>> production assistance for "inside washington" was provided by allbritton communications and "politico," reporting on the legislative, executive, and political arena. >> this week on "inside washington," the changing fortunes of newt gingrich and herman cain. >> ok, libya. >> the odd couple -- gingrich and freddie mac. solyndra and the politics of energy. >> it it it was of a political nature, i would say now. >> the president's message to china -- >> we are here to stay. >> the super committee deadline.

>> an osha in blood to rais -- 05 lead to never raise revenues. >> what happens if nothing happens? captioned by the national captioning institute --www.ncicap.org-- lukewarm support for mitt romney, rick perry's lousy debate performances, herman cain's problems, newt gingrich is having a good week. then the the story broke freddie mac paid him more than $1.5 million between 1909 and 2008. reporters reminded the image that he said at last wednesday's debate that he merely advised freddie mac as a historian. >> well, look, i was speaker of the house and a strategic adviser bid i was glad to offer strategic advice. >> he was a strategic adviser.

he said he did no lobbying of any kind, period. is this a rose by any other name, evan? >> one of the great scams in washington is former statesman who are not lobbyists but still get paid millions of dollars of these. i doubt that he was a lobbyist, but he got paid an awful lot of money and he looks uncomfortable. >> is this going to go back to bite him? >> there are a lot of the things people say he has as much baggage as delta air lines. they normally talk about the personal stuff. i think that is not that important. it is the ideological stuff, the ideas he posed in the past, the association's on health care, global warming, and these particular events, because he had attacked fannie and freddie relentlessly. now we learn that he had it to

monitor association. it doesn't look good. >> nina? >> newt gingrich is nothing if not glib. unfortunately, there are facts that contradict the things he says. when you say you did not lobby, that becomes a technical trick because you are offering strategic advice and getting paid mass amounts of money. the strategic advice -- how have access to people he was formally speaker for, how to do the deals you want to do -- that becomes a distinction without a difference. >> mark? >> newt gingrich, according to newt gingrich, told the indyfrec while he was paying paid every month, that the business model was insane. nobody at freddie mac ever heard him say this. at least five people say he never did say it. but this is newt gingrich.

oing back to what charles' point was, this man has shown incredible intellectual flexibility. he is somebody who has been on both sides of an awful lot of issues. that is going to be his undoing. >> here is a question from friday's "wall street journal." "how to politicians who arrive in washington, d.c. what with modest means leave as millionaires?" question posed by sarah palin. >> so much money i washington. while the rest of the country has been hurting, the washington area has been great, and the big part of that is lobbying money. politicians are bought and sold legally. that is the problem. if you don't think these congressmen are not bought and sold, you are dreaming. >> inside information sending somebody to present -- >> the supreme court may say

there is no corruption that justifies restrictions on campaign money, but there are going to be billions and billions of dollars spent this year. we will not know who sped them, who they benefitted, and the kinds of scandals you might see, like solyndra -- we don't know who gave the money. >> the conservative critique of all this is to say the federal government has decided over the last 50 years it will not intrude into every avenue of american life. big business, ethanol -- a bad thing in life is controlled or regulated in one way -- everything in life is controlled or regulated in one way. of course you will have lobbying for every element of american life. the root problem is the overextension of the federal power. if you have a government of jefferson and adams, you have a lot less lobbying because it did

a lot less. >> date i did not have a population of over 3 million -- they did not have a population of over 3 million. >> the most corrupt era of american politics was that time before teddy roosevelt took over and was run at a time of the small government by a very big business interests, including railroads and banks. where gingrich is really in trouble here is the fundamental hypocrisy of his position. in 2008, he was writing in "the washington post" advice for the republicans to go after democrats because of their relationship with freddie mac, demanding they return contributions to freddie mac, saying those who had helped freddie mac ought to go to jail, democratic officeholders. at the same time, he is cashing checks and walking with money. where is the consistency in this man? >> herman cain was doing well despite allegations of sexual

harassment then came an interview with "the milwaukee sentinel" and questions about libya which seemed to be wilder him. he now seems to feel that it of yours at these papers are toxic, so this week he stiffed the manchester "union leader." 4 republican primary candidate to stiff the "union leader" is like a candidate for the college of cardinals to stiff teh pope. >> the manchester "union leader" to completely break you still, i believe. i think is still in an election year in can break a candidate. >> it is an enormously influential paper, especially in a republican primary. imprimatur or opposition can be dispositive. >> what is killing them is not

the "union leader," it is that he is in over his head and winning it and everybody can see it plain as day -- winging it and everybody can see it plain as day. he said yesterday in new hampshire, in dismissing the importance of knowing anything about other countries, he said "what the country needs is a leader, not a reader." that is a hell of a slogan to run for the presidency on. >> romney is going to win because he is the only one was not a comic figure. this is kind of extraordinary. in the race for the nomination for the gop, there is only one guy was not a laughing stock by definition. >> the politics of energy. >> we have got in at least over the last couple of decades. >> -- lazy over the last couple of decades. >> that is what the president

thinks is wrong with america? that is pathetic. >> mitt romney picked up on this, too. with the president said, "we have become lazy over the past couple of decades. we are not trying to attract new business into america." is this going to fly, mark? >> it will fly in the republican primaries. it was a bad choice of words. you could make a case that is argument had validity to it, but for rick perry, is a life preserver. i will grab anything -- hhe said john maynard keynes did not know anything about economics the other day. >> look, it is like everything else in campaigns -- if it is an isolated incident, it is nothing, but it is something that actually is reinforcing

the stereotype -- this is the president u.s. said that america is soft, america lacked the imagination that built the golden gate bridge, as an example. he is a man who said, as we know, a famously in 2008, that the people in the flyover countries cling to guns and god and bigotry as a way to overcome bitterness over economic circumstances. that is why it resonates, as a man who does not understand or has contempt in many ways for his own people. >> that wasn't even a comment about people. it is about a country taking for granted that people would want to bring their businesses here, and that we should do a better job -- you talk to any business person and they will tell you that there are all kinds of barriers that it had placed. >> it country consists of people. >> romney runs against obama, gingrich runs against obama and

the news media, which is not a bad tactic. what do you think, evan? >> the only way romney is going to win, because he is basically not all that appealing to a person, is by making obama seem even less appealing. it is going to be a dirty, nasty campaign. >> no, i think he runs on the record, he does not run in as an appealing man. at% unemployment, i am risible, -- 9% on a limit, i am a reasonable, i ran a business, i can do this. he is not going to run a campaign against or soda. obama is going to attack obama on the results of -- all oobama is going to attack romney on the personal stuff and you can bet on that. >> charles has distilled the romney strategy, a replication

of the 1988 strategy -- competence, not on ideology. >> but in 1988, it was a boom time. >> there was a hearing on a hill. steven chu, secretary of energy, was in the hot seat over solyndra. $545 million loan guarantee. republicans are saying they acted illegally by guaranteeing that investors would get it back for taxpayers. is this going to come back to bite the obama campaign? >> it does not look good when at half a billion dollars goes down the drain. on the other hand, this program, originally with the bush administration, and at solyndra was originally with the bush administration, outlayed $10 billion of losses because it was supposed to be as the program.

it was supported by every republican and democratic member of the committee that approved it. many people think it is a good idea, many people do not sit there is nothing illegal about what -- went on what many people do not. but there is nothing illegal about what happened here. >> what about the timing of the layoffs? >> oh, yeah, except for that -- >> they should not have done that, but there is no evidence that there was anything political about the awarding the contract. >> i don't think charles agrees with you. >> it does show the problem of government picking winners and losers. >> china has invested $34 billion so far in to clean energy. where are we on this? >> know where. >> that is picking winners and losers. if you just wait for the private sector to do it, china will own everything. that is the way we build intercontinental rorailroad. >> if china wants to own

industry were ever product it makes it loses money, it can have it. what america wants is an industry that is productive. basic research, like nih, that will not -- [unintelligible] if you try to do it in an industry where you transfer technology into the market, that ought to be done by venture- capital lists and not government. >> the president had a message for china. >> the notion that we fear china is mistaken, the notion that we look to exclude china is mistaken. >> the nine-nation pacific trade deal excludes chinaberry the president announced he is sending 2500 marines and dozens of bureaucrats to australia. the chinese cannot welcome this news. >> this is good news. this is the president -- i have problems with his other policies and it will come but he realizes we have an opportunity -- i have

problems with his other policies in the world, but he realizes we have an opportunity. it is not just american good, but helping smaller countries in that area, opening at sea lanes, allowing congress, promoting democracy. all good. chinese are growing, this is all way of putting a stake -- a democratic president who is not known for aggressiveness is doing this, it is a message and the chinese will get it. >> if you are going to challenge china, don't you want to go bigger? >> terrible echoes of beirut -- >> in australia? >> in terms of the transfer of troops where there are too many to die, too few to fight. >> but in darwin, australia? >> united states is the major player in the world. our defense budget, even with cuts, is 17 times larger than

the next 17 countries and the world. our navy, much disparage, still has more ships than the next 13 nations in the world. it is a statement of reality, the united states involvement and engagement in the pacific, and it is a trade initiative, which charles has looted and i endorse -- has saluted and i endorse. >> the bigger military issue is the navy. our navy is a vulnerable. that is a problem that the pentagon has not figured out how to solve. >> nina? >> i really don't have anything to add to this. [laughter] >> i do find a comparison between beirut, mid-1980's, and darwin, australia, which has not had a lot of trouble

recently, it is a stretch. the australians are deeply in hock and involved commercially with china, and our worries that it becomes over-involved and over dependent, and is going to lose its freedom of action in foreign affairs. this is a way of ensuring that it remains our strongest ally in the region, and an extremely important ally. >> and that we have a jumping off place -- >> right. it means we have a footprint, and that is important. >> i think we've exhausted the reality as well as the defense of extending american troops around the globe. perhaps we might even think about cutting back a few in japan at this point. >> no, i am with you -- germany i would evacuate. >> ok, then why a further extension -- >> because china -- >> of and in italy shrinking force? >> time that is -- a growth

china is a growing threat and germany is not a threat whatsoever. >> it is not just troops, is threats. >> china's deepwater navy is going. >> and its claims are frightening all its neighbors who want us to step in. >> the bottom line is we are afraid. we are also of economically. -- we are also afraid economically. >> half a million americans in vietnam. >> the super committee deadline approaches. >> i am optimistic, but i don't hear anything that's as big and bold. >> what should the american people take away from this? >> in peac -- impeach grow request. >> -- grover norquist. >> grover norquist, who convinced republicans to sign

the no new taxes' pledge. senator patty reed sounds like he's a little depressed with the super committee -- sen. reid sounds like he's a little depressed with the super committee. light, asly ray of ligh ruth marcus pointed out in "the washington post," that a few republicans are backing off of the grover norquist pledge. there will never be a deal unless republicans give up pledge. >> what if there is no deal? >> it would be very bad. we would get socked it to the cortex of the european debt crisis. out on ratings could be downgraded again. we would see no particular way out. the republicans and folks at the defense department would be yelling about their pets. -- their cuts. people not getting their checks on time. there would be a tax increase come beginning of 2013.

the bush tax cuts would go away and we would be paying those taxes. that is a while white washington used to be a place where deadlines concentrated the minds. i am beginning to think they just don't. >> the federal government will be in business at least until december 16. they passed another stopgap measure. what happens if nothing happens? >> the american people will resolve the issue in november of next year. republicans have a plan, at the ryan plan, a president who will in some way support it with a slight changes, and will have a mandate or he won't. then we will have to revisit this. the way the government is divided -- these are real ideological distinctions. but you are wrong about the tax issue. the republicans, if you start with all righ -- paul ryan, go

all the way to the right, will accept a net tax increase as long as there is not a net tax rate increase. you get that when you cut out loopholes. that is what tax reform is. that is the essence of it. the problem is agreeing on cuts -- >> that does not violate the grover norquist pledge? >> it would override the norquist thing. of course it would trade all the leadership is talking -- they would accept and have proposed -- >> how does one guy gets so much power? >> you are mistaking it. republicans on the committee have proposed themselves an increase in revenue as long as the rates are not increased. the way it is done is by cutting loopholes. >> republicans really do need a declaration of independence from grover norquist. there is no doubt about it, that he is calling in the air to a b -- calling their tune. jon kyl, the retiring number two

man in the senate -- >> how do you explain pat toomey -- >> let me get evan in. >> grover norquist's power is unbelievable, but i am with a cross on this. tax reform did get rid of all of these loopholes -- i am with charles on this. tax reform. get rid of all these loopholes. >> anybody who has seen washington for 40, 50, 60 years, and now, as you pointed out, and is awash in money, really pleased those loopholes are going to be gone, they are crazy. >> when newt gingrich was speaker of the house, he and bill clinton managed to cooperate on things. >> what planet are you guys living on? this week, pat toomey, club for growth republican, proposed an increase in tax revenues. i am trying to explain that if

you are a republican and conservative, you can propose raising revenues as long as the marginal rates stay the same and go down. the way that you square that is by eliminating loopholes, which is what he proposed. this is not history, it is not hypothetical here it is real. the democrats have said now. >> club for growth is what pat toomey -- >> i retract and amend -- rome with the people who spoke about scarcity. >> i'm wondering if we're done with the capitals. >> grover norquist acknowledged this was a ploy on the part of the republicans. two facts that ought to be borne in mind. we are paying 15% of gross domestic product in taxes. that is the lowest percentage in 60 years. 60 years ago, there was no medicare.

60 years ago, there was no medicaid. 60 years ago, there were no cost-of-living increases under social security did 60 years ago, we did not have a $700 billion defense budget. the reality is that anybody -- no rational person believes that we can do anything about this debt without tax increases -- >> but i just said to you. >> of a substantial nature. >> toomey has proposed substantial revenues. >> they all have plans to eliminate loopholes, but they all of revenue increases as well. >> you are missing the point. yes, you are right, you have to have that, and the republicans have proposed it on that committee. >> not, they -- >> no! they oppose simpson-bowles -- >> portman and toomey

propose revenues -- >> what matters is revenues -- >> you are not listening. if you took away all the loopholes, which is what simpson-bowles did, you needed it tax increases. you cannot do it just by getting rid of the polls -- >> i have rarely encountered such thickness. i just told you eight times that these two republicans propose it, and you are telling me that you have got to have extra revenues. yes, and they were proposed. >> charles is right on this. it is not enough money -- >> $300 billion -- >> $300 billion over 10 years is what pat toomey is proposing. in his loophole-closing issue. that is $30 billion a year. we're talking about a need for

$4 trillion over 10 years if we are going to make a dent in this. even with the sequestered amount, that is the amount that will come in to be cut if there is no agreement. $1.2 billion. >> increase, but not nearly enough. >> let me just say this in closing -- i wish to the super committee could agree on things the way we do here. last word. see you next week.