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Face the Nation transcripts March 3, 2013: McCain, Graham, Durbin, Dolan, Woodward

(CBS News) Below is a transcript of "Face the Nation" on March 3, 2013, hosted by CBS News' Bob Schieffer. Guests include Sens. John McCain, R-Ariz., Lindsey Graham, R-S.C., and Richard Durbin, D-Ill., along with Cardinal Timothy Dolan, the Archbishop of New York, and the Washington Post's Bob Woodward. Plus, a panel featuring Woodward, CBS News Political Director John Dickerson, Time Magazine's Rana Foroohar, and David Sanger of the New York Times.

BOB SCHIEFFER: Today on FACE THE NATION, the sequester was all Washington's doing. Now, Washington can't figure out how to undo it.

PRESIDENT BARACK OBAMA: This is not going to be a apocalypse I think as some people have said. It's just dumb and it's going to hurt.

SENATOR LINDSEY GRAHAM: Ronald Reagan should be rolling over in his grave. Shame on everybody who agreed this was a good idea on our side.

BOB SCHIEFFER: The idea was to force Washington to find a sensible way to cut the deficit. Well, so much for good intention. Both sides blame the other. The cuts kick in. And no one knows what to do. We'll talk to two of the administration's top critics, Republicans John McCain and Lindsey Graham. Then get the other side of the story from the number two Senate Democrat, Richard Durbin. We'll go to the Vatican and Cardinal Timothy Dolan of New York for the latest on choosing the new Pope. And we'll talk politics with legendary Watergate reporter Bob Woodward who has roundly irritated another White House this one. Plus, TIME Magazine's Rana Foroohar; David Sanger, the chief Washington correspondent for The New York Times; and our own John Dickerson. It's all next because the sequester can't stop us. We're FACE THE NATION.

ANNOUNCER: From CBS News in Washington, FACE THE NATION with Bob Schieffer.

BOB SCHIEFFER: And good morning again. Yes, we are FACE THE NATION. And our lead guests this morning, not exactly strangers to the broadcast. But the first time we've ever had both of them here in the studio together, Republican Senator John McCain and Republican Senator Lindsey Graham, both in the studio. Senator Graham, I am just going to start off--

SENATOR JOHN MCCAIN (Armed Services Committee/R-Arizona): Next sequester we're including you. All right.

BOB SCHIEFFER: I want-- I want to start off, Senator Graham, with something-- part of that speech you said on the Senate floor--

SENATOR LINDSEY GRAHAM (Armed Services Committee/R-South Carolina): Mm-Hm.

BOB SCHIEFFER: --because it seemed to really kind of sum up the week that Washington just went through.

SENATOR LINDSEY GRAHAM: To me, this is pathetic leadership by the commander-in-chief. This is an abandonment of the Republican Party's belief in peace through strength. This is the low point in my time in the United States Congress.

BOB SCHIEFFER: And Bill Kristol, who is the editor of the Weekly Standard kind of the voice of establishment Republicans, he said the Republicans have now, quote, his words, not mine, "...joined the President on the road to irresponsibility." He says, history will judge both your Republican Party and the President harshly saying "They were weighed in the balance and found wanting." So where do you go from here, Senator McCain?

SENATOR JOHN MCCAIN: Well, first of all, Bill Kristol is right and the fact is that we have now reached a point where if you believe our military leaders and if there's anybody that's credible in America today, it is our military leaders, where we will not have the proper training, readiness, equipment in order to defend our national security issues, and requirements. The centrifuges in Tehran are spinning. North Koreans are testing nuclear weapons. The Mid East is in-- is in period of varying degrees of upheaval. Al Qaeda is spreading. So we are going to cut back on the training and readiness and capabilities of the men and women who are serving. We have an all-volunteer force. They deserve better. And to my Republican friends as well as my Democrat friends, if you think that's the right way to go, then you don't know what's going on in the world. And this sequester, it requires a President to lead and for us to sit down. If he will stop going out and-- and running campaign events and then-- and bashing Republicans and coming back to Washington, why not take a day and invite us all over and work this out, because American national security is at risk. I can find billions in cuts, defense spending that are absolutely necessary and appropriate, not this way. Not when our chief of staff of the Army says that he's not going to be able to replace those who are fighting in Afghanistan with qualified and trained people.

BOB SCHIEFFER: So what do Republicans need to do, Senator Graham?

SENATOR LINDSEY GRAHAM: Well, I think we need to get off the sequestration highway. Two-thirds of the federal government's exempt from sequestration. The thing that bothers me the most is that we had this construct that you try to cut 1.2 trillion over decade. And if you failed the penalty clause, would be to take six hundred billion out of defense, six hundred billion out of nondefense, but you'd exempt two-thirds of the government. So, we've already cut four hundred eighty-nine billion out of the defense. So the way forward is a big deal. This is an opportunity for Congress to look at getting off the road to becoming Greece. So what I would like to see happen is that the President and Republicans and Democrats re-- reengage where they left off with Boehner, that we, as Republicans, put six hundred billion dollars somewhere in that neighborhood of new revenue on the table by flattening the tax code, eliminating deductions, and exemptions, take that money to pay down debt, and lower rates and we go to where the real money is over time, entitlement reform to save us from becoming Greece, and find a substitute for sequestration in a big deal, not a small deal.

BOB SCHIEFFER: Do you all feel that your party is somehow being held hostage? The President has talked about kind of a commonsense caucus, and we hear reports this morning that he started calling around, calling some Republicans to see what can be done. Are people on the extreme ends of your party holding the rest of you hostage here?

SENATOR JOHN MCCAIN: I don't think-- frankly, it's the extreme ends of the party. I think a lot of it is just people who don't understand. We-- we put up a proposal and most Republicans voted for a, quote, "flexibility" for the President of the United States. I spent hundreds of hours with Carl Levin shaping a Defense Authorization Bill. So, now we're supposed to just give all of that over to the President of the United States. That's a violation of my constitutional responsibilities. So, I say in respect that it isn't so much to the extremes as much as it is a lack of appreciation of the world we live in, and this has been manifested at other times and other ways as well.

BOB SCHIEFFER: Have you all been called by the President? We hear from his people this morning that, yes, he is starting to call Republicans and I guess that's kind of the state of where we are when it's news that we hear the President has called members of the other party.

SENATOR LINDSEY GRAHAM: Well, we met with the President about immigration. We talked a little bit about sequestration, little bit about Benghazi. And it's good to talk. Why can't we solve the nation's problems? You can blame both groups because at the end of the day it's going to take both of us to do what Ronald Reagan and Tip O'Neill did. What will Ronald Reagan and Tip O'Neill able to do? Save Social Security from bankruptcy by talking to each other, getting smart people together, taking their ideas and voting on them. That's exactly what-- Mister President, you've played the role of Ronald Reagan, we'll keep Tip O'Neill. You just change the roles around. We can do the big deal if-- if we have some leadership.

BOB SCHIEFFER: Why not just keep the cuts, okay? You've got the cuts that sequestration ordered. Why not keep those cuts but write some legislation that says you'll give the President the flexibility to decide where within each of his departments those cuts will come. What would be wrong with that, Senator McCain?

SENATOR JOHN MCCAIN: Well, first of all, as-- as Lindsey just gave you the numbers, disproportionate cuts to defense. Defense is nineteen percent of the discretionary spending, the non-Medicare, non-Social Security. It's taken fifty percent of the cuts. And then you put that on top of four hundred and eighty-seven billion, it's already in train. Eighty-seven billion was already cut by secretary gates and you are talk about a, quote, "Hollow army." If you deprive the military of the ability to train, the ability to have flight hours for our pilots and air crews, the ability of our people to have the right kind of equipment to fight with, then you are putting us in danger, in my view.

BOB SCHIEFFER: But wouldn't that be a way-- way to start, though?

SENATOR JOHN MCCAIN: No.

BOB SCHIEFFER: I mean because you can say, okay, you got to cut X number of dollars out of defense, but I'm going to let you, Mister President, you, Secretary of Defense, decide where those cuts come in. You could-- you could keep the spending-- the money that goes for training and those critical things and cut military bands or something like that.

SENATOR JOHN MCCAIN: Well, go ahead. I'll-- I'll let Lindsey go ahead. But the fact is we spent three weeks on the floor of the Senate, hundreds of amendments, hours and hours of debate shaping a defense authorization which authorizes the President how to train, equip, and man the military of the United States of America. So we're supposed to just say forget all that, you-- you do whatever you want, Mister President. That isn't the-- the way the Constitution dictates that we behave.

SENATOR LINDSEY GRAHAM: Here's why it won't work. We're taking forty-two and a half-- forty-five billion dollars a year out of the Defense Department over the next decade. At the end of the decade, we're going to have the smallest Navy in the-- since 1915 two hundred and thirty-two ships. No amount of flexibility will avoid that. We're going to have the smallest Air Force in history; the smallest Army since 1940. Our defense spending will be below three percent of GDP. We will have a hollow force. Personnel costs are exempted from sequestration. We're not taking military pay and sequestering it. So you take all the systems, except military pay, and over a decade, you destroy the Defense Department. There is no amount of flexibility in the world will fix this. Leon Panetta is right. We are shooting ourselves in the head as a nation and this is the dumbest idea he's seen in his time in government.

BOB SCHIEFFER: What if-- go ahead, Senator.

SENATOR JOHN MCCAIN: All right. And-- and we'll be glad to sit down, Republicans, Democrats. We know that-- that what this requires is just as you pointed out, a way of avoiding what is-- again, in the words of our chairman of Joint Chiefs of Staff a catastrophic effect on nation-- our nation's defense. And tell me a higher priority than national security and look at the world today.

SENATOR LINDSEY GRAHAM: But the question is how you fix it. I'm not going to do anymore small deals. I'm not going to raise taxes to fix sequestration. We don't need to raise taxes to fund the government. We need to raise taxes to get our nation out of debt. We have 16.7 trillion dollars in debt. We need to clean up our tax code to create jobs by flattening it out, not fixing sequestration with more money.

BOB SCHIEFFER: What if the--

SENATOR JOHN MCCAIN: We have-- we had a bill, we had a proposal to cut spending to pay for this year's reductions in defense spending. It was not allowed to have a vote on the floor of the Senate by both Democrat and Republican leaders.

BOB SCHIEFFER: One of the things and I want to shift just a little bit.

SENATOR LINDSEY GRAHAM: Mm-Hm.

BOB SCHIEFFER: You said before you would be willing to vote for John Brennan to be head of the CIA.

SENATOR LINDSEY GRAHAM: Right.

BOB SCHIEFFER: You wanted more information about all these emails and there were hundreds of them, I guess, that went back and forth between members of the administration during that week after the attack on Benghazi.

SENATOR LINDSEY GRAHAM: Right.

BOB SCHIEFFER: Emails concerning what the administration spokesman who turned out to be Susan Rice would say that following Sunday on the Sunday broadcast, including this one. Have you gotten any information? I understand the administration has released some emails.

SENATOR LINDSEY GRAHAM: The administration-- they have released some. One, her story is completely collapsed under scrutiny, and I mentioned this to the President. Here's what I want. I want the FBI interviews with the survivors, two days after the attack. They were turned over to the Intelligence Committee and everything was blacked out. They are now taking another chance to providing the FBI interviews so you actually can read what they say. The emails around (INDISTINCT) changing the talking point, there is a big gap. I want to know who the survivors are so we can go interview them. The cut-- the transmissions from Benghazi to Washington in real time on the night of the attack, what were people asking for, what were they saying. All of that information was given to the committee completely blacked out. And I told the President, this is to learn. I think Benghazi is Exhibit A in a failed foreign policy. Leading from behind is not working, and we're trying to find out what happened on that night so we won't have other Benghazis and I'm not going to vote for Brennan until the CIA, who said they did change the talking points, lets us know who did it and why and we have a picture of what happened in real time in Benghazi.

BOB SCHIEFFER: You're not going to vote for him but will you try to hold up?

SENATOR LINDSEY GRAHAM: I will stop. I think John and I are hell bent on making sure the American people understand this debacle called Benghazi. The FBI and the CIA never talked for weeks. We're going back to the pre-9/11 model. We don't know what the interviews of the survivors tell us. There was never a video that spawned a riot. That whole story has just been debunked and we're going to get to the bottom of it.

BOB SCHIEFFER: Senator.

SENATOR JOHN MCCAIN: I've had questions, written questions for Mister Brennan for nearly three weeks now. We've not received a single answer. I think that we deserve at least an answer to those questions and I have some questions about torture.

BOB SCHIEFFER: So you intend to join Senator Graham in blocking this from coming to a vote?

SENATOR JOHN MCCAIN: You know I-- I hate to threaten. We hate to-- to say, wow, the story tomorrow will be McCain and Graham threaten to. Why don't we just get the answers to these questions? They're not-- they're not tough questions and they're legitimate questions.

BOB SCHIEFFER: But until you get the answers, you're not going-- going along with it?

SENATOR JOHN MCCAIN: Well, we certainly think we deserve the answers, and, I think, again, it's our responsibilities on advice and consent to get answers to questions about nominees to important positions.

SENATOR LINDSEY GRAHAM: Bob, it's a time-honored tradition in the U.S. Senate that when an administration-- any administration puts somebody forward, the senator has concerns or questions or information that they would like, that there is a give and take and I'm going to insist on that time on-- I'm not going to vote on a new CIA director until I find out what the CIA did in Benghazi.

BOB SCHIEFFER: All right. Gentlemen, it's always a pleasure to have you, thank you.

SENATOR JOHN MCCAIN: Sixty thousand dead in Sy-- Syria and we still haven't acted. Thank you.

BOB SCHIEFFER: Thank you very much. Well, for the Democratic response to all of that, the assistant Senate leader Richard Durbin joins us now from Chicago. Senator, the floor is yours.

SENATOR DICK DURBIN (D-Illinois): All I can tell you it was great to hear my colleagues, the two amigos. Bob, I spend hours each week with both of them and a number of senators, Democrats and Republicans. We're trying to write a new immigration bill. I think people who have given up on Congress would be encouraged to know that there is a real positive dialogue, bipartisan dialogue, and, perhaps, just perhaps we can set the stage for an even more positive dialogue when it comes to the budget.

BOB SCHIEFFER: So you actually think that something can happen and-- and you're working with them? You think there really is a serious bipartisan effort on this one.

SENATOR DICK DURBIN: Oh, there's no question about it. Chuck Schumer and myself and Bob Menendez, Mike Bennett, Marco Rubio, Jeff Flake, and the two amigos you just had on board here have really buckled down. We meet virtually every day in a bipartisan effort to write an immigration bill. The President supports this. I think it can be achieved. And the point I want to make when I listen to Lindsey Graham and talk about where we need to go with deficit reduction, what he is saying is basically the construct of the Bowles and Simpson Commission, the notion of putting everything on the table--revenue, spending cuts, entitlement reform. If we did that, we'd avoid these manufactured crises like the one we're in right now.

BOB SCHIEFFER: Well, I think we are beyond the going arguing about whose fault it is on how we got here. I think there's plenty of blame for-- for both sides and I would guess you'd probably agree with that. But where do you go now? What is the next step? They're saying the President needs to get people together again and try to sit down at the table and talk about this. How do you think you get them there? And is that the way to do it?

SENATOR DICK DURBIN: You know, Bob, I'm almost afraid to say it that the American people over the past two years-plus have been lurching or watching Washington lurch from threatened government shutdowns, threatened economic shutdowns, the words fiscal cliff become common in the American language. Now we know what it's all about. The sequestration word is very common. Unfortunately, in three weeks we face another one. It's the expiration of the continuing resolution, which means the funding bill for government expires in three weeks. We have to agree how to finish the year until September thirtieth. It creates an opportunity for to us sit down, the President and congressional leaders, and come up with an answer that is sensible to deal with sequestration, as well as with the remainder of this year.

BOB SCHIEFFER: Have you ever seen Washington as gridlocked as it is at this particular time?

SENATOR DICK DURBIN: No, I never have and I have been through some pretty rough periods of time. I can recall the ascendancy of Newt Gingrich and what it meant to us. It was a very frustrating and emotional upheaval in Washington, but what we have here is a steady diet and I have-- I don't want to point fingers, but I will. The House Republican approach to this is we're either going to do it exclusively with Republicans or we just won't do it at all. Only when they're pushed to the absolute extreme will they allow a bipartisan vote. What you heard this morning from my two Republican colleagues--and I hope what I'm saying is that we're trying to establish a new standard in the Senate, a bipartisan dialogue that might lead to a solution. If the House would embrace the same basic concept, I am certain, certain the president would sit down and work in good faith to get us through this.

BOB SCHIEFFER: Let me ask you about one side show that came along this week and that was the flap between Bob Woodward, the legendary Watergate reporter, and the White House. Woodward basically suggested that the White House was trying to intimidate reporters. What's your take on that?

SENATOR DICK DURBIN: Well, it's all about Gene Sperling, an economic adviser to the President, as he was to President Clinton, and emails he exchanged with Bob Woodward. I have known Gene Sperling for many, many years. And if you ask everyone who knows him to describe him, the word threatening is the last word that would come out of your mouth. That is not Gene Sperling. That's not who he is. What he said is I think you'll come to regret what Bob Woodward asserted and a regret can mean more than whether or not he's going to be threatened in terms of his status with the White House. He may come to regret it because it's wrong. Gene Sperling is not a threatening person. And although emotions were running high, at the end of their email exchange, it's pretty clear they're both on a very friendly status.

BOB SCHIEFFER: All right. Well, Senator, we want to thank you for giving us the Democrat side of the story. We will be back and we'll talk to Bob Woodward about this in just a minute.

BOB SCHIEFFER: Well, we're back now with the legendary and a lot of people are called legendary--you really are one, Bob--Bob Woodward the author of the book The Price of Politics, which is considered the definitive book on how this sequester came about. But, of course, you're best known for the Watergate days and-- and your work there, Bob. You've been in a scrap or two with various White Houses over the years, starting with the Nixon White House. But you-- you took note when White House official Gene Sperling, it turned out to be, told you-- what did he say-- you would regret?

BOB WOODWARD (Washington Post): Right, staking out this position.

BOB SCHIEFFER: And you took that as sort of a veiled threat.

BOB WOODWARD: What happened two very good reporters from Politico came to me and they'd written a very thoughtful piece about bullying from the White House of other reporters and people and kind of a message management that they thought was extreme and I cited that Sperling emails an example of not the way to operate. I never said it was threatening--

BOB SCHIEFFER: Mm-Hm.

BOB WOODWARD: --or I just said, you know, this just won't work and as-- it-- it won't work.

BOB SCHIEFFER: But, basically, what you said was, look, I'm a grown person. I've been around a long time, these things don't-- don't bother me, but you kind of worry that maybe more inexperienced reporters might be intimidated by such.

BOB WOODWARD: Look, like-- like all White Houses, they don't like to be challenged. I spent months on this book, and there-- there's a part of the reporting that's not in the book that I did a column a week ago for the Post and showed that the White House was really came up with the idea of this sequester. It's-- it's an awful world, automatic spending cuts. And they didn't like that, and I have had a back and forth with Gene Sperling. Now today, this morning, I understand he said, you know--

BOB SCHIEFFER: What he said was, "I hope we can put this behind us."

BOB WOODWARD: And-- and the answer is yes. You know, he's a peacemaker. I am in the business of listening, and I'm going to invite him over to my house if he'll come and, hopefully, he'll bring others from the White House, or maybe the President himself, and we can-- you know, this is-- talking really works.

BOB SCHIEFFER: It really works on this. All right. We've got a minute here. How do you think the country, Washington, gets out of this mess we're in now?

BOB WOODWARD: I think-- I think what's sad is that there is this bunker mentality in the White House and within the Republican Party and something surface and-- surfaces and people jump on it and say, "Oh, this is good for Obama, so we're going to embrace it. This is bad for Obama, we're going to denounce it." And what we forget is-- and, you know, you live in this zone. You and I have been around for a long time, it's very narrow zone of neutrality, nonpartisan. Let's find out the facts. That's what I'm trying to do. And-- and I think it's sad that the President hasn't seized control of his own presidency in fact.

BOB SCHIEFFER: All right. We'll talk a lot more about this during the round table. I'll be back in just a minute with my own thoughts about this.

BOB SCHIEFFER: Last week I heard the Senate Chaplain pray for help to save us from ourselves. I would guess a lot of Americans are praying to save us from them, them being official Washington. What we saw last week was a complete breakdown of the American political system and a government and administration, the Senate, and the House that has lost the political will and, yes, the political competence to fix it. The so-called sequestration was designed to inflict such horrible cuts in federal spending that no one with half a brain would allow them to happen. This, the theory went, would leave Congress and the White House no alternative but to find sensible ways to put the country's finances in order. I would never say the majority of people in Washington have less than half a brain but the fact is sequestration did happen. It is as if Washington has separated itself from the rest of America in order to spend its time on things of concern only here, score settling, fund-raising, blame-gaming, while leaving the rest of the country to fend for itself. I don't know where this goes, but I do know it is not how America became a superpower, and if history is a guide, certainly, no way to remain one. Back in a minute.

BOB SCHIEFFER: Well, some of our stations are leaving us now. For most of you, though, we'll be back with a lot more FACE THE NATION, including an interview with Archbishop Timothy Dolan of New York, one of the cardinals working to pick a new pope. And we'll have our political round table.

BOB SCHIEFFER: And welcome back to FACE THE NATION. Cardinal Timothy Dolan is the archbishop of New York, of course, and he joins us from the Vatican where he and the other cardinals are preparing to elect a pope. Your Eminence, thank you so much for joining us. We know that the conclave will start in a matter of days, but what I am interested in is what happens between now and when the conclave starts?

CARDINAL TIMOTHY DOLAN (Archbishop of New York): Bob, happy to answer. First of all, happy Sunday morning to you, and it's good to be with you. I appreciate the invitation. You ask a very important question, Bob, because the next week is mightily important. When the conclave will start, we don't quite know, but the congregations of cardinals--that's different than the conclave--the College of Cardinals will begin meeting tomorrow morning, Monday, at nine thirty, will go four hours every morning, and one of the first things we'll decide is when the conclave will start. Now the time in between, Bob--and I would predict that's probably going to be at least a week--is very important. We'll pray together. We'll talk together. And we'll get to know each other better.

BOB SCHIEFFER: Well, what actually happens? I mean, I know you have dinners together. You talk about praying together. Do-- do people actually politic? I mean I am a political reporter, and I know how it works--

CARDINAL TIMOTHY DOLAN: Sure, sure.

BOB SCHIEFFER: --in the days before a political convention convenes, people meet together.

CARDINAL TIMOTHY DOLAN: Yeah.

BOB SCHIEFFER: How does that--

CARDINAL TIMOTHY DOLAN: The analogy would not hold, Bob. And you're-- you're wise to see that. No, this isn't the New-- this isn't the New Hampshire primary. Nobody would campaign. We're just getting to know each other better. We'll listen to one another, from what I understand. I've never been part of it. Every cardinal will have the right to speak, and every cardinal will be expected to speak for four or five minutes, mostly responding to the question, "What issues of pastoral urgency do you need-- do you see challenging the church today?" And we'll listen. We'll listen hard. It's going to be very important to me to listen to cardinals from India, cardinals from Latin America. They tell us it's going to be very important for them to listen to us and this will be a time, not only that we begin to kind of get a good consensus, and what are the major issues, the vision that we need, the mission of the church, but we'll get to know one another and probably decide which man we're going to elect to be the next successor of St. Peter.

BOB Schieffer: The Pope himself said his papacy has been marked by periods of dark as well as periods of light. He said at some points as if there were times--

CARDINAL TIMOTHY DOLAN: Mm-Hm.

BOB SCHIEFFER: --when the Lord was asleep. What are the issues that you think are going to be discussed and what do you, as the Archbishop of New York, see as the major problems now, Your Eminence, facing the church?

CARDINAL TIMOTHY DOLAN: Sure, Bob. The Holy Father was remarkably realistic in his assessment of his eight magnificent years of success repeater. We all know, though, in the two thousand-year history of the church, there has always been those difficulties, those flaws, those sins, those-- those sorrows to which he referred to so eloquently. What do we see now? Even in the informal discussions among the cardinals, I hear cardinals speak about issues of religious persecution throughout the world, that Christianity and-- and Catholics seem to be in the crosshairs of fanatics. I hear religious liberty. I hear restoration of the nobility of the vocation to marriage and family. I hear the difficulty that we have, particularly in Europe and North America that's been well documented and that affects not only the Catholic Church but every religion that a growing number of people have no trouble with God, no trouble with-- with faith, but they have a lot problems with religion and with the church. For us as Catholics, that's a-- that's a tough one because we always see Jesus and his church as one. So to restore that sense of-- of luster and-- and reform and purity to the church to attract more people, that's another one we hear about. You hear again about the new evangelization. How are we going to win back those nations, especially in Europe, that are nominally Catholic but have drifted from-- from-- from Catholic fervor? You hear about the growing churches in Asia and Latin America and Africa where there's more people than they-- than they know what to do with, where there's-- where there's massive material needs. They need more churches. They need more schools and hospitals. They need more priests and sisters and qualified lay leaders. You hear all about the joys. You hear all about the sorrows. It's a magnificent symphony in the-- in the life of the church that-- that I find very embracing, very uplifting.

BOB SCHIEFFER: Well, there is also, Your Eminence, things like the cover-up of sexual crimes, pedophiles and you got the cardinal from California--

CARDINAL TIMOTHY DOLAN: Sure.

BOB SCHIEFFER:--who was accused of-- of-- of not being candid about things out there on that front. Are we going to hear something about that because I-- I take your point about all of the points that you just made. I understand that. But what we read about and what we hear about are some of these very unsavory things that-- that have come to light.

CARDINAL TIMOTHY DOLAN: You bet.

BOB SCHIEFFER: How-- how seriously do the cardinals take these things, Your Eminence?

CARDINAL TIMOTHY DOLAN: We have to take with the utmost seriousness, and we have to have a sense of contrition, realism about-- about confronting that. You're dead right. There's no-- there's no cardinal with his head in the sand when it comes to these issues. The church, of course, while it is not of the world, it does exist in the world. So it shouldn't-- it shouldn't surprise us that the afflictions of the world-- and you've just named some of them, sexual immorality, perversion, abuse of children, that affects all elements of society and culture are particularly hideous when it comes to the church. And that that will be an issue, I predict it will.

BOB SCHIEFFER: Your Eminence, what about some of the more radical ideas that we hear from time to time about the-- about their church. I mean should priests be allowed to marry?

CARDINAL TIMOTHY DOLAN: Aha.

BOB SCHIEFFER: Should women be allowed to become priests? Will those kinds of things come up for discussion?

CARDINAL TIMOTHY DOLAN: Well, from what I hear, there's complete liberty of what cardinals want to say. From my own point of view, Bob-- and, again, I am a rookie. I've never been in one of these before-- I wouldn't think those kind of things would come up explicitly. You've got to remember, Bob, that in-- that in Catholic wisdom, we're electing the successor of Peter, whose job description says he is to preserve the integrity and the patrimony of the faith. Okay. So, if you're talking about radical changes, that's not part of the job description of a pope see. He's supposed to preserve an hand-on intact. Now, big-- here's a big distinction. We can talk and we better talk about perhaps a more credible, convincing way of expressing those immutable timeless truths will of the church because sometimes people tell us they find those things tough to accept or tough to believe. We better think about that. We can't change the what. We can change the how. And that how we teach and how we pass it on. And that will probably be part of our conversations.

BOB SCHIEFFER: well, Your Eminence, I want to wish you the very best as you embark on this-- on this mission, and hope you will keep us informed.

CARDINAL TIMOTHY DOLAN: Thanks, Bob. It's-- I'll keep you informed. I'll keep you in prayer. And I still got that coffee cup you gave me the last time I was on. All right.

BOB SCHIEFFER: All the best, Your Eminence. And we'll be back in just a minute.

BOB SCHIEFFER: And we're back again with Bob Woodward of the Washington Post; the assistant-- assistant managing editor of TIME Magazine Rana Foroohar; the chief Washington correspondent for the New York Times, David Sanger; and CBS News political director, John Dickerson. Boy, you don't have much of a title compared to these other people?

JOHN DICKERSON (CBS News Political Director): Well, I'm hoping to get something out of Rome in the next couple of weeks.

RANA FOROOHAR (TIME Magazine): More than a coffee cup.

BOB SCHIEFFER: Right. Does anybody here think that the Catholic Church could do better--I'm not saying for pope--but if they were looking for somebody to make their case, could they find a better spokesman than Cardinal Timothy Dolan?

BOB WOODWARD (The Price of Politics): No, they could not. I wonder if he has a chance. I-- I don't think they're going to pick an American pope. That's almost a certainty. But there's a kind of reasonableness and, hey, we're listening. We're talking. Maybe he should come do some mediation between the White House and the Republicans.

BOB SCHIEFFER: I was going to say it.

JOHN DICKERSON: You know it's interesting that we hear political parties when they are in a fix, and there's always a debate is it the underlying message or the messenger that's the problem. And here you heard the cardinal basically say it was just the kind of the message-- the packaging, not the underlying message that's a challenge for churches and for political parties.

DAVID SANGER (New York Times): But he also went out of his way to say that the issues of sexual abuse and so forth have to be addressed in this conclave. And I haven't heard many others say that.

BOB SCHIEFFER: Yeah, I-- I thought it was very telling what he had to say. Well, all right. So we know the sequestration has happened. This thing that everybody said is so stupid, so awful, so ridiculous that Washington would have no alternative but to find a better way to do it. They couldn't find a better way to do it. What happens? What happens next, David?

DAVID SANGER: Well, I think the most remarkable thing is what's changed in the past eighteen months is, as you said, everybody concluded that this was such a meat cleaver way to cut the budget that it would never be allowed to happen. And what happened--

BOB SCHIEFFER: It happened.

DAVID SANGER: --as soon as it was going to-- not only did it happen, but Congress left town in the days beforehand. So, there's been no sense of crisis here. And I think actually the absence of a sense of crisis is in some ways the news of what's going on. That you saw President Obama make, I think, a fairly serious miscalculation. He believed that these cuts in defense would be so outrageous to the Republican Party they would never let it happen. Well, it turns out that that part of the party that wanted to see cuts happen to shrink government won out over the traditional side that would defend the Defense Department.

BOB SCHIEFFER: But what happens next, John?

JOHN DICKERSON: I think what happens next-- we've been so pessimistic and there's-- it seems every minute we get another reason to be pessimistic about what's happening in Washington. Let's try and find the optimistic case which is, we've had this bad thing happen. Republicans can now say we didn't bend to this President on the question of revenues. Now Republicans were in trouble with their base on having buckled on two previous fights over the fiscal cliff and the debt limit. So, they can now say, look, we stuck. There's also a consensus that they need to go big again, that they-- that everybody wants to get back to regular order. And this month we're going to have a budget from the White House, the Senate--maybe they've said they'd do one before and haven't--and House Republicans. Everybody is going to offer a budget. We're going to get back to the actual big discussion about taxes and spending and investment and how to do things in the time of scarcity. That may get us back to a big conversation. Why is that important? Because in a big conversation you can make this trade that everybody knows has to happen, which is Republicans accept a little bit of revenue, and the President offers some entitlement cuts that he's already offered, so we get back to the big deal. That's failed many times before, but in a time of despair, that might be a little glimmer of hope.

BOB SCHIEFFER: Rana, you're-- you are our economics person here at the table today.

RANA FOROOHAR: Mm-Hm.

BOB SCHIEFFER: How bad is the impact of this going to be on the economy?

RANA FOROOHAR: Well, most economists say it's going to shave about a half a percentage point off of growth. And what that means is that the recovery, which might be more robust at this point, is probably not going to feel that way. We're going to be in a two-percent growth economy, which is basically where we have been for the last couple of years. And that's too bad. But one-- one thing that's very interesting is that markets are nearing a record high. They're almost-- they're-- they're a few hundred points from being where they were in 2007. That's in part due to the fact that the Fed has buffered a lot of the problems in Washington by this asset buying program that's been going on for some time now. Stock markets are up, housing is coming back. So I think that the recovery in the private sector that's happened and will continue to happen is going to buffer some of what's happening and the dysfunction in Washington. So I'm an optimist too.

BOB SCHIEFFER: What-- what about unemployment? Will this--

RANA FOROOHAR: Yeah.

BOB SCHIEFFER: --have an impact on that?

RANA FOROOHAR: I think unemployment is going to hover around 7.9 percent, roughly where it's been. I think we're going to see a slow recovery because areas, again, like housing and construction and manufacturing are growing. It's just too bad because if we have things together in Washington, I think we'd have a fairly robust recovery by now.

BOB WOODWARD: And I-- I agree with that. And, in fact, you might have more than a robust recovery. And I-- I-- I think what's missing here is a discussion of the impact on real people--

RANA FOROOHAR: Hmm.

BOB WOODWARD: --and the human toll here for something everyone says, this is total idiocy, and by conservative estimates hundreds of thousands of people are going to lose their jobs. Now the people who-- you know, the President of the United States, the leaders in Congress, the members of Congress, I think have a moral responsibility to the people, and if you devise something where hundreds of thousands of people are going to lose their jobs, people are going be furloughed who cannot afford it. I mean this is-- this is very-- this is sad; and out in the country people are saying not just what's going on but this is madness.

BOB SCHIEFFER: You know I-- I keep thinking back to Casey Stengel, who was the-- the great baseball manager, and when he was managing the Mets in those early years when they couldn't do anything right, and one day he just looked up and said, "Can't anybody here play this game." To me, it is a question of competency here.

BOB WOODWARD: But he-- and the President at the end of the week--

BOB SCHIEFFER: I mean on both sides. I'm not talking about Republicans. I'm not talking about Democrats.

BOB WOODWARD: Yeah. No. No. I-- I agree, but the President talked about a caucus of common sense--

BOB SCHIEFFER: Yeah.

BOB WOODWARD: --which, it's great a phrase and that's just-- and he could--

BOB SCHIEFFER: Well, there you can have a small room.

BOB WOODWARD: --he could-- he could lead that.

BOB SCHIEFFER: Yeah.

BOB WOODWARD: He could lead that. And he-- he was saying, oh, there's no secret formula. There's no secret sauce. But there is. And that is for him to lead.

DAVID SANGER: And, Bob, you know, we-- we forget that in some ways we're closer to a solution here than we think. My colleague Jackie Calmes had a fascinating story in the Times this morning, laying out how close we are to basically four trillion dollars in cuts, one and a half trillion of them came from the reductions that were agreed on by Congress and the President in 2011. The seven hundred billion dollars from the tax increase they agreed on. There's another seven hundred billion dollars in projected reductions in the debt that will reduce the amount of interests we have to pay. So we're getting much closer and there are some in-- in reductions in medical costs as well. We're a lot closer to that initial goal. So doing what John just described before shouldn't be all that hard. We've seen bigger deals.

JOHN DICKERSON: Because the President can say to Republicans, look, we've cut a lot, and so-- and I-- and-- and Republicans can say we didn't give in on this latest request for revenues. So there's-- that gives a little bit of breathing room for-- for-- for each of the sides. And what hasn't been resolved, though, are two big questions--one, what to do with entitlements. All of this cutting that's going on is just not the main thing. The main thing is the increasing cost of Medicare and Medicaid. And adults have to get together on that, because if you look at the polling, basically the country doesn't want politicians to mess with entitlements, Republicans or Democrats. The only way they are-- are going to to solve that big problem is if they come together. And the other thing is growth. How does the government either get out of the way or help economic growth? Those are the two main important conversations that can't even begin to happen unless we get to this: Back to the big deal, back to the big conversation, where everybody can run Congress the way it's supposed to be run, go back to what they call regular order so that these can get worked out in a non-crisis atmosphere and that's-- that's the hope now.

RANA FOROOHAR: You know one thing that is important to remember, too, is looking at this in a global context. We're actually back where we were in August of 2011. We benefited from the fact that everybody else was doing worse than we were. Europe was in crisis. Europe is back in crisis. China is growing much more slowly than it used to be. So we're still the prettiest house on the ugly block that is the global economy and that's an opportunity if Washington would just cease it to really spur growth.

BOB WOODWARD: But-- but what do people out there hear? They hear the White House saying it's all the Republicans' fault. You hear the Republicans saying it's all Obama's fault. And it's-- they're-- they're in their bunkers, and then something happens, and they all call out their bunker maintenance crew, and they say, they are the ones that did this, they are the ones that did that. And I-- you know, I-- I really think it's fixable with conversation. And John's right that this not touching entitlements when people talk about the long-term debt and deficit, that's the problem. And you've got to address it, and it's a bitter pill to swallow. The President has said he would accept it. Over the summer he told me, he said, it is untenable--strong word--to not cut these things. Okay, let's start.

BOB SCHIEFFER: And I just worry that Washington has forgotten how to compromise. Washington seemed to-- maybe-- maybe these people are just too new to Washington to remember how people used to get together--

RANA FOROOHAR: Mm-Hm.

BOB SCHIEFFER: --and I don't want to sound corny about this, but they talked to one another. Now they go out and run ads against one another. That-- that's not working. The old way, maybe was old fashioned, but the old way worked.

JOHN DICKERSON: Well, there are a few people, you know, blowing on the dying coals of-- of compromise in Washington on both the question of immigration. You've got people on both sides-- in fact, Republicans have say-- said to the President, stay out of this conversation. We're doing okay over here in our little attempt to build a bipartisan conscious. On gun control there is a little bit of a bipartisan group working together to get something done. So it is happening, mostly out of the spotlight. Once the spotlight arrives, everybody misbehaves.

DAVID SANGER: You know the place to look for this is just where Bob said in-- in Medicaid, Social Security, and also in Defense. I'm a-- I'm big believer in the Willie Sutton rule. You-- you rob banks because that's where the money is, okay. So our total national security budget has basically doubled since 9/11. There's almost no one you talk to in the senior levels in the military who won't tell you that there are big cuts you can do there if you do them smartly and certainly they are not done smartly, yeah, in this. But, you know, you want more money in cyber. You want more money in drones. There are now more drone pilots being trained by the United States than there are pilots--

JOHN DICKERSON: Yeah.

DAVID SANGER: --for human-- human-based planes, more in Special Forces and a real discussion about which old Cold War systems we no longer need. That's the hardest thing to cut. They're in a lot of different Congressional districts.

BOB SCHIEFFER: Let me-- one of the big things that happened this week, John Kerry, the new secretary of state, said we're going to give some more aid than we have been giving to Syria. Where does that go? Is that a good thing? What do you think, Bob?

BOB WOODWARD: It-- it-- it makes sense. And the more that can be done, I-- I suspect there are covert ways they're doing things, and, you know, this is-- this is a big deal. Again, it goes to the moral authority of the United States. You-- I mean tens of thousands of people killed. You got to do something. You've got to do the maximum. The President's committed to not putting troops on the ground. That's probably quite smart.

BOB SCHIEFFER: One other question-- I'm not even going to make a question. I'm just going to say two names. Dennis Rodman and Kim Jong-un, the head of North Korea. They have their summit.

DAVID SANGER: This has been a great scene. My favorite part--

BOB SCHIEFFER: What was (INDISTINCT) I mean?

DAVID SANGER: My favorite part about this, Bob, is President Obama sent at least one and maybe two secret missions to the State Department and NSC officials and so forth to Pyongyang. They never even got an audience with anybody other than midlevel functionaries in the-- in North Korea. Dennis Rodman shows up and he's laughing with Kim Jong-un and watching basketball together. And as somebody said to me yesterday, maybe they should have just given him the-- the nuclearization brief and just-- and, you know, it would be interesting to see Dennis Rodman as a nuclear negotiator, don't you think?

BOB SCHIEFFER: Well, I mean-- I mean, you know, we had ping-pong diplomacy back there.

JOHN DICKERSON: Yeah, this is oddball diplomacy.

BOB SCHIEFFER: Hardball diplomacy.

BOB WOODWARD: But that's serious. I mean we better worry about North Korea.

BOB SCHIEFFER: Yeah.

BOB WOODWARD: David knows about this.

BOB SCHIEFFER: Absolutely.

BOB WOODWARD: I mean, they-- they have the bomb, and it is a regime that you can't really figure out.

DAVID SANGER: And, Bob-- Bob's right. For all of the jokes about how strange the Ko-- country is and I was there twenty years ago, and it's pretty strange. The fact of the matter is they've now conducted a third nuclear test.

JOHN DICKERSON: Yes, they have.

DAVID SANGER: We are still living in the fiction that they're not a nuclear power. They are now a nuclear power and the United States just doesn't want to admit to it. And they don't want it to admit for a good reason, which is that the North Koreans want to be treated like Pakistan, that we basically admit they've got the weapon and move on.

BOB SCHIEFFER: All right. Well, thanks to all of you. I-- I'm not sure we got many-- we solved any problems here, but we started down the road. We'll be back in a minute with our FACE THE NATION Flashback.

BOB SCHIEFFER: Pope Benedict's resignation meant one of the most fascinating and mysterious rituals of the Catholic Church. The papal conclave would soon begin to elect a new pope for a process that hasn't changed in a thousand years. That's our FACE THE NATION Flashback.

BOB SCHIEFFER: The cardinals gather in Vatican City, the voting begins, and the world waits for a smoke signal.

MAN: If the smoke from this tiny stove is white, it would signal the election of a new pope.

BOB SCHIEFFER: But sometimes the smoke signals aren't very clear. In August 1978, when Pope John Paul was chosen, the crowd in St. Peter's Square couldn't tell if the smoke was white or black. And when Pope Benedict was selected in 2005, it wasn't just the crowds in Rome who were confused. We have some smoke rising again from the Sistine Chapel. At this point we do not know for sure what color it is. In this time when we can flash news around the world by the speed of light, and yet we're all sitting here trying to figure out if we're seeing white smoke or black smoke. All eyes will soon be on that chimney again, and even in the age of Twitter, we will all be doing what people have done for thousands of years--trying to read the smoke signals. Our FACE THE NATION Flashback.

BOB SCHIEFFER: Well, that's it for today. Be sure to tune in next Sunday when we'll be talking with former Florida governor, Jeb Bush. And tomorrow CBS THIS MORNING kicks off a special series called, Eye-Opening Women. They'll talk to former Supreme Court justice, Sandra Day O'Connor. That's it. Thanks for watching FACE THE NATION.

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