gwen: now comes the hard part, leadership divides, tax cut debates, collapsed trade deals and budget cutting. and that's before the new congress even gets to town. tonight on "washington week." >> this debt is like a cancer that will truly destroy this country from within if we don't fix it. gwen: a bold, new plan to reduce the deficit immediately draws fire from the left and the right. >> the debt and deficit are unsustainable but this is not the way to do it. >> the problem is not the deficit, which is the difference between overspending and the overtaxing but rather the overspending is the problem. gwen: and more post election fallout. who will lead the house

democrats? will michael steele survive at the republican national committee? traveling abroad, the president encounters skepticism on trade, currency and america's leadership role in the world. >> instead of hitting a home run, sometimes we're going to hit singles but they're really important singles. gwen: while at home, a former president tries to redefine his legacy. >> was there ever any consideration given to apologizing to the american people? >> apologizing would basically say the decision was the wrong decision, and i don't believe it was the wrong decision. gwen: making and writing history. we look at the week with jackie calmes of "the new york times," naftali bendavid of "the wall street journal," toll gjelten of n.p.r. and martha raddatz of abc news.

>> live from our nation's capital this is "washington week" with gwen ifill, produced in association with national journal. corporate funding for "washington week" is provided by -- >> i'm an engineer. my kids say i speak a different language but i love math and math and science develop new ideas. we used hydrogen in our plants for decades. the old units were very large. recently we've been able to reduce that. sen our scientists said what if we can make it small enough to produce and use hydrogen right on board a car as part of the hydrogen system this, coo significantly reduce emissions and increase fuel economy by as much as 80%. >> this rock has never stood still. since 1875, we have been there for our clients through good times and bad. when their needs changed, we were there to meet them. through the years from insurance to investment management, from real estate to retirement

solutions, we've developed new ideas for the financial challenges ahead. this rock has never stood still. and that's one thing that will never change. prudential. >> corporate funding is also provided by -- boeing and wells fargo advisers. additional funding for "washington week" is provided by the epics in excellence of journalism foundation, 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, moderator gwen ifill. gwen: good evening. last week's political seismic shock gave way to another this week. this time over policy. turns out it's one thing to campaign on cutting the budget, erasing the deficit and reducing

spending. it's another thing when doing all of that can mean overhauling medicare, slashing military spending, raising taxes and eliminating popular deductions. that's some of what the president's bipartisan fiscal commission is recommending. maya mcginnis, president for the committee for and a responsible federal budget said on the newshour this week, that's a good thing. >> i think if there's one thing we should be able to agree on is that the deficit and debt present a real threat to this economy in the medium and long term. my hope is having this realistic blueprint out there changes the terms of the debate. gwen: how realistic the blueprint is and how much the terms of the debate changed remain an open question tonight. president obama traveling in south korea urged lawmakers to at least consider the plan. >> if we are concerned about debt and deficits, then we're going to have to take actions that are difficult and we're

going to have to tell the truth to the american people. gwen: but big proposals like this often die once on arrival in washington. is this one different, jackie? >> the short answer is no, but you can say it's dead on arrival but it depends on what your definition of d.o.a. is. it's dead in the sense that it was the opening bid, the chairman put it out there. it's more comprehensive than a lot of people expected. takes in everything, annual spending, entitlement program spending, taxes, social security, defense spending and republicans were ready to oppose the tax -- the revenue increases in it even though it would also lower rates and liberal groups were heavily mobilized to oppose the social security proposals. so in that sense it is dead but i don't see this group of people, you know, 18 important people, dozens members of congress including leadership figures, spending this this much

time on a wasteed effort. in the short term, yes. but something like this is going to serve as a basis for the debate that's going to grip this country for coming years. gwen: sounds like it's part of what the two co-chairmen had in mind because we weren't supposed to see this report until the first of december and the entire commission hasn't voted on it yet. >> what we weren't supposed to see was a final vote or decision. gwen: right. >> the chairmen felt to get some gugs going, they had to get something they could work from, members could work from. they knew if they put something like this out with 12 members of congress in the room, it was going to leak. so they figured why not get it out. the people who would leave things would leak things they didn't like. it wouldn't be the whole package. so they got it out there in a way that was the whole package, they had a press conference and, you know, so far it's been constructive. the expectations for this were so low that some people were actually expecting that if you raise the subject of taxes or social security, people would

get up and leave. >> jackie, can i ask sort of a fundamental question here. the economy is certainly not entirely recovered by any means. so shouldn't there be more spending? shouldn't there be more stimulating the economy instead of worrying about the deficit yet, or is that sort of the fundamental debate here? >> well, that's the -- a lot of people, most mainstream economists would agree you need more stimulus and spending certainly we're going to have to extend unemployment benefits at some point for 2 million people still out of work. and, of course, we have the debate on the bush tax cuts. but you can do both. that's what gets lost. it's hard to understand, it's hard hard for people to understand a lot of these changes the chairmen propose and the deficit reduction we're talking about would not take place until 2012 at the earliest. some people say that would be too soon. so but if you put steps like these -- and i'm not endorsing any of them, but if you did steps like this into the future, they would take effect, it would be a pretty big senate to global

markets that the united states is getting its fiscal house in order. >> jackie, is this proposal evenly balanced? in other words, do the spending cuts sort of match the tax increases? it seemed like early on, at least, the left was a little more worked up in exercise about this whole thing than those on the right. it made me wonder whether this tried to split it maybe down the middle or whether there was a favoring on one side? >> whether it's balanced depends on who you talk to. republicans don't want to see any increases and democrats don't want to see increases in social security. gwen: and you're talking about tax gases and things like that? >> right, and they would do away with a number of tax reductions like they give the panel the option of doing away entirely with the deduction on mortgage interest, doing away with the tax-free benefit on our provider-provided health benefits but they don't say you have to do that but to the extent you do that t. brings down your top rates. the income tax rates they're talking about would be as low as 8% for lower income and to no

higher than say 23%. but to the extent you keep these deductions that we all love, it would have to go up to raise -- because they don't want to raise just the same amount of money. they want to raise a little more because the whole point is deficit reduction. >> jackie, i'm curious about the politics of this. you mentioned liberals were very quick out of the gate in denouncing it. but back when this commission was first announced, remember, a lot of republicans initially supported it and then flipped to against it. is there any sign yet of how this is going to play out politically, how republicans are sort of going to deal with this? are they going to continue to keep their distance from it or might we see some engagement there? >> well, this is one of these exercises where no one wants to be the one with blood on their hands. so the democrats don't want to take the blame for killing it, nor do the republicans. but the good thing about this is no matter what you think about it substantively, after the campaign we've been through when candidates seem to make it sound so easy to be fiscally responsible, this shows you --

their plan shows you just how hard it is and that you can't get where we need to be simply by cutting spending or you're going to have some, you know, people -- you virtually would have to get rid of all of our annual spending and then get into the social security and medicare. and you can't do it with taxes alone. there has to be a coming together. gwen: it was truly a put up or shut up moment. we'll see whether that actually happens. but in the meantime big policy can easily be overshadowed by big politics. and even though lawmakers don't return to washington from their -- for their lame duck session until next week, the politicking has already started. nancy pelosi kicked off the fight by deciding not to step aside as party leader. her lieutenant instead grabbed for the remaining musical chair and on the republican side, gop chairman michael seal is once again under fire. but why does it matter that these leadership posts are such an important thing? what does that have to do with policy or what we see happening

next? >> the reason it matters is because it's not just about which person is in what slot but the broader debates. it is pretty typical like a turbulent election we just had, both parties would kind of reassess where they stand and what approach they want to take. on the democratic side, this race that you referred to so congressman hoyer is seen as being associated more with a moderate wing of the party and congressman clyburn is being more sushted with the liberal lane. that's a little bit of an oversimplification but the fact remains it reflects a deeper fight within the party about whether the right way to react to last week's election is to move to the center or to reaffirm the liberal principles. i think that's why it matters. gwen: and on the republican side, does it matter who the head of the r.n.c. is? >> that's a little bit of a different matter because it's less of an ideological issue and more of one that has to do with competence f. you will. a lot of people feel like michael steele was just a bad chairman of the republican party. he didn't raise a lot of money. he was given to controversial

statements, and, you know, maybe it didn't matter so much an election like we just had, which was a huge republican year. but most republicans i think would tell you that 2012 isn't going to be as republican as this year and they need someone who doesn't raise money, who doesn't draw more attention to himself than the candidates so there is a fight to weigh about whether or not to replace him. >> it takes somebody to beat somebody. we saw the former michigan republican chairman got in today. will there be others? >> that's what everybody's waiting to see. you know, there are a couple of people who kind of are still trying to decide how it all plays out. and right now, michael steele has a reasonable amount of support within the party but he also has staunch opponents and a lot of this is going to again on just who gets in, how credible they are and whether they can attract somebody. gwen: it takes somebody to beat nancy pelosi as well and even though there are staunch opponents in the democratic party, none seem to be running against her. >> that's a fascinating thing. nancy pelosi was the subject of so much attack and vilification over the past campaign, yet when she announced she was going to

stay and surprised a lot of people and was going to seek the top democratic post again, nobody jumped up to run against her. she's still running as though she has strong opposition. she's circulating letters of support and everybody from the sierra club to the women of the house have come out on her behalf. i think that's because it's not a question of whether or not she's going to win, but she needs to get a lot of votes. in other words, to have her position in the party be strong, she can't afford to have 50 people vote against her. so she's running very hard and very fiercely, even though she has no opposition. >> neftali, how much has the election itself affected these fights on both the republican and democratic side? isn't it true that the republican party moved to the right with all of these new tea party freshmen coming in? meanwhile, a lot of conservative democrats lost, so does that move the democratic party to the left and has that affected the leadership fights themselves? >> well, there's no question that those things have happened. as you say, the democrats in the house are a more liberal group than they were, you know, a few weeks ago because so many of the

people who lost were in swing districts and they were moderates, whereas the liberals generally won. but it's not clear, actually, that it's affecting the leadership. that's what i meant, i guess, about the danger of oversimplifying. hoyer, as i say, a democrat, widely seen as a moderate wing of the party, but the fact of the matter is he has a lot of support for the liberals too but the race is not breaking down that way. the bigger question is what direction does the party want to go in the future? do they want to embrace and reaffirm liberal principles in the interest of energizing their base or make enough of a move to the center that they have a better chance of attracting moderates than they were able to do just now. >> there's a meeting next week at the white house, correct, bipartisan leadership? any expectations from that or is that just how you do -- >> will there be kumbaya in the adriveway afterwards? >> leaders of both parties, and particularly president obama, said they want to work together, they want to reach out to each other. i think this is the beginning of that. i would be very surprised if

anything substantive comes out of that meeting at all. however, there's been a lot of complaints from the republican leadership that president obama stopped a meeting with them, didn't talk to them, didn't call them and i think this is a way for them to them to insinuate from now on, i will be more in touch with you guys. gwen: the first task we will be talking about next week is bush tax cuts, whether they extended, and continuing resolution, whether the government will be funded. oh, fun. while other countries are also watching carefully to see how the u.s. is handling its fiscal and political crisis, in britain, france and germany -- in greece, that is, similar efforts have often yielded chaos. and as the president toured asia this week, he was reminded that the u.s. is leading but not necessarily dictating the global economic agenda. no trade deal in south korea or currency reevaluation in china. now, what the president snubbed and we played a little bit of it, was he merely just hitting a single it? >> it wasn't a great at-bat, let's put it that way.

but i think the important point here is it wasn't just about president obama being snubbed personally. this is really larger than that. the meeting in seoul was the g-20 summit, this is the group of 20 largest economies in the world basically. remember that these summits didn't even happen until november 2008. up until then, it was really the g-7, the united states and the other big industrial countries that were really managing the global economy. and what we've seen is this real shift of power, where the new players are now getting a seat at the table, countries like china, brazil, india and they don't necessarily see the world the same way. they don't necessarily have the same priorities. and what they are doing here is they are asserting themselves and what the united states, you know, used to be able to accomplish at these g-7 meetings, where it was in charge along with its allies, that's just not the case anymore. and i think that what we're seeing is that -- and in addition to that, these emerging economies are actually doing much better than the old

advanced countries. in fact, you know, risk analysis firms say it's more risky to invest in the advanced countries than it is to invest in the emerging markets. so as a result of that what you get are some real disagreements and there's no real way, there's no new leadership that has emerged. these countries are not ack up, like china and india, are not accustom to bing in these leadership positions so what you're seeing is a lot of squabbling until new leadership patterns emerge, we're going to see more of that probably. >> but, tom, when this began, everybody thought china would be under pressure. >> right. >> all eyes are on china because of their currency. how did the u.s. really become the target? >> there you could make an argument maybe there was bad timing or the united states sort of blew it in a sense. the federal reserve announced that it was going to up pp -- pump $600 billion into the economy through a complicated procedure we don't need to get into. but a lot of the emerging countries thought that would have the effect of lowering the value of the u.s. dollar, which would make u.s. exports more

competitive. that's just the argument the united states had been making against china. and was hoping that this would be the issue that would get worked out at the g-20 summit. well, after the united states made this move, it put the united states on the defensive and it was no longer able to kind of take the moral high ground and make this argument against china. i'm sure china was relieved because it really took china off the hot seat. >> was there any sense that the election drubbing that the president got affected the outcome of this whole yashe trip as he went from india, indonesia, south korea, now in japan? >> it seems, jackie, that what happened in south korea was kind of unique. because he started out in india, and he actually had a very successful trip in india. he emphasized he spent more time in india than any other country. there was a column today by charles kraut hammer in "the washington post," not a big supporter of obama, saying he thought that president obama did really well in india because he put the u.s./india relationship on a higher profile. while he was there, of course,

he endorsed india becoming a permanent member of the security council. independent nearbyia, except for the volcano, another family successfully welcomed with warm arms, another country in indonesia where he spent some of his own childhood. it was really not obama personally. it was the unique situation i think of the g-20 summit that really sort of lowered his standing. >> you mentioned india. as you said, he proposed a permanent seat for india, security council. >> right. >> what are the political ramifications of that? presumably india's very happy about that but i assume a lot of other countries aren't. how much of a risky move was that for the president to propose? >> it wasn't all that risky neftali in the sense it's not going to happen. and any time you propose something you know is not going to happen -- >> seems like that budget deficit we're talking about. >> but as you play this out, the one thing that these countries all share is the idea that national sovereignty should be honored and if to the extent they become big players in the

united nations, it's going to be much harder to enact sanctions against iran, it will be harder to intervene in countries for humanitarian or human rights purposes. these countries as a rule don't like the idea of intervening and so i think it really would change the way that the united states is able to pursue foreign policy goals in places like the united nations. gwen: you know, at least while we were busy looking forward to what happens next, at least one high-profile politician, he chose to stay out of the tax cut, deficit, what happens next debate this week and that was former president george w. bush. he had a book to sell. "decision points," in which he sought to explain his path and pointedly avoid the disputes of the present. after talking to oprah and matt and shawn and bill all week, did he pull that off, martha? >> oh, i think he stayed out of all of the disputes. he really didn't want to get into that clearly. he called it the swamp. the swamp, i'm not going back to the swamp. it was oprah who tried to get him in the swamp, he said.

but she actually asked about sarah palin. and he wasn't going there. he wasn't going anywhere. but what he did do, you could almost picture -- i was in that white house for three years covering president bush. you could almost picture him and a book editor sitting down together, and you have got to talk about katrina. you have to talk about afghanistan. you have got to talk about iraq. so he sort of told you as much as he needed to tell you but there were no earth-shattering revelations except a couple personal revelations. but on policy, it was pretty much the way you expected it. gwen: even saying that he supported waterboarding wasn't really a surprise? >> you know, he obviously did. he was president of the united states. he never -- he never conceded it was torture. he never conceded and he's still not conceding it was torture. he's just saying, yes, i supported waterboarding and it got us somewhere. that's essentially what they were saying through those years. >> do you feel like we learned

anything about the guy? it seems like one of the things presidents can do when they're no longer president, they can tell you stuff they couldn't have said during their tenure. did we get anything out of this or was it just what you expected? >> you know, i really watched carefully and i had moments with president bush in the oval office, alone in the oval office talking with him or a couple of other people around and once at the ranch alone in his office. the man i saw on tv being interviewed was that man you are alone with. he reflects only to a degree. he doesn't give you a great deal of information. did we learn some information? you bet. we learned a lot of information. the thing that struck me most was the incident with his mother. and we probably all heard this reported this week and out of the book, he said when he was a teenager and this profoundly affected him, his mother, barbara bush, had a miscarriage and that she put the fetus in a jar and had young george bush take her to the hospital. and that he remembers seeing

that jar. now, i have to say, and particularly as a mother of a son, i cannot imagine that scene. i just cannot imagine that scene. and i was sort of figuring out the math today. the driving age in texas was 14 at the time. he said he had just learned to drive, so he was 14 years old. she was 21 when she had george bush. so she was about 35 and on the way to the doctor, and it's something he's never for gotten, obviously he said if his mother didn't give him permission to tell that story, he never would have told 0 it. >> and she did give permission. >> yes, she did. >> there's been so much speculation over the years about the two of them and people saying he's closer to her than he is his father. what sort of context does he present this in? >> that's a real interesting question because i would say, i'll aisle go back on that. i think what i did learn is that i really do believe he's close to his dad, and that there's enormous respect both ways.

but he said he was very close to his mother. i think he was home a lot with his mom and she had a child die at age 3. he said he shared that a lot with her. >> one quick question. >> we'll go to you. >> my question was his comment that kanye west when he said he didn't think bush compared about black people, president bush said that was the most disgusting thing that happened in his administration? >> which was pretty extraordinary that that was the most disgusting but he thought that was every interview that he was disgusted. you can call me everything, you can say i didn't care but you cannot call me a racist. gwen: so we did learn some things about struck a cord or shaped the man he was. that's why we read these books. thank you all very much. before we go tonight, we have to bid farewell to our audio engineer extraordinaire, david gilette, who's retiring after 32 years at wtae in washington. most of that time making sure you can hear us on "washington week." now you gets hi friday nights back. good luck, david.

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