>> what you think i tree can be -- what do you think a tree candy? can it be stronger than steel? can at the treaty by degradable plastic? can it be fuel for our cars, or clothing, or medicine that fights cancer? with our tree cell technology, we think it can. weyerhaeuser, growing ideas. >> we believe the borders of the israel and palestine should be based on the the 1967 lines with mutually agreed swaps.

>> this week on "inside washington," on the eve of the israeli prime minister's visit to washington, president obama sends a message. >> i made a mistake. >> the newt gingrich campaign falls victim to foot-in-mouth disease. keep an eye on what president obama's former ambassador to china, jon huntsman. as the u.s. hits the debt ceiling, the gang of six is now a gang of five. it is the wealthy and powerful head of the imf end up in a rikers island jail cell? >> non-consensual, forced sexual acts. captioned by the national captioning institute --www.ncicap.org-- >> israeli prime minister netanyahu and president obama i have never had what you would

call a warm and friendly relationship. you may recall that netanyahu visited not too long ago and the white house refused to let photographers take pictures of the two of them. on thursday, the day before netanyahu was to our right here, president obama in a speech on the middle east said that the boundaries should be based on pre-1967 lines. >> our commitment to israel's security is unshakeable, but precisely because of our friendship, it is important that we tell the truth. the status quo is unsustainable. >> the israeli government said immediately that a return to pre-1967 borders would render israel indefensible mitt romney said that president obama has brown israel -- thrown israel under the bus. do you agree, charles? >> by talking about the 1967

lines, it is essentially to give away the only bargaining chip israel has in negotiations. all it has is land. in return, nothing from palestinians. in fact, taking away israel's negotiating leverage to a palestinian authority that has just signed a negotiated agreement -- that has just signed an agreement with hamas that is committed to israel's destruction. >> colby? >> i would not say under the bus but it took away a key negotiating position. more than that, i am not sure the president's position reflects the reality that israel faces. they are in a tough neighborhood, not a neighborhood that will guarantee their existence. the united states should not be in the position of weakening israel. >> nina? >> the reality that israel faces

is that every time it has declined to negotiate with somebody and have a tougher and tougher position, the person that was the next negotiator was worse than the first one. they are in a neighborhood where things are disintegrating for them more rapidly, i think, then in modern memory. that is very dangerous for israel at this stage. it is not the same place it was just a few years. >> mark? >> president obama did the politically unexpected, he spoke publicly the truth to a friend, that the dream of a jewish democratic state cannot be fulfilled with permanent occupation, and he is absolutely right and for that he deserves credit. >> that is a complete straw man. there is no serious party in israel that speaks about

permanent occupation. netanyahu, on behalf of the most right-wing government in at least 30 years, has accepted a palestinian state, has been seeking negotiations, unlike what nina said. it is the palestinians that have refused to rejoin in negotiations, and what obama has done is to undercut any leverage israel would have. >> i would quote shimon peres, who said that the children of the slaves of the egyptians can not be occupiers and masters of other people. we have a continued expansion of settlements, it has been hijacked an uninhibited by the united states policy. -- unchecked and uninhibited by united states policy. barack obama did speak truth to the israelis.

the united states is basically alone as a defender and that is an unsustainable position. >> colby, weren't they talking about this in 2000? >> president bush indicated that negotiations would have to be along the lines of u.n. resolution 242, which talks about going back to that -- >> no, it doesn't. >> but it also said that the situation had changed dramatically on the ground and the notion of going -- negotiating from the standpoint of 242 would be difficult. here is the part i have trouble with, the suggestion that there would be a demilitarized palestine. i don't believe for one second that palestine would be demilitarized if it becomes a state. >> like in gaza. look, the overarching issue is this -- when israel negotiates,

it gives away something tangible, land. what does it get in return? a promise, a piece of paper. the united states for 30 years has is that ok, you engage in these negotiations, we will right the balance by giving to our own assurances. the bush administration in writing gave israel assurances in preparation for gaza with a drawl that it would not require a return to the 1967 lines. what obama did is carried out and if you do that, -- is tear eight out and if you do that, israel has no confidence in the future that assurances or anything. >> if you look at what happened last week, when there were these 16, 20 deaths right on the border with people trying to go over the fence, this was totally ad hoc -- >> different directions.

>> ad hoc in syria? >> let nina speak. >> this was not a massive invasion. it is not at all clear that the egyptians will stick with their peace agreement with the israelis. the arab spring may end of being an arab winter for a lot of people. if we want to preserve israel as a state where it is, it cannot be as in transiti 8 -- as intransigent as it has been paid charles makes it a good point, israel at points has been reasonable, but at other points in has not. i see the arabs agreeing with each other a more and more and helping each other more and more and the israelis in more and more trouble. >> the president also said in that speech that the united states supports the movement in

the middle east and he had tough words for syria. >> president assange has a choice. he can lead the transition -- president assad has a choice. he can lead the transition or he can get out of the white. the government must stop shooting, protesters. >> what did you think of that part of the speech, colby? >> our colleague charles krauthammer or hard about that in his column, and he is pretty much right at this -- wrote about that in his column and he is pretty much right at this track along with the george w. bush doctrine. but there were omissions the re. he did not talk about saudi arabia, and you cannot talk about autocratic regimes without talking about saudi arabia. he did not talk also about the reality of having to deal with each country differently.

there cannot be a one-size-fits- all approach to the middle east. >> david ignatius had an interesting piece on friday that said that the problem with the obama administration in the middle east is that they do not have a diplomat at the crack heads -- >> like brzezinski or kissinger -- >> or holbrooke, who was so reined in. it did seem like a very interesting idea that if you control the message so much, control your people so much, like george mitchell, so much, you can never get over the hump. by the way, the president did not say anything about george mitchell, who just stepped down, which seemed to me sort of a small. >> george mitchell, who succeeded in northern ireland but who just stepped down -- >> i believe a towering figure,

a man of enormous talent and commitment. underlying this whole speech, and i thought the president did of it, isirtually all th the reality that the arab spring occurred without the united states. the sap not because of us -- this happen and not because the bus or in spite of us, but quite apart from us. we are playing catch-up in much of this. bahrain, of course -- colby mentioned it saudi arabia -- the bahrain insurrection was put down by saudi troops. every time the saudis do something, there is a legitimate perception that the united states is part of it. important,oint is that the arab spring had been independently of the u.s. it was not about america, there

were no anti-american demonstrations or anti-israeli demonstrations. i thought he handled it well, except on to syria. the idea of assad leading the democratic reform now is insane. other than that, it was a good speech on. the spring. why would you end that speech on the arab-israeli dispute and create as the focus of everything when, in fact, you want to focus on the great occurrences in the revolution in the arab world, which holds the only hope for ultimate peace? i thought it was -- the timing of this, the placing of a new statement of american policy on the arab-israeli dispute in the middle of this was completely unwarranted and counterproductive. >> what was newt gingrich thinking? >> i made a mistake, and i called paul ryan today, a very

close personal friend, and i said that. >> what a politician has been around as long as he has, it is hard to believe he would step all over his role on acid on a program like "meet the press box -- his rollout message on a program like "meet the press." "i don't think are right wing engineering is any more desirable than left-wing and engineering." this looked like a clear shot at ryan's medicare overhaul. ryan said, "with allies like that, who needs the left?" >> he is done, toast, a collapsed souffle. he made a statement after that and democrats are already cutting advertisements using him to an attack not only ryan but every republican member of the house who supported the plan in congress. he is attacking the whole republican congress. newt actually said that if any

if anyan ad in which he uses the words that gingrich said -- if you quote me, you are engaging in falsehood. that is the statement of the year. you cannot top of that. >> jon kyl tried. he said something was not meant to be a factual statement. >> he is in big trouble. the question about image has always been one of the judgment and matured -- the question about gingrich has always been one about judgment and maturity, not whether he could be provocative and occasional interesting. he has now said that all questions about his personal behavior, past business dealings, are off -- out of bounds. americans don't hire a policy paper for president. they want to know whether in fact the person putting their finger on the bomb is somebody who is stable, who has judgment,

it was thoughtful and reflective. newt failed all those tests this week. >> we won't talk about this, but we will talk about this. >> and if you quote me, you are lying. >> there is one interesting aspect about this. it appears that to disagree with the ryan proposal in any way, shape, or four is the kiss of death in the republican party. >> give me another example. >> what do you mean? what he said made him fodder for right-wing radio -- >> no, it is the way he said at -- social engineering, radical plan. >> well, on that point, he is telling the truth. now he walks away from the facts, walked away from the truth, and he is the

charlatan he would appear to be. he wants to balance the budget, he is a thrifty guy, he says, that he has $500,000 worth of debt at tiffany's -- >> that he won't talk about. >> this man has more anniversaries than most people do. that is a lot of jewelry to buy. >> i am less interested in these ad hominems that i am in that it man and his ideas, and on that basis alone he will have insurmountable obstacles. >> huntsman is in new hampshire this weekend. should we be watching him? >> i think we will watch him go down. he is a moderate republican. >> which would make him appealing to independent voters. >> but not to republicans.

how does he win the nomination? >> he is moderate in modern terms. he probably is a bob dole republican. that used to be a pretty conservative republican. he is the press' darling. >> pretty early to predict that. >> the guy we have not talked about almost all these weeks is sitting back a very happy, and that is tom pawlenty. he is raising more money, getting his organization, the more we talk about everybody else, the more he benefits. >> historically, the republican race comes down to two factions within the party, the moderate and it versus the conservative 10. a republican pollster developed to this theory, and it is absolutely valid. it was mccain and giuliani competing to be the moderate candidate in 2008, and huckabee and a whole host of others.

it was huckabee and mccain who basically became the survivors. this is a test of whether in fact there is a moderate wing and still there. jon huntsman is laying claim to that, and i think mitch daniels will compete for that if he comes into the race. the real action and all the intensity and energy by now seems to be possibly on the conservative side. if that is the case, it will be a problem as it was for the democrats in 1972 when all the energy and action was on the left of its party candidate nominated george mcgovern, an admirable man who carried one state. >> a republican nominee who is best w -- who is ua squish -- they will vote against him anyway. >> huckabee i take his word when he backed off, but they are clamoring for him. >> there is also grumbling about rick perry. >> and michele bachmann.

>> sarah palin. we reached the debt limit, and the gang of six is now the gang of five. >> when you are at an impasse, the worst thing to do is to keep hitting her head against the wall until you break your head -- your head against the wall until you break your head. >> that is republican senator tom coburn of oklahoma. he has pulled out of the gang of six, a group of senators trying to find common ground on a debt reduction plan. what is the back story on this, mark? >> gangs don't work. we had a gang of a 14 that agreed not to vote against any judicial nominees except on the most extreme grounds. filibuster -- bostick and broken again this week -- busted and broken again this week. the pressures are just enormous. the special house race next tuesday in new york where it medicare could be the issue that

allows democrats to win a seat that has been republican since the cooling of the earth -- [laughter] you will not find many democrats saying, "let's compromise on medicare." republicans, grover norquist, anti-tax forces on the right put a lot of pressure on tom coburn. >> by the way, that was tom coburn and tim pawlenty. i misspoke. tom coburn is one of these people who just says what he thinks. he often votes against people who he really likes, for example. i believe that he was just tired of banging his head against the wall because they cannot come to an agreement. >> let me direct this question to our former banker on the panel. this week we had a debt ceiling -- hit the debt ceiling and don't take the rest of this program to put all the zeros in. what does it mean to the average taxpayer? >> at this moment is not mean

anything because we have not yet reached the threshold when we start to default on our debt. that happens later in the summer. what it means if that happens is that we will have economic calamity, if the u.s. defaults. you will see it immediately in the cost of everything, especially interest rates. >> didn't the treasury secretary say that he would have to suspend payments? >> it would be like lehman brothers. >> but he is doing that now for the time being -- >> he is moving money around to keep us going. it would be a calamity, although there are members of congress who still say, let's have it. it is crazy. >> look, as the sun rises in the east, the debt limit will be raised, but it will be a harrowing process and it should be. what republicans want is to make heroin, to make tim geithner and administration --m to make timwing,

geithner and the administration sweat, and many democrats are open to come in return, serious cuts, not promises or lock boxes, but real cuts. what we have now is a computer simulation. yes, there will be jitters on the markets, but you can end jitters with a push of the budget and raising the limit and it can happen overnight. if we run into a real debt crisis in a few years, we will not be able to undulate with an act of congress and we will not have the money and we will end up greece. >> i think charles gives a correct analysis and diagnosis, but the political reality is that there is less enthusiasm, virtually no enthusiasm, in the senate for that ryan budget passed by the house. mcconnell is not going to push it. i think that shows there's a predisposition to finesse this thing again, even though the

advantage politically is with the republicans and the house republicans forced the issue to debate real cuts for the first time. >> speaking of bankers, a word on the indictment of the recently resigned head of the international monetary fund. >> there is nothing that took place in that hotel room that could be construed in any way as consensual. >> that is the attorney representing the alleged victim, a 32-year-old hotel maid, with a 15-year-old daughter, and saw asylum in the united states years ago former head of the imf, dominique strauss-kahn, indicted this week on counts of assault. out on a $1 million bail now, he is being monitored electronically, 24/7. can he beat this rap, nina? >> anything is possible.

having said that, i reported this story a couple of days this week, and it is an amazing story of police work, among other things, because by the time they arrived at the hotel, the place was in an uproar. i think one of the cops -- i it said, why did they believe her? everybody in the hotel believed her. then they call out to the port authority and said at the airport, "do not let that plane take off." >> they brought in the special victims unit and all that stuff. how does a guy get himself in this position? >> he checks into the hotel, he goes upstairs, takes off all his clothes -- >> loaded question. you should never answered and a question. -- you should never answered and a question. -- answer that question. >> here is what bothers me --

when i was at the world bank, we always tried to maintain parity with the imf on administrative matters. when strauss, an admitted that he had a relationship -- when strauss-kahn admitted he had a relationship with the support and it at the imf, that was the time to step in and discipline in this guy and not just accept his mea culpa. that was the time to step in and say, "buddy, pack your bags." that did not happen at the world bank with paul wolfowitz. >> look, some people drive these high social logical -- high sociological conclusions about the arrogance of european bureaucrats. i think it is a sad story. if he did what he did, he is a bad guy. if he did not, he got a bad rap. i am not sure there any

larger a psychological or sociological implications. >> i do. power is too often accompanied by a real sense of entitlement, that the powerful are immune to ordinary life, and people without power connections, without resources, as this 32- year-old widowed mother of a 15- year-old daughter, immigrant herself. i stand in awe of the fact that the hotel authorities responded to her, the police responded to her, and they went after some and so powerful he had the president on his speed dial. >> last word. see you next week. for a transcript of this broadcast, log on to insidewashington.tv. vo:geico, committed to providing service to

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