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The McLaughlin Group Host: John McLaughlin Panel: Patrick Buchanan, MSNBC; Eleanor Clift, Newsweek; Tim Carney, Washington Examiner; Mortimer Zuckerman, U.S. News & World Report Taped: Friday, September 23, 2011 Broadcast Date: Weekend of September 24-25, 2011

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JOHN MCLAUGHLIN: Issue One: Read My Lips -- New Taxes.

PRESIDENT BARACK OBAMA: (From videotape.) I reject the idea that asking a hedge-fund manager to pay the same tax rate as a plumber or teacher is class warfare. I think it's just the right thing to do.

MR. MCLAUGHLIN: President Obama this week unveiled his formula for reducing the nation's debt. The heart of the plan is the, quote- unquote, "Buffett rules," so-called by the president, referring to Warren Buffett, the third-richest man in the world, with his $50 billion.

OK, Buffett's rule, according to Obama: Wealthy Americans earning a pretax income of $1 million a year or more should not pay a lower tax rate than that levied on middle-class income earners. So tax the wealthy, says the president. The Obama tax plan also eliminates the Bush tax cuts for individuals making over $200,000 a year and families making $250,000 a year.

House Republican Speaker John Boehner blasted the president and his plan, accusing the president of class warfare by demagoguing the wealthy to gain the support of the middle class. Boehner says the president is acting more like campaigner in chief than commander in chief.

HOUSE SPEAKER JOHN BOEHNER (R-OH): (From videotape.) It's been disappointing, because it's pretty clear that the president's decided to forget his role as president and leader of our nation at a time of economic uncertainty and to begin the campaign for his re-election some 14 months away.

MR. MCLAUGHLIN: Question: Is the Buffett rule good policy or is it class warfare? Pat.

PATRICK BUCHANAN: The Buffett rule is rooted in the philosophy of envy and the gospel of greed. Mr. Buffett is unhappy because he doesn't pay as high a tax rate as he says his secretary does.

John, here is the reasoning here. On real income, regular income, it's 35 percent. On capital gains, it's only 15 percent. The reason is it is that capital gains is the return on investment. If you want more investment in the economy, why in heaven's name would you raise taxes on it?

What Obama is doing is taking his old proposals, repackaging them, basically, and pushing them back out on the table. And he's going to get nothing out of it.

MR. MCLAUGHLIN: Buffett pays himself a salary, $100,000 a year.

MR. BUCHANAN: Well, he'll pay 35 percent on that if it gets up to a certain level. But what he gets --

MR. MCLAUGHLIN: Well, that is peanuts.

MR. BUCHANAN: That is peanuts.

MR. MCLAUGHLIN: That means he moves all of his other money into his investments. You understand that.

MR. BUCHANAN: Well, he gets capital gains and carried interest, and that's only taxed at 15 percent --

MR. MCLAUGHLIN: Right.

MR. BUCHANAN: -- as it should be, because that is investment, which is what we need. MR. MCLAUGHLIN: So you think it's highly motivated that he does it that way, and he's not saving himself a real bundle.

MR. BUCHANAN: I think he's a plutocrat who's playing to the crowd.

MR. MCLAUGHLIN: Eleanor.

ELEANOR CLIFT: I think Warren Buffett is exactly right. And I think if his proposals were brought to a vote in this country, the people would support it. The top 20 percent in the country, I think, controls 80 percent of the wealth. You can do some adjustments there. And the sweet deal for the coupon clippers and the investors should not trump what working people do to earn a living. And they're paying at a much higher tax rate. And our middle class is getting squeezed.

In one of the rallies the president had, somebody had a sign that said, "They only call it class war when we fight back." And the president also said it's not class war; it's math. You've got to adjust the revenue here somewhere. And the Buffett rule is just a small element of the president's attempt to recalculate where we are.

MR. BUCHANAN: (Inaudible.) (Laughs.)

MS. CLIFT: Well, and the Bush tax cuts -- it's existing law that they're supposed to expire. They were unaffordable when they were first passed, and they're certainly unaffordable now.

TIM CARNEY: It's not good policy. It's not even a policy yet. There isn't a proposal from the president yet of what form this Buffett rule is going to take. In other words, is it going to be another alternative minimum tax? Is it going to be just taxing lots of capital gains as income?

He's not putting it out there to get some legislative accomplishment in order to change the law. He's putting it out there in order to demagogue against Republicans, who will oppose any tax hike, and say, look, the Republicans are fighting against a tax hike for the rich that even Buffett wants. It's not serious. It's just simple class warfare.

MR. MCLAUGHLIN: Why has Buffett come forward this way?

MR. CARNEY: Buffett's been doing this for years. Every time he does it, somehow it's like, oh, my gosh, Warren Buffett is supporting a tax hike. He does it all the time. He wants an estate tax in there. He wants higher tax rates. He's a liberal. I mean, I could go on about how he might benefit from some of this, but --

MR. MCLAUGHLIN: What's his net worth?

MR. CARNEY: It's -- MR. BUCHANAN: Forty-two billion, I think.

MR. MCLAUGHLIN: No, no -- more than that.

MR. CARNEY: He's in the top 10. He used to be number two as far -- right behind Bill Gates. I don't know if he fell.

MR. MCLAUGHLIN: What is his net worth? Do you know, Mort?

MORTIMER ZUCKERMAN: I don't follow it, actually, and he doesn't consult me on it.

MR. MCLAUGHLIN: What's your net worth?

MR. ZUCKERMAN: I don't follow that either, and I don't consult with him on that. (Laughter.)

MR. MCLAUGHLIN: Are you a billionaire?

MR. ZUCKERMAN: Yes.

MR. MCLAUGHLIN: Do you do what Buffett does, declare yourself a salary? And if so, what is it?

MR. ZUCKERMAN: Well, I'm -- (laughs) -- I'm perfectly happy to talk about Warren Buffett's salary if you would like.

MR. MCLAUGHLIN: OK.

MR. ZUCKERMAN: But let me just say that --

MR. MCLAUGHLIN: But what do you think -- how do you think the way he's managing it, $100,000 a year, and the rest of it he puts in investment and he pays the tax on that?

MR. ZUCKERMAN: He pays a 15 --

MR. MCLAUGHLIN: Fifteen percent.

MR. ZUCKERMAN: He pays a 15 percent rate on the rest of it.

MR. MCLAUGHLIN: Is that OK? That's OK -- MR. ZUCKERMAN: It's what the law permits, so --

MR. MCLAUGHLIN: It's legal.

MR. ZUCKERMAN: Yes, it's totally legal.

MR. MCLAUGHLIN: Is he then entitled to be some kind of a hierophant on the matter of taxes?

MR. ZUCKERMAN: I do think he is somebody who is really concerned with the welfare of the country. I mean, he's led, amongst other things, a lot of people to contribute to charitable causes, particularly in their wills, to devote at least 50 percent of their estate to charitable causes. And he's been a real pathfinder in this regard.

But I want to get to the issue, really. The issue is very serious. I happen to believe that the wealthy people in this country should pay additional taxes, if only for political reasons, because otherwise you're going to have a great deal of difficulty getting through what we have to go through, which is a lot of pain for a lot of people, in terms of cutting back various entitlement programs.

So I've supported higher taxes on the wealthy for years. I was opposed to Bush's tax cuts. I was opposed to reinstating the tax cuts. I don't believe that that is anything that stimulates the economy. I do believe very strongly that we have to get our fiscal house in order or else we're going to be in real trouble.

MR. MCLAUGHLIN: Did you hear what Carney said earlier, that we haven't gotten a clear statement from Obama about what his tax policy is?

MR. ZUCKERMAN: Well, I mean, this is a -- I mean, the problem is -- the point here, whatever he says about --

MR. CARNEY: It's a general principle.

MR. ZUCKERMAN: His approach now is purely political. That's all he's doing. If he wanted to get something done, what he would have done --

MR. BUCHANAN: Get a --

MR. MCLAUGHLIN: OK --

MR. ZUCKERMAN: -- was he wouldn't have given a speech before both houses of Congress on television.

MR. MCLAUGHLIN: Let's tie this up, Eleanor. I want to tie it up in this way. Fourteen months from now, we're having an election. It's a midterm election. It's quite clear that President Obama, at this point in his career, does want to run and he does want to win. Is this calculated, the terms of what he's putting forward, calculating with that in mind more than anything else?

MS. CLIFT: This president has reached out a hand to Congress innumerable times and gotten it slapped. I think it's pretty clear that the Republicans are not going to pass anything. They may be shamed into extending the payroll tax cut, but that's about it. So he has no choice but to go to the country --

MR. BUCHANAN: Right.

MS. CLIFT: Excuse me, Pat. I see you wishing to dive in.

MR. BUCHANAN: No, no. I'm waiting for you to get done. (Laughs.)

MS. CLIFT: He has no choice -- he has no choice but to go to the country and say, this is my vision. This is what the Republicans want to do.

MR. MCLAUGHLIN: Yeah.

MS. CLIFT: And if it's going to take 14 months -- I think that's criminal to make the country wait 14 months for any policy action --

MR. BUCHANAN: Let me tell you, John -- OK.

MS. CLIFT: -- but that's his choice. And if you call that campaigning --

MR. BUCHANAN: That's what he did.

MS. CLIFT: -- that's what he should be doing.

MR. BUCHANAN: John, here's what's happened is Obama -- Eleanor is right. Obama has given up on the Republicans. I thought he was serious when he came out with the jobs bill. I thought there were some good ideas in there. I thought he'd urge Republicans to go halfway.

So he comes out and it's a Pearl Harbor attack on the Republicans. It's class warfare; no chance now for any real compromise. For 14 months, as the country is going through hell, he's going to be out there campaigning when he's the president of the United States.

MS. CLIFT: Excuse me.

MR. BUCHANAN: He could be --

(Cross talk.) MS. CLIFT: Excuse me.

MR. ZUCKERMAN: Excuse me. Let somebody else get in. That is not the case.

MR. MCLAUGHLIN: Wait a minute. Wait a minute.

(Cross talk.)

MR. MCLAUGHLIN: I'm getting a lot of mail about cross talk here, and I'm not doing my duty. Now it's your turn.

MR. ZUCKERMAN: OK. I do think that it is, as far as I'm concerned, inescapable to conclude that he is out there campaigning. If he wanted to get anything done, he would have met with the Republicans and the Democratic leaders privately, worked out whatever they can. Both parties would get the credit and the blame.

MR. MCLAUGHLIN: Just answer that one point so I can get him in here.

MS. CLIFT: All those tender little egos, they can't take the president standing up and setting out his policies.

MR. CARNEY: He could have had compromise if he wanted --

MS. CLIFT: The reaction -- excuse me.

MR. CARNEY: -- to talk about spending.

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: Excuse me.

MR. CARNEY: I try to let her finish.

MS. CLIFT: The reaction --

MR. CARNEY: She doesn't.

MS. CLIFT: The reaction from Capitol Hill was, oh, yeah, they were very nice for a few days. It was clear they weren't going to do anything. They were simply slow-walking it.

MR. MCLAUGHLIN: Carney, finish up.

MR. CARNEY: He could have gotten compromise if he'd looked for compromise on spending cuts. There's lots of spending the Republicans wouldn't want to give up. Democrats say compromise. They cut a lot of spending. He just wants to demagogue.

MS. CLIFT: Compromise only on Republican terms is what you're saying. That's not a compromise.

MR. BUCHANAN: He was pushed by his base into political warfare.

MR. MCLAUGHLIN: Issue Two: The RINO in the Room.

TEXAS GOVERNOR AND 2012 REPUBLICAN PRESIDENTIAL CANDIDATE RICK PERRY: (From videotape.) We need to nominate someone who will have a stark, clear difference between the Republican nominee and President Obama. We don't need to nominate Obama lite.

MR. MCLAUGHLIN: Republican in name only -- R-I-N-O -- RINO. Is that what Mitt Romney is, a RINO? Texas Governor Rick Perry thinks so. The rap is that Mitt Romney is a Republican in name only, not conservative enough, certainly, to be the Republican standard bearer.

Tea party officials say a lot of their voters won't turn out if Romney is the Republican nominee. Rick Perry is number one in the polling of registered Republicans and Republican-leaning independents also -- Perry, 31 percent; Romney, 24 percent; Ron Paul, 13 percent.

The rest of the GOP candidates for the Republican nomination are below 10 percent. From highest to lowest: Michele Bachmann, Newt Gingrich, Herman Cain, Rick Santorum, Jon Huntsman.

So Rick Perry today is the most likely GOP nominee to challenge Barack Obama for the U.S. presidency in 13 short months. But Romney does better than Perry against Obama in general-election polling of registered voters. Romney versus Obama, Romney wins, 49 percent to Obama's 47 percent.

OK, now Perry. Perry versus Obama, Obama wins with 50 percent; Perry, 45 percent.

Question: Does it strike you as cheeky for Governor Perry, who late in life converted from Democratic Party to the Republican Party, to question Romney's political convictions? I ask you, Tim.

MR. CARNEY: I think that "Romneycare" is a huge difficulty for Mitt Romney, because the main thing that the Republicans can use against Obama is "Obamacare." So on that very relevant issue --

MR. MCLAUGHLIN: What's "Romneycare"?

MR. CARNEY; "Romneycare" was -- in Massachusetts, they passed a law that included an individual mandate as well as subsidies for people to get insurance and other provisions.

MR. MCLAUGHLIN: What's the problem, the individual mandate mandating it? MR. CARNEY: The individual mandate. And today it's the fact that that was literally a prototype for Obama's national bill. And so --

MR. MCLAUGHLIN: Hasn't Romney said it's state by state, and this happened to be customized for Massachusetts?

MR. CARNEY: It's way too cute. But the problem is this, that you had -- four years ago, John McCain was in the same position that Romney was, where he had all these things on immigration, on taxes, on campaign finance reform. No Republican could nominate him because he was too much of a RINO. And he went ahead and got it. I don't think this kills Romney, though.

MR. MCLAUGHLIN: Republican in name only. Eleanor?

MS. CLIFT: Well, if you're talking about way too cute, you've got Governor Perry supporting, I think, a very progressive and a very correct position on immigration, where he pays -- allows the children of illegals to pay in-state tuition. So he's got some liabilities in the Republican primaries as well.

But Romney is actually electable. If he can get the nomination, he could win. And at some point, Republican primary voters may begin to compare Perry and Romney in terms of electability, and I think Romney comes out ahead. I don't think Perry did well in the debate. He looks uncomfortable on the stage.

MR. BUCHANAN: Right.

MS. CLIFT: He has rehearsed lines that he can't even really get out. And he's got some positions that are just too extreme.

MR. BUCHANAN: I think Eleanor's right on that. I don't think Perry --

MR. MCLAUGHLIN: On what, the debate?

MR. BUCHANAN: Perry did not have a good debate. Secondly, Eleanor's point about immigration and illegal aliens getting in-state tuition is a blazing issue with conservatives. Romney has hammered Perry on it. It is far more damaging, turning out to be, than the individual mandate. Romney seems to be handling the individual mandate very well. And, given the polls, it doesn't seem to bother him that much.

I think -- and we were talking earlier -- it may now be an even race between Perry and Romney, because I think Perry's starting to slip a little bit after those two debates.

MR. MCLAUGHLIN: Do you believe it's an even race, or do you think Perry's ahead?

MR. ZUCKERMAN: No, I -- Perry may be ahead just slightly, but I do think it is an even race, because I think you're going into --

MR. MCLAUGHLIN: Is time on the side of Perry or is time on the side of --

MR. ZUCKERMAN: Romney.

MR. MCLAUGHLIN: -- Romney?

MR. ZUCKERMAN: I think it's more on the side of Romney. I'm surprised, frankly, that it is, because I'm surprised -- you know, Perry's got some real abilities and some real talents, and particularly he understands how small business works rather than just large business. He's a different kind of candidate in that sense, and it travels all the way through his experience.

But, you know, you're in the major leagues now. And at this point he has not handled himself in three debates. And I thought that was really -- I was surprised, because in small groups he handles himself very, very well.

MR. MCLAUGHLIN: Let's talk about his Mormonism. Is that a killer for him?

MS. CLIFT: For Romney.

MR. MCLAUGHLIN: For Romney.

MR. ZUCKERMAN: You know, I don't think so. I think the country is beyond that.

MR. MCLAUGHLIN: You do?

MR. ZUCKERMAN: Yeah, I really do.

MR. MCLAUGHLIN: Do the polls suggest that you are correct? MR. BUCHANAN: No.

MR. CARNEY: Where's the swing state where it matters?

MR. BUCHANAN: There's problems in South Carolina, John. Frankly, we're going to find out.

MR. ZUCKERMAN: Right.

MR. BUCHANAN: But in a number of these southern states, Romney is not that high up.

MR. MCLAUGHLIN: Exit question: Which candidate do the Republican graybeards prefer? Do they prefer Romney or do they prefer Perry? The graybeards.

MR. BUCHANAN: Well, the graybeards would prefer -- are probably frightened to death of Perry. They would prefer Romney. But, you know, Perry still has some real attractive features to him that the --

MR. MCLAUGHLIN: (Inaudible.)

MR. BUCHANAN: -- that the grassroots love.

MS. CLIFT: Perry has a big personality, and the tea party people really want to shake things up and they think he could be a transformative president, whereas Romney is a safe technocrat, which is why Romney could get swing voters and might actually win.

MR. MCLAUGHLIN: OK. Now, if you're a graybeard, do you want to keep the tea party quiet and in your corner?

MS. CLIFT: You want to keep their energy, but you don't want them to take over.

MR. MCLAUGHLIN: Wow. Where's the end of one and the beginning of another?

MS. CLIFT: That's right.

MR. CARNEY: Eleanor is exactly right in this case.

MS. CLIFT: (Laughs.)

MR. CARNEY: Yeah, the party --

MR. MCLAUGHLIN: Which one -- who do the graybeards want?

MR. CARNEY: The party elites want it to be Mitt Romney. They trust him. They think he's one of them, while Perry -- I've heard many of these people say, oh, he's a little too religious for me. MR. MCLAUGHLIN: What's the story?

MR. ZUCKERMAN: I would agree. I think the graybeards of the party, the establishment of the party, really would prefer Romney at this stage. They think he's a safer candidate. But more than that, at this stage of the game it's too early to tell, because we're going to see a number of primaries where this is all going to come out. It looks like Romney would be a stronger candidate against Obama. And the one thing that the party does want, they want to make sure that Obama loses.

MR. MCLAUGHLIN: Still a ballgame.

Issue Three: Naive, Arrogant, Misguided and Dangerous?

PALESTINIAN PRESIDENT MAHMOUD ABBAS (through interpreter): (From videotape.) We are going now to the United Nations to demand our legitimate right, which is to become a full member of the United Nations as the state of Palestine.

MR. MCLAUGHLIN: Palestinian President Mahmoud Abbas wants the world's newest nation to be Palestine. And he goes where? To the Israelis? No. To the U.N.? Yes, the United Nations.

President Abbas wants a resolution from the U.N. to have Palestine recognized as a fully fledged state. That state includes the West Bank and the Gaza Strip, the two parcels of land lost to Israel during the Six-Day War in 1967, 44 years ago.

But the U.N. stratagem is a nonstarter with Israeli Prime Minister Benjamin Netanyahu. Netanyahu says Israel cannot return to those borders because of, among other reasons, Israel's current demography. There are many Israelis who live on those lands, an estimated 650,000 resident Israelis. So the prime minister urges the Palestinians, as a first order of business, to negotiate with Israel on the contours of a future Palestinian state.

ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: (From videotape.) The Palestinians deserve a state, but it's a state that has to make that peace with Israel.

MR. MCLAUGHLIN: President Obama on Wednesday backed Prime Minister Netanyahu.

PRESIDENT OBAMA: (From videotape.) Peace is hard work. Peace will not come through statements and resolutions at the United Nations. If it were that easy, it would have been accomplished by now.

MR. MCLAUGHLIN: But Republican presidential candidate Rick Perry attributes the Palestinians' U.N. move to Mr. Obama. GOV. PERRY: (From videotape.) We would not be here today at this very precipice of such a dangerous move if the Obama policy in the Middle East wasn't naive and arrogant, misguided.

MR. MCLAUGHLIN: Let's get it straight now. The Palestinians are going to the U.N. They want the U.N. to declare it a state.

Does the United Nations have the legal authority to grant statehood to the Palestinians?

MR. BUCHANAN: That's --

MR. MCLAUGHLIN: I ask you, Mort.

MR. ZUCKERMAN: No, they don't. What they do, they can recognize it as a state for the purposes of the United Nations, which doesn't make them a state.

MR. MCLAUGHLIN: But that does not create the state.

MR. ZUCKERMAN: It does not create the state.

MR. MCLAUGHLIN: What -- who can create a state?

MR. ZUCKERMAN: Well, the state -- there are definitions of a state. They have to be in control of the area. They have to have a functioning government. They do not have that at this stage of the game, particularly with Hamas controlling one half of the Palestinian --

MR. MCLAUGHLIN: So only a state can declare another state to be a state.

MR. ZUCKERMAN: Yes. In that sense, yes. But the issue here is not who declares it. The United Nations would confer a certain amount of legitimacy to the Palestinians, as they would like it to be. And they feel that that's what they want to have, without doing the negotiations with the Israelis.

MR. MCLAUGHLIN: What's the bottom line of this move?

MR. ZUCKERMAN: The bottom line of this move -- in my judgment, it's going to go nowhere. It's going to make it much more difficult for a negotiated agreement to come out of it, because what they're -- they're not just asking for a state. They're asking, in that resolution, to have several of the key issues about the state resolved in that thing, like the borders of the state.

MR. MCLAUGHLIN: One more question. What's Obama's position? MR. ZUCKERMAN: Well, I'm not quite sure what Obama's position is, because I think his position has evolved, shall we say.

MR. MCLAUGHLIN: Well, the position is that he approves of what the Palestinians are doing. Correct?

MS. CLIFT: No.

MR. ZUCKERMAN: No.

MR. MCLAUGHLIN: Oh, he approves of the Israeli resistance to the Palestinians.

MR. BUCHANAN: He's going to veto it.

MR. ZUCKERMAN: Yes, he's opposed to -- he's opposed, and rightly, in my judgment. The United States -- and I've heard the secretary of state and the deputy secretary of state talk about it -- if they put in -- and this is what they're seeking -- into that resolution terms that really should be negotiated between the Israelis, it'll stop all negotiations. These things have got to be negotiated, A, out of the eye of the cameras and where they have a chance to -- (inaudible).

MR. BUCHANAN: John, Obama is going to veto statehood in the U.N. for Palestine, because if he didn't, he'd lose the election.

MR. MCLAUGHLIN: One quick question, and that is that Obama said the 1967 borders, retracting to there, with swaps.

MR. ZUCKERMAN: Swaps, yes.

MR. MCLAUGHLIN: Now, why is -- with swaps, why doesn't that cover Obama?

MR. ZUCKERMAN: Well, the question is, what the Israelis have to trade in any kind of negotiation are the borders issue. With the borders issue, you solve the whole issue of the settlements and you have whatever the outcome of configuration of the territory. If you then fix it without, for example, dealing with security, which is what has to be dealt with before the borders, you'll get nowhere in those negotiations.

MR. MCLAUGHLIN: Issue Four: Pakistan's Double Dealing?

ADMIRAL MIKE MULLEN (chairman, Joint Chiefs of Staff): (From videotape.) The support of terrorism is part of their national strategy.

MR. MCLAUGHLIN: On Thursday, the chairman of the Joint Chiefs of Staff, Mike Mullen, delivered a scathing allegation against our putative ally, Pakistan. Mullen testified that Pakistan was behind an attack on the U.S. embassy in Kabul, Afghanistan last week that killed two dozen people. Mullen accused the intelligence service of Pakistan, the ISI, of supporting the terrorist group that executed the attack, the Haqqani Network.

ADM. MULLEN: (From videotape.) With ISI support, Haqqani operatives planned and conducted that truck-bomb attack, as well as the assault on our embassy.

MR. MCLAUGHLIN: Over the last nine years, the U.S. has given Pakistan $20 billion in military development aid.

Question: What kind of an image is the United States projecting to the world when our supposed ally, Pakistan, stages an attack on the U.S. embassy in Afghanistan? Eleanor.

MS. CLIFT: Well, Pakistan has always played a double game with us, but this was a lot more blatant than it's been in the past. And this has implications for our presence in Afghanistan. And why are we staying there? We were staying there to help protect Pakistan because we were worried about those nuclear weapons and we don't want them to fall into the hands of terrorists.

So I think this really does present a dilemma for the U.S., because we're obviously not in control of our friends.

MR. MCLAUGHLIN: What about the day before Mullen's appearance in the Congress, the Senate appropriates $1 billion in aid for Pakistan?

MR. BUCHANAN: This is -- John, this is astonishing, quite frankly, that Mullen, the chairman of the joint chiefs, is right up there, a fighting ally in wartime, and accusing them of duplicity and being behind an attack on Americans.

I agree with Eleanor. This is enormously important, I think. And it raises real questions about how long we're staying there and what we are fighting for in Afghanistan and Pakistan as well.

MR. MCLAUGHLIN: That's a good point you make, but I have a larger question.

MR. BUCHANAN: Right.

MR. MCLAUGHLIN: What kind of an image are we projecting to the world at large when this kind of thing takes place?

MR. BUCHANAN: I'm astonished, quite frankly, that they went public with this --

MR. CARNEY: Yeah.

MR. BUCHANAN: -- at this point, because what it suggests is our patience is totally exhausted with these guys, and we're going right out public. MR. ZUCKERMAN: Bear in mind, the man who blew up his turban --

MR. BUCHANAN: Right.

MR. ZUCKERMAN: -- and killed the principal negotiator with the Taliban was also -- he suggested that was also done through the Haqqani Network. So this is really astonishing.

This is very important for us.

MR. BUCHANAN: This suggests there's going to be an explosion in relations.

MR. CARNEY: And what we're learning -- and it's an interesting contrast to the Republican debates, where things are cut and simple -- we have enemies, we have allies; there are good guys, there are bad guys -- that this doesn't happen, especially not in the Middle East.

We need Pakistan to do a couple of things. One of them is to help us quash al-Qaida, both in their tribal regions and in Afghanistan. And we also need them to not let their nuclear weapons get in the hands of people who want them.

MR. MCLAUGHLIN: No, I want the bigger world impression. Do we -- have we become the laughingstock of the world? Are we clearly a country in decline?

Now, here is a new book, Thomas L. Friedman, Michael Mandelbaum. I recommend it. I haven't read the whole thing, but what I've read seems to be right on the money. I will tell you what the book is about. First of all, Thomas L. Friedman is one of the most influential columnists, and Michael Mandelbaum, one of our leading foreign-policy thinkers. They analyze four challenges we face: Globalization, the revolution in information technology, the nation's chronic deficits, and our pattern of excessive energy consumption.

Their conclusion is we're failing to meet our future requests, our future demands.

MS. CLIFT: Well --

MR. MCLAUGHLIN: In other words, we're watching a nation in decline.

MS. CLIFT: Well --

MR. BUCHANAN: Well, isn't that news? (Laughs.)

MS. CLIFT: Yeah. MR. MCLAUGHLIN: Is there any doubt about that?

MS. CLIFT: Well, Europe is also in decline, and China, India and Brazil are on the rise. You know, we've got to get adjusted to that and we've got to be competitive in the new world order --

MR. MCLAUGHLIN: Let's pick up that point.

MS. CLIFT: -- which requires investing, not austerity.

MR. MCLAUGHLIN: But suppose the Eurozone fails. That's the zone of economic policy.

MR. BUCHANAN: John --

MR. MCLAUGHLIN: Suppose it fails.

MR. BUCHANAN: It's going to fail.

MR. MCLAUGHLIN: Is that going to affect us?

MR. BUCHANAN: Sure, it's going to affect us.

MR. CARNEY: Yes.

MR. BUCHANAN: John, the West --

MS. CLIFT: It's not going to fail.

MR. BUCHANAN: -- is in decline. Somebody 10 years ago wrote a book called "Death of the West."

MR. CARNEY: (Laughs.)

MR. BUCHANAN: You might be familiar with it. (Laughs.)

MS. CLIFT: And he's sitting right here.

MR. MCLAUGHLIN: Your lugubrious theme song.

MR. BUCHANAN: Yeah, it was a little bit ahead of those fellows, who were talking about what a wonderful world we've got.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: Obama won the Jewish vote by 57 points last time. He won't win it by 37.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: Romney will aggressively compete in Iowa in the hopes of taking out Perry. MR. MCLAUGHLIN: Tim.

MR. CARNEY: Mitt Romney will win the Republican nomination for president.

MR. MCLAUGHLIN: Mort.

MR. ZUCKERMAN: Obama won the Jewish vote by 78 percent.

MR. BUCHANAN: Fifty-seven.

MR. ZUCKERMAN: Seven-eight percent.

MR. BUCHANAN: Seventy-eight to 21.

MR. ZUCKERMAN: I hate to disagree with you.

MR. MCLAUGHLIN: Warren will be defeated in her bid against Brown as senator from Massachusetts.

Bye-bye.

END.