joining me is peter orszag manager of budget, john heilemann the "new york" magazine and mark halperin and al hunt. mark halperin, tell us what happened today. >> the good news charlie is the house has passed this agreement which avoids the cataclysm of faults, i suppose lessons for credit down grade. that's really good news. the bad nooses -- news in the short term is this deal does absolutely nothing to address a pathetically anemic economy. the bad news in the long run is it really is delusional as far as dealing with long-term chronic deficit. so it's a good deal in avoing a default. it's pretty hard to argue and i find very many democrats or republicans who would argue it does anything significant. >> charlie: it will pass tomorrow and the president will sign tomorrow. >> it will and he will there's no question of to the. unlike the same sun's committee, unlike the gang of six, unlike all the plans conceived by peter orszag, this does nothing about taxes and does nothing about entitlement. and that's a problem. >> charlie: this is just the beginning or is this somehow give us a pe

joining me is peter orszag who served as obama's chief and now a vice president at citi group. >> great to be here. >> start with the news, why now? what was the new information, if there was any, that caused the markets to tank this week some. >> i don't think there was anything specific about this week. it was almost like we were distracted by the debt deal in the united states and turned back to reality and that reality was not altogether pleasant. you did have some weak consumer spending numbers and you also had ongoing problems in europe, obviously. mostly it was just looking back at that real world picture and saying that doesn't look so good. >> and you were part of the team that actually began to respond to this in 2008. or 2009 when obama was inaugurated. looking back, was it misunderstood at the time? do you think there were conceptual mistakes or policy mistakes that were made and should have been done differently? >> i think we maxed out how much the system could have absorbed by that i mean the political system in 2009. i think there are questions in 2010 whether there shou

at least that's what i was told by peter orszag. he said there's a little bit of a contractionary effect, but in terms of the direct negative effects, it won't be that great. we went through all of this in hopes of some greater goal. we didn't achieve anything that counts in a positive way of anything of great meaning or substance. >> other than as you say averting this potential collapse of the economy for the moment. >> right. >> gfinally, we look back at ths a year from now in terms of president obama and his presidency as he seeks re-election, how will we look at the way he handled this? >> i think there's some number of people who will say, and the president's people certainly are counting on the fact that, when all the smoke has cleared, that the way he handled himself throughout trying to appear to be reasonable, willing to compromise, the adult in the room, that that will be the lasting impression on people. right now people i think have a perception that the president having been pretty weak and having given in on a lot of

. >> rose: right.the proponents ol will say, charlie, thoughtful proponents of the bill, like peter orszag as i just head, will say there are a number of pilot programs, comparison effecte reseah, and then there's this new organization that's been set up to try to find ways to constrain costs, which they think are highly likely to work. we won't know for years probably how effective that really is going to be. the critics are more skeptical and only time will tell, but if those programs, or at least some of them do turn out to be effective on a pilot basis, it provides us at least with part of what we need to d for longer-term cost constraints. >> rose: in terms of the public, would the president have been better off t postpod healthcare reform until a hoped for second term? >> well, i'm not -- >> rose: because othe economicc. >> i'm not a political analyst. i don't know whether he would be better off or -- >> rose: it certainlycontributen success in 2010. it was their rallying cry. >> it was eful to them,it would appear. again, i'm not a political analyst. he believed deeply, rightly in m

peter orszag was with the administration and he stepped down and was replaced by jack lew.nd jared bernstein worked in the white house's economic advisory position, and ron bloom, he's the manufacturing czar to advise the president on manufacturing policy. the administration announced he was leaving his position today. at least as of now, no replacement announced. larry summers was a top white house economic adviser early on in the administration, he left as well. gene spurling who was a counselor to tim geithner, moving over to the white house. and you have jack liu, gene spurling and secretary geithner announced he'll stay through the presidential election, this is a smaller team than those there at the beginning of the administration. jack liu as the president plans his next move on the economy, issue number one to you. >>> when we come back, the president left washington today for dover, delaware, a very sober day for him as commander in chief and the country, the president traveling there to welcome home the remains of those 30 americans killed in the deadliest day in

. >> rose: you have a bet with peter orszag, the director of office of management and budget? >> yeah, but i'm talking settlement with him. >> rose: (laughs) what was the bet? >> the bet was by election time that it would be down to 7.3% and i thought housing construction would come back by that point and i may be wrong. i may be right but when... i guarantee when housing construction gets back to a million units-- and it will go beyond that, it could en be a million two, we will have... unemployment will fall dramatically. >> rose: to 6% at some snint >> certainly below 7%. >> re: by 2013? >> oh, i think... i think it's likely to happen... the feder reserve disagrees with me and bernanke is a lot smarter guy about that than i am. but we are working it off. i mean, we have never had this low a level relative to the popution for as long as i've known the figures on. i mean, this is a huge correction of a bubble that popped. >> rose: and what is necessary to take place over the next two years in order to increase household formation and decrease the amount of construction? >> we

people forget this eric, peter orszag, president obama's first budget director left. early, less than 18 months in the white house. he left, he was reported afterwards that the reason he left early, was he could get no one in the white house to talk about the deficit. that i think is an indictment of those first two years when the democrats controlled all of congress and the white house and put this -- put us in this position of the tipping point. now i think president obama bears the greatest burden. because he's the president, he has to lead the charge to do something about the debt. all of these plans that we're talking about, the debt would continue to rise. none of these are close to a balanced budget. >> eric: that's the problem this is a relevant conversation today, someone you knew died today, governor hugh carey of new york who faced horrendous problems. would you reflect on what we can learn from what hugh carey did facing the financial crisis in new york? >> for those who don't remember his history he was governor during the financial crisis in the mid 70s

the idea has taken hold -- david john of the heritage foundation and build a 0 -- build gail and peter orszag, we as part of the retirement security project, a nonprofit venture some years ago worked on these approaches and we put forward a way to automate and roland -- and roland --en l --enrollme --enrollment. many employers feel they're not ready to. they have an asset their employees could use to make saving easier which is their payroll system. one of the great strength of our pension system is it is employer based using that payroll system to make saving easier. rather than to amass a certain amount of liquidity a few thousand dollars worth of cash to contribute to an i.r.a. although you can contribute smaller amounts subject to the trustees rules but rather than having to think about where i am going to get a lot of money to make a meaningful contribution the employee with payroll deduction can benefit from the gradual allocation of a few percentage points in tax favored savings. it is pretty painless but it adds up. that payroll based saving mechanism which is the heart of the 401(k)

and john at the heritage foundation who along with bill gayle at the brookings institution and peter orszag when he was at brookings, as part of the retirement security project, nonprofit venture, some years ago, we worked on these approaches and david, john, and i put together a way to automate enrollment for people who don't have an employer plan. we have a voluntary pension system. many employers feel they are not ready to embrace this plan. they have an asset that their employees could use to make saving easier which is their payroll system. one of the great strengths of our private pension system is that it is employer-based. using the payroll system to makes it easier. that is rather than having to amass a certain amount of liquidity, a few thousand dollars worth of cash in order to contribute to an ira for example all you can contribute smaller amounts subject to the ira trustees role. rather than having to think about where you will get a lot of money in order to make a meaningful contribution to employee with payroll deduction would benefit from the slow, gradual allocation of a fe

heritage foundation who with bill gayle senior fellow with the brookings institution and formerly peter orszag when he was at brookings and is a part of the retirement security project nonprofit venture some years ago, worked on these approaches, and david, john and i put forward a way to automate enrollment for people who don't have an employer plan. we have a voluntary pension system employers on offer required to sponsor plan and many employers feel they are not ready to. if a however have an asset that their employers could use to make savings easier which is their payroll system. one of the great strengths of our private pension system is that it is employer based using the payroll system to make savings easier. rather than having to announce a certain amount of liquidity, a few of thousand dollars worth of cash to contribute to an ira for example, although you can contribute to smaller amounts subject to the ira trustees rules but rather than having to think about where a line going to get a lot of money in order to make a meaningful contribution, the employee with payroll deduction can