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Parker Spitzer
George W. Bush's Third Term?; Interview With Jared Bernstein
Aired December 08, 2010 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATHLEEN PARKER, CNN ANCHOR: Good evening. I'm Kathleen Parker.
ELIOT SPITZER, CNN ANCHOR: And I'm Eliot Spitzer.
Welcome to the program. Another busy news days so let's go straight to our "Opening Argument."
You know what, Kathleen? I want to talk about George III. And I don't mean the British king, I mean the third term of George W. Bush. From Afghanistan to bailing out Wall Street. Now to tax policy. These policies could have been President George Bush's if he had had a third term.
And you know what's even better for him? He gets to clear brush on his ranch in Texas and let somebody else do the work and get his policies put into place by Democrats.
I never would have imagined it.
PARKER: You know, Eliot, I'm not a political operative and I don't work for the Republican Party but objectively speaking, I have to say you Democrats are big babies. I mean you just got to have everything your way or wah, right?
OK, so no, he's not -- I'm going to play devil's advocate here.
SPITZER: All right.
PARKER: I am going to go pro-Obama for a minute. He is totally your president. He is our president. The president of the United States. Not the president of the Democratic Party. And so he's come -- but by the way, Afghanistan, as just one example, George Bush had no intention of doing a surge in Afghanistan because he told me that personally when I asked him why not do a surge in Afghanistan, it worked so well in Iraq. He said, no, we're not going to do that.
It's Obama's war. And it's Obama's presidency.
SPITZER: Well, that's what I'm saying. This is not what the Democratic Party wanted. These are not the changes we wanted. This is not the foreign policy we wanted in those --
PARKER: Well, let --
SPITZER: But it is, in fact, when it comes to economic policy in particular, I think a horrendous deviation from what the Democratic Party believes in. And his tax so-called agreement, 25 percent of the benefit goes to the top 1 percent. He's giving over $120 billion to the super wealthy. Bringing -- the estate tax way, way down.
PARKER: Look, look, look. I think everybody would agree that the super rich do not need a tax cut. And we are in agreement that we've got some major painful cuts to make in spending. We've got --
SPITZER: But, Kathleen, your party is supposedly the one --
PARKER: I don't belong to a party.
SPITZER: Holding the Democratic Party hostage. We listened to the president yesterday, he said the Republican Party made it impossible to get it through without it.
PARKER: Well, he has -- he's covering himself.
SPITZER: I'm saying, the economic policies of George Bush, which gave tax benefits to the rich, had no upside in terms of job creation. This president has just embraced that and continued it in a way that is not going to do for us what we needed. We now here --
PARKER: He's done a lot of good things for your agenda, Eliot. You know you got your health care reform. You got your financial reform. I know it's not to your satisfaction.
SPITZER: That is not --
PARKER: But these are -- these are major movements.
SPITZER: This presidency is becoming the status quo you can believe in in terms of foreign policy, domestic policy, tax policy in particular. And I think that's why people are upset. We are stuck --
PARKER: President Obama, the first.
(LAUGHTER)
SPITZER: We are in the (INAUDIBLE).
Anyway, for more on this controversy and the tax deal, let's bring in our "Headline."
PARKER: Joining us now from Washington, Jared Bernstein, chief economic adviser to Vice President Joe Biden.
Welcome.
JARED BERNSTEIN, CHIEF ECONOMIC ADVISER TO VP: Thank you. Thanks for inviting me on.
PARKER: We're glad to have you. Hope you're not too cold out there.
BERNSTEIN: It's a little chilly but I have a space heater warming the back of my legs so that's something.
(LAUGHTER)
PARKER: Well, good then you can sprint when you're ready.
Listen, earlier today White House economic adviser Larry Summers warned of a double-dip recession. He said if this deal doesn't go through, we're in trouble. Do you agree with that?
BERNSTEIN: I certainly agree with Larry, especially on the following point. Look, if you look at the measures in this plan that are very clearly associated with growth in the economy, with tax relief for the middle class, and for businesses, with relief for folks facing long-term unemployment, each one of those measures has significant positive impact on growth and jobs.
Now that's not our estimate. That's the estimates of now a broad-ranging group of outside economists. So if you look at estimates that raise the growth rate of the economy by .5 percent or 1 percent that add something over a million jobs to the labor market, and you pull those effects out of the economy, subtract them, Larry's point is very well taken.
That's just arithmetically means less growth, greater probability of contraction versus building on the recovery that's ongoing, though too fragile.
PARKER: Well, you know, if that's the case, then it seems that this is a rather urgent move, and given that, it makes me wonder why we're doing this so last minute. Why is this taking so long to get here?
BERNSTEIN: Look, I've been talking about this plan for the past few days. And the word "urgent" has been one I've used a lot. I do think there's great urgency to this. You know we have an unemployment rate that is highly elevated. And we have in front of us a plan that I think has great potential to contribute to growth and jobs, the middle class tax relief --
SPITZER: Jared, I hate to break it to you but I think people would have expected very much to see those from a Democratic House, Democratic Senate and Democratic president, and they're astonished that it took this long even to get them on the table.
And frankly, think Larry Summers' statement today is not only political hocus pocus but it's an argument against your plan because the piece of it the most of us objects to -- the pieces, plural -- will do nothing for job growth. We're talking about an estate tax that cuts 20 percent off the marginal rate.
BERNSTEIN: Right.
SPITZER: And a cut in the tax rate for the super wealthy who don't need it. Why did you not push for a Senate and a House vote on Senator Warner's plan to reduce the tax, eliminate the tax cuts for the rich, and put all that money into a job creation cuts like a payroll tax cut?
BERNSTEIN: OK.
SPITZER: What was wrong with that idea?
BERNSTEIN: OK. You've raised some challenging points here. Some of which I fundamentally disagree with. And let me -- and some of which I agree with. So let me start with where we disagree. And I think I -- I think I can at least try to convince you you're wrong. It was a matter of --
SPITZER: Good luck.
BERNSTEIN: It's a matter of a couple of weeks ago -- and you'll remember this, Eliot -- that the House, the Democratic House, voted for an unemployment insurance extension of around three months and they did not get it. This did not pass. And you will --
SPITZER: Because -- because, Jared, I hate to interrupt, because the president hasn't been banging away at this issue with the persistence that we needed. That's been the grievance here.
BERNSTEIN: No, again. No, the president has been banging away hard --
SPITZER: No way.
BERNSTEIN: -- on these very issues. And, you know, now we're talking about an agreement, a bipartisan agreement in the making, with a 13-month extension when we couldn't even get a -- so I really think it's a statement that -- you know, not just myself, but I think bipartisan folks who are looking at this agree that this is a better plan than anyone expected.
Now on the high end, on the high end, you are 100 percent correct. Those measures do not contribute much at all in my thinking to growth or jobs. What those measures do in the spirit of political compromise is they break a stalemate and avoid middle class families waking up on January 1 to a $3,000 tax increase and an economy that's going to be losing jobs because we didn't get the measures in place to preserve middle class tax cuts --
SPITZER: Jared.
BERNSTEIN: -- as well as the other programs I've been mentioning.
SPITZER: Jared, with all due respect, you love to say we were taken hostage. And I think that that is wrong. You turned yourself in -- you turned yourself into a hostage both by delaying this until this moment and then by refusing to go to the brink of the precipice.
We have majorities in both Houses. Why did you not do what so many members of Congress are proposing? Go to Christmas Day and look at the Republicans and say, we dare you to cut off these tax breaks, to deny unemployment insurance -- BERNSTEIN: Eliot. Eliot.
SPITZER: Negotiate hard, don't cave, don't punt on third down, which is what Anthony Weiner has said, and accurately in my view, instead you've done.
BERNSTEIN: This president, this economic team, this vice president is not willing to withstand the collateral damage on the economy and middle class because of said -- of political negotiations and machinations and the kinds of disagreements that have been -- that have the real potential to block the measures that we've been talking about.
We have on the table a plan that will deliver thousands of dollars of tax relief to the middle class, that will deliver hundreds of thousands, millions of jobs to this economy, a half a point to a point of GDP growth next year. That' is the medicine this economy needs. And that's the plan on the table. And that's what we have to make sure is in place.
SPITZER: I've got to ask one more question about the unemployment. And I've got another question on the estate tax.
Unemployment, you said 13 months, as though that's a good thing. How is it possible to negotiate a deal that says only 13 months on unemployment, two years on the tax cuts for the rich, and yet you didn't even create a trigger?
Why not create a trigger for unemployment cutoff -- benefit cutoffs so until unemployment drops below 8.5 percent, 8 percent, in other words some other economically rationale number, so that you say at that point we can understand it? How could you not at least have gotten that for the unemployed who are desperately looking for jobs?
BERNSTEIN: You know there is a trigger built into this and I'll explain in a second. But before I do that, let me tell you. This -- and you can look this up in the history books. This extension of unemployment insurance is an historic one. Never before have we had a longer extension with more available weeks for unemployed people in states -- and here's where the trigger kicks in -- in states where unemployment is particularly high.
So if you are in a state, a Michigan, a Rhode Island, some of -- one of these states that have particularly high unemployment, that's where you are eligible for 99 weeks of unemployment insurance.
I mean, Eliot, I hope you know that that is historical in terms of protecting the unemployed in an economy through no fault of their own unable to get --
(CROSSTALK)
SPITZER: But Jared, Jared, I clearly would have negotiated this in a wholly different way. I just want to clarify one factual thing. I'm correct, am I not, that for folks, either individuals under 20,000 or two filers with income of 40,000, their taxes are going to go up? BERNSTEIN: No, no. I'd say that's incorrect in the following sense. If your income is below or your earnings is below $20,000, it is true that you will get less from the payroll tax cuts than you would from making work pay but you --
SPITZER: And making work pay expires, right?
BERNSTEIN: Correct. But you will get -- the difference is I think about 100 bucks. You will get over $1,000 more from the -- the refundable tax credits that are part of this deal. The child tax credit, the earned income tax credit -- those credits will weigh more --
SPITZER: But those were already there.
BERNSTEIN: That is absolutely incorrect. Those --
SPITZER: The 2 percent --
(CROSSTALK)
SPITZER: Am I --
BERNSTEIN: No, no, wait a second, wait a second. The refundable tax credits ended in 2010 and this was a very tough sticking point in the negotiations and the vice president, the negotiators, fought very hard to make sure low-income families do much, much better under this plan than they would have otherwise.
PARKER: Jared, I can certainly understand why Democrats are upset because they've essentially blown it. I mean they had control of both House, they had the White House, and they got shellacked in the midterm elections.
I mean, isn't it just remotely possible that the president is tacking to the center because that's where the country is and he is in fact the president of the United States, not just the Democratic Party?
BERNSTEIN: Well, I think that -- I really don't see the tacking point. I mean, there may be a political point in there that I'm missing. What I see is on the economy.
The president has consistently stressed a top priority is job creation. Now we have an economy that is technically in recovery. GDP has been growing for five quarters in a row. We've added, you know, over 1 million private sector jobs this year.
But from the perspective of middle class families, it still feels like a recession. So this president has to do everything he can to promote growth and jobs for the middle class to give businesses the breaks they need to expand and hire.
SPITZER: Jared, we have -- we have run out the clock unfortunately, or maybe fortunately, and we thank you for joining us. And hope you'll come back and chat with us down the road. BERNSTEIN: Sure. I hope, too.
SPITZER: Thank you.
PARKER: Thanks so much.
Later on, the life and politics of John Lennon. How the legendary Beatle saw the world. We'll be right back.
(COMMERCIAL BREAK)
SPITZER: Today President Obama once again defended the tax cut deal made with Republicans, calling it the right thing to do. The president pushed back at suggestions the Democrats felt betrayed and didn't support it.
PARKER: Joining to talk to us about the continued fallout, from Boston, former presidential adviser David Gergen.
Welcome, David, and thank you for joining us.
DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Hello, Kathleen. It's good to talk to you.
SPITZER: David, I'm going to throw the first question at you. Put on your professor's hat. You're sitting there at the Kennedy school. A lot of criticism of the way the president negotiated this. Give him a grade. You're the professor. He's the student. Negotiating skills, good or bad?
GERGEN: Ha. I think you have to separate substance from negotiation. The final bill actually has a lot of strengths to it. I'd give him an A-minus on the bill. And let me just -- for example, when you get beyond the United States, in some of the international warfare we're having here now, look at "The Financial Times" today. This is the lead story on "The Financial Times."
"Obama Tax Move Lifts Hopes for Growth." This is the headline. "Obama Tax Move Lifts Hopes for Growth." And it says that a number of economists are upgrading their economic outlook for the United States over the next year or two.
The United States is the only industrialized nation now in the west that instead of tightening is actually continuing to stimulate its economy and they think that's going to help. So that -- and I think there was an inevitability at the long run.
But on negotiating, Eliot, on the thing you asked about, I think the negotiations, the process got bollixed up. And I have to give a C-minus, D-plus on the negotiating.
SPITZER: All right, well, I'm with you on the second grade. On the first grade, boy, I want to take your course. You're the sort of grader I used to like as a student.
But I want -- (CROSSTALK)
SPITZER: I want to change gears on --
GERGEN: That's how you've done so well in life, Eliot.
PARKER: Yes, I think you're absolutely brilliant, Professor.
(LAUGHTER)
SPITZER: I want to come back to the negotiations and some of the strategy. It seems to me Nancy Pelosi is in the cat bird's seat right now. This has been a bid and an offer. They didn't ask it. And she can say, Mr. President, you need House Democratic votes to get this through. I'm going to come in and force you to renegotiate this and she's now at the fulcrum.
Can she force a renegotiation?
GERGEN: I don't know that she's got enough votes to do that. I mean all the Republicans in the House, with a few exception who'll probably vote for this. He doesn't have to get that large a proportion of the Democrats to get through it.
I'll be amazed if she has enough. It sounds to me more like the NAFTA fight when Bill Clinton got NAFTA done, and with the Democrats voting against it, but basically got it done with the Republicans.
SPITZER: Right.
PARKER: David, you're so even-handed and fair. And I think you gave the president just the right grade with that A-minus. But you know, honestly --
GERGEN: On substance.
PARKER: Yes. The Democrat's anger aside, I mean, doesn't this really strengthen the president as the centrist leaning president he promised to be? No red states, no blue states? And this is a compromise, isn't it?
GERGEN: Well, Kathleen, I think if he had negotiated it well, if the communications had been strong, then I think he would have come out doing just what -- at least I had hoped he would do, and that was to move to the center.
But the negotiations has got so bollixed up that I think he comes out looking weakened by this that he got rolled by the Republicans which is not in fact what -- I think what happened. But one of the mistakes that I think they made was to -- during the health care fight, they turned everything over to the Democrats and let them do that it in the House and Senate and they came up with a bill that wasn't popular.
In this case, he didn't bring the Democrats into the negotiations. He just did it with the Republicans. I think that was a mistake, too. And he looks -- he winds up with his own party now -- angry at him. And, you know, I do think -- in one sense, fundamental like health case, that is, he got the bill he was looking for but he lost the fight.
And on this one, he's got the bill actually that may help the economy but as a political matter he lost the fight. And I think that's a really weird position to be in. And something the White House has to address. They cannot continue negotiating like this and wind up with a deal but getting hurt for it.
PARKER: Yes.
SPITZER: You know, David, thank you so much for this analysis. The only thing you've done me in tonight is my students who are going to be watching this tonight are going to say, gee, Eliot, why are you so much a tougher grader than David is?
(LAUGHTER)
GERGEN: Good, Eliot. A little more compassion.
SPITZER: All right.
(CROSSTALK)
GERGEN: I sound like a compassionate liberal, right?
PARKER: Thanks a lot, David, appreciate you coming on.
GERGEN: OK. Take care.
PARKER: Coming up, your child's education and future in jeopardy. We're losing our global competitive edge. Our next guest has ideas on how to change that.
Stay with us.
(BEGIN VIDEO CLIP)
PARKER: We know that intact families are a huge influence on how well students do and the statistics for kids who come from -- who were raised by single parents or no parents are abysmal. Most of the prisons are filled by people with people who were raised by --
PEDRO NOGUERA, PROF. OF EDUCATION, NEW YORK UNIVERSITY: That's right.
PARKER: -- only one parent.
NOGUERA: It's also interesting what Asian families do because there's a -- you know our research is showing that they actually get their kids to study, they study with them. So it's not simply the intact family. It's also what that family doing to support their children.
(END OF VIDEO CLIP) (COMMERCIAL BREAK)
SPITZER: It's the topic that doesn't make the headlines very often but it should -- education in America. Our nation's school system is in crisis. We are no longer the best in the world. In fact, a disturbing new report shows the U.S. is just average.
PARKER: The OECD Program for International Students Assessment known as PISA compares the skills of 15-year-olds in 70 different countries. Now here's how bleak it is. The U.S. ranks 14th out of 34 in reading, 17th in science, and 25th in math.
SPITZER: Joining us tonight is Pedro Noguera, a professor of education at New York University and also on the SUNY Board, I should add with some pride.
Welcome.
NOGUERA: Thank you.
PARKER: Thanks for being with us, Pedro.
NOGUERA: Great to be here.
PARKER: If you break this report out according to race, Asian- American kids actually rank second out of 65 countries in this country.
NOGUERA: That's right.
PARKER: Our kids overall do poorly but when you break them down into -- by race, it's a different picture. OK. The whites rank 6 out of 65 countries. Hispanics rank 41st. And African-Americans 46th out of 65.
So what's going on here?
NOGUERA: What's going on is that we have great inequality in our schools. You know we have some fantastic private schools in this country and a small number of really great public schools.
We've got a lot of average schools. And then we've got some terrible schools. And those unfortunately are located mostly in urban areas and many poor rural areas. And that's why we're seeing such -- we average it out, we end up --
PARKER: But are we saying that Asian kids live in better neighborhoods or are there other factors that --
NOGUERA: The Asian population is a complex one. On the one hand, you have a large number of immigrants and Asian immigrant kids tend to come with more educated -- better educated parents. They also have a strong work ethic in schools so they're doing extremely well. Better than any other group.
PARKER: But they also have intact families? Is that a factor? NOGUERA: That's -- tremendous factor.
PARKER: Because we know intact families are a huge influence on how well students do. And the statistics for kids who come from -- who are raised by single parents or no parents are abysmal. Most of the prisons are filled with people who are raised by --
NOGUERA: That's right.
PHILLIPS: -- only one parent.
NOGUERA: It's also interesting what Asian families do because there's a -- you know, our research is showing that they actually get their kids to study. They study with them. So it's not simply the intact families. It's also what that family doing to support their children.
PARKER: It's what that family expect of their kids.
NOGUERA: That's right. And how they convey that. It should be a wake-up call for the country. We've been focused on "No Child Left Behind" for nine years. We still not making a lot of progress. And I think part of that is because we've really emphasized basic skills, not higher order skills. We haven't really focused on how to make sure that all kids, regardless of where they live, receive a quality education.
SPITZER: Can I stop you?
NOGUERA: Sure.
SPITZER: Explain the difference. What's a higher order skill as opposed to a basic skill?
NOGUERA: Right. Right now, if you look at -- we have a lot of kids who are getting proficiency and higher on our state exams across the country and then they end up in college and have to take remedial courses.
And what that shows a real disconnect between the expectations in our secondary schools and the expectations in our colleges and universities. And that's because we're emphasizing the basic skills there. The higher order skills really get at issues, can you think critically, can you process information independently?
SPITZER: What do you do with teachers?
NOGUERA: What we have to do with teachers is do what the other countries that are outperforming us are doing, which is investing more in the preparation of teachers, doing more to attract some of our strongest students into the teaching profession and getting them to stay there. Because you get better the longer you're there.
PARKER: I want to get back to a subject near and dear to my heart which is boys. I raised three of them. But across the board, boys are doing less well in school than girls. Girls are excelling in the -- at the high school level. There are more females going to college. More women going to graduate schools, et cetera, et cetera.
Some of the problems have to do with boy behavior. It has also to do with curriculum. I mean -- meaning that the classroom is not really oriented towards fidgety little boys who need to be out on the playground playing a lot more than they are now.
But what about the curriculum itself? Is this -- is that more girl oriented in your view?
NOGUERA: I would say in many cases it is, in that what we expect of kids is to sit still quietly for long periods of time, listening to the teacher. And that kind of passive learning is very hard for boys.
The other thing is that it's not what you need to do to engage kids. We need kids who can apply what they've learned, who can demonstrate, command a mastery over what they learned. And that requires a more active classroom.
But a good teacher -- that the skill required to engage kids in those ways goes way up. And unfortunately, the easiest way to teach is the least effective way to learn.
SPITZER: One of most contentious issues out there obviously is teacher tenure. And there's been a big push, Michelle Rhee and others, get rid of teacher tenure.
Good idea, bad idea?
NOGUERA: Well, think the real issue is you don't want to make teaching an unattractive profession. OK? If -- one of the reasons why you need tenure is because you don't want principals making arbitrary decisions based on favoritism over who will keep their job and who won't.
At the same time, you don't want to make it too difficult to remove a teacher who shouldn't be in there.
PARKER: And one thing the Chinese are doing is they're having longer school days, they're making their children do homework for more hours. They even go to school on weekends.
NOGUERA: That's right.
PARKER: Is this a model we want to replicate?
NOGUERA: It is. You know we simply now -- we're short-changing our kids. If you look at some of the better schools, and I was at a school like this in San Antonio last week. A KIPP school. KIPP is a national model of schools. Knowledge is Power Program. An excellent school.
Those kids are in school every other Saturday. They have a longer day. They're there until 5:00. And they are outperforming kids throughout the state of Texas. And these are low-income, mostly Hispanic, recent immigrant kids. And they're thriving. SPITZER: But I'll tell you this, the KIPP academies across the nation are outperforming. And so do we finally have a model here that can be replicated? The key word these days is scale. Can you bring it to scale? Seems the KIPP academy has made the answer is yes.
NOGUERA: Absolutely. Because KIPPS are showing they can replicate that model.
SPITZER: That's right.
NOGUERA: What we are not showing -- this is where I think government should play a role -- is how to shine the light on these schools and bring educators from other schools in so they can see, this is what good teaching looks like. This is how they've organized themselves. And this is how it works.
SPITZER: Is Arne Duncan with "The Race to the Top" beginning to use his 4-plus billion dollars in a way that will bring it to scale and take that message and expand it out across all the school systems in the nation?
NOGUERA: Not sufficiently, I don't think. I think that what we need to do is shine the light -- there are lots of models out there. There's a great school in San Diego called High Tech High, which has got kids learning how to engage technology and it's doing extremely well.
Schools like this around the country need to become centers for excellence that all educators can learn from.
PARKER: Pedro Noguera, thanks so much for a fascinating conversation.
NOGUERA: Thank you. It's great to be here.
SPITZER: We'll be right back with John Lennon's greatest hits. Not his music, but his message. And according to our guest, that message is political. Stay tuned.
(BEGIN VIDEO CLIP)
SPITZER: What do you think he would be talking about and what would he stand be?
UNIDENTIFIED MALE: It's a great question because maybe we've been coming apart for the whole of the last 30 years in many different ways. I think he'd had a lot to say during the Reagan era had he not died at the beginning of it. But I think today he'd be a disappointed liberal as I am and as so many are in America.
(END OF VIDEO CLIP)
(COMMERCIAL BREAK)
PARKER: It was 30 years ago today that John Lennon was gunned down outside his apartment building in New York City right across the street from central Park. As part of the Beatles, some say Lennon was one half of the greatest songwriting team in history.
ELIOT SPITZER, HOST: Lennon's personal history famously married politics with pop music. An outspoken critic of the Vietnam War, his huge post-Beatle hit "Imagine" reflected his utopian world view.
(BEGIN VIDEO CLIP)
JOHN LENNON: Imagine all the people living life in peace.
(END VIDEO CLIP)
SPITZER: Joining us is Bob Guccione, Jr., co-founder of "Spin," a magazine of music and politics. Bob, thanks for joining us.
BOB GUCCIONE, JR., CO-FOUNDER, "SPIN" MAGAZINE: My pleasure. Thank you for having me.
PARKER: I, of course, remember where I was when John Lennon was shot. Do you remember where you were?
GUCCIONE: Yes, I do, actually. I was in New York City. And I was married at the time. And my wife and I were watching the news. And we saw it like everybody else did announced on the news. And I was supposed to meet him that week. I'd never met him. Of course, never did. But I was very good friends with Bob Gruen who took the iconic photographs of John around New York. And he had promised to introduce me. And for months I've badgered him and he said, well, actually this week, some day this week he's in town, we'll go up. So, you know, it was a particularly sad -- I never got the chance to meet the great man.
PARKER: Oh, yes. Well, you know, of course, when most of us, we think of him, we always think of him as a Beatle first. But then he was also a political figure. What was behind his politics?
GUCCIONE: Well, he was a tremendous liberal. You know, he was a working class Liverpoolian. And I grew up in England and I know where the working class is like. They never hold back. And he was not one to hold back. He was also an intellectual, which wasn't that rare, by the way, for the English working class. And so the two combined for a very strong political opinion. And, of course, he came of age in the height of the Vietnam War. The social fabric of the West really coming apart. Positively, by the way. I think culturally. But the old order that was resisting it. The new order were pulling it apart. And he was at the vanguard of that. And he recognized early on that his fantastic celebrity as a Beatle gave him a voice and gave him a platform and he quite, you know, well and responsibly took it. So I admired him greatly for that.
SPITZER: You know, Bob, let me ask you a very hard question. Try to fast forward through the years. Where would he be today on the political spectrum? In a way, our social fabric, some would say, is coming apart in a similar way.
GUCCIONE: Yes.
SPITZER: What do you think he would be talking about and what would his stand be?
GUCCIONE: It's a great question. Because today, he'd be a disappointed liberal as I am and as so many are in America that this administration is no different from the last one. I think he'd have a lot to say about that. But I also think he'd actually have faded by now into the background a bit. He'd be on the talk shows. He'd be having his say. I doubt he'd be making very many records anymore. But he -- I think he would be less remembered than we actually remember him because he was gunned down. I think he's become incredibly mythologized over the last 30 years disproportionately.
SPITZER: Fascinating. As people evolve over time, and I certainly kind of hope that you're exactly right. He would have stayed sort of the true liberal. But others even, you know, rock stars somehow become more conservative over time. You don't think that would have happened? There's something in his fabric, something in the sort of the texture of his being that would have kept him where he was?
GUCCIONE: One safe prediction I can make is nothing would have made him conservative. I don't think of it, you know.
PARKER: But don't you think that the political nature of music in the '60s and '70s when the boomers were around, and I'm in that group, you know, the big --
GUCCIONE: Me, too.
PARKER: It was the war primarily. And, of course, what made the war more horrible than it was was the draft. And I think, you know, if we had a draft today, we might have a -- do you think we'd have a more politically active musical world?
GUCCIONE: No doubt.
PARKER: Yes.
GUCCIONE: No doubt. Absolutely right. Because the draft impacts the generation making music. Yes, I think that's a big factor. I think you're right. But also, I think today music is much more co-opted. It's much more mainstream. It's must more corporate.
You know, at the time of Lennon and the Beatles and even post- Beatles, music was still a bit of a novelty. Rock and roll was still different. It was orally different and it was culturally different. Today, that's not just not possible. It's 50-something years old now.
SPITZER: Did you think he'd be excited you can now downloading Beatles songs on -- from iTunes right onto your iPad?
GUCCIONE: Yes, I think he'd be fascinated by technology. Apparently, he was always interested in technology. I think he'd be utterly fascinated. But we're talking about him as if he suddenly came back today after 30 years of being away like Austin powers.
SPITZER: We can only wish. GUCCIONE: You know, exactly. But I think had he been here the last 30 years, he would have faded somewhere into the wallpaper. A bit like Paul McCartney has. He has aged a bit gracefully and he had lots to say. But, you know, he would have also known that it was the time for a new generation. I think he would have voluntarily faded away a bit.
PARKER: Well, he would be 70 years old now. And as we all know as we grow older, we become less visible for some reason. I don't quite understand that. But --
GUCCIONE: Yes. We become like the Cheshire cat, we just fade.
PARKER: Thanks so much for being with us.
GUCCIONE: Yes.
SPITZER: Coming up, a discussion with the man who was arguably the biggest congressional thorn in the side of the Federal Reserve. Stay with us.
(BEGIN VIDEO CLIP)
REP. DARRELL ISSA (R), CALIFORNIA: This new tax deal adds no certainty to the market. It simply kicks the can down the road a very short period of time. We need people around the world to look at America as a place in which you can make long-term commitments and make a good return. Right now, our tax policy is anything but long term or predictable.
(END VIDEO CLIP)
SPITZER: Not many people question the Federal Reserve but our next guest certainly does. For years, Representative Darrell Issa of California has been the biggest thorn in the side of the Fed.
PARKER: As the soon-to-be Republican head of the Oversight and Government Reform Committee, Issa will have the power to call hearings and issue subpoenas in Congress. And his plan is to start with the fed.
Congressman Issa, welcome.
REP. DARRELL ISSA (R), CALIFORNIA: Thank you.
PARKER: So, let's start with the Fed. Nobody knew about this $9 trillion in loans until last week. I assume you were surprised along with everybody else. What do you plan to do?
ISSA: Well, what we plan to do is try to get additional ongoing transparency at the fed. Many of our letters and even Chairman Townsend's subpoenas have either been poorly or not answered at all. And that's not acceptable to Democrats or Republicans here on the Hill.
SPITZER: Congressman, I want to first congratulate you because of your persistence with the Fed. And I have long believed the Fed is the most important, least understood institution. Now I happen to think it does critically important stuff as well. But let's come back to the loans they made. Jeff Immelt, who is the chair and CEO of General Electric, sits on the board of the New York Fed. As has been most recently observed, GE was one of the big beneficiaries of the Fed's lending. He's also supposedly a public representative, not a banking representative. Is this a structure that makes sense to you? What do we have to do about it? What are we going to do to unravel these conflicts at the Fed?
ISSA: You know, when it comes to monetary policy, conflicts of interest are minimal because on monetary policy, we all benefit. But when you start getting into being essentially a banker of preference, as they were with GE, as they were in ordering AIG money spent and so on, then they start being -- it becomes necessary to be much more transparency and scrutiny. And quite frankly, as somebody in the body that is obligated to vote on every time we either spend money on behalf of the American people or obligate on behalf of the American people, I'm very uncomfortable finding out that there's $9 trillion of obligation without a single vote as to the details of it yet.
SPITZER: Another issue that is certainly hot these days is the tax deal or perhaps it's a deal that's unraveling. Who knows the agreement between the White House and the Republican leadership at least. Where do you stand on this -- this tax agreement, where, you know, essentially President Bush's tax policies were continued?
ISSA: You know, I'm always reticent to vote for any tax increase. But I'm also concerned that in this deal we're raiding the social security fund just at a time when people are realizing that it's starting to be depleted already. I'm also concerned that the extension of unemployment -- when is America going to say, look, if you're going to give additional unemployment, at least means test it? Right now, we give to people for 99 weeks even if their spouse is making $200,000 a year. At some point, we've got to begin finding cuts. If we're not beginning today, when will we begin?
SPITZER: You know, Congressman, if we are, in fact, entering as many people -- virtually everybody thinks we have to, a period where we have to be more exacting on how we spend government money, whether it is Medicare or Medicaid, could you apply that means testing concept where if you have income above a certain threshold, you simply don't qualify to other programs like Medicare, for instance?
ISSA: I believe that in time, social security, Medicare, all government programs, are going to ask the question of, do you actually need it? If you don't need it, then it's better for the economy and better, to be honest, for everybody, to take only if you need. Social security is a safety net, not a retirement program. Most people understand that, except the day after they retire. Then, of course, they're locked into a new program. For people my son's age, just 30, it's probably time that we start asking, couldn't we have it as a safety net and save an awful lot of dollars, rather than automatically saying it's supposed to be a retirement program? When, in fact, it's not sufficient for real retirement. PARKER: Congressman, you've expressed some great skepticism about the spending of the stimulus money and question whether there might be fraud and, certainly, waste. Are you planning to begin an investigation of the stimulus funds?
ISSA: We are going to continue looking at stimulus. We disagree with many of the places in which it was spent, how those expenditures may have been characterized, or, in fact, the fact that in some cases it was simply about keeping public employees working while the private sector was what was hurting. At the same time, I want to give credit. There have been some very innovative programs there. Some of which we'd like to spread government wide when it comes to tracking fraud. So I think, as we work on the stimulus, we're going to look for both the good to be expanded and the bad not to be repeated.
SPITZER: You know, Congressman, there seems to be an underlying tension right now between the desire to extend tax cuts, which, of course, are going to increase the deficit over the next decade substantially, versus the obligation to close that deficit, which was the conversation last week with the bipartisan commission. Where do you stand as a general matter?
ISSA: Well, the bipartisan report is not as they characterized it a three to one cut to spending. It's about a one to one. About $1 of increase in tax for every $1 in real cost savings. But having said that, at least it's a start.
The other thing that I disagree with the current deal. And I made it clear I'm not going to vote for a tax increase. But at the same time, this new tax deal adds no certainty to the market. It simply kicks the can down the road a very short period of time. We need people around the world to look at America as a place in which you can make long-term commitments and make a good return. Right now, our tax policy is anything but long term or predictable.
PARKER: Congressman Darrell Issa, thank you so much for being with us.
ISSA: You're most welcome. Thank you.
SPITZER: Up next, does anyone in Congress know how to add or subtract? When we come back, we'll ask "Our Political Party" to do some math.
(BEGIN VIDEO CLIP)
PARKER: Eliot Spitzer said that Barack Obama is king as President George III. He said he's just the continuation of George W. Bush's policies. What do you think?
VERONIQUE DE RUGY, ECONOMIST: Hey, I'm going to have to agree with you on this one. Actually, I've always said, you know, Obama is just Bush on steroids.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
SPITZER: Time for "Our Political Party." Let's meet tonight's guest. Max Kellerman is a CNN contributor and a boxing analyst. He's the host of HBO's "Face Off with Max Kellerman."
Do you box or you just critique?
MAX KELLERMAN, BOXING ANALYST, HBO SPORTS: I just talk.
SPITZER: All right.
KELLERMAN: Boxing, it looks a little tough.
PARKER: Here we have Veronique De Rugy. She's an economist who writes for Reason.com. And Steve Kornacki, one of our long-time guests. He's a political editor of Salon.com.
Welcome, everybody. In our opening arguments earlier tonight, Eliot Spitzer said that Barack Obama is king as President George III. He said he's just a continuation of George W. Bush's policies. What do you think?
VERONIQUE DE RUGY, ECONOMIST: Hey, I'm going to have to agree with you on this one. Actually I've always said, you know, Obama is just Bush on steroids. You know -- he's an even bigger spender. I mean, he has continued the war. He has actually -- our involvement in Afghanistan. He's really bad on civil liberties. So, yes, kind of the same. Worse maybe.
PARKER: Worse than President Bush.
KELLERMAN: No, I think from the left it's a little bit odd. That in the first place this idea that he doesn't have the vision or the leadership necessary to go make something happen, and so he's continually compromising. There's a black man who's president of the United States named Barack Hussein Obama. I find it difficult to believe that he and the people around him lack visionary leadership.
PARKER: Yes.
KELLERMAN: And just simply immediately compromise. Health care reform, for instance. Right? The public option. He negotiated himself -- with himself before he ever got to the table? No, it seems to me much more likely that they looked at it and said, we really are not going to get the votes so they passed health care without the public option.
SPITZER: I'll give you a shot and then I'll punch back, your boxing metaphor.
STEVE KORNACKI, POLITICAL EDITOR, SALON.COM: I understand what you're saying and I understand that some policies have continued. It's been dismaying some people on the left. And it's been dismaying some people on the right who thought that Bush kind of sold them out on spending issues. But when you look at it, you know, in the entire history of the United States, you know, national health care plan, you know, health care reform, had never made it through a single congressional committee under any president before Barack Obama. It's now law. And it's a flawed law. It's like laying the groundwork. You know, I've likened it to some of the civil rights legislation that preceded the big one in 1964. If you look at Obama's, you know, health care in that perspective, maybe this is like the Civil Rights Act in 1957. The most important thing was getting it done. It's the groundwork for the future.
DE RUGY: I mean, but Bush also let's not forget pushed a big gigantic prescription drug benefit.
KORNACKI: Sure.
DE RUGY: Big spending on entitlement too. So he's just -- it's just a continuation. Even worse.
SPITZER: And I would say something even more fundamental than that. Put Afghanistan aside and even put the Wall Street bailout aside. This tax agreement, which I think really for me was the straw that broke the camel's back. Twenty-five percent goes to the top one percent. If there's an issue that should motivate and should sort of be the orchestrating theme of what we do with our politics right now, it is resuscitating the middle class. And this is a policy in which he has said, we will give away so much to those who are wealthy and really not do nearly as much for the middle class as we need. The alternative was actually to fight and draw a line in the sand as he claimed throughout the campaign. And I'm not just talking about rhetoric. I'm talking about the president -- what it does is it actually changes the type of negotiation. We have a majority in both Houses. We actually have the votes. He did not --
KORNACKI: No, no, no, your majority in the Senate includes a guy like Ben Nelson --
SPITZER: Sure, it does.
KORNACKI: -- who represents the state of Nebraska and is up for reelection in 2012. Obama fights on this. Ben Nelson joins the Republicans.
SPITZER: No, no, this is an issue where he was not taken hostage, he volunteered to be taken hostage.
KELLERMAN: I think the left is so up in arms about the tax extension, cuts extension in particular because -- there's broad consensus, whether rightly or wrongly, that the Bush administration was a failure, was a failed presidency. And there are two prime drivers of that. One, war in Iraq under false pretenses. Two, huge deficit spending, from surplus to deficit spending. And the prime driver, the deficit spending other than the war in Iraq, was the tax cuts that weren't paid for.
PARKER: OK. I have to say something here.
KELLERMAN: So ideologically, the left gets up in arms when any kind of continuation of the Bush policy when -- PARKER: Iraq under mistaken premises. But let's just say this, what about this option? President Obama ran on a campaign of this is not a red America, not a blue America. We're all in this together. How about he's come toward the center and has built a compromise that is actually being heralded by such right wing radicals as Ezra Klein? Come on.
DE RUGY: I mean, let's not forget what this tax deal is. It's just not -- I mean, you hate that teeny part so much. But the rest is actually gigantic spending for the middle class and the low income people without, which is just continuing what we've seen in D.C. for the last 10 year. More spending without other spending cuts.
SPITZER: No, it's not a teeny part. What it is is the fundamental tradeoffs --
DE RUGY: $75 billion --
SPITZER: No, it's over 120. And more than that because what you really looking at is not only the top piece above 250 but also the estate tax. And then the big tradeoff that will come in January. And this is the part that is painful. Because what we forget is last week where suddenly the need for deficits to close the deficit and the cuts, which are going to come out of the very programs we need that are being defunded --
(CROSSTALK)
KELLERMAN: -- extension of unemployment benefits.
SPITZER: But you're negotiating -- that was going to happen anyway.
KORNACKI: You would have gotten a 13-month extension on the unemployment benefits with the Republican Congress taking over.
SPITZER: Absolutely, but not more than that. You would have gotten more than that.
(CROSSTALK)
KORNACKI: I find that hard to believe.
SPITZER: Of course, you get it, because you know why? What you do is you say. You peg it to unemployment rates and you say we will continue to do this. And we certainly don't disengage it from the tax cuts for the wealthy and give it a different tenure. The two years versus 13 months is a critical strategic error.
KORNACKI: The most fundamental thing that Republicans have understood since the moment Barack Obama took office is that when the unemployment rate is over, nine percent in Florida, 10 percent, people don't care much about logic, they want to blame the guy who's in charge. And if Obama gets into a message war over who's going to raise your taxes, already 80 percent of the country thinks Obama raised its taxes last year. He gave 95 percent of Americans a tax cut. People don't care about rationale thought right now. They want to blame --
DE RUGY: But he claimed more tax cuts were actually spending increased. Tax credit is completely different from tax cuts.
KORNACKI: Nobody even thinks they got tax credits.
PARKER: More fun with taxes in just a minute. But we've got to take a break and we'll be right back. Stay with us.
(COMMERCIAL BREAK)
JOE JOHNS, CNN SENIOR CORRESPONDENT: Hello, I'm Joe Johns. More of "PARKER SPITZER" in a moment. First, the latest.
Sarah Palin is blaming supporters of WikiLeaks for a cyber attack that briefly brought down her political action committee Web site. An anonymous network of hackers sympathetic to WikiLeaks has launched a series of attacks against critics of the whistle-blowing Web site. Palin has publicly blasted WikiLeaks founder Julian Assange.
Tonight on "360," late developments in the battle to repeal "Don't Ask, Don't Tell." Why some think the fight has taken a crucial turn.
That's the latest. "PARKER SPITZER" is back after this.
PARKER: Welcome back to "Our Political Party." As promised, more fun with taxes. Veronique, finish that thought for us.
DE RUGY: I was going to say, you know, about big income people who actually create a lot of the growth are not getting a free lunch here. First, the estate tax is 35 percent. It's not zero percent. Thirty-five percent. And also, remember, in the health care bill, they're going to get this three-point something percent on tax on earned income. They're already taxed plenty and they're going to be taxed plenty more.
SPITZER: Just so it's clear, 25 percent of the benefit of this goes to the top one percent. If 35 percent is a big drop from the 55 percent that it used to be and both of these were fundamentally --
DE RUGY: What you're calling benefits are just the fact that they're not going to pay more taxes -- you know, it's --
SPITZER: Veronique, marginal rates are almost at a historic low. It used to be in the 60s, 70s, 80s, 90s during the period of time where an economy was booming and growing --
DE RUGY: So you actually think that increasing taxes right now when the economy is actually doing really bad is a good idea.
SPITZER: No, but what you do need to do --
DE RUGY: It's a bad idea. I mean, actually, Barack Obama had actually -- I mean, he did the right thing. Now, he needs to keep this economy growing by lifting uncertainty, which is this tax deal just a little bit.
KELLERMAN: It does seem to me that the argument is basically from the left that the right moves rightward, insists on compromise. The left compromises and therefore the center moves rightward. And on many economic policy issues that does seem to be the case. On the other hand, on many social issues, the left seems to do the same thing to the right. For instance, "Don't Ask, Don't Tell," which was originally, hey, you don't have to get court-martialed. You know, just don't -- if you won't ask and you don't tell. And now the left is saying, no, no, not good enough, and it's continually moving left.
KORNACKI: I don't want to let this point go because I don't see this as a huge sellout, you know, on the part of the left to the right on this tax compromise this week. You could make the same argument -- I think, Veronique, you're starting to from the right. But this is the right selling out. There's $300 billion of stimulus in this.
DE RUGY: Actually I agree --
KORNACKI: There's a cut in the payroll tax.
DE RUGY: You're right. It's actually -- the Republicans are just doing what they've been doing the last 10 years. They're obsessed with their tax rates. And once they get that, they're, like, you can go and spend whatever you want.
SPITZER: Guys, I hate to do it. I promise we will give you another shot to come back and continue your point. Although you're wrong.
All right. Thanks to Max, Veronique and Steve. And thank you, all, for listening and watching. Be sure to join us tomorrow night.
PARKER: Good night from New York. "LARRY KING LIVE" starts right now.
