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Video: Exclusive on financial crisis; same- sex marriage debate resparked

updated 5/13/2012 1:19:23 PM ET 2012-05-13T17:19:23

DAVID GREGORY:

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This morning, a two billion dollar blunder.  The nation's biggest bank JPMorgan chase lost big on a risky trading bet, raising new questions and fears about whether Wall Street has changed at all since the financial collapse.  How did this happen?  And will it give new ammunition to Washington regulators who want to change the way the big banks work?  This morning my exclusive interview with the man at the center of the storm, the bank's CEO, Jamie Dimon, who also talks about the economy and the 2012 campaign.

Plus - reaction and perspective from Andrew Ross Sorkin of the New York Times and CNBC, as well as Senator Carl Levin who is spearheading financial reform on Capitol Hill.

Then the gay marriage debate.  It all started here last Sunday with the vice president.

(videotape)

VICE PRESIDENT JOE BIDEN:

I am absolutely comfortable with the fact that men marrying men, women marrying women, and heterosexual men and women marrying another are entitled to the same exact rights, all the civil rights, all the civil liberties.

(end videotape)

DAVID GREGORY:

Within days, the president changed his view, as well, making history and headlines.  The big questions now - has anything changed? And how will the president's support for gay marriage impact the presidential race? With us, Chairman of the Republican Party Reince Priebus

And analysis from our roundtable.  MSNBC's Chris Matthews, from the Washington Post Jonathan Capehart and columnist Kathleen Parker, Democratic Lieutenant Governor of California Gavin Newsom and from the American Conservative Union, Al Cardenas.

(INTRO OMITTED)

DAVID GREGORY:

A few weeks ago, you dismissed all of this as a quote "tempest in a teapot."  You've changed your view about this.  How much worse will this get?

                                                

JAMIE DIMON:

So first of all, I was dead wrong when I said that.  I obviously didn't know, 'cause I never would have said that.  And one of the reasons we came public was because we wanted to say, "You know what?  We told you something that was completely wrong a mere four weeks ago.  And— we took a $2 billion loss.  And we made it clear it could get worse before it gets better.  You know, could vol-- be volatile by a billion dollars possibly."  I do-- I do want to put it in perspective, the company is going to earn a lot of money this quarter.  And so it's a very strong company.  We made a terrible egregious mistake.  There's almost no excuse for it.

                                                 

DAVID GREGORY:

So how did this happen?  There were reports about questions that were being raised about the kind of hedging that J.P. Morgan was doing.  Did you ignore warning signs about this?  Were you in denial about it?  Did you just miss it?

                                                 

JAMIE DIMON:

No, I think-- somewhat-- first of all, it was one warning signal.  If you look back from today,

there were other red flags.  That particular red flag, you know, we made a mistake.  We got very defensive.  And people started justifying everything we did.  And, you know, the better thing in life is to say, "Maybe you made a mistake, let's-- let's dig deep."  And the mistake had been brewing for awhile.  So it wasn’t just any one thing.

                                                 

DAVID GREGORY:

The-- immediate question, the S.E.C. is looking into this, did the bank break any laws? Did it violate any accounting rules or S.E.C. rules?

                                                 

JAMIE DIMON:

So we've had audit, legal, risk, compliance, some of our best people looking over that.  We know we were sloppy.  We know we were stupid.  We know there was bad judgment.  We don't know if any of that's true yet.  And of course regulators should look at something like this.  That's their job.  So, you know, we are totally open with regulators.  And they will come to their own conclusions.  But we intend to fix it, learn from it, and be a better company when it's done.

                                                 

DAVID GREGORY:

In the simplest way you can, what was-- what you called a screw up, what was the screw up?

                                                 

JAMIE DIMON:

Yeah, so banks either make loans or invest the money in securities.  We have a huge securities portfolio.  We're a big bank.  In fact, the securities portfolio does have an unrealized gain of $8 billion.  But in how we manage that portfolio, we did lose $2 billion trading.  And-- and in hindsight, we took far too much risk.  The strategy we had was badly vetted.  It was badly monitored.  It should never have happened.

                                                 

DAVID GREGORY:

So here you are, Jamie Dimon.  You've got a sterling reputation.  Why?  Because people say, "He knows how to manage risk better than anybody."  You're known as the guy who ably led J.P. Morgan/Chase through the worst financial collapse since The Great Depression.  How does a guy like you make this mistake?

                                                 

JAMIE DIMON:

You know, anyone in business knows you always make mistakes.  So you just said that about me.  I've never said that.  If you read all my chairman's letters, we always talk about what we did wrong.  Always what we did wrong, how we can get better.  No one in business doesn't make mistakes.  And so this is a terrible mistake.  I'm not making an excuse for that.  But I know we're going to make mistakes.  I just-- you know, when you're in this kind of job, you hope they're small and few and far between.  This one was far too big.

                                                 

DAVID GREGORY:

But if this happened at J.P. Morgan/Chase, which really understood how to manage risk, what about all the other banks out there?  If somebody else had made-- a mistake like this, would we be, again, talking about "too big to fail" and taxpayer bailouts.

                                                 

JAMIE DIMON:

Yeah, so that-- that's an important point.  So we-- we support getting rid of "too big to fail."

And it's very important that-- and this is not-- this is a-- not going to even remotely-- we're going to make money.  We've got tons of capital.  But we support "too big to fail."  We want the government to be able to take down a big bank like J.P. Morgan.  And it could be done.

We think Dodd-Frank, which we supported parts of, gave the F.D.I.C. the authority to take

down a big bank.  And when it happens, I believe compensation will be clawed back, the board should be fired-- the-- the equity should be wiped out, and the bank should be dismantled, and the name should be buried in disgrace.  That's what I believe.  We need to put that back in the system.  And we're working with the regulators to try to get that back in the system.

                                                 

DAVID GREGORY:

But you have been the most outspoken advocate, saying there's too much financial regulation. That Washington doesn't understand it.  You oppose the Volcker Rule, which says just this. That a bank should not be betting its own money to perhaps enrich itself.  It should only be trying to manage or minimize losses.

                                                 

JAMIE DIMON:

Yeah, so that's all completely untrue.  And by the way, if anyone wants to go check the

documents that I actually write every year, my chairman's letter, which I write myself.  I get help.  We have supported 70% or so of Dodd-Frank. We supported resolution authority.  We supported higher capital and liquidity.

J.P. Morgan always had higher capital and liquidity.  That's partially to make up for mistakes and problems and, you know, obviously it's a tough economy.  We support an oversight committee.  We supported some of the compensation-- new compensation rules, but we've already followed most of them.

                                                 

DAVID GREGORY:

Why wouldn't the new regulation that's being talked about, changing the way banks do

business, changing the way banks can quote unquote "hedge their bets," why wouldn't that have stopped something like this?

                                                 

JAMIE DIMON:

Well-- specifically, hedging should make your bank less risky.  In this particular case, we made-- a terrible mistake.  You know, our biggest exposure, you know what they are?  Loans.  I mean, you're-- you're not going to make banks risk free, but we agree with a lot of the standards that are going to make it safer.  And I feel-- I actually think a lot of things in Dodd-Frank will accomplish that purpose.

                                                 

DAVID GREGORY:

Have you given regulators new ammunition against the banks?

                                                 

JAMIE DIMON:

Abs-- absolutely.  This is a very unfortunate and inopportune time to have had this kind of mistake, yeah.

                                                                          

DAVID GREGORY:

But if the best of the best can't manage a risk like this, does it not tell you that the banking system is still several years after the financial collapse too risky?

                                                 

JAMIE DIMON:

I don't think so.  I mean, you know, we're-- it's a fun-- it's-- the question is size.  This is not a risk, which is life threatening to J.P. Morgan.  This is a stupid thing that is-- you know, that we should never have done, but we're still going to earn a lot of money this quarter.  So it isn't like the company's jeopardized.  We-- you know, we hurt ourselves and our credibility, yes.  And that we-- we gotta fully expect and pay the price for that.

                                                 

DAVID GREGORY:

Before the big news this week about JPMorgan’s $2-billion dollar loss - I sat down in Columbus, Ohio, with Mr. Dimon for a broader interview about the economy, politics, and America's growing frustration about big banks.

(videotape)

DAVID GREGORY:

A lot of Americans-- are galled by the fact that the American worker is still struggling. And yet, banks like yours, are making a lot of money.  Your compensation north of $20 million has been published in reports.  Do you understand that frustration?

                                                     

JAMIE DIMON:

Sure.  You know, I-- people who ask me what I’ll tell ya about Occupy Wall Street.  And I've said, surprisingly, if the average American has the right to say that "the institutions of America let me down," and that's true.  I think if the average American says that's predominantly Washington and Wall Street, broadly defined, I think that's true, too.  You know?  Washington and Wall Street are the epicenter.  I blame both of them.

I mean, there are a lot of policies and procedures.  I think when you go beyond that and start to blame every single bank or every single politician or every single bank, no, it's not true.  A lot of banks were a port in the storm.  Not all the banks needed to be bailed out.  A lot of 'em did things like Bear Sterns, WaMu, We-- Wells Fargo bought Wachovia and did everything to help.  Financing cities, states, hospitals.

So that should be recognized, too.  So I understand that frustration.  I understand they're

frustrated in-- in equity.  I think the world-- we-- we've become a little more inequitable.  I

think it's a good long-term thing for society.  And therefore, I'm in favor of progressive taxation.  You know, you can get into the specifics exactly--

                                                     

DAVID GREGORY:

The Buffet Rule, for instance.

                                                     

JAMIE DIMON:

Well-- but I don't-- understand the Buffet Rule, exactly.  But if you said--

                                                     

DAVID GREGORY:

More taxes on capital gains.

                                                     

JAMIE DIMON:

Believe it or not, I think most people on Wall Street would be happy to pay, you know-- to have the Bush tax cut go away and pay higher-- capital gains if they thought it was part of a plan to fix everything.  I do believe that.  And that's why-- in-- in effect, tax 'em-- attacking is not the right thing.  Because they're willing to do their part.

Matter of fact, I think you should appeal to people's better nature.  And say, "Listen, you're— you're well-paid.  You benefited from this great country.  We need you to give a little bit more for now, to li-- to help lift the country up."  So anyway, I do understand the anger.  But-- we need solutions.  You know, finger pointing, scapegoating, yelling and screaming, I've never seen it fix something.

                                                     

DAVID GREGORY:

But what about accountability?  I mean, you know, there-- the stories about the-- the bank

fees, you know?  ATM fees being passed onto consumers.  More regulation?  Well, it's going to be passed onto the consumer.  You know?  You-- you hear it over and over again from critics that say, "You know what?  Wall Street brought down the economy.  Nobody's gone to jail."

                                                     

JAMIE DIMON:

Yeah, there-- there--

                                                     

DAVID GREGORY:

Is that a misplaced criticism?

                                                     

JAMIE DIMON:

No, there is a sense that there's no been-- no—what’s the -- Old Testament-- justice here.  That no one w-- was punished.  And look, I think there-- you can-- say, "These bad actors should be punished.  Go punish the bad actors."  I think when you say that Wall Street-- well, I-- I think the-- that's not true.  Not everyone on Wall Street was bad.  Not-- not all media's bad.  I like you.

You know, I trust you, actually.  The-- you know, not all politicians are bad.  There's some

fabulously smart, bright people, you know, in Washington.  So I-- I don't like this attitude that's just, "Blame everybody."  Go-- if you think someone did something wrong, go get those people that did something wrong and blame them.  In the meantime, the rest of us should hold hands, get together, collaborate, business and government together, to fix the problem.  It's going to be very hard for government to do this on its own.  And business can't do it without collaborating with the government.

                                                     

DAVID GREGORY:

Let's talk about the economy.  And probably the biggest political economic question of this campaign.  Is America better off now than it was four years ago?

                                                     

JAMIE DIMON:

Oh, that's a really good question.  L-- can I give you a little historical context?  America is-- has the best economy in the world, the best military, the best universities.  Our businesses are the envy of the rest of the world.  I'm talking about small, medium, and large.  Widest and deepest, most transparent capital markets, and the most hard-working entrepreneurial workforce.  And I'm talking entrepreneurial from Steve Jobs to the factory floor.  We have-- we have-- a pretty good-- we were dealt a pretty good hand.  And the economy's getting stronger.  It's very hard to measure it versus four years go.

                                                     

DAVID GREGORY:

But you have made the point that even if the economy's getting stronger, we could have been doing a lot better.  How?

                                                     

JAMIE DIMON:

Yeah, so let me go back a little bit.  Because we had a crisis.  We should acknowledge that.  I think President Bush and President Obama took extraordinary measures.  The old-fashioned American way.  They did a lot of things that maybe wouldn't have been done normally.  But I think they stopped a system from getting dramatically worse.  That's true.

I think in the last two years, and I could never prove this, the debt ceiling crisis, the failure to do anything on Simpson-Bowles-- I think if you travel around, and you should ask people yourselves, this huge regulatory push, and I'm not talking about financial.  I'm talking about just in general.  The lack of fiscal certainty, tax certainty.  I think those things have hurt the ability to grow.  We've been growing.  But I think it would have been faster, had we gotten some of those other basic things right.

                                                                        

DAVID GREGORY:

You supported President Obama.  You're a Democrat.  Still?

                                                     

JAMIE DIMON:

I-- I would call myself a barely Democrat, at this point.  And I didn't support anyone last time around.  I'm on the New York Fed Board.  I'm not allowed to.  But I am a Democrat, yes.

                        

DAVID GREGORY:

But-- so what happened?  Why barely a Democrat now?

                                                     

JAMIE DIMON:

I've-- you know, I've gotten disturbed at the-- some of the Democrats behave-- you know, anti-business behavior, the sentiment, the-- the attacks on work ethic and-- successful people.  And I-- I think it's very counterproductive.  So-- it doesn't mean I don't have their values.  I want jobs.  I want a more equitable society.  I don't mind paying higher taxes.  I don't mind lifting up our-- you know, I do think we're our brother's keeper.  But I think that, you know, attacking that which creates all things, is not the right way to go about it.

DAVID GREGORY:

But do you think this has been an anti-business administration?  We haven't seen that photo op in the Rose Garden of the president surrounded by you and others from the financial system and-- big industrialists and other CEOs saying, "We're in common cause here, in common e— effort to attack-- this recession"?

                                                     

JAMIE DIMON:

I think it's true to say we haven't had this true-- true common collaboration.  And I really

believe in collaboration.  I'm-- to me, it's not Democrat or Republican.  What is it that works to get America growing again, so that the mo-- so that the people can grow and get educated and have opportunity and jobs.  That is not Democrat or Republican.  So any Democrat or Republican that tells me they own that, they don't.

That is pra-- a practical thing.  I don't blame that on the president.  But I do think that the

Democrats were so tough on Republicans that, you know, you're seeing a little bit of that-- that give back, at this point.  And that-- I say you don't learn that at Harvard Business degree.  I learned that in-- the in the schoolyard.  You know, "You beat up my buddy.  I'm going to beat up yours."  So, you know, I-- I partially understand why it's partisan.  I wish they would all put their knives down and get back to work for the American public.

DAVID GREGORY:

And to you that's simple.  You've said that in the last couple of weeks.  There is a simple

political solution that would dramatically help the economy.  And that is this debt reduction deal.  Simpson-Bowles-- the Simpson-Bowles Commission, the president's debt reduction commission, that he did not push, Republicans opposed, and has gone nowhere?

                                                     

JAMIE DIMON:

Yeah.  Now you-- I don't know the inside story.  I've read all the stories.  Honestly, it's hard for me to tell.  I personally don't care.  And I wish they'd just split the-- split the difference in half, at one point.  But if you read-- I hope the American public reads Simpson-Bowles.   It is a fabulous roadmap for us to in-- fix and improve Social Security, and including means tested, to have fair taxation, which is progressive but gets rid of a lot of tax expenditures and entitlements.

And I think those things, if we do something like Simpson-Bowles, I think it'll show that America once again can come back.  They can make decisions.  I think it'll show that we're doing the right things.  And I think certainty around taxes and-- a more efficient tax system will help growth.  So I think you'll-- you'll fix the future problem, you'll-- you won't create a fiscal cliff now.  You'll fix a lot of the other issues.  And it'll show that America's back.  So we're going to have to do something like that.

(end videotape)

                                                                                        

DAVID GREGORY:

Joining me now is Senator Carl Levin who is the Democrats' top watchdog on these matters as chairman of the investigation subcommittee and New York Times financial columnist, CNBC's Andrew Ross Sorkin.  He also wrote the book Too Big to Fail.  Welcome to both of you.  Senator Levin in Michigan and Andrew here.  Senator, I want to start with you.  As you react to what you heard from Jamie Dimon where does this go next?

                                 

SENATOR CARL LEVIN:

It's going to the regulators.  They're going to decide by July whether or not we're going to have strong regulations as the law requires or whether or not those regulations are going to be under run by a massive lobbying effort from Wall Street to weaken the regulations.

To put a huge loophole into the regulations which would allow the kind of risky bets to be made which the law says should not be made.  We wrote a law.  They call it the Volker Rule at times.  Senator Merkley and I wrote the language in the bill that ended up in the bill.  And we prohibit the kind of bets that were made here.

And there's two exceptions.  One is hedging.  We define hedging.  And that's reducing risk, not increasing risk.  And we also allow market marketing.  And as you just heard from Mr. Dimon himself, this was not a risk reducing activity that they engaged in.  This increased their risk.  And so we've got to be very, very careful that the regulators here are not undermined by these huge effort to weaken the rule by putting in a huge loophole which is called portfolio hedging.

                                 

DAVID GREGORY:

Well, I'll get into that in just a second.  Do you accept Jamie Dimon's accountability for this?  You know, Elizabeth Warren, who is the chairwoman of the Congressional oversight panel on TARP has called for him to resign his post on the New York Fed while the regulatory regime is worked out.  What do you say about that?

                                 

SENATOR CARL LEVIN:

I think the issue here is the power of the banks and whether or not we're going to regulate those banks and put a cop back on Wall Street.  And I think this is an issue which is not involving personalities and should not involve personalities and so I don't get into that.  The issue is whether we are going to stick with the law as written, which will prevent us from bailing out banks again.  And the only way to do that is to make sure they don't take the kind of risks we're taking.

                                 

DAVID GREGORY:

What price should be paid?  Jamie Dimon said at the end of that interview we should pay a price for that.  What's the price?

                                 

SENATOR CARL LEVIN:

The price will be that they will lose their battle in Washington to weaken the rule.  That is the real price.  In terms of past activities, that's in the hands of people who are assessing whether or not there was any criminal wrongdoing.  That's till in the hands, as far as I know, of the Justice Department and the New Yorker prosecutors.

                                 

DAVID GREGORY:

Right.  So advantage now Washington regulators.  Right?  I mean you agree with him that he's created ammunition to regulators?

                                 

SENATOR CARL LEVIN:

Yes.  And the real problem here is the battle is not just between Washington and Wall Street, which is what your opening statement said.  The battle is inside of Washington.  Some of the regulators, we believe, including the ones who are regulating the trades, want to actually carry out the laws as written.  But some of the folks that regulate the banks--

(DAVID GREGORY:  UNINTEL)

                                 

SENATOR CARL LEVIN:

--and the treasury are willing to weaken the law.  And the draft rule has the loophole in it.  We're trying to reverse that draft rule and to make sure that it carries out the intent of the law as written.

                                 

DAVID GREGORY:

Let me bring in Andrew Sorkin.  Andrew, help us understand this more broadly.  This is complicated.  Why is it that Americans should really be taking notice as the rest of Wall Street and Washington is?

                                 

ANDREW ROSS SORKIN:

Well, the issue here in terms of why we should really care, the truth context is that a Jamie Dimon, who's been exalted, as you said in your interview with him, as one of the great risk managers, to make a mistake, we've got a problem because it means that other banks could also make a mistake.

And they could potentially make a mistake on a much grander scale.  And who gets left holding the bag if that happens?  The taxpayers.  That's what this is all about.  The question is are these institutions still a little too big to fail?  And in many cases, actually, I would say that this scenario suggests that they may still be too big to manage.

And that's what we're working against in trying to figure out how can we deal with all of this complexity?  The complexity's still in the system.  This was about credit default swaps.  That's what these trades were.  This is about betting with the company money.  This was a big of the casino element that we've been trying to pull back on since the crisis.

                                 

DAVID GREGORY:

And the risk in all of that, Jamie Dimon says, "Look, we're still making a lot of money this quarter.  We manage a huge portfolio that has made a lot of money.  J.P. Morgan Chase is not in danger of collapse.  It's just that we made a big mistake here."

                                 

ANDREW ROSS SORKIN:

It's a big mistake.  And, by the way, I give him enormous credit for coming out and saying, "Mea culpa."  I know a number of CEOs in the world who you would have never heard about this from until the the end of the quarter.  He came out and he went on the phone and he said, "We have a problem."  That's the good news.

The bad news is would other CEOs say that?  Would the system know that.  By the way, this was a $2 billion loss, which seems like a lot.  But this actually underscores the point.  It was $100 billion bet.  The firm had made a $100 billion bet that went down 2%.  The stock market can go up and down 2% in a week, unfortunately, these days.

But it becomes magnified because the bank is making such a big bet.  And the question is should the firms be able to make such a big bet?  In this case they thought they were hedging their risk.  They thought they were reducing their risk and they made a mistake and they were wrong.  But if they were wrong, others could be wrong to.

                                 

DAVID GREGORY:

Final point, Senator Levin.  What assurance can you give the American people that if regulators get everything they want, if there is the Volker Rule that changes the way these kinds of bets can be made, that this could have been prevented?

                                 

SENATOR CARL LEVIN:

Well, it could be prevented because these are the kind of bets that put us into the soup to begin with.  And if we can prevent these kind of bets from being made we can avoid ever again having to bail out banks.  And we bailed out this bank.  Tens of billions of dollars went to this bank before and we don't want that to happen again.  And that's why the regulators have got to be strong.  We can't allow Wall Street to undermine the regulation, which must be written if we're going to carry out the language, the specific language which is clear on this, in the Volker Rule.

                                 

DAVID GREGORY:

J.P. Morgan Chase has pointed out they didn't need that bailout money.  They took it over their opposition to it.  But your point is that if another bailout has to occur the stakes are enormous for the economy?

                                 

SENATOR CARL LEVIN:

There's-- to the economy and to the taxpayers, by the way.  Who paid the price of this recession?  It's the taxpayer because these banks and their deposits are backed up by the FDIC.  But it's also the economy as a whole 'cause we had to bail out some of these banks.  They can say they didn't want the money.  Some of them maybe can say that.  Some of them desperately did need the money.  But we can't allow it to happen again.

                                 

DAVID GREGORY:

Quick point, Andy.

                                 

ANDREW ROSS SORKIN:

Yeah, we have said that we've created all these new laws to avoid the too big to fail problem.  Jamie Dimon has said, "I support winding down a failing bank."  The question though is the size and scale.  If a bank the size of J.P. Morgan-- and they're not in trouble.  But if they were to get in trouble would the laws really work?  And that's the big question mark.  We will not know until we get there.  And that's where the anxiety lies.

                                 

DAVID GREGORY:

We'll leave it there.  Andrew Ross Sorkin, thank you very much.  Senator Carl Levin, thank you as well.

(OFF-MIC CONVERSATION)

(videotape)

MITT ROMNEY:

Marriage is a relationship between one man and one woman.

(end videotape)

                                 

DAVID GREGORY:

That of course Mitt Romney speaking yesterday at commencement at Liberty University, founded by Jerry Falwell, in Virginia, talking about the gay marriage debate.  Joining me now the chairman of the Republican party Reince Priebus.  Good to have you back on the program.

                                 

REINCE PRIEBUS:

Hey David.  Thank you.

                                 

DAVID GREGORY:

So a lot of change since last Sunday in the gay marriage debate because of what the vice president said sitting exactly where you're sitting now.  Will this be a defining issue for your party and for this election in the fall?

                                 

REINCE PRIEBUS:

I'm not sure if it's going to be a defining issue but clearly for those people in America where gay marriage is their number one issue, we clearly have two different candidates with two different views.  On the one hand, you have Barack Obama who is now I guess going to promote and perhaps crusade for this issue, and we have Mitt Romney, who's been consistent and I think in line with most Americans which is that marriage ought to be defined between one man and one woman.

So for those people that this is their issue, they have a clear choice.  But I happen to believe that at the end of the day, however, this election is still going to be about the economy and whether or not this president's fulfilled the promises that he made to the American people, which he clearly didn't.

                                 

DAVID GREGORY:

Do Republicans tread carefully on this issue because there's been-- I've just been looking at the polling going back eight years.  There's a 20 point swing in approval, a lot more Republicans now in favor of gay marriage than there were back in 2004.

                             

REINCE PRIEBUS:

Well, I don't doubt your polling and I don't doubt that there are companies out there calling 400 and 600 people and releasing these results.  But if you look at the 32 states across America where people actually ask this question, "Do you believe marriage should be between one man and one woman?"  And every single case, including North Carolina, the answer was yes.

                                 

DAVID GREGORY:

Do you believe that there's no question anymore that Mitt Romney can get social conservatives on board because of this issue?

                                 

REINCE PRIEBUS:

Well, I don't know if it's because of this issue, but certainly social conservatives and people around the country that agree that marriage is a unique definition, an explanation of historical and a religious union between a man and a woman, for those people, and if that's their issue, this is a clear choice.  Mitt Romney is the person who believes marriage is between a man and a woman.

                                 

DAVID GREGORY:

Let's talk about how different people are talking about this, including some Republicans.  Senator Rand Paul is getting a lot of attention and criticism for a comment that he made on Friday.  Let me show you it.

(videotape)

SEN. RAND PAUL:

The president you know recently weighed in on marriage. And you know he said his views were evolving on marriage. Call me cynical but I wasn't sure that his views on marriage could get any gayer.

(end videotape)

                                 

DAVID GREGORY:

As chairman of the party do you think that's appropriate?  An appropriate way to tell the (UNINTEL)?

                                 

REINCE PRIEBUS:

I don't know what Rand meant by that?  No, I'll defend the Republican party and I can defend our nominee Mitt Romney.  But here's what I do think.  If you go back--

                                 

DAVID GREGORY:

But that particular comment.  Would you be pleased if Republicans talk about it in that way?

                                 

REINCE PRIEBUS:

Here's what I know.  Mitt Romney is a gracious, caring person who believes that every individual in this country, including people who are gay, deserve the dignity and respect that every American deserves.  But that doesn't change the fact that we believe that marriage should be between one man and one woman.  So--

                                 

DAVID GREGORY:

Do you think the fight for gay marriage is a civil rights struggle ?

                                 

REINCE PRIEBUS:

I don't think it's a matter of civil rights.  I think it's just a matter of whether or not we're going to adhere to something that's been historical and religious and legal in this country for many, many years.  I mean marriage has to have a definition.  And we just happen to believe it's between a man and a woman.  So--

                                 

DAVID GREGORY:

For those people who do think it's a civil right would say all those things you've just said could have been said about Jim Crow laws.

                                 

REINCE PRIEBUS:

Well, I--

                                 

DAVID GREGORY:

Except the religion piece.

                                 

REINCE PRIEBUS:

I think there's a big difference between people that have been murdered and everything else that have come with Jim Crow than marriage between a man and a man and a woman and a woman.  Here's what we agree on.  Is that people in this country, no matter straight or gay, deserve dignity and respect.  However, that doesn't mean it carries on to marriage.  And I think that most Americans agree that in this country the legal and historical and religious union, marriage has to have the definition of one man and one woman.

                                 

DAVID GREGORY:

But do you believe that gays and lesbians in America deserve equal rights?

                                 

REINCE PRIEBUS:

I think they deserve equal rights in regard to, say, discrimination in the workplace, issues such as, as Mitt Romney has pointed out numerous times, hospital visitations.  I mean I think that for the sake of dignity and respect, sure.  But if you're defining marriage as a civil right, then no.  I don't believe that people who are same sex should be able to married under our laws.

                                 

DAVID GREGORY:

I want to ask you one more on this.  This past week, and I'll just read it here, you said here you believe that marriage is between one man and one woman.  "We," meaning the Republicans, "believe that you can't federalize that kind of mandate."  And yet the standard bearer of the party, Governor Romney, wants to do just that.  He does want to federalize it.  He supports a Constitutional amendment to ban gay marriage.

                                 

REINCE PRIEBUS:

Well, first of all, I agree with the governor.  And maybe I--

(OVERTALK)

                                 

DAVID GREGORY:

How can you--

                                 

REINCE PRIEBUS:

--because I--

                                 

DAVID GREGORY:

Right.  And it (UNINTEL).

                                 

REINCE PRIEBUS:

--perhaps it was in artful, but here is the point.  At the time we were debating President Obama's incredible evolution of mind on this issue.  As if the American people are sitting around as the hourglass is being turned and you can wait for President Obama to evolve over his opinions on this particular issue.

My point is as we sit here today, under today's law, we don't have a marriage amendment.  But under today's law President Obama's decision in front of Robin Roberts isn't going to change anything.  The fact of the matter is we have DOMA.  We don't have an amendment.  And states across America are making this decision.  And states across are America--

                                 

DAVID GREGORY:

But you're saying--

                                 

MALE VOICE:

--agree with me.

                                 

DAVID GREGORY:

You said, "Don't federalize it."

                                 

MALE VOICE:

Yes.

                                 

DAVID GREGORY:

The nominee of the party says, "Federalize it.  A constitutional ban."

(OVERTALK)

                                 

DAVID GREGORY:

Is that what the party believes?

                                 

REINCE PRIEBUS:

Of course.  And for Mitt Romney--

                                 

DAVID GREGORY:

And this is be part of the platform?

                                 

REINCE PRIEBUS:

It is part of the platform.  And for the record, we do agree with a marriage amendment and we do agree with DOMA.  But as we sit today we don't have a constitutional amendment--

                                 

DAVID GREGORY:

But you would want to see one is (UNINTEL)?

                                 

REINCE PRIEBUS:

Sure I would.

                                 

DAVID GREGORY:

Okay.

                                 

REINCE PRIEBUS:

But here's the point.  We're talking about this issue now for an entire eight minutes on an incredible show on Sunday morning across America while millions of people are out of work.  Our debt is going in the wrong direction.  This president hasn't fulfilled his promises that will put our economy back on track.  Those are the issues that people care about.  When I go across this country people are filling their tanks half full of gas.  They can't afford their groceries.  This president hasn't fulfilled his promises.  And here we go again.  Down this path.

We concede we have a different view on marriage.  That's an issue that if people want to vote on it they'll have a clear choice.  But what really is going on in this country is that we have a president who made a lot of promises.  He's in love with the sound of his own voice but he can't follow through on a promise.  That's what we want to see for America.

                                 

DAVID GREGORY:

Let me ask you a very important economic question.  You listened to Jamie Dimon on the program earlier.  Talk about regulation, talk about the mistake that was made by this trading debt and huge loss.  Governor Romney and the Republican party position is to repeal Dodd-Frank, which is financial reform.  In light of the losses on Wall Street this week do you think we need less financial regulation rather than more?

                                 

REINCE PRIEBUS:

I think we need less.  I mean the fact of the matter is Dodd-Frank didn't work.  The reality is we've got about five to 10 banks in this country that earn our GDP.  Those five to 10 banks assets' make up a huge majority of this country's GDP.  Now that's an issue.  I do agree that this too big to fail mentality is a problem, but I don't think Dodd-Frank fixed anything.  In fact I think they made things worse.

                                 

DAVID GREGORY:

So you're satisfied with the way Wall Street operates, with the kinds of bets that were taken by J.P. Morgan Chase that led to this kind of loss?  You don't think that Washington regulators can remedy that?

                                 

REINCE PRIEBUS:

Well, certainly Dodd-Frank didn't remedy it.  And the record of this president is that he wasn't able to remedy any of these--

                                 

DAVID GREGORY:

But Carl Levin says--

(OVERTALK)

                                 

DAVID GREGORY:

--that the Volker Rule, which would govern how they use their money to make these kinds of trades, to hedge their bets, it would address that.

                                 

REINCE PRIEBUS:

Listen, I'm not an financial expert or an expert on SEC, but I can tell you that this president talks a lot about regulation on Wall Street.  He takes millions and millions of dollars from Wall Street.  but what he's done over the last three and a half years of the Democratic Senate-- Levin had control on the Senate on this issue.  And they had a Democratic control of the House.  So they had the Democrats in control of the house, the Democrats in control of the Senate.  They had the president in the White House and they didn't control any of these things.  So they've made things worse.

                                 

DAVID GREGORY:

Chairman Priebus, there will be a lot to talk to you about as this campaign goes on and we certainly hope to have you back.

                                 

REINCE PRIEBUS:

And happy mother's day to my wife.

                                 

DAVID GREGORY:

Hey, well done.

(OFF-MIC CONVERSATION)

                                 

(videotape)

FRED ARMISEN (as President Barack Obama):

Joe, you've been locked inside your room all day. What's wrong?

JASON SUDEIKIS (as Vice President Joe Biden):

What's wrong? Are you serious? Do you really not get it?

FRED ARMISEN (as President Barack Obama):

Does this have something to do with the whole gay marriage thing?

JASON SUDEIKIS (as Vice President Joe Biden):

Uh, doi! It's not fair okay! I was the first one who said it should be legal but now you're the one getting all the credit.

FRED ARMISEN (as President Barack Obama):

That's not true.

JASON SUDEIKIS (as Vice President Joe Biden):

Oh yeah? Oh really? Then why are you all dressed up?

FRED ARMISEN (as President Barack Obama):

I'm going to a gala with Lady Gaga and Elton John.

JASON SUDEIKIS (as Vice President Joe Biden):

Oh. See!? That should be me! Vice presidents never get to go anywhere!

FRED ARMISEN (as President Barack Obama):

Joe, c'mon. You should be proud of what you did on MEET THE PRESS. You're a great vice president, Joe.

(end videotape)

DAVID GREGORY:

That of course Saturday Night Live's treatment of the dynamic, shall we say, after the vice president's news.  The dynamic of the White House.  Our political roundtable is here with me.  President of the American Conservative Union Al Cardenas, former mayor of San Francisco, now lieutenant governor of California, Democrat Gavin Newsom, the host of MSNBC's Hardball and The Chris Matthews Show as well as the author of the book Jack Kennedy: Elusive Hero, Chris Matthews, and columnists for The Washington Post Kathleen Parker and Jonathan Capehart.

Well, welcome to all of you.  Chris Matthews, we could certainly say there's been some palace intrigue.  Look at the cover of The New Yorker that's coming out with the pillars in the rainbow.  I think this clip really captures it, which is the disarray that the vice president got out ahead of himself and forced the president to do something that they say he was going to-do.

                                 

CHRIS MATTHEWS:

Yes.  And the stunning thing, David, is they want us to know about the friction.  All the staffers all leaking out how angry they are.  People identified as top campaign aide.  People in the vice president's office.  People in the president's office.  All this intrigue, publicly being dished out to us.  Why do they want us to know that they're angry at the vice president?

                                 

DAVID GREGORY:

That the vice president apologized to the president.

                                 

CHRIS MATTHEWS:

And then my question is if they're angry at him for being impulsive, why are they being impulsive?  They are acting out on their anger?  They don't they just be compassionate about it and say, "Well, we'll move on."  I don't quite get why they want this spat to be public.  That's the big question.

                                 

DAVID GREGORY:

Here's the president talking to Robin Roberts of ABC about this issue.

(videotape)

PRESIDENT BARACK OBAMA:

I had already made a decision that we were going to take this position before the -- before the elections. Before the convention. He probably got out a little bit over his skis, but out of generosity of spirit.

(end videotape)

                                

DAVID GREGORY:

So, Gavin Newsom, Lieutenant Governor, you're a political leader.

                                 

GAVIN NEWSOM:

As a lieutenant governor I--

(OVERTALK)

                                 

DAVID GREGORY:

But do you believe the president was really going to change his mind?

                                 

GAVIN NEWSOM:

I don't know.  I honestly don't know.  And I agree with Chris.  I don't understand the process here.  I don't understand the thinking, except I'm proud of the president.  I'm proud he stood up on principal.  I'm proud he's on the right side of history.  And I'm proud he did it during an election, but it took an extraordinary amount of courage.  And now the question is whether or not this was a good political decision or a perilous political decision.  But regardless on principle I'm honored and proud.

                                 

DAVID GREGORY:

Well, that's (UNINTEL).

                                 

AL CARDENAS:

Well, I'm frankly surprised that the country's surprised that this issue's come up in a way that's taken us this way.  I mean the president was for gay marriage when he ran for the state Senate in '96 in Illinois.  He kind of retreated from that position when he ran for president in 2008.  Senator McCain chose not to deal with that.  It wasn't something he was comfortable with.  But clearly I knew, the campaign knew that there had been a change of position.  And then after that election when he dealt with DOMA the way he did, I mean--

                                 

DAVID GREGORY:

The Defense of Marriage Act.

                                 

AL CARDENAS:

Yes, it wasn't any surprise that he honestly felt this way.  And, frankly, he owed it to America people to say it sooner rather than later.  And so I think this whole spat is a lot to do about nothing.

                                 

DAVID GREGORY:

Well, there's a symbolic importance, Jonathan, of the president being the first one in U.S. history to say, "I support gay marriage."  Yes, he did it after the vice president.  And we (UNINTEL) to that as we've talked about.  But the reality of this is the president is not making this a federal case.  He's saying, "I'm for it, but I'm going to let the states handle this."

                                 

JONATHAN CAPEHART:

Well, because the states have always been in the business of setting the qualifications for marriage.  And it wasn't until Congress got into the mix by passing the so called Defense of Marriage Act that you have the federalization of marriage.  Look, this idea that the president is punting to the states I think is wrong.  The states, as I said, they set the qualification, but they say also say who can marry.

And ultimately it's the federal constitution that judges whether states have gone too far.  Whether they have been denied equal protection under the law.  And it is clear that the president believes that constitutionally everyone should have the right to marry, whether they're heterosexual or same sex.

And I would have to say, just to disagree with the governor here, Gavin Newsom, I do think the president was going to change his mind.  I think he was going to do it sooner rather than later because he was in an untenable position.  The untenable position being that his words were not matching his deeds.  If you look at the president's record, as you said, he has a very pro-gay record.

In particular when it came to same sex marriage it looked like he supported it.  But he would never say the words.  Ultimately, because of what happened here on this set a week ago, those words and deeds match.  And you have people now who are going to benefit from that.

                                 

DAVID GREGORY:

Well, let me--

(OVERTALK)

                                 

DAVID GREGORY:

--in here about what's actually changed.

                                 

KATHLEEN PARKER:

I do feel like I'm on The Dating Game, by the way.  And I've eliminated several of you already.  What was your question?

                                 

DAVID GREGORY:

Just what's changed?  I mean just--

                                 

KATHLEEN PARKER:

What's changed?  Obviously, it's symbolically significant for the president to say he favors same sex marriage.  We knew that he did.  We knew once upon a time that Mitt Romney did, for that matter.  But what the great irony, of course, as you point out, he did punt back to the states.

And that doesn't really help the movement to codify same sex marriage in a national way because already we have 30 states that have amended their constitutions to prohibit it.  So I think it was actually fairly easy to say, "Look, I've evolved," and then let--

                                 

DAVID GREGORY:

You don't buy it?

                                 

KATHLEEN PARKER:

--it still--

                                 

MALE VOICE:

No.

                                 

KATHLEEN PARKER:

No--

                                 

MALE VOICE:

It's a tough call.

                                 

KATHLEEN PARKER:

Well--

(MALE VOICE:  UNINTEL)

                                 

KATHLEEN PARKER:

Let me just amend--

(OVERTALK)

                                 

KATHLEEN PARKER:

--my comment one time.

                                 

MALE VOICE:

Answer the question.

                                 

KATHLEEN PARKER:

Again, my (UNINTEL PHRASE).  But I just want to amend what I said to include I think Republicans have made fun of the word evolving.  I think that's the perfect word to describe this conversation because the American people are evolving on this issue.  And increasingly they're coming on the side of same sex marriage being the right side of history as a--

(OVERTALK)

                                 

AL CARDENAS:

But, see, I don't necessarily agree, Kathleen, with that conclusion.

                                 

KATHLEEN PARKER:

And it's the young people.  And by the way--

                                 

AL CARDENAS:

Well, young people, but--

                                 

KATHLEEN PARKER:

--another generation, this is not going to be--

(OVERTALK)

                                 

AL CARDENAS:

I don't (UNINTEL PHRASE) Kathleen, but at the same time young people have remarkably changed their points of view in life from the time they're in their 20s to the time they get to be 32 and have two kids at home.  Now--

                                 

KATHLEEN PARKER:

Not for sure.

                                 

AL CARDENAS:

So maybe.  You might be right.  But we'll see how this stands the test of time.

                                 

KATHLEEN PARKER:

But (UNINTEL) literally how you phrase it.

                                 

MALE VOICE:

If you're a gay person I don't see how you can not feel something strongly about this, because for the first time ever a leader of your country, really the spokesman for your country, on an idealistic level-- I mean he isn't saying he's going to make this law.  He is saying that he believes.

                                 

MALE VOICE:

Right.

                                 

MALE VOICE:

He's with you.  And he's saying you're a human being with the same rights as all other human beings.  That's a dramatic statement.

                                 

DAVID GREGORY:

And Chris--

                                 

MALE VOICE:

I think it's almost up there with the first African American president being president.  It's a statement about who we are--

(OVERTALK)

                                 

GAVIN NEWSOM:

And it's more than symbolic in that respect.  The substance is millions of people's lives were affirmed.  Not just gay and lesbians but their loved ones.  Their brothers and sisters, aunts and uncles and the like.  So there was real substance there.  Their lives have been validated.  And these were people that were afraid to tell folks who they love and who they are.  Now they had a president that's--

                                 

DAVID GREGORY:

But if you're--

                                 

GAVIN NEWSOM:

--behind you.  And that's--

                                 

DAVID GREGORY:

But, look, you are for marriage equality.  You were mayor of San Francisco.  We have the video.  You were giving licenses to (UNINTEL) married before--

                                 

GAVIN NEWSOM:

2004.  Right.

                                 

DAVID GREGORY:

Yeah.  Before it was lawful.

                                 

GAVIN NEWSOM:

Yeah.

(OVERTALK)

                                 

DAVID GREGORY:

Before it was lawful.  And so you believe in equality.  Actual marriage equality.  Not viewpoints here.  Equality has not been advanced by him.

                                 

GAVIN NEWSOM:

No.  And you're absolutely right.  He's now gone from an (UNINTEL PHRASE), did a lot of things on Don't Ask Don't Tell and other things.  Marriage equality was not there, but civil (UNINTEL) was there.  Now he's got 95% of the (UNINTEL).  But the issue of federal rights is important.  Interracial marriage became federalized when the U.S. Supreme Court unanimously in '67 adjudicated in Levy vs. State of Virginia and threw out those 14 states that denied it.  Ultimately that's where equality--

                                 

MALE VOICE:

No, you--

(OVERTALK)

                                 

DAVID GREGORY:

Let me get (UNINTEL PHRASE).  One, is including the political impact.  I've got to take a break here.  We'll come back with our roundtable in just a moment.

(OFF-MIC CONVERSATION)

                                 

DAVID GREGORY:

We're back with more from the roundtable, although everybody's been talking, even during the commercial break.  Here's a headline from Omaha, in an Omaha newspaper, about what the president now states is risk versus reward for Obama.  I guess Al Cardenas, if you're a Mitt Romney, you got social conservatives on board now because of the president's decision?

                                 

AL CARDENAS:

Well, social conservatives were going to revolt to his side anyway.  The question was to what degree of passion.  Clearly it's a passion issue right now in a major way.  Look, social conservatives believe that marriage is a traditional event between a man and a woman.  Some do it for moral issues.  Some do it because of deeply held religious beliefs.  And some clearly because they think a family should be constituted by a man and a woman raising their children.

But we've never viewed it through a political lens before.  It was more viewed as a deeply held religious belief.  This puts it in a political context.  And this is like the religious arguments in the '80s.  You're going to have a revival of social conservative like you haven't seen in 20 years in this race.  And I think Republicans would prefer to talk about the economy and to talk about jobs.  I believe social conservatives are going to consider this a need to Romney for (UNINTEL).

                                 

DAVID GREGORY:

Does the bullying story for Romney tie into this in any way?  Does anybody think that?

                                 

MALE VOICE:

I think so.  I think the idea of a young kid leading a brigade of kids to go look for the kid they thought was gay, pulling him down on the ground, cutting himself, humiliating the kid.

                                 

DAVID GREGORY:

Romney said that was in no way the motivation.

                                 

KATHLEEN PARKER:

No, they--

(OVERTALK)

                                 

MALE VOICE:

Well, that's what he said.  But the fact is--

                                 

KATHLEEN PARKER:

I can't--

                                 

MALE VOICE:

--he's (UNINTEL) for nine years for (UNINTEL) at all.

                                 

KATHLEEN PARKER:

You can't extrapolate something that happened 50 years ago--

(OVERTALK)

                                 

MALE VOICE:

And let me come to--

                                 

DAVID GREGORY:

Hold on.  I want to let Kathleen finish here thought.

                                 

KATHLEEN PARKER:

But I guess something (UNINTEL).  I mean going back to high school, I mean did he-- I want to know what he did kindergarten.  Did he hog the red crayon?  I mean, yes, it's a bad instance.  I'm not going to dismiss it as not important.  It was important.  But to focus on something that happened in high school and then extrapolate from that something that can be--

(OVERTALK)

                                 

KATHLEEN PARKER:

--applied for the present (UNINTEL).

                                 

MALE VOICE:

But is there anybody here that doesn't remember high school?

                                 

KATHLEEN PARKER:

Well--

(OVERTALK)

                                 

DAVID GREGORY:

Let's talk broader social--

                                 

KATHLEEN PARKER:

Can I just add--

                                 

DAVID GREGORY:

--impact.

                                 

KATHLEEN PARKER:

--to that and--

                                 

MALE VOICE:

--about gay marriage.

                                 

MALE VOICE:

--and that's something I did remember.  That's the--

(OVERTALK)

                                 

MALE VOICE:

--that's more (UNINTEL).  I'm sorry.

                                 

DAVID GREGORY:

No, the political impact of the gay marriage debate in the fall.  This is not 2004 when the White House--

(OVERTALK)

                                 

DAVID GREGORY:

--used it.

                                 

MALE VOICE:

--2004.  It's a very different time.  Right now it's about 50.  And I don't know that there's another issue generally that's moved this fast in such a short period of time.  The last 24 months this has moved 10%.  So it's a much safer time than in 2004.

                                 

MALE VOICE:

Except at the ballot box.

                                 

MALE VOICE:

Except at the ballot box.  But that's always the case when you subject the rights of the minority to the whims of the majority.  Every single time the minority loses.  And, by the way, I mentioned  (UNINTEL) this state of Virginia.  70% of Americans opposed interracial marriage in 1967.  You can imagine submitting the rights of interracial marriage for the ballot.

                                 

DAVID GREGORY:

Right.

                                 

MALE VOICE:

So let's just (UNINTEL) in those swing states.  There's still a history going to be written on this.  That's why it's a point of, from my perspective, political courage.  But he's on the right side of history.  He's leaning forward and we now have someone on the other side who's taking us back who's even opposed to civil unions, Mitt Romney.

                                 

DAVID GREGORY:

Jonathan, is this about getting back to hope and change in 2008 for those supporters for Obama who might have been disappointed?

                                 

JONATHAN CAPEHART:

I think a lot of supporters of the president are buoyed by what he did.  But let's remember, leadership is about doing the hard thing when it's neither easy nor convenient.  This is not a slam dunk for the president, but siding with families, with gay and lesbian Americans, gay and lesbian Americans who are raising children across the country who are doing so at a disadvantage because of the tax code, because of local laws, because of federal laws, their president, president of the United States, came out and said that he supports their right to wed.  He supports their right to be fully engaged and involved in the American dream.  And that's an important thing we really shouldn't forget.

(OVERTALK)

                                 

DAVID GREGORY:

I've got to make that the last word.  (UNINTEL PHRASE).  Thank you all very, very much.  That is all for today.  We will be back next week.  Happy mother's day to yours, to mine and, of course, especially to my Beth.  If it's Sunday, it's Meet The Press.

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