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>> this is not another trivial washington argument. i have said that this is the defining issue of our time, and i mean it. i said that this is a make or break moment for america's middle class, and i believe it. >> this week on "inside washington," a special edition. the issues of the 2012 election. >> talk to the people who do the hiring, the employees who want to be hired, and ask them, did the president's policies make things better or worse for getting jobs? >> the number one issue, the economy. why is the economy taking so long? >> what is holding us back is a stalemate in washington between the two fundamentally different views of what direction america should take. this election is your chance to break the stalemate.

>> you look at the president's record, it is long on words and short on action that created jobs. and again, talk is cheap, action speaks loudly. captioned by the national captioning institute --www.ncicap.org-- >> this week, a special edition. we are taking dictation of the independence day celebration to bypass breaking news. also, we took the fourth of july off. [laughter] all the polls tell us that the number one issue was the sad state of the american economy. millions of americans still without work, many without hope of finding jobs. the american dream of owning a home has become a nightmare for many americans. although we have traditionally been a nation of optimists, the

majority of american parents tell us that they think their children will be worse off than they were. >> our businesses have gone back to basics and created over 4 million jobs in the last 27 months -- [applause] more private-sector jobs that were created during the entire seven years before this crisis. >> this president has put together almost as much public debt as all the prior presidents combined. you want four or more years of that? you call that forward? that is forward over a cliff, forward on the way to greece. >> president obama said that the question facing the american voter in november or how we grow faster, how we create more jobs, and how we pay our debts. let's start with the president. what are the answers for those questions, evan?

>> so far, both campaigns are disgraceful, because neither campaign is talking about the real issues. we are not going to create more jobs, we are not going to make the economy better unless we deal with the one great overarching issue, which is the debt overhang. we have lived beyond our means for a long time. neither campaign is willing to admit that. until they do admit it, all of this is just a cheap talk and meaningless. >> how do we answer the questions, mark? >> evan is 100% right about 55% of the time. [laughter] he is 75% right here. i don't think the debt is the end. it is an important and defining issue of this campaign, but you put your finger on it in the opening. there has to be a sense of this is where we are, this is where we are going, which neither campaign has provided.

without the optimism and confidence that have been the hallmarks of american progress at the american character, nothing will be done. nothing will be done until each of them, or at least one of them, addresses the american people candidly as grown-ups. we have not been treated as grownups by either party. >> how does the president do that, nina? >> whoever is president after this election -- i have no real hope for the campaign. i am with evan, it is it is disgraceful. but whoever is president has to make people realize -- if it is is the democrats, there have to be cuts, and if it is is the republicans, there have to be revenue increases. if you look at what is going on in europe, last week they made progress because they actually began to deal with the idea that they have to not only

impose austerity, but have some easing of that as well. you cannot do all all of one and none of the other. there has to be a combination, and neither side wants to admit that. >> charles? >> let me start by admiring your candor in producing the show. we were going to call it the thumbsucking edition, but decided special edition comes sounds better bid unemployment is 8.2, economic growth is 1.7. the problem that this president has in explaining his term is that this is the weakest recovery since the second world war. the democrats will argue that there were structural issues so deep, there was a housing crisis, that therefore it could not have been any faster. you can make all the arguments you want. if you are growing at under 2% a

year, you will not have any improvement in unemployment. you will probably have an increase in unemployment. the administration has to answer that in a way that is credible, and i have not heard a good answer. >> is the president telling the truth when he says the economy's improving? >> he is, in a very limited fashion. campaigns in do matter. whoever wins in november is not going to be able to wake up on january 20 or december 24 and say, "i'd just found out how bad things were." that is not going to be an option. it is and not going to be the missile gap that you found it didn't exist after you were elected. everybody who is sentient in this country knows the problems are there. it is the problem of slow growth, it is problem of unemployment -- >> people sense that they are being lied to, but it is so

confusing. there is so much talk. i can understand how the normal person -- >> how would you framed the argument? >> i would say, look, here is the truth, we've lived beyond our means for a long time. we can get out of date. we are america, the most resourceful country in the world. but we cannot pretend this problem doesn't exist. here are the steps we need to take. >> is mitt romney being fair? >> of course not! he is lying, and obama is totally lying about romney. they talk right past each other 100%. no wonder people are confused. >> also, we are a country that, to some extent, has come to believe we don't have to sacrifice. don't touch my medicare, don't charge me more for it. i don't want to pay anything more for anything. >> it is our society --

>> cut somebody else's program, not mine. >> it is not just politics, it is cultural. you are entitled to everything, your kids are above average, you're always tell how great you are. >> you are a psychiatrist, charles street i am getting depressed. >> i can write you a prescription did it come to me after the show, the thumbsucking edition. >> special edition. >> you talk about how the president cannot say, "i did not know how bad it was." that is obama's argument the last three years. 1.7% economic expansion. that is a disaster. the romney argument is not lies. it is that we conducted a

keynesian experiment and it did not succeed, because it spent all this money on programs, a crony capitalism, and government jobs, which is not the key to growth. that is the major distinction between the policies of left and right, democrats and conservatives. >> while we do all of this equal time of was at fault, i would point out one thing. george herbert walker bush dared to raise taxes in 1991. since that action, 21 years, republicans have not voted for a single broadbased tax increase, and that has become the theology, the ideology, the definition of the party, and that is irresponsible. >> let's talk about the deficit. >> we are told that huge tax cuts, especially for the wealthiest americans, would lead to faster job growth. we recall that fewer regulations, especially -- we were told that fewer

regulations, especially for financial institutions and corporations, would bring about widespread prosperity. we were told that it was ok to put two wars on the nation's credit card. that tax cuts would create enough growth to pay for themselves. >> i believe that is what you were talking about, charles, the blame bush argument. >> it worked in 2008. it will not work in 2012. you wanted to be president, nobody pushed you into it. that is how bad it was, you had four years. the best question of this campaign was rick perry in his 15 seconds -- he said that the question to be asked is a variant of the one reagan asked, "are you better off today than you were $5 trillion ago?" >> a wrecked economy changes politics. in the 1960's, when america

dealt with its original sin on race and adhered to confront what had been a divisive problem of our nation's history, we did it at a time when the gross domestic product of the country was doubling. when that happens, you are by nature more generous, more optimistic. it means giving the chance to somebody else. when the economy goes down, as it has this millennium, for the past 12 years, what happens is it makes us more protective, more defensive, more self- concerned. that accounts in large part for our inability and hostility toward immigrants. basically, the net illegal, undocumented immigration is 0 in this country, but it has still become an obsession with people who are concerned. >> the campaign's do present alternative divisions. the problem is, both divisions are possible and stupid. on the democratic side, let's

return to northern europe from years ago i. t.s. a false image. we cannot be belgium or france from 1992. on the republican side, let's just cut taxes, that will solve the problem. that would drive us into a hole that would create an economic problem that would make this seem like child's play. >> andy kohut -- in all his years of polling, "there is never been an issue like the deficit where there has been such a consensus among republicans about its importance and a lack of agreement on acceptable solutions." >> this all happened at a time when the entire world economy is contracting. even chinese economy is contracting -- >> what is the solution? austerity? >> it is not at exotic. i love how everybody is spinning these abstractions. we have a president -- i know

you guys don't necessarily want to criticize him. [laughter] >> just call him a liar! -- called him a liar! >> evan calls everybody a liar, so he is exempt. we know what the solutions are. you start with entitlement reform. everybody knows that. everybody knows how you cure social security. you could write it on the back of an envelope and give it to you and 20 seconds. this president has done nothing on and entitlement reform, nothing on tax reform. tax reform is the one area where we had in 1986, tip o'neill and ronald reagan -- it is at the 1 area were you expand the base and cut their rates. democrats are obsessed with raising rates. eliminate deductions but lower the rates, which increases economic -- >> the trouble --

>> obama has not touched this, you would agree to that. >> yes, i would. here is the problem -- we live in a democracy where wall street owns congress. >> own it. >> lock, stock, and barrel. you cannot do loophole reform as long as that is the case. >> amen, evan. the dominance of wall street -- one little anecdote. we found out $2 billion was lost by jpmorgan. no, no, it was $9 billion. who has been the archangel of opposition to regulation? jamie dimon, who the president calls one of the smartest bankers we have, as we genuflect before wall street. >> this is our time. we can continue on a path to become more and more like europe, with bigger and bigger government taking more and more

from the american people. directing allies and telling us how to run our enterprises -- directing our lives and telling us how to run our enterprises. we know where that leads. it leads to chronic high unemployment, like europe as, low wage growth, like europe as, a potential fiscal calamity, like we're seeing at the doorstep of europe today. >> we don't mind visiting europe, but we don't want to be like that, mark. >> no, we don't want to be like germany, where median wages have gone up 30% last 20 years while they have gone up 4% in the united states, while they have taken a third world country, east germany, and made them seem as part of the national prosperity. i look at the economy and think there is no way barack obama can be reelected, and then i look at mitt romney i think that there is no way barack obama can lose. [laughter] >> i would love to be germany, but germany has a work ethic

that we do not. and a willingness by politicians to be honest. they were absolutely clear about what this was going to entail, sacrifice. we will give up stock because in the long run it will make u s. >> and don't forget, that is when the world economy was booming. we are not like europe. europe has elections that are relatively quick, where the campaign money is it regulated very strictly. we do not. we canonized chief justice roberts here last week, but he was a vote in citizens united, which opened up a floodgate of cash. >> not to mention of the montana case. >> we have absolutely no idea where much of this money is from, and republicans, who used to be the advocates of that let the money flow and let's

disclose it, now say no disclosure. >> i don't know where to start. we are talking about the necessity of things that would get our economy under control. the republicans proposed a plan that is all spending cuts, but it is serious -- some entitlement reform and tax reform. it is is a lot like the commission that obama appointed and then completely ignored. the democrats and not even offered a budget for years, and when he did was submitted to the house of representatives and defeated unanimously. there is nothing and he that is semi-serious about reducing spending. what i envision is if or republicans win the white house and congress, they will do it entitlement reform and tax reform. in order to get the 60, there would have to be a tax increase at the end.

i can see that happening if you start with a real spending cuts. i don't see that ever coming from the democratic side. >> the secret plan or tax reform -- loopholes are going to be closed. it is all specific in the paul ryan plan, which mitt romney has endorsed, embraced, and moved gingerly away from. but there is no specific loophole that is closed, not one. >> there needs to be a conversation in the election before the votes are cast -- wall street is outrageously in control, but the unions are also batboys on this -- bad boys on this. protecting health care benefits from tax. everybody will have to be honest about all the interest groups -- >> pox on your houses -- the republicans have gone way out on a limb on medicare reform. you may not like it.

it has wyden, a democratic senator from oregon, on board. i put is an idea, supported with ideas from a commission clinton appointed in 1998. what have democrats done? demagogued it and had images of old ladies being run off a cliff. >> governor romney at talking about we have to free up more: oil and more natural gas, i want to take advantage of all this stuff. the president says we are pumping more oil than we ever did, but we need more sources of energy, more environmentally friendly sources. last a better idea on energy? -- who has the better idea on energy? >> the president paid more oil and gas rigs -- the president. more oil and gas rates right this minute than the rest of the world combined. we are actually exporting. >> mitt romney says that if he

is president, we will have a pipeline from canada to hear it if "i have to dig it myself." >> i hope mitt digs it himself. >> i predict that no matter who is president, that pipeline will be billed. > -- built. >> the energy news is mostly good -- >> gas prices have gone down. >> miraculously, given all of our doom saying on this, our dependency on foreign oil is on the right track. the scary part of our fracking is the environmental damage that can be done as we expect all of this gas. nobody knows what the environmental impact will be on our water supplies. that is scary. there is a bit of an asterisk on all of this news. >> he thinks the president has a better idea. >> the fact is that we have

increased our production of oil and it is on state and private lands. on federal lands, there's been a decrease because of overregulation. we are living through one of the great finances in history because of -- in terms of energy -- great bonanzas in history in terms of energy. it is unprecedented and it could supplant entirely the middle east. with keystone, there is no argument whatsoever why be u.s. should not do it keystone. obama collapsed entirely under pressure from his left on that. the argument that somehow if we don't build it, canada is not going to is preposterous. the canadians are speaking with china about having a pipeline west instead of southbridge what this administration is doing with the ecological extremists is precluding the

biggest bonanza in history. epa issued a regulation on the day of hearings of obamacare, which is why it was not in the news, that would shut down the coal industry trad. they are trying to restrain a bonanza which would be essential for economic recovery, that is a funnel the funds between republicans and democrats -- that is a fundamental difference between republicans and democrats. >> i would like to see an equivalent of jack kennedy on and the space program on energy. >> fracking. it is in 200 years -- >> damage to water and so forth -- >> to rockefeller is the senior senator -- jay rockefeller is the senior senator from west virginia, chairman to the

democratic -- is a politician of some standing, just to correct it. i get the feeling listening to charles, which is a joy, that of barack obama ran into a burning building to restrepo widow and her orphaned child, he would say that he did -- restitute a widow and her orphaned child, he would say that he did not enforce the arson laws. [laughter] >> barack obama all the way. just the way he seems to be in touch with people and reaches out to the middle class and lower middle class, and that is who we are. >> i would rather sit down with barack obama to discuss how he is causing real problems for this country. >> what does that last answer tell you about the mitt romney candidacy? >> that people don't really like mitt romney but might vote for him anyway to get rid of obama. >> they are both cold fish.

in this popular stage, everybody is demanding touchy-feely -- this populist age, everybody is demanding touchy-feely -- >> "what street journal" pohl, who was more likeable, obama was up 36% -- >> relative to romney. >> still pu -- steel post, relative to romney -- >> the reality of that poll is that 70% of obama's voters are voting for him. only 1/3 of romney's voters are voting for him. if you have the beer test, who would you rather have a beer with, i think you would rather have a beer with joe biden. [laughter] >> that is not an option. where is obama, 47%? >> 47% operating.

-- 47% job rating. the coincidence is that the job rating is the tracks with the vote as it gets, soviets to increase that. > -- he has to increase that. >> so long as the challenger meets the threshold of being presidential, and we have bill clinton himself is saying that romney does. >> last word. we will see you next week. >> "inside washington" is brought you in part by the american federation of government employees, proud to make america work. for more information about afge and membership, visit afge.org. for more information about afge and membership, visit afge.org.

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