'This Week' Transcript: Treasury Secretary Timothy Geithner

Transcript: "This Week" with Treasury Secretary Timothy Geithner and George Will, Al Hunt, Peggy Noonan, Ruth Marcus and John Podesta

Feb. 7, 2010 —

ABC News: This Week

Jake Tapper Interview with Treasury Secretary Tim Geithner

TAPPER: The latest jobs numbers are disappointing in a lot of ways. Larry Summers was on this broadcast in December and he said that the economy would be creating jobs by the spring. Do you still believe that to be true?

GEITHNER: Absolutely. But remember where we were a year ago. You know, you had an economy that was shrinking at an annual rate of 6 percent. Three-quarters of a million Americans were losing their jobs every month. And the president acted with enormous force and care to get this economy growing again.

And the economy is now growing again. So we're seeing some encouraging signs of healing. This is going to take a while, and it's going to be uneven. But there's encouraging signs in this report. The unemployment came down modestly and created jobs back in November.

And our job, our responsibility is to make sure we're working very hard to reinforce this recovery. And we're seeing this growth that has just been established translate into more jobs.

TAPPER: How possible is it that we're going to have a double dip recession?

GEITHNER: I think we -- we have much, much lower risk of that today than at any time over the last 12 months or so. Again just think of where we are. We are in an economy that was growing at the rate of almost 6 percent of GDP in the fourth quarter of last year. The most rapid rate in six years. So we are beginning the process of healing.

And we have the capacity as a government to try to make sure we are reinforcing that process. And we help guide this economy back to the point where we're not just growing again, but we've seen growth translate into jobs. And that we're reaching the lives of all Americans.

TAPPER: I think a lot of Americans wonder if you're doing enough. There was a more than $800 billion stimulus package. They're talking now on the Hill about a more than $100 billion jobs package. But still, if you look at the budget that you guys introduced, you're still projecting 10 percent unemployment this year, more than 9 percent next year, more than 8 percent next year.

I realize that's going in the right direction, but it's still a staggeringly high number of unemployed. Are you doing enough?

GEITHNER: We need to -- we have more work to do, absolutely we have more work to do. And you heard the president at the State of the Union say, we want to work with the Congress now to try to make sure we are creating incentives to create more jobs, we're encouraging business investment, we're putting resources into infrastructure, we're giving help to state and local governments.

And it is very important people understand that we have more work to do and we can afford that, it's important to it, our basic priority still is to make sure that this growth we're seeing now, which is very encouraging, translates into more jobs more quickly.

TAPPER: The new senator from Massachusetts, Scott Brown, one of the first things he said after being sworn in was that the stimulus package has not created one job.

BROWN:"The last stimulus bill didn't create one new job. And in some states, the money that was actually released hasn't even been used yet."

GEITHNER: Oh, I don't think there's any basis for that judgment. I mean, again, just think where we were. January of 2009, three-quarters of a million Americans losing their jobs. We have an economy now that's growing again. With growth you're going to see jobs created.

Again, we already saw some job -- a month where we had positive job growth. But, you know, it's going to take a while. It took a long time for these problems to develop. They're going to take some time to heal. But we're in a much stronger position today.

But our priority has to be, and I think you see broad recognition of this now, is to make sure we're working very hard to make sure that we're seeing this growth translate into more jobs to reach more Americans.

TAPPER: Some critics wonder how hard you're working when they look at, for instance, last March. You and the president introduced a program to shore up $15 billion in loans for small businesses. And according to the special inspector general for TARP, Neil Barofsky, no details for that plan have come out, none of that money has been disbursed, that's last March, it's the 7A program.

Have there been programs that you've introduced that just have not worked?

GEITHNER: Look, the programs that the president supported in the Recovery Act were very, very effective. You saw small -- lending by the Small Business Administration increase by more than 70 percent -- 75 percent from the lows. And we have been very effective at trying to make sure we're opening up the broader credit markets to companies around the world.

Again, remember where we were in January of last year. You know, if you were a company, large or small, if you were a family trying to borrow to buy a house or borrow to buy a car or put your kids in college, or you were a municipal government, you did not know whether you were going to be able to get a loan.

So it is tougher out -- it is tough out there still, but we have made dramatic progress in trying to make sure we bring stability to this financial system at much, much lower cost than anybody anticipated.

You know, again, last February, people thought it was going to cost maybe half a trillion dollars to put out this financial fire, and by getting private capital to come in and replace our investments, by allowing to bring those investments back out of the banking system, we've saved the taxpayer lots of money, and we have resources now we can use to try to make sure we're working very hard to meet our -- you know the many other challenges we face as a country.

TAPPER: Isn't the problem though not so much that the credit is not available, but that the businesses are not taking out the loans because nobody is buying anything?

GEITHNER: Well, again, you know, we had a huge shock to the American economy. And you're still living with the aftermath -- the aftershocks of that basic trauma. So businesses were very, very cautious. But if you look at what's happening today across the country, you're seeing again the first signs now of businesses starting to take some risk again, starting to invest again, and starting to add jobs back again.

But, you know, our job is to make sure we're working to reinforce that process.

TAPPER: The Congress just voted to raise the debt ceiling to more than $14 trillion dollars. Moody's, the bond rater, just said, quote, "unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture for the next decade will at some point put pressure on the triple-A government bond rating.

Is the United States going to lose its triple-A government bond rating? And what happens when the credit markets are no longer willing to buy U.S. debt?

GEITHNER: Absolutely not. And that will never happen to this country. And again, if you step back and look at what has happened throughout this crisis, when people were most worried about the stability of the world, they still found safety in Treasuries and the dollar. You're still seeing that every time. People are reminded again about the many challenges you see around the world.

That is a very, very important sign of basic confidence in our capacity as a country to work together to fix these problems. We've done it in the past. We -- this is within our capacity to do. And the best way to get there is going to make sure that this economy is growing again. That translates into more jobs that reach more Americans.

That's the only path to try to make sure that we're able to turn to -- fix our long-term fiscal problems.

TAPPER: Do you think the budget that the administration just introduced takes enough serious measures to reduce the debt? I see that there is some tinkering here with spending freeze, some tax increases, letting the Bush tax cuts expire for the wealthiest Americans. But do you think it's a serious attempt?

GEITHNER: Absolutely. Again, look what the president proposed. The president proposed to cap non-security discretionary spending.

TAPPER: That's only one-eighth of the budget.

GEITHNER: No, but that's a very important thing to do. And that requires -- you know, we have some very tough choices to make, and we outline in that budget some things that are going to be very unpopular and hard for people to make people understand or recognize we have some tough choices to make.

We work with Congress and the House passed yesterday the restoration of basic disciplines in budgeting that all Americans live with so that...

TAPPER: Pay-go...


GEITHNER: ... we have to make sure we pay for new programs. You're seeing, again, across the political spectrum now a basic recognition that deficits matter. Very good for people to understand, again, that deficits matter. That tax cuts aren't free. Got to pay for our programs. And we've proposed in the budget some important steps to restore some basic fairness to our tax code and begin the process of bringing down those deficits.

And again, the president's budget proposes to bring the deficit down from its current levels very, very sharply to below 4 percent of GDP over the next four years or so. And we want to work with Congress to set up a bipartisan commission to try to make sure that we're going beyond that to address our long-term problems.

TAPPER: Do you think the fact that you guys are pushing the bipartisan commission is indicative of the fact that our political system is not capable of taking on the serious challenges our nation faces?

You and I know that the money, as Willie Sutton says, said, that -- why do you rob banks? Because that's where the money is. The money is in entitlement programs: Medicare, Medicaid, Social Security, things that you do not touch in this budget.

The fact that you need a bipartisan commission to recommend cuts or tax increases, doesn't that indicate that our political system is incapable of making these tough decisions?

GEITHNER: Jake, I am very confident in our ability as a country to bring people together and make sure we are solving these challenges and these problems. We've done it in the past, it is completely within our capacity to do as a country.

But of course, it requires you bringing people together across the aisle to step back from politics, to try to bring practical solutions to things that are very important to our future as a country. And the president is committed to do that.

We're going to give the Republican Party the chance to share in the responsibility and the burden and the privilege of trying to fix the things that were broken in this country.

TAPPER: Republicans are afraid this is just a back door for tax increases. Are you willing to say that tax increases are off the table for this commission? Let's sit down and talk about the long-term structural problems with entitlement spending?

GEITHNER: The president's view, and this is a view shared by many Republicans, and it builds on what we've seen with effective commissions in the past, like the Greenspan commission that President Reagan established to help restore the financial footing of Social Security, is that for this to work, you've got to bring people together to step back from politics, day-to-day politics, and to bring fresh ideas to solve these kind of problems.

That's the only way to do it, we think. And we're committed to doing that. We've got to do it on a bipartisan basis, and we're deeply serious about doing this.

TAPPER: The president, during his State of the Union address, also talked about a deficit of trust, the fact that Americans don't trust government.

OBAMA:"We have to recognize that we face more than a deficit of dollars right now; we face a deficit of trust. Deep and corrosive doubts about how Washington works."

TAPPER: Whether it's at your -- your time as head of the New York Fed, your time dealing with AIG, or your time as Treasury Secretary, do you think that you bear any responsibility for that deficit of trust?

GEITHNER: Oh, I -- let me just say that I feel very proud for the actions we took to help to stem the damage caused by this crisis. And I feel it's a great privilege to have been able to work with this president to move so quickly and effectively to again -- to bring an economy that was in free fall -- a financial system at the edge of collapse, and to begin the process of healing.

But we all recognize, and I deeply recognize that we have a lot more work to do. And we are working very hard to make sure that the American people understand that we're going to make sure they don't bear a penny of loss for solving this financial crisis. Again we've brought back a huge amount of the money that the government was forced to put in the financial system.

And we are working very hard right now to try to make sure we put in place strong reforms that provide basic protections to Americans from ever again facing this kind of crisis again.

TAPPER: A year ago when you and the president introduced the mortgage modification program…

OBAMA: "Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure."

TAPPER: If a year ago I had told you that today I'd be sitting here, and only 66,000 Americans had permanent mortgage modifications, would you have said at the time that that was a success?

GEITHNER: Oh, Jake, I think it's very important to recognize this program is providing very, very substantial cash flow relief right now to more than three quarters of a million Americans. And we -- we believe we're still on a path to be able to reach many, many more American households. And of course we're going to make sure that those temporary modifications translate into permanent modifications. But again...


TAPPER: But a lot of those temporary modifications were done verbally though. They weren't done with the paperwork that a lot of...


GEITHNER: No. We're -- we're absolutely committed to make sure that translates into what we said it would, which is for eligible Americans -- they're getting permanent modifications that substantially lower their monthly payment. Now, Jake, remember like, you know, again for the average household that translates into hundreds and hundreds of dollars every month for them.

That is real benefits -- great -- has greater income for them to meet their basic needs. But again step back for a sec. In February and March of last year house prices were falling off the cliff. People thought house prices might fall another 20 -- 30 percent. And we've had six months now of early signs of stability in house prices. So what that means is millions and millions of Americans -- middle class families across the country are now seeing more stability, and what is a basic source of financial security for all Americans.

Those programs were enormously effective in helping again pull a housing market that was in near collapse back to the point now where you're seeing the signs of stability.

TAPPER: Recently the president introduced a way of attacking the issue of banks that are too big to fail. He called it the so-called, "Volcker rule." Some sources close to you said that you had some concerns about that rule. What were those concerns?

GEITHNER: Oh, I am committed, and the president is committed to make sure that the reform package Congress moves forward -- puts in place tough, conservative, effective constraints in risk taking on the largest institutions in the country. And I am very confident we're going to be able to do that. This is an important part of that.

And I'm very supportive again of this basic principle. You want to make sure that institutions that have the privilege of access to the safety net the government provides aren't allowed to use that to subsidize the kind of risky activity that could bring the financial institutions to the edge of collapse.

TAPPER: And you are also concerned that you want -- you didn't want these American firms to be unable to compete with the...


GEITHNER: Oh, of course. Of course. But I'm very confident we can make sure that we are working very closely to raise global standards around the world so we have a level playing field.

And you know we are -- we have -- we are going to have a much stronger financial system ahead than we had going into this crisis. Because we are going to make sure that again we're putting in place stronger protections against risk taking. And we're going to make sure that we work with countries around the world so that we're raising standards globally -- not just raising the United States.

TAPPER: Lastly when you came in, and you met with President Obama, you told them about five bombs that needed to be diffused. Fannie, Freddie -- some others. And you recently said -- you compared your experience to the movie, "The Hurt Locker."

GEITHNER: Oh, no. I wasn't comparing my experience. There's nothing like what we faced to what American soldiers face every day.


TAPPER: Still diffusing these bombs, even if they were theoretical economic bombs, was -- must have been very nerve racking.

GEITHNER: This was like nothing anybody in public office today, or in the last few decades have ever faced. It was the gravest most dangerous moment since the great depression of the United States. Again remember we had a -- we were in a situation where people were no longer sure they could safely keep their money in the strongest American banks.

It was catastrophic, and it translated directly into factories closing. Millions of people losing their jobs, and their homes. Economic -- it could be around the world came to a sudden stop. It was the gravest moment we've ever seen. And we were very, very effective, because of the leadership of the president, moving very quickly with enormous care and force to bring stability.

And those policies have got this economy growing again. And as I said we've been able to put out this financial fire at much, much lower cost than anybody anticipated. And what that means is we have much more resources now available to meet our long-term challenges.

TAPPER: I guess was, all I mean was,-- personally, even though I know you don't like talking about your personal life all that much, or your emotions all that...



TAPPER: ... much publicly -- personally it must have been nerve racking.

GEITHNER: Oh, it was -- it was hard. But, you know, we were all very focused on what we could do. And you know, this -- this job -- these jobs are a little bit like the fireman. They're a little bit like the doctor. And they're a little bit like the people that go and try to diffuse bombs. It's a mix of those things. And I'm very proud of what we've been able to do. But of course I understand -- I -- ever minute with a recognition that we have a lot more work ahead of us.

TAPPER: Secretary Geithner, thanks so much for joining us. Really appreciate it.

GEITHNER: Nice to see you.

TAPPER: And we're joined now by our roundtable to talk about that interview and all the day's news. We're joined by George Will, Peggy Noonan of the Wall Street Journal, Al Hunt of Bloomberg News, John Podesta of the Center for American Progress, and Ruth Marcus of the Washington Post.

Thanks so much for joining us.

George, Tim Geithner said that businesses are now starting to borrow because they are now starting to take on risk because we're emerging from this economic crisis. Is the economic crisis the only reason why businesses are hesitating?

WILL: No, I think there are a number of things. It's what they don't know and what they do know. What they don't know is what energy is going to cost. The president says he's going to push on with cap and trade, which would raise the cost of everything. They don't know what the cost of health care will be. The president says he's going to push on with health care reform.

Furthermore, they do know that their taxes are going to go up. The expiration of the Bush tax cuts on the rich are actually tax cuts largely on small business. Since the 1980s, the net -- almost all net new job creation has been in small start-up companies five years old or younger.

Furthermore, they know that interest rates eventually are going to go up. They can't go down. They're zero now. So any increase in interest rates is going to be adverse.

To add that to the fact that 42 cents of every dollar Washington spends this year is borrowed, and you add that to the fact that in 2009, every penny of tax revenues was spent before an appropriations bill was passed. That is on entitlement programs or interest rates. That's why they're worried.

TAPPER: John, just -- I know you don't agree with everything George said...


... but...

PODESTA: I don't know what George is proposing. It seems to me that if -- the other thing we absolutely know is that if we return to the policies that got into this mess, it's going to produce the same result. So I think the president has to move forward with trying to reform the health care system, which is now eating up more than 17 percent of our gross domestic product...

TAPPER: How? What's the direction on that?

PODESTA: Well, I think that he's going to press ahead to try to get reform done either through some combination of passing the Senate- passed health care reform bill with some fixes or perhaps a substantial package that would reduce overall costs in the health care system and expand coverage, but somewhat scaled-back package, but I think he's going to try to do it this year, and I think he's going to try to get us off of our so-called addiction -- I remember that phrase from George W. Bush -- addiction to foreign oil and try to create an innovative energy economy.

So there's a lot of work to do, as Tim Geithner said. They've got to really thread the eye of a needle to create jobs in the short term, but to deal with the long-term deficit problems that the country faces.

MARCUS: I'm going to find one common area of agreement with George, which is that I agree that the businesses are loathe to start borrowing and to start creating jobs, but I disagree almost entirely with all the reasons that George said that that exists.

It's not because of fear of higher taxes. Most of it, it's -- a very, very small sliver of small businesses would be affected by higher taxes.

It's not because of not knowing about health care costs or energy costs. It's because of a fundamental concern -- which is completely justified -- about the future path of the economy short term.

In other words -- and you can see it in the reaction that the administration itself had to -- what seemed like good news on the economy with the jobless rate this month. It is going to be a long slog out of this, and it's not at all clear that it's going to be a steady uphill climb. It may be a steady trough that inches very slowly uphill. It may go down again before it goes up. And that's what's holding back business.

NOONAN: I think people who might otherwise be hiring or taking on new help or expanding are feeling nervous. I think they're feeling nervous in part because every time the administration speaks about economic issues, what they say doesn't sound true. It sounds like some kind of mix between "rah-rah" and gobbledygook.

So -- so another problem I think is that the administration did not depart from the Bush administration way of spending and spending, and people can see it. Bush kind of broke the bank, and now Obama is double-breaking the bank. And so people look at this and they think, "I don't feel secure to hire someone. I can sort of feel the pressure of bad stuff coming down the pike," so I think that's part of the problem. TAPPER: Al, you also have been critical of the economic message coming from the administration. When you heard Secretary Geithner in that interview and when you've listened to the president more recently, has that improved at all?

HUNT: Not much. They don't have anyone that really conveys a very coherent economic message. I don't think it is. I disagree with Peggy and George in the sense that I think it's the policies. I -- I do think there's a psychological problem that is huge.

A year-and-a-half ago, the global economy almost went off the cliff. Everyone knows that, whether you're a small-business person or you're Goldman Sachs. There is a sense that we have avoided the cataclysm, that we're on the way back, but there's nervousness about that.

And if we're -- if we are on the way back, we're not on the way back very -- very rapidly. If you look at that jobs report the other day, yeah, the headlines were pretty good. It went to single digits for the first time in a long time. But when you dig deep in there, there was a lot of very, very discouraging numbers there.

So I think -- I think the psychological problem is -- is -- is really very vivid.

TAPPER: OK. We're going to have to take a quick break. But after the break, the roundtable will be back with the politics of national security and Sarah Palin's Tea Party speech. And, of course, later, the Sunday funnies.


FALLON: Let's take a moment to remember the accomplishments of the Democrats' 60-seat supermajority.




PALIN: The administration says then there are no downsides or upsides to treating terrorists like civilian criminal defendants, but a lot of us would beg to differ. For example, there are questions we would have liked this foreign terrorist to answer before he lawyered up and invoked our U.S. constitutional right to remain silent.


Our U.S. constitutional rights.


TAPPER: That's former Alaska Governor Sarah Palin speaking in Nashville last night at the Tea Party convention, one of the many topics we'll talk about in the roundtable.

George, let me ask you a question. Does Governor Palin have a point there when she's talking about the failed Christmas Day bomber, Umar Farouk Abdulmutallab, being able to invoke our constitutional rights?

WILL: She has a point in that it seemed reflexive on the part of the government without much thought about this. Here was someone who came from Yemen, from Al Qaida in the Arabian Peninsula, who you would think would have interesting things to tell us, and they instantly Mirandized him, after, what, 50 minutes of conversation. I understand he's still being interrogated, but he still does have a lawyer.

The point of counterterrorism is not to prosecute successfully terrorists; it's to prevent terrorists from committing their acts in the first place. It is prevention, not prosecution. And this looked like just another way of saying, "We're not George Bush," which isn't the point.

MARCUS: Well, I mean, they -- it actually might have been a way of saying, "We are George Bush," since that's exactly what happened with the shoe bomber.

I think that it's fairly clear that that particular incident was not well-handled. I agree with George. It was -- there was not enough consideration given to differing routes of dealing with it. On the other hand, he was not instantly Mirandized. He did answer questions for 50 minutes. From my point of view, that was not long enough, and I think next time around there's going to be a lot more consideration given to various routes.

At the same time, I think it's been completely over-dramatized what rights he would have gotten in another setting. Whether or not he's instantly Mirandized and whether or not he's interrogated is one thing. Whether he's tried in a criminal court or in a military commission, he's still going to be invested with all sorts of rights that apparently Sarah Palin's not comfortable with.

HUNT: Well, but I think the problem here was that the administration itself six months earlier set up something, the high- value intelligence group, that was precisely for areas like this.

And the premise, which I think is anti-Bush, is that a skilled interrogator is far more important in getting information from a terrorist than all the waterboarding and Cheney-esque tortures in the world. I think they're right on that, and they -- they bypassed it. They didn't use it this time.


TAPPER: Well, it wasn't operative until a couple weeks ago.

HUNT: Well, they set it up in August, though, Jake.

TAPPER: Right.

HUNT: And Dennis Blair wasn't aware that it wasn't operative. That's -- that's a problem.

The second problem -- I don't think prosecutions are unimportant here. They didn't have any prosecutorial problem here. There were 40 witnesses on that airplane. They had material evidence -- his underwear, if you will -- so I think they botched this one up.

I agree with Ruth. I don't think it was a terrible...


PODESTA: Jake, the proof's in the pudding. He's talking. The FBI has gone to Nigeria, got his parents to cooperate. They've talked to them. He's cooperating. They've already rolled up a cell in Malaysia, evidently, from information that he's given.

And I think that, you know, you can huff and puff, as former Governor Palin likes to do, but the proof's in the pudding. He's talking. They've gotten actionable intelligence. They're acting on it. And I think that's -- we've got to...

NOONAN: But can I just -- it is weird that the U.S. government is announcing to the world that he is talking. It is -- it is strange that they're saying, "Abdulmutallab, he's singing like a bird. All you people back in Yemen, all you people in Nigeria and all the places he's been to in the past two years, realize he's giving you up. We've turned him." That's not good for us.

PODESTA: Maybe if the -- maybe if all those politicians stopped attacking the FBI. Mitch McConnell likened the FBI to a Larry King interview. Maybe if they'd stop with the politics...

MARCUS: Now, that's cruel.

PODESTA: Well, no, I think he owes the FBI an apology. But if they'd stop with the politics, maybe they wouldn't have to respond to it.


TAPPER: Well, that's an interesting argument, because what happened was on Tuesday there was an Intelligence Committee hearing. And both FBI Director Mueller and the director of national intelligence, Admiral Blair, said very tersely that Abdulmutallab -- that the questioning and the interrogation was still going on.

TAPPER: After that, the White House called a briefing and told White House reporters what was going on, which was that Abdulmutallab's family was cooperating. That decision then was criticized, as you just criticized.

Now, what the White House says is, people were criticizing us before. They knew Abdulmutallab was cooperating. Now they're criticizing us for letting people know that he's cooperating. They can't have it both ways. Is that not fair?

NOONAN: I think two facts. One is, sometimes when you hold the executive and you are president and you work for a president, you have to show forbearance and not answer back when it will jeopardize things in a serious way, as I think perhaps the telling everybody that Abdulmutallab is talking might jeopardize things.

The second thing is, yes, both parties to some extent use these grave national security issues as a political football. People like us always complain about it. But the fact is, at those Tuesday hearings, everybody in American intelligence, when asked, "Do you see the possibility of a coming attack in the next few months?" they said, "Yes, yes, yes, and yes."

Both parties should sober up on this and seriously work together as if they were retired people in Virginia and Maryland who used to work in the government and know now party stuff on this issue doesn't matter.

TAPPER: Well, Al, does the president have a responsibility -- John was saying that the politics were interjected, and he was suggesting that the Republicans were interjecting it -- does the administration have a higher threshold to not respond, to not let these things on?

They say, look, we're letting the American people know that we are doing everything we can to protect them. Is that fair? Or is it that they're just trying to get political cover?

HUNT: I think they need to do that, Jake, without sometimes going into the particulars. And I think they probably have said more than they needed to say here. I doubt very much that it jeopardizes national security. I also think that almost all those experts -- Peggy's right -- that if you talk to of either party will tell you that there's somebody out there, some people out there who are planning an attack. They want to attack us. They want to attack us soon. I don't think the handling of the Christmas bomber -- I envy you all, because you pronounced his name better than I can -- I don't think -- I don't think the handling of that is going to change in any way what the likelihood is of any successful attack or not.

MARCUS: But -- but I want to go back to something that John said and disagree with John, which is, the proof's not necessarily in the pudding, because what if he had actionable intelligence about ongoing plots of people in the air, of people about to be deployed?

That he's talking now is terrific. I tend to think that the administration should have sucked it up and not answered all -- not defended itself so much, though I completely understand the instinct to do that.

But whether he talked a little bit, if he -- but it's not at all clear to me that he was telling everything...


PODESTA: That's a -- that's a legitimate point, but they did interrogate him before he -- they, you know, put him under to -- for an operation to deal with his wounds. And when he came out, the FBI has said -- I don't -- you know, the Intelligence Committee could go into this -- the FBI has said that he's -- he decided he wasn't going to talk anymore, and they -- at that point, they gave him his Miranda warnings.

So that's -- it's a -- you know, it's a question of how long you go on for. I think that's a question of judgment. Maybe you're right. Maybe the FBI was right. I tend to listen to the professionals. And other people tend to listen to Governor Palin.

But I think that -- to attack the FBI...


PODESTA: But, you know, I come back to -- to attack the FBI for their conduct in this case as the Republican leadership has done, I think is unconscionable.

By the end of the week, we had -- we had Senator Shelby putting a hold on 70 nominees, including the head of the intelligence at the Department of Homeland Security, the head of intelligence at Department of State. I mean, what gives here? Are these people serious or are they just playing politics?

TAPPER: Well, and then that's interesting, because all this debate, all this partisanship comes during a period, a two-week period, where President Obama is really hitting home the idea that there needs to be more bipartisanship. In fact, here's the president speaking yesterday at the Democratic National Committee's winter retreat.

(BEGIN VIDEO CLIP) OBAMA: I'm proud to be a Democrat. I'm proud to be a leader of this great party. But I also know that we can't solve all of our problems alone. So we need to extend our hands to the other side. We've been working on them. Because if we're going to change the ways of Washington, we're going to have to change its tone.


TAPPER: So, Al, that speech came one day after the White House attacked Senator Shelby for the very thing John was just talking about. He had put blanket holds on all nominees because he was concerned, he says, about some national security issues. What's going on here?

HUNT: Well, first of all, Senator Shelby is totally fraudulent on this to begin with. He was concerned about pork for his home state of Alabama. This is as bad as the Nebraska carve-out. It's outrageous what he did. It's, I think, an abuse of senatorial prerogative.

But I also, Jake, think that it's nice to give speeches. We have to have a more civil dialogue in this town. We have to have more bipartisanship. For a whole lot of reasons, it's not going to happen. It might selectively be able to -- you might have a few areas. You'll have some jobs bills where Orrin Hatch and Chuck Schumer might agree.

But in a -- in a broader sense, this is -- these are divisive political times, and that's not going to change, at least until after the November election.

TAPPER: George, the administration and the president has said specifically that he was hoping for some bipartisanship support for some of the small-business tax cuts and credits he's pushing. There's an elimination of a capital gains tax for investments in small businesses, a tax credit for hiring, hoping for Republican support. I have yet to hear one Republican voice, one level of support for any of that.

If there's not bipartisan support for tax cuts, is there support -- is there possibility for any support for anything bipartisan?

WILL: Well, I'll volunteer. I subscribe to Milton Friedman's view that any tax cut of any shape at any time for any reason is to be supported. So I think probably they'll get some support on this.

But he has a very aggressive agenda from which he has retreated not one bit. I think you'd agree with that. And so when he extends his hand, he says, "I ask only one thing of Republicans, and that is that you quit being Republicans," and they respectfully decline.

If you have an aggressive agenda, you're going to have to push it aggressively in a partisan manner.

NOONAN: I'd add, sometimes timing is everything. If the president had spoken like that or acted in a manner reflective of his comments last year, when he first became president, instead of presenting some bills that want to actually know Republican support, he might be in better shape now. It's very convenient for him to be saying, "We're all in this together," when his numbers are going down.

TAPPER: You wrote recently rather approvingly of the election of Scott Brown in Massachusetts. He has -- is that unfair?

NOONAN: Sure. No, no, good.

TAPPER: OK. OK. And -- and he came here talking a lot about wanting to work in a bipartisan fashion. One of the first things he did, as you saw in the interview with Geithner, we ran a clip of Brown, was say that the stimulus bill has not created one job. Now, you can criticize with the stimulus bill, but it is -- you can -- you can disagree with whether or not it's created 2 million jobs, but certainly it has created one job.

HUNT: Scott Brown's.



TAPPER: But, I mean, is -- do people just come down to Washington and become partisan, if even Scott Brown is already saying the stimulus bill hasn't created one job?

NOONAN: Well, Scott Brown was saying things like that on the way to election. He is very much against the -- the president's economic program.

I would say, look, obviously, the stimulus bill must have created at least one job, but when you try to find out where are the jobs, how many, what has this bill done, you know, you can't really get an answer. It sort of all dissolves in gobbledygook. You never know. I can't imagine Mr. Geithner knows how many jobs it's created.

WILL: It has -- it has increased federal civilian employment dramatically, and it has preserved unionized public employee jobs in the state and local governments.

TAPPER: John, is there any hope for bipartisan work in this Congress this election year?

PODESTA: Well, you know, you have to kind of turn over a lot of rocks to try to find some possibility of that. I think the one place where you still might be able to find bipartisan work is the efforts that Lindsey Graham and John Kerry and -- and Joe Lieberman are undertaking to try to find out whether they can do a comprehensive energy and climate bill that would actually create an energy revolution in this country.

Senator Graham has stuck his neck out. He's working hard at it. And, you know, I'm still hopeful that we can find some bipartisan support on a bill that the president could -- could sign.

TAPPER: Bipartisan seems to be the word of the day. Sarah Palin talked a lot about there needing to be bipartisan work last night in her speech, even though she was definitely pushing a rather conservative Tea Party agenda. What did you think of her speech, Peggy?

NOONAN: Hmm. I'll tell you, it's almost odd what struck me. The Tea Party movement itself has to decide if it is a movement, in which case it will probably become part of a broad Republican coalition, or if it is going to be a third party.

It was interesting to me that Palin continually called it a movement and didn't refer to any third-party ambitions. If it's going to be a movement, it's good news for the Republicans. If it were going to be a third-party thing, it would be bad news for the Republicans, very good for the Democrats.

MARCUS: I'm not really sure that having it be a movement that's part of the Republican Party would be good news for the Republicans. It would -- Sarah Palin talked last night about how it was a great thing for the Republicans to have robust and divisive primaries, and I would think John here would say, "Yes, excellent. Let's go to it, and, in fact, have those robust and divisive primaries and pick the Tea Party candidate, because running against a Tea Party candidate is going to be a lot easier for whatever Democratic candidate there is than running against some kind of consensus centrist-esque Republican candidate."

NOONAN: But at the end of the day, this is a big movement. It's the most respected party, I think, in the polls now. It leads before Republicans and before Democrats...


NOONAN: ... but when these folks vote, they're not going to be voting Democratic. They're going to be voting Republican at the end of the day.

PODESTA: I think the only thing that's certain is that it's good news for Republican consultants, because there seems to be a lot of profiteering done now (inaudible) the Tea Party movement, as was evidenced, I think, in Nashville this week.

But I think that, so far, we've seen -- I think, actually, in the end of the day, it's going to be a problem for the Republican Party. And -- and I think Governor Palin could be a problem for the Republican Party. This week, Wall Street Journal reported that John Boehner and Eric Cantor were meeting with bankers from Wall Street saying, "Why -- why aren't you giving us more money? We're opposing financial regulatory reform. We're opposing putting caps on your bonuses."

Sarah Palin won't stand for that. The Tea Party movement won't stand for that. And I think when that clash happens, I think the Republican leaders in -- in Congress, I think, are going to pay a price for it.


HUNT: The Tea Party movement will clearly help Republicans this year, because they're an insurgent party this year. They create energy out there. They don't -- they don't have litmus tests of Scott Brown or Mark Kirk or anyone like that. However, I'm not sure exactly what the Tea Party movement is. I don't think the polls -- the people who respond to the polls -- know what it is. And it remains to be seen whether it will be an asset to the Republican Party once you get beyond this insurgency year.

TAPPER: One thing -- and speaking of difficult Republican primaries, there is a difficult Republican primary, very contested, in California right now. A former Hewlett-Packard CEO, Carly Fiorina, is running this ad running for the Senate for the Republican nomination against former Republican Congressman Tom Campbell. Take a look.


(UNKNOWN): Is he what he tells us? Or is what he's become over the years, a FCINO, fiscal conservative in name only, a wolf in sheep's clothing? The man who literally helped...


TAPPER: There you go, the demon sheep ads. George, aside from the -- the fact that that demon sheep now haunts me at night, I'm wondering if you could comment on the fact that Republicans are now running to the right for this mantle of fiscal conservative. Certainly that's something we see in the Tea Party movement. We're seeing it now in California, as well.

WILL: Sure, because California has a closed primary. Republicans will vote in it. And about 15 percent of the decline to states will vote in it. That's -- Fiorina running an ad against Tom Campbell, who was running for governor until enticed back into the Senate race, I think by Meg Whitman, who's running for governor and really doesn't want two former Silicon Valley CEOs running in tandem on the ticket, Meg Whitman coming from eBay, Carly Fiorina from Hewlett-Packard.

That said, it's the dog that didn't bark there. There's another candidate there, and he's Chuck DeVore. He's the conservative in the race. And I'll make you a small wager that he is the Republican nominee, neither of those two.

TAPPER: Do you want to get in on that action?

NOONAN: That -- I've watched that thing three times. It is -- I'm fascinated by it. It is less like a political advertisement than it is like a nervous breakdown. It is crazy. Its text doesn't follow its art, if that's what it would be called. It's like -- it's like an answer to the question, what would happen if Salvador Dali made a tech (ph) commercial?

TAPPER: You don't -- you don't like the demon sheep? You're not a fan of the demon sheep?

NOONAN: I kind of love it.

MARCUS: More livestock in political ads is what we need. Can we say something about the -- the Republican lurch to claim the mantle of fiscal conservatism?

TAPPER: Very quickly, yes.

MARCUS: Give me a break, OK? There is a serious proposal out there, first for a statutory commission, now for an executive order commission to tackle this, to put everything on the table, and Republicans have balked.

TAPPER: All right, and we're going to have to leave it there. The roundtable will continue in the green room on abcnews.com, and you can get political updates all week long by signing up for our newsletter also on abc.com.