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Meet the Press transcript for July 11, 2010

Transcript of the July 11, 2010 broadcast of NBC's Meet the Press, featuring Robert Gibbs, David Brooks, Harold Ford Jr., Ed Gillespie and Rachel Maddow.

MR. DAVID GREGORY:  This Sunday, America's summer of frustration:  the economy, the oil spill, immigration, the war in Afghanistan.  Is the Obama administration falling short or are expectations simply too high? I'll ask our exclusive guest this morning, White House press secretary Robert Gibbs.

Then, our ongoing focus on Decision 2010.  The key races and the key debates over economic stimulus, energy, and national security, as the president tries to frame the fall debate between Republicans and Democrats.


PRES. BARACK OBAMA:  It's a choice between falling backwards or moving forward.

(End videotape)

MR. GREGORY:  Our political roundtable weighs in:  MSNBC's Rachel Maddow, just back from an up-close reporting tour in Afghanistan; New York Times columnist David Brooks; former Democratic Congressman Harold Ford, author of the upcoming political memoir "More Davids Than Goliaths"; and Ed Gillespie, former White House counselor and chairman of the Republican

Finally, it's our MEET THE PRESS MINUTE. After this week's spy swap with Russia, a look back at the spy games of old and the confessions of a Soviet spy 57 years ago.

Announcer:  From NBC News in Washington, MEET THE PRESS with David Gregory.

MR. GREGORY:  Good morning.

MR. DAVID GREGORY:  Another attempt this weekend by BP to contain the oil spill in the Gulf of Mexico.  The cap catching some of the oil was removed in an effort to replace it with an improved version to try to capture all of the oil.  In the meantime, you can see, the oil is now
flowing once again freely into the gulf.

Joining us this morning for an exclusive interview, White House press secretary Robert Gibbs.

Welcome back to MEET THE PRESS, Robert.

MR. ROBERT GIBBS:  Good morning.

MR. GREGORY:  Good to have you.

MR. GIBBS:  How are you?

MR. GREGORY:  This developing story is one that you're obviously tracking very closely.  The president said to the country that by the end of June we'd see containment of the oil.  What's happening now...

MR. GIBBS:  Right.

MR. GREGORY:  ...and what level of concern does it give you, or optimism does it give you?

MR. GIBBS:  Well, we're at a very critical point in the containment efforts. The sealing cap will double our capacity.  There's another procedure called the Helix that could take 25,000 barrels a day out. That should be online we hope later today.  Obviously, the timeline got pushed backwards because of hurricane and tropical weather in the gulf that made things more difficult. But understand that we were pulling about 25,000 barrels per oil--25,000 barrels of oil a day in a containment procedure.  When all of this is online--the sealing cap, the
Helix, the Q4000, which is burning oil even as we speak, so some oil is being contained--we'll have a containment procedure that will be between 60 and 80,000 barrels of oil a day.  The sealing cap will also help in the next step, and that will be getting the relief well finished, shoving the mud and the cement down both the relief well and through the blowout preventer and sealing that well once and for all.

MR. GREGORY:  You're confident, the president's confident in how BP's handling this phase of the operation?

MR. GIBBS:  Thad Allen and our federal on-scene coordinator approved BP going ahead with the procedures that they're working on now.  Those pictures--again, that--the top hat that has been on there for several weeks that collected 700,000 barrels of oil is off.  But the new
containment procedure will more than triple our capacity when it's all said and done.

MR. GREGORY:  Let me talk about politics, and the president's campaigning. In effect, it's the October in July in some ways, the president on the campaign trail this week.  And he, he attempted to frame the debate for the fall.  He was in Kansas City, Missouri, on Thursday,
and this is what he said.

(Videotape, Thursday)

PRES. OBAMA:  You're going to face a choice in November, and I want everybody to be very clear about what the--that choice is.  This is a choice between the policies that got us into this mess in the first place and the policies that are getting us out of this mess.

(End videotape)

MR. GREGORY:  The policies getting us out of this mess is the claim. Those are the president's policies.  It's what Democrats would be running on.  And yet this is where the public is.  The president's approval rating is upside down, according to our most recent poll, approving, 45
percent; disapproving, 48 percent.  And a sense of whether the country's on the right track, look at this, pretty sour mood out there:  62 percent in our poll saying it's off on the wrong track.  So, contrary to what the president is saying, the public seems to be in a different place.

MR. GIBBS:  Well, David, I don't think it's surprising that the American people are frustrated after having lost eight and a half million jobs. But that's exactly the argument that he's making.  Understand, the last six months of 2008, right, we saw an economy that shed three million jobs.  The first six months of 2010, this economy has created 600,000 private sector jobs.  The, the point the president was making and the point that the president will make this fall is, do you want to go backward to an economy that led us into this mess, that saw the greatest financial calamity since the Great Depression, that turned record surpluses into record deficits?  Or do you want to continue on the track that the president has put us on, that has started to create private sector jobs.

The president will travel this week to Holland, Michigan.  Michigan, everybody in this country knows, is, is, is home to auto manufacturing in a big way. But what the president's going to go visit is the ninth of nine advanced battery manufacturing plants--this will be a ground
breaking--that will create jobs, that will supply advanced batteries for the Chevy Volt, an electric car that Chevy's going to manufacture and will get a hundred miles on a single charge.  This is the ninth of nine that's are--as a result of that recovery act plan.  Just in 2010, we
produced 2 percent of the world's advanced batteries.  In other words, to produce something like the Chevy Volt, we were going to have to bring batteries in from overseas.  As a result of this Recovery Act investment that is met with private capital, in just five years, by 2015, we'll
manufacture 40 percent of the world's batteries.  That creates the jobs of tomorrow.  So we have a choice.  Are we going to go back to the movie that we've already seen and we know the results, or are we going to look forward?

MR. GREGORY:  You're talking about a future market for an energy independent market, which is certainly very important.  There's a lot of agreement about that.  But the president's talking about his particular record that he wants to run on.  And there are some facts.  We know that
private sector hiring has been extremely flat.  We know that the mortgage market is still a mess.  After that first time tax credit was expired, first-time home sales plummeted by a third.  And we know that there's a sense that even the stimulus is not producing the jobs that it was
promised to; 9.5 percent unemployment now.  The original reporting was we'd keep unemployment with the stimulus at 8 percent.

And here's Politico just this morning, Jonathan Martin writing about some of the feeling among Democrats, let me put it up on the screen.  "While almost uniformly grateful for the financial windfall they enjoyed from the stimulus legislation, the Democrats," some Democrats, "believe it
wasn't sold well to the public and more still has to be done to revive the lagging economy.  `I think the bottom line is they're not seeing the jobs that should have come with it,' said West Virginia Governor Joe Manchin," now running for Senate, "explaining why voters in his state
were dissatisfied with the massive spending bill.  `Are we just protecting government or are we really stimulating the economy?'"

MR. GIBBS:  Well, let's take a look at it.  Again, the quarter before--the, the two quarters of economic growth that we had before the president came to office, our economy was contracting by 6 percent.  Now we're growing by 3 percent.  David, I'm not here to unfurl the "mission accomplished" banner, OK? We've got a lot of work to do, and the president understands that, and we're working every day to increase small business lending, to make sure that we don't lay off teachers and firefighters that we know are essential in what we do every day.  But the president's going to lay out a choice:  Look back to where we came from
and look back to where--and look forward to where we're going.  And I think if by any definition of that, of that, you will see that we know what happened.  We know the policies that led us into a financial calamity, massive budget deficits, not paying for programs that this
government wanted to start, and a future-oriented growth agenda that this president instituted.  We've definitely had to make tough choices.

Like I said, it's understandable that people are frustrated given where we are in unemployment.  We lost eight and a half million jobs. There--it's going to take some time to fix.  But, David, we think if you look at where we were and where we are--you say that employment is flat. We've created 600,000 private sector jobs in the first six months.  We
were losing 700- to 800,000 jobs a month just a short time ago.  So there's no doubt that things are getting better.  The economic recovery is no doubt fragile.  The president and his team will continue to strengthen that.  And we've got a long, long way to go. But we think if
you take a look backwards and look forwards, there's no doubt that we're on the right path.

MR. GREGORY:  But, but how much of what happened over the previous eight years is something that's still legitimate to consider?  When do you really have to own what you've tried and what you've accomplished?

MR. GIBBS:  Oh, there's no doubt we, we, we have the responsibility for fixing the mess, right?  But as the president said, don't drive the car into the ditch, right?  Don't drive the car into the ditch and then now want the keys back, because we know how you drive, right?  We understand what got us there, OK?  The president has had to make a lot of tough
decisions.  The car's out of the ditch, the car's back on the road.  The question is, are you going to give the keys back to the Republicans and let them drive it back into the ditch again?

MR. GREGORY:  And yet you have Democrats attempting, it seems, to localize a lot of these races.  They're a little worried about running with the president in a midterm race.  The Wash--excuse me, The Wall Street Journal reported on Friday a little bit about that localizing
strategy.  I'm going to put it up on the screen.  "The effort [to shift voters' attention away from Washington] is designed to prevent Republicans from turning the fall elections into a national referendum on President Obama and Democratic leaders in Congress, whose popularity
among swing voters has  been in sharp decline over the last year. Instead, Democrats are trying to turn each race into a unique, one-on-one matchup between local candidates." And yet, here is a president who achieved health care reform, who's on the brink of achieving financial regulation.  Do you think it's an unwise strategy for Democrats to try to separate themselves from the president, from Democratic leaders in Washington?

MR. GIBBS:  Well, look, let's take financial recovery as something where, again, we can look backward and we can look forward.  John Boehner, who would be the speaker of the House if the Republicans were to take the House back over, last week equated the wreckage that was left as a result of the financial calamity to an ant, OK?  The president has made some
tough decisions that we have a financial reform bill, a Wall Street reform bill, that's--puts in place the strongest rules that we've had since the Great Depression, and almost uniformly you've got Republicans in the House that have said no.  I think that is a great issue both at a
national and a local level for people to go to their constituents and go to their voters and say, "Do you think that the rules that we had in place in September of 2008 that caused this financial calamity, we should have those rules in place?  Or should we put new tough rules of the road so the banks can't cause that again?"

MR. GREGORY:  But you're making--you're sort of making the case--you're making the case, but, but the issue at hand is you have a lot of Democrats who are saying, "Let me try to keep my distance from the national party and from the president." Is that unwise?

MR. GIBBS:  Well, no, look, a man far smarter than me said, "All politics is local." And having worked on a number of races, I think that's the truth.  But there's no doubt that there are obviously larger national issues, financial recovery being, certainly, one of them, whether it is
the investments that had to be made short-term that are creating jobs and had this economy moving in the right direction, positive growth for the first time, adding jobs in this economy vs. looking backward; or are we going to have a financial reform that puts--that solidifies for Wall
Street the rules that we had that caused this mess, or are we going to put rules in place that finally, finally, once and for all, put Main Street in the driver's seat, not at the whims of Wall Street?

MR. GREGORY:  Let me ask you a broader question that I posed in the open, and I think you should have an opportunity to respond to, which is, on a lot of the issues that you face right now from the oil spill to the economy, to the war in Afghanistan, is the president and his team falling short, or are we in a situation where expectations were set too high?

MR. GIBBS:  That's a good question.  Look, I think on either, either one of these things, the time frame on--look, the time frame on the war in Afghanistan, we've been in Afghanistan for almost 10 years.  The president has obviously added a number of new troops, both at the
beginning of 2009 and certainly last winter, and those troops are coming in.  But this is always going to take some time.  We knew it was going to take some time.  Sometimes the time for Afghanistan or the time for financial recovery may not perfectly line up with the 2010 elections, and we understand that people are frustrated. Everybody's frustrated.  Look,
the president is frustrated that we haven't seen greater recovery efforts.  But that doesn't stop us from doing what we know is right, instituting the policies that we know will bring this country back and put it on a pathway forward that lets our economy grow or creates
stronger security for our country.

MR. GREGORY:  A few, a few quick ones on the economy.  Will you let the Bush tax cuts expire, in effect creating a tax hike on Americans?

MR. GIBBS:  The president is not going to, at a time of economic crisis, raise taxes on the middle class.

MR. GREGORY:  So he will not let them expire for the middle class...

MR. GIBBS:  For the middle class.

MR. GREGORY:  ...but for wealthier Americans.

MR. GIBBS:  Well, for, for, for those that weren't asking for them when they got them and didn't necessarily either need or deserve them, they're not going to have their tax cuts extended.

MR. GREGORY:  So should--will Congress take this up before the fall elections?  Because they'd been suggesting that they would put it off.

MR. GIBBS:  Look, I don't know what Congress' schedule is.  I know what the president has in mind, and that is for middle class Americans who have borne the brunt of this economic calamity, we're certainly not going to raise taxes on them.

MR. GREGORY:  What about the capital gains tax?  Will the president like to see it stay at 20 percent?

MR. GIBBS:  Well, again, I think that's going to be part of the discussion that we have to have to make sure that in a fragile economic time we don't, we don't choke off any recovery.

MR. GREGORY:  The, the housing mess is still a mess.

MR. GIBBS:  Right.

MR. GREGORY:  The mortgage market is still in a lot of trouble.  And, as I mentioned, first-time home buyer sales fell off a third after the government stopped propping it up with the, the first-time--the tax credit.  Mortgage modification, a plan highly touted by this administration...

MR. GIBBS:  Right.

MR. GREGORY:  ...proved unsuccessful.  And the, the two largest former private companies and now quasi-government agencies, Fannie Mae and Freddie Mac, they guarantee 90 percent of the mortgages in this country.

MR. GIBBS:  Right.

MR. GREGORY:  They have yet to be reformed; and yet, the--one of the president's top economic advisers, Larry Summers, is one of the most vociferous critics of those two companies.

MR. GIBBS:  Right.

MR. GREGORY:  So where is the plan here to deal with what is still the heart of the financial crisis?

MR. GIBBS:  Well, let's understand that the mortgage modification program that you talked about has helped hundreds of thousands.  Understand in a, in a hard economy it is, it is difficult in, in any sense to create a program that helps somebody stay in their house if they're losing their job, right?  So we're working on both keeping people in their houses, again, those that should be in their houses.  There are, no doubt, David, people that got loans over the course of this economic boom that ended in bust that, quite frankly, shouldn't have gotten loans, right?  Those are not the people that the president wants to protect.  But those that are making their mortgage payments, that's what the president is working on.
When it relates to Fannie and Freddie, you hear this a lot from Republicans in Congress, there's no doubt that this is something that has to be reformed.  The secretary of the Treasury and our economic team are working on that.  That will be the next step in financial reform once we
get the legislation through Congress.

MR. GREGORY:  Mm-hmm.

MR. GIBBS:  But getting that legislation through Congress is a massively important step in that financial recovery, and you hear Republicans in Congress saying, "Well I can't be for that because it doesn't include Fannie and Freddie." Well, we're going to reform Fannie Mae and Freddie Mac.  As you said, we have a very volatile housing market and we have to
do that in the right way; but that's not an excuse to leave in place the rules that brought us this financial calamity.  And I think...

MR. GREGORY:  Right.

MR. GIBBS:  ...we're--Democrat and Republican candidates will be able to have a great debate about that in the fall.

MR. GREGORY:  But can you say that the president's focused like, like a laser beam on the economy if he hasn't really zeroed in on the housing problems? With, with the kind of--and you have, you have agencies that take on, guarantee 90 percent of the mortgage debt and you're still not reforming them.

MR. GIBBS:  Well, again, there's a process that's under way, David, to do that.  But understand, in a fragile economy and, certainly, as you mentioned, a fragile housing market, we can't do everything at the same time.  We put in place a financial recovery plan that is growing the economy and is adding jobs.  We're on the verge of passing financial reform, which will put new rules in place, and the next step of that will be reforming Fannie and Freddie.

MR. GREGORY:  Big story this week was the Russian spies swap.  A lot of Americans saying, "Wow, what a," you know, "what a thrilling story out of a spy novel itself." And it seemed like the priority here was U.S.-Russia relations.  But the question still outstanding is, what kind of threat does Russia pose with its espionage against the United States?

MR. GIBBS:  Well, let's step back for a second and understand that I think this is a great credit to our law enforcement.  We, we made arrests, the law enforcement community made arrests.  These individuals have been monitored for quite some time.  They tried, but they never got
classified information and intelligence, and now they've left the country, which, again, is a big win for our law enforcement community.  I set that aside.  I think our relationship with Russia is, is no doubt improving if you look at where it was just a few years ago.  The economic
discussions that President Medvedev and President Obama had just recently and the progress that we've made in reducing nuclear weapons--and hopefully we'll get a treaty through the Senate this summer that will further reduce nuclear weapons--means our security is stronger and safer and our relationship is stronger.

MR. GREGORY:  More broadly on foreign policy, I can remember back two years ago, as you certainly can, July of 2008, the president giving a major foreign policy speech in Berlin.  Still a candidate and yet really well received. This was, in effect, an attempt to show the world a new face of foreign policy that would happen under President Barack Obama. And yet, as the president tried to do a 180 from Bush foreign policy, you find how difficult it is.  The promise to close down the prison at Guantanamo Bay, yet it's still open.  The Afghanistan war is not scaled down, it's been escalated.  This administration has upheld the state secrets exemption in its pursuit of terrorists legally. It appears the worst-kept secret in Washington is that there appears to be abandoned plans to put Khalid Sheikh Mohammed in front of a civilian trial. Same
strategy for North Korea and Iran basically.

MR. GIBBS:  Well, hold on, let's...


MR. GIBBS:  I hate to interrupt, but let's understand this.  We have the toughest sanctions on North Korea that we've ever had as a result of unanimous U.N. Security Council resolution.

MR. GREGORY:  Same strategy.  Same strategy.

MR. GIBBS:  Same strategy...

MR. GREGORY:  Pursued by the Bush administration.

MR. GIBBS:  More important, better tactics.  We've got the strongest sanctions regime on Iran that has ever been in place.  And, David, go back...

MR. GREGORY:  Same strategy as the Bush administration.

MR. GIBBS:  But, but understand--let's go back to the Bush administration.


MR. GIBBS:  You brought this up.  I know the next panel's going to say I blamed this all on the Bush administration...

MR. GREGORY:  No, no, no.  But can I just finish?

MR. GIBBS:  But--let me...

MR. GREGORY:  The predicate here, which is, is it harder to do a reversal from Bush foreign policy than you originally thought?

MR. GIBBS:  No, because I think you've greatly oversimplified it.  It--if you ask Ed Gillespie, ask any of the folks that you had right now, if in September of 2008 or October of 2008 or November of 2008 whether China and Russia were going to come on board for strengthening sanctions against Iran.  The answer to that would be a flat no.  You wouldn't have gotten to the security council because you would have had at least two countries raise their hand to veto those.  This president has put together a coalition that includes Russia and China, that's actually strengthened our sanctions regime on South Korea***(as spoken).  We have
better relationships with virtually every country in the world as a result of the president's foreign policy outreach.  We're reducing nuclear weapons in this world that we know can cause the type of calamity, whether, whether they accidentally launch or whether they fell,
fell into the hands of a terrorist.  There's no doubt, David, that we have taken foreign policy in a different direction.  We have improved relationships with countries, but not just as a means to an ends.  That's actually making our country safer and more secure as a result.  I, I
think you created oversimplified sort of what the president is trying to do, because the things that he's instituted couldn't have been done in the last administration.

MR. GREGORY:  Right.  But those are all accurate issues?  I mean, I didn't misstate any of that, did I?

MR. GIBBS:  Well, I think I--I think you and I had a little interchange there on North Korea and Iran because, again, whether you go through the same strategy is not necessarily what is at case here, and that is we have built--and the president has taken a different strategy with Iran, right?  He said to the world, "I'm happy to discuss Iran with Iran if its--if it will come to the table and live up to its obligations." That's what brought the Chinese and the Russians to the table at the United Nations.  That's what showed the world that it wasn't, it wasn't anything that had to do with American or our allied aggression toward Iran, it was that Iran was hiding a secret nuclear weapons program.  And if Iran is unwilling to, in front of the world, discuss that, as the president invited them to do, then it becomes clear for everybody in the world that this is an Iranian secret nuclear weapons program.  That's why everybody's at the table, and that's what we have the strongest sanctions regime on Iran that we've ever had.

MR. GREGORY:  Two final points.  First of all, I want to get a prediction from you on, back on the political debate.  Is the House in jeopardy, the majority for the Democrats in the House, in jeopardy?

MR. GIBBS:  I think there's no doubt that there are a lot of seats that will be up, a lot of contested seats.  I think people are going to have a choice to make in the fall.  But I think there's no doubt there are enough seats in play that could cause Republicans to gain control.
There's no doubt about that. This will depend on strong campaigns by Democrats.  And again, I think we've got to take the issues to them.  You know, are--do you want to put in, in to the speakership of the House a guy who thinks that the, the financial calamity is, is tantamount to an ant?  The guy who's the ranking member of the Energy and Commerce Committee, Joe Barton, started his congressional testimony of the CEO of BP by apologizing, not to the people in the gulf, but to the CEO.  I think that's a perfect window, not into what people are thinking, but the way they would govern.  Joe Barton, John Boehner, those are the type of things you'll hear a lot, I think, from both the president and local candidates about what you'd get if the Republicans were to gain control.

MR. GREGORY:  Finally, perhaps an issue a little bit easier to pin you down on, and that would be another showdown, potentially, with LeBron James.  I don't know if you heard, but LeBron James is going to the Miami Heat.  He's leaving Cleveland.

MR. GIBBS:  I had not heard that.

MR. GREGORY:  Yeah, I know, a lot of people had missed that.  And when he spoke to ESPN on Thursday, this is what he said about the president's game, OK?  He said, "I think President Obama would hold his own" if they went one-on-one.  "I've seen him shoot the ball - he's a lefty, too.  You know, pretty much all lefties can shoot." Might we see a one-on-one
showdown at the White House, since, after all, James disappointed the president...

MR. GIBBS:  Yes, he did.

MR. GREGORY: not going to Chicago.

MR. GIBBS:  Yeah.  He disappointed the people in Ohio, he disappointed the people in Chicago.  Look, I, I can only imagine if the president had an opportunity to play against LeBron James, he would take it.  I don't know that we would make the game public or the outcome of the score
public because, let's just say, somebody who's 6'8", quite that size, starts with an advantage that is hard for the president to, to make up.

MR. GREGORY:  We can probably agree, as I think the world can agree, that we've spoken enough about LeBron James this week.

MR. GIBBS:  Amen.

MR. GREGORY:  Robert Gibbs, thank you very much.

MR. GIBBS:  Thank you, David.

MR. GREGORY:  Appreciate it.

Coming up next, Decision 2010, more on the key races and the key debates; the economy, energy, and national security.  Our roundtable weighs in on it all: MSNBC's Rachel Maddow, David Brooks of The New York Times, former Democratic Congressman Harold Ford Jr., and former chairman of the Republican National Committee, Ed Gillespie.  Plus, our MEET THE PRESS
MINUTE, a look inside the spy games of the Cold War era.  We'll be right back.


MR. GREGORY:  Coming up, the debates over economic stimulus, energy, and national security.  Our roundtable weighs in on the key issues in races for the fall campaign after this brief commercial break.


MR. DAVID GREGORY:  We're back now.  Joining us, chairman of the Republican State Leadership Committee and former chairman of the Republican National Committee, Ed Gillespie; chair of the Democratic Leadership Council, former Congressman Harold Ford Jr.; the host of
MSNBC's "The Rachel Maddow Show," Rachel herself; and New York Times columnist David Brooks.

Welcome back.  So much to talk to, and I want to start with politics.  I spent a good deal of time on that with Robert Gibbs.  The president's out there, as I said, it's, it's, it's October in July here.  And he made the case, made the distinction between Republicans and Democrats and the choice that the voters' face.  This is him on Thursday.

(Videotape, Thursday)

PRES. OBAMA:  They, they've got, you know, they've got that "no" philosophy, that "you're on your own" philosophy, the "status quo" philosophy, a philosophy that says, "Everything is politics, and we're just going to gun for the next election.  We don't care what it means for
the next generation." And they figure if they just keep on saying no, it'll work for them, they'll get more votes in November.

(End videotape)

MR. GREGORY:  David Brooks, how did the pitch work?

MR. DAVID BROOKS:  Yeah.  I'm, I'm a little dubious that that one's going to work.  I think the questions people always ask at elections like this is, "Are you better off?" And I'm not sure people feel better off.  A month ago, I thought people were feeling, "OK, we're coming out of this." Last month, real deterioration in the public mood.  And then the second question, which is unique to this moment, is people are upset China and India are passing us and that they may pass us by, and so they want to know, have we made life better for the next generation?  And I know--I've talked to a lot of candidates, Democrat and Republican, who are using the
phrase, "We're more in debt, and we've got nothing for it." And so that anger over the long-term future of the country underlines the short-term recession.

MR. GREGORY:  And, Rachel, as I pointed out to Robert Gibbs, the president is saying, "Look, judge me on my record." So, if that's the case, Sharron Angle, who is running against Harry Reid, the majority leader, out in Nevada, is doing just that.  This is a portion of the ad
that she's running now.

(Campaign ad)

MR. GREGORY:  Could she try using more ominous music?  That's the only thing I was going to think of.

MS. RACHEL MADDOW:  I was going to say.  And because there's no Sharron Angle in this ad...

MR. GREGORY:  Right.

MS. MADDOW: actually just looks like is a Web site for ominous music.

MR. GREGORY:  Right.  But, but there is a serious point there, which is what's the state of the economy?  It's bad.  In Nevada, particularly.

MS. MADDOW:  Yeah.

MR. GREGORY:  That's what the president's up against.

MS. MADDOW:  Well, sure.  And what the Republicans are trying to do is trying to make this a referendum on the, on the Democrats and on President Obama, on Harry Reid, on the people in power.  And what Democrats are trying to do is make this a choice.

Obviously, anybody who's unhappy about anything in the country, you would hope they would turn it into a vote against the party in power.  The Democrats have their work cut out for them.  Just keep talking about John Boehner, keep talking about Sharron Angle, not just as
the absence of Harry Reid, but as somebody who has a lot of very interesting policy positions of her own.

MR. GREGORY:  Well, that's right.

And, Ed Gillespie, how much of a liability are statements like a Sharron Angle's, talking about that BP fund as a slush fund, the compensation fund? Or gaffes by the current chairman of the Republican Party, how much of a liability is that?  You heard how Robert Gibbs and the president are using particular Republicans as that choice.

MR. ED GILLESPIE:  Right.  Their problem, David, is the more they're talking about distractions like that, the less they're talking about jobs and the economy and debt and spending, which is what people are focused on; and so they look political.  I thought it was interesting, the
president said, "Oh, they're all politics all the time." The president's all politics all the time. One of his biggest problems, I think, in his approval rating is he has lost the post-partisan attribute that was such a key to his electoral success when he ran for president because he's become a harsh partisan.  The fact is that we've got unemployment at 9.5 percent.  They said it wasn't going to go above 8 when they passed the stimulus.  We have a $1.4 trillion deficit.  We have $13 trillion in debt.  They've doubled it since coming in, and they're going to triple it in 10 years.  That's their problem.  And people are concerned about that, they're concerned about the economy.  And every time they're talking about Joe Barton or the RNC chairman or John Boehner, attacking those folks by name, they're not talking about the things that Americans want to talk about and hear about.

MR. GREGORY:  Mm-hmm.  Harold?

FMR. REP. HAROLD FORD JR.  (D-TN):  I think two things:  One, I was in the House when we were in the--Democrats were in the minority, and we often used the language "take back the majority." Most Americans didn't recall six, eight, 12--10, 12 years before they wanted a proactive, positive message. Democrats, we have to be careful of talking about the
past.  I think if we want to draw the juxtaposition between George Bush and Barack Obama, one of the great shortcomings of President Bush was that he seemed incredibly inflexible on issues confronting regular Americans, ordinary Americans, be it the economy or the war.  President Obama can't be inflexible as it comes--when it comes to the debt.  He has
a debt commission.  I hope they offer ideas before December.  If they have ideas around entitlement spending, how to cut it, he ought to embrace it.  Two, he ought to extend some of the tax rates, especially around capital gains and dividend taxes, for the simple, simple reason
that you don't want to spook investors or spook the markets anymore, which obviously will have a--an impact on job creation, which could increase unemployment if we don't do it the right way.  And finally, politics is politics.  There'll be a little back and forth, and I think
the American people expect some of that.  But the White House should be aware of one thing: jobs, jobs and jobs is the only number that's going to matter between now and November.

MR. GREGORY:  Well, and...

REP. FORD:  And if the American people don't feel like they're getting better, we're going to have--my party will have a real problem at the polls.

MS. MADDOW:  What if jobs equals some spending, though?  I mean, if this...

MR. GREGORY:  Right?

MS. MADDOW:  Right?  If there becomes this doctrinaire anti-spending thing going on right now, but if you...

REP. FORD:  But if you get the tax cuts, you might be able to win some new spending.  That's my whole point.  If you, if you, if you...

MR. GREGORY:  Right.  But let me, let me ask you.  Before--but more on the policy prescription...

REP. FORD:  I agree with you.

MR. GREGORY:  ...the point that E.J. Dionne brings up in a column for Monday about what the Democrats are facing is this:  "Democrats ...  face two very different challenges, and addressing one could make the other worse.  ... [I]ndependent voters are turning on them.  ...  But Democrats are also suffering from a lack of enthusiasm among their" core "supporters.  ...  The dilemma is that the arguments that might motivate partisans could further alienate the less-ideological independents."

MS. MADDOW:  Well, you end, you end up with the situation which again you're back to choice vs. referendum because Republicans, like great strategists like Mr. Gillespie, can argue about how it's all about spending, it's all about debt.  But it's not just talking about the past
to say, "When Republicans have had the reins, this is what they've done: two wars not paid for, prescription drug benefit not paid for, two tax cuts that mostly benefited the rich not paid for." They put all that stuff on the deficit, $1.3 trillion sitting there as--in a deficit when
Obama took over, after the previous Democratic president had handed him a surplus.  If you talk about--if Republicans want to run as this fiscally responsible party, it's neat, but it's novel.  It's not how they've actually governed.

MR. GREGORY:  And, David, you know, more on that argument, though.  I spoke to senior Republicans this week in the party who said, "Look, sometimes we are afraid that we do take the majority back because are we, as Republicans, in a position to offer a policy for how to grow the economy, to offer real policies to create jobs?" There's a lot of fear out there that, in fact, they don't have great alternatives at the moment to be able to do that.

MR. BROOKS:  Yeah, I, I actually agree with that.  I'm a little scared myself.  You know, you look at what happened in Britain, the Conservative party took over after a long period out of power.  They, they have a real austerity program.  They're really cutting spending, putting the country, which was much worse debt shape than us, on a long-term path to some sort
of fiscal sanity.  I'm not sure the Republicans are ready there, so I'm a little nervous about that.  But the question people are going to ask us is, "What did President Obama offer, and are we satisfied with that?" And they're not getting there.  And to me the big picture is that if Harry Hopkins, the great liberal from FDR's administration, came back and said, "I'm going to create a perfect liberal moment.  We're going to have a big financial crisis caused by Wall Street, sort of; we're going to have the biggest natural disaster in American history caused by an oil company; we're going to have a very talented Democratic president; we're going to
give him some money to spend to create a lot of programs." And after all that, it's still not a liberal moment, it's a conservative moment, that makes me think liberalism isn't quite going to sell in this country at any moment.  If it's not selling now, it'll never sell. And I think...

MR. GREGORY:  But doesn't that assume that this is a conservative moment? Do you assume that?

MR. GILLESPIE:  Oh, I think, I think there's a great opportunity for conservative policies, and I think the public is open to hearing from us on that.  And I just disagree with David.  Look, in New Jersey and Virginia, we have two Republican governors just been elected, one in a
purple state, Virginia, one in a deep blue state, or at least royal blue, New Jersey, who are acting on what they said they would do, they're governing as they campaigned.  In New Jersey, Governor Christie is trying to change the tailspin, turn things around in New Jersey, taking on the government employee unions there.  In Virginia, Bob McDonnell as governor
eliminated a $4.2 billion deficit, the largest in the history of the Commonwealth of Virginia. We will govern as we said we would.  And I think, you know, Harold just pointed to these rising capital gains taxes and dividend taxes.  You can call them tax increases on the, on the
wealthy.  I think most will say it's tax increases on investment at a time when we need to be creating jobs.  They're going to kick in January 1, 2011.  The first thing Republicans will do is say, "No.  We're going to keep them in place for a while until we can get the economy growing
again." And I think most Americans reject the notion that spending equals jobs.  They think spending equals temporary government jobs.

MS. MADDOW:  I think that, I think that most Americans also, though, understand the basic arithmetic that when you're talking about pushing tax cuts that do mostly benefit the wealthy and you're simultaneously talking about getting tough on the deficit, you're talking about a world in which math doesn't work the way most people think it works.  If you're going to talk about tax cuts--I mean, Harold, you, as a Democrat, proposed some very significant tax cuts when you were thinking about running for Senate in, in New York, a huge corporate tax cut, a big payroll tax holiday, and then said simultaneously, "And we got to get serious about the deficit."

REP. FORD:  Well, Rachel, in all fairness, the payroll tax...

MS. MADDOW:  Tax cuts hurt the deficit.

REP. FORD:  Right.  But the payroll tax cut--in order to, in order to pay down the debt, you got to do two things.  You got to get your spending in order and you got to grow.  When Bill Clinton was in office, the real advantage we had was that the economy grew.  They made--they took--they made some tough choices around spending.  I was in Congress for a good
part of that.  But at the same time, we had this IT explosion and growth in the country, which created millions of jobs.  My only point is, if you cut the payroll tax for small businesses, you keep money in those communities.  If you really want a stimulus, cut the payroll tax at a
hardware store, cut the payroll tax at a sundry, cut the payroll tax at a...

MS. MADDOW:  If you really want, if you really want a stimulus, do what we--what's proven to work in stimulus, which is things like extending unemployment benefits, which is something that Republicans are completely blocking.

REP. FORD:  Which I...

MR. GREGORY:  But let me, let me...

MS. MADDOW:  It's the most stimulative thing you can do.

MR. GREGORY:  All right, but I want to pose a question to David, and then Ed.

REP. FORD:  We have to figure out how to grow the economy.  All right.

MR. GREGORY:  But the question for you, David, you wrote about this this week, what do you do now when there is a debate about rein in spending, deal with the deficit in a serious way--the president says he'll do that over the next couple of years--and the, the additional need for stimulus? Look at what's happening around the country in state budgets and the
cutbacks, a debt of over $400 billion.  You got Governor Paterson in New York saying--conditions around the country are going to look like a depression.  I mean, in my home state where I'm from in California, the cutbacks to social services are, are, are draconian.  What do you do right now in this economic climate?

MR. BROOKS:  First, you don't think we can fiddle with the economy with fiscal policy.  You don't think we can fine tune fiscal policy to create recessions.  So you don't--I don't think you spend--we've got at one point $5 trillion in debt now.  I don't think you spend any more than
that.  On the other hand, I don't think you cut right now at this moment. I think there are some moderate things you can do that are sensible.  One, extend unemployment insurance.  That's an insane way to start a budget debate.  A lot of people are unemployed, give them the money to survive for another few months.  The second thing, we don't need state
budgets to be contracting at this moment. So what you want to do, you want to tell the states, "If you give us a long-range plan for fiscal sanity," which is being done in New Jersey and other places, "then we'll give you some money right now." And that would be a sensible thing to be done.  But it's not going to happen because the political culture in Washington is sick.  And even the--extending unemployment insurance, we had a total gridlock on that because neither party was willing to give anything.  And so these are sensible things that could be done in an ideal world.  Will they be done in this world?  Not likely.

MR. GREGORY:  Ed, your point.

MR. GILLESPIE:  Well, my point was, I want to go back to the math because the fact is, under the Bush tax cuts, we did have 52 months of--in uninterrupted job creation, longest in the history of the country, and revenues were at an all-time high in 2007.  The problem wasn't lack
of revenue, the problem still remains today too much federal spending, and this administration's not addressing that.  And the other problem they have is, in terms of the economy, if you're an employer, well, how are you going to hire right now when you don't know what the impact on
you of this healthcare mandate is going to be and the costs on your premiums?  How are you going to hire if you're not sure whether or not there's going to be an increased cost of energy because of a carbon tax or a cap and trade bill?  How are you going to hire when you don't know if you're going to be able to have your carried interest financing, if you're a small business owner?  How are you going to invest, if you're an investor, when you think your capital gains taxes are going to go up, your dividends are going to go up, and if you're a small business owner, you're going to get hit with a tax increase, too?  No wonder the economy
is stagnant.

MR. GREGORY:  Harold, in the middle of this economic debate, I still come back to the political question, which is, what is it that the Democrats are going to run on?  You do have health care, it's been passed.  Whether it's the right thing, that'll be the subject for the debate and we'll see what happens. Financial regulation appears like it's going to be passed.
This is not 1994 for the Democrats.  It's not chaos theory where Republicans can say nothing gets done.  And yet, Peggy Noonan writes in her column this weekend the following, "The president, of course, got his victory on health care.  But a funny thing is, normally the press and the public judge a president's effectiveness in large part by legislative victories - whether he has `the ability to get his program through Congress.' Winning brings winning, which increases popularity.  Mr. Obama won on more than health care; he won on stimulus," on "the Detroit bailout.  And yet his poll numbers continue to float downward.  He is not more loved with victory.  To an unusual and maybe unprecedented degree his victories seem like victories for him, and for his party, and for his agenda, but they haven't settled in as broad triumphs that illustrate power and competence."

REP. FORD:  Because--largely because people don't see job numbers and the economy improving for middle class people, for small business owners. Again, Republicans can't--aren't totally off the hook.  Rachel is right. We--I was there when the Medicare prescription drug bill passed.  That's the largest entitlement that we've passed since--with the introduction of Medicare.  The fact is the tax cuts, these things were not paid for, the war was not paid for.  However, when you become president, you can't argue all the time that the last guy before you created all the problems and he deserves no credit. TARP was a George Bush idea.  The Detroit bailout was a part of a, a Bush idea.  The reality is people are going to
look at today.  The way you get more spending, you've got to make some concessions, I believe, on deficit spending. You got to make some concessions to the business community, who, at the end of the day, without the private--without the, the private markets and the private sector, are growing--we're not going to create enough jobs, not only to grow or to get us out of the mess we're in, but to keep up with population growth. So I think you need a balance.  Cut some deficit spending for the future. What they did in New Jersey--I voted for Jon Corzine, I might add--but what they did--was for him, rather.  I don't live in Jersey.  But what Christie has done has said, "I will protect teachers if teachers are willing to pay more for their health care, going forward, to reduce the debt." You got to have some of those concessions. I disagree with David on one thing.  I think there's a climate here in
Washington for that.  If Democrats, including Blue Dogs and CBC members and Hispanic Caucus members, are willing to come together with some Republicans, I think you can find a spending bill, a tax cut bill and one that makes some tough choices going forward on deficit spending.

MR. GREGORY:  I want to, I want to get in here because we obviously continue this with our main time, but I want to talk a bit about the war in Afghanistan, which is such an important focus now.  It's been an important focus on, on this program and others.

Including yours, Rachel, because you're just back from Afghanistan.  And it was very interesting as you went there.  You, you went to Afghanistan to pose two questions, you said:  Does it make sense that the American military is still there?  What does this ongoing war mean for our fighting men and women who are there?  We have a clip from your program,
your interview with Brigadier General Ben Hodges.  He is the head of regional southern command, and you pose a very important question to him. Let's watch.

(Videotape, Tuesday)

MS. MADDOW:  I know this is a, a difficult question, but if, over the next year, it doesn't, essentially doesn't work to establish better governments in Kandahar, if the police efforts, the policing efforts, security efforts, don't combine to create enough space for Afghan
government to step up in a way that is working, I don't get the sense that there's a plan B.  Is there a plan B? Or is plan B just more time? Is...

BRIG.  GEN. BEN HODGES:  There's no reason why this shouldn't be successful if the Afghans do their part.

MS. MADDOW:  Yeah.

BRIG.  GEN. HODGES:  I mean, we have--I, I've never met an officer that didn't want more capability, so I would never turn away more engineers or more military police.  But we have enough to do what we have got to do in Kandahar, assuming that the Afghans step up and do their part.

MS. MADDOW:  If they don't?

BRIG.  GEN. HODGES:  Well now, we will have, we will have given them the best chance they've ever had.

(End videotape)

MR. GREGORY:  There was a corollary to that in another clip with our chief foreign correspondent, Richard Engel, where you were walking around Kabul and talking about the massive influx of U.S. dollars, primarily, into that country.  Let's show that.

(Videotape, Wednesday)

MR. RICHARD ENGEL:  It can breed corruption, just having so much money injected into an economy.  Afghanistan is very poor, and it was isolated from the world--except for the last 30 years of war, which was an unpleasant interaction with the world--for hundreds of years.  And now you have a, a totally different scale of economy coming in, billions of dollars a month. This country never saw anything like that.

MS. MADDOW:  But it's going to people who aren't--it's, it's not going to build the country, it's going to people who have private armies.  It's going to people who are--right?

MR. ENGEL:  Well, next to giant houses, these streets are not even paved.

MS. MADDOW:  Yeah.

MR. ENGEL:  I think that gives you an idea of how much these social
services are spreading.

MS. MADDOW:  Right.  You can see, though, why the elites don't want the U.S. to leave, why they don't want the war to end.  The elites are doing awesome out of this war.

MR. ENGEL:  They're making a lot of money.

(End videotape)

MR. GREGORY:  So you've come back.  What did you conclude about our
efforts there?

MS. MADDOW:  The, the most--the thing that I felt most strongly was how humbling it is to be there alongside U.S. troops that are doing such unbelievably difficult work and who are such professionals.  Honestly, not to be sappy, but that's the first thing.  The other thing is that the
point of what we're doing there is trying to establish an Afghan government, an Afghan state that is hardened against terrorism so there isn't another 9/11 that comes out of there.  And we are spending $5 and one-half and one-half billion a month there, and that does go into the pockets of a lot of warlords and bullies.  That actually strengthens the Taliban's case against the Afghan government.  So there's a cost to us staying.  And the--what's happening right now with the Afghan government standing up in terms of security and services and the other things they're doing is because they are expecting us to leave, and that deadline looms very
large, not over the fighting with the Taliban, but over the Afghan government standing up.  And it's important that they know we're going to go.

MR. GREGORY:  And it's interesting, David Brooks.  I mean, finding the ideological fault lines here are difficult between left and right, frankly.  I mean, you had Senator McCain make the point that a timeline for withdrawal, which the president has committed to, which is a
beginning of withdrawal, a year from now, is forcing, in many ways, Karzai to make all these side bets, because, again, the Afghans have a long memory.  The U.S. has cut and run before.  They don't think the U.S. is in it for the long haul, so they're making other moves.

MR. BROOKS:  Yeah.  I thought he was too politically cute to set that guideline in any form and his administration's divided on how firm that guideline--that deadline is.  I thought he just said, "We'll do it till we succeed." That's what General Mattis believes, that's what General
Petraeus believes.  But the question Rachel asks is the right question. And, frankly, I don't know the answer because whether the Afghans picked up--and we're giving a lot of money to warlords, but we're also giving through--things through the National Solidarity Program to the villages, and they have real social structures.  Nonetheless, when you talk to the
people who are there, there's some disappointment that there hasn't been more progress made on the village-by-village basis to create social structures to ward off the Taliban. In a year, we really do have to look at this again.  Maybe it's just not working.  And even people like me,
who are strong supporters, have to face the reality it's been disappointing.

MR. GREGORY:  Ed, Ed, Ed...

MS. MADDOW:  If they think it's indefinite, it'll never happen.

MR. GREGORY:  Well, Ed, you were counsel to the president, President Bush, and President Bush told people before he left office, as difficult as Iraq was, Afghanistan will be that much harder.  Is it reasonable for any president to say we can fight this but only unto--until a certain point?

MR. GILLESPIE:  Well, I think you end up undermining, you know, when you do that, and this is the two--there are obviously clearly two different perspectives here.  You can say, "Oh, if we don't say there's a hard deadline, they'll never get their act together"; and I would say if you
put a hard deadline, then the bad guys are going to wait this out and, and the folks are--who are--you're hoping to assume power, responsibility are going to be afraid to make the tough decisions that they have to make.  That's the--that is the debate right now.  I would like to see the president actually be more firm in saying we're going to stay and get the job done the same way we did in Iraq.  It worked in Iraq.  I think it would work in Afghanistan.  It would be much, much harder.

MR. GREGORY:  All right.  I got...

MS. MADDOW:  We set, we set a deadline for leaving Iraq.  Bush did.

MR. GREGORY:  We got, we got to leave it there.  Thank you all very much.

Up next, our MEET THE PRESS MINUTE. This week, one of the largest spy swaps between the U.S. and Russia since the Cold War.  We're going to take a look back at the spy games of that era and hear the confessions of one Soviet operative involved in one of the most notorious espionage cases ever on U.S. soil, after this brief station break.


MR. DAVID GREGORY:  And we're back with our MEET THE PRESS MINUTE. Nearly two decades after the end of the Cold War, a spy swap between the U.S. and Russia this week.  Ten Russian sleeper spies arrested last month in the U.S. are traded for four Russians accused of illegal contact with the West. Fifty-seven years ago, former Soviet spy Elizabeth Bentley
appeared right here on MEET THE PRESS and talked about Soviet espionage and her decision to break with the Communists.

(Videotape, December 6, 1953)

Announcer:  Our guest on MEET THE PRESS, ladies and gentlemen, is Ms. Elizabeth Bentley, former Soviet spy.

MR. LAWRENCE E. SPIVAK:  Can you explain how you got away with so much for so long, and how others got away with it so long?  Were you fellows so clever, or were we so dumb?

MS. ELIZABETH BENTLEY:  Well, I would say it was a combination of the two. For one thing, Russia was considered our ally and presumably the intelligence people were concentrating on the Germans.  For another thing, I don't think Americans in general knew too much about Communist espionage methods.  They simply didn't expect that sort of thing.  And
for another thing, the Communists worked very hard and took a lot of precautions to keep these things secret.

MR. ROBERT RIGGS:  When you went to the FBI in 1945 you said cold, I believe. What was your reception?  Were they surprised to see you?  Did they--were they credulous?  Were they incredulous?  Were they--did they doubt your word, or did they accept you as a bonafide spy?

MS. BENTLEY:  Well, at first I couldn't tell whether they believed or disbelieved because they were extremely courteous, but noncommittal.  But later I was told, about a month, I think, after it was--I'd told them my story, one of them told me that they had been checking frantically and that they were amazed at the accuracy of it.

MR. RIGGS:  Did they indicate they'd had no knowledge of your work before? Was it all brand new to them, do, do you think?

MS. BENTLEY:  Well, now they wouldn't have been likely to tell me that.

MR. RIGGS:  You could tell by the expression on their face, couldn't you?

MS. BENTLEY:  No, because the FBI are good, trained intelligence agents, and they keep poker faces.

(End videotape)

MR. GREGORY:  Three years after her defection, Bentley, who became known as the "Red Spy Queen," testified before Congress and gave evidence of widespread Soviet espionage in the United States during World War II. The Russian spies sent home this week appear to have uncovered little of value during their time in the U.S.  And we'll be right back.


MR. DAVID GREGORY:  One note before we go, we'll have  more with Rachel Maddow about her reporting trip to Afghanistan in our TAKE TWO Web extra. It'll be up on our Web site this afternoon.  That is all for today.  We'll be back next week.  If it's Sunday, it's MEET THE PRESS.