PBS NewsHour; January 26, 2012 3:18pm-4:00pm PST

MAE AND FREDDIE MAC, WHILE HE TRIES TO THINK THE REST OF US ARE TOO STUPID TO PUT THE DOTS TOGETHER TO UNDERSTAND WHAT THIS IS ALL ABOUT. ( CHEERS AND APPLAUSE )

>> Warner: BUT CAMPAIGNING IN JACKSONVILLE, ROMNEY SAID AGAIN THAT FORMER HOUSE SPEAKER GINGRICH BRINGS ALL THE BAGGAGE OF A WASHINGTON INSIDER.

>> IF YOU THINK THAT YOU REALLY NEED SOMEONE WHO HAS BEEN PART OF THE CULTURE OF WASHINGTON FOR THE LAST 35 YEARS TO GO THERE AGAIN AND CONTINUE IN WASHINGTON. WHY? THERE ARE OTHER PEOPLE YOU CAN CHOOSE. BUT IF YOU WANT SOMEONE WHO HAS ACTUALLY RUN A BUSINESS, RUN TWO BUSINESSES, HELPED RUN AN OLYMPICS AND HELPED RUN A STATE- - WHO HASN'T LIVED IN WASHINGTON BUT IS INTENT ON CHANGING WASHINGTON AND MAKING IT WORK FOR THE AMERICAN PEOPLE -- THEN I'M THE PERSON TO VOTE FOR ON TUESDAY. ( APPLAUSE )

>> Warner: THE SHARPENED TONE REFLECTED THE TIGHT RACE. A CNN-"TIME" MAGAZINE POLL ON WEDNESDAY FOUND ROMNEY WITH A NARROW LEAD-- 36% TO 34%. THAT WAS WITHIN THE MARGIN OF ERROR. MEANWHILE, FORMER PENNSYLVANIA SENATOR RICK SANTORUM, SEEMS TO BE RUNNING A DISTANT THIRD. IN TALLAHASSEE, HE URGED VOTERS TO CONSIDER TEMPERAMENT AND CHARACTER.

>> NOT JUST WHAT THEY SAY THEY'RE FOR-- BECAUSE A LOT OF THEM SAY, "OH I'M FOR THIS AND THIS AND THIS" AND THEN YOU FIND OUT HOW DISAPPOINTED YOU ARE, BECAUSE YOU DON'T KNOW WHAT'S HERE. YOU DON'T KNOW WHAT'S UP HERE.

>> Warner: TEXAS CONGRESSMAN RON PAUL WAS LARGELY SKIPPING THE FLORIDA CONTEST. BUT HE PLANNED TO JOIN HIS RIVALS TONIGHT IN JACKSONVILLE FOR THEIR FINAL DEBATE AHEAD OF TUESDAY'S PRIMARY. AND JOINING US NOW FROM JACKSONVILLE IS OUR OWN JUDY WOODRUFF. HI, JUDY.

>> Woodruff: HI, MARGARET, FROM JACKSONVILLE LVILLE, YES.

>> Warner: SO YOU HAVE BEEN THERE A COUPLE DAYS NOW. WHAT'S THE DYNAMIC? IS IT AS NASTY AS IT SOUNDS?

>> Woodruff: I WAS JUST THINKING MARGARET, THIS IS A STATE OF OVER 11 MILLION PEOPLE AND IT'S A STATE THAT'S USED TO BEING IN THE NATIONAL POLITICAL SPOTLIGHT SO I'M CONFIDENT THERE'S A HUGE SWATH OF FLORIDIANS WHO ARE NOT PAYING MUCH ATTENTION TO THIS CAMPAIGN. BUT THE FOLKS WHO ARE-- THE REPUBLICANS, THE INDEPENDENTS, NO DOUBT, AND EVEN THE DEMOCRATS IN THIS STATE, BECAUSE THEY KNOW WHAT HAPPENS IN FLORIDA WILL HAVE BEARING ON WHAT HAPPENS ON THE GENERAL ELECTION-- THEY ARE PAYING ATTENTION. TO THIS DATE, MARGARET, THERE HAVE BEEN OVER 400,000 EARLY BALLOTS MAILED IN. THAT'S CLOSE TO THE NUMBER TOTAL OF REPUBLICANS WHO VOTED IN THE SOUTH CAROLINA PRIMARY. SO VOTERS ARE PAYING ATTENTION AND, AS YOU JUST HEARD FROM THE CANDIDATES, IT'S GETTING HOT. NEWT GINGRICH ROLLED INTO FLORIDA WITH A HEAD OF STEAM HAVING WON IN SOUTH CAROLINA AND EXPECT HIM TO TAKE ADVANTAGE OF THAT. BUT THE ROMNEY CAMP HAS BEEN FOREWARNED AND THEY CAME INTO FLORIDA READY TO SPEND BIG BUCKS TO GET THE MESSAGE OUT THAT THEY'RE NOT GOING TO BE WALKED OVER. SO YOU'RE SEEING NOT JUST THIS KIND OF LANGUAGE ON THE STUMP, YOU'RE SEEING TELEVISION ADS AND A LOT OF MONEY PUT INTO TELEVISION IN TEN EXPENSIVE MEDIA MARKETS ACROSS FLORIDA TO GET THEIR POINTS ACROSS.

>> Warner: IS THIS A NEW PERSONAL TONE FROM ROMNEY AND HOW DO HIS PEOPLE EXPLAIN IT?

>> Woodruff: WELL, WHAT THEY SAY IS THAT, YOU KNOW, THIS IS A DO-OR-DIE STATE AND THOSE ARE MY WORDS BUT FOR THEM THEY CANNOT LOSE FLORIDA. THIS IS THE BIGGEST STATE TO VOTE SO FAR, IT'S A SWING STATE, REPUBLICANS FEEL THEY NEED TO WIN THIS STATE IN THE CONNECTION. MITT ROMNEY WANTS TO WIN THE STATE OF FLORIDA, ESPECIALLY COMING OFF THAT EMBARRASSING LOSS IN SOUTH CAROLINA. SO, HENCE, TODAY HE WAS ACTUALLY CAREFUL. HE DIDN'T CALL NEWT GINGRICH OUT BY NAME TODAY BUT I WILL TELL YOU THE E-MAILS ROLLING OUT ALMOST HOURLY FROM THE ROMNEY CAMPAIGN, I WROTE SOME OF THEM DOWN, THEY TALK ABOUT DR. NEWT AND MR. HYDE. WHAT THEY CALL THE TWO SIDES OF NEWT GINGRICH. NOT ONE BUT TWO FORMER REPUBLICAN PRESIDENTIAL NOMINEES HAVE NOW GONE OUT AS SURROGATES. IT WAS JOHN McCAIN ON THE CAMPAIGN TRAIL STANDING IN FOR MITT ROMNEY. TODAY BOB DOLE PUT OUT A STATEMENT SAYING NEWT GINGRICH WAS SOMEBODY WHO LIKED TO GO IT ALONE, WHOSE ATTITUDE WAS MY WAY OR THE HIGHWAY. AND THEY'RE ROLLING OUT MEMBERS OF CONGRESS. IT'S AS IF THEY ROLLED OUT ALL THE HEAVY AMMUNITION BECAUSE THEY DON'T BELIEVE THEY CAN AFFORD TO LOSE THIS STATE. IT'S NOT TO SAY MITT ROMNEY WOULDN'T GO ON, HE CERTAINLY WOULD, HE'S GOT THE MONEY, THE STAYING POWER, HE'S MADE IT VERY CLEAR THIS IS GOING TO BE A LONG SLOG TO THE NOMINATION WHICH THEY ARE STILL CONFIDENT THEY WILL EVENTUALLY GET BUT THEY SHOWER WOULD LIKE TO PUT IT AWAY... TO PUT AWAY FLORIDA.

>> Warner: HOW ELSE IS IT DIFFERENT IN THIS SORT OF REPUBLICAN UNIVERSE? HOW'S THE ELECTORATE DIFFERENT FROM THE EVENTS YOU'VE GONE TO WHAT DO THE VOTERS SEEM TO CARE ABOUT MOST?

>> WELL, IN TERMS OF DIFFERENCE, 400,000 REPUBLICANS GIVE OR TAKE VOTED IN SOUTH CAROLINA. THEY THERE WILL BE SOMETHING LIKE TWO MILLION OR MORE REPUBLICANS WHO WILL VOTE. THIS IS WHAT'S CALLED A CLOSE PRIMARY. ONLY REPUBLICANS CAN VOTE HERE. TWO MILLION OF THEM, 10% OR MORE ARE HISPANIC AND THAT'S OF CUBAN BACKGROUND, PUERTO RICAN BACKGROUND AND MANY OTHER LATIN AMERICAN NATIONALITIES. THEY REFLECT A BROAD SWATH OF AN ECONOMY FROM RURAL TO SUBURBAN TO URBAN. THEY RUN THE GAMUT FROM SOUTH FLORIDA, MANY REPUBLICANS WHO'VE COME DOWN HERE FROM THE NORTH TO RETIRE TO THE MIDDLE OF FLORIDA, THE VERY FAMOUS I-4 CORRIDOR, ORLANDO TO TAMPA, TO NORTH FLORIDA, THE MORE SOCIALLY CONSERVATIVE REPUBLICANS WHO LIVE IN THE PANHANDLE. SO IT'S DIVERSE IN A NUMBER OF WAYS. AND WHAT ARE WE HEARING FROM THE VOTERS? WHAT THEY'RE SAYING IS... WELL, IT DEPENDS ON WHICH VOTERS YOU TALK TO. AT THE GINGRICH EVENT THEY TEND TO BE MORE PASSIONATE, MORE ENTHUSIASTIC. AT THE GINGRICH EVENT IN COCOA BEACH LAST NIGHT THE SO-CALLED SPACE COAST WHERE A LOT OF PEOPLE HAVE LOST THEIR JOBS IN THE NASA CUTBACKS, GINGRICH PLAYED RIGHT INTO THEIR HANDS, TALKED ABOUT BY THE END OF HIS SECOND TERM IN OFFICE THERE WILL BE A COLONY ON THE MOON AND IT WILL BE AN AMERICAN COLONY. SO THEIR REACTION TO NEWT GINGRICH IS HE'S OUR GUY, HE'LL TAKE THE FIGHT TO PRESIDENT OBAMA, WE WANT OBAMA OUT OF OFFICE. THIS MORNING I WAS AT A ROMNEY EVENT, A MORE SEDATE, IF YOU WILL, POLITE CROWD. NOT AS ENERGETIC AS THE GINGRICH CROWD BUT PRETTY DETERMINED. MANY OF THEM SEEMED TO COME FROM A BUSINESS BACKGROUND. THEY LOOK AT NEWT GINGRICH AND SAY HE'S TOO VOLATILE. I HAD ONE WOMAN TELL US HE'S TOO UNDISCIPLINED. I LIKE ROMNEY BECAUSE HE'S WHAT'S GOT BUSINESS EXPERIENCE AND CAN GET THE COUNTRY BACK ON TRACK.

>> Warner: BRIEFLY BEFORE WE GO, WHAT WILL PEOPLE BE LOOKING FOR FOR TONIGHT'S DEBATE?

>> Woodruff: THESE CANDIDATES, BOTH OF THEM KNOW THEY NEED TO DO WELL TONIGHT. THERE WILL BE FOUR ON STAGE, RICK SANTORUM IS STILL COMPETING HERE IN FLORIDA, IT'S A TOUGH STATE FOR HIM RON PAUL WILL BE THERE ALTHOUGH HE'S NOT CAMPAIGNING IN FLORIDA. YOU WILL SEE A MORE ACTIVE AUDIENCE INVOLVEMENT THAN WHAT WE SAW EARLIER THIS WEEK. CNN HAS ALREADY SAID THEY'RE GOING TO BE CALLING ON REPUBLICANS IN THE AUDIENCE TO ASK QUESTIONS. THEY'LL BE TAKING QUESTIONS FROM THE SOCIAL MEDIA, IF FROM TWITTER AND FACEBOOK. I THINK YOU CAN LOOK FOR A LIVELIER ATMOSPHERE TONIGHT THAN WHAT WE SAW ON MONDAY NIGHT AND THAT MAY GIVE AN ADVANTAGE TO NEWT GINGRICH BUT WE KNOW MITT ROMNEY'S ON GUARD. SO WE'LL SEE. EVERYBODY PAYING ANY KIND OF ATTENTION TO THIS CONTEST WILL BE WATCHING TONIGHT.

>> Woodruff: THANKS, JUDY, LOOK FORWARD TO YOUR REPORTS AND HAVE A GOOD TIME TONIGHT.

>> Woodruff: THANK YOU, SEE YOU TOMORROW.

>> Brown: WHILE REPUBLICANS FIGHT IT OUT IN FLORIDA, PRESIDENT OBAMA IS, FOR NOW, WAGING HIS CAMPAIGN AGAINST CONGRESS AND THE STALEMATE IN WASHINGTON. "NEWSHOUR" CONGRESSIONAL CORRESPONDENT KWAME HOLMAN REPORTS.

>> Reporter: IT'S A THEME PRESIDENT OBAMA HITS IN NEARLY EVERY APPEARANCE THESE DAYS-- URGING CONGRESS TO ACT, AS HE DID TODAY IN LAS VEGAS.

>> YOUR VOICES CONVINCED CONGRESS TO EXTEND THIS MIDDLE CLASS TAX CUT BEFORE, I NEED YOUR HELP TO MAKE SURE THEY DO IT AGAIN. NO DRAMA, NO DELAY. LET'S JUST GET THIS DONE.

>> Reporter: IN FACT, CRITICIZING THE INACTION OF CONGRESS HAS BECOME A KEY PART OF THE OBAMA RE-ELECTION STRATEGY. HE FIRST LAID OUT THE THEME LAST OCTOBER, PUSHING HIS JOBS BILL.

>> THE QUESTION THEN IS, WILL CONGRESS DO SOMETHING? IF CONGRESS DOES SOMETHING, THEN I CAN'T RUN AGAINST A DO- NOTHING CONGRESS. IF CONGRESS DOES NOTHING, THEN IT'S NOT A MATTER OF ME RUNNING AGAINST THEM. I THINK THE AMERICAN PEOPLE WILL RUN THEM OUT OF TOWN BECAUSE THEY ARE FRUSTRATED, AND THEY KNOW WE NEED TO DO SOMETHING BIG AND SOMETHING BOLD.

>> Reporter: THE CONFRONTATION PITS THE PRESIDENT SQUARELY AGAINST REPUBLICANS, WHO NOW CONTROL THE HOUSE AND HAVE THE VOTES TO BLOCK HIS PROPOSALS IN THE SENATE. THEY WENT TOE TO TOE WITH MR. OBAMA LAST SUMMER OVER RAISING THE FEDERAL DEBT CEILING. AND LATER, OVER EXTENDING THE PAYROLL TAX BREAK AND LONG-TERM UNEMPLOYMENT BENEFITS. THOSE MEASURES PASSED, BUT MUCH OF THE REST OF THE PRESIDENT'S AGENDA HAS LANGUISHED. AND THE BATTLES HAVE TAKEN A TOLL ON CONGRESS' PUBLIC APPROVAL RATING. IT STOOD AT JUST 13% IN A RECENT "NEW YORK TIMES"-CBS NEWS POLL. THE SENATE'S DEMOCRATIC MAJORITY LEADER HARRY REID SAYS IT IS NO SURPRISE.

>> I UNDERSTAND WHY THE AMERICAN PEOPLE LOOK AT CONGRESS AND SHAKE THEIR HEAD, WHAT IS THIS ALL ABOUT, BECAUSE WE HAVE NOT BEEN ABLE TO ACCOMPLISH THINGS THE AMERICAN PEOPLE THINK THEY NEED AND DESERVE AND WE CAN'T DO IT BECAUSE THIS HAS BEEN THE MOST OBSTRUCTIVE YEAR OF CONGRESS THAT I CAN IMAGINE AND I'VE BEEN IN A LOT OF CONGRESSES.

>> Reporter: BUT THE LEADER OF THE SENATE'S POWERFUL MINORITY REPUBLICAN MITCH McCONNELL ARGUES THE CONGRESS IS NOT SOLELY TO BLAME.

>> RONALD REAGAN AND BILL CLINTON WERE CONFRONTED WITH THE SAME SITUATION WHERE THEY HAD A CONGRESS THAT WOULDN'T GIVE THEM EVERYTHING THEY WANTED AND THEY MANAGED TO LEAD AND TO REACH AGREEMENTS AND TO BE SUCCESSFUL. THIS PRESIDENT HAS CHOSEN TO PLAY THE BLAME GAME.

>> Reporter: WITH AN ELECTION COMING UP AND RELATIONS BETWEEN THE TWO ENDS OF PENNSYLVANIA AVENUE AS STRAINED AS EVER, PRESIDENT OBAMA APPEARS TO BE BORROWING SOME LANGUAGE FROM ANOTHER DEMOCRAT IN AN ERA OF DIVIDED GOVERNMENT. NORMAN ORNSTEIN IS WITH THE AMERICAN ENTERPRISE INSTITUTE, A CONSERVATIVE THINK TANK IN WASHINGTON.

>> THE PHRASE DO-NOTHING CONGRESS WAS COINED BY HARRY TRUMAN IN 1948. HE RAN AGAINST THE FAMOUS 80TH CONGRESS, FAMOUS BECAUSE IT WAS THE DO-NOTHING REPUBLICAN CONGRESS. THE IRONY IN 1948 IS THE 80th CONGRESS WAS ACTUALLY AN EXTRAORDINARILY PRODUCTIVE AND MEANINGFUL CONGRESS. THE 80th DO-NOTHING CONGRESS GAVE US THE MARSHALL PLAN WHICH TRANSFORMED THE WORLD FOR HALF A CENTURY. AS SENATE DEMOCRATIC LEADER REID SEES IT, THE PROBLEM OF INACTION STANDS OUT CLEARLY WHEN THIS CONGRESS IS COMPARED TO THE LAST ONE IN WHICH DEMOCRATS CONTROLLED BOTH CHAMBERS.

>> WE HAD THE MOST PRODUCTIVE CONGRESS IN THE HISTORY OF THE COUNTRY, SOME SAY ONLY THE MOST PRODUCTIVE IN THE LAST 75 YEARS, BUT A VERY PRODUCTIVE CONGRESS THE LAST CONGRESS.

>> Reporter: THAT CONGRESS-- THE 111th-- PASSED 383 BILLS THAT WERE SIGNED BY THE PRESIDENT, INCLUDING THE ECONOMIC STIMULUS, AND BOTH HEALTH CARE AND WALL STREET REFORMS. THE FIRST SESSION OF THE 112th CONGRESS, WHICH BEGAN A YEAR AGO, HAS ENACTED 90 LAWS SO FAR. MOSTLY HOUSEKEEPING MEASURES-- EXTENDING CURRENT LAWS AND NAMING FEDERAL BUILDINGS. OVER THE WEEKEND THE REPUBLICAN SPEAKER OF THE HOUSE JOHN BOEHNER STOOD BY THOSE NUMBERS, ON "FOX NEWS SUNDAY."

>> IS THE MEASURE OF THE JOB THE CONGRESS DOES THE MEASURE OF THE LAWS THAT WE PASSED?

>> IT'S A MEASURE.

>> NO, IT IS. MOST AMERICANS THINK WE'VE GOT TOO MANY LAWS ALREADY.

>> Reporter: AND INDIANA GOVERNOR MITCH DANIELS-- GIVING THE RESPONSE TO THE STATE OF THE UNION ADDRESS-- SAID HOUSE REPUBLICANS IN PARTICULAR HAVE TRIED TO DO MORE, ONLY TO BE STONEWALLED.

>> THEY AND THEY ALONE HAVE PASSED BILLS TO REDUCE BORROWING, REFORM ENTITLEMENTS AND ENCOURAGE NEW JOB CREATION, ONLY TO BE TO BE SHOT DOWN TIME AND TIME AGAIN BY THE PRESIDENT AND HIS DEMOCRATIC SENATE ALLIES.

>> Reporter: PRESIDENT OBAMA HAS RUN AGAINST CONGRESS BEFORE. DURING THE 2010 MID-TERM ELECTIONS, HE CONSISTENTLY CITED WHAT HE CALLED REPUBLICAN OBSTRUCTIONISM.

>> HERE YOU GOT FOLKS DRIVING THE CAR IN THE DITCH AND THEN WE'RE OUT THERE IN THE MUD, TRYING TO GET THE CAR OUT OF THE DITCH AND THEY ARE SITTING THERE COMFORTABLE, DRINKING ON A SLURPEE OR SOMETHING. SO THEN WE FINALLY GET THE CAR OUT OF THE DITCH, AND THEY WANT THE KEYS BACK AND SAY, NO, YOU CAN'T HAVE THE KEYS.

>> Reporter: AMERICAN VOTERS SAW IT DIFFERENTLY AND HANDED THE KEYS TO REPUBLICANS. AGAIN, THE AEI'S ORNSTEIN:

>> WHAT THE REPUBLICANS TOOK OUT OF THEIR MASSIVE VICTORY AND IT WAS A MASSIVE VICTORY WAS NOW WE SHOULD UNITE EVEN MORE, STOP OBAMA IN HIS TRACKS AND REVERSE ALL OF THE POLICIES ENACTED IN HIS FIRST TWO YEARS.

>> Reporter: BUT ORNSTEIN SAYS THIS TIME, CAMPAIGNING AGAINST CONGRESS MAY INDUCE REPUBLICAN LEADERS TO SWITCH TACKS.

>> IRONICALLY, AS OBAMA RATCHETS UP THE RHETORIC AND THE HEAT AND USES WHAT IS A POWERFUL PRESIDENTIAL BULLY PULPIT TO SAY, IT'S THEIR FAULT IF THEY DON'T GO ALONG THAT MAY INCREASE THE CHANCES THAT YOU'LL GET SOME MORE DEALS. MITCH McCONNELL IN THE END IS NOT SOME CRAZY, NUTCASE RIGHT- WING IDEOLOGUE. MORE THAN ANYTHING ELSE HE IS A TOUGH-MINDED CONSERVATIVE PRAGMATIST WHO WANTS TO WIN AND MORE IMPORTANT, DOESN'T WANT TO LOSE.

>> Reporter: PUBLICLY, AT LEAST, THE SENATE MINORITY LEADER SAYS THE ONUS IS ON THE PRESIDENT TO SHOW THINGS CAN WORK IN WASHINGTON.

>> WELL WE'VE CERTAINLY HAD, AS I INDICATED EARLIER, LOST OPPORTUNITIES IN 2011. OPPORTUNITIES THE PRESIDENT HAD TO LEAD, THAT WOULD HAVE MADE HIM LOOK BETTER. HE DOESN'T LOOK ALL THAT GOOD EITHER. CONGRESS AS AN INSTITUTION IS NOT GOING TO BE ON THE BALLOT, HE IS.

>> Reporter: AND WITH THAT IN MIND, THE PRESIDENT IS VISITING A SERIES OF BATTLEGROUND STATES THIS WEEK, INCLUDING COLORADO, WHERE VOTERS SUCH AS THESE HAVE A DECIDEDLY JAUNDICED VIEW OF THE NATIONAL LEGISLATURE.

>> YOU CAN GET RID OF THE PEOPLE THAT AREN'T GETTING ANYTHING DONE AND REPLACE THEM WITH NEW PEOPLE WHO WONT GET ANYTHING DONE. I DON'T KNOW HOW YOU CAN FIX IT.

>> I BLAME BOTH REPUBLICANS AND DEMS. I HAPPEN TO BE A DEMOCRAT. BUT I'M AS UNHAPPY WITH THE DEMS AS I AM THE REPUBLICANS.

>> Reporter: THE PRESIDENT WILL TAKE HIS CRITIQUE OF CONGRESS ON THE ROAD AGAIN TOMORROW IN ANOTHER KEY STATE, MICHIGAN.

>> Warner: NOW, THE PROSPECTS FOR CREATING A MORE ROBUST MANUFACTURING SECTOR IN THE U.S. IT'S A THEME BOTH PRESIDENT OBAMA AND REPUBLICAN CANDIDATES ARE SOUNDING THIS WEEK AS THEY TALK ABOUT REVIVING A STRONGER ECONOMY. RAY SUAREZ EXPLORES THE CHALLENGES AHEAD, BEGINNING WITH SOME BACKGROUND.

>> Suarez: A CONVEYOR-BELT MANUFACTURING PLANT IN CEDAR RAPIDS, IOWA YESTERDAY WAS PRESIDENT OBAMA'S FIRST STOP ON A THREE-DAY TOUR. A MAJOR PART OF HIS ECONOMIC MESSAGE: THE U.S. NEEDS A RENEWED COMMITMENT TO MANUFACTURING.

>> WE'RE GOING TO KEEP BOOSTING AMERICAN MANUFACTURING. WE'RE GOING TO KEEP TRAINING WORKERS WITH THE SKILLS THEY NEED TO FIND THESE JOBS. WE'RE GOING TO KEEP CREATING NEW JOBS IN AMERICAN ENERGY, INCLUDING ALTERNATIVE ENERGY THAT'S BEEN A SOURCE OF STRENGTH FOR A LOT OF RURAL COMMUNITIES IN IOWA.

>> Suarez: THE U.S. REMAINS THE WORLD'S LARGEST MANUFACTURING ECONOMY. ROUGHLY 9% OF THE AMERICAN WORKFORCE-- ABOUT 12 MILLION AMERICANS-- ARE EMPLOYED DIRECTLY IN MANUFACTURING TODAY. BUT AS JOBS HAVE INCREASINGLY MOVED TO ASIA AND ELSEWHERE, THE ROLE OF MANUFACTURING IS DOWN SHARPLY FROM THE INDUSTRY'S HEYDAY. TO ENCOURAGE THE OPENING OF NEW PLANTS, THE PRESIDENT IS PROPOSING MORE TRAINING, ADDITIONAL EDUCATION AND NEW TAX INCENTIVES. BUT REPUBLICANS SAY THE PRESIDENT'S ECONOMIC POLICIES HAVE CONTRIBUTED TO THE DECLINE. MITT ROMNEY MADE THAT POINT AGAIN ON TUESDAY DURING A CAMPAIGN STOP AT A SHUTTERED DRYWALL FACTORY IN TAMPA, FLORIDA.

>> IT DOES BREAK MY HEART TO SEE PLANTS LIKE THIS ONE. IN 2008, THIS PLANT CLOSED BECAUSE OF AN ECONOMIC DOWNTURN. IN A NORMAL RECOVERY, UNDER STRONG LEADERSHIP, IT COULD BE FULL OF WORKERS BY NOW.

>> Suarez: A GAP IN SCIENCE AND ENGINEERING IS FUELING OTHER PROBLEMS. A NEW REPORT RELEASED BY THE NATIONAL SCIENCE BOARD LAST WEEK SHOWED THE U.S. HAS LOST 28 PERCENT OF HIGH-TECH MANUFACTURING JOBS OR NEARLY 700,000 JOBS SINCE 2000. THERE ARE BRIGHT SPOTS, SUGGESTING A SMALL REVIVAL. AFTER A MAJOR GOVERNMENT BAILOUT FROM THE OBAMA AND BUSH ADMINISTRATIONS, GENERAL MOTORS AND CHRYSLER ARE MAKING PROFITS AND OUTSELLING THEIR FOREIGN COMPETITION. A RISE IN EXPORTS HAS HELPED TOO. OVERALL, THE U.S. ECONOMY HAS ADDED 300,000 MORE MANUFACTURING JOBS SINCE EARLY 2010. WE TALK TO THREE EXPERTS NOW ABOUT ALL THIS. ROBERT REICH WAS SECRETARY OF LABOR IN THE FIRST CLINTON ADMINISTRATION. HE'S NOW A PROFESSOR OF PUBLIC POLICY AT THE UNIVERSITY OF CALIFORNIA AT BERKELEY. JACK McDOUGLE IS SENIOR VICE PRESIDENT AT THE COUNCIL ON COMPETITIVENESS WORKING WITH LEADERS IN GOVERNMENT, BUSINESS AND ACADEMICS. HE SERVED AS UNDERSECRETARY FOR ECONOMIC AFFAIRS AT THE COMMERCE DEPARTMENT DURING THE SECOND BUSH ADMINISTRATION. AND MARTIN SCHMIDT IS ASSOCIATE PROVOST AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY, WHERE HE'S ALSO A PROFESSOR OF ELECTRICAL ENGINEERING. GENTLEMEN, I WANT TO START BY GETTING ALL THREE OF YOU TO TAKE A LOOK AT WHERE MANUFACTURING STANDS. POLITICIANS FROM BOTH PARTIES HAVE RECENTLY BEEN CAMPAIGNING ON THE IDEA THAT REVIVING MANUFACTURING IS A CENTRAL PART OF REVIVING THE ECONOMY. PROFESSOR REICH, WHERE DO YOU STAND?

>> WELL, OBVIOUSLY MANUFACTURING JOBS ARE GOOD JOBS, THEY HAVE BEEN GOOD JOBS. WE NEED TO DO WHAT WE CAN DO TO BRING BACK MANUFACTURING. BUT LET'S NOT FOOL OURSELVES. WE'RE NOT GOING TO HAVE THE KIND OF MANUFACTURING-BASED ECONOMY WE HAD 30 OR 40 YEARS AGO. A LOT OF THE ASSEMBLY JOBS THAT... IN OUR HEADS WHEN WE THINK ABOUT MANUFACTURING ACTUALLY HAVE BEEN TURNED INTO ROBOTICS, NUMERICALLY CONTROLLED MACHINE TOOLS. IF YOU GO INTO AN AMERICAN FACTORY OR CHINESE FACTORY YOU SEE TECHNICIANS SITTING BEHIND COMPUTER CONSOLES CONTROLLING A LOT OF ROBOTS AND NUMERICALLY CONTROLED MACHINES SO IT'S NOT AS LABOR INTENSIVE AS IT ONCE WAS.

>> Suarez: JACK McDOUGLE?

>> SECRETARY REICH IS RIGHT. PRODUCTIVITY IMPROVEMENTS IN MANUFACTURING HAVE BEEN SIGNIFICANT OVER THE PAST 20 OR 30 YEARS AND AS A RESULT THERE'S LESS REQUIREMENT FOR WORKERS. IN THE OPENING SEGMENT WHEN WE TALKED A LOT ABOUT JOBS BEING LOST OVERSEAS, THAT'S NOT JUST THE CASE HERE. U.S. WORKERS ARE MUCH MORE PRODUCTIVE THAN THEIR FOREIGN COUNTERPARTS. THE U.S. WORKER IS TEN TIMES MORE PRODUCTIVE THAN A CHINESE WORKER IN MANUFACTURING. THAT'S A GREAT ADVANTAGE TO THE U.S. AND U.S. MANUFACTURING OUTPUT CONTINUES TO GROW. SO THE IDEA THAT WE'RE GOING TO BRING BACK A SIGNIFICANT NUMBER OF MANUFACTURING JOBS THE WAY WE HAD IN THE 1960s AND 70s IS PROBABLY NOT ENTIRELY ACCURATE. BUT MANUFACTURING IS VERY CRITICAL TO U.S. ECONOMIC GROWTH AND PROSPERITY AND PART OF THE REASON FOR THAT IS ITS MULTIPLIER EFFECT. MORE THAN ANY OTHER SECTOR IN THE ECONOMY, MANUFACTURING CREATES MORE WEALTH IN OTHER SECTORS. IT'S SOMETHING WE NEED TO TAKE SERIOUSLY AND INVEST IN AND BRING BACK THE CAPABILITIES THAT WE'VE EITHER LOST OR ON R ON THE BRINK OF LOSING.

>> Suarez: PROFESSOR SCHMIDT?

>> I AGREE WITH EVERYTHING THAT'S BEEN SAID BUT WE NEED TO FOCUS THIS DISCUSSION ON ADVANCED MANUFACTURING, THAT'S WHERE WE HAVE REAL OPPORTUNITIES, THERE'S OPPORTUNITIES TO CREATE GREAT JOBS, HIGH-PAYING JOBS, JOBS WITH SUBSTANTIAL MULTIPLIERS AND THESE ADVANCED MANUFACTURING TECHNOLOGIES ARE VITAL TO OUR ECONOMY. WE'RE NOT GOING TO BE ABLE TO INNOVATE IN NEW PRODUCTS AND TECHNOLOGIES WITHOUT ROBUST MANUFACTURING BASE IN THESE ADVANCED MANUFACTURING TECHNOLOGIES.

>> Suarez: PROFESSOR, THAT ADVANCED MANUFACTURING YOU'RE TALKING ABOUT, DOES THAT EMPLOY MASS-SIZED LABOR FORCES? DO YOU SEE A SECOND SHIFT TAKING OVER FROM THE FIRST STHAFT LOOKS LIKE A BIG PARADE THROUGH THE FACTORY GATES ROHR WE TALKING ABOUT FAIRLY SMALL NUMBERS OF PEOPLE?

>> WELL, IT'S CERTAINLY... I WOULD AGREE WE'RE NOT GOING TO RETURN TO THE MANUFACTURING JOB NUMBERS OF THE PAST BUT THERE ARE SUBSTANTIAL JOBS OUT THERE, THESE ARE HIGH-SKILLED JOBS. ONE OF THE CHALLENGES WE HAVE IS THE LABOR FORCE DOESN'T HAVE THOSE SKILLS TODAY AND AS A NATION WE NEED TO FIGURE OUT HOW TO REVITALIZE OUR COMMUNITY COLLEGE EDUCATION SYSTEM TO TRAIN THOSE FOLKS THAT WANT TO WORK. AND THEY'RE THERE AND WHEN YOU TALK TO WORK WE'RE DOING AT M.I.T. AND PARTNERSHIP WITH OTHER COMPANIES YOU TALK TO COMPANIES AND THEY FACE SUBSTANTIAL CHALLENGES IN FINDING SKILLED LABOR TO POPULATE THESE JOBS. THE JOBS ARE THERE, WE NEED TO GET THE WORK FORCE TRAINED AND INTO THOSE JOBS.

>> IF YOU LOOK JUST BEFORE THE BIG DECLINES WHAT PUSHED AND PULLED MANUFACTURING JOBS OUT OF THE UNITED STATES OVER THE LAST 30, 40 YEARS?

>> JOBS LEAVING THE UNITED STATES FOR A VARIETY OF REASONS, OFTEN TIMES IT'S POOR TRADE BEING CHASED FOR LOW-COST LABOR AND SOME OF THAT'S TRUE AND OTHER ECONOMIES OFFER LOWER WAGES THAN IF UNITED STATES BUT THERE'S OTHER FACTORS THAT HAVE DRIVEN JOBS OFFSHORE, TAXES, REGULATORY POLICY SKILL SETS AND JUST ENVIRONMENTS BECOME MORE COMPETITIVE. OTHER GOVERNMENTS ARE INVESTING A LOT. IN THEIR TRAINING AND DEVELOPMENT OF THEIR WORK FORCE, THEIR GRADUATING ENGINEERS, THEY'RE INVESTING IN MANUFACTURING CAPABILITIES AND THAT'S PUTTING UP A STRONG CHALLENGE SO WE NEED TO LOOK AT THE ENTIRE LANDSCAPE OF MANUFACTURING IN ORDER TO MAKE SURE THAT WE CAN BE SUCCESSFUL GOING FORWARD AND TO ECHO THE POINT, BY OUREST PLATS AND WORKING WITH ONE OF OUR PARTNERS WE ESTIMATE SOMEWHERE AROUND 600 TO A MILLION MANUFACTURING JOBS ARE UNABLE TO BE FILLED RIGHT NOW BECAUSE MANUFACTURERS CAN'T FIND SKILLED WORKERS TO TAKE THOSE POSITIONS. THAT'S A HUGE GAP.

>> Suarez: PROFESSOR REICH? HUNDREDS OF THOUSANDS OF JOBS THAT CAN'T BE FILLED BECAUSE YOU CAN'T FIND THE WORKERS? WE USED TO HAVE THE FLIP SIDE PROBLEM, DIDN'T WE? HIGHLY TRAINED PEOPLE WHO COULD NOT LONGER FIND A PLACE TO PRACTICE THEIR CRAFT?

>> YES, IT'S THE FLIP SIDE BY THE KINDS OF SKILLS THAT ARE NEEDED IN ADVANCED MANUFACTURING THAT IS ENGINEERING SKILLS, MANUFACTURING ENGINEERING, DESIGN SYSTEMS INTEGRATION, ALL SORTS OF THINGS, KNOWLEDGE OF COMPUTER AIDED DESIGN, COMPUTER AIDED MANUFACTURING THAT DOES TAKE TIME. IT TAKES SKILLS. COMMUNITY COLLEGES ARE IMPORTANT BUT THERE'S ALSO A NEED MORE MORE GRADUATE ENGINEERS, FROM FOUR YEAR COLLEGES AND ENGINEERING PROGRAMS AND EVEN IF WE DID ALL OF THIS-- AND WE HAVE TO DO ALL OF THIS-- WE'RE NOT GOING TO SEE-- AND I WANT TO EMPHASIZE ALL OF THIS-- WE WON'T SEE THE FAST NUMBERS OF GOOD UNIONIZED HIGH-WAGE MANUFACTURING JOBS THAT ARE BLUE-COLLAR JOBS WE USED TO HAVE. WHEN WE TALK ABOUT SKILL UPGRADES, WE NEED TO DO THIS FOR THE ENTIRE WORK FORCE, NOT JUST MANUFACTURING BUT ALSO FOR SERVICE JOBS THAT ALSO COULD PAY MUCH BETTER IF PEOPLE HAD THE RIGHT SKILLS.

>> Suarez: WELL, PROFESSOR SCHMIDT, THAT'S EXACTLY YOUR CUE BECAUSE YOU'VE BEEN TALKING ABOUT ADVANCED MANUFACTURING BUT IF WE LOOK AT THAT SECTOR AND START TO MAKE IT MORE ROBUST, ARE THERE STILL THINGS THAT AMERICAN WORKERS CAN DO AND THINGS THAT THEY CAN MAKE THAT CAN'T EVENTUALLY BE MADE SOMEWHERE ELSE IN THE WORLD FOR EQUAL QUALITY FOR LESS MONEY?

>> WELL, I THINK WHAT WE'RE FINDING IS THERE IS AN AWFUL LOT OF TECHNOLOGIES WHERE PRODUCTS WE WANT TO MANUFACTURE WHERE LABOR COST IS NOT THE DOMINANT COST OF MANUFACTURING IT'S COST OF CAPITAL, TOOLING, AND HAVING THE RIGHT WORK FORCE IS CRITICAL AND U.S. CAN COMPETE IN THAT AREA SO WE NEED TO FOCUS ON TRAINING AND AS I STATED EARLIER THIS IS VITAL TO OUR ECONOMY. THE ENGINEERS GRADUATED IN M.I.T. AND ARE GOING TO DESIGN EXCITING NEW PRODUCT BUS IN ORDER DO THAT THEY NEED A DEEP UNDERSTANDING OF HOW THESE PRODUCTS ARE MANUFACTURED AND THAT COMES FROM BEING NEAR WHERE THE MANUFACTURING IS OCCURING SO HAVING A ROBUST DOMESTIC MANUFACTURING BASE IS ABSOLUTELY TSE ENTOMORROW OUR INNOVATION ECONOMY AND IF ONLY FOR THAT WE NEED TO ENSURE A STRONG MANUFACTURING BASE BUT I ALSO THINK THERE'S PLENTY OF EVIDENCE TO SUGGEST THAT THE JOBS ARE HIGH-PAYING AND THE MULTIPLYERS AROUND MANUFACTURING JOBS ARE QUITE SUBSTANTIAL.

>> Suarez: JACK McDOUGLE, IN THE TIME WE HAVE LEFT-- AND I WANT TO HEAR FROM YOU AND THE SECRETARY BEFORE WE GO-- WHAT'S YOUR BEST PITCH ON WHY IN A COMPETITIVE WORLD WHERE A LOT OF OUTSOURCE HAS ALREADY BEEN SUCCESSFULLY ACCOMPLISHED THERE NEEDS TO BE MORE INVESTMENT IN AMERICAN MANUFACTURING.

>> Reporter: THE COUNCIL ON COMPETITIVENESS WITH OUR INDUSTRY AND LABOR MEMBERS, WE'VE UNDERTAKEN AN INTENSE MANUFACTURING INITIATIVE OVER THE PAST TWO YEARS AND RECENTLY RELEASED A REPORT MAKE AN AMERICAN MANUFACTURING MOVEMENT AND THE CONSENSUS OF LEADING EXPERTS IS WE'RE ON THE BRINK OF A POTENTIAL UPTICK IN MANUFACTURING IN THE UNITED STATES. WE'RE SEEING WAGES, INCREASE IN LABOR UNREST INCREASE IN CHINA. WE'RE SEEING OTHER PRESSURES ON COMPANIES OPERATING IN CHINA. SO WHEN COMPANIES ARE EVALUATING THEIR TOTAL COST OF PRODUCTION THEY'RE SEEING NOW THAT IN THE UNITED STATES THE FULLY BURDENED COST OF PRODUCTION ISN'T AS EXTRAVAGANT AS THEY ONCE THOUGHT. SO PEOPLE ARE TAKING A NEW LOOK. AND IT'S JUST BEYOND... BEYOND JUST ADVANCED MANUFACTURING THOUGH THAT WILL PAY A CRITICAL ROLE. I WAS READING THE WHAM MOW INDUSTRY IS BRINGING FRISBEE MANUFACTURING BACK TO THE EYES. SO OVERALL IT'S GOVERNMENT AND THE PRIVATE SECTOR AND UNIVERSITIES WORKING TOGETHER TO CREATE THE KIND OF COLLABORATIVE ENVIRONMENT HERE THAT ANYBODY THAT WANTS TO MAKE SOMETHING IN THE UNITED STATES CAN DO SO IN A COST-EFFECTIVE MANNER. AND I THINK WE HAVE THAT POTENTIAL.

>> Suarez: EVEN IF IT'S SOMETHING AS SIMPLE AS AN INJECTED, MOLDED PLASTIC DISK?

>> AS SIMPLE AS THAT BECAUSE ONE WORKER CAN TURN OUT TEN TIMES AS MANY IN THE UNITED STATES AS THEY CAN IN CHINA.

>> Suarez: JACK McDOUGLE, PROFESSOR SCHMIDT AND PROFESSOR REICH, GOOD TO TALK TO YOU ALL.

>> THANK YOU VERY MUCH.

>> THANK YOU.

>> Brown: FINALLY TONIGHT, HOW SCARCE RESOURCES COULD SHAPE AND DEFINE AMERICAN POLITICS. JUDY WOODRUFF TAPED THIS CONVERSATION BEFORE HER TRIP TO FLORIDA.

>> Woodruff: THE ECONOMY AND BATTLES OVER GOVERNMENT SPENDING IN A TIME OF BELT TIGHTENING ARE NOT ONLY HELPING SHAPE THE 2012 PRESIDENTIAL CAMPAIGN, THEY'RE ALSO REDEFINING AMERICAN POLITICS AND POTENTIALLY THE UNITED STATES' PLACE IN THE WORLD. THAT'S THE ARGUMENT IN A NEW BOOK BY FORMER "WASHINGTON POST" POLITICAL REPORTER THOMAS EDSALL. HE'S NOW A PROFESSOR OF JOURNALISM AT COLUMBIA UNIVERSITY AND HE WRITES A COLUMN FOR THE "NEW YORK TIMES" THE BOOK IS "THE AGE OF AUSTERITY: HOW SCARCITY WILL REMAKE AMERICAN POLITICS" AND AUTHOR TOM EDSALL JOINS US NOW. GOOD TO SEE YOU. IF THIS BOOK HAD A SOUND TOM EDSALL IT WOULD BE A SIREN.

>> A GROWN.

>> Woodruff: DID YOU SAY A GROAN?

>> YES.

>> Woodruff: BECAUSE YOU'RE WORRIED WHERE THE COUNTRY HEADED, WHERE AMERICAN POLITICS IS HEADED. WHAT HAS YOU SO CONCERNED?

>> WELL, WHAT'S HAPPENED IN THE PAST SINCE THE ECONOMIC COLLAPSE IS THAT THE COUNTRY NOW IS... HAS BECOME DOMINATED BY THE ISSUE OF DEBT AND DEFICITS AND THERE IS A SERIOUS PROBLEM IN THE LONG RUN OVER THE RISING COST OF MEDICARE AND PERHAPS OTHER ENTITLEMENTS AND THIS STUFF HAS TO BE ADDRESSED OVER TIME. THE RESULT, THOUGH, HAS BEEN TO CHANGE THE BASIC NATURE OF AMERICAN POLITICS FROM ONE IN WHICH YOU COULD HAVE COMPROMISE WITH A GROWING ECONOMY, SOME PEOPLE WANT TAX CUTS, OTHER PEOPLE WANT SOCIAL PROGRAMS TO ONE NOW IT WHERE IT'S A ZERO SUM OR NEGATIVE SUM COMPETITION. SOMEBODY'S GOING TO TAKE A HIT. IT'S NO LONGER A NICE FRIENDLY GAME, IT WHO'S GOING TO GET HURT. WE ALREADY HAD A POLARIZED POLITICS. WHEN YOU ADD THIS NOTION THAT POLITICS NOW IS ONE NOT JUST OF WHAT CAN I GET OUT OF IT BUT WHAT CAN I DO TO GET WHAT I WANT THAT MAKES IT A MUCH NASTIER AND MUCH MORE HOSTILE CIRCUMSTANCE. I THINK THE 2011 CONGRESS BASICALLY AFFIRMED MUCH OF THIS KIND OF CHARACTER OF POLITICS AND THE FIGHT NOW IS A MUCH MORE SERIOUS AND BRUTAL FIGHT OVER BASICALLY ECONOMICS AND HOW DO YOU CUT UP A SMALLER AND SMALLER PIE?

>> Reporter: YOU DESCRIBE TWO VERY SENTS OF ADVERSARIES IN REPUBLICANS AND DEMOCRATS, YOU SEE THEM AS QUALITATIVELY DIFFERENT PEOPLE. IS THAT WHAT YOU'RE SAYING?

>> THERE'S A LOT OF EVIDENCE AND THERE THERE HAD BEEN STUDY OF THE PSYCHOLOGY, THE VALUES, THE WORLD OUTLOOK OF CONSERVATIVES AND LIBERALS, DEMOCRATS AND REPUBLICANS. A LOT OF THIS HAS BECOME MORE INTENSE SINCE THE CULTURE WARS AND THE CIVIL RIGHTS MOVEMENT AND THE WOMEN'S RIGHTS MOVEMENT. THERE'S BEEN A REAL DIVIDE AND THERE IS A DIFFERENT WORLD VIEW HELD BY LIBERALS AND DEMOCRATS FROM THAT HELD BY CONSERVATIVES AND REPUBLICANS. THEY'RE NOT TOTALLY ANTITHETICAL THEY'RE BOTH HUMAN BEINGS BUT THEY PUT PRIORITIES ON VERY DIFFERENT THINGS, BUT LIBERALS ARE VERY CONCERNED WITH COMPASSION AND FAIRNESS, CONSERVATIVES HAVE... WHAT ONE PERSON DESCRIBES AS A BROADER SPECTRUM BUT NOT AS MUCH FOCUS ON COMPASSION AND FAIRNESS BUT ALSO ON ISSUES OF SANCTITY, OF A DIFFERENT KIND OF FAIRNESS. THEIR OPPOSITION TO AFFIRMATIVE ACTION, FOR EXAMPLE, IS A DIFFERENT KIND OF FAIRNESS.

>> Woodruff: AND, IN FACT, YOU'VE GONE SO FAR AS TO SAY CONSERVATIVES ARE WILLING TO INFLICT HARM. YOU'RE PRETTY TOUGH ON CONSERVATIVES. FROM THAT STANDPOINT, TOM EDSALL, IS THIS A PARTISAN BOOK?

>> NO, I DON'T THINK SO BUT IT WILL BE ACCUSED OF THAT, BUT THE IDEA THAT WHAT CONSERVATIVES ARE WILLING TO INFLICT HARM IS NOT NECESSARILY A CRITICISM. IF YOU ARE IN A RIGHT AND YOU'RE FIGHTING TO PROTECT WHAT YOU HAVE, BEING LOYAL TO YOUR OWN PEOPLE IS NOT NECESSARILY A BAD THING. IF YOU AND YOUR FAMILY HAD TO PROTECT WHAT YOUR CHILD IS GETTING AND YOUR HUSBAND, IF THEY FACE SERIOUS THREATS OF LOST GOODS IN EFFECT, YOU'RE FIGHTING FOR THEM AND IN FACT IF THAT MEANT SOMEONE ELSE HAD TO GET HURT WOULDN'T NECESSARILY BE A BAD THING. SO TO HEAR THAT AS A FAULT IS NOT REALLY RIGHT, I DON'T THINK. IT'S A DIFFERENT VALUE STRUCTURE. CONSERVATIVES HAVE A MUCH STRONGER IN GROUP SENSE AND OUT GROUP SENSE. THEY SEE THE IN GROUP AS ONE TO BE PROTECTED. YOU CAN SEE THIS IN CONGRESS WHERE THEY ARE PROTECTING THEIR TAX CUTS, THEY'RE PROTECTING WHAT THEY WANT. AND THEY SEE THE OUT GROUP AS AN ADVERSARY WHICH THEY ARE MUCH MORE WILLING TO CUT BENEFITS, FOR EXAMPLE, FOR MORE PEOPLE AND NOT THOSE WITHIN THE CONSERVATIVE REPUBLICAN CONSTELLATION.

>> Woodruff: AND YOU DESCRIBE CONSERVATIVE REPUBLICANS AS BETTER EQUIPPED, BETTER INNATELY ABLE TO FIGHT WHAT THEY BELIEVE IN THIS AGE OF... THIS TIME OF SCARCITY THAN ARE DEMOCRATS.

>> THEY ARE. THERE IS A MUCH MORE... AND I DON'T MEAN THIS PEJORATIVELY. THERE IS A STRONGER NATURAL INSTINCT AMONG CONSERVATIVES TO SEE CONTESTS IN THE ZERO-SUM TERMS THERE ARE GOING TO BE LOSERS AND WINNERS THEREFORE I WANT TO GET INTO THIS AND BE SURE THAT I AM THE WINNER AND THE PEOPLE AROUND ME ARE WINNERS.

>> Woodruff: AND THE CONSEQUENCE OF THAT IS WHAT? BECAUSE CONSERVATIVES SAY THAT'S A GOOD THING BECAUSE THEY THINK SPENDING DOES NEED TO BE CUT. WE NEED TO UNLEASH CAPITALISM, THE FREE MARKETS.

>> THIS ATMOSPHERE OF SCARCITY AND AUSTERITY THAT THE COUNTRY IN IN THE LONG-TERM DEBT CONCERNS IS AN IDEAL ENVIRONMENT FOR THE CONSERVATIVES AND A ROUGH ONE FOR LIBERALS. LIBERALS DO NOT SEE THE WORLD... THEY SEE MUCH MORE OF THE WORLD AS A UNITY, AS ONE AND THAT EVERYONE SHARES. THEY DON'T LIKE TO INFLICT HARM ON ANYBODY PARTICULARLY. SO THEY'RE NOT REALLY PREPARED FOR THIS KIND OF FIGHT OVER LIMITED... NOT THIS LIMITED BUT DIMINISHING RESOURCES.

>> Woodruff: WHAT DO YOU SEE AS THE... AS AT STAKE HERE. OFF PRETTY PESSIMISTIC OUTLOOK HERE AT THE END ABOUT WHERE THE COUNTRY'S HEADED. YOU TALK ABOUT A PERIOD OF DECLINE POTENTIALLY FOR THE UNITED STATES?

>> WELL, I THINK WHOLE CONFLICT AND THE POLARIZATION WE'RE IN RIGHT NOW HAS LIMITED THE ABILITY OF THIS COUNTRY TO DEAL WITH WHAT ARE VERY SERIOUS PROBLEMS. AND I THINK THE VIEW A NUMBER OF ECONOMISTS HOLD, WHICH IS THAT AT THE MOMENT THIS COUNTRY REALLY OUGHT TO BE TAKING ADVANTAGE OF THE FACT THAT MONEY IS VIRTUALLY FREE. YOU CAN BORROW MONEY AT ALMOST ZERO COST AND THERE OUGHT TO BE MORE INVESTMENT RIGHT NOW BUT YOU HAVE TO COMBINE THAT WITH A LONG-TERM PLAN TO REDUCE THE DEFICIT BUT AT THE MOMENT THERE HAS TO BE... INSTEAD OF THAT WE ARE FROZEN, BASICALLY, IN AN AUSTERITY MENTALITY MUCH LIKE EUROPE AND I THINK THAT'S A CONSTRICTIVE ONE.

>> Woodruff: AND IN A FEW WORDS, TOM EDSALL, WHAT DO YOU SEE THAT COULD TURN THAT AROUND, THAT COULD GET THE UNITED STATES BACK ON A PATH TOWARD LESS POLARIZATION AND SEEING A WAY THROUGH THIS CURRENT ECONOMIC CRISIS?

>> WELL, I DON'T THINK THERE'S A REAL SOLUTION. I THINK WE'VE BEEN THROUGH A 40-YEAR-LONG UPHEAVAL WITH THE CIVIL RIGHTS MOVEMENT, WOMAN'S RIGHTS MOVEMENT, ALL THESE THINGS AND THAT THE PROCESS OF GOING THROUGH THIS IS GOING TO TAKE SOME MORE TIME. THE RISE OF T HISPANIC VOTE, INCREASING MEMBERS OF SINGLE VOTERS. THE REPUBLICANS I THINK RIGHT NOW SEE THEIR STRENGTH, THE CONSERVATIVE LOCATION THAT HAS BEEN A DEFAULT MAJORITY FOR MUCH OF THE PAST HALF CENTURY AS REALLY THREATENED BY THESE DEMOGRAPHIC CHANGES AND THEY WANT TO WIN A BIG ONE IN 2012. USE THAT ELECTION TO TAKE THE WHITE HOUSE, CONGRESS, AND THE SENATE AND TRY TO ENACT AS MUCH AS THEY CAN ALONG THE LINES OF THE PAUL RYAN BUDGET. GET THAT IN PLACE AND THEN IF THINGS FALL APART THEY WILL HAVE THE LAW IN PLACE AND IT BECOMES MUCH HARDER FOR A MORE LIBERAL MA MAJORITY TO BLOCK THINGS.

>> Woodruff: SOUNDS LIKE A LONG AND PROTRACTED BATTLE.

>> BUT GREAT FOR REPORTING.

>> Woodruff: TOM EDSALL "THE AGE OF AUSTERITY." GREAT TO HAVE YOU WITH US.

>> GOOD TO BE WITH YOU.

>> Warner: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: PENTAGON LEADERS OUTLINED ALMOST HALF A TRILLION DOLLARS IN BUDGET CUTS, ELIMINATING GROUND FORCES AND DELING SOME NEW WEAPONS. AND THE REPUBLICAN PRESIDENTIAL CONTEST IN FLORIDA GOT ROUGHER, WITH NEWT GINGRICH FIRING BACK AT A WAVE OF ATTACK ADS BY MITT ROMNEY. AND TO HARI SREENIVASAN FOR WHAT'S ON THE "NEWSHOUR" ONLINE. HARI?

>> Sreenivasan: WE HAVE MORE REPORTING BY JUDY IN FLORIDA. SHE FILED A BLOG POST ON HOW SPACE EXPLORATION AND THE TEA PARTY MAY HAVE AN EFFECT ON NEXT WEEKS PRIMARY. THAT'S ON THE RUNDOWN BLOG. A TEAM OF SCIENTISTS HOPE TO CAPTURE THE FIRST IMAGE OF A BLACK HOLE. WE SPOKE WITH A PROJECT LEADER FOR SCIENCE THURSDAY. ON ART BEAT, WE TALK TO SONGWRITER RYAN TEDDER, WHO'S UP FOR TWO GRAMMY AWARDS THIS YEAR, INCLUDING PRODUCER OF THE YEAR. ALL THAT AND MORE IS ON OUR WEB SITE: newshour.pbs.org.

>> Warner: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. I'M MARGARET WARNER.

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