gwen: troubling job news, deficit talks at a critical stage. g.o.p. money numbers. and how to honor soldiers. tonight on "washington week." >> our economy as a whole just isn't producing nearly enough jobs for everybody who's looking. gwen: the unemployment rate creeps higher as the economic slowdown stays slow. how will that affect this weekend's high stakes debt negotiation? >> there is no agreement in private or in public. gwen: all eyes are on the numbers. both in washington and on the campaign trail. >> this was a must hit opportunity for us. gwen: as g.o.p. presidential candidates seek targets of opportunity. >> the president in my view

made the recession deeper and longer than it needed to be. gwen: and a change in white house policy. what happens when a soldier commits suicide? covering the week, greg ip of "the economist." alexis simendinger of realclearpolitics.com. jeanne cummings of bloomberg news. and yochi dreazen of "national journal." >> award winning reporting and analysis, covering history as it happens, live from our nation's capital, this is "washington week with gwen ifill." produced in association with "national journal." corporate funding for "washington week" is provided by -- >> this rock has never stood still. since 1875 we've been there for our clients through good times and bad. when their needs changed, we were there to meet them. through the years, from insurance to investment management, from real estate to retirement solutions, we've developed new ideas for t

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once again, live from washington, moderator gwen ifill. gwen: good evening. just when economists were beginning to predict light at the end of the tunnel, the monthly job numbers said no, not yet. and just like that, the white house was on the defensive again. >> we've added more than two million new private sector jobs over the past 16 months. but the recession cost us more than eight million. and that means that we still have a big hole to fill. gwen: who is in that big hole? and why is it that month after month, and after month, it never seems to get more shallow? >> let's go back a little ways. a few months ago, the economy seemed to be having a nice head of steam. we were seeing very strong job growth numbers of 200,000 per month. and suddenly everything seemed to hit a wall. we've had a run of bad luck. we had very bad snowstorms earlier this year, a series of natural disasters here. the big hit came from gasoline prices that shot up to around

$4 for gasoline because of the libyan rebellion. and finally the japanese earthquake and tsunami turned out to be a much bigger negative for us than we may have appreciated. because it cut off the flow of vital parts. put all those things together and it cost a lot of momentum. may very poor job numbers and in june, very poor job numbers. it was kind of surprising because in fact over the last few weeks, we had a wave of optimism because some of those tempering negatives seemed to be going away. as gasoline prices dropped and japan got back to normal. gwen: 24 hours ago i heard all the smart economists saying we'll get 120,000 jobs. and instead it was 18,000. what was the big gap? what was the distinction? >> first of all these numbers are very hard to forecast. every month when these numbers come out there's a lot of crystal ball gazers eating a lot of broken glass. it was worse this time than usual because the day before a very respected private forecast had said there would be 170,000 private sector jobs roughly created this month. that turned out to be three times too high. but step back a little bit.

and i think the really interesting phenomenon here is that these disappointments, aren't restricted just to the last month or two. it keeps happening. the recovery supposedly turned on july 1. and it really -- we've had disappointment after disappointment. the federal reserve keeps lowering their forecasts. we've seen it to be more structurally wrong going on in the economy than any of us appreciated. >> craig, they're talking about different ways, the white house today, was talking about remedies to this. the president mentioned passing trade deals. and patent reform. and they could get those things through congress. but short term, is that going to make any difference? >> no. those are good things to do, patent reform, getting the free trade agreement passed and those things probably will pass once a few negotiating items are cleared up. but those will produce rounding error in terms of the impact on jobs. really, the only real impact they could have would be more stimulus. but all they're talking about right now is cutting the deficit. not expanding it. there is a possibility that

they might extend the payroll tax cut that we had a year ago for another year. but really, all that does is prevent the rear straint from the fiscal side getting worse. it doesn't actually add new oomph to the economy. >> you mention the federal reserve. there's lots of discussion since this morning about whether there are any more tools in the tool kit for the federal reserve. so what do you think is out there and -- in discussion land? >> ordinarily, they would be like cutting interest rates right now to deal with these very bad job numbers. but the regular traits are near zero and -- interest rates are near zero and purchasing bonds by printing money and not very exciting by the prospect of doing more. inflation got to be more of a problem because of higher gasoline prices. and there's almost a lack of faith inside the fed that it will work. but i actually think if these job numbers doesn't pick up as most of us actually think they will, you will see the fed perhaps swing into action. >> how much of what we're seeing in these bad numbers is a reflection of as you alluded to in your last answer the bad things that have happened, the

tsunami in japan, and the other natural disasters, and how much of this are people just being scared of what's yet to happen? in particular, the possibility of the u.s. defaulting on its debt? >> i think the temporary factors are the most important thing. i don't think there's a lot of evidence that the discussion of the debt talks are creating a lot of uncertainty. i mean, look at bond yields. they are only 3%. there's no concern in the bond market that we can see. the tough reality is we have a situation where all the households that took on too much debt during the boom years are trying to pay that debt down. now we have folks in washington saying the government must do the same. if you combine household paying down debt with the government trying to like rein in debt, that's a double whammy to the economy. gwen: who's taking the hit in this? i see numbers that show african-americans are taking a harder hit, that women are taking a harder hit. how demographically, let's get back to the real question, how these numbers or the disappointment, this disappointingly slow recovery, how is it affecting people's lives? >> well, the rise in unemployment that's now taking place over the last three or

four months has been across the board in terms of demographic groups, racial and age related but two very interesting trends that come out. the first is the private sector is actually continued to create jobs. about 130,000 in the last two months. it's government that keeps cutting, cutting, cutting, eight months in a row. and we're going to get more of that. the standoff that's going on in minnesota right now. pretty much guarantees there will be more austerity there. the or interesting trend is that women are getting hurt more than men. that's kind of unusual because in recoveries, it's usually the or way around. women doing better. that might reflect the fact that a lot of the job losses are in government. especially local government. gwen: ok. thank you. women taking the hit again. we've heard this before. the job numbers put a significant damper on those accelerated efforts to reach a debt ceiling agreement. only yesterday, the president was saying there was progress in sight. and house speaker boehner pegged the chance of getting a deal within 48 hours at 50-50. but that was yesterday. that was before the bad jobs numbers. this was boehner today. >> we need serious reforms that

restrain future spending. you've heard me say before a debt limit increase that raises taxes or fails to make serious spending cuts won't pass -- won't pass the house. gwen: so where do the negotiations stand tonight? alexis. >> standing still tonight. trying to get organized for the sunday discussion. they're getting back together in the evening on sunday. gwen: and who is that? >> that would be the leaders, the eight leaders representing the house and the senate in both parties. the president, the vice president, and the president's staff. they're going to get back together in the evening on sunday. having brought their homework and their number two pencils and the white house, their sleeping bags and pillows, you infer know at 6:00 p.m. and trying to get back down to brass tacks about what kind of pieces of the budget everyone could live with that might add up between $2 trillion and $4 trillion of deficit reduction over 10 years. and this discussion is all

designed in the rush to avert the debt ceiling crisis, the default concept by or before august 2. gwen: there was some suspicion yesterday when they were being kind of, sort of optimistic, that in fact speaker boehner and president obama in the secret meetings that we didn't first hear about at the white house had cut the broad outlines of a deal. and the selling part where they were going to try to count noses. was that hopelessly optimistic? >> well, john boehner, the speaker, and the president, are the two most enthusiastic champions of the idea of going for the big deal. and both of them have political incentives that they're considering that would be helpful to them. for one, president has a weak hand. he's trying to figure out thousand get out of a political -- out how to get out of a political box. thinking of history. john boehner trying to think of how he can keep his speakership and organize a deal that he actually would believe in, that he can get his members to vote for. and that they could then still

run on in 2012. so the two of them are the enthusiasts for this. and so when you see them starting to look like it's wilting today, it's because they don't -- both on their partyaries sides heard all kinds -- party's sides heard all kinds of grief. nancy pelosi made no bones yesterday of how upset that she was cut out of these discussions with the speaker and the democrats in the house are concerned the president might sell them out on medicare and social security which are suddenly on the table, the president refuses to take these very important programs to democrats off the table. gwen: she says should be different -- >> right. and she is concerned dealing with the speaker on republican terms, that the republicans don't want to raise taxes, that perhaps john boehner is playing the president for a deal where the republicans have a much stronger political hand at this point. >> but john boehner doesn't have a free ride on this one, either. and how much concern is there,

we were hearing a fair amount of this, of concern from republicans mid week -- >> right. >> that john boehner was going to agree to tax increases or close tax loopholes, that -- gwen: revenue i believe is the term. >> revenue is what the white house says, not revenue neutral is what the white house was insisting upon. and of course that got anti-tax activists on the republican base side quite riled up. how has boehner managed that and how much of a hurdle is that for him? >> well, he has said consistently publicly that he supports his conference, that they will not agree to any tax increases. but just on the day when the president saw that on the hill, republicans were starting to fracture on the idea of they could go for some loopholes, eric cantor, the majority leader in the house -- on the house republican side, he can see some loophole closures. john kyle, the senator from arizona, said he could see some selling of government property,

those things are not considered tax increases. on that particular day, the white house was thinking, ok, this is going well. and just on that day, what happens, then the democrats go nuts over the publicity around the idea that social security and medicare may be on the table. and nancy pelosi starts to suggest that her conference will walk. so just when there seemed to be on one side as you say, but by going big, the president believes negotiating big, the $4 trillion, that you might end up in a good negotiating mode. like any contract, you go big to go middle. gwen: or you go big or you go home. >> or you go home. exactly. >> you mentioned a moment ago that the debate to some democrats is taking place on republican terms. here in washington, it's all about cut the debt, cut spending, cut the debt, cut spending. when you look at the polls, though, that doesn't seem to rank very high. people seem to like social services. they like social security, medicaid, medicare, is this an issue that's sort of beltway focused or do you actually see concern when you look outside

washington about this same issue? >> well, conservatives were very concerned about government spending and the size of government. so the whole concept of trying to trim the government and bring down spending, that was much more of a republican initiative. and that certainly was a feature of the elections last november. so you could argue that that came from the outside inside, the tea party, etc. but the concept of jobs and the economy is really what's driving most americans to think about what should happen in washington. and the president is trying to say, if we eat our peas now we'll have the dessert later. this is good for the economy. we need to do this. >> every likes eating peas. >> not so much, no. >> and the public says don't mess with my medicare. don't mess with my social security. but they like some features of the idea of shrinking government, of spending less. of trying to get ahold of our deficits. gwen: well, there is no group who is keeping a closer eye on the ups and downs in washington than the republicans running

for president. the trouble is to win the white house, they have to raise the money first. and the numbers don't look so great. far short of where even some of the same candidates were four years ago. mitt romney is still the leader in the money race. where is everybody else, jeanne? >> everybody else is barely in the race. these numbers really were a -- were shocking considering what we are used to in terms of people raising money for presidential campaigns. and it was a wake-up call, i think, for the republicans. and many of the fundraisers out there who are sitting on the sidelines, you know, these were sobering numbers. basically, the three frontrunners for the republican nomination, in 2007, in their first report, that would be rudy ghoul ane -- rudy giuliani , john mccain, raised -- so they are $20 million off the mark.

off pace. from the last cycle. now, they intentionally started late. gwen: and the three you're talkg is mitt romney and ron paul, the libertarian candidate, and who is number three? >> number three would be tim pawlenty. but ron paul raised $4.5 million. that's very good number for ron paul. he's a long shot. texas congressman. great libertarian. following online. but tim pawlenty, the former governor of minnesota, raised less than that. $4.2 million. that number was a real surprise. because he had been working very hard to raise money. a lot of time in may was -- locked away behind closed doors. mitt romney at $18.3 million. way ahead of pawlenty who was supposed to be the alternative to romney. >> jeanne, what's the importance of these reports? if you're not a hard core politico type and watching these closely what does it he will you?

>> first of all, in the past, in typical elections, they use these first reports to show strength. to gain momentum. and so there's always somebody going to come out on top. people knew romney probably would be that guy. even though he came in still $4 million less than what he raised in just 2007. but he is ahead. but pawlenty and the others, this is a breakaway moment. if pawlenty had a really strong number, then the thinking would have coalesced around the idea of ok, it's coming down to a choice. romney, pawlenty. who's the alternative to pawlenty? to romney? that's what huntsman and pawlenty and the other candidates in the race are fighting for. that number two position. right now, nobody's got it. which is a wide open lane for michelle bachmann who is a fast fundraiser and a very good fundraiser. >> jeanne, the republicans are trying to put a positive spin on this saying a lot of the reason the fundraising has been slow is nominating contest

itself has been slow. kind of got off to a late start. well, the obvious implication then is are things going to turn around in the third quarter? are we going to see the momentum shift? what do you think? >> that's where i think in hindsight they will realize they have misclailed. they did start late. none of them announced until april and may. and what they expected to do and -- in that period was to come out with some really good healthy numbers which most of them have not accomplished. so now they go into the third quarter. this is known as a really tough quarter because it's summer. and people aren't around. they don't attend events. it's hard to get in touch with people. the third quarter is very tough quarter for raising money. and then the fourth quarter is even harder because you're in iowa. and you're in new hampshire. and so they've really, i think, in hindsight, may not repeat this. they may start in january. when everybody's at home snow bound, and ready to write a check. >> there have been so much talk about this being the first $2 billion election.

that barack obama himself might raise $1 billion. what do we know about his fundraising? what do we know about whether the support he had in 2008 is going to be there again for him regardless of who he faces? >> it is true that we don't know -- we don't know many numbers. because these are not the official reports. these are announcements from the campaign. so we don't know michelle bachmann's number. gwen: or spending. >> or how in debt they might be but newt demitch gritted he's $1 -- newt gingrich admitted he's $1 million in debt. the obama campaign was $60 million to be split between the d.n.c. and the president's re-election campaign. i think that you'll see that they come in with a very, very strong number which will be a problem -- a new problem for those republicans who have not raised a lot. gwen: and they have said how many small donors they have. >> they did note that they had, almost half a million small donors. and so that was their signal

that their base is coming back. they are getting those activists back. gwen: thanks, jeanne. finally tonight, the sad story of what happens to american soldiers when they decide to take their own lives in wartime. until this week, those servicemen and women did not receive one of the basic acknowledgements of their sacrifice. a letter of condolence from the president. why the policy? and why the change? yochi? >> it's been one of the most painful issues in the military. and the reason why the policy had been in place was sort of fundamental divide between those who said that taking your own life was a sign of weakness. that it was a sign that something along the way, you had failed, the person that took their tone life had failed. that psychological wounds like ptsd and depression weren't real wounds in the way that losing an arm to an i.e.d. or being shot through the leg or a visible physical wound that those were different. what we're seeing because of iraq and afghanistan those views are shifting. that invisible wounds, mental

wounds, psychological wounds, are just as debilitating and in some cases more debilitating than losing a arm or leg. gwen: what is it about these wars that's different from other wars in changing people's opinions about that? >> part of it is the sheer number of tours. you have people going three, four, five, six times to these war zones. and part of the nature of the war itself. in world war ii, you had big battles where the guys to your left and right of you were shooting at enemies. and it was more of a conventional fight. in iraq and afghanistan, you could be walking as has been the case where i've been there, and a person who's a friend of yours suddenly disappears in an i.e.d. you never see the enemy who took his life. a very different kind of challenge. you are constantly afraid of something bad happening. and you never know who the person is who's doing that bad thing to you or the person you care about. >> yochi, does the policy change affect benefits in a way that needed some deep thought and some study and was there debate about that? >> there has been debate. but the policy on benefits has been for the last couple of years to treat them equally.

that a service member who takes his own life, the death benefits that his family gets are the same as if he had been blown up in baghdad. the military funeral, the same with the folded flag, the same 21-gun salute, all of that had been the same. what changes is within the culture of the military. what changes gradually is no longer seeing someone who takes their own life as weak. no longer seeing them as a failure. seeing them instead as someone who suffered grievously from the war and saw that suffering manifest in a very different way than again than a physical wound might have been. >> we keep hearing that what is driving so many of our servicemen to suicide is that they keep getting set back to iraq and afghanistan for tour after tour. is that true? how much do we know what's driving the suicides? >> roughly a third of the third of the suicides had never deployed. it's worth putting the numbers in perspective in part because each number is a person with family, with kids, with parents, with spouses. there have been more than 1,000 troops who have taken their own lives since 2001. which is astounding. and in 2008, the suicide rate

in the military for the first time ever passed the suicide rate, a civilian world, never happened before. each year breaks the previous year's record. so 2009 was 242 suicides, 2010, 301. this year, we're on pace to be well above that. and what we're discovering is that there are three things that seem to be driving it. one, the deployments, the nature of the war, i.e.d.'s, where a friend of yours disappears, and the third and i suspect this will in time come to be seen as the most important the medication of troops. troops are deploying with sedan ax -- with xanax and zymbalta and taking them in tremendous dosages because they're self-medicating. if you're supposed to take three pills of xanax they are taking nine, 12, 15, come back to the states addicted in some ways to these drugs and can't get them anymore. and i think that issue, this question of med taking -- of medicating troops, will be the single biggest driver. >> when we're ready to start

bringing more and more of these soldiers home, and getting out of these wars. if they come home, will rates go down? >> in some ways, i fear it's going to be the opposite. suicide is one of the issues where historically it's been 20 years after a war ends, 30 years after a war ends, that you see a spike from the people who fought in that war. in the vietnam era there was a lieutenant named -- last name was puller and lost both of his legs and both of his hands and a marine officer and wrote an incredible book called "fortunate son" which was a pulitzer prize and his father was a world war ii hero and most decorated marine in world war ii, chesty puller. this man who lost his legs and arms survived for decades, wrote a pulitzer prize winning book and gave speeches about how he survived. then in 1994 he killed himself. so unfortunately, thrs the kind of -- thrs the kind of thing when the war ends these suffering and wounds don't end and the suicides that result from the suffering and wounds will be with us for a long time. gwen: yochi, thank you. the president called it emotional, painful and complicated. i think we see this week why.

thanks, everybody. our conversation has to end here. but it continues online. on the "washington week" webcast extra. where we'll talk more politics and more policy. you can find this at pbs.org. check out our "washington week" summer reading list and good stuff from everybody at this table. keep up with daily developments with me online and on the air at the pbs news however and we'll catch up again here -- pbs newshour and we'll catch up again here on "washington week." good night. download our weekly podcast and take us with you. it's the "washington week" podcast at washingtonweekonline at pbs.org. >> funding for "washington week" is provided by -- >> we know why we're here.

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