statistical dead heat with rick santorum, according to a cbs new york times poll, santorum leads romney by 14 points from last month. the surge is on. matt lewis, when do we stop having a case of whiplash. >> i think michigan, michigan is a problem for mitt romney because of the expectations, everyone thinks he will win there because his dad was governor, but his dad was governor 43 years ago. and mitt rom in any won in '08 but it's a different situation, that is real trouble, he will go negative and spend millions dollars and he still may not win. >> he won last time because he was the alternative to john mccain and they were looking for that, but that is not had his identity this cycle. i just got off the phone with the romney adviser and they were detailing how they were going to

pound santorum over the next couple of weeks. >> romney is a extremist and it has led to kind of a not only the enthusiasm gap that we talk about but an authentor -- auth. do i believe romney will be the candidate because he is the vessel for all the money and all the interests, but he is losing quickly the support he will need among independents. >> i agree with you about the authentic point, i appear surprised about the rise of santorum, he has an integrated personality. >> also known as humanity. >> that is a value, and that is why people like him. >> romney has an article in the news. i'm a son of detroit, cars got in my bones early, the president

tells us without his intervention, things would be worse in detroit, but i think without his intervention, it would be better. you can kiss the american auto industry goodbye i love cars. i was born in detroit, the son of an auto chief executive. you remember this stuff? >> i'm from the midwest, i grew up in the shadow of this, and the fact that the companies got bail outs is the reason they are selling again. we did a big cover on that fact, i think the logic is all wrong. >> it's not just 2008, there was a terrific piece in the washington post this weekend by packer and pearson contrasting mitt romney and his father. and you saw there the path of a republican party that has moved from having moderate understanding of the need if for a role of government and manufacturing and true job creation to someone like mitt romney who in some ways has moved so far, the party has

moved so far from the moderate republic republican ism >> let's keep in mind george romney palled around with sal, linsky >> romney is talking about being a son of detroit, and a story, part of his bio is that he almost died in a car accident in france. in a car collision. and reportedly he would not go near cars or was afraid of cars for a while. i think that the conservative direction of the republican party is pro growth and healthy but i do not think that romney believes it. i think he is a george romney who is pretending to be ronald rapi reagan and it does not work.

>> are these independent voters going to be convinced that he is a extremist, when others say don't buy it? there's a sense in which this primary is positioning him to the center than santorum. >> i do not think it's been extremes of course if you are an independent voter you do not know what he believes. there's no sense of who he is. i say it every day. santorum, if you take him off the campaign trail would say the same stuff in a town hall or wherever he was. >> by the way, if he becomes the nominee, the likely nominee of course you will see people come of after him and call him a right wing extremist and you know, a horrible social conservative of. but he has that blue collar message that really appeals and by the way he has a tax plan which would basically bring the tax rate for american manufacturers to zero, that could play well in michigan. i do not think he has played it up enough. frankly, i do not think it's a

free market plan, it's sort of picking winners and losers, but politically it seems like a smart move. >> but the party seems, the republican party, seems intent on refighting the culture wars at a time when the country demands more attention to the jobs and economy. rick santorum on women's issues is so far out of the conservative mainstream. i know, it's shifted, you are talking about a man who would refuse to allow his daughter or my daughter to have abortion and fighting about contraception. >> i would not say that republicans chose to talk about social issues, it was hoisted upon us -- >> i think there's no doubt that the party is taking up the debate with zeal >> there's a lot of democrats that do not like in the position of being aligned. they are catholics and they do not like to be aligned against the bishops.

who do not -- >> there are more women than bishops in this country at last check. >> and the debate is changing from whether region religious employers to whether any private employers need to supply that coverage. that is more extreme >> that is the thing from the debate, santorum, this will resurface in october if he is the candidate. >> the gummy bear in the room that we are not talking approximate abo -- talking about, newt gingrich, he is doing fundraising, valentines day with newt, $500 breakfast at a country club and a $2500 evening at a private home in fresno, there's champagne involved. >> for 25,000 you get an open marriage with newt gingrich. valentines day, he should lay low and stay out-of-sight. >> newt, the tiffanys gifts will

be off the hook. tiffanys and this is the time to be married to newt gingrich. all three wives could say that, this is the day you want to be married to newt. >> the pile on. >> i saw a caption, maybe i was thinking of the national review who was calling for him to step aside. i thought i saw a caption saying he was leaving. >> the national review said it would be a grave mistake for the party to make someone with such poor judgment and popularity the nominee. it's time for newt to exit. >> this is a guy that has been written off, i've been declared dead once and i can rise dpen. that sprexperience is telling h never get out. >> three months ago they attacked newt gingrich and said, i forget what the official title was but to website it was titled against newt and it bashed him.

so now to call for him to get out of the race and ensantorum, had they been supportive of newt when they had a chance, now, i would take it more serious. >> at the end of the day, adelson and superer pac money may be a disservice. >> i do not think that -- coming up the $40 pitch president obama is making to extend the payroll tax cut. house gop leaders have made one concessi concession, could the winds of change be coming to capitol hill? we will ask emanuel cleaver when he joins us live next on "now." nyquil: you know i relieve coughs, sneezing, fevers?

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congress needs to extend

that tax cut along with vital insurance life lines for folks who have lost their jobs during this recession and they need to do it now without drama and without delay. >> president obama just finished speaking in front of a group americans that may feel the pinch if the tax cut is not extended. republicans say they will agree to extend the tax cut without paying for it but they will not approve medicare payments for doctors extension and the unemployment benefits extension. representative cleaver, thanks for being with us. sounds like ball play is happening on capitol hill, what is going to happen to unemployment insurance and payment for doctors that see medicare payments? >> let me take the last question

first, we have not paid physicians adequately in the first place and we have this fix that we have to do every year. we are going to discourage physicians from wanting to continue to provide care for medicare patients. and so, we are then hurting the program that we are at least trying to publically say we are supporting much we have to take care of the the doc fix and we have to take care of making physicians somewhat satisfied with what we pay them. and number two, we have terrible, terrible, unemployment numbers, things have gotten better, we have had 23 straight months of adding jobs but there are hard working good americans that cannot get jobs and what we are saying is we don't care if we do not extend the unemployment benefits. it's doing damage to americans and the politics. >> are you bullish or bearish on the extension of unemployment

benef benefits? >> we have to extend it, it's very important to do it, or we are sending a negative signal to those that are unemployed. more important, it means that there's money that won't be used to increase spending in an economy that is weak. those individual who is get those c checks, they will spend it, they will not invest it in some kind of market. they are going to spend that money. >> they are not putting it in off shore accounts, as it were were? >> they will not do it. >> i want to open it up to the panel a bit. majority leader eric cantor saying yesterday, he is not seeing the willingness on the other side to compromise, which is pretty amazing when you talk about what this republican congress has done. but i'll say, i think it's surprising to some or perhaps this represents a pivot in gop strategy the fact that they are willing to pay ball on extending

the payroll tax cuts. >> if you want to extend the tax cuts why not pay for it? >> i'm not sure how much of it is a shift in gop strategy or a party that has it's finger in the wind and understand what it should have for the many past your is that americans care more about jobs and the economy than this drum beat of the danger of short-term deficits. the president responding, what a difference a year makes, this budget the president has come out with is a responsible populist budget, it's not leading with austerity, that is right. you can take lessons from europe fr there >> the congress does not have the answer s -- the answers to the solutions of the day.

>> this budget is a set up, and that is what eric cantor is reacting to, every budget that has proposed was a populist pitch. >> regarding the budget, you said yesterday, the president's budget is a nervous break down on paper. what do you -- >> no. >> we cannot recklessly eliminate vital programs like job training, education and health care for millions of hard working american families, as we look at sort of mandatory spend, the lion's share of the stuff and budget is spent on entitlement programs without tackling that those programs are going to continue to be cut. so how do you preserve those programs without taking on social security, medicare, medicaid? >> first of all, i was talking about the ryan budget. i said it was a nervous break

down about five months ago and it still is, and i talk -- i talked about those that want to cut those programs. the president's budget is a budget that the american people can get behind. to the other issue of the entitlements. look, i'm realistic and i think many of us are, we have to compromise and i'm willing to compromise on social security and medicare, i think if we can do it without cutting the benefits you'll find that democrats will come on board. if we can tweak it and do things to it so that people that paid in social security, all of their lives, will still get that check and those that are in need of medical help can still get it. and there are things we can do. but we cannot mean spiritedly go into this budget and just slash and cut and burn. these are human beings that we have to deal with. the president recognizes it and that is why this budget could be called a come passionate budget. >> it is, at the end of the

ten-year budget window, taxes will have gone up 1.6 trillion dollars our debt burden would have gone up. it raises taxes and i know creases the debt, it's unab unbelievable and this is, what is the term? >> a train wreck or whatever. >> ezra klein called it cruel and violent. no, this country, over the long-term, if we grow, if we have a strong recovery, which requires investments, and fair and impartial share kind of economics and politics, you know, we talk about entitlements, these are not entitlements, social security and medicare, these are rights that americans have worked hard to pay into. a social security -- >> it raises taxes and the debt. >> you know what? here is the trick, unneunfairne romney's plan increases taxes on

low and middle class people. if we let the bush tax cuts expire and return to clinton era rates, we will have trillions to deal with the deficit. >> the budget conversation is not one that is away any time soon, we will have more on that after the break and we will address the grows disparity between the rich and poor and that it's exposing a divide in education. that is next on "now."

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until the end of the quarter to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement. according to the census bureau, 49% of americans live in households where someone is receiving gocht benefits the issue of income equality and the role it should play has been an

issue. we have congressman emanual cleaver live. we are talking about the issue of income inequality. the social safety net, there's a poll that i want to draw your attention to that says which concerns you more, this asks the american public, the government taxing too much or federal programs that do not provide enough of a safety net for those that need to get by. overwhelmingly people are concerned about taxes. the sample found that the majority of americans do not want to cut medicare, medicaid and social security and others. this seems to be a problem for the american public to decide what is a priority for them? >> it's a struggle and the polls reflect it that people are going lew the internal struggles of saying of we want to help those that need help. we would like to do so without a

dramatic increase in bactaxes t is why they must be allowed to expire, the bush tax cuts expire, it will reduce the deficit by 75%. they are saying to us, you know, figure out a way to help those folks without raising our taxes. so the president is saying we will not raise taxes on anybody earning $250,000 or less. if we can figure out a way to help the american public, this can be solved. the only way we will bleed is if we do so from self inflict ared wounds. >> can we get out of the sand pit? >> we have to. here is a couple facts that are important to remember. inequality causes financial instability. it makes your economy grow more slowly. i mean this is something that we

have to all care about. >> and i think that part of the american dream, however shredded it has been, has been upward mobility and we are seeing that to decline. with all the republican attacks on europe, you still have higher levels of mobility in europe. but in terms of the safety net. what struck me in this new york times article last sunday which was powerful about the geographic of safety benefits was critics, even critics of benefits rely on it. and the fact that states with the most anti-government state officials are receiving more safety benefits. there's something very powerful in the la30 years of government with bashing. look how the government handled the bank bail outs, it's not working in some cases but at a time when businesses nor consumers are investing or

spending, government is critical to the recovery. >> my criticism is of president obama, and i've complimented him in other areas. in this regard, it's a huge missed opportunity. i think we need fundamental tax reform and get rid of loopholes and deductions, we do not need to raise tax on job creators but he should have embraced the simpson plan, there are big things he needs to do and he needs to take leadership on and he has completely just dumped the responsibilitity for fixing the fundamental problems in the economy. >> you see people that want fewer taxes and more entitlements, so it's an opportunity for both sides. it could tilt either way. >> something we agree on, means testing. rich people should not get social security checks or medicare. >> i think you lift the payroll cap on social security, it needs to be a universal program, but

the wealthy should be paying more into it. >> why should rich people get checks from social security and medicare? they could afford to pay for it themselves. >> and they can afford to pay for their taxes and you know, again, if you look at history, taxes were much higher both on individuals and corporations in the '50s and '60s and it did not stop investment. >> we had a great economy in the 1970s. >> congressman cleaver i'm sorry we could not get to you more. we will be looking for more ball playing from you guys on capitol hill. >> you cannot make honey and sting at the same time. >> that is a good note to end on. thank you for your thoughts as always and thank you for your time. coming up. battle of the budget bulge, there appears to be bipartisan consent that the proposal is not going to go anywhere, we will

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bobby? bobby! what are you doing, man? i'm speed dating! [ male announcer ] get investing advice for your family at e-trade. our fortune group and that is how our great empire grew again with. >> in terms of dealing with china we need to find a way to raise the pain level for china cheating. >> we welcome a rising peaceful china. it's important for them to play by the rules of the road. >> your economy get very weak, ours get very good. we take your jobs. >> i will crack down on cheaters like china that steal our intellectual property and our jobs and manipulate our

currency. >> you are looking at the white house where the vice president of china is meeting with secretary clinton and vice president biden. we have the spokes man for the state department. pj thank you for joining us. >> thank you. >> that was a collections of recent anti-china ads, to what degree do you think that china is paying to our internal battle over our relationship with china? >> they have enough experience with us to understand that every presidential campaign, you know, since at least the early '90s, china has been a convenient, you know, whipping horse, you know, as part of the rhetoric from whoever is challenging. but nonetheless, you know from richard nixon on, bill clinton, george w. bush, barack obama have all done a extraordinary amount of first hand business

with the chinese, because it's argue ably the most consequential relationship we have. >> we see the ron paul ads and the rhetoric out of mitt romney who is taking a sharp position to issue. it seems to be more heated than it has been. the pete hoekstra add was past ph phobia, if not full on racism. it seems to have gotten worse. it is more of a, pointed than it has been in the last eight years. >> i agree with that. it's an easy target. look, it's a good way to score points on the campaign trail what most americans do not understand is that china is having their version of an election of year. they are having a big power change this year, and there's dissent, or signs of it within

the communist party ranks. they have to stand up and say, and talk about if there's comments like the mitt romney comment. >> to pick up on that good point, it's not only this election they will face, but what is happening inside china and we only see the tip of it, is there are thousands of strikes, each year, growing in intensity. workers demanding higher wages as they see the growth in china. that and, and i understand labor in the country, why they feel it's a unlevel playing field with china subsidizing its exports, but that striking in china will effect a lift of the wages in the country more than the bashing. you know, there's also the possibility of what we have seen around the world with protests. there was a tibetan woman who self emmolated herself in china, you are seeing protest, with the

use of social media, however censored it is. >> tibete has been a problem for china and apple suppliers in china are going to be investigate the conditions of the factories where our devices are a assembled. america's involvement in the human rights equation, how much does this sort of make it worse existing tension with the chinese? >> the chinese have big chica challenges they are facing. they are facing an increasing gap between the rich and poor, and have a rising middle class that are making greater demands than ever on their government, their government is fighting corruption to a significant

degree at the local levels. their country will grow old before it grows prosperous and on top of this you have a collective leadership that is trying to manage the pace of change while recognizing that china does have to change. but there are very deep seeded and insecurities there, china has cracked down on disdents as it watches the awakening in the arab world and does not want to see an awakening there at home. there are great tensions there and they infiltrate themselves into this relationship and we have our own challenges and insecuritied and it all gets mixed up and displayed in the broader thing between the united states and china. >> pj, it's ben smith. i think there's going to be pressure on obama this year from mitt romney to confront china, if he is the nominee, is there a right way to do that are there

the appropriate opportunities to do that right now? >> two ways to look at it. yes, the united states and both in in administration and previous ones have had very honest direct conversations with china, particularly on economic fronts. time geithner has made a number of trips this talking about china. what it has to do relative to its currency. by the same token, china is now a rising power, it's a force in the united nations. when you look at a situation like syria, you have to do business with china, because china and russia have blocked intervention with respect to syria and when you think about t environment, chain a has to be a part of the solution. there's a balance of being forceful with china when you need to but normally as most leaders have come to discovery, while you have, you know, direct conversations publically you do a lot more effectively with

china quietly than confronting them publically. >> on that note, pj, when we look at the syria question and certainly china and russia's record is joint vetoes, whether it's obstruction on sudan or burma, i was surprised they came out on syria this way they did. do you think this is beginning to make a difference as the chinese look to their foreign policy? >> kmien a was was happy to have russia -- china was happy to have russia as the leading horse on this issue. one of the pill ars as they rise in the world, they do not want to set a precedent that the international community gets to set and then enforce outside conditions or norms on them.

you know, whether it's taiwan or struggles inside china itself. they have as a central pillar of their thinking that we are dealing with our problems our way. >> in terms of china i think the president deserves praise, if you look at this, the pivot that they made, the pacific pivot with secretary panetta and barack obama, president obama in terms of sending troops, and maybe to the philippines, sending them to guam, trying to sort of keep china from controlling the south china sea, pj, do you think that conservatives or what might be considered hawks, are they selling president obama short in terms of what he is doing to kind of keep chinese -- >> in its place? >> their ambitions at bay? >> i don't think it's a

bipartisan problem. president obama has picked up the relationship and in his second term if there's one, he will develop the relationship with the next president. i think a lot of fascination with the visit this week, you know it reminds me of visits with the soviet leaders of 25, 30 years ago and the idea that margaret thatcher said, you have to establish that these are leaders that can do business with each other t nature of the relationship today, dictates that these leaders have to have a measure of trust in their dialog and relationship and find ways to do business. we have done that. president obama had a, you know has worked with china and the fact that while there's a problem on syria, there are fewer problems with respect to to iran. china did not veto a resolution a couple years ago that established very significant sanctions on iran.

so it is something that kind of worked through issue, by issue. >> pj, i think that there's a question here. >> i want to draw you out a bit, something that interests me a lot is the geo politics and enter play between the u.s. u. china. china bought up every spare drop of oil and will be a bigger importer for the region, what will that mean for israel and for the middle east. >> well, actually it's very interesting, that below the surface when we were working with various nations in the region, and china, on the issue of what to do about iran. some of those very exporters of oil to china who had increased leverage, said hey look, we will sell you, you now have to understand our interests and

meet those interests. just as we have had relationships with exporting countries like saudi arabia and seen the relationship rise and fall, now saud -- now saudi ara thats leverage to say to china, look you have to cooperate with us on iran, they are next door to us, it is transforming china's relationship with countries in the middle east and that is not bad. >> pj, thanks for your time. we will be looking more toward as relationship and the growing relationship potentially between the president and the president of china. a different chinese leader than previously. thanks for your time we hope to entice you to come back on sometime soon. stay with us, we will have more on budgets and break downs and foreign policy, 2012, and valentine's day. after the break. are you still sleeping?

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last month the president said he wanted an economy that is built to last. what he has given us instead is a blue print for defer sicits t are built to last. >> this is a tax and spend budget, not a tax to reduce the debt budget. >> government and health care spending does not address it in a meaningful serious way. >> well, that was some of the republican reaction to president obama's budget, is it a good week or bad week for the president? >> it's a pretty good week for the president, he has resigned or embraced traditional capitol hill trench warfare and daring the republicans to veto them. you saw the republicans recalibrate and say they do not want this war right now. >> a kubookie dance.

>> it's a bad budget but it's a good political message. i mean, president obama has decided this re-election will be about income inequality and that is his positioning. it does not solve the debtor deficit or fix the economy, but it's on message. >> budgets are more than numbers. budgets are about values, they are moral documents in ways. but the president in the last few months has staked his bid on, not just income inequality but this idea of fairness and i think that is a theme that is running through. >> when you look at the trend lines, there's a stanford study that shows the income back has been shown to have grown, and it's not about race, it's about the income. >> the president sends his kids

to private schools in washington, d.c. -- >> as a graduate of the d.c. public school system. >> he has zeroed out the money for those that want to go to private schools. >> here is what we have to focus on. investment in early education. investment in education and community colleges and then investment in good jobs. and >> why not also help kids get out of failing schools that are under privileged. >> as a right winger you are being unfair, race to the top has been like the most brilliant union busting program in american history. because it's basically pour a all the money into unions where they said we want to money instead of the rules. >> it's a larger scale thing. >> he mentioned an $8 billion program for community colleges, why is that a partisan issue? >> it's a jobs issue, poverty

issue. going back to the point of mobility and the american dream, the difference in education funding is the key reason that europeans are jumping ahead, it's an easier to get a leg up in old europe. that is big. >> 42% of the men raised in the bottom fifth stay there. socialist denmark, it's 30%. >> we saw it on the safety net t deterioration of the middle class fused with growing poverty. 16.2 children in the country, 22% of american children in poverty. that is where you need investment in this future, an economy built to last. >> failing schools -- the president zeroed out this scholarship it's horrible. he sends his own kids to private school. >> friends, friends, when we talk about this, it's both sides, it's not just president obama, we have folks running for

president president and i have yet to see how their addressing it. >> i hope that they will allow children to escape failing schools. >> and then what, consign those in the failing schools to fail, while you cherry pick those? >> it would force the schools to get better or approximago out o. >> we have a market that is subsidized for looters -- >> it's not a free market and it ought to be. >> it's valentine's day. >> later tonight. not now. >> it is valentine's day and that means it is time to show some love which is exactly whi will do in the post script, that is next on "now." capital one's new cash rewards card

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and now, it's time for a special ps, i love you, the valentine's day edition, a mid the heated receipt ri-- rhetori of the presidential race. it's time to send love, we send our valentines to attorney's general issuing schniderman and those to front line of the foreclosure crisis and shamus dog and suzanne ross for fighting the the good fight and every other governor who has signed gay marriage into law, and special candy hearts go to defier of convention, jermey lin-sanity-lin, reasonable people wherever you are, the new

york city subway, despite what newt said about you and this year's, our hats off for the great work that you all do. happy valentine's day. goodbye for now, i'll be back tomorrow, and i'll be joined by governor ed rendell and the nation's acrie burman, chuck tod is up next, hello chuck and happy valentine's day to you. >> thank you. house republicans are okay with extepding the payroll tax cut, is there a catch? joining us today, senator pat toomey, and a u.s. supreme court justice is robbed by a man with

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right now on "andrea mitchell reports" punting on payroll? house republicans signal they will agree to extending that tax cut and the president said no celebrating just yet. >> that is good news. but as you guys know, you cannot take anything for granted here in washington until my signature is on it. >> the budget battle top cabinet officials take their turn defending the president's plan against an on onslaught of republican critics. >> the failure of leadership here is truly breath taking. >> plus, a public service announcement, from the president. >> today is valentine's day. do not forget. i speak from experience here. it is i