Watch this broadcast on Video: Part 1, Part 2, Green Room (not transcribed)

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JAKE TAPPER (ABC NEWS): As our "Roundtable" takes their seats, take a look at how "Saturday Night Live" portrayed the President's speech on Thursday, pitching reform to Wall Street executives.

COMEDIAN ("SATURDAY NIGHT LIVE"): I pointed out that what they're doing is wrong and illegal. And that they were all going to spend eternity in hell. But in the end, they just weren't on board. Ultimately, I think their opposition to reform comes down to the fact that they really, really like the way they do things now.

JAKE TAPPER (ABC NEWS): And we're joined now by our "Roundtable," as always, George Will, Cynthia Tucker of the Atlanta Journal-Constitution, Paul Krugman of the "New York Times" and Alexis Glick, former vice president at Fox Business News. Thank you all for joining us. George, does this legislation end too-big-to-fail?

GEORGE WILL (ABC NEWS): No, because that's not the problem. It's - we all sort of sympathize with Sherrod Brown and Senator Kaufman's idea that if it's too big to fail, it's too big to exist. The problem is it's not scale, it's connectedness that poses so-called systemic risk. And what people are arguing about is whether or not they've accurately located risk to the entire system. This is an unusual argument. Usually in Washington when there's controversy about a bill, the two sides agree about what the bill does but not whether it ought to be done. In this case, there's an argument about whether or not the bill will actually do what it sets out to do. Both sides want to guarantee the obliteration of certain kinds of failed firms. They want the management to go and they want shareholder equity to disappear. So it's a competition to see who can be most beastly to these bad companies. And the question is whether or not this happens.

JAKE TAPPER (ABC NEWS): Cynthia, it's unclear right now if there's going to be a bipartisan compromise, but you heard Senator Corker say that the negotiations should continue. You don't really have a lot of faith in that.

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): No, and the Democrats don't either, for good reason. We saw this tactic used with health care reform, when Max Baucus was given months to negotiate with Republicans. At the end of the day there was not a single Senate Republican voting for health care reform. So, you know, Mitch McConnell came out just a few weeks ago and said, let's start over with this financial reform bill. That was the very same tactic used with health care reform. So Democrats need to be leery of this idea of negotiate, negotiate, negotiate. It gives the lobbyists time to lobby more, give more campaign contributions, and it gives the Republicans time to foment opposition by mischaracterizing the bill. So I think Chris Dodd is very leery of negotiating.

JAKE TAPPER (ABC NEWS): Well you know what, can I interject for one second on the campaign contributions, and I'll come to you in a second, Paul.

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GRAPHICS: BIG MONEY

JAKE TAPPER (ABC NEWS): But the Center for Responsive Politics did a study of campaign contributions, and in this cycle, the finance, insurance and real estate sectors are giving much more to Democrats than to Republicans - $65 million to $51 million.

JAKE TAPPER (ABC NEWS): Paul, do you think the Democratic Party is too close to Wall Street?

PAUL KRUGMAN (NEW YORK TIMES): Well, it has been in the past for sure. No question that in the late '90s, the Clinton team - some of whom are now, you know, in the administration - were way too close to Wall Street. They believed that these were wise men who knew what they were doing. And now at this point, you know, it's the party in power, of course it's going to be getting a lot more contributions. It's kind of - that's not too surprising. Let me say a couple of things here. Anyone who says we need to be bipartisan should bear in mind that for the last several weeks, Mitch McConnell, the Senate minority leader, has been trying to stop reform with possibly the most dishonest argument ever made in the history of politics, which is the claim that having regulation of the banks is actually bailing out the banks. And basically, the argument boils down to saying that what we really need to do to deal with fires is abolish the fire department. Because then people will know that they can't let their buildings burn in the first place, right? It's incredible. So anyone who says bipartisan should say, you know, bipartisan doesn't include the Senate minority leader. But, you know, I agree with George, actually, believe it or not. Too big to fail per se is not the problem. You know, the Great Depression was made possible by the failure of the Bank of the United States, which despite its name, was a Bronx-based institution that was the 28th largest financial institution in the United States at the time, and yet brought the whole system down. But what we are getting is now in this bill is a way to have graceful failure of big institutions, right? We know how to deal with small banks. The FDIC seized seven banks last week that were on the verge of failing and let them - you know, liquidated them gracefully. But we don't have a way of dealing with complex, you know, what we call shadow banking institutions like Lehman or Citigroup. And this bill would give you that. So it would give you the ability to do for big, complicated financial institutions what we've been doing routinely for small ones, and that does - so it doesn't end the too big, but it may deal with the fail bit.

JAKE TAPPER (ABC NEWS): Alexis, you, unlike a lot of business journalists, actually have worked in business. You've done trading at Goldman Sachs, at Morgan Stanley. What do you think of this regulation bill? Do you think the derivatives monitoring and separation that Senator Lincoln is trying to do, do you think that goes too far?

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): Well, look, bottom line is, I think when you look at the derivative equation, do we need transparency? Should there be a central clearing facility? Absolutely. It is without a doubt the Wild West. It is all about that shadow banking market, that black market. We have not been able to see who is on the other side of that transaction. I do believe that it's going too far to say that large financial institutions cannot have a derivative business. Believe you me, I don't want to see one American deposit in this country used as a tool to go out on a proprietary basis for a firm's capital to go out and trade in derivatives. I don't like that. But when you come back to this too big to fail, just to pick up on what you said, the FDIC has done a phenomenal job throughout this financial crisis. No depositor has lost a dime. They have been able to wind down financial institutions in a very, very smart and effective way. The question here on resolution authority is what about those...

JAKE TAPPER (ABC NEWS): The ability of the government - I told you I'd do this - the ability of the government to step in and wind down a financial institution that's failing. Go.

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): Good job. The bill - the question here is all those other institutions who have a financial arm, as we talked about earlier. It's the GM situations where they have a finance arm, it's the GE Capitals of the world. Where do these guys fit into this equation when they may be in the manufacturing business or in other business?

GEORGE WILL (ABC NEWS): That's precisely what worries Republicans. They think this is a thin end of an enormous wedge that is going to get the government deeper into treating capital and credit in this country as a public utility, to be priced and allocated here in Washington, which is, they think, inevitably a recipe for something like crony capitalism because you have somewhat not slippery, but open-textured definitions - non-bank financial institution. Well, GMAC gets General Motors brought under TARP, and in this case, GE Capital would get all of General Electric, or would it? We don't know. Would it be a segment of General Electric brought under this bill?

PAUL KRUGMAN (NEW YORK TIMES): And yet there is no alternative. Meaning if we only protect banks in the traditional sense, which are big marble buildings with rows of tellers, you're missing 60% of the modern banking system. The fact of the matter is, there are lots of things out there, money market funds, repo, I don't even want to get into it, but things that functionally play the same role as bank deposits, that can destabilize the economy the same way as bank deposits, and so we have to bring those under the umbrella. Now, we can quibble with details, but something like this has to be done.

JAKE TAPPER (ABC NEWS): Let me just interject for one second. We're going to take a quick break. And when we come back, our "Roundtable" will take up Arizona's crackdown on illegal immigrants and what will the impact be on immigration reform, and later, "The Sunday Funnies."

JAY LENO (HOST): He just played golf for the 32nd time in his presidency. He sent more troops to Iraq, wants more oil drilling, gave billions to Wall Street. Rush Limbaugh said he wanted a Republican president, he got one.

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GOVERNOR JAN BREWER (REPUBLICAN): I've decided to sign Senate bill 1070 into law. Order related violence and crime due to illegal immigration are critically important issue for the people of our state.

PEDESTRIAN (MALE): People are angry. People feel held down.

PEDESTRIAN (MALE): The federal government isn't doing anything for us. The state has to do something.

SENATOR JOHN MCCAIN (REPUBLICAN): Our border is not secured, our citizens are not safe.

PRESIDENT BARACK OBAMA (UNITED STATES): The failure to act responsibly at the federal level will only open the door to irresponsibility by others. And that includes, for example, the recent efforts in Arizona which threaten to undermine basic notions of fairness that we cherish as Americans.

JAKE TAPPER (ABC NEWS): Some sound from the heated debate over Arizona's new immigration law. Fodder for us here on our "Roundtable." We're joined as always by George Will, Cynthia Tucker of the "Atlanta Journal-Constitution," Paul Krugman of the "New York Times," and former vice president of Fox Business News, Alexis Glick. That's a mouth full but I got it every time. Let me start before we discuss this bill and what it actually does by going into one of the most controversial provisions in this new law, Arizona Senate bill 1070.

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JAKE TAPPER (ABC NEWS): "For any lawful contact made by a law enforcement official, where reasonable suspicion exists that the person is an alien who is unlawfully present in the United States, a reasonable attempt shall be made when practicable to determine the immigration status of the person." "Reasonable suspicion" that the person is an alien. What does that mean, George?

GEORGE WILL (ABC NEWS): Well, the Fourth Amendment says there should be no unreasonable searches and seizures, and we've generated volumes of case law trying to sort out what that means over the last century or so. So it's not clear what that means. Let me say this about Arizona. They have 460,000, an estimated 460,000 illegal immigrants there. So before Washington lectures Arizonans on irresponsibility, perhaps Washington ought to attend to the essential attribute of national sovereignty which is to control the borders. We are the only developed nation in the world with a 2,000 mile border with an undeveloped country and we have a magnet of a welfare state to the north. So this is not Arizona's fault. Beyond that, this should be said however. Reasonable suspicion is going to put upon the police of Arizona a terribly difficult job. This is what the governor said. "We must enforce the law evenly and without regard to skin color, accent or social status." I don't know how do you that.

JAKE TAPPER (ABC NEWS): Well Cynthia, how do you do that? The governor put out an executive order saying that there should be no racial profiling with this law. But how - if you're a policeman and you've been told - and by the way, you can be sued now under this law if you're not doing enough, if the citizens are not - are convinced that you're not doing enough to crack down on illegal immigration. If you're a policeman, what's enough? What's reasonable to think somebody might be an illegal immigrant?

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): Well Jake, several law enforcement agencies have actually opposed the bill. Not only for that reason, because they have no idea what it means to say reasonable suspicion. A California Republican has said you can tell an illegal immigrant by the shoes they wear. Of course this is an invitation to racial profiling. Everyone with a Spanish surname, everyone with a certain look, you may or may not be Latino. There are people in my family who look as if they could be Latino. It harkens back to apartheid when all black people in South Africa were required to carry documents in order to move from one part of town to another. And let me just say this about Arizona's problems with the border, it is absolutely true that Arizona has problems with the border. A rancher was killed apparently by drug smugglers. But this has absolutely no bearing on that problem. All it does is open the doors for harassment of citizens.

JAKE TAPPER (ABC NEWS): Let's you talk about that rancher for a second. His name was Robert Krentz. He was killed in March. Here's a friend of his, Steve Brophy, talking about his friend's death.

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STEVE BROPHY (KRENTZ'S FRIEND): We cannot allow a border in our country that is akin in lawlessness to that of West Waziristan in Pakistan. It's simply intolerable, not just for Rob Krentz, not just for the Krentz family but for her entire country.

JAKE TAPPER (ABC NEWS): Doesn't he have a point, Paul? I mean this is a federal failure at the border.

PAUL KRUGMAN (NEW YORK TIMES): Yeah, we have never put in enough money basically is what it comes down to, to enforce the border control. It's not a - it's not a deep issue of principle, it's just a question of resources. People have been willing to be very - you know, talk tough about it but actually not willing to, you know, do reasonable stuff in terms of enforcement. And it's going to be a problem. But, you know - what I want to go back to here is not just apartheid issues but think about it a different way. We have these massive protests in this country about alleged authoritarian tendencies that we are going to have some kind of you know - you know leaving aside the Obama as Hitler stuff - the idea that the government is encroaching too much in our lives. And now all of the sudden, we have by pretty much the same people, demanding that we set up a system that will turn us into one of those apocryphal, you know, foreign authoritarian regimes where the police are always saying hand over your papers, right, a world where you constantly have to prove who you are. And yes, it will be racial profiling but who knows what else? I mean, some people tell me I look like President Lula of Brazil, so I might end up being pulled over when I'm on my morning walk, right?

JAKE TAPPER (ABC NEWS): I think you're much better looking than the President of Brazil.

PAUL KRUGMAN (NEW YORK TIMES): I don't drink as much, but anyway...

JAKE TAPPER (ABC NEWS): But you know, it's interesting that you say that, because you are not the only one to evoke that, let me see your papers thing.

PAUL KRUGMAN (NEW YORK TIMES): Right.

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JAKE TAPPER (ABC NEWS): Cardinal Roger Mahoney on his blog wrote, "American people are fair-minded and respectful. I can't imagine Arizonans now reverting to German Nazi and Russian Communist techniques whereby people are required to turn one another in to the authorities on any suspicion of documentation."

JAKE TAPPER (ABC NEWS): And now, Alexis, we have Senator Harry Reid and President Obama talking about immigration reform again. We thought it was dead, we thought it wasn't going to be brought up, but it looks like this is going to be a big issue in Washington.

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): You know, I think at first glance, most people say hey, wait a second. We're been trying to tackle too much too quickly. But the bottom line here is if - this is a bill that will be the catalyst, if what has happened in Arizona is the thing that gets people moving in Washington, DC to address things like the border, then so be it. I saw Senator Lindsey Graham came out the other day and said oh, wait a second, I've been working, I'm not going to show up at the conference on cap-and-trade because we said cap-and-trade is first before we're going to address - or climate change is first before we're going to address immigration. The bottom line, we have to address immigration. 11 million immigrants in this country. We have got an unemployment rate in this country at a 26, 27-year high. We have to address citizens and what they are going to take of the piece of the pie, what they should get in addition to what taxes they should get, what services they're going to be offered. This is an issue that has been plaguing us. We've got to address it.

GEORGE WILL (ABC NEWS): Again, in defense of Arizona, a large majority of Arizonans support this bill and a large majority of Arizonans are not, by definition, the fringe of the state. They are temperate, decent people with a huge problem. What the Arizona law does is make a state crime out of something that already is a crime, a federal crime. Now, the Arizona police - and I've spent time with the Phoenix Police Department - these are not bad people. These are professionals who are used to making the kind of difficult judgments. Suspicion of intoxicated driving, all kinds of judgments are constantly made by policemen. And I wouldn't despair altogether their ability to do this in a professional way.

JAKE TAPPER (ABC NEWS): And we should point out, some police organizations in Arizona do support it, although Cynthia, it's interesting, President Obama had this to say on the North Lawn of the White House, or I'm sorry, in the Rose Garden of the White House the other day, even before the law was passed.

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PRESIDENT BARACK OBAMA (UNITED STATES): I've instructed members of my administration to closely monitor the situation and examine the civil rights and other implications of this legislation. But if we continue to fail to act at a federal level, we will continue to see misguided efforts opening up around the country.

JAKE TAPPER (ABC NEWS): Okay, obviously that's a call for immigration reform, but in addition, is he asking his Justice Department to look into whether or not they should block this law?

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): No, I think they are looking - first of all, I think the Justice Department lawyers and the Civil Rights Division probably spent the weekend trying to figure out what they could do, looking at the bill itself, the law now, and trying to figure out where there might be civil rights violations. Unreasonable search and seizure is one place for them to look. But the Justice Department doesn't have to do anything. There will be other organizations that have already said that they are planning lawsuits against this. So it will be in court shortly. Let me say this about immigration reform, though. If we thought health care reform was divisive, this is going to be an all-out battle, and will even create fissures in the Democratic Party. That's why Speaker Pelosi has said we will act, but only if the Senate acts first.

JAKE TAPPER (ABC NEWS): Yeah, she's no fool. The Senate - President Obama has been saying that there were - pointing out that there were 11 Republican senators who supported immigration reform in 2007 when it failed, and suggesting that they need to support it now. I don't think they're going to support it, though.

PAUL KRUGMAN (NEW YORK TIMES): Well, politically, though, this is one of those issues that cuts right through the middle of both parties. I mean, the Democrats, it's on the one hand, Democrats tend to be pro-labor, which means they're worried about immigration. On the other hand, they tend to be - you know, it is the party that now gets most of the Hispanic votes, it's the party that generally is for inclusiveness. So Democrats are divided. Many of them divided within their own hearts. It's an interesting thing. It's not so much different wings of the party as each individual Democrat tends to be kind of torn about this. Republicans are divided between the sort of cultural conservative wing, the preserve America as the way it is, and the business wing, which likes having inexpensive immigrant labor. So this is one heck of an issue. It's going to - it's deeply divisive among both parties, which is one reason not to rush it, to push it at the top of the agenda right now. I'm kind of upset at the notion that this might push climate change off this year, because we don't do climate change legislation. I'm ready for that one, George. If we don't do that this year, we won't do it for quite a few years to come.

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): I thought one of the most interesting things is Senator McCain's stance on this, someone who talked a lot on the campaign trail and has been very vocal about needing comprehensive immigration reform. I understand he's fighting a tight race and a tight battle there, but I thought that was very telling, when you go back to what - how will this impact the mid-term elections. Is this about what will happen to that Hispanic vote? Is this about what you need to do in these short-term elections to get the necessary votes? I thought that was a very telling sign that in the last hours, he decided to back it.

GEORGE WILL (ABC NEWS): But the problem, as in my judgment with health care, is that word comprehensive. Instead of making little, bite-sized, incremental improvements, we have to do everything at once. That's partly because this is all being held hostage by the immigrant advocacy groups in the country. But if we would close the border, guarantee that we were not going to have serial amnesties far into the future...

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): So put the 3,000 troops on the border as McCain suggests.

GEORGE WILL (ABC NEWS): Build the fence, do what McCain suggests, and you'll find that the American people are not xenophobic, they are not irrational on this subject, but they do want this essential attribute of national sovereignty asserted.

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): And where does the money come from for that, George? I mean...

GEORGE WILL (ABC NEWS): It's a rounding error on the GM bailout.

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): Sealing the border would be much more difficult than advocates for that idea suggest. It is a very long border, 2,000 miles, George.

JAKE TAPPER (ABC NEWS): We're only talking about the southern border, right? We're not trying to keep the Canadians out?

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): The southern border...

GEORGE WILL (ABC NEWS): You're profiling.

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): You'll get in trouble.

PAUL KRUGMAN (NEW YORK TIMES): They're kind of different from you and me, eh?

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): And the technology doesn't work that we thought we could depend on, doesn't work nearly as well as its advocates suggested either. So we're talking about people, standing up border guards, National Guard, Army troops on the border if we really want to seal it off.

PAUL KRUGMAN (NEW YORK TIMES): The truth is, in the modern world, sealing borders is a lot harder than you anyone imagines. Nobody is able to keep out at least a fair amount of illegal immigration. The Europeans can't. The Japanese can't. Japan is an island, and it's very easy to tell who's not Japanese, and even so they have a lot of illegal immigrants.

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): But you concede to George's point of view, as I was saying to you guys before, when I sent out a message on Twitter about this and I said to people, what do you think about immigration reform? A lot of the messages I got back were from people in Arizona who say they support this bill because they see what's going on, on a day-to-day basis. Now, I don't agree with it. I think there is a very dangerous precedent being set, but what it does show you is that more and more states, particularly on the border there, are going to have to address this on their own if we don't take it up as a bigger issue.

JAKE TAPPER (ABC NEWS): I want to get to one other state very, very quickly, because we only have a couple of minutes, and that is in the next week, we're going to have a decision from the governor of Florida, Charlie Crist, who is running for Senate, about whether or not he is going to drop out of the race.

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JAKE TAPPER (ABC NEWS): The latest Quinnipiac poll shows that the former speaker of the Florida House, Marco Rubio, would wallop Crist in a Republican primary, 56% to 33%.

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JAKE TAPPER (ABC NEWS): But if Crist runs as an independent, George, Crist 32%; Rubio 30%; Democratic Congressman Kendrick Meek, 24%. Very quickly, isn't this his only option?

GEORGE WILL (ABC NEWS): No. He could lose honorably, as has happened before with other people, wait two years, and run against an incumbent Democrat, Senator Nelson. Or having experienced a 50-point swing against him in about six months, he can go off. He has already lost his campaign manager, former Senator Connie Mack. He's infuriated by vetoing an education reform bill to curry favor with the teachers unions Jeb Bush, the most popular politician in the state. This is hara-kiri on the part of this man.

JAKE TAPPER (ABC NEWS): Paul, very quick.

PAUL KRUGMAN (NEW YORK TIMES): This is the narrowing of the Republican Party. Republican Party has swung hard right. There is no room for a moderately conservative but still middle-of-the-road politician in it, and Charlie Crist has just found that out, rather late in the game I might say.

JAKE TAPPER (ABC NEWS): Cynthia?

CYNTHIA TUCKER (ATLANTA JOURNAL CONSTITUTION): You know, he has - his politics haven't changed. He has always worked across the aisle with Democrats. He's always been moderately conservative. But this shows how much the Republican Party in Florida has changed. It's that hug, when President Obama came to Florida to talk about the stimulus package, there was that moment in video where they did a man hug, and that is killing Charlie Crist and the Republican Party.

JAKE TAPPER (ABC NEWS): Alexis, very quickly, how much of this is about the stimulus, about the fact that Crist embraced the stimulus?

ALEXIS GLICK (FORMER FOX VP OF BUSINESS NEWS): Absolutely bingo. To me, this is the perfect example for Republicans across the country who will say hey look I didn't support the stimulus package. Look at what's happening to a guy who did support it. I think that's going to be a big issue of debate here. And I also think the second issue is Tea Party. Rubio supported by the Tea Party. If the Republicans want to figure out how to embrace Tea Party candidates, here's an example.

JAKE TAPPER (ABC NEWS): All right, well, "The Roundtable" will continue in the green room on ABCNews.com, where you can also check out our fact checks.

JAKE TAPPER (ABC NEWS): And take a look at this, you can now interact with your friends on our new Facebook widget. See what they have to say about what we had to say. Coming up here, "The Sunday Funnies."

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Originally broadcast, 4.25.10