The McLaughlin Group

Host: John McLaughlin

Pat Buchanan, Author and Columnist;
Eleanor Clift, Newsweek/The Daily Beast;
Susan Ferrechio, Washington Examiner;
Mort Zuckerman, U.S. News & World Report

Taped: Friday, August 2, 2013
Broadcast: Weekend of August 3-4, 2013

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JOHN MCLAUGHLIN: Issue One: Yemen Comes Calling.

PRESIDENT BARACK OBAMA: (From videotape.) I thank President Hadi and his government for the strong cooperation that they've offered when it comes to counterterrorism.

YEMENI PRESIDENT ABD RABBO MANSOUR HADI: (From videotape, through interpreter.) Our work together insofar as countering terrorism is concerned and also against al-Qaida is expressive, first and foremost, of Yemeni interests.

MR. MCLAUGHLIN: President Obama met this week with the president of Yemen, Abd Rabbo Mansour Hadi. President Hadi has been president for 15 months, since February 2012. Elections that brought Hadi to office were mostly the result of international maneuvering, notably the U.N. and the U.S.
On the agenda between the U.S. and Yemen, the following: One, Yemen's governance. As part of the transition that brought Hadi to power, new elections, a new constitution, and a new coalition government were promised to Yemen's citizens. The slow pace of these reforms have been critiqued by the public.

Two, Guantanamo prisoners. Of the 166 prisoners held at the Guantanamo Bay prison, half are from Yemen. Some of these Yemeni prisoners have become radicalized during their 10-year confinement in Guantanamo. The U.S. is wary whether President Hadi can successfully detain them in Yemen.

Three, counterterror cooperation. The U.S. considers al-Qaida in Yemen the world's most dangerous terror group. President Obama wants to ensure that Abd Rabbo Mansour Hadi cooperates in containing them. At least three of these suspected Yemeni militants were killed by a U.S. drone strike in Yemen -- get this -- on Thursday, the same day that President Obama welcomed President Hadi. U.S. drone strikes have increased in Yemen from 18 in 2011 to 53 last year, 2012.

Question: How important is Yemen's president in handling the challenge of al-Qaida in the Arabian Peninsula, AQAP?

PAT BUCHANAN: He's so important, John, we brought him to the United States of America. Yemen is a very important country. It's in constant danger of becoming a failed state. It's been divided between North and South Yemen; was united in 1990. It was the home base of the terrorists who did the -- attempted to do the Detroit bombing. It's the home base of al-Awlaki, who was the American we killed with a drone strike. He's the guy that inspired Major Hasan, so -- and also is riven with secessionist tendencies by the Houthi rebels in the north.

It is a very serious country of almost 25 million people. It is the forgotten front in the war on terror. And it is vitally important, and it represents a permanent threat to Saudi Arabia, which it borders, which is on its north.


MR. BUCHANAN: AQAP. That's correct.

MR. MCLAUGHLIN: Also the underwear bomber came from there. Who else? The shoe bomber plot, the photocopier plot, and through the late cleric al-Awlaki had links to major --

MR. BUCHANAN: Also the USS Cole was blown up in what was formerly Aden Harbor.


ELEANOR CLIFT: Well, AQAP is al-Qaida central. It's by far the most dangerous group, not only in their capability but in their intention to get at the U.S. Principally they want to bring down airliners.

And President Hadi has been at the White House twice in the last year. He hasn't been in office that long. He is dependent on the U.S. basically to prop him up. He does not have a broad base of support in the country. The country is in the midst of a civil war. He's fighting al-Qaida there. And I was struck, in his meeting with the president, he talked about the tourism in Yemen has been decimated. Who knew there was tourism to begin with?


MS. CLIFT: Yes. But his economic interests are very much at stake. So there is sort of a meeting of the minds here. And most importantly, he apparently is giving free reign to the use of drones. And the New America Foundation, a liberal think tank, has basically said that 30 members of AQAP have been killed in the last two years. And by some accounts, you know, they're on the run.

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

MS. CLIFT: But they're still -- they're still very dangerous.

MR. MCLAUGHLIN: You'd be interested to know that I drove into Yemen by the southern border.

MR. BUCHANAN: You drove in from the southern border?


MR. BUCHANAN: That's the Gulf of Aden and the Arabian Sea is the southern border.

MR. MCLAUGHLIN: Yeah, I know, the Arabian Sea, along that border, and it's a long, dusty ride.

MR. BUCHANAN: Did you drive from Oman?

MR. MCLAUGHLIN: I drove from Oman.
Do you want to speak to this subject?

SUSAN FERRECHIO: Well, this is critical that he's getting cooperation from the president, because these drone strikes have increased. And this place is still where, when we let people out of Gitmo, they go to Yemen to rejoin terrorist groups. There's still a serious problem with terrorism there. It's not under control at all. It's something that I think it's very important for us to keep continuing this open line of communication with the president.

MR. MCLAUGHLIN: We have 3,200 GIs in the region. Do you know where?

MORT ZUCKERMAN: No, I don't know exactly where. But I want to add one other thing that makes this country very important, which is that they control one of the great waterways through which roughly 15 to 20 percent of the world's oil gets shipped. And if that ever gets --

MR. BUCHANAN: The Red Sea.

MR. ZUCKERMAN: Yeah, the Red -- if that ever goes in the wrong hands, that would be a real, real pressure point.

MR. MCLAUGHLIN: The GIs are in Djibouti, which is a small body of land, kind of a postage stamp on the other side of the canal, of the waterway.

MR. BUCHANAN: I think it's former French Somaliland, I believe -- Djibouti.

MR. MCLAUGHLIN: What else can you tell me about it?

MS. CLIFT: Well --

MR. BUCHANAN: Well, Djibouti -- there's a very big American base there. And the -- that's where the drones fly out of.

MR. MCLAUGHLIN: Three thousand two hundred.

MR. BUCHANAN: And, of course, Somalia has got problems of its own. But I think, you know, this is an ongoing -- it's like a constantly bleeding ulcer, the situation in Yemen, John. And it is extremely important. And most Americans don't know very much at all about it.

MS. CLIFT: Well, as you pointed out --

MR. ZUCKERMAN: (Or where it is ?).

MS. CLIFT: As you pointed out, half of the detainees at Guantanamo are Yemenis, and 56 of them have been cleared for release. But you can't send them back to a high-security supermax prison in Yemen. And I'm not so sure the Yemenis really want them back. They figure they'll just go into battle. And yet, you know, it goes against our values to indefinitely hold people. And the Congress is saying the president can't return them. I'm sure this was a point of discussion between the two presidents.

MS. FERRECHIO: (Inaudible.)

MS. CLIFT: But obviously there's no accommodation that's been reached.

MS. FERRECHIO: One of the things they talked about was a way to rehabilitate some of these folks who come back over from Gitmo. But, you know, you've got to question the value of that.

MR. MCLAUGHLIN: Exit question: Which does Obama, President Obama, value more in Yemen -- stability or a full democratic transition? Pat Buchanan.

MR. BUCHANAN: Stability. But, John, that's rooted also in legitimacy, and they've got to maintain that. And I think that's one of the reasons the president's having this fellow over to the White House.

MR. MCLAUGHLIN: South Yemen was allied with Moscow for a while.

MR. BUCHANAN: South Yemen was formally Aden. It's the old British colony, and they just -- (inaudible). It's the most tribalized country in the Arab world, John, with the possible exception of Libya.

MR. MCLAUGHLIN: How well is Hadi educated?

MR. BUCHANAN: Well -- (laughs) --

MR. MCLAUGHLIN: Where'd he go to school? He went to Sandhurst.

MR. BUCHANAN: Well, the military academy. That's where he should have gone. (Laughs.)

MR. MCLAUGHLIN: So there's a military component there.

MR. ZUCKERMAN: Yeah, there is a military component there. But it's a very unstable society. There are all kinds of groups running around that country, many of whom are quite violent and quite prone to terrorism. And that's why we -- and we really, really must find some way to keep that country from going radical.

MR. MCLAUGHLIN: The big point is that al-Qaida is headquartered there.




MR. MCLAUGHLIN: Now -- and our drone strikes come up from Djibouti, which is that small place across the waterway --


MR. MCLAUGHLIN: -- relatively small. So what's the future hold?

MR. ZUCKERMAN: Well, I mean, it's just going to be an ongoing battle, in one sense. And we just have to hope that it just doesn't -- we just don't lose control of it, or their government doesn't lose control of it, because then we would --

MR. BUCHANAN: Because it'd become a failed state.

MR. ZUCKERMAN: That would -- if it becomes a failed state, we have real problems in that part of the world.

MS. CLIFT: Right. And there's some reason to find hope with this new president. I mean, he seems to be doing all the right things, as best he can. And he's got the confidence of this government. So foreign policy is about managing problems.

MR. MCLAUGHLIN: Issue Two: Snowden Sprung.
Former National Security Agency contractor Edward Snowden is finally out of international transit limbo, for now. Mr. Snowden, who leaked reams of details about how the NSA collects data on Americans and those abroad, slipped out of Moscow's Sheremetyevo Airport on Thursday. He had been holed up at the airport for more than a month after fleeing Hong Kong.

Russia has granted Snowden temporary asylum for one year, according to Snowden's Russian lawyer.

ANATOLY KUCHERENA (Edward Snowden's attorney): (From videotape; interpretation provided by Mr. McLaughlin.) Regarding his place of residence, he will choose it himself. He can live both at a hotel and at a rented flat. But because he is now the most persecuted man on earth, we will take into account security aspects as well.

MR. MCLAUGHLIN: The U.S. wants to prosecute Snowden for espionage and has asked Russia to extradite him. The White House expressed its, quote-unquote, "extreme disappointment" with the Russian government over this latest development in the Snowden case, and even raised the possibility that a planned meeting this fall between President Obama and Russian President Vladimir Putin is now under review.

JAY CARNEY (White House press secretary): (From videotape.) Obviously this is not a positive development. And we have a wide range of interests with the Russians, and we are evaluating the utility of a summit.

MR. MCLAUGHLIN: As for Vlad, he has said he does not want the Snowden affair to harm U.S.-Russian relations. Quote: "International relations are considerably more important than squabbles between intelligence services," unquote.
Question: Is Putin bullying Obama? Eleanor Clift.

MS. CLIFT: Well, it's kind of like the KGB agent versus the professor. And with Putin, his sort of inner KGB bullying qualities, if you will, have certainly come into full bloom.
Now, whether this is just more of the same -- because there's been a parade of insults ever since the Congress, I might point out, passed legislation punishing officials that aided and abetted the jailing and the eventual death of the tax auditor who revealed the corruption in the Russian government. Then the Russians responded, saying Americans couldn't adopt Russian children.

And so is this just one more in a string of confrontations, if you will, or is it a breaking point? I don't think we know that yet. But I think it's a mistake to let this young guy, you know, become such a pivotal moment in U.S.-Russian relations.

MR. MCLAUGHLIN: Susan, wasn't Obama, President Obama, on a program of a reset of a relationship with Russia, with Putin?

MS. FERRECHIO: Well, right. Well, as everyone was saying in Congress this week, this wasn't exactly the reset that people were looking for. And I agree with Eleanor. I think that the United States -- we have instigated some of this with the legislation you talked about. But I also think the president has sort of been so deferential on the international stage, I think he kind of sets himself up for this kind of bullying, if you will. I don't think people take him as seriously --


MS. FERRECHIO: -- as past presidents.

MR. BUCHANAN: They want to stick it to the Americans; Putin does. But, John, there's really a history here which is very big. Since the end of the Cold War, the Russians feel that we no longer treated them as a great power. We moved NATO right into their front yard. We got these National Endowment for Democracy dumping over governments in Ukraine and Georgia. We're going to bring Georgia into NATO. We cut them out of the Caspian Sea oil.

They want to get back at us. And he's very ticked off about this. He's a proud Russian. I agree with Eleanor. We ought not to let this thing get too big.

MR. MCLAUGHLIN: What do you mean, ought not to do it?

MR. BUCHANAN: I mean we ought not -- McCain says we ought to move to bring in more countries into NATO. He's nuts.

MR. MCLAUGHLIN: Snowden has to prove his value to Putin. This is what he can deliver. He can spill every NSA secret he knows to Russian intelligence, the FSB. He'll have to play along with whatever Putin wants him to say publicly, including being a mouthpiece --

MR. BUCHANAN: My guess I-

MR. MCLAUGHLIN: -- for any disinformation campaign.

MR. BUCHANAN: My guess is those computers were compromised within 24 hours.

MS. CLIFT: Right.

MR. MCLAUGHLIN: He'll have to help project an image of Russia as a champion of human rights. Putin will try to arrange that.

MR. BUCHANAN: Well, I think that's fairly minor that Snowden's going to -- (laughs) -- come over here as a salesman for Russia. (Laughs.)

MS. CLIFT: Right.

MR. MCLAUGHLIN: No, he doesn't have to -- he can do it from over there.

MS. CLIFT: Right. Well, yeah --

MR. MCLAUGHLIN: Putin can use --

MR. BUCHANAN: As a tour guide? What are you talking about? (Laughs.)

MR. MCLAUGHLIN: He can use Snowden.

MS. CLIFT: I think it's more likely he'll disappear into some midsize city and we won't hear from him again, although the Russian version of Facebook has apparently offered him a job, so --

MR. MCLAUGHLIN: Do you know what Charlie Schumer said about this?


MR. MCLAUGHLIN: Charles Schumer.

MR. ZUCKERMAN: Chuck Schumer.

MR. MCLAUGHLIN: He said -- Chuck, yeah -- "Russia stabbed us in the back," quote-unquote.

MR. ZUCKERMAN: Yeah. Listen, I think this is a much more serious issue than I think this conversation seems to suggest. He was really --

MR. MCLAUGHLIN: Not my conversation. I gave you the reasons how Snowden can be used by Putin.

MR. ZUCKERMAN: Yes, but I think you were trying to draw out the best of all of your panel members. That's what, of course, I meant.

MR. MCLAUGHLIN: Yeah, but what's your point? What's your point?

MR. ZUCKERMAN: Look, I think he's an extremely critical person for us to understand exactly what he did, how he did it, and what he has distributed, because he has been leaking papers to the British, to everybody, OK? We don't know everything that he has. It's a really, really important intelligence blowout for us. And I think we made it very clear how important this was, and one of the worst that we've ever had.

MR. MCLAUGHLIN: So you think he's a traitor?

MR. ZUCKERMAN: Oh, yes, I do, without question.

MR. BUCHANAN: I think this cat's out of the bag, Mort.

MR. ZUCKERMAN: Yeah, maybe it's out of the bag. But even still --

MR. MCLAUGHLIN: Exit question: Is it a good idea, a bad idea, of no great consequence, for President Obama to go ahead with his one- on-one meeting with Putin in advance of the G-20 summit coming up? Pat Buchanan, quickly.

MR. BUCHANAN: I would go ahead with the meeting.

MS. CLIFT: I think he should go ahead, but he should jerk Putin around a little bit for the next month. (Laughs.)

MR. MCLAUGHLIN: Well, then he can't go ahead with the meeting.


MR. MCLAUGHLIN: He can't do both.

MS. CLIFT: Sure, he can. No, he can jerk him around a little and then --

MR. MCLAUGHLIN: If he jerks him around, he'll probably be disinvited to the meeting.

MS. CLIFT: Maybe.

MR. MCLAUGHLIN: What do you think?

MS. FERRECHIO: I don't think he should go.

MR. MCLAUGHLIN: You don't?

MS. FERRECHIO: Mm-mm. (Negative response.)

MR. ZUCKERMAN: Neither do I. I think Putin's been playing games with us on a lot of levels. Somehow or other, he's got to give the impression that he can stand up to him.

MR. MCLAUGHLIN: No, no, no. He should go. Don't let this thing magnify itself.

Issue Three: Detroit -- Canary in the Coal Mine?

PRESIDENT OBAMA: (From videotape.) We refuse to throw in the towel and do nothing. We refuse to let Detroit go bankrupt. I bet on American workers and American ingenuity, and three years later that bet is paying off in a big way.

MR. MCLAUGHLIN: That was President Obama in October 2012, one month before the U.S. presidential election. Last month, Detroit earned the dubious distinction of becoming America's biggest city to file for bankruptcy.

President Obama was mum, for good reason, according to The Economist magazine. Quote: "Many other states and cities across America have made impossible-to-keep promises to do with pensions and health care," unquote. As many as 100 other cities from coast to coast face Detroit's triple whammy of declining tax revenues, escalating public employee costs, and ill-timed municipal investments ranging from downtown redevelopment projects to sports stadiums funded with municipal bonds.

Quote: "A watchdog in Rhode Island calculated that a retired local fire chief would be pulling in $800,000 a year if he lived to be 100. More than 20,000 retired public servants in California receive pensions of over $100,000," unquote.
Underfunded state pension liabilities nationwide have created a pension gap that totals $2.7 trillion, or 17 percent of gross domestic product. In some states, unfunded obligations exceed annual tax revenues by as much as 241 percent. For chapter and verse on this, see the recent Economist treatment of the U.S. pensions nightmare, notably Hawaii, California, Texas, Pennsylvania, Louisiana, Kentucky, Connecticut, Illinois and Detroit.

Question: Is Detroit's bankruptcy an isolated case, or is it, as The Economist think, a harbinger of what lies ahead for deeply indebted state and local and municipal governments? Is it a canary in a coal mine?

MR. BUCHANAN: It is the future, John. I think Detroit is where we're all headed. There's no doubt about it. What happened in Detroit, of course, was a -- you know, the tax -- I mean, the people started leaving. There were riots. There's violence. Businesses leave. Individuals leave. Then services go down. It's a vicious cycle.

And the main things are the municipal bonds and the pensions and the health care of retirees, and these are growing burdens on states and cities across America. Some are ahead of others. Philadelphia is one city in trouble. Chicago's a city in trouble. But the state that's going to be the first --

MR. MCLAUGHLIN: Where are you putting your savings, Pat?

MR. BUCHANAN: I've got them in municipal bonds, but they're general obligation --

MR. MCLAUGHLIN: Municipal bonds? You just saw what you saw.

MR. BUCHANAN: Virginia municipal bonds, and they're general obligation. Virginia's a good state.

MR. MCLAUGHLIN: Mort, what's the story on bankruptcy for this country?

MR. ZUCKERMAN: Listen, I think we are heading into some kind of enormous fiscal crisis at some point. Nobody knows exactly when it'll hit. But we are looking at a situation where, between retirement benefits and medical-care benefits, we are going to bankrupt --

MR. MCLAUGHLIN: Hey, Mort --

MR. ZUCKERMAN: -- just about every local, state, and indeed the federal government at some point. It's just a question of when.

MS. CLIFT: Yeah, I totally disagree --

MR. MCLAUGHLIN: Did you see that --

MS. CLIFT: -- over here. (Laughs.)

MR. MCLAUGHLIN: -- we got some news with regard to the unemployment rate? It dropped about three percentage points.

MR. ZUCKERMAN: Yes. Let me just say to you, whatever you want to say about the unemployment rate, the real unemployment rate is way, way higher than what you get from the federal government, OK? The real unemployment rate is somewhere around 14 and a half percent. And the jobs that we are creating, I might add, are primarily part-time jobs, not full-time jobs, and they count as full-time jobs in terms of the unemployment rate. So there are plenty of problems.
You can't deal with this issue in 30 seconds. We have the worst problem -- we have the weakest recovery from the worst recession we've had since the Great Depression. And we have huge obligations that we have no way of meeting in our current fiscal crisis.

MS. CLIFT: OK, it's not the greatest recovery, but job growth is steady and the deficit's coming down. We're talking about cities here. Most cities in this country are actually doing very well. Washington, D.C., where I live, is thriving.

MR. BUCHANAN: Its government's huge. (Laughs.)

MS. CLIFT: Well, cities -- the millennials are flocking to the cities. They don't want suburbia. So the cities are doing OK, big cities. Midsize cities are struggling. And so the Stocktons of the world are going to watch what happens in Detroit and see if this bankruptcy plan will allow them to shed their liabilities and start again. So I think, in that sense, it's the canary in the coal mine.

But I hate all this union bashing, like these fat-cat firefighters. They're living middle-class lives. That's all that they're doing. They're not vastly overpaid. The librarians, the municipal workers, the teachers, they didn't cause the meltdown in Detroit, so why should they bear the brunt?

MS. FERRECHIO: But the unions --

MR. MCLAUGHLIN: I'll notify the fire department.
Question: What implications does this latest jobs report have on President Obama's choice for replacement of Federal Reserve Chairman Ben Bernanke? Too complicated for you?

MS. FERRECHIO: I think what the jobs report means, if you look at the numbers, is that so many people have dropped out of the workforce that the numbers dropped. And I think that's a signal that we're going to keep up with these low interest rates --

MR. BUCHANAN: QE3 will continue for a while.

MS. FERRECHIO: -- and that the QE will keep going.

MR. MCLAUGHLIN: So who should he pick to replace Bernanke, in the light of this? Who gets the leg up?

MR. BUCHANAN: Janet Yellen or Summers.

MR. ZUCKERMAN: He's got Larry Summers and Janet --

MR. MCLAUGHLIN: Larry Summers. Why?

MR. ZUCKERMAN: Well, in the first place, I think Larry Summers is a brilliant economist, OK? And he has a relationship with Obama that clearly works.

MR. MCLAUGHLIN: Well, we get that. In the light of what you just saw, these statistics.

MR. BUCHANAN: He's a Bernanke man.

MR. ZUCKERMAN: Well, he --

MR. BUCHANAN: He's sort of --

MR. MCLAUGHLIN: (Inaudible) -- Bernanke man. In the light of the statistics you just saw on those cities.

MR. ZUCKERMAN: He's -- oh, well, he's a great macroeconomist.


MR. ZUCKERMAN: As good as they get.

MS. CLIFT: And he was part of the problem -- he was part of the problem that got us into the meltdown --

MR. BUCHANAN: Exactly.

MS. CLIFT: -- of the century. And frankly, I wouldn't be for him. And a lot of Democrats on the Hill have problems with Summers.

MR. MCLAUGHLIN: Give me --

MS. CLIFT: The president's defensive about it and may well pick him.

MR. MCLAUGHLIN: We've got a little bit of time here. Exit question: Will Obama bail out Detroit? Yes or no, Pat.

MR. BUCHANAN: No, he will not. They'll give some funds from the federal government through legislation. There will not be a giant bailout, a la General Motors.


MS. CLIFT: Even if Obama wanted to, the Congress would never go for it.

MR. ZUCKERMAN: That's right.


MS. FERRECHIO: No, because if he does it, it would set a precedent that the country cannot afford.

MR. ZUCKERMAN: No way. No way he can do that and take on those financial obligations.

MR. BUCHANAN: They bailed out your city, Mort.

MR. ZUCKERMAN: No, I'm not saying that they did it right at that time either. It was a very different set of circumstances at that point.

MR. MCLAUGHLIN: It will be a stealth bailout. How will he do it?

MR. ZUCKERMAN: Stealth bailout? He's going to rob your bank account is how we're going to do it.

MR. BUCHANAN: (Laughs.)

MR. MCLAUGHLIN: Federal grants.

Issue Four: Summer Recess.

The U.S. Congress is leaving D.C. for its five-week-long summer recess, and maybe just in time. Eighty-three percent of the U.S. public disapproves of the job Congress is doing, says an NBC/Wall Street Journal poll.

Get this: Congress gets the highest disapproval rating for Congress since the poll began 15 years ago, 1998. What is the number one reason that merits such high disapproval? Partisanship and the inability of Congress to compromise to get things done. In fact, according to GovTrack, a website that tracks the legislative records of the U.S. government, this Congress is on course to be the least productive in Congress's U.S. modern history.

Question: What explains the lack of consensus in Congress and its troubling polarization? Susan.

MS. FERRECHIO: Elections. We are electing people in sort of this polarizing swing-election kind of way, so we have people who are on the far right and we have people who are on the far left now in Congress. And there is just no middle ground, and that's why nothing really gets done.

We have a Democratic Senate and a Republican House. That's the practical reason nothing is getting to the president's desk. But within each chamber, there are big divides. And that has to do with the fact that people are electing their representatives from the far left and the far right. I think eventually you'll see voters looking for a kind of consensus builder. But they're not looking for that right now. And until that happens, you're not going to see a lot really moving forward.

MR. MCLAUGHLIN: What's new about anything you've said? Isn't that the nature of --

MS. FERRECHIO: It is new. No, no, it is new. In the past several years, we have been electing candidates who are either one side or the other to an extreme. We have lost the middle ground.

(Cross talk.)

MR. MCLAUGHLIN: Why is that?

MS. FERRECHIO: We've lost the middle ground.

MR. BUCHANAN: Because both parties, John --

MS. FERRECHIO: Because people haven't liked what they've been seeing happen. They don't like the laws that have been passed and they don't like the leaders that they've elected. So they're picking --

MR. BUCHANAN: The two parties have become --

MS. CLIFT: (Inaudible) -- the tea party.

MR. MCLAUGHLIN: Let him talk.

MR. BUCHANAN: The two parties have become deeply ideologized, if you will. The Republican Party has moved to a position where basically it believes government is the problem; government has created the crisis. We've got to downsize government. We have to do what we can do to do that.

The Democrats believe that government is the solution. It's the answer to America's crisis. And the two of them are completely at odds, as Susan says.

MR. MCLAUGHLIN: Eleanor --

MS. CLIFT: Well --

MR. BUCHANAN: And so you've got deadlock.

MR. MCLAUGHLIN: Eleanor, what happened to --

MS. CLIFT: What's different is --

MR. MCLAUGHLIN: What happened to compromise?

MS. CLIFT: What's different is the tea party.

MR. MCLAUGHLIN: What happened to compromise?

MS. CLIFT: What's different is the tea party. Basically these are people --

(Cross talk.)

MS. CLIFT: -- who are aligned with the tea party movement who don't believe in government. They are basically anarchists. They are coming here to try to tear down the whole process.

MS. FERRECHIO: Nobody on the far left is doing any of this, though.

MS. CLIFT: They're doing it in the Senate. And the Republican Party as a whole doesn't believe in this.

MR. MCLAUGHLIN: Yeah. Mort --

MS. CLIFT: The Republican Party is at war with them.

MR. MCLAUGHLIN: Let Mort in. We've got little time.

MR. ZUCKERMAN: The solution today is what the solution has always been, and that's leadership. And that leadership has to come from the executive branch. You have to know how to play the Congress, to play the individuals, to make the deals, to have people on your staff who know how to bring them together. That has not been the case either.

MR. MCLAUGHLIN: Why are you assaulting the commander in chief?

MR. ZUCKERMAN: I'm not assaulting him. I'm telling you what -- all of the people in the Congress that I speak to on both sides of the aisle say exactly the same thing.

MR. MCLAUGHLIN: Do you think that Barack Obama is responsible for the polarization that we see in today's Congress?

MR. ZUCKERMAN: No, but I think he's responsible for the inability to resolve that issue.

MR. BUCHANAN: He's incapable of overcoming it.

MS. CLIFT: He's tried everything. He's tried everything.

MR. ZUCKERMAN: No, he has not.

MS. CLIFT: He's tried --

MR. BUCHANAN: And he's failed.

MR. ZUCKERMAN: No, he has not.

MS. CLIFT: He's tried compromise. He's tried schmoozing. He's tried (fighting them ?).

MR. MCLAUGHLIN: Why didn't he work on Boehner?

MS. CLIFT: Nothing works.

MR. MCLAUGHLIN: Boehner's a reasonable guy.


MR. MCLAUGHLIN: Boehner thinks what about Obama?

MS. CLIFT: Boehner can't control his own caucus. He cannot get the tea party people to follow. They don't -- they give him no respect.

MS. FERRECHIO: They're doing what their constituents want. I'm telling you, this can be resolved by one entity -- the electorate. They will pick people --

MR. MCLAUGHLIN: Do you think --

MS. FERRECHIO: -- (inaudible). But they're not looking for that right now.

MR. MCLAUGHLIN: Do you think that Boehner thinks he was betrayed by Obama?

MS. FERRECHIO: Do I think Boehner does?

MR. MCLAUGHLIN: Boehner thinks that way. Remember the meetings they had?

MS. FERRECHIO: Yes, but that's not the big problem, though. And it's not that he can't control his conference. His conference is doing what the people want them to do.

MR. MCLAUGHLIN: Something is different, Pat. Now, what is it? What is it?

MR. BUCHANAN: Barack Obama, A, has failed. B, the two parties are no longer here and here, no longer got people that cross lines. They're here and here.


MR. BUCHANAN: They are in --


MR. BUCHANAN: They are in deep conflict --

MS. FERRECHIO: Because of the electorate.

MR. BUCHANAN: -- and belief about what is right.

MR. MCLAUGHLIN: Why? Why? Why?
MR. BUCHANAN: They disagree about --

(Cross talk.)

MS. FERRECHIO: Because the voters are voting the middle-ground people out of office.

MR. MCLAUGHLIN: I don't get it.

MS. CLIFT: The Republicans are --

MR. MCLAUGHLIN: All right, we all have to pray over this.
Predictions. Pat.

MR. BUCHANAN: Detroit's the first great city to go bankrupt, John. The first great American state to follow it will be Illinois, not California.


MS. CLIFT: Democrat Terry McAuliffe will win the governor's race in Virginia, nailing down the state as a blue state. Ken Cuccinelli, his Republican rival, has just corralled himself way too far on the right.

MR. MCLAUGHLIN: What about -- well, never mind.

MS. FERRECHIO: The government will not shut down after September 30th because Congress will pass a short-term measure.


MR. ZUCKERMAN: The replacement of Ben Bernanke as the Federal Reserve chairman means you're going to get a new chairman that's going to introduce a lot of uncertainty into the financial world.

MR. MCLAUGHLIN: I predict that peripatetic John Kerry's plan for a resolution of the Israeli-Palestinian conflict will work. Check out Forbes Magazine on this subject.


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