john: is august make or break time for health care reform? and a secret mission to north korea by bill clinton. does the release of two captured journalists signal a that you with the reclusive korean leader? covering these stories this week, john harwood of cnbc and the "new york times," peter baker of "the new york times," and martha raddatz of abc news. >> 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".

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provided by the annenberg foundation, the corporation for public broadcasting, and by contributions to your pbs station from viewers like you. thank you. once again, live from washington, sitting in for gwen ifill this week, john dickerson of slate magazine and cbs news. john: good evening. president barack obama turned 48 this week. he didn't get big present he'd been asking for doctor passage of health care reform in the house and senate -- but he got a few pretty good alternatives. sotomayor, his pick for the supreme court, was confirmed with the support of nine republicans, and we learned today that the unemployment rate has dropped a little bit. from 9.5% to 9.4%. there have been a few pieces of economic news like this late that, while not fantastic, have at least been not awful. john harwood, does the white house think they've turned a corner here? >> no. but they're having a party

right now. the white house knows that first of all mission accomplished is the worst thing you can do in an economy like this. the unemployment rate even though it ticked down this month is likely to go up for a few months and not really come down in a serious way until next spring. consumer confidence is still low. it's true that the banking system is stabilized and that's good news. but they can't celebrate. barack obama came out today and attributed the better than it might have been news on employment to the effect of his policies on the stimulus plan but they're not celebrating too much. >> one thing on the campaign stump this week he sort of amped up the rhetoric a little bit. also -- let's listen to it. >> i don't want the folks who created the mess to do a lot of talking. i want them to question the -- just get out of president way so we can clean up the mess. i clonet -- don't mind cleaning up after them, but don't have

-- do a lot of talking. >> so, john, what's that new language about? >> i think after the month probe has had, he's gotten kicked around by the republicans over the economy until today. bit republicans on health care and that debate is difficult and congress is leaving without having passed health care reform, it feels pretty good to be on the campaign trial -- trail and knock around your opponents and set them up as the people who have been trying to stop you at every turn. especially now that he's got a little bit of good news i expect he'll be amped up over the next couple weeks. >> john, how much credit can he take for this good news and will he and should he? >> it's very difficult, martha, as you know, to tie cause and effect in economic plills -- policy but the way it works is you get the blame on the downside. certainly when the market was down and the job picture poor for much of this year he was getting hammered by the

republicans. outside economists, mark zandi, for example, say the stimulus has had she fect, that the unemployment picture would be worse if not for it and you certainly have even is in this cash for clunkers program which congress has now extended that in a very discreet way that's terribly become doctor welcome for the administration has goosed the sale of a quarter million cars. they've now doubled the funding for it and that promises to make people feel positive and possibly provide an actual boost over the next few weeks. >> they said we would have no more than 8% unemployment if they passed the recover act, which they did and now ats -- it's 9.4%. where do we go from here? >> that's a good reality check. it's quite unusual for a white house to be feeling good about 9.4% unemployment. the white house argument is the

base was really a lot lower when they made those projections. but they know they have a timing problem that's very severe. they've got the 2010 elections coming up. even if you accept their arguments that the stimulus is working and the slow release is going to provide benefit, unemployment always lags behind in a recovery. they still say it's going to hit 10% next year. that means it's a very, very difficult road for them politically and hard for them to sustain their economic policy and hard to sustain their credibility with the american people as they try to sell the health care plan. john: and what about that health care plan? >> anything that makes people feel better about what barack obama is presenting to the public is going to make people feel good. it's a huge, complicated endeavor. it's failed for seven years. but they know august is going

to be very, very tough for that effort. as you know as these members fan out across the country and try to hold their party together and withstand some of the heat the members are going to get at the town halls. >> no second stimulus? >> i think that is very, very unlike lism the white house does not want that to happen. there is tremendous concern in the public, more than we've seen in a long time, about levels of spending and debt and deficit. i think the white house is $800 billion is enough of that hit to take and they would rather not have to do it and if they can feel confident that the economy is in fact turning around i think they very much don't want to go there, would only do so with great reluctance if democrats force their hand in congress. >> do you get any little sense that there say sort of i told you so here? we said this stimulus would work and here it's working? >> yes, but again you've got to be careful with that because one of the reasons unemployment ticked down this month is

because some people left the labor force, stopped looking for jobs. to -- so they're not counted. there is still a very, very si

really going alt each other, that's going to polarize the debate and likely extinguish any chance the gang of six will come up with a product. is that what it looks like to new >> well, there are these town halls, what had been such -- somewhat an intellectual debate up to now is taking on all the emotion this issue has had for the last decade. and for good reason and these are big, big issues. david axelrod, the president's senior advisor, goes up to capitol hill and has a big

power point display. has a big nuck 87 on it. he explains that's the number of americans in percentage who have health care right now and they don't want to lose what they have. john: is that why they call it now health insurance reform, not health care? >> exactly. who likes insurance companies anyway? >> peter, the town halls were so emotional and really dramatic. i don't think i've seen anything like that. >> right. >> is -- there are suspicions that these are manufactured. how did this happen? >> that's what the white house said this week. it's not grass roots it's astroturf. manufactured anger. to some extent that's correct but politics is about being manufactured. getting your people out and pretty shall expressing -- >> but there has to be genuine frustration? >> right. you're tapping into a genuine we willspring of suspicion and

uncertainty about health care. john: does the white house have a sense of what they've done right and wrong in this rough patch? any sense of mistakes made? >> well, it's a good question. i don't think they would necessarily admit their own mistakes. they would admit other people's mistakes. one thing that's got the white house con sternated is this democrat on democrat action. rahm emanuel, chief of staff to the president of the united states, went to a meeting this week of liberal interest groups and told them in fairly blunt terms he thinks he was asked a question about these ads targeting blue dog democrats, that that's not -- that that's a stupid way -- that's a nice way of what he really said -- >> a few expletives? >> of course. >> it is rahm emanuel after all. >> if in fact the bipartisan negotiations founder does that mean the so-called public option is a lot more alive than

it has appeared in conversations in the last couple weeks? >> that's a very good question. the same problems the republicans have with the public option are shared by a lot of the so-called blue dogs. and remember these are people rahm emanuel helped elect when they took back the house in 2006. he's as cognizant as anybody that you don't want to damage them and risk them losing their seats in 2010 or you haven't accomplished anything. john: the six went up to the white house trying to reach bipartisan agreement how important is that here? >> you heard and played his clip from last night's event in virginia. i think there is a certain frustration in the white house with this idea that bipartisanship is going to work. they're willing to give it some time, some lip service and appearances of at least giving it a chance but they don't

really hold out many illusions that there's going to be -- john: and they say they're not going to measure in terms of votes >> right, there are 160 republican ideas in the bill but no republicans voting for it. and sonia sotomayor told us this week, even john mccain said this is somebody who is very qualified but they decided to vote against her because they don't share barack obama's faith in her not to judge by the rule of emfathy but by law. and if they get something through bit end of the year we'll all forget august. they're -- if not, they'll -- we'll look back and say this is the mome the presidency changed. to leave out the most important priority he has right now on

the domestic alleged shall -- agenda is a big, big thing in his first year. john: thanks. we knew we'd hear from bill clinton again. it's just we didn't expect it would be this way. monday the former president took a secret trip around the globe to north korea to meet are -- with reclusive leader kim jong il as a prelude to the release of two u.s. journalists and -- who were held prisoner. it was part of a diplomatic two-step by the former president and his wife. what did she say that was so important? >> what she said was we're sorry these two crossed over. they wanted an apology. it's part of what the north koreans demanded. it was part one. part two? send bill clinton over. which is what they did. i think hillary clinton was all for that. the north koreans specifically told the journalists that if

bill clinton came over there they would be freed. they communicated that to their families. they were allowed to make phone calls and in mid july called up their families and said we will be freed if you get bill clinton over here. that's one of the things i thought was so emotional watching them come home when laura ling described how they had no idea what was going on. they expected to go into a labor camp. they'd been sentenced to 12 years in a labor camp. they hadn't been sent there. they were in some sort of guest facility. but then to walk in there and see bill clinton, they knew exactly that they would be freed because that was the key right there. and they had apologized as well. the journalists had apologized to the north koreans for crossing over. laura lingapt -- laura ling's sister said yes, they did cross over into north korea. >> do we have any sense of the

conversation that went back and forth? >> i can't imagine bill clinton smiling for those three hours, can you? one of the things they talked about was his feelings on denuclearization, "hey, kim jong il, that's not really a good idea," and i think theres with a little freelancing over there for him. but for the administration, there was the twister game all week, "oh, it's a private mission, it's a private mission, we had nothing to do with it," even though they were heavily involved in this. john: you talk about the smiles. we know that bill clinton loves the public stage. he loves victory. he loves winning. he knew that when he went over there he was going to get what he wanted. yet when you saw that picture -- he had an absolute stone face when he sat next to kim jong il. how hard was it for him to keep from smile something

>> it probably wasn't that hard for him standing next to kim jongy. but it was the most genuine smile in the world with kim jong il. he couldn't have been happier than to have bill clinton, who he's been obsessed with over the years and thinks is so fabulous. bill clinton couldn't smile in that. john: because you would be accused of appeasement? >> they are already. john: and madeline albright had been accused of being too friendly in her meeting. >> yes. all those pictures come back to haunt you. this may come back in another way because it's risky john: that plays into the argument others argue that this rewards bad behavior. what do you think that of argument? what does it mean in this debate? >> first of all, they weren't

hostages. they were pawns in this whole game. so i think rewarding bad behavior, they can get accused of that if things go badly which is one principle -- principal reason they want to separate this and keep saying it's a private mission. if the north koreans start behaving badly again which they usually do, then they'll have things to talk about but i think one of the things the administration wanted to do even leading up to this is just change the dynamic of north korea because basically it had been going down the same road we'd been going down with george bush. the north koreans would test a nuclear weapon, fire a long range missile, and we'd have stern words for them. they started gradually not doing that. in july hillary clinton didn't say a whole lot. in the interview with me she even said unruly teenagers.

>> is there any way it's not reality -- rell to the release of this? >> i think you heard hillary clinton say this week they hope there will be improvement. since then the north koreans have baveged well. people i've talked to about watching the north koreans say they're pleased with what they've seen since bill clinton left. i don't know what that particularly means. i guess they haven't fired any missiles. but they really did change the dynamic. john: marthy, i want to ask you about a big deal in pakistan. the leader of the taliban killed by a strike. how important is this for the u.s.? >> think -- i think this is a very, very big strike and particularly a big deal because pakistan was not happy with the way the united states is approaching. the guy was the leader of the

pakistani taliban and pakistan had complained to the united states for months that the only people they cared about were the people attacking the u.s. so the u.s. really started training etc. -- its efforts on mass ood and others and they were able to get him this week the he was also a really, really bad guy. he threatened soldiers in afghanistan. he's accused of killing benazir butteo as well the john: thanks, martha and thanks everyone. weaver going to break just a few minutes early tonight to allow our local pbs stations to ask for your support. stations that in turn support us. i'm john dickerson. be sure to join us around the table next week on "washington week" the good night. >> "washington week" was produced by weta, which is solely responsible for its content.

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