'This Week' Full Transcript: Dec. 13, 2009

Larry Summers and Eric Cantor on jobs, plus a powerhouse Roundtable.


DECEMBER 13, 2009




[*] STEPHANOPOULOS: Good morning and welcome to "This Week." The economy front and center.


PRESIDENT BARACK OBAMA: We are not yet creating jobs at a paceto help all those families who've been swept up in the plunge (ph).


STEPHANOPOULOS: Jobs, health care, deficits.


(UNKNOWN): This is the greatest act of generational theft...


STEPHANOPOULOS: What more must the president do? How willCongress respond?


(UNKNOWN): This job killing agenda is making it worse.


STEPHANOPOULOS: Questions this morning for our headliners, thepresident's top economic adviser, Larry Summers, and the number twoRepublican in the House, Eric Cantor.



OBAMA: Clear-eyed, we can understand that there will be war andstill strive for peace.


STEPHANOPOULOS: Is the Nobel speech an Obama doctrine? That andthe rest of the week's politics on our roundtable with George Will,Arianna Huffington from the Huffington Post, former White Housecounselor Ed Gillespie, John Podesta from the Center for AmericanProgress, and April Ryan of American Urban Radio Network.

And as always, "The Sunday Funnies."


CRAIG FERGUSON, TALK SHOW HOST: Did you see President Obama'sChristmas card? Some people are angry that it doesn't contain theword "Christmas," but I think the message is there. The card showsthree wise men asking for bailout money. It's very good...

(END VIDEO CLIP) STEPHANOPOULOS: President Obama is just back from Oslo with hisNobel, heading back to Copenhagen for those climate talks, leavingbehind health care talks that appear to be stalling in the Senate, andpoll numbers that have been falling to their lows of 2009. Ourroundtable is standing by to debate all this. They may weigh on Tigertoo, but let's check in first with our headliners, Larry Summers,President Obama's top economic adviser, and Congressman Eric Cantor,the House Republican whip. Gentlemen, welcome to both of you.

SUMMERS: Good to be with you.

STEPHANOPOULOS: And Mr. Summers, let me begin with you, andlet's start with just the overall economic situation right now,especially on jobs. We saw that drop in unemployment in November, butprivate economists predict that unemployment is likely to head backup. Mark Zandi sees it peaking at about 10.6 percent next year.Others say it could go up to 11 percent. Is that in line with yourforecast?

SUMMERS: George, here is what I know. We were talking aboutdepression, we were talking about the financial system collapsing.Today, everybody agrees that the recession is over, and the questionis what the pace of the expansion is going to be.

These things happen in stages. First, GDP goes up. That hashappened. Then, hours that are worked by workers who already have jobsgo up. That's starting to happen. Then employment goes up. We gotvery close to that this year, this month, with only 11,000 jobs lost.And then unemployment starts to come down. So these problems weren'tmade in a month or a year, and they are going to take a substantialtime to solve. But what we can take satisfaction from is that we'vewalked back from the brink. And you know, forget what we say. Mostprofessional forecasters are now looking for a return to job growth byspring.

Now, when job growth starts, more people are going to be lookingfor work, so it will take a little longer for the unemploymentstatistics to come down, but make no mistake, we were losing 700,000 amonth when President Bush turned the economy over to President Obama.The number last month was 11,000.

STEPHANOPOULOS: Let me pin you down on that, though. Youbelieve the economy is actually going to be creating jobs in thespring.

SUMMERS: That is the judgment of most professional forecasters.That's right, George.

STEPHANOPOULOS: So given that...

SUMMERS: If you look at the employment statistics, they willshow employment growth. They were showing losing 700,000 a month.Last month, they showed losing 11,000 jobs. They will bounce frommonth to month, but I believe that, as do most professionalforecasters, that by spring, employment growth will start to beturning positive. STEPHANOPOULOS: So given that, we saw the president allowed (ph)some job creation ideas earlier this week. What is the upper limit onwhat he will sign into law in terms of new job creation measures earlynext year? $100 billion?

SUMMERS: The president is going to work with Congress to dowhat's necessary. George, it's a bit of a Washington thing to putthis in terms of price tags. For example, the president is doing awhole set of things, working with other...

STEPHANOPOULOS: But the American people want to...


STEPHANOPOULOS: It's not a Washington thing.

SUMMERS: To promote our exports. That doesn't have a -- thatdoes not have a direct cost. But the president has talked about doingthings for infrastructure. It doesn't cost anything to encouragebanks, as the president will be doing, to meet their responsibilitiesand expand the flow of credit to small business.

We're in a very different -- we are in a very special kind ofeconomic situation, and frankly, jobs have to be the top priority, andevery bill is going to be a jobs bill going forward. We hope we canfind common ground. We emphasize support for small businesses,repairing the nation's infrastructure. These ought to be things thateverybody can agree on.

STEPHANOPOULOS: Well, let me just pin you down, though, one moretime on that. You did lay out a number of ideas that don't costmoney, but extending unemployment costs money. Aid to states andlocal governments costs more money. Investing in infrastructure costsmoney. So what is the upper limit on what President Obama will sign?

SUMMERS: The president is going to do what's necessary torespond to this crisis. He's put a figure of $50 billion on theinfrastructure support that he proposes. His proposals onunemployment insurance are primarily a continuation of the legislationthat the Congress has already passed and that has been put in place.And he recognizes that when we take new steps, we have to do it in thecontext of a framework that is fiscally responsible. We can't justlook in isolation at one measure. We've got to look at the $8trillion in deficit over the next 10 years that the presidentinherited, and start making progress with respect to those deficits.That's what the president did in his budget. That's what the healthcare bill does with the most consequential set of health care reformsthat have ever been put forward, and they are now on the brink ofpassage.

STEPHANOPOULOS: But let me ask you about on health care, becausethe president has said consistently that he wants health care to bendthe cost curve, to bring overall health care costs down. But thisweek, the administration's chief actuary for Medicare and Medicaidconcluded that the Senate health bill would actually increase nationalhealth spending by about $234 billion over the next 10 years. Can thepresident sign legislation that actually increases national healthspending?

SUMMERS: We'll see what legislation ultimately emerges. Thepresident is going to sign legislation that helps the budget over thenext 10 years, helps the budget more over the 10 years after that, andwe're already seeing employers start to respond to the provisionsdirected at influencing health insurance costs. Over time, when thecommission is in place, we will star to see further reforms inMedicare.

And look, George, we've taken an incredibly conservative approachto this. The program includes, for example, significant support forpreventive care. That's not being given any credit, but we know thatover time, better health habits for all of us can reduce costs. Soyes, the legislative process isn't pretty, and it's certainly notpretty on health care. But we will get to a point where we havesignificant reductions in health care costs.

STEPHANOPOULOS: So bottom line, are you saying that if theadministration's own actuaries say that the bill on the president'sdesk increases health care costs, he will not sign it?

SUMMERS: I am saying that the president's bill will meet whathas been the agreed test, that the Congressional Budget Officeassesses the bill and concludes that it reduces the budget deficit.To do anything else would be irresponsible. I am also saying that inthe view of most experts, the judgments made about imposing a fee onCadillac policies, the judgment included in the bill with respect totaking politics out of the process of reimbursing health care, thesupport for prevention contained in the bill goes after some of thefundamental problems in the health care system.

STEPHANOPOULOS: I understand that, but if I heard you correctly,you are saying the bill must reduce the deficit but does notnecessarily have to reduce overall health care costs.

SUMMERS: Look, the criterion for passing a bill is what happensto the budget. That's our budget process. I am telling you thatwe're very confident that this bill will reduce health care costs inwhatever form ultimately emerges from the Congress.

STEPHANOPOULOS: OK, let me ask you just a final question.President Obama is calling in the heads of some of the country'sbiggest banks tomorrow to try to get them to lend more to smallbusinesses and consumers, and that seems to be a big failing so far.You point out that the administration has stabilized some of theprograms, have stabilized the financial industry. But we see thebanks making money, paying back the TARP funds, but not reallyincreasing lending. What more can President Obama do to encouragethat, or is the bully pulpit really his only option?

SUMMERS: Look, he's going to have a serious talk with thebankers. The country did incredible things for the banking industry.Those things had to be done to save the economy, but no major bankwould be intact, in a position to pay bonuses, if that extraordinarysupport had not been provided. The bankers need to recognize that.They need to recognize that they've got obligations to the countryafter all that's been done for them, and there is a lot more they cando, and President Obama is going to be talking with them about whatthey can do to support enhanced lending to customers across thecountry. We were there for them. And the banks need to do everythingthey can to be sure they're there for customers across this country.

STEPHANOPOULOS: OK. Thank you very much, Mr. Summers. Let menow bring in Congressman Cantor. And you heard Larry Summers there,Congressman Cantor. The president is going to be bringing in thebanks for a serious talk tomorrow. What should he say to them?

CANTOR: Well, listen, George, no question that there is a stilla deprivation of credit in this country for small businesses. Andwhen the president meets with the bankers, I hope that the discussioncenters on what seems to be a real overreaction, if you will, on thepart of some auditors in the regulatory arena that are looking at risktaking as something that just shouldn't be done at all. We know inour economy that the prosperity we know has been built on calculatedrisk. What we've got now is a situation where there are so manyperforming loans out there that seem to be called by regulators,because we still have a depression in our asset values. And what I'mhopeful that the discussion occurs is about that, is about trying toget some type of transparency on the part of what regulators areasking of our banks, so that we understand and policy makers inWashington and frankly the small businesses that are looking to thebanks can understand why it is that when they go to their bank,they're not getting their loan.

STEPHANOPOULOS: And it comes in the wake of the House passage onFriday of this financial reform legislation. Not a single Republicanmember of Congress voted for that bill. And yesterday, PresidentObama accused House Republicans of colluding with lobbyists in thefinancial industry to hurt American consumers. Listen.


OBAMA: Just this week, Republican leaders in the House summonedmore than 100 key lobbyists for the financial industry to a pep rallyand urged them to redouble their efforts to block meaningful financialreform. We can't afford to let the same phony arguments and badhabits of Washington kill financial reform and leave Americanconsumers and our economy vulnerable to another meltdown.


STEPHANOPOULOS: Your response?

CANTOR: Listen, none of us want another meltdown. None of uswant the kind of abyss that we were peering into this time last year.There is no question. And we also want to make sure that people got afair shot in terms of accessing good investments for their future andtheir retirement. The bill that came to the floor, frankly, was abill that created a permanent bailout for banks. It put Washington inthe seat to determine which banks will fail and which will succeed,and it extended TARP in terms of making it a permanent program.That's not what America wants. We also have a study that we saw that showed that this bill thatcame to the House floor that got no bipartisan support would increaseinterest rates almost 1.5 percentage points, and the prediction wasthat that would kill about a million jobs over the next five years.

Now, like it or not, we are an economy that is built on credit.We've got to get some reason back into the game here. Right now,investors, small business people are staying on the sidelines. Theyare not expanding. They are not hiring. There is a reason for that.They can't seem to understand where Washington goes next. And whatthe Republicans believe is, Washington has got to stop its activismand start to get some common sense back into the regulatory mode sothat people can once again figure out how to go about making theirinvestments and doing so with some transparency.

STEPHANOPOULOS: We've seen zero Republican votes on thisfinancial reform legislation, one Republican vote in the House onhealth care, zero on the stimulus. Clearly the Democrats in your vieware owning this economy going forward, share any blame if it goesdown. If the economy recovers over the next year or two, are youprepared to give Democrats all the credit?

CANTOR: George, when we heard the unemployment numbers come outa few weeks ago and there was a reduction in the number of joblessfolks, absolutely, we want to embrace that. But I can tell you, youlook to see the record of this administration and the majority inCongress over the last 11 months, we have seen unprecedented spending.The deficit has increased enormously. If you look at the kind ofdeficit that we've incurred over the last three years that theDemocrats have been in control of Congress, 60 percent of the overalldeficit from the last 10 years has occurred in that period. Andfrankly, with the incurrence of that debt, we've seen very littleresult.

That's why we believe very strongly that we ought to chooseanother way. Last week, we were at the White House, called there bythe president. We presented our no-cost jobs plan, and we said, youknow what, none of us like where we are. We all want to get Americansback to work. And there is a way that we can do it by not costing thetaxpayers any more. We can do so by finally blowing the whistle onspending and see if we can focus on the kinds of things that Americanbusinesses, small and large, are looking for in terms of trying toreestablish some certainty so we can grow this economy again.

STEPHANOPOULOS: OK, Congressman, thanks very much for your timethis morning. That debate will continue.

CANTOR: Thank you, George.

STEPHANOPOULOS: Right now, right here on the roundtable, I'mjoined by George Will; Ed Gillespie, former counselor to PresidentGeorge W. Bush, former chairman of the Republican National Committee;April Ryan of the American Urban Radio Networks, covers the WhiteHouse for them. John Podesta, former chief of staff to PresidentClinton, now president of the Center for American Progress, andArianna Huffington of the Huffington Post. Welcome to all of you.

And George, let me just begin with you on this debate we justsaw. Every single major issue dealing with the economy has been apartisan issue this year. Both sides are basically all in. All in onthe economy.

WILL: They all understand that it's job creation is issue No. 1,two, three. But I think, George, there are probably three reasons whywe're not creating jobs. First is, why lend? If you're a bank andyou're getting money free from the government, you can turn around andinvest in government bonds or blue chip equities or risk-freecorporate bonds, why lend to small businessmen who haveentrepreneurial dreams but are risky? Second, the economy normallyhas one great engine, consumer spending. It has one fuel for that.It's debt. But the American people right now are deleveraging, andthat's probably over time a good thing to shed that.

Third, people disagree as to why the New Deal failed to cureunemployment, but a plausible explanation is uncertainty paralyzed thebusiness sector. That is, they didn't know what the rules were goingto be. Today, we have health care, that's an uncertain mandate forthe future. You have cap and trade in the offing. You have contractsbeing shred as in the Chrysler bailout. You have Congress just thisweek saying, well, maybe judges should be able to rewrite mortgages.The pandemic uncertainty is freezing business activity.

STEPHANOPOULOS: Any way to come back?

PODESTA: Oh, sure. I think that you quoted Mark Zandi at thebeginning of the program who was John McCain's top economic adviser.He said that what the president has done, the interventions he's made,has caused 1.1 million jobs from being lost, that unemployment wouldbe over 11 percent. I think what the president needed -- what he didat the beginning of the year, what he needed to do was stabilize theeconomy. You see it coming back, as Mr. Summers said. You'll see jobgrowth coming this spring. The question is, you know, when that willcome, how robust it will be.

The one thing I think I agree with George on is the president,tomorrow, has to find a way to get credit flowing, particularly tosmall business. I'm not sure he's meeting with the right people.He's meeting with the big bankers. He needs to be meeting with theregional bankers, community bankers, and find ways to get creditflowing to those small businesses (inaudible) engine of growth in theeconomy.

STEPHANOPOULOS: It is unclear, and Larry Summers didn't quiteanswer it, it doesn't seem like there's much more -- much beyond thebully pulpit that the president can do right now on this.

HUFFINGTON: There's actually a lot more that he can do. Infact, for Larry Summers to say that the president needs to encouragethe bankers to lend is really for the president to give up on hisresponsibility, which is to be the head of the executive branch. Heis not a pundit cajoling and admonishing, which he's been doingconstantly. Remember, he's gone to Wall Street. He has spoken tothem. He talks to them on the phone. Larry Summers talks to them onthe phone. Tim Geithner talks to them on the phone.

George gave you the answer. They're not going to do that. Whileit's in their interest to continue to borrow money at practically zerointerest rate and trade that money and have the safety net of thegovernment.

HUFFINGTON: Paul Volcker gave a very impressive speech in Berlinin the last couple of days, where he basically said, we need to endthe safety net for the banks.

While the safety net is there, Goldman-Sachs returned the TARPmoney, but it still has $21 billion in FDIC guarantees. That has toend. And Larry Summers -- it was so clear from your interview,George, is the wrong man to be heading the president's economic team.His response is so lackadaisical, no sense of urgency. He keepsquoting the same forecasters who predicted, remember, thatunemployment would not go beyond 8.5 percent.

STEPHANOPOULOS: Yet -- yet, April, he did say, and I think itwas pretty significant, that he agrees with those forecasters(inaudible) job creation beginning this spring.

RYAN: That may be true for mainstream America, but this week, aswe've seen, there's a problem in the black community. The overallunemployment rate, right now, in this country, is 10 percent; African-Americans, 15.6 percent.

And the highest numbers right now from November, black teens,49.4 percent. And you have several issues here in the blackcommunity. You've got the Congressional Black Caucus and otherleaders saying, yes, there needs to be a targeted approach. Becauseduring the Bush and Clinton years -- you know, in 2001, at the end of2001, blacks did not return from pre-recession times financially.

STEPHANOPOULOS: So what would that mean? What would thetargeted approach entail?

RYAN: A targeted approach means do something (inaudible) forbusinesses maybe to hire. Not only that; you have issues with thefederal government. The federal government itself is falling short ofmeeting its minority set-aside contracting goals.

And many in the African-American community say that, if that werethe case; if they were to fix that problem, they would themselvescreate jobs.

STEPHANOPOULOS: And we actually saw, Ed Gillespie, a little bitof resistance from the Congressional Black Caucus during thesenegotiations over the financial reform. But the other tension theadministration is facing is how to create these new incentives withoutblowing a hole, even a bigger hole in the -- in the budget, andincreasing the deficit even more. GILLESPIE: Well -- and they're trying to have it both ways. Youcan't take the $200 billion that's not been spent on the TARP fundsand then use it for stimulus, or money that's being paid back that'ssupposed to go to debt reduction or deficit reduction, and use it onstimulus and say you're also trying to reduce the debt.

The fact is, the reason we're seeing this partisan divide,George, is there's a major philosophical difference. The Democratsthink that the answer here is more government invention in the economythan we have already had. Republicans are saying, whoa, we need toslow -- tap on the brakes here, a little bit, and provide somecertainty in the marketplace.

Because people are not investing because they don't know whattheir new taxes are going be; they don't know what their new healthcare costs are going to be; they don't know what their new energycosts are going to be, as a result of government policy.

STEPHANOPOULOS: Do you see any risk in that strategy of having-- there's such a clear partisan division?

GILLESPIE: Not, not right now. I think it's a time to stand onprinciple. I think what Eric Cantor laid out, the no-cost, you know,initiative, that says, let's provide some certainty in the marketplace-- and we're trying to create private-sector jobs.

And I think, to your question about, well, what about the creditdue versus blame for -- you know, for unemployment is going up, look,that would be the right problem to have as a Republican.

Let me say, if we're creating jobs in this country, I'd rathersee job creation than not. That would be -- you know, as aRepublican, if the debate is, well, what's the credit; where's it due,that's the right problem to have.

I don't anticipate that. I thought it was interesting that Larryaccelerated his anticipation for job creation to begin into thespring. In the past, the White House had been saying the second halfof next year, which would be July. Either way, I'm not sure it'sgoing translate, frankly, into the 2010 elections.

HUFFINGTON: But, you know, this is meaningless. Larry Summersaccelerating his forecast is so utterly meaningless. I don't evenknow why we're bringing it up again. Because all the forecasts -- alltheir forecasts...

(UNKNOWN): Well, what if he's right?


HUFFINGTON: All their forecasts have been completely wrong. Imean, his forecast on foreclosures, remember, they took this verylackadaisical approach to foreclosures. And, right now, one in fivemortgages in this country is in default or foreclosure. I mean, thisis a major crisis, and his whole stand has been to just say, thingswill get better; things will get better. PODESTA: We should have had Arianna on with Larry.


I want to come back to Eric Cantor, which is no cost, no jobs, noideas. I mean, it seems to me that the Republican Party on the Hillhas become the party of no.

Maybe I say that it looks, a little bit, from his defense of noregulation that it's become the party of -- of Bush, that we've seenhow that movie played out. It ended in the -- in financial meltdownand the great recession.


STEPHANOPOULOS: Is that right, that it's no risk, this strategy?

WILL: I think there is no risk at this point. Because I thinkthe American people understand that the greatest job creation machinein the history of the world is a reasonably lightly taxed and lightlyregulated economy.

But one idea, John, that, happily, we're not hearing. When webegan this year with...

PODESTA: George Bush had the lowest job creation since World WarII, lightly taxed, lightly regulated...

GILLESPIE: Fifty-two months of uninterrupted job creation, thelongest in the history of the United States of America.

PODESTA: ... major recession.

STEPHANOPOULOS: What's the one idea?

WILL: The one idea that we seem to have dropped, happily so --remember the phrase was "shovel-ready"? We were going to creategovernment jobs.

It put me in mind of a great story Milton Friedman used to tell.He went to Asia in the 1960s and was proudly taken by the governmentto see a public works project. They were building a canal. He wasstruck everyone was digging the canal with shovels. Friedman says,why no heavy earth-moving equipment?

They said, oh, this is a jobs program. So Friedman says, whydon't you give them spoons instead of shovels?


I think we understand, now, the sterility of government trying tocreate jobs.

STEPHANOPOULOS: We will take -- we will take a break on that.We're going to be back in just a minute, and we're going to answer thequestion, why were Sarah Palin and Newt Gingrich praising PresidentObama?

And later, the Sunday funnies.


SETH MEYERS, "SATURDAY NIGHT LIVE" CAST MEMBER: During theKennedy Center Honors on Sunday, President Obama presented an award toBruce Springsteen, saying, "I'm the president, but he's the boss," atwhich point Springsteen ordered our troops out of Afghanistan.




OBAMA: I am at the beginning and not the end of my labors on theworld stage.

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: He clearlyunderstood he had been given the prize prematurely.

OBAMA: There may be times when nations find use of force notonly necessary, but morally justified.

PAT BUCHANAN, MSNBC CONTRIBUTOR: It was realistic about what theworld is like.

OBAMA: Clear eyed, we can understand that there will be a war andstill strive for peace.

SARAH PALIN, FORMER VICE PRESIDENTIAL CANDIDATE: I liked what hesaid, war is the last thing any American, I believe, wants to have toengage in, but it's necessary.


STEPHANOPOULOS: President Obama drawing an unlikely ally withhis Oslo speech, accepting a Nobel Peace Prize. Let's debate it hereon the roundtable. I'm joined again by George Will, Ed Gillespie,April Ryan, John Podesta and Arianna Huffington.

And George, a lot in that speech. The president clearlyjustifying the use of force but also emphasizing engagement with ourenemies in saying that, "When we fight, we must hold ourselves to ahigher standard." Does it all add up to an Obama doctrine?

WILL: I don't think so. St. Thomas Aquinas was late to the gametalking about just wars so people are arguing that there is such athing as a just war for a long time. I thought the most interestingpart was his acceptance of the fact that ethnic and sectarian fightingis the new cause of turmoil in the war. This marks the end of whatPat Moynahan used to call the liberal expectancy, that was the faiththat once science and progress and education had reached a certainlevel, that we had reached presumably in the 20th century, thatreligion and ethnicity as driving forces would lose their saliency.In fact, they're now more virulent than ever.

STEPHANOPOULOS: And rejection of utopianism in all its forms.

HUFFINGTON: Well this is good and of course I don't think thereare many people who would argue there are no reasons for wars. Imean, after all, this is the peace prize, it's not the pacifist prize,so I didn't quite understand all that big defense of the necessarywars.

And for me, the main problem is the same problem I had with hisWest Point speech which is when he said that my job is to protect theAmerican people from threat. Of course, everybody would agree withthat. But he has not defined what the threat coming from Afghanistanare. And he did not define the strengths in the West Point speech.He did not define them at any point. And that's really at the moment,the main problem with his credibility because where are the threatscoming from? The Taliban? The 100 al Qaeda left in Afghanistan?

And remember in 2002, he gave this defining speech that in manyways is responsible for his being president, which was against the warin Iraq, when he said, "I'm not against all wars, I'm against a dumbwar." And right now, Afghanistan is the gold standard of a dumb war,immoral and unnecessary.

PODESTA: Well, I think that I find it ironic that theconservatives all embraced the speech. It seemed to be a repudiationof conservatism. They made the argument that because America wasexceptional, the rules didn't apply to us. This was really rooted, Ithink, in post World War II. This sounded like FDR to me, that he wassaying that constraining our power, following the rules of the road,not torturing people, applying the Geneva Conventions was the sourceof American exceptionalism, that we led the world towards that.

With respect to Arianna's point about what the threat is, I thinkhe was fairly clear that in the context of both the speeches that hegave, that we need to go after the people that attacked us. And Ithink that they've done that. They've done that. You could argueabout whether this is the right strategy to do that. They'reeffectively using predators in Pakistan, they're doing more inPakistan over the last 10 months.

HUFFINGTON: You now sound like George Bush, you know that thepeople who -- the people who attacked us are not...

PODESTA: That's the first time I've been accused of that.

HUFFINGTON: The idea that the people who attacked us are inAfghanistan.

PODESTA: Are in Pakistan.

HUFFINGTON: But they are going to Pakistan.

PODESTA: Well, I would beg to differ.

HUFFINGTON: We're not sending 30,000 more troops to Pakistan. PODESTA: I said you could argue about the tactics. But I wouldbeg to differ that we're not going Pakistan.

HUFFINGTON: The announcement he made --

STEPHANOPOULOS: There was a drone strike just this week whichtook out the number four or five member of al Qaeda.

HUFFINGTON: Right, but that's not what he announced. Thecollection is in Afghanistan.

STEPHANOPOULOS: And this gets to an important point, April, andyou've been covering the White House all this year. It turns out thatin this last 11.5 months, President Obama has launched more dronestrikes in Pakistan than in the entire eight years under PresidentBush.

RYAN: Well interestingly enough, this president wants to showthis country and the world that he is actively trying to prevent anytype of attack on the homeland.

And yes, drone attacks are something different from actuallysending troops because number one, that territory, that land issomething that is not traditional battlegrounds. It's mountainous.It's very hard to get through. And drone attacks I guess are betterto do than doing troop movements where lives would be lost.

But going back to the speech and getting back on that, as well, Ithink the president in the speech, he was trying to target Americansto help one, bring up his poll numbers because a lot of people areupset with the fact that this war is not going to produce a militarywin, i.e., drone attacks.

Also, you have issues where this president has to make the casefor war again to bring peace. But at the same time, as the head ofstate, this president has to say, war is always an option for peace.So it's not like Dr. King talking phone violence. He has to talkabout war because peace comes with it.

STEPHANOPOULOS: And that was the irony of the speech. Ed, somepeople did look at this, some conservatives and say they did seePresident Obama basically adopting the policies of President Bush. Isthat how you saw it?

GILLESPIE: I didn't. I thought in some ways, the sense of moralclarity was positive and I appreciated that. I was less enthralled byit frankly than many of my fellow conservatives. I tend agree withJohn, not that he was right about what he said, and I will sound morelike George Bush, I suspect than you, but that he was implying thatour past actions had been immoral. And I don't think -- one, I thinkit's factually wrong, and two, I don't think it was right to do on theworld stage like that. So I'm not sure that it will withstand thetest of time as people think as a great speech.

STEPHANOPOULOS: Let me bring the debate back home because a lothappened on health care while the president was away as well. SenatorHarry Reid, the Democratic leader, came out Tuesday night, seemed toannounce that there was an agreement, an emerging agreement about the60 Democratic senators that would involve dropping the public option,replacing it with allowing most Americans, Americans who don't havehealth insurance from the employers to buy into something like themembers of Congress plan and also a Medicare buy in for people 55 to64. But by the end of the week, there was an awful lot of confusionon the Senate floor.


SEN. JOHN MCCAIN, R-ARIZ.: Right now, no member on this side hasany idea as to the specifics of the proposal that the majority leader,I understand has sent to OMB for some kind of scoring.

SEN. RICHARD J. DURBIN, D-ILL: I would say to the senator fromArizona that I'm in the dark almost as much as he is. And I'm in theleadership.


STEPHANOPOULOS: The number two Democrat in the Senate, GeorgeWill?

WILL: Well, the public option this week receded and was replacedby a public option on steroids, which is the buy-in on the part of 34million Americans between age 55 and 64. Only 3 million, well about 4million are uninsured. There are three basic political numbers thatwe ought to look at from this week.

CNN poll, 61 percent oppose the plan, 36 percent favor it.Second, today there are more Independents in America than there aremembers of either party. And the Independents are more ho hostile toCongress. Their approval rating of Congress is 14 percent below theRepublicans, which is 17 percent. Third, there was a state Senaterace in Kentucky this week. They nationalized it. It was in aheavily Democratic district.

WILL: The Republican was heavily outspent. He'd made this areferendum on Pelosi, Reid, and health care. The Republican won by 12percent.

STEPHANOPOULOS: So John Podesta, can the Democratic moderatesespecially in the Senate, the Mary Landrieus, Blanche Lincolns, BenNelsons of the world, hang together in the face of that kind ofopposition in the public?

PODESTA: I think so. Because I think we're at an historicmoment where we're going to expand coverage, bring down costs, endinsurance abuses. And I think there's beginning to form a consensus.We're kind of on the five-yard line, I guess. We're probably not onthe one-yard line. But we'll see what happens with the CBO score.

I think the other thing that happened this week was that thefreshmen senators, many of whom are moderates themselves, have puttogether a package to further restrain costs, produce more deliveryreform. That amendment was endorsed by the Business Roundtable andthe National Association of Manufacturers, people who have to pay thecost of health insurance on the employer side.

So I think that, you know, this is a process of moving the billforward. I think Reid will be able to get to 60. I'm still hopefulthat Olympia Snowe will vote for the bill, but you know...

STEPHANOPOULOS: She was pretty tough on the Medicare buy-in.

PODESTA: She was.

STEPHANOPOULOS: But Arianna, I want to ask you in particular. Alot of progressives all year long have been fighting for this publicoption. I have to say, I confess I haven't understood how it becamethe holy grail, especially since by the time it got through theprocess, it was a relatively weak option that wouldn't serve that manyAmericans.

For progressives, is the combination of being able to buy into afederal plan and a Medicare buy-in, as George Will said, the publicoption on steroids?

HUFFINGTON: Well, of course. You know, the name is not whatmatters. What matters is having real competition for the health careinsurance industry. That's what's been missing. Without thatcompetition, which the public option or Medicare on steroids canprovide, there's really no cost containment, and none of the thingsthat we're hoping this health care bill will achieve will actually beachieved.

The main thing, really, out of this whole process has been todemonstrate how broken our system is. I mean, it's really stunning.Tom Friedman said it best when he said we have these big problems andwe cannot any longer produce optimal solutions for these big problems,only suboptimal solutions. So you kind of go through all theseamendments, and it's just a series of suboptimal solutions. And theprocess of it has dragged on, has dramatically reduced the president'spoll numbers...

STEPHANOPOULOS: Yet, April, an article of faith inside the WhiteHouse is that passing health care will solve all political problems.They really believe that will have Americans look at the president inan entirely new way.

RYAN: It goes back to what you said about being the holy grail.This was something that was debated during the campaign. This wassomething that he got the American public to believe in, andultimately got into the White House for it. But what happens is ithas been the pinnacle, if this president can get this throughCongress, he ultimately can help shape 2010.

And -- but the issue is...


RYAN: No, no, no no, but let me -- but the problem is, theoriginal mandate is not there, covering all Americans. Yes, it coversmore Americans than what they have now, but that was the originalmandate. And the issue is competition. Yes, that's there, butcovering all Americans is a problem.


GILLESPIE: And this faith in the White House, George, isincreasingly being limited to the White House and I think less toSenate and House Democrats. And I think the White House, they areseeing what they believe, that this is good to get this done. And Ithink Democrats on the Hill increasingly believe in what they see,which is this polling data that shows if they do this, if they jamthis health care through with Democrat-only votes in the face ofoverwhelming public opposition, they're going to lose their majorityin the House. I think that's a real possibility. And they're goingto lose probably even their 60-vote margin -- definitely lose their60-vote margin, but maybe even get down to around 50 votes in theSenate.

PODESTA: The one thing they're certain of is failure on thesubstance will result in failure politically.


GILLESPIE: For the first time, I believe they're in a placewhere they may not be able to get there from here.

RYAN: It's not about a definition of a win just to win... (CROSSTALK)

HUFFINGTON: But 2010 is not about health care. Again, 2010 isgoing to be about the bailout and jobs. That's going to be theissue...


HUFFINGTON: ... bailout is overwhelming. Losing theindependents, the numbers that George mentioned are incrediblysignificant. Because remember, Barack Obama is president because hebrought in unlikely voters. He expanded the electorate. 71 percentof new voters voted for Obama. These voters are getting increasinglydisillusioned with the fact that there has been no fundamental change.That is the main problem the White House needs to address.

STEPHANOPOULOS: But does passing health care solve it? And thento pick up on Ed's point, it does seem like every time the SenateDemocrats get close and seem to have this psychology of victory, onemember -- whether it's Ben Nelson, Joe Lieberman, even Jim Webb, seemto say, wait a second, we're not there yet.

WILL: I think Republicans would prefer to stop the health carebill, but they think that if it passes 60-40, that means every singleDemocrat is the one responsible for passing a bill the country doesnot want.

STEPHANOPOULOS: Meanwhile, Tiger Woods.


STEPHANOPOULOS: Just a couple of minutes left, and he announceson Friday...


STEPHANOPOULOS: ... announces Friday indefinite, indefinite timeoff from the PGA Tour. The big question now, will his sponsors, likeNike, stand by him.


(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.

(UNKNOWN): I'm Tiger Woods.


STEPHANOPOULOS: Boy, it is almost impossible to look at that adanymore, almost impossible to see how Nike can keep that up for verylong. Already, April Ryan, we've seen Gillette start to questiontheir sponsorship, Accenture, AT&T, and we haven't seen -- I can'tremember the last time we saw public meltdown of a public figure likethis.

RYAN: It happens periodically. And unfortunately, we're seeinga meltdown of people turn around and watch YouTube, reading theHuffington Post, and finding out what's going on, the latest.

It's tabloidism. I mean, we're a society of reality TV, we readthe tabloids, we hear the things, and unfortunately, we are drawn in.But at the same time, you have to remember, Tiger Woods is human, butat the same time, he is this -- was almost a perfect American.

STEPHANOPOULOS: But he's also got an entire industry, GeorgeWill, on his back.

WILL: And he can put it back on his back for this reason. He'snot just a celebrity of the sort Daniel Boorstein (ph) talked about, acelebrity being well known for their well knowness. That's ParisHilton. We tend to forget, Tiger Woods is a really good golfer, andpeople are going to pay to see him do that, and people are going toforgive him and they are going to quit looking at him as an exemplar.

Remember, no telling how many more home runs Babe Ruth would havehit if he had gone to bed a little earlier and a little more oftenwith Mrs. Ruth.



STEPHANOPOULOS: ... victory for health care that solves theWhite House's problems is coming back and winning the Masters inApril, do it for Tiger?

GILLESPIE: Maybe next April. I think he would probably benefitfrom going underground for a while. You know, tending to his homesituation, and then coming -- if I were he, I would stay low, and thensurface after a year.


PODESTA: I think those endorsements are going to come down.You'll see him off the screen. He's got to, really, I think over thecourse of the next year, and then he can, if -- you know, if hisgame's back, he can come back. And you've seen people...

STEPHANOPOULOS: But there's nothing he can say now that canbegin to fix this.

PODESTA: Only that I'm in therapy.


HUFFINGTON: It also depends on how many more mistresses aregoing to appear. Remember...

STEPHANOPOULOS: Haven't we passed critical mass at this point?


HUFFINGTON: He has won 14 majors. And right now, there areabout 11 mistresses. And any minute now, they're going to overtakethe majors.

RYAN: But you know what, one thing about Tiger Woods and golf,the golf world needs Tiger and Tiger needs golf. And he brought somany people, so many -- I mean, young ethnic kids into the game ofgolf. I mean, years ago, you would hear these kids saying, oh, Idon't play that, that's not my sport. And so many kids thoughteverything was open to them once Tiger did it.

GILLESPIE: I was just going to say, one of the things about him,there's jokes and everything obviously all over the Internet, but youknow, it's really -- what strikes me about it is it's remarkably sad.I mean, this is a guy who is the best golfer in the world, one of themost...


GILLESPIE: Ever, $1 billion, married to a swimsuit model. Imean, you're watching this, you think this is -- this is like, youknow, this guy has got everything that he could possibly want, andclearly unfulfilled. You know, and there's just something remarkablysad. And in this season, you know, a good time for people to counttheir blessings in terms of you don't need a billion dollars and youknow, to bring happiness.

HUFFINGTON: A lot of teachable moments. Both serious ones, likethe one that Ed brought up, and not so serious, about any man whowants to cheat on his wife, remember, texting is the new lipstick onthe collar. And don't date men -- don't date women, as Maureen Dowdsaid, who have eight by 10 glasses.

STEPHANOPOULOS: Arianna's rules. We're going to have to end --this roundtable is going to continue in the green room.