'This Week' Transcript: House Speaker John Boehner and House Democratic Leader Nancy Pelosi

WASHINGTON, DC, MAY 20, 2012— -- (BEGIN VIDEO CLIP)

STEPHANOPOULOS (voice-over): Good morning, and welcome to "This Week."

The gloves come off, as the House speaker draws a line in the sand on the debt limit.

BOEHNER: I told the president, we're not doing those things that way anymore.

GEITHNER: Political politicians threatening to default, it's deeply irresponsible.

STEPHANOPOULOS: And on the campaign trail with Bain Capital.

(UNKNOWN): We view Mitt Romney as a job destroyer.

STEPHANOPOULOS: Obama's economy.

ROMNEY: A prairie fire of debt is sweeping across the nation.

BIDEN: They don't get us. They don't get who we are.

STEPHANOPOULOS: And Reverend Wright all in play.

ROMNEY: Obviously that's something I repudiate.

STEPHANOPOULOS: Topics for our exclusive headliners, the two most powerful members of the House, Speaker John Boehner and Democratic Leader Nancy Pelosi.

Then, the Facebook IPO and the founder who renounced his citizenship. That and all the week's politics on our powerhouse roundtable, with George Will, Donna Brazile, Matthew Dowd, plus, Laura Ingraham of Fox News and Lieutenant Governor Gavin Newsom of Current TV.

ANNOUNCER: From ABC News, "This Week" with George Stephanopoulos. It's your voice, your vote. Reporting from the Newseum in Washington, D.C., George Stephanopoulos.

(END VIDEO CLIP)

STEPHANOPOULOS: Hello again. President Obama and his fellow G-8 leaders left Camp David last night for a NATO summit in Chicago after agreeing to do all they can to get our economies growing stronger with good jobs, but there was more evidence this week that we do not have any consensus on how to do that here in Washington, where the parties are still far apart on how to handle the budgets, jobs, and our national debt.

Speaker Boehner laid down the gauntlet on Tuesday.

(BEGIN VIDEO CLIP)

BOEHNER: When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase.

(END VIDEO CLIP)

STEPHANOPOULOS: And the president's team fired right back.

(BEGIN VIDEO CLIP)

BROWN: The debt limit question has bubbled up. Do you see...

GEITHNER: Do you believe it?

BROWN: Can you believe it?

GEITHNER: I can't. I can't. I don't understand it.

BROWN: You can't? Because?

GEITHNER: I don't understand it.

(END VIDEO CLIP)

STEPHANOPOULOS: We'll dig into this debate and all the week's political news on our roundtable, but first, my exclusive interviews from the Capitol. I began by asking the speaker to explain why he wants another showdown on the debt limit.

(BEGIN VIDEOTAPE)

BOEHNER: George, the American people are still asking the question, where are the jobs? And dealing with our deficit and our debt would help create more economic growth in the United States, and it would lift this cloud of uncertainty that's causing employers to wonder, "What's next?" So dealing with our debt and our deficit are critically important.

STEPHANOPOULOS: But doesn't this -- this threat to hold the debt limit up if you don't get the spending cuts actually create more uncertainty over the next several months?

BOEHNER: No, George, the issue is the debt. You know, people aren't clamoring to invest in Greece today. And if we don't begin to deal with our debt and our deficit in an -- in an honest and serious way, we're not going to have many options. Listen, I'm not going to apologize for leading. The real issue here is, will the president lead?

STEPHANOPOULOS: Well, as you know, a lot of people say that what makes us like Greece is putting the question of whether or not we're going to pay our bills, making that a political question. That's what the Economist said.

BOEHNER: Well, George, remember, again, this is about jobs. If we really are serious about getting the American people back to work, removing the clouds of uncertainty are important. We -- you look at the end of the year, we're looking at the largest tax increase in America history on January the 1st. We're looking at big cuts to our Department of Defense that are going to affect our ability to keep Americans safe. And we're looking at an increase in the debt limit. Why do we want to wait and rush this through at the end of the year after the election?

STEPHANOPOULOS: But you know this is not going to happen between now and the election.

BOEHNER: George, it's important that we actually do what the American people sent us here to do. Why do we always have to allow elections to get in the way of doing the right thing?

STEPHANOPOULOS: You know, you -- you talk about everything that's hitting at the end of the year. The National Journal, as I'm sure you saw this, has written about it, said that that big -- what -- fiscal cliff, that's what Bernanke called it, at the end of the year, is your last chance, Boehner's last chance.

And I want to read you a little bit of the article and get you to respond, because it was quite a piercing article in places. The writer, John Farrell, says, false starts and failures characterize John Boehner's nearly two-year record as speaker. As the leader of the House GOP, he has faced two crises of this scale and come up short on each occasion. No one has ever doubted his sincerity, his conviction or his patriotism. What they look for is his leadership.

BOEHNER: You know, George, I've never been shy about leading. But, you know, leaders need followers. And we've got 89 brand-new members. We've got a pretty disparate caucus.

STEPHANOPOULOS: Some say they're leading you.

BOEHNER: And it's hard to keep 218 frogs in a wheelbarrow long enough to get a bill passed.

STEPHANOPOULOS: Quite an image.

BOEHNER: But, you know, if -- if we weren't trying to do big things on behalf of our country, my job would be a lot easier. And the challenge that I have is that we always have some members who want to do more. Well, I want to do more, too, but Republicans are still a minority here in Washington. We got the Democrats controlling the Senate.

STEPHANOPOULOS: Well, you're the speaker of the House.

BOEHNER: I know. But we got -- Democrats control the Senate. We got a Democrat in the White House. And -- and our members are pretty frustrated.

STEPHANOPOULOS: Can you get more than half of your members to support a compromise with Democrats? That's what it's going to take.

BOEHNER: Oh, listen, we've worked with Democrats. You look through all these jobs bills in the Senate, 30 of them sitting over there, part of our plan for American job creators. All of them passed with bipartisan support.

STEPHANOPOULOS: Not on these big budget bills, though.

BOEHNER: So, on the budget, we've done a budget. Where's the Senate? Eleven hundred and twenty days since they have passed a budget.

STEPHANOPOULOS: Talk a little bit about the presidential campaign. The Democrats have come out all guns blazing this week on -- on Mitt Romney's background at Bain Capital, ads in your state, Ohio. The vice president went to your state and said that "Mitt Romney's experience at Bain is one of costing workers jobs, costing them their pensions, and putting a burden on taxpayers, too." How do you respond to that in an effective way?

BOEHNER: Well, I think Mitt Romney's got very -- has had a very successful career. And -- and I think his prescriptions for fixing our economy are a lot better than the president's. The president's policies...

(CROSSTALK)

STEPHANOPOULOS: But do you think the Bain experience is going to bring him down?

BOEHNER: I don't believe so. The issue is going to be -- be the economy. And I believe that Governor Romney's proposals will strengthen our economy and get more Americans back to work.

STEPHANOPOULOS: His proposals. But will his background at Bain end up being an anchor? Clearly, the Democrats think they have some traction here.

BOEHNER: They may, but I don't believe so.

STEPHANOPOULOS: We also saw this week that whole flameout on this issue of whether or not Reverend Wright should be used in the campaign. What do you say to Republicans who think that's going to work?

BOEHNER: George, the issue is not Revenue Wright. The issue is the economy.

STEPHANOPOULOS: Just before we walked in here, the Democratic Congressional Campaign Committee, I saw an e-mail. They're already using that proposal to raise money among Democrats, calling it race-baiting at its worst.

BOEHNER: Well, listen. This kind of nonsense shouldn't happen. The -- the election's going to be about the economy and getting Americans back to work. And I think Governor Romney's prescriptions are much better.

STEPHANOPOULOS: A couple of other things before I let you go. Facebook IPO is today. And I know you don't pick stocks, but what I do want to ask you about is we saw a couple of senators, Senator Schumer and Senator Casey, yesterday introduce legislation about one of the Facebook founders, Eduardo Saverin, who's renounced his citizenship. They say -- and they want to pass legislation that says anyone who renounces their citizenship should still pay all the taxes they owe and, if they don't, they can't come back here. Do you support that legislation?

BOEHNER: Well, there's already a law on the books, George, but this is outrageous. This is absolutely outrageous.

STEPHANOPOULOS: What's outrageous?

BOEHNER: That some -- that somebody would renounce their citizenship to avoid paying taxes. Again, it's already against the law.

STEPHANOPOULOS: So you don't think you need this new legislation?

BOEHNER: No, I'm not sure it's necessary. But...

(CROSSTALK)

STEPHANOPOULOS: Would you support it if it is?

BOEHNER: If it's necessary, sure, I would support it.

STEPHANOPOULOS: How about on the issue of JPMorgan? We saw that their losses continued to climb on this trade that many believe -- and I know it's still a murky question -- but many believe it would run afoul of the Dodd-Frank law. And some -- and they believe that this is a sign, though, that even tougher regulation may be needed. Are you still confident that repealing Dodd-Frank is the right thing to do in the face of stories like this?

BOEHNER: George, there's no law against stupidity, no law against stupid trades. And as long as depositors' money wasn't at risk and as long as there's no risk of a taxpayer bailout, they should be held accountable by the market and their shareholders. And they are. I don't believe there's anything in Dodd-Frank that would've prevented this activity at JPMorgan.

STEPHANOPOULOS: And you're still for repeal?

BOEHNER: There are big problems with this law, and it needs -- it needs some big changes.

STEPHANOPOULOS: You said a couple weeks ago and got a lot of attention that there was perhaps a one in three chance that Republicans lose control of the House. I know that means there's a two-thirds chance that they hold it, in your view, but what do you think could happen between now and November that would cause Republicans to lose the House?

BOEHNER: Well, George, I feel pretty good about where we are today. But you know, my job as the leader is to make sure that, if everything falls apart, that we still have the tools that we need to hold on to our majority in the House. We've got 89 freshmen members running for re-election in most cases. They've got a lot of tough elections out there. But, again, if the election were held today...

STEPHANOPOULOS: But we see...

BOEHNER: I feel good about it.

STEPHANOPOULOS: We see incumbents falling all over. What do you say about the prospect -- and then some people think this is quite possible, that President Obama loses because of this wave and House Republicans get swept out, as well?

BOEHNER: Well, I don't believe that's going to happen. As a matter of fact, I think most of our members are doing very well. But again, you never know what's going to happen over the next six months. My job is to make sure our team is prepared.

STEPHANOPOULOS: And you're confident that if Republicans hold the House, you'll come back as speaker?

BOEHNER: I am.

STEPHANOPOULOS: Mr. Speaker, thanks very much.

BOEHNER: Nice to see you.

(END VIDEOTAPE)

STEPHANOPOULOS: The speaker sure did appear confident, but his demand that a debt ceiling increase be matched dollar for dollar by spending cuts has hit a brick wall with Democrats. That was especially clear after I walked across the Capitol for a conversation with their leader in the House, Nancy Pelosi.

(BEGIN VIDEOTAPE)

PELOSI: My response to what the speaker said is here we go again. Last year, just the threat of not lifting the debt ceiling caused us to -- our credit rating to be lowered. This is not a responsible, mature, sensible place for us to go. We all know we have to reduce the deficit. We have to do it in a balanced way.

The speaker wants to go over the edge. We have cut over a trillion dollars in the Budget Control Act -- since the Budget Control Act of last year. There has to be more reductions, but we have to have revenue and we have to have growth.

STEPHANOPOULOS: But what about his idea that you should start working on it right now and not waiting until the election?

PELOSI: Oh, absolutely. I challenge the speaker right now to bring the middle-income tax cuts to the floor. That would give a...

STEPHANOPOULOS: That's going to increase the deficit, isn't it?

PELOSI: It would -- no, I don't think so. I think it would -- it would be -- bringing middle-income tax cuts to the floor now, passing those would help our economic recovery, would be a clear signal that the upper-end tax cuts for the wealthy will expire, because they will not be -- the middle-income tax cuts will not be held hostage to those, and that we can go to the table and say, what are the cuts we need to make? What are the -- what is the revenue that we have?

Assuming the expiration of the high-end tax cuts, how do we create growth for small businesses, the entrepreneurial spirit of America? This is exactly the path we should go down. We should work together. They're over the edge. We want a balanced approach.

STEPHANOPOULOS: The speaker's pretty clear about having pressure from his own conference. He talks about being leader. He says it's like having 218 frogs in a wheelbarrow. And -- and I wonder how much pressure you're going to face from your own members on this.

A couple of weeks ago, you actually said you would vote for the Simpson-Bowles deficit reduction plan. And that has caused a former member, Senator Russ Feingold, to call that a potential capitulation on bedrock values. He says it makes it easier for corporate Democrats to join with corporate Republicans and destroy these programs. What do you say to Democrats who...

PELOSI: I don't think...

STEPHANOPOULOS: ... believe that?

PELOSI: ... he understands what that is. What I said was -- and what I believe is, that the framework of Simpson-Bowles was a very important one. It assumed the expiration of the high-end tax cuts. It took a harsh look at all of our spending, including our defense...

STEPHANOPOULOS: Including Medicare and Social Security.

PELOSI: ... our defense spending. It -- it was -- had a proper balance between cuts and revenues that we have to have. What I didn't like about it was what it said about Social Security, but I said that can be handled separately. Social Security, whatever we do on Social Security should be returned to Social Security to extend its life.

What this is about, though, is about the creation of jobs. How do we do that as we do our budget? We do it by a balance between establishing our priorities, making some cuts, but making sure that we're investing in the future and bringing in some revenue.

And so I -- our members have been very -- we stuck with the president on the grand bargain that he had last year, that he and the speaker agreed to, and then the speaker walked away from. He walked away from it.

STEPHANOPOULOS: As you know, he says the president upped the ante on him and demanded more tax increases.

PELOSI: That's simply not true (inaudible) you told that, because it's simply not true.

STEPHANOPOULOS: One other thing he seems quite confident on is if this election is about the economy, the Republicans are going to win.

PELOSI: The fact is, this election, if it is about the economy, the president will make his case that he has been a job-creator from day one. And the president's record of job creation, taking us from a deep recession, almost a depression, to a hopeful place, versus whatever the Republicans will propose, but they have stood in the way of every job piece of legislation that would be significant in that regard. But let's have the debate.

STEPHANOPOULOS: If the election were held today, do you think the Democrats would win?

PELOSI: Yes, I do. I think it would be dead-even, about -- the speaker three -- 30 percent chance that they would lose or something. But I think it's bigger than that. But what he did say that was correct was that there are about 50 Republican seats in play. I would say 75. I feel pretty good about where we are.

STEPHANOPOULOS: I know you're just back from Afghanistan. Senator Feinstein came back a couple of weeks ago and said that she found the Taliban was gaining strength from her time on the ground. Is that what you saw?

PELOSI: I didn't see that, no. I don't disagree with the senator. They may have gained strength, but they have lost some other ground, you know what I mean? So maybe it evens out.

STEPHANOPOULOS: You're not worried if that happens that the Taliban will be able to take over?

PELOSI: If the security is trained properly, yes, I think that they can protect their country. But I think what we -- we do not have an eternal commitment to being there in a military way.

STEPHANOPOULOS: Politically, what more do you think President Obama has to do to win this election? I know you think the Democrats are in good shape in the House. What do you think he needs to do to put over this very close race with Mitt Romney?

PELOSI: These elections are always about the future. As I always say, President Lincoln said, "Public sentiment is everything." So regardless of all the good things he has done, he has to convey that to the American people. And he has to show what the clear distinction is.

STEPHANOPOULOS: The DCCC, Democratic Congressional Campaign Committee, put out a fundraising appeal talking about the Republican super PAC plan on Reverend Wright, calling it race-baiting at its worst. And I just wondered, do you really think that's fair, given the fact that Mitt Romney and even the head of the super PAC have absolutely repudiated this effort?

PELOSI: Well, I don't think so. I think that -- what I saw -- just using the public record as a guide -- was Governor Romney on TV this morning, and they quoted what he said in February, what he said just this past February.

STEPHANOPOULOS: About Reverend Wright?

PELOSI: About Reverend Wright. And then they said to him, "Well, this seems different from what you're saying now. Do you stand by what you said in February?" And he said, "I don't know what I said in February, but I stand by it." But what he said in February was very similar to what they were saying about Reverend Wright.

STEPHANOPOULOS: So no regrets?

PELOSI: No regrets about...

STEPHANOPOULOS: For this fundraising appeal?

PELOSI: Why would we have any regrets? He has -- he stood by his remarks in February. So I think maybe it might be useful to see what he said in February and see that he stands by those remarks. But that's not what the election's about. The election is about three things: jobs, jobs, and jobs. This election is not about Reverend Wright.

STEPHANOPOULOS: And, finally, you're celebrating 25 years in the House this year.

PELOSI: Yeah.

STEPHANOPOULOS: Do you think you'll come back in the 26th as speaker?

PELOSI: Well, I just want to come back with the Democrats in the majority. That's really what is important. So I'm very excited about the election and the opportunity it gives us to make the distinction and very proud that President Obama is the top of our ticket.

STEPHANOPOULOS: And you'll worry about the rest later?

PELOSI: That's incidental. What's important is that the Democrats win and that, again, we have proper airing. What I would like to see in this election is a recognition that we must reduce the role of money in campaigns. So we want to win, move on to public financing of campaigns, overturn the Supreme Court decision on Citizens United, and -- and, again, when we reduce the role of money in campaigns and increase the civility, we'll elect more women to Congress.

STEPHANOPOULOS: Madam Leader, thanks very much for your time this morning.

PELOSI: Thank you.

(END VIDEOTAPE)

STEPHANOPOULOS: Let's get right to the roundtable now. I am joined, as always, by George Will, Donna Brazile, Matthew Dowd, Laura Ingraham, talk show host, Fox News, also your paperback, "Of Thee I Zing," is not out -- "Of Thee I Zing." I want to make sure I get that right. Also, California Lieutenant Governor Gavin Newsom, also now hosts a show on Current TV called Gavin Newsom.

NEWSOM: They'll let anyone do a show, George.

STEPHANOPOULOS: I guess so. Let's talk about this fiscal cliff that I just talked about with the speaker and the leader. One thing they both said, George, is that both sides want to address this before the election. That's about the only thing certain not to happen.

WILL: Exactly, which means they'll have about seven weeks to prevent $8 trillion, I guess over a decade, of tax increases and spending cuts from hitting a fragile economy. So everyone realizes it's serious. Now, in discussing this, the word "debacle" is mandatory, because everyone says we don't want to go through the debacle we had last August with the increase of the debt ceiling, to which I say, what debacle? Of course it was untidy. That's what democracy looks like...

(CROSSTALK)

STEPHANOPOULOS: America's credit rating was downgraded.

WILL: And what happened? Liquidity from all over the world flooded in to our downgraded Treasuries. Made no difference what ever. And we sailed right on. What the president wanted at that time was what he called a clean extension of the debt ceiling increase, which meant no restraint on spending, no super-committee, nothing.

STEPHANOPOULOS: But does this uncertainty, Gavin Newsom -- are you seeing any of the fallout yet in California as businesses cut back, start to plan for chaos, if you can?

NEWSOM: Well, yeah, I mean -- I love these guys. They're always concerned about uncertainty. And here's the ultimate manifestation of uncertainty, talking about going right back in to a debate that's going to sideline every other legitimate debate for the next few months.

At the same time, though, how could anyone be surprised? I guess, George, to your point, they don't feel it was a debacle. From my perspective, it was a debacle. It was a sideshow and not only cost our bond rating, but a lot of confidence. But it also cost the president. And I think there's pure politics in this. His ratings dropped significantly during that debate, Congress generally speaking. And I think it was very telling to watch Speaker Boehner talk about those 89 frogs. He's looking over his shoulder, particularly after what happened...

(CROSSTALK)

STEPHANOPOULOS: But you're also saying out loud what a lot of Democrats have been thinking -- let me bring this Laura Ingraham -- that this is kind of a deliberate strategy to hurt President Obama before the election.

NEWSOM: Yeah.

INGRAHAM: Well, look, when I heard Nancy Pelosi say, well, it's time for us to be responsible, we end to look mature in this process, does $15 trillion look mature or responsible? So the debacle only becomes the conversation about what to do about the crisis, yet the debacle of the debt that we're being crushed under isn't called a debacle by huge swaths of the political classes.

So whether Pelosi's, you know, positioning herself here or Boehner is, I think it's beside the point, George. Outside of the confines of this studio, across the country, people are shocked about what's happening in Washington, a totally dereliction of duty. We have a problem. We should deal with it now, not in November, not in December, but now.

BRAZILE: I agree. I would love to see the Congress come together with commonsense solutions. This cannot be the Republican, you know, wet dream for more, more, more tax cuts. It has to deal with a balanced approach to both spending, as well as, you know, looking at all of these tax cuts that's going to expire.

I think Mr. Boehner is trying to strengthen his bargaining hand right now, because they're trying to undo the sequester, they want to extend the Bush tax cuts, but we have a deal that's already on the table that the president signed, the Budget Control Act, which cuts discretionary spending to its lowest level since President Eisenhower.

STEPHANOPOULOS: Matt, it does seem like a lame-duck session is the absolute worst time, worst place to deal with this. You're either going to have a new president who hasn't taken office yet or re-elect a president after a close election, a lot of members of Congress who are going to be leaving.

DOWD: Well, that's, I think, the situation -- you watch those interviews -- the situation we're in there's incredible dysfunction today anyway. People don't like either political party. They're tired of the Capitol, and they're tired of the White House, they're tired of a lack of leadership, they're tired of a lack of cooperation, and they're tired of all that.

We watched these two interviews. It was almost like an adult version of Dr. Seuss, where they're saying something when in reality everybody knows it's not going to happen. We're going to have an election. And the aftermath of the election -- and I don't mean to be pessimistic about this -- is only going to be more dysfunction. We're going to have less of a margin in the House, no matter who holds it. We're going to have less of a margin in the Senate, no matter who holds it. And if you have Mitt Romney as president or Barack Obama as president, there's no -- going to be no sense in the country that there is a long-term vision from either one of them of how to solve the dysfunction in Washington and creating some trust in the government.

That's the problem here. And until we solve that problem, nobody buys into anything any of these guys say.

STEPHANOPOULOS: Are you that pessimistic?

WILL: I'm not sure I'm pessimistic. I think I agree with it, but I'm not sure it's all that bad, as a matter of fact. We're going to have to have several elections to start this out, because the country is of two minds about this. I think Ron Brownstein is the one who put it nicely of the National Journal. The parties are converging in strength and diverging in ideology. That makes for stalemate, and we're going to have to live with that until several big elections -- and this will be one, but only one...

BRAZILE: We've had 30 years of talking about tax cuts, tax cuts, tax cuts. We need to have a year where we talk about how to create jobs, how to stabilize the economy, how to invest in infrastructure. That's what we're missing in this conversation.

INGRAHAM: Well, we -- that's all great, but we have no money. I mean, this is like a big fantasy. We are tapped out of money in the United States, and we're talking about infrastructure, which would be great, we all want infrastructure, we want great schools, but America has got to get back to work. Boehner might sound like a broken record on that, but if we don't have more jobs in this country, we don't have people back to work, then this is all a big fantasy conversation we're having here today.

NEWSOM: Yeah, my biggest fear, you're not going to have jobs if you have this debate that stifles the ability for people to think past the next six months. I mean, obviously, you're absolutely right, George. In a lame-duck session, it will be very difficult to solve these things. But to start right now, to throw -- to poison the well, in terms of the job creation that is going on, as modest as it is and as frustrating as we all are it's not moving faster, creates a tremendous amount of uncertainty. States like California, with 2 million people unemployed, 10.5 percent unemployment, these -- these states cannot afford this debate in Washington, D.C., right now.

STEPHANOPOULOS: We've got to take a break right now. We're going to come back with a lot more coming up, Bain Capital, Reverend Wright. Will either issue cut come November? Plus, Obama...

(BEGIN VIDEO CLIP)

OBAMA: Ronald Reagan said that, that great socialist Ronald Reagan.

(END VIDEO CLIP)

STEPHANOPOULOS: Obama invokes Reagan.

(BEGIN VIDEO CLIP)

ROMNEY: President Clinton said the right thing when he said the era of big government was over.

(END VIDEO CLIP)

STEPHANOPOULOS: Romney cites Clinton. What is up with that? And why did Facebook's IPO go flat?

(BEGIN VIDEO CLIP)

MEYERS: Facebook on Friday went public, making the company worth an estimated $104 billion, though I don't know if you can really put a price tag on watching your high school friends slowly get fatter.

(LAUGHTER)

FALLON: This week, investors will be able to buy shares of Facebook stock for the first time ever. It's great. Now you can lose all your money in the same place you lost all your time.

(END VIDEO CLIP)

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(UNKNOWN): He's running for president, and if he's going to run the country the way he ran our business, I wouldn't want him there. He's so out of touch with the average person in this country, how could you care? How could you care for the average working person if you feel that way?

(UNKNOWN): Day one, President Romney immediately approves the Keystone pipeline, creating thousands of jobs that Obama blocked. President Romney introduces tax cuts and reforms that reward job-creators, not punish them. President Romney issues orders to begin replacing Obamacare with commonsense health care reform. That's what a Romney presidency will be like.

(END VIDEO CLIP)

STEPHANOPOULOS: Those are the ads up on the air right now. Let's talk about it on our roundtable. I'm joined again by George Will, Donna Brazile, Matthew Dowd, Laura Ingraham, Gavin Newsom.

And, George, let me go to you, because we saw this week that the Obama campaign and the Democrats began this all-out assault on Bain Capital, Romney's tenure there. Joe Biden gave a blistering speech. We saw the ads, and they believe this is the best way to turn Romney's business experience into a negative. He calls it character assassination. I guess my question is, will it work better in the general than it did in the primaries? We saw Newt Gingrich try it.

WILL: I don't think so, first of all, because the people making this argument, who presided over an absolute wonder, which is we have 365,000 fewer jobs today than we had when the recovery started in June 2009. Think of that. A recovery that subtracts from -- from the total jobs in the country.

They're focusing in this one ad on a steel mill at a time in the '90s when in one year the American steel industry, the six largest firms lost $3 billion. The industry had already shed 200,000 jobs as a result of a steel glut in the world. Bain comes in -- now, the accusation in the ad is Bain came in as vultures to suck the wealth out and go away. Bain invested $100 million in this. That's a funny way of sucking wealth out of it.

BRAZILE: Well, they buy up companies, George, they sell the assets, lay off the workers, and then leave town. There's more to this Bain thing than just one company and one industry. I think it's a large story. And since Mitt Romney won't talk about exactly how he will create jobs, he gives us a number and it changes with the weather.

Look, this is a continuation of where both Rick Perry, as well as Newt Gingrich, they -- they had these attacks, and then the Republicans say, no, no, no, you're attacking free enterprise. This was a way of doing business.

And I think the Obama campaign is right to use it. Ted Kennedy used it effectively in 1994. And it's going to be used again and again until Mitt Romney can explain exactly what he was doing at that time.

STEPHANOPOULOS: Is it enough, Laura, for him -- for Mitt Romney to point it back to the overall economy, as George Will just did right there? Because he has gotten into a little bit of trouble talking about how many jobs were created. He says 100,000 jobs were created, but he counts all the jobs that followed him, but none of the job losses.

INGRAHAM: No, I never thought that was the best way to go with Bain, because, look, say I created -- you open yourself up for some criticism. But I do think it's right for him to say, look, my record, my record, examine my record, absolutely. But, Mr. President, you know, you did meet two weeks ago with the head of the Blackstone Group in New York, big donors in private equity throughout the United States in Obama's camp. And I don't recall -- I looked back in the '90s, and -- to look to see if Obama had given any speeches in the state legislature or otherwise against private equity firms. I've never seen anything written by him -- I might have missed it, but in my research, I haven't found any great proclamations about the concern about how private equity was, I guess, vampiring all over the United States. This is clearly a campaign tactic.

I don't think in the end it ends up working. I think the spotlight has to be on still, are you better off than you were three-and-a-half, four years ago? The president will try to get away from that metric, but his own standards of measurement stay out there. We were going to create more jobs. We were going to have more growth in this country. Those things have not happened.

NEWSOM: Look, Bain is and was in the business of wealth creation. They're in the business of profit. There's nothing inherently wrong about that. Not job creation, in order to maximize profit, you've got to minimize costs. What's the biggest costs in a business? Personnel. Reducing jobs is the business of Bain, not creating jobs.

This is the proof point of the Romney campaign, that he can create jobs, that he has a better record. He's 47th out of 50 states in job creation when he was chief executive of Massachusetts. He wants to make the case at Bain, and he has made it aggressively for years and years and years. It's absolutely fair game to question that as a basis of his run for president.

So I think it's very shrewd campaign ad. I think it's a very important point in this election, that Obama hit this hard.

STEPHANOPOULOS: How would you defend against it?

DOWD: Well, the situation here -- I think Mitt Romney is vulnerable on this. He was vulnerable in the Republican primary, if Newt Gingrich or Rick Santorum had actually made a well-done message and credible message on this and put weight behind it.

I think the problem Barack Obama is that, one, they haven't done this consistently enough. They haven't done enough behind this. They haven't done enough ads behind this. And as Laura said, I think he lacks some credibility on this. You can't say -- on one hand say how evil these private equity firms are and how bad they are and how bad they are for the country and then say, oh, by the way, because I'm doing good for the country, I'm going to take money from them.

INGRAHAM: The Bain people support Obama. Some Bain people are giving money to Obama.

DOWD: But I think in the end, when we're having -- when we're having an economic argument where people are saying they're tired of government, us losing jobs in government, they also do not like big corporations. And if this is a big corporation's backing -- backing Mitt Romney versus big government backing Barack Obama, that is in independents' minds kind of a stalemate.

BRAZILE: We'll take the money so that we can defend the president's record, because, you know, the one thing that Democrats have to do is to be confident about some of the things that we have accomplished. I mean...

(CROSSTALK)

DOWD: But there is hypocrisy, Donna. There is hypocrisy in it.

BRAZILE: Yeah, but -- yeah, there's some there, but there's private-sector growth. There's been a loss of jobs at the public sector, and the Republicans have cut a lot of state and local jobs. Manufacturing jobs are up, 11 good, strong quarters. I mean, Mitt Romney is not going to win by talking down the economy and hoping that the economy goes in the tank so that he can rescue it.

INGRAHAM: Labor participation rate is disastrous.

BRAZILE: Labor -- the labor force...

INGRAHAM: It's down to 1963 levels, Donna. That is not something to stand up and say, "Gosh, I'm proud of it." We had fewer people working in our economy as a percentage of the overall population...

(CROSSTALK)

BRAZILE: ... we're coming out of a deep recession that requires all hands on deck, a balanced solution to the problem, and what we're having is just a one-way conversation...

INGRAHAM: All right. So the Democrats can't...

(CROSSTALK)

BRAZILE: Senate Democrats?

WILL: ... difficult to talk -- it's difficult to talk in the context of a campaign about the realities of how a capitalist economy works. I'll give you an example. In 2001, the iPod is invented. Ten years later, all the people who worked at Tower Records and elsewhere -- remember records?

BRAZILE: Oh, yes.

WILL: They're gone. And that's a good thing. Now, Borders is gone in large measure because of Amazon and Kindle. Do we want to repeal Amazon and Kindle? This is the way the world works. There is churning. There is friction. There are job losses and net job creation.

NEWSOM: Well, but -- you know, it doesn't feel like that if you worked for Kodak, where they had 19,000 jobs and are bankrupt. And you contrast that to the great wealth creator of our times. That's Facebook and this IPO, $100-plus billion market cap, only 3,000 jobs. So there's this retooling of the economy creates tremendous anxiety. Going after Bain, that participated in the creation of that anxiety, as you argue, I think is good politics and I think it's sound policy to have that discussion and that debate.

STEPHANOPOULOS: I want to get to Facebook in a little bit, but first, we also saw this flurry this week over Reverend Wright, the return of Reverend Wright, at least to the front page for a day. It was over -- you see it right there -- a proposal given to Joe Ricketts, who's the head of a super PAC supporting Mitt Romney, to bring back this issue. Now, as I said in my interviews, George Will, Speaker -- I mean, Mitt Romney has repudiated, Joe Ricketts ended up repudiating, but this was a plan that was made, and it created all kinds of excitement for about 48 hours.

WILL: He didn't -- Joe Ricketts didn't end up repudiating it. He repudiated it the instant he saw it. His group is called End Spending. That's what he's interested in, not the social issues, nothing else. He asked through some of his people for someone to produce a plan, but what they got was a plan that ignored what he's interested in and went after Reverend Wright and all this other stuff. Ricketts took one look at it and said no.

Now, the New York Times -- that didn't fit their narrative, billionaire behaving responsibly. So they said he's studying it, they have commissioned this. They've neglected the whole fact which was that this is a small story with a nice ending, which is a responsible affluent man said no.

DOWD: The thing about these things -- and all of us who've been in politics have seen these crazy stuff that people do. I know Fred Davis, know Fred Davis well. Fred Davis worked for me in 2004 in the Bush campaign, he worked for me...

STEPHANOPOULOS: He made this proposal.

DOWD: ... in the 2006, in the Arnold Schwarzenegger campaign. Fred Davis is a creative guy, but Fred Davis requires adult supervision. Just like a lot of media guys, they require...

WILL: And he got it.

DOWD: ... adult supervision. The problem is, Mitt Romney didn't -- and this is not going to be an issue -- Mitt Romney repudiated this thing, not because it was going to be effective and he thought it might work and I don't want to do it, nobody wants to talk about this. Mitt Romney knows that if we're talking about Reverend Wright, we're not talking about the economy. And if we're not talking about the economy, that benefits Barack Obama.

INGRAHAM: There's something else going on here, though. We were seeing a couple of weeks ago evidence now -- the Obama campaign has an enemies list, where Mr. Vandersloot -- you know, very wealthy man getting involved in politics who is being demonized for various -- I guess social issues and so forth. This is another individual, Joe Ricketts, TD Ameritrade, billionaire, who does ending spending. As George said, it's an economic -- they focus on economic issues.

This to me was a shot across the bow that if you are a wealthy...

STEPHANOPOULOS: This wasn't from the Obama campaign.

INGRAHAM: If you are -- but if you are a wealthy, wealthy person in the United States, you happen to be conservative, you're going to get involved in this election, then we are going to watch everything that you do, and you sort of step over the line, you talk about past associations with President Obama, anything like that, we will try to destroy you. This means not even -- as far as I know, he didn't even see this proposal, I believe, George. And the idea that he was considering it was a total false narrative put forward by the New York Times to send a message to other people, don't you dare get involved in this election, in any type of, quote, "controversial way."

NEWSOM: The difference was his name appeared in it with a quote that said, "Had John McCain produced a similar ad, Barack Obama would not be president today," which makes this more plausible that, George, maybe there's a gray area between what the New York Times said and what you're saying and more likely that there was some discussion. They had a URL, Character Matters, 54-page comprehensive report. They found and identified key leaders to lead. I'm not convinced that this wasn't further along.

(CROSSTALK)

INGRAHAM: But is the president going to be held responsible for everything that MoveOn.org PAC says? I think Jake Tapper raised this issue last week, that, like, why does it always go one way, where the Republican candidate has to repudiate everything that some organization...

(CROSSTALK)

STEPHANOPOULOS: The president's been held -- well, the president's been held accountable for Bill Maher and some others and for Hilary Rosen.

INGRAHAM: Oh, really? For Bill Maher?

STEPHANOPOULOS: Certainly, he was -- he was...

(CROSSTALK)

INGRAHAM: Did he give that money back to Bill Maher?

STEPHANOPOULOS: ... he got questions about it. But don't you think this was more likely leaked by somebody inside who didn't want this campaign to go forward?

INGRAHAM: I don't -- who knows? I don't know. The New York Times described it as someone who was uncomfortable with the tone.

STEPHANOPOULOS: Yeah.

INGRAHAM: But who could it be? It could be anyone. A couple of different people saw this.

DOWD: It could have been Fred. I mean, Fred could have leaked this. Fred did -- Fred did the witch ad for Christine...

INGRAHAM: But above the fold in the New York Times?

DOWD: These -- these guys -- these media guys...

WILL: Twice.

INGRAHAM: Yeah.

DOWD: ... think that if you're talking about him, it's a good thing. Again, this is a situation where Mitt Romney does not want to be talking about Reverend Wright. Mitt Romney does not want to be talking about contraception. Mitt Romney doesn't want to be talking about any of these social issues. Mitt Romney wants to be talking...

INGRAHAM: But why can't other people talk about it?

DOWD: All I'm saying is, Mitt Romney doesn't want to talk about anything but the economy.

INGRAHAM: Ending spending isn't Mitt Romney.

BRAZILE: Well, George, there's just -- we have so much money involved in politics today. I feel like I ran Al Gore's campaign and won on the cheap, given the amount of money that...

(CROSSTALK)

DOWD: I was sitting on the other side when we won.

BRAZILE: I don't think so. Running on the cheap, and compared to the amount of money we have today -- I mean, if you have a pet cause, a pet issue, then, you know, take $10 million out of your whatever, your Swiss bank account, and then just run these crazy ads. This is the -- it's the problem. I mean, my lord, we're going to have another conversation about Reverend Wright. I'm Catholic, so I love bringing up, you know, a black liberation theology, the black church, the black culture. I get a chance to be black for a few days.

But the truth of the matter is, the American people want to talk about the economy. They want to talk about the future of the country. They don't want to have these sideshows.

STEPHANOPOULOS: I think that's exactly right. But, George, in the meantime, Donna brings up the money. And one thing we are seeing this time around -- we saw it in the month of April -- Mitt Romney raised almost as much money as Barack Obama, and the super PACs aligned, supporting him are, you know, five to one outraising the Democratic super PACs...

WILL: Which is why this has suddenly become a problem and a threat to democracy. When George Soros was pouring his money in, in 2004, I don't remember all this. Were you busy, Gavin, denouncing this in 2004?

NEWSOM: I've been denouncing independent expenditures -- money has played a huge role independently. The super PACs just put it on steroids. But, no, people are out there making the same point, a critique, not individualizing it.

Look, it is a good point. It was 10 to 1 cash advantage in the bank for Obama. Now it's about 2 to 1, about $124 million, Romney's got about $61 million. But they each one raised in April at about a $40 million clip. So money is not going to be the big advantage it was in the last election.

INGRAHAM: Look at all those jobs created with this money, all the jobs created.

DOWD: This is -- this is -- I think this is where I fault the Obama campaign for missing a huge window of opportunity they had, because they had a 10 to 1 advantage when Mitt Romney was coming out of -- bruised and battered out of the Republican primary, I think they missed this big window where they could have basically framed this race, kept their boot on him, kept him down when they had a 10 to 1 advantage. And now, as each day goes forward, Mitt Romney looks more and more like he has a chance to win this race, much more so than he did a month ago. He's going to raise more money. He's going to get more enthusiasm. He's going to get all that.

And as each day moves forward, it gets harder and harder for Barack Obama to frame this race in the way he wants. I think that's a huge window he missed.

INGRAHAM: Nancy Pelosi ended up going on in the interview about money in politics. George, you always write about this in your columns, the amount of money spent in advertising for sodas or car companies compared to the amount of money being spent in the elections.

WILL: I'd be very surprised if this year the amount of money spent on politics from dog catcher to president equals the Proctor & Gamble advertising budget.

STEPHANOPOULOS: And what is spent this year is going to be concentrated on far fewer states, though, than ever before. I want to put up a map right now that shows where both campaigns and their allies are advertising right now. There's only about nine of them. You've got Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, and Virginia. Sometimes you might see something in Michigan or Wisconsin, maybe Arizona later.

But, Donna Brazile, you've worked in campaigns. Matthew Dowd has, as well. I have, as well. This is the smallest map I've ever seen this early in a campaign. Usually you're dealing with 18 or 19 battleground states. Now you've got eight or nine.

BRAZILE: Yeah, I mean, I was shocked when I saw the list, George. And I was even more surprised when I looked at the advertising rates that they're spending in, like, you know, down at Greensboro, North Carolina. I mean, those people will not be able to see a soap opera now until December.

But the truth of the matter is, George, is that they're targeting about 8 percent to 12 percent of the population, undecided, independents and moderates. And unless you move away and get a PO Box, they're going to be in your data with information.

Look, I don't know why -- Mitt Romney sent me a letter. He wants my money. And...

STEPHANOPOULOS: I take it he's not going to get it.

BRAZILE: He's not my -- he's not going to get it. But I figured that the reason why is because I subscribe to a lot of golf magazines, fishing, all the extracurricular activities...

INGRAHAM: Good. Good targeting.

BRAZILE: And so I'm being targeted. People are being targeted in these individual states.

DOWD: But what I think -- you know, and you're totally right. In 2004, when we started the campaign, there was about 15 states that we thought as of today -- it went down to eight or nine, but it didn't go down to eight or nine until the last four weeks of the race.

I think this is much more of a reflection of how the country -- how polarized the country is, and now it's sort of -- you have the Texases on one hand, and you have Californias on the other, and you have all of these people and all of these states now -- 80 percent of the country is not going to see the vast bulk of this presidential campaign. Eighty percent of this country will not see most of what is going on and most of what we are all talking about, because they're not in one of these eight or nine states.

STEPHANOPOULOS: You guys won't get it in California.

NEWSOM: No. I mean, we're just a big ATM. The only thing we get are visits and big fundraisers, and then they're on their way back. (inaudible) knows exactly -- Donna, we get the solicitations.

INGRAHAM: Clooney gridlock. That's what you guys got.

NEWSOM: Clooney gridlock. Now it's Sarah Jessica Parker gridlock.

INGRAHAM: Right, exactly.

STEPHANOPOULOS: Let me throw out a proposition to you, though, George, that -- and here it is, that what happens, though, in Greece, as they're dealing with all their debt problems, is going to matter more in this election than any single event during the campaign.

WILL: It might in two ways. First, the optics from Greece, the riots, the carrying-on, the fact that they have an election, and it's something like 16 percent of the new parliament are fascists or communists, the general sense of a model that we're in danger of emulating is breaking under the weight of entitlements -- and the entitlement mentality.

But beyond that, if it gets to Spain, which is a big country -- I mean, Greece has already defaulted, and anything that it happens -- happens there has already been discounted by the markets. But if it gets to Spain, then it could actually affect our economy. And none of the events that you can see could happen down the road can help the president.

STEPHANOPOULOS: And Barack Obama could be in the position John McCain was four years ago, after the financial crisis hit, nothing he can do.

INGRAHAM: Nothing he can do, and you've heard both Paul Ryan and Romney reference Greece frequently in the last just two weeks, and we're going down the Greek road, you know, Greek ruins could become American ruins. Again, the weight of the entitlement structure, we're not -- they didn't want to deal with it for years and years and years, and now they find themselves in a position where they have to deal with it, yet everyone's so used to getting this stuff, free stuff or stuff's that's -- that they're used to, they don't want to have any of it diminished. And that's the problem.

(CROSSTALK)

DOWD: I think when you're in a race that's basically dead-even, and this presidential race is going to stay that way until November, it's like -- on very thin edge, and there's 5 percent or 6 percent of the independent voters are trying to look for a signal of what they should do. They like President Obama. They think he's a good man. They think he has a good family, but they don't like where the country is today. And so any little thing that says, here's what you need to do, if something goes bad in Europe in the middle of the summer, it's one of those things that could happen (inaudible) 5 percent of the country saying, now I know what to do, and that's the problem for President Obama.

BRAZILE: Our largest trading partner -- and so we have a concern about what's going on in Europe. Europe is our largest trading partner. Exports will be impacted. Job creation and the country will be impacted.

Look, the austerity programs and many of these economies, people are tired of it. They're tired of the social contract being broken between the middle class and their countries. It's not just entitlements. They're seeing their way of life change. So this is a huge conversation that we're going to have.

DOWD: But it's not a good sign for incumbents. If you look around the world and look at incumbents...

(CROSSTALK)

STEPHANOPOULOS: Every incumbent is...

(CROSSTALK)

STEPHANOPOULOS: We've only got a couple minutes left. Let's talk about Facebook a little bit. Last night, it turns out, Mark Zuckerberg married his long-time girlfriend, Priscilla Chan, just one day after that IPO that turned out, I guess, to be a bit of a dud. It started at $38, basically ended there, as well. And, George, as you and I were talking just before we came out here, the only reason it ended basically where it started is because banks came in to prop it up.

WILL: You know, and short -- a few days before they issued this, Facebook, which is about advertising -- it's not about pictures of your dog wearing a clown costume. It's about advertising at the end of the day. Three days before this was issued, the third-largest advertiser on Facebook, General Motors, $10 million a year, said we're not doing this anymore because we see no evidence that this is effective. That's a small tremor, but it could mean that the whole economic model on which this projected $104 billion company rests is faulty.

NEWSOM: And, George, let me just pick up -- you know, the economic model, I want to -- I don't want to be parochial here, but in California, we talk about the Facebook effect in terms of capital gains in the state. We're anticipating $500 million in this fiscal year, another $1.5 billion next fiscal year. The concern about what happened with Facebook or didn't happen as it relates to the IPO not popping was what happened with other social media companies. Their stocks plummeted, from Zynga, Pandora, Yelp, LinkedIn, and others, some double-digit.

And there's all kinds of companies now right behind in line, in the queue for similar IPOs. But there's two ways of looking at this. One is the more cynical way, which absolutely is right, that the underwriters propped up the stock and kept it at $38 as a baseline, or the more optimistic way is that they priced the stock about right, which in this day and age is actually a remarkable thing.

STEPHANOPOULOS: Yeah, that is, but Facebook's going to really have to grow. Look at these numbers for comparison. Right now, it's priced at 108 times earnings. That's versus 18 times earnings for Google, Laura. And it's making about $5 per use, $35 per user for Google. They have a long way to go.

INGRAHAM: A long way to go. And the IPO for Google, I believe it was three times earnings, so a much more reasonable valuation at the start. And, look, can I promote my Facebook page now?

(LAUGHTER)

Like, I spend a lot of time on Facebook just because I do it with my show and so I do a lot of Facebook. However, you -- you see that -- and Gavin said this in the make-up -- he didn't make-up, but I did -- in the make-up room...

(CROSSTALK)

INGRAHAM: ... that when you -- no, when your parents are on Facebook -- and I would say our grandparents are on Facebook, the kids are like, eh, maybe it's not such a cool place to be after all. That's -- maybe we'll do Pinterest. Maybe we'll move to the next wave. We're going to do more stuff on our cellphone that does not involve this massive outreach to people. We'll have more private Facebook pages or the next Facebook.

And so I think you got to -- you got to wonder whether this is just more of a passing phase.

(CROSSTALK)

INGRAHAM: As much as I like Facebook.

DOWD: I fear the best day, the financial day that Facebook may have had may have been Friday, because the revenue lines over the last six months for Facebook per user has gone down.

STEPHANOPOULOS: That is all we have time for today. Thank you all very much. We're going to be right back with the story behind this incredible photograph.

But first, we honor our fellow Americans who serve and sacrifice. This week, the Pentagon released the names of six soldiers and Marines killed in Afghanistan.

(COMMERCIAL BREAK)

STEPHANOPOULOS: And before we go, "Your Voice, Your Picks."

For four weeks, you've been sharing photos that show what America means to you, a sailor in Afghanistan seeing his daughter for the first time over Skype, a barn in Manhattan, Manhattan, Montana that is. And this sublime scene from a Hot Springs, Arkansas, shoe repair shop.

We talked with the photographers who snapped two of the most popular shots.

(BEGIN VIDEO CLIP)

(UNKNOWN): Hi, I'm Steve Borko (ph). I live in Bethesda, Maryland. I took the photograph in Monument Valley. I think the American western landscape is, in fact, a part of our heritage, imagining people pushing west with just wagons and horses.

(UNKNOWN): I'm Kristin Frenek (ph), and I'm from Cortland, Indiana. It's my daughter, Lucy Kate (ph). The picture is basically the essence of freedom. She's still enjoying the freedom of the farm that has been in her family for over 100 years.

(END VIDEO CLIP)

STEPHANOPOULOS: Remember, this is the last week to submit a photo, so head over to abcnews.com/thisweek for details. And next Sunday, we'll show you the shot you all liked the best.

We'll be right back.

(COMMERCIAL BREAK)

STEPHANOPOULOS: That is all for us today. Check out "World News" with David Muir tonight. And tune in tomorrow for a rare and exclusive report from Martha Raddatz. She is in Yemen, home to America's most wanted terrorists right now. There are drone strikes going on almost every day against Al Qaida elements there.

And thanks for sharing part of your Sunday with us. I'll see you tomorrow on "GMA."