'This Week' Transcript: Judy Smith, Jack Lew

NEW YORK, July 28, 2013 — -- A rush transcript of "This Week with George Stephanopoulos" airing on Sunday morning, July 28, 2013 on ABC News is below. This copy may not be in its final form and may be updated.

STEPHANOPOULOS: Good morning. And welcome to This Week.

Sexting scandal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How many women were there?

ANTHONY WEINER, NEW YORK CITY MAYORAL CANDIDATE: Six to 10, I suppose.

(END VIDEO CLIP)

STEPHANOPOULOS: Breaking overnight, Anthony Weiner's campaign manager steps down.

Is his wife's support enough to save his candidate?

This morning, exclusive insight from Judy Smith.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a dirty little secret. And dirty little secrets always come out.

(END VIDEO CLIP)

STEPHANOPOULOS: The crisis expert who inspired the hit show "Scandal."

Plus, there they go again.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That's just being a dead beat.

REP. JOHN BOEHNER, (R) OHIO: The speech turned out to be all sizzle and no steak.

(END VIDEO CLIP)

STEPHANOPOULOS: Is Washington set to take America back to the brink of the fall? We take that on with Treasury Secretary Jack Lew and our powerhouse roundtable.

And George Will and Jeremy Schaap from ESPN on baseball's black eye.

All that ahead this Sunday morning.

ANNOUNCER: From ABC News, This Week with George Stephanopoulos starts now.

STEPHANOPOULOS: Hello again. Let's get right to that breaking news in New York Mayor's race. Anthony Weiner's campaign manager has quit after those new revelations that Weiner's sexting continued even as he plotted his comeback run for mayor.

ABC's Jeff Zeleny is here with all the latest. And Jeff, campaign manager is gone, but Weiner still seems determined to stay in this race.

JEFF ZELENY, ABC NEWS CORRESPONDENT: Good morning, George.

That's right, but despite this latest setback, Anthony Weiner just taped a new campaign commercial and insists he's staying in the race, even as the humiliation threatens to consume his candidacy.

(BEGIN VIDEO CLIP)

ZELENY: The resignation of Anthony Weiner's campaign manager just the latest blow for a campaign that looks like it's on the brink.

WEINER: I'm going to have to hope that sooner or later we get back to talking about issues that people care about.

ZELENY: The famously brash New Yorker still struggling to halt an unending barrage.

Mocked by late night comics.

DAVID LETTERMAN, LATE NIGHT WITH DAVID LETTERMAN: He's out on the campaign trail now, or as he calls it, the tour de pants.

ZELENY: Ridiculed by magazines.

Check out the latest cover of the New Yorker.

His former colleagues also taking shots.

REP NANCY PELOSI, (D) CALIFORNIA: It is so disrespectful of women. And what's really stunning about it is they don't even realize it. They don't have a clue.

ZELENY: Everyone, it seems, is piling on.

WEINER: Let me finish my thought - madam.

ZELENY: Even at his own campaign events.

This confrontation came at his most recent stop.

UNIDENTIFIED FEMALE: If I conducted myself in the manner in which you conducted yours, my job would have been gone.

ZELENY: Others only showed up just to tell the candidate to drop out.

UNIDENTIFIED FEMALE: Degrading women. And I wouldn't vote for him either.

ZELENY: It can't seem to get much worse for Weiner, all sparked by his stunning and sometimes bizarre second revelation of sexting.

WEINER: It's not dozens and dozens, it is six to 10, I suppose.

ZELENY: Then there was his wife Huma Abedin's uncomfortable defense.

HUMA ABEDIN, ANTHONY WEINER'S WIFE: I love him. I have forgiven him. I believe in him.

ZELENY: And capped off by one of his sexting partners going public with steamy photos on TMZ.

SYDNEY LEATHERS, ACCUSER: Anthony Weiner is responsible for his downfall.

ZELENY: Despite calls to step aside, this weekend the former Democratic congressman insisted he's staying in the race hoping New Yorkers simply grow tired of it all.

WEINER: It's not up to you to decide, it's not up to me to decide, voters I want to make this decision.

(END VIDEOTAPE)

ZELENY: Weiner's biggest challenge is that forgiving and forgetting takes time. He's already fallen sharply in the polls and there are just 44 days left until the primary. And now with his campaign manager throwing in the towel, Weiner is left to call his own shots -- George.

STEPHANOPOULOS: OK. Jeff, thanks. We'll have more on that in the roundtable.

But now to breaking news in the NSA spy case. With fugitive Edward Snowden in limbo at a Russian airport, we are joined by the journalist who broke his story, Glenn Greenwald. He's here today with new reporting on the domestic surveillance program. Glenn, thanks for joining us. And your new reporting zeroes in on one of the most explosive claims made by Snowden a few weeks back. Let's take a look.

(BEGIN VIDEO CLIP)

EDWARD SNOWDEN, NSA LEAKER: I, sitting at my desk, certainly had the authority to wiretap anyone, from you or your accountant to a federal judge to even the president if I had a personal email.

(END VIDEO CLIP)

STEPHANOPOULOS: Now, that claim was denied by intelligence officials, and the chair of the House Intelligence Committee, Mike Rogers, said that he was actually lying. But your new reporting, you say, bolsters Snowden's claim.

GLENN GREENWALD, JOURNALIST: Right, George. One of the most amazing parts of this entire episode has been that top-level national security officials like James Clapper really did get caught red-handed lying to the American Congress, which everyone now acknowledges, about what the NSA is doing, and it's amazing that he not only hasn't been prosecuted but still has his job. And what that does is it lets national security officials continue to lie to the public, which is what happened in that exchange you just referenced.

The way that I know exactly what analysts have the capability to do when spying on Americans is the story I've been working on for the last month that we're publishing this week very clearly sets forth what these programs are, that NSA analysts, low-level ones, not just ones who work for the NSA but private contractors like Mr. Snowden, are able to do. The NSA has trillions of telephone calls and emails in their databases that they've collected over the last several years. And what these programs are, are very simple screens, like the ones that supermarket clerks or shipping and receiving clerks use, where all an analyst has to do is enter an email address or an IP address, and it does two things. It searches that database and lets them listen to the calls or read the emails of everything that the NSA has stored, or look at the browsing histories or Google search terms that you've entered, and it also alerts them to any further activity that people connected to that email address or that IP address do in the future. And it's all done with no need to go to a court, with no need to even get supervisor approval on the part of the analyst.

There are legal constraints for how you can spy on Americans. You can't target them without going to the FISA court, but these systems allow analysts to listen to whatever emails they want, whatever telephone calls, browsing histories, Microsoft Word documents. It's an incredibly powerful and invasive tool, exactly of the type that Mr. Snowden described, and NSA officials are going to be testifying before the Senate on Wednesday, and I defy them to deny that these programs work exactly as I just said.

STEPHANOPOULOS: But do we have any evidence that this capability, pretty explosive capability, any evidence that it was used?

GREENWALD: Well, there's lots of evidence that there has been abuse on the part of the NSA. There was a report actually by your network, ABC News and Brian Ross, from several years ago, where NSA analysts, low-level ones, got caught eavesdropping on the telephone conversations between soldiers and their girlfriends who were stationed in Iraq and America. There have been reports in the New York Times that the NSA has wildly exceeded the scope of the legal limits that the law allows. There are all sorts of admissions, including this week in a letter to Senator Wyden by James Clapper, that the NSA has exceeded even the legal authority that it acknowledges it has, and they write it off to inadvertent keystrokes or technological confusion.

The real issue here is that what the NSA does is done in complete secrecy. Nobody really monitors who they are eavesdropping on, and so the question of abuse is one that the Congress ought to be investigating much more aggressively.

STEPHANOPOULOS: Finally, I know you've been in some contact with Edward Snowden, and it seems like he is prepared to stay in Russia for some time. Anything new on whether that will be possible, and what Russia will decide?

GREENWALD: Well, I think that what has happened there is the United States is applying lots of pressure. It's probably at this point just pending and will pend for at least a few more days, maybe a couple more weeks before he gets the papers he needs. But I think at this point, he's actually happy that there is no news coming out of Russia, because that allows the focus to be where he wants it to be, which is on the revelations about what the NSA is doing, the incredible debate that took place in the House of Representatives this week, where liberals and conservatives joined together to oppose NSA abuses. And so I think he's content with having nothing happen, so that the focus isn't on him, but is on the substance of the revelations that he came forward to shine light on.

STEPHANOPOULOS: OK, Glenn Greenwald, thanks very much.

GREENWALD: Thanks, George.

STEPHANOPOULOS: And let's get more on this now from two of the top intelligence officials in the Senate, Democrat Dick Durbin, Republican Saxby Chambliss.

And Senator Chambliss, let me begin with you. You're the vice chair of the intelligence committee right now.

Would it surprise you if it turns out that what Mr. Greenwald is reporting there is true, that low level officials have that kind of capability to read e-mails, internet traffic, listen to phone calls?

CHAMBLISS: George, it wouldn't just surprise me, it would shock me. I was back out at NSA just last week, spent a couple hours out there with high and low level NSA officials. And what I have been assured of is that there is no capability at NSA for anyone without a court order to listen to any telephone conversation or to monitor any e-mail. In fact we don't monitor e-mails, that's what kind of assures me that what the reporting is is not correct, because no e-mails are monitored now. They used to be, but that stopped two or three years ago.

So I feel confident that there may have been some abuse, but if it was it was pure accidental.

STEPHANOPOULOS: Senator, first of all do you agree with that? And secondly, you also want to talk about that vote referenced by Glenn Greenwald, that close vote in the House this week where the NSA bulk collection program did survive, but some of your Democratic colleagues are going to be pushing to end it in the Senate as well. Where do you stand on that?

DURBIN: I can tell you, George, that this was an amazing vote. We came within six votes of challenging an intelligence operation. That doesn't happen very often, hardly at all. It's an indication of a healthy democracy where the oversight of congress on even security issues is important.

The last time I called this same issue for a vote, an amendment I offered the Senate judiciary committee, Senator Mike Lee, a Republican of Utah and I co-sponsored it, only one other senator joined us in that vote.

It's clear that the sentiment is growing for oversight. And I think that the efforts by Senators Wyden and Mark Udall as well as Jeff Merkley is going to increase that effort for oversight. That's a healthy thing.

STEPHANOPOULOS: Will you vote for their amendment?

DURBIN: Oh yes, I will. In fact I sponsored it.

I really believe that we should limit this meta data collection. The notion that we're going to collect all of the phone records of everyone in an area code on the off chance someone in that area code may be a suspect at a later time goes way too far.

And there should be another step here, these FISA courts, there should be a real court proceeding. In this case, it's fixed in a way, it's loaded. There's only one case coming before the FISA, the government's case. Let's have an advocate for someone standing up for civil liberties to speak up about the privacy of Americans when they make each of these decisions. And let's release some of the transcripts, redacted, carefully redacted so that people understand the debate that's going on in these FISA courts.

STEPHANOPOULOS: So Senator Chambliss, Democratic support for (inaudible) program seems to be growing. Can you defeat the amendment, number one and, number two, what kind of reforms can you support?

CHAMBLISS: Well, certainly it's good to have a healthy debate on this issue, George. I agree with Dick that the right kind of oversight is absolutely necessary. And we have got oversight now of this program, both by the Department of Justice, by NSA, by the FISA court, by the intelligence committees, by the Judiciary Committee.

Let me tell you, there is no other program in the intelligence community that has as much oversight as this one, because people deserve to have their privacy protected. And I do think that we're going to have to make some changes to make things more transparent.

Whether we should go as far as what Dick's just alluded to, I'm not sure but what that jeopardizes the program.

And let's don't forget, we have got to reach the right kind of balance, George, between protecting Americans and giving 100 percent protection on the privacy side. We should never invade any American citizen's privacy.

But we've also got a responsibility as policymakers to make sure that our intelligence community and our law enforcement community has the tools with which to provide the kind of protection that we've had since 9/11.

If we'd had this program pre-9/11, we now know that there's a good chance we would have intercepted the phone calls between one of the 9/11 hijackers in San Diego, al-Midhar (ph), in a safe house that he was calling in Yemen.

And we were monitoring the safe house, but we weren't monitoring the calls coming out of the United States; Section 215 would have picked those phone calls up. Who knows what might have -- not have happened on 9/11, if that had been the case.

STEPHANOPOULOS: I want to get to another story breaking over the weekend, that violence in Egypt, up to 80 people dead right now after the military has cracked down on those protesters in the Muslim Brotherhood.

Senator Durbin, is it time for the administration to take a different tack, to take a tougher tack now with the military regime? Maybe even threaten more penalties or economic sanctions?

DURBIN: This is a very delicate time in Egypt. Clearly they are searching for leadership and stability. The events over the weekend don't help at all.

We've had a positive relationship between the United States and the Egyptian military, I want to maintain that, but we should make it clear in Egypt, as we made it clear in Libya and in Syria, that firing on your own people is unacceptable by any government.

And in this situation, if it's established that this came from government sources -- it appears it did -- then we have got to make it clear to the Egyptians that's unacceptable conduct.

STEPHANOPOULOS: Senator Chambliss?

CHAMBLISS: It's further proof, George, that going from a dictatorship to a democracy is very, very hard.

And we do need to make sure that there is some sort of peaceful stability in Egypt; exactly what the role of the United States should be there is difficult to determine. They have been our ally for decades. And here all of a sudden we are seeing a move in the right direction, a move towards democracy.

But we have got to be careful that we don't inject ourselves too much into the situation, because it will probably make it worse. But we also need to send a very clear and very strong message to the Egyptian military that we're not going to tolerate, from a friendly-nation relationship standpoint, the kind of violence that we saw over the weekend.

But it is a very, very delicate, sensitive situation that's ongoing there.

STEPHANOPOULOS: Senator Chambliss, Senator Durbin, thanks very much for your time.

DURBIN: Thanks, George.STEPHANOPOULOS: Up next, government shutdown, default; the threats are back.

Will they stop the economy's slow recovery? Treasury Secretary Jack Lew and our powerhouse roundtable are next. Plus:

(BEGIN VIDEO CLIP, "SCANDAL")

KERRY WASHINGTON, ACTRESS, "OLIVIA POPE": Whatever happens, there's always another move. Whatever happens, I do not give up.

STEPHANOPOULOS (voice-over): Anthony Weiner seems to be taking that advice from the hit show "Scandal."

And coming up, the crisis expert who inspired the show, Judy Smith joins our powerhouse roundtable.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now is the time to jump start job creation. It's an agenda that begins with jobs. It's time to rebuild our economy on a new foundation so that we've got real and sustained growth. Our focus has to be on the basic economic issues that matter most to you.

(END VIDEO CLIP)

STEPHANOPOULOS: In White House shorthand it's called the pivot. President Obama did it again this week with big speeches designed to get the country behind him on the economic debates dividing Washington; a government shutdown and the prospect of default are looming again. Treasury Secretary Jack Lew and our roundtable here to weigh in on that.

First, ABC's chief economics correspondent Rebecca Jarvis takes a look at where things stand on the road to recovery.

REBECCA JARVIS, ABC CHIEF ECONOMICS CORRESPONDENT (voice-over): It's a tale of two economies.

UNIDENTIFIED MALE: So what brings you in?

UNIDENTIFIED MALE: Looking for-

UNIDENTIFIED MALE: (inaudible) looking for a car?

(CROSSTALK)

UNIDENTIFIED MALE: Two cars, actually.

UNIDENTIFIED MALE: Excellent.

JARVIS (voice-over): Nissan dealership manager Michael Monisterski says business is booming. He's seen a big increase in sales since the start of May.

MICHAEL MONISTERSKI, MANAGER, NISSAN OF MANHATTAN: We have a lot more customers coming in, a lot more traffic and a lot more real buyers.

JARVIS (voice-over): Then there's the other story: 11.8 million Americans without work, more than 4 million for six months or longer.

JARVIS: On a scale of 1-10, how difficult is it to find a job?

UNIDENTIFIED FEMALE: I would say right now it's about an 8.

JARVIS (voice-over): Yet again triggering a Washington blame game.

OBAMA: With this endless parade of distractions and political posturing and phony scandals, Washington's taken its eye off the ball.

JOHN BOEHNER, SPEAKER OF THE HOUSE: Our country has fallen into the new normal of slow growth, high unemployment and stagnant wages.

JARVIS (voice-over): There are some signs of improvement. Stocks are near all-time high, corporate America turning out record profits, and home sales are up.

But unemployment remains stubbornly high, and Americans overall are skeptical about the recovery: 82 percent say the economy is in just fair or poor condition.

UNIDENTIFIED FEMALE: If Washington can't get it together this fall, then what?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: If they can't raise the debt ceiling, if they can't fund the government into the next fiscal year, then it's going to be a mess. And the risks to the economy are quite significant, easily go back into recession.

JARVIS (voice-over): For THIS WEEK, Rebecca Jarvis, ABC News, New York.

(END VIDEOTAPE)

STEPHANOPOULOS: All right. Thanks to Rebecca for that.

Now let's turn to the Treasury secretary, Jack Lew. Mr. Lew, thank you so much for joining us.

We heard Mark Zandi, in her piece, say that Washington can hurt the recovery if it mishandles these fall showdowns. The first one is going to be over the funding of the government. The president has said that he's going to veto bills that fail to roll back the sequester. House Republicans are going to insist on those spending cuts.

So are we headed to a government shutdown?

LEW: You know, George, I think, though, it is imperative that Washington be part of the solution, not part of the problem. Uh, we can't afford self-inflicted wounds and we can't have these kinds of self-created crises month after month, year after year.

STEPHANOPOULOS: But isn't that where we're headed?

LEW: We saw how bad that was for the economy in 2011. And I hope that Congress learned that this is not a good way to do business.

What the president said is when we do our business this year, we have to remember what we're here to do. We're here to build an economy with opportunity for the American middle class.

He is trying to remind everyone in Washington what the people of America know, which is this is about their future. And we really need to roll up our sleeves and get the work done.

STEPHANOPOULOS: I know that's what he's trying to do. But how does he break this gridlock? And is he going to insist that any government funding bills roll back the sequester?

LEW: Look, George, he's made clear that, um, he is not going to sign appropriations bills that fix defense at the expense of domestic priorities. He's made it clear that when Congress does its work in the fall, he is going to be looking to see is it building a better future for the American middle class?

I think that those are values that are shared by the American people. And I think those are values that are shared by a majority in Congress. And I think we're going to be able to work through these issues. And I certainly hope that Congress isn't looking to create confrontations and false crises because we did see, in 2011, how bad that is for the American economy.

STEPHANOPOULOS: You cited the crisis back in 2011 and the economic harm it did. It -- there certainly seems to be another stand-off. The president says he's not going to negotiate. Speaker Boehner says he's going to insist on more spending cuts.

So how do you come together on that?

LEW: You know, George, I think it's important to remember how much we've done since 2011. You know, when we had these debates in 2011, uh, we hadn't enacted any of the savings or revenue measures that we've now put in place.

We have, on multiple occasions, come together in a bipartisan way. Through the Budget Control Act we reduced spending. At the beginning of this year, we acted to remove the tax breaks for the very wealthy.

What we need to do now is get the composition right. We need to remember that this isn't just about cutting budgets. Obviously, we need to have our fiscal house in order. It's -- what it's about is building the foundation for a strong economy.

I think that there's a basis to work together on that. If the debate is just about abstract numbers, frankly, it misses the point.

STEPHANOPOULOS: I understand...

LEW: This is about building...

STEPHANOPOULOS: -- I understand...

LEW: -- a better future.

STEPHANOPOULOS: -- that those are the president's ideas and that you believe strongly in them. But I don't see the kind of basis for building on that that you are talking about. It sure seems like the sides are dug in right now.

LEW: You know, George, I have talked to a lot of people in Congress, both sides of the aisle, Democrats and Republicans. I talk to leaders. I talk to, you know, members and senators.

There's a majority in Congress that wants to replace the across the board cuts with more sensible policies.

Our challenge is breaking through the logjam in Congress to get that done.

STEPHANOPOULOS: That's my question.

LEW: I actually think we're...

STEPHANOPOULOS: How are you going to do it?

LEW: Well, I think, what the president has done is provided a clear frame where the stakes are clearly in front of both Congress and the American people. I think that, you know, if -- if this is about what we want to accomplish, let's have a debate about what it takes to build an American middle class that's growing and thriving.

STEPHANOPOULOS: But is your (INAUDIBLE)...

LEW: It's not just social policy, it's actually good economic policy.

STEPHANOPOULOS: But is your...

(CROSSTALK)

STEPHANOPOULOS: -- still the same.

LEW: -- actually, it produces a better economy.

STEPHANOPOULOS: But is the bottom line, excuse me, still the same, the President is not going to negotiate over the debt limit? And if that's the case, aren't we headed for the showdown you fear?

LEW: You know, George, I think that, uh, a lot of people watched, uh, 2011 and learned from it, that it was a big mistake. I think that the leaders learned from that that that's not a good way to do business. Congress has to act on this. They're going to have to figure out a path to do it.

STEPHANOPOULOS: And if that includes spending reductions, the president will sign it?

LEW: You know, George, I think the president has made crystal clear, he's not going to negotiate over the debt limit. And I've got to like underscore how important that it.

The mere fact of negotiating over the debt limit, after 2011, would introduce this notion that somehow there's a question about whether or not we're going to pay our bills, whether or not we're going to protect the full faith and credit of the United States.

Well, it's not OK to default. Congress can't let us default. Congress has to do its work.

STEPHANOPOULOS: So will you ask Senator Reid to pass the clean debt limit first?

LEW: Congress is going to have to pass a debt limit that can reach bipartisan consensus in the Congress and that the president can sign into law.

STEPHANOPOULOS: Perhaps the most consequential economic decision the president is going to make the next few weeks of months is the decision to replace Fed Chair Ben Bernanke. Um, and some lobbying has begun, it seems, uh, for two of the main candidates, Fed, uh, Governor Janet Yellen, Larry Summers, the president's former national economic adviser.

Speaker Pelosi and about a third of the Senate Democrats have weighed in on behalf of the idea of a woman candidate and Janet Yellen. Your predecessor, Tim Geithner, is backing Larry Summers. Which side are you on? I know you're part of the discussions. And what is the president looking for in a Fed chair?

LEW: You know, George, I have to start by saying that, uh, Chairman Bernanke has been an extraordinary and remains an extraordinary Fed chairman.

Um, I'm going to keep private any conversations that we're having, uh, with the president on the question of -- of when and what kind of succession, uh, there should be. I think that those conversations are best left in the privacy of the Oval Office.

STEPHANOPOULOS: But the Senate letter suggests that Ms. Yellen will be easier to confirm than Larry Summers. Is that a factor?

LEW: You know, George, I'm really not going to get into commenting on -- on different, uh, candidates and potential paths. The conversations really should stay where they are.

STEPHANOPOULOS: Let me ask you about the situation facing Detroit right now, filing for federal bankruptcy last week. The governing board of the AFL-CIO has weighed in very strongly, saying that the federal government must step up and provide assistance to Detroit.

Is that going to be coming?

LEW: You know, George, uh, Detroit's economic problems have been a long time in developing. We stand with Detroit trying to work through, uh, how it approaches these issues.

To that extent that there are kind of normal relations between the federal government and state and local government, we -- we've been using those methods. Even in the Treasury Department, we have a program where we work to -- to help with housing programs. I think when it comes to the questions between Detroit and its creditors, that's really something that Detroit is going to have to work out with its creditors.

STEPHANOPOULOS: So a federal bailout off the table?

LEW: I -- I think Detroit is going to have to work with its creditors on this.

STEPHANOPOULOS: And that will be the last word today.

Secretary Lew, thanks very much.

LEW: Thanks, George.

STEPHANOPOULOS: Let's get more on this now from the roundtable. Joined by George Will, Peggy Noonan of "The Wall Street Journal," former counselor to the Obama Treasury Department, Steve Rattner, and Katrina Vanden Heuvel, editor and publisher of "The Nation."

So George, you saw me go back and forth with Mr. Lew right there. He says the president is not going to negotiate over the debt limit, but it's going to get worked out. I guess the White House seems to be betting that the Republicans are just going to cave.

GEORGE WILL, ABC NEWS: I think the Republicans know this is a weak lever with which to try and move the world, because indeed the debt ceiling always at the end gets raised.

What interested me about what he said was, he's looking back and saying the reason the recovery is as bad as it is, and it is bad, is what happened in the summer of 2011 over the debt ceiling.

That is a pretty--

STEPHANOPOULOS: That did hurt confidence, though, didn't it?

WILL: Let's look at the recovery, George. We are now in the fifth year of a recovery. There are 2.2 million fewer jobs than there were in the pre-recession peak. That's five years, four and a half years in now, and after the recession of -- of 1981, '82, we were back at the pre-recession peak in 12 months. 31 percent of Americans 18 to 35 are living with their parents. That ought to scare parents.

STEPHANOPOULOS: And Katrina, that's one of the reasons that the president gave the speech this week. He says he wants to break this what he's called the destructive, damaging framework, focused on deficits in Washington. He wants to get back to investments that he believes will create jobs.

KATRINA VANDEN HEUVEL, THE NATION: And this is where I wish he had been for a while. It's important he's gone out to the American people, exposed the Republican Party for the wrecking crew it is. If it hadn't had sabotage as its only economic plan in these last few years, we would have seen the common sense policies the president is now advocating for -- investment in infrastructure, in health care, in education. This is what we need to break the terrible inequality that's not simply a moral problem, but a bad economic, political problem.

So I think we're on a better course, but it is going to require the support of people outside. And I think you see in the Democratic Party, a new level of commitment as social issues unify them, but Elizabeth Warren, Sherrod Brown, others have a broader, more populist voices in this conversation.

STEPHANOPOULOS: You are seeing (ph) more populist Democrats, I agree with that, but Peggy Noonan, you know, the president going back to the country one more time, it's unclear that these speeches are doing much to move public opinion, much less Washington.

PEGGY NOONAN, WALL STREET JOURNAL: Yes, I think that's true. But when the White House calls it a pivot, somebody counted it up and said it's probably the tenth pivot to the economy the president has done since he came in.

I noticed that in one of the speeches, it went over an hour. There was a heck of a lot jammed in. That tells me something. It said we're not sure exactly what to say, so we're going to say everything, but a speech about everything is a speech about nothing. Beyond that, I think every president in the intense media environment we have now, certainly every two-term president, gets to a point where the American people stop listening, stop leaning forward hungrily for information. I think this president got there earlier than most presidents. And I think he's in that time now.

STEPHANOPOULOS: In a more fractured media environment as well. Steven Rattner, the question is, if speeches aren't going to do the job, and Congress seems to be immovable, is there anything the president can do on his own?

STEVE RATTNER, FORMER COUNSELOR TO THE TREASURY DEPARTMENT: Well, he said he would use whatever executive authority he can muster, and there are various levers and programs. You heard Jack Lew mention that in the context of Detroit. There are little bits and pieces that they can do.

(CROSSTALK)

STEPHANOPOULOS: I heard him say on Detroit that he's not going to follow your advice that you wrote in the "New York Times," to provide some federal assistance.

RATTNER: We'll get to that, I hope, because I have a different view on some of that, anyway. But the point is, we have a system of government that requires consent from the congressional branch as well as from the executive branch, and there's a limit on what he can do.

I think he's doing the right thing to go out and call out this need to do something on the economy. I find it extraordinary that we're living in a world of 7.6 percent unemployment. I'll agree with George that the recovery is certainly slower than anybody would want. And yet Congress is doing nothing. The last Congress passed 30 percent fewer bills than any other Congress in modern history. This Congress has passed fewer still. You may say it's great, let them pass even fewer laws. But I think some of us think there's -- work could be done out there, and Congress ought to be doing it.

WILL: Passing fewer laws, but comparable to previous Congresses in legislative pages, they just jump them all into comprehensive legislations.

As far as you can tell, your argument is, Katrina, Republicans are at fault because of the 753,000 jobs created this year, 557,000 have been part-time. But it's not the Republicans' fault, surely, that workforce participation has declined during this recovery?

VANDEN HEUVEL: First of all, we have accepted in this country a level of joblessness that should not be the new normal.

But if you had had a Republican Party that was willing to do common sense things that Republican parties of previous years, I think of Eisenhower, had done in investing in infrastructure, for example, you would have seen the ability to see growth. And that has not happened.

And you had a speaker, John Boehner who said last week that his job is to repeal, not to pass legislation. That is not a constructive congress at a time when I would agree with you, this recovery is fragile. And I don't -- I think that is the function of a country and a party, both parties, which have said that austerity -- deficit reduction is more important than addressing joblessness. That has been the problem in these last few years. That is the real crisis.

STEPHANOPOULOS: One of the question is going to be, Peggy, though, whether the pressure created by the sequester, which has been real cuts in several programs, causes at least some Republicans to join Democrats to try to undo it.

NOONAN: Maybe that will happen. I haven't heard about any negotiations or talks or serious signaling that is going on, which is something that always confuses me a little bit about this administration.

Katrina, I think part of the problem here is that the president at some point decided these Republicans can't be dealt with, their recalcitrant, it just can't work. And my feeling has always been no president can ever say that. You've to try to make it work.

Excuse me, Tip O'Neill disliked the president he worked with. They made it work.

It always seems to me there's a lack of sway in this White House.

RATTNER: The president's going up to The Hill this week to meet with congressional leaders. You can say what you want about that. But here's the point, what the House Republicans want is not just sequester, the appropriations bills they are passing are far deeper cuts than sequester. They are massive cuts. You look at the transportation bill. They want to cut $5 billion out of it. The Senate wants to add $5 billion.

So the point is the House is not just saying sequester. Sequester itself is a terrible thing, of course, because we're cutting all the wrong things. We're cutting infrastructure, we're cutting R&D. We're cutting exactly the stuff we should be investing in.

But I think the president has gone to The Hill. I think he's had them to the White House. He's now out in the field and he's trying to make his case.

VANDEN HEUVEL: You're looking at a Republican Party that may well now cripple the credit markets and shut down government in order to ensure that 30 million Americans do not have health care. I mean, this is -- the president and I speak from the progressive, independent Democratic side of the aisle. People have been frustrated that until now the president has been unwilling to call out the Republicans. There was a lot of playing footsie in 2011. Where did that get him?

I don't know where it heads, because this Republican Party is not interested in legitimate, fair, common sense compromise.

WILL: Toward the end of the Knox College speech that threatened never to end, the president gave us an idea of his idea of reaching out to Republicans. He said you know, there are a lot of Republicans that agree with me, they tell me so in private, trust me. But he said they're afraid of their constituents so they won't do this. In other words, there are a few intelligent Republicans who recognize the brilliance of my policies, but they're moral cowards.

Now that's his approach to the Republicans?

VANDEN HEUVEL: I love cross-partisan alliances, George. We have agreed on various things over time. I think the most exciting thing in congress last week was Justin Amash and John Conyers coming together to say enough to NSA surveillance without accountability.

STEPHANOPOULOS: Got close, but did not pass, however.

We have to take a break. I want to go quickly back to you, Steve, on this question of the Detroit bailout. You, of course, you managed the auto bailout for President Obama. Wrote a piece in the New York Times last week saying he should consider federal assistance.

Jack Lew seemed pretty definitive right there it's not coming.

RATTNER: First of all, there's is a difference between a bailout and somehow rescuing the creditors -- avoiding the whole bankruptcy process and some kind of help. And what I'm thinking about is in the second category.

I recognize Washington is not going to come in and undo this default and pay off the bondholders. But you have got a situation where 80 percent of the pain from this restructuring is being borne by the workers and the retirees if this plan goes through. You have a situation -- where I have read that whole plan, and I don't believe it can solve Detroit's problems. Detroit needs investment, and that's where the federal government and the state, particularly, can and should help.

WILL: Can't solve the problems, because their problems are cultural. You have a city, 139 square miles, you can graze cattle in vast portions of it, dangerous herds of feral dogs roam in there. 3 percent of fourth graders reading at the national math standards, 47 percent of Detroit residents are functionally illiterate, 79 percent of Detroit children are born to unmarried mothers. They don't have a fiscal problem, Steve, they have a cultural collapse.

VANDEN HEUVEL: I find that really insulting to the people of Detroit. I think there is a serious discussion about the future of cities in a time of deindustrialization. But in many ways, Detroit has been a victim of market forces, and I think that what Steve said is so critical, that retirees and workers should not bear this. And this story should not be hijacked as one of about greedy, fiscal, public unions.

WILL: But Steve said he...

VANDEN HEUVEL: And fiscally responsibility.

WILL: But Steve said in his op-ed was the people of Detroit are no more to blame than the victims of Hurricane Sandy, because apart from voting, he said. Well, what did they vote for, for 60 years of incompetence, malcontents, and in some cases criminals.

STEPHANOPOULOS: OK, let's (inaudible) get the last word.

RATTNER: So that's fine. And so what do you want to do, do you want to leave them sitting in exactly the situation you just described, or in the spirit of America trying to help people who are less fortunate, whether their victims of natural disasters or their own ignorance or whatever, do you want to reach out and try to help them and try to reinvent Detroit for not a lot of money. We're talking about a couple billion dollars here, this is small potatoes in the great scheme of life, or else you have your scenario, just leave them all sit with feral dogs for the rest of their lives.

VANDEN HEUVEL: Hobbsian anarchy.

STEPHANOPOULOS: We do have to take a break. And coming up, we're going to looking at summer of scandal, Anthony Weiner to Ryan Braun. Judy Smith is going to join the roundtable and George Will weighs in on steroids in baseball.

(BEGIN VIDEO CLIP)

JAY LENO, TONIGHT SHOW HOST: He was sexting women under the name Carlos Danger. This is Weiner's way of getting more Latino support, I'll use -- I'll be Carlos Danger.

CONAN O'BRIEN, HOST, CONAN: In the press conference, Weiner apologized. He said this will never happen, or my name isn't Carlos Danger.

STEPHEN COLBERT, COLBERT REPORT HOST: Yes, even after the sexting scandal that ended his congressional career, it turns out he learned nothing. Has this man never heard of Snapchat?

(END VIDEO CLIP)

STEPHANOPOULOS: No summer slump for the late night comics, thanks to Anthony. Let's get to that with our roundtable. Joined by Judy Smith, crisis management pro who helped create the hit show Scandal.

And Judy, you've had no shortage of high profile clients in tough spots -- Monica Lewinsky, Michael Vick, Paula Deen. You know, I was surprised to hear you say this morning that you wouldn't even take Anthony Weiner as a client.

JUDY SMITH, CRISIS MANAGEMENT: Well, no. I mean, look, first of all it's apparent that he's not listening to anyone, because his campaign manager just quit.

I think he has so many problems. But I think the main issue is that he comes out, he says please forgive me to the American public, and then we're all shocked to find out that this has continued. And not like sort of the usual politician having an affair, there's an element of creepiness to this. And I think that the American people feel that. And I think people are saying, look, step down. It's not about you, it's about the people that you say that you want to represent.

I mean, look he's trying so hard to put the genie back in the bottle, it's not going to happen for him. He can't do it.

STEPHANOPOULOS: It's not going to happen, but, Peggy, it sure seems like he's not going to quit even though his poll numbers are plummeting in New York.

NOONAN: Yes, what's mysterious to me is not will he get out, it's why did he get in? He knew what the history was; he knew what he would be visiting on New York. It all seems to me quite mad.

And I think -- I mean, I think his behavior has been quite clinically sick. And I think we will now find out in the Democratic primary if indeed the voters are sick.

(CROSSTALK)

RATTNER: I don't think we're going to get to that point.

STEPHANOPOULOS: You think he's going to get out?

RATTNER: I think he has to. I just think -- I think the consequences, I think maybe you were about to say -- the consequences of him, for whatever future he has, whether it's in the private sector, whatever, of getting 5 percent or 10 percent, or some very small number in this primary, I just think, are overwhelming.

VANDEN HEUVEL: But, you know, I think that New Yorkers -- leave it to New Yorkers. You see the polls imploding already. But I have to say, as a life-long New Yorker, I find this such a turnoff, such a distraction from the real scandals of the city.

And to get serious for a moment, the metastasizing inequality in the city is a real scandal. When was the last time you really fixed on that? There is one candidate in this race, Bill de Blasio, who is speaking to that in a coherent way. But otherwise, until Anthony Weiner's sexting and all of that leave the race, the oxygen's sucked out.

STEPHANOPOULOS: He seems to be talking about that as well, George, and maybe making opposite calculation from what Steve says, that if he stays in the race, even if he doesn't do all that well, it's sort of flushed through the system.

WILL: I will not dwell on the fact, although it is a fact, that if these two people, Filner in San Diego and Weiner here were Republicans --

(CROSSTALK)

STEPHANOPOULOS: -- facing charges of sexual harassment.

WILL: -- this would be a part of a lot of somber sociology in the media about the Republican war on women. I will skip that. I will go instead to the fact, what explains this man, Peggy, is that animal neediness for public gratification. There are people like this. He got out of college, went to work on the congressional staff, became the youngest member ever of the New York city council, ran for the House. He can't live without this.

And what strikes me is, you talk as a New Yorker, New York City was the incubator of the heroic period of American liberalism, Franklin Roosevelt, Frances Perkins, his great secretary of the Labor, first female member of the Congress, Fiorello LaGuardia, Republican. And this is what New York liberalism now coughs up?

STEPHANOPOULOS: Judy, one of the things that surprised a lot of people, though maybe it's not surprising that Anthony Weiner wants to stay in, but his wife, Huma Abedin, close aide to Hillary Clinton, gives her first press conference on Tuesday after the new revelations. You know, in the past with other candidates, when the wife stands by them, it seems to make a difference with the voters; seems less likely this time.

SMITH: Well, absolutely. First of all, what they say that I think it's really a personal choice for -- to decide that.

But it made no difference whatsoever, because his behavior is just reprehensible. Clearly, he has sort of an interest in keeping the late night talk show host folks going with it, but, yes, he needs to step down. He's sort of engaging in the same behavior as the -- as the mayor, which is that --

STEPHANOPOULOS: The mayor?

SMITH: As -- I'm sorry.

(CROSSTALK)

STEPHANOPOULOS: (Inaudible) charged with sexual harassment, seven women have come forward. He's going to not resign, take two weeks off to get treatment.

SMITH: Two weeks to -- all right -- to fix the problem.

VANDEN HEUVEL: I'm going to pick up on what George said about the war on women.

First of all, many Democratic women have come forward to say this is reprehensible. This is odious, what we're seeing in San Diego with the mayor, with Anthony Weiner, but I think it's very simplistic to draw on the misdeeds of a few -- and let's not forget sexual harassment is not confined to one party -- Vitter, Sanford, Gingrich -- it's about the systemic policy that affect all women, and discrimination and harassment and how you protect women from that as well as giving them public policy tools to live their lives in full. And I think across the board, the Republican Party has vitiated, has gutted the rights on reproductive rights, protection from sexual harassment and discrimination, protection from domestic abuse, pay -- equal pay. These are issues that affect all women.

WILL: Now that's what I call a pivot.

(LAUGHTER)

UNIDENTIFIED FEMALE: Done well, done well.

STEPHANOPOULOS: Yes.

Just one more pivot as well, just to pick up on that point, though, does this blow back on Democrats with having both Filner; you've got Eliot Spitzer in the race for comptroller here, Weiner all at the same time?

RATTNER: No, I don't think so, because I think it is something that affects both parties, whether it's Mark Sanford or David Vitter or whomever. I think it's confined to some individuals who clearly have issues. I don't think it is a broader point about politics or about anything. I think it's a bunch of people who are narcissistic, self-indulgent, sick; whatever Judy would classify them as.

SMITH: All of the above. And, look, I think Spitzer's done a good job in addressing the elephant in a room in particular in his ads and saying, yes, I've made a mistake, but I'm here to serve. He's also, I think, really taking a lower position, comptroller, trying to get that.

By saying let me reengage you and build back up the trust from the public, and that's important instead of Weiner sort of jumping in, you know, one of the most highest --

STEPHANOPOULOS: Crisis management lesson number one, you can't lie in your apology.

UNIDENTIFIED FEMALE: No. Hey, poor form.

(LAUGHTER)

UNIDENTIFIED FEMALE: Very poor form.

UNIDENTIFIED FEMALE: Absolutely.

STEPHANOPOULOS: Well, we'll be watching to see if Steve is right and see if he does get out of the race. Thank you.

I got to take a quick break. Thanks to our roundtable, George Will is sticking around to talk about the big news ready to drop on Major League Baseball. He'll be joined by ESPN's Jeremy Schaap to give us the latest on the steroid scandal.

(COMMERCIAL BREAK)

And still ahead, Jeremy Schaap and George Will on the cloud over baseball.

Plus we remember a trail blazer with a very special connection to our THIS WEEK family.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RYAN BRAUN, MILWAUKEE BREWERS: If I had done this intentionally or unintentionally, I would be the first one to step up and say I did it. I truly believe in my heart and I would bet my life that this substance never entered my body at any point.

CURT SCHILLING, PITCHER: The more you think about it, the more disappointing -- I think disappointing is a great word, for the game. And for all the things that are around this, and as one of the guys who defended Ryan Braun after the things (ph), it's unbelievably disappointing.

(END VIDEO CLIP)

STEPHANOPOULOS: Well, Ryan Braun did come clean this week. He is out for the rest of the season. Suspended. Another black eye for baseball.

There is more to come. We want to get the latest now from George Will, Jeremy Schaap of ESPN.

And Jeremy, a lot of rumors swirling around Alex Rodriguez as well as many others. What's your best reporting on how far this is going to reach and when it's all going to break?

JEREMY SCHAAP, ESPN: Well, we all think some time in a couple weeks, maybe a little bit longer, Alex Rodriguez and up to about 20 other players in the majors and the minors, will be suspended.

Rodriguez is a special case because...

STEPHANOPOULOS: He's fighting it, right?

SCHAAP: He's fighting it in the media right now in New York. But it's presumed that he's also fighting it with Major League Baseball. There's the possibility of a lifetime ban, because not only does baseball believe that he was cheating, not only does it believe that he lied them about it, but it also believes that he tried to undermine its investigation. So he's a special case.

STEPHANOPOULOS: Lifetime ban, George, that would certainly signify baseball's seriousness about cleaning this up.

WILL: The sea change here, the real seriousness now on the part of the players themselves. George, in 2011 the Brewers played the Diamondbacks in a five-game playoff. They beat the Diamondbacks 3 games to 2. In that series, Ryan Braun was 9 for 18, batted .500, four doubles and four RBIs. He was sensational, and he almost certainly was cheating.

Now, the players on the Diamondbacks know he took money out of their pocketbooks. And the Player's Association has changed in response to their constituency, the players themselves, which -- for years, the Player's Association treated this as a privacy issue, a civil rights issue, this resistance to testing.

One of the leaders of the player's union said it's like smoking cigarettes, it's a bad habit, but of no concern to anyone else.

The players have changed their minds.

STEPHANOPOULOS: Agree with that?

SCHAAP: It's totally changed. The leadership has changed, the player's union, the rank and file thinking about this has changed entirely. And that is an essential element here.

But it's still worrisome that there's no real deterrent, the way there is in other sports like track and field and cycling. It was Pete Rose who knows something about crime and punishment who said the other day up in Cooperstown there aren't too many people who wouldn't take the deal that Ryan Braun seems to have made, which is you get $120 million, and give back $3 million.

So until baseball approaches this with even greater punishment, and it's doing a better job than the other pro leagues, we're still going to have this problem.

STEPHANOPOULOS: George, it does suggest that someone is going to have to get a real permanent ban, because as Jeremy points out, Ryan Braun could be back next year making a whole lot of money.

WILL: Well, in a subsequent collective bargaining agreement with the players, you may find that there will be a mechanism for voiding contracts, voiding the, I don't know how many scores of millions of dollars Braun still has coming.

SCHAAP: About $120 million.

WILL: $88 million for Alex Rodriguez. If you can void contracts, that's the hammer.

STEPHANOPOULOS: We only have about a minute left. George, we've got to get you on a big change for your baseball team, the Chicago Cubs, Wrigley Field now going to have a jumbotron.

WILL: Jumbotron and some advertising. The problem is, Wrigley Field has been a little baseball Williamsburg. A quaint little artifact, but not serious. And the Cubs find that unless they can generate more revenue, they can't compete with the more modern venues to put a better team on the field.

STEPHANOPOULOS: They really had no choice, did they, Jeremy?

SCHAAP: Well, they had no choice, but some of the people who have the rooftop exposure into Wrigley Field are a little bit upset about his. You know, how many signs they put up, how many scoreboards they put up is of less consequence, obviously, than the lack of pennants they have put up.

STEPHANOPOULOS: George Will, Jeremy Schaap, thanks you very much for your insight this morning.

And in the Sunday spotlight today, we remember an American treasure with a special connection to This Week, Lindy Boggs, congresswoman, ambassador and mother of our own Cokie Roberts, passed yesterday at the age of 97.

(BEGIN VIDEOTAPE)

STEPHANOPOULOS: Heartbreaking tragedy forced the spotlight on Lindy Boggs.

UNIDENTIFIED MALE: She worked harder on this campaign than anybody else, and Lindy, this is for you from me.

STEPHANOPOULOS: When the plane carrying her husband, House leader Hale Boggs, disappeared in Alaska.

UNIDENTIFIED MALE: 70 planes up over southern Alaska searching for the twin engine Cessna.

LINDY BOGGS: I hope I'll be half as good a congresswoman as you expect me to be. Thank you.

STEPHANOPOULOS: Boggs, who had run her husband's campaigns, said she was just carrying on his work.

But it didn't take her long to make a personal mark.

UNIDENTIFIED FEMALE: Lindy Boggs from the great state of Louisiana.

STEPHANOPOULOS: A Louisiana native who grew up on a plantation, she became a champion for civil rights and equal rights for women.

UNIDENTIFIED MALE: The chair now recognizes Ms. Lindy Boggs.

BOGGS: Thank you, Mr. Chairman.

STEPHANOPOULOS: Using her seat on the banking committee to get women credit cards without their husband's permission. As she told Cokie, her role model was another trailblazer.

COKIE ROBERTS, ABC NEWS CORRESPONDENT: You got to Washington, Eleanor Roosevelt was first lady.

BOGGS: She, of course, was my inspiration.

STEPHANOPOULOS: Boggs served 17 years in Congress. The first woman to chair a political convention, then ambassador to the Vatican.

What is it about John Paul that you think makes him so accessible and inspiring to this younger generation?

BOGGS: I think his total rapport with them. He believes in them.

STEPHANOPOULOS: Boggs retired in 1990. A Washington fixture famous for her southern charm, she never forgot lessons learned in the Louisiana she loved.

BOGGS: I suppose all women, but mostly southern women do what they do when they have to do it. And you just don't think about whether you should be doing it or not if you're called upon to do something, you do it.

(END VIDEOTAPE)

STEPHANOPOULOS: What a lovely presence she was. Our thoughts are with Cokie and her family this morning.

And now we honor our fellow Americans who serve and sacrifice.

This week, the Pentagon released the name of four soldiers killed in Afghanistan.

And that is all for us today. Thanks for sharing part of your Sunday with us. Check out "World News" with David Muir tonight. I'll see you tomorrow on GMA.

END