Meet The Press (07/24/2011)

updated 7/24/2011 1:03:06 PM ET

MR. DAVID GREGORY: This Sunday, no deal. Debt talks abruptly break down in Washington as the president and the House speaker blame each other.

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PRES. BARACK OBAMA: One of the questions that the Republican Party's going to have to ask itself is, can they say yes to anything?

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REP. JOHN BOEHNER (R-OH): It's the president who walked away from his agreement and demanded more money at the last minute.

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PRES. OBAMA: This was an extraordinarily fair deal.

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REP. BOEHNER: The White House moved the goalpost.

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MR. GREGORY: Leaders are feeling the heat. Brutally hot summer temperatures; but more importantly than that, a fast-approaching deadline of August 2 to raise the nation's debt ceiling. As debt defaults roil Europe, the U.S. economy is now on the brink. Without a deal to raise the ceiling, America's credit rating may be downgraded and the government would be unable to pay its bills.

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PRES. OBAMA: If we default, then we're going to have to make adjustments. And I'm already consulting with Secretary Geithner in terms of what the consequences would be.

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MR. GREGORY: So this morning we're going to get the very latest on weekend negotiations which did continue despite the breakdown. Is a deal still possible? With us, the president's chief of staff Bill Daley. And a response this morning from a top Republican negotiator, Tom Coburn of Oklahoma.

Then, is Washington broken? While politicians stonewall and fight over the debt talks, the public recoils. Approval ratings for Congress plummet, and pessimism about the country's future rises. Are our politicians capable of meeting the challenges this country faces? A special discussion this morning. With us, former Senator Chuck Hagel, Republican of Nebraska; Cory Booker, Democratic mayor of Newark; tea party freshman Congressman Adam Kinzinger; presidential historian Doris Kearns Goodwin; and NBC's Andrea Mitchell.

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

MR. GREGORY: Good morning. After the dramatic Friday night breakdown of talks over a so-called grand bargain deficit reduction package, congressional leaders met with the president for less than an hour Saturday morning. Speaker Boehner spent the rest of the day working on an alternative plan to slash spending several trillion dollars and avert a catastrophic default by that August 2 deadline, as we pointed out, just nine days away. Word came last night, after a meeting of Republican and Democratic congressional leaders, that the speaker wants to announce the outlines of a plan as early as later today to reassure investors before Asian stock markets open for Monday trading. However, still so many questions remain. Here to try to answer some of them, the president's chief of staff Bill Daley.

Welcome back to MEET THE PRESS.

MR. BILL DALEY: Thanks, David.

MR. GREGORY: So it seems like the talks right now are on doing something temporary: a trillion dollars in spending cuts, raise the debt limit by that much, at least get us through the end of the year. Is that something the president can accept?

MR. DALEY: Well, the president has been consistent in what he's called for. One, we obviously cannot let the credit of the United States government be in question. We've got to get past this debt ceiling vote on August 2. But as importantly, he's been committed to trying to take serious steps to bring the deficit down. And, and that's what the engagement with Speaker Boehner twice, that's what the fiscal commission he founded, that's--that was what the Biden process was all about; not just the deal with the debt ceiling vote, but to do something about the deficit, which is a serious drag on our economy. That's what we were focused on.

Right now you've got three things that must be done: the debt ceiling must be extended, it should not be short-term, it must be beyond 2000--into 2013 to continue this uncertainty. I talk to CEOs every day, and all they want from Washington is for Washington to take off--out the uncertainty in the system. There are enough problems with our economy right now, but they continue to have this show going on. And if you look at the rating agencies, what they've said, what they've said is the reason they question our economy right now and the reason we may get downgraded, because they don't have faith that this political system of ours can deal in a serious way with the deficit. So the president is intent on making sure, and all of the congressional leaders--Senator McConnell, Speaker Boehner, Senator Reid, Congresswoman Nancy Pelosi--have all said the debt ceiling will be extended. But it must be extended in a way that gives certainty to the economy through '13 and not some short-term gimmick where we're right back in this fix in six or eight months, and the world looks at us once again and says--in the middle of a political election year of presidential politics, the world looks at us and says, "These people just can't get their act together."

MR. GREGORY: All right, so what you're saying is that after talks break down, what congressional leaders were engaged in was no more than a gimmick?

MR. DALEY: No.

MR. GREGORY: So a short-term deal is no more than that?

MR. DALEY: No, a short-term deal that doesn't begin to--in a serious way begin to deal with the deficit will not be respected by rating agencies.

MR. GREGORY: But there's a two-stage process, right, that Boehner's talking about?

MR. DALEY: Now let me just say, there, there, there is a process that Senator Reid and Senator McConnell in the Senate have talked about, and that would be a super committee that would be charged with trying to address the deficit over a very short period, OK? And Senator McConnell's plan, which he put forward about 10 days, two weeks ago, would then have a process by which the president would come to the Congress, ask for authorization to extend the debt ceiling, show what cuts he would make, the Congress would have the opportunity to vote up or down and then move on. The president said, "I'll accept that responsibility." But to go through another debt ceiling vote to get further dollars in, in the spring of '13 will continue this uncertainty in our economy.

MR. GREGORY: Well, let, let me...

MR. DALEY: And it affects the average person out there.

MR. GREGORY: And, and I want to get to that in just a minute. But let me just be clear on this. The president will not sign a plan that's basically two parts, short-term extension and then maybe a separate process for dealing with the bigger issues?

MR. DALEY: If the, if the process has the opportunity to deal with the issues and has certainty that the debt ceiling will not be used again in a political year, and, and you don't have a situation, as we've had with this one, where Washington was unable to function and the world has watched, the American people have gotten nervous, you've got markets around the world ready to react, it's time to get some certainty in the system.

MR. GREGORY: So...

MR. DALEY: And, and whatever deal the Congress comes up with, what the president has said is it must give us certainty to 2013. We can fight, and we must have a fight over the, the need for budget, deficit reductions. The president laid out a plan, Speaker Boehner had a plan, the fiscal commission had a plan. So this has to be two steps. But the second step must get us through '13 without having to go through this ridiculous fight over extending the debt ceiling again.

MR. GREGORY: All right, I just want to be clear. The president would veto a plan if it does not extend the debt ceiling into 2013?

MR. DALEY: Yes, the president believes that we must get this uncertainty--in order to help the American economy and help the American people we must get this uncertainty out of the, out of the system. But at the same time, he's insisting, and Senator Reid put a plan forward on a super committee of the Senate and the House that will deal in a very short period with the deficit, so we could see serious deficit reforms. Senator Coburn comes on next. The Gang of Six...

MR. GREGORY: Yeah.

MR. DALEY: ...worked on it, they've got an outline. There's many parts of it.

MR. GREGORY: So just help me understand the exact timing. So you're saying you want a vote that says...

MR. DALEY: Yeah.

MR. GREGORY: ...the debt ceiling is raised till 2013. There can be this super commission that takes on the hard stuff.

MR. DALEY: Right. Right.

MR. GREGORY: And when does it have to vote up or down? By when?

MR. DALEY: Well, if the super committee doesn't produce something that the Congress approves--and my understanding is this is Speaker Boehner's plan.

MR. GREGORY: Mm-hmm.

MR. DALEY: If they don't produce something in early--at the end of '12--or pardon me, '11 or '12, then there's action that's take--that must take place. Senator McConnell has a plan where the president would come to the Congress, give his list of cuts. They could vote approval or disapproval on that proposal in order to get the extension of the debt ceiling. But it would not be this sword being held over the American people's heads once again.

MR. GREGORY: But, but why should the American people have any more confidence in the political system's ability to make hard choices then when it won't make the hard choices now?

MR. DALEY: Well, hope springs eternal, I guess.

MR. GREGORY: Let, let's talk about more immediate economic impact, get out of the political fighting and talk about what the impact is on the markets. You have said in the last couple of weeks that number really has to be $4 trillion worth of deficit cutting for the rest of the world and for markets to take the United States seriously. The New York Times reported this on Thursday, quoting Mark Zandi, a prominent economist at Moody's. And I'll put it up on the screen. Zandi, who's "the chief economist at Moody's Analytics [said,] `You keep putting one piece of sand on the pile, nothing happens, and then, all of the sudden it just caves.'

"Several traders and bankers, including Mr. Zandi, said the imminence of a possible default was already damaging the United States' standing as the most creditworthy country in the world. The tarnished reputation may linger, even if the government reaches a deal, and especially if the country's financial books remain unbalanced.

"`Our aura is diminished. You know people really view the U.S. as the AAA, the gold standard, and I think we're tarnishing that.'" That's according to Mr. Zandi. How much damage has already been done?

MR. DALEY: Oh, I, I don't think there's any question there's been enormous damage done to our, our creditworthiness around the world, the perception of America as a country that not only is solid and, and when there are difficult problems, as we have done in our history, we address them. We don't kick the can. We had a chance, and we still have a, a chance--albeit it a difficult because it's only nine days away to August 2--a chance to really do something serious. That's what the president wanted. That's what the president has been saying now for months. In April he put out a $4 trillion road map to fiscal sanity. OK? He began to negotiate with Speaker Boehner--twice we've negotiated with the speaker for deficit reduction, and we haven't gotten there. The Gang of Six that Senator Coburn's a part of has been active over the last six months. They finally came out with something last week. I do think that out of this process, albeit rather disruptive to the political system and to the economic system and not fair to the American people because they are the victims of this political dysfunction in this town.

MR. GREGORY: All right, but, but dysfunction is on both sides. There's failed leadership on both sides.

MR. DALEY: Yes.

MR. GREGORY: The president, Republican negotiators. The president was quite angry with Speaker Boehner. He said he's been left at the altar twice. But I just want to show that the, the, the context for this conversation, the U.S. federal debt, going back to Inauguration Day when the president came in, it was $10.6 trillion. In July now 2011 it's at $14.3 trillion. The proposed increase would take it to $16.3 trillion. And yet, from the Republican point of view, here you were in negotiations about spending cuts, and yet it was the White House who said, "We got to increase the amount of tax increases for this to be a balanced plan." Can't you understand the point of view which is, "Wait a minute, why shouldn't the priority be on spending cuts alone and not tax increases when we've got this kind of debt situation"?

MR. DALEY: It's a combination of the two. You cannot just cut your way to health. No company that gets in trouble would just cut, cut, cut in order to get healthy. You have to cut, you have to invest in things. It's not one way. No one runs a business that way. What you have to do is you have to have a balance. The American people are very willing to sacrifice, but that means all of us have to sacrifice. That, that means those of us, like yourself and I, who have done quite well in life ought to sacrifice a little more. And what the president has been saying is it ought to be more of a shared sacrifice. And it should not just be cuts on the back of those who are disabled, the seniors or the elderly. Those are the people who right now have to be watched out for by the government. But this president, in all of these negotiations, has understood that there must be entitlement reform, and he has been willing to take on his party and some of the so-called "sacred cows" of the last 25, 30 years and deal with those issues.

MR. GREGORY: But it was Speaker Boehner who said, "Look, we, we had an agreement..."

MR. DALEY: We did not have an agreement. That's not true.

MR. GREGORY: "...about tax, tax increases." And that the White House then changed the terms of the deal...

MR. DALEY: That's not true. That's not true.

MR. GREGORY: ...and said it's got to be $400 billion more in tax hikes.

MR. DALEY: Not true.

MR. GREGORY: That's not true.

MR. DALEY: I was in the room. The truth is, in those negotiations, we had a whole series of items that were still open. OK? There were discussions of revenue. The president was serious about revenue. And we said when the Gang of Six came out, "There is more revenue in the Gang of Six, they're willing to go further than we're even going. Can we go further? We have enormous spending cuts that we're talking here, but can we go further on revenue? Get back to us, tell us if that's possible." Because the game that we were trying to accomplish was to pass something with enough votes obviously that made a serious impact. We never heard back.

MR. GREGORY: Right.

MR. DALEY: There was no ultimatum. There was no change at the goalpost saying, "You either do this to we walk out the door."

MR. GREGORY: All right, you said on this program...

MR. DALEY: That is absolutely untrue.

MR. GREGORY: All right, when you were last here you said you would not question Speaker Boehner's willingness or ability to handle his own caucus. Do you say now that he's failed to lead?

MR. DALEY: I think there is a serious question and a debate within the Republican caucus as to the future and where they want to go. Are they going to be a caucus that is going to just say, "No, it's our way or the highway"? Look it, there is a divide in government. There's no question. But the American people, when they elected the divided government by giving the House to the Republicans for control, they didn't want--they wanted divided government, not dysfunctional government. What we have right now is a attitude, and I'll give you an example of that. We have an attitude of, "It's our way or it's the highway." OK? "So you either come our way or chaos may reign." That is not the way to run a government. This has to be bipartisan. We have a situation right now with the FAA. You have a reauthorization of the Federal Avionics Administration, it runs all the airports. They have been trying to be reauthorized since 2007. There's been 20-some extensions. That, that dispute between the House and Senate broke down and 4,000 people were laid off on Friday because of a political inability for the House and the Senate to get together. The Republicans in the House said, "It's our way or, sorry, 4,000 people are laid off." That's not the way the government's supposed to work.

MR. GREGORY: Are you concerned that Speaker Boehner's no longer real--a real partner in these negotiations with the president?

MR. DALEY: I, I--look it, I think he is a partner, but he's got a caucus that may have a very different attitude about how they want to see government function.

MR. GREGORY: As you...

MR. DALEY: And, and this compromise, which is the way things move forward, has become a terrible word, I believe in this caucus.

MR. GREGORY: Is there need for accountability on the part of the president? You said the president's been way out on front on this. He's certainly taken a lot of criticism for not being way out in front. I mean, even way back in April Secretary Geithner said, "We can have a parallel conversation about the debt ceiling"--excuse me--"a parallel conversation about reducing the debt and the deficit, but Congress just has to reauthorize and up the debt ceiling." Did he take seriously enough what Republicans were saying, which is "No, there's got to be a direct link here" and therefore making it too late and pushing us to the brink?

MR. DALEY: First of all, the president created the fiscal commission last year.

MR. GREGORY: But he didn't accept the recommendations.

MR. DALEY: Well, but no Republicans would vote for any piece of it on the commission. OK? So he set that process in place. After that failed, he then began a process in the spring with the Republican leadership. He put forward the--a--brought the leaders in. Vice President Biden put a process together with Congressman Cantor, Senator Kyl, representatives, all the leaders. It went for two months. They dealt with serious discussions on cuts, real cuts. When they got to the revenue section, the Republican leadership said, "Nope, we're out of here. Sorry. That's the end of that. We'll deal with cuts, but we won't even stay around for the discussion on revenue." And that's not a balanced way to run the government. You don't just say, "OK, I've got what I want, I'm walking out the door." That's what happened with that process. The president then came back after that broke down, brought the leaders in and said, "Look it"--at that point we had about six weeks. He said, "We have got to do something here." And there's been serious negotiations. Twice we got close with Speaker Boehner on a deal that would have made--I believe, would have been a historic agreement, and would have sent the message to the world and to the markets, but most importantly to the American people, that this system can work. And people who have strong disagreements, political strong forces, the speaker and the president, can't come together, forge a deal, neither one likes everything about it, both are--and then they turn around and convince their allies that this is good for America.

MR. GREGORY: One last political question. The president had said he'd be willing to cut Medicare, Medicaid, by $650 billion. Democrats are not very happy about that certainly.

MR. DALEY: Right.

MR. GREGORY: Given that that was his position, fair to say that the president will not use Medicare as an issue against Republicans in the campaign. He will not accuse them of trying to gut the program because they want to reform it or cut benefits when he was willing to make those cuts?

MR. DALEY: The president's reason to make cuts in Medicare was not just to solve the deficit, but to strengthen the Medicare so it lasts for the people who need it most.

MR. GREGORY: Right. But that's what Republicans say they're doing too.

MR. DALEY: No, but you...

MR. GREGORY: And Democrats are saying "No, you're trying to take benefits away from seniors."

MR. DALEY: ...you, you take, you take the Republican plan that was passed in the House that every Republican voted for was a fundamental change in the way Medicare is, and it functions from what it's been for the last 50 years. That is just not...

MR. GREGORY: Medicare is still an issue for the campaign?

MR. DALEY: Medicare is an issue for the American people. They want to know that it's sound. They want to know it's going to be there. That is a sacred pledge by the government to the people who are the--are, are in hard times. And for us to keep playing games with this--we have a chance right now, we think there may still be time, to send a--make serious changes to Medicare to strengthen it to give people confidence. Not just to gut their benefits that--this president will never sign on board to any plan that's going to do that.

MR. GREGORY: Before you go then, bottom line, where we are on the talks. Do you see the possibility of a breakthrough as early as today, or are we in unchartered territory?

MR. DALEY: Well, I think we're getting into difficult days. Obviously, the Congress--some people believe the Congress acts rather slowly. But when they need to act, when they see a crisis, I have firm belief in every one of the leaders. Senator McConnell, Speaker Boehner, Senator Reid, Congresswoman Nancy Pelosi have all committed themselves that this country's debt will be paid. The Congress ran these up. It is the Congress that has the responsibility to act.

MR. GREGORY: Are we, are we in a financial crisis now? Do you worry about the markets tomorrow?

MR. DALEY: Well, we've been in a difficult economic crisis for quite a long time. The American people know that. We are now getting to a point where I think markets around the world will question whether the political system in Washington can come together and compromise for the greater good of the country.

MR. GREGORY: All right, we're going to leave it there. We'll be watching. Mr. Daley, thank you as always.

MR. DALEY: Thanks, David.

MR. GREGORY: Joining me now, a member of the Senate Finance Committee and the so-called Gang of Six negotiator, Senator Tom Coburn of Oklahoma.

Senator, welcome back to MEET THE PRESS.

SEN. TOM COBURN (R-OK): Good morning. How are you?

MR. GREGORY: I'm fine. I want to get your reaction to what you heard from Bill Daley here from the White House this morning, which is the president will not sign a deal that results in only a temporary increase of the debt limit. He wants to see something that gets us through 2013.

SEN. COBURN: Well, first of all I think that's a ridiculous position because that's what he's going to get presented with. That's the compromise way through that's going to build the compromise. David, everybody's talking about the, the symptoms of our problem instead of the real disease. The government's twice the size it was 10 years ago. It's 30 percent bigger than it was when President Obama became president. The problem is that we're spending way too much money, and, and it's not hard to cut it without hurting entitlement benefits. But we don't have anybody that wants to do that without getting a tax increase.

MR. GREGORY: Well, all right, well, I want to get to taxes in just a minute. But I want to talk about the here and now, which is a failed political system at the moment, and what you heard from Mr. Daley, very difficult days in the financial markets and a lack of confidence around the world at the United States' credit worthiness and its ability to reach some kind of consensus. Does that not have to create a breakthrough along the lines of what the president is talking about? Cuts that are large enough and an extension of the debt ceiling that's long enough to say to the markets, you know, "You can count on the United States."

SEN. COBURN: I don't agree with that because, if you give an extension of $2.4 trillion to this president and this administration, which is--has policies that have actually hurt our recovery, I think you actually hurt the possibility of keeping our AAA rating without making the fundamental changes that have to come to this government. Unless you reform entitlements and unless you get rid of the waste and duplication--there's, there's $2 trillion over 10 years in duplication and fraud in the federal government before you even talk about entitlement programs. You mentioned the FAA program with Mr. Daley. You know what's holding up the FAA program? Is essential air services where the American people are paying $1,000 a ticket in subsidy to people that are riding from airports with six passengers on a plane when they could drive an hour and a half and get an airplane, and we wouldn't be paying the $1,000. So it's continued waste and duplication in the federal government and they won't approve the FAA because they continue to want to subsidize irresponsible and wasteful behavior.

MR. GREGORY: Is it responsible to get to a point where we pass the August 2 deadline and risk default?

SEN. COBURN: I don't think so. I think we'll get there, and I think the president--I understand why they're saying they won't sign a short term, but I think they won't have any choice, and I think that's the only answer right now. I would make the other point, the deficit commission put out a pretty good plan. It was dead-panned by this administration. Had they come alongside, started supporting that long time ago, we wouldn't be where we are today. And that was the president's commission. He had 11 members out of the 18--60 percent--that supported that and it got absolute cold shoulder from the administration.

MR. GREGORY: I want to ask...

SEN. COBURN: So for them to come back now and to say, to use that, when they rejected it out of hand, did not embrace their own commission. So it's not intellectually honest to say that that was one of the steps, because they didn't want it because it had entitlement reform in it.

MR. GREGORY: Let, let me get to the heart of the matter, you have been outspoken on the issue of taxes. You believe in lower taxes, certainly as a matter of principle as a conservative, but you've also talked about the need for compromise. That is not something that's happened among conservatives on Capitol Hill and among the leadership. This is how The New York Times editorialized about it on Saturday morning. "The Party That Can't Say Yes," it writes, "In the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of tax--of revenue increases"--tax hikes--"but could not stomach another $400 billion the White House wanted to raise through extending tax loopholes and deductions. So on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base." What do you say to that?

SEN. COBURN: Well, I'd say a couple of things. Number one is nobody in America has actually seen a plan from this administration put on paper for us to visualize and to actually look at what they were willing to give up. So we don't know what that, what that is. There's no question there's waste in the tax credits that are in the code. There's no question there's favors for individuals in the code that ought to be eliminated. And we can do that, but you ought to do that as you lower the rates because our biggest problem isn't that taxes are too low, it's that the government interference and the oppressive nature of our government on our economy is lessening the economy's response. So I, I would vote for a compromise, as I did in the deficit commission, as I worked with the guys in the Gang of Six, provided you get significant changes to the real problems that is facing us, which is waste and the duplication and the fraud in the federal government programs; and number two, reforming the entitlements. Mr. Daley also said that they were going to oppose anything that would fundamentally change Medicare. Well, Medicare is belly-up. Anybody that's on Medicare today, I want to tell you, in five years, it's going to have to change.

MR. GREGORY: Mm-hmm.

SEN. COBURN: We cannot borrow the money to keep it going the way it is today.

MR. GREGORY: All right. Senator, final...

SEN. COBURN: So people need to know that, rather than to take a false assumption that you won't change something.

MR. GREGORY: Final question, what is your message to those in the tea party caucus in the House about tax increases and what needs to be done to get a deal?

SEN. COBURN: Well, ideally, we would not have tax increases. But to get a deal, if we eliminated ethanol blending tax credits, wind energy tax credits, tons of other tax credits, then we could get a deal and what that would not do is impact the average American, would not raise rates. We should use that money to lower rates and--but with that, get significant fundamental entitlement reform and discretionary spending reform.

MR. GREGORY: All right. We're going to leave it there. Senator Coburn, thank you very much.

SEN. COBURN: Glad to be with you.

MR. GREGORY: And coming up, we're going to continue the conversation, a special discussion this morning, if you need any more evidence, you hear how polarized this are, is Washington simply broken? The collapse of high-level debt talks now raising questions about whether Washington can still tackle the country's biggest problem. Or has the nation's political system become a victim of partisan gamesmanship and failed leadership? Plus, the prospects for a debt deal. Analysis from our roundtable of what you've just heard. With us, former Senator Chuck Hagel and Newark Mayor Cory Booker, freshman Congressman Adam Kinzinger, presidential historian Doris Kearns Goodwin, and NBC's Andrea Mitchell. Right after the break.

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MR. GREGORY: Coming up, is Washington broken? Former Senator Chuck Hagel, Mayor Cory Booker of Newark, Representative Adam Kinzinger, historian Doris Kearns Goodwin, and our own Andrea Mitchell, they join me in a special roundtable discussion. It's up next, right after this brief commercial break.

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MR. GREGORY: And we're back with a special roundtable discussion this morning. Joining me now, presidential historian Doris Kearns Goodwin; host of MSNBC's "Andrea Mitchell Reports," our chief foreign affairs correspondent Andrea Mitchell; Democratic mayor of Newark, New Jersey, Cory Booker; former Republican Senator Chuck Hagel of Nebraska; and joining us for his first appearance on the program, Republican Congressman Andrew Kinzinger--see, I didn't mess up the name, even though you thought I might--of Illinois' 11th District.

REP. ADAM KINZINGER (R-IL): It's Adam Kinzinger, but that's all right.

MR. GREGORY: Oh, what did I say? I'm sorry.

REP. KINZINGER: It is my first time here, I guess.

MR. GREGORY: He was elected in 2010 with the tea party's support and served as a captain in the Air Force, including tours in Afghanistan and Iraq.

Congressman, welcome very much. Happy to have you.

REP. KINZINGER: Thank you.

MR. GREGORY: And welcome to everyone.

Doris, sometimes satire can be the most damning in terms of summing up where we are. And The Onion newspaper, the satirical newspaper, has this headline this week. Headline: "Congress Continues Debate Over Whether Or Not Nation Should Be Economically Ruined." If the question is whether Washington is broken, make the case that the answer is yes.

MS. DORIS KEARNS GOODWIN: I think there's no question it's broken. You know, our country was created on the principle of compromise. Think about it, the states vs. the federal government; Senate vs. House; North vs. South. And some--I remember once one of the old framers was asked, "What are the three principles of this new government you've created?" "Well, the first is compromise, the second is compromise, the third is compromise." Something's happened where compromise has become a terrible word in Washington. It's partly because the parties have become more ideologically separated. Henry Clay was the great compromiser. Lincoln's idol was Henry Clay. Now a lot of people feel that you're undoing your convictions. What do you go to Washington for unless you're trying to work out solutions? Solutions, in a diverse country like ours, is going to require compromise.

MR. GREGORY: Mm-hmm.

MS. GOODWIN: And I don't see any of that attitude there. And I think the kind of people who come to Washington now don't want to do that. And it's only going to make it worse because the caliber of people gets less.

MR. GREGORY: Congressman...

MS. GOODWIN: It's scary.

MR. GREGORY: ...you, you know, you're new to Washington. Is this what you expected? Is this how it should operate?

REP. KINZINGER: No, it's not how it should operate. I mean, I think Washington, there's no doubt that it's broken. There's no doubt that there's, you know, it's become personal. It's become vitriolic and acidic. People need to work together. We need to have these discussions. And I think the American people would be pretty impressed with the kind of discussions that, frankly, Republicans and Democrats have. We get along behind the scenes, you know?

But I'll tell you what. What really gets--I feel like that the Republicans on--in the House have come to the table. We've said, "Look, the overspending of Congresses prior to us, of our president, has brought us to a point where we need to recognize that, you know, yeah, we probably have to pay for that by raising the debt ceiling. However, we've got to get ourselves on a fiscal trajectory." Think about it, the amount of cuts that we're talking about making in 10 years is almost equivalent to what we spent in 10 minutes in the stimulus in 2009. So we have to have a reduction.

MR. GREGORY: Senator Hagel, Norm Ornstein wrote a piece in Foreign Policy on Thursday kind of summing up, again, the case against Washington working, and he writes this, the headline, "Americans have complained for years that their government is broken. This time they're right." Look at "what we've got now: a long-term debt disaster with viable bipartisan solutions on the table but ignored or cast aside in Congress; an impasse over the usually perfunctory matter of raising the statutory debt limit placing the United States in jeopardy of its first-ever default; sniping and guerilla warfare over two major policy steps enacted in the last Congress, healthcare reform and financial regulation; no serious action or movement on climate change, jobs or the continuing mortgage crisis; and major trade deals stalled yet again despite bipartisan and presidential support."

FMR. SEN. CHUCK HAGEL (R-NE): Well, I think where you start is with this fact, at least I believe this, politics just reflects society. And what we are seeing today, I believe, is a new emerging governing coalition being built in this country, a new political center of gravity. Evidence of that abounds. Start with Gallup's numbers on registered independents. Registered independents now represent more than 40 percent of all the registered voters in America. Republicans sink like a rock, Democrats sink like a rock. And you, you, you can bolster that argument in many, many ways. Point being we are living at a time when society is the most complicated, interconnected, immediate we've ever seen. That also reflects on a world order that is being rebuilt. We haven't seen a world order being rebuilt since World War II. Really, the implosion of the Soviet Union in 1991 started it. So, obviously, what's happening in Washington is going to reflect what's happening across this country and the world. The emergence of the tea party, for example, whatever that is, a philosophy about government, that was born out of frustration, disappointment, high expectations in your leaders. To Doris' point, you're supposed to come to Washington to help govern, find solutions, solve problems. We're not seeing that. This just didn't start, by the way, with this president. I saw this in the Senate emerging over the last 12 years. Both parties are to blame. We have, I think, a vacuum of some leadership, some courage. Courage has never been an abundant commodity in Washington.

MR. GREGORY: Well...

SEN. HAGEL: But we're, we're going to blow through this, David, I do believe that.

And the last point I'd make, look at the last three elections in this country. We're not a, a republic that swings wildly. Last three elections, back to back, threw parties out of power in those elections. What does that tell you? That tells you that the board of directors, the people who own the country, the citizen, the voter...

MR. GREGORY: Mm-hmm.

SEN. HAGEL: ...is, is going to take action.

MR. GREGORY: Well, Andrea Mitchell, I mean, look at our polling that shows that 52 percent of Republicans say their leaders should stick to their convictions. Something like 60 percent of Democrats said there should be compromises. There's the, the political divide.

MS. ANDREA MITCHELL: Exactly. I was really struck by a cartoon this week that had the leaders of Iraq and Afghanistan, Maliki and Karzai, looking at our debt ceiling debate and saying, "Do you think they'll ever be ready for democracy?" You know, the fact is that we've got people who've been elected, House members who've been elected in gerrymandered, much more partisan districts. They're more worried about being challenged in the primary than running against a Democrat. You've got both caucuses now much more ideological because the centrist Democrats were defeated in the last round. So the--this whole thing fell apart. John Boehner and Barack Obama could probably have come together on something. They could not lead their caucuses. And Boehner is a different kind of speaker. He has not the ability or the desire to go out and say, "This is the deal. My way or the highway. You're not going to get on this committee, you're not going to get on that, you're not going to have a good office." The old enforcement mechanisms, as much as we dislike them and used to criticize them, they worked. Leaders could demand followship.

MS. GOODWIN: Yes.

MR. GREGORY: Right.

MS. MITCHELL: Here there was an exile, a bolting.

MR. GREGORY: Right. Let, let me get Mayor Booker into this. What do you see from the outside going on here?

MAYOR CORY BOOKER (D-NJ): Well, no, there's a dam of disgust that's welling up in this country where people feel like their politics is betraying them. And most Americans, frankly, don't think of themselves first as Democrats or Republicans, they think of themselves as Americans. And they are frustrated by the partisanship being put before progress, by parties putting, putting--being put before pragmatism. And so my hope is, as the sound of the--Senator Hagel's--the sound of optimism is that this is the beginning of a welling up in this nation where we're going to start to reject the kind of politics that's not serving.

MR. GREGORY: But, Doris, you talked about the historical parallels--and, Congressman, you mentioned it as well--how personal it's gotten here. We actually had a reflection of that this week between Congressman Allen West from Florida and Debbie Wasserman Schultz, a fellow Florida congresswoman and the chairman of the DNC. He wrote her an e-mail after they had a, an exchange on the floor, and I'll put it up on the screen so our viewers can see. This is the e-mail he wrote to her. "Look, Debbie, I understand that after I departed the House floor you directed your floor speech comments directly toward me. Let me make myself perfectly clear, you want a personal fight, I'm happy to oblige. You are the most vile, unprofessional, and despicable member of the U.S. House of Representatives. If you have something to say to me, stop being a coward and say it to my face, otherwise, shut the heck up. ...

"You have proven repeatedly that you are not a Lady, therefore, shall not be afforded due respect from me! "Steadfast and Loyal, Congressman ... West." Does this make your head turn...

MS. GOODWIN: Absolutely.

MR. GREGORY: ...or does it remind you of an earlier era?

MS. GOODWIN: Well, I'll tell you what. In the 19th century, a dozen congressmen were formally censured. They had to stand before the bar of the Congress for insulting and offensive remarks to fellow congressmen. Now what happens, they say these insulting remarks and then suddenly they raise more money from their base. I mean, one of the things...

MR. GREGORY: And they both are doing that in this case.

MS. GOODWIN: Exactly. One of the things that's happened--I mean, just to go back to Andrea's point for a minute about the speaker not having the power, sometimes I yearn for the old days of Speaker Cannon, Joe Cannon. He had such power that, at one point when he wanted a bill passed, he just said, "OK, how many ayes?" Very tepid response. "How many nays?" Thundering nay. "Well, the nays make the most noise, but the ayes have it." And you have a feeling with Boehner, he grew up with 11 brothers and sisters, he said compromise was in his DNA, he wanted to do this, you get this feeling, if he and the president could have made it. But one of the things that's happening in Congress now, too, is they're there from Tuesdays to Thursday. They're not there on the weekends, they don't socialize, they don't form friends even between tea party and non-tea party, as well as Republicans and Democrats. We've lost that camaraderie that is the core of what our system's about.

MR. GREGORY: Yeah, go ahead, Congressman.

REP. KINZINGER: Let me just say that, you know, look, I think when we talk about what's the future of this country, where are we going, where's politics, America is the best country in the world. We refuse to accept second. My grandfather fought in World War II, and I remember him in tears when he tried to recount his experiences just before he died. He couldn?t do it. I think of the generations from the men who signed the Declaration of Independence has said this is going to cost us our life, but we're going to do it, and the generations of people like Senator Hagel who fought, like when I was in Iraq and Afghanistan and the people I fought with. The investment we've made in this country, we refuse to fail. I absolutely refuse to say that this is something we can't do, that we're accepting second best.

MR. GREGORY: Right.

REP. KINZINGER: America is the greatest country in the world, and we're going to pull through.

MR. GREGORY: But my question, Congressman, is failing, is compromise failing? Because that what seems to be the underlying trend here...

REP. KINZINGER: No.

MR. GREGORY: ...is that any give--well, let's put it this way, compromise is not celebrated in the way that Doris said it was in the past.

REP. KINZINGER: I don't think compromise is failing. I think when we sit around and say Washington's broken, it's never going to get better.

MR. GREGORY: Yeah.

REP. KINZINGER: And I'm not saying that's what we're saying here, but that's failing. By taking that and saying, "Well, it's just broken, we're going to have to accept our place in history." No. We can come to a compromise. And as I said, truly there is a feeling in my caucus and in these specifically, I can say, that I feel like we are willing to compromise by coming to the table and saying, "OK, we understand that we're going to have to raise the debt limit, specifically, but we have to get ourselves on a fiscal trajectory because look, we've spent too much money." We have the same tax rates, the same two wars, the same prescription drug benefit that we had in 2007, but the deficit in 2007 was $161 billion. This year it's $1.5 trillion.

MR. GREGORY: This is the question, I guess, Senator Hagel, is this extreme principle or is this a form of taking an issue and using that issue to say, you know, absolutely no give no matter whether there's a crisis looming financially or not.

SEN. HAGEL: Well, first, democracies can only work through consensus. There is no way it can work in any, any other form or fashion. Doris talked about it. Second, there's another dynamic to this, too, David, we haven't touched on yet, and that is that we are trapped in a 20, 20th century government structure, trying to deal with 21st century challenges, issues, and problems. And you can take down all the committees and all the dynamics and the rules in the House and the Senate and so on, the fact is, we've got an institutional problem as well as a personal problem. The only other thing I would say about consensus and compromise is--Doris, again, mentioned this--when you look back in the history of this country, as John McCain once said, "Politics is not beanbag." And it's been rough. It's been rougher actually than when we've seen it today, quite frankly. It's just more immediate today. There are more cable television channels, there are more pundits, there are more people who think they know everything about everything. And, and that's, that's one of the big, bit differences. Now that doesn't dismiss or excuse what happened between that exchange that you showed on the TV.

MR. GREGORY: Right.

SEN. HAGEL: But consensus is absolutely...

MR. GREGORY: Yeah. Right.

SEN. HAGEL: ...essential if we're to move this country along.

MR. GREGORY: Go ahead.

MAYOR BOOKER: I'm sorry. I'm a little disgusted and a little angry because I see what's going on every day. We have a situation where Rome, our capital, is fiddling with itself while the nation is burning. And we talk about our grandparents' generation during crises, during the Great Depression, we built the Hoover Dam, Empire State Building. And here I see in my cities, around America and mine, infrastructures crumbling all around us. We are a nation that, in that generation said, you know, "We're going to go to the moon. And we're going to do math and science and make sure that our kids are prepared to go there." But right now what's happening? Nations are passing us in droves. Over eight different countries now have a higher proportion of people graduating from college than we do. So we're all, again, we--our central capital is fooling around on issues that are perfunctory, as you said. Meanwhile, we're lacking what's best about America. What has made this nation strong in generations past is our courage to take on the tough issues, to plot a course, and to push our nation, nation to the front of the global context. And this is what America is hungering for. Not these party debates, but a larger vision. And the, and the Republicans are right. And I'm the first Democrat to say that. That we have a nation that is drowning in debt. We've seen this in New Jersey as us racking up entitlements that we cannot afford to pay for. We have to deal with these difficult problems. But we also have to do something that's going to inspire our country again to dream of who we can be in this nation. And, and that's not coming from Washington right now.

REP. KINZINGER: And it's sad to see our space program--I mean, we saw the last launch of the shuttle. But because of, of the kind of red ink that we're drowning in, we can't even really afford to go to space anymore.

MAYOR BOOKER: But there are practical solutions. I mean, to see a Simpson-Bowles Commission come together and lay out some practical solutions and as soon as it comes out, the left and the right both attack it for not, for not, not...

MS. MITCHELL: And in fact, there is some criticism that is, that is probably warranted, that the White House was pretty much silent on that. Simpson and Bowles came together, there was the Rivlin group. There have been several documents, including the Gang of Six, although Democratic leaders in the Senate certainly viewed the Gang of Six coming out with another document this week as unhelpful because it changed the trajectory of the conversation.

MAYOR BOOKER: But give Obama some credit, though. He's being attacked, not just by the Republicans, he's being attacked by his own wing by standing up and saying, "You know what, there's got to be a pragmatic principled center."

MS. MITCHELL: Well, now he is.

MAYOR BOOKER: Right.

MS. MITCHELL: I'm just saying that there was a moment there back when, initially, that commission would've had enforcement if Republicans hadn't bolted. So the president was left with the problem of creating a commission which had no enforcement mechanism, had no staffing, basically, and eventually did come out with a product which at least was a taking off point. The president did not jump in at that point, is the criticism. That said, the president and John Boehner are now clearly are looking to independent swing voters, the healthy middle and disgusted middle of the country, and were looking to try to bring their groups along. But they didn't have the power to try to get liberal/progressive Pelosi Democrats, however you want to phrase them, in the House to accept...

MR. GREGORY: Let...

MS. MITCHELL: ...the really tough entitlement cuts up front and more importantly, probably, John Boehner couldn't get the House caucus.

MR. GREGORY: Doris, let me ask you, I mean, the conversation also extends to if there's--if the left and the right are taking over, is there room in the center. You raised this when we were talking over the weekend. Tom Friedman in his column in The New York Times today has this as a headline, "Make way for the radical center. A third way is now on the way." Is it real? Does that really reflect where Americans are?

MS. GOODWIN: I think it does reflect it. I think Americans have a basic sense of fairness. They even did some study of our DNA that says, as primates, we care about fairness, which is one reason why I think the country now is saying that Obama is speaking more to where the majority is by demanding both a combination of cuts and revenue increasement. But what you need then are people in the middle too often seen passive, they're defensive. You need passionate centrists. Somebody said to me, you need raging centrists. If somebody could come out and have the passion that Teddy Roosevelt had, he was absolutely in the center of the country. To the left of his Republican Party, to the right of the Republicans, he called for a square deal. Harry Truman called for a fair deal. That's what you need, people who are proud of being where that country is. The country's in the center, the country wants them, but too often the people with the passion are on the left and the right and the middle guys are trying to explain why we're in the middle.

MR. GREGORY: Well, Congressman, can I ask you one question?

REP. KINZINGER: Sure.

MR. GREGORY: What about the dynamics in the House right now? There's a feeling, and there's been some interesting analysis about this, that for this freshman class right now, which you are a part, you don't feel like you've got there because of John Boehner. He's there because, in effect, tea party folks like yourself or with those sentiments, sort of allowed him to be there, and, and he, he, he goes against that group at his peril. He can't bring them to the table to say, "You will support this," because he knows that he's part of the establishment, in many ways, that you and your colleagues are bucking against. Does that create a dynamic where getting compromise is that much more difficult?

REP. KINZINGER: You know, I know that's kind of the feeling, but I can tell you, look, the--Speaker Boehner has been a good leader in saying, "I want to hear what the sentiments are. I want to reflect"--I mean, we have amendments to appropriations bill that were never allowed on the floor of the House of Representatives for the last number of years. It's an open process now. He really is open to saying, "Let the House work its will." He's said it a number of times. But I can tell you, my allegiance is to the 11th congressional district in Illinois. And I think the allegiance of the people that I've seen, you know, understand that they're representing their districts. Now, again, even within the freshmen class, there's people on kind of all sides of everything. But that's what's great about this country, and we do have these discussions.

MR. GREGORY: Senator Hagel, your former colleague, Alan Simpson, who was part of the deficit commission, was asked by Time, Time magazine whether he'd run again. You're out of this game, as is he. This is what he said. "Would you run for office now?" was the question. His response, "oh, hell, no. Now it's just sharp elbows, and instead of having a caucus where you sit down and say, `What are you going to do for your country?' you sit figuring out how to screw the other side.'" Would you, would you join this party again?

SEN. HAGEL: I think Al has very eloquently stated the case as he is wont to do. He's right. This is scripted politics. This is a scripted political dimension, forum, caucuses give the members talking points. And you don't stray far from the left or the right of your party. You are actually penalized when you, when you actually question your party or question your administration. I once said, and it got a lot of attention in a hearing regarding Iraq in the Foreign Relations Committee, if you did not want to make the tough choices and make the hard decisions and the tough votes, then go sell shoes. Well, I heard from all the shoe people, but I actually used to sell shoes. So it worked out all right. But that's the whole point. And until--you know, we can talk for hours and hours about this, but until you get back to the one common denominator, you come to Washington to make a better world.

MR. GREGORY: Right.

SEN. HAGEL: To govern, to compromise, make it happen.

MR. GREGORY: But...

SEN. HAGEL: Not a political statement.

MR. GREGORY: What...

SEN. HAGEL: That's the problem.

MR. GREGORY: All right, but Mayor Booker, let me ask you this. For a lot of younger people, you know, who are looking at the political system and are disappointed, what is the way out of this? Because voters, members of the public, have a real stake in actually changing this by creating more space for their elected officials to do the right thing.

MAYOR BOOKER: Right.

MR. GREGORY: So what is that path out?

MAYOR BOOKER: Well, a few things. First of all, one of our presidents once said, "There's nothing that's wrong with America that can't be cured by what's right with America." Right now our nation is suffering from self-inflicted wounds. We are wounding ourselves by creating crises that do not have to exist. And so what we need and what I hunger for from Washington, and this is why President Obama right now is exciting me, his leaders, they're not just going to follow the polls, not going to just appeal to the sanctity and safety of their base, but willing to venture out and stand strong on principle even if it means sacrificing political capital. That's what Washington needs, that's what America needs. And for young people who are considering getting into the game, they need to understand, number one, we get the government we deserve. We are a democracy.

MR. GREGORY: All right. Let me--I want to get a quick break in here. We're going to come back with our Trends & Takeaways, a look at what was said here today and what to look for in the coming week. Plus, what are the hot political stories trending this morning? That's what we're talking about. It's right after this break.

(Announcements)

MR. GREGORY: We're back with our final moments with our roundtable. First, our Trends & Takeaways, the news this morning. The top story this morning, of course, the ongoing debt talks. We spoke with the White House chief of staff, Bill Daley, also Senator Coburn, on whether a short-term deal is possible. This is what they said.

(Videotape)

MR. GREGORY: The president would veto a plan if it does not extend the debt ceiling into 2013?

MR. DALEY: Yes, the president believes that we must get this uncertainty in order to help the American economy and help the American people...

(End videotape)

(Videotape)

SEN. COBURN: First of all, I think that's a ridiculous position because that's what he's going to get presented with. That's the compromise way through that's going to build the compromise.

(End videotape)

MR. GREGORY: Still a stalemate here, Andrea.

MS. MITCHELL: I think there's going to be some compromise which will be shorter term than the president wants. They're going to have to agree with it. I don't understand how 236 members, by the way, sign a pledge of no taxes before they even start coming in to compromise. But there's going to have to be some shorter term deal that they're going to have to deal with.

MR. GREGORY: As you know, every week we check in on the conversation that's going on online as we're having our conversation here. And we checked in on Facebook. The question we asked the folks there is, "Where do you think the debt talks go from here?" We like Brian J, who said, "The quote attributed to Winston Churchill--Doris should like this--will come true again. `You can always count on Americans to do the right thing after they've tried everything else.'"

And to the trend tracker, the top political stories this morning, and you might imagine what we've talking about, the debt talks, number one, on the--going on this weekend. Also on the list, Representative Wu from Oregon, he's been accused of some unwelcome sexual advances toward a teenage girl. He [spoke] with Speaker--excuse me, a leader of the Democrats, Pelosi, over the weekend. This was said to be a daughter of a donor, a high school friend of Wu's. He is saying it was consensual. Still a lot of questions about this. He's coming back to Washington to figure out some of his options. Also, General Shalikashvili on the list at number three, former chairman of the Joint Chiefs of Staff, on this program four different times, and he has passed away. Certainly an important figure, Andrea, as we look back.

MS. MITCHELL: A major figure. A Polish immigrant, 16 years old after World War II, comes and becomes the head of the Joint Chiefs, and really helped with the Balkan Wars.

One other quick point, why do we have a debt ceiling? We're the only major industrial country that does. Let's just get rid of the thing, people are saying. Only Denmark does...

MR. GREGORY: I think we've--we, we may have time to take that issue up when we come back next week. Thank you all very much for a thoughtful discussion this morning.

Before we go, on Monday we announced an exciting new partnership with Facebook. We're going to be teaming up for an innovative and interactive debate that I'll be moderating the Sunday before the New Hampshire Republican primary. And as the saying goes, all politics are local. But in this case, all politics are social. That's why we need you to be involved. So be sure to visit our Facebook page now where you can suggest questions and your ideas for the debate, and check back as the date approaches for some other innovative ways you can participate. It's at www.facebook.com/meetthepress.

That is all for today. We will be back next Sunday. If it's Sunday, it's MEET THE PRESS.