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THE MCLAUGHLIN GROUP HOST: JOHN MCLAUGHLIN PANEL: RICH LOWRY, NATIONAL REVIEW; ELEANOR CLIFT, NEWSWEEK; TIM CARNEY, WASHINGTON EXAMINER; GILLIAN TETT, FINANCIAL TIMES TAPED: FRIDAY, MAY 13, 2011 BROADCAST: WEEKEND OF MAY 14-15, 2011

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MR. MCLAUGHLIN: Issue One: South of the Border.

PRESIDENT BARACK OBAMA: (From videotape.) We're here at the border today. Everybody recognizes the system's broken. The question is, will we finally summon the political will to do something about it?

MR. MCLAUGHLIN: President Obama took his case for immigration reform this week to the border of the Texas town of El Paso, where he laid out his vision, quote, "building a 21st century immigration system," unquote.

Here are the key building blocks. One: Border security. Increase the number of Guardsmen and immigration agents patrolling border adjacencies; more electronic surveillance.

Two: Talent retention. Encourage foreign students to stay in the U.S. after graduation and work here.

Three: Citizenship Path. Motivate illegal aliens to register with the government, pass a background check, pay taxes and penalties, and learn English.

Four: Employer accountability. Crack down on employers who knowingly hire illegal immigrants.

PRESIDENT OBAMA: (From videotape.) Businesses have to be held accountable if they exploit undocumented workers. We're going after employers who knowingly exploit people and break the law.

Question: Is President Obama using immigration as a wedge issue for his presidential re-election campaign to win Hispanic voters? Rich.

MR. LOWRY: Of course, John. That's what this is all about. He's sagging some among Latinos. He desperately needs those people for re-election. They're disappointed with him, partly because they were so gullible and naive and believed his overpromising on immigration in 2008.

But one of the key absurdities in this speech, John, is how he vastly oversold his enforcement efforts. He said the border fence is basically completed when only about 2 percent of it is the double fencing envisioned in the Secure Fence Act in 2006.

So if you really had a serious effort at the border, if you had E-Verify at the point of employment and you really saw an attrition of the illegal population, then the politics of this issue would change. Now amnesty, though, is a complete impossibility. And it's all about politics.

MR. MCLAUGHLIN: You don't think he deliberately held off on the technology in order to be able to create a Latino --

MR. LOWRY: I think the one infrastructure project in the United States of America that liberals have no interest in is the border fence.

MR. MCLAUGHLIN: By reason of their liberalism?

MR. LOWRY: They have no interest in cracking down on illegal immigration. I mean, it's a sign of how far right this debate has moved that Obama has been forced to undertake at least some enforcement measures, but his heart's not in it. MR. MCLAUGHLIN: Eleanor, do you agree with Rich?

MS. CLIFT: No, I don't agree.

MR. LOWRY: (Laughs.)

MS. CLIFT: This president has done far more in terms of security crackdown than George W. Bush did.

MR. LOWRY: That's not true.

MS. CLIFT: It is true.

MR. LOWRY: It's barely --

MS. CLIFT: And we can compare statistics later.

MR. LOWRY: It's barely more -- just barely more deportations.

MS. CLIFT: You've used up your time, Rich.

MR. MCLAUGHLIN: Let her finish.

MS. CLIFT: You've used up your time; my turn. And I think he does have a good record, to the point where he has liberals complaining that he's cracked down too much. He got two thirds of the Hispanic vote in 2008. He may get it up to four fifths, because he's the most prominent official on the Democratic side talking pro- comprehensive immigration. And you have Governor Jan Brewer of Arizona, the most prominent Republican official on the other side, sending out very negative attitudes when it comes to Hispanics.

So I think, sure, there's a political benefit here for the president. But if he could get comprehensive immigration reform tomorrow, along the lines that you outlined, he would love it. He can't get it because Republicans are opposing him. And so it's a clear political divide. And I think Hispanics know which side -- which party is on their side.

MR. MCLAUGHLIN: Tim, what do you think of that?

MR. CARNEY: I don't think he's trying to work at all with Republicans. He didn't invite Jan Brewer. He didn't invite Texas Governor Rick Perry to the White House to talk about immigration.

MR. MCLAUGHLIN: Who's Jan?

MR. CARNEY: Jan Brewer, the governor of Arizona. And to show his seriousness on this, who did he invite to talk about immigration at the White House? Rosario Dawson and Eva Longoria. He brought in actresses. He is not serious about this. He wants to set up a debate and induce Republicans into arguing against immigration, then call them racists and push himself up to 40 percent of the Hispanic vote. It's pure cynical politicking. He has no interest in real solutions.

MR. MCLAUGHLIN: Polls now say that the real level who want in the United States an immigration cutoff is 61 percent of the public, not the 45 percent routinely reported by Gallup.

This is Alexander Janus of UC-Berkeley, in combination with Miller- McCune Magazine, May-June 2011. Do you know both -- do you know the publication?

MS. TETT: I do know it, yes.

MR. MCLAUGHLIN: Do you think it's reliable? That's a high figure.

MS. TETT: It probably is, yeah.

MR. MCLAUGHLIN: That's a consensus of Americans want an immigration cutoff.

MS. TETT: Well, I wanted to pick up on a point that Tim was saying, because actually I agree that, tragically, this has turned into a political football. But there are real issues at stake here for America's economy. I was in Illinois a few weeks ago talking to companies out there, and what they keep saying is that there are -- they have real skill shortages now because students are being educated in the U.S., then have to go home at the end of their degrees. And they're basically pleading for some reform to immigration policy.

So, actually, in between all the politicking, I think that what Obama said, in terms of focusing on the talent issue and trying to at least get it on the table is to be welcomed. The tragedy is that, as you say, it's really turned into a political wedge that's really not going to get very much constructive debate.

MR. LOWRY: But, I mean, that's --

MS. CLIFT: And you think if Rick Perry had been invited to the White House that that would have been a serious discussion about --

MR. CARNEY: I think Rick Perry deals --

MS. CLIFT: -- immigration reform? (Laughs.)

MR. CARNEY: -- every day with immigration. And I think the difference between Texas and Arizona and New Mexico and California --

MS. CLIFT: Rick Perry wanted to secede. MR. CARNEY: -- bring their different experiences together --

MS. CLIFT: He wanted to secede with Texas, as I recall.

MR. CARNEY: And then he'd have to worry about immigrating into the United States.

MR. LOWRY: (Laughs.)

MS. TETT: He shouldn't have gone to the border. He should have gone somewhere like Illinois and talked to real companies about the problems they face with skill shortages today.

MS. CLIFT: Well, he did make --

MR. MCLAUGHLIN: What about the role of employers and what they should do to verify the status of their future employees? How much responsibility --

MR. LOWRY: It's huge.

MR. MCLAUGHLIN: -- do you want them to have?

MR. LOWRY: It's huge, because it's not just the border. It's the point of employment. As long as people can get jobs pretty routinely, you're going to have people staying illegally in this country. Lamar Smith in the House has a bill to make E-Verify the system to check the status of every employee mandatory. And until you do things like that, all this is just smoke and mirrors.

MR. MCLAUGHLIN: You want employers to become policemen?

MR. LOWRY: Of course, yeah. I want them --

MR. MCLAUGHLIN: You want them to --

MR. LOWRY: I want them to be able to know whether they're actually --

MR. MCLAUGHLIN: You want them to take the rap?

MR. LOWRY: I want them to be able to know whether they're hiring legal or illegal people or not. That's common sense.

MR. MCLAUGHLIN: To see the papers? To see the papers?

MR. LOWRY: Yeah, of course.

MS. CLIFT: The business --

MR. MCLAUGHLIN: How far down that train does that go? MR. LOWRY: It doesn't have to go far. You just check whether they're legal or not.

MR. MCLAUGHLIN: It's as simple as that?

MS. CLIFT: The business community --

MR. MCLAUGHLIN: Do they have to check back with Washington --

MR. LOWRY: Yes.

MR. MCLAUGHLIN: -- and go through that rigmarole.

MR. LOWRY: Yeah. There's a database that hooks into the federal government, and you find out. And until you have something like that --

MR. MCLAUGHLIN: So when you check your computer --

MR. LOWRY: -- to have businesses -- John, unless you have something like that --

MR. MCLAUGHLIN: -- (inaudible) -- be clear, then you're all set.

MR. LOWRY: Unless you have something like that, employers are in a double bind, because they don't really know whether they're hiring legal or illegal people, and then the federal government comes in and enforces on them and does an audit --

MS. CLIFT: Yeah, my heart bleeds for the poor corporations and the poor employers who basically have gotten a free ride hiring people for less than they're worth.

MR. LOWRY: Yeah, that's true. I agree with that.

MS. CLIFT: Yeah. And that --

MR. MCLAUGHLIN: Well, it works the other way too.

MR. LOWRY: Eleanor and I agree; employers shouldn't hire illegally.

MR. MCLAUGHLIN: Are you going to invest them with the authority to do all of that inquisitioning in order to protect themselves?

MR. LOWRY: It's not much inquisition.

MR. MCLAUGHLIN: And where does that lead --

MR. LOWRY: You just -- you check their legal status.

MR. MCLAUGHLIN: -- (inaudible)? Do you have any comment on that?

MR. CARNEY: I think the most destructive idea in the immigration debate is not the E-Verify, but it's the guest-worker program where you come over just to work for a particular company --

MR. MCLAUGHLIN: Yes. Yes.

MR. CARNEY: -- because that basically gives the employer the power of deportation.

What Rich is talking about -- I don't know if I agree with it, but it's not giving them power and authority. It's giving them responsibilities.

MS. CLIFT: Well, one new wrinkle in the argument the president made is he was saying that this is about our economy and it is good for the American economy if we have a systematic way to legalize the 12 million people who are here.

MR. MCLAUGHLIN: Let me ask Gillian a question --

MS. TETT: And the folks who are kind of entrepreneurs and people who actually have the skills that America needs --

MR. MCLAUGHLIN: Is there anything that London or Great Britain -- I'm noticing your accent -- can teach us with regard to the importation of labor?

MS. TETT: Well, we also in the U.K. have had a long-running fight about this. It's a very tortured issue.

MR. MCLAUGHLIN: Do they go through a lot of angst at the administrative level in trying to make the determination that we are now imposing on employers?

MS. TETT: Absolutely. We've had this debate for a long time.

MS. CLIFT: And actually, America has done better dealing with immigration than Europe -- (laughs) -- just to put in a good word for American exceptionalism. (Laughs.)

MS. TETT: I agree. I agree. And that is --

MR. LOWRY: Finally. (Laughs.)

MS. TETT: How has America got itself into a situation where it's actually turning away people who want to build businesses in America? That is crazy. That is completely un-American.

MR. MCLAUGHLIN: Issue Two: Newt Hits the Trail.

FORMER HOUSE SPEAKER AND 2012 REPUBLICAN PRESIDENTIAL CANDIDATE NEWT GINGRICH (R-GA): (From videotape.) President Obama should be ashamed of himself. For the president of the United States, a year and a half before an election, to deliberately use dishonest scare tactics demeans the United States of America.

MR. MCLAUGHLIN: That was the opening fire of the Newt for president 2012 campaign. The former House speaker announced on Wednesday that he would seek to be the Republican Party's official candidate in next year's presidential race and the chance to make Barack Obama a one-term president.

But for now, it's not looking good. A recent poll has Obama trouncing Gingrich by 15 points, even before the Osama bin Laden execution. Observers now say that Commander in Chief Obama is now seen as a successful war president.

Question: How strong is Newt Gingrich's grassroots support? Tim Carney.

MR. CARNEY: It's not strong, and I don't see how it gets strong. The difference between him and Mitt Romney is that in addition to supporting single payer and the Wall Street bailouts, Newt Gingrich also supported Medicare Part D as well as individual mandate in health care and global-warming cap and trade.

So he's got lots of ideas. I don't think he has any convictions. He's like Mitt Romney in that he's a managerial guy without any core beliefs. And he's not like Mitt Romney in that he doesn't have sort of the picture-perfect family story.

MR. MCLAUGHLIN: Why do you adduce that evidence of the rap against him?

MR. CARNEY: I mean --

MR. MCLAUGHLIN: Medicare Part D.

MR. CARNEY: -- I think that when you saw the tea party -- you used the word grassroots. You saw the tea party. You see people getting riled up. Half of what they got riled up at last election was Republican offenses against limited government. And Medicare Part D was -- I mean, it wasn't as big as the Wall Street bailout, but Medicare Part D and the Wall Street bailout and No Child Left Behind, those were things that people at tea parties would bring up.

Republicans would say, "This is part of the problem." And Newt was on board. He was lobbying the right at the time, coming to conservative meetings and coming to pitch conservative journalists, saying, "You've got to go along with the prescription drug benefit."

MR. MCLAUGHLIN: Does that make him a time server?

MR. CARNEY: A time server? MR. MCLAUGHLIN: A time server is someone who adopts the policy to the immediate pragmatic needs of the moment --

MR. CARNEY: Absolutely.

MR. MCLAUGHLIN: -- and it doesn't make any difference which side it's on.

MR. CARNEY: Absolutely.

MR. MCLAUGHLIN: There's no fundamental belief on either side. It's which way it works; pragmatism.

MS. TETT: It's like "American Idol." You see the limelight, you know.

MR. MCLAUGHLIN: You think it's limited to that?

MS. TETT: Well, not quite, no. I think he likes being center stage, obviously. He's a very bright man. He's got a lot of very bright, interesting ideas. He likes talking. Whether he can actually, as Tim says, get any grassroots support, I think, is very questionable.

MR. MCLAUGHLIN: Do you think --

MS. TETT: It's not just his family issues. It's also his network of business interests, which are going to come under a lot more scrutiny now.

MR. MCLAUGHLIN: You think he could talk his way out of the Carney rap which we've just heard?

MS. TETT: (Laughs.) I think he is a great talker. You should get him on your show.

MR. MCLAUGHLIN: He's been on my show. I mean, I've interviewed Newt, and what I think is what I think.

Eleanor.

MS. CLIFT: He's a master of reinvention. I first met him in the `70s when he was a self-described Rockefeller Republican. He's been everywhere on every issue. He has supported -- he did public-service commercials with Nancy Pelosi on climate -- the need for addressing climate change. And, of course, now I guess he thinks that the warm air is just hugging earth.

But I think he will add an entertainment value to the Republican debates, and they are sorely in need of it. And it'll be fun to watch him challenge the others. And so it's a good thing he's in --

MR. MCLAUGHLIN: What is -- MS. CLIFT: -- but he's doing it mostly to keep up his fundraising operation.

MR. MCLAUGHLIN: Rich, you follow --

MS. TETT: Get him --

MR. MCLAUGHLIN: Go ahead.

MS. TETT: I was going to say, get him and Trump on stage together and that will be fantastic watching.

MR. MCLAUGHLIN: Have you done any exploration in your newspaper on Newt Inc.? Do you know what Newt Inc. is?

MS. TETT: I do know what Newt Inc. is, and I think it's a very important issue, because there's been a lot discussed about his family issues. But that's not the only thing that's going to be under the microscope now, now that he's running.

MR. MCLAUGHLIN: What's the story on Newt Inc.?

MR. LOWRY: Well, I think it's unfair to suggest, as Eleanor does, that this is all about Newt Inc. and making more money --

MS. CLIFT: Well, there's a component --

MR. MCLAUGHLIN: What is Newt Inc.? What is it?

MR. LOWRY: It's the network of Newt Gingrich organizations, some of which are non-profits --

MR. MCLAUGHLIN: How much money does Newt have?

MR. LOWRY: I don't know.

MR. MCLAUGHLIN: Thirty-five million (dollars).

MR. LOWRY: OK -- a lot.

MR. MCLAUGHLIN: Is that all derived from Newt Inc.?

MR. LOWRY: Not all of it, I imagine.

MR. MCLAUGHLIN: His various enterprises.

MR. LOWRY: A lot of speaking. He has a TV contract. I mean, this is the problem with Newt, I think. He's been around in Washington forever, so he doesn't have the fresh new thing going for him. At the same time, he doesn't give off the sense of gravity and solidity you expect from someone who has so much experience. So he's kind of caught in that bind. But he's smart. He's compelling. He's creative, and, as Tim suggests, perhaps overly creative, because sometimes his ideas are --

MR. MCLAUGHLIN: Are you going to endorse him with the National Review as your candidate for president?

MR. LOWRY: What's that?

MR. MCLAUGHLIN: Are you going to endorse him?

MR. LOWRY: I don't speak about our endorsements. I would say the -- until the time comes. But he has -- the problem with Newt, it's temperament.

MR. MCLAUGHLIN: Exit question. Exit question: Who is the GOP presidential front-runner in the GOP now? Is it still Mitt Romney, or has Newt edged out Mitt Romney? Rich.

MR. LOWRY: You know, it may be none of the above. It's definitely not Newt, and I'm not sure it's Mitt Romney after his disastrous health care speech this week.

MR. MCLAUGHLIN: Mitt Romney, he's an accomplished businessman.

MR. LOWRY: He's an accomplished, capable man, but he has an albatross hanging around his neck that just doubled in size, I think, this week.

MS. CLIFT: Well, if he can get through the primaries, what he did in Massachusetts with health care reform would be an asset. And I think he did the right thing not to walk away from it.

I want to say one more thing about Newt. Remember the phrase "Buy one, get one free"? It was the Clintons' in `92. Newt is bringing along his wife Callista, and they are very much a duo in this race. And I don't know that that's going to work all that well with the primary voters.

MR. MCLAUGHLIN: Why? Why? Why? Why? It seems to me that he's very up front about his personal life and the divorce.

MS. CLIFT: Think of Judith Giuliani. Was she an asset in that presidential campaign? You know, women are wonderful wives, but I don't think the voters are necessarily looking for a package deal when they are voting in the primaries.

MR. MCLAUGHLIN: Well, he's looking for, what, suburban women to vote for him?

MS. CLIFT: I don't think Callista's going to attract that. MR. LOWRY: He's trying to solve --

MR. MCLAUGHLIN: Eleanor -- (inaudible). We don't want another bum rap.

MS. CLIFT: I've seen pictures -- I'm not -- you know, don't -- you're trying to bait me --

MR. CARNEY: Eleanor's praise for Romney -- Republicans should remember how Democrats and liberals all praised John McCain till high heaven till he got the nomination, and then he was public enemy number one. And any praise that you get from the liberals and from Eleanor about "Romneycare" -- he's going to be public enemy number one. So conservatives, don't listen to the liberals.

MS. CLIFT: I never declared a presidential candidate public enemy number one.

MR. MCLAUGHLIN: I said another bum rap. I wasn't referring to you. That was opaque -- opaque another. You follow me?

MS. CLIFT: (Laughs.) Yeah, I agree.

MR. MCLAUGHLIN: Gillian.

MS. TETT: I was going to say, the key issue is, following up the question you asked, is there is no front runner right now in the Republican campaign, and therein lies the problem.

MR. MCLAUGHLIN: There's no front runner. Of those two, which one is front? (Laughter.)

MS. TETT: By the -- it's not a beauty contest. It's an ugly contest right now in terms of their problems. And I've got --

MR. MCLAUGHLIN: No, Romney is still the one to beat.

Issue Three: The Big Dipper.

PETER MORICI (University of Maryland economics professor): (From videotape.) We could have a double dip. The economy should be growing at 7 percent, not 2 percent. We should be adding four (hundred thousand) and 500,000 jobs a month, not two (hundred thousand) to 250 (thousand). This indicates an economy in decline.

MR. MCLAUGHLIN: A double-dip recession. That's what economists like Pete Morici are almost predicting for the U.S. economy. A double-dip recession starts with one period of six months or more in which the country's gross domestic product -- that's the total value of goods and services produced -- declines in its size or its value. This period of recession is then followed by a period of six months or more when the economy recovers in its size or value -- a recovery. It is then followed by another recession of six months or more; hence the double dip. We are now in a recovery phase, but we might dip again.

Question: Are we seriously at risk of a double-dip recession, or are the fears overblown? I ask you. Give me a 12-second answer.

MR. LOWRY: I think there's some risk, but we'll probably continue just to bump along with an economy that's growing but that people don't feel good about, because personal incomes are stagnant, unemployment is still high, and the values of their homes are stagnant or declining.

MR. CARNEY: No, we're going into a recession. There's going to be another crash. We've been trying to inflate our way to growth, but inflation is not wealth. Artificially low interest rates is not wealth. The government debt is getting too high. We can't repay it. We're either going to hyperinflate or we're going to have to contract. Either one, another crash is coming.

MS. CLIFT: Actually, the jobs numbers have looked pretty good. But the hole that we're digging out of is so deep that the country still doesn't feel good about itself. But I don't think there's a double dip in store.

MS. TETT: People do not appreciate the degree to which activity is being propped up by an ultra-loose monetary policy.

MR. CARNEY: Amen.

MS. TETT: And right now the Federal Reserve is threatening to rein that in. I think there is a risk, because the markets are pretty fragile. Unemployment is high. The housing market is still very weak; prices are falling. And taking that together, that's a pretty worrying outlook.

MR. MCLAUGHLIN: Here's my research. Commodity prices just dropped across the board, largely due to slack demand from China. Gas prices have probably peaked. The consumer spending still rose a feeble 0.5 percent, even under pressure. Home sales are plummeting. So it certainly looks like a double-dip recession, doesn't it?

MS. TETT: Well, basically the patient has come off heroin, if you like, in the form of cheap consumer debt. It's gone on to morphine in the form of government debt. And right now there's going to be some kind of crunch coming when they're going to have to try and rein that in. MR. MCLAUGHLIN: Is there going to be a housing bubble?

MS. TETT: A housing bubble? Right now housing prices are going down. I think the bigger question is how much more -- how much further do they have to go before America starts to reach some kind of clearing price where they know the bottom has been reached and we will have --

MR. CARNEY: Gillian should be sitting on this side.

MR. LOWRY: (Laughs.)

MR. CARNEY: Gillian is talking about the dangers of the government artificially pumping money in, of artificially low interest rates. The free market is not allowed to operate. They're not allowed to recover from the previous bubble.

MR. MCLAUGHLIN: Double dip or no double dip?

MR. LOWRY: No.

MR. MCLAUGHLIN: No.

MS. CLIFT: No.

MR. MCLAUGHLIN: No.

MS. CLIFT: The private sector has actually been --

MR. MCLAUGHLIN: Quickly.

MR. CARNEY: Yes.

MS. CLIFT: -- rebounding, finally.

MR. MCLAUGHLIN: No.

MR. CARNEY: Yes.

MR. MCLAUGHLIN: Yes?

MR. CARNEY: Yes.

MR. MCLAUGHLIN: Double dip.

MR. CARNEY: Yes.

MR. MCLAUGHLIN: Oh.

MS. TETT: I think it's a flat line -- sluggish.

MR. MCLAUGHLIN: Flat line. I'm with you, Gillian. Issue Four: Cut the Complex.

PRESIDENT DWIGHT D. EISENHOWER: (From videotape.) We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

MR. MCLAUGHLIN: This year marks the 50th anniversary of the famed military-industrial complex speech. That speech was delivered by President Dwight D. Eisenhower just three days before the end of his second term. Eisenhower used the term military-industrial complex to describe the union between lawmakers, defense contractors and the U.S. military. The Republican president argued that this coalition could gain so much power that it would effectively take control of American democracy.

The year Eisenhower delivered this address, 1961, the total defense budget was $226 billion. Today the total defense budget is $891 billion. Some of these costs include:

Item: Tomahawk missile, $1.5 million per missile.

Item: F-22 fighter jet, $150 million per jet.

Item: Littoral combat ship, $362 million per ship.

Item: Stealth bomber jet, $2.1 billion per jet.

Question: Is the military-industrial complex in for a trim, do you believe, Gillian Tett?

MS. TETT: I think it has to be, because the scale of the debt currently facing America means that there's going to have to be cuts right across the board. And anyway, there is a debate going on right now about the effectiveness of the military power. If you look at, say, what's happening in Afghanistan, the special operations forces, which is only 1.6 percent of the total military budget, in some ways has achieved a lot more than some of the other more costly parts of the military operations.

MR. MCLAUGHLIN: Interesting.

MS. CLIFT: Well, the defense secretary, Bob Gates, has identified $78 billion in cuts, which really isn't very much, but he wants to get rid of some of those big expensive weapon systems. But you run up against the congressional objections, because they've got jobs in all the various congressional districts, which is how they've managed this industrial complex to go forward. It's too painful for lawmakers to cut these programs.

I'd like to believe that there are going to be meaningful cuts. But when I look at the Republican side of the agenda, I see Ron Paul, but he's really a libertarian, and then Haley Barbour made some noises about cutting for Afghanistan, but he dropped out of the race. So I don't see where the substantial push comes from the conservative side to cut defense. Maybe you have another view.

MR. MCLAUGHLIN: Do you think Haley should come back in? (Laughter.)

MS. CLIFT: No, I don't -- I wasn't leading up to that. (Laughs.)

MR. LOWRY: That was practically an endorsement.

MR. MCLAUGHLIN: I think Haley should come back in. A lot of people do --

MS. CLIFT: Well, he'll --

MR. MCLAUGHLIN: -- the way he's conducting himself now with this ravaging Mississippi River down there.

MS. CLIFT: Well, he's well suited to that, and I'm sure he will be advising other candidates. He's a very savvy politician. But I don't think that he --

MR. MCLAUGHLIN: He's a savvy politician.

MS. CLIFT: He's not a likely presidential nominee.

MR. CARNEY: I can answer Eleanor's question on where the push comes from. There are some members actually of the Appropriations Committee -- Jeff Flake, Tom Graves of Georgia, House appropriators -- who are moving to cut spending, who are voting to cut spending, who are introducing amendments to cut military spending. And the question is whether the Democrats are going to give up their sacred cow, which is Planned Parenthood funding, now that the Republicans are willing to --

MR. LOWRY: John, can I make a point? Can I make a point?

MR. MCLAUGHLIN: Iraq, Afghanistan and bin Laden dead.

MR. LOWRY: Can I make a point about --

MR. MCLAUGHLIN: Isn't it time to cut?

MR. LOWRY: Can I make a point about the Eisenhower speech?

MR. MCLAUGHLIN: Yes.

MR. LOWRY: I think you are playing into a distortion of it. Everyone focuses on that one line. MR. MCLAUGHLIN: Right.

MR. LOWRY: And he was wrong about that. The military is stronger -- is smaller, in absolute terms and relative terms to the economy, than it was in 1961. Where he was right was warning about the powers and the folly of a scientific, technocratic elite, which immediately rose up, the supposedly best and brightest, in JFK's administration. They stumbled in Vietnam. Then their successors created the Great Society, which was another disaster. And you're seeing this flowering again in the Obama administration.

MR. MCLAUGHLIN: You know, I think --

MR. LOWRY: (Inaudible.)

MR. MCLAUGHLIN: You saw the figures on the board. That growth is really not that bad. And I think there is a point to what you say. There's a good point to it.

MR. LOWRY: Thank you, John.

MR. MCLAUGHLIN: There has not that. But I would call to your attention that the esteemed Grover Norquist is in favor of cutting the military budget.

Predictions. Rich.

MR. LOWRY: Elizabeth Warren gets a recess appointment to formally head the consumer finance protection board over the Memorial Day break.

MS. CLIFT: The U.N. general assembly will bless the creation of a Palestinian state.

MR. CARNEY: Barack Obama will raise a billion dollars and, as he did in `08, outraise Republicans from the drug industry and from Wall Street, and he'll still run as the anti-big-business candidate.

MR. MCLAUGHLIN: Gillian.

MS. TETT: The only part of the U.S. military budget which is not subject to any discussion about cuts is the SEALs and special operations.

MR. MCLAUGHLIN: Paul Ryan will seek and win the United States Wisconsin seat in next year's election.

On another note, our thoughts and prayers are with the family and friends of William J. McCarter, the president of WTTW in Chicago. Bill was key in the creation and networking of The McLaughlin Group. He was a very dear friend and one of nature's noblemen. May he rest in peace. END.