this sunday, from wisconsin to washington, the battle to rein in government spending is change up to be the major fight not only of this year but of the 2012 campaign. as wisconsin's republican governor takes on the unionsnd orders democratic lawmakers back to work, leaders in congress are exchanging threats about a government shutdown if they can't agree on spending cuts. >> read my lips we're going cut spending. >> where will it all lead? a special discussion this morning begins with two prominent voices of the senate. dick durbin, democrat of illinois. and republican member of the budget committee, lindsey graham

of south carolina. then more on the budget battle and what it says about leadership in washington after the president unveils a budget that fails to address the largest drivers of the country's debt. >> why did you duck? why are you not taking this opportunity to lead? >> this is not a matter of you go first or i go first. >> our roundtable weighs in. former governor of michigan, democrat, jennifer granholm. former congressman from tennessee, democrat harold ford. republican strategist and former white house counselor to bush, ed gillispie and cnbc's rick santelli. the very latest on revolution sweeping the middle east. after egypt protest and violent crackdown have spread to the gulf states. how will the administration balance u.s. interest with interests in supporting democratic reforms? our guests, the president's ambassador to the united nations, susan rice.

good morning and we will begin with those anti-government demonstrations that continue across the middle east and north africa. the governments of libya, algeria and yemen each responding with violent crackdowns over the weekend. in bahrain overnight demonstrations have continued but state security forces have withdrawn leaving behind more protest, all of this being watched quite closely and with a sense of unease by rulers in neighboring saudi arabia. joining me now the ambassador to the united nations, susan rice. let me ask you specifically as we go to the map to talk about libya. this appears to be the most violent crackdown where there isn't a whole lot that's actually known in benghazi, the eastern human rights watch reporting widespread government

crackdown, violent -- the number of casualties unknown. what can you say about what the u.s. government knows about what's happening inside libya. >> we're concerned about reports of violence and attacks on civilians. we've condemned that violence and our view is libya as throughout the region peaceful protests need to be respected. they need to be able to exercise their universal rights that people around the world share. those rites include freedom of expression, freedom of assembly and we'll stand up in support of those universal rights every where. in addition, david, what we're seeing across the region is a yearning for change, a hunger for political reform, economic reform, greater representation and we support that. >> we're going to get to that. specifically on libya, is moammar al gadhafi killing protesters? >> from what we can tell and as you know journalists are banned and we're relying on reports

from human rights watch and other observers, there has been less violence, very little so far in tripoli. in benghazi and coastal areas we're very concerned about error of security forces firing on peaceful protests. >> let me ask you about bahrain. we look at some of the scenes out of that country just over the causeway from saudi arabia. also where the u.s. fifth fleet sits. the main center square and the capital, security forces have withdrawn from there. the united states has to be exerting a certain amount of influence to get the government there to step back and step away from a violent crackdown. >> we've been very clear with our partners in bahrain that they taught exercise restraint, that there's no place for violence against peaceful protesters there or anywhere else and we've condemned that violence. we had outreach from president obama, national security adviser, secretary of state clinton urging that restraint

and encouraging what is now transpiring which seems to be the pull back of the military forces, and now real effort to engage the opposition in a broad based dialogue that will enable the people's aspiration to be discussed. >> can the government survive in bahrain? >> david, i wouldn't want to be in the business of predictions in this very volatile environment. we've seen change so rapidly. what we're encouraging governments in the region to do is recognize this is a yearning for change and reform. it needs to be respected. they need to get ahead of it by leading rather than being pushed. >> among our arab allies, according to diplomat its talked to they criticize what they see as inconsistencies on the part

of mr. aviation. by his actions the magazine writes mr. obama put other authoritarian allies on notice. he thinks that even pro western autocracies that fail to reform deserve to die. but how much reform? how many people are enough? to judge by the gale rat technology arab world this week he may have to answer such questions rather soon. >> david, for years and, indeed, throughout the course of this entire administration, we have been saying to our friends and partners in the arab and muslim world that there needs to be a process for full reform. there are conditions that are unstable. a youth bulge, high unemployment, lack of political openness and we have pressed publicly and privately for the kind of change that is necessary. now we don't see this as

anti-ethical to our goals. to have representative government, to have governments that respect their universal rights. we don't see a dichotomy or an inconsistency between beginning to respond -- >> can't you see how our allies confused where we'll push, where we'll support reforms. >> we've been very consistent. the message is the same. no violence. respect the universal rights of people to assemble, to protest, to speak, to form political organizations. and get ahead of reform. recognize that there needs to be lasting political change and lasting -- >> you can't say it's been consistent, the president pushed mubarak to leave office. he has not done that in brain, saudi arabia or jordan. >> each of these countries is different. each of these circumstance will be decided by the people of those countries. we are not pushing people out or

dictating that they stay. what we're doing is saying, consistency across the board there's universal human rights that need to be respected. there's demand for reform that are legitimate and need to be addressed very urgently. >> let me follow up on egypt. one of the big stories that's come out of there in the protests is what happened to our colleague from cbs news lara logan who was attacked by a mob, sexually assaulted, and i know the administration has been pressing the egyptian military and the government to get to the bottom of this. your satisfied that you have any real answers as to what was behind this? >> david, first of all, we're all horrified and outraged by what seems to have been a horrific attack against lara logan and we've condemned it and doing everything through our embassy and with the egyptian authorities to ensure that we know as much as can be known about this and not those who are

responsible are held accountable. >> but no answers yet? >> not yet. >> the other question in egypt and again where critic jim comes from our allies the u.s. publicly and privately pushed mubarak to go without a real sense of what would come next in terms of democratic reform, even a democratic process since there's not an identified opposition leader as of yet. the presence of the muslim brotherhood the most organized opposition force they write this. in the scramble for power among groups of various political identity after last week's ouster of president mubarak, the brotherhood, an islamist group that has held as many as 20% of the seats in egypt's parliament in recent years. said brotherhood spokesman whose forehead bore the callouss of those who prostrate themselves five times a day in prayer.

if the brotherhood becomes a dominant force in egypt is the united states prepared to do business with them? >> there's no indication that the brotherhood is going to dominate egyptian politics. what you saw on the streets and what we saw as recently on friday in tahrir square is an incredible ly diverse cross secn of egyptian population. male, female, religious, secular, young and old. this is a cross cutting movement for change. and we have confidence that if the democratic processes are respected, if there's time for parties to form, if there's an opportunity for civil society to organize, if the constitution is amended as it need to be and there's freedom of expression, that the egyptian people will responsibly choose new leadership and we'll look forward to working with them. >> you say the brotherhood should not be feared? >> we have faith in the people of egypt and faith in democracy.

and we believe in allowing democratic institutions to take root and to flourish. that's our aim in egypt. we're going to support that. and we believe it needs to be credible and irreversible. >> before you go i want to ask you about the u.n. vote on a we lugs brought forward by the palestinians to declare israeli settlement activity as illegal. you as the united states representative there vetoed that measure because of the word illegal. the administration believes that settlements are illegitimate but not necessarily illegal. my question is whether you worry that in the middle of all this protest, the administration has now angered enough arabs in government and on the street by taking on this issue in this way. >> first of all, david, we vetoed the resolution not only because of the word illegal but we need to get the parties back to direct negotiations so that they can agree through direct

talks on a two state solution. that's the goal. and the problem with this resolution is it was one sided. and it was designed, not designed but have the impact of hardening one or both sides and making it much harder for us to get them back to the table. we have our eye on the big prize. yes, for over four decades it has been u.s. policy to oppose settlement activity. we view it as illegitimate and cr corrosive to the peace process. our aim is to achieve an independent viable palestinian state living side-by-side next to a jewish state of israel. we look to the parties to demonstrate their commitment to that goal and to take steps to build confidence and trust. >> ambassador rice we'll leave it right there. thank you. we focus now on the battle over government spending that's taking place as i mentioned from wisconsin to washington and

beyond. joining me now two prominent voices, dick durbin and lindsey graham. welcome to both of you. senator graham i want to start with you and follow up in on one point. as ambassador rice suggested so much concern about the nature of the crackdowns in certain countries now. are you satisfied with any measure of consistency you see from the administration in terms of how they are using their influence against various countries? >> well, the one suggestion i would make is we've been very inconsistent and too timid in iran. they did a good job in egypt. we should have a poifl urging old friends to do better and replacing old enemies. i would like to see regime change in libya, in iran. we need to be tougher on companies that do business with iran. generally speaking the administration, i think, has handled egypt well and is trying to stay ahead of this when it

comes to jordan, bahrain and saudi arabia. >> there's so much to get to on the budget. senator durbin i want to go there immediately. here's the president's budget for next year yet the fight hasn't even started over this because congress is still fighting about this year's money, funding the money for this year. here's a summary in the "the washington post". the house approves dramatic cuts in federal spending 235-1289. the senate is expected to take up its own measure of the spending measure before the first week of march, just before a march 4th dead lynn for when the current funding resolution expires. two sides begin grueling negotiation process more than $61 billion apart. senator durbin, are we heading towards some kind of government shutdown? >> certainly hope not and we've made it clear from the start that that is the worst outcome. if we end up shutting down the government and calling into

question whether we're going to meet our obligations for social security checks and paying our troops, then that is an absolute utter failure. we can do better. i think we need to sit down in a positive, constructive way and work out our differences. there are differences. we know we need to cut spending, we know we need to live within our means and we can find a way to do this. >> how does this get resolved? here was senator reid the majority leader talking about the house passed their end of it and now not a lot of time to negotiate, speaker boehner saying read my lips we're going cut spending and this is how senator reid responded. >> now he's resorting to threats to do just that without any negotiations. that is not permissible. we will not stand for that. he's wrong. >> do you think we're head for a government shutdown. >> only way if our democratic

colleagues insist on keeping the federal government large and unsustainable. from 2008 to 2010 the federal government in nondefense discretionary spending grew by 24%. very few people had that increase in their budgets. if you count the stimulus over 80% increase in spending. i hope we find a way to resolve this by reducing spending. the house members did exactly what they campaigned on. the democratic house was fired because they spent too much. there will be a temporary cr but should have some spending cuts. >> you're suggesting compromise. republican leaders have got to be able to compromise because the senate won't pass what they just passed. >> the only reason i'm suggests we do a temporary cr for a week or two because we don't have enough time. i won't support a cr unless it has spending cuts. i'll side with house to when it comes to getting back to 2008

spending levels. that's what they campaigned on. they are doing what they promised the american people. getting back to 2008 levels is a good start and we got a lot more to do. >> a cr is a continuing resolution which sway to fund the government. senator durbin where do you see room for compromise. you as leaders on the democratic side and the senate are going to have to move a bit on cutting dramatically government spending. >> david, understand the starting point. we've already cut $41 billion from below the president's budget for this fiscal year in the way we're currently funding our government. and now the question is how much further should we go? >> democrats haven't actually cut anything. they haven't -- you haven't cut anything because there was no budget last year. >> that's wrong, david. we have. >> what cuts? less than the level that it was funded at before. >> no. it's less than the amount asked for by the president for this

year, $41 billion below it. so let's be very candid. both sides made cuts. the question is what is the right thing to do at this moment. deficit commission took a look at our economy and said be careful, make sure that you move towards fiscal solvency for the united states but do it in a fashion that will not harm the growth of our economy. you can't reach a budget balance with 15 million americans out of work. we need to invest in things that count. education and training for our workers. innovation so we have spark of creativity that crates new businesses and new jobs and investment in the infrastructure of america. building things that are going to make us strong for generations to come. if i have anything to fault with the house approach they went too far in their cuts. >> let me ask you about what is becoming a federal issue and that's what's happening wins. this was the scene on friday in the rotunda in madison as union workers were protesting the move

by the governor of wisconsin to demand a greater participation by unions in terms of pension contributions. you see the response there. president obama did an interview and weighed in on this. this is what he had to say. >> some of what i've heard coming out of wisconsin where you're just making it harder for public employees to collectively bargain generally seems more like an assault more on unions. it's important for us to understand public employees, they are our neighbors, they are our friends. >> senator graham did the president do the right thing weighing in on this controversy? >> the president should be focusing on what we're doing in washington. . president's budget this year is the highest level of spending as a nation, 25.3% of gdp since world war ii. that's not the number to use to get this place in fiscal sanity. we should be looking at the

dollars we're actually spending. that's what the house did. when the president talks about wisconsin, i think that really is inappropriate. the governor of wisconsin is doing what he campaigned on. he said he would ask for contributions for pension and health care at a level that i think is reasonable. he also put on table renegotiating and reforming collective garng. he said it takes 15 months to do a contract with government employees in wisconsin so he's doing what he said. there was an election on his proposals and he won. and he should be allowed to fulfill his mandate just like the house republicans. >> senator durbin, is the white house, is the president using his own campaign operation, an operation of supporters to fuel protests in wisconsin? >> let me tell you what's happening in wisconsin. just north of illinois. goes way beyond the discussion of the wisconsin budget. if you think this is just about money in the budget, then you might believe cesar chavez was

just working to get a couple pennies more per pound for grapes or martin luther king was working for access to hotels and restaurants. for over 80 years in america we've recognized the rights of our workers to freely gather together collectively bargain so they can have fairness in the workplace and fairness in compensation. that is what's at stake here. it goes way beyond this budget issue. this governor of wisconsin is not setting out just to fix a budget he's setting out to break a union. that's a major move in terms of american history. i believe the president should have weighed in. i think we should all weigh in and say do the right thing for wisconsin's budget but do not destroy decades of work to establish the rights ever workers to speak for themselves. >> david, if i could just add. this is a campaign flyer i have. i don't know if you can see it from the last election cycle where wisconsin unions said if you elect this guy scott walker he's going to reform or limit collective bargaining.

he was open about what he was going to do about contributions to pensions and retirement and he told the people of wisconsin i'm going to change collective bargaining because it impedes progress when it comes to education, it's too hard to fire anybody, too complicated and i'm going to change that system. so in a democracy, when you run on something you do have an obligation to fulfill your promise. he didn't take anybody by surprise. he's doing exactly what he said. there was a referendum on this issue and the unions lost and the democrats in wisconsin should come back to wisconsin to have votes. >> let me take a break here. we'll come back and talk more about the president's budget and the question of leadership in washington on the biggest drivers of our nation's debt. more with senators durbin and graham in just a moment. we know why we're here. to build a new generation of airplanes to connect the world. ♪ airplanes that fly cleaner and farther on less fuel. and make nonstop travel possible to more places.

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we're back. joined again by senators dick durbin and lindsey graham. senator durbin, you mentioned the debt commission, the president's debt commission on which you serve and you supported its findings. they are out with an op ed in "the washington post" about the president's budget. to be sure the president's budget doesn't go nearly far enough in addressing the nation's fiscal challenges.

it goes nowhere close. this was a president, senator durbin, who said during the transition we can't kick the can down the road when it comes to entitlement spending. the biggest drivers of our nation's debt yet he chose not to do so in this budget. why? >> let's give credit where it's due. the president's budget will freeze spending and over the course of five years is going to reduce our deficit by some $400 billion. we'll see domestic discretionary spending at the lowest level as a percentage of gdp since president dwight d. eisenhower. ate step in the right direction. it's consistent with the first two years the deficit commission recommended. we went beyond that. we said after the first two years we need a 5% reduction in the first year and half the cost of living increase reduction for the next seven years. so we do achieve more through the deficit commission. now, david, the good news is this. there are six of us, three democrats and three republicans.

still meeting. looking at the deficit commission as a template or as a goal in trying to find a way to work together in a bipartisan fashion in the senate to come up with a reasonable way to deal with this deficit. we can build on the president's budget into deeper cuts but we need to put everything on the table. with the exception of social security which i would like to mention. everything else needs be on the table. the house in their budget just dealt with 12% and made a dramatic cut in our budget and 12% -- >> senator, everything is not on table. the point is you're talking about, you're heralding 12% of the budget. that's not where the money is here when it comes to driving up the debt. you even said about the debt commission that the president doesn't wear that collar into the next election. i've talked to administration officials who say the strategy here is a political one. get the republicans to step forward first, make the big suggestions on where to cut entitlements and that can be used against them in the election. >> david, let me tell you.

after we get beyond who goes first and bragging rites about who cuts the most the bottom line is can we reach an agreement in a bipartisan fashion with senators of both political parties and move forward. what the president has said he's open to this conversation. i would like to say one word about social security -- >> i want to get senator graham's position. >> it's clear to me that the president did not lead in the state of the union. his budget does nothing on entitlement spending. it's a timid budget. i want goes nowhere near where the debt commission went. it was $4 trillion over a decade. it allows the doubt double in four years and triple by 2019. if given life it could change this country. senator durbin you have my

undyeing respect for work with republicans to work on a document that's a blupt to save this country from fiscal collapse. 40 cents of every dollar we spend we brother and 20 years from now all the money we have in revenue will go to pay the debt, nothing left for the national defense, homeland security, et cetera. so, dick, let's do something about the tax code. let's flatten it out do, away with all deductions except home interest and charitable giving. let's be bold when it comes to medicare and let's put social security on the table in a ration enamel way. like ronald reagan and tip o'neil did. there's no reason not to adjust the age. we can afford some means testing. that will save social security from bankruptcy as headed towards across the board cuts in 20 years. i applaud what you're doing but let's put social security on the table. me and senator mccain will work

on a resolution. >> senator durbin? >> david f-i could say this about social security. i want to thank my colleague for the kind words. social security does not add one penny to the deficit. social security untouched will make every promised payment for more than a years. the deficit commission was given a charge. add 75 more years of solvency to social security. it came up with an approach. i think, frankly, another commission came up with a better approach. we need to move on social security but let's put it on a track that runs parallel but separate to deficit reduction. the social security program as it is currently put together does not have any impact on the deficit. >> senator graham, few people believe there's none at arithmetic problem with social security. >> when i was 21 and 22 my parents died. i had a 13-year-old sister. i was in college in law school. if it weren't for survivor benefits coming to my sister

from my parents' contribution we would have a hard time make it. today i'm 55. i have no kids. we're paying more in benefits than we're collecting in taxes in about five years. in 2037 maybe even sooner you have to cut benefits by a third or across the table. all i'm suggesting is let's do with social security what ronald reagan and tip o'neil did. you know the age has to be adjusted for all entitlements including medicare to go from 67 to 69 like reagan and tip o'neill did for people under 55. i want does help our long term debt. to take it off the table is just the wrong thing to do and just very disappointing. >> we're going have to leave it. more of this debate ahead for sure. thank you both very much. coming next budget battles in washington and in state capitals across the country. we've been talking about all eyes on wisconsin this week as protesters protested and state legislators walked out. will other states now follow?

the president came under fire from republicans for not being bold enough in his own budget. is the budget blueprint a failure of leadership or a political power play? our roundtable weighs in. former michigan governor, jennifer granholm, former congressman harold ford, ed gillispie and cnbc's rick santelli. during its first year, the humpback calf and its mother are almost inseparable. she lifts her calf to its first breath of air, then protects it on the long journey to their feeding grounds. one of the most important things you can do is help the next generation. at pacific life, we offer financial solutions to accomplish just that. ask a financial professional about pacific life. the power to help you succeed.

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we're back. joined by our roundtable, be republican strategist, ed gillispie. cnbc's rick santelli. former congressman democrat from tennessee, harold ford and jennifer granholm who left the state house last month and will be joining us on a regular basis as a contributor to our roundtable. governor, welcome. >> thank you. >> nice have you here. there's so much to talk about and as i said at the top of the program from wisconsin to

washington it is this fight about reining in government spending. look at this picture. the sea of red. union protesters in the rotunda in madison, wisconsin, over the move by governor walker to take on the unions in this battle. this is how the "new york times" reported it on saturday. framed the issue. the images from wisconsin with its protests, shutdown of some public service and missing democratic senators who fled the state to block a vote, evoked the middle east more than the midwest. the parallels raise the inevitable question. what's at stake here? >> i don't think anybody disagrees that there has to be cuts. i don't hear anybody on either side saying that there shouldn't be. the workers on friday said that we'll accept the contributions to the pension, we'll accept contributions to health care. given the governor gave them what he sought, what's this

really supposed to be but an attack on collective bargaining. i love -- we were talking early, i love the smell of democracy. it's so inspiring that so many people feel moved to come out and express themselves. but this in wisconsin, make no doubt about it, everybody understands cuts need to happen but this is really about collective bargaining. >> ed gillispie is this open season on unions by a republican governor? is that what this is about? that's what the president said. >> i was interested in seeing the president insert himself and i agree with lindsey graham he might want focus his attention on getting control on federal spending in washington. what scott walker the governor of wisconsin is proposing is that the members of unions and public employees in wisconsin vote every year to validate their union participation. that is democracy. empowering the worker to make a determination as to whether or not they want to contribute these compulsory dues or not. this is what it's about.

the labor unions want to lock people in as soon as they get a job where they don't have a choice. democracy is a good thing. >> harold ford look at the numbers from 2008 in wisconsin and the presidential race. this was a state that the president carried 56 to 42. a swing state. you wouldn't know it by those numbers. more republicans certainly in the mid-term elections had strong gains and make no mistake the president is elevated to governor walker. this is about energyizing unions. this is the core of the democratic party and this can be a big issue. >> it's become more political. the president obviously wants to hold on his base, energyize that base for next year's election. it's important to understand that you can't look at all these states as one. the governor touched on it very well. this issue in wisconsin deals with whether or not public employees ought to pay in their

health insurance program which they don't now and their pension prom which they don't. the unions agreed to do this. this has now become and president obama was right in his description of it, questionable whether he should have gotten init, but this has become an assault on unions and the ability to organize in wisconsin. i'm hopeful that the governor f-he's serious about the math, which he obviously is, that he will take the unions at their word and say we're now prepared which is the right thing to do in other states where public employees are not doing this they should use this as a model. to say that collective bargaining ought to be ended i'm uncomfortable with that and i think republicans particularly scott walker -- >> why not continue with that? leave collective bargaining alone? >> i think it has implications for some of the local governments in wisconsin. i also think that, you know, i'm not a collective bargaining expert but even going back to fdr there's always been issues as to the sustainability and the appropriateness of having

collective bargaining hit with comes to the public employees. i think this is an issue that needs to be put out into the air and see -- many other states ultimately may not have the same balance sheet as wisconsin but collective bargaining even from a federal level these are big issues and these costs need to be put under control. if the country is ever attacked like it was on 9/11, we all respond with a sense of urgency. what's going on on balance sheets throughout the country is the same type of attack. >> let me pick up on that. governor jennifer granholm the national conversation is about how to rein in spending. the republicans they won in november, they are now owning this conversation it seems more than president obama and the democrats are. is that a problem politically? >> i think it's clear that the democrats want to rein in spending but they don't want to damage the economy. the whole point is -- i think there's a real overreach with respect to the interpretation of the november results.

the november results, sure some people voted the way they did because they wanted to cut everything out of government. but most people i would venture to say did it because they were uncomfortable with the fact that the unemployment rate is high. this is about jobs and the economy more than it is about the deficit. you slash too much, you hurt jobs. where is that balance. let me jump back for one thing on wisconsin. there are states in this country that have massive deficits that don't have collective bargaining and there are states that have very low deficits that do have collective bargaining. that is not the issue. if you want to have a discussion about collective bargaining have that but this is about deficits. i can just tell you, as governor of michigan over the past eight years i cut more out of state government that as a percentage than any state in the country. every single year we had to cut. in fact, by a large percentage. i did it in partnership with the unions. our unions gave over $700 million in concessions. i asked them to pay the new employees 20% towards their

health care benefits. he had don't even have a pension. they have 401(k)s. they have a defined contribution. >> don't want to talk too much about collective bargaining and unions. ed. >> we're not talking about eliminating collective bargaining what we're talking about is limiting collective bargaining to wages not the benefits package and having the union members vote themselves every year whether or not they want to continue that. >> let me continue this theme who is winning the conversation. the president was pressed during a news conference about why not move forward and stop kicking the can down the road, and present in his budget cuts to n entitlement programs. this is what he said. >> this is not a matter of you go first or i go first. this is a matter of everybody having a serious conversation about where we want to go, and then ultimately getting in that boat at the same time so it doesn't tip over. i think that can happen. >> the reality is talking to

administration officials, harold, they want the republicans to go first. they want them to propose big n entitlement use. is that leadership? >> i'm not convinced it's a winning leadership. i'm a believer that a president looks strongest and best in mid-november to end of december when he brokered a tax deal, an extension of the tax cuts, he was able to broker an extension or a rewriting of the s.t.a.r.t. treaty allowing all americans regardless of sexual orientation to serve in the military. i think they have to show the same kind of leadership on this front. if not, you run the risk of allowing the conversation that you believe in, hoping that concession is coming from unions in different states happen, but another conversation around collective bargaining and assault on unions taking a course and a direction you don't want. if the president leads on reducing spending, particularly

entitlement spending, it's not much. you listen to lindsey and dick durbin they say it should be on table. the president can benefit politically. but more importantly the country can benefit. i'm 40. i'm willing to give up my benefits until i'm 70. i believe there are more like me. i believe the president and republicans -- >> let me put this out. why shouldn't a democratic administration, this president say let's see what the republicans are willing to do? i went out big on health care and they weren't there. why not see what they are willing to ropose and see if we can structure a grand bargaining because i haven't had much success working with them. what's wrong with that? >> this past week we had two year anniversary of the original stimulus package. there are issues regarding spending that have been here through the entire administration. i think at this point the

politics and there's always going to be political gamesmanship especially with a key election coming up in 2012. this is a time as congressman ford has said that whoever owns this argument, the public is going get it. it won't be easy. pulling a dollar out of anybody's pocket is not something where people will raise their hands to volunteer. we're going to get there anyway. the president ought to be aggressive and be a true leader and step out on this issue. >> we'll take a break. come back and talk more about this leadership question on the budget but also the politics of 2012. deeply impacted by this very debate. e with our roundtable right after this. tdd# 1-800-345-2550

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this is, you'll be rewarded in this way, you'll be in the cellar of american esteem. a pox on all your houses. people at home sit there and go, what the heck just happened. i sent all these people to washington to fix things and they shut it down. >> and you've been inside the room, no the for this particular kind of thing. but you know speaker boehner well. you worked with him when you were in the white house. he may want to make a deal, i would think. but he also said, hey, don't look at me. i'm just the speaker. he's got a pretty restive base here. >> they passed the continuing resolution in the house. the only way the house can should down the government is by not moving forward a continuing resolution, which they have. the senate, under democratic leadership has yet to do so and they're out all next week. so there's a little bit of chicken being played here by senator reid. and the second thing is they talk about we're going to freeze spending. they're going to freeze spending after a 24% increase in federal discretionary spending. that's like gaining 24 pounds

over christmas and saying, my new year's resolution is i'm going to keep it i'm not going to diet at all. i'm going to keep it right there. that's not what the voters are saying. the biggest drag on economic growth is the looming debt, not looming, but mounting debt that is causing problem in the credit markets and is causing a sense among voters of uncertainty and the republican congress is trying to address it and the administration is not. >> it's interesting, harold, because the president in the state of union tried to say look, we need to deal with the debt. but we've also got to win the future. we've got to get the balance right between austerity and investment. but the conversation is really about how much austerity are you going to support. is he losing ground here? >> no. i think if in the coming weeks, in the coming days, you don't see a kind of spirit that governor granholm just suggested, that shutting down government is bad, both sides, the president's got to lead on that front. i would say one other thing -- i was in congress from '96 to

2006. there was a belief that the budget could not be balanced. that the debt was going to continue rising. every politician would go to the floor and beploen, we're going to have deficits as far as the eye can see. the congress balanced a budget under the congress and a president named clinton that really worked hard to get it done. we started to grown again and we're taking in a position where we're taking in more money than we're spending. unfortunately for the president, the politics is around deficit reduction right now. people want jobs created without a doubt and republicans better be careful because if they focus too much on this and jobs aren't created, they will be punished. but right now, people want to see government like themselves tightening their belts, being responsible, being held accountable. and in things being sensible. social security is a sensible thing to do. cutting part of spending is a sensible thing to do. >> governor chris christie of new jersey talked about austerity. he gave a speech in washington this week that got rave reviews, in part because of his plain

language on issues like taking on social security. >> you're going to have to raise the retirement age on social security. i just said it and i'm still standing here. i did not vaporize into the carpeting. and i said it. >> he didn't vaporize into the carpeting and i said it. this is the kind of plain talk that people are responding to. and you just heard from senator durban, they want to take social security off the table right now in terms of dealing with the debt reduction. >> senator durban is from my state, 3.7 muni issuance they need to bring to the market. they haven't paid vendors. it has come to the crossroads, where if we don't start to make the changes that the governor and the congressmen know are going to take time, we will have austerity forced on us. and that type of austerity is going to be much messier. there really isn't much opportunity for debate here. we do need action.

and even though the interest rates on the federal side haven't moved markedly higher, a lot of these assumptions fors this outlier years for the deficit are assuming fairly good behavior on interest rates and a fairly rebust economy. and when the clinton years came forth with all the jobs and a surplus, we were in a much different economic time. we had an industrial computer revolution going on in california, you had the wall fall in the late '80s that freed you up an inordinant amount of peace dividend money. >> ed gillespie, look at the politics out of this, this was polling out of new hampshire, the first primary state in 2012, after the iowa caucuses and here's how it looks on the gop side. it's romney leading their commandingly and he even looks gao good at this early juncture head to head against president obama. my question though, ed, is whether or not republicans are looking at this and saying,

we've got to own the deficit message, yes, and are they worried that the republicans overreach here ha is what the democrats in the white house are counting on. >> i don't think so. but generally as well, where there is a greater political risk to be seen as unwilling to cut spending, than there is to be cutting spending. i've never seen a dynamic like this, like what's here right now and again, i think president obama is out of touch. amtrak loses $1 billion a year, he's proposing $53 billion for high-speed rail in our budget. we're not losing money fast enough? we've got to lose it at a faster rate. there's a disconnect that's going to cost him in 2012. >> i've got to leave it there, thank you all very much. we do want to remember nbc news man and former moderator of "meet the press," bill monroe, who died this week at the age of 90. he played a key role in the history of this program. >> i guess moderator and panelist. questioning newsmaker guests

here in the late 1960s and early '70s, monroe became the fourth permanent moderator in 1975. and quickly gained a reputation for asking the tough questions. >> is that a proper minimal standard dictated by the bible to apply to candidates? >> can't you have affirmative action without quotas and without preference? >> why would not iran improve its position before world public opinion, if the hostages were untied and they were permitted to be seen by neutral observers? >> over his decade in the moderator's chair, monroe put those questions to heads of state, political power players and news-makers the world over. but it was his 1980 interview with president jimmy carter here, that had international repercussions. >> mr. president, assuming the soviets do not pull out of afghanistan any time soon, do you favor the u.s. participating in the moscow olympics? and if not what are the alternatives?

>> no. neither i nor the american people would support the sending of an american team to moscow. with soviet invasion troops in afghanistan. >> above all, it was his character and commitment to his craft that defined monroe's career. >> every sunday with bill has been a lesson in personal integrity in the highest standards of professional journalism. good luck, bill. >> thank you, sir. >> and we thank him for all his many contributions to this program. bill monroe retired from nbc news in 1986. he died peacefully at a nursing home in maryland on thursday. he and his family are in our thoughts and prayers. that's all for today. we'll be back next week. if it's sunday, it's "meet the press." ink our campus is spending too much money on printing. i'd like to put you in charge of cutting costs. calm down. i know that it is not your job. what i'm saying... excuse me? alright, fine. no, you don't have to do it.

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