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Video: Sequester, the economy, Washington gridlock

updated 3/3/2013 1:40:49 PM ET 2013-03-03T18:40:49

DAVID GREGORY:

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This morning my exclusive interview with Speaker of the House John Boehner

And the White House view from top economic adviser to the president, Gene Sperling, who also found himself in the middle of a feud with Washington Post reporter Bob Woodward.

And later, insights and analysis from our roundtable - the politics of the budget showdown and some other debates this week: the future of the voting rights act and whether working from home is still okay.

And good Sunday morning. Sequester is in effect, but impacts have yet to be felt. One thing is clear: frustration with Washington has never been higher and both sides are still dug in on how to solve our debt crisis: More taxes versus more spending cuts.

We have both sides of that debate this morning, starting with the man leading the Republicans in the House, Speaker John Boehner. At the 11th hour of the sequester Friday afternoon, he made a high stakes visit to the White House to meet with President Obama. Moments after he returned to his office, I spoke with him exclusively about that meeting, what's next and what's at stake in this debate.

(Begin videotape)

DAVID GREGORY:

Mr. Speaker, thank you for taking the time.

SPEAKER JOHN BOEHNER:

David, good to be with you.

DAVID GREGORY:

As we sit here Friday afternoon, you've emerged from a meeting at the White House. There is no deal. Take me inside the room. What happened?

SPEAKER JOHN BOEHNER:

We had a very nice, polite discussion, but I had asked the president and Senator Reid to come with a plan to replace the sequester. Now listen, we've known about this for 16 months. And yet even today, there's no plan from Senate Democrats or the White House to replace the sequester. And over the last 10 months, House Republicans have acted twice to replace the sequester. There are smarter ways to cut spending than these automatic across the board...

DAVID GREGORY:

But Mr. Speaker that's just not true. They've made it very clearly, as the president just did, that he has a plan that he's put forward that involves entitlement cuts, that involves spending cuts, that you've made a choice as have Republicans to leave tax loopholes in place. And you'd rather have those and live with all these arbitrary cuts...

(OVERTALK)

SPEAKER JOHN BOEHNER:

Well, David that's just nonsense. If he had a plan, why wouldn't Senate Democrats go ahead and pass it? The House has acted twice over the last ten months to replace the sequester. If we’re going to- the president got his tax hikes on January the first. If we're going to get rid of loopholes, let's lower rates and make the tax code fair for all Americans.

DAVID GREGORY:

Well, let's just talk about that for a second, because this can get complicated, but it's an important point. If most Republican economists believe that tax loopholes is actually tax spending, it's actually spending in the tax code.

SPEAKER JOHN BOEHNER:

That's correct.

DAVID GREGORY:

All right, so if you like defense spending and that's going to be cut arbitrarily, you agree that this is stealth spending in the tax code. Why not give on this? Why not allow some revenues to come from tax reform, protect defense spending and you unlock the key to getting the kind of entitlement cuts the president says he would give you, if you would just give revenues on tax reform?

SPEAKER JOHN BOEHNER:

Listen. I have worked with the president for two years to try to come to an agreement. Unfortunately, we've not been able to do so.

DAVID GREGORY:

Right, but why you are opposed to that formulation, because you were for tax reform a couple months ago.

SPEAKER JOHN BOEHNER:

I want tax reform. Republicans want tax reform. We want to bring rates down for all Americans so that we've got a fairer tax code. But to arbitrarily pull out a couple of tax expenditures and to say, "Well, we ought to use that to get rid of the sequester." Listen, every American knows Washington has a spending problem. Every American, in these tough economic times, has to find a way to balance their budget.

They've got to make choices. And they expect Washington to live within its means and to make choices as well. Now we know that we've got a structural deficit. The president has run up five trillion dollars worth of debt in the last five years. We have another one trillion dollar budget deficit this year. It's time for the president and Senate Democrats to get serious about the long-term spending problem that we have.

DAVID GREGORY:

Again, and the president has laid this out, he is serious about tackling the long-term spending problem, including dealing with Medicare, but he said it here. There's an ironclad rule that Republicans have. No new revenue. And without that, there can be no deal.

SPEAKER JOHN BOEHNER:

David, the president got $650 billion of higher taxes on the American people on January the first. How much more does he want, one. When is the president going to address the spending side of this?

DAVID GREGORY:

But Simpson and Bowles, who a lot of people around here think is really the paradigm, how to look a long-term debt reduction. They wanted a lot more revenue. And you've always said, "Look, he got his revenues. End of topic. He got $600 billion." You yourself, said, "Look, we got 99% of the Bush tax cuts extended." That's a pretty good deal. So you didn't have to give a lot for that. Only 18% of the Bush tax cuts were rescinded with that 600 billion.

(OVERTALK)

SPEAKER JOHN BOEHNER:

No.

DAVID GREGORY:

And you've committed. Wait a second. But you've committed to more in the way of revenue just last December.

SPEAKER JOHN BOEHNER:

But the president and I never came to an agreement. He could have come to an agreement, but he didn't. He got his tax hikes. It's time to cut spending and every American knows it.

DAVID GREGORY:

But the president, is he not committed to spending? Does his deal that we saw on the table not include over $900 billion in spending cuts over 10 years?

SPEAKER JOHN BOEHNER:

Oh the president asked $1.3 trillion worth of increases in revenue. And only put up $850 billion worth of spending cuts. Everybody in Washington knows what the problem is, but nobody wants to address it. (crosstalk) Listen, I've been here for 22 years. And I've watched presidents from both parties. I've watched leaders from both parties kick this can down the road, kick it down the road and they kick it down the road. We're out of road to kick the can down. We've got a long-term spending problem that has to be addressed. I've spent the last two-plus years trying to bring this town to address this problem. And it is going to be addressed.

DAVID GREGORY:

There's going to be different points of view on that, because obviously, the president believes that he has done it and is addressing it. I want to try to pin you down on two points. You were just talking about tax reform and your objection, it seems, to this formulation which is allow some revenues to come from tax reform to unlock entitlement cuts and then you'd get rid of the sequester. But you think that's sort of arbitrary. It's just a couple of deductions. Are you open down the line to using revenue derived from tax reform closing deductions to actually pay down the deficit?

SPEAKER JOHN BOEHNER:

I'm going to say it one more time. The president got his tax hikes on January the first. The issue here is spending. Spending is out of control. There are smarter ways to cut spending than this silly sequester that the president demanded. And so we need to address the long-term spending problem. But we can't cut our way to prosperity.

We also have to have real economic growth. American family's wages aren't growing. They're being squeezed. And as a result, we've got to find a way through our tax code to promote more economic growth in our country. We can do this by closing loopholes, bringing the rates down for all Americans, making the tax code fairer. It will promote more economic growth.

DAVID GREGORY:

But there’s no ironclad evidence that lowering marginal tax rates is going to lead to economic growth.

SPEAKER JOHN BOEHNER:

Oh yes there is. There’s mountains.

DAVID GREGORY:

Bill Clinton raised taxes, President Reagan raised taxes and the economy performed well...

(OVERTALK)

SPEAKER JOHN BOEHNER:

There's mountains of evidence that if we bring tax rates down, that we will help spur economic growth in our country.

DAVID GREGORY:

That hasn't been tried before?

SPEAKER JOHN BOEHNER:

Yeah, Ronald Reagan, 1981.

DAVID GREGORY:

Right, he also raised taxes.

SPEAKER JOHN BOEHNER:

And it worked very well.

DAVID GREGORY:

But he raised taxes as well and it didn’t hurt the economy did it?

SPEAKER JOHN BOEHNER:

Listen, he lowered taxes twice, both in 1981 and again out of the 1986 tax reform. When they lowered rates for all Americans, we had this boom in economic growth. Why? Because we got rid of a lot of the silly deductions, brought the rates down, and it helped promote more economic growth in our country.

DAVID GREGORY:

The president says, "Look, on the long-term spending issues on health care." And I've talked to you about this with you before. You'd like us to raise the eligibility rate for Medicare recipients. That's something the president opposes. He is however willing to do...

SPEAKER JOHN BOEHNER:

No, no, he was for it a year and a half ago...

DAVID GREGORY:

Right. He was for it and then he pulled back.

SPEAKER JOHN BOEHNER:

Before, he was against it, yes, let’s just be fair.

DAVID GREGORY:

Right. Okay, he pulled back. But he's for means testing for wealthier Americans. He's got that on the table according to the White House. And he's for what's called in this town chain CPI, which is basically a reduction in benefits over time. How is that not being serious about the long-term entitlement problem?

SPEAKER JOHN BOEHNER:

Well, then why haven't Senate Democrats passed the President's plan? The House has passed a plan twice, over the last ten months, to replace the sequester. Senate Democrats have done nothing. It's time for them to vote. It's time for us to get back to regular order here in Congress.

But when the House passes a bill, the Senate passes a bill and if we disagree we go to conference to resolve those differences. I made this point at the White House today. It's time for us to do this via regular order. Later on this month, the House is going to move its budget. Senator Reid acknowledged that the Senate expects to move their budget later on this month. Hopefully out of this process, we can go to conference with the Senate and maybe come to some agreement.

DAVID GREGORY:

So what goes on in these meetings? I mean, you talk about a nice conversation. You keep talking about your relationship being pretty good with the president. It's hard for any of us to believe that, given how personal it seems, given how pointed the language seems to be and that you’re just at such a basic philosophical, ideological, practical disagreement here. I mean, Congress left town, both sides hate this deal and yet, it’s going forward.

(OVERTALK)

SPEAKER JOHN BOEHNER:

Wait, wait.

(OVERTALK)

SPEAKER JOHN BOEHNER:

We had a very pleasant meeting, but it was also a very frank meeting. I made it clear to the president that again, a trillion dollars worth of tax hikes in Obamacare. And you have another $650 billion worth of tax hikes on January the first. You can't tax our way out of this problem. We've got to deal with the spending side, just like every American family has to.

DAVID GREGORY:

You've used some tough language this week. And at one point this week, you directed your fire at the White House and at the Senate. And here's what you said.

(Videotape)

SPEAKER JOHN BOEHNER: We have moved a bill in the House twice. We should not have to move a third bill before the Senate gets off their ass and begins to do something

(End videotape)

DAVID GREGORY:

What did you mean by that? And is that appropriate for the Speaker of the House to speak that way?

SPEAKER JOHN BOEHNER:

Listen, I speak English. And the fact is, the House has done its work. We have this sequester because the president demanded it and because Senate Democrats have refused to act.

DAVID GREGORY:

And 174 of your members in the House voted to support it at your urging. You both agreed to do this.

SPEAKER JOHN BOEHNER:

Listen, the president demanded it at the 11th hour in July of 2011, when- because he didn't want to be inconvenienced by having another vote on the debt limit before his reelection in 2012. And as a result, the agreement that Senator Reid and Senator McConnell and myself had that didn't have the sequester, he would not accept. So he demanded that we find a way so he could avoid a second debt limit vote before his reelection. That's where the sequester came from.

DAVID GREGORY:

So you say that the house has twice passed a bill on this. The truth is, you passed a bill that you knew was never going to be accepted by Democrats. You target setting up exchanges under Obamacare. You target Dodd-Frank. You target Medicaid eligibility. Laiden with poison pills that you say the Senate Democrats are doing now.

SPEAKER JOHN BOEHNER:

Most of the changes in our bill to replace the sequester came out of the president's own budget. Not all of them, but most of the changes.

DAVID GREGORY:

But the stuff you put in there, you knew Democrats wouldn't support it. And it's exactly what you see Senate Democrats doing now, which is putting things that Republicans won't support.

SPEAKER JOHN BOEHNER:

David, here's the process. The House passes a bill. The Senate can pass a bill and if we disagree, we go to conference and work it out.

DAVID GREGORY:

So Speaker, what happens now? What do you think the impact of all of this is? The president is saying there will be a ripple effect in the economy. There will be a growth cut. There will be a loss of 750,000 jobs. What's the impact?

SPEAKER JOHN BOEHNER:

Well, then, why hasn't he acted?

DAVID GREGORY:

But I’m asking you what is the impact? I know how you feel about why he hasn’t acted.

SPEAKER JOHN BOEHNER:

Listen, this is not the smartest way to cut money. The smarter way would be to actually move a bill that deals with our long-term spending problem. You can't continue to spend money that you don't have.

DAVID GREGORY:

But is this going to hurt the economy? Will it hurt economic recovery?

SPEAKER JOHN BOEHNER:

Listen. I don't know whether it's going to hurt the economy or not. I don't think anyone quite understands how the sequester is really going to work.

DAVID GREGORY:

Is the president exaggerating when he and his cabinet lay out the consequences?

SPEAKER JOHN BOEHNER:

Well, if you look at the fact that they claimed all these air traffic controllers are going to be laid off and then if was found out they really didn't have to. And then when Secretary of Education went out and claimed that all these teachers in one county in West Virginia were being laid off as a result of the sequester, found out that wasn't quite true. And then they release thousands of detainees down in Arizona before the sequester even takes effect. There are a lot of questions about how the White House is handling. the communications on this.

DAVID GREGORY:

But you wrote, you called the sequester dangerous and it would, "threaten US national security." Were you exaggerating?

SPEAKER JOHN BOEHNER:

I am concerned about its impact on our economy and its impact on our military. Listen, we've known about this problem for 16 months. We've known the sequester was coming. That's why the House last year acted twice. Why didn't the Senate Democrats act? Where was the President's plan? Why didn't they pass something? And here we are, at the- beyond the 11th hour, looking at each other without, without having acted.

DAVID GREGORY:

Do you think Bob Woodward has exposed something about the White House positions on all this that we didn't know?

SPEAKER JOHN BOEHNER:

Well, I think he made clear that this sequester was the President's idea. It was the White House that demanded it. I think Bob Woodward was right.

DAVID GREGORY:

The feeling is, you hear it publicly from the president but also privately as well, that you can't agree, even if you'd like to, on any more revenue, because the House caucus, conservatives, Tea Party folks were so upset with you for the last revenue increase to avoid the fiscal cliff that they in effect lead you, you don't lead them, that you don't have room to maneuver.

SPEAKER JOHN BOEHNER:

Well, David, let me just say this. There's not one member of our caucus who said one word to me that was critical of the fact that we lowered taxes for 99.1% of the American people, not one.

DAVID GREGORY:

Are you securing your speakership?

SPEAKER JOHN BOEHNER:

Listen, I'm here to lead the fight against out of control spending. And I'm going to lead that fight as Speaker of the House.

DAVID GREGORY:

The next crisis potentially is what happens when you fund the government for the rest of the year. That's called the continuing resolution. Are you committed to doing whatever it takes to keep the government open?

SPEAKER JOHN BOEHNER:

Absolutely. We, the House next week will act to extend the continuing resolution through the end of the fiscal year, September 30th. The president this morning agreed that we should not have any talk of a government shutdown. So I'm hopeful that the House and Senate will be able to work through this.

DAVID GREGORY:

So what happens next? I mean, is the political outcry, did it cause so much political pain on one side or the other that one side gives? How does this get resolved?

SPEAKER JOHN BOEHNER:

I don't think anyone quite understands how it gets resolved. After we do our continuing resolution, we'll begin to work on our budget. The House has done a budget every year that I've been Speaker. The Senate hasn't done a budget for four years. They've committed to do a budget this year. And I hope that they do. And out of that discussion and out of that process, maybe we can find a way to deal with our long-term spending problem.

DAVID GREGORY:

In the end, you don't really see a pathway here that's open as you sit here.

SPEAKER JOHN BOEHNER:

If I did, the meeting at the White House this morning might have gone better.

DAVID GREGORY:

I'll ask you with my White House colleagues and the press corps there have asked the president. Do you bear any responsibility for a failure to find agreement?

SPEAKER JOHN BOEHNER:

Listen, there's no one in this town who's tried harder to come to an agreement with the president and to deal with our long-term spending problem, no one. It's unfortunate. And we've not been able to come to an agreement. But the House did its work to avoid this sequester, to avoid these random and automatic spending cuts. The fact is, the president and Senate Democrats have done nothing to pass a plan to avert this and to deal honestly with the spending problem the country has.

DAVID GREGORY:

Obviously not going to see eye to eye, because the president thinks that there is a plan in place. Let me ask you about polling. 57% of Americans in our poll disagree with what Republicans in Congress are doing. Do you think you have the public on your side?

SPEAKER JOHN BOEHNER:

Listen, the American people know that Washington spends way too much money. They know it has to be addressed, because they have to address it in their own family each and every week. And that's why my focus has been to deal with our spending problem. Listen, I came here to save the American dream for my kids and yours. And Washington is burying our economy under all of this debt. And we're burying the future for our kids and our grandkids. That's why I believe it's one of the most important things that we can do here is to solve our long-term spending problem and allow our economy to continue healing and growing.

DAVID GREGORY:

I want to ask you just a couple of quick items away from this fight if I can. On gun control, you know, you memorably stood up and applauded when the president recognized gun victims, including Gabby Giffords at the State-of-the-Union. In the House, will they get a vote that the president says they need to get on all of the proposed gun control measures?

SPEAKER JOHN BOEHNER:

I've made clear if the Senate acts on gun control legislation, the House will consider it.

DAVID GREGORY:

Are background checks the sweet spot here? Could you support those?

SPEAKER JOHN BOEHNER:

We've already had a number of hearings in the House. We're going to continue to have hearings. But David, we need to look at more than just guns. We need to look at violence in our society. You know, we’ve got a violent society. And if you’ve looked at all these mass shootings, what you see is the people who perpetrated these crimes all had a history of mental illness. And so where's the nexus? And how do we ensure that we keep guns out of the hands of people who should not have them?

DAVID GREGORY:

It was a poignant moment here on Capitol Hill this week when Rosa Parks was honored with the statue here. And a heated debate about voting rights in the Supreme Court. Justice Scalia said the act now amounts to, "perpetuation of racial entitlement." And questioned whether it was the kind of question you can lead to Congress. You voted to reauthorize this in 2006. You called it an effective tool. Do you believe that the Voting Rights Act is still needed?

SPEAKER JOHN BOEHNER:

Oh, I think the Voting Rights Act is passed with large majorities in the House and Senate. I think it's something that has served our country well. But there is an argument over a very small section of the Voting Rights Act. And that's what the court is going to consider.

DAVID GREGORY:

You told the Wall Street Journal in January, in the middle of the fiscal cliff deal, "I need this job like I need a hole in the head." It doesn't sound like you're particularly loving your work.

SPEAKER JOHN BOEHNER:

Listen, this is hard. I'm think the American people understand it's hard. You know, if solving this spending problem were easy, somebody around here over the last 20 years would have done it. It's not easy. And there are big disagreements between the two parties in terms of how we address it, but it's an issue that has to be addressed. And I've frankly made it my mission as Speaker to address this problem, because it is the greatest threat to our country.

DAVID GREGORY:

This is a high-stakes time. I asked you a bunch of tough questions. I appreciate you coming on and answering them as Speaker. Thank you.

SPEAKER JOHN BOEHNER:

Happy to do it.

DAVID GREGORY:

Thank you. Appreciate it.

(End videotape)

DAVID GREGORY:

And now to the White House view and the director of the National Economic Council, Gene Sperling. Mr. Sperling, welcome.

GENE SPERLING:

Thank you, David.

DAVID GREGORY:

Tough questions for the speaker of the House, and now some tough questions for you about this whole fight. You're sitting there with a laminated copy of the president's principles. His plan, as I described when I questioned the speaker of the House, what the president was for. But here's the problem: Senate Democrats didn't take that blueprint into their legislative fight. If this was the plan, why didn't Senate Democrats control-- you know, they control the Senate, p party. Why didn't they get it passed?

DAVID GREGORY:

Well, actually, David, as you know, when you're trying to pass something in the United States Congress, you need to get 60 votes in the Senate, and you do need some bipartisan support. And look, I think what the president has said all along is that we're only going to get the kind of agreement that gets rid of this very harmful sequester, that takes away the threat of shutdown and defaults and all the things that are holding back economic growth and job creation in our country if both sides are willing to compromise.

Now, you're right, you know, the president has a plan. This is a summary; it's on the White House website. But, you know, the speaker understands this. And what I think is most important to understand is that this really does reflect compromise. We've already cut the deficit by $2.5 trillion; $3 of spending cuts for every $1 of revenue. Now the president puts an offer to Speaker Boehner on the table in December; even though the speaker walked away from the negotiations, he's kept that offer on. And this offer has $2 in spending cuts for every $1 in revenue.

DAVID GREGORY:

But as you knew, Mr. Sperling, you were not going to get new revenue. They signaled this repeatedly, and the president went out there to campaign to try to raise the stakes and raise the public pressure, and it didn't work. Was it a miscalculation?

GENE SPERLING:

David, I have to disagree with you because we were in negotiations in December where the speaker of the House, John Boehner, who you just interviewed, was willing to suggest, put on the table, $1 trillion in revenues for deficit reduction as long as it came from reform that focused on closing loopholes and deductions.

DAVID GREGORY:

Right, but--

GENE SPERLING:

And in exchange for that--

DAVID GREGORY:

--what it ended up being was just a tax increase that came out of that. There was not balance, which is what the president says he's for now. There were no spending cuts. It was just revenue, and that's what the speaker said.

GENE SPERLING:

So--

DAVID GREGORY:

"You got your revenue, now we're going to more cuts."

GENE SPERLING:

Well, let me answer. Obviously, the president wanted that balanced agreement, it was the speaker who walked away. We wanted an agreement that included long-term entitlement reform, and we give the speaker credit for the $600 billion. But I'll do a simple math equation here, David.

If he put $1 trillion on the table ten weeks ago, and $600 billion has been passed, if he was keeping his offer on the table, he would be at least willing to consider $400 billion more in revenues as a starting point from tax reform if the president is keeping his offer on the table. And David, as you know, these are tough things the president agreed to. Means testing, Medicare, that means higher premiums for well-off Medicare recipients. $400 billion over ten years in Medicare savings. And the hardest of all--

DAVID GREGORY:

Just to point out--

GENE SPERLING:

--adjustment of the consumer price index.

DAVID GREGORY:

You say the president's for these things, I have no reason not to believe that's true. That's not what Senate Democrats put in their replacement legislation. So when it came to the legislative fight-- because this is tough for Democrats.

GENE SPERLING:

Right.

DAVID GREGORY:

They're not on board. So that's not the plan that he went to legislative battle with. He says he's for it, but that's not what the Senate could pass.

GENE SPERLING:

So I think we need to separate two different things. What the Senate put forward was a temporary replacement bill, just so that we could have more time to work on a longer agreement. You and I both know that the real answer to eliminating this harmful sequester for the next ten years is exactly the type of balanced agreement that the president has called for, has still kept on the table. And that the speaker, Boehner, was willing to consider just months ago.

DAVID GREGORY:

Let me jump to this issue of--

GENE SPERLING:

Just weeks ago.

DAVID GREGORY:

--impact on the economy to federal workers, to the military and other aspects of this. I'm not going to play this particular sound bite, but back a couple of weeks ago the president was warning of the meat cleaver approach, that it's going to jeopardize our military readiness, that this was really going to hurt. People would lose their jobs. And then on Friday, he seemed to change his tone. This is what he said.

(Videotape)

PRESIDENT OBAMA: This is not going to be a apocalypse, I think as some people have said. It's just dumb. And it's going to hurt.

(End videotape)

DAVID GREGORY:

So did the president exaggerate the case to try to win enough political pressure on Republicans, that he didn't get in the end?

GENE SPERLING:

No, not at all. You know, independent economists from the chairman of the Federal Reserve to the independent Congressional Budget Office have estimated that this sequester is going to cost our economy 750,000 jobs. I talk to CEOs every day who tell me they have job-creating projects on hold because of this sequester and its uncertainty. I've talked to a major CEO who says he has 20,000 suppliers, small businesses, that will be deeply hurt. And we could go on about all the impact. But--

DAVID GREGORY:

Well, the impact includes-- what about teachers? Arne Duncan, the secretary of education, said on Face the Nation last Sunday, "There are literally teachers now who are getting pink slips, who are getting notices they can't come back this fall." And then some fact-checking came out that proved that wasn't the case. The Washington Post on Thursday reporting that, "Sequester spin gets ahead of reality.

"When he was pressed in a White House briefing Wednesday to name an example, Duncan came up with one school district in West Virginia, and he acknowledged, 'Whether it's all sequester related, I don't know.' As it turns out, it isn't." Doesn't it hurt the White House's credibility, the president's own credibility, to make these claims and have them not turn out to be true?

GENE SPERLING:

David, I think we're having a debate about what is the impact in these first couple days. Nobody ever suggested that this harmful sequester, which the speaker himself said would be devastating to national security, was going to have all its impact in the first few days. It is a slow grind.

But make no mistake about it: You can't cut $42 billion from defense in seven months and not hurt jobs, veterans. And, you know, veterans are often those who work in the civilian military jobs. You're going to hurt a lot of people. You're going to hurt a lot of communities that rely on military spending. And, yes, you are going to hurt education. You're going to hurt children getting mental health treatment.

And my hope, David, our hope is that, as more Republicans start to see this pain in their own districts, that they will choose bipartisan compromise over this absolutist position. That's why, you know, just yesterday, the president is on the phone calling both Democrat and Republican senators who he believes want to be part of a compromise.

DAVID GREGORY:

Back in October, the president staked out some very clear ground in the presidential debate against Mitt Romney. Here is what he said.

(Videotape)

PRESIDENT OBAMA: First of all, the sequester is not something that I proposed. It's something that Congress has proposed. It will not happen. The budget that we're talking about is not reducing our military spending. It's maintaining it.

(End videotape)

DAVID GREGORY:

As the White House has acknowledged, that's not accurate. The president did propose this. He didn't want it to become law, and Republicans supported it, but it was the White House's idea. He said there unequivocally, "It will not happen." And yet it's happened.

GENE SPERLING:

David--

DAVID GREGORY:

Is there some responsibility he bears for that?

GENE SPERLING:

David, Jonathan Chase in New York Magazine, you know, gave the following analogy: A murderer comes up to you and says, "Give me your wallet." You say, "I don't have my wallet, but here's my watch." Well, technically giving your watch was your idea, but it doesn't really tell the whole story.

We know, everyone knows, that the president wanted an enforcement mechanism that included revenues on the most well-off. The speaker insisted, the Republicans insisted that if this be an enforcement mechanism, that it be on all spending cuts. Because we were forced to do that, it is true we suggested going back to the Gramm-Rudman-Hollings mechanism.

DAVID GREGORY:

That's not what he said--

GENE SPERLING:

On the whole--

DAVID GREGORY:

--in that debate.

GENE SPERLING:

Well, I think that--

DAVID GREGORY:

He said, "I didn't propose it."

GENE SPERLING:

But I think it's most accurate that they did propose an all-spending cut mechanism that would have this type of harmful impact on defense, and on education and research. And the idea-- and this is the critical part. The idea was not that these would go into effect, but that people of good faith would come back and compromise. And we know that that is what's important.

You know, Republicans are getting a win by letting the sequester go into effect. They want more funding for border security. They say they want more funding for defense. The speaker says he wants more on long-term entitlement reform. This gets nothing.

(OVERTALK)

GENE SPERLING:

It hits long-term entitlement--

DAVID GREGORY:

But is the president right or wrong, in that clip that I just showed you?

GENE SPERLING:

I think the president was overall right in that the idea of an across-the-board, all-spending cut was the idea of Republicans. But, yes, we put forward the design of how to do that. But, David--

DAVID GREGORY:

Which was the sequester.

GENE SPERLING:

But, David--

(OVERTALK)

DAVID GREGORY:

Which was the sequester.

GENE SPERLING:

But the right answer is that we all did agree to this. And we all agreed to it--

DAVID GREGORY:

Part of the reporting on this--

GENE SPERLING:

--to force us to compromise on long-term entitlements and revenue reform.

DAVID GREGORY:

But that hasn't--

GENE SPERLING:

That's exactly what Bowles-Simpson--

DAVID GREGORY:

--happened.

GENE SPERLING:

--and others called for.

DAVID GREGORY:

But that hasn't happened.

GENE SPERLING:

And why hasn't--

DAVID GREGORY:

And there's a back and forth--

GENE SPERLING:

--it happened, David?

DAVID GREGORY:

Well, and I think you've made your case about that. In the back and forth, you also found yourself in a feud with Bob Woodward this week of the Washington Post about just some of these issues. And part of that exchange, in an otherwise cordial e-mail, included this. Here was an e-mail from you to Bob Woodward that was released.

In it: "I do truly believe you should rethink your comment about saying that the president asking for revenues is moving the goalpost. I know you may not believe this, but as a friend, I think you will regret staking out that claim." When you said "you will regret staking out that claim," what did you mean?

GENE SPERLING:

I meant that, while the first issue of whose idea it was, the sequester, was one I disagreed with him on but I could see how honorable people could disagree. I was trying to explain to him, from a substantive point of view, that the idea that the president of the United States was moving the goalpost by asking for the type of balance of tax reform that raised revenues, that the Speaker Boehner himself, as you noted, had called for, as well as long-term entitlements, together, to get rid of the sequester, was not only not moving the goalpost: That was the whole idea of the sequester. And I think that e-mail was cordial. It was substantive. It was polite.

DAVID GREGORY:

But you say, "You're going to regret it." I mean, does the president think that's a good idea to say to reporters, to challenge them that, "You're going to regret staking out that claim"?

GENE SPERLING:

Well, David, I've had 20-year relationship with Bob Woodward. It's been friendly, it's been cordial. Those e-mails are very substantive. They're cordial, they're friendly. And his reply to me--

DAVID GREGORY:

Why do you think he's gone public with it and made an issue of it?

GENE SPERLING:

Well, David, I guess I'd ask people to look at his reply. His reply said, "Gene, you don't need to apologize." He said he welcomed my advice. So I can't really explain it. All I can say, David, is I hope Bob and I can put this behind us because I think it takes away the focus--

DAVID GREGORY:

Were you threatening him in any way?

GENE SPERLING:

Of course not.

DAVID GREGORY:

Okay. Mr. Sperling, I'm going to leave it there. Lots more of this debate to come. I want to clarify one point. In the White House's view, there will not be a government shutdown in several weeks. This fight will extend now to a budget fight in the fall. Is that a fair thing to say?

GENE SPERLING:

What is fair is that, if Republicans stay with their part of the deal, meaning that they put forward a continuing resolution that's reasonable, not political, stays at the level we agreed to, which is $1.043 trillion--

DAVID GREGORY:

My question, are you committed--

GENE SPERLING:

--if they--

DAVID GREGORY:

--to not shutting down the government?

GENE SPERLING:

If they agree to that, which they've suggested they would, then the president doesn't believe in manufacturing another crisis. But we will still be committed to trying to find Republicans and Democrats that will work on a bipartisan compromise to get rid of the sequester. And that's why the president was calling the leadership on Friday, that's why he spent his Saturday afternoon calling Republican and Democratic senators who he thinks could be part of a caucus of common sense to help move our country forward.

DAVID GREGORY:

All right, we will leave it there. Gene Sperling, thank you very much.

GENE SPERLING:

Thanks, David.

(COMMERCIALS NOT TRANSCRIBED)

DAVID GREGORY:

We are back with our roundtable. There's the L.A. Daily News: "Washington is totally broken." I think there's a lot of that feeling going around. Joining me now for the roundtable: Republican congressman from Idaho, Raul Labrador; managing editor of TheGrio.com and columnist for the Miami Herald, Joy Reid, first time on Meet the Press. Welcome here.

JOY-ANN REID:

Thank you.

DAVID GREGORY:

Our chief White House correspondent and political director, Chuck Todd, his 900th time on Meet the Press. Columnist for the Washington Post, Kathleen Parker; and NBC news special correspondent, Tom Brokaw. Welcome to all of you. Mr. Brokaw, what do you think of this fine mess Washington finds itself in once again?

TOM BROKAW:

Well, I really think that, behind the headlines-- this is the Washington Post this morning, and it says that, "Obama seems 2014 as key to his legacy." What we have going on here, 18 months out, are both sides positioning themselves for trying to retain control on the Republican side of the House, and maybe even win the Senate; the president trying to build a legacy of some kind. There's a whole lot of politics in this, as there is in everything else. Kind of two villages, clashing with each other, who seem to occupy a separate universe.

I think it's going to be okay in the short term. But once these cuts begin to take hold and people begin to respond to them, even though who believed in the idea of smaller government, that's when the rubber will hit the road. I just don't know when that's going to be.

DAVID GREGORY:

Congressman, what do you say about that? I mean, you go home, do you worry that there's a cascading effect to these cuts? Or do folks at home say, "No, you did the right thing"?

REP. PAUL LABRADOR:

Well, most folks in Idaho are saying that we did the right things. You know, if you think about what families have had to do over the last four or five years, they've had to cut spending-- we're talking about $0.02 of every dollar that's spent in Washington, D.C., has had to be cut. We're borrowing between $0.35 and $0.42 every single year of every dollar, and we're worried about $0.02 of every dollar.

I think we need to make sure that we do the right things, and the president already told you-- in fact, the gentleman who was here before, he already told you that Republicans are going to feel the pain in their districts. That's what the president is going to try to do. He's going to try to make sure that the Republicans feels the pain in their districts instead of doing the responsible thing.

We can find ways to cut in Washington, D.C., that are reasonable, that are appropriate, that are not painful. But what the White House is going to make sure that we do is that we feel the pain because they don't want to cut government spending. They want to increase taxes and they want to increase spending.

DAVID GREGORY:

Joy Reid, the president in effect tried that and whether-- I mean, the polling shows that it was successful. Our poll shows 52% think that it's a bad idea. But here was Tim Huelskamp from Kansas in the Washington Post on Tuesday, and this was his quote: "This will be the first significant Tea Party victory in that we got what we set out to do in changing Washington."

JOY-ANN REID:

Yes, and therein lies the dilemma, I think, for Republicans, right? They built a lot of their brand, at this point a significant share of their brand, around cutting government spending. But you can't both take credit for the overall cutting of government, and then try to get out of the blame if specific cuts hurt you in your district, or if your constituents feel the pain of it.

So Republicans are trying to balance what is a brand problem, which is that they are now the party of cutting spending, of austerity. But austerity is not popular. The polling shows that the American people would blame Republicans if the pain for austerity is felt by them. So Republicans have to find a way to sort of blame the president for the specifics, but take credit for the overall policy. And that's a challenging thing to do.

DAVID GREGORY:

So what about the 2014? I mean, are we beyond thinking about this year, Kathleen? Is it about the midterms?

KATHLEEN PARKER:

Well, apparently. It's in my newspaper, so it must be true. You know, that's a very daunting task for the president. It's clearly his strategy to make the Republicans responsible for any fallout. But the Republicans are probably going to prevail in this because, just traditionally, Republicans do better in the off years. There's higher turnout. So the president's trying to buck a historical trend. And I suspect too that what's happening with the sequester and the cuts, the results of which are yet to be seen, will play pretty well in the congressional districts he's aiming for.

DAVID GREGORY:

So is that the miscalculation here by the White House, Chuck?

CHUCK TODD:

Well, look, I think the miscalculation was they didn't understand, for some reason, that John Boehner, Mitch McConnell, and John Cornyn, okay, the top two leaders in the Senate and John Boehner, that they would-- what President Obama was asking them to do was, "Will you risk your political career, will you lose your job in exchange for doing a deal with me that includes these taxes?" Okay?

Now, the president never says, "Will you lose your job?" in the middle, but that is the fact. They would have lost their jobs. John Cornyn would lose a primary, Mitch McConnell would lose a primary. Any compromise that includes this, any new taxes on this is going to do that.

What I found interesting about last week was everybody claiming that this was such a horrible thing, but the actions didn't meet the words. There was no serious effort to stop it. And you almost wonder if these politicians are secretly going to themselves, both some of the left who would say to you they'll never get these defense cuts any other way; some of the right who will sit there and say, "There's no way we can even convince members of our own party to do these cuts. So we can blame the other side if you don't like them, but it's the only way government spending ever gets cut around here." And I think it was a silent majority, clearly, in the House and Senate, that didn't mind seeing these go through. Because if they did, they would have made a real effort--

REP. PAUL LABRADOR:

But, David--

CHUCK TODD:

--to stop it.

REP. PAUL LABRADOR:

--you know, John Boehner-- I've been a critic of John Boehner at times.

DAVID GREGORY:

Right.

REP. PAUL LABRADOR:

He has been willing to lose his job over increasing taxes, over cutting spending. He actually had a deal with the president, and it was the president who moved the goalpost.

DAVID GREGORY:

But he would have lost his speakership, though?

REP. PAUL LABRADOR:

He wouldn't have lost--

DAVID GREGORY:

Right? You don't think so?

REP. PAUL LABRADOR:

We actually increased taxes. I didn't vote for it, but we increased taxes at the end of the fiscal year.

CHUCK TODD:

That's not what John Boehner said to David Gregory in this interview--

(OVERTALK)

DAVID GREGORY:

President got his taxes, and then later in the interview he goes, "What do you mean, David? We lowered taxes on 99.1%--"

REP. PAUL LABRADOR:

We did lower taxes on 99% of the people. But the reality is that he was willing to go to the White House, he was willing to work with the White House, and he was willing to risk his job knowing that many of us were not going to be happy. And the president continued to move the goalpost.

And that's what Bob Woodward has been reporting. And finally somebody in Washington, D.C., is telling the truth about what this president is doing. The president doesn't want a deal; the president wants a political victory. He wants a political victory on taxes, he wants a political victory on spending. And I'm afraid that he wants a political victory on immigration.

DAVID GREGORY:

Tom Brokaw, you've known Bob Woodward a long time, and this issue came up, as I asked Gene Sperling about it. And here's how Woodward reacted to getting the e-mail; he spoke on CNN this week.

(Videotape)

BOB WOODWARD: I mean, it makes me very uncomfortable to have the White House telling reporters, 'you're going to regret doing something that you believe in. And even though we don't look at it that way, you do look at it that way.

(End videotape)

DAVID GREGORY:

You know, I told Gene Sperling that he should be offended that nobody believes that he's that threatening.

TOM BROKAW:

I've known Bob a long time, going back to his seminal days as a Watergate reporter. And I'm confident that White Houses have made him a lot more uncomfortable than that e-mail over the course of the years when he's talked to them. Any reporter who's worked in this town has been yelled at by somebody in the White House or somebody on the Hill. It just comes with the territory.

This is a speck that became a sandstorm overnight, unfortunately, and I think it's really reflective of the kind of media environment in which we live now, in which everybody's looking to stir something up. When I was covering Watergate, there was a wise old bird who did commentary for The New Republic, and his named John Osborne. He was one of the great, great commentators in this town.

He took me to lunch one day, and he'd had a blowup with the White House the day before. And he looked at me and he said, "You know, Brokaw, the problem is that journalists, all of us, we've got glass jaws. We throw punches; when somebody swings back, we go down with the first punch, screaming foul of some kind." I think that's what we have to keep in mind.

Reading Bob between the lines here in his last appearances, I think he does believe it kind of got out of his control at some point. We've got to move on. The country doesn't care about this. This is about an intramural fight in a high school cafeteria; it should be over now.

DAVID GREGORY:

I don't know if that guy knows my wife, but she says the same thing about all of us. Joy, what about this larger issue, in terms of where this goes from here? Some bobbing and weaving there from Gene Sperling about avoiding a government shutdown, but Boehner said that, "We're not going to shut down the government."

So this is going to be a fight later on. Do liberals have to come to the idea that the president is willing to give up some stuff on Medicare at a certain point, if he can get to that endgame where he might be able to get some more revenues?

JOY-ANN REID:

Well, you know, obviously liberals are not happy with any idea that cuts Medicare. And it was interesting that the whole deal that came together, the Budget Control Act in 2011, left Medicare off the table. It's such a hot issue, and I think Republicans maybe have some regrets that they didn't try to get that in there. Because this deal that was done did not include Medicare.

That said, the president has put chained CPI on the table in the past. His base doesn't like it. But I don't see how you get to a compromise when Paul Ryan, who's the budget writer in the House, is coming back again to this idea of voucherizing Medicare. He's bringing that back again. And this was an idea that Republicans almost universally supported. They voted it through in the House. They paid for it, to some extent, with their constituents during the midterms.

But, you know, I think that bringing that idea back is such a non-starter that I can't imagine a compromise position between the White House -- which is saying they want to protect Medicare recipients -- and vouchers. I don't think that's going to fly with Democrats at all.

DAVID GREGORY:

Kathleen, I've just got a few seconds before we get to a break. What's striking to me is that these issues are still so hard, and that the election didn't seem to solve them completely enough.

KATHLEEN PARKER:

Well, that's a statement rather than a question so I'll just talk about something that I want to talk about.

DAVID GREGORY:

No, but, I mean, is that true? I mean, why didn't it?

KATHLEEN PARKER:

Why didn't it? Because, look, the Republicans cannot give on taxes. They simply can't. It would damage their brand permanently. And the president is unwilling-- he is insisting on raising revenues through taxes. There's no way to have a meeting of the minds when these differences exist, and that's not going to change. The sequester is going to continue through the fiscal year.

However, and I think it's very important to make this note, this is some flexibility in how the sequester cuts are applied, despite what's been said. Next week, or this week, rather, the Congress is going to pass a bill, a defense appropriations bill, allowing defense to have some flexibility in how they apply those cuts. And there's more to say on that, but it's not quite as extreme as it seems. And the Republicans, there's just no real reason for the Republicans to give at this point.

DAVID GREGORY:

Let me get a break in here.

(COMMERCIALS NOT TRANSCRIBED)

DAVID GREGORY:

This was Wednesday on the Capitol, this was a moment of actual bipartisan agreement. Rosa Parks honored with a statue on Capitol Hill. And it just came at a really interesting time this week, with a debate in the Supreme Court about the future of the Voting Rights Act, what kind of society we want to be, and whether times have changed in our civil rights struggle.

And Joy Reid, I wanted to ask you about part of that debate. Here was Justice Scalia saying something that got a lot of reaction about why he seemed to be suggesting Voting Rights Act is not still necessary. A portion of what he said.

(Videotape)

JUSTICE ANTONIN SCALIA: I think it is attributable, very likely attributable, to a phenomenon that that is called perpetuation of racial entitlement. It's been written about: whenever a society adopts racial entitlements, it is very difficult to get out of them through the normal political processes.

(End videotape)

DAVID GREGORY:

Again, the Voting Rights Act mandates states like Mississippi, Louisiana, others in the South and elsewhere, to get federal permission if they're going to change the way people access voting. How did you react to that?

JOY-ANN REID:

First of all, it was a very antebellum phrase, so it was jarring just to hear it. He's said it before; this is not the first time that Anthony Scalia has used the term "racial entitlement." And I think one of the ironies in it is that his apparent objection to section five of the Voting Rights Act is that it interrupts the sense of entitlement of political officials to interrupt the demographic tide, and to shape the elections to sort of thwart it, right?

Because what's happening here, and the reason section five is so relevant, is that you do have politicians that are attempting to alter the process. Whether it's cutting down early voting days, whether it's instituting voter ID. There was one instance that was argued during the court case about a municipality that literally stopped having elections because the demographic tide was turning against the white emerging minority, and so they just stopped having elections to avert the demographic tide.

So this is the sense that people feel entitled to change the political process to stop mainly minorities from gaining political power. So it's sort of an ironic use of phrase, not to mention a very, let's just say, throwback phrase for--

(OVERTALK)

DAVID GREGORY:

Congressman, is it still necessary to have the Voting Rights Act?

REP. PAUL LABRADOR:

You know, clearly Congress voted for it overwhelmingly. The question is whether it's constitutional, whether it's necessary. You know, I can just talk about the example in Idaho. Idaho has one statewide elected official that is Hispanic. I'm one of two congressmen in Idaho who is Hispanic. It's a majority white state; it's about 90% white, and they have no problem voting for racial minorities to represent them.

I think we need to start rethinking all these things. You know, in fact, I welcome all minorities to move to Idaho and to move to states that are willing to vote statewide for minorities.

DAVID GREGORY:

How far have we come, Tom?

TOM BROKAW:

Well, we've come a long way, but the journey is not complete yet. In fact, I feel strongly that, in this country, we need to expand voting rights not restrict them in some fashion. I would even move voting day from Tuesday to a weekend, which I think would encourage more people who are consumed with working or taking care or at home, can't get to the voting place.

Andy Young, one of the great civil rights leaders, has got a movement now called Why Tuesday? Why not move it to encourage more people, A) to vote, and therefore to feel kind of fulfilled as citizens, and get more actively involved in the public arena.

"Racial entitlement" is a pretty loaded phrase, it seems to me. Voting Rights Act was passed not as an entitlement but to raise the idea that all citizens in this country are equal. And that's not an entitlement that makes them exceptional, it just brings up the bar for everyone, whatever their color. And I think we have to examine this very carefully.

There is a heck of a lot of voter suppression around the country, even in some Democratic districts as well as Republican districts, because secretaries of state control where the voting booths are and who gets to vote under what circumstances. We ought to change that.

DAVID GREGORY:

Kathleen, I'm afraid I'm almost out of time--

KATHLEEN PARKER:

I just want to add one thing.

DAVID GREGORY:

--but I want to get your comment.

KATHLEEN PARKER:

You know, I would never try to interpret what Justice Scalia is thinking. But the issue here is section five specifically, which requires that certain states be treated differently than others. And so the question is are the data being used to distinguish those states from others? Are they still relevant today, and should they be reevaluated? And that's come up several times. You know, this is an ongoing conversation. So--

DAVID GREGORY:

So this debate will continue. I wanted to get to the debate about working from home as well, but I think we'll have to do that at a later date. But we'll come back here in just a minute.

(COMMERCIALS NOT TRANSCRIBED)

DAVID GREGORY:

Thanks to everybody around this table for a good conversation. Before we go, a quick programming note.

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