>> production assistance was provided by albritton communications and politico, reporting on the legislative, executive, and political arena. >> if you are going to walk to walk when it comes to fiscal deficits -- discipline, these kinds of cuts will be necessary. >> the battle over budget cuts. >> when we say we are going to cut spending, read my lips, we are going to cut spending. >> who is willing to tackle the tough stuff? >> you are going to have to raise the retirement age for social security.

oh, i just said it and i am still standing here. >> more unrest in the arab world. egypt's revolutionary fervor spreads to bahrain and elsewhere. in wisconsin, the governor takes on public unions. will other states follow suit? >> by workers of the city cop -- wisconsin did not deserve to be treated like this. >> and who we are and who we aspire to be. >> we honor george herbert walker bush for service to america that spanned nearly 70 years. captioned by the national captioning institute --www.ncicap.org-- tb>> "the washington post" editorial says the president's new budget kicked by hard choices down the road. "the new york times" says on paper the president's budget is encouraging.

"wall street journal" editorial says the president is lying in wait to ambush republicans when they propose several spending cuts. take your pick -- pick, colby, which is a? >> of 3. they are not contradictory. he is playing rope a dope. what is taking place in congress the side show. the big game is going to be the entitlement fight which will come later. >> charles? >> one of the most cynical budgets in modern memory. this is a president who told "the washington post" before his inaugural that we can no longer kick the can of entitlements down the road. he explodes spending for two years under the guise of emergency spending because of the recession. now the recession is over. what does he do? nothing on entitlements. >> nina? >> cynical? i think probably shrewd. whatever he proposes and -- in

terms of the entitlements would have exploded immediately. there has to be a big deal. there is a lot going on here between republican and congress and the president, but in the last analysis, that is what we are talking about. >> egypt? >> all the president, break the logjam. the state of the union it was profound power this -- i hope has a secret plan to lead is that he has not yet. >> the budget itself admits that it add $7 trillion in debt over the next decade. and his own secretary of treasury admitted in congress this week that it is not sustainable. he did not lead and it is a huge failing. >> colby? >> cowardice -- look, i think i

understand what he is doing. whether you like it or not. first ofll -- a shout out to speaker boehner for what he has done in the house. allowing this debate to take place. but these are the small items. but nonetheless, it is a preview of what we will see when we get down to the big issue of the entitlements. obama is right to -- on the continuing resolution. but then when we resolve that issue -- and i think we will resolve it in some way -- then you have to buy nature get to entitlements. >> you can have a debate -- >> they know it. they are starting to acknowledge it. >> the president said the republicans' cuts are too deep and it threatens a veto. >> let's use a scalpel. >> house speaker john boehner says if the president does not cut deeply, republicans will. >> for the last two years since the president has taken off as the federal government has

added 200,000 new federal jobs. and if some of those jobs are lost in it, so be it. we are broke. >> so what? >> they are fighting over this 12%. it the whole game is elsewhere. but like the two political parties -- both the republicans and democrats, while the rest of the country is saying we have a problem with the dead but the two political parties -- >> they are fretting about -- >> maybe they will get to it but they did not show -- >> they are writing about subsidies for poor people and heating in the northeast -- fighting about subsidies. about women, infants, and children subsidies so we don't have kids who are intellectually challenged. they are fretting about stupid stuff that is 12% of the budget. >> house republicans are literally stealing the food out

of the miles of babies. nutritional and pregnant women and their young children -- one of items on the cutting block -- so they can do >> let me explain what these cuts are, the so-called cuts. obama increase the baseline budget of all of the departments by an average of 24% in two years. if you add in stimulus, over 80%. the cuts are from this artificially inflated, hugely inflated, baseline he creates it. if you compare, for example, the home heating oil subsidy, it is cut in half -- that is the worst. a barbarian measure? if it is because it is 2009 -- it has been doubled. all that is happening is with the cut you are going back to pre-recession levels. the norm. >> that is the difficulty in talking about this issue.

right about that particular position. but there are other provisions in the debate where it does not apply. if you are going to zero out spending for the -- a small item. it has nothing to do with the baseline budget. or if you want to cut out money for enforcement at the sec. >> or you cut out enforcement -- >> those are important discussions. but they are not the only discussions. >> with all of the cuts, we are higher than we were in 2008 and in to thousand nine and i did not hear any of you complaining in both years about women and children going hungry. >> you heard new jersey gov. chris christie saying they were going to have to make changes in social security. also we are going to have do medicare, medaid, and other entitlements.

more than 60% of the budget. >> the 12% is sort of symbolism, all of the discretionary stuff. the real abdication was that the president, who brought in a deficit commission with a series of recommendations about, for example, social security, ignore all of them. and egypt -- evan is right, of the president does not leave it will not get done. he is. tibet -- demagogued whenever republicans propose at the time the country desperately has to have -- >> you agree with the "wall street journal" -- >> if there is any o oer explanation -- >> i am glad you can mind. what he would do. i do not know. >> the dangerous appearance -- you wind 2012 by taunting republicans to go after entitlements and then you say, my god, you are throwing granny and the snow and i will protect you and the unions and vote for

me. and then theoretically and the second term he finally stopped kicking the can down the road and deals with it. i think in order to deal with it, he has to make it a central issue of the 2012 election. he can't wait. unless there is a national referendum on stepping up to the stock it will not happen. >> let us look and what we have to deal with. it would have to deal with the problem of continuing resolution. you have to deal with the debt ceiling. and then larger question of entitlement. >> nobody has -- no president has run successfully the way that evan suggests. not as the art who said -- who promised a balanced budget -- not fdr -- >> walter mondale threatened to raise taxes. >> not reagan will promise that tax cuts and then, only then -- >> he did cut them.

>> then he increased them 11 times. >> a long history of political cowardice. i agree. obama is well in the mainstream of political cowardice. my take is that we manage to have gotten ourselves in a corner where the old formula just doesn't work. >> can i finish this? i do think that there is a deal that has to be had, and it probably has to be had before 2012. and if you look at the deficit, the debt numbers over the course of -- we always said, in the out years it will come back to haunt us. the out years are getting closer and closer and suddenly the interest on the debt becomes bigger than the debt. >> jack lew, director of the office of management and budget, says if we don't continue to invest in and you cajun and and the structure it will undermine the ability to generate -- don't continue to invest in education and infrastructure, it will undermine the ability to generate jobs.

>> i think it is true but it has nothing to do with entitlements. >> it cut entitlements, granite is in the snow. -- if you cut entitlements, grandma is in the snow. if you do not deal with this we will have a will haveevent, and it will -- spectacular economic event. people will say we will not buy your debt. it will got to 10%, 12%. that will trigger an event that will make throwing granma in the snow into nothing. 40% unemployment. a tremendous economic crash. and the only way to solve that is massive inflation and that will be even worse. somehow we have to get this scenario in front of the american people about what will happen if we do not deal with this. >> i see a consensus forming doing something with entitlements, the difficult subject. you are hearing it from republicans, you are hearing it

from democrats and it will have to happen. but what has to happen first is to resolve these or early questions about the, and the debt ceiling -- >> in "the washington post" there is a comment from congressman mcgovern from massachusetts and jones, a republican, if you have to cut the deficit -- afghanistan, one under 12 months, no end in sight. joseph stieglitz says iraq and a tennis fan will cost anywhere from 4-$6 trillion. >> iraq -- and of december, done. afghanistan has to be fought successfully or not -- on the basis if you want afghans -- afghanistan to become an al qaeda state. what is it, a billion dollars a month? even at $8 billion week,t is

trivial compared to the magnitude of the problem -- a billion a week. entitlements are half the budget. in 10 years, they will be 80% of the budget. the real news is this week republicans, house republicans, the rubicon. they announced this week after did lange that they are going to propose cuts in entitlements unilaterally in april and the budget. this is not going to be only about that 12% of discretionary. and the test will be, will obama demagogued? >> i think not. >> the fever of egypt is spreading throughout the middle east. >> the united states strongly opposes the use of violence and strongly supports reform. that move toward democratic institution building and economic openness. i called my counterpart in bylined this morning and directly conveyed our deep -- bahrain of this morning and directly conveyed our deep concern. >> the rebellion in is

spreading. in bahrain, the government can't -- banned public protest. people have been killed. doctors who have tried to help have been beaten. these are supposed to be good guys. modern, international banking center and home to the navy's fifth fleet -- believe. -- fifth fleet. >> right next to saudi arabia. >> autocratic kingdom. i spoke about speaker boehner about what he did -- i will say something about the bush administration, specifically secretary of state condoleezza rise to very early on, are demanding some very important speeches about bringing democracy to the middle east. people said, well, i am not sure it should be such a top priority. something is happening and i think it is growing out of this thrust that cannot of the bush

administration that the middle east needs to be democratized, that within those countries their young people willing to express themselves and be free, they have economic reform, and i think we're seeing the fruition. >> june 4, 2009, in cairo president obama made a speech to the muslim world. no matter where it takes hold, government for the people and by the people sets a single standard you must maintain your power through consent and not course -- coercion. >> earlier on in the same paragraph he says the united states does not want to impose its view of the world of politics as others and he cited iraq, meaning he was n happy with what happened in iraq and iraq is the one place where america at a very high cost to itself got a democracy. as soon as it got into office, what did the state department do? the money we allocated to help

e democrats in egypt was cut in half and the money going to civil society was going -- cut by 70% and the only people eligible were ngo's who were approved by the government. that was a very bad error on the part of the administration and now it is rewriting history. >> let me say something about the larger picture. in most of these countries, the majority of people are under 30, and the majority are under 20. there is huge unemployment. in some countries the highest unemployment percentage wise is among university graduates. so, there is a growing educated middle-class that can't find work, and that is just deadly. >> social media -- >> the factor here that you did not -- do not have been egypt that you have in bahrain and saudi arabia -- the split that you have between the sunnis that

are running things, and the shiites. you know what they call shiites saudi arabia? >> sand -- ooo. >> also became -- the monarchy in bahrain. >> one other slight problem. the united states has extremely close relations with the security services in these countries. that is where we get our intelligence in the war on terror and al qaeda. we get our intel did from their secret police and their intelligence. the very people who are keeping down the revolution are our buddies, pals, and friends, the people who help keep us safe. >> it is a terrible dilemma. bahrain is the worst because it is a sunni dictatorship and shiite majority. a small island, home of the fifth fleet and between saudi arabia and iran.

iran had -- iran claimed it just as iraq claims kuwait. if this succeeds, it would come -- could become a province of iran. it would be a tremendous security threat right in the middle of the gulf. >> doesn't it strike you as schizophrenic? it almost seems there is some sort of power struggle within the ruling body, within the palace, so to speak, of what is going on? >> in all of these areas, and natural awakening. but some, the only alternative to bad guys -- in egypt and tunisia, the alternative can be good guys. >> of the federal government can get away with deficits and the states can't. >> we are broke. we can't negotiate with something we do not have the ability to give on. >> gov. scott walker of wisconsin. this is madison, wiscoin. wisconsin. like all of our states it has a red ink problem and the new

republican government introduced the bill that would cut public union bargaining rights and benefits, including 90,000 statewide teachers' unions. in 1936, the american federation of state, county, an invisible employees was founded in wisconsin and in 1959 the state passed a comprehensive collective bargaining law. what is going on? >> this strikes me as the worst sort of power grab. i have sat at the bargaining table and helped with givebacks because there was not any money. >> which side were you on? >> i am working stiff. but having said that -- it is one thing to say you don't -- we don't have money and you will have to pay more and pensions d we have to lay off but another thing that we will not negotiate with the. been in ohio, john kasich is

talking about the same thing. >> don't you get misty eyed about collective bargaining? you know who is against collective -- who was against collective bargaining for public employees? franklin roosevelt. it is not like the private sector where you have management pushing back. not a fair fight. in the state, the union's controlling the legislature. it is not bargaining. they got what ever they wanted. >> one of the arguments against the government is if he had not given away tax breaks he would have had a surplus because wisconsin is not in as bad shape as illinois and the jersey and california. >> everybody understands that the pension and health benefits are not sustainable. and also they are unfair. all the governor is asking -- with this riots -- not riots, but the demonstrations are about -- is asking the public employee union to pay half of what the private sector people pay in contributing to health and

pensions. half. and what happens? the teaches in madison kansas school for three days to demonstrate and to drag students out to demonstrations. >> it is not actually true that it is half of what most of us >> half of what the average is in wisconsin. 6% as opposed to 12%. >> charles was right about the unfunded pension liabilities -- they are not sustainable. >> they happen because the public employee unions had incredible power and while no one was not looking and the press not paying attention, they stole the entire -- >> somebody came. c aved. >> the day of reckoning has come. we cannot continue. the district of columbia found itself in its own system with unfunded pension liability and had to give us rot -- give up some of their rights.

one way or another, somebody is going to have to lose. >> the other alternative it is if the state goes bankrupt. then, if it is equivalent to a private company, they can't read--- they can renegotiate the contract. it is trying to prevent a bankruptcy and do it preemptively. >> as the state ever gone bankrupt? >> no, it hasn't. >> that is why all of this is necessary because if it doesn't happen you will have it. and a big states like new york, new jersey, and illinois, michigan -- you would have to have a bankruptcy unless you get renegotiation of the liabilities. >> i am not arguing they are sustainable. only that you need to negotiate. >> you have bankruptcy. what is the next step? light gm -- like gm. line of the first and last creditors and pension obligations would be ccele

contracts would be canceled and you renegotiate under the aegis of a drug just like a private corporation. >> interesting. the nation's highest civilian honor went to 50 in the -- 15 individuals. >> parts teach their children what is meant by courage -- historic -- john lewis will come to mind. he knew the change could not wait for some other person or some other time. >> march 7, 1965, bloody sunday in selma, alabama, john lewis suffered a fractured skull and state troopers attacked him and 600 other civil rights smartest. john lewis, george a. doug -- george h. w. bush, my angelo, warned of the -- pick a favorite, charles. >> these are wonderful guys and women. lewis is a national hero. to me it is a little self indulgent -- indulgent. to me it is like the president and senior staff gets to hang a

medal around his childhood heroes. i guess as a president youet perks like air force one and this one. to me, it is a president who indulges himself in thanking people always liked. i did not begrudge it to john lewis. i did not want to be a -- to the party. >> you really think george h. w. bush was a childhood hero? >> he was a hero. >> he needs balance so he obviously has to have a republican. >> could you -- would you turn it down? no, i did not want them at all? >> my chance of being awarded the medal of freedom by barack obama -- it is not for posthumously. >> it reminds me -- america just

loves awards. the average fifth grader, has a trophy case. >> the wonderfully gifted and wonderfullyyo yo ma the medal of freedom? >> these are people who are accomplished in their field. these -- this is the nation's highest -- i like it when bush did it, reagan did it, when carter did it, when obama did it? >> every single one of these guys are fantastic and they deserve all the glory they get. it is just sort of redundant. >> it makes you recall what these individuals had done for the united states. >> what about angela merkel? >> these people are not plucked out of obscurity. >> he is a great ballplayer but he happens to be in the hall of fame. isn't it enough? >> no, not when the nation can recognize you.

you wouldn't want that, charles? i know you are a self-effacing die. >> i think to pick out one, to see john lewis get the medal of freedom and to realize what he represents for this country and how for the country has come -- >> if he were the only one -- >> did get the last word. do you get the last word. >> for a transcript of this broadcast -- log onto www.insidewashington.tv.