This Week, July 26, 2009: The Roundtable with Paul Krugman, George Stephanopoulos, George Will, David Brooks, Donna Brazile, and Arianna Huffington

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


GEORGE STEPHANOPOULOS (ABC NEWS): And with that let me bring in "The Roundtable". I am joined as always by George Will, David Brooks of "New York Times," Arianna Huffington of "The Huffington Post", also the paperback edition of - we've got vividly titled books today on the program, "Pigs at the Trough, How Corporate Greed and Political Corruption are Undermining America", Nobel Laureate Paul Krugman also of "The New York Times" and Princeton and Donna Brazile, welcome back. So, George, you see Lyndon Johnson signing Medicare, President Clinton giving his mea culpas on health care back in 1995. Which fate does Obama have in his future right now?

GEORGE WILL (ABC NEWS): Bill Clinton's fate it seems to me. Because of Bill Clinton's experience, which they sometimes ascribe, this White House to the fact that it took so long to get to it. The White House, Obama White House has been saying speed is essential and they're right, for the reason that Emerson said that when skating on thin ice speed is safety.

GEORGE STEPHANOPOULOS (ABC NEWS): So the strategic decision they made early on to go for everything was the right decision?

GEORGE WILL (ABC NEWS): Well go for this but not go for it with cap and trade and new energy supplies and all of this thing. The country has a sense I think of overload. The President has 60 senators, he has a 70-vote majority in the House of Representatives and he blames Republicans. That's not the problem. His difficulties extend from the Mayo Clinic to the Congressional Budget Office which just yesterday said of the President's latest proposal, a panel, a magic silver bullet to constrain costs, that it would save maybe $2 billion over four years beginning in 2016 and that's a rounding error on the GM bailout.

PAUL KRUGMAN (NEW YORK TIMES): I think I should say something about the CBO thing which surprised a lot of people because...

GEORGE STEPHANOPOULOS (ABC NEWS): Because it was important I mean and interesting timing too.

PAUL KRUGMAN (NEW YORK TIMES): Well and also because most of the health care economists I talk to think that the med pac reform, that having these judgments would actually be quite important, especially going into the long run. So they were really kind of surprised and there is a kind of sense that CBO faced with the - no one can put a hard number on this but CBO sort of said well if we can't put a hard number on it we're gonna say it's zero and that seems to be wrong. There is every reason to think that being more careful about what Medicare is willing to pay for can save a lot of money and this was kind of a destructive comment by Doug Elmendorf at CBO.

DAVID BROOKS (NEW YORK TIMES): Well I actually agree with Paul on the substance of it. The health care economists do think it's bigger but the political reality is the CBO is our rule book now. They are the arbiter. Now I think I disagree with George. I think something's going to get passed. A lot of critics of the plan are doing end zone dances. I think the Democrats are so scared of failure that they will pass something. Now my question is whether they will actually control costs while they're doing it. You showed LBJ when Medicare was passed, they projected what will this program cost in 1990. I think they came up with a budget of about $12 billion and it ended up costing nine times that in 1990. We can't afford that. So the real question is do they actually tackle costs? And that's something they have not done in a serious way.

GEORGE STEPHANOPOULOS (ABC NEWS): Well, but that's what Senator Conrad and this bipartisan group are trying to do. And let me bring Arianna in on this. Because David said something I think is interesting. Democrats, he says, are so afraid of failure that they'll pass anything. It seems like the White House is actually banking on that as well. That they work, that they get behind the Senate Finance Committee deal when there is one eventually and the rest of the Democrats, even if there is no public health insurance option, even if there's more Medicare cuts than they like, even if there is a tax on some health care plans, the Democrats will go along because they're afraid of failure.

ARIANNA HUFFINGTON (HUFFINGTON POST): And that will be a major problem and that has been really a problem with the Obama style of leadership, which is let's pass something even if it does not include the things that he considers important, the public option, for example, or negotiating with the drug industry to bring down costs. His effort and his longing to reconcile everybody and bring everybody together sometimes makes it impossible to get what he needs out of the primary players here. I mean the drug industry gave up something but they haven't given up on the negotiation for real lower prices with Medicare and Medicaid, and that's a major issue.

GEORGE STEPHANOPOULOS (ABC NEWS): But, but Donna, is it political necessity, I mean can the, can the President hold the Democrats together only if some of those moderate Democrats, blue dog Democrats have Republican cover?

DONNA BRAZILE (ABC NEWS): Well, George, I think August was always the goal but it wasn't the only goal, the other goal was to make sure that you would get a bill that was deficit neutral and reduce the costs. And the blue dogs will go along once the blue dogs feel that they have sufficient cover with some of the concerns that they have. I think the President should use this opportunity to retool his message to convince the American people why we really need health care reform. Right now many people are worried that they may lose something in this reform and therefore I think this is an opportunity for the President to go out there and retool his message.

GEORGE STEPHANOPOULOS (ABC NEWS): So far he's trained all of his fire on the status quo, making that a plan. That's really the goal of the press conference on Wednesday night.

DONNA BRAZILE (ABC NEWS): And as we all know that press conference wasn't a game changer and some things happened later at that press conference that really just obliterated his message. But this is an opportunity for the President to really come down hard on those wavering Democrats. And I do believe that he not only is providing that cover now but he's inside helping them negotiate.

GEORGE WILL (ABC NEWS): I think the Democrats are afraid of failure but they're much more afraid of their constituents. And what they're hearing from their constituency is increasing anxiety about the unknown. And the Republican theory in the Senate is simply this, if they get no Republican senators, they will lose some Democratic senators. And therefore, Republican unity will drive this.

PAUL KRUGMAN (NEW YORK TIMES): So now I, I - there's a strong possibility, I don't think any of us knows for sure that all that we're seeing, all of the Sturm and Drang and all of that is actually just kabuki. That in the end, Democrats will come together and what we're seeing is jostling for the shape of the final outcome and that in the end everybody will come on board. The blue dogs will come on board, the progressives will come on board because of the fear of failure.

GEORGE STEPHANOPOULOS (ABC NEWS): But for what? That's what I want to press. I mean I, I, I don't necessarily disagree on the politics but it depends on how much has to be given away in these bipartisan negotiations. What price these three or four Republicans are demanding. And that's sort of what I want to press you on. What would you consider a bottom line victory?

PAUL KRUGMAN (NEW YORK TIMES): You know, there is this jostling which comes from you can't say that in advance. In a way, since I have my own goals on health care, I can't say what my, what my final, you know what's the least I'll accept, because that then becomes a negotiating point. But the point is...

GEORGE STEPHANOPOULOS (ABC NEWS): And that's what we've seen the President doing basically.

PAUL KRUGMAN (NEW YORK TIMES): Yeah. But, you know, in the end, I think, I think the Democrats understand that the constituents might be angry over what's in the bill but they mostly will vote against people they perceive as losers. So if the Democrats don't pass this thing, they'll be seen as losers. So in the end they have to move forward.

GEORGE STEPHANOPOULOS (ABC NEWS): Do you agree with that?

ARIANNA HUFFINGTON (HUFFINGTON POST): I think it has been, like it has been a sort of standard process for all of the lobbies, for all those trying to derail reform to pick the one element that is the central element of reform and right now I believe it's public option because it will allow the kind competition that will put the private insurance on the defensive and not allow them to continue the way they have been. And if that is eliminated, which seems very likely, and Tom Daschle and then Rahm Emanuel in a way telegraphed that they may be willing to give that up, then it's going to be called reform but it's not going to be real reform.

DAVID BROOKS (NEW YORK TIMES): Yeah, I don't think that central. I mean, whatever you think of the public option, it's not gonna have a huge cost effect. This is debate over costs and only thing that really is big enough to change the provision of health care is getting rid of or seriously capping the exemption on health benefits.

GEORGE STEPHANOPOULOS (ABC NEWS): And that is now clearly back on the table, Senator Conrad told us that this morning.

DAVID BROOKS (NEW YORK TIMES): Right. And most health care economists think it's absolutely essential and the White House and the chairmen on Capitol Hill have been loathe to talk about it, but that to me is the core issue.

GEORGE STEPHANOPOULOS (ABC NEWS): How much trouble is that gonna cause for the President, now that it does appear that it's creeping into these negotiations?

DONNA BRAZILE (ABC NEWS): It's a price that nobody wants to see being paid by the President or anyone else, because as you well know, this one of those non-negotiables for - from the Democratic side. I mean and progressives...

GEORGE STEPHANOPOULOS (ABC NEWS): Especially the labor unions.

DONNA BRAZILE (ABC NEWS): Absolutely. I agree, Arianna, the public option is what many of the constituents who voted for change and rallied around the President, that's what they want. They want their public option. When you, when you come to taxing the benefits of, of employees I think that's going to be a very tough call for many of the Democrats.

GEORGE STEPHANOPOULOS (ABC NEWS): Do you agree with the power of that proposal of taxing benefits?

PAUL KRUGMAN (NEW YORK TIMES): No. I don't think it has very much affect on the costs actually. I mean I don't think it's - the idea that - health care is not like buying bread. It's not something where marginal incentives make a lot of difference, marginal incentives at the individual level make a lot of difference. It's not a big deal on controlling costs. It is, however a possible source of finance that is reasonably fair, and it's internal. Let me say about cost control, there is a theory which I subscribe to that if you get universality, cost control will follow through the political mechanisms. Massachusetts has a universal health care systems that has zero cost control. It was a disaster from a cost control point of view. Now Massachusetts is getting serious about cost control because once you've established that you no longer have the safety valve of dealing with rising costs by making more people uninsured, then you have to deal with the problem. So this has to happen.

DAVID BROOKS (NEW YORK TIMES): Wouldn't you say that's because they're actually changing the delivery of health care what they're trying to do now.


DAVID BROOKS (NEW YORK TIMES): And whatever you think of how they're doing it, the current bills in Capitol Hill do not fundamentally change...

PAUL KRUGMAN (NEW YORK TIMES): But the original Massachusetts health care reform didn't do anything about that either. But now they're doing it.

DAVID BROOKS (NEW YORK TIMES): Right. And we're modeling our reform after that.

ARIANNA HUFFINGTON (HUFFINGTON POST): It's going to be impossible to have cost control without some emphasis on prevention. And that's really one of the problems here. Even the tax on soda, which is so basic, so elementary given the trends towards obesity and diabetes is basically not going to happen.

GEORGE STEPHANOPOULOS (ABC NEWS): And well I was going to say it, because it's so basic, because it's so easy to understand it is not gonna happen. We actually want to take a quick break here. But I heard George you say no bill this year. You said the President will sign one. Very quickly, does the President sign something by December?

ARIANNA HUFFINGTON (HUFFINGTON POST): Very watered down, not good enough.

PAUL KRUGMAN (NEW YORK TIMES): Yes, he signs something.

DONNA BRAZILE (ABC NEWS): Yes, he will sign something.

GEORGE STEPHANOPOULOS (ABC NEWS): I think so as well but it's hard to know what's gonna be in it. We're gonna come back with the debate the President didn't want this week, race, police and profiling. And later, "The Sunday Funnies".

DAVID LETTERMAN (HOST): If we had wanted a president who looked good in pants, we would have elected Hillary, you know what I mean?

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


GEORGE STEPHANOPOULOS (ABC NEWS): We'll be right back with "The 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.



PROFESSOR HENRY GATES (HARVARD UNIVERSITY): What it made be realize was how vulnerable all black men are. How vulnerable all people of color are.

PRESIDENT BARACK OBAMA (UNITED STATES): Any of us would be pretty angry. The Cambridge Police acted stupidly.

SERGEANT JAMES CROWLEY (CAMBRIDGE POLICE DEPARTMENT): The apology won't come from me. I've done nothing wrong.

PRESIDENT BARACK OBAMA (UNITED STATES): You probably don't need to handcuff a guy, middle-aged man who uses a cane who was in his own home.

STEVE KILLION (CAMBRIDGE POLICE OFFICERS ASSOCIATION): The President should make an apology to all law enforcement personnel.

PRESIDENT BARACK OBAMA (UNITED STATES): I could have calibrated those words differently and I told this to Sergeant Crowley.

GEORGE STEPHANOPOULOS (ABC NEWS): Crowley, Gates and Obama will be sharing a Blue Moon Beer sometimes soon at the White House. Let me bring our "Roundtable" back in. George Will, David Brooks, Arianna Huffington, Paul Krugman, Donna Brazile. And, George, the President said also in that surprise press conference Friday afternoon that he wanted this to be a teachable moment. So what did we learn?

GEORGE WILL (ABC NEWS): That presidents should understand that some things are not any of their business, such as local police disputes in Cambridge, Massachusetts. George, look, when you are a highly paid, much-honored tenured professor at the richest university in the world, in a city with a black mayor, a state with a black governor and a country with a black president, it's hard to get the coveted status of victim. Now Mr Gates got the coveted status of victim with the help from the President because when the President said the police behaved stupidly, you could not escape the belief that - there is a name for what the President was doing, it's called racially profiling. There's a distinguished black man, white policeman, the white policeman must be in some inferential way a racist.

DONNA BRAZILE (ABC NEWS): Well, I think the President was, was very measured in his initial comments and perhaps the word "stupidly" caused some to believe that he was attacking the character of the police department. But George, there remains in this country a history, a painful, shameful history of racial profiling. And it's not that black people walk around waiting to be called victims, it's because it is a dreadful fear. I'll never forget the lessons my parents would teach my brothers, not us but boys, that no matter what happens, if you are stopped by the police, do whatever you're told, put your head down and just wait. Don't say nothing. It is painful. It is shameful and I think the President was trying to raise a much larger issue but unfortunately his word choice got in the way.

DAVID BROOKS (NEW YORK TIMES): I guess I would say what we saw is you can see one event through multiple prisms. That event could be seen through the race prism, which Donna just described the history of frankly picking on black men in particular but there's also the class prism and there's been a history of condescension in this country. And you can also see it through the prism of a cop versus a Harvard law professor who is backed up by a Harvard law graduate. And using the word stupidly sounds condescending. And so those multiple prisms conflicted. And I thought by the end of the week, what you just showed in that little montage there, it was like a sitcom by the end of the week I think Obama got to the right place. They both overreacted. He didn't quite say it but sort of, I overreacted and now let's, let's talk this out over a beer. His final statement was pretty good.

GEORGE STEPHANOPOULOS (ABC NEWS): It did seem, Arianna, like this was much about as David says, sort of gender and class as anything else. You got two guys there who got their backs up, neither felt they were getting respect they deserved and they just went off.

ARIANNA HUFFINGTON (HUFFINGTON POST): There was definitely a lot of that, a lot of testosterone and the fact that he had come from a long flight from China, but beyond that, I think there are two teachable moments. And I think it's more of an August Wilson play than a sitcom because of the richness of the characters. But the first teachable moment is obvious one, the President did what he does best, gracefully and with humility...


ARIANNA HUFFINGTON (HUFFINGTON POST): On Friday, yes. He basically apologized and asked them to the White House for a beer. Perfect. The bigger teachable moment is the one Donna alluded to, because the facts is that right now if you are black or Hispanic you have a much greater chance of being arrested, of being subjected to force and particularly when it comes to that war on drugs it's really stunning that only 15% of the total drug population, drug offending population is African American and yet you have 74% of them who end up in jail.

GEORGE STEPHANOPOULOS (ABC NEWS): Arianna brings up a couple important points there, Paul. Glenn Loury points out in the "The New York Times" this morning, the op-ed page, since 1980, the number of people in American prisons has quintupled, gone up five times and three-quarters of those in state and local prisons are black and Hispanics.

PAUL KRUGMAN (NEW YORK TIMES): Yeah, although I'm not sure that has that much to do with this case. Let me say two things about this. First, it's the old line, the definition of a gaffe is when a politician accidentally tells the truth. I mean what Obama said was perfectly reasonable but he shouldn't have said it. The second thing is, we are kind of losing sight of...

GEORGE STEPHANOPOULOS (ABC NEWS): Stupidly was reasonable?

PAUL KRUGMAN (NEW YORK TIMES): I think it was. But look, did, did Gates - he was unwise, he was rude, he was yelling. Did he commit a crime? Did he do anything that you could plausibly say you should slap handcuffs on? Right? And there is a peculiar thing here, which is think about how conservatives are reacting. Over the last few weeks we've been hearing endlessly conservatives talking about how Obama, the Obama administration is tyranny, it's a police state where, you know, it's fascism, it's awful but they think it's perfectly reasonable to slap handcuffs on a middle-aged man who walks with a cane because he said something rude to a policeman. My god. I mean you know it's - yes, Gates behaved stupidly, no question. There were - tempers were rising, but you know, a policeman is supposed to say is this a crime.


GEORGE WILL (ABC NEWS): I would like to come back to the question of how did this become a presidential level subject of conversation? I try, ask you to imagine A, Dwight Eisenhower being asked a question about a local police episode in Cambridge, Massachusetts or B, Dwight Eisenhower being foolish enough to answer the question. There are some things...

PAUL KRUGMAN (NEW YORK TIMES): But can we say something about the press here?

GEORGE WILL (ABC NEWS): There are something things that are none of the President's business.

PAUL KRUGMAN (NEW YORK TIMES): This is - in a way this is a follow up. We had, you know, this is - the president is giving a conference on health care reform. Why was a question about Skip Gates on there? You know, the President was - when the President was in Moscow he was asked about Michael Jackson. This is a part, this is about our profession behaving badly.

GEORGE WILL (ABC NEWS): This is - but the press reflects the country and the country is in the grip of a cult of the presidency. That the President is our all-purpose teacher, tutor, moral auditor, philosopher, the President is everywhere. This president is ubiquitous. Somewhere, between the remoteness of Charles de Gaulle and the ubiquity of Barack Obama there is a happy medium.

ARIANNA HUFFINGTON (HUFFINGTON POST): But, you know, this is not about Barack Obama. I mean this has been happening...

GEORGE WILL (ABC NEWS): It's entirely about Barack Obama.

ARIANNA HUFFINGTON (HUFFINGTON POST): ... going back to Bill Clinton and being asked what kind of shorts he wears. I mean this is not a new phenomenon.

GEORGE WILL (ABC NEWS): And he answered. And he answered.

ARIANNA HUFFINGTON (HUFFINGTON POST): Yes. My point precisely. This is not a new phenomenon. I think, in fact, all of the best presidents we've every had have been moral leaders and you know that, I mean from Abraham Lincoln to FDR, I mean the things that they're remembered for are - is as much as what they've said as what they did.

GEORGE WILL (ABC NEWS): Yes, about slavery and the dissolution of the union. Not a minor police matter in Cambridge.

ARIANNA HUFFINGTON (HUFFINGTON POST): But you oppose the whole idea of the president being a moral leader which goes contrary against...

GEORGE WILL (ABC NEWS): I opposed extravagant investments of faith, hope and charity in the presidency.

DONNA BRAZILE (ABC NEWS): But, George, this was also someone that the President knew personally, Skip Gates, and could speak a little bit to his character. But also I think that the President, having, you know, had the experience that many black men in this country of being stopped, of being somewhat looked at suspicious, maybe this was a matter of his heart over his head, but I still believe at the end of the day president was right in answering in the measured way that he did, the semantics beside. The President of the United States of America is someone that people look up to and they expect that the President can somehow or another teach us on how to...

GEORGE WILL (ABC NEWS): About everything?

DONNA BRAZILE (ABC NEWS): No, not everything.

GEORGE WILL (ABC NEWS): Is there nothing that is none of the President business?

GEORGE STEPHANOPOULOS (ABC NEWS): But is there a constructive conversation to be had on this going, going forward? Now that the incident has brought it all out, whether he should have spoken to this particular incident or not it did raise a broader conversation. How does he build on it or not at all?


DAVID BROOKS (NEW YORK TIMES): Well I guess the one - let's not forget about the narcissism of the educated class here. Last night there were probably 1,000 guys who were hassled by police who no one is going to talk about because they don't happen to go to Harvard, they don't - they aren't known by the media class and the political class, they don't summer with them on the Vineyard. So this was an overexposure of this one issue forgetting the other, the much larger issue, which, you know, we, we don't know those people is essentially the...

ARIANNA HUFFINGTON (HUFFINGTON POST): But maybe to George's point, it happened, now that it happened can we get something good out of it and actually put the spotlight on the bigger problem that we have begun to address? That this is going on all the time and that many people end up in jail, while if you happen to be white you would not have ended up in jail for the same crime.

GEORGE STEPHANOPOULOS (ABC NEWS): You said at it first it wasn't all that relevant but do you think there is a conversation to be had there?

PAUL KRUGMAN (NEW YORK TIMES): You know, I'm not - I share this much with, with George Will, I don't necessarily believe in those kind of conversations certainly as led by the President. I think, I think that best if we put this behind us. So what we really need to do is make this a better society. And you don't do that by having conversations, you do that through policy.

DONNA BRAZILE (ABC NEWS): I don't, well I don't think the President necessarily should lead the conversation but the conversation will be held. Maybe it will start in Cambridge but, George, I...

GEORGE STEPHANOPOULOS (ABC NEWS): They actually said today that they are going to have some community forum in Cambridge about this.

DONNA BRAZILE (ABC NEWS): And there is no reason for us to sweep it under the rug. For too long in our history we have just not wanted to have this conversation. We can have a very constructive face to face conversation, pull the resentment, the fear, so that people can come to a point of tolerance and acceptance. That's all we're - I think that's what the goal of the conversation would be.

GEORGE WILL (ABC NEWS): I have a news bulletin, the American people have conversations all of the time without any help from Washington. Backward reels the mind to the 1990s when Bill Clinton had an epiphany, we should have a national conversation about race. We converse about race too much.

DONNA BRAZILE (ABC NEWS): And it remains, as Condoleezza Rice said some time ago, our birth defect, because we won't have a real honest, candid conversation, George. And that's the problem.

ARIANNA HUFFINGTON (HUFFINGTON POST): And it doesn't have to be with the President. It can be among ourselves. I mean nobody is saying that the President needs to keep talking about it but we in the media need to keep talking about it so that we can actually make it more likely there will be some policy change.

PAUL KRUGMAN (NEW YORK TIMES): We actually have made progress. We're a much less racist society than we were 25 years ago because of the individual conversations. Because of the conversation in the media. Probably the President...

GEORGE STEPHANOPOULOS (ABC NEWS): Barack Obama was just elected president. I think so, yes. But you bring up another point, George, the ubiquity of President Obama. And he was everywhere this week and Mark Knoller who has been covering the White House longer than just about everybody for CBS News and is a great statistician, he's like the box score man on the White House press corps, has said that the President is just shy now of 100 interviews in the first six months or so in office. More than any other president in the first six months. One of them this week was with Katie Couric where the President and Katie Couric ended up getting in a big discussion about you, David Brooks. Let's take a look.

KATIE COURIC (CBS EVENING NEWS WITH KATIE COURIC): He says Democrats are losing touch with America, because "The party is led by insular liberals from big cities and the coasts."

PRESIDENT BARACK OBAMA (UNITED STATES): This was a really long question.

KATIE COURIC (CBS EVENING NEWS WITH KATIE COURIC): "On issue after issue." It was a pretty...

PRESIDENT BARACK OBAMA (UNITED STATES): Are we going to, are we going to read the whole column here?

KATIE COURIC (CBS EVENING NEWS WITH KATIE COURIC): I'm just curious, A, have you read it and B, what's your response?

PRESIDENT BARACK OBAMA (UNITED STATES): You know, I don't spend a lot of time reading columns, Katie.

GEORGE STEPHANOPOULOS (ABC NEWS): I'm not sure that's exactly true. But he certainly is spending a lot of time with journalists, on television, giving interviews over the last couple of weeks. And David, it has led to this discussion that George started about whether the President is overexposed. The White House says in response they have no option in a fractured media universe, the President has to be out there all of the time. He's the best salesman for their policies and there is no substitute.

DAVID BROOKS (NEW YORK TIMES): Yeah, first, I'm willing to go read him the column. I'll read him Paul's columns, not even my own. I actually don't think he's overexposed. He is their best spokesman. Now, there is a problem that there are no other spokesmen. They can't send out other people. But I happen to think he's the best thing they've got. If you look at the polls what you see is people like the -- like Barack Obama.


DAVID BROOKS (NEW YORK TIMES): They disagree with the policies, there has been a sharp slide in support for the policies. Health care, he's now under 50%. 66% of Independents think it's too much big government but they still like Barack Obama. So if you've got this unique person who's selling your product don't give up on him. So I actually - I see no evidence that he's overexposed.

GEORGE STEPHANOPOULOS (ABC NEWS): So not to the point of diminishing returns yet, do you agree?

ARIANNA HUFFINGTON (HUFFINGTON POST): No, absolutely not. I think this is his capital. His approval rating is his major political capital. The key question is, how is he going to spend it? I don't think he's really spending it enough in terms of making this...

GEORGE STEPHANOPOULOS (ABC NEWS): Don't you think he's spending it on health care? That's one of the things you're seeing.

ARIANNA HUFFINGTON (HUFFINGTON POST): No, no, but - not to make it bold enough, George, because if it's not going to be bold enough, it's not going to contain costs enough and that includes prevention. That includes all the things he cannot achieve simply by having endless meetings in the White House with private insurance and hospital providers and the drug industry. Because basically, ultimately he will have to confront them. You know, just think of it, he has been trained by Sol Alinsky, right, the great community organizer who wrote about political reform in four stages. That's how he saw it. And the final stage was reconciliation. My problem with the Barack Obama style is that he wants to move to reconciliation too fast and you can't pretend that there is no conflict. I mean people are going to be upset if there is real health care reform.

GEORGE WILL (ABC NEWS): Ronald Reagan who understood the theatrical dimension of politics because he'd been in the theater understood the first rule of entertainment which is leave the audience wanting more, not less of you. This President has grabbed the country by the lapels and shaken it and talked to it and lectured it and there will be time when the novelty is gone, you can only be a novelty once, Arianna, and people will use that fundamental instrument of modern life, the remote button and push the mute.

ARIANNA HUFFINGTON (HUFFINGTON POST): George, he probably would have left you wanting less a long time ago. So, you know, you are not the typical American.

GEORGE STEPHANOPOULOS (ABC NEWS): That may be, Arianna, although one of the things we did see this week, and it may be because it's the middle of the summer, but Paul Krugman, the number of people who tuned in for the President's press conference down was down about 15% from the last time around. In part because Fox was playing something else, but we have seen a steady slide over the six months on things like that.

PAUL KRUGMAN (NEW YORK TIMES): But that's going to happen. It's, you know, it's - first of all, yeah, there are other things going on, and also a little bit of the novelty is wearing off. But, you know, he needs to be out there. What he needs to do is he needs to be focused. I'm not sure that his foreign trip was a good idea. That it may have been that he really needed to be here.


PAUL KRUGMAN (NEW YORK TIMES): Yeah. That he really needed to be here pushing health care. He needs to be doing more almost rally-style events. You know, you might think about, you know, he needs to be selling his policies and right now health care is make or break.

GEORGE STEPHANOPOULOS (ABC NEWS): You know, the White House says the President is going to be going back out there. He'll be on the road this week and a bit more in August as well. But Donna, I wonder if the problem with the press conference, I know the White House, they were upset that the - you know, the Gates thing got so much attention. On the other hand, perhaps the press conference was mistimed. It was clearly probably originally scheduled at a time they thought the President was gonna be selling one bill in the House and one bill in the Senate but process just wasn't there.

DONNA BRAZILE (ABC NEWS): Well the timing might have been off, George, but we also know and I guess because I'm also in the cable business, that people need to fill some of their hours on TV. Remember that - remember the fly episode, or the mosquito that he killed, that was three or five days on TV. I had to go out and, you know, find some other stuff, because I heard that I couldn't kill my flies and mosquitoes. This - I don't think it's a question of overexposure or bad timing, I think it's because I think when the President speaks he's often refreshing, he's calm, he's thoughtful, he's deliberate but he's not always focused. And I think that causes some of the problems that we're now seeing with the health care debate. He needs to be a little bit more politically focused, not partisan but to make sure the American people...

GEORGE STEPHANOPOULOS (ABC NEWS): On what he wants and that's been a big question. He knew what he was talking about on Wednesday night but didn't know exactly what he was pushing for.

DAVID BROOKS (NEW YORK TIMES): This is endemic in the structure of the way he's running policy, which is that he has some vague ideas which are noble then he hands power off to Capitol Hill and they've got all the policy. So when he goes to the press conference, there are 8 million ideas floating around and 8 million - or four or five different committees. He doesn't want to tip the scales on any of that, so he has to be extremely vague. And meanwhile he can't answer the fundamental questions people are asking, one, how do you cut costs while adding in entitlement? How do you change the health care system without asking for sacrifice? And unless you can answer those two questions, people are...


PAUL KRUGMAN (NEW YORK TIMES): Actually, I think that's totally unfair. I think the health care plan, the basic outlines are extremely clear. We know exactly - there are four components. I won't go through the whole thing. There are four components in all the plans. We understand how they're all going work. He's been quite clear, or certainly his officials have been quite clear about how you're going to cut costs. He was perhaps not that good at conveying all of that in the press conference. I mean I like - I thought it was crystal clear but that's because I've been following the subject. But you can't accuse him of having vague ideas, vague policies. This is the clearest policy initiative I've ever seen in my life.

GEORGE STEPHANOPOULOS (ABC NEWS): But he was clear on explaining the problem. He was clear on the benefits of some of the things he was calling for but he couldn't come down and say this is what I must see if the final bill. The only two red lines he drew on Wednesday night were it's got to cut costs and it can't increase the deficit.

PAUL KRUGMAN (NEW YORK TIMES): There is a negotiating problem, which is you can't say this is my minimum. Because then that becomes...

GEORGE STEPHANOPOULOS (ABC NEWS): We're kind of talking past each other.

PAUL KRUGMAN (NEW YORK TIMES): But, but, but he - and maybe he didn't do a good job of explaining the plan, but the basics of the plan are actually extremely clear. It's not the case that this is unformed policy. Maybe he's not explaining it as well as he should but policy is well formed.

GEORGE WILL (ABC NEWS): Well Paul, by saying it's well formed, but we're in a negotiating process, so a strategic reticence is required and David, by saying these are terrible problems and he doesn't have answers sound to me like two good arguments for silence on his part. Get out of the way. The big question in the country right now really is should Brett Favre sign with the Minnesota Vikings as quarterback and I will wager that before the week is out the President will have weighed in on that.

GEORGE STEPHANOPOULOS (ABC NEWS): Actually the really big question from the country, and it affects all of us right now is, is the recession over or not? And the "Newsweek" cover - "Newsweek" weighed in today.



GEORGE STEPHANOPOULOS (ABC NEWS): They have the cover saying the recession is over. They say be careful about what's coming next. But Paul, you're the Nobel Prize Laureate in economics. Is the recession over?

PAUL KRUGMAN (NEW YORK TIMES): Probably in a very limit sense. Right? The numbers right now look like November 2001 which is the date that retrospectively was considered to be the end of the 2001 recession. It looks like we're probably gonna be seeing positive economic growth this current quarter. We're probably gonna be seeing some rise in industrial production, you know. So the Business Cycle Dating Committee, right, in America, the official definition of recession is it's a recession if the Business Cycle Dating Committee says it's a recession, they will probably retrospectively say that the recession ended in July.

GEORGE STEPHANOPOULOS (ABC NEWS): And that we're kind of growing now a little bit.

PAUL KRUGMAN (NEW YORK TIMES): But, but the thing about November 2001 is thought - although the recession officially ended then, unemployment kept rising for another year and a half. And that's what we're looking towards most likely. We're looking towards a period where the economy is growing, there's more GDP. You wouldn't call it a recession exactly but it's going to feel like a recession for - because in fact the job market is getting worse.

GEORGE STEPHANOPOULOS (ABC NEWS): And what's likely George, unemployment will continue to go up and the deficit will continue to go up and we're gonna see new numbers on that as Congress come back to deal with health care.

GEORGE WILL (ABC NEWS): That's right. And it's interesting. I don't know why they did it. Perhaps Paul does. They have delayed releasing usual July report...


GEORGE WILL (ABC NEWS): ... on the budget outlook.

GEORGE STEPHANOPOULOS (ABC NEWS): Although that's normal for the first year.

GEORGE WILL (ABC NEWS): Okay. If, if the recession is over, and let us note and in particular if it ended in July, it ended before, what, 8% of the stimulus, more than 8% of the stimulus had been spent so let's cancel the other 92%.


ARIANNA HUFFINGTON (HUFFINGTON POST): This is a surrealistic debate. How can we say recession is over when unemployment is expected to go over 10%, foreclosures keep growing at the rate of - beyond what anybody expected?

GEORGE STEPHANOPOULOS (ABC NEWS): Well I want you all to answer...

ARIANNA HUFFINGTON (HUFFINGTON POST): Credit card defaults and bankruptcies.

GEORGE STEPHANOPOULOS (ABC NEWS): I want you all to answer it in the green room. Continue the debate there. We're gonna be back with "The Sunday Funnies". But as we take a break, look at this week's happiest video. It was Saint Paul, Minnesota. The rollicking wedding of Jill and Kevin Hines. It's got more than 6 million hits on YouTube and it's guaranteed to make you smile.

Originally broadcast, 7.26.09