IE 11 is not supported. For an optimal experience visit our site on another browser.

Meet the Press transcript for May 29, 2011

Transcript of the May 29 broadcast featuring Mitch McConnell, Chuck Schumer, Harold Ford, Jr., Alex Castellanos and Ruth Marcus

MR. DAVID GREGORY:  This Sunday, is Medicare the new third rail of American politics?  Why the fight over the future of an entitlement for 47 million older Americans has become the key battle for 2012, tipping the balance in a closely watched special House race this week in upstate New York and emerging as a key sticking point in the budget battle as Republicans and Democrats go to the wire over the debt ceiling.


SEN. MITCH McCONNELL (R-KY):  According to Senator Schumer, their focus is on an election that's still almost two years away.  Well, my suggestion is that Democrats start thinking about putting their names on something other than an attack ad.  They could start with a budget.  How about that?

(End videotape)

MR. GREGORY: What does it all say about Washington's ability to tackle the hard problems? This morning, two key voices in the debate: the Republican leader of the Senate, Mitch McConnell of Kentucky, and Democratic senator from New York, chairman of the Democratic Policy Committee, Chuck Schumer. Then, our political roundtable on the race for the White House. New signs Sarah Palin is ready to run. Is she really in it, or simply sending a message? Is she headed for a showdown with tea party favorite Michele Bachmann in Iowa? And what impact would she have on establishment candidates like Pawlenty and Romney? Is Jon Hunstman a front-runner or a nonstarter? Plus, the president spends the week on the world stage and now comes home to devastation in Missouri, where he visits the tornado-ravaged town of Joplin today. With us, former Democratic congressman from Tennessee Harold Ford Jr., Republican strategist Alex Castellanos, columnist for The Washington Post Ruth Marcus, and columnist for The New York Times David Brooks.

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

MR. GREGORY: Good morning.

MR. DAVID GREGORY: The president returned last night from his six-day European trip and leaves the White House again this morning to travel to tornado-ravaged Joplin, Missouri, where he will visit with survivors and family members of that terrible storm. It hit a week ago and has left devastation all throughout the area; more than 120 people dead, more than 100 still missing. Here in Washington, meantime, no break this Memorial Day weekend from the intense debate over the budget, overhauling Medicare, and the upcoming vote on increasing the debt ceiling. All of this, of course, as the fast approaching 2012 presidential election year makes the climate in Congress even more contentious. Here this morning to tackle those issues and more, two key Senate leaders from each side of the aisle: the Republican leader, Mitch McConnell of Kentucky; and from the other side of the aisle, the senior senator from New York, Chuck Schumer. We will begin here in the studio with the leader of the Republicans in the Senate. Senator McConnell, welcome back to MEET THE PRESS.

SEN. McCONNELL: Good morning.

MR. GREGORY: I want to show you the scene from upstate New York, that special House selection. Kathy Hochul prevailed. And this is the scene which she won. The chant was "Medicare, Medicare." This was a key issue based on how the Republicans are trying to overhaul Medicare. And the question is this, has this become the new third rail of American politics, touch it and you get burned?

SEN. McCONNELL: Well, look, you know, we have had a regularly scheduled election in our country every two years since 1788 right on time. We're about a year and a half ahead of the next one. And at critical points throughout our history when we've really had to step up to the plate and tackle big issues, we've done it in spite of the fact that in America there's always an election coming up. Where are we? Well, we know that the co-chairman of the president's deficit reduction commission, Erskine Bowles, said that this is the most predictable crisis heading our way, that's our debt and deficit, the most predictable crisis in American history. We know the chairman of the Joint Chiefs of Staff, when asked what was the biggest national security threat to the United States, said the debt and deficit was our biggest threat. It's time to act, David, regardless of the election a year and a half from now. And, you know, the president, to his credit, is at the table through the discussions with the vice president and members of the House and Senate over the issue that is confronting our country. Look, Standard & Poors recently sent us a warning signal they're about to downgrade the credit rating of the United States. We have a $14 trillion deficit--debt the size of our economy, which makes us look like Greece; and, by the way, $50 trillion-plus in unfunded liabilities and popular entitlement programs.

MR. GREGORY: The problem is huge, and the entitlement program...


MR. GREGORY: really the heart of it. But I ask the same question, which is, is Medicare the third rail? Look, you said, reportedly, to the speaker of the House John Boehner, "I wouldn't push this Ryan proposal because politically it's going to hurt the party." SEN. McCONNELL: Well, I don't know where that quote came from. But the point is, what are we going to do about the problem? We, we know that--what--let's--oh, you want to talk about Medicare? The president says Medicare needs to be on the table, the vice president says Medicare needs to be on the table. Steny Hoyer, the number two Democrat in the House, says Medicare needs to be on the table. It is on the table in the discussions related to the debt ceiling. So...

MR. GREGORY: But not in its current form. If it passes...

SEN. McCONNELL: Well, look, we're...

MR. GREGORY: part of the debt ceiling vote...

SEN. McCONNELL: The Democrats...

MR. GREGORY:'s got to be different, does it not, than the Ryan plan?

SEN. McCONNELL: As you pointed out from my comments in the lead-in, the Democrats have no plan at all. We had, we had four votes in the Senate this week...

MR. GREGORY: Fair enough. But, leader, my question is if there's going to be a deal on the debt ceiling on Medicare reform...


MR. GREGORY: ...would you concede it's got to look a lot different than the Ryan plan?

SEN. McCONNELL: No! I--it's on the table. We're going to discuss what ought to be done. Everybody agrees something ought to be done, except the Democrats in the Senate, who have no plan at all.

MR. GREGORY: But you're not even...

SEN. McCONNELL: We had four...

MR. GREGORY: haven't even said publicly whether you're for the Ryan plan. So you're not behind that version of Medicare reform.

SEN. McCONNELL: I voted for the--I, I voted for the Ryan budget this week.

MR. GREGORY: You didn't whip up your colleagues, though. You didn't try to get additional support.

SEN. McCONNELL: Well, we, we had, we had competing versions in the Senate. Senator Toomey, a Republican senator in the Senate, had a plan. Senator Paul had a plan. The only people who didn't vote for any plan at all--we--by the way, we had a vote on the president's budget, didn't get a single solitary vote. Not a single Democratic senator voted for the president's budget.

MR. GREGORY: Fair--but do you support Ryan's reforms?

SEN. McCONNELL: And the guy, the guy that you're going to have on after me thinks that all we're doing right now is positioning for the 2012 election. What about the country? What about the next generation, not the next election?

MR. GREGORY: I'm just trying to understand where you are particularly on how to change Medicare so...

SEN. McCONNELL: Well, let me tell you.

MR. GREGORY: You're not--you don't believe that the Ryan plan is the basis of where you're going get agreement.

SEN. McCONNELL: I, I voted for the Ryan budget this week.

MR. GREGORY: But do you believe it's really the big--because it failed.

SEN. McCONNELL: What I'm not going to do...

MR. GREGORY: It's not going anywhere.

SEN. McCONNELL: negotiate the deal with you, David, with all due respect. The president of the United States, the only person in America who can sign a bill into law, is at the table through the vice president, and we are discussing a package that will begin to deal with deficit and debt in connection...

MR. GREGORY: But, leader, I'm not asking you to negotiate. I'm just asking you to help in the interest of what I assume you want, which is building some kind of political consensus around reform. Having a discussion publicly on television like this and saying, what are the contours of that that could actually get some Democratic support?

SEN. McCONNELL: Well, this is not the place to do that. The place to do it is in the discussions with the one individual out of 307 million Americans who can sign a bill into law. And those discussions are under way, and I can assure you, David, that to get my vote to raise the debt ceiling, for whatever that's worth, my one vote, Medicare will be a part of it. The details of that are yet to be negotiated with the guy who can sign something into law.

MR. GREGORY: But do you have to keep the basis of the Medicare program in place? Is that your view? Because that's not what Ryan is proposing. And then you could do other things.

SEN. McCONNELL: And no matter how many times you ask me to, to kind of craft what the Medicare fix should be like, I'm not going to give that answer to you today because that's a subject to be negotiated with the president of the United States.

MR. GREGORY: But do you understand that the currents here in the Republican Party--when Newt Gingrich was on this program and called Ryan's plan right-wing social engineering, conservatives flocked to his aid and said, "No, no, the Ryan plan is a litmus test for conservatives in America." What you're saying is not that. You voted for it, but you didn't rally your colleagues behind it and it failed. So there seems to be a split in the party about what it is should constitute actual reform.

SEN. McCONNELL: Actually, there's very little split in the party at all. We all know Medicare's going to change. It's got to change. David, the trustees of Medicare and Social Security, who are appointed by the president of the United States, that includes some members of his own Cabinet, just said a couple of weeks ago that Medicare's going broke. The one thing we know we can't do is nothing. And our Democratic friends in the Senate have no plan at all. The president, to his credit, is at the table discussing with us the way in which you save Medicare. Medicare is going down. Doing nothing is not a plan. And we're going to negotiate the contours of the plan in these negotiations. I'm personally very comfortable with the way Paul Ryan would structure it in the out years. But we have a Democratic president. We're going to have to negotiate with him on the terms of changing Medicare so we can save Medicare.

MR. GREGORY: Are you confident that the debt ceiling will ultimately be raised?

SEN. McCONNELL: I'm confident that unless we do something really significant about debt and deficit, it's not going to be raised. It's not going to get my vote unless we deal with the problem raised by the request of the president to raise the debt ceiling. In other words...

MR. GREGORY: Does Medicare--is it...

SEN. McCONNELL: This is, this is an opportunity.


SEN. McCONNELL: You know, rather than play scare tactics about what if and, you know, what if you do this or what if you do that, the point is use this opportunity to come together on a bipartisan basis like Ronald Reagan and Tip O'Neill did in 1983 to save Social Security for another generation. They came together, made an important adjustment--and, by the way, the--you know, all this talk about next year's election, after participating in raising the age limit for Social Security, Reagan the next year carried 49 out of 50 states. Anything we agree to do together, David, will not be an issue in next year's election. But this is about the future of the country.


SEN. McCONNELL: Not about the election a year and a half from now.

MR. GREGORY: Let's ask about taxes. This is an area where Democrats and Republicans do not see eye to eye.


MR. GREGORY: And Republicans have been adamant that there aren't going to be any tax hikes as part of a global deal, a broad deal to bring the, the, the deficit down and to bring the, the budget into balance. Former President Clinton spoke this week about this issue, and suggested that that Republican hard-line seems to defy the, the course of history. This is what he said.

(Videotape, Wednesday)

FMR. PRES. BILL CLINTON: The, the idea that the lower the tax rates are, the better everything'll be has been debunked now for 30 years both in positive terms when I was president, and in negative terms by quadrupling the debt once and then doubling it again. So, I mean, how many times do we have to see this movie before we know how it ends?

(End videotape)

MR. GREGORY: Response?

SEN. McCONNELL: Well, you know, in that same appearance he also said that Medicare should be a part of the discussion and the Democrats should face up to it, as the president and vice president have.

MR. GREGORY: Yes, he did. But I'm asking you to respond to this piece.

SEN. McCONNELL: Yeah, look, you know, we just have a fundamental difference of opinion. If there's any issue which clearly divides Republicans and Democrats, it's taxes. We think we have this problem because we spend too much, not because we tax too little. And you've heard us have this debate over the years, we're going to have it again next year in the course of the election because the president wants the rates to go up again next year. We've got a two-year extension of current tax rates right now. I think we can stipulate this is an issue upon which there is deep-seated difference of opinion.

MR. GREGORY: But--so here's, here's the issue that I, that I keep coming back to, which is aren't you Republican leaders guilty of the same thing that you accuse the president of on health care, which is not doing enough to build actual political consensus around these issues? If you're not going to give anything up on taxes but you want to bring the deficit down, you say, no, these are iron-clad principles. I mean, that's where the--you said the president was on health care. How do we, how do we tackle real problems?

SEN. McCONNELL: But that's not where they are on, on the issue we were talking about earlier in the program. You've got the president, the vice president, President Clinton, Steny Hoyer all saying that Medicare has to change. So they're--that's not something we don't agree on. We're going to, we're going to discuss...

MR. GREGORY: That's a long way from changing the Medicare program the way Paul Ryan wants to.

SEN. McCONNELL: Well, we're going to discuss how to do it. But what we're saying on taxes is it isn't necessary. I mean, we don't have this problem because we tax too little.

MR. GREGORY: Can I ask you two quick ones? Elizabeth Warren, who is supposed to head up this consumer bureau...


MR. GREGORY: ...the president's appointment to do that, would you back her, or would you join Republicans who--to block her nomination?

SEN. McCONNELL: Well, we're pretty unenthusiastic about the possibility of Elizabeth Warren. We're pretty unenthusiastic, frankly, about this new agency, and we've sent a letter to the president saying that some changes need to made--be made in the CFPB, the Consumer Financial Protection Board, because as it's currently constituted, it answers to no one and, I think, could be a serious threat to our financial system.

MR. GREGORY: And what about politics? You have said that the big goal of the Republicans is to make this president a one-term president.

SEN. McCONNELL: Of course.

MR. GREGORY: Yet 22 percent of those polled indicate they've got no preference for any Republican running. Is not having a clear nominee a good thing, a bad thing or a normal thing?

SEN. McCONNELL: You know what I'm reminded of in--how the Jimmy Carter White House was thinking in '79 and '80, they were pulling for Ronald Reagan. They thought he was too extreme and too old. And surely if he was the nominee, they'd be just fine. Somebody's going to get on a winning streak here on our side. And when you start winning, people start paying attention. This is going to be an extremely competitive contest for the president next year.

MR. GREGORY: And what impact will Sarah Palin have if she becomes a nominee?

SEN. McCONNELL: She'll go out there and compete like all the rest of them. It's going to be fun to watch.

MR. GREGORY: Maybe I'll just go back to asking you about Medicare. Senator, thank you very much.

SEN. McCONNELL: Thank you.

MR. GREGORY: We now turn to the chairman of the Democratic Policy Committee, the senior senator from New York, Senator Schumer. Welcome back to MEET THE PRESS.

SEN. CHUCK SCHUMER (D-NY): Hi. Glad to be on.

MR. GREGORY: Senator, let's get back to this issue of Medicare and the question that I asked Leader McConnell, is this the new third rail of American politics, you simply can't touch it? Is that the legacy of this race in upstate New York?

SEN. SCHUMER: Well, you can try to end it--excuse me--and that's what they're trying to do in the Ryan budget. You heard Senator McConnell, he says even after the election in the 26th he's comfortable with the Ryan budget. You see The Wall Street Journal writing no retreat on Medicare. Newt Gingrich gets attacked because he says the Ryan plan is wrong. Look, the only way we're going to come to an agreement on the budget and the debt ceiling is if Senator McConnell and his Republican colleagues take the Ryan plan off the table, and take it off now. It is wrong...

MR. GREGORY: But it is off--but, Senator, it is off the table. It failed in the Senate. Look, you, you've got a reality here as Democrats where your hometown newspaper The New York Times this morning talks about the high price of timidity of the Democrats on Medicare. And here was, as Senator McConnell referred to, former President Clinton speaking about the deficit and Medicare this week. He, he had a warning for Democrats, and this is what he said.

(Videotape, Wednesday)

PRES. CLINTON: And I'm afraid that the Democrats will draw the conclusion that, because Congressman Ryan's proposal I think is not the best one, that we shouldn't do anything. And I completely disagree with that.

(End videotape)

SEN. SCHUMER: And, and I agree with President Clinton. Every Democrat--from the president, Steny Hoyer, President Clinton, Senate Democrats--we agree that Ryan should be taken off the table, that it's a complete stumbling block. And is--and I am calling on--we are calling on Senator McConnell not to cling to the Ryan plan as he's doing, which ends Medicare as we know it, but to take it off the table. Now, what do we propose? We have been proposing changes in Medicare for a while, but we believe in preserving the current system. Medicare delivers a very good product. Most people are very happy with the health care they get. It's just an inefficient system. And there are ways that you can change the way Medicare delivers things without cutting the benefits to individuals, and still save hundreds of billions of dollars. Anyone who has gone through the Medicare system knows the inefficiencies and duplications in that system because it's a cost-plus system. We began this a year ago, and the Republicans attacked us for it. They attacked us because they wanted a radical--now we know why. They want to radically changed Medicare.

MR. GREGORY: But, Senator, wait. But let's...

SEN. SCHUMER: But let me tell you, let me tell you, David...


SEN. SCHUMER: ...a few things that we're proposing...

MR. GREGORY: Wait, hold on.

SEN. SCHUMER: ...which would save...

MR. GREGORY: Before you do that, before you do that.


MR. GREGORY: Waste, fraud and abuse is the typical handle of any politician talking about how to bring prices down. Let's take one example in Medicare, which is, as part of the president's healthcare reform, that you're not going to do hospital reimbursements at the same level. That could save you some money. But that's a big if. That assumes that that actually stays as part of the law and that future congresses have the courage to maintain that, which they have not had when it come to, to cutting payments for doctors over the years.


MR. GREGORY: So there's a lot of built-in savings that don't really get to the core of the problem, which is that the program is unsustainable.

SEN. SCHUMER: Well, let me tell you what is the core problem. The core of the problem is basically two things: one, that providers get away with much too much, and many of them were given too many things. For instance, if Medicare negotiated the price of prescription drugs, was allowed to--Republicans prevented that from happening a few years ago--but negotiated the price of prescription drugs with the drug companies, we'd save over $100 billion. Second, if--there's something called dual eligibles. A senior citizen who's on Medicare and Medicaid, they used to--Medicare used to pay the Medicaid cost of the drug, much lower. Republicans said no, pay the Medicare cost, another 100 billion. But here's the root of the problem. The root of the problem is it's a cost-plus system. When a--when you're sick, the doctor gets paid for each service, each prescription, each pill, each test. If you were to tell doctors you get a certain amount of money to treat Jim Smith, who has a certain form of diabetes, say $10,000, every study shows that you'd save hundreds of billions of dollars without cutting the benefits to people. That's what Democrats stand for. And the reason our Republican colleagues resist is they don't want the present Medicare system to be preserved.

MR. GREGORY: Well, but here--but, Senator...

SEN. SCHUMER: That is what they're--that is why it is...

MR. GREGORY: But the political temptation...

SEN. SCHUMER: Mm-hmm. Pardon?

MR. GREGORY: The political temptation here is for Democrats to simply use this as a tactic to do what they did in, in New York, in the upstate race, and to prevail by saying, essentially, Republicans want to take away health care. Look, Bill Clinton, who looked at this, and obviously understands and wants to preserve Medicare, warned Democrats not to do nothing.


MR. GREGORY: Again, The New York Times, let me just read this, on Thursday, editorialized this way.


MR. GREGORY: The headline, "Running on Medicare the Right Way: Democrats cannot spend their entire campaign attacking Ryan's budget plan." It goes on to say, "Bill Clinton was right on Wednesday to warn his party that it must bring down those costs if it is to have any credibility on the deficit and the economy." So I want to ask you a broader question. Is there a danger for Democrats in not seriously engaging on Medicare as being seen as abdicating responsibility on really fighting the deficit writ large?

SEN. SCHUMER: Well, I don't know a single Democrat who is saying do nothing. That is Mitch McConnell's way of diverting attention from the Ryan plan, which he refuses to take off the table, which is highly unpopular. The bottom line is very simple. We already proved our bona fides in last year's bill, where we, where we extended Medicare's life by 12 years by doing some of the things that I talked about there on delivery system reform. And we're going to continue to do that. There's a choice here--there are three choices. One is to do nothing. One is to preserve the benefits but change the delivery systems and not let some of the providers, like the drug companies, get away with so much. And one is to end Medicare as we know it. Democrats are in the second one, Republicans are on the third one. Until Mitch McConnell abandons the third one, we are not going to get a budget deficit agreement. It's that simple. And I got--was in touch with Bill Clinton last night. He agrees completely with what I said. There's no difference between Bill Clinton, Barack Obama, Steny Hoyer, Chuck Schumer, Senate and House Democrats. The difference is between us and Republicans. They want to end Medicare as we know it. If you turn it over to a pure system where the--where the insurance companies govern, here's what happens according to CBO, nonpartisan: the beneficiaries, instead of paying 25 percent, pay 68 percent. But at the same time, the costs don't go down, they continue to rise because the insurance companies pass the costs to the beneficiaries. That is wrong. That is not politics, I would say to my dear friend Senator McConnell. That is what America's all about. And we will, we will oppose them in the budget negotiations if they don't abandon Ryan, and it will legitimately be one of the major issues of the election year in 2012. And I'll tell you one other thing, David. If--I've studied elections for awhile, and if either party moves too far to the extreme, they lose. Republicans are rapidly moving in that direction, to an extreme direction, by ending Medicare as we know it; by saying in their budget they'd cut things like cancer research and aid to help middle class kids get to school; by even opposing something like a Lautenberg Amendment, which says if you buy a gun, you should be checked on a terrorist watch list to see that you're not a terrorist. And if they continue this way, not only will we keep the Senate, but we're very likely to pick up the House.

MR. GREGORY: All right, I...

SEN. SCHUMER: That's what's going to happen, and that's legitimate. Mitch McConnell said his goal is not to elect President Obama, and then he says we shouldn't talk about elections? Give me a break.

MR. GREGORY: All right, let's--I want to end, just a couple minutes here...


MR. GREGORY: ...talking about the issue of Israel, and the fact that Prime Minister Netanyahu of Israel here was at cross purposes with President Obama. It was striking, as you see the prime minister appearing before Congress, interrupted 29 times with hearty applause and standing ovations, at the same time when President Obama's speech about a return to the pre-1967 borders should be the framework for a Palestinian state. Are you concerned about how out of sync the president appeared here in America with how the prime minister appeared to get a response here in America?

SEN. SCHUMER: Well, look, I agree with what Leader Reid said in his speech on Monday night, and that is that the borders should be negotiated by the two parties, and there shouldn't be set preconditions. What we've learned through history is when any party tries to impose preconditions, it just doesn't work. And so while I think the president is, is good to get involved, because nothing much was happening, and no one can hold that against him in any way, the parties are going to have to negotiate the boundaries themselves.

MR. GREGORY: But here's--Jeff Goldberg of The Atlantic magazine, in a Bloomberg View, wrote a column this week, and he said that failure to get a peace process started is going to very quickly have the Arab spring on the Israeli doorsteps. He writes about it this way: "Israel will soon enough be seen by most of the world as the occupier not of a disputed territory, but of a foreign country. The Palestinians will wake up to find that a General Assembly vote did not, in fact, give them true independence. And then there will be an explosion. The Palestinians who are watching Yemenis, Libyans and Syrians fighting for their freedom will soon be inspired to once again take up their own fight. If Israel misses the chance this year to set the Palestinians on a course toward independence, it will jeopardize its future as a Jewish democracy." Do you fear that a second--another--not a second, but another intifada is coming, and that the results for Israel could be quite negative?

SEN. SCHUMER: Well, no, I--look, Israel has always been beleaguered throughout its history. And there are too many people in the whole world, and particularly in the Arab world, who really still don't believe there should be two states. The majority of Israelis do believe that

there should be two states, 85 percent do. And until the other side is willing to sit down and negotiate--every time Israel has sat down and tried to negotiate, the Palestinians have backed off. And it's a very difficult situation. But I'll tell you this. What the Palestinians should have done, when Prime Minister Netanyahu said let's sit down and talk, is talk. Instead, they formed an alliance with Hamas, labeled by the U.S. a terrorist organization, a group that doesn't believe in Israel's right to exist. And when Israel gave up the settlements in Hamas' area, Gaza, they gave up all the settlements, that's supposed to be a casus belli here, what was Hamas' response? Not, "Oh, gee, let's sit down and talk," but to send rockets into Israel, pre-1967 Israel, in Sderot. So the problem here is not Israel, in my opinion. Obviously, I want them to sit down and talk and come to a compromise, no question about that. But the problem has been the intransigence of the other side.

MR. GREGORY: Yeah. All right.

SEN. SCHUMER: And the whole world has to recognize that before we're going to get any peace.

MR. GREGORY: All right, we're going to leave it there. Senator Schumer, thank you, as always.

SEN. SCHUMER: Thank you.

MR. GREGORY: And coming up, Sarah Palin kicks off a bus tour this morning in Washington that will take her up the East Coast, including New Hampshire. Is this a sign she's running for president? And if so, what will it mean for the rest of the field? Our roundtable weighs in: former Democratic Congressman Harold Ford Jr., Republican strategist Alex Castellanos, Ruth Marcus is here of The Washington Post, as well as David Brooks of The New York Times, straight ahead.


MR. GREGORY: Coming up, Mitt Romney is expected to make his presidential candidacy official on Thursday. So when will the 2012 field be set? Could there be any more surprises in store? Plus, what role will Medicare play in next year's election? Our roundtable is here, ready to weigh in: Harold Ford, Alex Castellanos, Ruth Marcus and David Brooks. They're live and ready. That's up next after this brief commercial break.


MR. DAVID GREGORY: And we're back, joined now by our political roundtable: political strategist Alex Castellanos, former Democratic congressman from Tennessee Harold Ford Jr., columnist for The New York Times David Brooks, and columnist for The Washington Post Ruth Marcus. Welcome to all of you. Well, let's get right to it. 2012 politics, it's all around us. Here's the picture of the bus that Sarah Palin will be taking up the East Coast, talking about restoring America. A live shot. This is the scene at the Pentagon this morning, Rolling Thunder getting ready to go, and Sarah Palin's going to address this rally a little bit later on. The Hill had a great headline on Friday as well, and here was the headline: Sarah Palin is keeping them guessing. Alex Castellanos, what does all this mean? Is she getting into the race?

MR. ALEX CASTELLANOS: I don't see Sarah Palin getting into the race at all. I don't think there's a place for her. Now, I think the real Sarah Palin is Michele Bachmann, and she's in. And she's doing well in Iowa and raising money.

MR. GREGORY: She's going to announce where she was born.

MR. CASTELLANOS: She's going to announce in, I think, in Waterloo. So I don't see a lot of room for her. But Palin, I think fears, re-electing Barack Obama more than anything else. I think she understands she can't beat Barack Obama. She wants to renew her brand, refresh her brand. She can be the power behind 1,000 thrones, but she just can't sit on the big one herself.

MR. GREGORY: Well, David Brooks, we'll get that, that poll ready of how the Republicans stack up currently. Do you not see a role for her in the race? Because Mike Huckabee is out. She could certainly be the social conservative in the race.

MR. DAVID BROOKS: Yeah. But, you know, being president is waking up, somebody hands you the crisis and said, "There's a crisis in Venezuela. What are you going to do about it?" Does any, does anybody think Sarah Palin's ready for that? I don't think so. So she can manage her brand. But running for president is not "American Idol." And I, I think people may agree with her, they may like her, but that doesn't mean they're going to vote for her. And so I--you know, the other thing is she's just not a team player. This is a team sport. Just take one little thing she did this week. She's taking her bus up to New Hampshire.


MR. BROOKS: She doesn't call the Republican Party in New Hampshire, tell, tell them where she's going to appear, what she's going to do. So you got to play as part of the party, you got to play as part of the team.


MR. BROOKS: She's not a team player. I don't think people are going to think she's qualified.

MR. GREGORY: And, Ruth Marcus, this is a closed society. I mean, Palin world is a closed society. Even people, you know, smart Republicans don't know what she's going to do. To that point, she--you know, when she makes appearances, she doesn't necessarily coordinate well. There's a feeling--one Republican I spoke to this week said, "Look, she's lost some support among rank and file Republicans." Yet look at the polling. Again, a lot of this is about name recognition, too. This latest one this week has Rudy Giuliani on top at 16 percent, Romney and Palin at 13 percent. But she's got to look at this and say on name recognition alone, an unsettled field, maybe there's room.

MS. RUTH MARCUS: Well, I'm not sure whether she's looking for the room. I think Alex said that her biggest fear is seeing Barack Obama re-elected. I think her biggest fear is seeing Sarah Palin's name recognition go down. And I think she can make her own space. She gets on the bus, and we're all talking about her and we're all paying attention to her...


MS. MARCUS: ...and that elevates the Sarah Palin brand. And I think that's what this is about more than trying to position herself to be the one who has to be woken up with that 3 AM phone call.

MR. GREGORY: There's not a crisis in Venezuela yet, by the way. I just want to make sure. Because if there is, I just want to be aware.

FMR. REP. HAROLD FORD JR. (D-TN): I think she realized what more and more people are coming to--maybe realization is the wrong word, Alex, but some sense that it could be true is that the, the eventual nominee of the Republican Party is not in the race yet. For Rudy Giuliani to be on the top of a GOP presidential list when he's declared he doesn't know if he's going to run or not; you have Romney, Pawlenty, all these big splashes; you got Rick Perry this week saying he's interested. Sarah Palin has every right to say, "I'm going to take a look at this"...

MR. BROOKS: (Unintelligible)


REP. FORD: ..."and maybe pursue this."

MR. GREGORY: You know, but do you think there's nobody in the race who's going to win yet?

MR. CASTELLANOS: Oh, I think, I think the winner's probably already in the race for the Republican nomination.


MR. CASTELLANOS: But Palin's problem is you can't just echo the Republican Party's resentments and lead. You actually have to say, "Follow me, we're going to go over here." Palin leaves the room, and the Republicans are exactly where they were when she entered. So she's not taking the party anywhere. I don't think she's a serious candidate at all. But the thing about primaries, David, and I've said this before, they don't pick candidates, they make them. This is such a touch process. Somebody's going to beat somebody else. That means they're going to grow. They'll get bigger.

MR. GREGORY: Mm-hmm.

MR. CASTELLANOS: It happened to the seven dwarfs. One of them turned out to be Bill Clinton.

MR. BROOKS: Look what happened this week. Tim Pawlenty had an excellent rollout. He had a very good video, he had a lot of good coverage, he's sharpening his message, he's talking about his biography, he's begun to link his biography to what the country needs. Excellent rollout. Huntsman went to--up to New Hampshire, had a pretty good time up there. Romney has his problems, but he raised a lot of money. he's still Mitt Romney. And so I think it's going to be one of those three.


MR. GREGORY: Can we--I just want to show our, our bulletin board, which we keep updating about who's in, who's out and where things stand. We can put that up on the screen. So you see those who are out. Romney makes it official on Thursday, topping those among who are in. But the, the next graphic that's interesting is those still officially on the sidelines: Huntsman, Palin, of course, and Bachmann, Giuliani perhaps. And then Rick Perry, who made some noises this week about wanting to get in, Ruth.

MS. MARCUS: Well, I think that...

MR. GREGORY: Texas governor.

MS. MARCUS: I, I agree that one of the--one of the dwarfs, or one of the nondwarfs, will become the nominee, and probably somebody already on that bulletin board. I--but I think one of the effects that Palin has is to suck up the energy. We didn't start out the segment talking about Tim Pawlenty, who announced this week.

MR. GREGORY: Mm-hmm.

MS. MARCUS: We started out talking about Sarah Palin. And so to the extent that Romney's a known quantity, people don't necessarily like him, they're not--but he's passed the kind of presidential plausibility test. Pawlenty sort of has the aspect of the guy who's just gotten a chance to sit at the grown-up's table, and people see him as a nice guy but not necessarily--they haven't--he hasn't passed the point where they can imagine him being president. He needs the space and time to be able to do that. Sarah Palin sucks up some of his oxygen.

MR. GREGORY: Well, let me get you both to--I want to react to something that you wrote in the Daily Caller this week, Alex, and talk a little bit more from the point of view of President Obama and how he fares. This is what you wrote--"Newt Gingrich is the devil in a red dress," was the headline. "Barack Obama," you wrote, "can only defeat a Republican like Newt Gingrich. Obama barely won the presidency in '08 though he held the best hand of cards of any candidate in our lifetime had. ... Obama still required an unprecedented economic meltdown to put him over the top. He still could not beat McCain. He had to beat George Bush. Anywhere in America where Bush had a favorable rating under 35 percent, Obama won. ... This election, with Democrats blue states like Florida, North Carolina and Virginia returning to Republican red and unemployment higher than any president who has won re-election has ever suffered, Obama needs a similarly unpopular opponent."

MR. CASTELLANOS: I think that's the case we have. You know, we always say in politics, you can't beat somebody with nobody. Obama may be that rare beast, beast that can only get beaten by a nobody. He does not want this to be a referendum on Obama. He needs, he needs to create what he had last time, which was an unpopular George Bush figure. Who is that? In the Republican Party that could be a Newt Gingrich, that could be a Sarah Palin, I think that could be a Michele Bachmann. But if he's running against a Pawlenty, if he's running against a Huntsman, even a Mitt Romney, it's going to be much harder to demonize a Republican. If he goes out and says, you know, "The Republicans want to throw grandma out in the snow on Medicare" a Republican who's unobjectionable, who could say, "Gee, I guess I'm going to have to break the bad news to Mom soon," and kind of laughs it off could beat Barack Obama.

REP. FORD: Let me be clear about what I mean the Republican might not be in this race. It's obvious, from what Alex has written and other have said, this is a nomination worth having. Mitch McConnell said it this morning. They believe they're going to run a competitive race in 2012. All the factors you mentioned--unemployment, the face that George Bush is not on the ticket, and it's probably unlikely that Sarah Palin will be on the ticket at any level--those factors, Bush and Palin played a big role in Obama surging to the lead and winning a presidency a few years ago.

Having said all of that, I think a, a, a Rudy Giuliani, a Rick Perry and others are going to take a hard look at this. Tim Pawlenty had a great roll-out, Huntsman, they maybe the ones. But Barack Obama will be tough to beat. I disagree with what, what, what--part of Alex's premise. You look at part of their message that is developing this week, what they did with he car industry. Had the American people--had George Bush not had the temerity and then Barack Obama not had the audacity to continue that, had they not had the audacity to continue with TARP and ensure that our financial system did not collapse--it's hard to run on that, but these are realities--and when you look at the growth of the stock market over the last two years, he has a case in something to, something to sell. At the end of the day, though, this whole message about austerity and Medicare cuts and Social Security cuts, as relevant as it may be, Alex, David, Ruth, you all know no president wins by saying, "We are in a terrible position as a country. We have to cut and cut and cut." People want to hear growth. They want to hear how we're going to get back to where we are.

MR. GREGORY: Right...

MR. CASTELLANOS: I agree 100 percent with that.

REP. FORD: And then you get to the message of cutting. The problem with the Republicans roll-outs in the last few days, the last few weeks, is all they talk about are cuts, and doom and gloom. Americans want to hear how we grow, how we create...


REP. FORD: ...and then how we cut. And that's lacking right now.

MR. GREGORY: But it's, but, but it is the economy, David. And Dan Balz is writing this morning about Mitt Romney really making that the message, saying, "Look, this guy didn't have enough experience to lead the economy, Mitt Romney does." And that's really going to be the rational. It's a referendum on the performance of the economy. No Democrat has won re-election since FDR with unemployment higher than 8 percent.

MR. BROOKS: Right.

MR. GREGORY: And President Obama's likely to be there.

MR. BROOKS: But issues do matter, and what people say about the economy matters. I would say on the Republican side, there's a staleness about what they're offering the country--more tax cuts, people sort of heard that. On the Democratic side there's a problem where Obama will say, "We've got massive problems with the unemployed, we've got massive problems with the middle class, and I'm offering you light rail." And so there's a--there's like, big problems, little solutions.

MS. MARCUS: Take a ride.

MR. BROOKS: And so I say neither party right now really has an agenda for the next four years.

MR. CASTELLANOS: Harold's point--Harold's point...

MS. MARCUS: But...

MR. CASTELLANOS: ...though, about the austerity message, the dark doom and gloom message, that--he's right. It doesn't sell in a, in a general election. But in a Republican primary, doom and gloom does very well. Now, in a general election, the Republican candidate does need to do exactly what the congressman is saying.

MR. GREGORY: There's time to get happy, in other words.

MR. CASTELLANOS: There's time to get happy later.

MR. GREGORY: All right, let...


MR. GREGORY: Yeah, go--I want to take a break here. I want to come back and pick up on something that, that everybody's been saying about solving big problems, and whether we have a political system that's prepared to do that, particularly as we get closer to an election year. More from our roundtable right after this.


MR. GREGORY: We are back now with more from our roundtable. Medicare is the fight. What Newt Gingrich started a couple of weeks ago on this program has not gone away. Here was Pat Bagley in the Salt Lake Tribune with a cartoon, Medicare cuts cutting off the nose to spite the faces. Is that what the Republican Party is doing? That's what Steve Israel thinks. He's running the DCCC, the campaign arm of the House of Representatives. He was part of our Press Pass conversation. You can see the whole conversation on our Web site. This is what he said would be the lesson for Republicans.

(Videotape, Wednesday)

REP. STEVE ISRAEL (D-NY): The reason that Kathy Hochul won in New York 26 is because she won independent voters and seniors. We lost the majority in the House of Representatives because we lost independents and seniors. They came back to Democrats in the 26th District of New York over the issue of Medicare. And so that's very instructive to us, and it should be instructive to our Republican friends.

(End videotape)

MR. GREGORY: So, Ruth Marcus, what wins here: bold leadership on Medicare and the argument that the Democrats won't do something courageous, or the Democrats who say, "Hey, those guys want to take away my Medicare"?

MS. MARCUS: I regret to inform you that I think it's the latter. And I think when you were asking Senator McConnell if Medicare was the new third rail of American politics, I think the question was wrong in a sense because it's the old third rail of American politics.

MR. GREGORY: Mm-hmm.

MS. MARCUS: This play has been run time after time. If you go back and look at the quotes from President Clinton back when he needed to win re-election, they sound a lot like the quotes from Democrats today about don't let those Republicans take away your Medicare. The difference is that the debt is bigger, the deficit is bigger, the gap is bigger, and the situation is more dire. But I think that, sadly, the lesson of New York 26 is "mediscare" works.

MR. GREGORY: But here's the--I mean, the question, David Brooks, is whether there's going to be a deal before they raise the debt ceiling on Medicare, and what that looks like. I mean, Senator McConnell wouldn't say it, but he's certainly not backing the Ryan plan. He's not going to go to the mat. I mean, you don't--if you don't whip up the vote in the Senate, that's not going to the mat, it's letting your members vote. It would be something different than what Ryan is talking about.

MR. BROOKS: Right. If you ask Americans, should we cut Medicare to help and reduce the deficit, 78 percent say no. And so that's pretty strong. So that's what happened in New York 26, I agree with Ruth's analysis on that. So what do the Republicans like Mitch McConnell do? Well, they can do a couple things. One of the things that'll be useful is to cut a deal that includes Medicare. To have Democrats--Democratic fingerprints on a Medicare reduction plan, which would be good for the country. And by getting the Democrats involved, then that would reduce that as an issue.

MR. GREGORY: I--right.

MR. BROOKS: And then what they have to offer is tax cut--tax increases on the rich. Now, would the Democrats take that up? I'm not sure and, frankly, I don't think it's likely. But that's what the Republicans need. I think it's much more likely that we'll have really a fudge deal on the debt ceiling limit, a nontrivial chance of a significant default problem this year or a government shutdown problem this year, and then a very large chance of some sort of fiscal crack-up in the next couple of years. I was up on Wall Street this week. I know more about political risk than they do. They're vastly underestimating the source of political risk here. We could have a major problem, I think, either this summer or the next couple years. And I'd be worried about investing too much in the market, that's my financial advice.

MR. GREGORY: Thank you. No. But, but...

MS. MARCUS: Well, luckily the market's closed.

MR. GREGORY: ...Harold, what about this issue of timidity? I mean, it's ironic that what Newt Gingrich--what he said out loud on this program about right-wing social engineering and don't do the Ryan plan was what a lot of Republicans were saying privately, of course.

REP. FORD: Right.

MR. GREGORY: And then here's Bill Clinton giving some ammunition to the Republicans by saying to the Democrats, don't be timid here. Don't go to the old, you know, mediscare tactics. Do something courageous. Is that going to happen?

REP. FORD: I hope. The effort's under way by Joe Biden, by the great vice president, to find some compromise. I'm a believer after watching President Clinton the last few days that perhaps if they get close to a deal, that President Obama will ask President Clinton come in and help convince some of the recalcitrant Democrats that this is the right thing to do. I was most encouraged, though, by McConnell this morning. He backed away from standing so firm and steadfast with Ryan, suggesting strong that he's ready for a deal. And even listening to Chuck Schumer this morning, he talked with more specificity about where they would go. So it's obvious we're moving in a direction where Democrats a few weeks ago said no Medicare.

MR. GREGORY: Mm-hmm.

REP. FORD: I live in New York. The upstate race, I've got to tell you, as much as it was about Medicare, it was also about people wanting jobs. It was about people feeling that government is not being fair where they're asking for cuts. They want some tax increases in some areas. So I think there's a, there's a larger story to be--that's being told there, and I hope that both parties listen.

MR. GREGORY: But, Alex, there's a larger theme here of leadership...


MR. GREGORY: ...that will be tested. And I want to point something out that the vice president spoke about. He spoke about the bin Laden raid in the context of what it could mean for the president politically. This is what he told the LA Times. "Vice President Biden called the death of bin Laden a defining moment that has reshaped how Americans view the Obama presidency, signaling how the daring raid will figure into 2012...the vice president said that the decision to order the raid to kill bin Laden was a major turning point, calling it `the boldest undertaking any president has undertaken on a single event in modern history.' `The American people no longer confuse being contemplative with having courage.'" Is this how voters will see this? Will it matter in the context of what Harold's talking about, which is still needing jobs?

MR. CASTELLANOS: I think President Obama clearly has Joe Biden's vote this time. But beyond that, you know, this is certainly a peak for Obama. We all know what comes after a peak. He--they're trying to sell the strong leadership story. Immediately after that, we spend two weeks, the president debating in public whether he should release a photo, and all kinds of indecision still in Libya. So I don't see this having a long-term impact.

MR. GREGORY: Mm-hmm.

MR. CASTELLANOS: It's not the agenda America cares about. America really cares about Medicare right now and the economy. I think the congressman was right. And Republicans have a much better hand, I think, than we're giving them credit for. Remember, last time we lost three special elections, then we took 65 seats in the House. Why? We got a heads up. We just got a heads up on Medicare. And here's what I think Republicans are going to say: "You love your Medicare, seniors, don't you? You count on it. It helps you sleep good at night. Good. Did you know it's $35 trillion in debt? Our economy's going broke and dragging Medicare along with it. In a little over 3,000 days, CBO says your Medicare's going to end."

MR. GREGORY: Well, and that...

MR. CASTELLANOS: "We've got to plan to do something about it based on that bipartisan Clinton commission."

MR. GREGORY: Mm-hmm.

MR. CASTELLANOS: "Help us save it."


MR. CASTELLANOS: Republicans are going to be able to neutralize this pretty much next election and fight the war on the economy.

MR. GREGORY: But that's interesting because, again, the downside for Democrats is that this becomes not just a proxy, I mean, the deficit fight becomes the fight over the economy. And Republicans have struggled in terms of that through line, making it about jobs, this fight about the deficit.

MS. MARCUS: Well, Democrats have two challenges. The fundamental challenge for President Obama is to do what he can do, and there's a question about how much that is, to get the economy on a good track, on people believing that it's on the right track, by the time of the election. Harold was exactly right when he talked about all of the things that the president did at the beginning, and continuing some of President Bush's TARP, the auto bailout, the stimulus. All of those things contributed, in my view, to saving the economy from imploding, but nobody believes that out there. And voters are not going to be assured of that until they see good performance, which is why I think Mitt Romney's "I'm going to fix the economy" message is the message that I would run with if I were a Republican.

MR. GREGORY: Mm-hmm.

MS. MARCUS: At the same time, the president has to show some seriousness, and this is his real leadership test, on the fiscal situation because, I agree with David, we don't know when it--it is a predictable crisis, but we do not know when that crisis is going to hit. And when it hits, it could hit very hard.

MR. GREGORY: All right, let me get another break in here. We'll come back with our, our finals trends and takeaway segment, and look at what was said here in the course of the hour and what to look for in the week ahead. That's right after this.


MR. GREGORY: We're back in our final moments with our roundtable. Key discussion here with our newsmakers, McConnell and Schumer, was about the budget fight, the Medicare fight, and it was Senator Schumer laying down a marker in these budget negotiations. Watch.


SEN. SCHUMER: We will oppose them in the budget negotiations if they don't abandon Ryan, and it will legitimately be one of the major issues of the election year in 2012.

(End videotape)

MR. GREGORY: So, David Brooks, Ryan is the plan to change Medicare as we know it. We know that Medicare reform is part of this discussion being led by the vice president. Is it realistic that they're going to get a deal on some kind of Medicare reform to then get a deal on, on at least the debt ceiling vote?

MR. BROOKS: I was feeling the love from Chuck Schumer. I didn't, I didn't really see any, any prospect of a deal there. I mean, this is a test of national character. Do the American people understand that Medicare is going to be bankrupt on its current trajectory, and can elites like McConnell and Schumer actually create a deal? I didn't see much hope today, from what the two were saying. I saw a little movement, maybe on both sides, but obviously a long way still to go.

MS. MARCUS: And, you know, one piece of the movement that we have not seen, and I understand that it cannot be shown in public, but until Republicans acknowledge that in order to get our fiscal house in order we're going to need more revenue than we're currently planning to raise...

MR. GREGORY: Mm-hmm.

MS. MARCUS: cannot get a deal. And one other thing, quickly, to understand about a Medicare deal, is any Medicare deal is not going to produce a lot of cuts in the near term, in the first 10 years. So that's something else that's going to be difficult to negotiating a debt agreement.

MR. GREGORY: And let me get to the week ahead. For politicians on the Republican side who are hitting the trail, Mitt Romney's going to make it official this Thursday in New Hampshire. Sarah Palin has her tour up the East Coast, and that's supposed to land in New Hampshire as the week moves on. Tim Pawlenty is in Iowa. Bachmann has events in New Hampshire as well. Looks like she's getting ready to announce, though, in Iowa, where she was born. Santorum's still out there. Giuliani actually taking a look at this, as Harold suggested. He's going to be in New Hampshire as well. As for President Obama, we mentioned he'll be in Joplin, Missouri, today. He's also preparing as early as tomorrow to nominate General Martin Dempsey as the new chairman of the Joint Chiefs, the president's top military adviser, of course. He's currently the Army chief. He would take over for departing chairman Admiral Mike Mullen. Earlier I was on the "Today" program mentioning General Cartwright. I misspoke there because he had been overtaken by some criticism of him. But, Harold, a point about not just the week ahead, but the politics.

REP. FORD: You're President Obama. Can you imagine being able to run on, "I brokered a deal to cut spending in Medicare and Social Security?" He ought to lead on this front.

MR. GREGORY: Mm-hmm.

REP. FORD: "I saved and created millions of jobs in the car industry. We killed bin Laden." You come back in the fall if--when the jobs numbers aren't where you want, and urge Republicans, after you've given them a fiscal austerity bill, to do a jobs bill. He's unbeatable. If you don't those things, I think you're weaker next year.

MR. GREGORY: And you got to be able to say, "Look, I'm for the thing that those Republicans are for, but they're just way too extreme."

MR. CASTELLANOS: Deficit reduction is not extreme at all, saving Medicare's not extreme at all. I think Harold's right. If Obama moves right on deficit reduction and real deficit reduction, on a reasonable version of what Republicans want, he'll be tough to beat. But I don't see a Medicare deal happening right now because Republicans need to play the politics. They've played policy, now they need to play politics because that's all the Democrats are doing. So I think it's going to be--you know, we've launched a missile at the deficit, and it's either going to hit the deficit or it's going to hit grandma's house, you know. We've got to explain that this is real deficit reduction that's going to save Medicare.

MR. GREGORY: All right, we will--we will leave it there. Thank you all very much.

MR. DAVID GREGORY: That is all for today. We're going to be away next Sunday during NBC Sports coverage of the French Open, but we will return the following week.

If it's Sunday, it's MEET THE PRESS.

And we leave you this Memorial Day weekend and we honor and remember all of the men and women who have given their lives in service to this nation. God bless our troops.