Share

The McLaughlin Group

Host: John McLaughlin

Panel:
Mort Zuckerman, U.S. News & World Report;
Eleanor Clift, Newsweek;
Susan Ferrechio, Washington Examiner;
Paul Glastris, Washington Monthly

Taped: Friday, February 22, 2013
Broadcast: Weekend of February 23-24, 2013

Copyright © 2013 by Federal News Service, LLC, 1120 G Street NW, Suite 990, Washington, DC 20005-3801 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, LLC. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Transcripts Database or any other FNS product, please email info@fednews.com or call 1-202-347-1400.

JOHN MCLAUGHLIN: Issue One: Sequester Showdown.

PRESIDENT BARACK OBAMA: (From videotape.) So these cuts are not smart. They are not fair. They will hurt our economy. They will add hundreds of thousands of Americans to the unemployment rolls. This is not an abstraction. People will lose their jobs. The unemployment rate might tick up again.

MR. MCLAUGHLIN: President Obama used his bully pulpit this week to call on Congress to avoid -- get this -- sequestration. That's Washington nomenclature for automatic spending cuts, due to go into effect on March 1, next Friday.

On that day, both military and domestic programs will feel the impact of the monumental $85 billion cuts slated for this year, 2013, alone. Not only does the president condemn the cuts, but his administration is also sounding the alarm; first, the secretary of state.

SECRETARY OF STATE JOHN KERRY: (From videotape.) In these days of a looming budget sequester, that everyone actually wants to avoid, or most, we can't be strong in the world unless we are strong at home. My credibility as a diplomat, working to help other countries create order, is strongest when America at last puts its own fiscal house in order. And that has to be now. (Applause.)

MR. MCLAUGHLIN: Next, the secretary of defense.

SECRETARY OF DEFENSE LEON PANETTA: (From videotape.) Members of Congress need to understand that they were elected to protect the public, not to hurt the public. And I hope they'll remember that as they hopefully work towards a resolution of this issue.

MR. MCLAUGHLIN: The president and his Cabinet all want, quote- unquote, "smarter cuts," and with them the closing of key tax loopholes on the wealthy, including corporations. He accused Republicans of obstinacy and avarice on taxes.
PRESIDENT OBAMA: (From videotape.) Are you willing to have teachers laid off or kids not have access to Head Start or deeper cuts in student loan programs just because you want to protect a special interest loophole that the vast majority of Americans don't benefit from?

MR. MCLAUGHLIN: Let me read a definition of sequestration. You ready? "A government revenue shortfall met by withdrawing money from already funded programs." Any problem with that definition?

MORT ZUCKERMAN: No. That's right on the money.

MR. MCLAUGHLIN: Is it clear?

MR. ZUCKERMAN: Yes.

MR. MCLAUGHLIN: I'll read it again: "A government revenue shortfall met by withdrawing money from already funded programs."

Now, question: Will the impact of sequestration truly be horrifying, or is the talk of fiscal Armageddon political hyperbole? Mort Zuckerman.

MR. ZUCKERMAN: Well, when it was originally passed, these automatic spending cuts were going to affect so many pieces of legislation across such a wide spectrum of American political interests that everybody thought they would be forced into it. It would be like a suicide pact. How could they let this happen?

Nobody should have underestimated the inability and the dysfunctionality of this Congress and the president to work together. So they do not have an agreement. And now they're going back to the same old rhetoric. Each side is attacking the other, and we're making no progress. It's a disgrace.

MR. MCLAUGHLIN: Eleanor, can you improve on that?

ELEANOR CLIFT: Well, the cuts don't all go into effect in one day. It's sort of a slow squeeze. It comes down in pieces, because they have to take $85 billion out of existing government accounts that would otherwise have been spent between now and the end of the fiscal year, which is in October. So it's a lot of money in a short amount of time, and it will affect Pentagon workers. And they've made a point they're going to have to be furloughed a day a week for -- beginning in April.

You're going to probably have individual stories of hurt and pain; the family that saved up for a vacation and shows up at a national park, two kids in the back seat, and it's closed. I mean, that's what happened during the government shutdown. And stories like that can go viral. You're going to have kids turned away from Head Start because they can't afford to --

MR. MCLAUGHLIN: Mm-hmm. (Acknowledging.)

MS. CLIFT: -- cover that many people. But it's not all going to be felt in one day. And frankly, people are so cynical about government and government spending that most people think, you know, either the politicians are going to solve this at the last minute or it's not going to matter anyway. So you haven't -- the president's tried to gin up an emotional reaction in the country among his supporters, and I don't think that's really happened.

MR. MCLAUGHLIN: To add to that, only $44 billion of the $85 billion in cuts will go into effect in 2013, amounting to about 0.6 percent of GDP, according to the Congressional Budget Office.

SUSAN FERRECHIO: It's a tiny fraction of all federal spending. That's what we need to get at here. This is really not a big cut in our federal budget. If we can't make that amount of cuts to our budget, we're really doomed. I mean, if you do look at the polls, people want to reduce our budget. They know the spending is out of control. Every time Congress tries to take a stab at it, they fail. And so they've come to this point.

I think one of the reasons why people aren't getting all excited about it at this time is because both sides know that this 8 percent cut, across-the-board cut, in federal spending does not have to result in long lines at the airport or furloughed essential employees. It's going to be the choice of the administration how much pain they want to inflict on the public in order to put pressure on the Republicans to agree to their solution, which is raising taxes.

MR. MCLAUGHLIN: What do you think? Is sequestration going to be harmful?

PAUL GLASTRIS: It's not going to be the Armageddon, but if it goes on for several months, if one party is saying it's no big deal, the Republicans, and another party is saying it's a terrible thing, the Democrats, I'd rather be the Democrats, because the American people will see them. They will react.

They don't like the idea of chaos at the federal level. They don't like the idea of long lines in airports. And whether it's ginned up by the agencies and doesn't have to happen or not, it will happen, believe me. And it's going to be very, very bad for anyone who pretends that it's not a big deal.

MR. MCLAUGHLIN: OK. Enough donkeys. Now the elephants.

John Boehner, Republican speaker, shot back in The Wall Street Journal. Quote: "The president got his higher taxes, $600 billion, from higher earners, with no spending cuts, at the end of 2012. He also got higher taxes via 'Obamacare.' The president's sequester is the wrong way to reduce the deficit, but it is here to stay until Washington Democrats get serious about cutting spending. The government simply cannot keep delaying the inevitable and spending money it doesn't have," unquote.

Question: President Obama wants to pin sequestration on the Republicans. Speaker Boehner calls sequestration, as you saw, quote- unquote, "the president's sequester." Is he right?

MR. ZUCKERMAN: Yes, he is right, in that it was proposed by the president and by his folks when they had the budget impasse, as a way of, as I say, putting pressure on both sides at some point to deal with it. But our government is so dysfunctional, we are at this particular stage now.
The problem now is, where do we go from here in terms of -- this is going to undermine the confidence of the country in the government and its ability to address problems. It's going to undermine the confidence of business who wants to invest. The whole -- this is just another disgrace in terms of the way the American government works.

MR. MCLAUGHLIN: Is it --

MS. CLIFT: Under --

MR. ZUCKERMAN: But it's serious.

MR. MCLAUGHLIN: Is it exaggerated?

MR. ZUCKERMAN: No, I don't think it is exaggerated. I think it is a major issue. This money will be cut, one way or the other, out of the budget. But it is going to tell everybody something about our inability to deal with our most obvious problem.

MR. MCLAUGHLIN: How should it be cut?

MR. ZUCKERMAN: Well, I think it has to be cut, to some extent, across the board. But I do think there was, in fairness, OK, an increase in taxes. You're going to have to have another increase in taxes. But they really need to cut expenditures. They're not dealing with the biggest expenditure, which is health care. That is not going to be cut under this. It was left out of the program in terms of --

MR. MCLAUGHLIN: Why? Because that is -- that is Obama's sacred cow?

MR. ZUCKERMAN: Well, he's got a few sacred cows, but that's one of them.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: First of all, 178 Republicans voted for sequester. John Boehner at the time said he was very happy with it. He got 98 percent of what he wanted. The impasse here is that the Republicans don't want to give anything in new revenue, and the public is with the president that you can't have a deal which only relies on spending cuts. When you have an economy where the recovery is fragile, it's the last thing we should be doing.

And in terms of health care, Time Magazine has a terrific cover this week about medical bills. And, you know, the president doesn't have control over all of those things. And the big hero in the Time Magazine cover story is Medicare, which is actually doing a very good job in controlling health care spending.

MR. MCLAUGHLIN: OK, yet more sequester grief.

The U.S. Travel Association and congressional staff aides concur that with the budget sequester, one hour will be added to security wait at the nation's biggest and busiest airports. And after clearing the security lines, they will probably wait even longer because of cuts in federal aviation staff, meaning a cutback in air traffic controllers. Connecting passengers, beware.

Question. This is for you, Susan. Concentrate on it. What makes this travel torment unlikely to come to pass?

MS. FERRECHIO: First of all, it's -- it doesn't have to come to pass. The TSA can cut money where it wants. It's a question of whether, as I said before, the president wants to use this to pressure the Republicans by putting as much pain as possible on the public; therefore the public gets
upset.

But that's only going to work for so long before the public is going to figure out that this is a political tactic, and it could really backfire on the administration. I think they are keenly aware of that, and that's part of the reason why they might be a little bit hesitant to start making people miss flights, cancel flights, stand in already long and tortuous TSA lines.

It's a risk for him to do this. But I wouldn't put it past the administration at this point, because it's worked in the past. And it accomplishes their goal, which did not cut spending. That is the issue here. They do not want to cut spending.

MS. CLIFT: (Laughs.)

MS. FERRECHIO: Eleanor, you're wrong. They've already given up on taxes in the last fight.

MS. CLIFT: The last --

MS. FERRECHIO: Are they going to give up taxes on this one?

MS. CLIFT: The last fight --

MS. FERRECHIO: Nobody cut last time. When are we going to cut? Can anybody answer that question?

MS. CLIFT: The last package was not --

MR. GLASTRIS: The 2011 budget deal --

MS. FERRECHIO: But that's a gimmick. That was a slight reduction --

MR. GLASTRIS: -- cut $1.5 trillion.

MS. FERRECHIO: -- in the rate of growth, just like this is. No one is really making any serious cuts.

MR. GLASTRIS: Well --

MS. FERRECHIO: Every lawmaker on Capitol Hill --

MR. GLASTRIS: If that's --

MR. MCLAUGHLIN: Hold on, Paul.

MS. FERRECHIO: -- in both parties will tell you nobody's making serious cuts.

MR. MCLAUGHLIN: Let Paul in.

MS. FERRECHIO: That is such a joke.

MR. GLASTRIS: So, for the record, we shouldn't have sequester at all. We should not be cutting non-defense discretionary spending. Cutting short-term spending does nothing for the big problem, which is long-term spending. We need that money for the services. We need that money to be in the economy. This is completely ridiculous.

MS. CLIFT: Right.

MR. GLASTRIS: We should just get rid of the sequester.

MR. MCLAUGHLIN: What do you want to do with our $16 trillion, $17 trillion national debt?

MS. CLIFT: What you want to do is --

MR. GLASTRIS: I want to control health care costs. If we get health care costs under control over the long term, we have no fiscal problems. Republicans would be well advised to join Barack Obama and have a conversation about how to control health care.

MR. MCLAUGHLIN: Why -- why is this so stubborn a problem, health care costs?

MS. CLIFT: Because --

MR. MCLAUGHLIN: Why is it so stubborn?

MS. CLIFT: Because --

MR. MCLAUGHLIN: Why can't it be effective? Because we have --

MS. CLIFT: Because ideology is involved.

MS. FERRECHIO: No, because people don't take --

MS. CLIFT: What you need to do is close --

MS. FERRECHIO: -- personal responsibility for their own health.

MS. CLIFT: Excuse me, Susan. My turn now.
What you need to do is close loopholes like carried interest, which Mort supports, and would get money from the upper end. You need to close some of those loopholes. And then you need to cut entitlement programs, which the president has put some of those things on the table.

MR. MCLAUGHLIN: Mm-hmm. (Acknowledging.)

MS. CLIFT: But he's not going to do it if he doesn't get any revenue in return.

MR. MCLAUGHLIN: Does the --

MS. CLIFT: It's the Republican refusal to find revenue anywhere. That is the impasse.

MS. FERRECHIO: They just put revenue --

MR. MCLAUGHLIN: Mm-hmm. (Acknowledgement.)

MS. FERRECHIO: They just put revenue on the table six weeks ago.

MR. ZUCKERMAN: Excuse me. I not only do not support carried interest; I've never supported carried interest.

MS. CLIFT: No, you're opposed to it is what I'm saying. You want to close that loophole.

MR. ZUCKERMAN: Yes, I do.

MS. CLIFT: That's what I meant. That's what I was trying to say.

MR. MCLAUGHLIN: What does the AMA say about this, the American Medical Association, which is the association representing doctors?

MR. GLASTRIS: The American -- well, the AMA is actually kind of enlightened about a lot of this stuff. There's --

MR. MCLAUGHLIN: You mean they're in favor of the Obama program, so --

MR. GLASTRIS: They certainly supported "Obamacare."

MS. FERRECHIO: But they're just a fraction of all the doctors out there. There are a lot of doctors who certainly do not support "Obamacare."
(Cross talk.)

MR. MCLAUGHLIN: "Obamacare" is helpful to them.

MS. FERRECHIO: (Inaudible) -- because of it.

MR. GLASTRIS: "Obamacare" is --

MR. MCLAUGHLIN: We're talking money here.

MR. GLASTRIS: Well, "Obamacare" is helpful in controlling health care costs. A huge chunk of the deficit reduction that's been achieved is through "Obamacare."

MR. MCLAUGHLIN: Issue Two: Minimum Wage Hike.

PRESIDENT OBAMA: (From videotape.) But today a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. Tonight let's declare that in the wealthiest nation on earth, no one who works full- time should have to live in poverty, and raise the federal minimum wage to $9 an hour. (Applause.)

MR. MCLAUGHLIN: Minimum wage hike, one proposal put forward by the president at last week's State of the Union address. The current federal minimum wage is $7.25 an hour, a rate the president wants boosted by 24 percent to $9 an hour, a $1.75 boost.

If passed into law, the $1.75 hike would be implemented in stages, to reach $9 an hour by the end of 2015, two years from now. Thereafter, the president wants the minimum wage indexed to keep up with inflation. The White House says a hike would help lift the prospects of 15 million low-income workers.

PRESIDENT OBAMA: (From videotape.) It could mean the difference between groceries or the food bank, rent or eviction, scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.

MR. MCLAUGHLIN: Despite this promise of a higher customer purchasing level for business in general, many small businesses are worried at the prospect of raising what they now pay their workers.

JOE PICCA (small business owner): (From videotape.) I have actually a couple of choices. The two choices is to close down; the other choice is to increase prices.

MR. MCLAUGHLIN: Republicans in Congress, including House Speaker John Boehner, are also tepid.

HOUSE SPEAKER JOHN BOEHNER (R-OH): (From videotape.) When you raise the price of employment, guess what happens. You get less of it. At a time when the American people are still asking the question, where are the jobs, why would we want to make it harder for small employers to hire people?

MR. MCLAUGHLIN: Question: Is Speaker Boehner right to worry that a hike in the minimum wage will depress hiring? Paul Glastris.

MR. GLASTRIS: It's worth worrying about, but I don't think it will, because there's substantial literature on the minimum wage. There have been natural experiments where one state has raised it and the other hasn't. And for the most part -- not totally, but for the most part -- the literature says that a modest hike in the minimum wage does not lead to a loss of jobs.

MR. MCLAUGHLIN: What about in a depressed labor market?

MR. GLASTRIS: Well, I don't know that there's been any studies on raising the minimum wage in a labor market like we have today. Ours is kind of unique. But, look, if you're a small businessman and you've built your business around the minimum wage and you're a pizza parlor, the pizza parlor next door has built its business on paying slightly higher wages and your workers are used to being paid more -- they have less turnover, right; they're better skilled -- then if the business that has the low wage, they're going to go out of business. And the business with the high wage is going to take over the business. So it's going to be a net.

MR. MCLAUGHLIN: OK --

MS. CLIFT: Yeah. Productivity is better if you pay people a little more. And 17 states already have a higher minimum wage than $9. And if the minimum wage had kept up with inflation, it would be well over $10. And so this has been a Democratic issue -- big D -- for a long time. Senator Ted Kennedy championed it. They may not get it this Congress, but it's on its way.

MR. MCLAUGHLIN: This is conundrum time. Say you can pay $18 an hour for two employees. You got that? Eighteen dollars an hour for two employees. If you can hire a new worker for $7.25, you can then afford to pay a more experienced worker $10.75. You got that? But if the new hire costs you $9, you will keep that employee and your more experienced one at $9 to control your unit labor costs. What does that tell you, Mort?

MR. ZUCKERMAN: Well, it tells you that there are going to be different strokes for different folks, OK? There are going to be a lot of companies, frankly, that will, frankly, hire fewer people because they feel they can't afford it.
One of the things that is interesting in this job recovery, such as it is, 68 percent of the jobs are part-time, low-wage jobs. We're becoming a low-wage, part-time employment center, and that's very bad for the United States. This will change it slightly, but it may make it worse. People will just hire fewer people in this very difficult time. If you were in a more prosperous time, I would have thought this would have been a better time to introduce it.

MR. MCLAUGHLIN: How should Boehner handle this? Should he go along with it, or should he fight it?

MS. FERRECHIO: I don't think they're going to take it up in the House. I mean, the idea behind minimum wage is to encourage people to look for jobs that pay more, that are outside the minimum-wage spectrum. This, again, as Mort was saying, I think, encourages us to become more of a low-wage society, more dependent on government. That's just bad for the economy. It's bad for the strength of the United States economically overall.

I think that John Boehner, a former small business owner, really believes that. And I don't think -- now, Congress raised the minimum wage about five years or so. I just don't think you're going to see that happen this year in Congress, in the House.

MR. MCLAUGHLIN: I think it's a good idea, but I think it's too steep.

Issue Three: A Pox on Both Your Houses.

Quote: "Syria's civil war is becoming increasingly sectarian, and the behavior of both sides is growing more and more radicalized," unquote. So says a new report from a United Nations commission investigating Syria's two-year-old conflict, which has left an estimated 70,000 people dead.
The report cites, quote-unquote, "credible evidence" of war crimes and crimes against humanity perpetrated by the government forces of Bashar al-Assad and the opposition rebels, who oppose them.

The report details, quote, "accounts of massacres, summary executions, torture, attacks by armed groups on civilians, sexual violence, abuses against children," unquote.

Carla del Ponte, one of the authors of the report and a former chief U.N. war crimes prosecutor, says Syria should be referred to the ICC, the International criminal Court. Those responsible for such crimes -- del Ponte says there is a list of the high-level perpetrators -- should be prosecuted.

CARLA DEL PONTE (U.N. commissioner and former chief prosecutor): (From videotape.) I would say the referral of justice is -- must be imminent, urgently, because crimes are continuing committed in Syria, and the number of victims are increasing day to day. So justice must be done.

MR. MCLAUGHLIN: The U.N. panel also had this recommendation to the international community. Quote: "Curb the proliferation and supply of weapons," unquote, into Syria.
Question; one round-robin: Is the timing of the report helpful or unhelpful to diplomats trying to bring an end to the fighting in Syria? Mort.

MR. ZUCKERMAN: I think it's helpful. It'll inspire some other countries to get involved in that war.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: I love the U.N., but I think it's largely irrelevant. I think the next step is really up to our new secretary of state, John Kerry, and whether he can draw on his long relationship with Assad to try to get him to exile.

MR. MCLAUGHLIN: Good point.

MS. FERRECHIO: I agree completely with Eleanor. It all hinges on Assad getting out of there. Nothing is really going to change until that happens.

MR. GLASTRIS: I think the Security Council has to vote on this. And if they think it's unhelpful, they'll vote no. And so it'll have no effect.

MR. MCLAUGHLIN: Kerry is saying that he has talked to Assad earlier, and he thinks Assad can be persuaded to leave.

MR. GLASTRIS: Well, maybe this will be a goose to get him to move quicker.

MR. MCLAUGHLIN: Do you have any thoughts on that? Any inside information?

MS. CLIFT: No. But, you know, the weapons to Syria are flowing through Iraq, which is another complicating factor. And, you know --

MR. ZUCKERMAN: From Iran, mostly.

MS. CLIFT: Yeah.

MR. ZUCKERMAN: Flowing through Iran -- from Iran.

MS. CLIFT: You know, we have something to do with Iraq, and that's another area where John Kerry may be able to apply some influence.

MR. MCLAUGHLIN: He's good.

MS. CLIFT: I hope so, yes.

MR. ZUCKERMAN: He is good.

MR. MCLAUGHLIN: He's good at what he does.

MR. ZUCKERMAN: Yeah.

MR. MCLAUGHLIN: And he knows the --

MS. CLIFT: He knows the players.

MR. MCLAUGHLIN: And he's traveled. He's traveled.

MS. CLIFT: He knows the players. He knows the issues.

MR. MCLAUGHLIN: Oh, yeah.

MS. CLIFT: He knows the region.

MR. MCLAUGHLIN: How many years was he chairman of the committee?

MS. CLIFT: Oh --

MR. MCLAUGHLIN: Twenty-five?

MS. CLIFT: Well, he wasn't chairman all 25.

MS. FERRECHIO: Off and on, because --

MR. MCLAUGHLIN: But he was on the committee.

MS. CLIFT: He was on the committee.

MR. MCLAUGHLIN: Issue Four: The Voice of the People.
The American people speaketh. In a new poll, the public was asked how urgent it was for President Obama and Congress to pass certain key legislation this year.

Get this: Seventy percent say reducing the federal budget deficit, urgent; pass it this year. Twenty-one percent say pass the budget over the next few years; 4 percent, forget about it.

OK, major legislation on immigration: 51 percent, pass it this year; 37 percent, the next few years; 7 percent, forget about it.

Gun legislation: 46 percent, this year; 21 percent, the next few years; 29 percent, forget about it.

Climate change: 34 percent, pass it now; 39 percent, the next few years; 19 percent, forget about it.

Kudos to USA Today and Pew Research on the poll.

Question: When it comes to the urgency of legislation, this polling does give us a sense of the public priorities. But does it give us any idea about a public consensus on the contents of the legislation? Susan Ferrechio.

MS. FERRECHIO: I don't think it does in any sense, because if you add up the don't do it and don't do it this year, you're getting about half the population who are polled for this. You know, there's no urgency except for one topic, which is reducing the debt and the deficit. That's the only place where you really see Americans saying now, quick, let's do something immediately.

MS. CLIFT: I don't see that at all. Nobody's saying now, quick, and especially if you ask them what spending programs they'd like to cut. Democrats don't want to cut anything, and the only areas Republicans want to cut is foreign aid and unemployment insurance. That's not going to get you very far.

This poll shows the country is broadly aligned with the president's proposals. When you ask the country -- ask people, do they support gun legislation, they're thinking of what Obama is proposing, and same on immigration reform, same on climate change. There are majorities and pluralities in favor of the president's agenda. If he doesn't get them on Capitol Hill, he's going to take them to the campaign trail. And that's what the 2014 midterms will be about.

MR. MCLAUGHLIN: What does it say about whether President Obama is following the priorities of the people?

MR. GLASTRIS: I think he's following them to the tee, or at the very least he's put out agendas that the vast majority of the American public likes and that put Republicans in a terrible position of splitting the party.

Let me give you an example. It's not in the things you said, but on minimum, wage, three to one, Americans want a higher minimum wage. But people who favor the tea party don't want a minimum wage, two to one, increased. So for Republicans, they're seeing three to one Americans want the minimum wage increased, but their base, two to one, doesn't. It puts them in a terrible position. So I think the president is right where he needs to be.

MR. MCLAUGHLIN: Here's what my able research staff says. He's not in sync. The top issue is deficit control.

MS. FERRECHIO: That's right.

MR. MCLAUGHLIN: Seventy percent say it's urgent, but Obama has not yet put forward a budget this year or pushed deficit control. Moreover, his State of the Union address contained $84 billion in new spending proposals.

Can you speak to that, Mort?

MR. ZUCKERMAN: Yeah. Well, I think that's a legitimate concern, because that is an issue that could really unravel the economy. Nobody knows exactly when or how. It's one of those stories Hemingway captured when he says -- two characters are talking. One says, how'd you go bankrupt, he says to his friend. He says two ways. He says first slowly, then suddenly.

MS. FERRECHIO: (Laughs.) That's right.

MR. ZUCKERMAN: Something can happen. It could be very serious. Nobody knows when it'll happen. The financial markets could lose confidence in the American economy --

MR. MCLAUGHLIN: Yeah.

MR. ZUCKERMAN: -- and the American budget. Then we'd have a major thing. Something has to be done.

MR. MCLAUGHLIN: Was that your gloss, or did he really say that?

MR. ZUCKERMAN: No, no, he did say that.

MS. CLIFT: You know, austerity --

MS. FERRECHIO: When you look at that 74 percent --

MR. MCLAUGHLIN: Let her in.

MS. FERRECHIO: -- that first graphic you showed -- now, do we really think, Eleanor, out of those 74 percent, that they think the only way to do it is to cut taxes? They want to see spending cuts, and that we haven't seen the president offer yet.

MR. GLASTRIS: But he has.

MR. MCLAUGHLIN: That look you're getting from --

MR. GLASTRIS: No, wait, wait, wait. He has totally offered spending cuts.

MS. FERRECHIO: Get me a microscope, then, because I haven't --

MR. GLASTRIS: Six hundred billion dollars --

MS. FERRECHIO: -- been able to find them yet.

MR. GLASTRIS: -- in cuts. They're right there in his proposal.

MR. MCLAUGHLIN: Predictions. Mort.

MR. ZUCKERMAN: Given the weakness of the economy, the Federal Reserve will not tighten interest rates for at least another six months.

MR. MCLAUGHLIN: Eleanor.

MS. CLIFT: The Oscar-nominated documentary "The Invisible War" will continue to reform rules about sexual assault in the military.

MR. MCLAUGHLIN: Susan.

MS. FERRECHIO: March 1st, the sequester will happen.

MR. MCLAUGHLIN: Paul.

MR. GLASTRIS: "Lincoln" beats out "Argo" as best picture.

MR. MCLAUGHLIN: I predict that Daniel Day Lewis will receive the Oscar for best actor of the year and will be revered worldwide as the best actor in the world.

Bye-bye.

(C) 2013 Federal News Service

END