Meet The Press (02/20/2011)

MR. DAVID GREGORY: Washington, the battle to rein in government spending is shaping up to be the major fight not only of this year, but of the 2012 campaign. As Wisconsin's Republican governor takes on the unions and orders Democratic lawmakers back to work, leaders in Congress are exchanging threats about a government shutdown if they can't agree on spending cuts.

SPEAKER JOHN BOEHNER (R-OH): Read my lips: We're going to cut spending.

MR. GREGORY: Where will it all lead? A special discussion this morning begins with two prominent voices of the Senate, Assistant Majority Leader Dick Durbin, Democrat of Illinois, and Republican member of the Budget Committee, Lindsey Graham of South Carolina. Then, more on the budget battle and what it says about leadership in Washington after the president unveils a budget that fails to address the largest drivers of the country's debt.

REP. PAUL RYAN (R-WI): Why did you duck? Why are you not taking this opportunity to lead?

PRES. BARACK OBAMA: This is not a matter of you go first or I go first.

MR. GREGORY: Our roundtable weighs in: Former governor of Michigan, Democrat Jennifer Granholm; former congressman from Tennessee, Democrat Harold Ford; Republican strategist and former White House counselor to President Bush, Ed Gillespie; and the man credited with inspiring the tea party movement, CNBC's Rick Santelli. Plus, the very latest on revolutions sweeping the Middle East. After Egypt, protests and violent crackdowns have spread to the gulf states. How will the administration balance U.S. interests with its interest in supporting democratic reforms? Our guest, the president's ambassador to the United Nations, Susan Rice.

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

MR. GREGORY: Good morning. And we will begin with those anti- government demonstrations that continue across the Middle East and North Africa. The governments of Libya, Algeria and Yemen each responding with violent crackdowns over the weekend. In Bahrain overnight, meantime, demonstrations have continued but state security forces have withdrawn, leaving behind more jubilant protests. All of this being watched quite closely and with a sense of unease by rulers in neighboring Saudi Arabia. Joining me now, the U.S. ambassador to the United Nations, Susan Rice. Ambassador Rice, welcome back to MEET THE PRESS.

AMB. SUSAN RICE: Thank you, David.

MR. GREGORY: Let me ask you specifically, as we go to the map, to talk about Libya. This appears to be the most violent crackdown where there isn't a whole lot that's actually known. In Benghazi, the eastern city, Human Rights Watch is reporting widespread government crackdowns, violent, the number of casualties unknown at this point. What can you say about what the U.S. government knows about what's happening inside Libya?

AMB. RICE: We're very concerned about the reports of violence and attacks on civilians. We've condemned that violence, David, and our view is that in Libya, as throughout the region, peaceful protests need to be respected. They need to be able to exercise their universal rights that people around the world share, and those rights include freedom of expression, freedom of assembly. And we will stand up in support of those universal rights everywhere. In addition, David, what we're seeing across the region is a yearning for change, a hunger for political reform, economic reform, economic opportunity, greater representation. And we support that very strongly.

MR. GREGORY: All right, but let -- we're going to get to that. But I want to -- specifically in Libya, is Colonel Gadhafi killing protesters? Is he ordering his troops to go out there and violently crack down?

AMB. RICE: From what we can tell -- and, as you know, the journalists are banned and...

MR. GREGORY: Right.

AMB. RICE: ...and we are relying on reports from Human Rights Watch and other observers -- there has been less violence, very little so far in Tripoli, although that may be changing. In Benghazi, in, in the coastal areas, we're very concerned about reports of security forces firing on peaceful protesters.

MR. GREGORY: Let, let me ask you about Bahrain. We go back to the map and look at some of the scenes out of that country just over the causeway from Saudi Arabia, and also where the U.S. Fifth Fleet sits. The, the main center square in Manama, the capital, security forces have withdrawn from there. The United States has to be exerting a certain amount of influence to get the government there to step back and step away from a violent crackdown.

AMB. RICE: Well, we've been very clear with our partners in Bahrain that they ought to exercise restraint, that there's no place for violence against peaceful protesters there or anywhere else, and we've condemned that violence. We've had outreach from President Obama, National Security Adviser Tom Donilon, Secretary of State Clinton and other senior officials, urging that restraint and encouraging what is now transpiring, which seems to be the pullback of the military forces and now a real effort to engage the opposition in a broad-based dialogue that will enable the people's aspirations to be discussed and, we hope, respected.

MR. GREGORY: Can the government as it now stands survive, in your view, in Bahrain?

AMB. RICE: Well, David, I wouldn't want to be in the business of predictions in, in this very volatile environment, as we've seen change so rapidly across the region. But what we're encouraging Bahrain and other governments in the region to do is to recognize that this is a yearning for change and reform that is not going to go away, that it needs to be respected, and that they need to get ahead of it by leading rather than being pushed.

MR. GREGORY: You know, the, the -- among our Arab allies, according to diplomats that I talked to, they criticize what they see as inconsistency on the part of the administration with regard to some allies vs. other allies, and then adversaries. The Economist magazine framed this very

difficult choice for the president this way, I'll put it up on the screen: "By his actions," the magazine writes, "in Egypt, Mr. Obama has put other authoritarian allies on notice ... He thinks that even pro-Western autocracies that fail to reform deserve to die. But how much reform? And when will he decide they are dying? Will Mr. Obama abandon gradual reformers such as King Abdullah or King Mohammed as soon as enough people turn out on the streets of Jordan and Morocco? How many people are enough? To judge by the gale rattling the Arab world this week, he may have to answer such questions rather soon."

AMB. RICE: Well, David, for years, and indeed in -- throughout the course of this entire administration, we have been saying to our friends and partners in the Arab and Muslim world that

there needs to be a process for, for reform, that there are conditions that are inherently unstable: a youth bulge, high unemployment, a lack of political openness. And we have pressed publicly and privately for the kind of change that is necessary. Now, we don't see this as, as antithetical to our interests. We support the legitimate aspirations of people all over the world, including in the Arab world, to have representative governments, to have governments that respect their universal rights. And we don't see a dichotomy or a -- an inconsistency between beginning to respond to those aspirations and our interests...

MR. GREGORY: But can't you see how our allies are confused about where we're going to push, where we're going to support reforms, or where we're going to push them out of power?

AMB. RICE: No. We've been very consistent across the region. The message is the same: No violence; respect the universal rights of people to assemble, to protest, to speak, to, to form political organizations; and, and, and get ahead of reform, recognize that there needs to be lasting political change and lasting economic change.

MR. GREGORY: But you can't say it's been consistent.

AMB. RICE: It has.

MR. GREGORY: The, the president pushed Mubarak to leave office. He has not done that in Bahrain, he has not done that in Saudi Arabia, he has not done that in Jordan.

AMB. RICE: No, no, no. David, David, look, each of these countries is different. Each of these circumstances will be decided by the people of those countries. We are not pushing people out or, or dictating that they stay. What we're doing is saying consistently across the board there are universal, universal human rights that need to be respected. There are aspirations and, and demands for reform that are, are legitimate and need to be addressed very urgently.

MR. GREGORY: Let, let me follow up on Egypt. One of the big stories that has come out of there in the protests was what happened to our colleague from CBS News, Lara Logan, who was attacked by a mob, sexually assaulted, according to CBS News. And I know that the administration has been pressing the Egyptian military and the government to get to the bottom of this. Are you satisfied that you have any real answers as to what was behind this?

AMB. RICE: David, first of all, we're all horrified and outraged by what seems to have been a horrific attack against Lara Logan, and we've condemned it. And we are doing everything through our embassy and with the Egyptian authorities to ensure that, that we know as much as can be known about this, and that those who are responsible are held accountable.

MR. GREGORY: But no answers yet that you're satisfied with?

AMB. RICE: Not -- no, not yet.

MR. GREGORY: Let -- the, the other question in Egypt-- and again, where criticism comes from our allies -- is that the U.S. publicly and privately pushed Mubarak to go without a real sense of what would come next in terms of democratic reform, even a democratic process, since there's not an identified opposition leader as of yet. The USA Today reported the presence of the Muslim

Brotherhood, the most organized opposition force, and they write this: "In the scramble for power among groups of various political identity after last week's ouster of Mubarak, the Brotherhood-- an Islamist group that has held as many as 20 percent of the seats in Egypt's parliament in recent years- -is vowing to increase its influence on daily life in Egypt. " The Brotherhood would seek 'the preservation of honor' by stoning adulterers, punishing gays, requiring Muslim women to cover their heads and shoulders in public and killing Muslims who leave their faith, said [ Brotherhood spokesman] Abdel Fattah, whose forehead bore the calluses of those who prostrate themselves five times a day in prayer." If the Brotherhood becomes a dominant part of Egyptian -- of the Egyptian government, is the United States prepared to do business, to do business with them as an ally that Egypt now is?

AMB. RICE: Well, first of all, there's no indication that the, the Brotherhood is going to dominate Egyptian politics. What you saw on the streets, and what we saw as recently as Friday in Tahrir Square, is a incredibly diverse cross section of Egyptian society, largely secular, seeking the same sort of reform-- male, female, religious, secular, young, and old. This is a cross-cutting movement for change. And we have confidence that if the democratic processes are respected, if there is time for parties to form, if there's an opportunity for civil society to organize, if the constitution is amended as it needs to be and there's freedom of expression, that the Egyptian people will responsibly choose new leadership and we will look forward to working with the democratic Egypt.

MR. GREGORY: You're saying that the Brotherhood should not be feared.

AMB. RICE: David, what I'm saying is we have faith in the people of Egypt, and we have faith in democracy, and we believe in allowing democratic institutions to take root and to flourish. That's our aim in Egypt. We're going to support that. And we believe it needs to be credible and irreversible.

MR. GREGORY: Before you go, I want to ask you about the, the U.N. vote on a resolution brought forward by the Palestinians to declare Israeli settlement activity as illegal. You, as the United States representative there, vetoed that measure because of the word "illegal." The administration believes that settlements are illegitimate, but not necessarily illegal. My, my question is whether you worry that in the middle of all this protest, the administration has now angered enough Arabs in government and on the street by taking on this issue in this way?

AMB. RICE: Well, first of all, David, we vetoed the resolution not only because of the word illegal, but because our view is that we need to get the parties back to direct negotiations so that they can agree through direct talks on a two- state solution. That's the goal.

MR. GREGORY: Mm-hmm.

AMB. RICE: And the problem with this resolution is it was one-sided, and it was designed -- not designed, but it would have had the impact of hardening one or both sides and making it much harder for us to get them back to the table. So we have our eye on the big prize. Yes, for over four decades it has been U.S. policy to oppose settlement activity. We view it as illegitimate and corrosive to the peace process. I made that point clearly in our statement after the vote. But the aim, David, is to achieve an independent, viable Palestinian state living side-by-side next to a Jewish state of Israel. That's what we're going to continue to work to achieve. And, and we look to the parties to demonstrate their commitment to that goal and to take the important steps that need to be taken to build confidence and trust towards that end.

MR. GREGORY: All right, Ambassador Rice, we're going to leave it there this morning. Thank you very much...

AMB. RICE: Good to be with you.

MR. GREGORY: ...for being here. We focus now on the battle over government spending that is taking place, as I mentioned, from Wisconsin to Washington and beyond. Joining me now two prominent voices in the Senate: the assistant majority Leader, Dick Durbin, the Democrat of Illinois, and Republican member of the Budget Committee, Lindsey Graham of South Carolina. Welcome to both of you. Senator Graham, I do want to start with you and just follow up on one point about what's happening in the Middle East. As Ambassador Rice suggested, so much concern about the nature of the crackdowns in certain countries now. Are you satisfied with any measure of consistency you see from the administration in terms of how they are using their influence against various countries?

SEN. LINDSEY GRAHAM (R-SC): Well, the one, one suggestion I would make is we've been very inconsistent and too timid when it comes to Iran. They've done a good job in Egypt. I think we should have a policy of urging old friends to do better in replacing old enemies. So I'd like to see regime change in Libya. I'd like to see regime change in Iran. I think we need to be tougher on companies that do business with Iran. But, generally speaking, the administration, I think, has handled Egypt well and is trying to stay ahead of this when it comes to Jordan, Bahrain, and Saudi Arabia.

MR. GREGORY: All right. There's so much to get to on the budget. Senator Durbin, I want to go there immediately. It's interesting, here, here is the president's budget for next year, and yet the fight hasn't even started over this because Congress is still fighting about this year's money, funding the government for this year. A dramatic House vote over the weekend and here was a summary in The Washington Post, that I'll put up on the screen. " The House approves dramatic cuts in federal spending, 235-189. The Senate is expected" the Post goes on, "to take up its own version of the spending measure the first week of March, just before a March 4 deadline for when the current funding resolution expires. With Democrats pushing to keep spending at 2010 levels for the remainder of this year, the two sides begin a grueling negotiation process more than $61 billion apart." Senator Durbin, are we heading towards some kind of government shutdown?

SEN. DICK DURBIN (D-IL): I certainly hope not, and we've made it clear from the start that that is the worst outcome. If we end up shutting down the government and calling into question whether we're going to meet our obligations for Social Security checks and paying our troops, then that is an absolute, utter failure. We can do better. And I think we need to sit down in a positive, constructive way and work out our differences. There are differences. But the starting point is that we know we need to cut spending, we know we need to live within our means. And we believe that we can find a way to do this for the remainder of this fiscal year.

MR. GREGORY: But how does this get resolved? Here was Senator Reid, the majority leader, Senator Graham, talking about the House, you know, passed their end of it and now there's not a lot

of time to negotiate. Speaker Boehner saying, "Read my lips: We're going to cut spending," and this is how Senator Reid responded.

SEN. HARRY REID (D-NV): And now he's resorting to threats to do just that without any negotiations. That is not permissible. We will not stand for that. He's wrong.

MR. GREGORY: Do you think we're headed toward a government shutdown?

SEN. GRAHAM: The only way we'll shut the government down is if our Democratic colleagues insist on keeping the federal government large and unsustainable. From 2008 to 2010 the federal government in non-defense discretionary spending grew about 24 percent. Very few people in America had that increase in their budgets. And if you count the stimulus, over 80 percent increase in spending. What I hope to happen is that we'll find a way to resolve this by reducing spending in a bipartisan fashion. The House members did exactly what they campaigned on. The Democratic House was fired because they spent too much. There will probably be a temporary CR, but it should have some spending cuts as a down payment on controlling the size of our federal government.

MR. GREGORY: But you're suggesting compromise, some spending cuts. You're suggesting Republican leaders in the House have got to be able to compromise because the Senate's not going to pass what they just passed.

SEN. GRAHAM: The, the, the, the only reason I'm suggesting is that we do a temporary CR for a week or two is we just don't have enough time. But I won't support a CR unless it has some spending cuts.

MR. GREGORY: Right.

SEN. GRAHAM: But I'm going to side with the House when it comes to getting back to 2008 spending levels. That's what they campaigned on. They're just doing what they promised the American people. And getting back to 2008 levels I think is a good start. And we got a lot more to do than just that.

MR. GREGORY: So, just so everybody knows, a CR is a continuing resolution, which is a way to fund the government for the rest of the year. Senator Durbin, where do you see room for compromise here? Are, are your -- you, as leaders, in, in -- on the Democratic side in the Senate are going to have to, to move a bit on cutting dramatically government spending.

SEN. DURBIN: David, understand the starting point. We've already cut $41 billion below the president's budget for this fiscal year in this -- the way we're currently funding our government. And

now the question is: How much further should we go? And there are serious questions to be answered.

MR. GREGORY: But Democrats haven't actually cut anything. But, Senator, they haven't actually -- you haven't actually cut anything because there was no budget last year.

SEN. DURBIN: Well that's wrong, David, we have.

MR. GREGORY: What cuts have you...

SEN. DURBIN: No, no, that's wrong.

MR. GREGORY: There's -- the $41 billion is just less than the level that it was funded at before.

SEN. DURBIN: No, it's less than the amount asked for by the president for this year, $41 billion below it, and the House has gone $100 billion below it. And so let's be very candid, both sides have

made cuts. The question is: What is the right thing to do at this moment? The deficit commission took a look at our economy and said, "Be careful. Make sure that you move towards fiscal solvency for the United States, but do it in a fashion that will not harm the growth of our economy." You can't reach a budget balance with 15 million Americans out of work. We need to invest in things

that count: Education and training for our workers; innovation so that we have that kind of spark of creativity that creates new businesses and new jobs; and investment in the infrastructure of America, building things that are going to make us strong for generations to come.

MR. GREGORY: But...

SEN. DURBIN: If I have anything to fault with the House approach to it, I think they went too far in their cuts.

MR. GREGORY: Let me ask you about what is becoming a federal issue, and that is what's happening in Wisconsin. This was the scene on Friday in the rotunda in Madison as union workers were protesting the move by the governor of Wisconsin to demand a greater participation on unions in terms of pension contributions, as well as health care contributions, also trying to end collective bargaining in the state. And you see the response there. President Obama did an interview and weighed in on this. This is what he had to say.

PRES. BARACK OBAMA: Some of what I've heard coming out of Wisconsin, where you're just making it harder for public employees to collectively bargain generally, seems like more of an assault on unions. And I think it's very important for us to understand that public employees, they're our neighbors, they're our friends.

MR. GREGORY: Senator Graham, did the president do the right thing weighing in to this controversy?

SEN. GRAHAM: I think the president should be focusing on what we're doing in Washington. The president's budget this year is the highest level of spending as a nation-- 25.3 percent of GDP-- since World War II. So that's not the number to use to get this place in, in, in fiscal sanity. We should be looking at the dollars we're actually spending. That's what the House did. But when the president talks about Wisconsin, I think that's -- that really is inappropriate. The governor of Wisconsin is doing what he campaigned on. He said he would ask contributions from government employees for pension and for health care at a level that I think is reasonable. And he also put on the table renegotiating and reforming collective bargaining. He told me yesterday it takes 15 months to do a contract with government employees in Wisconsin. And so he's doing what he said. There was an election on his proposals, and he won, and he should be allowed to fulfill his mandate just like the House Republicans.

MR. GREGORY: Senator Durbin, is the White House, is the president, using his own campaign operation, an operation of supporters, to fuel protests in Wisconsin?

SEN. DURBIN: Let me tell you why what's happening in Wisconsin, just north of Illinois, goes way beyond the discussion of the Wisconsin budget. If you think this is just about money and the budget, then you might believe Cesar Chavez was just working to get a couple pennies more per pound for grapes or that Martin Luther King was really working for access to hotels and restaurants. There's a much bigger issue at stake here. For over 80 years in America, we have recognized the rights of our workers to freely gather together, collectively bargain, so that they could have fairness in the workplace and fairness in compensation. And that is what's at stake here. It goes way beyond this budget issue. This governor of Wisconsin is not setting out just to fix a budget, he's setting out to break a union. That is a major move in terms of American history. I believe the president should have weighed in. I think we should all weigh in and say, " Do the right thing for Wisconsin's budget, but do not destroy decades of work to establish the rights of workers to speak for themselves."

SEN. GRAHAM: David, if I could just add, this is a campaign flier I have -- I don't know if you can see it -- from the last election cycle where Wisconsin unions said, "If you elect this guy, Scott Walker, he's going to reform or limit collective bargaining." He was open about what he was going to do about contributions to pensions and retirement, and he told the people of Wisconsin, "I'm going to change collective bargaining because it is -- impedes progress when it comes to education. It's too hard to fire anybody, it is too complicated. And I'm going to change that system." So, in a democracy, when you run on something, you do have an obligation to fulfill your promise. He didn't take anybody by surprise. He's doing exactly what he said. There was a referendum on this issue, and the unions lost. And the Democrats in Wisconsin should come back to Wisconsin to have votes.

MR. GREGORY: All right. Let me, let me take a break here. We're going to come back, talk more about the president's budget and the question of leadership in Washington on the biggest drivers of our nation's debt. More with Senators Durbin and Graham in just a moment.

MR. GREGORY: Coming up, more with Senators Durbin and Graham. Can both parties come to an agreement on spending or will there be a government shutdown? Up next, after this brief commercial break.

MR. GREGORY: We're back, joined again by Senators Dick Durbin and Lindsey Graham. And, Senator Durbin, you mentioned the debt commission, the president's debt commission on which you served, and you supported its findings. They're out with an op-ed in The Washington Post today about the president's budget. And this is, in part, what they had to say. "To be sure, the president's budget doesn't go nearly far enough in addressing the nation's fiscal challenges. In fact, it goes nowhere close." This was a president, Senator Durbin, who said, during the transition, that we cannot kick the can down the road when it comes to entitlement spending, the biggest drivers of our nation's debt. And yet he chose not to do so in this budget. Why?

SEN. DURBIN: Well, let's give credit where it's due. The president's budget will free spending and, over the course of five years, is going to reduce our, our, our deficit by some $400 billion. We'll see domestic discretionary spending at the lowest level, as a percentage of GDP, since President Dwight David Eisenhower. It is a step in the right direction, and it's consistent with the first two years the deficit commission recommended. Now, as a member of the commission, I will tell you we went beyond that. We said, "After the first two years, we've got to have a 5 percent reduction in spending the first year, and then half of, of the cost of living increase reduction for the next seven years." So we do achieve more through the deficit commission.

Now, David, the good news is this: There are six of us, three Democrats and three Republicans still meeting, looking at the deficit commission as a template or as a goal, and trying to find a way to work together in a bipartisan fashion in the Senate to come up with a reasonable way to deal with this deficit. We can build on the president's budget into deeper cuts, but we need to put everything on the table, with the exception of Social Security, which I'd like to mention. Everything else needs to be on the table. The House, in their budget, just dealt with 12 percent and made a dramatic cut in our budget of 12 percent in domestic discretionary. I might say...

MR. GREGORY: But, but, but, Senator, it's -- everything is not on the table. I mean, the point is you're talking about -- you're heralding 12 percent of the budget. That's not where the big -- that's not where the money is here when it comes to driving up the debt. You even said about the debt commission that the president probably doesn't want to wear that collar into the next election. I've

talked to administration officials who say the strategy here is a political one: Get the Republicans to step forward first, make the big suggestions on where to cut entitlements, and then that could be used against them in the election.

SEN. DURBIN: Well, David, let me tell you, after we get beyond who goes first and bragging

rights about who cuts the most, the bottom line is: Can we reach an agreement on a bipartisan fashion with senators of both political parties and move forward? What the president has said, he's open to this conversation. I'd like to say one word about Social Security from my point of view.

MR. GREGORY: Well, let me just hold that. I want to get Senator Graham's response on this question of whether the president is making good on his promise to lead on this issue.

SEN. GRAHAM: Well, it's clear to me that he, he did not lead in the State of the Union. This budget does nothing, his budget does nothing on entitlement spending, and we all know that's where the money's at. It's a politically timid budget, it's a fiscally timid budget. It goes nowhere near where the debt commission went. It was $4 trillion over a decade. It allows the debt to double in four years, then triple by 2019. It's just not the document we need to keep from becoming Greece. The debt commission, if given life, can change this country. And to Senator Durbin, you have my undying respect and gratitude for working with Republicans and Democrats to vote on a document that is a blueprint to save this country from fiscal collapse. Forty cents of every dollar we spend, we borrow. And in 20 years from now, all of the money we have in revenue going to go to pay the debts Social Security, Medicare and Medicaid, nothing left for the national defense, homeland security, etc. So Dick, let's do something about the tax code. Let's flatten it out, do away with all deductions except home interest and charitable giving. Let's be bold when it comes to Medicare. And let's put Social Security on the table in a rational way, like Ronald Reagan and Tip O'Neill did. There's no reason not to adjust the age over time for people under 55 to 69 or 70. You and I can afford some means testings to our benefits. That will save Social Security from bankruptcy. It's headed toward across-the-board cuts in 20 years. So I applaud what you're doing with the other senators, but let's do put Social Security on the table. Me and Senator McCain are going to work on a solution. I'd like to share it with you.

MR. GREGORY: Senator Durbin?

SEN. DURBIN: David, if I could say this about Social Security.

MR. GREGORY: Yeah.

SEN. DURBIN: I -- first, I want to thank my colleague for the kind words. Social Security does not add one penny to the deficit. Social Security untouched will make every promised payment for more than 25 years. But the deficit commission was given a charge, add 75 more years of solvency to Social Security. It came up with an approach. I think, frankly, another commission, Pete Domenici and Alice Rivlin's commission, came up with a better approach. We need to move on Social Security, but let's put it on a track that runs parallel but separate to deficit reduction. The Social Security program, as it's currently put together, does not have any impact on the deficit.

MR. GREGORY: Senator Graham, is that -- I mean...

SEN. GRAHAM: If I could just -- well, that -- let's just...

MR. GREGORY: ...few people believe that there's not an arithmetic problem with Social Security.

SEN. GRAHAM: You know, when I was 21 and 22, my parents died, I had a 13-year-old sister. I was in law -- college in law school. If it weren't for survivor benefits coming to my sister from my parents' contribution, we would have had a hard time making it. Today I'm 55, I don't have any kids. You know, we're, we're paying more in benefits than we're collecting in taxes in about five years. In 2037, maybe even sooner, you have to cut benefits by a third across the table. All I'm suggesting is let's do with Social Security what Ronald Reagan and Tip O'Neill did. Let's get it in a sustainable glide path. You know the age has to be adjusted for all entitlements, including Medicare. To go 67 to 69 like Reagan and Tip O'Neill did, for people under 55, is amenably doable.

MR. GREGORY: All right.

SEN. GRAHAM: And it does help our long-term debt. To take it off the table and, and -- is just the wrong thing to do. And, and it's just very disappointing.

MR. GREGORY: All right. We're going to have to leave it there. More of this debate ahead, for sure. Thank you both very much. And coming next, budget battles in Washington and in state capitals across the country. We've been talking about all eyes on Wisconsin this week as government workers protestered -- protested, rather, and state legislators walked out. Will other states now follow? And the president came under fire from Republicans for not being bold enough in his own budget. Is the budget blueprint a failure of leadership or a political power play eyeing the 2012 elections? Our roundtable weighs in: former Michigan Governor Jennifer Granholm, former Congressman Harold Ford, Republican strategist Ed Gillespie, and CNBC's Rick Santelli.

MR. GREGORY: We are back, now joined by our roundtable: Republican strategist, former White House counselor to President Bush, Ed Gillespie; CNBC's Rick Santelli; former congressman from Tennessee, Democrat Harold Ford; and former governor of Michigan, Democrat Jennifer Granholm, who left the statehouse last month and who, we're pleased to say, will be joining us on a regular basis as a contributor to our roundtable. So, Governor, welcome particularly.

FMR. GOV. JENNIFER GRANHOLM (D-MI): Thank you.

MR. GREGORY: Nice to have you here. Well, there is so much to talk about, and it's -- as I said at the top of the program, from Wisconsin to Washington it is this fight about reining in government spending. So here it was, look at this picture, the sea of red. Union protesters in the rotunda in Madison, Wisconsin, over the move by Governor Walker to take on the unions. And this battle is ongoing. This is how The New York

Times reported it on Saturday, to kind of frame the issue: "The images from Wisconsin with its protests, shutdown of some public services and missing Democratic senators, who fled the state to block a vote evoked the Middle East more than the Midwest.

"The parallels raise the inevitable question: Is Wisconsin the Tunisia of collective bargaining rights?" Governor Granholm, what is at stake here?

GOV. GRANHOLM: Well, I don't think anybody disagrees that there has to be cuts. And I don't, I don't hear anybody on either side saying that there shouldn't be. And the, the, the workers on Friday said that, "We'll accept the contributions to the pension. We'll accept the contributions to health care." So given that the governor has already gotten them, what he sought to do to resolve his budget problem, what is this really exposed to be but an attack on collective bargaining? And so I, I love -- we were talking earlier, I love the smell of democracy. It's so inspiring that so many people feel moved to come out and express themselves. But this is -- this in Wisconsin, make no doubt about it, the, the -- everybody understands that cuts need to happen. But this is really about collective bargaining.

MR. GREGORY: But, Ed Gillespie, is this then open season on the unions by a Republican governor? Is that what this is about? That's what the president said.

MR. ED GILLESPIE: Well, I was interested to see the president insert himself into the Wisconsin budget debate. And I tend to agree with Lindsey Graham, not surprisingly, that he might want to focus more of his attention on trying to get control of federal spending in Washington. But look, right now what Scott Walker, the governor of Wisconsin, is proposing is that the members of the unions in, in the public employee unions in Wisconsin vote every year to validate their, their union participation. That is democracy. Empowering the worker to make a determination as to whether or not they want to contribute these compulsory union dues or not makes a lot of sense. And that's really what this is about. The, the labor unions want to lock people in, you know, as soon as they get a job, where they don't really have a choice as to whether or not they can vote for, for having union representation or not. I, I think democracy's a good thing. We ought to have more of it.

MR. GREGORY: Harold Ford, look at the numbers from 2008 in Wisconsin in the presidential race. This was a state that the president carried 56 to 42; a swing state, you wouldn't know it by those numbers. But more Republicans, certainly in the midterm election, had strong gains. And make no mistake, the president has now elevated Governor Walker there in Wisconsin. This is about energizing unions. This is the core of the Democratic Party. And this is going to be a big issue now.

FMR. REP. HAROLD FORD JR. (D-TN): It's become more political, or as much political as it is substantive, around the budget. The president obviously wants to hold onto his base, energize that base for the next year's election. Scott Walker and the tea party is understanding their argument. But I think it's important to understand that you can't look at all of these states as one. The governor touched on it very well. This issue in Wisconsin deals with whether or not public employees ought to pay into their health insurance program, which they don't now, and to their pension program, which they don't. The unions have agreed to do this. This has now become -- and I think President Obama was right in his description of it -- it's questionable whether or not he should have gotten into it -- but this has now become an assault on unions and the ability to organize in Wisconsin. I'm hopeful that the governor, if he's serious about the math, which he obviously is, that he will take the unions at their word, saying, "We are now prepared," which is the right thing to do. In other states where public employees are not doing this, they should use this as a model. But to, to say that collective bargaining ought to be ended, I'm uncomfortable with that. And I think Republicans, particularly Scott Walker, may find himself in an overreach position if he, if he continues that line.

MR. GREGORY: But, Rick Santelli, why not just take them at their word that they were willing to accept these provisions, but leave collective bargaining alone?

MR. RICK SANTELLI: Well, I think that has implications for some of the local governments in Wisconsin, and I also think that, you know, I'm not a collective bargaining expert, but even going back to FDR, there's always been issues as to the sustainability and the appropriateness of having collective bargaining when it comes to the public employees. And I think this is an issue that needs to be put out into the air and see -- many, many other states, ultimately, might have -- not have the same balance sheet as Wisconsin, but I think, ultimately, collective bargaining, even from a federal level, these are big issues, and these costs need to be put under control. If the country is ever attacked like it was in 9/11, we all respond with a sense of urgency. What's going on on balance sheets throughout the country is the same type of attack.

MR. GREGORY: Well, let me pick up on that. Governor Granholm, the national conversation is about how to rein in government spending.

GOV. GRANHOLM: Right.

MR. GREGORY: Republicans, they won in November. They are now owning this conversation, it seems, more than President Obama and the Democrats are. Is that a problem politically?

GOV. GRANHOLM: I think it's clear that the Democrats want to rein in spending, but they don't want to damage the economy. The whole point is, you know, I think there is a real overreach with respect to the interpretation of the November results. The November results, sure, some people voted the way they did because they wanted to cut everything out of government. But most people, I would venture to say, did it because they were uncomfortable with the fact that the unemployment rate is high, that this is about jobs and the economy more than it is about the deficit. You slash too much, you hurt jobs and the economies. So where's that balance? And let me just jump back for one thing on Wisconsin.

MR. GREGORY: Mm-hmm.

GOV. GRANHOLM: On -- you know, there are states in this country that have massive deficits that don't have collective bargaining, and there are states that have very low deficits that do have collective bargaining.

REP. FORD: That's a great point.

GOV. GRANHOLM: That is not the issue. The -- if you want to have a discussion about collective bargaining, have that. But this is about deficits. And I can just tell you, as governor of Michigan over the past eight years, I cut more out of state government that -- as a percentage, per capita, than any state in the country. Every single year we had to cut. In fact, I -- by a large percentage. And I did it in partnership with the unions. Our unions gave over $700 million in concessions. I asked them to pay the new employees 20 percent toward their healthcare benefits. They don't even have a pension. They have 401(k)s. They have a defined contribution plan and not a defined benefit plan.

MR. GREGORY: OK. I, I don't want to talk too much about collective bargaining and unions. OK.

GOV. GRANHOLM: I'm just saying...

MR. GREGORY: I got it. Yeah, Ed.

MR. GILLESPIE: All right. Well, let me end with this, which is we're not talking about eliminating collective bargaining, what we're talking about is limiting collective bargaining to wages, not the benefits package...

MR. GREGORY: Right, right.

MR. GILLESPIE: ...and having the union members vote themselves every year whether or not they want to continue that.

MR. GREGORY: Let me, let me continue on this theme about who's kind of winning the, the austerity conversation. The president was pressed during a news conference this week about why not move forward and, and, and stop kicking the can down the road and present in his budget cuts to entitlement programs. This is what he said about the need to work together.

PRES. BARACK OBAMA: This is not a matter of you go first or I go first. This is a matter of everybody having a serious conversation about where we want to go and then ultimately getting in that boat at the same time so it doesn't tip over. And I think that can happen.

MR. GREGORY: The reality is, talking to administration officials, Harold, they want the Republicans to go first. They want them to propose big entitlement cuts so they can, some, frankly, demagogue them come election time. Is that leadership?

REP. FORD: I'm not convincing it's winning -- I'm not convinced it's winning leadership. I'm a believer that a president looks strongest and best in mid-November to the end of December when he brokered a tax deal, an extension of the tax cuts. He was able to broker an extension, or I should say a rewriting of the START treaty. Allowing all Americans, regardless of their sexual orientation, to serve openly in the military, that was leadership on the president's part that allowed that to happen. I think they have to show the same kind of leadership on this front. If not, you run the risk of allowing a conversation that you believe in, hoping that concessions is -- and such, is coming from unions in different states happen, but another conversation around collective bargaining and an assault on unions taking a course and a direction you don't want. If the president leads on reducing spending, particularly entitlement spending, it's not much. You listen to Lindsey and you listen to Scott-- I mean, Dick Durbin, they both have said Social Security ought to be on the table.

MR. GREGORY: Right.

REP. FORD: If the president leads on this front, I happen to believe he will benefit politically. But more important, the country will benefit in the long term. I'm 40. I'm willing to give up my benefits till I'm 70 and even have them means tested after that point because of the blessings that have come my way as an American. And I believe there are more like me. And I believe the president and Republicans would, would find to lighten that.

MR. GREGORY: Well, let me -- let me flip this around, Rick Santelli. Why shouldn't a Democratic administration, this president, say, " Let's see what the Republicans are willing to do." OK? "I went out big on health care and they weren't there. They demagogued me. Why not see what they're willing to propose and see if we can structure a grand bargain, because I haven't had much success in actually working them, if we want to get something done." What's wrong with that approach?

MR. SANTELLI: Well, I think what's wrong with that is this past week we just had the two-year anniversary of the original stimulus package. So there are issues regarding spending that have been here through the entire administration. And I think, at this point, the politics -- and there's always going to be political gamesmanship, especially with such a key election coming up in 2012. But this is a time, as Congressman Ford has said, that whoever owns this argument, the public is going to get it. It's not going to be easy. Pulling a dollar out of anybody's pocket is not going to be something where people are going to be raising their hands to volunteer. And it's -- we're going to get there anyway. I think the president ought to be aggressive and be a true leader and step out on this issue.

MR. GREGORY: All right. We're going to take a break here. We'll come back, talk more about this leadership question on the budget, but also the politics of 2012, deeply impacted by this very debate. More with our roundtable right after this.

MR. GREGORY: We are back with our roundtable. Governor Granholm, we've been talking about the, the big picture, political leadership question. But the pressing issue is the prospect of a government shutdown over spending cuts this year in Congress. Who wins, who loses in this situation?

GOV. GRANHOLM: I think it is a lose/lose. I've been -- I've seen this movie, I've been in it. We...

MR. GREGORY: Right. A couple of times as governor.

GOV. GRANHOLM: Yes. In fact, in 2007. But this is the -- you will be rewarded in this way. You will be in the cellar of American esteem, both sides. It's a pox on all your houses. People at home sit there and go, "What the heck just happened? I sent all these people to Washington to fix things, and they shut it down."

MR. GREGORY: Right.

GOV. GRANHOLM: It is a disaster.

MR. GREGORY: Ed, you've been inside the room.

GOV. GRANHOLM: And I say this to both sides.

MR. GREGORY: You've been inside the room, not for this particular kind of thing. But, you know, you know Speaker Boehner well. You've worked with him when you were in, in the White House. He may want to make a deal, I would think, but he also said, "Hey, you know, don't look at me, I'm just the speaker." He has a pretty restive base here he's got to deal with.

MR. GILLESPIE: Well, a couple things. First of all, they passed their continuing resolution in the House.

MR. GREGORY: Yeah.

MR. GILLESPIE: The only way you don't, you know, the, the House can shut down the government is by not moving forward a continuing resolution, which they have. The Senate, under Democratic leadership, has yet to do so, and they're out all next week. So there's a little bit of chicken being played here by, by Senator Reid.

MR. GREGORY: Yeah.

MR. GILLESPIE: And then the second this is, you know, they talk about "We're going to freeze spending." We're -- they're going to freeze spending after a 24 percent increase in federal discretionary spending. That's like gaining 24 pounds over Christmas and saying "My new year's resolution is I'm going to keep it. I'm not going to lose any of it, I'm not going diet it off. I'm going to keep it right there." That is not what the voters are saying. And the fact is, we talked about economic growth, the most -- the biggest drag on economic growth is this looming debt, and that -- not looming but mounting debt that is causing a problem in the, in the credit markets and is causing a sense amongst voters of uncertainty. And the Republicans in Congress are trying to address it, the administration's not.

MR. GREGORY: It's interesting, Harold, because the president in the State of the Union tried to say, "Look, we need to deal with the debt, but we've also got to win the future. We've got to get the balance right between austerity and investment." But the conversation is really about how much austerity are you going to support? Is he losing ground here?

REP. FORD: No. I think if, in the coming weeks, in the coming days, you don't see a kind of spirit that Governor Granholm just, just suggested that shutting down government is bad for both sides, the president's got to lead on that front. I'd say one other thing. I was in Congress in -- from '96 to and there was a belief that the budget could not be balanced, that the debt was going to continue rising. Every politician would go to the floor and bemoan we're going to have deficits as far as the eye can see. The Congress balanced the budget under -- with a Congress and a president named Clinton that really worked hard to get it done. We started to grow again, and we found ourselves in a position where we were taking in more money than we were spending. So we can get out of this mess. The president's message of winning the future is the right one. But, unfortunately for the president, the politics is around deficit reduction right now.

MR. GREGORY: Yeah, right.

REP. FORD: People want jobs created, without a doubt. And Republicans better be careful because if they focus too much on this and jobs aren't created they will be punished. But right now, at the moment, people want to see government, like themselves, tightening their belt, getting responsible, being held accountable, and doing things that just seem sensible. Social Security is a sensible thing to do. Cutting part of the spending is a sensible thing to do.

MR. GREGORY: Right.

REP. FORD: And hopefully my party recognizes that.

MR. GREGORY: And you're teeing up -- Governor Chris Christie of New Jersey, talk about austerity. He gave a speech here in Washington this week that got rave reviews in part because of his plain language about taking on issues like Social Security. Here's what he said.

GOV. CHRIS CHRISTIE (R-NJ): You're going to have to raise the retirement age for Social Security. Ho, ho! I just said it, and I'm still standing here. I did not vaporize into the carpeting, and I said it.

MR. GREGORY: He didn't vaporize into the carpeting, Rick Santelli. I mean, this is the kind of plain talk that people are responding to. And yet, you just heard from Senator Durbin, you know, they want to take Social Security off the table right now in terms of dealing with that debt reduction.

MR. SANTELLI: Senator Durbin is from my state: 3.7 billion MUNI issuance that they need to bring to the market. They haven't paid vendors. You know, it has come to the crossroads where if we don't start to make the changes that the governor and the congressman know are going to take time, we will have austerity forced on us, and that type of austerity is going to be much messier. There really isn't much opportunity for debate here. We do need action. And even though the interest rates on the federal side haven't moved markedly higher, a lot of the assumptions for these outlier years for the deficit are assuming fairly good behavior on interest rates and a fairly robust economy. And when the Clinton years came forth with all the jobs and a surplus, we were in a much different economic time. We had an industrial computer revolution going on in California, you had the wall fall in the late '80s that freed up an enormous amount of peace dividend money. Our economy is not nearly as aggressive at this time around.

MR. GREGORY: But, Ed Gillespie, look at the politics of this. This was some polling out of New Hampshire, which will be the, the first primary state in 2012 after the Iowa caucuses, and here's how it looks on the GOP side. It's Romney leading there commandingly, and he even looked good at this early juncture head-to-head against President Obama. My question though, Ed, is whether or not Republicans are looking at all this and saying, "Look, we got to own the budget message, yes." But are they worried that Republicans overreach here, which is what, of course, the, the Democrats and, and the White House are counting on?

MR. GILLESPIE: I don't sense that right now, David. I've never seen a political environment, and particularly on the Republican side, but generally as well, where there is a greater risk to be seen as unwilling to cut spending than there is to be cutting spending. I've never seen a dynamic like this like we see right now. And again, that's why I think President Obama's out of touch. I mean, you know, Amtrak loses $1 billion a year. He's proposing $53 for high-speed rail in his budget. We're not losing money fast enough? We got to lose it at a faster rate? It is -- they -- there's a disconnect here that I think is going to cost him in 2012.

MR. GREGORY: OK. All right, I, I got to -- I got to leave, I got to leave it there. Thank you all very much. I wanted to save a little time because before we go we do want to remember NBC newsman and former moderator of MEET THE PRESS, Bill Monroe, who died this week at the age of 90. He played a key role in the history of this program. A guest moderator and panelist, questioning newsmaker guests here in the late 1960s and early '70s, Monroe became the fourth permanent moderator in November of 1975...

Mr. BILL MONROE: Our guest today on MEET THE PRESS...

MR. GREGORY: ...and quickly gained a reputation for asking the tough questions.

MR. MONROE: Is that a proper minimum moral standard dictated by the Bible to apply to candidates?

Can't you have affirmative action without quotas and without preference?

Why would not Iran improve its position before world public opinion if the hostages were untied and they were permitted to be seen by neutral observers?

MR. GREGORY: Over his decade in the moderator's chair, Monroe put those questions to heads of state, political power players, and newsmakers the world over. But it was his 1980 interview with President Jimmy Carter here that had international repercussions.

MR. MONROE: Mr. President, assuming the Soviets do not pull out of Afghanistan anytime soon, do you favor the U.S. participating in the Moscow Olympics. And if not, what are the alternatives?

PRES. JIMMY CARTER: No. Neither I nor the American people would support the sending of an American team to Moscow with Soviet invasion troops in Afghanistan.

MR. GREGORY: Above all, it was his character and commitment to his craft that defined Monroe's career.

MR. MARVIN KALB: Every Sunday with Bill has been a lesson in personal integrity and the highest standards of professional journalism. Good luck, Bill.

MR. MONROE: Thank you, sir.

MR. GREGORY: And we thank him for all his many contributions to this program. Bill Monroe retired from NBC News in 1986. He died peacefully at a nursing home in Maryland on Thursday. He and his family are in our thoughts and prayers. That is all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.