gwen: republicans and democrats grow even farth apart on health care, on efense, on just about everything. we explore wh, tonight on "whington week." the health care fight bings out the big guns. >> this our chance to reform healthare in america. we cannot t this pportunity pass. >> i will not wastetime with those who ha made the calculation that it'setter to kill health reformthan to improve our health care system. >> what we'r saying to the united states ot -- senate, to the gang f six, is thans t no thanks. >> he status quo is unacceable. it is holdi women and families ba gwen: and te fight morhs into

a lager cultur debate president >>n overwhelming potion of thintensely demonstred animosity towd president rack obama is based onthe ct that he isa black man. >> i believe we are the brinof a great american awakening and itwill bein here and begin now nd begin with you. gwen: the u.s. reversescourse on missile dfenseabroad and immedialy goes on the defensive at home. >> those who saywe are scrapping missile defense in eope are either misiformed misrepresenting te reality of what we'r doing. gwen: ile one year after a giantinal meltdown,some see gns of hop. >> prospeths -- rospects for a return to groth in the near term appr good. gwen: we go t the reports covering the week. ceci connolly of "the washington post", john harwood of cnbc and the "new york

times," martha radtz of abc news, dyy. andyy --greg ip of he economist. >> celebrati 40 years of journalistic exclence, live om our nation's capital, thi is "washington wk" with gwen ifl, produced in association with "national joual." corporate funding for "washington week" isrovided by -- >> we know y we're hee. t redefine air travel r a new generatn. >> to ensure our forces are safer and stronger. >> to ake the world we shre toomorrow and beyond. >> around theglobe, et people of boeg re working together to make a difference >> that's why we' here. >> major fundinis also provid by the annenrg, the corporation forublic broadcasti, and by contributions to your pbs

station fromviewers lie you. thk you. once again, live from washington, moderat gwen ifill. gwen: good eening. after weeks of closedoor negotiatio and carefully oated trial balloons, we finally got to see t senate finance mmittee's health care plan this week. minus the public option the president says he was, minus the republican support committee chairman maxaucus says he was, and minus the price tag that critics have said could explodehe federal defit. so everbody's happy, right? not so much. lien to what house inority leader john boehner had to say on the neshour last nig. >> i don'tbelieve that any of these alth plans that we've se thus far from the democrats inongress ca pass any way, shape, or form. and i do believe thathe prident at some point going o have to hi the reet button the gwen: but lak of epublican

support is no the oly problem. manyemocrats are missing in action to. ceci,what did the baucs plan include after all this buildup and wh didn't it in? well, somehing called an indivial mandate, a requirent that everyamerican carry insurance, withsome tax credits for sma buinesses that might have trouble rrying it. all th items the president has been talking about f a long time are in there. we know it would cover about 30 milln more americas, out of about 4 million uinsured so that's a big incease in coverage and there wouldbe real canges in theways docto and hospitals behave. not in thbill is hat public option we'veheard about. that's not too surprising. maybe more surprising is that senator baucus dd not pt in y kind of requiremenon

employs in this country. that's a big difference and perhaps little bit of a surprise. >> -- gwen: those two things are the big diferencebetween what senator baucus is puttg out and what e president said lasteek and has a lot to could -- do with the price tag beg a lot less? >> y. absolutely rht. and senator balk us.a. -- baucus was deteined to come underthat horrble t word, one trillion dollars. the main way he accomplishes th is by keeping thesubsidies, t tax credits and discounts lower than y see in t house bill. >> speakg of the ubsidies, so younow have democra, many liberal and those are baucus' netiating partners, not really the republica anymore especially- except for olympia snw, and even snowe when i interewed her this week sd i want mo subsied for low and middle income

people. can they find money fo that? what do you think going to happen o that? >>he other ting that enator baucus put onhis bill hat's a netwist is this big tax on what they cal cadillac insurance policies. but theye really not tht cadillac according to s many pele. he's looking at an $8,00 policy for an individual. we know that many unins, the average policy in thicountry is p around $12,000. soit's a ta that ould potentially hit a loof peopl to your question abot is there room to increase thesubsies, thers always room for a little bit of horstrading. we're really just tting into the fun right now. his is just the first yea, what's called a chairman'smark when he puts down his ides. all nextweek ther's ging to be all kinds of amendments going on out in pblic and bd closed doo. gwen: i thk there is a snse thatome form o this ould

t through but could it fal art? >>absolutely think no furtheback than the clintons in19923-1994 when democrats alsoontrolled the white house as well congress and ings fell apart. my sense ithat one of the real dangers in a policy, in bill at is thi enomous, it affects one sixth president he is he is -- u.s. ecnomy is that icould die bya thousand little changes. onechange, senar baucus proposed a fe on te medical devip manufacturersthe people who make wheelchairs, scooters, and even breast mps. there would be an increasein the price of tho items. there is a vey grese -- aggressivlobbying effort to get that kcked out of the bill. yosay no big deal, few billion dollars, ot that critical to health ce reform but if that ppens over d over and over agai he -- you

really lose the heart of he legislation. >>ut isn't it tue as president ama keeps saying that in factthey're much fuher down the road than president bill clinton er got in yes. they he moved much more rapidly a made much more rogress in terms of committee action. >> of urse one of the things that killed linton's plan was position from instry. nobaucus i taking qui a t out. what dowe hear from the vaous stkeholders? gwen: and state governments who aren't happy about what they consider addional manedities formedicare coverage. >> all longthe idea has been to calibrate the pain so everyone suffe you alitt but there's not a fat below -- fatal bw to an ne. >> does tat mean mx baucus

did a better job than people gaveim credit for? >> yes, he does desrve credit for keeping so mny peopleat gwen: you may have -- tptsjust t beginning becase you may have niced, the bate over alth care is only the tip of the iceberg. if you put urar to the ground iwashington these days it's almost like you canear the fault lis opening up on l kinds of touchy issues you're not supposed talk about at t dinner party, cluding violence and race an nancy pelosi said the tone reminded her of the type tt leads to polital violence. johnoehner said he smells a rebellion underway. seems kind of hair-trigger to me, john. >> it is. and fortunately we're after dinner so we can be a littl moreannedity. somef this is exagrated in the sense that,you kno, nancy losi was talking abo the 1960's and1970's. there you had i think a much broadermore broady stributed level of curse emotion -- gw: talking about assaination, to be clear.

>> ye, certainlythan happened but think she wa talking about anra where felings re so powerful. i think th is a case here there e a small number of people on eier side who feel exceptionally pssionate and th're louder. we can hear them more. most ordinary people are nt paionate about politi. it's sort of theweirdoes at eitheend of the sectrum -- >> iresemble hat remark! >> wel look,a cople things behind this. one is growing pards ifference -- partisan differen -- differences in the cuntry reinforced by e fact we no longer with -- have a ffer. conservatives ar all the republican party, liberals are all in the democts. they he much, mu less in commonnd you have his fragmted media environment d by cable tv and the

internet where you have ery strong -- strong voice that are rewarded for being strong and extre. the result of at is in the shstration streags you ha pele who when the bush team wanted terror sureillance and looking at peope's phoneor internet record peopleaw the specter of some sor of a fascist state and -- gwen: but is jim carter considered to be exeme? >> i thi he said something that was extreme. i'll get to him n a second. the other thing you have is on the right people projectin that barack ama is going to somehow create some sort of race is an added element to that. jimmy fert -- carter, who is a peon of another generation who grew up when racial feelis were especially intensis now sayng that the overwhelming majrity of emotion mes from race. th seems a little bit strong to me. i think races part of it. barack oba is a dfferent president than we'vead before. he's somebody noonly because his race but because of the

unusual natureof his background, growing u overseas r part of the tim. , even oming from hawaii, it's a different milieu e was arnd through muchof his chilood and how you disentangle what's raceand what isn't is hard do. but ther's no doub it's an ement. >> but john, theseorces are so loud d so dom unatehe debate. how do you go past that fury? really, those are th voices we've hearover and over again. they're powerful. ey may be a smal number o the exeme left and extreme right but they're werful. >> wel, they ar t look, the nominating ocess in presidential politi ultimately reflects the ll of the peple whenyou look at it in its totaly. the furtherest left canddate doesn't alwaysin. the furthest right candidate doesn't always wion the republic side. present obama by the description ofolympia snw, republican from mane, is

pushing a somwhat modete, in her view, hlth care pln. it's t always being described wi those terms but hes king headway with it. if he succee with what he's doing -- his poll numbers are down right now -- ou may see some of that change and the fears of peple that they're projecting ont arack obama f wh might happen -- so do you think his is a problematic disaction from the ite house or a reief fr all he ther serious stuff they're slogging throu? >> i think it's problem ig -- proematic. this psident doesn't li it. you've seen him oer andover riticize the 24/7 meia lture, cable tv, h doesn't like cable tv. he dosn't like the exremes yehe's battlin those voices so i tnk that's not the washinon he wanted to be involv with. i think he, i do think i wanted

have a different kind of working relationship than many republans in the capiol than he has had and that's kind of the nature ofwhere the two parties are right now. >> jn, what ds thi mean i practical terms for the repuican party? obviously o a certain exten theye riding it, feeding it. will this benefit n the mid terms next year,or example? >> i think the repubcans are headefor a decent mid tem election anyway. history makes at happen cause there's a reacion against the prsident and party especially when he's trying ig thin. i don't think the xtreme voices particurly benefit the republan party. i think they're me likely to risend fall on the succs or failure of obam rather than what they do i the midterm elections d i think republicans arespecially disorited at this moment buz -- because ot only did ty have a failre of the bush ministration of some of ther ost cherished prinples, the

free market, free-- the ole ofhe government i ktrina, that support of hing, then bush suppord a masse intervention and that caud some people to blow a gasket because that's what decrats do. then when barack oba comes in d continueand expandshose policies they've got t ratchet up the level of criicism to it because it was started under a repuican president. gwen: ok. we have a lot of other stuff to get to tonig. the preside surprised allies and enemies alike thiseek when he annoced plans to drop plans for a european-based missile defense shld. and himilitary advisors unsettled some in his own pay when they saidhey want to stepp, not scale down, troop presence in afghanisn. first to the msile defense sty -- why this and why now, martha? exactly what was that all about? >> it surprisedeveryone but it's clearlyomething they've been working on fr a long time and think had -- they had anher assessment of the threat from iran. they said they're going t hange the chm -- sstem.

the key is they're not going to plant thoseland-based radar interptors in the czech public and poland which had coletely out raged russia. the timing othis, why, is that we ve the u.n. general assembly next week and we have the g-20 next week and a lo of foreign -- gwen: it al happened o the 70th aiversary of the soveyelt invaon of poland. not eat timing. >> that was not wht they ment too and that wa sort f lot in all this and cetainly lost on them. but tey will not sa russia has ything to do with thi, although i thouht secretary of defense bert gates was very honest abt this. he aid well, it was alost exclusively about the threat were -- from iran but he did sathis willllay someof russia's unfounded fears abt havi the land-based

interceptors. >> did we get someingin retu from russ? >> wel russiis so appy about it. what a surpse. i think that is the questn. we a have to watch is there payback for what the united stes did? do we see russia pnying up on the sanctions, which is reall what they want? they've already made nse that's no wa tis isn'tthe time for more sanctins. if -- but i they dn't get anytng from this but making russia happy hey're going to comender further riticism. >> could i ask a practical questio as i undertand it the admistration is arguing, want to focus on the threa of miiles from iran. i ought the democratic position was missiles didn't work in the first place. o is there some reason to think the ystems wou work better defending one kindof missale -- missile tha another in >> well, the thrt changed, o says ts asessment, from long

range missiles to shorter an medium ange missiles so ey're saying if thy put them on ships, they can move around to protect europe and it will work better just bause the threat has changed. it is a layered eature tey have. they have the ship bas eventually se sort of land base but i ouldn't count on it. >> i wanted to askyou about afghanistan. we heard different messas from different people inthe ministration. onis we need the pr -- resources execute -- exeute the strategy a the other is we need the srategy toget the resources. which is which >> i tnk you're talkingbout secrary gates and admiral mullen, the chairmanof the jot chiefs of staff, seeming to have differe messages all the time. th strongest isthat secretary ges seems -- keep saying e have plentof time on these troop requeststhat the commander afghanistan is gog to say while admiral

mullen is saying we have 12 to 18 months tomake a difference. so you're etting lotsof mixed messages out ofthe pentagon in paticular about how te troop buildup wilwork. >> and do you ink they know how many troops they'd like to go and request? and when we hear president obama aying i thck -- take this notion of senng soldiers intoerious spots ery seriously and'm upon ding it, what's pinne -- behind that? >> stan mcchrystal knows how many he wants but no on is asking the nucks th >> se's asking himent i'm asking him but not etting anywhere on tha none wants his to happen right w in the middle of the heal care debate. let's fa it. but it's a very good point. president obama saying i have ttake time o this because i'm sending pple off toar and peopl can get killed guess what?

people are gettingkilled there every single day and when e sent 20,000 trops right awa whene took office it didn't take him quiteso long. they hired a new commander, fired another one. he wanted hi to have a stragy -- gwen: against the back drop of fading sport among demorats? >> absolely. you havefading support on he hillnd among the public. 51% ofthe -- those polled said they dn't think 9 wr was worth fighting and th's afghanistan. >> ok. gwen: now let's tlk about he economy as if thers not enough going on. one year later, the naon and the world are stillecovering fromhe biggest economic meltdown in decades, but wt have we learnein that time anis the worst behind . the fed chairman seemso think so. it wasn't real green shoots but he was sying he could e the end. >> in a tchnical sense and he's probably right. he doesn't et to make that

declaration. that is that's up to he joint committee of economis. but whatdoes he mean? things likeetail sales, industri production, even housing star have started going up a litle bit. buthe thing peple care mos about employment andthat's still goindown and given that its almost a sre thin that this economic recvery is going to be ry weak by istorical standards it' going tobe som time before unemoyment starts going up and an evenmuch longer timefor itto come down. for the average person ou there it's going to seem ike a recessiofor a very long time. e crisis is stll ahead of them. it's not over by any means. >> i have to say i'm one of the lay pele in all of this but has anything chnged in - on wall street? gwen: yeah, thepresident nt up there monday and gave another strong speech. >> yeah he saidstop behving liket's 007 and you don't

need to wait fr new aws to behave differtly. there's en a lot of attetion paid towall street, the billions set aide for bonuses but the are feweof hose people. ere have been a quater million loofs on wall stree some of the biggest firms re simply not tere anymore. but the culture is stillhe same it still on wall street, eat what you kill. when ou have a rally good quarteyou take most of that home with yo and that's ot going to change unil we have regulations that ta down the risk-taking. >> peopltalk about a jobss recovery. whatakes a jobless recvery? is there athing the administratiocan do to make itess joless? >> essentlly the economy has to grow at leas 2% a yer to keep the employment rat steady. what people an is hat the economy is only going to grow

bare around 2%, at that level. ine -- i've seeforecasts he unemployme rate won't bedown around 5%, which iswhere it was at the beginning, for anotherecade. what can the administration do? the preure is on tem not to take their foot off he accelerator t soon. when the presint goes to pittsburgh nexweek i expec th willing one of the commitments hand the oth leers of the -20 make, which is not to hastily withraw the fiscal stmulus and not have the central banks quckly raise tes because of the earof inflation. >> could i ask you quickly about the ychology of this? we've taked over the past yer about the psychological of t markets and of a recession. will this changepeople's spending habits an is it nota good thing? >> e psychological -- schol already has changed ctually. the stock maret is up 0%.

>> but regular cnsumers? >> regular consume are facng twnew realities. used to be if you had a post, you could get a loan. tht'sover. and obama in his seesm monay said -- madeit clearhis priority is to create a structure where those kinof loans are never made aain. also the pulic has los $2 illion of their wealth in he past ye. there is goingo be a lot of savings that nee to be su -- do and when thecountry a a wholis saving more, the economcan't groat gwen: aftera year of government intervention in e auto industry and stimus spending for potholes and other things obviously and a year of intervention on al these fronts whh has reslted in this suspicion ong so mny people about governmt tense,, is that hurtin the president's aility to chapion

government inrvenon for health care refo? oh, i absolutely think it is having th effect. look, for e lat 200 yers the pattern hasbeen we have wars, crises, and the govement increases inlvement a when the war is over the goverent pulls back but never muc as before the war. we still think of oursves as a small governmt society,the government that goves best governs least, hat sortof thing t the government is now the biest shareholder in bnks, in general moto, so forthand look at the national debt soaring out of corol. how will wever pay ts back? there s a natural, understandle recoilingamong people froall this intervention so wen the president comes along with what reprents another lar intrusion, there are very god reans for people aying where does thi snop en: thanks, everybody. we're done herbut the conversati continues on line.

outchout -- check ut our "washingtoneek" webcast q and a. ep up with daily deveopments "the newshour" and 'll see you again next wee on "washington week." and to those of u celebrating rosh hoshana, we wish you th best in the new ar. good night. >> "washingn week" was pruced by wet, which is lely responsible for i contt. corpate funding for "washington ek" is provided --boeing. major funding ialso provided the annenber foundation, e corporation for public broadcasting and b contributnes to your pbs station from vwers like you. thank you.