>> what do you think of when you see a tree? a treatment for cancer? do you think of hope for the environment? or food, clothing, shelter? we do. >> we cannot have a circumstance in which a meltdown of the financial sector once again puts the entire economy in pearl. >> this week on "inside washington," president obama

takes on wall street. >> they're not interested in making a deal with us. they want to jam through a totally partisan bill. >> world leaders con collude the nuclear sum mitt here. what did they achieve? >> the american people will be safer and the world will be more secure. >> will obama have a fight on his fands over justice john paul steven? and on income tax today, the voices of the tea party are hurt across the land. >> well, the economy is looking better. jobless rates still much too high, but the stock market has some real heft again. real today sales are up, housing is a problem, but people are buying cars again. the banks are raking it in. but how do we keep the big boys

from taking us down the road to perdition again? the democrats say we regulate, of course. that is president obama's next big fight. can he win this? >> he can win this big. can he win it because of the popular issue, wall street is unpopular. also you have some republicans who also recognize it's a popular issue and they're going to get onboard. >> charles? >> if you had a bill that would propose putting the bankers in stocks in times square, would pass the mood of the country as anything you label, regulatory banking reform will pass. >> nina? >> let's put it this way. if he doesn't win it, the democrats will run on it. >> mark? >> whose side are you on? that simple. i think that's the formulation that's going to carry the day. >> senate republican leader mitch mcconnell says the new regulations the president and senator chris d.o.d. are pushing -- chris dodd are pushing will just lead to more bank bailouts. >> it's a bill that actually

guarantees future bailouts of wall street banks. >> to bail out or not to bail out. >> chris dodd says republicans are getting their talking points from a memo by republican pollster frank luntz. >> the single best way to kill this legislation is to link it to the big banks bailout. >> well, let's talk about this. the bill would establish a $50 fund, a fund financed by the banks, not the taxpayer, right? but what happens if bank failures succeed that sum, colby? >> i don't know. >> could it be a bailout? >> the important provision here is that the banks are initially going to have to bear the brunt of this themselves. they're going to have to take the hit because they're going to send this particular pot of money that's going to be available, there's insolve venn si of one institution.

>> is a bank going to be allowed to fail? >> the whole point of the bill is to prevent bailouts by spotting these things with regulation and taking over an institution early to prevent the kind of thing we saw with lehman's, which failed and the entire credit market failed. >> the language in the bill is pretty specific. it simply says that fund, to close the bank down, not to bail the bank out, to close it down when it represents a threat to the financial system of the country. so it's not a bailout. and i think that -- >> it's a smoke screen. >> you're going to wipe out the shareholders. you're going to force the members of the board to design. this is not anybody bailing a bank out. it seems to me that this issue is tailor-made for republicans. the fiscal responsibility and all the rest of it, charles.

>> it doesn't matter what's in the debt. i think it's sort of an empty argument. it doesn't matter what the bill says. if we reach a situation, as we did in september 2008 where the whole system is on the brink, we are going to invent any instrument like the tarp, we'll do whatever it takes. that's what happened. there was nothing in the law requiring the bailout at the time. people will make a judgment as to whether you can let a bank go or not. if the answer is, the estimation is no, as was estimated in 2008, you get the bailout. the fact that we had all the bailouts in 2008 is a signal to anybody in the market that if we're ever on the brink again, the government will step in. and everybody knows that. i think the details of what's in the bill are really arguments about theory, in practice what's going to happen you're going to look at the situation and make a judgment on the spot. >> what about regulating derivatives? >> the banks wouldn't be fighting so hard if they didn't think there was some serious

regulation in there. i suspect there's a certain amount of good cop, bad cop going on, because it bans derivatives from bank. >> no one likes paying a fee or putting together the fund, so i understand why the banks are opposed to it. but it makes eminent sense. fdic, which ensures the smaller banks, requires a fee from the banks, and it's a right to self-insurance. perfectly reasonable. >> you asked about derivatives. it's ab$603 billion enterprise that is basically unregulated. it exists in the shadows. this is an attempt to bring some regulation, some accountability, some transparency, some light to bear on what's going on. i get -- guess the biggest kick out of this is if the banks are farthest, which seems to be implicit in the argument, which is why are the jamie dimon and lloyd blankfeins of the world opposing it? >> you would think that -- after

all, it was the bush administration, which i think rather courageously did the bailout, when we were on the brink of collapse. you seem to think they had nothing to do with it. >> let me hear from the former banker. >> the fact of the matter is mitch mcconnell was absolutely wrong when he said they're trying to force votes. we've had the republicans negotiating with chris dodd on a possible package. senator corker from tennessee. the senator from alabama, shelby, trying to work something out. they still may come onboard at the end of the day. dr. lowe from kentucky. it's not true that democrats are shutting anything down. >> there was one other piece of news, which i think is interesting and how it affects this. the treasury is now estimating that the losses from the bailout are much smaller than anybody

expected. everybody spoke about $800 billion. it turns out if you save the banks and the bank recovers you make a profit. it looks like our losses are under $100 billion. >> the president needs this. he's not getting the bounce from health care that they had hoped. >> no, he's not getting it. but the democrats need it. they need a record going into november. they're the ones who run the ball lofment president obama is not on the ballot for two more years. he obviously would like to see a democratic losses held to a minimum. but no one's talking about a democratic victory that i know of. >> all right. let's talk about the nuclear summit. >> just 50 pounds of high purity uranium, smaller than a soccer ball, could descroy the downtown -- destroy the downtown of our capital cities and kill tens if not hundreds of thousands of individuals. >> the risk of a nuclear

confrontation between nations has gone down. but the risk of nuclear attack has gone up. >> president obama and vice president biden on the recently completed 47-nation world nuclear summit. the russian president says the summit was a success. analysts would agree it was a needed step. charles, you do not agree, i gather. >> the day after the summit, two members of the military gave testimony to congress to the effect that iran will likely have enough for obama -- enough for a bomb within a year. at the same time, the president announces after inviting the largest number of leaders to our country since the founding of the u.n., the great success and greatest announcement he made was that ukraine, chile, mexico, and canada are putting aside and

sequestering a certain amount of enriched uranium. that's an enormous relief. i lie awake weeks worrying about the canadian uranium. i know these people, i grew up there. if says knee crosby hadn't scored the goal, you have no idea what canadians are capable of. i feel this is a complete success. >> so it's all hallow, that's what you're saying? >> it was a misdirection play. this is an issue, you can have experts, you need to deal with, it's an important issue, but it goes at that level. to have the largest summit in the world and you leave out iran and pakistan? >> can i say something? satire cannot obscure the fact that this was, number one, and i'm sorry to say this, a public relations success. number two, that it did have some serious first steps in it. and number three, that as a result of this meeting and these first steps, the united states

has outlined and apparently has at least a chance of getting past very few sanctions against the iranians that susan rice outlined at the u.n. this week. >> we heard the president say a minute ago as a cons website of this, the american people will be safer and the world will be more secure, colby. >> qun, president obama lev tated above the group and moved around the room to everybody. somebody would say he was just showing off. he gets credit for nothing in some quarters. it was an important first step. is the world safer? no, but the world is more cognizant of the problem we're facing. that's an important first step. he got a consensus on that issue. >> part of the follow-up was on tuesday the russians closed down a siberian reactor that had been

producing weapons with levels of plutonium for the past 50 years. it is a fair step. is it a public relations move? yes. do a lot of politicians, political leaders hide their light under a bush el? this is what the president did. it is now on the agenda, it's there. according to u.s. people, the chinese are onboard as far as iran is going. >> better than we had now that we didn't have before the summit. that makes us more secure. >> we actually got sanctions that actually had teeth in them, that would be -- >> what makes you think the chinese have strong sanctions? >> i said we have a chance. there seems to be a real possibility. >> there is no evidence whatsoever -- >> i guess we'll see, charles. i guess we'll see. >> on the day that president hu

apparently made the big step, the chinese foreign ministry made a statement saying that its object in the u.n. is to achieve conciliation and diplomacy and added that pressure and sanctions cannot solve the problem. a definitive statement. >> on the other hand, the political reality is the administration has achieved some success in the isolation of iran. iran is totally dependent on china for its economic support, for its trade support. and they know that. they're not happy with them either. >> i can't believe what you guys accept. isolation. >> please! >> iran can live in isolation for 100 years. the issue is is it going to develop a bomb. our own military is saying it's going to have enough uranium in a year and a weapon a few years after that. >> mark, you asked what we get

out of this. commitment from 46 nations to lock down nuclear material. the question is whether, in fact -- and we'll find that out very soon, whether we act on it. is it an important first step? yes. is it the solution, no. >> all right. let's talk about the supreme court. justice john paul stevens is about to retire as he approaches his 90th birthday. you weren't here last week, nina. let me ask you, talking about possible successors. this man was no flaming liberal when gerald ford appointed him to the courting was he? >> no, sort of moderate conservative. he has changed a little bit on a couple issues. but he argued very strongly that it's not he who's changed, it's the court's that's changed, the composition of the court. he was sort of at the center of the court. the court moved dramatically to the court and now he's at the left wing. >> didn't he write an opinion banning george carlin's seven

words? >> he did. on statutory grounds. >> did he vote to reinstate the death penalty? >> he did. he came to say that he thought the best death penalty was useless, but that in view of the fact that the court upheld it for so many years, he was not prepared to change that. >> that's not a change in the court, that's a change in him. >> yeah, but he said at one point there was a school desegregation case. involved the systems that had once been segregated. he said he did not know a single person that he had ever served with when he came to the court who would have voted in the manner that the supreme court did to not allow this formerly segregated system to take these steps to desegregate. and i think that's a fair observation.

i still don't think he's a flaming liberal. you have to look in context. >> one of the nominees, will the republicans fight them because that's what they're doing now? >> republicans' formula has worked pretty well. they've opposed everything. health care being the most conspicuous example and their poll numbers have gone up and their prospect for november. there's a natural inclination for republicans to oppose it. i think it's a tougher case, because as nina points out, this is john paul stevens' seat. it isn't like you're going to tip the balance of the court in a different direction. >> in fact, it's probably going to tip it more conservative whoever obama pick, because all the names on the hot prospect list are more conservative than john stevens in all likelihood. >> charles? >> look, the degree of opposition will depend on how left, how ideological the nominee is. >> only that? >> well, you know, republicans are the conservative party. the liberal party is in power.

will nominate a liberal. there are people in washington, whether or not, who actually have principles and believe in ideas. i know it's a strange idea on this show. >> oh! >> let me speak for the unprincipled idealists. i do think there will be opposition from the republicans. not one of those individuals named thus far would be acceptable to somebody like senator sessions from alabama, he doesn't like anybody who has a sense of responsibility and a practical mind and wants to do what is right. >> we're talking about a lot. >> felicity general, she's the youngest of 49, garland, a judge

on the d.c. court of appeals. and diane wood, a judge on the very respected -- a liberal judge, on the court of appeals based in chicago. >> any surprises out there? >> i mean, everybody notice, but there's nobody on this court who's ever run for office, ever served in a legislature, ever crafted a piece of legislation. everybody notices, in fact, that when john stevens retires, it's entirely possible there will be no protestants on this court in a majority protestant country. nobody from the mountain west on the court, and there are lots of western issues. i don't see any other names that it's not out of the question. >> western protestant lieutenant governor. >> thank you. watch for that. income tax day. angry tea party folks. >> i'm tired of the government taking everything i own. sit home, drink beer, and do

nothing. >> taxes are directly related to liberty. the more taxes there are, the less liberty we have. >> i've been a little amused the last couple days where people have been having these rallies. about taxes. you would think they would be saying thank you. that's what you'd think. >> that's president obama at a miami fundraiser who says contrary to the tea party folks' claims, he actually cut taxes. why aren't people saying thank you, mark? >> they're not saying thank you, because there is an anger in the country, an anti-government feeling. what is fascinating is the facts and the reality. we've had just an incredible disparity, growing disparity of income. the top 400 earners in the united states saw their income in the last -- since bill clinton was elected president, 1992, up by 399%. the other 90% of people have gone up by 13%. and their tax has been cut in

half in the top. they only average $240 million a year each of them. >> historically, it's really interesting. tax rebellions occur in bad times. people feel the pinches the most obviously when there are bad times. when there are good times, it eases up. but there is this disparity also between fact and reality. middle class taxes are the lowest in american history, at least in modern american history. er >> good point. 47% of american households aren't paying any income taxes at all through the year 2009 and 55% of senior citizens households don't pay any at all. >> there's some people who feel that they are paying too much. they have a long list of grievances that go beyond taxes, to the health care bill, to the guy saying on the air that he thinks somebody else that's getting something for free.

that kind of thing you've heard before. you've heard it in good times and bad times. you can almost identify the population that talks this way, talks about big government, talks about intrusive government. we saw it before in the 1960's, a guy named george wallace we knew very well and they're saying it again under a lot of different umbrellas. but it's the same old story. >> one of the supposed ignorant angry semiracist people who is warning against big government is the chairman of the federal reserve, who said in congress today that under the bumming et proposals of this administration, we are going to go to 100% of g.d.p. in debt by the end of this decade. we're going to have a trillion dollars a year in debt service in 2020, which puts us in the league of least. that's why people are speaking about taxes. it isn't about today's taxes, it

is about the inevitable -- hold on, you've already had your say. it's going to be about the inevident increase of taxes that are coming, including all of that. it's because of the policies of this government. >> those numbers i just threw out on people, that's not the whole story, is it? >> no, i don't think it is. 47% of americans don't pay income taxes, according to the tax policies. it was a very respected organization. what they overlook is most americans pay more in payroll taxes, in social security, in medicare, than they do in income taxes, and the reality is this, that the single mother who cleans the private bathroom of the hedge fund guy actually pays taxes at a higher rate than the hedge fund guy does because he only pays social security and medicare up to the first $100,000. after that, his billion dollars goes untaxed and he pays only the 15% rate. she's paying above 16%. so that's the reality.

don't try and on scrure that. -- obscure that. government policies, essentially initiated by republican presidents, ronald reagan and george bush, an income tax credit, which i happen to think is a great policy, which encourages people to work, and the child tax credit, which was doubled to $1,000. that has taken people off the taxes. >> you're listening to the point that adam made about the tea party. it is not that anybody wants to lower the rates on the billionaires. you the tax the billionaires at 100%, you won't come near to a 10th of approaching the problem with the deficit. the problem began before any of this, it was only about taxes, speak about the expansion of government. with expansion of government comes with expansion of tax. we have a brand-new entitlement of two trillion dollars, which

adds to a debt of another $10 trillion. we're going to have to pay it. it won't come out of the taxing of the very rich. it will happen to come from a broad-based taxes. >> i agree with charles. that's what i was trying to say before. taxes undoubtedly will have to rise in order to catch up with this debt. the debt, the huge debt, began under president bush, we fought two wars, with no taxes to pay for it. this is unprecedented in american history. and it is certainly true that we have also adopted other problems. people do not want to cut services. you look at all the things that -- how the governors are struggles at a moment. >> i am not just going to let it stand that the people out there protesting is because the chairman of the fed talks about it. some of them obviously feel that way. they also feel angry about other

things, not seeming to do with the debt, but the way the government in their lives -- who seems to be winning and who seems to be losing, and what's happening to money,. i'm suggesting only that those are not new arguments. those are old concerns. i'm not saying they are illegitimate, but they're old concerns and you recognize -- >> the opposition is white trash losers, -- >> nobody said they were trash. but they are largely white. >> at times, 11% is non-white. at times, a majority of them have a higher median income and higher education than the general population. it is not the george wallace constituency. >> the repeated slogan, we've

lost our country, we're going to take back our country, has nothing to do with debt, our deficit. that is something about who is running the country right now, and there is that late in this movement. to deny it, i think is to deny reality. >> that is total rubbish that the democrats run year after year. taking it back. if republicans are in office. that's a slogan everyone uses. it has no other implication. that is a slander. >> we'll see you next week. >> for the transcript of this broadcast, log on to insidewashington.tv. 'm very sor.