Roundtable I: State of the Economy

Peggy Noonan, George Will, Steven Rattner, and Katrina vanden Heuvel.
10:26 | 07/28/13

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Transcript for Roundtable I: State of the Economy
More from the roundtable joined by george will, peggy noonan, former counsellor to the obama treasury department, steven rattner. And katrina vanden heuvel. Let me go back, the president is not going to negotiate over the debt limit, but it's going to work out. The white house is betting that the republicans are going to cave. The republicans know this is a weak lever to move the world. The debt ceiling always gets raised. What interested me about what he said was, he's looking back and saying the recovery is as bad as it is, and it is bad, is what happened in the summer of 2011 over the debt ceiling. That's pretty -- that did hurt confidence, didn't it? Let's look at the recovery, george. Now in the fifth year of a recovery. There are 2.2 million fewer jobs than there were in the pre-recession. Four and a half years in now, and after the recession of -- of 1981, '82, we were back in 12 months. 31% of americans 18-35 are living with their parents. That ought to scare parents. That's one of the reasons the president gave the speech. He said he wanted to break this destructive damaging framework, focusing on deficits in washington. He wants to get back to investments that will create jobs. This is where I wish he had been for a while. He's gone to the american people, exposed the republicans as the wrecking crew. If he hadn't sabotaged him in the last couple of years, we would have seen the common sense policies the president is now advocating for in infrastructure, health care, education. This is what we need to break the terrible inequality that's not simply a moral problem, but a bad economic political problem. We're on a better course, but it's going require the support of people outside. And you see in the democratic party, a new level of commitment as social issues unify them, elizabeth warren, sherrod brown, they have brought broader, more populist voices. I agree with that, but peggy noonan, the president going back to the country one more time, it's unclear that these speeches are doing much to move public opinion, much less washington. Yeah, I think that's true. When the white house calls it a pivot, somebody said it's probably the tenth pivot to the economy the president has done since he came in. I noticed that one of the speeches it went over an hour. There was a heck of a lot jammed in. That tells me something, it said we're not sure exactly what to say, so we're going say everything, but a speech about everything is a speech about nothing. Beyond that, I think every president in the intense media environment we have now, certainly every two-term president, gets to a point where the american people stop listening, stop leaning forward hungrily for information. I think this president got there earlier than most presidents. And I think he's in that time now. In a more fractured media environment as well, steven rat rat -- ratner, if speeches don't do the job, is there anything congress -- if congress isn't going to do the job, is there anything the president can do on his own? He said he was going to use executive authority, there are various levers and things, he mentioned detroit, there are bits and pieces. Detroit, he's not going to follow your advice that you wrote about with the federal assistance. We'll get to that. I have a different view. We have a system of government that requires consent from the congressional branch as well as from the executive branch. There's a limit on what he can do. thing to go out and call out, needs to do something on the economy. I find it extraordinary we're living in a world of 7.6% unemployment. I'll agree the recovery is certainly slower than anyone could want. Congress is doing nothing. They passed 30% fewer bills than any other congress in modern history. This congress has passed fewer still. You may say it's great, pass fewer laws. But there's work to be done, and congress should do it. Passing fewer laws, but comparable to previous congresses in legislative pages. They just jump them into come prehence I have legislation. Your argument is that republicans are at fault because of the 753,000 jobs created this year, 575,000 have been part-time. But it's not the republican's fault that work force participation has declined during the recovery. First of all, we have accepted in this country a level of joblessness that should not be the new normal. But if you had a republican party that was willing to do common sense things that republican parties of previous years, eisenhower, investing in infrastructure, for example, you would have seen the ability to see growth. And that has not happened. You had a speaker, john boehner last week who said his job is to repeal, not pass legislation. That is not a constructive congress at a time when I would agree, this recovery is fragile. I think that is the function of a country and a party, both parties, which have said that austerity -- deficit reduction is more important than addressing joblessness. That's the problem in these last few years. That is the real crisis. Peggy, the pressure created by the sequester, real cuts, causes some republicans to join democrats to try to undo it. Maybe that will happen. I haven't heard about negotiations or talks or serious signaling that is going on, which is something that always confuses me a little bit about this administration. Katrina, I think part of the problem here is that the president at some point decided these republicans can't be dealt with. They're recalcitrant, it just can't work. My feeli is no president can say that. You got to try to make it work. Tip o'neill disliked the president, they made it work. It always seems there's a lack of sway in this white house. The president's going up to the hill this week to meet with congress leaders. You can say what you want, but the house republicans want not just sequester, the appropriations bills are far deeper cuts, massive cuts. Look at the transportation bill, cut $5 billion, the senate wants to add $5 billion. The house is not just saying sequester, it's a terrible things, we're cutting infrastructure, cutting r&d, cutting the stuff we should be investing in. But I think the president has gone to the hill, had them to the white house, out in the field and trying to make his case. These republicans may cripple the credit markets in order to ensure 30 million americans do not have health care. We speak from the progressive side of the aisle. People have been frustrated that the president has been unwilling to call out the republicans. There was a lot of playing footsie in 2011. Where did that get him? I don't know where it heads, because this republican party is not interested in legitimate, fair, common sense compromise. Toward the end of the speech that threatened never to end, the president gave his idea of reaching out to republican s. You know, there are a lot of republicans who agree with me, they tell me so in private, trust me. But he said they're afraid of their constituents, they won't do it. In other words, there are a few intelligent republican who is recognize the brilliance of my policies, but they're moral cowards. Now that's his approach to the republicans? I love partisan alliances. We have agreed on things over time. The most exciting thing in congress last week were the two coming together to say enough to nsa surveillance without accountability. It did not pass, however. We have to take a break. Quickly back to you, steve. On the question of the detroit bailout. You managed the auto bailout. The president wrote a piece saying he should consider federal assistance. Jack lew is there, comment on it. There is a difference between a bailout and rescuing the credit and avoiding the bankruptcy process and some help. I recognize washington is not going to undo this default and pay off the bondholders. But you have a situation where 80% of the pain is borne by the workers and retirees if it goes through. You have a situation, I have read that whole plan, and i don't believe it can solve detroit's problems. They need investment, that's where the federal government and the state should help. Can't solve the problems. The problems are cultural. You have a city, 139 square file miles, you can graze cattle in vast portions of it. Dangerous herds of feral dogs there. 3% of fourth graders reading at the national math standards. They are functionally illiterate. 79% of detroit children are born to unmarried mothers. They don't have a fiscal problem. They have a cultural collapse. That's insulting to the people of detroit. There's a serious discussion about the future of cities in a time of deindustrialization. But they have been a victim of market forces, and I think what steve said is so critical retirees and workers should not bear this. And it should not be about greedy public unions and about fiscal responsibility -- he said the people are no more to blame than the victims of hurricane sandy, because apart from voting, you said. What did they vote for? For 60 years, incompetence, malcontents. And in some cases, criminals. Get the last word. That's fine, leave them sitting in exactly the situation you just describes, or in the spirit of america trying to help people who are less fortunate, victims of natural disasters or their own ignorance or whatever, reach out and try to help them and reinvent detroit for a couple billion dollars, this is small potatoes, or leave them sit with feral dogs for the rest of their lives? Anarchy. We have to take a break.

This transcript has been automatically generated and may not be 100% accurate.

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