Transcript: White House Senior Advisor David Plouffe

WASHINGTON, Sept. 25, 2011— -- (BEGIN VIDEO CLIP)

AMANPOUR (voice-over): This week, global economic meltdown. Markets plunge as Europe's ticking debt bomb threatens America's recovery. Today, our roundtable of economic all-stars on what it means for U.S. jobs and your 401(k).

OBAMA: This is not class warfare. It's math.

AMANPOUR: President Obama stumping hard for his jobs plan, but getting the cold shoulder from Washington Republicans...

BOEHNER: Our economy's in jeopardy.

AMANPOUR: ... and his own Democrats. We'll ask White House senior adviser David Plouffe whether his bill has a prayer of passing.

In the Republican race to take on the president, the new frontrunner stumbles.

PERRY: Was it -- was before he was before these social programs, from the standpoint of he was for...

ROMNEY: Again, nice try.

AMANPOUR: So is Rick Perry ready for primetime? And will Chris Christie come off the bench? Top political strategists Republican Mary Matalin and Democrat Donna Brazile, ABC News political director Amy Walter, and George Will debate the week's politics on our roundtable.

And in a "This Week" exclusive, British Prime Minister David Cameron on the Palestinian bid for statehood and his own government's close relationship with Rupert Murdoch.

CAMERON: I think it has been too close, too cozy.

ANNOUNCER: Live from the Newseum in Washington, "This Week" with Christiane Amanpour starts right now.

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AMANPOUR: We have a packed show for you today, but first, some news since your morning papers.

Two American hikers imprisoned in Iran will land in the United States this morning, ending a two-year ordeal. Josh Fattal and Shane Bauer are scheduled to arrive in New York after a stopover in Oman, then address reporters this afternoon.

In a fiery speech to the Congressional Black Caucus last night, President Obama said that he's not giving up and implored the crowd to stick with him. The president is fending off criticism from African-American leaders that he's ignored their concerns, and polls show his support among black voters softening.

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OBAMA: Take off your bedroom slippers, put on your marching shoes, shack it off, stop complaining, stop grumbling, stop crying. We are going to press on. We've got work to do. CBC, God bless you, and God bless the United States of America.

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AMANPOUR: The president is on a mission to energize a dispirited base. A big piece of that strategy, his newly combative tone as he travels the country pushing his jobs plan.

But the question remains when it comes to jobs, can the president turn rhetoric into reality? And joining me now to talk about this, the president's senior adviser and former campaign manager, David Plouffe.

Thank you for being here this morning.

PLOUFFE: Thanks for having me.

AMANPOUR: Can I ask you first about the new tone? And White House communications director Dan Pfeiffer said this week that we've entered and we're going into a new phase. What does he mean? What is this new phase?

PLOUFFE: Well, obviously, we had a tough summer, the whole country did, because we had the default of the United States economy hanging in the balance. We obviously are not going to have that sort of that Damocles hanging over our economy again for a long time.

So the phase here is basically, we need action. The American people know the economy is too weak. Too many of them are suffering. So the question for Washington is, are we going to continue to play political games and -- and -- or are we going to say, we can do something right now to create jobs, to put money in the pockets of the middle-class, hire construction workers, teachers, veterans? The president's plan would have a profound impact on the economy, and Congress ought to act right now.

AMANPOUR: OK, so you're talking about the president's jobs bill, but even the Democrats aren't bringing it to the floor. The Senate majority leader, Harry Reid, has said the floor's too jammed right now, he can't get it on the schedule. I mean, what does that mean?

PLOUFFE: No, no. We expect to have a vote on the American Jobs Act in October.

AMANPOUR: You do?

PLOUFFE: And we're going to -- yeah, we're going to continue to go around the country and here in Washington and make the case. We think there's been huge support for it in the Democratic Party and across the country.

AMANPOUR: Is October late?

PLOUFFE: Most economists -- no, it's not late. Most economists have looked at this and said it would have a profound impact on the unemployment rate, on our growth, on job creation. It's the right thing to do.

And, again, the question is, what -- if we don't act, do these members of Congress really want to go home at the end of the year and say, "You know, I didn't -- I couldn't be bothered to help the economy"?

AMANPOUR: A lot of Democrats on Capitol Hill are actually talking negativity about parts of it. If the whole bill came up now, as a whole, whether it's today or in October, do you think it would pass the Democratic-controlled Senate?

PLOUFFE: Well, first of all, the vast majority of comments from Democrats -- and, again, from economists, from the American people, it's been enormously positive...

AMANPOUR: But do you think it will pass?

PLOUFFE: I think it's got a very good chance. This has tax cuts for every small business and every worker, rehiring teachers, modernizing our schools, helping rebuild our infrastructure, all things that can help the economy in the short term and are important for our long-term economic future. And they traditionally have had bipartisan support.

AMANPOUR: Now, Christine Romer, the president's former economic adviser, gave a robust defense today in the newspapers of this, but there are others who are still looking at it quite skeptically. For instance, the White House, when they drew this up, asked the economist Mark Zandi to look at it, and he's since told the A.P. that the stimulus will start fading away and the economy will be back in the same place in three years from now, so basically saying that what -- what you've put forward is kind of a Band-Aid.

PLOUFFE: Well, first of all, so what are we supposed to do? Nothing? So the economy will be worse over the next year or two? That makes no sense at all.

This is part of a longer-term economic strategy. The economy is too weak right now. We need to jump-start it. The American Jobs Act will provide that jump-start, to help us into next year and the year after that.

We have to get our fiscal house in order, and we have to really focus on the things we know are going to make a difference, education, innovation, investment. So this American Jobs Act can -- yes, it can help in the short term, but it's part of making sure we come out of this -- the American people understand, it took us a long time to get into this point. It's going to take us a long time to get out. But eventually we're going to get back to solid, consistent economic growth.

AMANPOUR: Now, part of paying for this jobs bill is taxes. Also, the president talked about the millionaire tax, the Buffett rule. Let me show what President Clinton has said about that, and, of course, playing golf with the president this weekend, I wonder if it came up. This is what President Clinton said about taxes.

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CLINTON: I personally don't believe we ought to be raising taxes or cutting spending, either one, until we get this economy off the ground. I'll pay more, but it won't solve the problem.

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AMANPOUR: So, I mean, there are people who are really questioning this Buffett rule, as well, some people calling it a gimmick, asking, exactly how much is going to be raised? How many people will be paying more?

PLOUFFE: Well, first, President Clinton has been very supportive of the American Jobs Act and our approach.

AMANPOUR: Right, but on this particular issue of taxes.

PLOUFFE: Well -- well, the point is, obviously, the revenues -- none of them would start until 2013, just as we're careful in the spending cuts, because we are in a very fragile economic time.

It's really a question of fairness and what kind of country we're going to live in. There are 22,000 people making over $1 million. They're paying an effective tax rate in the teens. As Warren Buffett said, he pays less in taxes effectively than his secretary does. That's not right.

And what the president wants to do, throughout his presidency and what he's calling for next year, is to cut taxes for just about everybody in America, every middle-class person by $1,500, every small business. So this is tax cuts for just about everybody in America. But the people at the very top of the spectrum, the largest corporations, the people who benefit from special tax treatment and loopholes, we need to close those so that we are asking everybody to do their fair share so they can get a fair shake.

AMANPOUR: Back to the -- winning the -- trying to win the election and getting the economy back on track, James Carville, a former major strategist for President Clinton, as you know, said that it's time for the White House to panic. Last year, you memorably called people who were saying those kind of things "bed-wetters." Is James Carville a bed-wetter right now?

PLOUFFE: Well, I think that everybody understands the urgency of the economic situation. And so our focus is on what -- what Congress ought to do is act in a little bit more panic fashion, because people need action right now on the economy. And that's what our focus on.

The president's got a terrific short-term plan to help the economy, the American Jobs Act. It's part of his longer-term economic strategy. And that's what our focus is going to be on, is -- as the president said in his speech to Congress a few weeks ago, there's 14 months until the next election. The American people don't have 14 months to wait. So while there's going to be some big debates in that election that will be settled by the election, we have to act right now.

AMANPOUR: David Plouffe, thank you very much, indeed, for joining us.

PLOUFFE: Thank you, Christiane.

AMANPOUR: So, as the White House continues to push its jobs plan, Wall Street ended its worst week since the financial crisis in the fall of 2008. For the week, the Dow dropped 738 points, which is down 6.4 percent. And anxiety over a global economic downturn rattled markets around the world.

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(UNKNOWN): Fears have increased over a second wave of worldwide economic recession, as Asian markets opened up with a slump.

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AMANPOUR: Even in China, which had been a bright spot in the global economy, business activity is down sharply.

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(UNKNOWN): And a lot of economic pain out there, especially across Europe, this morning.

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AMANPOUR: And Europe's growing debt crisis threatens to undermine its banks, as Greece teeters perilously on the edge of default. A statement issued by the International Monetary Fund, as it meets in Washington this weekend, warned, "The global economy has ended a dangerous phase," calling for exceptional vigilance, coordination, and readiness to take bold action.

Joining me now, four people with bold ideas about the global economic crisis, Austan Goolsbee, the former chairman of President Obama's Council of Economic Advisers and now back in his role as professor of economics at the University of Chicago; Mohamed El-Erian, CEO of PIMCO, one of the world's largest investment firms; Reuters global editor-at-large Chrystia Freeland, and, of course, ABC's George Will.

Thank you all. This is a big week of problems for the economy, George. What do you think -- the White House is trying to get Europe to stop this -- this debacle and this contagion. What should be happening now with Greece?

WILL: Understanding that Greece is going to default. Greece has not yet in its two-year crisis fired a single civil servant. Greece has a national railroad, the revenues of which are one-seventh of their expenses. The Greek transportation minister said it would be cheaper to put all their passengers in taxi cabs. They've done nothing to -- now, imagine, Christiane, starting the next recession at 9.1 unemployment, starting the next recession with 22 percent of Americans with mortgages underwater. That's what we face.

AMANPOUR: That's rather dire medicine. Obviously, everybody is trying to figure out how to at least manage a partial Greek default, but a full-scale default, what precise impact would it have on the world and on Americans?

GOOLSBEE: I mean, it wouldn't be good. And I think you've -- I don't quite see how they get out of this box, both -- the Europeans are politically boxed in. I think George is right. You have seen this kind of fiscal unease, but at the same time, being locked in a -- in a monetary union where the Germans have been able to not have their currency appreciate.

AMANPOUR: But what will this do for Americans?

GOOLSBEE: And so for Americans, at the least, it's going to be another bad blow to the economy. I mean, I think that's why we should be focusing on trying to shift to exports, shift to investment, and get ourselves growing, because we shouldn't be looking for help coming from Europe.

AMANPOUR: All right. Mohamed El-Erian, Chrystia Freeland, everybody's talking about growth, growth, growth. But it seems the conventional wisdom so far is that all the austerity has not produced the kind of growth that is needed for all of this.

Mohamed El-Erian, are the European governments on the right track?

EL-ERIAN: No. Greece started as an infection in the toe and was allowed to spread, and now Europe has three distinct problems. It has a debt problem, focused on sovereign. It has a banking crisis, and it has a growth problem. So what we're going to have to see is action by the Europeans to go forward on all three.

This weekend, when everybody came together, it was a little bit like an intervention.

AMANPOUR: At the IMF here?

EL-ERIAN: At the IMF meeting. It was a bit like an intervention. The Europeans sat there, and their friends and families came around and said, "Guys, you don't get it. You've got to move now. You don't have time." And I think the Europeans were shaken by what they heard from everybody. And the question now is, when they go back to Europe, can they get their act together?

FREELAND: And I think it's a really huge question. I mean, to return to your initial question, Christiane, of what impact does this have on the U.S., I think potentially devastating. You know, I think that this could be worse than Lehman. And I have a real feeling of how things looked in 2008 before the Lehman crisis, that everyone knew things were bad, but no one was getting together to act. And that's what I see happening in Europe.

And the danger is, there is a real possibility, if the Greek situation falls apart, that you have the whole euro being affected. Some economists have estimated that you would then have in the peripheral European economies GDP collapsing by 40 percent to 50 percent, in the core ones, 20 percent. Imagine what that does to the whole world.

AMANPOUR: And what does it do to people who are watching? What does it do to their savings, to their 401(k)s? What does this mean in real terms?

FREELAND: It means the incredibly weak U.S. economy has another huge blow. You know, Europe as a whole is the biggest economy, and that would just mean a huge shrinkage of the world.

AMANPOUR: So we kind of know what's on the table, but what are the tools? What are the -- I mean, we know the diagnosis. What's the remedy? What is the remedy? The Fed came out this week and it said the significant -- used the word significant, and that caused a whole a lot of uproar.

EL-ERIAN: Yes. I mean, this was the only -- only the third time that we could find that they use the word "significant" before "downside risk," right? The first time was in September '08...

AMANPOUR: So that had a psychological impact, as well as everything else?

EL-ERIAN: Oh, huge. I mean, that's why we wiped a trillion dollars -- I mean, if you want to know what it means for the 401(k), they've basically lost 6.5 percent of their savings over the week. We need to move quickly on a number of areas, and it has to be the U.S. having the Sputnik moment, realizing that the time has come for political unity, Europe having a moment of truth, and China helping out.

WILL: Maybe the answer is to quit looking for remedies. That is, we keep trying to cure Greece. Let it go.

AMANPOUR: But, George, we saw what happened when Lehman fell, and what if the others had fallen? I mean, it would have been a drama worse than we've already had.

WILL: What is being suggested is they ought to have what we did after Lehman Brothers, which is a TARP for all of Europe. Italy is too big to fail and too big to bail. It's the third-largest economy over there. There is not enough money in Europe to bail out Europe.

FREELAND: I think that's actually wrong. And the problem with saying, "Just let it go," is they have a shared currency now, so just let it go isn't an alternative.

WILL: Let it go, too.

FREELAND: You have to have -- you have -- OK, but let the euro go is not simple. That's much more complicated than letting Lehman fail.

WILL: It doesn't get...

FREELAND: And the people who are supporting that have to have a clear plan for how Europe looks without the euro.

WILL: It doesn't get simpler by delaying the inevitable.

AMANPOUR: But what I hear is that there are the financial resources and tools to deal with this, but the -- but the politics around is so difficult. Austan, you know about that.

GOOLSBEE: I think that -- look, I'd say two things. The first is, the politicians and policymakers in Europe aren't dumb. I mean, they look around. Every single government around the world that bailed out its financial institutions fell. And if the U.S. had a parliamentary system, we would have fallen twice over the last three years from this. It's highly toxic.

And so with their version of the TARP, they didn't have stress tests the first time around. Everybody presumes their banks aren't in as good a condition as ours were, and that's why they didn't make it public. Their TARP isn't as big and isn't structured to be as helpful to get private money in there.

So if they go -- if they get into problems, I don't know that the euro would survive. I kind of think the U.S. has got to -- we've got to just focus on what we can do. There's -- there's not much we can do about that, except tell the Europeans, "You've got to fess up to your problems. You've got to show the world what's in the banks. And you've got to recapitalize them."

But on our side, I truly hope that Mohamed is right that we can start coming together. It doesn't have to be just government-directed to -- to get the economy growing, but it's got to grow. We've got to shift to business investment and exports. There's not going to be massive residential construction again. That bubbles over.

AMANPOUR: So just to go to Mohamed's point, Secretary Geithner said this week, "We're seeing a terrible wave of politics get in the way of governments doing what is necessary and essential and urgent for the economy. We have a political system that looks manifestly broken, and it makes people nervous about the future."

I mean, to add to that, I'm already hearing, you know, it's -- it's all over the place that people -- Capitol Hill right behind me -- are concerned that even this relatively minor thing that they're having a big argument about right now, FEMA and disaster, is causing this gridlock. So how they can do the heavy lifting if they can't do the light lifting?

EL-ERIAN: The image that you always have to keep in your mind is that the global economy and the markets are in the backseat, and the policymakers are on the front seat. And what is happening on the front seat is the following. First, the drivers are very erratic. Secondly, they're not even looking through the windscreen; they're arguing with each other.

In that situation, people get very nervous. In that situation, you lose confidence. That is true for Europe. That is true for the U.S.

We have two distinct issues. We have a political issue and an engineering problem. In Europe, both are very hard. In the U.S., it's mainly political issue. If we get the politics right, the engineering isn't that difficult.

FREELAND: And the problem is that engineering does become more difficult if Europe falls apart. So, you know, Americans tend to focus, when they think about the U.S. problems on domestic politics, if you see this huge external shock from Europe, today is going to look like a fabulous, great economic situation.

AMANPOUR: Let me just ask -- I'll be right with you, George -- just to follow up on what you said about China, I mean, we've been talking about headwinds to the American economy. Now comes the headache of China, which is softening. And that could be a major problem. People say you can't count on China to engine the world economy. Do you think that's over the top or is that right?

FREELAND: I actually think the concerns about the emerging markets being an independent drag on the world economy are a little overblown. You know, this slowdown that we're seeing in China, that was engineered by the Chinese who were worried about too much inflation.

I think the bigger issue is, when you talk to people in emerging markets -- and I know Mohamed does a lot, as well -- is their total loss of confidence in the West, in both the U.S. and in Europe. You know, they're saying, we're used to you guys, you know, being the people running the global economy, and now we see you really both don't know what to do and don't have the will to do it.

WILL: Austan's quite right. The leaders of Europe are very intelligent people. It takes a lot of intelligence to produce a really sophisticated mistake like the euro, and it takes courage and political courage to stand back and say, "We made a mistake. Let's unwind this nonsense."

What we did in this country with housing is we took measure after measure to keep the housing market from reaching its bottom and correcting the overhang of all the houses we built, so we're still living with that. And they're going to make the same mistake in Europe.

GOOLSBEE: Look, I think, in Europe, they've kind of turned this into a bad Monty Python skit, where, you know, the guy comes out and says, "We need to act," and the next one says, "You're right, let's draft -- no more talking, we're start acting." "I second the motion. Let's start doing something." I mean, they're not actually doing anything. They just keep agreeing that they're going to work in concert.

But the U.S. -- we've got to put -- there's not -- there's not much we can do about that. And it's going to -- we're going to once again take some more blows, like the high oil prices, like the events in Japan. If we don't do something about our growth -- that is our -- over the next five years, our number-one issue is not how do we cut. It's, how do we grow? That's the most important thing. And we've got to have a seriousness about that that so far we do not have.

AMANPOUR: That is the issue all over the world. How do we grow? So we've got a minute left. Prescription for growth?

GOOLSBEE: I mean, I think it's focus on investment, whether it's sign free-trade agreements, putting a focus on experts, and shifting away from consumer spending and residential construction as the drivers. That's the only way you get broad-based growth in the country.

EL-ERIAN: So I would go one step further. Recognize that the world is changing very rapidly, step back, decide where you want to go, and come up with structural changes. Get housing to work again. Get credit to work again. Get infrastructure in place. And get the labor market to work again. Structural, structural, structural.

AMANPOUR: Austan sort of says let's not focus so much on consumer demand. Let's focus on -- on getting this growth going. Isn't the whole -- one of the big problems the psychology of consumers? Even with low interest rates, they're looking not to -- to be able to do it?

FREELAND: There's the psychology of consumers, though. It's also the psychology of businesses, right? I mean, one of the stories right now is, businesses have a huge amount of money on their balance sheets. Companies are rich, and they are not investing. So that's what I would focus on.

AMANPOUR: All right.

WILL: Austan says exports. The administration right now is persecuting the biggest exporter the country has, Boeing. Stop doing harm. Let's start there.

AMANPOUR: And we'll continue this in the green room.

And coming up, Rick Perry on the ropes.

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PERRY: Yep, there may be slicker candidates and there may be smoother debaters, but I know what I believe in, and I'm going to stand on that belief every day. I will guide this country with a deep, deep rudder.

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AMANPOUR: Can the new frontrunner come back from a shaky debate performance? Or is Chris Christie waiting in the wings to steal his thunder? The roundtable is next.

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CHRISTIE: What do I have to do short of suicide to convince people I'm not running? Apparently, I actually have to commit suicide.

(LAUGHTER)

I'm not running for president

SAWYER: Categorically not running?

CHRISTIE: Yeah, I mean, I don't know how else to put it, Diane. I mean, the answer is, no, I'm not doing it.

I'm 100 percent certain I'm not going to run.

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AMANPOUR: New Jersey Governor Chris Christie has absolutely unequivocally ruled out running for president this year, but over the past 24 hours, calls for him to enter the race have hit fever pitch. So will he take the plunge?

With me today, George Will, ABC News political director Amy Walter, Republican strategist Mary Matalin, and Democratic strategist Donna Brazile. I should say "George Will again. Thank you for continuing here.

And will Chris Christie be a stronger candidate than Perry? Will he jump in?

WILL: He will not. How many times and how many ways does the man have to say no before we quit running around in circles in this town because someone purporting to be a journalist purports to have known something? He has said over and over again he won't, and he won't.

AMANPOUR: So what is it, then, Amy? What is it? Is it -- is it -- is it a desperate disappointment with a current crop? Because clearly, the donors, people who want him to come in are raising the bar here or raising the tone.

WALTER: Well, listen, going back to what George said and watching Rick Perry this weekend, it's clear that Rick Perry is Exhibit A for why you can't wait until the last minute to get into a presidential contest. And if the Chris Christie people who are begging him to get in watched what happened at the debate, watched what's happening with the follow-up, this should be a flashing red light, warning, warning, getting in, in October, it's not a good idea.

AMANPOUR: OK, so, let us -- you talk about the debate. You're talking about these warnings lights. Let's put up some of the sounds that came out of that debate, some of what he said and some of what Mitt Romney said in response.

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PERRY: If you say that we should not educate children who have come into our state for no other reason than they've been brought there, by no fault of their own, I don't think you have a heart.

ROMNEY: If you're opposed to illegal immigration, it doesn't mean that you don't have a heart. It means that you have a heart and a brain.

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AMANPOUR: So, Mary, this goes to the heart of one of the big issues in the Republican sort of campaign right now. How much does that hurt Rick Perry, what he said about being heartless if you don't provide tuition for children of the illegal...

MATALIN: That was not his finest moment, but the dynamic of the Republican primary has not changed. It's still a Romney and anti-Romney. Romney still has the same job, defeat the anti-Romney and to assuage conservatives, which is why they're an anti-Romney hole (ph) in the first place.

Rick Perry is not the best debater. He's jujitsuing that weakness, that deficit. He's got to say, "I may have the worst debate record, but I have the best jobs record." And he has to reject the premise that debate performance is dispositive, either as the route to victory or in the office.

If you're a president, you're called on to decide, not to debate. And he's going to do that. He has other ways to communicate which are superior to the other candidates. He can rock a room. You just saw him doing that. He has plenty of money to get spots out. So he's -- you know, three out of the four of things that you need to do to win a primary, he's a superior candidate.

BRAZILE: Perry has damaged himself, but it's still early. This is a marathon. There are plenty of debates where he can hone in his skills. His organizational powers are questionable, now that he's lost a straw poll to businessman Herman Cain.

But I still believe this is Perry's race to lose, in large part because the conservatives are looking for somebody who's electable. He has regional advantage, unlike Mitt Romney, and he's still able to draw upon some of the money that's out there from conservatives. I still believe Republicans are on a shopping spree. And ultimately, Chris Christie will not get into the race and they'll have to decide which among the second-tier candidates they might elevate.

AMANPOUR: Well, at the risk of being the "dump on Perry" table, which we don't want to be, but it did come up so often this week, and we have this sound bite about his un-shaky part of his debate performance on -- on "This Week." So let's play that.

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PERRY: Is it the Mitt Romney that was on the side of -- against the Second Amendment before he was for the Second Amendment? Was it -- was before he was before these social programs, from the standpoint of he was for standing up for Roe v. Wade, before he was against Roe v. Wade? He was for Race to the Top, he's for Obamacare, and now he's against it.

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AMANPOUR: Is that a pain that one can get through?

WILL: It's painful. Donna says it's still early. It could be late. It could be late, in the sense that we know the field we're going to pick from. And long before the Iowa caucuses, we may be down to one, effectively.

Tim Pawlenty got in trouble when he did not -- had a chance to attack Romney and didn't. Perry's in trouble because he attacked Romney and did it so incompetently.

There's also the problem that the Republican Party has been in recent years too southern. In the last five presidential cycles, they've got 79 percent of their electoral votes from the South. That's too much.

The Republican strategy for years has been carry the 11 states of the Confederacy, add Oklahoma and Kentucky, carry the eight states of Mountain West, Arizona, New Mexico, to the Canadian border, then spend a sum equal to the gross national product of Brazil to carry Ohio. And then you get to be president.

(LAUGHTER)

That won't work anymore, partly because Barack Obama did expand the battlefield, and that's another question about Governor Perry.

AMANPOUR: So what's going on, do you think, in the backrooms, as the Republicans look to really get a candidate that can beat Barack Obama? I mean, I just ask because of the whole establishment, non-establishment thing that we've talked about.

MATALIN: OK, the old adage was Democrats fall in love, Republicans fall in line. We've had primary (inaudible) modern politics. So now arranged marriage, if you will. So now this is like high school dating, and no one ever lives up to the expectations. There's no Republican Romeo.

So Perry, if -- particularly if you've come in as a frontrunner like that, when Romney was the frontrunner, there was -- there are all sorts of imperfections about him. Whoever's the frontrunner is going to be in that position.

So what we are doing is trying to get out of this notion of perfection being the enemy of good and go back to what the larger dynamic of this race is. The Republican generic has been beating the specific Barack Obama for weeks on end now. That's the bigger dynamic.

WALTER: And that's right. And guess who else is beating Barack Obama right now? That's Mitt Romney. I mean, in many ways, that's the biggest loser of all of this, is that we haven't even discussed the fact that, whether it was in Florida, the recent polling out of there, shows he's ahead of the president in Florida. USA Today-Gallup poll, he's tied with the president. Rick Perry is a little bit further behind. So they have a candidate right now who's winning independents, who's doing well among those voters that George was just talking about, and yet they're still looking for that high school sweetheart, and they're not going to find it.

AMANPOUR: So, why, quickly, if they have the candidate?

WALTER: Because they're not in love with them. And this is the problem, that conservatives continue to think that there's somebody else out there, whether it's Chris Christie, or they're going to make Rick Perry into being what they want him to be.

WILL: And Romney's best friend may turn out to be Greece, because the more serious the world becomes, the more people are going to say, who do we want to manage the calamity that is engulfing us? And it may be coming at us.

BRAZILE: Well, you know, what's -- Tina Turner said it best. What's love got to do with it?

(LAUGHTER)

And, unfortunately, I think the Republicans are already looking at victory before -- President Obama still has a great deal of assets. I mean, this -- he's had a terrible month, but he's finally pivoted to something that I believe most Americans care about, and that is talking about jobs. Republicans are -- care about the president losing his job, but most voters want the president to still succeed in creating jobs.

And so I think, as long as he can stay focused on his number-one message right now, which is job creation, take it to the Republicans, the president will be able to get back many of the Democrats and independents that he's lost over the summer.

AMANPOUR: And you saw his speech last night, obviously. You were probably there, the...

BRAZILE: Uh-uh.

(CROSSTALK)

AMANPOUR: Well, anyway, you saw it.

BRAZILE: Just because a lot of black people are gathering...

(CROSSTALK)

(LAUGHTER)

AMANPOUR: So was it right to -- to -- to, you know, give them a poke in the side there, saying, "Listen, guys, get your marching shoes on"?

BRAZILE: He said take off your bedroom slippers. No one had on their slippers; they just want to march. But they don't want to march to bipartisan coordination, when they see the president have to give up so much in pursuit of getting Republicans on board. That's why I think last night the president, once again, emphasized jobs, jobs, jobs. As long as he's talking about jobs, everybody will march in line.

AMANPOUR: So are you -- are you convinced, are you pleased by the new combative tone that everybody's talking about that President Obama is adopting?

BRAZILE: You know, I think I can speak for many Democrats, they want someone in the room who will fight for Democratic core values, Democratic beliefs. Just like Republicans fight for their core values, Tea Party want a purist. That's why they're not happy with Romney. They -- Democrats want a fighter. And that's what Obama is presenting himself as.

WALTER: Well, and here's where the immigration issue becomes really interesting, because while in the primary we know it's problematic, and it's problematic for Perry, not just because it's a social issue problem, but it could also be a fiscal issue problem for him, right? He's trying to put himself out there as -- he's a guy who's going to look out for your wallet, and then they come back at him and say, well, actually, you're giving tax benefits to illegal immigrants.

But it's also a problem for -- for Republicans to say, "Let's put this guy out because of his immigration issues." Yet to win the presidency, you've got to get Hispanic voters.

MATALIN: Can I speak to that? He did not speak well to that. It is not taxpayer subsidies. It is not amnesty. When you have a border problem the likes of Texas, because of the failure of the Feds -- and he has 10 times more illegals than Massachusetts, for instance -- then you have to deal with that problem.

He's not subsidizing their education. He's saying, if you have a residency requirement, three years there, you've graduated from high school, you pledged to -- citizenship, then we're going to give you in-state tuition, which is arguably fiscally responsible, more fiscally responsible...

(CROSSTALK)

MATALIN: ... than letting these uneducated illegals become a ward of the state or go into crime. He didn't make that argument. That argument is there to be made. It will be made. And any -- even the most Attila the Hun right-winger would understand that as a positive achievement.

BRAZILE: And it had bipartisan support in the Texas legislature; 13 states have a similar DREAM Act. It's a pathway for success for our undocumented immigrants. And I think -- you're right. I think he can make that argument, but that will put him in trouble with a lot of the Tea Party Republicans, who want a real, true conservative. As Michele Bachmann would say, we don't want to sell out this time.

WILL: And that's the next question facing the Republicans: Will Rick Perry bring his A game to the next debate? Or have we seen his A game? In which case, that's alarming.

AMANPOUR: And you will all hopefully continue to debate this in the green room at abcnews.com/thisweek.

And when we return, after a tough week, what can jump-start the Palestinian-Israeli peace talks? I'll ask the top Palestinian negotiator Hanan Ashrawi.

(COMMERCIAL BREAK)

AMANPOUR: A triumphant homecoming today for the Palestinian president, Mahmoud Abbas. Abbas was greeted by cheering crowds in Ramallah, fresh off his trip to the United Nations, where he demanded that Palestine be recognized as a state, a move that is vigorously opposed by both President Obama and the Israeli prime minister, Benjamin Netanyahu, who on Friday called for direct negotiations right now.

(BEGIN VIDEO CLIP)

NETANYAHU: We've both just flown thousands of miles to New York. Now we're in the same city. We're in the same building. If we genuinely want peace, what is there to stop us from meeting today and beginning peace negotiations?

(END VIDEO CLIP)

AMANPOUR: And joining me now, Hanan Ashrawi, a top Palestinian negotiator.

Thank you for being with us.

ASHRAWI: Thank you, Christiane. It's good to be here.

AMANPOUR: It's really good to have you and to talk about this really important issue.

ASHRAWI: Absolutely.

AMANPOUR: Is there a day after? President Abbas did what he did; prime minister of Israel has said, come on, let's talk, let's not wave papers around. Is there negotiations in the offing?

ASHRAWI: Well, you know what we've been doing for the last 20 years. We've been negotiating, Christiane. We've been negotiating ad nauseum with a process that had no relationship to reality. That's the problem.

AMANPOUR: So what happens now, though? Now we're in a new situation.

ASHRAWI: Now negotiations are not an objective. They are a means. And these have been a very flawed instrument. Either you fix the tool, the instrument, or you find alternatives. So if you negotiate and you buy Israel time to create unilateral facts, to build more settlements, to steal more land, it is in danger of destroying the whole -- not just peace process, but the prospects of peace.

AMANPOUR: The United States and its allies, the quartet, U.N., et cetera, have called for talks to start and to be concluded by the end of 2012.

ASHRAWI: Absolutely.

AMANPOUR: Is that remotely possible?

ASHRAWI: Look, what's possible is -- and we've said this very clearly -- if Israel commits to the terms of reference '67 boundaries, the two-state solution, Jerusalem as the capital, and with a timeframe, binding timeframe, as well as cessation of all settlement activities -- Israel talks about the two-state solution, talks about talks, but is busy stealing the land. It has stolen over 40 percent of the West Bank, and it has annexed Jerusalem, and it has changed the terms of reference and the agenda.

AMANPOUR: And...

ASHRAWI: So if they commit, we will negotiate. If they don't commit, then we have to look for alternatives, because this is the end of the two-state solution. Look, Christiane, we've known each other for years. I'm not prone to hyperbole or lies or anything, but -- and no-panic politics (ph), but when President Abbas said this is the moment of truth, this is it, because soon there will be no two-state solution.

AMANPOUR: So people are concerned that he may have raised his people's expectations, that this is just going to deepen intransigence from the United States, from those opposed to these unilateral moves, and could lead to violence...

(CROSSTALK)

AMANPOUR: Do you think that's possible?

ASHRAWI: Look, the only unilateral moves are Israeli moves on the ground (inaudible) the apartheid wall, the...

AMANPOUR: But what do you think is going to be the reaction of the Palestinians?

ASHRAWI: Settlements -- no, the Palestinian people are very political, very astute, and they know -- they know that this a new phase. This is not the end of the road. This is the beginning of a new phase, that for 20 years, we've seen more lives lost, more land lost, more freedoms lost, and Israel has maintained the enslavement of the whole Palestinian people. They want to see a change in the modus operandi. They want the Palestinian not just identity, but rights to be vindicated and to be based on international law and international humanitarian law.

AMANPOUR: Prime...

ASHRAWI: If it doesn't happen, then the power politics of a brutal military occupation will prevail.

AMANPOUR: Prime Minister Netanyahu, as you saw, said let's talk now. One of the things he spoke very loudly about at the U.N. was recognize Israel as a Jewish state. If you want a Palestinian state, fine, recognize Israel as a Jewish state.

ASHRAWI: Look -- look, we recognized Israel in...

AMANPOUR: Will the Palestinians do that? Because the quartet's even...

(CROSSTALK)

ASHRAWI: We recognized Israel in '93. If Israel wants to change its name, it has to go to the Security Council or whatever and ask everybody that's recognized it to recognize it again as a Jewish state. We want a Palestinian state that is pluralistic, inclusive, and tolerant. I don't want an Islamic state or a Christian state. Why should I want a Jewish state?

But at the same time, look, in Israel, there are Palestinians who are Christians and Muslims. And when we say Jewish state, it means not only are they legitimately discriminated against, but that the Palestinian refugees have no right to return.

AMANPOUR: Let...

ASHRAWI: Now, if Israel wants to call itself a Jewish state, then it has to go the proper procedures to change its name.

AMANPOUR: But as you know very well...

ASHRAWI: But we recognized it already. How come we're the only people who are asked to re-recognize Israel?

AMANPOUR: But you know very well -- and I know we're not going to negotiate this now -- but the whole issue of -- of return is a big issue, and they won't all be allowed to go into Israel.

ASHRAWI: But that's -- you see, that's the problem. Israel has placed so many preconditions. It wants to annex Jerusalem. It wants to remove the refugees from the agenda. It wants to keep its troops in the Jordan Valley. It wants to (inaudible) it wants everything and it wants to annex all the settlement clusters and then says, "Let's talk."

No. There are unacceptable preconditions. Either you negotiate in good faith and act accordingly, in order to achieve the two-state solution, or this option will no longer be available, particularly given the Arab Spring, where this is a new phase, this is a new region, and it's a new ballgame, and they should understand the significance. AMANPOUR: And we'll keep watching it. Complicated issue, as ever. Hanan Ashrawi, thank you very much, indeed, for joining us.

ASHRAWI: Thank you. My pleasure.

AMANPOUR: And up next, the British prime minister, David Cameron, on economic turmoil, the Middle East peace, and Rupert Murdoch. My exclusive interview, coming up.

(COMMERCIAL BREAK)

AMANPOUR: The Obama administration has made it as plain as day. America opposes efforts to admit Palestinian to the United States as a state. But some U.S. allies aren't so sure, chief among them, the United Kingdom.

I sat down with the British prime minister, David Cameron, for an exclusive wide-ranging interview.

(BEGIN VIDEOTAPE)

AMANPOUR: What is Britain's position on this? Should they be admitted?

CAMERON: Well, our view is very simple. We want to see a Palestinian state alongside a secure state of Israel. And we want to see that on the ground, not just in U.N. resolutions. So our approach here at the U.N. will be to use the leverage that we have to try and maximize the chances of talks getting going again, leading to the creation of that state.

AMANPOUR: Do you think that they should be recognized?

CAMERON: I think, of course they should have a state. They should be then recognized as a state. That is what needs to happen. But I think we have to -- we have to be very clear, the only way, in fact, this can come about is for the Israelis and Palestinians to sit down and to agree the state and its borders and its security and the security and safety of Israel. That's the only way it can come about.

AMANPOUR: Let's talk about Libya. Britain and France led the liberation of Libya. You were there with...

CAMERON: Well, let me correct you. The Libyan people led the liberation of Libya. We were there to help.

AMANPOUR: Could it have happened without NATO?

CAMERON: No, I don't think it could. There were countries like Britain and France that were prepared to step forward and ask their brave service personnel to fly missions over Libya, to drop bombs on Gadhafi's tanks, and to stop his war machine in its tracks.

AMANPOUR: How do you prevent Libya from becoming Iraq?

CAMERON: From everything I've seen of the National Transitional Council, they want to be national and transitional. They don't want to descend into tribalism or extreme Islamism.

Second point, this isn't Iraq, partly because the Libyans have done this largely themselves. You don't have the vacuum that was there in Iraq that led to such a -- such a problem.

AMANPOUR: Gadhafi, he's still there. He's leading some kind of insurgency. What do you think's going to happen to him?

CAMERON: I think strategically it is over for the Gadhafi regime. Obviously, what I want to see is Gadhafi brought to trial, perhaps in his own country to start with, but the ICC rules are there, as well -- so that he faces up to the crimes that he committed against his people.

AMANPOUR: Let's switch to the economy and to what we all saw in England during August, the riots on the street.

CAMERON: Well, first of all, I don't think it was in any way linked to the economy. These were not protests. They were not political arguments. They weren't political demonstrations. It was, quite simply, looting. It was criminality.

AMANPOUR: You've instituted austerity measures. The economic growth is not there. People are saying now, as they look at austerity, that perhaps your governments are focusing on the wrong thing and that it should be about growth and employment. What do you say to that?

CAMERON: Well, we obviously need growth and employment in our country. And actually, the British economy has grown this year. We have created jobs since the election, particularly jobs in the private sector.

But the key point is this: You have to remember that Britain was forecast to have a bigger budget deficit than Greece. It was forecast to have the biggest budget deficit in the whole of the G-20. If we haven't got on top of our deficit and shown the world we had a plan to make our economy pay properly for itself, then we would have seen interest rates go up, we would have seen confidence sapped out of our economy.

You can see in other parts of Europe where exactly that has happened. We have to understand, this is a debt crisis. It's not a traditional cyclical recession, where you just turn on the money taps. You've got to deal with the debts. You've got to show the world you can pay for your debts, as well as having a very strong growth strategy.

AMANPOUR: Another huge spotlight on England over the summer was the Rupert Murdoch-News Corp-News of the World phone-hacking, and you were front-and-center in parliament talking about that. Has, as you said, James Murdoch still got questions to answer about this? And, secondly, do you believe this is the end of the cozy relationship that's existed between your government and previous governments and the Murdoch empire?

CAMERON: Basically, the answer to both is -- is yes.

On the second point, I think the relationship will change. I think it has been too close, too cozy. As I put it, you know, too much time was spent, understandably, courting, not just whether it was the Murdochs or News International, but also everyone from the BBC or the Guardian newspaper. Politicians are always trying to get across their message and win plaudits from the media.

But I think we spent too much time on that and not enough time on working out, have we got the right regulatory framework to deal with media abuses? And we don't. We need to change that. And that's one of the things that the review will do.

AMANPOUR: All right. Prime Minister, thank you very much for joining us.

CAMERON: Thank you. Pleasure.

AMANPOUR: Thank you.

(END VIDEOTAPE)

AMANPOUR: And you can find more of my interview with Prime Minister Cameron on abcnews.com/thisweek.

And up next, the Sunday funnies.

(COMMERCIAL BREAK)

AMANPOUR: And now, the Sunday funnies.

(BEGIN VIDEO CLIP)

COLBERT: Just listen to Obama's speech calling for patience from the Palestinians.

OBAMA: Peace is hard. Peace is hard work. That's part of what makes peace so hard.

COLBERT: Peace is hard, unlike winning the Nobel Peace Prize, which is surprisingly easy.

(LAUGHTER)

FALLON: Yesterday, President Obama put his hand up and accidentally blocked a U.N. member's face during a group photo. If you think that's bad, check out what Biden was doing. Look at that.

(LAUGHTER)

MEYERS: President Obama on Monday defended his new proposed tax rate for millionaires, saying this is not class warfare, it's math, which is unfortunate since America is way better at warfare than math.

(LAUGHTER)

(END VIDEO CLIP)

AMANPOUR: And we'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: And now, "In Memoriam."

And we remember all of those who died in war this week. The Pentagon released the names of 11 soldiers and Marines killed in Iraq and Afghanistan.

We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: That's our program this week. Be sure to watch "World News" with David Muir tonight for all the latest headlines. For all of us here, thank you for watching, and we'll see you next week.

END