the pump is really starting to hurt. gas praise have never been higher on this date as they are right now. triple a says the average state wide price of gallon of regular jumped 18 cents in the last week. 8 cents overnight. we are paying 4.32 a gallon ample. in fact whole sale price have become so high at least one independent station in southern california has closed temporarily. of our sister station in los angeles has more on that story tonight. >> there is no business. no business hear. market is dead. you know. how am i to come up with 20,000 dollars expense. >>reporter: charles owns low key independent gas station here. he had to shut down the pump this morning because purchasing gas for his station was just too expensive. and to make a profit he would have to charge nearly 6 dollars a gallon for regular unleaded. >> you see the prisons over there? 6 dolls. if i get gas purchase the gas rate now fr thcompan i he t sell at that preo ha 10 cent on the gas. >>repoer: prices sky rocket due to cut back in supply because of problems at refinery in california. exxon mobile in thorns suffered power failure. chevron pipeline shut down last month and richmond, california plant is operating at reduced capacity after a fire in augus august. for drivers like ryan who greatly depend on gas for work t burden this wk price hike is alst too much to bear. he cleans pools and says he has no choice but to drive a gas guzzling truck. >> i try to take a smaller car i can't fit everything. >>reporter: other drivers just as frustrated. some point blame at the oil company. >> every three-month they make like 3 billion dollar in profit but they don't realize that how the economy is suffering. how the small business is sivshtion at a time when drivers are used to seeing prices drop, sudden surge is making a dent in the pocket book. many folk are wondering when it will get better. >> makes me want to pay more attention to the presidential election coming up. so i want to see what they have to say on the >>reporter: one more note. experts say we can expect gas prices to continue to climb for the time being. there is a new leader of the catholic church for 3 bay area counties tonight. >> i'm humble by the confidence that pope benedict xvith has placed in me. >> that is the new archbishop of san francisco. installation was a moment of pomp and protest. vl lee ann has the story. >>reporter: mood outside the ka that he had rall was festiv festive. hundreds of catholic came to witness the installation of the new leader in san francisco. >> i think it's a big day for catholics. all the bay area. yes. >>reporter: escorted by security officers the priest waved to people waiting outside the cathedral. he followed tradition as he entered through the bronze doors. not everyone was allowed to witness the ceremony. only those pre-selected and with tickets could enter. outside a group of followers cheered him on. but gay activist also made themselves heard. he ace big opponent of same sex marriages. outside it turned that a heated debate. >> if the family as the catholic church between one man and one woman. >> he can say what he says but we don't agree. nothing wrong with being gay. nothing wrong with our right to marry. here to stand against his installations the archbishop of sanrancis. >>repoer: b the spesperson for the archdioceseays he's willing to listen. hreal wan to listen to people in the parishes. he wants to hear their needs. >>reporter: he recently found himself in an awkward position after being arrested on suspicion of drunk driving in late august. shortly after he issued this statement. i apologize for my error in judgment a feel sham forhe disgrace i haveroug upon e church andyself. >> i sort of t it in the same ballpark family. o mily might have sebody in the family make a mistake and family gathers around and supports and i think that's exactly what is happening here. >>reporter: but today the message was about unity among catholics. these young students from saint john school say they are positive about their church. >> from what i ow i think people are going to be a little more interted. >> our community will take a bigger step in respecting and paying for things. >>reporter: his first service will take place this sunday in east palo alto at church that according to the archdiocese has many latino immigrant. in san francisco, lee ann, bc 7 news. n fr contra sta county hadied fm rabies ofcials sathe 34-year-d was tten ba ba in late march. he died july 31. we expect more information on this at news conference scheduled for tomorrow. state parole board panel recommending parole for charles manson follower. imprisoned for 40 years. bruce davis convicted with manson and 2 murder unrelited to the infamous sharon tate murders in 1969 this was the 27th of parole hearing. davis turns 70 tomorrow. oakland police chief is asking for more help from the public tonight to stop the rising murder rate in the city and his plea comes at the same time his department is under the threat of a federal take over. nick smith is on the story. >> i think a lot of these issues are in pockets where if you are playing with that crowd then that's what's going to happen. >>reporter: she appears to be right. she opened the barbecue here 10 months ago. knows about the violence that plague the city but it has avoided her and the restaurant. she thinks she knows why. >> we communicate with the people in the neighborhood and look out for us. >>reporter: communicate. that's what oakland city leaders are trying to do. >> many in our community are reluctant to come forward with information. >>reporter: oakland police chief jordan led a press conference focusing on the city effort to reduce crime. rash of gun violence left 5 people dead in less than 24 hours raising the number of those killed by gun violence in the city of oakland to 90. today the department introduced tip watch. new tool to fight crim crime. >> this is one of many ways that you can help reduce violent crimes in oakland. >>reporter: those submitting tips can not be identified b police or service provider. information is encripted and web secure. the service allows information to be sent anonymously by text messaging or e-mail. county top law enforcement official says community involvement is key. no one should live in fear. >> people are starting to feel empowered. that's a shift i'm seeing for those in t community. we are making people look a what oakland a little differently and briing economy here. >>reporter: and making them feel empowered. crime and how it is handled in the city of oakland continues to be an issue. oakland police department remains under scrutiny for ignoring court order reform issued in a lawsuit. now attorneys sug the ty have until midnigh tonight to fileheir motion requesting that the feds take over the oakland police department. in oakland, abc 7 news. >> the woman accused of abandoning her 10-year-old daughter at morgan hill safeway store after botched shoplifting attempt is now in the custody of the santa clara county sheriff's ofce. e wa arrestedast week neva hol awe rerted th her 11 month old son and male companion. she was extradited and handed over to sheriff deputy who transported her from nevada today. police say the 38-year-old l woman left her 10-year-old daughter behind when she was caught shoplifting a cart of grocery. she faces burglary and child endangerment charges. now we have some great news for a little san jose girl whose puppy was stolen as we told you. the 2 were rae quantityed late today. burglars took 5 month old dog this past mopped after stealing all sorts of the family possession. corina was there for the very happy moment. >>reporter: this ace cheerful surprise reunion between the puppy and 10-year-old companion marissa. >> i thank everybody who made this happen. i just can't believe he's in my arms righ w. i ough itould be ing forev. jusso happy hereight now. >>rerter: teves sle h on mday ring a me bulary. we rerted th llous imeesteay. in additiono hefty reward fund set up by city council member and police and fire union, marissa was offering the content of her piggy bank for the safe return. today real came forward saying a woman gave her the puppy yesterday after finding it wandering in a parking lot in loss ban os. >> you can have him. i just found him right now. i don't know who is it is. maybe you can have a good home for him. >>reporter: amid hug and tears police officers presented her with 6000 dollar reward check but she told marissa she could keep her piggy bank full of money. marissa mom is thrilled the puppy was found so quickly after the plea for help went public. >> you have made an amazing ending. i couldn't ask for anything better. and it's definitely something we will never forget. we'll make sure everyone l knows it. >>reporter: after 4 day ordeal the puppy now home. family couldn't be more grateful. >> just happy that he's safe. and he's back with our family. he's going toe safe no matter what now. report: police believe out of town thieves targeting san jose stole the puppy along with tens of thousands of dollars worth of electronic equipment and then dumped the stolen puppy when they realize his photo was on the internet n.san jose, abc 7 news. we have a lot more to bring enthusiastic thursday night. coming up. american air lanes says it has gotten to the bottom of the seats coming unhinged and the blame may lie with passengers. we have that story ahead. >> also the blue angels have begun the practice run over san francisco. you will see the heavily guarded secret weapon they have brought with them this year for fleet week. >> i'm in the accu-weather forecast center. blue angel and many other activity this weekend. will we see more sun than clouds. find in and out ctn weather focast coming. >> on up t do and like ole bunch smoke. >> also. braveoungoman les the way rescuing an entire family. cght on tap jumping from burning bldi ♪ [ male announcer ] the first look...is only the beginning. ♪ ♪ introducing a stunning work of technology. ♪ introducing the entirely new lexus es. and the first ever es hybrid. this is the pursuit of perfection. >> there's a familiar sound for fleet week fans. blue angel spent the afternoon practicing those jaw dropping maneuvers that they are so famous for. they will be out practicing again tomorrow before the saturday and sunday prformanc as wl. ifou were anywhe along the san francisco waterfront today you could not help but notice them overhead. a lot of sailors in town as well. wayne has the story. >> just when it seemed safe to take a nice quiet walk in san francisco. no need to duck or hover, this is fleet week. >> i love the formation. that they make. just the show itself. i love the sound. >>reporter: and if you can catch a blue angel on the ground he will explain the process behind today's the landmark as check points. >> i'm flight leader i look for the check points. the check points that awill you me to get in and out of the show box safely and effectively. >>reporter: across the bay coast guard island in alameda fleet week is more about inner service softball tournament. the navy and marines against the coast guard. have you ever wondered how these guys play so well when on ships most of the time? do you play in the ship. >> yes. >>reporter: where does the ball good. >> hit a wall. going to hit so we are all right with it. won't be home runs. >>reporter: speaking of ship and ship mates. technician michael jones and aj young had about 10 free hours in the city today 10 hours doesn't leave a lot of room for adventure. >> that's the rules. >>reporter: maybe it has to do with dna because moments later adventure found them. model guy with a camera. photo op. >>reporter: are you corrupting the navy. >> oh, no i wouldn't did that. reporter: not even in the spirit of fleet week. i thought you were going to get in trouble. >> i don't view that as trouble. just helping somebody out. >>reporter: clearly in the united states navy chivalry is not dead. along the embarcadero, abc 7 news. >> no it is not. hope they have a grit time while here. and the weather spencer is cooperating. >> lovely weekend. no heat wave any more. not terribly cool either. lots of sunshine daytime the and low clouds fog at night here's live view night tonight from the high defition camera. embarcero skies clear inldut we ve oudsow cloudsog alg e coast and more pushing into the north bay right now but the peninsula as well. spread very widely. looking at temperatures mainly in the upper 50's but milder readings 68 inland at antioch and these are our forecast feature clouds and fog thing and more wide spread overnight. partly cloudy to mainly sunny friday through sunday then chance of showers early next week. over nature tonight starting forecast animation 11:00 p.m. we will see clouds and fog out to the inland east ba ma parts north by a on tthe plan t so much on the south bay. overnight low mainly in the low mid 50's and resume the animation starting at 5:00 o'clock tomorrow morning and going into the weekend we see partly cloudy mainly sunny skies. mild with upper level low which is sort of hovering offshore make a run at us on monday then drop down along the coast lane on tuesday and bot days chance of showers from the upper level low. dot expect them to be heavy or wide sprea spread. tomorrow we have wide spread sunshine in the south by with high pressure mainly in the low to mid 70's. 73 san jose campbell kawp tino. on the planes high of 69 at san mateo. 72 mountain view on the coast pretty mild despite the presence of low cloud fog 62 at pacifica. 64 at half moon bay. downtown san francisco high of 64 tomorrow. 61 in the sun set district. north bay pleasantly cool to mild high mainly in low to mid 70'ss. 74 at calistoga. east bay look for high of 64 at berkeley 78 union city. inland east bay a little bit milder but not very warm. high mainly mid upper 70's. 74 at concord. 75 danville. 76 livermore, 78 at brentwood and monterey bay high at68 and low to mid 70's inland and morgan hill gilroy and holster. accu-weather 7 day forecast. cooling continues rate into early next week. high pressure inland only in the 70's. upper 60's around the bay and upper 50's on the coast and we might have a sprinkle or 2 or couple showers widely scattered light monday tuesday then dry out on wednesday thursday so forecast is looking good. certainly a great weekend for all the out door activity and should have good visibility with all the fun in the sky with the blue angel. >> excellent that's perfect svrption thanks very much is that bay area medical research unlocks the secret to building a human heart. >> disturbing new development tonight in the death of border >> abc news learned that friendly fire may to blame for the shooting death of border patrol agent this week. nicholas ivy was killed in arizona on the mexican border. second agent was also wounded. mexin authorities eolding men who may connectedo te shoong. >> aerican airnes says it has now figud out whatts causinthe ses com unlted. company says the problem lie was what is called the state lock plunger mechanism getting worn out then further eroded by soda and drinks spilling on them all the time. american says the mechanic are working on a fix. it could delay or even cancel somelights through saturday. >> now to some medical research in san francisco. most people understand how easy it is to break a heart but how about making one? t health science reporter carolyn johnson looks at blue print on how we treat heart and print on how we treat heart and heart disease >> even through a microscope there is no miss taking the rift mick beating. living heart cell were created in a bay area lab and help researchers unlock the secret of how a heart becomes a heart. >> helps to have a blue print. to know what switches exist. how they are connected and what they turn on or shut off. >> so bruno and his team at san francisco glad stone institute set out to map the genetic switches locked inside the dna of of stem cell to see how a stem cell becomes a heart cell. >> with these the modification are doing is they are setting the right switches to turn gene on or off so that a heart cell in this case gains its heart identity. >>reporter: to begin researchers jeffrey alexander coax millions of stem cell taken from mice into becoming beating heart cell, process didn't in petrie dish and they mimic the environment in the woom. not always a pre-size sigh he says. >>y weekend sometimes wou hinge on whher i came in and saw the cells or not. >>reporter: once the team had enough of the beating cell they began watching them as they grew and developed painstakingly extracting the dna and cataloging the dna changes. possible made possible by the development of powerful new gene sequencing technology. >> this cost 3 billion dollars to one individual dna now we do the same person dna in a week for 3000 dollars. >>reporter: still it took massive network of computer to organize the data into a color-coded genetic blue print detailing the creation of heart cell. while having the blue print conjure up image of agreeing heart but the impact might be preparing them or heading off birth defect in babies before even pwoyvrnlt we potentially co-part of the attraction to understanding the blue print especially this type, is that it is very aamenable to drug type intervention. >>reporter: the team hopes to study did the na born with heart disease and identify the consist ruption that cause the heart defect in the first plac place. possibly identify treatment that can turn the switch back to normal. changing the lives of some 35,000 babies born with heart defect in the u.s. he have year. >> that's carolinohnson report snooing breaking news we discovered during the report. this is live picture of the bay bridge as you can see the vehicle is on fire. we think it's an suv that is burng. fairly ferociously and on the upper deck coming into san francisco. close to the fremont exit almost all the way across the bridge. shut down couple lanes of traffic right around the fire. it's really burning the vehicle utterly destroyed by the time this is over. we didn't know whether anyone was injured but heats hope everyone got out okay and it's the car that is burning. again leif picture from the bay bridge tonight. >> moving on mt romney takes adntage of ts w momeum aerast nit esidential debe. wh we comeecome re toght. yr voice yo vote. 7 ns fact check olast nature face off. plus the one thing that matters even more than the truth. also even more than the truth. also what political punditl >> we are going all the way to washington. paul ryan and i are going to getmerica on track. >> mitt romney speaking in fisherville, virginia this evening. huge crowd watched as music and fireworks capped the campaign event. well room any is certainly riding high after last night strong performance in the presidential debate. advisors are already capitalizing announcg a series of ads and renewed push to build their smaldonor base. in a very frank admission obama campaign will make strategic changes after the disappointing showing last night. political pundit are just as blunt. >> i don't know what he was diagnose out there. he had his head down. he was enduring the doe bait rather than fighting it. >> it lookedike mney wanted to be there and president didn't want to be there. >> when you go to 5000 feet and you only have a few hours to adjust i don't know. >> good or bad mitt romney and -- did room any and the president tell the truth last night. mark tonight with the fact check. >> president accused romney of proposing tax cut for the rich that will hurt the middle class. >> average middle class family with children would pay 2000 dollars more. >>reporter: fact check. president numbers are shakey. 5 trillion is romney proposed tax cut over the next 10 years. the president number assumes that there will be no change from increased economic growth. when it came to the health care debate romney made a similar assumption. >> i can't understand how you can cut medicare 7 16 billion dollars for current cipient onedicar. >>repoer: fact check that 7 16 billion dollar projection. the president plan saves that much money by limiting payments to insurance company, drug company and hospitals. and they have all agreed to those reductions. soless tonight both men were relaying on own assumptions. the facts sometimes took a beating. >> think basically pele a judgg on the perfmance itse. on who seemed more confident. more relaxed. >>reporter: sov news political analyst bruce king says nobody is judging the debate on most factual argument. both men stretched the truth to fit their assumptions. but based on performance mitt romney was the wish. it will help him in the poll political analyst says it's hardly the bottom line. >> i think the most important thing that happened last tonight was not so much that the race will tighten but that the money is now going to continue to flow into romney coffer. >>reporter: professor cain believes before the days bait romney campaign was lacking like a lost cause. financial backers needed to see a turn around and they did. if the president was relaying on just the facts, last night should be a wake up call. >> you have to make the case yourself and you have to do it with a certain amount of passion and energy and that's not something that we saw last night. >> in the debate we saw mitt romney move towards the middle. we saw the president fail to anticipate that move and make the most of it. as a result the race is now a ttlele close closer. in the newsroom, 7 news. and hours after the debate and already tune gregory brother tunes base ed on the news and here's st of th rendition of e dete. >> oma. romney. as president i will sit down day one sit did you know with think about the issues talk about challenges. ♪ part of being a leader is not just significant i'll sit down. you tend tdo. kay. movingn no tohe economy get better soon. i lov big bird. i like pbs you too but i'll stop the subsidy the pbs i work this out of our budget. are you going to tax people ♪ if [ singing] bring down rates double down on the top down. simplify the code ♪ double double down. >> on the base. >> all over the internet as you can imagine. pretty clever. take as lot of work all right. >> on that note we move on and leave the debate behind. one final word. up next. scottish man dies and when he does he take the town whole language take the town whole language with him. 7 news >> in new jersey a mother and 5 chilen arekayfterumping toafetfrom the trd sty apartmenflamesraed th inside. t terfying mont we allaught on tape. here's the oldest one describe wagon happened. >> i jump out the window right there and landed right here on the awning and fell out rate here and help my family. >> people start coming. >>reporter: those people helped catch the rest of the family as you can see. first came 14-year-old girl tn th 8 and 9-yeaold then the year-old whoumped while holding on to her mother. amazing. family suffered bruises strains couple broken toe but obviously it could have been so much worse. >> contra costa county courts are gearing up for round of drastic painful cuts. we have learned that those who suffer the most are those who can least afford it. vick lee investigates the story in tonight assignment 7 report. the the. >> contra costa county superior court announced last month it will close 6 courtrooms. this because it lost millions of dollars in recent years in state funding due to california budget crisis. the court shut down are mostly in the east and west of the county. this is where contra cta cnty minoritynd poostf the resint li. in rimondthe juvenile law courtom wil close. cases will bmoved all the way to the main courthouse martinez in the centl part of the county. the same thing will happ in pittsrgh. wh its juvenile family courtrooms go dark t.she head the bar association. >> these are folks who have least amount of income. least access to public transportation t.and least amount of resources of anybody else in the county. yet they are being the made to take the brunt of these budget cuts. >>reporter: lawyer dan fice in richnd bieves th tsiolate the la. >> when e change to a court are con in a mapper where people are fundamentally deprived of their ability to have job in the court. taking away their constitutional right to access. >> hamilton unemployed college student who has a child custody case in richmond juvenile court. like many resident affected by the court cuts he has no car. he now lives in oakland which is a fairly quick 30 ment trip by bart but when the crt closes here hamiln wi havto ta barfrom oakld to denorth then wt cap bus martinez. trip that could cost more and could take an hour and a half ichltd that means i have to leave at 7 or 6:30 at least get up around 6 or 6:30. >> many people here walk to court have to take local transportation public transportation which is relatively in the general area but to go to martinez it is fundamentally impossible for me. >>reporter: police are worried about the court closure and whether much longer trip to martinez will affect cases involving troubled teens. >> might be more missed court date where if the court was here they would be more inclin to go to theourt date. the the fily courtrm in pittsrgh scheduled to close its doors at the end of month. court officials martinez never responded to our request for an interview. vick lee, abc 7 news. >> around the world news. riot police in greece stop shipyard workers demand to go meet with government officials not getting paid for months. demonstration and strike are common in greece as the government imposes strict austerity programs to deal with the financial crisis. >> in turkey police use tear gas on ti-w activt trying to march on e ofuildin oss borr raid intsyria were approved. it's in retaliation for mortar attack from syria that killed 5 turkish civilian. unleashed a hail of artillery at targets inside syria. turkey prime minister says he does not want war with syria but says he will protect the borders and retaliatewhen nessa. >> sce of ottish hair tan nownly a part of story. whennto oeld die lst wee in the northern sco acknowledge village took with him his naked language. ♪ [ singing] he was the last known person who knew this dialect. it has a strong bible influence with thee and thousand and hog might be used what is your trouble. desperate for tea and if very drunk. >> i wish i knew how to say still ahead. a lot going on this weekend in the bay area including music festival in including music festival in golden gate parkl ♪ take a letter maria ♪ address it to my wife ♪ the biggest hit. we learn today he died of prostate cancer on september 27. he was 68 years old. you should know that he had a talented family. his uncle was the legendary r&b singer sam cook. he sang tunes like twisting the night away. >> this is most haven'tful weekend the bay area has ever seen with more than half dozen major he haven't happening at e same time. we have already talked about fleeweek. here's arts entertainment reporter don sanchez more of look. >> hardly strictly blue grass is musical treat in the park. tribute to the founder. superstar at the 35 mill valley film festival and appearances by these actors. between friends explore the stop motion animation production and now in museum in the presidio. legendary helen ready returns to the stage with this hit. testimony bay area institution grea jazz music monday night at this. great wall west grand avenue in oakland remarkable performance. friday night behind the pixar screen personal work by artist at pixar. rediscovered fascinating shop at the uc campus able of change now showing in the bank croft lottery. >> art exhibition features work >> art exhibition features work by them now showing thisenteras visionor preservi latin cuural art celebratin any abc 7 news with so many big event we have a map on our welcome back site and how to avoid hot spots. pwoyt is exciting time. so much to diand the weather is cooperating. spencer is here. >> start with big weather event today that was big cool down from yesterday mainly 90's and side by side today much much cooler. clover dale 21 degree degrees. petaluma 22 degrees and wul night creek. take planner tomorrow lots of activity over the san francisco waterfront tomorrow. 10:00 o'clock but at 1:00 p.m. partly sunny skies blue angel doing their thing in the sky. america cup races sunday temperature 63 degrees and over in golden gate park tomorrow we have thbluerass festival 10:00 o'clock in theorni it's cloud and cool and sunny year mild in the afternoon hours. here's 7 day forecast. current cool down continues all the way that next week. pleant weekend. temperatures mainly in the0's mid 60's arnd the bay a light chance for scattered showers. looks good to me. >> many we have all the sports tonight going on. >> part the 49ers. and giants. college and pro rank. giants prepare to open theplay o against theeds zito talks against theeds zito talks about not bng about. >> coming up tonight at 11:00 o'clock. local teenager fight to become an eagle scout. why his scout troop though is denying his dream. >> plus the daily coffee fix and new research on shedding light on how it affect your eye sight. you know it affects your mood. see how it affects your vision. more on 11 on channel 7. rick lots to talk about. >> yes. giants know it's couple indicates away. 2 wd card gain in the original series open saturdayithhe san francisco and oakland in action. the giants went through light work out late this afternoon at at&t park. next up the central division we know san francisco we understand a world 60 in third years. that is not the case this time. >> i'm glad to be healthy this year and be able to make every start and having fun is everything. so i plan on having more fun when i get out there. >> when you get in post season play intentionally so much perfect for every pitch every out so definitely it's more intense. >>reporter: game 1 is saturday at 6:30. madison will start game 2 on sunday. manager bruce isn't sure if he will go with tim or zito with game three. a's arrive in detroit. saturday 3:00 o'clock. oakland parker will likely get the start against justin bury lander. one done for bobbie valentine. red sox affidavit skype and 93 was its worth in 50. >> shout out of the jets the 49ers big favorite to take over ratted by the patriots 52-28. buffalo fell apart the second half allowing 6 straight touch down drives. forty-niner safety played 5 seasons with the bills. he says that team problems are often management related. >> i say that because a lot of guys out there, go out and pour their heart night and you never win. never go out there and feel like newer control of football gales. if comes om coaching. fom uthe. i think that coming the right players. i unthat still a gamble can't allow them to do this. >> on thursday night football. arizona at st. louis on ram first possession. bradford up for t danny who makes a great one hand grab. he would later leave with soldier injury. scramble before hitting his ow own. first last of the season frame. 3 straight losses cal will pwouvrj back ucla. weekly news conference the coach says bigew ll dinitely ore invoed wh theawe soov yards to cay bigew di't touch the ballonce during last night week to arizona state. i asked game for what we are done. ball could have g.o.p. to him but take it away. could good to home if they defense but if this he don't something happens. >> zero thayers. fans screeching their hand over there. certain things other guys do well. doing other things the guys are in there for and he wren 0vacation coach does great many depend tan on what we are diagnose all the time. usc takes on utah and salt lake city. bad snap then stripped of the call by nate buck pooh. at the time university led 14 nothing before the trojans readded bar bartcly. threw for more than 300 yards and 3 touches down. longest to wash each play 83. 38.8 now 4 d. teor the b gamsongr yle. cal astanfo 44 minute. noise on the keeper. maybe nothing dr. more mid with another. cardinals moves on to 5 and 5. with no new labor talk scheduled fers two week of the national hockey league season have been cancelled. the owner players trying to figure out how to divide 3 billion dollars next thursday. >> last time that happened. >> 2004. >> it hurt the leagueadly didn'tt. >> y. entire cancelled b i think the owner wuldhe car on this. see washingn hatches >> thanks. that's this edition of 7 news here on coffee tv 20. for all of us here, dan ashley thank you for watching hope you appreciate and check us out there and any time you there and any time you wish.take care see new an hour.
regulators are not you in the hot seat over the libor scandal. "new york times" reporting american and british lawmakers want to know whether regulators loud those banks to report false rates to the run up to the 2008 financial crisis and afterwards. yesterday the house financial services committee oversight panel sent a letter to the new york fed about it asking for transcripts from at least a dozen phone calls in 2007 and 2008 between central bank officials and executives at barclays. michelle. >> in corporate buzz this morning alcoa reporting better than expected second quarter earnings and revenues after the close. the company says it sees strong aluminum demand driven by the auto space. year on year comparison not so good. amd slashing its q2 revenue outlook. seeing revenue falling 11%. prior guidance was a range between a 3% decline and 3% increase. investors punishing the shares late yesterday. take a look at that. off by 9%. intel is buying up to 15% of asml. intel will spend more than $4 billion. the u.s. shares of asml jumping announce. the company is the world's largest supplier of machines. google close to paying $22.5 mill thrown settle charges it bypassed the privacy settings of using safari. >> some of the stocks to watch this morning, united technologies announcing its aircraft unit signed a five year $8.5 billion contract with the u.s. military. shares of mayco surgical. cutting its full year guidance for sales of its rio robotic arm. saying it's been slower than expected and has seen slower than expected growth in the first half of 2012 and shares of price mart are trading lower. companies earnings and revenue missed the mark. they operate warehouse shopping clubs mostly in central america. >> you know what my favorite is, umsurance just to let people know i'm not from here. >> in case they had any doubts. >> i'm sorry for interrupting. >> something i've used. >> absolutely. >> for what? >> on the hinges. come on. >> oh, man. >> cue it. thank you. >> we don't have a squawker moment. >> has there been a squeaking sounds with you at times? wd-40 quarterly results -- >> what time is it? >> if your twins had a swing in the backyard, wd-40. you don't have a backyard. that's why i said if. >> hinges. hinges on doors. just recently. you sneak around in the middle of the night. people are trying to sleep. >> pre-war building. >> i'm sneaking out to get here in the middle of the night. >> she had the music going and who knows what's going. >> i'm trying to defend you. >> oh, yeah, right. >> wd-40 quarterly results disappointed wall street. it said it was hurt by lower sales in its american segment. full year results will be at the lower end of its outlook blaming continued uncertainty in europe and oil prices. >> people buying fewer older cars or what? >> don't know what that was. alcoa was weird. we said it was earnings but it was a loss. pushed into a loss. >> better than expected. >> $2 million which is a zero loss because it's not even, doesn't equate to a per share loss. if you factor out items it was a six cent profit. $8 stock. >> comes the first day -- >> we have to make it significant. >> but it is the sort of the left-hand side of what will be a lot of earnings. the first one. it's not because it's aa. >> why is it? >> we always say it. we all say that. >> they can do whatever they want. >> when you name a company you want it in -- you've see quadruple a, aluminum siding. >> i would think there's a lot pressure. >> on alcoa. >> if i was alcoa, have to go first. >> get it out of the way because it's never good basically. it's an $8 stock. ate dow component. they took every other dow component out that deserved to be taken out and leave this poor -- what's the market cap interest. like the tenth of a dow component. $9 billion dollar cap. apple is not in the dow. >> you can't do things based on whether -- so you leave this thing in here. >> swear they do put stuff in there. that's why cisco and intel is in there. you need a death knell. >> the death knell. >> microsoft, intel and cisco. >> aig was in there. >> this is like a stadium -- >> no. >> stadium curse. >> cover of "business week". death of bonds in 1981. death of bonds in 1981. that's bloomberg "business week" and it's better. >> barons said -- >> it's in my driveway and i'm the public. i don't even take it out of the plastic any more. >> you just read it online or you don't read it? >> i don't take it out of the plastic which is somewhat reflective. if i have that -- when did he jump the shark. he jumped the shark before. he jumped the shark before fonzie was jumping the shark. >> now who fonzie is? >> yes i do. >> let's check on the markets so far this morning. right now the futures are indicating a positive open. the dow would open higher by 56 points. the price of oil is lower across the board. wti is down 49 cents. sbrent below 100. the ten year yield, we saw weakness in the markets yesterday. we didn't regain anything. this morning we're seeing treasuries sell off a teeny bit. yield is at 1.523%. the dollar is lower. the euro will cost you a buck 23. >> you have jerry mahony on your lap? >> price of gold is higher. 1593 per ounce. >> let's go across the pond. it is time for the infamous, if a mouse global markets report with kelly evans who is standing by in london. all sort of things and green arrows. she's going try to stay standing this morning as well. so good morning. >> i am. good morning, guys. different picture from what we've been handing over in the last several days. sea of green behind me. only about one in ten stocks down under the europe stoxx. up with the overall average of 1%. reasons not entirely clear. maybe a pause of selling activity. some relief on the headlines after the bailout discussions. nevertheless, attention shifting to barclays because these shares are up more than 2%. this comes as its current chairman, outgoing chairman, marcus agius testifying. he's the third attorney testify. this is happening behind me still. he follows bob diamond the now outgoing ceo and paul tucker the deputy governor of the bank of england. this all including the libor fixing scandal. marcus agius kicked off his comments with this announcement regarding bob diamond's compensation. >> bob diamond has voluntarily decided to forego any deferred consideration and deferred bonuses to which he otherwise would have been entitled. >> what's the value of that? >> well it's not a precise figure because it depends on -- >> current valuations. >> the maximum amount would be 20 million pounds. >> 20 million pounds. trying to curry favor with the committee. got contentious quickly. they focused on cull issues at the bank, the relationship that barclays had with regulators. that hearing will probably go on for another hour two. market is supposetive. we started out mix to lower. italy up 1.7%. dax up 1.3. ftse 100 up .8%. helped by relief over uk retail sales in june. quick look at the bond wall. this has set the tone lately. this is where we're seeing a bit of relief. spain was well over 7% mark yesterday is now 6.855%, italy also below its key level of late that's 5.195% and to finish up france now seeing its eeld at 2.37%. ten year bund in germany 1.33%. guys? >> all right, kelly thanks. in other news this morning, $220 million in customer funds is mission at an iowa brokerage. a regulatory group says it can't account for the money at peregrine financial group. it's order the company -- every time do you that -- >> the paper is so big. >> you're talk. company's accounts. pfg -- >> becky is back on thursday. >> pfg is telling clients its founder and chairman russell wasendorf sr., not a good thing if you're one of the people that doesn't have his money, he attempted suicide yesterday apparently. the national futures association says it has information that pfg may have falsified bank records and has $5 million of the 225 million it claimed it had. someone gets stacey keach on the phone because, you know what i hear. >> ""american greed"." >> "american greed". >> debuting in three months we can turn this around. >> we might need it by next week to be in the news. >> if you want it totally current. 220 million. "american greed" has done less than that. >> we should all get on there. we can do it as a "squawk". >> we don't know anything about it except it's in iowa. >> at 20 minutes past the hour we'll get a demonstration on what the money was spent on. then, you know, 32 minutes past confessional by somebody. great formula. >> if you were an investigator, would you start investigating this really hard when i just saw a picture of corzine out in the hamptons. what's the big restaurant. >> nick and tony's. he's still, you know, around. how much was that? i don't know if i would like for the 220 until -- >> were you finished with corzine. >> they are still looking. >> it went to money heaven. i can't believe nobody figured it out. >> it would be a two part or three-part "american greed". don't you think? >> nobody knows. >> they are still on turn around on that. >> yeah. >> on turn around? >> yeah. >> you've done this. you've done the -- >> it's a turn around. >> you wrote the script. you've done this. >> we could -- >> this is a hollywood phrase of turn around. i was thinking of private equity. >> did you see how this tripped off his lips. >> you are aaron sorkin, according to some people. >> how did you manage that to have the same last. >> i'm as him. your related? >> no. >> great minds. >> we can only hope. let's talk about other news. a new survey finding some wall street executives see wrongdoing as a key to success. little weird. 24% say those of those polled believe financial services professionals may need to engaging unthickal or illegal conduct to be successful. they would commit insider trading if they could get away with it. i just wonder whether this is -- i don't know what to make of this. the whole thing -- >> i learned a world. >> what's that. >> called push pulling. >> if you ask the right question. >> it was with the "new york times" i'm sorry once again to bring it up. do you remember it was before the health care -- it said people think the supreme court are a bunch of politicians. it was a week before. >> he had made his decision. >> he had been hammered by the "times" and left and legal profession and president. hammered him which caused him to change his initial vote. >> they are going survey them and find out they are not political. >> my favorite thing about the "times," i saw this news elsewhere, but i was going to ask you for the siren or some kind of an alarm sound but romney again outdoes obama in fundraising. call to arms, call to arms. obama being outraised. if you've got any money please send to it the president. hurry, hurry, we're losing. whoa, whoa, whoa. what's going to happen, it may not work. "new york times" wake up. wake up obama fundraisers. wake up. isn't that what this is here? call to arms? >> yeah. >> is there an 800 number? >> right here in the second paragraph. right here. >> is there a weather story. >> that's lead story snic. >> i was on the website looking where to put my credit card number. >> did you know that the president does not want to extend the bush tax cuts for people making over $200,000 a year. that was one of the leads on the "nightly news". >> your saying that sarcastically. >> do we know that? he's made that point before, right? he has. will it work with this current congress? >> no. are you sure? >> i'm positive. >> are you being sarcastic. >> you know this. he said it again and again. this is a good time to bring up the tax issue again because it's unlikely the job situation is going change much. according to a lot of people. >> this is a calculated decision to raise this up again, to bring up tax fairness. >> even people that argue higher taxes cause people not to higher can he get hurt any worse? it doesn't matter at this point. >> got a quick question. did you put this article in the "wall street journal" on the other side? you could run the sirens or no? i agree with this article. political spending by unions far exceeds donations. >> if unions -- union wos not have a reason to exist if their leadership didn't have a reason -- >> you know my view is that unions should not be allowed to make campaign contributions whatsoever at all. i would take them out of the mix and that would the level playing field in a different way. >> i don't know. >> take the super p.a.c.s out. >> i just gave you my reasons earlier off camera. >> we can talk about it on camera. >> coming up we'll talk more about europe and connect the problems there with investments here at home. but first some sports news this morning. prince fielder winning the home run derby for a second time. detroit slugger joining griffith jr. the only player to win multiple titles. >> i'm calling that 800 number right now. >> you're up to the maximum contribution already? >> i'm calling friends. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. >> they are calling trading in choppy. alec young is s&p equity strategist. alec, are you up to speed on exactly what your people at s&p are looking for, for earnings for the s&p? >> sure, joe. the consensus is looking for s&p 500 earnings to be down 1% on a year-over-year basis. >> what would that be, the total. it would be over 100? >> that's the annual number. i was talking q2. >> on an annual basis. >> around $105. >> it is 100, 105. a lot of people now are thinking it might be a stretch. but every time we think it's a stretch usually when its all said and done usually the companies are able to do it somehow. do you think ate stretch? >> think it may be a stretch. not so much q2. the bar is lower. it will get exceeded. if you look at that $105 that bakes in earnings growth. the year's 6% growth gets bailed out by a fourth quarter rebound. given all the macro challenges at home and overseas a lot of investors are having a tough time figuring out how will we get to this 105 number if it requiresreacceleration ofarte i don't know it will be wildly off the mark but i wouldn't be surprised if we came in around 102 or 103. >> if companies are stretching, alec, in trying to reach a lot of their numbers, it doesn't seem like a great time to be adding employees either. seems like you try one last time to squeeze more productivity out of who you have already especially with this uncertainty. doesn't portend good for jobs. >> the stretch for earnings compounds that and we're not looking for anything but this kind of tepid nonfarm payroll growth for the rest of year. it doesn't kill the markets valuation. this isn't a multiple expansion that's allowed us to stay at whatever, you know, 1350 on the s&p. but, if you're looking for growth it's hard to pay up for anything and make it go up from here, isn't it, there's no growth to assign to the s&p? >> absolutely, joe. that's been our big thesis. lukewarm on the market. we're looking for 1400 by the end the year. 4% higher than where we are now because we think profits keep grinding higher even if they don't meet expectations currently. given the uncertainty with the fiscal cliff for next year where street sees earnings up 12%, again i think investors won't pay up and expand pes with all this uncertainty. i think investors felt confident that next year's earnings would hold up this market could easily go 1500. given the macro uncertainties i don't think people pay more than 13 times and that want gets to you 1400 in the second half. our favorite groups are discretionary less global risk, technology a lot of pent up demand and productivity driver and we're staying away from materials because of china. >> all in all sounds like a 1.5% gdp, 2% gdp viewpoint. nothing to really get us out of this malaise in the near future in the stock market or economy. >> i think we need to see in europe they are making progress. we need to see more. i think people want to see a real severing of the link between the sovereigns and banks. lend the spanish banks the money and don't have the spanish government on the hook for it. that would be helpful for it in europe and progress on the fiscal cliff in the u.s. if we can get those things we may be a bit cautious. >> more digging in. alec, thank you. i'm going to go over this europe situation is so important. that i'm going to go -- >> you're going to go over there? >> i'll check it out. write the whole batch off. write it off. i'm signing it now. irs, if you have a problem with that, you come and see me. you know where i live. call me. no, i'm not going the write any of it off. you don't joke with the irs. you don't joke with them. but i do think -- i'll look around and see how it's going. >> my grandfather was an irs auditor. >> really? member of the -- >> wow. that's actually -- >> coming up bp suspends a costly alaskan project. stay tuned. ed. the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. i'm making my money do more. ♪ i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. 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[ la! between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. becky is off today but join us live from sun valley on thursday. along with these three special guest, warren buffett, alan simpson and erskine bowles with a very special "squawk box". we're calling searching for solutions, avoiding the fiscal cliff. and making headlines this morning, bp is indefinitely suspended a $1.5 billion offshore oil project in alaska. company citing cost overruns and technical set backs. good. you're not sure about it, don't do it this time. brent crude falling to $99 a barrel. the drop comes after norway's government intervened in a labor strike and order ad last minute settlement to avoid a full closure. the strike began on june 24th. cut oil production from the world's number eighth exporter by 13%. >> the futures right now are indicating a higher open. here's the energy market. you can see that crude oil and brent are lower as joe talked about. okay. so the dow opened higher by nearly 67 points. s&p higher by seven, nasdaq higher by 12. ten year yield was 1.5%. the dollar was weaker across the board. now it's mixed. flat against the euro, a buck 23 is what the euro will cost and price of gold wasn't moving that much but higher and still is by $4.83, 1593 per ounce. cme and futures pick. kevin, how are you? >> good morning. >> alcoa going to do anything for us? >> okay. i think this important level 1353, 1355, i think any news that focus back towards the present growth situation, earnings situation, we actually like the market above this little level. so it's an important opening and the rest of the picture is quite quiet. for all that happened last night accelerating the bailout, currencies, the dollar only moderately lower and more importantly the treasury market after a big surge on monday after that employment, quite quiet again. we think this might be an interesting u.s. session as opposed to walking into a big gap which is what we're used to. >> back to alcoa. do you care about alcoa? we talk about whether it should still be in the dow at this point because of this kmarkt cap. is it a good enough indicator for the rest of the earning season or how are you trading the earning season? >> us future guys, there's a lot of news for others but not for us. but it certainly kicks it off. i don't think it's relevant, you know, to anything that we're going to do today, you know, from our perspective. but it does show that you're now entering into several steady weeks where headline information, both at the beginning of the session, at the end of the session is going to dictate your risk. and so, you know, it is something that causes bumps. you either like to take down that risk in a headline, especially in the afternoons, but as far as all coulda i think it kicks it off and says okay get ready the next two, three weeks will be bumpy. >> do you know that you didn't do the buttons on your collar? >> didn't do them. joe, trading all night this is rough. >> have you been trading all night? is that what we're supposed to think. is your employer watching? is there at that reason? >> employers? >> these are flying out like that. so you knew that? you made a conscious decision i'll go on national tv and not button my collar. >> it's a look. >> yeah. i was downing it an then they called five seconds i said forget it. was it that bad. >> no, it's fine. >> it can be an iconic thing. it can be his thing. >> there was a time when i, you know, to look hard you wouldn't do the top button and people said -- someone famous once said it doesn't look like you're working hard it looks like you started drinking early. doesn't look cool. >> looks like you had a couple. >> if you could ever achieve 5:00 shadow you would have that. >> i can get a 5:00 shadow going. don't do that. >> that's not a good look for you. >> messy. no, it's messy. >> you look like 5:00 shadow at noon. >> you look like rip torn. >> have you paid attention to the futures this guy that attempted suicide and any talk about that? you haven't heard about this case? >> yeah, i rather not. you know, that's a tragedy. >> kevin, for you, a spread in lichtenstein is more important. >> it's not my sandbox. i'm not saying it's not important. i'm sure it's important to someone. but it doesn't work for me. but do i think that it does, i guess the one nonfashion point i would make today is that we have been getting very used to coming in to the session with gaps both in the treasury market from overseas information. now we're coming in quiet. this is chance for the u.s. to take over the momentum in the trade instead of watching it. >> he said gaps. >> gaps. >> mind the gap. >> easy. >> he's not dressed. all right. >> i don't know what to tell you. have a great day. >> they've seen this before. you're back to normal. much better. >> do you want me to -- >> terrible. >> no. >> you should be sweating. >> i feel like i'm sweating. drinking a little bit. what time is it? >> 6:36. >> if you have questions about anything you sheer on "squawk" shoot us an earn mail. squawkbox @cnbc.com. ♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? 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[ male announcer ] the citi thankyou visa card. redeem the points you've earned to travel with no restrictions. rewarding you, every step of the way. welcome back. there are the u.s. equity futures right now indicated to open about 70 points higher. had a couple of sessions that weren't so friendly to the bulls the last couple of ones that we've been watching making headlines out of "washington today". the house will debate legislation to repeal president obama's health care reform law. meantime the senate is drawing battle lines for the debate over the president's proposal to extend the bush era tax cuts but only for those families making less than $250,000. good to know all these elected officials on the republican side are going to repeal health care with no chance of it passing in the senate and then in the senate they are going to do something about extending the bush tax cuts only for those making less than 250,000 and going absolutely nowhere in the house. they will do things between now and november that have no influence on anything but they will be there with industrious looks on their face. >> they will make it clear they stand for something. we would be far better off if our legislators met less. the minute you become a legislator you like to legislate. you think you must make laws, there should be less legislation in the world. >> it's not all about, i don't think, trying to be of service and trying to do good. i think it's about walking into the dry cleaning store in your district and having people go oh, congressman -- >> they love that. >> the salaries are nothing to write home about. the benefits i guess are pretty good. but these people with campaign contributions, and the idea -- worrying about how their vote will affect they are re-election prospects that's all they care about is going back and feeling that power and prestige. >> doesn't matter what party you belong to. >> right. >> what would they be doing otherwise? >> it's not for me, obviously. i don't know what they rather do. i mean they would have to go back to their humdrum lives, i guess. >> if they weren't trying to legislate during this period what would you have them do? >> they are not trying to leverage at legislate. >> what is the cure for the paralysis of your government? >> he's saying get something done. >> you don't want anything. >> i don't want anything. meet every other year that's a good start. >> you need a budget. >> every two years. israel has two year budgets. >> provide for the national defense. >> absolutely. but they don't spend their time doing that. they spend their time doing lots of other stuff that's not related to what they should be doing. >> these statements that they are making, i mean the repeal of obamacare, and then the, you know, the senate could pass the extension with no chance of it going anywhere. just an exercise -- >> both parties are making efforts to something that's unachievable. >> not going to happen. >> still to come on "squawk," hot, dry farm conditions and hotter commodity prices. plus mitt romney helped finance his small start up that turned into an office supply giant. that's right. staples co-founder tom sternberg talks politics, private equity and much more. a "squawk" special coming up later this week. searching for solutions, avoiding the fiscal cliff. the two men that proposed a solution, alan simpson and erskine bowles. simpson-bowles, those are the two guys. they will join warren buffett and becky quick this thursday morning from sun valley. say tuned. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. ♪ i want to go ♪ i want to win [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream. dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream we talked a lot last week about the god particle. this is a good explanation. it allows for consistency between theoretical explanation. have you ever seen what it looks like when a proton is slammed into another proton. one redeeming quality of this newspaper is the science times. and that is, you can't actually pick it out but that's what you see when you see a proton slam into another proton. i read last week about the cern. i forget how big it is. is it a -- it's different -- i think it has to be in a different to get it going so fast that it collides. anyway, if you haven't seen a proton-proton clicks that's what it looks like. it's beautiful. beautiful illustration. >> it is pretty. >> that's nature. >> did you go see fireworks at all? is the carbon footprint too big on those? >> too much? >> no, i didn't. i was in aspen last week in colorado because of the drought. >> they didn't do fireworks. >> they were worried things could catch on fire, so there were no fireworks. >> even in bloomberg city. >> over the hudson? >> i'm sure he will eventually find a reason to, you know -- >> prohibit them. >> not too big, less than 32-ounce fireworks, who knows. >> we were going to talk about corn, corn is having a high time because of the 16 ounce issues. >> that's true. your story? >> i have two quickies if you'd indulge me. >> how can you do union contributions as a quick one? >> duke energy today, jim rogers coup at duke energy, the regulators down in north carolina are going to be looking at this and there's actually a big meeting. >> good. >> it will be interesting to see what happens there. >> if i was a progress shareholder or a board member, i would not -- >> the question is if you were a regulator would you have a problem because it was sold one way and switched. >> i don't like people that welch on deals and that's a a total -- >> political spending by unions far exceed direct donations and here is the two points, i don't know if we can see it there. >> it is good that you are doing this because that is not the consensus thinking. people think the direct david koch is a much worse person. >> two things, "organized labor spends about four times as much on politics and lobbying as generally thought, finally shining an aspect on labor's activity often overlooked. the result is labor could be a stronger counterweight than superpacks that raise millions from wealthy donors in many cases to support republican candidates and causes." i will say there's a political slant to the piece, having said that, it's interesting if we really could take money out of this xhecompletely would that h or hurt? >> unions often have people on the payroll who oh on campaigns and hand stuff out, they campaign for a candidate. you're in a union and your dues are paying for a particular person to go work and do that. >> i've said it repeatedly, i have a huge problem particularly with public unions participating in the campaign system. >> did rupert put his name on the byline? >> i think they probably got a phone call about a day before. we should just check out rupert's twitter feed. i assume we could sketch this back. >> "please see the article --" >> yeah. what have you got? >> if you are a "squawk" anchor you may not live as long as the rest of the country. it says if you sat for less than three hours a day, would you live two years longer. >> right. >> you guys sit for three hours a day every day. >> it's going to, i thought this is the opposite of what i was told. i was told i had to move around. >> yes, you do, you should be sitting for less than three hours a day. >> sitting more. >> hyo i know the game, video g playing is probably bad is. >> and tv watching. >> along with high fructose corn syrup, a nice segue, trying to get into this. we have another segment to talk b the dry, hot conditions in the corn belt are parentally showing no signs of letting up. jason rose is an analyst for u.s. commodities. thanks for joining us this morning. appreciate it. >> good morning. >> so we've been talking about this. is this bloomberg's fault that corn is having a problem because the 16 ounce drinks are too small in how do you explain what is happening? >> this is clearly one of the most impressive commodity rallies in history. one thing that we have to watch in the commodities section that in the corn market, the u.s. produces 42% of the world corn market and the last five weeks in the grain belt we've been in a deep furnace with high scorching heat, and what this has done to the corn and bean markets is, it's dropped the yield substantially from our record crop that we were anticipating. >> we have china seeing a lot of strong demand, we have the s soybean market is part of the problem. how long do you think it will last? >> the weather markets are anywhere from two to three to four weeks and i think this year it's clearly all about the weather. what we saw in the china market is that china continues to have a huge appetite for our soybeans. china continues to buy 62% of our soybeans which is not letting up. china, they do raise their own corn and they continue to buy our soybeans. the market right now at these levels we've had, like i said, one of the biggest rallies we've ever seen in history. about 30% to 40% rally. we're very mature right now at these levels and weather markets usually stop, you know, bull markets have bull, get bull news every day and as soon as we stop getting bull news then the market usually goes down. >> jason, who is your weatherman? >> we usually watch the european market or european, you know, the weather systems. >> that answer is wrong. it's al roker. >> oh, okay. >> jason roose, thank you very much. david einhorn will talk to us about his big investments, and latest flphilanthropic mome. and tom stemberg as well, we'll talk business and politics and everything in between. yep. the longer you stay with us, the more you save. and when you switch from another company to us, we even reward you for the time you spent there. genius. yeah, genius. you guys must have your own loyalty program, right? well, we have something. show her, tom. huh? you should see november! oh, yeah? giving you more. now that's progressive. call or click today. 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[ la ] hey! off and running on business and taxes. >> this isn't about taxing job creators, this is about helping job creators. >> why tom stemberg disagrees with the president's latest tax plan. >> if you impute this higher tax and think this won't affect the cost of capital emerging business is totally naive. >> seeing the other side of economics. >> give people the ability to challenge conventional wisdom. >> and the brand new inductee to the squawk blue chip aboard. going all big on einhorn. >> wow, that was a big end. >> he's setting his sights on poker, business and education, it's another "squawk" exclusive interview you can't afford to miss. the second hour of "squawk box" starts right now. ♪ >> good morning and welcome to "squawk box" on cnbc on tuesday morning, i'm andrew ross sorkin with a long with joe kernen and michelle caruso-cabrera. eurozone finance ministers will give spain an extra year to achieve its deficit targets. spain will have until 2014 to achieve a bummet deficit of 3% of gdp, part of the deal to bail out spain's banks. china's trade surplus jumped to $. 1.7 billion in june, from $18.7 billion in may, the latest figures show the u.s. overtaking europe as the top export destination for chinese products. and finally, intel going to be spending more than $4 billion to buy up to 15% of asml, maker of equipment that prints circuits on to semiconductors. asml and its rivals have been seeking new investments as they develop the next generation of chipmaking equipment. quick look at the futures board, the dow looks like it would open up about 70 points higher, the nasdaq about 12 points and the s&p 500 up about 7 points higher. blackberry maker research in motion in face shareholders in waterloo, ontario. john fort joins us on set with a preview. waterloo? come on, you couldn't make this up. >> his name could be napoleon i guess. he's been the ceo for just six months but enough to lose the confidence of shareholders who will gather in waterloo for the company's annual meeting at 10:00 a.m. last quarter the company logged a half billion-dollar loss and chartered a crippling product delay. heinz inherited a mess. rimm's shares lost over 49% of their value, in favor of app driven touch screen devices supported by apple and google. heins said rim didn't need a better turnaround, but then he said it was in order. he seemed to straddle the defense weeks after he announced nearly a third of the workforce, followed up with an interview saying that rim might have been a troubled company a few weeks ago but "there's nothing wrong with the company as it exists now." the survival is dubious at best. i've seen death spirals before and if the tech death spiral were a gymnastics move, heins is executing it with olympic precision. >> i think the minute you have to say the company is not in a death spiral it's like when a bank says we don't have a run on the bank, there's probably a run on the bank. same thing. >> if he's watching i want him to know my blackberry broke over the weekend. >> i'm having trouble with mine, too. >> these things used to be the most reliable things in the world. i can't charge it anymore. i kid you not. >> my e-mails are ten minutes late. >> that's an nbc problem. >> it's a blackberry server. >> not the charger. >> i've tried different charger. >> e-mail is still far better own the blackberry than the iphone. you carry both? i carry both. >> i do. >> what do you think will happen? >> i expect he'll say rim is not in the death spiral and have lots of angry shareholders. >> they have bankers around the table, lots of things going on. >> there is this crowned jewel of canadian business. >> the canadians aren't going over to the iphone? >> a lot of their patents have to do with stuff like the keyboard which just aren't that valuable anymore. they have this network which has some security benefit but it's like who is that asset really valuable too. people used to talk about nokia as a buyer, not going to happen, microsoft is buying things like perceptive pixel, not like rim. it's really a tough road. >> explain the canadian part of the business that makes it supposedly more valuable. they're not using iphones up there? the population is this big compared to here. >> just a couple of years ago this was a pride point for canada that rim was based there. lot of times it's harder for companies like that to get hostily taken over. it's a treasure. or it has been. >> the world used to think about that with airlines, business after business after business that countries hold up as national treasures. in france, yogurt is a national treasure. >> that you can't go there, but you're going to argue with that? >> it's just a stupid, silly thing. >> greek yogurt is popular. >> you know it's dominated by the turks. the greeks only have 25% of the world's greek yogurt market. >> they can use all the help they can get. >> thank you, mr. fortt. tom stemberg, managing general partner at highland consumer fund and co-founder and former ceo of staples, and maybe most importantly one of the reasons he's here, an outspoken and important surrogate of the candidacy of governor romney but you know something about business, obviously, from staples and bain capital helped you start staples as well. >> they did. >> okay, good. we're going to talk to you not as much about staples but more about your advocacy for the governor, and let's start with this. i was trying to figure out how i can say this. you've heard the term "raining cats and dogs," right? >> um-hum. >> there is something that i've coined a term it's called a shihtzu storm, raining down from the sky. the romney campaign has been through that type of storm every since you know eric fernstrom went on and said it's not a tax, it's a penalty, and then the governor had to come back and say i disagree with that even though fernstrom was apparently thinking what the governor's opinion was, he came back and said it is a tax. this shed light on a bigger issue and you've heard from rupert murdoch, people like jack welch, that are republicans and probably want the president to lose. they're all saying they don't know if romney's staff has it in them, he should get rid of some of the people that are smart and nerdy and long time friends but they don't have the fighting instinct. how do you respond to that? >> i don't think it's true. we listened to this throughout the prime maeary season, many p at this table suggest he wouldn't win amongst the others. joe you were skeptic. >> i was very skeptical. >> harwood and i said he would have the domination wrapped up by march, that's categorically not true. not me. >> michelle said she was. >> i'd see it that way, too, the same conservatives grousing all aening lo. >> these guys did a great job working through the season and winning the nomination. mitt is playing his cards thoughtfully. i think he knows when he's going to take big, bold steps. i don't think it's premature to do it now. >> you think it's premature. >> you do? >> i do. >> people do not pay attention to the election until later. >> the bold step, what would it be, when would it happen? >> i'm not planning that. they are. anything specific you flow out there, 5,000 people get upset about it and there's no reason to do it. >> you've had back-to-back months of abysmal job numbers. he's at 8.and it's been above where he took office the entire time. >> it's worse than that, because the patient rate is down. >> you look at the average and i'm looking at real clear poll tingz, obama versus romney, obama 47%, this is rasmussen and gallup, 47 romney, 44.9, all this happening still down in the polls in trade, still has obama at around 56 last time i looked for re-election. that is troubling to some that with all this happening in his favor that there still seems to be a general -- >> again, i've developed some confidence in this team, they've slogged their way through a very difficult primary season. they won. i think they're going to win again in november. i think the facts that you point out will be very, very important. the american people understand that if the economy doesn't get going after four years of one person's leadership, you need to get somebody else at the wheel. and i think we'll elect mitt romney president for that reason, among others. >> i've heard some republicans saying it's not enough to say that obama's policies are wrong, that as you heard, even republicans are saying you're going to need to hear a plan from -- but here's the thing. if you were to run on, okay, repealing obama care is number one, reforming the tax code is number two, and reforming entitlements is number three, that's all you need. >> he said all three of those things. he said all three of those things time and time -- >> if you're looking for a government program or expect romney to come up with a government program to fix the economy he needs to say that's not the way it works. >> he needs to explain i'll let lower taxes and let the private sector create jobs. we're not going to run trillion-dollar deficits, we're going to balance the budget, we're going to repeal the obama care and the taxes that come with it. >> will this resonate with the american public? in other words if you don't give the american public like some change, hope type ideas, they may not want to hear go back to what republicans did, less regulation, lower taxes. they might not buy that. that may be why there's a bit of a, why he's stuck in the mud here. >> you're right, they may not buy it. i think mitt is a very convincing, persuasive salesperson when he puts his mind to it. >> is he rope-a-dope now? laying until -- >> i think mitt will lay out a vision for this country, it probably starts again, i'm not inside the campaign, they're not sharing their strategies with me, i suspect around the convention speech he will lay out his plan for america. >> should he be out more? should he be here today with you or not? >> i think -- >> i think he could have made a great case after friday to come on and talk about -- >> he gave a great speech in new hampshire what he thinks is going on with the economy. >> a romney circuit canceled who would have come on that day, you would think talking points to go crazy on that report that dame out. >> he's been very articulate saying this performance by the economy is not satisfactory, and that we have got to get our job growth going again. there are so many aspects to it. it's complicated. we have to reform our corporate tax rate and lower our tax rate, incentivize people to bring money back into the united states and change our method of taxation to be like the rest of the world. we have to reform the entitlements. >> who is your favorite veep? >> i don't have a favorite. mitt's comments are an intelligent one, typical mitt fashion they analyzed the last 120 years and figured out only one vice presidential choice ever made a positive difference, which is lyndon johnson with jack kennedy. other than that, there have been a lot, sarah palin the most recent who have hurt their candidates so -- >> rob portman is safe? >> first, do no harm, second most importantly, his most important criterion i want a vice president who can step in and be president the next day. and certainly rob portman fits that description no question. >> except for h.w. bush, no one has had more government business than rob portman. >> you think you need business experience as a veep? if you want somebody who steps into his role and has some of the same capabilities he has, whether you actually need someone who has been in business? >> i think president obama was wise to pick a washington insider who knew his way around and joe biden to help him. i suspect mitt will make a similar choice. >> that's whey imagined as well. >> good to have you here. >> i thought you were on our side. >> i'm attacking you from -- not really attacking you but trying to get you to -- you've heard it has been, has it not been a shihtzu storm the last two weeks? >> it has. the fact of the ma thor is i don't think rupert murdoch is going to decide who the next president is. he has his own pr and spin problems. he has a few of his own. >> in new jersey he didn't say a whole lot and ran against the other guy. christie wasn't clear about what he was going to do. if he ran against i'm not corzine and he won. still to come, a successful investor by day and high stakes power player at night, david einhorn, talking sfotocks, the economy and his efforts to save the nation's troubled students. and steven dubner of freakonomics fame. nice little shot of times square there on a tuesday morning. we are presenting another blue chip award and goes to freakonomics, the original by steven dubner and steven levitt. it inspired a high profile documentary film and freakonomics radio. steven dubner is a writer and former editor at "the new york times" magazine, other books "confessions of a hero worshipper" and "super freakonomics." how big is super versus the original? >> the original is bigger. the original has done about 4.5 million worldwide and "super freak" is up to well past a million but we have a little ways to go. >> more on the international? >> you know, it's hard. different books are different -- you know, some books, some business books that you barely hear of here explode in south america. so it's bizarre and local so ours does very well in some countries you wouldn't expect. >> now that everybody seems to care about economics in this country, if you could write it again or going to write the update you would do what differently? >> i'll be honest with you, i don't think we'd write about the markets that much because that's not what we do very much. we describe human behavior incentives, how people respond, how incentives fail and backfire. we write more and more about the financial markets and the political environment because it's too tempting to not. there's a million people writing in the mainstream of stock markets and politics. it's not what we do. we do a different kind of weirder lower hanging fruit, trying to figure out why politics is so bad, trying to figure out incentives, trying to figure out campaign spending. you guys, everyone is still convinced that campaign spend something massively important in electoral outcomes and if you look at the data it's just not. so the candidate who spends a lot more money often does win the election. >> the front page of the new york times says romney outdoes obama in fund-raising? >> it's a news story not because money will help you win the campaign because that's a fallacy. it say news story because the guy who ends up winning usually raises more money because he's a more attractive candidate. what this story is about is a lot of people think romney is a much more attractive candidate. if you look at the data, the average congressional candidate could double his or her spending and gain about 1% more of the vote and similarly could have your spending and only lose. so our thinking about how campaign spending matters is anti-diluvian at best. >> nice! >> it's sad to see people throwing money at guys that are going to lose. no one gives money to somebody if they think they're going to lose. >> exactly right and the myth is perpetuated by the fact let's be honest, if it weren't for political spending a lot of local tv stations would be crossing their fingers and praying for whatnot. >> my understanding is every voter in wisconsin was sitting at home, how do i feel about scott walker? please tell me. what should i do here and the money came in and they went, oh, he's not a bad guy. he is a good guy. i will vote -- the idea that they were swayed, how many were changed by the money? >> the most interesting is we really don't know because the people in the best position to answer that question have a strong incentive to not answer that question. they sell the political ads and the political handlers. it's very much in their interest -- >> to make you think it works. >> it's an industry like every other industry. >> we need as much political advertising as possible. >> i've never heard a candidate say i read this research in "freakonomics" and apparently campaign spending doesn't matter that much so don't send me your checks. i haven't heard anybody say that. >> is there any freaky thing about the jobs these days? >> i think the biggest fact that we should acknowledge, i know you're here representing romney to some degree, the degree to which the president of the united states affects the macro economy and the job market is again wildly exaggerated so this is harder to argue empirically. campaign spending i can show you the data. in terms of how much the president affects the economy is harder empirical argument because the market and our economy is complex. the fact is, however, if you talk to people in the white house, if you talk to economists, on and on, what you see is that candidates have to, during campaign season, talk about how much they will do, then they get to the white house and they're looking under the console for those magic buttons. where is the ad jobs button and where is the fix education button. the buttons don't exist, so it's this again fallacy that president candidates like to perpetuate that they have a lot of control. the fact is that washington doesn't control the economy, the president can do some things fiddling around the margin so it's a bum deal. >> when you say the consumer confidence does stem in part from leadership in the white house and if you have consumer confidence which you don't have right now, things are better? >> i do. one thing from economics and behavioral psychology and economics is that uncertainty is a killer of everything. it's a confidence killer, a jobs killer. human beings make very, very bad decisions under uncertainty. that's the difference between risk and uncertainty, guys who can measure risk we can put a number on it and operate in our best interests. uncertainty however throws us all into this primitive state where we make panic choices. >> you got another work come. >> we're working on probably "think like a freak" more tutorial. if you want a sexual chapter we'll work on it. >> we'll have you sign this book on the way out. we appreciate you being here. say hi to your co-author there. tomorrow we'll be handing other nou another squawk box award to paul krugman. i bought the car because of its efficiency. i bought the car because i could eliminate gas from my budget. i don't spend money on gasoline. it's been 4,000 miles since my last trip to the gas station. it's pretty great. i get a bunch of kids waving at me... giving me the thumbs up. it's always a gratifying experience. it makes me feel good about my car. i absolutely love my chevy volt. ♪ between black and white i absoluanswers...my chevy volt. ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. coming up the monthly nfib survey breaking first on "squawk," and then this is big, famed investor david einhorn, betting big at the poker table promising to donate his winnings to non-profits. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? 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[ male announcer ] this is our beach. ♪ this is our pool. ♪ our fireworks. ♪ and our slip and slide. you have your idea of summer fun, and we have ours. now during the summer event get an exceptionally engineered mercedes-benz for an exceptional price. but hurry, this offer ends july 31st. for an exceptional price. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. the the nfib is out with its latest small business optimism index. bill unkeberg is chief economist at nfib. good to he so you. >> good morning, how are you doing? >> it's called an optimism index, is there any optimism in here, any good in this? >> i guess we should call it a pessimism index today. the three-point decline is a large decline so the index now falls to 91 and change, which is if you want to find those readings in history you look at the last five years. that's where you find readings this poor. so there's really not a lot of optimism. what we saw was a major decline in expectations for sales and state of the economy six months out, so that went down and of course if you don't think things are going to be very good you see hiring plans fall, you see capital spending down, you see inventory investment fall to nothing, and that's not good. those are the gdp numbers so it just was a poor survey. >> we were showing people the index outlined in blue and you can see it's fallen dramatically in the last month or so, sore since the last number. this survey before or after the health care decision? >> well, basically it's all before. we mail 10 tnc,000 interviews oe first day of the month and health care came at the end. so the health care outcome is not really in the numbers. it will be in the july numbers and if the highway bill meant anything, that will be in the july numbers. >> what do you think you'll see in the july numbers as a result? >> other things could happen to increase optimism although i don't know what they are. i would guess since most of the population wanted obama care in some part or in whole to be taken down there's more disappointment than there is joy about the outcome, it will be a negative for optimism. >> do your survey members see the health care reform bill as a tax? >> we don't ask that question. that's a semantic issue. they're going to take money from you, you can call it a tax or a gift, it's a forced gift. fundamentally it's all in place. you can name it what you want. semantic games are going on here but it certainly is a tax, going to pull resources way from small businesses. remember these small businesses don't issue stock. they grow based on the profits they can generate in the firm. that employs half of the private sector workers and half of the private gdp at least when it's working. >> so we let people in on how this works. you survey small businesses on a lot of things as you mentioned, of about inventories, whether or not job openings are hard or easy to fill, what your inventory levels are, what you think credit or business conditions will be in six months. only one you surveyed them on improved. they expect easier credit conditions, and yet that's still negative. why do you think there's an improvement there and is it high enough to actually get things started again? >> well, i don't think it really matters too much again because if you look at one of the other questions we ask, which is whether or not all their credit needs were met you find that 31% said yeah all my needs are met. 7% said no, they weren't and the all-time logos back to 2000 with 4% so we're not very high but together 63% said who wants a loan? do i hire a worker that can't pay for him or himself when i have no customers, buy more equipment when i can't sell the output? there's no interest in the loan because there's no good thought for investment and getting the money to pay it back. >> do you think we're in a recession? >> i don't think we're in a recession. we have a number of things that still work in our favor, one of them is population growth, get millions of new people in the country every year, that helps us, a floor on growth, they buy things and drive things and live places. >> are the rest helpful do you think? >> i don't think so. to get a recession you have to have another big shock of some kind or another. well what's going to shock us these days if war breaks out in the middle east is anybody going to be shocked if a couple of european countries go down, who is going to be surprised about that. so there's nothing that really would shock us, but it would take a major increase in the savings rate i think really to push us back into true recession, where gdp actually declined so we're just going to crawl along. we're in maintenance mode, that's what our small business owners are. they fix things. when the roof leaks they fix that. they do what they have to do, but there's no expansion in the numbers. there's no reason to be optimistic, and so no spending to go with it. >> bill, thanks for coming on. we appreciate it. good to see you. >> thank you. coming up, david einhorn and next hour the tax battle in washington, paul ryan will weigh in on president obama's plan. >> they actually look alike a little bit. >> yeah, those two, to extend the bush tax cuts for those making less than $250,000. keep watching "squawk box" please. want to win ♪ [ breathes deeply ] ♪ this is where the dream begins ♪ ♪ i want to grow ♪ i want to try ♪ i can almost touch the sky [ male announcer ] even the planet has an olympic dream. dow is proud to support that dream by helping provide greener, more sustainable solutions from the olympic village to the stadium. solutionism. the new optimism.™ ♪ this dream a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ we're back on a tuesday morning playing poker with noted hedge fund manager david einhorn who took third place at the world series of poker's big one for one drop tournament, raking in an astounding, are you ready for this, $4.3 million. he was playing on behalf of citi year an education focused non-profit organization, they do some important work, we'll talk about that in a second. joining us on set in a special "squawk" exclusive is poker extraordinaire david einhorn and michael brown, co-founder and ceo of citi year, named one of america's best leaders. thank you for being here. poker world you won but you got bluffed at the very end there. can we talk about it? what happened? >> it wasn't at the very end. the very end i lost on a hand, the other guy had a little better hand than i did but there was a hand where i misplayed, i should have checked and called what he was doing and he outplayed me. >> have you ever won that much money? you put up a million bucks. >> no, i've never won that much money. this was probably the biggest poker prize tournament ever. >> and how often do you play poker? in the underground things in the city or what are you doing? >> all together including going to charity events, playing with my kids at thanksgiving and stuff like that, maybe ten times a year. >> so in these tapes of you playing you're wearing a red jacket which is the citi year icon amazing charity. we did something two or three years ago. >> a citi year breakfast. >> city year is like an urban peace corps, recruit young adults ages 17 to 24 giving a year of full time service serving the highest poverty schools in the country helping to address the high school dropout crisis. every year about a million students drop out of high school. that's the bad news. the economic effects are staggering, it costs the country over about $1.5 trillion over the next decade about the 10 million students that will drop out absent intervention. we know where the young people are. 12% of the high schools in the country produce 50% of the dropouts and we know what they need. city year corps members go into the schools from 7:00 in the morning until 6:00 at night and keep them back on track. we'll say yes to a lot more schools and students that need city year. i want to thank david publicly, an incredible achievement, 48 players and to come in third and most were professional poker players. >> what are you doing behind the sunglasses? >> do they read cards? you can't see through the cards with those. >> actually i had a hard time with the glare. there was a lot of tv and the lights were there. i couldn't see the cards so i got the sunglasses to cut down on the glare. you don't want to look around what was that card there. >> so you're very interested in education. do you have a position on school choice, charter schools? >> what is interesting about city year and i think the charter schools are great, there's high performing charter schools and you know how to education anybody. we've proven that which makes education a solvable problem but what's really good about city year is whereas the charter schools it's conflicted. it's the teachers unions on one side and new rules over here and new schools. i think in order to fix the public education problem, we have to fix the existing public schools, and what's exciting about city year is it's not offensive to teachers unions. it's not offensive to any of the existing constituencies that are sort of behind the failing public schools. it's just an added resource that comes in. >> what if they're failing because of the unions? i don't want to ruffle anyone's feathers but what if that's the root cause to fix the public education system you need to deal with -- >> schools that fail should be allowed to fail. >> that that is the problem, not that you're not going to offend them. >> it's able to improve the culture within the school. it's built to make the environment nicer for the kids, gives the kids a better opportunity to succeed within the school. >> i went to one of the breakfasts and i literally cried. it was unbelievable. it was extraordinary. while we have here we have to talk about markets and what's going on in the economy. you wrote a piece about two months ago i want to say and used this metaphor about the jelly doughnut, the fed as the jelly doughnut in terms of stimulus and what they're doing. where do you think we are now? >> jelly doughnut number 41. and there's a point where you have too many jelly doughnuts. >> we're going to qe5 at this point, you think this is doing nothing? >> i think it's actually counter onproductive, yeah. i think having the very, very low zero rates is depressing to people. i think it deprives savers of reasonable incomes and ability to forecast a reasonable income and it cuts down on consumption. i think all of the stimulus, it drives up food prices, it drives up oil prices and lowers standards of living and ability to spend on other things. >> if you had a conversation with ben bernanke? >> raise the interest rates to 2% or 3% level something like that. >> you have a number of stock picks going on right now going into earnings season. you expect this to be a good period? a bad period? what are you thinking? >> i'm hoping it's a good period for our lungs. i kind of walked into that. >> you have been a big bull on apple. >> yes. >> are you still there? >> absolutely. >> stock's come down a little pit. >> it's coming back up. >> on a relative basis. >> it fluctuates. we're not in apple for a quarter. we're two, three years into the apple investment and the way it seems headed it's likely we'll be there for a good while longer. >> you had a big short on green mountain, which worked out so far. >> i noticed i came into the studio you served last time green mountain in the back room. now it's flavia. >> i don't know what the story is. >> maybe you did that to impress me, it worked. >> that call happens and you see the stock move. are ayou amazed at your own power? >> it's weird. >> you open your mouth on a phone call and they don't know what the question is and if you're right but it's doomed. >> sometimes it's much ado about nothing honestly. >> what is, you? >> the kind of reactions. >> going back to apple for air second, where do you think it goes? you're in it for a couple of years. >> we've been in it for a couple of years. >> what is your target? >> i think the stock is substantially undervalued. >> it will be a trillion-dollar company. >> i would expect. >> first one. >> i think it's, you know, the best big growth company we have. it is the dominating brand in the area that it is and trades at a multiple below the average in the s&p 500. i think that's extraordinary. >> you called lehman, right? i don't know if the libor scandal means anything to you but do you have views on what this could do to the banking aboutis? i was going to throw morgue noon the mix in terms of how you're think being wall street. >> i don't va any opinion about the libor thing, it is what it is and it's nice whenever they clean up some of this stuff. >> more broadly you've written about wall street and wall street culture and some of the issues you think about too big to fail, you look at what's happening to jpmorgan, finding out more about the credit loss views from the oracle in. >> i don't know about oracle. >> were you surprised by the jpmorgan news when it broke? >> i didn't know anything about the subject. >> when you read about it you thought? >> it sounded like somebody took a very big position in something. >> david's a man with few words but the words that he says do -- >> sometimes he says nothing like just now. >> i've been instructed to ask whether you have a position in herbalife. >> i haven't said anything about herbalife. >> hold on, who instructed you to ask about herbal life? >> i got the ghost in my ear. >> i think it might have been god, i'm not sure. and you've heard that song, "i want to meet her someday." >> impressive that david is one of the people who fundamentally researches stocks, doesn't trade on momentum and picks individual stocks to win or lose. that's admirable in today's world, trade today, sell at the next minute world. >> i think it's really fun. >> you go deeply into the financials, deeply, deeply. >> or into the operations or wherever the, we need to go. >> great debate over amazon. you've been, have some thoughts on that? >> i don't think it was such a debate about amazon. i was pointing out that amazon is tough on its competitors because amazon doesn't seem to feel compelled to make a profit and it's hard to compete against somebody who doesn't feel a need to make a profit. >> is that a good investment long-term or bad investment long-term? >> it makes it tough for the competition. it doesn't say anything about amazon one way or the other. >> you don't own amazon but not short on amazon. >> no. >> so when you made that comment which was about a month ago? >> it was at the rish zone. >> he's doing a great job, horrible jo be? >> with amazon look at the dynamic it creates for its xet, to. >> the office and electronics guys how they suffered at amazon's hands. >> do some housekeeping on herbal life, did you ever have a position? >> yeah, we haven't said. >> you haven't said. >> yes. >> the stock got hammered almost immediately in seconds. >> we haven't said and i'm not going to say today. >> bringing it back to education, views on for-profit education companies, there's been a number of other hedge fund managers who have been short that world. >> we were a few years ago and it worked out nicely for us. we've left that. >> do you have a broader view on -- he really is a man of few words. >> i think these are, this is a very tough business model. i think that huge percentage as the money goes into marketing, a lot of it goes into profit margin. the quality of the education generally isn't very high and people are being charged $30,000 a year of loans saddling them for the rest of their lives, nonforgivable loans, the student loans and i think it's a lot of the kids who wind up in the programs turn out to be victims. >> the business was so reliant on government subsidy. when you look at a business and say if the government subsidy went away, would you survive, and the answer is no, then you clearly aren't providing a product that anybody would normally pay for except for having incredible health. >> the kids say the classes are 5,000, they'll give you a loan for 7,000 so it's $2,000 of spending money so the kids go out and spend and owe 7,000 to the government. it's a horrible thing. >> michael, you have views on this? >> my view is we need more human capital in education today. even a great teacher with 25, 30 kids that are off track is not going to be able to meet the needs of the students in high poverty schools. we're seeking to bring national service in its scale and call on america's youth, which are volunteering for city year and americorps at record numbers, over 1 million applications to americorps over the last two years alone so it's a high yield, low-cost way of meeting educational needs. >> there was an editorial in the paper this morning, i don't know which it was, maybe in the "new york times" about a national year of service after college. do you think that's something? >> i think it's something the country should consider. >> mandatory by the government? >> not mandatory. i think we should inspire young people to serve and the good news is, right now they're waving their hand and saying they want to serve. there's only 80,000 positions in americorps but over 582,000 applications last year. >> michael did you see that piece out yesterday or the day before, the number of students the increase over the past 40 years and the number of teachers increase and how it's a multiple of the student population and how the thrust of the piece was that teachers are stoetally overbilled and ineffective. was that a flawed piece? >> i have to drill down the data. in high poverty schools there isn't enough human capital. you can't ask a teacher to stay from 7:00 in the morning to 7:00 at night. you need a second set of caring adults with the kind of energy that young people bring in and they create a near peer relationship with students that can make the difference. >> david, i don't know bernanke will listen to you. >> i wouldn't expect him to. >> i wonder what we would do since it is going to be bad, how do we play that? >> i own a lot of gold. >> if you told us your herbal life position i'm sure bernanke would listen. >> we got to go. david thank you for being here, michael you do very important work at city year. we appreciate you here. later today the winner of this year's world series of poker. >> what is his name, antonio esfandiari, you're just going to skip it or blow him off? >> first of all we had david here and second i didn't want to mispronounce his name. coming up, stocks to watch ahead of the opening bell in the next half hour, stephen pagliuca. ♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection. coming up a showdown in washington over taxes. president obama outlining his plan yesterday, house budget committee chairman paul ryan will weigh in on the white house proposal but first a private equity power player, we'll talk jobs, the economy and politics with stephen pagliuca of bain capital, after the break. lend the pannish banks the money and don't have the spanish government on the hook for it. >> the american people understand that if the economy doesn't get going, after four years of one person's leadership, you need to get somebody else at the wheel. >> causal -- >> the front page of "the new york times" romney outdoes obama in fund-raising. this is not a news story? >> it's a news story not because money will help you win the campaign, because that's a fallacy, it is a news story because the guy who ends up winning usually raises more money because it's an attractive candidate. >> you had a conversation with ben bernanke, you tell him what right now? 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welcome back to "squawk box" here on cnbc, first in business worldwide. i think iron horn's glasses he has enough money to buy glasses that can see through cars. you can bluff so much better. >> right. >> the other thing i said was when you get over that $100 million mark for what you're worth it's easier to bluff in a $10 game. >> maybe even $100. hurt me, hurt me good. i say that to you sometimes. i'm joe kernen -- >> only at night. >> that's not true. >> this squawkward moment -- >> brought to you by michelle caruso-cabrera. >> there you go. >> becky, hurry! becky is off today but she will join us on thursday from sun valley -- we appreciate you, michelle, sun valley, idaho, with warren buffett and we'll attack the approaching fiscal cliff with simpson and bowles or bowles and simpson, whatever you prefer. guest host is sttom stemberg. surrogate for the romney campaign, up about 56 points on the dow jones industrials after a couple of sessions that weren't very kind to the bulls so we'll see how this plays out today. >> let's get you caught up on other headline this is morning. former barclays ceo bob dimon agreed to waive his long-term annual bonus according to the testimony of the barclays chairman in front of a committee this morning. he was expected to receives about $31 million instead it will be $2.3 million or $3.1 million. chipmakers are prominent among the stocks we're watching, asml holdings jumping on news intel will spend about $4 pll to acquire a stake that will grow as high as 15%. asml is a maker of machinery that prints circuits on semiconductors and advanced microdevices warning of weaker than expected second quarter sales and expects an 11% drop compared to prior guidance of 3% increa increase, amd blaming conditions in china and europe for part of its sales slowdown and micron technologies is planning to buy bankrupt alelpida memory. eurozone ministers aagreeing to give spain an extra year to reach its deficit reduction targets. madrid must cut its deficit by 2014 and setting the parameters for spain's ailing banks. european equities are higher across the board. the cac is higher and dax is higher by 81 points. u.s. private equity funds raised $86 billion in the first half of 2012, a 27% increase from 2011 and the best first half since 2008. joining us now bain capital managing director and boston celtics co-owner steve pagliuca along with guest host tom stemberg. good to see you. >> great to be here. >> are you really happy for lebron? can you express happiness? you're tactful about a lot of things. how happy were you it finally happened for him? >> i was not happy. that's a clear answer. i'll stick to that answer. >> maybe the last one, but all right. >> that seventh game was a heartbreaker. >> here's where i go from here. >> that's a warning. >> no more mr. nice guy. >> i should have worn my sunglasses today. >> i love when you come on because you are honest and you're at bain capital and you were hired by mitt romney and you have a history of being actively involved in politics. what i want to ask you and i'm not going to ask you who you're going to vote for. you think a lot of in are mr it romney and obviously different things result in how you vote. the attacks that you see on bain, i'm going to read from paul krugman, who will be on tomorrow, mr. romney the governor didn't get rich producing things people wanted to buy, he made his fortune in financial engineering in many cases left workers worse off and in some cases drove companies into bankruptcy. we're seeing this again and again and again and democrats, cory booker or steve ratner or others have said, used words like "i'm nauseated by this attack." all is fair in love and war? >> if you look at u.s. political history there's always hyperbole, always a fight. thomas jefferson in 1800 called adams a hermaphrodite, i don't know what that is but probably not a good thing. >> i think that's both. pseudohermaphrodite are medical conditions. >> he wrote articles in the paper written under a different name but that's political hyperbole. the real bain capital is a company that's built companies. we've increased sales of our companies in the last 30 years $80 billion. >> has it resulted in an overemphasis on outsourcing? has it shipped jobs overseas? >> absolutely not. i think what bain capital does is we go into companies, we try to find new products, so for example we bought physio control, it had negative $100 million in earnings, going to be shut down by the fda. we dame in, turned around it, technology for a small defibrillator and it became the leading small defibrillator. you should have one on the set for some of the people you talk to. >> i guess you would say that even some of the people that have said they're not comfortable with the attacks have said that certain parts of the business are fair game at least to talk about in an election year, would you say that? >> i would say in an election year you should talk about it. >> bain capital -- >> is it net positive for society? then it's not true, then at tacks are not true. >> no, they're not true. >> they're not true. >> we go out and talk about private equity, what it does is goes and invests capital. private equity has been a positive force to make our companies better. how did i get involved in bain capital? i was going to get a doctorate to be an economics professor. i couldn't afford it. my father went to school on the gi bill, an italian bill. i got a summer job at bain & company and i was amazed at the great things they were doing with businesses, making them more competitive, growing businesses, finding new products. that's how i good into this. >> you should still grill him on the dividends. >> when you hear the candidate you supported, what you do for a living, how does it feel? >> it doesn't feel good. >> when you go into that you're going to get the hyperbole so our investors know us, we have 1 million employees. >> you let it roll off your back, just politics. >> it's just politics. >> steve, one of the big issues, this is what you see in the papers when they talk about private equity and use bain as an example, they talk about dividend recaps and the idea of the special dividends, money coming out of these firms before money is made and then in some cases it creates a disconnect between the interests of alignments. in certain cases we've had situations where firms like bain have taken money out of the firms and had problems later. that is the crux of the argument probably against private equity. how do you think about that issue? >> i think it's a poor argument. companies on the public stock market pay dividends every day. these recaps are dividends and when you look at the track record overall we have less than a 5% bankruptcy rate of the country so 95% have not gone bankrupt, positive record so it's a technique that get money back to investors just like dividends or the public markets. >> it getsz to t to the whole if heads you win, tails you win. >> i think that argument does not disconnect it at all. we put enormous amounts of equity at risk, bain capital puts a lot of equity in themselves, the partner. they never want to lose equity for the investors and for the company. >> outsource and insourcing thing i think is ridiculous. there's a company called corporate software that bain invested in around the same time they invested in staples. corporate software sold a lot of software to companies in america and they expanded to sell largely american made software in europe, they have europeans selling it. this is creating american jobs, not hurting american jobs. the president is calling that outsourcing. >> maybe this question is to you, maybe it's to you. private equity, your goal, job creation or returns foreign investors. how should romney be articulating that message? >> i'll answer the job creation. private equity's goal is to build great companies and the misnomer is you really make money for your investors by growing companies. you had einhorn on here talking about apple. apple, why is apple so valuable. it's growing quickly, coming out with new products so private equity realized a long time ago, i've been doing this for 25 years that it's all about growth. >> steve, you have to actually disagree with the notion that the profit incentive is a productive part of an economy to say that a private equity company, by enriching sharehold shareholders, the only way you can make partners do well is if the company's eventually flourish, hire more employees and the employees pay taxes, you're able to get more government services. to try to draw a line somewhere and say here's where it goes off the rails, but it's just a lie. >> i've argued and we've said -- >> apple is a profitable company. >> you will see people, the president himself will say as commander in chief or as president i'm not here to maximize profrtits. they aren't mutually exclusive. >> i think romney should embrace all this and say you know what? i'm not going to argue i'm a job creator. i am a great fixer. i am a great grower, that's what i do. >> does it translate to being a good president though? >> that's created the debate. >> does it -- and tom would say that he's going to eventually say that. he's just at this point -- >> i think mitt is a great fixer. he inherited $2 billion deficit in massachusetts, turned it into a balanced budget at $2 billion rainy day fund. he has fixed that. he fixed the olympics which was a disaster. >> the job creator creates the whole debate and puts bain in its place? >> the debate about private equity, i think mitt wants to talk about what he wants to do to fix the country. >> you really have to sever that out political hyperbole from reality. we're proud about all of the companies we've grown. wesley jesson had a technology to do color contact lenses but were losing money so we expanded into clear lenses and tripled the size of the company. >> do you think the government, a lot of times i try to jibe someone's political beliefs with the things they said. do you think overall that the government or the u.s. can be run more effectively as a private equity type or as a redistribution mechanism to be a non-profit organization? i don't see how a lot of times how people can be democrats when they talk like you. >> lawyers would say that's a leading question. >> you understand what i'm saying? if you run the government not as a redistribution mechanism but as a profit-making enterprise? >> that's a very interesting question. i think i'll leave that for the political pundits. the government could be helpful for the economy to create jobs in the following ways, number one, we've really got to get the deficit under control, if you look at the crisis going around the world today, the european countries have huge deficits, driving down demand, hurting our ex-portsz, hurting global trade so we need a five to seven-year plan. simpson-bowles will be here to talk about that. >> go on. >> number two the folks from city year talking about education. the education system needs to be fixed. the real way for job creation is to get a more educated workforce. it's going to be sufficient for us to compete with other countries investing in engineering. >> school choice in. >> i'm not talking about school choice. i'm talking about programs that will fix this educational system from top to bottom. we're not creating enough engineers and graduating enough people out of high school. >> how do you arrive -- >> look at the things like research triangle park. public/private partnerships can help job grow. >> we have to wrap but wilbur ross said it has been harder to raise money from limited partners because of the debate. i'm curious what your experience has been. >> we raised a couple million dollars. our investors have been with us forever and they know our track record. the people on the street going out for the fourth of july separate the political hyperbole from what the facts are so we're really happy. >> thank you, steve. >> great to be here. >> you continue to do that and i appreciate it. >> maybe we'll take that thing back from miami next year. >> i have no idea what you were talking about there. coming up the wait is almost over, scott cohn will reveal number five and at 8:30, house budget committee chairman paul ryan will join us to weigh in on president obama's plan to extend the bush era tax cuts to families who make less than $250,000. it's very important to understand how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity. let's get the countdown started this morning beginning right now and running all day on cnbc, we are revealing america's top states for business in our six annual exclusive study. senior correspondent scott cohn is live at the top state which we'll not reveal just yet, we've been playing this week not all week but all day and he'll give us number five, scott? >> reporter: andrew, we've had a lot of inspired guesses on twitter and thank you all for all of that. some of you, well, are very imaginative, very sharp eyed. you may be right, you may be wrong. to find out watch all day. we rank all 50 states for competitiveness. we're counting down the top five. without further adieu, let the countdown begin. north dakota, the peace garden state joinseur top five for the first time riding an economic boom powered by oil. the home of the back in shale comes at number 15 jumping from 13 last year. north dakota's best category, its economy, the fastest growing in the country, second overall, just behind wyoming. but north dakota has some weak spots, finishing near the bottom for technology innovation, as well as access to capital. unemployment in north dakota is practically non-existent. the lowest in the nation at 3%. the top individual tax rate is 3.99%. the top corporate rate is 5.15%. the sales tax is 5%. north dakota's largest private employer is the altru health system, a community-owned health care company serving north dakota and northwest minnesota. while energy is coming on strong, the largest industry is agricultural. imagine 3% unemployment. it's basically full employment there, but in our study, that cuts both ways, it's good in the economy category but it means there are fewer available workers so north dakota is experiencing some growing pains. we've reported on that quite a bit over the last year or so. we're giving you hints as to which is the top state for business. one of the hints is that it's raining in the top state as you can tell you about a yesterday we gave you the first hint which was grape expectations so you know it was in the barrels behind me. the second hind, legendary lights, legendary lights. that could mean an awful lot of things and that's why we're diabolical with our hints. you can tell us what you think, the hash tag is #topstates. if you want to tell us what you think in more than 140 characters go to topstates.cnbc.com and coming up on "squawk on the street" we'll reveal state number four. >> is that cigarettes, tobacco? >> i think it's northern lights. >> oh, legendary lights. >> everybody makes wine now, there's great wine in ohio, that gives us nothing, cohn, right? >> reporter: there is not great wine in ohio. >> there is good wine just about everywhere. >> you just told us it's not ohio. >> reporter: not necessarily. >> it's a pun. it could be so many things. >> reporter: it could be. >> it's much easier -- >> reporter: i like be, it coule light beer. >> ten states i could give you, it's not illinois, it's not -- yeah, so it's raining there. of course that could be anywhere. all right. >> call roker and find out where it's raining today. >> you mentioned roker twice today. are you still sucking up to him because of one thing that happened on that show when you said something to him? twice today. i don't think i've ever mentioned al roker in my entire life? >> i'm an al roker fan. >> the third time! >> big endorsement. >> god i hope it gets back to him and hope it's worth it. president owe ba in outlining his plan to extend the bush era tax cuts. i haven't heard him take this stance before, for those making less than $250,000, we'll get the republican response from the house budget committee chairman paul ryan, and starbucks is pushing into tea with its cazo retail stores. it might find some stiff competition from david's tea, the canadian tea retailer started four years ago and is making a strong push into u.s. markets. we're going to talk to the co-founder. you knew that at 8:40? >> spotify. >> see, there you go. >> you know what spotify is? >> no. al roker likes it. 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[ male announcer ] the united mileageplus explorer card. get it and you're in. welcome back to "squawk box." amtrak will make it possible to go from new york to philadelphia in 37 minutes, part of a $150 billion improvement program funded by the taxpayer. right now the phattest trip between the two takes an hour and 15 minutes. you'll wait a long time for this train. amtrak says the superfast trains will not be in service for another 28 years or so. its plan will also need substantial financial support from the state and federal governments, that's you and me. andrew? coming up, we've got a showdown in washington over those bush era tax cuts. the president presenting his plan yesterday. up next, we'll hear from house budget chairman paul ryan on what he thinks of the plan. between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. between listening to the numbers...days, ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. good morning and welcome back to "squawk box." among the stories we're following, $220 million in customer funds is thissing in an iowa brokerage. regulatory group says it can't account for the money as paragrin financial group and ordered the company's accounts frozen. meantime, this is a serious story pfg telling clients founder and chairman russell wasendorf attempted suicide yesterday. the national futures association has information it may have falsified bank records. cnbc's rick santelli is in chicago and has more on the story this morning. >> reporter: andrew, these stories are never good. i'm not sure this story is any different than the madoff story in certain except for a much diminished size. there may be some fraud, there may be some regulatory capture. when you look at russell wasendorf sr., he loomed large in the industry, had a very good reputation, was one of the pioneers in electronic processing to put orders into exchanges electronically versus open outcry. the group was incorporated in 1990 and they were in chicago headquartered until i think about three years ago when they moved to cedar falls. now we don't know how mr. wasendorf sr. tried to commit suicide, i think a car is involved so who knows but there were comments by a hospital in iowa that he was admitted. the amounts are hard to quantify but you pretty much nailed it. suppose he had $380 million to $400 million in seg funds, makes him about the 37th, 38th largest futures group so it's not humongous but size doesn't matter. looks like bad things happen with statements maybe going back to 2009, so when you look at it in a chronological fashion, my guess is it's another one of these offshoots where the crisis caused a scramble in a scheme where money just is missing and yes, seems to be 5 million accounted for but the 225 to 400 needs to be there. a magazine online created by his publishing group -- >> can i have my microphone, please? rick we're not clear, you highlighted the question at the beginning we don't know whether it was a madoff situation, never true or something has gone wrong recently and led to this possible situation here, right? at this point we don't know what's going on over there. >> listen, it used to be in chicago and people talk. at least in my opinion it looks like much of this seems to be pointing towards a little bit after the '08 crisis. if it goes on before that i'm sure we'll learn. another issue the nfa pretty much shut them down to liquidation only. the nfa was their dsro, which is their designated self-regulatory organization. every one of these futures firms has an entity that goes in to monitor the books so they did call it out, they'll answer questions to something that may not have been found earlier. >> thank you, rickster. >> thank you. >> president obama outlining his plan to extend the bush era tax cuts for those earning less than $250,000 a year. >> so i'm not proposing anything radical here. i just believe anybody making over $250,000 a year should go back to the income tax rates we were paying under bill clinton, back when our economy created nearly 23 million new jobs, the biggest budget surplus in history, and plenty of millionaires to boot. >> we are now joined by congressman paul ryan, where is he? there he is. you're chairman of the house budget committee. i had something else i was supposed to say but don't want to because i want to get to this. maybe speechwriters and new speeches cost money and therefore the president took the speech that he's given at least six or seven times about the bush era tax cuts over the last two years and he ran it again, because i've heard all of this, congressman, and i know that you in the house are not going to do this this way. it's so obvious to me, jobless, i wouldn't want to talk about jobs either obviously but here we are, we're going to go again into this tax, 200 or 250 and above. chuck schumer will say people in my state aren't rich at 200 but get slapped and say i back the president and doing the same thing over and over again. >> that's the point i was just going to make, joe. first of all this is the same movie we've seen before. >> saving money on speeches. >> saving money on speeches. he's distracting the country. don't forget that these tax increases he's proposing are for more spending, not even for debt reduction. all of the tax increases don't pay for a fifth of his proposed deficit spending. never mind the fact 80% of businesses in america file as individuals, nevermind this is a big tax increase in successful small businesses and job creators. we should take money from them and spend it through government and that's a better idea. >> congressman people at home and i don't know how to look at the 3% that the president's talking about that are affected by -- i hear so many different facts and figures about who is subchapter s, who actually has business income, who would actually be affected by it. i saw on nbc news last night, in the report they said the president knew he'd be hearing about small businesses creating and we an answer for that. they sort of did his work for him. >> if you reduce it down to the millions of people who file it looks like a very small statistic but if you look at all the businesses that create jobs who file their taxes as individuals, it's hugely impa impactf impactful. >> it's a big number. >> the most successful of the companies that create -- >> exactly. >> the thing that gets me more irritated than anything, your party, you were going to spend the next couple of days voting to repeal row ba ma care. >> that's right. >> knowing the senate is not going to do it. we don't care what you're doing this. he's doing this -- >> is this andrew? okay. i kind of sensed it was -- >> he's doing this, knows that's not going to get passed by the house. you're doing the other thing, know it's not going to get passed by the senate and wondering why he pay you guys. >> we announced last month that this month we're going to pass a one-year extension of the entire tax code and then have a fast track procedure for 2013 or fundamental tax reform. >> the fiscal cliff. >> we'll deal with the fiscal cliff and get to tax reform, broaden the base and lower the rates and guess what, joe, andrew, there are a lot of democrats who agree with us, just not the one in the white house so we'll have democrats voting with us here in the house and if they ever have the vote in the senate on extending all of the tax cuts for a year so we get the tax reform. >> why obama care? >> we'll get democrats on obama care as well. we believe we need to show the country that we don't think, that the last arbiter of this is not the supreme court, it's the american people through their elected representatives, and so if you give us more elected representatives to fix this problem, we will fix this problem in 2013, meaning a senate, a house and a president and we'll replace obama care which we think is a job killer, it will increase health care costs, blow a hole in the deficit. we think we can replace it with consumer directed patient-centered health care at the root cause of inflation which helps us with job creation, helps us with quality health insurance for everybody and helps with us our debt problem. what we're saying is the final arbiter is not the president, it's not the supreme court, it's the people through their representatives and that's why we're having this vote this week. >> you think having a symbolic vote matters? >> michelle, i do believe it matters, because we're telling our constituents here is what we do if you give us the ability to do it, we'll do it in the house and the senate and we'd like help in the election and the president, just like the tax cuts. we're going to extend the fiscal cliff for a year so we can get tax reform next year. unfortunately we don't see the senate following suit. we know if that bill hit the floor of the senate it would probably pass and so we're trying to put pressure on fixing the fiscal cliff the right way and unfortunately the president has chosen more of this envy and division, more of this class warfare, the politics of division and distraction because there is a terrible economic record. you saw the latest jobs reports. poverty rates at an all-time high, a record he can't run on, distracting the country in order to try to win this election and we want to call him out on it and say there's a better way forward. we have better ideas on health care, better ideas on taxes, on tax reduction and growing the economy. >> if he had made it a million bucks, would you agree to it? >> andrew if you go to wisconsin, industrial parks at the outskirts of every one of our towns, nine out of ten businesses which make over $1 million, have 50 to 150 employees, they're the rich people, the ones who pay those taxes. 90% of our businesses file as individuals and you know overseas which in wisconsin means lake superior the canadians lowered their tax rate on businesses to 15%. the president wants it as high as 45% next year. it's a job killer. it kills growth, kills small businesses, entrepreneurial growth. save more money and stop subsidizing wealthy people. why do we need entitlement programs? >> did you go to the retreat? were you vetted for vp? >> i went to the utah thing if that's what you're talking about. >> were you vetted? >> by 800 people who vetted me in talking about our economic policy i guess. >> i wonder whether romney, whether you've spoke on it his person, beth, whatever her name is. are you, do you know? you're only a 4% on intrade to be the veep and portman is over 0 30%. >> he's a great guy. it is not in the rohment know campaign's interest for me to comment on that. it's not going to do them any favors. don't underestimate the importance of the role of congress. i have an important role to play in the house t makes a big difference. >> i don't know about that. >> and i'm a big fan of rob portman. he'd be a great pick. >> you said you'd change your hair style because your wife wanted you to do that. >> she's very smart, went to wellesley. >> with michelle. they knew each other. >> exactly. thank you for coming on. i appreciate it, congressman. >> you're welcome. >> hope to see you in here again sometime soon. coming up a retail chain with steep prospects for growth, co-founder of david's tea will join us in a few minutes. "squawk box" on thursday becky will be back and join us live from sun valley, idaho, with warren buffett and they'll tackle the looming fiscal cliff with alan simpson and erskine bowles, the bowles-simpson solution everybody talks about, on "squawk" on thursday. stay tuned, we have a lot more today. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-866-393-6174. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪ welcome back to "squawk." david's tea is a fast growing tea retail chain that started in canada and now expanding to the u.s. the chain grew from one little store to 76 stores in just under four years. can the tea stores rival their coffee competitors? joining us now is david's tea co-founder, david siegel. thanks and tom stemberg i should say is staying with us and sits on the board of david's tea's, one of his big investments. david, do you compete with starbucks? how do you think about this? >> well, i mean starbucks does premium coffee. we do premium tea, so we have over 150 different flavors from all over the world that you can have either hot or iced, and our staff is very passionate about helping you explore the world of tea, and it's very different than coffee. coffee you need it in the morning. it helps you get going, whereas tea is much more versatile. it can be energizing, it can be calming, it can help you digest after a big meal. it can help you relax before you go to bed. >> right. how much do you have to educate the public about the world of tea on a relative basis to coffee? because coffee people think of as a cultural thing. >> everybody in america drinks coffee, few people in america drink tea. >> tea is the new coffee. you go to the grocery store and you have five different varieties of earl grey and english breakfast and chamomile. people don't realize how many different tastes in tea. we have matte from south america and roy boss from south africa. there is a whole world of taste. >> what is your feel on this, a starbucks or half a starbucks? >> more consumption off premises, leaf tea mostly off premise and romance people into the wonderful tastes of tea. my wife went in there, by and large you take it home, make it when you go to the office and the tea market unlike the coffee market is growing in high single digit rates per year globally and in america it is trailing many other countries for consumption but for healthens are. >> what did they convince your wife, starbucks got us up to $12, $15 a pound. go ahead. >> the time we got through buying paraphernalia to make it with and the travel cups so we spent about $50 or $06 in the sto $60 in the store. >> tea has been around for thousands of years and there aren't that many new flavors. celestial seasonings did this, marketed the bolder panache to it. it's marketing, isn't that? do you have anything different than before in terms of tea? >> yeah, it's product and it's service. we have grape lens, and read my lips, these little candied chocolate lips with mint. >> sounds like marketing. >> luscious water we willon. >> sounds like marketing. >> the teas you get peach and lemon in stores, with us, watermelon, gogi, and there's exotic tastes and you get to engage your senses. >> those of us on morning tv, which has the most caffeine and does it rival coffee? that's all i really care about, to be completely -- >> no, it's different than coffee. green teas, black teas, there's matte and guiusa. coffee gives you the jitters. tea will give you a different kind of boost in the morning. >> you don't serve any coffee at your place, because i was going to say -- >> no. >> i was curious if you'd ever considering selling coffee at a tea store. >> we are the tea experts. we have over 150 different varieties and gifts and accessories that make steeping the tea easy so that's our specialty. >> tom you invested how much and how much do you think you'll get out of it? >> i think it will be an exciting investment. you seldom see a return on investment level, starbucks would give similar returns and the explosive growth and what we've helped add to the team will be able to achieve i think this could be a billion-dollar company. >> is this a company you expect would go public that you'd sell? david, what is the exit? or to tom? >> go ahead, david. >> we're focused on service and product. we have great partners and we just want to build a great company. >> i think we'll go public. it's a pretty sexy space. >> david, thanks so much. we'll drink a little bit of tea this morning. >> thank you very much. coming up we'll head to the new york stock exchange for the latest buzz on wall street. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. welcome back to "squawk box." down to the new york stock exchange. jim and david are joining us. watching the euro roll over. kind of impact on the markets when you watch the open? >> it's very interesting to' when you had the spanish deal announced between 4:00 and 5:00, you saw the futures jump rather dramatically. europe jumped. this time there was an accelerated program. all these things are way too small. it really doesn't matter. $130 billion. >> you know, china also is interesting to me this morning. i don't know if you guys is have been watching it. of course, that trade surplus number. largely a result of imports coming down which may be a reflection, of course, of the consumer pulling back and china, let's not forget about that. >> a lot of consumers there. by the way, it's so programmed that people sell yum. china slows down, they're going to eat less kentucky fried chicken. let's sell yum. a patented trade the shorts have been doing, hedge funds. makes a lot of sense. >> speaking of china we just did a big tea segment. you into tea? >> yeah. look, i am -- i am not a -- i am a guy that says slower growth in china is directly related to europe. michelle, you've been to europe numerous times. you know that china is the place that they import from. >> we're seeing it here, too. we'll talk amd, of course, top of our show. >> amd, you better not go mako. >> what do you make of the case of the guy who attempted suicide in the last 24 hours. are we looking at another one of these situations that could destabilize confidence? >> i thought rick santelli said it all. it could be a junior madoff. look, the lack of confidence. if they could rig libor, they can -- it's kind of like it doesn't -- i'm yawning. >> good to see you. see you in just a few minutes. coming up, we're going to get some parting shots from our guest host, tom stenberg. "squawk" back in two minutes. he's a nobel prize winning economist and columnist for the new york times. paul krugman, a "squawk box" blue chip book award. don't miss "squawk box" starting tomorrow 6:00 a.m. eastern. rn.st that powers sound decisions. duff & phelps financial advisory and investment banking services. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. 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[ all ] i'm with scottrade. it's no wonder so many investors are saying... between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. stock of the day. mako surgical. shares of the medical device maker dropping by nearly 40%. company cutting full year guidance for sales of rio robotic arm saying it's seen slower than expected growth in the first half of 2012. guest host this morning has been tom stenberg. we haven't really talked about all the -- you know, the variety of businesses that you probably have a feel for with what you're doing and your connections, obviously, still at bain. it's a 1.5%, 2% economy globally? >> i think we're going to bumble along here. obviously a little economic growth would be great for our portfolio companies. i'd love to see it. i fear with uncertainties around obamacare, the new taxes that are coming and the fiscal cliff and this current leadership, we're not going to get the kind of growth we'd all love to see. which is why i'm working as hard as i am to elect mitt romney as president. >> this was a, people argue, i've heard the worst recession since the great depression. we'll hear more of that as we go forward. it was a credit contraction which is different than the '80, '82 where inflation got too high. is it really something we have no control over? >> i think these problems are fixable. i think simpson-bowles had a broad approach. the deficit and the uncertainty it creates for investors in america. a government that's spending like it's out of control. starting to spend like france, on its way to greece. we've got to reverse the trend and get fiscal responsibility back in washington, d.c. >> you think you're not going to lose your house, you think you're not going to lose your job, then you feel better about making long-term plans. >> it's confidence. >> the latest numbers on right track, wrong track. i mentioned earlier. 33/63. 30 point difference. track. >> 33% of the people think we're >> yeah. >> very tough numbers at this point. i think it sets up for what is on the right track. 63% think we're on the wrong going to be an
business. in the obama economy, the federal reserve announced a downgrade for their economic outlook for growth and employment. we cannot wait. this is not about the personality or politics. it is about his policies. they do not worse. house republicans have a plan for job creators. unfortunately, all of these bills continue to stack up like cordwood in the democratic- controlled senate. a lot of our bills have to do with easing the regulatory burden on small business. it is not just me saying it. we hear from our constituents. i heard from don last week. talking about the health care plan he said, "we are giving up this part of our business due to federal regulations. this is one example of how obsessive regulation is stifling business. only one person will lose his job -- that is a large layoffs and a small company. the bottom line, the federal government is regulating small business out of business. mr. president, senator reid, we cannot wait. work with us together on our plan for america's job creators. >> we continue to hear about the 14 million americans out of work. if you started the line in washington, it would stick -- extend all the way to maine. 9 million americans would like to have a full-time job or have dropped out of the workplace. while the president is out campaigning, the house has been busy working on our forgotten 15 and other bills that would help the economy going. one of our priorities has been to reduce the regulatory burden on our businesses. we have the highest corporate tax rate in the world. the average small business owner will spend double that amount in complying with regulations. this report today underscores that we can and must do better. >> a couple of questions. >> i have a conference to run. >> yesterday john boehner said he was nervous. should you be nervous? >> you can asking that question. i have just left a meeting with senator murray and we continue to negotiate. when we have something, you will hear something soon. i have not changed my position from day one. i have high hopes and tempered expectations. >> you talk about the need to find common ground. the debate led to a decline of consumer confidence. given the schedule for the rest of the year, you think that the failures will cost additional problems for consumer confidence? >> i think we have to continue to try to find common ground that will help our economy and get the people back to work. when you look at our plan, the 20 bills we of passed it will help job creation, almost all of those passed with bipartisan support. many of them backed by the obama administration. it is time to find common ground to do with the american people expect. youou are saying, why don't pass the bill? there is another bill that they want things. this looks like a shoving match between the sides. why not say, [unintelligible] >> the house has acted in a bipartisan session 20 times. all we are asking for is some cooperation with the other side of the capital. >> they have problems -- >> if you look at the vote yesterday, over four hundred votes for these bills that will help small businesses have access to capital. our founders gave us this giant body in the middle of our government called the congress. 535 people. it is hard for a ready to get along. on the house side, we have worked together to try to do the right thing. we will continue to do that. >> president obama talked about the crisis and the u.s. economy at a news conference in the store -- g-20 summit. the president have been meeting on a plan for the eurozone. he also discussed and employment figures and discussed his jobs bill. this is about 25 minutes. >> good afternoon, everybody. i want to begin by thanking my friend, president sarkozy, for his leadership and his hospitality. and i want to thank the people of cannes for this extraordinary setting. over the past two years, those of us in the g20 have worked together to rescue the global economy, to avert another depression, and to put us on the path to recovery. but we came to cannes with no illusions. the recovery has been fragile. and since our last meeting in seoul we've experienced a number of new shocks -- disruptions in oil supplies, the tragic tsunami in japan, and the financial crisis in europe. as a result, advanced economies, including the united states are growing and creating jobs, but not nearly fast enough. emerging economies have started to slow. global demand is weakening. around the world, hundreds of millions of people are unemployed, or underemployed. put simply, the world faces challenges that put our economic recovery at risk. so the central question coming into cannes was this, could the world's largest economies confront this challenge squarely -- understanding that these problems will not be solved overnight, could we make progress? after two days of very substantive discussions i can say that we've come together and made important progress to put our economic recoveries on a firmer footing. with respect to europe, we came to cannes to discuss with our european friends how they will move forward and build upon the plan they agreed to last week to resolve this crisis. events in greece over the past 24 hours have underscored the importance of implementing the plan, fully and as quickly as possible. having heard from our european partners over the past two days, i am confidence that europe has the capacity to meet this challenge. i know it isn't easy, but what is absolutely critical, and what the world looks for in moments such as this, is action. that's how we confronted our financial crisis in the united states -- having our banks submit to stress tests that were rigorous, increasing capital buffers, and passing the strongest financial reforms since the great depression. none of that was easy, and it certainly wasn't always popular. but we did what was necessary to address the crisis, put ourselves on a stronger footing, and help rescue the global economy. and that's the challenge that europe now faces. make no mistake, there's more hard work ahead and more difficult choices to make. but our european partners have laid a foundation on which to build, and it has all the elements needed for success -- a credible firewall to prevent the crisis from spreading, strengthening european banks, charting a sustainable path for greece, and confronting the structural issues that are at the heart of the current crisis. and here in cannes we've moved the ball forward. europe remains on track to implement a sustainable path for greece. italy has agreed to a monitoring program with the imf -- in fact, invited it. tools have been identified that will better enable the world to support european action. and european finance ministers will carry this work forward next week. all of us have an enormous interest in europe's success, and all of us will be affected if europe is not growing -- and that certainly includes the united states, which counts europe as our largest trading partner. if europe isn't growing, it's harder for us to do what we need to do for the american people -- creating jobs, lifting up the middle class, and putting our fiscal house in order. and that's why i've made it clear that the united states will continue to do our part to support our european partners as they work to resolve this crisis. more broadly, we agreed to stay focused on jobs and growth with an action plan in which each nation does its part. in the united states, we recognize, as the world's largest economy, the most important thing we can do for global growth is to get our own economy growing faster. back home, we're fighting for the american jobs act, which will put people back to work, even as we meet our responsibilities to reduce our deficit in the coming years. we also made progress here in cannes on our rebalancing agenda. in an important step forward, countries with large surpluses and export-oriented countries agreed to take additional steps to support growth and boost demand in their own countries. in addition, we welcome china's determination to increase the flexibility of the rmb. this is something we've been calling for for some time, and it will be a critical step in boosting growth. finally, we also made progress across a range of challenges to our shared prosperity. following our reforms in the united states, the g20 adopted an unprecedented set of high- level financial reforms to prevent a crisis in the future. we agreed to keep phasing out fossil fuel subsidies -- perhaps the single-most important step we can take in the near term to fight climate change and create clean-energy economies. and even as our countries work to save lives from the drought and terrible famine in the horn of africa, we agreed on the need to mobilize new resources to support the development that lifts nations out of poverty. so, again, i want to thank president sarkozy and our french hosts for a productive summit. i want to thank my fellow leaders for their partnership and for the progress we've made to create the jobs and prosperity that our people deserve. so with that, let me take a few questions. i'll start with jim kuhnhenn of ap. >> new jobless numbers today back in the states. you're on a pace to face the voters with the highest unemployment rate of any postwar president. and doesn't that make you significantly vulnerable to a republican who might run on a message of change? and if i may add, given that you have just witnessed the difficulties of averting economic problems beyond your control, what state do you think the economy will be in when you face reelection next year? >> jim, i have to tell you the least of my concerns at the moment is the politics of a year from now. i'm worried about putting people back to work right now, because those folks are hurting and the u.s. economy is underperforming. and so everything that we're doing here in the -- here at the g20 mirrors our efforts back home -- that is, how do we boost growth, how do we shrink our deficits in a way that doesn't slow the recovery right now, how do we make sure that our workers are getting the skills and the training they need to compete in a global economy. and not only does the american jobs act answer some of the needs for jobs now, but it will also lay the foundation for future growth through investments in infrastructure, for example. so my hope is, is that the folks back home, including those in the united states senate and the house of representatives, when they look at today's job numbers -- which were positive but indicate once again that the economy is growing way too slow -- that they think twice before they vote "no" again on the only proposal out there right now that independent economists say would actually make a dent in unemployment right now. there's no excuse for inaction. that's true globally, it's certainly true back home as well. and i'm going to keep on pushing it regardless of what the politics are. chuck todd. >> thank you, mr. president. clearly, there was some sort of dispute between you and the european leaders about how to fund this bailout. and you, in your remarks, emphasized the fact that tarp was done with u.s. funds, that there wasn't any international involvement here. are you confident now that the european leaders are going to own this firewall or bailout fund themselves, not looking for handouts from other countries, and that they will do what they have to do? and the second part of my question is, how hard was it to convince these folks to do stimulus measures when your own stimulus measure -- you've mentioned it twice now -- is not going anywhere right now on capitol hill? >> well, first of all, we didn't have a long conversation about stimulus measures, so that was maybe two or three g20s ago. we had a discussion about what steps could be taken to continue to spur economic growth. and that may not always involve government spending. for example, the rebalancing agenda that i talked about is one way in which we can make a big difference in spurring on global demand. it requires some adjustments, some changes in behavior on the part of countries. but it doesn't necessarily involve classic fiscal stimulus. it wasn't a dispute with the europeans. i think the europeans agree with us that it is important to send a clear signal that the european project is alive and well, and that they are committed to the euro, and that they are committed to resolving this crisis. and i think if you talk to european leaders, they are the first ones to say that that begins with european leaders arriving at a common course of action. so essentially, what we've seen is all the elements for dealing with the crisis put in place, and we think those are the right elements. the first is having a solution to the specific problem of greece. and although the actions of papandreou and the referendum issue over the last couple of days i think got a lot of people nervous, the truth is, is that the general approach -- which involved a voluntary reduction on the part of those who hold the greeks' debt, reducing the obligations of the greek government -- greece continuing with reforms and structural change, that's the right recipe. it just has to be carried out. and i was encouraged by the fact that despite all the turmoil in greece, even the opposition leader in greece indicated that it's important to move forward on the proposal. the second component is recapitalization of europe's banks. and they have identified that need and they are resourcing that need. and that i think is going to be critical to further instill confidence in the markets. and the third part of it is creating this firewall, essentially sending a signal to the markets that europe is going to stand behind the euro. and all the details, the structure, how it operates, are still being worked out among the european leaders. what we were able to do was to give them some ideas, some options in terms of how they would put that together. and what we've said is -- and i'm speaking now for the whole of the g20 -- what we've said is the international community is going to stand ready to assist and make sure that the overall global economy is cushioned by the gyrations in the market and the shocks that arise as europe is working these issues through. and so they're going to have a strong partner in us. but european leaders understand that ultimately what the markets are looking for is a strong signal from europe that they're standing behind the euro. >> so you're discouraging them from looking for money -- outside money? >> no, what we were saying is that -- and this is reflected in the communique -- that, for example, creating additional tools for the imf is an important component of providing markets overall confidence in global growth and stability, but that is a supplement to the work that is being done here in europe. and based on my conversations with president sarkozy, chancellor merkel, and all the other european leaders, i believe they have that strong commitment to the euro and the european project. david muir. >> thank you, mr. president. i'm curious what you would say to americans back home who've watched their 401(k)s recover largely when the bailout seemed a certainty, and then this week with the brand new political tumult in greece, watched themselves lose essentially what they had gained back. you mentioned you're confident in the bailout plan. are you confident this will actually happen, and if so, that it will work? >> well, first of all, if you're talking about the movements of the u.s. stock market, the stock market was down when i first took office and the first few months i was in office about 3,000 points lower than it is now. so nothing has happened in the last two weeks that would suggest that somehow people's 401(k)s have been affected the way you describe. am i confident that this will work? i think that there's more work to do. i think there are going to be some ups and downs along the way. but i am confident that the key players in europe -- the european political leadership -- understands how much of a stake they have in making sure that this crisis is resolved, that the eurozone remains intact, and i think that they are going to do what's necessary in order to make that happen. now, let's recognize how difficult this is. i have sympathy for my european counterparts. we saw how difficult it was for us to save the financial system back in the united states. it did not do wonders for anybody's political standing, because people's general attitude is, you know what, if the financial sector is behaving recklessly or not making good decisions, other folks shouldn't have to suffer for it. you layer on top of that the fact that you're negotiating with multiple parliaments, a european parliament, a european commission -- i mean, there are just a lot of institutions here in europe. and i think several -- i'm not sure whether it was sarkozy or merkel or barroso or somebody, they joked with me that i'd gotten a crash course in european politics over the last several days. and there are a lot of meetings here in europe as well. so trying to coordinate all those different interests is laborious, it's time consuming, but i think they're going to get there. what is also positive is -- if there's a silver lining in this whole process, it's the fact that i think european leaders recognize that there are some structural reforms, institutional modifications they need to make if europe and the eurozone is to be as effective as they want it to be. i think that what this has exposed is that if you have a single currency but you haven't worked out all the institutional coordination and relationships between countries on the fiscal side, on the monetary side, that that creates additional vulnerabilities. and there's a commitment on the part of european leaders, i think, to examine those issues. but those are long term. in the short term, what they've got to do is just make sure that they're sending a signal to the markets that they stand behind the euro. and if that message is sent, then i think this crisis is averted, because some of this crisis is psychological. italy is a big country with a enormous industrial base, great wealth, great assets, and has had substantial debt for quite some time -- it's just the market is feeling skittish right now. and that's why i think prime minister berlusconi's invitation to the imf to certify that the reform plan that they put in place is one that they will, in fact, follow is an example of the steady, confidence-building measures that need to take place in order for us to get back on track. norah o'donnell. >> thank you, mr. president. the world leaders here have stressed growth -- the importance of growth. and yet growth back at home has been anemic, the new jobs report today showing just 88,000 jobs added. the republicans in congress have made it clear that they're going to block your jobs bill because they believe the tax hikes in it hurt small businesses. at what point do you feel that you declare stalemate to try and reach common ground? and do you feel like you have been an effective leader when it comes to the economy? >> well, first of all, wherever republicans indicate an interest in doing things that would actually grow the economy, i'm right there with them. so they've said that passing trade bills with south korea and panama and colombia would help spur growth -- those got done, with significant bipartisan support. they've suggested that we need to reform our patent laws -- that's something that was part of my long-term program for economic growth, we've got that done. what i've said is all those things are nice and they're important, but if we want to grow the economy right now then we have to think bigger, we've got to do something bolder and more significant. so we put forward the american jobs act, which contains ideas that are historically supported by democrats and republicans -- like rebuilding our infrastructure, our roads and our bridges, putting teachers back in the classroom, providing tax credits to small businesses. you say, norah, that the reason they haven't voted for them is because they don't want to tax small business. well, actually, that's not -- if that's their rationale then it doesn't fly, because the bill that they voted down yesterday -- a component of the american jobs bill -- essentially said we can create hundreds of thousands of jobs, rebuilding our infrastructure, making america more competitive, and the entire program will be paid for by a tax not on millionaires but people making a million dollars a year or more, which in the united states is about -- a little over 300,000 people. now, there aren't a lot of small businesses across the country that are making that kind of money. in fact, less than 3% of small businesses make more than $250,000 a year. so what they've said is, we prefer to protect 300,000 people rather than put hundreds of thousands of people back to work and benefit 300 million americans who are hurting because of low growth. so we're going to keep on pushing. now, there are steps that we can take absent congressional action. and the refinancing proposal that we put forward in las vegas is an example of that -- helping students with student loans. we're going to keep on rolling out administrative steps that we can take that strengthen the economy. but if we're going to do something big to jumpstart the economy at a time when it's stabilized but unemployment is way too high, congress is going to need to act. and in terms of my track record on the economy -- well, here's just a simple way of thinking about it. when i came into office, the u.s. economy had contracted by 9% -- the largest contraction since the great depression. little over a year later, the economy was growing by 4%, and it's been growing ever since. now, is that good enough? absolutely not. we've got to do more. and as soon as i get some signal from congress that they're willing to take their responsibilities seriously, i tm to break out of the rigid ideological positions they have been taking. at the same is true when it comes to deficit reduction. we can solve all of our problems. we can grow our economy and put people back to work and reduce our deficit. you get surprising consensus from economists about how to do it. it is just a matter of setting politics aside and constantly remembering the election as one year away. of we do that there is no reason we cannot solve these problems. all right? thank you everybody. >> next -- c-span's series "the contenders." tonight adlai stevenson. a look at the october jobs report and a response from republican leaders. and now from libertyville, illinois, the life of adlai stevenson profiled in the c-span serious "the contenders." >> ladies and gentlemen of the convention, my fellow citizens, i accept your nomination and your program. [applause] now that you've made your decision, i will fight to win that office with all of my heart and soul. with your help, i have no doubt that we will win. help me to do the job in these years of crisis that spread beyond vision. we will justify our glorious task and the loyalty of millions who look to us for compassion, for understanding, and for honesty. we will serve our great tradition greatly. i ask of you all you have. i will give you all i have. >> that was our contender this week, adlai stevenson, accepting the democratic nomination for president in 1952. we are joined by richard norton smith in libertyville, illinois. who was this one-term governor of illinois? >> for millions of americans, that is all he was. the one-term governor of illinois. they had never heard a voice like his. they did not know that a political revolution was being touched off that night. for the next decade, adlai stevenson would be the voice of the democratic party, someone who would transform american politics, even though he was never successful in his quest for the white house. >> how did he get the nomination in 1952? >> he is the last candidate to be drafted. he is the last candidate to require one more ballot at the convention. he did not want the nomination is the short answer. there was a vacuum in the democratic party. harry truman was retiring. there was no obvious successor. adlai stevenson did a remarkable welcoming address at the chicago convention that had the effect much like william jennings bryant. it touched off this draft. a couple days later, he was delivering the speech you just heard. >> welcome to libertyville and "the contenders." this is the 9th in our 14 week series. we're looking at the men who ran for president and changed american politics. tonight, our focus is adlai stevenson, 1900 to 1965. we are joined by well-known author and historian richard norton smith. we're live from libertyville, illinois. we are at the stevenson family farm. in just a minute, we'll be joined by newton minow, who worked and knew adlai stevenson. we will be joined by senator adlai stevenson iii, the son of adlai stevenson. he is a 10 year senator from the state of illinois. richard norton smith, before we leave the office, there are some things sitting around that we want to learn a little bit more about. first of all, what is this a hand? >> stevenson said that he suffered from a bad case of hereditary politics. there are multiple generations of stevensons in the story. the lincoln connection was a very powerful one. this is a cast of lincoln's hand. part of the famous mast created in 1860. >> also on the desk is an address book. some of the names in this address book include eleanor roosevelt, jackie kennedy, john steinbeck. >> he was very unusual, a non- politician in many ways. millions of americans proudly declared themselves stevensonians. >> standing between us is this old office chair. >> this is stevenson's cabinet chair. he was made a member of the cabinet, this is the chair that commemorates that. somewhat difficult relationship that he had with the kennedy administration. >> you referred to the dynasty, the stevenson political dynasty. here on the wall are some artifacts. very quickly. >> governor stevenson's grandfather was vice president of the united states. under grover cleveland. he ran again in 1900 under william jennings bryant. this is grandfather stevenson's hat. you can see campaign items from the grover cleveland campaign as well. >> thank you for joining us tonight. live from libertyville, we will work our way over to the barn on the family farm. we are currently in the study. next to it is a barn. this was a working farm at some point. it had animals, horses, sheep, et cetera. we will work our way over there where there is a new display about adlai stevenson. first, we want to show you some campaign commercials so you can see some of the video of adlai stevenson. these are from 1956 and 1952. one of them was filmed right here in this study. >> i am sitting right here in my own library. thanks to television, i can talk to millions of people that i could not reach any other way. i am not going to let this spoil me. i am not going to stop traveling in this campaign. i can talk to you, but i cannot listen to you. i cannot hear about your problems, about your hopes and your affairs. to do that, i have to go out and see you in person. that is what i have been doing. for the past several years, i've traveled all over this country. i have been in every state. i have met thousands of you and millions of you have seen me. ♪ ♪ >> stevenson! ♪ >> ♪ i would rather have a man with a hole in his shoes than a man with a hole in everything he says i would rather have a man that knows what to do when he gets to be the prez i know the gov will bring the dove of peace and joy ♪ adlai, love you madly what you did for your own great state you are going to do for the rest of the 48 ♪ >> old macdonald had a farm back in 31 conditions filled him with alarm back in 31 ♪ to vote for adlai stevenson a vote vote here and a vote vote there a vote for stevenson everywhere all america loves that farm ♪ >> if you should allow me to be your president, next november, i should be the better for having done it, i am sure. because i know that the strength and wisdom that i need must be drawn from you and the people. finally, i hope the next time we meet, it will be person to person and face to face. >> i am adlai stevenson. you and i have been hearing from our republican friends that things are so good, they could not be better. do you think that things cannot be better for the small- business man, like this one? small business profits are down 52%. that they cannot be better for our farmers? like these? farm income is down 25%. are schools good enough for the richest nation in history? they need a third of a million more classrooms. what about you? are you out of debt? you have a comfortable bankroll in the bank? are you paying less for the things that you buy? or more? do you really think things cannot be better? of course they can. working together, we will make them better. >> vote democratic. >> rising cost of farming. lower farm income. caught in a squeeze. vote democratic, the party for you, not just the few. vote for adlai stevenson. >> we are back live at the stevenson farm in libertyville. we are now joined by newton minow. he is the former chairman of the federal communications commission. for our purposes tonight, he has worked with and was an associate of adlai stevenson for many years. newton minow, if you could start by telling us when did you first meet gov. stevenson ? >> i was a law clerk at the supreme court. one of our professors came to visit one day. he later offered my co-clerk a job as his assistant in springfield. it turned out that howard was not interested, but i was. i ended up being interviewed by the governor. at 7:00 for breakfast in the spring of 1952. he said to me, if i hire you, young man, it is there any reason why you would not take the job? if my current boss runs for president, and it was rumored that he would be a candidate, if he asked me to stay with them, i would like to do that. the governor looked at me and said, i do not think that is very likely. i then drove him to his next appointment. i went to work at the supreme court. i picked up "the new york times." it said "truman offers stevenson the presidential nomination." this was the morning after president truman had asked him to run. i was hired and reported for work. >> what was he known for as governor? >> even as a student, i worked in his campaign in 1948. he was known as being totally honest, which was not necessarily a prerequisite for election in illinois. he was a different kind of candidate. he was honest, and he was an intellectual, he cared deeply about good government. he brought a whole different culture to the office of governor. >> richard norton smith, 1952, set the stage for us. >> there was a sense that the democrats had been power for 20 years. even the most partisan democrat thought that perhaps the party and the country would be well served by a change. the great issue was which republican party would replace harry truman if harry truman were to leave? would it be be isolationist conservative midwestern party or would it be the international modern republican of the eisenhower? stevenson had to calculate the chances of which party he might be running against. he was very reluctant to run. >> he did not want to run. he did not want to run against dwight eisenhower. it was like running against jesus christ. if it had been robert taft as the opponent, adlai stevenson would have relished running. there would have been a clear difference in philosophy. you have to remember the democrats tried to draft general eisenhower. the democrats tried to get eisenhower to run as a democrat. eisenhower was a candidate of both parties. >> newton minow, when adlai stevenson did the welcoming address at the democratic national convention in chicago in 1952 -- in 1952, was he considered a candidate? >> he was not that well known. i remember the first time he appeared on national television. he was on "meet the press." he was never any good on television. he was a lot of fun and a great personality and you always went away feeling better about yourself. when you watched him on television, he was either nervous, but he was never himself. the country did not know him. >> he gets the welcoming address and he gets drafted, went on the second or third ballot. >> that is right. it was really unfortunate because the timing was wrong. if he had run for president against dwight eisenhower, he probably could have won. >> who did he pick for a running mate? john sparkman, senator from alabama. he had to worry about keeping the solid south solid. >> exactly. john sparkman was picked at the last minute. >> did they have a relationship? >> not really. >> did he want to be on the 52 ticket? >> he was always interested in running for president. adlai stevenson did not like him. >> he ended up being the vice president in 56. >> harry truman might have liked him even less. >> harry truman in 1952 and his relationship with adlai stevenson. >> he is regarded as a great president. the fact is at the time, he was a very unpopular president. the korean war was an unpopular war. he fired douglas macarthur, there is a consensus that he did the right thing for the right reason, but at great political cost. harry truman had been in power seven years. he had decided seven years was enough. he had the power to permit him from becoming the nominee. he probably had the power to make adlai stevenson the nominee. with that power went the dead weight of the truman administration. my sense is that truamn and stevenson's relationship never quite recovered. >> there was another factor. there was a lot of corruption in the democratic party. there had been a scandal with one of president truman's assistants. it was not a happy thing to become the nominee in 1952. as i left the supreme court, i went to see the chief justice to say goodbye. he was very close friends with truman. the chief said to me, your guy is not going to make it. i said, what? he said, i was with the president last night. he told me that he has lost patience with adlai stevenson. it is going to be barkley. they tried to get it for barkley, but everybody said, he is too old. >> we are live from libertyville, the stevenson family farm, about 40 miles outside of chicago. the phone numbers are on the screen because we want to hear from you as well. the results in 1952, by the way, that election was held 59 years ago tonight, november 4, 1952. adlai stevenson won 27 million votes. he got 89 electoral votes and won nine states. dwight eisenhower, 442 electoral votes. he won the 34 million votes. he won the rest of the states, which would have been 41 states. >> one thing to keep in mind is compared with 1948. in losing, stevenson got 3 million more votes than truman had three years earlier. dwight eisenhower got 12 million more votes. you have the largest increase in voter participation since the 1820's. you had two outstanding candidates. each were able to excite the electorate. >> here is a little bit more of adlai stevenson at the 1952 convention. >> what does concern me is not just winning this election. but how it is one. how we can take advantage of this great opportunity to debate issues sensibly and soberly. i hope and pray that we democrats will win or lose, can campaign, not as a crusade to exterminate the opposing party, as our opponents seem to prefer, but as a great opportunity to educate and elevate a people whose destiny is leadership. let's tell the american people the truth, there are no gains without pain. we are now on the even of great decision. >> newton minow, where were you 59 years ago tonight? >> i was in the governor's mansion. one thing that taught the american people about stevenson was the way he conceded defeat. he gave the most graceful, patriotic talk. he pledged to support president eisenhower. he ended with a story that he remembered from abraham lincoln. it was a story about a little boy who stubbed his toe in the dark. he said, it hurts too much to laugh, but i am not old enough to cry. people saw his character with that. he was a patriot who loved his country and was willing to support a new president. >> let's take some calls. the first call is paul in iowa. >> hello. i want to thank c-span for doing this. this is a great series. i have recently finished reading -- he puts forth a very negative view of adlai stevenson campaign for president. he claimed he spent too much time attacking nixon. it was a blemish on a very stellar career. do you think that the campaign was a low point of stevenson's political career? did he spend too much time attacking nixon? what could he have focused on to make the election closer? should she have focused on farm issues more? should he have focused on war and peace issues? thank you very much. >> let's start with newton minow. 1956 campaign. >> 1956 campaign, in my opinion, was not as stellar as it was the 1952 campaign. the reason for the emphasis on nixon in 1956 was the fact that president eisenhower had suffered a bad heart attack and had some bad health problems. there was great concern in the country of what would happen if president eisenhower was reelected and he died during the second term and nixon became president. there was a good reason to go after nixon because nixon did not have the character to be president. >> i think the 1956 campaign, from a historical standpoint, it is the campaign that laid the groundwork for the new frontier. that is the campaign when adlai stevenson embraced the idea of a nuclear test ban treaty. that is the campaign when he endorsed a constitutional amendment so 18-year-olds could vote. in terms of foreshadowing policy to come, 1956 turns out to be a fountainhead of ideas. you are right, the last speech on election eve where he said the medical evidence suggested a real possibility that richard nixon would become president. that is something that tom dewey had not done in 1944 under somewhat similar circumstances. you did not go there. in some ways, he paid a price for that. >> you are right. the nuclear test ban, which was a very unpopular point of view to take in 1956, he took it very courageously because he believed in it deeply. someone asked what the weapons would be in world war iv, and he said there would be sticks and stones. >> between 1952 and 1956, was adlai stevenson going to get the nomination again? >> i would have to answer that with a yes and no. he hoped that he might someday be president, but he also knew that if he ran against president eisenhower again, the odds were very much against him. i was one of the few people around him that urged him not to run in 1956. he felt an obligation to the democratic party. >> here is a little bit of adlai stevenson at the 1956 convention. >> i come here on a solemn mission. i accept your nomination and your program. [applause] i pledge to every resource of mind and strength that i possess to make a good win for our country and our party. four years ago, i stood in this same place and uttered those same words to you. four years ago, i did not seek the honor that you bestowed upon me. this time, as he may have noticed, it was not entirely unsolicited. [laughter] [applause] there is another big difference. that time, we lost. this time, we will win. [applause] >> newton minow, you started laughing what you listen to that video. >> when he said it was unsolicited, it reminded me. in 1955, stevenson gave a speech at the university of texas and i was asked to go with them. it was right after president eisenhower had suffered his heart attack. lyndon johnson, the majority leader of the senate, had also suffered a heart attack. we were to spend the night at lyndon's ranch. we got there late. mrs. johnson was very upset because the doctor told her that lyndon johnson should be sleeping. and he was up until 2:00 in the morning. on the way home, just the two of us for traveling. adlai stevenson said to me, if i want the nomination next year, i will have to run in the primaries. i said, they are right. if president eisenhower does not run, every democrat is going to want the nomination and you'll have to fight for it. if president eisenhower does run, you ought to forget about it. he said, i am not going to run in those primaries. i am not going to be a candidate like i am running for sheriff. i am not going to do it. of course, he ended up doing it because that is the way the system operated. >> joe in los angeles, we are talking about adlai stevenson. go ahead with your comments. >> i want to jump ahead to the 1960's. what you thought his relationship with the kennedys was. i know he was nominated in that convention and because of that, there were still feelings with jack kennedy. what would have happened if he had been made secretary of state? would the situation in vietnam have been different? >> let's start with richard norton smith. >> that is a very wide subject. it is certainly true that it was not a warm relationship between the kennedys and governor stevenson. in 1956, he had done something no one else had done. he had thrown at the nomination for the vice presidency open. he left the convention decide. jack kennedy came within eyebrow of winning the nomination. it introduced him to the country, paved the way for his campaign in 1960. one of the distinguished visitors that came to this house was jack kennedy. he very much wanted adlai stevenson's endorsement, who did not give it. he did not go away with his admiration of the governor enhanced. if he was ever going to be secretary of state, i think that possibility went down the drain right then. >> we will talk a little bit later about the kennedy relationship and his years as u.n. ambassador. the results in 1956, adlai stevenson won 73 electoral votes. he got 26 million votes, about 1 million less than he got four years earlier. dwight eisenhower, 457 electoral votes. he won 41 states. it was the last election were there were only 48 states in the nation. dwight eisenhower won about 35 million votes. our next call, akron, ohio. >> thank you. this is a great honor to be watching this type of program. i have a comment and a question. richard norton smith stole my thunder about the 1956 convention and jack kennedy. one of my favorite comments was something that harry truman said about adlai stevenson, that he spent more time thinking about what he was going to do rather than doing it. he spent a lot more time talking to college presidents than he did to cabdrivers. anyway, 1956, richard norton smith made a comment to adlai stevenson doing something unprecedented in, opening the convention to picking a vice presidential nominee. very few people really know there were two other candidates in contention for that position. hubert humphrey and al gore, sr. seeing as how jack kennedy was out of it, would that ticket have been a little bit better had it have been al gore, sr. or hubert humphrey? also, i guess what i was going to say -- >> let's leave it there. that is a lot of questions. >> certainly, kefauver did not help. i think what richardson about kennedy was exactly correct. the opportunity to be at the convention and to be seen as a vice presidential possibility introduced jack kennedy to the country. i remember a few years later, i saw him at a dinner and i said, jack, if you are so interested, you can get be nomination for vice president next time. he said, vice-president? i am going to run for president. he was only 39 years old. >> the caller raises a point that i am sure that governor stevenson heard many times during his lifetime. the notion that he talked over the heads of people. what was his reaction to that? >> i think he did not talk over the heads of the people. they used to call him an egghead. he is to make fun of that. eggheads of the world unite. you have nothing to lose but your yolks. i think he reached people. he had a great sense of humor. one time he gave a speech in san francisco. a woman came of to him after the speech and said governor, after that speech, every thinking american is going to vote for you. and he said, thank you, madame. unfortunately, i need a majority. he knew what the situation was. >> next call comes from tennessee. >> thank you. it is a great show. my father was an academic and i grew up in washington, d.c. i remember my father talking about how great adlai stevenson was. the reason i am calling was that i was struck by the 1952 electoral map. it seems like the sparkman strategy won. he did not get tennessee and he did not get his own state, illinois. >> he had been elected governor of illinois by the largest margin in the history of the state. they elected this new deal liberal democrat and it was not surprising that he counted on winning it in 1952. >> if he had run for governor in 1952, even with president eisenhower's running on the republican -- he would have won the governorship again by a larger margin. >> newton minow, today, we talk about taxes, spending, social security. those are some of the issues we look at during the campaign. in 1952, in 1956, what were the main issues that were talked about? >> 1952, the big issue was korea. we were bogged down in a war there. president eisenhower says, i will go to korea. the country thought he would end the war in korea. the other big issues were the same issues we have today. we have the same issues that divided the country back in the 1950's. education, the economy was better than than it is now. there was less unemployment. this country is equally divided. if you look at the last 10 presidential elections, with the single exception of johnson and goldwater in 1964, they have all been decided by a few points. the country is equally divided. >> in 1956, here is a little bit of adlai stevenson talking about the democratic platform. >> to the threshold of a new america. a new america of great ideals and noble vision. i mean a new america where poverty is abolished and our abundance is used to enrich the lives of every family. [applause] i mean a new america where freedom is made real for all, without regard to race or belief or economic conditions. [applause] these are the things i believe then. these are the things i will work for. >> we are live in libertyville at the adlai stevenson farm. boston, you are on the air. >> i was very young and during the era of president kennedy and adlai stevenson. i want to share an emotional think i will probably take to my grave. in 1960, a couple of weeks before his assassination, adlai stevenson went to texas, where they threw oranges at him from the balcony. he called president kennedy and told him not to come to texas. at least get a bulletproof car, which he did not do. on the other side of the question, i believe president kennedy and his brother had a little bit too much ego. if adlai stevenson knew that, there would have been more listening. >> we will get an answer from both our guests. they both started nodding their heads. >> i think it was a united nations event in dallas. afterwards, he was struck by some protesters. i think he was spat upon. a classic rejoinder -- i do not want to prosecute them, i want to educate them. >> he was very aware of the dangers, but i would not go as far as the questioner did. he made that commitment and wanted to keep it. talking about the relationship of adlai stevenson and president kennedy. during the 1960 campaign, norman vincent peale had organized a group of other clergymen and they said that jack kennedy was unqualified to be president because of his religion. adlai stevenson was asked about it. he compared it to st. paul. he said, i find st. paul appealing and norman vincent peale appalling. he could always work in a joke. politics today has no humor. with the exception of bob dole, i do not see any politician today, either party, who has a great sense of humor. >> do you think it worked against stevenson? he always had these wonderful quips. >> abraham lincoln went around telling stories all the time. i do not think it hurt him. i think people like to have someone who has a sense of humor. >> next call, poughkeepsie, new york. nick, good evening. >> hi. i would like to know when stevenson was a child, was there an incident where he accidentally shot his friend? how did that influence his presidential campaign? >> did he ever talk about that? could you give us a brief history of what the coller is referring to? >> there was a tragic accident in childhood when there was a loose gun in the family and adlai stevenson accidentally shot and killed another child. i never heard him say anything about it. i never saw any evidence that it affected him. who knows? >> he was 12 years old at the time. one did get the sense that the family moved on. it was not something that they dwelled on. years later, he expressed astonishment that his wife knew about the incident. it would suggest that he really kept it very close to his vest. >> who was his wife? >> his wife was a woman who came from a very fine upperclass family. she was not very interested in politics. she disliked politics. when adlai stevenson went into politics, i do not think she was very happy about it. they came to a parting of ways. >> that was in 1949. >> he had been elected before the divorce. >> did the divorce hurt him during the 1952 and 1956 presidential campaigns? >> president reagan was divorced. today we have public officials living without marriage with someone else. there has been a vast cultural change. >> one more instance of stevenson being ahead of his time. >> could be. >> we are live from libertyville. theodore is on the line. go ahead with your question or comment. >> i appreciate the program very much. i am a senior in a nearby senior retirement community. participating in a memoir group. we have been asked to write what good things from the 1950's should be carried into the 21st century. i happen to be present at the 1952 election where he voted in vernon township. it was next to a congregational church. my question is, what significance do you place to that icon of the hole in his shoe? how would you summarize what could be carried into the 21st century? >> let's start with richard norton smith. >> stevenson was a man who flattered our intelligence. he spoke up to us. he did not speak down to us. he is arguably the last national politician. he believed that a presidential campaign was first and foremost an educational exercise. >> what do you mean by that? >> he was forever running out of time. they would cut him off in the middle of the speech. he could not believe that people would not take sufficient amount of time to educate themselves, to listen to a thoughtful, sober, substantive issue-oriented appeals from candidate on both sides. that is how he approached running for office. that is how he approached governing illinois. i have heard him say more than once that a campaign was an educational exercise, not only for the public, but also for the candidate. an opportunity for the candidate to educate himself or herself about the country. i also heard him say, there are worse things that can happen to someone then losing an election. >> what is a stevensonian? >> an egghead. wit, self deprecatory, someone who has been very little patience with the political claptrap that spin doctors have foisted upon us. i cannot imagine adlai stevenson being handled by any such individual. >> it would never happen. i was much a member of an american delegation to a conference in japan and in our delegation was don rumsfeld. we were having dinner and i said, why did you go into politics? he said, it was all because of a speech given to my graduating class at princeton. were you in the class of 1954? he looked at me and said, how did you know that? i said, i know the speech. it is the best speech adlai stevenson ever gave in his life. it was a speech about why everyone should devote some of their life to public service. he read me a paragraph verbatim of the speech. he pulled out his wallet and pulled out a torn copy of the speech. i said, that is why you went into politics? he said, that is why i went into politics. if you read his new book, he starts off by quoting from that speech. his biggest contribution was making politics respectable and honorable. jack kennedy used to say politics is an honorable profession. i think he got that from adlai stevenson. >> adlai and ellen stevenson had three sons. adlai stevenson iii was a marine in 1952. >> he takes time out from his campaign to attend the graduation of his son from the marine officer candidate school in quantico, virginia. it is a proud father and an equally proud son on an occasion important to both. >> live on your screen is senator adlai stevenson iii, he is in his father's study on the family farm. senator stevenson, thank you for opening up this facility for us. what was your role in the 1952 and 1956 campaign? >> in the 1952 campaign, i was in the marine corps. i did not have a role in that campaign. they were involved in the 1956 campaign. >> what role did korea play in your father's campaign? >> korea became an issue though it was not an issue, but adversely affected my father's campaign. he was advised to say if elected president, i will go to korea. that is exactly what general eisenhower said. my father refused to do that because he felt that if he made that commitment to go there and arrange a truce -- the eisenhower administration was weakened by this commitment of eisenhower to end the war. my involvement did not have any effect at all. >> he served in the u.s. senate from 1970 until 1981 for the state of illinois. he voluntarily stepped down in 1980, ran for governor twice for this state. what made you enter the family business? >> i was born with a hereditary case of politics. if by business, you mean my career. we did not think of it as a business. i am paraphrasing my father. >> of course, the first adlai stevenson served as vice president and secretary of state for illinois. and now we are joined by senator stevenson. he is in his father's study in libertyville. we are in what used to be the barn and it is right next door. it is now set up with an exhibit. what is going on here? >> this home, which this home, which became our base over the years as a served in washington and everywhere, is the home of the adelaide stevenson center on democracy. we try to bring people together to address systemic weaknesses in democratic systems and continue the stevenson legacy. this was the home -- it really became the base from which me, my father ranged the world, not only to serve in springfield and so on, as i mentioned, but also to study the world from on the ground and within it. we never stopped trying to learn about the world from within it. in the marketplaces, slums, ruins, as well as the universities and ministries -- trying to see the world from within it. i think that lifetime of on the ground study of the world with a prospective from no ivory tower really helped to create the record and make him an electric frying -- an electric frying figure -- in electrifying figure out. president kennedy appointed him as the ambassador to the united nations where he represented the united states effectively. >> we have one hour left in "the contenders." alley stevenson is our focus. our guest, senator adelaide stevenson the third and the former federal communications commission chairman under jfk and, of course, well known author and historian richard smith. we're going to take this call from sally. >> let me correct something. i was born and raised in chicago, but i live in california. i am calling because adelaide stevenson from 1952 election was my first presidential -- in other words, when i was eligible to vote. i went door to door and did whatever i could. i was crushed that he did not win. on retrospect, i thought he would contribute more on the world stage as a statesman. in a way he did. but i will never forget how disappointed we were. one other thing -- been from chicago, i worked at the tribune tower when the duly-truman election -- dewey-truman election. i will let you go and get your response off air. >> i think we could talk to sally all night. senator stevens and, if we could start with you. you heard the emotion in her voice. could you talk about his campaign style a little bit? >> i would like to amplify. i think they have done a very perceptive of jobs. getting back to 1952. he was also reluctant to run for president because he had been elected governor of a state which we loved and are deeply indebted to. it succeeded a corrupt republican administration. he reached out and he recruited the best qualified professionals that he could find. it was not pay to play in those days. it was a sacrifice to serve. they were reforming state government. he wanted to finish the job. he was also reluctant because eisenhower would be very difficult to defeat. he was a returning war hero. i think secretly, not so secretly at home, he was also not convinced it was time for a change. remember, he started that 1952 campaign. he was drafted. he started the campaign at the convention with absolutely no program, no money, no staff. it went on to electrify the world. for him, i may be repeating, for him democracy was not a system for acquiring power. it was a system for informing people so they could make a sound judgment. he said trust the people with all of the truth. what wins is more important than who wins. the 1956 campaign was more substantive. he had more time than the 1952 campaignhe used to the campaigns and the interim has leader of the party. he laid the programmatic foundations for the new frontier and the great society. in fact, i heard arthur schlesinger, the famous historian who was close to jack kennedy -- we always called jacked at jack -- john f. kennedy, the executor of the stevenson resolution. those campaigns were aimed not only at the american people. they were substantive. he used half hour blocks of time for eloquent, substantive speeches. >> you talk about the 1952 and 1956 campaigns. your father lost books between those and a couple more states. what did he not do as well in 1956? did he make mistakes? >> eisenhower is enormously popular. these were years of economic prosperity and growth. eisenhower was popular. the war ended and -- that would come later in korea. what happened -- one of the things that happened, i would have never gotten reelected anyway. -- eisenhower would have never gotten reelected anyway. with the uprising in hungary and the invasion of suez by france, britain, and israel, these international crises that rallied the country as they always do behind the president. justthen on, they're really was not much doubt about the outcome. >> richard norton smith. >> i just want to go back to the 1952 campaign. it is accurate that he started out with nothing. in fact, there was a debate over where to have the political headquarters. harry truman expected it to be in washington. it was in springfield. the story was told, you can't you can -- you can tell me if it is true or not, he did not expect it to be publicized which is revealing. one night to very shortly after the convention, he came back to springfield. conscious of the crushing responsibilities, he left to the -- he is left the -- he left the executive mansion one night by himself without guard and walked to jackson and eighth street, knock on the door. the custodian recognized him. it was not then a national historic site. he let him in. he sat by himself in the lincoln parlor for some period reflecting. meditating on a man who had confronted him with greater responsibilities a few years earlier. the interesting thing about that story is not only that it happened but that adlai stevenson did not publicize it. he did not expect anyone to know about that story. is that accurate? >> none of us knew about it until years later. i read this and said is it true? he did not talk about it. >> you have to understand. this story -- it goes back to five generations. i tried it to record it. american politics and history as we knew at -- he was lincoln's patron. he was a constant presence in this family. lincoln was an inspiration. woodrow wilson, former president of princeton. my father was a graduate of princeton. wilson was an influence also. the enlightened internationalism of wilson heavily influenced my father. lincoln, who might never have been president without the lincoln douglas debates, lincoln was an inspiration and a presence in this family. >> our next call for our guest talking about adlai stevenson comes from oak island, california. -- north carolina. jimmy please go ahead. >> thank you for taking my call. i am a world war ii veteran who was part of the eisenhower army. i did not feel like at the time -- i was from north carolina at which you could see it was one of the blue states for adlai stevenson both times. we felt that adlai stevenson was a politician and more able to handle the political things. eisenhower was more of a military person. even though times were good, i was wondering what do you think -- how what the united states -- how would the united states had changed in that eight years if adlai stevenson had been president rather than dwight eisenhower? >> senator stevenson. let's start with you. >> dwight eisenhower has been quoted and recently by a member of his family as saying that if he had known adlai stevenson was to be the democratic candidate, he would not have run for president. i think on the large international issues, there was probably not a good deal of difference between them. one thing my father really felt strongly about richard nixon, he was loath just about by everybody in washington. his strength was at the grass roots. after that incident and -- after the checkers speech and eisenhower's retention of richard nixon on the ticket, i think that caused some doubts in his mind about eisenhower. he respected eisenhower. my father was such a figure in the world that john fosterdulles reluctantly made him an ambassador of the eisenhower administration so that in his travels run the world he could -- throughout the world he could efficiently represent the united states. a difference between the democratic ex -- the democrats and eisenhower winning the of -- wing of the the party were the taft wing. -- republican party or the taft wing. if my father had been a president, you probably but have had the new frontier and the great society accelerated. medicare, federal aid to education, other social programs might have taken effect earlier. as it was, much of it did not take affect until after the assassination of kennedy when johnson very shortly -- i -- very shrewdly -- i remember consulting my father. what is your advice? my father was taken back. he was very flattered. he said, i guess you should take some time now to put your program and administration together. he said, this is my moment. within 100 days, the program was through congress. he knew timing. he was a real politician. that program had been developing since the 1952 campaign. it might have been accelerated a little had my father won in 1952 were 1956. -- or at 1956. >> i think he has it exactly right, but i would add one thing. because adlai stevenson was so committed to getting rid of nuclear war, i think we might have had faster progress than actually occurred later in dealing with the russians and dealing with nuclear disarmament. i think that was such a passionate belief that i think he would have given much more attention and persuasion to it then occurred. -- than occurred. i think also we would have had more friends throughout the world then we ended up with at that time. >> it is interesting. it is hard to imagine -- that is what we are doing. we are imaginings. it is hard to imagine president stevenson sending not playing on -- sending that u-2 plane on the eve of a great summit. one more thing. i do think they had respect for each other. i think they also learned to discover the weaknesses of one another. i suspect eisenhower over time grew rather resentful of the implication that stevenson was the only word smith -- the only great eloquence to persuader in -- eloquent persuader in american politics. he once said that if words are all that matter, the american people could vote for ernest hemingway for president. i think that was a criticism of stevenson. >> next call for our three guest calls from portland, oregon. >> thank you for taking my call. in 1962, i was a high school kid living in a republican house will. but in the 1956 i had spent the time as an intern and was fixed forever. i remember there was a disappointment at the convention because there was not a contest that there had been in 1952. i was wondering if you could elaborate on how the decision was made to throw it open to the convention whether it was for everybody to have a good time or whether it was at least in part to be able to dodge the animosity of all of the candidates who did not get it. >> if you could start and then senator stevenson, we want to hear about your role. >> i think adlai stevenson felt he had seen it firsthand how the vice president was picked in 1952. it was so casually done. he realized it needed much more attention. he was also under a lot of pressure. he was fond of the hubert humphrey. he did not like keith laufer even though he had been in the primaries. he fought jack kennedy -- he thought jack kennedy was very promising but very young and too inexperienced. he decided it would give a lot of excitement to the convention which had been pretty much pre arranged as to his own nomination. he decided to open it up. i think it turned out to be as he predicted. it turned out to be an exciting contest. it introduced jack kennedy to the country. there were a lot of big things for it. >> the outcome of the presidential balloting was a foregone conclusion. to create some excitement, he decided to throw out the -- throw open the balloting for vice president. quietly, we were all rooting for john f. kennedy. my father adored hubert humphrey. i remember at the state house and the convention when the balloting was seesawing for vice president and kennedy was running downstairs to kennedy's suites or the brother-in-law was -- where sergeant shriver's brother and law was guarding the door, running in jack kennedy was pulling up his trousers. he shook his hand and congratulated him. by the time i got back up to my father's suite, i saw him lose. all of us were rooting to jack kennedy. this brought kennedy to the nation's attention. it also despaired him being involved in the failed campaign for president and vice- president. >> let's move four years ahead it to the 1960 democratic convention in los angeles. senator stevens, how would you describe the relationship between your father and jack kennedy in 1960? >> i think the relationship between my father and jack kennedy was close. i know my father respected kennedy. i believe it was mutual. there was a circle or very protective circle around john f. kennedy, which is always fearful and resentful. in this case, concern that stevenson was a threat. people were pouring in from across the country. by the tens of thousands. they were literally hammering on the doors on the convention to demand another nomination for their candidates. eleanor roosevelt was there. mccarthy gave a brilliant nominating address for stevenson. this caused a little anxiety in the kennedy camp. it probably cost a little -- cost a little interest -- thought on my father's part that may be if things deadlocked he could still win the nomination. he had felt that as a leader of the party and as royalty, -- -- out of loyalty to eleanor roosevelt -- loyalty he should be neutral. the former secretary of labor who was also involved in state administration told me he was in my father's suite on the eve of the balloting. my father said when bobby kennedy calls, tell him i have gone to bed and i have left instructions not to be woken. sure enough bobby kennedy calls. he said i have to talk to the governor. you just tell him, this is his last chance. he better talk to me or he won't be secretary of state. he responded, i am sorry, but he has instructed me to tell you that he has gone to bed. that was the end of any chances for secretary of state. it signifies something about the relationship not with jack kennedy but the very protective circle around jack kennedy. that would come back to create other problems like during the cuban missile crisis when my father was vilified. >> we are to get to that in just a minute. we are born to play two minutes of video here. we will start at the 1960 convention. adlai stevenson at the podium. here it is. >> i wanted to tell you how grateful i am for this moving welcome of the 1960 democratic -- tumultuous and moving welcome to the 1962 democratic convention. [applause] i have an observation. after getting in and out of the hotel and at this hall, i decided i know who you will nominate. it will be the last survivor. [applause] >> the details of my participation have not been worked out, but i would drive the campaign where he wanted me to. i suspect that will be in the west and the east and everywhere in between. i hope so. >> what would you do about it? how would you go about it? >> i hope by the participation in the campaign i have not had much doubt that they would support the ticket. i hope they will supported -- support it vigorously in the same manner that i did. >> i hope it will fall you as vigorously as you did in los angeles. >> i hope it will fall you as vigorously as they follow me at los angeles. >> we saw a little bit from the convention. and we saw a press conference after jfk got the nomination. >> i have the most extraordinary experience i had involving both adlai stevenson and jack kennedy was on may 29, 1960. it was jack kennedy's birthday. it was the day after the last primary in oregon. jack kennedy was flying from oregon to a family birthday party. bill blair, our law partner, had suggested that he stopped in chicago. bill and i would pick him up and drive him here to the farm. he would have lunch with adlai stevenson. we were hoping -- bill and i had both concluded it was adlai stevenson impossible adlai to be nominated again. we were hoping it would come to some terms and adlai stevenson would support kennedy. we got in the car and drove out there. bill was driving, jack was in the front seat, i was in the back seat. jack kennedy said, the you think i should talk to him about secretary of state? bill was smarter than i was, he did not say anything. i cannot stand the silence. i said, i would not do that if i were you. he looked at me and said, why? i said, adlai stevenson will be offended. second, you should decide yourself you want if you are elected. came out here and adlai and nancy were here. they manage to get the two of them alone in the study. the minute they came out i could see it had not gone well. we were getting back in the car to go back. i was dying of curiosity. i said, jack, did you say something about secretary of state? he looked at me with those eyes and said, you told me not to. i thought, what have i done? as soon as i got home i called him and i told him the entire thing from beginning to end. he said you did the right thing. i would have been very offended. besides, he should decide who he wants. then i decided i'd better try the kennedys. i called and they said jack had not arrived yet. i told bob exactly what i told adlai stevenson. i felt i had a clean conscience and had not screwed it up. >> can i ask you a question. we saw that clip with the rather lame joke that stevenson said from the podium at a moment of maximum suspense. it was written that it was almost stevenson's moment and he threw it away. he was in a position with the right to remarks to have taken the convention a way. is that unrealistic? was that convention jack kennedy's no matter what happened? can you see a scenario in which stevenson at the peak of his form might have said something -- i have said something on fire? -- might have upset something on fire. >> i think he knew it was not going to happen. they told him the illinois delegates were going to vote for kennedy. i think he knew at that point. we will see what adlai says if he agrees with me. i have always thought that's mccarthy's speech was insincere. i thought he was working for lyndon johnson because he had never been that close to governor stevenson. i had just finished reading jackie kennedy's tapes, and she said jack kennedy said the same thing. there were two people who thought that mccarthy was making that -- >> i don't think that what to attribute that motive to mccarthy. the gossip i hate to repeat at the time was that he was jealous of jack was because it was that catholic instead of this catholic getting the nomination. i think that is unworthy of mccarthy. number one, my father would have resented it. i don't think there was a chance of the convention of him winning the nomination. he had encouraged everybody to go out and support candidates of their choice including richard j. daley of illinois. the illinois delegation was pledged to john f. kennedy. you make a pledge, you don't make it -- you don't break it. the domination was sewed up. -- the nomination was sewed up. there was a lot of tension. there was a lot of dynamism in the works. after the convention, my father campaigned strenuously. he campaigned all over the country for john f. kennedy. --by kennedy's first of the first stop on the campaign trail was right here at the home where we had a great rally on the lawn for bobby kennedy. >> now, he referred it to jackie kennedy's new book put out called historic conversations on life with jfk. there were some audiotapes attached to this. she talked shortly after the assassination. they were just released. here is jackie kennedy talking about adlai stevenson and jfk. >> telling you he had to have the un. i could remember jack telling me about that. >> did that give him a lot of difficulty? >> it was unpleasant. he did not like it. he was not going to give him the state department. at the earliest times a we spoke of it, you new governor stevenson would get the un -- not state which he wanted. it is unpleasant to tell somebody that. i remember their conference on the doorstep was rather vague. stevens said he did not have anything to say or something funny. >> why do you think he decided not to have stevenson for state? >> it was not just bitterness. look at all the people jack took who had been a against him and for someone else. they knew he felt that man had a real disease of being done able to make up his mind. stevenson irritated him. i don't think he could have him coming in every day and complaining about something as secretary of state. it would have been a difficult relationship. >> senator stevenson -- can we get your reaction? >> unfortunately, i really could not hear it. i knew jackie kennedy. i can tell you that i don't think she was political at all. in fact, she was a very artistic woman. she was an intellectual who used to leave washington on weekends which were sometimes spent at bobby's, playing football. she was not athletic. she would go to new york note with my father. -- to go to the theater with my father. from what i could see they had a very good relationship. he gave her and escapes from washington. i have heard about these comments -- not just these, but all of her comments that are critical just about of anybody. i do not know what kind of credibility to place on that. from what i could see, her relationship with my father was very good. in some ways, they were closer than some of the kennedys. >> could you hear the audio tape and jackie kennedy? >> i was with adlai stevenson and jackie sometimes. i think they had a very good relationship. >> what about jfk and adlai stevenson >> i had a very important experience about that. i had a very minor role in the cuban missile crisis. i was involved a little bit. when it was over, there was an article in the saturday evening post written by charlie bartlett. -- and steart alsup. -- stewart alsup. in it there were some critical comments not attributed to any single person a bout what adlai stevenson had proposed which is actually what the united states did. we had closed our missile headquarters in turkey and greece in exchange for a bargain that was reached by cuba. it was critical and i knew that adlai stevenson was upset about it. early one day the president called me at home. he said, will you tell your leader that i did not leak that story. there is a rumor around that i like it. -- that i am the one who leaked it. tell him i did not leak it. i called the governor and i had his number. i got him on the phone in five seconds. he picked up the phone. he said i cannot talk to you now. i am on my way to "the today show" to be interviewed. i said give me one second. the president just called me and told me to tell you he did not leak that story. the governor did not say anything. 50 minutes later i turn on the show and he did jfk holy about -- he gave jfk holy hell about the episode and got it off his chest. later jfk wrote him a letter apologizing saying he did not do it but he made it clear that what adlai stevenson contributed to the cuban missile crisis solution was indispensable. >> we have about 25 minutes left and our callers have been patient. damascus, maryland. bill, thank you for calling. please go ahead. >> can you elaborate on the influence of richard j. daley, the mayor of chicago. the influence he had on stevenson's rise in illinois politics. >> senator stevenson, can we start with you? >> it is the other way around. my father got richard j. daley started in politics. as i mentioned earlier, my father recruited these extraordinary professionals. they came without the endorsements of political leaders and campaign contributors. there was one partial expression -- one partial exception and that was richard j. daley who had been a state senator. he may be did have the endorsement of the cook county chairman. he served with great distinction and my father's cabinet as director of the department of revenue. he really was a pretty straight cabinet officer. later my father supported richard j. daley when he contested for mayor of chicago against an incumbent mayor of that city. this is incredible. the governor of the state siding with a challenger to be incumbent governor. my father had a lot to do with the rise of richard j. daley. it was not the other way around at all. >> washington, d.c., go ahead, dave. we are talking about adlai's stevenson here on "the contenders." >> hello. i just want to tell a story -- >> hi, congressman. how are you? >> does everyone know former congressman dave obie? >> i just want to tell a story about adlai stevenson in the 1960 campaign. i was a student at the university of wisconsin. adlai stevenson had come to madison to give a speech about the civil war roundtable. afterward he was scheduled to appear with the governor at the old park hotel. we had a large crop of democrats gather. they were over one hour late and the crowd was very restive. finally, adlai stevenson was ushered up to the front of the room. he said, sorry we were so late. there were a lot of questions that the civil war roundtable. i have to get the governor over to bed. -- over to the mansion and get him to bed. he has a long day tomorrow. i will give one of my typically short speeches. adlai stevenson butted in and said, i will give one of my typically long ones. he said, you do it and i will leave without you. adlai stevenson said go ahead, see who the crowd follows. the crowd erupted in laughter. i think adlai stevenson -- it shows adlai stevenson was on his feet and how clever he could be in making the audience feel good about it. he was my hero. >> a lot of talk this evening about the fact that adlai stevenson was the architect of the later great society. would you agree with that? >> i think he certainly defined in the 1956 campaign what most of the issues later became of what to the democratic party ran on and stood on for years. he set the agenda for the coming decade in that campaign. >> that was congressman dave obey. we did not know he was going to call. a longtime congressman from wisconsin. thank you for calling. richard, hello. richard? >> thank you for letting me call. i am the author of a book about eleanor roosevelt and adlai stevenson published just last year. i would like to relay one of the anecdotes from the campaign trail. it was a favorite of the campaign team. this is about a gentleman who came to him and said, "mr. stevenson, your speech was absolutely superfluous." to which he replied, "i was thinking about having it published posthumously." he said, "the sooner the better." [laughter] officeare in your dad's over there. there are a set of books of his speeches. they were best sellers, correct? >> yes. incidently, my own book is here. a black book which i tried to record a american politics as we knew it over those five generations including the humor which enriched our politics and could be used to very good defect. -- very good effect. you could use it to denigrate an opponent without being mean spirited. the memories and the experience i try to record over these five generation starting with lincoln and ending in china and an epilogue on the life cycle of nations and empires is aimed to recall what we are doing tonight, the values that created this country and contrast them with those that are undermining it today. >> we talk a little bit about this. richard norton smith, i want to get your reaction. the cuban missile crisis, adlai stevenson was u.s. ambassador to the united nations. >> it did not happen in a vacuum. one year earlier, talk about the strained relationship with the white house. the kennedy administration had put this ambassador in a bad position. one year later, one year and a half later in the fall of 1962, you have a situation in which we have irrefutable evidence that the soviets are in fact installing offensive nuclear missiles on castro's cuba. what transpires is a great paradox. i cannot think of a less sound bite political figure it then adlai stevenson. if you go on youtube to that he is immortalized by one of the great sound bites of the 20th century. >> we will listen to it right now. >> let me ask you one simple question. do you the night that the -- deny that the u.s.s.r. has placed and is placing medium and intermediate range sites and missiles in cuba? yes or no. don't wait for the translation, yes or no? [laughter] >> mr. stephenson, will you continue your statement please. you will receive the answer in due course, do not worry. [laughter] >> i am prepared to wait for your answer until hell freezes over if that is your decision. >> richard norton smith. >> one of the great sound bites of the 20th century. afterwards, one of the kennedys -- maybe it was the president or bobby -- he was allegedly to have said, i did not know he had in him. >> that is true. >> you mentioned the bay of pigs earlier. he was fed a great deal of misinformation which he relayed to the security council. it came out this information was false. he felt very embarrassed. it was the kennedy administration that was embarrassed. nobody doubted my father's integrity. the bay of pigs proposal by the kennedy administration was exactly what my father had proposed, mainly trading off obsolete bases in turkey for withdrawal of the missiles. the kennedy administration insisted on keeping the deal secret. my father did not want it to be secret because he did not want to embarrass khrushchev. he wanted to give them an opportunity to retreat. that did not happen. khrushchev was embarrassed just as my father feared. he fell. he was succeeded by a group from which he emerged brezhnev and the hard-liners and the cold war escalated. the kennedy administration had to be tough instead of compromising and giving crucial of an easy way out. -- khrushchev an easy way out. >> one of the goals of "the contenders" is to figure out how they changed their parties and american politics. after we take this call we will move into the topic area. roots town, ohioplease go ahead. >> thank you for having me i was just curious as to whether or not you have heard of an organization -- if adlai stevenson had ever attended the conference before? >> thank you for your call. go ahead. >> this adlai stevenson has got to a bill gerber conference. i don't know about my father. i don't know how far back echoes. -- that goes. i don't know what the implications are. bill barber conferences were occasional meetings of very senior meetings at which they got together to discuss problems facing the world. there was nothing sinister about them. this adlai stevenson has been to a couple. i don't know if my father has or if they even existed. >> we are here in the stevenson barn. center stevenson is over in his father's study. there is a new exhibit about adlai stevenson. there is a photo that we looked at before this started. this was in 1945 -- the you information. the un -- of the un formation. you remember that photo around the table. >> i do. i don't have it in front of me so i am not sure. you have john foster dulles, you have governor stevenson, nelson rockefeller. you have the secretary of state who was about to be fired. >> was adlai stevenson's role in the founding of the un? >> do you want to take that? it had to do with a proprietary concepts. >> he was also a delegate to the conference in san francisco. the united nations was adopted or approved. but by 1945, we were living in london where he was the u.s. delegate to the commission which laid the foundation -- and actually started putting the building blocks together including the location in new york. he represented the united states at the commission were great men from all over europe and canada, they used to assemble at our home at night because we had access to the commissary. an extraordinary group of people. he was in on the birth of the united nations. incidentally, he died 20 years later just a couple of blocks from our home in london in 1945. i was 65 and is still serving the united nations and his country. >> we want to talk about adlai stevenson and his effect on the democratic party. here he is in 1952 talking about the democratic party kurt >> i -- talking about the democratic party. >> by -- by have been hardened by the conduct of this convention. you have argued and disagreed because as democrats to care and do care deeply. but you have disagreed and argued without calling each other liars and thieves, without spoiling our best traditions. [applause] you have not support our best -- you have not spoiled our best traditions and any struggles for power. you have written as a platform that neither contradicts nor evades. you have restated our party's record. its principles and its purposes and languages that none can mistake. nor am i afraid that the democratic party is old and fat. after 150 years, it has been old for a long time. it will never be indolent as long as it looks forward and not back. as long as it commands the young -- the allegiance of the young and the hopeful during the dreams and see the visions of a better america and a better world. you will see many people express concern about the continuation of one party in power for 20 years. i don't to be little this attitude. but change for the sake of change has no absolute merit in itself. the people are wise -- wiser than the republicans think. the democratic party is the people's party. not the labor party. not the employers party. and not the farmer's party. it is the party of nobody because it is the party of everybody. -- it is the party of no one because it is the party of everyone. [applause] >> i think adlai stevenson's contest tradition to everybody -- contribution to the country -- he hoped campaigns would educate people and he succeeded. he succeeded in teaching all of us that politics was something all of the should be involved i -- all of us should be at involved in. i recently that the governor of indiana mitch daniels. i said, i am sorry you are not running for the presidency. he said, why do you say that? i know you are a democrat. i said i learned from my boss adlai stevenson that the best people in both parties should run, not the worst people. i believe that. i think adlai stevenson taught that to all of us. i think that is a legacy to be extremely grateful for. his contribution is enduring today. >> i think historically he is a bridge between the new deal and the new frontier. he holds the banner of liberalism in the 1950's -- a difficult era. it is an interesting brand of liberalism. he believes in american exceptional was on every bit as -- american exceptional isn't every bit as many of the right to do today. it was an exceptional was some debt was about ideas and ideals. it was leading by example. it was not an exception allows ism some enforced' by military force. he brought a whole generation of young people who were inspired by his words, his example, his approach, his very unorthodox approach to politics. >> we only have a few minutes left. carrie joe from minnesota, we want to hear from you. >> in 1952, i was 13 years old. i was privileged to meet adlai stevenson. he came to the hotel where my mom and dad owned the hotel. i was privileged to wait tables on him. we kids grew up at the hotel. after meeting him, i admired him the rest of my life. i am now 72-years old. i am still just so admiringly this wonderful democratic person. i am so thrilled that he was a man of morality and he was a band that fought for the working people. we need more adlai stevensons in this world right now. i am just so happy that i met him. >> thank you for that call. let's let you talk to an adlai stevenson. senator? >> the question we are left with is, is an adlai stevenson possible today in this money drenched, corrupt, dysfunctional politics? would he even compete? could he compete for president of the united states going from stand it to stand, raising money for jingles on television, the half-hour blocks of time would be impossible. i am not sure he would be possible today, lead and -- let alone a franklin roosevelt. it would not have been physically possible for him. that is why we have created the stevenson center to try to address these systemic weaknesses that might make an adlai stevenson possible. we try as i do in my book to recall all of these lawyers and -- of these values, this history that created this country and contrast them with our politics today. can a politics as corrupt as ours be expected to purify? reform itself? i think that is the issue we are left with. i don't worry about the american people. i have enormous faith in the american people. we are left with a process that represents everybody else. >> senator stevenson, if you have to go to a store or show your name, do people react? >> some of the old folks -- i was in the store. i was in a store the other day and i saw a young woman looking at my credit card. she was looking at my name. i said, is that name familiar to you? she said, no, but it is cool. i think we are forgotten. i think our politics are largely forgotten as well. this has been a wonderful program to be able to recall other politics. -- another politics, another american. >> please go ahead with your question or comment. >> i would like to ask the group to reflect on an event late in the governor's life. i recently reviewed several hours of the events of november 22, 1963. throughout that afternoon walter cronkite continuously referred to adlai stevenson visiting dallas a few weeks earlier and being accosted and warning the president not to go there. i researched that and it seemed an airport event -- a woman struck governor stevenson over the head with a placard. it seemed a little bit more than that. i'm wondering if the panel can reflect on that. any regrets from the governor not stressing the -- >> you talked about this earlier. >> very briefly. he had gone to dallas for a united nation event and had been confronted by some angry people including the woman with a sign. i think he was spat upon and he was struck. he left with a vivid sense of potential dangers that the president might encounter. >> did he call the president and warn him, or was that just a thought? >> i don't know the answer to that. i am sorry. >> senator stevenson, you know the answer? >> my recollection is -- somebody said he was asked if he wanted this woman prosecuted. he said, no, i want her educated. my recollection is that he did not warn the white house. he deeply, deeply regretted it afterwards that he had not. i am sure had he called and described this experience it would have had no effect. he felt very guilty for not having done more or anything to try to prevent the president from going to dallas. >> we have time for one more call. i want you to think about, what have we not talked about tonight that we needed to bring out. think about that. we will take this call from philip in fort worth, texas. >> good evening. this is one of the great series that c-span has done. i appreciate it. i grew up in the 1960 election -- i was 12 years old. i was just becoming politically aware. i grew up during the 1950's. while i am a conservative and have always been so, i doubt mr. stephenson and i would have agreed on much, i have been exposed to his speeches, his rhetoric, and a lot of things he said. i am of the opinion that he is one of the last really great political speechmakers in our age. we were speaking a moment ago about jingles and things like that. i saw him making the speech, he was taking some of it from his notes in the pre teleprompter days. it was not coming off of the paper. he knew what he was saying. it was coming from his heart. i always admired his speechmaking abilities. i just don't see that in our political process today. he had something to say. he took a little time to say it at times. he was a man who knew what he wanted to say and said it well. >> he took great effort in those speeches. he worked on those speeches himself hour after hour. he was criticized by politicians for spending so much time on the speeches. in some ways, that is his legacy. as we wind up the program, >> as we wind up the program, i have to say one of the biggest surprises in my life was when he died so suddenly. they called to tell me that he and i were co executors' of his will. that was to me a very touching thing of our relationship. but i think as we wind up program, even though he did not win, he won the hearts of the millions of americans and a great place in history. he raised the standards. >> the thing i wanted to ask senator stevenson, at the end of his life, it has become almost folk art that embassador stevenson was seriously contemplating resigning from the united nations, and courage to do so by his liberal friends -- encouraged to do so by his liberal friends who were opposed to lbj's policies. i was wondering what his sense was of his dad's intent. >> yes, i think these labels can be very misleading. used to call my father conservative. what he had was integrity. he was a creature of reason. we're not really right, left, we were for the country, products of the enlightenment ideology. but to your point, i did hear from a very, very, very close friend that he was planning to resign from the united nations at the end of the year, largely because he was very uncomfortable advocating policies he did not support, and by that i mean the vietnam. he, of course, died in june of 1965, july of 1965, before a could resign, but i think he was planning to resign, quietly, no protest. that would not be his way at all. but because he cannot really continue to advocate policies he could not support. >> that will have to be the last word. adlai stevenson ii is buried in bloomington, illinois. adlai stevenson iii, thank you for joining us. this has ben "the contenders." >> i say the people trust their good sense, fortitude, faith. trust them with the great decisions. i say it is time to take this government away from men who only know how to count, and turn it back to men and women who care. >> "the contenders" returns live next friday. we will be at the goldwater institute in phoenix to talk about the presidential campaign of barry goldwater. that is live at 8:00 p.m. eastern, through december 9, on c-span. watch tonight's program on adlai stevenson again at 10:30 a.m. eastern. for more information, go to our website, c-span.org. you'll find a schedule, biographies, speeches, and historians appraisals. >> this is the formal part, going out for declaration of candidacy which have been completed, except for your signature. >> all we need is the signature on that. you got that. >> and this is the slogan or, you may want to leave this. we do this every four years. >> well, you have a great secretary of state. we appreciate your leadership. it is a responsibility and honor, which new hampshire richly deserves. i am happy part of the process and put my name on this paper. i am hoping that this time it will take. >> the new hampshire primary is now set for january 10. follow campaign 2012 online, with the c-span video library. click on the tab to access the candidates and events, all searchable, share rubble, and free. >> i think reading the right books is helpful. but reading the wrong book can be educational as well. it is like a bad movie. it is good to be -- it is good to see what can be done wrong. >> stacy schiff has won a pulitzer prize and has spent time at simon and schuster. >> i think it is good for exciting new authors to publish. there should be hope for what has yet to be done. >> that is sunday night. >> the economy added 80,000 new jobs and the unemployment rate dropped to 9% in october, according to new numbers this morning. next, a look at those numbers with kevin brady and keith all. this is almost one hour. -- kevin brady and keith hall. this is almost one hour. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> let me reopen with a few statements. first of all, chairman casey could not be here. i am pleased to stand in for him this morning. i would like to welcome a commissioner hall and jack taliban who is joining commissioner hopper at the table for the first time today. thank you for being here. he previously served as a commissioner for employment from 1998 to 2011 in other senior positions at the bureau of labor and statistics. we have got several reports including today's employment report which has shown a mixed economic picture. the data are better than a few months ago but not strong enough to bring down the employment -- unemployment rate. the 2.5% increase in gross domestic product was stronger than the growth during the first half of the year, showing movement in the appropriate direction. real disposable income declined in the third quarter indicating that consumers are continuing to feel the pressure of stagnant wages. the manufacturing index of 50.8% marks the 27th consecutive month of expansion in the manufacturing sector. but in the sector, so important, decelerated from september. as today's employment numbers show, a the economic growth is not strong enough to make headway, cutting into the unemployment rate. more than nine quarters into the recovery, unemployment remains at 9%. more than 42% of the unemployed have been out of work for six months or more. we need to move from the discussion of the jobs act to passing legislation that will help create jobs and strengthen the economy. before i turn to the reports, i want to highlight a few actions to bolster the economy. we should provide new incentives for small firms to hire. chairman casey has introduced legislation to create a one year tax credit equal to 20% of the increase in employee wages. we should extend and expand the payroll tax cuts which is set to expire at the end of the year. this will boost demand, and strengthen our economy. we must support our state and local governments which have been forced to lay off hundreds of thousands of workers including teachers and first responders. the house should take up legislation already passed by this legislation to crack down on china's currency manipulation. we need to support manufacturing companies and workers in our country. there are a number of other things we could say but i want to wrap it up and ask mr. brady for a statement. >> commissioner hall, thank you for spending your morning with us as we you review the employment situation. u.s. have the job of bearing bad news. many americans have system -- sought a sustained recovery. we do not shoot the messenger in washington. i would like to begin with hope for our economy is following in anemic growth. its crew and an annual rate of 2.5% in the third quarter. the economy is marginally larger than it was when the recession began december 2007. unfortunately, the outlook looks ripe -- less rosy. the balance of this year and next has been lowered by the fed as well as economic organizations. the turbulence for a potential crisis could precipitate a double dip recession. it is a threat to which could have been afforded at four economic policies from the white house not resulted in a slow recovery. equally troubling is this jobless recovery. after the recession ended, there are 6.4 million fewer jobs than when the recession began. 5 million americans are unemployed. the present policies are not working. by comparison, the reagan expansion which followed a 1981 recession outperformed the obama economy biometrics including economic growth and job creation. the differences the reagan expansion happened in an environment that encouraged americans to work and save. president reagan worked favorably. in contrast economy now confronts policy had wins. every step of the way, president obama and democrats have increased uncertainty. the americans and american businesses face. this has discouraged businesses from making investment that would create millions of jobs and cause a rapid fall in the unemployment rate. instead, they should create a political environment to incentivize people and businesses to invest. then they should get out of the way. this is the first hearing since president obama proposal would require new borrowing from foreign entities, creating debt for future generations of working americans. the stimulus is not paid for. it will add billions more to the national debt and is wrongly focused on tape -- creating taxpayer-funded jobs. the first stimulus failed. we still have 1.3 million fewer american jobs than when the original stimulus began. that is 1.3 fewer americans working than when the stimulus began. and now is enough. americans deserve a fresh start. americans need to grow jobs. private business investment drives the job growth. businesses make investments based on the outlook for the long term. the proposal seeks to spur investment with temporary reductions and does not encourage businesses to increase their investments. rather than taking more, our nation craves a simple tax code that increases the incentives for americans to work and save and to invest. this requires a permanent reduction of both capital -- it should help and not hinder american businesses who wants to invest. as i have proposed, washington should lower the tax date and allow firms competing successfully overseas to bring home their profits better stranded abroad so they can invest in america. new expansions and financial stability. repatriation is be free market stimulus of nearly one trillion dollars that will create up to 3 million jobs, increase federal tax revenue, and boost the economy between 1% and 4%. that is the stimulus we can get a high. i urge president obama to join republicans in supporting a bipartisan tax reform their results in a permanent reduction in the tax rate. i have seen the benefit of such a plan. for senator kennedy and then reagan. they trusted the american people. they put their faith in the marketplace which is nothing more than the judgment of the american people as to where to invest. this fuelled the economic booms of the 1960's and 1980's. they spawned a new industries and kept our nation first in research and development, president obama has a real chance to be a game changer. all he need do is follow his presence at -- price -- predecessors. work ready and willing to to create real jobs along the main streets across america. i look forward to hearing your testimony. >> commissioner hall, and thank you a very much. it collects, processes, and disseminates data to the american public. other federal agencies, state and local governments and labor. doctor hall served as chief economist for the white house council of economic divisors for two years under george w. bush. he was also the chief economist for the department of commerce. he also spent 10 years at the u.s. international trade commission. he received his degree from the university of virginia, and his ph.d. in economics from purdue university. >> thank you. put that thing closer to your -- yeah. put it -- [no audio] do the best you can. [inaudible] [inaudible] -- and in management consulting services. employment continued to trend up over the month. since the recent flow, the industry has added 344,000 jobs. health-care employment edged up in october following a gain of 45,000. the increase of 29,000 was in line with the recent trend. construction employment was down by 20,000 in october of setting a gain in the prior month. other industries changed in october. the government continue to trend down. state government lost 16,000 jobs over the month. employment in state and local governments have fallen since the second half of 2008. turning now to measures of our survey, the unemployment rate was unchanged at 9%. the jobless rate has held from 9% since april. in october, there were 13.9 million unemployed persons. little changed from the prior month. the number of persons jobless for 27 weeks declined to 5.9 million or 42% of the unemployed. there we go. i knew there must be a switch. the ratio at 58.4% was little changed. those working part-time for economic reasons fell to 8.9 million. the labor force participation and 64% was unchanged over the month. in 2011, the participation rate was at 54%. outside the labour force, people looking for work, the number of discouraged workers was down from 1.2000001 year earlier. non-farm payroll employment continue to trend up. the unemployment rate was little changed. my colleagues an ironclad to answer your questions. >> anything else? >> how would you characterize the state of the labour market today? >> the first thing -- there is continued job growth. since the labor market trough in february 2010, we have had continuous growth if you take out the temporary effects of the consensus workers being hired and fired. we have had steady growth. it has not been strong. my best characterization is that we seem to be growing at about 125,000 a month. that is growth but it is not enough to start making headway. it is close to keeping up with the population which means it is not strong enough to start lowering the unemployment rate. >> as we know, prior to losing jobs, the manufacturing sector had added jobs for nine straight months and has been a source of strength for the recovery. in your view, how important is the manufacturing sector to employment in other sectors? why'd you believe the growth has slowed or stopped in recent months in manufacturing? is it typical to see strong growth in a couple of months where there is no growth and then a resumption of the earlier? >> the manufacturing sector has strong links to other sectors. in particular, if you look at wholesale trade, management of companies, services to businesses, a truck transportation, those are probably the top industries related to manufacturing. this importance goes beyond manufacturing. i am not sure i can tell you why growth has stopped. it did start to pick up again this month. i think the more remarkable thing is that it has been growing at all. job loss in manufacturing has not recovered at all. the fact that we have had some growth is encouraging. in terms of the fluctuation of growth, that is not uncommon. in any industry. i think what you're seeing is some variation in the growth. it is not strong but it is consistent. >> the fact of the matter is the growth is slow. it is that 9%. there are things i could be done, that should be done to try to stimulate the economy. if you look at different sectors, we are now more than two years into the recovery. unemployment is too high. during the recession, construction and manufacturing were hard hit while education and health services added jobs throughout the recession in every month but one, march. in the past year, what are the sectors that face weakness in employment? have any showed a new strength in the past year? >> government employment. it has dropped over 300,000 jobs, split between state and local government. a number of other industries have had little growth or a little job loss. for example, utilities, information services, construction and other services. those are all industries that have had flat over the past year. the industries with the biggest growth, professional and business services. education and health services as you mentioned. that has grown by 400,000. then in places like manufacturing, a couple hundred jobs. the leisure and hospitality. the strong growth is not widespread but a number of industries have had -- we are having a little growth and a couple of industries. >> thank you. >> thank you, mr. chairman. if you're one of the americans out of work, today's numbers are disheartening. the commissioner -- get this rate of 80,000, how long would it take for us to return to the unemployment level before the recession? >> never. to keep up with population growth, you probably need 130,000 jobs. you're not even keeping up with population. over a long time, you might even see it edged back up. >> he made comments where we are averaging less than the 130,000. if we look at the past 12 months, the answer would still be we are never in going to get back to the point before the recession. >> that is right. >> can i ask you about the number of workers in the workforce? it has hurt his -- hit 3-year lows. -- 30-year lows. to expect that to continue? thend that's one of indicators of restoring the health economy? >> i would not want to speculate about -- it is a valid point. the labor force is probably 4 million below what would be under normal times. to get growth, we're going to have to see confidence in the economy. we need to see the labor force start to grow -- grow again. >> i know the votes are coming, i would like to cut my time short. >> i always like to start with the good news. what are the bright spots in the report today? >> we do have a job growth and a few industries. we have manufacturing adding jobs, retail adding jobs, education, leisure, hospitality. we have had a pickup and temporary help services. that very often as a leading indicator of a pickup in job growth, and for a little while, but job growth in temporary health services flattened out. that is good news. the unemployment rate was essentially unchanged, but it did move down a little bit. put a lot ofe i stock into that because it is a small change, but that could be encouraging sign. >> this recession in some way has been characterized as a man's recession because of the day losses in manufacturing and construction. i am worried about how these employment gains for women during this recovery are doing, especially due to the losses in state and local government, which you mentioned. can you tell me how women are faring in the past two years during this recession? if you have the numbers, fine, if not, if he can get us the numbers. >> i can get you the numbers, but i can characterize it. this has been termed a man's recession, but women did lose a significant number of jobs, and that does not always happen. the last couple recessions, the employment by women did not go down much. the other end of that, in the recovery so far, it has been mostly men and the recovery, very few women re-employed in the recovery so far, for exactly the reason that you cite. women are generally over represented in government, particularly local government, and they have strong representation in financial activities and that has not recovered. >> it has also been characterized as the credit recession. how is this different from other recessions? did other recessions have problems with access to credit? >> i think it is fair to say that the real depth of this recession, the life, has been very deep and long, due in large part to the credit markets. that is the way it appears to me. it that is what probably makes it a great recession has been the credit markets. >> did others have problems with access to credit? >> not to the extent this has. >> and what would he said the cause was of this recession? >> i think in the early stages, it was what you might call a wealth effect. the people lost housing value and wealth, and that started to cause consumer demand to drop off, but it really got bad when the credit market locked up. once the credit markets locked up and businesses started having problems getting loans. >> said the financial crisis. >> yes. >> ok, thank you. >> we will take about five minutes for a vote on the floor. you have time to stay here a little while? >> sure, absolutely. >> ok, thank you very much. >> thank you very much for waiting for us. that session of votes is over, but there is a new session coming up shortly. we want to thank you very much. , he hasow to aske interesting questions. >> have questions. i don't know if they're interesting or not. thank you. commissioner hall, there's a lot of discussion about what life would have been like with or without whatever it is that we do. is it possible to estimate what the unemployment rate would have been without the stimulus program? >> generally what we do is reaction based. we are doing is trying to give the best picture for the economy is. our surveys are not really designed to give reasons for things from people, so there is really no way for us to collect data on what would have been without the stimulus. >> the cbo recently put out a report that said the unemployment rate would have been between three points to 12 point higher than what it is now. >> by know of the methodology they used. >> is it sound? >> it is sound in the sense that it is using a common methodology. what they are essentially doing is they're taking estimates of the impact things have had in the past, government spending has had in the past, and applying it to the current situation, doing it that way. the difficulty is that as a model estimate and it really is much based on the assumptions and views of how the economy works. while the methodology is fairly standard, it is not really giving anything at like what we give with the employment numbers. >> if you take their numbers -- on% this morning? >> yes. >> so there say it would be 9.4%-10.2%. are there any set of circumstances or reasonable assumptions that anyone could say the unemployment rate would be 15% but for the stimulus program? is there any reasonable analysis that you would get to that number? >> i don't know. i don't want to characterize that. it is making assumptions that the economy was going to get a lot worse than it did, a lot worse than anybody forecast ted. in that sense, it is a stretch. >> have you seen any scientific or intellectually backed studies that justify a claim that it would have been justified? >> is similar to what the cbo did, with a model and assumptions about what they believe would be the typical effect of government spending. >> have you seen any reputable studies which would lead you to believe or that show that the unemployment rate today would be 15% but for the stimulus program? >> no, but i have not looked. it was the cbo estimate that? >> no, that was mrs. pelosi's office this morning. >> i have no idea. >> you have never heard of any study that would say that unemployment would be 50%? the real're focused on data. >> i am focused on the real data as well. i am just wondering if this had anything to do with real daddy. -- with that with real data. its outlook does not. -- it sounds like it does not. [no audio] >> we understand there are a lot of different theories as to why the labor market has been slow to recover. some point to the economic growth, some say is the economic uncertainty. others say there is too much regulation. i saw a piece recently which referenced data on why business es carry out mass layoffs. interestingly enough, government regulation was listed as a reason. just 0.2% of the time the first half of 2011, just 8.2% of the time between 2010 and 2009. by contrast, lack of demand in particular was given as the reason for 29.7% of the layoffs, 30.6% in 2010, 39.1% in 2009. so other surveys by small spills -- small business groups get similar results. i am wondering, have you seen any data to suggest that regulation is interfering with hiring? >> i am not sure our data addresses that. we collect the data if. we did not do a lot of things that would tell us why things happened. the study you are referring to it is based on the mass layoffs statistics program, and what we do is any time there are 50 unemployment claims over five weeks, we actually call that establishment and verify they've laid off 50 or more workers than a month. we defined that as a mass layoff. once we identify, was sent a questionnaire and ask why. the data you are quoting is from this program. with mass layoffs, we had about 18 mass layoffs in 2010. at some of them cited government regulation as the reason. while that is true and that does give insight, something to keep in mind, it is only talking about mass layoff events. smaller events would not be captured there and there would be no effect of regulation on holding back job growth or something like that. this gives information. it is sort of limited. other than that, i did not think we have a lot that informs you about regulation or its impact on employment. >> so, nice to have you back. please. >> thank you. commissioner hall, you were talking a moment ago about the manufacturing sector and beginning to see some uptick and influence of other sectors on the manufacturing sector. i am particularly interested in what is broadly characterized in mining, including oil field expansions, and some of the bright spots in the country are areas where domestic production of oil and natural gas has really come forward in a big way, literally in the last decade. do you have any thoughts out about the shell in north dakota, the barnett shell where i live, the effect the development of these areas has had a not just on the mining sector but the manufacturing sector? >> i do not know a lot about the specifics. i can tell you that the mining sector has been somewhat recessionproof. but they continue to have job growth in mining through the recession, and this month we had about 5000 jobs in mining. it is not a big sector, not a lot of employment, but it has been supporting employment. in places like north dakota, they have the worst unemployment rate in the country, and that seems to be largely based on growth in mining employment. >> there are concerns about doing it properly and having all of the necessary environmental controls, and i don't disagree, but i will tell you in north texas, where there barnett shale is, we found out about the recession a year after it started. it was probably a year later before it came into that part of texas that there was a problem. i now think the entire economy can recover on the strength of this one sector, but i agree that the numbers may be small, but i am certainly concerned of some of things i am seeing happen on the regulatory side happen that could be damaging. i think this has to be part of our recovery. last month, i didn't economic development summit. we had some business owners. we actually had the president of the dallas reserve bank talk to us. it it was fairly revealing, both from dr. fisher -- those with the capacity to hire american workers, small-business as well as large, or not mobilize, not because they do not wish to grow or because they cannot access cheap and available credit, but they simply cannot budget or manage for the uncertainty of fiscal and regulatory pulsate -- fiscal and regulatory policy. is that a statement that you would agree with? >> i would like to not comment on that sort of thing. >> ok, i will, then. i think he is right on the mark. i think the bigger question up here, we are receiving numbers and the numbers today look better than they have perhaps in previous months, but by your own admission, at this rate of growth, to get back to pre-2008 levels, we're not going to get there. and three years into this administration, continuing to follow the trajectory, we do not get back to pre recession levels. i had some small business owners as part of that summit, and a tighthat kept talking about regulations. it is no great surprise that they are hunkered down because they did not know what the future will bring. i hope when we have these physicists in the future we have good news, but honestly i think we have mourned things to do on the regulatory end here. >> he mentioned this rate of 80,000 jobs, we literally will never get back to pre recession levels. don't we need about a quarter million jobs per month to move down the unemployment rate, and then it will take a number of years, roughly two, three years at that heightened rate to really start to bring this down? >> i like the number of about a quarter million jobs to make headway. even at that rate, it would be more than three years. it may be longer than that. >> i want the economy to recover. i think the obama economy has been disheartening to people. we have to have a fresh start. recently, the senate majority leader harry reid made the comment that jobs on main street are doing fine, it is the government jobs he is worried about. but i looked at your number's the past three years since the recession began and it appears we have lost more than 4 million jobs along main street and have lost a little less than 700,000 in government jobs. we have a chart that shows the difference. obviously, the private sector job loss has been considerably greater than that within government. that sort of fact checking those comments, is it accurate to say that in this recession, public- sector jobs will be hit harder by the downturn than the private sector jobs? >> no. i would say the private sector has been hit very hard in this recession. >> as we go forward, looking for a way to get out of this obama economy, is it not private sector job growth that has traditionally brought us back into a more stable economy and create a sustainable recovery that we are all hoping for? >> absolutely, the private sector has most of the jobs. that is true. if you want to look at the help of the economy, look at the private sector job growth. >> thank you. we look forward to the day that you bring us good news. >> if follow up on what the vice chairman just said. a quarter million jobs per month is the goal, i think we all agree that more is better, that is sort of the target. how many times since january of 2009 as the economy created more than a quarter million jobs per month? i have only one in front of me, the spring of 2010, but my dad does not go back to the beginning of this administration. how many times has the economy created more than a quarter million jobs in a month? >> i see two months, but to be honest, both of those months were one the census was hiring temporary workers. if you take those out, i am not sure that we had any months created at a quarter million jobs. >> since january, 2009, since the obama administration has taken over, we have never generated a quarter million jobs on a permanent basis, making exceptions for the census? >> i do not have the exact numbers in front of me, but i believe that is correct. >> we just had interesting testimony yesterday in the oversight and regulation committee, following on what you said, that there is 12% more federal workers since the recession began. there are 14.8% more, to under 75,000 more workers and the executive branch, 100,000 more civilian workers and the department of defense since the recession began. i was glad to hear you say that you think that the private sector has taken it on the chin more. there are more federal workers then when this began. >> thank you. >> i will yield the balance of my time. [inaudible] >> correct. >> [inaudible] >> no, those are in government jobs. >> [inaudible] >> that is a good question. my recollection is it has been rough. if it slowed down, i don't think it slowed down by much. i have to get back to you on that. i think it has been pretty much pre-recession growth. ok, sure. [inaudible] >> ok. >> [inaudible] >> that is correct, the expansion between the recession's this time was not very strong. we must have once or twice, but if we did, it was not by much, that is correct. >> [inaudible] [inaudible] >> not directly, but that is a good proxy, and that is by education. the education levels are really andsely related to income wages. the higher the education, the better off you are. people with less than a high- school diploma, their current unemployment rate is 13.8%. it is much higher than people would say with a bachelor degree, off 4.4%. >> [inaudible] we really appreciated, thank you very much. >> thank you. >> no response to the october jobs numbers by house republican leaders. this is about 10 minutes. >> good morning, everyone. today's report understood -- underscores the need for immediate action on the job skills that are gathering dust from the democrats-controlled senate. there is not free any reason for senate democrats to delay action any longer. the house has been working all year on our plans for american job creators. it is time for the senate to do their work. all of those bills have bipartisan report. some are even backed by the obama administration. i urge the president to call on democrats to bring these bills to a vote. as long as they are stalled, i think it is unacceptable for the white house to be anything less than 100% engaged in the legislative process. >> once again, we see that the unemployment figures in this country are way too high. unemployment at 9% is unacceptable. that is why we're here trying to tell harry reid, join us and bring these measures to the floor for a vote. if they do not pass, fine. what is harry reid and the democrats are afraid of as far as our agenda? the bills on our agenda are real concerns and the address real issues that small business people are facing. i was in my district and i held in the event. the kinds of issues we raised our the issues that these bills confront. just yesterday, we had four bills having to do with access to financing for small businesses. that is what small businesses want. what small businesses want is less red tape in washington so they can continue to invest and create jobs. allow these votes, these bills so that people can see that washington is working for their interests. >> i took my investment in the market, took the risk on my credit card. today, whether i could do that, i could not. if you watch what has transpired. the card continues to grow. unfortunately the backside is growing because the senate is not acting. we added four more bills to help small businesses get capital. bipartisan bills. yesterday, they had more than 400 votes in support of it. i don't know what harry reid and means to allow it to come to the floor. the american people cannot wait. america's frustrated with what is happening. >> unfortunately in the obama economy, we have seen our 28 month of unemployment at 9% or higher. in the obama economy, one in seven continue on food stamps. we had a study released this week from the world bank about doing business in the obama economy. america has dropped from third in 2007 to 13 in starting a business. in the obama economy, the federal reserve announced a downgrade for their economic outlook for growth and employment. we cannot wait. this is not about the personality or politics. it is about his policies. they do not worse. -- work. house republicans have a plan for job creators. unfortunately, all of these bills continue to stack up like cordwood in the democratic- controlled senate. a lot of our bills have to do with easing the regulatory burden on small business. it is not just me saying it. we hear from our constituents. i heard from don last week. talking about the health care plan he said, "we are giving up this part of our business due to federal regulations. this is one example of how obsessive regulation is stifling business. only one person will lose his job -- that is a large layoffs and a small company. the bottom line, the federal government is regulating small business out of business. mr. president, senator reid, we cannot wait. work with us together on our plan for america's job creators. >> we continue to hear about the 14 million americans out of work. if you started the line in washington, it would stick -- extend all the way to maine. 9 million americans would like to have a full-time job or have dropped out of the workplace. while the president is out campaigning, the house has been busy working on our forgotten 15 and other bills that would help the economy going. one of our priorities has been to reduce the regulatory burden on our businesses. we have the highest corporate tax rate in the world. the average small business owner will spend double that amount in complying with regulations. this report today underscores that we can and must do better. >> a couple of questions. >> i have a conference to run. >> yesterday john boehner said he was nervous. should you be nervous? >> you can asking that question. i have just left a meeting with senator murray and we continue to negotiate. when we have something, you will hear something soon. i have not changed my position from day one. i have high hopes and tempered expectations. >> you talk about the need to find common ground. the debate led to a decline of consumer confidence. given the schedule for the rest of the year, you think that the failures will cost additional problems for consumer confidence? >> i think we have to continue to try to find common ground that will help our economy and get the people back to work. when you look at our plan, the 20 bills we of passed it will help job creation, almost all of those passed with bipartisan support. many of them backed by the obama administration. it is time to find common ground to do with the american people expect. >> you are saying, why don't you pass the bill? there is another bill that they want things. this looks like a shoving match between the sides. why not say, [unintelligible] >> the house has acted in a bipartisan session 20 times. all we are asking for is some cooperation with the other side of the capital. >> they have problems -- >> if you look at the vote yesterday, over four hundred votes for these bills that will help small businesses have access to capital. our founders gave us this giant body in the middle of our government called the congress. 535 people. it is hard for a ready to get along. on the house side, we have worked together to try to do the right thing. we will continue to do that. >> tomorrow on washington journal, the carnegie endowment on dg 20 meeting in france. then, conservative filmmaker james o'keefe on the evolving role of social media. after that, governor, executive senior reporter kellie lunniy on legislation to reduce the federal workforce. live at 7:00 a.m. eastern on c- span. >> saturday, republican presidential candidates are mccain and new gingrich will debate issues facing the u.s.. live coverage beginning at 8:00 p.m. eastern on c-span, c-span radio, and c-span.org. >> president obama spoke today at the closing of the g-20 summit in france about the u.s. economy. the president and other g-20 leaders have been meeting for an action plan on the arizona. the president also discussed newly released u.s. unemployment figures and promoted his jobs bill. this is about 25 minutes. >> good afternoon, everybody. i want to begin by thanking my friend president sarkozy. i want to thank the people of cannes. over the past two years, we have run together to rescue the global economy, to avert another depression, and to put this on the path to recovery. we came with no illusions. the recovery has been fragile. since our last meeting, we have experienced a number of new shocks. disruptions in oil supplies, the tragic tsunami in japan, the financial crisis in europe. as a result, advanced economies are growing and creating jobs, but not nearly fast enough. emerging economies have started to slow. global demand is weakening. all around the world, hundreds of millions of people are unemployed or underemployed. put simply, the world faces challenges that put our economic recovery at risk. the central question coming intocannes was this. can the world's largest economy confront this challenge squarely? after two days a very substantive discussions, we have come together and made important progress to put our economic recoveries on a firmer footing. with respect to europe, we came to cannes -- events in greece over the past 24 hours have underscored the importance of implementing the plan. having heard from our european partners over the past two days, i am confident that europe has the capacity to meet this challenge. i know it is not easy, but what is absolutely critical, and what the world looks for in moment such as this, it is action. that is how we confronted our financial crisis in the united states, having our banks submit to stress tests. none of that was easy and it was not always popular. we did what was necessary to address the crisis, but ourselves on a stronger footing, and to the address to the global economy. that is the challenge that europe now faces. make no mistake, there is more hard work ahead and more difficult choices to make. our european partners have laid a foundation on which to build. it has all the elements standard for success. a credible firewall to prevent the crisis from spreading, strengthening european banks, and confronting the structural issues that are at the heart of the current crisis. we have moved the ball forward. europe remains on track to implement a sustainable path for greece. italy has agreed to a monitoring program with the imf. tools of been identified that will better enable the world to support european action. european finance ministers will carry this work forward next week. all of us have an enormous interest in europe's success and all of us will be affected if europe is not growing. that certainly includes the united states. if europe is not growing, it is harder for us to do what we need to do for the american people, creating jobs, lifting up the middle class, and putting our fiscal house in order. the united states will continue to do our part to support our european partners. we agree to stay focused on jobs and growth with an action plan in which each nation does its part. and the united states, we recognize as the world's largest economy, the most important thing we can do is to get our own economy growing faster. back home, we are fighting for the american jobs act, which will put people back to work. we also made progress on our rebalancing agenda. countries with large surpluses and export oriented countries agreed to take additional steps to support growth and boost demand in their own countries. in addition, we welcomed china's determination to increase the flexibility of the rmb. it will be a critical step in boosting growth. finally, we made progress across a range of challenges to our shared prosperity. following are reforms in the united states, the g20 adopted high level financial reforms to grant a crisis in the future. we agree to keep phasing out of fossil fuel subsidies. even as our country's work to save lives of from the terrible famine in the horn of africa, we agreed on the need to mobilize new resources to support the development that lips nations out of poverty. i want to thank president sarkozy and my fellow leaders for their partnership. with that, let me take a few questions. i will start with ap. >> new jobless numbers today back in the states, you are on a pace to face the voters of the highest unemployment rate of any post-war president. does that make you vulnerable? given that you have just witnessed the difficulties of averting economic problems beyond your control, which state the think the economy will be and when you face reelection? >> i have to tell you, the least of my concerns at the moment is the politics of the year from now. i am worried about putting people back to work right now because those folks are hurting. the u.s. economy is underperforming. everything that we're doing here at the g20 mirrors our efforts back home. how do we boost growth? how do we shrink our deficits? how do we make sure that our workers are getting the skills and training they need to compete in a global economy? not only does the american jobs act to answer some of the needs for jobs now, but it will also lay the foundation for future growth through investments in infrastructure, for example. my hope is that the folks back home, including those in the united states senate and house of representatives, when a look at today's jobs numbers, they will think twice before they vote no again on the only proposal out there right now that economists say would make a dent in unemployment right now. there is no excuse for inaction. that is true globally, and true that, as well. i will keep on pushing it regardless of what the politics are. >> thank you, mr. president. there was some sort of dispute between you and european leaders about how to fund this bill out. you emphasize the fact that tarp was done with u.s. funds. there was not any international involvement. are you confident that the european leaders are going to fund this bailout fund themselves, not looking for handouts from other countries? how hard was a to convince these folks to do stimulus measures? your own stimulus measure is not going anywhere on capitol hill. >> we did not have a long conversation about stimulus measures. we had a discussion on what steps could be taken to continue to spur economic growth. the rebalancing agenda is one way in which we can make a big difference in spurring on global demand. it require some adjustments, some changes in behavior on the part of countries. it does not necessarily involved fiscal stimulus. there was not a dispute with the europeans. they agree with us that to it is important to send a clear signal that the european project is alive and well and they are committed to the euro. they are committed to resolving this crisis. if you talk to european leaders, they are the first ones to say that if that begins, with european leaders arriving at a common course of action. we have seen all the elements for dealing with the price is put in place, and we think those are the right elements. the first is having a solution to the specific problem of greece. although the referendum got a lot of people nervous, the truth is that the general approach, which involved a voluntary reduction on the part of those who hold greek debt, greece continuing of structural change, that is the right recipe. i was encouraged by the fact that despite all the turmoil, even the opposition leader in greece indicated that it is important to move forward on the proposal. the second component is a recapitalization of europe's banks. they have identified that need, and they are resources that need. that is going to be critical to further instill confidence in the markets. the third part of it is creating this fire wall, sending a signal to the markets that europe is going to stand behind the euro. all of the details, the structure, how it operates, are still being worked out. what we were able to do was to give them some ideas, some options. the international community is trying to stand ready to assist and make sure that the overall global economy is cushioned by the gyrations in the market to and the shocks that arise as europe is working this issue through. the european leaders understand that it ultimately, what the markets are looking for is a strong signal from europe that they are standing behind the euro. >> [inaudible] >> what we were saying -- creating additional tools for the imf. that is an important component of providing market's overall confidence in global growth and stability. that is a supplement to the work that is being done in europe. based on my conversations with president sarkozy, chancellor angela merkel, and all the other european leaders, i believe they have that strong commitment to the euro and the european project. >> thank you, mr. president. i am curious what you would say to the americans back home that have watched their 401k's recover. -- recover largely when the bailout seemed a certainty. the greeks it essentially lost what they gained back. are you confident this will actually happen and, if so, will it work? >> if you are talking about the movement of the u.s. stock market, the stock market was down when i first took office about 3000 points lower than it is now. nothing has happened in the last two weeks that would suggest that somehow people's 401k's have been affected the way you described. am i confident that this work? i think there is more work to do. i think there will be ups and downs along the way. i am confident that the key players in europe understand how much of a stake they have in making sure this crisis is resolved. the euro zone remains intact. i think they're going to do what is necessary in order to make that happen. let's recognize how difficult this is. i have sympathy for my european counterparts. we saw how difficult it was for us to save the financial system back in the united states. it did not do wonders for anybody's political standing because people's general attitude is if the financial sector is behaving recklessly or not making the decisions, other folks should not have to suffer for it. you layer on top of that the fact that you are negotiating with multiple parliaments, european parliament, a european commission. there are a lot of institutions here in europe. [laughter] i am not sure weather it was -- whether is was president sarkozy court angela merkel lewis said, a big joke with me that i got a crash course in european politics over the last several days. there're a lot of meetings here in europe as well. trying to coordinate all those different interests is laborious, time consuming. but i think they're going to get there. what is also positive, if there is a silver lining in this whole process, it is the fact that european leaders recognize that there are some structural reforms, institutional modifications, they need to make if europe and the euro zone is to be effective as they wanted to be. i think what this has exposed is that if you have a single currency and you have not worked out all the institutional coordination and relationships between countries, that creates additional vulnerabilities. there is a commitment on the part of european leaders. i think they examined those issues. those are long term. and the short term, they have to make sure they're sending a signal to the markets that they stand behind the euro. if that message is sent, i think this crisis is averted. some of this crisis is psychological. italy is a big country with an enormous industrial base and has had substantial debt for quite some time. the market is feeling skittish right now. that is why prime minister berlusconi is invitation to the imf to certify that the reform plan that could place is one that they will follow its example of the study confidence-building measures that need to take place in order for us to get back on track. >> thank you, mr. president. the world leaders have stressed growth, the importance of growth. it brought back at home has been anemic. 88,000 jobs added. the republicans in congress have made it clear they're going to block your jobs bill because they believed the tax hikes in it for small businesses. at what point do you declare a stalemate to reach common ground? do you feel like you have been an effective leader? >> wherever republicans indicate an interest in doing things that will grow the economy, i am right there with them. they have said passing trade bills was job-creating. those got done. with significant part in partisan support. they suggested we needed to reform our patent laws. that was something that was part of my long term program for economic growth. we've got not done. all those things are nice and they are important, but if we want to grow the economy right now, we have to think bigger. we have to do something bolder. we put forward the american jobs act, which contains ideas that are supported by democrats and republicans. the rebuilding our infrastructure, putting teachers back in the classroom, providing tax breaks to small businesses. you say that the reason they have not voted for them is because they did not want to tax all business. actually, if that is their rationale, it does not fly. the bill that they voted down yesterday, a component of the jobs bill, essentially said, we can create hundreds of thousands of jobs rebuilding our infrastructure and the entire program will be paid for by a tax on people making $1 million a year or more. in the united states, that is about 300,000 people. there are not a lot of small businesses across the country they're making that kind of money. less than 3% of small businesses make more than $250,000 a year. what they have said, we prefer to protect the 300,000 people rather than put hundreds of thousands of people back to work and benefit 300 million americans who are hurting because of low growth. we're going to keep on pushing. there are steps that we can take absent congressional action. the refinancing proposal that we put forward in las vegas is an example of that. helping students with student loans. we will keep on rolling out -- if we're going to do something big to jump-start the economy, congress is going to need to act. in terms of my track record on the economy, here is just a simple way of thinking about it. when i came into office, the u.s. economy had contracted by 9%. the largest contraction since the great depression. a low over a year later, the economy was growing by 4%. it has been growing ever since. is that the enough? absolutely not. we have to do more. as soon as i get to some signal from the congress that they're willing to take their responsibilities seriously, i think we can do more. that is going to require them to break out of the rigid ideological positions they have been taking. the same is true when it comes to deficit reduction. we can solve all our problems, we can grow our economy, put people back to work, reduce our deficit. you get a surprising consensus from economist about how do. from the left and right. it is just a matter of setting politics aside and remembering that the election is one year away. there is no reason why we cannot solve these problems. thank you, everybody. >> now more on the arizona crisis with french president nicolas sarkozy's closing remarks at the g-20 summit. this is about 40 minutes. >> ladies and gentlemen, good afternoon. after today's of discussion, and an atmosphere that was characterized by the need for the international community to be united, we worked both on short-term matters to reduce the scope of the crisis and long term matters to allow the world economy to get back on the road to growth. i would like to share with you in a few words of the three messages of the summit. the first concern is europe. it has done everything to find credible solutions to the crisis. it is essential for europe to arrive united. we've also had the unanimous support of our partners and it seems to me that we has made progress. the first point is a firm attitude on europe and greece. these conditions are now falling into place and we are seeing a consensus emerged in greece. the atmosphere in greece has nothing to do with what we saw the beginning. i would like to welcome the efforts made by italy, who has taken the necessary measures to restore confidence. italy is a country that is absolutely essential to the eurozone. i would like to welcome their decision to call upon the european commission and the imf to certified the results they had obtained on a quarterly basis with results that will be published. those evaluations been, obviously, the public. finally, we made a commitment to strengthen the means of the disposal of the imf, if necessary. we have created the conditions necessary to meet that goal. the imf must play its role as a stalwart against systemic risk. the ministers of finance during their next meeting in february will receive introductions -- instructions to use all the tools necessary to strengthen those ways and means. we have not decided on all sorts of different specific measures, but the orientation is clear. strengthening the means of disposal for the imf. the second message from the g-20 -- we decided to use all the margins maneuver that we have to support growth. the situation is much more complex than was in 2009. there is not a single answer to this problem. washington and london want to have growth stimulation. toronto wants measures for reduction. in cannes, we have a differentiation of situations from one country to another. those countries will use automatic stabilizers and will be ready to take new measures for growth. i am pinking about china and germany. -- and thinking about china and germany. we have come out of the status quo. it gave rise to an opposition between countries on this subject. countries that have substantial external services have committed to stimulating domestic demand and accelerating the flexibility of their exchange rates so as to reduce the accumulation of exchange reserves -- the big economies and have made those commitments. it is an excellent bit of news. the action plan for growth takes full account of the social dimension of globalization. it is the first time the country's indicate there will to set forth a social security platform. it is a commitment to a level of protection that is favorable to growth. if not contradictory to growth. i think this is the first time that an international summit state so clearly this ", stating that social protection is favorable to growth. one last point, strong advances made under the authority of the french share on financial regulations. the financial stability council will publish a list of 29 international banks of systemic importance who will be submitted applications of transparency. the second element will be the publication by the global forum of 11 countries, who we feel to be tax havens. barbados, panama, trinidad. we do not want to have any more tax havens in the world. this is a very clear message. we do not want any more tax havens. the countries which go on being tax havens, with hiding as bank information, it will be excluded from the international community. we have made a lot of progress. we must make more progress. switzerland is not qualified for phase 2 as long as they have not filled in certain gaps that have been identified. systematic publication of each of our summit of the list of countries of not done what they need to do to take themselves off the list of countries that is inadmissible. we have decided no longer tolerate this. in london, three years ago, i had to threaten to leave their room if a list of non cooperative jurisdictions -- we also decided on the reform to make it into a world finance organization. the possibility of agreements with other organizations, the broadening of management, has to be able to implement decisions. on the international monetary system -- this is something we will go on working on for a long time. france set the agenda and that gave rise to all sorts of skeptical commentary. today everyone considers it the project for years to come. we set forth the framework for management of capital flows and capital controls. this is very important and now considered to be unacceptable stabilization measure. there was an error that basically considered -- consisted of saying or thinking about a parallel between freedom of trade and capital controls. and be necessary. it has now been recognized as a possible stabilization measure. also, the review of the special basket which could cause new currency -- i have note satisfaction of china's part of their turn it -- their currency. we will open it up to a new subject, exchange rates, capital flows. things have developed very much indeed. we have a short-term liquidity estimate to face up to a systemic shots. on agriculture, this is the first time it has been on the g- 20 agenda. it is an issue as we did not talk about much before. increased production if necessary to feed the world's population, transparency on agricultural markets. we have considered the regulation of derivative financial markets. there is an agreement in place to fight against market abuses and to give the power to supervisors to avoid a single market player from manipulating prices through disproportionate purchases or sales. we do not consider that we can come away from a summit with the results. innovative financing and an infrastructure -- innovative financing is in the final communique with mentioned explicitly made of financial transaction packs. there is a willingness in certain countries to take out innovative finance. there is now a certain number of countries who have joined france's fight. when france began this fight, france was entirely alone. today, but besides france, the european commission, germany, spain, argentina, the african union, ethiopia, south africa, the secretary general of the united nations, and brazil told us how interested they were of this way of proceeding. they are in favor of an attack on financial transactions. the g-20 recognizes the initiative is made by certain countries to tax the financial sector for different reasons, including a tax on financial transactions to support development. you cannot imagine a combat that such a tax represents. let's be clear about this. france considers that we want not to miss our rendezvous with development. we have to be innovative given the difficult situation in which all countries by themselves. in the report, there are certain aspects of an innovative financing. we consider morally speaking that it is indispensable for the people of the world to know that financial players that have led the world through the terrible situation that we are all aware of be obliged to contribute financially to repairing the harm they have caused. that is the goal of the tax on financial transactions. the president of the european commission, the only concrete project on the table at the moment, shows the possibility of such a tax on financial transactions and it will be discussed at the council of ministers at the beginning of next year. france will fight for that tax to become a reality and france considers that waiting pour the rest of the world to adopt such measures is not such a sufficient argument to estimate it today. clearly we are going to do everything we can to base ourselves on public opinion in each of our countries so as to write -- as to arrive at that result. i was happy to see how open and and valuable barack obama was on the principle of the contribution of the financial sector to the resolution of the crisis. he went as part 2 -- a has not gone so far as to accept the tax itself, but contributions need to be made by actors of the financial markets to help us out of the crisis. we were absolutely stopped at the outset. now the tax on financial transactions is an element of our debate and i hope it will become a country element implemented in 2012. there is quite a lot left to be done, particularly concerning the earmarking of the money raised by such taxes. when we discussed how we would use the money raised by such a tax, instead of the principle of the tax, we need also to discuss how we will spend the money we might make. france considers that an important share should be earmarked for development. finally, we had a debate on world governance with an excellent report prepared by david cameron. i am open to all of your questions. >> currently, how many countries in the g-20 have committed to come and help the country's of the bureau's own financially to help them exit from the crisis. is it true that you are thinking about ritualizing -- have you moved on in terms of the issue of a permanent secretariat for the g-20 and do you think mexico will achieve that? >> there is an agreement that has been reached to increased results of the imf fund. this is the general agreement that we reach. all countries, developing and emerging countries, have agreed. there is a second agreement, which is how we can work together with a the europeans in order to extend the capacity of the european fund. what the ministers are going to be working on is the fdr have clearly been identified. this will be the option in february probably. in february and we should have a method and a general agreement from the u.s. and developing countries in terms of the g-20. we will institutionalize the troika. france will be part of that to cut next year. -- will be part of that troika next year. the g-20 and needs to remain a forum for informal dialogue, very free dialogue and we would like to have a strong application from the presidency. we do not want this to be controlled by a secretariat. basically that summarize -- summarizes the debate. there was an excellent. in david cameron's report. it was the only one not agreed on. >> i am from chinese television. in a speech in 2000 a in greece, what would you say about the destiny of greece if there is a change in the greek government? have you also tried to convey your confidence to the potential investors from emerging countries like china, for example, which has decided to put some of its currency in euros? >> i have said everything that needed to be said. there is a complete change in the political atmosphere in greece. what was shocking was not the principle behind the referendum, calling upon the citizens. what was shocking was that none of the partners of greece had been warned of this. secondly, there cannot be a referendum on just one plan. if you talk about the 27th of october plan, you have to do a referendum on other plants as well. the other question is whether greece will belong to the bureau's own. this message has been expressed. it is a message that we wanted to address to the majority in greece. it is up to the greek people to choose their own leaders and choose the policies that need to be implemented. it is not up to us, but we a set the guidelines. it is not something i regret. the confidence of the investors when you invest in a currency, you want that currency's value to increase, not decrease. if you compare the bureau to the other countries in the world, is it going up or down? it is going up those people who have their money in euros has a good deal. that shows confidence in the euro. we will fight to defend europe and the euro. it is not about speculation. nobody will have a final word on this. we have no intention whatsoever to accept this impression. if it does happen it will be because the people decide it. germany and france are completely willing to stick to our objectives. >> after this g-20 summit will you be having meetings for the austerity plan? as one of the non written conclusions that france needs to make rapid savings. are we going to reduce spending? if so, which is spending? are we going to increase revenue? are we going to increase taxes? >> you have just given a lengthy speech. i cannot really answer that. there is -- you know why there is not a meeting on monday. there was not one last week. we did not have a meeting last monday because we were preparing for the g-20 summit. i took this decision with the full agreement of the prime minister. i decided to postpone last week's meeting to this monday. that is all. >> in terms of what you call an austerity plan, perhaps this is something you would like to see, but we will make sure that the budget for france is considerably -- is completely consistent with the announcement from the prime minister when it came to growth. when you talk about the growth of 1.75%, you should aim higher. if you want to be serious about this, you have to make savings. you want to try to increase growth. this is something we have to decide on. what does count, however, is that france follows the path it has decided to take. a 3% deficit by 2013, the 0% deficit by 2015. this is what we have set as the basis for everything. we have respected and kept to these commitments and we will continue to do so. we will take all measures necessary to achieve a vat -- to achieve that. >> there was a summit in brussels. here we are at the g-20 summit. we have to take things step by step, as we say in cannes. >> it is quite sure that you and angela merkle have tried to change governments in italy and greece. how has this faired? once you start the process, will be the outcome of it? >> what i like about your question is it is a very obvious question. if it is obvious, why are you asking it? you have already expressed your commitment, which you have a right to do. i am quite sure you are wrong. very wrong. we did not want to change the government's either in greece or italy. that is not the role we play. that is not my idea of democracy. it is quite clear that in europe and, perhaps -- you come from an island. you come with the subtleties of the european construction. i am sorry to say that. frankly, there are some rules. i do not know why -- there are some rules to be a respected. if we do not abide by these rules -- it is as simple of that. whatever government is in power, we will work with that government. since i have been president, it has been the same condition. we do not choose the governments of other countries. italy, as well, as a prime minister -- berlusconi -- who has presented a plan. we have to democratically respect of that. berlusconi is aware of the uncertainty on the market. the application of this plan has asked the commission and the imf to have a monitoring system in place. why should we create governments? we work with the people in europe. we cannot have a reconciliation if we were to go against all the roles that have been set. we have to work with our citizens and say we are going to lend money to this or that country, but this country has to be -- has to abide by the same rules we impose on our citizens. i do not think we need to be talking about this. we need to bring europe closer to the people. this is the real issue. respect does not mean we are moving at europe further away from the people. >> can you give us the name of the french banks that are on the list of risky banks, a systemic banks? you said there were 29 in total. >> society at generale, credit 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city, firing their guns in the air. families are arriving slashing victory signs out of their air. this is a moment people never thought would come and it developed very quickly again yesterday. it all began with rebels in zawiya decided that zero hour had arrived. they just decided to walk to tripoli and by the thousands people left zhou zawiya and gads troops simply melted away. they decided they have not going to fire on their own people. on a personal note, the reception we've been getting are incredibly warm. people are so excited and they have a new future ahead of them. people came out of their homes, they were giving us food and giving us water. crowded hoisted me up in the air to show how excited they were that this moment has finally arrived. it's not over yet. there is some still fighting in this city. rebels only control about 80% of it. gadhafi's whereabouts are currently unknown. chris. >> richard, an amazing report. thank you. president obama says the future of libya is now in the hoondz of the libyan people. the president issued a statement last night after being briefed by tom advisers. nbc's christen welker joins me live from massachusetts where the president is spending time with his family. kristin, houbl, we have the statement from last night. do we expect more from the white house today? >> hi there, chris. it certainly is possible. we are going to get a briefing from his dpet deputy press secretary sometime this morning. it's possible, though, that if the white house gets some more solid information about what exactly is happening on the ground in libya that we could perhaps hear from president obama, although nothing has been scheduled at this point. we want to make that very clear. and white house officials are not telling us if we will actually hear from the president. so we're all monitoring that situation quite closely. white house officials do say, though, that president obama is getting briefings about this situation around the clock. we was briefed first thing yesterday morning by his counter terrorism adviser, john brennen, and then throughout the day. then he held a conference call with a number of his top advisers at about 9:00 last night, including his chief of staff, bill daily, secretary of defense, several others. right after that call, we got that statement that you mentioned. we want to put up a graphic of a part of it. it says tripoli is slipping from the grasp of a tyrant. the surest way for the bloodshed to end is simple. moammar gadhafi and his regime need to realize their rule has come to an end. he needs to relinquish power once and for all. the united states recognizes the transitional national council as the governing body of libya, so ramping up the pressure on gadhafi to leave and to relinquish his power there. but still, they are monitoring that situation very closely. they're trying to get exact knowledge of what's happening and information is murky, quite frankly, coming out of libya. so if they get confirmation of specifically what is going on there, we could hear from the president himself. back to you. >> how are they handling the juxtaposition? is that anything that they're talking about even not on camera, obviously, but how do they deal with that? >> well, white house officials aren't really talking about that, but a lot of the images that we're getting seem to be managed to some extent, as you know, the first image we got was of the president being briefed by his counter terrorism adviser, john brennen, a really serious image that we got there. then yesterday, we did see him going out with michelle for dinner and that sort of thing. so some lighter images of the president. but i think they are trying to be quite careful, if you will, about what images are being released from this vacation. the optics of this are quite important. the president got a fair amount of criticism for taking this trip in the first place, a lot of republican candidates saying that he shouldn't be taking such a knight nice trip when the white house is struggling so much. the white house has pushed back saying that the office of the presidency travels with mr. obama wherever he goes. they have all the amenities of the white house here in terms of communication tools, trps, so their point is this really is the white house, it's just functioning on martha's vineyard. chris. >> great point. thanks for reporting, kristin. the fall of gadhafi is welcomed news. what does it mean fort president politically? minico, what we think is probably a pretty good moment for the president. and yet, very quickly afterward, john mccain, lindsay graham, who leading voices on foreign policy, i want to read what they have to say. we regret this success was so long in coming due to the failure of the united states to employ the full weight of our air power. not exactly throwing laurels at the feet of this president. >> no. >> is this a victory for president obama? >> sure it is. the white house, as we said, needs some good news. it's not really surprising that mccain, graham, lieberman take this shot. they were to the right of president obama, to the right of congress in wanting intervention much sooner. but this, one big issue here for the president is the fact that the economy remains such a big problem. domestically, we know that just thigh months ago, bin laden was killed. that bounce didn't last very long. >> amazing. >> three months ago. >> right. >> people were proclaiming he was a shoe in for re-election. >> and now people are saying there's no chance he's going to be re-elected, right? so the truth is probably always somewhere in the middle. but the thing is, and look, his supporters are not really celebrateding this. one supporter said to me, look, this is a notch in his belt. it's another notch, but look, with the economy being what it is, that is going to determine what happens next year. >> and the president acknowledges that himself. the president onlies the focus is still on the economy. >> you've got an unemployment rate that is still too high and an economy that is not grog fast enough. for me to argue, look, we've actually made the right decisions, things would have been much worse had we not made those decisions, that is not that satisfying if you don't have a job right now. and i understand that. and i expect to be judged a year from now on whether or not things have continued to get better. >> so that sounds like it's the economy stupid, essentially. the famous james cargo line from the '92 campaign. let's put libya aside for a minute. what can the president do on the economy? i wrote this weekend, i talked to a burn of democratic strategists. everybody offered basically different advice on how we should handle it. what's the best approach, do we have any sense? >> i think if you and i knew the answer to that, we wouldn't necessarily be sitting here. i think it's a difficult thing and i think like in sports sometimes, coaches get a lot of maybe too much of the plame or too much of the credit for things. we know presidents affect farm policy and judges directly. the economy is a little tougher, especially with a global economy. how many times do we have to hear, well, you know, it's really europe that's affected by the downturn. there are a lot of things this president is going to try to push for. we have clues over the weekend as to some of the other items as to cutting that payroll tax, maybe a road construction bill. but i think we know that's going to be a steep uphill climb in congress. this is about 2012, this is about politics. and like a candidate putting out a white paper, a president needs to run on something and run against something. congress, john boehner, not being willing to compromise, that's the argument we're getting here. >> dominica, i always read "first read" first tlieng in the morning. thanks for joining us. >> thank you. gadhafi says he'll fight to the end. where is he? and where ekg do sooem seek asylum? we'll be joined by journalist, author and mid east expert, robin wright. despite victory in libya, president obama has a bigger challenge on his hands, how to fix the economy and how to convince the public he's got the right plan. but first, a look ahead at the president's schedule. he's in martha's vineyard, but it is a working holiday. [ barks ] [ cat meows ] [ woman ] ♪ i just want to be okay ♪ be okay, be okay ♪ i just want to be okay today - ♪ i just want to know today - [ whistles ] ♪ know today, know today - [ cat meows ] - ♪ know that maybe i will be okay ♪ [ chimes ] travelers can help you protect the things you care about... and save money with multi-policy discounts. are you getting the coverage you need... and the discounts you deserve? for an agent or quote, call 800-my-coverage... or visit travelers.com. pnc virtual wallet gathers your spending and saving in one place. credit and debit purchases, checks, bills, and other financial information. it lets you see the details as well as the big financial picture. so you can do more with your money. see what a complete view of your money can do for you at pncvirtualwallet.com. ♪ pnc bank. for the achiever in you. joining us now, a fellow at the u.s. institute of peace and author of the book "rock the casba" robin wright. robin, i'm thrilled you're here. you have sat across the table just like this -- maybe not glass, but you've sat across the table from moammar gadhafi. you have looked into his eyes. what do people out there need to know about him? >> of all the world leaders i've interviewed, he is clearly the most unstable. lately he's seemed as if he's on medication. he has a very good demand of english. as he's speaking so slowly, the rims of his glasses will be moving back and forth as will his feet. you have a sense that there's something tumultuous happening inside him. >> a nervous energy? >> a nervous energy or as i said, i think there's some sort of medical issue there. >> obviously, his compound is surrounded. is this the end of the end for moammar gadhafi? obviously, four decades in power. are we looking at the final stage? >> he can't come out of this politically and survive. he may not be able to come out of this physically and survive. one of the key developments in the last 24 hours is the fact that his son was arrested. the son who was his political heir and his chief political adviser. there were two sons that were critical. saed and comat. he's the one son that gadhafi will now have to rely on. but he won't have the counsel of the son who helped navigate da gaffy's reinterview into the world when he made the compromise on pan am 103. >> and let's broaden it out to the broader region. earlier in the year, we saw an era of uproo rooiriseuprising. is this the saturday of a bigger arab uprising? where are we headed? >> this is phase two. and it begins with this great challenge, the end game for moammar gadhafi. but it is reflected in the fact that the international community over the past week has come out and said that bashar assad will have to step aside and the fkt that justice is being meted out to a long standing dictator in hoeny mow b ny hosni mubarak and his two sons. >> obviously, last week, we have gadhafi. is there a ripple effect in syria about what's going on in syria? will the forces in syria trying to unseat assad be boldened by what happened in like ya? >> they will absolutely be emboldened. i think there's an adrenaline that gets pushed. even though each country is separate in its issues and type of leadership, there's a common denominator in the quest for greater empowerment, political freedoms, a stake in the system. and that will be energized by what's happened in libya. >> and i want to ask you about, let's say stateside, about president obama. he's been criticized to a significant extent leading from behind, not taking up charge, earlier dominico and i were talking about senators graham and mccain could have come out and said this could have been done earlier. is this a validation of his policy? is it somewhere in between? how should we see this from the middle east perspective? did he handle this correctly? is this outcome the right outcome? >> i actually think that he's going to get enormous credit for having negotiated a position that was supported by the entire arab world, the entire international community, the world's largest military alliance, that the u.s. didn't take the lead in a military intervention like it did in iraq and afghanistan. and it is bringing about something that will be deemed legitimate by the people, unlike iraq, which was a foreign intervention and triggered the rallying of al qaeda, foreign forces flocking in though challenge the merns. this will be seen as credible and legitimate on the ground. >> let me ask you one thing. what's next in libya? obviously, this is an unstable country. what's next, assuming, as you point out, that gadhafi cannot recover from this politically. what are we looking at in the next 60 to 90 days? >> it's kind of an unnatural combination. there are places that have had their tensions in the past, but there are 140 describes or classes in libya. the challenge will be for the new transitional national council to embrace all the players. they were very diverse campaigns on the western and the eastern front. and the challenge will be making sure that everyone feels that they have a stake in a new political system as well as the economic spoils. >> fascinating story. robin, thank you for your time and your expertise. much appreciated. >> thank you. the turmoil in libya and europe's debt crisis could make for another volatile week on wall street. plus, the lessons learned from libya. will president obama's approach mark a new era in u.s. foreign policy? but first, today's trivia question. moammar gadhafi is the fourth longest serving non-royal ruler since 1900. who served the lot longest in that time? tweet us, @dailyrundown. the answer and more, coming up. multivitamin with more. only one a day women's 50+ advantage has ginkgo for memory and concentration, plus support for bone and breast health. a great addition to my routine. 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>> uncertainty always affects the markets, usually negatively. this morning, we are seeing oil prices in europe move sharply down 3%. that's a pretty sharp move. now it appears the libyan rebels are in control, that maybe we will see libyan production of oil get back online sometimes in the next six months. there's a lot of uncertainty about that spill. there's been concerned about whether or not some of the actual facilities have been compromised in some way, how quickly they'll be able to get them up and running. but bottom line is, we expect that crude to come back online. libya supplied about 500,000 barrels a day to super. we haven't seen the same subsequent fall in prices here in oil in the u.s. that may be because we just saw oil prices fall dramatically over the last couple of weeks ago we got more and more data pointing to the possibility of another recession here in the united states. all that being said, it does look like stocks are going to open higher this morning. that may be because oil prices are lower. it may be because we have seller fatigue because things have been so bad for so long and we are seeing some stability out of europe this morning. right annoy, european markets are higher. we expect u.s. xhkts to open higher and we'll see if it holds into the close. the last time we saw a positive monday morning, it didn't last all the way to the end. >> and michelle, one quick follow-up. we've see the yo yooing of the markets here. is that what we're going to see, big drops in big gains over every single week? and is there an end we expect to see? >> there is an expectation for more volatility and there's a reason for that. europe is at a moment where they have to decide what europe wants to be. they've drawn all kinds of lines in the sand. when you look at the finances, you know one of those lines is going to have to move, but so far, nobody is moving. until they make a decision over there about what they're going to do, you can expect a lot of volatility. they have to figure on out what they're going to do with their debt issues. think of it this way, germany has married somebody with far worse debt than they ever imagined, really bad spending habites and they didn't stick to the terms of the prenump. germany has to decide, are they going to love this person or get a divorce? >> love the german marriage metaphor. thank you, michelle. have a good day. >> you, too. we'll take a look at the risks and challenges in the immediate future for those on the ground in libya. plus, opening day for a multi million dollar tribute to america's civil rights pioneer. we're live at the new martin luther king jr. memorial on the national mall. and don't forget the nbc news politico debate coming up wednesday as 8:00 eastern on september 7. would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business. energy is being produced to power our lives. while energy developement comes with some risk, north america's natural gas producers are committed to safely and responsibly providing decades of cleaner burning energy for our country, drilling thousands of feet below fresh water sources within self contained well systems and using state of the art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment we are america's natural gas. bottom of the hour now, a quick look at what's driving the day. despite rebels taking control of the most of the libyan capital, clashes between rebels and moammar da gaffy forces continue around tripoli. president obama was briefed on libya by his national security team and said in a statement that the united states now recognizes the transitional national council as, quote, the legitimate governing authority in libya. and tropical storm irene intensified overnight to become tropical storm irene. the storm is expected to intensify over the next several days as it heads towards the u.s. mainlands. other stories making headlines, the manhattan's attorney district headlines is expected to drop all charges against comeny strauss-kahn. the decision reportedly comes due to credibility problems with the accuser's story in the case. strauss-kahn was accused of sexually assaulting a maid at an upscale hotel more than two months ago. an iranian court yesterday sentenced who im prisoned american hikers to eight years in prison. secretary of state hillary clinton issued a statement expressing dooel deep disappointment in the ruling. the two young men have been detained for two years. san francisco police are seeking suspects after a series of shootings and beatings that followed saturday night's preseason game between the san francisco 49ers and the oakland raters. two young men remain in serious condition. one man was shot and another was severely beaten. both are expected to survive. no two uprisings look alike. libya faces the prospect of a very different transition. retired army colonel jack jack jobs is a medal of honor recipient and a msnbc analyst. jack, what are the risks on the ground in the immediate future in libya if gadhafi is, indeed, out of power? >> chaos is one possible outcome. don't forget, this is a council that's made up a number of different interests. it's not likely that they're going to be able to govern quickly and effectively and as a result there's liable to be a lot of chaos, no control. retribution. don't forget this is a tribal country and in some areas people are going to take it out of others now that there's a little bit of freedom. there's also the risk of weapons that were in arsenals that belonged to gadhafi having been loosed upon the world, particularly things like sa-7 shoulder fired surface to air missiles, which could do things like take down airliners. i don't think that the council or anybody else is going to be able to account for all the wems that were under his control. it will be a difficult time and whether or not they gain control over the entire country is questionable. there will probably be a lot of infighting until there's control over the entire country. >> colonel, how long and do we have any sense on who stands to try to seize power? do we have specifics there or is it too fluid a situation to know yet? >> well, we know some of the food people, but it is fluid. among other things, you have the muslim brotherhood. heavily influenced by that in egypt, the egyptians have some interest in what's going on. there's a variety of folks, some of whom we know and some we don't who are going to vie for power. in the end, whoever wins is going to have to be somebody who can weld it altogether. and that means on purpose it will be somebody who is particularly strong. in places like this, usually we have some blood thirsty rise to power. it's a possibly it might happen here, too, even though we're talking about a change from a blood thirsty desperate just because they're all screaming democracy doesn't mean they're going to produce a constitution that guarantees it. >> and are we talking about weeks, months or years until we have someone emerge? >> take a look at iraq. that's a place that has a long history and tradition of central government in baghdad. i think it's possibly going to be six months to a year and they'll all be an the oil. there's between $20 billion and $40 billion a year in oil revenues. i think you're liable to have various people trying to control the assets across the country. you've got france, who has a satellite interest in what's going on there in the natural resources. britain, who is involved. i think it's liable to be a scramble for a while. >> and journal, we talk a lot in this town, in washington, about winners and losers. is nato a winner here? and not only that, is somebody a winner here? is this a valcation of that approach, in your mind? >> certainly here, the farther away we get from action in the middle east, physically the better off we are. it resisted in treaties to put people on the ground, which by and large we didn't do, which is a smart thing to do. we provided a waks control and we provided remotely controlled seconds. mostly, we stayed away. we send drones in there to attack specific targets where we had good information and interest intelligence. we did the right thing in staying away. by the way, i'm not particularly a fan of the way the president does anything, necessarily. i would ask them where they are going to get the troops from to get involved and another war on the ground we need to stay away. and i'll tell you, the people who are involved and that is the french in particular and the british are going to have to make sure that they keep their troops restricted to special forces who are going to train the libyans to take care of themselves. if they get involved more than that, i think they're going to be unhappy about how they got involved. >>jacobs, thank you for your time. >> you're welcome. washington is a town full of memorials. to past presidents, those lost in our nation's wars and beginning today, one of our country's most important civil rights pieo nears. the new martin luther king jr. memorial will officially open to the public this morning and is the first such monument on the national mall dedicated to an african-american. maura is at the memorial and she joins us now. good morning, maura. what does it look lion like down there? where are you and what does this mean to have the first dedication toon african-american on the mall? >> good morning to you, chris. you can see the monument off in the distance behind my left shoulder there. it becomes open to the public today at 11:00 a.m. this is the first major memorial owe national mall that is not to a president and it's the first avenue can american. this stands in the company of the lincoln memorial, of the jefferson memorial and from the washington maonumentmonument. now, the memorial itself consists of three main parts, all out of granite. there is the mountain of despair. it's a large mountain like structure but it's politic in two and visitors will be passing through there to enter the memorial where they come upon the stone of hope. that contains the statue out of doctor king carved out of granite that stands wore than 30 feet hall. the memorial contains two crescent shaped walles and those contain 15 of dr. king's most famous quotes, all hand etched into that granite there. so it's kind of a timeline of his speeches and some of his more famous savings. and the concept for the memorial itself comes from one of dr. king's quotes. it was lifted from a portion of his i have a dream speech where he said out of the mountain of despair comes a mounts of hope. now, the official dedication is scheduled to take place on sunday, august 28th. that would be the 48th anniversary of the "i have a dream" speech and the march of washington and about 300,000 visitors are expected to come here. that gives you a little bit of perspective for how significant this is. surely, we will have people coming here who were also at the march in washington in 1963 who are having a phil full circle of experience to see the man they followed to see him come back and memorialized in this way. very significant for so many americans. chris. >> mara, you mentioned, we have the public opening this morning, we have the dedication on sunday. what is going on in between? are there events planned this week at the memorial? >> yes, that's right. they will have this soft opening for a couple of days where the public can come and can view. but then they're going to recloak the memorial in advance of the dedication. at the convention center, there will be an exhibit of the civil rights era and various moments in history. so they're taking time to plan for that official dedication. on sunday, it's a very high profile program. they're expecting up to 300,000 visitors pouring into the city for that. president obama is expected to speak. aretha frankly is expected to sing. she said she's going to sing a song that was one of dr. king's favorites, that he would often request to her, take my hand, o pressure loappreciat precious lord. we'll also hear from mya angelo. >> great stuff, mara. thank you. will gadhafi's fall from power make it hadder for the 2012 republican presidential candidate candidates to attack president obama? we'll break it all down next with our panel. but first, the white house soup of the day, 15 bean. i can think of about three beans. obviously, i'm unaware of 12 other beans that exist. you're watching the daily rundown, only on msnbc. 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nice ! dr. scholl's massaging gel insoles. outrageous comfort, all-day long. on this date in 1972, anti-war protesters demonstrated outside of the republican national convention in miami beach, florida. many of the 3,000 demonstrators were either arrested or injured in police officers arrived at the scene. vietnam veteran ron cobic's experience was later immortalized in the film "born on the fourth of july." back to libya, clashes continue in tripoli. will the shocking collapse of gadhafi's regime after four decades of rule quiet critics who say president obama is leading from behind inspect renesh peru is an editor and columnist. john martin is with us and christina po will i bonti is with "roll call." is it still the economy, stupid, or is libya some kind of game changer? >> no. libya helps the president in terms of his foreign policy image, that there are positive things happening around the world. but i think the guys captured it well this morning and that is if the bin laden killing couldn't help president obama politically, then how is a distance regime pole? i think it's a little better perhaps than egypt because the american people know the gadhafi brand somehow. >> he's been with us for a long time. and there's lockerbie. so i think that helps. but there is a good story. by the next election day, our folks will be talking about how the arab spray happened and libya changed regime peps it's tough to see given the economy. >> the only thing i think this could help, the president is on vacation, but this brings to light he's not just sitting on the beach, but he's working. >> this could have been done earlier if we had used air force according to some. is there a critique that republicans would be smart to conduct on this or should they just say job well done, let's talk about the economy smp. >> well, look, i think president obama led some credence to that line of attack. he promised it would be days, not weeks at the beginning. i just think there is very limited political up side for president obama here and there's very little political ub side for the republicans. unless the libyans decide they're going to hold a straw poll, they're not going to have a big impact on the presidential race. >> david axlerod, former chief white house adviser, he was on television over the weekend in doing what looked like starting to frame the conversation of what 2012 will look like. let's listen to that and we'll cob back and talk about it. >> when people don't support plans that have in the past garnered bipartisan support, when people are willing to walk the one to the brink of default, when people, instead of saying where there's a will there's a way, it's my way or the highway, you have to assume that politics is at play. >> in some ways, this is nothing new under the sun, right? >> right. >> the obama administration saying the republicans are in transition. obviously, the president gets the bully pulpit, but he gets the negatives of being blamed. >> their option is running against the congress, running against the opposition because they have limited good news on the economic front to tell. so what you're left with is having to go after your opponents and basically destroyed them. that's what incumbents do who want to make the election a choice rather than a referendum. they're dealing with the sort of cards they're dealt. they're not waiting next next year. they're going to start it now. >> christina, is this a battle that the campaign is essentially going to be a battle to see who winds up being worse off, they won't like either of the nominees? >> i think so. and this doesn't change oh ba ma presenting the appears of the fat cats in washington. he's able to demagog on this and it's beyond belief in some cases, him talking to wall street donors and doing all those things. they're going to attempt to make any contrast they possibly can. >> and i would say just as a reminder, woem we'll come back and talk about it, but remember the 2010 election when the obama team decided they were going to make campaign finance reform. >> it was a hail mary. >> we'll be back. moammar gadhafi is the fourth longest serving nonroyal ruler since 1900. who served the longest? 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[ pigeons ] heyyy! hooo!!! let's bring back our panel. ramesh ponnuru, jonathan martin, and christina bellantoni. rame ramesh, jon huntsman, former utah governor, former china barmes in the obama administration, has started to get a lot more aggressive lately with his republican rivals. let's listen to something he said this week and come back and talk about it. >> i don't know if that's presecession texas or post-secession texas. but in any event i'm not sure the average voter out there is going to hear that treasonous remark and say that sounds like a presidential candidate. i think when you find yourself at an extreme end of the republican party you make yourself unelectable. >> okay. so we know he was talking about rick perry, the governor of texas. what is this strategic gambit by huntsman? >> well, he's apparently decided that combativeness in defensive moderation is no vice. i think there's two things. one, he needs attention. and two, he's decided there's an underserved market in the republican primaries, that there are still republican moderate voters and moderate conservatives and nobody else is catering to them, so he may as well. >> are there, jonathan? are there? the 2010 senate primaries, i know it's not the presidential primaries, but the 2010 senate primaries, we had joe miller, we had rand paul, christine o'donnell, did i invoke her name? it suggests to ramesh's point or jon huntsman's point. is there? >> i don't know about republicans but definitely independents in a place like new hampshire that do look at the field and sort of cringe when they look at the candidates and some of their comments. but here's the challenge for huntsman, though, is how much does that add up to? you know, is that a plurality even in a primary? i'm uncertain about that. >> yeah, i'm a little more cynical on this. he's positioning himself if it could all work out and somebody flames out maybe they would elect a moderate as the nominee in 2012. but everyone will remember him in 2016 as the guy who was to the left of the tea party candidates had should that not go well for the republicans. >> but the 2016 gambit -- we hear so much about this, he's really running for 2016. is there a reasonable -- cristina, is there a reasonable assessment unless michele bachmann winds up the nominee and she loses badly that the republican party says you know what is, we do need a moderate who served in the obama administration. >> no, i think it's not a very good strategy. the other point is he's not even competing in these primaries in key states. he got 69 votes in the iowa straw poll. >> from the sublime perhaps to the ridiculous. let's talk about mitt romney. this is the story i was most fascinated over the weekend. the "san diego union tribune," he had a -- he's tearing down his 3,000-square-foot house to build an 11,000-square-foot house. jonathan, quickly, politico had a great story last election about john mccain. you were in that interview. unable to say how many houses he owns, right? mitt romney appears to be aware of that and has sold off some of his homes, right? to avoid being the rich guy in the race. does this matter? >> i think it does matter in the sense that if you've got either a primary opponent or president obama who wants to sort of make a class-based attack against him, this is a pretty nice thing to hold up. how many americans right now can afford to bulldoze their beachside home and quadruple its size? and look, the romney line makes sense. they have five kids. they have 16 grandkids. >> right. a big family, you need a big house. >> get that. but the optics are still pacific, la jolla mansion and you're quadrupling the size. it doesn't look good. especially for a guy whose whole campaign is based upon i feel your pain on the economy. >> right, the president doesn't and i do. >> this time we're going to ask him how many square feet he owns and try to stump him there? look, this is governor romney's stimulus plan. and it's creating jobs in the construction industry. something the obama administration has -- >> heavily republican. ramesh, quickly. is it a fair or unfair attack? a lot of people, and i can feel the e-mails and the tweets coming in from republicans saying you guys are focusing on the wrong thing, the unemployment is such and such, you focused on mitt romney's house. does it matter or someone. >> fair's got nothing to do with it. the question is does it work or does it not work? i think with this unemployment rate it doesn't work. >> shameless plugs. the best part of the show. christina, go. >> i will be leading a study group at harvard in the fall. i need lots of people to attend. >> is that -- >> i think it's still accredited. i'm not sure. jonathan. >> politico and nbc have the first post-labor day debate coming up. the wednesday after labor day. so two short weeks from now. the first debate with rick perry also up there. should be fun. >> ramesh. >> and during that debate you can follow @rameshponnuru on twitter -- >> the twitter plug. back doored the twitter plug. i just want to make a quick shameless plug for harvard politics where christina's going to be a fellow. jonathan and i both spoke up there. a great place. >> see you there. >> that is it for this edition of "the daily rundown." coming up next on msnbc, "chris jansing & company." then at 1:00 p.m. don't miss "andrea mitchell reports." >> here's a look at your business travel forecast. i'm meteorologist bill karins. after a weekend of showers and thunderstorms in new england today's actually going to clear it out and be a nice day. if anyone couldn't get to their destinations today they should be able to. boston, torque, d.c. all looking good. detroit and chicago, no problems for you. it was a warm weekend in the west. that's going to change today. seattle chance of showers, 71. one more chariot please. ...we can bring the whole gang! i cannot tell a lie. he did it. right... it's hard to beat double miles! read my lips -- no new axes! [ male announcer ] get the venture card from capital one, and earn double miles on every purchase, every day. go to capitalone.com. what's in your wallet? so, you're a democrat right? how'd you learn to do that? what'd you use? every project we finish comes with a story built-in. it's how our rough ideas become "you did that yourself?" so when we can save more on the projects that let us fix, make, and do more... that just makes the stories even better. more saving. more doing. that's the power of the home depot. add some style to your sink, with this moen banbury faucet for the new lower price of $79. here's what you can the expect from regions. a bank that provides you with real business expertise. check. a professional optimization of your cash flow with a regions cashcor analysis. check. cash management solutions and the smart lending options you need to grow your business. check. plus, it all comes with award-winning service to help you achieve more balance. interested? let's talk. looking good. (bike bell) good morning. i'm chris jansing, and we are following the fast-moving developments from libya where it does appear it's the beginning of the end for moammar gadhafi. a top-level diplomat says opposition forces now control 95% of the capital of tripoli. there's a joyous, raucous celebration earlier this morning in green square. rebels are now calling it martyrs square. they say they've arrested gadhafi's two oldest sons, although right now still no word on the whereabouts of gadhafi himself. a rebel diplomat says they will "turn over every stone to find him." meantime, nato says it will continue combat air patrols over libya until all of gadhafi's forces surrender. and all of this could have a very practical impact here at home. cheaper gas. there are hopes that a gadhafi exit will lead to the resumption of oil exports from libya. nbc news chief foreign correspondent rich
charge against moammar gadhafi. there are reports of resistance from gadhafi loyalists. nbc news chief foreign correspondent richard engle is in tripoli. richard. >> there is an incredible feeling of optimism now in tripoli. people are streaming into the city, firing their guns in the air. families are arriving slashing victory signs out of their air. this is a moment people never thought would come and it developed very quickly again yesterday. it all began with rebels in zawiya decided that zero hour had arrived. they just decided to walk to tripoli and by the thousands people left zhou zawiya and gads troops simply melted away. they decided they have not going to fire on their own people. on a personal note, the reception we've been getting are incredibly warm. people are so excited and they have a new future ahead of them. people came out of their homes, they were giving us food and giving us water. crowded hoisted me up in the air to show how excited they were that this moment has finally arrived. it's not over yet. there is some still fighting in this city. rebels only control about 80% of it. gadhafi's whereabouts are currently unknown. chris. >> richard, an amazing report. thank you. president obama says the future of libya is now in the hoondz of the libyan people. the president issued a statement last night after being briefed by tom advisers. nbc's christen welker joins me live from massachusetts where the president is spending time with his family. kristin, houbl, we have the statement from last night. do we expect more from the white house today? >> hi there, chris. it certainly is possible. we are going to get a briefing from his dpet deputy press secretary sometime this morning. it's possible, though, that if the white house gets some more solid information about what exactly is happening on the ground in libya that we could perhaps hear from president obama, although nothing has been scheduled at this point. we want to make that very clear. and white house officials are not telling us if we will actually hear from the president. so we're all monitoring that situation quite closely. white house officials do say, though, that president obama is getting briefings about this situation around the clock. we was briefed first thing yesterday morning by his counter terrorism adviser, john brennen, and then throughout the day. then he held a conference call with a number of his top advisers at about 9:00 last night, including his chief of staff, bill daily, secretary of defense, several others. right after that call, we got that statement that you mentioned. we want to put up a graphic of a part of it. it says tripoli is slipping from the grasp of a tyrant. the surest way for the bloodshed to end is simple. moammar gadhafi and his regime need to realize their rule has come to an end. he needs to relinquish power once and for all. the united states recognizes the transitional national council as the governing body of libya, so ramping up the pressure on gadhafi to leave and to relinquish his power there. but still, they are monitoring that situation very closely. they're trying to get exact knowledge of what's happening and information is murky, quite frankly, coming out of libya. so if they get confirmation of specifically what is going on there, we could hear from the president himself. back to you. >> how are they handling the juxtaposition? is that anything that they're talking about even not on camera, obviously, but how do they deal with that? >> well, white house officials aren't really talking about that, but a lot of the images that we're getting seem to be managed to some extent, as you know, the first image we got was of the president being briefed by his counter terrorism adviser, john brennen, a really serious image that we got there. then yesterday, we did see him going out with michelle for dinner and that sort of thing. so some lighter images of the president. but i think they are trying to be quite careful, if you will, about what images are being released from this vacation. the optics of this are quite important. the president got a fair amount of criticism for taking this trip in the first place, a lot of republican candidates saying that he shouldn't be taking such a knight nice trip when the white house is struggling so much. the white house has pushed back saying that the office of the presidency travels with mr. obama wherever he goes. they have all the amenities of the white house here in terms of communication tools, trps, so their point is this really is the white house, it's just functioning on martha's vineyard. chris. >> great point. thanks for reporting, kristin. the fall of gadhafi is welcomed news. what does it mean fort president politically? minico, what we think is probably a pretty good moment for the president. and yet, very quickly afterward, john mccain, lindsay graham, who leading voices on foreign policy, i want to read what they have to say. we regret this success was so long in coming due to the failure of the united states to employ the full weight of our air power. not exactly throwing laurels at the feet of this president. >> no. >> is this a victory for president obama? >> sure it is. the white house, as we said, needs some good news. it's not really surprising that mccain, graham, lieberman take this shot. they were to the right of president obama, to the right of congress in wanting intervention much sooner. but this, one big issue here for the president is the fact that the economy remains such a big problem. domestically, we know that just thigh months ago, bin laden was killed. that bounce didn't last very long. >> amazing. >> three months ago. >> right. >> people were proclaiming he was a shoe in for re-election. >> and now people are saying there's no chance he's going to be re-elected, right? so the truth is probably always somewhere in the middle. but the thing is, and look, his supporters are not really celebrateding this. one supporter said to me, look, this is a notch in his belt. it's another notch, but look, with the economy being what it is, that is going to determine what happens next year. >> and the president acknowledges that himself. the president onlies the focus is still on the economy. >> you've got an unemployment rate that is still too high and an economy that is not grog fast enough. for me to argue, look, we've actually made the right decisions, things would have been much worse had we not made those decisions, that is not that satisfying if you don't have a job right now. and i understand that. and i expect to be judged a year from now on whether or not things have continued to get better. >> so that sounds like it's the economy stupid, essentially. the famous james cargo line from the '92 campaign. let's put libya aside for a minute. what can the president do on the economy? i wrote this weekend, i talked to a burn of democratic strategists. everybody offered basically different advice on how we should handle it. what's the best approach, do we have any sense? >> i think if you and i knew the answer to that, we wouldn't necessarily be sitting here. i think it's a difficult thing and i think like in sports sometimes, coaches get a lot of maybe too much of the plame or too much of the credit for things. we know presidents affect farm policy and judges directly. the economy is a little tougher, especially with a global economy. how many times do we have to hear, well, you know, it's really europe that's affected by the downturn. there are a lot of things this president is going to try to push for. we have clues over the weekend as to some of the other items as to cutting that payroll tax, maybe a road construction bill. but i think we know that's going to be a steep uphill climb in congress. this is about 2012, this is about politics. and like a candidate putting out a white paper, a president needs to run on something and run against something. congress, john boehner, not being willing to compromise, that's the argument we're getting here. >> dominica, i always read "first read" first tlieng in the morning. thanks for joining us. >> thank you. gadhafi says he'll fight to the end. where is he? and where ekg do sooem seek asylum? we'll be joined by journalist, author and mid east expert, robin wright. despite victory in libya, president obama has a bigger challenge on his hands, how to fix the economy and how to convince the public he's got the right plan. but first, a look ahead at the president's schedule. he's in martha's vineyard, but it is a working holiday. [ barks ] [ cat meows ] [ woman ] ♪ i just want to be okay ♪ be okay, be okay ♪ i just want to be okay today - ♪ i just want to know today - [ whistles ] ♪ know today, know today - [ cat meows ] - ♪ know that maybe i will be okay ♪ [ chimes ] travelers can help you protect the things you care about... and save money with multi-policy discounts. are you getting the coverage you need... and the discounts you deserve? for an agent or quote, call 800-my-coverage... or visit travelers.com. pnc virtual wallet gathers your spending and saving in one place. credit and debit purchases, checks, bills, and other financial information. it lets you see the details as well as the big financial picture. so you can do more with your money. see what a complete view of your money can do for you at pncvirtualwallet.com. ♪ pnc bank. for the achiever in you. joining us now, a fellow at the u.s. institute of peace and author of the book "rock the casba" robin wright. robin, i'm thrilled you're here. you have sat across the table just like this -- maybe not glass, but you've sat across the table from moammar gadhafi. you have looked into his eyes. what do people out there need to know about him? >> of all the world leaders i've interviewed, he is clearly the most unstable. lately he's seemed as if he's on medication. he has a very good demand of english. as he's speaking so slowly, the rims of his glasses will be moving back and forth as will his feet. you have a sense that there's something tumultuous happening inside him. >> a nervous energy? >> a nervous energy or as i said, i think there's some sort of medical issue there. >> obviously, his compound is surrounded. is this the end of the end for moammar gadhafi? obviously, four decades in power. are we looking at the final stage? >> he can't come out of this politically and survive. he may not be able to come out of this physically and survive. one of the key developments in the last 24 hours is the fact that his son was arrested. the son who was his political heir and his chief political adviser. there were two sons that were critical. saed and comat. he's the one son that gadhafi will now have to rely on. but he won't have the counsel of the son who helped navigate da gaffy's reinterview into the world when he made the compromise on pan am 103. >> and let's broaden it out to the broader region. earlier in the year, we saw an era of uproo rooiriseuprising. is this the saturday of a bigger arab uprising? where are we headed? >> this is phase two. and it begins with this great challenge, the end game for moammar gadhafi. but it is reflected in the fact that the international community over the past week has come out and said that bashar assad will have to step aside and the fkt that justice is being meted out to a long standing dictator in hoeny mow b ny hosni mubarak and his two sons. >> obviously, last week, we have gadhafi. is there a ripple effect in syria about what's going on in syria? will the forces in syria trying to unseat assad be boldened by what happened in like ya? >> they will absolutely be emboldened. i think there's an adrenaline that gets pushed. even though each country is separate in its issues and type of leadership, there's a common denominator in the quest for greater empowerment, political freedoms, a stake in the system. and that will be energized by what's happened in libya. >> and i want to ask you about, let's say stateside, about president obama. he's been criticized to a significant extent leading from behind, not taking up charge, earlier dominico and i were talking about senators graham and mccain could have come out and said this could have been done earlier. is this a validation of his policy? is it somewhere in between? how should we see this from the middle east perspective? did he handle this correctly? is this outcome the right outcome? >> i actually think that he's going to get enormous credit for having negotiated a position that was supported by the entire arab world, the entire international community, the world's largest military alliance, that the u.s. didn't take the lead in a military intervention like it did in iraq and afghanistan. and it is bringing about something that will be deemed legitimate by the people, unlike iraq, which was a foreign intervention and triggered the rallying of al qaeda, foreign forces flocking in though challenge the merns. this will be seen as credible and legitimate on the ground. >> let me ask you one thing. what's next in libya? obviously, this is an unstable country. what's next, assuming, as you point out, that gadhafi cannot recover from this politically. what are we looking at in the next 60 to 90 days? >> it's kind of an unnatural combination. there are places that have had their tensions in the past, but there are 140 describes or classes in libya. the challenge will be for the new transitional national council to embrace all the players. they were very diverse campaigns on the western and the eastern front. and the challenge will be making sure that everyone feels that they have a stake in a new political system as well as the economic spoils. >> fascinating story. robin, thank you for your time and your expertise. much appreciated. >> thank you. the turmoil in libya and europe's debt crisis could make for another volatile week on wall street. plus, the lessons learned from libya. will president obama's approach mark a new era in u.s. foreign policy? but first, today's trivia question. moammar gadhafi is the fourth longest serving non-royal ruler since 1900. who served the lot longest in that time? tweet us, @dailyrundown. the answer and more, coming up. multivitamin with more. only one a day women's 50+ advantage has ginkgo for memory and concentration, plus support for bone and breast health. a great addition to my routine. 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>> uncertainty always affects the markets, usually negatively. this morning, we are seeing oil prices in europe move sharply down 3%. that's a pretty sharp move. now it appears the libyan rebels are in control, that maybe we will see libyan production of oil get back online sometimes in the next six months. there's a lot of uncertainty about that spill. there's been concerned about whether or not some of the actual facilities have been compromised in some way, how quickly they'll be able to get them up and running. but bottom line is, we expect that crude to come back online. libya supplied about 500,000 barrels a day to super. we haven't seen the same subsequent fall in prices here in oil in the u.s. that may be because we just saw oil prices fall dramatically over the last couple of weeks ago we got more and more data pointing to the possibility of another recession here in the united states. all that being said, it does look like stocks are going to open higher this morning. that may be because oil prices are lower. it may be because we have seller fatigue because things have been so bad for so long and we are seeing some stability out of europe this morning. right annoy, european markets are higher. we expect u.s. xhkts to open higher and we'll see if it holds into the close. the last time we saw a positive monday morning, it didn't last all the way to the end. >> and michelle, one quick follow-up. we've see the yo yooing of the markets here. is that what we're going to see, big drops in big gains over every single week? and is there an end we expect to see? >> there is an expectation for more volatility and there's a reason for that. europe is at a moment where they have to decide what europe wants to be. they've drawn all kinds of lines in the sand. when you look at the finances, you know one of those lines is going to have to move, but so far, nobody is moving. until they make a decision over there about what they're going to do, you can expect a lot of volatility. they have to figure on out what they're going to do with their debt issues. think of it this way, germany has married somebody with far worse debt than they ever imagined, really bad spending habites and they didn't stick to the terms of the prenump. germany has to decide, are they going to love this person or get a divorce? >> love the german marriage metaphor. thank you, michelle. have a good day. >> you, too. we'll take a look at the risks and challenges in the immediate future for those on the ground in libya. plus, opening day for a multi million dollar tribute to america's civil rights pioneer. we're live at the new martin luther king jr. memorial on the national mall. and don't forget the nbc news politico debate coming up wednesday as 8:00 eastern on september 7. would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business. energy is being produced to power our lives. while energy developement comes with some risk, north america's natural gas producers are committed to safely and responsibly providing decades of cleaner burning energy for our country, drilling thousands of feet below fresh water sources within self contained well systems and using state of the art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment we are america's natural gas. bottom of the hour now, a quick look at what's driving the day. despite rebels taking control of the most of the libyan capital, clashes between rebels and moammar da gaffy forces continue around tripoli. president obama was briefed on libya by his national security team and said in a statement that the united states now recognizes the transitional national council as, quote, the legitimate governing authority in libya. and tropical storm irene intensified overnight to become tropical storm irene. the storm is expected to intensify over the next several days as it heads towards the u.s. mainlands. other stories making headlines, the manhattan's attorney district headlines is expected to drop all charges against comeny strauss-kahn. the decision reportedly comes due to credibility problems with the accuser's story in the case. strauss-kahn was accused of sexually assaulting a maid at an upscale hotel more than two months ago. an iranian court yesterday sentenced who im prisoned american hikers to eight years in prison. secretary of state hillary clinton issued a statement expressing dooel deep disappointment in the ruling. the two young men have been detained for two years. san francisco police are seeking suspects after a series of shootings and beatings that followed saturday night's preseason game between the san francisco 49ers and the oakland raters. two young men remain in serious condition. one man was shot and another was severely beaten. both are expected to survive. no two uprisings look alike. libya faces the prospect of a very different transition. retired army colonel jack jack jobs is a medal of honor recipient and a msnbc analyst. jack, what are the risks on the ground in the immediate future in libya if gadhafi is, indeed, out of power? >> chaos is one possible outcome. don't forget, this is a council that's made up a number of different interests. it's not likely that they're going to be able to govern quickly and effectively and as a result there's liable to be a lot of chaos, no control. retribution. don't forget this is a tribal country and in some areas people are going to take it out of others now that there's a little bit of freedom. there's also the risk of weapons that were in arsenals that belonged to gadhafi having been loosed upon the world, particularly things like sa-7 shoulder fired surface to air missiles, which could do things like take down airliners. i don't think that the council or anybody else is going to be able to account for all the wems that were under his control. it will be a difficult time and whether or not they gain control over the entire country is questionable. there will probably be a lot of infighting until there's control over the entire country. >> colonel, how long and do we have any sense on who stands to try to seize power? do we have specifics there or is it too fluid a situation to know yet? >> well, we know some of the food people, but it is fluid. among other things, you have the muslim brotherhood. heavily influenced by that in egypt, the egyptians have some interest in what's going on. there's a variety of folks, some of whom we know and some we don't who are going to vie for power. in the end, whoever wins is going to have to be somebody who can weld it altogether. and that means on purpose it will be somebody who is particularly strong. in places like this, usually we have some blood thirsty rise to power. it's a possibly it might happen here, too, even though we're talking about a change from a blood thirsty desperate just because they're all screaming democracy doesn't mean they're going to produce a constitution that guarantees it. >> and are we talking about weeks, months or years until we have someone emerge? >> take a look at iraq. that's a place that has a long history and tradition of central government in baghdad. i think it's possibly going to be six months to a year and they'll all be an the oil. there's between $20 billion and $40 billion a year in oil revenues. i think you're liable to have various people trying to control the assets across the country. you've got france, who has a satellite interest in what's going on there in the natural resources. britain, who is involved. i think it's liable to be a scramble for a while. >> and journal, we talk a lot in this town, in washington, about winners and losers. is nato a winner here? and not only that, is somebody a winner here? is this a valcation of that approach, in your mind? >> certainly here, the farther away we get from action in the middle east, physically the better off we are. it resisted in treaties to put people on the ground, which by and large we didn't do, which is a smart thing to do. we provided a waks control and we provided remotely controlled seconds. mostly, we stayed away. we send drones in there to attack specific targets where we had good information and interest intelligence. we did the right thing in staying away. by the way, i'm not particularly a fan of the way the president does anything, necessarily. i would ask them where they are going to get the troops from to get involved and another war on the ground we need to stay away. and i'll tell you, the people who are involved and that is the french in particular and the british are going to have to make sure that they keep their troops restricted to special forces who are going to train the libyans to take care of themselves. if they get involved more than that, i think they're going to be unhappy about how they got involved. >>jacobs, thank you for your time. >> you're welcome. washington is a town full of memorials. to past presidents, those lost in our nation's wars and beginning today, one of our country's most important civil rights pieo nears. the new martin luther king jr. memorial will officially open to the public this morning and is the first such monument on the national mall dedicated to an african-american. maura is at the memorial and she joins us now. good morning, maura. what does it look lion like down there? where are you and what does this mean to have the first dedication toon african-american on the mall? >> good morning to you, chris. you can see the monument off in the distance behind my left shoulder there. it becomes open to the public today at 11:00 a.m. this is the first major memorial owe national mall that is not to a president and it's the first avenue can american. this stands in the company of the lincoln memorial, of the jefferson memorial and from the washington maonumentmonument. now, the memorial itself consists of three main parts, all out of granite. there is the mountain of despair. it's a large mountain like structure but it's politic in two and visitors will be passing through there to enter the memorial where they come upon the stone of hope. that contains the statue out of doctor king carved out of granite that stands wore than 30 feet hall. the memorial contains two crescent shaped walles and those contain 15 of dr. king's most famous quotes, all hand etched into that granite there. so it's kind of a timeline of his speeches and some of his more famous savings. and the concept for the memorial itself comes from one of dr. king's quotes. it was lifted from a portion of his i have a dream speech where he said out of the mountain of despair comes a mounts of hope. now, the official dedication is scheduled to take place on sunday, august 28th. that would be the 48th anniversary of the "i have a dream" speech and the march of washington and about 300,000 visitors are expected to come here. that gives you a little bit of perspective for how significant this is. surely, we will have people coming here who were also at the march in washington in 1963 who are having a phil full circle of experience to see the man they followed to see him come back and memorialized in this way. very significant for so many americans. chris. >> mara, you mentioned, we have the public opening this morning, we have the dedication on sunday. what is going on in between? are there events planned this week at the memorial? >> yes, that's right. they will have this soft opening for a couple of days where the public can come and can view. but then they're going to recloak the memorial in advance of the dedication. at the convention center, there will be an exhibit of the civil rights era and various moments in history. so they're taking time to plan for that official dedication. on sunday, it's a very high profile program. they're expecting up to 300,000 visitors pouring into the city for that. president obama is expected to speak. aretha frankly is expected to sing. she said she's going to sing a song that was one of dr. king's favorites, that he would often request to her, take my hand, o pressure loappreciat precious lord. we'll also hear from mya angelo. >> great stuff, mara. thank you. will gadhafi's fall from power make it hadder for the 2012 republican presidential candidate candidates to attack president obama? we'll break it all down next with our panel. but first, the white house soup of the day, 15 bean. i can think of about three beans. obviously, i'm unaware of 12 other beans that exist. you're watching the daily rundown, only on msnbc. 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nice ! dr. scholl's massaging gel insoles. outrageous comfort, all-day long. on this date in 1972, anti-war protesters demonstrated outside of the republican national convention in miami beach, florida. many of the 3,000 demonstrators were either arrested or injured in police officers arrived at the scene. vietnam veteran ron cobic's experience was later immortalized in the film "born on the fourth of july." back to libya, clashes continue in tripoli. will the shocking collapse of gadhafi's regime after four decades of rule quiet critics who say president obama is leading from behind inspect renesh peru is an editor and columnist. john martin is with us and christina po will i bonti is with "roll call." is it still the economy, stupid, or is libya some kind of game changer? >> no. libya helps the president in terms of his foreign policy image, that there are positive things happening around the world. but i think the guys captured it well this morning and that is if the bin laden killing couldn't help president obama politically, then how is a distance regime pole? i think it's a little better perhaps than egypt because the american people know the gadhafi brand somehow. >> he's been with us for a long time. and there's lockerbie. so i think that helps. but there is a good story. by the next election day, our folks will be talking about how the arab spray happened and libya changed regime peps it's tough to see given the economy. >> the only thing i think this could help, the president is on vacation, but this brings to light he's not just sitting on the beach, but he's working. >> this could have been done earlier if we had used air force according to some. is there a critique that republicans would be smart to conduct on this or should they just say job well done, let's talk about the economy smp. >> well, look, i think president obama led some credence to that line of attack. he promised it would be days, not weeks at the beginning. i just think there is very limited political up side for president obama here and there's very little political ub side for the republicans. unless the libyans decide they're going to hold a straw poll, they're not going to have a big impact on the presidential race. >> david axlerod, former chief white house adviser, he was on television over the weekend in doing what looked like starting to frame the conversation of what 2012 will look like. let's listen to that and we'll cob back and talk about it. >> when people don't support plans that have in the past garnered bipartisan support, when people are willing to walk the one to the brink of default, when people, instead of saying where there's a will there's a way, it's my way or the highway, you have to assume that politics is at play. >> in some ways, this is nothing new under the sun, right? >> right. >> the obama administration saying the republicans are in transition. obviously, the president gets the bully pulpit, but he gets the negatives of being blamed. >> their option is running against the congress, running against the opposition because they have limited good news on the economic front to tell. so what you're left with is having to go after your opponents and basically destroyed them. that's what incumbents do who want to make the election a choice rather than a referendum. they're dealing with the sort of cards they're dealt. they're not waiting next next year. they're going to start it now. >> christina, is this a battle that the campaign is essentially going to be a battle to see who winds up being worse off, they won't like either of the nominees? >> i think so. and this doesn't change oh ba ma presenting the appears of the fat cats in washington. he's able to demagog on this and it's beyond belief in some cases, him talking to wall street donors and doing all those things. they're going to attempt to make any contrast they possibly can. >> and i would say just as a reminder, woem we'll come back and talk about it, but remember the 2010 election when the obama team decided they were going to make campaign finance reform. >> it was a hail mary. >> we'll be back. moammar gadhafi is the fourth longest serving nonroyal ruler since 1900. who served the longest? 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[ man ] so i used mine to get a whole new perspective. ♪ [ male announcer ] the new citi thankyou premier card gives you more ways to earn points. what's your story? citi can help you write it. let's bring back our panel. ramesh ponnuru, jonathan martin, and christina bellantoni. rame ramesh, jon huntsman, former utah governor, former china barmes in the obama administration, has started to get a lot more aggressive lately with his republican rivals. let's listen to something he said this week and come back and talk about it. >> i don't know if that's presecession texas or post-secession texas. but in any event i'm not sure the average voter out there is going to hear that treasonous remark and say that sounds like a presidential candidate. i think when you find yourself at an extreme end of the republican party you make yourself unelectable. >> okay. so we know he was talking about rick perry, the governor of texas. what is this strategic gambit by huntsman? >> well, he's apparently decided that combativeness in defensive moderation is no vice. i think there's two things. one, he needs attention. and two, he's decided there's an underserved market in the republican primaries, that there are still republican moderate voters and moderate conservatives and nobody else is catering to them, so he may as well. >> are there, jonathan? are there? the 2010 senate primaries, i know it's not the presidential primaries, but the 2010 senate primaries, we had joe miller, we had rand paul, christine o'donnell, did i invoke her name? it suggests to ramesh's point or jon huntsman's point. is there? >> i don't know about republicans but definitely independents in a place like new hampshire that do look at the field and sort of cringe when they look at the candidates and some of their comments. but here's the challenge for huntsman, though, is how much does that add up to? you know, is that a plurality even in a primary? i'm uncertain about that. >> yeah, i'm a little more cynical on this. he's positioning himself if it could all work out and somebody flames out maybe they would elect a moderate as the nominee in 2012. but everyone will remember him in 2016 as the guy who was to the left of the tea party candidates had should that not go well for the republicans. >> but the 2016 gambit -- we hear so much about this, he's really running for 2016. is there a reasonable -- cristina, is there a reasonable assessment unless michele bachmann winds up the nominee and she loses badly that the republican party says you know what is, we do need a moderate who served in the obama administration. >> no, i think it's not a very good strategy. the other point is he's not even competing in these primaries in key states. he got 69 votes in the iowa straw poll. >> from the sublime perhaps to the ridiculous. let's talk about mitt romney. this is the story i was most fascinated over the weekend. the "san diego union tribune," he had a -- he's tearing down his 3,000-square-foot house to build an 11,000-square-foot house. jonathan, quickly, politico had a great story last election about john mccain. you were in that interview. unable to say how many houses he owns, right? mitt romney appears to be aware of that and has sold off some of his homes, right? to avoid being the rich guy in the race. does this matter? >> i think it does matter in the sense that if you've got either a primary opponent or president obama who wants to sort of make a class-based attack against him, this is a pretty nice thing to hold up. how many americans right now can afford to bulldoze their beachside home and quadruple its size? and look, the romney line makes sense. they have five kids. they have 16 grandkids. >> right. a big family, you need a big house. >> get that. but the optics are still pacific, la jolla mansion and you're quadrupling the size. it doesn't look good. especially for a guy whose whole campaign is based upon i feel your pain on the economy. >> right, the president doesn't and i do. >> this time we're going to ask him how many square feet he owns and try to stump him there? look, this is governor romney's stimulus plan. and it's creating jobs in the construction industry. something the obama administration has -- >> heavily republican. ramesh, quickly. is it a fair or unfair attack? a lot of people, and i can feel the e-mails and the tweets coming in from republicans saying you guys are focusing on the wrong thing, the unemployment is such and such, you focused on mitt romney's house. does it matter or someone. >> fair's got nothing to do with it. the question is does it work or does it not work? i think with this unemployment rate it doesn't work. >> shameless plugs. the best part of the show. christina, go. >> i will be leading a study group at harvard in the fall. i need lots of people to attend. >> is that -- >> i think it's still accredited. i'm not sure. jonathan. >> politico and nbc have the first post-labor day debate coming up. the wednesday after labor day. so two short weeks from now. the first debate with rick perry also up there. should be fun. >> ramesh. >> and during that debate you can follow @rameshponnuru on twitter -- >> the twitter plug. back doored the twitter plug. i just want to make a quick shameless plug for harvard politics where christina's going to be a fellow. jonathan and i both spoke up there. a great place. >> see you there. >> that is it for this edition of "the daily rundown." coming up next on msnbc, "chris jansing & company." then at 1:00 p.m. don't miss "andrea mitchell reports." >> here's a look at your business travel forecast. i'm meteorologist bill karins. after a weekend of showers and thunderstorms in new england today's actually going to clear it out and be a nice day. if anyone couldn't get to their destinations today they should be able to. boston, torque, d.c. all looking good. detroit and chicago, no problems for you. it was a warm weekend in the west. that's going to change today. seattle chance of showers, 71. one more chariot please. ...we can bring the whole gang! i cannot tell a lie. he did it. right... it's hard to beat double miles! read my lips -- no new axes! [ male announcer ] get the venture card from capital one, and earn double miles on every purchase, every day. go to capitalone.com. what's in your wallet? so, you're a democrat right? how'd you learn to do that? what'd you use? every project we finish comes with a story built-in. it's how our rough ideas become "you did that yourself?" so when we can save more on the projects that let us fix, make, and do more... that just makes the stories even better. more saving. more doing. that's the power of the home depot. add some style to your sink, with this moen banbury faucet for the new lower price of $79. here's what you can the expect from regions. a bank that provides you with real business expertise. check. a professional optimization of your cash flow with a regions cashcor analysis. check. cash management solutions and the smart lending options you need to grow your business. check. plus, it all comes with award-winning service to help you achieve more balance. interested? let's talk. looking good. (bike bell) good morning. i'm chris jansing, and we are following the fast-moving developments from libya where it does appear it's the beginning of the end for moammar gadhafi. a top-level diplomat says opposition forces now control 95% of the capital of tripoli. there's a joyous, raucous celebration earlier this morning in green square. rebels are now calling it martyrs square. they say they've arrested gadhafi's two oldest sons, although right now still no word on the whereabouts of gadhafi himself. a rebel diplomat says they will "turn over every stone
that is why it is flexible. >> thank you. that was a very clear fleshing out of the concepts behind the flexible path. and i appreciate you putting that on the record. i appreciate also you drawing the attention to appendix b of the report and i will quote from that appendix where as you had said, they had said in this case, you used the falcon-9 as an example of a commercial rocket being developed and, " they predictive cost to develop a falcon-9 would have been between $1.70 billion and $4.0 billion. the development costs for the falcon-9 launch vehicle was $300 million, $90 million was spent developing the the launch vehicle," and so forth. which brings you up to the total of $400 million. if this bears out that is it is that much difference, it corroborates the flexible path and the philosophy of the authorization bill and so to you, i would like you to comment whereas it appears in the past that we have seen a decline in american competitiveness in the commercial marketplace. does this give you reason now to -- just this one example and the company as another example, there are many others that are out competing. his company and this other company, they will be launching cargo to the international space station on american rockets and it will start this fall. so tell me what you think is the possibility of the turnaround of increasing our share of the commercial marketplace. >> thank you. i think it is very good. i would start by observing that i have never had any doubt that commercial companies could do things cheaper than the government can. we look at how nasa operates, it operates under a lot of requirements that a commercial company does not have to meet in terms of its oversight, it's many political masters, its historic requirements around issues of management and safety. i am pleased with how space x has done. the space foundation awarded space x its achievement award of 2010 more than a month ago. i think this does pose some interesting scenarios for us. i think a successful space x -- those are game changers for us. i think that they fundamentally change the ability of our foreign competitors, if you will, in the launch business. that assumes a fair playing field. the current problems we have with itar do create a barrier that says and until those are fixed, it does become difficult for a company like space x to market overseas because those payloads triggers an event that adds expense and made price them out or simply keep them out. is the sure if that answer to your question. i would also with your indulgence make a comment. the nasa involving various things like the ssme and others, i think that is fine if we agree that what the heavy lift vehicle is going to do is enable us to do other things that require new technologies, innovative thinking, and so on. the concern i have is one of the things the apollo program did is it asked us to do difficult things that have never been done and that resulted in a lot of convention and new technology. if we are depending on existing technology and not interested in developing new technology, that is something that bears a look at as we implement this plan. >> thus, the flexible path which dr. chiva outlined. you had a flexible path to get components into earth orbit, and depending on what your goal is, at that point, you develop the technologies to get there. we're not going to mars or likely to an asteroid at this point with the technologies we have. it is going to be all kinds of new things. i want to ask capt. colbertson, since the subject of the hearing is the contributions of space to national priorities, tommy, you mention all the nations that are participating in this gargantuan thing that is on orbit called the international space station. you mentioned also this extraordinary relationship that we have with the russians that was born out of the beginning of the thought of the cold war when an apollo spacecraft docked with a soyuz spacecraft in the middle of the cold war. they lived nine days together in space and that is an extraordinary human interest story. to see the relationship of those three american astronauts now and the two soviet cosmonauts. but you chronicled -- [no audio] evolving into what we see today. you want to give us more comments for the record as a ?ontribution of space >> when the program was envisioned, it was an offshoot of the decision to bring the russians in. it had been there since 1986. they did not [inaudible] they had learned to operate the station. skylab was operating for 87 days. it was an opportunity for us to participate with someone who was already doing this but also because they were being brought in as a partner providing significant segments of the station that would allow it to be viable and operate. it was important for us to work with them before we started putting pieces together in orbit. together, we built a docking module that allowed the shuttle to dock so we could more easily attached to the space station and transfer people and we developed logistics capability to carry not only our crew members but the cargo associated with their experiments and to supplement what was going on on the mir as a cooperative partner. we have to learn each other's way of doing business, each other's way of doing engineering and operations. we have to live in each other's control centers and factories. eventually, visit each other in their homes. at the working level, at the management level, it became a close-knit, tight team that was able to do with almost every problem that came out, including the life-threatening ones that occurred. that trial by fire allowed us to develop the trust that was necessary to go from there to the international space station. we do depend on each other. neither of the countries could go it alone on the international space station at this point and the partners depend on us to do our part to keep working and keep it as a valuable research station. that development of that relationship was critical going forward. if i could expand on that, the relationships we are developing within this country in the commercial world in relation to what nasa is doing is the development of something critical that goes beyond the technology and the hardware that is being built. understanding how to bring commercial practices to development of spacecraft and rockets, that will make things more cost-effective. the oversight in the key areas of the decades of flying people in space and flying hardware in space and combining those two makes it a valuable experience. we overlook the relationship -- we cannot to overlook the capabilities as we're going forward and i would like to see that continue. engaging with the russians to finish answering your question was critical to being successful. we learned a lot and overcame politics that still to this day overlay everything but allow us to make a phone call between program managers and make a decision in a few minutes on what needs to be done in the next hour to keep the crusade. >> we often forget that when we talk about the contributions of space to national priorities which you have very eloquently outlined a number of them. the technological spinoffs and so forth. the one that the captain has mentioned was and has been invaluable. >> if i could just add, the first time the components what put together, when was russian and the other was american. they had never touched each other and they were attached going 18,000 miles an hour in a vacuum and fit perfectly and that has been true of every component between our countries that we have taken up there. because we have worked on the trust and secondly, the communication that allows us to understand each other's capabilities and each other's hardware. it allows us to know about each other as a people. both ourselves and the people we're working with. that in itself helps make as good leaders and it helps keep the peace where we can in the world. >> well said. senator? >> thank you. what actions do you believe congress could or should take that would enhance the ability of the u.s. aerospace industry to continue its record of supporting the nation's technological superior and competitiveness in the global economy? >> to follow-up on eliot's comment relative to exports, satellites were put on the munitions list, maybe the only thing that was put on a munitions list. and its regulation has caused or helped cause the decline of u.s. market share in commercial satellites, a 70% down to 25%. it is still well below its historic norms. at the component level when i used to work on delta launch vehicles, we would have nozzle extensions from france and other competitors who had bearings from switzerland. we do not export. we have such a difficult time exporting hardware and some of the suppliers we have in the u.s. industry are the best in the world and could compete but for the difficulty of getting things to be exported. i think that when we look at the national export initiative, we have to look at where is your sustainable industry. where do you excel? we excel in aerospace and largest we're the contributor to the balance of trade in the server + category. $53 billion last year but it could be more on the space side if we could look at the rules us better.ould make hi to maintain an industrial base requires a certain amount of activity. it would make it easier for the air force and nasa to not have sped -- have to spend so much or to try to maintain capabilities. it would make this better competitors. one of the reasons why our i.t. industry is good is because of competition. boeing is good because there is airbus. they constantly try to outdo the other. the wind up with lower costs and an industry that is forced to be better. that is one of the best things we can do is reforming our export regime. >> thank you. what role does nasa's missions play in america's leadership in space? >> i think there is a number of things. clearly as i discussed in my remarks, the impassiveness of what we have done grand -- contributing to our soft power and leadership, whether it was the shuttle mir, when we do these things, there are technical and financial aspects. the message we send around the world about what kind of nation we are, we are a nation of leaders, we are a nation of great technological prowess really causes the world to u.s. in a way they would not if we could not do those things. i think the contribution to soft power is paramount. i also think the contribution that nasa makes to the intellectual capacity of this nation is not totally and thoroughly understood and i would not pretend to totally and thoroughly understand it but i know a few things. students at whatever grade level and we're teaching space in pre- k now. they grasp what is going on in space, the grass what nasa is doing and they get excited about it. that changes the way they look at the study of things like science and engineering and mathematics. we have referred to this aerospace academy, we have students who are 92 -- 94% are on free or assistant -- assisted lunch. the come down to the laboratory and use space sensors and software to measure distances on their campus and figure out where everything is in relation to their own lives. the other part of the education peace becomes what do we do at the college level? one of the things that nasa is not greatly appreciated for is the amount of investment that nasa makes in university research and graduate studies at our universities and how that influences some of the career decisions people make when they are in graduate and post- graduate school. our organization is international but we are headquartered in colorado and i am conscious that the university of colorado has been one of the largest recipients of nasa research dollars and because of that, we have developed a center of excellence in the northern part of the state in satellites, in sensors and aerospace manufacturing and so on. i think nasa plays a real important role in -- and we need to work on ways to have what ever nasa is doing the more visible to the american public so the american public can embrace all the benefits of this activity. >> i want to follow-up with asking you about if we do not aggressively move forward and began work on the heavy lift rocket, what effect will that have in our international space leadership? and secondly, you can think about this. what you alluded to i think is so important. if you would comment about your perspective from an academic experience, what you believe is the best way to attract students and interest them in the field of study that is needed for maintaining a strong and effective space exploration program. >> thank you. i think that in terms of the importance of having a new heavy lift vehicle, you need to look as far as the james webb telescope program to understand where we are. the telescope when it is put into orbit, it will be put into orbit on a european vehicle because it is capable of taking the web telescope and putting yet in an assertion to get it to the lagrangian point where it will be stationed. that enables you to do things we cannot do now. the space shuttle can carry a huge model of 40,000 pounds or so, but if you had a capability of putting 200,000 pounds or taking that payload and putting it on a trajectory to the moon, that is a game changer. it is important for us to get that heavy lift capability just as quickly as we can. >> thank you. there are a few comments i would make. one is a broad one that over my career i have had the opportunity to talk to kids at all levels from first grade up through graduate students. my first comment is a very broad one. something i noticed when i started doing this when i was in my 28's is there was enormous enthusiasm for space and i see that in my son's day care. enormous enthusiasm when kids are young. by the time you are talking with high school kids, it is a different level of enthusiasm. that is not nasa pose a problem. that is a broader societal issue. we are squeezing that enthusiasm out of too many of our students and we need to speak to those students were going to make aerospace our science their career but we need to speak to the population and keep them excited about science. a second comment is the importance of honesty. scientific integrity. this is why push for it in the augustine committee report. the students that are in college or grad school, especially the ones in grad school, they can smell if they feel like they're being told a story about the space program that does not stack up scientifically. if claims are being made that this or that mission will be us -- lead us to a cure for cancer when the connection is not there, they're really immediately translate into a deep cynicism and skepticism about the program. i have seen that too often. a third comment is that the program needs to be not only doing exciting things, it needs to be seen to be at the cutting edge of what is happening. i have a tremendous graduate student in aerospace at a major university who worked with me for year end one of the best students i have ever had. really sure. did stuff i did not expect him to do and showed what i was doing was wrong. he did not want to go work for nasa. he wanted to work for one of the start-ups. my sense is he felt like nasa had become a dinosaur and this left me disheartened and feeling sad for my country. the startups are there but we need nasa that also makes students feel that way about it. the idea that our best and brightest would be rolling out nasa because it is not exciting enough is, that is something that is wrong. that is an anecdote but it was for me a powerful one. in the augustine committee, we worked very closely with nasa engineers and managers and because i know that there has been a difficult relationship and some of that has been referenced in this hearing, i would like to say for the record that so many of those people are the absolute best in the world and they are deeply dedicated. there ought to be -- there is a reservoir of deep knowledge and dedication, the best in the world, but the motivation to make this happen. that is why they are there. it is possible moving forward for there to be a cooperative environment in which all sides work together and ruled their sleeves to achieve this major national objectives. i think students will see that. >> thank you. i think that is whavery well sa. i believe with my heart we will see that happen. we appreciate you being here so much. this has been a very good hearing, very informative, very helpful. we look forward to working with you in the future on behalf -- in the future. on behalf of our chairman, the meeting is adjourned. >> coming up on c-span. dmitry medvedev. a news briefing with defense secretary robert gates and a debate between the candidates for the special election in the 26 congressional district of new york. tomorrow, a look at the gop presidential field with former congressman tom davis of the republican mainstream partnership. consumer product safety tennenbaum.z >> history is much more than politics and soldiers. social issues. it is also medicine and theater and poetry and ideas. and we should not love things and two categories. it is part of the same thing. >> john singer sargeant. part one of two weeks on the americans who made the greater journeyed to 19th century paris. "washington journal" on twitter and joined viewers to get advanced notice of the gas, questions of the day, and links to video clips. you can tweak your questions and add your comments to the conversation. do not miss any updates. start your twitter account today at twitter .com/cspan/wj. >> a press conference with president dmitry medvedev. he talks about his concerns over a proposed missile defense system and warned of the cold war if the u.s. and russia fail to agree on missile defense. he also took questions on the russian economy and his relationship with prime minister vladimir putin but evaded a question of whether he will run for election in 2012. [laughter] [applause] >> esteemed colleagues, please allow me to welcome you. there are a lot of reporters here and i have been informed there are over 800 media people here and i am pleased that there is so much interest in this press conference. i cannot complain i am not spending enough time with the press, though. i meet them all the time during my daily work and during my travel to the constituents in the russian federation and over the last few years when i worked at the government and since i have been president, i have visited virtually all the different regions of this country except for two. i will soon visit those also. i have met many of them members of our regional press in person and i can see some of them here which is nice. there has not been such a major press conference before and there is a reason for that. it makes sense to have a press conference like that to share impressions of how this country has been developing and what is going on. i would like to thank you for your interest in this press conference and i am positive that i am headed toward some interesting questions, although i do not know how interesting you will find my answers. i am prepared to start work. let us get there. and that was nice. one last thing. one logistical remark. this is to be the first press conference in the history of this country where the president is going to also be the emcee, there's not anyone taking questions. if you do not have a problem, i will point my finger at you and so, and i, rolw so and will expect you to get up and start asking questions. to get going, it would be appropriate to ask the floor to -- pass the floor to television. sergei, i was on your show and there was an interesting conversation. by way of responding, i would like to give you the right to ask the first question. >> thank you. i would like to ask about the degree of irreversibility. this is outside the beltway which is a vicious circle. it also has its own sense. how would you evaluate the doubt and error -- irreversability? >> i do not think we should proceed from the premise that modernization is cast in stone. because i remember at a certain point, we were celebrating the first year and we all know where it led to. modernization is not cast in stone. it is an important process. the most important thing is to acquire a new dimension of development. modernization is not just momentum going forward. it is applying success we have achieved. we talk about a qualitative change and i am positive this is not something we have achieved yet although it does not mean that we should change to the flags, banners, the slogans and talk about a new wave of modernization. modernization must carry on. i am positive that priorities i have outlined should remain as important avenues of work. the government and state run programs applying to these avenues that are being funded, they are being implemented, have they achieved anything extraordinary? we have not. this is what will be my biggest motivation. my -- mine and my colleagues. we can work to change the life in this country. that is why i would like to emphasize one more time, modernization is the most important avenue of development. in my view, this should leave to qualitative change and not just to us marking some kind of anniversary. it is -- i am talking about this because this is a special place. one that has a lot of significance. it is here that the university was set up and is here where the innovation center will be established and i would like for this brand to be truly known around the world. and not because it is the only place that one needs to make investments in but because in any kind of developments or cause, there should be essential, the most important elements which the -- this structure for the effort. i am hoping this will become the single most important link in the chain of modernization. the most important but not the only one. i would like to thank everyone who was working here. for the fact they have provided this room for us so we can have a press conference. it is more interesting to happen here. in your view, what is the relationship and what is your perspective of the relationship that russia has with the united states and the west and nato? what are the problems and what is the progress that has been made? another question, also, international but also legal. concerning domestic russian life. there has been debate about whether or not it is mandatory for russia to comply with decisions made by the european court for human rights because there are many decisions that have to do with the material subject and the spirit of compliance and you know what that means. what do you think about russia's compliance with the decisions? thank you. >> the subject of russia's relationship with nato is vast. it is something that concerns me every day because -- literally every day, this is one of the things i spend time on when i hear reports by ministers, when i read reports by special services, or when i prepare myself for functions at which i have meetings with leaders. many of whom represent nato. the relationship with nato at this point is the sen. it works well for both sides. we did have a dramatic time when we essentially stopped the relationship and it had not come from us, it came from the north atlantic alliance. i said it is up to them. if they do not want to cooperate, will not -- we will not [unintelligible] and things are developing in a normal way. i am pleased with my meetings during the russia-nato summit. we agreed to cooperate on the most strategic items on the agenda, including afghanistan. counter-terrorism, drug- trafficking. there are new issues which i believe we must agree, otherwise everything will involve in a nasty manar. i am talking about the anti- missile defenses. this is a stand-alone subject and i will briefly cover it although i have repeatedly offered assessments of it. we would like to happen for of the defenses to follow understandable, clear-cut rules. it must be obvious for everybody that anti-missile defenses is a method of blocking or cutting back on the strategic capability of a number of countries. when we are told this is not against you, i do take note but i do not -- [unintelligible] other countries that do not have the capability and they will have the capability over the next few years. we're told, it is iran. they do not have that capability. is that this -- is that against us? tell us about that openly. i am hoping that the issues i have raised in communication with my colleague and counterpart, president obama, those questions will be given answers to end we will develop a model of cooperation. unless that happens, we will have to take some kind of action and response. it is something i would not like to do. we would have to speed up the buildup of the strike potential of the nuclear forces and that would be a nasty scenario, rowling us back to the cold war era. by 20/20 when the stages of the preparation of the adaptive forestage approach have been completed, it is likely those decisions will not be made by you and perhaps not by me. but, looking -- someone will be making those decisions. that is what we have to think about how we will hand over this problem to the future generations of politicians. this is an important subject. you can ruin everything we have done. it does have a direct provision that if the system is developed, which means the strategic parity will be upset, the treaty may be suspended, even terminated. i would like my partners to take note and say we are prepared for corp. but to say we're hoping we would obtain guarantees that these capabilities are not targeting us. i'm not done yet. i made diligent person to answer and i will answer questions. russia is a member and have signed all the documents and must comply with them. we will continue to do so. to us, membership in the european institutions is extremely important. and yet we cannot fail but see certain difficulties we're running into because we are an emerging democracy, and evolving democracy and we have quite a few problems and occasionally, this -- there being complied with. on certain occasions and that is what you are referring to, there is a feeling that the court has not made the decision in an unbiased way. it was a decision that was politically motivated. there are such opinions and that is why such decisions are being discussed. some of our political leaders talk about that but that does not mean we have terminated our membership and are planning to abandon our involvement in the echr. any court must act in a way that creates a feeling among the parties that it is not engaged by anybody. it is an impartial and unbiased. i have promised i will give the floor to someone from st. petersburg. anyone from st. petersburg, please. >> thank you. independent news wire. i would like to go back to st. petersburg and to russia because you have been talking about international affairs. would you like to be a magician? would you like to be able to do that? recently we celebrated one more time and after that, it is heartbreaking to read about our veterans sending their borders and medals to the kremlin. returning them. how they would like to ask obama for resident permits. should this country provide proper housing and vehicles to our veterans and not act in a shameful mattematter. -- manner. there are people who do that and federer instead of being homeless. it is possible to give every veteran proper housing. you can do it. you are the president. >> i am not a magician although i do try to make decisions that people expect me to. it is the duty of any executive, and the leader. over three years ago, may 7, 2008, i signed an order whereby all veterans would be given apartments. your asking me this question. perhaps it is time to make these decisions and not to abuse and humiliate our veterans. i have already made those decisions. it is pointless to talk about that. everybody who could have made such decisions at different points in time after world war ii was over, there were so many more veterans. i can remember the mid-1970's how the great victory day was being celebrated when they were young. there were not that much older but they have the same problems. the government did not give a damn about them. that is something that really hurts. that is why i believe that everybody must do today what he or she can. i was in a position to make a decision, make sure that veterans were given housing, and i did that make -- i did make that decision. we were talking about billions of rubles worth of housing. people would tell me, there are not that many veterans laughed. veterans will not get that housing. their children will. this is something that children and grandchildren will have. this is immoral to think like that. the government must at some point to recognize what those veterans did for all of us. i will tell you this. even if they leave this life understanding they have something they can hand over to their children and grandchildren, that will make them happy. these decisions must be executed. there are significant amounts of funds being spent on them. this is not happening without problems. there is abuse. something has to be looked into and one has to be sensitive. i have looked at this situation, it was enough to call attention to this for which i am grateful to the press. the problem was solved. this is an ordinary thing but it does not mean that they should not be responded to. the decision that is embedded in the order, there will be followed through. whatever the cost is for the government. ok. the village. yes. i will let the agrarians ask a question. i would like to give the floor to our major media outlets. but may give the floor to ntv. it would be wrong to not let the three major networks ask their questions. >> thank you for not forgetting about this. i did want to ask a question but colleagues have asked and beat me to the punch. >> ask one more time. >> what i was coming to this conference i was sure the question about the second presidency and a relationship with britain would be asked every other minute. >> i will ask about putin. would there be a situation where there are two candidates? you and the prime minister kamara or is this -- everybody will run independently? >> le'ron independently but take part together? >> it is clear that one party cannot nominate two candidates. you would have to wait another party. >> you did say that in the long term, the president -- could this be brought closer? could you lead an existing party or put a new one in place? >> thank you. let's talk about representation one more time. as i was answering our colleague any decisions had to be thought through. these are not toys. where are holding our hands the future of a vast number of people. this is not something we are making decisions on to appease our ambitions and decisions on whether or not to run must be based on that. my relationship with my colleague and partner is not just something that is commonly known as -- [inaudible] this is a relationship that is over 20 years old. we know each other and fill each other and we are intellectual comrades in arms. whatever they may say about this but we have very close approaches to the key issues of development. does not mean that we see eye to eye. every individual has the right to his or her own sensations, feelings, and their approaches. as far as strategy, we're close. otherwise we would not be able to work together. if we were not, this political partnership would have fall apart and we would have a different political landscape today. that is what the decision must be based on as to what to do next. i believe that there is competition that is healthy and helpful and competition that leads to a blind alley. leads into a dead-end and we're hoping that as appropriate decisions are being made about who will run for what post and who will do what in the future, we will be guided by this kind of responsible approach. responsible about the nation and the people who live here. as part -- as far as party manipulation, if i were to run for president, i, of course, would like to rely on certain political forces. it is not possible otherwise and these would be political parties. we do not have that many. i believe that it is another bad thing. i -- we have left behind the era where we have a marginal political groups. if i do that, i would like to rely on those who nominated me before. can the president establish his own political force? i think the answer is yes. can the president become a member of a party? i already covered that. most likely, this is what will happen. most democracies are evolving based on this scenario. we at some point in time believe that if in russia the president leaves one of the parties, that will spell the end of the consensus this country needed. now, we do have political forces that have evolved and there are different ideas of how this country needs to be developed and improved. the president can leave one of the forces. there is nothing wrong about that. orders -- reuters, please. you are not going to use a microphone? just yell it out loud? >> you have been making efforts to improve the investment climate in russia. a great deal has been said and done. there have been situations like the recent failure of the transaction to swap shares. this is something that is seen by investors as a setback. here is my question. what mistakes did couldn't -- putin's government make and what conclusions should the government drawbacks you have said as far as strategy, u.n. you have been depue meagha oppsoitosite. investors are serious about the case and could you explain this, could you clarify this? >> investment climate is the single most important component of our success. i covered the subject today so i will not say anything extraordinary but i promise you i will revisit this issue surely at a forum that will be taken place in st. petersburg where i would like to invite all of you. major projects are part of the investment climate. i do not know what the final outcome will be. we put aside the difficulties involved. i think that those who were involved in the preparation of this transaction should have paid more attention to the details of shareholder agreements and legal matters that always come up when major documents are being prepared. if you will, this should have been more thorough due diligence done and i do not think this was done which led to complications and to collisions with other shareholders. this is something that must be avoided and one has to reach agreement before. if the deal does go through, i will be happy. it is not that bad for this country. as far as strategy. when i was saying that we have similar or identical positions, me and the prime minister come out here is what i meant. we have the same kind of education, legal education, we were trained as lawyers. we have similar sets of values. we both want this country to be modern. we want it to be effective, we want it to look good. we want people to have a decent standard of living. we want reasonable decisions to be made that can be executed and implemented. we want him and rights to be complied with. we want there to be a modernized, a diversified economy. that does not mean that we see eye to eye on tactics. in an absolute, complete white. i do not think it is bad. truth should be the product of interaction. sometimes even collisions and this is what guarantees forward momentum. perhaps my position is somewhat different from that of the prime minister. he believes that modernization is a gradual movement. i believe we do have a chance and we do have the strength to carry out modernization faster without any damage to what has been done before and to achieve good results. and to make a quantum leap forward. but that requires a lot of work. everything else i think is tangential. the final subject and our colleague has asked that question. the colleague that represents [unintelligible] radio has asked the question. >> with a year to go, your presidency is over. there will be many important events. looking back at the years that have already passed, could you tell us about your main achievements and could you speak frankly about your setbacks? that is what they colleague was asking about. >> i do not think i will surprise or maize anybody if i say that the obvious successes and the important achievements over the last three years are that what might have been the most difficult period of development. the growth of unemployment. we did not drop the ball as far as development. we carried on. all the key programs remained in place and it was not a dramatic deterioration of the standard of living. just the opposite. we recovered quickly and we are moving forward. that is important if we remember the sentiments that are still quite strong in many european countries. countries that are more successful in certain ways and more affluent but we do not have the processes that are taking place in the financial sector of spain, portugal, and greece and we were able to consolidate our selves although it was difficult. once -- we were able to execute a very clear-cut foreign policy which has resulted in a decrease of tension between us and the number of countries. that enables us to develop this country without spending so much time on other tangential problems and we have been able to defend ourselves and today, we can defend ourselves. we can defend our independence, and our sovereign approaches. what i am referring to is the most complicated events, putting the advance of 2008, it was important for this country to not fall apart. to feel strong. irrespective of how these events are interpreted by other countries, it was important for us. as far as setbacks and failures. the answer is obvious. we have not been able to improvt we have not developed as fast as we would have liked to. we are dealing with social matters, but we still have a great deal of problems. there is still a lot of poverty in this country. there are still individuals who are living below the poverty line. there are approximately 13% of them. that is too high for a country like ours. only recently, the number was 30%. there is a very substantial agenda. we have not been able to diversify our economic situation as much as we would like to. we have not been able to abandon our commodities driven growth. yet this is not reason enough to be depressed. this is an agenda for us to execute in the future. thank you very much. [applause] >> one last thing -- i would like to express that everyone who has not had an opportunity to ask the question today will get another chance. all the best. [applause] host: >> president obama will be at the state department tomorrow to deliver a speech on middle east policy. we'll have live policy beginning at 11:40 eastern. later, the former director of national intelligence, dennis blair, will talk about the reform of the intelligence agencies. the will testify at a hearing of the homeland security committee. what's it like that 1:30 eastern. >> this weekend on booktv, the gaithersburg book festival alive with authors on the gulf oil spill, wall street, and the universe. plus a panel discussion of the book industry. the former ambassador to yemen on the u.s.'s counterterrorism efforts. afterwards, the most significant standoff of the cold war era -- the berlin wall. look for the complete schedule at booktv.org. >> history is much more than just politics and social issues. it is also medicine, science, art, music, theater, poetry, and ideas. we should not lump things into categories. samuel morris, harriet beecher stowe, thomas edison, henry adams -- sunday night on "q&a", part one of the americans who made the greater journey at 8:00 on c-span. >> at the pentagon today, defense secretary robert gates said there is no evidence that senior pakistani leader's new osama bin laden was in pakistan. secretary gates was joined by joint chiefs of staff's chairman admiral mike mullen. this is about 30 minutes. >> the president made clear that before making any specific budget decisions we must first conduct a fundamental review of america's military mission capabilities and security role around the world. today i am announcing the framework of the comprehensive review that the department of defense is launching to inform future decisions on spending on national security. for more than two years, the leadership of this department has worked on reforming the way the pentagon does business and responding to the difficult fiscal situation facing the nation and making sure our military has what it needs to protect our interests. this effort began two years ago with an overhaul to the department's approach to military apprehension -- acquisition. it continued last year with a companion -- campaign to generate savings from excessive overhead that was reallocated to the services for reinvestment. the goal of these efforts was to carve out enough budget space to preserve and enhance key military capabilities. the new comprehensive review will ensure that future spending decisions are fastest -- are focused on strategy and not simply an accounting exercise. the goals will be to preserve the u.s. military capable of meeting national security priorities even as a fiscal pressure requires reductions in the force. we must reject the traditional approach of applying across the board cuts, the simplest and most politically expedient approach both inside and outside this building. that kind of an approach preserves overhead and maintains structure on paper, but results in a falling out of the force from a lack of proper training, maintenance, and equipment. we were there before in the 1970's and 1990's. this review will be guided by the national defense strategy, the national military strategy, the chairman's risk assessment, and the quadrennial risk review. will focus on policy choices first and corresponding changes in the dod budget second. the gdr shapes our capabilities, but there is not a strong analytical. this review will establish that linkage so we can see the and packs of changing qdr strategy on missions and capabilities. once these strategy options are identified, the review will consider the options. the review should develop specific program options that can be categorized in fort bend's. the first been is additional efficiency, continuing the efforts we lost last year. these changes would reduce the the cost with minimal impact on capability. we must be even more aggressive on bureaucratic excess and overhead before changes in capabilities and strategy. while i believe we can identify additional significant inefficiencies, but one not result in an efficient savings. therefore, a second band will involve a investigation of processes and mandates that drive the dramatic increase in operating costs to include the way we deliver health care, compensate military personnel, provide retirement benefits, sustain our infrastructure, and acquire goods and services. the third bend will contain options to reduce or eliminate marginal missions and marginal capabilities, specialized in costly programs that are useful only in a limited range of circumstances and contingencies. they are not central to our core mission or a lower player artiste. the final bend and the hardest category strategically, and i would say also intellectually, will be specific alternative modifications to the qdr strategy that this the capabilities needed to execute the strategy. this letter then it will be informed by all the other activities in this framework. this process must be about identifying options for the president and congress with the nation is willing to accept risk in exchange for reduced investment in the department of defense. the defense comprehensive review will be jointly led by the director of cost assessment and program evaluation, the undersecretary of defense for policy, and the chairman of the joint chiefs of staff. mr. chairman? >> there had and two dozen times where you have dealt with them extensively. do you think you misjudged their willingness to cooperate? do you believe them when they say that they did not know osama bin laden was there? what do you think of congress' request that we have actual results to seek out terrorists? >> i think the investments our military and i personally have made have been very important in terms of working a critical relationship. obviously we have been through a great deal over time, not just recently, and when you back away from this, the amount of training that we have provided in pakistan in terms of getting a growing terrorist threat that is very much in execution. pakistani citizens are dying regularly. that relationship has been a very important part in terms of their going after the terrorists in their own country. we have clearly have challenges with respect to the long-term strategic partnership. i have gone into this with my eyes wide open. we were not trusted because we left for a significant period of time. that trust will not be reestablished overnight. i think the region continues to be critical in -- tends to be critical. our relationship tends to be critical. there are things we think need to be done, yet from my perspective, we cannot nail that in and ask them to do this. i think it would be a really significantly negative outcome if the relationship was broken. from my perspective, that investment brought us to this position, which i think we need to leverage to sustain the relationship, not just that might level, but between the two countries. i see no evidence since the bin laden raid that indicates that the top leadership knew bin laden was there. >> i can understand congress' frustration. i think senator kerrey was pretty explicit in his meetings in pakistan that the circumstances have not led to a lot of skepticism on the hill and that u.s. assistance to pakistan is now more controversial than it was before. that said, i think we have to proceed with some caution. we do have a significant interest in pakistan. my own view would be that we need it to continue the assistance we have provided that benefits the pakistani people. coalition support funds or a reimbursement for services rendered for things they have a actually done. we have a very rigorous review process for those claims by the pakistanis. they are reviewed by our staff and by our embassy. they are reviewed again up here. generally we do not pay 100% based on their claims, but it is a serious process. i think we do need it to be cognizant of the concerns on the hill. i think the pakistanis need to be as well. we do have interests in common. >> senator kerrey went to islamabad and claimed that he pressed the pakistanies on pursuing the leadership of the taliban and also the hakani network. you have made it your job to provide protection to our american forces, but many of the attacks launched against americans are conducted from or watched from a safe havens in afghanistan. can you understand the frustration of the military and the american people at the apparent reluctance of the pakistanis to go after the leadership that has said safe- haven there for nearly 10 years? >> of course i share that frustration. i understand the frustration and i share it. i think we have an opportunity here. the pakistanis over the last couple of weeks have expressed the view that they are willing to go after some of these people. we should not repeat the bin laden operation because they will undertake this themselves. this provides us an opportunity and i think we should take them up on that. it also offers them an opportunity to address the frustration and skepticism. >> this is certainly not the first time this issue has been raised with the pakistani leadership. it is something that has been raised over the course of the last couple of years. i think they do understand it is a priority. i would just reemphasize what the secretary said it -- it is their desire to do this themselves. i think they certainly understand the importance of it. all of that said, they also have had some internal priorities as the terrorist threat has grown internally to them. their capacity in some regards -- by prioritized internally to go after them, but they know it is a priority for us. clearly, as senator kerry did, we need to all make sure that they understand very clearly that his priority is not going to go away. the safe havens for these leaders have to be eliminated. >> you say they understand, but have they made a commitment to the u.s. to pursue these leaders? >> i will be specific about hakani. the general has committed to that. at one of the issues that that is a challenge for us is that our clock moves a lot faster than his clock. that has been indicate -- that has been the case so far, and i think that will be the case in the future. it is not an excuse, but matching those clocks has been difficult. >> you were here last month in pakistan and talked about the strained relationship between the i.s.i. and the hakani. is it time to say to the pakistan as they clearly you have a relationship with them, but turned them over to the united states. >> my comments still stand from that perspective. i was very clear about the priority for the leadership in particular with respect to the hankani network and i would not change that. >> is that the right thing to do? >> our approach needs to continue to be with pakistan a very comprehensive approach across the totality of government. saying this is how we are going to do it will not answer the mail. it will have to be a comprehensive approach. the secretary talked about the resources, which are considerable. it is understandable that there would be those who would look at that. i understand that. quite frankly, the pakistani leadership would understand that. >> do you presume that someone in the i.s.i. new bin laden was there and was supporting him? >> i think there, with the evaluation of the sensitive site material and exploitation that is going on, it will take us awhile to see it there is anything else. >> i would echo what the chairman said. i have seen no evidence at all that the senior leadership new. in fact, i have seen evidence to the contrary. we have no evidence yet with respect to anybody else. my supposition is that somebody new. -- somebody knew. >> one or two missions will definitely be reviewed. what will be reviewed? can you give one or two examples? >> let me give you an example of the hardest bin in terms of the strategic alternatives. we have -- it has been our strategy for many years to be able to fight two major regional conflicts simultaneously. if he were to tell yourself that the likelihood of having two such flights simultaneously is low and you could, therefore, plan to fight sequentially, that would have a huge implications in terms of the size of force you need to maintain, but the other side of that is the risk involved if you are wrong. the other guys always have the vote. that is the kind of strategy and risk that we want to surface for the president and for the congress. what i am emmer -- what i am really working at is what we did in the '70s and the '90s, which would be across the board cuts. we have got to avoid that no matter what happens in this process. but the consequence of avoiding that is everybody from the services to the chairman do the secretary of this department make tough decisions and then the president and the congress make tough decisions because they have to accept responsibility for risk. i want to force that kind of discussion. if we are going to cut military and reduced the resources and size of the u.s. military, people need to make conscious choices about what the implications of that are for the security of the country as well as support the operations we have around the world. that is why i want this review in place, to provide the substance for making those kinds of conscientious decisions with the political leadership of the country i get assets says, "we are prepared to accept this risk in return for reduced investment in defense." >> to what extent will the $11 billion you are investing -- should be scaled back accordingly? >> first of all, the country needs the f-35. we need a fifth generation fighter in addition to the f-22. we must have that. obviously if you're going to change strategies or missions, that has implications for the amount of equipment you buy. i expect that to apply across the board, not just the the f- 35. everything in terms of looking at the strategic equations have to do with the amount of capability that you invest in. here is where the rubber meets the road -- we must buy eight nea new tanker. we must buy a fifth generation fighter. there are a number of things the army must reassess after afghanistan. and the marine corps as well to a lesser extent. there are some significant new investments that must be made, so help you pay for that in the context we are talking about? those are the kinds of hard choices i want to surface and have people address b b b, frankly, within this building and outside, the easiest thing is to say "cut defense by x%." i think that would be a dangerous approach. >> you've got everyone's attention when you said you were worried about operational security at camp lejeune. can you explain a little bit more with respect -- did you get sold out by the white house? it is clear that the white house was talking excessively about the mission. what was the agreement? did either of you gentlemen try to do anything? i am assuming you cannot give us any specifics, but can you say you have had to do anything to pop up security around the team and the families since they have expressed their concerns? >> first of all, in my comments at camp lejeune i did not single anybody out. in a way, everyone of you probably knows the answer to this question better than i do. my concern is that there were too many people in too many places talking too much. -- talking too much about this operation. we had reached agreements that we would not talk about the operational details. as i said at camp lejeune, that lasted about 15 hours. and so i just -- i am very concerned about this because we want to retain the capability to carry out these kinds of operations in the future. when so much detail is available, makes that both more difficult and riskier. with respect to the seals, in light meeting with them the thursday after the operation they did express concern, not so much for themselves, but for their families. all i will say is that we have been taking a close look at that and we will do whatever is necessary. >> from my perspective, we have got into a point where we are close to jeopardize in this precious capability that we have. we cannot afford to do that. this fight is not over, first of all. secondly, when you extend that to concerned with individuals in the military and their families, from my perspective it is time to stop talking. we have talked far too much about this. we need to move on. it is a story that if we do not stop talking, it will never end. it needs to. >> what do you say to troops and families in special operations to look at this and say they are concerned for their family. what do you say to them? >> their response inside the community is the same that we have that inside the military -- they are taking proper steps based on their concerns, first of all. secondly, the whole issue for us in terms of operational security is an absolute requirement. so many of the things that we do -- it is not all the leaks from one part of the government. we have had far too many retired members who have spoken up. we just need to get off the net. >> can both of you assure the u.s. that note money to pakistan allow them to broaden their nuclear programs? does the president and tend to ignore the war powers act? >> that question is above my pay grade. i would refer you to the white house. there are many lawyers at the white house. i am not one of them. >> with regards to pakistan -- >> of the coalition support funds, they have to document -- it is money they have already spent that we are reimbursing. they have to file a specific claim for these funds. how they spend money -- when we reimburse them, it is for a specific thing they have done with respect to the war against terror in pakistan or in support of what we're trying to do. >> your supposition is that someone in the pakistani government knew about bin laden's whereabouts. won't they encouraged to do what they have been doing? >> i would invite the chairman to comment. i would say if i were in pakistani shoes, i would say i have already paid the price. i have been shown that the americans can come in and do this. we have to recognize they see a cost and price that has been paid. but if the leadership has not been told, i have done as much accountability as perhaps anybody but i never fired anybody because i did not know about a problem. i fired them because once they found out, they did not take it seriously. if the senior leadership did not know, it is hard to hold them accountable. i do not know if you want to add anything. >> if they're willing to tolerate a mid-level people knowing, the supposition is somebody. we do not know if it was retired people or low level. pure supposition. it is hard to go to them with an accusation when we have no proof that anybody missed. it is my supposition and it is a supposition shared by a number that somebody had to know. we have no idea who and we have no proof or evidence. >> how important do you think this humiliation was in changing the pakistani mindset and going after higher value targets? they have been hesitant to do for us. >> we should not underestimate the humbling experience. the internal soul-searching that has gone on now. the impact of that. before you start to talk about external effects, i know for a fact that is going on and they are not true that. they have been through a lot. their image has been tarnished and they care a lot. they are proud military. can i relate that to any actions that have occurred? i would not make that direct correlation. we talked about senator kerrey's visit and other things we think are out there that actions need to be taken and now we will see. most of the focus is that internal focus to address the challenge, how did this happen and what should we do about it? and next steps for them internally. they are not ignoring the external requirements but most of it is internal. >> are you worried that recent events in pakistan have undermined the position of our best friends there? becasue they are -- because they're under pressure. going back to the budget, last time you raise the nuclear monitor come out -- the nuclear triad. is the kind of thing off the table? >> from the standpoint of the relationship and in my discussions since the raid, and other senior leaders, reaffirms the desire to have a relationship but we recognize it is going through a difficult time. the specific steps we need to take are yet to be determined. we need to give them some time and space to work on some of the internal challenges that came out of this while at the same time the things, there are some near-term things that actions need to be taken. he is not just a pure but he has been through a lot. and as the leader, i can tell you at the top of these organizations, it is a lonely place. from that standpoint, he is out with his military and working his way through that. i am sympathetic to his need to do that and at the same time with ahead. >> i would repeat what i said before. if the political leadership of this country besides it must reduce the investment in defense by hundreds of billions of dollars, i do not think we can afford to do anything that is off the table. >> thank you. >> next, a debate between the candidates. a senate hearing examining the future of nasa and space flight, and a news conference with the russian president. >> president obama will be at the state department tomorrow to deliver a speech on middle east policy. we will have live coverage beginning at 11:40 a.m. eastern. the former director of national intelligence is on capitol hill to talk about reform of intelligence agencies. he will be testifying at a hearing. watch live at 1:30 p.m. eastern. >> no one succeed in life by themselves. you must be willing to lead others, to listen to others, and love others. >> watched 2011 commencement speeches on c-span memorial day weekend and search past addresses from politicians, activists, presidents, and other world leaders on line at the video library where you can search, watch, clip, and share every that we have covered from 1987 to today. it is washington, your way. >> history is as you know much more than just politics and soldiers. it is also medicine and art and theater and poetry and ideas. we should not love things into categories. it is part of the same thing. >> sam comorans, harriet beecher henry adams. part one of two weeks with theidavid mccullough. >> next tuesday, voters in the 26 congressional district will select a representative to replace chris lee who resigned in november. the candidates met for debate earlier tonight at the studios of wxxi tv in rochester, new york. this is one hour. >> from the wxxi studios in rochester, voice of the voters. being held next tuesday in new york state. 26 congressional districts. -- 26th congressional district. i will be moderating tonight's debate. panel. me is jiour we have our candidates. they appear in order on the ballot. welcome. jane corwin. thank you. we invited a third candidate. he did not respond to our invitation. we did not invite the green party candidate because he did not qualify under the debate inclusion guidelines. let's get started. we begin with our opening statement, the order of which was determined by a coin toss. >> thank you. thanks to wxxi and wham for hosting this event. i look at the policies and i believe our garment is taking this country in the wrong direction. i came from a middle-class family. my parents did not have college degrees, we have no special privileges. we worked hard and took chances and we had great people and we were able to be successful. i remembered delivering phone books with my friends. i used to proofread the front pages on the graveyard shift. i came back and work on the family business and called on our customers here. i helped the chief financial officer with finances, worked a long -- alongside the ceo and helped with strategic decision making. by the time we sold the business, we created 700 jobs. that is something i am proud of. we had hard times also. we almost lost our house because it was the collateral on the bank loan. there were many times when we have trouble making payroll because the cash flow was tight. we did not take checks. those are the kinds of tough decisions that have to be made. i understand what it means to have tough times and i was not afraid to make the tough decisions. i look at what is happening now and i am afraid that the out of control government spending and excess of taxes are making it impossible for my children and all our children to have the same opportunities. i want to change the policies and create an environment where jobs can be created. i look forward to talking about them now. >> thank you. it is great for you to host this show the viewers can see the candidate. i enjoy traveling and having talks and conversations with hundreds of people in the diner's and the grocery stores and small businesses and here in rochester. it is a great experience. during those conversations, what do a lot of listening. i am hearing of the concern that we need to get back to work. wilson hear a lot of the need to get our debt under control. i also hear from these people. very strongly, loud and clear. the medicare program that is there to protect our seniors, this is a concern and here is what i am telling everyone. i will go to washington and work hard to help our small businesses by cutting their burden so they can have the resources to expand. i will work to cut spending but i will insure the wealthiest people pay their fair share just like the people on main street do. i have told them i have made a commitment and i will take that to my grave. i will fight any plan to decimate medicare. that is something that people feel passionately about and i am proud to receive the endorsement from the buffalo news, and in rochester, the democratic chronicle. they like my passion and my commitment to do what is right and i am looking forward to this debate. thank you. >> thank you. in this first round of questions, the questions will be directed to one of the candidates. there is a 2 minute response and a one minute to rebuttals. we will began with our candidates. >> your mother is quoted as saying, "she does not let go and does not take no for an answer. you are tenacious and fight for what you believe it in. that can be or indicate compromise might be difficult. many voters are frustrated about partisan politics and what often seems to be the inability to compromise. what examples can you offer to demonstrate you are willing to give up something in order to gain something else? >> bring my mom into this. she is right. i applauand passionate. i fought for people with a great deal of passion. we do not want to continue the partisan bickering. most of my supporters are republican business people who trust my judgment. i worked with republican legislators. we partnered on many issues as a county clerk and as a town board member. the republicans i worked with -- my record shows i am willing to go down to washington and do what is right. i have no problem standing up to my party when i disagree. you have to ask eliot spitzer and david paterson if i am going to do that. more than anyone, i have shown my independence and my willingness to fight and if there is an idea that comes out, i am with them. if a democrat has a better idea, i am with them. i have the temperament to work with both sides. >> you have a one minute rebuttal. >> i agree with you that partisanship is a problem and we have seen that in albany. the two years i have been in the state assembly i have worked hard to make sure that i work across the aisle and come up with the best solution that can be had to help the people in the community. i co-sponsored bills, working together to increase the raffle proceeds. not for profits can raise money. i also am working witon a bill t will allow them to expand their businesses and to grow. thate are the initiatives a we need. i am an independent thinker. there are issues i do not agree on. china and their policy and the manipulation of their currency. we need to go out there and make sure our trading partners are trading fairly. >> much attention has been paid to a videotaped incident between your chief of staff and jack davis. some have called it a set up. did you authorize the actions of your chief of staff, and have you considered firing him? >> i do not authorized that activity. my chief of staff was after hours and on his own time. i am -- not taxpayer funded time. i had no awarenes of it. i was preparing for debate so i was not aware of anything going on. the video speaks for itself and it is up to the people to decide. he is not acting as a member of the assembly or as my employee. i have no plan on doing that. >> you have one minute. >> someone on my staff who had done that, they would have been fired. >> thank you. >> the 26th district has been a conservative republican leaning district. some might argue it is in part because of a presence of a third-party candidate. how will you represent those who did not vote for you? >> i am -- my reputation will work across the aisle. i am not partisan and i will make sure those individuals know what kind of independent thinker i am. this is something i subscribe to. they are with me 100%. they do not support the idea of decimating the program for when our citizens need help, we will be there for them. i have talked to hundreds of people and there with me on the issues. ere is another scare tactics. the claims of decimating medicare was given a rating of liar, liar, pants on fire. i have many democrats who have supported me. >> our final question comes from sean carroll. you have supported a plan that would turn medicare into a voucher system. some indicate this is not popular with some americans. would you consider withdrawing your support of that plan and if not, what makes the ryan plan the best way to ensure the medicare program remains solvent? >> we have to get the facts out here. the plan i am supporting is not a voucher system. it creates medicare for anyone under 55. it would become like medicare part b where they government would pay to the insurance plan not, not through the individual. there is no about her. as far as additional costs, that issue was addressed through medicare part b through the epic program. i would be supportive of an opportunity to roll out that type of bill to address any additional costs that may be there. the important thing is we have a problem. if we do not do something about medicare now, the program will be bankrupt by 2024. 13 years from now. if we want medicare to be around for current seniors and future generations, we need to make changes now. i am supportive of a plan that will ensure that seniors currently get the benefits they are enjoying or expecting. anyone under 55 create a program that will have for the future. >> thank you. >> the republicans will be surprised to know that their plan is not a voucher program since they rolled out as a voucher program. it is a plan to tell people that it no longer have that guaranteed insurance are you paid into central high school job. that is not there for you and we will replace it with a voucher. here is a thousand dollars and you are on year-round. good luck. that is the program. that is not me talking. we ought to stay with the facts. it is a voucher program and end s medicare. it eliminates the claims they are shrinking that doughnut hole. even they are afraid. that is the plan out of washington and they do not like it. >> thank you. the questions will go to both of you. you have 90 seconds to respond and there will be ever bottle for each of you. before we go to the panel, i want to stay with medicare. really dig into the specifics. i will start with ms. corwin. what would you do to keep medicare solvent? >> do what the present -- plan proposes. the benefits stay as they are to ensure that under the age of 55 that insurance premiums are paid by the government, to the insurance plan on behalf of the individual. the individual would choose the plan and it would be mandated. i would fill that doughnut hole and fill that with an epic type program which would guarantee for the insurance premiums. we have to take action now because my opponent is advocating to do nothing. someone at 55 will turn 68 and have no benefits if we do not do something now. raising taxes will not cover it. we cannot raise enough to fix the problem now. we have to take other actions. i have yet to hear of any plans coming from any other opponents. kick the can down the road and ignore the problem because it is not expedient and ignore the fact we are facing a crisis if we do not take action. >> you have 90 seconds. >> it is a traditional techniques. so you canyone t continue breaks. their record profits are up. it is a question of priorities. i support that 100% and i have ideas. no one is addressing that in washington and their congress is getting the underlying cost of medicare under control. why are the costs so high? i have some solid ideas and we do not have much time. there are new ideas and there was a panel put in place and i spoke to representatives to find ways to have treatment options that are more cost-effective. prescription drugs. if the house was not bought off by the pharmaceuticals, we would have a way to leverage our buying power. there was an option that was on the books. >> your time is up. >> my opponent was supportive of the health-care laws which included a cut. clearly we are hearing contradicting opinions. i am opposed to the obama healthcare laz and they do nothing to address the problem of health care and that is the excess of cost and i am supportive of programs such as having insurance plans compete across the state lines. pulling coverage for small businesses, a tort reform, that is something that not a lot of people talk about. >> 45 seconds. >> i am glad to respond. what my opponent is ignoring is something that was pointed out april 6. budget includes cost savings in reimbursements that the health care plan did. it is disingenuous to say you support the budget that includes the same cuts in medicare. you cannot have it both ways. >> thank you. we will turn things to the panel beginning with a question from decarlo. >> voters are frustrated over the fact that students are failing to graduate. the education system is not working. would you do to speed the pace of reform and what reforms would you favor? >> there are a lot of reforms in the reauthorization of the secondary education act. that will give us an opportunity to reevaluate the no child left behind provisions. i am getting mixed signals. we need to think carefully before we reevaluate it. i am not sure that we solved the problem that we need to. we need to support our parents and the head start programs are important. i oppose cuts in the federal budget. they need the leg up because they do not have the same opportunities as kids in other areas. that is important. i oppose the budget plans that would cut the programs and that is something that is important. to support our middle-class families. cutting programs at this time as the -- is the wrong time. >> you have 90 seconds. >> i agree that the act, we are not clear on how successful it has been. where i am supportive is introducing charter schools. we have seen tremendous success and i would support any initiatives that would encourage that and it gives parents the opportunity to have a more active involvement in their children's education. i keep hearing how my opponent wants to cut spending but is saying not here and not here. we have a 14.3 trillion dollar debt. $46,000 for every man, woman, and child. if we have to pay back $46,000, how would that happen? we need to do is invest in education but we have to invest in a smart way. charter schools and introducing competition is a great way to go. >> you have a 45 second bottle. >> i understand the need to get spending under control. entitlement reform, defense spending, is something that republicans in washington, my opponents, don't think is right. require the millionaires and billionaires to pay their fair share. when times are tough, we all have to share in the sacrifice and to think this our kids and middle class families and small businesses should bear the brunt of it an seniors in particular with the plan to turn medicare into a voucher program because times are tough, i think that's wrong. i look at our defense spending priorities, aid to foreign countries and a lot of other areas, i am serious about cutting spending, it's just about where you do it. >> as far as tax increases go, the problem is my opponents' plan for tax increases would put taxes on small businesses and as a small business owner i understand exactly what that impact would be. that's why we're in what's called a jobless recovery because the policies coming out of this administration are against small businesses and prevents them being able to create jobs. we need to keep more money in the pockets of small businesses so they can invest in themselves and new workers. that's very, very porn. i'm in favor of simplifying the tax code and making sure there aren't loopholes for big corporations to take advantage of but i think we need to bring more profits from our corporations back home from overseas. >> your question will be directed first to ms. corwin. >> it's about gas prices. in the buffalo-rochester area, the average price is about $4.05. what, if anything, do you think the federal government should do about the price of gas? >> the problem we have right now, jim, is we don't have a comprehensive energy policy. we depend too much on foreign oil. what i propose is that we do more drilling domestically, both in the gulf coast, north dakota, alaska, i think we can also look at drilling for natural gas. we keep hearing about the her se ulous shale here in southern new york state. in my district, i have vertical gas wells, that i have farmers and property owners that have, it can work but the regulations need to be in place to make sure it's done safely. i would support any initiative to create the regulations to make it safe. i believe we can do that and that would go a long way to helping reduce the gas prices. >> energy costs are too high in this country and i disagree with the philosophy of the ryan budget once again which my opponent supports, which continues the huge taxpayer giveaways to big oil in a time of record profits for them and high gas prices for us. this goes back to the 1970's, how many of us thought that was the last time we'd be beholden countries and their politics in thddle et for our oil? we didn't learn our lessons then, i hope we learned them now. i am supportive of looking for domestic sources but to continue taxpayer giveaways to big oil which are recorded in the ryan budget, i think are wrong. if you talk to anybody in this district, they agree with me as well. >> ms. corwin? >> i think in addition to the drilling, we should look into reducing subsidies on big oil companies as well but we have to make sure we have them there for the small oil companies because increasing the competition and the industry will help control prices. and i'm also supportive of renewable energy but i believe the renewable energies need to be researched and developed in the private sector or in partnership with a university. but it's important that the consumers pick the winners and losers when it comes to renewable energy. i believe that we should be eliminating subsidies to big oil. >> thank you. >> it's part of the ryan budget to continue the subsidies so you support the ryan budget, that's all i say, i support that and i'm consistent that i oppose the ryan budget plan which continues those subsidies that none of us afford. >> jill's question will go to ms. hochul first. >> there's been a lot of talk about medicare, what about social security? there are a number of programs ailed at addressing long-term support for them? >> i go back to when the long-term sustainability was in question. what i saw was a bipartisan approach, senator moynihan got together with tip o'neill and worked with ronald reagan at the time to come together and come up with solutions. part of the problem comes down to high unemployment. there's fewer people paying into the program for their future than used to be. all these programs are driven by the fact that we need to get more people back to work, i'll go back to washington, open up the tax code and find ways to help support the small business on main street and create jobs so those employees pay marleau into the system. it's a long-term solution, that's the direction we need to be in. our unemployment is too high in this country, even here in the -- in the 26th district. that's bad. my capacity as county clerk, i get my arms around this. i have a close sense of the pulse of what's going on in this district and what i see the businesses in my community that are hurting. if we can create the opportunities for small businesses to grow, a lot of problems take care of themselves. >> ms. corwin? >> going back to the facts that president obama and the trustees of the social security fund, the people running the program, have come out last week and said if we don't make changes to social security, the -- social security fund will be bankrupt by 2036. that's not a scare tactic, that's a fact coming from the democratic admission right now. we need to address social security. what i would propose is whatever we do, we make sure we're not raising social security taxes, make sure we're not privatizing the fund and make sure there's means testing so those who are wealthier don't receive it's checks and those who need it more or those who are ill would be able to receive them. overall i think we need to address the program but right now i'm focusing on medicare and medicaid making sure we come to the resolution on there because again until we solve the problem, we're not going to be able to stop the bankruptcies from happening. i have not heard plans from the other side. i keep hearing poking holes, let's come up with a real solution, let's have a conversation about what we can do to solve this problem so that seniors and people who really need these services, need these benefits continue to have them in future generations. >> thank you, ms. hochul, you can respond? >> social security that we've paid into our entire lives, you're going to pull the rug out from under people when they need it. we need to get it under control but that's not fair. we make a promise to our employees that when they worked their entire lives, when they reach a certain age they can count on, they paid into social security and medicare. we need to be the responsible ones to solve these problems, put the tax burden where it belongs, stop the big taxpayer giveaways and stop trying to take care of the budget on the backs of seniors when it comes to social security and medicare. i won't go there. >> and you have 45 seconds, ms. corwin. >> we need to address the big problems here. if we continue to kick the can down the road and avoid making proposals we are never going to come up with a solution. quite frankly, that's why i got involved in government in 2008 at the assembly level any wayway. as a person from the private sector looking, it doesn't make sense to me. how can we continue to -- we recognize the problem, have the statistics to show what we're facing yet no one steps forward to introduce the plan. i'm introducing a plan, i'm saying let's talk about this, let's come up with a solution. all i'm hearing is, we can't do this, we can't do that. but i have yet to hear of any other proposal. >> sean carroll's question will go first to ms. hochul. >> i'm sorry, it goes to ms. corwin. >> all the candidates have said, we need to create jobs and government can only create the environment to create jobs. we've heard them so much they've almost become cliche. without falling back on a variation of those things, give me one thing you intend to do in congress to create jobs in the 26th congressional district? what would that piece of legislation look like? >> i'll start with public hearings to address the overregulation on the part of agencies. if you look at the e.p.a., at f.d.a., mlrb, you'll see that the regulations coming out of those agencies is really interfering with what's happening with small businesses. so i would start by having public hearings, look at those regulations see where we can start pearing those backs and -- paring those back and that will make a big difference. we can't raise taxes on small businesses. what we need to do is go back to the tax codes, simplify it so it makes sense to people, so it makes sense to small businesses so they understand what they're up against and address that issue. >> ms. hochul? >> our universities are great catalysts for jobs. i was at the university of rochester a few days ago taking a tour of the optics facility and i was so impressed to learn that because of a system they -- because of assistance they received from washington that unfortunately the ryan budget decimates, i'm talking about research and development tax incentives, they're able to be the incubator that creates jobs, 21 new businesses started as a result of initiatives at the university of rochester. if the ryan budget -- if the republicans have their way, that will go away. rochethser -- university of rochester is the largest employer around here itself. i want to keep those institutions healthy to help the maul businesses grow. it's been since 1986 since we had a major overhaul of the tax code. i understand we need to make sure it's a level playing field. our small businesses -- compared to how much the large corporations pay. >> and your rebuttal? >> there's more government. and that's what i keep hearing. at the end of the day, my opponent is very supportive of more government. at the d.m.v., she increased spending by 51%. at the auto bureau, 29%. you know, at the town board, increasing taxes 29%. the answer from the other side is more government, more spending. what happened to the private sector? what happens to having partnerships with the university of rochester to make those projects happen? i am absolutely supportive of government grants. i think in a government grant process the university of rochester would be successful. but we can't forget it's the private sector that knows how to create jobs, not government. thank you. >> i guess this comes out of the category of listen to what i say, but don't watch what i do. you had the chance to vote for a 10% across the board spending cut, you were one of two republicans to oppose it, i'm sure you'll say you wanted more but 10% across the board shows a commitment to cut costs. you can say you're going to washington to cut expenses but i'll look at the record and say, when you had the chance to do something meaningful, you stood with two other republicans against the other republicans and the democrats to not cut spending. we have to look at the record. >> what will you do to reduce the nation's deficit and rein in government spending? >> great question. it's on the minds of the people in this district constantly, that and medicare. i have said, this is where i differ with my opponent, i'm willing to put everything on the table, including entitlement reform, getting the underlying costs of medicare under control, and health care, i do have plans on that. let's look at defense spending. secretary gates proposed $167 billion in cuts. let's look at those. let's look at aid to foreign countries, like pakistan, they are not our friends these days. we need to get tougher. but i'm willing to look at, this is something my opponents and the republicans in washington won't do, raise taxes on their friends who are the wealthiest people in this country, the millionaires and billionaires and i think it's only fair in these timeses of record high deficits and we've got to get this under control that we look at everything and again not keep pushing the burden on our seniors and our small businesses and our families while letting everybody else get away with the continuation of tax cuts put in place years ago, tax cuts that led to our problem right now. anybody remember that bill clinton had a surplus when he left office, so this has just been the last 10 years when we got into trouble with excessive spending. i want to get it under control but we have to look at both sides of the ledger and that's something i'm willing to do, to make the tough decisions. >> merchandise corwin. >> president clinton had a republican congress, i think that had something to do with what was going on then. my point is, everything is on the table. i'm going take that as she's willing to cut entitlement programs. i am looking at a program to ensure entitlement programs are around for future generations. not just across the board cuts to entitlements. defense spending, aagree we should look at defense spending. we've heard stories about the $600 hammers or the two engines for the fighter jets. we need to take a look, we want to make sure our military has the means and the support that they need to be successful in their endeavors but we want to make sure we're not being stupid about spending. as far as raising taxes, you know, my friends who, you know, i'm protecting, my friends are the local gas station owner or the restaurant down the street or the try cleaner. when you look at a business like that, that's a $500 thourges business. that business would have increased taxes if my opponent were in congress. those are the businesses we need to be supporting. we cannot continue to raise the taxes because we don't have a revenue problem, we've heard this before, we have a spending problem. that's how we have a $14.3 trillion debt. it has to stop. >> rebuttal? >> i think my opponent has a television ad out that says i'm trying to cut entitlements. our local affiliate and independ fact check have all said tfs a flat out lie. everyone knows in this race if they've been paying attention whatsoever that, they know i'm the one person in this race who said i will not touch medicare. and now to twist my desire to have reforms to get the underlying costs of medicare -- of health care under control, to twist that, my opponent has been cut out -- called out on it. i disagree with the democrats' plans in washington which would have the tax cuts expire for those making $249,000 and above. i would raise it to $500,000. >> your time is up. ms. corwin? >> just to get back to, you know, the accusation here, you know, just because the buffalo news says it doesn't mean it's true. we can talk about the underlying cause of the problem with medicare being the obama health care laws but price waterhouse just came out today and said that it is expected that the national average increase in health care costs for the coming year will be 8.5% and partly, or in large part, due to ouh ba ma health care laws. clearly the obama health care laws is only increasing the cost and adding to the problems in medicare. we need to repeal those laws and provide a program for medicare to protect seniors now and for future generations. >> anybody want to rebut the dig at the media? our next question comes from jay, it's to ms. corwin first. >> you brought up health care, it's a major worry for families, those with health insurance have rising pleem yums, businesses struggle to cover their employees. a new law was signed into law but many argue it should be repealed. so should we keep the current health care law? should we change it? and if so, how should we change it? and should we repeal it and if that's the answer, how would you address the issues? >> absolutely. you're absolutely right. the obama health care laws passed last year are a disaster for small businesses. i've been traveling throughout the district and heard from many small businesses their concerns about the costs of health care. those laws did not address the increase in costs, it addressed access. but the real problem is that health care is getting too expensive and that's why people don't have it. we need to reduce the cost of health care. i advocate for a full repeal of the obama health care laws and address the problem, which is the cost. selling insurance plans across state lines, pooling coverage for small businesses, tort reform. the state of texas when they capped their noneconomic malpractice award at $750,000, they reduced health care costs but also had something else happen, they had doctors move back into the state. here in upstate new york, we have a doctor shortage unlike any other place. so i believe tort reform would go a long way to helping those two problems. talking to maul business ownerers, they're telling me in order to avoid having to address the health care issue, they're going to start hiring more temporary workers to avoid that, putting more workers into exchanges, which essentially nationalizes health care, and that's not something any of us want. that's how i propose we repeal the health care laws and once we get the costs under control, we can assure -- ensure we provide health care for everyone. >> the health care law passed last year is far from perfect. i've said that since day one. i do agree it did not get the underlying health care corses under control, much more needs to be done and i oppose the 1099 provision, an additional reporting burden on the small businesses often i'm glad that was fixed. we need to continue that kind of fine tuning. unlike my opponent who supported the ryan plan which did repeal the obama health care law, i am not prepared to say that someone with a pre-existing condition should no longer have health insurance. protection for them was eliminated. i'm the mother of a 21-year-old and 23-year-old. they are not able to go without health insurance. i want them to know they can be covered on their parents' plan until age 26. god forbid they get into an accident or anything happens to them. plus the tax law passed last year had tax credits for employees that provide health care. there's some good in there that i'm not willing to throw out the window. >> only 15% of the businesses would qualify for tax credit. as far as pre-existing conditions an adult children, we should be providing that coverage. if we tackle the real problem, costs, then we would be able to offer that. the problem with the obama health care law is also that it cut $500 billion out of the medicare and medicare advantage programs. i think it's disingenuous to say we're going to protect medicare when we're supporting a plan that cuts $500 billion. >> the ryan budget plan kept those costs of $500 billion so i don't know how you can say that -- that's washington political double speak. i can't say more than check "the wall street journal" article of april 6, it explains how the republicans admit the ryan budget actually says they're saving money but they continue those cuts in the reimbursement to hospitals and insurance companies under the medicare program. they're identical, you cannot run away from that, it's a fact. >> our next question is from jill, ms. hochul, you'll answer first. >> the united states has reached its $14.3 trillion debt ceiling, would you vote to raise it? >> only with spending cuts. >> ms. corwin? >> i would do the same thing. i would want to include spending cuts, something along the lines of spending limit that would make it a percentage of g.d.p., something that would be going forward because certainly if we want to do spending cuts as a straight cut, we'd have to talk trillions of dollars. but i want a measure to ensure we have spending under control in the future. >> anything you'd like to add, ms. hochul? >> aagree, we have to be reasonable. we have a temporary extension until early august but now is the time, responsible people in washington roll up their sleeves and get it urn control. i do not want to see a repeat of the discussion we had a short time ago when our country was brought to its brink of shutdown because people would not work together. i supported that compromise plan that continues our budget through the rest of this year, $38.5 billion in cuts, i support continuation of cuts as part of the package, so i think democrats and republicans need to get their act together and i look forward to working with them. >> i also support the $38.5 billion cuts but let's bear in mind that worked out to about a 1% cut in this year's spending and that isn't going to get us going in the right direction. if we need to talk in terms of trillions of dollars instead of billions of dollars because 23 we don't, we'll be coming up on this debt ceiling on a weekly basis. >> thank you. we now have a question from sean carroll, to ms. corwin first. >> i'm going off script already. i'd like you both to define what you see as the role in government. i hear both of you talk about the role in government. does an extra dollar spent or job added mean you support more government? does a dollar saved or a job cut mean you're for less government? could you define for voters what you see as the role for government? >> i absolutely believe in the private sector and the private sector's ability to create jobs. i also think the private sector is better, more effective, at delivering services. i think what the federal government should be working on are those things that have to be taken care of at the federal level, national defense, infrastructure. we need a safety net but we need to be sure we're in the bankrupting our children's future to provide it. >> as a member of congress, that's what i would work toward. looking at what issues matter most to the people in this district and going to washington and advocating on their behalf. . >> thank you, ms. hochul. >> i think you're hearing a defining difference between myself and my opponent. i believe our federal government will make a promise to our people, particularly our seniors, that when they get to a certain age, they'll have guaranteed health coverage through medicare, instead of saying limit it to the private sector and that's why we had to start medicare in the first place. our seniors were left to the private sector. they were the largest group of people in poverty in this country. our country finally said, you know what, we're good people. we don't do this to our seniors. i don't think we should break that contract we have. i believe we have to have rules for educating our kids. i'm not leaving that to the private sector. i want to make sure our kids have a chance at a good education, support that, support our universities, law enforcement, i haven't heard a word about law enforcement, how important that is to protech our interests, national defense, of course is a big category but i think we need to look out for people. that is the contract we have. that's the constitution. we look out for the good and welfare of our people. i have a different sense of it, of course private sector creates the jobs, guaranteed, but we have to do our best to make sure we don't get in the way. but we pay taxes into the government and it has a bigger role than simply defense and as limited mays opponent would make it. >> i believe the best government is the government closest to the people, which means close to the local level as possible. our education system is administered by the states. i think the states and local government should be doing that. i think the federal government's role is to, you know, offer a larger plan but it needs to really be decided at the state and local level. as far as the safety net, we have to have a safety net. that's why i'm working so hard to protect the safety net we have. i want to make sure that seniors today have the benefits they have counted on. i want to make sure that seniors of the future have benefits that they can count on and that's why i'm trying to protect medicare. >> your rebuttal? >> my opponent acknowledged that the health care costs went up 8% in the last year alone. the seniors of tomorrow are left out in the rain because the voucher program does not account for any escalation in health care costs. today's prices are what you're going to be dealing with for the next 10 years. i don't think it's fair to ask a kuhnle where the husband is 55 years old and the wife is 54, the husband gets taken care of by a program he paid into but the 54-year-old wife doesn't. i don't think we should have age warfare in this cupry. we have an obligation, we made a promise to people, we're going to take care of them. we'll fix the underlying costs of health care which drive the high cost of medicare but i'm not prepared to throw the program out the window. >> next question from carla, ms. hochul will respond first. >> what's your opinion on the repeal of don't ask, don't tell and the administration's decision not to enforce the defense of marriage act? >> i support the administration on both counts. >> as far as the defense of marriage act, i was disappointed in president obama's decision to do that. i believe that as the chief executive, his responsibility is to uphold the laws of the land. he takes an oath to that effect. when he arbitraryly decides not to do that, he's acting more as a chief justice as opposed to a chief executive. as far as the don't ask, don't tell, you know, it's my opinion that if the military leadership believes that it's an appropriate policy for them, it's up to the military leadership to weigh in and i support what they support. >> ms. hochul. >> i support the president's position on both. >> anything to add? >> no. >> woe now move to jim, ms. corwin will respond first. >> all the candidates in this campaign are from erie county. but this district includes portions of seven counties, many of them rural. assuming that jobs and taxes are important to everyone, what are the three most important local issues, as you see it, in the 26th district? no jobs, no taxes, that's everywhere. >> certainly i think again we have to ensure that you no, i, we allow -- that you, know, we allow the university of rochester, for example, they have tremendous research going on there. we should be helping the private sector to be commercializing some of the that research. i think that's a great area that as a federal representative i'd be able to get involved with and try to help. as far as agricultural issues are concerned, we want to make sure that agriculture, the number one industry in this district, we are allowing that to be successful. so certainly i think we need to be working very hard on the 2012 farm bill to make sure that the policies created through that are beneficial to the farmers in our district. i'm also supportive of initiatives such as those that will expand opportunities for western new york region. i think it's good to bring over new business and have our businesses have prunths to sell to others. >> ms. hochul. >> agriculture is huge in this district. what i'm concerned about is leaving our farmers out in the cold under the ryan budget. it eliminates $30 billion worth of subsidies curbly in the law. that's going to be tough on our farmers. the ones i visit with as i go through the district are concerned about not having enough. i hope to get a spot on the agriculture committee in congress so i can continue to look out for farmers. if you look at infrastructure in this district, about the bridges and roads, that's a place for government to step into and make sure we've got the resources allocated to this area to ensure that our roads are safe and we're there to be able to transportation goods and services across our highways. the other thing i think would be interesting is an issue i went into not long ago, a farmer came up to me and gave me a plastic bag that had -- >> your time is up. >> yes, absolutely, again, going back to the agricultural issue it's the number one industry in our area, the former representative of the advisory board, the agricultural advisory board, i would continue with that, that way i have the ability to reach out and communicate with the members of the agricultural community to give me direction as to what kind of policies they're looking for to be successful, also to be part of the agricultural committee in congress would be terrific. our dairy farmers have great ideas. they're talking about solutions to the subsidy programs, programs that would be much less costly an give them benefits they need to be successful. i would look forward to working with our agricultural community. >> 45 seconds, ms. hochul. >> i think we could be a catalyst for alternative fuels. we've got the niagara falls, the wind turbines, i think we should make the corridor between buffalo and rochester an opportunity to be showcase for new innovative ideas for alternative energy research. i want to go to washington and partner with the right people to bring resources back here. i think it's very exciting. this could be a replacement for our old reliance on the manufacturing base which unfortunately due to trade agreements like nafta which i don't support that have left us a a lot of vacant buildings. i think we need to start reengineering and have new industries here. >> that ends our question round. we are now going to go into closing statements. we have about a min and a half for each of your -- a minute and a half for each closing statements, the order was determined by a coin toss, ms. corwin you go first. >> i thank all of you for this opportunity to have this hour, this has been terrific. we have a clear choice among the candidates in this election. i am very much a believer in cutting wasteful spending and i have a track record for doing that. my opponent increased spending both on the town board and as county clerk. i support reducing taxes. my opponent made it clear she intends to raise taxes. raising taxes on small businesses will do nothing except stop small businesses from creating jobs. that's the number one thing i'm hearing about in this district is people want jobs. raising taxes on small business is going to kill that. i'm also supporter of reducing regulations on businesses as well. i think it's important that we get the private sector partnering more with university of rochester, university of buffalo to make sure we are commercializing all the terrific research coming out of our university system. and helping kodak and companies like that. kodak was a major employer in this area and still a significant employer. we want them to bring their overseas operations back to the united states and invest in the people here because this is where we want the jobs to be. we have a tremendous work force. we want to encourage development and research and investment here in western europe and i believe we can do that if we get the policies in the right order. i want everyone to understand that i come from the private sector, i came from a family situation where i lived the american dream. i am running for congress because i want to preserve that american dream. to me, that's what this country was founded on. that's what our constitution calls for. that's what i want to go to washington and fight for. >> thank you very much. your closing statement? >> i want to thank you, julie and our panelists and jane for participating. we are a few days away from a very important election day. i think these debates have given people the opportunity to see the cliss tall clear differences that lie between us. it's all a question of priorities. you've heard my priorities. my priorities are looking out for the middle class, the maul businesses on main street, our families and you know i'm looking out for our seniors. people across this district are worried. they don't want to lose the guaranteed health insurance through medicare they've been promised from our government their entire lives. i feel passionately about that. again the priorities, i think that when times are tough, let's cut our deficit, let's cut our spending but i'm not prepared to throw our senior urn the bus and make them bear the brunt of our excess in washington while letting the wealthiest people in this country not have to pay their fair share of taxes. we continue to allow corporations that ship jobs jeaver seas to be able to get off with corporate loop hoes and tax breaks not available to mom and pop businesses on main street. it's all about priorities. i'm so proud to have a chance to run in this race. i'm a passionate person, i'm a fieger, i promise if given the honor of people's vote, i'll look out for them every single day. thank you very much. >> this concludes wxxi's voice of the voter debate between the candidates in new york's 26th congressional district. thank you for joining us. our participating candidates, kathy hochul and jane corwin. for our reporters, we had wxxi's -- wxxi's voice of the voter debates are supported by the rochester area community foundation. i'm julie philip reminding you that the special election is next tuesday, maye 24. from the wxxi studios in rochester, good night. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next on c-span a senate hearing examining the future of nasa and space noo flight. then a news conference with the russian president. and a debate between the candidates for the special election in the 26th congressional district of new york. on tomorrow's "washington journal" a look at the g.o.p. presidential field with tom davis of the republican mainstream partnership. consumer product safety commission chairman ines tenenbaum. "washington journal" begins live at 7:00 a.m. eastern on c-span. >> history is, as you know, is much more than just politics and soldiers. and social issues. it's also medicine and science and art and music. and theater and poetry. ideas. and we shouldn't lump things into categories. it's all part of the same thing. >> samuel morse, james fenmore cooper, john singer sergeant, henry adams. sunday night on "q&a" part one of two weeks with david mccullough on the guys who -- on the americans who made the greater journey to 19th century paris. at 8:00 on c-span. >> now available, c-span's congressional directory, a complete guide to the first session of the 112th congress. contact nsks including twilter information, district maps and committee assignments. order online at c-span.org/shop. with nasa's space shuttle program ending in july after the final shuttle mission, former international space station commander frank culberson testified before a senate commerce subcommittee today on the future of nasa and human space flight. captain culberson's last mission was in 2001 when he went to the international space station aboard shuttle endoe -- endeavour. the hearing was chaired by florida democratic senator bill nelson, also a former astronaut. this is just under two hours. >> good morning. just a few weeks ago we celebrated the 50th anniversary of human space flight an the first flight into suborbit by alan shepherd and then the president's bold statement to go to the moon within the decade, that was within nine years. and that was announced just three weeks later. i remember when, years ago when i was a young congressman, one day i was on the floor of the house and the speaker, tip o'neill, saw me and he motioned me over to silt down with him. and he knew of my participation in the space program and he says, billy, let me tell you, he says, one of the times i was a young congressman from boston and i was down at the white house and he said, i'd never seen president kennedy so nervous. he said, he was just pacing back and forth like a cat on a hot tin roof and he said, i called over some of the white house aides and said, what's wrong with the president? and they explained to tip that we were getting ready to launch alan shepard on a red stone -- redstone rocket, the soviets had surprised us three weeks earlier , weeks earlier, by putting gargarin in orbit an here we are on a rocket that didn't have enough throw weight save to get that mercury capsule up into suborbit and the whole prestige of the united states was on the line. and of course the rest is history. alan shepard flew, then gus grissom flew, even though his capsule sank in the atlantic and he had to swim for it. in the meantime, the soviets put out tetof, a second orbital flight and then 10 months later, here we put that redstone -- i mean we put that mercury capsule on top of an atlas rocket and john glenn climbed in knowing it had a 20% chance of catastrophe. and then, of course, the rest is history. and these sesses in space have become an expression of our technical prowess, a i nounsing to the rest of the world just how capable we can be and how this spirit in this country, this can-do spirit, can overcome extraordinary obstacles. well, we have enjoyed a steady stream of benefits that have come from the concentrated investments in enabling the technology and producing space applications. basic research, human exploration, earth observation, national defense, just a few of those that had resulted from us being a leader in the global space economy and as a result, the spinoffs have improved our livelihoods of all of us earthlings. the technology spawned over the last 50 years have changed the way we live. space-based technologies have become pervasive to the point that many times we don't even realize we were relying on it. and i am just astounded over and over that people say, well, nasa needs to advertise more what it does. nasa does. every year they put out a book of spinoffs and you think about this book being put out for several decades just how many of those technologies that have spun off have added up. not only g.p.s., but look for the data, look at the data for noaa. what that's done. for weather and prediction of storms, look at the nasa satellites that complement the earth based observations. not only weather but climate change, the space assets have changed the way we defend this nation. and they've been integrated into nearly every aspect of the u.s. military. as well as the intelligence operations. that now we see the fruits of in plend -- blending the intelligence community with a surgical military operation. and these benefits along with the numerous spinoffs and the efficiencies gained through the application of space technology has provided this nation with a significant return on investment. now, we've gathered up some high powered folks here to talk about the importance of space activities and the contributions of these undertakings to our national priorities. frank culberson, a retired astronaut captain u.s. navy, retired, he's a veteran of three space flights an served as commander of the international space station during the expedition three. that's another thing i'm just amazed, frank, when you talk to people, somehow they've gotten the impression that we don't have -- that the space program is being shut down. we've got a space station up there that has six astronauts on it and when the space shuttle docks, it's going to have a lot more astronauts on it. >> 12, now. >> and it is 120 yards long. you think looking in the stands of a football stadium down at the field from one end of the end zone to the other is how big the international space station is. and so we're looking forward to you sharing your experience of logging 146 days in space. frank slazer, vice president of space systems, aerospace industries association, this organization was founded in 1919, it's a leading trade association representing aerospace and defense manufacturers. eliot pull yam, chief executive officer of the space foundation since 2001. he leads the team to educate and inform government officials, industry, news media, and students about the space industry around the world. and dr. chris chiva, professor of astrophysical sciences and international affairs at princeton where he directs the program on science and global security. he was a member of the review of the u.s. human space flight plans committee and also known as the augustine committee, and is now a member of the president's council of advisors on science and tknology. i want to welcome all of you all. we are delighted that you are here. we want to get on the record your thoughts, what we can do for the future, a lot of penetrating questions. i want to turn to our ranking member, senator boozman and then of course i want to turn to our colleague, the ranking member of the full committee, senator hutchinson. >> with your permission, i'll yield to my ranking member. >> of course. while we are waiting on kay to approach the microphone, i just want to say, the successes that we've had in the nasa bill being passed last year as well as a lot of the funding that has now implemented the nasa authorization bill, this lady, this young lady is responsible for a lot of that. so thank you. >> well, mr. chairman, i thank you. we have worked very hard to try to move nasa forward and i think that the authorization bill that brought together the need for the commercial investment and the commercial opportunity along with the use of our work force that has the experience of so many years and -- in building the rockets and launchers that together we believe that we have a good way forward. and what i hope we can hear from you today is that we need to adhere to the authorization strategy and that that is the way that we should be proceeding. i think the chairman and i and senator boozman and senator rockefeller are all very concerned about how slow everything seems to be moving and in about a couple of months, we'll be relying on russians to take americans into space. and we have one more -- one more shuttle that will be going up this summer, but after that, we're looking at maybe 10 years, we don't really start foe cutsing on this and making better progress of russian taxiing for our astronauts to the space station where we must use the opportunity for the unique research in that space station if we are going to reap the benefits from the investment that we have made. so i'm hoping that we can hear from those of you who do have expertise in this area on how we can move more expeditiously and assure that we get our vehicle up and running sooner rather than later and secondly to fully utilize the space station and the research capabilities that it has. and we have astronauts in the air right now and we're all just wishing them well, we're very excited, it was really this committee that first heard from dr. king about the speck tromter and the ability to use -- the spectromoter and the ability to use that for the study of dark matter and cosmic rays for future energy resources and that excited this committee and now because of the work of many of us on the committee, including of course the chairman, we are going to see that be part of the space station and so now we just need to make sure we can get our astronauts there on our own ticket, i hope, very soon and we'll look to you all to help us figure out how to move it a little more quickly than it's moving right now. thank you very much, mr. chairman, and i do want to also thank senator boozman for jumping in on the subcommittee and he has just been the greatest advocate and quick study and he's enthusiastic and we really appreciate your being on the committee and all you're bringing to it. thank you. >> senator boozman. >> thank you and i appreciate the opportunity. thank you and i appreciate the opportunity to be part of the subcommittee and to help us move forward. the chairman and i were at a meeting this morning and one of the emphasis at the meeting was that we needed to work together. i think that the relationship that you and -- you, mr. chairman, the ranking member, senator rockefeller have had with regard to this issue is a great example of that and this is something that we all agree on that's so important to our country. i appreciate you holding the hearing today to help further inform the subcommittee and the record on the importance of our nation's participation in the global space economy and the tenuous hold we may have on our position of leadership in that realm. i'm grateful to the ranking member of the subcommittee, senator hutchison is with us today. her long standing dedication and commitment to the nation's space freshman is both an example and an -- space program is both an example and an inspiration to me as i settle into the committee as its ranking member. i want to acknowledge the successful launch on monday of the shuttle by mark kelly. i western those aboard the space station and those on the shuttle success in this important mission in providing essential spare and replacement parts of supplies to ensure the health and vitality of the space station systems. i had the pleasure of going to the kennedy space center last month for the planned launch of the mission. unfortunately, the electrical problems with the auxiliary power unit prevented that attempt so i was unable to see the launch but my experience during that visit was very meaningful. not only was i able to see and talk with some rarblingable, skilled, dedicated work force but i was able to see firsthand some of the facilities and features of our nations and the world's premier space port. i was also able to sense the spirit and dedication of the work force as well as their strong desire to have clear guidance and direction from their agency's leadership as well as congress and the administration for the future. these people know how to do what needs to be done to ensure this nation's leadership in space. all they need is direction and resources to go do it and they need that now. as you know, senator hutchison has note maryland times in committee we're at a crucial time of transition in our human space flight programs and are slipping quickly to the point where our ability to develop and operate a national space launch system will be in doubt. we simply cannot allow that to happen. the congress provided a clear path to move the nation away from that precipice in the 2010 nasa authorization act. it is past time for the provisions or requirement of that act to be implemented. i strongly support the committee's effort os to ensure that that is done. i look forward to the hearing and witnesses and more about the great benefits we receive as a nation from our space program and a reminder again of what is at stake. with that, i yield pack. >> senator rubio, did you want to make a statement? >> just briefly, mr. chairman, thank you for holding these hearings on the american space program, they're critically important, thank you to members of the panel for being here at such an important time as we are nearing the last launch of the shuttle program and continue to ask ourselves what the future of the space program is for america. as i read it -- reiterate everywhere i go, the space program is not something we do for fun. it has deep commercial impact, it has a significant national security component and it really helps, i know senator nelson will tell you in florida, we have industries who have -- who exist because 240e6 space program -- space program. they are spinoffs of things we learned along the way. the only caveat, the only concern i have and it's a deep one is where are we headed? literally and figuratively as a program? what is our goal in the near term and long-term for the program. i think this program has always functioned best when it knows where it's going, when it knows where its destination is, not just the place but its purpose for existing. i think the sooner we have that question answered, the sooner we fully understand what american space exploration is going to mean in this new century in terms of where we're destinned to go and where we want to be, the easier it will be to move toward that goal. i hope we make some progress on that during this year. thank you for holding these hearings an thank you to members of the panel for being
a "wall street journal" poll may surprise republicans. most people think government should do more, not less. i'm chuck todd, savannah a busy day. >> good morning, everyone. i'm savannah guthrie. also this morning, president obama accused of a where's waldo presidency. we'll talk to the writer who penned that memorable phrase. the supreme court decision that shows free speech is not cheap. even the most offensive kind of rhetoric is protected by the constitution. we'll dive into that decision coming up. but let answer get to the rundown, libya is looking more and more like a civil war there. gadhafi is weakened but holding on and trying to retake the country's oil-rich areas in the east. meantime the world struggles to find a response to pressure the leader to go. let's get to nbc's jim maceda live in tripoli. good morning. >> reporter: -- we're moving toward a civil war, i would actually go on record as saying that brega what's happening is the first set piece, the first major set piece of the civil war. you've got two opposing libyan sides, two forces armed, they have weapons, they've got tanks. one side has war planes, they share the same objective, which is the oil refinery and natural gas facility in brega, so this is really it. yesterday was a bad day for the pro-gadhafi forces. they took brega at dawn, they lost it by noon. the rebels held it overnight, today there were more air strikes trying to soften up the terrain but there were no ground forces coming back in from the gadhafi side to retake that refinery, and gas facilities. so now we have that facility, which is the second largeest in the country secured now, completely by rebel forces. it wasn't entirely bad for the pro-gadhafi forces, because they did here around tripoli manage to take a couple of smaller less significant towns, still one that has a perch looking over the capital. here in tripoli, it is remaining quiet, but tense inside the city, outside you still have these rings of steel, dozens upon dozens of road blocks now lots of military hardware sealing off the capital. back to you. >> jim maceda in tripoli for thus morning, thanks very much. savannah, president obama yesterday came into the press briefing room. >> yes. >> was asked if he'd comment about libya, said no, no, no, no, no, tomorrow. >> tomorrow is the day. we have seen the written statement from the president calling for gadhafi to resign but still has not come out on camera and made a forceful statement saying he thinks gadhafi has to go. today may be the opportunity for him to do that. he has a news conference scheduled with mexican president calderon. we may finally hear from the president. >> he promised reporters i'll take questions on libya, almost like i know i got to say something. capitol hill the fight over the budget cranks up big time today. democratic sources tell us the vice president, white house chief of staff and budget director will meet with congressional leaders on the hill to try to hammer out a deal. our latest nbc news/"wall street journal" poll shows how divided the country is on the basic question, how much should government do. this might might catch conser conservatives by surprise, 51% want government to do more, that's the highest number on this question that we test in the last two years. 46% said government should do less. mark moret is nbc's deputy political director. tell us about independents on this number as well. >> that was one of the most striking results, it was a majority of independents, 51% of independents want the government to do more and that number along with others in our nbc/"wall street journal" poll show there might be a little bit of warning sign for republicans as they pursue really deep budget cuts. our poll also asked the question, what are some of the most popular programs the cut would or some of the most least popular programs to cut. the most popular programs to cut or things to cut would be a surtax on millionaires' income, eliminating earmarks and also eliminating subsilds for oil and gas companies. the least popular things, and this shouldn't be a surprise, a lot of us who follow american politics, cuts to meld i care, cuts to k through 12 education and cuts to social security. we've heard the republicans might want to actually tackle entitlement reform in april. these poll numbers might give them a little bit of pause and our nbc/"wall street journal" poll looked at the 2012 presidential race, president obama is leading a generic republican 45% to 40%. when you match him up to mitt romney, goes up nine points and tim pawlenty, 19 points. chuck and savannah back to you. >> mark, quickly, will another senate retirement, it happened last night, tell us. >> daniel akaka, senator from hawaii will not seek re-election in 2012. that creates yet another open seat for republicans, but in a presidential contest in a statewide election in obama's home state, when he will be on the ballot might be tough for republicans even if they get their top pick, who would be a former governor linda lingle. back to you guys. >> mark murray with the political headline this is morning, no time yet for that meeting on the hill between the vice president, the budget director and the chief of staff from the white house. >> this is the -- >> are you doubting it will happen? >> the bully pulpit at work. the white house announced the meeting would take place. senator minority leader mitch mcconnell and speaker boehner have yet to say when the meetinging will happen. >> it doesn't bode well for break-through if they can't agree on a time. >> one person said we're not interested in doing a photo opp. if the senate democrats have a plan we can sit down and talk and that's what republicans want to do is force the democrats to come up with a plan. the vice president may or may not be meeting on the hill, president obama will be busy, said to host mexico's president philippe calderon for a series of meetings at the white house. drug violence in mexico claimed the life of a u.s. agent three weeks ago. set the scene for us for this meeting, jose. i know there are some tensions right now. >> there certainly are. good morning to you. as a matter of fact, this killing of agents about two weeks ago and the yours of another i.c.e. agent in mexico has really brought this story back to the front burner of people's consciousness. the fact is mexico as you've been reporting has been involved in a bloody war against the narco terrorist groups throughout the country for many years, 30,000 people dead. president calderon wants to talk about the fact some of the weapons that killed agents about two weeks ago originally came from the united states. is there a way the president of mexico will ask the president of the united states that arms shipment movement from north to south can be curtailed? and i presume that they'll be talking about the fact that the reason these drug cartels are working in the northern part of mexico is because they want to be as close to their clients as possible, who are u.s. drug consumers. >> all right, jose diaz-bellard, we'll see you later today at the meeting between mexican president and president obama. >> thank you. prosecutors said the murder of two u.s. airmen in germany appears to be a terrorist attack, a case they'll make when the 21-year-old suspect appears in court later today. anne thompson is in frankfurt with the latest. tell us the circumstances. there's been sketchy reports about what happened, what the gunman may have said before the shooting and why german authorities believe this is a terrorist attack. >> reporter: yes, there have been some reports, chuck, that he said "allah akbar," "god is great" before opening fire on the u.s. servicemen who were standing out in front of the bus at terminal two here at frankfurt airport. we have not been able to confirm that. what we do know is that the suspect, and his name is arid uka, a 21-year-old man from frankfurt, germany, and his relatives in kosovo say he is a devout muslim. the federals in germany have reason to believe that this was as they put it an islamic motivated act, and so they are looking into the background of this young man. his father spoke to a german tv network this morning and said you know, look, my son worked at the airport post office here. he had no idea of any kind of connection he may have had, his son may have had to an islamic group. so what happened yesterday, as the servicemen were coming from an airbase in england and they were headed to ramstein airbase in germany, about to get on a bus and apparently they encountered uka and german authorities say there was a disagreement between them, uka pulled out a handgun and started firing. he killed and wounded two service -- he killed one serviceman and wounded two, apparently outside the bus and went in the bus, and shot and killed the driver. the two wounded servicemen are here in frankfurt. they're at a hospital. one is said to be in critical condition, but we expect to hear more about their condition and just maybe hopefully what also transpired here yesterday afternoon when officials at ramstein airbase hold a press conference this afternoon. >> anne thompson in frankfurt with the latest, thank you. up next, the world's policemen, no more defense sec. tae tear robert gates blunt warning about american intervention overseas and is he pushing back of military involvement to bring the gadhafi regime down? we'll talk with pentagon spokesman jeff ma roll in a moment. and the superior court says the most hateful speech is protected by the constitution. is there any way to stop protests like these at soldiers funerals? we'll talk to pete williams coming up but first a look at the president's schedule tooled, as he greets the mexican president at the white house. you're watching "the daily rundown" here on msnbc. not funny. act my age? -why? -why? -why? i love the sun. past sun goddess. 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[ disco playing ] and this is to remind you that you could save hundreds! yeah, that'll certainly stick with me. we'll take it. go, big money! i mean, go. it's your break, honey. same coverage, more savings. now, that's progressive. call or click today. as we approach ten years of fighting in afghanistan and more than a year after president obama made afghanistan his war, announcing a troop surge at west point it's another west point speech that has a lot of people talking this week. >> it was a blunt warning from the man in charge with leading the u.s. effort. defense secretary robert gates. >> in my opinion any future's defense secretary who advises the president to again send a big american land arm yea into asia, the middle east or africa should have his head examined. >> and then there was this yesterday, general david petraeus, commander of u.s. forces in afghanistan took the extraordinary step of apologizing to african president karzai personally for the deaths of nine afghan boys killed when a nato helicopter gunner mistook them for insurgents. jeff morale, a lot going on. i want to start with germany. what is the latest you can tell us about the investigation. the germans might be ready to call this an islamic terrorist attack. >> it is a tragic occurrence. lost two airmen now in an attack. we've seen in the papers this appears to be a lone gunman who may have invoked religious motivation for what he did, some political motivation for what he did but we're still in the early stages of the investigation so i think it would be inappropriate for me to speculate beyond that. >> before we get to afghanistan let's talk about libya. there's a lot of talk these days about a military intervention of some sort, either unilaterally or in a multilateral setting on the part of the u.s. here is what secretary gates said about the idea of a no fly zone on capitol hill. >> there's a lot of, frankly, loose talk about some of these military options and let's call a spade a spade. a no fly zone begins with an attack on libya. >> it seems clear the pentagon is trying to push back on the talk of a no fly zone. you have secretary of state clinton and some at the white house saying this is actively being considered. is the u.s. speaking with two voices here? >> i don't think so. i against i would take issue of the notion they're pushing back. you've seen every time the secretary and chairman have spoken about this in the past couple of days it is prefapsed by the notion the president, the commander in chief deserves every option available to them. >> the emphasis is clearly how hard an option this is, how difficult it is. this feels like pushing back. >> loose talk jumped out. >> you all assume loose talk is in reference to another men of the cabinet. i think there are many people in the press speaking about this, many talking heads, other leaders around the world speaking about this. they in answers to very specific questions offered how complicated a no fly zone can be, and that people should be under no illusions that it starts with an attack on anti-aircraft facilities in libya. it's not as simple as moving an aircraft carrier and deploying a bunch of planes. you have to take action to make sure you have air dominance to secure the skies. so this is not, should not be interpreted as somehow an opposition to doing this, as much as it should be we need to think through all the ramifications of each of these options, as the president's considering them. but they are out to preserve as much decision-making space as the president needs to figure out how to proceed here. >> let's shift to afghanistan. secretary gates' comments certainly jumped out to a lot of people. and i guess my question was, was his remark in response to the fact that we have a drained force and basically fatigue in the u.s. military over dealing with two wars, or is this a reaction, a lesson from the two wars and in hindsight, this wasn't the best way to prosecute the war on terror. >> chuck i'm glaldd i got the question. i've seen this line hijacked for people for a variety of political purposes. this being a sign of some sort of catharsis he now thinks the wars were not wilese. i've seen it a subliminal message he wants to get out of afghanistan. all of that is psychobabble nonsense. he's on the record supporting the war, the lead proponent and deviser of the 30k troop surge option which is working great on the security front. this guy has been an outspoken advocate when we transition in july it has to be conditions based and measured. that said what did he mean? classic bob gates. he's been wrestling with the bureaucracy for four years trying to get the army to institutionalize the lessons learned in iraq and afghanistan, how to fight counter insurgentries, asymmetric threats, irregular warfare. the comfort zone of the army is in what it's done for decades heavy armored tank battles and so forth. we don't want them to revert back to that comfort zone. we need to make sure the force remains balanced because the threats they're most likely to face in the future are probably not heavy land armored battles, but more asymmetric threats. so it doesn't mean we turn our back on armor. we always have to have that capability in order for the president to have the full range of options to protect our national interest is. but we need to balance it out especially in an era of constrained dollars, and he'll offer a similar message on friday. >> he's speaking to the air force. >> to the air force, because they have very much the same internal identity struggles about are we fighter pilots and bombers? yes, you are but you are also guys who provide support to the war fighter on the ground through isr and so forth. >> this a farewell tour by the way? >> absolutely. >> last stop at west point, last stop at colorado springs? >> absolute, final messageness to the services. >> speaking of afghanistan, we mentioned general petraeus apologized for the death of nine boys in afghanistan who were killed accidentally. how did this happen and how much does this set back what the u.s. is trying to do? an incident like this goes so far beyond just the individual families. >> sure. >> that have been hurt. >> i also don't think it's extraordinarily unusual for him to apologize. he's done it in the past. he and president karzai have a candid dialogue on the issues all the time. >> what happened? >> they're looking into precisely what happened but i think there has been acknowledgment something went wrong such that nine boys were killed. there was a forward operating base coming under attack from indirect fire and they went back to the point of the attack, and took out those who were doing it, but obviously they were off on some of the targeting such that nine boys were killed. it's tragic. it does undermine our efforts and we work very hard over the last few years to try to minimize civilian casualties and doing a better job. >> private bradley manning who was in military kups di, he just had a slew of new charges against him yesterday. many people ralilsed the questin of the conditions of confinement, too draconian. you visited him and seen the conditions of confinement. how do you justify what the military is doing with regard to him? >> i don't know about many people but certainly some on the far left, a couple websites in particular, i guess one of the scholes on this network also made an issue of it saying he's being held in solitaire confinement, he's being harshly treated, treated differently than the other detainees down there. i wanted to see for myself. i went down with the department's general counsel and came away impressed about how professionally the brig is run at quantico. there are 30 cells in the brig down there, relatively small facility. every one of the cell sps identical so the cell private man something being held in, even though he's a maximum security detainee, one of two, identical to the immediate yaum security detainees, the seven others there. >> is it solitary confinement? >> not solitary. there's 30 people on a u-shaped corridor, so he's not in a hole. he's not away from others. he's allowed to have conversations with others on that corridor. the only difference really in how he's being treated than others is outside of his cell. he does not take his meals in the chow hole, but nor do any other maximum security detainees. he doesn't exercise out in the prison yard but nor do the others. he is allowed to exercise outside in a confined space alone. he's allowed to go to the gym if he prefers. he doesn't watch tv in the tv room. he watches in his cell. they roll a tv in front of his cell, he takes his meals in his cell. he's not being treated differently than any other maximum security detainee and not differently really that much from the medium security detainees. >> how about journalists? >> that's something we may want to consider because i think how it's been characterized just does not comport to the reality of the situation. there is a solitariesque confinement area for disciplinary problems. he's never been there. he's been exemplary in terms of behavior on the cellblock. the issue is he's being held in the manner he's being held because of the seriousness of the charges he's facing, the potential length of sentence, the national security implications and also the potential harm to him that he could do to himself or from others frankly who are being imprisoned, he be allowed to mix in the general population. this is because of the charges. >> geoff morrell on a variety of topics. >> i hate leaving it there, we could go another 20 minutes. good to see you as always. coming up next, why the supreme court is protecting this, protesters celebrating the depth of an american soldier at his own funeral. the high court says this is free speech. does the soldiers' family have any recourse? but first -- >> the clerk will call the roll. >> mr. akaka, no. >> today's "washington speak" it's roll call because retiring senator akaka is probably most famous for being the first name in the senate roll call. i just love hearing, mr. akaka, and no offense to the new roll call person but there used to be this very baritone deep voice roll call, caller in the senate floor, mr. akaka. mr. akaka, no. and that's what he just said to re-election. >> this means chuck is completely depressed at the resignation for no other reason, the roll call. >> i forget now i got to look at the alphabet, who will replace him. >> send us an e-mail dailyrundown@bbt. msnbc.com but you can still refinance to a fixed rate as low as 4.75% at lendingtree.com. plus, get the best deal or we'll pay you $1,000. call lending tree at... today. aren't absorbed properly unless taken with food. ey eye. with honey nut cheerios cereal. kissed with real honey. and the 100% natural whole grain oats can help lower your cholesterol. you are so sweet to me. bee happy. bee healthy. a controversial ruling from the supreme court upholds the right of a tiny fringe so-called church in kansas to picket military funerals. >> the west brough baptist church protested hundreds of funerals claiming god is punishing soldiers for the nation's tolerance of gay rights while millions of americans are disgusted by their tactics, the high court said the constitution protects free speech even if it is unpopular or offensive. pete williams is nbc news justice correspondent and there at the court when the decision was handed down yesterday. pete, you look at this decision, these egregious facts i think most people agree with that and yet this case was rather easily disposed of by the court, 8-1 ruling which is pretty rare with this modern court. >> and a very brief opinion, what the court said is these are, while they're crude they nonetheless are statements about public issues about the war, about the military, about policies toward gays. secondly, they did this in a public place, a public spot in maryland where the funeral was held and thirdly abided by the local rules on how close they could be to the church, and because of all of that it was clearly public speech, that's what the first amendment is intended most carefully to protect, and therefore you have to tolerate this kind of speech even though it might be offensive. the descender, justice systemule alito, the only who voted other way, fundamentally this isn't public speech. it may be interlaced with public speech but thenc essence was a direct attack on the family therefore it should not have the protections of the first amendment and the family ought to be able to sue but he's the only justice who said that. >> quick question, pete. some states have passed statutes to ban protesting at funerals to try to address this kind of behavior, would something like that be upheld do you think? would that pass muster at the constitution? >> probably not an outright ban but 44 states have imposed some sort of restrictions on protests at military funerals or funerals in general. they have to be so many feet away from the church, restrictions on noise and that kind of thing and the opinion seems to say that is a reasonable approach. >> and a little bit of breaking news here, pete. i got to ask you about a letter some members of congress have written to attorney general eric holder asking for investigation into possible threats against supreme court justice clarence thomas, his wife, ginny thomas and supreme court justice antonin scalia. what can you tell us? >> not much. i think it will get some attention, but i don't know that that's a result of an investigation. >> all right, we'll keep an eye on it. news conference scheduled at 1:00 own it. pete williams with the headlines from the supreme court thank you so much. >> you bet. other stories making held line this is morning, miss miss governor haley barbour is accusing the hoe ba ma administration of wanting gas prices to go up in order to increase competition for alternative fuel sources. the white house dismissed barbour's remarks saying they were "clearly made in the context of 2012 presidential politics." now that president obama has signed the short term spending deal, he wants congressional leaders to meet with vice president biden to work out a budget plan for the rest of the fiscal year but house speaker john boehner says instead of being a go-between the vice president could spend his time better by helping democrats come up with a plan of their own. >> it's hard to sit down and negotiate. we've done our work. i know where we are. they know where we are, but we don't know what their position is. but he'd be a far better use of his time. apple's ceo steve jobs made a surprise appearance yesterday at the much awaited unveiling of the thinner, faster ipad2. jobs, who has been on medical leave since january said "i just didn't want to miss this day." and the man convicted of asaps nating robert f. kennedy in 1968 will not be getting paroled any time soon. sirhan sirhan has not shown sufficient remorse for his crimes. you have to squint to find the president weighing in on major issues of the day someone says. and qui two rhode island politicians fathers were room mates at yale in the 1940s? the answer and more coming up on "the daily rundown." but basically, i'm a runner. last year. 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's critic s even some of his supporters are wondering why he's often slow to react to important issues. ruth marcus writes in "the washington post" the following, "there are a startling number of occasions in twi the president has been missing in action, unwilling, reluctant or late to weigh in on the issue of the moment. he's too often reactive more than inspirational, more cautious than forceful." >> ruth is getting a lot of attention for saying this is a where's waldo presidency. you think the president is deliberately staying out of sight on important issues? >> i think he's, for various reasons, and as i said in the column, it's not a question of where he wants to get and what his goal is. actually i agree with him on the goals. it's a question of tactics and strategy, and on each one, the white house can give you very complex and sometimes convincing explanation, well it doesn't make sense to weigh in at this point because of this consideration and we don't want to spend our political capitol here because this is more important goal, but when you connect the dots and you step back and you look at the totality, the white house has this bully pulpit, and it is choosing not to use it, in fact, its strategy more often than not is to step back, let the congressional leaders work this out. we're not going to get immersed in the details on health care and you want to say, where is the president? >> well they will argue and you alluded to it, they will argue, i had a similar conversation, let answer say in the last 48 hours, our job is to be the mediator, our job is to bring both sides together and if this is their operating principle whether it's egypt, whether it's libya, whether it's dealing overseas, or whether it's dealing with the senate democrats and the house republicans. >> i would argue with that job description. sometimes their job is to be the mediator but the president is, they don't call him the mediator of the free world, this he call him the leader of the free world for a reason. he is the person to whom congressional democrats look. there is a lot of frustration about where is the white house on the continuing resolution. >> they're very upset. >> i was going to say cr, but i know that's washington speak. >> that's okay. we've already defined it. >> and he needs -- if you look back at where president clinton was, for example, when there was a threatened government shutdown he was out there speaking up, drawing very clear lines, sending out his cabinet and senior staff to say these cuts will do horrible things to little children, to poor families. where is the. the? >> do you feel like the overall impression that's left is that the president is hedging his bets, just kind of holding back, waiting to see how things play out and then coming in at the 11th hour? >> i'm not sure i would even call it hedging its bets. i think it's a strategic disagreement about, between the media at the white house and white houses aren't filled with stupid people. it's not they haven't tried to think this through. i had an e-mail from a senior official early yesterday morning after my column ran saying, it was a cheap shot from the cheap seats. i don't think it was a cheap shot, but we do in the press sit in the cheap seats. they are working to a goal, i'm not sure it's always the most effective way to the goal because you can not get the country to be with you on important questions, if you are not telling the country where we need to go. >> for example, libya, the president has said and called on paper for gadhafi to leave, so far he's avoided opportunities to say so forcefully on camera, and there is a difference, is there not, between a press release on a saturday versus him coming out and forcefully calling for gadhafi to resign if that's what he wants to happen? >> you bet, and the libya thing has been very puzzling, because, as you guys talked about in the previous segment, there has been something of a cacophony of views and a cacophony enhanced by the lack of. ial words and not just twordswo paper. >> he never said, you look at his career, this is kind of who he is. whether it was at the law review, he wanted to bring the conservatives together and the liberal -- i mean, they would argue that he's uncomfortable being the person you are trying to push him to be. >> well, as i said in the column, on the sort of altutidinness, i don't think that's a word but when he's summoned to the moment, whether it's to talk in the convention back in 2004 about red american, blue american, bringing us all together and purple america or whether it's his most terrific moment, sad though it was recently in tucson where he talked about the need for healing and summon that up, on those levels of vision, grand vision, i think he's very, very good, and that's what people responded to. they didn't respond -- they responded to leadership, but on specifics, on here answer how we're going to get there, here's what we need to do, here's why we need to do it, not as good. >> ruth marcus writer of "the washington post" and getting some viewer e-mail with the west wing. >> i love this topic. we could go a long time. >> ruth, thank you. good to have you here. let's do our trivia, which two rhode island politicians' fathers were roomies at yale in the 1940s? >> what were they doing at yale? shouldn't they have been at brown? the answer, governor lincoln chaffee and senator sheldon whitehouse. coming up, america takes sides in the showdown over unions and the idea of collective bargaining. plus, how the. stacks up against possible republican opponents of the 2012 race, and there are two republican primaries. it's all in our new poll. >> our pollsters will be here next. but first, white house soup of the day. chili con carne. >> greatest phrase invented, everything is better with c con carne. >> and con bacon, right? come on. >> con carne adds, you can do anything. >> the daily rundown con carne. >> sounds delicious. we'll be right back. 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[ static ] ♪ i need a good time [ male announcer ] ecomagination from ge. it's technology that makes the world work. ♪ host: could switching to geico 15% or more on car insurance? host: what, do you live under a rock? man: no way! man: hey rick check this out! anncr: geico. 15 minutes could save 15% or more on car insurance. well, it's poll day here at "the daily rundown." our new poll hits on deficit reduction to labor rights to the 2012 presidential race and the president's approval rating, 48%, town from our last poll, i believe at 53%. >> it was about a two-year high when he hit that. we have a lot to cover, we bring in pollsters, fred yang, partner at hart research and bill mcateer from public opinion strategies. number one issue, 56%, when you combine first and second, job creation/economic growth. 40% said deficit spending, but tell us more about it. >> here's what happens. americans want jobs, jobs, jobs, that's tollally their issue. the republican party and core coalition, tea party, republicans, conservatives want the deficit. they have a core base focussed on the deficit and a country that wants this congress in washington to deal with jonze. >> we're showing here conservatives, mccain voters, tea party supporters, these folks picked spending and defini deficit over jobs. >> it may require further deficit spending at this moment to create jobs according to most democrats. >> well i think this past weekend the nations governors were in town, interesting juxtaposition, democrats talking about jobs, number one issue and the republicans seem mired in the wisconsin/scott walker issue which wasn't jobs. >> let's go to the 2012 field. chuck may be in despair we don't officially have candidates quite yet. >> buddy roemer. didn't test him yet in the primary. >> nevertheless we'll poll. our poll showed in terms of the 2012 field, huckabee at the top. does that surprise you bill? >> no. so far huckabee and romney are the relatively front-runners. this is a national poll based on name i.d. both governor romney and governor huckabee are broadly acceptable to most parts of the republican coalition. >> while national primary poll numbers are meaningless, iowa, new hampshire, we all know matter most we do learn a little something, there seems to be two primaries, among those who call themselves tea party supporters, huckabee had 27%, what struck know romney drops down to 14%. where romney gets his strength is from folks who say they're not tea party supporters, sits at 32% among the rock rib republicans, probably voted forever republican, that's what they do, but they're not tea party folks. what do you make of it? >> as a democratic pollster i can't claim to understand republican primary voters as well as my colleague, bill. it's a matter of space and energy, and we saw from the 2010 primaries in states like kentucky, colorado, delaware in republican primaries with republican voters the tea party candidates actually defeeted the establishment candidate so i think that those poll numbers are meaningful and i do think again primaries are about intensity. and you have intensity. >> some people might be surprised to see sarah palin did not do very well among tea party voters, down at 14% i think in that result. needless to say non-tea party people have her down. do you think she's no longer an interesting candidate even to the most conservative wing of the party? >> i think governor palin is still probably the most, would draw the largest audience wherever she appeared, still a powerful spokesperson. i think there's a little bit of edge off of her as a potential candidate and i think that a lot of republicans out there are coming to the conclusion that she's not likely to be a candidate for president in 2012, but i would not diminish her role as a spokesperson in this party now incredibly powerful and popular she would pop larry she would be on the road appearing pore someone or giving a speech. >> all right. i want to move to the issue, i think to me the most surprising thing is 73% said they were following the fight in wisconsin closely. and i think it was 85% of those mid-westerners were following it closely. we asked about the idea of public workers, government workers having collective bargaining rights, the same collective bargaining rights as those employees. 77% said they have the same rights. is this about the word "rights"? some people say it's about rights. >> i think it's about rights and the fundamental fairness that public employees, police, fire, teachers, you know, yeah, they have rights. and i think -- i obviously think governor walker overstepped. and he created a solution to i'm not sure a problem that voters think exist. >> we asked which rights should these unionized workers give up? here's the result. 68% say they should raise the amount workers contribute to their own retirement, health care contributions, within-year salary freeze. the public seems to be sending a message. don't take away collective bargaining rights. public union members will give up and sacrifice themselves as well. >> by the way, wisconsin exempted police and fire. but i think in general, look, this is what's going to happen approximate states all across the country. state employees have huge and attractive pensions and benefits way beyond what's happening in the private sector. these states are facing a trillion dollars in collective debt. so what we're seeing in this data is exactly that, i think, where there's enormous pressure to reduce their salaries and benefits and pensions. but at the same time i think it shows that the public sees they have collective bargaining. >> very quickly, given what we're seeing, would you be surprised if another republican governor pursued wiping away collective bargaining rights. >> it's a little late in ohio. we passed the state vote in the house. anoth >> and i would say i think that what voters are saying is sacrifice not surrender. and that's what's happening in wisconsin. >> fred yang, our pollsters are bringing us the numbers. appreciate it. coming up next a slipup in the press office. we're so mean. >> we're terrible. as if we would never do it. follow us on twitter. point out our slipups. >> jay carney, has he started tweeting yet? >> he tweeted. >> i missed it. >> whoa. >> we'll be right back. time to face the pollen that used to make me sneeze. but with zyrtec® liquid gels, i get fast, 24-hour allergy relief. so i feel better by the time we tee off. zyrtec® liquid gels work fast, so i can love the air®. until the combination of three good probiotics in phillips' colon health defended against the bad gas, diarrhea and constipation. ...and? it helped balance her colon. oh, now that's the best part. i love your work. [ female announcer ] phillips' colon health. i love your work. but you can still refinance to a fixed rate as low as 4.75% at lendingtree.com, where customers save an average of $293 a month. call lending tree at... today. before we go, quick dip in the shallow end. we're feeling a little bit of deja vu. we got this e-mail yesterday around lunchtime from the white house press conference. robert gibbs's briefing will be delayed. teeny tiny clerical error. >> no robert gibbs briefing ever started on time. any time jay is going to postpone he ought to just say we're gibbs-ing it. >> i'm pulling a robert gibbs. >> sorry, roberts. >> that's it for the daily. coming up, chris jansing. >> 1:00, andrea mitchell reports. these anchoring the joint press conference with president obama and president calderon live that hour as well. see you tomorrow. bye-bye. ♪ other choices...not so much. 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of the union." >> 27 government officials, politicians and analysts have had their say. u.s. ambassador to the united nations and the president's national security adviser, the senate's top republican, former chair of the democratic party. we watched the sunday shows so you don't have to. we'll break it down with donna brazile and ed gillespie. "state of the union" sound of sunday for august 9th. >> a dramatic statement this sunday from the senate's number two democrat, president obama says the so-called public insurance option is essential to health care reform. dick durbin tells us that if the votes are not there, democrats might have to at least temporarily scale back their goals. >> i support a public option, but yes i am open. just understand that after we pass this bill, and i hope we do in the senate, it will go to conference committee, we'll have a chance to work out all of our differences. so we'll see how this ends, but i don't want the process to be filibustered to failure. >> some democrats report town halls back home are being disrupted, but the senate's top republicans says those complaints are proof to him that democrats are nervous. >> to demonize citizens who are energetic about this strikes me as demonstrating a kind of weakness in your position. in other words, you want to change the subject. you'd rather talk about the half trillion in medicare cuts, but instead let's talk about somebody at some town meeting who miss behaved. >> absolutely not. that is, in fact, ridiculous statement. we don't negotiate with terrorists, that's the policy of the united states. this was a unique opportunity for the former president, on a private humanitarian mission, to obtain the release of two american women who had been held for many months. >> oas you can see, as always, we've been watching all the other sunday shows so maybe you don't have to let's break down the issues. joining me, former national committee republican chairman, ed gillespie, and donna brazile. let's start with that statement from dick durbin, which was in part startling and maybe a reflection of reality. he says he doesn't like t he wants a strong public option in the bill, but if the democrats don't have the votes, he thinks maybe pass a bill that doesn't have a public option, get a conference committee with the house and try to restore it there. that's a concession with a bit of a problem, isn't it. >> four out of five committees passed real strong health reform. we know that at some point the democrat also have to get together and try to figure out how to make sure that these bills are consistent. the public would like to see some option in the reform package that will lower costs, to ensure they don't get dropped from their current position. there's a lot of debate going on within the democratic caucus about the best way to proceed in september. i think the president would like to see the foregotten principles he put on the table remain intact, but i also believe the democrats, majority of democrats would like to see that public option stay in. there. >> what does it tell you -- again, i want to be clear and fair to senator durbin, he wants it, he hopes it's there in the end, but says if we can't get it in the first sweep in the senate, let's do something, lay down a marker and try to get it later. that's not what the president hoped we would be talking about. >> it's not what the president hoped we would be talking about. this reflects the drop in support and understandable skepticism about a public option that voters are bringing to bear right now on their elected officials, particularly senators while they're home for the town hall meetings and house members as well. where this is heading is to have a bill scaled back, focused on those who are involuntarily uninsured, where you can get some bipartisan consensus, drops the public option, drops these tax increases, drops the slashing of the medicare system. at the end of the day you get a health care bill that gets some republican votes, doesn't have all that the president wanted in it, but he signs it and tries to claim victory. i think it will be a victory for those opposed to these massive government interventions. >> i want to bring more sound into the conversation. first on this issue of the public option. governor howard dean, former chair of the democratic national committee who is also a long-time practicing doctor in the state of vermont, he said you need to keep the public option. >> if you're voting against having a public option, what you are voting against is something that 72% of americans in two polls want, which is a choice. most of them won't sign up for the public option, but they think they should have the choice. >> donna, what's interesting right now, is that this is largely a debate among democrats over what the next step is, is it not? >> well, john, the democrats have offered plans. the republicans, while there are some plans on the table, the leadership has not embraced it and made it clear that congressman ryan don't put forth your plan, let's debate with the democrats if we do nothing, insurance premiums will continue to go up. >> hold up. >> we have the most expensive health care system in the world, yet we get less bang for our buck. the other problem is that for the uninsured, they have the best insurance program in the world that is they can go to the emergency room, all of us have to pay for it. i think what governor dean is saying, if we want to lower costs, want to ensure choice and make sure that patie patients r their system, we need to keep that in the debate. >> donna is right about the cost. that's where the concern is that's where this white house got off on the wrong foot, because it made people realize that they will raise my cost f i have insurance, my cost will go up in order to pay for those who have no insurance right now. there are other ways do this to make sure we can help get those who are involuntarily insured covered in the system. but raising the cost of those who have insurance now, private sector insurance or medicare insurance is the wrong way to do it. look, the public option is not just a choice. it lend up siphoning folks out of the private insurance system into the government-run system. it's as simple as that. a friend of mine runs a couple car dealerships up in harrisburg, pennsylvania. he did the math. paying the 8% surcharge on his employees would be cheaper for him? he'll shift them into the public option if things go that way. >> the government program, the medicare, medicaid program will continue to rise over the next 10, 50 years because more and more american also start to retirement we have to do something to control costs and continue to provide choice. this is a legitimate and interesting policy to buy. what are your choicechoices, wh should they cost. the president has been adamant this must happen this year. for him not to get a health care bill would be viewed as a huge failure. if you come back, about a month from now, you don't have republicans on board, the democrats try to muscle this through. they have a nearly 80-seat majority in the house, 60 votes in the senate, so dick durbin also earlier this morning said if necessary, do you it the democrats way. >> if it reaches a point where we cannot reach a bipartisan agreement, i don't want to see health care reform fail. we only get a chance once in a political lifetime to do something. >> it would be a major challenge. would have the democratic president, the democratic majority muscling through on the republicans. could they do it. >> i don't think they can. the american people don't want to see something of this significance to be done with only one-party support. they want bipartisan consensus because they understand that day protects their interests. trying to muscle this through using some of these protected procedures in the senate would result in a huge backlash for democrats. i don't think they would get it done. >> we had 16 years to do something, nothing happened even when the republicans controlled both the congress and the white house. what the democrats want to do is lower costs provide choice for all americans and keep their existing insurance that they have we have the votes necessary. everyone knows that. we are moving it through committee. but the white house must revamp their message this coming fall to ensure the american people are coming along and how the american people will benefit from it. >> you say revamp the message. i want to move on to a connected issue, the border economy. donna brazile did not just bring her charts today, she's in the "washington post" this morning writing her views on what the president needs to do to restore the american peoples confidence in the economy. donna brazile writes the economy is getting better, but main street is not feeling relief. since most americans are not likely to, for quite some time, it would be a mistake for the white house to start shouting the economy is working too loudly and too soon. donna, you're telling the president be cautious. >> we all know, history tells us, getting jobs back, job growth will take time after the recession. so i'm urging my colleagues not to go out there and start popping the champagne because main street, they're still hurting. the banks are finally starting to lend. economic activity is starting to turn around but it will take time for us to get out of this deep recession. >> ed, you've been there in the oval office with the president. presidents want to seize on any good economic news because they know they define how the people feel about the economy. >> you have to get the right balance of trying to foster people to understand that things may be turning around, at the same time not looking out of step with peoples concerns. we have to be careful here. the payroll loss was less than what was expected, but we lost 270,000 jobs. that's not gaining jobs. we have not gotten the sign right yet. we're not in the plus column. we need to get in the plus column. i thought it was a note when rahm emanuel said we are fixing the economy. we are not. people want to see president obama succeed. republicans need to be careful to make it look like we are hoping for him to fail, but i think his policies are a little too forward leaning now. >> i think -- i won't speak for rahm, because we know he will call me up later. >> he can come on in, if he wants. >> what he was saying, what most economists and others are saying is the stimulus helped rescue the economy from the brink it was going under. now we have some stabilization in various markets and various sectors of the economy, but we have not turned a corner. there will be a lot of twists and many more turns in the future. 500,000 jobs already saved as a result of the stimulus. that's something we should celebrate not be despondent about. >> not surprisingly, i'm skeptical of the 500,000 job figure, but more importantly the american people are. people don't believe the stimulus package is turning the economy around. only 6% has gone out the door. >> the money going to your hometown is helping to save firefighters. the money going to new york city is helping to save teachers jobs. we know that is helping the economy. >> quick time out. we'll come back, much more to discuss. ed and donna both came feisty today. ayer aspirin out of my purse and chewed it. my doctor said the bayer aspirin saved my life. please talk to your doctor about aspirin and your heart. i'm going to be grandma for a long time. geand that takes a lot ofeen arohard work.0 years. not just some cute little gecko waffling on about this, 'n' that. gecko vo: i mean, i am easy on the eyes - but don't let that take away from how geico's always there for you. gecko vo: first rule of "hard work equals success." gecko vo: that's why geico is consistently rated excellent or better in terms of financial strength. gecko vo: second rule: "don't steal a coworker's egg salad, 'specially if it's marked "the gecko." come on people. we're back with ed gillespie and donna brazile. let's move to the international stage. if you pick up the "washington post," there is a story, the obama administration expands u.s. involvement in afghanistan. military experts are warning that the united states is take on security and political commitments that will last at least a decade and a cost that will day eclipse that of the iraq war. stunning lead of that piece in the "washington post." the president's national security adviser was asked about this earlier today on another program. and he said not quite. >> here where the tipping point is, like we couldn't predict it in iraq. if it's done right and done cohesively, the tipping point will be much sooner. we will know whether this strategy is working by the end of the next year and maybe make some predictions at that time, but not before. >> he said know if the strategy was working in the coming months, but he didn't know how long the troops would be there. in a democratic party that picked barack obama as its nom nay but he was the most credible anti-war candidate when it came to iraq, if he is asking for ten years in afghanistan and hundreds of billions of dollars, what will the reaction be? >> they will question our commitment, how much it will cost and there's a large issue here, john, that is the capabilities of the afghan government. you know, there's an election coming up soon if that government can be seen as stable providing for its people, if they can update their security, maybe we will not be there very long. general mcchrystal at the request of secretary gates is doing an assessment right now sometime within the next week or two, we will hear from secretary gates, maybe the president and hopefully they will explain to us how long and how much. >> you came in, ed, after to the bush administration, after the beginning of the war. one of the big criticisms was that the president underestimated how long it would take. underestimated the cost in money, the cost in blood and essentially didn't tell the american people up front you're buying a pretty long war here that will cost a lot of money. has president obama explained to the american people what the stakes are and what the exit strategy is. >> i don't think he has yet. he has acted responsively to afghanistan. i think he properly i fied iide it as a threat to our national security. he has committed to be willing to provide more troops. i was disconcerted bay report that i saw that general jones told the generals on the ground in afghanistan don't come asking for more troops, because the president will have an adverse reaction to it. >> he did say this morning more troops are possibly on the table. >> i think the president, who is a very effective communicator, does need to do more on this front and does need to explain to the american people what are the stakes in afghanistan. why does it matter to our national security, why may we need to put more troops into afghanistan? why might we need to be there longer. >> what does it tell us? that you have republicans, conservative voices saying he's doing the right thing, he identified the problem, but he could explain the situation better. sometimes the questions and criticism have come from the left, people who are committed anti-war liberals who oppose all u.s. military involvement overseas. >> there's a resurgency of the taliban when we took our eyes off of afghanistan. we all know the price we paid on september 11th. no one would like to see the united states or any of our allies, anyone to pay that kind of price. so i recognize the sentiment on the left or the right or anybody else, the truth is that this is a very important strategic moment for us in afghanistan. we have to get it right. we need a definite strategy for ensuring that the afghan government can provide for their people. we stop the taliban, al qaeda, and we help afghanistan with nato and others to train their troops, recruit and train tops so the taliban is not the only game in town with their poppy money. >> we watched bill clinton return to the world stage this week. he took a secret mission to north korea, helped in the release of two journalists being held in a north korean prison camp. he returned home with them to los angeles. the white house and former president clinton have been hush hush as to any specifics. but some conservatives criticized this, a man you worked with in the bush administration, john bolton, saying it came pretty close to negotiating with terrorists. i put that question to the woman now in that job, susan rice this morning, was bill clinton negotiating with terrorists. >> obviously this was not a negotiation. i want to be clear about this. this was a humanitarian mission. we are grateful for bill clinton and his willingness to take this on. i can't predict what might transpire down the road but we will evaluate what he can contribute. two questions, take them in each order you wish. propaganda victory for the north koreans or the right thing to do to secure the release? what will we see next from bill clinton. >> first of all, this was a unique mission to free these two american journalists. former vice president al gore worked tirelessly behind the scenes, working with allies, with others, the state department, the white house, to get their release. and clearly bill clinton went on a private, humanitarian mission. and i know it's not seen as private because his wife is the secretary of state. but i want to applaud the president for undertaking the challenge, going and bringing home these two americans to reunite with their families. clearly we need to know now where do we go from here? will we get the north koreans back to the table for the six-party talks? will we figure out any more about kim jong-il's health, his status, succession plans, but nothing has really changed in my judgment. >> two things. first of all, happy for the two journalists being reunited with their families. but this was negotiated between the two governments that if he were to go, he would get the journalists back. that's a negotiation. i thought that that was a bit of an incredible statement that was made and characterizing the nature of the discussion. henry kissinger's opposition today in the post, while we are all happy for these journalists to be reunited to their families we now have three hikers in iran being held by the iranian government. are we going to send bill clinton tehran to get those three out? what is the outcome of that? this was a -- a definite benefit to kim jong-il and the north korean government, this photo-op with former president clinton. >> we'll see if better diplomacy comes of t better relations comes of it. ed gillespie, donna brazile, thanks for coming in. >> straight ahead, how do folks feel at eugene, or goegooregon, the unemployment rate has doubled in the past year? welcome home, man. hot! hot! hot! time to check your air conditioning? come to meineke now and get a free ac system check. at meineke, you're always the driver. . our traveling this week took us out to the pacific northwest to a state that back a quarter century ago was a swing state. this is oregon, back in 1984, when ronald reagan -- blue, blue, blue, blue, and blue. oregon now reliably democratic. let's look at that. there are 894,000 registered democrats. 677 registered republicans. the unemployment rate is 12.2. nearly 17% of residents don't have helicopter insurance. so for our restaurant conversation, we chose brail's restaurant. it's a college town, in a community that went big for candidate obama last november, the concerns were quite telling. >> are we on the right track or is the country still on the wrong track? >> i see more people being more -- or ingenious with how they go through and the whole recession. my mom is a great example. she is being self-sustaining. she actually bought a dairy goat. and she is making feta cheese on her own. we are saving money any way we can. >> you depend on people coming in and spending money in this economy s your business down? >> for now, i'm okay. i don't know how it's going to be later. >> is it -- is it getting better though or is it getting worse? >> i think it's getting better. >> why? >> it's not getting worse. we are not seeing new news that is bad. and i see people this year taking steps that are the kinds of things you wouldn't do if you thought it was really getting a lot worse. >> i have a bit of issue, medical issue. i'm looking at it right now. you know, i've been looking at it. i want everybody in my -- you know, full time wo-time workers have medical insurance. but medical insurance is way high. >> do you trust the government to make it more affordable, or when the government gets involved do things get worse? >> i think small business will be hurt. if we have to pay those kinds of amount of fees, you know, it's going to hurt. >> i have employees, and the crazy thing is, if i want to do the right thing and give them health care -- >> i do, too. >> i get basically -- basically all the tax incentives are against me doing that. that's crazy. and so if the alternative is mandating me to do it, that has a bunch of problems, too whether it's private or public, i don't know what the right answer is, but you should make it easy to give employees health care. >> oregon, minimum wage is 8.40. i think minimum wage is really high here. >> so the state is squeezing you? >> i think so. >> watching the new president for little more than six months, is there a big surprise for you? the biggest disappointment. >> i love how he went after lobbyists. lobbyists and big corporations, the golden parachute, ceos. at the same time we're giving them a lot of money. i think it was bill maher who made a reference that obama needs a little bit more bush in him. he needs to be a little bit more like bush. he has to say things, do things, not really care what people think. i've noticed lately -- i've noticed lately a lot of people, well, a lot of things are -- i don't know, kind of getting to him. he's slipping a bit more. the controversy. not a huge deal, he's a prominent man, but he slipped. he kept so cool through the election. that's what people liked about him. it's getting to him. it's the hardest job in the country, but we liked him because he kept his cool. i actually quite like the deliberativeness. i think wholly aside of what the decisions wind up being, the fact that there is evident thinking about it that we're really going to take time and think about it. that's a welcomed change if there's a disappointment, i can't tell what his small number of real priorities is. i fear that he's so smart that he may be getting into every issue that comes along. >> great conversation, trust me a great breakfast at brail's restaurant. when we come back, more sound of sunday. our reporter panel just ahead. it's the chevy open house. and now, with the cash for clunkers program, a great deal gets even better. let us recycle your older vehicle and you could qualify for an additional $3500 or $4500 cash back on a new, more fuel-efficient chevy. your chevy dealer has more eligible 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( shouting ) this is crazy. you. let's run a free upgrade check. see if you're due for a new smartphone. don't i need to go to my carrier's store for that? no, you don't have to. we sell phones and plans on all the major networks. ok. well, is time travel possible? yes, i am from the future. announcer: phones, plans, and advice from thousands of people eager to help. not long ago, this man had limited mobility. last month, this woman wasn't even able to get around inside of her own home. they chose mobility. and they chose the scooter store! if you or a loved one live with limited mobility call the scooter store! no other company will work harder to make you mobile or do more to guarantee your complete satisfaction. if we pre-qualify you for a new power chair or scooter and your claim isn't approved, the scooter store will give you your power chair or scooter free. that's our guarantee. they were so helpful and nice. they filed all the paperwork, and medicare and my insurance covered the cost. we can work directly with medicare or with your insurance company. we can even help with financing. if there's a way, we'll find it! so don't wait any longer, call the scooter store today. i'm john king "state of the union." >> drive verrs have recovered a fourth victim from the hudson rive river. >> president obama's national security adviser says north korean leader kim jong-il seems to be in full control of his government despite reports of declining health. that assess front jim jones on the sunday morning talk circuit. jones says former president clinton passed no official messages to north korea during his message last week to bring home two u.s. journalists. >> president obama leaves for mexico this afternoon for a summit of north korean leaders. he will meet with the leaders of mexico and canada. high on the agenda the floebl economic crisis and strategies to contain the h1n1 flu virus. that and more on "state of the union." joining me now is ed henry, "washington post" reporter and arthur dan bald, he is co-author of "battle for america 2008" and jessica yellin. that's the book right here. good beach ride. to read. excellent. i saw a dramatic statement from the number two democrat in the senate this morning, dick durbin. the house and senate both missed the president's deadline to pass health care bills before going on the congressional recess. dick durbin, want to be fair to him, he said he wants that government option that the president says is so critical. he wants it and hopes it there in the end, but dick durbin opening the door to a senate bill that does not have the public option. >> i support a public option, but, yes, i'm open. we will see how this ends, but i don't want the process to be filibustered to failure, which, unfortunately, many senators are trying to do i want to make sure we do something positive for the american people. >> he sounded like the number two democrat in the senate. he's a close friend of the president of the united states, and he is essentially saying we may have to initially compromise a lot in the senate. >> i think it's another signal that that is where the debate is heading. that the only hope for the president to get a reform bill is not to have a public option. we talked about how there would be difficult conversations towards the end of this debate. the only way the president will get something that he can call bipartisan is if it goes through the senate finance committee and the republicans on the committee, as you were pointing out earlier and some democrats have signaled at least that a public option is very unlikely. now to have a leader like dick durbin to also signal that. as you point out, he still wants a public option but is signalling it will be difficult. the writing is on the wall. it's unlikely a public option will be there. >> is that an incremental concession and you try to get it back in conference committee and explain to the american people? the house passes something, the senate passes something. we know the house will pass something that has a public option. is dick durbin's goal, get this through the senate, then negotiate a compromise and we will come back with a public option in the end? if it's not in the initial senate version, is it gone? >> if it's not in the senate version, it most likely will not make it in the bill. one problem that the president has had over the last month is that democrats have been fighting democrats on health care. you have a disunited party at a moment when he needs unity. dick durbin is saying we need to be on the same page. this is a signal this morning of saying that. >> this plays out at a time when these guys are all home. some people have questioned who is sending all these loud people to our town halls. some say that's democracy, welcome to it. jessica, as you know, some say, no, no this is the insurance industry. this is republican critics trying to steal the debate, get flashy clips on television or youtube. >> some people i talked to who have voiced these oppositions, using the word socialism who are outraged, insist they are just americans who are upset about what they see the government doing. the problem is that this is giving voice to people who have already been dissatisfied with president obama, maybe didn't like him from the beginning and that his entire agenda smacks of socialism from the stimulus to climate change to this. the storyline is building that this government option that they are talking about is part of the broad socialist message that they think is coming from the obama white house. the only ba ma administration lost the upper ground in message control. that's part of the reason why they lost the ability to control the public option debate. >> one question they will face after the recess is whether to try to muscle through something more to their liking. they have a 78 vote majority in the house. 60 in the senate. one thing democrats have talked about is if we can't get a bipartisan deal, we will try to do it on a party line vote. newt gingrich this morning said if democrats do that, they will be in trouble. if we are going to try to rewrite 17% of the bill, i think a lot of democrat also rebel. >> you understand the party system as well as anybody in town. can they do that? is it that important to the president that if he doesn't have any republicans, just to try to ram it through? >> that's the big choice that he will face in september or october as this comes to a conclusion. first of all, for the democrats, failure is not an option. they remember what happened in 1993 or '94 when they couldn't get a bill to the floor to get a vote on that. they don't want that to happen. they want to show they can get results, get things done. the danger of doing that with only democratic votes is, as speec speaker gingrich says, not to have broader support risks real problems down the road if the implementation is not smooth, which it rarely is. >> this sounds like trash out there when you talk about reconciliation and things. what happened about denied claims? overpriced insurance? where has that discussion gone? until they get that back, you are bound to have a party line vote. >> and you're pointing towards the fact that the passion right now is on the right at the town hall meetings. so where are the people on the left? the unions said they will start getting people out there. when john was talking about democracy in action, the people on the left don't seem to be standing up. you keep saying a government takeover will result in people not getting the tests they need and die. people are facing that with insurance campaigns right now. no matter where you are in the debate, the current system is not perfect, but we are seeing the passion on the right, not on the left. there are more and more democrats in private, very ones close to the white house, saying this reconciliation option is more and more likely that -- originally when they looked at process of just 51 votes it was set up, they believed, so you could only do a portion of this, come back and do other bills later to fix the system. they are now saying in private that they think they can do more and more of this reform through reconciliation and they may be heading down that road. >> let me ask you, dan, something you write about in the book. looking back in time in the book, but then bring its to the moment this talks about when barack obama, the candidate, got ted kennedy's endorsement. you write in your book, his endorsement came with conditions. kennedy wanted a commitment from obama that as president he would push for universal health care. he wanted that to be the first priority of an obama administration. obama agreed. i assume the president does not regret that commitment but as we have this crumbling on capitol hill, he misses senator kennedy. >> i think the absence of ted kennedy in this is crucial for the administration. ted kennedy, known as one of the strongest liberals is also one of the most savvy legislators in the senate. not having him in the middle of this is a problem. for obama to have made that problem miss is easy. he certainly wanted the endorsement of ted kennedy. it's always easy to say, yes, we remember john edwards asking for poverty to be an issue. but this is something obama wanted to do as much as ted kennedy. >> we'll be right back. don't go anywhere. we're back. let's stay on health care for a moment. let's elevate it to the bigger debate and what we are learn being our president a little more than six months into office. dan is with us, his book has just been published, he should read it. you talk about getting into the race. the memo david axlerod wrote to then senate obama about whether he should run for president. he wrote you care far too much about what is written and said about you. you don't relish combat when it becomes personal and nasty. a lot of not nice things are being written about the president and his health care bill. this combat is personal and nasty. >> i think david axlerod was right at the time about barack obama. he was not somebody who took criticism well, whether it was external or even from some advisers. his memo also goes on to say the campaign can be a proving ground. in many ways i think it was. it was a learning experience for barack obama and a proving ground. fast forward to todays. i think he's use to the criticism. he doesn't particularly like it but knows better how to deal with it there's no question he had a tough july. i think august is a point where he has to sort of rebalance the presidency and get himself back to where he needs to be. >> how do they see the moment, ed? sometimes the president says this is all cable chatter, things will be fine. they have to understand if they do simple math among their own members on capitol hill, they have a problem. >> they do notice it in the president's demeanor. he has been getting much sharper in how things are getting under his skin. a couple nightses ago in virginia for craig deeds, he gave a fiery speech that almost harkened back to the campaign but was talking a lot about what the critics were saying about me. you can see the sort of calm, cool obama that we know so well from the campaign. he is starting to fray ever so slightly because he is getting tired of the he wants to take over your health care, he's a socialist. and other issues that are out there. >> and, seems like he's lost his greatest skill here, which is i jiu-jitsu ability to see what critics are seeing about him and get on their case. he has not found a way in this instance to win the debate. he is really at a loss in this case. >> one of the things, one of the president's advisers recently told me that has been difficult is to try to do what the president is going, which is communicating n the middle of a legislative battle. i think that caused them some difficulty. they tried to work through it and i think they look forward to congress being away for a few weeks so he can have the stage for himself. >> we talked about the big economy, big job numbers, afghanistan this morning that war, it, in some ways, look like it's spinning out of control. there's a lot else going on. >> let's talk about that the afghan elections are 11 days away. it's presumed president karzai will win re-election. there's doubts about his confidence and corruption. more u.s. troops are on their way now, and it's possible the commander also say they still need more. lindsay graham, john mccain's best friend in the senate saying if the commanders want more troops he would agree to send them but he doesn't know if the would. >> i'm one republican that would support more troops in afghanistan. i do believe, quite frankly, i'll be shocked if more troops aren't requested by our commanders. afghanistan has deteerioratedde. in july, the president said, when he was candidate for office, that afghanistan was the central battle in the war on terror. afghanistan is now the central battle on the war on terror. that means more troops, more political engagement, more economic engagement. >> more questions from the democratic party with why have troops in an exit strategy? >> he is going to take a lot of heat over the left wing if he does that, especially with those numbers you showed this morning when you were interviewing susan rice. why can't we bring the rest of the world along? >> what did you learn in studying how he campaigned that carries over now as he faces these difficult challenges? one of the gifts he had as a candidate is when he did make mistakes and missteps, he recovered so easily. >> he was not a particularly good candidate, he was not a happy candidate, as we learned. he went through a process of learning how to become a candidate. i think he has to go through a similar process, and he's going through it, of how to become the most effective president possible. that takes some time, and we can see some of the frustrations, as ed was talking about, in his presidency, but you can also know, from having watched barack obama on the campaign trail, that this is somebody who is thinking about what am i doing wrong, how do i make this better, how do i make this message more effective, and we're going to see more of that. >> you do a good job in your column this morning about it's been a bad summer for the president in so many ways. however, he got the first latina court justice, history made, and those job knonumbers on friday, while more people lost their jobs, it's looking perhaps like it's starting to hit bottom. if that starts turning around, the picture of this president is going to change rapidly in a positive direction. >> all of you stay right where you are. when we come back, the lightning round. the topic today, howard dean versus sarah palin. - others buy the car of their dreams. - ( beeps ) during the lexus golden opportunity sales event, you can do both. introducing our best offers of the year on the vehicles intellichoice calls "the best overall value of all luxury brands." it's an opportunity today. it's a lexus forever. it was tough news to hear. everything changed. i didn't know what to do. right about then, our doctor mentioned the exelon patch. he said it releases medicine continuously for 24 hours. he said it could help with her cognition which includes things like memory, reasoning, communicating and understanding. (announcer) the most common side effects of exelon patch are nausea, vomiting and diarrhea. the likelihood and severity of these side effects may increase as the dose increases. patients may experience loss of appetite or weight. patients who weigh less than 110 pounds may experience more side effects. people at risk for stomach ulcers or who take certain other medicine should talk to their doctor because serious stomach problems, such as bleeding may worsen. mom's diagnosis was hard to hear, but there's something i can do. (announcer) visit exelonpatch.com for free caregiving resources. but there's something i can do. so, april... yeah? you know, your charger is still using energy when it's plugged into the wall, right? yeah, but that's not my charger. i don't even have a cell phone. [ballad ringtone playing] uh-oh. um... [music stops] heh. announcer: millions of kids are using their energy wisely. i think i'll go with the basic package. good choice. only meineke lets you choose the brake service that's right for you. and save 50% on pads and shoes. meineke. >> i'm joined by ed henry and jessica young. this is sarah palin on her facebook page talking about the health care plan. the america i know and love is not the one in which my parents or my baby with down's syndrome will have to stand in front of obama's death panel so his bureaucrats can decide, based on a subjective assessment, whether they're worthy of health care. such a system is downright evil. she's not going quietly. >> no, and that's a low blow that's not an accurate assessment of what this panel is, but it definitely will get attention. >> jessica is right, it does get attention. it's not the way to debate this bill, and it's another example of sarah palin having difficulty figuring out how to enter a serious debate about issues. >> people think a sense of oo euthanasia is going to be allowed. >> but the long time governor of state of vermont was asked about sarah palin's posting earlier this morning. >> what's your reaction to governor palin's comments on her facebook page? >> about euthanasia, she totally made that up. there's nothing like that. i promised medicine for a long time, and of course you have to have end of life discussions if your patients want that. there is -- euthanisia is not in this bill. >> i think it actually is a bigger part of what we were talking about before, that's a serious allegation that's been out there for weeks, and it sort of built and built on talk radio and other venues that the president is pushing euthanasia. it hasn't really been encountered until now. >> the charge is one that is probably easily refutable, but it's out there now and is difficult to get any traction. >> to add on, there will be discussions of end of life decisions. that starts to muddy the waters. they should just stop with, not true. >> you all say sarah palin is misconstruing the facts here. is this what she wants to do, interject herself in debates like this? >> if she does, she'll be very effective at it, because it really is helping to drive the message. >> i'm not sure i entirely agree with that. i think she needs to figure out a way to become a part of a national debate in a more substantive way. i don't think you can do it with twitter or facebook. you've got to engage in that debate and stand up to criticism and back and forth and she has yet to do that. >> it's almost like the ad the palin-mccain campaign ran. she's a big celebrity, but she has to figure out how to go from celebrity to serious person, and attack it in a certain way, not just on the fringe. >> are you waiting for a palin campaign to be announced, though? >> i might be out of work. >> we've been watching the theater of these town halls. some organized by political organizations, others just coming out to vent their positions on health care, whether it's sing payer advocates saying it doesn't go far enough or conservatives saying it goes way too far. what is the one thing or the one person you're going to track over the next couple months of this recess to see if this