gwen: 10 years, $858 billion, that's the price tag on a white house deal that's managed to anger democrats and please republicans. we go behind the curtain tonight on "washington week." >> i think it's clear now that taxes are not going up on anybody in the middle of this recession. >> i think it's fair to say there's a certain amount of unease with the proposal that was put forth by the president. >> if one side takes out what they don't like and the other side takes out what they don't like, we're going to have that. gwen: a washington spectacle with the president and house democrats in opposing corners as republicans watch in the sidelines and the president scolds everybody.

>> i think it's tempting not to negotiate with hostage-takers unless the hostage gets harmed. >> nothing got done, not the tax deal, not the repeal of the ban on dubais -- gays in the military, not immigration legislation. will the clock run out? plus, the wikileaks fallout continues, affecting u.s. relationships around the world. will the justice department prosecute? covering the week, charles babington of the associated press, jackie calmes of the "new york times," lori montgomery of the "washington post" and tom gjelten of n.p.r. >> award-winning reporting and analysis, covering history as it happens. live from our nation's capital, this is "washington week with gwen ifill" produced in occasion with national journal. corporate funding is provided -- >> i would like to have been a

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provided by boeing and wells fargo advisers. additional funding for "washington week" is provided by the ethics and excellence in journalism foundation, the anenberg foundation, the corporation for public broadcasting and by contributions to your pbs station from viewers like you. thank you. once again, live from washington, moderator, gwen ifill. gwen: good evening. congress tackled all the big political issues of the day this week, immigration, nuclear security, gay rights. even the normally placid harry reid was irate, though, at the lack of movement. >> what in the world do they accomplish by saying we're not going to allow you to do the start treaty, the defense authorization bill, until the tax bill is completed and spending is done. we know that before we leave here this year, we're going to have to do something to finance

the government for the next year and the odds are we're going to do something on taxes. for them to have these, i repeat, artificial road blocks is foolishness. >> nothing stirred the blood like the debate that erupted after the president agreed to extend tax cuts republicans wanted to the wealthy. to the president, the deal was not a betrayal. >> i will be happy to see the republicans test whether or not i'm itching for a fight on a whole range of issues. i suspect they will find i am. and i think the american people will be on my side on a whole bunch of these fights. but right now, i want to make sure that the american people aren't hurt because we're having a political fight. >> gwen: thursday, liberals pushed back. >> we were told yesterday by the vice president this was a take-it-or-leave-it deal. we're saying, leave it. gwen: to cap what turned out to be a remarkably weird week,

vermont independent bernie sanders commandeered the senate floor. >> you can fall whatever i'm doing today whatever you want. you can call it a filibuster or a very long speech. >> it ended eight hours after it began. then last this afternoon, former president bill clinton back at his own stomping grounds to say everybody's got to give a little. >> we've played political kabuki for a year, had two government shutdowns. we can't afford that now. gwen: this was such a week and i don't know where to begin. but i'm start with you, chuck. where do we begin? what did they accomplish and what didn't they? >> not a lot got accomplished, gwen, but the table is set for the big tax package. you'll have a senate vote, a vote on monday to end debate and then probably tuesday or wednesday you'll have a vote on the measure itself. it probably will pass and it will go to the house and then that's where the fireworks are

going to happen, as we noted with speaker pelosi in there, the house democrats are very unhappy about this. and they're unhappy with president obama both about the policy, the substance of the tax proposal that he cut with the republicans, and they're unhappy about the process. they felt that they were cut out and some of them are very resentful. i think the level of animosity between his normal allies in the house, democratic caucus, is quite high. gwen: let's talk about the policy and the process. i want to ask you about the policy. give us the bare bones of what the deal was that the white house cut? >> the bare bones, the core of this is the extension of the bush era tax breaks for all taxpayers for two years. the republicans want it permanent for everyone, including the rich. the democrats wanted it just on income below $250,000 roughly for couples filing jointly. in return for that, in return for the president agreeing to extend the top rate for two years, he got actually more than

most people expected. he got a full year's worth of unemployment insurance for the long term unemployed, up to 99 weeks in the hardest hit states. he got expansions of several tax credits that were in the stimulus package of 2009 that benefit low and moderate-income people. so by dollar and by millions of people helped, he got a lot more than they did, but, you know, it's hard to, you know, when your side is revving for a fight, it's hard to see what you got. >> that's exactly the thing. a lot of this stuck in the craw of liberal democrats who have been unhappy for months. what were the things that really made people feel unhappy? >> the number one item was the concession on the estate tax. democrats in the house and in the senate are extraordinarily upset. they don't think president obama had to give up the estate tax because this is a tax, it currently has lapsed. for the past year we have had no

federal tax on estates but it's about to spring back to life on january 1 and hit estates worth more than $1 million at 55%, which is the toughest estate tax we've had since the bush tax cuts were passed a decade ago. so house democrats are sitting here going, why did we have to give away the most generous estate tax provisions in decades? they've given them -- not only will they be taxing only estates worth more than $five -- $5 million for individuals and $10 million for couples, but only at a 35% rate. now house democrats are looking at this is ing, should we amend this thing, send it back to the senate and say, you fix it. >> but why did the administration have to settle on the most generous estate tax measures on the table? part of the reason is that their fellow democrats in the senate from rural states with farms and

ranches demand it so the democrats are fighting among themselves on capitol hill on this issue, too. so -- gwen: is this something that the administration saw coming? when we saw the president walk into the white house press room the other day and give that impromptu news conference, he continued that all week long. he began to push back. he made a public appearance on the subject up to and including his surprise appearance with bill clinton today, and he sent out, what, 50 press releases saying, this one supports me, the mayor of pocono supports it. did they see this coming? >> it seems, gwen, not entirely. if you notice the news conference the president had on tuesday, he was quite defensive, probably the most defensive we've seen him for a sustained period on camera. gwen: seemed like he had his dukes up when he came out. >> he did. some feel it was calculated and some feel it was spontaneous. but the president, with vice

president joe biden doing a lot of the direct work, they really negotiated this thing primarily with mitch mcconnell the republican leader in the senate so they didn't have as much interaction with democrats from the house and senate as they might otherwise have had. especially on the estate tax, perhaps they would have had an idea of how much resentment there would be. but generally speaking, most of the debate was about income taxes, that that was what the bush era tax cuts were about. >> chuck, i'm curious about the press conference. you say some people say it was calculated. on the other hand, it seemed to me that he was more passionate in that press conference than just about any time i've seen him. and this has always been the rap against him, that he doesn't show passion. he sure showed passion on that day. >> but it took until the end of the press conference. gwen: it seems sometimes at that very last question he's like, oh, what did i come here to say, and he tosses it all in there. did it seem that way?

were you in the room? >> i was not in the room. my colleague was in the room. ben got the first question, have you betrayed your democrats, and he said, i have not betrayed them. and the thing that really set off some democrats about that, his performance, was he talked about the sanctimonious liberals who would rather be pure and have empiric victory than help the american people. gwen: let's talk about the sanctimonious liberals, the house democratic caucus who said, take it or leave it? no thank you. what happens within the caucus that got them so revved up? >> it's not just the policy, it's also the process. because they did have that meeting at the white house with house democrats on monday where the president was told very specifically, the white house did not acknowledge that a deal had been cut at that point and democrats are sitting there going, look, if you go this far on the estate tax, that's really

unacceptable to us so please don't do that and then they're barely back at the capitol when they learn a deal has been cut. so they go into this meeting the next night and they really feel like, you know, joe biden, the former senator, has just cut a deal that his buddies in the senate were in on, and that republicans clearly knew what was going on, but we, over here in the house democratic caucus are left out in the cold. gwen: isn't joe biden supposed to be the secret weapon? >> in this case, you have to wonder, the deal is, the administration did get more for this than they ever would have expected and i think would get if they were to wait till january when the republicans have more members. what i find interesting about this whole -- all these complaints about process is the process has, you know, what they should be, you know, the question of the process is why weren't they fighting this fight if it's such a great fight to have for the past 11 months or

the 10 months before the election. gwen: what's the answer to that question? all these issues which are coming to a head in this last couple of weeks, i feel like we've been here before, where the last couple of weeks before the holidays everything comes to a head. but the immigration, the dream act bill has been languishing, start has been languishing. what was the third thing that didn't happen this week? >> don't ask, don't tell. gwen: it feels like everybody's rushing toward a deadline nobody's going to make. >> on the tax cuts, i mean, this is the fault of democrats. i mean, they chose not to go there because of the election because they had members in moderate districts who were afraid to raise taxes on anybody. but in the senate they took a poll and found out that most people didn't want to vote on it and so they chose to punt and now here they are trying to figure out how to -- >> but the poll was taken in september, wasn't it, after labor day in the senate? >> i believe that's right. >> and by that time the polls

had continued to come down against democrats prior to midterms and you had even liberal senators who previously were opposed to extending the bush rates on the high income, who came back and were in such trouble, they hold harry reid, i can't vote on this before the election. >> it seems like the republicans are all in favor of this, so could we actually have a situation in the house where this passes but with a minority of democrats supporting it and a majority opposing it? >> that's the most likely scenario, i think, tom. it's really interesting, remember, the previous speaker, dennis hastert, the republican, he had a rule called the majority of the majority rule and it was his own rule and it meant i will not pass major legislation, i won't bring it to the floor, unless most of my caucus supports it. it really made the minority party irrelevant. it didn't matter whether or not they showed up. now, democrats criticized that policy at the time saying it was anti-democratic. so now they are saying, hey, we

never subscribed to that. but the fact is, tom, that if a democratic president and a democratic majority have to pass a big piece of legislation, primarily with republican votes, it's not the most comfortable thing in the world. >> and gwen, you talk about getting things done or not done. if they were to have that rule, if president obama were to face that rule in the house, he could look forward in the second half of his term to getting -- having a really hard time getting money for the war in afghanistan, to getting a trade pact, like approval of the korea-u.s. trade agreement. gwen: let's pull back for a moment. it seems that the debate tonight in washington and going forward is whether compromise and negotiation is what we value, or betrayal and triangulation is what works. and that's where we saw bernie sanders on the floor today for eight hours. is he representative of the unhappiness or does that go anywhere? >> he's representative, mostly he's representing the

unhappiness you see primarily in the house. the senate, there's just not that much unhappiness. but you're right, gwen, in that, this is a dramatic change and perhaps a pivotal moment in obama's presidency, because what we've seen up till now is a solid minority in the republican party standing shoulder to shoulder against the things he wanted, primarily healthcare, for example, and they had to push it through only with democratic votes. now, after this election, you see a dramatic turn on the president's part where he cuts a deal literally with the republican chief of the senate, and i think this is a bit of a shock to the democrats in the congress. and it's a totally different way of doing business. >> especially considering that senator mitch mcconnell, the republican leader, is the person whose legislation has been obstructed, he's taken the lead on that. and it's interesting to see the house leaders who will be empowered come january 5 when they return for the next congress who are on the sidelines so far of this issue.

>> quite happily. gwen: when you're up there watching it, does it feel like a giant game of chicken? >> it did until they cut this deal. now it feels more like a game of chess. i mean, for a long time, it was unclear whether democrats were going to actually take a chance on letting these cuts expire and nobody quite thought they would, but there are still folks up there who think they should have that fight,, that it's a winner politically, the polls show they don't want to give tax cuts to the rich. >> ultimately this is only a winner politically if the economy improves and by a lot of estimates of the analysts, like the administration said quite correctly, private sector, macro economists have revised their forecasts for the coming year for more growth, more jobs. however, that's in 2011. that would go a long way towards making democrats a little

happier with this administration but it shows the growth you would get in 2011 robs from 2012 which is an election year. gwen: isn't that part of what larry summers is thinking, outgoing head of the economic council and the president backing him up by suggesting all of a sudden that there might be a double-dip recession. >> if this doesn't happen. but the big word missing from the debate is deficit. remember, we just had an election where the deficit was a big deal. we had the commission about the deficits. and lo and behold, we have this deal that looks like it's about to go through that's going to add $900 billion to the deficit. i frankly, have been surprised that there hasn't been more debate about it and where are the tea party activists who seem so sincere? >> senator reid mentioned that republicans want the senate to act on tax issues before taking up the other issues. will there be time, if this does pass in both houses, will there

be time to go back to start or for that matter the defense authorization? >> kyle keeps saying no. to have either of those debates. gwen: we're talking about jon kyl, by the way, the senator from arizona. >> the white house still hopes there's time for the start treaty. it's unlikely don't ask, don't tell will pass. >> haven't we seen such an increase in the number of republican senators who have expressed support for the start treaty. gwen: we've got a week to figure it out because everything comes to a head next week. and while washington has been transfixed by political warfare, a cyber war has sprung up around the world over the wikileaks leaks. defense secretary gates said it's embarrassing. attorney general eric holder says he's investigating and wikileaks founder julian assange remains under arrest in great britain. but what should we be allowed to know? how should we be allowed to know it?

and can the internet truly be free? it seems like these are the tough questions tonight, tom. what are the answers? >> i think what that we're learning here -- those are the tough questions and i think what we have learned from this is we haven't really thought through the answers. this wikileaks episode and the cyber war that has sprung up around it is arguably the first big internet freedom battle that we have seen. and what is happening is it's the united states that is suffering the consequences of diminished power and prestige and i think that one of the things that that shows is that we have not really understood how the internet works, its global power, its reach, its significance. president obama went to china just over a year ago and made this dramatic speech about how important internet freedom is. he said that the more freely information flows, the stronger societies become. and then secretary of state clinton two months later gave her own speech saying very much

the same thing, that information networks help people discover new ideas and hold governments accountable. gwen: what's different this time? >> what's happening now is the united states is basically having to dial back -- put asterisks on those statements. well, it depends on what type of information. so the state department, having just made a big deal about emphasizing the importance of information flowing freely, is this week literally in the position of telling its employees there are certain web sites they're not allowed to look at, certain documents on the internet they're not allowed to read. so it really is kind of an embarrassing moment. we talk about how embarrassing these disclosures have been for the united states in terms of what they've revealed, i think just as embarrassing is the way that the united states has been shown to be a little bit naive, at best, and maybe hypocritical at worst. >> what they're concerned about is classified information being released. so how is this different from, if, in the 1950s someone

leaked classified information that went into a newspaper. is there something different about either the way to get it out there or -- i'm not quite -- >> two big things are different, chuck. one is the extent to which we're all networked now. so that the united states and other governments, their information is in electronic form so it spreads and is shared much more quickly. also, the amount of social networking -- do you remember the iran contra scandal? that broke in a newspaper in lebanon. it took weeks before the rest of the world figured it out. nowadays this would be instantaneous because of the internet. even though, you're right, there has been disclosures before, they've never had the power that they have now thanks to the internet. >> and the controversy in this country. you said, these are embarrassing disclosures for the united states. embarrassing is one thing, damaging is another. what's been damaging, do you think, about the disclosures to date? >> well, i think the iraq and afghanistan war reports were

arguably damaging to the extent that they identified sources and methods. in the latest batch, probably the most damaging ones had to do with pakistan and they revealed very sensitive discussions that were taking place with the government of pakistan about the transfer of nuclear materials. i mean, there is not a more dangerous place in the world than pakistan and the issue of nuclear materials. so that was arguably, i think, really risky. but i think a lot of them are just self embarrassing. i think the best metaphor was a blogger who said that the significance of the release of these documents is like the whole u.s. government being put through a full body scanner. you know, all this nakedness is displayed. i think that's what a lot of it is. >> tom, at this point, what options does the government have for controlling this thing? can they shut it down? are there legal options? >> they're investigating legal options, but it's going to take some very creative lawyering. >> espionage is not the natural

option? >> it's hard to distinguish between what wikileaks did and what the "new york times" did. so i don't think the administration wants to prosecute the "new york times" for espionage and if they can't do that, can they prosecute wikileaks. gwen: but one of the organizations investigated it, scrubbed it, then published it. >> but wikileaks did not publish those documents. they came out simultaneously on the news organization web sites. gwen: that's what's complicated about this. they're going to push back, too. this was a good show. thanks, everybody. the conversation has to end here but will continue online in our "washington week" web site extra. you can find us at pbs.org. tonight we send condolences to the family of elizabeth edwards, who lost a valiant battle against cancer but left behind

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