"Face the Nation" transcripts, September 30, 2012: Gov. Christie, Newt Gingrich
(CBS News) Below is a transcript of "Face the Nation" on September 30, 2012, hosted by CBS News' Bob Schieffer. Guest includes: New Jersey Governor Chris Christie and former House Speaker Newt Gingirch. A roundtable included University of Virginia's Larry Sabato, Rep. Marsha Blackburn, and former Democratic consultant Bob Shrum. Another roundtable included economis Mark Zandi, education expert Michelle Rhee, author Hendrick Smith and journalist Bob Woodward.
BOB SCHIEFFER: Today on FACE THE NATION, Chris Christie, Newt Gingrich, and the problems of Mitt Romney. As polls showed Romney slipping in key battleground states the President piled on, turning his own gaffes and the laugh lines.
PRESIDENT BARACK OBAMA: I want to see us export more jobs-- export more products, excuse me, I was-- I-- I was channeling my opponent there for a second.
BOB SCHIEFFER: The comics chimed in with advice and consolation.
STEPHEN COLBERT: There are forty days left until the election. Lot can happen in forty days? Obama could make a gaffe. Mitt could win the debates. Gods could send a flood to destroy all mankind. So there's hope.
BOB SCHIEFFER: Short of building an ark, what is Romney's best chance now? We'll ask New Jersey Governor Chris Christie and one-time adversary Newt Gingrich. So far Romney is sticking to a familiar theme, but does he need to do more?
MITT ROMNEY: I'm going to lower the tax rates. He wants to raise them. I'll create jobs. He'll kill them.
BOB SCHIEFFER: We'll get analysis on where the race stands from Tennessee Republican Representative Marsha Blackburn, Democratic strategist Bob Shrum, and Larry Sabato from the University of Virginia Center for Politics.
Then, as we head into first presidential debate, we'll talk about the state of America at home and abroad with a distinguished panel. Michelle Rhee, former head of the Washington DC School System and founder of StudentsFirst; Economist Mark Zandi of Moody's Analytics; Bob Woodward, author of the Price of Politics; and Hedrick Smith, author of the new book, Who Stole the American Dream? It's all ahead on FACE THE NATION.
ANNOUNCER: From CBS News in Washington, FACE THE NATION with Bob Schieffer.
BOB SCHIEFFER: And we welcome now to the broadcast New Jersey Governor Chris Christie. Governor, thank you for being here. Well, Governor, I have got to start off by saying I don't hear very many Republicans these days who think Mitt Romney is doing very well. What's your take here?
GOVERNOR CHRIS CHRISTIE (R-New Jersey): Well, listen, yeah, he's-- he's had a tough couple of weeks. Let's be honest. I mean I'm not going to sit here and come on this morning and-- and sugarcoat the last couple of weeks. They've been tough. But here's the great news for Republicans. We have a candidate who is going to do extraordinarily well on Wednesday night. The first time he has the opportunity to stand on the same stage with the President of the United States and the first time a majority of the people that are going to vote in this race will have an opportunity to make that direct comparison and see the two of them. When they do-- I've seen Mitt Romney do this before. He's going to come in Wednesday night. He's going to lay out his vision for America. He's going to contrast what his view is and what the President's record is and the President's view for the future and this whole race is going to be turned upside down come Thursday morning.
BOB SCHIEFFER: Well, if he's had such a hard time so far, why suddenly will it be a whole different deal?
GOVERNOR CHRIS CHRISTIE: Well, because I think it is a whole different deal. What he is going to be doing on Wednesday night is not going to be filtered by anybody. It's not going to be spun by anybody or filtered by anybody. The American people are going to get ninety minutes to look these two men right in the eyes in their living rooms and make a judgment about their visions for the future, their experience and their records and be able to say who do we trust the most to be the President of the United States during these incredibly challenging times? And I just know--I've watched Mitt Romney do this, and so have you, Bob--over the course of every time he was backed into a corner in the primaries. He came out with a great debate performance because that's where he shines and he is going to do a great job on Wednesday night.
BOB SCHIEFFER: Governor, I-- I certainly take your-- your point, and I have respect your opinion but talking about being spun and so forth it seems to me most of the problems Governor Romney has had thus far, he has created for himself. For example, this tape where he said he's just basically writing off forty-seven percent of-- of the electorate. That was not the campaign. The governor himself said that was me. Has that thing-- is that thing really hurt him?
GOVERNOR CHRIS CHRISTIE: You know, Bob, I just don't think so. I really don't. I don't think a majority of the American people are focusing on that. And here's what I think the American people and their voters are much smarter about than we give them credit for. They know that political candidates at times, when they're being taped every minute of the day are going to say things inartfully. Now I mean let's face it, this President of the United States said when he was running four years ago, that he was campaigning in all fifty-seven states. Do any of us really believe that the President doesn't know that we only have fifty states? Does that mean that he is not smart? I mean come on. That's ridiculous. He misspoke. And-- and I think what Governor Romney did was inelegantly say something. He has admitted that. But here's what I know he really believes. What he believes is that everybody in America should have skin in the game. Everybody in America has to be part of a shared sacrifice to create opportunity for greatness again for our people and our country. And he's going to convey that message on Wednesday night clearly and directly to the American people. And I'm telling you, Bob, Thursday morning, you're going to be scratching your heads and saying, wow, we've a barnburner now for the next thirty-three days.
BOB SCHIEFFER: Well, it-- it's certainly going to come as a surprise to a lot of Republicans, as you well know, because some of the leading voice--if that is the case--because some of the leading voices, people like Bill Kristol, of the Weekly Standard, Peggy Noonan of the Wall Street Journal and-- and they're quoted as, you know, Bill Kristol said the forty-seven percent thing was-- was stupid. Peggy Noonan has said it more elegantly, but said about the same thing. And when you talk, Governor, to some of these Republicans when you don't use their names, they're even more critical thus far.
GOVERNOR CHRIS CHRISTIE: Well, of course, they are when you don't use their names. Everybody knows to be critical in Washington when you don't use their names, right, Bob? Listen, I have great respect for Peggy and for Bill Kristol and for Charles Krauthammer and the people who have been critical. But it's their job to be critical. It's their job to do those kind of things. And as I said to you, the campaign hasn't had a good two weeks. But the bottom line is it changes on Wednesday night. I-- listen, I believe in Governor Romney. I believe in him as a leader. And I know that he is going very, very well do the job on-- on Wednesday night.
BOB SCHIEFFER: The shift toward Medicare reform does not seem to be going over well with seniors, especially in some of these key states like Florida and Ohio. I'm looking at polls here that say sixty-five percent of the seniors in Florida don't want to change Medicare; fifty-nine percent in Ohio; fifty-six percent in Virginia. Did the campaign make a mistake by going off in this direction? I think most people know you got to reform Medicare, but they don't seem to be taking--seniors--don't seem to be taking very well what-- what Mitt Romney and Paul Ryan want to do about it.
GOVERNOR CHRIS CHRISTIE: Well, the first-- the first bit of good news 1is that-- that Mitt Romney and Paul Ryan are not going to change Medicare for those seniors. They are going to change Medicare for folks like me, who just turned fifty, and-- and-- and younger, who are going to need to know that if you want to have any semblance of Medicare, that you're going to have to make some changes to it. And here's the-- here's the dirty little secret, Bob, President of the United States knows that, too, but he's not talking about it. He's not being honest with the American people about it. In the end I think the American people, if we lay out our vision well, will reward us for telling the truth and the President right now is avoiding the truth, the way he's avoided so many hard truths over the last four years.
BOB SCHIEFFER: Governor, are you-- if Mitt Romney does not win, are you going to run for President in 2016?
GOVERNOR CHRIS CHRISTIE: Mitt Romney's going to win, and so-- it's-- it's a question that-- you know, I don't need to address. I hope in 2016 to be working hard for Mitt Romney's reelection as President of the United States. And any conversation about anything else is going to turn out not to be necessary because Mitt Romney is going to be elected President on November 6th.
BOB SCHIEFFER: Governor, it's always fun to have you. Thanks for joining us this morning.
GOVERNOR CHRIS CHRISTIE: Bob, thank you for having me this morning. It's great to be with you.
BOB SCHIEFFER: And from Chris Christie we turn to former House speaker Newt Gingrich. I guess, I should ask you, are you going to run in 2016 if--
NEWT GINGRICH (Former House Speaker): No I-- I agree with of course--
BOB SCHIEFFER: --Mitt Romney doesn't win?
NEWT GINGRICH: --I think-- I think we're all going to be supporting Romney's reelection.
BOB SCHIEFFER: You know I heard you, Mister Speaker, this week on television. I think I heard you correctly say that Mitt Romney is whistling past the graveyard unless he does well in these debates. Is it that bad for him?
NEWT GINGRICH: Look, it's always that bad. The three great incumbent disasters were the Carter-Ford debates, the Reagan-Carter debates, and then the Clinton-George H.W. Bush debates. And three times you saw the challenger take on the incumbent and win, the debates really mattered. The places where you saw the incumbent do well, for Reagan versus Mondale, I would argue Carter versus Dole, you know, or-- or Bush versus Kerry, the incumbent won. So the-- I think debates matter psychologically to the country. They're the most viewed single event in the campaign. And I think it's always a burden on the challenger-- this isn't about Romney. It's about the challenger. The challenger has to make two cases. The incumbent should not be re-elected, and I would do a better job. It's a-- it's a two-part, I mean, you first have to make sure people say, "Yeah, Obama's stagnation is-- is unacceptable." But then you got to say, "And by the way, this guy will be better." Romney, he doesn't have to hit a home run, but Romney has to-- has to be at the end of the debate Wednesday night, a clear alternative who is-- who is considered as a potential President by a majority of the American people in order for his campaign to have a chance to win.
BOB SCHIEFFER: Is that another way of saying, if he doesn't win these debates he is not going to be President?
NEWT GINGRICH: Well, no-- no challenger is going to become President, if they can't stand up to the incumbent President. This is-- this was true for Carter against Ford, it was true and Ford made a mistake and it cost him dearly. It was true of Carter as the incumbent against Reagan and Reagan stood up to it. And Carter was cost dearly and frankly it was true of George H.W. Bush. He had a moment to knock out Bill Clinton, he didn't do it. Clinton was still standing and he became the President in '92.
BOB SCHIEFFER: This debate is going to be about domestic affairs. I want to ask you about something on the foreign policy front because the administration has basically changed its account of what happened in Libya, where our U.S. ambassador was killed. They said Susan Rice said on this broadcast last Sunday, after the President of Libya said this was the work of terrorists, she said, no, this was because of a spontaneous demonstration that had to do with that film. Now, they have come around to saying, well, yes, it was a terrorist attack. Is Mitt Romney making enough of this? I haven't heard too much from him on that.
NEWT GINGRICH: Bob, what-- what struck me-- and I have known the director of National Intelligence for years. He is a bright man. He is a competent man. This administration in effect is now saying to us, "Oh, don't blame the United Nations ambassador. Don't blame the White House spokesman. Don't blame the President, because our intelligence system failed so decisively." Now I don't know which worries me more, the idea that the intelligence system took weeks to figure out the obvious--although we are told that in fact they had information the day before the attack because the-- the video that went out from al Qaeda asking that the ambassador somebody be killed on-- on 9/11 was a-- was a day earlier. So I don't know whether I feel more comfortable knowing that the administration was incompetent and lied to us or I feel more comfortable knowing that the intelligence community was totally out of touch. My hunch is the intelligence community was not out of touch. The ambassador's own diary apparently indicates that he was worried about being targeted for death. You have to ask yourself-- this-- should he-- the Congress should be holding hearings right now. How could an ambassador be in Benghazi, the hot bed of anti-American sentiment in Libya, how could he be there on 9/11 with no security? I mean this whole-- this entire incident makes no sense. And, yes, I think-- I think Romney should be demanding that the President tell the American people the truth.
BOB SCHIEFFER: Do you think getting back to the campaign-- do you think that Mitt Romney has got to move a little bit more towards the center here as we come toward the election?
NEWT GINGRICH: No, I think Mitt Romney has to move to clarity in drawing the contrast between the two futures. There is a Obama stagnation future. We-- we had information this last Week that we're drifting into another recession, which to go into a recession off of eight-percent unemployment could easily mean you end up at twelve- or thirteen-percent unemployment and, yet, all sort of indicators-- David Malpass showed us a very compelling economics analysis this week that we are drifting into another recession because of Obama. There has to be a contrast between a Romney recovery and-- and Obama stagnation, and frankly, it's not right or left. It's-- it's common sense getting the country back to work, having an American energy policy. North Dakota has 2.7-percent unemployment. The governor of North Dakota has a billion-dollar rainy day fund and they've had three tax cuts in a row. Now Romney should be focusing on that kind of big choice, and-- and it's not really right or left so much as it is common sense and works versus fuzzy ideas that haven't worked.
BOB SCHIEFFER: Well, they have all sorts of covered oil out there. So, but we'll get back to that. Mister Speaker, I'm going to ask you to stick around for our round-table--
NEWT GINGRICH: Mm-Hm.
BOB SCHIEFFER: --in a little bit, thank you. And we will be back in one minute with a little analysis of this.
BOB SCHIEFFER: And we're back now to talk more about the election and these coming debates with Congresswoman Marsha Blackburn of Tennessee, Bob Shrum who writes for the Daily Beast, he was the adviser and the consultant of course for John Kerry. And Larry Sabato who runs the University of Virginia Center for Politics. Larry, let me start with you. You're kind of the man in the middle here. Where do you think this race stands right now?
LARRY SABATO (University of Virginia Center for Politics): Bob, I think the President is ahead at my crystal ball operation. We have him at two ninety electoral votes, two seventy needed to win, but some of those states are just barely leaning to him, like my native Virginia. Obama is ahead two or three points. The polls have him up higher than that, but I don't think he's really there.
BOB SCHIEFFER: Let me just go to our map of the battleground states here, right now Nevada, New Hampshire, North Carolina, Ohio, Virginia, Florida, Iowa, Wisconsin, and Colorado. I think most of the polls suggest now that the President is at least slightly ahead in all of these states, except possibly North Carolina. CBS News is now calling Ohio, in fact, leaning, leaning to the President not-- not a toss-up state. Does that sound about right to you?
LARRY SABATO: That sounds about right. I actually think North Carolina is probably leaning to Romney, despite some-- some recent polls to the contrary. And to be honest I think the-- the three toss-ups where he has the best shot are Florida, New Hampshire, and particularly Colorado. But in all of those other toss-ups, like Wisconsin, Nevada, Ohio, Virginia, you're seeing at least at this point a trend to Obama. But, Bob, I would just caution, the fundamentals of this election call for a close election. I really think the election is going to tighten. Yes, President Obama is ahead, and probably has the best chance to win, but this is going to be a tighter race than the polls show right now.
BOB SCHIEFFER: Marsha Blackburn, every poll seems to suggest that when it comes to women voters, Mitt Romney just doesn't do very well. I mean, he's up, I think now in Ohio, is it twenty-five points among women. Why do you think that is?
REPRESENTATIVE MARSHA BLACKBURN (R-Tennessee): I think there is a couple of things there. Number one, I think most women are independent voters. And they're waiting to see some specifics. And as I've been in Nevada and North Carolina and Virginia and different states, what I hear from women is they want jobs in the economy is issue number one. They want specifics. They want to know what is going to be done to repeal, replace Obamacare, make that workable. They are looking for detail. And I think a lot of the undecideds are there and that female vote is very soft.
BOB SCHIEFFER: Well, do--
REPRESENTATIVE MARSHA BLACKBURN: And, Larry, I think you're seeing that in your polling, too. It's very movable and as we get into the debates, as people react-- women are appalled with what happened in Libya. And I-- I think they're looking for some accountabilities. They want to see a serious--
BOB SCHIEFFER: But-- but-- what you are saying is that Mitt Romney is not specific enough. He needs to give us some more details on what he plans to do.
REPRESENTATIVE MARSHA BLACKBURN: I think that you're going to see that come forward in the-- in the debates and over the next couple of weeks and he has started to roll out some of the specifics and that's what women are wanting to see.
BOB SCHIEFFER: Bob Shrum, you were an adviser to John Kerry. You were an adviser back-- way back when Ted Kennedy, I guess, debated Mitt Romney when-- in that--
BOB SHRUM (The Daily Beast): Yes.
BOB SCHIEFFER: --that now famous Senate race of long ago. What would you be telling Barack Obama if you were advising him about these coming debates?
BOB SHRUM: I'd tell him first that he has got to understand that Romney can win this debate. He can win this debate if he's scripted, prepared, has really worked at it. And if you watched him on 60 MINUTES last Sunday, he was smooth, he was clear, he was succinct. He was different than he's been. He has to be careful not to be spontaneous because when he is, he gets him-- gets himself in trouble. I think they are on a search for zingers and one-liners because Romney was scorched by Kennedy in '94 by several of those. But they have to be careful because the President could very well have a comeback. I think what you do in these debate preps is you try to game out what the other side is going to say and then you try to see how you can respond. It's always strongest when it's a comeback. Zingers don't work as a cute line. They work as part of the fabric of argument. So in 1980 they knew Jimmy Carter was going to look at Ronald Reagan and say, "You were against Medicare" at the beginning, happened to be true. But Reagan looked at him, shook his head and said, "There you go again." And it was really a comment not just on that Medicare answer but on everything that Carter had said.
BOB SCHIEFFER: So what do you--
BOB SHRUM: That's when a zinger works.
BOB SCHIEFFER: --what do you think that-- that the Obama people think that they're going to hear from Romney then?
BOB SHRUM: Well, one thing they-- one thing that's being telegraphed by the Romney folks and I wouldn't have telegraphed it if-- if this was the question I wanted to ask is do you want another four years like the last four years. Because the President has clearly heard that, it's in the Romney ad--
REPRESENTATIVE MARSHA BLACKBURN: But that's the question people ask.
BOB SHRUM: Well, I know, but Ronald Reagan was smart enough not to say are you better off today than you were four years ago until he got to the debate. The President knows that question is going to be asked. He s going to prepared to answer it. All of that said, I think if you look at the history, five of the last six times an incumbent has debated a challenger in a first debate, the-- the in-- the challenger has won.
BOB SCHIEFFER: Well, so what were you going to say, Marsh?
REPRESENTATIVE MARSHA BLACKBURN: Well, that's the question people are asking.
BOB SCHIEFFER: Congresswoman.
REPRESENTATIVE MARSHA BLACKBURN: They know they are not better off than they were four years ago.
BOB SHRUM: Well, that's the wrong question actually.
REPRESENTATIVE MARSHA BLACKBURN: Because household income has gone down.
BOB SHRUM: But that's--
REPRESENTATIVE MARSHA BLACKBURN: Insurance costs have gone up. The price of a gallon of gas has gone up. Groceries have gone up. People know they are not better off than they were and they're watching--
BOB SHRUM: You know, they're-- then why has Romney moved-- why has Romney moved off that question? He's not asking that question anymore. He's asking a different question, "Do you want another four years like the last four years?" Now, I think there are some good answers to that and I think the President will get ready on that. But four years ago this country was on the abyss of a depression. We're not today and there is a reason why in all this polling data, the President, who should be behind on who can handle the economy is now either tied or ahead. People are not dumb. They don't think Barack Obama created these circumstances.
REPRESENTATIVE MARSHA BLACKBURN: People know that the stimulus and all of this out-of-control spending increasing the federal debt by fifty percent has not helped them. It has made their situation worse.
BOB SHRUM: These are just-- these are just Republican talking points.
REPRESENTATIVE MARSHA BLACKBURN: No, they're not.
BOB SHRUM: And I don't think they're going anywhere with people.
REPRESENTATIVE MARSHA BLACKBURN: They are the truth.
BOB SCHIEFFER: All right.
BOB SHRUM: Then why-- then why is Romney behind on who can handle the economy?
BOB SCHIEFFER: All right. We're going to give Marsha Blackburn a chance to answer that question. We'll be back to Larry Sabato, too, when we come back in just a minute.
BOB SCHIEFFER: And we're back now with our panel, Larry Sabato. I want to come back to you. How important do you think this debate is going to be, this first one?
LARRY SABATO: Well, it's critical to Mitt Romney. He really does have to show his stuff there, and he has to-- he has to change his image. He has the image of a country club Republican. He has to go after President Obama in a coherent way with a real message. But, you know, history tells me, Bob, that generally speaking, the challenger does gain from the first debate. It will be a surprise if he doesn't gain. And he very much needs to. He needs to get some momentum. So based on history, I'd say the odds favor Mitt Romney in the first debate.
BOB SCHIEFFER: Let me ask you about your home state, Virginia. Your center is headquartered at UVA. What's happening there? Is this going to come down to Virginia? A lot of people think it might.
LARRY SABATO: Well, it could. Obviously, it'd have to be very close to come down to Virginia with thirteen electoral votes. I-- I'll tell you, it's caused me to question some of the polls because based on everything I know about Virginia, everything I'm seeing, I think the real margin is actually quite close. I would give President Obama spotting two or three points. You know he won by six last time in Virginia. Think of the conditions in the country, it's almost impossible to imagine him winning by the same margin in Virginia or nationally. So my projection is he gets considerably fewer electoral votes than he got last time. He got three sixty-five. I'll be surprised if he gets above three twenty or so, maximum, under the best conditions. And in terms of the popular vote, he got fifty-three percent under ideal conditions for a Democrat. This time around, to me it's more like 2004 in a three-point election--a fifty-one/forty-eight election, something like that.
BOB SCHIEFFER: I'm going to close with you two. What would each of you say to the people on your side right now and-- and I'll go with you first, Marsha (INDISTINCT).
REPRESENTATIVE MARSHA BLACKBURN: Well, I think that looking at some of the way the polls are weighted, that is why you're seeing some of the polling like it is. I do think it's going to be very close. I hope that Romney does a solid performance on Wednesday night. I don't look for anything that's going to be huge home runs. I think he'll-- he will do well. Jobs in the economy, this out-of-control issue with Libya, the national security, people are watching that. Forty-three months of above eight-percent unemployment. I think it is very difficult for the President. I think these states are going to be very close. And my hope is that we're going to push forward with the win.
BOB SCHIEFFER: Bob.
BOB SHRUM: Don't be overconfident. Go out there and work very hard. I agree that this is going to be a close election. It could break open. If Romney doesn't do well on-- on Wednesday night, then this election could break open. And he has a very big challenge. I think it goes beyond issues and the alienation of people on the Medicare issue and things like that. A Republican friend of mine privately says the fundamental problem he has isn't that people don't like him, it's that people think Romney doesn't like them. That comes from the forty-seven percent tape. It comes from another of-- a number of other incidents. So in this debate he somehow or other got to make people sense that he feels and understands what they're going through. And that can't be by telling his life story. That has to be by relating to them in a way that seems authentic. So far he hasn't been able to do that but he's been practicing and he very well may.
BOB SCHIEFFER: All right. Well, thanks to all three of you. Very enlightening, and we'll be right back.
BOB SCHIEFFER: Some of our stations are leaving us now. For most of you, we will be back with a whole lot more of FACE THE NATION, including my commentary. So stay with us.
BOB SCHIEFFER: And welcome back now to FACE THE NATION, Page Two. Well, the first presidential debate, as we've been saying, will be held Wednesday. It's going to focus on domestic issue such as the economy, health care, governing. So we've assembled a panel of distinguished Americans, I would say, to talk about the state of the country and where they think America is today.
Mark Zandi is with the Moody's Analytics. He has a new book out called Paying the Price: Ending the Great Recession and Building a New American Century.
Michelle Rhee is the head of StudentsFirst, an organization that hopes to reform public education. She, of course, is the former head of our DC schools.
Former speaker Newt Gingrich is rejoining us. He does not have a new book out, but his wife Callista, does have a new book out, a children's book that will be coming out tomorrow.
Bob Woodward, an associate editor of The Washington Post. He is the author of The Price of Politics. He has written more books than this entire table combined. Well, maybe not when you put Newt Gingrich in there.
And Pulitzer Prize-winning author Hedrick Smith who has a new book called Who Stole The American Dream?
So all you people are here to sell books. That's pretty clear. No, I'm teasing. We're glad to have all of you.
Mark Zandi, let's just talk about what is the state of the American economy right now with just five weeks before we get to this election? The job numbers came out this week on Tuesday. We had some very good economic news. Housing numbers were up. Consumer confidence was up. Reports of companies hiring for the holidays seem to be up. But then later in the week, the go-- gross domestic product is down. Do you think that Americans are confused when they turn on their televisions and one day everybody says, oh, things are getting better and then they're not?
MARK ZANDI (Moody's Analytics/Paying the Price): Yeah, well, it's not a straight line. But I think it's fair to say that the economy is growing. It's been growing for more than three years. We've created 4.4 million jobs since job growth resumed, five million private sector jobs. The stock market is up. As you know, it's almost back close to pre-- previous record highs, house prices are rising again for the first time in six years so the economy is moving forward. We're not near recession. We are growing but having said that, it's clear that the economy is not growing fast enough. The rate of growth isn't sufficient to generate enough job growth, to bring down unemployment. Unemployment rate is stuck at just over eight percent and that's not good. You know, obviously, a lot of people are-- are hurting and it means that our economy is very vulnerable to anything that could go wrong.
BOB SCHIEFFER: How is it going to look on Election Day?
MARK ZANDI: I think about the same as today. You know, the economy, I think is going to make it through, growing at a very slow pace, not enough to really bring down unemployment. I will say in some of the swing states, particularly states like Ohio, which is probably the most important swing state, the economy is doing much better. The unemployment rate is closer to seven percent. They're recruiting more jobs and-- and a lot of what the President has been saying resonates because a lot of it's related to the auto sector which has rebounded and, of course, he-- he has supported the auto bailout.
BOB SCHIEFFER: Michelle Rhee, I don't know how much they'll get into this in the first debate, but, you know, it my-- it's my sense that most Americans would agree that our schools are not where they ought to be. Why can't we seem to get it right?
MICHELLE RHEE (StudentsFirst): Well, I think it's incredibly complicated and one of the things that I am most worried about is the fact that we haven't been talking more about education in this presidential campaign. And, quite frankly, I'm-- I'm a little confused as to why. First, because, you know, you've got Governor Romney who has a very solid education plan. You've got the President who I would argue of all of the things that he's done in the past four years, he's been most successful at education and so, I-- I think that the reason why potentially it's not being talked about is because both sides really have to-- are really thinking about the special interests within their party. So with the Democrats, the teachers' unions, they clearly don't want a lot of change to happen. With the Republicans, with the-- with the tea partiers, they don't want federal intervention. So that could be one reason. But the-- the reality is that we have a significant problem in this country if you look at where we are with the unemployment numbers. And also with the fact that most employers today will tell you that for the vacancies that they have, they cannot find qualified people to fill them. There is a huge disconnect there and I think this country is going to continue to struggle until we fix the public education system and make sure that we are preparing the children of today for the jobs of tomorrow.
BOB SCHIEFFER: And back to Newt Gingrich. We were talking earlier about this debate and what's at stake there. I looked at something the other day, well, it's CBS News-New York Times poll. We had the highest number of people saying the country is on the right track now that we have I think in three years, but yet it's only forty percent of people think it's on the right track. Is that a sign to you that things are getting better?
NEWT GINGRICH (Former House Speaker): Well, I think it's partly a sign that people are getting used to where we are. So that, particularly if you're going to vote for Obama, you begin to say to yourself, well, it's not that bad. And he's doing the best he can so I think there is a certain circular logic to it. My fear as I mentioned earlier is I-- I see indications that we could easily end up in a new recession early next year. I think that the numbers that came in this week on-- on manufacturing orders which was the worst since the beginning of 2009. The fact that they've re-adjusted the gross domestic product as you pointed out down, to really an anemic growth rate, much below the level of creating enough jobs. So-- so I am concerned that we're not on the right track. And, frankly, if you look at education, we're clearly not on the right track. And-- and you can go through all series of these things, beyond partisanship, this-- this is not Republican-Democrat. It's the country which is not on the right track. And I think it's going to take very wrenching leadership over several years to get us back, getting in shape for the future.
BOB SCHIEFFER: Rick Smith, I read your book, the title Who Stole the American Dream? That is a provocative title. You think this theft began somewhere back in the 70s, I guess it was, but I just want to hear you say you it.
HEDRICK SMITH (Author, Who Stole the American Dream?): Yeah, I do.
BOB SCHIEFFER: Okay. You made that statement, who stole it?
HEDRICK SMITH: Well, certainly I think it began in the 1970s. But we had a recent example of it. The fight between the NFL owners and the referees. The referees wanted to keep their traditional pension plan. The owners wanted to push them into a 401(k) plan, which by the way has been a disaster for most Americans since it's been established. And it was passed in the 1970s Congresses. Why is that-- it's symptomatic of the American economy. And that figure you just cited, forty percent think we're in the right direction. Why do the other sixty percent think no because there's a wedge? The owners of the NFL teams are making tremendous money. They got very rich franchises and all the referees want is a secure retirement, same thing that has been going on for decades here. If you look at America over the last thirty-four years a wedge has been driven in our economic system. The middle class has stayed absolutely flat. Census Bureau said last year, the average wage of a male worker is dead the same in 2011 as it was in 1978. Thirty years of going nowhere. At the top the top one percent, their income went up six hundred percent while the middle class was flat. That's why you are getting those figures. That's why we are getting slow growth. That's why we have a long jobless recovery. The middle class isn't being paid well enough, so there's not enough demand to push our economy. That-- the middle class are the job creators and we are ignoring them.
BOB SCHIEFFER: Well, Bob Woodward, your book kind of gets into that in a very contemporary way. You're just-- your book's about this gridlock we're in and now we can't seem to get out of it. You call it The Price of Politics.
BOB WOODWARD (Washington Post/The Price of Politics): Yes, I mean, what's-- what's so obvious here, and this is, I would agree with the former speaker on the issue. This really isn't or shouldn't be a partisan issue. We have a federal government that does not have its financial house in order. And it's so in disorder, if back in the nineties, you'd been speaker and there're-- you know, at that time, there'd been these difficulties, this-- this is off the charts. We have conservative and liberals in both parties in a game of brinksmanship for the last three and a half years, not solving the problems, running away from them, making political calculations. And, you know, just to connect with something, Governor Christie was saying it's a dirty little secret. Actually, it's not a secret. But President Obama knows that Medicare is we're spending too much on it, and his secret plans, he proposed cutting two hundred and fifty billion dollars in Medicare over the next ten years, which is exactly what the Republicans are proposing. People are running away from the reality of this crisis. And I would argue-- I mean--Mark's right--the economy looks good, but it can go into a tailspin in the coming months, if somebody does not-- even before a new President or Obama begins a second term, takes office, in this I'm-- I'm really not overstating this. Anyone who knows about, not just the fiscal cliff but the issue, this government is going to have to go into the debt market beginning of next year and ask to borrow another trillion or two dollars. They couldn't settle this last year or this year, how they're going to settle it next year?
MARK ZANDI: Bob, can I--
BOB SCHIEFFER: Sure.
MARK ZANDI: --this sounds awfully bleak, and it's not. You know, I think our prospects are actually quite bright. I mean I think the private sector the economy has made a lot of progress here. American businesses have reduced their cost structure. Their profit margins are as wide as they have ever been. They're making a lot of money. Banks are highly capitalized, very liquid and even American households have made a lot of progress--
BOB WOODWARD: Yeah, but-- but I'm not talking about the private-- I'm talking about the government--
MARK ZANDI: But let me finish.
BOB WOODWARD: --which can screw up everything because they have such a significant role in the economy and you must acknowledge that.
MARK ZANDI: And-- and I would concur. I exactly concur. But I-- I would argue that the political stars are aligning, regardless of who wins the presidency, President Obama or Governor Romney, that we are going to get a deal. We are going to address the fiscal cliff. I can't imagine that we're going to over that. We are going to raise the treasury debt ceiling and we are going to make some progress to fiscal sustainability. And if we do those things, I think what's going on in the private sector will begin to shine through, and this economy is off and running.
BOB SCHIEFFER: But-- but if-- let me--
BOB WOODWARD: The problem is you don't know.
BOB SCHIEFFER: Let me just-- just say interject here that in case there is somebody who doesn't know what the fiscal crisis is--
MARK ZANDI: Yeah, right.
BOB SCHIEFFER: --there are these automatic cuts in the budget that are going into effect on January 1st if the Congress cannot find some way to come together, some sort of-- of a debt--
BOB WOODWARD: In automatic tax increases and you-- you-- and you look at the numbers--
BOB SCHIEFFER: Yes.
BOB WOODWARD: --and I'm sure-- if-- if these things happen, you're going to have a government-created recession. Okay.
BOB SCHIEFFER: Yeah. But what do you think-- Newt Gingrich, do you think the-- the Democrats and Republicans will be able to get together after the election because that seems to be the only chance that this might happen were to something out.
NEWT GINGRICH: Well, I-- I think that will depend-- that will depend a lot--whoever wins the election has to spend the first sixty days prior to being sworn in, reaching out to the other party. I mean, this is-- where we are right now is utterly, totally irrational. And-- and I think whether it's President Obama, who'd-- who'd have to fundamentally change his strategy, or is Governor Romney who did, in fact, work with Democrats when he was the governor of Massachusetts, whoever is President, if they are serious about solving this, has to reach up. But I want to make a deeper point which is what Michelle has been doing. It isn't enough to talk about bigger or smaller. We need a scale of innovation in getting these things to work. I mean, it's not about a cheaper or more expensive public school system it's about a system that works. It's not about the current unemployment systems, but one that retrains workers. And-- and we don't have-- in this city, we have one-tenth of one percent of the level of innovation we need, precisely in the government sector which is the sector which is mostly screwing up the country, it's huge.
HEDRICK SMITH: But we also have a problem, Bob. We've got a tax system that is crazy. We've got a tax system that rewards corporations for moving jobs overseas. You don't hear that discussed very much. We've got a situation where the banks were bailed out to the tune of seven hundred billion dollars, and they are not willing to bail out the homeowners that are sitting with high-bubble interest rates from the-- from the housing boom before it busted and they are stuck. And that's a whole lot of unlocked-- we could unlock that as consumer spending power. What-- what we're not doing is we're not addressing the problems of the middle class. Washington is focused on what these two gentlemen are talking about--the deficit. They got to deal with the deficit. But once you're done with the deficit you've got to rebuild the middle class in this country and nobody is paying much attention to that. We've got a lot of rhetoric about it in the campaign but we don't have any serious programs being discussed.
MARK ZANDI: But-- but the necessary conditions to help the middle class is to nail down these fiscal issues because if we don't nail down the fiscal issues, nothing else we do is going to really matter.
HEDRICK SMITH: But I am with you. I think that's going to happen of necessity, because of the fiscal cliff. And then we need to go beyond that.
BOB WOODWARD: But-- but how long will it take to-- to-- to rebuild the middle class?
HEDRICK SMITH: It's taken three decades to basically decimate the middle class. It's going to take something like that to rebuild it. But we've got to be dedicated to that. And-- and that's not what we're focused on. We're focused on a fiscal deficit--
NEWT GINGRICH: But-- but, let me--
HEDRICK SMITH: Excuse me. We're focused on a fiscal deficit, not a human deficit, and we have a human deficit in this country. We've got twenty-seven million people either unemployed, working part-time, unwillingly, or dropping out of the labor market.
BOB SCHIEFFER: Let-- let me work Michelle into this conversation. You know, as you sit here hearing this, it's always education that seems to wind up at the back of the line.
MICHELLE RHEE: That's right, that's right. And I think that in education, you're already starting to see a shift. If you look at what happened a couple weeks ago in Chicago, you have a Democratic mayor, Rahm Emanuel, who is facing a three-hundred-million-dollar deficit in the city, who is looking at eighty percent of the children in the city not operating on grade level in reading or mathematics, where they had the shortest school day and school year of anywhere in the country, and he's finally, unlike many Democratic politicians, said enough is enough. I am not going to give you these raises without, you know, and-- and what the did-- what the-- what the union wanted was lifetime job security and absolutely no accountability. And so he said we can't-- we can't-- we can't continue on that track. And I think for him as a Democrat to come out and say that shows that Democrats and Republicans are now saying there is a new day and we have to move in a different direction as it pertains to education.
BOB SCHIEFFER: Let's just take a quick break here and we'll come back and continue this.
BOB SCHIEFFER: Back now with our panel. Bob Woodward just told us during the break about something President Obama said to him. What was that?
BOB WOODWARD: A couple of months ago he said as we were walking out of the Oval Office, long interview for the book, he said if Newt Gingrich had been speaker and Bob Dole Senate majority leader, I would have been able to work out a deal on the deficit and the debt. True?
NEWT GINGRICH: Well, I think it would depend a lot on Obama. The-- the-- the big difference was we closed the government twice. We had a running fight with Clinton. He reached a conclusion that-- that he as well as we had to find a common ground. And as a result it was a much harder, complex struggle than that. But, I think, whoever is elected President this November better start the next-- literally, the next day, calling the other party, and not just the leadership, which is the most partisan part. But every member of the other party in saying, "Okay, we got four years of living together. What are we going to do for America together?"
BOB WOODWARD: And it means compromise. And this is the Joe--
HEDRICK SMITH: There's the magic word.
BOB WOODWARD: Yeah. And-- and this is the Joe Biden approach on behalf of Obama when they have actually worked out some deals with Congress, Biden goes to the Republicans and says, "okay, let's do it the old way. One for you, one for me; not just drawing the line, saying you've got to do it my way."
MARK ZANDI: I think you get compromise because both sides have leverage, right? I mean, if you think about it. I mean, tax rates are going up on everyone by-- by law. That's going to happen. So that gives leverage to the Democrats. Yet sequestration was, what you mentioned, Bob, the automatic cuts, Republicans hate the defense cuts. Democrats hate the nondefense cuts. And then you have the treasury debt ceiling, which gives leverage to whoever party doesn't win the presidential election. So it's in that kind of environment when both sides have a lot to lose that you tend to get agreements. And that's why I think odds are pretty high that we're going to get an agreement.
MICHELLE RHEE: And I actually think that the best place for-- for-- for both sides to start is in education because I sit in a lot of conversations with Republicans. I sit in a lot of conversations with Democrats, and they agree on a whole lot more than they disagree on. So it seems to me that both parties could come together and say, okay, we're going to put the partisan politics aside and-- and look out for the interests of kids, and let's-- let's focus on education first.
BOB SCHIEFFER: Do you know what bothers me about all this and what really worries me. As I sit here and watch the Congress I know what you say is true there are certain things that both sides want to do but even now, this-- this divide is so wide, even now, on things they want to do, they can't figure out how to do it. I mean, for example, the farm bill. We had the worst drought in this country since the Dust Bowl. Yet, they could not figure out how to pass a farm bill. What-- what's happened to our system?
BOB WOODWARD: Well, one-- one of the things that's happened-- and Obama said this when I talked to him, he said Republicans came in to the Oval Office, looked him in the eye and said, "if we work these things out, it will guarantee your reelection, and we don't want that to happen, so we're going to sabotage it."
HEDRICK SMITH: You know the lesson may come from country rather than from Washington. We're focused here in our conversation on Washington. One of the interesting things about the auto bailout was not just that the com-- the companies survived but labor and management actually sat down and started making agreement together. We've used the magic word compromise. Labor said, okay, we'll take flat wages for the next several years and-- and management said, okay, we will bring back plants from Mexico. We won't move jobs overseas. That's the kind of thing that has to happen. In the German economy, which is beating us all the hell, we have a six-trillion-dollar trade deficit in America over the last decade. Germany had a two-trillion-dollar trade surplus. The wages of their workers went up five times faster than ours. They've got twenty-one percent of their workforce in manufacturing. They found out how to work it together, management and labor working together; the governor helping small business export. Corporate tax rates that make sense that help people keep good jobs at home and export more. We could adopt policies like that and we could get examples from within the economy.
MARK ZANDI: Bob, I also want to point out that these folks can still make deals. I mean go back to the treasury debt ceiling deal last summer. Remember all the brinksmanship that nearly drove our economy right into a ditch. They actually came out of that with something. We got a trillion-- exclude the sequestration. Let's forget about that for a second. But we got a trillion dollars in spending cuts over a ten-year period. That's not inconsequential. That's one-fourth of the way we need to go to get to--
BOB WOODWARD: Wait a minute. Factually, it's all pushed off to beginning in 2013. They cut nothing real time in the administration's period. They just did not.
BOB SCHIEFFER: Let me--
BOB WOODWARD: So, you know, and-- but this becomes important. Facts do matter, and we get this idea, oh, they cut spending. They did not cut spending. They postponed it. Everything in the law-- I'll bring in the law, says beginning in 2013.
BOB SCHIEFFER: Can they still make a deal?
NEWT GINGRICH: Sure. I think one of the encouraging things is to look at the states. I mean if you look at what's happening in Florida, what's happening in Ohio, part of what's making Romney's job more conflicted is the case it's doing a pretty good job. Scott Walker has got things moving. There are a lot of states if-- if you look at Mitch Daniels, for example, maybe the model for intelligent, effective reform at the state level. There are a lot of reasons to believe that the underlying system is healthier than Washington. And my only point is whoever the winner is they should put on their schedule about that half their time from that date to the inaugural is spent with all the members of the opposition party, not the leadership, but listening literally to all the members of-- if Romney wins, he needs to listen to Democrats. If Obama wins, he needs to listen to Republicans because they've got to reestablish human ties in order to have a genuine opportunity for real compromise.
HEDRICK SMITH: So they also need to listen to the country, because if you read the polls from the country, eighty percent of the people will say lobbyists have too much power; sixty-five percent of the people will say, raise the tax rates at the top. They'll say spend more money on jobs and education and things like that. So Washington is not listening to the country. It's very busy with itself.
BOB SCHIEFFER: All right. I'm listening to the control room. They say our time is up.
I'll be back with some final thoughts in a second. Thank you all.
BOB SCHIEFFER: So the first of the presidential debates are upon us. They are always substantive and informative, but they usually bring a surprise, and even a laugh or two.
MAN #1: Mister Perot, you have one minute, Sir.
BOB SCHIEFFER: In 1992, Ross Perot made it three candidates instead of the usual two, and he really livened things up.
ROSS PEROT: We've got to clean this mess up, leave this country in good shape, and pass on the American dream to them. We've got to collect the taxes to do it. If there is a fairer way, I'm all ears.
BOB SCHIEFFER: When I moderated the 2008 debate--
Rules tonight are simple--
--a third party also figured in the proceedings, a man who had become known as Joe the Plumber.
SAMUEL JOSEPH WURZELBACHER: I mean I've worked hard. I'm a plumber.
BOB SCHIEFFER: He had become a symbol of the frustration of many blue-collar workers to the point that when the candidates sat down to debate--
SENATOR JOHN MCCAIN: With Joe the Plumber--
BOB SCHIEFFER: --you got the idea Joe was running for something, too.
PRESIDENT BARACK OBAMA: Now the conversation I had with Joe the Plumber.
SENATOR JOHN MCCAIN: I want Joe the Plumber.
PRESIDENT BARACK OBAMA: To Joe the Plumber.
SENATOR JOHN MCCAIN: I like Joe the Plumber.
PRESIDENT BARACK OBAMA: And I'm happy to talk to you, Joe, too, if you're out there.
SENATOR JOHN MCCAIN: To people like Joe the Plumber.
BOB SCHIEFFER: Joe became such a part of the conversation that I thought about thanking him at the end. But this was a presidential debate, so I didn't want to be too cute.
BOB SCHIEFFER: And who knows what this year will bring. But I doubt we'll hear from Joe. It turns out he is busy running for Congress out in Ohio.
Back in a minute.
BOB SCHIEFFER: Well, that's it for us today. Be sure to tune in Wednesday night 9 PM Eastern for our CBS News coverage of the first presidential debate out in Denver, moderated by my friend Jim Lehrer, and we'll see you here on FACE THE NATION next week.
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