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NBC News MEET THE PRESS
Sunday, March 6, 2005
Guests: Senator Mitch McConnell, (R-Ky.), Assistant Majority Leader, Republican Whip, Senator Dick Durbin, (D-Ill.), Assistant Minority Leader, Democratic Whip, Mike Allen, Washington Post, Joe Klein, Time Magazine, Paul Krugman, New York Times, Kate O'Beirne, National Review
Moderator/Host: Tim Russert, NBC News
MR. TIM RUSSERT: Our issues this Sunday: The president tries again to sell his Social Security plan.
PRES. GEORGE W. BUSH: You ought to be allowed to take some of your own money and set it aside in a personal savings account that you call your own.
MR. RUSSERT: Federal Reserve Chairman Alan Greenspan warns about spending and taxes.
MR. ALAN GREENSPAN: Well, this is the reason...
MR. RUSSERT: The American death toll in Iraq now more than 1,500 after nearly two years of war. With us, the Republican whip of the United States Senate, Mitch McConnell of Kentucky, and the Democratic whip of the United States Senate, Dick Durbin of Illinois. McConnell and Durbin square off.
Then, insights and analysis from Mike Allen of The Washington Post, Joe Klein from Time magazine, Paul Krugman of The New York Times and Kate O'Beirne of the National Review.
And in our MEET THE PRESS Minute, almost 31 years ago, the chairman of the Council of Economic Advisors for President Gerald Ford warned about spending and taxes. His name? Alan Greenspan.
But first, with us: the Republican and Democratic whips in the U.S. Senate, Mitch McConnell, Dick Durbin. Welcome both.
SEN. DICK DURBIN, (D-IL): Thanks.
MR. RUSSERT: Senator Durbin, you were in Las Vegas yesterday. Here's pictures of you appearing with the leader of the Democrats, Harry Reid, in Nevada. This is what Senator Reid had to say.
SEN. HARRY REID, (D-NV): We're willing to work with the president for the Social Security in the out years when we recognize there are some problems 40, 50 years from now. We're happy to work with the president in that regard, but not until he takes privatization off the table. We are not going to negotiate with ourselves until the president takes privatization off the board, period.
MR. RUSSERT: Senator McConnell, the line's been drawn. The Democrats will not negotiate as long as the president continues to push for private personal accounts.
SEN. MITCH McCONNELL, (R-KY): Actually, I was encouraged by the fact that Dick and Harry Reid were out talking about Social Security the last two days. We've had a little bit of a difficult time getting them to engage on this issue. And I think they took James Carville's advice, who's on your program frequently, who said the appearance they're giving to the public is they're in concrete. Well, they're clearly now willing to talk. And I don't believe in the end they will insist that we can't discuss all aspects of this. It would be like us saying to Senator Durbin, "We won't discuss the possibility of raising the payroll tax," even though the president has said he doesn't think the payroll tax ought to be raised and even though the president doesn't think whatever changes we make would affect people over 55. If somebody wanted to raise the subject, what's wrong with that?
Looks to me like we're heading in the direction of being able to sit down and have a bipartisan conversation, Tim, about saving Social Security for our children and our grandchildren, and I think that's a good sign.
MR. RUSSERT: Senator Charles Grassley, a Republican, the chairman of the Finance Committee, told reporters in Iowa that "Congress should focus on the solvency of Social Security rather than the president's plan to create personal investment accounts for younger workers. Grassley, a Republican and the head of the committee that would handle any Social Security overhaul in the Senate, said he still intends to try to get a bill approved this year. `But maybe we ought to focus on solvency, and bring people to the table just over what do you do for solvency for the next 75 years.'"
That's a Republican, chairman of the Finance Committee. Why not set aside personal private accounts and deal with solvency?
SEN. McCONNELL: Well, why don't we talk about all of it? I mean, your old boss, Patrick Moynihan, felt that personal accounts were a good idea because it was a good investment for younger workers. Alan Greenspan just said this week he thought personal accounts were a good idea. Why not discuss it all, the whole problem, if we're going to sit down on a bipartisan basis and have a broad- ranging discussion about how to solve this problem?
Senator Durbin, my friend here to my left, said back in 1998 he thought it was a crisis then. President Clinton said in 1998 he thought it was a crisis then. This is seven years later. It's time to sit down and talk about it. And I think we ought to get started.
MR. RUSSERT: Senator Moynihan suggested Social Security plus private accounts outside of Social Security. Would you be open to that?
SEN. McCONNELL: Sure, let's talk about the whole problem.
MR. RUSSERT: What does private personal accounts do to fix the solvency problem? I don't understand that.
SEN. McCONNELL: What personal accounts are is an extraordinarily good investment. Let's take a 25-year-old, for example. Invests $1,000 in regular Social Security, gets a 2 percent return over 40 years, he gets $61,000. That same young person investing that same $1,000 in a personal retirement account, looking at the average return on investment of the stock market, would get $100,000 more. Why don't we at least discuss that in the context of the overall effort to save Social Security for our children and our grandchildren?
MR. RUSSERT: But how does that help the solvency problem?
SEN. McCONNELL: But why not discuss it? If it is a better deal for younger workers, why rule out adding that to the overall discussion of how we not only save Social Security but make it better for the next generation.
MR. RUSSERT: But when the president says Social Security is going to go bankrupt and we have a problem with solvency and the solution is private accounts, people don't understand that connection. Private accounts don't seem to deal with the solvency problem alone. And the White House acknowledges that.
SEN. McCONNELL: What we want to do is make Social Security better for the next generation, in addition to saving it. At the risk of being redundant, it seems to me that the smart thing to do is to discuss all aspects of this. Every good idea ought to come to the table. We're certainly open to any suggestions the Democrats have in any part of this discussion.
MR. RUSSERT: Senator Durbin, if you're trying to fix a problem, why would you say, "We will not sit down and talk to the president until he meets our demand by taking off the table private and personal accounts"?
SEN. DURBIN: Tim, I first came to Congress in 1983. We faced a real crisis in Social Security. We weren't sure we were going to make the payments that year. And so President Reagan turned to Tip O'Neill, a great Republican turned to a great Democrat, and said, "We need to do this on a bipartisan basis." Alan Greenspan led the commission. The very first agreement on that commission was that Social Security fundamentally would stay the same for generations to come. There was no debate over whether Social Security, as a program, would be protected and maintained. That's what we're saying on the Democratic side.
The privatization proposal of the president is going to destroy Social Security as we know it. And let me tell you why. It doesn't strengthen Social Security. It weakens it. It doesn't address the solvency problem. Secondly, we know that the White House is envisioning deep benefit cuts that will push many senior citizens into poverty. And we also know that there's a $2 to $5 trillion--trillion--transition cost here. The president cannot explain how we would pay for it. We understand people have earned this Social Security benefit. They want a guaranteed benefit as a secure foundation for their requirement. You can't start the conversation with privatization, which strikes at the heart of Social Security.
MR. RUSSERT: So you're suggesting that private personal accounts are a secret plan to get rid of Social Security?
SEN. DURBIN: Look what it does. It takes money out of the Social Security Trust Fund, $2 to $5 trillion, to be gambled in the stock market. There are winners and losers.
A friend of mine called me this morning, I grew up with down in downstate Illinois, a businessman. He said, "Remind them on this show about these investments. I lost 35 percent of my retirement in two years just a few years ago. I thought I was set and I'm not." They want to risk the Social Security Trust Fund proceeds in this scheme that, frankly, is not going to strengthen Social Security.
MR. RUSSERT: Do you believe that we currently have a crisis with Social Security?
SEN. DURBIN: I wouldn't use the word crisis. Untouched, Social Security will make every single payment for the next 37 years to every retiree, maybe 47 years. But beyond that, unless the economy grows well and grows us out of the problem, we need to address it. And there are ways to address it in sensible, commonsense approaches today that will play out in 40 or 50 years.
MR. RUSSERT: Let me show you Dick Durbin in 1998. This is when Bill Clinton was president. This is a press release you issued: "...due to the increasing number of `baby boomers' reaching retirement age, Social Security will be unable to pay out full benefits beginning in 2032, but the sooner Congress gets to avert this crisis the easier and less painful it will be."
How could it be a crisis in '98 under Bill Clinton but not a crisis in 2005 under George Bush?
SEN. DURBIN: Well, even then, 2032 is the year that we projected. Now, it's 2042, so it's in stronger position today than it was then. But let me just say, I think we should do something, and I believe most Democrats believe we should, on a bipartisan basis, do something sensible that is dedicated to the long- term survival of Social Security. Privatization accounts, and I think the president now realizes, it, they're non-starters. People in his own party, Chuck Grassley and others are telling him, "Let's get way from that conversation."
Last week, did you hear the president when he went up to New York and out to Indiana? Now, he's talking about the safety net of Social Security. He's starting to sound like a Democrat. We understand it's an important safety net. Let's make our first commitment to the long-term solvency and permanency of Social Security.
MR. RUSSERT: So as long as the president insists private and personal accounts are on the table, will you not sit at the table?
SEN. DURBIN: I don't believe that we can. I believe that if we are to start with the premise that we are going to weaken Social Security, cut benefits and leave the next generation a $2 to $5 trillion deficit, how can that possibly be good for America?
MR. RUSSERT: Senator McConnell.
SEN. McCONNELL: If Pat Moynihan were still alive, he'd be here to speak for himself. But here's what he said about the use of the word "privatization," which you notice my good friend Dick Durbin keeps putting in. Senator Daniel Moynihan said about privatization, "That's a scare word. That's a scare word. No one is privatizing Social Security. Nothing of that sort is happening."
Now, that's Daniel Patrick Moynihan, the Democratic expert on Social Security. I wish he were still alive to be here and make that statement himself. Why do we have to keep using that word? The reason they want to use that word is they want to politicize this issue. Why don't we just stop that and sit down together now that it's clear from the tour of the last two days, that Dick and Harry Reid and others believe that it's time to start talking? Why don't we just sit down and start talking about the subject and see what we can work out on a bipartisan basis?
MR. RUSSERT: Here's what the Democratic National Committee is saying in paid radio advertisement about the president's plan, and this is being played in swing congressional districts around the country. Let's listen.
Unidentified Woman: This week, President Bush brought his risky plan for Social Security to South Bend, a plan that would end Social Security's guaranteed benefits and tie our retirement savings to the ups and downs of the stock market. How does President Bush plan to pay for this risky scheme, you ask? First he'll borrow $4.5 trillion from foreign countries. Then he'll cut benefits by up to 40 percent. Cutting benefits and borrowing trillions from foreign nations won't solve Social Security's problems. It will make them worse.
MR. RUSSERT: Cut benefits by 40 percent?
SEN. DURBIN: That's exactly what the White House memo suggested. When you move the index from a wage index to a price index and play this out over the next 20 or 30 years, that's exactly the outcome. And if you took today's Social Security beneficiaries had they been held to the same standard, they'd be making less than half each month from Social Security as they do today. It is a benefit cut.
And when you confront the administration and say, "How can we be for personal accounts or privatization if it weakens Social Security, if it's going to drive more seniors into poverty, how are we going to pay for the $2 to $5 trillion in transition costs?" Tim, they have no answer. So the fact we don't believe the conversation should start on the premise that this is the answer is really based on the fact that the White House can't explain it.
MR. RUSSERT: And the $4.5 trillion from foreign countries is debt being bought by other countries?
SEN. DURBIN: Absolutely. Absolutely. Right now today the largest mortgage holders of the United States' future are Japan and China, Taiwan and Korea. And as we incur more debt for our younger generation, the mortgage holders, these Asian countries will decide from week to week and month to month whether the dollar is trustworthy. If they lose faith in the dollar, our economy's in trouble.
MR. RUSSERT: Senator McConnell, what Senator Durbin is referring to is that the White House saying that private personal accounts do not solve the solvency problems, that we have to look at indexing, wage, price indexing. The Center on Budget and Policy Priorities put together this graph and said that in 2042 and 2075, that if the current law, you'd have a 36 percent replacement of your earned income, that if you had the proposals which are being discussed, it would drop down to 27 percent in 2041 and 20 percent in 2075, which would be a benefit cut of 26 percent in 2042 and 46 percent in 2075.
Don't you have to cut benefits in order to deal with solvency?
SEN. McCONNELL: Can I start first with the fact that you were playing a Democratic ad run by the Democratic National Committee. My recollection is we just had an election about five months ago. Can we ever quit campaigning? There is not going to be another election until November of '06. What we ought to do is quit running ads and sit down and start figuring out how to solve this problem.
MR. RUSSERT: On both sides?
SEN. McCONNELL: On both sides.
MR. RUSSERT: So the independent committee supporting the president should stop.
SEN. McCONNELL: I don't know what you can do with independent committees, but I think the DNC and the RNC ought to let it go for a while and let us sit down and try to solve the problem. Look, the one thing we know for sure is a huge number of baby boomers are about to retire beginning four years from now. We know for sure that starting in 2018 when today's five-year-olds start to college, the Social Security Trust Fund is going to be paying out more than it takes in. The Pew poll indicates that 73 percent of Americans--this is an independent poll taken recently--73 percent of Americans believe that we ought to get about solving this problem either this year or very, very soon. So I think we ought to quit all the posturing and sit down and see if we can't do something important and constructive for our children and for our grandchildren.
MR. RUSSERT: Can you deal with the solvency problem of Social Security without cutting benefits?
SEN. McCONNELL: We can't deal with any problem until we sit down on a bipartisan basis and start talking about it.
MR. RUSSERT: Senator Durbin, if the president took private and personal accounts off the table, would you then sit down and have on the table raising retirement age, raising the cap on payroll taxes, perhaps cutting benefits in out years? Would you be willing to put that on the table?
SEN. DURBIN: If the president takes privatization off, if he makes a commitment to the future of Social Security, we're ready to sit down on a bipartisan basis and put everything on the table.
MR. RUSSERT: Everything?
SEN. DURBIN: That's the only way to start a good-faith negotiation. But let me add something else. If we decided to take the president's proposed tax cuts for people making over $300,000 a year, if we took those away and put those resources into Social Security, we wouldn't be sitting here today. So the tax cuts that are not permanent law the president wants for people making over $300,000 a year. The money that takes out of the Treasury is enough to make Social Security solid for 75 years.
MR. RUSSERT: What would raising taxes do to economic development in the country?
SEN. DURBIN: I think if the people who make the decisions based on our economy see that we are not going to go $2 to $5 trillion in debt for some privatization or personal account approach, if they see that we're going to get our house in order and not continue cutting taxes in the midst of a war, I think it's going to restore some confidence in our economy and I think it's going to help us grow.
MR. RUSSERT: Would the president consider doing away with his tax cuts in order to deal with Social Security? Is that on the table?
SEN. McCONNELL: Look, I'm encouraged by the fact that the Democrats have been out for the last two days talking about Social Security. I'm not here to announce anything the president may or may not do. I think the tax cuts have been very, very helpful, very, very important in stimulating this economy and getting our growth back in line. I don't think that has anything to do, personally, with this discussion about Social Security. But I think I hear Dick saying that maybe he's willing to sit down and talk. I don't think there ought to be any conditions whatsoever on beginning a bipartisan discussion to save Social Security for our children and our grandchildren. Why would we want to condition...
MR. RUSSERT: Including putting tax cuts on the table?
SEN. McCONNELL: ...the discussion? We ought to sit down and begin to do something on a bipartisan basis for our children and for our grandchildren.
MR. RUSSERT: The majority leader, Bill Frist, said that it might take a week, a month, six months or a year in order to bring something before the Senate. Two days later, he went to the floor and said, "No, no, we're going to do it this year." Is this going to get done this year?
SEN. McCONNELL: We're going to address Social Security in the Senate this year. The majority leader said it this week. I believe him.
MR. RUSSERT: Will we have legislation this year?
SEN. McCONNELL: We're going to address it. We're going to do the very best th--the only way we can have legislation is if our friends on the Democratic side are willing to sit down and help us come up with a bipartisan plan to get the job done.
SEN. DURBIN: And we should as long as privatization is not the basis for this discussion because it doesn't strengthen Social Security. It doesn't add to its solvency. Once you take that away, I think we can have a constructive bipartisan discussion and maybe then shift gears into issues that people really care about like health care in America. It amazes me all the time, 60 days, 60 cities for the president, when the number-one issue in America is: What are we going to do about health care, Medicare, Medicaid--the fact that fewer people have health insurance? We are avoiding that conversation. We need to engage.
MR. RUSSERT: Harry Reid, the leader of the Democrats in the Senate, said this to Judy Woodruff on CNN the other day: "I'm not a big Alan Greenspan fan. I voted against him the last two times. I think he's one of the biggest political hacks we have in Washington."
Do you share that view?
SEN. DURBIN: I'm troubled by Alan Greenspan. I will tell you I read Paul O'Neill's book...
MR. RUSSERT: You voted for him.
SEN. DURBIN: Yes, I did. And I read Paul O'Neill's book "Price of Loyalty."
MR. RUSSERT: But should the chairman of the Federal Reserve be described as a political hack?
SEN. DURBIN: Well, I will just tell you I think he's gone too far. I think he went too far on the tax cuts. In the book by Paul O'Neill, "Price of Loyalty," those two close friends said, "We shouldn't have tax cuts without a trigger to save this from deficits," and yet it didn't happen. And you had Alan Greenspan endorsing tax cuts which have driven us into the worst deficit situation we have ever seen in this country. That is not good and wise advice from the head of the FCC.
MR. RUSSERT: How about this: "He as brought technical expertise, sophisticated analysis, old- fashioned common sense. His wise and steady leadership has inspired confidence, not only here in America but all around the world"--President William Jefferson Clinton in 2000.
SEN. DURBIN: It is true that most presidents do everything they can to boost the image of the head of the Federal Reserve, because they believe that that is a way to make sure that the economy is strong and stable. I understand that. But as we look back, I think Alan Greenspan made a grievous error when he endorsed tax cuts and brought us to this point in deficit.
MR. RUSSERT: But he's also advocated pay as you go, that if you cut taxes or you increase spending, you have to find a way to pay for it, and Republicans don't like that. In 1992 when he didn't lower interest rates quickly enough, former President Bush was very upset with him.
SEN. DURBIN: I can understand that there are differences of opinion, but I think there is this point-- we've reached the point here where the tax cuts have brought us into a deficit situation, and as he toys with this idea of privatization, it really does raise a question of his credibility.
MR. RUSSERT: You don't find "political hack" too strong?
SEN. DURBIN: It may have been slightly too strong.
MR. RUSSERT: Senator McConnell.
SEN. McCONNELL: Look, they were praising Alan Greenspan when he chaired the Social Security Commission in 1983 and the recommendations they made, which Dick was just praising a while ago. They praised him when he was doing--making recommendations that President Clinton liked during the 1990s. I think it is outrageous to describe Alan Greenspan as a "political hack." He has been an independent player at the Fed for a long time, under both parties, and made an enormous positive contribution to our country.
MR. RUSSERT: Before we go, I want to talk about foreign policy and Iraq. This is The New York Times editorial, Senator Durbin: "The Bush administration is entitled to claim a healthy share of the credit for many of these advances. It boldly proclaimed the cause of Middle East democracy at a time when few in the West thought it had any realistic chance. And for all the negative consequences that flowed from the American invasion of Iraq, there could have been no democratic elections there this January if Saddam Hussein had still been in power."
Do you concur with that?
SEN. DURBIN: I think there is a momentum for positive change in the Middle East, and I think the Democrats support that. I happen to believe the way we invaded Iraq, without a broad coalition, without our traditional allies, taking on the responsibility in terms of human lives and dollars, was the wrong decision at that moment. But today we have to look at the Middle East and say, "What is in the best interest of America and its security?" And I think we are moving forward.
The elections are encouraging but, you know, this week they had a tough time in terms of forming their government. There are still a lot of question marks; four Marines killed yesterday, three American soldiers the day before. It is still a very dangerous place. I think that we ought to be supportive of moving this process forward, but not to believe at this point that the game's over, that we have won.
MR. RUSSERT: But if you had voted against authorizing the president to invade Iraq, would we be seeing some of the changes in democracy we're seeing in the Middle East?
SEN. DURBIN: I would have liked to have seen us go into Iraq under the right situation where the president described the situation accurately. Weapons of mass destruction didn't exist. Nuclear program didn't exist. Any connection with the 9/11 terrorism didn't exist. All of these things were said and those of us on the Intelligence Committee knew that they were, at best, exaggerations. I don't think you should mislead the American people, whether you're doing it intentionally or by accident, and in this case they were misled.
MR. RUSSERT: You don't regret your vote?
SEN. DURBIN: I don't.
MR. RUSSERT:: Senator McConnell, 1,500 Americans now dead. How long will we be there?
SEN. McCONNELL: The ink-stained index fingers of the Iraqis going to vote are a symbol of how the president's Iraq policy has galvanized this change that's sweeping the Middle East. We--this Iraq policy is changing the area of the world most resistant to the things we believe in: democracy, human rights and freedom. It's sweeping the whole area.
We'll be in Iraq only as long as we need to be in Iraq. The Iraqi military is in the process of being trained, upgraded. They handled most of the security, by the way, for election day, which is widely thought to have been a big success. This negotiation for leadership in Iraq is what you do in a democracy. They're in the process of deciding who's going to get to be prime minister. Who would have thought that would have ever been possible four years ago in Iraq?
The policy has been an enormous success, and our military should be praised for making it possible, not only for this to happen in Iraq, but the effect of that is making it happen all over the area. Egypt's talking about having a real election. They had a real election in the Palestinian territories. They even had something close to an election in Saudi Arabia. None that of would have happened without the president's decision to go into Iraq, which we supported.
MR. RUSSERT: How would you like to be the whip of the Iraqi parliament?
SEN. DURBIN: That's a tough job.
MR. RUSSERT: Senator Dick Durbin, Senator Mitch McConnell, Republican and Democratic whip, thank you both very much.
SEN. DURBIN: Thank you.
MR. RUSSERT: Coming next, our roundtable on the escalating battle over Social Security and the changing politics of the Middle East. Then our MEET THE PRESS Minute: almost 31 years ago right here on MEET THE PRESS, Alan Greenspan. All coming up right here on MEET THE PRESS.
MR. RUSSERT: Our political roundtable and MEET THE PRESS Minute with Alan Greenspan next, after this brief station break.
MR. RUSSERT: Welcome all.
Kate O'Beirne, you just heard Democratic Senator Dick Durbin saying Democrats will not sit down with the president, will not negotiate. All he has to do is take private personal accounts and set them aside and then everything else is on the table. Will the president, in order to guarantee solvency in the Social Security system, take private personal accounts off the table?
MS. KATE O'BEIRNE: Tim, I suspect he won't, but I also think the White House is encouraged by the kind of things Senator Durbin was saying this morning. They actually like where they are right about now. They would have told you--they did tell us a month or so ago, the indispensable predicate for doing anything on Social Security is convincing the public there really is a problem. Only when the public feels that way will Congress feel under enough pressure to get to the table and make some pretty hard choices. They're encouraged by polls this week, showing large majorities, some 65 to 72 percent saying, you know, Social Security really does have a serious fiscal problem. They see some movement on the part of Democrats who are now saying, "Well, maybe there are some things we ought to be doing."
And they're also encouraged by polls showing a narrowing in the gap on the question of which party you trust on Social Security. Democrats have long had a very big advantage there, but it's getting narrower so the Republicans are feeling a little more confident. And you heard Senator McConnell say even the democracy corps, James Carville's advising the Democrats, "The Republicans are beating you on seriousness. You can't just keep saying no." So the Republicans, the White House certainly, feels as though that's an environment that benefits them.
MR. RUSSERT: Paul Krugman, can the president say to the American people, "We have this Social Security solvency problem and private personal accounts, fix it"?
MR. PAUL KRUGMAN: Only if the Republican message machine does an even better job of obfuscation than it has so far. I mean, what's a--I think the White House has missed its window. They raced--you know, the idea was to roll over before anybody could ask questions about how this works. The--you know, with this--you yourself were saying that this kind of logic, well, there's a problem so let's have private accounts. But if anybody takes a look at how privatization actually works, their argument falls apart. And there--it has been slowed up enough that people are taking a look, and it does amount to a phase-out of Social Security as we know it and that's sinking in. I don't think they have way to make it work.
MR. RUSSERT: What about the Democratic strategy of refusing to sit down and talk until the president takes it off the table?
MR. KRUGMAN: Well, I think, that's--I think--I don't know about the political judgment, but it's right, from my point of view, because privatization has nothing to do with saving Social Security. It's only about undermining Social Security as an insurance system. It's only about trying to undermine the legacy of FDR, so that should not be part of the discussion, and I think the Democrats are right to say, "Until you say that's not what we're talking about, no deal."
MR. RUSSERT: Mike Allen, you covered George W. Bush at the White House. You now cover Capitol Hill. What are your people, sources on the Hill telling you, Republicans and Democrats, about the president's plan?
MR. MIKE ALLEN: Well, Tim, the truly indispensable predicate to getting Social Security is convincing Republican lawmakers that they can do this without losing the Congress, and they're not there. Republicans on the Hill do not have the passion for this that the president does. Now, they're having meetings down at the White House getting groups of--What?--20 Republicans who have concerns, as they call them, or are in tough districts, it's sort of time-out for off-message Republicans. The president is meeting with them. The whip, Roy Blunt of Missouri, told me the president literally sits on the edge of his chair at these meetings, tells them it was part of his victory in 2000, part of his victory in 2004, uses some of the lines he does on the stump on Friday. He said, you know, "This is going to be conservative accounts. You can't shoot dice with it. You can't put it in the lottery."
But then they go home where they're used to being lauded, and getting all this great treatment, and instead they have demonstrators in their town halls, they have long-time supporters who are asking them why they're doing this. And so the congressional leadership is saying, "The bus is leaving, get on the bus." But as one Republican explained to me, there's no sense of inevitability. Nobody's willing to stick their neck out. They're not sure that it's going to come to a vote.
MR. RUSSERT: Would the president ever take private personal accounts off the table in order to negotiate with Democrats?
MR. ALLEN: Well, the president on Friday described private and personal accounts as an add-on to Social Security, something extra. And that set off a lot of bells because Democrats said either he's being deceptive or he's completely changed his negotiating position. I checked on this. The White House says he has not changed anything. They said it's just how it came out and you won't hear that again.
The private accounts, personal accounts, individual accounts is essential to their idea of having more stock owners in the country, which they believe will mean more Republican voters, and putting it in a different way than Paul put it, they see it as a stake through the heart of the New Deal. It's not--you know, this White House talks a lot about changing the goalposts. If you suddenly get add-on accounts, that's the Clinton agenda. And there haven't been a lot of Bush things that were about finishing the Clinton agenda.
MR. RUSSERT: Where are we, Joe?
MR. JOE KLEIN: Well, it's kind of amazing and somewhat amusing to see the Republicans so much on the defensive on this issue right now. It's an unusual circumstance. I agree with Paul in that private accounts have nothing to do with solvency and solvency is the issue. I disagree with Paul because I think private accounts a terrific policy and that in the information age, you're going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads.
The Democrats have for the last 10 or 15 years blatantly, shamelessly demagogued this issue. They've offered nothing positive on Social Security or on Medicare or on Medicaid, and it's time for them to compromise here. It's also time for the Republicans to compromise here. One area where you might see, you know, some--one possibility is the old Washington standby, the demonstration project. We might try privatization for some younger, you know, Social Security recipients--not recipients but, you know, contributors, or we might try it in a city or a couple of places. We haven't--we don't know how it's going to work.
MR. RUSSERT: I'll let those on Capitol Hill work it out. We gave our best efforts here.
Let me turn to what's going around the world. E.J. Dionne in The Washington Post wrote this on Friday. "When the news from abroad is good, what is the political opposition to do? Should Democrats let President Bush crow about favorable developments in the Israeli-Palestinian conflict, Lebanon and Iraq? Should they crow with him? ... The turn in the Iraq debate is significant but fragile. Democratic criticism of Bush has abated because says, Kurt Campbell, a defense official in the Clinton administration, `Democrats must be rooting for victory in Iraq.'"
Paul Krugman, has the Iraqi election changed the terms of the debate regarding the president and the Democrats?
MR. KRUGMAN: Sure. It's a little bit harder to--I mean, someone like myself would say very strongly this was a war sold on false pretenses. It's actually greatly damaged America's position in the world if you look at it broadly, but there has been some good news lately and we're all glad about that and we hope for the best. You know, you can't be rooting for American failure. You know, we're all Americans. We all want to see things go well and you can't be rooting against democracy. You want to see it succeed.
Now, you know, the news may change. It's five weeks, still no government in Iraq. You know, it's starting to look a little bit like another one of those Kodak moments, you know, toppling of the statue and then the weeks go by and suddenly it turns out that it looked better than it seemed. But maybe it'll turn out well, but, you know, you have to just hope that this is a good thing.
MR. RUSSERT: Mike Allen.
MR. ALLEN: Well, Tim, what you're seeing is the beginning of trying to attach the president's positive developments in Iraq and separate him from negative. And I think this isn't imminent, but I think over the next year, we'll probably see the departure of Secretary Rumsfeld. I think people in the White House are a little tired of him and I think the idea will be to try to sort of attach Iraq baggage to him.
Our sister publication Newsweek on their cover this morning says: "Where Bush Was Right." And inside it says, "Bush really may change the world." This is a change that nobody could have imagined in this short a time. So the president can be out taking credit for the purple revolution even though people are seeing--you know, passing 1,500 debts, passing $300 million spent on this.
MS. O'BEIRNE: Tim, given the remarkable things that appear to be happening in that part of the world, I think the Democrats have to be extremely careful not to sound so resentful and pessimistic. They, of course, run the risk of being on the wrong side of history because something clearly seems to be happening there. Any party that appears to be welcoming a defeat for America because that's good for them politically is in a terrible position, and their traditional commitment to Democratic forces, fighting against repressive regimes, has been not much in evidence when they seem so unhappy or begrudging about these remarkable developments.
MR. RUSSERT: Were you surprised to see The New York Times editorial page say that this would not have happen but for the invasion of Iraq?
MS. O'BEIRNE: I think what they're doing is recognizing the facts on the ground. That's absolutely the case. None of this would be happening. We've had elections in Afghanistan. The Palestinians have had an election now. Something seems to be happening promising there, Iraq, of course, Lebanon, Egypt, Saudi Arabia. Of course, the predicate was doing what George Bush and this administration did in Iraq, the example of the brave Iraqis.
MR. KRUGMAN: Can I just say, Tim, look back at how Tom DeLay spoke during the intervention in Kosovo where he called--you know, he was defeatist. He criticized. He basically said, "You know, we're losing," and then was there one word of praise when the end result was democratic elections in Serbia? You know, just look at the difference between the parties here.
MS. O'BEIRNE: Paul, that's not bad advice again.
MR. KLEIN: That's hardly a role...
MR. KRUGMAN: But that's the point. The point is you're holding the Democrats...
MR. KLEIN: That's hardly a role model for Democrats.
MR. KRUGMAN: ...to a far higher standard than you would ever hold the Republicans.
MR. RUSSERT: Joe Klein, on this program Hillary Clinton was with John McCain and Hillary Clinton said, "No timetable. We can't do that. That would give a green light to the terrorists." Many Democrats now saying, "Even though you may have been for or against the war, now is not the time to be critical."
MR. KLEIN: Right. I was opposed to the war, but I think that once we went in there, there was no alternative but to go for a success. And, you know, it's still a very difficult situation. What you've had in the last week in Iraq is continuing, escalating and more targeted attacks by Sunnis against Shiites. And I think that--I just got back from the region. When you go in country after country after country, there is a rising tide of tension between Sunnis and Shiites. It's true in Lebanon. It's true in Syria. It's true in Iraq.
MR. RUSSERT: Kate O'Beirne, what's wrong with saying that as a Democrat? If you're concerned that the potential new prime minister may have terrorist ties or 1,500 Americans are dead or Iraq may turn into a civil war, Shiites vs. Sunnis? Isn't that the responsibility of an opposition party?
MS. O'BEIRNE: Tim, it seems sometimes, too frequently, that it's all they're saying. It's all they're saying. They breeze right past the enormous elections in Iraq: "Yeah, yeah, I suppose so, but huge problems are ahead, and we're not there yet." Well, of course that's the case. They're looking for the-- they're looking for nothing but dark clouds. And so it seems, as I said, resentful, like they're not welcoming these incredible developments that of course make the world safer, of course benefit America's national security. So I think the criticisms or the cautions have to be downplayed. They ought to be saying more in support of these democratic movements, explicitly more in support of them. I haven't heard that.
MR. RUSSERT: What are the Democrats on the Hill doing?
MR. ALLEN: Yeah. I think one place you may see the Democratic argument go is the opportunity cost of Iraq as you see problems in North Korea and Iran. $300 billion has been spent before on this, but the embassy by itself is going to be $600 million, the biggest in the world. The House Republicans decided this week to let them do it after Secretary of State Rice came up and made a personal plea for it. But Democrats say that they're going to use these requests for funds to--the president talks a lot about results. They're going to ask--use that as a chance to spell out exactly what's been done.
MR. KLEIN: I think that what Mike said before about the waning of Rumsfeld is really important. The time for aggressive military action is past. This is the moment for some really creative diplomacy, and diplomacy backed by money. What we need to do, like, in Palestine is help to build a Palestinian middle class. We have to support secular education in the region. There are all these things that we can do to help support democracy movements and moderates in the region that don't involve military action, and that's the pivot that the Bush administration has to make right now.
MR. RUSSERT: People in the streets of Lebanon demanding that Syrian troops get out. Joe Klein, you sat down with President Assad of Syria on Monday. He then on Thursday met with the Saudis, and we have pictures of that, where the Saudis leaned on him quite heavily to do the same. Yesterday he appeared before the Syrian parliament and said, "Well, I may have told Joe Klein we are getting out, but not so fast." What's going on?
MR. KLEIN: Well, you know, the president of Syria is continually being edited by his own government. It's really remarkable. I think that, you know, he tried to move some reformers in when he came in in 2000, and they were quickly ruled by the old Ba'athist war horses who actually do run the security services that run this country. He is in a terrible position. He's feeling tremendous pressure, and not least from the Saudis. A Saudi diplomat told me the week before last that what President Assad is looking at is a Sunni people power movement in Syria. And so he's sitting--well, in Winston Churchill's phrase about this area, he's sitting on top of an ungrateful volcano of a lot of different ethnic groups, and the same is true in Lebanon.
MR. RUSSERT: When President Assad escorted you to the door after your interview, he said, "Please send the message I am not Saddam Hussein. I want to cooperate." What did he say? Is he...
MR. KLEIN: "Help!" He's saying something like "Help!"
MR. RUSSERT: Well, is he afraid of military action against him?
MR. KLEIN: I don't think he's afraid of military action against him. I think he is feeling really constricted about what he can do. He knows that he has to reform that society. He knows that he has to open it up economically for sure. And he knows that he's under a tremendous international pressure right now, but he doesn't have the horses. He doesn't have the people in his government who can get him to that point.
MR. RUSSERT: Iran and North Korea.
MR. KRUGMAN: Yeah. I mean, there--I mean, this is the opportunity cost argument that Mike's making. I mean, the--we have--not only have we tied our forces and spent an awful lot of money, we've also enormously damaged our reputation. If you go back to what people were saying two years ago about U.S. hyperpower, about how the U.S. was this irresistible force--and now, even if it turns out well, which we all hope it does, the fact is the greatest power the world has ever known has been bogged down for two years fighting, really, an insurrection of about five million Sunnis. You know? And all of a sudden, the world is a lot less afraid of us. The Koreans are saying, "Hi! Look, we've got the bomb. You know, want to do something about it?" And it's very bad.
MS. O'BEIRNE: It's just...
MR. RUSSERT: Kate--let me get Kate O'Beirne in here. If George Bush looks back four years from now and says, "On my watch I liberated Iraq, but North Korea and Iran became nuclear weapons powers," will that be an effective foreign policy?
MS. O'BEIRNE: Well, an important point to make, Tim, is about American leadership. Look at Russia, Egypt, Saudi Arabia, other Arab countries rallying the French to the American point of view about Syria and Lebanon. Of course that's American leadership with our allies, who care as much as we do about stability in that region and in doing something about the terrorist threat that Syria poses.
George Bush, for a president--candidate in 2000, who expected to concentrate on domestic issues, certainly has an awful lot on his plate. But it seems pretty clear what history's going to say about him, they could not say about his father. George Bush--this George Bush does not suffer from a lack of a vision thing. He has enormously ambitious vision, and much of it, I think, is being vindicated, in its early stages at least, in what we're seeing in the Middle East.
MR. KLEIN: But he does suffer from a lack of the detail thing. And the detail work that should have been done in the Korean negotiations and with Iran hasn't been done. Those are going to be big problems. But just to get back to what Paul was saying, I think there's another side to this. I talked to Saudi dissidents and Syrian dissidents who said that they were thrilled to hear an American president say that 60 years of policy in that area was wrong, that we'd been supporting oppressive governments and that's wrong.
MR. RUSSERT: The Saudi foreign minister said, "We want to reform. We want to modernize. For God's sake, just leave us alone."
MS. O'BEIRNE: Not now. Not now.
MR. RUSSERT: This is all, obviously, in a political atmosphere. Mike Allen, quite interesting. One of the senators that you cover, Hillary Rodham Clinton of New York--let me show you the latest Gallup poll in terms of the presidential race for 2008. Hillary Clinton, 40; John Kerry, 25; John Edwards, 17. What is going on?
MR. ALLEN: Well, everybody's pining for a Senator Clinton-Secretary Rice race. The New York Times has an amazing story about outreach by Senator Clinton to Republicans, Republicans holding fund- raisers for her, Republican senators working with her. And Senator Clinton is obvious about everything she does, and she's had such a clear strategy of first being quiet, working on New York issues. And there's a clear strategy unfolding here to get her toward the presidential race.
Dr. Rice, when she's asked about running, always jokes about instead being football commissioner, but it's clear to everybody that's watching her that she's enjoying this role and might like another role. Republicans don't have an obvious person. There's a new primary for Republicans, the Mehlman primary, the Republican chairman, Ken Mehlman, has told all of them who want to run, you ought to raise money for the Republican Party as a first step forward getting help from President Bush.
MR. RUSSERT: As Professor Bob Schmuhl of Notre Dame keeps reminding me, this could be the first presidential election in 56 years where an incumbent president or vice president is not seeking the nomination of either party, Paul Krugman. How do you see things unfolding?
MR. KRUGMAN: I think it's just wildly up in the air. I mean, you know, there's enormous turmoil on the Democratic side trying to figure out--there's a lot of unity but there's a lot of turmoil about what the party stands for. And I just don't know. I mean, I can't--I dread the prospect of a Clinton run just because I think that would be--it would be an attempt to recreate the politics of the '90s when you had Bill Clinton, who was a president who managed to sort of triangulate. And I think we ought to have an election that's really about what what kind of country we're going to be and we won't have that if it's Hillary Clinton running.
MS. O'BEIRNE: Paul's right, though. There's so much attention paid to the Republicans on Social Security. Too few people, I think, are paying attention to the real disarray on the Democratic side.
MR. KRUGMAN: Right.
MS. O'BEIRNE: Paul represents the true believers who wouldn't want to see another Clinton presidency. And the grass roots, the active sort of angry grass roots that delivered the chairmanship of the party to Howard Dean might not want to see that kind of a presidency. But I think Hillary Clinton is a stronger candidate in that environment. She's such a known quantity that she has a lot of running room. She can move pretty significantly to the right, I think, and keep--she's been solid on national security--and keep an awful lot of those angry liberals on the reservation.
MR. RUSSERT: Well, what about the Republican side? John McCain, Rudy Giuliani, much different ideologically than, say, Senator Bill Frist or Governor Huckabee of Arkansas or Governor Romney of Massachusetts. It's not one big unified monolithic group.
MS. O'BEIRNE: No. Nor is the field ever on the Democratic side, although, unlike 2008, there's typically sort of an establishment front-runner. But the nominating--I think, the Republican primary voters are a fairly unified bunch. It's going to be a pretty conservative candidate.
MR. RUSSERT: Can you be pro-abortion rights, pro-gay rights, pro-gun control and be nominated by the Republican Party?
MS. O'BEIRNE: I think that would be extremely difficult. Probably not, Tim.
MR. RUSSERT: Go ahead.
MR. ALLEN: A problem for Senator Clinton, she's not going to be able to choose where to position herself, who the Republicans run against her. The Republican machine is going to run against the old Senator Clinton.
MR. KLEIN: Paul, I have a question for you: What was it about the peace and prosperity of the eight years of the Clinton administration that you didn't like?
MR. KRUGMAN: No, I liked the way the country ran.
MR. KLEIN: I think that he had a real governing philosophy. It wasn't triangulation. It was moving us from the industrial age to the information age, and that's where the Democratic Party is going to have to move...
MR. KRUGMAN: There's a radical right...
MR. KLEIN: ...if it wants to have any role in American politics.
MR. KRUGMAN: There's a radical right challenge to America as we know it that's under way, and I think the Democrats--I mean, maybe Hillary Clinton can do this. I'm actually not opposed to her, right? But they need to make clear that they are going to turn back that tide, not blur it.
MR. KLEIN: The answer to a radical right challenge isn't a reactionary left response.
MR. RUSSERT: To be continued. Joe Klein, Mike Allen, Paul Krugman, Kate O'Beirne, thank you all.
Next up, Alan Greenspan warned about deficits this week and you'll see what he said 31 years ago right here on MEET THE PRESS.
MR. RUSSERT: And we are back.
Democrats and Republicans, liberals and conservatives usually find something in Federal Reserve Chairman Alan Greenspan's testimony to praise or criticize. Here he is on MEET THE PRESS as President Gerald Ford's chairman of the Council of Economic Advisers almost 31 years ago.
(Videotape, September 29, 1974):
MR. IRVING R. LEVINE (NBC News): Mr. Greenspan, you repeatedly stressed this morning the importance of cutting government spending. You've attributed the inflationary problem to a large measure to increases in federal spending. That has been a fundamental and key part of the pre-summit White House economic policy. Would those policies have worked had they been given time?
MR. ALAN GREENSPAN, (Chairman, Council of Economic Advisers): Well, actually, Mr. Levine, I'm a little puzzled by the numerous discussions around that tight fiscal policy has been tried and has found--been found wanting. I think if you look at the figures, we've been running deficits almost indefinitely over the last decade and a half, and I find it real--a bit rather puzzling as to why people somehow read these numbers in some manner as though we had some fiscal responsibility. We haven't. I think it's about time we started.
MR. RUSSERT: Deficits, deficits, deficits, then and now. And we'll be right back.
MR. RUSSERT: That's all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.
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