good morning and welcome to "this week." we are beginning to turn the corner. >> the president see encouraging news on jobs. is the economic recovery finally coming to main street? >> i'm really happy to be working again. >> or are we in for a long, tough slog? >> it'll be years before we get the jobs back. >> is president obama doing enough? questions this morning for our headliners, the president's top economic adviser larry summers, and an exclusive interview with former federal reserve chairman alan greenspan. summers and greenspan only on "this week." then behind closed doors. republican party spending at a lesbian bond an nightclub leads to a revolt against the rnc.

can michael steele survive? that and the rest of the week's politics on our roundtable with george will, matthew dowd, democratic strategist karen finney and robert reich of the american prospect and as always "the sunday funnies." >> republicans spent more than $2,000 on a sex club. now there's your stimulus package. good morning, everyone and happy easter and passover. you have to go back three years to march 2007 to find the last time the u.s. economy created as many jobs as were created last month, 3 years. and yet the 162,000 new jobs did not put a dent in the unemployment rate which remains at 9.7%. 15 million americans were still looking for work in march and of those, 6.5 million have been

unemployed for more than 27 weeks and the broadest measure of unemployment, those who have given up looking for a job or cannot find a full time job bumped up do 16.9%. joining me now the president's top economic adviser, dr. larry summers. dr. summers, thanks so much for joining us. >> good to be with you, jake. >> if you remove the temporary census worker job, 48,000 you're left with 114,000 new jobs. big businesses have retained earnings. they are not spending that money on creating new jobs. they're investing abroad, they're buying their own stock. they're buying other companies. why are they not creating new jobs. >> they're starting to. we're in a very different place than we were a year ago, a year ago we were losing 600,000 jobs a month. now the process of job creation has started. we expect that it will accelerate. but we've got to do more to make sure that there's demand in this economy that will create more jobs.

we are in no position to rest or to be complacent just because of this jobs report. that's why the president thought it was so important to sign into law the incentive program two weeks ago that allows the waiver of payroll taxes for companies that hire an unemployed person. that's why the president is pushing for spending on new construction projects, new infrastructure projects. that's why we've got to focus particularly on small business at this point. you know, if you look at the data, the situation with large businesses is serious. but the situation in small business is devastating. that's why the president put forth proposals in december and wants to see congress act on his measures to increase the flow of credit to small business. that's why it's so important that we're seeing a big increase, more than 10% in the tax refunds that americans are

getting this april which will put them in a position to spend more and start that process of job creation. that's why it's so important to have passed health insurance, which is going to give a tax credit that's actually retroactive to january to small businesses. we've got to do everything we can to provide the incentives to create the framework for more job creation in this economy. we cannot rest where we are. >> now, you said that you think it's going to accelerate. you guys have been touting a bar graph showing job losses during the previous administration, job gains since the stimulus passed. do you see that progress continuing or can we expect that there might be some dips even into negative job growth in the coming months? >> jake, the numbers fluctuate from month to month and no good business runs itself based on

every weekly or monthly fluctuation and the president's focus is on building a stronger economy, so we don't have debacles like the last couple of years again. >> so there might be some dips? >> but my expectation would be that the trend is going to be upwards. we talk a great deal to businesses. we monitor all the statistics and the steps that the president is taking should bring about an increased level of employment. but, look, we don't have enough in place. that's why the president has put forward measures to the congress for the credit for small business, for incentives that will let people spend money and put people to work retrofitting their homes to make them more energy efficient, to preserve jobs on the front lines for teachers and for policemen. what happens will depend on

choices we make and there is much more that we can do and the president is pushing for the adoption of those measures, even as we focus on implementing and continuing to implement the strong set of measures in the president's recovery act. >> where do you think we'll be in september? are we still going to be at 9.7 unemployment or is it going to go down a little? >> you know, the good news is that if you look at what's happened in the first quarter, this year, it's hardly satisfactory, but it is running somewhat ahead of what the administration was forecasting because our forecasts were conservative and i'd expect continued progress in job creation. as you see progress in job creation, you tend to see unemployment go down. it's not quite as simple as some people think, jake, because as conditions get better, more people decide to look for work

and are counted as in the labor force, so sometimes it's frustrating and the progress doesn't show up immediately in the unemployment rate, but it's progress nontheless in giving jobs to people who need them. that is what is the president's top economic priority for this year. you know, all of us. the president talks about this with us each week. the letters that he receives from the families where kids are worried about whether their parents are going to be able to hold on to their job. >> if i could -- >> that's why we're so focused on the job issue. >> there are a lot of members of congress concerned about jobs because of china, the manipulation of currency by china. the obama administration had scheduled a semi annual report to congress on currency in which it was going to state whether or not the obama administration believes that currency is being manipulated.

that report we learned this weekend will be delayed. is it going to be delayed because the obama administration needs china's cooperation on other things such as sanctions against iran? >> no. >> that's not the reason. >> it's being delayed because that's part of our international economic dialogue which is directed at supporting a crucial issue for jobs creation, doubling our level of exports and that depends on what other countries do. we've got three major meetings, a meeting of the g-20 finance ministers, our strategic dialogue that takes place every year with china and then the president's meeting building on the form he created in london, in pittsburgh last year of the g-20 countries. those are opportunities to engage with china to engage with other countries that have large trade surpluses, other countries who think they can continue to rely on the united states as an importer of last resort and

secretary geithner's judgment and i think it was the right one was that we could report and recommend to congress in a much more effective way after we had had those meetings and taken stock of what kind of measurable progress we were able to generate out of those dialogues, but, look, at this point, given the seriousness of the recession that we have been through, given the number of americans who are out of work, the economic issues have to be at the center and will be at the center of our diplomacy. >> okay, the president has said he wants in the next few weeks he wants the senate to pass financial regulatory reform. first of all, just quickly, do you guys have the 60 votes to pass senator chris dodd's bill on financial regulatory reform? >> i expect that reform is going to pass. it's not easy.

you've got a million dollars being spent per congressman in lobbying expenses on this issue, industry has four lobbyists per member of the house and senate working on this, but the case for basic consumer protection, the case for regulating institutions that are able to bring the economy down and not leaving them completely unregulated, the case that we've got to be able to handle the failure of an institution without a major bailout through so-called resolution authority, the case that we can't let institutions choose their own regulator and play one regulator against another to reduce standards, that case is so compelling that we are confident that a sufficient majority will see that case and will vote to

support financial reform. we've come a long way on this issue. we're now in the final stages and our expectation is that we will get there and there's no question, i mean, how can anyone take the position after what has happened, after -- it's not the first thing that's happened. >> sometimes -- >> that we don't need -- that we don't need comprehensive financial reform. work on the details but not compromise on the principles. >> some democrats say it doesn't go far enough. here's delaware democrat ted kaufman talking about the dodd bill. >> unless congress breaks up the megabanks that are too big to fail, the american taxpayer will remain the ultimate guarantor of an almost certain repeated cycle of boom, bust and bailout. >> senator kaufman saying there isn't enough being done about too big to fail. in 2000 you said it is it is

certain a healthy financial system can not be built on the expectation of bailouts." can you honestly say the dodd bill changes that. >> yes, i can. it reduces the expectation of bailouts by insisting institutions have much more capital so they won't need to be bailed out. it eliminates the prospect of bailout by creating a framework in which a failure can be managed with creditors taking responsibility. it restricts and this was the important point that former fed chairman paul volcker has stressed, it stresses the proprietary activity, some of the risky activities of these institutions, so, yes, this bill is a direct attack on too large to fail by making failure a possibility as it has to be in a market system, and by making these institutions much safer and much sounder.

senator kaufman is exactly right. >> lastly, we only have a minute left, but there have been reports lately that you're thinking of leaving. i know you've said that the reports are not true but are you committed to staying in your current position throughout at least november 2012? >> jake, you know that in this town when it comes to personality stories, usually it's the case that those who talk don't know and those who know don't talk. >> well, you know -- >> i am having an enormously satisfying experience working with this president and that's what i'm committed to doing and serve at his pleasure. >> until november 2012? >> i serve at his -- >> assuming that he would like you to serve -- >> i serve at his pleasure. i don't get into hypothetical questions. i'm having an enormously satisfying experience >> all right, dr. larry summers, thank you so much. >> thank you. joining me now the former chairman of the federal reserve

dr. alan greenspan. dr. greenspan, thank you very much for joining us. >> pleasure being here. >> i know that you agree with dr. summers that jobs will continue to -- job growth will continue to accelerate. do you think it will accelerate enough it will make a dent in unemployment, that is, that we see the numbers of 300,000 jobs created a month as opposed to 100,000 which is treading water basically? >> i'm not sure but i don't think it's impossible by any means. there is a momentum building up, which is really just beginning and it's got a way to go. there's certain critical issues here, first, we have to remember that the capital gains on 401(k)s are $600 billion, and as we saw when money was being evaporated in those particular accounts, people pulled back their consumption. they're now moving forward in a more positive direction. secondly, capital investment, which had been extremely depressed, is still depressed for real estate but equipment is

coming back in a fairly substantial way. but most important of all is this incredible increase in the difficulties -- i should put it this way, the increase in the lead times that it takes purchasing managers to get new materials for inventories. what that necessarily means is that they're going to have to build inventories to protect their production lines at an ever-increasing pace. and that is a self-reinforcing cycle, so i think the particular area of the economy which people are not putting enough -- i should say enough focus on is how significant this rebound of inventories is going to be after such an extraordinarily dramatic decline that occurred through all of last year. remember, as of now, inventory

change is zero. the level of inventories is at the absolutely low level, and all of the people who are in the business to see what the tightness of markets are are saying effectively that there's a shortage of inventories out there and we're on the edge of a significant buildup. >> as you mentioned real estate and i've heard a lot of economists talk about their fear of the commercial real estate bubble popping. how concerned are you by that? >> well, i think it's already popped in a sense. i mean, real estate prices generally are down almost 50%, and they've come back a little bit. >> i mean the kind of crisis that we saw with subprime housing, personal housing. >> yeah, yeah, with prices already down and adjusted, if we were going to get severe secondary reactions, they would

have likely would have occurred and they would have occurred if it weren't for the fact that the rest of the economy is showing some degree of buoyancy. >> dr. summers didn't answer the question but i did wonder your thoughts on whether we can expect if there is accelerated job growth whether you think there will be any dips in that including into negative job growth or you think it's going to be a straight line. >> you know, month by month? >> yeah, month by month. >> i suspect it's month by month. i mean it's -- statistical aberration possibly, but the momentum is very clearly there and i doubt very much that we're going to run out of that momentum until very late in the year. >> so no double dip recession? >> i think the odds of that have fallen very significantly in the last two months. >> the president signed massive health care reform legislation into law a few weeks ago. you have expressed concern about the legislation as it was making its way through the process about whether or not it did enough to contain costs.

what did you think about the final legislation? does it contain costs enough? >> well, the cbo incidentally, congressional budget office, which is really a first-rate operation, says that it does. the problem is not their estimates, but the range of potential error in those estimates. and when you're dealing with an economy in which debt is becoming -- federal debt is becoming ever increasingly a problem, it strikes me that when you're dealing with public policy and you're in a position where you have to ask yourself, what happens if we are wrong? in other words, in the case now where our buffer between our capacity to borrow and our actual debt is narrowing for the first time i think in the american history, there's a question supposing we are wrong

on the cost estimates and, indeed, they are actually much higher than the best estimates can generate, the consequences are very severe. whereas, if they are too high, it's very easy to adjust. so i think it's -- there's an issue over and above the question of what's the best cost estimate, there's a policy strategy here, which i think requires us to lean in an ever-more conservative area with respect to judging these. >> it might have been too rosy, the projections, you're saying? >> possibly. i don't know that, but i do know that the probability that it might be is much higher than we would like. >> you have said recently that if institutions are too big to fail, they're too big. do you support the volcker rule which would limit some of the transactions that commercial banks can do? >> oh, i think the point that he is making that deposit funds which are subsidized should not be employed for speculative

purposes, i would agree with. the problem basically with the volcker rule is it's very difficult to apply in a general way and i think that's why there's been considerable resistance to it. not the principle, but the issue of being able to segregate the types of transactions which are helping customers and those which are strictly proprietary and until they do that it's difficult to implement. >> you'll testify about the financial crisis on wednesday before the financial crisis inquiry commission. when you testify before congress in october, you said that you finally saw a flaw in the way that you looked at markets, that markets cannot necessarily be trusted to completely police themselves. but isn't it more than a flaw? isn't it an indictment of ayn rand and the issue of laissez-faire capitalism can be functioning properly that markets can be trusted to police

themselves. >> not at all? >> i think that there is no alternative if you want to have economic growth and higher standards of living in a democratic society to have competitive markets. and, indeed, if you merely look at the history since the enlightenment of the 18th century when all of those ideas surfaced and became applicable in public policy, we've had an explosion of economic growth and especially in the developing countries where hundreds of millions of people have been pulled out of poverty of extreme poverty and starvation basically because we have competitive markets. so it's not the principle of competitive markets, which really has no alternative which works, it is a strict application as i presented in a brookings paper fairly recently and it's somewhat technical area, the major mistake was assuming what the nature of

risks would be and the reason it was missed is we have had no experience of the type of risks that arose following the default of lehman brothers in september 2008. that's the critical mistake, and i made it. everybody that i know who works in this business made it, and it means that basically we have to work our way back to understanding what we're under and i argue what we immediate is far more required capital for financial institutions. >> right. >> than we've had. >> there is as you know, michael burry who is a hedge fund manager in california who made a lot of money looking at the subprime mortgage situation in the previous years and saying to himself, this is crazy, it can't continue and he bet against it and made a lot of money. you were asked about it last

month and you referred to him as a statistic illusion. he has an op-ed in today's "new york times" in which he questions whether or not you should be taking him more seriously and he says "mr "mr. greenspan should use his substantial intellect and un surpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat. if the mistakes were properly outlined that might both inform congress' efforts to improve financial regulation and make miggs takes." again, why aren't you more interested in hearing what he has to say. >> on the contrary, i was not referring to him specifically. there are three key groups of people. those who got -- those who got it wrong about what the complexity was about to emerge in -- that's the vast majority of people, myself included. then there's a group, a relatively small but not negligible group who got it sheerly by luck and then there's

a very small group, most of whom are my friends who got it right for the right reasons and have done it time and time again. i don't know mr. burry, but he basically may very well be in that third group. i don't know that, but the problem is he in that article which i read quickly this morning is actually making the case that it's a very small group because he says effectively but no one agreed with him. well, he made his money properly in my judgment and i think very successfully by effectively selling subprimes short. now, if nobody -- >> he was betting against subprime mortgages working. >> exactly, and if everybody agreed with him or a large proportion of people agreed with him he wouldn't be able to sell those contracts, the short contracts so to speak which works through technical jargon,

there would be thob to buy it because they would agree with him so it required a very large proportion of the investing public, sophisticated investing public to disagree with him, and i think -- i don't know whether or not he is in that extremely small group which may, this fact, be really exceptionally adroit at these things. as i said a minute ago, i know four or five people who are really good. i don't know six, seven, eight or nine. >> all right, dr. alan greenspan, we'll have to leave it there. thank you so much for coming and talking to us. the roundtable is next with george will, matthew dowd, karen finney and robert reich. later "the sunday funnies." hey, guy, baseball season starts next week and president obama is going to throw out the first pitch at the nationals game. meanwhile, joe biden will be on hand to make the first error. ♪

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and coming up next the roundtable and "the sunday funnies." , the roundtable and "the sunday funnies."

the republican national committee approved nearly $2,000 in expenses at this west hollywood sex-themed nightclub. >> one person who was not there was michael steele. >> the people involved had really bad judgment. something that should not have happened on michael's watch. >> somebody ought to use their credit card. pull that and find that pervert and get his card. >> find that pervert and get his card says karl rove. we'll get to michael steele and the rnc in a second. first we start with jobs and talk to our roundtable, george will, as always, matthew dowd,

former bush strategist, robert reich from the university of california-berkeley, that's a mouthf mouthful. say berkeley and former democratic strategist or current democratic strategist, former democratic national committee spok spokeswoman karen finney. thanks so much for joining us. george, the president is encouraged by the jobs number. are you? >> he's easily encouraged. the economy began to grow nine months ago the usual pattern since the second world war a sharp downturn is followed by a sharp upturn. takes more than 100,000 jobs to stay even because of immigration and the workforce. of the 162,000 subtract maybe 110,000 just to cover natural growth then subtract 48,000 temporary census workers and what you get is nine months into a recovery essentially no meaningful job creation. furthermore, the average unemployment today is 31 weeks. much the highest since that record began to be kept in 1948. >> matt, this -- it was positive

news. it might not have been as positive as some would like or all of us would like but it was positive news. is it good politics for democrats? >> well, it was positive news. obviously job gains, to matter how small, are better than job losses. the problem is the country doesn't believe there's good news right now. they have a total disapproval of the president on the economy, which is a really big problem he has going into the midterm elections let alone going into 2012. they don't believe their own finances have recovered. decent see any private sector jobs got created even though this is the first time some got created and the other political problem he has is of all the 51 jurisdictions in the united states, the only jurisdiction that is actually gaining jobs in a year is the district of columbia and in the public mind that is not necessarily a good thing. and so i think it's still a huge political problem for the democrats. i don't think they have time for any real meaningful economic growth to happen to change the

public's view on confidence in the economy before the midterms so i think it's still a huge albatross around the democrats' neck. >> bob, the summers and greenspan seem to be rather bullish but there are economists who feel like we still might be headed towards a double dip recession especially if stimulus money runs out. are you concerned? >> there is reason to be concerned as stimulus money runs out and as the federal naturally tightens because they have to reduce the money supply and raise interest rates at some point otherwise there is going to be a fear of inflation out there. that you don't have enough demand in the system to keep any kind of aid recovery going. and i agree with george on this. this is not a recovery yet. people are right now very scared, understandably of getting their jobs back and even when you have a full-fledged recovery of 2 million a year, think about how far behind we are. that's 5 five years before we even get back to where we were before the great recession started. >> yet, karen, you feel like

this is good news for democrats as the midterm elections approach? >> well, i think it gives democrats at least the starting point for a narrative they can go to the american people and talk about job creation and the president can talk about tax cuts for small businesses towards hiring. we talk about the hire america act and one of the problems that the republicans have had they don't have a consistent narrative that they can talk about beyond the policies of george bush as to what they want to do for the economy moving it forward so at least democrats have something to hang their hat on. i agree that these numbers are, you know, cautiously optimistic and we need to see better growth but it gives democrats something to talk about heading into 2010 and some accomplishments to tout whereas again i think all you're hearing from the gop, it sounds a lot like what we already tried that didn't work. >> take a look at this number. we have these polls from gallop that indicates that for the first time in several years republicans actually lead democrats when asked who in

congress would do a better job with the economy. republicans leading democrats for the first time in several years so even if republicans aren't making the arguments that you think would be compelling to the american people, the fact is the voters seem to be turning towards them. >> you know interesting was at the dnc and actually we were about even with democrats democrats were poised to take over control hous and say that sa that there's a long time be and nomber o certainly i think it is a good thing that the president has been out on the stump talking about and starting to tout some of t accomplishments and trying to sell these programs. i think he didn't do that early enogh ankl wit the stimulus i think they recognized. there's a lot that can happen. we'll see. the democrats are in i think. the republicans don't have to have a proactive message to win elections. the tha is a fine in the

short term. more affirmative message. the problem the president has had the economy lost 4 million private sector jobs since he's been in office. we won't gain back -- i will love for it to happen -- that in any distant future to gain that back so the democrats who now have an unpopular health care package that they now don't have time to sell before the election and probably want 0 get off it as soon as possible, an economy where the public thinks they are not performing well on. the only interesting issue that the president seems to be doing well over the republicans on is terrorism which is actually a reverse from what it was four or five years ago when the president, president bush was behind democrats. now that the economy is the dominant issue democrats are behind. >> look, the key point i think of the democrats are hoping for this is that despite the high level of unemployment which is almost inevitably going to be with us going into november and possibly also with us going into the general election that the direction is correct and that

the public is looking and will look more at the direction of the economy than at the absolute level of how bad it is. we don't know. we don't have data because we haven't been here before as to whether that hypothesis is correct. >> but economics, bob, is always a science of single instances, that is, you only need economics as a science particularly urgently when you're in a situation you've never been in before. so we are at sea here so we look around for what we can predict. you predicted interest rates will not be zero forever. when they change they will go up somewhat adverse to growth. what else will happen in less than nine months we have a huge tax increase hits the economy as the bush tax cuts expire. that's not going to be helpful. >> that tax increase is only on the people who have only $250,000 or more in earnings. and let me just say demand in the economy, where it comes from the is middle class people who are earning anywhere between $40,000 and $90,000 a year, they have been hit extraordinarily hard.

they will not get hit hard by a tax increase. their medical bills will be lower and hopefully they will feel a little bit more confident. >> which to say most affected by the bush tax cuts will still get the bush tax cuts is what you're saying. >> if i can move on. one thing they're worried about at the white house this concept of hyper-efficiency. the companies have shed jobs and learning how to function without these employees, which might mean even more prospect of a jobless economy. how concerned are you? >> i'm very concerned. this is the long-term problem and it's a problem for democrats, republicans, for americans, for middle class, you see, as globalization has preceded and as technology change has preceded, many americans without the right skills and most americans, you know, they have college degrees, most americans have high school degrees but nobody everybody has a college degree nor should they. you see, we don't have the skills we need to keep up in a global economy and, therefore, when the dust settles, maybe

people will have jobs but they're not going to have very good jobs. they have priced themselves out of a global economy and that is going to lead to even a wider gap between people at the top and average working americans. >> bob mentions globalization. one of the most fascinating developments in recent months was the announcement this week that in march general motors sold more, a lot more cars in china than it did in the united states. >> that's where the big companies are doing. big companies are doing well globally. they arary not doing well in the united states. they're hiring like mad abroad. they're not hiring in the united states. and we are beginning to see now something that some of us predicted years ago and that is a really decoupling of the strategies of big companies, big global companies headquartered in the united states from the american economy. >> one other thing i wanted to ask before we take a turn to michael steele's job, which seems to be at issue, i could almost hear your teeth gnashing in the green room when i was

interviewing summers and greenspan on the subject of financial regulatory reform. >> well, look, the fact of the matter is that alan greenspan and larry summers and rob rubin all, if any trio were responsible for deregulating this financial economy, whether you're talking about getting rid of the glass steele act that separated commercial banking from investment banking or you're talking about saying to brooksly born at the trading commission, no, you may not regulate derivatives, it's those three. >> and those two moves, the obama administration is looking to undo. they want to regulate some derivatives and want to put a wall between commercial and investment banking activities not to the degree that existed before. >> now, this is my worry. everybody is enthusiastic or everybody who says that they're looking at financial reform is enthusiastic about doing something about the too big to fail problem but when it comes right down to it if you look at the details there is nothing in

the hopper right now that will fundamentally change the situation so that five or ten years from now you don't have a few big banks making wild bets with other people's money and then expecting to be bailed out by the federal government. >> okay, i want to move on to the republican national committee and michael steele's job. tony perkins who is the head of the conservative family research council is now telling republicans and conservatives, don't give money to the rnc. here he is. >> what appears to be excessive spending at a time of economic hardship for most of the country at a time when republicans are complaining about the spending in washington by democrats, look, if you can't run a party you certainly can't run a country. >> george, is this the right job for michael steele? >> no, he is fundamentally misconstrued his job which is to the face and ideological spokesman for the republican party. there are a lot of people who do that. the best party chairmen are like major league umpires. at the end of the game they go back into the dressing room and

no one has noticed them they've done their job brilliantly. they strive for forms perfection and that should be the role of the party chairmen. the best, ray bliss of ohio who rebuilt the party after the goldwater meltdown, bill brock, former senator from tennessee who built the party up on the eve of the reagan triumph, they were perfectly anonymous. and i'm not sure that this man has understood that. >> you know, obviously i'm not a rocket scientist but when you have lesbian bondage strip club associated with your name it's never a good thing for anybody unless you're employed at the strip club. you know, the only difference between democratic officials at a strip club and republican officials at a strip club is democratic officials say hi to each other. i think the problem is hypocrisy. it's purely hypocrisy. republicans go out there and talk about fiscal responsibility and they talk about family values and they have a party leader and party officials who go to a strip club who are involved in this process that

say that their private actions or their actions with donors' money doesn't match what their message is. that's the problem. >> in addition to this problem, tell our viewers what american crossroads. >> is american crossroads is an organization that is being formed by republican party stalwarts like karl rove, joanne davidson, former co-chair of the rnc, ed gillespie among others, essentially with the goal of raising money to support candidates going into the next election. >> it's a shadow rnc. >> exactly so when you have -- you know, this is really not about the strip club expenditures. this is about a chairman who doesn't understand his job and when you are the party out of power your job is to raise money to win elections and build the party infrastructure. on the one hand when you talk to folks at some of the other republican committees, sure, well, will the money help from the shadow rnc, yes. but you need a strong rnc during a midterm election to do the ground game and to do g.o. tv

activities. it is embarrassment for the republican party to have to talk about an expenditure. it's not just about going to strip clubs but when michael steele walks into a room with a donor and asks for a big check and that donor is looking at travel report with travel on jets and limousines what am i giving you the money for? >> there's obviously a kind of an off-message problem here for the republicans. and when you talk about hypocrisy, yes, but that's not something new in this town. i think there is a larger -- >> which is why this town's ratings are so bad. >> i want to get to that because i think that voters and it's not just tea partyers, voters all over this country right now are saying as they've said before but i think with a greater sense of commitment and intent right now, they're saying the establishment politicians just don't get it. they don't know where we are. they don't understand what we're suffering with regard to unemployment or the economy. they don't understand fiscal responsibility.

they don't get anything that we are talking about in our families and among our friends and this is bad. it's bad tore democrats. it's also bad for republicans. >> well, i agree. i think the big -- >> big companies. >> the problem is this total lack of public trust. the public has a trust in washington whether republican or democrat. whether you have corrupt scandals with charlie rangel who have come off republican scandals and new republican scandals which is why the congress as a whole is rated at the lowest point it's ever been rated. president obama's number are dropping. there is a lack of total trust in the institution of politics in washington. >> washington is just totally out of keeping with america. >> of course, it is, but there is a deeper problem that the rnc has. let's be honest at a time when you have the first african-american president and the first african-american chairman of the party of a party with a very dwindling base you

may be able to win race-by-race with the tea partyers but you cannot win a national election if you can't bring in a broader coalition of voters. privately people have admitted that, you know, this is not the first time michael steele has been an embarrassment, privately people have admitted part of the reason in addition to the technical aspects of two-thirds vote to vote him out he's an african-american and you have to be very careful about what signal does that send if you were to remove an african-american at a time when the base of your party is dwindling. that is a longer-term problem than simply going to a strip club or spending money on jets. >> liabilities that they have and their lack of a real strategiary their lack of a real problem. the interesting thing to me, granted all those things they're going to pick up 25 plus seats in the house this year. they're going to probably pick up five or six or seven in the u.s. senate and pick up governors' races. as of right now barack obama could not get re-elected based on his approval ratings and based on history so republicans

have all those problems. democrats have a bigger set of problems because they own the levers of power in a town at a time when people are fed up with it. >> i don't think that is right. if republicans have an alternative whether it be health care or the economy, and americans really understood that there was an alternative and republicans were articulate about advancing that alternative, maybe you would be right, but i don't remember republican party that was just as consistently negative about everything. the public knows that there are deep problems that have to be faced and republicans are -- >> george, let's bring you in. you were shaking your head. the republican party, you don't buy they're perceived as negative on everything. >> i would set up congressman paul ryan of wisconsin's road map for tax reform, job growth and entitlement -- >> you embrace that more than john boehner. >> that could well be. i'm right and he's wrong, but i would set this against all the so-called ideas, these recycled great society new deal ideas of

which my friend bob is so enamored. >> change one topic. it's i will admit an uncomfortable topic on this easter day but we have two catholic roundtablers here from opposing points of view politically and i want to talk about the fact that the vatican is having some serious trouble right now on this easter sunday. a cardinal today diminished the criticism or disputed the criticism against the pope saying it was gossip. matt and karen, i'd love to hear your thoughts on this. karen, where is the disconnect between rome and american catholics in the pews today? >> you know, rome is doing what it has done for centuries and that is it's po texting itself and i think the disconnect is that in rome the vatican is treating this as a crisis for the institution and not a crisis for the faithful. you know, the mission of the church is to serve the faithful and to serve the innocent. not to leave children to be preyed upon by sexual predators and that is essentially what is

happening. that's what's happening in the united states. now we're learning that it is a much bigger problem and so i think this is -- i will be going to church after this show today and i go to church with a very heavy heart. this is a real crisis of faith for many of us who are questioning what is the mission of the church if we can't protect children from within our midst? for american catholics, look, the catholic church in america has a very different political reality to deal with than the vatican does so i think you've seen this past weekend some of their statements is they're kind of trying to figure out how to deal with their political reality in the united states, recognizing that they can't quite totally come out against the pope in rome. you know, the catholic church has wielded a lot of power in this country and now that american catholics are having this crisis of faith that did a real challenge to the power of the church. >> we were talking about poll numbers about the pope and the fact that actually his

unfavorables are going up and undecides are increasing. >> yeah, his numbers today, an approval of how he's handled this if you're a pr person they handled it worse than toyota handled their recall situation and further worse characteristics. i was an altar boy, went to catholic school, went to catholic college, to me there is a ton of great, wonderful priests and bishops and i think the pope has tried to handle it in a forthright way more so than john paul did and the problem, i agree with karen, the problem it's an institutional problem. it's an institution that in my view has grown so big and so unwe wouldy and now only feeds itself. only serves to feed its own self and forgot about the flok, the billion people out there that are catholics, what christ's mission was which was not to create an institution based in rome that serves -- that is only there to serve the priests or serve the bishops but to is serve the flock so at a time of easter, i believe that we have to have some serious renewal of

that institution in many ways like it happens 700, 800 years ago during the protestant ref for race. today it is an entirely huge institution. >> i know the roundtable will continue talking in the green room. you can watch that on abcnews.com and you can get political updates all week long by signing up for our newsletter also on abcnews.com. coming up, "the sunday funnies." energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are ur families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron. that while you may come from the same family... you know, son, you should take up something more strenuous.

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and now "the sunday funnies." >> when you think about that first tea party, shoot, some may claim that john was there at that first tea party meeting. >> jesus, lady, he asked you for help. it's a rally. not a roast. >> president obama unveiled the new gas mileage program that he says is like taking 58 million cars off the road for an entire year or as toyota calls it business as usual.

>> rnc spent $2,000 of the republicans' money at a west hollywood bondage-themed nightclub featuring topless dancers imitating lesbian sex. finally the republicans and democrats have found some common ground. i knew -- i knew they would come together. i knew it could happen. >> i thought, it makes perfect sense they would end up at a bond damages -- they love tying things up, health care, climate control, financial reform. >> we'll be right back. and all you can do is take a snapshot of the way the road looked 5 minutes ago, how would you know when to cross the road? 9 out of 10 organizations still make decisions this way every day... using out-of-date information. the organizations that are most competitive are going to be the ones that can make sense of what they learn as fast they learn it. that's what i'm working on. i'm an ibmer. let's build a smarter planet.

that's our show for today. thanks for spending part of your sunday with us. happy easter. we'll see you next week. z?ro