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updated 2/12/2010 12:49:25 PM ET 2010-02-12T17:49:25

MR. DAVID GREGORY: This Sunday: The White House strikes a blow against
Wall Street.

(Videotape)

PRES. BARACK OBAMA: It does offend our values when executives of big
financial firms, firms that are struggling, pay themselves huge bonuses
even as they continue to rely on taxpayer assistance to stay afloat.

(End videotape)

MR. GREGORY: As banks reap record profits and returned to high-flying bonus
payments, is limiting executive pay the way to prevent another meltdown
or punishment that could ultimately hurt the economy? What's next?

Plus, the healthcare fight. Is the Democratic push for a government
healthcare plan, the public option, back on track, or will moderates
desert the White House? This morning, a debate between two key senators
on the Finance Committee: Democratic Senator Chuck Schumer of New York
and Republican Senator John Cornyn of Texas.

Also, perspective on the fight between Main Street and Wall Street from
CNBC's Erin Burnett and Andrew Ross Sorkin of The New York Times, author
of the new book about the root of this financial crisis, "Too Big to
Fail."

Then, the president and the left/right political divide. The White House
is taking on its critics.

(Videotape)

FMR. VICE PRES. DICK CHENEY: The White House must stop dithering while
America's armed forces are in danger.

MR. ROBERT GIBBS: What Vice President Cheney calls "dithering," President
Obama calls his solemn responsibility to the men and women in uniform and
to the American public. I think we've all seen what happens when somebody
doesn't take that responsibility seriously.

(End videotape)

MR. GREGORY: Afghanistan, health care and the economy, and the political test
this fall for the Obama presidency in Virginia and New Jersey. With us,
Jane Mayer of The New Yorker, MSNBC's Joe Scarborough, former adviser to
President George W. Bush and author of the new book "Start-Up Nation" Dan
Senor, and PBS' Tavis Smiley.

Finally, more cases across the country of the H1N1 flu virus as President
Obama declares the outbreak a national emergency. Our MEET THE PRESS
Minute looks back at lessons learned from the swine flu threat more than
30 years ago.

MR. GREGORY: But first, a deadly morning in Iraq as two powerful
car bombs exploded in downtown Baghdad, killing at least 132 people,
targeting the fragile city government offices. This comes as Iraq is
preparing for elections scheduled for January. Officials have warned that
this type of violence could increase as insurgents try to make the
country appear unstable.

Joining us now, Republican Senator John Cornyn of Texas and Democratic
Senator Chuck Schumer of New York.

Welcome, both of you, back to MEET THE PRESS. Let me start on this
developing story out of Iraq. Senator Cornyn, this comes as U.S. forces
are in the middle of withdrawing from that country; is it a wake-up call
to you, a question about whether Iraq is up to securing its own country?

SEN. JOHN CORNYN (R-TX): Well, it's certainly a reminder that Iraq
remains a fragile country and that the insurgents are going to try to
test the Maliki government and the Iraqi government to see whether they
have what it takes as they know we are drawing down our troops. I thought
Thomas Friedman had a good column on that this morning, talking about we
can't take our eye off Iraq as we turn our gaze toward the challenge in
Afghanistan.

MR. GREGORY: And yet, Senator Schumer, indeed that's where the debate is, it
is about Afghanistan...

SEN. CHARLES SCHUMER (D-NY): It is.

MR. GREGORY: ...not about Iraq.

SEN. SCHUMER: But it also shows you how hard it is to do this. Here we've
had General Petraeus, he's done a very good job, our soldiers have done a
good job, we've spent a lot of time there, a trillion dollars, of course,
over 4,000 lives lost, and it's still not all that stable. It shows you
how hard this is going to be in Afghanistan.

MR. GREGORY: Have we won in Iraq?

SEN. SCHUMER: Well...

SEN. CORNYN: I think we've certainly made great progress. You know, I
wouldn't declare a victory or say we've won, but it certainly is much
better than anyone even...

MR. GREGORY: Mm-hmm.

SEN. CORNYN: ...hoped for just a few months ago.

SEN. SCHUMER: If, if the goal...

MR. GREGORY: It's premature?

SEN. SCHUMER: ...if the, if the goal has--if the goal was to stop
terrorism, that link between Iraq and terrorism has long been exposed as
false. If the goal is to bring stability, it's still a 50/50 proposition
even after all we've done.

MR. GREGORY: We'll get to Afghanistan in just a few minutes, but I want to
start with this very controversial issue of executive compensation and
get into the decision that the administration made this week. Let's put
it up on our screen, it summarizes; the top seven firms who've gotten
bailout money have been told now by the Obama administration, by Ken
Feinberg, the special master for pay, that the top 25 executives will see
their pay slashed. Now, the reality is, Senator Schumer, this may feel
good to a lot of people who don't like the bailouts, don't like these
companies. Is this anything more than punishment?

SEN. SCHUMER: I think it is. First of all, look, these are companies that
had real, real trouble and had to be bailed out by the government. The
average American justifiably says, "Hey, I work hard, I don't make much
of a salary. I did nothing wrong, now my taxpayer dollars are going
here." At the very least, these executives, in terms of their own salary,
can tighten up. Ken Feinberg, who's a very smart, down-the-middle,
practical guy, says it will not hurt the effectiveness of these
companies.

MR. GREGORY: But he doesn't know that.

SEN. SCHUMER: Well, nobody knows it...

MR. GREGORY: Right.

SEN. SCHUMER: ...but he's a pretty good judge. And when the president
chose him, he was not choosing somebody who would just be out there to
punish.

He was choosing somebody with effective solutions. And just
this week, David, the Fed did a very revolutionary thing. I mean, I, I
thought it was amazing what they did. They said, "We are going to look at
the compensation systems, the way, way compensation works, for 28 of the
largest companies in America," not for punishment--the Fed is not an
agency that punishes these institutions--but because the pay may have led
to undue risks. And we have to do this...

MR. GREGORY: All right.

SEN. SCHUMER: ...in a careful way, in a nonvindictive way, but it's
something that has to be seriously examined.

MR. GREGORY: All right. But, Senator Cornyn, if the results of these actions
by Ken Feinberg and by the Obama administration lead to an exodus from
these companies of some of the very people who can help stabilize the
companies and therefore help them pay back the bailout money, then why
would you do this?

SEN. CORNYN: Well, that's a very real concern. And the people who are
being punished now by having their compensation capped, we're not...

MR. GREGORY: Do you think it's just punishment?

SEN. CORNYN: I think it's hard to interpret it as anything other than
that. I would distinguish between, though, David, where the taxpayers are
essentially shareholders in these companies, these companies would not
exist but for the largess of the American taxpayer. So I, I consider this
a different situation than if government just tried to cap executive
compensation in the private sector.

SEN. SCHUMER: Right.

SEN. CORNYN: But I would say that there is growing apprehension at
government intervention all across the, the spectrum, from car
companies...

MR. GREGORY: But my--but the question I asked is if the goal here is to pay
back the TARP, if you ultimately hurt the companies by forcing people to
leave because--as, as an executive told me this week, the economy's
getting better, the phones are starting to ring, people will leave. If
the goal is to pay back the TARP, how do you do that if you risk an
exodus from these companies because they don't want to stick around with
pay caps?

SEN. SCHUMER: Well, again, I think you have to be careful. The system
that Feinberg implemented is supposed to keep them around; less salary,
more stock, and stock that vests over a period of time so they have an
interest in staying with the company and making it work.

SEN. CORNYN: I think there's probably less here than meets the eye.
They'll find--the companies certainly'll probably find some other
alternative means to compensate their executives to keep them there. But
I don't think we should for a minute think this substitutes for real
regulatory reform, which is a debate that Congress has not really begun
in earnest, waiting till after the healthcare debate has concluded.

MR. GREGORY: AIG is going to pay more bonuses next March, $200 million in
bonuses to the same group, not necessarily the same people who were
responsible for the credit default swap collapse. Andrew Cuomo, the New
York attorney general, has said that--he said past March that those names
of people getting those bonuses should actually be released publicly. Do
you think that's appropriate?

SEN. SCHUMER: Well, I don't have a problem with that. Again...

MR. GREGORY: They should be shamed, in other words?

SEN. SCHUMER: No, it's not shamed. Once you get government money, and
this is hundreds of billions of dollars, you're in a different ballpark.
You can't play--I agree with John, I don't think the government should
set salaries for companies that are private. I believe the shareholders
should have more power. And in fact, I've been pushing something, I think
it'll be in the reform bill, called a shareholder bill of rights. It's
their responsibility. But when the government is giving massive amounts
of money and these people would be out on the street except for the
government money, the rules are different.

MR. GREGORY: Let me turn to the healthcare debate and the issue of the public
option. Here's where the public stands on the idea of a government-run
plan that would be alongside private insurance to drive down costs: 61
percent of Americans support the idea of a public option. Senator
Schumer, you're very involved in this. Will the final bill on healthcare
reform have a public option?

SEN. SCHUMER: I believer Leader Reid is leaning strongly to putting a
level playing field, state opt-out public option in the bill. He's
been...

MR. GREGORY: Explain just for a second how that would actually work.

SEN. SCHUMER: OK. There are some, many of my colleagues on the Democratic
side, who would like to see it be a much more government-oriented
program; the government sets the rates, a Medicare rate or Medicare Plus
5, you're forced to take it, etc. What I've been proposing is something a
little more in the middle. The government would set it up. We need some
competition for the insurance companies, and many of us believe this is
the only way to get real competition. But then after three months, where
they give it some money to get going, it would have to play by the same
rules as the insurance companies, the same rates, the same reserves, the
same requirements.

MR. GREGORY: Right.

SEN. SCHUMER: It would have to pay the loan back over a period of years
and, most importantly--and people are worried about this, some, anyway,
many--it would negotiate rates with the providers just like an insurance
company. But in states where there is only one insurance company or
two--40, 40 of the 50 states, two insurance companies dominate the
market. The only real way or one of the best real ways to bring costs
down is a new entity competing.

MR. GREGORY: OK.

SEN. SCHUMER: The insurance company industry will not do it on its own.

MR. GREGORY: And the point is...

SEN. SCHUMER: The government would. And it's--and the one other thing I'd
say, and this is really important: You're not required to take the
government option. It's not a government plan being forced on people.
That was the rhetoric in August. It's an option.

MR. GREGORY: Mm-hmm.

SEN. SCHUMER: If you don't like your--the private insurance, go to the
public option.

MR. GREGORY: All right.

SEN. SCHUMER: If you like the private insurance, stick with it. But even
there, the public option will force them to be a little better.

MR. GREGORY: But you don't--well, well, where are the votes? Conservative
Democrats, Olympia Snowe, are they going to sign up for this?

SEN. SCHUMER: OK, Leader Reid--and there's nobody better at counting the
votes than he is, he's a wizard at it and people don't give him enough
credit for it...

MR. GREGORY: Mm-hmm.

SEN. SCHUMER: ...and I and others have been talking to liberal Democrats,
moderate Democrats, conservative Democrats. The liberals, they like it
stronger, but they're willing to live with level playing field, opt-out.
The more moderate Democrats, there are some who actually like it. As long
as it's a level playing field, they're comfortable with it. There are
others who say that, "I'm not sure I like it, but I won't hold up passage
of the bill." I think we're very close to getting the 60 votes we need to
move forward, and my guess is that the public option level playing field
with the state opt-out will be in the bill. But Leader Reid will make
that decision after he talks to everybody several times.

MR. GREGORY: That's an important development. You believe the Democrats are
close to 60 votes in the Senate for healthcare reform.

SEN. SCHUMER: Correct. Correct.

MR. GREGORY: Senator Cornyn, can you with live this idea?

SEN. CORNYN: David...

MR. GREGORY: Would you vote for it?

SEN. CORNYN: David, the majority leader is a, is a good vote counter, but
I think even he was surprised when 13 Democrats voted with the
Republicans to reject $300 billion in additional red ink in the form of
the Medicare reimbursements for doctors vote that occurred last week. I
think the majority are recognizing that he has big problems keeping
Democrats together, much less attracting Republicans to vote for it. And
the reason is we have maxed out our credit card as a government. We are
at a $12 trillion debt limit; for the second time in the Obama
administration the Democrats are going to ask Congress to vote to
increase the--that debt limit.

MR. GREGORY: Who do you blame for that, by the way?

SEN. SCHUMER: Yeah. Good question.

SEN. CORNYN: Well, I think $1.1 trillion in stimulus spending.
Forty-three cents out of every dollar being spent being borrowed money
today; with a healthcare proposal which has phony assumptions and that
will never occur, like $500 billion in Medicare cuts which actually won't
solve the problem of reducing premiums, but will rather increase premiums
for people currently with insurance and will impose a tax on middle-class
taxpayers. I mean, this is a bad formula. We could, I think, create good
competition if you allowed people to purchase insurance policies in other
states...

SEN. SCHUMER: David, I just...

MR. GREGORY: All right.

SEN. CORNYN: ...rather than the public option, which is a Trojan horse
for a single-payer system.

SEN. SCHUMER: I want to say something about those costs.

MR. GREGORY: OK, quick response, then I want to move on. OK.

SEN. SCHUMER: Because you, you have to--let's talk reality here. We're
trying, in our healthcare bill, to have it paid for so it doesn't raise
the deficit a nickel. When they had the big Medicare increase, $400
billion, they didn't even try to pay for it. We're trying to pay. We've
said we will pay for the war in Afghanistan. One trillion dollars, war in
Iraq, they didn't pay a nickel for it. The debt in January, when George
Bush left, voted for by lock, stock and barrel with all the Republicans
was much, much greater. Now Barack Obama and we Democrats, this is
counterintuitive but true, are really trying to get a handle on balancing
the budget and we're making real efforts to do it. That's why health care
is more limited than people would want it to be. And we--they say, "Well,
it's not good enough." Well, join us and help us. But you sure didn't try
to make it all good when you were in power.

SEN. CORNYN: Well, David, I hope the Democrats will join with us to, to
pass real entitlement reform and to deal with these growing deficits. Senator
Conrad, Senator Gregg have a proposal, Senator Feinstein and I have a
proposal that was referenced by 10 moderate Democrats who wrote a letter
to Harry Reid this last week saying don't count on us as an automatic
vote for raising the debt ceiling unless you're going to deal with these
deficits and the growing part of spending.

SEN. SCHUMER: But the bet..

MR. GREGORY: All right, hold on. I want to get to a couple of other issues...

SEN. SCHUMER: OK.

MR. GREGORY: ...just a couple of minutes left. First, Afghanistan; as the
president decides about his strategy, the former Vice President Dick
Cheney was outspoken this week. This is what he said.

(Videotape, Wednesday)

FMR. VICE PRES. DICK CHENEY: Having announced his Afghanistan strategy in
March, President Obama now seems afraid to make a decision and unable to
provide his commander on the ground with the troops he needs to complete
the mission. The White House must stop dithering while America's armed
forces are in danger.

(End videotape)

MR. GREGORY: Senator Schumer, dithering?

SEN. SCHUMER: Well, you know, Afghanistan, I agree with Joe Biden. He
said when we hear Dick Cheney, we remember seven years of neglect of
Afghanistan that once again now President Obama is going to have to deal
with. He's dealing with it in a thoughtful, careful way. He's listening
to everybody. He will not be rushed to judgment. It's a--I, I'm wrestling
with it myself, and boy it's difficult. There is no good answer. But for
Dick Cheney, after seven years focusing on Iraq, the wrong place, instead
of Afghanistan, to now say, "It's a few months into this administration,
they'd better come up with a solution," that's not fair or right.

SEN. CORNYN: Americans are fighting and dying in Afghanistan today as
they have for the last seven years. I don't understand, for a president
who said this is a war of necessity to now question the recommendation of
his lead commander General McChrystal on resourcing the war in order to be successful and win.

MR. GREGORY: Did President Bush and Vice President Cheney provide enough
troops to win in Afghanistan?

SEN. CORNYN: I think we've learned that we need a, a change of strategy
as, as, as opposed to just raw numbers.

MR. GREGORY: It's a simple question. Did they provide enough troops to win in
Afghanistan?

SEN. CORNYN: Well, obviously we haven't yet won Afghanistan.

MR. GREGORY: Right.

SEN. CORNYN: And winning in Afghanistan may be different from Iraq
because of the, of the nature of the country.

MR. GREGORY: But did Bush and Cheney provide the troops to win?

SEN. CORNYN: Well, we haven't won...

MR. GREGORY: Right.

SEN. CORNYN: ...so I guess...

MR. GREGORY: So they didn't. You don't think they did?

SEN. CORNYN: But it's a strategy...

SEN. SCHUMER: Well...

SEN. CORNYN: David, the problem is it's not just--as we saw on the surge
in Iraq, it's not just the troops, it's the change of strategy.

MR. GREGORY: But to be, but to be, but to be consistent on this...

SEN. CORNYN: A counter...

MR. GREGORY: ...if you say that this president should commit more troops,
can't you render an opinion about whether the previous administration
that started the war provided the resources to win it?

SEN. CORNYN: Well...

SEN. SCHUMER: Hey, David, we all know the facts here.

SEN. CORNYN: Well, if I can answer the question.

SEN. SCHUMER: Go ahead.

MR. GREGORY: Yeah.

SEN. CORNYN: I think the--my problem with your question, David, is you're
assuming that just additional troops will achieve a victory. It will not.
What we need is a change of strategy. We need a counterinsurgency
strategy such as General Petraeus and General Odierno executed in Iraq.

SEN. SCHUMER: OK.

SEN. CORNYN: If we do that...

MR. GREGORY: Right.

SEN. CORNYN: ...which is what General McChrystal's recommending in
Afghanistan, I think our chances of success are good.

SEN. SCHUMER: Just quickly, one, they were so busy with Iraq they didn't
pay attention to Afghanistan. And if the right strategy is that we need a
new strategy, where was the strategy for seven years? Now, I'm not--I
don't want to point fingers of blame. Our soldiers are out there in the
fields. But it's a little bit, gee whiz, here Obama's trying--President
Obama's trying to come up with a strategy listening to everybody, and
immediately the Republicans are pounding and say, "Do this, do this, do
this," when for seven years they didn't, either in number of troops or
good strategy.

MR. GREGORY: Before we go, Senator Cornyn, you're running, running the
elections for, for the Senate for congressman next year. As you look at
these races, governor's races in New Jersey and Virginia, where the
Democrats are in considerable trouble, what will it say about the Obama
presidency, these results from these elections?

SEN. CORNYN: Well, I think the Virginia governor's race particularly is
going to be referendum on the policies that the American people have seen
coming out of Washington these days. While the president remains
personally popular, his policies are not. And the more people learn about
them, the more they learn about the growing debt--and indeed, the vote
we'll have on increasing the debt ceiling I think will bring that into
focus--then I think they--we've seen them reject them. And I think that's
what will happen in Virginia. I think it's a, it's a, it's a cautionary
tale to, to Democrats in 2010.

MR. GREGORY: Are you worried about 2010?

SEN. SCHUMER: Well, I think that in 2010 the--what's helping us is the
Republican Party doesn't seem to have any platform at all. People realize
that we are grappling with the major issues that have to be grappled with,
whether it's health care and Afghanistan. When health care passes, it's
going to improve--I think we're going to do real well in 2010.

MR. MR. GREGORY: But the mood against the incumbents right now is bad.

SEN. SCHUMER: Well, I think you'll see in 2010 we're going to do pretty
well, aided and abetted by no alternative, but also by the fact that
these are big problems that we're getting our arms around.

MR. GREGORY: All right. Senators, thank you both very much. The debate will
continue.

SEN. CORNYN: Thanks, David.

MR. MR. GREGORY: I want to turn to the other side of the table right
now and get some additional perspective on the economy and this
controversial debate over executive pay. And joining us now, CNBC's Erin
Burnett and Andrew Ross Sorkin of The New York Times.

Welcome to both of you. Let's pick up on this idea of what the
administration has done; curbed the salaries, cut the salaries at these
firms that had gotten most of the bailout money. Erin Burnett, what will
this actually accomplish?

MS. ERIN BURNETT: It's a good question. And, and I know what the senators
are talking about, whether it's punishment or not. From what I've heard
both from executives at the banks that are affected and from the other
banks, the banks that ostensibly are going to start to see people fleeing
to work for because they could be paid more, is that it's much more of a
headline than it is anything else. That's not to say it lacks teeth
completely, but basically what you're going to see is people paid more in
stock than they were in cash. And that's a very important thing. You're
going to see people have stock that pays out over five years or more. So
their overall value of compensation could actually be higher than it was
before. And that's one thing that those banks are going to do. And it's
very important to get that distinction between cash and stock, which I
think is a big part of what they're going to do.

MR. GREGORY: Andrew?

MR. ANDREW ROSS SORKIN: It's symbolic. But beyond that, in terms of
having true teeth, I'm not sure it does. And as you said, the real
conundrum is that we're now shareholders of these companies. And it is
very likely that when you talk about the 25 top people at these firms,
that they're likely to walk across the street to a Goldman Sachs or a
JPMorgan or a firm that also received government but now has paid it back
and take that job, because they can be paid a much higher bonus. Now, one
of the things that Mr. Schumer said was this issue that these banks now
can spend more--can--that these banks can spend more money. And that's
going to be a big issue, as well.

MR. GREGORY: You wrote in your book "Too Big to Fail," which is now out,
about the financial crisis, the root causes.

MR. SORKIN: Right.

MR. GREGORY: You write this: "The handful of proposals that have been
introduced to put the financial system back in its right place and rein
in risk have seemed tepid and halfhearted, at best."

MR. SORKIN: Right.

MR. GREGORY: "Relieved that the worst is supposedly behind us, the Obama
administration seems to have moved on to other priorities. Meanwhile,
Wall Street, bent but not broken, rumbles on in search of profits. Risk
is being reintroduced into the system."

MR. SORKIN: Right.

MR. GREGORY: "Vulture investing is back in vogue again. Perhaps most
disturbing of all, ego is still very much a very central part of the Wall
Street machine."

MR. SORKIN: Right.

MR. GREGORY: So slashing executive comp at the--these seven firms...

MR. SORKIN: Right.

MR. GREGORY: ...does it have any impact on the rest of Wall Street and how it
operates?

MR. SORKIN: I'm not sure it does. And the ethos of Wall Street hasn't
changed, and that, that is the issue. And that's going to have to come
from inside of Wall Street. And unless--I'm not sure it's actually going
to come from inside Wall Street, it's going to have to come on the
regulatory side. And the, the real question is, as the economy gets
healthier, as things stabilize, will there be a motive to actually really
get regulatory reform with teeth? I think that, that's going to be the
big issue going forward.

MR. GREGORY: And regulatory reform meaning new rules of the--I mean, there's
this, all this talk, Erin...

MR. SORKIN: I think that...

MR. GREGORY: ...about how the Fed will start to regulate pay at other firms
by managing risk and reward.

MR. SORKIN: Right.

MR. GREGORY: How do you do that when this is, all of this is a risk business?
That's how money is made ultimately at investments banks...

MS. BURNETT: Mm-hmm.

MR. GREGORY: ...that are now merged with these commercial banks?

MS. BURNETT: Well, it's virtually impossible. And what's interesting,
too, when you look at the mandate of the Fed, is they already have that
power. When compensation threatens the safeness and soundness of an
institute they regulate, they already, prior to this, had the ability to
regulate the pay.

MR. GREGORY: Right.

MS. BURNETT: So in terms of what's changing here, the answer would be,
frankly, very little.

MR. GREGORY: Right.

MR. SORKIN: But there is a fix to this, and I think it's, it, it's the
long-term fix, which is capital requirements. Which means that these
banks--and it actually would help across the board if...

MR. GREGORY: Explain what that is.

MR. SORKIN: What that means is if we can--if the banks have to have more
money in their coffers at any given time for, for a rainy day, considered
a rainy day fund, if they can put more money--if we force them to put
more money, that means that all the profits that the banks are taking now
and giving them out as bonuses, that money has to go back into the bank,
and that means that there's less risk in the system. And that ultimately
should be the goal.

MS. BURNETT: That--yeah.

MR. GREGORY: But is it, is it a big problem here that Americans love to hate
AIG, they love to hate B of A.

MS. BURNETT: Mm-hmm.

MR. GREGORY: But they are wards of the state, and they're wards of the state
because the government wants to make them healthy enough, profitable
enough.

MR. SORKIN: Right. Right.

MR. GREGORY: They want AIG to go gangbusters...

MS. BURNETT: Right.

MR. GREGORY: ...so that they can pay back the taxpayer. Yet, we're at this
kind of disconnect which is nobody really wants to help them, but we want
them to be healthier.

MS. BURNETT: It's a tough--it's very tough. And that's why I think the
compensation discussion's an important one, because it sounds like it has
teeth. But, but like I was saying, fundamentally, you can still pay these
people a lot of money.

MR. GREGORY: Right.

MS. BURNETT: Particularly in stock. So that's why they're trying to walk
that fine line to not, quote/unquote, punish them.

MR. GREGORY: Right. Just, just a couple of minutes left. I want to talk about
jobs and I want to talk about the debt. And we've got a chart about the
debt which we'll get to in just a minute. We'll get that ready. But let
me first talk about unemployment. One of the top economic advisers to the
president saying this week that their projections were off, they think
unemployment is more difficult. It's going to get above 10 percent by the
middle of next year, that job growth will, would remain anemic through
the end of 2010. How severe is this?

MR. SORKIN: I think it's a real problem. And I think the great disconnect
that Americans are having now is you're hearing about profits, you're
hearing about the economy coming back, and yet your neighbor doesn't have
a job. And by the way, that's going to come into this whole compensation
argument for a very long time. I think we're going to be dealing with
this for a very long time.

MR. GREGORY: Right.

MR. SORKIN: And the other issue is the economy looks like it's getting
better, but at some point does it turn the opposite way in that if you
don't have jobs coming back, where is the consumer in all of this?

MR. MR. GREGORY: Right.

MS. BURNETT: Right.

MR. MR. GREGORY: And let's look, Erin.

MS. BURNETT: Mm-hmm.

MR. GREGORY: If we can put up the, the debt figures now. You look over the
course of the Obama presidency. First, this is the, this is the total
debt. On Inauguration Day it was $10.6 trillion, now it's $11.9 trillion.
That's up 12 percent. We also have the deficit figures, where that has
gone up dramatically since the president came into office, $1.2 trillion,
now up at $1.4 trillion. What should be the priority, the debt or job
creation?

MS. BURNETT: That--well, there you go. I don't--and to be honest, I don't
think anyone knows the exact answer to that question. But I think one
thing is for sure, we're going to be borrowing a lot more money before we
fix this problem. I don't think there's anyway around that. They're going
to be extending unemployment benefits. Potentially the homebuyer, new
homebuyer tax credit. We're going to be borrowing a lot more money.
According to the administration, we're going to be borrowing more money
than we take in all the way through the year 2019. So we are going to
have a major issue there.

MR. GREGORY: Mm-hmm.

MS. BURNETT: And I think--I don't think there's anyway around that. No
massive new stimulus, but you should call things like homebuyer tax
credit, unemployment benefits stimulus, and we will be borrowing money to
do that.

MR. GREGORY: OK, we're going to leave it there. Erin Burnett, Andrew Ross
Sorkin, thank you both very much.

MS. BURNETT: Thank you.

MR. GREGORY: Coming next, can President Obama quiet his critics and conquer
his many political challenges? Our political roundtable weighs in on it
all: Jane Mayer, Dan Senor, Joe Scarborough and Tavis Smiley. Plus, our
MEET THE PRESS Minute, another swine flu outbreak 30 years ago. Only on
MEET THE PRESS.

(Announcements)

MR. GREGORY: Insights and analysis from our political roundtable after this
brief commercial break.

MR. DAVID MR. GREGORY: We are back and joined now by Tavis Smiley, Joe
Scarborough, Dan Senor and Jane Mayer.

Welcome to all of you. Well, we already got started before we came on the
air. There's just so much to get to. Let me start with a really hot topic
this week, something you talked about, Joe, and a lot of people were
talking about, which was the president taking on his critics now in a
very aggressive way, whether it's on policy, whether it's on ideology,
ranging from the Chamber of Commerce to Fox News. This is how Politico
reported it on Wednesday: "President Obama is working systematically to
marginalize the most powerful forces behind the Republican Party, setting
loose top White House officials to undermine conservatives in the media,
business and lobbying worlds. With a series of private meetings and
public taunts, the White House has targeted the U.S. Chamber, the
biggest-spending pro-business lobbying group in the country; Rush
Limbaugh, the country's most-listened-to conservative commentator; and
now, with a new volley of combative rhetoric in recent days, the
insurance industry, Wall Street executives and Fox News. Obama aides are
using their powerful White House platform, combined with techniques honed
in the 2008 campaign, to cast some of the most powerful adversaries out
of the mainstream and their criticism as unworthy of serious discussion."
I want to single out Fox News in this instance in terms of the president
trying and the White House trying to effectively marginalize that
organization. Anita Dunn appeared on CNN last week and said the
following: "The reality of it is that Fox News often operates almost as
either the research arm or the communications arm of the Republican
Party. ... Let's not pretend they're a news network." Joe Scarborough,
why is the White House doing this, and is it working for them?

MR. JOE SCARBOROUGH: Well, I think it's working with them with their
base. And right now, with them moving toward the middle on public options
and triggers, maybe that's their strategy. That's part--one of their
strategies. But part two, the one, one--the, the part of the strategy
that didn't work is getting the media to back off of the Fox News
stories. That is the key. That's what's concerned them. Whether it's
ACORN or Van Jones, the mainstream media has eventually followed Fox News
into some of these controversies and they want that--them--that to stop.
Listen, it's not change. But as James Carville said at the speech I was
with, with him, Washington always wins. And in the end, you know, you got
to play hardball, and that's exactly what they're doing.

MR. GREGORY: Tavis Smiley, you wrote a book about accountability. Is he
living up to--the president, I mean--to the campaign pledge of rising
above the fray of Washington, of changing the tone of Washington, which
the--President Bush promised as well?

MR. TAVIS SMILEY: I think we can all agree on this one point: So much for
civility here in Washington, number one.

MR. SCARBOROUGH: Yeah.

MR. SMILEY: Number two, I think this Fox News thing, quite frankly, is a
distraction. To give them this much attention, this much focus, I mean,
they are one network that has nothing to do with your agenda, I think is
a distraction. Number two, and third, to your point about accountability,
I still think President Obama's instincts are good. But the only way he's
ever going to become a great president is if he gets pushed into being a
great president by being held accountable. Great presidents aren't
made--I mean, they're not born, they're not born, they're made. They're
made when we push them into being accountable. There is no Lincoln
without Frederick Douglass, there is no FDR without Eleanor and A. Philip
Randolph, there is no LBJ without Dr. King. Great presidents have to be
pushed into their greatness. We the American people hold him accountable,
he becomes a great president.

MR. GREGORY: Right.

MR. SMILEY: Left to his own devices, he's not living up to expectations.

MR. GREGORY: All right, but--wait a--but, Jane Mayer, in August, the, the
heat of the healthcare debate...

MS. JANE MAYER: Uh-huh.

MR. GREGORY: ...and the White House is getting pummeled.

MS. MAYER: Right.

MR. GREGORY: And the criticism was, "Guys, you got to stand up here, you have
to answer all of this." So wait a minute. They're, they're answering it.

MS. MAYER: Right.

MR. GREGORY: They're taking on their critics in an aggressive way.

MS. MAYER: It's like they can't win either way. When they answer it,
they're just...

MR. GREGORY: But was it--is it the right thing to do?

MS. MAYER: Well, I mean, I think it--the thing that it is, is the
traditional thing to do. It--so much is being made of this as if it's
some kind of new playbook. Basically, if you go back through presidential
history, FDR and, and Nixon and Spiro Agnew, and, and certainly Bush and
Cheney, they--they've all had their fights with the press. They don't
like the coverage they get, they try to marginalize the people who write
the stories they don't like and say that they're not part of the
mainstream. So I don't really see this as that different. I mean, I, I
covered Reagan and I had Larry Speakes saying to me, "You are out of
business," you know, when I wrote some story for The Wall Street Journal
they didn't like.

MR. SCARBOROUGH: Wait, but Spiro Agnew, though--and here's the thing.
Spiro Agnew, Richard Nixon, these people you named, they didn't promise
to change Washington. They didn't say they were going to be
post-partisan. I think that's why it's, it's so surprising coming from
this White House.

MS. MAYER: Well, I mean, you can't be Gandhi if you're going to be tarred
every day in feathers and, and, and, you know, and...

MR. SCARBOROUGH: Unless you promise to be Gandhi.

MS. MAYER: ...so--well...

MR. SCARBOROUGH: Which, which Nixon never promised to be Gandhi.

MR. GREGORY: All right.

MS. MAYER: I mean, maybe what, maybe what we're seeing is the reality of
Washington...

MR. SCARBOROUGH: Right.

MS. MAYER: ...requires a fight on both sides.

MR. GREGORY: Dan Senor.

MR. DAN SENOR: I would just say, I remember when Obama won, the big
question at Fox News and conservative talk radio is they had spent so
many years, many would argue, cheerleading for the Bush administration.
Suddenly Bush was gone, so much of their audience would be affected, you
know, from the lack of access that the--that this--the, the conservative
media would have with this new administration. Now, I haven't seen Roger
Ailes playbook, but I would bet one of the ideal scenarios would be is
just as President Obama's popularity is turning, "If we can just get
Obama to attack us."

MS. MAYER: Right.

MR. SCARBOROUGH: Right.

MR. SENOR: "If we can just get the Obama White House to take us on
directly"...

MR. SMILEY: And, and it, and it's working.

MR. SENOR: ..."that could turn things dramatically." And...

MR. GREGORY: Well, let's...

MR. SMILEY: And it's working, it's working.

MS. MAYER: It's great for Fox.

MR. SCARBOROUGH: Well, well, not, not just for Fox.

MR. SENOR: Yeah.

MR. SMILEY: It's working. Their rating, their ratings are going through
the roof...

MS. MAYER: Right.

MR. SMILEY: ...in part because the White House keeps focusing too much
attention on them.

MR. SCARBOROUGH: And, and here's the fascinating thing. Rush Limbaugh,
attacked by the White House in January--I know it because I'm in radio
and we look at it month to month--his February, March, April ratings
explode. Fox News right now, you can tell by looking at the ratings
starting at 5 AM, America's waking up in the morning, click, they turn on
Fox News.

MR. SENOR: But I...

MR. SCARBOROUGH: Because they've been engaged, they're giving them a
bigger megaphone. It's stunning.

MR. SENOR: I would say, though, that the White House had probably
expected it to ramp--amp up the conservative base. And as you said, it
would be good for the liberal base. I don't think what they anticipated
is the degree to which the mainstream media is getting a little
uncomfortable with these attacks on Fox, as you saw this week.

MR. SCARBOROUGH: No, they're, they're not seeing a little, it's a big
push-back.

MR. GREGORY: All right, let me, let, let me get into some, some actual policy
here, and the public option is apparently back. You heard Senator
Schumer, Joe, say, and this was news, that Leader Reid is close to
getting 60 votes in the Senate for healthcare reform that would include
the public option. What brought it back?

MR. SCARBOROUGH: Well, I, I can, I can tell you it's been very confusing.
Headlines on Tuesday said public option's dead; headlines on Wednesday,
public option's alive. Headline--headlines this morning, The New York
Times, public option, dead. And Dan Balz, Washington Post, says public
option alive. This is where we're at: Harry Reid this morning has 57
votes. He's got 57 votes for the opt-out, the state opt-out. The
president, at the White House right now, wants to go with the trigger.
Huffington Post this morning had, had, had an article and they've got
some great insights on, on some other areas, about how liberals are angry
because the Obama White House is moving toward the trigger. And, and what
does a trigger do? A trigger says, "We're not going to have a public
option unless health care--insurance companies don't step forward."

MR. SENOR: But...

MR. SCARBOROUGH: That gives Blue Dogs cover to run in 2010 saying, "Hey,
wait a second, there's no government takeover here."

MR. SENOR: But here's where...

MR. SCARBOROUGH: In fact, nothing happens if insurance companies are
responsible. That's what Barack Obama wants...

MR. GREGORY: Right.

MR. SCARBOROUGH: ...that's what the White House wants and that's where
we're going to end up.

MR. GREGORY: But, but, well, but, Tavis, let me tee you up. Here's the cover
of Newsweek that I think gets to a lot...

MR. SMILEY: Right.

MR. GREGORY: ...some of the liberal complaints about this White House. And
the cover says, "Yes, He Can, But He Sure Hasn't Yet: A Liberal's
Survivor Guide." And they write this: "A year [into Obama's
presidency]"--this is by Anna Quindlen--"and we know that we deceived
ourselves. He is methodical, thoughtful, cerebral, a believer in
consensus and process. In an incremental system, Obama is an incremental
man. It is one reason he is taking his time ending the two wars in which
we remain mired. ... The president is a person of nuance. But on both
ends of the political number line, nuance is seen as wishy-washy. There's
no nuance in partisan attacks, soundbites, slogans, which is why Barack
Obama didn't run with the lines `Some change you might like if you're
willing to settle' or `Yes, we can, but it will take a while.'" Tavis:

MR. SMILEY: I think we voted for this president because we believed in
his character. The question now is does he have courage, does he have
conviction and does he have commitment? Back to Joe's point about the
public option. This has been reported in the press, Senator Schumer
confirmed it for us in the, in the makeup room a moment ago, that in that
meeting with Reid at the White House, the president did not take a
position in that meeting with these senators on the public option. The
only way this thing is going to succeed is if the president leads on this
issue.

MR. SCARBOROUGH: I, I, I've got to say, though...

MR. SMILEY: He--hold on.

MR. SCARBOROUGH: No, but he did actually take a position in that meeting,
though.

MR. SMILEY: He--but, but, Joe, he, he campaigned, he campaigned, he
campaign--not--he campaigned on this issue. And the only way it's going
to get done is if he gets out and fights for it...

MR. GREGORY: Well--right.

MR. SMILEY: ...and not leaves it to the Senate.

MR. GREGORY: But he doesn't, he doesn't want to fight for it, Dan, because
he--what he wants is 60.

MR. SENOR: Right.

MR. GREGORY: He wants 60 votes.

MR. SENOR: Right.

MS. MAYER: And that's the other part of the Quindlen--I'm sorry...

MR. GREGORY: Right.

MS. MAYER: ...story, is that she's saying basically that the, the way the
Constitution is, is written, they need 60 votes. So it's, it's not, it's
not as if Obama created the math here...

MR. GREGORY: In other words, if he campaigns for it, he's going to
marginalize perhaps Olympia Snowe, perhaps Ben Nelson and others.

MS. MAYER: He just wants a deal. They want any deal.

MR. SENOR: All this, by the way...

MR. GREGORY: Yeah.

MR. SENOR: All this, by the way, when he's about to alienate his base
with a decision on Afghanistan, which I think is going to result in an
increase in troops.

MR. SCARBOROUGH: And he is.

MR. GREGORY: Yeah.

MR. SENOR: But I will say one other point. The notion that this breakdown
and this need to reach a consensus started with health care is absurd.
He--President Obama had the opportunity with the stimulus vote to take
some Republican ideas--he didn't have to take all of them, some
Republican ideas--and he would have gotten some Republican votes, and
Republicans would have owned the stimulus as much as the Democrats, and I
think it would have had an impact on the current debate over health care.
And he chose to go with a straight-line party vote.

MR. SMILEY: But, but, but...

MR. SENOR: And I think that has inhibited him every step of the way,
including now.

MR. SMILEY: But back to, back to Jane's point, he wants 60 votes. But 60
votes for what? What kind of bill are we going to get here?

MR. SENOR: Well, I...

MS. MAYER: Something...

MR. SMILEY: If we're not going to get a bill with a public option, what
does it mean?

MS. MAYER: Something that he can call reform. I mean, and that is--I
mean, and...

MR. SMILEY: Something? What is that?

MS. MAYER: Well, I mean, but is it really--you know, I mean, I just
wonder, is it really all the White House's fault, or do you think maybe
some of the responsibility...

MR. GREGORY: OK. All right.

MS. MAYER: ...rests in Congress here?

MR. GREGORY: Let me--final point on this, and I want to talk Afghanistan.

MR. SCARBOROUGH: Really quickly, just he headline here is...

MR. GREGORY: Yeah.

MR. SCARBOROUGH: ...from everybody I've talked to, that was in that
meeting--actually I, I know what Senator Schumer said. But the president
is letting it quietly be known, "We want the trigger."

MR. GREGORY: Mm-hmm.

MR. SCARBOROUGH: "We want the trigger, because that provides cover for
the Blue Dogs. That also gives us change if"--that is where we're going.
And Harry Reid will not get 60 votes with an opt-out, he will with a
trigger.

MR. GREGORY: All right, let--I want to, I want to get to Afghanistan. I also
want to talk about politics before we run out of time.

Dan Senor, the debate this week between Dick Cheney and the White House;
we showed earlier on former vice president's criticism that this
president is dithering on strategy. Robert Gibbs, the press secretary,
fought back, talking about taking on his enemies this week.

MR. SENOR: Mm-hmm.

MR. GREGORY: This is what he said.

(Videotape)

MR. ROBERT GIBBS: Well, I think it's, it's a curious comment, given I
think it's pretty safe to say that the vice president was, for seven
years, not focused on Afghanistan. What Vice President Cheney calls
"dithering," President Obama calls his solemn responsibility to the men
and women in uniform and to the American public. I think we've all seen
what happens when somebody doesn't take that responsibility seriously.

(End videotape)

MR. GREGORY: It's on the table. Discuss.

MR. SENOR: Well, I, I would say, first of all, I think you need to
separate--I mean, this administration's a little too obsessed with Vice
President Cheney. Every time he gives a speech, they hold press
conferences to respond. Look, you need to separate Vice President Cheney
from the criticisms. What is the substantive criticism? The substantive
criticism by many people, including myself, is that in March of this year
the president announced a new Afghanistan strategy which included a troop
increase, which included firing his general, David McKiernan, and
replacing him with General McChrystal, who--and his reason for picking
McChrystal is because he wanted a general who's committed to winning,
committed to real counterinsurgency. A few months later in, in August of
this year, August 17th, he gave that big speech before the VFW, and he
said this was a war of necessity. That was three days before the Afghan
election. You talk to anyone in the administration back then, they knew
then, when Obama said that, that the Afghan elections were going to be
corrupt.

MR. GREGORY: But can't...

MR. SENOR: And now here we are. I don't want to use the dithering, but
now there are all these big questions. And by the way, I would say this.
The NATO defense ministers have just endorsed the McChrystal strategy.

MR. SCARBOROUGH: Well, of course they have.

MR. SENOR: Prime Minister, Prime Minister...

MR. SCARBOROUGH: No, no, of course they have. I, I read that headline and
I started laughing. The Germans won't even go out and fight at night. Of
course they want our people to go out and die.

MR. SENOR: No. Hold on, Joe, Joe, Joe, Joe, Prime Minister Gordon Brown,
Prime...

MR. SCARBOROUGH: "Send more U.S. troops to die so we don't have to."

MR. SENOR: No, that's not fair. Prime Minister Gordon Brown just, just
announced a troop increase.

MR. SCARBOROUGH: It's very fair.

MR. SENOR: Gordon Brown, this war is unpopular in the U.K., he's up for a
tough election, he announced more troops. So it's understandable to say
when our allies are supporting us and stepping up with more numbers, we
are...

MR. SCARBOROUGH: So...(unintelligible)...now?

MR. GREGORY: Remember--hold on, hold on, hold on one second. I want to inject
something into, into the debate here, which is how do we fight the
Taliban? How do we fight al-Qaeda? Jane Mayer, you did a very provocative
piece in The New Yorker this week, very interesting, that sort of takes
on a key element of our current strategy with using these Predator
drones, unmanned aircraft, to go out and shoot the bad guys and kill
them.

MS. MAYER: Right, right.

MR. GREGORY: And you write this: "It's easy to understand the appeal of a
`push-button' approach to fighting al-Qaeda, but the embrace of the
Predator program has occurred with remarkably little public discussion,
given that it represents a radically new and geographically unbounded use
of state-sanctioned lethal force. And, because of the CIA program's
secrecy, there is not visible system of accountability in place, despite
the fact that the agency was--has killed many civilians inside a
politically fragile, nuclear-armed country with which the U.S. is not at
war. Should something go wrong in the CIA's program--last month, the Air
Force lost control of a drone and had to shoot it down over
Afghanistan--it's unclear what the consequences would be." And yet, Vice
President Biden wants more reliance on exactly this program.

MS. MAYER: Right. These drones are--have been more and more seen as a
panacea, and there are more and more drone strikes taking place. There
was one just yesterday, also, that killed 17 to 20 people, I think, in
Pakistan. It's a secret war, basically. And it's interesting, because it
is taking place in Pakistan, where we're not at war. It's not like the
military in Afghanistan and, and Iraq, which are using drones, and that's
just part of regular warfare. But...

MR. GREGORY: The fundamental question that you raise by this kind of
journalism, which is what, in your mind?

MS. MAYER: Well, I mean, I--you know, the question for me is whether or
not this is an American way to fight terrorism.

MR. GREGORY: Right.

MS. MAYER: I mean, before 9/11, this country was very much against
targeted killing like this, and we condemned Israel for doing it. And,
and now we're very much in favor of it and it's having all kinds of
unintended consequences, according to critics.

MR. SMILEY: But either by...

MS. MAYER: It's taking out--the question is whether or not it's effective
in the long-term, because it's--it may be creating backlash against our
people because it's killing innocent people along the way.

MR. SMILEY: And I think, and I think that's the point. Either by Predator
drone or by individual targeted strikes, killing is killing and somebody
ought to say that, number one. Number two, it's going to be very
difficult for this president, with a peace prize, to be a war president
engaged in signing off on this kind of drone killing with a peace prize.

MR. SCARBOROUGH: You say killing, you say killing...

MR. SMILEY: And thirdly, and thirdly, ultimately to Jane's point, this is
the kind of nonsense that turns future generations of people against our
country.

MR. SENOR: Absolutely.

MR. SCARBOROUGH: Right. And I think we all agree around this table that
killing is not killing. Because if you take out--like this assassination
program that you bring up that was so offensive to a lot of Democrats,
but they're for Predators. The difference is you have an assassination
program and we target one person and shoot them dead, we don't kill, as
Jane's piece showed, five-year-old girls, mothers, fathers. These
Predator strikes that Joe Biden--everybody from Joe Biden to George Will,
they think it's clean and sanitary, just like bombing in Vietnam. It's
not. You actually kill more people and you create more terrorists in the
future.

MR. SENOR: And if you look in Afghanistan where we are having some
success, in certain key areas like Nawa, which is a strategic, a key
strategic valley in the southern Helmand province, where there is
progress it is, is where we have, in Nawa, a thousand Marines who are
doing clear, hold and build. They are there to work with the Afghanis so
when the Taliban returns, the Afghanis come to our guys and say, "Help,
we need security." We've got boots on the ground and we can actually work
with them. Not by blowing up their villages and killing all their women.

MR. GREGORY: OK.

MS. MAYER: I hate to say that--it seems like nation-building is the one
thing that, that everybody thinks is really required in Afghanistan. I
hate to say it because, you know, we don't--it's not necessarily what
soldiers do the best.

MR. GREGORY: All right. Let--I've got about a minute left here. I want to
talk politics here. Joe Scarborough, there seems to be, within the
Republican Party, a litmus test going on. You had Sarah Palin on Facebook
endorsing the conservative independent candidate in New York for that
congressional seat in the 23rd district.

MR. SCARBOROUGH: Mm-hmm.

MR. GREGORY: Is this what's going on inside the Republican Party, this sort
of run to see who can be the most conservative as a means of retaking
power in 2010?

MR. SCARBOROUGH: Well, it, it depends. How could any Republican, how
could--let me strike that. How could any conservative be against the
person that the Republican establishment in D.C. is for if they're
conservatives? This woman, this Republican candidate, is for card check.
She was for the Obama stimulus package. She has voted for taxes. I mean,
she's been one of David Paterson's best allies. Why would a conservative
support that Republican? This is, this is just one more example of how
the Republican Party in Washington, D.C., is so disconnected from
conservatives.

MR. SENOR: You're seeing a revolt all over the place. In Joe's state, in
Florida...

MR. SCARBOROUGH: And, and I'm saying...

MR. SENOR: ...Marco Rubio, who's running against Charlie Crist for the
U.S. Senate...

MR. SCARBOROUGH: Yeah.

MR. GREGORY: Right.

MR. SENOR: ...the Republican establishment in Washington rallied behind
Charlie Crist because he was supposed to deliver the general election.
Suddenly the polls in the Republican primary are closing, all the
Republican primary conservative support is getting behind Marco Rubio,
who's the start-up candidate.

MR. SCARBOROUGH: And by the way, people love...

MS. MAYER: This can't be good for the Republicans that have their own
base being fractured, is it?

MR. SCARBOROUGH: No. It's great for the Republican Party because...

MR. SENOR: It's fantastic for the Republican Party.

MR. SCARBOROUGH: ...when I, when I ran in 1994, the Republican Party on
the state, national and local level tried to run against me a moderate
Republican. And I'm not talking, I'm not talking abortion or gay
marriage, I'm talking taxes and spending, small government. That's great
to reinvigorate the base.

MR. GREGORY: All right. And the president's out there for two big governor's
races in New Jersey and Virginia this week, which a lot of people will
see as some kind of referendum. We're going to leave it there. Thanks to
everybody very much.

We're going to continue our discussion with Andrew Ross Sorkin and Dan
Senor about their new books in our MEET THE PRESS Take Two Web extra
that's up this afternoon. You can also read excerpts of "Too Big To
Fail," that's Andrew's book, and "Start-Up Nation" by Dan. Plus, look for
updates by me throughout the week. It's on our Web site, mtp.msnbc.com.

Up next, our MEET THE PRESS Minute from 1977, a disastrous response from
Washington to another swine flu outbreak. Only on MEET THE PRESS.

MR. DAVID MR. GREGORY: We're back with our MEET THE PRESS Minute. Late Friday
night, President Obama declared the H1N1 flu outbreak a national
emergency. After more than 1,000 deaths in this country from an outbreak
that has sickened millions and hospitalized more than 20,000 Americans,
the president has now given his health secretary extraordinary powers to
suspend federal guidelines in hospitals and speed up access to treatment.

Just over 30 years ago there was another swine flu outbreak in this
country. Many call the government's response back then a disaster. After
a handful of soldiers at Fort Dix fell ill with the disease, the Ford
administration immediately called for a mass immunization, concerned the
virus would spread and kill millions like the Spanish flu pandemic of
1918. Within two months 40 million Americans had received immunization
shots, but the pandemic never came. Rather, the vaccine was believed to
have caused multiple cases of the paralytic condition Guillain-Barre
Syndrome. Appearing on MEET THE PRESS in March of 1977, the new Secretary
of Health and Education and Welfare Joseph Califano Jr. spoke about the
failure of the program and the subsequent distrust of any government
vaccination effort.

(Videotape, March 20, 1977)

MS. CAROLE SIMPSON: Mr. Secretary, the swine flu mass immunization
program was a disaster from start to finish. And I have a two-part
question; first of all, to find out whether your agency, given the same
information as was given the agency a year ago, would have embarked upon
such a program? And secondly, what are you going to do now that the
American people have really become frightened by mass immunization
programs, and, and what are you going to do if, if we have a similar
vaccine in the future that might be necessary to be given to the people?

SEC'Y JOSEPH A. CALIFANO JR.: Ms. Simpson, I, I am not prepared to say
what I would have done had I been in the government a year ago. It is not
clear to me in what ways different decisions would have been made. I
intend to look at that thoroughly and carefully, because I think that
kind of public health decision is one of the most difficult a secretary
has to make. The greatest damage the swine flu program has done, aside
from the human tragedy of the individuals paralyzed and killed, has been
the impact on immunization programs, particularly for children. There are
16 million children in this country under the age of 14 who have not been
immunized against polio, and a large part of that is attributable to the
people's fear about immunization programs. We've got to restore
confidence. The first step we've taken has been to open up the entire
process for selecting the vaccines for next year. We've done that. We
haven't made the selections yet, but every fact that's relevant to that
will be available to the public. We also intend to have a substantial
stepped-up program of education for children and parents in the
immunization area and, and to try and get the children of this nation
immunized.

(End videotape)

MR. GREGORY: The CD says--CDC says the current swine flu vaccines has been
thoroughly tested and is safe. No related illnesses have been reported,
although there have been production delays. Initial estimates said as
many as 120 million doses would be available by mid-October. As of
Wednesday, only 11 million had been shipped. And we'll be right back.

MR. DAVID MR. GREGORY: Finally here, as personally disturbing as this is to
watch, I want to show you a baseball highlight from this week that broke
my heart. I was there in person to see Jimmy Rollins of the Phillies do
that to my Dodgers. So as much as this pains me to say, I do want to
congratulate the Phillies and their fans on returning to the World
Series, which begins Wednesday. And wait until next year.

That's all for this week. If it's Sunday, it's MEET THE PRESS.

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