not want to go down the path of obamacare. now, that's why we voted over 30 times to repeal it, to fund it, to replace it. gwen: health care. taxes. bain capital. yoult sourcing jobs. -- outsourcing jobs. each candidate tries to beat the other to answer the question, who do you trust? covering the week, michael duffy of "time" magazine. lori montgomery of "the washington post." alexis simendinger of real clear politics. and sam youngman of reuters. >> 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 association with national journal. corporate funding for "washington week" is provided by -- >> we know why we're here. >> to connect our forces to what they need, when they need it. >> to help troops see danger.

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annenberg 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. if you doubted for even a moment that we are in the middle of a high-stakes political season, consider just this week. the president stepped up to pitch to the middle class with a call to extend tax cuts for anyone earning $250,000 or less. it won't survive the house. the house passed another bill to repeal the health care law. it won't survive the senate. and each presidential candidate stepped up his effort to paint the other as untrustworthy, out of touch and bad for america. the fight over dueling television interviews as mitt romney said the obama campaign attacks on his history at bain capital are beneath the dignity of the presidency.

>> the president needs to take control of his people. the kinds of attacks that they've been making have now been checked time and time again by independent fact checkers. they've been found to be false. and misleading. simply wrong. but they keep on doing everything they can to deflect attention from the fact that the american people want someone who can help create jobs in this country. get people working again. gwen: obama's response? that romney should be held to his record. >> mr. romney attested to the s.e.c. multiple times that he was the chairman, c.e.o., and president of bain capital. and i think most americans figure if you're the chairman, c.e.o., and president of a company, that you are responsible for what that company does. ultimately, mr. romney, i think, is going to have to answer those questions. gwen: the heat wave that broke in washington but not when it came to politics. kwla do do we owe this stepped -- what do we owe this stepped

up velocity, michael? >> you could almost feel the intensity of the campaign grow this week, surge as both the white house and the romney operation, it's like they stepped on at gas. and if you have a -- rewarderring points around the slight edge to the white house base r because it -- white house because it started last week, they bought more ads, clearly hitting the road more and you can sense autumn null intensity in the way he is talking. not normal for july. and it gets -- defense for obama and the offense begins, obviously with the economy not turning around. they have to do something to define romney before his convention. and their definition, reduced to an almost cartoonish level is heartless, mysterious capitalist. gwen: let me ask you this, sam. you've been covering mitt romney a lot. he gave an interview to fox news and said if you're responding, you're losing. well, he was the one who gave five interviews to the networks to respond. >> he did that. he added two new washington

veterans to his communications team today. look, go back to new hampshire. right after iowa, after -- when we thought mitt romney had won the iowa caucuses newt gingrich laid out this blistering attack on bayne. -- on bain. and newt stopped doing it the pushback from the party. and in the general, bill clinton, cory booker, all those folks, they undercut the argument. and i feel like in boston, it was either naive or it was wishful thinking that hey, we weathered the bain attacks. they're done. gwen: they had weathered it in the primary season. they keep weathering it all over. >> exactly. and what we saw, especially today, is their eyes are wide open. and they're realizing fully and finally this is not going away. we got to deal with it. gwen: alexis, the republican nominee asked the president to apologize for all the bad things he said. ly to happen? >> unlikely to occur, yes. and in fact, president obama has been in some ways unusual in this early stage of -- as

michael is saying to make this so much his own campaign against mitt romney, to weigh in himself. and some of the members of his own party have suggested that surrogates would be better to take mitt romney on directly. because he is president of the united states. and in some ways, mitt romney was baiting him over that very same question. and then we saw this week the campaign has divided up the communications so that the white house has a traveling communications and the campaign now, entered a week in which they're trying to find a dividing lane between the campaigning and governing. very hard to see. and you can see -- gwen: impossible. >> impossible to see. and the president seems to be relishing it, actually. why? why, because they had a very bad economic number. as you saw. and they're scared. they were outraised. they're head to head in the polls. and they're worried. gwen: let me ask you about this, lori. one of the interesting things that happened on capitol hill in the wake of the president's announcement that he was going to roll back the tax cuts extension for people who are

middle class, under a quarter of a million dollars a year, expansive idea of middle class. but still, is that -- is that -- you wonder how much this meant anything. and you wrote a story this week about who actually is paying these taxes. >> yeah. it was interesting. in the midst of this campaign where the narrative is supposed to be about how obama is presenting us with job-killing tax cuts, the c.b.o. came out with a report that said effective tax rates have fallen to a 30-year low under obama, surprisingly. a lot of that was the economy. and people losing income and falling into a lower tax bracket. but people forget. the stem luss did in fact cut taxes -- the stimulus did in fact cut taxes. and what you saw happened on the bush tax cuts, it was really interesting. because in 2010, they didn't want to have this fight. they did not want to talk about raising taxes on the wealthy. even on the wealthy before the 2010 election. they were nervous about it. but this year, they seemed to feel like they got two thirds of the people -- two thirds of america say they want to see

the middle class tax cuts extended. people do not want to see tax cuts for the rich extended. and they have decided that they got a winning message and they're going to lean into it this time. gwen: there's another piece, i'll stay with you on this. because this also happened on capitol hill which is the health care piece of this. in which the members of congress cam up and said we're going to vote for the 31st, 33rd time to repeal all or part of the health carry law knowing it wasn't going anywhere. was that something that was considered realistic in any quarter of capitol hill? >> it is groundhog day. we're relitigating all these issues on the hill. and what's interesting is unlike 2010, when you had all of these town hall meetings, people screaming about the health care law, democrats kind of nervous about where they were on taxes, this time, the republicans who are a little uneasy. they voted unanimously, yes, in the house, to repeal health care. gwen: with five democrats. >> with five democrats. but you heard a lot more about, well, we really are going to replace it. and you had dan hayworth stand

up with leadership, i agree with the goals the democrats had here. gwen: and she is -- >> a republican member. house. and then meanwhile over in the senate, you're starting to see some republicans say look, we are really scared of these defense cuts coming in in january. and we're starting to talk to democrats about how we can maybe raise -- not raise taxes, but maybe raise revenues, close some loopholes. gwen: how do these arguments, how do they work into the narrative which these campaigners are trying to put out there right now? obviously there are arguments on capitol hill which are alien from what's happening on the campaign trail. but certainly they're using them as cudgels. >> unable to really talk about improvements in the economy. the president is saying as he said today in virginia, this campaign isn't about me. this isn't a referendum on me. this is a referendum on you. on us. on what we can do together. gwen: and us was an interesting -- >> he lnkd himself to the electorate and how you, we, the

middle class, and talked about his middle class, working class roots. how we fare in this environment with the changes i want to -- i have made and the changes i want to make. against a party that wants to undo those changes. that's really the core fight of this campaign. it's not about me. or another guy. it's about whether we move forward together in the great middle of the country. or not. and so what's happening on capitol hill, a bit of some background music. i wouldn't say a lot but some. and he plays on that -- as i said, with greater intensity in the last week than we have seen before. gwen: you watched mitt romney go to the end of the convention and didn't talk about foreign policy. he didn't really talk about taxes even that much. he talked about health care. knowing he was probably going to get booed by calling it obamacare and a very democratic crowd. who was he speaking to, sam? >> i think he was speaking to -- gwen: no one in that room. >> nobody in that room, no. he was speaking to swing voters in the philly suburbs and outside of cleveland. he was speaking to moderate

voters who need to see that he's making the effort, going through -- at least going through the motions of reaching out to a extentcy that would not support him. -- constituency that would not support him. the goal of going was to get applauded for going. and i think that's what he got for it. gwen: is that the same thing he gets for the incredible pushback today is that the goal of pushing back is to get credit for not being rolled over by the train -- by the obama train? >> i don't think so. i think -- i think a lot of republicans who have been antsy are going to say, finally. we're responding to this. but at the same time, it looks like a panic move. arranging these -- arranging these five interviews as hastily as they did. especially for somebody who's quite resistant to sitting down and doing interviews with anybody who's not fox news. i do think it smacks of second-guessing. i don't want to say panic. because it's july. but i do think there is some concern. and we are seeing it on full display. gwen: alexis, you said they're

trying very hard at the white house and now developed this bright line where every time jay carney, the press secretary is asked the question, you need to talk to the campaign. oh, yeah. maybe that works. but is that -- is there a grand strategy in the same way that romney is trying to speak to moderates and is obama trying to speak to a particular group of people who are trying to hear this new aggressiveness from him that michael talks about? >> well, threr there are two things. i was -- well, there are two things. i was on the bus trip from ohio through pennsylvania. and michael touched on this a little bit. it's the we, we're all together, i'm one of you and i'm telling you my story. we've had him as president for four years. and he's still telling us the story of his family and trying to relate to people. and bring them along. but he's also very much i think trying to blend the two things. the governs, i have a vision, we're going in this direction, the -- he talked this week about gee, the problem i had with -- as a colleague of sours, too much perspiration

and not enough inspiration. i want to inspire people more. but he's definitely trying to blend the two things. the governance, i have a vision, we're going forward, we have work still to do. and also this very venomous kind of campaigning that he's willing to do negative advertising, taking mitt romney down on who he is. gwen: let's take a look at some of that. if you're lucky or unlucky enough to win in one of the battleground states you're, inundated with campaign advertising. much of it negative. >> the choice on taxes, mitt romney's plan, a 25% tax cut for millionaires. tax breaks for oil companies and corporations that ship jobs overseas. but a tax hike for 18 million working families. >> when a president doesn't tell the truth, how can we trust him to lead? the obama outsourcing attacks, misleading, unfair, and untrue. there was no evidence that mitt romney shipped jobs overseas. candidate spame lied about hillary kline -- obama lied about hillary clinton.

>> shame on you, barack obama. gwen: a nice little twist to use hillary clinton's words from 2008 against her. michael, how crazy is this ard campaign right -- is this ad campaign right now? and unless you live in these 10 statse you never see it. >> just a couple of stats. if you live in columbus, ohio, or richmond, virginia, you're probably seeing 10 times the number of ads now in july that you saw at this time last year. you're seeing the number of ads you would have seen in september or october. of -- i'm sorry, of 2008. the other thing that's different about the ad campaigns is that they're spending more money in fewer places. than ever before. and something like half of president obama's -- correct me, ad campaign spending so far is in just three states. florida, ohio, and virginia. so it's very intensive. >> in ohio, he has spent at least $16 million so far in advertising. gwen: and is it st having any

effect -- and is it having any effect? is it moving the needle? there seems to be a lot of talk here, it's unclear that anybody is pulling away. >> this is a very fascinating question. and i'm going to kind of cop out of it. because -- here's why. because really smart people that i know are debating this very ener jetically while we sit here. and that's lots of ways to point at different kinds of polling connection to the advertising. focus grouping to the advertising. but then there's also a lot of smart people who are saying that there's just tons of money being spent and it's very hard to see that the needle is really being moved. so i'm not an expert at this. but i can tell you we're fascinated by it at real clear politics and watching it really closely. gwen: do you see the needle moving or does the campaign see needles moving, sam? >> i don't see needles moving. i don't know that there's anyplace for the needle to move. i think we're talking about such a small amount of people. that are basically going to serve as tie-breakers in this thing. >> the president's campaign talked about three million people. three million people.

that's all. gwen: what do you mean, three million people? >> three million people, they're the ones who are supposedly -- persuadeable. they can be moved. three million people in the battlegrounds. that's it. gwen: is there any trickle-down to congressional and senate races? i know there's a lot of apprehension on capitol hill watching this campaign in many ways because they don't have any control over it. and a lot is at stake for their lives as well. >> as goes the president and probably goes the senate and people are nervous about it. that said, democrats are feeling pretty good about the message that they're walking into this thing with. they like where they're at on taxes. they like sort of casting the republicans as the bad guys in this big fight that's coming at the end of the year. they like the fact that they won this big health care ruling in the supreme court. and not as many people hate that as used to. so they feel like things are sort of shifting their way a little bit. >> i was going to say one thing about the money that plays into the congressional races in a way that's a little unusual and unexpected this year, one of

the reasons president obama is spending so much money now is a lot of the money that he has raised is spendable now. most of the money that mitt romney is raising, and he's going to outraise -- outraise the democrats about 10% probably overall, but a lot of their money is only spendable in the fall. so the white house is seizing this moment to spend the money to -- when it can when romney cannot. but at the end of the race, the republicans are going to have more to spend as things now stand. and so that will back load -- >> the theory why we have seen mitt romney today, book back-to-back interviews. because partially because of the money. gwen: because it's free tv. >> free tv. gwen: i want to go back to something you said a moment ago, lori. you said at the end of the year there's going to be this collision. explain that, the fiscal cliff we're talking about. >> taxmageddon. it's so -- there's a very real not just hypothetical governing question that needs to be addressed in the campaign. and there's some hope and belief that the fall will be

focused and at least a little bit on how these guys are going to deal with this situation. because enormous questions of fiscal policy. are about to hit us. and what's going to happen is that the bush era tax cuts, which benefit all of us, are about to expire. it's approximately $2,200 tax increase next year. next year for everybody. the payroll tax cut will expire. that's a 2% cut that everybody is receiving right now. and there's a whole bunch of other tax stuff. but there's also $110 billion in immediate spending cuts next year. hatch to the pentagon, half to domestic -- half to the pentagon, half to domestic programs. roll it all together and if they don't do anything, the stalemate that persisted over the budget for last two years doesn't get resolved, you got a $600 billion hit to the economy that many economists believe will plunge us back into recession. gwen: i have to have a reality check there. what the president proposed this week, do anything to push

that cliff back? >> no. and that is what was interesting about their decision to try to -- well, it's two things. one, they said let's do this now. we can agree on the middle class tax cut. that's by far the biggest part. let's do that now and get it out of the way. that will resolve part of the problem. but what they're really doing was exactly the opposite. they were saying, look, we're not going to be the pushovers that we were in 2010 the last time the bush tax cuts expired. when we agreed to extend them all rather than get in a stalemate with republicans that would raise everyone's taxes. so they're drawing the line now. they're saying when we get to december, we are not going to cave like we did two years ago. gwen: i have another reality check question, this one for you, sam. as all these questions are raised about mitt romney's record at bain and all these questions are raised about whether he or the president outsourced more jobs, what is true and who is -- yeah. and who is more stained by the argument?

>> well, the romney campaign is hoping that the president will be stained by words coming from "washington post" fact checkers, words like false, most false. >> or pinocchio. >> a word we heard today. look, as usual, usually happens, the truth is somewhere in the middle. mitt romney left bain in 1999. documents show he was still listed as the owner and c.e.o. was he still handling day to day operations? probably not. he said he wasn't. you know, here's why this matters. a week ago today, june jobs numbers came out. showing a flat line recovery continuing. gwen: have we talked -- >> who is the real outsorcerer we've talked about and what about bain? gwen: as mitt romney said that the obama campaign is trying to change the subject, that's what they're trying to do. >> yes. and mitt romney was also trying to change the subject. so we're going to be doing this -- gwen: back and forth. >> back and forth. gwen: and another thing that seemed to come up this week, you heard david axelrod and

others talk about the secrecy of the obama campaign and that it was nixonian. and that seemed to be stirring up other shls. >> the extreme version of the obama take on romney is that he is a mysterious, heartless capitalist and mysterious is part of it and won't release his tax returns. and continues to be an issue that the romney campaign is not handling well since he had released them back to 1984 for john mccain. so how bad can they be? gwen: he said today he's only releasing two years and that's it. >> he's drawn a line in the stand today about that. he didn't make it easier. he made it harder, i think. so that's a line that the white house is pushing. because they want to advance the idea that he's not merely just another businessman. he's something beyond that. something unknowably bad. >> there is that swiss bank account. >> and there are the offshore accounts. gwen: in ber muda. -- in bermuda. next week the president goes on a string of domestic trips. and in a week and a half, mitt romney goes to -- on a foreign trip. and if you really want to

change the subject, you nominate a vice president, right? >> which they tried to do today. >> there you go. last night, we all checked the drudge report like we do -- everybody like me checks every seven minutes. but we see this item that i think just about everybody of any credibility in this town latched off. that condi rice was being -- kleiza rice was being -- conned leeza rice was being -- condaleeza rice -- if this continues to be the main topic of conversation for the coming days, then i think that they have to do something to change the narrative. i'm not sure they want to say here's our running mate and i'm leaving the country. you want to be here to tour with him. >> i think the first week of august, if they haven't done it by august 5, august 6 or august 7 i would be surprised. gwen: to have a little lead time -- >> to use the vice president -- to raise money. because after august, nobody can raise money. there's no time. so august is still last chance

to go scrounging for dollars. and they both will be doing a lot of that, too. >> and give the two teams time to -- they need a little adjustment time before the convention. gwen: joe biden is out there at the top of his game. i saw him jogging off the stage the other day at the end of the naacp convention and he seems to be perfectly fine. >> storytellings, the vice president, he usually tells five stories in one speech. and he's -- he's very engaging when he tells those stories. he is the middle class emblem that the obama campaign is happy to send out there. the happy warrior, attacking away. he's surprisingly for a guy who talks long, he also can boil it down into a short bumper sticker occasionally. gwen: i don't know that i've ever heard that. the battle lines have been drawn and i get the feeling we're going to see more by this time next week. thank you all very much for keeping track of it all for us. sadly, we have to leave you now. but our conversation continues.

our conversation continues online. this week in a different format. a "washington week" online town hall. with voters at rocky mountain pbs in denver, and at wisconsin public tell virgs in madison. east coasters can watch it t 9:00 p.m. for the rest of you it will be posted online as soon as we can get it there. you can find us at pbs.org/washingtonweek. keep up with this crazy campaign here with me every night on the pbs newshour and we'll see you around the table right here next week on "washington week." good night. >> funding for "washington

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