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TRANSCRIPT February 13, 2011 NEWS PROGRAM DAVID GREGORY DAVID GREGORY HOSTS NBC'S MEET THE PRESS - Part 1Roll Call, Inc. 1255 22nd Street N.W. Washington, D.C. 20037 Transcript/Programming: Tel. 301-731-1728 Sales: Tel. 202-419-8500 ext 599 sales@cqrollcall.com http://www.cqrollcall.com

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NBC'S MEET THE PRESS

FEBRUARY 13, 2011

SPEAKERS: DAVID GREGORY, HOST

RICHARD ENGEL, NBC NEWS

MARTIN INDYK, FORMER U.S. AMBASSADOR TO ISRAEL

ROBIN WRIGHT

REP. JOHN A. BOEHNER, R-OHIO, HOUSE SPEAKER GREGORY: Good morning. After 18 days, President Mubarak of Egypt is gone, in a revolution that sent shock waves around the world as they party in the streets. We will get the very latest this morning from Cairo with NBC's Richard Engel.

Plus insights here in Washington on what it all means for the rest of the Middle East with the former U.S. Ambassador to Israel Martin Indyk as well as former Middle East correspondent, Robin Wright.

First to Richard Engel who is in Cairo as he has been throughout the story. And Richard, first, Tahrir Square, which is the heartbeat of where this revolution has happened. There is an attempt I understand this morning, to get back to normal. How has that played out?

ENGEL: There were some people that were resisting this, the step to reopen Tahrir Square. The military police went in and briefly clashed with some of the demonstrators who don't want to leave the Square.

But in general, cars are now passing through Tahrir and -- and the situation across this country is one where Egyptians want to go back to work.

GREGORY: There is that sense, I've heard your reporting this morning, that everyone feels that taste of freedom and is protesting anew.

ENGEL: They certainly are. There is a wave of empowerment that people are feeling here. And there have been small demonstrations all across Cairo. Starting in the morning, doctors, lawyers, journalists, the police, who were used to crush the demonstrators were themselves out demonstrating today.

People said they just will not accept poor working conditions. They won't accept corruption. And they have seen that they can get empowerment through demonstrations. So they're -- there're going to be a lot more demonstrations in the days to come --

(CROSS TALK)

GREGORY: Richard with --

ENGEL: -- with people demanding their rights.

GREGORY: And Richard, we continue to look live at Tahrir Square as you've been reporting. The government in Egypt is the military in Egypt. And they are making some developments this morning. What are they?

ENGEL: Certainly we're getting our first sense of how this country is going to be administered during this transition period. The military just issued a statement. It was read by a news reader on state television. And the statement had some quite new developments in it.

It said that the Constitution is suspended, that the army is responsible for this country, particularly that military council, for the next six months; that the head of the military council, who is the defense minister, represents Egypt internally and externally. He's effectively appointing himself the leader of this country.

That parliament is canceled -- both Houses of parliament; that the council has the temporary right to issue orders -- like the orders it's issuing now and subsequent orders; that the Constitution, which has now been suspended, will be reformed; that the current Prime Minister, Ahmed Shafik will remain, and that new elections for the president and parliament will be held; and that Egypt is abiding by all of its international agreement.

So we're hear -- we're seeing now the first clear signs from the military saying it is firmly in charge and this is how it plans to run the country for a transition period.

GREGORY: All right, Richard Engel, thank you for your reporting throughout this.

Joining me here in the studio: Martin Indyk, former ambassador to Israeli and Middle East negotiator now head of foreign policy at the Brookings Institution; and Robin Wright, a veteran Middle East correspondent. Also the author of Dreams and Shadows: The Future of the Middle East .

Welcome to both of you.

Well Martin, here we are again, two weeks ago we were here. And if we go to our map, we see what has happened. We take it full from Tunisia to now in Egypt. In the space of just about three weeks, two leaders are gone. And over the weekend, the protests continue.

In Yemen, where the President Saleh has said, he will not run again, they were protesting in the streets. Saying they want more. They want more in the way of reform.

Also yesterday in Algiers in Algeria, additional demonstrations there.

This is a conversation that is going on throughout the Middle East, which leads to the obvious question -- as we look at these pictures, what is next? Where does it go next?

INDYK: Well these are absolutely amazing days, exhilarating days, particularly for the people of Egypt and -- and throughout the Arab world. You know, you had a little pharaoh in Tunisia that's gone and a big pharaoh in -- in Egypt that's gone. Where are the other pharaohs? You know, it's hard to say because the circumstances are different in so many places.

The Republican leaders like the leader of Yemen, like Moammar Gadhafi in Libya, perhaps Assad in Syria although his circumstance are different. They are the ones that -- that I think are going to be shaky. Maybe we need to look at Bahrain, where there's a large Shiite majority that can be stirred up.

But the king of Jordan is trying to get ahead of the -- the demands for change from his people. There's no doubt that this will have a powerful ripple effect across the -- the Arab world. And people everywhere will start demanding of their leaders greater political freedom --

(CROSS TALK)

GREGORY: Right.

INDYK: -- greater accountability.

GREGORY: And there is a -- there's a sense, Robin Wright, of they've accomplished this on their own. We look at the map here. Let -- I'm going to show you a -- the cover of The Week magazine this week, which is so interesting. An app for democracy, our social media undermining dictatorial regimes and as we did a couple of weeks ago, we can put tweet deck back up to really follow this conversation real- time of what's happening on the Internet.

And as you look at that on your screen, from the map to the conversation, as you can pull it up full and -- and look for our viewers, this conversation is real-time. And it's moving. The conversation keeps moving. How do you translate this conversation to a real democratic movement that leads to new leadership in a country like Egypt?

WRIGHT: Well, look, throughout the region, you have 100 million people; one-third of the whole Arab world that is between the ages of 15 and 29. The cyber generation has produced not just the ousters of Hosni Mubarak or the Tunisian president, but actually the transfer of power for the first time in 6,000 years, from elites to the majority of the people.

And now the challenge is how do these young people convert a street demonstration into political parties? And Egypt has actually been very interesting. Because you've seen a number of the young movements coalesce, come together, form a coalition and talk about what are their joint demands. How can they become a political party or a political force that can then define what comes next.

That's what's the -- is the most important thing to watch. Because they're also demanding and the revolution may not be over in Egypt, that they participate in the power-sharing. Now, that's not just the military.

GREGORY: Well, let me pick up on that, Martin, because there are also fears about this. Jeff Goldberg, the author and -- and writer with The Atlantic magazine who knows the region well posted this on his blog on Friday. I'll put it up on the screen for our viewers. The people for the moment seem to want the military. I don't think that desire will last , he writes. And because Mubarak spent 30 years marginalizing and banning secular parties and opposition movements, there's no obvious path towards representative democracy. I'm not overly worried for the moment in the possibility of the Muslim Brotherhood taking over but the fortunes of the Brothers could change quickly and dangerously. Egypt's crisis has just begun.

INDYK: Well, I don't think the military are going to let the Muslim Brotherhood take over and the Muslim Brotherhood know that and they're keeping their heads down, and saying basically they don't want to take over. The real question is, to Robin's point, is how will these youthful demonstrators who basically handled themselves in such a disciplined and effective way, move into the political space that's now been opened up.

And that dialogue between the leaders of the street and -- and now the leaders of the military, is going to determine the future of Egypt.

GREGORY: I've got about a minute left.

Robin, let's talk about another flash point in the region that the administration, and I know from talking to senior officials there, are paying a lot of attention to. We go back to our map and we highlight Iran because this is where a lot of the focus is right now.

You've seen as protests are planned in Iran, pro-democracy protests, the administration, the White House being quite critical of the Iranian regime. Saying they are on the defensive. What does it mean?

WRIGHT: Oh absolutely. And the irony is the Egyptian and the Iranian revolutions actually happened on the same day. Iran is trying to claim credit for all the political change taking place in the region. The irony is that its opposition, which in many ways defined people power in disputing of presidential elections in 2009 has called for demonstrations tomorrow, to try to challenge the regime.

And this is where the -- the tension in the Middle East between the old regimes, the elites, are playing out among -- against the people in the streets. And Iran is in many ways, the most interesting. It -- it introduced Islam as a political force and now you're seeing people saying we don't want this form of government any more. We want change as well.

And Iran, because of its nuclear program, is the most sensitive country for our long-term interests. And so Iran will be a place to watch in the next few weeks.

GREGORY: All right. We will leave it there for now. Thank you both very much for the perspective.

The events in Egypt are creating anxious moments in Washington, as leaders here consider how the shake-up in the Middle East affects vital interests in the region. From Egypt's support for U.S. counter terror policy, to its peace treaty with Israeli.

Republicans have raised doubts about the administration's stance against Mubarak.

(BEGIN VIDEOTAPE) RICK SANTORUM (R-PA), FORMER SENATOR: And I'm not suggesting that we shouldn't have sided with the protesters, but what message are we sending? To countries around the world, who are friends of ours? That when things get tough, we walk away.

GREGORY (voice-over): How should leaders in Washington encourage reforms throughout the Middle East, in light of what's happened in Egypt? And back home, President Obama hosted a trio of Republican leaders for a lunch at the White House Wednesday. The common theme -- finding some areas for potential compromise.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: It was a very good lunch and we were able to find enough common ground, I think, to show the American people that we're willing to work on their behalf and -- and willing to do it together.

GREGORY: But with the President's budget being released tomorrow, will both sides be able to work together on some issues, even as battle lines over spending and the deficit take center stage?

(END VIDEOTAPE)

GREGORY: Joining me now, the Speaker of the House, Representative John Boehner of Ohio. Mr. Speaker, welcome back to MEET THE PRESS.

BOEHNER: David, it's good to be with you.

GREGORY: I want to talk about Egypt, this is a developing story. And you heard Rick Santorum, a former senator, might run for president, voicing that view of some Republicans, that we were hasty here and that the United States walked away from a stalwart ally and we don't really know what the consequences will be.

Is that your view?

BOEHNER: Well Egypt has been a strong ally of the United States for the last 30 years. And this is clearly a very complex situation. But when people are crying out for freedom, when they're crying out for democracy, I think our country, has a responsibility to listen.

GREGORY: And do you think President Obama did it efficiently, effectively?

BOEHNER: I think they've handled what is a very difficult situation, about as well as it could be handled.

GREGORY: The question now is what happens next? Will the United States stand by Democratic movements sweeping the Middle East? And should we?

BOEHNER: I believe that we should always listen to those who are crying out for freedom, crying out for democracy. What we should not tolerate are those who want to push some radical ideology to take control of those governments. And I think that's the real concern of the administration and frankly, all of us on the Hill. GREGORY: And how do you deal with that? Is that what worries you about Egypt?

BOEHNER: Well, the conversations with the -- the opposition parties, those in the streets -- has been under way for weeks. Those conversations clearly are going to speed up, so that there can be some orderly transition to a Democratic re-elected government in Egypt.

GREGORY: What about democracy, there is no Arab democracy right now? What makes you think that Egypt could become the first?

BOEHNER: Just watch what's happened on the streets over the last 18 days. It was the -- it was the people. You know, I believe that freedom is a God-given right. And I believe that after all of these years, the people who have been oppressed, the people who have not had economic freedom had an -- had an opportunity for growth and finally had enough.

GREGORY: What about the intelligence community here in America? Are you satisfied with the job they've done in assessing the threat coming from this region? Assessing the turmoil in this region?

And do you think there are -- are problems with how they're going to assess it as we move forward?

BOEHNER: Well I think what happened in Egypt, what happened in Tunisia has surprised everyone, including our intelligence officials. And so I think there's going to have to be a reassessment of why, why, why -- why didn't we have a better feel for this.

GREGORY: You were disappointed?

BOEHNER: I -- I wouldn't say that. I was surprised. And I think they were surprised.

GREGORY: But is that a concern? In a post 9/11 world, that the intelligence community could be surprised about the shifting sands there?

BOEHNER: Again, this is a very complex situation. It happened very quickly. And it really gives you an idea of the impact of digital media today, not only here in the United States, but around the world.

GREGORY: Let me turn back home to the budget battles, something you've been right in the middle of as well, of course, this week. And take you back as we sequence this out to the pledge to America and the promise that you and other Republicans made in the course of the campaign.

This is what it said: We will roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to balance the budget and pay down the debt. Republicans assumed power in the house. And that was not actually what happened. You didn't reach that $100 billion threshold initially. And there were some real concerns among some of your new members, the Tea Party folks, other freshman conservatives. And these were some of the headlines that we've been seeing recently: Tea Party yanks GOP leash on spending cuts. The Financial Times , Republican leaders struggle to reign in conservative members.

Will you fulfill that pledge at $100 billion?

BOEHNER: We will. And while we believe we met our commitment that we made in the Pledge to America, I said there's no limit to the amount of money that our members want to cut. And I've also committed to what my colleagues that we ought to have an open process. And while we have instructed our appropriations committee to go meet that pledge, some of our members wanted more. Fine.

And this week, we were able to come successfully, to an agreement to cut $100 billion of spending from those seven months remaining in this fiscal year.

GREGORY: It's going to be painful, though. The New York Times editorialized this week in this way, Beyond reason in the budget, after two years of raging at Obama's spending plans, House Republican leaders have finally revealed their real vision of small government, tens of billions in ideologically-driven cuts to job training, environmental protection, disease control, crime protection, and dozens of other critical functions that only the government can perform.

In all, they want more than $32 million in cuts below current spending packed into the next seven months. They would be terribly damaging to a frail recovery and while spending reductions must be part of a long-term deficit control these are the wrong cuts to the wrong programs at the wrong time.

Is this too much in this economy?

BOEHNER: David, we're broke. What's really dangerous is if we continue to do nothing and allow the status quo to stay in place. When are we going to get serious about cutting spending? And our members want to take this leap forward, because it has to happen and it needs to start now.

GREGORY: But Mr. Speaker, if you were serious about cutting spending as you just said, wouldn't you deal with the biggest culprits in the budget? Because you're not doing that. It's all --

BOEHNER: Hold on.

(CROSSTALK)

GREGORY: You're not dealing with the military. You're not dealing with entitlements. You're dealing with a small portion, about 16 percent of the budget.

BOEHNER: This is the first step. And as I have said, there are many steps to follow. There are some defense spending cuts in this package. There are mandatory spending cuts that you'll see brought to the floor here in the coming weeks.

You'll see our budgets, where I've got to believe we're going to deal with the entitlements problem. The President asked us to increase the debt limit. And yet, he's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much, and taxing too much.

GREGORY: Let me stop you there. Because there's a few things you said, I'd like to follow up on each of them. First of all, I think it's important for everybody to recognize. When you're talking about spending cuts, you're talking about this fiscal year which ends in September, which is called a continuing resolution to fund the government. The budget is a separate battle which will go -- moving forward, just so we're clear on the terms.

But you met with the president this week. You talked about some areas of common ground. He's talking about making cuts in discretionary spending, freezing it at levels that would, he says, take $400 billion off the deficit in ten years.

Is there a collision course here as he talks about additional investment in the economy as well? Or are you seeing room for compromise on spending?

BOEHNER: It's time to cut spending. The president wants to freeze domestic discretionary spending at existing levels. This is after this -- this is after all of the money that's been spent over the last two years. Locking in that level of spending is way too much.

But I do think the voters last November made it clear that they want Washington to cut spending. And cutting spending will in fact help create a better environment for job creation in America.

This morning, I sent a letter to President Obama. Signed by 150 economists, that say that cutting spending now will help create a better environment so that we can begin to create jobs in our country. This is a critically important step, if we're going to end the uncertainty and start to give investors and small business people the confidence to invest in our economy.

I used to be a small businessman. I understand that when you have all this uncertainty, you don't invest. If people begin to see us rein in out-of-control spending it will bring more confidence to business and investors around the country and then we'll begin to see better job creation in the country.

GREGORY: You talk about the debt limit that has to be raised according to the administration and that vote will take place. You say, We're not going to vote for that unless there are specific spending cuts we get in response. If there is not a compromise on this, would you rule out a government shutdown as an appropriate response?

BOEHNER: David, our goal here is to reduce spending. Our goal is not to shut down the government. And I'm hopeful -- GREGORY: But would you rule it out?

BOEHNER: I would hope that the Senate and the White House heard the same thing I heard from the American people in last November's election. It's time to cut spending.

GREGORY: Very precise question -- would you rule out government shutdown, if you can't see eye to eye.

BOEHNER: Our goal is to reduce spending, it is not to shut down the government.

GREGORY: On entitlements like social security, you said the retirement age should be raised. But you said you don't want to get into negotiating how that happens just now until the problem is better defined.

Again, when it comes to leadership, when it comes to the need to you know, have no limit on cutting, don't you think Americans understand what the problem with social security is? What will it take for you to join with the White House to make real reform, to deal with this piece of the budget?

BOEHNER: David, you may understand how big the problem is I may understand how big it is. But most Americans have not been presented with just how big is the problem. And it's social security, it's Medicare, it's Medicaid. And I think it's incumbent on the leaders in Washington, those of us to go out and help the American people understand how big the problem is. Once the American people begin to get their arms around the size of the problem, then and only then should we begin to lay out an array of possible solutions to have that conversation.

GREGORY: I want to ask you about housing policy. This administration this week said ultimately the big government agencies, Fannie Mae and Freddie Mac which guarantee 90 percent of the mortgages in this country should be phased out of existence. Do you think it's realistic for the government to get out of the housing market?

BOEHNER: I think the government needs to get out of the housing market. When you look at the bailout, and the bailout, we've already spent $150 billion and will spend at least that much more bailing out Fannie Mae and Freddie Mac. The President and the Obama administration laid out some options on how to go forward. We all know what the options are. It's time to get serious about a plan to phase out Fannie and Freddie. Return them to the private sector.

GREGORY: Who fills the gap? They prop up 90 percent of the mortgages in this country. Who fills the gap? There's no money out there to guarantee those mortgages.

BOEHNER: They can do this as private companies. They don't need to have this implicit federal government guarantee.

GREGORY: You're willing to suffer the potential consequences, which is further cratering the housing market if you privatize these companies?

BOEHNER: The gap that's out there will be filled. Remember, the federal government started to build these organizations 40 and 50 years ago to collateralize mortgages, in order to make mortgages more available. This is before the private sector had the ability to do it. The private sector can do this today. And Fannie and Freddie know how to do it. They can do it as private companies.

GREGORY: But the government has got to be there today, you would concede that, given the fragility of the housing market, the federal government has to be there to back stop it?

BOEHNER: Because the federal government failed in its obligations to have these institutions be sound, we're on the hook. And we're on the hook now for $153 billion. It will be well over $300 billion before we're out of it. But it's time to begin to transition to this activity, to the private sector.

GREGORY: All right. We're going it take a break here, we'll come back, more with speaker Boehner right after this.

(COMMERCIAL BREAK)

GREGORY: Coming up, more of my exclusive interview with House Speaker John Boehner after this brief commercial break.

(COMMERCIAL BREAK)

GREGORY: Back now with more from Speaker of the House Boehner. Mr. Speaker, I want to pick up on something that my colleague, Brian Williams, asked you about last -- this January, last month.

He asked if you were willing to take on some members of your caucus who don't believe that the President was actually born in the United States. And this was a portion of your answer. I want to play it.

BOEHNER: We're nothing more than a slice of America. People come, regardless of party labels; they come with all kinds of beliefs and ideas. It's the melting pot of America. It's not up to me to tell them what to think.

And indeed, members of congress speak publicly and are outspoken and will say what their views are. Sometimes they have an effect on what people believe around the country. There was something that caught my eye this week that was on Fox News on the Hannity program. A focus group with voters in Iowa led by Frank Luntz, he had this exchange with them. I want to show it to you.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I believe that Barack Obama's religious beliefs do govern his foreign policy.

UNIDENTIFIED MALE: And what are his religious beliefs?

UNIDENTIFIED FEMALE: I believe that he is a Muslim.

UNIDENTIFIED MALE: You do. How many of you believe that here? Wow. You believe he's a Muslim?

UNIDENTIFIED MALE: Yes.

(END VIDEO CLIP)

GREGORY: As the Speaker of the House, as the leader, do you not think it's your responsibility to stand up to that kind of ignorance?

BOEHNER: David, it's not my job to tell the American people what to think. Our job in Washington is to listen to the American people. Having said that, the state of Hawaii has said that he was born there; that's good enough for me. The president says he's a Christian. I accept him at his word.

GREGORY: But isn't that a little bit fast and loose? I mean, you are the leader in Congress and you're not standing up to obvious facts and saying these are facts. If you don't believe that, it's nonsense.