teachers. DONALDSON: But if government is terrible about this, your answerseems to be, let's just stop. Let's give up, in a sense; let themarketplace work, eventually. And that's unacceptable.


DONALDSON: But I do agree, to take your point. Getting thetoxic assets off the bank books so they will lend, -- we have not beenable to do that. The program about private money coming in withgovernment money has not gotten off the ground.

STEPHANOPOULOS: Because a lot of the banks don't want toparticipate.


DONALDSON: Let's go back to the RTC, the Resolution TrustCorporation idea that we used in the Savings and Loans debacle. Let'sget that back. Let's get those assets off the books. Yes, we'll takea beating, the taxpayers, but we will take a beating worse if we don'tget the banks (inaudible) lending.

STEPHANOPOULOS: Let me -- one of the building blocks of thislong-term reform that Cokie says the president was writing about thismorning is also health care reform. He wrote a lot about health carereform.

It did seem to bog down in the Senate this week. And now we had,as we talked about with the senators earlier, the House is going tocome forward with this $550 billion tax increase to pay for it.Democrats in the Senate can't figure out yet how to pay for it.

How much trouble is the president's plan in right now?

BRAZILE: Well, the president, tomorrow, I believe, will bemeeting with all of the key players in the House, the Democrats,especially, to make sure that they're all on the same page.

The proposal that was presented by the House Ways and MeansCommittee, the $550 billion in additional revenues -- there's noconsensus on that. There's no consensus, right now, how to pay forit. But there is consensus that the Democrats will move forward andget this done.

STEPHANOPOULOS: Here's my question. You know the old sayingfrom the '90s, "BTU," the Clinton economic plan -- the House membershad to vote for this BTU, this energy tax, and then it died in theSenate; they were angry about it.

It seems like the House could be going down that same road again,put their members on the line for a pretty big tax increase that's notgoing anywhere in the Senate.

ROBERTS: Not just put them on the line, but also have the Housepass a bill before they go out for August; have the Senate passnothing, which seems to be the case... STEPHANOPOULOS: So you agree with Senator Kyl; you don't thinkit's going to happen in the Senate?

ROBERTS: I don't think it will happen in the Senate before theAugust recess. And then that House bill will be out there foreverybody to take shots at.

And it's not just tax increases; it's also -- when people startto look at what's actually in that bill, you're going to have a lot ofproblems.


ROBERTS: You're talking about government mandates for everybodyto have health insurance. And for a family of four making $27,000 ayear, that's going to cost them $3,000 a year, and they're not goingto like that.

WOODWARD: You run into the first rule of economics, and that is,if you add more people, 40 million people, to the health care system,that you're going to cover, it's going to cost more.

And you know, back in the Clinton administration, they ran intothis reality. It wasn't because Hillary was secretive or it was herplan. They looked at the numbers and they said, my God, when you'rerunning for re-election, you're spending more money rather than less.

STEPHANOPOULOS: That's true in the short term. The long termargument, Sam, is that, by having it -- bringing these people into thesystem, combined with some kind of a public health care insuranceoption, you're going to get more efficient; you're going to controlcosts?

DONALDSON: I agree with the president. Without a public option,the insurance companies would have rolled us once again. And they cando what they want.

Cokie, if it doesn't happen before the August recess in theSenate, I don't think it's going to happen. And that's why I thinkthe president now, who's put his prestige behind this initiative, hasgot to throw in everything he's got this month and in early August.

DONALDSON: He doesn't have to be a dictator, but he has got tosay to his party, I want this, this, and this.

STEPHANOPOULOS: No more hands-off?

DONALDSON: And they have to do it with 51 votes onreconciliation. They have to do it that way, or it's not going to bedone.

BRAZILE: And the cost of doing that can be a high price becausenot only are more people going to be uninsured, but the premiumscontinue to rise at a rate that most American families cannot affordto even stay healthy and buy into their own health insurance. So Ithink Congress will get something done. But I agree with Sam, it maybe 51 votes and not a bipartisan compromise.

STEPHANOPOULOS: The problem with that reconciliation argument,you talked to other Democrats, like Kent Conrad, the senator fromNorth Dakota, they say this reconciliation crisis wasn't designed formajor policy reform like health care.

DONALDSON: It wasn't.

STEPHANOPOULOS: And you really can't get the policy changes youthat need through that bill, you'd have to pass two different billsand that's also difficult.

George, let me bring you in on these investigations. Thisheadline this morning in "The New York Times" about Vice PresidentCheney ordering the CIA not to tell Congress about the secret programbegun in 2001. We don't really know what the program was, some kindof a counterterrorism program but we know it never got it off theground.

WILL: Here's what Bob Woodward's "Washington Post" says aboutthe program. It quotes a former senior intelligence official,speaking on the condition of anonymity says "the program remainshardly secretive." He said "the program remained in the planningstages and never crossed the agency's threshold for reporting to theadministration and congressional overseers."

But furthermore, the law, to which Cokie referred, 1947,establishing the CIA says indeed Congress must be kept informed unless-- and there's a huge asterisk. It says unless, "to the extentconsistent with due regard for the protection from unauthorizeddisclosure of classified information relating to sensitiveintelligence sources."

WOODWARD: I can't tell you how shocked I am, the idea that theCIA would withhold disclosing something.

STEPHANOPOULOS: On direct orders of the vice president?

WOODWARD: Well, it had to be on the authority of Bush. I mean,the vice president, powerful as he was, was not the president. Andthey would not do it unless Bush backed them up on this. The questionhere is, how do you keep secrets? You know, if you look at the news,this, and Eric Holder is going to have an investigation ofinterrogations now.

STEPHANOPOULOS: A very narrow prosecution in the investigation.

WOODWARD: Well, still, you know, so much of what we are talkingabout and living through now is the overhang from 9/11. It justdoesn't go away.

STEPHANOPOULOS: The irony here, Sam, is that President Obama isthreatening to veto the intelligence authorization bill because theDemocrats in the House want to expand the number of people who arebriefed. And the president is saying, nope, I don't want to go downthat road.

DONALDSON: Once again, candidate Obama has met President Obamaand has discovered maybe he needs to do different things. I think thekey here is the words "planning." What does planning mean? A bunchof people sitting around, blue skies, let's have this study. You'reright, I guess under the law, that doesn't need to be reported.

But was there ever any execution? Let's have a pilot program inthe field and try this. On real people. Needs to be reported. Andif they didn't do that, they need to be brought to task. They need tobe brought to justice.

ROBERTS: What's so interesting is that it was people in the CIAwho apparently brought this to the attention of the CIA director, LeonPanetta, because obviously, they wanted that out of there.

STEPHANOPOULOS: From the minute he heard about it, he shut itdown.

ROBERTS: And went to Congress.

BRAZILE: So why don't we just put it all out on the table?There's already investigations. Many of them will be revealed thissummer. So there's no reason why the attorney general should not havea special prosecutor.

DONALDSON: The president doesn't want to do that.

BRAZILE: Well, you know, the attorney general is a little bitindependent of the president.

WOODWARD: After all those independent counsels that Janet Renowhen she was attorney general appointed and Clinton would go purpleeach time.

STEPHANOPOULOS: And there has been some tension there betweenthe attorney general and the White House. But based on my reportingovernight, George, the way this has been described, one, no finaldecision is made yet. Number two, it's not going to be a broadinvestigation. Not going to be an investigation of policymakers likeSecretary Rumsfeld or Vice President Cheney. Not going to be aninvestigation of anyone who followed the instructions they were given.This is designed to go after rogue interrogators who just weren'tfollowing the guidance they were given.

ROBERTS: How do you even find those people?

STEPHANOPOULOS: The CIA inspector general report has already gota lot of the specific charges.

WILL: beyond that, is this going to be independent counsel?Because independent counsels have to be independent. Look at theexample of Ken Starr. Ken Starr did not want to go all the places hewent, but he was drawn by the logic of his unfolding investigation.And if they think they can control the parameters of this, they arevery much mistaken.

WOODWARD: Whether it's an independent counsel or whether it'sjust a prosecutor within the -- there's a momentum that gets going andthese things tend to unravel.

DONALDSON: You're shocked that the CIA keeps secrets. I'mshocked that Vice President Cheney would, you know, give orders, if infact, he did. It's unlikely.

ROBERTS: I must say, I have very mixed minds about this.Because on the one hand, the whole idea of a prosecution getsWashington into that kind of horrible slog where everybody hates eachother and the poison just gets very thick.

DONALDSON: Unlike at the moment, right?

ROBERTS: Well, no, it hasn't been as bad lately as it was in thelast 16 years.

STEPHANOPOULOS: And it seems like they're trying to avoid atleast in the design of this, criminalizing of policy.

ROBERTS: And just the whole atmosphere of getting that wayagain. On the other hand, the rule of law is terribly important. Andwe have to have it -- you know, we cannot operate in this countrywithout the rule of law.

DONALDSON: So which hand do you come down on?

ROBERTS: I'd probably come down on the rule of law.

WOODWARD: OK. And that's where Panetta landed by going to theCongress and saying, look, this was not disclosed. The element inthis that's very important is he stopped it. He said we're not goingfurther. I don't think it was particularly sinister. I also think,you're exactly right, Sam, that candidate Obama has met PresidentObama and he says I don't want wide disclosure of our secrets becausewe need them.

WILL: and here's why. When someone went to Panetta in the CIAand told him about this and Panetta went to the CongressionalCommittee, what then happened? It leaked.

WOODWARD: Actually, they wrote letters publicly and the letterscirculated.

STEPHANOPOULOS: Part of the reason they wrote those letters wasin defense of the speaker, Nancy Pelosi who had said --

DONALDSON: Do you know what the program we're talking about? Idon't.

STEPHANOPOULOS: Not what the problem is, but they had said theyhad been misled and the speaker has said the CIA has lied to us onmany occasions. I think she said they lie all the time. So this is ameasure of vindication, I suppose, for the speaker, even though shedoesn't want to claim it.

Well, we've all been discussing these things all week. Thecountry's been pretty absorbed by Michael Jackson, no question that itis -- I see Sam laughing over there, but it's also creating a realdebate over whether we've gone too far. And at the memorial serviceon Tuesday, Congresswoman Sheila Jackson Lee getting up before thecrowd at the memorial service and saying she was going to introduce aresolution, House Resolution 600, to honor Michael Jackson.


REP. SHEILA JACKSON LEE (D), TEXAS: That claims Michael Jacksonas an American legend and musical icon, a world humanitarian, someonewho will be honored forever.

REP. PETER KING (R), NEW YORK: He was a child molester, he was apedophile, to be giving this much coverage to him day in and day out,what does it say about us as a country?


STEPHANOPOULOS: What does it say, George Will?

WILL: I don't know. The mainstream media is preoccupied withthis, it's probably doing on margin less damage than it does when it'sdealing with public policy.

WOODWARD: Thanks a lot.

WILL: Synthetic grief is a growth industry in the world today.We saw this with the Princess Di thing. People who didn't know her,hadn't thought about her for 10 years, suddenly dissolved in tears. Idon't understand it. STEPHANOPOULOS: That's the part I wonder about. George calledit synthetic grief, Donna. But for a lot of people out there, it didseem fairly real, yet this is a person he never met.

BRAZILE: You know, Michael Jackson was, for members of mygeneration, he was not just the King of Pop, but he was someone whowas able to allow his music to go beyond just the black community. Itreally helped to define a generation, not just his music, but hisdance, his celebrity itself. So this was a real outpouring of grief.This was nothing synthetic. Part of my own childhood died whenMichael Jackson was announced dead.

STEPHANOPOULOS: Greatest entertainer of all time?

BRAZILE: I believe so.

WILL: Elvis died but the country didn't go berserk.

BRAZILE: Oh, we celebrated. He was also the king.

DONALDSON: Here's the different. I understand what you'resaying, some people say that Michael Jackson was a freak. I don'tlike the word. But the point is, this time, unlike the Elvis time,many of you, not you, of course, who loved him, want us to love him,too.

Well, do we have to love him? In other words, the coverage seemedto say, at his funeral, apparently, the tickets weren't there. A lotof empty seats. Listening to the commentary, you would think thatthis was terrible, there had been a crime committed, there had beenempty seats there. Hey, like him or don't like him, but don't makethe people who didn't like him --

BRAZILE: I'm along with my iPod so that I can bring you up todate with some of this music and then I'll teach you a couple steps.

DONALDSON: What happened to Mitch Miller?

BRAZILE: Who's Mitch Miller?

WOODWARD: What's the lesson in his life and unfortunately, thelesson is the failure of success. Phenomenal success, all of thethings that you're talking about are real, but there is the dark sidein this that he is --

ROBERTS: Come on. The real lesson is everyone's making moneyoff of this. Come on, the ratings are high. People are watching.All the news business is in trouble financially, and here's a storythat people are actually interested in and paying attention to. Idon't think it's much more complicated about that.

WOODWARD: Not all people. It's about rise and fall. And thereis a fall here. And I think somebody who is in that entertainmentworld, show business world, I did a book on John Belushi who died of adrug overdose very early in his life. And that, too, is the story offailure and success. DONALDSON: All the Jackson men?

STEPHANOPOULOS: I'll tell you one thing, Speaker Pelosi didn'twant to grab onto that resolution.

ROBERTS: No, that resolution was not happening.

STEPHANOPOULOS: No way that is going to have a vote in the Houseof Representatives.

BRAZILE: But they gave him a moment of silence and that was afitting tribute to a king.

STEPHANOPOULOS: And that's where we have to end it right now.This is going to continue in the green room.


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