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The McLaughlin Group Host: John McLaughlin Panel: Pat Buchanan, MSNBC; Eleanor Clift, Newsweek; James Pethokoukis, American Enterprise Institute; Mort Zuckerman, U.S. News & World Report Taped: Friday, January 6, 2012 Broadcast: Weekend of January 7-8, 2012

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JOHN MCLAUGHLIN: Issue One: Squeaker Man.

FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (R): (From videotape.) My goodness, what a squeaker. But it sure is nice to have a win, I'll tell you.

This is a campaign night where America wins. We're going to change the White House and get America back on track.

MR. MCLAUGHLIN: Mitt Romney won the Iowa caucus on Tuesday. Former Pennsylvania Senator Rick Santorum came in second. It was a photo finish. Romney beat Santorum by eight votes, or one one- hundredth of 1 percent of votes cast. But a win is a win. Santorum thanked the caucus goers and saluted them right after the votes were counted Tuesday night.

FORMER SENATOR RICK SANTORUM (R-PA): (From videotape.) Game on. (Cheers, applause.) You, you, by standing up and not compromising, by standing up and being bold and leading, leading with that burden and responsibility you have to be first, you have taken the first step of taking back this country. (Cheers, applause.)

MR. MCLAUGHLIN: Question: What makes Iowa a surprising win for Romney? Pat Buchanan.

PAT BUCHANAN: Well, John, originally Romney appeared to write it off because he was fearful of the social conservatives who had killed him back in 2008 and given the victory to the fellow from Arkansas. And I think what happened here was Romney decided to go back in, and he did well and he won Iowa. And if you win the first two states, John, there's been no candidate who's won both Iowa and New Hampshire who has gone on to lose the nomination.

Secondly, his challenger is Rick Santorum, who ran a great campaign in Iowa and who came up to tie him. But Santorum does not appear to be a candidate right now who can go the distance. And besides, Romney's got a victory because his opposition is still divided four or five ways.

MR. MCLAUGHLIN: Is Buchanan missing the main point, that the reason why it's a big surprise is Romney didn't spend very much time there?

ELEANOR CLIFT: He didn't --

MR. MCLAUGHLIN: He didn't go in early --

MS. CLIFT: He didn't spend much time --

MR. MCLAUGHLIN: -- and he didn't put that much money into it.

MS. CLIFT: Yeah, but he ran there four years ago. And as the Obama campaign pointed out, he emerged with six fewer votes than he did four years ago. So he maintained his base, if you will, in Iowa. And four years ago there were a number of so-called moderates in the race. Giuliani was in; McCain. And Huckabee, Mike Huckabee, won because he stood out as the social conservative with the common touch.

This time around, Romney was the only really so-called moderate in the field, and the rest of the vote is divided among the conservatives. And so all Romney has to worry about in New Hampshire -- he doesn't want Santorum to do too well, because that might pose a threat. And as long as Gingrich stays in and Perry stays in, they'll divide the vote, and the 25 percent man can emerge with a plurality win. MR. MCLAUGHLIN: OK, with the New Hampshire primary looming this coming Tuesday, a Rick Santorum bio refresher for you.

Fifty-three years of age; wife, Karen; seven children -- four sons, three daughters. Youngest daughter Bella has Edwards Syndrome, a deadly genetic illness. Another son, Gabriel, was born prematurely and died two hours after birth.

Roman Catholic. Income: Over $1.3 million over a 20-month period ending August 2011. Penn State University, B.A. and law school J.D.; University of Pittsburgh, MBA. U.S. House of Representatives, four years, two terms, `90 to `94. U.S. Senate, 12 years, two successive terms, 1994 to 2006. Fox News Channel contributor, four years, 2007 to March 2011.

Question: Santorum is Roman Catholic. Given that two thirds of Iowa voters are Christian, why didn't Santorum easily defeat Romney? I ask you, James.

JAMES PETHOKOUKIS: Well, he wasn't the only Christian in the race. First of all, a lot of those people are evangelical. He's Roman Catholic. And you had Rick Perry, who made a point, who kind of transformed himself into being the Texas job creator into being more of a social conservative. Michele Bachmann went for the social conservative vote. Even Newt Gingrich talked about his conversion to Catholicism. So that sort of Christian conservative vote was really split among all the candidates.

MR. MCLAUGHLIN: Let's do a little bit more on Santorum before I go to you. Here's Santorum on the issues.

Climate change. Quote: "A beautifully concocted scheme, just an excuse for more government control of your life," unquote.

Gay marriage; wants a constitutional amendment banning same-sex marriage, saying, quote, "It destroys the basic unit of our society because it condones behavior that's antithetical to strong, healthy families," unquote.

Stem-cell research; opposes such research, thus breaking with then-President G.W. Bush.

Partial-birth abortion; led the charge in Congress against partial-birth abortion.

Question: Will Santorum win New Hampshire? Mort.

MORT ZUCKERMAN: I don't believe he'll win New Hampshire. I don't think he'll come close in New Hampshire. I think it's going to be a huge win for Romney.

But I want to go back to Iowa, because the big part of what happened in Iowa was that Gingrich was doing extremely well in Iowa. He was attacked by the super PAC of Romney and he was destroyed by the negative ads that came out of that. And his vote, in a sense, went partly to Mitt Romney and partly to Santorum, which is why I think Santorum did as well as he did.

I don't think he's got the staying power or the carrying power to do well either in New Hampshire or indeed even in South Carolina.

MS. CLIFT: Right.

MR. BUCHANAN: Yeah, John, Santorum, his problem is he came into New Hampshire at about 4 or 5 percent and Romney's at 45. He has an enormous way to go. I don't think he's going to make it. And quite frankly, the conservatives are really divided, not only in New Hampshire. You've got Ron Paul in there as well. But they are in South Carolina, John, where that comes next. Romney right now has got a two-to-one lead in South Carolina --

MR. ZUCKERMAN: In South Carolina.

MR. BUCHANAN: -- because the conservatives are all divided down there as well. If they don't get behind a single conservative candidate, and very, very soon, this thing is over.

MS. CLIFT: Right. And Santorum may have already blown it in New Hampshire, because he was speaking to a student audience and he got into an argument about gay marriage. Gay marriage is legal in New Hampshire. It is also popular in New Hampshire. And it wasn't forced on them by some elites. The people there live free or die. So New Hampshire is not Santorum's kind of state.

But there is a lot --

MR. PETHOKOUKIS: He doesn't have to win New Hampshire.

MS. CLIFT: There are some --

MR. PETHOKOUKIS: He doesn't have to win New -- I mean --

MS. CLIFT: No --

MR. PETHOKOUKIS: -- Romney just needs to perform beneath expectations, which is possible Jon Huntsman could peel off some of the independents. Santorum does better than expected. There's not a lot of enthusiasm among conservatives for Romney. Then they go into South Carolina and they see what happens.

MS. CLIFT: So you're just going to say New Hampshire doesn't matter. MR. PETHOKOUKIS: Listen --

MS. CLIFT: (Laughs.)

MR. PETHOKOUKIS: -- if he performs -- yeah, it does matter. It matters a lot, because if Romney performs below expectations, then that gives maybe Rick Santorum a chance in South Carolina.

MS. CLIFT: The establishment Republican Party is alive and well, because they're probably going to stomp out Santorum, as well as the others. And Mitt Romney is going to run as the inevitable mainstream candidate against a fractured field --

MR. BUCHANAN: John, they've got to --

MS. CLIFT: -- of extremists.

MR. BUCHANAN: They've got to get down to one candidate. Perry's going to be back in South Carolina. Newt's going to be there. Ron Paul will get 15 percent.

MR. MCLAUGHLIN: Perry --

MR. BUCHANAN: You've got Romney --

MR. PETHOKOUKIS: That's never going to happen, because Ron Paul will never drop out. So Ron Paul, though, is going to be in there.

MR. BUCHANAN: He's going to stay in there.

MR. PETHOKOUKIS: And then there'll be another conservative. So it's always going to at least be two on one.

MR. BUCHANAN: You're going to have Newt in there and Perry in there draining off votes that potentially could go to Santorum, who is -- I mean, quite frankly, Santorum's not a natural fit.

MR. ZUCKERMAN: The Republicans -- whatever their convictions are, the Republicans who believe in the electability of their candidate --

MR. BUCHANAN: Sure.

MR. ZUCKERMAN: -- predominantly support Romney, and for good reason.

MR. MCLAUGHLIN: Why --

MR. ZUCKERMAN: Because he's the most electable of any of the Republican candidates.

MR. BUCHANAN: Right. MR. MCLAUGHLIN: Let me squeeze this in. Why didn't Perry do better when he spent $5.5 million on negative ads for Romney?

MR. PETHOKOUKIS: He didn't look like he was up to the job.

MR. ZUCKERMAN: "Oops." "Oops" is my answer.

MR. BUCHANAN: Right.

MR. ZUCKERMAN: "Oops."

MR. MCLAUGHLIN: Yeah, but Perry is an administrator --

MS. CLIFT: He didn't perform.

MR. MCLAUGHLIN: -- and brought back to office in Texas.

MR. ZUCKERMAN: I don't disagree with that.

MR. MCLAUGHLIN: He's the only governor -- he's the only one who has this kind of administrative experience.

MR. ZUCKERMAN: He also is -- of all the governors I've met, he has the best understanding of small business and how it works in the economy. That's not the issue. The issue is, how can he perform on the national stage? He was clearly unprepared and inadequate for the national stage.

MR. BUCHANAN: John, he was leading --

MR. MCLAUGHLIN: Couldn't that be corrected?

MR. ZUCKERMAN: Over time --

MR. MCLAUGHLIN: Isn't that forgivable?

MR. ZUCKERMAN: -- but he doesn't have that time. He didn't have that time. And he lost his credibility.

MR. MCLAUGHLIN: He couldn't remember the name of the Environmental Protection Agency.

MR. ZUCKERMAN: It was more than that.

MR. MCLAUGHLIN: How big is that?

MR. ZUCKERMAN: Even before that, he wasn't able to carry the debate.

MS. CLIFT: He's --

MR. MCLAUGHLIN: Do you think he can recover? MR. BUCHANAN: No.

MS. CLIFT: He's a man of --

MR. ZUCKERMAN: I don't.

I think he's a very talented --

MR. MCLAUGHLIN: Do you think he could recover in North Carolina -- South Carolina?

MR. ZUCKERMAN: No, I don't --

MR. BUCHANAN: No.

MR. ZUCKERMAN: -- he'll get more than 15 percent, if that.

MS. CLIFT: He's a man of prefabricated sound bites. And if you go beyond that, he can't handle himself well on the national stage.

MR. MCLAUGHLIN: Maybe he should have --

MS. CLIFT: And it's noticeable.

MR. MCLAUGHLIN: OK, primaries ahead. January: New Hampshire, South Carolina, Florida. February: Nevada, Maine, Colorado, Minnesota, Arizona, Michigan.

Which one of these January primaries is the most likely to deliver some kind of an upset?

MR. PETHOKOUKIS: I think South Carolina is actually the one, because right now Romney seems to be leading, which would be a tremendous upset, because that's a state he's supposed to lose. That's a state the conservative is supposed to win.

MS. CLIFT: Well, Florida -- Florida will also be significant. And that's on, I believe, January 31st. And they moved up earlier in the calendar. And the Republicans, for the first time in these early primaries, have proportional delegates, so that whoever runs and wins and gets a percentage gets some delegates. But --

MR. PETHOKOUKIS: It's designed to be a long primary process.

MS. CLIFT: To stretch it out somewhat.

MR. MCLAUGHLIN: Could Santorum pull it off in South Carolina? MR. BUCHANAN: Here's the thing. He's got to win South Carolina, I think, or somebody's got to beat Romney there, because if Romney wins South Carolina, he's won the first three and he's ahead in Florida. What exactly stops him, John? I think Romney could win Florida even if he lost South Carolina right now.

MR. MCLAUGHLIN: Who's his biggest threat in South Carolina?

MR. BUCHANAN: I think it's probably, at this point, Santorum, who's surging, because Newt is falling. I think Ron Paul will get his usual 15 to 20 percent.

MR. MCLAUGHLIN: What about Perry?

MR. BUCHANAN: Perry will be back in, but I don't think he's going to get more than 12, 15 percent.

MR. MCLAUGHLIN: Do you know what the population is made up of in South Carolina? Do you know the --

MR. BUCHANAN: Yeah, I've run down there, John. It's made up heavily of evangelical Christians.

MR. MCLAUGHLIN: That's right.

MR. BUCHANAN: But there's a very powerful establishment Republican Party down there that's been built up over the years, and I think that party is going to move behind Mitt Romney. The governor is behind Mitt Romney.

MR. MCLAUGHLIN: Is Perry's fire wall South Carolina? Is that why he stayed in the race?

MR. PETHOKOUKIS: Fire wall?

MS. CLIFT: Perry has a fire wall? (Laughs.)

MR. BUCHANAN: That may be the fire, John.

MR. MCLAUGHLIN: You don't know that.

MR. BUCHANAN: He's going to burn to death in that fire. (Laughs.)

MR. ZUCKERMAN: Look, you know, I think --

MR. MCLAUGHLIN: Would you give Perry more credit, please?

MR. ZUCKERMAN: Yeah. I think he didn't want to leave the way he would have had to have left, and I think he's -- look, he's a man of real political achievement and accomplishment.

MR. BUCHANAN: Right. MR. ZUCKERMAN: And I think he just didn't want to leave under those circumstances.

MR. BUCHANAN: He didn't want to go out that way.

MR. ZUCKERMAN: He didn't want to go out that way.

MR. MCLAUGHLIN: Well, what a kiss off that is, Mort.

MR. ZUCKERMAN: Well, it is a kiss off. But it's all right. He deserves it. You know, he's been --

MS. CLIFT: He also --

MR. ZUCKERMAN: -- a very effective governor of Texas.

MS. CLIFT: He also may be --

MR. PETHOKOUKIS: He didn't want -- (inaudible) -- go out like that.

MR. ZUCKERMAN: Yeah.

MS. CLIFT: It also may be a recognition that Mitt Romney is still the most likely nominee. And if he stays in the race, he helps Romney and assures his future.

MR. BUCHANAN: It looks good --

MR. MCLAUGHLIN: Exit question.

MR. BUCHANAN: It looks good for the Cabinet, John.

MS. CLIFT: That's right.

MR. MCLAUGHLIN: Santorum's surge in Iowa --

MS. CLIFT: Commerce.

MR. MCLAUGHLIN: Will that surge, plus his strong polling in South Carolina, mean that he will win in South Carolina? Pat Buchanan.

MR. BUCHANAN: I think, as of now, Romney is going to win New Hampshire. I think he's going to win South Carolina. I think he's going to win Florida. And I think this is just about over.

MR. MCLAUGHLIN: You do?

MR. BUCHANAN: Yeah.

MR. MCLAUGHLIN: As clean as that. Eleanor?

MS. CLIFT: Yes. Santorum isn't as pure as he presents himself. He's about to get a barrage of negative advertising. He's the poster boy for dealing with special interests and K Street.

So --

MR. MCLAUGHLIN: Quickly.

MS. CLIFT: -- I think he's peaked.

MR. MCLAUGHLIN: I've got about five seconds for you, young man.

MR. PETHOKOUKIS: I think Romney's going to continue to roll.

MR. ZUCKERMAN: Yes, I agree. I think Romney is going to continue to roll. And I agree with what Pat said. By the time we get through Florida, this nomination race is going to be over.

MR. MCLAUGHLIN: Romney's on a roll.

Issue Two: Obama Report Card.

PRESIDENT BARACK OBAMA: (From videotape.) I promise to do everything I can, every day, every minute, every second, to make sure this is a country where hard work and responsibility mean something and everybody can get ahead, not just those at the very top, not just those who know how to work the system.

MR. MCLAUGHLIN: Trust me with the economy. That was the message President Obama brought to Ohio this week. But what do the experts have to say about that? Thirty-six selected economists from the nation's esteemed banks, financial firms, independent consultancies and academic institutions have rated the president's performance on the economy.

Here's the breakout. One, half of the group rated him fair, 18 out of 36. Two, a third of the group rated him poor, 13 of 36. Three, 15 percent of the group rated him good, five out of 36. Four, not a single one of the 36 economists gave Mr. Obama a rating of excellent.

Which Republican candidate would do the best job on the economy? Twenty-four of the 36 economists, a two-thirds consensus, said the best candidate to handle the economy is Mitt Romney. Mr. Romney certainly knows how to save. Here he is, saving words. FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY (R): (From videotape.) When he was on the "Today" show shortly after being inaugurated, he said if I can't get this economy to turn around in three years, I'll be looking at a one-term proposition. Well, we're here to collect, let me tell you. (Applause.)

MR. MCLAUGHLIN: Was that a fair rap on the part of Romney against Obama?

MR. ZUCKERMAN: Yes, it is. I think the president has made two huge mistakes at the very beginning of his presidency. One is the stimulus program was not only inadequate, but half of it went to the states and municipalities, which is called the public service unions, and did not do what it had to do, which is become a multiplier in the terms of economic dynamism.

Secondly, he then devoted months and months and months to the health care program, which, amongst other things, created a tremendous amount of what they call regulatory insecurity. And Stanford and the University of California at Berkeley did a survey of this and they found that as much as 2 million jobs were not created because of regulatory insecurity. And that's a serious study. And that's exactly what so many people in the business community have come to the conclusion about Obama's presidency. And that's one of my big problems with --

MR. PETHOKOUKIS: And it's --

MR. MCLAUGHLIN: Would this be any different under Romney as president of the United States?

MR. ZUCKERMAN: Absolutely. Look, Romney is an extraordinarily talented businessman. He understands the economy. He understands how it works, which is one of the great problems of this administration. They may have theories. They don't understand how it works.

MR. MCLAUGHLIN: Is Romney also --

MR. ZUCKERMAN: And I was a supporter of Obama.

MR. MCLAUGHLIN: Is Romney a deal maker?

MR. ZUCKERMAN: Yes, he certainly is a deal maker.

MR. MCLAUGHLIN: He's an accomplished deal maker.

MR. ZUCKERMAN: Very accomplished deal maker.

MR. MCLAUGHLIN: Is that what the American people really want?

MR. ZUCKERMAN: That's a part of it. They know that he -- look, he had to make compromises, for example, with the Democratic legislature in Massachusetts -- MR. MCLAUGHLIN: Yeah.

MR. ZUCKERMAN: -- to get things through. They know he can work with an opposition.

MR. MCLAUGHLIN: Eleanor, how do you like this Romney commercial that's going on here?

MS. CLIFT: Right. To my left?

MR. MCLAUGHLIN: Are you going to sit there --

MS. CLIFT: I'm amazed that you'd let --

MR. ZUCKERMAN: I am to your left. I am to your left.

MS. CLIFT: I'm amazed that you've let him go on as long as you did, John, because I know --

MR. MCLAUGHLIN: Oh, I want to hear what Mort has to say. Mort ought to know what he's talking about.

MS. CLIFT: -- you're fair-minded.

MR. ZUCKERMAN: Yes.

MS. CLIFT: I read --

MR. MCLAUGHLIN: Do you think people value --

MS. CLIFT: Excuse me. Hey! (Laughter.) I read the survey that you just referred to, the AP survey, and the economists that responded said they were not familiar with Romney's plans for the economy. They were basing it on the fact that he was with Bain Capital and he's in the world that they know.

Frankly, the ability to shut down a lot of business and have a success here or there that made him a millionaire or billionaire is not necessarily going to vault him to the presidency.

(Cross talk.)

MS. CLIFT: And I also -- I want to say something --

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: I want to say something, what this president did this week, and that is to do two recess appointments. He challenged the Congress and he appointed Richard Cordray to the consumer protection bureau. And this is a welcome action --

MR. PETHOKOUKIS: At least he created a job for somebody -- Richard Cordray. MR. ZUCKERMAN: Yes.

MS. CLIFT: This is a welcome action, because what's been going on here is basically the Washington equivalent of jury nullification.

You have a Congress that won't pass anything, even when they support it; no jobs programs. They won't confirm anybody the president sends up. And they're trying to repeal two major --

MR. BUCHANAN: Hey, John --

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: -- pieces of legislation --

MR. BUCHANAN: Come on, now.

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: -- that were duly passed and signed into law by this president.

MR. PETHOKOUKIS: This is the worst --

MS. CLIFT: So this is --

MR. PETHOKOUKIS: -- economic recovery --

MS. CLIFT: This is a blood feud.

MR. PETHOKOUKIS: -- in modern U.S. history.

MS. CLIFT: There were over --

MR. MCLAUGHLIN: All right, Eleanor --

MS. CLIFT: -- 200,000 jobs --

MR. MCLAUGHLIN: Let him in.

MS. CLIFT: -- created in the last month. And it looks --

MR. PETHOKOUKIS: A quarter of which were delivery boys.

MS. CLIFT: It's too premature to say all is well, but it looks like we're on the right track. MR. PETHOKOUKIS: Listen, this is the worst recovery in modern American history. And what the president chose to do --

MS. CLIFT: It's the worst recession.

MR. PETHOKOUKIS: -- rather than move to the center, he's doubled down on the exact same policies. And you may be impressed by the fact the unemployment rate is down to eight and a half percent. That's only because the workforce has collapsed. If it was the same level it was when Obama took office, the unemployment rate would be 11 percent, which is worse -- which is easily the worst numbers since the Great Depression.

MR. BUCHANAN: All right, John, the difference between Romney and Obama is very simple. Obama and Pelosi and Reid bet the entire farm, basically, or most of it, on the public sector hauling us out of the recession. Romney and the Republican Party will do as Reagan did, bet on the private sector almost 100 percent. That is the fundamental difference between the two parties.

MS. CLIFT: The private sector got us into the mess. Remember that? Have we all forgotten that?

MR. BUCHANAN: But they're going to --

MS. CLIFT: There have to be restraints on that behavior. And this president has put those --

MR. BUCHANAN: Eleanor, your guys hasn't produced in three years.

MR. ZUCKERMAN: Three years.

MS. CLIFT: He has saved us from what was near-disaster.

MR. PETHOKOUKIS: You know, they're not even calling them jobs anymore.

MS. CLIFT: And the trend is going the right way.

MR. PETHOKOUKIS: This summer he's going to (train ?) work opportunities, not even jobs.

MS. CLIFT: And I don't see --

MR. PETHOKOUKIS: These are work opportunities that were created.

MS. CLIFT: Excuse me. Romney's 59-point plan is basically just going back to the same policies that were in place when President Bush was in office.

MR. BUCHANAN: But we tried Obama --

MS. CLIFT: There's nothing bold about it. MR. BUCHANAN: Look at the economists. He failed.

MR. ZUCKERMAN: Obama's policies have failed. He's failed. The policies have failed.

MS. CLIFT: He hasn't failed. This is a stubborn --

MR. ZUCKERMAN: He had three years --

(Cross talk.)

MR. MCLAUGHLIN: All right, let me get to the --

MR. PETHOKOUKIS: It was 6 percent, on its way to 5. It's nowhere close to that.

MS. CLIFT: This is a stubborn near-depression that we're digging out of.

MR. PETHOKOUKIS: It is when you have the wrong policies.

MS. CLIFT: And if this president is to be faulted --

MR. MCLAUGHLIN: Look, the --

MS. CLIFT: -- it is not making clear how tough --

MR. MCLAUGHLIN: Hold on.

MS. CLIFT: -- a situation we were in.

MR. MCLAUGHLIN: The one thing that Romney has called for is calling for China to get rid of their currency manipulation and unfair trade practices that are blocking America's recovery. Isn't that a piece of singular insight? And who else is talking about China in that regard?

MR. BUCHANAN: Santorum.

MR. ZUCKERMAN: A lot of people are talking about that, because China, they believe, has manipulated their currency --

MR. MCLAUGHLIN: Right.

MR. ZUCKERMAN: -- to make their exports greater and our --

MR. MCLAUGHLIN: How do you fight the volume of that impact?

MR. ZUCKERMAN: Well, we are. There are a lot of things that we can do, in fact, and we are going to be doing them.

MR. BUCHANAN: They did that in 1994, John. They devalued their currency -- MR. MCLAUGHLIN: Right.

MR. BUCHANAN: -- took it down by 50 percent.

MR. MCLAUGHLIN: Yes.

MR. BUCHANAN: And then they flooded us. The damage has been done to America.

MR. MCLAUGHLIN: Well, what about Romney's first point of correction of the situation is to call on China --

MR. BUCHANAN: Huntsman went over there.

MR. PETHOKOUKIS: They're not going to do that. They're not going to do that.

MR. BUCHANAN: We've been doing that for five years, and they've been bringing it down at 5 percent a year.

MR. MCLAUGHLIN: So they should bring it back down faster. But Romney --

MR. BUCHANAN: They won't do it. What is the stick?

MR. PETHOKOUKIS: Pat's right. They're not going to do it.

MR. BUCHANAN: What is the stick?

MR. MCLAUGHLIN: Issue Three: Dear Mr. President.

Florida Republican freshman Senator Marco Rubio on Friday morning sent a scathing letter to President Barack Obama at the White House. Senator Rubio blasted the president for supporting an increase of the national debt ceiling. That's the amount of money the federal government is legally allowed to borrow.

Here are some elements from the letter. "Dear Mr. President, news reports suggest you will ask Congress to approve yet another increase in the debt ceiling. The request is another $1.2 trillion, adding to a three-year debt binge that has totaled $4.5 trillion on your watch and that has enabled our overall debt to surpass $15 trillion. Your latest request will push the federal debt limit well above $16 trillion. "This pending request will be the sixth time during your presidency that Congress is being asked to keep allowing government and spending to grow at rates that are unsustainable. Instead of making debt ceiling increases a routine Washington exercise, we need to make it routine to actually spend no more than we take in.

"I will oppose a debt ceiling increase unless such an authorization is accompanied by a real plan to tackle our debt, both pro-growth elements and spending restraints, including fundamental tax, regulatory reform, and reforms to save Social Security and Medicare.

"If we had done this in mid-2011, when we last debated the debt ceiling, we could have set America on a path to economic growth and prosperity. Instead, you failed to lead," you "punted the tough decisions and, in doing so, our credit rating was downgraded for the first time in our history.

"It is a tragic reality but, on your watch, more and more people have come to believe that America is becoming a deadbeat nation, inevitably heading toward a European-style debt crisis."

What do you think of those comments, James Pethokoukis?

MR. PETHOKOUKIS: I think they're entirely on target. One year ago, the president got the report from his own deficit commission, the Bowles-Simpson commission, which laid out a long-term plan to deal with the debt. He stiff-armed them, threw them under the bus. He still has not released any long-term plan to deal with our debt. I think Rubio's completely right.

MS. CLIFT: It was a politically charged letter designed to get Rubio out front in the -- to borrow --

MR. PETHOKOUKIS: But economically accurate.

MS. CLIFT: Excuse me. To borrow a phrase from Rick Santorum, it's game on. It's political. And he may want to --

MR. MCLAUGHLIN: Do you think --

MS. CLIFT: -- vote against the debt increase, but I don't believe the Republican Congress is going to walk into that fight again with this president, not after the cost they paid about the payroll tax.

MR. MCLAUGHLIN: You know that Buchanan thinks that the running mate of --

MR. BUCHANAN: Governor Romney?

MR. MCLAUGHLIN: -- Mr. Romney will be the governor of New Jersey. What's his name? MR. ZUCKERMAN: Christie.

MR. BUCHANAN: Chris Christie. But, no, I'm not sure, John.

MR. MCLAUGHLIN: Now, wait a minute. Are you -- is that your expectation or your wish?

MR. BUCHANAN: No, I would think Christie is in the running. I think Marco Rubio has put in his application with this statement, which led Drudge, calling it a deadbeat nation, going after the president, because Rubio has sort of been pulling himself back; lack of interest.

MR. MCLAUGHLIN: Yeah.

MR. BUCHANAN: I think this is --

MR. MCLAUGHLIN: Yeah. Who's the better candidate for the job of vice president to go up against Joe Biden?

MR. BUCHANAN: I think either one of those individuals would be very --

MR. MCLAUGHLIN: You mean Christie --

MR. BUCHANAN: -- dramatic choices; Rubio and Christie.

MR. MCLAUGHLIN: -- or Rubio.

MR. BUCHANAN: I don't know. I mean, Christie would be terrific in terms of blue-collar America, whereas Rubio would give you Florida automatically, charismatic and excite the conservatives.

MR. MCLAUGHLIN: Florida is essential to the win over Barack Obama.

MR. BUCHANAN: If you lose Florida, you lose.

MS. CLIFT: And the --

MR. MCLAUGHLIN: Do you hear that?

MR. ZUCKERMAN: Yes. I think --

MR. MCLAUGHLIN: So Rubio is going to be his man.

MR. ZUCKERMAN: Well, he may be. I don't know if he carries Florida and I don't know if Christie carries New Jersey. I think they both would carry their respective states. But Christie is an extraordinarily talented, talented politician; would be a great addition. MR. MCLAUGHLIN: Do you think Rubio was holding up his hand, saying, hey, don't forget me?

MR. ZUCKERMAN: I don't think --

MR. MCLAUGHLIN: I could be your vice president.

MR. ZUCKERMAN: I think -- I don't think this letter is casual. It's not just, hey, by the way, I think I'm going to sit down and write a letter to the president.

MR. BUCHANAN: He'll be on --

MR. ZUCKERMAN: As Pat says, it's an application to be considered.

MR. MCLAUGHLIN: Well, you can see the whole letter on the computer, and it's well worth reading.

MR. ZUCKERMAN: Right. It is.

MR. MCLAUGHLIN: The point's made where he wants the reform to exist.

MR. ZUCKERMAN: Yes.

MS. CLIFT: And the language that he uses --

MR. ZUCKERMAN: And he's absolutely right about the issue of the --

MS. CLIFT: The language that he uses --

MR. ZUCKERMAN: -- Bowles-Simpson commission.

MR. MCLAUGHLIN: Who's the stronger candidate if Florida is essential?

MR. ZUCKERMAN: Well, I actually believe that Christie is the stronger candidate.

MS. CLIFT: The language --

MR. MCLAUGHLIN: You do?

MS. CLIFT: The language that he uses --

MR. ZUCKERMAN: He's an unbelievably talented politician. He knows how to handle every difficult question in the most elegant style, without antagonizing -- MR. MCLAUGHLIN: Hey, don't forget, we have a long --

MR. PETHOKOUKIS: Florida -- (inaudible).

MR. MCLAUGHLIN: -- a long campaign coming ahead. As a matter of fact, it's unbelievably long. It was started too early.

MS. CLIFT: Enough with the advertisements. The language that he uses -- deadbeat -- not since Ronald Reagan ran around talking about welfare queens do we hear that. Gingrich uses the phrase "dog whistle."

MR. MCLAUGHLIN: You mean it's very impolite, Eleanor. It's impolite language.

MS. CLIFT: It's disgusting. (Laughter.)

MR. BUCHANAN: Eleanor, how did Reagan do? How did Reagan do with the welfare queen --

MS. CLIFT: He was a better president after that language.

MR. BUCHANAN: That made him president, didn't it?

MS. CLIFT: And I hope not. (Laughs.)

MR. MCLAUGHLIN: Pethokoukis, get in here, will you?

MR. PETHOKOUKIS: Let me give you another. Maybe he should pick Rand Paul. You know, get all the Paul people for him; pick the son who has presidential ambitions.

MR. MCLAUGHLIN: Are you joking?

MS. CLIFT: I'd be for that. That would be a joke.

MR. MCLAUGHLIN: Forced prediction, yes or no: The unemployment rate will be under 8 percent by the end of the year. Pat.

MR. BUCHANAN: Right at 8 percent.

MS. CLIFT: Under 8.5.

MR. PETHOKOUKIS: Closer to 9.

MR. MCLAUGHLIN: Really?

MR. ZUCKERMAN: Yes, above 9.

MR. MCLAUGHLIN: Above 9?

MR. ZUCKERMAN: Yes. MR. MCLAUGHLIN: 8.4.

Bye-bye.

END.