>> how do you propose a new budget when you don't have a budget in the first place? "inside story" starts right now. ♪ good morning, everyone. i'm matt o'donnell. it's sunday, february 14th. happy valentine's day. as a treat, we have four insiders here to talk about some politics and other things. george burrell, attorney, joins us this morning. hi, george. val digiorgio, gop state official. good morning, val. jan ting, law professor. >> good morning. >> hi, jan. and sam katz, documentarian. >> good morning and happy valentine's day. >> thank you. you too. governor wolf proposes a new state budget while the state doesn't really have one in place right now. now, the democrat is required to present a new spending plan, and he did so, despite the irony of what was happening. wolf wants more education spending, higher taxes. blamed the republicans for the mess. republicans, who control the legislature, say their constituents don't want to pay

higher taxes and are irate at wolf's tone. and school districts across the state are starting to realize how long this has been and are getting furious about the gridlock and about not having the money they need to operate. another person who may be furious about this? sam katz. what do you think, sam? >> well, i'm not quite furious, but i would say this. this is very emblematic of where we are today in government. through reapportionment and through districting of various legislative districts, we've created districts which are not subject to competition. and in order to retain your seat, you have to play to your base, and often, whether that's the democratic base or the republican base, that makes it very difficult to find compromise. and we are not finding any compromise here. governor wolf doubled down on his budget, and i'm continually amazed that an m.i.t. phd has a difficult time counting to 103 and 26, which is what you need to get a budget passed.

wolf may be right about everything he wants to do, and his principles may be right. but he has to be able to pass a budget. and we're headed towards illinois. the state of pennsylvania is headed in the same direction financially from a credit-rating standpoint and from a national-perception standpoint as one of those states that doesn't work. >> val, you talk to republicans. you run the chester county republicans. what are you hearing from them? >> well, i disagree with sam a little bit. i think to blame it on reapportionment is a little bit of a stretch. i look at southeastern pennsylvania republicans who are in tough seats, a lot of them, and run tough races every year, but they are consistently saying one thing to me, which is, "we don't want to see higher taxes." pennsylvania families and small businesses pay enough taxes. the government's proposing $3 billion more in taxes. and the governor's locked these folks in by attacking them with mail and television campaign ads, a lot of times paid for by union money, which got him elected. and it's really locked in even

southeast republicans, let alone the more conservative republicans in the western part of the state. i do agree that reapportionment is sometimes an issue on the national level, but not in this fight. and the governor's doubled and tripled down on that with a speech the other day and his budget address that was really offensive to a lot of republicans. told them, "if you don't want to do your job, then go find another one." well, they think they're doing their job 'cause they're hearing from their constituents. "we don't want higher taxes." so, they're sticking to their guns. >> wolf got booed during his speech. >> but at the end of the day, all of these folks take an oath of office, and they don't take an oath of office that says, "i'm gonna protect the taxpayer." they take an oath of office that says, "i'm gonna do the job to protect the commonwealth of pennsylvania." commonwealth of pennsylvania, from the time ed rendell was governor through the corbett years, has been declining dramatically. we're, what, 49th in job growth? even if we increase the personal income tax at the rate wolf wants to do it, we'd be 39. what governor wolf has done -- and i actually agree with him. what he said is, "we can slow-walk our way into hades, or

we can fight it out now." and he's decided -- i think he says, "i don't care whether i'm a one-term governor. i'm not going to kick this can down the road." everybody knows we have a structural deficit. we cannot resolve a structural deficit without new revenues. now, where are those revenues gonna come from? people have got to put their arms around it. and what was funny, majority leader reed accuses the governor of acting like his 4-year-old child. well, the republicans are acting like, "i'm gonna take my ball and go home 'cause i don't like what he said." this is a contact sport, and it's made for adults. it's not made for children. >> jan, what do you think? >> it's a train wreck, and it's the governor's responsibility to find a way out of it. he's the governor. and in his speech -- you know, he has a constitutional obligation to present a new budget for the coming year. there's no problem there. but he's leaving no room for compromise. in that speech that he delivered, he made it clear, "i'm not gonna give you anything, and you have to vote for my budget. and i'm not gonna give you anything. i'm not gonna give you anything on pension reform. i'm not gonna give you anything

on privatization." he has to give the republicans something, and it has to be something big. and that's the way to compromise, even if he's right on the issues that he wants -- more money for education. he ran on that, and i think there's a lot of people that support him. but he has to compromise. he has to give the republicans something. and he can't engage in this name-calling. i think george is right. he's given up on compromise. he's not gonna compromise. he's just gonna go down with the ship. and he's just gonna take the whole commonwealth down with him. >> but last year, he compromised. he had a deal with the senate republicans. >> talking about the december deal? >> they had a deal. they compromised. he compromised. he said, "i compromised. we took this forward. we couldn't get it done. we got nothing out of it." it exploded. and i think he said, "look. i'm gonna stick where i was." i don't think he's unwilling to compromise, but he says, "i'm not gonna compromise in a way that compromises the future of this commonwealth." >> i think he's right. the framework that ended up

being on the table that seemed to have universal support in december i think was probably something we could have had in july or august because everybody made their line in the sand at the beginning. the senate republicans wanted pension reform. the house republicans wanted liquor privatization. the governor wanted more money for schools. there was a deal to be made. and politics is the art of the deal. and we are increasingly seeing that at the presidential level, as well, that candidates just take these extreme positions, which will, upon election, make the country ungovernable. and this country and this state really can't afford to be in that situation. >> tell me if you think this is a problem, as well. outside of schools, nonprofits, harrisburg itself, and people that rely on state services, generally, people in pennsylvania don't seem much different from not having a budget all this time. is that one of the issues here? >> except we're gonna get to the point where schools -- it's gonna make it very difficult to fund public schools, and that's gonna happen -- >> when would that happen? >> well, depends on the school district. school districts like tredyffrin-easttown and

downingtown can go for months and months, but philadelphia, lancaster, york, coatesville school districts, they may have some problems sooner. and then you'll start to see an outcry and a demand that they get something done on this. but one of the drivers in all this is pensions. and the governor -- yes, there was a framework, but the framework gave us half of a half of a loaf. they said only new employees would be covered by a 401(k), and even then, only half of their salary -- half then would be 401(k) and half of it would be a traditional pension. pension is driving $600 million more a year in costs to the state and to the taxpayers. you have to stop the bleeding, and this so-called framework, which, by the way, democrats wouldn't vote for the pension reform. it's one of the reasons it blew up in december. it did not stop the bleeding. we're gonna continue to bleed money, and it takes money out of public education and doesn't direct it to the classroom but rather to costly pensions. and that's part of the problem here. >> and the pension situation in the last 30 days, with the stock

market crashing, didn't get better. >> right. >> i think we had a $53 billion unfunded pension liability in psers and sers, the two main systems. both of them are probably understating that liability. >> let's hope they were all in bonds. >> they were not. >> not in equities. >> and sam was saying pennsylvania is becoming like illinois. illinois' big problem is exploding pensions. and that's why they're going down the tubes. and i agree. pennsylvania is headed in the same way if we don't get a handle on this. >> wrap this up, george. >> but we could all take an individual issue and make the case why that individual issue is a problem, whether it's pensions, whether it's liquor, whether it's education. the problem is how do you fix the problem? and we don't have adults, and i think one of the guilty parties are the third-party advocates -- the chambers of commerce and the outside folks who never want to antagonize anybody. they don't want to antagonize the governor. they don't want to antagonize the legislature. so, they talk about these things in generic kind of terms instead of rolling up their sleeves and lobbying the way they do on the issues that they have a real self-interest in.

unless you get that pressure, this issue is gonna continue. >> by the way, is this the shrewd businessman that governor wolf always said he was sort of emerging here, where, hey -- >> that's a fallacy. that's a fallacy. he inherited a company from his father, and then he and his cousins were co-presidents of a company. it's not clear that he had anything to do with day-to-day management. they actually shared three desks in a room. senator scott wagner talks about it all the time. it's not clear that he was the businessman he says he was. and he's certainly not governing as someone who understands the plight of small businesses. >> you guys want to respond to that real quick? >> you know, look. i don't know enough about governor wolf's business. i know he had a business that used to do this, and now it does that. and it saved a business, and it saved jobs. whether he was the driver, or he and his brothers were the driver, i don't know, but they did a good job. >> having campaigned for office as a businessman who was going to run government like a business, there's no connection between business and government. the business of business is run entirely for a different motivation and different

outcomes. and the business of government is about collaboration and democracy, and those are the skill sets that do not work in a business. >> good point. >> governor christie is done. the republican came in sixth in new hampshire, promptly headed back to new jersey. ended his campaign. looking back, i guess there's a lot of things we can talk about, but what do you think that governor christie did right or wrong? particularly, what did he do wrong or not do at all in his campaign? >> he ran. i think that was a mistake. i think after the bridge story -- i always looked at the bridge story, not that governor christie necessarily knew about it, but he operated in an environment in which people thought that would be okay. and if christie had put together the kind of candidacy and campaign that would have emerged as the nominee of the republican party, they would have killed him with that. he was, according to everything i've read, they were paying back a democratic mayor of fort lee, new jersey, for not

supporting a republican in a surefire re-election. that is vindictive to a level i don't think i've ever seen before. >> i also think the governor's problem -- it's not a question so much of what he did right or wrong. unfortunately, he was running as a personality. and donald trump took that away from him. i mean, once trump became the personality -- he wasn't running on substance. and that's why he got all around the country over the last several years, 'cause he was this dynamic personality who said what he meant. donald trump stole that turf from him, and he had no traction. >> it's hard to remember that in 2012, republicans were begging chris christie to get into the race, begging him with money. "please get in! there's money here." and he passed on that opportunity. that was his moment. and i agree. he never recovered from "bridgegate," nor should he have recovered from bridgegate. >> who would benefit the most from him supporting someone else, and would any of the other candidates want his support? 'cause you mentioned bridgegate. those trials are beginning in april involving his former administration officials. would another candidate -- bush,

kasich? >> he was, depending on which state you were looking at, 2 to 5 points in the polls. i don't know that his support would mean a lot for anyone. the question now is, does an establishment-type candidate emerge? this is likely to go on for months, as we go through south carolina this week and then the super tuesday. there's no reason to think that trump and carson, who together have over 60% of the vote when you add up the polls, that any establishment candidate's gonna be able to take them out. this could go on for months and months. bush has $72 million left. he's spending it like water in places like florida, which is months and months away, to attack rubio. this could go on for a long, long time, and i think it all inures to donald trump's benefit. >> i think the governor, if he's smart, if it goes on the way val says it is, and it very well might, the new jersey primary actually could become important. it's down the road. >> there you go. >> and if i were him, i'd just kind of sit tight. people want his donors. >> it's interesting that a week

ago, with cruz's victory in iowa, and marco rubio's surprisingly strong third-place finish that we started to think there was a direction to the campaign. a week later, who knows where it's going? and a week from now -- this is so unpredictable, and this is one of the craziest elections. >> let me talk about the democrats, and, jan, you can jump in on this because it involves delaware. clinton fell flat in new hampshire. did worse than what everyone expected. bernie sanders, i know, he's a senator from vermont, right next door, but he did have an impressive win. and then you had people bringing up joe biden's name again, including political operatives in hollywood -- bill bartmann, who's a prominent democratic donor. the biden thing just won't go away. will south carolina, nevada give more clarity and make people more comfortable with a clinton candidacy, you think? >> well, you know, the opportunity for big surprises is certainly out there. the big story for me out of new hampshire was the two big landslide winners on both the republican side and the

democratic side were anti-establishment figures who are sending the message, "the system is rigged." the system is rigged against working people and shrinking middle class in america. and that resonates. and that is the message coming out of new hampshire. people are listening to that message, and people are supportive. people are working longer hours, stagnant wages, living with job insecurity, worried about the future of their kids. that's the reality that's driving both the sanders campaign and the trump campaign. and so, that is the new reality that i think the campaign is facing going forward. >> twenty seconds -- anyone want to take it? >> i think if sanders does well in any of the states where he has been predicted not to do well, the shape of this race changes completely. >> i also think that biden is clinton. he's the old guard. he's not gonna bring a new guy -- >> then there's bloomberg. >> bloomberg, i think, is probably more realistic to talk about. >> okay, okay.

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(soft music) ♪ (colonial penn jingle) >> let's talk about the darrell clarke jobs plan for

philadelphia. the city council president announced this week he wants to create 10,000 jobs. that's good. how he plans to do it is a bit short on details. it does involve, according to clarke, public and private investment in transforming public and private buildings into greener and more energy-efficient structures. and he added his plan wouldn't even just create jobs. it would save $200 million a year because of the reduced energy costs. so, is clarke onto something, sam? >> i don't know if we spend that much money at the city and municipal government in energy costs. i can't even imagine that we do. but the idea of investing in the city's infrastructure, particularly a very, i think, severely diminished infrastructure, and creating jobs is a great thing. but the devil's in the details, and financing that kind of investment -- the city doesn't have that kind of money. and i think it would be hard-pressed to come up with the capital that's gonna be required to put 10,000 people to work. i think the obama administration wanted to put millions of people to work and spend billions of dollars to do it. whether philadelphia has the wherewithal -- and would need the state's help to do it, which, by the way, doesn't have

a budget. >> sure. >> but to his credit, darrell clarke is continuing to operate like a leader, and that's a great thing. >> i think you have to give him some credit. i know a little bit about these projects. i represent constellation energy. they do this. they go to school districts and municipalities and county governments and say, "we'll guarantee you a certain level of savings." and they have the wherewithal to back that up. and then you can go out, and you can actually get debt and finance that, those projects, to invest in energy-efficient boilers and replace windows and light fixtures. and they guarantee those savings. so, you can actually go out and finance these. the problem with clarke's proposal is there's not a lot of meat on the bone. billion dollars sounds like a lot. >> let me ask you about this, george. philly mag pointed out the fact that -- kenney was there. mayor kenney was there. but that it seemed like darrell clarke was being more the mayor in that situation. >> i think to sam's point, darrell for the last five, six years, has said city council is gonna be more policy- and program-oriented, and "we're

gonna think like that." i think that's the council that he's leading. and i think this does have the a potential to be a good program. the devil's in the details. but my concern is that we kind of do these ad hoc things, which are good ideas and are not part of comprehensive planning. then we get down the road, and there are unintended consequences, like gentrification has produced unintended consequences in the city. who's gonna get those 10,000 jobs and how do you train the people who are untrained? otherwise, you don't impact poverty. are you leveraging gentrification? we need comprehensive planning, not just ad hoc plans and ad hoc ideas, despite the fact this is a good idea. i think darrell clarke deserves credit for what he's doing. >> clarke recognizes the crisis in philadelphia, like the crisis in america, is all about the absence of good jobs. and to the extent that he says, "we need to create good jobs," he's absolutely on the money. but where is the money coming from? i think we're all in agreement that that's the root of the problem. there isn't money to fund these new public works jobs. >> well, we spent $475 million

last fiscal year amortizing unfunded pension liabilities. so, when you have that kind of a nut on a $3.9 billion budget, you don't have flexibility to make these kinds of investments. >> we'll see how it works out. kathleen kane... >> love her. love her. >> ...is pennsylvania's political survivor, and that's no joke. the pennsylvania senate held a vote that would have removed her from the attorney general's office. it failed to reach the two-thirds majority, with members voting along party lines. supporters had argued she cannot continue to serve with her law license under suspension by the state supreme court. she waits trial on perjury charges in august. and despite having written a few opening graphs of her obituary, kane continues to be the top law enforcer in pennsylvania. so, is she the new "comeback kid"? >> she's got a lot of gumption. i'll give her that much. joe scarnati said this week that kathleen -- senate president joe scarnati -- "kathleen kane's circus continues." keep in mind that district attorneys around the state are saying that they can't

refer cases to the attorney general -- and they have to sometimes -- because of the problems that are going on there. >> aside from the suspended law license. >> right, right. plus, the suspended law. there's also the possibility that convictions could be overturned 'cause they could say she didn't qualify to be attorney general, and, as a result, without her law license, those prosecutions were invalid. so, i don't think those will hold up, but you have all kind of turmoil going on here. meantime, she needs to stay in the race for attorney general so she can use her campaign-finance money to defend herself and to see she's running. and it really gets more and more bizarre. democrats sided with this mess, and i think it was a mistake on their part. >> sam, you seem enamored by her toughness, for one thing -- persistence. >> i don't believe she'll be the attorney general in 2017, but it's a story beyond belief. now, she has made a lot of mistakes, and she has brought on herself a lot of trouble. but with these pornographic e-mails, she has exposed a level

of communication, ex parte communication, between prosecutors and judges and with misogyny, racism, sexism that puts in question cases that have already been adjudicated in front of those very same judges. and it's the old-boy network. and to her credit -- whether it was politically motivated or morally motivated -- she has exposed a very stinky justice system in america. >> by the way, when is your documentary on her coming out? >> as soon as you make your investment, matt, i'll be able to tell you the exact date. >> my checkbook is in my locker. we got to go. "inside story" will be right back.

>> "inside story" is presented by temple university. temple fuels students with academics and opportunities to take charge. plugged into the city, powered by the world. temple.edu/takecharge.

>> "inside stories" of the week. we start with george. >> i don't know riley cooper personally, and i don't know the reason why the eagles let him go. i do know there has been a continuing anger in the african-american community over his racially charged remarks a couple of years ago, and there will be a celebration in the african-american community that we don't have to see him in an eagles uniform this year. >> thanks, george. val? >> well, matt, a couple weeks ago on this show, the panel discussed the philadelphia parking authority and its alleged attempts to regulate uber into obscurity. and vince fenerty from the parking authority called me. he wanted to set the record straight. he said all they're looking to do is make sure that the drivers for uber have background checks, they get some training, and their cars are inspected. and the general assembly is not buying that. they think that ppa wants to side with the cabbies and put uber out of business. so, this is gonna be a battle played out in the general assembly. >> okay. thanks, val. jan? >> this tuesday is the filing deadline for petitions to get on the april primary ballot, and we're gonna find out who the candidates are and in particular gonna find out whether

kathleen kane is serious about running for re-election. i think bernie sanders and donald trump are gonna win both the nevada and south carolina primaries. >> wow. okay, sam? >> i spent a week in detroit looking at the possibility of a new documentary and was really stunned that the attitude there post-bankruptcy -- this is the city that had the largest bankruptcy, municipal bankruptcy, chapter 9, in history. and there is a can-do spirit now and an attitude about a positive future that is both on the ground and in the boardrooms of detroit. and it's a very interesting thing to go from being the poster child of urban decline to being a city that may well lead the future of american cities. >> i grew up in philadelphia, but i was born in detroit. and i've talked to people that they share that very same sentiment. so, be fascinating to see your documentary. happy valentine's day, everyone. make sure you buy something for your sweetie. and we got south carolina coming up in about a week. we got nevada. we got the tuesday deadlines. so, lots more to talk about next week. i'm matt o'donnell.

that's "inside story." i'll see you monday morning on "action news," even though it's a holiday. 4:30 a.m. is the start time. i'm nydia han along with gray hall. coming up next on "action news," struggling to stay warm. the dangerous cold snap continues we're bracing for snow. plus, firefighters ballots smoke flames and ice after a massive fire breaks out in the freezing cold. a woman is rushed to the hospital after a shooting in olney section. those stories and the exclusive accuweather seven-day forecast and more next on "action news."

good afternoon, it is sunday, february 14, i'm nydia han along with gray hall. here's some of the stories we're following on "action news." bundle up if you're heading outside. the dangerous cold continues for a second straight day. and we are looking ahead to snow tomorrow. all lanes of a major highway are reopened after the