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updated 4/7/2013 2:34:34 PM ET 2013-04-07T18:34:34

MR. DAVID GREGORY: This Sunday, just how big of a threat is North Korea and what should President Obama do about it?

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A new unprecedented round of high anxiety over North Korea. The threats from a new, young, and largely known dictator have Washington unnerved?

(Videotape)

MR. CHUCK HAGEL (Secretary of Defense): We take those threats seriously. We have to take those threats seriously.

(End videotape)

GREGORY: A special discussion here this morning with Senator Lindsey Graham, Republican of South Carolina; and perspective from Former Ambassador and Governor Bill Richardson who has deep experience dealing with the North Koreans; Former Under Secretary of defense, Michele Flournoy; and NBC News chief foreign affairs correspondent Andrea Mitchell.

Plus, presidential politics. All eyes on Hillary Clinton after two high-profile speeches this week fuel speculation about another run for the White House. And the Obama agenda, new jobs numbers undermine confidence in economic recovery. And a new budget compromise from the president. Is it nearly enough for a grand bargain? CNBC’s Jim Cramer joins the conversation this morning.

ANNOUNCER: From NBC News in Washington, the world’s longest running television program, this is MEET THE PRESS with David Gregory.

GREGORY: And good Sunday morning. Battles at home and abroad for the president as Congress returns Monday from a two-week Easter recess, it’s shaping up to be a spring filled with debate on the budget, immigration and guns. And now, overseas, a brewing crisis in North Korea as the president tries to defuse escalating tensions. At the center of it all, a young, untested leader, Kim Jong-un, who is making increasingly strident warnings about an imminent war with South Korea and the U.S., apparently upset about some new tougher U.N. sanctions and recent joint U.S.-South Korean military exercises. The escalating rhetoric has U.S. officials quite unnerved. Defense Secretary Hagel announcing this weekend a decision to postpone a long scheduled missile test to avoid making an already tense situation even worse. Secretary of State Kerry left yesterday for the Middle East, but he’ll be traveling on to Seoul and Beijing later in the week hoping to get North Korea’s closest ally China to help dealing with this growing crisis. That’s where I want to begin here this morning. Joining me Republican Senator from South Carolina, Lindsey Graham. Senator, welcome back to the program.

SEN. LINDSEY GRAHAM (R-SC, Judiciary Committee, Armed Services Committee, Budget Committee): Thank you.

GREGORY: You’re just back to the U.S. from being in the Middle East and…

SEN. GRAHAM: Yeah.

GREGORY: …I want to ask you about Syria as well in just a couple of minutes, but let me start with North Korea and what it is we’re dealing with, a couple of headlines in the magazines caught my attention in The Economist and in The Week magazine, “Is Kim Crazy?” “Korean roulette.” This war of words escalation-- are we headed toward a conflict with North Korea?

SEN. GRAHAM: I think what bothers me the most is that the tolerance in South Korea for this kind of provocation is greatly-- is-- you know, they’re-- they’re not going to put up with this anymore. If there were a South Korean naval vessel sunk this year, anytime soon, or a shelling of North-- South Korean Island by North Korea, I think the new president of South Korea would be compelled to act. I think the North Koreans are overplaying their hands. And this administration has acted responsibly. I’m glad we’re not doing the ballistic missile test. I’m glad we had the B-2s in the theater where they could see them. I’m glad we’re telling our allies South Korea and Japan, we literally have your back. And the North Koreans need to understand if they attack an American interest or an ally of this country, they’re going to pay a heavy price.

GREGORY: Let’s talk about U.S. interests and they’re quite real in the region. Look at the map first of all to give our viewers some perspective. You’ve got Japan, you have Guam where we had some missile batteries placed, or moving toward North Korea and South Korea. And, of course, in the South and the southern part of that peninsula, you’ve got over 28,000 U.S. troops, so the danger is real. If some kind of conflict breaks out between the North and the South, we are literally quite there in the middle.

SEN. GRAHAM: We’re in the middle. I’m glad we’re there with our allies. But the big difference to me is the politics in South Korea are changing by the day regarding North Korea, so if there’s some provocation, it won’t be business as usual by South Korea. I could see a major war happening if the North Koreans overplay their hand this time because the public in South Korea, the United States, and I think the whole region is fed up with this guy.

GREGORY: But what happens if there is some kind of conflict between the-- the North and the South? That becomes a conflict with United States, doesn’t it?

SEN. GRAHAM: The-- the North loses and the South wins with our help, that’s what happens.

GREGORY: And what about the rest of the region, you’re talking about Japan, you’re talking about more nuclear weapons in--

SEN. GRAHAM: People-- well, North-- Japan and South Korea have not gone nuclear unlike the Middle East, because they trust us. As long as South Korea and Japan trust us to be in the fight, they won’t go down the nuclear road. It’s important that they always believe we have their back, and it’s important that North Korea knows what happens if they engage anybody in the region associated with us, including our own troops, they lose.

GREGORY: Before I ask you about the-- more-- a little bit more about the U.S. response, who is Kim Jong-un? We put together some facts so people have some sense of him. It was his father Kim Jong-il who ran the country, so he’s his son. We don’t even know his actual age. He’s about 29-years-old. He came to power in December of 2011, educated in-- in the west. I know from talking to people at the White House one of the big fears is miscalculation here. We don’t really talk to the North.

SEN. GRAHAM: If you sold this as a movie script, I don’t think he’d buy-- buy it. A 30-year-old guy whose father was born out of a mountain, who had nine holes in ones the first time he played golf. This is a surreal place called North Korea and I blame the Chinese more than anybody else. They’re afraid of reunification. They don’t want a democratic Korea next to China, so they’re propping up this crazy regime, and they could determine the fate of North Korea better than anybody on the planet. We are up our game regarding China.

GREGORY: I want to ask you about Syria before we have a-- get some more perspective on-- on North Korea. You met with opposition forces in Syria.

SEN. GRAHAM: Yeah.

GREGORY: You have been talking about more actively helping them, getting the U.S. more involved. Do you have a different view about that now?

SEN. GRAHAM: A bit. The Syrian Opposition Council replaced the Syrian National Council. They want more assistance. I think we should give them more assistance. But there’re two things that drive my thinking on Syria. The key to Jordan is going to be a casualty. The worst is yet to come regarding Syria if we don’t fix this soon. Jordan is being overrun by Syrian refugees. And before I would arm the rebels, I want a commitment by them that they will allow an international force to secure the 17 chemical weapon sites, enough weapons to kill millions of people, and commit to destroying those weapons. In the new Syria, they will reject owning chemical weapons. If they would do those two things, I told them, I think there would be more involvement by the-- by the Congress, there would be more willingness by the Congress to help them. They’ve got to commit to destroying those weapons and allowing us-- the international community controlling those weapons. I don’t know what they’re going to say but if they publicly made those two statements, I think it would be easier for Congress to help them. And the radical elements in the Syrian-free army are growing by the day. They-- the worst is yet to come. We could lose to the king of Jordan. This could be a nightmare in the making with these chemical weapons following into radical Islamists. The number of radical Jihadists on the ground in Syria today is growing everyday this war goes on.

GREGORY: Let me get to more on perspective on North Korea, our lead story this morning. And as I mentioned, Michele Flournoy, Bill Richardson, Andrea Mitchell here. Governor, you’ve got a lot of experience with North Korea. What is going on here?

FMR. GOV. BILL RICHARDSON (D-New Mexico): I think Kim Jong-un is playing to three audiences, and this is why he’s doing these provocative acts. And by the way, Andrea was with me on one of the eight trips I did. First, he’s playing to the North Korean generals. They run the show, the military. He’s playing to the Korean workers party, the leadership there. Secondly, he’s playing to his own people. He got burned by that missile test that failed, and he feels he has the buttress his domestic standing. And I think the third thing that he’s doing is he’s testing the new South Korean president. Every years-- every five years or so when a new South Korean president comes in, North Korea does a provocative act so the issue is what do we do about it. I think what we’ve done in terms of the military posture, the stealth activity makes sense but I think eventually there’s going to have to be some diplomacy and the six-party talks I don’t think are working. I think China has to be the key. We have to really get them to lean on North Korea. But I think a new diplomatic track is needed. Some out of the box diplomacy involving the U.N., the World Bank, some special envoys outside of government, because I think we need to get to this new young leader who I don’t think is calling the show but nonetheless because it’s a (Unintelligible), because he is nominally in charge, is probably the key player there.

GREGORY: Michele Flournoy, from a defense point of view, here was-- here was Secretary of Defense Hagel this week underlining how serious this situation was when he talked about the threat.

(Videotape, Wednesday)

MR. CHUCK HAGEL (Secretary of Defense): They have nuclear capacity now. They have missile delivery capacity now. And so as they have ratcheted up their bellicose, dangerous rhetoric and some of the actions they’ve taken over the last few weeks present a real and clear danger.

(End videotape)

GREGORY: Two things going on there. One, kind of ratcheting up that-- the escalation in words which the administration wanted to tamp down, but Kim Jong-un is saying, look, I’m not talking about losing my nuclear weapons. I won’t even get into those discussions. So from a diplomatic point of view, what do you do?

MS. MICHELE FLOURNOY (Former Under Secretary of Defense Policy, Co-Chair of the Board of Directors, Center for a New American Security): I think we have to convince this new, young, inexperienced leader that he’s playing a losing hand. That the only way out of the box to-- to get the economic development he wants, to-- to get the progress that he wants is to ratchet back the rhetoric, come back into compliance with the international obligations that North Korea has and to get serious about trying to implement some of the commitments he’s made at the negotiating table in the past. I think in the meantime, the U.S. has been right to focus on bolstering deterrents, bolstering defense, standing shoulder to shoulder with our ally, South Korea.

FMR. GOV. RICHARDSON: I would only add this. I think the goal should not just be to calm him down, to cool the rhetoric down. The goal has to be how do we get North Korea back to the negotiating table on nuclear proliferation, on denuclearization. They have to do it because that whole Asian area is a tinderbox and we have enormous interest there. We have thirty thousand American troops. They’ve got hundreds of missiles. They’ve got maybe up to five to six nuclear weapons. They’ve got a belligerent leadership. It’s in our national interest to try to diplomatically defuse the situation. But we need a new policy and I think Secretary Kerry is the kind of person that can come up with that.

GREGORY: Andrea, a more basic question. It’s very hard to explain to your children how North Korea can exist this way in the 21st century and yet we continue with belligerent leadership, with a starving population, with a country completely isolated from the rest of the world. How is this possible?

MS. ANDREA MITCHELL (Chief Foreign Affairs Correspondent, NBC News; Host, Andrea Mitchell Reports): And the question for your children and all children, for all of us, who are really children in watching this because it is so inexplicable. It is a cartoon leadership. It has to be done through China. I think the new Chinese President. She is the only leverage that we have. There have been some promising signs and conversations according to Tom Donilon, Secretary Kerry--I’ll be with him on this trip next weekend--will be on Sunday morning in China. And the whole hope is that he is finally-- and this new leadership, but this is a critical time. Is China prepared to exert maximum pressure because as Bill Richardson and Senator Graham and Michele Flournoy have said, no one knows really what is motivating him except trying to assert his leadership. Who is the puppeteer really behind the scenes? The military most likely. And is he going to do something irrational or will there be a miscalculation? I’ve been at the DMZ many times. I’ve been to Pyongyang a couple of times, once with Bill Richardson. And the proximity, 800,000 forward deployed North Korean troops and the South Korean and our Americans, now Senator Graham is absolutely correct. We will obliterate North Korea. But in that first 24 hours, I think the military game plan is that we would lose enormously. You have got 35 million people living within miles.

GREGORY: How dangerous-- you once said that North Korea was as dangerous as Iraq back-- the last decade. Do you still think they’re that dangerous?

SEN. GRAHAM: Crazy people and nuclear weapons who proliferate those weapons throughout the world, who support terrorist organizations are incredibly dangerous. That’s why we need to stop Syria from getting chemical-- chemical weapons need to be control in Syria. The Ayatollahs in Iran are just as crazy as this guy in North Korea. But the one thing I’m trying to stress is the politics in South Korea is changed. There will be no more tolerance for sinking South Korean naval vessels or killing civilians in South Korea by North Korea. They need to understand that. That’s my biggest fear guys that if there’s a provocation, South Korea is not going to take it anymore and the reason they don’t have nuclear weapons and Japan doesn’t, because they trust us.

GREGORY: Right.

SEN. GRAHAM: And so I appreciate what this administration is doing, standing with our allies.

GREGORY: But Michele, what do you do with the South Koreans right now from a military point of view to tell them to trust the United States, as the Senator says, and not act too rashly?

MS. FLOURNOY: I think we hold-- hold them as close as possible. We do as much as we can to reassure them. The fact that we-- we have gone ahead with these annual exercises that we sent B-2 bombers, which is a sign of our extended deterrence, our strategic deterrence to South Korea, all of that is incredibly important. We’ve also done extensive planning with them on how to deal with various scenarios of provocation and how we would respond together as an alliance so that they don’t feel that they have to lash out unilaterally by themselves.

MS. MITCHELL: A quick question about diplomacy. It’s great to say negotiate with-- with the North, but Bill Clinton’s White House tried to. George W. Bush has tried to. They got the deal on blowing up their Yongbyon reactor. And now he says, he’s re-starting that reactor. So he seems to take the grain, take the fuel, take the money, and then go right ahead and break agreements or at least this-- this regime does. So diplomacy is really a big challenge with this regime.

FMR. GOV. RICHARDSON: It's a challenge but we have to do it. What’s the alternative? I think we have to recognize probably the longer range threat is the spread of nuclear materials, which you don’t want, is North Korea selling enriched uranium to-- to Iran. They did it to Syria, Pakistan. That’s-- that’s-- and I remember asking North Korean leader, I said, are you guys exporting nuclear materials? He said, maybe. If you continue sanctions we’ve got to get foreign exchange.

GREGORY: Mm-Hm.

FMR. GOV. RICHARDSON: Now, you know, that’s pretty devastating. So, look, I think diplomacy has been tried. I think President Clinton probably was the most successful getting an agreement done. President Bush, I think, started to negotiate with him. They’re very difficult but I think we need a new negotiating track and I think the key is going to be the United States and China. South Korea is a major player but I think for domestic reasons, they-- they got to be shunned.

GREGORY: I’ve got a couple minutes left with you, Senator Graham, and I want to turn domestically to negotiations that have to do with other things like immigration and the budget. Let me start with the budget. Do you think that the president’s framework that he announced, including Chained CPI, a gradual way to cut Social Security benefits, is a good-faith effort…

SEN. GRAHAM: Yes.

GREGORY: …on his part? Do you think he can actually win some-- some new revenues as a budget deal by doing it?

SEN. GRAHAM: There are nuggets of his budget that I think are optimistic. It’s overall a bad plan for the economy, but when you look at Chained CPI and Medicare reductions, we’re beginning to set the stage for the grand bargain. Chained CPI, adjust/harmonize the retirement age of Medicare with Social Security, do some means testing for both programs and in return flattening the tax code, generate about 600 billion dollars of revenue. And if you look at these changes over 30 years, there’s four to five trillion dollars in savings. So I’m looking for the biggest spending cut in American history by reforming entitlements, saving those entitlements. And the president is showing a little bit of leg here. This is-- this is somewhat encouraging. His overall budget is not going to make it but he has sort of made a step forward in the entitlement reform process that would allow a guy like me to begin talk about flattening the tax code and generating more revenue.

GREGORY: Do you think a grand bargain is possible by July?

SEN. GRAHAM: I think if you do immigration and the grand bargain this year will dominate the 21st century, yes. The key to the grand bargain is can we solve immigration? If we can in a bipartisan fashion fix a broken immigration system to regain our lost sovereignty, control who comes to the country, who gets a job, a robust temporary worker program and as to Republicans, the politics of self-deportation are behind us. Mitt Romney is a good man. He ran in many ways a good campaign, but it was an impractical solution, quite frankly. It was offensive. Every corner of the Republican Party from libertarians, the RNC, House Republicans and the rank and file Republican Party member is now understanding there has to be an earned pathway to citizenship. That gives us leverage on immigration with our Democratic friends.

GREGORY: I want to follow on that in just a second but I-- I also want to follow up-- you’re putting new revenue, as a Republican, you’re putting that on the table and you think it ought to be…

SEN. GRAHAM: If we do substantial entitlement reform that will save four to five trillion over a 30-year window, I think there’s…

GREGORY: This is what the president is talking about in your view substantial?

SEN. GRAHAM: Yeah, more than that. This is a step in the right direction, but harmonizing the age for retirement, means testing both programs, CPI adjustments gets you pretty much where you need to go.

GREGORY: Is the Republican leader of the Senate there yet?

SEN. GRAHAM: Well, I can tell you this, that the Republican Party would benefit as well as the Democratic Party from saving the American economy from becoming Greece. If the president will lead on this, and he showed some leadership, no Re-- no Democrat will get to his right. Nobody is going to adjust the age for retirement if the president doesn’t embrace it. Nobody is going to adjust CPI if the president doesn’t embrace it. So he’s showing some signs of leadership that’s been lacking. I’m encouraged and that puts the burden on us to do the same thing. I think we will.

GREGORY: On immigration, what stands in the way of a deal?

SEN. GRAHAM: We’ve got an agreement between labor and business about the Guest Worker Program, but we’re revisiting that. We’re hoping to get this thing done in the next couple of weeks, is the Guest Worker Program. High skill and low skill labor. How can you access it in an affordable fashion when you can’t find an American worker? If we’re reasonable with 11 million, if we all give them a pathway to citizenship that’s earned and hard and fair, get in the back of the line, pay taxes, learn the English language, then the Democratic Party has to give us the Guest Worker Program to help our economy. That’s what we’re arguing over.

MS. FLOURNOY: Will Marco Rubio be there for you?

SEN. GRAHAM: Marco Rubio has been a game changer in my party. He will be there only if the Democrats will embrace a Guest Worker Program and a merit-based immigration system to replace the broken one and we’ll regain our sovereignty back, securing our borders and having control of jobs through E-Verify. Marco will be there. If we get the 11 million right on our side it puts pressure on the Democrats to come up with a workable guest work-- a practical Guest Worker Program. Marco has been indispensable, 70:30, we get there.

GREGORY: One more political question before you go, and that is-- but you know, before I do that, let me get Governor Richardson just your take on this-- on the immigration fight, where do you think it’s going?

FMR. GOV. RICHARDSON: Well, I’m-- I’m very pleased with the work of the Gang of 8. I’m pleased with this labor agreement between the AFL-CIO and the Chamber of Commerce. Like if they could get together, Republicans and Democrats can get together. But I have some significant worries, and I’m a Hispanic-American. One, the path to citizenship, don’t make it too burdensome. Make it achievable. I’ve seen reports of this 13 years to get there. You know, let’s-- let’s be reasonable.

GREGORY: The president wants it to be certain, right? He wants it be…

FMR. GOV. RICHARDSON: Yeah. And-- and that it not be conditional.

GREGORY: Yeah.

FMR. GOV. RICHARDSON: Number two, tying legalization, the path to citizenship to border security. I was a border governor. You know, there has to be dramatic improvement in border security but tie so many people coming in, then you can legalize, that is unacceptable. And, lastly, have some way-- have some way that the drop dead date as late as possible so that as many of the 12 million that are here can get in. You know, I-- I just think that this Gang of 8 work is important. And I hope it continues, but you know, it’s-- it’s also recog-- we have to recognize the humanity and the-- and the improvements in the economy of the millions of workers that are here and also the politics. And I think…

GREGORY: Right. Let me get a final thought on this before I take a break.

SEN. GRAHAM: Well, we’re not being overrun by Canadians but we’re being overrun by people who live in poor and corrupt countries who come here to get work. I understand that. But we got to regain our sovereignty, we’re going to control our border, and there will be border security tied to the pathway to citizenship. There will be an earned pathway to citizenship. You’re not going to break in the line. It will be available to everybody who works hard, pays a fine, passes a background check. But, we are going to secure that border and it will be tied to a pathway to citizenship or there will be no deal.

GREGORY: I want to-- we’re going to talk after this break about presidential politics, waiting for Hillary Clinton. If she’s the nominee, can Republicans beat her?

SEN. GRAHAM: I think after eight years of Barack Obama, if things don’t change the next Democrat running for president will be in trouble. She will be a formidable candidate. I think her time as secretary of state is mixed. Benghazi is yet to be told completely. But anybody who underestimates her on the Republican side would do so at a peril but, yes she can be beaten. Anybody can be beaten in this country.

GREGORY: All right, Senator Graham. Thank you as always. Good to have you here.

We’re going to come back after a break and joining me will be POLITICO’s Maggie Haberman who wrote a viewer’s guide to Hillary Clinton’s future this week, as well as our friend Republican strategist Mike Murphy. Bill Richardson and Andrea will stick around, Michele Flournoy, thank you very much for being here. We’ll come back after this.

(Announcements)

GREGORY: You can follow me all week long on Twitter, @davidgregory. This morning I have some of my top reads of the week including a link to my conversation with President Obama’s election 2012 campaign manager Jim Messina. He discusses how he hopes to keep Obama supporters mobilized in support of the President’s second term agenda. By the way, in case you missed it this week, the President’s Club will be reconvening later this month for the first time since 2009 when George W. Bush’s Presidential Library opens in Dallas, Texas. President Obama will join four of his predecessors for the gathering. We will be there as well. Our political roundtable is here, up next. We’ll talk presidential politics as the Hillary watch begins.

(Announcements)

(Videotape, Friday)

MS. HILLARY CLINTON: Let’s learn from the wisdom of every mother and father who teaches their daughters there is no limit on how big she can dream and how much she can achieve. This truly is the unfinished business of the 21st century and it is the work we are called to do. I look forward to being your partner in all the days and years ahead.

(End videotape)

GREGORY: Time to talk some presidential politics now. 2016 really is not that far away. With us on our political roundtable: Republican strategist Mike Murphy; POLITICO’s senior political reporter Maggie Haberman; and sticking around with us Former Governor of New Mexico, Bill Richardson; and our own Andrea Mitchell. Of course, Andrea, you were at that speech where the unfinished business of the 21st century, does that include electing the first female president who is Hillary Clinton?

MS. MITCHELL: That was certainly the feeling in the room, and this was filled to the rafters, 2500 people at Lincoln Center. This was the second of two speeches last week, and she was in both venues in her comfort zone. These are people, the women in the World Summit, Tina Brown’s summit on Friday, Vital Voices on Tuesday, which Hillary Clinton founded back 14 years ago. But in both places she was really surrounded by the love and affection of her base, of her supporters. Tuesday night, interestingly, Joe Biden was on the stage, and he gave a rip roaring, crowd pleasing speech. She was more constrained, praising (Unintelligible) her longtime partner in all of this, but, boy, she let it rip on Friday. There was no-- no misunderstanding. If she decides she’s running, she has got everyone around her, James Carville joining here her super PAC this week…

GREGORY: Yeah.

MS. MITCHELL: …is the strongest signal yet.

GREGORY: Well, Maggie Haberman, you wrote something that I thought was really interesting this week in POLITICO, the viewer’s guide to her intentions and the various benchmarks. I’ll put it up on the screen. Pay attention to these things. Her Business Choices, Caution Versus Candor, The Company She Keeps, Where Her Book Tour Takes Her--she’s going to write a book this week talking about her time at the-- at the State Department--The Muzzle on the Big Dog--that being the former president, and Her Appearance. Discuss.

MS. MAGGIE HABERMAN (Senior Political Report, POLITICO): And I’ll-- I’ll work-- I’ll work backwards…

GREGORY: Yeah.

MS. HABERMAN: …actually, starting with appearance, which Maureen Dowd hit on today in The New York Times and it’s absolutely right. You are seeing sort of a new hair style on Hillary-- Hillary Clinton. I got a lot of pushback on talking about that, but the reality is Hillary Clinton has dealt with this kind of thing for years. She has turned it into a joke, number one. Number two, her book, they announced a book deal this week. Where you see that tour take her, I think, is going to be very interesting. We saw a lot of presidential candidates this past cycle, use book tours as sort of a masquerade for something else. She doesn’t have to do that, but this is an easy way for her to do a rollout and she did that with Living History. And then lastly, I think--and there were others--but I think most important in terms of company she keeps, you know, the Mark Penn factor gets talked about a lot. He ran her 2008 campaign. That campaign was very mismanaged by all accounts. I think the question is-- and-- and that falls to her at the end of the day. Did she learn from 2008? Can she make different choices this time and run a bit after?

GREGORY: Can she get David Plouffe to run the campaign…

MS. HABERMAN: Or-- or other people perhaps. It will be a male...

(Cross talk)

GREGORY: …who ran Obama’s campaign, right?

MS. HABERMAN: Exactly.

GREGORY: Mike Murphy, just your assessment, as you step back, you say strengths and weaknesses. What do you see?

MR. MIKE MURPHY (Republican Strategist): Well, first, I would say I'm getting a horselaugh of all the speculations. So like do you think Dillinger might rob a bank? Yeah. I think she’s going to run. She's putting out highly produced videos at the perfect time flipping on gay marriage.

GREGORY: Yeah, right.

MR. MURPHY: If she’s not running, somebody is there and maybe she’ll join that campaign because it’s definitely going forward, I believe. Now strength and weaknesses. If you read the kind of DC Press, it’s all inevitable. Well, I haven’t seen it as inevitable since the beginning of 2007 when she couldn’t lose either.

MS. HABERMAN: That’s very exactly right.

MR. MURPHY: Now, she’s an incredibly strong candidate, particularly within the primary, and the crystal ball is foggy. On one hand, it’s-- it’s kind of looking backwards. On the other hand, it’s historic. She has got a base, and she’s been to the college of losing for president which is a very rare college, and you learn a lot. So I still think she’s clearly the front-runner, but I’m making no predictions.

GREGORY: Governor, you have run against her for president back in 2008, and there is something going on about this era of inevitability. It’s not just in the press. It’s in Democratic circles, Maureen Dowd’s column this morning quoting James Carville saying the following about Hillary Clinton, “She’s gone to hell and back trying to be president,” he’s quoted as saying. “She’s paid her dues, to say the least. The old cliché is the Democrats fall in love and Republicans fall in line. But now Republicans want a lot of people to run and they want to fall in love and Democrats don’t want to fight; they just want to get behind Hillary and go on from there,” says someone who is obviously in her corner. How do you see it?

FMR. GOV. RICHARDSON: Well, first, she doesn’t confide in me, so that’s number one. Number two, I think the odds of her running are about a 100 percent to zero. I think she will. She’s a formidable candidate. And I disagree with Senator Graham. She was a good secretary of state. She logged almost a million miles, you know, enormous challenges. She was a good senator. She can now run as somebody that is out of the shadow of the president. The first woman president. She’s got activists all over the country with her. She also has-- and-- and now that I’m out of-- out of government-- a lot of-- I talked to a lot of Republicans. And-- and they like her. They-- they like her strong performance. And I-- I think you’re going to see a formidable candidate. It’s still too early, you know, anything can happen. But she’s a major player.

(Cross talk)

GREGORY: But Hillary Clinton-- I mean, Andrea Mitchell, when we talk about her record as secretary of state, what Senator Graham alluded to just a minute ago, a mixed record on Benghazi, on other aspects of her tenure. She’s-- look, she’s still got to deal with the left on her support of the Iraq war. She obviously rehabilitated herself in that respect in terms of certainly being seen as tough enough. What does she fai-- what is the most potent argument against her both within the party and-- and by Republicans?

MS. MITCHELL: Well, I have a question as to the management style because will she have learned the lessons from ‘08 as Maggie has-- has laid them out. What kind of campaign will she run? Campaigns have changed dramatically since she ran. Look at the-- as you said, the David Plouffe run campaign for Barack Obama. Is she on top of all of these technological and polling advances which is light-- really light years from what she did in ‘08 and…

MR. MURPHY: And there’s a…

MS. MITCHELL: …did un-- unsuccessfully.

MR. MURPHY: She’s-- for all her strengths, she’s in a bad position because the media is going to put the superwoman costume on her…

MS. MITCHELL: Right.

MR. MURPHY: ..and then she has to spend four years lifting up locomotives and some Martin O’Malley or Cuomo, somebody pops up and gets the endorsement of the Boston left-handed millwrights, so I’m saying huge defeat for Clinton, you know, the narrative when you’re-- when you’re invincible front-runner so early is bad.

MS. MITCHELL: But I would just say there are generations of women, I speak to the young women and was-- at the conference at-- at both, you know, the Tuesday and Friday conferences. Young women and women, my ninety-five-year-old mother, God bless her, birthday next week, they want to see a woman in their lifetime. And this is a real aspiration and that is considering the demographics of our country, most…

GREGORY: Well, Maggie…

MS. MITCHELL: …majority of voters are women.

GREGORY: …if you look at the-- the demographic coalition that President Obama put together, and we were, I think, talking about this on election night. Now you can’t count all of those and take them for granted, but that is the kind of coalition that if she does it right could be delivered right to Hillary Clinton to take into 2016.

MS. HABERMAN: Absolutely. It’s hard for me to point to a state that he got that she would not.

GREGORY: Right. Hispanics…

MS. HABERMAN: Yeah, exactly.

GREGORY: …women, young people.

MS. HABERMAN: And I think there is that sense of unfinished business that-- that women voters do feel about her, about the country post-Barack Obama. I think there’s two-- two things. I think, you know, how do you be the future as opposed to the past…

GREGORY: Right.

MS. HABERMAN: …as Mike said.

GREGORY: Yeah.

MS. HABERMAN: I think that’s a real issue for her. That’s more of a general election issue. In 2007, we knew Barack Obama existed, we just didn’t think he was running. That will make the difference.

GREGORY: Also, when have we gone back, Mike Murphy? I remember President Bush saying when Clinton was running, he told people it’s just hard to believe that the country goes back and not forward…

MR. MURPHY: Right.

GREGORY: …generationally.

MR. MURPHY: Right. It’s some-- it’s going to be a trick because we’re going to want to re-litigate a lot of stuff.

GREGORY: Right.

MR. MURPHY: We’ll get-- we’ll hear the word Benghazi 2.3 million more times instead of 1.4.

GREGORY: And how about-- how about Iraq?

MR. MURPHY: Yeah, no, no. It-- it is tricky. And while she’s so strong in the primary, in a general election, we make often a mistake of identity politics. I used to run the campaigns for my old friend Governor Christine Todd Whitman of New Jersey. We won twice. Moderate Republican female candidate, we never carried in the exit polls the female vote so people make a mistake in general elections about gender voting. It’s more complicated than that. Any Democrat is going to have the presidential year, not the off year, but the presidential year democratic--

GREGORY: Yeah.

MR. MURPHY: …demographic advantages they have.

GREGORY: Bill Richardson, what about the vice president of the United States Joe Biden, who, if you are-- wake up in the morning, you know he’s running. And when I had him here last May, here was the question I asked.

(Videotape, May 6, 2012)

GREGORY: Who’s more likely to run for president in 2016, you or Secretary Clinton?

VICE PRESIDENT JOE BIDEN: I think we may run as a team. I’m only joking, obviously. I don’t know. I don’t know whether I’m going to run and Hillary doesn’t know whether she’s going to run.

GREGORY: There’s a lot of truth in humor, Mister Vice President.

(End videotape)

GREGORY: And the rich laugh. The difficulty here, Governor, is-- you’re not likely to see the kind of primary fight that you saw between Obama and Clinton, are you? Wouldn’t Biden be very careful about doing that?

FMR. GOV. RICHARDSON: I think Biden would run.

GREGORY: Yeah.

FMR. GOV. RICHARDSON: He’s always wanted to be president. He’s been a good vice president. He was key in that whole economic agreement that was made. He’s done a lot of foreign policy. He’s in very good physical shape, so I don’t think there is going to be an age issue. And he’s ambition, he’s got the fire in the belly. You know, when you run for president, you got to realize that it’s about four years of your life everyday in a different spot. And Biden has that sort of eye of the tiger. I don’t think he would defer to Secretary Clinton. The relationship is very good. But, you know, when you run for president, you…

GREGORY: You got to…

FMR. GOV. RICHARDSON: ...you got to just do it.

GREGORY: You got to…

(Cross talk)

MR. MURPHY: Biden-- look, I’m fond of him as a Republican, just as personality, I think he’s a patriot but he is the atomic clock of second bananas. And I don’t think that’s going to change. I don’t think he’ll win a Democratic primary.

MS. MITCHELL: I don’t know that he can run if she’s running. If she’s a declared candidate, they have the same base, a lot of the same donors, and he is beloved within the party and look, how he pushed the envelope with you, David, on gay marriage and forced the president into that situation. He’s really been on the cutting edge of violence against women. He has everything going for him except that Hillary Clinton is…

MR. MURPHY: He’s not a star.

MS. MITCHELL: …Hillary Clinton.

GREGORY: Let me-- let me get to a star in the Democratic Party, Kamala Harris, who of course the attorney general of California, and the president underlined that this week by pointing out-- here she is speaking at the convention, by the way, and I believe we have the exact quote of what the president said in a speech this week paying tribute to her, making a point, “You have to be careful to, first of all, say she is brilliant and she is dedicated and she is tough, and she is exactly what you’d want in anybody who is administering the law, and making sure that everybody is getting a fair shake.” But what he really wanted to say is, “She also happens to be by far the best looking attorney general in the country,” and had to apologize for that Maggie.

MS. HABERMAN: He did. He should have stopped with that first sentence, which was you have to be careful to say. That was not a careful sentence that last one. Women candidates, women elected officials tend to be judged more based on appearance than not. Obama has these awkward moments. He does personally like her. They have a political history.

GREGORY: They’ve been friends for a long time.

MS. HABERMAN: Exactly, but…

MS. MITCHELL: And Michelle Obama has also been part of that friendship. He also says these awkward things when he’s ad-libbing about men and nobody complains. He said that about his interior secretary. He says look at that good-looking guy in the front row. We found the tape of him doing that Friday for a…

GREGORY: You’re right. I’m sorry. I don’t think…

MS. MITCHELL: So I got to give him a liberty…

GREGORY: I mean, I think guys know that’s…

(Cross talk)

MR. MURPHY: Republican done at the White House would be on fire. I think he read a Biden speech by mistake. That’s my take on what happened.

GREGORY: Shouldn’t he apologize?

MR. MURPHY: I think he did. Look, I think the whole thing is political correct insanity, but there’s a business of blowing this stuff out of proportion which is much harder on Republicans than Democrats.

GREGORY: Yeah.

FMR. GOV. RICHARDSON: You know, maybe I’m a Neanderthal, but I thought that the president’s comment was harmless. It was a political speech. He talked about her accomplishments, he talked about her competence. And then he threw in that line, you know, you are at a political event. What are you going to read her resume? So my point is this, you know, political correctness has reached a point, you know, it’s out of control. Am I going to be criticized for instance if I say that a movie star like Scarlett Johansson is beautiful? Are they going to go after me? Probably.

MS. MITCHELL: But she’s not the attorney general.

GREGORY: Check Twitter in hour.

(Cross talk)

GREGORY: All right. We’ll get back to you. All right, we’re going to get a break in here. I want to come back and actually switch gears and talk about the economy and jobs. A bad report came out on Friday as the president is pushing a new budget framework. We have got CNBC’s Mister Mad Money himself, Jim Cramer is going to join the conversation right after this short break.

(Announcements)

GREGORY: We’re back with the roundtable and Jim Cramer is here. Great to have you in-- in Washington to talk about the economy. So let’s-- look at the numbers here, the unemployment rate now at 7.6 percent. Only 88,000 jobs created. You look in the context in terms of recent months. We have that chart as well, you know, you have got much fewer than we've seen. What's going on?

MR. JIM CRAMER (Host, CNBC’S Mad Money): It's stunning. Stunning. And I think a lot of it had to do with fear mongering. Remember, we had Peggy Noonan on, not that long, when she said fear monger in chief. The president did make people feel everything is going to shut down in this country because of the sequester. A lot of the CEOs were very scared. A lot of the small business people held back, the bankers would tell you that. Only Ben Bernanke, Fed chief, got this right. He seemed to understand that the country’s hiring is really coming back down.

GREGORY: But why? What-- what is-- is it the sequester?

MR. CRAMER: Yes, it was feared that the sequester would cause massive layoffs. Go back in time. A month ago, what was the rhetoric of the White House? It was, look, this is a really big deal. Everyone has to just stop and consider how bad this is going to be for the economy. Well, the CEOs stopped. They considered and they decided, you know what, we got to hold back.

GREGORY: Right. So what's happening with the consumer? We know that the housing market is doing better. We know the stock market is going gangbusters. You look at those three things, what’s holding back the animal spirits of the economic recovery?

MR. CRAMER: Well, I think a lot of what we’re worried about is just the sense that if we spend any money on commercial real estate, oil and gas had been going strong. That pulled back. These are the big projects. These are the things that put lots of people to work and they’re just not happening. I’ve got to tell you. When you speak with the bankers in this country, they all want to lend-- they say they want to lend, but they are afraid they’re going to lose many on every loan. And the Federal Reserve is saying listen we absolutely know that this economy is anemic. The only thing that’s really helping is overseas money. People don’t want to have their money in Europe. Rich people, they don’t want money in Europe. Japan this week, people really pulling money all their money out of their local markets and coming here. And that’s got to be harness. If that’s harness, we-- we’ll start getting jobs.

GREGORY: And the debate about what the Fed does now. The Fed is not likely to change easily.

MR. CRAMER: No.

GREGORY: It’s going to keep its foot on the pedal here and make sure that rates are low and that it’s-- it’s buying assets.

MR. CRAMER: There was a parlor game about when the Federal Reserve chief is going to end this inanity because the economy is so strong, only the Fed chief seems to know it isn’t. If President Obama wants to do something that would please Wall Street, please Main Street, please small and large businessmen-- this week reappoint Ben Bernanke say-- he is our guide because he gets that there’s very bad unemployment in this country. He’s got a heart, too. Bernanke’s an amazing man. He does not get enough credit.

GREGORY: What about the budget, though, Mike Murphy?

MR. MURPHY: Mm-Hm.

GREGORY: Is that a piece of this is well where-- I mean, you heard Lindsey Graham say this morning something significant that he sees a grand bargain in our future. He’s putting revenues…

MR. MURPHY: Yeah.

GREGORY: …of the Republican on the table. How much of an affect does that have on the economy?

MR. MURPHY: Well, I think Jim’s right. The psychology has been all wrong. The White House message of build a bunker is not how you change the psychology of a troubled economy. Two things, I think. Let the Republicans keep pulling him right toward spending cuts because that’s the policy solution the country needs. And I’ll give him a little credit. He’s finally read the Clinton handbook and start to triangulate a little bit, not going (Unintelligible) but it’s begun. And the more heat he takes on the left, the closer he is to a real deal, that’s a win for everybody. And second, put the White House behind the Keystone Pipeline. No ambiguity. Just go. Those two messages that the president’s going to become a fiscal senator is finally and-- and energy policy, I think it would get the economy going fast.

MS. MITCHELL: But there is a mix message here because if they are too tight on the spending cut side, they reinforce the very problem as Jim Cramer has diagnosed it at least, in terms of the sequester having frozen things up and also in those-- in that job number and job numbers month to month, you know…

GREGORY: Right.

MS. MITCHELL: …better than anyone, bounce around. But participation rate is…

MR. CRAMER: Yeah.

MS. MITCHELL: …at historic lows, which means people…

GREGORY: Right.

MS. MITCHELL: …are giving up. And long term unemployment.

(Cross talk)

GREGORY: And Maggie, the other thing is that we know what the president wants is more spending.

MS. HABERMAN: Right.

GREGORY: I mean, he’ll talk about cuts but he wants…

MS. HABERMAN: Right.

GREGORY: …more spending in infrastructure. He wants to restore some of these education cuts. That’s what-- I mean he wants to become a jobs president, let’s not forget.

MS. HABERMAN: Yes, that’s correct.

GREGORY: We talk about Hillary Clinton, right? I mean, if she’s coming off an Obama administration where the-- the-- a jobless recovery is in effect taking place, that’s not what she wants.

MS. HABERMAN: That’s not what she wants. And actually, that gets to a point I had wanted to make before that, you know, I think if the economy does not turn around, that…

GREGORY: Yeah.

MS. HABERMAN: …I don’t agree that Hillary Clinton is a hundred percent running. I think if the economy is not great in two years, two and a half years, I think it’s much less likely that she runs, it’s a lot harder to sell herself on that. That is a tougher road for her. But I agree in terms of what the president wants absolutely.

GREGORY: Mm.

FMR. GOV. RICHARDSON: But I think, David, if the-- the president gets immigration reform, and it looks like it might happen sooner than later, and he has come forth with a serious budget proposal angering his Democratic base by saying, you know, we’re ready to look at Medicare and Social Security reductions, cuts, and then saying that he is somebody that wants to bring people together, he’s going to have a very good year. And it’s going to be a good year very for Democrats. I see-- I’m out in New Mexico, the economy is getting a little better slowly. There’s more confidence. More-- more better housing, more investment. And-- and then hopefully, we look at an energy policy which-- which I think is desperately needed, comprehensive energy.

GREGORY: And that-- Jim, that’s what you’re shaking your head about as well.

MR. CRAMER: Well...

GREGORY: Not shaking, you’re nodding. You’re nodding in agreement on energy.

MR. CRAMER: You want to put 60,000 people to work in this country in four weeks because these jobs are there. Keystone pipeline, but this is a fossil fuel versus greens debate. Why do I say that the pipeline does work because these pipelines have been the creators, the largest creators of jobs in the last four years? You may hate fossil fuel. You may think that it’s ridiculous to be able to have it so that oil and gas are in charge of hiring in this country. But we’ve got tons of oil and gas in the wrong places. You put people to work on pipelines, 60,000 dollars is the minimum that you pay a pipeline worker. You put people to work all over this country. That’s what needs to happen.

GREGORY: Yeah. I wanted to ask you the bottom line question before Jim, as well, which is, are we out of recession? Are we in the midst of a real robust recovery?

MR. CRAMER: We are in a profits recovery. You’re going to start hearing some companies report earnings beginning this week. Many of the companies won’t have very top line and won't do a lot of selling. But because they’re not hiring-- and I’m doing a study right now of 30 stocks in the Dow Jones. You’re going to see negatives literally, they’d done-- they had more people working four years ago than they have now. That’s a big problem in this country. We need the big business bring the jobs back. And one of the secrets that we can do with this is that oil and gas so cheap in this country, that it pays to manufacture here, not in China, not in Vietnam, not in Thailand. Bring those jobs back. President has to help that.

MS. MITCHELL: And not only the president can inoculate himself on this with the green environmentalist movement because John Kerry who has sterling credentials with that movement, is the one who normally has to make this decision. This is a State Department decision even though it will obviously come out of the White House. So Kerry, if he’s the one making these decisions, it’s tough for him. It will at least help the president with that part of his base.

MR. CRAMER: Just that the unemployment numbers would have been so much better six months from now if they would just say listen, we got to make a bargain on fossil fuels. It’s bad. We hate them but we ought to make that bargain.

MR. MURPHY: He’s heading toward a legacy of economic failure. We’ve been into this experiment now for five years, which will be a big political problem for the next Democrat running for president. But if he wants to have a great second term, the price, which I think is a small price is to do what most pragmatic politicians do, cut loose your base and go big. Energy, big fiscal deal, a lot of painful Medicare cuts. The bottom line, the fiscal-- the Entitlement Reform is not a bargaining chip. It’s a national imperative. And he’s got to address that.

GREGORY: You know, speaking of that, Governor, he’s meeting with Republicans again this week. Remember, the last time, a few weeks ago, he met with a group of Republican senators. He’ll do it again. He’ll want to no doubt talk about the budget, talk about immigration, which is a budding deal, and about guns. Do you think there’s anything to what Mike is saying? Would he cut the base loose?

FMR. GOV. RICHARDSON: No. He won’t cut the base loose. I think the base really recognizes that the fiscal situation is a dominant issue in our country, and that we have got to find ways to not just reduce spending but deal with the entitlement reforms. At the same time, I think the president is going to move forward on an immigration bill which, you know, is economically a jobs driver.

GREGORY: It’s true.

FMR. GOV. RICHARDSON: And so what we have here is I think a scenario where a grand bargain is possible. We reduce the deficit. I don’t think the sequester, you know, getting 85 billion dollars out of the economy is that-- has been at least out in the hinterlands, has been that devastating. Yeah, it is to federal workers who-- you know, who were great, et cetera, but I think grand bargain, a-- a-- a successful second term in the offing, now some foreign policy initiatives in Latin America, Mexico, North Korea, Iran. I just think he tackles those and then he’s going to have a very strong second term.

GREGORY: Maggie, the other thing coming to head, of course, is the gun debate…

MS. HABERMAN: Mm-Hm.

GREGORY: …and it's interesting. I spoke to Jim Messina for PRESS Pass this week who ran his campaign. And he-- he recognizes it’d be a tough vote, but he put both Democrats and Republicans on notice for 2014. Here is a portion of what he said.

(Videotape, Thursday, MeetThePressNBC.com)

MR. JIM MESSINA (Chairman, Organizing for Action): Look, I understand that there is real-- there’s a tough political vote. I’m from Montana. I understand the politics of this. We’re an organization that says we need to change the politics on the ground and say to members of Congress, look, there’s real support for these things. And, David, there’s a political price to be paid if you oppose it. I understand there's tough political votes only in Washington. But, look, I-- if I was a member of Congress, I would not want to go home to my district and in the 2014 elections defend the voting against something that 90 percent of my constituents-- David, what issue do you and I work on where there is 90 percent support?

(End videotape)

GREGORY: Is this a 2014 issue? Democrats and Republicans, depending how they vote here?

MS. HABERMAN: I think it is, absolutely. And I think that the White House, if they had really wanted to move on this, would have capitalized on the momentum right after Newtown. There’s a general feeling that they missed their window. And so, yes, it is a 90/10 issue at most.

GREGORY: But is it missing their window, Mike, or is it going for too much by going for...

(Cross talk)

GREGORY: …assault weapons ban…

MR. MURPHY: Yeah.

GREGORY: …a magazine clip ban?

MR. MURPHY: They got out the old Dianne Feinstein 45 and started playing that record. They should have gone fast, one bullet right at, metaphorically speaking, the issue of the gun show loophole and background checks. That was the way to win. They got greedy. And, you know, when you win a big election, you tend to get a little cocky and little greedy. I think that’s the mindset of the White House. I think the new Chief of Staff might be changing that, and I think they blew an opportunity. But they-- they are looking-- Maggie is right. They got trouble in 2014 in the Senate. It’s a different electorate, much more Republican, a lot of Republican states. People like Max Baucus. You’re not going to hear Messina giving that speech and billings for Baucus.

GREGORY: Right.

MR. MURPHY: And so they’re looking for wedge votes for 2014. So the debate may move back in politics.

GREGORY: Do you see it passing?

MS. MITCHELL: I-- at this stage, they are at risk of not even getting the straw purchasing piece and the background check…

GREGORY: Right. Which is surprising because that looked…

(Cross talk)

MS. MITCHELL: …which is so surprising.

GREGORY: Yes.

MS. MITCHELL: And the American people are so far in front of their legislators. This is the-- the fact of redistricting and-- and the fact that these are Congress people for life. And they don’t feel the pressure.

GREGORY: All right. We’re just going to take a break here. We’ll be back in just a moment.

(Announcements)

GREGORY: We’re out of time for today. Thanks to each and every one of you for your perspective this morning. That is all for today. We’ll be back next week. If it’s Sunday, it’s MEET THE PRESS.

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