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tv   This Week With George Stephanopoulos  ABC  October 4, 2009 10:00am-11:00am EDT

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that's going to take a number of years to dig our way out of. >> most americans judge the economy, what is the unemployment rate? >> 15 million americans out of work. >> we're going to need to grind out this recovery, step by step. when will bs return? should government do more or get out of the way? will health care reform help our hurt? questions for our exclusive headliners, alan greenspan and senators chuck schumer and john cornyn. our "this week" debate. then, olympic letdown, did obama overreach? our roundtable with george will, cokie roberts, matthew dowd and katrina vanden huevel of the nation. as always, the sunday funnies. >> the ioc voted and chicago didn't win. i can understand that, it's october, chicago never wins in october.
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captions paid for by abc, inc. think back to december 2007. george bush was in the white house. hillary clinton was the favorite to replace him. unemployment was 4.9%. today, it's doubled that. america's economy has lost jobs for 21 straight months. more than 7 million jobs gone. there's six americans competing for every open job. yesterday, president obama promised to make that problem his top priority. >> i'm working closely with my economic team to explore additional job opportunities. i you will et up, until businesses who seek capital can thrive. until all responsible home owners can stay in their homes. >> with that, let me bring in
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the man who knows more about the america economy, former fed chair alan greenspan. welcome back. >> thank you. >> for most americans, this jobs issue is the one that hits home the hardest. and that report on friday, much worse than people expected. how much worse is this jobs situation going to get for how long? >> it's very difficult to make judgments at a time like this, largely, because we don't so many instances in country to compare to it. basically, the issue is, the jobs report was pretty awful. no matter how you looked at. indeed, not only did the unemployment rate go up, but i was particularly concerned about the number of americans who have been unemployed six months or longer. >> 5 million americans. >> but that went sharply in september. and remember the reason that is a problem, obviously than the
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obvious personal difficulties that families have in such a context, is that the economy loses skills and people who are out of work for very protracted periods of time, lose their skills eventually, and remember, what makes an economy great is a combination of the capital assets in the economy and the people who run it. and if you erode the human skills that are involved there, it is an irretrievable loss. >> so what do we about it? >> the issue is essentially, economic activity, the reason i say that, if there's a silver lining in that particular report, and it's difficult to find one, it's that american business, after lehman brothers collapsed and the whole financial system imploded, business expected that the
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economy would go down far more sharply than it in fact did, they laid off a very substantial number of people to the point that the actual hours worked fell even more than the economy. so, that what we're getting is artificial numbers which give us productivity gains of horrendous amounts. it has been going down and down and that can't continue. so that silver lining is, at some point, we're going to start to see an improvement in employment. but remember that, unless there's a monthly increase of more than 100,000 a month, you still got the unemployment rate --
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>> that's administration projections show more than 8% unemployment through 2011. the president's going to look at new ideas to spur job creation. what would advise him to do? >> i think the focus has to be on trying to get the economy going. you also have to be careful in that trying to do too much, you can actually be counterproductive. and we are in a recovery. and i think it would be a mistake to say that the september numbers alter that significantly. it is true. the last couple of weeks that some of the numbers have been in a little bit soft. this is what a recovery looks like. it's premature to act on this type of news. >> no new stimulus? >> no.
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no new stimulus. for two reasons. only 40% of the first stimulus has been in place. and there's a considerable debate going on in the economics profession about how effective this stimulus is. mainly because of the fact, as broad as it is, effective it will turn out to be, it's still got 60% left to go. in my judgment, it's far better to wait and see how this momentum that's already begun to develop in the economy carries forward. >> back in august, you thought you would see about 2.5% growth in this quarter, do you change your views? >> no, the numbers are coming in higher than that. >> higher that than tha >> oh, yes. it looks like 3%, possibly even
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higher. the problem with knowing what the third quarter is going to look like, we won't get all of the data for several months. lot of guesswork involved. but it's on track to hit more than 2%. >> you could see an end to the jobs loss? >> i think we're getting clo to that. remember, the end of the jobs loss is not the same thing as the unemployment rate is going to start down. my only suspicion is that, we're going to penetrate the 10% barrier and stay there for a while, before we start down. >> given that, even though you're not for any major new stimulus, what about extending unemployment benefits for people out or work and the idea there should be some tax cuts to make sure that unemployed people are
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able to maintain their health insurance? >> this is an extraordinary period and temporary actions must be taken to sway the angst of the population. i don't actually consider those types of actions stimulus programs. i think they are essentially programs which support people, essentially -- i grant you, it has a stimulus effect. but that wouldn't be my primary focus. >> how about the idea, how many of the cuts are coming from state and local governments. we know they have been crunched. would it make sense given the federal government to step in with more aid for state and local governments? >> basically, there's a good deal of that in there. what has happened unfortunately, is that, over the last 10, 15 years, state and local governments have picked up their budgets very considerably and they are having fiscal difficulties, which the federal
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government, itself, can't really resolve. i have no view one way or the other. but i do think that that will happen. i think the pressure is to do that will be there. but, it's a very tricky political thing. >> how about on health care, we see the senate finance committee about to pass, we think, their health care reform and there's a big debate. it's become a partisan debate, whether or not this will help or hurt the economy, the deficit, job creation. what do you see the senate doing right now, what's your view? >> i have always had the view the real problem we had existed before this reform proposal came in, in other words, we have a huge fiscal hole out there,
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which is best measured by the fact that medicare benefits are only 50% funded. going all of the way out. what that implies is a very significant issuance of treasury securities to meet the ever-growing and very indeterminantly large federal deficit. you cannot continue to increase the federal debt, because remember, over the generations, we have been very careful to keep the total level of debt well below our borrowing capacity. that cushion is now being tested. and i'm getting a little concerned. and i don't want to find out where the upper levels are. and the reason it's important, it will affect long-term interest rates. and long-term interest race are very critical. >> are these proposals going to
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help it or hurt it? >> it depends on what the cbo writes on the senate finance committee bill. we don't know what those numbers are going to look like yet. but, i would say revenue neutral is not adequate. in other words, we have to not only have a revenue-neutral reform program, but simultaneously recognize that we have to address the longer term. >> mr. greenspan, thanks very much. >> my pleasure. we'll go straight to our debates. take a look at a long week in health care on the senate finance committee. >> the insurance companies in my judgment are determined to protect their profits. >> the government is not a fair competitor. it's not even a competitor. it's a predator. >> we have to settle down and find ways of living within the promises that have been made. >> no one has been able to show to me hothey can count up to 60 votes on public option.
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>> looking around there are some pretty tired senators here. >> last we, let mering two of the senators who were there, chuck schumer and john cornyn. i want to get to health care. but, let's begin with the economy. you heard chairman greenspan, no ng-term stimulus. he thinks that unemployment benefits have to be extended. will the senate act this week? >> we're going to pass a bill this week, put it on the floor, i believe it will pass, it will extend unemployment benefits for four weeks for all states. it would go beyond what the house was. you have had 8.50% unemployment is bad. >> will republicans support that? >> i think so. i don't know why the 8.5% cutoff comes from. because people who comprise that 8%, whatever it is, in texas, about 8%, they need some help, too. i hope we can work on that. >> we would be happy to work on that together. >> sounds like it's going to
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pass this week. how about the broader issue? senator cornyn, chairman greenspan said no other stimulus. but the president said he's going to have his team look at more job creation. >> i think the stimulus so far has been unsuccessful in achieving the goals that the president set out for. with the stimulus, we would see 8%, higher than 8% unemployment. we know see that with 60% of the stimulus, unspent, that has not been successful. we're going to see unemployment over 10%. the american people are justifiably concerned, even scared at the spending and the debt that's being racked up. and unfortunately, the health care issue threatens to make matters worse than better. >> so stay pat is your position? >> no. i think throwing more money at the problem and racking more and
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more debt for our children and grandchildren to pay is not the answer. >> bottom line, we have to deal with the pain of people's unemployment benefits. i would be for extending cobra so, people can get health care benefits. >> i'm here for health care reform. you don't have to get it from your employer. people can get affordable health coverage -- >> sure, but cobra's not a great solution for a lot of people because it costs so much money. at's part of the overall problem about making it more affordable. >> then we can do a couple of things. i would be for extending the housing tax credit. which has helped get the housing market out of the severe depression it was in. it's getting a little better, it has to go more. >> we have a lot of agreement today. >> chuck and i agree on a lot of
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things -- well, some things. >> more than people might think. >> the tax credit for home purchases, now it's getting ready to expire, it's limited to $8,000 for first-time purchases. his argument, i think he's right, the excess housing inventories are dampering e recovery. >> extend unemployment benefits and extend the housing tax. >> let me just say one another thing, a broader term, the stimulus is working. 40% has been spent before the stimulus. before the stimulus, we were losing 700,000 a jobs a month. it's going down. the number is about 300,000. as alan greenspan said, it should turn around soon. so, before doing the second stimulus, let's see how the rest of the 60% works. and in certain targeted areas of
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the economy such as housing -- >> health care, i expect we'll see some bigger differences right now. probably the most contentious debate that you had was on this amendment by senator crapo, he wanted to put forward not to have any tax increases for anyone earning under $250,000. >> simply provides that no tax, no fee or penalty imposed by this legislation shall be applied to any individual earning less than $200,000. >> all but one democrat voted against that, why? >> well, it's because the way the tax was defined. they're defining tax, you tax the insurance companies. theyave made huge amounts of profit. it went from 2 billion to 12 billion in 12 years. >> his amendment was so broad, it could include just about anything. they're calling the requirement
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that people have to buy health insurance a tax. now, you may like it or you may not like it. but it's never been a tax. so, if it would narrowly defined and said really a direct tax on people, $250,000 or lower, i think that's going to be in the bill. we're trying to avoid that in every possible way. that's the president's promise. and that's what the bill does. >> middle-class families are going to see a higher health insurance premiums. they're going to see more taxes and more penalties under this bill. the president can't keep his promise under the bill that's currently pending in the finance committee and any other bills in front of us. one thing that we need to focus on is affordability as the single most important issue. making it affordable so more people can get coverage. this bill makes matters worse, by imposing federal government
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mend dates, in the whole foods in austin, texas, they won't be able to keep their current health coverage now because it doesn't meet the minimum acturial value. >> are you sure you're going to be hold the line on the floor? that was a very close vote in committee. >> i think we will. because, again, we're sticking to the president's promise. george, it's difficult the costs, john and i agree with this, they're out of control. it makes it very hard for middle-class families to afford health insurance. the clear thing is, if we do nothing, tens of millions of people are going to lose coverage in the next decade. your employer will call you in, say, jim, mary, you're doing a great job, i want you to stay forever, but i can't afford health care for you.
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so, we have to -- do you put the burden on the average middle-class person now, for instance, when they're not covered, when some people are not covered, we all pay the average pays $150 to pay for the people who aren't covered by health care. or do you wait a while? and snowe and i had an i amendment that no penalties in 2013. the amount went down. and there's another idea that we're doing to look at the penalties. i'm going to propose on the floor, which is, instead of it being a penalty, it goes into an account, like an i.r.a., but just for health insurance, and then, when you buy health insurance, that money will be used for it. >> senator snowe, the only republican, to vote for this bill. you had your former leader frist, said he would vote for the bill. former leader bob dole and they
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all make the argument that the republican party can't afford to be seen as doing nothing on this issue. how do you respond? >> we're for reform. we're not for a government takeover of health care. which is going to do nothing but increase health care costs. basically cannibalize medicare. lot of the reforms we had and giving people more choices have been rejected along party line votes in the finance committee. we all, i think, want to see health reform. we want to make it more fordable, we want to have targeted solutions that deal with people who don't have coverage now. i think what's been proposed will make things worse not better. >> let me just say, senator frist and others have a point, 90% of the amendments that were
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offered by my colleagues on the other side of the aisle, were negative. or sort of gotcha amendments. senator hatch had an amendment. states with the letter "u" should be exempt. they don't have a plan. it's very hard to do this. this is the hardest thing that i have ever seen be attempted. in 35 years of legislation. we're coming together as democrats and we welcome republicans. we hope that olympia snowe will vote with us. this is not 1980. this doesn't work anymore. >> george, the first amendment that was offered by a senator, by senator jim bunning, was that this product, whatever it is, would be posted on the internet at least 72 hours and we would know what it costs. the cbo, at least 27 hours, there would be a vote in committee and on the floor. our democratic friends have voted against that. senator snowe has been a champion of more transparentsy and accountability. frankly, i get the impression
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that now that our democratic friends whether the american people now know what's in the bill the more th find out about it -- >> secret deals in the bill, what do you mean by that? >> for example, we found out there's $11 million mistake by the cbo the conceptual language. that they wouldn't have to kick in more than $150 million toward this deal. there are side deals made behind closed doors. secret deals that we all don't know about. >> let me just say, on the bunning amendment, he wanted a two-week wait. senator snowe said let's get a cbo estimate. let's put the bill online for three days. so that everybody can see it, read it. go over it. that's what happened. it went online friday. we're not voting until tuesday. we have been at it for six to
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eight months. it's just our colleagues on the other side of the aisle want nothing. >> you said the democrats are coming together. the democrats still divided over this issue over public option. senator reid says there will be a public option on the floor. senator baucus said the votes aren't there. what are you talking about here? are you talking more of a fallback plan like olympia snowe? >> the more the public looks at the public option the more they like it. they see it as an option. you want to keep your own insurance. it's a good thing. 65% support it. my colleagues, we'll come together on a public option. it will have some modifications. some leaders have made some proposals. others have made some proposals. there's lots of different alternatives. but we need a public option simply for this reason. there's no competition in the
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insurance industry. a public option will bring costs down by providing that competition. it's only an option. >> the public option is basically a pathway to a single-payer system. but the cbo points out that people will not be able to buy insurance commercially because the government will undercut that and many people who know what they like won't be able to get it. trying to find a practical solution of problems which we agree with. >> we'll see that debate on the floor. the roundtable is next. later, the sunday funnies. however you picture your retirement, pacific life can help... using 401k savings, life insurance, and annuities
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your partners in this amazing journey. the city of chicago, having obtained the least number of votes, will not participate in the next round. >> madrid is still in. tokyo is still in. chicago is out? let me quickly ask you, carl, is this a humiliation for the president? >> absolutely. and he got exactly what he deserved by personalizing this. >> the worst day of the president. >> one thing that's most valuable about sports, you can play a great game and still not
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win. >> the president came home empty handed. let's talk about in the roundtable. let me bring in george will, matthew dowd, katrina vanden huevel and cokie roberts. george, i guess this is the question, you saw some overheated criticism there of the president. a real question, was it the right thing to do to put the white house onhe line? the white house says, hey, you never go wrong for a country. >> well, they were fighting about a city, a city divided about whether or not it would be a good thing to have the olympics there. there's no problem that will not melt before the sunshine of his charm. and this is evidence again that it's not so. the president d the first lady went to copenhagen and gave speeches about themselves. she, mrs. obama, used the personal singular time, 64 times. it was all about them. the danger is, an adjective sooner or later attaches to
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presidents. honest abe. all kind of adjectives. the danger to the president is that vain is going to attach to him. >> i mean, he was going for chicago. i just thought of this. the truth is, he should have used chicago smarts before he went. you don't go into an election that you don't know the outcome of in chicago. and the idea that he would, as the president of the united states, go to copenhagen without states, go to copenhagen without states, go to copenhagen without states, go to copenhagen without knowing that the ioc he did not have the votes the fewest votes of anybody. that's a bad political, terrible political judgment to make. >> they would have blamed president obama if he hadn't gone.
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three cpoints, one, i think this -- the olympics have come draft in corruption. chicagoans were opposed to the olympics coming to their city. i think in the end, obama's lucky. if chicago got the election, every scandal, every sign of corruption, it would have been obama's fault. it would have stuck to him. third, the big trip he needs to take to copenhagen, he needs to go now, it begins in december, the summit on climate change. >> to me, and i don't agree with the republicans who said he couldn't do his job and fly over to copenhagen. any president can do that from air force one. my feeling about this is, is that political capital is limited.
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and every time you take a sip out of it, there's less of it there. at a time when needs the political capital he needs to do health care reform, to try to fix the economy, to deal with afghanistan, all of those things, he takes a trip, in the end, it turns out to be a folly of a trip. i don't think he's humiliated. it raises serious questions in my mind, whether they understand the limits of political capital. or they can picksie dust on president obama -- >> the problem is, it comes at the same time, everybody was already criticizing him. being all over the place. not concentrating. not following through. and going off to copenhagen in the middle of all that, i think it's just bad judgment. >> to get to these points, georgewe have seen the white house face a fair amount of this lately, on the political front, they tried to get david paterson out of the race in new york, he
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said no. they tried to joe out of the race for senate in pennsylvania, he says no. the argument again, no harm in trying that's the job of the white house. >> that's at home. abroad to israel, stop the settlements, they didn't. he said to saudi arabia, some gesture please toward israel, they didn't. in the end, china, please restrain your greenhouse gases, they won't. nato please take some of our gitmo terrorists, they won't. nato, please send troops to afghanistan, they won't. saying no to the president. >> i think that's antidemocratic. what they're trying to do. i believe with the primary system in our country. going and saying to israel, halt settlements, that's the right of the u.s. president. that's called international relations, diplomacy, speaking out the world.
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>> all i'm saying is that the world adores him and ignores him. >> but the world is marching on its terms. america is no longer a superpower. i think this administration understands the limit of u.s. power. what president obama is trying to do and yesterday, when he spoke about the national emergency in our country, which is the jobs crisis, that's where you begin to see a president who needs to limit his perspective. i think he needs to be forced to by the nature of our times. he needs to step up on the jobs crisis. because that's not just political, it's moral. you had on fed federal reserve chairman greenspan. he adverted his eyes from financial chaos and destruction. to say we don't need a second
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jobs stimulus is wrong. >> the big mistake is they let people know about it. you do those kind of deals, where you're trying to get paterson out of the race, you don't tell the world. some white houses do a much better job of that than others. and what we're lrning about this white house is, they're not able to keep these things quiet. >> at some point, he has to win something. and accomplish something. the economy's failed. >> there are a lot of independent analysts who say it would be worse. >> he hasn't accomplished health care reform. the afghanistan situation has only gotten worse since he's been president of the united states. all of these things, whether or
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not he's truly a leader that people respond to, he has to accomplish something. >> the advantage to that, everybody knows that he has to accomplish something. and that means democrats in congress will give him a health care bill. he's raised the stakes for accomplishing something. september jobs numbers were worse than august. look at the cash for clunkers, what we now know about that. general motors sales down 45%. the interesting thing, all we did with cash for clunkers, was cannibalize future sales. what about to happen now, $1 for dishwashers. you're laughing. this is federal policy. beginning very soon, at the state's discretion, cannibalize
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future sales of appliances. >> i think matt made the wrong point. in the absence of this weak stimulus program, the economic situation would be much worse. but where the political will is lacking in this town is for a targeted jobs creation program. robert reich has spoken very clearly, we're fixed in the city on debt. what we need to fix on is the human -- but, at a time when government, when private businesses, when consumers aren't buying, when exports aren't working, government is the last resort. we need to spend to rebuild this country. but to people back to work. not to spend on wars that we don't need. >> we just heard two senators agreeing on extending unemployment benefits, cobra, that's all stimulus money that
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will be more debt. >> but this is a national emergency in this country. we need to think -- and not dance just around the good edges of unemployment. >> the white house addressed it by saying to do everything at once. the president said yesterday, the principal focus will be jobs. he opened the doors to look at other ideas. the question is, how does he pursue that now or wait for health care? >> they keep saying what the president and the administration does. they keep saying what their priority is. you have to maintain a priority for at least some period of time, at least for a couple of months for people to believe it is a priority. if it's a priority -- my thing about the stimulus package is, when fdr
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accomplished it, when he pushed a jobs package, people actually saw things done, they saw bridges being built, they saw farms getting mowed over, nobody sees any activity done by the stimulus activity, that's producing jobs. >> also, it's the dog that didn't bark. there are jobs. it doesn't convince people that job wouldn't be there if we didn't do this. particularly, at the state and local government level, there were all kind of cutbacks expected to happen, with police and teacher, all that, that didn't happen. >> it would have been farce worse. >> okay, i'm going to go back to that point, they said, if we pass a stimulus package, unemployment would never go above 9%. it has happened in spite of the political package. >> no, b that could show that
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just the economy was in far worse shape before. >> it was once said, that astrology -- an economic forecast exists to make astrology look good. in these contions, matt, it's voir dire to predict what we would see. don't forget, the danger of the health care reform, it's weakened and diluted in the way the recovery package was to address concerns. not strong enough to do what you rightly suggest is, parks, tunnels, industrial policy that may make george go berserk sound like socialism. it isn't. every country has a industrial policy. it would address the auto industry. build light rail. >> the jobs numbers were the worse since the summer of 1983. 17 months later, ronald reagan came within 3,800 votes of minnesota carrying all 50 states.
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what reagan was doing was lightening the burden on states. this comes with the president trying to increase the burden, with higher taxes. >> right now, 40%, 40%, of gdp, is state, local or federal money. i mean, that's an incredible number. so that, adding more to that, i think it's going to distort things even more and the public is so concerned about it. >> at a moment, 1 out of 6 are unemployed or underemployed. i think the focus is putting folks back to work. and not on debt. debt is not this animating feature of our political system. >> meanwhile, let me turn it back to the issue of afghanistan, because we did have some news this morning, probably the worst firefight, eight americans killed
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in a major firefight with 7 00 taliban. it comes in the midst of the president doing his review. and mcchrystal in a speech in london, where he was asked about vice president biden's policy of trying to address the problem of terrorism in afghanistan with drones and missiles. here's his answer. would it work? >> no. the first reason, i believe you have to navigate from where you are. we're in afghanistan, we have established friendships, expectations both with the afghan people and the afghan government. >> this debate has become extraordinary public. george the white house has had two meetings last week. two more meetings coming up this week. vice president biden, the political staff in the white house arguing for a policy much like we see in pakistan.
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the military, mcchrystal, mullen, petraeus, all saying no. >> mcchrystal was asked, could you support it? he said no. now, some people are likening to the mac arthur/truman dispute. this is very different. it's worse. truman had a clear policy reiterated. here, mcchrystal is not differing with policy. the administration seems to be backing away from its own policy. into this vacuum, he's asked questions. not surprisingly, a week ago, with my customary mistake, i said he would be up there testifying very soon. evidently not. instead, he's talking in london and answering questions that are making life difficult for the white house. >> that'because, that could affect the decision, politically, and they don't want that happening, obviously. his point there, that you just heard, about not breaking
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promises, i think is a very important one. a ban in afghanistan again, could have an impact on us. this is really very serious thing that we would be doing here. >> we're talking about nonmilitary. smarter alternatives. >> it's not there to protect these people. the possibility of taliban taking back over and this whole argument is, is the taliban really the same thing as al qaeda? that's a big question they're addressing. what that says, the implication of that, is to say the taliban, we'll let them happen. and then they'll happen inside the country, once again, we're suppressing the people inside the country who are mostly women. >> women have never fared well in a military occupied
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situations. i respect president obama for what he is doing with this review process. i think it shows good judgment. he knows that it's the defining decision of his administration. i think what general mcchrystal has done, he might go back and read the constitution, article 2, the president is the commander in chief. i think we're in a dangerous moment in the civilian and military relationship. finally, i would urge anybody watching the show to get representative mcgovern's resolution that simply demands they draft an exit strategy. >> i think one of the things that we have a problem with, we have all of this investment in afghanistan, because we have
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this investment in afghanistan, with the loss of precious life and resources, we can't back away from it. in the end, they put this broad aura over it, we're in afghanistan to solve the terrorism problem. that we don't want another attack on the united states. in my view, what i think we ought to be doing, we're spending billions of dollars, at some point, we need to prioritize our spending. on money, in relationship to terrorism. if afghanistan is a point in that, we should deal with it. if it is not, then we should move the resources. and spen them on something else. >> it's not, katrina, a constitutional crisis. when asked in public a question about the policy the president himself is questioning to give his opinion. >> i think it does demand of general mcchrystal to go back and read the constitution. i didn't say a crisis. >> he will accept the president's decision. he's trying to influence the president's decision. just like everybody else is.
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>> i think he could simply have said, refer this question to the defense department or the white house. but i do think, we have a broader problem, the erosion of civilian control over the military, did not begin yesterday. i think president bush's ongoing deferral to the generals on the ground, erode president's prerogatives. >> the president said no to several of the generals. he said yes to others. >> and the leaks, the bob woodward leak. boxing in a president. >> president bush was weak in the iraq policy. didn't say that the generals made those decisions. they said the secretary of defense donald rumsfeld made those decisions. >> you guys continue this in the green room.
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you can follow it later on get updates all week long from our daily newsletter, also on coming up here, the sunday funnies. the sunday funnies.
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now, in memoriam. now, in memoriam. ♪ lucy in the sky with diamonds ♪ ♪ lucy in the sky with diamonds ♪
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