8.3% last month. >> americans want us to focus on jobs, not on raising taxes. >> you have to give the republicans credit. they are very clear about their agenda. >> there you go. look at this politico headline -- "congress takes a summer break as members try to run." economists believe that the country could go back into recession -- recession, i should say. increased taxes, huge cuts in military spending. defense contractors are nervous, talking about falling off a cliff in january. politico reported on friday that democrats and republicans are thinking about the unthinkable -- it may be preferable to allow the bush tax cuts to expire for the shock value, forcing concessions from both sides.

where are these people added, evan? >> over the cliff. i don't think they have it in them. it does not mean that the country will be thrown into recession right away. they will use the time in january, february, much to get some kind of deal . >> mark, 8.3% unemployment. what is the government going to do? >> 163,000 jobs. 100,000 had been predicted. the only place anybody is looking for help or action is the federal reserve. it is not the congress, because it is just loggerheads with congress. >> colby? >> you expect them to take the time off. they have to go back and campaign and get ready for election in november. that is not a disaster. they also plans to come back after the election to address

the problems they are kicking down the road right now before january. i don't think we will go off a cliff, because they know the consequences of that. >> businesses hate uncertainty, charles. >> uncertainty and terrible numbers, unemployment rising again. "the new york times" quoted the chief economist at credit suisse as a response to the unemployment as, saying, "this is the worst recovery ever." including the recovery in the great depression. if that does not scare you, you and not paying attention. i think we have compounded the problem, the gridlock in washington, and until election day, we will not know which way we are headed. the underlying economy is terribly weak. the recovery has stalled. this administration has zero ideas what to do about it. even if the fed acted, it is pushing on a string. interest rates are essentially

zero. where do you go where you are already at zero? >> they cannot even pass a farm bill, the most pork-laden thing. the idea that they will deal with defense cuts and taxes -- they are going over the cliff. the issue is how quickly they can come back. the bad news does not start right away. it takes some time for the effects of these health. you have two, three months in the winter to solve the problem. >> the congressional budget office projects that if congress does not come up with the could fall grou -- 2.5% next year. a tepid 2% this year. >> that suggests that they don't do anything for months. >> that is my point, that they are going to avoid going over

the cliff. the smart money is that they will come back after the election. >> wait a minute, there is the outline of the six-month agreement to extend this so that we avoided. majorityblunt -- the of both party leaderships voted for this sequestering with the automatic cuts. neither party gets a partisan advantage. i don't think there is any question that what we're looking at is an election that is going to determine where we are headed in this country. if the tax cuts do expire, that enables republicans to vote for a tax increase without, in fact, alienating grover norquist and the pledge. >> let's go back to the economy

very quickly. on this 8.3% unemployment, this is not surprising. it also reflects things thathat were happening in the labor market. all the positive side, job growth is very significant, and economists say i.t. is a sign of something good that is happening. >> but it is only a rate of job increase, 163,000, which is less than the rate that you need to get a decrease in unemployment. you need about 250,000. the real problem is not about the fluctuations in hiring, firing month to month. it is the fact that you have 1.5% growth of gdp, most anemic, and you cannot possibly have a decrease in unemployment. the economy is stuck. chopped liver.t

charles, cheer up. eventually things will get back again. >> mitt romney on the road. >> what about your gaffes? >> show some respect. >> we have not had another chance to ask a question. >> kiss my [bleep] this is a holy site. >> that is one day to deal with -- way to deal with the press. romney was endorsed by lech walesa, but a dustup between rick gorka and reporters on the trip cock the headlines. he anchored palestinians by saying that culture makes all the difference in that part of the world heard last week, we talked about his problems in london. but charles, on a scale of one to 10, i read your column -- how

did that could go? >> there was the unforced error with the thing on the olympics, but he did it well in israel, and this idea that he made a gaffe with the idea of the difference between the palestinians and israel was culture -- the man at a spread that was the man who spread the blood level of the geneva massacre, which never happened and still lives in infamy. he is not to send a great source. second, what romney said about culture is a direct echo of what was in the un human development report written by arab scholars, published in the un, which is said that culture is the soul of development. nothing new, not a gaffe. the press just ate it up. >> michael kinsley said long ago that a gaffe is what a

politician tells the truth. it is obviously cultural problems with palestinians. obviously, london had problems with the olympics did the public sees it that way did this is a confected think that the press gets excited about, but i don't think voters give a damn. >> want to attend, mark? -- one to 10, mark? >> 4, and that is from talking theonny's people, who said thing was a disaster. he had children adelson on an ego -- sheldon adel sent on an ego trip with him there he never mentioned the peace process. you always hear trellis approvingly quoting -- charles approve beagley quoting a u.n. document. the palestinians are among the

best educated and most entrepreneurial of the people in the entire region. mitt romney -- the reason the press is upset is the entire trip, he had taken three questions from the press. barack obama, already when he made the trip in 2000, at a press conference every place he went. >> the press hates to be ignored, colby. >> we deserve attention, and when we don't get it, we complain about it. i am not going to grade his trip. he went to israel and said that jerusalem should be the capital. it is a question that the u.s. has always hedged on. the use of the word "culture" -- it is good to have people after the fact revise his remarks to say what he meant by it, but the word is loaded. it is a loaded term.

i have heard it before to explain differences between african-americans and whites. stycan have some very na applications. let me finish, please. that is not what the romney apologists say he meant. what did he mean at the time he said it? i don't know. it can be a loaded term and some people took it that way. >> the worst part for romney was having sheldon adelson at his side, a huge donor buying all of these ads. that is unseemly. >> when romney talk about culture, he was not ambiguous. he cited a book by economic historian at harvard who wrote a book called "the wealth of nations" in which she talked about culture as the ultimate element. the reason i quoted the u.n. document is that is the last

place you would have expected a discussion -- a big report chiding the arabs for the corruption and the lack of women's rights as the ultimate -- >> romney also cited a book by dan senor -- he denied site culture as the recent he cited conscription and immigration. by doing those things, israel gained the advantage. >> what about the tax cuts? the brookings tax policy center said it they would increase government revenue and put the burden on middle and lower classes. >> here is a totally bogus issue. obama is attacking romney for being for tax reform. if you are going to lower tax rates, you have to close loopholes. if you close loopholes, obviously, taxes are going to go

on other people. for obama to turn around and make this an attack on romney for raising taxes on the middle class is outrageous. >> obama is quoting the brookings report, which is a respected organization, the tax policy center, which was praised and allowed by mitt romney as recently as last fall. -mitt romney has pledged for general tax reform, ok? everybody is for general tax reform, but against specific closing of tax loopholes. he has pledged a further to lower taxes on the richest people in the country -- the top 5%, and keep capital gains and dividends taxes on unearned and, lower where will you get the money if you cut all the preparations and programs? that is the question, where is it going to come from. >> but mark, obama is at least

notionally for tax reform, and it seems to be a cheap shot to be saying, oh, look at romney, he is raising taxes on the middle class. romney is saying that if you lower tax rates in the hope, of course you have to close loopholes, and it is going to raise taxes -- stop the presses, folks, it is going to raise taxes on everybody. >> romney did not state we would do something a little bit. he promised to raise marginal tax rates by 20%. all the while, not a warrant -- not affecting revenue at all. what is going to happen? >> every economist who has looked at this -- lower tax rates in the obit close loopholes -- >> he does not say -- >> the romney campaign says that the brookings study is just a liberal study.

>> missing the point here. it just shows you the low level to which this has sunk. the one thing that would help the economy right now, what would give the economy a boost, is if politicians did a real tax reform, which would allow them to lower the rates. i still think the rates ought to be high on which people. but they could come down for just about everybody else if you did a genuine tax reform. the economy with a loved it. instead, what does the president of the united states do? he attacks his opponent for busily being in favor of tax reform. that is what he is referring to g middle-class and at the lower class having to pay a little bit more -- >> mortgage interest deduction and a deduction you get for health care if your employer gives it to you. that is where the money is treat each is about a quarter of a trillion a year. canada's is not have the mortgage interest deduction.

what all he is proposing is that if you begin to do this, like 1986, one of the great successes of our -- a for tax reform, ronald reagan and tip o'neill. , it would allow you to lower rates and boost the economy. everybody knows that. >> if you took away the mortgage interest rate deduction, what happens to struggling -- >> you could do it slowly. there are ways to do that. the one thing that would really give the economy a boost and help our country turnaround -- if you do tax reform, its political corruption, because you are going after special interests. it gives people faith in washington that they can stand up to these interest groups and lobbyists. it does not give one group a disadvantage in one group an advantage. and it gives the economy a boost because of the clarity and simplicity and everybody understands it. lower tax rates for most people. win-win deal, and yet nobody

talks about it during this election. >> we are talking about it. >> we are talking about it, dammit! how much more can you lower rates for mitt romney? we are talking about a tax scandal of rich people -- >> but that is because of all the deductions and loopholes. blunt, 1986 -- one thing to say about ronald reagan , they were o'neill instrumental, but bob packwood and danny rostenkowski -- >> added them to the list. >> since then, we have done nothing to the tax code but put in credits for the socially worthy, whether it is insulation, giving to diabetes, what ever else -- >> nascar, all sorts of stuff.

>> we have a member who has a history in the banking industry. >> don't reminded me. that excludes him from the discussion. >> i want to say one thing about the tax policy, because we hear this as a liberal organization -- >> that is what the romney campaign says. >> they have an adviser to president george h.w. bush. this is not some liberal organization, not a profession obama establishment. it was done for the brookings institution. the analysis of the romney tax plan just as not at all. mathematically, it does not work. you may not like it -- >> obama is attacking the only good part of it!

>> you say to get rid of the loopholes, but he does not say which loopholes -- >> does not say anything. >> do you believe that marriage should between a man and woman to enjoy a nice piece of fried chicken? >> i am supporting mr. cathy's biblical views, and i guess not necessarily his views, and it is god's views. >> it was the first chick-fil-a appreciation day. mike huckabee started it, and thousands showed up in support of the president's position on same-sex marriage. democrats are putting gay marriage in their platform. what idoes chick-fil-a appreciation day tell you about the state of our political conversation, evan? >> how silly we can get,

obviously, but it does touch upon something that is deep in america. you may have moral values, but people perceive that people are telling them how to live their life, they resent it. they lashed back at it. i support gay marriage, but i can understand why people feel that if washington or the elite are telling them how to live, they are going to resent that. >> like when a big city mayors say that we don't want chick- fil-a in their city, that people would resent that? >> a movement led by the mayor of boston and picked up by mr. emanuel, the mayor of chicago -- >> san francisco. the mayor of the district of columbia -- "hate chicken." >> it is one thing to see consumers boycott an institution that they bialek, but to see the officially sanctioned -- they don't like it, but to see the officially sanctioned a boycott is different.

the last one i saw was -- what was the fellow's name who owned a domino's pizza? not tom donahue. oh, shoot. he was active in the pro-life movement and there was a boycott of that company. >> bigger question -- what about the marriage platform -- plank in the democratic platform? is that a good idea? where are the gay voters going to go? >> that is the decision of the president and vice president. the other question -- i go out to get something from the store. i don particularly care about the owner's views on things like the affordable health care act or drilling in the arctic i just want to go to starbucks and get a cup of coffee. if i hear that the honor has a different view, i don't go there

anymore? i understand that the pain is caused people who believe in some six marriage and having the honor of -- owner of chick-fil- a saying what he said, but going after individuals because of their views -- all you want to do is get a chicken sandwich. >> we had one who said i don't agree with him at all on the marriage, but i like the chicken. >> the neglected the victims here are the fried chicken. what is so hypocritical here is that all of a sudden, it has become the crime of the century, sort of thought time of the century, and a demonstration of bigotry if you oppose gay marriage. six months ago, barack obama opposed gay marriage. does that mean he was a bigot until three months ago? when rahm emanuel, the mayor of chicago, who says he i -- it is

against chicago values if you are against gay marriage -- was the chief of staff for barack obama when he opposed gay marriage. ridiculous and incredibly hypocritical. >> where is the best of the winston churchill that sat in the oval office when george bush was present? if you checked the white house blog, you would see dan pfeifer's apology to charles krauthammer on the churchill bust. is this your first apology from the white house? >> first in the history of the world, unless you are a rogue state. i wrote something in act was last week that the bust of churchill was removed from the white house when obama came in office. on the white house website appears an attack by dan pfeiffer is saying that i am battling because rumors, and vehemently calling me a liar. i call to the british embassy,

and he says i am and liar because it is in the white house and the residents -- i call to the british embassy and they say that i was right, it is in the residence of the british ambassador, and the one on the blog in a photograph to convince people i'm a liar is something that had been in the white house for 50 years, a gift to lyndon johnson. >> what do you think of that? >> i just think that dan pfeiffer is one of the rare people in washington who is capable public apology. i want to know what happened to the lincoln bus at 10 downing. >> what does this tell you about the organization at the white house? >> it shows you the rapid response -- we got to slam them right away. >> evan is absolutely right. >> i have a bust of charles in

my office and nobody is getting bad. >> oh, you guys. >> last word. see you next week. >> "inside washington" is brought you in part by the american federation of government employees, proud to make america work. for more information about afge and membership, visit afge.org.

from washington the mclaughlin group, the american original, for over three decades the by a

using our energy resources, making trade work for us, getting kids the skills they need for the jobs of today and tomorrow. making sure we balance our budget and helping small business. we do those five things, you are going to see america come roaring back. we are going to do it. >> that was mitt romney's five point plan to create jobs. governor romney says he will create 11.5 million new jobs if he is elected president. but president obama says governor romney's stance on extehelp create jobs. >> they have tried to tell us this trickle down tax cut fairy dust before. it didn't rk then. it will not work now. >> on friday the economic numbers for july were released. unemployment rose to 8.3% from 8.2% with 163,000 new jobs added. question, so whose plan will create more