Meet The Press (04/10/2011)

MR. DAVID GREGORY: This Sunday, showdown over spending, but a government shutdown was averted at the 11th hour.

PRES. BARACK OBAMA: This agreement between Democrats and Republicans on behalf of all Americans is on a budget that invests in our future while making the largest annual spending cut in our history.

MR. GREGORY: Still, an embarrassment for all sides in Washington: partisan attacks...

REP. JOHN BOEHNER (R-OH): The president isn't leading. He didn't lead on last year's budget, and he clearly is not leading on this year's budget.

MR. GREGORY: ...while our soldiers in Afghanistan and Iraq had to worry about whether they'd get paid if the government closed.

SEN. JOHN KERRY (D-MA): This is a dangerous moment for our economy and for our country. And, frankly, it's an embarrassing moment for the Congress of the United States.

MR. GREGORY: So what does the final deal look like, and who came out ahead politically? With us, President Obama's senior adviser, David Plouffe. Then, the budget fight isn't over.

REP. PAUL RYAN (R-WI): If we stay on the current path, we are heading toward a debt- fueled economic crisis.

MR. GREGORY: What does the near shutdown mean for negotiations over next year's budget and a growing debt crisis fueled by spending on programs like Medicare and Social Security? Here, for an exclusive interview this morning, the chairman of the House Budget Committee, Congressman Paul Ryan of Wisconsin. Finally, our political roundtable weighs in on how the budget showdown was merely a preview

of the 2012 campaign: spending cuts, the tea party influence, and the fight for independent voters. With us, White House correspondent for The New York Times, Helene Cooper; chairman and CEO of the Special Olympics and contributor to The Washington Post, Tim Shriver; host of CNBC's " Mad Money," Jim Cramer; and NBC's chief White House correspondent and political director, Chuck Todd.

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

MR. GREGORY: Good morning. After signing a temporary order to keep the government up and running, the president made a surprise visit to the Lincoln Memorial Saturday, determined to put the best spin possible on those down-to-the-wire budget negotiations.

PRES. OBAMA: Because Congress was able to settle its differences, that's why this place is open today and everybody's able to enjoy their visit.

MR. GREGORY: The compromise measure, expected to clear Congress and be signed by the president this week, calls for $38.5 billion in cuts for the remaining six months of the fiscal year, and none of those controversial policy demands from conservatives were included. Some Republicans, though, promising to renew a separate measure to cut funding for Planned Parenthood. This fight does foreshadow battles ahead over next year's budget and the debt ceiling. With us this morning, the man who ran the president's 2008 election campaign, and now a senior adviser at the White House and one of the key figures behind his re- election bid, David Plouffe. Welcome back to MEET THE PRESS.

MR. DAVID PLOUFFE: Good to be with you, David.

MR. GREGORY: Does the president feel some responsibility for all that transpired, a near government shutdown?

MR. PLOUFFE: Well, it obviously went up to the wire. But I actually think it was a, a good moment moving forward here. Our leaders in both parties, on behalf of all Americans, showed they could come together, compromise. Compromise, by the way, cannot be a dirty word. It's the way we're going to move forward as a country in divided government. So we, we cut spending, biggest annual spending cut in the history of the country, while still protecting investments in education, in infrastructure and research and development, the things we're going to need to win the future going forward.

MR. GREGORY: But the president can't view what happened and think this is a shining moment for Washington.

MR. PLOUFFE: Well, obviously, things got heated. And the president's approach, as you saw, was to try and encourage all parties to come together, not get engaged in kind of the political spitball fight back and forth. But, listen, we have divided government. It was the first real test of it. I think trust and understanding was built up between the speaker and the president and vice president, the Senate majority leader. So hopefully going forward this can be a model. We're going to have tough disagreements. It's going to be hard to bridge divides. But we have to find common ground or else we're not going to move forward on education, on growing the economy while reducing our deficit.

MR. GREGORY: But our -- the, the top officials in our government shouldn't feel embarrassed at a time of high gas prices, high unemployment, and war that we nearly shut the government down?

MR. PLOUFFE: Well, again, I think if you saw the president, he spoke about it often this week. His message to the American people and to Washington was exactly that. We've got an economy that's healing, but that is still fragile. We've got high gas prices. We've got turmoil around the world. Certainly, we can come together to reach agreement. And that, that's what we did. So, at the end of the day, again, it might have been a little messy getting there, it went up to the wire, but I think it was a very important moment. And it shows -- listen, the president came together with Republicans and Democrats on behalf of the country in December, led an effort to cut taxes, and now we've come together to cut spending. So I think it should give us some confidence moving forward.

MR. GREGORY: How we got to this moment is one that will be debated as well, and some Democrats are already doing that. The president, as he was trying to bring the two sides, came out and spoke this week. And on Wednesday, this is one of the things that he said.

PRES. OBAMA: At a time when you're struggling to pay your bills and meet your responsibilities, the least we can do is meet our responsibilities to produce a budget.

MR. GREGORY: But last year, Mr. Plouffe, when the Democrats ran the entire government, they failed to do just that, what the president said, to put up and pass a budget. Isn't that what got us here?

MR. PLOUFFE: Well, obviously, it would have been much better to have the budget passed last year. And there was a moment it looked like it would in December, it didn't. We got a lot done in December, obviously.

MR. GREGORY: That was, that was failed Democratic leadership, was it not?

MR. PLOUFFE: Well, and we moved forward to this year. And I think the important thing is both parties came together. And again, as the president said Friday night to the nation, these were some tough cuts, cuts in some programs that he thinks work very well and are important for the country. But, in the fiscal situation we're in, everyone's going to have to give. And in order to invest in things like education, in medical research, and infrastructure, in programs like Head Start and college loans, the only way we're going to do that in a fiscal situation is to live within our means. And so that's the president's approach both in this debate and moving forward.

MR. GREGORY: Well, is...

MR. PLOUFFE: Which is we still have to make those critical investments, but we're going to have to reduce the deficit in a significant way.

MR. GREGORY: Well, let's talk a little bit about that, because one of the fights that are still ahead get actually more difficult here. If you were debating tens of billions down to the wire, it gets into hundreds of billions. We have a $14 trillion debt, as you know. Senator Kay Bailey Hutchison said on CNN on Friday, this question of raising the debt ceiling, which will occur either later in the spring or in the summer, becomes crucial. Here's what she said.

SEN. KAY BAILEY HUTCHISON (R-TX): Well, really, the debt ceiling is going to be Armageddon. I mean, that is the one where we have got to see reforms before the debt ceiling is raised.

MR. GREGORY: What is the president prepared to do in terms of reforms to get bipartisan consensus to raise that debt ceiling?

MR. PLOUFFE: Well, first of all, the president's been very clear from the State of the Union address on that we need to come together in this country, people in both parties in Congress, to reduce the deficit. The president will be laying out his approach to long-term deficit reduction later this week. And I think that we have to focus on that. The debt ceiling is something that has to be raised every once in a while. It's something the speaker of the House, John Boehner, has said if we didn't raise it would bring a financial disaster both in this country and around the world. Economist after economist has said it would raise interest rates, it could wreak havoc on the housing market, on the economy, it could be a catastrophic failure for the United States' economy if we didn't raise it. So here's the thing...

MR. GREGORY: Senator, she called it Armageddon, though.

MR. PLOUFFE: Well...

MR. GREGORY: So what, what do you do to prevent that?

MR. PLOUFFE: Well, yes.

MR. GREGORY: And not a lot of confidence, given how this all went.

MR. PLOUFFE: Well, the speaker of the House himself said we need to act like adults in this. Mitch McConnell, Harry Reid, Eric Cantor, John Boehner, all the leaders have said we have to raise the debt limit, so we're going to. But in that process we should be able to reduce the deficit. So we should not be playing brinksmanship with the full faith in credit of the United States of America. So, of course, we're going to do that. But what we need to do at the same time, in the months ahead, is we've got to decide -- and it's going to be a tough fight-- how are we going to reduce the deficit, get on a more sustainable fiscal trajectory, but in a way that doesn't compromise our ability to grow the economy or create jobs?

MR. GREGORY: All right, I want to talk about what you just said. The president this week is going to lay out his deficit reduction path. That's new news this morning...

MR. PLOUFFE: Yes, sir.

MR. GREGORY: ... and I want to break that down a little bit. Back in November of last year, the president set up a debt commission, and he said a lot of things to the American people,

including this: I set up this commission precisely because I'm prepared to make some tough decisions. I can't make them alone. I'm going to need Congress to work with me. If we are concerned about debt and deficits, then we're going to have to take actions that are difficult, and we're going to have to tell the truth to the American people.

PRES. OBAMA: He said that, and yet the debt commission came back with its recommendations and the president failed to act on them. Republicans have, however. The Path to Prosperity is Congressman Paul Ryan's budget plan. He'll be on the program, as you know, in just a few moments. Will this be a basis for what the president proposes to the American people about how to cut the deficit?

MR. GREGORY: Well, let me say what the president has done and, and will say. His budget he just put out for next year would reduce $1 trillion over the next 10 years. It would bring domestic spending to the lowest level since President Eisenhower. Many of the debt commission's and deficit commission's suggestions were in the president's budget. For instance, freezing the pay of federal workers for a period of time, fundamental reform of the government. We obviously, then, have to do more, and that's what the president's going to lay out. Now, the Republican congressional plan that came out this week, you know, they put some specific ideas out. They should be credited for that. There's a couple in there we agree with. They, for instance, preserved the savings from the healthcare reform in Medicare. By the way, the healthcare reform is going to save a trillion dollars in the deficit over the next two years. The president led on that, very important starting point. But the Congressional Republican plan, for instance, would -- projections show -- would give the average millionaire a $200,000 tax cut, while asking more of the middle class. The average senior down the road would pay $6,000 more for health care. It cuts our energy investments at a time we're dealing with high gas prices by 70 percent. So we're obviously not going to sign on with that approach. But what's clear is, like on any issue in Washington, we have divided government. So we're going to have to bring leaders together and figure out where we can find compromise.

MR. PLOUFFE: So...

MR. GREGORY: If I were an American -- the good thing is, leaders in both parties now say it's very important to reduce the deficit and the debt.

MR. PLOUFFE: Will the president take on entitlements when he speaks this week? Will he lay out a plan to reform entitlements? Medicare, Social Security, the biggest drivers of our debt.

MR. GREGORY: Well, I'll let the president speak for himself later in the week, but I will say this...

MR. PLOUFFE: Why is this a secret? We know that these are huge issues.

MR. GREGORY: Well, he has...

MR. PLOUFFE: If you're serious about debt -- tackling the debt, don't you have to do that?

MR. GREGORY: Well, in terms of specifics, let me say this, he has said -- he said this in the State of the Union, even though his healthcare reform plan which, by the way, many Congressional Republicans want to repeal, so they'll have to explain how they're going to make up the trillion dollars in deficit reduction. So we've had a lot of savings in health care, we have to do more. So you're going to have to look at Medicare and Medicaid and see what kind of savings you can get. First, squeezing them out of the system before you squeeze seniors. Secondly, on Social Security, what he said is that is not a driver right now of significant costs, but in the process of sitting down and talking about our spending and our programs, if there can be a discussion about how to strengthen Social Security in the future, he's eager to have that discussion.

MR. PLOUFFE: Is this plan, Congressman Ryan's plan, dead on arrival?

MR. GREGORY: Well, listen, certainly the president is not going to support a lot of what's in that plan. Again...

MR. PLOUFFE: Any chance that this gets passed?

MR. GREGORY: It may pass the House. It's not going to become law. I -- and I don't think the American people are going to sign up for something that puts most of the burden on the middle class, people trying to go to college, on senior citizens, while not just asking nothing of the wealthy, giving them at least a $200,000 tax cut. So that's a choice you're making.

MR. PLOUFFE: You -- but you bring up taxes, though.

MR. GREGORY: Yeah.

MR. PLOUFFE: Is -- in the president's plan, as he envisions tackling the deficit, do taxes have to go up? Does that have to be part of this equation across the board?

MR. GREGORY: Well, this is part of his budget for next year. He has said he believes taxes on the higher income, people over $250,000, should eventually go up.

MR. PLOUFFE: Can you tackle the deficit without raising taxes on even the middle class?

MR. GREGORY: I think the president's goal, and he's been clear about this, is to protect the middle class as we move forward here. So people like him, as he'll say, who've been very fortunate in life, have the ability to pay a little bit more. Now, under the Republican Congressional plan, people over $250,000 get over a trillion in tax relief. So this is the important thing, you're making a choice. You're asking seniors and the middle class to pay more. You wouldn't be having to do that if you weren't giving the very, very wealthiest in this country just enormous tax relief.

MR. PLOUFFE: So no -- still, no new taxes on the middle class. That's a re- election pledge.

MR. GREGORY: Well, the president's been very clear. And first of all, I'd say, in his term in office, he's cut taxes for the middle class over and over again. Very important. Just at the end of last year, the parties came together to extend tax cuts for the middle class. Also passed a payroll tax cut, giving the average family thousands of dollars this year, which has been a huge driver in terms of helping the economy.

MR. PLOUFFE: Mm-hmm.

MR. GREGORY: But also as families are dealing with higher gas and food prices, the ability to shoulder those a little bit easier.

MR. PLOUFFE: I want to follow and close here on another pledge that the president made in the course of the campaign, having to do with the prison down at Guantanamo Bay, Cuba. This is what he said in the course of the campaign.

MR. GREGORY: As president, I will close Guantanamo, reject the Military Commission Act, and adhere to the Geneva Conventions.

PRES. BARACK OBAMA: He has not closed Guantanamo, one of his first promises as president. In fact, just this week, the administration decided that Khalid Sheikh Mohammed, mastermind of 9/11, will be tried in a military tribunal at Guantanamo Bay. Was that promise a fundamental misreading of the practicalities and all of the issues, very difficult issues involved in shutting down that prison?

MR. GREGORY: No. And I think the president has tried to follow through, and with great success in most areas, on the commitments he made to the American people. In this particular case -- and listen, the president's been clear and we've had some success with civilian trials, with terrorism suspects. But he also said there is a place for military commissions. It was clear-- here we are almost 10 years from 911, with K.S.M., that he would either sort of be in limbo forever or we could finally get some justice for the American people and the victims. And so that was the decision that the attorney general made and the president concurred with.

MR. PLOUFFE: But he misread his ability to shut down Guantanamo in a time of war against terrorists.

MR. GREGORY: Well, I think he's tried very hard to do it, as you know. There's obviously steep resistance in the Congress. And what the president has to do is make a decision. So you could either have K.S.M. for -- to be in limbo forever, have no final justice for the victims of 9/11, or you can move forward and try to get that through a military commission and that's a decision the attorney general made and the president agreed with it.

MR. PLOUFFE: All right. We'll leave it there. Mr. Plouffe, thank you very much.

MR. GREGORY: Thank you, David.

MR. PLOUFFE: We turn now to the other side of the aisle, the chairman of the House Budget Committee, Congressman Paul Ryan of Wisconsin. Welcome to MEET THE PRESS.

MR. GREGORY: Thanks for having me. Good to be here.

REP. RYAN: I want to start with you where I started with Mr. Plouffe. How much responsibility do Republicans take for this spectacle of a near shutdown of the government? And shouldn't you all be embarrassed?

MR. GREGORY: Well, we're here because the Democrats didn't pass a budget last year. I mean, for the first time since 1974, the House didn't even bother to try passing a budget last year. So that's why we're here. Now, I feel like we had a pretty good outcome. We represented one-third of the negotiators, but we got two-thirds of the spending cuts we were asking for. This is really still a drop in the bucket. We want to move from talking about saving billions of dollars to going on to saving trillions of dollars.

REP. RYAN: And that's, indeed, what's in the substance of your budget.

MR. GREGORY: The budget. That's right.

REP. RYAN: But what about the debt ceiling fight? The front page of the paper this morning, that's the next big fight ahead. You heard Senator Hutchinson say that's going to be Armageddon. What has to happen for you and others to be satisfied that, OK, we can raise the debt ceiling?

MR. GREGORY: Well, I'm pleased with what David Plouffe just said because I think that was a policy change. Tim Geithner's always been saying he wants just a stand-alone debt ceiling increase. We've never been in favor of that. Now he's saying things can go as a part of this. So we believe, accompanying any debt ceiling, you need real fiscal reforms, real spending cuts, and real spending controls going forward so we can deal with the debt in the future. The debt ceiling is hitting 14 trillion in probably the end of May because of past spending. We want to make sure that future spending doesn't give us this problem in the future.

REP. RYAN: But will there be specific reforms or cuts that have to be in place?

MR. GREGORY: Yes, I think so. I think that is what we're looking for.

REP. RYAN: Like?

MR. GREGORY: Well, we -- I don't want to get into our negotiations, but real spending cuts and real spending controls, real caps on spending going forward so we can take pressure off the debt and get this country on the right fiscal path.

REP. RYAN: But what's to think that we're not going to be right back to where we were this week when the next bigger fight over bigger numbers comes to pass?

MR. GREGORY: I'm not saying we're not going to be. I think there will be some kind of negotiations. And, yes, it probably will go up to some sort of a deadline. The debt ceiling deadline is a moving deadline. It's not a date certain deadline like the government shutdown. Our strategy is not to default. Our strategy is to get spending under control.

REP. RYAN: Let's talk about -- I mean, this is the political environment that you're operating in as you produce the Path to Prosperity...

MR. GREGORY: Mm-hmm.

REP. RYAN: ...your budget vision for next year.

MR. GREGORY: Right.

REP. RYAN: And it was very interesting. A Republican adviser to President Bush and to John McCain, Mark McKinnon, was quoted in Time magazine saying the following about your budget outline, and I want to put it up on the screen. "[It] will completely transform the fiscal debate." This is Mark McKinnon. "It will either be the brilliant blaze that illuminates Republican courage or a roaring fire that immolates the party in a spectacular political suicide." How's that for choices?

MR. GREGORY: Yeah. I've heard this before.

REP. RYAN: Which is it?

MR. GREGORY: I've heard this before. Look, it really doesn't matter to me. What matters is we try to fix the country's problems. Look, let me just show you. This is the debt that the CBO says we're going to have. We're giving our children a lower standard of living. Our plan pays the debt off. So we really believe we need to own up to the fact that the country is on an unsustainable path and we've got to do something to fix this.

REP. RYAN: But you're the budget chairman, you have your charts, I understand. But you also...

MR. GREGORY: I've got many more if you want me to...

REP. RYAN: I know you do. But I know you also have a reality. You just heard David Plouffe say...

MR. GREGORY: Right.

REP. RYAN: ...this isn't going to pass.

MR. GREGORY: Yeah.

REP. RYAN: This might pass the House, it's not going to pass the Senate. It's certainly not going to become law.

MR. GREGORY: Mm-hmm.

REP. RYAN: Is this more of a campaign document for 2012?

MR. GREGORY: No, not at all. We need a clean break from the politics of the past. Both parties do this to each other. Both parties use hyper rhetoric, both parties use all of this demagoguery. And what happens? We have political paralysis and we don't fix the country's problems, but we have a debt crisis staring us in the face.

REP. RYAN: And let...

MR. GREGORY: And that's what's got to get fixed.

REP. RYAN: Well, let's -- and let's talk about some of the details and then, and then go through some of the items that are in your plan, just to give our viewers some context. We'll put it up on the screen. You cut, as part of your proposal, $6.2 trillion over 10 years. With regard to Medicare, starting in 2022, would no longer be an open-ended entitlement, which we'll talk about. Medicaid would also be changed. It would become a block grant to states, 750 billion cut over 10 years. Taxes. The Bush tax cuts would be made permanent. Something you should know the president opposes. And for individuals and businesses, the top rate would be cut to 25 percent from 35 percent. Now you can expect that Democrats would come out and oppose this.

MR. GREGORY: Sure.

REP. RYAN: And to your mind, even demagogue it. But here was a response, Erskine Bowles and Alan Simpson, the co-chairs of the bipartisan Debt Commission...

MR. GREGORY: Friends of mine.

REP. RYAN: ...and this is what they said in part. Let me put it on the screen. "The plan," your plan, "largely exempts defense spending from reductions and would not apply any of the savings from eliminating or reducing tax expenditures as part of tax reform to deficit reduction. As a result, [it] relies on much larger reductions in domestic discretionary spending than does the Commission proposal, while also calling for savings in some safety net programs cuts which would place a disproportionately adverse effect on certain disadvantaged populations." They're making the same point that the White House, which is that this is on the backs of the poor and the middle class. This is not a shared sacrifice document.

MR. GREGORY: Actually, if you read that earlier part of their statement, they said it's an honest, serious, incredible proposal. A couple of things: We basically take the thrust of the -- I was on the fiscal commission, we agree...

REP. RYAN: You voted against it, its recommendations.

MR. GREGORY: I did vote against it because it didn't do anything about healthcare costs, which is the big driver of our debt.

REP. RYAN: Mm-hmm.

MR. GREGORY: But we also -- our tax reform plan goes in the same direction, which is get rid of all those special interest loopholes so you can lower tax rates. It's the higher income earners who use those special interest loopholes. Get rid of the loopholes, lower the rates, make our economy more competitive. Flatter, fairer, simpler tax system. With respect to the safety net, our goal is to repair the safety net, make it more sustainable. Safety net spending grows every year under this budget. Medicare, Medicaid spending grows every year under this budget. What we're trying to do here is save Medicare and Medicaid so that they're sustainable. But also, the safety net is tearing apart at the seams. We want to fix the safety net.

REP. RYAN: Right. I -- and I want to break that down. I want to break that down a little bit more. But let me just stop you on the tax issue.

MR. GREGORY: Mm-hmm.

REP. RYAN: Do taxes, at some point, have to be raised if you're really getting -- going to get into the realm of asking something of the American people, shared sacrifice, not just helping upper earners?

MR. GREGORY: Shared sacrifice, meaning sort of indiscriminate cuts across the board, is what you do when you're in a debt crisis. What we're trying to do is pre-empt a debt crisis. So there's

REP. RYAN: spending cuts and economic growth. The problem with a bunch of tax increases -- the president just raised taxes$800 billion, he's calling for new $1.5 trillion in tax increases -- you slow down economic growth. We want job creation, economic growth, and that's why if you go down the tax increase path you're sacrificing the economy; and especially when the fact that the problem we have is spending, not taxes. Spending's the root cause of our deficit and debts. Every time we run a big deficit means more tax increases.

two things we're trying to keep our eye on the ball on: But in an economic downturn you can't cut your way to a balanced budget. How do you do that?

MR. GREGORY: You -- we don't -- look, we take $6.2 trillion of spending out of the president's baseline, meaning we bring spending down toward its historic levels. The president is proposing to keep government as large as it's ever been forever. We don't think the answer to prosperity is borrowing and spending more money, we got to get our spending under control because that's the root cause of our problem. And yes, if you get deficit reduction and deficit-- and the debt under control, that's going to help the economy today.

REP. RYAN: But still no tax cuts in the future even?

MR. GREGORY: We're talking about tax reform.

REP. RYAN: Tax -- I'm sorry, tax, tax hikes in the future?

MR. GREGORY: We're -- no, we're talking about tax reform. Look, we have to recognize the fact that we're in global competition. We're competing against China and India. And when we tax our job creators more than they tax theirs, we lose, they win, and we don't want that to happen.

REP. RYAN: All right, let me talk more specifically about Medicare and try to provide a little bit more clarity on this. I'm going to put something up that the Los Angeles Times reported on Wednesday. And here's the headline, " GOP's budget shifts health burden; The plan reduces the federal government's role in Medicaid and Medicare in an effort to trim $5.8

MR. GREGORY: " The GOP proposal would phase out direct payments to doctors and hospitals under Medicare, scale back the Medicaid program for the poor and the disabled, throw out government insurance subsidies that the new healthcare law is to make available to millions of Americans starting in 2014. That would force seniors to pay more for health care and would likely make states cut back their Medicaid programs." That's according to government auditors, the Congressional Budget Office. Is that not a reality?

trillion." It goes on to say the following: I'd just say a few things. Number one, Medicaid's broken, and throwing more money in a broken system doesn't work. We've gotten dozens of letters from governors saying, "Give us the freedom to fix Medicaid our own way in our own states." And we're giving them that freedom, and Medicaid grows at a more sustainable rate. Yes, we do repeal the president's healthcare law because we have just profound disagreements with it. Four facts on Medicare: Fact number one, when Medicare was created, you know, men were living in their 60s, women were living in their 70s, now men are living in their 80s and -- or in their 70s and women are living in their 90s. We had -- baby boomers were in their teens and there were babies when this thing started. Now they're doubling the size of retirement we have. The price controls in Medicare today are causing doctors to stop seeing patients and Medicare is the biggest contributor to skyrocketing healthcare costs. Price controls, which is the current plan in Medicare, doesn't work. What we think works to bring down price costs is competition. And we want to give seniors the power, the tools, through competition, to bring down costs.

REP. RYAN: But there's a lot of talk about giving them the power and the tools. A couple of points on that. First of all, didn't liberals win this argument when you tried -- when Republicans tried to overhaul Social Security through private accounts, that look at the vagaries of the markets and what would have happened to seniors then. Here...

MR. GREGORY: Very different...

REP. RYAN: Well...

MR. GREGORY: ...comparison. I think that's kind of a non sequitor.

REP. RYAN: Well, let, let, let -- let's accept it for the moment and then you can take it on.

MR. GREGORY: Yeah.

REP. RYAN: Because I'm not sure it is a non sequitor because it's talking about the private marketplace. And, in this case, the healthcare industry is somehow...

MR. GREGORY: Sure.

REP. RYAN: ...leaving seniors in the hands of the private healthcare market with a defined benefit. You're changing Medicare as we know it. Why, why don't you agree...

MR. GREGORY: Right.

REP. RYAN: ...with government auditors who say the prices are going to go up for seniors?

MR. GREGORY: Listen to what government auditors are also saying, the biggest threat to Medicare is the status quo. Medicare is going bankrupt in nine years, according to the Congressional Budget Office. So what are we doing? We're preserving and protecting it. No change occurs to Medicare for anybody who's on Medicare or 10 years away from retiring. And, for future generations, what we are proposing is a personalized Medicare, a Medicare system that works exactly like the health care I have as a member of Congress and federal employees have. It would look like the prescription drug benefit or Medicare Advantage.

REP. RYAN: Mm-hmm.

MR. GREGORY: So we already have these kinds of ideas in practice. I mean, prescription drug benefit came in 40 percent below cost projections because it harnessed the power of choice and competition. We want to have comprehensive Medicare plans available to future seniors that they can pick from and have these plans compete against each other for their benefit. It works with federal employees, it works with the prescription drug benefit, and more to the point, it saves Medicare.

REP. RYAN: But let me ask you this, is tax reform more doable, say, next year than entitlement reform in a -- in an election year?

MR. GREGORY: You know, it's a good question. I don't really know because the president punted on these issues. He gave us a budget that didn't deal with any of the drivers of our debt. It doubles the debt in the -- in his first term, triples it at the end of his budget. Corporate tax reform, I think, from just -- I'm a member of the Ways and Means Committee as well -- that is an area where I think everybody agrees it's hurting job creation. And I think there's a decent chance -- the tax reforms we have here are along the lines of the fiscal commission reforms, so that is one area where I'd still hold out some hope. I also think Social Security reform...

REP. RYAN: Right.

MR. GREGORY: ...hopefully is an area where we might have a shot at a bipartisan agreement this summer.

REP. RYAN: The -- I think the bigger issue for a lot of people -- look what's happened this past week.

MR. GREGORY: Yeah.

REP. RYAN: What do the American people want? They want more compromise between the two sides.

MR. GREGORY: That's right.

REP. RYAN: And if you, if you look at this budget, you're getting a lot of plaudits for being bold and for being courageous, but this is also an ideological document when it comes to taxes, when it comes to not going very far on cutting defense spending beyond what Secretary Gates has proposed. How about -- you want to privatize Fannie Mae and Freddie Mac, the mortgage giants, when there is no market other than those two for, for mortgages right now.

MR. GREGORY: That's one of the options the Treasury Department published as something they would consider doing.

REP. RYAN: But the point is that this -- don't, don't the American people want more compromise than is...

MR. GREGORY: Right.

REP. RYAN: ...embedded in this document?

MR. GREGORY: So they don't want us yelling at each other, they want a clean break from the politics of the past, and they want us getting on to a fact-based conversation about how to fix this country's problems. There's four things we're trying to do with this budget: Get the economy growing; get people back to work; save our Social Security, Medicare, our retirement programs for this generation and future generations; repair the social safety net so that it works, not to encourage people to go on welfare but to get back on their feet; and pay off this debt. This plan using CBO numbers gets the debt paid off so our children -- you and I are the same age with the same age of children -- we want to give our children a debt- free nation. That's what this plan does. I think that's what the country wants, they want growth, they want a debt- free nation, they want government to begin living within its means and stop spending money we don't have.

REP. RYAN: The problem that you've always had is that Republicans love to talk about you as a smart guy with really good ideas, but they don't actually support you.

MR. GREGORY: Yeah.

REP. RYAN: You had 14 co-sponsors the last time you tried this.

MR. GREGORY: That's up from eight the session before.

REP. RYAN: Well, right.

MR. GREGORY: Yeah.

REP. RYAN: Congressman Pence is, is saying -- a, a key member in the caucus -- he'll probably not vote for this compromise. Who's with you?

MR. GREGORY: You're, you're talking about the CR.

REP. RYAN: In Congress and, and, and outside.

MR. GREGORY: We will find out on Friday. This budget comes to the floor Thursday and Friday.

REP. RYAN: Mm-hmm.

MR. GREGORY: I think what Mike Pence is talking about...

REP. RYAN: He's talking about the current, the current...

MR. GREGORY: ...is probably the continuing resolution...

REP. RYAN: OK.

MR. GREGORY: Yeah, the, the deal that Boehner got with, with the president. This budget we had unanimous Republican vote in the Budget Committee just this week. This will be on the floor Thursday and Friday, and I expect we will pass this from the Republican caucus on Friday.

REP. RYAN: What about members who are running for the presidency? Who's with you on this? Will this be something that they carry forward?

MR. GREGORY: Well, you know, I don't really pay attention to all that. Honestly, I'm busy trying to write a budget.

REP. RYAN: Right.

MR. GREGORY: But I've, I've heard...

REP. RYAN: But you can't operate in a political vacuum...

MR. GREGORY: Sure, sure, sure. It's...

REP. RYAN: ...if you want it to become law.

MR. GREGORY: But I've heard that all of our presidential candidates have been extremely supportive of it, have put out great statements in support of this.

REP. RYAN: All right. Chairman Ryan, we'll keep tabs on it.

MR. GREGORY: Thanks, David.

REP. RYAN: Thank you very much for being here. Appreciate it. Coming up, the government shutdown threat was just the beginning, more tough issues ahead on spending, including next year's budget and a vote to raise the debt ceiling. All of this against the backdrop of 2012, as the tea party is clamoring for change and President Obama gears up for his re- election bid. What does the political landscape look like? We'll analyze it all with our

MR. GREGORY: The New York Times' Helene Cooper, chairman and CEO of the Special Olympics Tim Shriver, CNBC's Jim Cramer, and NBC's Chuck Todd.

political roundtable: Coming up, what impact will these spending showdowns have on the 2012 campaign? My roundtable is here: Chuck Todd, Helene Cooper, Tim Shriver and Jim Cramer. They're coming up right after this brief commercial break.

MR. GREGORY: We're back, joined now by our roundtable: White House correspondent for The New York Times, Helene Cooper; NBC's chief White House correspondent and political director, Chuck Todd; host of CNBC's " Mad Money," the mild-mannered Jim Cramer; and chairman and CEO of the Special Olympics and contributor to The Washington Post, Tim Shriver. Welcome to all of you. Well, here was the headline Saturday morning in The Washington Post,

MR. GREGORY: "Bitter Fight Makes Both Sides -- and Washington Itself -- Look Bad." You cannot come away from this week and not think this was a low moment for our policymakers and our politicians.

Chuck Todd: And, and they were arguing over -- at one point it was .83 percent of the federal budget, so less than 1 percent. And then at the end, that $300 million provision about Planned Parenthood, I mean, you're arguing over a tenth of a percent inside the federal budget.

MR. CHUCK TODD: Mm-hmm.

MR. GREGORY: So it did seem silly at the end, especially when it wasn't money separating them, it was the culture wars of the last 35 years separating them, almost bringing us to, to this brink. So no, it wasn't -- it was a low moment for much of the week. What's been amazing is that in the last 48 hours how both sides -- it's one of those rare occasions, both sides want to declare some victory here in a way that we hadn't seen that before.

MR. TODD: Yeah.

MR. GREGORY: And they're each praising each other. Look at David Plouffe talking about there's real trust here. That's not true. There is real distrust after this process.

MR. TODD: The well has been poisoned. I mean, you, you chronicled it this morning in the Times, Helene. There were some tough fights in the course of this. Nobody can be happy or really claim victory when it went so close to a shutdown.

MR. GREGORY: That's absolutely true. And even though, you know, you see both of them -- you see President Obama and Congressman Boehner sitting there and saying -- standing up and declaring victory, the reality is this was very, very close. And even up until 10:30 at night we had aides at the White House-- they'd sequestered a bunch of reporters, some photographers and cameramen from 4:00 in the afternoon right in the East Room next to the Blue Room...

MS. HELENE COOPER: Right.

MR. TODD: ...where Obama was going to make his speech, and they wanted the -- him to stand in front of the window with the Washington monument in the back to declare that it would be open. But for six hours these people -- these press people sat there, not allowed to tell anybody where they were or anything like that...

MS. COOPER: Right.

MR. GREGORY: ...while President Obama's aides fluttered about, not knowing whether they had a deal or not.

MS. COOPER: Well...

MR. GREGORY: When it gets that close to the wire, that's, that's pretty scary.

MS. COOPER: Well, you talk about that moment, Tim Shriver. So this was the moment. The president finally does speak after all those hours, and, and he, he makes a presentation about a couple of things. One, that cutting spending is something that has to happen. But when it comes to the showdown, he made another point.

MR. GREGORY: Behind me through the window you can see the Washington Monument, visited each year by hundreds of thousands from around the world. Tomorrow, I'm pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business.

PRES. OBAMA: The message was clear. Here he was to save the day, that it was President Obama-- and he went to the Lincoln Memorial on Saturday -- that he was able to rise above the fray. That's the image they want Americans to see.

MR. GREGORY: Well, I think the president appears to be a mediator, and I think he, he rightfully gets some credit for averting the show -- shutdown. But I think on the other hand, most of this is lost on average Americans. I don't think most Americans know what they fought over. I don't think most Americans understand the implications of this discussion. I think most Americans are thinking about things far from whether or not the government's going to shut down, frankly. Yes, they want their parks open. But their, their parks are important to them because for 100 years the country believed in the land and the earth and preserving space for the public good. That's important to Americans. They don't see the big picture here. They're left wanting, I think, by this discussion. Happy that it's over, compromise is great. Did they see unity? Did they see direction? Did they see a call to greatness? I think we're all left a little hungry by this discussion.

MR. TIM SHRIVER: Well, and, and, Jim Cramer, so you, you follow the markets and the economy closely. What they still see is very high unemployment and a very uncertain path for the economy.

MR. GREGORY: I bring good news on the employment front. I think it is rapidly getting better. And I think that is going to go down to the president's benefit, without a doubt. We did dodge a bullet here. We had gold skyrocketing going into the -- Friday, oil climbing. These could both reverse. Interest rates have been going up, too, because the -- we -- what we are, it is a moment where people have very little trust over our government overseas, and we need their money. But jobs are getting better. Jobs are getting better.

MR. JIM CRAMER: But when you look at something like this, you look at an inability to agree on matters of spending, a sense of certainty out of government, that can't bode well for how the markets, at least, view our debt situation, our housing situation.

MR. GREGORY: Well, there's no doubt about it that we made jokes about the idea, "What is Armageddon?" But Armageddon just means that perhaps we have a situation like Portugal, or like in Ireland, like Greece, England. All -- France. All these countries cut back big because they fear the International Monetary Fund. They fear the rating agencies for their own debt. We have to have that fear because we're off course vs. the others.

MR. CRAMER: What about conservatives, Chuck? You heard, you heard Chairman Ryan say, "Look, we came out pretty well on this." What is true is that Republicans are driving the debate.

MR. GREGORY: A hundred percent, yeah.

MR. TODD: Cutting spending, cutting the deficit is what the president now is forced to talk about.

MR. GREGORY: It wasn't until the last 24 hours of this showdown did the Democrats make a policy argument. And they were simply making a policy argument because the women senators in the Democratic Senate were drawing a line and saying, "Don't go here on Planned Parenthood. Don't throw this under the bus. You're throwing everything else under the bus." Because you're right, Boehner, essentially using the Planned Parenthood rider -- and my apologies for using rider, the...

MR. TODD: Yeah.

MR. GREGORY: But using this Planned Parenthood amendment, this idea of defunding it, as a way to bring the Democrats and the White House from essentially zero to $38.5 billion in extra cuts. And you're right, the conversation wasn't policy. This isn't -- you know, Bill Clinton in 1995, in '6, was able to turn this into Medicare, Medicaid, environment and education. They're trying to have that conversation, but they're not. And I, and I saw today, I thought it was interesting and telling, and in, and in, and in essence a give to the Republicans when David Plouffe said, "We're all committed to reducing the deficit. We're all committed to reducing the debt."

MR. TODD: He made news that the president's going to talk about it this week, to lay out a plan for the deficit.

MR. GREGORY: But that is on their turf.

MR. TODD: Yeah.

MR. GREGORY: Now, it tells you where they think independent voters are, and that tell -- that's all they care about right now.

MR. TODD: But for, for the table here there's a bigger issue. I'll start with you, Tim. What we see in this fight, what is coming on the debt ceiling fight, and then, of course, the budget for next year, the conservatives have a challenge. Speaker Boehner's got a challenge. He has got a tea party caucus that is made up of folks who don't believe their job to come here is to legislate, it is not to compromise, it is to stick to some pure ideals that they got elected for. That is not the point of Congress, is it?

MR. GREGORY: Well, I think it's not the point, but I think people respect the idea that these people have strong beliefs. I think there's a sense in the country that standing up for what you believe in, that's always been a part of the American identity. Standing up for what you believe in and being willing to lose. I wonder what the Democrats would say they're willing to lose for in this coming election. I think these tea party folks are making a very strong point. "We're willing to lose over this. We're willing to lose over this fight." The problem, I think, most Americans find is that they're not clear on what those people are willing to build the country to do. There -- they understand cutting. They understand fiscal responsibility. I think everybody does. But people -- Americans are hungry for greatness, too, you know. Americans see what's going on in the Middle East, and they say, "We're -- we should be a role model for these countries. We should be the sort of beacon for what people believe democracy should be. We don't want to be just the country that talks endlessly about being broke and needing to destroy the fabric, the social fabric. We want to be the country that talks about what we want to do for the next generation of children, not just to relieve them of debt but to inspire them to believe that this is a great country again."

MR. SHRIVER: And yet, even some of those ideals, if, if -- depending upon your point of view, if you think somebody like a Chairman Ryan embodies that by what he's talking about on the budget, is tempered by a political reality. Charlie Cook writes about it in his column in the National Journal on Saturday. I'll put a portion of it up on the screen. "[I]t's a little short of suicidal to drop a Medicare reform package even a voucher plan that would be optional for those currently older than 55 into tough budget negotiations stymied over Republican demands for deep spending cuts. Democrats have some experience with older voters going ballistic, even with changes that wouldn't affect them. "For many seniors, doing anything to Medicare that can't be portrayed as an increase is essentially a cut, and they will fight it to their last breath. From a political standpoint, Medicare reform is very dangerous territory to go in. House Republicans are not just pushing the envelope they are soaking it with lighter fluid and waving a match at it."

MR. GREGORY: Yeah. Look. I think the president came out very much above this week, above the fray.

MR. CRAMER: Mm-hmm.

MR. GREGORY: I think he can do it again. I think he knows and I think Ben Bernanke is telling him, "Listen," the Fed Chairman, "you'd better get this stuff together because rates are going to start going up rather dramatically once we're done buying bonds, which is going to be in July, August." The president knows that this has to be solved within the next 12 months or it is going to hurt his re- election because interest rates are going to go up dramatically precisely because of Medicare. Precisely.

MR. CRAMER: What, what about this entitlement fight that they're starting on the Republican side?

MR. GREGORY: I, I think President Obama's making a calculus right now that he -- traditionally, presidents vs. Congress, whenever they go head to head, the president usually looks better. Throughout the past week, President Obama, I mean, on Friday morning he called his aides into the Oval Office and said this is the same time that Harry Reid was out there saying, "They're throwing women under the bus." And he said, "Be quiet. Don't say that much." When he went out during the week, whenever he came out, you know, after these budget sessions with Boehner and Reid, he -- you know, he refrained from the out-and-out political attacks, and he, he pulled back. He was trying very much to appear above the, above the fray. It's going to be different when you go after -- when you, when you start the entitlement fights. But I think for now, you know, Obama definitely did the political calculus that he has to appear above it all, presidential.

MS. COOPER: All right. We'll take a break here. I want to come back with Chuck on that, on the politics of this budget fight. Plus, our political unit's battleground map for 2012. Right -- more with our panel when we come back after this.

MR. GREGORY: We're back with our roundtable. Let's talk 2012 politics. Our political director, Chuck Todd, first of all, the budget fight. Congressman Ryan's plan, you heard David Plouffe today, not a shared sacrifice document, and on and on. How are they going to, how are they going to deal with it?

MR. GREGORY: Oh, they, look, the, the Democrats, the White House, is licking their chops about it. They're basically saying this is great. They can't believe Pawlenty and Romney and all the guys running for president have signed onto it. They say, whoever one of them is the nominee, they own it and they say good luck carrying...

MR. TODD: Mitt Romney said some good things about it.

MR. GREGORY: Good luck carrying the state of Florida with that. But one thing that I think we, we wanted to quickly bring up is what we saw Boehner have to do is a preview. If you're running for president, that's a preview of this push and pull you're going to have to do, which is you're going to have to appease the tea party, but be careful becoming them. And that's going to be this challenge, right? Tim Pawlenty and Mitt Romney want to appease them, have them in the tent. But if you alienate them too much, they'll throw you overboard, which was the fear Boehner had the whole time. So it's an interesting preview of the Republican primary process and how that's going to work going forward.

MR. TODD: So let's look at our -- your, I should say...

MR. GREGORY: Our. NBC News.

MR. TODD: Our battleground map here for 2012.

MR. GREGORY: That's right. We all own it.

MR. TODD: We're all in this together.

MR. GREGORY: Yeah.

MR. TODD: So here it is. In yellow are those toss-up states. What does the president do to hang onto these states?

MR. GREGORY: Well, look, he's -- it is -- there's sort of -- I would divide them up, you see there, they're in groupings of -- there's 10 of them, but I would divide them in groupings of three of the southern ones, the new south, Florida, Virginia and North Carolina.

MR. TODD: Mm-hmm.

MR. GREGORY: If that's what's being battled on in October, it's over. The President's won re- election. You have the Midwestern states, Iowa, Wisconsin and Ohio. If that's the Ohio-- the October battleground, Republicans have a good shot at winning. And then you have those three Western states that all have one thing in common, this rising Hispanic population. And that is, that is sort of the trump card here for the president. If Republicans don't get their act together with Hispanics and those states aren't in play in October 2012, they've got serious problems too. So that's sort of the, you know, the geographical way of breaking it down. The economy is driving everything in those middle three states. President lost huge ground in 2010 there. He's trying to get it back.

MR. TODD: And, Tim, part of the issue here is you have the president, in effect, making an argument, saying, "Look, I'm for cutting the budget. I'm for dealing with the deficit. But I'm not as extreme as those other guys. I'll be much more of a, of a centrist guy than those Republicans." That's the argument.

MR. GREGORY: Well, I think -- and I think he has a claim there. I think the question, really, you know, that I think we have to answer in 2012 is, what were we so angry about in 2010? What really is the, is the root of that anger? I think most people would answer that Americans are angry about the lack of jobs, lack of a strong middle class, lack of growing incomes, lack of purpose, lack of fulfillment, lack of vision. I think the president has a strong case to make if the economy's recovering. And if he can say that he is being fair, I think the, I think -- my own view is that what Americans want is fairness. They want a fair chance. They don't mind rich people getting rich. They just want to make sure everybody has a chance to be that rich guy. I don't think today they believe that everybody has a chance. I think they think the playing field is unfair. I think people at the bottom don't feel the ladder is there for them. I think if the president can make the case, or if the Republicans can make the case, that the shared and fairness ingredient is being mitt, is being hit, I think either of the parties has a chance to say to the Americans who are angry, channel this angry, this anger in a direction that's good for the country and good for the planet.

MR. SHRIVER: Jim, if you look at that battleground map and you look at a state like Nevada, you look at Florida, with high foreclosure rates and you see a mortgage market that is still very much stuck, a looming debt crisis, is this the unforeseen that really becomes, next to unemployment, is the big drivers of the re- election?

MR. GREGORY: Yep. Somehow the president has to link these things. He has to say, "Look, if we don't have budget discipline, then rates are going to go so high that Florida's going -- you're, you're never going to be able to sell your house if we don't have budget discipline. You have very little hope of having a better job next year at this time." He's not been able to link them. He hasn't been able to link higher gasoline prices to this. But that's what's driving it because our house isn't in order, the dollar goes down, all our costs go up. He has not been able to relate the two. He has to by 2012 or it'll loot the American people.

MR. CRAMER: There's also a lot going on overseas, Helene, something you write and report on quite often. My colleague Tom Brokaw sat down exclusively with the Saudi foreign minister today in Saudi Arabia, and among the topics was the future of Libya, the future of Moammar Gadhafi. Watch this exchange.

MR. GREGORY: Should Gadhafi leave?

MR. TOM BROKAW: Well, I don't know what his choices are. But anybody who has to fight to stay in tune with the people, must think twice about it.

PRINCE SAUD AL-FAISAL BIN ABDUL: One of the dilemmas for the United States and the West is they don't have a place for Gadhafi to go. Would he be welcome in Saudi Arabia if he were to decide to leave power in Libya?

MR. BROKAW: I think the United States is much larger than Saudi Arabia. They must have a place to put him somewhere.

PRINCE SAUD: Not here?

MR. BROKAW: Helene, asylum in the United States seems unlikely.

MR. GREGORY: Wow!

MR. TODD: This is, this is the endgame on Gadhafi. It just shows you the, the deep dislike in the Arab world for him.

MR. GREGORY: It really does. But it also raises an interesting question, I think. If, if Moammar Gadhafi is still in place come the 2012 campaign, Barack Obama should be very, very worried about his own presidential, his own presidential re- election hopes. I think the -- you know, clearly what's going on in the Middle East is going to -- I think will play a big -- how, how it shapes up will play a big role in, in this presidential re- election campaign. And they, they are very -- they're very, very worried about it. When you look at the potential for a domino effect and you look at the -- look at what's going on now in Syria. And you look at -- you know, Libya already, you know, we've only been there for three weeks, it already looks bad. When people are already talking about -- three weeks into it are talking about, you know, the length that this could take. He's not gone, and he shows no signs of leaving at this point. So I think that's something that they're very worried about at the White House.

MS. COOPER: And this is the, this is a disciplined operation. David Plouffe, Bill Daly, others who would like the president to hew to a very specific space as he begins to ramp up for re- election, chaos in the Middle East is very difficult to manage.

MR. GREGORY: Look, I was talking to some economic advisers inside the White House, and they were telling me how much they, they miss the first two years of this presidency because they always felt like they were actually debating economic policy. He said this new team concerned- -is concerned about two issues, re- election and the Middle East.

MR. TODD: Mm-hmm.

MR. GREGORY: I mean, the Middle East is consuming the other half of their, of their collective brains, and then the -- and the other half is re- election.

MR. TODD: Which is something that's happened to Obama-- President Obama ever since he got elected. He kept -- he -- they -- they're always saying, "We want to get on the jobs agenda, jobs, jobs, jobs. This week we're going to do winning the future. We're going to do jobs."

MS. COOPER: "We're going to guess," it's a guessing...

MR. TODD: And then you get, you know...

MS. COOPER: Right.

MR. TODD: ...each time you, you end up, you end up seeing something else consume that.

MS. COOPER: All right. We're going to leave it there. Thank you all very much. We'll be back with more in just a moment.

MR. GREGORY: A special programming note, tune in to MSNBC this afternoon for "A

MR. GREGORY: The Black Agenda," hosted by MSNBC's Ed Schultz. That's at 12 PM Eastern. Also, check out our MEET THE PRESS Web site and blog this week for a new edition of our midweek Press Pass. In our latest edition up now, I spoke with potential GOP presidential contender, former Senator Rick Santorum. Find out his take on how the GOP 2012 field is shaping up. That's at presspass.msnbc.com. That is all for today. We'll be back next week. If it's Sunday, it's MEET THE PRESS.