MR. TOM GJELTENThanks for joining us. I'm Tom Gjelten of NPR, sitting in for Diane Rehm. Diane is away on station visits. President Obama warns the GOP against another fight over the debt ceiling. Minorities surpassed whites in U.S. births. And Facebook's initial public offering hits the stock market. Joining us for the domestic hour of the Friday News Roundup: John Harwood of CNBC and The New York Times, Laura Meckler of The Wall Street Journal, and Michael Scherer of Time magazine.

MR. TOM GJELTENAnd we hope you all will join us as well. Give us a call, 1-800-48 -- 433-8850. Write us an email, drshow@wamu.org, or join us on Facebook or Twitter. Good morning everyone.

MR. JOHN HARWOODGood morning.

MR. MICHAEL SCHERERGood morning, Tom.

MS. LAURA MECKLERGood morning.

GJELTENBig day today on Wall Street. Facebook IPO, John Harwood, second or third biggest -- we haven't quite figured it out in the history -- but really quite a roll of the dice, isn't it?

HARWOODSure, and four times as big as Google's just eight years ago. It's a -- it's a pretty spectacular story that Mark Zuckerberg has crafted for himself. And we'll see how it goes from here. They price it fairly aggressively at $38 a share, and we'll see whether it gets the opening day pop that other companies that are very hot have gotten when they've gone public.

GJELTENA hundred -- the $38 a share works out to 100 times earnings. I mean, is there any way, Laura, that this company can actually meet those expectations?

MECKLERWell, I mean, we'll find out obviously. I mean, that's the big question. I mean, this is a company with enormous potential. If -- there are almost a billion people on Facebook. If it was a country, it would be the third largest country. Its -- the potential is enormous, but then you have to look at it...

GJELTENIsn't it a country?

MECKLERIt's -- you know, some people spend a lot more time there than they have traveling to other countries. You know, but then the question becomes, you know, what is the value of the advertising, which is, of course, what makes money. You know, just earlier this week, General Motors said that they were not going to be advertising on Facebook anymore 'cause they just didn't see any real return for that.

GJELTENMm hmm.

MECKLERThey didn't see that they were driving any extra business. So, you know, do you -- do those ads make a difference that you see along the side? I mean, people will always tell you ads don't matter, but sometimes they do.

GJELTENWell, ads certainly matter if you're talking about profits, if you're talking about a company making money, and it sure seems, right now, that the ads don't justify that price. But, I guess, the idea here, Michael, is that, you know, social media is changing any -- everything. You know, it was said that TV wouldn't make money either, and look what happened with television advertising.

SCHERERRight.

GJELTENWho knows what the future will bring, right?

SCHERERAnd it's also true that Facebook has something a lot of other online companies don't have. They have actual information about who their users are every time they log in. So the idea -- it's sort of a data story here. They are able to sell to their advertisers in ways that don't look very effective right now. I'm one who uses Facebook almost every day and can't remember ever clicking on an ad on Facebook, but they know that -- you know, they know my age.

SCHERERThey know where I live. They know the other things I like. And they are able to sell more targeted information to advertisers than pretty much any other company online right now, more than Twitter, Google, or any of those, and that's the promise of this company. If Facebook continues to be sort of the default identifier for people who use the web, they're going to be able to have a body of information, sell that specifically to advertisers in a way that no other company can.

HARWOODAnd remember, Tom, people once questioned whether newspapers could make money. And look how (unintelligible).

GJELTENRight. Right. But, as you pointed out, John, there are -- often you see a pop on the initial day of trading in part because the demand for shares exceeds the supply of shares available. But how long will we have to wait before we really see whether this IPO meets these expectations or not?

HARWOODWell, of course, the first 24 hours, you figure whether they get the initial pop. But then you've got several months to watch how it plays out. I was interested to see my colleague, Jim Cramer, who hosts "Mad Money" on CNBC, said last night, he's not a buyer of Facebook. At this price, he wants to wait and see how things settle out.

HARWOODSo there will be a component of investors who want to get in on the action because they feel the excitement, they see the possibility that Facebook could really become even a bigger force in social media than it is right now, and there are others who are going to be cautious.

GJELTENWell, among those who -- I don't know if it's because they're cautious or not, but the sellers of shares that will be bought in this IPO include some big institutional investors that were there from the beginning who are now dumping their shares of Facebook. What's the significance of that? That is actually more of doing that than we've seen in prior IPOs, correct?

HARWOODWell, I think it's -- that is a reflection of the inherent conservatism of some of those institutional investors and concern that, right when everyone else gets excited about something, that may be the sign that it's about to go down.

GJELTENWell...

SCHERERThe other thing here is that -- you remember when Microsoft ruled everything. And then you remember when Google ruled everything. And Apple's kind of ruling everything now. I mean, of all the different industries we have, the technology is one where people rise very quickly to very high heights, and then, three years later, they don't have the buzz anymore. Somebody else has the buzz. So there is a real risk here in this...

HARWOODWho remembers MySpace, for example?

GJELTENThat's right. Yeah.

SCHERERThat's a good one.

GJELTENAnd Rupert Murdoch.

SCHERERRupert Murdoch. Yeah.

GJELTENRupert Murdoch (unintelligible) MySpace.

MECKLERDid MySpace ever have buzz around it?

GJELTENWell, we'll find out at 11 a.m. this morning, Eastern Time, when Facebook shares go on sale. Meanwhile, Laura, elsewhere on Wall Street, all attention that's not on Facebook is on JPMorgan Chase. And now we've just heard in the last 24 hours that the loss from this back -- bad trade was not $2 billion, which we heard earlier this week, but actually probably closer to $3 billion. We're talking close to serious money here.

MECKLERYeah, I'd say we're real close. And the Journal reported today that it could be as much as $5 billion when all is said and done. I mean, the losses are continuing. This isn't the sort of thing -- kind of reminds me of the Gulf oil spill. It's sort of you know what's happening and you know there's been a problem, but you still can't stop it. It's not like something that's over. It's -- these losses are accumulating. And it has this -- has, you know, obviously huge implications for the bank.

MECKLERIt has implications for its head, Jamie Dimon, who has been, you know, very well respected as -- but, as you know, this is a huge mark against him. He is trying to get out ahead of it. And it also has big implications here in Washington where there's been intense arguments.

MECKLEREven after the financial regulatory overhaul was passed, there has been tense arguments about implementing that and whether these regulations should -- how tough they should be on banks doing essentially what they -- these guys were doing, maybe not exactly what it was, but things along that, making risky bets with their own money. And this is really definitely giving a jolt to those who say that those rules should be stricter.

GJELTENWell, speaking of making risky bets with your own money, isn't that what the whole idea of the Volcker Rule was, to limit those kinds of bets? And why is -- Michael Scherer, why is the Volcker Rule -- why didn't apply in this case if, in fact, it didn't apply, which is what a lot of people are thinking?

SCHERERWell, the most immediate reason it didn't apply is there is no Volcker Rule yet.

MECKLERRight.

SCHERERWe have a hypothetical Volcker Rule that may go into some sort of effect in July.

GJELTENYeah. Right.

SCHERERBut the more pertinent answer is that the Volcker Rule is actually an incredibly complicated concept. It's not as simple as saying banks can't make bets with their money. It's -- they can't make speculative bets with the purpose of making money. They're still allowed under the Volcker Rule to make bets to hedge their exposure elsewhere, and that is what Jamie Dimon had said was happening in this case, even though he also says that it kind of got away from them.

SCHERERAnd, really, regulators have been looking at this and really struggling with what kind of hedging counts as real hedging and not hedging. There's a question of whether you can hedge your entire portfolio, which it appears JPMorgan was doing in this case or whether you can hedge just specific things you're doing in different parts of your bank. But, in the end, it really is going to come down to regulators trying to enforce intent, which is a very difficult thing to do.

SCHERERIt's sort of like hate crimes legislation where you have certain penalties. If you commit a crime with some idea in your brain, it becomes worse. In this case, you're probably going to have a situation in which banks are going to have to claim in some official way that they were intending to make money as opposed to intending to hedge money. And as we've seen here, even if you're intending to hedge, you can still lose big. I mean, it doesn't mean that these are safe bets.

GJELTENWell...

HARWOODAnd there's a lot of stake in exactly how the rule is drafted and the performance of the regulators. You know, there's a team of regulators led by the Federal Reserve, which is drafting this rule in July. Lobbyists are all over it trying to weaken the rule. The administration has now redoubled its efforts to prevent them from watering it down. And, really, the ultimate stakes in what Michael was describing are, what are the sizes of losses that you can constrain with this rule, right?

HARWOODSo if you're hedging a specific bet, that is a piece of your portfolio and which is inherently limited. If you're hedging your entire portfolio, which is very large, that suggests the potential for very large losses if you do it badly, as they did it badly in this case. And the question is, can they turn the notion of preventing a systemic threat to a very, very large bank into a reality that has practical effect?

GJELTENWell, what do you think, John, are the politics of this? I mean, this rule had to be negotiated anyway, but now we have this big story that has just broken that really highlights all the issues of financial regulatory reform. Does this really change? Do you think the, you know, sort of the prospects of tougher regulation or weaker regulation?

HARWOODI do. I think it weakens the hand of Jamie Dimon and JPMorgan who have been leading the charge to soften the regulation. And it just makes it easier for all of the regulators to say, wait a minute, we can't do what you're asking us to do, and what they're asking their political supporters to do.

GJELTENLaura.

MECKLERI think that -- I think, in general, the politics of this are probably good for the White House because it bolsters the point they've been making. But I think there's a possible downside also which is that they are out there saying, hey, we passed this great financial regulatory reform. We've helped fix the problem. And then people see, well, the problem hasn't been fixed. Now, obviously what Mike said is true, which is that this rule hasn't taken affect yet. But I do wonder whether people look at then say, well, are we just back where we started?

GJELTENMichael.

SCHERERYou also have a nice contrast to your -- as the campaign is beginning to heat up, Romney's come out and said, look, JPMorgan took these losses. They're able to absorb the losses. This is not putting in -- he's right. This is not something that's going to make JPMorgan go under or need another bailout. And so, from Romney's perspective, this is not something that we need more regulation for, where the White House is coming with a different approach.

SCHERERAnd I think this is one of those contrasts that we're going to see consistently as we get closer to the election, these two very different views of what role government should play in...

HARWOODAlthough, I think it's important to note that Romney did say it underscores the need for common sense regulation if not Dodd-Frank.

GJELTENJohn Harwood is chief Washington correspondent for CNBC, also a reporter of The New York Times. Our other guests this morning are Laura Meckler, White House correspondent for The Wall Street Journal, and Michael Scherer, White House correspondent for Time magazine. I think this is one of the first national news hours in the Friday News Roundup where we've gotten all the way into this program without talking about what's going on in the campaign. We'll be getting back to that after this short break. Stay with us.

GJELTENWelcome back. I'm Tom Gjelten, sitting in today for Diane Rehm. And it's the domestic hour of the Friday News Roundup where we consider all the top national news stories. Before the break, we were talking first about the Facebook IPO and then about the hullabaloo around JPMorgan Chase's really bad bet and what that may mean for regulatory reform. Laura, the White House has taken advantage of this, of course, to push tougher bank rules, but what's the sort of relationship between the White House and Congress right now in pushing for anything?

GJELTENI mean, we had John Boehner.

MECKLERInteresting use of the word relationship.

GJELTENYeah. It's kind of strange, isn't it?

MECKLERYeah. I mean, you know, it's funny. The other day, the president had the congressional leadership up for lunch, which, you know, they were going to -- he was going to talk to them about the "to-do-list" that he's assembled for them of all the things that he'd like Congress to pass this year, you know, none of which are going to be passed this year.

HARWOODHe didn't call it the honey-do list, did he?

MECKLERYou know, maybe that would have helped. It -- there is really no relationship between the White House and Congress right now. It's very adversarial. Even routine things like the reauthorization of the Violence Against Women Act have just -- aren't able to get done over what are essentially fairly minor disagreements that, under the normal way that things, you know, for long, for years and years, decades and decades in Washington, were just worked out. You know, now it becomes a long drama. And that's just reauthorizing a law that already exists, much less passing new ones, so...

GJELTENAnd it was reauthorized twice already in 2000, 2005 without any trouble.

MECKLERWithout any -- without barely notice.

GJELTENMm hmm.

MECKLERSo, you know, and now we have a situation where there's a standoff between the Senate and the White House versus the House. So I know I expect that ultimately it will be resolved, but the point is that there is just such acrimony. There is really just no relationship between them whatsoever, and, I think, what everybody's -- and we have big, big issues coming up. Especially at the end of the year is a real fiscal cliff were facing.

MECKLERAnd there were some this week about starting to think about how we're going to deal with the debt ceiling, which is -- needs to be extended again, how -- raised again -- how are we going to deal with, you know, the expiration of the Bush tax cuts with tax reform, and all these huge questions out there that need to be dealt with soon. And yet there's really nothing happening of any substance right now.

GJELTENWell, Michael Scherer, Laura just mentioned the debt ceiling issue. In fact, she says that the two sides are trying to figure out how they're going to deal with it. We heard from House Speaker John Boehner exactly what he intends to do about this debate, if his words are to be taken seriously. What did he say this week?

SCHERERWell, he did say he wants to start working on it soon. But, like Laura said, they can't agree on anything other than whether the sandwiches were good at lunch.

SCHERERThe -- Speaker Boehner came out this week and said very plainly that he intends to, once again, use the debt ceiling increase, which is probably not going to come until February or January of 2013, as another instance where to demand spending cuts. And, really, what he's doing there is he's, once again, signaling that Republicans are going to take the debt ceiling hostage.

SCHERERHe's doing that at a time when the White House has already signaled that the fiscal cliff that Laura talked about is also going to involve hostages of their own. They're threatening not to raise -- to basically allow the Bush tax cuts to expire unless some compromise is reached. And we're very much in a situation, like the situation we were in in July and August of last year, where, instead of actually having a conversation, a negotiation, there's a lot of jockeying.

SCHERERAnd everybody is threatening sort of different types of Armageddon. If the Bush tax cuts all expire, you know, you're talking about a very significant hit to the economy that would be very sudden. You're talking about -- if you have the sequester go through as planned, if you have no further agreements on unemployment benefits, if you have no...

GJELTENSocial Security, payroll tax reduction.

SCHERERThe payroll tax cut. You're talking about an impact on the economy that's somewhere in the neighborhood of 3 percent of GDP, which would return us to recession.

GJELTENNo question.

SCHERERI mean, it's that serious. And then, on top of that, you have a debt ceiling that would come a month or two later.

GJELTENBut, John Harwood, if there was anything that was clear from the debt ceiling debate last year, it's that the American people didn't like it, the credit rating agencies didn't like it, and yet we seem to be setting up for another fight. How can that possibly be?

HARWOODWell, first of all, I think we all have to remember that, literally, the only thing going on right now between the two parties is posturing, as Michael indicated. So I think everything that is being said on both sides has to be discounted. Secondly, I was interested in the language that Jay Carney used when he talked about this at the White House briefing, when he said the president will not allow the -- a repeat of that fiasco on the debt ceiling that we had in 2011.

HARWOODThat tells me that there might be at least some consideration given to the president by executive authority, which some lawyers say he could do, simply raising the debt limit and inviting a legal challenge. I think that's not beyond the realm of possibility. But, third, I do think that, underneath the noise that we see on both sides, there is a greater possibility than is generally appreciated right now that the two sides in the lame duck session or in the early part of 2013 or both will come together on some sort of a deal.

HARWOODI think the grand bargain can be resurrected. I think John Boehner and Barack Obama, if he's reelected, want to resurrect that grand bargain, and I wouldn't bet against it.

GJELTENBut there are two big issues. There is the debt ceiling issue, but there's also this issue, as Michael pointed out, on what to do about tax policy. And those are really tough issues, too.

HARWOODWell, that would be settled in what I'm envisioning.

GJELTENMm hmm.

HARWOODTaxes, the automatic spending cuts, which are slated under law to happen in January, and the debt ceiling, would all be rolled up into a big deal potentially.

GJELTENYeah. Well, Laura, this Kumbaya moment that John is talking about would come in the lame duck session of Congress.

MECKLERRight.

GJELTENHas anything ever happened in a lame duck session of Congress?

MECKLEROh, yeah, lots. In fact, in 2010, we had a very, you know, productive lame duck session of Congress. That was when the Bush tax cuts did get extended for a few years for everybody, you know, for better or worse. This is when the payroll tax cut and -- first took effect. And unemployment benefits were extended. The Don't Ask, Don't Tell was repealed. There was quite a bit that happened during that lame duck session. So it is definitely not impossible, by any means.

MECKLERI think what the problem is right now everybody is definitely in their corners. What the question becomes is that after the election happens, that's going to decide -- that's going to shape the politics of what comes next. So everybody is going to sort of recalibrate their positions and say, OK, this is the political order we're facing for the next two years at least. How do we want to approach it?

MECKLERSo if President Obama is reelected, and if Republicans, let's say, their margin in the House goes down a bit, maybe their margin goes up in the Senate a bit, but Democrats still control the Senate. I mean, you could imagine a lot of different scenarios, and where people have to say, OK, we need to face this and maybe that, you know, solutions are found.

GJELTENSo, Michael, if everything depends on who wins the elections, and if everything that happens between now and then is just posturing, as John Harwood says, is it even worth talking about how these issues might be resolved?

SCHERERIt is being talked about quietly. Talking about it in the newspaper or talking about it press conferences is really about the election. And I think the election's outcome will determine, to some extent, what happens here. If Republicans have a very good day in November, strengthening their hold on the House, taking the Senate, winning the White House, they're going to have a lot of momentum going into these negotiations. And they will even have an incentive here to kick the ball a little bit...

MECKLERMm hmm.

SCHERER...and wait until next year to get a deal they really want. If, on the other hand, the Democrats hold on to the Senate and President Obama is reelected, Republicans are going to be really on the defensive going into these negotiations.

MECKLERMm hmm.

SCHERERSo it does -- the American people do get to weigh in here in a very direct (word?).

MECKLERMm hmm.

HARWOODAnd, of course, the other reason Republicans are on the defensive is that the tax cuts are expiring. And if President Obama gets past the election, has won, he's got a much stronger hand to dictate a -- or negotiate from with those tax cuts expiring because, if nothing happens, they will go. The deficit will come down. It will be a hit to the economy.

HARWOODBut then, as some -- Peter Orszag, the former budget director says, then the president could come and propose a tax cut for part of the people who would be affected by the expiration of those tax cuts. And it would be harder for Republicans to resist than it would be for them to preserve current law.

GJELTENWell, Laura Meckler, every week on this show, we sort of speculate about where this race stands. And in the last week or so, it appears that President Obama has lost some ground to Mitt Romney. A New York Times poll that got a lot of attention showed Mitt Romney edging President Obama. Now, other polls, of course, show Obama still ahead. I think NBC is coming out with a poll -- when is that? -- next week, or...

HARWOODAnd Fox had a poll showing Obama up seven.

GJELTENUp seven, so...

MECKLERYeah, it's -- I think it's important not to put too much weight into any one poll, except, of course, The Wall Street Journal/NBC News poll. No, the -- not to put too much weight into any one poll. We need to look at what the race is -- what's happening overall in the race and what did the polls together tell you. And I think what they tell you is that Romney's benefited from conservatives sort of rallying around him, him coalescing his base, and that the race is about where we thought it would be, which is fighting over, you know, a fairly small slice of the electorate.

MECKLERAnd we should also keep in mind that this is not a national race. This is a race that's going to be fought state by state. And there are really only about, you know, nine or 10 states where this really matters. And then, actually, if you look at it from an electoral map point of view, President Obama has a lot more paths to victory than Mitt Romney does. Romney has a very, very narrow path he has to walk. He has to win six states that Obama won last time.

MECKLERI mean, he has to take back Florida and Ohio and North Carolina and Indiana and Virginia and then another one. So it's not, of course, not impossible by any means. And if the political winds shift, they might shift everywhere all at once and, you know, you pick up a whole bunch of those states all together. And that's, of course, very, very possible. But he does have a narrow path, whereas, you know, President Obama can sort of win by putting together a variety of different sort of pathways to victory.

GJELTENI have to interrupt here with a note to our listeners. It appears, at least for the moment, that our phones are down, so if you're dialing in and not able to reach us. That's why it makes it all the more important, if you want to be part of this discussion, to email us, drshow@wamu.org, or send us a message on our website or on Facebook or Twitter. For the moment at least, you won't be able to call, but I will at least be reading your emails and so forth.

GJELTENMichael Scherer, back to the campaign, a couple of things have happened in the last couple of weeks that would seem to give a pretty strong indication that Mitt Romney really, really wants to focus on the economy in this election. We, first of all, had President Obama coming out in favor of same-sex marriage and Mitt Romney sort of avoiding that issue at all costs. And then, second this week, came the news that there was a super PAC that was gearing up to do a very heavy attack campaign against President Obama, and Mitt Romney came out yesterday and shut that down hard.

SCHERERThat's right. And this has been the strategy from his announcement speech last year in New Hampshire, that he sees one path to victory being one in which he is able to discredit and blame Obama's leadership on the economy and then put himself forward as someone who can do a marginally better job than the president.

SCHERERAnd he's said publicly that, you know, the other campaign is going to put up all these distractions, and we're going to avoid them. We're going to stay the course. I think the super PAC ad was -- the super PAC proposal that came out yesterday was pretty big news. I think it will have big implications come convention time and afterwards.

SCHERERI do think that not just maybe the Romney campaign, but other supporters of the Romney campaign had plans to maybe not pivot as hard to Rev. Wright and some of the racially charged language, but pivot to Obama's background, his biography, his time in Chicago as a way to discredit him coming into the election. I think they're going to have a harder time now doing that. The fact that this came out now, that it was so widely condemned, has probably put the president on a slightly stronger footing.

GJELTENMichael Scherer from Time magazine. I'm Tom Gjelten. You're listening to "The Diane Rehm Show." Laura.

MECKLERWell, it's interesting because there are all these distractions from the Romney point of view from what they want to talk about, which is the economy, and really none of them are of Barack Obama's doing. They just -- in fact, sometimes it seems to be to his detriment. For instance, the controversy over the contraception coverage, this was not something the White House planned by any means. It was sort of a mess for a long time, but turned out to sort of work in their favor.

MECKLERYou had the gay marriage situation, which, you know, the president did not -- certainly did not plan on coming out for gay marriage when he did. They say he was eventually going to do so, but it certainly was accelerated. So you have -- and then you have the situation with this ad. I don't -- what the conventional wisdom seems to be -- and I think this is the thinking of the Romney campaign -- is that, you know, Barack Obama is personally popular. You know, people like him. Even if they don't necessarily like all of his policies or think he's done a great job, they like him.

MECKLERSo the -- from the Romney point of view, the best strategy is not to go after Barack Obama as a person, but to keep the focus on the economy and on his economic policies, and so all of these other things just serve to distract from that. Any conversation, I think, about Barack Obama's past would -- and even if it isn't Rev. Wright, even if it's the stuff that Mike was talking about, I don't think the Romney campaign wants any of that. It just serves to remind people to start thinking about, well, what do you think about Obama himself? And that comes out pretty good for the president.

HARWOODThere are different layers to this as well, though. I mean, some of the negative personal stuff -- Wright, others -- will have minimal impact on most people in the country, right, because the president has been in office for three years. They've gotten a sense of him. If that stuff didn't sink him in 2008, it's not going to sink him now.

HARWOODOn the other hand, messages that are delivered quietly to some constituency groups may help gin up turnout for a base in the Republican Party that isn't all that thrilled with Mitt Romney. So you could certainly see those issues playing some role at some level, but it's certainly not what Mitt Romney wants to emphasize.

GJELTENJohn Harwood is chief Washington correspondent for CNBC and a reporter for The New York Times. We have an email here from Adam in Roanoke, Va. He says, "Many of the issues frequently discussed in the mainstream media, such as austerity and the Simpson-Bowles proposal for deficit reduction, seem quite remote from the interest of the general public.

GJELTEN"As the election season heats up, what most people really care about is there's always such a disconnect between what the leaders worry about and what the general public worries about." Now, this is actually close to the point that John was just making. It's sort of hard to know what issues are going to matter the most come November.

MECKLERWell, as far as deficit reduction is concerned, you know, polling shows that that has become an increasing concern of voters in general and is certainly a big concern of the Tea Party. And the conservative wing of the Republican Party has driven this hard, and there are real voters who care about the deficit. I'm not saying every -- it's the most important thing for every voter, but I don't think this is just a pure Washington creation.

MECKLERIn fact, I think that many people in Washington would probably prefer to just ignore the deficit if they could because it's always so difficult to deal with it. In fact, they have ignored the deficit for years. So I think this is, to some extent, something that's been pushed up from the voters and also by just the fiscal reality.

GJELTENAnd meanwhile, Michael Scherer, we will hear -- we will find out in this election how much of a difference money will make. And we had some notable news this week that Mitt Romney has almost caught up with President Obama in his fundraising.

SCHERERYeah. Romney had $40.1 million in the last month. Obama raised $43.6 million. It's a huge increase. Romney was averaging in the teens, basically, in millions per month. That's really a symbol of him taking the nomination. He's able now to raise money with the party. I think that's a big story. But the bigger story is that, right now, as we sit here, there's a huge imbalance between outside spending.

SCHERERRomney is benefiting from an enormous amount of money, hundreds of millions of dollars that have been committed to -- will be committed to help him through super PACs and other vehicles in television advertising. And Barack Obama -- who, for years, was against this type of spending and only recently pivoted on that -- has yet to be able to find or his allies have yet to be able to find people with lots of money to match that.

GJELTENMichael Scherer is White House correspondent for Time magazine. I'm also joined by Laura Meckler from The Wall Street Journal and John Harwood from CNBC and The New York Times. We're still having trouble with our phones here on "The Diane Rehm Show," but we are getting emails. You can also send us a message on Facebook or Twitter or the website. We'll try to get to some of those messages after this break. Stay tuned.

GJELTENWelcome back. I'm Tom Gjelten, sitting in today for Diane Rehm. And it's the domestic hour of the Friday News Roundup. My guests here in the studio are John Harwood, chief Washington correspondent for CNBC, also a reporter for The New York Times and two White House correspondents, Laura Meckler from the Wall Street Journal and Michael Scherer from Time magazine. This is the point in the program when we normally take a lot of calls from our listeners.

GJELTENUnfortunately, the bad news today is that our phones, for some reason, are down. At least we do have email communication, so I'm going to be reading some emails. Of course, you can also send us a message on -- via Facebook or our website or Twitter. And I'm first going to read an email from Jeff, and he raises an interesting point about something that you just mentioned, Michael.

GJELTENI understand -- Jeff writes, "I understand super PACs are not supposed to coordinate with the candidates, and you just said that Romney shut this planned super PAC ad down hard. Now, isn't that evidence of coordination?"

SCHERERI think probably to the common person they would say yes, but, legally, the answer is no. The Supreme Court, who's really responsible for this standard with the Federal Election Commission, has narrowly defined coordination to mean decisions about specific messages that are made in private or buys that are made in private. But the candidates can effectively coordinate with their super PACs in a number of ways.

SCHERERThey can just publicly announce what they want to do. And there's nothing to bar the super PACs from following right behind them. They can publicly announce where they're buying their ads, and then the super PACs will then come in and figure out where to buy their ads to either overlap or not overlap with them.

SCHERERUnder current rules, candidates can even appear at super PAC fundraisers and speak about how much, you know, they want to do for the country and then stand on stage and have somebody else make the ask for money. I mean, so the -- in practice, coordination, as a legal term of art, is very different from what most Americans would think of when they thought of the word coordination.

GJELTENWell, Laura Meckler, if there was any doubt about the influence that big super PAC funders have on a campaign or a candidate, Newt Gingrich settled that when he publicly thanked Sheldon Adelson for having boosted his candidacy at the time that he was withdrawing from active campaigning.

MECKLERThere's no doubt that super PACs are the story of the -- certainly the money story for 2012. And I think that as much as they're going to affect the presidential race, which will be significant, they will definitely -- even though Obama and the Democratic National Committee are expected to probably still outrace Romney and the Republican National Committee, these super PACs will more than make up for the difference massively. So it's projected.

MECKLERBut in other races around the country -- we see it happening right now in Wisconsin with the recall of the governor and in congressional races where -- that super PACs decide to focus on. These are situations where there really is a fight to get your message out. In the presidential race, everybody is going to hear what Obama and Romney have to say, no matter what. There's so much attention to it, so much free media coverage of what's going on.

MECKLERBut on these lower level races, that isn't always the situation, and a huge amount of money coming in can make a big difference. So I think that that is a little less visible here in Washington, but I think, you know, viewers around the country are going to see that this year.

GJELTENMm hmm. John Harwood, Don in Washington, D.C. emailed us with a question he wants put specifically to you. He says, "Regarding a possible executive order by the president on the debt ceiling issue, do you think the president is willing to risk another court showdown considering how the Obamacare court case went?"

HARWOODWell, we don't know how the court case went yet.

GJELTENWell, we don't know the -- we know how the arguments went.

HARWOODYes. But I think it depends on what its alternatives are. I think he would rather not do that. He plainly would rather not do that. He'd rather negotiate it with Republicans. And, look, in the end I could be -- my instinct could be wrong, and he may not take this route. I just have the notion that -- given the difficulty of that last fight, the intractability of that negotiation, which might not be repeated.

HARWOODBut if it were to be repeated, I think the temptation to use his own authority, you know, we -- he spent a lot of this year taking action under the rubric of we can't wait for Congress. I think that, given the potential threat to the economy, he might be willing to take that step.

GJELTENLaura.

MECKLERI'm skeptical, I have to say. I talked to a lot of White House people about this subject when I was doing a story about executive authority and how the president has used it, and they insist that they believe he does not have that power. And they -- you know, a lot of people have said that sort of definitively, that they -- it isn't that he chose not to use it but that they don't think he has the power. Now, that doesn't mean that they can't change their minds about that, and I certainly wouldn't rule it out. But I'm skeptical that they're going to take that course.

GJELTENMichael, I have an email here from Jim in North Carolina. He says, "The partisan gridlock is not new, but voters remain supportive of the parties which fail to play nice together. The solution to me has always been to shun party lines and vote for individual candidates regardless of party affiliation, independents, and select individuals of both parties are worthy of consideration."

GJELTENNow, we've actually had a movement this year to sort of -- what is it, Americans Elect, is that the name of it?

SCHERERAmericans Elect, yeah.

GJELTENTo sort of chart out an independent course that, by definition, eschews this kind of partisan gridlock, and yet that has not gotten -- it has really not gone anywhere, has it?

SCHERERIt's actually past tense now. We had a movement.

GJELTENOK.

SCHERERIt sort of closed up shop this week. And that just has to do with the political dynamics. We also had a candidate in the Republican Party, Jon Huntsman, who tried to run as sort of a moderating force, who would bring people together, who would tap into this vein of support.

GJELTENMm hmm.

SCHERERAnd it just -- the American people, as anxiety grows, as things become more difficult, as they become more upset, do not naturally move to the center. They naturally move to the edges. They naturally move towards more ideology, not less ideology. And this has just been a pattern we've been in. And we're basically stuck in this cycle right now.

HARWOODTom, I had an interesting conversation yesterday with Andy Kohut, who's the pollster for Pew Research Center.

GJELTENMm hmm.

HARWOODAnd he talked about a data series, when talking to voters over a course of more than 20 years, about what influences their vote. And when he started taking these surveys in 1987, 25 years ago, what he found was that partisanship had a big role in people's election choices, but it was comparable to other demographic factors that he looked at. Whether it was race or income or gender, they were all in a mix.

HARWOODNow, partisanship has leapt ahead of every other demographic variable and has become so highly predictive of how people are going to vote that it indicates how difficult it is to get a third party going and how difficult it is to break out of this polarized rut that we're in.

GJELTENYou know, we had another development on the demographic scene this week, which was, I think, very interesting and that is that the census bureau reported for the first time that white births, births of white babies, no longer account for the majority. Now, minority children account for the majority of births in the United States. And, considering that all these babies are, you know, hopefully a great deal of them are going to grow up to adulthood, that certainly suggests which way this country is changing demographically, doesn't it, Laura?

MECKLERAbsolutely. This was a demographic moment that everybody knew was coming, but now we find out that it actually has arrived. And it's only going to continue moving in this direction. And it's a situation that has huge implications for so many different things ranging from politics to culture to education to, you know, to issues of wealth and poverty. There's just a lot of different questions. This is not something else that's playing out equally around the country.

MECKLERI mean, there are certain states that have very large Hispanic populations, majority who've already seen this tipping point, you know, long ago and others that are still predominantly white. You have urban centers which have a lot higher African-American population. So this is a patch-work situation around the country, but one that has big implications for all of our institutions ultimately.

GJELTENMichael, I think that Laura is right and all the demographers are right, that this is a trend that is going to continue. Nevertheless, there is one trend that's actually going in the opposite direction, and that's that immigration has really slowed. In fact, immigration of Mexicans to the United States has come to a complete standstill and in some places even declined. So that may be simply a phenomenon of the job market.

SCHERERYeah. No, that probably is a phenomenon in the job market combined with some increased border protection. But there's a misunderstanding of this boom in minority populations in the U.S. that it is due to this influx of people running across the border. Really, this is a demographic boom based on the age of this population. I mean, Hispanics are a much younger population than whites are in the U.S. right now.

MECKLERMm hmm.

SCHERERI think it's 50,000 Hispanics turn 18 every month right now. The demographic boom is going to continue, even if you seal the boarders and didn't let immigrants in again. This is just a population that's having more kids, and they are younger. And they're going to continue to grow.

HARWOODAnd, by the way, among the institutions affected by this that Laura referred to is the partisan polarization that we're experiencing because minorities, African-Americans, to a lesser degree, Hispanics, but still two strong majorities tilt toward the Democratic Party, tilt toward greater reliance on and support for the role of government. And that has the potential to exacerbate the splits between a Republican Party that is still dominated by white voters.

GJELTENYou know, we want people to have more babies because the younger the U.S. population is in terms of its profile, the less we're going to be burdened by entitlement spending at the other end of the age structure. So you would think that if we're concerned about growth of Medicare, the obligations, the liabilities, the Medicare and Social Security have, we would want people to have a lot of babies now because they'll produce workers who will provide the Social Security taxes that are going to support us in our old age.

MECKLERMm hmm. People had better really get busy because we're going to need a lot, a lot more babies to support the baby boom and their retirement.

GJELTENOK. I have to go back to some emails now. As I've said all through this program, unfortunately, we don't have phones this morning, but we are getting a number of emails. Dee Ball (sp?) writes, "All the negativity from the super PACs in primaries have turned me off. I will still vote, but I have tuned out a lot of what is in the media about the elections. I wonder how many other Americans are doing the same."

GJELTENWell, we have talked about that issue. Some -- actually, we don't have an answer that we can give you, Dee, but your comment is certainly noted. A couple of comments also about the Romney campaign. Shauna says, "I take issue with your statement that Romney has refused to comment on gay marriage rights." I didn't actually say he refused to comment. I said he didn't really have much to say about it. But she says, "In fact, he has stated he would pursue a constitutional amendment denying lesbian, gay, bisexual and transgendered individuals' civil rights." Is that correct, Mike?

SCHERERYeah, that is correct. He's also said that he is in favor of gay couples being allowed to adopt children, which has upset some on the right. And he said, obviously, that he believes marriage is something that should be reserved for one man and one woman. I think the issue here is not that his position shifted because of this. I mean, you can argue his position shifted since the mid-'90s when he advertised himself as being a great supporter of equality for gays and lesbians.

SCHERERThe issue is that he didn't try and score any political points. And it wasn't just him. There were really no Republicans, in Congress even, who came out after the president did, you know, pretty momentous shift on gay marriage and tried to make too much hay about it. They said, instead, this is about the economy. We're going to focus on the economy.

HARWOODAnd to the extent that Republicans can score political points off this -- and I think it's possible in some states, North Carolina, Virginia, Ohio, Pennsylvania, where there are lot of culturally conservative voters -- they scored the points without having to talk about it. And the more they talk about it, the more they have the potential for alienating some of the swing voters who have gravitated towards support for gay marriage.

SCHERERAnother issue here is that, you know, there's a possibility that one of the side effects of the president's shift on gay marriage is going to be more money for his super PACs. And that's the thing we can watch in the coming days.

GJELTENMichael Scherer from Time magazine. I'm Tom Gjelten. You're listening to "The Diane Rehm Show." You know, Gisela -- where is Gisela from -- has her own -- it doesn't say -- has her own theory about why Mitt Romney hasn't been more outspoken on the social issues. She says, "Isn't it likely that Romney wants to avoid anything related to religious matters? Engaging in that himself would open the door to discussions of his Mormon religion, which is still an issue for many people, including in the evangelical community."

GJELTENNow, Laura, we saw Mitt Romney speak at Liberty University, and he actually -- one audience where you'd think he would talk about religious issues, and he seemed to sort of steer fairly clear of the boldest talk about religious issues.

MECKLERThat's absolutely true. I do think that there are some undercurrents about the fact that he's Mormon, and there's no doubt that a lot of evangelicals are uncomfortable with it. Having said that, I think he's probably over the worst as far as any concern among voters about that. I think it's going to be a lot less of an issue in the general election than it was for him in the primaries.

MECKLERAnd all signs are that the base, while not particularly enthusiastic about Romney -- and that would include voters who don't feel comfortable with the fact that he's Mormon, you know -- that they really don't like Barack Obama. They really want him out of office, and that's what they're focused on right now. So I think that it is true that he faces some discomfort on the religion factor. But I think that the real reason he's not talking about these social issues is what we've talked about already here today, which is that he wants to focus like a laser on the economy.

GJELTENOK. And, now, a message we got on Facebook from Nicole. She says, "I heard commentators say this week that we shouldn't be so upset about the JPMorgan loss because it's just a drop in the bucket compared to all their assets, and they can absorb it. Isn't the fact that $3 billion is just a drop in the bucket for JPMorgan, isn't that the problem? They control assets greater than the GDP of most countries with their pension accounts of many Americans." John Harwood.

HARWOODI'm sorry. I spaced out that question. Go ahead.

MECKLERI mean, yeah...

HARWOODGo to Laura.

MECKLERWell, I don't -- you know, I don't really know the answer to that question. I mean, yes. I mean, it's a huge amount of money. JPMorgan is a huge, huge company, but...

GJELTENThe question is whether $3 billion is just a drop in the bucket.

MECKLERWell, I don't think it's -- you know...

HARWOODYes, it is for JPMorgan. They're going to make billions this quarter.

MECKLERI don't think that the issue here is that anybody is, like, crying tears because the JPMorgan, you know, stockholders, investors, people who work there are going to make less money this year. I don't really think that's the reason why this is such a big story, although that, of course, is an important story for -- in the financial community. The reason why this is a bigger story is that when banks put themselves in such a vulnerable position -- we saw what happened in 2008 and 2009 when we had to bail them out.

MECKLERAnd so while we're not at that point now, I think everybody looked at this -- and maybe (unintelligible) John agrees with this -- and looked at this and said, wait a second. Do you we have these banks doing the same sort of irresponsible behavior that they were doing all along?

HARWOODWell, and especially when it's a market leader like JPMorgan with one of the most respected chief executives in the entire financial industry.

GJELTENMichael, we have a chance to just mention one more email very briefly. This is from Clifford. He says he looked at the unemployment rates listed by state and found many of the swing states, like Virginia, Ohio, Pennsylvania, Wisconsin, Iowa, with unemployment rates well under the national average. Now, does this imply that Romney will have a harder time winning those states by focusing on the economy?

SCHERERI think that is true that there are some states that are more favorable. There are other states, like Nevada and Florida, where you have the housing market and unemployment worse. The issue, I think, is not what the rate is. It's where the momentum is going. And, right now, we're slowly growing, but there are sort of clouds on the horizon. And, you know, people tend to vote not based on where they have been for the last three years but where they think the economy and their lives are headed. And the next few months are really going to be key in deciding.

HARWOODAnd you were asking before about what issues are going to loom largest for voters.

GJELTENMm hmm.

HARWOODThat's the issue, is whether or not they feel the direction is positive, whether they think their lives and lives of their children have a chance of getting better.

GJELTENJohn Harwood is chief Washington correspondent for CNBC and a reporter of The New York Times. I've also been joined by Laura Meckler from The Wall Street Journal and Michael Scherer from Time magazine. I want to apologize to our listeners for the fact that you weren't able to call us today. Our phones are down for some reason. We certainly hope that they will be back up. Diane will be back on Monday. I'm Tom Gjelten. You're listening to "The Diane Rehm Show." Thanks for tuning in.

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