"Face the Nation" transcripts January 6, 2013: Pelosi, McConnell, New Congressmen

By: CBSNews

SCHIEFFER: All right. Well, it's nice to have all of you. Senators, it's nice to have you, too, Congressman. We'll be back in a minute with our analysis.

SCHIEFFER: Back new for a little analysis. Two of the smartest people in Washington. David Sanger is the chief Washington correspondent for the New York Times and Rana Foroohar is assisting managing editor of Time magazine. David, I was very interested in a piece that you wrote this week when you talked about the impact that these -- the fiscal cliff negotiations had on, kind of, the perception of this country. You talked to a lot of foreign policy experts. What was -- what did you come away from that, doing the research on that piece, feeling?

SANGER: Well, Bob, I felt that, at the end of the whole fiscal cliff drama that we saw, I think the world saw a Washington that still appeared to be dysfunctional, that hadn't addressed the major issue. Remember, the fiscal cliff was all about forcing Washington politicians to deal with the bigger grand bargain that you have been discussing through the entire show.

SCHIEFFER: And the thing we should not overlook is it was something created by Washington. This was not the Japanese bombing Pearl Harbor. This was not something that happened -- that came from some place else. This was created here.

SANGER: It was -- and we forgot what we were trying to do. I mean, what they were trying to do in this was -- was to actually solve these issues that would restore some confidence that the U.S. could go ahead in a leadership position. So what kind of weakness does that create? I think three-fold. The first is there's a perception that the U.S. is still having a hard time getting its act together. The second is I think people around the world are looking and saying, is the U.S. prepared to remain engaged in many parts of the globe, even as it pulls out of Afghanistan? We're already out of Iraq. People aren't convinced of that. And third, the president has said a big element of his future strategy is the pivot to Asia, which is going to take time and resources -- not clear that's going to happen. What hasn't happened is investors are not fleeing from the U.S., and that's the best news. The question is can you get through this next debt limit fight with that still being the case?

SCHIEFFER: And, Rana, talk about that, a little bit, because you -- you focus on economics.

FOROOHAR: Absolutely. And it's fascinating because, if you look at what happened last time around in August of 2011, when we were having the big debt fight, you didn't see as much of a downturn in U.S. markets as you -- as you might have. In fact, 10-year treasuries actually rallied. But at that point, we were really benefiting from being the prettiest house on an ugly block that was the global economy. Europe was falling apart. The emerging markets were slowing down. The situation's a little bit different now. Europe is actually stabilizing. China, at least, is not going to have a hard landing. It looks like growth is continuing there. So I think the global investors may not be as patient with us this time around and it really is the political dysfunction that they want to see corrected, because our underlying growth is actually pretty good compared to competitors like Germany, France, UK, Japan, we're doing better still.

SCHIEFFER: Do either of you see anything down the vote here when they get ready to vote raising the debt ceiling that is not going to be just like we saw on this thing with the fiscal cliff -- last minute, last hour, last day?

SANGER: I'm sure it will be last minute, last hour. It always is. The big question is President Obama has said he won't negotiate within the -- on the debt limit issue itself, that he'll talk about spending cuts elsewhere. Now, that was what he was supposed to be doing with this last fiscal cliff effort. It will be interesting to see whether or not he comes around to go do that. In the end, my suspicion is the debt limit will pass again because the consequences of not doing it are so great. Last time we lost a bit of our credit rating just on the threat that it might not pass.

SCHIEFFER: What about what we heard one of the congressmen saying, actually, the last time they shut downtown government that was a good thing.

FOROOHAR: Well, you know, there are some disasters scenario arguments to be made. Some people feel that that's what it takes to really change things. I agree with David, we can't default on our debt certainly. Most of the world's economy is run in dollars, that would be a complete disaster. It would be a Lehman Brothers times 10. And I don't think we are going to do that. I am worried, though, that we may end up in a position where we have to make spending cuts earlier than we should given our growing. If you look back historically not just in this country but all around the world, when you go through a period like we're in, you really want to have growth closer to trend which for the U.S. is more like 3 percent a year rather than the 2 percent that we're in right now before you start make a lot of cuts.

SCHIEFFER: David, I want to ask you because I know you follow this very closely. If all the signs are that Monday, tomorrow, the president is going to nominate Chuck Hagel, the former Republican senator, to be secretary of defense, and it looks like he's going to be in for kind of a rough confirmation hearing.

SANGER: That's exactly what it looks like, Bob. And to some degree, that's something of a surprise because the idea of appointing a Republican senator, in this case a decorated Vietnam War hero, was to have a fairly easy passage. But there's going to be a few issues for Senator Hagel. He is not on board with the president's strategy on Iran. He has voted against all of the major efforts to impose sanctions on Iran or many of them. He has -- he made some comment about gays and lesbians that he apologized for a few weeks ago. He made them many years ago. He made them many years ago. The White House has said that they think that that resolves the issue, but I think he's run into some opposition there. And then the pro-Israel lobby has been very, very active in campaigning against him. Republicans themselves I think on your show, you've heard some Republicans say they doubt that he's going to get many Republican votes.

SCHIEFFER: Very interesting. Well, I want to thank both of you for helping us on all of this. And we'll see what happens. And we'll be right back.

SCHIEFFER: Well, that's it for us today. We'll be right here next week Sunday. Thanks for watching Face the Nation.