>> production assistance for "inside washington" was provided by allbritton communications and politico, reporting on the legislative, executive, and political arena. >> tonight we made history. >> this week on "inside washington," romney makes it two in a row. >> i understand the difference between a venture-capital and vulture capitalism. >> south carolina, with the gloves come off. >> defunded it government- mandated health care with taxpayer-funded -- romney funded health care with taxpayer funded-abortions.

>> how does a 76-year-old man become the youth can it? what is behind the shake-up at the white house? >> there is no question i will be deeply miss having built by my side at the white house -- having bill by my side at the white house. captioned by the national captioning institute --www.ncicap.org-- >> one week after winning the iowa caucuses by eight votes, mitt romney captured 39% of the vote in new hampshire. his closest competitor, ron paul, had 22%. the other candidates, but desperate to stop him, have attacked him for his success as -- thesee capitalist wjla.co are republicans -- and for creating a model for the obama health care legislation. that does not seem to be

working. he gives many conservatives the willies. there was a meeting of called for conservatives this weekend to see if they can find somebody else. romney pull this off, mark -- how did romney pull this off, mark? >> he went across the board. it was a very decisive victory. >> charles? >> he was lucky by having the opposition split. no. 2 was ron paul, who is not going to win the nomination. huntsman camped out in new hampshire and eat it came out with 1/6 of the vote and a six- man field. >> nina? >> you have to give him credit. he took a chance by going to iowa late, eking out a victory there, and then he built this sort of concrete wall for himself in new hampshire, which

he was able to execute. he is at ahead in south carolina. as a strategic thing, it is an accomplishment. >> colby? >> he had an advantage in new hampshire, and in iowa, it was a tie. >> in election day, at one of manchester, new hampshire's polling places, i asked a nurse why she voted for mitt romney. >> he is the most moderate of the candidates that i have heard, and i think he has the best chance of beating obama. >> the best chance of beating obama. nearly half the voters in new hampshire did not decide on their vote until a few days before the primary. nearly 1/5 waited until election day. 1/3 said they were dissatisfied

with their choices. i would call that enthusiasm gap. >> absolutely. he wins only on electability. >> you don't get a sense of a personal, emotional connection that you get with bill clinton or ronald reagan. >> you don't. sort of or reason for the republicans is in iowa and new hampshire, there is allegedly this big increase as about beating obama, but there is only a little bit greater turn out in the last sort of bush-we primaries. -- bush-weary primaries. >> the former attorney general of new hampshire, a longtime adviser to the republican presidential candidates, every republican in new hampshire, had an interesting formulation. he said that ordinarily what happens with voters is that their hearts make the decision and their heads follow.

this year is different, the heads make the decision, just as you saw in the piece you did. romney's ability to win, being the more moderate -- and then their hearts will follow. he is a romney supporter, and obviously hopes that is the case. i agree with you, there is not an emotional intensity except with ron paul. >> how do you beat barack obama if you don't have an emotional connection with your candidate? >> you may not. that is what everybody is worried about. the field is weak, romney is weaker than usual front runner, particularly, as you say, a constituency, republicans, as extremely anti-obama as we saw in 2010. as you mentioned, the turnout in iowa and new hampshire was essentially the same as 2008, a year when there was not a lot of

republican enthusiasm and when there was a contested primary in iowa and new hampshire where, at this time around, there wasn't. you would have expected all the energy to be on the republican side. it is not a good sign for the general election. >> one thing and a penchant -- one thing new hampshire voters ought to be noted for, 62% of the catholics who voted last tuesday voted for a mormon, which is rather remarkable. in the two catholic candidates, between them, rick santorum and newt gingrich, 19% of the vote. i thought it was a blow for tolerance and testimony to something good. >> the exit polls indicated that romney and paul stood to the board of those who earn less than $30,000 a year. south carolina is different.

17% below the poverty line, unemployment almost 10%. different playing field at there. >> i don't know how that turns out with party registration. i suspect republicans are a higher income levels than at the general population. romney will play well with that group. he does not have our problems with the issues that dog him -- his record with the bain capital. >> does santorum do better in south carolina? -- is, but at the moment defer to mark on this, i have not been there, but i do not see a huge groundswell for him. he campaigned in iowa and it paid off, but he has not camp out in south carolina. his super pac is not as big as the other super pacs.

>> he is getting some funding from -- >> he could come in second. >> new hampshire has been historically unhospitable to candidates with a religious appeal. pat roberts in, even mike huckabee after his big victory in iowa four years ago, and rick santorum this time. south carolina has a strong tradition of cultural and religious voters. gingrich, perry, or santorum able to court that constituency -- >> they better. >> i draw a distinction between leaving behind broken families and broken neighborhoods and leaving behind a factory that should be there. >> the obama people would come after free enterprise. i am a little surprised to see

newt gingrich as the first witness to the prosecution. >> gingrich and huntsman are dialing a down after a few days. rick perry is calling him a vulture capitalist. why are they doing obama's work for him? >> desperation. rick perry looks ridiculous making these charges. at least with newt gingrich, you can almost believe he believes it. with rick perry, it is like he is reading off a script. newt gingrich will cease at whatever issue is at hand -- seize whatever issues at hand. he is basically unto supplant it and, i think, -- undisciplined , unprincipled.

he may get lucky. he could conceivably succeed with this strategy in south carolina. i think it is unlikely. but it is possible. that would revive his candidacy. i think it is a lot more about destroying romney than winning the nomination. i am not sure that newt believes right now he has any chance of that. >> will that come back to haunt them later on, colby? >> no, it is not. the problem romney has is that he has made his business. the issue -- his business career the issue. when you make that kind of decision, and ask to hold up. let's examine what happened with bain capital. romney says this is an attack on free enterprise. nothing of the sort. free enterprise is also the hot dog stand outside, a person who

runs a beauty shop. it is the ability to make profits and make business grow. this is a venture capital, and you need to examine at the record of the venture- capitalists like romney, how well and how badly they did some people more help, some people were hurt as a result of going in and trying to turn it around. >> here is what andrew sullivan says -- "teammate millions of dollars by the firing the working class merely to enrich bain." >> i think his business career is analogous to john kerry's military career. he has made it -- may not be fair game, but game. the kind of thing that bain capital bid, as colby said, has

winners and losers -- >> but that's what is. >> it is what it is, but many people don't realize that he did not build a company, etc., etc. this is a person who comes in and sometimes dismembers these places, moves them even off coast, and he will be faced with that, and they pay an entirely different tax rate on the profits. no one will focus on that because that is not sexy enough. dbut he pays less of a tax rate than is the secretary. >> does this argument, by the time barack obama comes along -- has lost some of its sting because it is going on right now? >> that is the case that the sunny republicans are making now, like reverend wright was

resolved by the primary of 2008 and john mccain did not revisit it in defauthe fall of 2008 against barack obama. this opens up a larger debate about the economy. does the economy exist to serve human beings or to human beings exist to serve the economy? nina put her finger on something important. when you have people being laid off, steel workers, firefighters, nurses, who are paying taxes at a higher rate than mitt romney did, we are going into -- they pay at the rate of carried interest, and all of their income is that carried interest, taxes nearly 15% -- we are going into a time that this is directly contradictory. democrats being the party of themselves, the lower classes, run candidates who are wellborn and privileged -- fdr, and i

stevenson -- adlai stephenson. republicans have nominated people of humble backgrounds -- ronald reagan, richard nixon. mitt romney is the richest candidate who has ever run for president. that will be an issue regardless of how this is resolved. >> liability, charles? >> it did not hurt fdr , johnson. the bushes had enough money in the bank. i am not sure how much a candidate has really matters. i think what matters here is that romney had to know that when you are a venture-capital s, democrats are going to hit you on that. what surprises me is that he is attacked by republicans on this and he doesn't have a good answer. he needs to have an answer.

needs to explain what he does, how, for example, what he did is analogous to what obama did with the auto companies. in order to save companies and a decline, about to go under, you have to slim down, fire people, close to the ships -- close dealerships, in order that you save the company and grow and expand in the future. he did it with private money, obama did it with your money and mine. it is not hard to do, but he does not seem to have an answer. >> the ron paul phenomenon. how does a 76-year-old man get such a youthful following? >> i have useful idea is did they know i am concerned about their general -- i have a useful ideas. they know i am concerned about their generation. >> if you attended some of ron paul's events, as mark and i have, you appreciate the

intensity of his younger voters. >> the youth candidate of 2000 it was barack obama. the youth candidate for 2012 is ron paul. his phone was monitored by veterans. just an intensity about him. part of the deal, make no mistake about it, is his authenticity kate he says exactly the same thing wherever he is. daddy warbucks and capulets, inc., or four firefighters and -- or firefighters and blue collar workers, he gives the same message. >> charles street did a column about him -- charles did a column about him. >> i am now an acolyte. he is not going to win the race or be the nominee.

historically speaking, however, his race could be the most important. he is bringing libertarianism, or his brand of it, out of the wilderness. these pathetic third-party runs 25 years ago. now he is running a strong second. he will end up in tampa the way jesse jackson ended up in the democratic conventions in the 1980's or pat buchanan in 1992, the guy with the second most delegates. he will demand changes in policy and he could demand a primetime speaking slot. if you are a republican candidate, you better start thinking about how you are going to handle them. otherwise, he walks out and runs as a third-party candidate, and the republicans lose before the race even starts. >> i'm shaking my head in this sense -- he is not jesse jackson or pat buchanan who will settle for a stump speech at the

convention. he will go into the convention with a voice. it will be his voice coming through the party platform. you are going to see where the republican party of 20 12th is going to be. he has some ideas that are going to be at odds with those held by the establishment. >> do you find yourself sometimes agreeing with him before he goes off a cliff? >> well, yes, sometimes. i sometimes agree with almost everybody. the only reason i don't think he will run as a third-party candidate is his son has a career in front of him. his son and is in the united states senate, and i don't think he will that. i am not sure that platform, which thing that does about it instantly, -- which can be disavowed instantly, will do it. i am not sure what i can it can do for ron paul that will at peace and -- what a candidate

can do for ron paul that will actually appease him. >> the turnout was up, now is because of ron paul. -- and that was because of ron paul. >> how much of that, gentlemen who have been there, do you think is in a way anti-war or isolationist? >> it is all of those things -- gold bonds, anti-government, anti-fed, anti-bailout -- >> and it is the stone out constituency. shoot up on -- how would you know? [laughter] >> something unusual happened this week. the supreme court came to a unanimous decision, and the issue was religious freedom. tell us about that, nina. >> the court for the first time said that civil rights laws do not apply to ministers of the church or of any church.

it was unanimous -- that was surprising -- and it is more limited in some ways than it sounds. the courts said that -- you know, for a lifetime, the catholic church and mormons in particular has said that we should not be in court at all. the court does not have any business to judge who is a minister and was not. that is one side. the court said yes, we do. on the other side, the court said that once you say if somebody is a minister and we agreed that person is the minister, that is eight. -- that is it. we will not look into whether there is a pretext for discrimination. if this person has a significant religious duties, that person is the minister and it does not matter whether you decimated -- discriminated against him or her, that is it. >> but the case was a woman who worked in a religious school,

had a case of narcolepsy, she left, and they would not rehire her. >> she had trained to become a minister, had that standing and status. they have a right to handle the minister is the way they wish and that is what the court said. >> that was the issue, whether the federal government has the right to direct or influence out religious denominations hire, fire, and treat clergy. what is amazing is that it was unanimous. equally amazing that the obama administration took the side of those who lost 9-0. there is no difference when the federal government decides who can work in factories or any kind of institution or a nonprofit versus irreligion -- a religion. the obvious counter argument, which everybody on the court agreed with, is that the first

amendment rights religions and churches differently from any other association in the country, and you have to respect that. whereas laws that apply to every other association, a church is different. it is amazing that the obama administration argued against it. kagan and alito concurred in one of the separate concurrences. that tells you something important. >> first words inr the bill of rights -- "freedom of religion." >> would it have made a difference if she had been driving instructor at the school or gym teacher? >> she was. she taught mainly math and science, but in order to get tenure -- >> she had a calling, a vocational thing. the court said we are not the ones who are going to decide what kind of coordination is

required -- ordination is required. the church will decide on its own ordination. the point is that religion is not effective government, government is a threat to religion. >> a little bit about the construction of what the federal government was doing. the federal government is not desired -- does not decide who can be hired at an institution. this was about whether you can discriminate against a person in hiring and firing. they took the purist position that you cannot do this trade with the court found was that the overriding interest was religion in this case, and it is not a matter of saying the federal government was anti- or trying to make them do something they should not have done. >> we can talk about whether federal government or state governments can decide -- >> that is the key question.

>> don't have time to go into it. shake-up at the white house. >> my chief of staff, bill daley, it told me that after reflecting with his wife and family over the holidays, it was time to return it to our beloved hometown of chicago. >> what is the back story, colby? >> i don't know if there is any interesting that story. the white house is in serious political mode now and the president is going to be out and about, and you need somebody in the white house to keep the trains running. heyou do not need a big political operative as your chief of staff. >> i don't think it's that simple. i think they brought in bill daley to be grown up in the will and a person with business connections, and it didn't work out. there is a very insular group of people around the president, and

i always thought -- i thought this for president bush as well -- that that is very poisonous to the presidency. you get too insulated, and you only have your little groupies telling you what you want here. >> was the marginalized in the white house? >> to a degree, and the strategy at the beginning of phase tenure was to reach out across the aisle and make yourself more open to business interests and republicans. that has been changed dramatically. what ever else, the definition of a chief of staff that bill daley brought to it was somebody without that experience, political experience, private -- 6. -- with an outside expert, political experience, private- sector experience, not unlike jim baker. jack lew has enormous ability and knowledge but does not bring to it that same -- >> look, i cannot believe how

cynical my colleagues are. you heard the guy to he wants to spend more time with the family. [laughter] i think that since everybody says that when they leave a job, there should be a legal requirement that when you take a job in government, you have to say, "i am doing it because i want to spend less time with my family." [laughter] >> jonathan alter in his bloomberg column are purged the former head of the democratic national committee, would set "i am going to chicago where they stab you in the front." see you next week.