The McLaughlin Group

Host: John McLaughlin

Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek;
Tim Carney, Washington Examiner;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, February 15, 2013
Broadcast: Weekend of February 16-17, 2013

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JOHN MCLAUGHLIN: Issue One: Smarter, Not Bigger.

PRESIDENT BARACK OBAMA: (From videotape.) A growing economy that creates good middle-class jobs, that must be the north star that guides our efforts. It is our generation's task, then, to reignite the true engine of America's economic growth, a rising, thriving middle class.

MR. MCLAUGHLIN: President Barack Obama delivered his fourth State of the Union address on Tuesday. In attendance were Senate and House members, six of the nine justices of the Supreme Court, the Joint Chiefs of Staff, members of his Cabinet, and assorted dignitaries.
Over the course of one hour, the president unveiled proposals to boost the economy, help the middle class, invest in the nation's aging infrastructure, create more high-tech manufacturing -- a big emphasis -- expand preschool education, up high school standards, and make college more affordable.

PRESIDENT OBAMA: (From videotape.) Nothing I'm proposing tonight should increase our deficit by a single dime. It is not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.

MR. MCLAUGHLIN: The president also appealed to Congress to work together on climate change, immigration reform, and particularly on the thorny issue of automatic government budget cuts, known as sequestration.

Question: When former President Clinton took the helm during an economic downturn, he said he had a, quote, "laser-like focus on the economy." How would you describe the focus of President Obama's State of the Union? Pat Buchanan.

PAT BUCHANAN: He did pivot back toward the main issue, jobs and economy, John. But overall, this was a very liberal speech. It was something that we've all heard before. There was nothing new in it. And it's a dead-on-arrival speech, John. He's not going to get the minimum wage. He's not going to get the assault weapons ban. He's not going to get amnesty. He's not going to get an awful lot of the things he's got in there.

So I think what he's doing, he's appealing to his base and appealing to what he sees as the majority of the country, which probably does support most of what he said. It was a very political speech. But in terms of what's going to be accomplished, I don't think it's at all relevant.


ELEANOR CLIFT: It was a speech that's in tune with the country. He's going to get immigration reform and it'll be bipartisan. He's going to get something that he can call a victory on guns, probably universal background checks and probably legislation to curb gun trafficking.
The gun that killed the young girl in Chicago came from Mississippi. And there are these well-traveled gun-running routes. And that's going to be a focus of legislation as well. He's going to get enough. I'd even say he's going to get plenty. And what he doesn't get, he could go to the country with it -- the minimum wage.

MR. BUCHANAN: That's the idea.

MS. CLIFT: If the minimum wage had kept up with inflation since the `60s, it would be over $10. Asking for $9 is not exorbitant. He may not get it this Congress, but he'll get it in the future. Ted Kennedy chipped away for several Congresses before he got the last increase in the minimum wage, and President Bush signed it into law. And getting behind universal preschool, it's not all about Head Start. It's about -- it's a middle-class issue as well.

He's got issues he can go to the country with. He stakes out that terrain; make the Republicans defend it. This is the beginning of a two-year campaign to basically win back the House. So it's good politically. It's good substantively as well.

MR. MCLAUGHLIN: Is there anything you've forgotten? (Laughter.)

MS. CLIFT: I can keep going if you keep shuffling through your papers.


TIM CARNEY: Eleanor could keep going on more ways that President Obama has called for government to get bigger, more involved in the economy, and more involved in our lives. He can't say it's not about bigger government; it's smarter government. It's about increasing government's role in the economy.

And a lot of it is the same industrial policy, corporatist stuff, he's talked about before. We're going to help manufacturers. We're going to help anybody who's in green energy. We're going to help anybody who's in exports.

He is talking about more government. Just because it's coming from Barack Obama, we're supposed to assume it's smarter government as opposed to just bigger government? It's the same industrial policy he's been laying out for two, three years.

MR. MCLAUGHLIN: Does Obama still have the gift of gab?

MORT ZUCKERMAN: Yeah, I think he does have the gift of gab. But the problem is, the gab goes on for too long, and I think people stop listening at some point. That's the problem I had with this speech. There were so many different programs, you almost couldn't follow it at some point. I think he has to simplify his program.

There are some things which must be done in order to strengthen the economy, and that I fully agree to. It should have been done, you know, a couple of years ago, but better late than never. So we're going to see what happens. Infrastructure is one of them. Reform of the tax code is another. But he had so many different programs at such point.

The one thing that I think is really critical in this whole thing is the fact that there may be a common market between the United States and the European Common Market. That would be a huge -- there would be no taxes to do that. It would be a huge stimulus to our economy.

MR. MCLAUGHLIN: Shall I rain on Obama's parade?

MS. CLIFT: (Laughs.
) I think there's been enough rain.

MR. MCLAUGHLIN: How many people tuned in to watch Obama's State of the Union? Thirty-three-point-five million. This was the least- watched State of the Union address since 2000.

MR. BUCHANAN: It's repetitive and it is boring.

MS. CLIFT: No. It's because --

MR. BUCHANAN: And the spectacle has --

MS. CLIFT: It's because television --

MR. BUCHANAN: Hold it, Eleanor. The spectacle has lost a lot of the drama and dignity it used to have. He walks down that aisle and he gets slaps and high-fives. They should have had Beyonce --

MR. MCLAUGHLIN: Well, wait a minute.

MR. BUCHANAN: -- doing her number right midway through it.


MS. CLIFT: Every other president has walked down that aisle, and I don't recall you complaining about it.

MR. BUCHANAN: But it's lost its dignity.

MS. CLIFT: It has not lost its dignity.

MR. BUCHANAN: Ike and FDR --

MS. CLIFT: It's an American --

MR. BUCHANAN: -- didn't look like that. (Laughs.)

MS. CLIFT: It's an American tradition. And I -- the fact that the numbers were down is partly because --


MS. CLIFT: -- people don't watch television like they used to.

MR. MCLAUGHLIN: Eleanor, why don't you comment on this? How were Obama's Nielsen ratings? They were the second-lowest ratings for a State of the Union address since Nielsen began taking measurements in 1993. They were the lowest ratings of any State of the Union address since 2000, when Bill Clinton's last SOU drew an audience of 31.5 million.

MS. CLIFT: Well, I think Nielsen ought to start rating some of the social-media sites and look at the exchanges between people watching it. You know, the American people who watch that and who pick up portions of that hear a president who is addressing concerns in their lives. I agree, the big topics like the EU trade pact, that's very important, but I don't think people out in the country are listening for that. They're listening for all those little programs --


MS. CLIFT: -- that the rest of you ridicule --


MS. CLIFT: -- because they're the ones that make a difference in their everyday lives. And he's telegraphing that he gets what their problems are and he's on their side. That's very important politically.

MR. MCLAUGHLIN: I will help redeem the president, all right?

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: He's on the wake of, what, three weeks away from his earlier address at the inauguration, OK? People saw that. And I think they feel that he's going to be repeating that. And that's probably a big reason why they didn't tune in. Therefore, he gets a pass. What do you think?

MR. CARNEY: Well, also I think that's right. I think Eleanor's right that if you're watching it on -- my wife watched it on her iPad on That doesn't show up in the Nielsen ratings.

MR. MCLAUGHLIN: No, it doesn't.

MR. CARNEY: And a lot of people were watching it online or watching it the next day. It's just TV consumption is changing.

MS. CLIFT: The oratory about they deserve a vote and going through all those gun victims --

MR. CARNEY: Demagoguery.

MS. CLIFT: I don't call that demagoguery. Those are real people, and they were sitting there.

MR. MCLAUGHLIN: Was there too much in it? Was it everything but the kitchen sink?

MS. CLIFT: If you remained dry-eyed through that -- that was --

MR. BUCHANAN: All right, but it's all poll --

MS. CLIFT: That was an enormous emotional --

MR. BUCHANAN: Tim is right.

MS. CLIFT: -- event in this country.

MR. BUCHANAN: All right.


MS. CLIFT: And it's going to change the culture on guns.

MR. BUCHANAN: Tim is right, John. It was all poll-tested, every single one of those things. And many of them are very popular, and people say isn't that great. But it's not going anywhere.

MR. MCLAUGHLIN: OK. Republican Senator Marco Rubio --

MS. CLIFT: (Inaudible.)

MR. MCLAUGHLIN: -- responds to President Obama.

SENATOR MARCO RUBIO (R-FL): (From videotape.) The tax increases and the deficit spending you propose will hurt middle-class families. It will cost them their raises. It will cost them their benefits. It may even cost some of them their jobs. And it will hurt seniors, because it does nothing to save Medicare and Social Security.

So Mr. President, I don't oppose your plans because I want to protect the rich. I oppose your plans because I want to protect my neighbors, hard-working middle-class Americans who don't need us to come up with a plan to grow the government. They need a plan to grow the middle class.

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: Question: Was Rubio an effective national spokesman for the GOP? Tim.

MR. CARNEY: He moved in the right direction. I don't think it was a great response. He moved in the right direction, because you heard when he was criticizing government. He wasn't saying, oh, it's taking money from hard-working people and giving it to the undeserving. He was going ahead and saying government is keeping you down.
Government regulations are making it harder for someone to start a new business, whether that's you or the person who might hire you, and also government breeding dependency and keeping the regular person down. I thought that was a step in the right direction.

MS. CLIFT: That's rhetoric, and that's --

MR. MCLAUGHLIN: Why was he chosen? Why was he chosen? Hold on, Eleanor.

MR. CARNEY: Why? Because he might be the presidential nominee in fours years. He's young.


MR. CARNEY: He's got sort of a tea party pedigree in how he came into office.

MR. BUCHANAN: He's the hottest property out there right, now, John.

MR. CARNEY: And he's Hispanic.

MR. BUCHANAN: He's the hottest property out there.


MR. BUCHANAN: Well, because he's Cuban-American. He's charismatic. He's young. He's attractive. He was on Time Magazine --

MR. MCLAUGHLIN: Is he too young?

MR. BUCHANAN: -- the Republican savior. I'll tell you what. When he grabbed that glass of water, he didn't look --

MR. MCLAUGHLIN: OK, you've mentioned something interesting -- the Rubio lunge.

SEN. RUBIO: (From videotape.) In the short time that I've been here in Washington, nothing has frustrated me more than false choices like the one the president laid out tonight. (Senator Rubio leans down to pick up a water bottle.) The choice isn't just between big government or big business. What we need is an accountable, efficient and effective government.

MR. MCLAUGHLIN: Question: What's the lesson of --

MR. BUCHANAN: Not good advance work. (Laughs.)

MR. MCLAUGHLIN: -- the lunge? I ask you, Mort.

MR. ZUCKERMAN: The lesson of the lunge is don't lunge in the middle of a national speech, just to start with.

MR. MCLAUGHLIN: Well, who's at fault here?

MR. ZUCKERMAN: Well, that's --

MR. MCLAUGHLIN: Who's at fault here?

MR. ZUCKERMAN: I don't know who's at fault.

MR. MCLAUGHLIN: He has no advance team. The advance team is at fault. He should have had a podium.


MR. MCLAUGHLIN: You should have the glass of water on a shelf or underneath a podium.

MR. ZUCKERMAN: Yeah. He should have had something to drink before he started his speech.

MR. BUCHANAN: Exactly. (Laughs.)

MR. MCLAUGHLIN: Well, that too. Churchill --

MS. CLIFT: Or --

MR. MCLAUGHLIN: Churchill said when you're going to do it, you do it with great profundity.


MR. MCLAUGHLIN: You make it perfectly dignified.


MR. MCLAUGHLIN: You take the water. You put it back slowly. You put it back on the shelf and you resume speaking.

MR. ZUCKERMAN: He'll do it that way the next time.

MS. CLIFT: You just say excuse me and you reach for the water. But, you know, I don't think that hurts him. In fact, it humanizes him. And he handled it with great humor afterwards.

MR. MCLAUGHLIN: Do you think the press is overplaying it --


MR. MCLAUGHLIN: -- including us?



MR. BUCHANAN: Yes, they are.

MS. CLIFT: No. And it gives him --

MR. BUCHANAN: It's got --

MS. CLIFT: Excuse me. It gives him a great forum to show he has a sense of humor that, if he is the nominee in 2016, he won't be a robot like Mitt Romney. I don't think it hurts him at all. His speech, on the other hand, he said nothing of consequence. It was the same old, same old about big government and all that.


MR. MCLAUGHLIN: Did you take note of the fact that he gave the same speech in Spanish before he gave it in English?

MS. CLIFT: I took note of it because I think it's the end of the English-only movement in the Republican Party, which Pat was a great champion of. (Laughs.)

MR. MCLAUGHLIN: Well, you know what he's cultivating with that, of course -- the Hispanic vote.

MR. ZUCKERMAN: That's right.

MS. CLIFT: Well --

MR. BUCHANAN: Well, that's one of the attractions of the guy, John.

MR. ZUCKERMAN: That's right.

MS. CLIFT: He's also --

MR. MCLAUGHLIN: That's one of the attractions of the guy. Do you think that speaking in Spanish to the Spanish audience in the country, the Latino audience, was a plus for him and it's a plus for the party?

MR. BUCHANAN: I think it's a plus for -- it's a small plus for him and I think it's a small plus for the party. But I do think the idea we're becoming a bilingual, two languages in one nation, is a real long-term problem.

MR. MCLAUGHLIN: You know what country -- what language this country is going to be speaking 50 years from now.

MR. BUCHANAN: I know what the Southwest is going to be speaking. (Laughs.

MR. MCLAUGHLIN: You know what the Harvard professor predicted about five, six, seven, eight years ago, that we made much of?

MR. BUCHANAN: Huntington, and he was exactly right.

MR. MCLAUGHLIN: What did he say?

MR. BUCHANAN: Well, he said -- Huntington has the clash of civilizations, but he's also got the idea the great problem of America is immigration, mass immigration, because we're ceasing to be --

MR. MCLAUGHLIN: What did he predict about our national culture and language?

MR. BUCHANAN: We're basically going to lose the American solidarity.

MS. CLIFT: We're not losing --

MR. MCLAUGHLIN: It's going to be a Hispanic, a Latin-speaking nation?

MR. BUCHANAN: No. The American Southwest will be.

MS. CLIFT: We're not losing it. We're enriching our culture.

MR. MCLAUGHLIN: Issue Two: Nuclear North Korea.

A third nuclear test. That's what the Democratic People's Republic of North Korea, the DPRK, conducted on Tuesday in the country's mountainous northeast. The area is less than 100 miles from North Korea's China border and is the same site used for North Korea's previous two tests -- the first in 2006 and the second in 2009.

The U.S. Geological Survey detected a 4.9 magnitude seismic event in the area, more power than the 4.5 that registered in 2009 after North Korea's second test. Scientists in multiple countries detected the explosion. North Korea issued a confirmation, declaring the test was, quote, "carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously," unquote.

Pyongyang also declared the test was in response to the, quote, "reckless hostility of the United States," unquote.

In his State of the Union address on Tuesday, President Obama had this to say.

PRESIDENT OBAMA: (From videotape.) Provocations of the sort we saw last night will only further isolate them, as we stand by our allies, strengthen our own missile defense, and lead the world in taking firm action in response to these threats.

MR. MCLAUGHLIN: This is North Korea's first nuclear test under its new leader, Kim Jong Un, son of Kim Jong Il, who died in December of 2011. This past December the DPRK successfully launched a long- range rocket, raising fears North Korea now has the capability to hit the United States.

Question: What's the real story behind Kim Jong Un's nuclear test? Mort Zuckerman.

MR. ZUCKERMAN: Well, listen, he's making an extraordinary statement. When you think about a small country like that is able to develop this kind of weaponry and rocketry and make it all work, it just tells you something about where the world is going. But he is telling everybody, don't mess with us, OK? And now a lot of people do want to mess with them.

And when the president says we're going to stand by our allies, he'd better stand by our allies. A lot of the allies in that part of the world do not think the United States is standing behind them.

MR. BUCHANAN: But why should the United States, 60 years after the end of the Korean War, have 28,000 guys on the DMZ when South Korea has got an economy 40 size of the north and they've got twice the population? The point is, if the United States weren't on the DMZ, this guy wouldn't be building intercontinental missiles and nuclear warheads to attack us.

I'll tell you what the effect of this is going to be. Both Korea right now and Japan are probably looking very hard at their own nuclear deterrence, and they ought to.

MR. MCLAUGHLIN: What about China?

MR. BUCHANAN: Well, China is supposed to basically corral and rein in North Korea, and they're failing to do the job. That's why I think the idea of the Japanese, who are in a conflict with the Chinese over the Senkakus, and the Koreans, who've got this problem, are going to look themselves at nuclear weapons. And that's going to be China's problem.

MS. CLIFT: Well, North --

MR. MCLAUGHLIN: Does China see it as in their best interest to let North Korea do what it's doing?


MR. BUCHANAN: No, they don't. They would like to constrain them, and they failed to do so.

MR. MCLAUGHLIN: Don't you think that they know that the United States will turn to China, and China wants to be cultivated by the United States --

MR. BUCHANAN: But they're --

MR. MCLAUGHLIN: -- in order to stop -- (inaudible)?

MR. BUCHANAN: They're letting this --

MR. MCLAUGHLIN: Is that a little too arcane for you?

MR. BUCHANAN: No, no. They're letting this guy go too far. This is -- John, this could have been a uranium weapon or a plutonium weapon. If it's uranium, we've got a real problem.

MS. CLIFT: First of all, they've been in the nuclear club since early in this century, when George Bush was in the White House. And we've lived with it now for several years.

MR. MCLAUGHLIN: What's the point?

MS. CLIFT: Second -- well, we've lived with it. That's the point. Secondly --

MR. MCLAUGHLIN: Well, they've gone beyond what we lived with.

MS. CLIFT: Secondly, Japan has not made any movement towards going nuclear, so it has not set off a nuclear chain reaction in that part of the world. And thirdly, the USA Today headline this week, which really made me nervous, was "Not Even China Can Stop North Korea." And that's where we end up. It is -- if there's a truly rogue nation, it is North Carolina (sic). (Laughter.) I wish it -- well, North Carolina --

MR. BUCHANAN: They are too. (Laughs.)

MR. CARNEY: It shows how Saddam Hussein would still be in power today if he had gotten a nuclear weapon, right?

MR. ZUCKERMAN: Terry Sanford too would be in power in North Carolina.

MR. BUCHANAN: (Laughs.)

MR. CARNEY: The reason that we don't go and try to do a regime change in North Korea with this horrible dictator presumably is that they have a nuclear weapon, so that he's showing, the fact --

MR. BUCHANAN: It works.

MR. CARNEY: -- that we sort of backed down, that it works, that Hussein was right to pursue a nuclear weapon.

MS. CLIFT: We're living with it.

MR. MCLAUGHLIN: Here's a note I have. Kim Jong Un characterized the test as necessary to defend against American threats. In announcing the nuclear test, state-controlled television used background special-effect graphics that appeared to depict an American city destroyed by a nuclear strike. This went beyond the usual anti- U.S. bombast.

MR. BUCHANAN: That's why they've got -- why would they build an intercontinental ballistic missile that could go 6,000 miles when Seoul, South Korea is 25 miles from the border? This is aimed at us.

MR. MCLAUGHLIN: They also had another test about six weeks ago.

MR. BUCHANAN: Well, they tested -- that's when they tested the missile and they put --

MR. MCLAUGHLIN: That's correct.

MR. BUCHANAN: -- a satellite into orbit.

MR. MCLAUGHLIN: That's correct.

MR. BUCHANAN: Eleanor's right. They tested a little device in 2006 which fizzled.

MS. CLIFT: Right. And they don't need nuclear weapons to go after Seoul.

MR. MCLAUGHLIN: OK, nuclear arms reduction.

PRESIDENT OBAMA: (From videotape.) America will continue to lead the effort to prevent the spread of the world's most dangerous weapons. At the same time, we'll engage Russia to seek further reductions in our nuclear arsenals and continue leading the global effort to secure nuclear materials that could fall into the wrong hands.

MR. MCLAUGHLIN: So how many nuclear weapons does the president want to reduce? Of the 1,700 nuclear weapons the U.S. now possesses, the White House believes 1,000 to 1,100 warheads would provide an equal level of security.

Under what scenario is 1,000 warheads too low a threshold to maintain a capable nuclear deterrent?

MS. CLIFT: You know --


MR. CARNEY: If we have to blow up more than one planet, then we might need more than 1,000 nuclear warheads.

MR. MCLAUGHLIN: Is this a reciprocal deal with Russia, by the way?

MR. CARNEY: Well, I think that if we see that we can peel back to a thousand and be just as safe, we may as well try to get something for it, right?

MS. CLIFT: Yeah, this isn't about --

MR. BUCHANAN: These are strategic warheads you're talking about, John.


MR. BUCHANAN: And 1,000 of these monster -- they're about 50 times the size of what North Korea -- 1,000 is fine if the Russians come down and the Chinese stay down to this level, because nobody can do a first strike --

MR. MCLAUGHLIN: Are the Russians willing to go along?

MR. BUCHANAN: I think they are. These things are very expensive to maintain. The missiles are enormously expensive. And Russia's got real problems.

MR. MCLAUGHLIN: Where did we see that not long ago? We saw it when France and Britain decided that they would use the same staff to do certain particular --

MR. BUCHANAN: Sure. They maintained their --

MR. MCLAUGHLIN: -- what, renovations of their nuclear forces.

MR. BUCHANAN: They got sort of a joint deterrent is what you're talking about.


MS. CLIFT: Yeah, this is not an ideological issue. This is about safety and efficiency. And you have -- the Pentagon is behind the reductions. You want a smaller nuclear arsenal that you can be confident will work. You don't want to spread it around too much.

MR. MCLAUGHLIN: OK, countries with --

MS. CLIFT: This is not controversial. (Laughs.)

MR. MCLAUGHLIN: OK, sorry to cut you off. OK, countries with the bomb: The U.S., Russia, Britain, France, China, India, Pakistan, Israel, North Korea. Countries believed to be seeking the bomb: Iran, Egypt, Nigeria, Syria, Taiwan. Officially given up possessing or developing the bomb: South Africa, Argentina, Brazil, Kazakhstan, Belarus, Ukraine, Libya.

Do you want to correct that, Buchanan?

MR. BUCHANAN: Yeah. I don't think there's active programs in any of those countries you're talking about, allegedly, except possibly Iran. I don't think any other country there -- and, you know, Egypt, I don't think they've got nuclear programs at all. And South Africa gave up an actual nuclear weapon. Libya gave up what they had inside that mountain, which wasn't working that well.

MR. MCLAUGHLIN: Do you want to speak to anything, particularly Iran?

MR. ZUCKERMAN: Well, Iran is going to be the -- I just came back from the Middle East. Iran is going to be the issue for that whole part of the world. They don't -- nobody is comfortable with what Iran is doing at this stage of the game. And they're really the destabilizing force in the whole region, especially vis-a-vis Israel. So nobody knows where that's going to go and whether Israel at some point is going to respond and whether the United States, which still says -- and President Obama still says they will absolutely not allow, effectively, Iran --

MR. MCLAUGHLIN: Well, did you speak to Mr. Netanyahu?

MR. ZUCKERMAN: I don't know what it means. That's exactly what the word -- they're just words at this stage of the game.

MR. MCLAUGHLIN: Yeah. Did you speak to Mr. Netanyahu about this?

MR. ZUCKERMAN: Yes, I met with him for quite a bit of time.

MR. MCLAUGHLIN: What'd he have to say?

MR. ZUCKERMAN: He -- actually what he said is I shouldn't talk about what he had to say. (Laughter.

MR. MCLAUGHLIN: Come on, this is a friendly group, Mort.

MR. BUCHANAN: There's a push coming, John, on Iran.

MS. CLIFT: I want to --

MR. MCLAUGHLIN: What's that?

MR. BUCHANAN: A real push by mid-year on the Iran thing, no doubt about it.

MR. MCLAUGHLIN: Yeah, Netanyahu doesn't have the stroke he had before this last election.

MR. ZUCKERMAN: No, this election was -- the country moved to -- his party lost 12 seats.


MR. ZUCKERMAN: And, what's more, where the seats were gained, it was really in the center and the --

MS. CLIFT: I want to give a shout out to President Nixon. The nonproliferation treaty came into force while he was president, and it's actually worked pretty well. In the years since 1970, India, Pakistan and North Korea joined the nuclear club --

MR. MCLAUGHLIN: Another --

MS. CLIFT: -- all under Republican presidents, I might add.

MR. BUCHANAN: (Inaudible.)

MR. MCLAUGHLIN: Another tribute to that great leader of men, Richard Nixon. Right, Pat?

MS. CLIFT: I knew I was in good company.

MR. BUCHANAN: You got it.

MR. MCLAUGHLIN: Two alumni right here.

MR. BUCHANAN: (Laughs.)

MS. CLIFT: That's right.

MR. MCLAUGHLIN: Issue Three: U.S.-EU Trade Deal.

PRESIDENT OBAMA: (From videotape.) And tonight I'm announcing that we will launch talks on a comprehensive transatlantic trade and investment partnership with the European Union, because trade that is fair and free across the Atlantic supports millions of good-paying American jobs.

MR. MCLAUGHLIN: The idea for a trade pact between the U.S. and EU has been touted for decades. Together, the U.S. and the EU account for nearly half of the world's economic output. The European Commission president, Jose Manuel Barroso, called an agreement between the two trading partners a, quote-unquote, "game changer," and outlined an ambitious time line for its accomplishment -- two years. He said this. Quote: "Together, we will form the largest trade zone in the world," unquote.

At this time of widespread unemployment, U.S. and European officials are eager to present voters with any tangible plan to create jobs and confront competition from China. Both sides have vowed to eliminate the few low tariffs that remain. In fact, tariffs are the easy part. Eliminating trade barriers, like regulatory standards, is complicated.

Take agriculture. Europeans won't eat chlorine-rinsed chicken, genetically modified crops or hormone-injected beef, despite most scientific tests confirming their safety.

Procurement. Europe has fought our, quote-unquote, "buy America" provisions, like those in the 2009 U.S. stimulus program.

Intellectual property. The U.S. and the EU must agree on standards for protecting intellectual property that set a benchmark for the rest of the world.

Also any U.S.-EU trade pact would have to be approved by the EU's 27 member states and by the U.S. Congress.

Question: How likely is a U.S.-EU free trade agreement by next year, 2014? Mort Zuckerman.

MR. ZUCKERMAN: I think it's highly likely. I think it is such a game changer, as was used, that this -- everybody will realize what an enormous benefit it is. There are going to be some problems, regulatory problems, that we have to work out with the common market; agricultural issues, as you suggested here. But ultimately, it is such a plus for both sides that this is going to go through. It won't be easy, but it'll get done.

MR. MCLAUGHLIN: Is my recollection correct that you predicted this --


MR. MCLAUGHLIN: -- on this program, what, three or four weeks ago?

MR. ZUCKERMAN: Several weeks ago. That's right.

MR. MCLAUGHLIN: Now, did you have insider information on this?

MR. ZUCKERMAN: Yes, I did.

MR. MCLAUGHLIN: Who'd you talk to?

MR. ZUCKERMAN: I'll get back to you on that.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Why don't you get back to us right now and give us a name or two?

MR. ZUCKERMAN: I think you are not going to get back to me.

MR. MCLAUGHLIN: Did you talk to the Brits?

MR. ZUCKERMAN: I'm not in a position to talk about how I got -- no, I found out about it, what we were doing there.

MR. MCLAUGHLIN: Do you realize how gargantuan this deal would be?

MR. ZUCKERMAN: Yes, absolutely. It is an absolutely constructive step for both sides --

MR. BUCHANAN: No, it's not.

MR. ZUCKERMAN: -- the Europeans --

MR. BUCHANAN: No, it is not.

MR. MCLAUGHLIN: You know, I --


MR. BUCHANAN: I'll tell you why. Mort, let me ask you. What was our trade deficit with Europe all year? Over $100 billion. Last year, Don -- John -- we had the largest trade deficit in world history between two nations, $315 billion with China. The United States has been getting its clock cleaned for the last 25 years. Where do you think all our factories and jobs have gone? They've gone overseas.

MS. CLIFT: This is a counterweight. This is a counterweight to China. That's why it's going to work.

MR. ZUCKERMAN: (Inaudible.

MR. BUCHANAN: We have a deficit with Germany --


MR. BUCHANAN: -- a deficit with France, a deficit with the EU.

MR. MCLAUGHLIN: Hold on. Mort has got some inside wisdom on this. He predicted it.

Go ahead.

MR. ZUCKERMAN: Well, I do think that you will have a much larger market. You can have your manufacturing base that is now going to be completely expanded. Your cost per unit will go down. We'll be much more competitive vis-a-vis countries like China. Particularly we have high-tech goods. And we will. So I think it is a great, great improvement and opportunity for both sides.

MR. MCLAUGHLIN: Predictions. Pat.

MR. BUCHANAN: That $9 minimum wage is dead, John. It'll go nowhere, because the National Federation of Independent Business has come out hard against it. The Chamber of Commerce will weigh in against it and say that's our payoff.

MR. MCLAUGHLIN: Do you think the states ought to fix that minimum wage?

MR. BUCHANAN: I think states ought to set the minimum wage, yeah.


MS. CLIFT: It may be dead this Congress, but there's another Congress, Pat.

Senator Hagel, despite all the hazing he's getting from Republicans, will be confirmed as the next secretary of defense.

MR. MCLAUGHLIN: Four seconds.

MR. CARNEY: Sequestration will be modified by Congress before March 1st.

MR. ZUCKERMAN: The new --


MR. ZUCKERMAN: The new common market between the United States and Europe will turn out to be the most dominant new force in the economy over the next decade.

MR. MCLAUGHLIN: I predict that further research will show that unemployment goes up when the minimum wage goes up.


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