Face the Nation Transcripts May 18, 2014: McDonough, Dellinger, Bloomberg, Geithner

(CBS News) -- Below is a transcript from the May 18th, 2014 edition of Face the Nation. Guests included: Denis McDonough, Dan Dellinger, Timothy Geithner, Michael Bloomberg, Gerald Seib, Katrina vanden Huevel, Jamie Calmes, and John Dickerson.

BOB SCHIEFFER: Today on Face the Nation: Pressure mounts over the VA scandal, the 9-11 museum opens and Chris Christie talks politics.

As anger over the mistreatment of America's veterans grows, we'll ask the White House Chief of Staff why the president isn't taking a more direct role in fixing it. We'll hear from the head of the American Legion, who was the first to call for the firing of VA Secretary Shinseki.

In New York, the 9/11 Museum opened last week, we'll talk to the driving force behind it, Former New York City Mayor Michael Bloomberg who also has some thoughts among other things on Hillary Clinton.

Former Treasury Secretary Timothy Geithner is here to talk about what it took to bring the country back from the worst recession since the 1930s..and it's been a busy week on the 2016 campaign trail

SOT:

BOB SCHIEFFER: Are you still thinking about running for President and when will you decide?

CHRIS CHRISTIE: Yes and later.

END OF SOT

BOB SCHIEFFER: Plus analysis on all of the above from our all-star panel. 60 years of news because this is Face the Nation.

BOB SCHIEFFER: And good morning again. The scandal at the Veterans Administration hospitals may be even worse than we thought. The VA admits that 23 patients died at VA hospitals because of delayed treatment. But this morning the Dayton Daily News reports that since 2001 the agency has paid out 36.4 million dollars to settle claims of "delay in treatment," The money was paid out either voluntarily or as part of a court action.

In a somewhat contentious interview Friday with White House Correspondent Major Garrett, the president's chief of staff Dennis McDonough sought to emphasize the positive.

DENIS McDONOUGH: ..the President is madder than hell, and I've got the scars to prove it given, briefings that I've given the President and the conversations that he and Rick and I have had on these matters...but at the same time that we're looking at accountability we want to continue to perform to provide our veterans the services that they have earned, 40 billion dollars and assistance for the GI bill,14 percent increase in, spending on the veterans' health administration, 16 percent increase in the number of veterans getting care, through the veterans' health administration. These are all the kinds of investments that the president believes strongly we have to make, that's why he's fought for them on the hill and he'll continue to fight for them.

MAJOR GARRETT: The Washington Post described Secretary Shinseki's performance yesterday before the Senate committee as "maddeningly passive," was the President satisfied with the Veterans Secretary's performance, not only in that testimony, but overall?

DENIS McDONOUGH: We don't score testimony on Capitol Hill or otherwise, what we score is results as it relates to the services and the benefits that our vets have earned, and we've seen dramat-from this administration, historic increases in the budgets year on year...we have seen obviously the reports out of places like Phoenix and Fort Collins, and North Carolina and we're going to get to the bottom of those things, fix them and ensure that they don't happen again.

MAJOR GARRETT: Advocates in the veterans community raised red flags, said the system won't be able to handle these people, the 14-day waiting list to get care, to get in won't be realized, they warned you and others that you were setting unrealistically high expectations and now we have credible reports mentioned by members of the Senate and reported by this network of shadow lists being put together to create a phony impression of getting people in in 14 days when the reality is they weren't getting in any close to 14 days-so, yes you may have set an accountability standard and a goal, but now you have a bureaucracy that is running amuck and creating a fraudulent impression. How can the President be satisfied with that?

DENIS McDONOUGH: We're-I did not leave you with any impression that the president was satisfied, in fact, the President's demanding that we get to the bottom of the exact allegations that you're talking about as it relates to, whether, veterans are getting the timely access to care that they have earned. That they deserve and that's exactly what we're digging into, we've, the president as soon as these reports surfaced, the president, asked that Sec-Secretary Shinseki report back to him immediately, on the kinds of accountability measures that he has in place and whether he needs additional accountability measures. We've now deployed additional staff over to the veterans' administration to dig into this to find out if this is a series of isolated cases or whether this is a systemic issue that we need to address, with wholesale reform. We're not going to stop Major, making this better until it in fact is better because that's exactly what our veterans deserve.

MAJOR GARRETT: And is Eric Shinseki, the Veterans Administration Secretary the person to carry out this mission as he describes it for the remainder of this administration?

DENIS McDONOUGH: General Shinseki continues to work this every single day, you saw him up there, he testified for three hours yesterday, sat and listened to the veterans service organizations after he finished, went out after that and talked to the press again, and he will continue to work these issues until they're fixed and the president will-

MAJOR GARRETT:..with the full confidence of the President of the United States?

DENIS McDONOUGH: The President will continue to demand that he and all of us who work for him continue to fix these things until they are functioning the way that our veterans, believe they should and the way that, so that they get the, the services and the benefits that they have earned.

MAJOR GARRETT: Let me ask you about the President himself, you've described scars that you have from the President, from his anger based on briefings you've given him, well what has the public heard from the President? It's been nearly three weeks since the President has commented on this publicly and I want to take that period of time, almost three weeks, nothing from the president publicly...Where's the president been?

DENIS McDONOUGH: The president, the president has been, an active voice for increased resources and reform at the veterans administration since he joined the veterans committee in the Senate over, 7, 8, 9 years ago and he will continue to do that.

MAJOR GARRETT: But I'm talking about a specific issue?

DENIS McDONOUGH: and he will continue to go out and he will continue to talk, as he did in Asia, in response to questions and throughout the course of his administration, we'll continue to fight for reform, continue our fight for performance and we'll put his money-the money of the United States government-where his mouth is.

MAJOR GARRETT: So if the veteran in the country says where's the president been, you would say he's been playing the inside game?

DENIS McDONOUGH: I would tell that that veteran would know that the President has been fighting for increased resources for the Veterans Administration, the President has been out time and again fighting to make sure that not only those resources out there but that the country recognizes the sacrifices that those veterans have made, the President is continually out there talking about the challenges that are faced in this country by veterans suicide, by active duty..

MAJOR GARRETT: But he has, but he has not addressed this issue..

DENIS McDONOUGH: Un-untrue.

MAJOR GARRETT: I mean, in the firestorm that's going on right now---

DENIS McDONOUGH: --as it relates to post-traumatic stress-as it relates to post-traumatic stress where he's been out there time and again...we have worked to lower veterans unemployment by one point five percent, over the course of the last several years, and we'll continue to make sure that there's the kind of jobs available for vets. He has fought for that, he will continue to fight for that.

MAJOR GARRETT: Denis, can you understand how a veteran who may have been victimized by these waiting lists or be concerned that they might soon become victimized by this waiting list, might hear all your answers and say, yes, I understand the broad argument you're making about things the president has done, but I need specific answers and specific outrage about this problem now?

DENIS McDONOUGH: The President, nobody is more outraged about this problem right now, Major, than the President of the United States. And he will continue to press as it relates to this question of timely access to care until it is fixed, that's why we've invested additional billions of dollars in the Veterans Health Administration so that they can have timely access to good care. And, as it relates to these allegations, what we're going to do is we're going to get to the bottom of them, ensure we understand exactly what happened, and ensure that it never happens again.

BOB SCHIEFFER: The White House Chief of Staff with our Major Garrett. We're going to turn now to Dan Dellinger. He's the head of the American Legion, the group leading the charge to replace Secretary Shinseki. Commander, we're glad to have you. Well, you just heard the White House Chief of Staff. He keeps talking about increased resources and finding ways to reduce unemployment for our veterans, but he never really, to my mind, specifically addressed this problem. He will not admit that there's a cooking of the books going on right now to make it appear that these people don't have to wait. He, at this point, as Dana Milbank of the Washington Post has pointed out, has not asked the Justice Department to investigate yet. They keep saying, "Well, we're investigating. What's your reaction to all of this?"

COMMANDER DANIEL DELLINGER: Well, we realize that the administration has done a lot for the veterans. But that isn't the issue. The issue is we're having veterans die waiting for the care that they've earned. And it all goes back. And they keep talking about waiting for this study to be done. Well, there's been almost 50 IG reports, from our understanding, from what the (UNINTEL) testimony on Thursday that this has been an ongoing problem.

And we hold Secretary Shinseki to the highest standards here. He should be coming forward with the same leadership he showed in the military as a four-star general into the V.A. And it just hasn't happened. The accountability has not been there. And I think it is symptomatic of the entire system. It needs a cultural change there and we just haven't seen that.

BOB SCHIEFFER: Do you want to hear from the president himself? It does seem a bit unusual: For three weeks now, the president himself has not felt the need to speak out personally about this, if I'm correct.

COMMANDER DANIEL DELLINGER: Exactly. We need the White House, the president, to come forward. He needs to make a statement to show the employees of V.A. that this needs to change now. One death is tragic. But when you hide it, that's unforgivable.

BOB SCHIEFFER: And now, we have this report coming this morning from the Dayton Daily News talking about that more than $34 million in claims have been paid out by the government for people who listed delay of payment. And some of this came as a result of court action, some of it the V.A. just did voluntarily. So, this would suggest that this may be even wider and broader than we know about.

COMMANDER DANIEL DELLINGER: I believe it is. We've heard reports of this in single cases. But to have all these figures put together, it is really striking. And it shows the lack of accountability and egregious mismanagement of the entire system. That's why I feel that cultural change is necessary.

BOB SCHIEFFER: Well, what do you think went wrong here, when you say "cultural change is necessary"?

COMMANDER DANIEL DELLINGER: Well, everyone's getting bonuses. And I don't have the figure as to how many bonuses have been issued by the V.A. But it seems like they're getting bonuses for just doing their job. Even when you have preventable death, like the Legionella outbreak in 2011 in Pittsburgh, the then-director Moreland got a $53,000 bonus for veterans dying under his watch. And it goes all the way down to even the clerk. Everybody seems to get a bonus for doin' their job.

BOB SCHIEFFER: Well, when do you think the buck stops here?

COMMANDER DANIEL DELLINGER: Well, the buck's got to stop at the top. It's accountability. If it was a CEO, for many CEOs lately or major corporations, stepping down. If this was the military, you'd be relieved of duty. So, that is why we called for the secretary and the two undersecretaries, Hickey and Petzel, to step down.

And, of course Undersecretary Petzel has given his resignation. But he was already scheduled to leave. And his replacement had already been name. So, this seems to us to be business as usually. And we haven't seen that quick proactive versus reactive culture change we'd like to see.

BOB SCHIEFFER: All right. Well, commander, we thank you for joining us this morning. And we'll stay on this story.

COMMANDER DANIEL DELLINGER: Thank you very much, Bob.

BOB SCHIEFFER: The new museum dedicated to the victims of 9/11 opened at the World Trade Center site last week, former New York Mayor Michael Bloomberg was the driving force behind the museum and he spoke at its dedication on Thursday.

BLOOMBERG: IT IS A WITNESS TO TRAGEDY. IT IS AN AFFIRMATION OF HUMAN LIFE. IT IS A REMINDER TO US AND TO ALL FUTURE GENERATIONS THAT FREEDOM CARRIES HEAVY RESPONSIBILITIES. AND IT IS A REFLECTION OF OUR BELIEF THAT THE TRUE HOPE OF HUMANITY RESIDES IN OUR COMPASSION AND KINDNESS FOR ONE ANOTHER.

BOB SCHIEFFER: After the dedication, we sat down with Michael Bloomberg at his Manhattan office and he told us why he felt the museum was so important.

MICHAEL BLOOMBERG: I think to families, it's they lost loved ones. And you can't put yourself in their position. But to me it is the fact that freedom is not free. It's a lesson that we keep forgetting. And here was a chance to graphically with scale-- tell the next generation and the generation after that and maybe tell our elected leaders today that we've got to protect ourselves from people who don't like our freedoms...We are the symbol for the world as-- and New York is the symbol for America and I suppose downtown, the Trade Center was the symbol for New York-- of some basic freedoms which others don't want us to have. It isn't some, it isn't that they don't want them for themselves, they don't even want us to have them.

BOB SCHIEFFER: This is a painful tribute in some ways. There are these mementos and items, the burned out fire engine, the shoes splattered with blood, columns from the World Trade Center, the wristwatch worn by Todd Beamer. Is this museum meant to evoke pain?

MICHAEL BLOOMBERG: No, but it is meant to give an accurate representation of history. That's the first thing the museum has to do whether you like it or not, whether you agree with it or not, whether-- certain things happen and a museum's first obligation is to tell what happened and then to try to put it in context.

BOB SCHIEFFER: Can I talk a little bit about life after being Mayor?

MICHAEL BLOOMBERG: It's your program, you can talk about anything.

BOB SCHIEFFER: (LAUGH) You have announced plans to spend fifty million dollars of your own money on a grassroots movement to combat gun violence. You say-- these are your words, "We need to make the National Rifle Association afraid of us." How are you going to do that?

MICHAEL BLOOMBERG: We need to make the Congress understand that the vast preponderance of the public does not want criminals, minors or people with psychiatric problems to be able to buy guns. And we've gotta make Congress understand that and vote that way. What the NRA has focused on is making Congress afraid of them, in spite of the public wanting rational background checks for gun shows and internet sales.

There already are nationwide gun -- requirements for background checks on guns sold through stores. But for internet sales and gun show sales, we've gotta make sure that the congressman understand the vast bulk of Americans want them to vote for sensible gun regulation. Not control, not banning, just regulation. And this is true of gun owners as well as non-gun owners. Eighty percent of all gun owners think we should do this. The trouble is the NRA has created fear in the minds of the congressman, "We're gonna hurt your reelection." And we've got to answer that by saying, "No, quite the contrary. The public's not gonna vote for you unless you do something to protect them and their kids."

BOB SCHIEFFER: Let's talk a little politics. What did you think about Karl Rove's assessment that Hillary Clinton may have had some sort of brain damage?

MICHAEL BLOOMBERG: I understand political arguments. You can disagree with somebody on their views. You can even criticize a lot of their performance. But there is a line beyond which you shouldn't go.

And I thought it was about as inappropriate a thing you could say. I was with Hillary Clinton yesterday, she was at the memorial. She used to be the Senator from New York, so I know Hillary Clinton very well. And we-- because we are the diplomatic center of the country in New York, we have more missions and embassies than you do in Washington, and when she was Secretary of State we worked together. And I worked together with her husband and the Clinton Global Initiative. Hillary Clinton, whether you agree with her policies or not, whether you want to vote for her-- I don't even know if she's gonna run, but she's a quality person. She is also a great American, works as hard as anybody and is dedicated to this country. You can't ask somebody to do more than she has done for her country. I thought his remarks just were outrageous and over the pale or whatever the expression is.

BOB SCHIEFFER: Do you think-- you say you don't know if she's gonna run or not, but if you had to make a guess today--

MICHAEL BLOOMBERG: I'm not in the business of--

BOB SCHIEFFER: --would you say she is the--

MICHAEL BLOOMBERG: That's your business. And you know, all the op-ed people that you interview, that's their job. I have no idea. She's not told me whether she's running or not running. And I don't think that she is going to tell me. I'll read it in the paper--

BOB SCHIEFFER: Do you think she'd be the best Democratic candidate?

MICHAEL BLOOMBERG: I think she would be a spectacular candidate on the Democratic side. I have friends on the Republican side, a few of whom may run for president. And I think they are very competent. And I think what would be great for the country if you had two experienced people, people that really had been in government and know what they are doing, and Hillary certainly does. And you know, on the Republican side Jeb Bush for example is on my foundation. The governor of Wisconsin-- Governor Christie's mentioned all the time. These are people with executive experience. At least they know what it is and they won't have the excuse of, "I didn't know what it was like when I got elected." These are people all of whom would be great if the country had the choice among them.

BOB SCHIEFFER: Do you think that Chris Christie was hurt by this bridge scandal?

MICHAEL BLOOMBERG: I don't know. You know, it's a long time between now and then. I'm sure he wished that it hadn't happened. But Chris Christie is going to be judged based on the job he does leading New Jersey. Jobs and the deficit and freedoms in New Jersey and the clean-- how clean the air is and you know, all the things that governors are supposed to do. That in the end is what he is gonna have to run on that record...I assume he wished it hadn't happened, but that's not what this election is going to be about.

BOB SCHIEFFER: Would you ever think of running for president?

MICHAEL BLOOMBERG: If I thought I could win, it would be something to consider. But you can't win, and I've given 12 years to public service and I'm not gonna be a candidate for president.

BOB SCHIEFFER: What do you mean you think you couldn't win, you mean as an independent?

MICHAEL BLOOMBERG: Yeah, as an independent. I think, I've said this a long time-- a lot of times, the party loyalty means a lot to some people and there's a big percentage of the public that would vote Democratic or Republican no matter who their candidates were. And they're just not, no matter how much the press wants to create an independent-- because it's good for selling newspapers and inches and minutes as I describe it. They want to create a battle, but it's just not possible.

BOB SCHIEFFER: Well, have you ever thought about going back to being a Republican or a Democrat?

MICHAEL BLOOMBERG: Well, I used to say I'm too liberal for the Republicans and too conservative for the Democrats. But I'm not so sure in either case that's right. I am a fiscal conservative, a social liberal and I believe in actually doing things rather than pontificating and promising and then never delivering or delivering in ways that it's never gonna work.

BOB SCHIEFFER: Mr. Mayor, it's always a pleasure-

MICHAEL BLOOMBERG: Happy to do it. Thanks for having me.

BOB SCHIEFFER: Thank you.

BOB SCHIEFFER: And we'll be back in one minute

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BOB SCHIEFFER: Speaking of 2016, we also caught up with New Jersey Republican Governor Chris Christie this week, he was in town for the Peterson Foundation Fiscal Summit.

[VIDEO CLIP]

BOB SCHIEFFER: Are you still thinking about running for President, and when will you make a Decision on that?

CHRIS CHRISTIE: Yes, and later.

BOB SCHIEFFER: Later. You said something very interesting yesterday on that radio program I talked about. You said you like Jeb Bush a lot.

CHRIS CHRISTIE: Yeah.

BOB SCHIEFFER: And you said if he decided to run, and you ran, that would be stressful for you.

CHRIS CHRISTIE: Well, I responded to the question he said - the interviewer asked, "If Jeb Bush ran, and you ran, would that be stressful or no problem?" So I was given a choice between two. So I said, "Well, between the two, it would be stressful, because I like Jeb. I respect him. I consider him a friend. I consider President Bush 43 a friend. And you don't like to run against people who are your friends. You'd rather run against people you don't like. It's easier, alright? So it would be stressful. But it won't determine my decision. And I suspect it wouldn't determine his either. But the only positive about it would be I know I'd have fun with Jeb on the campaign trail. We believe in a lot of the same things. I think we're very similar in terms of our approach to solving problems, and I also think he's one of the nicest people I've had the chance to meet in public life. He's a good guy and I like him.

BOB SCHIEFFER: So who do you not like in the Republican field?

CHRIS CHRISTIE: Well, we'll have to see who runs first, Bob. You know, I don't want to tell someone I don't like him and then they turn out not to run. That would be a wasted unlike, wouldn't it? So...LAUGHTER

[END OF VIDEO CLIP]

BOB SCHIEFFER: And I'll be right back with a word about the legendary Barbara Walters.

[COMMERCIAL BREAK]

BOB SCHIEFFER: Barbara Walters said her goodbyes last week. To the many well deserved accolades I'll just add this: she was the best reporter I ever competed against.

The word relentless must have been invented to describe her. Just one more story:

VOICEOVER: At the 1980 Republican convention, when there were reports Ronald Reagan was thinking of choosing former President Ford as his running mate, the whole convention came to a stop and people stood, mouths agape as Walter Cronkite got Ford into our anchor booth for an exclusive interview. All but Barbara, that is. She was pounding on the anchor booth door trying to get in--was she trying to join the interview or just hustle Ford out of there? We never knew because we locked the door. We knew who we were dealing with. But she got the next interview.

So thanks for the memories Barbara. You may say you're retiring but I don't believe a word of it. My guess is the next big story that breaks; you'll find a way to get in on it--because you're Barbara.

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BOB SCHIEFFER: Some of our stations are leaving us now, but for most of you we'll be right

back with a lot more Face the Nation.

[COMMERCIAL BREAK]

BOB SCHIEFFER: Welcome back to Face the Nation. Usually, when we talked to Treasury Secretary Tim Geithner when he was in office, there was always some sort of financial crisis going on. Now, he is the former Treasury secretary. And he is here to talk to us about his new book, Stress Test: Reflections on Financial Crises. And we're happy to see you under less stressful conditions. Although, I must say, I've done a few book tours in my time and I found those pretty stressful. How are you holding up?

TIMOTHY GEITHNER: Oh, I'm doing fine. It's good to be a former secretary of the Treasury. Definitely.

BOB SCHIEFFER: Before the 2008 financial meltdown, you were at the New York Federal Reserve. And you write in your book that you warned about the very things that led to the meltdown. Tell us about that, since I don't think people have a sense of how you saw this coming.

TIMOTHY GEITHNER: This country had a long boom in borrowing and leverage, a huge buildup in risk. And a lot of that risk ended up outside the formal banking system in places where it couldn't be contained and where the government had no standing authority to prevent panics. And that combination of factors, this long boom in lending and borrowing, combined with the fact that a lot of it had migrated outside the banking system, made this crisis just devastating and very hard to contain.

BOB SCHIEFFER: When they asked you to head up the Treasury Department, clearly you had some idea that there were some hard times coming. How overwhelming was that? Did you understand what you were going to have to fix?

TIMOTHY GEITHNER: I knew it would be terrible. And I tried to talk the president out of asking me to do it. Because I didn't want to move my family and I knew it was going to be hard. And also, I had been already deeply involved in the design of the rescue, the deeply unpopular rescue. And I thought he would be tarred by that and hard for him to separate himself from that. So, I tried to talk him out of it. But I knew it would be hard.

BOB SCHIEFFER: Did you expect the Recovery Act and the TARP to be so radioactive politically?

TIMOTHY GEITHNER: Not the Recovery Act, but TARP definitely. The thing about financial crises, Bob, and particularly for panics, for sort of major severe crises, is that the things you have to do to protect people from the consequence of collapse are deeply unpopular, inherently unpopular.

Because it looks like you're giving aid to the arsonist. The things you have to do to protect people from mass unemployment, to keep the lights on in the economy, requires things that seem deeply unfair. So, inherent in successful economic rescues are things that are deeply unpopular. And, of course, I knew that, felt that was unavoidable, lamentable (INAUDIBLE).

BOB SCHIEFFER: I was interested and you say that you were terrible at public speaking in your previous jobs. You were not exactly a big P.R. personality. Those are your words. Did that hurt you when you became Treasury secretary? Or did you suddenly find the words to explain what you meant? I always found your explanations fine.

TIMOTHY GEITHNER: You're very generous. I do think it hurt a lot. Because perception is very important in governing. It's really important to try to give people a better feel for what they were going to face and what our choices were. And that's a hard thing to do in a financial crisis, again, because what you're doing is going to be inherently unpopular. But I think it was very damaging. I wasn't hired to be the communications guy. I was hired to try to fix the crisis and prevent a second Great Depression. But still, it was damaging.

BOB SCHIEFFER: At any time when you were Treasury secretary, did the administration ever try to get you to put a more positive spin on things than you thought the situation deserved?

TIMOTHY GEITHNER: No. I never had that experience. I had amazingly good experience with this president and this White House in the sense that my overwhelming experience was this was a man very good at making decisions, unpopular decisions, after looking at all the evidence, who was willing at that time to put policy ahead of politics in a way that was very important for the country.

Because, again, it would have been easy for him to sit back and say, "I'm going to let it burn itself out. It's something I inherited. I'm not responsible for it." And that would have been devastating for the country. So, my experience was he was excellent in crisis, good at making decisions, very tough on the rest of us, very tough on all of us to make sure he was getting all the options. And I never felt I was in a position where they put a political constraint on what we were doing, and definitely never tried to make us more optimistic than we should have been.

BOB SCHIEFFER: You are now a former. What advice do you have to the administration right now on this problem with this Veterans' Administration, where you seem to have just an intractable bureaucracy? Former Secretary of Defense Bob Gates told me last week, he said of all the bureaucracies, the one that was even harder to deal with than his own was the Veterans' Administration. It seems to me, you heard the commander of the V.A. say this morning, they just need a change of culture over there.

TIMOTHY GEITHNER: Well, I think the men and women who have served our country, we owe them everything. The American people owe them everything and our government owes them everything. And it should be a relentless effort to try to get them better care and better service.

And I believe this president is going to put his best people on it. And I think they'll be all over it. And I think the only advice you can give them is make sure you are putting as much onto that problem as you can. Whatever you think it needs, you want to do two or three times as much as people think it needs.

BOB SCHIEFFER: What do you say to people like Massachusetts Senator Elizabeth Warren, who says that our whole system is rigged to help the big banks and the rich people, and that, in her view, is why the middle class is suffering?

TIMOTHY GEITHNER: Well, I think this country has a lot of challenges still. We're in a much better position than they were before this crisis, certainly in the early stage of the crisis. But we have a lot of challenges as a country. We have tremendously high numbers of people living in poverty. We've had a long period where the median income has not grown, big rise in inequality. And, to an extent, this should not be acceptable Americans. How well you do in life today, how good your education is, how good your health care is, depends too much on the color of your skin and how rich your parent is. And that's something that should worry all Americans.

Now, those are things government can do things about. We need to find a way as a country to rediscover what has been the great strength of this political system, which is the ability to find pragmatic consensus, room for compromise, on things that can make people's lives better. I think we'll rediscover that capacity. But we've seem to have lost it for the moment.

BOB SCHIEFFER: Two questions in closing. What did you learn in this job? And how would you rate the state of the U.S. economy right now?

TIMOTHY GEITHNER: Well, I think the economy is really getting better, healing a lot of the scars left over from the crisis. It was a devastating crisis, worst since the Great Depression. And it left a lot of damage. And it's going to take some time to heal. But we're a significantly stronger country today. And I think Americans are just beginning to feel a little bit more confident in the future.

And I think that (UNINTEL) in confidence you see is justified. Because we have a lot of strengths. If you look at energy or manufacturing or technology today, this is an enormously productive, enormously innovative economy. And over time, that should result in broad-based gains and income growth. So, I think there's room for optimism.

BOB SCHIEFFER: And what did you learn?

TIMOTHY GEITHNER: Well, I learned a lot of things. There have been a lot of things. I think the most important thing in public service, the most important thing in government, is to have people who just bring one focus to their job, which is what is the right thing, the best thing to do to help improve the basic process for this country and this economy, to try to put politics aside, not to worry too much or not listen too much to the din of this place?

This is a pretty tough place to make decisions. And you're going to get better decisions in life if you have people willing to look through the short-term political costs and look through the din of the noise of politics, and just try to focus on what's (UNINTEL). And that's definitely what we try to do.

BOB SCHIEFFER: Did you feel like you--

TIMOTHY GEITHNER: I did. I felt I was able to do that. And I felt like I had a president who was enormously supportive of exactly that basic (INAUDIBLE).

BOB SCHIEFFER: Secretary, thank you so much.

TIMOTHY GEITHNER: Thank you, Bob.

BOB SCHIEFFER: Good luck with the book. And we'll be right back with our panel. Stay with us.

[COMMERCIAL BREAK]

BOB SCHIEFFER: And we're back with our panel. And it's a very good one today. Jackie Calmes, national correspondent for the New York Times; Gerry Seib of the Washington Wall Street Journal and he's the bureau chief there; plus Katrina vanden Huevel of The Nation; and our own John Dickerson. I want to keep the focus here at the beginning of this on this V.A. story.

KATRINA VANDEN HUEVEL: It's an outrage. Those who are involved in these longer wait times must be held accountable, prosecuted to the full extent of the law. But I think we need to step back. Bob, Congress has cut funding, has slashed funding, for veterans' benefits over these last years.

If anyone should be offering their resignation, maybe the Congress should. General Shinseki, by the way, who was relieved of his duty as Army Chief of Staff by President Bush because he told the truth about how many troops would be needed in Iraq, has tried to institute reform. Shorter waiting periods, bringing on more vets from Vietnam, fewer homeless vets. I think we need to look hard at the funding issue. And finally, I would add I think we need to look hard at those who have taken our brave men and women into unjustified wars with bad protective vehicles, bad armor.

And those people have not been held accountable for the economics of our country, for the military readiness, nor for the veterans' health. And I think that needs to be brought into this scandal. Because that, in many ways, is the broad scandal.

BOB SCHIEFFER: Would somebody tell me why we haven't heard from the president?

JOHN DICKERSON: One of the reasons, they say, is not to undermine General Shinseki. But I think an interesting parallel here, in terms of the administration responses, we've just been given a textbook example of how the administration respond when there is a political policy and emergency. And that is the failure of healthcare.gov. We've seen how they can rush to solve something. So, how does this compare to that? In that case, President Obama was out there immediately, speaking a lot. He wasn't worried about undermining Kathleen Sebelius.

So, in this case, Secretary Geithner talked about doing two and three times what's necessary. Is that what's being done here? They have expertise in how to put out big fires. This is both a new one and, as you said, Secretary Gates in his book, he talks about trying to just get a pamphlet put together so that veterans can find out what the actual services are. And he said that was impossible to do.

BOB SCHIEFFER: Well, the thing that kind of bothers me, I think yes, we need to have investigations. We need to find out who's at fault and all this, that, and the other. But what I would like to know, in the meantime and the between time, are they doing something to correct this problem? Are they moving more doctors in? Are they doing things right now to help the people that are on these waiting lists. Because waiting six months for an investigation of whose fault this was--

GERALD SEIB: Well, that's probably what the president ought to be addressing, not whose fault it is, but what are we doing now. And he can uniquely address that. And my guess is he probably will. Because there's a lot of pressure to do it. I think that this is one of those classic Washington problems where the biggest issue politically isn't the crime, but the cover-up.

The fact is the V.A. is in the most trouble not because there were waiting lists, but because there is a perception now that there were doctored lists put together to hide the fact that there were waiting lists. That's really what's got the administration in trouble.

JACKIE CALMES: We have to remember that complaints about the V.A. and service at the V.A. is a longstanding one that crosses all administration. But there's an irony here in that this administration has tried particularly hard to work for veterans. It's not just the president, but Joe Biden and both of their wives have made it a priority to address veterans' complaints.

They have taken office at a time when not only they inherited huge backlogs at the V.A. in claims and care, and even as they're trying to get those down, and there has been progress, they're coming up because of these claims for PTSD and they liberalized some of the ability to claim if you are suffering from PTSD and Agent Orange and these related ailments. And, so, that has increased the traffic.

KATRINA VANDEN HUEVEL: I'm glad, Jackie, that you brought that up. Because I do think the V.A. has been the most effective, efficient health care system in this country over these last decades. And it was nickel and dimed under the Bush administration. They felt they needed to spend more on defense than on veterans' benefits.

If you're going to send brave men and women into war, you have to take care of them, and the multiple deployments. So, I think the president faces the important task of speaking to what is going to happen now, just showing what has been improved. The question is, what do you do with Congress? The Republican Congress has slashed benefits. Do you bring in someone like a Colin Powell? I personally think Shinseki should be left there to fight. But the president has said he may say goodbye. But if Colin Powell speaks more effectively and will have more (UNINTEL) and clout with this Republican Congress.

BOB SCHIEFFER: Well, I don't know what they need to do. But all I know is they need to do something. And what you say, I take your point. But that was then and this is now. This is a problem that no matter how it got to be where it is, has to be fixed.

And old Bob Gates, say what you want to about him. When you had a similar thing like this that came up in Walter Reed Hospital, he went out there and fired a bunch of people. And they got it straightened out. It's not perfect, but it's a whole lot better than it was.

KATRINA VANDEN HUEVEL: But firing Shinseki? I mean, the crisis of veterans' care has been with us for many years. And I think history is important to bring to bear in this and find a way to reform, but understanding that we have nickel and dimed the V.A. in these last years.

BOB SCHIEFFER: All right. Let's talk a little bit about politicians. (UNINTEL) you just saw Mayor Bloomberg talking about Hillary Clinton. At that same conference where Chris Christie was, Bill Clinton was there. And they asked him about Karl Rove's remark. Here's what he said.

BILL CLINTON (RECORDING): First, they said she faked her confession. And now, they say she's auditioning for a part on The Walking Dead. And there's nothing to it. I was sort of dumbfounded. They went to all this trouble to say that she had staged what was a terrible confession that required six months of very serious work to get over. It's something she never low balled with the American people, never tried to pretend didn't happen.

BOB SCHIEFFER: The news there, really, which kind of got overlooked, is she said it took six months to overcome this (UNINTEL). Up until this point, we were talking about took a month or so to recover.

JOHN DICKERSON: That was not the official story. And it's still hard now to get a story following up on that. And that's what's interesting about this response and what seems to be different from what we've heard from the Clinton camp before here, is they responded in a way that suggested there was a future political narrative that they needed to manage.

They needed to say that this was in the context of all these crazy attacks on Hillary Clinton. And Bill Clinton also said something. He said, "Well, they'll get better at it." In other words, they'll have a chance to get better at it because she's going to keep being in the public light, presumably in a political context. But then, when you tried to follow up on the six months question, they shut it down just like we were already in the campaign and they weren't going to tell you any more than the specific message they wanted to tell you.

GERALD SEIB: My sense is that Karl Rove did him a favor by doing it. They're going to have to address the health issue in the long run. Obviously, everybody knows that. But he managed to do it in such a way that Democrats were angry, Republicans were criticizing him, and Mayor Bloomberg, an independent, said it was outrageous. So, if you're going to have to raise the issue, you probably ought to have done it in a more artful way than this.

JACKIE CALMES: And I was there with you, Bob. And I thought in the president's words, in President Clinton's words, you sort of felt like even though he was making light of this, and he was prepared for those questions. It seemed like you could hear in that his advice to his own wife, like, "Don't let this get to you. We know this is going to come. It's going to even get worse. But the answer is to show humor."

KATRINA VANDEN HUEVEL: We've seen the Karl Rove pretty despicable, flimsy playbook before. This is not shocking. He sort of operates on the Mark Twain theory that lie is halfway around the world before truth gets its boots on. I think Gerald is right, that it probably helps Hillary Clinton and her not-yet-announced campaign. But I think John Dickerson wrote something a few days ago. We've never seen a political party nominee uncontested in over 100 years, uncontested.

(OVERTALK)

KATRINA VANDEN HUEVEL: And I think that plays a role. Karl Rove and others are in panic. But it also hurts her, in a way. If you don't have others running, not only does this country get deprived of fresh ideas and new approaches, but she's going to become the target of all of the Republicans (INAUDIBLE).

BOB SCHIEFFER: I'm glad you brought that up. Because I was saying the other day, I assume that she's going to run. And assumption is every report's worst enemy. And I know that.

(OVERTALK)

BOB SCHIEFFER: I assume she's going to run. But if she doesn't run, who will the Democratic nominee be? Who's going to run?

KATRINA VANDEN HUEVEL: Let me just say, as a nation, we have a theory where we are determined. Because we don't believe presidential campaigns se be spectator sports. Citizens should define the character and content of the elections, to identify others who might run, whether it's Governor O'Malley, Governor Jerry Brown, Senator Warren, Senator Bernie Sanders.

And I think there's a value in that. Because we saw this with the Obama-Clinton race. A candidate is better served if he or she is tested in a primary. That's not to say we're anti-Hillary. But we want to have a debate in this country, not a coronation.

JACKIE CALMES: We've all, at this table, been through this before in late 2006, when she was being described as the certain candidate.

GERALD SEIB: The inevitable candidate.

JACKIE CALMES: The inevitable nominee. And we saw how that worked out. And today, Dan Balz in the Washington Post has a column based on an interview with Senator Bernie Sanders that Katrina mentioned. And he's saying that he's thinking of running, not that he thinks he would win, but because he doesn't think, and I jotted it down, that Hillary Clinton would confront Wall Street and the quote, unquote, "billionaire class." And, so, he wants that point of view to be reflected. He didn't mention, the column didn't mention Elizabeth Warren much.

BOB SCHIEFFER: I think she would run if Hillary--

(OVERTALK)

BOB SCHIEFFER: Talk a little bit about Chris Christie. Do you think he was hurt by Bridgegate?

GERALD SEIB: Oh, absolutely. There's no doubt about it. The question was whether it was a fatal wound or not. I doubt that it was. Because two years is an eternity in American politics. But what I felt was really interesting having him talk about Jeb Bush is that those two guys are the establishment lane in the 2016 sweepstakes right now.

Those are the two guys that people who raise money in the party, people who are in positions of power in the party, and people in the business community, which is an important constituency, those are the two guys they all like. And the question of how they bump up against each other is really a fascinating one.

BOB SCHIEFFER: I think the real key to the Republican race is whether or not Jeb Bush

(INAUDIBLE).

GERALD SEIB: Absolutely.

BOB SCHIEFFER: I think that's the first question to be answered.

JACKIE CALMES: Well, and you ask about Bridgegate and Chris Christie. I think at least a big a problem as the fact, what you were asking about, question after question, since you were at a fiscal summit, is his state's credit rating has been downgraded now six times. And he talked about one year and why, and blamed it on state economists. But it's been three years running. And, so, he's going to run on that.

KATRINA VANDEN HUEVEL: He wants to be the comeback kid. But he's a diminished man and he's not a stand-up guy when it comes to (INAUDIBLE).

BOB SCHIEFFER: We'll see. All right. (UNINTEL) out (INAUDIBLE) Face the Nation flashback. Thanks, everyone.

(OFF-MIC CONVERSATION)

BOB SCHIEFFER: Well, that's all the time we have for today. We hope you'll tune in tonight to the CBS Evening News and tomorrow, the CBS This Morning. Thank you for (INAUDIBLE).

[COMMERCIAL BREAK]

BOB SCHIEFFER: 60 years ago yesterday -- on May 17, 1954 -- the Supreme Court's landmark decision in Brown v. Board of Education effectively outlawed segregation in America's schools. One week later, Edward R. Murrow invited CBS viewers into a small North Carolina town to see the town's reaction on the ruling... and that is today's Face the Nation flashback.

EDWARD MURROW:See it now devotes its entire half hour to an effort to reflect the opinions and attitudes of certain persons who live in Gastonia, North Carolina...

BOB SCHIEFFER VOICEOVER: CBS talked to just about everyone in town. The crew made stops at two local high schools, one black, one white.

WHITE TEACHER IN CLASSROOM: What do you think about this decision? Jane?

WHITE STUDENT 1: Well, our parents are more against non-segregation than we are. But young people are actually the ones who have to live with them.

WHITE STUDENT 3: I think in time our colored citizens and white citizens can work out this problem and i think it will strengthen America in the end.

WHITE STUDENT 5: I think it would cause for a split in both races if they mixed and mingled, because some of them couldn't come up to meet our standards.

BOB SCHIEFFER VOICOVER: Down the street, a black school teacher asked the same question of his students.

STUDENT 1: I think that we, as negros, can get a broader education and can advance farther than we have in the past.

STUDENT 3: For myself, i would not like to attend a school with white children. Because of the fact that we aren't welcome. And i think that the consequence will be a mixture of negros and whites. But the consequence will also be an embarrassing situation for the negro.

BOB SCHIEFFER VOICEOVER: And at a PTA meeting, a teacher reminded us of one real challenge of desegregation.

TEACHER AT PTA MEETING: ... I wouldn't mind teaching both colored and white children. Because I don't think there is really any problem. I think where the real problem will be will be in the home. Where you learn your prejudice is at home, and you've got to educate these parents.

BOB SCHIEFFER: Sixty years later, that probably still holds..we'll be right back.

[COMMERCIAL BREAK]

BOB SCHIEFFER: That's all the time we have today, be sure to tune in to CBS This Morning tomorrow. Thanks for watching Face the Nation.

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