gwen: reality check -- the president in russia and in rome at home. plus, palin 2012. why it might yet happen. tonight on "washington week." meeting popes and presidents -- it's all part of the job for any u.s. leader. >> we've not agreed on every point. but we've shown it is possible to move forward and make real and unprecedented progress together. gwen: still, from climate change abroad to economic and health care fixes at home, the president saw more hurdles than hoorays this week. >> the truth is there was a misreading of just how bad an economy we inherited. >> rather than say misread, we

had incomplete information. >> now, this is the greatest fabrication i've seen since i've been in congress. gwen: are health care and economic stimulus off track? and what can the president do to get them back on? plus the week's political mystery. >> i'm not going to close any door that may be open for me out there. gwen: is sarah palin's political career over or just beginning? covering the week, doyle mcmanus of "the los angeles times," ceci connolly of "the washington post," deborah solomon of "the wall street journal" and james barnes of "national journal". announcer: celebrating 40 years of journalistic excellence, live from our nation's capital, this is "washington week" with gwen ifill, produced in association with "national journal." corporate funding for wolfpack swook provided by -- >> we know -- for "washington

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station from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. it's one of the perks of the office -- jetting off on air force one, visiting palaces and daschas and castles, even taking the kids along. but don't think for even one minute that it's a lot of fun, because everywhere president obama went this week, he discovered there was not one single magic wand to be had. so whether the discussion was about nuclear weapons in iran or climate change around the world, the american president came away with a little less than he hoped. so was that a reality check for the any president, doyle? >> gwen, every honeymoon comes to an end one day. last year when he went overseas, the streets of european cities were full of people who were in love. every other head of state wanted to get into the picture with him. this time it was a little

different. he went to russia. had some tough meal -- meetings. went to italy, had some meetings that made modest progress on a couple issues, and we discovered that charm is great, charisma is great, popularity is great, but other countries have other interests and they're going to stick with them and that barack obama at the end of date is going to have to could his diplomacy by hard work and blocking and tackling like any other mere mortal and it's just not going to come easy. gwen: so by the end of the week, what did he get and what didn't he get? >> well, let me take iran because that was the number one issue for the obama administration of the whole week. we can look at other pieces of it too. on iran, if you want to know what did they really want, they wanted to move the russians a little bit. ne -- they wanted to get a hearing for their bid that the russians have to be tougher and

sanctions gwen: because of its nuclear weapons program? >> because of its, iran's nuclear weapons program. and because of the domestic troubles and the regime is walling itself back in. no sign of medvedev. came out before the summit and said look, iran is our partner, we think sanctions are a bad idea. move the picture to the g-8 summit and there the united states and allies britain, germany and france wanted a tough statement about iran and again, couldn't do it. couldn't get the russianes to sign on the they got an ok statement that said iran should take this chance for diplomacy and that we will come back and reassess in september. that's about as tough as it got. >> i'm wondering now that we've seen president obama in a couple of these overseas gatherings and assignments do

we have a better idea what his style is when he's outside the u.s. and up against these heads of state that have very different interests? >> i have two impressions from watching it from afar. i wasn't lucky enough to be on this trip, i'll confess that right up. one is he underplays the charisma a little bit. when george bush went to moscow he tried to make a big gale of the personal bond with putin. reporters asked president obama if there was a personal bond and he said "this is all business." no personal bond stuff. the second thing, he's an activist president. he's as interested in doing his own thing and putting points on the board as -- and taking the initiative overseas as here. he makes that joke, about health care, it's not as if i don't have enough other things to do. well, he has that nuclear

initiatist he's going to have a summit in the united states next march on nuclear security. this is stuff he doesn't have to do, but he's as passionate about the foreign policy areas as the domestic areas. >> i'm curious what you think about this discussion with iran. how worried is the president that they may not take him up on that offer? >> he did talk with it. we were told it was the dominant issue certainly on the american side. part of the problem is the russians, it's not their dominant issue. but yes, tace worry. here's basically the scenario the iran if anything is being less cooperative, not more cooperative because of its domestic tumor oifment the western countries are trying to get iran into the negotiations. iran appears to be stiffing that offer. they calm -- come back in

september and at that point the major powers are going to try to get more sanctions but russia and china are still saying no. so you not only have the confrontation with iran, you have that road block looming in september. >> before the president went away on this trip the white house made a big push to get climate change legislation at least passed through the house. they thought this would give them a little leverage dealing on the national stage. the president went to the jay payton summit, seemed to have come up kind of -- g-8 summit, seemed to have come up kind of short. what happened? >> that was one of those glass half empty things. many the hope was you could get the g-8 countries together in this larger group that was about the g-20, g-15 -- it kept being different numbers -- but

you could get the industrializing countries to sign on to tougher targets. they signed out, wouldn't do it. so at the end of the week the older industrial democracies did sign on to tougher targets but it's on a 40-year timetable, not very binding. >> gwen: ok. thank you, boil. by the end of this week congress was supposed to have made real progress in the house and the senate on health care legislation, but when the cat's away -- well, you know the rest. everywhere one looked this week, the administration plan to get health care reform done this summer got caught up in yet another brush fire. what is the problem, ceci? >> you mean that cat obama, right? gwen: yeah, that cat. >> well, the problem was we were exposed to legislative sausage making and as everybody here knows, that is not a pretty sight. what we have seen week after week now this summer is as you get closer and closer to having an actual bill on something as

complicated as health care, something that is 1/6 of the u.s. economy and the lawmakers start looking at the specifics, they don't like them. you saw on the house side, several rump groups of democrats going to speaker pelosi and saying you don't have enough cost controls in the bill, or we've got a problem if you might possibly fund adorgs -- abortion services somehow through this new health exchange. these were her own democrats. so they had to say let's take a pause, not going to bring the bill out quite yet. maybe next week. they also had a lot of difficulty finding the money to pay for health reform. same thing in the senate. harry reid went to max baucus, the finance committee chairman who's been trying to put together this bill and said listen, there are democrats in the senate who don't like the idea of paying taxes on your employer-sponsored health care

benefits so you've got to go back and find $320 billion. gwen: am i confused or does it seem like all the fights are happening within the democratic caucus? >> yes, that's good news-bad news for democrats. we know it's hard to keep those cats all herded together, especially in the democratic party and it also shows us the republicans have largely been on the sidelines in this debate. some of it is pure math up there on where the votes are. in the senate there are a handful of republicans still involved but largely on the periphery. >> for weeks now all kinds of pundits have been saying for this to work, barack obama is going to have to come in and herd those cats. harry reid, nancey pelosi, this is too big a lift for them. any sign that's going to heap -- help? >> yes, in a sense that president obama and his aides would say look, we have been

involved. before he left the country he had done a big town hall meeting on health care and before that speeches to the a.m.a., but certainly next week with him back in washington you will once again see him communicating to the public as he does so well built need for health care worm -- reform and you will see him back in that role of meeting one-on-one or with small grouppeds of members of congress, trying to get them back on track. >> how far are they in terms of figuring out to you -- how to pay for this, things is like the soda tax and the sin tax, where are they in terms of consensus? gwen: hardly seems like enough money. >> right. the soda and sin tax is an option but it's not a large amount of money. from separate directions house and senate democrats seem to be, and i say seem to be, moving back towards soaking the rich if you will pardon the cliche.

they are looking at different ways of increasing taxed on the upper income americans. it might be above, say, $350,000, some sort of scaled-in surcharge on wealthy families. over in the senate it's talked about as a millionaire tax. very different than what we went into this looking at which was taxing health care benefits but that seems to be where the consensus is building right now. >> ceci, a lot of things seemed to fall apart this week in terms of the legislative process. how bad is it for health care? are things terminal? >> no, i think not. and in fact it was interesting. i had a conversation with senator jay rockefeller today and he was reminiscing about the clinton effort 16 years ago and, you know, he has the observation that many of the mistakes that happened 16 years ago with the clinton reform you are not seeing this time around. he actually is very complimentary of the white house for letting congress kind

of do its thing for a while. he has this view and i tend to agree that lawmakers want to feel that they have at built to do their jobs and on something as complicated as health care they want to take the time, look these things over, thrash it out and that's a lot of what we seattle gwen: but we've also seen the president and white house trotting out people and hospitals and insurers and basically saying they're on board, you get on board too. is that working? >> you saw most notably in the house senator henry waxman saying i'm not bound by those deals. gwen: right. >> on the other hand they are neutralizing some of the opposition to some extent. that can be helpful down the road. gwen: ok. another domestic priority got caught up in charge and countercharge this week. the charge -- with the nation's jobless rate headed toward 10%, the president's job-creating stimulus package has not worked.

>> i think that we've got major credibility crisis here. no man in the world would get on a ship or ship of state and follow this navigation for the future. gwen: the -- the countercharge -- the plan was not supposed to work this fast, give it time, give it time. >> look where we were six months ago when we took office. we inherited the largest economic crisis since the 1930's. what i refer to as not the great depression but the great recession because it was the single greatest recession we've had in modern times, dwarfing others. gwen: so, deborah, who's right? >> i think they're actually both right. you've got a situation here where the obama administration was using figures back in january when they were con team -- contemplating the stimulus that basically seem outdated. they had not predicted double-digit unemployment. the president said if we don't pass it, we'll hit

double-digit. well, a -- part of the problem is what the stimulus did do. joe biden is saying wait, 10% is out the door and it's going to take a while for it to work. other economists are saying we need more now. the consensus opinion among economists is don't do more now because whatever you do it's going to be too late and we have a huge deficit problem that's going to make it hard to pay for the gwen: so did the white house overpromise this as a jobs bill so they're hoisted on their own petard? >> i don't think they oversold it. i think they were more opt mivetic than they probably -- optimistic should have been. there's a difference of opinion about whether they misread it or were given incomplete information. gwen: that difference is between the president and

president vice president! >> yeah. it's going to have to be a little bit of a wait an see game. >> a suspect a lot of people are frustrated when they hear the money is not out of the door yet. how come? >> good quesm the vice president said they've got to pick up the pace. one of the reasons is these things take time, it's bureaucratic, a lot of tax credits and the money was never intended to get out the door that fast. the congressional budget office always thought you would have a quarter out in 2009, a quarter in 2010. but it is going very slowly and you've only seen 10% out the door. >> if economists are a little bit torn about doing something more right now would make a difference, are there some other things the administration could do or are considering doing? >> definitely. there are things like extending unemployment benefits. there is an extension that runs out in december.

with the number of people out of work they're going to have to do something about that. they can make more food stamps available, some of those feel-good things. and they can do more about housing. one of the things we're seeing is the foreclosures among the unmoid -- unemployed who didn't take out liar loans but can't make the payments. >> is there a role for the states to accept 23 -- step in here? or are they under the kind of financial stress that they don't have a lot of maneuvering room? >> the states are in a terrible situation. we saw something we haven't seen since the 1930's, and that is california issuing i.o.u.'s. the states are a drag on the stimulus. they are basically dragging down any of the impact the stimulus might have had because they're retrenching. they're can selling summer school, furloughing workers. if you're furlowed you're not

going to go out to dinner or the movies. so it's a real drag on the stimulus. they are talking about what they can do to help the states but you can't really help one state and not the other and what can you do that's a one size fits all? the states have very different problems. and they need to prove to creditors that they're worthy of their money and fix their vobs -- problems so that they can borrow money. gwen: i was struck by how interested the republicans were in this. they seemed to grab on to this as something they can push back hard on every single day, talking about how this didn't work. is this a theme we're going to see now develop among republicans, which is ah, finally we've got something we can beat them about the ears with? definitely. i think you're seeing 2010 election campaigning going on right now and there is a desire on the hill to make this the issue for the mid term elections and it's probably a

winning strategy. we're going to see 10% unemployment through 2010 and it's going to drop very slowly. we're going to be seeing joblessness for a long time and the economy say huge issue for most people 79 gwen: thanks, direction and welcome to "washington week." >> thank you. gwen: finally, this week's political mystery, sarah palin. there are as many opinions about what the soon-to-be-former alaska governor is up to as there are fish in the state's rivers and streams. the latest analysis boils it down to a fight between the elites and the working class. jim barnes -- a member of one of those groups, i'm not sure which -- gets to the nub of the matter. what are they saying in iowa and new hampshire? and does it matter? >> it does matter. after the last campaign a lot of smart people in washington said sarah palin should go back up to juneau, run the state and get a few more accomplishments underneath her belt if they -- she wanted to run for president

in her own right. she did not take that advice. as we should have learned by now, sarah palin marches to her own drummer. it took a lot of the political establishment aback, her sudden decision to quilt her term with 18 mosss to go. but out in places like iowa and new hampshire, the kickoff places for the nominating contests, you talk to the grass roots of the republican party and they largely accept her explanation for why she's stepping down, the lawsuits and ethics investigations which she says are frivolous are a distraction stott state and that the media has really become invasive to her family. that last point is not one to overlook because for a lot of conservative activists they lump the press in with palin's critics on the left and say you guys have been hard on her for 10 months ever since she

stepped on the national stage as john mccain's running mate in 2008 and they say we, you know, our skepticism and our scrutiny turns her into a sympathetic figure. gwen: how representative are these grass roots? of a party which is self-identified republicans, an ever-slinking -- ever-shrinking part of the voting public? >> well, there's grass roots and then there's gratz -- grass roots, i would say. if you talk to folks out in iowa and new hampshire, folks who have played a senior leadership role in the campaigns, they look at her performance when she made the announcement and it was such a wandering performance -- gwen: such a kind man. >> one minute she's talking about dead fish, just go with the flow and the next minute talking about on a basketball team up got to pass the ball.

i think crisp and convincing could -- would not be two words you would hear many republican professionals use to describe her performance. but if you think about the people lower down in the grass roots they want a leader to rally around right now, somebody who is going to, as they put it, take a stand against president obama and the media and they really don't care if she's not that polished right now. >> jim, i wonder -- i certainly understand this notion of grass roots feeling as if the media has had all the scrutiny on her, etc. on the other hand, we've all spent a lot of time in iowa and new hampshire and one of the things the folks there like to do is have into the living room and look you in the eye and ask you a question once and twice and three times and see how you hold up and i just wonder how you think she would fare going through that party of president process. >> well, you know, the dynamics in both of the states are

gifment in iowa you've got a lot of evangelicals and born-again christians attended the last caucuses. in new hampshire, social issue conservative candidates don't really do all that well. but you hit on something that's very important which is those two states, the people there because they get to go first, the people there take it as their civic duty to give folks a fair shake and i actually think that would benefit palin. you know, they're going to say yeah, we've read all this in the media about you but they will give her a chance to make the case to them directly. >> jim, one of the fascinating things about this picture is the flip side of what you're talking about, and that is the number of establishment republican figures, today peggy noonan, furious at sarah palin and saying she's terrible for the republican party. how does that impact those folks at the grass roots? and is it a problem for sarah

palin? there seems to be this never-ending feud between her and the people on the john mccain campaign. i notice senator mccain hasn't said anything. >> and i don't think you're going to hear him say anything all -- although i had heard from one of his operatives he had put out the word to say stop the back-biting the i think among the rank and file they look at the recrim inages as kind of a -- recriminations as kind of a washington parlor game. but at some point sarah palin is going to need support from her here's -- peers, mechanics of congress and governors and they pay attention to those kinds of stories and those stories could make them a guilty gun-shy about supporting her. gwen: we're going to have to continue our own washington parlor game next week. i never thought of it that way but i like it. this is good. i like those political mysteries.

i think we'll do more. our conversation continues onleen with our web-exclusive washington week q.&.a.. check us out. then then keep up with developments on "the newshour with jim lehrer", including complete live coverage of supreme court confirmation hearings of judge sonia sotomayor. and we'll see you again right here next week on "washington week." good night. >> corporate funding for "washington week" is provided by -- boing. and the national mining association. major funding for "washington week" is provided by the annenberg foundation, the john s. and james l. knight foundation, the corporation for public broadcasting, and by contributions to your pbs station from viewers like you. thank you.