where would america be if he did not help out, the certain stimulus plans to have that he made for the american public so that they could have, given unemployment, he did extra money -- eight so we have to jump been for a response from mr. jacobson. guest: one point the caller makes is probably valid, which is that the voters were definitely frustrated and they were angry this year. and since the democrats controlled chambers of congress and the white house and majority of governorships and a thin majorities of state houses and senate, they definitely took the brunt of that. but if you look at some of the polling, it seemed like voters broadly and not necessarily enamored of the gop, either, but they are the out party and it was time for a change and with a fairly high degree of unison singing did the other guy that

shot. even though they don't necessarily agree with all the policy position but they were frustrated. host: "the orange county register" has a story about the prop. 25 debate. here is how brian joseph writes this morning. in a year of big republican wins nationwide, democrats here bucked the trend, regaining the governor's office, and a growing majority in the assembly. democrats will have won every single ounce -- constitutional office in california this year but for democrats who control the legislature, nothing tops the passage of proposition 25. the have and comments?

guest: don't know much about proposition 25, afraid to say. host: and "the washington post" talk about the school vouchers in colorado. our last call is from cleveland, tennessee. caller: we are tireds rhetoric. we are tired of people by king instead of trying to do good for the country. i have been a democrat for 42 years. i voted republican this year. i will never go democratic again because of all the arrogance that i see in this party. another thing, i am so upset. our president does not even go to church, but yet he is going on this foreign thing to a mosque. give me a break. that is exactly why he is left.

i think he ought to stay there. that is it. host: thank you, mary. the democratic governor pat quinn is on the front page of the "chicago tribune." guest: that was a striking results. it was close, but here you have a not especially popular governor in a state that is -- was in such a people about corruption. and he is clean. it is not personal about him. you certainly saw in the senate race with the gop candidate winning -- it was quite an achievement for him. host: we are out of time now. a quick analysis about what happened at the state level is

-- guest: there is an undertow >> tomorrow no, executive director of families usa talked about how progressive groups see the future healthcare. we examine president obama pasta foreign-policy. james martin discusses the hope that house republicans will repeal the health-care law. >> next, press botox about the attack october unemployment rate. then remarks i ben bernanke.

after that, the form on the midterm elections protec will take a look if the freedom of women prepare. president obama on the october unemployment numbers. their report the biggest increase them by months with the highest increases in education and healthcare prepared the report the unemployment rate in mind that -- remains an 9.6%.

>> good morning, everybody. we are in the middle of a tough fight to get our economy growing so businesses can open and expand, so that people can find good jobs, and so that we can repair the damage that was done by the worst recession in our lifetimes. today we received encouraging news. we have now seen private sector job growth for 10 straight months. that means since january, the private sector has added 1.1 million jobs. let me repeat that. over the past several months, we have seen over 1 million jobs added to the american economy. in october, the private sector has added 159,000 jobs. we learn that businesses added more than 100,000 jobs in august and september as well. we have seen for months as

private sector job growth above 100,000. that is the first time we have seen this increase in four years. that is not good enough. the unemployment rate is unacceptably high. we have a lot of work to do. there is a great deal of hardship and millions of people are out of work. to repair this damage and create jobs, we need to produce growth and create jobs at a faster pace. an encouraging job report does not make a difference if you are one of the millions of

people that are looking for work. i will not be satisfied until everyone looking for a job can find one. we have to keep fighting for every opportunity to get this economy moving. as we pass this on a jobs bill based on ideas of both parties, i am open to any idea and proposal, any way we can get the economy growing faster so that people need work can find it faster. this includes tax breaks for small businesses so they have an incentive to expand and hire as less tax cuts to make it cheaper for us to start companies. this means building infrastructure for high-speed trains and internet so our economy can run faster and smarter. it includes promoting research and innovation and creating an incentive and growth sectors like clean energy. it includes keeping tax rates low for middle-class families

and extended unemployment benefits to help those hardest hit by the downturn was generating more demand in the economy. it is clear that one of the keys to creating jobs is to open market to american goods made by american workers. our prosperity depends not just on consuming things but also being the maker of things. for every $1 billion we increase in exports, thousands of jobs are saved your home. i set a goal of doubling of exports over the next five years. on the trip i am about to take, i will talk about opening markets in places like india still american businesses can sell products abroad to create more jobs here at home. the most important competition

we face will not be between democrats and republicans. our success or failure in this race will depend on whether we can come together as a nation. our future depends on putting politics and decided to stop problems and worrying about the next generation rather than the next election. countries like china are not standing still. we cannot stand still either. we can do that if we can work together. not only will this country recover, but we will prosper. i am looking forward to helping drive some markets open and help american businesses put people back to work at home. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> now the federal reserve chairman ben bernanke speaks to students at jacksonville university in florida.

this incomes two days after the fed policy-making panel voted to buy an additional six and a billion dollars in bonds over the next eight months to help -- $600 billion in bonds over the next eight months to help stimulate the economy. >> i do not want to spend all the time talking at each. i bet i've talked to -- i thought i would talk for a few minutes and then i will be happy to take questions after that. the federal reserve has two brunn functions. the first one is to promote financial stability. that is what the federal reserve was founded four. there is a crisis in 19 07. -- 1907. leaders got together to figure how to structure this instability.

there is another crisis in 1914. it the fedders is being created at that time -- there was another crisis in 1914. the fed was just being created at that time. -- there was another crisis in 1914. the fed was just being created at that time. the fed did not do is stop during the great depression. i will talk more about that. one of the major features of the great depression was a near collapse of the banking system which led to a collapse of the money supply. the federal reserve has basically two tied it kills the we can use to maintain stability. -- two types of skills that we can use to maintain stability. if you think about what a baby

does, they take short-term money and invest it in long-term liquid assets. there is a problem and that transformation. it depositors to lose confidence in the bank, they will demand their cash. if the bank only has long-term assets, it and not able to pay off the depositors and it will sell. with a lender can do is provide cash, taking the long-term assets. it allows the bank to essentially make liquid the assets and pay offhe depositors to stop the run. we know from several hundred years of monetary theory that the way to stop the panic is to lend freely to institutions that are temporarily liquid.

the other told the fed has -- tool the ban has is that it is a regulator. there are earnings, liquidity of bank holding companies. in tryingo insure that things are safe and sound, we tried to prevent financial crisis. the other main task that the fed has is the macroeconomics task. congress has given the fed a dull mandate -- duel mandate, maximum employment and price

stability. that means keeping inflation low and stable. you are all familiar with monetary policy. they will be able to manipulate the short-term interest-rate. that helps the fed keeps the economy on an even keel so that we have neither too much inflation nor too little. those are the two broad tasks that the federal reserve does. in the last three years, we have been faced with extraordinary event and have tested both sides of that mandate to extreme degrees. on the financial sbility side, we used all our tools. when the crisis began in august of 2007, some of the first problems were liquidity problems in the banking system.

this is what we learned about in studying a book called "lombd street." they can provide the telecast to their creditors. we created an auction facility that will provide large amounts of cash and allow banks to become more liquid and more stable. the problem was that the crisis morphed into a much broader phenomenon. entire1930's, the financial system was made for the banks. if you stop the depositors from running, you stop to thpanic. -- youtopped the panic. one of our most significant runs we had in 2008 to place on

money-market mutual funds. they are mutual funds with very liquid shares that their depositors put in. they invested in short-term safe assets. following the collapse of in 2008, theys who in 2008 lost money on commercial paper that it held. suddenly come ift cannot pay of the depositors -- suddenly, and they could not pay off the depositors. that created a new run. they are major suppliers of cash to corporations. the commercial paper market rose up. the fact that our modern system has all kinds of institutions

that have been quite futures and more illiquid assets meant that this iran problem -- run problem began in other contexts. the same thing happened with aig or they were funding on a short-term basis and they had a liquid -- illiquid assets. it was a panic generated by the withdrawal of cash to gi. we went tough a whole series of programs to try to get the markets working again. for money market mutual funds, we were able to lend to them so they could pay off their depositors. it is supplemented where the treasury ensure the deposits.

in the commercial paper market, the allow corporations to meet their financing needs. they need the cash to pay off their creditors. we expanded it to a wide variety of institutions. working with the treasury and other banks, we helped to stop the panic of 2008. we need to know when to make loans to provide the leers to stop the panic.

i mentioned the other part of our tool kit for dealing with financial instability, our supervisory tool kit. we were examining what was going on at other financial stitutions and trying to figure out where there were problems. a very important example was in the spring of 2009 when we and the other agencies did a stress test. we took all the biggest banks and we did a simultaneous and evaluation of all their assets and losses and we publish that information for the public. it had a great effect. investors had the information they needed about the health of the banks. any problems or taking care of. the other banks found they could go to the stock market and raise new capital. they were able to do that. we are able to help stabilize

the banking system. going forward, the fed has even more expand its supervisory powers in part because of the result of the new legislation. we will be looking at a number of other kind of institutions including non-banking institutions if they are deemed "systemically critical." we have broader authority is going forward. we are working with our counterparts in switzerland to set of new capital standards. the more painful, the saker they will be due the more they have, if the state bird they will be -- the more they have, the state

for they will be. the other part of our general assignment as the macroeconomic part. when the crisis led to a deep recession, and the financial crisis in 2008 led to a very sharp global recession that lasted to 2009. they tried to provide support for the u.s. economy. we cut interest rates sharply. we kept them before the height of the crisis. -- cut them before the height of the crisis. before december 2008, we have cut the federal fund rate than

we used to target financial institutions to almost zero. with that interest-rate almost at zero, some people might say the fed to go home. there is nothing else they can do. we took addition steps. we developed a new type of policy that involves buying long-term securities such as mortgage-backed securities guaranteed by fannie mae and eddie mac for treasury securities, government debt. we purchased those from the market and brought them in. we provided more support to the nancial markets. we did some very big step along those lines in march of 2009. at that time, the economy was in bad shape. i do believe this actions did

help. they brought down interest rates. shortly after, we saw the to recover.in even though we were at ze, we had an additional tl that lets as provide further support for the -- that t us provide further support for the economy. even the economy is no longer in a recession in the sense that it is expanding, it is not growing very fast. as a result, the unemployment rate is coming down very slowly. when it the mandate is maximum unemployment -- one of the mandate is to provide maximum employment.

we are showing in sufficient stimulus. to provide additionaltimulus, the federal market committee voted to increase to buy additional securities in the open market with the goal of reducing interest rates, providing more stimulus, and we ho to treat a faster recovery and inflation rate coistent with long-term stability. we will review bacthat. it has been an interesting three years. we are doing what central banks are supposed to do.

the nature of the crisis means we have had to use a whole lot of approaches that ha not been used before by the federal reserve. that is very important. let me just got there. that is a quick overview -- let me stop there. that was a quick overview. that msee if anyone has any questions. >> thank you for coming. you have mentioned that the federal reserve sees an

extended time of low inflation which could threaten the economy. i see commodity prices skyrocketing. a feeling that commodities such as cotton and sugar -- you look at commodities such as cotton and sugar, it seems like producers are eating most of the price increase. i think that could be trickling down to the consumer next year. do you see any possibilities to that threat for low inflation? do you think there is a possibity of higher inflation next year? >> er right. the one exception to the general observation that is coming down is that globally traded commodities like energy and food have been going up pretty sharply. the supply and demand is determined oa global level. a emerging-market occurring quite quickly. the demand is pretty strong.

that will be contributor to inflation in the year west it will affect -- inflation for the year in the u.s. it will affect it. there is a lot of slack in the economy and excess supply. it is very difficult for producers to push through to the consumer. most of the costs the producers have our labor costs. productivity has been growing strongly. the cost of labor per unit of production is actually falling in some cases. you have higher energy and material cost. you put that together and you do

not expect to see very much inflation to final goods and services. inflation is going to stay quite low going into next year. commodity prices are an issue. i think it'll take at least some further growth and a reduction in slack before we start to see any kind of inflation pressure. th we will have to b sure to modify our amount of stimulus to make sure we maintain stable prices in the long term. canybody else? >> good afternoon. my question lies with what you

did with the "washington post." your answering the people about the six and a billion dollar purchase of securities. your company -- $600 billion purchase of securities. you said your company was confident. how will you do it? >> whathe purchases do -- if you think of the balance sheet, on the asset side of the dollar sheet we get the dollar security. on the liabilities se, to balance that, we create reserves in the banking system. what these reserves are are essentially deposs at commeral banks go with the fed. the amount of cash in circulation is not changing. banks are holding more reserves

with the fed. the question arises of what happened when the economy is growing moreuickly and it is time to pull bk the monetary policy accommodations. the are seval tools that we have. the first one is that the main thing we need to do when it is time to do it is raise interest rates. that is what we always do. even though there is a large amount of excess reserves, can we raise interest rates? the answer is yes. we have been giving the authority by congress to pay interest to the banks. if we wanted to raise the short- 2% -- they would

have no incentive to take them elsewhere. by raising that interest-rate, we could essentially raise short-term interest rates throughout the system. that is basically what the fed does one ever it tightened monetary policy. -- whenever itightened monetary policy. and have a large amount of reserves, it could be that some will leak out even those we have raised the interest rates that we pay. we also have developed a number of too to drain or immobilize the reserves of the cannot go out into the economy. one way we do thaty treating time deposits. inurbane he can have a regular -- creating time deposits. in the bank, he can have a

regular deposit. they can hold reserves with us for three months or longer. by doing that, we freeze freezer so they can not do it. one way is to do by replacing reserves with other types of financing. we can borrow from money market mutual funds. we have a variety of ways of draining those reserves. finally, if we wanted to do additional training, we could sell the assets that we owe. if we sell the assets, that will tighten policy in a few ways the . when you sell assets, it distinguishes the reserve.

assets and liabilities will both come down to get there. we have the these three broad tools. we pay on raisers in order to tighten financial conditions. tools we have to immobilize them and sell assets. we have plenty of tools. we have done plenty of work to make sure they are tested. we he tested them successfully. we are comfortable that we will be able to do it when the time comes. >> thank you. the university of florida. my question has to do with the decision to buy $600 billion in securities. there have been some complaints from developing nations, particularly in south america and south korea, that this

decision might create some sort of influx of foreign capital that could inflate assets of bubbles. my question is not about your opinion on that and how the open market committee factors things like that into their decision making process. do they take those things into account when they are deciding to buy its assets? how big do these thingsactor into the decision making process? >> the first goal the we have is to meet our mandate to get price and maximum employment and gi. a strong u.s. economy is critical for the global recovery. in that respect, it is very important that we do achieve a successful recovery in

the u.s. with respect -- in the u.s. with respect to the dollar, that is where the fundamentals come from. we are certainly aware that the dollar does play a special role in the global economy in the international financial markets. there must be someone else with a question. there we go. >> mr. chairman, i am curious how you think the results of the midterm elections will affect fiscal and monetary policy in the next six months. >> the federal reserve is totally non-partisan. we work with both parties. we work with the administration and the congress.

we do not make political predictions. our basic goal is to do what we can to suprt the economy, to create employment opportunities and price stability. we want to work with the administration to get as much help and the policy and growth as we can for the rest of the government. we are nonpartisan. we were equally with all members of congress and the administration. ? >> my question is not on the second round a quantitative easing. i want to know about what you are facing. when he bailed out aig, you are facing opposition. -- when he bailed out aig, you were facing opposition. why did you did it? what is your reaction?

we took the action. i do not know where you get the idea that our advisers were against it. they were not. you know, when the lessons i've learned -- before i became chairman, alan is a professor. one of my major interest was economic history. i read a lot on the great depression. i took to lessons from the great depression. one is that monetary policy needs to be supportive of the economy. it was incredibly tight in the 1930's. the the other lesson was that broad based financial crisis is destructive to the broader economy. this has been learned over and over again in many other contexts. it is important to try to prevent a systemically

important and critically interconnected firm from collapsing in the middle of a broad panic me. the whole system was under a lot of pressure. we are doing our best to prevent a disorderly collapse of a financial firm. there is no doubt in our mind that we needed to do what we could. the tools were very limited. a very important development in the newdodd/frank reform -- willank reform let us do it in a way it did not leave this in that kind of situation. that is critically important. in 2008, we did not have such

tools. it applied only to banks and not aig or other non-banki firms. we did not have good tools. the only till we had -- tool we had was to lend money. aig was facing a run. catches flowing out. cash was flowing out -- cash was flowing out. to stop that you wind against capital. this is one of the largest insurance companies that had attached to it in one relatively small division that was making very danrous that the bill -- dangerous thabets.

it was an ongoing viable enterprise. the company itself the become collateral for a loan. we have the act in place at that time. knew that if the company collapsed on top of the lehman collapse that very likely the financial system would collapse. then we would have faced a much worse econom situation. we did it because we knew if we let the company collapsed that

the danger to the world economy was an enormous burden o we did it. that is unwinding. the federal reserve will get that loan repaid. we succeeded in avoiding the financial meltdown. it is somewhat of an unpleasant experience. you asked about the bonus issue. it was a bad judgment on the the management. when i learned about that, there is legal action we could take. i was told there was not. it is a relatively small amounts of money.

it created a lot of resentment and anger among the public. that is understandable. in that respect, it was a bad event. after that happened, the treasury began to formalize its management and compensation for other companies that have received help. that has not been the fed's problem for quite some time. >> hello. how do you think the high level of growth in china will affect the future? how will it affect the fed policy in the future? >> emerging-market are growing very quickly. that has a number of attacks. one is that it raises commodity

prices. that is an issue. it serves as an engine of growth in demand for the global economy. having growth in emerging market is basically a good thing. at a fundamental level, 20 years ago we were talking about developing countries and billions of people in serious poverty. it is brought many people from abject poverty into a decen living standard. in that respect, it is very positive but bil. more generally, it is good for the global economy. another country does well it

does not mean we are worse off. the better global economy, the better opportunities we have to trade and invest. there are a lot of issues. a well functioning chinese economy is good for the united states. if it strengthens, we take that into accou. our focus is under development in the united states. this factors and to our analysis this is how we make -- analysis. this is how we make our policy decisions. >> i was wondering how the new

legislation will in fact how the fed deals with acid bubble's going forward? >> there is a very important philosophical change in our regulatory system. ior to the legislation, individualgencies focused on just those market for which they were responsible. the banki industry's but at the banks. the trading commission looked at the changes. insurance regulators look to the insurance companies. there are a couple problems with that approach that became evident. the consistency of regulation as very and even.

while some -- of any eveuneven. some were falling between the cracks. this is a much broader and bent been a single institution prevent it requires great complex interaction. there is nobody looking at the system as a whole. subprime mortgages were a problem for a wide variety of institutions. they are looking at it for a system wide perspective. a very important element d dodd/frank is to create a

macro prudential approach. it is tryo look at the system as a whole. there a number of ways that can haen. when it the most basic is that the legislation creates a new council. it will have the major agencies including the fed and treasury. it will meet regularly and tried to talto each other and identify the problems like a housing bubble. by comparing notes and working together, we should be better able to identify the problems. we cannot guarantee that we can see everything that will happen. it is very important that

legislation takes a lot of steps to strengthen the system. i mentioned the basel capital rules. it is a two-pronged approach. the federal reserve is doing is within our own approach to the get the system as a whole and identify risks that are emerging. on the other side we want to do everything we can to strengthen the system so it can withstand better than it did the past few years. >> university of north florida. my question about your 2002 speech and making sure deflation does not happen here. you stated japan's economy faced

significant barriers to growth. you mentioned included massive financial problems and the banking sector and a large overhang of government debt. in a policy makers reluctant to use fiscal policy. he felt the u.s. did not share the problems. do you still kill the way? -- feel that way? >> i think japan has a number of strengths. it is still a very rich economy. one of the main problems that japan has is demographics. japan is getting older. to the extent it has worked for us and is on the brink of shrinkin

that is one major problem that japan h the we do not have. it is close to 200%. thatis offset by the fact the zero most of their own debt. in the u.s., the ratio of debt to gdp is much less that has been rising produced the get me. in addition, we have some long- term issues that we need to address. i'm glad you read my speeches. i am impressed. recently, i've given some testimonies that address the need that we have. i think everyone understands that we need to do with our alarm term fiscal issues. we are not yet to the 200%

level. we need to take action to bring our long-term fiscal and balances into better alignment. otherwise, it could lead to very severe problems. >> thank you give as yet seen the commodity prices rise, it seems a lot of people move into gold because of fears of possible over inflation. it seems a lot of these investors still quantitative easing may be too over inflation. is there anything to minimize this over inflation? >> absolutely. we are absolutely committed to keeping inflation low and stable. we have the tools and wind and

tighten -- and unwind as the time comes. there is the question that we will be able to manage that. it is important to understand that inflation expectations remain really quite low. one example would be the inflation rate evens, the different between the yield on regular nominal treasury bond and inflation indexed bonds. it is an indication of the amount of inflation that investors expect over the next five or 10 years. that is still below 2%. investors think that inflation will stay low.

if you look at the surveys for consumers and businesses, you do not see any contradictions. with a pet owners to try to predicted overlong times -- we also look at business owners who try to predict it over a long amount of time. if that in both directions. they also protect against further declining inflation. it is important for the fed t keep inflaon expectations will anchoredn stable. i think a are stable. we will work to keep them there. >> good afternoon. my question regards the housing market. what kind of timeline to you think the united states is

looking at in order for the housing market to recover where property owners and start to see some appreciation in the property? >> that is very difficult to know. right now, construction is basically lower than any time since world war ii, even during times of our population is lower than it is today. we have a growing population. we have households being formed. you would expect to see house prices normalizing. the problem is that we still have some steps to go before we get there. we still have a lot of foreclosures in the process.

that takes time for the market to adjust to that. when you have aot of foreclosed homes, that makes it more difficult for new construction to be marketed. we do have some important problems before we can get out of the current problems in the housing market. eventually, we will. we have to. our population is growing but from natural increase and immigration and the 1e places for people to be housed. >> i know we want this session keep going on and on. we have to put an end to this. i am sure everyone agrees with me that this class is so special. it is a wonderful opportunity and experience for all of us.

let's think chairman bernanke for coming over here and being with us. [applause] then a simulcast of today show. up next, tuesday's election. this weekend, nigel hamilton talked about the motivation, achievement, and their years. he is interviewed by richard norton smith prad. >> this year documentary competition is in full swing. they tied to a man and video. we did make a five to 8 minute

video. upload your video before the deadline in january 20 to win the grand prize. there is $50,000 in total prices. it is open to the middle and high school students. for all the rules, go online to studentcam.org. >> nancy pelosi has announced she will run for the minority leader's position we talk to the capitol hill reporter about upcoming changes in the house socratic leadership op. >> we have heard and nancy pelosi will be seek to remain the leader. >> she is been talking to members of her caucus. and number of them are close allies including george miller.

they are taking the temperature of other members but sheep pills like she has sufficient support to do this. >> who might challenge her to do this? congressman suggested he would offer himself as an opponent to her. i do not think there will be any serious challenge to her. i think this is a done she would not announce if she did not have the votes. this is a done deal. this is extremely strong. progressives thought she was unfairly demonized in this campaign and the losses not her fault. >> who is running for minority

whip? >> this is interesting. the current majority leader, steny hoyer, is running. he has not announced it, but you have the current majority whip of south carolina. if folks like cliburn and hoyer, they will be facing off against each other. >> what about the democratic caucus chair? to is aiming for that? >> it is jon larsen from connecticut. he is the current democratic caucus chair in the minority. that is not surprising that he is running again. there is not, as far as i'm aware, any opponent for mr. larsen at this point. he has close ties to speaker policy.

-- to speaker nancy pelosi. i would probably give the upper hand to him. there may be other people jump into that race. i think that you could see additional candidates. as of right now, i do not think that there is anybody who would be a threat to larsen. that could change. i think that larsen has the upper hand. >> thank you for your time. >> thank you for having me. >> now, reporters and analysts from "the weekly standard" and "the washington examiner." from the national press club, this is about 1.25 minutes. >> good afternoon. in the editor of the weekly

standard and it is a pleasure to welcome you to this discussion about the elections last tuesday we will quickly cover what happened and one of the implications. this is an interesting collection. let me welcome you on behalf of the weekly standard. structure, s a pleasure to collaborate >> if you more, to learn these are both top of the line publications, and there are fact sheets in a little packet you have. most of it is true. that me introduce my fellow panelists who need no

introduction. michael barone is a common this -- is a columnist with "the examiner." . he is the editor of the almanac of american politics. i often say this and i will get michael to do this, the author of the best book on the history of american history in the 20th century, called, "our country." it needs to be updated, so people should nag him to update. my colleague fred barnes, who helped me start "the weekly standard". obviously, one of the leading political journalists of our

day. he is the author of an important book on the bush presidency, also a stallworth on fox news. byron york of "the washington examiner," before that at the "national review." he is now at "the washington examiner," and has a platform he deserves. he is a leading reporter and commentator on elections and politics in general. and to my immediate left is susan ferrechio, the chief congressional correspondent for "the washington examiner." before that, susan was that cq

and "the miami herald." she is a first-rate, careful, penetrating congressional correspondent, and she has been a great asset to "the examiner" as well. i will throw a few questions at them and then we will have a discussion and have time for discussions and your questions at the end. i thought we would begin quickly, i assume everyone on the panel has now written about the election, analyzed the result, said everything they want about the findings. let me summarize what happened. and then let me ask each of our panelists, what strikes and the most about what happened, is there anything that is not as noticed as it should have been. let's begin with bair newark. what strikes you most about last tuesday? >> i spent the week before the

election covering the senate races in illinois, wisconsin, and finally in the nevada. what struck me is the atmosphere for republicans was so favorable, and we know in 2006 broke forncts democrats, and this time the numbers were reversed. the atmosphere was reversed. ron johnson in wisconsin could knock off a legendary figure and ross frankel in wisconsin. if you ran a pretty good campaign in illinois, but were troubled, suffering from allegations that he embellished his resonate in ways that did not bring him any benefit. he has a good resonate anyway. but this brought him a lot of grief. you had to run a pretty

undistinguished campaign as sharron angle did to lose, so much so that the number that struck me in nevada exit polls was pollsters ask, you approve or disapprove of the job harry reid did as senator? 55% disapproved of harry reid's job performance. 44% approved, and yet he still won because of his incredible organizational skills, strength out there, and the clout of the casino industry. the thing that struck me over all was victories were out there you ran aen, and yoif pretty good campaign as a republican, you could win. >> most polls -- the one debate

that ankle did pretty well, she was a problematic candidate, but you were out there a day or two before the race. did you expect her to win? >> the stuff i saw on the ground track perfectly with the polls. the six prior polls for the election had angle up, everywhere you went, people would be splitting accept one or two for angle against harry reid. my reporting experience out there seemed to perfectly lined up with the polls, which were wrong. >> the ground game? >> we should give credit to the reporter who covers nevada politics, who predicted before the race for the election that harry reid was going to win. the level of organization in the early voting was incredible, and harry reid was -- harry reid's

campaigned worked with casinos. i worked -- i went to michelle onma's appearance for reid monday. everybody was handed number sheets, the numbers to call it. harry reid did not miss any opportunity to work the polls, and that is what happened. >> ed, what struck you? >> i was surprised by a few of the outcomes. republicans had not targeted some races, and were surprised when there to candidates won. oberstar was beaten in minnesota, and that was a lot -- and that was a surprise. one of the house members that

targeted over the years was a representative in illinois . she was a moderate democrat, and did joe walsh actually won. it has not been declared, but it looks like he is ahead. the race in north carolina now etherege, essman where he allegedly put somebody in a headlock on capitol hill -- >> he was asking the congressman a question. >> he lost to a nurse, who republicans have not figured they were going to win that. there are about six actual conservative democrats in the house, and five of them are gone.

i counted them this way. it did not seem to help them that they voted in most cases against cap and trade, obama care, and they still lost. jim marshall in georgia. the only one that survived was the representative in oklahoma. his father was governor, and he is president of the university of oklahoma right now. republicans did not target him. i do not think they targeted gene taylor. were wiped out. the survey did not say that the republicans would expel the democrats from the south. three seats in virginia, four

in florida, one in alabama, one in louisiana. in most of the states that also won senate seats. the south is gone for the democratic party for the time being. >> what struck me about that -- we will go to michael and a second. even if the republicans had not won a seat in the sow they still -- in the south, they still would have won the house. the damage in virginia was considerable. michael, what struck you? you are from michigan. >> yes, i grew up in canada, and grew up in detroit. i struck historic numbers. we have had two historic

elections in a row. he used the metric of the house of representatives. the state of california takes five weeks to count its votes, so we do not have the full popular vote get. they had elections in sunday on brazile, and they counted and hours. i in five in any case -- and it looks like if you go back to years in 2008, democrats won by 54%, the popular vote for the house. there is a little bit of wiggle about how you tabulate votes for people who are unopposed. that was an historic high. back in 1986, they were winning the south 60%-40%. of course they did not do that anymore. if you take the 36 non-southern states, democrats two years ago

got 57% of the bed. that is the highest in history that never before was achieved. that was a high point for the democratic party. this popular vote looks like it is going to be 53%-44, for republicans. that is equal to republicans in 1994 were little better. before that you have to go back to 1946, when it was 54%-44%. one should add in the 1920's this out cast very few popular votes. the democratic primary was tantamount to election. in fact republicans, if you could somehow virtual allies the southern vote for the preceding -- in some respect this was tied

for the best republican performance in the house pvote for history. it is unusual for american history. he did not find many times we see a party lose 10 points or gained 10 points in an election. i brought obama's election was an historic first and so forth. the performance of the democratic party in house elections during the first two years of his presidency is maybe a historic first as well. republicans perform even better when you go down the ballot. senate seats, they lost a couple senate seats with problematic candidates, in my view. they lost a heartbreakingly close what in the state of washington. when you go down to the state legislatures, republicans seemed to have gained about 150 seats in state senates and more than -- in state houses.

this is more than any time in the 1920's. they gained control of redistricting. i am going to be writing about this for "the examiner," and others have mentioned it. in texas, pennsylvania, ohio, michigan, and also among other states, wisconsin and north carolina, where the legislature -- the governor does not have a veto and the republicans gain both houses of legislature. in state after state of those i mentioned, republicans outperformed what the insiders expected. in my home state of michigan, republicans gained 13 seats at a 110 to take over the house. the political insiders were take tests were saying that was impossible.

just before the election, there was a report that said they had the chance to win them all. they won 20. this is a deep thing. two small points. one possible relevance to 2012, when it is possible that we could have a third-party presidential candidate or a third presidential candidate, which raises the question of, could the presidential election go to the house of representatives? this question was raised in 2000. if so, it is voted on by state delegations. if you have a majority of members of the state delegation, your state's vote goes to your party's candidate. going into this election, democrats had a big had a majority of state delegations. more than 26. now republicans have 33 state

delegations. that may change before the next congress, but it probably will not change a lot and gives the republicans a backstop. finally, i saw the ambassador from finland last night and it occurred to me that we saw a major swing in the distance of large numbers of finnish- americans. bart stupak retired. we have a republican winning in northern wisconsin. david obey retired. in the minister that 8, jim oberstar lost to republican, a former northwest pilot who was described as a stay at home dad.

lake superior is bounded by republican congressional districts. >> the editor of "the examiner" will have an article in monday's issue on the importance of the finnish-american votes. >> i do not think it is that voters report -- voters were embracing republican positions. they would say i feel it is time for a change. we need something to be different in washington. it occurred to me that a lot of the expectations have been built up in 2008, that they saw that congress would function differently this time around,

that they would work together and get the economy going. by the time the election rolls around and the economy is still in the dumps and, chris -- and congress is as partisan as it ever has been. voters were truly exasperated. one case that was clearly an example of that was in west virginia, where governor mansiochin won. he was headed for a loss, and he had approval ratings in the and they did not want him to go to washington, because they thought he was got to follow the democratic agenda. he saved himself by firing a bullet to them markey legislation of the democrats, the cap and trcde lettuce --

trade legislation. things turned around for him shortly after that. he really got the message. throughout this date i traveled and the people i talk to, or folks who democrats, independents, republicans, saying vote the bombs out. you can see in the polling, fascinating polling that came out. 85% of respondents said they would like to toss everybody out in congress and start over. there is an intense level of disgust in the electorate right now. republicans are keenly aware of that, and said there is going to be pressure on them to try to change the image of congress or the next time there is an election they are going to be the bums that will get thrown out. the question is what they can turn the ship around to improve

their image. that is the most significant thing i saw on the campaign trail, the urge to start a new in congress. >> the challenge that john bair and harry reid faces and the administration faces. i was at a panel in the kennedy school -- can you imagine a republican shooting and had -- shooting a gun in an an? the examiner was shrewd about this of a couple levels. senator robert byrd died, and governor manchin appointed a

replacement, and then said he would run for the seat. you can be a popular governor but they may now want to send you to washington if your and the wrong party. if you support legislation by the president of your party. three or four weeks later polls showed that the race was manchin ahead, and voters did not seem like it wanted him in washington. he is an intelligent guy, and he pivoted very sharply and decided that in politics you cannot be too subtle some time, and i am not going to be -- president obama shopped the cap

and trade bill on the air. manchin shooting a gun, and it turned out to be a very shrewd tactic. he ran an excellent campaign to survive in west virginia. now he is the senator from west virginia, and fred wrote a piece about this on thursday. we have democrats who survived the on flight, several of them from distancing themselves from the administration. we should talk about the democrats, their challenges, and the republicans, who had theirs. >> there are a lot more democratic senators up in 2012. there is a target-rich environment for republicans. it gives them a pretty good chance of winning the senate in 2012. right now the pressure is on a

number of these -- manchin being one, incumbent democratic senators up for reelection in 2012 who are either in fairly conservative state or states that trend it in a republican and conservative direction this year. you can think of both nelsons , nebraska and florida, clare macaskill in missouri, one of the most smashing victories was by roy blunt, who won by 19 percentage points. some of the things that did not hurt candidates, the connection to the bush administration did not hurt anybody. the most successful candidate in in country was roab portman

ohio. there was nobody you had a stronger connection to the bush administration. he won by 20 percentage points as well. i am trying to give the other states -- virginia, where you have jim webb, and republicans have already started to talk to these democrats, and what is going to happen is there will be republican senators plus some democratic senators will give republicans operational control of the senate. you can think of spending issues, tax issues, many other issues, even health care issues, on which you will have 55 senators forming a majority, most of them republicans, and eight or nine been democrats.

that is certainly something that i look to see, expected to see, and will not make kerry reid happy. >> already, there is a group of moderates in the senate, the faction that harry reid has already had to deal with. even last year, you had people like ben nelson running the show in the senate. things will come down to ben nelson because they needed that one vote, and just with that type margin. now with the senate, forget it. 46-54, whenever they have. you will see these coalitions building between the republicans and these moderate democrats, who are up for elections. everyone does not want to happen what happened to blanche lincoln. that is the warning for democrats that they need to moderate what they did. it will become a difficult thing for the senate not to swing

right, and i think that will happen. >> the house passes legislation that comes first of the senate, the house will define the parameters, there will be pressure on the moderates to the house legislation, which puts republicans and house in a better position. if it dies in the senate, it dies in a senate controlled by the democrats. if it passes, it becomes bipartisan legislation. >> this is a good dynamic for republicans because they can pass whenever they want in the senate. they have a 30-seat margin. democrats -- this is exactly what the democrats did to them years ago, and they can blame it on the president. it is a good dynamic.

it will be hard to see harry reid -- for instance, the house will pass a bill seemed let's repeal the health care law. can you see harry reid taken that up in the senate? no. then he will be blamed for not getting it done. >> how about we should talk about republicans in the house who have their management problems, and the obama administration? what the fink, byron? -- what do you think, byron? >> house republicans take the pledge to america seriously. the big features are cutting spending to pre-bailout levels with the common sense exceptions with seniors, veterans, and our troops. cuts on discretionary spending,

cutting congress' budget, and repealing obama care. in wisconsin, ron johnson, had not run for anything before, went around the state and every time he appeared he said i got two things on my platform -- i want to repeal the health care long and i want to cut the deficit. all he said. he actually means that. for a white house, just go back to the fund-raiser that the president attended in massachusetts not too long before the election in which he said the country is afraid and that when people are afraid we are hard wired not to think clearly. he clearly believes that the country made a wrongheaded decision and everything that he has said both in his post-

election news conference and in the '60s -- "60 minutes" interview says that he will put the blame on -- in spite of the fact that he gave 50-plus i think you have a recipe for irreconcilable differences because republicans, a lot of these new lawmakers really believe what they are saying. ron johnson said the health care bill was the single greatest assault on the economy in my lifetime. the president cannot back down and say, i guess you are right, i spent a year on the wrong thing. i see irreconcilable conflict. >> michael, you see that? he received some natural legislation being passed?

some things do have to get past, right? there has to be a budget and tax code, right? >> that is right. the initial subject before the plane that congress would be the bush tax cuts. -- before the lame-duck congress would be the bush tax cuts. speaker nancy pelosi did not have it in the house to review all of the tax cuts except for those -- to redo the tax cuts except for those over 215 -- $250,000. it is customary for the speaker not to vote unless it is important issues. she would have to cast a vote herself. i would think they are in a weaker position now on that issue, and in listening to mitch mcconnell yesterday, and john boehner, they are insisting on

having all the tax cuts, and by the way, we will not go along with reducing the tax cut on the high earners for just a year, and the others permanently or for a longer time frame, because you will send up -- such as of 4 a drain on capital later. -- set us up for a drain on. there are some areas -- the house does have this leverage that the vote, and the government needs appropriations. and we need to have tax laws and we need to have the alternative minimum tax fixed every year, which affects mainly democratic constituencies. it is a cut that the democrats need every year and the republicans can make them pay for it in some way, shape, or form. i see some of those things going

along. a couple of things, the republicans are more in line with the president's the stated position on free trade treatment with colombia, panama and south korea. support for free trade has diminished sharply among democrats from 1993 when the nafta treaty, the trade agreement with mexico and canada was passed with support of the clinton administration and a coalition of approximately 135 republicans and 100 democrats. you do not have 25 democrats for that kind of measure any more. and you may have some republicans against it, but that is a possibility of cooperation. the other thing in the exit poll, on the president's course in afghanistan, he has the support of most republican voters and most republican members of congress. he has opposition from most

democratic voters and most democratic members of congress. and i would guess, for the moment, nancy pelosi would be included in that moment. she is not an enthusiastic person. looking ahead, will the president be challenged? there is still the possibility of challenging him in the primary. >> let me hold off on that for a minute. >> ok. >> let's build some suspense. [laughter] on taxes, what will the tax rates be in 2011 and in 2012? the current tax rate? the republicans win? >> i foresee a two-year extension of all the cuts. >> republicans wanted for four years, which would actually serve obama better. the question is weather

obama's ideology stand for him politically, and it may. obviously, he hates tax cuts. it feels like handouts, but those are not tax cuts. they are great cuts. we will see how difficult republicans are to get on a two- year extension because they are really in me an-- really aiming for four four. >> i agree with fred. i think he was hinting, that a temporary extension might work, and obama dropped a few hints about that when he spoke the other day, meaning, just look at all the options. but if he wants a real stand off, it will be whether or not these are permanent. i do not think there will be in the middle ground on that between the two sides. >> but at the end of the day, two years, for years, -- four years, ironically, there was a

bit of economic uncertainty for a couple of years and i think that might actually help the president's reelection prospects. >> that is one reason why speaker nancy pelosi la support. a lot of democratic house members said, -- lost support. a lot of democratic house member said, raising taxes in a sluggish economy is not a great idea. i think the interesting thing to me is that if speaker nancy pelosi could have gotten the democrats' health care in the spring, but they had to do with health care in the spring. why? because they had to deal with cap and trade, which she pushed through the house in june. in retrospect, i think that was a mistake in tactics from the point of view of achieving maximite -- from maximizing democratic achievements.

>> two obvious issues they have to fear, and john boehner you have me thinking hard about. the two -- the tea party inspired members and the caucus is going to be new. as a pure management challenge, you have people integrated into the current structure. a third, that could be a challenge for boehner. it seems the two most immediate versions of that i challenge would be taxes and then the debt ceiling vote. then the republicans do have to unveil a budget. if you control the house, then you control the house budget committee. and paul ryan will throw down a budget around april 1, which wilson be the official budget on february 1. it seems to me there will be a huge amount of pressure on republicans both ways.

you cannot just put it on the president after the campaigning about how obama is spending us into destitution. on the other hand, when you start doing the numbers, it is hard to bring the numbers down too fast on the debt. all the spending cuts when you get into big numbers are politically risky. the tea party guys did not think that they got elected to raise the debt ceiling. i'm curious to see how the debt ceiling raised -- plays out and/or the republican budget. >> the tea party caucus, they could be great numbers because you are to get 52 existing members and many more are coming. they could say, we are not voting for raising the debt ceiling. we will have to stop spending. it could require the democrats to raise the debt ceiling and the republicans to say no and

the democrats could very well say we are not going to vote for this if you are not. it could be a very -- it could very well be a standoff. , and it could be a test of the lawmakers. and the person who is going to have to handle it all is the new speaker, john vader. what is he going to do? -- john boehner. the what is he going to do? he talked to the people on election night and said, "i will never let you down." well, you've either got to raise taxes or cut spending. >> you can raise it for less time that obama asked. there is will room on this thing. -- wiggle room on this thing. enough republicans will vote for it and they can let the tea

party off the hook. they can vote against it and you can let the majority of the hook. republicans have a harder problem, i think, and that is, the things that they believe in, like extending the bush tax cuts and may be other tax cuts and spending cuts, if president obama opted to go along with those things, they will be helping him get reelected in 2012. this was a problem in 1996 when republicans -- trent lott, actually, when he was majority leader -- gave bill clinton, who had vetoed two welfare reform bills, they gave him a third shot at it and clinton signed it. and bob dole, but republican , and wasial candidates t planning to use the welfare issue against him and it was taken a -- taken away.

and i'm sure that bob dole and other republicans are still mad about that, that trent lott should not have sent bill clinton up for the third time, but they were in favor of it. they liked it. >> when you think about the dynamics of the next six to nine months, a player in this is the chairman of the house budget committee. it is the one document that could authoritatively set forth the republican vision, and not just a vision, but the details of the size and scope of government to contrast with president obama. the budget is what trip up the republicans in 1995. they had to reduce the growth in the rate of medicare. that is what started to do you really republican revolution of 1995. ken ryan balance the tea party within his own party? is there a reasonable alternative -- kenny savidge

this as a reasonable alternative to obama? -- can he salvaged this as a reasonable alternative to obama? >> i think, republicans, in effect, had a policy success. they more than us stop spending for a year, which played a large part in sending the budget toward being balanced a few years later. nicolasa some public support -- they lost some public support, but remember, they did not lose 60 seats in the next election. they actually held control of the house. it was not a total disaster. they did not win the presidency, but they all the house for another 10 years. -- held the house for another 10 years. i think republicans are looking out to have paul ryan in there. on the one hand, he is telegenic and has a good personality, but much more important than that, he has a command of substance of

public policy and is capable of arguing his position and debating it civilly, but strongly. we saw that at the so-called health care summit that president obama held. the -- he has also addressed the republicans' biggest problem, if they should achieve the kind of success in 2012 that they would like. that is, how you deal with these entitlements? he's got his road map, which is a long-term proposal to try to bring the entitlements state into a situation of fiscal sanity. some democrats have taken to attacking it. they have not provided alternatives of their own. only a relatively small number of republicans have specifically endorsed it. the inclination of incumbent republicans has been to scare

away from something that might provide fodder for attacks. it will be interesting to see if that idea is embraced by more of these new members of one-third of the republican conference. ryan will be front row and center of any of these fights here. it is hard to imagine how the republicans could have somebody better positioned to do this. >> it seems to me, a lot of the challenge is to sort of embraced -- paul ryan is on the roadmap and explaining it and suggesting it is the way of their futurthe future for repub. i'm on c-span. i should be careful how i raise this. he said, he is very flattered by

fred's piece and it shows that a lot of candidates must be reading it because suddenly on tuesday, his office got a lot of frantic calls from candidates and campaign managers saying, we hear the roadmap is great. but i did not realize there were actual medicare cuts in it. would you explain? i do not think it is really cuts, right? i think is just reforms. and paul had to send a couple of staffers over to the congressional campaign committee. he had to get outside people to brief these candidates about the road map. there was this article that it was a great thing for the future and then they were suddenly getting attacked by their democratic counterparts as if it was in 1995. but didn't democrats lose that fight by being called scrooge

medicare covers? >> i do not think so. as far as keeping the new members satisfied, the republican leadership is going to have to produce actual cuts. the new members lookin, they goo the historic tables of the budget and in 2007, in which the deficit had been falling for three years -- the deficit in 2007 was signed -- was $160 billion and that was after the bourse tax cuts. in 2010, they are $3.7 trillion. they had never gone up like that before end of a sudden they are $1 trillion more per year than they were in 2007. these new guys will not understand how that is the new base line. they will push hard for cuts.

>> in domestic discretionary spending? >> yes. they will exert a lot of pressure, especially agency by agency, to go through and say, how in the world are we spending $1 trillion more than we used to? we understand we airport -- we are spending more on unemployment insurance, but all of these other agencies are spending like crazy. we've got to do something about that. >> do you expect to see the president to be signing some of these cuts in many aspects of discretionary spending? or do you expect another showdown like in 1995? >> if you are talking about a government shutdown, know. i do not think so. -- government shut down, no. i do not disappeared >> at the -- i do not think so.

>> at the end of the day, president clinton accepted a certain amount of discretionary spending. he did not mean it, but he was saying it was a big concession. so far, president obama has not had the tone. >> that is almost a psychological issue of. how much can he accept this, and to what degree can he say he was on the wrong course for the first two years, which he cannot go there. he has come out in favor of freezes in some areas of domestic spending but i cannot see him signing a budget without a lot of fighting back and forth before hand. >> paul ryan says meeting the obligation in year one in cutting spending of $100 billion is easy. he says he will not have any trouble finding that. he says if there are any republicans that object to that, he would like to introduce them to the freshman congressman cutting in, who probably think that cutting $100 billion out of a huge budget that is

approaching $4 trillion is pretty easy. that is not a problem. what republicans are going to give -- i think the plan is to have every week, passed a spending cut. one of them mentioned to me that it might be a cut in the federal aid for national public radio, npr. >> you can call of the one williams -- call it the juan williams bill. they always give them these hokies nagin -- hokie names these days. [laughter] >> and pass one per week and send it to the senate. and if harry reid does not like it, he cannot call it up and mitch mcconnell can use the obscure world and it will be called up and democrats will have to block it. you do that week after week and you can come up with enough popular spending cuts. but to do this for many, many weeks, sounds to me like a pretty good strategy.

>> anyone else on 2011, what to watch for, before we get to my ex-president -- primary challenge against president obama? >> we have the debt commission with alan sisk -- alan the reporting in december. if they come out with some combination of spending cuts and entitlement changes cutting costs, democrats will be resisting the entitlement changes and the republicans will be resisting the tax cuts. -- the tax increases, rather. and we are not going to see anything develop out of this. it seems to me, if you want to try to initiate change, one of the directions you might want to go is a tax reform of the 1986 type. where you eliminate preferences

and so-called tax expenditures. and you lower rates. that is the obvious way to get something that will have important things that both parties want. i'm guessing the deficit commission is not going to give us that kind of proposal, so i'm afraid i do not see much happening on this front. >> susan, anything else we should be watching for? >> certainly, this you cut proposal where people help decide what we cut, i think that was definitely paramount on the minds of voters. i think is a lot more powerful with people. maybe not cutting social security or raising the retirement age, but there are other areas where you see people willing to embrace cuts. and the fact that the president even has a debt commission and is talking about cutting it, i think the atmosphere there were you may see some success in

reducing spending is here. >> michael, you were -- do you wish to jealous about the primary challenge to president obama in -- you wish to tell us about the primary challenge to president obama in 2012? but i do not think there will be a primary challenge to president obama because i find it unlikely that the first african-american president will be challenged in his own party and with a primary electorate in which the average primary electorate is about 20% african-american. it is unlikely. it does seem to me that it is possible that there may be a basis for a challenge from the anti- war left. possible candidates, gov. howard dean, who are think was treated rather shabbily by this administration after a successful run as democratic national chairman kurra. the former senator russ

feingold, as he will soon be, he was a principal opponent in to his credit, took those stands when they were not popular and made a big point of it. he is a person that might conceivably be that way. i think there is the possibility, but i still think it is quite unlikely. >> and on the republican side? >> i think the republicans have an absolutely winning ticket that they could put together. >> let me write this down. [laughter] >> and they could rent -- and they could win pretty easily. that is with jeb bush as their presidential candidate and chris christie as the vice- presidential candidates. the problem is, neither one are going to be running. chris christie said there is a zero chance that he will be running and i personally have talked to jeb bush and he sounds not at all interested in running in 2012. he is a great governor and i think would be a great candidate, but you have got to

run. and he is not. >> the one thing that you get when talking to republicans -- and they basically put a lot of their 2012 concerns to the back of the mine to and after this election. this -- to the back of their minds until after this election. but i do get this sense of how this extreme hunger for someone new to come in and save them. obviously, john mccain is long gone from the picture. but the people that they had, mitt romney being the best known name other than sarah palin from the 2008 race, i think is never going to get people to love him. he has had, a problem connecting with a certain part of the electorate. sarah palin reminds a divisive figure among republicans. not too long ago i talked to the head of the paul maddow family

council, which is the family research council of south carolina and got a sense, that it was evenly divided, kind of half and half about people who wanted her to run the chris christie or paul ryan would run -- who wanted her to run. maybe chris christie or paul ryan would run. somehow i do not think that someone with the name of "bush" will fill the role. >> susan? >> i get the sense that mitt romney is going to try one more time. regardless of who the star canandaigua might -- the star candidates might be, you have to deal with the fact that sarah palin and mitt romney and who knows, mike huckabee. we will have to see how that plays into it. >> it seems like it will be more

like a traditional democratic primary with some people running in some people favorites and some are outsiders. and sometimes the outsiders like jimmy carter win, and others have ups and downs and people go ahead and then mike deane and foster -- and then like carrying and foster. republicans are ludicrously boring. [laughter] mcginn if the nomination and then -- reagan wins the nomination after running the first time. reagan beats bush and then bush gets the nomination. i sort of have the instinct that in the post-obama, in his defeat of clinton, and in this post-tea party and this new era that we

are in, how does not feel like republicans keep wanting to nominate the next in line. also, there is no clear next in line. is sarah palin the next in line? is mitt romney? mike huckabee? >> mike huckabee won seven primaries. mitt romney only won one. >> he won several caucuses, though. >> sarah palin went on the weekly standard alaskan cruise, if i recall. [laughter] since the report -- the weekly standard has led the nation on the issue of e sarah palin candidacy, what are my colleagues views of the potential for that in 2012?

>> colleran's district is on the lake, right? >> yes, in michigan. -- paul ryan said district is on the lake, right? >> yes, in michigan. >> she would probably do well in iowa and south carolina. you have iowa first, and then new hampshire -- i guess you . . of latter-day saints in the last primary. >> if mitt romney is running there, he might do well there again. anyway, you can see people who would like to be part of a sarah palin presidential campaign arguing to her that it is just

taylor made in the beginning and all you have to do is win iowa and south carolina and it will be easy from then on. i think there is a substantial chance she will run. i have no inside information, and i suspect she does not know whether she will run at this point. >> i saw her on fox news sunday. we did a show from new york this past sunday and we were chatting before the show began. the most notable aspect of this conversation was that she was describing this thing in alaska where cbs news reporters seemingly ran tapes to cause trouble for joe miller. and she was really outraged by these reporters on the tape. and she said to me, -- i said to her, the media has been very hostile to her and she said, yes, they are corrupt bastards. and she paused for a second and said, can i say that on television? and i said, don't let me stop

you. and sure enough, there she was 10 minutes later on fox news sunday. i would say that what she said struck me -- she said, look, i want a strong, constitutional, conservative -- whatever terminology she said -- that kind of person to run. and she said, if there is not one like that, then i would consider running. it sounded like she wants to run, but i think she was actually being sincere. if someone gets out there that she likes and agrees with, she might not be so determined to run. she has had success supporting other candidates. or a lease, she has shown herself willing now to throw herself into the race if there are other good candidates.

it is prole pretty hard to tell yourself, why shouldn't i take -- is probably pretty hard to tell yourself, why shouldn't i take a shot at it? these guys -- i do not think it hurt them much to get out there. a lot of people on stage want it and there will be 20 debates. and things happen in campaigns. look at mike huckabee last time. he was a compelling debater. and he also found a niche in terms of his constituencies. good for the weekly standard. good for the washington examiner. good for the chaos and unpredictability in the news. i think it will be exciting. how strong do you think

ultimately president obama is or could be? all republicans are spooked by the memory of 1995 and 1996 when clinton came back so effectively. >> think where president obama start from. if he had been running this year, he would have lost. he's got a lot of ground to make up. and he is not as deft and nimble. he does not come from what president clinton does. he does not come from a state and a political culture that is fairly conservative, as clinton did in arkansas. clinton knew after losing in 1980, he knew how to be reelected as governor in 1982. and also, though clinton -- bill clinton was never called ideological purity and of course, president obama is a fairly -- was never called

ideological. and of course, president obama is fairly ideological. it is harder for him to move to the center. he obviously does not have any natural inclination to do that. but he is going to need to do? -- to do it. he will have to do it on issues he does not like. he is on the wrong side of it now, on taxes, spending cuts, maybe even on health care. although, whoever said it would be hard for him to do that may be right. there are a lot of different issues he will have to move to the right on if he wants to be reelected that he is not inclined to do naturally. >> but he is terribly worried about his constituency on the left. if you say to them, this man who wanted to be president has been president and, by the way, we are still in iraq. he escalated the war in afghanistan. guantanamo is still open.

a lot of the national security procedures you hated are still in place, and by the way, he extended the bush tax cuts. that is an extremely demoralizing record for a certain part of the democratic base. >> i agree with a lot of that, but i think there are some countervailing considerations. certainly, this electric issued a very strong rebuke of the president on public policy. they were against his policies. it may not be exactly the same electric in 2012. we had low participation by young voters. we did not have the record participation by black voters we had in 2008. that may be different next time. we do not know for sure. certainly, that is a likely possibility. i feel that among many, perhaps most, americans it would be a bad thing to reject the first african-american president. i think that is a result of our

history and is a feeling that is widespread. americansk generally co, have tended to indulge their favorites in terms of the president. if you look at bill clinton in 1996 or george bush in 2004, they were giving the incumbent the benefit of the doubt. maybe in this more turbulent environment, that will not be the case. but it could be the case. i do not see the kind of hatred of barack obama that we saw many conservatives have for bill clinton. and many liberals had the same for george w. bush. those people had characteristics -- both people had characteristics that the people on the other side of the cultural divide absolutely loathed. i do not think that barack obama -- the toughest jokes told

against him are the teleprompter jokes. that is about the stuff he gets. it is not the stuff you heard from conservatives about clinton, or from liberals about bush. i think all those things could be different. it could be a different issue environment in terms of where the economy is, etc. i do agree with fred -- let's put it this way. all politicians have a certain range of issues that they could possibly adopt. some have a very narrow range and some have a very broad one. bill clinton had a broad range of issues positions he could adopt. obama seems to be narrower. i think he probably will not change and i think these positions will continue to be unpopular because the obama

democrats came to office with the assumption that economic distress would make americans more supportive of or amenable to be government policy. that assumption turns out to be wrong. i think that is the fundamental lesson of this election. but there are other factors of which i can foresee the reelection of the president and some significant recovery by democrats from the position they were in in this election. >> i think you're absolutely right. what this is going to come down to in 2012 -- first, who is the republican that he is running against? obama is a charismatic figure. he is an excellent presenter and we loved to follow him around in 2008 because he is a real rock star. he attracts thousands of people. they love him. he campaigns really well. we cannot discount what that is going to generate in terms of getting people out to vote. one reason why democrats fare so

poorly this year is because so many democrats just did not turn out to vote. it was the enthusiasm gap that helped republicans. obama cannot really stir up his base if he is not moving in the direction of the liberal agenda, but on the other hand, if you look at the exit polls and results on tuesday. the independence switched this year -- the independents switched this year and really voted in favor of republicans. he has to be incredibly mindful of independent voters and they are speaking loud and clear right now that they are not in favor of what he has been doing. i think the obama administration has a challenge to figure of how to get him reelected. i think it could be in jeopardy by of looking at the results of tuesday. and >> and one of the main thing

is that the independents disliked was obama care, which the white house never can -- never succeeded in convincing the majority of the public was a good idea. and ironically, one huge problem the president obama has that president clinton did not have is that his health care passed. clinton was able -- it fell apart in 1994. by january of 1996, after politically, at least, winning the showdown, he was able to play the era of big government is over. he did not have to say that explicitly. he just made it clear he was not picking that up again. and sure enough, he was

president and no one heard anything about any kind of health care reforms in the next four years. the problem with obama is that it is the law of the land and whether it is repealed or substantially reformed is a big issue. and if you want to repeal obamacare or substantially changed it, then there is a problem. it is a matter of, he cannot move on health care because he is going to be defending it and republicans will be attacking it in 2011 and in 2012. he set up a situation where if you want the majority of americans to be ok with obama care, the only way to get rid of it is to defeat the president in 2012. that is a problem that clinton did not have because, ironically, he failed. i think it is time for maybe 10

or 15 minutes of questions. we should let people go back to work. some of us should go back to pretend to be working on it. let's take a few questions. we have a microphone here. i cannot see because of the lights. you find someone there. good. >> my name is debora from the cato institute. there's a lot of optimism within the government, but how you reconcile that with the fact that so many voters voted democrats out of the election because there were not doing enough on the economy and getting jobs? and also the fact that many republicans are paying lip service to spending cuts, but will not privatize social security or completely repeal the medicare and medicaid? what do you have to say to that?

>> how serious are republicans about cutting government opposite, i guess, is what it comes down to? >> i have not seen them be serious about cutting anything in 10 years. there is the special monitoring service known as the tea party that is watching them. one of my tea party sources said, "republicans have the tea party support, but they are on probation as far as we are concerned. they will have to prove themselves and if they do not listen to the american people, they will find themselves in a tough election spot in two years. right now we have to make cuts. the side -- we have to make cuts." besides cutting health care. what i have seen it from the gop

leadership is that they are ready to take action and they are not going to back down on this. they have got to cut the deficit and debt. >> it would be interesting to watch what is happening in the u.k., where they are cutting the budgets of many government departments by 25% and going to lay off 490,000 public sector workers we may see some similar things like this in some of the states. we have three states that elected democratic governors and have very serious financial problems, calif., new york and illinois. gov. schwarzenegger was at one point thinking about coming to washington begging for cash so that california could pay its bills and not issue script, as it did to pay its bills at some point. if and when the private credit markets cut these state

government out, there is going to be an issue. and i think the republican party will be in no mood to subsidize these things. >> if there are, indeed, the cuts and reforms that the people in a tea party think are necessary, do you think there will be a third-party candidacy for the presidency? what will happen for the american people? if they do not like the republicans and do not like the democrats, what is the alternative? >> the underappreciated success of some republicans, was after some initial resistance, they did not have much choice because they were defeated.

what people forget, 18 months ago looked like a real possibility of many third-party tea party candidates. they could have had -- you know, he could have had nine states running as independent candidates. and they knocked off some republicans. but i think you raise a good point. it is one thing to handle a bunch of senate and congressional races when you do not have any power. you have to govern for a year- and-a-half and hold that coalition together. >> the fact would be, who would be at the head of the ticket? who would be the presidential candidates in all of this? and the people who voted tea party in this election, they could sign on to this person. you are right, district by

district basis, if someone were to elect a deep -- a tea party candidate, they could be in trouble. but the republican party, as a whole, -- the tea party as a whole, they have not elected a presidential candidates before. i do not see the tea party abandoning the republican candidate for a third-party candidate. >> i do not either because the republicans will get some spending cuts in the next couple of years and obama will have to go along with some of them. at the moment, the culture of spending in congress has changed. now there is a culture of cutting spending rather than raising spending. we had won in 1995 for a little bit. but after the election in 1996 id sort of went away. -- it sort of went away.

but for now, in the short run, i think the tea party people will be satisfied with what republicans do, but not for long. >> i do think republicans have a bigger majority in the house than they enjoyed between 1994 through 2006. they got down as low as 221, with 218 being the majority. and the glue that holds it together is called money. now they will have to wonder if 40 or more members -- 240 or more members. you can let some people walk the plank. you have the possibility of exerting more pressure on the appropriators culture, so that may be a longer time frame of which pork is no longer kosher. one more question. >> i saw recently -- just now,

tweeted that just twiste she will be running for minority leader. >> susie, you better get back to work. i said, she will not run again, will she? and >> why stick around? it is much less likely that they will be able to get back in 2012? it will be a longer time as minority leader. does she really want to do that? apparently, she does. the thought of going back to san francisco and sitting in the rocking chair ending for the grandchildren did not make sense. she is a tough lady.

and it makes sense that she wants to stick around in the minority. the minority can do things. and she is also a good friend raiser. she is a source for potential for democrats to try to get some of the seat back. but most importantly, the reason she will run right now is that these elections have changed their carcase. these elections wiped out -- of their caucus. these elections wiped out her moderate faction. she got behind the cap and trade bill, the ledbetter law, all of these liberal causes that were important to them. it is not surprising that she would want to stick around and do it. >> i think most of the democrats who came out during

the campaign against her -- probably bobbi brighton in alabama, and i'm sure there were others. [unintelligible] >> in congress before the elections they made a point of that. these people were saying, she would never have the support to .tay around hal however, if they won by a slim majority, it would be virtually impossible for her to maintain her speakership because there would be just enough moderates, or there would have been another person who formed a candidacy. you would have had people like steny hoyer. the steny war era -- steny hoyer will have to wait to become the top democrat. >> steny hoyer must be having a really bad day.

>> what susan was referring to was new gingrich -- newt gingrich and his bigger ship in 1998. -- and the speakership in 1998. >> i think you could argue pretty easily that it was nancy pelosi. i do not think republicans would be unhappy to see that. >> the republican party will continue to run against harry reid and nancy pelosi. i think a lot of people predicted that harry reid will lose his own race and that knows you -- nancy pelosi would step down as hastert did in 2006 when he lost the speaker of the

house position. >> they are back, but there is a lot of collateral damage. >> on that note, let me thank the panelists for an interesting discussion. thank you all for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [captions copyright national cable satellite corp. 2010]

>> next, a simulcast of today's bill press show. then democrats on the midterm results. after that, comments by fed chairman ben bernanke. tomorrow, ron pollack, the executive director of families usa talks about how progressive groups like his see the future of health care. steve hurst examines president obama is approach to foreign policy and his trip to asia this week. james martin, president of the 60 plus association expresses his hope that house republicans

will repeal the health care law. >> it is harmless if one is making a star at a britney spears or share but when one takes this notion of stardom into a national security round, then lives are at stake. americans get wise that the stars and the wizards, the dream teams and the best and brightest really might not be what they're cracked up to be. in that amount of time, chaos and mayhem can come to rain. >> henry kissinger, mcnamara, rumsfeld, just a few leaders critiqued by officer derek leeb aert. >> now a simulcast of the bill press show. mr. press is a former co-host of

msnbc's "you can in and press -- to buchanabuchanan and press." this is two hours and 50 minutes. >> today is friday. thank you for joining us. i think the guards are still sad

about what happened on tuesday and we are feeling it in the weather. wherever you happen to be, thank you for joining us. we are trying to sort out what it means, what democrats should be dealing and should they be, as republicans insist, repudiating their policies. i don't think so. we welcome today, many good friends from c-span. welcome. all of our regular listeners, all of our c-span viewers, welcome to this friday edition of the build pressure apparent

of -- bill press show. where is brian? >> no man is immune to the disease of whiskey. brain gets drunk and then he calls. i always thought you liars or a bunch of bedwetting comments. i will never listen to what you liberal bastards have to say. >> he is a mean drunk.

>> shut up and stop you little dissent. you are a nazi and a stalinist and probably a homosexual and i do not appreciate your agenda. i didn't say any of that stuff. that is not us. we welcome your calls at any time. we make it easy for you here on the bill press show.

we will be joined and little bit later by senator byron dorgan in the studio as well as crisp and holland, the head of the campaign committee. what is the message that voters are sending on tuesday? >> in sports, the world series most valuable player is not all that valuable to the san francisco giants. they cut ties with him declining in $9.5 million auction and they gave him a $500,000 buyout. it was his tie-breaking home run that helped propel the giants to win the championship. >> he hits a home run and the world series and they fire him? >> he was injured.

david cassidy got a dui in florida. he was registered as twice the legal limit on the blood alcohol level annie had a half empty bottle of bourbon in his car. kiefer sutherland is headed to broadway. he will make his debut on stage in the revival of "that championship season," where four college jocks get back with their coach 20 years after winning the championship. >> this weekend, sunday, we will be on the mclaughlin group.

the show's been on the air for 25 years and this is still the same. so, we are trying to sort out what happened on tuesday and many people are throwing up many different theories and it seems to be a kind of schools. the republicans are saying that what it means is that the voters voted to repudiate the policy is a president obama. in fact, that question was very passed -- that very question was asked. that is the republican line.

what president obama has said, what we saw was the tanks to batter the economy and people are feeling, they are hurting because of inclement, they are free of losing their jobs. if it was 5% unemployment, this would not have happened. >> there seems to be some part of the president, the message that was sent by the american people. >> here is what he says the message that was sent was, when you have the most historic collection and over 60-70 years,

you would think the other party would understand that the american people have clearly repudiated the policies that they put forward in the last two years. the number one policy they are talking about is health care reform. john boehner said that we will get rid of it. >> i am confident that we will have the votes to repeal that the bill and replace it with common sense reforms. >> they never say what the common sense reforms are and they never put forth any other alternatives. he says that the message from tuesday is that the american people want to repeal health care reform. my question to you, do you buy that? also, do you think that obama

should take that message and try to work something out with his gang led by mitch mcconnell and john painter? i asked robert gibbs said at a news conference. the president is saying that we're open to all ideas even on health care reform and mcconnell and a banner are saying, repeal, repeal, where is the middle ground? >> we heard very clearly, repeal, repealed. that is all they talk about. that is a nonstarter. >> i don't think that is what the american people said added this election. >> i don't get it and i don't buy it. i don't buy that the message of this message -- of this election is to repudiate. if it was to repudiate president obama, which policies to the

american people want to repudiate? did they really want to repeal health care reform or all of the new regulations on wall street so that the banks can just go back to all of the old former illegal and very dangerous practices? do they really want to repeal the stimulus package, all of those new jobs that have been created, or didn't people just get their jobs saved? what is this, $3.2 million according to the congressional pension office. -- budget office. they are building a new extension of the metro all the way out to the airport. i have seen them driving around several different states.

repealed the stimulus until those people are out of work. is that what people want? they want to repeal all of the regulations on the banks, on their credit card practices? they want to repeal all of the new protections for students? they want to repeal that women get equal pay? i refuse to believe that the american people suddenly turn around and 2010 and say, no, we are against all of those policies, we refuse and we want to repudiate all of those policies. this does not add up and down -- does not add up. there is a lot of hurt out there. the economy is coming back but still not fast enough and.

people in the middle class to not feel the economic recovery. they have not seen in their own lives. so, they turn against the party in power. the second thing is, the administration accomplished a lot and did not do a very good job of selling what they accomplished and letting the american people now the improvements that they have made in people's lives. the more people realize what is in their health care reform, the more they will like it. you have two people st. two different things. john boehner, repudiate the obama policies. this is the friday edition of the bill press showed.

>> bringing you the latest information from the white house press briefings so you don't have to watch c-span all day. >> hang on for the next segment. do you want to take a few calls?

>> that was a good start. hang on for me. >> that is what we thought. >> thanks for holding. >> you probably saw me grounded this.

i forgot to turn this off. >> do you want me to come back with the painter conference? >> yes, i will pick it up from there.

>> thank you for holding. >> you don't even have to say good morning or below, you can just go straight to the point. you accept the paul, does go straight to the point. -- the call, go straight to the point.

>> i am calm, confident, and now that affine listen to the american people and be myself, this job will -- >> this is the bill press show. >> that was john boehner talking to diane sawyer.

john boehner, really,, and confident. that is not how or render him on tuesday evening. on tuesday night, it did not sound that -- >> i spent my whole life chasing the american dream. what is the message? is this to repudiate the policies? an e-mail says, today, i was extra happy to see you question the press secretary on what he was saying about health care. good questions. i personally do not want the president to be sucked in on

negotiating or letting the tax cuts for the rich expire or on repealing any large parts of health care. we have chris on the line. good to talk to you. >> i think the polls have it wrong. the people are sick and tired of -- we called him in for change, everyone voted for change. the first people he brings in are all of these idiots that created this whole mess under clinton. we did not get any change. then turnaround and scott brown, when he was the big shot across the about to let him know, hey, we want you to do what you want to do. when bush was in, whether you like him or not, he pushed

through agenda. obama is not fighting for our agenda. he had better start getting a pair and everyone will start getting out of the ship. >> i would not go as far as you. i think that he has brought about a lot of change, not enough. look at the health care reform. the fact that they cannot deny you coverage anymore because of a pre-existing condition, that is a big change. the fact that you can keep your kids on your own plan until they're 26, that is a big change. the fact that the banks cannot brit you off on your credit cards anymore or raise the interest rates without telling you, that is a big change. he is not good enough to take -- job of telling the american people realize the changes that have gotten accomplished besides

the republican opposition. >> i come with a little bit different opinion. the people want our government to work. the government did not work because of the archaic and old rules of the static. the house and the senate did absolutely nothing because of the old rules. >> over 400 bills that passed the house that are sitting in their deathbed in the u.s. senate. >> the party in power of the senate has the right to change the rules. if harry reid had changed the rules to make the filibuster down to 52 or 51, he could have gotten all of the agenda through. this was about slapping harry reid and the senate around and said you need to change your rules and work with the house of

representatives, otherwise you'll not get anything. >> here's the problem, you need to slash three vote during the session to change the rules which is almost impossible but you can change them with just 51 votes at the beginning of the session which is why in january, democrats have to get rid of the filibuster in january. they can do it, they have to do. >> four seconds behind. >> we did not to spend. take your pick. >> tell me you got that on tape.

maybe something from o'donnell. that last one where he says we cannot reverse it all, -- >> we will check this and in the last segment. >> corthat is pretty good.

>> we will have more calls. >> yes, we will have more calls. >> please hold, please hold,

please hold. thank you for molding. -- holding. what is your name? good points, hang on for me. what is your first name? larry, where are you coming from? what is your comment?

>> i think fat the mcconnell stuff is good for outside. >> see happen johanyeah. >> we will start with barry in indiana. >> the winds of freedom are blowing. >> we are winning the war. >> you have not answered my question. >> you are doing a heck of a

job. >> what more do you want to know? >> i'm looking out for you. >> i can do my job without that. >> that is bogus, hogwash. welcome to the spin room. >> 33 minutes after the hour, the bill press show. this friday morning, coming to you live from coast to coast right here in capitol hill. we're just down the street from the capitol building. in the shadow of the capitol dome, as we like to say and brought to you today from the international association of machinists. sharpening america's edge on the global economy. for more information about their good work, you can go to their website. back to your calls here about

the message of tuesday's midterms, is this really as mitch mcconnell and john painter said, that the american people want to repudiate all the policies of barack obama and he should reverse everything, and do everything that has been done over the last two years. i don't think so. first, into the spin room we go to day with mitch mcconnell. mcconnell is saying that we will repeal health care, wall street reforms, we will throw everything out. then he turns around and spins at the heritage foundation yesterday. >> we can hope the president will start less listing to the electorate but we cannot plan on that. it would be foolish to expect that republicans would be able to completely reverse the damage has done as long as a democrat

holds the office. >> the translation is that we will be tough, we will throw everything out, but when we don't succeed, we're still going to blame it on barack obama. it is his fault whether we do or we don't. that is the spin from mitch mcconnell. there is a reality test and this is called the veto. all the talk about repealing health care reform is not going to happen. what is the message, caller from indiana. >> i think the president needs to swallow his pride and make a couple of calls. he needs to call howard dean and jesus christ and get his message out there. i listen to these people, you guys are preaching to the choir. we all listen to the radio and we hear what is going on.

>> and we watch c-span. >> the thing is is that the public, they don't get the message. all they get out is what is being put out by the corporate newspapers. they're talking about the electric wanting a change. yes, they want to change according to the information that they're given and they're not given the right information. >> i have to agree with you in terms of the message machine. there are no two better than howard dean and james carville. this campaign was brilliant at keeping the message during the campaign, once they got into the white house, they have met -- not been on message. i had my friend says that once

they got into the white house, they thought they could focus on policy and forget about politics. you cannot do this. it has to be them mix together from the first day. people have to know what you're doing. a call from chicago. hello. >> i agree with your last call. i think that people want a change but people are afraid of change and that is how to manipulate the people. they manipulate people with fear. i think the republicans have done a great job of directing the message and throwing confusion into the mix. the message goes out to a certain segment of the population. >> you don't think that the american people are saying everything he did for the past two years is wrong?

>> people listen to fox news and all these messages and i get so frustrated because i think, my god, listen to someone else. they're just getting this repeated into their heads. my parents are still talking about death camps and medicare taken away and i say, what are you talking about. >> i talked to a friend of mine, a member of congress yesterday, out in monterey, calif., who said that he ran into someone and she was talking about death panels. talk about something repudiated. that was done so long ago and yet some people still believe it. michael was down in norfolk, virginia. >> i am really upset about to

republicans governing is second. what is 1st is seizing power. what they want to do it is distract and make you think that what they are saying is what you're saying. people have to wake up and understand that these people are not in the business of governing. they are in in the business of keeping power. >> you are right on. mitch mcconnell repeated yesterday, the first time that he said people thought that he might have misspoke. his number one goal for the next two years is not immigration reform, fixing the economy, creating jobs, doing something about global warming, his number one goal is to prevent barack obama from getting a second term. that is all he cares about as the senate majority leader. . .