gwen: presidential politics. taxes. budget priorities. and a looming confrontation with iran. we tackle it all tonight on "washington week." >> governor romney supported the bailout of wall street and decided not to support the bailout of detroit. gwen: those might be fighting words in michigan. except -- >> my feeling was that we should not support the -- the government should not be involved in bailouts period. gwen: running to the right. can rick santorum outpace mitt romney? >> senator santorum is getting his moment in the spotlight now. which is a good thing. i hope people take a very close look at his record. if you want a fiscal conservative, you can't vote for rick santorum because he's not. he's not a deficit hawk. gwen: while in washington,

congress grudgingly extends the payroll tax holiday. >> the only reason we're even talking about a payroll tax break or an extension of unemployment benefits is because of the president's economic policies have failed. >> this is make or break moment for the middle class in america. and for folks who want to be in the middle class. gwen: as republicans reject the president's budget blueprint, out of hand. >> dead on arrival. it's debt on arrival. gwen: and iran resurfaces as a nuclear flashpoint. we take you to the strait of hormuz. covering the week, karen tumulty of "the washington post." susan of "usa today." -- susan of "usa today." jackie calmes of "the new york times" and martha raddatz of abc news. >> award-winning reporting and analysis, covering history as it happens. 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 -- >> this rock has never stood still. since 1875, we've 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. >> we know why we're here. to connect our forces to what they need when they need it. >> to help troops see danger. before it sees them. >> to answer the call of the brave and bring them safely

home. >> around the globe, the people of boeing are working together. to support and protect all who serve. >> that's why we're here. >> corporate funding is also provided by norfolk southern. additional funding is 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, moderator gwen ifill. gwen: good evening. the candidate who has captured the imagination of republican voters this week doesn't have a national headquarters, a 50-state campaign infrastructure, or even a fancy campaign bus. but he seems to have one big advantage at least for now, his last name is not romney. so another big primary fight is under way. and in a half dozen states,

this is what voters are seeing. >> santorum even voted to raise his own pay and joined hillary clinton to let convicted felons vote. rick santorum. big spender. washington insider. >> mitt romney's negative attack machine is back. on full throttle. this time romney's firing his mud at rick santorum. gwen: but as santorum is soaring in state and national polls right now, it's because people are -- is it because people are for him or is it because people are against romney? karen, straighten us out. >> very uplifting stuff in those ads. you know, we've now seen this sequence of events play out so many times where somebody emerges as the alternative to romney. romney and his allies turn on the big guns. the negative ads. the scrutiny. they pulverize whoever this is. and it never clears the way for romney. he can't somehow make the sale.

always there's another alternative that people are looking for. but at some point, you've got to assume that what is really going on here, more than anything else in this primary, the real dynamic is mitt romney and his inability to close the deal with the republican electorate. gwen: i heard him quoted today, someone asked him whether it was a two-race and he said it's always been a two--man race, bachmann, mccain, always somebody taking the momentum from him. he has the money and the establishment cred and does that allow him to -- a good thing that he can make all those people go away, i guess? >> at some point, though, the question does become why -- why is it that the republicans rank and file in a year when people are so passionate and so desperate on the republican side to bounce barack obama out of office, why is it so hard for the republican electorate to coalesce behind anyone? and now we are going into this

big run of primaries. we have two of them on the 28th. we have super tuesday the following week. you know, if mitt romney cannot make the sale at some point during this, people are going to start wondering about the biggest argument that he has had going in his favor which is his inevitability and his electability. >> what is the messaging problem that romney has? what is going wrong for romney and how does he change that? >> well, i spent most of this week following him around through arizona and michigan and ohio. and it's really difficult to -- he's running on his biography. and he is -- he chaningse his tactics -- changes his tactics. his stump speech is one line of biography and one of why he loves america followed by sort of the vaguest of -- the vaguest of promises of what he would do if elected.

but none of this seems to add up to a rationale or a real clear picture of how he would do things differently. he makes the argument that essentially, the country's biggest problem could be solved just by firing the c.e.o. and changing who is in the white house. >> if he were to lose in michigan, is that fatal? >> you know, it's not fatal. but it does, i think, shake the biggest thing he's had propping him up so far. which is this aura that ultimately people are going to come around to mitt romney. because this is his home state. he was raised there. his father was the governor of the state. and it's also a state that he won quite handily four years ago. >> what about the -- excuse me, what about the race for rick santorum? why is he excelling right now and does he have staying power or is he just the latest not romney? >> and can i piggyback on that? we've had this big social, cultural debate going on in washington for a couple of

weeks it feels like about. contraception, birth control and rick santorum is on the right in this. does that help him? >> you know, this -- this is one of these things where you're looking at the republicans, the conservatives, the bishops, and it really looks like on this contraception thing they are truly trying to snatch defeat from the jaws of victory. i think that they had a lot of sympathy going into this. but increasingly, this is looking not like an argument about religious freedom. it's looking like an argument about contraception. gwen: and doesn't help that he told our friend andrea mitchell his super pac guy told andrea mitchell contraception would be habbled if women put an aspirin -- would be handled if women put an sprain between their knees. -- put an aspirin between their knees. >> and it will make it hard for whoever the nominee is to get elected in the fall. but rick santorum does have some things going for him that the previous not romneys

didn't. i think he has a lot of appeal for blue collar voters. because his story is their story. gwen: here in washington they've been debating the same social issues. but they have also passed -- congress actually passed legislation. and it will extend a payroll tax cut. and unemployment benefits. and remember, this is the same debate that almost crippled the government last december. this time, not so much. and the president took a victory lap of sorts today at a boeing plant in washington state. >> just before we got here, congress did the right thing and voted to make sure the taxes would not go up on middle class families at the end of this month. it is amazing what happens when congress focuses on doing the right thing sin stead of just playing poll -- thing instead of just playing politics. gwen: a big jet engine behind him. the story that sue is going to tell us. what happened? >> i think what closed the deal in the end is republicans showed a tremendous amount of pragmatism in this. they looked at the debate and realized it was a political

loser. and they made a decision to neutralize the president's best argument. and so they said that they didn't have to pay for it. the fiscal congress that has drawn such a hard-line on fiscal issues walked away from a commitment to pay for the tax cut. a lot easier to pass legislation when you don't have to pay for it. and the speaker's office has been fairly pragmatic in saying this is a success for the president. but where they succeeded is they have neutralized what is a very potent political attack by the white house. and for the president that this is an ineffectual congress and this is an obstructionist congress. and the reality is this bill affects millions of americans. and there was going to be very real consequences. and voters have shown a real distaste for brinksmanship politics. and from the payroll tax cut means about $40 a paycheck for an american making about $50,000 a year. or considered to be about $1,000 a year over the course of the year for an american family. unemployment benefits at a time of very high unemployment. $300 paychecks depending on the

state and the formulas. and a drop in physician payments to seniors. imagine the political consequences if seniors were being dropped from doctors and not seeking treatment. so the reality is affecting real lives. and it also -- it was a remarkable amount of bipartisanship. chuck schumer walked off after passing it and said it's a miracle. almost as many republicans voted as democrats. so unilateral disarmament on this issue. >> we remember last fall when the republicans first set this condition that tax cuts had to be paid for. and it was pointed out by democrats and others that they hadn't set this condition for tax cuts in the past. including notably the bush era tax cuts. and now are they doing this now to sort of set a precedent, go back to the old precedent, that you don't have to pay for them because that are look to the end of this year when the bush era tax cuts are ready to expire, and thinking, well, we

can move to extend those without paying for them? >> this is a short-term win in some sense for republicans. but there's long-term consequences. i think it's notable that the three senate republicans who were supposed to negotiate the deal didn't sign off on it and voted against it. and in part because the republicans, including mitch america connell, the leader of the -- mitch mcconnell, the leader of the republicans in the senate, last week saying the republicans will not support a package not paid for and 180. the republican party has been very inconsistent on this issue and it's going to come up again at the end of the year when we're facing the expiration of the bush tax cuts on december 31. and this is an issue that's probably going to have to be resolved in this very short period of time after the election. >> you mentioned this very briefly. what does this do to president obama if congress passes things? and how does he run against -- >> it will be very telling, and i think republicans are looking for this. and does the president have a big rose garden signing ceremony with mitch mcconnell and john boehner behind him? or sign it and pass it and move

on? and i think republicans noted that when they passed the bill, the authorization that was pitched as a joshes bill, the president signed and moved on and didn't talk about it, it does not help the white house's message that congress is ineffectua but looking forward to this year, you talked to republicans and talked to democrats, there's not a lot more options for compromise this year. and i think after this, they'll do what they have to do. and there's not going to be a lot more payroll compromises before the election. >> so what you're saying here is this was like everybody just sort of doing -- as you said, what they had to do. so you think at this point the terms have been set and from here on out, does the president still have his argument that the republicans are a do-nothing congress? gwen: and have they cleared the decks so nothing much else happens now for the rest of the year? >> there's not much they have to do now. in terms of what the government has to do, we won't hit that until the end. fiscal year in september -- until the end. fiscal year in september. and what will reinforce the bright lines on the hill is paul ryan, the budget committee chairman, he's going to unveil his budget in a couple of weeks

and that's going to create this very stark contrast between the democrats and the republicans. and it's going to go from there. gwen: let's talk about something they don't have to do. it's an annual ritual. and it seldom goes anywhere. the president, delivered his budget plan to congress this week. republicans dismissed it but it's worth examining anyway if only for what a three-point -- $3.8 trillion election year request tells us about the president's priorities for a hoped for second term. what did you see in it that tells what we're looking at here? >> i'll segue straight from susan who said -- when congressman ryan puts out the house republican budget it will set up a contrast. and that's exactly what the white house wants. because they think they have the better of that argument. you look at any poll that the contrast is they are -- for all the emphasis and all the talk about deficit reduction for another year, the second year in a row, they have emphasized more of the investments they're making in the country. while also bringing down the deficits over the next 10

years. they would save $4 trillion. the republicans of course contest that estimate. but they're really emphasizing the things, the president made his announcement at a virginia community college. it happened to be a young audience. those are the voters they really target. a community college. which is a winner in his budget. amid all the losers that have to be cut back and a swing state, virginia. it's a political document and could be looked at as an agenda for a second term. clearly this budget you see with the economy starting to improve, he's moving away. this administration finally in the fourth year feels it can emphasize less the short-term stimulus and more, especially now that they have gotten the passage of the payroll tax cut with the unemployment compensation in it. and they can move into the long-term investments. if i can give one example. the president likes to talk a lot about how we need to get out of iraq and afghanistan in order to do some nation building at home. so he proposed a six-year, $476

billion transportation program. and so those sorts of things are where he's putting his emphasis. >> but every single event i went to was mitt romney this week. the first thing out of his mouth was remember when the president promised that he would cut the deficit in half by the end of his first term. and he's going to get hit with that over and over again. have they decided that people don't care about deficit reduction as much anymore? >> well, they certainly hope so. because there's nothing they can do about it at this stage. it's probably the president made that promise in like february of 2009. just after taking office. and what the administration will say, which has the benefit of some truth behind it. is that no one knew then exactly how severe the recession was. so we've had not only the stimulus bill they passed that year, to cover two years, there's been -- we're continuing as the discussion on payroll tax reflects. so they always said it would be a percentage of g.d.p. he inherited a deficit that was about 9%.

compared to the size of the economy. the budget he proposes for -- the budget year that ends on october 1 or september 30, so right before the election, we'll have a deficit to g.d.p. ratio, a percentage of 8.5%. so that's hardly cutting in half. and next year, he's proposing $5.5 -- 5.5% would be the deficit. even a year not cut in half but the public thinks he was dealt a bad hand. >> so it's not dead on arrival. we hear dead on arrival. dead on arrival. but we're going to mess with this for a long time. >> you hear dead on arrival about every president's budget. because congress is constitutional powers, the power of the purse. they jealously guard it. but every president gets some of this stuff passed. i think one thing, you know, so it isn't unfair to call it dead on arrival.

there will be some things passed. but one thing to keep in mind and goes back to what susan was saying about there's not a lot left they need to do. well, part of that is because everyone is assuming now they're not going to finish the appropriation bills. and there will be -- before the election. there will be a lame duck session. that will come right before the bush tax cuts are supposed to expire. and right before, this $1.2 trillion see quester, automatic spending cuts that they allowed for if congress doesn't come one some alternatives, those will take effect to avoid those, there will have to be a lame duck session. the president, whether he wins or loses, will still have a veto and hope that he can get some of his things through in a lame duck session. gwen: a quick question. >> medicare, the biggest criticism of the president's budget is he doesn't fundamentally answer the biggest budget crisis this country is facing is how do we make medicare more solvent? is it a fair criticism and did the president take an easy way out by not offering radical reforms to an entitlement program? >> most of the -- gwen: a quick answer. >> most of his savings would

come from providers. like care providers. not beneficiaries. although there would be some higher out-of-pocket costs for beneficiaries. house republicans, the con trast with paul ryan, is they want to remake this into a voucher program. and medicaid into a state grant. so there is a big difference there. and that's what they'll debate. gwen: ok. now moving on to the foreign policy front. worries are percolating again about what iran is up to. israelis are nervous about an apparent iranian nuclear buildup. new economic sanctions are being imposed against iran. and the drama is plague out in the strait of hormuz. a waterway that carries one fifth of the world's oil supply. martha is just back from a new navy destroyer that steamed through the strait this week which is very dramatic. how tense was it there? >> i was on a destroyer, a carrier, back and forth. you have briefings from all sorts of admirals and commanders and the one message they wanted to get out is this is just business as usual. it's not tense here. it's fine. of course the iranian navy will come out and check us out. we're going through this

waterway. which makes me believe they're pretty tense. because everybody is saying they're not tense. gwen: protesting. >> protesting a bit too much. exactly. when you go through the straight of hormuz and we've all read about it. it is very dramatic when you go through there. you can see them on one side and way, way off in the distance you can see iran. only about two miles wide. at one upon the where the shipping lanes are. and iranian craft that come to -- toward our boat. now, i think there would have been a whole lot more. but the seas were very, very high that day. i think the biggest fear of commanders right now is miscalculation. i don't think the iranians and it's the iranian revolutionary guard maybe that they're most worried about. that they'll come out and create some sort of incident. we've seen in the last few months, they come out and they harass the big ships. and the u.s. is like we really don't want to shoot back. we'll do anything but shoot back. they'll drop flares. they have a whole line of defense before they would ever

go kinetic. but i think what they worry about is that the iranian revolutionary guard might misperceive something that the u.s. ships are doing. and cause an incident. i think they're trying to deescalate that and stay in communication with them as much as possible. they do not want anything to happen in the strait of hormuz that will start something bigger. >> how realistic they could close the strait? >> they can definitely close the strait. one of the things people realize now is that all the iranians would have to do is say, oh, by the way, we mined the strait. because at that point, lloyds of london is going to say we're not going to insure the tankers anymore. they can mine them. the u.s., i asked one of the commanders, would they know they mined them and they have all kinds of surveillance to see if the iranians mine the strait, they don't think they're going to do it. they think that's a bluff. but if israel took action against iran, that certainly something that the iranians

could do. >> the iranian economy is already reeling from the international sanctions. wouldn't mining or closing the straits be a nail in the coffin? >> suicide. >> it would be basically suicide. and from what i've -- from what i've said, and talked to commanders, i think they do not think it would be mined. unless iran was attacked. that it is a blutch. unless -- it is a bluff. unless iran is attacked by israel and will not mine the strait because it would be really suicidal. >> what are the prospects for that? for the possibility of israel attacking iran? and sort of what's the u.s. thinking of what this country's response would be? >> you heard quotes from the defense secretary who did not deny those quotes in "the washington post." saying that he thought that israel would attack iran in the coming months. now, there are things that the iranians might be able to do to avoid that. but it is looking fairly likely that that could happen in the next six months.

the israelis see a threat that we don't. we feel we have time. the israelis don't feel that they have that time. they're in that very bad neighborhood. they feel threatened by the nuclear program. and they don't want that to cross a red line where even if they tried to take it out, it wouldn't do it. gwen: are sanctions enough to make israel step back for a moment on this? >> not unless they see absolutely the iranians stopping that nuclear program. i think the u.s. is clearly trying to say let sanctions work. let sanction work and we'll push iran into a corner but until they see some real change you might see an attack. gwen: martha, welcome back from your latest scary trip. before we go we want to honor one of our colleagues, "new york times" correspondent anthony shad who had died in syria after suffering an apparent asthma att anthony was a survivor of kidnap and assault and a two-time pulitzer prize and a

gifted teller of stories. martha, you knew anthony shadid, what made him different and what made him stand out? he really was a remarkable journalist. >> i'm not saying this for any other reason than it's true. he was better than all of us. he did the -- always got the whole story. he didn't just get the military. he didn't get the people on the street. anthony just kept working and working. he was a beautiful, passionate story teller. he wasn't just a reporter. he was a story teller. he made you read those stories, and you were there with him. you were learning something from everything anthony wrote. and a wonderful, wonderful man. gwen: it's one thing for us to set in our easy chairs and read the stories that he wrote. it's another one for someone like you who has been out there actually covering these stories and who can gauge the danger of trying to get those stories. does that make you look at it and think, gee, i want to go back or does it make you look back and say maybe the risks are too great? >> the risks are great. but anthony in this case died

of asthma. he took a lot of risk. people take a lot of risks for a lot of reasons because they think it's important. and that's what he thought. gwen: thank you, martha. and thank you all very much. we have more to say. but we'll have to say it online on our "washington week" webcast extra. you'll be able to find it at pbs.org/washingtonweek. keep up with daily developments online and on the air. the pbs newshour and we'll see you gen right here next week on "washington week." good night. the conversation continues online. see more from our panel about the week's top stories. it's the webcast extra. found only on "washington week" online at pbs.org. >> "washington week" was produced by weta which is solely responsible for its content. funding for "washington week"

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