welcome to our viewers here and around the world. i'm christiane amanpour. and at the top of the news this week, the gang of 20 at the big summit in seoul, u.s. economic policies come under fire from china and germany. are america's woes putting its global leadership in question? >> a whole host of other countries are doing very well. naturally they are going to be more assertive. >> former secretary of state madeleine albright and republican senator lindsey graham debate america's role in the world. then american austerity. >> the path we're on today is not sustained. we are headed for disaster. >> two members of the president's deficit commission,

democratic senator kent conrad an honeywell international david cote shares views on tough choices the united states faces. and the coming showdown over tax cuts. >> making these permanent will be the most important thing we could do to help create jobs in the country. >> that and all the week's politics on our roundtable with george will, "the new york times" columnist paul krugman, robert kagan from the brookings institution and ruth kagan from "the washington post." china is expected to overtake the u.s. as the world's biggest economy in the next two years. americans couldn't believe it. they're like, that hasn't happened already? and hello again, by the time air force one lands in washington this evening, it will have flown around the world.

a world that is fast changing as the president found out during his ten-day trip to asia. abc's senior white house correspondent jake tapper has been with the president and brings us this report. >> reporter: rebuked by american voters and reminded to focus more on the economy president obama began his asian trip talking about as a sort of international stimulus to open markets to american goods and bolster american jobs. >> we're actually doing business we're here. with every 1 billion we sell in exports 5,000 jobs are supported at home. for america this is a job strategy. >> reporter: in mumbai flanked by american ceos, the president announced deals between u.s. and indian companies totaling nearly $10 billion in u.s. exports and maintaining more than 50,000 american jobs. ♪ >> reporter: a cause for celebration as he and the first lady joined in on the festivities marking the hindu holiday of dawali. by the end of the week there was

no cause for dancing. some of the world's fastest growing economies refused president obama's entreaties to alter their economic policy, policies the president needs changed to fully implement his export strategy. his job strategy. >> instead of hitting home runs sometimes we're going to hit singles. >> reporter: and sometimes he struck out failing to convince south korea to open their markets to american beef and cars. at stake, $10 billion in exports and 70,000 american jobs. failing to convince chinese president hu jintao to stop artificially building up the dollar and holding down chinese currency and failing 0 convince g-20 leaders to use stronger language in the currency manipulation. >> that is an irritant not just to the united states but is an irritant to a lot of china a trading partners and those competing with china to sell goods around the world. >> reporter: the president was forced to push back on a tax the u.s. was engaging in its own currency manipulation defending

a move by the independent federal reserve to inject $600 billion into the u.s. economy. >> from everything i can see, this decision was not one designed to have an impact on the currency on the dollar. it was designed to grow the economy. >> reporter: criticisms from g-20 leaders who question president obama's spending habits were made all the more relevant when the co-chairs of the president's own debt commission put forth controversial proposals to reduce the deficit. >> this is debt is like a cancer that will truly destroy this country from within. >> reporter: once attacked by liberals and conservative showing how difficult reducing the deficit will be. modesty was forced upon the president in this trip full of complications. for "this week," jake tapper, abc news, traveling with the president. and to discuss all of this we're joined now by former secretary of state madeleine albright and republican senator lindsey graham. he's just come back from a trip

to iraq and afghanistan. thank you both for joining us. and let me ask you first, secretary albright because you have been to many of these summits. isn't it extraordinary that the president, u.s. leadership is being questioned so openly, not just by china but by germany who called the fed's action for instance clueless. >> actually not. i mean i think i've been to lots of meetings and they are discussions and i think the thing that people have to remember is that the g-20 was not set up to solve the world's economic problems. it was, it fact, set up as a way to bring the developing countries in to show what the various disagreements can be and to come to various consensus agreements and it takes a while. i think as the president said it's an incremental thing and i don't know, christiane, i was asked by the obama administration during the transition to meet with the g-20 when they were here and i met with everybody individually and you could see the fact that they all have their own interests and it is a matter of listening to the various ideas.

i think that it is a process and i think it's very clear that america continues to be central to the process >> let me ask senator graham, certainly china and germany as you heard did question america's global leadership. do you think that is if not actually at least symbolically and psychologically damaging for the united states? >> well, i don't overreact here. the currency issue was disappointing to me. clearly china does manipulate the value of its currency to get an advantage in exports. they already have enough. i was disappointed with the other nations who would not get behind president obama to push the chinese to change their currency policy, but, yeah, at the end of the day we're getting criticism. does that mean we're losing influence? not necessarily so but on the currency front and trade front this was a disappointing meetings. we needed a trade agreement with korea and we need to fight back against china currency manipulation and i think you'll see the congress get more

involved on the currency front after this trip. >> well, certainly the u.s. also being accused of trying to push down and weaken its own currency. you know, you say that this is perhaps just a sort of temporary statement by these countries but doesn't america have to get its economic house in order toward to be able to lead on a whole host of other issue, senator? >> yeah, i think secretary clinton got it right that our looming deficit is a national security issue for us and the only way to get it in order is do an agreement on entitlement reform. earmarks, that's just on the margins but if you want to get america back in business got to come to grips with social security and medicaid and reform entitlements before it's too late. we're an aging population. a lot of baby boomers will retire. we have fewer workers and need to do that sooner rather than later. >> we'll discuss it later on but do you think there will be

compromise. >> there must be. look what happened with health care when you tried to jam it through on a party line vote. we need to get social security stabilized before it goes into permanent bankruptcy. we're going to have increase the age. we're going to have to manipulate benefits for upper income americans and put everything on the table including stable revenues and i'd like to see this commission help lead the congress to get some results that have been kicked down the road. >> okay. >> for far too long. >> let me bring up now some of the key foreign policy issues that go to the heart of american prestigious and the president's prestige, the s.t.a.r.t. treaty, the new s.t.a.r.t. treaty. do you think it will be ratified. >> i think it's very important it be ratified. the president has said it's a priority issue during the lame duck session. he just finished a meeting with medvedev and restated that it was a priority issue and the reason it is is that it's first of all it's a good treaty but part of the problem is we remember president reagan trust -- the verification

procedures have now not been in place for almost a year, so we need that treaty for that. plus, i think that we really do -- the relationship with the russians is very important. they've been very helpful on iran and i think -- i hope very, very much that the lame duck session recognizes the importance of the treaty. >> senator graham, senator kerry has already said he believes it can happen in december. president obama has said it must happen in the lame duck session. do you believe that it will be voted on and ratified in the lame duck session? >> i don't know. i'm very open-minded point treaty as secretary albright indicated it's an important relationship between the united states and russia. i think russia could do more. you have two impediments. modernization, not only do we need a s.t.a.r.t. treaty but modernize our nuclear weapons left to make sure they continue to be a detemperature and make sure we can deploy missile defense systems apart from s.t.a.r.t. so two stumbling

block, the modernization program and -- jon kyl -- in its current condition, no, but jon is working with the administration to get better modernization to make sure missile defense is not connected with s.t.a.r.t. if you could get those two things together i'd vote for the treaty. i'd rather have a treaty than not but missile defense has to be better dealt with before we get there. >> let me ask you about ws. you've come back from afghanistan and iraq with a congressional delegation. and there's a story in "the washington post" about how president karzai seems to be at odds fundamentally with u.s. policy there. did that come up at all in your conversations with him? >> you know, christiane, i'm just stunned. we had a great meeting. we had dinner with senator mccain, lieberman and with president karzai. the focus of the article is the night raids. we were briefed by our military commanders that the night raids are -- we own the night

militarily making huge impact on the taliban, insurgency as a whole and having afghan partners. this didn't come up at all. we talked about, quite frankly, looking long term with afghanistan about having two air bases in a permanent fashion in afghanistan to provide stability so at the end of the day there was no discussion about a difference between petraeus and karzai in terms of strategy and i would just add this, if we cannot use night raids with our afghan partners then that's a big loss in terms of gaining security. the petraeus plan, the petraeus strategy must be allowed to go forward for us to be successful. the security gains are obvious. we're not there yet but we're moving in the right direction and to take the night raids off the table would be a disaster. >> well, let me ask you quickly and briefly on this issue of afghanistan also. was president karzai -- or rather do you believe that the u.s. troops will stay in significant numbers post the summer 2011 deadline? >> yes, i do. i think in summer of 2011 we can

bring some troops home but we're going to need substantial number of troops in afghanistan past that. 2014 is the right date to talk about. that's when karzai suggests that afghans will be in the lead and i'm very pleased to hear president obama talk about 2014. what i want to talk about is winning. having the ability to stabilize afghanistan and be a good partner with the united states forever. that means we're going to need military force for quite a while, post 2014 when the afghans hopefully get in the lead it will be great to have a couple of air bases there to help the afghans send the right signal to the regions but none is possible unless you have a reliable patter in in the afghan government so they need to do more quickly on corruption. >> do you think, secretary albright, that the president is going to move beyond this deadline? i know it's always condition based but that the acceptance now is it's going to be significant troops for much longer than next summer. >> well, they are definitely doing a review as they've begun it as we speak and they'll do a

review again larger one in december. i think that the president has said that we're not just going to abandon that we're in a transition strategy, not an exit strategy. and that it's going to be very important for there to be training of the afghan police forces in the military forces and part of the issue in reading what president karzai said is that he keeps saying he wants to take over but part of the business here is they have to be trained properly and the nato -- there's going to be a nato summit and one of the things they'll be talking about is how to do this transition policy and president obama and secretary gates and secretary clinton have said that this is going to be conditions based. >> let me ask you about engagement. now that republicans are in control of congress, the tea party influence, do you think america will keep engaging and keep its leadership roles in so many of these area or will there be a period of turning inwards whether it's protectionism or in any other foreign policy. >> i certainly hope not and

president obama spoke about the problem of protectionism and many the fact that we do have to be engaged internationally. every single problem that we are looking at, whether it's fighting terrorism or dealing with a broken nuclear nonproliferation system or the climate change and energy issues or the gap between the rich and the poor requires american leadership but it also requires being engaged in partners and so i hope very much -- we don't know what the tea party's foreign policy is and i think that senator graham has stated very clearly what the role of the republicans is in looking at it. >> do you think because you've been quoted, senator graham, just recently that there are two wings now of the republican party when it comes to foreign policy. that you will look inwards or outwards. i also want to ask about your trip to iraq. >> well, let me tell you, i think i'm in the wing that wants to look outward and have effective engagements throughout the world so that's why i'm glad to see that president obama is backing off this idea we're

going to leave in 2011 and talk about 2014 and make everything conditions based. i worry we'll fumble the ball in iraq. president -- mr. allawi, the biggest vote getter, shia married up with sunnis to give a different vision of iraq said the new government is a joke. if he feels that that's disappointing. it's very important we get a government formed in iraq that is inclusive that represents the results of the iraqi election and that is a reliable partner with the united states and the region so i've got concerns about this new government. but we need to stay involved fercly involved and i'm in the camp of the republican party that wants to work with president obama to end it well in iraq, to get it right in afghanistan, contain iran through effective sanctions and to my friends in the republican party who want to withdraw, you do so at your own peril but administration has to do their part. they're not being as effective

as i think they can be in iraq and afghanistan and when it comes to iran our sanctions efforts are not working as well as i would like so i'd ask them to step up their game, as well. >> secretary albright, do you think iraq is -- i mean you just heard senator graham say it's not inclusive and not reliable. this new government. >> well, it's a work in progress. i mean there's no question about that and every day brings a somewhat different story. i do think that the american government is very involved. vice president biden has been talking to them as have our ambassadors in a variety of places so i do think that it is a difficult process. we do need -- >> the sunnis just walked out. >> no, they came back but i think that we are going to be watching this but they understand that we will be there and i agree that we need to make sure that the place works. i think that the administration is committed to that and it is committed also to making afghanistan work. i think the issue is as senator

graham said winning, i don't know what that means at the moment but i do think that we need to have stability in both those countries and i see the administration as looking outward. we are the strongest country in the world and we do need partners and that is what diplomacy is about. >> discussion to be continued. secretary albright, thank you very much for joining us and senator graham, thank you very much indeed for joining us this morning. and as we've heard, america's growing debt is having an impact on the international stage. the draft recommendations released by the co-chairs of the president's deficit commission add up to nearly $4 trillion in deficit reduction through 2020. but the proposed spending cuts, social security and medicare cuts and tax increases are getting a chilly reception from democrats and republicans, a sure sign of the difficult task ahead. while deep spending cuts in europe are bringing people to the streets in protest. two members of the commission appointed by president obama are with us this morning, david

cote, chairman and ceo of honeywell and democratic senator kent conrad. thank you both for coming. welcome to both of you. you were just on president obama's trip abroad. how does this deficit and the big troubles and problem as head with this play in trying to gin up business abroad, jobs? >> well, i think everything ends up being interconnected. you certainly in my view want increased trade. trade you might expect i believe is a good thing and it benefits both sides and you want to have countries arguing about commercial issues, not geographic issues. >> americans are worried their jobs are going overseas. you said it can't be seen as a zero sum gain. >> the media helps to perpetuate this is that economics is viewed as a zero sum game. my loss is your gain. my gain is your loss. and the only reason you do things economically is because both sides win. when you go to the store and buy

something, you're happy, the store is happy. that seems to get lost when we start talking about economics on a grander scale. >> senator conrad, there has been so much talk now about the recommendations by the co-chairs of the deficit commission, the fiscal commission. is there any area you think that there's going to be any compromise on this? i mean they're attacking and talking about really sacrosanct powers of the american political sphere here. >> you know, a certain amount of this is shock therapy. what everybody has fastened on are the most extreme of the options but, look, the important thing for people to know is we are borrowing 40 cents of every dollar we spent. that's utterly unsustainable. it can't continue much longer. so it's got to be dealt with. if you look at our spending, it's the highest it's been as a share of our economy in 60 years. revenue is the lowest it's been as a share of our economy in 60 years so we're going to have to work both sides of the equation.

it's criticalically important we do or we will become a second rate economic power. that is the hard reality. >> but in terms of things like mortgage interest and all those things that the panel is recommending, these are things that americans have really relied on forever just about and so many of them. is that even a starter? >> well, there is as i referenced earlier, there is one proposal that eliminates all the tax preferences, all the tax deductions, all the tax exclusions, and uses 90% of the revenue to reduce rate, only 10% to reduce the deficit. i don't favor that approach. i think we need something that represents a continuation of the mortgage deduction. although reformed. to apply only to primary residences, for example, but we need to continue the child credit. we need to continue the earned income tax credit. but fundamentally if we're going to raise revenue i don't think the way to do it is to raise

rates. i think the way to do it is eliminate some of the loopholes that exist in the system. we have a tax system that is just lauded chock-a-block full of preference, loopholes allowing $100 billion a year to be lost to offshore tax havens, another to tax shelters. that can't be allowed to continue. >> on the same issue but paul krugman, the economist who is going to be on our roundtable has written this week it really is basically tax breaks again for the rich and more onus on the middle class dressed up as something new. >> yeah, well, in my view democracy seems to be uniquely suited to putting a traffic light up after the fourth accident. now, we can't wait for the fourth accident here and that's why i applaud senator conrad and senator graham for his comments trying to get out in front of something because it's too easy for the demagogues and problem cysts to respond to something just kind of go into their

neutral corner and screaming as opposed to saying there is a time to pull together. this is one of those times. there are times when we should pull apart and pleuralism and all that good stuff. but there are times we have to pull together and this is one of those times and it scares me as a conversant ceo i didn't know how bad this was going to get in the next ten years. i could see where it was today. but i couldn't see what was going to happen in the next ten years because people want to point to stuff like obama care, stimulus, bush tax cuts, and the thing that everybodymisses is it's my generation, the baby boomers who are going to flow through social security, medicare, medicaid, it's going to crush the system. and i think the american public is ready for this discussion, but i don't see anybody having that discussion with them and that needs to happen. >> well, are the democrats going to allow these cuts that have been suggested in social security, medicare? >> well, i'm a democrat and i'm saying to my colleagues it is

absolutely imperative that we take this on for the country's sake and are we going to have to make some changes to social security? certainly we are. social security is going to go cash negative in five years. it's going to go broke in 2037. medicare, we've just extended the life of it by the health care reform package which has gotten almost no attention but still it's prepared to go permanently cash negative in just ten years, so obviously those things have to be reformed. there have to be some change spls let me talk about the international implications of the currency wars we were just talking about that came up during the seoul trip. alan greenspan the former chairman of the fed has said america's pursuing a policy of weakening its currency and this is what the current treasury secretary tim geithner said in response to that. >> i have enormous respect for alan greenspan and had a privilege of working with him but that's not an accurate description of the federal reserve's policies or our

policy. we will never seek to weaken our currency to grow an economy. it's not an effective strategy for any country, surely not the united states. >> how do you assess, first, what the qe2 is, quantitative easing and isn't that viewed as certainly overseas as an attempt to weaken the currency just as they're accusing china of doing. >> well, i would say manning currency is beyond my pay grade so i don't normally get into that one. >> it affects business. >> i was one of the guys -- i've been in favor of everything so when they were talking about stimulus, home modification, the federal reserve is doing what they needed to, i don't think the country realized how close we were to a depression and i've said to the senator several times i don't think any politician gets credit for the problem they avoid. they get a lot of credit if they're in the middle and start screaming and yelling but avoiding a problem doesn't get a lot of merit. this deficit is one of those

situations. >> were you shocked that the president could not close a trade deal with seoul, a major ally of the united states, propped up south korea, troops there. how is that possible. >> i'm not at all shocked. in fact, i think the president, what he did was a show of strength rather than weakness. >> how? >> because he refused to take a bad deal. look, i've been deeply involved with negotiating with our korean friends and they have used every st strategim and the president called them on it and said, look, you said you would open our market, your market and you have an obligation to do it and i'm not going to accept just any deal in order to have a deal. thank goodness we got a president now who is standing up, even to some of our allies saying we're insisting on fair treatment if what did you think when some of our allies called american policy clueless, economic policy? >> well, this was -- >> that doesn't show a huge amount of respect. >> this was separate from the korean deal. this involved the question of what the federal reserve was

doing which is not the president. this is the federal reserve policy to inject liquidity into the economy, given the fact one in every six people in this country is either underemployed or unemployed. so certainly additional steps need to be taken. i think it's very clear on the fiscal side we have about run the course. there won't be another stimulus package so if there is going to be more liquidity it's going to have to come on the monetary side from the federal reserve and to say that they're clueless, i think, frankly, demeans those who make the charge. look, we have -- i would be quick to remind them, we have saved their bacon over and over and over all across europe. they need to remember who's been will for them when they needed help. >> on that note, senator, mr. cote, thanks for joining us. coming up next analysis on our roundtable with george will, paul krugman of "the new york times," ruth marcus of "the washington post" and foreign policy analyst robert kagan of

the brookings institution. thank you very much.

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it's too bad they call it the bush tax cuts. they might have a better chance of being extended if they were the lauer tax cuts. >> i think extending them and making them permanent will reduce the uncertainty in america. >> i continue to believe that extending permanently the upper income tax cuts would be a mistake and that we can't afford it. >> the back and forth on whether to extend the bush tax cuts, one of the topics for our roundtable with george will, nobel prize winning economist paul krugman of "the new york times," "the

washington post" columnist ruth marcus and paul kagan author from the brookings institution. thanks for joining us. thank you for being here. the deficit commission, we had two members just earlier. you've written very, very strongly about a lot of the proposals. among other things saying this proposal clearly represents a major transfer of income upward from the middle class to a small minority of wealthy americans. >> yeah, i think most important thing to understand is that the commission did not do its job. it has a bunch of ideas for reducing the deficit. some good, some really bad. some ideas about not reducing it at all but anybody it's easy to come up with ideas. ki come up with ideas by rubbing my tummy and patting my head but what they were supposed to do was produce something good enough to have an up-and-down vote, something a lot of people could sign on to and they did not do that. in particular, now, leaving aside the distributional stuff which is awful, the core of the deficit problem, everybody who

is serious knows it's health care cost and you have to reduce them, not reduce them but reduce the rate of growth. the way you have to do that is by deciding what you'll be willing to pay for. they completely wimped out on that and simply assumed they would reduce the rate of health care cost growth and said how will we do that? by monitoring and taking additional measures as necessary, so the report was completely empty on the only thing that really matters and then had a whole bunch of things that involved large tax cuts for the top bracket. what on earth is that doing in there? >> what on earth, george. >> well, paul is speaking about the commission in the past tense as though it has just reported. if fact 2 of 18 members have now given their ideas, the other 16 have yet to be heard from. the most interesting thing they did propose, interesting, "a," because it's somewhat radical and "b" because it's opaque as to what it means, 21% limit on revenue, not on spending but revenues. i don't know what a cap means.

one can't bind the other and don't know how that would work but certainly raising the early retirement age to 64 is overdue. raising the retirement age under social security to 69 by 2075 is dill la tri, should be done next thursday. >> a goal at all? i mean certainly the liberals are screaming bloody murder over this. >> actually both sides are screaming bloody murder and like most people screaming bloody murder i think they're behaving incredibly childishly and professorial as the grown-up in the room. i agree with what senator conrad said, the nonreport, the recommendations from the co-chairs were a useful dose of shock therapy just to educate people about the incredible gulf that we have between the government that any reasonable person wants, you could have a discussion about what size it should be and the revenue that we have to fund it going forward and you need to understand the

scope of the problem before you can agree on solutions. right now 75% of people believe you could balance the budget without touching medicare or social security. 75% of people believe that you can balance the budget without raising taxes. well, you could but it would be extraordinarily painful. people need to get a little bit of reality therapy. there's going to be another dose coming on wednesday when another group is going to submit their recommendations very concrete recommendations about how to do it. that's the conversation we need to have before we start picking apart solutions. >> if they were going to do reality therapy, they should have said, okay, look, medicare is going to have to decide what it's going to pay for and at least for tarters it's going to have to decide which medical procedures are not effective at all and should not be paid for at all. in other words, it should have endorsed the panel that was part of the health care reform. if it's not -- if the commission isn't even brave enough to take

on the death panels people it's not doing anything at all. it's not telling people about the kind of choices that need to be made. >> they did talk about as a fact they did talk about strengthening that commission, the famous ipab and giving it more power to go after more aspects of the health care system because it's now rather constrained. >> made no headlines with that. some are calling it the commission -- the commission to put caps on lots of stuff. it's a lot of numerical caps without any explanation of how they'll happen. >> what about the tax fight which is going to come up? does that even register with -- in terms of the brookings institution. >> it registers with one-half doesn't happen to be the half i'm in but i think clearly the whole bundle of issues will have to be dealt with including by the way issues like the national security budget and defense budget which i think a lot of people think, oh, there's a good pot of money we can go into but if you look at the foreign policy of this administration i don't see where they'll be able to find those kind of savings. >> we had rand paul on last

week. he said, for instance, he is willing to talk about cuts in military spending. he thought that that was one area where perhaps a wing of republicans could start talking about in return for a wing of democrats who could talk about real cuts in social security. >> gates is talking about it. secretary gates doesn't want to buy any more c-17s, wants to put a lid on f-22s. >> can imagnitudes? the cost of permanent extending upper end of bush tax cuts as opposed to only extending the middle class tax cuts, the cost of that is about identical to the 75-year in social security. we dot to do something -- but let's extend them for rich people. >> are you clear on where a compromise will be? it's got to be discussed before the end of the year, no? >> some years down the pike we'll get the real solution which is going to be sales panels. we'll take medical under control

and get additional revenue from -- >> on the tax -- for the bush ones specifically. >> i think we know where this is coming out. it's not where it should come out but i think because everybody agrees that we're going to extend the tax cuts for 98% of the people and because the president does not have the votes to not extend the rest, what we're going to do is have some kind of extension for a few years perhaps and senator warner from virginia has suggested this. perhaps we could tweak those cuts to actually make them more attractive to business, more stimulative, more intelligent. this is not my preference. i think that the conversation right now is deranged. we have in one room the deficit commission folks saying look at this huge hole. look at the tax increases and serious spending cuts we need to do to fill it and outside the room we're having a debate whether we should add $4 trillion to the deficit long term or a mere 3.3.

this is crazy. >> and the tax cuts will be extended. they will not be decoupled. we'll have this argument two, maybe three years from now. notice to what paul referred to, the value added tax. some time ago it was thought this was the big bomb the commission would come in with. they did not notice that last april the senate voted 83-13 on a resolution condemning the value added tax. it will not happen. >> let's take it cover seas. there is obviously in britain a value added tax. debate going on right now in england, in france, ireland, all over the place and they're doing serious austerity and people are asking can their economies handle that? what do you think is going to be the picture in britain over the next few years? >> well, it's going to be some very extreme austerity -- >> people already on the street. >> we'll see -- i think probably cameron has enough of a majority in parliament to hang on if he's tough. i mean sarkozy is fighting this battle in france right now.

i think they can probably hang on but there is a price to be paid and again sorry to return to world affair, i mean britain has taken itself out as a major player in the international system at least for awhile with the kind of cuts that they've made in their national security budget. the problem is united states doesn't have the luxury of doing that. britain can become a prerider in the international system but that is the price they've paid. >> does this -- do theiss recommendations from the commission, do they amount to any kind of austerity? >> no, it's very, very different. yes, it's austerity long although they're vague about what form that takes. again, it's caps without real explanation of how they'll happen. but there's a huge difference, two kinds of austerity. there is doing things to bring down your long run cost which is what sarkozy is doing in france, trying to change their retirement age and slashing right now when you're in the middle of a deeply depressed economy, which is cameron is doing. the first i'm in favor of. the second basically crazy. and we're going to have cameron

type austerity in this country because the state and local governments will be slashing their spending. there will be no further aid coming from washington and so if you look at the global government budget, global in a sense all levels of government in the united states we're heading -- we're in herbert hoover territory for sure in the united states. >> i just want to switch a little bit to what you heard senator lindsey graham saying about iraq and afghanistan. iraq is not happy at all with the current government and doesn't think the u.s. administration has done a good job. what do you think about that? >> i don't think it's the administration's job to pick iraq's government which is powerless to do. look, every four years, we flood this little state of new hampshire with politicians, journal ifs, poll takers, political scientists and at the end of the day we're surprised by what they do in new hampshire. why should we be priced that we're surprised at what the iraqis are doing? >> we don't have, you know, almost 100,000 troops or 50,000 troops in new hampshirewhich might have a greater impact on what voters did and the truth is

we have been an occupying power in iraq. we can't pretend we're not. it matters greatly to us what kind of government they have and i think the administration especially during chris hill's ambassadorship took a hands-off attitude. there has to be a feeling among all the different ethic seco sectarians groups they have some purchase and it feels like a shia government which is not necessarily -- >> talk about the hands off. during general petraeus and crocker when he was the ambassador there was a real hands-on. a real sense of guiding and shaper. which is better? >> well, when you're the occupying force, you have to have some guiding and shaping. with we finally leave iraq we'll have to leave it to whatever, you know, the tender mercies of its own political system which will have its own dysfunctionalities, that's fining but right now we're looking to pull out. we need to have a government that is capable of satisfying these needs so we don't see the return of al qaeda in force. you don't see the return of terrorism which is going to make it harder for us to leave. >> afghanistan, they're trying

to do the same thing in afghanistan and you've just seen "the washington post" article that karzai does not like the night raids. you heard that lindsey graham say that's very disappointing, the backbone of their strategy and you heard nothing about that from karzai. where is karzai's head on this? >> i'm not sure i know where karzai's head is but i do think we have to recognize he is in a difficult position. i'm not totally sympathetic but a little bit. he's the head of a country occupied country with war where there are civilian casualties and he's a politician. does i think he wants the united states foe pull out, no. does he have to say things which look like he's unhappy about some of the things we're doing, yes. >> i want to put up this latest commercial about don't ask, don't tell. i want to show you what cindy mccain has been talking about war policy in the military. >> lgbt teens are six to nine times more likely to attempt suicide than their trait peers. >> our political and religious leaders tell lgbt youth that

they have no future. >> they can't get married. >> they can't serve our country openly. >> what's worse, these laws that legislate discrimination teach -- >> bullies what they are adoing is acceptable. >> our government treats them like second class citizens. why shouldn't they? >> well, that's one issue of the gay situation right now but particularly gays in the military, do you think in a lame duck session that they're going to vote on this? on don't ask, don't tell? >> "a, i don't think they will, "b" if they don't, it won't happen for at least two more year. >> no real opinion on that. >> i don't think they'll get it done in the lame duck. the fascinating thing about cindy mccain she put out a statement, actually she agrees with her husband's position, wait, wait, don't do it right now on don't ask, don't tell. >> exactly. >> and what's extraordinary though is that so many former military chiefs, so many of the former defense secretaries actually back repealing don't

ask, don't tell and it looks again thanks to "the washington post" it looks like the pentagon review shows that the military in general say it will have no effect. what i don't understand is how in this day and age when you need as many people as you can fighting these wars, when you have our allies who have open gays serving in the military, how it's still this issue here and why you don't think it's going to be taken up in the lame duck session. >> but you refer to a lot of former military people. >> right. they have experience. >> well, check with -- check with the commandant of the -- a small service specialty is small unit combat. they think -- >> the review is meant to suggest the military thinks it won't have any impact. >> then the review is not representing a consensus of the military. >> it's irrational. it's incoherent. it's going to end but slowly. >> well, we're going to talk about this hopefully you'll talk about more of this in the roundtable because it is really fascinating and if it won't come up for another two years that's

a long time down the road so and the round table does continue in the green room at abcnews.com/thisweek where you can also find our fact checks in conjunction with politifact. still to come "in memoriam," "the sunday funnies" and the story of a politician who won an election and then had it taken away from him. you won't believe why. in 1968, as whaling continued worldwide, the first recordings of humpback songs were released.

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now, "in memoriam." >> i took your key. i didn't mean to do anything except see you. >> what did you see? >> i didn't take any money. i don't take money. rubelo said if i change my mind, he'll take my share. we remember all of those who died in war this week. and the pentagon released the names of 15 soldiers and marines killed in afghanistan.

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things early on to create jobs by extending the tax cuts. >> yes, extending the existing tax cuts will create jobs because the only way out of this mess is to keep things exactly as they are. >> great presidential memoirs. watch. >> permanent memoirs by ulysses s. grant. >> one side or the other had to yield principles they deemed dearer than life before this could be brought to an end. >> decision points by george w. bush. >> i'm drunk at the dinner table. >> this has been "great moments in presidential memoirs." >> this is michelle shaking it up in style capturing the hearts and minds of the indian public doing it right and there's the president being -- what the [ bleep ] is happening to the president? hey, rest of the world, may i ask you a question. why do our guys always have to dance for your cultural amusement? remember this. ♪ >> and coming up next, if a

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the midterm election here in the united states was the most expensive and also one of the most negative campaigns in recent history. many candidates simply misrepresented their opponent's positions with little consequence. but not so in britain where as abc's jim sciutto reports, one politician learned a hard lesson

in truth in advertising. >> reporter: for a country that's raised campaign mud slinging to high art -- >> reid actually voted to use taxpayer dollars to pay for viagra, for convicted child molesters. >> the taliban dan webster. >> reporter: british politics can sound pretty tame. >> the right -- >> reporter: they may have gotten tamer. this parliament member was hustled out of office. his may election victory overturned for allegedly lying about his opponent. >> so in britain politicians can lose their seat for making false statements about their opponents? wow. that's how our people get elected. >> reporter: this was the offending flier which accused his opponent of wooing islamic extremists. >> i was devastated by the process. >> reporter: but now former mp spoke to abc news exclusively. it's an enormous price to pay. you won an election and you've had that seat taken away from

you. >> the case hinged around in the end three lines in a leaflet. i took responsibility for that leaflet but my election team wrote it. this is an election matter. it's about who said what to who when. to my mind it's the stuff of politics. >> reporter: the stuff of dirty politics two british judges ruled dirty enough to nullify an election for the first time here in 99 years. not surprisingly his opponent and loser of the election welcomed the ruling. >> if you lie to the electorate you have no place in politics. >> reporter: it has sparked a firestorm. his own party abandoning him but others warning of a chilling effect on free speech like in the u.s. there are many here who aren't sorry to see a politician pay a price for lying. but critics of the decision say there is already a way to punish them. the parliamentary elections themselves, let the voters not a judge decide. the judges in woolas' case may

have changed the way elections are run with a wary look across the atlantic. >> any sense that the british people, british voters in general look to america and say we don't want to go that far? we see how bad it can get. >> there is definitely a recoil, a cringe almost in british politics about being told they're going down the american politics route. >> reporter: pending woolas' appeal they will now face a rule almost unheard of in american politics, think before they sling. for "this week," jim sciutto, abc news, london. >> and finally this morning from myanmar formerly known as burma, a rare image of freedom. pro-democracy leader and nobel peace prize winner aung san suu kyi was released from house arrest yesterday where she's been held for 15 of the past 21 years. despite their best efforts, the military hundred that has never succeeded in crushing her supporters' hope for freedom. that's our program for today. thank you for watching and we hope to see you next week. uctioa

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and other information to read and consider carefully en my husband got sick and couldn't work anymore, it was up to me to support our family. karri danner went back to school, to become a nurse. my education made all the difference but now some in washington want regulations restricting access to career colleges and universities, denying opportunity to millions of people like karri, letting government decide who can go to college. it's my education, and my job, it should be my choice. don't let washington get in the way.