'This Week' Transcript: Goolsbee and Rauf

Transcript: Goolsbee and Rauf

ByABC News
September 12, 2010, 5:00 AM

September 12, 2010 — -- AMANPOUR: Welcome to our viewers here and around the world. I'm Christiane Amanpour, and at the top of the news this week, as the global economy recovers, is the United States falling behind?


OBAMA: It's understandable that people are saying, what have you done?


AMANPOUR: The president proposes new spending and allowing the tax cuts for the wealthy to expire. But is it good economics, good politics? Questions this morning for President Obama's newly appointed chair of the Council of Economic Advisers, Austan Goolsbee.

Then, remembering 9/11, and nine years, the growing hostility towards American Muslims.


(UNKNOWN): We are treated and talked about today as if American Muslims are not Americans.


AMANPOUR: An exclusive interview with the imam who wants to build an Islamic center near ground zero.


AMANPOUR: If you thought it would have provoked this kind of reaction, what would you have done?


AMANPOUR: And three leading figures on faith discuss religious tolerance and Islamophobia in America. Plus, analysis of all the week's politics on our roundtable with George Will, Arianna Huffington, Kate Zernike of the New York Times, and ABC senior congressional correspondent Jonathan Karl.

And the Sunday Funnies.


(UNKNOWN): The economy is so bad that Florida preacher Terry Jones now wants to burn his (401)k. That's how bad!


AMANPOUR: Hello. The world economy once looked to the American consumer to pull it out of recession. Not anymore. Now the world is looking to China and emerging economies where growth is taking hold. At his news conference on Friday, President Obama admitted that economic progress here was, quote, "painfully slow."

Joining me this morning, the president's top economic adviser, Austan Goolsbee, who's just been appointed chair of the president's Council of Economic Advisers. Thank you for joining us here. Thank you very much.

I want to ask you what's just happened. The House Minority Leader John Boehner has said that the only -- that he would consider extending the middle class tax cuts, "if the only option I have is to vote for some of those tax reductions, I'll vote for it," he said on "Face the Nation" this morning. What is your reaction to that?

GOOLSBEE: Well, I obviously haven't seen the comments, but I noticed the qualifier, if my only choice is. If he's truly saying that we can, as the president called for, get a broad consensus to extend the middle class tax cuts, we should do it.

AMANPOUR: And he's obviously saying...


GOOLSBEE: We shouldn't hold that hostage for the argument about the tax cuts just for the very, very highest income people. So if he's for that, I would be happy. In the past, we have seen some of these circumstances in which what appears to be the offer of doing this -- the sensible thing, in the light of day there was a little bit of a feeling, well, if the president is for it, I'm against it, and then it falls apart.

AMANPOUR: All right, well, he does obviously go on to say that he's obviously going to do everything he can to fight to make sure that all the tax cuts are extended. But if this does happen and he is going to vote for an extension of the middle class tax cuts, how do you think that those Democrats who oppose what the president wants to do will be brought on board? In other words, will they also go for just the middle class tax cuts and get this done by the midterms?

GOOLSBEE: Well, I certainly hope so. I believe -- I'm not a political expert, but I believe there is a broad consensus, a middle ground if you will, that Democrats and Republicans, business people and workers can agree on, to get this -- the economy growing faster, getting people back to work. It's exactly what the president tried to do and is trying to emphasize with the policies he outlined this week. And we ought to do that. We ought to come together.

Now, I have noticed in Congress there is a bit of a different philosophy, I think, between what Representative Boehner is putting forward and what the president is putting forward. So the president is saying, let's reach out and find this middle ground of what things can get the economy growing, let's have incentives for small business, for investment, so people want to build factories and employ people in this country, and we give tax relief to the middle class. I would point out that Representative Boehner has a different view and is calling for repealing the rest of the stimulus, which would raise taxes on 110 million middle class people.

AMANPOUR: Let's take a few of these step by step. It looks like Representative Boehner is, if you take him as what he just said, that he says he will vote for it if that's the only option he has. But I want to ask you, because the president does say this week that he wants to extend the Bush era middle class tax cuts, but allow those for the wealthy to expire. Now, one of your former colleagues, Peter Orszag of the OMB, he had an op-ed in the New York Times in which he suggested that higher taxes now would, quote, "trim consumer spending." In other words, that it would sort of harm the economy at this point. And extend them all for the next two years. Is that a go (ph)?

GOOLSBEE: I obviously know Peter Orszag very well. His column was not an economic column. It was a political column. He made the political argument that if we extended them all for two years, then the Republicans could be convinced to agree to get rid of the higher income tax cuts after the two years.

AMANPOUR: So would you do that?

GOOLSBEE: I don't think that politically is correct. I think Representative Boehner made clear he wants to go back to the tax policy and budget policy of the Bush administration.

AMANPOUR: But he did make the economic argument that at this time, it would trim consumer demand.

GOOLSBEE: Well, the president does not need to take lessons in tax cuts from anyone. He cut taxes for hundreds of millions of people. We have cut taxes across the board. We cut taxes for small business eight different times. And the president now has a small business bill sitting in Congress that is behind held up by some Republicans in the Senate, that would cut them eight different more times.

AMANPOUR: What did the president mean when on Friday, he basically said, quote, "certainly there's going to be room for discussion," end quote, in extending those tax cuts for the wealthy if the Republicans and Democrats can first agree to extend them for the middle class? Has he opened an avenue of negotiation on those tax cuts for the wealthy?

GOOLSBEE: No, I do not think so. The president has been all along, through the campaign, through the administration, quite clear on what I believe the economics is also quite clear, that borrowing $700 billion to extend tax cuts that average more than $100,000 a year to millionaires and even billionaires is the least effective bang for the buck we have. He said we will be open for discussion, it was literally in a sentence where he said we should all be able to agree that what would give some certainty to the economy now would be extending the middle class tax cuts permanently. Let's talk about those other things after we do that.

AMANPOUR: Everything is about unemployment as it affects the people all over this country. So where do you think unemployment will be in the short term? I mean, is it going to come down to below 7 percent, when President Obama was elected?

GOOLSBEE: The CEA and Treasury and OMB issue an official unemployment forecast. So I'm not going to deviate from our official forecast...

AMANPOUR: (inaudible) is it going to stay high?

GOOLSBEE: It's going to stay high. This recession is the deepest in our lifetimes, the deepest since 1929. If you take the people thrown out of work in the 1982 recession, the 1991 recession, the 2001 recession, not only is this bigger, this is bigger than all of those combined. So more than 8 million people lost their jobs. It's going to take a significant push on our part and time before that comes down. I don't anticipate it coming down rapidly.

AMANPOUR: So this week, though, the president did announce some $200 billion in tax breaks, also the $50 billion in stimulus for infrastructure building. How many jobs, do you think, that that's going to create?

GOOLSBEE: Well, obviously depends on how you do it, but it could have a significant impact on trying to get investment in factories, in -- by small businesses, in buying equipment, research and development, job creation in this country. That's the key.

AMANPOUR: Do you have sort of a target number?

GOOLSBEE: I definitely do not want to speculate on that, but I will say, the point that we must have, the point of those policies, they aren't spending. They're the government giving tax cuts to businesses to invest in this country. That's what they are. And we cannot have a sustained recovery without the private sector standing up, so the president knows that and has said it many times.

AMANPOUR: And just briefly as we close, a new report is basically saying that the number of American people living in poverty is about to rise from something like 13.2 percent to 15 percent, back to the 1960 levels, which led to the national war on poverty.

What can you do in this climate to affect that?

GOOLSBEE: Look, I think the number one thing you can do to address poverty also is the way you address unemployment and the way you address the squeeze of the middle class, that is get the economy growing and get people back to work, so the kinds of policies the president is putting forward are quite different than what's coming from the other side. They are let's try to find this broad middle ground in which we have targeted incentives for people to do their investment in this country, not somewhere else. And part of that is infrastructure. Part of that is research and development, and part of that is just old-fashioned moxie, let's get the private sector stood up so that they can, you know, carry us out of this.

AMANPOUR: Austan Goolsbee, thank you so much for joining us.

GOOLSBEE: Thank you for having me.

AMANPOUR: Imam, thank you for joining us.

IMAM FEISAL ABDUL RAUF: Thank you, Christiane, for having me.

AMANPOUR: Tell me about your plans for the Islamic center.

Are you going to keep it at Park 51, where you proposed?

RAUF: The decisions that I will make -- that we willmake -- will be predicated on what is best for everybody.

AMANPOUR: How do you decide that?

RAUF: That's been very difficult and very challenging, because,unfortunately, the -- the discourse has been, to a certain extent,hijacked by the radicals.

The radicals on both sides, the radicals in the United States andthe radicals in the Muslim world, feed off each other. And to a certainextent, the attention that they've been able to get by the media haseven aggravated the problem.

AMANPOUR: 71 percent of New Yorkers say it should be moved. What is your main reason for not wanting to move it?

RAUF: My major concern with moving it is that the headline in theMuslim world will be Islam is under attack in America, this willstrengthen the radicals in the Muslim world, help their recruitment,this will put our people -- our soldiers, our troops, our embassies, ourcitizens -- under attack in the Muslim world and we have expanded andgiven and fueled terrorism.

AMANPOUR: Do you think that is a legitimate reason not to move it?

RAUF: It is an extremely important consideration.

AMANPOUR: . People are saying that because youintimated that it would cause great anger in Muslim countries around theworld, it could threaten the United States. And people are saying thatyou made a threat.

Is that -- was that your intention?

RAUF: I have never made a threat. I've never made a threat, neverexpressed a threat, never -- I've never -- I would never threatenviolence ever, because I am a man of peace, dedicated to peace.

We have two audiences. We have the Americanaudience and we have the Muslim audience. And this issue has rivetedthe attention of the whole Muslim world. And whatever we do andwhatever say and how we move and the discourse about it is being watchedvery, very closely. And if we make the wrong move, it will only expandand strengthen the voice of the radicals and the extremists.

AMANPOUR: But what about the sensitivities of the people who have raised theobjections to the center being so close to -- to Ground Zero?

RAUF: I'm extremely concerned about -- I'm very, very concernedabout their sensitivities. And this is why we have -- we have reachedout to them and we will continue to reach out to them.

AMANPOUR: Do you think you, in retrospect, should have donesomething different from the beginning?

Did you do enough politicking, if you like, at a grassroots, locallevel to involve everybody in the community, including the 9/11 families?

RAUF: Well, we certainly had reached out.

And this -- this project was front page news in "The New York Times"last December. No one objected. What has happened is that since May --five, six months later, for political reasons, certain politiciansdecided that this project would be very useful for their politicalambitions.

AMANPOUR: Sarah Palin made a -- a famous Tweet saying pleasereconsider, the feelings are too raw.

What did you think about that?

RAUF: I felt it disingenuous, to a certain extent. The fact of the matter is, A, this has been used for political purposes. And there's growing Islamophobia in this country.

How else would you describe the fact that mosques around the countryare now being attacked? We are Americans, too. As -- we are -- we are treated and talked about today as if -- as if American Mus -- and Muslims are not Americans.

We are Americans. We -- we -- we are -- we are doctors. We areinvestment bankers. We are taxi drivers. We are store keepers. We arelawyers. We are -- we are part of the fabric of America.

And the way that America today treats its Muslims is beingwatched by over a billion Muslims worldwide. And the battlegroundtoday, Christiane, is not between Islam and the West. The battleground hasbeen moderates of all faith traditions in all the countries of the worldagainst the radicals of all faith traditions in all parts of the world.

AMANPOUR: There's a pastor, Pastor Jones in Florida. What would have happened if the pastor had gone ahead andburnt those Korans?

RAUF: It would have created a -- a disaster in the Muslim world.It would have strengthened the radicals. It would have enhanced thepossibility of terrorist acts against America and American interests.

AMANPOUR: And the solution might be that the pastor would notburn the Korans if you would move the Islamic center way away from whereyou plan it now.

Does that sound like a reasonable compromise?

RAUF: You can't equate the two, Christiane. How can you equate burning of any person's scripture with an attempt to build interfaith dialogue?

This is a house with multi-faith stakeholders, with multi-faithpartners intended to work together toward building peace.

AMANPOUR: Did you ever imagine that recommending or suggesting orbuying a place so close to Ground Zero would cause this kind of controversy?


AMANPOUR: And if you thought it would have provoked this kind ofcontroversy, what would you have done?

RAUF: I would never have done it. I'm a man of peace. I mean thewhole -- the whole objective of peace work is not to do something thatwould provoke controversy.

AMANPOUR: In the latest poll that ABC hasconducted, only 37 percent of those who were asked expressed a positivefeeling about Islam.

Do you think that Moslems, people such as yourself, others here, canactually have a place to practice their religion freely, to live freelyas Americans, given that figure?

It's the most -- it's the lowest figure since 2001.

RAUF: In spite of the polls, the fact is that American Muslims arevery happy and they thrive in this country. One of the misperceptionsthat exists in the Muslim world, which needs to be fixed, is theperception that Muslims in America are -- are -- are living in -- invery, very, very bad circumstances. They cannot practice religion freely.

It is not the truth at all. The fact is, we are practicing. Wefast, we pray, we do our prayers. We are able to do that. The lawsprotect us. Our political systems protect us. And we enjoy thosefreedoms in this country. And the Muslim world needs to -- needs to --to recognize that.

AMANPOUR: Do you think Muslims feel more afraid today here in America than theydid right after 9/11?

RAUF: the recent controversy, I think, has heightened the concern among Muslims, but wefeel that there is a spike of -- of -- of Islamophobia which is reachingand perhaps even possibly exceeding what happened right after 9/11.

And I'm joined now by Eboo Patel. He serves as an interfaith adviser to the president. By Irshad Manji, author of "The Trouble With Islam Today." And by Richard Cizic, founder of the New Evangelical Partnership for the Common Good. Welcome to all of you. Thank you for being here.

Can I start by asking all of you, how and what do you think of the imam's rationale for not moving? He basically puts it down to an issue of national security. But there are others, for instance, others in the Christian movement like Richard Land of the Southern Baptists who says that religious zealots, wherever they are, with no regard for human life, can't be dictating decisions that Americans take about religious freedom and where places of worship are located.

So what do you think of that?

CIZIK: Not much.


CIZIK: Because religion -- religions today are transnational. And we live in a globalized world, where globalization both moves people in reaction to what happens here, but also can help move them in a positive direction. So the actions that we take vis-a-vis Park 51, for example, in New York City, will have an impact around the world. And I happen to think that we as evangelical Christians should acknowledge that fact, acknowledge that there are billions of people who don't always understand us, and act accordingly, rather than simply suggesting, as Richard Land and others have done, that to take this action -- in other words, to leave it there is to bow down. That's what they say, is to bow down to Islam, and that's totally unwarranted.

AMANPOUR: And what do you think?

MANJI: Well, at the same time, though, I do think that Imam Feisal's reasoning on this is wrong-headed. He says that relocating the mosque will play into the hands of what he calls Muslim radicals. But why then are you asking us, Imam Feisal, all of us to play on the terms set by Muslim radicals? The fact of the matter is that terrorists, regardless of their religion or lack of it, are opportunists, first and foremost. They will use any excuse and twist it into a rationale for intimidating entire populations. So we don't need to give them this mosque debate. They'll take anything. Let's do the right thing regardless of them.

AMANPOUR: And what is the right thing?

MANJI: Well, I would suggest that the right thing is to build a mosque near ground zero, but use it as an opportunity to make it the most tolerant, the most transparent and the modern Islam that the world has ever seen.

AMANPOUR: Eboo, you've done a lot in interfaith dialogue, trying to really build bridges here since the disaster of 9/11. What does this say to you, this fervor that is being whipped up, this rising tide of anti-Islamic sentiment in this country? Because let me just read you, actually, some of the poll numbers, which are -- which are interesting here. Mainstream Islam encourages violence against non-Muslims. That was a question by ABC News, and 31 percent of the respondents said yes.

The next question, do you have a good basic understanding of the teachings and beliefs of Islam? 55 percent of the respondents said no. So what has all your work done over the last nine years?

PATEL: Christiane, I have to tell you, the story of this last week is the story of the bridge builders in America coming out. When the faces of intolerance show themselves, the forces of inclusiveness in America go into action. On Friday afternoon, when I came back to my office after Eid prayers and a set of interviews, there was a sixth-grade girl at the interfaith youth corps who said, I heard about this planned Koran burning in Florida, and it hurt me in my heart. I think religions should be nice to each other. I'm donating my allowance to your organization.

AMANPOUR: Well, that's wonderful, but you yourself have said that you feel even more scared now as a Muslim, and many people have said, than you did at 9/11.

PATEL: Well, you know, Christiane, that's true. My mother called me yesterday and she said, Eboo, I've been in this country for 35 years as a Muslim, and I have never been scared to say I was fasting, I've never been scared to say that I call god Allah, but I'm scared now and I'm scared for your kids, Eboo. I'm scared that their names might be too Muslim, that they might get bullied in school.

And what I tell her, is, mom, you know, this is a blip in the broader arc of inclusiveness that is America. And the history books will read, as they have read before, that the forces of inclusiveness will defeat the forces of intolerance.

MANJI: Only, though, if we also acknowledge, Eboo -- and I know you're the kind of guy who would acknowledge this -- that there are plenty of people who are not Muslim in this country who have legitimate fears of their own, who are worried and anxious about, you know, what Islam means for this country.

And one of the reasons that they do have those anxieties is over the last nine years, moderate Muslims have failed -- moderate Muslims have failed -- to make the case for why there is nothing to fear about Islam. When Major Nidal Hasan opens fire on a group of fellow soldier at Fort Hood, Texas, shouting "Allahu akbar," God is great, and the first thing you hear out of the mouth of a moderate is, please don't misunderstand, Islam has nothing to do with this -- you can't blame ordinary Americans for scratching their heads and wondering, well, what role does religion play here?

AMANPOUR: Well, let me ask you this. Why is it, then, that the difference between a billion Muslims, who are mostly peace-loving, and Al Qaida, which acts violently and in a terrorist way, claiming to speak for Islam, why has that difference clearly not successfully been made? Because people -- the opponents of this mosque lean towards that rationale, that it's Al Qaida that's building the mosque, basically.

CIZIK: But Imam Feisal Abdul Rauf, he is a moderate, has gone around the United States and around the world, supported by both this president, Obama, and by President Bush, teaching this message of peacemaking. So when he asked evangelicals, Christian evangelicals and others, Jews, to support him in his effort to turn the mosque, the civic center in New York City into an instrument of peacemaking, the new evangelicals said, absolutely, we'll join you.

But let me just add one additional point. The real victims of this conflict here in these United States, over this matter, and the broader issue of anti-Muslim prejudice and bigotry, the real victims can be Christians overseas, who themselves have been victims of persecution. And so we evangelicals have to be sensitive to the plight they face in their countries.

And when we simply say, well, we're not going to give the imam what he wants because that would be to bow down to Islam or whatever, we're essentially saying to evangelicals around the world, we don't care about you or your plight.

AMANPOUR: And I do just want to put this in perspective. You called it a blip, and in fact there are, according to the statistics, the total hate crimes in 2008, the latest figures, based on religion, were about 1,519. And anti-Islamic crimes represent roughly 7 percent of the cases, with anti-Jewish crimes representing 70 percent of the cases. So to put that in perspective.

But how do Muslims now feel that this is still their home? Even though a majority of them say they feel American, they're assimilated, they're successful.

MANJI: And I think a lot of us still feel that way. In fact, most of the young Muslims I speak to, and as a professor at NYU, I get to speak to a lot of young Muslims -- they tell me that they adore the freedoms that they have in this country. And yes, while they do have some fears, they do not at all -- the ones who I've spoken with -- consider this any kind of a pre-Holocaust moment.

What I say to them is, have moderates in your community told you that the highest number of victims that Al Qaida has are, in fact, Muslims? In other words, Al Qaida kills more Muslims than any other foreign imperial power in the world. Have you heard that? They routinely tell me they haven't. And I think this is one of the key reasons, Christiane, that it's not just that we, as in broader society, need to make a distinction between Al Qaida and all Muslims. I think in Muslim communities as well, they need to be teaching their young people that to have solidarity with Muslims does not simply mean, you know, sort of criticizing U.S. foreign policy. It means also criticizing the very Muslims who are killing people in the name of your religion.

AMANPOUR: Eboo, you do serve on an advisory committee for the president and for the White House on interfaith issues. The issue is also of leadership, because it hasn't been lost that this has been sort of whipped up by certain political interests. How does one address that and change it?

PATEL: I think President Obama has been spot on about this. We have to get the us and the them right. The us are the people who believe in the American promise of pluralism, a country where George Washington said that will give bigotry no sanction, persecution no assistance. A country in which one of our earliest presidents, Thomas Jefferson, reverently owned a Koran, hosted an Iftar dinner.

America is a great arc of inclusiveness. It envelopes everyone. I want my children to be able to contribute to this country just like the children of my Jewish friends, just like the children of my evangelical and Catholic friends. The us are those who believe in pluralism; the them are those who believe in extremism. It's that simple.

AMANPOUR: Eboo Patel, Irshad Manji and Richard Cizik, thank you so much indeed for joining us on this.

CIZIK: Thank you.

AMANPOUR: And stay with us because next, we turn to politics on our roundtable, with George Will, Arianna Huffington, Kate Zernike of the New York Times and ABC's senior congressional correspondent Jonathan Karl.


AMANPOUR: Coming up next, the roundtable and the Sunday Funnies.

OBAMA: So, let me be clear to Mr. Boehner.

Mr. Boehner.

Mr. Boehner.

There were no new policies from Mr. Boehner.




And the Republicans in Congress. I bet this just seems like common sense. But not to Mr. Boehner.


AMANPOUR: President Obama finds a foil in his speech in Cleveland, the man who would be speaker if Republicans take the House in November. We'll talk about that and more on our roundtable with George Will, Arianna Huffington of the HuffingtonPost and author of "The Third World: America"; Kate Zernike of the New York Times and author of "Boiling Mad," a book on the Tea Party that comes out on Tuesday. And ABC senior congressional correspondent Jonathan Karl.

Thank you all. Welcome.

So let's take John Boehner, since we just heard his name a lot, and he's just made some news by saying that he seems to -- if he would have to, make a compromise on the middle class tax cuts and vote for just extending them. Is that a go? Do you think he means that? Or is there a qualifier?

WILL: I think he means what he says, which is that some tax cuts are better than no tax cuts, but he still wants to fight for all the tax cuts.

What's funny, I mean, seven times he mentioned John Boehner. The president of the United States has met the enemy of hope, freedom and prosperity in the United States, and he's a congressman from Cincinnati. For Pete's sake.

AMANPOUR: He doesn't have the strategy...

WILL: He has a 78-seat majority in the House of Representatives, and John Boehner is his problem? That's sad.

KARL: Look, most people react to that by saying, who is John Boehner?

WILL: Precisely.


AMANPOUR: He becomes majority leader, will he -- I mean, he'll be...

KARL: Yes, but the question is, are they going to educate the American public on who John Boehner is and convince them all that he is some kind of an evil force by November 2nd?

AMANPOUR: So beyond that, though, what did you think this current debate about the tax cuts means for the midterms?

HUFFINGTON: Well, the main number, the one number that matters for the midterms is 9.6. That's the unemployment number, and everything else is really irrelevant compared to that unemployment number.

Just remember, in 1994, when Republicans took over the House, the unemployment was 5.6 percent. So this is a wave election. So in a sense, you know, the cards have been dealt.

You know, I believe in miracles, but I don't see any kind of fairy being able to come and change things between now and November.

AMANPOUR: You heard Austan Goolsbee say that, that it was likely to stay high for quite a while. Is this what is empowering the Tea Party movement? And what do you think is going to happen, for instance, in the primaries that are coming up this week?

ZERNIKE: I don't think the unemployment number is what's motivating the Tea Party.

AMANPOUR: The anxiety in the country...

ZERNIKE: Oh, absolutely, the economic anxiety is certainly a part of it, in the sense that we are spending more money than we have to spend. I think these primaries are going to be very interesting.

We've got some primaries in New Hampshire. I don't think -- I think that's probably going to swing with the establishment candidate, Kelly Ayotte in the Senate. We've got of course the Delaware Senate race, which a lot of people are looking for it to be a Tea Party election. In this one, if Christine O'Donnell is elected, I think that's actually going to be a huge boon for Democrats, because Christine O'Donnell is someone that the Republican Party has gone after. She is a Republican. She ran against Joe Biden. She was the Republican Party's choice in Delaware. Now that she's running against Mike Castle, they've made -- they have raised all sorts of issues about her financial problems. So if she wins, the Republican Party really can't get behind her. It's lost for them.

AMANPOUR: And you were there?

KARL: Yes, I was there. I spoke with Christine O'Donnell and Mike Castle. But you have the kamikaze Republicans of Jim DeMint and Sarah Palin, who are endorsing O'Donnell. And you talk to Republicans, to a person in Delaware, all the Republican leadership up there; Republicans, aside from here in Washington, they will say that if O'Donnell wins this, boom, they can't win Joe Biden's Senate seat.

HUFFINGTON: Well, here is the irony. You know, you have about ten congressional races where a third party independent candidate may make a difference and help the Democrats, but in the end, there's such an overwhelming anger in the country. You know, you have two-thirds of all Americans who believe their children are not going to do as well as they're doing. So this is a very profound anger. And politics is a zero-sum game, you know. If they don't vote for the party that is in charge right now, they will vote for Republicans, even though they're going to make things worse for their children. It doesn't matter, right now they don't have another choice.

WILL: Leave aside the anger. Look at the structural problems the Democrats have. Americans prefer divided government. They've produced it 38 of the last 60 years. One party holds the executive branch; the other holds at least part of the legislative branch. Second, in off-year elections, the electorate is going to be smaller. It's going to be smaller this year in part because the youth and the minority votes energized by the Obama candidacy won't be there, so it's going to be smaller, whiter, and more conservative. So there are all of these structural problems that the Democrats face.

ZERNIKE: I think Arianna is right, the Tea Party is really more a state of mind than a movement, and I think it's sort of -- people may not identify themselves as Tea Party members, but they're supporting -- it is (inaudible), they are supporting that view, they're supporting that viewpoint, they're looking for change.

WILL: Let's define a wave elections is normally understood as an election in which 20 seats at least in the House go one way or the other. This is a wave election following two consecutive wave elections, in which the Republicans now start this year from an unnatural bottom, which again gives them...

KARL: It will certainly go 20, 25, 30, maybe 35 seats. But I've got to say, though, I think that there is some premature statements here that the House is won for Republicans. If you go state by state in these races, it's very hard to pick which the Republicans are going to win once you get above 35, how are they going to get to their majority. Now, they may do it. The national trends are all horrific for Democrats, but this is not done yet.

HUFFINGTON: Well, that's really the point. The national trends between now and November are going to be really bad for Democrats. Next week, we have the census numbers that show the poverty rate going to 15 percent. Now, these are the numbers we had in the '60s, when we launched the war on poverty. We have unprecedented foreclosures, car repossessions. We have what's happened in California. It's not insignificant, the fire that shows where our infrastructure is. You know, it sounds like "Third World America," but it is like that...


AMANPOUR: It certainly -- it's remarkable...


HUFFINGTON: You have electric pipes that have not been repaired and people are dying.

AMANPOUR: And what I find kind of extraordinary is what apparently seems to be according to economists and all the experts, real ways of spurring not just the economy but trying to address unemployment and making long-term infrastructure payments and efforts, but seem not to be politically tenable. So there seems to be war, if you like, between what's good for the health of the economy and what's good for political health.

WILL: The president proposed a $50 billion infrastructure bank. That's over six years. That's $8.3 billion a year in a $14 trillion economy. It's trivial.

KARL: And notice that Austan Goolsbee in your interview did not go there when you asked him how many jobs are going to be created. I mean, the stimulus, it was all about 1.3 million saved or created. They're not even trying that this time.

HUFFINGTON: It's because they know how they completely underestimated the economic crisis, and they told us that unemployment was going to be down to 8 percent. So right now, basically, the American people are given a choice between inadequate solutions from the Democrats or laughable solutions from the Republicans. Thank God in Nevada, they can vote for none of the above.


HUFFINGTON: It may be Harry Reid's salvation.

AMANPOUR: You mentioned Nevada, so I am going to put up a couple of things, part of Jon's interview with Sharron Angle. Let's listen to what they talked about.


KARL: Do we have enemies of the country in the halls of Congress?

SENATORIAL CANDIDATE SHARRON ANGLE, R-NEV.: Well, certainly people who pass these kinds of policies, Obama care, cap-and-trade, stimulus, bailouts, they're certainly not friends to the free market system.

KARL: So what are they?


ANGLE: They're not friends.


AMANPOUR: She wouldn't go there, but it's an extraordinary comment to make, enemies of the system.

KARL: Yes, and she's not backing away from her earlier suggestion that there are enemies of the country in the halls of Congress. What was interesting about that is she mentioned those who supported bailouts, that would include people like John Boehner and George W. Bush.

ZERNIKE: But what's also interesting is that when you talk to voters, when you talk to tea party supporters and people who are coming to the Capitol this weekend to rally, that's not an unusual view. This is something that you hear quite often.

HUFFINGTON: Well, that's the irony again. That at the bottom of the tea party movement of that anger is anger at the bail-out. And, you know, here people -- Democrats, Republicans, have been given proof that the government does not work. Because the government spent almost $800 billion and look where we are. Wall Street is doing well, main street is suffering.

AMANPOUR: Somebody was -- I was talking to over the -- during the week, people in business, in venture capital, who would say, why doesn't the government do more to force banks to lend, to do more to make it easier for people to actually go out there and show some kind of consumer activity?

WILL: Well, maybe if the government did less, period, people would be more inclined to lend money.


WILL: The banks are not hoarding the money because they're in a pout. They're not hoarding the money because they're mad at somebody. They're hording money because they can't find lenders who think they can borrow it and make money.

HUFFINGTON: No, that's not true. The banks are getting almost zero percent interest rate loans from the Fed. And they're spending it to make a lot of profit in derivatives trading and all of the things that got us into this trouble in the first place.

And this administration and this Congress still has not passed an end to "too big to fail." Still has not reinstated Glass-Steagall.

So even though people may not be able to give you all of these details, they know that the system has not been fixed. That financial reform is full of loopholes. And that the system is not fair, basically, for them as they're seeing their lives falling apart.

AMANPOUR: And yet, people, when it comes down to -- you know, even in bad situations, there have been periods where leadership builds up confidence, builds up optimism. What does this administration need to do to try to build the confidence of people even in a bad situation?

KARL: Well, it's really hard to do it over the next eight weeks.

AMANPOUR: But beyond the next eight weeks. In general. Because this is not a problem that is going to go away after the elections.

KARL: Well, you know, if you look at what kind of got us here is the complete polarization on Capitol Hill. Absolutely, you know, I mean, all of the major initiatives of the Obama administration that passed, passed with virtually no Republican support at all. It's certainly not going to get easier when you have -- you get people like, you know, Sharron Angle, Ken Buck, Joe Miller, coming in next time around.

But the idea that the government can actually accomplish something, there can be agreement among the parties about what is right, is a notion that has almost completely gone away.

WILL: We started arguing about the tax cut. The president says we can't afford the tax cuts for the wealthy because that would add $700 billion to the deficit over 10 years, which is to say, over 10 years it would add less to the deficit than Obama added with the stimulus in one year.


AMANPOUR: But the economists say that these kinds of tax breaks are the least effective in terms of long-term -- affecting, you know, the economic health. They also say that, for instance, a payroll tax holiday would have been the most effective. Why do you thing that didn't happen?

HUFFINGTON: Well, that is really the problem, Christiane, that we never had that sense of urgency about jobs that we had about saving Wall Street. You know, when everybody came together over a weekend effectively and said, we cannot afford to let this happen. And they threw everything against the wall and they saved Wall Street. They never did that about jobs.

A payroll tax holiday, infrastructure, R&D credits, there is so much that could have been done that was not done. And now especially too late for the mid-terms, but not too late to save the economy.

AMANPOUR: And on that note, you will continue this discussion, I hope, in the green room.

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