updated 5/31/2009 12:24:01 PM ET 2009-05-31T16:24:01

MR. DAVID GREGORY:  This Sunday, drawing the battle lines over the president's pick for the Supreme Court.  The historic selection of Judge Sonia Sotomayor, nominated to be America's first Latina justice.


PRES. BARACK OBAMA:  What Sonia will bring to the court then is not only the knowledge and experience acquired over a course of a brilliant legal career, but the wisdom accumulated from an inspiring life's journey.

(End videotape)

MR. GREGORY:  But as the GOP spoils for a fight, a growing debate about that background and bias.


MR. RUSH LIMBAUGH:  She's a racist.

(End videotape)

MR. GREGORY:  This morning, sorting through a judge's record on issues like abortion, activism and ideology.  With us exclusively, the men at the center of the confirmation battle:  chairman of the Judiciary Committee, Democratic Senator Patrick Leahy of Vermont; and the top Republican on Judiciary, Senator Jeff Sessions of Alabama.

Also, the economy.  Are signs of recovery premature?  A chilling new jobs report expected next week.

Plus, the impending bankruptcy of General Motors.  What is the view from the front lines?  Our conversation from the floor of the New York Stock Exchange with three key CEOs:  Google's Eric Schmidt, Anne Mulcahy of Xerox and Caterpillar's Jim Owens.

Finally, our roundtable:  BBC America's Katty Kay, author of the new book "Womenomics:  Write Your Own Rules for Success"; Richard Wolffe, author of the new book "Renegade:  The Making of a President"; and NBC's Brian Williams with his exclusive look at a day in the life of this new White House.

But first, here with us exclusively and for the first time together since the president nominated Sonia Sotomayor to the Supreme Court, the chairman and ranking member of the Senate Judiciary Committee, Democrat Patrick Leahy and Republican Jeff Sessions.

Welcome both of you.  Good to have you here.

SEN. PATRICK LEAHY (D-VT):  Thank you, David.

SEN. JEFF SESSIONS (R-AL):  Thank you.

MR. GREGORY:  The first flash point in this nomination of Judge Sotomayor surrounds the issue of race and personal experience.  The comments that she made back in 2001 have captured a lot of people's attention, and I want to put them on the screen here in wider context than we've heard them discussed this week because I think the context is important, and I want to get your reaction.  This is what she said:  "I...accept that our experiences as women and people of color affect our decisions.  The aspiration to impartiality is just that--it's an aspiration because it denies the fact that we are by our experiences making different choices than others.  ...  Justice O'Connor has often been cited as saying that wise old men and wise old--and a wise old woman will reach the same conclusion in deciding cases.  I am...not so sure that I agree with the statement.  ...  I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who wasn't lived that life.  ...  Personal experiences affect the facts that judges choose to see.  My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar.  I simply do not know exactly what the difference will be in my judging.  But I accept there will be some based on my gender and my Latina heritage."

Senator Sessions, are you troubled by that?

SEN. SESSIONS:  Well, yes, because the entire concept of the American rule of law is blindfolded justice, that the judge sets aside their personal and political and biases of any kind and gives an objective ruling on the law and on the facts.  People have to believe that or they lose respect for the law. They--the marvelous moral authority of the law can be undermined if people think that the decision's being made by--on the basis of a judge's personal views or biases or background.  And I don't--I think that's--I read her piece, it's very interesting.  I think it's something we need to probe.  But I think it goes against the great heritage of American law that calls for judges to be a neutral umpire, as John Roberts said.

MR. GREGORY:  You will see her this week.  What specifically will you ask her on this point?

SEN. SESSIONS:  Well, I will talk to her about that.  There was a lot in that speech that was interesting, a lot that was troubling to me.  I think we ought to be honest about it and give her a full, fair opportunity to explain what she meant in its context.

MR. GREGORY:  But you think what she means is clear with the wider context of what she's saying in the essay overall.

SEN. SESSIONS:  Well, well, let me say, I, I think President Obama has set the tone for that.  He's talked about a judge who has empathy and empathy for certain groups, and he specifically named groups.

MR. GREGORY:  Mm-hmm.

SEN. SESSIONS:  And that to me also is a troubling philosophy.  It goes against the heart of the great American heritage of an independent judge.

MR. GREGORY:  Before I get to you, Senator Leahy, Republicans outside the Senate, conservatives, have mounted a pretty fierce reaction in their criticism of her remarks.  Former House Speaker Gingrich has called this racism, and he says new, new racism is no better than old racism.  And Rush Limbaugh, the conservative radio talk show host, called it reverse racism earlier in the week, and later in the week he went even further.  This is what he said.


MR. LIMBAUGH:  She brings a form of bigotry or racism to the court.  I don't care, we're not supposed to say it, we're supposed to pretend it didn't happen.  We're supposed to look at, at other things.  But it's the elephant in the room.  The real question here that needs to be asked, and nobody on our side, from a columnist to a TV commentator to anybody in our party has the guts to ask:  How can a president nominate such a candidate, and how can a party get behind such a candidate?  That's what would be asked if somebody were foolish enough to nominate David Duke or pick somebody even less offensive.

(End videotape)

MR. GREGORY:  Calling her racist, a reverse racist, comparing her to David Duke.  Do you think that's appropriate?

SEN. SESSIONS:  I don't think I'm going to use any such words as that.  I read her speech.  I'm troubled by her speech.  I think she has an opportunity to explain that.  And I don't think we--that I'm going to use such loaded words.  People on the outside can say what they choose to say.

MR. GREGORY:  But wait, but do you make a judgment about that?  Do you think they're appropriate?

SEN. SESSIONS:  I don't think those are words...

MR. GREGORY:  You think that's fair?

SEN. SESSIONS:  ...that I would use.  And I don't think--I don't--they would not be words that I would use.

MR. GREGORY:  Right.

SEN. SESSIONS:  But we need to focus on what...

MR. GREGORY:  Do you think she's a racist?

SEN. SESSIONS:  ...she would say.

MR. GREGORY:  Do you think she's a racist?

SEN. SESSIONS:  I think that she is a person who believes that her background can influence her decision.  That's what troubles me.

MR. GREGORY:  Right.  Right.

SEN. SESSIONS:  I would not use those words.

MR. GREGORY:  You would not use those words because you don't believe them?

SEN. SESSIONS:  I don't think that's an appropriate description of her.

MR. GREGORY:  Right.  Do you think that conservatives should stop using those words to describe her?

SEN. SESSIONS:  I would prefer that they not, but people have a free right to speak and say what they want and make the analogies that they want.  This is an important thing.  We should not demagogue race.  It's an important issue in our culture and our country.  We need to handle it with respect that it deserves and the care that it deserves.

MR. GREGORY:  Senator Leahy, are you troubled by her remarks?

SEN. LEAHY:  Well, I've talked to her about her remarks and, and we will during the hearing.  But in answer to the question you asked my friend Jeff Sessions, I totally reject those kind of claims made by leaders of the Republican Party like Newt Gingrich and Rush Limbaugh.  To call her--to equate her with the head of the Ku Klux Klan, to call her a bigot, this is baloney. Nothing in her background would indicate that she is a, a bigot or equivalent of the Ku Klux Klan or anything else.  This is a woman who has a compelling story; growing up in the, in the projects, her father working as a welder with a third grade education dies when she's a child, her mother works hard as a, as a nurse to put her through school.  She works hard to put her through school, graduates with honors both in undergraduate and in law school, becomes a prosecutor and a--and both Senator Sessions and I are former prosecutors. We know all the life experiences you get there.  She was a corporate lawyer. She spent more time on a federal--between the trial bench and the appellate bench in the federal court than anybody in the last hundred years who's come...

MR. GREGORY:  It's not about qualifications, it's a separate issue.

SEN. LEAHY:  No, but it is about qualifications.  And for her to talk about her life experience, is this any different than Judge Alito who talked about, well, if an immigration, the matter came before him he would certainly--or Justice Alito, he would certainly think about the experience of his grandparents coming here from Italy and so on, or when Justice Thomas had the same kind of expression...

MR. GREGORY:  Right.

SEN. LEAHY:  ...when his hearing.  Everybody--it would be ridiculous to think somebody's life experience doesn't affect them.  My experience as a prosecutor and in private practice affects me.  The fact that I'm the first Leahy since the family came in 1850 to Vermont, the first one to get a college degree, that affects me.

MR. GREGORY:  Senator Sessions, is it appropriate to take into account one's personal story, even a history of discrimination?

SEN. SESSIONS:  I don't believe that's the ideal of a judge in the American system.  I think a judge should be a neutral arbiter of the disputes between the two parties.  And if you are an individual citizen going before a judge in a court...

MR. GREGORY:  Right.

SEN. SESSIONS:  ...you would expect that judge to fairly rule on what the evidence was and what the law was and not what their personal background is.

MR. GREGORY:  All right, but to that point...

SEN. SESSIONS:  That's the--it's...

MR. GREGORY:  ...Judge Alito, during his confirmation...


MR. GREGORY:  ...hearing, President Bush's choice, you supported him, he said this back in 2006.

(Videotape, January 11, 2006)

JUDGE SAMUEL ALITO:  When I get a case about discrimination, I have to think about people in my own family who, who suffered discrimination because of their ethnic background or because of religion or, or because of gender.  And, and I do take that into account.

(End videotape)

MR. GREGORY:  You think that's a problem?

SEN. SESSIONS:  Well, everybody should have empathy.  Everybody should have feelings and sensitivities to other human beings and show that in, in their life and in their compassion to people.  But a judge is required, I think, to be neutral, to rule on the law and the facts and not allow their personal experience to override that.  She said in her written remarks that she felt that perhaps even in most cases a person should aspire to overcome their personal experiences, but that they, in most cases they may not.

MR. GREGORY:  Is this a...

SEN. SESSIONS:  So that was a pretty troubling thing to me.


SEN. SESSIONS:  But I think she has--let me just say this.  This lady has got a good record, as Pat says, for a judge:  prosecutor, lawyer, judge, district trial judge, federal judge.  She's smart.

MR. GREGORY:  Right.

SEN. SESSIONS:  She's capable.  She needs to have the opportunity to explain this.

MR. GREGORY:  Right.

SEN. SESSIONS:  And I think she can explain some of it, and, and we'll ask questions about it, and she should expect a rigorous but fair hearing.

MR. GREGORY:  Your view is she is qualified to be on the Supreme Court.

SEN. SESSIONS:  Oh, she's got the kind of background you would look for, almost an ideal mix of private practice, prosecution, trial judge and circuit judge.  That's very strong in her favor.

SEN. LEAHY:  I, I am very impressed with her.  I--when President George H.W. Bush first nominated her to the court I was happy to vote for her, when President Clinton then nominated her to another federal court I was happy to vote for her, all based on her merits.  It would be absolutely wrong to assume that people's individual experience...

MR. GREGORY:  Mm-hmm.

SEN. LEAHY:  ...doesn't at least influence their thinking.  That doesn't mean they can't follow the law.  They--that doesn't mean that somebody is going to go up there and say, "Man, I had an experience like this, but the law is clear on it."

MR. GREGORY:  Right.

SEN. LEAHY:  They're going to follow the law.  Of course she is.  And as Senator Session says, she's going to have--she'll be questioned about that, and that's fair.  She should be questioned about it.  And we'll give her a chance very soon to do that.

MR. GREGORY:  One more question on this point, and that is this New Haven case that has been debated where she...

SEN. SESSIONS:  The Ricci case.

MR. GREGORY:  The Ricci case.  She played a major role, in which you had a group of white firefighters who sued the city because they passed a promotion exam, the city did not recognize it because no African-Americans passed that same exam.  And it was Judge Sotomayor who upheld the, the city's decisions when they decided not to recognize that promotion test.

SEN. LEAHY:  As did, as did the Second Circuit Court of Appeals and Judge Barrington Parker, who is a Republican, nominated by a Republican president. Said she was bound--not matter how you feel about it, she was bound by the precedence of the Second Circuit, which she...

MR. GREGORY:  Well...

SEN. LEAHY:  ...which she followed.  Now, the U.S. Supreme Court may decide to reverse those precedents, which it can.  But she was--whether she liked it or not, she was following the law.  It's, it's the kind of judge that the Republicans always say they want, somebody who doesn't make law but follows the law.

MR. GREGORY:  The White House says, Senator Sessions, that in more than 80 percent of the cases Judge Sotomayor has rejected race claims.  Are you troubled by this decision?

SEN. SESSIONS:  I'm, I'm a little bit troubled.  It was a divided court, pretty strongly divided.  Hispanic judge criticized Judge Sotomayor pretty aggressively for not dealing with the serious constitutional questions that arise when you take a person who made the best score on the test and then invalidate it for basically a racial concern.  And so that requires a careful analysis by the court.  He criticized her and her panel for not carefully analyzing it.  That was his criticism, and I think she'll need to explain that.

MR. GREGORY:  Let, let me move on to the broader question of a judge's ideology, and whether senators should weigh that in taking on a vote like this.  President Obama said in his weekly radio address this weekend that the Senate should really move on from such considerations.  This is what he said.

(Videotape, Saturday)

PRES. OBAMA:  But what I hope is that we avoid the political posturing and ideological brinksmanship that has bogged down this process and Congress in the past.

(End videotape)

MR. GREGORY:  And yet, Senator Leahy, back in 2006 it was Senator Obama who supported a filibuster against Judge Alito, who made it very clear that ideology should be a factor in determining a judge's record and said this back in 2006.

(Audiotape, January 31, 2006)

PRES. OBAMA:  There are some who believe that the president, having won the election, should have complete authority to appoint his nominee, and that the Senate should only examine whether or not the justice is intellectually capable and is nice to his wife, or she is nice to her husband; that once you get beyond issues of intellect and personal character, then there shouldn't be further question as to whether the judge should be confirmed.  I disagree with this view.

(End audiotape)

SEN. LEAHY:  Well...

MR. GREGORY:  Is he trying to have it both ways?

SEN. LEAHY:  Well, I, I don't know...

MR. GREGORY:  I mean, either you give deference to the president or you don't.

SEN. LEAHY:  Well, he looks at it one view, of course, as a senator, and a different view as a president.  I've only had the opportunity and only will ever have the opportunity to look at it as a, as a senator.  I've voted on every single member of the current Supreme Court.  I'm aware of the ideology of each of them.  I voted for a number of Republican nominees on the Court. But--and I, I have a rule, I will not meet with special interest groups of either the right or the left.  I remember some of the liberal groups picketing my office, complaining I was going to vote for Justice Souter and that he would be against women's rights.  Well, he's turned out to be, of course, a strong supporter of women's rights.  I look at the justice themselves.  We'll have a full hearing.  Every one of these issues will be brought up.  I'm disturbed when I see a Republican group saying, even an hour before she was actually nominated, "Oh, you must reject her"; others going on TV, leaders of the Republican Party, like Rush Limbaugh and Newt Gingrich, saying you, you must reject her.  We haven't even had the hearing.  To their credit, no Republican senator has stepped up and made statements like that.  They've all said let's have the hearing.  We'll have a hearing, ask her the questions, make up your mind.  This is--you know, there's only 101 people who get to choose on the Supreme Court justice:  the president and the 100 members of the Senate.

MR. GREGORY:  OK, let me ask you this.  When will these hearings start?  Will you have her in place, if she's confirmed, by the August recess, Senator?

SEN. SESSIONS:  I think that's rushing it.  I believe that she has over 3,000, maybe 4,000-plus opinions that need to be examined.  And I think there's no need for us to do that.  We do need to do it by October.  That's when Justice Souter will be stepping down.

MR. GREGORY:  Right.  President Obama wants it sooner than that.

SEN. LEAHY:  The--some of the White House probably like it next month, which would be June.

MR. GREGORY:  Right.

SEN. LEAHY:  That may be, and I think that probably would be too soon.  Most of these cases we've talked about are pro forma cases.  It's, it's not going to take a lawyer much time to, to figure out that.  Our staff's had all those cases, they've done that.  Senator Sessions and I have worked closely together, we agreed on the questionnaire for her.  She--that--those answers should be here this week, then I'll decide when we're going to set it.  But I'll tell you one thing that, that is going to influence the timing of when I will set this hearing is all these attacks are going out against her, she can't answer them.

MR. GREGORY:  Mm-hmm.

SEN. LEAHY:  As a judge, she has to sit back there; some of the most vicious attacks, being called bigoted...

MR. GREGORY:  Right.

SEN. LEAHY:  ...calling her racist, saying that no Republican should be allowed to vote for her.  I intend to give her an opportunity as soon as possible to answer those...

MR. GREGORY:  Will you--as you sit here now, do you meet the president's timetable?

SEN. LEAHY:  I will meet my timetable.

MR. GREGORY:  And that could be different.

SEN. LEAHY:  It could be different.

MR. GREGORY:  Senator Sessions, are you prepared to say now that a filibuster will not happen?

SEN. SESSIONS:  I don't think that's appropriate for me to say.  I think it's unlikely, but we'll have to see how this hearing plays out.  President Obama filibustered Alito.  So it's...

MR. GREGORY:  Right.  But you don't see it here?  You think it's unlikely here.

SEN. SESSIONS:  But I, I feel like a filibuster should not be used readily and ought to be for extraordinary circumstances.

MR. GREGORY:  Final point:  Is there political peril for Republicans opposing the first Hispanic Supreme Court justice?

SEN. SESSIONS:  I think it's important that this nominee be given a fair hearing, that the American people, all the American people feel like this was fairly discussed.  But these are important issues, and if she evidences a philosophy that would justify her setting policy on the bench, going beyond what the case called for her to go on, promoting her own personal agenda in, in the guise of making decisions, then that could be a basis to vote no.

SEN. LEAHY:  (Unintelligible)...could I add, add just one thing...

MR. GREGORY:  Very quickly.

SEN. LEAHY:  ...on the timing.  I certainly understand why the president wants her in there soon.  In the Senate, we have to determine what the time's going to be.  I, I, I agree with the president, he's made a good choice.  I agree with him, we should have it soon.  But I'm going to have to make that decision of when, when the hearing will be, in consultation with Senator Sessions.


MR. GREGORY:  All right, we'll leave it there for now.  Thank you both for joining us this morning.

SEN. SESSIONS:  Thank you.

SEN. LEAHY:  Thank you.

MR. GREGORY:  And coming next, the economy.  Are we seeing real signs of a recovery?  And what will be the impact of a General Motors bankruptcy?  Our conversation from Friday evening from the floor of the New York Stock Exchange with three key CEOs:  Anne Mulcahy of Xerox, Google's Eric Schmidt and Caterpillar's Jim Owens.  Plus, our political roundtable weighs in next on MEET THE PRESS.


MR. GREGORY:  Our discussion on the economy with three top CEOs from the floor of the New York Stock exchange; it's after this brief commercial break.


MR. GREGORY:  We're back.  On Friday evening, just after the closing bell, I sat down to talk about the troubled economy with the CEOs of three major companies:  Jim Owens of Caterpillar, Anne Mulcahy of Xerox and Eric Schmidt of Google.

And welcome all of you.  Here we are on the floor of the New York Stock Exchange, one of the nerve centers of the American economy, and yet the grim news that surrounds this floor is about General Motors.  General Motors is about to enter bankruptcy, it is likely to no longer be part of the Dow.

Jim Owens, what is the significance to this economy of GM going into bankruptcy?

MR. JIM OWENS:  That's a--you know, the auto industry in general globally, I think, is a--has got significant excess capacity.  And in the case of the U.S. auto industry, they had a, a problem in terms that they were cost competitive in the global economy.  So the bankruptcy and the chance to reorganize and to re-establish an industry that is competitive with the products they build in the domestic economy and hopefully internationally is one that GM should take. I think they've made significant improvements operationally the last few years, but with their labor costs and with the excess number of dealers they had, they just weren't in a position to compete without restructuring.

MR. GREGORY:  But, Anne Mulcahy, this is also a brand issue.


MR. GREGORY:  This is the great American brand of General Motors.  How do they emerge out of bankruptcy to the point where people are actually going to buy their cars again?  At Xerox, at the height of the problem for your company, you said, "Unh-unh, we're not going into bankruptcy."

MS. MULCAHY:  Right.

MR. GREGORY:  "It's a bad idea."


MR. GREGORY:  Do you think it's a bad idea here?

MS. MULCAHY:  Well, I think it's the only idea here, so I think we're at a point where it is the right path.  And, you know, as Jim said, it, it requires a dramatic restructuring of the industry.  And that can either happen outside of or, or inside of bankruptcy, and in this case there is no other path at this point.  I do think that, you know, the American people want an American car industry, and if things are done correctly there will be an appetite to continue to support it.  But it's going to have to be one that demonstrates that it's sustainable in the long term.

MR. GREGORY:  Eric Schmidt, is America, is the United States still the global leader in manufacturing?

MR. ERIC SCHMIDT:  It, it can be and it should be, because we have the best scientists, the best technology, the best manufacturing processes worldwide. Some industries have run into trouble, too much capital, too much inventory, as we've talked about.  But the fact of the matter is that there's a great opportunity for the laid off workers who are very highly skilled to move into new industries.  New--for example, the energy industries, in batteries and that sort of thing.

MR. GREGORY:  Right.

MR. SCHMIDT:  And America can be a leader in other industries, just because of General Motor's failure.

MR. GREGORY:  I want to show you the, the cover of The Economist that is out this weekend, "Business in America:  Its next problem is big government." And you've got Uncle Sam with all the leverage, with all the control over American business.

Anne, how big of a problem is this?  How does the investor factor in the government's role in trying to, to rescue this economy in terms of its impact on business?

MS. MULCAHY:  Well, I think it's a delicate balance.  I think all of us understand the need for the government to intervene and take the actions they did, whether it was for the financial services industry or the stimulus plan, but I also think there's a need for an exit plan, that this has to be one that's thought through.

MR. GREGORY:  Right.  But do you think there is an exit plan?  Have we heard from this president, from this Treasury secretary where the off ramp is for all of this intervention in the market?

MS. MULCAHY:  I think we've heard the intent, I don't think we've heard the details.

MR. GREGORY:  Mm-hmm.  Eric:

MR. SCHMIDT:  The stimulus package was designed around a two-year window, and literally be done in two years.  It's very important the government get out of business and let business do its thing.  The most important thing to remember, I think, is that jobs, wealth are created in the private sector.  That's about capitalism.  The other thing that has to happen is we've got to change the rules so we don't end up with all these organizations that are too big to fail again.

MR. GREGORY:  Right.

MR. SCHMIDT:  And go have to bail them out again.  We've done a fine job bailing them out, let's only do this once per lifetime.

MR. GREGORY:  Well, but that's also the question, Jim, which is there is a, a dynamic in the American economy where jobs are lost every year, where businesses go under; and yet we've determined, the government has, that GM is too big to fail, so it's going to have a 72 percent stake, likely, at the end of this, in General Motors.  That's a scary prospect.

MR. OWENS:  Yeah.

MR. GREGORY:  You've got the federal government going to run General Motors.

MR. OWENS:  Yeah.  I think that's fundamental unhealthy.  The federal government needs to be in and out, they need to help get the restructuring done.  But I think fundamentally the American public, I think they want to choose the best vehicle, the best car, and American manufacturers need to be focused on competing.

MR. GREGORY:  Right.

MR. OWENS:  And having the, the best product, best product technology and be cost competitive, and they should also focus on export.

MR. GREGORY:  What happens to GM?  What kind of company is it on the other side of this?

MS. MULCAHY:  Well, I think it's, it's a smaller, it's a leaner company for sure.  Clearly it is a company that will have the ability to invest in the future vs.  just protect the past, which it has been.  That's hugely important to being able to respond to what really are the requirements to really produce the kind of vehicles that Jim's talked about.  And they have got to get a break from the legacy and move on and focus on the future, and that means they'll be smaller and they will be a leaner--they will have to make tough choices...

MR. SCHMIDT:  And they're...

MS. MULCAHY:  ...about what they do.

MR. SCHMIDT:  They're also going to be highly incentivized...

MS. MULCAHY:  Absolutely.

MR. SCHMIDT:  ...to get all that government money back out.

MS. MULCAHY:  Exactly.

MR. GREGORY:  Right.

MR. SCHMIDT:  Because the last thing you want is the government in your board room telling you what to do.

MR. GREGORY:  Let me talk about the economy more generally.

MS. MULCAHY:  Right.

MR. GREGORY:  Again, we're on the floor of the stock exchange.  Several months ago the Dow was at about 6500, it closed just above 8500.  And the market, in terms of charting a direction, has been upward.  It's not falling. It maybe comes back a little bit if there's overconfidence, but it's generally from 6500 to 8500.

Eric, has confidence returned?

MR. SCHMIDT:  Well, I would say we're exactly on schedule if you look at what, what has happened.  We had the huge stimulus package, the intervention globally in all the financial markets, more than $10 trillion of capital guaranteed or generated literally out of thin air to recover from the banking crisis, which is largely behind us.  Looks like sometime over the summer will be the business low, sometime in the early part of 2010 we'll see the unemployment high.  We're in a classic recovery of a very long and hard recession.  The question now is what's next?  What kind of a recovery?  What happens in 2010?  What happens in 2011?  We're right on schedule.  And if you're one of these people who's, for example, trying to refinance your mortgage right now at the lowest rates possible, or you trying to sell your house at a much lower price, you can sell it.

MR. GREGORY:  You two are seeing maybe a slightly different environment. It's very difficult for Xerox right now, it has been for the, for the balance of the year.  What do you see out there?  Is there renewed confidence?

MS. MULCAHY:  Well, I think some things are working better, there's no question.

MR. GREGORY:  Right.

MS. MULCAHY:  Credit markets are working better, I think there is some, some positive signals.  I think that I would characterize it as we've seen a, a flattening out.  We're not in a spiral down.  But I think the big question mark is the pace of recovery.  And for most of us it would be difficult to plan for a--any kind of aggressive, positive uptick right now.

MR. GREGORY:  Right.

MS. MULCAHY:  So I think there's a fairly conservative view as to we may have leveled out, but it is very unclear as to when things will improve.

MR. GREGORY:  Let me stay on this point, because one of the really important parts of--and it's a complex part of our financial system--is access to credit.

MR. SCHMIDT:  Mm-hmm.

MR. GREGORY:  Now, so for the consumer, I'm feeling the pinch in terms of my credit card, in terms of my rate, or if I want to get a loan for something. But for businesses, too, you're feeling a pinch.

So, Jim, what kind of access are you getting to credit?  Are, are you getting less?  Are the terms stricter?  And how is it impacting business?

MR. OWENS:  Well, we're a--fortunately have a pretty strong balance sheet and have an A, A1/P1 rating, so.  But the credit crisis in the fourth quarter has severe impact on our business, and commercial paper markets literally almost shut down our ability to issue medium-term notes in our finance subsidiary.

MR. GREGORY:  Explain exactly what that means.

MR. OWENS:  Well, medium-term notes would be three- to five-year notes which we would go to the market with in the financial markets, and then we would slice those down and be able to lend to the small contractor.  And when those markets kind of shut down around the world, our ability to finance the small contractor essentially was in question.  So what's--the good thing is there was a, a real seizure in global credit markets in the fourth quarter.  In the first quarter they began to get a little better, and in, in the last couple of months they have improved dramatically.

MR. GREGORY:  What about the jobs picture?  Are you, are you going to rehire? Has the stimulus allowed you to rehire?  You got in this flap with President Obama a little bit about he said you'd be able to rehire.

MR. OWENS:  Yeah, well.

MR. GREGORY:  You said not so fast.

MR. OWENS:  Well, a little timing issue here.  Essentially, I mean, we've had to--you know, our demand for our products has dropped.  We sold $51 billion worth of products globally last year, demand this year's going to be in the mid 30s.  So a, a, a very large drop in demand for our products, therefore employment.  So we have had to continue reducing employment, and I'd say we will probably not be able--in a position to rehire until mid next year as we see these markets begin to recover.

MR. GREGORY:  At Xerox?

MS. MULCAHY:  We're hiring, but very modestly.  I mean, if you look at net head count, it's still coming down because that's what our intent is...

MR. GREGORY:  Right.

MS. MULCAHY:  ...until we're sure that things are improving.  So I worry about that.

MR. GREGORY:  Right.

MS. MULCAHY:  I think that's a big problem right now.

MR. GREGORY:  And, Eric Schmidt, you know, one of my favorite questions to ask you is about the consumer, and what are some of the top searches on Google that indicate the mind-set of the consumer; the person who's looking for a job, maybe out of a job?

MR. SCHMIDT:  It's mortgage refinance.


MR. SCHMIDT:  And job listings.


MR. SCHMIDT:  We know people are looking very, very hard for bargains right now.  We know people are in the market, people are active, the markets are beginning to clear.  Inventories, as you know, are declining, which is a good sign.

MR. GREGORY:  Let me ask you about the stimulus plan, a hundred days since it's been signed.  Is it working?  Are, are businesses seeing it?

MR. SCHMIDT:  They're beginning to.  The stimulus plan was, remember, a two-year program, and we're just at the beginning of that.  It takes a while for all those shovel-ready projects to get through the bureaucracies at the state and local level, and that money is beginning to flow.  People are getting to be, be hired.

MS. MULCAHY:  Mm-hmm.

MR. SCHMIDT:  You won't really see the economic impact in terms of both inventories and revenue and jobs till much later in the fall just because the amount of time it takes.

MR. GREGORY:  Are you seeing it, Jim?

MR. OWENS:  Well, I think what we're seeing right now, and I've been talking to our dealers all around the country, people are starting to bid work again. And this is--there's about $70 billion in the stimulus package.  Keep in mind, that's about 6.5 percent of total U.S. construction, that level of spending. But it'll have a positive impact and I think we'll start to see that kick in through the summer and into the fall.  I wouldn't be surprised if we don't need to come back with additional stimulus.

MR. GREGORY:  The, the White House, I know, is bracing in this coming week for a jobs report that is going to be grim, with the unemployment rate climbing above 9 percent.  And so I still go back to the stimulus.  As you travel around the world and as your business in other parts of the world, are you feeling more of the effect of stimulus plans in places like China than you are in America?

MS. MULCAHY:  Well, I think that, you know, China's probably the exception, because China clearly has put a tremendous amount of money very quickly.  I think the U.S. is, you know, very much right behind China in terms of the aggressive nature of the stimulus and the timing and the pace of the stimulus...

MR. GREGORY:  Right.

MS. MULCAHY:  ...vs.  other parts of the world.  But I would agree that it is early days.  It would be tough to show a lot of tangible benefits right now from the stimulus plan.

MR. SCHMIDT:  There's a huge divergence in outcomes, different countries. Russia, for example, is going to take many, many years to recover from the enormous bubble and burst that they went through, stock market financials, whereas China will do pretty well.

MR. GREGORY:  Let me ask you all to, to comment on the frightening prospect of what's next.  In the financial sector, credit card losses are expected to be quite big.  Commercial real estate is another flash point.  Pension funds and state budgets across the country are really at a breaking point.  So I'll start with you, Jim.  What's next in this crisis?

MR. OWENS:  You know, I--this confidence is a critical factor, and I think any time you go through the kind of free fall in economic activity that we've seen in the fourth quarter and the first and second, people get genuinely very concerned.  My guess is that it's, it's usually darkest before the dawn, and I think this economy is going to bottom by the, the third quarter of this year globally and we're going to start to see positive real growth in the latter part of this year going into next year.

MS. MULCAHY:  I think in the near term we've got some tough problems, but I think the flip side of this is the deleveraging of the consumer and the deleveraging of the business environment as well.  And that actually, I think, is going to have an--we're going to have an opportunity to solve some of the more, I think, difficult physical problems in the future because I do believe and hope that we get a little bit of permanent change in terms of the way we think about both, you know, corporate debt as well as personal debt.

MR. SCHMIDT:  Well, most of the metrics are back to normal averages.  The stock market averages, the volatility indices, the real estate metrics are back to something reasonable after being way out of whack.  So that tells you're we're set up for what we do best, which is innovation, literally creating new industries, growing, growing global companies as represented by all three of our, our firms.  So there's every reason to believe that the strengths of America will, will show off in the stable market.  We'll recover quicker than everybody else, and because we have the world's best research universities, because the president in the stimulus package, anyway, focused on using the stimulus money to get things going even faster...

MR. GREGORY:  Right.

MR. SCHMIDT:  ...there's every reason to believe that people will do very well in America.

MR. GREGORY:  And will we need more stimulus, do you think, from the federal government?

MR. SCHMIDT:  It's, it's too early to tell.  It depends on how quick the recovery is.  When the stimulus package went through, an awful lot of people thought that it was the first of a, of, of a two-shot process.

MR. GREGORY:  Right.

MR. SCHMIDT:  We'll, we'll determine--we'll know after we see what happens to the president's budget proposal, which is having a more deliberate process through the Senate and the House.

MR. GREGORY:  So when there is recovery, Anne, what is the new normal?  What does the new economy look like?  How is it different?

MS. MULCAHY:  Well, I think it's slower growth.  I think that, you know, we'll all be living in a world where perhaps the capacity that got created in the last decade is not coming back as quickly.

MR. GREGORY:  Meaning we talk about--is wealth going to return?

MS. MULCAHY:  I think wealth does return.

MR. GREGORY:  To the levels that we've experienced it?

MS. MULCAHY:  Not to the levels we've experienced it.

MR. GREGORY:  Right.

MS. MULCAHY:  And I think that's growth across all segments, whether it's personal wealth, whether it's business growth and profits.  I think there is a sobering of the economy that, that will happen and that is appropriate.  But that's not a bad thing, and I think it's just--it's an adjustment, it's clearly a transitional process that we're going through, but I think it's also a soft landing as we come out of here.

MR. GREGORY:  What is the foundation of a, of a new economy...

MR. OWENS:  Well, what...

MR. GREGORY:  ...as you see it?

MR. OWENS:  One point, I think the United States, we have to have more savings and more investment.

MS. MULCAHY:  Right.

MR. OWENS:  We have to change the structure.  With the twin deficits we have, both the budget deficit and the trade deficit are, I don't think, sustainable. So we need to be thinking about how to create more savings and investment and an export-oriented oriented growth.  I'm very optimistic about the global economy, and I think the key thing for America is we've got to think about being a global leader.  Back to some of Eric's points; we've got the best scientists, a lot of innovation.  We need to focus on being competitive in the global market.  We're 5 percent of the world's population.  The key thing now is avoid protectionism, think about global competitiveness.  That's going to--you know, the best American companies will invest all over the world and be leaders in the world market.

MR. GREGORY:  Eric Schmidt, California.  The problems in California: joblessness, a broken political system and an out of control deficit which in many ways mirrors, in some ways, the deficit problem for the federal government, and a huge debt burden that this administration is only adding to as we go along.  Is what's happening in California going to spread across the country?

MR. SCHMIDT:  I, I hope not.  The California problems are so specific to California.  There's relatively little reliance on property tax due to property 13--Prop 13.  There's higher reliance on income tax, which is highly cyclical.  You have an entrenched bureaucracy and political structure which is very inflexible, with very highly polarized parties on both sides.  Not a good model for the United States.  I don't know how we're going to get through it in California.  The state is a, is functionally operating in a bankrupt way. And of course, we're getting a new governor next year.

MR. GREGORY:  And finally, Anne Mulcahy, you have a successor.


MR. GREGORY:  Ursula Burns, the first African-American woman to lead a Fortune 500 company.


MR. GREGORY:  Women, as I don't have to tell you, make up 60 percent of the work force and just 16 percent of the top most senior positions in corporate America.  Why is it still difficult for women, do you think, at the highest reaches of the U.S. economy?

MS. MULCAHY:  Well, I think there's a long history of opportunity, of the right assignments, clearly of role models, which play a, a huge factor in building confidence and aspirations for women in business today.  I'm encouraged by the fact that there is an amazing, you know, bench now of women coming through, you know, the private sector that I think are going to be extraordinary candidates for the future.  I think Xerox has always been ahead of its time in terms of inclusiveness, decades of a level playing field.  And we're in the enviable position where we can make that handoff from one woman to another woman.

MR. GREGORY:  All right, Anne Mulcahy, Eric Schmidt, Jim Owens, thank you all very much.

MS. MULCAHY:  Thank you.

MR. OWENS:  Thank you, David.

MR. GREGORY:  And our thanks also to the New York Stock Exchange for opening their floor to us.

Coming next, we'll be back here in Washington live with our political roundtable.  Insights on the Obama administration, the economy and the politics of the Sotomayor Supreme Court nomination.  With us, the BBC's Katty Kay, author Richard Wolffe and the managing editor and anchor of the "NBC Nightly News" Brian Williams, after this brief station break.


MR. GREGORY:  We are back and joined here in Washington by new authors Katty Kay of the BBC and Richard Wolffe, who covered the Obama campaign for Newsweek magazine.  And up in New York at 30 Rock, the managing editor and anchor of NBC's "Nightly News," Brian Williams.

Brian--welcome all of you.

But, Brian, I want to, I want to start with you.  Unique access to this Obama White House in preparation for the special "Inside the Obama White House." There you were inside the White House this week.  With such a crowded in box of problems, tell me what your observations were having spent the day there.

MR. BRIAN WILLIAMS:  Well, the reason I'm up here in New York and not with you in Washington, David, we are--we had something like 20 camera crews, we have something like 150 hours of videotape.  All of our crews were dispatched through East and West Wings, and they dropped off the tape of what they saw from their vantage point.  I spent the day with the president and senior staff.  So we're going through all of this to distill it down to two hours--9 o'clock Eastern Tuesday, 9 o'clock Eastern Wednesday--and trying to put it all together to give an accurate depiction.  We, we had extraordinary access.  I think it's very safe to say that our viewers will see a view of the White House never televised before, saying nothing of the first really up close view of, of this Obama White House; senior staff, the president himself, the first lady and yes, to answer some of the questions I've had about what we were given access to, Bo will make an appearance with us on television.  But it was truly extraordinary, David.

MR. GREGORY:  You, you were there at such an important time, and you broke news with the interview with President Obama about the Supreme Court fight over his pick, his nominee, Judge Sotomayor.  He made the point in his interview with you which was on "Nightly News" on Friday that he felt she would've restated her views about a Latina woman making better decisions than a white man, and you had that exchange.  What has not been seen is another point of the interview where he came back to this topic, and I want to show that and have you react to it.

(Videotape, Friday)

MR. WILLIAMS:  I can't thank you enough for the generosity of your time.

PRES. OBAMA:  Well, I appreciate that.  And, you know, actually, before we cut off, I mean, I just want to--I want to go back to that earlier point about the justice, because I just think when, when somebody has a 17-year record of extraordinary service on the bench, you know, I, I think it's very important for, you know, my former colleagues in, in the Senate to stay focused on, you know, judging this person on the merits and, and not engaging in the kinds of, you know, political silliness that has come to surround the, the Supreme Court these days.

(End videotape)

MR. GREGORY:  Brian, laying down a marker here in this debate.

MR. WILLIAMS:  Now that's interesting.  We were in the Blue Room at the end of the business day, David.  We're going back Tuesday for another full sit-down interview with the president prior to his big overseas trip.  But this was the end of the day, thus you heard me thanking him for all of the access they granted us.

MR. GREGORY:  Mm-hmm.

MR. WILLIAMS:  And even though we had already done several questions and answers about Judge Sotomayor at the top of the interview, it wasn't enough. He went back.  They were angered by what had been said all week and they wanted to make this point that if given the chance, she would probably take back that wording that's been problematic.  But it was interesting that he, he didn't get enough and he brought the conversation back around a few more things he wanted to say.

MR. GREGORY:  Katty Kay, your observations from our interview here today with Senators Leahy and Sessions.  Senator Sessions making it very clear it's an area that he's very uncomfortable with.

MS. KATTY KAY:  Making it clear that here's an area that he's uncomfortable with, and yet referring to Judge Alito and at the same time saying, "Yes, it is good to have life experience and empathy when you're making the decision." So there seemed to be some contradiction there, I thought, in what Senator Sessions was saying...

MR. GREGORY:  Mm-hmm.

MS. KAY:  ...about Sotomayor.  I think that, you know, the Republicans are going to have to tread very carefully on this one.  They don't want to end up being the party of white men.  They can see that her background is compelling, that the majority of American people are going to look at her life story and think it's something that they can relate to.  And do they want to be the ones that are in the position of blocking a Hispanic?  It just didn't sound to me, from what Senator Sessions was saying to you earlier, David, that they really think they're going to pick much of a fight with this one.

MR. GREGORY:  Richard Wolffe, the author of "Renegade:  The Making of a President," the first real definite account inside the Obama campaign.  And it's interesting, you write about the fact that he talks, back when he opposed Chief Justice Roberts...


MR. GREGORY:  ...about the precedent that that could set; this is what you write in the book, quoting then Senator Obama:  "`You know, I would hope, if I'm president someday, 20 years down the road, Republicans will judge my nominees on the merits, whether they agree with them philosophically or not,' he told his staff." Describe that thinking at the time.

MR. WOLFFE:  Right.  Well, of course he was wrong on the timing of when he'd be president.

MR. GREGORY:  Right.

MR. WOLFFE:  But here was someone who leaned very heavily towards voting for John Roberts, and he had to be convinced out of it by his staff, his then chief of staff Pete Rouse, now a senior adviser in the White House, saying, "Look, this isn't Harvard Law School's moot court, this isn't an exercise in, in debating.  If you were to vote for him, you'd have to live with the consequences.  And, by the way, Republicans are not going to reward you 20 years down the road anyway." So the interesting thing is here, here's a guy who wants to be unconventional, who actually wanted to right with his party; in the end votes, for political reasons, against John Roberts.  But the postscript is that he goes on Daily Kos, this very activist, progressive Web site, and says, "Stop castigating Democrats who voted for, for John Roberts, because"...

MR. GREGORY:  Mm-hmm.

MR. WOLFFE:  ..."you know, we're all in this together." And I think, you know, he picks fights because he's struggling with that tension between being a renegade and being a conventional politician who can get things done.

MR. GREGORY:  I know we see that throughout the campaign.

Kat, I want to mention your book as well, "Womenomics," and it's so interesting in light of the conversation we just had with those three CEOs. Here you have Anne Mulcahy talking at the end about the ability for a woman to hand off the top job at a company to another woman, and yet the statistic that I brought up about so few women still at the highest reaches of corporate America.  What do you take away from that?

MS. KAY:  I thought it was really interesting what Anne was saying about her experiences as a woman, because I think there is now, perhaps after 30 years--when the last 30 years women effectively tried to be men in the workplace, we wore the broad shoulder pads, we denied that we had differences, and now women are saying, you know what, we do have different management styles.  We are more empathetic, we do take longer term decisions, we're more risk adverse.  And not only are we different, but in some ways we're actually really valuable.  There are studies showing that companies, American companies that employ more women actually make more money.  That gives women a lot of power in the marketplace.  It gives women the power to say we want to work the way we want to work, we want to change the way that companies are actually looking in America.  And I think you have role models like Anne at the top of Xerox and then handing over to another woman, that will filter down; as it does having a judge on the Supreme Court who is a woman, it filters down to women all along the road saying we have those role models now.  We also have power in the marketplace as we've never had.

MR. GREGORY:  Mm-hmm.

MS. KAY:  We can use that to determine our own careers.

MR. GREGORY:  Little less than a minute left, I want to go back to Brian Williams for a final thought here.

Brian, as, as viewers prepare to watch "Inside the White House" and you think about putting all of this together, you're such a, a careful student of the presidency.  How did this president approach the presidency, as you can judge, at this stage?

MR. WILLIAMS:  I would only urge our viewers to hold on to something that's bolted down, because it's a fast ride, some of these narrow stairwells that date back to the top of the last century in the White House.  You see chief of staff Rahm Emanuel, we have no fewer than eight doors being closed in our faces by him.  But at the same time, we hear Rahm Emanuel talking about his family--there's Bo with the first couple--and you see how the president, David, has changed the center of gravity.  We're use to that desk in the Oval Office with paperweights and tchotchkes and family photos.

MR. GREGORY:  Right.

MR. WILLIAMS:  He's moving the work force all over, doing work in the den in the residence, the study off the Oval Office.  Not uncommon at all to see him with a handful of M&Ms just going from office to office in the hallway in the West Wing.  Things are changing on the fly.

MR. GREGORY:  All right, Brian Williams, thank you very much.

I want to leave it there for now, but a reminder:  You can watch the Brian Williams report "Inside the Obama White House," it's a two-night special beginning Tuesday at 9 PM Eastern time right here on NBC.

And check our Web site this week to read excepts of Katty Kay and Richard's new books and here them talk more about their reporting in our MEET THE PRESS Take Two Web extra.  It'll be up on our Web site throughout the week, mtp.msnbc.com.  And we'll be right back.


MR. GREGORY:  That's all for today.  We're off next week because of French Open coverage here on NBC, so we'll be back here in two weeks.  If it's Sunday, it's MEET THE PRESS.


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