'This Week' Transcript: Gov. Arnold Schwarzenegger and Gov. Edward Rendell

Transcript: Gov. Arnold Schwarzenegger and Gov. Edward Rendell

ByABC News
January 22, 2010, 2:35 PM

Feb. 21, 2010 — -- MORAN: Good morning, and welcome to "This Week." The battles lines are drawn.


OBAMA: It's a whole lot easier to say no to everything. It's a whole lot easier to blame somebody else.

FORMER GOV. MITT ROMNEY (R-MASS.): We conservatives don't have a corner on saying no. We're just the ones who say it when it's the right thing to say.


MORAN: While another Democrat leaves the Senate and calls the system broken.


SEN. EVAN BAYH, D-IND.: I do not love Congress.


MORAN: Is Senator Bayh right? Can Washington solve our most pressing national problems, the economy, the debt, health care? Questions for our exclusive headliners, two prominent governors who call it like it is, Republican Arnold Schwarzenegger of California and Democrat Ed Rendell of Pennsylvania, together with their own bipartisan agenda for rebuilding America's infrastructure. Schwarzenegger and Rendell, only on "This Week."



TIGER WOODS: I was wrong. I'm embarrassed. I am so sorry.


MORAN: The Tiger Woods confession. That and the week's politics on our roundtable with George Will, Donna Brazile, political strategist Matthew Dowd and Arianna Huffington of the "Huffington Post." And as always, the Sunday funnies.


DAVID LETTERMAN, TALK SHOW HOST: Tiger Woods is making a televised public apology. Televised public apology tomorrow. He needs three more to tie my record.


MORAN: And good morning, everyone. There will be some high political theater and hard political work in the week ahead in Washington. On Thursday, the main event. President Obama hosts his televised health care summit with Republican and Democratic leaders, hoping to find common ground there. Good luck on that. And Congress returns from recess this week with a full plate, especially as the Senate takes up a jobs bill.

And joining me now to discuss all this, two men who are known to reach across the aisle and are also on the frontlines of dealing with the struggling economy -- California Governor Arnold Schwarzenegger, Pennsylvania Governor Ed Rendell. They are also leading a bipartisan organization, Building America's Future, dedicated to rebuilding the infrastructure in the country. We'll get to that. Gentlemen, welcome.

SCHWARZENEGGER: Thank you, nice to be here.

RENDELL: Nice to be here.

MORAN: Let's start with the economy. The nation's governors, including of course the two of you, are here in Washington, and the chairman of the Governors Association, Jim Douglas of Vermont, said very starkly, looking at the economy, at the impact on states, budgets, employment the rest, he said the worst probably is yet to come. Do you agree with that, Governor Schwarzenegger?

SCHWARZENEGGER: I believe that the worst is over.

MORAN: The worst is over.

SCHWARZENEGGER: I think that the economy, we see signs of a comeback, but it's very clear that the comeback is not going to be as quick as we've seen in the past. It's slow, and we have (ph) seen in our revenues that there's more than a billion dollars a month coming in more than we anticipated. We've seen that the foreclosure rate has slowed down. We've seen that the house sales have picked up. We've seen people are getting back to work, especially in the green sector. So there's signs all over, but the key thing is not to be overly optimistic, just to be optimistic, and to keep pushing and to take the responsibility that we have as a -- at the state level is to do even thought we have a limited amount of power, but to do everything that we can to do -- to create jobs, jobs, jobs. To get the economy back and to create those jobs, because that is the important thing.

We in California have a 12 percent unemployment rate, and the faster we get the people back to work, the better it is.

MORAN: What's the view from Harrisburg? The worst is yet to come, or the worst is over?

RENDELL: No, I agree with Governor Schwarzenegger. Our economy has done much better. We're at about a 8.8 percent unemployment, I think the lowest of any big state. We have a very diversified economy that sort of has gotten us through this, although 8.8 percent is terrible, obviously. But we've seen real signs of improvement. In the last three months together, we only lost 4,300 jobs, and we were losing 30,000, 40,000 a month a year ago. So things are getting better. Arnold is right.

Our economists predict growth will actually return next year, 3 percent growth, not great. The following year, they predict 4.5 percent growth, which is almost where we were in the beginning of the last decade, in the middle of the last decade.

But I think what Jim Douglas was referring to is the states are going to really have a problem when the stimulus money drops off. It's going to be a problem. But again, stimulus was never meant to be a permanent solution. It was meant to do two things. One, to be a bridge until growth returns, and it has been a very helpful bridge. No ifs, ands and buts about it. We would have had to lay off 50,000 more people had we not had the federal stimulus funds.

And then secondly, President Obama did something (inaudible). A lot of the programs are long-term programs. The green energy jobs, the broadband, the electrical grid jobs. Those jobs, that benefit from the stimulus is going to stretch out over the next five to 10 years. So states are going to have a management problem of their own budget when the stimulus funds drop off, but the economy -- I agree with the governor's estimate -- is coming back slowly, I think surely.

MORAN: Well, the Senate, as I said, is taking up a jobs bill this week, $15 billion. When it started at the White House, it was $200 billion. The House passed a $180 billion version. There was a deal for $85 billion. We're down to $15 billion now, but do you think there needs to be another stimulus, federal stimulus like this? Is $15 billion enough?

SCHWARZENEGGER: Well, I don't think that we need another stimulus as much as what we need is just to do what we have been talking about over the last two years, and that is rebuild America, because that will create jobs. That is why it is so important to think about the infrastructure, because we happen to be at a stage right now where if we don't rebuild our infrastructure, we're going to fall behind economically and we're not going to be the number one nation anymore. I mean, right now, we are the most powerful nation, but it is because we have this great infrastructure that over the last 100 years, we have built, built and built. But in the last few decades, we have stopped maintaining that infrastructure and we have stopped building and expanding that infrastructure, even though there's tremendous demand for that infrastructure.

So if you build this infrastructure and do what was recommended, $2.2 trillion of infrastructure, that will put a huge amount of people to work and it really will stimulate the economy, and they did that in the 40s and in the 50s, and Eisenhower did it in the 50s. And even into the 60s, the height of infrastructure was in the early 60s, it was the height. Maybe even when I came here to this country, there was this enormous boom of expansion of freeways and bridges and waterways and the universities and all this. And now we're kind of like only spending 2.5 percent of our GDP on infrastructure, rather than the 5 percent that we should be spending.

MORAN: $2.2 trillion -- we had money back in the 1950s and 60s. That is a gigantic amount of money, and when people think about infrastructure, they get it -- roads, bridges -- they understand it. But wasn't there $200 billion or so worth of infrastructure spending in the stimulus a year ago?

RENDELL: Actually, a little less than we recommended to the president when we met with him when he was president-elect. I would have liked to have seen the infrastructure money in the original stimulus at least doubled. And so did Senator Boxer and some other people in the Senate. But still, it was a nice hunk of money, but it just scratches the surface, and the governor is right. What's great about infrastructure spending is one, we need it, for safety, we need it for quality of life and we need it for economic competitiveness.

But two, it's the best jobs creator. Economists (inaudible) $1 billion of infrastructure spending will create 40,000 jobs that can't be outsourced, that are here in America, that are good, family-sustaining jobs. And they're not just jobs on the construction site. We've seen this in our stimulus figures. They're jobs back in the steel factories and the asphalt factories and the concrete factories and the electrical factories and the wooden timber factories. So if you want to preserve American manufacturing and get it to thrive again, and put this country back to work, long-term -- and the key is here, your lead-in saying Washington is broken, and sure it's broken because of the partisanship. But it's also broken because nobody plans. Nobody's willing to do something for 10 years down the road. Everybody thinks about the next election.

We need a plan, a 10-year plan that is going to take us to a first-class infrastructure that will keep us competitive. The port of Shanghai in five years will take more throughput than all American ports put together.

MORAN: Ten-year plans not something that the United States government does very well, but the stimulus, that was a big debate here this week. Both of you were supporters of it. The Republican Party, though, staked out a pretty stark position on the stimulus, summed up by Mitt Romney at the CPAC convention this week when he basically -- this is his take, and really speaking for the Republican Party in general on what the stimulus did.


ROMNEY: He scared employers. The jobs were scarce. His nearly trillion-dollar stimulus created not one net new job in the private sector.


MORAN: Governor Schwarzenegger, that is where the Republicans are, that the stimulus was a failure and that it did not create one net new job in the private sector. True?

SCHWARZENEGGER: Well, you know, to me I find it interesting that you have a lot of the Republicans running around and pushing back on the stimulus money and saying this doesn't create any new jobs, and then they go out and they do the photo ops and they are posing with the big check and they say, isn't this great? Look what the kind of -- the kind of money I provide here for the state, and this is great money to create jobs, and this has created 10,000 new jobs and this has created 20,000 new jobs. And all of these kind of things. It doesn't match up. So it's exactly--


RENDELL: It's hypocrisy at the highest level.

SCHWARZENEGGER: I think, you know--


SCHWARZENEGGER: -- of my Republican colleagues, but I think it's kind of politics, rather than thinking about only one thing, and this is how do we support the president, how do we support him and do everything that we can in order to go and stimulate the economy, get the economy back, and think about the people rather than politics.

I have been the first governor of the Republican governors to come out and to support the stimulus money because I say to myself, this is terrific, and anyone that says that it hasn't created the jobs, they should talk to the 150,000 people that have been getting jobs in California.

MORAN: Private sector?

SCHWARZENEGGER: Yes, for the private sector and also from the public sector. I mean, if it is teachers, if it is university professors, if it is people that are building infrastructure and stuff like that. I mean in every category, there is jobs that have been created in California, 150,000. This is 150,000 people that are going home today with a check that are providing for the family, that can buy the textbooks for their kids, that are feeling wanted and needed and feeling productive. I mean, a better job, it isn't just a job, it's all of those kind of other things. So I'm happy that we got this money. I'm happy that we have put 150,000 people to work and there will be more people that we will put to work.

MORAN: You'd do it again. Did Pennsylvanians think it worked?

RENDELL: Yes, I think basically they do and you know, Mitt Romney is a pretty smart guy. He was very clever there. He said net new jobs. We could fill up every baseball stadium in this country, Terry, with people who got jobs or whose job was saved by the stimulus. There's no ifs, ands or butts about it. Pennsylvania's budget is a little under $28 billion. We get almost $3 billion this year from stimulus. Take that $3 billion away, we've cut most of our program grants to the bone. You'd have to lay off -- I'd have to lay off 37,000 state workers to balance the budget. We have 76,000 state workers.

If we did it with counties, it would be teachers, fireman, police men, emergency workers. So has it saved jobs? You bet it has. Has it created jobs? I'll take Governor Romney out to any construction site in Pennsylvania and then I'll take him -- we'll drive to a construction site, back to the steel plant that provided the steel for the bridge. He knows better.

MORAN: But as Governor Schwarzenegger says, it's politics, but it's politics that gain traction. And I want to ask you, Governor Rendell, big fanfare this week, the Obama administration fanned out across the country, does stimulus work? The president made speeches, sounded a little frustrated that people don't get it, at least the polls show, that they don't understand there were tax cuts and things like that. What do they do while they're playing defense on what was one of major accomplishments? What did the White House, the president do wrong in explaining, presenting itself?

RENDELL: Ironically, the best communicator in the history of political campaigning turned out in his first year in office to not communicate very well. They let the Republicans take the spin right from the beginning. The stimulus got beat up before one dollar was spent. What I would have done, and I've been in charge of the president, is I would have had him Tuesday night -- not Tuesday night was the inaugural ball. Wednesday night I would have had him make a speech to the nation, break down what stimulus because a lot of the stimulus, it wasn't job creation, but was safety net. But not safety net for people on welfare, safety net for hardworking Americans who lost their jobs, extending unemployment benefit. Is there anybody in the Congress -- Republicans aren't going to raise their hands and vote against that, right? Everybody is in favor of that. That was an important component of the stimulus. COBRA, health care benefits, for people who lost their jobs. But we never explained it from the get go and we lost the spin war. The stimulus has done a great job for America, but we lost the spin war. And once you lose it, it's hard to get it back.

MORAN: It's a very aggressive Republican positioning and I want to go back to the CPAC conference. The Republicans reasserted their congressional power. Essentially the massive campaign of obstruction, filibusters more than 100 in one year, 80 percent of major legislation -- and as Mike Pence, congressman from Indiana, one of the Republican conservative leaders in the House put it at CPAC, they're proud of that record.


REP. MIKE PENCE, R-IND.: Sometimes no is just what this town needs to hear. When it comes to more borrowing, the answer is no. When it comes to more spending, the answer is no. When it comes to more bailouts, the answer is no.


MORAN: Governor Schwarzenegger, is the Republican Party, your party, the party of no right now?

SCHWARZENEGGER: Well, you know, they have the big opposite position. I mean, because first when it come to the party itself, they have to do everything they can in order to win in November. So they're going to say no to everything, they're going to say it is not good but Obama is --

MORAN: So they are the party of no.

SCHWARZENEGGER: They're the party of no, and at the same time, I think that there are a lot of people that are disenchanted and dissatisfied and they're angry and this is why you have the Tea Party and all of those things. The Tea Party is not going to go anywhere. I think the Tea Party is all about just an expression of anger and dissatisfaction and I see it in California when people come up to me and says, you know I'm angry that you guys don't get along in Sacramento. I'm angry that they're not getting along in Washington. I'm angry that nothing gets done. I'm angry that I'm unemployed. I'm angry that people are losing homes. I'm angry that businesses are losing their businesses and all of those kind of things. And the economy is down.

But that's only the case in California. That's not only the case in America. That's the case all over the world. If you read six newspapers from different parts of the world, you will see the headlines are pretty much the same. They're all angry at their leaders because the economy is down and the world basically has one-third less wealth right now. And so that makes people angry.

So I think the key thing for the Obama administration is to just keep staying on track. Nothing is going to be easy. And you're going to fail and you're going to do well, and you're going to fail, and you're going to do well.

If you look at the Olympics -- I think all of the lessons in life, you can learn from sports. I mean, this girl Vonn who just had the gold medal in skiing and did a fantastic race in the downhill, the next day she wiped out. That's the way it is, and totally accepted in sports -- totally accepted. People say, oh, that's too bad, isn't it, but the next time, she's going to go do the giant slalom, and then there will be the slalom, and so on.

In politics, when you fail, it's like the end of the world because the press keeps piling on you and beating you up and all of those kind of things.


I am never afraid of failing. I've failed several things that I tried to do in California, but we have won with many things that we have tried in California and we have done in California. Just the redistricting -- it was a perfect example. Five times, we tried redistricting. And we had lost and lost and lost. And people said, don't you get the message that people said no?

And I said, no, I will never get the message. I will always try and try. And the fifth time, we got it, and we won it. The same will be with open primaries, now, in June. We will win open primaries because people want to have politicians not to be so far apart, left and right and be -- cannot get in the middle and get anything done. They want to get together. They want us to work together.

And this is why this partnership is so perfect because Bloomberg is an independent; Rendell is a Democrat; I'm a Republican. So what we are saying is we are for rebuilding America, but it's a political issues; it's a people (inaudible) issue. We want to serve the people of America.

MORAN: And people want to see that, and that kind of bipartisanship, but right now, we have this partisan divide. So let me ask you directly, Governor Rendell, does President Obama, having been outmaneuvered by the party of no, right now, as the governor says, does he need a shake-up?

Does he need some new blood in the White House?

RENDELL: No, I think they just need to take a deep breath, look at what happened and revamp their strategy. They've still got the best communicator I've ever seen in my life in politics.

But, Terry, I want to say something about Representative Pence. He seems to be a very decent person, but what he just said there is the most dangerous prescription for America, no spending, no borrowing.

How in God's name -- I'd love -- I was a former prosecutor; I'd love to cross-examine Representative Pence. How in God's name does he think we're going to repair this nation's infrastructure, stay competitive, give safety to our people, improve our quality of lives?

Every business that's successful in this country has, at some key moment, reinvested in itself, usually by borrowing or taking out capital reserves.

They reinvested. They created another product line, built a new factory. If you don't invest in your future, you will die. And Representative Pence and the people at that convention -- when they say no borrowing, no spending, no investment, they're writing out a prescription form for this country becoming a second-rate power.

And I don't think the governor and I, and there are others out there with us -- we're going to fight that theory. Because we've got to invest in our future. If we don't invest, what's going to happen to American manufacturing?

MORAN: The challenge, of course, is they're looking at an ocean of red ink. One of the other things that happened in Washington -- the president appointed a national commission on the debt. Alan Simpson, one of the co-chairs, did an interview with Judy Woodruff on PBS, in which he tried to get real.


JUDY WOODRUFF, PBS ANCHOR: Some people, mainly Republicans, right now, are arguing what's really needed are tax cuts.

SIMPSON: I'm not smoking that same pipe. I just -- everything is on the table.


MORAN: Everything is on the table. He's not smoking that pipe.

Now would each of you agree that -- you look at this ocean of red ink, a Republican and a Democrat -- get real -- that, to solve the fiscal disaster looming for the country, Republicans here in Washington are going to have to agree the government gets more revenue; Democrats are going to have to agree, long-term entitlements get cut?

RENDELL: No question. And you can cut entitlements in a very intelligent way. I mean, we're working longer; we're living longer. There's no reason why entitlements can't be pushed back, in terms of age. And everyone knows that. It's a dirty little secret, but people have got to get together and say it.

MORAN: That wasn't even hard to get the two of you to agree on that.

SCHWARZENEGGER: Well, we have agreed on that -- we have agreed on that for a long time.


SCHWARZENEGGER: I think there's no two ways about it, that we in this country have a major problem with spending on ongoing programs, and especially on promising people things that we can't keep. The pension in a disaster in California and in the whole nation. We have pension obligations that we cannot fulfill. We have health care obligations, unfunded obligations that we cannot fulfill.

I mean, in California, we're talking about hundreds of billions of dollars, and it's very dangerous. So those are the areas that people are upset about, and those are the kind of things we have to stop.

But one should never get confused between spending money and investing in the future of America. And what we are talking about, with our partnership, is about is investing in the future of California. We have made a commitment in California of $70 billion since I've come into office. And right now, the legislature, after four decades of arguing, have come together, Democrats and Republicans, and have made a commitment to $11 billion in bonds for water infrastructure. Because what has happened this last year in the valley, having 40 percent unemployment because of the lack of water, it was devastating.

So the California people know the difference, and that's why they have approved of those infrastructure packages, including the high-speed rail, the $10 billion. And they will also approve in November the water infrastructure, which is very important so we have water in the future.

So we've got to rebuild our state, and the whole country has to rebuild itself. Because if you think in all of the -- in history, I mean, all the great civilizations all became great because they had great infrastructure. If you think about the Persians, of building the waterways and the paved roads. The Romans, they had the aqueduct system of delivering water and the sewage systems. The Egyptians, they builtÿ2Dÿ2D


RENDELL: How many people (inaudible) Great Wall of Chinaÿ2Dÿ2D


MORAN: ÿ2Dÿ2Drun out of time here, but I have one more question.

SCHWARZENEGGER: But it is -- I just want to say that the decay and the falling of those empires and of the civilizations is directly linked to not keeping up the infrastructure. So we have to be very, very careful in America to keep up our infrastructure, not only to maintain it, but to build, because it is our ports, if it is our freeways, if it is our airports, and all of those things needs to be rebuilt.

MORAN: One more, briefly. The health care summit coming up. Do you expect anything out of this? What should Republicans do? They are coming to the table saying the president has got to take this bill off the table to begin with before they even talk? Just a couple of seconds on this.

SCHWARZENEGGER: Well, first of all, I think that Mrs. Obama is doing something very smart right now. She's gotten into the obesity summit business, and I think that if you do health care, you cannot do health care without prevention. I think the prevention part is the biggest and the most important part of health care reform. And so, for her to talk about obesity, which is a huge problem, because it creates the diabetes and all the health problems in children. We make our children -- they are now 10 pounds heavier today than they were 20 years ago. So all of this I think going in the right direction.

MORAN: Republicans should come to the table to do a deal?

SCHWARZENEGGER: I think that Republicans should be at the table with health care reform and bring their ideas, whatever it may be. I thinkÿ2Dÿ2D


SCHWARZENEGGER: If it is just tort reform -- I mean, just think about tort reform. That could be a huge improvement in the health care reform. And prevention could be a hugeÿ2Dÿ2D

RENDELL: Terry, the Republican Party has a very difficult task ahead. They can't just say no on Thursday. The American people are watching and they are watching clearly. They've got to come up with some ideas, and they've got to say what you said. You take some of our ideas; we'll take some of your ideas. We may not love your ideas, but we'll take them. If they don't do that, I think this whole dynamic of this political year could turn around.

SCHWARZENEGGER: This is what compromise is all about. You've got to have two opposing point of views. You try to bring them together and try to find out where is the sweet spot here? And there's the also the sweet spot. If there is a will, there's a way. If you really want to serve the people and not just your party, I think you will find that sweet spot and you can get it done.

MORAN: All right. Governor Schwarzenegger, Governor Rendell, thanks very much for being here. Good luck on the infrastructure project.

RENDELL: Thank you.

SCHWARZENEGGER: Thank you. Thank you very much.

MORAN: And up next, we'll have the roundtable with George Will, Arianna Huffington, Matthew Dowd and Donna Brazile. And later, the Sunday Funnies.


GLENN BECK, FOX NEWS ANCHOR: Hello. My name is the Republican Party, and I've got a problem.


I'm addicted to spending and big government.


MORAN: The conservatives stoked this week at the CPAC conference by their speakers. You saw Glenn Beck taking aim at the Republican Party, there. We're going to talk about the week in politics.

Our roundtable, George Will, of course, Arianna Huffington of the Huffington Post, political consultant Matt Dowd, and Donna Brazile.

And let me begin, George, with what we just saw, Glenn Beck, there, taking aim at the Republican Party, CPAC embracing the tea party movement, in a way. What does -- what does it mean, this libertarian tea party streak coming into the movement conservatives, coming into the Republican Party?

WILL: They're natural Republicans. They're not all Republicans. In fact, one-fifth of the people who identify themselves as tea party supporters voted for Barack Obama. And one-third of them express approval of Barack Obama. But they are alarmed and anxious and fearful about what the government is doing.

CPAC has been meeting for decades in one of Washington's largest hotels. This year, they had to move to a larger hotel. So the energy, the intensity in American politics, right now, is on the right. And this is partly because a lot of the people who come to CPAC are college students. They're young. And so there's a bit of over-the-top rhetoric, as you would expect.

And when you're a year after a party has just lost the presidency, and you don't have -- the faces of the next generation aren't clear, it's the hour of the entertainer. And they had a lot of entertainers there.

MORAN: (inaudible), Arianna? Is this the return of the conservative movement, here, after being flat on its back after the Obama victory?

HUFFINGTON: Well, let's first of all mention that the straw poll was won by Ron Paul. Last year, it had been won by Mitt Romney.

And the violent imagery was fascinating. And even Tim Pawlenty, who is supposed to be a moderate, said that we need to take a page out of the playbook of Tiger Woods's wife and take a nine-iron and smash a window out of big government. That was the day after the pilot had flown a plane into a federal government building.

So that kind of rhetoric is disturbing. And of course what must be troubling for the conservatives is that the big hit -- the guy who got the rock star welcome was Dick Cheney. Dick Cheney left office with 13 percent approval rating. And there were shouts of "Run, Dick, run," which I'm sure the White House if fully endorsing.

MORAN: But they love Glenn Beck.

DOWD: Yes, they do love Glenn Beck. I mean, he's popular among a segment of the party.

I mean, I think this is more -- the commentary about this is more about the volatility of politics in this country today. Because if you think back a year ago, everybody said, well, what happened to the conservatives? What happened to the Republican Party?

And now people are saying, well, what happened to Barack Obama? And it's 13 months later, after the inauguration of Barack Obama.

And I don't think Republicans can sit there and say, oh, we're going to have this great success. This is not about the Republicans right now. This is about why people are mad at the Democrats in Washington and the incumbency in Washington. That's what people are mad about.

This is not a bunch of people flocking to become Republicans. But CPAC and the tea party is best representing people's anger right now, in the country, on the right. And I think that's what this is about, is people are angry, whether they're Democrats or Republicans or independents; they're mad at Washington, and anybody that represents Washington is bad.

MORAN: But that's energy. The president's loyalists seems to be disheartened.

BRAZILE: No, I don't think they're disheartened. They're just asleep, and at some point, they'll wake up. I'm an optimist.

I didn't watch too much of the CPAC. I didn't want to get infected with the virus anger...


... given the blues that I've had over the past year.

I think what you're seeing now on the right is a revival. They are feeling energized. They feel as though it's their time.

Now, the question is, will the modern Republican Party be able to harness this anger and turn it into electoral gains?

We have no proof of that? But, for now, they're able to gather a large segment of the base in one hotel room and cheer each other on. And there's nothing wrong with that. That's American politics.

MORAN: Anger. George, does it bother you at all that the John Birch Society is back inside the tent after Bill Buckley spent decades trying to run that wing of the party out?

WILL: It's a big tent. And the tent is a circus imagery. And so you have a freak show side of it. But this is a trivial, infinitesimal, not-noticeable thing, other than by people eager to discredit the Republican Party.

HUFFINGTON: I think what is not trivial is the anger. The anger is real and the anger is across the board. It's across the political spectrum and across the country.

And for the first time, Republicans have a great case study about government being part of the problem rather than part of the solution. And that's the bailout of Wall Street.

That is really at the heart of all the anger. If you look at every poll, the second question, the third question comes back to Wall Street and the bailout, the sense that we bailed them out, taxpayers, billions of dollars, and now they're doing very well and Main Street is suffering. And that needs to be addressed.

DOWD: Well, I think -- I think -- one of the things, I think, it's about that. But it's, I think, more fundamentally about, people don't understand why Washington can't be adults, why it's a dodge ball game and anybody that ventures to (inaudible) a solution is pelted by either side.

They just do not understand why it's a bunch of children at the Capitol or in the administration, playing all sorts of games, while they're sitting out there suffering because they can't pay for school; they don't have a job; their uncle can't -- doesn't have health care, all of that kind of stuff, while Washington sits here and yells and screams at each other and nothing gets done. That's, to me, where the anger is based.

BRAZILE: But, Terry, their feeling is, at the grassroots level -- the states -- we just talked to -- you just talked to two governors. This year, with the budget that they've already put out, state governments will lose about $190 billion.

That's a lot of cuts that they have to make in Medicaid and children's health programs, yes, hiring freeze, George. I know you're worried -- you're worried about state employees.


Teachers, public safety personnel. They are feeling this not just at Washington but they're feeling it right in their own backyards. They're feeling the decline in services. They're seeing their mortgages, their health care go up. And you know what? They're feeling like they don't have a lot of power right now.

MORAN: And Matt is right, there is this sense that something is broken in Washington, summed up this week by Senator Evan Bayh, who announced his retirement, and I think it's fair to say is leaving in disgust. Here's what he had to say.


SEN. EVAN BAYH, D-IND.: I've had a growing conviction that Congress is not operating as it should. There is much too much partisanship and not enough progress, too much narrow ideology and not enough practical problem-solving. Even at a time of enormous national challenge, the people's business is not getting done.


MORAN: Is he right, George?

WILL: Well, it's hard to take a lecture on bipartisanship from a man who voted against the confirmation of Chief Justice Roberts, the confirmation of Justice Alito, the confirmation of Attorney General Ashcroft, the confirmation of Condoleezza Rice, the secretary of state.

Far from being a rebel against his party's lock-step movement, Mr. Bayh voted for the Detroit bailout, for the stimulus, for the public option in the health care bill.

I don't know quite what his complaint is. But, Terry, with metronomic regularity, we go through these moments in Washington where we complain about the government being broken. These moments all have one thing in common. The left is having trouble enacting its agenda.

No one, when George W. Bush had trouble reforming Social Security, said, oh, that's terrible; the government's broken.

HUFFINGTON: Well, actually, what we do with metronomic regulatory -- I like that phrase -- is complain about partisanship. That is one of the most ludicrous complaints.

WILL: Hear, hear.

HUFFINGTON: Every major milestone in American history has been won after a major, protracted and partisan battle. Go back to the Emancipation Proclamation, the 19th amendment, the New Deal, Medicare, Social Security, the Voting Rights Act. These were big partisan battles. One of them involved the Civil War.

And so the idea that somehow we can all come to the middle and do what, free half the slaves, or free them from 12 to 5?


You know, these are major issues that people have very definite differences on.

MORAN: But the country is in the great muddled middle, basically. All polls show, on most issues, they'd like some compromise.

HUFFINGTON: That's not true at all. That's not true at all. Even the despised public option has 70 percent behind it. Nate Silver just crunched the numbers last week. The jobs bill has -- the $100 billion jobs bill, not the $15 billion jobs bill in the Senate, has 70 percent of the people behind it.

The idea that the -- we are in a mushy middle is simply a media invention.

DOWD: Well, I think Senator Bayh obviously made his own personal decision that he didn't want to be here anymore, for whatever reason that is. To me, that's not a solution to the problem. Adults don't leave the playground and leave to it the kids to -- if he believes he's an adult and he can do this, walking off the playing field and not being part of trying to solve the problem isn't a solution to the problem.

I actually think one of the difficulties we're in -- I don't think it's an institutional problem. It's not the Senate rules and it's not how the president operates and all of those sorts of things.

It is leaders that are willing to take on elements of their own party. We have to have leaders that are willing to, sort of, confront their own party, whether it's Republicans confronting Republicans or Democrats confronting Democrats, and saying, just because it's got a D by its name doesn't mean it's necessarily the right solution, or just because it's got an R by its name doesn't mean it's the right solution.

Civil rights is a perfect example. Democrats, throughout the history of civil rights, sought to kill civil rights, throughout the whole -- throughout the whole thing.

MORAN: Until the 1960s.

DOWD: Until the 1960s, until Republicans, who cast more votes on behalf of civil rights legislation to get it done. But in the end, some Democrats -- LBJ had to take on elements of his own party and risk political problems, which he did.

MORAN: And President Obama really isn't doing that.

BRAZILE: I think President Obama is leading. But, unfortunately, you have a Republican Party that has decided that, by saying no, they could, you know, perhaps gain more at the polls this coming fall.

Look, one-tenth of the Republican caucus in the House has announced their retirements, OK, only 13 Democrats in the House. We have more Republicans retiring in the United States Senate than -- than Democrats.

We know from 1994 as well as 2008, when you look at two volatile periods that if you have to defend open seats, it's very difficult. So for Democrats right now, the game is to hold as many seats as possible and to not retire. For Republicans, they still have to come up with some ideas to go out there and galvanize the electorate. One-third of the American people is still with the president, one third is against the president. There's 30 percent of the American people that is still up for grabs. And if this president leads, he will be able to capture those people.

WILL: I want to say something in defense, particularly to Donna, of being the party of no. The Republican Party elected its first president because he said no to a bright idea a Democratic senator had, which was I'll solve the problems, said Stephen A. Douglas, of expansion of slavery into the territories. Let's have popular sovereignty. People can vote it up or vote it down. A lawyer from Springfield, Illinois, named Lincoln said no, that's a bad idea. We're going to stop that idea. Now is the Republican Party the party of no, you bet they weren't.

BRAZILE: You know, George, is the Republican Party going to defend the 39 percent rate hikes on insurance premiums this coming week when they hold the health care summit? Will the Republican Party continue to defend all of these job cuts across the country when you see governors having to eliminate very popular programs? Let the Republicans continue to say no. I think Democrats have to lead and it's up to the president to demonstrate that.

MORAN: It is a challenge, and let's turn to the health care summit. It looks like Republicans are ready to come and say, no, take that bill off the table.

HUFFINGTON: Absolutely. They've made that very clear. Even Newt Gingrich at the CPAC convention yesterday, he said that we need to start from crash, eliminate everything in their health care bill and start from scratch. So here's really my problem with the president. Why does he really think that he can get Republicans to find common ground, after all the experience of the past few months? I mean, why is he so intent on seducing Olympia Snowe and Chuck Grassley? The problems is that the American people are with him when it comes to the essential elements of the bill. It's the way the bill has been solved that have turned people against the legislation.

DOWD: I totally disagree with this. Barack Obama's problem is not the Republicans. Barack Obama's problem is the American people. The American people decided they don't want this health care bill. They don't think any jobs have been created. They don't think anything's really been done in Washington.

So the idea that the Republicans are the ones? Republicans are just representing a wave out there. They are standing on top of a wave that the American public says we don't like any of this. And I think in the end, it's not a sales job. To me that's like saying somebody owns a restaurant and nobody eats their food so we're going to do more advertising.

BRAZILE: He has the job of governing, and that is where the president has, I think, fallen short.

DOWD: Isn't he supposed to be the best speaker in the history of the country?

BRAZILE: You know what, I wasn't voting for a speaker. I was voting for somebody who can lead.

MORAN: I was wondering if you said something true in a different sense, in that you're both right, but the problem is the American people, but not for the president but for themselves. Maybe the fundamental political attitude of American people is I want my government goodies, I don't want you to get your government goodies and I don't want to pay for anything.

DOWD: I don't think that's true.

HUFFINGTON: The American people know that our health insurance system is broken. Every day, they have experience of that. And right now, if you look at the polls, when it comes to specific things, pre-existing conditions, competition when it comes to health insurance, and this is the American people are with the president. The problem is that the American people don't know where the president is. Where is the line in the sand?

DOWD: They know where the president is, they just don't like where he is.

WILL: When we started this health care debate a year ago, a 85 percent of the American people had health insurance and 95 percent of the 85 percent were happy with it. So there was no underlying discontent that you now postulate to drive this radical change. In fact, relax, the president is not having this health care summit to woo Republicans. He's having it so that he can then go to Congress and say, we're going to ram this through on reconciliation.

HUFFINGTON: I hope so.

WILL: I'm sure you do. And in a way, I hope so, too, in a way, because it would be a ruinous tactic.

BRAZILE: Well George, in all of the polls prior to this debate that we had on health care that really took everything out of context, the majority of Americans thought this was a concern enough so that the Democrats put in on the table. And I think they lost control of the debate.

But look, when it comes to the parameters of this conversation this week, the president is going to outline a set of principles. I believe it will be here are the things that we all agree, the insurance industry, the Republicans and Democrats.

Here's the bottom line. We're going to put this package throughout, I hope they don't shrink it up even smaller because that's one of the reasons why many Democrats are opposed to it, because it doesn't contain a public option. It doesn't really decrease premiums which is what people really want. But the president is going to put this forward tonight or tomorrow. The Republicans will have an opportunity to chew on it. If they decide to come to the table with something, an alternative, fine. If not, the Democrats should possess the will and the might to go ahead and get it through, George, however ugly it looks.

DOWD: I think in the end, politicians get in trouble when they make the assumption that they're smarter than the American people. That's what the problem is. Barack Obama and the administration decided they were smarter and they knew better what the American people needed on health care reform and they knew better what they needed on job performance. They knew better than them.

The problem they have now is the American people figured it out, they don't like it. And so I were Barack Obama, President Obama, the thing I would do is start over since the American people -- the worst thing he could politically do is ram through a bill that everybody hates.

WILL: The administration has met the enemy and it is the founding fathers of this country who have created a system of checks and balances and slow-moving government and above all, the unconstitutional -- basically what liberals are saying these days.

Liberals are saying that the filibuster violates the majoritarian ethic of democracy. And it is preventing them, liberals, from imposing upon an American majority, a health care bill that the majority detests.

MORAN: Maybe it's the abuse of the filibuster?

HUFFINGTON: Yes, exactly. It's preventing them from having the president have low level, even presidential appointees. So this is not exactly what the founding fathers had in mind.

WILL: When Senator Daschle was using this to block --

HUFFINGTON: That's a different argument than the founding fathers.


MORAN: We're going to shift gears. We've got to get to it because it was the other big story of the week, you know it's coming. Ladies and gentlemen, Tiger Woods.


TIGER WOODS, GOLFER: I stopped living by the core values I was taught to believe in. I knew my action were wrong but I convinced myself that normal rules didn't apply. Parents used to point to me as a role model for their kids. I owe all those families a special apology. I want to say to them that I am truly sorry.


MORAN: It was a unique national and international moment and painful.

WILL: It was painful. Well if your problem is that your behavior has revealed your public persona to be a fake, you shouldn't stage this grotesquely fake press conference without questions and with your mother present. Sally Jenkins, wonderful sports writer, put it best, this is straight out of the standard playbook. You apologize, you cite your religion, you cite your charity, and you attack the press.

HUFFINGTON: Well actually, I personally don't think that he owes me an apology. I don't think he owes anybody an apology, a contrition or an explanation. I think that if a public figure has not broken the law, the only legitimate answer to an illegitimate probing of a private lives then it's none of our business.

MORAN: We called for it. Final word?

BRAZILE: He let down is fans. He let down his family, his fans, he apologized, but actions speak louder than words.

DOWD: Totally agree with that. Actions speak much louder than words and that's how he ought to be judged going forward.

MORAN: And that's how he will be judged no question if he ever gets out on the golf course again. George Will, Arianna Huffington, Matt Dowd, Donna Brazile, thanks.

"The Roundtable" will continue in the Green Room as always on ABCNews.com.


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