As the war in Ukraine grinds on, a look at the economic battlefield and how the conflict might permanently reshape the global economy. Diane talks to Sebastian Mallaby, senior fellow for international economics at the Council on Foreign Relations.
Guest Host: Susan Page
Former Godfather’s Pizza CEO Herman Cain takes the lead in the latest GOP presidential polls. Former Governor Mitt Romney comes in second, but he gains the support of New Jersey’s Chris Christie. On the Democratic side, President Obama raises $70 million in the last three months for his re-election campaign and the Democratic National Committee. Congress comes together to pass long-delayed trade agreements with South Korea, Columbia and Panama. However, the President’s jobs bill fails to get the 60 votes needed to advance in the Senate. A panel of journalists joins guest host Susan Page of USA Today for the domestic hour of our Friday News Roundup
- Doyle McManus Columnist, Los Angeles Times.
- Julie Hirschfeld Davis Congressional correspondent, Bloomberg News.
- Michael Scherer White House correspondent, Time magazine.
Diane and the panelists discuss the impact of the “Occupy Wall Street” and similar protest movements across the country, and respond to a listener’s email criticizing the panelists for being “out of touch” with what is going on with the life and intent of the movement:
MS. SUSAN PAGEThanks for joining us. I'm Susan Page of USA Today, sitting in for Diane Rehm. Diane will be back on Monday. President Obama's jobs bill is blocked in the Senate. Atty. Gen. Eric Holder is subpoenaed for a botched operation that allowed the illegal sale of firearms to Mexican drug cartels. And Herman Cain jumps to the top of national polls in the race for the Republican presidential nomination.
MS. SUSAN PAGEJoining us for the domestic hour of our Friday News Roundup: Doyle McManus of the Los Angeles Times, Julie Hirschfeld Davis of Bloomberg News and Michael Scherer of Time magazine. Welcome to "The Diane Rehm Show."
MR. DOYLE MCMANUSThanks for having us.
MS. JULIE HIRSCHFELD DAVISHi, Susan.
MR. MICHAEL SCHERERGood morning.
PAGEWe invite our listeners to join our conversation later in this hour. You can call our toll-free number, 1-800-433-8850. You can always send us an email at firstname.lastname@example.org or find us on Facebook or Twitter. Well, Julie, we had the seventh Republican presidential candidates' debate Tuesday night, New Hampshire. I know you were there, Bloomberg News, one of the sponsors of the debate.
PAGEWhat's the news out of this debate, do you think?
DAVISWell, the big number, I think, out of the debate was nine, as in 999, Herman Cain's tax proposal that he's -- that's been out there, actually, for a little while but really got the lion's share of the substantive debate in terms of economic policy at the forum. And Mitt Romney, as usual, performed very smoothly. People didn't really challenge much of what he had to say on creating jobs and on what to do in the economy.
DAVISRick Perry, who kind of had to have a good night, hung back a little bit. He didn't really go after anyone in particular. He didn't really answer a lot of criticism that he got from the other candidates. And following that, I think, you know, he has a lot of challenges in terms of trying to pick back up the momentum that he had, which now belongs to Herman Cain, who, as you said, is at the top of the polls.
PAGEYou know, what's interesting in these debates, Michael, at most of the debates, the frontrunners are seated or stand in the middle, and the lower your poll ranking, the farther you're out on the side. Herman Cain started out kind of toward the end, and he's worked his way right up to the middle. Is he a real frontrunner, do you think, for the nomination?
SCHERERHe's not, and there are a couple of reasons. One, he doesn't have the organization in any of the states, or even as a national campaign, to really capitalize on this. Second, he has a real challenge in facing scrutiny over his plan. I mean, there was a wonderful exchange in that debate where one of the moderators asked, where did he get his economic advice from?
SCHERERAnd he mentioned someone no one had heard of, who he said was an economist, who turned out not to be an economist, who he said was from both Texas and Ohio at different points in that question. I mean, there are real questions about this 999 plan. Cain is selling it as something that is bold and simple, and that's really what he's saying is great about it. First, it's 9 percent tax on corporations, 9 percent tax in income and then a new 9 percent federal tax on sales of any new product.
SCHERERWhat he's not saying and what the electorate is now sort of digesting is, first, a new national federal sales tax is really upsetting to a lot of conservatives 'cause they see it as a new way in for the federal government to just suck money out of the economy. And, second, it's a really regressive tax. What -- if 999 goes into effect, you're essentially raising taxes on a huge section of the country -- the poor and the middle class who tend to vote, they're there, and also who have suffered the most over the last decade.
PAGEWell, where they especially don't like a sales tax would be the state of New Hampshire...
PAGE...which doesn't have a state sales tax. Now, Mitt Romney did get some good news right before the debate, a few hours before the debate, Doyle. Chris Christie, the governor of New Jersey, endorsed him. How important do you think that is?
MCMANUSThat's enormously important, Susan, in what you might call the other contest here. There are really, in a sense, two races going on in front of our eyes. One is for the hearts of the Tea Party adherents, and that's the one where Rick Perry had it for about a month and then sank like a stone. Now, Herman Cain is their darling.
MCMANUSAlthough even Republican pollster Bill McInturff, when asked about the Herman Cain phenomenon, rather impolitely used the word soufflé, something that rises quickly but is destined to fall. But the other race is for the fundraisers, the governors, the party infrastructure, everybody who's not a full-fledged Tea Party activist. And slowly but surely, like barnacles on a ship if you like, all of those -- not all of them -- but those are gradually accreting to Mitt Romney.
MCMANUSChris Christie was especially important, of course, because he is a governor whom Tea Party adherents love and revere, and Chris Christie basically appeared as a character witness to say, you may not like Mitt Romney much, but he is a real Republican, and, importantly, he's the most electable.
PAGEBut, you know, The Washington Post yesterday had a headline on their front page describing Romney as the emerging inevitable nominee. And I thought, seems premature to say that since he seems unable to get his support above about 25 percent.
DAVISWell, one of the things that was so unsettling to the Romney campaign about this Christie flirtation and the obsession with Christie was it underscored the degree to which Republicans really are not satisfied with what they have in front of them. And, of course, Romney is, or at least was, prior to this week, the frontrunner in that field. So the big way, I think, this helped Romney was it helps him to argue that, you know, he is not just who you're settling for.
DAVISHe is a person who -- this hero of the Tea Party, this hero of fiscal conservatives -- really feels is the right person for the job. Now, I don't know whether that's going to be persuasive to people outside New Jersey. Some people say that these endorsements are more important for the person who's making them in their state than they are for the person who's getting them.
DAVISAnd it remains to be seen, really, whether Romney can get above where he is because he's been running for the better part of the last decade, and he hasn't really moved much. As Doyle said, other candidates have -- Michelle Bachmann came up and down, Rick Perry, now Herman Cain. But he hasn't really budged very much, and he's going to have to in order to be able to be a successful candidate.
PAGEAnd I thought the really good news for Romney wasn't so much that Gov. Christie was endorsing him but that the announcement was not of Gov. Christie's own presidential campaign. Talk about Rick Perry's situation, Michael. I mean, here's a guy who started out -- he announced he was running, and he instantly was at the top of Republican polls.
PAGEHerman Cain's rise has come largely from some conservative Tea Party, social-conservative voters who have peeled off Perry and kind of landed on Cain, at least for the moment. He's giving a big speech today. Do you think that will help?
SCHERERHe hopes so. I mean, the best pundit description of where Rick Perry is came, actually yesterday, from his wife, Anita, who was speaking in South Carolina, who went on at length about how she feels her family has been brutalized by the party and by the candidate. She even hinted at one point that the other candidates were coming after Rick Perry because of his faith, which is a pretty odd claim to make.
SCHERERI mean, he has really had a rough few weeks, not only because the debates have been subpar, to be kind. I mean, he really has appeared not to be making sense at times, to be kind of out of it, not to be on top of, you know, his own material, but also because he hasn't been able to bring to the debate, or to the conversation, any real policy idea substance. And that's what he's trying to fix today with this speech.
SCHERERIt's going to be a speech focused on energy and energy jobs. It harks back to a long Republican tradition of, you know, when the economy gets rough, saying, drill, baby, drill. He claims that, you know, more than a million jobs can be created if his plan is put into place. The fine print is always the same fine print when you're talking about more drilling and energy.
SCHERERThese are not immediate jobs. These are long-term jobs if they come to pass. It's not going to be a stimulus that's going to lower the unemployment rate much in the next year.
MCMANUSBut it really seems odd and maybe symptomatic of the Perry campaign that it's taken him eight weeks to issue anything that looks like an economic plan, and this isn't even the whole economic plan. This is just the energy plan, and he promises that the other parts of the economic plan are coming later. Well, it's been clear all year that this race, especially on the Republican side, was about the economy, jobs, budget and the fiscal health of the country.
MCMANUSSo if Gov. Perry -- Gov. Perry says, well, I've only been in this thing eight weeks, but, you know, those of us who are covering this know that he was wrestling with the idea and praying over it for many weeks before that. Maybe one of the things he should have prayed for was an economic plan.
PAGEOne of the things we're waiting to learn -- we know the votes are approaching fast. The opening Iowa caucus is the New Hampshire primary. We don't know exactly how fast. And, Julie, the secretary of state of New Hampshire, Bill Gardner, who is a legendary figure because he has the power to set the date of the nation's first primary, he's threatening to set this primary in December. Do you think that's going to happen?
DAVISI don't think it's going to happen. Right now, I think that there's a lot for posturing going on and this mainly started a couple weeks ago when Florida decided to break the rules even to a greater degree than most people expected they would and move their primary up to the end of January. And that set off kind of a cascade of the other early states trying to leapfrog in front so that they can have, you know, their day in the sun, their relevance be more relevant toward the front of the process.
DAVISBut Iowa and New Hampshire jealously guard those -- you know, their first in the nation status, as Iowa, the first caucuses, and New Hampshire, the first primary. And they don't just want to be first by a day. And, of course, by state law, they have to have a certain buffer of time before and after. They really want to be able to drive the process the way they have in the past.
DAVISAnd so what Gardner is doing, I think, we see is, you know, trying to get the other states to step off a little bit and give them the space that they have traditionally had. I think it's more likely we're going to see a New Hampshire primary toward the beginning of -- you know, Iowa is talking about Jan. 3, so probably within a week or 10 days after that. But right now, the candidates are watching this really closely because we're already getting a lot of compression in the time that they have to campaign in these key states.
DAVISAnd Herman Cain -- I was with him the day after the debate. He was talking a lot about how this has changed his calculus now. He has to ramp it up even more quickly than he was going to have to. And as Michael said, that's a big challenge for him 'cause he has hardly any organization anywhere where he really needs it.
PAGEIn fact, that's one reason, I think, a lot of reporters don't take the Cain campaign as seriously as you might, given his poll position, because it's not clear that he's even going to be able to get on all the ballots since those deadlines are really coming out fast, Michael.
SCHERERHe spent much of the last several weeks on a book tour. I mean, he wasn't even campaigning. He suspended his campaign, essentially, to go on a book tour, and then he's been appearing at the debates. I think the question about the December primary for New Hampshire is whether New Hampshire discounts its own importance by moving its primary either before Christmas or during a week between Christmas and New Year when the American people are not -- you know, they're with their families. They're on vacation.
SCHERERThey don't want to be paying attention to this stuff. The importance of these early primaries and caucuses is that the nation pays attention to them. They respond to them. They listen to the candidate's acceptance speeches. And by moving into December, I think New Hampshire really, really creates a problem for itself.
PAGEThat's Michael Scherer. He's White House correspondent for Time magazine. And we're also joined this hour by Julie Hirschfeld Davis. She's congressional correspondent for Bloomberg News. And Doyle McManus, he's a columnist with the Los Angeles Times. We're going to take a short break. When we come back, we'll talk about that jobs bill that failed in Congress, and we'll take some of your calls. 1-800-433-8850 is our toll-free number. Stay with us.
PAGESo the president's jobs bill failed in the Senate, 50 votes for it, 49 votes against. Not enough, Julie. They needed 60. Why? You'd think they'd just need a majority.
DAVISWell, as with almost everything these days, anything particularly that's controversial, they needed to get cloture to get past the procedural hurdle and actually get an up or down vote on this bill. And they just weren't able to get there, not only because Republicans were united in opposition, but also because there were a couple of Democrats who did not want to go this bill.
DAVISAnd there -- of the two -- there were two who actually voted not to proceed to it, Jon Tester from Montana and Ben Nelson from Nebraska. But there were also other Democrats who voted to proceed to the bill, who they voted for cloture, but they weren't sure they were going to vote for the underlying measure in the first place, this $400- and almost $450 billion measure that President Obama has been going around the country and to swing states to promote.
DAVISThey weren't even completely bought into it because there's a lot of controversy right now on, you know, what is going to do the job in terms of creating jobs and reigniting the economy? And, particularly, those Democrats who are up for re-election do not want to be on the wrong side of that issue as they get ready to face the voters.
DAVISSo it was really an absence, a total partisan breakdown in terms of the ability to persuade any Republican to go along with this, and also a weak hand in terms of in-cycle Democrats who are going to face voters and weren't sure they wanted to go along either.
PAGESo, Doyle, the president has talked about this as his top priority right now, to try to address 9.1 percent unemployment in the country. What happens to his proposals now?
MCMANUSWell, at this point, the president and the Democrats try and split them up into more appetizing bites. And, in a strange way, the president may be better off doing that because, once again, he had sort of lost the message war. The bill, as a whole, got slammed by Republicans as $500 billion down the same stimulus rat hole. And if you polled that question, as The Wall Street Journal and NBC News did, yeah, a majority said, oh, yeah, we don't want that big bill.
MCMANUSBut if you broke it down, if you lay it out, okay, well, do you want to extend the payroll tax, do you want to extend unemployment benefits, do you want to fund a new infrastructure, and even, do you want to increase taxes on the wealthy? Majorities were in favor of all of those individual pieces. So, ironically, Barack Obama may come out looking better once he breaks it down into bites.
PAGESo you think some of these provisions will actually pass?
MCMANUSYeah, yeah, yeah, in some form. Now, there's going to be an enormous wrangle over how big the payroll tax cut extension is. The president wants to, in fact, expand it. That's going to be fascinating, but some version of some of these measures is going to pass.
PAGEYou know, I thought it was a sign of how poisonous the relationship is between Republicans on The Hill and The White House. When the president and Speaker John Boehner had a telephone conversation yesterday and the speaker's office then came out with a readout from the phone call, that made it clear it was a very contentious exchange. Tell us about it, Michael.
SCHERERThe -- I mean, there still is no love lost. You know, the Boehner-Obama relationship, which really developed over the summer during the debt limit negotiations is a fascinating one because, in a vacuum, these two guys get along. And if they weren't representing different constituencies, if they didn't have other competing electoral pressures on them, I think they could work together, and they would be quite happy running the country together.
SCHERERBut the reality is that John Boehner is -- especially after this summer, a severely weakened speaker who has to represent not just his own party's hopes, but also the Tea Party wing of his party. He's shown since then he still cannot even bring them along on pretty minor votes. And so anything that shows he's getting along or being chummy or even agreeing when they agree, which was the case here -- they agree on these trade deals that they passed -- he can't go along with.
SCHERERI think that frame where both parties know they cannot show any love for each other, probably until the next election, is sort of defining this debate. You know, the jobs bill dying this week in the Senate was a foregone conclusion from The White House's point of view when they proposed this. They always expected it would die. But from The White House point of view, they've been making some progress.
SCHERERPolls have started to shift from early September to now in -- when you ask which party or which leader do you see -- do you trust more to create jobs, President Obama was more or less even with Republicans in early September. He's pulling 10 or more points ahead on that question. Once they started splitting these votes out, the White House is hoping they can very slowly, you know, begin to take advantage.
PAGEYou said that there's no -- neither side is willing to show much willingness to compromise, at least until the election. And, of course, that's one of the things that's most frustrating to America. That's what you really hear when you go out and talk to voters, that they don't understand why people in Washington can't seem to make comprises, get some things done. Is there any reason to think that after the election in 2012, that'll change?
SCHERERI mean, the voters have been very consistent since 2006. They're unhappy with the direction of the country, what's happening in their own lives, and they respond by trying to turn out whoever has power. And in doing that, they are attracted not to moderates in the middle. They're attracted to people in the extreme.
SCHERERSo, in a lot of ways, the American people are very unhappy with what they have now, but the American people voted in the last Congress in 2010. And I think the way we have -- you know, this election going, we're going to have a very divisive 2012 election, presidential election.
SCHERERBoth extremes will be riled up. Even if Mitt Romney is the nominee, he's relatively moderate on policy. You know, we won't come out of that election holding hands, whoever the victor is. And I -- it's one of the great puzzles of American politics. How do we get out of this cycle we're in, where people are unhappy with the way Washington is and then respond to it by voting more, you know, principled extremists into office to try and remedy that?
DAVISWell, and it also feeds on itself because you have a Congress right now that is populated by people who are elected in districts that have been drawn to be basically 50/50 polarized around the country. I mean, if you're in that kind of environment, it's very difficult for any speaker who's dealing with the president of a different party to ever be able to -- as Michael said, you know, bridge that gap on important issues.
DAVISAnd, you know, we did see, following the debt ceiling controversy over the summer, the Republicans pulled back a little bit on their rhetoric against what President Obama was proposing came out in September and made that speech. They were a little bit more reticent to go after him in this brutal of a way because they were seeing in the polling that the public is turned off by that. They do not like the idea that Republicans are just going to say, no, no, no, no to the president.
DAVISBut once they start to see the substance of the compromises that might get struck, they don't like that either. And leading up to the debt ceiling deal, we saw that the component parts of that issue were popular with voters, that they would've been able to buy in to one or the other pieces of this deal that John Boehner and President Obama were trying to cut.
DAVISBut it just collapsed under the weight of its own substance, and I think that's kind of where we are. We see this divide between what people think that they want, what the public says that they want and who they're voting for and what they'll support when it actually comes before them.
PAGEBut, Doyle, you know, one of the things that some people are watching with the most hope is happening in your state. Voters changed the way congressional district lines are drawn in California with an idea of not making them these odd-shaped, gerrymandered districts that are almost all Republican or almost all Democrat. Do you think that will have an effect?
MCMANUSIt will certainly have an effect on the California congressional delegation. It's a remarkable outcome because there you have a state with a solid Democratic majority where the voters, in large part, because of California's unusual system of initiatives and -- where voters can directly change the Constitution, you know, voters unhorsed to the Democratic legislatures ability to gerrymander. And so there are Democratic incumbents from -- in the House from California who are now in the same district.
MCMANUSThis is kind of unimaginable dystopian science fiction for most members of Congress. Is that going to spread to the other -- actually, there are few states that have done that. In fact, in general, it's a wonderful idea, but in most states, it's just not possible. Right close to home here in the state of Maryland, you see the exact opposite going on, where a Democratic legislature is gerrymandering and trying to gerrymander the Republican Party out of existence.
PAGEYeah, there's a very odd Maryland District in the works, and in Ohio, there's a congressional district that looks like a stapler trying to protect an incumbent member of Congress. Well, we talked about how Congress is unable -- been unable to do anything on the jobs bill. So far, they did pass three long-awaited free trade pacts this week that have been waiting for about five years. Michael, good news?
SCHERERIt is good news. I think you saw today the United Auto Workers came out in favor of this. Whenever you have, you know, a free trade deal that has significant union support, you know something's going on. Traditionally, unions have been against that.
SCHERERThe president held out for a long time to secure some compensation for people who would be hurt by the trade deal. But economists will tell you that when you lower trade barriers over the long term, even though some industries or individuals will get hurt, you increase employment. And projections for all these trade deals are, you know, increases of 80-, 40,000 jobs each trade deal, and that's good news for the country.
PAGEYeah, the South Korean president is in D.C. now for a state visit, so this was kind of a victory lap for him since the South Korea trade pact was one of them. We have a report from the Associated Press in Denver this morning that dozens of police in riot gear are pushing the Occupy Wall Street protesters outside the state capital in Denver.
PAGEThey started taking down their tents at about 3:30 in the morning -- I assume most of the protesters were asleep at that time -- and are moving them out, so far, a peaceful exercise. This Occupy Wall Street movement, Julie, it seems to be gathering some steam.
DAVISIt is gathering steam certainly in Lower Manhattan and around the country. I mean, we've seen sort of protests of varying sizes. I don't know how large the one in -- outside Denver is, but, you know, we've seen some small ones here in Washington, in New Hampshire, where they had the presidential debate. There was a small one there.
DAVISI think that people are really starting to get engaged in what they see happening in New York, partly because there is so much pent-up frustration about the job situation, the high unemployment and the inequality that people see between -- among the classes. And what both -- what politicians on both sides of the aisle would tell you is that the other side is really stoking that. Republicans are going after President Obama right now.
DAVISMitt Romney did earlier this week, and, you know, he's being divisive. He's kind of -- he's feeding into this, and -- by proposing jobs plans that are funded by more taxes on the wealthy, he is engendering this class warfare. And then, of course, Democrats will say, well, Republicans, who are just asking us to just slash taxes as the answer to everything, are really trying to, you know, deepen this divide.
DAVISBut, you know, whoever you think is responsible, I think the public is so frustrated right now with the inaction that they see, in response to the high unemployment rate, that this is kind of capturing the imagination in somewhat the same way that the Tea Party movement did, leading up to the 2010 elections.
PAGEDoyle, is it clear what the Occupy Wall Street protesters want?
MCMANUSNo. And that is the enormous gaping defect in that movement. It hasn't yet spawned -- it doesn't have to have individual leaders. The Tea Party doesn't have individual leaders, but it does need a program with three points or five points or 10 points. Now, people in that movement are slowly muddling toward some kind of a program, and they are getting help from people in progressive organizations on the left, from the labor union movement.
MCMANUSAnd it appears as if the focus is going to head toward higher taxes on the rich. We're going to have a kind of a tax showdown between the Tea Party and the Occupy Wall Street movement, but it's going to take some time to get there.
PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." Michael, I was so interested in a poll that your magazine had on public approval of Occupy Wall Street. You know, I'm from Kansas. I don't think the Occupy Wall Street folks are probably that popular where I'm from. But you found that 54 percent of Americans view those protests favorably. I just find that a stunning number.
SCHERERAnd it was double the number who had a favorable view of the Tea Party. And the Occupy Wall Street movements don't have an action plan right now, but they do have a common complaint. And it is this idea of inequality, economic inequality, and the idea that those with the most money, who have not been hurt as much as others in these last 10 years, have sort of gotten away with something that the rest of the country wasn't able to get away with.
SCHERERI do think this is something that is going to continue to build. You know, the headlines today will be about what's happening with the people who have tents in various cities around the country. But the real import of the Occupy Wall Street movement is not the people who are actually sleeping in whatever city square. It's the people at home watching this, feeling sympathy, who may come out this Saturday.
SCHERERThere's going to be a number of rallies around the country. Organizers are already talking about Nov. 17 as a big day for protest around the country. I mean, these are the sort of things that tend to build. We've seen it with the Tea Party, which started basically on Twitter, you know, a bunch of people talking about what someone on CNBC had said, and built over time into something really big, not because of the tri-corner hats or the nutty things that any individuals were saying in any single protest, but because the complaint was something broadly felt by the American people.
PAGEActually, the surprising thing to me is at a time when three-fourths of Americans say the country is in the wrong direction, that we haven't seen the emergence of a third party or an independent candidate 'cause there's such high dissatisfaction with the politics as usual that people see.
MCMANUSAnd -- well, there are people out there -- including Ralph Nader, who ran as a third party candidate once himself -- who are trying to gin up interest in that. There is, as many of your listeners know, a group called Americans Elect that's trying to put together a Web-based third party movement. But the real question there is, okay, so who is the magic centrist who's going to come out of nowhere?
MCMANUSIs -- there is not really a Ross Perot, a Colin Powell -- to name figures who were prominent in earlier races -- who fits the bill. Michael Bloomberg, the mayor of New York, is said by some of his intimates to dream of himself in that role, but it's kind of hard to think that Michael Bloomberg is going to run terribly well in your native Kansas.
PAGELet's go to the phones. We'll talk to Jim. He's calling us from Durham, N.C. Jim, thanks so much for joining us on "The Diane Rehm Show."
JIMGood morning. I just have a comment to make about what I perceive as the obstructionism and the reason behind it. The years 2000 through 2008 were disastrous for the U.S.A. Therefore, they were disastrous for the GOP. The only thing at that time that could have been worse for the GOP would be for Democrats to swoop in and fix things. Republicans knew that, and they've been blocking that effort ever since.
PAGEAll right. Jim, thanks so much for your call. Julie.
DAVISWell, that's certainly one of the problems underlying what we see going on on Capitol Hill right now, is even if there were, as Michael said, any glimmer of willingness to compromise or a common ground -- and there are, you know, in this jobs package that President Obama has proposed, some things that both parties like, and we may see those happen. But there is just such a political unwillingness to really give any ground to the other side for fear that the Republican supporters are not going to like the outcome.
DAVISAnd with President Obama's poll numbers, what they are -- it's really not surprising that they would not want to be seen as finding any common cause with him. So I think that's -- you know, that's a big part of the inaction that we see. And we are going to see President Obama -- he's already doing it a little bit. I think we're going to see him increasingly do this, run against that as sort of the core of his re-election bid.
PAGENow, President Obama says Republicans haven't come up with a jobs plan of their own, so they should pass his. Is that a fair point? Have Republicans, Michael, come up with a jobs plan of their own?
SCHERERThere was a jobs plan introduced yesterday by John McCain and several other senators, Republican senators. John Boehner, in the spring, put out what they call the jobs plan. They are different in kind from what Obama is talking about. These are not plans that -- they're called jobs plans, but they're not plans that are focused on creating lots of jobs or markedly moving the unemployment rate in the next year or two, which is what Obama is looking at.
SCHERERThese are basically a collection of longstanding Republican policy desires, things that include everything from repealing Obamacare to, you know, tax reform, and they're really a rhetorical tool.
PAGEWe're going to take another short break. And when we come back, we'll talk about the subpoena that a House committee issued for Atty. Gen. Holder. Stay with us.
PAGEWelcome back. I'm Susan Page of USA Today, sitting for Diane Rehm. And with me in the studio is Doyle McManus from the Los Angeles Times, Julie Hirschfeld Davis from Bloomberg News and Michael Scherer from Time magazine. We have an email from Tom who writes us from McLean, Va. He says, "I had to pull over to write this email on my smartphone because I nearly ran off the road when your panelists talked about how neither side has shown a willingness to compromise.
PAGE"Excuse me? The Democrats and President Obama, especially, have shown nothing but a willingness to compromise. It's the Republicans who have walked away from every negotiation and slapped away every outstretched hand. It would be nice if the establishment press reported this fact just once." Well, Tom, first of all, thank you for pulling off the road before sending us this email. What do you think? Does Tom make a fair point?
SCHERERI do think -- I mean, definitely, over this summer, that was the dynamic, that President Obama, during the debt ceiling debate, was trying for the middle ground. He put a lot of political capital in this, and he got burned pretty badly when Speaker Boehner couldn't come along with him. The problem with the complaint of, you know, who is compromising more or less is that there are no definitive lines here.
SCHERERAnd Republicans stretched their dissatisfaction and anger back to -- early in the Obama administration when President Obama came in and pushed through a stimulus bill along party lines that was different from what Republicans wanted at the time. President Obama said, at the time that I won, you know, in a meeting with Eric Cantor, that's why we're doing this. So, you know, it's hard at any -- to say, definitively, one side is not compromising at all or one side is only compromising.
SCHERERI mean, there were compromises on both sides offered in -- during this summer. It's also true, though, that President Obama was definitely pushing much more to the center than Republicans were.
MCMANUSAnd if you put the question in the present tense, the age of compromise is now over until January 2013 at the earliest, and maybe not even then.
PAGEAll right. Tom, thanks for your note. Let's go to Joe. He's calling us from Houston, Texas. Joe, you're on the air.
JOEHi. I don't think this bill is quite the right one although it's a big step in a right direction. We should be actually trying to recreate some of the middle-class businesses that we had. That means we should be putting all of our money into alternative energy investments. If we have to pass terrorists to ensure that we protect our industry while we grow, we need to do that. That's where the decent jobs are. The bill that's presently out there will eventually decrease salaries for the middle class by 30 percent.
JOEYou know, this -- the whole idea of privatizing our government is a terrible idea. We've gone through this experience for 30 years now, and it's been to the detriment of -- that's why the 99 percenters are there.
PAGEAll right. Joe, thanks for your call.
DAVISWell, we did see in the first stimulus bill that president Obama proposed and that Doyle just referenced that, you know, this is a more traditional approach to how to create jobs and how to jumpstart the economy. And he did propose a lot of investment in green jobs and a lot of infrastructure spending, some of which he's also proposing a second time around in this new jobs bill. The problem, as we've discussed, is that Republicans don't want to hear anything about infrastructure spending anymore unless it's paid for.
DAVISBoehner made that point on the phone with the President yesterday, not that we're totally against infrastructure spending, but we need to find a way to pay for it. And, frankly, there just isn't the money there as they try to grapple with the deficit problems that they have. I think, politically, it's very difficult to do what the caller is suggesting, given the recent experience of the stimulus bill. People see that, you know, nearly $1 trillion dollars was spent, and the unemployment rate is still 9.1 percent and the jobs are not there.
DAVISIt takes a long time for some of these things to come to fruition, and it's not, unfortunately for President Obama, happening quickly enough to be able to engender the will to sort of invest more money in that approach.
PAGELet's go to Gaithersburg, Md. and talk to Ken. Ken, thank you for giving us a call.
KENYes. I'm calling because I'm frustrated. Sometimes the media don't pay attention or challenge candidates when they say things that are patently false or nonsensical. Herman Cain, in the last Republican debate, was asked why people should pay 9 percent tax on essential items. And he said, well, you don't understand. The first thing I do away with is the 15.3 percent payroll tax that most Americans pay, and that means that you'll have 6 percent more disposable income.
KENWell, most Americans who pay a payroll tax don't pay 15.3 percent. They pay 7.65 percent because the employers pay the other half. So that means they don't have 6 percent more disposable income. They have 1.35 percent less disposable income. Why isn't it news that Herman Cain doesn't, A, understand his own proposal, B, know how much people pay in taxes, or C, is a liar? Why isn't that news?
PAGEAll right. Ken, thanks so much for your call. Who would like to respond?
MCMANUSWell, I'm going to defend our colleagues who were in that debate a little bit because you can't really eliminate every piece of a candidate's positions in the very short time available in that back and forth. The free-market economist in me would like to say well, you know, actually, if you take those payroll tax away that -- the consequence ought to be that all of that money ends up flowing to payroll because it's payroll cost to the employer.
MCMANUSBut that's something that I think Ken and I would probably just end up arguing each other silly about. But what we are now seeing is finally some belated attention to Herman Cain's 999 plan, which not only has a 9 percent sales tax that would apply to groceries right now -- in other words, it would be terribly regressive.
MCMANUSIt would be the -- but his ultimate aim is to replace all of those taxes with a 30 percent sales tax, which would be the kind of inverse of the Warren Buffet idea. It would guarantee that Warren Buffet's secretary pays a lot more in taxes than Warren Buffet does.
PAGEGo ahead, Michael.
SCHERERCain also said at that debate that you have to understand that used items wouldn't be taxed, so if you get used milk or used beer or used groceries, you wouldn't have to pay taxes. I think the caller has a point. The press tends to not focus on deep dives into the policy matters of candidates who are not registering big in the polls. Cain is now registering big in the polls. He is going to get his attention.
PAGEWe've gotten several emails along this line. This one is from Jeff. He writes, "Basically, wouldn't the 999 plan eviscerate Social Security? Now, most of the right would appear to favor this idea anyway, but could your guests talk about the effect on Social Security and other social programs?
MCMANUSWell, actually, Herman Cain wants to replace Social Security anyway with a plan based on the one in Chile, which is basically a privatized plan, although he hates it when anybody calls it privatized. But that's what it is, a private insurance system, so no skin off Herman Cain's nose. But, you know, as Michael said, Herman Cain is about to get a lot of attention to all of his proposals finally, and I don't think that attention is going to be good for his campaign.
PAGEAll right. Ken, thanks so much for your call. Let's go to Chris. Chris is calling us from Cincinnati. Chris, you're on "The Diane Rehm Show."
CHRISHi. I think everybody is missing the point about Herman Cain. And the reason his numbers are so high is because people are tired of the same old rhetoric from Republican-Democrats. We look at Herman Cain, and we see somebody with a new idea who doesn't have an arm up their back with somebody moving their mouth because that's all you get with all the other candidates from either party.
PAGESo, Chris, you -- are you yourself a Herman Cain supporter?
CHRISI'm looking very seriously at him. I like his ideas. I find it -- everybody paying a sales tax means that everybody pays tax. I mean, we have this whole economy that doesn't pay tax. And every year at tax time, depending on how many kids they have, they get a big check, and they go out and party and buy stuff.
PAGEAll right, Chris. Thanks for your call.
DAVISWell, I think that Chris has put his finger on what is, at this point, Herman Cain's biggest strength, which is that people hear him starting a conversation about fundamental tax reform, and to a lot of people, that's very appealing. It's almost as if, and I agree with Doyle and Michael that he is going to get the scrutiny now on the substance of his plans more so than he has up until now because of his standing in the polls. Bloomberg News has done a lot of analysis of the 999 Plan. I'm sure other news organizations will do so as well.
DAVISBut he is the only candidate, if you looked on that debate stage, who is actually proposing something that is a fundamental revamping of the system that we have now. And a lot of people with the high level of frustration find that to be very refreshing. And it's almost as if the substance of the ideas do not matter as much as the fact that he is willing to say something that is counter to what people have been hearing for the last decade or decades.
DAVISHe actually said on Wednesday -- I was out with him in New Hampshire. Someone asked him a question about how would your plan deal with -- he had talked about there are going to be tax advantages for businesses who buy U.S.-made goods. And someone said, well, what about a computer that's a U.S.-made computer, but it's made with components from Malaysia and assembled in another Asian country? What about that?
DAVISWould that face a tax? And he looked at us, and he said, I have no idea. And, actually, I think people find that refreshing on the face of it. I think, at first blush, people really like that he's willing to say something like that, which you're not hearing any other presidential candidate say. You would never hear President Obama say something like that.
DAVISI do think, when we delve into the details of how these proposals are going to affect people, and particularly middle class people, and particularly the kind of swing voters that he's going to have to be able to win over, to win an election or win the nomination, I think that some of the veneer will come off.
SUSAN PAGEMichael, the House's main investigative committee has subpoenaed the Atty. Gen. Eric Holder and some other Justice Department officials. What's -- what is the issue here?
SCHERERThere was a program called Fast and Furious, which was run by the ATF that allowed guns to -- the investigation to track illegal guns as they move through the system. But in the process of the investigation, U.S. government officials were allowing illegal guns to get into the hands of criminals. It was a huge mistake. Everybody in the government has recognized that.
SCHERERThe head -- the acting head of the ATF is no longer the acting head of the ATF. But we are now in an age of the Republican investigation, and Republicans area picking and choosing their spots. So far we've seen repeated Solyndra emails requested.
SCHERERThe failed solar company, the first company to receive a loan guarantee from the Obama administration. Every Friday now, it seems we get another dump of these emails from the House Energy and Commerce Committee. Issa, who runs the investigations committee, has sort of been behind the ball. He's chosen now to go after this.
SCHERERAnd it seems like what he's after is some evidence that people high up in the Obama administration knew what was happening, even though they've said they didn't know what was happening, and that will be what we'll find out from the subpoena.
PAGEHow big a problem, Doyle, do you think this is for the Obama White House?
MCMANUSIt -- well, it's potentially a big problem if it turns out that higher ups did know more about the program than they have chosen to say. The Narrow problem here is that Atty. Gen. Holder, back in May, testified on the issue and said he thought he had probably heard about Fast and Furious for the first time only in the last few weeks. It turned out that he had been briefed, not clear whether he had been briefed on the program under that name.
MCMANUSNot clear how much of it he knew. In any case, it's a perfectly legitimate line of inquiry, and it's what happens when the opposition party gets a hold of one House of Congress.
PAGEI'm Susan Page and you're listening to "The Diane Rehm Show." We had a caller I was about to take, who has, unfortunately, just hung up. But the message from the screener was that this person wanted to say was clear what Occupy Wall Street protestors want. We want jobs. We've gotten a tweet also that -- from someone saying, "Please talk about the Occupy Wall Street victory this morning in Zuccotti Park. It is rare to have such a clear success of people power." Tell us about that, Julie.
DAVISWell, you have these protestors who are -- as Doyle said, they haven't made totally clear what they want. But as I said before, it's definitely been, you know, talked about by most of the people who are down there, that incoming equality and the lack of jobs are, you know -- are what's brought them there. And there was a lot of pushback when Mayor Bloomberg was said that he was going to go into Zuccotti Park and clear the protestors so they could -- he said, so they could cleanup the area.
DAVISAnd, you know, it engendered a huge pushback, and these people want to be heard. They want to be seen. They don't want to go anywhere. We saw Eric Cantor, the majority -- the House majority leader, he's Republican, say something -- call them a growing mob at the Values Voters Summit last week. And that engendered the huge amount of pushback such that even Eric Cantor, who's a Republican leader, has backed off of that and said, well, you know, these people, they have to be heard.
DAVISNobody quite knows where this movement is going, so nobody wants to be on the wrong side of it. It's growing, not shrinking. So, I think, that's sort of what we're seeing happen here.
PAGEYou know, we -- one of the things that you hear from Occupy Wall Street protestors is that white-collar criminals aren't getting punished. Bankers, who took risky actions that endanger our economy and hurt Americans everywhere not being punished. We did have a big prison sentence handed down this week to a hedge fund billionaire convicted of securities fraud and conspiracy in May. Tell us about that.
MCMANUSWell, and the defendant here was Raj Rajaratnam. He was the head of a hedge fund who had a -- well, what we hope was a unique business plan. He basically suborned, co-opted and bribed other people on Wall Street into giving him insider information. The prosecutor said he racked-up $72 million in ill-gotten gains. And so he was sentenced to 11 years in prison, longest term ever for an insider case.
MCMANUSPlus, a $10 million fine, plus a forfeit of about $54 million, but this is really -- this case is not going to answer the Occupy Wall Street movement's concerns because this is an old case. It's before TARP. It's before the bank bailout. It doesn't have anything to do with any of that. And it's a case of what the rules of the road are among hedge funds. What Occupy Wall Street is talking about is something much broader.
PAGEDo you think that this sentence, which is pretty severe, Julie, will it affect behavior, do you think, with any hedge funds? Does it have a chilling effect or any kind of effect at all?
DAVISWell, I think there's no question that it was designed to be a deterrent. I mean, that the judge said as much and, you know, I think, the point of this was -- let's just say this is not something that is permissible. This is not something that we are going to look away on. I think, the average sentence is, something like, one-third of this or less. So, yeah, I think, it will have.
DAVISIf you're thinking about trying to call your buddies at Goldman Sachs and Morgan Stanley and McKenzie, as this guy did, and try to get some insider tips, you might want to think again on that. Also, this came from FBI wire taps, a lot of the evidence in the case. And so, I think, people are going to probably think twice before they subject themselves to that sort of scrutiny because it's not a pretty picture when that stuff come to light.
SCHEREROne of the things the prosecutors said in this case was that this was an example of a much broader problem that's rampant on Wall Street. They didn't bring forward evidence of other cases like this. But if they're right, I mean, the prosecution theory is that, in the modern age, you could actually profit far more quicker off of insider information than at any point before.
SCHERERAnd so there are lots of people on Wall Street engaging in these practices that are illegal. And so the question is whether, you know, they can just find a new way of communicating, you know, disposable cell phones or something, or whether they've actually taken this message, and they're going to stop.
PAGEMichael Scherer of Time magazine. And we've also been joined this hour by Julie Hirschfeld Davis of Bloomberg News, and Doyle McManus of the Los Angeles Times. Thank you all for being with us this hour.
DAVISGood to be here. Thanks.
PAGEI'm Susan Page of USA Today, sitting in for Diane Rehm. She'll be back on Monday. Thanks for listening.
ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture, Monique Nazareth, Lisa Dunn and Nikki Jecks. The engineer is Erin Stamper. A.C. Valdez answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is email@example.com. And we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.
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