we have a great show for you today. i was asking myself whom would i like to hear from about the ups and downs this crazy republican race. my answer was alan simpson, the former republican senator from wyoming, legendary for his frankness and wit. of course, we'll also talk it america's fiscal future because he is the simpson of simpson-bowles. next up, i'll talk to a scholar and former pentagon official about the administration's dramatic plan to cut the pentagon budget. is it too much, too little, or is it the goldie locks budget? then, the west and iran are headed toward a serious showdown. what happens next? will oil spike to $150 a barrel? what is the end game here? we have four top experts to guide us through. also, we'll tell you the real reason china is revamping most of its television shows. it's not to get better ratings. my take this week is on iran. you'll hear from others on this later, but i'll go first. there's not much foreign policy talk on the campaign trail, as you probably noticed, except for one issue. everyone is talking about iran's new strength and assertiveness, its missile tests, its progress on the nuclear program, its moves in iraq. mitt romney, the republican front-runner, describes iran as the greatest threat the world faces over the next decade. in fact, the real story on the ground is that iran is weak and getting weaker. sanctions have pushed the economy into a nose-dive. the political system is fractured and fragmenting. the simplest measure of iran's strength is its currency. when barack obama became president, you could buy 9,700 rials with one dollar. since then the dollar has appreciated 60% against the rial, meaning this week you could buy 15,600 rials with one dollar. iranian president mahmoud ahmadinejad told his parliament recently that the latest sanctions were the heaviest economic onslaught on a nation in history. the iranian government's reaction to the prospects of sanctions that could hit its oil exports shows its desperation. first one of its admirals threatened to block the strait of hormuz, saying it would be as easy as drinking a glass of water. but a senior commander of the revolutionary guard, iran's power source, quickly backtracked, explaining that iran has no intention of blocking the straits. frankly it would be madness to do so because iran would suffer more than any other country. blocking the straits would result in a near shutdown of iran's exports and imports. with 60% of iran's economy coming from oil exports, that would bring the government to a standstill. meanwhile, iran's nuclear program is making progress. this is inevitable. nuclear technology is 70 years old. iran has a serious scientific and technological community. and it does see the nuclear program as an emblem of national security and pride. but do we think of north korea as strong and on the rise because it has a few crude nuclear weapons? the obama administration seem to have concluded that the iranian regime is not ready or able to make a strategic reconciliation with the west. the regime is too divided and khomeini, the ultimate authority, the supreme leader, is too ideologically rigid. so for now, washington wants to build pressure on iran in the hopes that this will force the regime into serious negotiations at some point. the strategy is understandable, but it also risks building up pressures that could take a course of their own with explosive results. the price of oil is rising and is high during a global economic slump, only because of these geopolitical risks. without the strategy, these risks will only grow remember, weak countries whose regimes face pressure can sometimes cause a lot more problems than strong countries. let's get started. joining me now, the republican party's elder statesman from wyoming, alan simpson. senator, pleasure to have you on. >> it's a great treat to be here. i'm very pleased. >> do you think that mitt romney has now wrapped up the nomination for all intents and purposes? >> i think that's very possible because they've washed all the laundry of his that they could ever find. now they're going to start washing the laundry of rick santorum, who has not had his laundry washed yet. everyone that rose to the top here suddenly created a great deal of investigation and examination, and rick santorum has never had that. when they got it, the others who have fallen, all capable people when they got it, they all dropped. so romney's had his thoroughly strung on the line and has survived. and now they're going to start dragging the laundry out on santorum and stringing it up on the line. and there will be some tough stuff in there, controversial stuff, you know, abortion, homosexuality, those flash words and earmarks and all that stuff bam, bam, here we go. >> what do you think it says about the party that it seems to have tried desperately to fall in love with everyone but mitt romney? >> i don't know. it's a strange thing. i think that he's a very effective man, and i think the reason they keep coming back to him, regardless of the "flaws they attribute to him," is that he's the only guy that ever met a payroll. he's the only guy that ever took over a failed organization filled with corruption and disunity and dysfunctional like the congress, and put it back together, and then taken businesses which were on the ropes. somebody said, yeah, but he killed -- got rid of all these people. i said, well, you got two choices when you take over a failed business. let it fail and everybody's out of work or take it over and hire half of them back, pay the shareholders and get cracking. that's what he did. >> so you endorse him? >> i haven't done that yet because i feel that i've irtoilet -- irritated everyone irtoilet -- irritated everyone in the united states. they wouldn't want the curse visited upon them because with what erskine and i did in 67 pages was turned everyone in america. with grover norquist and name them, man, oh, man, it's been fun, i love it. >> one more question on the politics before the debt issue. what does it say about the tea party, though? this was the great, vaunted new element in the republican party. and at the end of the day, it seems like the republican party is, as it always does, is nominating the front-runner, the guy who's waited in line, the guy who's run before. and, you know, that fairly traditional hierarchical dynamic is at work. the tea party wasn't able to change it at all. >> well, republicans give each other the saliva test of purity. they like to give the saliva test of purity, and then they lose and then they just bitch for four years. it's an amazing party. and i've watched it with some trepidation. but honestly, if that's what they're going to do again, this guy is not pure enough, not conservative enough, too liberal, then obama's a walk-in, and they know it. they're having fun watching this. >> so one of the central moments in the republican debates, the candidates are asked, if you get $10 of spending cuts for $1 of tax increases, would you take it? and not one of them took it. i take it your view is that this is fantasy, that there is simply no way to deal with the budget without raising taxes. >> it's a dream world. and i couldn't believe it when i watched that, when they asked the question, and nine hands shot up like robot. and i thought, how can you get there? you don't have to raise taxes which, of course, makes grover froth at the mouth and all his minions. you just go into the tax code and say let's get rid of these tax expenditures. they are $1.1 trillion a year. home interest deduction, $1 million. second homes -- no. we said, get it down to $500,000, then give a 12.5% nonrefundable tax credit. that helps the little guy everybody talks about. charitable deduction. give a 12.5% nonrefundable tax credit. and then go in and look at the rest of the stuff. you won't believe what's in there. parking for employees, blue cross insurance, oil and gas. i've trampled on my own sacred cows to do that pitch. but you have to -- it has to be self-sacrifice and know that this country is going broke. >> are you resigned to the fact that nothing is likely to happen on your proposal and the ideas around it until the election, or do you think that there's still a possibility in the next year something can happen? >> we'll see what happens. but every day that goes by, this is like a stink bomb in a garden party. as they're eating tea cookies and saying nothing's going to happen in america, this ogre is coming out from under the table because you can't get there by doing waste, fraud and abuse, foreign aid, earmark, airplane, air force one, congressional pensions. give it up. that's about 4% or 5% of what we're in. you have to deal with medicare, medicaid, the solvency of social security and defense. and if you can't raise the retirement age to 68 by the year 2050 without the aarp losing their marbles and grover slathering at the mouth on every kind of thing you talk about, calling it a tax increase, we won't make it. that's the kind of power that's out there, and making a dysfunctional government, why, pull up your shorts and start running for the exit. >> senator, when i was growing up, you were thought of as a pretty conservative guy. you were representing wyoming, after all. to listen to you now, you sound like a moderate. have you changed or has the republican party changed? >> well, i think the republican party changed. but where -- what happened with me is i always felt that abortion is a hideous and terrible thing. let's all admit that. but it's a deeply intimate and personal decision. it's -- here's a party that believes in government out of your lives, the precious right of privacy, and the right to be left alone. well, then, what are you doing in this issue? partial-birth abortion is not an emotional issue. it's a medical issue. it's too free the birth canal for hopefully a later child. it's madness. gay/lesbian issues, we all know someone who we love that is gay or lesbian, what the hell is this all about? madness. if we're trapped in that, we're headed for more strife. >> senator, pleasure to have you on. i hope we can have you on again. >> well, i hope you'll stick around because you speak with clarity and you ask great questions. and you don't get caught up in all the garbage on the extreme right and the extreme left. people -- erskine and i go around the country. we can speak to any group, right or left, give us an hour, let them ask questions, we'll get a standing ovation because people are thirsting for somebody to give them something other than b.s. or mush. and both parties are giving the american people b.s. and mush. and they're sick of it. and something's going to happen. i don't know what it is, but people -- people are smarter than their politicians. they always have been. and we'll see what happens. >> on that note, legendary note of frankness, senator alan simpson. >> it's a pleasure. up next, the pentagon's new strategic plan that says we can no longer fight two major wars at the same time. how will the cuts affect policy? 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[ shapiro ] we created legalzoom to help people start their business and launch their dreams. go to legalzoom today and make your business dream a reality. at legalzoom.com, we put the law on your side. this week president obama and defense secretary leon panetta outlined a new strategy for a leaner military with smaller goals. we cannot anymore fight two major wars at the same time. my next two guests from washington are experts at deciphering the near and long-term consequences of these cuts. larry korb is former assistant secretary of defense. he's now senior fellow at the center for american progress. michael o'hanlon is a senior at brookings and worked as a national security analyst at the congressional budget office. welcome. mike, let me start with you because the headline out of this has been we will no longer be able to fight two major wars. but was it ever realistic to believe that the united states could fight two major wars at the same time just in terms of the energy, time commitment pressures? i mean, what we saw when we were fighting iraq surely was -- reality is that this was always a planning device, or do i have it wrong? >> i think you're mostly right, fareed. even in the cold war when we had larger forces, the vietnam war drained a lot of capability from europe. and that had been true as well in korea. i think you're basically correct. therefore, you can't make too much of this change. also, the pentagon today has -- or this week has emphasized that they still do have that capability to do something in a second place. it just wouldn't be a full, all-out second major contingency. and finally, and a point i've been trying to emphasize, is that of all the places where our interests are threatened, most are maritime or -- or air oriented. in other words, the persian gulf waterways, strait of hormuz, taiwan, it's not all classic land threats. if you can't handle two ground invasions at the same time at this point, that's probably all right. i think, a, you're right, it wasn't a big change from the past. b, to the extent that it is a change, it coordinates well with the changing international landscape and where we see the greatest threats to our interests. >> larry, you've been calling for reform of the defense budget, frankly, for cuts for a long time. for you, do these go far enough? because you have always thought we've had basically a -- you know, a bloated military establishment. >> well, basically, they're a step in the right direction. but they really do not go as far as they should given the threats that we face, and as the president mentioned, the other economic concerns that we have. and i don't think -- i think basically we learn by that foolish invasion of iraq that we're not very good at this nation building and reengineering societies. so we had already decided ton do -- not to do that. and so, therefore, you can cut the army and the marine corps ground forces back. they're talking about a 50,000 cut in the army. i'd go back to at least, you know, at least a 70,000 cut. >> mike, even with these cuts, we will have a military that is in dollar terms larger than the next ten countries put together. i can't think of any point in history when that was true. the british navy used to pride itself in the fact that they were larger than the next two put together. we're larger than the next ten put together. >> of course the british navy did not prevent the outbreak of world war i. the deterrence failed in that case. there was too much competition. i don't mean that to sound like i want to pound my chest and outspend the chinese 10-1 forever, but i do think that it's actually a good issue to raise the basic point that you don't really want it to be too close in this business. having said that, we do have to be cognizant of the fact that our economy's not as strong as it used to be. and we need some reasonable margin of advantage. that's why for me i think going back to a one ground war capability is a smart kind of gamble. but i'm a lot more nervous about saying that we should start choosing in terms of our navy capabilities between the persian gulf and the western pacific, for example, which is what i think you would have to start to do if you wind up with sequestration. if you make trillion-dollar cut over the next decade. i think you have to prioritize either the western pacific or the persian gulf. i don't believe you can do both equally. i'm not sure that's a smart gamble for american security right now. >> larry, i noticed that secretary panetta took on what has been politically a very tough thing, which is the benefit packages that accrue to people who work for the pentagon, for the army. you retire after 20 years with these very generous pensions, full health care. even if you get another job you retain all that. do you think those cuts will be -- it will be politically possible to make those cuts? >> yeah, i think it is if you get the military leadership to back it. they're the ones who got us into this mess. i don't want to blow my own horn, but when i was there i tried to deal with military retirement. i cut the benefit from 50% to 40% after 20 years for people came in for 1986. the military leaders pushed civilians to undo it. they did it. there was no money put aside. you'll have to take it on, and if you don't, you're going to end up like some of these states do where, you know, they are -- their pension costs are beginning to eat them alive. basically you can do it as we did it in a fair way. you can grandfather people. but, you know, when you make these promises to military retirees and you don't pay for them, this is the problem that you're going to run into. >> mike, you think these cuts will go through, bottom line? >> i do. i think that the roughly $400 billion, $450 billion over ten years in cuts make good sense. the harder question is, can you really increase them much beyond that? here larry and i disagree a bit. in a sense, here the obama administration has internal discord within its own thinking because on the one hand they're proposing this $400 billion package which has become a moderate package. on the other hand, obama has no way out of sequestration at the moment. and he's pledged to veto a bill that would soften any aspect of sequestration unless it's done in broader deficit-neutral terms. so he's sort of got a little tension in his own policy. so do the republicans in congress. i think that's going to be the interesting question to watch over the next ten months, the sequestration sort of stay on course to occur, and to really kick in 12 months from now, or does it get mitigated in the meantime? that to me is the big question. this first round of cuts is totally fine if done wisely. i think the current thinking is pretty wise. >> and we'll be watching it. larry korb, michael o'hanlon, thank you very much. >> thank you. >> thanks, fareed. stay with us, we have a very curious story up next. why most chinese this week couldn't watch their favorite tv shows. and won't ever be able to watch them again. i'll explain. and more. if you replace 3 tablespoons of sugar a day with splenda®, you'll save 100 calories a day. that could help you lose up to 10 pounds in a year. and now get even more with splenda® essentials, the only line of sweeteners with a small boost of fiber, or antioxidants, or b vitamins in every packet. just another reason why you get more... when you sweeten with splenda®. ♪ we're getting back in shape. oh! try these. i sprinted here... wow! from your house?! from the car. unh! ooh. [ male announcer ] get back on track with low prices on everything you need. backed by our ad match guarantee. walmart. imagine if you flicked on your television and found that the government had canceled "american idol," "30 rock," the office," and "dancing with the stars." well, that's essentially what happened in china when last week beijing eliminated a staggering two-thirds of all prime time entertainment. what in the world is going on? ♪ don't cry for me argentina >> "supergirl" looks and feels like "american idol." but the chinese talent show was pulled for being too vulgar and too western. it's one of 88 entertainment shows that have been canceled. other programs that have survived have had to change. sensors have insured the dating vote "if you are the one" is the to racy, gone are the racy discussions about sex. ♪ >> why al