This Week, May 31, 2009: The Roundtable with Paul Krugman, George Stephanopoulos, George Will, Ed Gillespie, Gwen Ifill, and Jan Crawford Greenburg

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


GEORGE STEPHANOPOULOS (ABC NEWS): We're going straight to "The Roundtable." So as our panelists take their seats, take a look at how two other Supreme Court firsts grapple with the question of how their personal experience affected their professional judgment.

SANDRA DAY O'CONNOR (SUPREME COURT JUSTICE): Looking back over time, I can't see that on the issues that we address to the court that a wise old woman is going to decide a case differently than a wise old man. I just don't think that's the case.

CLARENCE THOMAS (SUPREME COURT JUSTICE): There's so many people now who will make judgments based on what you look like. I'm black so I'm supposed to think a certain way. I'm supposed to have certain opinions. I don't do that. You don't create a box and put people in and then make a lot of generalizations about them.

GEORGE STEPHANOPOULOS (ABC NEWS): And with that, let me bring in our "Roundtable." I'm joined as always by George Will, our Supreme Court Correspondent Jan Crawford Greenberg, Ed Gillespie, veteran of the Bush White House where you helped both Justice Alito and Justice Roberts in their confirmation hearings, Paul Krugman of "The New York Times" and Gwen Ifill of PBS. And George, it does seem like the central question right now, to what extent should and do personal experiences, feelings, instincts affect judgment on the court?

GEORGE WILL (ABC NEWS): Hard to say. In that the question is not are they important, but is there a judicial obligation, is it part of the judicial temperament to keep those in the background. The question is she seems to have affirmed what's called identity politics which is a main proposition and a sub proposition. The main proposition is, that an America is or should be thought of as his or her race, ethnicity, sex, sexual preference, that that should define their political identity. And the sub proposition is, called categorical representation, you could only be represented by someone of the same sexual, ethnic, racial group as you are because only they understand or emphasize with you. That is of no relevance whatever to the court however because it's not a representative institution.

GWEN IFILL (WASHINGTON WEEK): I guess I see it differently. I mean, I've spent the past year talking to a lot of people who got elected, black elected officials for a book, and all of them talked about identity politics and, and, and defined it differently. They defined it as being, that being part of what you are, but not all of what you are. And I think that's what defenders of Sonia Sotomayor are trying to say. Which is that her point was, yes, what she is and what we all are shapes us. But it's not all that shapes you. I always take arguments like this and try to turn them on their heads. And I never hear people say that for a white male, that his identity politics if he is shaped by his white maleness and by the things that affected his life and whether privilege affected his life. That's never considered to be a negative. It's only considered to be a negative when ethnicity is involved or race is involved or gender is involved.

JAN CRAWFORD GREENBURG (ABC NEWS): Well, the problem though I think for Judge Sotomayor, and obviously we've seen this week in Justice Alito's confirmation hearings when he talked about how his life experience as being the son of Italian immigrants affect his thinking when he's taking up immigration cases or discrimination cases. But with Judge Sotomayor in that speech, she also said a line before we got to the now famous line, and you played this clip from Justice O'Connor when Justice O'Connor is saying that I think a wise old man and wise woman judge will reach the same result. In that speech, Judge Sotomayor says I don't think I agree with Justice O'Connor on that. So, she's really going beyond life experiences.

GEORGE STEPHANOPOULOS (ABC NEWS): But I actually think that's less controversial than the sentence that's gotten the attention. I mean, had Judge Sotomayor said reached a different conclusion than a white male, it probably wouldn't have been a problem. But Ed Gillespie, let me bring you in on this, a lot of studies have shown that who you are does change. When you have more women on a panel, that does tend to change how, how panels of judges deal with discrimination cases.

ED GILLESPIE (FORMER BUSH ADVISOR): We are all shaped by who we are and we bring that to the table. I do think, though, you know, the conscious injection that you see in a lot of her comments of gender and race is what is causing for concern. And not only, a little different with politicians I think are identity than with a judge. And with a Supreme Court justice for a lifetime appointment. Look, I disagree with my friends on the Republican side. Some who say well we should give her a pass because she's a Latina. I disagree with those who say well she's racist because of these comments. Neither of that is the right approach. The fact is, you know, look, we can all as Americans be proud that the first African American president just nominated the first Latina to the Supreme Court of the United States. But we need to ask the, the tough questions. And frankly, I don't think those questions are so much revolving around race or gender as how did, how did it end up that seven of your cases that went to the Supreme Court, six of them were overturned. That's a legitimate question to ask.

GEORGE STEPHANOPOULOS (ABC NEWS): Actually that's three out of six, but not that exceptional is it for cases going to the Supreme Court.

PAUL KRUGMAN (NEW YORK TIMES): Yeah, you know, what amazes me about all this is that this is was a speech. Right? The famous line comes from a speech where she was trying to be entertaining. And, you know, have I - I always think about this, have I somewhere along the line said something like I would like to think that bright Jewish kids from suburban New York make the best economists? I probably have some along the line. It doesn't mean anything, right? She's trying to make a little bit of who she is.

GEORGE STEPHANOPOULOS (ABC NEWS): Well you're not going to have to worry about the Supreme Court now, Paul.

PAUL KRUGMAN (NEW YORK TIMES): But the judicial record shows nothing of this. The judicial record shows a straight, mainstream careful judge. And this is just crazy to be making so much out of this line.

GEORGE STEPHANOPOULOS (ABC NEWS): Jan, you studied her opinions. What does, if you look broadly at her, at her record, her judicial record, you know, you saw going into this, a lot of liberals were hoping the President was going to appoint a firebrand. He was sending signals to both sides. You heard Senator Schumer say he believes she's got a moderate record.

JAN CRAWFORD GREENBURG (ABC NEWS): Well, they're pretty - you know, she's an appeals court judge, an experienced judge. They're pretty technical, a lot of them. You know, you don't get a lot of those hot button issues on that New York-based federal appeals court. Those social issues that you see kind of out in the Heartland. So, you know, there's not a lot there for Republicans at this point to work with. We've seen a lot of discussion about a case that's now before the Supreme Court that she was involved in, involving these white firefighters from...

GEORGE STEPHANOPOULOS (ABC NEWS): The New Haven case we just talked about.

JAN CRAWFORD GREENBURG (ABC NEWS): ... New Haven. And so, you know, I think that one's going to be, obviously, pretty controversial. But her opinion in that - her opinions that we've seen so far, there's not a lot in them that we saw from some of the other potential contenders.

GEORGE WILL (ABC NEWS): In the New Haven fireman case, however, the accusation is not just that she came to a perverse conclusion, or affirmed a perverse conclusion, which was that because fire department promotions were denied equally to those who qualified for them and those who didn't qualify for them somehow equal protection and equality under the law was respected. What - the accusation goes beyond that, which is that the three-judge panel on the Second Circuit, that in a most perfunctory, cursory, indeed, unsigned affirmed the lower court's judgment, did in a perverse way. That seemed to be trying to slip one by a majority of the Second Circuit.

GEORGE STEPHANOPOULOS (ABC NEWS): It's interesting that SCOTUS blog, Tom Goldstein, has also looked at that question and say it's not that exceptional in these kinds of cases. I think he says 24 out of 28 times there have been unsigned opinions. But let me look also, Gwen, at what Jan was talking about. These hot button issues. Not much of a record at all on abortion. In fact, the one time, or the two times that the that judge ruled on abortion, one time she upheld President Bush's Mexico City family planning policy, and one time ruled in favor of anti-abortion protesters. And this caused some concern among...


GEORGE STEPHANOPOULOS (ABC NEWS): On the left, pro-choice groups. Yet, the White House comes out and says we're comfortable with where she is.

GWEN IFILL (WASHINGTON WEEK): We're confident she shares the President's philosophy is what they're saying. Is anybody as surprised as I am that abortion has been so little an issue when for so many Supreme Court confirmations it has been the main first thing out of the box. It's almost as if whatever, it's identity politics or whatever you want to call it, has, has taken its place as the litmus test issue. I, I talked to people at the White House this week who said, you know, it doesn't bother me at all that she doesn't have much of a record on abortion. They're perfectly happy to change the subject and have it move on to something else. And well they should be, I suppose, except, they've got to be prepared to handle the something else.

GEORGE STEPHANOPOULOS (ABC NEWS): But do - you know, and they say the President is comfortable with it. But they say, that he did not ask her directly.

GWEN IFILL (WASHINGTON WEEK): You know what, that was a very clever thing. They were asked whether he asked her. And they said, he did not ask her in his conversation with her. In fact, it would have be malpractice if someone didn't ask her. They had maybe 100 people working on vetting this woman. So somebody somewhere examined every single thing she did.

GEORGE WILL (ABC NEWS): Gwen referred to the something else's.


GEORGE WILL (ABC NEWS): Let me tell you three something else's that are going to come up. She has said that campaign contributions are inherently kind of bribes. Now that would overturn campaign finance regulation and, and, and postulate whole new laws if she adhered to that. Second, she has suggested that disenfranchisement of felons, which is a state option, and most states to some degree or other do that, violates the Voting Rights Act. And third because of a subject we'll come to in a moment, that is gay marriage, same-sex marriage, they're going to want to know if that is an equal protection question.

GEORGE STEPHANOPOULOS (ABC NEWS): Is that what you think, Ed? That Republicans are going to go here? What kinds of questions do you think are going to draw the most attention?

ED GILLESPIE (FORMER BUSH ADVISOR): Well I think, I actually think abortion will come up in the hearings, obviously, and I think where the media's concentration has been over the past week and where the hearings goes could be two very different things. And I do think they will probe in terms of whether or not this notion of empathy, you know, is going to be brought into bear. How much do you, you know, of your own personal feelings do you bring into, into your judgment as a - or would you as a, as a justice on the Supreme Court? And I think the challenge for Republicans is going to be at the end of the day, will they adopt the standard that Democrats applied to particularly Justice Alito and say well you may be qualified in terms of intellect and experience and judicial temperament, but we disagree where - with where we think you may rule down the line and 40 out of 44 voted against breaking from, you know, kind of an historic standard that well elections have consequences and presidents should be able to nominate and unless there's...

GEORGE STEPHANOPOULOS (ABC NEWS): You know, it's interesting you bring that up. In fact, the then Senator Obama joined the, the filibuster of Alito.


GEORGE STEPHANOPOULOS (ABC NEWS): Here's how he explained it back in 2006.


PRESIDENT BARACK OBAMA (UNITED STATES): I will be supporting the filibuster because I think Judge Alito in fact is somebody who is contrary to core American values, not just liberal values.

GEORGE STEPHANOPOULOS (ABC NEWS): So, Paul, the Democrats really did change the standard there. And that opens up kind of a free no-vote for Republicans if that's the way they want to go.

PAUL KRUGMAN (NEW YORK TIMES): Well, except, you know, the real story of this whole thing has been the sheer craziness displayed by a lot of the Republican Party. I think the Republicans have got a real problem here. Because if they do go no, they're going seem to be the, the party of Rush Limbaugh, the party of Newt Gingrich, the party of completely crazy accusations against someone who is, after all, a highly respectable, very smart, middle of the road jurist.

GEORGE STEPHANOPOULOS (ABC NEWS): Do you guess that the way they're going to go?

JAN CRAWFORD GREENBURG (ABC NEWS): Well, yeah, I think they're going to take the long view. They know this is not the last nomination that Barack Obama is, you know, going to be making to that Supreme Court. And this nomination is not going to change the Supreme Court. That's not why - that's why we're not seeing, I think, abortion at this point being such a big issue. But I think at the end of the day, you know when we look back at all of this, and we're talking about the filibuster and the Democrats successfully filibustering during President Bush's tenure, all of these nominees like you talked about, Miguel Estrada, Republicans have only themselves to blame. Not only for the Miguel Estrada filibuster, but for Sonia Sotomayor. Because it was failures, and I covered all this at the time, complete failures of leadership in the Republican Senate led by Bill Frist that allowed Democrats to start off this historic filibuster in the first place, back in '02 and '03, which then led, of course, to, you know, as we saw, Miguel being - Estrada being blocked. He would be the first Hispanic Supreme Court justice if Democrats hadn't prevailed.

ED GILLESPIE (FORMER BUSH ADVISOR): That's an interesting take to blame Republicans for Democrats filibustering nominees for the first time. And especially when the memos came out that showed there was a conscious effort to block minority nominees, particularly in Miguel Estrada's case for fear that President Bush would then make him the first Hispanic nominee to the Supreme Court. Very crass political maneuver.

JAN CRAWFORD GREENBURG (ABC NEWS): And Democrats - right, Democrats knew that and they recognized it's a lot easier to block these guys whey they're nominated to the appeals court.

ED GILLESPIE (FORMER BUSH ADVISOR): It's very much easier to block it, so I don't think it's fair to blame Republicans for Democrats blocking it. And I do think, though, going back to the point, to, to Paul's point, 35 out of 44 Republicans in the Senate voted for Justice Breyer. 40 out of 43 who were present at the time voted for Justice Ginsburg. The Democrats are the ones - if, if, Republicans vote against this nominee for, for - on philosophical grounds, as President Obama, then Senator Obama laid out his rational for opposing, he didn't agree with the values that the person - not, not didn't agree with temperament or the intellect or the experience, they have set that standard. And I think unless - if Republicans don't, we're setting up an inexorable move to the left of the Supreme Court. And I think that's a very serious consequence.

GEORGE STEPHANOPOULOS (ABC NEWS): We're going to have to end on that note right now. We're going to come back in just a minute. We're going to have more "Roundtable" after the break. The big question is Government Motors good for America?

ANNOUNCER: "This Week" with George Stephanopoulos brought to you by...


GEORGE STEPHANOPOULOS (ABC NEWS): We'll be right back with more "Roundtable" and "The Sunday Funnies."


ANNOUNCER: "This Week" with George Stephanopoulos from the Newseum in Washington, DC will continue in a moment, after this from our ABC stations.



PRESIDENT BARACK OBAMA (UNITED STATES): The question we ask today is not whether our government is too big or too small, but whether it works. I know that if the Japanese can design a affordable well-designed hybrid, then doggone it, the American people should be able to do the same. So my job is to ask the auto industry, why is it you guys can't do this? We want to get out of the business of helping auto companies as quickly as we can. I got more than enough to do without that. Just last week, "Car and Driver" named me auto executive of the year.

GEORGE STEPHANOPOULOS (ABC NEWS): Who knows, by next year that may actually be true. Let me bring our "Roundtable" back in. George Will, Jan Crawford Greenberg, Ed Gillespie, Paul Krugman, and Gwen Ifill. And, George, the President has said, you saw the contradictions there, he wants to get out of the business as quickly as possible. He also wants to urge the auto industry to move in the direction that he thinks is good for country. And as of tomorrow, most likely, or in a couple months once it's all completed, the United States government, along with Canada, will be a 70% owner of General Motors.

GEORGE WILL (ABC NEWS): Yeah, $20 billion in so far. Perhaps $50 billion more to come. The President will be long into collecting social security, before General Motors pays all of this back, if it ever does, which I sincerely doubt. Why are we doing this? We're doing this because it is too big to fail. First, big, Harley-Davidson has a market capitalization eight times larger than that of General Motors. In what sense is it big anymore? Fail, a year ago, in the second quarter of 2008, it was losing $118,000 a minute. It has failed. The question is, what you do about it. It seems to me, the point of capitalism which is a profit and loss system is to clear away things like Chrysler and General Motors.

GEORGE STEPHANOPOULOS (ABC NEWS): You know, the White House would argue that they had to step in because even though the numbers you cite are correct, they say if GM goes into liquidation, 65,000 jobs lost immediately. Hundreds of thousands of jobs lost in collateral damage.

GEORGE WILL (ABC NEWS): That's partly assuming, partly assuming that Americans would quit buying cars. They'd buy different cars. With made in America, most of them. Using American parts mostly, sold to Americans.

PAUL KRUGMAN (NEW YORK TIMES): Okay, all right. I think it's kind of telling that you're talking about market cap, of course, workers, not - you know, GM stock is essentially worthless which we knew. But there are still a lot of workers there. The thing is we have a mechanism. Bankruptcy. Chapter 11. The problem is that the mechanism won't work in this case. That's been hashed over many, many times. The financial markets are still in disarray so the kind of special financing that firms in bankruptcy get still won't be available unless the government stands behind it. And people won't buy durable goods, automobiles, from a company that they think has only got a few months to live. So if you're going to do anything, you're going to have some kind of packaged bankruptcy that has a lot more English on the ball from the federal government than normal. That's what's happening here. This is not seizing the commanding heights. This is trying to sort of make bankruptcy work, even odds that anything survives five years from now. But that seems like an option we're taking.

GEORGE STEPHANOPOULOS (ABC NEWS): Even on sticking to that for a little bit more, the federal government drove a fairly hard bargain we believe with GM. The overall labor costs are down to about the prevailing labor costs in other parts of the industry. They've cut the number of brands down from eight to four. What will it take for GM to be a viable company in two years as this plan envisions?

PAUL KRUGMAN (NEW YORK TIMES): Well, first, auto sales have to come back up, which they probably will. Even if the economy has only a weak recovery which is what most of us expect, the fact is, people are buying very few cars right now. At current rates it would take something like 20 years...


PAUL KRUGMAN (NEW YORK TIMES): Yeah, it would take something like 20 years to replace the existing stock of autos at current rates of sale. Right? So we know that that's not going to - we know there's going to be some recovery. People will start buying more cars. That helps if they can even, you know, partially maintain their share. It needs some general revival. It's not that hard to tell a story where GM starts to have a positive cash flow. It's by no means guaranteed. This is a company that spent several decades ruining itself so, you know, it's not easy. But, but it's not, it's not crazy to think that this might work.

GEORGE STEPHANOPOULOS (ABC NEWS): Ed, this was a decision that President Bush - you were in the White House in the final months, basically said he would allow President Obama to make because he gave the bridge financing to GM.

ED GILLESPIE (FORMER BUSH ADVISOR): He did a bridge and I have always felt that had the - you know, this come in the first month of President Bush's second term, rather than the last month of the second term, he would have done something different. I think he would have made different decisions.


ED GILLESPIE (FORMER BUSH ADVISOR): I think he would have - my personal view is, had it been a different time, he would have probably done a structured bankruptcy, a debtor in possession type financing arrangement. But it didn't feel like it was fair, at the institution of the presidency, to hand off to a successor in the last month of his presidency to make a decision like that, and so we bridged this gap in a way that gave them time to come back with a plan of restructuring of their own and allow for the successor president to make his own policy decision. I think it was a responsible thing to do. Probably one of the toughest decisions of his presidency.


GEORGE WILL (ABC NEWS): Well, two things. I mean, these things have ricochets after you start into this business. First of all, General Motors Acceptance Corporation gets itself declared a bank holding company so it's eligible for TARP. It immediately does two things after it gets $6 billion of taxpayers' money. It offers zero percent, five-year loans on products competing with Ford Motor Company, thereby injuring the most healthy company out there. Then it further lowers the credit score you that have to have to get a GMAC loan. Now what would we call those? I think we'd call those subprime auto loan. So you can drive away from your foreclosed house that you bought with a subprime housing loan in a car you bought with a subprime auto loan.

JAN CRAWFORD GREENBURG (ABC NEWS): And George, I mean that is, I mean that is exactly right when you think about these ricochet effects. I mean you've got Ford now, the only one of the big three that's not going to be controlled by the government. So how then can you assure Ford is not made vulnerable by letting GM or Chrysler have, you know, access to capital at virtually low, or low...

GWEN IFILL (WASHINGTON WEEK): But what does government control mean? I think that's the thing that's really dawned on everybody this week. That when people make jokes about Government Motors, but in fact, when the government controls 72.5% of a privately owned company and kind of a shockingly - a shocking encouragement into the private sector company, does that mean that President Obama has to sign off on a new car that they decide they're going to build? Does he get to pick the color?

PAUL KRUGMAN (NEW YORK TIMES): You know, AIG is 80% government owned and it doesn't seem to be any different. So I don't...

ED GILLESPIE (FORMER BUSH ADVISOR): I tell you one thing, it means it's better to be a union auto worker than it is to be a bondholder at these auto companies for one thing...

GEORGE STEPHANOPOULOS (ABC NEWS): That's not that unusual. When the steel companies went under, the government didn't get involved in that. And the unions were put at the front of the line there as well. But Gwen, I do think you raise an important question that they have to wrestle with right now. The government is now going to be the owner of General Motors, 70% owner of General Motors. But the question is what kind of an owner are they going to be? And, Paul, everything that we hear from Larry Summers and others are that the government is not going to be micromanaging these decisions. But...

GWEN IFILL (WASHINGTON WEEK): But don't we want them to?

GEORGE STEPHANOPOULOS (ABC NEWS): Well, I mean, if they do then you're not going to get a lot of other investors wanting to be in the middle of it at all.

PAUL KRUGMAN (NEW YORK TIMES): You could not have a more centrist economic team than this administration has, right? These people are - have no desire to control the commanding heights of the economy. Yeah, there will be some pressures. But you know this - in a way, if you're worried that the government is going to start, you know, micromanaging, or going to start all kinds - using GM to pursue all sorts of non-economic aims, the fact that the company is probably going to be losing money hand over fist for a long time is going to be a guarantee against that. They're going to be very eager to see this thing become commercially viable. Or at least lose less money. I think your fears that this is socialism, you know, are just crazy. It's not going to happen because they really don't want this albatross around their necks.


PAUL KRUGMAN (NEW YORK TIMES): They want to get out as fast as they can.

GEORGE WILL (ABC NEWS): Let me give you another ricochet effect. The government is mandating smaller cars. The government wouldn't need to mandate smaller cars if the public wanted them. So the government is mandating cars the public hitherto has shown it doesn't want. That is an incentive for Americans to keep the cars they're driving longer, which will deprive Detroit of customers. Hence, we now have to cope with that ricochet effect, there's a move on Capitol Hill to have something called "cash for clunkers" where you will be bribed by the federal government to buy a new car.

PAUL KRUGMAN (NEW YORK TIMES): You know, cafe standards which is what this is all about, mileage standards, fuel efficiency, that's about - you know, there is a huge market failure. Actually a couple of huge market failures, right? There's pollution, there's global warming, there's oil dependence. So to say, well, you're forcing the public to buy something it doesn't want, well you're forcing the public to actually recognize the real costs of some of the decisions that it makes, not taking those costs into account. There's nothing wrong with this.

GWEN IFILL (WASHINGTON WEEK): Why isn't that - why isn't that just - why isn't that nationalization? Why not just call it that?

PAUL KRUGMAN (NEW YORK TIMES): It's not nationalization. Look, there's lots of things we'd like to do. I'd like to burn coal in on open grate in my house, maybe, you know, and add to the smog over Princeton. But I'm not allowed to do that because it does negative things to my neighbors, right? And so, you know, there's lots of things that the government regulates and this is one of them.

GEORGE STEPHANOPOULOS (ABC NEWS): But isn't what's different here now is the government's on both sides of the negotiating table? They have so much power because they have such a large share?

PAUL KRUGMAN (NEW YORK TIMES): It's a problem...

ED GILLESPIE (FORMER BUSH ADVISOR): Look at the recent history. I mean it hasn't in the past been very historically easy to get the auto companies to agree to an increase in, in the cafe. We just went up to 39 miles per gallon. It was very easy this time for President Obama to bring the auto companies in for them to agree to that because they don't - there is no leverage here. And I do worry, I think one of the, the, the broader threats to our economy, is you - if you're going to supplant profit motive with political motives, over time, we're going to have a much bigger drag on our economy than...

GEORGE STEPHANOPOULOS (ABC NEWS): Well, and that's the biggest...

ED GILLESPIE (FORMER BUSH ADVISOR): The, the, the government is not the most efficient allocator of resources in the American economy.

GEORGE STEPHANOPOULOS (ABC NEWS): And that's the biggest dilemma facing the administration. Because, you know, if - let's say GM has a plant in Kokomo, Indiana and they say they want to move it to Buenos Aires. They say they want to stay out of it. Will they be able to?

JAN CRAWFORD GREENBURG (ABC NEWS): Right. I mean, going back to your point and Gwen's point, you know, are you going to outsource your, you know, manufacturing or parts to South Korea or China? Are you going to mandate that it be kept here? How is the government, you know, when it's controlling these companies going to make those decisions when it's kind of weighing now - I mean very competing interests. It's a, you know, a political button.

GEORGE WILL (ABC NEWS): Well, one of the government's recent interventions in industrial policy is the ethanol industry. Now the government, when it said we're going to put all this corn in our gas tanks did not intend to cause food riots in Mexico, but it did.

PAUL KRUGMAN (NEW YORK TIMES): This is a - I've often said, if only the first caucuses were in New Jersey, instead of in Iowa then we'd have something requiring you to put diners in your cars or something. But, no, look this - but, you know, they're very aware of this. This is - none of this would be happening if it wasn't taking place in the middle of the worst economic slump since the Great Depression. Very exceptional things happen. They're not indicative where policy is going to be for the next 20 years.

ED GILLESPIE (FORMER BUSH ADVISOR): I, I think that's a legitimate point relative to the auto industry and the intervention here, obviously. But, look, this is going on, on a number of different fronts. Take the health care debate that's going on right now and the public option, a huge intervention again into one of the biggest sectors of our economy.

PAUL KRUGMAN (NEW YORK TIMES): Public option is about offering people a choice. I mean it's the - the people who are opposed to actual choice...

ED GILLESPIE (FORMER BUSH ADVISOR): Yeah, in the same way that autos were offered a choice...


ED GILLESPIE (FORMER BUSH ADVISOR): ... and the bondholders were offered a choice.

PAUL KRUGMAN (NEW YORK TIMES): It's nothing, nothing like it and it's...

GEORGE WILL (ABC NEWS): Paul assumes that are once the political class gets a taste for using American capital, broadly speaking, as a slush fund to buy political advantage it will force where doing so in the future. I don't believe it. Paul, most of the list of the agriculture policies in this country are residues of those put in place for the depression emergency. New York City lives under rent controls put in place for the emergency of the Second World War. The Japanese have surrendered, they go right on forever.

PAUL KRUGMAN (NEW YORK TIMES): But this one is on budget. I think that makes all the difference in the world. This is going to be a drain on the federal budget at a time when this administration because of its very activism really wants those dollars for things it really wants like health care.

GEORGE STEPHANOPOULOS (ABC NEWS): Which brings it back to, back to health care. I want to Gwen in on this. Ed brought up the idea of the public option, where there's been a public plan to compete with the private plans. That's a dividing line between the Republicans and Democrats. But so far, as this begins to be debated this week in the House and this Senate, that is still the dividing line between Democrats and Democrats.

GWEN IFILL (WASHINGTON WEEK): I'm quite interested actually in the atmospherics of all of this. Because one of the things on health care, on GM, on nationalization, or whatever you want to call it or even on the Supreme Court nomination, what this administration has shown its ability to do is step up to it, say oh that doesn't work, let's try it this way. The difference between something like the public option or something like rescuing a major American industry, is you can't walk away as easily as they like to walk away if they see something's not working. Politically, there's something to be said for them saying - you know, these guys look backwards as much as forwards and they say oh, the last Democratic administration made this mistake, let's do it this way. The problem is that the things that they, that they prize now, domestic policies they prize are things that they can't step away from once they get what they've asked for. So it's, it's very complicated. It's one of the reasons why people in this administration don't talk about it like it's a public option. They try very, very carefully to define it differently.

GEORGE STEPHANOPOULOS (ABC NEWS): I think that's right. I think the White House doesn't care whether they get it or not.


GEORGE STEPHANOPOULOS (ABC NEWS): They just want to get something done. The bigger question faced, George is how to pay for it. The OMB director, Office of Management and Budget, said this is going to be deficit neutral. We're going to pay for every penny. So far, in these three months of debate in the House and Senate, they've rejected every idea so far on the table to pay for it?

GEORGE WILL (ABC NEWS): That's right. And in the process, they've been losing revenue. It's been leaking. They had a certain number written in for cap and trade, but in order to buy off certain states who were going to be injured by cap and trade, they gave away things they were going to sell and the revenues have declined.

PAUL KRUGMAN (NEW YORK TIMES): Well, yeah, it's a little hard - I mean, they can make a very good case, that long run the thing saves money. But CBO won't score it that way. So they have to do...


PAUL KRUGMAN (NEW YORK TIMES): Right. So they're going to have to do - but, you know, it's not actually all that much money. All of the studies I know say that the cost of actually insuring the uninsured as part of this - the only place were this costs money is actually in providing supplement to help the uninsured pay for the program.

GEORGE STEPHANOPOULOS (ABC NEWS): But that's between $600 billion and $1.2 trillion.

PAUL KRUGMAN (NEW YORK TIMES): Yeah. But think of it this way, it's under 1% of GDP. It's, it's not - it's, obviously it's a big thing in terms of the way budget debates are done. But it's actually not a big thing in terms of the larger picture on the budget. The questions about how - you know, what's our debt outlook going to be 10 years, 15 years from now are really barely affected by this. It's just a - it's a big number if you look at it in the abstract, if you look at it in context, it's not really a big thing. Because the uninsured are mostly relatively young and relatively healthy. Turns out the expensive people have been under a single payer system called Medicare all along.

ED GILLESPIE (FORMER BUSH ADVISOR): The notion of the savings though, we've never seen this before, and I don't think we're going to see it again. And you have to give them credit at this White House, they're very good at this stagecraft, and they bring in the health care industry and they say we're going to save $2 trillion on health care expenditures.


ED GILLESPIE (FORMER BUSH ADVISOR): ... over ten years. And not a single detail about it. It reminded me of the old Steve Martin routine, he said I'm gonna write a book "How to be a Millionaire." First, you get a million dollars.

JAN CRAWFORD GREENBURG (ABC NEWS): You know, I mean in terms of what the White House I think has been very good at is really setting some of these priorities. You know, as Gwen was kind of starting off this discussion too, I mean, you know, think about what we've been discussing this morning. All of the things that are on President Obama's plate. He's wanting to make health care reform kind of his crowning achievement this first year. And that, of course, influenced going back to our discussion earlier why he selected Sonia Sotomayor in the first place. You know, his political advisors knew she was going to be almost impossible for Republicans to oppose as we're certainly seeing now. They're falling all over themselves. So, you know...

GEORGE STEPHANOPOULOS (ABC NEWS): And it clears the path for health care. One issue he wants to avoid is another one that was in the news this week, gay marriage. Again, Proposition 8 in California. The California Supreme Court upheld the ban on gay marriage but allowed the existing marriages to be - to stay in place. And tight after that, very strange bedfellows came out, David Boies and Ted Olson. These were the two lawyers, opposing lawyers, in Bush v Gore. They have joined together to challenge this ban. They want to take the issue of gay marriage to the Supreme Court.


THEODORE OLSON (FORMER SOLICITOR GENERAL): Creating a second class of citizens is discrimination, plain and simple.

DAVID BOIES (ATTORNEY): Our Constitution guarantees every American the right to be treated equally under the law. There is no right more fundamental than the right to marry the person that you love.

GEORGE STEPHANOPOULOS (ABC NEWS): You know, this was surprising. We've seen a lot of news in the last several months about gay marriage. But this one probably surprised me the most. Ted Olson, long-term Republican lawyer joining David Boies. And it's also created some unrest in the - among groups who support gay marriage because they say, wait, we don't want this to go to the Supreme Court right now.

JAN CRAWFORD GREENBURG (ABC NEWS): That has been the most extraordinary thing, I think. I mean, lawyers will take on a case, and obviously, they believe in this issue or they wouldn't have done it. And they're doing part of it, you know, at a cut rate. But the groups on the left and the gay rights groups are incredibly upset about this. They're like, we don't want your help, Ted Olson and David Boies. Because those groups recognize that they don't have the votes right now in the Supreme Court. And you can do real damage if you pursue a case and you lose. The Supreme Court in 1986 ruled that states could ban gay sex. Criminalize it. It took 17 years for the Supreme Court to overturn that decision which it did in 2003 in an opinion by Justice Kennedy. There's no evidence that Justice Kennedy, who's is kind of that, you know, human jump ball up there, I mean both sides are, you know, trying to get his vote on this. No evidence that Justice Kennedy is going to vote that there's a constitutional right to gay marriage.

GEORGE WILL (ABC NEWS): 36 years ago, at a point when state after state was moving to liberalize abortion laws, including California, signed by Ronald Reagan, the Supreme Court yanked that issue out of democratic debate and embittered our politics down to this point, by lot letting a consensus emerge in the community. And as we've seen by subsequent votes in California on gay marriage, the consensus is moving towards gay marriage, if they would just let it alone, let democracy work we'd have settled this.

GWEN IFILL (WASHINGTON WEEK): Maybe this is the unity that the President has been talking about, to have David Boies and Ted Olson holding hands and singing kumbaya, who would have thunk it? But I still don't know whether that's - whether their effort might do the president a favor in that it takes it out of his hands. The last thing he wants to do is talk about - talk about looking back and not wanting to relive old mistakes? This is one of them. They don't want to get back into that.

ED GILLESPIE (FORMER BUSH ADVISOR): I couldn't agree with George more on that. I think this is clearly aimed at taking this to the Supreme Court where it's probably ultimately going to end up at some point anyway. But the fact is, this is being dealt with in a rather civil manner in the states where there are debates over this and legislators are voting on it or it's taking placing place in referenda. And if you take it out of the hands of the electorate and allow for - don't allow for civil discussion and you impose it, I think we're living it for a long time.

PAUL KRUGMAN (NEW YORK TIMES): All I can say it's a shocking moment, I agree with George.

GEORGE STEPHANOPOULOS (ABC NEWS): And that's all we're gonna have time for. We're going to have to end with Paul Krugman and George Will agreeing on something. You guys can continue this in the green room. And you can get political updates all week long from me on Facebook and Twitter. Coming up here, "The Sunday Funnies."

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Originally broadcast, 5.31.09