gwen: upheaval abroad, lively debates at home. we dig in tonight on "washington week." >> president yanukovych has the opportunity to make a choice. a choice between protecting the people that he serves, all of the people, and the choice for compromise and dialogue versus violence and mayhem. gwen: as a bloody, fiery standoff plays out in kiev's independence square -- >> the opposition doesn't seem -- didn't want dialogue or settle the situation within constitutional framework. want to take power by force. gwen: the u.s. and russia are watching closely. the uproar in ukraine. is it over or just beginning?

while at home the political battle centers on the minimum wage. >> this is not just the policy. it also happens to be good policy. because the truth of the matter is the overwhelming majority of the americans think that raising the minimum wage is a good idea. gwen: and on what it will take in money and in positioning to win in 2014. >> so this fall, you'll have a choice. winners make policy and losers go home. gwen: covering the week, david sanger of "the new york times." greg ip of "the economist." jeanne cummings of bloomberg news. and amy walter of the cook political report. >> award winning reporting and analysis covering history as it happens. live from our nation's capital this is "washington week with gwen ifill."

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broadcasting and by contributions to pbs stations from viewers like you. thank you. once again live from washington moderator gwen ifill. gwen: good evening. this week's rapidly unfolding events in ukraine proved to be and t-soviet democracy experiment in european unification and try as he might the u.s. president oes not have the luxury of focusing solely on domestic affairs. as things stand tonight ukranian president victor yanukovych has agreed to curtail his powers and parliament has voted to free one of his chief adversaries. but it took a lot to get to this point. and all eyes are still on russia. bring us up to date on where we stand tonight, david. >> we're better than where we were a day ago when there were 70 dead in the street. and it wasn't clear whether this would continue to escalate through the weekend. so it's been this very fragile deal that's been put together.

the highlights are that there would be an election by december. that the government would be kept from declaring a state of emergency. that they go back to the 2004 constitution which gave more power to the parliament and less to the president. but what we don't know is whether this is going to hold together. some of the right wing, somewhat fringe groups, but quite powerful, have already announced they're rejecting it and won't give back the president buildings. some of them want president yanukovych to resign. yanukovych himself has left kiev and gone back to sort of his home in a safe district. we don't know for how long that will be. gwen: president obama spoke with president vladimir putin of russia today. all eyes on russia. >> sure. gwen: what did they talk about? did they come to an agreement that this is a good idea? >> well, the briefings that the administration was giving late

this afternoon said that it was not a contentious phone call. that president putin had said that he would go along and try to help make sure this gets implemented. we have a lot of reasons to doubt that. first of all, russia was not a signatory to this. they just witnessed the document. secondly, they weren't really a player in the negotiations. and then remember what it is that president putin said just about nine years ago. when he declared at one point the demise of the soviet union was the greatest geopolitical catastrophe of the century. because tens of millions of russians were left outside of their territory. he wants ukraine back in his orbit. and that's what this is about. and that's why it's got these sort of continuation of the -- continuings of the cold war to it. >> who has more to lose here? president obama or putiid >> i think it's clear that putin's got more to lose. if for some reason out of this,

yanukovych is gone. and that in the end, the ukraine moves back more toward the europeans. remember, this began over what seemed to be a pretty traditional kind of trade agreement with the europeans. then i think putin will have suffered a setback. because he's going to think he wasn't able to reverse that breakup. gwen: let's listen to something the president had to say about this whole big picture earlier in the week. >> our approach in the united states is not to see these as some cold war chess board in which we're in competition with russia. our goal is to make sure that the people of ukraine are able to make decisions for themselves about their future. gwen: that pretty much says it. >> it pretty much does. but even if president obama does not view this as a cold war chess board, it's pretty clear that president putin does. and not just ukraine. i mean, that's what syria's all

about as well. where you saw the administration declare that the russians have been actually pretty unhelpful players in trying to get an accord together. so we're at the point that first the reset failed. now the reset to the reset isn't doing so well. and you have to wonder whether we're going to slip back into old habits. >> david, up until this point, in terms of preerts for the united states, in dealing with russia, it was trying to achieve a political settle nment syria. how does what's happening in ukraine affect the outcome of syria and does russia become more or less accommodating on what the president wants? >> i think the big fear, greg, is they will be less accommodating. it's hard to imagine them being less accommodating than they've been in recent weeks. we went through this brief, perhaps illusory moment back in september and october when the russians helped broker the deal that is slowly moving those chemical weapons precursors out of the country.

but they've now reverted to the norm. and there are a lot of heavy weapons that assad is getting that the russians are sending. and you've got to wonder if this deal falls apart in the ukraine and the ukraine looks like it's going back into the european orbit. whether or not put will do something again. >> what is the white house strategy right now? it seems that it's been to try not to talk about this. but is there something going on internally in the white house about what they would like to do? just haven't seen it? >> well, they were pretty focused on this. but you have to remember first of all this isn't about us. this is primarily about the ukraine. gwen: given vice president biden was working the phones. >> he was working the phones and he's got a relationship with yanukovych that they thought that they would try to capitalize on. and i actually think he probably played a fairly important role. because he was on the phone for a long time with yanukovych last night as this negotiation was happening. but in the end, we don't have very much trade with the

ukraine. we don't have very much leverage there. and so that's why it's really putin's to lose at this point. gwen: fascinating. and i get the feeling we're going to get pulled more and more into it not less and less. >> i think you're right. gwen: back here in the united states, there was y another big dustup over yet another congressional budget office report. last week, it was about the cost of health care. this week, it was about the potential cost of another policy the president favors, raising the minimum wage. will it raise wages? yes. will it cost some jobs? apparently also yes. that's all it took for another chapter to unfold in the inequality debate. what is true, greg? >> well, what the congressional budget office told us is probably what most economists would also tell you if you asked them what happens if you raise the minimum wage. well, you make something more expensive and people will buy less of it. so what they said was the vast majority of low income workers, about 16 million people, will get a raise. actually a very big raise. anywre from 10% to 20% to 30%. a very tiny number of people

they thought somewhere between zero and a million but they guessed around half a million people, would lose their jobs. or not get jobs. and that is not that far off with the conventional economic wisdom was. now, of course this causes a problem for the white house. because they have portrayed this plan as basically a free -- that is, no taxpayer money involved, way to bring up the lot of the lowest income workers in the country. now they have to deal with a very credible report that says, well, the price of that is that some of the people you're trying to help are actually going to end up without jobs. gwen: when it comes to the minimum wage, is this something where the white house is willing to step back and let the private sector take the lead? >> i don't think so. i mean, you have heard some -- you'll hear the white house talk about companies that they think have been very progressive on this front. they're always mentioning costello. a company that's decide -- mentioning costco. a company that's decided to pay its workers significantly above the minimum wage because it's more productive. the gap will pay at or above

the minimum wage. wal-mart is on the sidelines. not saying one way or the other. but the truth of the matter is you add up all these companies and they're a fraction of the number of people that earn the minimum wage. the vast majority of companies will not raise the wage unless they're forced to. >> if they don't get this, and the white house has made clear and the democrats in congress, that they want to make income inequality a major issue in this campaign, this is the first attempt to address it. it's the centerpiece at the moment. if they don't get it, what else do they have? >> well, so in about a week and a half we will get obama's budget and inequality and mobility will again be major themes in it. you will -- he will ask for the minimum wage and a few other things up his sleeve. in the state of the union he said let's make the earned income tax credit, which is a basically a work contingent credit that you give to the low income people. let's make that more generous. especially for people with no children. he is -- a year ago he asked for universal -- >> and some republicans like that idea? >> actually, yeah.

there is some hope that there could be movement on that. marco rubio is out there saying that that is something we should look at. you'll hear him talking about universal pre-k and so forth. but i think the hard truth for obama here is that the stuff that really matters, requires congress to spend some money. and he has a congress that doesn't want to spend any money. >> we've have been going back and worth on minimum wage and not like we haven't raised the minimum wainl before. why does this come a shock to some people that economists are divided on this? >> it is a fascinating question. because if you only took a year of economics aou would have learned, isn't it true that if you raise the price of something people demand less of it? gwen: i remember that from my one year of economics. >> yeah. that was -- that was the one class i didn't sleep through. so -- but it turns out that -- and that was the traditional view. that yes, if you raise wages, the majority of people would get a raise. but some number of people would lose their jobs. but as they began doing careful studies of places, for example, they compared new jersey which raised its wage to pennsylvania which did not, they looked at county by county comparisons

and looked at britain where they raised significantly in 1999. and they were unable to find really dramatic effects. they would range from zero to something very tiny. now the congressional budget office has given us a number which is probably at the higher range of those effects. but it's -- if you just look at the evidence, for a variety of reasons it appears that it does not lead to widespread layoffs. >> the traditional way of tearing the politics out of this kind of thing is to index benefits, social security and everything else. index inflation. that's never been the case with the minimum wage. would it have made a difference if it was? and would that be a way of reducing the political impact here? >> definitely because you wouldn't have to go back to the congress every three or four or five years. and -- to raise the wage just to get it back to where it would have been if it had kept up to inflation. the current federal minimum, the president's proposal to get it to $10.10 would only put it back to where it was in the early 1980's and inflation-adjusted terms. gwen: for some reason inflation

adjustment was never part of this. why not? >> well, it is. he will -- indexed to inflation when it goes -- gwen: the proposal would. >> the proposal would. there's another way of going about it which a lot of people are saying we should be looking at which is instead of putting it in the hands of congress to have basically a bipartisan commission, a group of experts decide this question, which is what they have in great britain. and they would make sure that it was done in a way and with timing that would be least harmful to the people you're trying to help. >> sounds like base closings or something. >> yeah. gwen: let's move on to trade politics. we all know that politics comes down to money, right? but now we're beginning to see it's not just about the cash. it's also about who's giving the cash. and for which issues. the american opportunity alliance, a group of pro-business republicans is raising money to support gay rights, immigration reform, and israel. and a group calling itself next gen climate action, a collection of liberal billionaires, is raising money for environmental issues. they join charles and david

koch, the conservative fundraisers who left an enduring imprint on the 2012 election. so how does -- how big a shift does this mean in the way that we raise money and fund campaigns? >> the expectation is we're going to have a $2.4 billion worth of spending on just on advertising in this next election. what it's done is it has taken advertising from something that you saw in the fall, you turn on your television and there are your campaign ads to something you now see literally a year or two years ahead of the election. we had our very first ad run this election. 613 days before the actual november date of this election. it was run in arkansas, one of the top states and most competitive states in the country. it was an ad run by club for growth. republican group against senator mark pryor. the earliest -- those people in arkansas are never going to be able to turn on their television without this. so we're seeing ads coming

earlier. we're seeing more ads running earlier. at this point in january, we've already had 9,500 ads run in 23 states. if you go back to 2010, the last midterm election, 6,000 ads were run in 13 states. so more money and coming earlier. gwen: so jeanne, does that mean we're paying -- it's because -- these ads are candidate specific or they're issue ecific? are they being paid for by these groups you're talking about? or is it just everyone spending the regular money earlier? >> no. they are definitely new players on the block. and it's a mix. there are certain -- the billionaire groups that you referred to are specific issues. stires group, next gen, wants to raise $100 million. gwen: tom sire. climate change and kill keystone. and if you looked at some of the early advertising in kentucky, then those down

there, little super pacs and that's about the mitch mcconnell race and they're running ads about the candidates and so it's both. >> and one of the things about the silicon valley boom, and not just silicon valley, we've created a fair number of billionaires and two created just yesterday when facebook bought what's app. will we see more billionaires enter this? >> we probably will see more billionaires get in the game. or see very wealthy people band together around an issue. one of my personal favorites this year is top chefs. top chef there or the judge, the -- tom calicio, is trying to put together a super pac to go after people who voted to reduce food stamps. so this could take on all kinds of forms. and candidates could have people coming at them from

everywhere. in the kentucky senate race, here we are, you know, we've got the primary in may, the general forever away. and they're already a dozen groups advertising. >> how likely is all this money actually going to change any particular races? i mean, i realize keystone may be very important to one billionaire but is it going to tip one -- one district or state one way or the other? >> what's going to be interesting to see is there are groups who have an agenda and we want to make sure this happens and we've seen this especially in the environmental community. they know they want to get certain laws passed but they know those issues themselves are not particularly -- they're not going to move voters in the right way. so maybe they'll talk about the minimum wage. or maybe they're going to talk about health care. maybe they're going to talk about something that will move voters or run negative ads against candidates instead of talking about that specific issue. what they're most interested in is making sure that x candidate is either out of office or x candidate gets into office who's in the majority, and that's what we'll see.

gwen: do we have any evidence so far that this has influenced outcomes? can we look at cases where this big money has come in and people are won or lost as a result? >> you have to look at the senate for that. in the house races it's much tougher. it's not that it can't be done. but because the districts are so safe that it's very hard to change the dynamics in those races, and in one small town in iowa, americans for prosperity, david and charles koch's organization, went in, did this , washington style ad campaign. and they lost every single race because the people got mad. gwen: where is all this money going? you may ask? in 2014 at least, into a collection of critical contests that could determine the future of the house, the senate, a bunch of statehouses, and what remains of the white house agenda. we'll be covering those races to watch all year long. beginning this week. with a three-way fight brewing in as jeanne mentioned kentucky. where senate minority leader mitch mcconnell must defeat a

tea party primary challenginger while at the same time beating back the democrat who is targeting him this fall. here's a taste of the debate from mcconnell, democrat allison lundergan grimes and tea party candidate matt bevin. >> so this fall you'll have a choice. you want to take my desk and move it over on the other side of the aisle with somebody who's going to make harry reid the majority leader of the senate. the play caller in the senate. or do we want a leader of the majority from kentucky? who believes in coal, believes in the kind of america that i think all of you and i think we ought to have. so elections make a difference. >> kentuckians don't view this race as toss-up. they're already to toss out their senior senator and someone who has failed to put them first and instead has been looking out -- the only job that he's focused on keeping is his own. and the people of kentucky are ready to finally have a voice and a champion instead of a chatter box in washington, d.c. >> he's a big government guy.

he's a moderate at best. except for when he's running for re-election. gwen: so it seems we have -- the tea party, we have the mainstream republican challenginger, we have the main republican -- democratic challenginger. and we have the powerful washington insider. >> kentucky is exactly right for you to focus on. because this is -- this is a huge race for so many different reasons. the democrats want to take out mitch mcconnell because he's mitch mcconnell. this is about slaying the giant. years ago the republicans took out tom daschle. who was the house majority leader. and that -- that's like the redskins beating dallas. it's just a big win. it's also important because the republicans have to take six seats, a net of six seats. and they have a strategy for doing that. a part of their original strategy that was not on the table was that one or two and in fact it's two of their own incumbents would face credible challenges. that could undermine their

strategy. gwen: is mitch mcconnell vulnerable or is this just a democratic fantasy? >> he is incredibly vulnerable. and you say it's kentucky. and i think obama got like 12% of the voters. >> more than -- >> so this is all that mitch mcconnell has to do is run against -- democrats run against obama and win. allison lundergan grimes has a good story to tell. she comes from a family that's well-known. political family. but more important, what mitch mcconnell represents is not about republican or democrat, it's that he represents somebody who's been there for too long. he becomes part of the establishment. that's the issue in this race. the most recent polling we've seen here not only has the race tied, but has mcconnell's approval rating lower than president obama's rating in kentucky. gwen: when you say -- you're talking about the general election. >> the general election. >> has it started to affect mcconnell's ability to do his job in washington? >> we saw mcconnell and bevin didn't have very good weeks. where they got in the last

week, they got in tight spots. and for mcconnell, it was being forced by senator ted cruz in filibustering the debt ceiling vote. mcconnell was then forced to cast a vote. and the plan was for no republican to cast a vote on that. because lifting the debt ceiling is like lighting a fire underneath the tea party people. and he was forced to do so as part of the leadership, he chose to vote to allow the vote to proceed. he voted against it ultimately. but he had to vote for clote you are -- for cloture to let it proceed. and that was immediately an issue in kentucky. >> so if you're allison grimes, what do you do to make this work? you point out this is kentucky. and so she's got to run on a very unusual kind of platform. >> right. she -- gwen: a lot of money is coming from outside as we were talking about. >> to help her out.

and she has to walk a very fine line. you heard senator mcconnell talk about coal and climate. now, what the president and a lot of democrats want to do, and -- on the environment, is not what works in kentucky. so she has to have her own identity there. and this is -- she's a first-time candidate and a young candidate. going up against a guy who's done this for many years. they're going to come out guns blazing. her ability to stand up and take that. and not falter is going to be really the key. but she has won statewide. she's a secretary of state. so she knows the state. and she has worked that state before. and that is an advantage for her. gwen: but he's -- >> and running against a guy -- and gone against like pea shooters and this is machine gun. gwen: he's in the left-right squeeze. he's caught in that. and a rock and a hard place. so we'll be talking about kentucky before this year's orover. thank you, everybody. we have to go now. but as always, the conversation will continue online. the "washington week" webcast

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next on "kqed newsroom," contra costa county under fire for allegedly mistreating teens in juvenile hall. squalor, security problems, and mismanagement. an investigation of richmond's public housing agency. >> this is a health hazard to me. bugs. i don't do bugs. i don't do mice. and the president of the golden state warriors discusses michael samm and the debate over sexual orientation in professional sports. >> this is kind of an exclamation point on the things that happened in our society and certainly in sports over the last three years.